Rooted in Reason: Nurturing the Seeds of Liberty


Rush Jobs by maliab
September 6, 2011, 7:26 pm
Filed under: Economy | Tags: , , , , , , ,

It’s the jobs, stupid.  At least, that’s what the new call of the politicians (and political advisers) seems to be of late.  Personally, I always find it a bit surreal watching politicians talk about their plans to increase jobs.  As though our economy was powered by hot air and political promises.  Granted, sometimes one of them will stumble upon an economic truth. (Like the fact that the best thing they can do for the job market is remove some of the federal barriers to economic growth–especially the banking regulations and monetary policy that prevent small to  mid-range businesses from growing in this struggling economy.)  But then, likely as not, they’ll just pick themselves up and hurry off as though nothing has happened.

And now, many of us are faced with a conundrum on Thursday night.  Do we tune in to see President Obama unveil his “Jobs Plan”?  Or do we make sure we are properly stocked up on buffalo wings and chips and watch the first game of the NFL season?  It’s true that we are facing a serious unemployment crisis in this country.  On the other hand, it seems unlikely that the President was visited in the night by the ghost of Milton Friedman and saw the error of his big government ways.  And the Saints are playing the Packers, which could not only be a glimpse of the NFC playoffs, but carries major implications for millions of fantasy football rosters.  And I’m not the only one feeling less than enthused about what I secretly fear is the unveiling of yet another giant spending program.   Consider what Dr. Merrill Matthews, Resident Scholar for the Institute for Policy Innovation has to say:

Perhaps the most underreported story last week was the announcement from the Office of Management and Budget that the unemployment rate would likely remain in the 9.0 percent range throughout 2012. And this a week before the president plans to deliver to Congress and the nation a jobs package that is supposed to help create jobs.

So what is OMB telling us? You would think that if the White House and its relevant advisors had been developing a drop-dead jobs-creation package, OMB would have waited until after the speech and then released an analysis saying that unemployment would likely remain in the 9 percent range, but that number could be significantly lower if Congress adopted the president’s jobs plan.

So did the White House not consult with OMB about its jobs proposals? Or, more likely, is it that everyone in the administration knows that there’s nothing new or innovative in the jobs package, and that it likely won’t pass anyway because it costs billions of federal dollars the government doesn’t have?

Either way, the “anticipation factor” for the president’s speech is very low, because no one expects that his proposals—mired as the White House is in Keynesian economics and big-spending notions—would do any good anyway. No one, including, apparently, the president’s own budget office.

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Unstimulated by maliab
August 31, 2011, 9:07 pm
Filed under: Economy | Tags: , , , , , , , ,

The President will be unveiling his new jobs plan next week.  (Though when seems to be in doubt, as Rep. Boehner has indicated that Wednesday isn’t good for him and Congress, what with the GOP presidential debate and the last minute-ness of it all, and the White House has indicated that they’re not in love with Thursday as a day–with some commentators speculating that they don’t want to compete with the first NFL game of the season.)  If presidential conversation about jobs could create employment opportunities, we’d be at about 0% unemployment right now.

But, of course, it doesn’t.  And it turns out that buying jobs with huge chunks of federal dollars doesn’t do much better.

As the Weekly Standard points out, a study of the hiring practices of firms who received stimulus funds reveals that the stimulus package created as much job poaching as job creation.  Yet more proof (if we even needed it) that Keynesian economic theory so loved by this Administration seems to crumble in the face of the real world practice:

The Mercatus Center at George Mason University has just released an important new study on the hiring practices of firms that used stimulus funds. It’s fairly comprehensive, based on over 1,300 surveys of managers and employees. There’s been very little good empirical data on the stimulus thus far, so the study contains a lot of valuable insights. Among the findings by authors Dan Rothschild and Garrett Jones:

Hiring isn’t the same as net job creation. In our survey, just 42.1 percent of the workers hired at ARRA-receiving organizations after January 31, 2009, were unemployed at the time they were hired (Appendix C). More were hired directly from other organizations (47.3 percent of post-ARRA workers), while a handful came from school (6.5%) or from outside the labor force (4.1%)(Figure 2). Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy, organizations hired the employed about as often as the unemployed.

Put simply, stimulus funds caused more job shifting than job creation. Another key finding? Union-friendly wage protections kill jobs:

Among organizations required to pay prevailing wages, 38.2 percent thought that they could have hired workers at wages below the Davis-Bacon prevailing wage (Figure 3) while another 17 percent were unsure. This meant higher costs for the federal government and fewer jobs created.

Of course, merely having your economic philosophy proved disastrously wrong doesn’t seem much of a hindrance to the Left.  Talk about the power of wishful thinking.



Unconstitutional . . . Sort Of by maliab
August 17, 2011, 7:02 pm
Filed under: Health Care | Tags: , , ,

As you have no doubt heard by now, the 11th Circuit Court of Appeals has struck down the individual mandate portion of Obamacare, ruling that the Constitution does not allow Congress to require citizens to purchase health insurance.  That makes sense, as it tallies with that gut feeling you may have had that letting politicians decide that we were required by law to buy something is a dangerous path to travel.  The next thing you know, we’d all have statutorily-mandated commemorative Governor Abercrombie bobblehead dolls on our desks.  (Hey! It’s for the children!)

This is far from the first blow to Obamacare, which is reeling from the continual pummeling it has received since its controversial passage.  First, you had states’ attorneys and governors declaring their intent to fight it, then the court decisions started rolling in.  It’s pretty clear that we’re going to need a Supreme Court decision of some kind to put some of this confusion to rest, but it’s important to note that the victories we have seen thus far are not the death blow to the Obama healthcare plan.  Dr. Merrill Matthews of the Institute for Policy Innovation explains:

Although as a presidential candidate, Barack Obama criticized the mandate; now the Obama Justice Department says the mandate is absolutely necessary to make the law work.  It’s just one of many Obama flip-flops in his long and sordid drive to control virtually every part of the U.S. health care system.

Another of the important flip-flops playing a role in the 11th Circuit’s decision is whether the mandate is a tax.  In the fall of 2009, the president told ABC’s George Stephanopoulos in a televised interview that the mandate absolutely was not a tax.  Now, of course, the Justice Department claims it absolutely is.

But in its very carefully reasoned and well-written majority opinion, the 11th Circuit ruled that the mandate is a penalty and not a tax and that some parts of the law were severable from the mandate.  Let’s take the last claim first.

ObamaCare is 2,700 pages long and sticks the federal government’s nose in virtually every segment of the health care system.  Many of those regulations, restrictions and intrusions have little or nothing to do with the mandate.  For example:

  • The much-hyped “free” benefits added to Medicare and private health insurance last year;
  • The recent, and also much-hyped, requirements that health insurance cover all FDA-approved contraceptives, along with other services, without patient copays;
  • The Independent Payment Advisory Board (IPAB) that will soon morph into Medicare’s rationer-in-chief;
  • The Department of Health and Human Services Secretary Kathleen Sebelius’s heavy-handed approach to private health insurance, including efforts to monitor premium increases and punishing health insurers that don’t toe the administration line.

However, there are also good provisions, such as:

  • Establishing a regulatory pathway for “biosimilar” drugs;
  • And some important steps to reduce the fraud and abuse in Medicare.

The mandate to buy health insurance would have little to no effect on any of these, and many other, provisions.  Even many of the new taxes are not necessarily dependent on the coverage mandate.  They are intended to pay for Medicaid expansion and subsidized coverage for the poor, health care pork given to the states, high risk pools to cover uninsurable people (at least until 2014), health care clinics for the poor and many of the new “free” coverages mentioned earlier.

However, as big and intrusive as these steps are, they pale in comparison to the mandate to buy coverage or be penalized.  That provision allows Washington to micromanage every health insurance policy in the country.  If people are required to have coverage, then Washington must determine what kind of coverage is “qualified.”  And they will be very expensive, comprehensive policies—the only kind most liberals and Democrats think are worth having.

If the Supreme Court were to strike down only the coverage mandate as an overreach of the federal government’s constitutionally limited powers, the state-based health insurance exchanges might still function.  And the federal subsidies to help families with incomes up to 400 percent of the federal poverty level pay for coverage might still flow.  That’s because the government can provide families with a subsidy if they choose to buy health coverage in the exchange without demanding that they do so.

Click here to read the whole article.



Dale’s Energy, Transit, Taxes (and More) Update by grassroothawaii
August 12, 2011, 7:53 pm
Filed under: Economy, Hawaii Sunshine, World | Tags: , , , , , , , , , , ,

Today, we have another update for you from Dale of Charley’s Taxi on the latest headlines in transit, taxes, energy, zoning, and more.  Some highlights (or lowlights, depending on how you look at it) from this edition include the questionable relationship between the rail project and the unions, the probability of a “double-dip” recession, an analysis of what causes cities to grow or shrink, and the effort to empirically demonstrate the existence of media bias.  Enjoy:

QUOTES

The bulk of [budget cuts] will have to be found by cutting real military capability and as a result, accepting real additional risk to the country’s security. — Michael E. O’Hanlon, Brookings Institution

“I drank so much vodka I could barely stand up. But I had to get home somehow and decided to do something I had never done before. 

I took a bus.     And here’s the good news. I arrived home safe and sound, cozy and warm, and able to go to work the next morning.  

All of which is remarkable because I had never driven a bus before.” — Henry at AA meeting

The effect of the people’s agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go; with the result that they may all have to make a journey which most of them do not want at all. — F.A. Hayek

The al-Qaeda network is fully prepared to continue the jihad against the American infidels by launching deadly attacks, but your outdated and rusting transportation infrastructure needs to be completely overhauled for those strikes even to be noticed.— Ayman al-Zawahiri

TOP HEADLINES
The Debt-Limit Debate: Addressing Key Concerns, Veronique de Rugy, Jason J. Fichtner, Mercatus Center, George Mason University, 5/26/11

The Debt Ceiling: What is at Stake? Vernoique de Rugy, Jason J. Fichtner, MercatusCenter, GMU, 4/28/11

Glimpse into daily life in North KoreaJean H. Lee, David Guttenfelder, MSNBC, 7/23/11

Journey into North Korea, MSNBC PHOTOGRAPHS

The Official 1984 Reagan ScorecardJonathan Rowe, Paul Glastris,Washington Monthly,

How Government Regulation Affects the Price of a New Home, Paul Emrath, National Association of Home Builders, July 2011

Obama Undercuts Case for HSR and Rail Transit, The Antiplanner, 8/04/11

What the Budget Control Act Means for U.S. Defense, Michael E. O’Hanlon, Brookings Institute, 8/02/11

Why Did America Destroy Its Great Cities?, Frank Gruber, Huffington Post, 8/02/11

CBO: Federal Loan Guarantees for the Construction of Nuclear Power Plants, August 2011

Intoxicated on Independence: Is Domestically Produced Ethanol Worth the Cost?,Scientific American, 7/28/11

The U.S. May Need More Lawyers!, Clifford Winston, Robert W. Crandall, Huffington Post, 7/29/11

The Obama EPA’s Brave New Future, Heritage Foundry, 7/28/11

Higher fuel standards mean higher death toll, Washington Examiner EDITORIAL, 7/28/11


When it comes to population growth, Houston is No. 1, Rice University, 7/06/11 

News in Hawaii

CEO of troubled rail car company that won Honolulu bid steps down, Gene Park, Honolulu Star Advertiser, 8/05/11

Inouye, Akaka, Cantwell and Johnson Introduce Bipartisan Bill to Help Facilitate Business Travel, Trade with Asia-Pacific Region, Hawaii Reporter, 8/04/11

‘Sinkhole State:’ Hawaii is in the 47th Worst Financial Position of All 50 States,Hawaii Reporter, 8/03/11

Trains Helped Kill the Greek Economy – They’ll Kill Hawaii’s too, Panos Prevedouros, Fix Oahu, 8/01/11

The New Airline & Air Service Strategy Metrics, Boyd Group International, 8/01/11

American Airlines is dropping SFO-Honolulu this fall.

Honolulu Rail in Illegal Pact with Local Unions, Panos Prevedouros, FixOahu, 7/29/11

Ansaldo Honolulu’s parent firm rethinking rail car business, Gene Park, Honolulu Star Advertiser, 7/29/11

Rail Bid Judges Ignored Ansaldo’s Past Problems, Michael Levine, Honolulu Civil Beat, 7/28/11

New vehicle charging station powers up at Capitol garage, Honolulu Star Advertiser, 7/28/11

Solar Power Plant on Oahu Does not Pass Muster, Panos Prevedouros, Fix Oahu!, 7/27/11

Traffic Accident Investigation on Oahu: Stuck in the 1980s, Panos Prevedouros, FixOahu!, 7/28/11

TAXES & ECONOMIES

Brutal: Dow Plunges Amid ‘Double-Dip’ Recession Jitters, Guy Benson, Townhall, 8/04/11

Editorial: An Unwelcome Debt Milestone, Investors Business Daily, 8/04/11

US debt exceeds entire economy GDP, markets alarmed

Academic Panel Sees 50% Chance US to Plunge Into Recession, MoneyNews, 8/03/11

Political DerivativesNicole Gelinas, National Review, 8/03/11

Moody’s, Fitch: US Must Do More to Avoid Rating Downgrades, MoneyNews, 8/03/11

Where’s Your Budget, Mr. President?, Paul Ryan, Wall Street Journal, 8/03/11

Meredith Whitney: US Headed for Double-Dip Recession, Forrest Jones, MoneyNews, 8/02/11

What the Budget Control Act Means for U.S. Defense, Michael E. O’Hanlon, Brookings Institute, 8/02/11

Military Spending and the Budget Deal, Christopher Preble, Cato @ Liberty, 8/01/11

When a cut is not a cutRep. Ron Paul, The Hill, 8/01/11

Europe Declares War on American Ratings Agencies, Soeren Kern, Pajamas Media, 7/30/11

Finish the 710 Freeway, James E. Moore II, LA Times, 7/29/11

Crumbling transportation infrastructure could cost US $3.1 trillion, Metro Magazine, 7/28/11

African American Middle Class Eroding As Unemployment Rate Soars, John Roberts, FOX News, 7/28/11

Motorists’ Group Endorses “Trip Bonds” Legislation, American Highway UsersAlliance, 7/28/11

Solving the Long-Term Jobs Problem, Arnold King, Nick Schultz, The AmericanEnterprise Institute, 7/27/11

Greenspan: Fed Should Have Let Banks Fail, Greg Brown, MoneyNews, 7/27/11

Herman Cain Interview on Creating Jobs, Dick Morris, 7/27/11

Behind economic hard times, fear of the new, Robert J. Samuelson, Washington Post, 7/22/11

HIGHWAYS & BRIDGES, PPP & TOLLING, DRIVING ISSUES

DUI, Uninsured Motorists, Tolling, PPPs, Variable Pricing, RUCS and Sustainable Transportation

China falls in love with SUVs, Malcolm Moore, Telegraph UK, 8/04/11

Busting Congestion in Chicago (or Any other City), Reason TV, 8/03/11

Top 10 New-Car Deals for August, Jim Gorzelany, Forbes, 8/03/11

Taking transit – a testimonial at AA meeting, TollRoadsNews,  7/28/11

Golf cart drivers aim to be legal in small town, The Tennessean, 7/28/11

INRIX launches its Traffic app on Windows Phone 7 and BlackBerry cell phone platformsTraffic Technology Today, 7/25/11

New traffic camera website aiming to drive down congestion across the UK, Trarffic Technology Today, 7/25/11

6 Reasons Driving Has Peaked in U.S. CitiesEric Jaffe, Infrastructurist, 7/14/11

Replacing the Tappan Zee BridgeManhattan Institute, 6/22/11

INRIX TRAFFIC! App Now Available on App Store

TRANSIT
Frustrating, dangerous Metro problems for the disabled, Dana Hedgpeth, Washington Post, 8/06/11

Driving services help senior mobility without spending public money, Pamela M. Prah, Stateline, 8/04/11

Antonio Villaraigosa pushes bus-only lanes as MTA chairman, Ari Bloomekatz, Cornelius Pollmer, Los Angeles Times, 8/04/11

Low-Fare, Curbside Bus Operators Picking Up Amtrak Market Share, Don Stacom,Hartford Courant, 8/01/11

Chinese rail crash scandal: ‘official steals $2.8 billion’, Malcolm Moore, Telegraph UK, 8/01/11

China Imposes Blackout on Train Wreck Coverage, Sharon LaFraniere, NY Times,  8/01/11

With 210 injured, 35 fatalities, more concerns that government sacrifices people’s lives and safety for world’s largest public works project and cloaks failures in secrecy or propaganda.

A new third rail, The Economist, 7/30/11

Japan has operated bullet trains for 47 years without a fatal accident.

Report casts doubt on forecasts for California high speed rail, Dan Weikel, LA Times, 7/29/11

Cambridge used a now-obsolete survey method, made unrealistic assumptions, failed to properly analyze what would happen to ridership for varying levels of train service, and did not consider the impact of airline competition…But the bigger take away from all this is that there are now two independent reviews that show things are lacking here.

Al-Qaeda Claims U.S. Mass Transportation Infrastructure Must Drastically Improve Before Any Terrorist Attacks, The Onion,  7/28/11

Significant repairs and upgrades are needed for the militant group to consider destroying any roads, bridges or railways with terrorist attacks.

Using Market Processes to Reform Government Transportation Programs, Report No. 2: Improving Transit with Competitive Contracting, Wendell Cox and Ronald Utt, Heritage Webmemo #3312, 7/07/11

Public transportation has to change to remain viable, according to a new Heritage Foundation analysis. For decades, transit’s principal problem has been insufficient cost control rather than insufficient revenues. Over the past 25 years, transit’s operating cosdts have been approximately $15 billion (on a passenger mile basis). Had transit agencies kept costs within inflation – as most businesses do – transit would have been able to provide 40 percent more service in 2009. Without government unable to provide more subsidies, a much better solution is for transit systems to use competitive contracting to reduce costs and improve quality of service.  — Wendell Cox and Ron Utt

John Charles responds to Portland Mayor Sam Adams, John Charles, Cascade Policy Institute, 7/25/11

Los Angeles Metro Bus System Compares Favorably With Its Peer Group, Tom Rubin, New Geography, 7/28/11

KRM dead, Racine County to get back $300,000 in past rental car fees, Stephanie Jones, TheJournalTimes, 7/25/11

MetroAccess Knowingly Places Hundreds of Disabled Paratransit Passengers at Risk, Bus riders Union of Austin, TX, 4/02/11

ZONING, HOUSING & LAND USE

TODs, Eminent Domain, Property Rights

Plant a Garden, Go to Jail for 93-Days?! Nanny of the Month, Korchula Productions, July 2011

Growth controls = Housing Collapse, Sterling Burnett, National Review Online, 8/05/11

How Government Regulation Affects the Price of a New Home, Paul Emrath,k National Association of Home Builders, July 2011

Rural US disappearing? Population share hits low, Hope Yen, Associated Press, 7/28/11

Moving From The Coast, Wendell Cox, New Geography, 7/28/11

Program Offers Cash Incentives To Live Downtown, CBS Detroit, 7/25/11

In the five-year, $4 million “Live Downtown” program, first-time home buyers will get a $20,000 forgivable loan. Renters will get a $2,500 first year allowance, and $1,000 the following year. Employees who already own a home in the city will be given up to a $5,000 grant for exterior improvements.

Why Amnerica’s Young and Restless Will Abandon Cities for Suburbs, Joel Kotkin, Forbes, 7/20/11

When it comes to population growth, Houston is No. 1, Rice University, 7/06/11

Why Some Cities Are Growing And Others Shrinking, Dean Stansel, Cato Journal, Summer 2011

ENERGY & ENVIRONMENT

Beaver Fever Fanaticism: EPA Eco-Radicals Are Hurting Families at the Tap, Christopher Coffey, Pajamas Media, 8/07/11

Blame the Washington Bureaucracy for High Gas Prices, Rob Bluey, Heritage Foundry, 8/04/11

New Process Could Make Canadian Oil Cheaper, Cleaner, Kevin Bullis, MIT Technology Review, 8/03/11

GM Confirms Slow Chevy Volt Sales, Mark Modica, National Legal and Policy Center, 8/02/11

CBO: Federal Loan Guarantees for the Construction of Nuclear Power Plants, August 2011

Higher fuel standards mean higher death toll, Washington Examiner EDITORIAL, 7/28/11

Issa launches investigation into Obama’s new fuel economy standards, Andrew REstuccia, The Hill, 7/29/11

Grow Our Way Out, IBD, 7/29/11

President Obama Announces Historic 54.5 mpg Fuel Efficiency Standard, US DOT, 7/29/11

New NASA Data Blow Gaping Hole in Global Warming Alarmism, James Taylor, Forbes, 7/27/11

America’s power grid too vulnerable to cyberattack, US report warns, Mark Clayton, Jewish World Review, 7/28/11

The Obama EPA’s Brave New Future, Heritage Foundry, 7/28/11

Intoxicated on Independence: Is Domestically Produced Ethanol Worth the Cost?,Scientific American, 7/28/11

MISCELLANEOUS

Obama’s War on the Welf-Made Man, Lurita Doan, Townhall, 8/08/11

2011 Hall of Fame Shannon Shane speech, 8/07/11

Parents: Hone Your Kid’s BS Detector!, Doug Giles, Townhall, 8/07/11

DEA Letting Cartels Bring Drugs Over the Border, Helen Whalen Cohen, Townhall, 8/06/11

USPS Bailout on the Horizon, Trey Kovacs, Open Market, 8/04/11

Anti-terror plan allies White House with Muslim groups, Neil Munro, Daily Caller, 8/04/11

Documents: Feds allegedly allowed Sinaloa cartel to move cocaine into U.S. for information, Diana Washington Valdez, El Paso Times, 8/04/11

Communist Party USA Officially Endorses Barack Obama, Vision to America, 8/04/11

Policing Beltway Lobbyists, Jonathan H. Adler, National Review Online, 8/02/11

UCLA professor’s new book empirically demonstrates liberal media bias {VIDEO],Jamie Weinstein, 8/01/11

Plug-and-Play Batteries: Trying Out a Quick-Swap Station for E.V.’s, Bradley Berman, NYTimes, 7/31/11

The U.S. May Need More Lawyers!, Clifford Winston, Robert W. Crandall, Huffington Post, 7/29/11

Gunwalker: William Newell Circles the Wagons, Patrick Richardson, PM, 7/28/11

NHS delays operations ‘as it waits for patients to die or go private’, Martin Beckford, Telegraph UK, 7/28/11

3D printing: the technology that could re-shape the world, Shane Richmond, TelegraphUK, 7/28/11

Obama to Banks: We’re Not Defaulting, Charlie Gasparino, Fox Business, 7/25/11

Germany’s Choice – Part 2, Stratfor Global Intelligence, 7/26/11



Who Understands Your Money Better Than You? by maliab
August 11, 2011, 6:36 pm
Filed under: Economy | Tags: , , , ,

Surprise!  You may not know it, but you’re an economic genius.  Or above-average at least.  Assuming, that is, that you base your spending decisions on long-term appraisal of your income, government policy, and its probable effects.  Of course, if you do these things, than you’re probably more than a little frustrated and concerned about our current state of affairs.  But your worries and predictions about higher taxes and the inevitable problems that come with large-scale government spending are the bane of Keynesian economists (including the Obama Administration).  As Paul Gregory explains in his recent Forbes article, Obama and other Keynesians are prepared to laugh at the Tea Party members (and, it must be pointed out, followers of Milton Friedman’s free market principles) who actually understand the real state of things better than they, as they cling to their increasingly discredited belief that greater government spending grows the economy:

The appeal of Keynesian economics is its simple logic. If government spending for goods and services is part of GDP, then any increase in government spending must raise GDP.

As President Obama explained in a town hall meeting on Feb. 8, 2009:

“Republicans say this is not a stimulus bill but a spending bill. What do you think a stimulus is? That’s the whole point.” (Laughter from the crowd).

 

Keynesian economics is easy, even for stupid people. More thought and analysis are required to understand why it has not worked as it is supposed to. Keynesian skeptics must show that increases in government spending cause other components of GDP, such as consumption, investment, or exports, to fall. Such countervailing forces require more nuanced and sophisticated thought. They are not for the mentally lazy or those seeking simple answers.

Gregory goes on to list five principles from Nobel-Laureate Keynesian skeptics that demonstrate that our current course of government spending is disastrous.  Consider number two:

2) Crowding Out (Milton Friedman)

This proposition says that increases in government spending crowd out investment and even consumer spending. In its simplest form, it says that when the government borrows for spending, less capital is left for private investment and for consumers.

Gregory rightly takes offense at the fact that the Tea Party has been a subject of ridicule from those who accept the Keynesian theory without question.  Perhaps the Obama Administration and other adherents of this philosophy of government intervention and expansion simply resent the Tea Party crowd for not being stupid enough to accept their policies without question.



Driving Up Our Costs by maliab
July 28, 2011, 6:56 pm
Filed under: Limited Government | Tags: , , ,

I just bought a new car.  Well . . . new to me, anyway.  It was about as fun as a root canal and took much longer.  And if you’re not fortunate enough to be able to walk onto a car lot and pick something out without regard to price, room for car seats, gas mileage, probable maintenance costs, or any of the other hundred things that make a car purchase a difficult and stressful process for us ordinary folks, then you probably don’t have much to worry about with regard to the Obama Administration’s new federal regulations on fuel efficiency standards.  Unless you’re also concerned about the economic future of our country and automobile safety.  As the Heritage Foundation’s Mike Brownfield explains:

The Washington Post reports that the Obama Administration and the auto industry have reached agreement on new federal regulations that would raise fuel efficiency standards for cars and light trucks, hitting an average of 54.5 miles per gallon by 2025—a 40 percent reduction in fuel consumption compared to today.

Those new standards, though designed to reduce greenhouse gases, bring with them significant costs. Fourteen of Michigan’s 15 representatives in Congress—including Democrat Senators Debbie Stabenow and Carl Levin—wrote a letter to the President warning him of the consequences that draconian fuel efficiency standards could have for their state, the home of General Motors, Ford, and Chrysler, citing a report by The Center for Automotive Research which warned that overly stringent standards could add $10,000 to the cost of a new car. Heritage’s Nicolas Loris explains how those higher costs can lead to job loss:

Higher prices reduce demand and force people to hold onto their older vehicles longer. Reduced demand means fewer cars produced, which means automakers have to shed jobs. The Michigan-based consulting firm Defour Group projected that a 56 mpg standard would destroy 220,000 jobs.

In addition to lost jobs and costlier cars, forcing automakers to achieve those standards could result in a loss of life. In order to make cars more fuel-efficient, automakers reduce the weight of vehicles. As Reason reports, “a 2002 National Academy of Sciences study concluded that CAFE’s downsizing effect contributed to between 1,300 and 2,600 deaths in a single representative year, and to 10 times that many serious injuries.”

All the costs of the new CAFE standards aside, can the auto industry even achieve the high-mileage goals? Not without massive government subsidies. Reason‘s Shikha Dalmia explains:

[E]ven the Environmental Protection Agency admits that the market share made up by hybrids and electric plug-ins will have to touch 49 percent if the industry is to come anywhere near compliance. Given that these vehicles now occupy only 3 percent of the market despite hefty subsidies, it is a foregone conclusion that expanding their presence will mean massively expanding subsidies to them.

And, as always, these kind of increased costs always hit Hawaii a little harder.  After all, we already pay a little more for everything except leis and aloha spirit.

Is the Autoworker’s Union involved in this change?  Does the sun rise in the east?  Is the Pope Catholic? Does Donald Trump buy his hair in bulk?  The UAW actually reversed its earlier position on such regulations (previously based on the fear that the damage to SUV and truck production would cost jobs), teaming up with environmental groups to lobby for regulations that (not coincidentally) will require major retooling of the industry and major subsidies from the federal government.  Brownfield concludes:

And there you have it. The Obama Administration is issuing rules—without congressional approval—to significantly change the way the auto industry is doing business, forcing it to make vehicles that few are buying today (only 2,745 Chevy Volts have been sold this year). And in order to achieve that compliance, the Administration will likely have to fund the retooling plants and subsidize consumers’ purchase of the high-mileage cars. Meanwhile, the cost of gasoline is going up, yet the President has restricted drilling in the Gulf, leaving the United States unable to tap its domestic oil reserves.

The President’s environmental and energy policy is driving in circles. The costs are high, and the American people and businesses will pay the price.



Oh, Rail-ly? by maliab
June 23, 2011, 5:55 pm
Filed under: Economy, Limited Government | Tags: , , , ,

It looks like Hawaii isn’t the only state out there being seduced onto the shoals of building an expensive rail system by the siren song of federal funding.  Will Iowa (or Hawaii) find the captain that can tie himself to the mast of fiscal responsibility and resist the temptation of federal subsidies?  Governor Abercrombie hasn’t proved to be much of an Odysseus for us yet–at least in terms of leading us out of our directionless wanderings through high spending and budget woes, but one can always hope.  (And now, having beaten this metaphor into submission, I give you the news from Iowa.)

Unneeded Rail Project Extorts State Subsidies

The federal government is asking Iowa to provide at least $20 million in subsidies for a so-called “high-speed rail” line from Chicago to Iowa City — even though a faster, cheaper bus service is already available.

Luxury intercity bus service between the two cities, with plugs for laptop computers and free wireless high-speed Internet, takes 3 1/2 hours and costs $18. The rail service would take 5 hours and would likely cost at least $50, according to Wendell Cox, an adjunct fellow at the National Center for Policy Analysis.

On the New Geography website, he notes: “Only in America does anyone call a train that averages 45 miles per hour ‘high-speed rail.’”

Iowa would be required to provide the subsidies to match federal funding and buy trains, then spend more to operate them.

Even worse, the state funding would provide for only the first section of a planned rail line that would traverse Iowa and connect Chicago with Omaha, Neb., and in the long run this could cost the state hundreds of millions of dollars. The estimated cost of a similar line from Chicago to St. Louis has skyrocketed from $400 million to $4 billion.

Cox concludes: “The Federal government is again offering money it does not have to entice a state to spend money that it does not have on something it does not need.”

While the Obama administration continues to focus on the need for high-speed rail, for the third year in a row intercity bus service has been the fastest growing mode of intercity travel, outpacing air and rail transportation.

New Geography observes: “The comeback of the intercity bus is noteworthy for the fact that it is taking place without government subsidies.”




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