Monday's interesting reads

"The Biggest Housing Losers" WSJ editorial:

"You may not know it, dear reader, but Congress is playing you for a sap. During the housing mania, you didn't lend money at teaser rates to borrowers who couldn't pay, or buy a bigger house than you could afford. You paid your bills on time. As a reward for that good judgment and restraint, Barney Frank is now going to let you bail out the least responsible bankers and borrowers...

'I want to put the servicers on notice," the celebrated liberal [Frank] declared at a recent hearing. "If we see a widespread refusal on the part of servicers to cooperate voluntarily in what we see as an important economic problem . . . they can expect much tougher regulation in the future.'"

Nice threat. If you don't do something we want you to do voluntarily, you'll pay the price later on with increased regulation. Pick your poison.

"The Union Police" WSJ editorial:

"Unions that organize private companies are at least subject to market competition. If they make their employers uncompetitive, the union workers lose their jobs. Public unions have far more clout because there is no competition for government services; they are by law a monopoly. This is especially true of police and firefighters, who can do great harm to public safety if they strike. Unionization gives them enormous clout that drives up costs and eventually the tax burden."

"Keep America Open to Trade" WSJ op-ed by Carlos Guitierrez and Arnold Schwarzenegger:

"In every state of the union, such a[n isolationist] retreat would be disastrous for jobs, economic growth and consumer choice. Nowhere is this more clear than here in Torrance, Calif., where today we are visiting a Hitachi plant that remanufactures auto parts. This "foreign" company employs 16,000 Americans -- 8,000 in California alone -- and is just one of hundreds of overseas firms that invest directly in the U.S. From where we're standing, what America needs is more openness here and abroad -- not less...

Yet in the global trading system, America isn't just a buyer and seller, we're a huge investment magnet. That giant cash register sound you're hearing is the nearly $200 billion pumped into U.S. businesses from abroad in 2006 alone. Foreign-owned companies operating in the U.S. employ more than five million Americans, and a third of foreign direct investment is in the manufacturing sector. For the 8,000 Hitachi employees here in California, some of whom we will visit today, and the other 8,000 spread across the U.S., foreign investment is a no-brainer."

"Red ties and boys' pride" The Economist:

"Urban Prep Charter Academy opened in 2006, part of an effort to bring 100 new schools to Chicago's bleakest areas by 2010. Richard Daley, the city's mayor, announced Renaissance 2010 (“Ren 10”) in 2004; Chicago's business leaders created the Renaissance Schools Fund (RSF) to help support it. Backers of this ambitious scheme hope it will spur competition across the school district. On May 6th RSF held a conference to discuss the “new market of public education”.

At the core of Ren 10 is the desire to welcome “education entrepreneurs”, as RSF calls them. Ren 10 lets them start schools and run them mostly as they choose (for example, with longer days and, in some cases, their own salary structure); it also sets the standards they must meet. Schools receive money on a per pupil basis, and may raise private funds as well."

"Get Over The Gap" IBD editorial:

"[T]he deficit appears to be declining — after hitting repeated records in recent years. Exports are booming while import growth has slowed noticeably, due mainly to the slumping dollar.

On the surface, this looks like a good thing. After all, don't we want to buy less from abroad and more from our own country? The answer is no if it means that the U.S. economy has slowed and is no longer pulling its weight in the world.

Journalists and pundits call the smaller deficit an "improvement," or "good news." It isn't. We run a trade deficit not because we're uncompetitive or others protect their markets, two great economic myths; we run deficits because we're such an attractive place for investors from around the world to park their money. The deficit, in other words, is a sign of strength."

"Man Accused Of Providing Illegal Taxi Service" from Local10.com in Miami (HT: Club for Growth):

"A man who said he thought he was just helping a woman in need is accused of running an illegal taxi service.

Miami-Dade County's Consumer Services Department has slapped Rosco O'Neil with $2,000 worth of fines, but O'Neil claims he is falsely accused.

"I ain't running nothing illegal," O’Neil said.

The 78-year-old said he was walking into a Winn-Dixie to get some groceries when he was approached by a woman who said she needed a ride.

"She asked me, 'Do I do a service?'" O'Neil said. "I told her no. She said, 'I need help getting home.'"

O'Neil told the woman if she was still there when he finished his shopping, he would give her a ride. She was, so he did.

As it turned out, the woman was an undercover employee with the consumer services department targeting people providing illegal taxi services."

Why would this be illegal in the first place?

"Obama thinks we can be perfect (?)" by Arnold Kling at EconLog:

"I suppose that to most people, this is just another nice, feel-good statement [Obama: I believe in our ability to perfect this union]. But it alarms me. The desire for perfection is an excuse for endless intervention. Although earlier in the speech, Obama said,"I trust the American people to realize that while we don't need big government," perfectionism justifies unlimited increases in government power. If every flaw is curable, then it follows that we need to give government all the power it needs to implement the cure."

"More disasters in Asia" by Megan McArdle:

"There's an unreality to the horrific numbers that emerge from developing country disasters--Americans could be told that 500,000 had died in a Bangladeshi apartment building fire, and we'd just sort of nod and say how awful it all is. But Jesus, we are lucky. Economic development does a lot of things, but one of the best things it does is give us the means to cope with adversity. It's tempting to think that subsistence farming is less fragile than complex economies--after all, you can rebuild everything yourself. But development gives us surplus food. Roads for evacuees to get out and relief workers to get in. Doctors and drugs. Mosquito nets. Earthquake proof houses. Advanced storm warnings, and communications systems to distribute them. Construction equipment. Trucks, boats and cars. Emergency generators. Spare people to flood the disaster area with help. And lots of spare room for people whose homes and livelihoods have been destroyed.

It also--arguably--gives us democratic governments that have to worry about public opinion. There was a lot of noise after Katrina about how America didn't care about the poor people who were affected. I won't argue that we couldn't have done better before and after the storm; we could have, and should have. But the picture of America as oblivious to its people's pain looks pretty fatuous in comparison to a Burmese government that seems ready to let hundreds of thousands die rather than allow relief workers to infect its people with news of the outside world."

"Rethinking Ethanol" NY Times editorial (HT: Indur Goklany with Cato):

"The time has come for Congress to rethink ethanol, an alternative fuel that has lately fallen from favor. Specifically, it is time to end an outdated tax break for corn ethanol and to call a timeout in the fivefold increase in ethanol production mandated in the 2007 energy bill.

This does not mean that Congress should give up on biofuels as an important part of the effort to reduce the country’s dependency on imported oil and reduce greenhouse gas emissions. What it does mean is that some biofuels are (or are likely to be) better than others, and that Congress should realign its tax and subsidy programs to encourage the good ones. Unlike corn ethanol, those biofuels will not compete for the world’s food supply and will deliver significant reductions in greenhouse gases."

I think its funny they think they can pick the next thing that will work. Scientists, et al thought that corn ethanol would be it. They were wrong. They'll likely pick something that, as of now, will be a can't miss. Who knows what the adverse effects of that will be. It reminds me of FDR. I read it in The Forgotten Man and was reminded of it last night on a PBS documentary. FDR liked to experiment. If one thing didn't work, he'd try something else. If that didn't work, he'd try another thing. All the while, though, he didn't realize was that his large-scale experimentation prevented the rest of the people from small-scale experimentation. It's the small-scale experimentation (read: innovation) that drives recovery and problem-solving.