"I think the economy is the issue in this election right now, and for most Americans there is this pent-up frustration that people are just not addressing it in a way that makes sense to them. I happen to think that we’re ready for a president again who really does take on these interests in a strong, heart-felt, effective way. And that’s why talking about the gas tax, by contrasting my position with both Sen. Obama and Sen. McCain really does seem to resonate with people. Because they really want somebody who’s going to stand up for them." -- Hillary Clinton
I posted the following comment (edited for errors):
"Effectively what Hillary is saying is that Americans want politicians to dumb economics down for them. Or worse, they’re saying, “We don’t care about the economics, we want you politicians to say you’re going to put some money in our pockets right now. We don’t care how you get it, where it comes from, or the ramifications or putting it there. We want money.” The truth, apparently, doesn’t resonate well with the American voter. Well, it at least doesn’t resonate well with the people she’s asking to vote for her."
"No Way to Treat the Customers" by Daniel Ikenson with Cato:
"Blaming trade for all that ails is a time-honored political tradition. Acting on that impulse by imposing trade barriers or otherwise retreating from the global economy is never the proper course, but it would be particularly foolish in the current environment, where industry after industry is experiencing and benefiting from an export boom.
That boom couldn’t be happening at a better time. In the past, when the U.S. economy slowed, the world economy slowed along with it. But with the recent awakening of demand in long-slumbering developing economies, growth remains strong in many parts of the world. The U.S. economic slow down might therefore be short-lived, as export growth keeps the economy moving ahead. That is unless policymakers do something to risk U.S. access to foreign markets.
That boom couldn’t be happening at a better time. In the past, when the U.S. economy slowed, the world economy slowed along with it. But with the recent awakening of demand in long-slumbering developing economies, growth remains strong in many parts of the world. The U.S. economic slow down might therefore be short-lived, as export growth keeps the economy moving ahead. That is unless policymakers do something to risk U.S. access to foreign markets.
Treating the customers with disdain and hostility just might be the plan that kills the golden goose."
"Why Hillary's Harmless" by Bryan Caplan at Econlog:
"My assumption is that neither candidate would actively promote free trade, so the greater evil is the candidate who can "get things done." Given Obama's winning personality, and Hillary's divisiveness, I'm fairly confident that Hillary would do less harm. She may want moderately worse policies, but she'd have a lot more trouble getting others to go along with her...
In terms of policy, Hillary and Obama look extremely similar to me; I prefer either to McCain because I think they're more likely to get the U.S. out of Iraq. But Hillary worries me a lot less than Obama because leaving Iraq is likely to be her only major political success. Hillary has a built-in army of enemies, and she's making more enemies every day. (I've talked to Obama supporters who hate her more than Rush Limbaugh does!) Obama, in contrast, is genuinely likeable. At least during his honeymoon period, he might be able to unite the country behind a long list of "progressive" reforms. And that's what makes him dangerous to liberty.
In short, people who hate Hillary's (domestic) policies should hope that Hillary beats Obama, because he's a lot more likely to deliver on her promises than she is."
In short, people who hate Hillary's (domestic) policies should hope that Hillary beats Obama, because he's a lot more likely to deliver on her promises than she is."
"Summers on Tax Competition" by Greg Mankiw (HT: Arnold Kling at Econlog):
"This issue [of tax competition] goes well beyond economics to questions of political economy and political philosophy. If you think it is the job of government to take from Peter to pay Paul, and if Peter can move around the globe, then you need international tax cooperation. Otherwise, some countries will become nations of Peters, leaving all the Pauls to fend for themselves.
On the other hand, if you think that the main job of government is to facilitate voluntary exchange by protecting property rights, rather than re-slicing the economic pie as it sees fit, then tax competition is a good check against excessive interventionism. In other words, are you more worried about too little government or too much?"
Arnold Kling adds:
"[H]ow big a share of GDP would the Federal government have to control before you would worry about government being too big? I mean, unless you have a totally romantic notion of government as the embodiment of the will of the people (and I don't think Larry [Summers] would make that defense), there must be some upper limit. Right now, the Federal government directly controls roughly 20 percent of GDP, and indirectly it controls more through regulation, mandates for state governments. etc. If that's not too much, then what is? 30 percent of GDP? 50 percent of GDP? 75 percent of GDP?"
As a side note, I saw in this article in The Economist that French public spending as a percentage of total French GDP is around 50%. To answer Arnold's question, that's too big for me by multiples.
"Our view on consumer protection: Feds take overdue first step to curb credit card abuses" USAToday Opinion (HT: Don Boudreaux at Cafe Hayek):
The article talks about the "unfair credit practices" of card issuers and mentions some proposed rules (and my comments).
"Ban issuers from raising interest rates on existing balances, except in a few circumstances that are clearly communicated to consumers, such as when a teaser rate expires or a consumer is more than 30 days late. The ability to raise rates 'at any time and for any reason' has been one of the most detrimental and unfair to consumers."
People like to think that interest rates are arbitrary and reflect the whims of their banks and the card issuers. In fact, interest rates reflect risk. There are different kinds of risk that are priced into interest rates. Pretty much all of them are set by the "market" (the collective actions of hundreds of borrowers and lenders acting independently). Credit risk (the risk that the borrower will not pay back what he owes, or default) is largely borrower specific. The lower the lender perceives the credit risk of lending to a given card applicant, the lower the interest rate. (This is why the more consistently you pay your bills on time, the better your chances of getting a lower rate.) The more risky borrowers are perceived to be, the higher the rate.
Pretend for a minute you are the card issuer and you decide to give two people credit cards. They appear to have very similar risks of defaulting, so they are given the same interest rate, say 6%. As time goes on, the first person pays off her bills each month, having a $0 balance at the end of 12 months. The second person, on the other hand, has generally added about $1000 to his bill each month (he only pays the minimum), leaving him with a $12,000 balance at the end of 12 months.
So, based on this scenario, which of the two presents the greater risk of defaulting on what they owe? Obviously the answer is the second person. Which is more risky to you, the card issuer? Since interest rates reflect risk, which would require the higher interest rate? In this case, it's safe to assume that the reason the second person's balance grows from month to month because he spends more money (and, by extension, borrow more) than he has cash to spend. If cash outflows (cash plus credit spending) exceed cash inflows (income), it's easy to come to the inclusion there is a good chance the card issuer isn't getting its money back. Why shouldn't the issuer be able to raise the interest rate?
"Bar issuers from applying all payments exclusively to the balance with the lowest rate, such as a teaser rate, while letting balances with higher rates continue to grow. That assures higher profits for lenders and tends to undo any consumer benefit that the promotional rate offers."
Why wouldn't they apply it to the oldest loan? That's the riskiest balance, since it's been outstanding the longest.
"Prevent issuers who target consumers with poor credit histories from charging fees so excessive they amount to more than half the credit being offered."
The worse their credit report, the bigger risk they pose. I don't know what these fees are, but they probably help the issuers earn a return closer to the risk they are assuming by lending to them. After all, they can't legally charge over a certain rate. If the fees go away, the lenders aren't compensated for the risk, so instead of simply earning less on the loan, they will choose not to lend in the first place. Now people with poor credit histories have to turn to other avenues for cash, such as payday loans (not that they are bad, but they are a less-desirable avenue) or illegal loan sharks.
Don Boudreaux quoted the following from Jeremy Benthem's "Defense of Usury":
"The legislator, who knows nothing, nor can know any thing, of any one of all these circumstances, who knows nothing at all about the matter, comes and says to him—"It signifies nothing; you shall not have the money: for it would be doing you a mischief to let you borrow it upon such terms."—And this out of prudence and loving-kindness!—There may be worse cruelty: but can there be greater folly?"
"How not to address the food crisis" on Free exchange at economist.com:
"What's interesting to me is that the proper policy responses suggested by this analysis generally involve market liberalisation--the elimination of American biofuel subsidies, the relaxation of GM regulations, and the abandonment of policies designed to encourage small but inefficient farmers. The solutions adopted by governments, by contrast, have been decidedly illiberal. Ethanol supports continue, and Asian nations have suspended exports and banned food futures trading. Governments are moving in the wrong direction."
"The “will of the majority” is not the best way to decide public policy, whether or not you agree with the majority. The founders specifically wanted to protect the minority from the imposition of the majority. These kinds of issues should be left to the individual to decide.
If it were up to me, there would be no referendum and all laws that restrict the sale of alcohol would be removed; people would already have the freedom to choose for themselves whether they want to purchase alcohol on Sunday. If the majority didn’t want to purchase, they wouldn’t, but they wouldn’t try to impose their religious views on others."
"Big Farm whips Big Oil" at Republican-American (HT: Club for Growth):
"When an oil company reports its profits increased 14 percent or 16 percent in the previous quarter, politicians, journalists, greens and consumer groups are quick to claim price gouging, and to call on Congress to revoke Big Oil's taxpayer subsidies and impose a windfall-profits tax.
Imagine the furor if Exxon-Mobil's profits ever spiked 42 percent. Or 86 percent. Or 1,964 percent. Well, agriculture giants Archer Daniels Midland Co., Cargill Inc. and Bunge Ltd., respectively, logged those profits in the last quarter, largely because of the same misguided energy policies that are helping to fuel Big Oil's more modest success. But no one said boo about Big Farm's enormous, taxpayer-subsidized windfall profits, even though they are inflicting more damage on household budgets than anything Big Oil has done."
Can anyone really be surprised?
Letter to constituents by Georgia Lt. Gov. Casey Cagle (HT: AJC Political Insider):
“As a Georgian with strong religious beliefs, I oppose Sunday sales of alcohol for individual religious reasons. However, I recognize we live in a democracy where the wishes of the majority must be respected. For this reason, I have not opposed a referendum that will allow voters to choose whether or not to allow Sunday sales.
I posted the following comment:While I would vote against such a change at the ballot box, I do not believe the Legislature should deny the voters of our state a chance to make this choice for themselves and their community.”
"The “will of the majority” is not the best way to decide public policy, whether or not you agree with the majority. The founders specifically wanted to protect the minority from the imposition of the majority. These kinds of issues should be left to the individual to decide.
If it were up to me, there would be no referendum and all laws that restrict the sale of alcohol would be removed; people would already have the freedom to choose for themselves whether they want to purchase alcohol on Sunday. If the majority didn’t want to purchase, they wouldn’t, but they wouldn’t try to impose their religious views on others."
"Big Farm whips Big Oil" at Republican-American (HT: Club for Growth):
"When an oil company reports its profits increased 14 percent or 16 percent in the previous quarter, politicians, journalists, greens and consumer groups are quick to claim price gouging, and to call on Congress to revoke Big Oil's taxpayer subsidies and impose a windfall-profits tax.
Imagine the furor if Exxon-Mobil's profits ever spiked 42 percent. Or 86 percent. Or 1,964 percent. Well, agriculture giants Archer Daniels Midland Co., Cargill Inc. and Bunge Ltd., respectively, logged those profits in the last quarter, largely because of the same misguided energy policies that are helping to fuel Big Oil's more modest success. But no one said boo about Big Farm's enormous, taxpayer-subsidized windfall profits, even though they are inflicting more damage on household budgets than anything Big Oil has done."
No comments:
Post a Comment