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POPSThe Bailout, Fannie Mae and Freddie Mac, The Fed and Monetary Policy The Cato Institute has been following the crisis in financial markets since the very beginning. From the sub prime crisis to Fannie and Freddie to the $700 billion bailout, the recent financial events have given our analysts and experts plenty to talk and write about. We decided to pull together the op-eds, podcasts, reports, and publications from our scholars on this issue, so all these resources can exist in one place. We hope it’s a useful tool for your research. "The Bush Legacy: Deflation or Inflation?," "The Greenback and Commodity Prices," "Milton Friedman: Float or Fix?," "Washington Is Quietly Repudiating Its Debts," "The Greenback and Commodity Prices," "Polluted Markets," "The Fed Plays With Fire," "Greenspan's Bubbles," "Keep Complaining about the Economy, "Asset Bubbles and Their Consequences," more op-eds, podcasts, reports, and publications at link: http://www.cato.org/special/financial_crisis/
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POPSBailout Marks Karl Marx's Comeback Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout. If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him. At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments. So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets? The rationale for intervening always seems to centre on the fear of reliving the Great Depression.
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POPSThe Tyranny of Paramilitary Police Raids and SWAT Teams Great article and podcast from CATO on police extremism (terrorism) that is akin to fascism and contrary to the principles of "proportionate" responses to evidence of crimes, etc. The recent example of a Mayor in Maryland being held at military-style gun point (with his wife and mother-in-law) , after they shot his dogs is what sparked this issue more. These "over the top" police tactics must be stopped. Police increasingly are "swarming", using their paranoid principle of "overwhelming force", which is overwhelmingly irrational, yet is supported by politicians who want to appear "tough on crime", while being ridiculous. They mention in the short podcast that what you see on TV is not representative of what really happens commonly in these SWAT and other raids.
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POPSAs Soon As That Woman Opens Her Pitbull Lips There is nothing but false rhetoric and downright dumb schmitt coming out. What an obvious fraud being dumped on by the Repugnant Party. Like last ditch attempts to see how uninformed the American public really is and how little they think they must do to shove this schmitt down the throats of the voters.
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POPSWaPo: 'Obama Tax Plan Would Balloon Deficit' -- "It's not unreasonable to say, 'We're inheriting a budget that's going to have substantial deficits into the future'....But after we've been saying, 'Bush has irresponsible policies we can't afford,' he will be asking us to replace them with different policies we can't afford,' " said a Democratic congressional aide, who spoke on condition of anonymity so he could speak candidly. -- "Leaving some of the tax cuts in place would cost us a small fortune," said Rep. Jim Cooper (D-Tenn.), a member of a group of conservative House Democrats known as the Blue Dogs who have been adamant about following pay-as-you-go rules. "I don't know that any Blue Dog has a good way to pay for that." Perhaps we should recommend closing the deficit a bit by imposing a tax on newsprint paper, just to see how comfortable the Washington Post and other tax-hiking newspapers are with raising taxes on everyone and everything.
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POPSIt's Good to be a Corporation in US! More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts. The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S. Dorgan and Levin have complained about companies abusing transfer prices -- amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities.
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POPSConservatives At Odds With McCain But perhaps more importantly, he has long been an advocate of entitlement reform. He was early an ardent support of personal accounts for Social Security, and has pushed for serious Medicare reform, including means-testing. Almost alone among Republicans, he opposed the disastrous Medicare prescription drug benefit. "On domestic policy, he has shown a disturbing predilection for elevating every personal pet peeve, from steroids in baseball to airplane service quality, to a federal issue. And, he has embraced heavily regulatory environmental policies and compulsory national service. Like George W. Bush, he tends to support federal power over federalism, executive authority over legislative, and generally leans toward the imperial presidency. For believers in individual liberty and limited government, it's a decidedly mixed bag. But, then again, aren't they all?"
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POPSRon Paul Launches "Campaign For Liberty" In "The Libertarian Voter," David Boaz, Cato executive vice president and author of The Politics of Freedom, writes: "Recent polls suggest that 10 to 20 percent of Americans hold 'fiscally conservative, socially liberal' or libertarian views. Indeed, libertarians are a bigger share of the electorate than the much-discussed 'soccer moms,' and they are increasingly a swing vote.
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POPSU.N. Chief Addresses Food Crisis On Tuesday The answer lies not in any outsized surge in world demand or fall in world supply, but in the fact that several countries, including China, have imposed duties, quotas and outright bans on agricultural exports. ... Today, each country wants to curb agricultural exports and stimulate imports to reduce prices. But if every country limits exports, the result is a decline in world imports, so prices rise instead of falling. Solving the problem may require coordinated international action. After the Great Depression, the world community created the Global Agreement on Tariffs and Trade -- which later morphed into the World Trade Organization -- to negotiate simultaneous cuts in import barriers by major trading powers. This coordinated approach thwarted free riders, and gradually gained acceptance by all."
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POPSMcCain Foreign Policy--Democratic Jihad, Neocon Militarism John McCain's foreign policy exposed by Cato Institute podcast (about 7 minutes). Dangerous "Rogue State Roll-back" foreign policy which is Wilsonian and militaristic, even taking more aggressive positions toward China and Russia. Objective non-partisan analysis that shows the dangerous consequences of McCain's view of spreading democracy by force and arming dissident groups in countries to overthrow their governments.
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POPS The Politics Of Freedom: David Boaz (continued) heading early Wednesday for a new round of speeches, rallies and town meetings in West Virginia, which holds its primary on May 13," The New York Times reports. "Highlighting the financial woes of her campaign, Mrs. Clinton has lent her campaign more than $6 million over the last month, according to campaign officials." "Republicans have been trying to drive libertarian voters out of their party. But so far Democrats aren't jumping on that opportunity."
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POPS Analyst Warns of $200/Barrel Oil* *One barrel of crude oil is 42 gallons (or $4.76 per gallon) In the Cato-at-Liberty blog post "Is There an Oil Price Bubble?" Cato senior fellow Jerry Taylor writes: "The most recent Fed actions to combat the deteriorating state of the macroeconomy added even more fuel to the oil price fire. With market actors increasingly convinced that the Fed is willing to entertain inflation in the course of injecting liquidity into the market, investors are looking for investments to hedge against inflation. And what do you know? Returns on commodities have historically been better during inflationary periods than during non-inflationary periods. Ben Bernanke thus sent another strong infusion of cash into commodity futures -- again, largely into oil and gas futures.
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POPSFeds Urge Leniency For Homeowners Only under the temporary 'hothouse' conditions in mortgage markets did they seem to qualify. Second, people who have no equity in their homes cannot meaningfully be said to be owners. When times turn tough, they will walk away. They were effectively renters, not homeowners. "The crisis will end when housing markets hit bottom and the prices of mortgage securities stabilize. Banks also need to unwind their positions in exotic financial derivatives. The Fed needs to understand it is facing a capital crisis, not a liquidity crisis. The very low interest rates on safe assets show there is ample liquidity in financial markets. The Fed should not supply capital. That is the job of markets, and they are doing it."
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POPSCongress Considers Cellulose Ethanol In the Cato-at-Liberty blog post "Wishful Thinking on Cellulosic Ethanol," Indur Goklany, author of the Cato book The Improving State of the World, writes: "If cellulosic ethanol proves to be as profitable as its backers hope, farmers will divert even more land and water to producing the cellulose instead of food. All this means we'll be more or less back to where we were. Food will once again be competing with fuel. And land and water will be diverted from the rest of nature to meet the human demand for fuel.
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POPSCato Institute Warns of Unjust Texas Sect Trial and Child Custody Seizure The Texas polygamist sect trial is dangerous precedent. This must-hear 9 minute Cato podcast warns about government exceeding its authority and the dangerous precedent of its unchecked powers (including CPS) where there is clearly a lack of evidence for the inflammatory claims. 400 children, most under 5, are being separated from their parents without any substantiation of claims of abuse, and the initial call was a fabrication from an impostor. This is an excellent presentation of the facts with sober analysis of a violation of government power and a very dangerous legal precedent is being established where the laws of evidence are being trampled. (How would you react if CPS or the government took your children based upon false accusations and distorted information?) Note also, as he states, that as of 2004, marriage was lawful in Texas down to 14 years of age, with parental consent. Click link
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POPSSubsidies And High Crop Prices
Dooley says the net impact is bad for the food producers he represents. "For most American farmers, they're producing commodities—they're seeing their best years ever. But for farmers that have to feed grains and corn to livestock, they're seeing very tough times.... The policy is having a significant adverse impact on a significant sector of our agriculture, while I admit it is helping some farmers." These higher costs are also seen in consumers' grocery bills, and that has made ethanol subsidies an issue in Washington. Democratic Sen. Chuck Schumer of New York this month proposed legislation that would end the 54-cent-per-gallon tariff* as a way to stop a spike in milk prices. "There are a lot more milk consumers than ethanol producers in New York. He's hearing an earful from his constituents," Griswold says of Schumer. *The federal government gives preferential treatment to domestic, corn-based ethanol in the form of a 54-cent tax on imported Brazilian ethanol.
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POPSDemocratic Candidates Long To Renegotiate NAFTA U.S. manufacturing is not in decline. Quite the opposite is true. Output, revenues and profits in the sector all achieved records in 2006, and preliminary government data indicates that new records were set in 2007. American factories remain the world's most prolific, producing 2.5 times the value of Chinese output. ... Between 2000 and 2003 there was a pronounced manufacturing recession, during which 2.8 million jobs in the sector were eliminated. The two candidates extrapolate from that statistic to assert that 3 million manufacturing jobs have been lost since 2000 on account of bad trade deals, like NAFTA, as though the trend were continuing. That's wrong. ... If trade had something to do with the loss of those 2.8 million jobs between 2000 and 2003, imports weren't the culprit. Manufactured imports did not increase at all during those three years. U.S. exports, however, dropped off by 11 percent during that precise period.
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POPSTime Running Out For Farm Bill (continued)_Over the last 20 years, the opportunity cost to American consumers and taxpayers of supporting agricultural producers has totaled over $1.7 trillion. The harm to agricultural producers abroad, including many developing countries, does not help U.S. foreign policy. American intransigence over reducing farm subsidies is a significant impediment to a successful conclusion to the Doha round of world trade talks. It is time for the government to get out of the business of managing agricultural markets and supporting the incomes of farmers, many of whom are relatively well-to-do."
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POPSBush To Speak On Reducing Greenhouse Emissions (continued)_Net emissions rise. There also isn't any viable legal instrument that will significantly alter the rate of warming. The Kyoto Protocol, which is pretty much moribund, would reduce surface warming by 0.07 degrees Centigrade every fifty years, an amount too small to measure. Kyoto failed because, by and large, no nation could meet its modest emission reduction targets."
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POPSLamar Alexander R-Tenn Sees Chance To Nix Real ID Act “Congress created Real ID, and they can do away with Real ID,” said Jim Harper, director of information policy studies at the Cato Institute and the author of a book on identification laws and technology. “Not a single state is going to be in compliance with the law by May, and the program has been failing from the start.” Citing the law’s unfunded costs and big-government approach, Alexander told Homeland Security Secretary Michael Chertoff at a March 4 subcommittee meeting about his plans for the amendment. Like many critics, one of Alexander’s biggest concerns is cost. He points out that while some estimates of the implementation of Real ID come to $4 billion, federal officials have appropriated only $60 million and distributed only $6 million. At least 19 states have passed measures stating their opposition. “If you pass a bill without hearings, you’re going to miss stuff. And the authors of Real ID missed a lot,” Harper, of the Cato Institute said.
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POPSLawyer Funds Challenge To Washington Firearms Ban >>>Supreme court tests right to own gun<<<In what is being billed as the most important firearms ruling in a generation, the US supreme court begins hearing a case tomorrow that will decide whether Americans have a personal right to own guns. The city of Washington DC has outlawed gun possession for more than 30 years, but a 65-year-old security guard is challenging the rule which he says prevents him from keeping a gun at home to protect his family. If the supreme court strikes down the city's ban, considered the nation's strictest gun law, the floodgates could open for legal tests on rules limiting gun ownership in the US.
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POPSAs Good As Cash, Until It’s Not "The Federal Reserve is taking bigger steps to ease the nation's credit crisis, including increasing the amount of loans it plans to make available to banks this month to $100 billion," the Associated Press reports. The auctions serve as short-term loans to get banks the cash they need to keep lending to their customers."
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POPSTime For America To Extricate Itself From Such A Potentially Disastrous Predicament "It would be unwise for the United States to risk war with an emerging great power like China to defend a small client state that is merely a peripheral interest. That would be true even if that client state were making a serious effort to provide for its own defense. But Taiwan is not willing to make a serious defense effort. It is time for America to extricate itself from such a potentially disastrous predicament."
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POPSPutin Says Kosovo Independence Is Illegal Indeed, if we attempt to buy peace at the expense of law, we might find out we end up with neither. If the Russians (and possibly the Chinese) oppose revision of Resolution 1244 to grant Kosovo effective independence, and if the United States and its allies ignore these concerns and endorse the Ahtisaari plan , the reverberations will be felt well beyond the Balkans."
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POPSThe Biggest Big-Government Conservative Candidate Most of the leading Republicans running for president show some support for Bush's ideology, but no other candidate so completely embodies it. As governor of Arkansas, Huckabee dramatically increased state spending. During his two-term tenure, spending increased by more than 65 percent — at three times the rate of inflation. The number of government workers increased by 20 percent, and the state's debt services increased by nearly $1 billion. Huckabee financed his spending binge with higher taxes. Under his leadership, the average Arkansan's tax burden increased 47 percent, according to the Arkansas Democrat-Gazette, including increases in the state's gas, sales, income, and cigarette taxes. He raised taxes on everything from groceries to nursing home beds.
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POPSThe History of Cabbage This is interesting, but it doesn't talk about how it got to China. Mustard plants grow wild in China, so perhaps the Chinese cabbage was independently derived through a selective process similar to the one that produced the European cabbage. Otherwise, there is a big gap between East Asian Cabbage communities and the European Cabbage communities. (Since the cabbage doesn't seem to have any historical presence in the Middle East or Central Asia - I could be wrong...)
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POPSHistory Lesson: Bloated Republican Spending, W. and the 109th Congress Some of the rightwingers are trying to make hay over Nancy Pelosi having spend $16,000 over the course of a year for flowers. Many of which are used to entertain foreign dignatories who visit the U.S. at the request of the Bush White House. When you compare that to, (1) the record spending and deficits of the Republican controlled 109th Congress, and (2) Bush never casting a single veto to stop a spending bill, you see how desperate the Republicans are. Shjould we talk about the $2 trillion dollars of waste in Iraq? This article is from the Cato Institute. A conservative think tank (possible oxymoron).
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