Damaging Spending
The board game Monopoly first took off during the Great Depression. A different game has become popular during today’s Great Recession. In this game, politicians race against high unemployment to create jobs in order to save their own. The players (politicians) have unlimited tax and borrowing authority, and can call upon
friendly economists to help them maneuver. The players even get to keep score, although the media can penalize
shoddy scorekeeping. Ultimately, voters will decide which players win and lose in the fall elections.
This weekend while watching a football game with a friend, I saw a commercial for Pepsi “
Throwback.” This is a new product containing real sugar instead of high-fructose corn syrup. My friend was incredulous when I explained that soft drinks manufactured for sale domestically generally don’t contain sugar because government protection of the U.S. sugar industry from imports make its use cost-prohibitive.
The Wall Street Journal ran the story last week: “U.S. Now a Renters’ Market.” Apartment vacancies hit a 30-year high in the last quarter of 2009, and rents are falling in most markets. For current or former homeowners trying to stumble out of the debris left from the government-fueled housing bubble, a renter-friendly environment is a positive opportunity.
According to AgWeb.com, “Midwestern U.S. farmland provides investors the best opportunity and risk to reward” in the world. Five factors were analyzed, including soil content, growing season, and infrastructure. But it was the last two, property rights and government support, which caught my attention.
Neal McCluskey
wrote an op-ed on the ways that taxpayers subsidize college football bowl games. As a college football fan, it pains me that I can’t even get a respite from big government on game day. This Wednesday’s
matchup between Central Michigan and Troy will be particularly insulting to taxpayers because it’s the annual GMAC Bowl.
There is a lot of talk in the press about the difficulty small businesses are having obtaining credit. President Obama recently admonished bankers for not lending enough to small businesses. However, it seems obvious that lenders would have a more difficult time finding creditworthy borrowers during a recession. So we don’t need a politician who has demonstrated zero accountability to taxpayers second-guessing lenders, who are accountable to shareholders and markets.
A couple of weeks ago I discussed a New York Times report on soaring food stamp use. Yesterday, the New York Times reported that cash welfare use in New York under the federal Temporary Assistance for Needy Families program started to rise more recently. The Times calls this “something of a riddle” given that food stamp usage has been increasing throughout the recession.
U.S. Department of Housing and Urban Development Secretary Shaun Donovan recently gave a speech in New York in which he spoke of a “new direction in housing.” If there’s one constant with cabinet secretaries, it’s that they all promise that their department will be new and improved. The following are a few of Donovan’s lines that deserve comment.
A couple of weeks ago I
wrote about a story in Wired regarding the Department of Energy’s Advanced Technology Vehicles Manufacturing Loan Program. The gist was that government subsidies to particular manufacturers are putting non-recipients at a competitive disadvantage in obtaining private capital. The author, a former Tesla Motors official, noted that “this massive government intervention in private capital markets may have the unintended consequence of stifling innovation by reducing the flow of private capital into ventures that are not anointed by the DOE.”
In the early 1990s, two Federal Reserve studies on mortgage lending were held up by proponents of interventionist government as proof that banks were discriminating against minorities. The government swung into action with lawsuits against allegedly discriminatory lenders, HUD started pressuring Fannie Mae and Freddie Mac to target the “underserved,” and the Community Reinvestment Act was enhanced to pressure lenders into lowering their lending standards. A decade later, the housing bubble,
which was fueled by short-sighted government policies, burst and the financial well-being of many minority families crumbled along with it.
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