Fed Up with FED - Thomas Sowell

May 7,2011

When people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don't want us to understand.

It was an act of war when we started bombing Libya. But the administration chose to call it "kinetic military action." When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it "quantitative easing" of the money supply.

Those who are true believers in the old-time Keynesian economic religion will always say that the only reason creating more money hasn't worked is because there has not yet been enough money created. To them, if QE2 hasn't worked, then we need QE3. And if that doesn't work, then we will need QE4, etc.

Like most of the mistakes being made in Washington today, this dogmatic faith in government spending is something that has been tried before-- and failed before.

Henry Morgenthau, Secretary of the Treasury under President Franklin D. Roosevelt, said confidentially to fellow Democrats in 1939: "We have tried spending money. We are spending more than we have ever spent before and it does not work."

The idea that the federal government has to step in whenever there is a downturn in the economy is an economic dogma that ignores much of the history of the United States.

No economic downturn in all those years ever lasted as long as the Great Depression of the 1930s, when both the Federal Reserve and the administrations of Hoover and of FDR intervened.

 The myth that has come down to us says that the government had to intervene when there was mass unemployment in the 1930s. But the hard data show that there was no mass unemployment until after the federal government intervened.
 
Yet, once having intervened, it was politically impossible to stop and let the economy recover on its own. 

That was the fundamental problem then-- and now.

Karl Rove - Electorial college 2012

May 6, 2011

President Barack Obama will be hard-pressed in 2012 to hold on to three traditionally Republican states — Indiana, Virginia, and North Carolina — that he narrowly won in 2008, GOP strategist Karl Rove writes in The Wall Street Journal.

Read more on Newsmax.com: Rove: 2012 Electoral College Map Favors GOP
Important: Do You Support Pres. Obama's Re-Election? Vote Here Now!

That difficulty, coupled with Obama’s sketchy approval numbers in the crucial swing states of Florida and Ohio could spell trouble for his re-election chances.

 All the Republican nominee needs is those five states, plus a victory in any one of nine additional states in which the Democratic president is now vulnerable.

 

05-04-2011 Geo. Wills (Federalism)

George Wills

Illinois, comprehensively misgoverned and ravenous for revenue, has enacted what has come to be called an “Amazon tax.” It requires Amazon and other online retailers to collect the state’s sales tax. Amazon and many other retailers responded by severing their connections with their Illinois affiliates.

Federalism — which serves the ability of businesses to move to greener pastures — puts state and local politicians under pressure, but that is where they should be, lest they treat businesses as hostages that can be abused. According to the Tax Foundation, Illinois has not only the fourth-highest combined national-local corporate income tax in the nation but also in the industrialized world.

A study by the Illinois Policy Institute, a market-oriented think tank, concludes that between 1991 and 2009, Illinois lost more than 1.2 million residents — more than one every 10 minutes — to other states. Between 1995 and 2007, the total net income leaving Illinois was $23.5 billion. The five states receiving most refugees from Illinois were Florida, Indiana, Wisconsin, Arizona and Texas. Two are Illinois’ neighbors, three have warm weather, two — Florida and Texas — have no income tax. In January, a lame-duck session of Illinois’ legislature — including 18 Democrats who were defeated in November — raised the personal income tax 67 percent and the corporate tax almost 50 percent. This and the increase — from 3 percent to 5 percent — in the tax on small businesses make Illinois, as the Wall Street Journal says, “one of the most expensive places in the world to conduct business.”

05-04 IBD

Why Can't We Learn From Others' Failures?

Posted 05/03/2011 06:49 PM ET

Alternative Energy: Like a man living out a fantasy, President Obama is still pressing his green energy agenda. But a glance at other experiences tells him it won't work. Why does he think he can do what can't be done?

'Instead of subsidizing yesterday's energy sources, we need to invest in tomorrow's," Obama said in his weekly radio address of April 23. "We need to invest in clean, renewable energy."

It was only one of several opportunities the president has taken lately to play green huckster. He seems dead serious about coercing the country into a renewable energy regime in the same way he rammed through his health care overhaul.
And just as ObamaCare will prove to be ruinous, so too will the green energy scheme.
Consider Germany. It began a renewable energy program that has neither paid off nor lived up to its green promise. This unsurprising conclusion is found in "Economic impacts from the promotion of renewable energies: The German experience" published by RWI, a German research center.
That country's program "is often cited as a model to be replicated elsewhere," RWI notes, but it's a model "without merit."
It adds: "Although Germany's promotion of renewable energies is commonly portrayed in the media as setting a 'shining example in providing a harvest for the world' (The Guardian 2007), we would instead regard the country's experience as a cautionary tale of massively expensive environmental and energy policy that is devoid of economic and environmental benefits."
To ensure that 12% of the country's electricity is generated by renewable sources — a European Union goal — Germany in 1991 adopted a feed-in law requiring utilities to buy power from independent producers and place it on their grids. As is always the case with government do-good programs, this mandate forced costs higher.
Solar power, for instance, cost 62 cents per kilowatt-hour while conventionally produced electricity cost 3 cents to 10 cents per kilowatt-hour.
Wind power costs were 300% higher than conventional power. This jacked up average household electricity prices by 7.5%.
While such an increase is unlikely to drive anyone into poverty, it's enough to affect a family's budget. Imagine, as well, how high the electricity rates would go if the portion of renewables larger than 12% were required by government.
Spain also has had an unpleasant experience with renewable energy. The country tried to establish a green economy — and failed. Gabriel Calzada Alvarez, a professor at Juan Carlos University in Madrid, found that "the Spanish/EU-style 'green jobs' agenda being promoted in the U.S. in fact destroys jobs."
For every green job created by the Spanish government, Alvarez found that 2.2 jobs were destroyed elsewhere in the economy because resources were directed politically and not rationally, as in a market economy.
Researchers from the Italian think tank Istituto Bruno Leoni have published similar findings about their country. There, "each green job cost 6.9 jobs in the industrial sector and 4.8 jobs across the entire economy."

With this information available, why would anyone continue to push green energy schemes? It takes an overbearing arrogance for someone to believe that the laws of economics must bend to his will.