Archive for the ‘economy’ Category

Ron Paul on Freedom Watch

Thursday, June 4th, 2009

Ron Paul appeared on yesterday’s Freedom Watch with Andrew Napolitano. Freedom Watch is a web only news show hosted by former Judge Andrew Napolitano.
Ron Paul is right we should have allowed GM to go bankrupt months ago. Keeping GM alive these several months was just a waste of money but then maybe it is cheaper than unemployment insurance for all those workers. Ron Paul is right to say that the Republican Party has given up the right to provide opposition to these bailouts by supporting them when George Bush was in power.

The argument often made in favor of why Republicans supported the bailouts is that we were in an emergency and something had to be done. Yes, we were in a bad situation but there is little evidence that government action has helped to solve the crisis. The Government always uses emergencies as an excuse to take on more power and do things that the people would not normally approve of.

He Started It

Wednesday, March 11th, 2009

Barack Obama has pointed out to journalists that “it wasn’t under me that we started buying a bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement -– the prescription drug plan — without a source of funding.” As Micheal Tanner of Cato puts it “He Has a Point.” Many Republicans in Congress, as well as some conservative commentators like Rush Limbaugh, have been extremely hypocritical in attacking spending now that Obama is in power and not causing a stir when Bush was in charge.

This does not excuse the bad behavior. If big spending was bad when Bush was in power, big spending is bad now. In many ways, the Democrats often sound like two kids quarreling tattling “He started it” to excuse bad behavior.

Recession Rap: Jadakiss Edition

Friday, February 13th, 2009

Jadakiss is the latest enter into the fray with his new song called “Hard Times” with Barrington Levy. Compared to other recession rap that has been released this song seems a lot darker lyrically.

Bailing Out Investors Bad Decisions

Tuesday, September 30th, 2008

The United States is economy is in pretty bad shape right now. The economy is in such poor shape right now that we must hand over at least $700 billion to the Treasury Secretary to purchase bad debt from Wall Street.

The reason many people say we need a bailout is to make up a string of bad decisions made on Wall Street. From what I understand the problem is that Wall Street firms continued to create securities consisting of worthwhile and worthless mortgages that eventually created convoluted securities than no wants any more. If no one continues to buy these securities, banks on Wall Street will lose lots of money, which it feared will create a credit crisis that will mean it will be more difficult for consumers and businesses to borrow money.

I remain unconvinced that this bill is a good idea. $700 billion is a lot of taxpayer money equal roughly the cost of Iraq war to date. The federal government does not have this kind of money to spend over a short period of time due to Congress inclination not to limit spending or raise taxes this bill will probably largely be financed through government spending which will push us further into an economic crisis. Sure the bill may not actually cost $700 billion, some people think the government will actually make money off the bailout but the bailout could alternatively cost more than $700 billion since 700 billion is just a figure basically made up by the Treasury Secretary.

The bailout goes against the way capitalism works. Capitalism is a system of economics based on profit and loss. Traditionally in capitalism, people who are more productive and make a profit are rewarded, the opposite side of the coin is that people have to take losses when they make bad decisions. The people who invested in mortgage securities whose worth is not clear made bad decisions. If you take away the downside of bad decisions, you will just encourage people to engage in riskier decisions without any regard to whether or not they will be profitable; economists call this moral hazard.

The House of Representatives did vote down the bailout yesterday but the bill is not completely dead. It appears as the bill will be reintroduced in the House of Representatives on Thursday after Congress returns from the Jewish holiday.

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