Krugman And Today's Policies: This Is Nothing Like 1937 - Sean Trende [Real Clear Politics]
Paul Krugman has spent the past three years inveighing against any immediate steps to reduce the growth in government spending on the grounds that we would merely be repeating the mistakes that Fed policymakers made in 1937. In that year, spending cuts and insistence on a balanced budget catapulted the United States into a deep recession, one that essentially spelled the end of the New Deal.
On Monday, Krugman doubled down, claiming that policymakers had progressed past 1937, and that we were risking a repeat of 1931. That was the year things really fell apart, when policymakers failed to contain a banking crisis in Austria, which eventually resulted in the spread of a global contagion, bringing down governments worldwide -- and bringing the Great Depression to its crushing denouement.
The European debt crisis is certainly something to be concerned about, but let’s step back a moment and be clear about something: at least in terms of policy, this is nothing like 1937, much less 1931. And if anything, 1937 tells us more about of the dangers of real-world Keynesian experimentation than anything else... Read the Rest
Suckerball - Walter Kirn [The New Republic]
LOTTERIES, BY DEFINITION, are for losers. You enter them with an evanescent sense of grandiosity and optimism, but beneath this delusion lurks the knowledge that you wouldn’t be buying a ticket at all if you believed you had a fighting chance of obtaining the prize by normal means. Then the winner is chosen—always some distant stranger who’s notably lacking in your best traits—and it becomes insultingly apparent that you can’t beat the system by any means, including the one that you just vainly tried. The game is not only rigged against you; it isn’t really a game. It’s a stone rip-off.
Given these gloomy psychological facts, it’s somewhat surprising, even slightly shocking, that Barack Obama and Mitt Romney have embraced the sweepstakes as a fund-raising, mailing-list-building tool—and at a moment when middle-class Americans have started to fear they’re permanently out of luck. These contests are generally announced by e-mails ostensibly sent by the candidates’ family members who use a breathless, faux-familiar tone to convince donors to take a shot at securing something the families get for free: proximity to the great man. If the pitches came from the lobbyists and fixers who usually have to pay dearly for such access, they might sound marginally more genuine, but this would remind folks that face time with our leaders is indeed a priceable commodity, not a windfall to be gained by accident... Read the RestTime To Occupy State Pensions? - Walter Russel Mead [The American Interest]
The biggest scam going in American financial life may be the collusive effort by Wall Street, the political class, and public sector unions to use union retirement money to prop up Wall Street speculation.
Step One: state politicians promise big pension and health care benefits to their unionized work forces, but don’t set aside enough money to fund those benefits when the bill comes due. This makes union leaders and unions look good, because they can point to the shiny new benefits they have negotiated with the politicians. Meanwhile, it makes the politicians happy because the unions support them with contributions and volunteers at election time, but because the unions don’t insist on full funding for the benefits, the politicians don’t have to raise costs or otherwise disturb the big majority of voters who don’t work for the government.
Step Two: Make aggressive assumptions about the rate of return on pension investment funds. This has two consequences: it covers the gap between promise and reality (for a while), thereby postponing the day when the politicians have to face the voters and the union leaders have to tell their members that those beautiful benefits were bogus from the start. But the other purpose, equally important, is that it forces America’s public sector pension funds into the deep end of the financial markets, leading pension funds to be major investors in hedge funds, derivatives and various other not-for-the-widows-and-orphans investments. If these work out, great — the funds hit their investment targets and the benefits, or at least some of them, get paid. If they go awry — as many did in the last few years — then the pension problem turns into a crisis... Read the RestWill President Obama's Reelection Doom Fracking? - Editors [Investors Business Daily]
One more reason not to re-elect President Obama to a second term was provided last Friday, when Heather Zichal, the top White House energy aide, told reporters that she expects the Interior Department rules regulating hydraulic fracturing, dubbed fracking, to be completed by year's end.
Why are federal rules necessary since fracking has been successfully regulated at the state level for decades without a single documented case of groundwater contamination by fluids used in the process? Unless the regulations are so restrictive as to effectively end fracking as an energy tool in the name of safety, as has happened with offshore drilling and coal... Read the RestClass Struggle - Pete DuPont [Wall Street Journal]
Much has been written about the choice we face just 19 weeks from now, when we will select the next president. But while we discuss the almost polar opposite views of Barack Obama and Mitt Romney on spending, regulation, taxes and health care, we shouldn't lose sight of another very important issue: education.
While the candidates have some areas of agreement, their beliefs about education are still quite different, and the impact on our nation's youth of a second Obama term versus a first Romney term would be significant. Not surprisingly, given their differences on most other issues, Mr. Obama's approach more closely follows the status quo, pro-teachers-union track, while Mr. Romney's more closely follows the reform, pro-student track. Mr. Romney's plan includes vouchers that would give disadvantaged children, particularly those in failed schools, and their parents the option of moving to a school of their choice... Read the RestFlashback of the Week