Paul M. Jones

For now, the only two elements of the political system are Progressive Corporatism and The Resistance. And the latter does not amount to much yet.

Why I Fear a One-Party State, Arnold Kling | EconLog | Library of Economics and Liberty.

Count me as part of the Resistance, I guess. Fat lot of good it seems to be doing.

No, really:

President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

via Obama Says U.S. Long-Term Debt Load ‘Unsustainable’ (Update2) - Bloomberg.com.

He doesn't seem to be acting as if he believes it, though.

Neumont University is devoted to pumping out a steady stream of experts in computer science -- the only major that students can choose. The 6-year-old school places its graduates in high-tech jobs at such companies as EBay Inc., Microsoft Corp. and IBM Corp. If trends hold up, more than 90% of the 59 students graduating with bachelor's degrees today will find work within three months.

But surrounding introverted computer programmers with other introverted computer programmers creates unique challenges for school administrators. Employers praise the skills of Neumont's graduates but complain about their computer addictions and difficulty socializing with colleagues. For their part, some students grumble that their peers spend too much time playing video games and too little time in the shower.

So in addition to the intricacies of computer science, Neumont is trying to teach its students how to get along better in the real world. Administrators forced them to close their laptops in class, established social clubs and required them to take courses in interpersonal communications and public speaking.

The efforts have met resistance. After all, students ask, what's the purpose of attending a place known affectionately as "Geek Heaven" if you're not free to geek out whenever you choose?

via At 'Geek Heaven,' students are skilled in tech, if not talk - Los Angeles Times.

Every tax day, a handful of lefties pen paeans to the federal government, and how they do and the rest of us should feel inspired, patriotic, and invigorated when we pay our taxes.

...

The sentiment is particularly misguided this year, as we begin year seven of a misguided war waged under false pretenses; we’re hearing new revelations every day about how the federal government has systematically violated our constitutional rights, and the human rights of others; and the government is spending billions, and risking trillions, to prop up private companies that took stupid risks and should have gone out of business for doing so–despite that the majority of the public opposes the bailouts.

Still, I always want to ask people who write these articles, why not pay more than your fair share, then? If greed (i.e., wanting to keep as much of your own money as possible) is evil, and if government really is so benevolent and wonderful (provided your party is running it, of course), why not pay double or triple what you owe?

via The Agitator » Blog Archive » Why Not Pay More?.

THIS is bad news for a functioning capitalist economy: federal aid has "supplanted sales, property and income taxes as the biggest source of revenue for state and local governments". The Heritage Foundation, no surprise, flips out at the news ...

via The state of the states | Democracy in America | Economist.com.

The money is taken from state residents by the Federal government, skimmed some to line Federal pockets, and then funneled back down to the states again. Talk about redistribution.

In the first major disclosure of corruption in the $750-billion financial bailout program, federal investigators said Monday they have opened 20 criminal probes into possible securities fraud, tax violations, insider trading and other crimes.

The cases represent only the first wave of investigations, and the total fraud could ultimately reach into the tens of billions of dollars, according to Neil Barofsky, the special inspector general overseeing the bailout program.

via Crimes suspected in 20 bailout cases -- for starters - Los Angeles Times.

Can't blame Obama for this one -- the TARP debacle started under Bush. The Republicans have been almost as stupid in their reactions to the recession as anyone else.

So when DeLong, among others, says that government spending is as good as private in restoring employment, he is speaking against the whole thrust of the principle of efficient resource allocation. The essence of our recessionary problem is not the fall in aggregate demand and the lack of business confidence that accompanies it. First, it is the misallocation of resources produced by excessive risk-taking and by excessive expansion of interest-sensitive sectors. (These were generated by excessively low interest rates over the past several years.) Second, it is the uncertainty that is natural to the discovery of more appropriate combinations of resources. Third, it is the endogenous uncertainty created by the fits and starts of stimulus, bailout and unclear monetary policies.

When government adds to investment as a result of fiscal stimulus or directed monetary expansion (like buying mortgage-backed securities, student loans, etc) it does not act as a super-entrepreneur who is trying to determine the efficient and sustainable direction of resources, including the allocation of capital goods. It spends according to economically irrelevant criteria of job creation, propping up over-expanded sectors, and preventing politically painful adjustments.

Such spending is counterproductive in the medium to long term. It is also unsustainable (once the stimulus stops) since it is not consistent with the preferences of consumers-savers-investors.

via Is All Spending Created Equal? « ThinkMarkets.

It is tempting to romanticise the creation of Social Security, but it was not the result of a kind nation coming together and sacrificing to help the poor aged. The Depression-era government set up a Ponzi scheme that would not unravel until all nearly all their voters died. A 58-year-old in 1938 would only have to contribute for seven years before collecting benefits. He could expect more than a 30% internal rate of return on his tax dollars, compared to someone today who will get less than 2% (assuming benefits are not cut).

It is time to overhaul the system entirely. Social Security was meant as a national saving scheme that would prevent old-age poverty and ensure the middle class a reasonable retirement income. It would better achieve those objectives by addressing them separately. Ideally we would have a two-pronged system: one to provide explicit welfare, the other a transparent saving vehicle.

via Free exchange: our economics blog | The Economist.

I must say it's nice seeing someone at The (kind of left-leaning) Economist saying this.

We now have more poeple employed in government than manufacturing and construction.

via America passes a milestone! « Fabius Maximus.

Graph at the link; it's from January of this year. Yay for progress.

The FDA warned General Mills that it was, in effect, marketing its Cheerios breakfast cereal as a drug, because the cereal’s familiar yellow boxes carry unapproved claims about lowering cholesterol and reducing the risks of heart disease.

In a warning letter, the FDA cited the claim that “you can lower your cholesterol by 4 per cent in six weeks” by eating Cheerios regularly.

It objected to Cheerios’ assertion that “eating two 1½ cup servings daily of Cheerios cereal reduced bad cholesterol when eaten as part of a diet low in saturated fat and cholesterol”.

The claims – a central plank of Cheerios marketing for more than two years – go beyond the tightly defined health benefit claim for foods with soluble fibres, such as Cheerios, approved by the FDA for use in food marketing.

Dr Steven Sundloff, head of the FDA’s Center for Food Safety, said the action was “not to impugn Cheerios”, which he called “a product that can be part of a healthy diet”.

But he said: “The packaging clearly carries a drug claim.”

via FT.com / Companies / Food & Beverage - FDA warns Cheerios over health claims.

Your tax dollars at work.