One day after the Federal Reserve Bank's “Federal Open Market Committee” (FOMC) announced it would create an additional $600 billion in currency over the next eight months, commodities markets skyrocketed as investors frantically sought hedges against the coming inflation. The Federal Reserve Bank, staffed with Keynesian and a few Monetarist school economists, calls the move “quantitative easing.”
Central planning seldom makes economic sense. However good a scheme looks on paper in some politician’s office, planned on the taxpayer’s dime, it's probably not worthwhile. If it really was a good scheme, then private enterprise would have already implemented the project.
Government never “stimulates” economic growth. Left quite alone, people engage in rational commerce guided only by enlightened self-interest. More crucially, government cannot predict the real consequences of its efforts to stimulate the economy. Republicans around the country are telling Americans that the ocean of dollars which the federal government spent on the future credit of our children in order to stimulate growth in America is actually being spent in China.
Over the recent clamor of approval for the outcome of the Troubled Asset Relief Program (TARP), which Beltway insiders are proclaiming a success because of the high rate of repaid funds, a lone voice of comparative sanity reminded Yahoo! Finance’s Aaron Task that the Obama bailout has done far more damage than the government-massaged figures indicate. Nobel Prize-winning economist Joseph Stiglitz, who seems to understand finance and banking better than most celebrity economists, told Task that the monies paid back to TARP are “just a drop in the bucket compared to damage done to the economy.”
The foreclosure crisis continues to threaten the U.S. banking sector with more headaches, admitted Sheila Bair, head of the FDIC, on October 25. According to a Reuters report, the expected wave of litigation stemming from improper or downright fraudulent procedures banks have been using to speed up the foreclosure process could be “very damaging” to the housing market.
In yet another economically destructive ploy to “go green,” the Environmental Protection Agency has recommended an unprecedented barrage of harsh federal regulations on fuel efficiency standards for semi-trucks, buses, delivery vans, garbage trucks, and heavy-duty pickup tricks.
Now that the Chevy Volt, General Motors’ electric car, is about to arrive in selected dealers’ showrooms around the country, it has been getting a lot of press. Some are puff pieces, one of which appeared in USA Today, while others are much more critical.
Back in June, Republican Senate candidates Sharron Angle of Nevada and Rand Paul of Kentucky endured criticism from the mainstream media for their comments suggesting that government-run unemployment insurance was, perhaps, not the greatest idea in the world.
October 15, US Airways asked one of its passengers flying from West Palm Beach to Kansas City to exit the airplane. Johnnie Tuitel, 47, a motivational speaker with cerebral palsy, was told that he was “too disabled to fly."
The United States would never, ever consider devaluing the dollar for export advantage, Treasury Secretary Timothy Geithner assured an audience of Silicon Valley business leaders in Palo Alto on October 18. “It is very important for people to understand that the United States of America and no country around the world can devalue its way to prosperity, to (be) competitive,” Geithner said. “It is not a viable, feasible strategy and we will not engage in it.” Geithner’s words appeared timed to allay concerns about the U.S. dollar before this weekend’s G-20 meeting in South Korea.
Let us be blunt: The mortgage foreclosure crisis, which first burst into full public view with Bank of America’s suspension of all foreclosures only a few days ago, has the potential to completely destroy the American real estate sector in an epic legal and economic meltdown that would make the crisis of 2007-2008 look like the proverbial Chinese tea party.