Free Republic

Increasing productivity in healthcare is difficult but not impossible. Here's how. The president tells us that we should be “bending the cost curve� on healthcare, and politicans everywhere are scrambling to present their favored pork projects as plans that would do just that. Lobbyists of every stripe and color are storming legislative offices with great wads of dead presidents and the commentariat debates angels dancing upon pinheads: that is, what could be done if we had a legislative system without legislators, pork, lobbyists, or dead presidents printed on pieces of paper.What I have yet to see (and apologies to those...

Japan’s historic election Sunday gave the Democratic Party an overwhelming victory over the Liberal Democrats that have dominated Japan’s government for 55 years.  The Liberal Democrats oversaw Japan’s industrial policy that supported Japan’s dominant firms during Japan’s rise as a major economic power during the 1960s, 70s, and 80s.  Indeed, many American economists argued the U.S. should do more to emulate Japanese industrial policy and have the government actively involved in supporting dominant corporations to enhance their international competitiveness.American support for industrial policy, where the government actively picks the winners in economic competition, died off in the 1990s when the...

Remember how the left kept screeching that Bush had alienated our allies and enraged our enemies? Remember how they said that Barack Obama would make the world love us again? Well, the Democrats get to wear their soiled underwear over their own heads, now. Because now we get to see on a nearly daily basis just how truly full of pure partisan garbage they have been for years. N. Korea Says It Conducted 2nd Nuclear TestSEOUL, South Korea — North Korea announced Monday that it successfully carried out a second underground nuclear test, less than two months after launching a...

I happen to go to recovery.gov today and saw a chart of the jobs planned to be created or "saved" - they plan to create or "save" 106,000 jobs in Georgia. Not 105,000 and not 107,000 - precisely 106,000. How could their planning possibly be so precise? After staring at the data for a few minutes, I realized the terrible truth. California - 396,000 Texas - 269,000 New York - 215,000 Florida - 206,000 Illinois - 148,000 Pennsylvania - 143,000 Ohio - 133,000 Michigan - 109,000 Georgia - 106,000 North Carolina - 105,000 Do you see the pattern? Pull 3,500,000...

Czech PM does not regret ‘road to hell’ row By Tony Barber in Prague Published: May 7 2009 08:55 | Last updated: May 7 2009 08:55 Mirek Topolanek, the outgoing Czech prime minister, says he has no regrets about condemning US economic policies as a potential “road to hell” in spite of the deep embarrassment his remarks caused the European Union. In an interview with the Financial Times, he also said that, if he could have done one thing differently during the four months he steered the EU’s affairs, it would have been to rein in the free-ranging Middle East...

The US and Europe were widely expected to clash at the G-20 summit in London last month over how to address the global financial crisis. Voila, in just two days the problem was solved with a joint promise to increase IMF resources by $750 billion to a total of $1 trillion. The US portion of this new commitment is more than $140 billion. Yet Congress has debated neither the amount nor the proposed use of the funds. Instead, Obama and his fellow leaders simply waved their hands like a Star Trek captain and said make it so.

***The following are excerpts. It is far better to read the entire commentary (long but good). The graph is scary - it will make sense if you read the whole commentary .*** Last week, the U.S. Treasury Secretary advanced two proposals; one was a call for regulatory reform that is absolutely essential to the resolution of the current financial crisis. The other was a recipe for the insolvency of the FDIC, which would squander public funds to subsidize private speculation in troubled mortgage securities. [snip] Indeed, the only way for the toxic asset sale to increase shareholder equity is if...

Democratic leaders and the White House reached a deal to provide billions of dollars in relief to the ailing U.S. auto industry... The package, which Democratic leaders hope to win passage of next week and send to President George W. Bush, totals between $15 billion and $17 billion

Washington, D.C. (AHN) - Vice President-elect Joe Biden on Friday announced the creation of a new post under his office, and the appointment of pro-labor economist Jared Bernstein, to help the incoming administration fix the economy.Bernstein will serve as chief economist and economic policy adviser to the Vice President. His appointment comes the same day the Labor Department said the economy lost the most jobs in 34 year, and the same week as the the National Bureau of Economic Research officially announced that the U.S. economy has been in recession since December 2007. "Jared Bernstein is an acclaimed economist, and...

FDR's Folly: How Roosevelt and His New Deal Prolonged the Great DepressionBy Jim Powell What the Critics Say: " Very readable, factual, and insightful - and endorsed by two Nobel Prize-winning economists." (Thomas Sowell, Senior Fellow, Hoover Institution, Stanford University)Think FDR was a great president? Think again. In the minds of historians and the American public alike, Franklin Delano Roosevelt was one of our greatest presidents, not least because he supposedly saved America from the Great Depression. But as historian Jim Powell reveals in this groundbreaking book, Roosevelt's New Deal policies actually prolonged and exacerbated the economic disaster, swelled the...

President-elect Barack Obama may consider delaying a campaign promise - to roll back tax cuts on high-income Americans - as part of his economic recovery strategy, two aides said on Sunday. David Axelrod, the Obama campaign strategist who was chosen to be a senior White House adviser, was asked if the tax cuts could be allowed to expire on schedule after tax year 2010 rather than being rolled back by legislation earlier. "Those considerations will be made," he said on "Fox News Sunday." Bill Daley, an adviser to Obama and commerce secretary under former President Bill Clinton, said on NBC's...

The U.S. financial system still needs at least $1 trillion to $1.2 trillion of tangible common equity to restore confidence and improve liquidity in the credit markets, Friedman Billings Ramsey analyst Paul Miller said. The bulk of the capital will have to come from the U.S. government, Miller said. The government needs to take the initial steps to begin the process, and private capital and earnings can finish the job. "The quicker the government acts, the sooner the financial system can work through its current problems and begin to supply credit again to the economy," he said.

His friends advise Barack Obama to launch a "New" New Deal. Maybe that's because the old New Deal is sinking fast. Mr. Obama's one deeply false note during the campaign was his harping on "deregulation" as if that were the source of current troubles. His real problem is the crack-up of the world FDR built.

by Gina L. DiorioSixty-four years ago, economist, political philosopher, author, and professor F.A. Hayek published his classic political discourse, The Road to Serfdom. Written, in Hayek’s own words, as “a duty which I must not evade,� the work stands as a timeless warning of the dangers of believing one can exchange freedom for security while simultaneously preserving liberty.“It was in no spirit of mockery,� Hayek writes in his preface to the 1956 edition, “that I dedicated it ‘To the Socialists of All Parties.’ It had its origin in many discussions which, during the preceding ten years, I had with friends...

Fiscal Policy: With liberal Democrats set to run Washington, you'd expect big tax-increase talk. But House Ways and Means Committee Chairman Charles Rangel doesn't want a depression with his name on it.Three years ago, when the economy was booming under Republican governance of both the White House and Congress, veteran Harlem congressman Rangel accused President Bush of "destroying the fabric of America with a combined policy of war, tax cuts for the wealthy, and reductions in spending for domestic needs." Now, when the Democrat-dominated 111th Congress begins in January, and Rangel resumes his chairmanship of the panel from which all...

It is useful, at this juncture, to stand back and survey the economic landscape--both as it is now, and as it has been in recent months. So here is a summary of many of the points that I have made for the last few months on the outlook for the U.S. and global economy, as well as for financial markets: --The U.S. will experience its most severe recession since World War II, much worse and longer and deeper than even the 1974-1975 and 1980-1982 recessions. The recession will continue until at least the end of 2009 for a cumulative gross...

COMMENTARY: The worldwide economic crisis presents President-elect Barack Obama with a golden opportunity to establish his leadership bone fides preemptively before the anticipated foreign challenge comes to test his mettle as a leader. As the world's leaders prepare a summit to discuss establishing a new "global financial architecture," the president-elect should forestall efforts by European leaders to give him a bum's rush down the path toward global governance and strip the United States of its economic sovereignty. He can do so by launching his presidency with a legacy-making initiative that would hit the reset button on the economy and restore...

WASHINGTON – Democratic presidential candidate Barack Obama was less than upfront in his half-hour commercial Wednesday night about the costs of his programs and the crushing budget pressures he would face in office. Obama's assertion that "I've offered spending cuts above and beyond" the expense of his promises is accepted only by his partisans. His vow to save money by "eliminating programs that don't work" masks his failure throughout the campaign to specify what those programs are — beyond the withdrawal of troops from Iraq. A sampling of what voters heard in the ad, and what he didn't tell them:...

WASHINGTON (AP) -- The government is considering a plan that would help around 3 million homeowners avoid foreclosure, sources briefed on the matter said. A final deal had not been reached as of Wednesday afternoon and negotiations could still fall apart, but government agencies were contemplating using around $50 billion from the recently passed bailout of the financial industry to guarantee about $500 billion in mortgages. The plan could include loan modifications that would lower interest rates for a five-year period, according to two people briefed on the plan, who asked not to be identified because details were still being...

In Richistan, I wrote about a new political divide emerging among the wealthy. While most Lower Richistani’s ($1 million to $10 million in net worth) were voting Republican, most Middle-and Upper Richistanis (those worth $10 million plus and $100 million plus) were voting Democrat...

<p>WASHINGTON – The Federal Reserve has slashed a key interest rate by half a percentage point as it seeks to revive an economy hit by a long list of maladies stemming from the most severe financial crisis in decades.</p> <p>The central bank on Wednesday reduced its target for the federal funds rate, the interest banks charge on overnight loans, to 1 percent, a low last seen in 2003-2004. The funds rate has not been lower since 1958, when Dwight Eisenhower was president.</p>

In 1976, a scandal arose in Sweden when marginal tax rate for self-employed was 102%. Yes, 102%!!! It is not a typo. This was to be known as the "Pomperipossa effect" from a story published on March 3, 1976. The publication led to a stormy tax debate. In the parliamentary election later in the same year the Social Democrat government was voted out for the first time in 40 years, and the tax debate was one of several controversies that may have contributed to the election result.

Americans Oppose Income Redistribution to Fix Economy by Dennis Jacobe, Chief EconomistPRINCETON, NJ -- When given a choice about how government should address the numerous economic difficulties facing today's consumer, Americans overwhelmingly -- by 84% to 13% -- prefer that the government focus on improving overall economic conditions and the jobs situation in the United States as opposed to taking steps to distribute wealth more evenly among Americans.Lack of Support for Wealth Redistribution Spans Political Party, Income GroupsAmericans' lack of support for redistributing wealth to fix the economy spans political parties: Republicans (by 90% to 9%) prefer that the government...

God bless those Democrats. They're so nostalgic. This is not a new Great Depression, but if we all try hard enough, we can make it one! They long to take us back to yesteryear, when financial collapse ushered in an era of solidarity and equality. We were all in this together. All together in the crapper, but we were all together. Ah, what a time it was: Hobos huddled around open fires down at the rail yard, bankers were jumping out of windows, and we spent more time at home with family because we had no money to feed our...

This election is not going to be won or lost on trade. Compared to the banking crisis and the wars we are fighting, trade is a distant concern in the public’s mind. When Americans do think about trade, polls show that a majority think it kills jobs and generally hurts the country. This only goes to show that a handful of bloviators can be more influential than a consensus of Nobel Prize-winning economists. Indeed, even the most recent winner of the Prize once wrote, “A country serves its own interests by pursuing free trade regardless of what other countries may...

(CNSNews.com) – Democratic presidential candidate Barack Obama’s plan to cut taxes on 95 percent of taxpayers would effectively increase government spending by an average of $64.8 billion a year and effectively raise income tax rates for many Americans, even on some earning $20-$50,000 per year, according to the non-partisan Tax Policy Center. The heart of Obama’s tax cut proposal is in his use of refundable tax credits, which the Center describes as “credits available to eligible households even if they have no income tax liability” -- in short, refunds available even to those who don’t pay taxes. These refunds are...

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today. APIt's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income...

WASHINGTON (MarketWatch) -- Sen. John McCain rolled out new economic proposals aimed at seniors, investors and the unemployed on Tuesday, a day before he was to face Sen. Barack Obama in the final presidential debate and markets staged recoveries on the heels of a new government plan to buy stakes in the largest U.S. banks.

BLUE BELL, Pa. (AP) - Republican presidential candidate John McCain on Tuesday proposed a $52.5 billion economic plan that would eliminate taxes on unemployment benefits and cut the capital gains tax while warning voters about taking a chance on Democratic rival Barack Obama. "Perhaps never before in history have the American people been asked to risk so much based on so little," McCain said of his opponent during a speech at a community college in this Philadelphia suburb. McCain also promised that as president he would order the Treasury Department to guarantee 100 percent of all savings for six months....

Some of McCain's economic proposals he outlined in Pennsylvania today: * Suspend rules mandating that investors must begin to sell off their IRAs and 401(k)s when they reach 70 1/2 years old. * Cut the tax rate for retirement-account withdrawals to 10%. * Reduce the tax rate on capital gains to 7.5%. * Reduce the reduce the federal business tax rate from 35% to 25%. * Eliminate taxes on unemployment benefits. As for rhetoric, this passage stands out: This weekend, a plumber concerned that Senator Obama was going to raise his taxes asked him directly about his plan. The response...

Democratic presidential contender Barack Obama’s call for a 90-day moratorium on foreclosures is getting negative reactions from two Arizona experts. Obama is pushing for a 90-day break for homeowners who are making efforts to pay their mortgages and keep their homes. Democratic primary rival Hillary Clinton had called for a such a moratorium during her campaign against Obama, who did not support the idea at that time. “We need to give people the breathing room they need to get back on their feet,” Obama said Monday. The moratorium should be specific to banks being helped by the $850 billion federal...

Election '08: On the eve of a final debate, Barack Obama unveiled an emergency "rescue" of the middle class from capitalism. The details show it to be all hype and no help.Democratic presidential nominee Barack Obama's announcement in Toledo, Ohio, of a "middle-class rescue plan" is reminiscent of Groucho Marx's means of rescuing the drowning damsel who double-crossed him in the film "Horse Feathers." "Throw me a lifesaver!" she shouted. Groucho's character, buffoonish college president Quincy Adams Wagstaff, promptly produced from his pocket a roll of peppermint Lifesavers and tossed her one. Obama's idea of letting people deplete 15% of...

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today. APIt's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income...

Treasury Secretary Henry Paulson cautioned on Sunday that countries that turn to protectionist policies to try to escape damage from the global financial crisis may make it worse. "Isolationism and protectionism will not offer a way out," Paulson said in a statement prepared for delivery to the World Bank's development committee.

WASHINGTON: As international leaders gathered here on Saturday to grapple with the global financial crisis, the Bush administration embarked on an overhaul of its own strategy for rescuing the foundering financial system. Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favour of a new approach that would have the government inject capital directly into the nations banks in effect, partially nationalizing the industry. The Treasury Department's surprising turnaround on the issue of buying stock in banks, which has now become its...

A top adviser to Republican John McCain said Sunday the presidential hopeful is weighing new economic proposals to help the nation weather the financial crisis. Sen. Lindsey Graham, R-S.C., said McCain was considering policy proposals that would cut taxes on investments. "I think it goes along the lines of now's the time to lower tax rates for investors, capital gains tax, dividend tax rates, to make sure that we can get the economy jump-started," Graham said on "Face the Nation" on CBS. "It will be a very comprehensive approach to jump-start the economy by allowing capital to be formed easier...

As part of a plan to reinvigorate his flagging campaign, Sen. John McCain (R-Ariz.) is considering additional economic measures aimed directly at the middle class that are likely to be rolled out this week, campaign officials said. Among the measures being considered are tax cuts – perhaps temporary – for capital gains and dividends, the officials said. “The market’s the focus,” a McCain adviser said. “You want to stop the fleeing.” No more bailout money is being contemplated, the adviser said. “We’ve written a check to everyone in sight,” the adviser said. “We’re not in that game.”

The new kid at the Treasury hasn't quite learned you really can't talk in public about what you are really up to at Treasury. New Interim Secretary of the Office of Stability, Neel Kashkari, has been caught on tape providing the true details of what Treasury is up to. This will get him muzzled pretty fast, but it provides us the opportunity to see the scheming going on at Treasury... the conference call took place the night before the House rejected the rescue plan on September 28, which passed days later on October 3. The date is important because Kashkari...

CNBC.com Henry Paulson -------------------------------------------------------------------------------- “I don't wish to spread alarm on the line people but the big issue confronting the market is I'm afraid the health and sustainability of Morgan Stanley [MS 9.68 -2.77 (-22.25%) ] and Goldman Sachs [GS 88.80 -12.55 (-12.38%) ]," Hugh Hendry, Partner and CIO at Eclectica, told CNBC early Friday. "It is unimaginable that they can be allowed to go, I suspect that they will be nationalized at some point today or over the weekend," he added.

John McCain called for suspension of the requirement that retirees must begin liquidating their retirement accounts when they reach age 70 and a half, the latest economic policy rolled out by the Republican presidential candidate. The Arizona senator announced the plan at a rally Friday morning in La Crosse, Wis. Buried a third of the way through his typical stump speech, McCain said his priority was to “protect investors – especially those relying on their investments for retirement.” “Current rules mandate that investors must beginning to sell off their IRAs and 401Ks when they reach age 70 and a half,”...

CHILLICOTHE, Ohio (AFP) – White House hopeful Barack Obama called for a global response to the deepening financial crisis Friday as ministers from the world's major wealthy democracies headed to Washington for emergency weekend talks. "We also have to recognize that this is not just an American problem. In this global economy, financial markets have no boundaries," the Democrat told a crowd of several thousand in working-class Chillicothe in the battleground state of Ohio. "So the current crisis demands a global response," Obama said on the final business day of a rollercoaster week which saw stocks dive worldwide, amid panic...

Thanks to the fantastic and timely recent IMF paper and database on historical financial crises by Luc Laeven and Fabian Valencia, we can identify other instances in which a government took equity stakes in major banks as part of a recapitalization program. This has happened five times since 1970, according to Laeven and Valencia: Finland Jamaica Japan Korea Norway Crisis date (year and month, respectively ) Sep-91 Dec-96 Nov-97 Aug-97 Oct-91 Recap cost to government (gross) (as % of GDP respectively) 8.63% 13.90% 6.61% 19.31% 2.61% Recovery proceeds (% of GDP respectively) 1.72% 4.95% 0.09% 3.50% 2.00% Recap cost to...

“Not only have individual financial institutions become less vulnerable to shocks from underlying risk factors, but also the financial system as a whole has become more resilient.” — Alan Greenspan in 2004 George Soros, the prominent financier, avoids using the financial contracts known as derivatives “because we don’t really understand how they work.” Felix G. Rohatyn, the investment banker who saved New York from financial catastrophe in the 1970s, described derivatives as potential “hydrogen bombs.” And Warren E. Buffett presciently observed five years ago that derivatives were “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially...

What is the difference between the U.S. Treasury and a gigantic hedge fund? Beats us. Deal maker Hank Paulson has transformed the Treasury Department into a larger, more powerful form of Goldman Sachs, with extensive direct lending abilities and profit-making stakes in companies including Fannie Mae, Freddie Mac and American International Group, all financed using debt. Now Treasury is considering a new solution to the financial crisis that would leave the department even more intertwined in the business of the financial markets: directly taking stakes in troubled U.S. banks. Duke University finance Prof. Campbell Harvey asks why the Treasury should...

DAYTON, Ohio (Reuters) - Democratic presidential nominee Barack Obama accused Republican John McCain on Thursday of backing a mortgage bailout plan that would reward banks responsible for the U.S. housing crisis, as he sought to press a perceived advantage on economic issues. "We have to act to fix our broken economy and restore the credit markets," Obama said at a rally in Ohio, one of the key battleground states for the Nov. 4 election. "But taxpayers shouldn't be asked to pick up the tab for the very folks who helped create this crisis." At a debate with Obama in Nashville,...

Sen. John McCain (R-Ariz.) made an overnight change in the homeowner bailout he proposed at Tuesday’s presidential debate, making it more generous to financial institutions and more costly for taxpayers. McCain's staff says it was always meant that way. When McCain sprang his surprise idea at the start of the debate in Nashville, his campaign posted details online of his American Homeownership Resurgence Plan, which would direct the government to buy up bad home mortgages, allowing strapped people to keep their property. The document posted and e-mailed by the McCain campaign on Tuesday night says at the end of its...

Job Creators Prefer John McCain 4-to-1 Over Barack Obama Chief Executive magazine’s most recent polling of 751 CEOs shows that GOP presidential candidate John McCain is the preferred choice for CEOs. {snip} Over 70 percent of CEOs fear an Obama presidency will be a disaster ..."job creating CEOs repeatedly tell us that McCain’s policies are far more conducive to a more positive employment environment than Obama’s.” {snip} “I’m not terribly excited about McCain being president, but I’m sure that Obama, if elected, will have a negative impact on business and the economy,” said one CEO voicing his lack of...

If a recent poll found that almost 75 percent of America's top business leaders felt that a McCain presidency would be disastrous for the nation, with some even stating that his proposals if enacted would bankrupt the country in three years, do you think media would have reported it? Probably every hour on the hour until every American had heard about it, right? Well, on Wednesday, with the nation in the middle of what is being regularly portrayed as the worst financial crisis since the Great Depression, Chief Executive magazine released its survey of 751 CEOs finding that 74 percent...

The Securities and Exchange Commission's ban on short selling, which sparked a series of similar bans around the globe, was intended to be a "time out" and "restore equilibrium to markets." By the time it expired Wednesday night, the general view was that it added to market confusion and didn't do much to halt the slide in financial stocks. "I think what we did was we gave these stocks an artificial boost for a while, but it was pretty short-lived," said Charles Jones, a professor at Columbia Business School. "It was just like a glass of orange juice, and then...

WASHINGTON (AP) - Republican presidential candidate John McCain is proposing a $300 billion program for the federal government to buy up bad home mortgages and allow homeowners to keep their houses.