Free Markets, Free People

Dale Franks

Dale Franks’ QandO posts

Revitalizing GM

The government seems to be working on a cunning plan to bring GM back to profitability.

This ought to do it.

With auto sales in the doldrums, the House was considering a plan Tuesday to provide vouchers of up to $4,500 for consumers who turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.

The House proposal, set for a floor vote Tuesday, was aimed at stimulating car sales during a bleak period for the auto industry and increasing the nation’s fleet of cars that get more miles to the gallon…

Separately, House and Senate appropriators were discussing providing $1 billion to a supplemental war funding bill for the “cash for clunkers” program, which aims to generate about 1 million new auto sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers would attempt to find the additional money later this year.

Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.

So, now we’ve got a car company, and next we’ll be buying cars for our neighbors.

Podcast for 07 Jun 09

In this podcast, Bruce, Michael, and Dale discuss the Obama “Muslim” speech, and the socialization of the economy.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Twitters Moved

You may have  noticed that the twitter posts about the daily economic stats are gone.  They have been moved over to the sidebar, under the add banners.

This will give me the ability to provide the ongoing econ updates via my phone–just as I am posting this–while keeping the main blog section untouched.

This should be a solution that pleases everyone.

Idiotarian Returns

I believe that we have a replacement for MK-Ultra showing up in the comments section.  It might even be MK-Ultra, since the commenter Dude09 seems similarly dense enough to have a noticeable gravitational field.  Apparently, he was all upset that no one mentioned the wack-job who killed the abortion doctor in Kansas today, and we didn’t put it up on the board as a topic of conversation for the Podcast today.

Since it apparently seems that we have to occasionally re-explain the facts of life to morons, I will do so again.

1. We set up the Podcast topics on Friday.  For the most part, if we didn’t discuss it on Friday, it doesn’t go on the air on Sunday.  It’s not a daily news show.  It’s a discussion about things that have caught our eye over the past week.

2.  We will not always create a post on your pet news story.  Why?  Maybe we didn’t know enough about it.  Maybe we haven’t heard the story yet. Maybe we’re busy.  Or, maybe we just don’t care.  For instance, let’s take a look at my day.  When I got up today, I got dressed and went for breakfast, and then to the grocery store.  Upon my return, I trimmed hedges and bougainvillea, sprayed Roundup on some weeds, and picked up dog crap in the back yard.  Then, I went directly into my office to record the Podcast.  Immediately after that, I worked for 1.5 hours on a client web site.  I scarfed down a quick dinner, during which I first saw an actual news report on the shooting.  I then worked until 9PM on another client web site.  So, here’s a clue, maybe I didn’t blog on your pet story because I have a life, and responsibilities that preclude me from doing so.  I mean, really, do you think we sit around all day cruising the internet and news sites to latch on to your pet story as soon as it appears.  Cripes, most of the time, Bruce writes the stories you see on the blog on the night before they appear.

3. Sometimes, your pet story just isn’t compelling.  Someone went unhinged and shot an abortionist.  So what?  I mean, it’s a terrible tragedy, but what does it tell us about…well…anything?  What conclusions are we supposed to draw?  It’s not like abortionists are getting bumped off on a regular basis.  The last one of these that occured was 11 years ago, back in 1998.  What lessons am I supposed to draw from the fact that some lunatic thinks God told him to kill an abortionist that are in any way substantively different than those I would derive when a crackpot kills his pharmacist because the Venusians sent him a command to do so via the transmitter secreted in his skull?

4.  I really hate peer pressure.  Even if I was inclined to write about a story at some point, having you kite in here and call me an ass because I haven’t done it yet is a sure-fire way to get me to ignore the story completely.  I’ll ignore it just to spite you.

5.  I don’t care what you want to hear about.  I didn’t open up a request line when I started blogging.  I did to write about things that interest me, and beleive me, the abortion issue is way down near the bottom of the list of things that interest me.  If you send me a story, and it interests me, and if I have time, I might write about it.  Or not.

I hope that clears things up.

Podcast for 31 May 09

In this podcast, Bruce, Michael, Billy, and Dale discuss the economy and the Sotomayor nomination.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

Money? Or Receipts?

Recently, while listening to the Opie and Anthony show, I heard an interview with Loius CK, the comedian.  And he said something that struck me as quite profound.  And quite true.

Back in olden times–i.e., prior to the 1930s–our paper money wasn’t actually money, as such.  Instead, it was a receipt for the real money–gold, or silver–that we had stored in the bank.  And the amount of gold we had determined how many of those receipts we could get.  The gold or silver we held had an intrinsic value, and the paper currency we carried was simply a representation of that intrinsic value.

Then, in the 1930s, we simply got rid of the metal, and kept the receipts.  Ever since then, the paper money we carry around with us has no intrinsic value.  And the value of that receipt is worth whatever the government says it’s worth.  It is a medium of exchange, and nothing more.

You may have $1,000,000 in the bank.  And if the government says that it’s only worth a cup of coffee in exchange, then that’s exactly what it’s worth.  It doesn’t matter if acquiring that million bucks was the work of a lifetime.  The government can, if it wishes or is unwise, reduce the stored value of your life’s work to a trip to Starbucks.

Just something to think about.

Our Inordinate Fear of Inflation

That’s the subject Paul Krugman addresses in his NYT Op/Ed piece today.  In fact, he implies that even talking up the possibility of inflation comes solely from bad political motives, mostly from people who don’t grasp The Fierce Moral Urgency of Change™.

Why shouldn’t we worry about inflation, according to Prof. Krugman?

Now, it’s true that the Fed has taken unprecedented actions lately. More specifically, it has been buying lots of debt both from the government and from the private sector, and paying for these purchases by crediting banks with extra reserves. And in ordinary times, this would be highly inflationary: banks, flush with reserves, would increase loans, which would drive up demand, which would push up prices.

But these aren’t ordinary times. Banks aren’t lending out their extra reserves. They’re just sitting on them — in effect, they’re sending the money right back to the Fed. So the Fed isn’t really printing money after all.

But, let’s grant that the current monetary moves aren’t immediately inflationary.  What happens when the economy recovers and the banks do begin to spnd those extra reserves?  Krugman attempts some sleight of hand, in an effort to make it appear that he addresses that concern.

Still, don’t such actions have to be inflationary sooner or later? No. The Bank of Japan, faced with economic difficulties not too different from those we face today, purchased debt on a huge scale between 1997 and 2003. What happened to consumer prices? They fell.

Yes, they did.  But since Japan hasn’t had a real economic recovery even today, and is entering its third “Lost Decade”, that really isn’t a compelling argument.  Since 1999, Japan’s rate of GDP growth has averaged 1.31%, which is less than half of the average GDP growth rate of 3% a mature economy should experience.  Indeed, over the last decade, Japan has experienced exactly 5 quarters where GDP growth was at 3% or more. In that same period, there have been 9 quarters when GDP contracted.  The highest annual rate of growth was in 2000, when the annual GDP growth was 2.85%.

So, let’s not pretend we know how the inflationary pressures fall out in Japan once a recovery hits…until there actually is a recovery.

ON the other hand, since our policymakers seem hell-bent on following the same path the Japanese did in the 1990s, the return of inflation when the economy recovers might turn out to be worry we can avoid until sometime in the relatively distant future.

Podcast for 24 May 09

In this podcast, Bruce and Dale discuss discuss the president’s announcement of legal indefinite detention, and the economy.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.

How…stimulating!

Apparently the Fed has decided that their doubling of the monetary base in the last 7 months has done so fantastically, that they’re ready to do more of it.

Some Federal Reserve officials are open to raising the amounts of mortgage and Treasury securities purchase programs beyond the $1.75 trillion that they have already committed to buying, according to minutes from the Fed’s April meeting.

Please pay no attention to the inflation lurking behind the curtain.  Our benevolent overlords have everything under control.  So, why more monetary loosening.

Officials, meanwhile, projected an even deeper recession than they expected three months earlier and a more sluggish recovery over the next two years as labor markets remain under pressure.

Huh.  So much for that “turned the corner’ crap from last month.  But that’s OK.  because, you see, if you’re in the middle of a bursted bubble cused by overly loose monetary policy in the first place, then the way to get back on track is an even looser monetary policy.  That’ll fix you right up, you see.

At least, that’s what the Harvard econo-boys tell us.  And they are, of course, the Best and Brightest.

Meanwhile, the DoL reports that weekly claims for unemployment for last week were revised upwards to 643,000, but this week’s numbers were only 628,500.  So, that’s a nice little downward tick.  Except that we’ve got all those upcoming claims from shutting down car dealerships for Chrysler and GM.  Let’s call that 2,000 dealerships with an average of–I’m just spit-balling, here–25 persons per dealership left unemployed.  Let’s call it 50,000 new claims ahead.

Podcast for 17 May 09

In this podcast, Bruce and Dale discuss the Nancy Peolosi’s beclownment, and the state of the economy

The direct link to the podcast can be found at BlogTalkRadio, since I inadvertently failed to record a local copy of the podcast.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.