2009 June

Cap and Trade Effects

One of the stated goals of the cap and trade legislation is to reduce our dependence on fuel imports. It may have the opposite effect: June 26 (Bloomberg) — America’s biggest oil companies will probably cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports. Under the Waxman-Markey climate bill .. read more

Taxes Have Consequences

While we haven’t seen a rise in income tax rates yet, we do have some preliminary evidence about the possible effects. Other taxes have been rising and there are consequences: Hav-A-Tampa cigars closing Tampa plant: – Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays .. read more

The Illusion of Saving

Bob McTeer, former Dallas Fed President, has this to say about the increase in savings reported in the last income and spending reports: What happened in May was that the government increased its budget deficit (increased negative saving), borrowed the money, and paid it to individuals as part of the stimulus package. Since individuals saved .. read more

On June 30th, 2009, posted in: Economy by Tags: , ,

Government Tries to Legalize Theft

State governments are so desperate for revenue they are trying to legalize the theft of unused gift cards (via the WSJ): Some states faced with sinking tax collections and rising debt are going after unused gift cards that bolster their revenue. South Carolina is considering legislation that would give the state the right to collect .. read more

An Austrian Explanation of the Recession

The only economic theory which anticipated the recession is the Austrian school. While it has gotten more press recently, most people do not have an understanding of Austrian theory. Steven Horowitz has published a working paper for  the George Mason Mercatus Center which explains the current recession in Austrian terms. It is concise and easy .. read more

Why Isn’t the Stimulus Stimulating?

Bruce Bartlett on why the stimulus isn’t stimulating – yet (via Forbes): Since 60% of the stimulus package had a multiplier effect of less than one, only 40% of the package went to programs like public works that have a high multiplier. Moreover, the programs with a low multiplier were the fastest ones to implement; .. read more

Greenspan Calls for a New Stock Bubble

Alan Greespan takes to the pages of the FT to call for a new stock market bubble: Global stock markets have rallied so far and so fast this year that it is difficult to imagine they can proceed further at anywhere near their recent pace. But what if, after a correction, they proceeded inexorably higher? .. read more

Federal Reserve: FOMC Policy Statement – June 24

The Federal Open Market Committee decided today to maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. FOMC Policy Statement: Information received since the Federal Open Market Committee met .. read more