joshhansen.net

Category: economics

  • Worse Than The Disease

    NO!!!

    Forget about the election. Forget about the war. Forget about it all, because by the time you vote in November, the stupidest thing the government’s done in a long, long time will already have gone down, and it’s gonna be too late.

    SEVEN HUNDRED BILLION DOLLARS??? To do what? To save the butts of the guys who got us into this trouble to start with. So let me get this right: Secretary Paulson and the Fed chairman are saying that capitalism works… as long as there’s never any risk for the rich? Only opportunity to make bank, but never a chance to fall down and actually lose money. That would be unthinkable. No, no, little taxpayer, you’ve got it all wrong. Uncles Hank and Ben know what’s really going on. Your retirement is tied up in that failing bank, and it needs to be protected.

    No, sorry guys, that’s not really what this is about. This is about unchecked, reckless expansion of executive authority. This is about giving the Treasury department a bigger budget than the Pentagon. This is about paying more than the equivalent of another Iraq war; but it’s not going to Our Boys on the front lines, it’s going to Vinnie the Banker, to Irresponble Ed the mortgage broker, who got in over their heads and need someone to save them from their own actions.

    There are other ways to make this work. We don’t have to squander the taxpayers’ inheritance like this. Don’t let this happen, guys. The government and the market will be a new kind of broken, something that the world hasn’t seen since, oh, maybe the collapse of the Soviet Union. This is malfeasance.

    Oh, didn’t you know? That’s a crime.

    So maybe I get a little worked up about these things sometimes. Maybe I’m a little too doom and gloom. But doesn’t having the federal government buy Wall Street seem like a bad idea to anyone else? (Hey, if it’s for sale….)

    Links

    Alternative Proposals that Don’t Cost $700 Billion

    The Proposal That Does Cost $700 Billion ($700,000,000,000)

    Reasons Why Handing $700 Billion to Anybody Is Stupid

  • Obamanomists

    If the economic policy of Barack Obama is “Obamanomics,” then its practitioners must be “Obamanists.” Interesting.

    Here are some articles from opposite ends of the political spectrum discussing Obama’s economics proposals and ideas. I found both of them to be informative and to provide much excellent food for thought. The New York Times one is very long but worth reading, and the Wall Street Journal one is quite short… and also worth reading. (Would I ever recommend that you read anything that wasn’t worthy of being read? Nah.)

    But wait, there’s more! As a bonus to those who have endured this post so far, I’m going to throw in a Financial Times article and a huge Tax Policy Center analysis of both McCain’s and Obama’s tax plans—all at no additional charge to you. If you order now, we’ll also throw in a blender!

    All told I think I feel more comfortable with Obama’s economic policy than I did before reading these articles. But I am disheartened to see that both he and John McCain are failing to realize the gravity of the looming entitlement crisis. John McCain will make it worse by forfeiting some 4.1 trillion dollars of tax revenue over the next ten years. Obama will exacerbate things by magnifying government involvement in healthcare, which is already the source of untenable entitlement growth over the next several decades.

    Alas that both candidates are spending more time thinking about gas tax holidays (McCain’s populist pandering) and windfall profits taxes on oil companies (Obama thinks we should discourage oil production and distribution??? Won’t that cause gas prices to increase, or, at very best, not decrease?) than pondering the fate of the federal budget under the upcoming landslide of 40 trillion dollar welfare obligations.

    I’ve really got to go to bed. Can you believe I stay up until almost 3am to think about political economy? Weird!
    -Josh

  • Pay-As-You-Drive?

    There is a proposal for Pay-As-You-Drive car insurance. Your insurance rate is per-mile, not per-6-month-term. This would decrease insurance rates of those who drive little (like yours truly) but raise them for those who drive long distances. It would of course motivate decreased driving, which is a good thing from the point of view of emissions, congestion, road maintenance, vehicle maintenance, etc. I support the idea, since it seems to cause more of the cost of an activity (driving) to be borne by those participating in the activity (drivers).

    However, part of the rationale used in the proposal is rests on the assumption that people who drive more get into more accidents. This deserves consideration. Stated flatly like that I have no doubt it is true: the more you drive, the more exposure to the risk of driving you undergo, thus more accidents for longer drives. However, it’s also possible/likely that people who drive a lot are, by virtue of larger experience, better drivers than those who drive very little. Additionally, people who drive the longest distances tend to do so on cross-country highways, not in cities. The risks of highway driving are different from stop-and-go city traffic.

    So, while long drivers are likely responsible for more total accidents than short drivers, their rate of accidents per mile may be less. I suppose that this could be taken into account by insurance companies by charging a higher rate for the first 5 or 10 thousand miles driven, then gradually decreasing the per-mile rate up to a certain point thereafter.