Bravo Webb!

March 31, 2009

Jim Webb takes on prison reform, and by extension, on drug policy reform.  About time.

Surprisingly he’s got backing from left, right and quite a few in between.

This is what happens when a party is full of fanatics instead of principles:

In what one might call a biblical move, Christian philanthropist Howard Ahmanson — one of three major funders of the campaign for California’s Proposition 8, which banned same-sex marriages — has abandoned the GOP for the Democratic Party.

No one ever said the multimillionaire isn’t idiosyncratic.

In a rare interview Thursday, Ahmanson shared some of his thoughts about why he switched parties. In a word, taxes.

Specifically, he was offended by the California Republican Party’s insistence during a recent state budget battle that there would be no tax increases for any reason, no matter what. “They’re providing one issue, and it’s just a very silly issue,” Ahmanson told me by telephone.

Post Office vs. FedEx

March 27, 2009

I am so tired of politicians using the Post Office as example of how government can’t run anything well.  Especially when they boast how much faster and reliable FedEx is.

It’s the ultimate apples to oranges comparison!

If I paid $21 to ship a simple letter I would demand tracking and next day delivery.  But for $0.42 I am very pleased that they rarely lose my piece, it takes only a few days, deliver rain or shine, and the line at the window takes no longer than at the FedEx counter.

In fact, their Priority Mail is an exceptional product: For $4.60 you get tracking and 2-day delivery to most locations (3-day to the rest).

If anything, our mail system is a perfect example of how government and private enterprise can coexist, delivering a good value to most people, and a better though much pricier alternative for those that really need it and can afford it.

Maybe they should bring the Postmaster General into those healthcare discussions at the White House.

Ron Paul recently asked Bernanke “What Would It Take For You To Admit You Were Wrong?”.  To which he replied “I’m always open to changing my mind when the facts change”.  Instant YouTube hit.

But this should go both ways, shouldn’t it?

What will it take for Ron Paul, the Free-Marketers and Austrian Schoolers that THEY are wrong about the usefulness of the Fed?

If Bernanke keeps inflation under 5%, is that proof?

Fed’s new tools

March 27, 2009

I told my friend last year the only good thing Bush did was to appoint Bernanke.

This isn’t a very popular opinion I know. But I am convinced that without “helicopter-Ben’s” creative ways to flood the markets with cash the crisis would have been much, much worse.

Will they avert an inflationary hangover?  Based on how they’ve performed so far, I have a good feeling the Fed will find a way.  So Janet Yellen’s recent remarks caught my attention:

The central bank is in talks with Congress about some new tools that would help the Fed’s exit strategy, Yellen said.
One idea would be to allow the Fed to issue debt to sop up excess reserves.
“Issuing such debt would reduce the volume of reserves in the financial system and push up the funds rate without shrinking the total size of our balance sheet,” Yellen said.

Just add water

March 27, 2009

Next week MIT will announce a new electrolyzer that is cheap, efficient, and works at room temperature.  So just by using a little water, electricity can be stored as Hydrogen, to be converted back as needed using a fuel-cell.

This could make it radically simpler and cheaper to store electricity than it is now with batteries.

The missing piece of the puzzle then is a much cheaper fuel-cell.

Georgia Tech researchers can treat the surface to create microscopic pyramids which repel water and dust (to maintain full eficiency), and help capture more light and reflect less.

Nocera nails it

March 27, 2009

Nocera is cautiously optimistic on Geithner’s plan, for all the right reasons.  His is a thoughtful analysis.  A sample:

“There is something called the leverage cycle,” said John Geanakoplis, an economics professor at Yale. During the bubble, he continued, when the country was awash in debt, toxic assets rated AAA were leveraged at an outlandish 16-to-1 ratio. That leverage was the primary reason those assets made such big returns. Now we’re in the opposite end of the cycle. There is no leverage at all available — yet without it, the return on these assets would simply be too small to make them interesting enough for investors to purchase. The only entity capable of injecting leverage in the system is the government.

I have been so disappointed this week with the HuffPo.  Every one of their bloggers seems to have bought into Taibbi’s conspiracy theory or Krugman’s attention-seeking rant.

I also found myself agreeing somehow with David Brooks:  Even if the plan doesn’t work, it succeds, because it will have made the case without a doubt that nationalization of X or Y bank is necessary so it will make it less messy politically.

There are demagoges and then there are thugs.

Give. Them. Time.

March 22, 2009

A reader at the Baseline Scenario describes just maybe why Treasury is moving cautiously:

Finally, let me remind you that Peter and Simon wrote a piece in the FT just over a month ago arguing AGAINST nationalization. Now, they are all for it. Yes, when the facts change, we change our minds…. but recognize that Tim Geithner  and Ben Bernanke do NOT have the option to change their minds. And they are NOT suddenly sell-outs or economic illiterates. But maybe they know too much about how close we came to the precipice and have become excessively risk averse. Perhaps. But quite honestly, I am not sure I blame them for wanting to be extra prudent. Back in  September, the vast majority of the financial commentariat said  Paulson made the right decision to let Lehman fail – it was not too big to fail. Now it’s the biggest mistake since Mellon liquidated the US banking sector. In such a crisis, certainty is not justified and should be left to the Rick Santellis of this world. At a time when Paul Krugman is disagreeing with Alan Blinder, maybe each side needs to listen more to the arguments of the other.