$10 million of Stimulus went to ATF’s Project Gunrunner

Great use of Stimulus funds. It just shows that the government has a hard time spending money usefully when it makes decisions to spend it quickly. From the ATF website.

The Southwest Border Initiative — ATF’s Project Gunrunner — $10 million

The Administration’s southwest border initiative will reduce cross border drug and weapons trafficking, and the associated high level of violence occurring on the border between the U.S. and Mexico. The primary role of ATF’s Project Gunrunner in support of this initiative is to stem the illegal trafficking of firearms across the border and to reduce the firearms violence occurring on both sides of the border.

$10 million in ARRA funding is hiring 37 ATF employees to open, staff (via new hire and relocation of senior personnel,) equip, and operate new Project Gunrunner criminal enforcement teams in McAllen, TX; El Centro, CA; and Las Cruces, NM (which includes a subordinate satellite office in Roswell, NM.). Additionally, these funds support the assignment of two special agents to each of the U.S. consulates in Juarez and Tijuana, Mexico to provide direct support to Mexican officials on firearms-trafficking-related issues.

By curtailing the availability of firearms to the Mexican drug cartels, ATF will diminish their ability to export drugs to the U.S. In addition, by removing the guns from the cartel’s lethal resources, ATF will directly affect their ability to operate and concurrently suppress the firearms — related violence that occurs on both sides of the southwest border.

GDP growth essentially zero for first half of the year

GDP grew at a revised annual rate of 1 percent during the second quarter. That means it actually grew at 0.25 percent. That after a 0.1 percent growth in the first quarter. This growth rate is about half the growth rate in the population during the first half of the year.

The price index for gross domestic purchases increased by 3.3 percent in the second quarter.

Bernake announced no further dramatic increases in the money supply.

Chairman Ben Bernanke is proposing no new steps by the Federal Reserve to boost the economy while hinting that Congress may need to act to stimulate hiring and growth.

Bernanke said Friday that while record-low interest rates will promote growth over time, the weak economy requires further help in the short run. He is speaking at an annual economic conference in Jackson Hole, Wyo.

His speech follows news that the economy grew at an annual rate of just 1 percent this spring and 0.7 percent for the first six months of the year. Only slightly healthier expansion is foreseen for the second half. . . .

Obama won't take responsibility for economy

Here is part of an interview that Sean Hannity had with Austan Goolsbee. Personally, I think that this interview was quite telling. In response to Obama's broken promises, Goolsbee blames the bad economy and the high unemployment rate this year on the high price of oil, but when Sean brings up that there was high oil prices during the last year of the Bush administration, Goolsbee wants to have it both ways. Obviously he wants to say that high oil prices caused problems back then, but that has clearly not been what Obama has blamed for the problems in 2008.

Of course back in 2008, Obama blamed the high prices on oil speculators and promised a crack down to reduce prices if he were president. Of course, putting speculators in jail would make things worse, not better, but why isn't Obama doing what he promised here?

Corzine said Obama's plan aims to close the so-called Enron loophole, which exempts some energy speculators who trade electronically from U.S. regulation. It takes its name from the now-collapsed energy firm that benefited from the law. . . .

The loophole is "one example of the special interest politics that put the interests of Big Oil and speculators ahead of the interests of working people," Obama's campaign said in a statement. . . .

As the claims about earthquakes hurting the economy, I thought that all these Keynesians had been arguing that wars and other disasters helped. Remember Krugman's claim:

If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. . . .

Other Democrats point to Hurricanes as a way to create jobs:

Gov. Beverly Perdue (D-NC): "obviously there will be some employment as people rebuild and prepare. This morning they said there's at least 27,000 or 28,000 structures that have an opportunity to be hit by the storm. So, we'll know by Saturday or Sunday. But all of us want jobs, but this isn't a way to get them quite frankly."

Goolsbee's interview with Hannity:

Hannity: What went wrong?

Goolsbee: Respectfully, Sean you are mixing up the time frame there. In the year 2010 which is when most of the clips when the president was saying we were going to grow again. We were growing and over that 17 months we added two-and-a-half million jobs.

Now, at the beginning of this year we get earthquakes, tsunamis, revolutions in the Middle East, European financial crises, now they even have earthquakes out of Washington, D.C. I mean, we've had a series of things that have put some heavy blows and slowed the economy back down again. But, I think it's a little -- I don't think you want to confuse something that is way down and starting to grow out.

Hannity: . . . He said that he was going to create millions of jobs. He said that he would cut the deficit in half. He said the unemployment rate would stay below 8 percent. Those were promises that he made as a candidate, none of which have actually come true. Are you actually going to make the case that the Arab Spring and the Japanese earthquake had a more significant economic impact than say 9/11 on the economy or Katrina on the economy?

Goolsbee: With the price of gas shooting up to four dollars a gallon affected everybody out and I was just very direct way.

Hannity: It happened in the Bush years . . .

Goolsbee: It happened at the end of the Bush years and then preceded the worst financial crisis in all of our lifetimes, so I don't know if that's necessarily the perfect example.

Hannity: Oh, Alright . . .

Goolsbee: We face a downturn where we lose a significant number of jobs 7, 8 pushing up to 9 million in the downturn. But let's not get into a thing where a guy takes your TV up to the balcony drops it off and says that the last I saw the looks fine. When the president takes office we're in the midst of what is now recognized as the worst downturn since we have had data in the 1940s.

Nice discussion on how Londoners would have benefited from having a gun during the recent riots

Nolan Finley has this piece in the Detroit News.

Defenders of the Second Amendment couldn't have asked for a greater gift than the spectacle of unarmed policemen and defenseless citizens standing by helplessly while rampaging hordes of youths burned London and beat up and murdered innocent residents.
Europhiles endlessly remind us of the superiority, compassion and refinement of the European social democracies.
But the anarchy that raged in England couldn't happen in America. At least not in my neighborhood, where every third house contains a hunter with a gun safe full of pistols, shotguns and rifles.
We've ceded many or our liberties to the government, but so far we've hung on to the right to defend ourselves and protect our families and homes. We pay our cops to do the same. . . .

Chicago Fed estimates that unemployment insurance increased unemployment during the recession

A copy of the study is available here.

In­ summary, ­the­ base ­case ­and ­alternative­ estimates­ using­ the­ approach­ outlined­ in­ this ­article suggest­ that ­the ­extension­ of ­unemployment ­insurance ­benefits­ during ­the ­recent ­economic ­downturn­ can ­account ­for­ somewhere ­in ­the ­neighborhood­ of­ 1­ percentage­ point­ of­ the­ increase ­in ­the ­unemployment ­rate,­ with­ a ­preferred ­estimate ­of­ 0.8 ­percentage­ points. . . .

Another study from the Fed estimates how much of the decline in unemployment is due to people exhausting their unemployment benefits. That study is available here.

We use real-time microdata from the Bureau of Labor Statistics’ Current Population Survey (CPS) to examine whether there has been a reverse effect recently as benefits have been exhausted. We find that if UI benefits had lasted indefinitely, the unemployment rate would have been cumulatively about 0.1 to 0.3 percentage points higher between October 2009 and January 2011, which represents about 10% to 25% of the decline in the actual rate over that period. . . .

Robert Barro makes the point that government spending isn't free

The point is that government spending doesn't produce free wealth. From the WSJ.

The overall prediction from regular economics is that an expansion of transfers, such as food stamps, decreases employment and, hence, gross domestic product (GDP). In regular economics, the central ideas involve incentives as the drivers of economic activity. Additional transfers to people with earnings below designated levels motivate less work effort by reducing the reward from working.

In addition, the financing of a transfer program requires more taxes—today or in the future in the case of deficit financing. These added levies likely further reduce work effort—in this instance by taxpayers expected to finance the transfer—and also lower investment because the return after taxes is diminished.

This result does not mean that food stamps and other transfers are necessarily bad ideas in the world of regular economics. But there is an acknowledged trade-off: Greater provision of social insurance and redistribution of income reduces the overall GDP pie.

Yet Keynesian economics argues that incentives and other forces in regular economics are overwhelmed, at least in recessions, by effects involving "aggregate demand." Recipients of food stamps use their transfers to consume more. Compared to this urge, the negative effects on consumption and investment by taxpayers are viewed as weaker in magnitude, particularly when the transfers are deficit-financed.

Thus, the aggregate demand for goods rises, and businesses respond by selling more goods and then by raising production and employment. The additional wage and profit income leads to further expansions of demand and, hence, to more production and employment. As per Mr. Vilsack, the administration believes that the cumulative effect is a multiplier around two.

If valid, this result would be truly miraculous. The recipients of food stamps get, say, $1 billion but they are not the only ones who benefit. Another $1 billion appears that can make the rest of society better off. Unlike the trade-off in regular economics, that extra $1 billion is the ultimate free lunch.

How can it be right? Where was the market failure that allowed the government to improve things just by borrowing money and giving it to people? . . .

CBO estimates that unemployment will stay at least at 8 percent through 2014 and then suddenly fall to 6 percent in 2015

Who knows what is suddenly supposed to change in 2015. I haven't seen an explanation yet for this predicted change. Personally, I don't put a lot of weight on these predictions. From the WSJ.

Obama's Mortgage Refinance Proposal

Obama is currently floating a mortgage refinance proposal. Here is a simple question: why aren't people refinancing their mortgages right now? Presumably there are cost to doing the refinancing that exceeds the benefits. In this proposal, who is going to eat those costs? The taxpayers? The mortgage lenders? From Fox News:

Sources in the housing and mortgage industry confirm that the refinancing proposal, which would cover government-backed mortgages, is one of several on the table as the administration tries to tackle the housing slump as well as the overall slack in the economy.
"As one would expect, we continue to look for ways to ease the burden on struggling homeowners and to help stabilize the market, whether that's through assessing new proposals or older ones worth re-considering as market conditions change," an administration official told Fox Business Network, while cautioning they have "no plans to announce any major new initiatives at this time."
The refinancing idea would help homeowners by saving them money on interest payments while potentially having a stimulus effect on the economy -- since the money they would have spent on mortgage interest would be available for other things.
Christopher Mayer, a professor of real estate finance and economics at Columbia University who pushed the idea, estimated it could save consumers $75 billion a year in interest. . . .

Here is another article indicating that the plan might be aimed at subsidizing "high risk borrowers."

Just 8 percent of Federal lawmakers majored in economics

A new study finds less than 10 percent majored in economics. Accounting is useful, but I am not sure that he tells you what needs to be done. From Fox News:

Congress might want to find some consultants as it tries anew to tackle the country's deep deficits. A report from the Employment Policies Institute finds that only one in five members of Congress has an academic background in business or economics.
The organization looked at lawmakers' college degrees and found that most of them -- 55.5 percent -- majored in either a government-related field or "humanities." Just over 8 percent majored in economics, while almost 14 percent studied business or accounting.
The numbers raise questions about their ability to tackle tough economic challenges when they return from break early next month. The Obama administration, as well as lawmakers touring their districts, are clamoring for a new approach to the jobs crisis. Meanwhile, a congressional "supercommittee" is set to get to work finding $1.5 trillion in deficit reduction over the next decade. . . .

Romney Flip-flopping on man-made Global Warming?

Anyone who has been following Romney since at least 2008 knows that he has felt strongly about man-made Global Warming. Yet, with Rick Perry's entrance into the race it sure looks as if Romney is changing positions on yet another issue. From The Hill newspaper:

"Do I think the world's getting hotter? Yeah, I don't know that, but I think that it is," Romney said in New Hampshire on Wednesday, according to Reuters. "I don't know if it's mostly caused by humans."
But at an earlier event in June in New Hampshire the former Massachusetts governor seemed more convinced by the possibility of global warming.
"It's important for us to reduce our emissions of pollutants and greenhouse gases that may be significant contributors," Romney said in June. "I believe the world is getting warmer, and I believe that humans have contributed to that." . . .

Kinky Friedman, a self-describe Democrat, endorses Rick Perry

As always, Kinky is fun to read:

simply put, Rick Perry and I are incapable of resisting each other’s charm. He is not only a good sport, he is a good, kindhearted man, and he once sat in on drums with ZZ Top. A guy like that can’t be all bad. When I ran for governor of Texas as an independent in 2006, the Crips and the Bloods ganged up on me. When I lost, I drove off in a 1937 Snit, refusing to concede to Perry. Three days later Rick called to give me a gracious little pep talk, effectively talking me down from jumping off the bridge of my nose. Very few others were calling at that time, by the way. Such is the nature of winning and losing and politicians and life. You might call what Rick did an act of random kindness. Yet in my mind it made him more than a politician, more than a musician; it made him a mensch.

These days, of course, I would support Charlie Sheen over Obama. Obama has done for the economy what pantyhose did for foreplay. Obama has been perpetually behind the curve. . . .

Texas Unemployment Miracle

Appearance on Aug. 23, 2011 at 12:35 PM.

Some notes on the "Jobs Crisis"

I have made many of these points previously, but it is good to see Nina Easton make them in her piece at Fortune.

• Getting the unemployed re-employed isn't just about economic growth. There are now 6.2 million Americans (more than 44% of the unemployed) who have been out of work for more than a year -- and are dead last on any list of employers seeking to fill positions. These are people whose skills have rusted in a fast-paced global economy, along with twentysomethings who haven't even developed the habit of work. We risk losing a generation of men and women who won't be able find meaningful employment ever again.
• Washington spends more than $18 billion a year on 47 different training programs -- spread across nine agencies. What has all that bureaucracy and money bought? Employers who complain that they can't find qualified workers -- even in this market (one out of three employers, according to a recent McKinsey Global Institute survey). As many as 3 million jobs in this country are sitting unfilled. There is a sharp disconnect between the skills employers need and what unemployed workers have to offer -- and business isn't doing nearly enough to provide training to close that gap. As Nicholas Pinchuk, CEO of Snap-On Inc., aptly put it at a recent jobs forum, "Business has to enter that fray and define it."
• Safety nets, built to protect people in trouble, are actually contributing to their long-term unemployment -- and thereby hurting their job prospects. A study by the Chicago Fed suggests people go back to work -- and unemployment drops -- when unemployment insurance is set to run out. In fact, some studies indicate that a full percentage point of today's jobless rate can be attributed to folks who are taking advantage of benefits that enable them to collect checks for nearly two years. The Social Security disability program -- intended for the chronically ill -- is morphing into a new form of welfare dependency discouraging nonelderly adults from finding jobs.
• This isn't 1982, when unemployment topped out at 10.8% -- a bit higher than the Great Recession's October 2009 peak. There is no "Morning in America" on the horizon. All signs point to a continued struggle for people who don't have jobs for long periods of time -- leaving a deeper, more indelible mark on our nation's psyche. Recent studies show that U.S. companies will actually face a talent shortage in 10 years, even as growing numbers of teens drop out of school and millions of once-talented adults fall idle. . . .

Obama: adding $4 trillion in debt over four years was “unpatriotic” and also “irresponsible”

What a difference three years makes. Remarks by Obama in July 2008.

“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion dollars for the first 42 presidents -- number 43 added $4 trillion dollars by his lonesome, so that we now have over $9 trillion dollars of debt that we are going to have to pay back -- $30,000 for every man, woman and child. That's irresponsible. It's unpatriotic,” Obama said on July 3, 2008, at a campaign event in Fargo, N.D.

Of course, during the presidential debates, then-Senator Obama blamed the bad economy on the deficits.

While everyone focuses on Biden's remarks on China's one child per family restrictions, he had some other real winners

In his speech at Sichuan University, Biden said this:

It’s also great to be here on a university campus. I also want to thank our host, the university which counts amongst its alumni some of the most illustrious figures in recent Chinese history, including Zhu De and Ba Jin, both of whom are -- one a literary icon; the other, one of the most illustrious figures, and a founding father of the republic. . . .

The Britannica Encyclopedia describes Zhu De as: "Founder of the Chinese communist force that became the People's Liberation Army." Zhu De was involved in the "liberation" and genocide in Tibet.

While Amtrak is losing tons of money, the private sector has stepped in

For fares that can be a tenth what Amtrak is charging (and of course Amtrak is exempt from taxes that private companies have to pay), private bus companies are doing a great job providing transportation up and down from NYC to Philadelphia to DC. So why have the government provide train service? It makes one wonder about the waste of the government stimulus on things such as high speed rail.

While the Obama administration has been desperately seeking to spend $53 billion on so-called high-speed rail lines, private businessmen have developed Chinatown and Megabus lines that provide inter-city service that has attracted legions of price-conscious travelers.

Chinatown bus service started in 1998 to provide a cheap way for Asian immigrants to get from New York to Boston. You lined up at the curb, paid your $20 fare to the driver and settled into a comfortable bus for four hours or so.

Now there's service to multiple destinations (including gambling casinos) from New York and on the West Coast, too. And competitors have arisen. Megabus routes exist between Maine and Memphis and Minneapolis, notably including many college towns.

The buses have bathrooms, AC power outlets and free wi-fi. They're not as fast as the much more expensive Acela train, but they tend to run on schedule.

Bus travel used to be decidedly downscale, with a clientele that scared off middle-class travelers. That's because, back in the days of heavily regulated transportation, bus lines followed the passenger railroad model, with stations in central cities, routes with multiple stops, fares propped up by monopolies and operators with no economic incentive to provide comfortable or pleasant service.

Chinatown and Megabus operators ditched this model for one that works for travelers for whom money is scarce and time plentiful. Who needs a station? Intercity buses can occupy curb space briefly just as city buses do. Who needs multiple stops? You can make money on people who want to go from one specific location to another. . . .

So why is worker productivity falling: Some weird economics

In this past Sunday's New York Times, economist Tyler Cowen tries to explain the drop in productivity this way:

One problem may be offshoring by American companies, as stressed in a study by Michael Mandel, chief economic strategist of the Progressive Policy Institute, and Susan Houseman, senior economist with the W. E. Upjohn Institute for Employment Research. Some productivity gains from the manufacturing of the iPad are captured by workers in China, who make important parts of the device, rather than by American workers. American companies often save on costs by finding lower wages abroad, not by enhancing the abilities of American workers. That would help explain why measured productivity has often been high over the last decade while despite year-to-year variation domestic wages and job creation have been flat. . . .

The drop in productivity should concern everyone. Nonfarm business labor productivity fell by 0.3 percent in the second quarter this year, the second quarterly drop in a row. Lower productivity means lower wages. The claim here is that US productivity rates are falling because we are sending more production offshore. But offshoring increases output and profits and should thus be associated with increased productivity. What should be talked about here is how to increase the returns to investment. Increasing the amount of capital increases the productivity of workers.

What happens when union dues are no longer mandatory?

Apparently, public employees don't rush out to pay union dues when they are given the option. From George Will's piece this week:

And teachers unions may no longer automatically deduct dues from members’ paychecks. After Colorado in 2001 required public employees unions to have annual votes reauthorizing collection of dues, membership in the Colorado Association of Public Employees declined 70 percent. In 2005, Indiana stopped collecting dues from unionized public employees; in 2011, there are 90 percent fewer dues-paying members. In Utah, the end of automatic dues deductions for political activities in 2001 caused teachers’ payments to fall 90 percent. After a similar law passed in 1992 in Washington state, the percentage of teachers making such contributions declined from 82 to 11. . . .

Whether the recent union staff layoffs in Wisconsin is a result of localities no longer buying health insurance through the unions or a drop in union dues isn't obvious.

During the recall tumult, unions barely mentioned either their supposed grievance about collective bargaining, or their real fears, which concern money, particularly political money. Teachers unions can no longer bargain to require school districts to purchase teachers’ health insurance from the union’s preferred provider, which is especially expensive. This is saving millions of dollars and reducing teacher layoffs. . . . .
Democrats furiously oppose Walker because public employees unions are transmission belts, conveying money to the Democratic Party. Last year, $11.2 million in union dues was withheld from paychecks of Wisconsin’s executive branch employees and $2.6 million from paychecks at the university across the lake. Having spent improvidently on the recall elections, the Wisconsin Education Association Council, the teachers union, is firing 40 percent of its staff. . . .

"Good Samaritans Block Shoplifters With Car"

Democrats making mortgage lending even riskier

Do these guys ever think about the long run consequences of their actions? With this new regulation, what will happen to lending in these blighted areas? Of course, redlining laws may prevent banks from not lending to these areas. The result then will be higher mortgage rates for everyone. That is one sure way to help increase housing prices, right? From the WSJ:

Chicago's City Council passed an ordinance late last month championed by Mr. Emanuel that changes the definition of a property's "owner" to include a "mortgagee" or his "assignee" and "agent." That means banks, mortgage servicers and anyone else with a financial interest in a vacant property could be held liable for its upkeep—even if they haven't foreclosed on the home and don't legally own the property title.

This is a classic case of treating the symptom and not the disease. Vacant and blighted properties depress neighboring home values, can serve as havens for squatters and criminals, and cost money to fix. Chicago spent more than $15 million last year on the problem. As Alderman Pat Dowell, who introduced the ordinance, told us in a telephone interview last week, that total "doesn't even include the costs for streets and sanitation, policing, evicting squatters out of these buildings, rent abatement, water issues" and more.

But the real culprit here isn't the banks. It's the federal and state regulatory interference that prevents the private market from working. Market-research firm RealtyTrac estimates it takes 504 days to foreclose on a property in Illinois, compared to the 318-day national average. Pile on a wobbly national economy and high unemployment and many borrowers can't afford to pay their mortgage. No wonder borrowers and lenders often give up and walk away. . . .

A prominent group of psychiatrists are arguing that pedophilia should not be criminalized

The goal of psychiatrists seems to be to eventually make every type of behavior acceptable.

A group of psychiatrists and other mental health professionals say it's time to change the way society views individuals who have physical attractions to children.
The organization, which calls itself B4U-Act, is lobbying for changes to the Diagnostic and Statistical Manual of Mental Disorders, or DSM, the guideline of standards on mental health that's put together by the American Psychiatric Association.
The group says its mission is to help pedophiles before they create a crisis, and to do so by offering a less critical view of the disorder.
"Stigmatizing and stereotyping minor-attracted people inflames the fears of minor-attracted people, mental health professionals and the public, without contributing to an understanding of minor-attracted people or the issue of child sexual abuse," reads the organization's website.
B4U-Act said that 38 individuals attended a symposium in Baltimore last week, including researchers from Harvard University, Johns Hopkins University and the universities of Illinois and Louisville. According to the group, which said to not endorse every point of view expressed, the speakers in attendance concluded that "minor-attracted" individuals are largely misunderstood and should not be criminalized even as their actions should be discouraged. . . .

72 year old man hit by baseball bat, but defends himself with gun against three teens

This apparently took place on August 13th in Pensacola, Florida.

Obama administration pretends that they are cutting government regulations

So you impose huge new regulatory burdens and then, to much fanfare, you have a small cut once you realize that voters are turning on you for all the new regulations. This list doesn't even mention all the new environmental regulations. From Fox News:

. . . "The administration's findings and determinations, on their own, are a worthy effort at making technical changes to the regulatory process, but the results of this lookback will not have a material impact on the real regulatory burdens facing businesses today," said Bill Kovacs, the chamber's senior vice president of environment, tech, and regulatory affairs.

Chamber officials note The Affordable Care Act created 159 new agencies, commissions, panels, and other bodies. The Dodd-Frank financial regulatory reform has 447 new rules that either required or suggested.

"Well I appreciate the fact that President Obama has directed the administration to address regulator overreach, but frankly I think this is almost the fox in the hen house," said Rep. Geoff Davis (R-Ky.). "When we look at the bigger picture, there's a huge encroachment in the private sector and our communities with unfunded mandates and cost of regulations. It was 1.75 trillion last year with over 4000 regulations in the queue ready to implement this year." . . .

But Sen. John Barrasso (R-Wyo.) said Tuesday that the facts speak for themselves, noting that the administration proposed $9.5 billion in new government regulations in just July. So the proposed savings of this week's initiative -- $10 billion over five years -- could essentially be wiped out in only one month.

"The administration just unveiled a plan for publicity - - not a plan for [economic] growth," said Barrasso, adding that "small businesses across the country are overwhelmed by the hundreds of new regulations stemming from the President's health care law, financial reform bill" and the Environmental Protection Agency. . . .

UPDATE: While the Obama administration is releasing these cost savings with big fanfare, they aren't making public the costs of other new regulations. House Speaker John Boehner asks Obama to reveal the costs of the new regulations that are being enacted. From Politico:

In a letter that will be sent to President Barack Obama on Friday, House Speaker John Boehner charges that planned regulations have jumped nearly 15 percent over last year and he calls on the administration to calculate and publicize their economic impact.

“This year the Administration’s current regulatory agenda identifies 219 planned new regulations that have estimated annual costs in excess of $100 million each. That’s almost a 15 percent increase over last year, and appears to contradict public suggestions by the Administration this week that the regulatory burden on American job creators is being scaled back,” Boehner writes.
“I was startled to learn that the EPA estimates that at least one of its proposed rules will cost our economy as much as $90 billion per year. The Administration has not disclosed how many of the other 218 planned rules will cost more than $1 billion, nor identified these rules,” he added.

Boehner, who argues that the White House’s rhetoric about eliminating regulatory burdens is at odds with the reality of its regulatory wish list, wants the president to identify all regulations that would cause an impact on the economy of $1 billion or more.

It is the opening salvo in a battle over the administration’s ability to implement a wide range of policies without pushing new laws through Congress. While Congress has the power to override new regulations through the legislative process, it is inconceivable that the Democratic-led Senate would join the House in trying to thwart the president’s agenda. . . .
In his letter to Obama, Boehner says he wants the data on costly regulations by the time Congress returns to session next month so that it is “available as the House considers legislation requiring a congressional review . . . ."

Even Musicians are being scared by how the Obama administration is enforcing environmental rules.

Federal agents swooped in on Gibson Guitar Wednesday, raiding factories and offices in Memphis and Nashville, seizing several pallets of wood, electronic files and guitars. The Feds are keeping mum, but in a statement yesterday Gibson's chairman and CEO, Henry Juszkiewicz, defended his company's manufacturing policies, accusing the Justice Department of bullying the company. "The wood the government seized Wednesday is from a Forest Stewardship Council certified supplier," he said, suggesting the Feds are using the aggressive enforcement of overly broad laws to make the company cry uncle. . . .

The question in the first raid seemed to be whether Gibson had been buying illegally harvested hardwoods from protected forests, such as the Madagascar ebony that makes for such lovely fretboards. . . . .

It isn't just Gibson that is sweating. Musicians who play vintage guitars and other instruments made of environmentally protected materials are worried the authorities may be coming for them next.

If you are the lucky owner of a 1920s Martin guitar, it may well be made, in part, of Brazilian rosewood. Cross an international border with an instrument made of that now-restricted wood, and you better have correct and complete documentation proving the age of the instrument. Otherwise, you could lose it to a zealous customs agent—not to mention face fines and prosecution. . . .

It's not enough to know that the body of your old guitar is made of spruce and maple: What's the bridge made of? If it's ebony, do you have the paperwork to show when and where that wood was harvested and when and where it was made into a bridge? Is the nut holding the strings at the guitar's headstock bone, or could it be ivory? "Even if you have no knowledge—despite Herculean efforts to obtain it—that some piece of your guitar, no matter how small, was obtained illegally, you lose your guitar forever," Prof. Thomas has written. "Oh, and you'll be fined $250 for that false (or missing) information in your Lacey Act Import Declaration." . . .

Seven new EPA and transportation regulations would each cost at least $1 billion per year.

President Barack Obama says his administration is considering seven new government regulations that would cost the economy more than $1 billion each a year, a tally Republicans will pounce on to argue that Congress needs the power to approve costly government rules.

In a letter to House Speaker John Boehner, R-Ohio, Obama lists four proposed Environmental Protection Agency rules and three Transportation Department rules estimated to cost in excess of $1 billion. One of the proposed EPA rules – an update to the health-based standard for smog – is estimated to cost the economy between $19 billion and $90 billion. . . .

UPDATE: Cass Sunstein, Obama's administrator of White House Office of Information and Regulatory Affairs, denies that there are a lot of new regulations. Cass published this defense of Obama's regulations.

From Day One, President Obama has adopted a balanced approach to regulation, protecting the health and safety of the American people while taking steps to eliminate burdensome requirements that hinder economic growth and job creation. Underlying this approach is a belief that a smart, effective regulatory system depends on careful analysis of both costs and benefits and on an informed public discussion.
Unfortunately, some extravagant or false claims have arisen in recent months. The U.S. Chamber of Commerce announced recently that it is starting "a series of road show events" to complain about what it called a "regulatory tsunami." The administration agrees that unjustified regulatory costs should be cut. But there has been no such tsunami, and it is important to set the record straight. . . .
the Obama administration has initiated an unprecedented process for streamlining and eliminating regulations, with the goal of reducing unjustified costs. We are taking immediate steps to eliminate millions of hours in annual paperwork burdens for large and small businesses and more than $1 billion in annual regulatory costs. Hundreds of reform proposals from 30 agencies, now out for public scrutiny, promise to deliver billions of dollars in additional savings. . . .

Online Retailers Flooded with False Reviews

Apparently, there is quite a business going on producing these false reviews. From Ocala.com:

In tens of millions of reviews on Web sites like Amazon.com, Citysearch, TripAdvisor and Yelp, new books are better than Tolstoy, restaurants are undiscovered gems and hotels surpass the Ritz.

From left, Claire Cardie, Myle Ott and Jeff Hancock are among the Cornell University researchers studying fake reviews.

Or so the reviewers say. As online retailers increasingly depend on reviews as a sales tool, an industry of fibbers and promoters has sprung up to buy and sell raves for a pittance.

“For $5, I will submit two great reviews for your business,” offered one entrepreneur on the help-for-hire site Fiverr, one of a multitude of similar pitches. On another forum, Digital Point, a poster wrote, “I will pay for positive feedback on TripAdvisor.” A Craigslist post proposed this: “If you have an active Yelp account and would like to make very easy money please respond.”

The boundless demand for positive reviews has made the review system an arms race of sorts. As more five-star reviews are handed out, even more five-star reviews are needed. Few want to risk being left behind.

Sandra Parker, a freelance writer who was hired by a review factory this spring to pump out Amazon reviews for $10 each, said her instructions were simple. “We were not asked to provide a five-star review, but would be asked to turn down an assignment if we could not give one,” said Ms. Parker, whose brief notices for a dozen memoirs are stuffed with superlatives like “a must-read” and “a lifetime’s worth of wisdom.” . . .

In 2004, the New York Times ran this:

Close observers of Amazon.com noticed something peculiar this week: the company's Canadian site had suddenly revealed the identities of thousands of people who had anonymously posted book reviews on the United States site under signatures like ''a reader from New York.''

The weeklong glitch, which Amazon fixed after outed reviewers complained, provided a rare glimpse at how writers and readers are wielding the online reviews as a tool to promote or pan a book -- when they think no one is watching.

John Rechy, author of the best-selling 1963 novel ''City of Night'' and winner of the PEN-USA West lifetime achievement award, is one of several prominent authors who have apparently pseudonymously written themselves five-star reviews, Amazon's highest rating. Mr. Rechy, who laughed about it when approached, sees it as a means to survival when online stars mean sales. . . .

Walt Whitman and Anthony Burgess both famously reviewed their own books under assumed names. But several modern-day writers said the Internet, where anyone from your mother to your ex-agent can anonymously broadcast an opinion of your work, has created a more urgent need for self-defense.

Under Amazon's system, any user may submit a review without publicly providing any personal information (or evidence of having read the book). The posting of real names on the Canadian site was for many a reminder that anonymity on the Internet is seldom a sure thing. . . .

Obama moves on patent reform to help out Google

Obama is trying to change the patent rules so as to help out his friends over at Google. Here is a useful piece from the WSJ:

Google has come from nowhere to build a dominant position in smartphone software based on tying a free Android to Google search advertising (which is fine) and, arguably, by helping itself to seminal Apple innovations that created today's smartphone industry (not so fine).

Google's approach implicitly assumes that nobody has a right to exclude Google from use of their intellectual property. At best, after litigation, they might have a right to be compensated by Google.

But this is not how the patent system is supposed to work. Let us understand that Google's purchase of Motorola is the purchase of a bargaining asset; it does not automatically put Google in the right. Apple, as a patent holder, has every right to seek to preserve exclusive use of its inventions. In its eBay decision, the Supreme Court allowed that the possibility of "irreparable harm" might justify banning an infringing product outright, equivalent to an ITC import exclusion.

Those given to hyperbole might wonder what could be a clearer example of "irreparable harm" than Google stealing an industry. . . .

So how have the states with those tax increases done?

By comparison, the US as a whole rose or was flat for most of this year.

Remember Illinois' big tax increase that went into effect at the beginning of the year? How has that been working out? The Illinois Policy Institute has a new report on what has happened.

Illinois started to create jobs as the national economy began to recover. But just when Illinois’s economy seemed to be turning around, lawmakers passed record tax increases in January of this year. Since then, Illinois’s employment numbers have done nothing but decline.

Data released today by the bureau confirms this downward trajectory. When it comes to putting people back to work, Illinois is going backwards. Since January, Illinois has dropped 89,000 people from its employment rolls. . . .

Just to remind people what happened in Illinois in January. The tax was retroactive to the beginning of the year.

In a deal hammered out by the state's Democratic leadership, the lame-duck legislature pushed through a 67% increase in the state income tax and a 45% increase in the corporate tax.

The new income-tax rate would add about $1,040 to the tax bill of a family of four earning $60,000 a year, and the new corporate rate would move the state into the top 10 among corporate taxers nationally.

Skeptics worried the increase has the potential of chasing both businesses and residents out of the state, and Democrats face the possibility of losing political support in 2012.

In some respects, the move wasn't a surprise: Democratic Gov. Pat Quinn defeated a weak Republican candidate in November after pledging repeatedly to raise taxes. And the state's fiscal crisis had become increasingly untenable after years of using short-term borrowing to close budget gaps and short-changing its pension liabilities.

"The state was careening toward bankruptcy, fiscal insolvency," said Mr. Quinn, who pledged to the sign the bill. "We're in a period now of reform and recovery." . . .

Look what happened in Maryland, when they imposed a "millionaire's" tax in that state:

in Maryland in 2008 when the legislature in Annapolis instituted a millionaire tax. There roughly one-third of the state's millionaire households vanished from the tax rolls after rates went up. . . .

Earlier this year even a liberal economist such as Laura D’Andrea Tyson wrote: "After the 1986 tax overhaul, the United States had one of the lowest corporate tax rates among the advanced industrial countries. Since then, these countries have been slashing their rates both to attract investment by American and other foreign companies and to discourage their own companies from shifting operations and profits to foreign locations offering even lower tax rates. . . . The United States needs a significantly lower tax rate on corporate income, not a higher one."



KPMG Corporate and Indirect Tax Rate Survey, 2008, published in “Growth and Competitiveness in the United States: The Role of Its Multinational Companies,” McKinsey Global Institute, June 2010.

Thanks much to Tony Troglio for the first link.

67% of Democrat Congressmen not holding town hall meetings, 50% of Republicans

This is at least a partial measure of how much opposition Congressmen are facing back in their home districts. Most Congressmen are skipping meeting their constituents in public forums.

No Labels activists spoke to all 430 current members of the House of Representatives to find that only 176* of them scheduled meetings. The results of the phone survey also reveal that members of both parties share the blame, with about 67% of Democrats and 50% of Republicans stating they had no town hall meetings scheduled for the recess period. . . .

New California redistricting went out of its way to draw a lot of new districts along racial lines

Should redistricting be very "conscious" of ensuring as many racial minorities get elected as possible? The California experiment is discussed in this Fox News article.

Hoffenblum says if the result of previous redistricting was that it protected incumbents, the error with the citizens' map is that it is heavily skewed to racial demographics.
"We went from a political gerrymand to a racial gerrymand. That the commission became overly conscious of drawing seats on race. The Latino seats, the black seats, the Asian seats. And in the process of creating these districts based on race they divided counties, they divided cities and split cities." . . . .

And who wants to be in the Mortgage Lending business?

With huge numbers of foreclosures, mortgage companies have tried to find ways to expedite these cases. Instead of concentrating on whether mistakes have been made in foreclosures, government officials have gone after what they say is an improper process. The lenders dispute this, but Democrats think that they are doing everyone a great deal by delaying these mortgages being processed. Now the Federal officials are trying to hold up the mortgage lenders for tens of billions of dollars and still leave them open to these lawsuits. From the WSJ:

Efforts to reach a settlement that would end the long-running probe of foreclosure practices are snagged over whether banks will get broad legal immunity from state officials for mortgage-related claims.

Federal and state officials are seeking penalties of $20 billion to $25 billion from Bank of America Corp., J.P. Morgan Chase & Co. and other financial firms under investigation since last fall. The banks are pushing hard for a deal, but they have insisted on a wide-ranging legal release from state attorneys general. . . .

"The reason the banks would settle or pay anywhere near $20 billion to $25 billion is to get this behind them," said one person familiar with the banks' thinking. "There's no reason the banks would pay that amount of money and leave their flank exposed."

U.S. and state officials dismissed the push for broad immunity as a "nonstarter," according to a federal official involved in the talks, but they have countered with a narrower offer. It would cover robo-signing and other servicer-related conduct but leave banks open to potential legal action for wrongdoing in fair lending and securitization, according to people familiar with the situation. Attorneys general in California, Delaware, Massachusetts and New York have said they are investigating mortgage-securitization practices. . . .

$500,000 Stimulus Grant Produces 1.72 jobs (Not counting jobs lost where the money would have otherwise been spent)

This is great. Can't anyone see that this doesn't even create 1.72 jobs? Where did the money come from? What jobs would have been created if it had been spent elsewhere? According to the government nothing else would have been created. From Fox News:

A federal stimulus grant of nearly $500,000 to grow trees and stimulate the economy in Nevada yielded a whopping 1.72 jobs, according to government statistics.
In 2009, the U.S. Forest Service awarded $490,000 of stimulus money to Nevada's Clark County Urban Forestry Revitalization Project, aimed at revitalizing urban neighborhoods in the county with trees, plants, and green-industry training.

The project produced only 1.72 full-time jobs.

According to Recovery.gov, the U.S. government's official website related to Recovery Act spending, the project created 1.72 permanent jobs. In addition, the Nevada state Division of Forestry reported the federal grant generated one full-time temporary job and 11 short-term project-oriented jobs.
It also resulted in the planting of hundreds of trees -- which critics say is about the only good thing that came out of this stimulus project.
"Looking at the failure of the stimulus to live up to its promises, not just in Nevada, but throughout America, I think the question becomes ‘is there any good use of stimulus money?'" said Douglas Kellogg, communications manager for National Taxpayers Union, in an email to FoxNews.com.
A Nevada state official has a simple explanation for the low job growth.
"If the question is ‘was this a job-creating project?’ the answer is 'no, it wasn't,'" said Bob Conrad, public information officer for the Nevada Department of Conservation and Natural Resources. "It was one of a number of projects that we do believe helped improve natural resources in the state." . . .

Why some businesses won't criticize the government

American and many foreign companies have gotten a lot secret bailout money from the Federal Reserve. From Bloomberg:

Citigroup Inc. (C) and Bank of America Corp. (BAC) were the reigning champions of finance in 2006 as home prices peaked, leading the 10 biggest U.S. banks and brokerage firms to their best year ever with $104 billion of profits.
By 2008, the housing market’s collapse forced those companies to take more than six times as much, $669 billion, in emergency loans from the U.S. Federal Reserve. The loans dwarfed the $160 billion in public bailouts the top 10 got from the U.S. Treasury, yet until now the full amounts have remained secret.
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. . . .
Foreign Borrowers
It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG (UBSN), which got $77.2 billion. Germany’s Hypo Real Estate Holding AG borrowed $28.7 billion, an average of $21 million for each of its 1,366 employees.
The largest borrowers also included Dexia SA (DEXB), Belgium’s biggest bank by assets, and Societe Generale SA, based in Paris, whose bond-insurance prices have surged in the past month as investors speculated that the spreading sovereign debt crisis in Europe might increase their chances of default. . . .

Some Wisconsin Cities act to ban people carrying permitted concealed handguns in government buildings

It doesn't sound as if it is a stampede of cities doing this, and I assume after a few years people will realize that putting up these signs in the relatively small number of public buildings for these cities will have been a waste of money. From the Milwaukee Journal Sentinel:

Hartford considered a prohibition, but the Washington County municipality rejected it even though department heads had urged elected officials to continue the city's more than 50-year-old prohibition against having weapons on public property.

"Why would we preclude law-abiding citizens from being able to carry?" said Hartford Common Council President Tim Michalak, who did not want to restrict people's rights when the concealed carry law takes effect Nov. 1.

"A sign in front of a building is not going to stop the bad guys from walking into the building with a handgun. All it does is make sure that those people who are law-abiding don't have a handgun. . . . What it does is it assures the bad guys that the only people who are going to have guns in the buildings are bad guys. That to me is rather ridiculous," Michalak said. . . .

Biden's massive misstatements

From the UK Telegraph:

Vice President Joe Biden may have managed to cure his own stammer but he still appears to be pathologically incapable of speaking of his own accomplishments without exaggerating. In an address he made today to students at Sichuan University in China today (full text, as emailed out by the White House, here), he stated that he has had “an opportunity to literally meet every major world leader in the last 38 years”.. . .

Predicting where crime will occur to help fight crime

From Government Technology:

The project uses an algorithm that is similar to what’s used for predicting earthquake aftershocks. “There’s a belief that certain crime types — in this case, burglaries and vehicle thefts — can be predicted in the same way,” said Zach Friend, the Santa Cruz Police Department’s press information officer and principal management analyst.

The algorithm was developed by George Mohler, an assistant professor in the Department of Mathematics and Computer Science at Santa Clara University in California. The Santa Cruz Police Department reached out to Mohler after reading about the algorithm in the Los Angeles Times.

The Police Department worked with Mohler for six months starting in October 2010 to develop the project for real-world implementation. Since the model had already been created through grant funding, the department didn’t have to pay to use it.

For the six-month pilot, the Police Department pulls crime data every day from its record management system that tracks crime that’s been reported in the city. The data is put into a spreadsheet and geo-coded and then run through Mohler’s Web-based computer algorithm. . . .

In the nearly two months of use, the pilot has garnered positive results. Since the pilot’s deployment, the model has correctly predicted 40 percent of the crimes that it was aiming to predict, and the Santa Cruz Police Department has seen a reduction in the types of crime that it’s been addressing.

In addition, the Police Department saw a 27 percent decrease in the number of reported burglaries in July compared with July 2010. Friend said the department won’t know how successful the model is until it’s been running for at least three months. . . .

Thanks to Jeff Yager for the link.

Can anyone make sense of Goolsbee's statements here?

So Goolsbee says that he agrees that "If the market wants to produce clean energy, it'll produce clean energy," but he acknowledges this despite supporting massive subsidies to get the companies to produce products that they wouldn't produce without the subsidies. From an interview with Larry Kudlow.

Mr. GOOLSBEE: . . . Now it seems like you're making fun of some of the alternative energy stuff, but if you look at China, if you look at Europe and if you look at a lot of the faster growing regions of the world, they're heavily investing in it.

KUDLOW: It's been a dismal failure in Europe.

Mr. GOOLSBEE: (Unintelligible)...alternative energy.

KUDLOW: It's been a dismal failure in Spain. It's been a dismal failure in Europe. I say, Austan, if the market...

Mr. GOOLSBEE: It seems like in China and Brazil it's been quite a success.

KUDLOW: If the market wants to produce clean energy, it'll produce clean energy. Natural gas from shale is clean energy.

Mr. GOOLSBEE: Look, I agree with that.

KUDLOW: I just don't see why we don't...

Mr. GOOLSBEE: I agree with that.

KUDLOW: ...call the EPA dogs off. That's one of these regulatory issues. Call the National Labor Relation dogs off of Boeing, Austan. In other words, some of this stuff, there's very little presidents can do. I get that.

Mr. GOOLSBEE: OK. [I don't think that Goolsbee is conceding anything with this last OK.]

Obama Administration rejects trial experiment in NYC that would have temporarily stopped using Food Stamps on SweetenedSodas

There is a problem: the poor on food stamps are obese.

There is, on the other hand, a lot of evidence of obesity among the poor; their obesity rate is estimated at 36%, and the obesity rate among poor children seems to be about twice the rate among non-poor children. The poor people are eating more calories than they need. . . .

Apparently, there is some research claiming that soda and potato chips are the two worst foods for your weight.

So why not say if the government is going to pay for your food, we will restrict what you can buy. You are not allowed to use food stamps to buy alcohol, so why not some other types of drinks that are deemed wasteful?

Well, NYC tried, but the Obama administration said no. Possibly, they just don't want to discourage people from going on food stamps.

While sharing the goal of reducing obesity, an official with the nation's food stamp program said in a letter Friday addressed to the state Office of Temporary and Disability Assistance that the USDA had concerns about the plan's "potential viability and effectiveness."

Jessica Shahin, associate administrator of the program, wrote that the proposal lacked clear product eligibility guidelines, didn't take into account the burden that might be placed on city food retailers and failed to put forward a credible design for evaluating the effect on obesity and health. . . .

A "burden that might be placed on city food retailers"? How is that possible? If consumers change what they want to buy for any reason, why wouldn't food stores start stocking the new products that they want to buy?

Here is the weird thing. The Obama administration has no problems restricting what Americans in general eat, but that they don't want to restrict what those who the get their food costs paid by the government eat. Examples:

1) Salt:

The FDA, acting on a recommendation to be made by a task force of the Institute of Medicine of the National Academy of Sciences, is about to take the unprecedented step of regulating the salt content of processed foods. . . .

2) the FDA's New Calorie Count Regulations