Relevant and even prescient commentary on news, politics and the economy.

Most generous welfare program in history

by cactus Bush, The View From 2004 In 2000, I ran the numbers and it was obvious to me GW’s economic plan was complete BS, so I assumed the rest of what he was telling us couldn’t work either. But I can understand why many people voted for him. 2004 is a bit harder for […]

Shorting state finances after being bailed…good for profits, but….???

rdan Hat tip ataxingmatter for the link to this matter in Bloomberg: Dec. 10 (Bloomberg) — Goldman Sachs Group Inc., one of the top five U.S. municipal bond underwriters, is angering politicians and public-finance officials in New Jersey, Wisconsin, California and Florida by recommending that investors purchase credit-default swaps to bet against 11 states’ debt. […]

Barter part 1

sort of an op-ed by rdan I have noticed from Yves Smith that the Baltic Dry Index is tanking*, and that letters of credit cost 3-4% to establish instead of the lower 1% or so. Trade has relied on ‘letters of credit’ to keep goods flowing. Correspondingly ‘sovereign bartering’ between governments is increasing as pricing […]

The Alpha and the Omega of mid-2007

Sometimes, Blog Posts Write Themselves: Cleaning up a hard drive of old files, I ran across these two articles from the middle of last year. First, the WSJ, arbiter of business sanity and purveyor of a positive meme whenever one is to be found, on 28 July 2007—nine months after the general supply of securitizable […]

Down under observations

by reader OSO Summary: The two best examples of neoliberalism working are Australia and NewZealand. These two nations (of which I am a citizen of one) enactedmajor economic reforms in the early 1980s and have benefited since. The Washington Consensus, despite being out of fashion these days, is ablueprint that both Australia and New Zealand […]

Somebody’s gotta ask!

by cactus Questions About the Big 3, and Legacy Costs I keep hearing that the Big 3’s Problem is that it has all these legacy union retirees who are expensive as all heck to maintain and add tremendously to the cost of manufacturing cars. That raises a few questions: 1. How many years will it […]

WXYZ

Up to date coverage on Auto News can be found at WXYZ.com. Update: Link fixed. Update 2: Union contracts linked in comments, hat tip MG.

If You Want to Know Why Economists have a Bad Reputation

Look no further than some of the brain-dead idiocy suggested as part of this NY Times poll of economists. Saddest quote of the day is from Andrew Samwick, who decided to be stupid the day the U.S. elected a non-Republican president: “If I had my druthers, the word ’stimulus’ would be expunged from public discussion, […]

Good Summary, with Expanded Notes

Ken Houghton Pulled from comments (to the Librarian post at Eschaton): [W]ithout economic knowledge, DFHs don’t understand why the bailout of banks so that they would keep credit flowing is critical, while the bailout of the auto industry caused by the fact that the banks spent the money on acquisitions and executive pay instead of […]

Blame Basel II

Robert Waldmann gives advice to libertarians, free market fanatics and Republicans on how to blame the financial crisis on government regulation. Quite frankly, their efforts so far have been pathetic — Let’s pretend that Fannie Mae and Freddie Mac lead the way in sub-prime mortgages which were orginally defined as mortgages that they wouldn’t touch. […]