Are Government regulations the cause of all troubles?

Walter Williams has an interesting editorial today on the subprime crisis, and the item that drew my attention is its mention of the Community Reinvestment Act of 1977. It appears as this is another example of Government interference with the free markets, and it mandates lenders to offer home ownership opportunities to underserved populations, and each bank must meet the credit needs of the entire community. In other words, this act that was opposed by virtually all economists forces banks to lend to subprime borrowers. It's like affirmative action and equal opportunity for the banking industry. Do you see any link between this and the subprime problems??

I don't think we need to argue anymore that government regulations are only causing more problems. The Freakonomics guys had an article yesterday in the New York Times in which they show, in their own style, how the Americans with Disabilities Act only helps increase unemplyment for americans with disabilities, while the Endangered Species Act does more to endanger the species on the list than to protect them.

When will politicians, especially liberals, udnerstand that the Government cannot fix externalities, and it should just leave the free markets take care of the problems??

Economics 102: Mortgages and economic stimulus

Today I read two very informative articles about some hot topics in the economy:

• Mortgage securitization: the underlying mechanisms of the mortgage market and what went wrong (from Econbrowser)
• Stimulus and superstitions: how the Government and the Fed affects the aggregate demand, and would it work? (from National Review)

New York Times advocating Free Trade??

OK, I lived to witness this... NY Times publishing an op-ed in support of Free Trade: "What to Expect When You’re Free Trading" (by Prof Steven Landsburg).
It's probably in response to the wacko idea of compensating people for job losses due to free trade and outsourcing. What's worse is that even candidates looking for the conservative vote advanced this crazy, populist theory.

From Prof Landsburg's article: Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door?

It's the employees who bear the burden of the Corporate Tax

A just released Treasury research paper shows who bears the burden of the corporate tax. Just when presidential candidates talk about increasing corporate taxes, just to squeeze those greedy, economy boosting, paycheck providing businessman, the Treasury research reaches the conclusion:

The incidence of the corporate income tax is an important issue for designing tax policy. Who bears the corporate income tax can affect overall conclusions about the progressivity of the tax system. Policy analysts have often made assumptions about how to allocate the corporate income tax in measuring the distribution of tax burdens.

A common assumption, based on theoretical models of tax incidence, is that capital (i.e. shareholders) bears the burden of the corporate income tax. Recent empirical work using cross-country data on corporate taxes and wages suggests reconsidering this assumption; labor may actually bear a substantial burden from the corporate income tax.

It shows how a 1% increase in the Corporate Tax will result, in the long run, in an almost 1% decrease in wages.

Why is California burning?

This article by Robert J. Smith summarizes very well the real proven causes why we have so many (more and more) wildfires. It's not global warming as some lunatics in the media try to suggest, but the eco-policy that the Left has been promoting.

Court finds inaccuracies in Inconvenient Truth, labels it "political work"

In an event completely ignored by American media, a British court decided that Al Gore's "An Inconvenient Truth" contains material falsehoods and shouldn't be shown in classrooms without a warning which among others say that "the film is a political work" and that showing it without pointing out the innacuracies is "political indoctrination".

Among the inacuracies discovered by the Court after the expert testimony of scientists are:

• The film claims that melting snows on Mount Kilimanjaro evidence global warming. The Government's expert was forced to concede that this is not correct.
• The film suggests that evidence from ice cores proves that rising CO2 causes temperature increases over 650,000 years. The Court found that the film was misleading: over that period the rises in CO2 lagged behind the temperature rises by 800-2000 years.
• The film uses emotive images of Hurricane Katrina and suggests that this has been caused by global warming. The Government's expert had to accept that it was "not possible" to attribute one-off events to global warming.
• The film claims that a study showed that polar bears had drowned due to disappearing arctic ice. It turned out that Mr Gore had misread the study: in fact four polar bears drowned and this was because of a particularly violent storm.
• The film threatens that global warming could stop the Gulf Stream throwing Europe into an ice age: the Claimant's evidence was that this was a scientific impossibility.
• The film suggests that the Greenland ice covering could melt causing sea levels to rise dangerously. The evidence is that Greenland will not melt for millennia.
• The film suggests that the Antarctic ice covering is melting, the evidence was that it is in fact increasing.
• The film suggests that sea levels could rise by 7m causing the displacement of millions of people. In fact the evidence is that sea levels are expected to rise by about 40cm over the next hundred years and that there is no such threat of massive migration.
• The film claims that rising sea levels has caused the evacuation of certain Pacific islands to New Zealand. The Government are unable to substantiate this and the Court observed that this appears to be a false claim.

Climate news you'll not hear in the media: Arctic melt, ozone and silencing the experts

A NASA report just showed that the melting of Arctic ice has nothing to do with global warming. Of course noone in the media is reporting this, after all it's pure science, not political crap. In brief, "the rapid decline in winter perennial ice the past two years was caused by unusual winds. "Unusual atmospheric conditions set up wind patterns that compressed the sea ice, loaded it into the Transpolar Drift Stream and then sped its flow out of the Arctic," he said. When that sea ice reached lower latitudes, it rapidly melted in the warmer waters"

Recently, the democratic governor of Virginia has sacked the state climatologist Dr. Patrick Michaels just because he didn't agree with the global warming hype and repeatedly debunked with scientifical data Al Gore's claims. I didn't see any mention of this anywhere.

And finally, it was finally explained that the ozone hole is not manmade. What was considered "consensus" after just 25 years of measurements is now proven false. The ozone hole is expanding and shrinking due to unknown causes, but definitely not related to human activities. So we gave up sprays, aerosols, and every space shuttle launch is like a death watch because freon was banned and it was all for nothing.