- European State Bailouts Return With a New Look (Bloomberg): “The bailout -- for two decades the most reviled of economic solutions -- is back in fashion. Paris, naturally, is the hub. Last week, the French government unveiled a 7 billion-euro ($7.94 billion) rescue package for Alstom SA, the engineering giant, made up of loan guarantees and new shares. That followed on from a 9 billion-euro loan offered last December to France Telecom SA, and a combination of loan guarantees and tax breaks for Electricite de France, Europe’s largest power company. Still, it would be wrong to single out the French. Much of the rest of Europe is playing the same game. Britain, which has given up all pretence of believing in free capital markets, is just as busy. Last week, U.K. Coal Plc, which embodies the remnants of the once mighty British coal industry, asked the government for 79 million pounds ($127 million) in aid to extend the life of eight mines.”
- Defense Spending Gives Boost to Economy (also known as military Keynesianism, a GOP specialty) (CNN.com): Federal defense spending is providing a bigger lift to the economy than expected, acting as the second-biggest contributor to U.S. growth in the second quarter of the year. The impact is even more striking, given that defense accounts for less than 5% of annual output, compared with a peak of about 40% during World War II. Consumer spending — which makes up two-thirds of the economy — rose by $55 billion in the quarter, while defense jumped $40 billion. Prior to the war in Iraq, some economists downplayed the idea that defense spending would have much impact, given its smaller share of the economy and what was expected to be limited fighting. Much of the impact was a one-time burst because of the war. But federal spending will continue to provide a bigger boost than in much of the 1990s.”
- Fed, ECB Poised to Raise Interest Rates, Futures Market Shows (Bloomberg): “Bond investors, who little more than a month ago were predicting lower interest rates amid a growing risk of deflation to the global economy, now say the Federal Reserve, the European Central Bank and the Bank of England will soon be poised to raise rates.”
- Rice Explains Why You Should Support the Occuption (Lew Rockwell, LRC): “Not too many months after Donald Rumsfeld told us how he and Bush were like the founding fathers except of Iraq, Condolezza Rice, national security adviser, has weighed in to further explain how the bloody and destructive occupation figures into American political history. She says that there is an analogy between Iraqi politics in 2003 and US race politics in the 1960s.”
- New Film Reviews on Mises.org: “Bananas” and “Seven Days in May“
