Reflation in American History

Since the early 17th century, American governments (colonial, state, and federal) have tried and failed to restart business expansions by reflation, writes Scott Trask. But new money in the system is no substitute for genuine production. It is too early to see the long-run consequences of the Bush-Greenspan reflation, but if the past is any guide we can expect the next decade to more resemble the 1970s than the 1990s.

Would a Private Fire Fighter Do This?

“The first helicopter pilot to see the patch of flames that would become the catastrophic Cedar Fire radioed for aerial water drops,”  reports the AP, “but he said state firefighters rejected his request because it came minutes after such flights had been grounded for the night. Within hours, the flames cascaded out of control and killed 13 residents between the mountains east of San Diego and the city. It eventually became the largest wildfire in California history.”

 

GDP Data: Treat or Trick?

Larry Kudlow has greeted the news this week of 7.2% GDP growth with great enthusiasm. He sees a ‘barnburner recovery’ in this data. This, he thinks, is a true recovery. What is the source of this recovery? Capital expenditures rose 11%, up from 8% from the last quarter. A combination of tax cuts and expansionary monetary policy from the fed spurred an investment boom.

Deep in Debt, Caught in a Net

This old English proverb concisely describes the financial condition of many Americans.  Household debt is rising at an 8.8 percent annual rate, home mortgage debt at 14.2 percent.  Total debt in the United States doubled from 1998 to 2002, from $16 trillion to $32 trillion and may double again in the next five years.  The Federal government, which sets the pace, reported a $555 deficit for the 2003 fiscal year; its total debt is given at $6.783 trillion.  For the next two years the budget deficits are estimated at $566 billion to $644 billion each, which should increase

Buchanan: What Is Public Choice?

Nice summary statement by James Buchanan, that also references Mises (Policy): “Public choice, as an inclusive research programme, incorporates the presumption that persons do not readily become economic eunuchs as they shift from market to political participation. Those who respond predictably to ordinary incentives in the marketplace do not fail to respond at all when they act as citizens.” (Link courtesy of TG)

 

The Politics of Fire

Proof that even the Weekly Standard runs sensible pieces from time to time: Up in Smoke by Hugh Hewitt  (”The core problem is that species protection prohibits many ordinary fire precautions. You cannot clear coastal sage scrub, no matter how dense, if a gnatcatcher nests within it--unless the federal government provides a written permission slip which is extraordinarily difficult to obtain.

Re: The Politics of Fire

There is little doubt that even the Weekly Standard can run sensible pieces from time to time, but one wonders whether such pieces are dictated more by the magazine’s funding sources than in response to a genuine appreciation for market order.  If it were more consistent, the Weekly Standard would at least equally criticize regulations drawn up by defense industry extremists as it does those drawn up by environmental extremists.  Both, after all, serve the purpose of strengthening a large central state, although, arguably, more innocent people hav

The Economist on the GDP Boom

The Economist offers an interesting commentary on the GDP boom: “While America’s corporations have been strengthening their balance sheets, the same cannot be said for households. According to Thursday’s figures, consumer spending rose at an annual rate of 6.6% in the last quarter. Pre-tax incomes, however, grew by much less. Part of the difference was filled by borrowing, which was growing at an annualised rate of over 5% in the summer months.

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