Before you slavishly spew the neo-con psychobabble they taught you in a second-year Econ course, let me quickly defend “protectionist” industrial policy. It promises new jobs. It presents a targeted method to stimulate new industries with positive externalities for all of society to enjoy (e.g. clean energy). Industrial policy aimed at “green” jobs and industry is not “as” protectionist since there is a very weak global green industry presence to begin with. Sure, the Chinese and Europeans are in the race, but the race just started. There is real potential here, and all industries can be considered “infant” at this stage. Give the baby a goddamn bottle already!!!

It is time for the US to stop the weak subsidies at the backend (buyer credits) and start a more comprehensive, and incentivizing, approach. The Feds should use carrots to get States to get their act together with a local green movement, use public universities as incubators, etc. It’s not really a question of how, but how much: a ROBUST package of policies should be implemented that energizes and strengthens this pathetic industry. The private market (gasp!) is too slow; putting a few hybrids on the roads and a smattering of solar panels on American roofs will not do.

To all ye who think government is incompetent: the US Military is the most socialist organization in the United States, and the most advanced military in all of human history. If the US can contract with Boeing and others to build the best jets in the world, why can’t the US government contract with green technology firms to build a new future for the US? Shame on you.

the current state of affairs

Spirit airlines finally took the plunge, charging up to $45 per carry-on. Now I know, here it comes the OUTRAGE from passengers, but before you start picketing, Spirit said they lowered most fares about $40, so in reality they are charging an excise tax to prevent you from taking on your bag, which seasoned travelers will love. In addition, diaper bags, books or a small bag that can fit under your seat is exempt (you can calm down power users)

Excise taxes are great. Much like taxes on booze and cigarettes, they persuade you to use less of a product or service by making it more of a financial burden. If the risk of cancer wont make you quit, perhaps a shocking price tag will.

So what does this mean for air travel? I hope every airline does this. Lower the ticket price by the cost of the “tax” and force people to prioritize their needs and check that bag. Let’s keep those overhead bins wide open, and if I get the opportunity I will certainly fly Spirit airlines.

Yeah..Keep Stuffing. THAT will work.

The average spending by OECD countries (Europe/USA/Japan…) was $2,966 per person in 2007 (the USA was at $7,290). In 2007 Canada spent $3,895; France $3,601; UK $2,992; Japan $2,581.

I truly do not understand how the USA continues to subsidies those special interest in favor of the current obviously broken system. How
people can possible claim the USA is so bad at health care we can’t possible just pay say 20% more per person to get results no better than other countries. We are not comparing the USA to some idealized dream system. We are comparing it to government run programs that are amazingly cheaper and have at least equal (often better) performance measures.

Do these special interests really expect us to accept that the USA system requires us to pay 243% of the OECD average for no better outcome measures? And even then, tens of millions of people’s lives caused great distress due to the lack of health care or financial ruin due to health care costs they must pay out of pocket? The apologist for the special interests have had decades to fix this system. We can’t afford to keep letting them distort our economy for their benefit. They have had decades to make gains. We need to stop letting the special interests delay and start adopting sensible
solutions now.

Their are many paths to improvement that can be taken at the same time. We need structural reform. We also need performance improvement for health care organizations. The recent health care bill primarily sought to deal with the lack of coverage for tens of millions of people. The bill is also filled with many good test efforts of real improvement that can lead to savings. The time for accepting those that have run a system that costs far too much and delivers far to little should be over.

Guest post by John Hunter of
Curious Cat Investing
and Economic Blog.

Karzai, whatever his motivations, can either gain BIG or lose BIG here. His assertion of autonomy over Afghanistan could lead to greater bargaining power with the US. OR, quite differently, it could cost him his seat at the helm. I think it is more likely Karzai will benefit from this little spat with the White House, since they know removing him could destabilize the whole country. They also know removing him would be step backwards.

No matter what happens, this incident highlights the game puppet governments play with their imperial masters. Like pubescent teenagers, they must rebel just enough to assert their authority and independence. But if they go too far, and crash Dad’s car, out comes the belt, or the Navy SEALs, as the case may be.

Ben Scott, the policy director for Free Press stated” This decision destroys the F.C.C.’s authority to build broadband policy on the legal theory established by the Bush Administration,”

So… What’s that mean for us (I’m a Comcast user) – It means that ISPs now have even more control. Comcast could at anytime make a pyramid of net users, each with a different price, you like watching HULU? You might be paying more- god forbid you read a book over at Gutenberg.org – that free book just cost you money. With the highly intensive applications hitting the net; what’s a lowly consumer to do? In terms of economics, Comcast is thinking about the bottom line, what they are NOT thinking about is the consequence. Some enterprising company will make out due to this and start offering an “unlimited” plan for internet, then throw in a price war and ISPs are the new cell phone industry.

In somewhat positive news, Google and Microsoft are outraged, two giants I wouldn’t want to wake up, they claim that this action is limiting innovation. With Comcast being one of the biggest media companies around, it should be an interesting battle. Whatever the outcome, I just hope I don’t have to start searching for those free AOL cd’s to keep writing here.

You've Been Screwed!

The answer is not much.

It did not end the government-sanctioned monopoly that the health insurance industry enjoys (and the MLB, those bastards).  It did not take significant power away from insurance companies (it could be argued that this law actually BENEFITS the industry by forcing people to buy insurance).  It did not create a government run health care program, separate from the private sphere.

It DID “give” (make people buy) health insurance.  It DID impose new regulations on insurance companies that were viewed as “ruthless” (pre-existing conditions, age limits, etc.).  But these old practices, now outlawed, were just good business practices for a profit maximizer, but really really bad for the public in general.  That’s what the government’s regulatory role is: to reap the benefits of the free market, and outlaw the ugly tendencies of capitalism.  (It should be noted we DON’T know what the free market would do with these bad practices in this case, since this is a oligopolistic structure).  It should be noted that financial regulation is a great analog here:  if activity is lucrative AND legal, but harms the public at large, it will be widespread (re: financial meltdown).

Why is policymaking so impotent to solve major problems?

The United States Congress is overrun with lobbyists and special interests.  Health care was watered down significantly to pacify Congress’s corporate overlords, and financial reform is toothless.  Again, very simple:  the political system has evolved to require candidates to fundraise with the help of corporate sponsors.  With the new SCOTUS ruling (Citizens v United), corporate speech is more powerful than ever.  Political influence is a zero sum game, the more profit maximizers have, the less the general public has.  Politicians are supposed to be looking out for the public good, not maximizing profits….

steeeeerike.

Speak up...Congress Cant Hear You!

President Obama made a speech saying that the passing of this bill showed that government for the people, by the people still worked. Funny…no one EVER asked what I wanted.

the crazy holiday season in full swing time is a little tight. Dennis and I promise to get back on it

in the new year. We want to wish you and yours a happy holiday season and we will see you in the new

year!