Comments (0) I showed this video on Quantitative Easing to my American Government students last night prior to our scheduled showing of the movie Absence of Malice. It’s a little over 7 minutes long. By minute 3 they were laughing out loud. It may be the first time they understood economics, something Amity Shlaes discusses in her Forbes piece, Economics by Cartoon.
Interesting list from The Economist. Among dead economists, Adam Smith gets two votes, Friedrich Hayek receives one, and Milton Friedman gets a mention.
“Even Islamists have to eat,” and that doesn’t bode well for the whatever government assumes power as the result of the Egyptian revolution. So says David P. Goldman, aka Spengler.
Great little story from The New York Times about the theft–and eventual return–of a backyard chicken named Gertrude.
I can relate, well, not totally. Gertrude, the protagonist in the Times’ story, is a Rhode Island Red, my three dumb clucks are Buff Orpingtons. My chickens have never left the yard, while that’s the reason for Gertrude’s story in The Times.
You’ve never met my chickens? If you’ve been reading my blog, you actually have met them. If you haven’t been reading–and even if you have–here they are at a more mature age:
We’ve had them since they hatched about 10 months ago. And though they give certain meaning to the words chicken sh*t and dumb cluck, our backyard wouldn’t be the same without them, nor would our breakfast. After the initial investment for coop, food, and feeders, my Dumb Cluck #1, #2, and #3 almost pay for themselves.
New York Times food critic Mark Bittman has a post up titled A Food Manifesto for the Future–the word manifesto is particularly apt–in which he attempts to set our tables in the future. What we eat; where and how it’s grown or raised; and whether it’s processed, subsidized, or advertised are all of concern to him. More importantly–and because he really has little or no power–he thinks it ought to be the concern of government, though he is careful to caution that
This isn’t nanny-state paternalism but an accepted role of government: public health. If you support seat-belt, tobacco and alcohol laws, sewer systems and traffic lights, you should support legislation curbing the relentless marketing of soda and other foods that are hazardous to our health — including the sacred cheeseburger and fries.
No, Mr. Bittman, one doesn’t follow the other; furthermore, if I accept your premise, where does the other end? If I accept sewer systems, should I also be okay with my government controlling what I read, listen to, or watch? After all, for example, your paper has drawn a straight line from Sarah Palin, right-wing talk radio, and the Tea Party to Tuscon, and we certainly don’t want any more of that nasty business.
Anyway, Mr. Bittman’s laundry list of things he’d like to prohibit or subsidize reads like a page from the rules implementing the Communist Manifesto (parentheticals are mine):
-End government subsidies to processed food. (Hey, I’m fine with that.)
. . .
-Begin subsidies to those who produce and sell actual food for direct consumption. (Oh, I see. He’s not against subsidies; he’s against subsidies he doesn’t like. Never mind.)
. . .
-Outlaw concentrated animal feeding operations. (I’m on the bandwagon again!)
. . .
-Encourage the development of sustainable animal husbandry. (I’m beginning to detect a pattern here.)
. . .
-Encourage and subsidize home cooking. (A very distinct pattern.)
Mr. Bittman goes on and on and on, but you get the idea. I also get the idea that he reads from the same playbook Al Gore uses. Bittman writes,
It’s difficult to find a principled nutrition and health expert who doesn’t believe that a largely plant-based diet is the way to promote health and attack chronic diseases . . . (emphasis mine)
Note the word principled. It’s purpose in that sentence can best be understood through substition:
It’s difficult to find a nutrition and health expert I agree with who doesn’t believe that a largely plant-based diet is the way to promote health and attack chronic diseases . . . (emphasis mine again)
And that substitution illustrates perfectly Mr. Bittman’s approach to food in our lives. He doesn’t like who’s picking the winners right now, so he wants new ‘pickers,’ a bias he betrays in one more bullet point on his list of winners and losers:
-Break up the U.S. Department of Agriculture and empower the Food and Drug Administration.
There, he says to himself in a very self-satisfied way, that will fix it. My elites will do much better than that last batch of elites.
I agree wholeheartedly with one item on his bulleted list, though I might disagree with him on how the idea is implemented:
-Mandate truth in labeling. Nearly everything labeled “healthy” or “natural” is not. It’s probably too much to ask that “vitamin water” be called “sugar water with vitamins,” but that’s precisely what real truth in labeling would mean.
I’m all for more information, as long as we leave it at that and let the masses in the market decide what to do with that information. I’m also all for eliminating subsidies–totally. Shifting them from one set of winners to another doesn’t cut it.
I’m going to continue monitoring the Food Czar at The New York Times, if for no other reason than to make sure I get to read the rest of the story behind this little teaser:
(Someday soon, I’ll write about my idea for a new Civilian Cooking Corps.)
I can’t wait!! Visions of fair-skinned culinary school graduates dressed in lederhosen are dancing in my head as I write.
Can it be? We’ll have to wait and see. But right now I have to cook breakfast.
I know the answer
The chicken came first:
Then the egg:
The secret’s out.
The two key statments:
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011.
and
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
All emphasis mine.
Today, I begin watching the Fed. The FOMC began its January meeting yesterday and ends today. According to Bloomberg,
The FOMC announcement for the January 25-26 FOMC policy meeting is expected to leave the fed funds target rate unchanged at a range of 0 to 0.25 percent. Market focus will be on any update on the current round of quantitative easing and if there are any upgrades on the economy.
The announcement should come later today. Then we’ll see how the consensus holds up.
This morning, as I drove to meet my brother and sister-in-law for breakfast, NPR’s Morning Edition treated me to a teaser lead-in to a story that taxpayers were soon going to get back all the money the government had invested in AIG during the bailout. The actual story (which I cannot find online) confirmed the headline, though it sort of hedged with words like “depending on stock performance” and such.
I own shares in AIG. Prior to the bailout, I owned 20 Xs more shares–but that’s another story. Point is, I watch the stock and news about the stock. And I watched recently as the share price climbed above $52 a share on January 7 (I bought those shares at the reverse split-adjusted price of $43.60 on 9/18/08). Since that high, the share price has fallen precipitously to just over $42.00 as I write, almost a 20% decline in two weeks. In other words, I’m worse off than when I bought the shares over three years ago. So exactly how are the taxpayers getting paid back–soon–if the market value of AIG has decreased? I understand that the government and/or AIG may sell off operating companies and repay the debt from the proceeds. Do the value of the parts exceed the value of the whole?
Or is this more Prava-like reporting of the sort that the Seattle Times debunked this morning? Referring to the White House’s recent announcement of $19 billion in new Boeing jet orders, an announcement timed to coincide with the visit of Chinese President Hu Jintao, reporter Dominic Gates writes,
The deal President Hu signed does not include any new jet orders.
Delivering the formal approval during Hu’s visit is designed to make the Chinese government appear responsive to U.S. concerns about the balance of trade.
However, all of the airplanes in the sale were announced and booked by Boeing as firm orders over the past four years. Chinese airlines had already paid nonrefundable deposits and signed contracts for the jets, most of them as far back as 2007.
Gates continues,
The White House announcement said the total value of the orders was $19 billion.
But that’s the list price, which airline customers never pay.
Based on market data from aircraft-valuation consultancy Avitas, the actual price for those 200 planes is about $11 billion.
To be fair, Gates points out that Boeing says that the Chinese government’s approval is important, but . . .
Summing up the deal, Gates closes with,
Our verdict: The Chinese orders are real and will help keep Boeing workers busy here through 2013. Still, the White House announcement, while technically true, left a completely false impression.
The orders weren’t new. They weren’t really worth $19 billion. And Boeing isn’t soaring ahead of its big global rival with this deal.
An accurate headline for the news might have said: Hu finally signs off on old orders for U.S. jets, but Boeing still lags Airbus in China.
Likewise, an accurate lead-in for the AIG story on NPR might have said: Taxpayers will recoup their investment in AIG if the stars align and the stock price ever gets high enough, but that’s far off in the future.
Update: I found a Reuters story that I think the NPR story was based on. The three nut paragraphs:
In its third report on the bailout of AIG, the GAO said U.S. taxpayers’ risk exposure to the insurer increasingly is expected to be tied to the success of AIG and its value as seen by investors in the company’s common stock.
“The government’s ability to fully recoup the federal assistance will be determined by the long-term health of AIG,” the report said.
A Treasury official said taxpayers were in a strong position to recover “every dollar put into AIG.” (emphasis supplied)
I’m virtually certain the two quotes appeared in the NPR story. The second quote resembles the NPR headline. Alert readers will notice that the first quote basically takes all the zing out of the second, and thus the headline of the NPR story.
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