Booksmoore » economics

Poor Is A Relative Term

chadamoore — Sat, 22 Aug 2009 17:38:40 +0000

Doug Wilson is always provocative about politics, church and society, and economics. He makes his points well.

http://www.http://www.dougwils.com/index.asp?Action=Anchor&CategoryID=1&BlogID=6772dougwils.com/index.asp?Action=Anchor&CategoryID=1&BlogID=6772

Cash for Clunkers Junked

chadamoore — Fri, 31 Jul 2009 14:25:13 +0000

The much touted Cash for Clunkers is itself getting ready to get junked. What should we think about proposed massive programs like health care reform if “smaller” (there are still billions involved!) programs like this cannot be effectively planned and carried out?

By the way, the $1 Billion set aside for covering turned in clunkers, at $4500 a pop, would provide for something like 222,222 vehicles, to say nothing for the cost of running the program itself. I’m sure the figures are not quite this high in 2009, but in 2006, Americans purchased 7,667,066 passenger vehicles. That is roughly 147,000 vehicles each week. Assuming that as many potential buyers as possible would attempt to take advantage of the deal, you can see that a program covering only 222,222 trade-ins would run out in just a few weeks. How come little ole’ me can figure that out just from Wikipedia and applying some common sense but our government cannot?

What would be a more realistic figure? Let’s assume that Americans would buy 6 million vehicles in 2009. Let’s also assume that just one-fourth of those sales would rely on the cash for clunkers program, that’s 1.5 million cars. Do a little math and you can see that that program would require $6.75 Billion. But still that’s quite an assumption!

How about this: what if government would stay out of market manipulation and stop applying direct pressure to the market?

See the article, “Cash for Clunkers Runs Out of Gas,” on the Wall Street Journal.

UPDATE: Congress has voted to add a couple more $billion to the program.

The Tumultous History of US Banks

chadamoore — Sat, 11 Oct 2008 12:00:41 +0000

As we are going through this economic crisis that is hitting our banking institutions so hard it is useful to have a little context for light. John Steele Gordon, at the Wall Street Journal, provides this short statement of the roots of our current crisis:

“In the 1990s interstate banking was finally allowed, creating nationwide banks of unprecedented size. But Congress’s attempt to force banks to make home loans to people who had limited creditworthiness, while encouraging Fannie Mae and Freddie Mac to take these dubious loans off their hands so that the banks could make still more of them, created another crisis in the banking system that is now playing out.”

Read the whole thing: A Short Baking History of the United States.