If the government does bail out the muni bond market, how should it go about things? The initial assumption is that they'll only guarantee existing debt. Otherwise, it would be like handing the keys to the treasury to every mayor, county board, and state legislature, and telling them to go to town.
But once the treasury has bailed out a single state, there will be a strongly implied guarantee on all such debt. So you don't give them the keys to the vaults, but you do leave a window open, point out where the money's kept, and casually mention that you've given the armed guards the week off.
I don't see how the government can make a credible committment not to bail out various localities who overspend, if it's already done so. And if that's the case, there's no way to avoid the moral hazard, so we might as well go ahead and offer the explicit guarantee in exchange for some sort of say in how the money is procured and spent.
Farewell, Federalism . . . we hardly knew ye
Copyright © 2010 by The Atlantic Monthly Group. All rights reserved.
But Megan, time inconsistency worked just fine for amnesty to illegal immigrants, so why shouldn't it work in other areas? When Reagan gave illegal residents amnesty in 1986, some people thought that this would lead to more illegal immigration, but supporters of the amnesty explained that it wouldn't, because we were announcing that this was one time only and we would never do it again. Oddly, illegal immigration increased after that.... That just shows that we need to say it louder next time.
Don't you think the implicit guarantee is already priced into the Muni market? I'm pretty sure that state muni's don't offer high returns once tax-exempt status is figured in.
I think you miss the lesson from Lehman brothers: The reason why the government bails out firms that are too big to fail, is that it's in their best interests to do so. If you *don't* bail out a firm that's too big to fail in the name of moral hazard, you're just being stupid in hopes of sending a signal, and the market won't find that signal credible.
If an organization is truly too big to fail, there is no way to break off the implicit guarantee. Instead, we have to just regulate the entity to ensure moral hazard.
David,
Why couldn't the folk theorem kick in here? (I mean, in principle -- I'm not implying voters or politicians are sufficiently patient.) I mean, "too big to fail" seems like it might be a tautology here.
"Don't you think the implicit guarantee is already priced into the Muni market? I'm pretty sure that state muni's don't offer high returns once tax-exempt status is figured in."
If there were an implicit federal guarantee on munis, their yields (for triple-A, G.O. bonds) wouldn't be higher than Treasury yields, on average. If memory serves, before the current credit crisis/recession, muni yields tended to be lower than Treasury yields, because of both the perceived safety of munis and their tax free income. That perceived safety has taken some hits recently, as investors realize how overextended state budgets are, and have less confidence in ratings agencies and monoline insurance companies.
It's too bad California didn't get to this point with a Republican in the White House. A Republican president might have demanded that California open up some of its plentiful offshore oil fields to drilling as a condition of lending California the money. California could issue revenue bonds backed by the royalties from those fields, and sell them to the federal government.
The implicit guarantee on Agency debt back when Fannie and Freddie were still real companies, was much more, uh, explicit, than any implied federal guarantee on munis but Agency debt still had higher yields even after taxes (or so I thought).
Yields on agency debt weren't triple tax free; munis had lower nominal yields than Treasuries partly because their tax-free status made their taxable equivalent yields higher than Treasuries. See the Bloomberg link I provided above, which gives you an idea of current taxable equivalent yields at the 28% bracket (bearing in mind that these yields would be even higher for those with higher effective tax rates).
Dave, that makes too much sense. It could never happen.
What are you talking about? I haven't heard anyone calling for munis to be bailed out by the Feds.
You really need to start linking to the things you're responding to.
Well, there's this.
Cities want a government-run IAMBA to be a Fannie and Freddie for muni bonds and muni bond insurance, to subsidize them. Barney Frank says it's a great idea, one that he's already suggested them.
They want a bailout or government-backed insurance since some of the insurers ran into problems.
They should call it NAMBLA: North American Municipal Bond Lovers' Association.
Don't tell me, you haven't heard about California's little problem?
I've heard of California's problem, but this is the only place where I've seen someone saying that California's debt was going to be assumed by the Feds, with no quid pro quo whatsoever.
Well, of course there will be quid pro quo. The state has to promise to protect the ruling party's specialist interest groups. For example - in exchange for the check the Feds are sending California, the state can't cut a program crawling with corruption because the Service Employees International Union collects huge fees from the workers employed in this corrupt program.
Yep, that quid pro quo will make everything better.
I'm seeing the same things that Megan is, and I don't see a slow decline or a happy ending. This seems like it is rapidly heading to an ugly conclusing that definitely involves inflation, and possibly civil unrest.
What happens if a state "fails?" Who doesn't get paid, and what does that mean? Does unemployment stop? Medicaid? Welfare?
What happens if the feds "bail it out?" Megan's description is apt: suddenly every state in the union knows that there is no limit.
China *will* stop lending to us, as will everyone else. The only out *will be* monetizing debt.
I believe that this is Obama's plan, to the degree that he has a plan, because it affects everyone and in his deeply ignorant mind he thinks that this makes it fair. Remember, we have a College Instructor who couldn't get a tenure-track job leading this parade to penury. He's never led anything of consequence before this - he's on "OJT" with a marxist education. He can't find people to work for him in Treasury, 8 months after he was elected (and a lot longer than when he should have been making lists).
Megan's other posts aren't non-sequiters. It all points in the same direction: Chauncey has the wheel and we can't get off the bus.
I don't see this ending slowly. I see it accelerating. NY and NJ and several other states are almost as bad as CA. The Fed is already buying debt. The last Treasury auction wasn't good.
Good thing there's not a pattern here. Everyone go back to watching Idol...
"Remember, we have a College Instructor who couldn't get a tenure-track job leading this parade to penury."
I didn't vote for Obama, and I disagree with most of his current policies, but I'm pretty sure that Obama could have gotten a tenure track position at the University of Chicago had he not had higher ambitions.
Dave,
I agree that Rob's comment should be considered hyperbole. However, to have qualified for tenure at the University of Chicago (or anywhere else), Obama would have had to do something he's never done before: Write scholarly articles. Even as editor of the law review, he didn't demonstrate a willingness to produce the type of scholarly work expected of a (future) law professor. I've no reason to doubt that Obama could have done this if, as you said, he hadn't had higher ambitions. He is accounted a good writer -- at least when the topic is himself. He went to a top tier law school and, by all accounts, acquitted himself well there. Still, it's an open question whether he ever would have made the grade as a law professor.
Also, the fact someone might have been able to successfully pursue a particular career does not automatically grant them the skill and experience they would have obtained had they pursued that option. Rob's larger point was that Obama had not done anything before assuming the Presidency that would have equipped him for running large sections of our economy. Sure, I could have been a truck driver. I had the eyesight and reflexes such that I might have been a decent race car driver. The fact I never pursued either opportunity would give you ample reason to refuse to allow me to try and back a cement truck into your backyard. Had I been driving a cement truck for the last 20 years, maybe you shouldn't have any concern that I might damage your house or property by backing the truck into your yard. The fact that I don't have that experience -- even though I have the native skills that would have allowed me to obtain the experience -- should be a cause for concern.
So, too, with Obama. His lack of experience running anything that had to make a profit should be of great concern to us right now. He's trying to do what no President has ever done before -- remake an entire industry -- and he doesn't have a clue how the business world works. It doesn't matter that he could have been a titan of industry had he pursued that option. All his experience is in using the power of government and public opinion to coerce businesses to do that which they otherwise would not do. He seems to be a true believer. By coercing business "to do what they should be doing anyway", he was doing God's own work. He doesn't seem to understand business people might have had a reason -- other than mere greed and malice -- for not "doing the right thing". So, his prescription for the economy is entirely understandable and predictable: Much more coercion. In some bright future, once we've all learned to do the right thing on our own, I'm sure Obama would endorse removing the rules and mandates that force us to do what we should have been doing all along.
David,
Thank you for the reply, and you are precisely correct re: my major point.
I would like to amplify a few things:
Obama isn't trying to remake an entire industry; it appears as if he is trying to remake an entire economy. He has openly stated that he wants "Wall Street" - a term that can be viewed many ways - to have far less influence than it does now. Thus, he effectively controls it.
He now owns the largest auto manufacturer in the United States, de facto controls the smallest of the "big three," and has just forced a hideous burden on the only quasi-independent one.
He is girding his loins to change - or destroy - the fossil fuel industry.
Ditto Health Care.
And, as you say, he has no experience in any of these industries. He is not even an economist. He has not written about any of them.
Regardless of what he could have been, in the event his whole life's work has been focused on attaining political - and ONLY political - power. Think about other world leaders throughout history with similar resumes.
People who aspire to economic or industrial power by coming "through the ranks" are often great leaders. They collect experience and learn wisdom. Those born to *political* power or, worse, who have it handed to them simply because of how they look/talk/strut - they tend to be disasters.
Most "cults of personality" fall into that category, and it ain't pretty.
People forget just how fragile Democracy is. People don't know how close we came to falling apart in 1863. Or how other absolutely "civilized" nations have fallen apart just in the last 100 years or so.
The presumption that how things are is how they will always be has been a fatal one for many cultures that pre-date us.
This is devolving very quickly, regardless of how little press it gets.
All of Barack Obama's "experience" comes out of Chicago. And not just any Chicago, but the post Richard J. Daley Chicago, the so called reform period of Chicago, and the present Richard M. Daley Chicago. The power structure that Barack Obama studied and then taught to others is based around fascism. A partnership between elected officials that cannot sustain their seats without concessions to labor unions whose members are largely employed in the public sector which is financed by taxes levied on private enterprise and its free market driven workforce.
Barack Obama's teaching position at the University of Chicago Law School didn't exist until he arrived there. The Law School created his position.
http://is.gd/oxFg
Heck, if Glenn Reynolds and that clown at Cornell who worries about Grey Poupon made the grade as law professors, there's simply no doubt that President Obama would have made the grade.
"He went to a top tier law school and, by all accounts, acquitted himself well there."
Has he released his college records?
"Simply no doubt", eh? Well, that's the difference between worship and analysis. Those of us who aren't of the worshipful bent have noticed the guy has never written an academic paper, and he hasn't released his grades. We (and here I would include the worshippers, not doubt to their chagrin) have no idea what kind of student Obama was, and we have no idea what the quality of his scholarship might be.
It's true Reynolds hasn't written two autobiographies, but he has written, you know, the sorts of scholarly law articles you'd expect a law professor to write. You do realize there is a difference between academic legal writing and blog posts? I'm guessing you have far too little knowledge to analyze academic legal writing.
"We (and here I would include the worshippers, not doubt to their chagrin) have no idea what kind of student Obama was, and we have no idea what the quality of his scholarship might be."
For what it is worth, I know a few of his HLS classmates. They say Obama was identified among the 500+ students in his cohort as a star. If true (people tend to magnify such people in retrospect..."We all knew little John would be great someday"), that is no small thing, given the crowd at HLS.
I did vote for Obama, I agree with most (but not all) of his policies, and perhaps most important to this discussion, I graduated from the University of Chicago Law School when he taught there. Obama could have had a tenure track job in a second if he wanted it -- both because the Law School really liked him, and because that's what happens when you are Editor-in-Chief of the Harvard Law Review. The lack of a federal appellate clerkship would be a knock in certain circumstances, but probably not to Obama because it was so blatantly obvious that could have gotten probably any one he wanted but chose not to clerk.
He would have had to publish to make tenure, but frankly, I don't see that as a problem. He writes really well (or at least he did in the mid-90s), and that's about 80% of the battle when it comes to getting stuff published.
Do we have one law review article authored by Barack Obama as a Harvard Law Student or as a University of Chicago Constitutional Law Instructor?
His adept critical analyses are of himself.
Brennan--
Harvard Law Review student articles are anonymous. That said, Obama is generally credited with authoring the following Case Note: http://taxprof.typepad.com/taxprof_blog/files/obama_case_comment.pdf. I believe that he has acknowledged authorship, though I could be wrong (it could have been his campaign or his office that did so).
His title at the U of C was senior lecturer. He was referred to as "professor" in class (I didn't have him, but many of my friends did) -- and this was the late 90s, so well before he was a political celebrity.
In any event, as the spouse of an academic, I can tell you that it is rare (though not unheard of) for non-tenure-track faculty to publish. It's not profitable, it takes a lot of time, and if there is no need to (like there is for tenure-track faculty), then why do it?
Rob,
Brainstorm what you think will happen. I'm interested and few are willing to describe the nuts and bolts of a state going broke.
Here's my thinking. An organization is "broke" when it doesn't make payroll. Whoever doesn't get paid, doesn't show up for work on Monday. More accurately, they show up at a different place that will pay them. Police will quickly hire out to neighborhoods and organizations that have money. If they cannot get hired, they will confiscate the assets of their organization and sell them on the grey market. Glocks, shotguns, ammunition and vests will be available and, because of the reduced police force, desired by a larger market.
Doctors go unpaid for longer and begin to take cash for procedures. Rates are reduced.
People begin to ignore the rules and regulations of society. New behavior patterns are established. After a time, these behaviors become codified as law. Life seems "normal" again.
Zoot,
Interesting take on things. I fear, however, that we are forgetting the enormous number of people who are "living on the economic edge" today. History tells us that these people don't normally stay home and quietly starve until the new status quo settles out.
Rome used Bread and Circuses very effectively for a long time, but Rome did it through an almost endless series of conquests. The bread that Roman peasants ate came from the treasure that Roman Legions could pillage. That's not really an option for the USA, for dozens of reasons.
What we are seeing now can only be called bizarre. Upside-down, even.
Historically, it's the have-nots have that are the ones to initiate action against the haves. We have seen this in the French Revolution, the Russian Revolution, the Spanish Civil War, Castro's Cuban Revolution, etc. It's the norm.
And it's what Obama is trying to do, sans violence.
What scares me is that the haves are armed to the teeth. I haven't seen Megan post anything here, but just google the term "ammunition" in google's News section and see what comes up. It's not the "proletariat" that's arming itself - it's the bourgeoise.
We've just seen the haves in California tell the have-nots, "not another dime."
And I think it's fair to say they mean it, and aren't going to back down...
"The bread that Roman peasants ate came from the treasure that Roman Legions could pillage."
I thought it was African grain shipments.
Obama has already solved the moral hazard problem. Accept a bailout, and your pay and work conditions are set by congressional publicity seekers.
Did you see how fast Ford backtracked from needing a loan? Can you guess how many corporations suddenly realized that they could struggle through without a bailout?
Providing this principle is extended to the states I see no great spending spree developing.
"Obama has already solved the moral hazard problem. Accept a bailout, and your pay and work conditions are set by congressional publicity seekers."
Congressional publicity seekers are unlikely to limit themselves to setting the pay and work conditions only of firms that have voluntarily taken funds. By 'solving' one moral hazard problem, he's created another far, far bigger one. He's made it acceptable for congressional publicity seekers (as well as his own administration) to micro-manage anything, at any time. Their every whim or political expediency now has the full force of government behind it.
Cannot the state just float additional bonds for as long as it can continue to find buyers?
The President is the hidden hand in every aspect of the Muni, City, State, and the Federal economy right now. The only problem is everyone can see it. This makes players seated at the same table collect their capital and stand up. Why risk anything if the other players also seated at the table are all backed by the US Treasury.
A bankrupt CA would have a hard time convincing anyone to lend it money under anything other than onerous terms. I'm not sure that CA's "full faith" is worth much, and I don't believe the Federal Gov't can underwrite state debt instruments.
Even if they could, the time is fast coming when people will start to ask for price-indexing in their bonds, much like Government I-Bonds, as well as a very high nominal interest rate. Thus the "onerous terms."
As much as Obama, Clinton, and Bush (and so many others) feel that you can lend people money that they can't afford to pay back, the whole world outside of Europe disagrees with this - and exploits our stupidity.
And what of Europa?
As conservatives and libertarians have pointed out again and again and again: Europe is a Social Experiment gone horribly wrong. The real world doesn't work the way Europe is operating, and Europe will soon cease to exist in its current form. Italy has, perhaps, 15 years before it becomes a Muslim nation. Russia probably less. Greece, Belgium, and Spain perhaps five years more. France, on the outside, has 25 years.
These trends are irrefutable and basically irreversible at this point.
For us to emulate Europe's nanny-state socialism is suicidal to the nation, if you are talking about the USA as a Federal Republic. That is not hyperbole.
There's no need for the federal government to bail out California. The state (and it's cities and counties) has plenty of assets it can sell to raise the cash needed to make good on its debt. The government has millions of acres park lands, it owns millions of square feet of prime office space, it has millions of parking spaces, and it has acres of warehouse and storage space. Selling some of the parkland (particularly along the beach) would not only generate cash from the sale, it would add the land to the tax base. Selling the office, parking, warehouse, and storage facilities would provide an immediate cash infusion, but it might entail higher costs in the future to the extent those facilities need to be leased back for state use.
Until the state has taken these steps, I'd be unwilling to consider a federal bailout. Of course, no one in Washington D.C. has been calling for my opinion...
I agree with this, except that selling stuff like that at the bottom of a deep real estate-led recession will only get you pennies on the dollar.
Rich,
You're correct, this isn't the best time for California to try and sell its real estate assets. However, it has other assets, such as its offshore petroleum fields, that it could sell or lease.
Even if this were a good real estate market, the state will have difficulty in realizing full value. Any buyer would understand that California "needs" to sell. Even in an auction situation, the fact the seller is forced to sell tends to lower the price the winning bidder pays. Worse, any bidder would need to evaluate the risk of doing business with the government. What would prevent the state from imposing, post sale, onerous limitations on your ability to build on that nice beach front property? Sure, you could negotiate development rights into the sales agreement, but in a post-Chrysler world, what worth is a contract? After a few years of legal battles, what would prevent the state from using its eminent domain power to reacquire the land for use as a park? The state might even use the controversy over whether or not you can build on the property to argue for a condemnation price that's less than what you paid for the property. Every bidder for California's assets would need to understand the risk a buyer might be doing nothing more than making an interest-free loan (or worse) to the government.
And you can't sell things twice.
If CA can't get it's house in order without selling things, it's the same as being in Chapter 7...
Not quite the same thing as Chapter 7 or Chapter 11. Many a farmer has had to sell a few acres to pay debts after a bad year or two, and yet the farmer has gone on to profitability. Sure, a farmer can't do this very often.
California is asset rich. It could easily sell enough assets to buy the time to get its fiscal house in order. The problem is I doubt the government would use the time to set things in order. Instead, it would continue spending at it's current rate and hope growth of the economy would allow tax revenues to catch up to spending. In the mean time, the state would keep selling off property.
What Obama and his advisors understand -- and apparently no one else in the world does -- is that growth is completely exogenous to any policy decisions they make. The U.S. will continue to grow and create wealth no matter what they do. So while it looks like they are fundamentally changing the way the U.S. works and you might worry that this will generate all sorts of problems, economic and otherwise, you are just being silly.
The new organization of society will have the Federal Government controlling everything with its copious tax revenues. And, again, we can be sure those revenues will be copious because economic growth is completely unrelated to anything the government does. Let every state bloat their bureaucracy beyond all imagining and fund it with repeated federal bailouts, let every industry drive themselves into the ground and then have the federal government take it over in the name of the workers, let short-sighted foreign bond-holders flee from our debt, it's all completely irrelevant.
Because our national prosperity is some kind of magial creation that apparently falls from heaven, so making everything the responsibility of the federal government will only have the beneficial effect of letting nice, well-meaning people divy up the goods in a way that's better for everyone. And if you can't see that, you are stupid and probably racist.
After all, everyone knows that well-meaning people with good intentions only ever have positive effects on the world!
There's a fine line between sarcasm and terror. Your first two lines had me firmly in the latter...
;)
The executive of any state and even of the United States should have the indisputable power to choose what to not spend money on if the intended spending by congress or the people through referendum exceeds available funds. It would be a limited form of Impoundment.
Budgets are too important to trust to politicians these days. Maybe we can come up with a way to get some outside sets of eyes looking at spending. Honestly- the people we have in power just take it for granted that every department will automatically grow at twice the rate of inflation year by year. Somebody outside of government might look at things like that and get out the ol' red pen.
Heh. Someone ran for vice president on that very basis a few months ago.
Derek
Well, back in the 1990s, we all knew that if we threw buckets of money at CMU grads who had a hazy business plan, nothing could go wrong, and we'd all get all get something for nothing.
That was a bubble, and it was stupid. And while we didn't know better at the time, we sure did know better in retrospect, so it didn't really count as getting suckered. We certainly weren't EVER going to let it happen again!
So, in 2000, we discovered that the bubble was stupid. But then we all realized that if we just threw buckets of money at real estate with only a hazy notion of a business plan, nothing could go wrong, and we'd all get something for nothing.
Of course, we know now that that was a bubble. But since we do know it now, it didn't really count as getting suckered. Because we're smart people here. We know what bubbles look like: They involve McMansions! We certainly aren't EVER going to let that happen again!
Now, of course, we've gotten over all that stuff. The bubble is over. The other bubble, I mean. That one's over, too. So now we've finally grown up, and soberly come to the realization that the only responsible, sane way for us all to have nothing go wrong and get something for nothing, is to throw buckets of money at the federal government and let them run everything, with only a hazy notion of a business plan.
Thank God we came to our senses.
Thank God that Texas has a requirement that the legislature pass balanced budgets and that they can't borrow money. Oh, and that they only meet every other year.
We keep talking about what debt instuments are worth and the moral hazard of forgiving debts. World wide, financial institutions, government at all levels and the citizenry in general have been spending the money they expect to get rather than the money they have at an accelerating rate for at least forty years. The dot com bubble, the telecom bubble, the energy bubble and the housing bubble wern't causes, they were symptoms. They were the fantasies we used to keep consuming beyond production. The 800 pound gorilla in the room is the value of currency, not the currency value of debts. We, institutionaly and individually, can not produce enough to generate the revenue to pay off the debts already incurred. All debt, not just California or Citibank debt, is "worth" something significantly less than face value because it was all predicated on "growth" when actual production was declining.
Yup. An across the board write down of a portion of principal might not be a bad idea. Probably a lot cheaper than what we're doing too.
Bailing out California is like paying off a compulsive gambler's credit cards on the promise he won't run them up again. California has an unsustainable state government. Unless you plan to have the rest of the country subsidize them in perpetuity, you might as well have them take their medicine now. California is going to go bankrupt. There is no avoiding it. We can do it one of two ways. We can either sink billions into the state avoiding the inevitable until finally the rest of the country revolts and California goes into bankruptcy. Or, we can save those billions and let California go bankrupt now. Doing it now would have the added bonus of making credit harder for other deadbeat states like New York to get.
In the same way a drug addict has to hit rock bottom and face jail before they reform, California must go bankrupt and get to a point where it can't borrow or tax a penny more. If it doesn't get there, it won't reform. Either California goes broke now or the whole country goes broke later.
I find it interesting that New York is considered a deadbeat state when it is one of the largest donor states taking in far less federal taxes dollars than it pays out. (http://www.taxfoundation.org/UserFiles/Image/Blog/ftsbs-large.jpg) Same for California for that matter. I would like to see the ire go the way of the states that take in more than they pay - or at least have them own up to the fact that they do and then say thank once and a while - MIssissippi, Alaska, Alabama etc I'm speaking of you! Maybe if California and New York kept the $0.21 on the dollar that they never see again they could resolve their budget crises.
So while California, NY, Mass and other generous states get bashed for being generous with their social programs and other expenditures, southern states suck the tit of the federal government without shame and have the audacity to lord over the rest of the country that they are low tax, low spending states. I can only imagine what misery would occur in Mississippi if they didn't receive such federal infusions (http://andrewsullivan.theatlantic.com/the_daily_dish/2009/05/the-very-uneven-states-of-america.html).
I find it hard to lament the disappearance of federalism as Megan sighs, as what we have developed over the years just lets the dog bite the hand that feeds him on the federal level of rhetoric (rich states getting knocked continually by poor states). If California is to let go bankrupt (as I think they should because they are systemically screwed up), then I also think we take a hard look at how some states take so much from other states. I would love to see the free-riding states buckle under the weight of the loss of federal subsidy. Gov. Sanford might appreciate the federal dollars he receives a little more if they disappeared altogether (or maybe he wouldn't because I suspect he doesn't care about the quality of life of his citizens rather orthodoxy).
I'll have to remember the next time that I'm driving through the south that I'm from a dead beat state (New York) even though they have roads built with my state's contributing tax dollars.
permanentstudent,
Can you give me the numbers you're talking about with Highway funding, ag subsidies and tranportation spending netted out? Unless your position is that NY doesn't receive food or products created out of state and trucked/flown/shipped in.
I did just a little bit of research on transportation funding. From the "Budget of the United States Government: State-by-State Tables Fiscal Year 2009" found at http://www.gpoaccess.gov/usbudget/fy09/bis.html under Table 8-34. Highway Planning and Construction. I added to the table population figures from the 2008 Census estimates and found on a per capita basis:
California receives $78.52 per person (the lowest of 51)
New York receives $83.62 per person (the 2nd lowest 51)
while
Mississippi receives $211.69 per person (8th of 51)
Alabama receives $210.61 per person (15th of 51)*
The highest state is Alaska at $599.71 per person (I'll give them a rugged geography to contend with). *I stuck with these two because I was opining about the south in my original post.
Further, from the National Conference of State Legislatures http://www.ncsl.org/print/transportation/item014233.pdf, Alabama had 40.7% of all its highway spending funded by the federal government. Mississippi came in at 32.5%, while California was at 22.5% and New York at 22.2%.
So as not get tripped up on the "but you get transit dollars" argument here is the figure with that data plus the highway dollars and airport improvement dollars - just to be sure (tables 33 and 35):
California receives $164.81 per person (lowest of 51)
New York receives $174.00 per person (2nd lowest of 51)
while
Mississippi receives $435.27 per person (9 of 51)
Alabama receives $341.91 per person (14 of 51)
By your logic that because New York has products shipped into the state this would somehow explain or justify the disparity in transportation dollars being spent. I entirely doubt that that Alabama or Mississippi some how produce so much more or for that matter has a much greater need to move its citizens around so much more as to explain their outsized federal dollars for transportation. The states higher than Miss and Alabama are mostly states with much lower population densities to account for - Wyoming, Alaska, North Dakota. To connect those dots costs big bucks I understand.
Also, to partially rebut your point about agricultural products being imported into New York, so be it, but what about California. They have an enormous agricultural sector, yet they still don't have some outsized federal outlay on transport spending to move those agricultural products out of state - say maybe to New York. Further, even in the states whose entire economies subsist off of agriculture we don't see such enormous disparities between federal taxes paid and then received back. Kansas gets $1.12 for every dollar paid, Nebraska is $1.07, Iowa is $1.11. I certainly understand some disparity as the Tax Foundation article I originally referred to for these statistics point out that there will always be disparities. But the disparities do not have to be so glaringly in favor of some states over others in my opinion.
But overall - my original point is still that it is unfair to call New York or California a deadbeat state when it pays out so much more in federal taxes than it receives back. I have no problem being a Northeast liberal who's portion of their taxes goes to another state, as another commenter alluded to. I just want some recognition for the states that pay their fair share. Further, I think it would be fair to recognize the federal influx of money into those states allow their economies to exist. As an example, If it wasn't for Northeast liberals vis a vis FDR, the Tennessee Valley would've looked been without affordable electricity for a hell of a lot longer. The economic prospects of the Tennessee Valley were pretty dim and after the TVA and then the Interstate Highway system the economy was able to compete with the rest of the United States.
You've yet to prove this point - we have the tax foundation map / article, we need to remove the TOTAL transportation funding, agriculture funding, social security benefits, military spending and federal land expenses (parks, rangers, Forest Service, wetlands, marine services) from those numbers and then do the comparisons.
It's possible you can't compile these numbers, but until they are done, you have a conclusion awaiting a premise.
So if twenty miles of Interstate highway is rebuilt in Georgia (population 9.9m), and twenty miles of highway is rebuilt in New York (population 19.5m), and a simple-per capita division shows Georgia getting twice as much money for highway funds, does New York benefit less from interstate trucking when a shipment of Flordia oranges passes through Georgia with no contribution to the local economy beyond a fuel stop and a latrine flush?
If you want to stop federal pork spending, feel free. The Southern states would not buckle under without the federal subsisdy. That is just an idiotic myth northeast liberals tell themselves. Beyond that, whose fault is it that liberals are taxes so much? It is not like the South has been screaming for higher taxes. For the last 8 years all I have heard is how it is patriotic to pay taxes and anyone who wants to lower taxes is just greedy and treasonous. I would think those in the blue states would get up every day and be happy and proud that they pay so much in federal taxes.
Of course the South isn't screaming for higher taxes, they're already sucking our tax dollars away. I would think people in the South would get up every day and be ashamed at the inability to support their own states without federal aid.
In fairness to Alaska, at least, it should be noted the state would gladly give up its share of the federal largess in exchange for the ability to manage its own resources free from federal interference. It should also be noted that federal government owns more than 90% of Alaska's land area and that much of the "federal money pouring into" the state is in the form of salaries paid to federal employees and for the repair an maintenance of federal roads that the feds need to cross federal lands. On a per capita basis, Alaska receives "more than its fair share" of federal revenue. On a per acre basis, Alaska's at the bottom of those receiving federal money.
As for the other states you mentioned, each has large military installations that account for much of what the "states receive" from the federal government. California and New York also have large military bases, but the proportion of the population that serves in the military (or works on the military bases in a civilian capacity) is much higher in Alabama and Mississippi than it is in California and New York. Since the states have little control over how large its military bases are, it's unfair to slam them for "sucking at the federal teat".
This is a common argument from the left (I made it myself back when I was a liberal atheist), but it does not hold up to scrutiny. The effect is a direct result of progressive income taxes and a welfare state. Are you going to flatten the tax structure or dismantle the welfare state? If the answer to those questions is 'no' then you have to live with the fact that wealthier states will be net donors.
The total money spent on states is scewed by the miltiary. The military bases have to be somewhere. They as a general rule need to be in places where the military has the space to break things and make a lot of noise. Also, because of the civil war, a lot of military bases tend to be in the south. Since southern states have smaller population, the total impact per person of a large military base in say Georgia or North Carolina is greater than it is in California or New York.
As far as taxes go, as someone pointed out above, the larger share of the tax burden borne by blue states is entirely the result of the progressive tax structure. If northeastern and California liberals don't like their federal tax burden, they have no one but themselves to blame.
Lots of that federal money comes from Social Security checks written to people who worked (and paid taxes) in the Northeast and California, then retired to the South or Southwest, where the cost of living was lower. Really, you should credit Social Security (and Medicare, etc) payments to the states where those people worked, not where they live now.
With all the hyperbole, rant and snark I am coming to the conclusion that in order for people to take the consequences of how we've been living for the last 30 years seriously we need to implode, suffer, and then re-group. Only then will be able to have a discussion about priorities. With the way our political, economic and other leaders are pushing us I think we'll be at that point sooner rather than later. That is true for both parties on all levels of the government, imho.
Historically, it's the have-nots have that are the ones to initiate action against the haves. We have seen this in the French Revolution, the Russian Revolution, the Spanish Civil War, Castro's Cuban Revolution, etc. It's the norm.
But oddly enough, not in the American Revolution, arguably the world's only really successful armed rebellion.
just google the term "ammunition" in google's News section and see what comes up.
Or try to buy ammo in any popular caliber at a reasonable price.
But frankly, I'm not worried. Very few people want to pledge their lives, fortunes, and sacred honor for anything, much less overthrowing an up-until-now highly successful system.
IF we have to bail out California, the obvious punishment is a loss of statehood. These people are clearly incapable of ruling themselves and must return to federal territorial status. Their members of Congress must return to California (bua-bai). They will have to return to the California territory - perhaps has a low-level functionary. Also no electoral votes, though with the promise of them, I'm sure the national parties will work overtime to "fix" California.
That is an interesting proposal...
The proposed 2009-2010 budget was $198 billion from which $28 billion must be cut to get to $177 billion.
In the dark and evil days of 2004-2005 the budget was $159.7 billion. Using a 3% inflation adjustment that about $179 billion today.
It is true that almost all public authorities in the USA have piles of illiquid assets. Their problem is shortage of liquid cash. The question is who will lend to the states and the municipalities on the strength of these assets at what per cent of the valuation that is carried on the books? The answer is likely to be, as for toxic bank debt, some combination of the federal government and private finance.
Paying off the debts will be a process of choosing locally between paying taxes and selling assets many of which will not be really surplus to requirements. It will be politically very uncomfortable: which is why longer sighted politicians will want to share with the other party the initial credit for getting state and local governments out of trouble.
I haven't commented, being uninformed about CA's budget problems. Every state has budget problems right now, we're in a recession. And if CA is "too big to fail," then ME and VT and ND are likely too small to succeed.
But I do have to say the paranoid whining here stinks. After reading this crap, I'm sure Obama's got some subtle scheme to put every state into indentured servitude. I volunteer RobM1981 as a test subject.
CA seems to have some serious political issues; and it seems to have lived during the Bush years the way everyone else did: borrow today on what you hope you'll make tomorrow.
Maybe CA could fill it's budget gap by fining all those employers hiring its hoards of illegal aliens. Would that work? Maybe it could start taxing pot, since it's the state's largest cash crop. Or maybe it could put a lien on its governor's film royalties. Each of those things is a sensible as the whining Obama's a marxist/socialist/couldn't get tenure stupidity spouting from some of you. Get your heads out of your paranoia and offer something useful.
In fairness, the end-of-the-world-as-[insert partisan]-knows-it claptrap is the same crap conservatives got to hear from liberals for the past eight years, with only the hierarchy of the sacred cows shuffled around, so it does have a certain poetry to it.
Besides, try to look at the bright side: Thanks to the miracle of modern communications infrastructure, even folks in the darkest corner of Montana can contribute to the dialog.
Yes, but both 9/11 and the economic 9/11 happened on the conservative watch. . .
The difference is that from day 1, Bush only listened to the partisans that elected him. I might think I'd like it if Obama only listened to liberals, but he doesn't, and he hasn't adopted many of the policies liberals would like him to adopt.
Poetry aside, there's a difference, and I'm certain, despite our political differences, even you can see that.
I seriously doubt Obama has better than a 110 IQ and has never actually engaged with anyone who didn't buy into mainline radical left thinking. I mean where would he have met these people? Columbia? Suburban Chicago? Working with Bill Ayers. Obama has never run a business. Never been in the private sector. He has no idea how economies work. His ignorance of the subject of economics is painfully obvious. He just doesn't know much. That is forgiveable. What is not forgiveable is that he doesn't even know how incompetant he actually is. He thinks he is fabulous. I believe unconscious incompetance would be the proper term.
Yes, but both 9/11 and the economic 9/11 happened on the conservative watch. . .
What does it mean when something 'happens' on someones watch?
(besides being a cliche')
Are you suggesting conservatives somehow caused 9/11 to happen?
Allowed it to happen?
Could have prevented it?
Just wondering...
he hasn't adopted many of the policies liberals would like him to adopt
Umm... which ones? Gulags for Republicans?
Speaking for myself (disclaimer: my 2008 vote went for Bob Barr which surely meant exactly zilch here in TX) I can only say that Obama has lived up to the direst predictions that I offered to my friends pre-election, and then some. The budget deficits of the now-projected magnitude I couldn't even dream of. Neither could I imagine the Chrysler bailout.
Yes, there's a difference, and there's a similarity. Interestingly enough, the biggest similarity between the Bush presidency and Obama presidency is in uncontrollable spending. The biggest difference is in the scale of the spending.
Oh dear. Where to start?
I mean where would he have met these people? Columbia? Suburban Chicago?
The University of Chicago (including its Law School) is hardly known as a bastion "mainline radical left thinking." I believe the proprietor of this blog can vouch for this -- she is, after all, a U of C MBA. Obama could have met people such as Richard Epstein, Dick Posner, Frank Easterbrook or any number of conservative intellectuals when he was teaching at, well, the same institution as them. Also, the University of Chicago is well within the Chicago city limits.
Obama has never run a business. Never been in the private sector.
He worked for the decidedly "private sector" Business International Corporation in between college and law school. He practiced law for a private firm from 1993-2002 (essentially full time from 1993-1996).
He has no idea how economies work. His ignorance of the subject of economics is painfully obvious.
Perhaps someone with an international relations degree from Columbia can graduate with "no idea how economies work." I doubt it, though.
Here's a tip for the future: When you engage in a diatribe about ignorant someone is, you may want to check your facts before posting. It kind of makes you look silly when there are that many inaccuracies.
So far, Obama has governed like the reincarnation of Bush, but with a Chicago-Style twist and a plain lack of administrative experience. It shows with each new proposal or administrative decision he makes, which are basically Bushian but with a greater reliance on magical thinking and larger power grabs for Democratic special interest groups.
Many of the charges made against his leadership are blinkeringly obvious: We are nearly a human gestation period into the worst economic crisis of modern times, which as you noted arrived before Obama took the election and oath, and for which he therefore had plenty of advance warning. Yet one of the key agencies in Obama's policy response, the US Treasury, is running on something less than a skeleton crew.
So yeah, I see a difference, but not a meaningful one.
Joe,
Three whole years as a line attorney, working himself up to... oh, yeah... not partner or anything.
Ten+ years as an instructor.
Community activist.
What other tickets are there to punch?
Yeah, this guy was ready to lead the largest economy in the history of the world, for sure.
Incidentally, I've been a Lecturer and an Instructor several times in my life. If you believe that Instructors and Lecturers have the same cache and access to the "intellectual elite" as even Tenure-Track profs do, you've never worked in academia.
Instructors are mercenaries; professors are "ring knockers." There are few fields of endeavour where the lines are so clearly drawn - even when the position is created for you.
Political connections will earn you respect from the Administration, but not from the tenured - and certainly not from people holding chairs, etc.
Joe,
RobM said it as well as I can. You are either dellusional or lying if you think Obama's experience in the privace sector, or the government sector for that matter, amounts to anything. The man has never managed anything in his life yet thinks he is capable of managing the entire world. It is unfortunate he is going to get a four year education in hubris at the expense of the country.
To build on Joe's reply to JohnCK - the economic school of thought known as the Chicago school is notoriously conservative. So as Joe was indicating Chicago's influence on Obama may have been less leftist radical than you think.
Rob--
My wife is a tenure-track professor, and I'm a graduate of the University of Chicago Law School. I'm quite aware of what "cache and access to the 'intellectual elite'" various degrees of tenure, tenure-track and non-tenure-track university faculty and staff have. With respect to Obama, he was originally hired because the U of C was intrigued by his credentials. It's not usual for the EIC of the Harvard Law Review to step off of the feeder judge-Supreme Court clerk-USAO or elite law firm-professor route. By the late 90s, they liked having a politician -- especially one with strong community ties -- as a pseudo-permanent faculty member. He was sort of the politician equivalent of Posner or Easterbrook or Wood -- judges who taught regular classes. (I am in no way saying that Obama is remotely in the intellectual league of any of those, by the way.)
Rob and John--
I never said nor implied that Obama's private experience was substantial or prepared him for anything. I was merely pointing out that many of John's assertions (that Obama had never worked in private industry in any capacity, that he would not be exposed to moderate or conservative points of view at the University of Chicago [this still makes me chuckle a little], that the University of Chicago is in suburban Chicago) are outright falsehoods.
Joe,
Fascinating...
And although I know quite a bit about the UChicago School of Economics (be still my beating heart), I didn't presume that the libertarian valhalla there was also to be found in any other school. I've seen enough cases where different schools within a given university have very different views of the world.
Based on what you say here, it seems as if UCh Law was one of those situations.
It's not federalism we'd say goodbye to; that's been dead since the 60's anyway. It's solvency, for all or us. Once we start bailing out broke states, and I don't for a minute doubt that we will, we're on the hook not only for the trillions of federal deficits we're running up but for everything state legislators can think of to buy for their voters. Next step, Zimbabwe. Or at least Weimar.
Willard v Filburn was 1942. Federalism has been on life support for a long, long time.
permanentstudent,
Yes, in a broad sense at the first level of federal spending, many of the blue states don't get back what they send to the federal treasury (or rather, their citizens don't get back what they send to the federal treasury)- but whose fault is that? It is a direct result of progressive taxation and progressive spending, and is going to get worse with the coming increases in taxes on the upper income brackets, of whom a very disproportionate fraction live in heavily Democratic states. It is like me berating someone because I handed them wallet voluntarily when they didn't even ask for it.
I'm fairly certain Iowan corn farmers have been asking for it.
Only because the money is already in Washington for the taking.
Turn it around- would the rural red areas of the US be agitating for higher, progressive taxes just to get ag subsidies?
In those exact words? Probably not, but their revealed preference counts for something.
What revealed preference?
Their revealed preference to not be a loser in the federal handout lottery as long as it's being played? I don't have much knowledge in economics, but I'm not sure Iowa senators (and their supporters) excelling at a game with rules set by other people reveals any preference of Iowan corn farmers.
If that is what it took to get them, I bet they would. And the farmer's bizarre self-righteous indignation in demanding it would not shock anyone who had been paying attention previously.
The difference is that from day 1, Bush only listened to the partisans that elected him.
Those damn conservative partisans with their NCLB and Medicare Part D and their immigration "reform" and their sucking up to Ted Kennedy.
Oddly, Bush is the one politician about whom I was too cynical; I thought "compassionate conservatism" was claptrap to fool the masses (Like Kerry "supporting" the 2nd Amendment, or Obama "opposing" gay marriage, or Pelosi being "shocked" by "torture") but it turns out that he meant it, damn him.
"You're either with us or you're with the terrorists."
Rob, it's likely I had my phone calls overseas tapped while reporting for an international trade magazine. I wrote about the Celtic Tiger, negotiating the varying legal complexities for bio-tech companies in Europe, how to find biz leads in Mexico, simple stuff for small companies looking to enter the global markets. That these calls were potentially listened to repulses every fiber of my American spirit. I'm still waiting on the FOIA I filled to see if I'm included in the data taps, but I'm guessing I'll never find out.
So while Bush may have supported a few liberals causes (and I'd call NCLB a failure, Prescription Drug benefit a payday to big pharma,) I have a lot of trouble seeing the benefits of any partisan compromise from those years. And I see tremendous damage to freedom as a result of those years, starting with the Patriot Act (as poorly named as "No Child Left Behind," "Clear Skies," and countless other marketing phrases likely written by Frank Luntz.)
And yes, I'm aware many liberals voted for the Patriot Act; I wouldn't mind seeing those who did lose their seats in Congress.
That these calls were potentially listened to repulses every fiber of my American spirit.
And yet, contract breaking doesn't. Hyperinflationary spending doesn't. Government-mandated "volunteering" for schoolchildren doesn't.
Let me tell you one thing: strong crypto is inexpensive these days. Even if the tall tales of the quantum computers are true -- what I know about the state of things there tells me otherwise, but I've been wrong before -- NSA would have to really REALLY want to read your emails or listen to your audio to overcome your desire for privacy. On the other hand, Glock and Remington are a mighty poor protection from the IRS's collection arm. So I can't but marvel at your priorities.
Yes, I'd rather no one read my email except the recipient. But on the scale of things I am worried about, this one rates right there with Godzilla.
The feeling that I do not share the same objective reality with some people keeps growing stronger...
"Rob, it's likely I had my phone calls overseas tapped while reporting for an international trade magazine. I wrote about the Celtic Tiger, negotiating the varying legal complexities for bio-tech companies in Europe, how to find biz leads in Mexico, simple stuff for small companies looking to enter the global markets. That these calls were potentially listened to repulses every fiber of my American spirit. I'm still waiting on the FOIA I filled to see if I'm included in the data taps, but I'm guessing I'll never find out."
What eveidence do you have that they were other than paranoia? You were a reporter writing on trade deals. So what? You and about 100 other people were doing the same thing. What makes you think anyone would care enough to listen to your calls?
People like you amaze me. You spend your time worrying that the CIA is tapping your phone. But then you don't have a problem with Obama or other liberals telling you what kind of food you can eat or what kind of car you can drive. Obama has launched a full scale assault on your economic liberties and you greet it with a shrug. But the the one in a million chance some NSA guy might have listened to a phone call you made from Mexico once "repulses every fiber of my American spirit." You can't make up people like you. I sometimes think our entire society has gone insane.
Actually, AIG and major American finance companies launched the economic assault on my life.
I'd hadn't heard anyone dictating what kind of food I can eat, or what kind of car I can drive.
I opted to live in a place where I could walk to the grocery store, post office, etc., so I drive very little. But I'm awfully glad we're raising fuel standards to comply with the standards nations like China already have.
And people like you amaze me, because you make me think our entire society has gone insane. Fact is, you make me certain that part of it has. Requiring a daily does of liberal bashing is certainly a sign of insanity; keep doing the same thing, expecting a different result. (Hint: it's not working, there's no permanent Republican majority in sight.)
Yes, yes - make life more expensive and deadly for other people so I can feel better about myself. Even though the prospects of this having any impact on Global Climate Change are slim to none.
That is quite the sentiment.
"Actually, AIG and major American finance companies launched the economic assault on my life."
No, Bill Clinton and Barney Frank started it.
"But I'm awfully glad we're raising fuel standards to comply with the standards nations like China already have."
Have you been to China? You surely aren't, with a straight face, pretending that any meaningful standards are being enforced there in terms of fuel efficiency, emissions, safety or anything else, are you? Or are you suggesting that we follow the lead of other dysfunctional economies and pass all kinds of lofty things on paper, with no intention of actually enforcing any of them? You want us to give up the rule of law just so we can brag to other countries that our laws, on paper, are greatly superior to theirs? What could you possibly have meant by pretending that China, of all countries, is some sort of standard that we should look towards?
As has been noted elsewhere, the Patriot Act was largely a legal codification of existing policies and procedures the US government was already using, not some novel power grab by the Bush administration. At worst, he did you a favor by disabusing your previous ignorance of these policies. You can hope for change from the Obama administration, but given that his direction on the Close Guantanamo! sentiment is to add "and indefinitely detain on US soil instead" behind his hand...
"Amendment, or Obama "opposing" gay marriage, or Pelosi being "shocked" by "torture") but it turns out that he meant it, damn him."
Absolutely he did. Bush is a bible reading do gooder. He actually cared about the less fortuenate much to his and our regret. Obama in contrast, knows how to play the suckers.
Just expel California from the Union. That'll bring some of the rest into line.
James Carville famously said 'He wanted to come back as the bond market.' So 'what will the bond market think?'
Rob, it's likely I had my phone calls overseas tapped while reporting for an international trade magazine.
Define "likely." OK, it's possible. But we'd have to assume the people doing the tapping were idiots.
That these calls were potentially listened to repulses every fiber of my American spirit.
Your spirit needs to get a grip. Seriously. Your credit card and bank records, your internet usage, and your personal phone records tell more about you than any transcripts of journalism-related phone calls. All of those things are available to any domestic law-enforcement agency or private litigant without a search warrant; they just need to drum up a subpoena. It turns out that banks and telecoms don't spend a lot of money fighting to quash subpoenas; they make it by selling your info.
I'll take liberals seriously on privacy when they stop publishing the names of concealed carry permit holders, which, unlike mostly hypothetical wiretapping, actually affects real people.
Yes, whole-hearted agreement, here on privacy.
But I'm pretty paranoid about privacy issues, having written some of the early computer systems for welfare fraud detection. (There was, by the way, far less fraud than there were predictions of fraud.) Even back in the early 1980's, I could see that computer records and privacy were on a collision course -- and this was before there was an internet to speed up matters.)
I worry about medical records, bank records, etc. And there's an astonishing rate of error in most of the data.
But that hypothetical wire tapping did matter in my case because I also reported on government contracting in Iraq. Thinking that it doesn't is no different than thinking publishing concealed weapons permits don't matter.
Are you ripping on fuel standards, still?
Why don't you google China, 2004, and fuel standards?
Or do you maybe own a hummer dealership?
Still? Where did I do it before?
I'm not sure what that has to do with anything, since we don't live in China
And there's the personal attack...
Seriously, higher fuel standards will be expensive to engineer, add cost to each vehicle sold, and increase traffic fatalities. It will result in some fuel savings, but some portion of that will be eating back by increased travel, and the turnover on cars in means the 2016+ cars won't be a majority of those on the road until sometime after 2020-2025. At that time, the savings we've made stand to be eaten up by the industrialization of China and India.
My point stands, you proudly stated you were glad the government was making other people's lives worse for nothing more than your own personal satisfaction.
google the terms I gave you. China adopted tough fuel standards in 2004. They'll increase again in a few years. The US won't be able to sell cars in China without stricter standards.
And I think you started with the personal attacks.
You don't know jack about what I do or think for personal satisfaction, you entire take on me is premised on your notions of liberals; and they're ill-informed at best.
Just so you know, I think global warming is a serious issue that the US has demonstrated a serious unwillingness to tackle, much to my shame. And I also believe there's tremendous economic advantage to be gained in new technology. And while re-engineering will be expensive, it also offers opportunity for tremendous gain, both economically and environmentally.
I also can't help notice that our vehicle safety standards reflect the types of vehicles Detroit found it profitable to sell. Ever wonder if there's any connection? (And I'll blame the dems if there is.)
I've enough of a libertarian bent to my disposition to think that maybe people would drive better if they didn't think their vehicles were foolproof.
My personal satisfaction has nothing to do with this. My concern about the world my grandchildren will see, about mass extinctions, about some poor rice farmer in Indonesia has everything to do with this. But I'm able to think beyond my own needs. Are you?
I made no personal attacks - look at the statement I quoted - you admitted to being glad we were raising CAFE standards but that you "drive very little."
To me that sounds like you are supporting making an activity you do little of both more expensive and more deadly. And you were glad we were doing it.
Now, why would you be glad they are doing this? The only conceivable answer would be Global Climate Change. But that falls on its head because the gains would be a long way out, small (and made smaller by changes in behavior), and dwarfed by Chinese coal plants.
Irrelevant, and welcome to regulatory capture anyway.
irrelevant, and baseless. Note the insurance stats on smaller cars having higher accident rates.
Hey look, the personal attacks are back again...
I don't believe CAFE and Global Climate Change are related, for some reason you do.
China basically created their own version of CAFE, maneuverings of which produced the large SUV revolution in the US. Not too impressed, personally. Meanwhile, here is where China stands on coal-fired power and associated pollution as of 2006:
http://www.nytimes.com/2006/06/11/business/worldbusiness/11chinacoal.html
In 2007:
http://news.bbc.co.uk/2/hi/asia-pacific/6769743.stm
In 2008 and 2009, efforts toward cleaner and more efficient units, but still a massive build-out of coal-fired infrastructure:
http://www.visitchn.com/2009/05/china-outpaces-us-in-cleaner-coal-fired-plants.html
This, for a country that still hasn't industrialized over half of its population, and clearly intends to do so. Which is exactly why fuel-efficiency standards in the US are an absolutely useless response if the question at hand is global climate change.
But that hypothetical wire tapping did matter in my case because I also reported on government contracting in Iraq. Thinking that it doesn't is no different than thinking publishing concealed weapons permits don't matter.
Oh, I think the reporting on contracting matters a great deal, and I don't support wiretapping people doing it. But in that case, the risk was never to you, personally, it was to the people you were talking to.
I think SCOTUS has really screwed up on the "privacy" question, though.
"Of course the South isn't screaming for higher taxes, they're already sucking our tax dollars away. I would think people in the South would get up every day and be ashamed at the inability to support their own states without federal aid."
Zic,
You can't complain about the differences in federal largesse to states without addressing the fact that much of this is a product of progressive taxation and is simply a transfer of money from wealthier people to poorer people. What's the difference between your final sentence and the statement "I would think poor people would get up every day and be ashamed at their inability to support themselves without relying on the government for handouts." I myself don't personally feel and given your liberal sentiments I doubt you do either, but it is a pretty logical extension of your statement.
I was being sarcastic to someone who thinks yelling, "liberals suck," solves problems.
I'm sorry, thank you for calling me on it. I'm short on patience today. The whole Obama marxist/socialist/can't get tenured/wants to take my hummer theme is so last week.
Wells Fargo received $25 Billion in TARP money.
Doesn't anyone see something strange here at some level that the amount of money that we gave to a single bank in order to protect the bondholders is more (>$21B) than the amount that would devastate a state?
In the california case, we see $21B as a real quantity. An incredible amount of money that equals firefighters, teachers, 40000 prisoners, police, health services for a state of tens of millions. over $1000 per household.
This is less than what we gave as taxpayers to the shareholders and bondholders of a single bank.
We gave $16B to general motors. One company. Literally burned it in two quarters.
We gave $675B more to other banks. $22B assigned to insurance companies.
Spare me the talk of moral hazard. We decided long ago in this crisis that moral hazard wasn't important. $21B for California would be the first Bailout for the broad welfare of 30 million people instead of money shoveled out the back door as billions in bonuses for hundreds or at most thousands of already wealthy people. Argue with this, please.
We decided long ago in this crisis that moral hazard wasn't important
Clarify that "we", please.
If Wells Fargo is looking at pretty much endless deficits at this point, would anyone still support giving it $25 billion? I wouldn't. California should, like Wells Fargo or Chrysler, be explaining with a great deal of detail how next year, that state will need zero help from the federal government. I suspect, without looking it up, that California cannot do that.
Therefore, we might as well get started with the pain right now, rather than tossing $21 billion to the drunk gambler so he can lose that too.
Why aren't all these arguments against California (and I get it, california IS a basket case, and most of y'all don't live in california), why is this anger against california directed against single banks?
or against figures (the trillions, literally hundreds of times the 21B amount) that the federal government has spent backstopping financial instruments??
There are hundreds of billions of dollars of guarantees on bank debt. Over a trillion in debt that the federal reserve has purchased outright.
There is reason to believe TARP is a temporary cushion for the bank which was given to prevent systemic failure. California is not a private institution that can go away; we're more likely to be repaid by panhandlers. California not spending what it can't afford not represent a systemic risk.
This seems like one of the obvious arguments against those earlier bailouts. Having bailed out a bunch of completely unsympathetic industries (high finance and the big 3), how do we turn away anyone else more sympathetic? (And how do you get less sympathetic than investment bankers?)
Michael:
Has anyone tried to work out what the likely effects of a California state government bankruptcy would be? I have this mental picture of huge economic problems in California (from widespread layoffs of public employees, big cuts in programs, suspension of most maintenance and building for the forseeable future, etc.), which would presumably be at least as great as the fallout from letting the big three go under.
I don't see a good option here. Bailing them out in any form will basically let them keep behaving in a fundamentally crazy way. Not bailing them out will have scary systemic consequences and will cause a great deal of near- and medium-term pain. And the kicker is that for various political reasons, it will probably be impossible to refuse to bail them out sooner or later. This looks uncomfortably like all the other bailouts we've been doing. I don't know where it ends, but probably nowhere good.
Indiana went into bankruptcy in the 19th century. Part of the outcome is that deficit financing is prohibited by the state constitution. Investment banking involves people who feel they are growing the economy they have an ownership stake in. Such growth provides help for others or it wouldn't continue to exist. Megan said the other day that 'only a rich person can afford two women and 6 kids.' I'd rather have the bankers affording them than someone who has lied to how many women and has 23 children as a friend whose children were undoubtedly supported by welfare does.
Budgets are too important to trust to politicians these days. Maybe we can come up with a way to get some outside sets of eyes looking at spending. Honestly- the people we have in power just take it for granted that every department will automatically grow at twice the rate of inflation year by year. Somebody outside of government might look at things like that and get out the ol' red pen.
This is precisely why we need term limits for all--Congress and federal bureaucrats alike. We need people with actual experience in the productive class who can come in and lend their talents to running a better government for a short time before returning to the productive class again. (And ideally, government should never be an entry-level job for anyone; you should have to gain your productivity--and be prepared to demonstrate proof of same--in the private sector first, so that you'll actually know how to Do Something before starting your short term in government.)