In economics, religion, and politics, the moral path is freedom.

Quantitative Easing and other performance enhancing drugs

(Cross-post from my other blog, Outrun Change.)

There was a big on-air confessional a while back. Something about bicycles.  Here’s another interview that got overshadowed by that big one. Or perhaps it is an educational cartoon. I’m not sure.

Bernanke to Oprah:  ‘I’ve Been Doping for Years’.

This cartoon gives a superb explanation in 12 minutes of a major factor about how we got into our current economic mess.

The format is an imaginary interview with the chairman of the Federal Reserve Bank, Ben Bernanke, as he confesses to long-term doping of the economy.

[youtube=http://www.youtube.com/watch?feature=player_embedded&v=orh64vypKwU]

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By Jim Ulvog, ago

Here’s a picture of life without evil capitalism – you may not like what you see

What would life be like without those greedy, evil, money-grubbing capitalists trying to make a buck off consumers? Maybe an Edenic paradise flowing with economic equality and abundant consumer products for everyone?

Not quite.

Check out this view of life without the profit motive, meaning no one has an incentive to provide you with anything.  The video is a play on the movie It’s a Wonderful Life, wherein George Bailey gets to see what the world would be like without him. In this movie, our hero gets to see what’s left over when the profit motive disappears.

[youtube=http://www.youtube.com/watch?v=bwH3Xr6uyG0&feature=player_embedded]

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By Jim Ulvog, ago

Movie production credits – crony capitalism that attracts few jobs

Just in time for the Oscars….

Writing in the Wall Street Journal, Glenn Reynolds explains The Hollywood Tax Story They Won’t Tell at the Oscars.

He points out that about $1.5 billion, yes billion, goes to the movie industry as credits, exemptions, grants, and fee waivers to bring movie production to a certain state or city.

With 45 states in the game, all that does is move some amount of spending from one high-bidding place to a higher-bidding place.

The amounts tend to be less than the subsidies: (more…)

By Jim Ulvog, ago

Capital appreciation bonds -– compound the interest on a bond for 20 years before starting to make any payments. How’s that for a wonderfully bad idea?

(Cross-post from my other blog, Outrun Change.)

If you thought zero documentation and 120% loans were good for the economy, you will love capital appreciation bonds.

Here’s the deal – what are schools and local governments in California to do once they have run out of cash to pay even the interest on bonds, can’t cover the principal on the cost of new buildings, and face huge voter resistance to any increase in spending? What to do when you just want to keep spending?

How about issuing capital appreciation bonds. That allows the government agency to keep spending whatever they want.

You can borrow money, make no payments for 20 years, compound the interest into principal, and burden the adult children of current students with the huge payments.

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By Jim Ulvog, ago

Does too big to fail, too big to punish, and too big to manage mean you are too big?

(Cross-post from my other blog, Attestation Update.)

George F. Will suggests the answer to the question is “yes”: When banks get too big to fail, they are too dangerous to leave intact

One of the U.S. senators on the left end of the political spectrum thinks it is time to break up the too-big-to-fail banks.

Look at the concentration of assets in the TBTF range and the long history of TBTF: (more…)

By Jim Ulvog, ago

What economic system has lifted humanity out of the dirt?

That would be capitalism.

I, for one, am thrilled to not live as my great-great-grandparents did. I’m not into subsistence agriculture, loosing half my children in their infancy, or facing a life expectancy of 30 years.

John Mackey has expanded that idea in his book, Conscious Capitalism.

Carpe Diem has a quote from the author in their post, Quotation of the day: Capitalism has lifted humanity out of the dirt and is greatest value creator in history of the world (more…)

By Jim Ulvog, ago