Failure of Salina: Don't test the Markets

A salinas car company was being subsidized by the city of Salinas, periodically giving batches of taxpayer money equivalent consistently over $100,000. Mike Ryan, the President and Co-Founder has said that the money is all gone and that the company has lost its investors. In other words, the project in making some fo the most eco friendly cars completely failed. Though the likes of Ryan should be applauded by tackling this problem head on, it should be no surprise that the real loser in this experiment was the tax payer.

The markets appear to not have convinced the investors that this new eco friendly car would be as prosperous as they thought. The foolhardy investments of the city clearly demonstrates that the city does not know what is best for its inhabitants and that instead they should be given the opportunity to invest where they think is proper instead of letting city officials do what they want without bearing any consequences. If this is not a clear example of the broken window fallacy in practice, i have no idea what is. To backtrack, this philosophical tenet basically states that despite the fact that a job is created when a window is destroyed thus employing someone, it does not validate the action of breaking the window because wealth was destroyed and even more wealth is needed to restore it instead of being used elsewhere where which society can continually benefit. In this case, the city used up money that could have been used in creating more jobs in a dangerous recession. Unfortunately, that particualr money and opportunity is lost to history.

Crony DC Medallion System

According to Reason TV, D.C. is considering establishing a Medallion system in its taxi business in order to reduce corruption. The D.C taxi businesses that benefit are the ones with close political ties to the legislature. The losers in this decision are the cabbies that do not meet the requirements to receive a medallion in the first place.

Reportly, only 4,000 medallions will be given out, and the cabbies that meet the requirements will have priority access to the aforementioned medallions. The eligibility standards are primarily based on whose been driving in DC the longest. This measure is highly anti free market. The livelihood of thousands of immigrants will turn into ashes all for the sake of the few cabbies to have more profits? excuse me, not even the cabbies will reap the majority of the profits; the owners of the vehicles and the companies themselves will take home the majority of the profits.

This is a classic example of an oligopoly. That is to say that only a few companies remain in the system AND it makes it more difficult for other cabbies to enter the system due to the high costs of doing so. in this case, you are only protecting the interests of the few and ignoring those of the majority.

Of course there may be corruption, of which the only complaints i have heard of was manipulation of rates in relation to the zones already in place in the city. To counter this argument, one could point out that more access to the information highlighting the specific rates in the city could ultimately avoid such scenarios.

All in all, politicians and big business cab companies are getting there way and it is a sad thing to watch innocent cab drivers being driven out of a business which one could argue could in fact pave the way for future economic opportunities for these low tier owners.

QE and the road to nowhere

Greenspan has recently noted that besides weaking the value of the dollar which in turn helped the expansion of imports, there really has'nt been any revolutionary consequences from the influx of money into the market. He even goes as far as to say that QE3 would not do any good but weaken the dollar.

What is QE? Basically QE is priming of more dollars into the market by the federal Reserve. The Economist Thomas Sowell in the last couple of months has noted that getting credit is extremely easy and banks are basically hording the green in their reserves, so one might ask why we are essentially still in a recession? The main answer to that question is that the environment to do buisiness has not imporved. Government is still borrowing more than it can be hold accountable and regulations keep making their in bills enacted by politicians who believe that government has the duty to keep a more vigilant eye in the affairs of buisiness. These regulations also include artificial rises in health costs due to mandates, zone laws, restrictions on permit uses, rising costs in some states through taxes due to their obligations to balance the budget, and recless spending projects which only bring about short term growth and political points.

Though Allen Greenspan is to blame for lowering the interest rates at the begginign og the decade, it was the policies that went hand in hand with these adjustments that cumalited ultimatelty in the housing crisis of 08. Now politicians are afraid of losing their seats in power and influence if they don't look like they are doing anything. In many cases, politicians doing something is exactly what continues to hurt the economy even more.

The late Senator Robert Byrd was a champion for stimulating the economy of West Virignia by engaging in audacious road projects. Over the last several years, people have began to critize his highway contruction projects precisely because they lead to nowhere. Lanes upon extra lanes were made in the name to bring more business to the state, however it became simply a project to appease his voting base by promising over 20 million in subsidies over the last 40 years to continue financing such projects. If Byrd was able to get away with this scandal, how well is the rest of our taxpayer money being spent over the country. This is just one state mind you.

By continueing involvement of this adminstration into the economy and elaborating on Quantitative Easing, Washington is indeed paving a road for America, however, this road leads to nowhere.

Commander in Flip Flop

President Obama spoke today, addresing the pressing needs in cutting down the deficit. What at first comes as a suprise later ends in dissapointment when Obama states that he will not raise any taxes but that there is a need to "tackle spending in the tax code...". Hint, he means we have to close loopholes.

America has a serious and possibly detrimental issue on its hands concerning our outstanding debt, however, Obama keeps comming back, looking for more to take out of the pockets of the American people's pockets, instead of looking for solutions that will help our society rebound and become the leader of economic growth.

Obama is very committed in making sure that the middle class does not get trashed in the process of extreme reform over medicaid and medicare... but has he, as president, come up with any realistic plans in tackling these issues? Of course not, and as a result he will continually crank up on the rhetoric against the rich, the very lifeblood of this country, so he can appease the demands that are required of a populist leader, in chief.

Thomas Sowell once famously said that the very first principle in economics that is learned is that there is a limited amount of resources. In politics, the very first thing that is taught is to ignore the prior lesson in economics. What will happen when the resources collected today become nothing more than artifacts of the past that have no sense of real value?

Passport Fraud or faulty law system

According to "NewsforJAx.com", a navy veteran by the name Elisha Dawkins has been arrested on the account of passport fraud. At first glance, just the phrase "passport fraud" might seem sufficient to suspect that there is some illegal activity going on consisting of possible narcotics trafficking and the like. The tragedy of the situation is instead a mistake on the part of the veteran, the likes of which should never have taken place in the beginning.

We have become, for better or for worse, a nation that prosecutes whomever might break the law, giving the offender the highest punishment without any consideration of his actual predicament. To put it bluntly, the law was used not to carefully scrutinize the damage incurred in the so called "fraud" but instead used to prosecute the "fraud" committed for the sake of the law in the place of justice.

If Justice was implemented, the courts and other related authorities would have noticed that what occurred was not some evil intent, but simply human error. Instead you have characters in roles such as prosecutors and judges obeying the law for the law's sake but not for the sake of justice. One example that comes to mind is a pothead serving the same time as a rapist... Of course there actions were against the law, but does that make their exact same sentence just for the sake of the pothead?

Not too long ago, I knew someone who committed reckless driving. The judge noticed this individuals record and saw no prior crimes committed, and dropped the infraction from reckless to speeding, just a hair below reckless. This kid got off the hook once for his inexperience and naivete of the recklessness of his actions, however, if her were to commit the same infraction again, justice will catch up with him.

All in all, reason and justice must accompany the law, not for the sake of the law, but for society's sake.

The Baldwin Doctrine

Alec Baldwin has recently testified that Obama is not flourishing as a President because of a lack in spending. As a result, Alec Baldwin is a blue as they come. The rhetoric of spending and its importance in a vibrant economy is something we were all told but that doesn't stand the test of time. Baldwin might be referencing the expansion of our defence spending by Bush, Great Society under Johnson, or even the national highways with Eisenhower which has all earned them their appropriate places in history, for better or for worse. What Alec fails to see, and so do many others, is that spending only cures short term problems. In the long term, however, it does more harm than any good. Only the good things that come from government expansion are mentioned oh so frequently, leaving the unintended consequences to fall in the background, camouflaged by the short term achievements until reality sets in, if at all.

What most americans to not notice are the successful presidencies that come about those who sit around and do nothing. President Calvin Coolidge is one of those immortal beings that come to mind. Veto after veto, he was able to halt the expansion of the bureaucracy under his term in office with the philosophy that the private sector knew what was best to conduct business as usual. For now we are stuck with the Baldwin Doctrine until the tea party can do anything about it, or else it will be capitol hill as usual.

The Spain Conundrum

President Obama has not been successful in transitioning America towards a sustainable energy policy free of foreign dependence. His alternative, however, is to propel America forward with "Green Jobs". Several times in the past when speaking about green jobs, Obama mentioned Spain and its success with developing alternative energy resources to combat the need of using oil and other similiar types of energy as the only means to power its economy. last year Spain admitted that its campaing was a complete failure.



Despite the evidence, Obama does not see the need to budge from his comfortable alternative energy position. If the President continuos down this path, we might just lose the opportunity to rebound.