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stimulus

Necessary quotation marks

by Jacob Grier on August 1, 2009

Necessary quotation marks

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Denied again

by Jacob Grier on April 10, 2009

It took them two months to get back to me, but I finally got a response to my letter asking for stimulus money to open a crappy vodka bar from Senator Ron Wyden’s office. Just like Earl Blumenauer, Wyden completely ignores the substance of my arguments to launch into some standard chatter about the economy. He stresses that he does not “take spending $787 billion of taxpayer dollars lightly.” Whew, that’s a relief! I’m glad to know the burden of spending other people’s money weighs so heavily on his shoulders.

I’m still waiting to hear from Jeff Merkley. Don’t let me down, Jeff! You’re my last hope for making Crazy Jake’s Discount Cocktail Barn a reality.

Full text of the boring letter below the break.
[click to continue…]

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Seen and unseen

by Jacob Grier on March 3, 2009

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, - at the risk of a small present evil.

Frederic Bastiat, from “That Which is Seen, and That Which is Not Seen,” more relevant than ever.

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A reply!

by Jacob Grier on February 24, 2009

I admit I felt a very slight pang of guilt when I sent that letter to my congressmen proposing sending me stimulus money to invest in my terrible bar idea. That’s because the letter would never actually get to the politicians. I knew it was going to be some poor overworked aide who’d have to read my letter, figure out if I’m being earnest or not, and send me a reply. I didn’t feel too guilty, obviously, because if you sign up to work in Congress I figure you deserve all the BS that gets thrown at you. But still, some of them are genuinely nice people, despite what one might conclude after to going to a few happy hours on Capitol Hill.

One of those nice people was visiting Portland this weekend, so I asked her what she’d do if she’d received my letter. She said she’d get annoyed at having to waste time on me and fire off some boilerplate jibber jabber about the stimulus bill. Whoever works in Representative Earl Blumenauer’s office thinks the same way and replied to me this morning. On the off chance you want to read through the whole thing (not recommended), it’s below the break.
[click to continue…]

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Free money, fr33 agents

by Jacob Grier on February 9, 2009

I’ve been remiss in not linking yet to a couple of new sites from my friends.

First is Stimulus Watch, designed by my Crispy on the Outside co-blogger Jerry Brito. It’s a wiki site that lets citizens track stimulus spending proposals, vote on their importance, and supplement the descriptions with local knowledge. It’s searchable by location so you can find the proposals in your area. Oregon has 159 “shovel-ready” projects in the website, ranging from the plausibly appropriate to a $1.5 million dollar request for resurfacing tennis courts in Eugene.

The second is one of my new favorite blogs, Fr33 Agents by my friends Jason Talley and Tom Pearson. They profile libertarian activists and cover the “this movement like the fan boys and girls that we are.” Their daily updates are a great source for keeping up with grassroots opposition to big government interference in our lives. Go check them out.

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If you’re into food policy you’ve certainly heard by now about the Bush Administration’s last minute decision to slap a punitive 300% tariff on Roquefort cheese. Because it’s, uh, French and stuff. Still, I thought this email from the owner of Cheesetique in Alexandria, VA was worth reprinting (the whole thing’s at Crispy):

I was shocked and awed not by that cavalier attack on our broad free-trade liberties, but by the specific violation featured prominently on the front page (albeit below the fold): little old Roquefort is under attack! That sublime product of lactation, coagulation, and fermentation has always held a special place in my heart, despite its high price tag and limited availability. Not only do I have a particular affection for Roquefort, but so do Cheesetique’s discerning customers, who marvel at its romantic story of creation, rustic approach to production even today, and exclusive availability. Your love of raw milk Roquefort has made it a staple in many of my cheese classes and one of the most popular and consistent sellers at Cheesetique. Since opening our doors more than four years ago, we have never been without Roquefort Papillon (I prefer this brand above others, though we have also carried Carles, which is outstanding). We have sold hundreds of pounds of Roquefort despite its title as the most expensive cheese consistently carried at Cheesetique. [...]

Why do I focus today on this seemingly insignificant example of protectionism at it worst when there are such large-scale issues to consider in our tumultuous time? For that reason exactly. There are so many huge examples of economic policies gone awry, totaling billions and trillions of dollars, and for that very reason, I point out this easily identifiable, but no less extreme violation of the American ways of free choice and trade.

As our own form of culinary protest, Cheesetique will continue to carry Roquefort until it is no longer available, which I assure you, will only be a matter of time. Not only will we continue to carry it, but its price will never exceed that which we pay for it. We encourage those of you that might have shied away from this pricey perfection in the past to come in and pick up a piece of one of the most historically significant and perfectly created foods in the world – at $20.00 per pound. Yes, you read correctly. $20 per pound.

Remember: Protectionism is bad. Roquefort is good. Long live the latter!

It’s a good thing our new cosmopolitan rulers are above such petty anti-foreign sentiment. Oh, wait:

Washington souvenirs worth $100,000 — including images of the Capitol dome and printings of the U.S. Constitution — are locked in storage, blocked from sale in the new U.S. Capitol Visitors Center because the items are made in China.

Rep. Bob Brady, D-Pennsylvania, chairman of the House Administration Committee, said he warned operators of the visitors center not to purchase merchandise made outside the United States, but they did it anyway.

Although the center has the goods in hand, Brady said, “I’m not allowing them to sell those products.”

His Administration Committee oversees operations in the House of Representatives, including the House restaurant, parking facilities and the Capitol Visitors Center. A spokesman for the committee said other House gift shops also are under restrictions on items made outside the United States.

Brady, whose district includes Philadelphia, insists that it’s wrong for tourists to return home with a souvenir from the nation’s capital that bears a “‘Made in China’ sticker.”

And it’s not just the little stuff, either:

The stimulus bill passed by the House last night contains a controversial provision that would mostly bar foreign steel and iron from the infrastructure projects laid out by the $819 billion economic package.

A Senate version, yet to be acted upon, goes further, requiring, with few exceptions, that all stimulus-funded projects use only American-made equipment and goods.

Proponents of expanding the “Buy American” provisions enacted during the Great Depression, including steel and iron manufacturers and labor unions, argue that it is the only way to ensure that the stimulus creates jobs at home and not overseas.

Stimulus advocates are fond of comparing our current situation to the Great Depression. Though the scale of the recession and the trade restrictions are nothing compared to that period yet, the comparison should give them pause. Dan Ikenson writes:

For all practical purposes there is no difference between the Smoot-Hawley tariff bill of 1930 and the “Buy American” provisions in the $819 billion spending bill that passed the House Wednesday.

Smoot-Hawley was the catalyst for a pandemic of tit-for-tat protectionism around the world, which helped deepen and prolong the global depression in the 1930s. “Buy American” provisions will no doubt inspire similar trade barriers abroad and will have the same effect of reducing global trade—and therefore prospects for economic recovery. It is not unreasonable to say that U.S. policymakers are on the verge of taking us down that same disastrous path.

The first acts of Obama’s presidency impressed even skeptics like me, but if we continue down this path McCain’s principled free trade policies are going to be sorely missed.

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No disagreement?

by Jacob Grier on January 28, 2009

Damn. Cato took out full page ads this week in The New York Times, Washington Post, and Roll Call objecting to Obama’s claim that “There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.” The ad is signed by some 200 economists and reads:

With all due respect Mr. President, that is not true.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

On the other hand, Obama’s plan persuaded Cato to inject much-needed revenues into the struggling print journalism industry, so he’s got that going for him.

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No, seriously. This is fiscal stimulus:

Amid a financial crisis that is cutting jobs and eroding growth, there is finally good news for Russians.

The head of the new state alcohol agency — gleefully dubbed the Ministry for Vodka by the press — is advocating cutting taxes on vodka to make the country’s national tipple more accessible, the Izvestia daily reported.

Igor Chuiyan, the former head of state alcohol monopoly Rosspirtprom, has been appointed head of the new federal agency for alcohol market regulation, or Rosalkogol for short.

Without citing its sources, the paper said he advocates slashing the tax on a litre of pure alcohol from the current 190.8 rubles ($A9) to 100 rubles $A4.50).

This would mean that the tax on half litre of vodka would be cut to around 20 rubles from the current rate of 38 rubles, it said.

There’s a health motivation for the tax cut too. The article reports that high taxes have created a large black market in counterfeit vodkas and resulted in dangerously adulterated products.

That’s not a problem here in the US, but there’s a case to be made that the most effective fiscal stimulus would be cuts in our most regressive taxes, like consumption taxes or the FICA/Medicare payroll deductions. Ed Glaeser argues the point here (previously linked on Friday’s sidebar).

[Via TMN.]

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