Seeking to recast himself as a fiscal conservative, Obama is projected to propose a freeze on discretionary spending - NPR, NEA, “green” jobs, “disaster” relief, foreign aid?  Well, perhaps, but before awarding him the 2010 “Wastrel Recovery” prize, consider the various ways government burdens the economy.  Limiting spending and government growth requires a systemic approach.  Consider the rich array of political means: taxes, regulation, guarantees, entitlements, inflation, monetary misallocation, and “discretionary” spending.  Tax cuts have been a conservative nostrum for…

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Uh-oh.  It was speculation yesterday, but reality today - President Obama and the Democrats have the banking industry in their sights with their trigger fingers itching.  It’s their populist response to the “Massachusetts Miracle” election of Republican Scott Brown.  After reviewing the election results and polling numbers, they probably finally realized that “We the People” don’t want a cobbled-together, trillion-dollar health care plan rushed through Congress.  Nor do they want a cap-and-trade bill that will restrict energy use and jack…

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President Obama’s proposal today to bring back 1930s-like separation of commercial and investment banks, dubbed Glass-Steagall II or Glass-Steagall 2.0,  would do little to prevent the problem of financial institutions being too big to fail. What it would do is hurt economic recovery, reduce types  of financing available to businesses big and small and give European and Asian financial services firms a huge competitive advantage over their U.S. counterparts.

The president’s proposed regulation would leave U.S. banks, in the phrasing of…

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Louis Brandeis was a hero of the Progressive Era. One of the central tenets of his philosophy is that when it comes to business, big equals bad. Even if consumers benefit. Doesn’t matter. Big is bad.

This is not an exaggeration. Business historian Thomas McCraw wrote that “a deep-seated antipathy toward bigness clouded his judgment.”*

Then there is Brandeis on consumers: “servile, self-indulgent, indolent, ignorant.” That’s a direct quote, by the way.** It was his justification for wanting to fix prices in…

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The so-called Financial Crisis Responsibility Fee is a tax in search of a target. Today, the President declared, “We want our money back.” Yet his proposed tax on financial institutions with assets of $50 billion or more would be levied on the banks that paid back the bailout money – with interest – and on institutions that may not have even taken TARP funds, while most likely exempting Fannie, Freddie and the car companies that still owe billions upon billions…

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John Berlau, director of CEI’s Center for Investors and Entrepreneurs, offers the following thoughts on what’s missing from the first hearing of the Financial Crisis Inquiry Commission:

“The Financial Crisis Inquiry Commission, established by Congress to look into the causes of the mortgage meltdown, has the opportunity to explore the mistakes of the policy and business worlds and ensure that those mistakes aren’t made again. Unfortunately, the lineup of the commission’s first hearing today indicates that the hearing will be little…

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A federal biofuels program enacted in the name of fighting global warming and reducing dependence on foreign oil is instead killing jobs while perhaps doing more harm than good and costing taxpayers half a billion dollars, reports the Washington Post.

“It sounded like a good idea: Provide…government money to convert wood shavings and plant waste into renewable energy.” But it is now killing jobs by “driving up the price of raw timber, undermining an industry that…used sawdust and wood shavings to make…

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Earlier, the Washington Post reported on how the Obama administration pressured Freddie Mac not to disclose to investors and the SEC the $30 billion in losses it was incurring as a result of Obama’s mortgage bailouts for undeserving (including high-income) borrowers.

Now, Bloomberg News reports that then-Federal Reserve Bank head (and now Treasury Secretary) “Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis,” and to hide…

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The Wall Street Journal notes that the Obama administration has used the federal government’s bailout of mortgage giants Fannie Mae and Freddie Mac to do the exact opposite of what the federal government claimed it would do when it took them over a year ago.  It took them over in the name of winding down their risky loan portfolios, so they would stop running up losses at taxpayer expense.  But the Obama administration is deliberately making them run up huge losses…

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Economists and real estate experts are saying that a $75 billion mortgage bailout program designed by the Obama administration has backfired and harmed the housing market, reports The New York Times:

The Obama administration’s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good. . .experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which…

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In a preview to the 2010 census, Michigan learned this week that it was one of only three states to lose members of its population. Of course, since the state has seen a steady decline in population over the past four years this doesn’t exactly come as a shock.

Michigan lost 32,759 people between July 1, 2008, and July 1, 2009, a decline of 0.3%, while the nation’s population grew 0.9% to 307,006,550. Maine and Rhode Island also lost population.

By the…

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On Christmas Eve, when it hoped no one would notice, the Obama administration lifted the $400-billion limit on bailouts for government-sponsored mortgage giants Fannie Mae and Freddie Mac, and showered their executives with $42 million at taxpayer expense. (Earlier, Freddie Mac’s CFO received $5.5 million).

Under the Bush administration, federal regulators took over Fannie and Freddie in the name of stopping their risky practices. But the Obama administration has increased their purchases of risky mortgages in a vain attempt to inflate the economy.…

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Some of OpenMarket.org’s readers may know that I’m in the middle of earning a Master’s of Journalism here in D.C. I’m concentrating in Broadcast and Online Production, and for those concerned that journalism is dying a slow death, I’m living proof that a new generation of journalists are being bred with the Internet in mind–but that’s another story for another day.

As one of the requirements of a Public Affairs Reporting class, I’ve written a piece on last year’s financial crisis…

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In a display of supreme confidence in the strength of the American economy, the Federal Deposit Insurance Corporation announced a 2010 budget increase of close to 54% earlier this week.  The FDIC’s annual operating budget grew from $2.6 billion in 2009 to $4 billion for 2010.  The largest portion of the increase is devoted to funding takeovers of failed banks.  The 2009 budget allotted $1.3 billion for this purpose, while the new budget devotes $2.5 billion—nearly twice the amount.  Also in…

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Statement of John Berlau, director, Center for Investors and Entrepreneurs, Competitive Enterprise Institute:

President Obama’s twin goals of more bank loans and more heavy-handed regulation are in conflict with each other. Large financial institutions, such as the ones represented at the White House, as well as smaller regional banks and credit unions, may be holding back their lending due to uncertainty—both about the economy and about what Washington is going to do.

The House bill that passed Friday creates a new Consumer…

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Over at RealClearMarkets, I explain why the answer is a resounding no:

Rep. Phil Hare argues that “reckless deregulation” is one of the causes of the current economic crisis. That isn’t actually true. This year’s edition of the Competitive Enterprise Institute’s Ten Thousand Commandments report found that 3,830 new regulations came into effect in 2008 alone.

Over 30,000 total new rules passed during the Bush years. Hardly any were repealed. Businesses currently dole out the equivalent of Canada’s entire 2006 GDP - about…

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The healthcare bill is on the verge of passing the Senate, despite the fact that it has received a failing grade from healthcare experts like the Dean of Harvard Medical School, and the fact that it will increase taxes, deficits, and medical costs, while reducing lifesaving medical innovations.

In a 60-to-39 vote, Senators voted to quash a Republican filibuster, moving it closer to a final vote where it will need the votes of only 51 of the Senate’s 60 Democrats to…

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This morning I read with interest - and amazement - the above headline.  Does our president live in the same world that I inhabit?  He’s worried about America’s increasing indebtedness and is pushing for a massive expansion of health entitlements (aka wealth redistribution programs) and the cap-and-tax global warming initiatives (aka wealth redistribution programs) and a host of other other wealth-destroying regulatory programs. Yet, he’s worried about America’s growing debt?

Our political system is only now perhaps emerging from a foolish…

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Federal affordable-housing mandates were a major factor in the mortgage crisis, fueling the housing bubble and the subsequent collapse of the housing and financial markets, which helped bring down the economy.  Even the liberal Village Voice has admitted that.  Who drafted those awful mandates?  ACORN, reports the Washington Examiner, in “How ACORN Destroyed the Housing Market.”

How did ACORN cause the “housing bubble” and “financial collapse”?  ACORN lobbyists drafted “affordable-housing” mandates to pressure the mortgage giants to buy up more risky loans and mortgages…

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The House is voting today on a bill to improve transparency in the TARP bailout program. TARP is, shall we say, rather opaque. 25 different agencies administer TARP funds. Each one uses different accounting standards. Keeping track of everything is almost impossible.

I wrote an article not too long ago saying that transparency is welcome symptomatic relief. But TARP itself is a disease. The only way to cure the disease of bailout programs is to abolish them. Russ Roberts said much the same…

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