Fun Facts About Mortgages
==> Currently the Fed holds about $1.7 trillion in mortgage-backed securities. The ostensible purpose of this massive bond-buying was to prop up the mortgage market, which props up the real estate market, which ultimately provides relief to struggling homeowners who are underwater.
==> The total outstanding mortgage debt on one- to four-family residences is $9.9 trillion. (That’s the smallest breakdown I could quickly find at the Fed’s site.)
==> Using back-of-the-envelope calculations, it seems that for as much money as the Fed has spent on mortgage-backed securities, it could have covered the shortfall (the difference between property value and mortgage debt) for every individual homeowner in America.
==> I’m not saying that would have been a good idea, obviously, and there would be technical problems in how one would implement such a plan. But it makes you wonder how much brainstorming Federal Reserve officials actually did, if they’ve been sleepless since 2008 worrying about beleaguered families and seeing what they actually chose to do with their discretionary powers.
The Interest Rate Fed Pays for Required versus Excess Reserves
I have known since it happened (in fall of 2008) that the Fed began paying interest on excess reserves held by the commercial banks. However, I haven’t seen much discussion about the discrepancy between the rate paid on required versus excess reserves:
This San Fran Fed paper gives the basics on the topic, but does anyone have any other links?
Conservatives Shouldn’t Trust Irwin Stelzer on Carbon Tax
Irwin Stelzer is an establishment figure in conservative circles (he was editor of The Neocon Reader for example). He has been pushing conservatives to embrace a carbon tax, and recently had a piece in The Weekly Standard to that effect. I respond at IER. An excerpt:
As Stelzer himself notes, many of the people clamoring for a carbon tax are not doing so because they are sleepless at 3am, worrying about atmospheric CO2 concentrations. No, many of the most powerful people pushing a carbon tax (and other “green” policies) do so because they have a disposition of favoring central planning over market outcomes. (That’s why, for example, so many of the people who warn about the imminent threats from CO2 emissions also oppose nuclear power, even though it is emission-free.)
Stelzer is right when he considers Krugman’s hypocrisy on these matters;Krugman only pays lip service to the “market solution” of a carbon tax, and has no problem with the EPA acting directly to shut down coal-fired power plants since Krugman thinks it’s obvious that this is the “optimal” outcome.
Yet Krugman’s hypocrisy on this point is hardly a reason to call his bluff, as Stelzer recommends. If the U.S. government were to implement a carbon tax, and if this allowed coal-fired plants to survive, Krugman then would claim that the carbon tax wasn’t high enough, or that it needed to be supplemented by other top-down interventions. He wouldn’t shrug his shoulders and say, “Aww shucks, you wily conservatives got me, I guess coal-fired power plants are good for America after all.”
David R. Henderson Praises Krugman on War; I Am Cynical
Because he’s such a nice guy, David R. Henderson tries to praise Paul Krugman whenever possible. For example, David (a frequent contributor to antiwar.com) recently showered kudos on Krugman’s thoughtful essay on “Why We Fight.”
I realize I should just be glad that Krugman is at least writing a column with which I wholeheartedly agree, but, but, but…
Am I the only who finds it annoying that Krugman alludes to the Middle East aggression of the George W. Bush administration three separate times, and yet mentions Obama zero times? (The U.S. is once again bombing Iraq, remember.) Krugman also laments Putin’s bellicosity in Ukraine, without mentioning possible U.S. involvement.
This is why I adore Glenn Greenwald so much. I agree with people who say he (Greenwald) can be strident, but he actually stuck to his stated principles when officials in the Obama Administration were caught violating civil liberties in ways far worse than what Bush officials had done.
Last thing: David is awesome in the comments of this later post, on “Instapundit” Glenn Reynolds. These fools are lucky they didn’t bet David $500 on the virtue of collateral damage.
Potpourri
==> Rob Bradley in Forbes explains the long evolution of free-trade thought from Adam Smith to…me.
==> I explain that banks can fulfill their two functions even with 100% reserves.
==> I helped with some of the research, but Dan Simmons has a post at IER pushing back against the Administration’s claims about forest fires and climate change. It’s actually pretty interesting even if this isn’t usually your thing.
==> Richard Ebeling blames the Fed for booms and busts.
==> The best thing about this Gene Callahan essay on opium is that the people in the comments are mad that The American Conservative is giving a platform to libertarians.
==> Avens O’Brien has a nice post on how libertarians can win hearts and minds. (BTW, if you are ready to flip out in the comments about the brutalism/humanitarianism thing, you’re barking up the wrong tree. O’Brien’s overall perspective isn’t what such a knee-jerk reaction assumes.) An excerpt:
An excellent example here is the knee jerk reaction of libertarians to the liberal proposal that “we should do something” is immediately equated to a proposal that the government must do something. If a liberal ever says the slightest hint of “but, how will we help the [insert oppressed group here]?” a libertarian instantly assumes that government is the proposed answer (it might be) and rails against that with such fervor that it scares the sh** out of the liberal.
Ironically it’s what causes more people to feel government mustbecause people freely won’t.
When a liberal says, “let’s feed poor children”, they simply want to feed poor children, and they think the state might be a good vessel for that because they think it should happen and who would feed poor children without a benefit to themselves?
Their fear is well-reflected in the libertarian response: “No, you can’t force me to feed poor children.”
Instead of a much more reasonable response of: “Hey, you’re right, there may be hungry poor children out there. Wouldn’t it be nice if you and other people who care about feeding poor children could easily gather together to start an organization that feeds poor children efficiently? That I can donate to willingly? I highly recommend you do that! I know others who have this particular inclination towards feeding poor children. Perhaps I can introduce you.”
If liberals think libertarians may actually help if they weren’t forced to, they might be less compelled to try to force it.
St. Louis Powell Shooting: Police Story versus Video
See how much you guys think the video matches up with how the police initially described the shooting of Powell:
UPDATE: Well, it’s restricted. You can watch the video directly here.
The Problem With the Police Is That It’s Not Just a Few Bad Apples
(Unless we mean “a few” in the way Krugman does when discussing ObamaCare.)
Gene Callahan–author of Economics for Real People and once a frequent co-author with me on libertarian articles–has a new blog post in which he chastises libertarians for their over-the-top denouncement of the police State. Here’s Gene:
I received a phone call today from a cop from one of our major cities. (We know each other only electronically.) He wanted to talk because he was so discouraged about the state of police-civilian relations in the country right now. He has always been honest at his job…, always obeyed the law as if he wasn’t a cop, chastised his men when they would break it, sought to respect the community he was policing… and what’s more, he assures me that most cops are more like him then they are like the jack-booted thugs of libertarian fantasies, a few of whom actually exist…He readily acknowledges “We brought some of this on ourselves.” He wants dirty and violent cops punished.
But he also tells me that the one-sided sensationalizing of every possibly suspicious action on the part of a cop makes things worse. Naturally, if cops feel they will be attacked and smeared even if innocent of any wrong-doing, they will become defensive, and tend to dismiss any criticism of any cop as just more libertarian/leftist hate…
Once again, assertions that excessive police violence is is merely “the essence of the state,” as one poster fatuously put it recently, is a falsehood designed to promote a political agenda: police forces all over the developed world are enormously less violent than the American police. For instance, in 2011, all of the police from the entire nation of Germany, policing 80 million people, only fired 85 bullets while policing. By way of contrast, in one incident resulting from a driver’s failure to stop when ordered to do so, Miami police fired well over one hundred shots, killing their target as well as injuring five bystanders…So in the course of a few minutes the Miami police launched more bullets at a single man than the German police do at 80 million people over the course of a year. If excessive police violence is “the essence of the state,” every other state in the developed world must have had its essence sucked out.
First of all, it’s a bit odd that Gene is trying to convince us we’re being paranoid when worrying about a police state…by pointing to Germany. OK, maybe the German police didn’t behave very violently in 2011, but I’m pretty sure they had a few bad years back in the late 1930s. The “paranoid” libertarian position isn’t that all States at all times are totalitarian nightmares, just that they have the tendency to move in that direction and citizens must take great pains to guard against tyranny. Hayek’s famous book was titled the Road to Serfdom, not the Parking Lot of Serfdom.
But I also challenge Gene’s entire premise. I don’t doubt that his buddy is a decent guy, who would be perfectly fine to have over to your barbeque or even babysit your kids. The problem is that, as a general rule, “good cops” keep their mouths shut even when they observe some of their colleagues breaking the law. If Gene’s buddy is indeed a cop in a major city, he is probably personally aware of several officers taking money from drug dealers, or at the very least can make very educated guesses. Again, I am speculating, but I imagine if Gene had put this particular guy’s full name in his blog post, that the guy would flip out and tell Gene to take it down, for fear of professional reprisal.
When a member of any other profession is accused of wrongdoing, colleagues are willing to pontificate on whether the accused should be considered in the right or wrong. For example, if a historian is accused of plagiarism, it won’t be hard for CNN to line up other historians to defend or “convict” the accused.
In contrast, police who are still on the job almost never come forward and say one of their colleagues was in the wrong. I admit I conducted only a cursory search, but using Google I can only find retired police officers criticizing the actions in Ferguson. Don’t get me wrong, I’m sure that plenty of cops around the country are shocked at what’s happening in Ferguson, and I don’t doubt that they call up their buddies and say so…privately, on the phone, when their comments can’t be used against them. Yet I don’t see hundreds of these outraged police writing letters to the editor or signing petitions, asking their fellow officers in Ferguson to re-think their tactics. (I would love to be corrected in the comments, in which case I’ll update this post.) There’s a reason people coined the term “Blue Wall of Silence.”
Let me give a beautiful illustration of what I mean. Watch the following video:
Note in particular that the CHP spokesman (starting around the 0:20 mark in the video) stresses how the woman was “a danger to herself” because she was walking around on the freeway. So even as he’s telling the press that they need to investigate before rendering a judgment on the officer’s actions, he wants to make sure people realize that this lady could’ve been hurt. (I mean, someone might tackle her and start beating the crap out of her; it’s safer to stay in a vehicle on the California highways.)
Notice also that the second cop runs up and jumps in to restrain the woman. When I worked at a grocery store, if I turned the corner and saw one of my co-workers sitting on top of a grandmother, punching her repeatedly in the face, I’m pretty sure my response would be to restrain him and say, “What the hell are you doing?!”
I recognize that by its very nature, law enforcement places cops in hazardous situations, and it may be hard for outsiders to appreciate the constant state of apprehension. But let’s not kid ourselves that there are a just a few “bad apples” out there, as in any other profession. No, the problem with police forces in the U.S. (I can’t speak for other countries) is that there is virtually no accountability. The rot starts at the top. It’s not because everyone who goes into police work is an awful person, but that the institutional structure produces horrible outcomes.
UPDATE: It’s possible that this particular officer will face “serious charges,” though he was initially put on desk duty and he hasn’t yet been charged. Either way, my point was the initial reaction of the CHP spokesman. He didn’t stand there, his face in shock at seeing one of his colleagues beat up a grandmother lying on the ground, but instead his reaction was to try to minimize the PR damage. Even if he does end up getting charged, the mere fact that it’s an open question shows just how much leeway the police have. They operate under a different law from everyone else.
UPDATE #2: I saw this Twitter picture of a Missouri cop marching with the Ferguson protesters.
The Bigger Threat: The Police State or Looting?
You can guess my answer. Here’s an excerpt, but you should follow the link for my surprise conclusion!
But let’s put aside the specific triggers of riots and looting, and take them as given. It still doesn’t follow that we need a strong State to protect innocent lives. No, as I’ve explained elsewhere (try here and here), a free market economy can provide voluntary police and judicial services far more efficiently and peacefully than a monopoly institution. If only the State would get rid of its gun control laws and allow genuine competition in the “industry” of property protection, then the threats to person and property from looters would be minimized.
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