Entries for the 'Economics' Category

America is in the midst of the greatest monetary and liquidity crisis since the end of World War II, if not the Depression.  Note that I did not say we are in a recession, or a depression. Recessions and Depressions related directly to economic output.  Our current crisis deals with economic input.  And these are, to quote Thomas Paine, the "times that try mens' souls."

Unfortunately, this crisis is all our own doing.  And our current approach of "creating" liquidity -- in essence, printing cash to inject into the market -- may very well be our own undoing.  Because it is not a free market economy when a nanny-state government is there to cover your six.

George W. Bush, Hank Paulsen, and Ben Bernanke -- along with, well, the entire US Congress -- are starring in a new reality TV show.  I'll call it "That 70s Show".  Despite a strong record of tax cuts during his Presidency, George W. Bush has done his damndest to thrust American back thirty years into stagflation, driven by high inflation, dramatic overspending, horrific energy policies, and eventually... very high interest rates.

One is forced to wonder when W will appear before the American public sporting a sweater, sitting in front of a fire, and talking about mayonaise.. oh wait, I mean malaise.

If you follow anything over at the Club for Growth, you should follow their list of Representatives and Senators who have pledged to swear off earmarks for the remainder of the 109th Congress. Conspicuously absent from the list:  anyone in the Maryland Congressional Delegation.

That's right. The entire delegation -- even the two Republicans (Roscoe Bartlett and Wayne Gilchrest) are MIA on the issue.  Apparently, the Maryland  Congressional Delegation has determined that it is not in the best interests of their constituents to fight to restrain this whorish spending practice.

Contact the members of our delegation now, and encourage them to forswear the use of earmarks in the Federal budgeting process:

Walter E. Williams, one of the most talented and intelligent economists I have ever had the privilege to read, has an extremely compelling column about the hoax that is ethanol.  Williams repeats the basic arguments (and empirical evidence) against President Bush's stupid and short-sighted ethanol policy. 

But I want to address one component of Williams column that deserves further examination:  the overwhelmingly protectionist, if not outright disastrous, tariff on Brazilian ethanol.

Hypocrites live large in the Maryland State House.  O'Guvnah and the Wannabee (that would be Comptroller Peter Franchot) are two of the biggest, most substantial lying sacks of putrifying human flesh in the state.  Liberal lefties like these two -- joined by Man Perm Mike Miller, Mikey "Double Dipping" Busch and their hordes of ignorant sycophants in the General Politburo always tow the "party line" about the evils of companies that outsource jobs to foreign countries.

But what do they say when IT IS THEIR FAULT?

There is a basic rule in microeconomics called the elasticity of price.  As the price increases, demand will decrease.  So it comes as no surprise to a sane human being not suffering from craniorectal inversion that increasing the tax on cigarettes by $1 a pack would cause a decrease in sales.

The Baltimore Business Journal covers this man-bites-dog story here, featuring Maryland Line's own "Fill Er Up" convenience store, hippie joint and gas station.

Of course, the incredible irony here is that increased cigarette taxes were part of the plan to cover more uninsured Marylanders -- especially the children.  Now, because of declining sales, that money will not be available.

Whoops.

But that is not the worst part.  A lot of those stores -- primarily convenience stores -- depend up on cigarette and tobacco sales to drive sales of other higher-margin products like soda, milk, snacks, etc.  Guess what?  If people aren't coming in for their Marlboros, they also aren't coming in for the other stuff.  That means the state takes two other big hits.

Sales tax and corporate tax.

You think that $300 million decline in tax revenue over 16 months was big, wait until the trickle down effect of the cigarette tax works its magic.

Doesn't anyone in Annapolis study economics anymore?  You can't get blood from a stone, even a Blarney Stone.

But fear not.  I will continue to smoke my cigars -- the only item I still purchase in Maryland -- for the children.

By now, I am sure you have heard about the Federal Reserve bailout of Bear Stearns (in collaboration with the assistance of JP Morgan) that occurred this morning.

But do you know why this all started?  It's simple.  Ed Hale's 1st Mariner Bank made and egregious number of BAD loans out of its fianance unit, which it had sold to investment houses on Wall Street.  The majority of these loans were sold to Bear Stearns.  And that vast majority of these ALT-A loans originated out of 1st Mariner's Northern Viriginia offices, an operation (since closed) that is now under investigation by the FBI for conspiracy to commit fraud, fraud, and theft.  The number of bad loans generated in the Northern Viriginia operation might top 70%.

It should be noted that the fraud was being committed without the knowledge of 1st Mariner Bank Executive Leadership.

Ed Hale, chairman of 1st Mariner Bancorp, owner of the Baltimore Blast, and builder of the 1st Mariner Tower as head of Canton Crossing, LLC, is getting sued left and right over construction of the tower, according to this article in the Baltimore Business Journal.

The Baltimore Business Journal is reporting today that PSC Chief Steve Larsen charged Constellation Energy with misleading "ratepayers" in the costs to decommission the nuclear power plant at Calvert Cliffs.

Two points I want to address.

First, the "ratepayers" were misled.  You don't say?  Where in the hell have you been?

Second, define "ratepayers".

The news for Ed Hale, Chairman at 1st Mariner Bank continues to get worse as time goes on.  You might remember that Ed Hale was a big supporter of O'Guvnah's 2006 Campaign, when he basically turned his bank properties into MASSIVE advertising billboards for O'Guvnah and his Lefty Dem downticket campaigns.

The result of this massive endorsement was the loss of a number bank customers totalling a couple million in deposits.  In addition, employee contributions to the 1st Mariner PAC (Political Action Committee) collapsed. Turns out that Ed's employees are a LOT smarter than he is.

A lot smarter...