Daily Read 2/2/10

The Economist's leader on bank regulation said "For investors the most dangerous words in the English language are “this time it’s different.” For governments and financial policemen they are “never again.”" Regulators, like Sisyphus, are doomed to fight the last battle, to watch the boulder roll back down the hill the next time there is a crisis. The Economist questions "Can he live up to this promise? Or is it destined to become a YouTube classic, played endlessly in half a decade or so, after another banking implosion?"

Physician, heal thyself! The status of most private companies in the middle of the credit crisis has been resolved, but: "Fifteen months after Fannie and Freddie were effectively nationalized, neither the Obama administration nor Congressional leaders see a quick solution to one of the thorniest problems in American finance: how to fix the twin mortgage giants without choking the flow of credit to homeowners and dealing a blow to a still-fragile housing market." (NY Times)

Thomas Sowell on a possible contributor to higher unemployment rates among young workers in this recession: minimum wage. "The very fact that the government has to impose those wage rates means that workers were unwilling to risk not having a job by refusing to work for less than the wage rate that has been mandated. Now that choice has been taken out of their hands, with the hidden cost in this case being higher unemployment rates." (Real Clear Politics) Maybe Obama should consider a temporary reduction in the minimum wage to spur employment?

The uncertainty theme continues in the clean energy industry. "Wind turbine manufacturers "need more certainty" to add shifts and factories in the United States, said Elizabeth Salerno, director of data and analysis for the wind industry trade group." The $787 billion stimulus bill that needed to be passed in a hurry to create jobs in shovel-ready projects is not creating as many jobs as expected, but don't worry: "Obama's advisors said the biggest clean-energy benefits of the stimulus are still to come." (LA Times)

Installing solar panels can save money in the long run, but homeowners have trouble with the up-front installation cost. Berkeley, California has a program by "which it lends homeowners the money to put panels on their houses. The owners repay the loans over a period of years through an extra charge on their local property-tax bills." (The Economist)

Since Obama promised to freeze some government spending starting next year, his budget this year is "one of the greatest spend-while-you-can documents in American history," according to this WSJ editorial. In addition to lots of new spending, "the White House proposes to convert long-standing "discretionary" spending that requires annual appropriations into permanent entitlement programs," making it harder to cut back spending later. "If Mr. Obama's priorities become law, federal outlays will have grown an astonishing 29% since 2008." They make an attempt to pay for some of this, and the WSJ helpfully highlights selected tax increases found in Obama's budget:



Mark Steyn's editorial in yesterday's Washington Times talks about political consequences for Democrats:

"We don't quit. I don't quit," he said. But throughout the chamber, Democrats were quitting. "I quit," says Rep. Marion Berry of Arkansas, declining to run in November. "I quit," says Sen. Byron Dorgan of North Dakota, doing likewise. "I quit," says Beau Biden of Delaware, son of Vice President Joseph R. Biden Jr., choosing not to run for his father's seat.

The Hill reports today that Durbin and Schumer are preparing to take over if Harry Reid loses his seat: "The second- and third-ranking Senate Democratic leaders are doling out huge sums of cash, laying the groundwork for a leadership race should Senate Majority Leader Harry Reid lose reelection."