Best of the blogosphere

May 11, 2010

The best bits of the best stuff I have read today:
Larry Kudlow, CNBC, on the European bailout:

And in addition to Western Europe’s failure to enforce real welfare-state reductions, there really is no flat-tax reform — such as adopted in Eastern Europe — to promote growth. Ironically, the countries of Western Europe, including the southern tier of Greece, Spain, Portugal, and Italy, have a lower corporate tax rate than the United States. That is good. But they could build on that with real flat-tax reform, rather than jacking up value-added taxes.

So there are no enforced spending cuts, there is no flat tax, and there is plenty of political upheaval. (Angela Merkel just lost an important regional election.) So right now, on the day after a big relief rally in stock and bond markets, a sober assessment of the so-called rescue package doesn’t look so great. Actually, the real winner looks to be gold, which is up $20 this morning and is almost at its all-time high of $1,226. That’s a sign of no confidence in the European story. The euro currency has been compromised and the European welfare state continues. Not good.

Josh Barro, RealClearMarkets, on California debt problems:

California’s permanent budget crisis stems from institutional failures. Ballot measures have made it nearly impossible to raise taxes or cut spending, and have cemented the idea in voters’ minds that they can get government services without paying for them. The state has repeatedly failed to reform its inefficient tax code (which relies too much on highly volatile taxes on high-income people, and not enough on property taxes) or to tackle the problem of runaway public employee compensation. … The trouble with California is that it has a Mediterranean budget to match its Mediterranean climate. April’s numbers show that rosy tax receipts aren’t likely to improve matters any time soon. Like any Mediterranean EU member, California desperately needs an aggressive fiscal adjustment if it is to remain solvent.

Veronique de Rugy, Reason, on inflation:

The Federal Reserve is unwilling to take the inflationary route today. But investors know that other central banks have done so in the past and that the scenario could happen again. … If these growing deficits aren’t addressed by immediately and dramatically slashing spending—and there’s zero indication that such a shift will happen anytime soon—we are about to embark on the most massive transfer of wealth from younger taxpayers to older ones in American history. It will be not just unprecedented but unfair: Our children will have to pay for the decisions we make today.

Eileen Norcross, NY Post, on Chris Christie and NJ:

The governor is also directly challenging the monopoly hold of the NJEA. He backs a bipartisan bill to create a voucher program for students in the worst-school districts, and he supports the expansion of charter schools. Each reform would expose the teachers unions to competition, bringing down the cost of public schools while releasing students from some of New Jersey’s highest-spending and worst-performing schools. Christie inherited an unenviable budgetary framework, strangled with court-ordered school-spending formulas. He’s responding to voter anger over property taxes, but he knows that capping one source of revenue without capping total state spending only shifts the bill. Most important, he understands that New Jersey doesn’t have a revenue problem — it has a spending problem.


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[…] plenty of this on his blog. James Pethokoukis, who sometimes refers to Kudlow as The Great One, echoes it on his own blog: The euro currency has been compromised and the European welfare state continues. Not […]

Posted by Europe’s Problem Isn’t the Welfare State — It’s Political Will | On the News | BNET | Report as abusive

Sigh… the old refrain of ‘passing debts along to our children’ and such is a load of crap, mainly because there is little chance that the grace period will last that long. This is a today problem! Hoping or worrying that the problem can be pushed aside for a generation is ludicrous. Or am I being too literal? and all these people mean to say is they don’t want to pay for their own mistakes and will dump it on others who played no part in them. Seems THAT has been going on for generations already though…

Posted by CDNrebel | Report as abusive

And where we Messrs. Kudlow and the others when Bush was running up greater deficits than Obama could even imagine? Wait, they were pushing for tax cuts for the top 1% under the discredited notion of supply-side economics.

Welfare state? How about corporate welfare? How about farm welfare? How about pro sports welfare?

As for Mdm. de Rugy, she once argued for legalizing money laundering. ‘Nuff said.

Posted by Gaius_Baltar | Report as abusive

Gaius, you must be a true believer! Sorry, though, your facts are false. Since a picture is worth a thousand words, here’s a picture for you to study closely before repeating your lie about “Bush…running up greater deficits than Obama….” -deficits-vs-obamas-deficits-in-pictures  /
Not that I actually think you’ll repent, but there’s always hope for redemption.

Posted by OldBull | Report as abusive