Number losing unemployment benefits


Thursday, October 30, 2008

White House Explores Aid for Auto Deal

I am disappointed to learn that the Administration is considering giving additional aid to the Automobile industry (White House Explores Aid for Auto Deal, New York Times, October 28, 2008: A1). An industry that, at least in Europe, has the technology to give us very fuel efficient cars but whose members have not seen fit to adopt this technology in the United States. As a result their sales have plummeted in the era of high gasoline prices.

The Administration, in its recent rejection of market forces, has forgotten the one thing that, in spite of its faults, the market does reasonably well: picking winners and losers.The market does this much better than politicians who are manipulated by industry lobbyists. Foot-dragging Detroit has proved to be a loser. The industry is no place for Government money to be invested.

There is a place for government money: to improve unemployment benefits for laid-off workers; to provide widely available retraining opportunities for laid-off workers; and to finance early retirement opportunities for older workers.

To encourage the development of non-fossil fuel energy, the federal gasoline tax should be raised. I can just see in ten years time the re-tooled former plants of the auto companies and their suppliers turning out wind turbines and photo-voltaic cells. This will lead to a true renaissance of Detroit.

Sent to the New York Times

Mortgage rescue plan will save your house but will cost you equity

I am surprised at the negative tone of Michelle Singletary's article on the new HOPE plan to save homeowners (Mortgage rescue plan will save your house but will cost you equity, Boston Globe, Business Section, October 19, 2008: G6).

She is correct that the homeowner will suffer some long term cost in having to share equity appreciation with the government. However the upside benefits to the homeowners and to society are enormous.

The homeowners get to keep their homes. They will have an affordable place to live for the foreseeable future. The will have the opportunity to build up some equity in their homes, a privilege that renters do not have. They will continue to be able to take mortgage interest payments from the income taxes that they owe, another privilege that owners do not have.

The continuation of residence in the same neighborhood will ensure that the neighborhood reduces the possibility of foreclosure blight that is beginning to afflict some streets in our towns and cities. For local and state governments, property taxes will continue to be paid on time. For those homeowners with children, their education will not be disrupted by a move to a new school catchment area.

All in all, I believe that the benefits of HOPE outweigh its disadvantages.

Sent to the Boston Globe

Op-Ed: A Different kind of Bailout. Cambridge Chronicle

Here it is

OPEd: A Different kind of Bailout. Cambridge Chronicle

Here it is

Thursday, October 16, 2008

The Bailout will not be Successful

The Treasury's latest plan (following the recent British action) of taking equity positions in commercial banks is yet another attempt to avoid dealing with the central problem that precipitated the crisis.

The plan is unlikely to be successful in injecting new equity into the markets and freeing up funds for lending. Like our $600 stimulus checks, the new funds will go to paying off old debts rather than resulting in new lending.

Furthermore with the government taking equity positions in the banks, the equity of current shareholders will be diluted. This will contribute to the stock market's downward spiral.

The solution to the crisis is to make the mortgages whole.

Sent to the New York Times

Op-Ed: Critique of the Treasury Decision Process to Decide the Bailout (Cambridge Chronicle)

Click Here

Friday, October 3, 2008

The fragility of the global nuclear order

I am horrified that Graham Allison, a Harvard Professor/Administrator, and Ernestino Zedilo, an IAEA Commissioner, managed to write a column about the Fragility of the Global Nuclear Order (Boston Globe, September 30, 2008: A11) without once mentioning the forthcoming treaty on nuclear cooperation between the US and India.

This horrendous treaty gives India a pass on the requirements of the nuclear non-proliferation treaty. They will receive nuclear assistance from the United States without having to comply. Today, your sister newspaper, the New York Times (A bad India Deal, September 30, 2008: A30) editorialized that passage of the treaty "would make it even harder to rein in Iran's (and other's) nuclear ambitions."

Your authors did your readers a disservice by failing to point out that with this treaty, the United States is contributing to the fragility of the nuclear world order.

Sent to Boston Globe