The economic recovery will pick up steam. Tax revenues will increase, and certain components of expenditure will decline or grow more slowly, so budget deficits will shrink. Politicians and the public will act as thought these improvements are enough to address the long-term state and federal debt situations, and they will start spending again like drunken sailors.
In keeping with the best of government traditions, the Federal Bed Bug Work Group is hosting its second national summit Feb. 1-2 in Washington to brainstorm about solutions to the resurgence of the tiny bloodsuckers that have made such an itch-inducing comeback in recent years.
The summit will be open to the public, officials said, and will focus on ways the federal government and others can work together to manage and control the pests, which have been showing up in apartment buildings, college dorms, luxury hotels, movie theaters, Manhattan retail stores, and increasingly, in office buildings, according to officials and pest management companies.
Several federal agencies participate in the Federal Bed Bug Work Group: the Environmental Protection Agency, the deapartments of Housing and Urban Development, Agriculture, Defense and Commerce, the National Institutes of Health and the Centers for Disease Control and Prevention.
Problem solved, no doubt!
Home prices fell in the nation’s major metropolitan areas from September to October, with six regions hitting new lows, and they’re not expected to rebound anytime soon.
The Standard & Poor’s/Case-Shiller index, long considered a reliable gauge of the housing market’s health, reported Tuesday that prices of single-family homes dropped 1.3 percent in all 20 regions it tracks.
The housing market’s collapse crippled the economy, and a recovery in home prices is considered critical to getting the market back on track. (emphasis added)
Housing prices are falling because they soared to ridiculous levels during the bubble . Any policy that attempts to keep prices high – or, equivalently, that attempts to prevent foreclosures or juice housing construction — is fighting a crucial market adjustment to past distortions.
WASHINGTON — No one was more critical than Representative Mark Steven Kirk when President Obama and the Democratic majority in the Congress sought passage last year of a $787 billion spending bill intended to stimulate the economy. …
Though Mr. Kirk and other Republicans thundered against pork-barrel spending and lawmakers’ practice of designating money for special projects through earmarks, they have not shied from using a less-well-known process called lettermarking to try to direct money to projects in their home districts.
Mr. Kirk, for example, sent a letter to the Department of Education dated Sept. 10, 2009, asking it to release money “needed to support students and educational programs” in a local school district. …
The district, Woodland School District 50, said it later received about $1.1 million in stimulus money. …
It gets worse: phonemarking, soft earmarks, and so on. Congress will never tie its own hands; it will only pretend to do so.
Nearly 100 U.S. banks that got bailout funds from the federal government show signs they are in jeopardy of failing.
The total, based on an analysis of third-quarter financial results by The Wall Street Journal, is up from 86 in the second quarter, reflecting eroding capital levels, a pileup of bad loans and warnings from regulators. The 98 banks in shaky condition got more than $4.2 billion in infusions from the Treasury Department under the Troubled Asset Relief Program.
A few comments:
1. The banks discussed in the story are small; the real question is what is going on with the large banks.
2. These banks have paid back their TARP injections. But that, by itself, does not prove they are healthy. Since the crisis, the Fed has been lending at low interest rates for short-term debt and buying at high interest rates for long-term debt. This juiced profitability at the big banks, generating the funds that allowed them to pay off their TARP injections. Their overall portfolios, however, may still contain a lot of assets whose values are significantly overstated.
3. Many factors indicate that housing prices are still going to drop substantially. So assets backed by housing – both thse on bank balance sheets and that on the Fed’s balance sheet – may decline in value.
4. In that case, the Fed will lose money when it tries to sell off its MBS portfolio (offsetting the returns it is earning now), and the big banks’ inflated balance sheets will become tougher to disguise.
5. If these concerns are accurate, it is still an open question as to how much TARP will ultimately cost the taxpayers.
One expert thinks not:
China … faces a sudden slowdown unless it undergoes urgent economic and political reforms, according to a renowned Chinese academic and former member of the People’s Bank of China’s monetary policy committee.
In a scathing indictment of the country’s extraordinary growth story, Yu Yongding listed rising social tensions, choking pollution, a lack of public services and an over-reliance on exports and investment, particularly in real estate, as threats to the country’s economic future.
This fits my impressions precisely. Although China has unleased some market forces, it still engages in massive central planning. This can improve growth for a while, but it breeds huge distortions that will eventually cause a crash.
WASHINGTON — The Drug Enforcement Administration has been transformed into a global intelligence organization with a reach that extends far beyond narcotics, and an eavesdropping operation so expansive it has to fend off foreign politicians who want to use it against their political enemies, according to secret diplomatic cables.
In far greater detail than previously seen, the cables, from the cache obtained by WikiLeaks and made available to some news organizations, offer glimpses of drug agents balancing diplomacy and law enforcement in places where it can be hard to tell the politicians from the traffickers, and where drug rings are themselves mini-states whose wealth and violence permit them to run roughshod over struggling governments.
Read the details here; it’s not a pretty picture.
It seemed a straightforward case: A man with a string of convictions and a reputation as a drug dealer was going on trial in Montana for distributing a small amount of marijuana found in his home — if only the court could find jurors willing to send someone to jail for selling a few marijuana buds.
The problem began during jury selection last week in Missoula, when a potential juror said she would have a “real problem” convicting someone for selling such a small amount. But she would follow the law if she had to, she said.
A woman behind her was adamant. “I can’t do it,” she said, prompting Judge Robert L. Deschamps III to excuse her. Another juror raised a hand, the judge recalled, “and said, ‘I was convicted of marijuana possession a few years ago, and it ruined my life.’ ” Excused.
I am confused by these reactions. Why is selling a small amount of marijauna OK, but selling a large amount is not?
WASHINGTON — The iPad is coming to Capitol Hill.
Tucked into new rules proposed by the incoming House Republican majority is one that could fling the chamber — for good or ill — into the 21st century: Members may use an electronic device on the House floor as long as it doesn’t “impair decorum.”
The new rule would relax the complete ban on the use of gadgets like the iPad, iPhone or BlackBerry on the floor. Mobile phones, tablet computers and the whole universe of applications that run on them will be officially available to House members as they conduct business.
We are assured by soon-to-be-speaker Boehner, of course, that these devices will be used on the floor “for official business only.” Yeah, right. For those of us who like gridlock, however, it might be a plus if the members spend their time following golf scores instead of making new laws!
PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
This is going to occur on a grand scale, starting soon, unless cities and states start cutting expenditure now.
