I am a life-long fan of the New York Giants football team (no, I was not raised in NY, but in DC; was a contrarian even back then).  So, it hurts to dump on anything associated with the Giants, but that’s life:

It’s the gift that keeps on taking. The old Giants Stadium, demolished to make way for New Meadowlands Stadium, still carries about $110 million in debt, or nearly $13 for every New Jersey resident, even though it is now a parking lot.

The financial hole was dug over decades by politicians who passed along the cost of building and fixing the stadium, and it is getting deeper. With the razing of the old stadium and the Giantsand the Jets moving into their splashy new home next door, a big source of revenue to pay down the debt has shriveled.

New Jerseyans are hardly alone in paying for stadiums that no longer exist. Residents of Seattle’s King County owe more than $80 million for the Kingdome, which was razed in 2000. The story has been similar in Indianapolis and Philadelphia. In Houston, Kansas City, Mo., Memphis and Pittsburgh, residents are paying for stadiums and arenas that were abandoned by the teams they were built for.

Government funding for stadiums is a boondoggle, pure and simple. The alleged economic benefits are always less than forecast and below the stadium’s cost. The funding just insures that local politicians get invited to watch games in the team skybox.

Critiques of Libertarianism and Critics of Cato. Enjoy.

The unexpectedly deep plunge in home sales this summer is likely to force the Obama administration to choose between future homeowners and current ones, a predicament officials had been eager to avoid.

Over the last 18 months, the administration has rolled out just about every program it could think of to prop up the ailing housing market, using tax credits, mortgage modification programs, low interest rates, government-backed loans and other assistance intended to keep values up and delinquent borrowers out of foreclosure. The goal was to stabilize the market until a resurgent economy created new households that demanded places to live.

As the economy again sputters and potential buyers flee — July housing sales sank 26 percent from July 2009 — there is a growing sense of exhaustion with government intervention. Some economists and analysts are now urging a dose of shock therapy that would greatly shift the benefits to future homeowners: Let the housing market crash. (emphasis added).

This perspective has been my view since the crisis started: housing prices during the bubble rose to levels that made no economic sense, and these prices are still excessive relative to history or compared to reasonable estimates of construction costs for new housing.

So attempts to prop up the housing market just delay an inevitable reallocation of resources from housing to other activities. It is a misguided attempt to bail out homeowners who purchased houses they could not afford, and to help bankers holding assets backed by housing.

ABOUT a year ago Cary Feldman was surprised to find himself sprawled on the pavement in an intersection in Chicago Heights, Ill., having been knocked off his motor scooter by the car behind him. Five months later he got another surprise: a bill from the fire department for responding to the scene of the accident.

“I had no idea what the fire truck was there for,” said Mr. Feldman, of nearby Matteson. “It came, it looked and it left. I was not hurt badly. I had scratches and bruises. I did not go to the hospital.”

Mr. Feldman had become enmeshed in what appears to be a nascent budget-balancing trend in municipal government: police and fire departments have begun to charge accident victims as a way to offset budget cuts.

Far be it from me to oppose a budget-cutting measure, but this approach seems mistargeted. Accident victims who take significant, unnecessary risks should certainly pay for their own rescues. An example would be a mountain climber who ignored warnings of bad weather and then got trapped by an avalanche.

But an unsupsecting motorcylcist hit by a car? Why not make the driver of the car pay?

With just two months until the November elections, the White House is seriously weighing a package of business tax breaks – potentially worth hundreds of billions of dollars – to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses, according to people with knowledge of the deliberations.

Among the options under consideration are a temporary payroll-tax holiday and a permanent extension of the now-expired research-and-development tax credit, which rewards companies that conduct research into new technologies within the United States.

Milton Friedman expressed the view that all tax cuts are good tax cuts, and overall I agree: any tax reduction means more purchasing power in the hands of people and businesses, not government.

But some tax cuts are better than others.

If policy is focussed on short-run stimulus, tax cuts should create a strong incentive to shift spending from the future to the present. A standard example is a temporary investment tax credit. I am not a fan of setting tax policy based on short-run considerations, but among the stimulus options being discussed, this one is relatively sensible.

If policy is focussed on improving economic efficiency, tax cuts should:

1. be permanent rather than temporary (to reduce uncertainty)

2. be cuts in the highest marginal rates (since these are the most distorting)

3. be cuts in capital income taxes (since capital is more responsive to tax rates than labor).

From these perspectives, the temporary payroll-tax holiday is not especially appealing. It might shift new hires to the present, but at a cost of reduced hiring when the holiday expires.  This future offset can also occur with a temporary investment tax credit, but the new capital is durable.

A permanent extension of the research and development tax credit is defensible: R&D is a kind of investment, and reduced taxation of investment makes sense. But I would prefer lower tax rates on investment across the board, so government is not encouraging some kinds of investments over others.

So, these proposals are better than nothing, but we can do much better.

U.S. Council of Economic Advisers Chairman Christina Romer, in her final speech before stepping down, called on the country to stomach new stimulus measures to lift the lackluster economy, even in the face of growing fears about the nation’s deficit.

“Concern about the deficit cannot be an excuse for leaving unemployed workers to suffer,” she will say at the National Press Club on Wednesday, according to a copy of her prepared remarks. She will add, “We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them.”

In evaulating Christy’s remarks, it is important to separate two issues:

1. Would an additional stimulus package of, say, $100 billion make a substantial difference to the U.S. long-term fiscal outlook?  No.  $100 billion is a lot of money, but it’s chump change compared to the path of U.S. expenditure and debt.  So if such expenditure would actually jump-start the economy, it might make sense.

2. Would additional stimulus help the economy? No one knows for sure, but the evidence does not make a good case that Keynesian spending works.

So I am highly skeptical about stimulus via spending (tax cuts are a different matter), but not because of deficit concerns.

WASHINGTON—The government proposed labeling each new passenger vehicle with a letter grade from A to D based on its fuel efficiency and emissions, part of a broader effort by the Obama administration to promote electric cars and other advanced-technology vehicles. …

Under the system, the only cars that would receive an A-plus, A or A-minus would be electrics and plug-in hybrids, the government said.

Anyone confused about what the agenda is here?

BEIJING — During its decades of rapid growth, China thrived by allowing once-suppressed private entrepreneurs to prosper, often at the expense of the old, inefficient state sector of the economy.

Now, whether in the coal-rich regions of Shanxi Province, the steel mills of the northern industrial heartland, or the airlines flying overhead, it is often China’s state-run companies that are on the march.

As the Chinese government has grown richer — and more worried about sustaining its high-octane growth — it has pumped public money into companies that it expects to upgrade the industrial base and employ more people. The beneficiaries are state-owned interests that many analysts had assumed would gradually wither away in the face of private-sector competition.

In other words, China is engaged in “planned capitalism,” an oxymoron if ever there was one. China may achieve high growth for a while under this approach, but the inefficiencies of central planning will show themselves over time.

LAREDO, TEX. – Stashing cash in spare tires, engine transmissions and truckloads of baby diapers, couriers for Mexican drug cartels are moving tens of billions of dollars in profits south across the border each year, a river of dirty money that has overwhelmed U.S. and Mexican customs agents.

Officials said stemming the flow of this cash is essential if Mexico and the United States hope to disrupt powerful transnational criminal organizations that are using their wealth to corrupt, terrorize and kill.

Despite unprecedented efforts to thwart the traffickers, U.S. and Mexican authorities are seizing no more than 1 percent of the cash, according to an analysis by The Washington Post based on figures provided by the two governments.

Read the rest here.

ELMHURST, Ill.—Victoria Vasconcellos, the petite founder of an Internet retailer in this Chicago suburb, is in the thick of a regulatory battle that could affect millions of American cigarette smokers.

Ms. Vasconcellos imports electronic cigarettes from a Chinese manufacturer and sells them on her website, Cignot.com, to 14,000 customers. The 48-year-old is part of a growing legion of e-cigarette purveyors who are defying the Food and Drug Administration, which contends the nascent nicotine products are drug devices that require pre-market approval and may pose their own health risks. The FDA began intercepting shipments of the products from China two years ago.

E-cigarettes are battery-powered tubes that turn nicotine-laced liquid into a vapor mist. Sellers say they are potentially less harmful than cigarettes because they don’t have the toxins of burning tobacco. A growing number of people who use them say they are an effective way to quit smoking.

The FDA’s position is non-sensical from the perspective of promoting public health.  Nicotine does not cause cancer or other diseases when consumed in moderation; the tar in cigarettes is the problem. So the FDA should be delighted with a product that is not itself harmful and that allows some people to reduce their use of a different product that is.

Full Disclosure: I was a paid consultant of several tobacco firms a few years back. The relation ended because it turned out I was too politically incorrect!