LAKE BORGNE, La. — The great wall of Lake Borgne is a monster. Nearly 2 miles long and 26 feet high, it spans a corner of the lake, 12 miles east of New Orleans. On Aug. 29, 2005, that corner funneled Hurricane Katrina’s surge into New Orleans, causing some of the city’s most violent flooding. Now, the corner is being blocked.

Nearly five years after Katrina and the devastating failures of the levee system, New Orleans is well on its way to getting the protection system Congress ordered: a ring of 350 miles of linked levees, floodwalls, gates and pumps that surrounds the city and should defend it against the kind of flooding that, in any given year, has a 1 percent chance of occurring.

The project will cost about $15 billion dollars. 

This expenditure is criminally stupid. Why are we fighting mother nature by encouraging people to live below sea level in a hurricane zone? For less money, we could just give every displaced family several hundred thousand dollars to start over somewhere sensible.

Oh wait, I forgot; all this expenditure is stimulating the economy! Maybe what we need to really get the recovery going is a few more Katrina-like hurriances and a couple of earthquakes for good measure.

Perhaps:

Islamic radicals are seizing on protests against a planned Islamic community center near Manhattan’s Ground Zero and anti-Muslim rhetoric elsewhere as a propaganda opportunity and are stepping up anti-U.S. chatter and threats on their websites.

One jihadist site vowed to conduct suicide bombings in Florida to avenge a threatened Koran burning, while others predicted an increase in terrorist recruits as a result of such actions.

“By Allah, the wars are heated and you Americans are the ones who…enflamed it,” says one such posting. “By Allah you will be the first to taste its flames.”

Not much:

Arch Brown has converted his traditional retirement accounts into plans with better tax advantages. Andrew Ahrens has been buying gold and silver and selling stocks. Archie Anderson might speed up the sale of two equities himself. Mike Henry is considering selling timber.

The four are among a growing group of high-income taxpayers who assume they will see higher taxes next year, no matter what Congress does to address the expiring tax cuts from the George W. Bush administration. More than four months before the expiration date, they are making plans to mitigate any impact.

Mr. Brown, a Tucson, Ariz., businessman, said he is working on the assumption that “the tax rates for people like me who have income over $250,000 will go up.”

The maneuvering ahead of Dec. 31 has confounded traditional tax preparations and spawned feverish activity among higher earners, a trend reported by tax planners and financial advisers across the country.

Michele Knight, of Knight Accounting and Technology in Colorado, said she is fielding numerous questions from people who want to know the tax implications of starting a small business. She is advising them to create limited-liability partnerships, one way to organize a new company that might have more favorable tax rates for some. Others are interested in learning about changing their retirement accounts.

Jim Kirby, a tax partner with PMB Helin Donovan LLP in Dallas, estimates that 70% of his clients are calling about the potential tax increases.

The tax avoidance described in this article is one reason we cannot tax our way out of fiscal disaster; the other is that higher taxes discourage economic activity, further limiting tax revenue.

The story also suggests one reason for the anemic recovery; the expectation of higher taxes means consumers are saving, not spending.

A federal grand jury has indicted Roger Clemens on charges of making false statements to Congress about his use of performance-enhancing drugs.

Far be it from me to defend Roger Clemens; he did, after all, abandon the Red Sox and later play for the Yankees!

And if Clemens lied to Congress, he’s an idioti and has a terrible lawyer.  Richard, Nixon, Martha Stewart, Bill Clinton, and Rod Blagojevich can all attest that it’s not the crime that gets you; it’s the coverup.

All that aside, the prosecution of Clemens and other athletes for using performance-enhancing drugs is a waste of government resources.

Professional athletes do incredibly damaging things to their bodies every time they play or practice. If they want to use performance-enhancing substances, that should be between them and their employers.

MAASTRICHT, the Netherlands — On a recent summer night, Marc Josemans’s Easy Going Coffee Shop was packed. The lines to buy marijuana and hashish stretched to the reception area where customers waited behind glass barriers.

Most were young. Few were Dutch.

Thousands of “drug tourists” sweep into this small, picturesque city in the southeastern part of the Netherlands every day — as many as two million a year, city officials say. Their sole purpose is to visit the city’s 13 “coffee shops,” where they can buy varieties of marijuana with names like Big Bud, Amnesia and Gold Palm without fear of prosecution.

It is an attraction Maastricht and other Dutch border cities would now gladly do without. Struggling to reduce traffic jams and a high crime rate, the city is pushing to make its legalized use of recreational drugs a Dutch-only policy, banning sales to foreigners who cross the border to indulge. But whether the European Union’s free trade laws will allow that is another matter.

The congestion associated with the Dutch system is hardly suprising. The solution is to allow more coffee shops to sell marijuana; that will spread out the traffic jams.  Better yet, legalize marijuana entirely; then tourists will buy from stores all over the city and country, eliminating any congestion issues.  In fact, the story notes that the number of coffee shops has been shrinking due to increased regulation.

The claim that crime is elevated is plausible, since an increase in the effective population means more crime. But the story suggests that the increased “crime” is mainly trafficking in hard drugs. To eliminate that crime, legalize those drugs too.

 Treasury Secretary Timothy F. Geithner, kicking off a half-day conference on housing finance, said Tuesday that it was important for the federal government to continue guaranteeing mortgage loans.

He said continued government support was important “to make sure that Americans can borrow at reasonable interest rates to buy a house even in a downturn.” The absence of such support, Mr. Geithner said, would make future recessions more severe because private lenders would not provide enough money for loans.

These are the kinds of remarks that make me want to tear my hair out: why should government intervene in mortgage markets in any way, shape, or form?

These interventions are just a backdoor way of redistributing income. But even if one believes in such redistribution, distorting mortgage markets, and generating all the moral hazard caused by this approach, is insane.

Some advocates of mortgage policies will claim that homeownership generates beneficial spillovers because property owners take pride in their property and neighborhoods, leading to greater value for everyone. Existing evidence is consistent with this view.

But this evidence does not show that subsidizing homeownerhip generates positive spillovers; in particular, pride in ownership plausibly attaches to houses that people have scrimped and saved for, and in which they have substantial equity; not to houses people know they cannot really afford and in which their equity is miniscule or zero.

So, advocates of redistribution should make their case honestly, not hidden in complicated and costly mortgage policies. The reason they do not, of course, is their fear that voters might reject these subsidies if the true magnitudes were obvious.  That’s possible; but that’s democracy.

On several occassions over the past few weeks, I have expressed the view on TV/radio that unemployment insurance is one factor that keeps unemployment elevated.

The email and phone calls I have received in response have, to put it mildly, not been kind.

So I was happy to read in today’s NYTimes that I am not entirely alone in being a collassal, uncaring, entitled, never-been-unemployed, out-of touch, overeducated-yet-clueless, arrogant, stupid  jerk (those are some of the nicer terms used by my “fans”).

Turns out I have company:

Struggling to keep its budget under control after the financial crisis, the [Danish] government in June cut into its benefits system, the world’s most generous, by limiting unemployment payments to two years instead of four. Having found that recipients either get work right away or take any job as their checks run out, officials are also redoubling long-standing efforts to move Danes more quickly out of the safety net. (emphasis added)

Maybe I should move to Denmark.

Conservatives should be applauding Obama from the highest rooftops for his position on the mosque.

1. He stated that policy should respect the rule of law.

2. He stated that he would not express an opinion on the actions of the relevant private parties.

Isn’t that exactly what conservatives claim to want out of the President in other arenas?

SHANGHAI — After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday. …

Experts say unseating Japan — and in recent years passing Germany, France and Great Britain — underscores China’s growing clout and bolsters forecasts that China will pass the United States as the world’s biggest economy as early as 2030.

I am skeptical that China will overtake the U.S. (especially if we focus on per capita GDP), but I do not discount the possibility entirely.

On the one hand, China’s growth rate will slow over time because the best opportunities for growth are the ones being exploited first.

In addition, China is hardly a bastion of capitalism. The government imposes a broad range of economic decisions on the private sector (e.g., green energy), and these “industrial policies” will prove costly down the line.

On the other hand, U.S. economic policy has shifted markedly away from economic growth and toward redistribution. So whatever mistakes Chinese policy will make, we are likely to make many of our own.

At least a dozen major drug and device makers are under investigation by federal prosecutors and securities regulators in a broadening bribery inquiry into whether the companies made illegal payments to doctors and health officials in foreign countries.

In previous investigations, federal officials have charged that some companies made these kinds of payments to encourage doctors abroad to order or prescribe their products. In the United States, companies routinely hire doctors as consultants to market drugs and devices to their colleagues and other health professionals at medical conventions and small gatherings. Such consulting arrangements are legal in the United States as long as the companies do not pay doctors directly to write prescriptions for their products.

Why are these payments an issue for U.S. policy? If foreign governments believe the payments are harmful, let them prosecute.

And the payments may in fact be beneficial. By encouraging utilization of new medicines and devices, drug and device makers can expand the size of their markets, which implies lower prices due to economies of scale.

Plus, the ability to generate a larger market enhances the incentive to develop drugs and devices for rare diseases and conditions. Drug and device companies will ignore these if they cannot make a sufficient return on the necessary research and development.