Thursday, August 06, 2009


A worthwhile read, with a fun closing paragraph:
So in summary - Obama's ever increasing subsidy programs ala Cash For Hairdryers and the upcoming Cash For Ratting Out Nonconformists will have a phantom impact of making it seem things are better while all these temporal redistribution mechanisms do is take from the future in order to satisfy the US consumer in the here and now. And the fact that nothing at all is being fixed in the economy, quite the contrary, with every day, America gets tens of billions of dollars deeper into the debt black hole, seems perfectly agreeable to all those in power.
The "Cash for Hairdryers" is obviously poking fun at the horribly Cash for Clunkers program which has accomplished about nothing to the tune of $1 billion tax dollars; the "Ratting Out Noncomformists" line is due to this poorly worded request on the official website:
Scary chain emails and videos are starting to percolate on the internet, breathlessly claiming, for example, to ‘uncover’ the truth about the President’s health insurance reform positions [...]

There is a lot of disinformation about health insurance reform out there, spanning from control of personal finances to end of life care. These rumors often travel just below the surface via chain emails or through casual conversation. Since we can’t keep track of all of them here at the White House, we’re asking for your help. If you get an email or see something on the web about health insurance reform that seems fishy, send it to
As James Taranto noted yesterday in his Best of the Web column:
It seems unlikely that this is anything more than a clumsily worded request for information that will inform the administration’s rebuttals to critics of its plan. During the Bush administration, we quickly tired of the endless and empty left-wing complaints about imagined assaults on civil liberties. Such complaints are no less tiresome coming from the right.

On the other hand, it was clumsily worded. At the very least, it is obnoxious to imply that all opposition to ObamaCare is based on “disinformation.” This show of contempt for opposing views ought to make skeptics even more skeptical. And it is creepy for an agent of the government to ask citizens to inform on their neighbors.


  1. Ok, ok, first. If you an explain to the article to me without to much generalizations, but in a clear and coherent manner, I will recomend you to the London School of Economics. not really, but here's another thing I don't understand. What is incredibly terrible about the "Cash for Clunkers" program? I'm sure there are plenty of answers, but as you can see I am severely lacking in my good old conservative mindset and I must-must-MUST squash the ignorant, foolish, stupid, idiotic, erratic, neolithic, manganic, stannic, cupric, paleolithic, moronic, ironic feelings of liberality/evil/ideas of Satan.

    Hoping you can help me out,

  2. BARUH -

    If an economic program is done correctly, the money generates a multiplier effect. If it's done adequately, just the effect of the money one time. If poorly, then the money doesn't even provide it's value.

    Good Example: I buy a new car. Dealer takes my deposit and orders and ad campaign. Ad company pays local graphic designer for the ad and printing company to print them. A bunch of worker types are hired to go put the ad up on all the billboards in town. When the day is done, everyone with money in their pocket goes out for a beer at the local bar. Bar owner's business picks up, he orders more beer...etc. My order generated car jobs, ad jobs, and paid workmen. They spent the increased income at bars and restaurants, which caused those facilities to hire more and order more. The money goes round and you get as much as 5x the original economic impact.

    Adequate Example: I buy a new car. Dealer knows times are tough so he puts all the money in the bank. Further, because he's worried about sales, he doesn't order a replacement car for the lot - decreasing his inventory. When he goes home at the end of the day, he doesn't buy a beer because he's worried about staying in business, he's saving everything. The money passes through once - it doesn't even generate additional car manufacturing jobs.

    Bad Example: Everyone is offered $5,000 for their middle-age low gas mileage cars. They run fast to buy a new car. Dealer puts money in the bank, because times are tough he's not advertising or ordering replacement cars for his inventory. Because people were coming in with low gas mileage cars, they buy a Toyota Prius (high end), Honda Civic (middle end) or Hyundai Elantra (low end). The cars are made out of the US, so the car jobs - if any - help Korea and Japan and not the US. The cars traded in are taken and destroyed, so the used car inventory falls and used car prices go up. Now Mary on Welfare who gets a job offer for a 3 month road paving job (from stimulus money) can't afford to buy a $2,000 car to get there as that car is now $3,500.

    In the last scenario, the dealer gets his profit, but the manufacturer profit and jobs go overseas. Used car prices go up further depressing opportunities for unemployed. The money only has a 25% local impact!