January 31, 2010
Doug has a great comment on the church-state separation issue. Go to his comment in the last blog entry for the explanation, but here is his summary:
The First Amendment embodies the simple, just idea that each of us should be free to exercise his or her religious views without expecting that the government will endorse or promote those views and without fearing that the government will endorse or promote the religious views of others. By keeping government and religion separate, the establishment clause serves to protect the freedom of all to exercise their religion.
Amen, I say.
January 30, 2010
An economist once told me it works a lot better to pull a thread than push one. His point was that demand, not supply, is the trigger for economic activity.
President Obama’s job-creation proposal — which involves tax credits for businesses that hire employees — strikes me as an effort to push the thread. No rational employer will hire employees unless demand exists for its product. If a tax credit convinces employers to ignore the economic realities, it’s a bad thing. My suspicion is that it is time to step back from stimulus efforts altogether. If, despite national debt issues, we are to continue efforts to stimulate the economy, we should be looking at it from the demand side.
How to do that? One-time increases in unemployment benefits make the most sense, because almost none of that money ends up in savings and it helps those who need it most.
The problem with a tax credit for job creation, aside from its potential to distort rational views of demand, is that it would undo some of the benefits if the economy rebounds. An economic rebound — that is, an accelerated increase in demand that corresponds with renewed consumer confidence — would create jobs with or without tax credits. The main significance of the tax credit, therefore, would be to compromise efforts to reduce national debt.
Obama is in a tough political situation, but I wish he would hold fast. Much of the stimulus money has yet to work through the system, and the economy is showing obvious — if not dramatic — signs of improvement. (Note the 5.7 percent annualized GDP growth in the 4th quarter.) Now is not the time to increase our debt with fixes that may not be necessary.
January 29, 2010
President Obama’s State of the Union speech had lots of high points — including the fact that he can pronounce “nuclear” and does not grin every time someone claps — but I thought one of his best points was this one on global warming:
I know that there are those who disagree with the overwhelming scientific evidence on climate change.
But here’s the thing. Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.
If the United States wants to increase exports, it needs to understand the market. Like it or not, foreign markets are demanding products that reduce energy consumption and greenhouse emissions. If we are to fund research and incentivize innovation, we should do so with an understanding of the markets we want to supply.