Karen De Coster Archive

Cash for Clunkers Duel: Edmunds vs the White House

November 2, 2009 6:58 AM by Karen De Coster

On October 28, Edmunds posted a press release: "Cash for Clunkers Results Finally In: Taxpayers Paid $24,000 per Vehicle Sold, Reports Edmunds.com." Edmonds explains the process it used to arrive at incremental vehicle sales from Cash for Clunkers incentives, and then calculated the average cost per vehicle.

On the White House blog, Edmunds has been attacked for for its analysis of the real cost of the Cash for Clunkers program that determined the cost of the program to be $24,000 per vehicle. In an October 29 blog post, Senior White House propagandists announced that on the very day they discovered that motor vehicle output added 1.7% to economic growth in the third quarter, which is the "largest contribution to quarterly growth in over a decade," Edmunds popped its bubble when it unleashed its press release "suggesting that the Cash for Clunkers program had no meaningful impact on our economy or on overall auto sales." The blog post even goes so far as to call the Edmunds analysis a "space suit" approach.

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Minsky and Mises

October 24, 2009 6:54 AM by Karen De Coster

This is not a very sophisticated article ("Muddying the Regulatory Debate" from the Financial Times), but it does give attention to Mises and the Austrians. He presents some weak interpretations of Mises, and this paragraph seems to say that Misesians would propose intervention to downsize the banking system? Maybe I am reading it wrong, but the writing/editing of the piece seems somewhat anemic.

For followers of von Mises, the expansive monetary and fiscal policy that has followed the crisis is wrong. They would advocate a drastic paring back in regulation and the removal of discretion from central banks. Presumably, as they hold that the market would not allow institutions to become too big to fail in the first place, they would support some kind of intervention to make the biggest banks smaller.

See Frank Shostak's, "Does the Current Financial Crisis Vindicate the Economics of Hyman Minsky?" and Robert Blumen's "Minsky Having a Moment?"

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Dollar Debate: Who Has Substance?

October 14, 2009 10:28 AM by Karen De Coster

There's Judy Shelton, who is on a roll writing terrific articles in the Wall Street Journal. Today she has published another stern reminder of the slow death of the dollar.

Unprecedented spending, unending fiscal deficits, unconscionable accumulations of government debt: These are the trends that are shaping America's financial future. And since loose monetary policy and a weak U.S. dollar are part of the mix, apparently, it's no wonder people around the world are searching for an alternative form of money in which to calculate and preserve their own wealth.
...But as the dollar is increasingly perceived as the default mechanism for out-of-control government spending, its role as a reliable standard of value is destined to fade. Who wants to accumulate assets denominated in a shrinking unit of account? Excess government spending leads to inflation, and inflation plays dollar savers for patsies--both at home and abroad.

Her analysis of the looming federal debt fiasco is spot-on, and as she notes, the regime's budget numbers do not include health care reform or the quietly proposed second stimulus package (or packages). Then there's Timmy Geithner. In a discussion with the chief editor of China's Caijing, Geithner stated that "investors have shown confidence in the U.S. government's ability to maintain sustainable growth" and such confidence has helped stabilize the value of dollar assets. He dances around the issue of the diving dollar, and can only mutter such irrelevant filler as, "The dollar's role comes with special burdens and responsibilities that require we are especially careful to sustain confidence in U.S. financial assets."

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The House That Goldman Sachs Built
2009.10.14 | Comments (1)

Politicians Act Surprised by Lack of "Business Criteria" for Decisions at New Government Motors
2009.07.06 | Comments (26)

Suze Orman Didn't Attend Mises University
2009.06.23 | Comments (15)

How About Government-Planned "Secession"?
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Sometimes You Find a Really Good Spot to Read a Book
2009.05.26 | Comments (12)

Obama to Government Motors: "Let's Roll"
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The Federal Reserve's Victims
2009.04.22 | Comments (9)

Kirzner on Mises in the WSJ
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A Misesian, Holistic MD
2009.03.16 | Comments (23)

Federalized Accounting
2009.03.06 | Comments (14)

General Motors is Not a Going Concern
2009.03.05 | Comments (11)