One Business that Doesn't Need a Bailout
Sign of the Times, Part 1: Federal bailout spending now exceeds the inflation-adjusted cost of World War II, according to our friends at the Independent Institute.
Senior Fellow William Shugart says World War II cost $3.6 trillion, but the bailouts now top $4 trillion. That’s actual money out of the taxpayer’s pocket, as opposed to the $12.8 trillion “lent, spent or guaranteed” figure you run across from time to time, a chunk of which might eventually be repaid.
And that’s just the direct cost. “As a result of keeping zombie businesses alive,” Shugart writes, “bailouts misallocate scarce productive resources away from more economically efficient (and profitable) uses elsewhere in the economy, alternatives that actually would promote growth and reduce unemployment.”
Can’t have that now, can we?
Sign of the Times, Part 2: Paulson & Co.’s Recovery Fund lost 9.1% in August. Its Gold Fund gained 9%.
Sign of the Times, Part 3: We’ve just uncovered a line of business that appears to be recession proof — albeit highly cyclical.
U.S. House and Senate campaigns have raised $1.2 billion so far in this election cycle. According to the Associated Press, the number is on a pace to crush the figures set in 2008, 2006 and 2004. Ditto for the 37 governor races this year.
No surprise here… As long as the power of government keeps growing, so will the number of interest groups and their desire to game the system to their advantage.
Just wait till the K Street outfits start issuing IPOs…