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Food Police Turns Liberals towards Libertarianism - (www.slate.com) A nonalcoholic sequel to the Whiskey Rebellion seems to be brewing. And Slate may be joining it. I'll call it the Fresca Rebellion, in honor of our editor, David Plotz, a hard-core addict of the citrus-flavored soft drink. For a long time, the only discernible libertarian around here was Jack Shafer, a man unable to wean himself from speech, guns, and other annoying constitutional amendments. But lately, other folks seem to be getting a bit Ayn Randy. On Saturday, Jacob Weisberg blew the whistle on New York Mayor Michael Bloomberg for trying to ban outdoor smoking in public parks ("First They Came for the Marlboros"). Yesterday, Daniel Engber went after the hypocrisy and overreaching of soda-tax advocates. And I've become such a knee-jerk defender of burgers and fries that I'm tempted to seek funding from the Competitive Enterprise Institute. What's going on here? Most of us used to be good liberals. Are we getting conservative in our old age? I'd say it's the opposite. We're what we were five or 10 years ago: skeptics and fact-mongers with a bias for personal freedom. It's the left that's turning conservative. Well, not conservative, but pushy. Weisberg put his finger on the underlying trend: "Because Democrats hold power at the moment, they face the greater peril of paternalistic overreaching." Today's morality cops are less interested in your bedroom than your refrigerator. They're more likely to berate you for outdoor smoking than for outdoor necking. It isn't God who hates fags. It's Michael Bloomberg. In Engber's case, the provocation is scientific. To justify taxes on unhealthy food, the lifestyle regulators are stretching the evidence about obesity and addiction, two subjects on which Engber is burdened with contrary knowledge. Liberals like to talk about a Republican war on science, but it turns out that they're just as willing to bend facts. In wars of piety, science has no friends. In my case, the provocation is partly scientific and partly libertarian. But mostly, it's a shift in the slippery slope. One of my basic rules is that slippery slopes run both ways. If you've never seen it, go watch that Monty Python sketch about Dennis Moore, the Robin Hood copycat who keeps stealing from the rich and giving to the poor until he realizes he's now stealing from the poor and giving to the rich. You have to notice when the balance of power and zeal has shifted from one party to the other. Engber points out that 40 states have enacted special taxes on soda or junk food. And the soda taxers are becoming ever bolder. Their latest manifesto is an article in the New England Journal of Medicine, co-authored by the health commissioner of New York City, the surgeon general of Arkansas, and several others. It declares soda fair game for government intervention on the grounds that "market failures" in this area are causing "less-than-optimal production and consumption." What exactly are these market failures? First, the authors argue, because many persons do not fully appreciate the links between consumption of these beverages and health consequences, they make consumption decisions with imperfect information. These decisions are likely to be further distorted by the extensive marketing campaigns that advertise the benefits of consumption. That's true. Some people don't realize how bad soda is for them. And I trust the soft-drink companies as far as I can throw them. So let's educate people about how much sugar they're drinking and what it's doing to them. But special taxes? To justify that, we'll need more. So let's move on to the authors' next rationale. They write that consumers do not bear the full costs of their consumption decisions. Because of the contribution of the consumption of sugar-sweetened beverages to obesity, as well as the health consequences that are independent of weight, the consumption of sugar-sweetened beverages generates excess health care costs. Medical costs for overweight and obesity alone are estimated to be $147 billion—or 9.1% of U.S. health care expenditures—with half these costs paid for publicly through the Medicare and Medicaid programs. … Escalating health care costs and the rising burden of diseases related to poor diet create an urgent need for solutions, thus justifying government's right to recoup costs.
35 Million Americans on Foodstamps - (www.reuters.com) More than 35 million Americans received food stamps in June, up 22 percent from June 2008 and a new record as the country continued to grapple with the worst recession since the Great Depression of the 1930s. The food stamp program, which helps cover the cost of groceries for one in nine Americans, has grown in step with the U.S. unemployment rate which stood at 9.4 percent in July. The Labor Department will release August employment figures on Friday. June was the seventh straight month in which food stamp rolls set a record. The average benefit in June was $133.12 per person.
Marc Faber on the future: Wars, massive government debt defaults, and the impoverishment of large segments of Western society. - (bullnotbull.blogspot.com) Dr. Marc Faber: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today, wars, massive government debt defaults, and the impoverishment of large segments of Western society." Video: Marc Faber predicts with certainty that the United States will go through high inflation and a lower standard of living. Expect wars and currency re-evaluation.
The Shadow Foreclosure Industry - (business.theatlantic.com) As of July, mortgage companies hadn't begun the foreclosure process on 1.2 million loans that were at least 90 days past due, according to estimates prepared for The Wall Street Journal by LPS Applied Analytics, which collects and analyzes mortgage data. An additional 1.5 million seriously delinquent loans were somewhere in the foreclosure process, though the lender hadn't yet acquired the property. The figures don't include home-equity loans and other second mortgages. Moreover, there were 217,000 loans in July where the borrower hadn't made a payment in at least a year but the lender hadn't begun the foreclosure process. In other words, 17% of home mortgages that are at least 12 months overdue aren't in foreclosure, up from 8% a year earlier. Sunday night, I returned from a quick weekend trip to my hometown in South Florida. It was my first time there since early January. Driving around Fort Lauderdale, it became extremely clear just how big a hit its economy has taken as a result of the real estate market's collapse. It's like a different world compared to what it was like just a few years ago: overgrown grass rises above many curbs and sidewalks; homes and businesses sit empty and abandoned; most blocks display multiple "for sale" or "for rent" signs. In speaking to some of my friends and relatives who still live there, I learned that the state's ongoing foreclosure glut has resulted in an interesting phenomenon -- a "shadow" inventory of foreclosures. The Wall Street Journal has an article about this shadow inventory today. It explains what's going on in areas hard-hit by the housing bubble's pop: Legal snarls, bureaucracy and well-meaning efforts to keep families in their homes are slowing the flow of properties headed toward foreclosure sales, even when borrowers are in deep distress. While that buys time for families to work out their problems, some analysts believe the delays are prolonging the mortgage crisis and creating a growing "shadow" inventory of pent-up supply that will eventually hit the market. During my trip to Florida I heard about families who have lived in their homes as long as two years without paying, because the banks haven't gotten around to foreclosing. And that's a problem. Until the real estate market recognizes all its losses -- including accounting for all foreclosures -- it won't be able to regain real stability and move on. Of course, that has implications for the broader economy as well. Here are two journal sources explaining how bad they think this problem is: "There's going to be a flood [of bank-owned homes] listed for sale at some point," says John Burns, a real-estate consultant based in Irvine, Calif. When that happens, Mr. Burns believes, home prices will fall further, particularly in markets with large numbers of foreclosures. Overall, he expects home prices to decline 6% next year.
Unemployment Among Young Americans Hits 52.2% - (www.nypost.com) The unemployment rate for young Americans has exploded to 52.2 percent -- a post-World War II high, according to the Labor Dept. -- meaning millions of Americans are staring at the likelihood that their lifetime earning potential will be diminished and, combined with the predicted slow economic recovery, their transition into productive members of society could be put on hold for an extended period of time. And worse, without a clear economic recovery plan aimed at creating entry-level jobs, the odds of many of these young adults -- aged 16 to 24, excluding students -- getting a job and moving out of their parents' houses are long. Young workers have been among the hardest hit during the current recession -- in which a total of 9.5 million jobs have been lost. "It's an extremely dire situation in the short run," said Heidi Shierholz, an economist with the Washington-based Economic Policy Institute. "This group won't do as well as their parents unless the jobs situation changes." Al Angrisani, the former assistant Labor Department secretary under President Reagan, doesn't see a turnaround in the jobs picture for entry-level workers and places the blame squarely on the Obama administration and the construction of its stimulus bill. "There is no assistance provided for the development of job growth through small businesses, which create 70 percent of the jobs in the country," Angrisani said in an interview last week. "All those [unemployed young people] should be getting hired by small businesses." There are six million small businesses in the country, those that employ less than 100 people, and a jobs stimulus bill should include tax credits to give incentives to those businesses to hire people, the former Labor official said. "If each of the businesses hired just one person, we would go a long way in growing ourselves back to where we were before the recession," Angrisani noted. During previous recessions, in the early '80s, early '90s and after Sept. 11, 2001, unemployment among 16-to-24 year olds never went above 50 percent. Except after 9/11, jobs growth followed within two years.
Massive real estate losses hidden at California bank - (www.sacbee.com) A California bank that received $298.7 million in federal bailout money is facing state and federal scrutiny and has fired its two top executives after an internal investigation discovered that massive real estate loan losses were improperly and deliberately hidden from its finance department and outside auditors. The Securities and Exchange Commission is looking into troubles at United Commercial Bank of San Francisco, which has branches in Sacramento and Citrus Heights, bank officials confirmed. Other state and federal regulators have restricted the bank's activities after examiners found the bank engaged in "unsafe and unsound banking practices that jeopardize the safety of its deposits," state and federal records show. The cease-and-desist order bars United Commercial from opening new branches or extending further credit to customers with bad loans topping $1 million without its board's prior approval. In addition to asking for the resignations of the top executives, the bank has stopped paying all dividends to preserve its capital. That includes dividends the lender owes to the U.S. Treasury after it was given the $298.7 million in taxpayers' money under TARP, or Troubled Asset Relief Program, just 11 months ago. United Commercial spokesman Steve DiMattia said the bank is fully cooperating with the SEC. "We are not privy to what the SEC is doing or plans to do," added DiMattia, who declined to say if the bank received a subpoena. Lawsuits followed collapse of stock: United Commercial Bank serves Chinese American communities and entrepreneurs with 50 California branches. It also helps companies doing business in China. It also has nine branches in New York, five in Atlanta and branches in Houston; New England; and Beijing, Guangzhou and Shenzhen, China. United Commercial's stock, which trades on the NASDAQ stock market, has collapsed since it disclosed its loan woes in securities filings earlier this month. Since then, nine law firms have launched shareholder class action lawsuits that accuse United Commercial of falsifying its financial statements and committing securities fraud in 2008 – the same year it applied for and received its TARP money. United Commercial Bank's ability to repay its TARP money is now uncertain, making it the largest of 65 California-based banks that received taxpayer-financed TARP funds to run into serious financial trouble. To qualify for TARP money, United Commercial and other banks had to be deemed financially sound by federal officials, who required that the money be used to expand lending and give mortgage relief to troubled U.S. homeowners.
OTHER STORIES:
Solo hybrid drivers may lose carpool lane privileges - (www.latimes.com) The days may be numbered for hybrid car owners who have enjoyed traveling solo in California's carpool lanes.
Los Angeles City Hall becomes tech giants' battlefield - (www.latimes.com) As Google and Microsoft battle for dominance in technology, a skirmish in Los Angeles City Hall is offering a rare public glimpse into a...
What if everyone in the world wanted a 1oz Gold Coin? - (depressionw.tv)
World Bank: US Should Not Take Dollar's Place for Granted - (www.bloomberg.com)
Glaxo, Brazil Sign $1 Billion Vaccine Deal: Report - (www.cnbc.com)
Are you willing to pay higher taxes to be 'fiscally responsible'? - (www.latimes.com)
Rush Limbaugh and Drew Barrymore take Jay Leno's Green Car Challenge - (www.latimes.com)
Kraft Set to Launch Hostile Cadbury Bid - (www.cnbc.com)
Fed’s Alvarez Threatens Congress With Higher Rates if Fed is Audited - (www.bloomberg.com)
A Rich Uncle (Sam) is Picking Up the Borrowing Slack - (www.nytimes.com)
Australia's Myer to Raise up to $2 Billion in IPO - (www.cnbc.com)
China Unicom Buys Back Stake in SKT for $1.3 Billion - (www.cnbc.com)
Merkel Wins German Vote, on Track for Center-Right - (www.cnbc.com)
Week Ahead: Bulls and Bears Fight Over October - (www.cnbc.com)
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