Taxpayers Pay for Peanuts

November 24, 2015 at 10:35 am

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A peanut glut "threatening to hand American taxpayers a near $2-billion bailout bill over the next three years" is the subject of a dispatch by Reuters:

U.S. farmers look set to keep producing more peanuts than Americans can consume, leaving taxpayers on the hook.

First, the U.S. Department of Agriculture (USDA) is paying farmers most of the difference between the "reference price" of $535 per ton (26.75 cents per lb) and market prices, now below $400 per ton. A Nov. 18 report to Congress estimates such payments this year for peanuts exceed those for corn and soybeans by more than $100 per acre.

Secondly, government loan guarantees mean once prices fall below levels used to value their crops as collateral, farmers have an incentive to default on the loans and hand over the peanuts to the USDA rather than sell them to make the payments.

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In Defense of Theranos

November 23, 2015 at 10:59 am

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Micah Rosenbloom writes at TechCrunch:

Theranos' largest competitors, Quest Laboratories and LabCorp have combined revenues of over $13B per year. If all Theranos ever did was make that industry more convenient, faster, and prettier using standard tools, isn't that impressive enough on its own?

Asked another way, how is offering accurate, more convenient tests, at a lower cost, using industry-leading technology—while simultaneously spending tens of millions on R&D that could further reduce the cost, complexity, and pain of blood testing—a bad thing? That's a vision I'd invest in if given the chance (at the right valuation of course!)...

Theranos has been accused of a bait and switch because they use a competitor's lab equipment to run most of their tests. Is it a moral failing that Netflix is powered by Amazon Web Services? Netflix has figured out how to add value on the back of a direct competitor's infrastructure. Does this invalidate Netflix's business model?

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Kozinski on Criminal Justice

November 20, 2015 at 11:37 am

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At the Wall Street Journal's law blog, my former New York Sun colleague Jacob Gershman has coverage of Judge Alex Kozinski's highly newsworthy talk earlier this week at the Cato Institute.

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United Health Care ObamaCare

November 19, 2015 at 3:47 pm

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United Health Care may stop offering insurance on the ObamaCare exchanges, USA Today reports:

The insurer's withdrawal from the Obamacare exchanges would force some 540,000 Americans to find coverage from another provider.
UnitedHealth downgraded its earnings forecast, bemoaning low growth projections for Obamacare enrollment and blaming the federal health care law for giving individuals too much flexibility to change plans....The average premium for medium-benefit plans offered to 40-year-old non-smokers is set to rise 10.1% in 2016, according to the Kaiser Family Foundation.

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Why Presidential Candidates From Both Parties Are Wrong About Community Banks

November 17, 2015 at 9:41 pm

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Here's a rare presidential campaign issue that Ted Cruz, Jeb Bush, Marco Rubio, Carly Fiorina, Bernie Sanders, and Hillary Clinton all are on the same side of: they claim to prefer cute little "community banks" instead of Wall Street behemoths.

And, as can sometimes be the case in those unusual instances when there's a bipartisan consensus on an issue, the politicians are wrong.

Please read more in my column this week at (here), the New York Sun (here), Reason (here), and Newsmax (here).

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Sumner on Scandinavia

November 12, 2015 at 3:20 pm

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Scott Sumner has an interesting post about the "Scandinavian" economic model touted by Bernie Sanders. "The only Scandinavian country with an estate or inheritance tax is Denmark." Also, "the Nordic countries are really big on privatization and deregulation. How often do you hear progressives calling for those things? When was the last time you heard a progressive advocating Sweden's 100% nationwide school voucher program?" And "the Scandinavian countries have far lower corporate tax rates than America."

As usual, the American left wants to import the left-wing policies of Europe but not the more free-market-oriented policies.

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The Goldman Fed

November 11, 2015 at 10:59 am

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From a New York Times dispatch about the appointment of Neel Kashkari as president of the Federal Reserve Bank of Minneapolis:

Mr. Kashkari is the third person this year appointed to lead a regional reserve bank, and all three of the new presidents previously worked at Goldman Sachs. The Philadelphia Fed in March appointed Patrick Harker, a former Goldman trustee, as its new president. The Dallas Fed in August selected Robert S. Kaplan, a former Goldman vice chairman.

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Questions for the Republican Candidates

November 10, 2015 at 2:45 pm

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Questions for the Republican presidential candidates are the topic of my column this week in advance of tonight's debate. Please check the column out at the New York Sun (here), Reason (here), and Newsmax (here).

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Government Inefficiency

November 9, 2015 at 10:36 am

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The Washington Post has a good example of government inefficiency:

Heaving under mountains of paperwork, the government has spent more than $1 billion trying to replace its antiquated approach to managing immigration with a system of digitized records, online applications and a full suite of nearly 100 electronic forms.

A decade in, all that officials have to show for the effort is a single form that's now available for online applications and a single type of fee that immigrants pay electronically. The 94 other forms can be filed only with paper.

This project, run by U.S. Citizenship and Immigration Services, was originally supposed to cost a half-billion dollars and be finished in 2013. Instead, it's now projected to reach up to $3.1 billion and be done nearly four years from now

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Paid Patriotism

November 5, 2015 at 2:12 pm

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The Pentagon is paying professional sports teams for those displays thanking the troops, NPR reports:

taxpayers paid $49,000 to the Milwaukee Brewers to allow the Wisconsin Army National Guard to sponsor the Sunday singing of "God Bless America." In another contract, the New York Jets were paid $20,000 to "recognize one to two New Jersey Army National Guard soldiers as hometown heroes."

Maybe this is a better use of recruiting money than spending on television ads. But you'd think the teams might be willing to do it for free, at least after September 11, 2001.

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The Samuel Adams of Iraq

November 3, 2015 at 2:22 pm

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Ahmad Chalabi, who played an important role in liberating Iraq from the dictatorship of Saddam Hussein, died this week. I wrote an article for the Daily News memorializing him that you can read here.

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Guess Who Is Running on Deregulation and Tax Simplification?

November 3, 2015 at 2:19 pm

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Guess which presidential candidate, while campaigning in New Hampshire last week, said this?

"I want to be the small business president...They represent American ingenuity and hard work. But we're slipping. A recent global study showed that where we used to be one or two in the world in creating small businesses, we're now 46. It should not take longer to start a business in the United States than it takes to start one inFrance!"

The candidate continued, "I want to do everything I can to help make it easier for people to start businesses, cut that red tape....and really take a hard look at licensing requirements from state to state. There ought to be a sensible way to harmonize those, so that it's not so difficult in some states to start a businesses and much easier in the state next door to start the very same business."

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Gigot Gets the Last Word

October 29, 2015 at 10:58 am

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Paul Gigot gets the last word — and the better of the exchange — in this Bloomberg article:

Manhattan U.S. Attorney Preet Bharara, who led the charge for the government, remains sanguine. He said Tuesday in a public exchange with the writer Tom Wolfe at the 92nd Street Y in New York that the court ruling wouldn't affect the vast majority of cases.

"If Congress tomorrow adopted the Wall Street Journal editorial page's view that all insider trading is awesome, which appears to be their view, then we wouldn't prosecute those cases," Bharara said. Until then, he added, "you continue to bring cases which you think are appropriate."

Paul Gigot, the newspaper's editorial page editor, responded that the "Court of Appeals didn't overturn our views on insider trading. It overturned Mr. Bharara's."

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Further on the Debate

October 29, 2015 at 12:05 am

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Ted Cruz was terrific, I thought, both at fighting back against the ridiculous hostile gotcha questions posed by the CNBC moderators, and in talking about his support for a commission "to get back to rules-based monetary policy." Said Cruz, "We need sound money...ideally tied to gold." Mr. Cruz also had a great pre-planned line about how the Democratic debate sounded like a debate "between the Bolsheviks and the Mensheviks."

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GOP Gets the JFK, Conservative Spirit

October 28, 2015 at 11:17 pm

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Here's a bit of good news from the Republican presidential race: at least two of the candidates are talking about President Kennedy as a model.

Senator Cruz, unveiling his plan for a 10 percent flat individual income tax — and no payroll tax — in a Wall Street Journal op-ed piece, writes, "As President Reagan showed—and before him, President Kennedy in the 1960s (average annual growth of 5.3%) and Presidents Harding and Coolidge in the 1920s (4.7% growth)—tax reform is a powerful lever for spurring economic expansion."

Governor Jindal, in last night's debate, said:

I want to quote to you a president. A previous president said this. He said, The problem is, is that tax rates are too high. Government income/revenues are too low. He said, paradoxically, lowering tax rates now is the best way to produce higher government revenues later.

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