- There's no such thing as a free lunch...but, at least for now, there's such a thing as free money. Today's negative interest rates are truly mind-bending. If you loan money to the Federal government for 5, 7, 10, or even 20 years, you will actually get paid less in interest than you will lose in buying power over that same time. In other words, it's a negative "real" rate of interest. That's exceptional...people around the world remain so fearful of the future that they're willing to pay the Federal government of the United States for the "privilege" of letting the government borrow their money. This behavior is clinically insane. People are making the deliberate choice to lose money at a small rate for a very long time, rather than risk it on the backbone of American business. And it's making the stock market behave in very odd ways. Now, it should be obvious that something like this (which cannot go on forever) must eventually stop. But we don't know when, and as long as it goes on, the government here has a huge incentive to keep over-spending.
- Human psychology is a very strange thing. None of us (excluding the truly sociopathic) would ever choose to kill someone else by, say, stabbing them. And it's nearly as universal that, if given the opportunity to save someone else's life at no physical risk to ourselves -- by, say, pulling the plug on a machine we know is about to electrocute someone -- we would do it. But when a problem seems big, or when it seems like someone else could do something, it's easy for us to fall victim to the Kitty Genovese complex...we assume that someone else will do the right thing. As human beings, we should be ashamed of ourselves for failing to use the tools that could help us prevent famines. We have them...we just aren't using them.
- Iowa bids farewell to a very effective state auditor. David Vaudt, during his time in office, has been a great example of a "good government" Republican. That's exactly the model the party should be following more often. There's been endless talk about the GOP "autopsy" report on the 2012 elections. And there are definitely specific things that can be done to make the party perform better that are outlined in the report. But, philosophically, the way ahead for the Republican Party that would be good for the country (and electorally successful for the party) is to go to the roots of advocating for good government where government is needed...and an enduring sense of reluctance to do anything it can't do right. There's a difference between being a "party of 'no'" just for the sake of saying "no", and being a party that says "we're not good enough to do this right" when that's the case. Humility is the characteristic that makes that second answer possible.
- High-risk mortgages...back again, by government request. We have to stop fooling ourselves that it's all going to be different this time.
- Detroit could find itself revived by a private developer. Watch carefully: Detroit isn't going to be the last major municipal government to go through a financial crisis.