The Competitive Enterprise Institute Daily Update
Issues in the News
1. ECONOMICS
Officials and residents debate whether the federal government should subsidize rebuilding efforts in hurricane-prone coastal areas.
CEI Expert Available to Comment: Senior Fellow Eli Lehrer on the mess that the federal government has made of the flood insurance market:
“The federal government built levees that altered America’s natural landscape and thus increased flooding, discouraged market entry by failing to repeal a calamitously impractical flood insurance law, supported mapping and zoning efforts that exacerbated flooding problems, and created a flood insurance program that priced policies well below market levels. Flood insurance exists as it does because political institutions sought to “correct” a perceived market failure and thereby made the emergence of private insurance unlikely, if not impossible.”
2. ENVIRONMENT
A federal judge orders the Bush administration to issue a new report on the science of climate change.
CEI Expert Available to Comment: Senior Fellow Christopher C. Horner on the last such report to come out of the White House:
“The National Assessment is fatally flawed. It employs computer models that are proven to project climate less capably than a table of random numbers. Though the models also carry disclaimers admitting their futility at producing regional and even national results, the Assessment nonetheless purports that they detail dire calamities broken down with specificity even to the state level.”
3. BUSINESS
The Treasury Department proposes a $19 billion tax hike on credit unions.
CEI Expert Available to Comment: Senior Fellow Eli Lehrer on the importance of credit unions to the nation’s financial health:
“Quite simply, credit unions provide a vital balance wheel for America’s lending economy and a key source of financial liquidity. While they control only about six percent of all deposits, cannot lend out as great a percentage of assets as stockholder-owned banks, and face all sorts of limitations on whom they can serve, credit unions provide higher deposit-account rates and lower loan rates than banks. One very extensive 2002 Federal Reserve policy report finds a direct correlation between credit-union membership and the rates consumers get from all lenders. As America appears ready to undergo a credit crunch, credit unions can help soften the blow.”
Blog feature: For more news and analysis, updated throughout the day, visit CEI’s blog, Open Market.
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