Daily update for 02/27/09

The Competitive Enterprise Institute Daily Update

Friday, February 27, 2009 

Issues in the News

1. BUSINESS
In the ongoing mortgage bailout fiasco, the federal government is reportedly on the verge of owning 40 percent of Citigroup bank, which has already received $45 billion in taxpayer bailout.  (See story.)

CEI Expert Available to Comment: Center for Investors and Entrepreneurs Director John Berlau what went wrong with lenders, regulators, and borrowers and what should be done to actually fix some of the problems: on
“The main policy mistake we hear about in this case is the supposed lax regulation. The financial institutions making bad loans and buying and selling bad mortgage securities were doing so as a result of unfettered markets, so the argument goes. But active individual investors who follow the market regularly know this is far from the whole story.”

2. ENERGY
President Obama plans for a new energy tax in his budget, despite claiming in his address to Congress this week that families making under $250,00 would not face tax increases.

CEI Expert Available to Comment: Senior Fellow Iain Murray estimates that Obama’s cap-and-trade scheme for carbon emissions will sock it to American taxpayers:
“The current budget cap and trade program will cost each income quintile $510, $660, $870, $1125 and $1635 (in 2006 dollars, slightly more in nominal values) respectively. This is a significant offset to the $800 “tax cut” per worker.”

3. POLITICS
Watch CEI President Fred L. Smith, Jr. today on C-SPAN discussing “Bailing Out Big Business: Are We All Socialists Now?” at the Conservative Political Action Conference (CPAC).  
Watch C-SPAN at 9:20 a.m. ET  

“Markets have appeared less resilient and less disciplined than we had hoped—but not because of a laissez faire ideal. The troubles besetting America’s financial sector are best understood as a tragic example of the inevitable consequences of the “mixed economy”—an ungainly mix of government mandates, regulations, subsidies, private sector rent-seeking, and socialization of risk.” (Read the Full Commentary: Championing Economic Liberty in a Time of Crisis.)

Listen to LibertyWeek, the CEI weekly podcast, here.