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OpenMarket: Subsidies and Bailouts

  • Harry Potter and the City Council Chambers

    January 27, 2017

    Our friends at the MacIver Institute in Wisconsin have a new video out on local government budgets and the temptation to spend taxpayer money on questionable “economic development” projects and tourist events like the town of Edgerton’s Harry Potter Festival.

    In the end the town Edgerton declined to spend $200,000 to pay for amenities for the festival, and the organizers were free to continue hosting on their own dime.

  • Congress Needs to Fix America's Broken Financial System

    December 19, 2016

    Whole forests have been cut down to print the books written about the financial crisis of 2007/8 and America’s response to it. Far fewer have been written on what’s wrong with the financial system now. Yet there’s a lot wrong with it. Despite historically low interest rates, banks aren’t lending to businesses or individuals, smaller and community banks have had to close or merge, low-income customers have seen free checking accounts disappear and their fees rise. The financial system is dysfunctional and not fit for purpose.

    Most of the blame for this can be laid directly at the feet of the Dodd-Frank Act, passed in 2010 supposedly to stop another financial crisis happening by reining in the big banks with regulatory compliance. Yet the effect of the law has been to strengthen the position of the Wall Street banks most at fault for the crisis, while punishing the Main Street...

  • Treasury Nominee Mnuchin Promising on Volcker Rule and Fannie and Freddie

    December 1, 2016

    Steven Mnuchin would bring to the Treasury Department valuable experience managing entrepreneurial ventures and company turnarounds. He has expressed some encouraging sentiments on housing policy and the regulatory burden on Main Street. CEI looks forward to a comprehensive confirmation hearing at which Mnuchin can share...
  • Obamacare Policies Are Costly and Unpopular

    November 8, 2016

    Obamacare policies are unpopular, and people often dump them months later. That’s John Graham’s conclusion at the National Center for Policy Analysis’s Health Policy Blog. Taxpayers pay billions of dollars a year subsidizing policies on Obamacare’s health insurance exchanges, including an estimated $75 billion in subsidies for 2017. Yet the Obamacare exchanges are providing little lasting coverage:

    There is a significant discrepancy between the four million Obamacare beneficiaries estimated by the NHIS and estimates produced by the U.S. Department of Health & Human Services and the Congressional Budget Office, which estimate about 11 million...

  • Obamacare Increases Premiums, Reduces Employment

    October 28, 2016

    Health care insurance premiums will increase significantly next year as a result of the Affordable Care Act, and many consumers will be left with access to only a single insurance provider, according to administration officials. Arizona will see the biggest spike in prices (a whopping 116 percent), while Oklahoma will see a spike of 69 percent and Tennessee, Minnesota, and Alabama will see spikes of around 60 percent. The national average will be about 25 percent, the administration says.

    Columnist Mary Katharine Ham wrote recently about how “My Defective Obamacare Health Insurance Product Just Blew Up.” Last year, her insurance plan’s cost went...

  • Elon Musk Angry at Having to Compete for Taxpayer Handouts

    August 8, 2016

    Rent seeking” occurs when companies secure government benefits for actions that do not otherwise create wealth.

    An example of rent seeking is California’s subsidy program for zero emissions vehicles (ZEVs)—primarily electric vehicles. Under the state’s ZEV credit program, automakers...

  • Export-Import Bank Drama Continues

    June 13, 2016

    The Senate’s main business right now is the annual Defense Appropriations bill. The Export-Import Bank, or Ex-Im for short, might become part of that bill. Ex-Im caused one of the most contentious political fights in recent years. While the fight seemed over when Ex-Im re-opened last December after a five-month shutdown, there is still one more bit of drama to be resolved. That might happen this week.

    Ex-Im is currently unable to make...

  • House Plan to Replace Dodd-Frank Provides Long-Needed Alternative

    June 10, 2016

    On Wednesday, House Financial Services Committee Chairman Jeb Hensarling announced the main features of his comprehensive plan to replace Dodd-Frank, the flawed response to the financial crisis. Overall, the plan, called the Financial CHOICE Act, contains many features CEI has long advocated, together with some new approaches that look promising. There are one or two concerns from CEI’s free market perspective, but overall the plan provides the comprehensive alternative that provides the basis for debate as the initiative moves forward.

    The plan comprises seven sections that would serve as titles for a bill. It is worth looking at each in turn.

    Section One deals with capital controls on banks, which have tightened as a result of Dodd-Frank...

  • Omnibus: No Financial Reg Relief, Dangerous GSE Provision, But a Little CFPB Sunshine

    December 16, 2015

    My Competitive Enterprise Institute colleagues and I have made the case for members of Congress to use the omnibus spending bill as an exercise of its “power of the purse” to hold the Obama administration accountable. Unfortunately, negotiators in Congressional leadership opened that purse way too soon and way too wide to give President Obama nearly everything in terms of the spending he wanted while inexplicably leaving out regulatory relief measures that members of both parties were clamoring for in the thousand-plus page omnibus bill (read it here) to be voted on later this week.

    While there were a couple good measures like lifting the oil export ban and repealing the expensive and...

  • Freddie Mac's Loss Shows Need to Protect Taxpayers from GSE Raids

    November 4, 2015

    I wish baseball great Yogi Berra were still here—upon the release of Freddie Mac’s new quarterly report showing a sudden Q3 loss—so he could offer his famous Yogism “it’s déjà vu all over again.” After seemingly smooth sailing under which Freddie and its sister Fannie Mae turned profits over the last couple years, this net loss of $475 million raises the specter of yet another government bailout.

    Fannie Mae and Freddie Mac, the two government-sponsored enterprises (GSEs) that many observers—from American Enterprise Institute scholar Peter Wallison to New York Times business...


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