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Taxing the Rich, the Costs of Ethanol and the Fed's Loose Money Policy

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Taxing the Rich, the Costs of Ethanol and the Fed's Loose Money Policy

Joe “The Plumber” Wurzelbacher becomes a national campaign personality.

The Federal Reserve lowers a key interest rate in hopes of reviving investment.

Environmentalists debate the impact of using corn-based ethanol for fuel.

More headlines: listen to the LibertyWeek podcast.

1. POLITICS

Joe “The Plumber” Wurzelbacher becomes a national campaign personality.

CEI Expert Available to Comment: Center for Entrepreneurship Director John Berlau on how Joe the Plumber has helped change assumptions about who constitutes “the rich” in American society:

“…according to the authors [of ‘The Millionaire Next Door,’] many of the millionaires’ businesses ‘could be classified as dull/normal. [They] are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.’ It's this not-so-exclusive club that Wurzelbacher wants to join by owning his own plumbing business. He may not make it to profits of $250,000 a year – the threshold at which Sen. Obama says his tax hikes for families will begin – but doesn't want the tax system to penalize him if he does. Given the fact that unlike Wall Street titans, Wurzelbacher and others won't get a taxpayer bailout if they fail, they probably want to put every penny they can into expanding their businesses further.”

 

2. BUSINESS

The Federal Reserve lowers a key interest rate in hopes of reviving investment.  

CEI Expert Available to Comment: Special Projects Counsel Hans Bader on the problems with the Fed's "loose money" policy:

“Stanford’s Ronald McKinnon argues against the Federal Reserve’s policy of cutting interest rates to almost nothing, and debasing our currency, in a short-term effort to pump up consumer spending by favoring debtors. Instead, he argues, ‘there is a strong case for raising the fed funds rate as much as is necessary to strengthen the dollar in the foreign exchanges’ to prevent the flight of capital abroad. International investors have denounced the Fed’s easy money policy more pungently, saying it will prove very costly to America in the long run.”

 

3. ENVIRONMENT

Environmentalists debate the impact of using corn-based ethanol for fuel.

CEI Expert Available to Comment: Adjunct Scholar Dennis Avery on the high costs of ethanol production:

“How much longer will policy makers continue to pay farmers and rural bankers to invest in biofuel programs that create food inflation, aggravate fuel costs, and increase greenhouse gas emissions? How many farmers are still buying land at inflated prices, clearing woodlots and draining wetlands to plant more corn? Waiting will only make everything worse. The biofuels mandates must be repealed, and the sooner the better.”

 

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