Marketplace Scratch Pad

Morning Reading

Scott Jagow Jul 7, 2009

The entire media world seems to be focused on Michael Jackson’s funeral. CNN’s headline this morning — Michael Jackson will be at Staples Center. But there are other things to read:

At The New Republic, Norm Scheiber says bank lobbying groups are planning to roll out a “Harry and Louise” (the old health care ads) style ad campaign to fight bank regulation:

The ads will emphasize the intrusiveness of the proposal–of the government “telling you what you can and can’t buy,” according to the source. The hope is to run them sometime in July, when House Financial Services chairman Barney Frank plans to move the measure through his committee.

Investor’s Business Daily seizes on Vice President Biden’s remarks, which I posted yesterday. Biden was defending the stimulus package by saying everyone misread the economy. IBD says that’s not true:

Many voices — including ours — were raised in opposition to the stimulus when it was debated. We didn’t “misread” the economy. We knew from history that, left alone, it would get better without government meddling…

There are only two possible conclusions: One, the stimulus has been the most inept public waste of money in history. Or two, it was a cynical attempt by the Democrats to vastly expand the scope of government during a time of crisis. Or maybe it’s both.

NPR asks the question — Can Expanding Food Stamps Jolt The Economy?

“This injection of funds ends up being spent on food, and that has a multiplier effect through the economy,” explains Ray Hill, professor of finance and economics at Emory University. “As more people are employed in grocery stores, more people are employed to make the food, more people are employed to grow the food as a result of that stimulus.”

Most economists say every dollar spent on food will result in $1.50 to $2 in stimulus. The problem, Hill says, is that $20 billion is not enough.

“Increasing the amount of food stamps itself is not going to have a major effect on the economy. You get a good value for the money in the sense that each dollar is highly stimulative,” said Hill. “But it’s a drop in the bucket compared to the total size of the economy and the total employment in the United States.”

At Forbes, the “New Geographer” Joel Kotkin analyzes California’s plight in Who Killed the Electric Car? fashion. He lists five suspects in the murder of California’s economy.

California’s economy–once wondrously diverse with aerospace, high-tech, agriculture and international trade–has run aground. Burdened by taxes and ever-growing regulation, the state is routinely rated by executives as having among the worst business climates in the nation…

The last hope lies with those of us still enamored with California. We have allowed ourselves to be ruled by a motley alliance of self-righteous zealots, fools and cowards; now we must do something.

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