Richard J Grant

Published in The Tennessean , Sunday, May 29, 2011 by Richard J. Grant History is easier to understand when we remember that the interests of individual politicians regularly differ from those of their constituents. This helps explain the recent grandstanding by Senate Democrats when they summoned oil-company executives to act as political punching bags to help distract attention from the Obama administration's abysmal record on energy supply. This show trial was the centerpiece for hearings in support of the Democrats' “Close Big Oil Tax Loopholes Act,” which purports to eliminate oil-industry subsidies. The show-trial format fit well with the political exploitation of public distress over rising gasoline and oil prices. The Senators made wild and misleading insinuations in the form of marketable soundbites while the oil executives had to respond in the longer paragraphs that are usually needed to explain reality. Passive listeners were led to believe that oil companies were m...

Published in The Tennessean , Sunday, May 22, 2011 by Richard J. Grant The Federal Reserve Board has been trying to raise prices, particularly house prices. On average, it has more than succeeded: Consumer Price Index figures for April show an annual increase of 3.2 percent in consumer-goods prices. In the past, the Fed has expressed a belief that 2 percent price inflation would be about right to promote growth. In contrast to the rising CPI, home prices seem not yet to have bottomed out nationally. The Fed has purchased huge blocks of mortgage-backed securities, and has been creating money to buy Treasury securities in unprecedentedly large quantities. This has kept interest rates artificially low and has undoubtedly slowed the adjustment of prices in the property market. Expansions in the money supply cause prices generally to be higher than they would have been, but prices are not all affected equally. Some prices rise faster than the average while others rise more slowly or, like p...

Published in The Tennessean , Sunday, May 15, 2011 by Richard J. Grant Over the years from 1792 to 1930, the federal government ran surpluses twice as often as it ran deficits. But in the 80 years since 1930, the federal government has run annual deficits seven times more often than it has run surpluses. It has been 10 years since the last surplus. During the first hundred years of the Republic, it was not at all unusual to see significant reductions in the national debt. Debt was always recognized as a useful tool in the pursuit of national interests, but that recognition was balanced by a strong ethical imperative to avoid deficits and to pay down the national debt whenever possible. The Great Depression marked a turning point in this ethical attitude. In 1932, when government revenue fell to half its 1930 levels and spending rose by more than 40 percent, President Herbert Hoover stumbled through an election-year with a deficit that was almost 58 percent of the budget. His opponent, ...

A shortened version was published in The Tennessean , Sunday, May 8, 2011 by Richard J. Grant Canada's forty-year flirtation with socialized medicine has created the impression in the minds of many Americans that Canada is an example of a socialist country. But one sector does not a country make. By recent measures of economic freedom, Canada ranks as high as or higher than the United States. The “Economic Freedom of the World” report, published in 2010 by the Fraser Institute and the Cato Institute, gave the US and Canada virtually equal overall rankings. The more recent 2011 “Index of Economic Freedom,” published by The Wall Street Journal and the Heritage Foundation, ranks Canada three places higher than the US. If Canada is less free than the US in its health-care sector, then it more than makes up for it with greater freedom in other areas. But even in the health-care sector, the Canadian government does not interfere with everything and the US government does not interfere w...

Published in The Tennessean , Sunday, May 1, 2011 by Richard J. Grant The “CAP Act of 2011,” as championed by Sen. Bob Corker, R-Tenn., would place a cap on total federal government spending and gradually reduce the maximum level to 20 percent of GDP over 10 years. Placing a legislated cap on spending does not bind future congresses, but it would give them guidance and would provide a benchmark that future taxpayers could easily monitor. The purpose of a cap is to create an upper limit. It is a ceiling, not a floor. It also leaves open the question of what will be the composition of the spending that does occur. We still need to make specific choices about specific spending programs and specific cuts. That is the purpose of the budget. President Barack Obama has presented two budgets already this year, neither of which would comply with Corker's spending cap. Obama's first budget would actually have kept spending close to present levels and the second would not even bring spend...