The Media's Top 10 Economic Myths of 2008 (No.5)

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5. The economy has a fever and the only prescription is more bailouts.

Media myth: From the economic stimulus early in 2008 to the call for a Big Three auto bailout in December the media couldn't find a bailout it disliked.

Originally published by the Business & Media Institute

Bear Stearns, AIG, Fannie Mae and Freddie Mac. 2008 was the year of the government bailout and the news media supported such interventions time and time again.

One particularly vocal advocate for bailouts was CNBC's Jim Cramer who warned that without a financial bailout the U.S. could face a second Great Depression. He said the same thing months later about an auto industry rescue. Before AIG was given a loan package from the Federal Reserve, Cramer warned that the company absolutely "cannot fail."

When public opinion was turned against the $700-billion bailout CNN correspondent Carol Costello admitted that the network's experts were confused. Costello said, "I talked to our own polling experts and they are perplexed by the numbers" which showed a majority against the bailout.

The $25 billion housing bailout of Fannie Mae and Freddie Mac was also embraced by the media. "CBS Evening News" called the bill a "lifeline" for the government-sponsored enterprises, but correspondent Jim Axelrod didn't explain that the "unlimited capital from the government" would come from taxpayers.

But Jerry Bowyer, the chief economist for the Benchmark Financial Network, criticized the Fannie/Freddie bailout: "It's bad in the short run, unless you are either a highly paid Fannie executive or currently a staffer for any Democratic member of a Congressional Banking Oversight Committee, in other words, a future highly paid Fannie execute [sic]," Bowyer wrote. "In the long run, this will be a huge transfer of wealth to a corrupt bureaucratic and inefficient bureaucracy from the rest of us tax payers."

Bowyer and other free-market economists have criticized the many bailouts, but their perspective was rarely included in bailout stories.

Film of the Year No. 5

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5. The Orphanage

Laura grew up in an orphanage, but was later adopted. Years later, she and her husband Carlos buy the orphanage – which has since fallen into disrepair – and move in with their own adopted son, Tomas, intending to reopen it as a home for handicapped children. Before long, Tomas starts to communicate with an invisible new friend, who may be just a product of his young imagination, but could be something altogether more sinister...

The Orphanage is everything a horror film should be. Unlike most recent examples of the genre – which tend to rely almost exclusively on gore and extreme violence to unsettle the viewer – The Orphanage puts story and atmosphere first, scaring us with the unknown and the unseen, and connecting with the audience on a deeper, more psychological level. Ultimately, that makes it all the more terrifying.

Too often, films like this fall at the final hurdle, failing to deliver on the suspense they have built-up. Not so here: what makes The Orphanage transcend it genre is the knock-out blow it delivers in its final act, a brutal and unexpected twist that lingers in the mind long after the credits have rolled. Highly recommended.

Watch the trailer here

Blog Review 821

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An interesting thought to lead into the New Year. If only economists were as arrogant as everyone thinks economists already are.

Another one (and very much Deepak Lal's view, he who is one of our Fellows here), that governments are in essence glorified gangs of criminals.

And a cynical if true view of how philanthropy works out in practice.

The man who predicted the future of the American car industry.

Too much time on your hands? See if you can beat Netsmith's donation of 303 glasses of water to those who need it.

Another charitable effort that could use some help and attention. Time, money, even stocking fridges with beer......

And finally, we'd have gotten' away with this if it wasn't for those pesky students. 

On the second day of Christmas...

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My true love sent to me: two turtle doves. In the original it seems that the turtle doves represent the Old and New Testaments of the Bible.

Pigeon fanciers were outraged after HM Revenue & Customs (HMRC) left pigeon racing out of the official list of sports. They asked the Queen, who is patron of the Royal Pigeon Racing Association (RPRA), to get this ruling reversed, and organized an e-petition to Downing Street. Why so many ruffled feathers about something apparently so trivial?

Well, it's all about money. Premises used for 'sports' are exempt from the rates, a local-authority tax. Under MHRC proposals to introduce rates on sports clubs and village halls, groups can formally apply for dispensation from HMRC for 80% relief and then to their local authority for a 20% reduction. So pigeon fanciers faced paying rates on their sheds, though officially recognized sports such as yoga, arm-wrestling and trampolining are still exempt.

The government told the e-petitioning pigeon fanciers that decisions on which activities count as ‘sports’ were made by agreement of the sports councils, and it would be inappropriate for the government to intervene. Doesn't it all speak volumes about just how silly and bird-brained all these tax rules are?

The Media's Top 10 Economic Myths of 2008 (No.6)

NBC's Anne Thompson noted on the March 12 "Nightly News" that higher energy prices would be good for alternative forms of energy like solar and wind power, which can cost two to four times as much as coal and oil.

Two scientific studies have suggested clearing land to produce biofuel ingredients will actually contribute more to "global warming" than simply sticking with fossil fuels. The shocking part is that someone in the media actually reported it!

The findings "could force policymakers in the United States and Europe to reevaluate incentives they have adopted to spur production of ethanol-based fuels," The Washington Post's Juliet Eilperin reported February 8. "President Bush and many members of Congress have touted expanding biofuel use as an integral element of the nation's battle against climate change, but these studies suggest that this strategy will damage the planet rather than help protect it."

We're talking about big differences, too. One study out of Princeton found that "over 30 years, use of traditional corn-based ethanol would produce twice as much greenhouse gas emissions as regular gasoline" in part due to the removal of trees that help reduce carbon.

Researcher Tim Searchinger estimated "it would take 167 years before biofuels would stop contributing to climate change."

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6. Alternative energy: All gain, no pain

Media myth: According to journalists, the only way out of high gas prices and global warming are expensive, impractical "green" fuels.

Originally published by the Business & Media Institute

Rather than give an even-handed report on the oil supply situation, many journalists continued to push the "green" theme in 2008, calling alternative energies "a surefire way to cut fuel costs" and saying that a fuel other than gasoline would be "a welcome relief," despite the trillions of dollars and number of years that may take.

In June, CBS "Evening News" stacked a story against drilling on the very night a poll came out showing public support for increased drilling. Correspondent Bill Whitaker cited "bipartisan" opposition to offshore drilling "in California, which suffered a devastating oil spill from a rig off Santa Barbara in 1969." But he didn't balance his own story evenly with proponents and opponents; instead he promoted the "green" views of environmentalists and Gov. Arnold Schwarzenegger.

NBC "Nightly News" consulted CNBC's Erin Burnett on June 22. Burnett acknowledged the oil supply problem, saying "a lot of people want oil, and we don't seem to have enough." But she never mentioned increasing domestic supply by allowing offshore or ANWR oil exploration.

Instead, Burnett said, "We have to take our lumps, pay these prices and invest aggressively in alternative fuels that we can have right here in the United States of America. We get 15 percent of our power from right now from nuclear energy. We could dramatically increase that. We have other sources as well that are plentiful here at home like wind, like coal. We need to invest in those."

Burnett wasn't the first journalist to cheerlead for alternative energy development. "For anyone with a fresh idea, expensive oil is as good as a subsidy – with no political strings attached," Wired.com contributing editor Spencer Reiss wrote in December 2005. "And smile when you see a big black $3 or $4 out in front at the gas pump. Those innovators need all the encouragement they can get. Shale oil, uranium, sunlight – there's enough energy out there for a dozen planets."

Alternative forms of energy are less efficient and usually less attractive to an open market than oil and coal. [Click 'read more' to continue]

Film of the Year No. 6

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6. In Bruges

In a nutshell: Colin Farrell and Brendan Gleeson play a pair of hit-men, sent to lie low in Bruges by their gangster boss, Ralph Fiennes, after a job goes horribly wrong. Gleeson enjoys the sightseeing, Farrell gets involved with a girl, the pair hang out with an unpleasant midget – and then Fiennes arrives in town, triggering the film’s climactic showdown.

Assuming you take your humour pitch-black, In Bruges is hilarious. It is also thoughtful, moving (on occasion) and (once things get going) exciting to boot. Some people won’t like it, and a few may even be offended. With a peculiar plot, no real hero, and lashings of foul language, In Bruges is clearly catering to a particular audience. But if – like Cinesmith – you like that sort of thing, you’re sure to enjoy In Bruges. It is without doubt the best black comedy of the year.

Watch the trailer here

A seasonal tale

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Every few years, sometimes seven, sometimes nine, the dark wind would blow through the forest causing all work to stop.  The people cursed the wind, but there was nothing they could do.  Then one day Greeno showed young Gordo a barrel in the cellar; it was full of golden dust.  The two boys decided they would face the fury of the dark wind when next it came, and hurl handfuls of the golden dust into its path.

Bravely the two boys stood their ground as the wind shrieked towards them.  They threw handfuls of dust in front of it, and watched as the evil wind snarled, withered, and dissipated into the forest.  People hailed the boys as heroes, but when the dark wind blew again a few years later, it was more powerful.  The boys again stood firm, and though it took more dust, once again the wind was dispersed.

The third time it came it took all their courage to withstand it as it raged against them.  Gordo asked Greeno why the dust was less effective, and was told that with so much of it now scattered through the forest, it had lost much of its value.  The boys managed to disperse the dark wind, though, and work continued in the forest.  Praises were heaped upon them, and Gordo even had "slayer of the dark wind" burned onto his belt.

When the wind came the next time, nothing could withstand it.  It was as if each victory over it had only added to its strength next time.  Greeno and Gordo shrugged helplessly as it laughed at the meagre handful of dust thrown at it, contemptuously tossing it aside.  The dark wind raged unchecked through the forest, stripping down leaves and trees, and all work stopped.  Greeno and Gordo were cast out amid lamentation, and the dark wind ruled.

Meanwhile, deeper into the forest, a young Austrian boy had an idea…

Blog Review 820

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Netsmith is browsing and sluicing with the best of you today, as Netsmith hopes that you are. So nothing too serious to draw your attention to today.

Just a little appropriate piece of cynicism with which to view the political process.

The truth about the UK economy finally revealed.

Bravo and thrice Bravo! to some of our Australian friends.

No bravos for Chryselr, if this is the first sign of how they spend the bailout money.

The origin of the phrase "Yes, Virginia, there really is a Santa Claus".

An alternative reading of the way to celebrate the day.

And finally, Netsmith has it on good authority that today is all about a Jewish lad made good, so why not Jewish jokes (the ones by, not about, that is, the ones that are actually funny) for the day.

On the first day of Christmas...

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My true love sent to me: a partridge in a pear tree. In the original song it seems that 'my true love' is God, that the partridge symbolizes Christ, and the pear tree represents the Cross. Well, maybe.

But in Britain, until last year, if you wanted to deal in game - not just partridges but pheasants, hares, grouse, moor game, woodcock, deer, or rabbits, you needed a licence from the local authority under section 18 of the 1831 Game Act (plus an excise licence from the Post Office under section 14 of the 1860 Game Licences Act). The 1831 legislation laid down strict rules on when game could be sold - an attempt to ensure that breeding cycles were not disrupted. In other words, the law has only just caught up with refrigeration.