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Cato Dispatch for October 31, 2008

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(Links to outside sources were active as of the date of this dispatch; however, not all news sources maintain links to current stories indefinitely. Some links also may require registration.)

Cato Scholars Weigh in on the Future of the Economy

Writing in the Wall Street Journal, Alan Reynolds analyzes Barack Obama's spending proposals, adds them all up, and asks, "how's Obama going to raise $4.3 trillion?"  He writes, "The lavish spending policies of presidential candidate Barack Obama could cost $4.3 trillion over the next ten years. Where is he going to get that money?" Reynolds expands on his analysis in a recent podcast.

John McCain proposed a plan to spend $300 billion to buy "bad mortgages." Examining the proposal, Daniel J. Mitchell concludes, "Even if the myriad details were handled correctly, McCain's 'American Homeownership Resurgence Plan' would be a very costly and risky form of intervention....McCain's cure is worse than the disease."

Could there be a Democratic congressional super-majority in 2009? Richard Rahn lets us in on some interesting statistics when he reveals that stock prices increase dramatically more when Republicans control Congress than when Democrats hold a majority. "Over the last quarter of a century when the Republicans controlled both houses of Congress, the stock market rose by an average of about 20 percent per year. When the Democrats controlled both houses of Congress, the stock market only rose at an average annual rate of 6.9 percent for the Dow Jones and a tepid 5.1 percent for the Standard and Poor 500."

The presidential race is nearly over, and Cato scholars have been following the candidates' policy proposals from the beginning. For comprehensive analysis, don't miss Cato's election coverage.

Bail Out the U.S. Auto Industry?

Auto industry lobbyists are gathering in Washington, seeking money to bail out the struggling companies. Dan Mitchell joins a debate on NPR.org that discusses the implications of bailing out the automakers. Mitchell argues against another bailout, and in the middle of the debate, NPR held an online poll that showed that 68 percent of listeners agreed with him.

David Boaz weighs in on the most recent government spending measures to save American companies from bankruptcy.  "We've already decided to tax the prudent and thrifty to bail out the imprudent and irresponsible. Now the prudent may face a danger even worse than taxes: inflation that erodes their hard-earned savings."

Who is really to blame for the financial mess? Steve H. Hanke reveals who holds the weight of the responsibility.  "There's plenty of blame to go around, but the main culprit is the Fed."

For a complete look at Cato's coverage of the financial mess, check out Cato's Global Financial Crisis Page.

Cato around the World

With the economy trumping most political discussions, Justin Logan compares the presidential candidates' foreign policy proposals and Ted Galen Carpenter and Malou Innocent question John McCain's foreign policy judgment. "There is little doubt about McCain's lengthier foreign policy experience. But it is not at all apparent that his judgment is superior to Obama's. Indeed, the record indicates that McCain's own judgment is alarmingly bad."

Writing in The Washington Post, Visiting Fellow and Member of the South African Parliament Tony Leon takes us behind the scenes of African politics. 

Steve H. Hanke takes a look at another country's economy: Zimbabwe inflation hits 10.2 quadrillion percent.

Could tensions between China and Taiwan heat up again? Ted Galen Carpenter examines Taiwan's delicate détente in the Wall Street Journal Asia.

Chris Moody, editor, cmoody@cato.org