That seems to be the opinion of Neil Barofsky, the special inspector general of TARP.  According to a report released yesterday,

The government's bailout of financial institutions deemed "too big to fail" has created a risk that the United States could face a worse fiscal meltdown in the future, an independent watchdog assigned to review the program told Congress on Sunday.

The Troubled Assets Relief Program, known as TARP, has not addressed the problems that led to the last crisis and in some case those problems have festered and are a bigger threat than before, warned Neil Barofsky, the special inspector general at the Treasury Department.

"Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car," Barofsky wrote.

Barofsky wrote the $700 billion financial bailout has encouraged more risk-taking because bank executives, who are still receiving massive bonuses, figure the government will come to the rescue the next time they steer their ships nearly aground.

No one should be surprised.

That depends on your criterion for good stimulus. 

If the only requirement is that the government write checks to people who are nominally employed, then building high-speed rail is great - but so is paying people to dig ditches and fill them up.

If the requirement is also that stimulus projects pass a standard cost-benefit test, then high-speed rail does not appear to measure up:

In the face of high energy prices and concerns about global warming, environmentalists and planners offer high-speed rail as an environmentally friendly alternative to driving and air travel. California, Florida, the Midwest, and other parts of the country are actively considering specific high-speed rail plans.

Close scrutiny of these plans reveals that they do not live up to the hype. As attractive as 110-to 220-mile-per-hour trains might sound, even the most optimistic forecasts predict they will take few cars off the road. At best, they will replace for profit private commuter airlines with heavily subsidized public rail systems that are likely to require continued subsidies far into the future.

Nor are high-speed rail lines particularly environmentally friendly. Planners have predicted that a proposed line in Florida would use more energy and emit more of some pollutants than all of the cars it would take off the road. California planners forecast that high-speed rail would reduce pollution and greenhouse gas emissions by a mere 0.7 to 1.5 percent—but only if ridership reached the high end of projected levels. Lower ridership would nullify energy savings and pollution reductions.

I have nothing against government infrastructure spending in principle.  But since interest groups like construction companies and unions have a strong incentive to oversell the benefits of these projects, while the green lobby has a religious hatred of cars, we should not be surprised if dispassionate analyses finds that the cost-benefit case for these projects is lacking.

Listen to a podcast of NPR's David Kestenbaum interviewing yours truly for Planet Money.  Here's the summary:

Fourteen states have adopted medical marijuana laws. We talk to Harvard economist, Jeffrey Miron, about what happens when drugs move from the black market to the open market. Do they get 100 times cheaper? Or instead, more expensive? Miron talks about the economics of prohibition, and reveals his drug of choice (which is legal) and one he would like to try (which is not).

The Obama administration moved vigorously on two fronts Friday to promote nuclear power, proposing to triple federal loan guarantees for new projects and appointing a high-level panel to study what to do with nuclear waste.

One more example of picking winners and losers among industries; hardly government's strong suit.

Plus, the U.S. already subsidizes nuclear energy via the Price-Anderson Act of 1957, which limits the liability of the nuclear power industry in the case of accidents.

This subsidy means the true costs of nuclear power are much higher than they appear.  Although nuclear produces fewer greenhouse emissions than burning fossil fuel, it is probably not efficient even assuming a large negative effct from emissions.

The pigs were in the 7-11 nearby, feasting from the trough.

Considerable discussion since Scott Brown's victory in Massachusetts has suggested that Obama might follow Bill Clinton's path: after governing from the left and being rebuked by the voters, he will moderate his message, reconnect with indpendents, and enjoy substantial two-term popularity.

After watching the SOTU address, I do not see that happening.  For whatever reasons, Obama seems more fundamentally tied to the left than Clinton.  He continues to push an agenda that independents do not share, and he castigates those who disagree with him as selfish, mean-spirited, or partisan.  This is not the way to win over moderates.

Obama's presidency is headed for failure unless he abandons the far-left agenda.

President Barack Obama intends to propose a three-year freeze in spending that accounts for one-sixth of the federal budget—a move meant to quell rising voter concern over the deficit but whose practical impact will be muted.

To attack the $1.4 trillion deficit, the White House will propose a three-year freeze on discretionary spending unrelated to the military, veterans, homeland security and international affairs, according to senior administration officials. Also untouched are big entitlement programs such as Social Security and Medicare.

Is this proposal a step in the right direction?  Yes, as far as it goes.

But it's a baby step: only $250 billion saved over the coming decade.  To make a real difference, cuts must focus on national defense, social security, and health care.  These three are the largest components of the budget, and health care in particular is growing rapidly.  Unless budget cuts tackle these items, they will have only minor impact.

In addition, most of the affected programs should actually be zeroed out, not just frozen at current levels; that would be a real start on fiscal responsibility.

Still, any restraint in spending is welcome.  We will see if President Obama wields his veto pen if (when) Congress does not play along.

1. Abandon Obamacare

2. Forget Cap and Trade

3. Reject the Card Check Bill

4. Withdraw from Iraq and Afghanistan

4. Legalize Drugs

5. Scrap the Tax Code and replace with a flat tax.

6. Expand free trade and immigration.

7. Stop the bailouts

8. Cut spending

9. Cut spending

10. Cut spending

Really:

Representative Barney Frank said Friday that the House Financial Services Committee, which he leads, would push to replace Fannie Mae and Freddie Mac, seized by regulators almost 17 months ago, with a different model for mortgage financing.

“The committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance,” Mr. Frank, a Massachusetts Democrat, said at a hearing in Washington, according to Bloomberg News. “That’s the approach, rather than a piecemeal one.”

Of course, Frank has not explained his "whole new system of housing finance."

Grab your wallet and head for the hills.

Yes.

You might be suprised by that answer. To be clear, I think the Fed has erred tremendously during Ben's first term, both by supporting the bailouts and by expanding the Fed's actions beyond standard open market operations (e.g., buying up mortgage-backed securities).  In my utopia, the Fed would not exist at all.

But we do not live in that utopia (yet).  If Ben is not confirmed, we will stil have a Fed, and someone will be chairman.  So the following points argue in favor of confirmation:

1. Hindsight is easier than foresight.  The Fed had to act in real time. Many of Ben's current critics supported the Fed's actions as they occurred, even if they disagree now.  And macroeconomists as a group believe Ben has done a good job.

2. Ben took the actions he did because he was convinced they were right for the economy.  He may have been mistaken, but his intentions were always benevolent.

3. Most distinguished candidates to replace him will be horrified if he is not confirmed.  So, his successor may be far less talented.

4. Ben is being made a scapegoat (perhaps by politicos within the White House), to soothe populist rage.

5. Stability in policy is important, even if that policy is not perfect.  If Ben is not confirmed, uncertainty about monetary policy increases dramatically.

So I endorse Ben for a second term, without reservation.

This story was written by a staff writer for the Washington Post who ended up on jury duty:

Last week I was a juror in the trial of a man accused of selling a $10 bag of heroin to an undercover police officer. At the end of the two days of testimony, I concluded that the defendant was guilty beyond a reasonable doubt. I also concluded that he should be acquitted.

You can read the whole story here; the bottom line is that police fabricated evidence to make their case stronger, and the jury acquited.   The writer's key insight:

I believe they had the right guy, too. But the willingness to cheat, I think, is a poisonous corruption of a system designed to protect the innocent at the risk of occasionally letting the guilty walk free. It's a good system, fundamental to freedom. I think a police officer willing to cheat is more dangerous than a two-bit drug peddler.

Darren Pollard gets verbally aggressive with some pigs. He displays a bad attitude, and is impolite. But when gangsters intrude into your yard and try to intimidate you, do they not deserve a bit of a harsh verbal correcting? Wouldn't you still protest even if the intruders weren't jackbooted racketeers?

Sweeping aside a century-old understanding and overruling two important precedents, a bitterly divided Supreme Court on Thursday ruled that the government may not ban political spending by corporations in candidate elections.

The ruling was a vindication, the majority said, of the First Amendment’s most basic free speech principle — that the government has no business regulating political speech.

 
So, the Court's view is that campaign finance regulation (at least the part addressed in yesterday's decision) is not constitutional. I am not a lawyer, but that view sounds right to me.  Let's put aside the constitutional issue, however, and ask whether campaign finance regulation would be good policy if it were constitutional?

The standard argument for such regulation rests on four claims:

1. that spending by politicians affects their likelihood of election;

2. that contributions to political campaigns affect the policies a politician supports;

3. that these influences on political outcomes are undesirable;

4. and that regulation successfully limits money’s influence on these outcomes.

Claims 1 and 2 are oft-overstated, but they probably have some validity. 

Claim 3, however, is probably backwards. Money lines up on one side of an issue because a larger economic pie supports that side. Special interests do support bad policies, including corporate welfare, tariffs and quotas, agricultural subsidies, wasteful weapons programs, and pork pork-barrel spending, but money often causes better policies, not worse; free trade is an excellent example.

Claim 4 is even less convincing: politicians and special interests can circumvent most regulation.

So, campaign finance regulation's main goal is not compelling, and the regulation does not achieve that goal anyway.  Instead, the regulation protects incumbents and rewards politicians who exploit loopholes in the law.  The Court's decision is good economics, as well as good law.

Ellen Miller, co-founder of the Sunlight Foundation, has spent years arguing for rules to force more disclosure of how lobbyists and private interests shape public policy. Until recently, she herself registered as a lobbyist, too, publicly reporting her role in the group’s advocacy of even more reporting. Not anymore.

In light of strict new regulations imposed by Congress over the last two years, Ms. Miller joined a wave of policy advocates who are choosing not to declare themselves as lobbyists.

Read the rest here; it gets better.
 
Should Congress regulate lobbying? In my view, no.  Beyond the enforcement issue, such regulation is not only inconsistent with free speech but counterproductive as well: it lulls voters into thinking the law has constrained special interests, when it has not.

A WARNING that climate change will melt most of the Himalayan glaciers by 2035 is likely to be retracted after a series of scientific blunders by the United Nations body that issued it.

Two years ago the Intergovernmental Panel on Climate Change (IPCC) issued a benchmark report that was claimed to incorporate the latest and most detailed research into the impact of global warming. A central claim was the world's glaciers were melting so fast that those in the Himalayas could vanish by 2035.

In the past few days the scientists behind the warning have admitted that it was based on a news story in the New Scientist, a popular science journal, published eight years before the IPCC's 2007 report.

It has also emerged that the New Scientist report was itself based on a short telephone interview with Syed Hasnain, a little-known Indian scientist then based at Jawaharlal Nehru University in Delhi.

Hasnain has since admitted that the claim was "speculation" and was not supported by any formal research. If confirmed it would be one of the most serious failures yet seen in climate research. The IPCC was set up precisely to ensure that world leaders had the best possible scientific advice on climate change.

The stunning thing about the IPCC's assertion is not that it turns out to be pure speculation; the scary fact is that anyone believed this in the first place.  Just look at a picture: does it make sense that a degree or so of higher temperature could melt this within 30 years?

The Italian government really has a firm grasp of the age of the intertubes, doesn't it?

New rules to be introduced by government decree will require people who upload videos onto the Internet to obtain authorization from the Communications Ministry similar to that required by television broadcasters, drastically reducing freedom to communicate over the Web, opposition lawmakers have warned.

"Italy joins the club of the censors, together with China, Iran and North Korea," said Gentiloni's party colleague Vincenzo Vita.

Here is insult added to injury:

The decree did not intend to restrict freedom of information "or the possibility of expressing one's ideas and opinions through blogs and social networks," Romani told the ANSA news agency.

I love how government officials, when speaking of restrictions on freedom of the people, always insist that "It was never intended to restrict the people," or some such nonsense. I love how they insist that government actions have unintended consequences and act as if this supposed lack of intent somehow makes it okay. Do they really think that gross incompetence instead of deliberate malice excuses the whole thing and makes it okay? Well, apparently they are right because most of the world today is suffering from Stockholm Syndrome, and almost nobody can help but to suck government dick and toss government salad all day long.

I pray that the Italian people wake up, and resist this "government decree" en masse, and all of them start uploading multiple videos to every hosting site in existence. And they should dissolve the Communications Ministry in its entirety.

Massachusetts is holding a special election tomorrow for Ted Kennedy's Senate seat. The candidates are Martha Coakley, a Democrat and until recently the presumptive victor; Scott Brown, the Republican and until recently a little known state senator (mine in fact); and Joseph L. Kennedy, a Libertarian and no relation to Ted.

In most Massachusetts elections, I vote for the libertarian or write in my wife (also a libertarian). The Democrats always win, so I can vote my conscience without worrying how my vote might affect the outcome.

This election, however, is different.  If the polls are to be believed, the race is close.  And, having a 41st Republican in the Senate could defeat ObamaCare, which I view as evil. So, what's a libertarian to do? 

I looked into Brown's and Kennedy's views on a range of issues.  Kennedy is definitely libertarian, Brown more conservative. Thus, on economics they are similar and while on social issues they differ, with Kennedy's views closer to my own.  Brown, however, is not ultra-conservative; he is personally opposed to abortion and gay marriage, but he believes abortion should remain legal while gay marriage should be left to each state.

The other factor to consider is that one-party rule is awful; gridlock is great.

So, which way will I vote?

PS: You might think Brown has a chance because of backlash over the economy and Obama excesses.  That is part of the story, but in addition Coakly announced on a local radio show that Curt Schilling is a Yankees fan!

PPS: Brown might do better than the polls indicate because the Kennedy supporters will probably vote for Brown.

PPPS: My home phone rang about 5 times while I was writing this, all automated messages urging me to vote for Brown.

An individual who breaks a law that conscience tells him is unjust, and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for the law.

LYON, FRANCE -- France, which regards itself as the cradle of human rights, is moving to impose legal restrictions on Muslim women who wear Afghan-style burqas or other full-face veils.

The restrictions, likely to apply to many public places, come in response to resentment in France and other European countries over the growing visibility of Muslims -- immigrants or locally born -- on a continent with ancient Christian roots. The tensions have long run through European societies but increasingly are coming to the surface as the number of Muslims grows and symbols of their faith, including mosques, are seen as a challenge to European traditions.

Beyond the fact that these restrictions are inconsistent with any notion of free expression, they are counterproductive: by isolating Mulsims they generate resentment, rather than encourage assimilation.