http://www.bloomberg.com/…

Federal Reserve Chairman Ben S. Bernanke, seeking to allay renewed concerns over the health of the nation’s financial system, said the central bank may extend its emergency-loan program for investment banks into next year.

“The Federal Reserve is strongly committed” to financial stability and is “considering several options, including extending the duration of our facilities for primary dealers beyond year-end,” Bernanke said in a speech to a conference in Arlington, Virginia.

Woot! More inflation!

Bernanke also endorsed proposals to set up a federal liquidation process for a failing investment bank. The Treasury should “take a leading role in any such process” in consultation with regulators, he said. Such a resolution mechanism may help reduce concern that investors and dealers begin counting on Fed aid in case their bets go wrong.

So like enforcing the current bankruptcy laws? I somehow doubt it.

Fed officials are working with the Securities and Exchange Commission and securities dealers “to increase the firms’ capital and liquidity buffers,” Bernanke said.

More inflation!!

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon told the same conference that he supported Fed and Treasury proposals for “policies, because of what happened, to take proper action if a large investment bank goes bankrupt.”

Of course he does. He, and the rest of Wall St., directly benefit from this intervention and inflation.

Without any liquidation procedure in place, the Fed in March decided to make a bridge loan to keep Bear Stearns out of bankruptcy. The central bank then agreed to take on $30 billion of hard-to-trade Bear Stearns assets to help secure its takeover by JPMorgan.

“The Federal Reserve in essence bought $30 billion of mortgage product from Bear Stearns; I want to remind people we bought $350 billion,” Dimon said today. “We don’t really think” the deal will end up costing taxpayers money, he also said.

I do. Anyone with a cursory understanding of economics could see that taxpayers will be both directly and indirectly paying for this. The indirect in terms of all the likely new regulations and powers the Fed will get on top of the inflation that will continue to destroy the middle class and poor are likely the greatest costs.

Congress should legislate “consolidated supervision” of investment banks and other big securities firms, with the unspecified regulator having authority over capital, liquidity holdings and risk management, Bernanke also said today.

The Fed should also get “explicit oversight authority” over payment and settlement systems, putting the it on a par with counterparts from around the world, Bernanke said.

U.S. central bankers will already play a part in setting capital cushions at securities firms under an agreement yesterday with the SEC. The two agencies will collaborate in determining “guidelines or rules concerning the capital, liquidity and funding” arrangements of investment banks, the accord said.

Because obviously planned economies have worked so damn well. They function like clockwork everywhere they have greater control. Right Ben?

http://thirdpartywatch.com/…

Green Party candidates like Cynthia McKinney, Jesse Johnson, Kent Mesplay, and Katherine “Kat” Swift offer positive solutions.The British are paying $8 dollars a gallon for gas. Goldman Sachs predicts Americans will be paying $6 a gallon next year.

Green Party candidates positive solutions. “More Trains, Less Traffic”. Build modern high speed rail across America. New High Speed rail in the intersate corridors, and light rail in communities to cut dependance on foreign oil in half. Stop wanton waste of $1 Trillion tax dollars on foriegn military misadventure. Stop the deficit spending that has brought a weaking dollar, and inflated prices. Seek political solutions for political problems. Use tax savings to balance annual $3.1 trillion federal budget, pay off $9.4 Trillion federal debt, install auditable accounting system at pentagon. Build rail with tax savings.

Kent Mesplay, ” Cut out tax payer funded oil, auto, aspault subsidies”.

Columist Charles Krauthammer wrote in the Washington Post this week. “Tax the damn thing.”

“Why have the extra $2 dollars (above the current $4) go abroad? Have it go to the U.S. Treasury as a gas tax.” To pay off the federal debt and strengthen the U.S. economy. Force conservation.

Announce a schedule of gas tax hikes of 50 cents every six months for the next two years. And put a tax floor under $4 gasoline, so that as high gas prices transform the U.S.auto fleet, change driving habits, and hugely reduce U.S. oil demand and bring down world oil prices .. the American consumer and American economy reap all the benefits”.

Don’t know if the spelling mistakes are in the original press release but I’d hope not. Couldn’t find this release on their website so I’m not sure of the source. I’m interested in the economic theory behind this along with the constitutional validation. I have a feeling the former would be overly simplistic and the latter based on the fallacious living document theory. I’m not entirely sure I understand the tax floor at $4/gallon of gas. Does that mean if prices drop the tax will become a greater percentage or the retail price? Does that imply that they will raise the tax as the gas price increases in order to at least keep the percentage the same? How will this light rail work in the nonmetropolitian areas where at least 1/6th of the population lives in? I know that where I grew up buses and light rail would be almost completely useless. Where is the justification for taxing those individuals who happen to live in rural areas where these services won’t ever reach? Will anyone acknowledge that the unconstitutional interstate highway system very likely was a major component of our current situation? Are the people advocating this claimed solution claiming that this government intervention will be different because it’d be done “right” by the “correct” people unlike the very consistent string of “wrong” individuals prior? What do they propose to do for those who couldn’t afford artificially inflated $6/gallon gasoline?

http://www.cato-at-liberty.org/…

Not content with a protected near monopoly of the domestic market, American sugar producers are demanding that Congress make their pot of subsidies and protection even sweeter.

Chairman of the House Agriculture Committee, Rep. Colin Peterson (D-Minn.), is pushing language in the latest proposed farm bill that would raise domestic price supports for sugar and mandate that sugar imports be used for ethanol production.

His proposals would virtually lock in an 85 percent share of the U.S. market for domestic sugar beet and cane growers, even though a number of foreign countries can grow sugar more cheaply than most American growers. And by the way, did I mention that Rep. Peterson’s district is among the nation’s top producers of sugar beets?

The Bush administration, to its credit, opposes Peterson’s changes in the farm bill. The sugar industry, of course, loves the idea. A spokesman for the pro-protection American Sugar Alliance told this morning’s Wall Street Journal, “We have an administration that seems more interested in supporting foreign producers, than producers right here in America.”

Notice the sugar industry doesn’t mention American consumers. U.S. agricultural policies should not be about favoring “our” producers over “theirs,” but about advancing such national interests as freedom, prosperity, and a more peaceful world. As we’ve explained in detail at the Center for Trade Policy Studies, the U.S. sugar program favors American sugar producers primarily at the expense of the rest of America. American families pay higher prices at the store, while U.S. producers that use sugar as an input — bakeries, food processors, restaurants, candy makers, etc. — incur higher costs because of our sugar program.

As we read daily in the newspaper about soaring food prices, this Congress is the verge of passing a farm bill designed explicitly to raise domestic food prices.

::sigh::

They cause the high sugar prices in the first place. They cause the high prices of milk. The high prices of wheat and corn and soy beans. They deflate the money and cause prices in general to rise. The people of world and particularly the American public suffers so that the few sugar manufacturers my thrive.

And when the people start to revolt they will ignorantly run to the government to fix the problem not realizing they caused it in the first place.

http://www.guardian.co.uk/…

The worldwide effort by supermarkets and industry to replace conventional oil-based plastic with eco-friendly “bioplastics” made from plants is causing environmental problems and consumer confusion, according to a Guardian study.

The substitutes can increase emissions of greenhouse gases on landfill sites, some need high temperatures to decompose and others cannot be recycled in Britain.

Many of the bioplastics are also contributing to the global food crisis by taking over large areas of land previously used to grow crops for human consumption.

The market for bioplastics, which are made from maize, sugarcane, wheat and other crops, is growing by 20-30% a year.

The industry, which uses words such as “sustainable”, “biodegradeable”, “compostable” and “recyclable” to describe its products, says bioplastics make carbon savings of 30-80% compared with conventional oil-based plastics and can extend the shelf-life of food.

Concern centres on corn-based packaging made with polylactic acid (Pla). Made from GM crops, it looks identical to conventional polyethylene terephthalate (Pet) plastic and is produced by US company NatureWorks. The company is jointly owned by Cargill, the world’s second largest biofuel producer, and Teijin, one of the world’s largest plastic manufacturers.

Pla is used by some of the biggest supermarkets and food companies, including Wal-Mart, McDonald’s and Del Monte. It is used by Marks & Spencer to package organic foods, salads, snacks, desserts, and fruit and vegetables.

It is also used to bottle Belu mineral water, which is endorsed by environmentalists because the brand’s owners invest all profits in water projects in poor countries. Wal-Mart has said it plans to use 114m Pla containers over the course of a year.

While Pla is said to offer more disposal options, the Guardian has found that it will barely break down on landfill sites, and can only be composted in the handful of anaerobic digesters which exist in Britain, but which do not take any packaging. In addition, if Pla is sent to UK recycling works in large quantities, it can contaminate the waste stream, reportedly making other recycled plastics unsaleable.

Last year Innocent drinks stopped using Pla because commercial composting was “not yet a mainstream option” in the UK.

Anson, one of Britain’s largest suppliers of plastic food packaging, switched back to conventional plastic after testing Pla

in sandwich packs. Sainsbury’s has decided not to use it, saying Pla is made with GM corn. “No local authority is collecting compostable packaging at the moment. Composters do not want it,” a spokesman said.

Britain’s supermarkets compete to claim the greatest commitment to the environment with plant-based products. The bioplastics industry expects rising oil prices to help it compete with conventional plastics, with Europe using about 50,000 tonnes of bioplastics a year.

Concern is mounting because the new generation of biodegradable plastics ends up on landfill sites, where they degrade without oxygen, releasing methane, a greenhouse gas 23 times more powerful than carbon dioxide. This week the US national oceanic and atmospheric administration reported a sharp increase in global methane emissions last year.

I’m not sure that the government is subsidizing this bio-plastic but I don’t doubt it given the same parent company gets lots of subsidies to create corn based ethanol. Looks to me not enough research went into this bio-plastic plan. How much does one want to bet the idea was pushed on the stores by people who didn’t know better or just wanted to look like they were green? If you look at even the IPCC reports there is little or nothing that can be done which would make a significant impact on the current trends, assuming we have any significant impact on this trend in the first place. If we just let the market work, as the scarcity of oil increases so will the prices and customers will demand a better product. That process will be more drawn out and likely a lot more reliable then this current ram rod method we are receiving from the government. There would be real incentives to get it right for the long haul and those who don’t get it right won’t be subsidized by the government and their impact will be minor. These unintended consequences seem to occur very regularly in the government central planning system.