Bizzy’s Business Briefs (100305)
Wall Street Journal Rips Washington GOP Establishment
No one is left standing, no further comment necessary:
Here are the depressing facts. Domestic discretionary nondefense spending is up 70% since 1994. Spending growth slowed in 1995 and 1996 as the Republican-controlled House pushed for a balanced budget. But spending began to rise rapidly again in the later 1990s, as Republicans and Bill Clinton “compromised” by spending more on both of their priorities. And the gusher has continued under President Bush, as Republicans have failed to trim domestic pork to pay for the necessary increases in defense.
Except for the 2003 tax cuts, we can’t think of a single recent major policy accomplishment. There have been smaller victories—trade bills, some modest tort reform, and now some judges approved. But the drive for major reform has stalled. Mr. Bush was a co-conspirator in passing the 2003 Medicare drug bill that is the largest expansion of the entitlement state since LBJ’s Great Society. But even when Mr. Bush has pressed for reform, as he did this year on Social Security, Republicans on Capitol Hill have whined and resisted. If Mr. Bush failed to mobilize the country, it was in part because Congressional Republicans were so vocal in their caterwauling.
Heritage on Another Kelo
So much for helping the poor (bold is mine):
In Kelo v. City of New London, the U.S. Supreme Court confirmed that a municipality may use the power of eminent domain to transfer land between private owners to increase the tax base.
Critics complained that the Court’s rule in this case would put every home and property in America at risk. In effect, they argued, the Court had granted local government’s a carte blanche to seize any home or structure and replace it with one that might generate more revenue. Supporters of the decision replied that the threat to private property–particularly property belonging to low-income families–was overblown .
Guess who was right? The Washington Times reports: “Florida’s Riviera Beach is a poor, predominantly black, coastal community that intends to revitalize its economy by using eminent domain, if necessary, to displace about 6,000 local residents and build a billion-dollar waterfront yachting and housing complex….“
Factories on Fire (figuratively)
There’s a whole lot of production goin’ on:
NEW YORK — Factories ran at their strongest pace for over a year in September, registering large increases in new orders despite a sharp rise in the price of raw materials, according to a survey published on Monday.
The Institute for Supply Management said its index of national factory activity rose to 59.4 in September from 53.6 in August, far outstripping economist’s median forecast for a drop to 52.0.
Hurricanes Katrina and Rita boosted manufacturing activity throughout the month as reconstruction of the areas damaged by the two storms that battered the Gulf Coast in late August and late September got underway, analysts said.
The article goes on to cite fears of inflation as a result of the ramp-up. I’m not convinced that it’s anything more than a 6-8 week blip, and that production levels will settle back shortly. Anyway, I suspect the car companies aren’t sharing in the temporary good times.
UPDATE: Larry Kudlow thinks/hopes that the rate-hiking by the Fed is nearly done. You may recall that Don Luskin disagrees, and thinks that Greenspan should, and will, raise rates three more times before he retires. I’m with Kudlow.
UPDATE 2: The “domestic” car companies are NOT in on the fun. GM and Ford sales were both way down in September (24% and 20%, respectively), even though they were essentially selling cars at near-zero-profit employee pricing (ouch). Daimler Chrysler was up 4%, and the big Japanese companies’ US sales were up by even more (Toyota 10%, Nissan 16%, Honda 12%–double ouch).
Digital Music Sales Growing Briskly
Digital is still small, but is now over 5% of all music sales–pretty impressive, since it has only existed in a consumer-friendly form for about 2 years:
Digital Music Sales Nearly Triple Over Year
LONDON — The market for music downloads and other digital forms of music has tripled in a year, helping offset a continuing decline in sales of CDs and other physicial formats, an industry report said Monday.
The International Federation of the Phonographic Industry (search) estimated that digital music sales totaled $790 million in the first half of this year, equivalent to 6 percent of industry sales, compared to $220 million in the same period a year earlier.
Recorded music sales fell 1.9 percent to a retail value of $13.2 billion in the first half of 2005, compared to $13.4 billion in the same period of 2004.
IFPI said the digital boom, which now exceeds the value of the global singles market, was largely driven by sales in the top five markets — the United States, Britain, Japan, Germany and France.
Sales of physical formats fell 6.3 percent by value in the period to US$12.4 billion, the report said.
As noted previously, with digital clearly being the future, recording industry executives would be foolish to choke it off by demanding price hikes.
