01 October 2010

Gold, subsidies, and syphilis

There were a number of news stories that caught my attention today, and I decided to just lump them all into a single post. I'm sure at least two of them will get better treatment in the future.


Gold reached another high yesterday against the the U.S. dollar. Many seem to be blaming the weak dollar and actions by the Federal Reserve. The Fed over the last few days and weeks has been hinting that it may embark on another round of quantitative easing or QE. Wikipedia has a pretty good explanation of QE, but in the most basic terms, the Fed is preparing to print more money. Lest you think that the rise in gold is a strictly U.S.-related phenomenon, take a look at this chart. Inflation and/or economic troubles/concerns seem to be widespread.


Yesterday, I was able to catch various pieces of Marketplace on NPR while driving through the hills. The station cleared up enough for me to catch this particular piece. The government, as part of its "stimulus package" has been giving money to private businesses to induce them to hire people. It sounds like a good plan, but here is the problem: the government is distorting the market. By providing subsidies, the government is causing businesses to hire and expand because there is no financial risk to not doing so, not because the economy can actually support that expansion.

I have a number of problems with this, but let me just leave you with this thought: If this policy is good for the economy, why not keep it going?


For those who didn't know (and I have to include myself in that group), the U.S. government deliberately infected Guatemalan prison inmates with syphilis back in the 1940's as part of an experiment to test the effectiveness of penicillin in the prevention of the disease. Well, yesterday, Health and Human Services Secretary Kathleen Sebelius and others issued an apology for U.S. participation in those experiments. Perhaps these people can expect an apology sometime around the turn of the next century?

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