Counter Economics

Who wouldn’t want their analysis from a convicted felon like Michael Milken? It just so happens his Milken Institute is another one of his scams.

What Insane Is

The Milken Institute is a faux think tank supported by conficted securities felon Michael Milken and other corrupt backers which include a number of investment management companies. The first question to ask..is it sane to accept finanical advice or “research” from a pathalogically greedy and dishonest person who broke the law to highly leverage companies back in the 1980′s and lead to a spate of hostile take-overs? Probably not. However, after evaluating Milken’s research we can say it is both of a low intellectual quality, and completely lacking in critical thining. Actually, we felt quite superior reading it. Its nice to know that although Milken is worth $2 billion, he is just an ordinary guy, maybe a bit above average in intelligence, but he has no special answers and does not know how to hire intelligent people to write for him. His think tank writes on a variety of topics with mostly no idea about what it is writing about. It tries to place a high minded spin on its research, but research recommendations always seem to lead to the same place — enriching a Wall Street or a small elite of Milken’s freinds.

Cap and Trade

Being a big free marketeer (meaning the support of corrupt corporate power) Milken is a big fan of cap and trade schemes. We extracted the exerpt below from one of the papers of the Milken Institute. We will analyze it to show how ludicrous its assumptions are.

This approach is good economics and better politics. “Cap-and-trade” programs create incentives to reduce emissions at minimum cost, as well as offering rewards to producers nimble enough to cut emissions below their quotas. The cap-and-trade approach also ensures political support from Wall Street, which is already salivating over the money to be made in trading rights. And, not to be forgotten, a cap-and-trade system can be designed to limit the potential costs by adding a “safety valve” allowing emitters to buy all the rights they need from the government at a price fixed in advance.

Interesting. It appears that according to Milken, we should be setting our pollution regulation based upon what “Wall Street will give political support to,” and that we should allow them to turn pollution regualtion into another ponzi scheme because they did such a good job with mortgage backed securities. Yes, it is better to have your regulation decided by cocaine snorting, Lambrogini driving immature men who think they are the master of the universe. For some reason, we thought scientists should have a place at the table, or professional regulators even, but no Milken thinks Wall Street should decide.

He goes on….

But conservatives are now touting another, equally efficient way to manage reductions: tax carbon emissions, and let markets adjust to the new costs by switching fuels and employing new carbon-sparing technologies. Indeed, some economists see it as the superior alternative because it may be less complicated to administer and would surely yield a lot of revenue that could be used for anything from subsidizing health insurance to rebuilding bridges.

There’s a catch, however. A carbon tax is just that–a tax. And after years of equating taxes with the work of liberals and the devil, Congress would surely be reluctant to make an exception for one aimed at solving a problem that has yet to make any difference in Americans’ lives.

These paragraphs are so laden with asinine assumptions its hard to know where to start. What is not mentioned is that taxes on carbon could be offset with taxes elsewhere. The assumption is that taxes are the best way to police pollution, this is not demonstrated. As for “solving a problem that has yet to make a difference in American’s lives,” if we continue to go down the path we are going down, our entire civiliazation is at risk. Its time to begin explaining that to the general public. This article was written by Robert W. Hahn of Brookings and Peter Passell a “senior fellow” at the Milken Institute. This is called research “on-demand.”

Milken also seems to have an extremely selective memory. He wrote an article where he proposes that too much debt can overwhelm companies during bad times. As a key participant in the Junk Bond extravaganza, this is what he did to companies. He overleveraged the companies. How can he now present himself as a paragon of infancial prudence?

http://www.milkeninstitute.org/publications/publications.taf?function=detail&ID=38801027&cat=Arts