House Minority Leader Nancy Pelosi (D‑CA) says of the 2009 stimulus bill et alia:

Without the Recovery Act and accompanying federal interventions, whether from the Fed, or Cash for Clunkers, or other initiatives, the unemployment rate last year at the time of the election would have been fourteen and a half percent, not nine and a half percent.

The Obama administration predicted that if Congress didn’t enact the 2009 stimulus bill, then unemployment would hit 8.8 percent. They enacted it, and unemployment is now stuck at 9.1 percent.

So if history is any guide, Pelosi’s prediction means that the unemployment rate will soon exceed 14.5 percent. Thanks.

Morally, it’s rather despicable for some news outlets to be essentially questioning the value of Steve Job’s life based on how much he did or didn’t give to charities, as the Washington Post does today.

Economically, it doesn’t make any sense either. My piece in the Daily Caller yesterday described the many ways that entrepreneurs like Jobs help society attain higher levels of income. But it really comes down to one thing: Jobs helped generate large profits for a major corporation in a competitive industry. Profits are net returns on investment. They are a beacon to producers and innovators that their hard work is paying off. As profits steer money and efforts toward their best uses, standards of living rise as the production of goods and services becomes ever more efficient.

Indeed, the benefits to society of Steve Jobs is far more than the cumulative sum of profits he was left with, apparently about $8 billion. Because Jobs was a high-tech entrepreneur, we’ve all probably enjoyed huge positive externalities from his innovations. Jobs and Apple shareholders probably only captured a tiny fraction of the broad social benefits generated by the firm’s investments.

The economic problem with charitable investments is that there is no solid way to know whether they pay off. If a wealthy person gives $1 million to a charitable group, presumably it will create some positive benefits. But how much is hard to measure. If the benefits are low, society is worse off because the investment could have produced a higher return elsewhere. But we don’t have the transparency or discipline in charitable markets that profits create in business markets, so it’s likely that a fair bit of charitable investment is wasted.

Here’s some superlative, independent reporting and thinking about the “Occupy Wall Street” movement.

On October 1st, the maximum mortgage size that can be purchased by those two financial wonders, Fannie Mae and Freddie Mac, declined in higher-cost housing markets from $729,750 to $625,500. The surprise is that the scheduled decline occurred despite the fact that the entire real estate and mortgage industry were lobbying for an extension. Even the banks that might normally compete with Fannie and Freddie wanted an extension. No one, except of course the taxpayer, was going to benefit from letting this ceiling drop. Yet it happened anyway. Perhaps there is some hope for Washington.

For those who will whine that this spells the end of the mortgage market, the facts speak otherwise. As I have detailed elsewhere, there is plenty of capacity in the banking industry to absorb this small decline in the GSEs’ footprint. If anything, we should be lowering this limit even more. And if data and analysis aren’t enough for you, I personally was just approved for a mortgage in D.C. that is over the new $625,500 limit. (Yes, housing here in D.C. is quite expensive.) The difference in cost? A fourth of a percentage point. I, for one, am more than willing to pay an extra 25 basis points to get Fannie and Freddie out of the pocket of the taxpayer. 

A common defense of the higher limit is that it isn’t fair to higher-cost areas like sunny California. Setting aside the fact that these areas are higher-cost due to their own regulations that restrict the supply of housing, anyone who can afford a mortgage above $625,500 can also afford to get that mortgage without having to be subsidized by the taxpayer. Of course, a simple solution—other than the obvious one of getting rid of Fannie and Freddie altogether—is to eliminate the loan limits altogether and tie eligibility to income. If this is about helping the “middle class,” then let’s limit the benefit to the middle class.

When President Bush announced the commencement of military operations in Afghanistan on October 7, 2001, the campaign was seen as a clearly justified response to the horrific attacks of 9/11. It was narrowly targeted on those responsible for the attacks, and it had three specific goals: to punish al Qaeda and degrade its ability to carry out future attacks; to punish and drive from power the Taliban regime that had harbored al Qaeda; and to send a clear message to every other country in the world: If you support those who have killed Americans, and who wish to kill more, you will do so at your own peril.

The Afghan war enjoyed overwhelming public support at the time. It doesn’t any longer. The public mood has shifted not because the original war aims were unjust—they were not—but rather because our war aims have changed, and they bear little resemblance to those that guided the U.S. military in late 2001 and early 2002.

Few Americans could have imagined in October 2001 that there would be nearly 100,000 U.S. troops on the ground in Afghanistan 10 years later. Few at the time would have supported a war that would cost more than $100 billion annually, as our current operations do.

As we look back over the last decade of war, we should be grateful for the sacrifices of our troops and their families. We should honor their service by remembering why they were sent to Afghanistan in the first place and by recommitting ourselves, and them, to a goal that is both achievable and essential. Tragically, the current mission is neither.

We lack the power, the wisdom, or the patience to create a functioning nation-state in Afghanistan. We need not do so in order to keep al Qaeda on the run. The 100,000 U.S. troops stationed there were essentially irrelevant to the assault that killed Osama bin Laden in neighboring Pakistan, and they are equally unnecessary in nearly all of the other operations conducted against al Qaeda over the past 10 years. The organization has been severely weakened and bin Laden’s killing could have served as a useful bookend to bringing the long war in Afghanistan to a suitable close.

It still can. Ten years is long enough. It is time to end the open-ended nation-building mission in Afghanistan and to bring our troops home.

The all-too-early death of Steve Jobs was reported on the day that President Obama made another defense of his so-called jobs bill. Which one actually benefited (or would benefit) Americans and the American economy? Lots of people have talked about the way Steve Jobs changed technology, changed business, changed the world. And I trust there’ll be no more churlish complaints about his alleged lack of philanthropy. As Dan Pallotta definitively pointed out,

What a loss to humanity it would have been if Jobs had dedicated the last 25 years of his life to figuring out how to give his billions away, instead of doing what he does best.… [T]he world has no greater philanthropist than Steve Jobs. If ever a man contributed to humanity, here he is.

Two years ago Portfolio magazine did a great graphic on “The Steve Jobs Economy,” trying to assess just how much value he himself had created for the economy. The conclusion: Jobs’s personal wealth at the time was estimated at $5.7 billion. But he was generating $30 billion a year in revenue for Apple, its partners, and its competitors (who were spurred to get better). Here’s the analysis (sorry for the imperfect tear sheet):

Click image to enlarge. And for text but not graphics at Portfolio, click here.

According to Portfolio and the experts it consulted, Jobs was producing $30 billion a year in value for various companies. And of course that means that consumers believed they were getting at least that much value themselves, or they wouldn’t buy the products. That’s a wealth creator. And that number pales in comparison to this one: After returning to Apple in 1997, Jobs took the total value of the company from about $2 billion to $350 billion.

How much value is the Post Office creating this year? Or Amtrak? Or Solyndra? And if you point out that the Post Office does create value for its customers even though it loses money every year, I would ask, how much more value might its competitors create, if it allowed competition?

Instead of another bag of taxpayers’ money for state and local governments and politically favored businesses, a real jobs program would encourage the next Steve Jobs to create value. What would that involve? Keep taxes on investment and creativity low. Reduce the national debt and its threat of huge tax hikes to come. Ease the burdens of regulation, especially regulations that make it difficult to open a business, hire and keep the best employees, and develop new ideas. Open the huge, stagnant postal and schooling businesses to competition, innovation, and entrepreneurship. Repeal some of the licensing laws that now afflict 1,100 occupations. Renew progress toward free trade. Make it smart for businesses to invest their time, money, and brainpower in productive activity, not lobbying.

During Wednesday’s oral argument in Golan v. Holder (transcript here), Justice Scalia said something that was at once obvious and startling: 

It seems to me Congress either had the power to do this under the Copyright Clause or it didn’t. I don’t think that powers that Congress does not have under the Constitution can be acquired by simply obtaining the agreement of the Senate, the President and Zimbabwe. I do not think a treaty can expand the powers of the Federal government. 

This proposition is obvious, because the Constitution vests Congress with limited, enumerated powers, which can only be increased by constitutional amendment, not by treaty. But Scalia’s words were also startling because Justice Oliver Wendell Holmes said exactly the opposite almost a century ago—or at least that’s how his opinion has been read—in the canonical case of Missouri v. Holland. We filed a brief arguing that Holmes was wrong, and we are delighted that Justice Scalia agrees.

Thanks to Tim Lee for pointing out this exchange to me before I had a chance to read the transcript and to Georgetown’s Nick Rosenkranz, the principal author of our brief.