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Archive for May 12th, 2012|Daily archive page

S.E. vs. Buck on Syria intervention – Christopher Santarelli

In News on May 12, 2012 at 11:38 pm

Today marked the single deadliest attack to date in the Syrian capital of Damascus. At least 55 dead and another 370 injured, as both sides blame the other for the violence that came from two suicide car bombers. The deadly attacks and finger-pointing following the incident give further credence to critics who believe the policy applied by international mediator Kofi Annan has failed. Debate on whether the United States should take on an increased military role to end the bloodshed carried out by President Bashar al-Assad’s regime has been an ongoing conversation on “Real News.”

On Thursday, two panelists presented their opposing views on how the United States should handle the situation in a more literal debate style than previous shows.

From one podium, S.E. Cupp said the time has come for the American military step-in and put Assad down, for this not just a Syrian crisis.

“With revelations that Al-Qaida is moving in to capitalize on this new round of chaos, Syrian stability is in everyone’s best interest,” said Cupp. Going on to add that it is “our moral obligation to do everything we can to end the genocide in Syria.”

While agreeing with Cupp that what is going in Syria is horrible, Buck Sexton argues that to accomplish S.E.’s goals, the United States would have to participate in a military intervention. Sexton argues such an intervention would be incredibly messy and difficult, and at best would end with a lengthy military occupation and inevitable insurgency.

“I’m not suggesting that nothing should be done in Syria,” Buck argued. “What I would suggest is an indirect policy, this is not something to be scoffed at.”

Watch the debate

via The Blaze.

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The $2b loss by JPM is just a preview of the coming collapse of the derivatives market

In News on May 12, 2012 at 8:05 pm

When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned.  But the truth is that this is just the beginning.  This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market.  When most Americans think of Wall Street, they think of a bunch of stuffy bankers trading stocks and bonds.  But over the past couple of decades it has evolved into much more than that.  Today, Wall Street is the biggest casino in the entire world.  When the “too big to fail” banks make good bets, they can make a lot of money.  When they make bad bets, they can lose a lot of money, and that is exactly what just happened to JP Morgan.  Their Chief Investment Office made a series of trades which turned out horribly, and it resulted in a loss of over 2 billion dollars over the past 40 days.  But 2 billion dollars is small potatoes compared to the vast size of the global derivatives market.  It has been estimated that the the notional value of all the derivatives in the world is somewhere between 600 trillion dollars and 1.5 quadrillion dollars.  Nobody really knows the real amount, but when this derivatives bubble finally bursts there is not going to be nearly enough money on the entire planet to fix things.

Sadly, a lot of mainstream news reports are not even using the word “derivatives” when they discuss what just happened at JP Morgan.  This morning I listened carefully as one reporter described the 2 billion dollar loss as simply a “bad bet”.

And perhaps that is easier for the American people to understand.  JP Morgan made a series of really bad bets and during a conference call last night CEO Jamie Dimon admitted that the strategy was “flawed, complex, poorly reviewed, poorly executed and poorly monitored”.

The funny thing is that JP Morgan is considered to be much more “risk averse” than most other major Wall Street financial institutions are.

So if this kind of stuff is happening at JP Morgan, then what in the world is going on at some of these other places?

That is a really good question.

For those interested in the technical details of the 2 billion dollar loss, an article posted on CNBC described exactly how this loss happened….

The failed hedge likely involved a bet on the flattening of a credit derivative curve, part of the CDX family of investment grade credit indices, said two sources with knowledge of the industry, but not directly involved in the matter. JPMorgan was then caught by sharp moves at the long end of the bet, they said. The CDX index gives traders exposure to credit risk across a range of assets, and gets its value from a basket of individual credit derivatives.

In essence, JP Morgan made a series of bets which turned out very, very badly.  This loss was so huge that it even caused members of Congress to take note.  The following is from a statement that U.S. Senator Carl Levin issued a few hours after this news first broke….

“The enormous loss JPMorgan announced today is just the latest evidence that what banks call ‘hedges’ are often risky bets that so-called ‘too big to fail’ banks have no business making.”

Unfortunately, the losses from this trade may not be over yet.  In fact, if things go very, very badly the losses could end up being much larger as a recent Zero Hedge article detailed….

Simple: because it knew with 100% certainty that if things turn out very, very badly, that the taxpayer, via the Fed, would come to its rescue. Luckily, things turned out only 80% bad. Although it is not over yet: if credit spreads soar, assuming at $200 million DV01, and a 100 bps move, JPM could suffer a $20 billion loss when all is said and done. But hey: at least “net” is not “gross” and we know, just know, that the SEC will get involved and make sure something like this never happens again.

And yes, the SEC has announced an “investigation” into this 2 billion dollar loss.  But we all know that the SEC is basically useless.  In recent years SEC employees have become known more for watching pornography in their Washington D.C. offices than for regulating Wall Street.

But what has become abundantly clear is that Wall Street is completely incapable of policing itself.  This point was underscored in a recent commentary by Henry Blodget of Business Insider….

Wall Street can’t be trusted to manage—or even correctly assess—its own risks.

This is in part because, time and again, Wall Street has demonstrated that it doesn’t even KNOW what risks it is taking.

In short, Wall Street bankers are just a bunch of kids playing with dynamite.

There are two reasons for this, neither of which boil down to “stupidity.”

  • The first reason is that the gambling instruments the banks now use are mind-bogglingly complicated. Warren Buffett once described derivatives as “weapons of mass destruction.” And those weapons have gotten a lot more complex in the past few years.
  • The second reason is that Wall Street’s incentive structure is fundamentally flawed:Bankers get all of the upside for winning bets, and someone else—the government or shareholders—covers the downside.

The second reason is particularly insidious. The worst thing that can happen to a trader who blows a huge bet and demolishes his firm—literally the worst thing—is that he will get fired. Then he will immediately go get a job at a hedge fund and make more than he was making before he blew up the firm.

We never learned one of the basic lessons that we should have learned from the financial crisis of 2008.

Wall Street bankers take huge risks because the risk/reward ratio is all messed up.

If the bankers make huge bets and they win, then they win big.

If the bankers make huge bets and they lose, then the federal government uses taxpayer money to clean up the mess.

Under those kind of conditions, why not bet the farm?

Sadly, most Americans do not even know what derivatives are.

Most Americans have no idea that we are rapidly approaching a horrific derivatives crisis that is going to make 2008 look like a Sunday picnic.

According to the Comptroller of the Currency, the “too big to fail” banks have exposure to derivatives that is absolutely mind blowing.  Just check out the following numbers from an official U.S. government report….

JPMorgan Chase – $70.1 Trillion

Citibank – $52.1 Trillion

Bank of America – $50.1 Trillion

Goldman Sachs – $44.2 Trillion

So a 2 billion dollar loss for JP Morgan is nothing compared to their total exposure of over 70 trillion dollars.

Overall, the 9 largest U.S. banks have a total of more than 200 trillion dollars of exposure to derivatives.  That is approximately 3 times the size of the entire global economy.

It is hard for the average person on the street to begin to comprehend how immense this derivatives bubble is.

So let’s not make too much out of this 2 billion dollar loss by JP Morgan.

This is just chicken feed.

This is just a preview of coming attractions.

Soon enough the real problems with derivatives will begin, and when that happens it will shake the entire global financial system to the core.

via The Economic Collapse.

The case for austerity – Gary North

In News on May 12, 2012 at 6:12 pm

The Keynesians and declared anti-Keynesians have joined hands in order to promote an intensely Keynesian error: European fiscal austerity as a negative factor. One contributor in Forbes refers to austerity as a death spiral.

The word “austerity,” beginning with the Greek government’s debt crisis two years ago, has been used by the financial media in one sense, and only one sense: reductions in spending by national governments. The word is not used with respect to the economy as a whole.

More than this: the word has been used to explain the contracting economies of Europe. The reductions in government spending are said to have caused the contracting economies. This explanation is based on textbook Keynesianism.

Keynesians call for increased government spending. This is the heart of Keynesianism. Keynesianism rests on a mantra: “Government spending overcomes recessions.” All else is peripheral: monetary inflation, graduated taxation, and free trade. These peripheral issues will always be sacrificed to the supreme economic premise: “Government spending overcomes recessions.”

This is where every analysis of Keynesianism should begin. Any economic doctrine, any economic policy, any proposed solution to the present crisis should be assessed in terms of the mantra. Anything that does not begin and end with the mantra is not Keynesianism. Anything that does, is.

It is a mark of the supreme triumph of any ideology when the self-professed critics of the ideology adopt both its conclusions and its rhetoric, and do so unknowingly. This means that the promoters of the ideology have set the terms of public discourse. It is very difficult to replace an ideology or worldview, once its promoters have established the terms of discourse.

It can be done, of course. But to do this, the promoters of a rival outlook must expose both the errors of the existing system and the implicit agreement of its supposed critics. This wins no friends among the hapless troops who think they are scoring significant victories by arguing against peripheral aspects of the enemy ideology, while accepting its central presuppositions and main policy prescriptions lock, stock, and barrel. They have been taken in hook, line, and sinker.

PHARAOH AND THE FROGS

A recent example of a well-meaning but conceptually confused anti-Keynesian was published in Forbes. It had a powerful headline: “Keynesianism Is the New Black Death.” It suggested that the great tragedy of Europe today is “austerity.”

As I have already said, the financial media universally define austerity as cuts in government spending. I have never seen the word used in any other way over the last two years. Any author who uses the word in any other way owes it to his readers to explain this new usage. The Forbes article offered no such distinction or alternative definition. I therefore take it at its word: austerity.

If austerity is the great evil, then the implication is inescapable: that which restores government spending and therefore overcomes austerity is positive.

This reminds me of the Pharaoh who decided not to let the Israelites journey for a week to sacrifice to God. Moses and Aaron then attempted to persuade him by way of a series of plagues. One of them was frogs. The land filled up with frogs. Everywhere anyone walked, he stepped on frogs.

The court magicians had to do something about this. They responded by a public display of the power of their magic that matched what Moses and Aaron could do. “And the magicians did so with their enchantments, and brought up frogs upon the land of Egypt” (Exodus 8:7).

Somehow, I imagine Pharaoh screaming at them: “No, no, you blockheads: not more frogs! Fewer frogs!” But the text does not record this.

The solution to the frogs of European recession is not increased government spending. Rather, it is the opposite: reduced government spending. In short, the solution is greater austerity.

AUSTRIANISM’S MANTRA

The Austrian economists also have a mantra: “Reduced taxation increases liberty.” Liberty is necessary for economic growth.

If a contemporary government cannot reduce taxes without going bankrupt, then it must cut spending if it chooses not to go bankrupt.

Europe’s national governments are all going bankrupt. Japan’s is, too. So is America’s. The solution is to cut taxes and cut spending even more.

“Not more government spending. Less government spending!”

“Not larger government deficits. Reduced government deficits!”

“Not higher taxes. Lower taxes!”

“Not more fiat money. Reduced fiat money!”

In short: “Let my people go!”

With this in mind, let us examine an article that argues that austerity is the great threat to Europe’s prosperity.

A DEATH SPIRAL?

The article begins with a survey of European politics. It points out that voters are tossing out politicians in nation after nation. Sarkozy was number eight over the last year. Why is this happening? Here is the proposed answer:

The voters of Spain, Greece, France, etc., understand that their governing elites have pushed their economies into austerity death spirals, and they have been expressing their unhappiness at the ballot box.

The more fundamental question is this: Why did these elites push their respective economies into this supposed death spiral? Why would faithful Keynesian elites do such a thing?

Let us not be naive. The West has been run at the top by Keynesian elites, or politicians holding Keynesian ideas, ever since 1930 – six years before Keynes offered his unreadable justification of politicians’ policies: “The General Theory of Employment, Interest, and Money.”.

The Keynesian central bank pushed Europe’s economies into a boom, 2001 to 2007. The voters loved it. Interest rates were low. There was lots of money to buy houses. The economies of the south – “Club Med” – were booming. So was the honorary member of Club Med: Ireland. Ireland’s property values quadrupled. It was all going to last forever. The elites – especially the economists – issued no warnings, except for Austrian economists, who were dismissed, as always, as dinosaurs.

Then came the bust phase. What the European Central Bank did before 2007 – inflate – it has done more aggressively ever since 2008. Governments ran even larger deficits. They all implemented Keynesian stimuli. This did not work. Europe is falling back into a recession.

In the spring of 2010, investors in northern Europe caught on to the fact that Club Med residents could not compete economically. They kept running deficits with the North. Those easy-going populations were living on money borrowed from the North. So were their governments. They had no intention of ever paying back these loans.

Any why not? This is what Keynesianism teaches. Government loans will not be paid off. Ever. Government debt will grow. So will prosperity.

Two years ago, Greece’s Socialist Party found out just how far in the debt hole the government was. Interest rates then started to rise in PIIGS nations. PIIGS governments were trapped. They could not run ever-larger deficits, because the cost of loans were rising.

That was when the reality of Keynesianism hit: deficits do matter. Money is not free. Debts must be rolled over at market interest rates. The horror!

That was when governments in the South started cutting back on spending. Not much, you understand. The deficits are still unprecedented: above 6% of GDP.

Keynesians labeled this “austerity.”

It is not austerity. It is deficit spending on a massive scale. Austerity is where national governments run surpluses and use excess revenues to pay down the national debt.

There has not been austerity in Europe since approximately 1914.

The gold coin standard enforced austerity, 1815 to 1914. That was its chief function and its great service to mankind. It kept the West’s governments austere. This enabled the private sector to dine at an ever-expanding feast.

Keynesians hate the gold coin standard. That is because they believe that high government spending is the basis of high consumer spending, and consumer spending – not private thrift – is the foundation of prosperity.

The public, which prefers consumer spending to the austerity of thrift, cheers on the politics of Keynesianism. Deficits without end, borrowing without pain, growth without ceasing: Keynesians promise, and voters believe.

But the day of reckoning arrived in 2010. The free money got expensive. The party did not stop, but some of the guests were sent home, to join young adults, who have sat and watched TV, because there are no jobs.

The public feels betrayed. Voters believed in the Keynesian dream, which was articulated by the original Keynesian, who said, “If thou be the son of God, command that these stones be turned into bread” (Matthew 4:3). When the target of this challenge refused to rise to the bait, the Keynesian went looking for other takers. In the second half of the twentieth century, he found them. Lots of them. Millions of them. Politicians promised to accomplish the feat. Voters applauded.

But times have changed, the article tells us.

Unfortunately for Europe and the world right now, there are no pro-growth candidates and/or parties on the Continent to offer relief from the austerity programs that are grinding their economies to dust. With no one to vote for, all that European electorates have been able to do is to vote against. They have sought to register their protest by defeating incumbents.

The incumbents over-promised. They had long told the voters that deficits don’t matter. Deficits did not matter for as long as banks in northern Europe kept lending to PIIGS at rates associated with German frugality. But then came reality.

Europe as a whole is in recession, and Greece, Spain, and Portugal are in depressions. What are the people supposed to do if the economic chefs on both the political Left and the political Right are offering the same poisonous “austerity” menu?

Balanced budgets remain mirages a far as the eye can see. Token spending cuts, which are made in the name of reducing deficits to about 3% of GDP in ten years, are part of a “poisonous austerity menu.” Put in a more familiar terminology, there are too many stones and not enough bread. The voters will not tolerate this.

The reason why there are no economic chefs promoting growth is simple: somebody has to bankroll the growth of government spending. Who will that be? Who wants to trust PIIGS?

The louder the voters scream about austerity, the fewer the number of lenders, meaning lenders at rates under 10%.

PLAGUE!

The article eventually gets to the point.

So, what happened in Europe? The short answer is, “plague”. The Black Death of the 14th century was caused by the Yersinia pestis bacterium, which was spread by rats. Today’s plague is the result of Keynesianism, which is being spread by the economics departments of major universities and The New York Times. Unfortunately, unlike Yersinia pestis, Keynesianism does not respond to antibiotics.

How does the article define Keynesianism? Erroneously. It says that Keynesians favor tax increases and spending cuts.

Austerity, as currently being practiced in Europe, is based upon the Keynesian belief that tax increases and government spending cuts have the same effect upon both the government deficit and the economy. In fact, the most virulent strains of Keynesianism cause people to believe that raising top marginal tax rates and increasing government spending can actually boost GDP, because “the rich” have a higher “marginal propensity to save” than do the recipients of government handouts.

Fran‡ois Hollande, the winner of Sunday’s election in France, is a Keynesian. He believes that raising France’s top marginal tax rate to 75% while hiring 60,000 more unionized teachers will make things better.

Excuse me? What does an avowed socialist politician have to do with Keynesianism? Keynesianism is what Paul Krugman proclaims, which is greater deficit spending, plus sufficient central bank money expansion to finance this expansion.

Which Keynesian economist or politician has come out forthrightly for spending cuts, i.e., austerity? Austrian economists have. Ron Paul has. This is why Austrians and Ron Paul have been marginalized by the Keynesian media as cranks.

To a leader whose mind is infected by Keynesianism, it makes sense to try to close a budget deficit with a combination of tax increases and spending cuts, with the balance between them determined by some combination of political considerations and “fairness”.

There are many politicians in Europe who have imposed taxes on the rich. The voters have cheered them on, as always. The voters are outraged by the spending cuts. Spending cuts reduce the flow of funds to government bureaucrats and welfare state clients. This is why Greek union members riot.

Traditional Keynesianism calls for increased spending, more borrowing, and – if private lenders demand high rates of interest – monetary expansion by the central bank to purchase government debt. The article wisely rejects monetization. But it does not call for a gold coin standard. Rather, it defends the euro.

As damaging as tax increases are to an economy, monetary depredation is worse. Only a Keynesian could think that replacing the euro with a new drachma could be a solution for Greece. The result would be a new currency backed by the full faith and credit of a government in which no one has faith and to which no one will extend credit. In reality, the collapse of the Greek economy would not even wait for the introduction of the new currency. It would not be possible to keep preparations for a new drachma a secret, and even rumors of such a move would be enough to create a cataclysmic run on the Greek banking system. Capital, and people with capital, would flee.

The article suffers from an illusion: that the euro is not just another medium for inflation, that it is anything more than drachmas for Keynesians.

The Keynesian political hierarchy imposed the euro on the voters in 1999. The elite’s spokesmen have decried the departure of Greece from the eurozone. The unelected Greek technocrats, like technocrats all over Europe, were either former Goldman Sachs employees or wanna-be’s. They are now being tossed out by the voters. The voters are populists and socialists. They are fellow travelers of Keynesians only in the boom phase of the Keynesian welfare state. When the bills come due, they revert to locally issued fiat money, taxation of the rich, trade unionism, and increased government spending.

CONCLUSION

Keynesianism is in a death spiral. So is populist socialism. So is fiat money fascism. They are all in death spirals because they all reject this premise: “Lower taxes increase liberty.”

Liberty will prevail. This is an eschatological affirmation. One of the ways that it will prevail is through the bankruptcy of the Keynesian social order: high taxation, high regulation, high deficit spending, and high inflation.

Let’s put government on a diet. Let’s have austerity where it belongs: government spending.

That is what Europe’s voters do not want. That is what they are going to get.

“Not less austerity. More austerity!”

via Lew Rockwell.

Brokered convention taking shape – Jeffrey Phelps

In News on May 12, 2012 at 1:35 am

New developments are dashing any hopes Romney would escape the RNC unscathed and emerge on the other side as the easy Republican nominee.

Surfacing Thursday was a damaging and revealing run-down of the circumstances revolving around who is and isn’t a “bound” delegate and what may end up being a game changer for Paul.

With 11 states now in the books for Paul, to Romney’s 18 and only 11 states left to start their primary or caucus process, Ron Paul has seemingly stolen enough delegates in the undecided states and will likely gain enough in states to come, virtually assuring a brokered convention at the RNC in August.

In addition to developments stating there may not actually be such thing as a “bound” delegate at the national level after all, Ron Paul may actually be truly nipping at Romney’s heals, despite recent establishment media reports that state otherwise.

Current, typical “estimates” show Romney around 200 or fewer delegates away from locking up the nomination. The problem with that scenario is the fact that Romney has actually only officially won 18 states thus far and may not be able to gain enough delegates between now and Utah’s last primary in June to garner the required 1,144 delegates necessary to win the nomination.

Aside from automatically discarding Santorum’s and Gingrich’s seven total states and all those combined delegates as not yet being countable for either Paul or Romney, it’s starting to look as if there will not be enough delegates left for Romney to have a chance of winning the nomination outright.

Especially considering many of the remaining “at-large” delegates will be largely split between Paul and Romney as the race continues to unfold. Romney is likely to continue winning the majority of the delegates in the states where winner takes all, and Paul is likely to continue winning the states that hold a separate delegate selection process, much like the 11 states he’s already taken.

The combination of the delegates Paul has won in those 11 states, the delegates taken in the seven states Gingrich and Santorum combined to win, in addition to all the delegates Paul is going to continue to win in the states that have yet to officially conclude, all combine to a total likely superseding the amount Romney could afford the other candidates to reach in order to get to 1,144 by Tampa.

There’s only so many available.

The media still generally refuses to update the actual totals, based on the current manipulation tactic that has people largely believing many delegates are “bound” to vote for the candidate that won their particular state, typically in proportion to how much that candidate may have initially won by, in their “caucus” or “primary,” among other deciding factors.

As it turns out, that may not actually be the case at all. It may turn out that taking the time to figure all that out may have actually been, instead, a waste of time .

The current perception given by elite media is based on there being a rule in place “binding” party delegates to vote for the candidate that won certain “bound” states, whereas actual RNC rules prohibit state election rules or party platforms from having any influence on the eventual delegates and how they decide to vote at the RNC.

Attorneys for the RNC have clearly stated the Republican and Democratic parties are, in essence, non-binding, non-governmental private clubs and do not hold any weight with regard to actual GOP election laws and the ‘official’ caucus that takes place at the RNC, every 4 years.

Those laws were already clearly explained by the RNC in 2008 when this very issue arose, ironically enough, regardinga John McCain delegate in Utah that wanted to switch their vote to, none other than, Mitt Romney when they reached the RNC.

According to FairVote.org, Jenneifer Sheehan, Legal Counsel for the RNC, plainly stated in a 2008 letter to Nancy Lord, Utah National Committeewoman, several weeks before the convention,

“The RNC does not recognize a state’s binding of national delegates, but considers each delegate a ‘free agent’ who can vote for whoever they choose. The national convention allows delegates to vote for the individual of their choice, regardless of whether the person’s name is officially placed into the nomination or not.”

This means, much to Romney’s dismay, of all the delegates that finally make it to Tampa, they are all allowed to vote for anyone they choose, even if that happens to be Rick Santorum, for instance.

The twist to the story however is that the vast majority of the delegates emerging from the states thus far, that aren’t Romney’s, have actually stated to be voting for Ron Paul.

via Examiner.

NDAA, Enemy Expatriation Act – Ben Swann

In News on May 12, 2012 at 1:05 am

National Defense Authorization Act – Video

Did the President authorize provisions of the National Defense Authorization Act? – Video

Does the President have the power to order an assassination? – Video

The Enemy Expatriation Act – Video

When in doubt, ban it – Gary Biller

In News on May 12, 2012 at 12:06 am

He sounds like a man with a strong urge to leave a lasting legacy on his way out of the door.

U.S. Transportation Secretary Ray LaHood, who is planning to step down from that post at the end of the Obama Administration’s first term, recently called for a federal ban on all cell phone use while driving. He has been quoted as saying that the police should have “the opportunity to write tickets when people are foolishly thinking they can drive safely or use a cell phone and text and drive.”

Give the police opportunities to write more tickets? That “let’s teach them a lesson” attitude has never modified driver behavior long-term, or even near-term. Speed traps and red-light cameras keep cranking out tickets. Command-and-control enforcement measures are efficient at collecting money from motorists, but not at effecting beneficial change.

When confronted with the NMA position that all 50 states already have adequate distracted-driving laws in place making it unnecessary and dangerous to single out just one type of distracting behavior, LaHood doubled down. He expressed less concern about specific activities beyond cell phone usage that cause inattentive driving because “not everyone does [those other things].”

Secretary LaHood’s call for a cell phone ban is politically popular. It is also terribly misguided because such absolute restrictions don’t work. Don’t take my word for it. The insurance industry, usually diehard supporters of increased driver restrictions and penalties, is the surprising source of this revelation.

The Highway Loss Data Institute (HLDI), an affiliate of the Insurance Institute for Highway Safety, issued a study in late 2010 that showed texting bans to be ineffective. Researchers reviewed crash statistics from several months before and several months after texting bans were imposed in four states: California, Louisiana, Minnesota, and Washington. Those data were compared to surrounding states that didn’t outlaw texting during the same time periods.

The title of the HLDI news release that announced the study said it all: “Texting bans don’t reduce crashes; effects are slight crash increases.“ This followed another HLDI report that found banning hand-held cell phone use while driving did not reduce vehicular accident rates either.

If government is to play a role reducing dangerous distracted driving, it should concentrate its efforts and resources on education, not redundant legislation or the isolating of specific activities behind the wheel. Fund the use of driving simulators in driver’s education classes. Let novice drivers experience the danger of distracted driving – in any of its forms – in a learning environment that doesn’t put them or others at risk.

That would be a legacy worth leaving.

via Lew Rockwell.