Free Market Libertine

A Twelve Step plan for Democrats

2010-01-04T18:08:00.004-05:00

Came across this today on Scott Ott's Facebook page. Michael Steele, our fearless leader of the RNC is releasing a new book "Right Now: A 12 Step Program for defeating the Obama agenda". And it got me remembering the book I saw the the DNC chairman Tim Kaine wrote, "Maybe Never: A twelve step plan for passing the Obama Agenda.

Step 1. We admit that we are powerless over Big Government

Step 2. Only a government bigger than GWB's government can save us.

Step 3. We made a decision to turn our money and freedom over to the government.

Step 4. Made a searching of our tax receipts (this only applies to those living under Big Government.Not to prospective members of the administrion)

Step 5. Admitted to Obama the exact nature of what is wrong with free enterprise.

Step 6. We are ready to have Obama nationalize all remaining remnants of the free market.

Step 7. Humbly ask Obama to remove the yoke of work from us.

Step 8. Made a list of all of the people that Republicans have harmed and find a way to send Attn Gen Holder after them.

Step 9. Made Attn General Holder send them to Gitmo (It's not for terrorists anymore!)

Step 10. Continued to take personal inventory of Republicans and send them to Gitmo when necessary.

Step 11. Sought through Obama's youtube videos and speeches in MP3 format for the knowledge and will to carry out Obama's vision.

Step 12.Having had a glorious vision of the future, spread the message of Hopenchange to all people, at least those on the Moveon.org mailing list.

Failure number 7,894,423, give or take a few more million, of socialism

2009-11-11T13:04:00.005-05:00

In the wonderful workers paradise that is Venezuela, where all people are equal and there is no strife as Chavez is concurrently Jesus, Castro and Barack Obama combined, El Jefe has made all people equal. Equal to rolling blackouts in one of the most energy rich countries in the Western Hemisphere. From the NYTIMES (of all places)

This country may be an energy colossus, with the largest conventional oil reserves outside the Middle East and one of the world’s mightiest hydroelectric systems, but that has not prevented it from enduring serious electricity and water shortages that seem only to be getting worse.

President Hugo Chávez has been facing a public outcry in recent weeks over power failures that, after six nationwide blackouts in the last two years, are cutting electricity for hours each day in rural areas and in industrial cities like Valencia and Ciudad Guayana. Now, water rationing has been introduced here in the capital.

Over the course of the last decade, Chavez has nationalized the better portion of the utilities industry as oil money flowed into the country and drove growth in Venezuela. Now that we have seen global demand wane, it looks like poor little Hugo is learning, probably for the first time, the inefficiencies inherent in centrally planned economies. As oil revenues poured in, things got better for the greater population in Venezuela right?

The deterioration of services is perplexing to many here, especially because the country had grown used to cheap, plentiful electricity and water in recent decades. But even as the oil boom was enriching his government and Mr. Chávez asserted greater control over utilities and other industries in this decade, public services seemed only to decay, adding to residents’ frustrations.

With oil revenues declining and the economy slowing, the shortages may have no quick fixes in sight. The government announced some emergency measures this week, including limits on imports of air-conditioning systems, rate increases for consumers of large amounts of power and the building of new gas-fired power plants, which would not be completed until the middle of the next decade.

So what does Hugo do? He moves towards a more efficient market based economy right?

In response, the president is embarking on his own crusade: pushing Venezuelans to conserve by mocking their consumption habits.

He began his critique last month with the amount of time citizens spent under their shower heads, saying three-minute showers were sufficient. “I’ve counted and I don’t end up stinking,” he said. “I guarantee it.”

Then he went after the country’s ubiquitous love motels and shopping malls, accusing them of waste. “Buy your own generator,” he threatened, “or I’ll cut off your lights.” He similarly laid blame with “oligarchs,” a frequently used insult here for the rich, for overconsumption of water in gardens and swimming pools.

Damn those clean people. How dare they want to wash themselves. Additionally those money changers are trying to throw their weight around.

Mr. Chávez is even going after his countrymen’s expanding waistlines. “Watch out for the fat people,” he said last month, citing a study finding a jump in obesity. “Time to lose weight through dieting and exercise.”

When Chavez writes his little red book the first political piece of advice will be "fatty, fatty two by four can't fit through the bathroom door." I wonder if that will show up in any of the speeches of Mark Lloyd and Anita Dunn in the future. Fat People are the scourge of existence they don't share their bounty.

Meanwhile, homes and businesses across the country are adapting to the erratic supply of power and, here in Caracas, of water. Sales of small generators, candles and water storage tanks are surging. Reflecting the unease of the already strained industrial base, which developed around access to ample and cheap power, Sidor, a steel maker in Ciudad Guayana, said it was shutting down its furnaces five hours a day because of the cuts.

“If this crisis teaches us something,” said Fernando Branger, an energy expert at the Institute of Superior Administration Studies, a Caracas business school, “it is that the immensity of our energy reserves means nothing if we cannot even get them out of the ground.”

Socialism will never be able to match up to the efficiency of capitalism. Can we finally throw this model on the dustbin of history.(see what I did there, I quoted Trotsky)

Hey Mr. Bi-Partisan I want ideas that work President, here is a plan that works better. I'm holding my breath as I know that you are my Messiah.

2009-11-05T12:45:00.006-05:00

I would have liked to have been a fly on the wall in the White House when the C.B.O released this report. I can imagine that Rahm Emmanuel let loose with the F-bombs like the Allies at Dresden. To commence with the nana-nana-boo-booering

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the amendment would reduce federal deficits by $68 billion over the 2010-2019 period; it would also slightly reduce federal budget deficits in the following decade, relative to those projected under current law, with a total effect during that decade that is in a broad range between zero and one-quarter percent of gross domestic product.

This is good,good news as the bill after the after ten years would almost truly be "deficit neutral" And the hits keep on coming.

Regulatory reforms in the small group and non-group markets, including establishing association health plans (insurance coverage that is offered to members of an association) and individual membership associations, and allowing states to establish interstate compacts with a unified regulatory structure;

This is what Free-marketeers like myself have been calling for, truly increasing competition between evil horrific insurance companies on a state to state basis. The pool of risk will be larger and will drive premiums down. BET ON IT.

Federal funding for states to use for high-risk pools in the individual insurance market and reinsurance programs in the small group market; and Changes to health savings accounts (HSAs) to allow funds in such accounts to be used to pay premiums under certain circumstances, to make net contributions to HSAs eligible for the saver’s tax credit, and to provide a 60-day grace period for medical expenses incurred prior to the establishment of an HSA.

This might be my favorite portion of the amendment. While states are being further empowered with Federal funding(really their own dollars) for high risk pools and re-insurance programs in the small group market; direct Federal intervention is not happening. The idea behind the GOP's Health Care Bill is to put the individual in charge of his/her healthcare with as little Federal intervention as possible.

Here is the really good stuff:

Limits on costs related to medical malpractice (“tort reform”), including capping noneconomic and punitive damages and making changes in the allocation of liability;

Defensive medicine over. Dead, not coming back. The economic incentive that ambulance chasers like John Edwards has to sue over bad breast implants is gone.

CBO anticipates that the combination of provisions in the amendment would reduce average private health insurance premiums per enrollee in the United States, relative to what they would be under current law-by 7 percent to 10 percent in the small group market, by 5 percent to 8 percent for individually purchased insurance, and by zero to 3 percent in the large group market. Those are averages, however, and they are subject to a great deal of uncertainty; some individuals and families in each market would see different results.

Now, these are the initial estimates by the CBO. So, we can expect to see some changes in the numbers. If these numbers hold up, I believe they will, this is a powerful weapon in the fight. What defenders of this bill, you and I, need to do is be able to explain how the inclusion of free-market reforms in this measure will lead to more innovation and lower costs for the population at large. We need to draw the distinct differences between the efficiency of the private markets and the sprawling inefficiency of the government bureaucracy. This is a battle that we can win. History and economics are on our side. Hope and change are on the side of the Democrats, also I believe they may have a centaur, but we'll still survive. Let's Dance.

UPDATE

The Great Thomas Sowell hits the nail on the head.

Economics and politics confront the same fundamental problem: What everyone wants adds up to more than there is. Market economies deal with this problem by confronting individuals with the costs of producing what they want, and letting those individuals make their own trade-offs when presented with prices that convey those costs. That leads to self-rationing, in the light of each individual’s own circumstances and preferences.

Ruminations on the Recent Election

2009-11-04T10:23:00.004-05:00

A few thoughts about the election last night. First, there is the old axiom that all politics is local. Very true, and one of the reasons that decentralized government is the best form of governance. It was comical to hear hard-core liberals last night pulling out this card. "This has no bearing on the President as all politics are local." If they really believed it, than they would be for a smaller central government and more power in the hands of the state and local governments. But I digress. Some interesting polling data I saw this morning in the New York Times caught my eye. The split in party affiliation is 33% Democrat, 37% Republican and 30% independent.

Pct. of voters Deeds McDonnell
33% Democrat 93% 7%
37% Republican 4% 96%
30% Independent or other 33% 66%

Deeds won 93% of Democrats, 4% of Republicans and 33% of independents. The figure that is not getting attention, and should is the 7% of the Democrat vote that McDonnell was able to siphon off. Almost 1 in 10 democrats decided to vote for the Republican in a state that all of the experts say is trending from purple to blue. McDonnell ran a positive, results oriented campaign and ended up winning big. Bob McDonnell won Virginia, my home state by 18 points. Republicans and conservatives need to run positive results oriented campaigns if they want to win in 2010. I am all for conservative insurgencies in primaries to let the squishes know who is paying them, but we need to focus on results oriented policies if their is to be another Republican revolution in 2010. We can't simply run against the party in power. This is a good start.

Al Gore is the Music Man

2009-11-03T14:33:00.006-05:00

Al Gore is quite possibly the greatest con man in history. If I was Al Gore's agent, I would book him on a Broadway run of THE MUSIC MAN and cast him as Henry Hill. I can see and hear the Goracle running through his version of the immortal song Trouble.
(Apologies to Meredith Wilson)

Citizens of the world/Well either you're closing your eyes/To a situation you do not wish to acknowledge/ Or you are not aware of the caliber of disaster indicated/ By the presence of carbon in your community./ Well, ya got warming, my friend, right here/ Ya got warming right here in your community./ Why, sure I'm a carbon man/ Certainly mighty proud I say/ I'm always mighty proud to say it/ I consider the hours that I expand carbon/ flying my private jet are golden./ Help you cultivate a green thumb/ and a cool head and a preening eye/ Never take and try to give/ a Nobel Prize from/ a three railed sailing yacht/ But just as I say/ It takes judgment,brains, and pomposity to thrive/ in a rigged game/ I say that any boob kin take/ and shove a cap and trade bill/ and they call that progress/ the first big step on the road to World Sal-Va-/ I say, first, recycling plastic/ then then re-using TP/ An the next thing you know/ your son is trading carbon credits/ in a hemp made suit/ An listenin' to some big out of town movie star/ hearin him talk about sustainable living/ not some communal living but living where the world isn't going to pot/ Like to see some stuck up Commie boy smoking on green patch/ Makes your blood boil/ Well I should say/ Plebes let me tell you what I mean/ You got one, two, three, four, five, six, seven continents in the world/ continents that mark a difference/ between Europeans and a Yank/ With a capital Y/ and proceeded by W and that stands for WARMING/ And all week long your Republican/ youth will be debatin away/ I say your youth will be debating/ debating away their noon time suppertime indoctrination time too/ get the can in the recycling/ never mind doing study/ or reading Adam Smith or Edmund Burke/ never mind being charitable/ til the third world is caught under water/ on a Saturday night and that's warming/ Oh yes we got lot's and lots of warming/ I'm thinking of the kids in India/ bellies poking out cause they can't get any food after school/ That's warming/ with a capital W/ followed by Y and that stands for Yankee/ who everybody blames.

To remember the rhythm

Any-who, Al Gore is set to become the world's first carbon billionaire from his pushing of global warming on us the residents of River City. Pretty similar to the huckster selling the boys band, no actual knowledge of the issues at hand but knows how to sell the sheep.

Hey How about this Front Page Editorializing

2009-11-03T12:01:00.002-05:00

From The New York Times

It is probably not wise to draw broad lessons from Tuesday’s results about what might happen in next year’s midterm Congressional elections and high-profile governor’s races. That said, it is worth watching whether Mr. Obama succeeds in turning out his supporters — especially people who voted for the first time last year — in New Jersey and to a lesser extent in Virginia.

That will be an early sign of his ability to transfer his own appeal to other candidates and of whether he has succeeded in building a sustainable new coalition of Democratic voters. That is something that will not be lost on Democratic members of Congress, especially those in moderate and Republican-leaning districts whom he will be pressing to cast tough votes on issues like health care and climate change.

Similarly, in Virginia, keep an eye on whether independent voters who supported Mr. Obama so strongly in 2008 turn out for Mr. Deeds, vote for Mr. McDonnell or just stay home.

History may not repeat itself but it sure does rhyme.

Market Forces Vs. Government Forces

2009-11-03T10:07:00.002-05:00

Now, I'm not one to often gloat when I'm right, but the news of the "unexpected" profit by the Ford Motor Company this week just makes me want to dance around in my Milton Friedman Halloween mask. From the New York Times this morning:

While its crosstown rivals stumbled through bankruptcy this summer, the Ford Motor Company pressed its advantage, and delivered surprising news on Monday that its cost-cutting efforts and improving sales helped it earn nearly $1 billion in the third quarter.

Ford could have taken the bail-out money the same way that GM and Chrysler did. It would have been easy and completely understandable. Who says no to free money. Well, Ford did as they had put together a plan to work their way out of near bankruptcy. What is this plan that Ford came up with to once again become a profitable company. I'm sure that it must be something that the masters in DC could push GM and Chrysler to do.

Ford, which earned $997 million in the third quarter and made money in North America for the first time since 2005, has turned itself around largely by cutting costs and introducing cars that consumers want to buy, rather than resorting to deep discounts to lure shoppers into showrooms.

Let me get this right, by producing a product that consumers want to purchase, Ford was able to post a profit. That flies against everything I learned in my economics courses over the years(snark.) Look, this was a foregone conclusion that Ford was going to post a profit as they have been restructuring their business for the last several years with an eye on the future. Certainly, GM and Chrysler were able to clear their books by taking gubmint money, but the psychological and monetary edge that Ford picked up during the government restructuring of Chrysler and GM put Ford at a distinct advantage.

When Ford chose not to ask for government loans, the company was freed to continue spending on new products like its Fusion and Taurus sedans. G.M. and Chrysler, by comparison, had to rein in much of their product development programs to conserve cash while they awaited federal aid.A report by the Government Accountability Office released on Monday said that the federal government was unlikely to recover much of the $81 billion that was invested in G.M. and Chrysler, their suppliers and related financing companies.

Let this be another example for the inefficiency of Government Force Vs. the Power of Market Forces. While Ford investors will begin to see a return on the investment that they are making into Ford Motor Company, you and I, the American taxpayer, will never even sniff the 81 billion that we sunk into GM and Chrysler.

The Direction of the Republican Party

2009-10-07T01:10:00.003-04:00

There has been alot of debate recently about the direction that the Republican Party is heading in. On one side of this chasm, we have the Republican intellectuals; David Brooks, David Frum, Peggy Noonan and George Will to name a few lining up against the conservatives; Rush Limbaugh, Mark Levin, Sean Hannity etc.

TO set it up in a far simpler fashion, we have the Old Guard Republicans vs. the New Media Conservatives. Also, what is lot in the cacophony of noise between the two camps is each sides interactions with everyday modern Americans, you and I. Now, David Brooks, who for me is always a must read, published a piece in the New York Times, decrying how talk radio is really aimed at a niche audience.

It is the story of media mavens who claim to represent a hidden majority but who in fact represent a mere niche — even in the Republican Party. It is a story as old as “The Wizard of Oz,” of grand illusions and small men behind the curtain.

What is most interesting in all actuality is that the niche audience that is being "preached" to by the small men behind the curtain is reaching more people than David Brooks column each week in the New York Times. What Brooks and the conservative intellectuals of today's day and age seem to think from their ivory tower is that the audience for Rush or Mark Levin are not free-thinking individuals who make their own decisions. Following Brooks logic, if Mark Levin was really all that influential, what he would say for his audience to do would be done lickety split, no questions asked by the stupid silent majority. It didn't happen, so they have no say within the conservative movement and should just let us handle the policy issues...mmm-kay.

This is childish thinking for someone as intelligent as David Brooks and goes to show that he is no longer in touch with conservative principals. If he was a conservative, Brooks would understand that we are all free-thinking individuals and are not happy to just hop onto the bandwagon of the first nice candidate with perfectly creased pants and a worn out copy of Reinhold Neibhur which he uses to Pied Piper proto-statists who are looking for a savior.

Conservatives are free-thinking individuals who understand the fallen nature of man and the ability of power to corrupt individuals and would thus like to keep as much centralized power away from the government as possible. This is why we prefer to allow the free-market to sort out our economic differences. Sure, we get walloped on the chin when we make mistakes, but we learn from them and begin to realize over the course of our lives that no one individual person is infallible. This is why the conservatives in the Republican Party were able to peg President Obama so accurately.

The conservative "intellectuals" are not the ones who are bringing forward the good ideas anymore, or trying to find ways to apply conservative principals to the issues of the day. Certainly, there are instances where the "intellectuals" position a plan for an issue of the day, such as George Will's column in the WPost last week.

So, instead, forces should be substantially reduced to serve a comprehensively revised policy: America should do only what can be done from offshore, using intelligence, drones, cruise missiles, airstrikes and small, potent Special Forces units, concentrating on the porous 1,500-mile border with Pakistan, a nation that actually matters.

This is similar to the thinking of Joe "I hope people take me seriously" Biden. Conduct a counter-terrorism operation from out of the country to reduce military casulties. Now, this is simply a re-tread of a democratic idea. Get out and take care of it without boots on the ground, it is politically tenuous. This is could be considered a conservative idea in the 1930's when we were isolationists, but one thing George W. Bush did tie to conservatism was the neo-conservative idea of nation building. Wouldn't it be better to try and give the Afghani's some true stake in the world economy. How about a pilot program to get some of our Opium for medical usage from the Afghans. Give them a stake in the world at large. That is was in conservative.

The idea that conservatives are no longer offering the types of policy and popular books that brought conservatism into vogue, Free to Choose, The Road to Serfdom, Conscience of a Conservative is a complete joke. Mark Levin's Liberty and Tyranny is one the best conservative policy cases that has been made in this generation. Also, JOnah Goldberg's Liberal Fascism is quite possibly the best history of the American Left, who make no mistake are in charge right now, that I have read.

What we are really seeing in this country now is a backlash against big government conservatism and liberalism. We are moving more in the direction of a Libertarian style conservatism. What will be interesting to watch is whether the movement we see now, Tea Parties etc, continue. I believe they will as the audience for talk radio and Fox News as well as anything attached to Andrew Breitbart and Glenn Beck continues to grow and the influence of the Ivory Tower Conservatives wane.

Big government conservatives had their man in George W. Bush(voted for him twice) and now the party wants to go in a new direction.

Health Care as Big Screen TV's

2009-08-17T15:23:00.004-04:00

In the great debate that we are having about health-care in this country right now, I figured it was time to take a look again in my "free-market method" at a contentious issue and break it down into easier terms. It's what I do.

Any-who, as we can see from this study by the Kaiser Family Foundation

In the United States, which has had both a high level of health spending per capita and a relatively high rate of real growth in that spending, the share of GDP devoted to health grew from 8.8% of GDP in 1980 to 15.2% of GDP in 2003 (Exhibit 5). This almost 7 percentage-point increase in the health share of GDP is larger than increases seen in other high-income countries.

What we have seen, at least through 2003, is a huge jump in the increase of the health care sector's share of our GDP upon a cursory statistical analysis. Now over the course of roughly 23 years, this is a fart in the wind considering some of the life saving and prolonging medicines and technologies that we have developed. On an average evening at home, think of all of the ads that you see for either some heart drug, cholesterol inhibitor or other TV ad that you see for drugs for asthmatics. (Then again, if you are home reading Golf Digest it is a steady diet of Viagra and Cialis ads. Gives me a stiff neck, reading at home.) As the quality of care that we have received has increased so has the cost. Now, to be contrarian, why can't we have both, increased efficiency as well as lower costs. I believe that we can do both within the health-care market.

As we can see in this post from Consumer Reports,

a 32-inch 720p set will sell for $647, down 7 percent from December 2007
• a 37-inch 720p LCD TV will cost $782, down 5 percent
• a 40- or 42-inch 720p LCD TV will sell for $944, down 5 percent
• a 40- or 42-inch 1080p set will sell for $1,123, down 19 percent
• a 46- or 47-inch 1080p set will sell for $1,528, down 17 percent
• a 52-inch 1080p LCD TV will sell for $2,243, down 19 percent

High end expensive items are dropping based on the demand for these products. The supply of these items are meeting the demand. What you have is a fairly fluid market, essentially that there is not so much overhead and regulation that it is difficult for upstarts to get into the business of making a product and supplying a service that people want. How many TV making companies are there, I can think of several; Sony, Samsung, Pioneer, Westinghouse, Vizio etc. A good amount of them. What we have within the market for HDTV's is true competition. Lets' say that Samsung and Sony are servicing the "super prime" market, Pioneer and Westinghouse are serving the "prime" market and Vizio is the upstart, serving the rest of the general public. Sony and Samsung are competing with one another to make a product that the "super prime" consumer wants to purchase. At the same time, we have upstarts like Vizio who are trying to break into the market and make a profit by providing a similar, not better or discernibly worse product, by targeting a certain type of consumer who wants to have the HD technology but doesn't want to pay for the pomposity of the Sony or Samsung name brand. This is good for you and me, the average consumer, even though Samsung and Sony are not in a direct competition with Vizio as they will adjust their prices to try and pull from Pioneer and Westinghouse who are serving people in the "prime" part of the market. These forces drive the prices down for all consumers.

Now, this is a pretty crude picture that I've painted here, but the lesson to take away is that general competition between actors on an even stage will lead to lower prices for all consumers as each company is competing from a pool of consumers who wants to purchase their product.

On the other hand, what we don't have is a Czar of TV Pixelation who is dictating what each company needs to include within each television and how many pixels per inch that each TV should provide the viewer. The consumer is left to make that decision for themselves. Do they want the high end product, with the special gadgets and the mini robot which makes deviled eggs during half time, or the less expensive product which will only boil the eggs for you.

The "problem" with our health care system is that it is over regulated, overtaxed and overburdened with tort cases which have driven up the cost of providing medicine. Now, do I want just any Tom, Dick or Harry to set up a practice and begin to sell snake oil to the masses, of course not. The current health care debate isn't about "bending the cost curve" or insuring the uninsured. If it was, we would have broken down the barriers between purchasing health insurance across state lines and allowing in all states the kinds of plans that the uninsured would more than likely purchase, high deductible insurance to cover catastrophic accidents, not normal doctors visits. Or, we would have reformed tort law to cap the monies that could be won when Aunt Flo got a bad boob job and they came out lumpy. This is not the idea, the idea is control.

When the government is in charge of health care, they, the government underneath of the idea of cost cutting and trying to service the masses will have alot of say over what we can and cannot do with our lives. Hey, sorry Mr. Carlton, put that cigarette out as it will drive up costs. There is no greater control than the control over ones on day to day health.

Now, I would like to leave you with a thought, and hopefully if anyone reads this, a point we can debate. Since 1980 we have seen an increase in the cost of health care as a percentage of GDP grow by 7% points. Could it be from the government involvement and the slow creep of a socialized health care system? The health care markets have only become less free and the consumer has only lost choice. Where do we go from here?

Update

This story pertains pretty well to cost. Here

The Daily Twain

2009-07-01T09:17:00.001-04:00

Facts are stubborn things, but statistics are more pliable.

The Daily Twain

2009-06-30T09:09:00.001-04:00

Education: that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge.

The Daily Twain

2009-06-16T10:47:00.000-04:00

I thoroughly disapprove of duels. If a man should challenge me, I would take him kindly and forgivingly by the hand and lead him to a quiet place and kill him.

Fears behind Government healthcare

2009-06-15T20:39:00.001-04:00

Obama hits 'fear-mongering' on health care changes

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I must say, the President is throwing every ounce of political capital that he has at trying to sell his healthcare plan to the AMA and the American people. The truth is that more than likely he will not get what he wants(in the end, a single payer system) because he will not make the necessary political concessions to do it.

One such "scare tactic" the president cited Monday was an assertion that he favors socialized medicine. Obama again denied that, although he did say he thought that a "public option" should be available as a choice for those who currently have no insurance coverage. Obama said "we know the moment is right," citing the passage of legislation giving the government unprecedented control of the marketing and sale of cigarettes.

What is laughable is that the "public option" is essentially a collective, or in a more direct manner socialized medicine. What the President is calculating is that he will be able to charm the disparate sides; labor, doctors, insurance companies and the public and will be able to get his plan passed. This is hubris at the highest level. The good news for those of us who would like to see healthcare reformed without the intorduction of full blown socialized care is that the President is such an idealogue that he will refuse to push back against his base. Tort reform, not going to be touched he can say goodbye to the AMA. Pretax health benefits, goodbye union support. Rationing of care, goodbye middle class. We need to begin to chip away at his periphral support and I beleive that the best way to start is to push him on tort reform. We shall see

SANFORD / ATLAS: Alternatives to government health takeover - Washington Times

2009-06-15T11:52:00.001-04:00

SANFORD / ATLAS: Alternatives to government health takeover - Washington Times

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Mark Sanford, the current governor of that rakish southern state of South Carolina, has proposed a free-market solution to the health care crisis that the country currently faces. What I believe we are seeing is the tables aligning for his run for President in 2012. This is the blueprint that conservatives and Libertarians should be following in the battle against Leviathan.

• We believe there's benefit to decoupling employment from health insurance coverage by ridding the system of tax preferences for health care. This single change would reduce health expenditures hundreds of billions of dollars while easing the burden of health costs on businesses. A great unspoken truth is that health benefits from employers come at the expense of employees' take-home pay. Raising lost wages would be the first of many benefits to American workers and their families from delinking health insurance and employment.

• We think it's critical that power shifts to the American consumer and away from government, employers and insurers, as evidence shows medical care prices come down when patients pay directly. Government should offer tax relief, such as refundable tax credits, to encourage private health insurance purchasing - especially for low-income families. Similar ideas, like those in the Patients' Choice Act recently put forth by Republican members of Congress, are important for Americans to consider. We would do well also to consider creative ideas such as changing federal payments to state-based medicaid plans to individual vouchers or expanding health savings accounts, as has been done in South Carolina.

• Government can lower the price of health insurance and increase choice for Americans shopping for their own coverage by breaking down arbitrary barriers such as state lines and reducing costly and unnecessary coverage mandates. For instance, a national market for car or life insurance means South Carolinians can buy an Ohio policy or New Yorkers one from California. It makes similar sense to allow people to buy a health insurance plan, no matter from what state, that best fits their family and their values.

• We believe it's imperative that we fix our medical liability system. By some estimates, abuse of our legal system costs our health system $80 billion annually. Key tort reforms, including reasonable caps on noneconomic damages; freedom to use dispute resolution outside of our courts; and requiring adherence to medical guidelines as a standard for liability in malpractice trials would be a good start.

• Finally, an estimated 80 percent of all the health care innovation in the world springs from American individuals, companies and universities. It is vital that government support an atmosphere that enhances such innovation and discovery rather than restrict it by overregulation. Specifically, the federal government should promote state-based experiments in health care delivery and technology in Medicaid and Medicare pilot programs (in preventive care and home-based nursing, to name two) and also facilitate and aggressively fund scientific research and innovation in both private and public sectors on advances in diagnosis and treatment as well as in disease prevention.

Good Stuff.

New GM Head Honcho: "I don't know anything about cars"

2009-06-10T17:24:00.001-04:00

From Bloomberg:

“I don’t know anything about cars,” Whitacre, 67, said yesterday in an interview after his appointment. “A business is a business, and I think I can learn about cars. I’m not that old, and I think the business principles are the same.”

In other news the President admitted that he doesn't know shit about governing.

Kudlow is THE MAN

2009-06-10T17:15:00.000-04:00

From NRO:

Right now, with oil trading through $71 a barrel, Treasury bonds closing in on 4 percent, and commodity indexes up 25 percent year-to-date, inflation fears are circulating through the markets.

There’s a way to nip this in the bud: First, the Treasury and Fed should work together to protect the value of the dollar. Here’s how they do it. At the Fed’s June meeting in two weeks, Ben Bernanke should put in the FOMC minutes a clear reference to an exit strategy that will curb the massive money creation that Art Laffer wrote about in today’s Wall Street Journal. Next, at its September meeting, the Fed should raise its target rate — which is now 0.0 to 0.25 percent — pulling it up to 25 basis points, the upper end of the current range. That’s a small, even tiny, move that would represent about a 12 basis-point hike. But the move would at least send a signal that the Fed has an exit strategy from excess money that it intends to implement. Just that tiny move would go a long way towards protecting the dollar and knocking down inflation fears.

Its good to see that he is on the same page with me.

File this under " No Shit item of the Day."

2009-06-10T09:23:00.000-04:00

Get Ready for Inflation and Higher Interest Rates:

Normally I would quote liberally from Dr. Laffer's editorial as he is one of my favorite economists. However, what i want to discuss this morning is the inflation that we are currently seeing, especially with gas prices. Milton Friedman referred to inflation as "two many dollars chasing too few goods." I believe that we are seeing that in the rising oil prices.

As we can see from the chart above, the money supply has advanced at the fastest rate in the last fifty years. This was necessary according to Friedman. The money quote is at 1:38.

With the precipitous drop in housing prices being the central trigger in a deflationary spiral, Chairman Bernanke followed Friedman's advice and flooded the financial system with capital to maintain some level of price stability. This was a necessary step in halting a crisis that did have the possibility of throwing us into a Depression. However, what we are seeing now, with the Federal Reserve's monetizing of Treasury debt is something I believe will lead to a fairly ruinous situation.

In regards to oil prices, Since September, members of the Organization of the Petroleum Exporting Countries have pledged cuts totaling 4.2 million barrels a day, or nearly 12 percent of their capacity, a record in such a short time.

According to our own Energy Information Administration,

Oil prices rose for the third consecutive month in May, driven in part by expectations of a global economic recovery and future increases in oil consumption. In addition, a weaker dollar and increasing financial market activity are prompting higher prices for commodities, overshadowing weak oil supply and demand fundamentals. The weaker dollar may indicate that economic activity abroad, especially in Asia, is stronger than currently estimated, which would provide an upside risk to the oil price forecast. Downside risks, such as continuing weak demand as indicated by sluggish first quarter 2009 oil consumption data, high inventories, and increased surplus production capacity levels within the Organization of the Petroleum Exporting Countries (OPEC) could moderate the upward price pressure, especially if the global economic recovery is delayed and/or weaker than expected.

Interesting, why would we have a weak dollar. Possibly because
we have increased the monetary base over %100. Too many dollars chasing too few goods. It would seem to me that we have a large problem on our hands that we should get a handle on as soon as possible. An inflationary spike in commodity prices, oil specifically will ground to a halt a real recovery in the economy. It is time to stop the printing presses and suck some of that cash out of the system, it will be painful but a "real" recovery will not happen if we don't. To put a finer point on it , The Federal Reserve is caught between a rock and a hard place. To satisfy the demands of the White House, they need to keep the presses moving and printing dollars to fund the spending spree that the current administration is going on. The Chairman is in a tight spot, as this excellent piece from the American covers:

One has to pity Ben Bernanke as he tries to attain the Federal Reserve’s dual mandate of promoting economic growth while maintaining price stability. For the currency and bond markets are increasingly focusing on the long-run inflationary impact of the Obama administration’s budget, which according to the Congressional Budget Office will double the U.S. public debt-to-GDP ratio from 41 percent in 2008 to 82 percent by 2019. And the markets are also focusing on the Federal Reserve’s newly announced policy of “quantitative easing,” which they fear could be tantamount to monetizing the administration’s ballooning deficit.

Rising oil prices will severely affect economic growth and skew the budget deficit to an even higher percentage of GDP as tax receipts fall. Rough seas ahead my friends.

Miracles Happen Everyday

2009-06-09T13:59:00.000-04:00

Here is a heartening piece from the WSJ:

The U.S. Treasury Department announced Tuesday that 10 of the nation's largest banks have met the necessary requirements to repay funds they received from the government's financial-rescue fund, making way for $68 billion to possibly be returned to Treasury.

"These repayments are an encouraging sign of financial repair, but we still have work to do," said Treasury Secretary Timothy Geithner in a statement.

We don't need a pay Czar now, right Timmy?

The 10 banks are: J.P. Morgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley, BB&T, U.S. Bancorp, American Express Co., Capital One Financial Corp. Bank of New York Mellon Corp., Northern Trust Corp. and State Street Corp.

I will be opening accounts with these banks today with my eight dollar tax cut. I might also by some G.M stock through Morgan Stanley as my brokerage firm. If my math is right I could afford 850,000 shares of "Government Motors."

This is my favorite blurb from the article:

Morgan Stanley said Tuesday that it is "pleased to be repaying its $10 billion in TARP Capital with an attractive return for taxpayers." J.P. Morgan Chase said Tuesday it plans to repay its $25 billion in TARP funds. Translated into non BS talk

Morgan Stanley said Tuesday that it is pleased " to be running as far as possible away from creepy Tim Geithner, the new PAY CZAR, and Joe Biden's douchebaggedness."

This should be a good thing, that we now have banks that are feeling comfortable enough with their capital situation and are able to raise private capital. It amazes me that private investors are willing to invest in these banks when they know that Chrysler and GM investors were bent over the barrel. But I digress. The street should be doing a dance today, no more government control, no pay czar, finally bankers can go back to Spago.

But then again will the FEDS let go and return TARP to the dungeon it belongs in along with wage and price controls:

In Tuesday's announcement, the Treasury said much of the money would be returned to its general fund and would "help to reduce Treasury's borrowing and national debt." Mr. Geithner has described plans to reuse TARP funds that come back into the fund, recently announcing that he'd open up the funds to smaller banks.

The announcements comes as large banks have eagerly declared intentions to repay government aid given the restrictions on dividends and executive pay that go along with TARP. Meanwhile, the public and Congress have shown greater signs of bailout fatigue, leaving firms uncertain about what new restrictions they'd have to face for tapping into the financial-rescue fund.

I don't like the " plans to reuse TARP funds that come back to the fund, recently announcing that he'd open up the funds to smaller banks." Me no likey. How about we suck that money out of circulation, or use it for small business tax relief. While things could be much, much worse I tend to fall under the skeptical heading. If this method, propping up zombie banks, or keeping that money available for the next failing institution, which will happen, how are these banks any more free to engage in non coercive market activity. We don't know all of the specifics yet but I think that the Presidents remarks are prescient.

"I've said repeatedly that I have no interest in managing these banks -- or running auto companies or other private institutions, for that matter," Mr. Mr. Obama said. "But I also want to say: the return of these funds does not provide forgiveness for past excesses or permission for future misdeeds. It is critical that as our country emerges from this period of crisis, that we learn its lessons; that those who seek reward do not take reckless risk; that short-term gains are not pursued without regard for long-term consequences."

TARP is not gone, it is only sleeping.

You can't make this shit up... but the President can.

2009-06-09T12:19:00.001-04:00

White House Cites Progress on Economy Under Plan

WASHINGTON — The rising unemployment rate is giving President Obama’s critics an opportunity to raise questions about the effectiveness of his recovery plan and his economic leadership. The huge budget deficit is focusing fresh concern on the national debt.

So Mr. Obama began a new effort on Monday to show that his stimulus plan was yielding concrete benefits, saying that his administration expects to save or create 600,000 more jobs this summer, as the federal government spends billions to expand care at health centers, spruce up national parks, hire teachers and improve military facilities.

At a meeting with Mr. Obama and the cabinet, Vice President Joseph R. Biden Jr. outlined 10 major initiatives that he said would “build momentum and accelerate job growth” over the next 100 days. After Mr. Biden ticked off a list of programs — including water and waste projects in rural America and rehabilitation of 98 airports and 1,500 highways — the president took aim at his critics.

“Now I know that there are some who, despite all evidence to the contrary, still don’t believe in the necessity and promise of the recovery act,” Mr. Obama said, “and I would suggest to them that they talk to the companies who, because of this plan, scrapped the idea of laying off employees and in fact decided to hire employees. Tell that to the Americans who receive that unexpected call saying, ‘Come back to work.’ “

How stupid does the administration believe that the American people are; seriously?

Obama Drastically Scales Back Goals For America After Visiting Denny's

Its not like they haven't tried. Hell, I could save or create a job this weekend by hiring a babysitter and getting my snotty nosed neighbor's son to mow my lawn, but isn't that just a "McJob" I'm not going to promote my babysitter or lawn care specialist to prune my petunias, that is done by Korean man-servant Kato, no pay. Where are these jobs that have been saved? How about these jobs? I remember, this recovery plan was going to save those jobs at the Caterpillar plant right?

I wish that I could pull this off. I'm going to let my professors know that I am going to save or create my dissertation in the next several weeks by investing my time in playing Call of Duty 4. Of course the White House press corps is eating this up. Bill McGurn hit the nail on the head in the WSJ today.

The Obama numbers are pure fiction.

Told you so...

2009-06-09T10:34:00.000-04:00

China airs fears on U.S. Debt
Senior Chinese leaders have privately voiced fear over the soaring US budget deficit and are increasingly looking to diversify from the dollar, a Republican congressman said.

"We heard across the board -- in private -- substantial, continuing and rising concern," Representative Mark Kirk said after a trip to China that included talks with government officials and central bank chief Zhou Xiaochuan.

This is what happens when you borrow more than you can afford. We have taken out a giant subprime mortgage and it appears that the bank is already contemplating cutting off our equity. Like it or not, China is a larger holder of Treasury debt and is our largest trading partner. We don't want to make them think we are going to inflate our way out of this problem.(Although that is what will happen whether or not the FED does it on purpose.)

Kirk's assessment differed with that of Treasury Secretary Timothy Geithner, who said last week on a separate visit that Chinese leaders had expressed "justifiable confidence" on the future of the recession-hit US economy.

Kirk traveled with Representative Rick Larsen, a member of President Barack Obama's Democratic Party, who also painted a less gloomy picture of Chinese officials' views.

China is the largest creditor to the United States with some 700 billion dollars invested in Treasury bonds. Zhou earlier this year floated the idea of replacing the dollar with a basket of currencies as the benchmark global unit.

Instead of a basket of currencies how about we make the global benchmark Kathie Lee Gifford blouses and copies of Mao's Little Red Book. What we always say, at least me to my friends, is that the Chinese would never call in the debt that we owe them as it would kill their economy which is heavily reliant on exports of cheap plastic shit to sell at Wal-Mart. What we have seen in the past several years since Bush starting running up his deficits is a rise in the Chinese Middle Class, as well as a global middle class which will be competing for ever more scarce resources. Per the Wharton School of business.

China is expected to become the world's third-largest consumer market by 2025 as an expected transition from an investment-led economy to a more consumer-focused model brings about continued growth. The McKinsey Global Institute projects China's middle class will increase from 43% of the population today to 76% by 2025. "The shift from investment to increasing consumption overall -- and as a share of GDP -- is very important to sustainable growth in the long-term. China has maxed out on the input model," says Diana Farrell, the Institute's director. India has been more open to consumption, but like China it has a very high savings rate that Farrell says should be converted to consumer spending to strengthen the overall economy.

So, let's look at this. We have a huge consumer base which has been saving money and being dutiful in a way that the American consumer has forgotten. The global currency which will be in vogue, so long as we don't cave on some kind of supra currency, is the dollar. What is the one thing that runaway inflation kills more than anything else... savings my friends. My hypothesis is that the Chinese will continue purchasing T-Bills, but they are going to want a higher RoR. This will push interest rates up for the average consumer.

Of course, this is just a guess, but then again we never thought that the ChiComs would prattle on about wanting to diversify their portfolio. Time to bring back King Dollar. What I believe that Ben Bernanke will begin to do after the repayment of some of the TARP monies to the FED is gradually raise the FED interbank rates, we need to begin to suck up some of the excess capital that is floating around and get it into circulation. Hopefully, this will satisfy the Chinese as well as bring a little order back to incentives to save money. Investment will come later.

Soak the Rich, Lose the Rich

2009-05-18T17:06:00.000-04:00

In the WSJ today, Art Laffer and Steve Moore make a case that I have made in this space previously.
Of course, Dr. Laffer and Steve Moore do a better job of naming their piece.

Here's the problem for states that want to pry more money out of the wallets of rich people. It never works because people, investment capital and businesses are mobile: They can leave tax-unfriendly states and move to tax-friendly states.

And the evidence that we discovered in our new study for the American Legislative Exchange Council, "Rich States, Poor States," published in March, shows that Americans are more sensitive to high taxes than ever before. The tax differential between low-tax and high-tax states is widening, meaning that a relocation from high-tax California or Ohio, to no-income tax Texas or Tennessee, is all the more financially profitable both in terms of lower tax bills and more job opportunities.

Updating some research from Richard Vedder of Ohio University, we found that from 1998 to 2007, more than 1,100 people every day including Sundays and holidays moved from the nine highest income-tax states such as California, New Jersey, New York and Ohio and relocated mostly to the nine tax-haven states with no income tax, including Florida, Nevada, New Hampshire and Texas. We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts.

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

Martin Feldstein, Harvard economist and former president of the National Bureau of Economic Research, co-authored a famous study in 1998 called "Can State Taxes Redistribute Income?" This should be required reading for today's state legislators. It concludes: "Since individuals can avoid unfavorable taxes by migrating to jurisdictions that offer more favorable tax conditions, a relatively unfavorable tax will cause gross wages to adjust. . . . A more progressive tax thus induces firms to hire fewer high skilled employees and to hire more low skilled employees."

Of course, this is sort of an easy argument to make, as high tax and regulation states are hemorrhaging capital and upper middle class inhabitants. Of course, then this tax burden will fall on the middle class. Of course, here we see another case for a flat tax at the state level. If the Feds won't implicate one, maybe the incubators of democracy will. Of course, people will make the argument that if not for these high taxes to redistribute income, how will the lower classes be affected.

Those who disapprove of tax competition complain that lower state taxes only create a zero-sum competition where states "race to the bottom" and cut services to the poor as taxes fall to zero. They say that tax cutting inevitably means lower quality schools and police protection as lower tax rates mean starvation of public services.

They're wrong, and New Hampshire is our favorite illustration. The Live Free or Die State has no income or sales tax, yet it has high-quality schools and excellent public services. Students in New Hampshire public schools achieve the fourth-highest test scores in the nation -- even though the state spends about $1,000 a year less per resident on state and local government than the average state and, incredibly, $5,000 less per person than New York. And on the other side of the ledger, California in 2007 had the highest-paid classroom teachers in the nation, and yet the Golden State had the second-lowest test scores.

Of course, Dr. Laffer destroys this class warfare rhetoric and puts it into it's place. As always Dr. Laffer is a good read here

School Choice

2009-05-04T22:05:00.001-04:00

Another Fine video from my friends at Reason.tv

We can prop up failing industries but can't support a program which actually fucking works. This pisses me off so much. I would like to see some asshole defend this despicable move by the Obama Administration. If my President really wants ideas that work for education, vouchers work. As Twain says facts are stubborn things.

Update

From the Wall Street Journal Today:

See if you can follow this political syllogism. President Obama and his Education Secretary have repeatedly promised to support "what works," regardless of ideology. The teachers unions adamantly oppose school vouchers, whether or not they work. Ergo, Messrs. Obama and Duncan decide to end a D.C. school voucher program that works and force poor kids back into schools where Messrs. Obama and Duncan would never send their own children. What a disgrace.

Read the whole editorial here

The Road to Serfdom

2009-04-30T11:15:00.001-04:00

If you have never read F.A. Hayek's The Road to Serfdom, or even if you have, watch this

The site

GM won't go into bankruptcy

2009-04-28T15:53:00.000-04:00

From one of my favorite publications The Economist this afternoon Two passages of interest:

IN DECEMBER, when GM secured a large slice of government bail-out funds to keep it alive, the giant car company was jokingly dubbed Government Motors. The company’s latest—and most sweeping—restructuring plan, announced on Monday April 27th, could make the joke a grim reality. GM had until the end of May to present proposals to persuade America’s government to release billions more of taxpayers' dollars to keep it from the bankruptcy court. GM believes it has done the job already with a plan that gives the government a 50% stake in the firm. Now the important deadline is May 26th, by when the company’s creditors are supposed to agree to a deal which treats them far less generously.

This my friends is why Rick Wagoner had to go. No CEO worth his golden parachute would have devised a plan such as this; this makes GM a ward of the state and essentially launders taxpayer dollars to be paid out to the UAW through dividends and the continuing support of taxpayer dollars.

Despite protestations from the White House that the government had no desire to own or run a big car company, the politicians may have little choice but to get involved, if the deal goes through in its present form. The alternative might be to cede control to the UAW, the second-biggest shareholder, which is hardly blameless for GM’s current parlous state. Rumours also abound that a similar deal to avoid bankruptcy at Chrysler would see the UAW take a 55% stake in America’s third-largest homegrown car company. If so, it is unclear whether further concession from unions, if they are needed at the two carmakers, would be easier or harder to extract.

Standing in the way of restructuring outside of the bankruptcy courts are GM’s aggrieved bondholders. GM wants holders of just over $27 billion in unsecured debt to swap it for a mere 10% of shares in the company. If debts cannot be cut by 90% then GM will file for Chapter 11 bankruptcy protection. Bondholders smell an unsavoury deal cooked up between the UAW and Barack Obama, who had the union's support in last year’s election. Early signs suggest that the bondholders may conclude that they will do better to hope for a bigger pay-out in bankruptcy rather than agree to a deal on these terms.

It may be that by announcing the proposals early GM has left time for renegotiation with the bondholders. But the ferocity of their initial disapproval suggests that small sweeteners will not persuade creditors to change their minds. Bondholders face the prospect of a small stake in a clapped out car company run by a union-friendly government with a zeal for green cars that may not have much of a market. With that as an alternative, a gamble in a bankruptcy court may seem quite appealing.

If I were a bondholder in GM, I would hold off and allow them to go into bankruptcy court. Of course, with the way that we saw the FEDS handle the transaction of Merrill Lynch to BofA, the question becomes will the FEDS hold the bondholders feet to the fire in their quest for a "green" car company.

Read the article here.

I believe that this video covers it all.

Video H/T to Iowahawk

The Daily Twain

2009-04-23T10:09:00.001-04:00

Always do right. This will gratify some people and astonish the rest.

More people staying put than before.

2009-04-22T15:33:00.001-04:00

An interesting piece from the NY Times this afternoon. Two excerpts that I would like to comment on:

The Census Bureau reported that the annual rate at which people moved dipped last year to 11.9 percent, compared with 13.2 percent in 2007 and a recent high of 20.2 percent in 1984-85. It was the lowest rate since the bureau began measuring mobility six decades ago.

The declines appeared to be directly related to the housing slump and the recession.

“It represents a perfect storm halting migration at all levels, since it involves deterrents in local housing-related moves and longer distance employment-related moves,” said William H. Frey, a demographer with the Brookings Institution.

The decline in housing prices, as well as the home ownership rate being higher than ever before, makes it less likely that people will strike out like the Joads looking for their fortune elsewhere. These individuals who currently own homes and are "underwater" would, if they were just renters, strike out to another area of the country. This isn't the case. There is a dis-incentive for these individuals who are upwardly mobile to want to take the hit that walking away from a mortgage would do to their credit score, fiscal situation, etc. It's simple cost benefit analysis. If you rent, breaking the lease is simply monetary. As a homeowner your responsibility is not just the bank, who is the de-facto landlord. It is also to the municipality which collects taxes and other assorted fees from the homeowner for the general upkeep of the neighborhood. In the situation as a homeowner, those who choose to walk away from the home come out in the negative, even if they move to a lower tax and more economically viable neighborhood. Even with the loss of money in the current home owning situation the benefit is in staying in the current situation. Essentially they are trapped.

In 2008, the bureau said, 35.2 million people changed residences, compared with 38.7 million the year before.

People who moved were more likely to be unemployed, renters, poor and black. Those surveyed listed their reasons for moving as housing, family and job, in that order.

In all, 2.2 million people moved to the suburbs last year, while the major cities lost 2 million people.

The South recorded the largest net gain of people moving in, including a large influx of blacks. While the South also drew more children than any other region, it also lost more.

The Northeast lost the most residents of any region, as it has for years, but the West also registered a decline.

Two pieces of this snippet I want to comment on here. First, the south recorded the largest percentage of people moving into the region, while we saw a decline in the Northeast as well as the west. In regards to the Northeast. Here we have a high tax, high regulation block of states which has put the stranglehold on housing(rent control, public housing, subsidized housing, thus driving up the actual cost of housing across the board)as well as business; Also the state budgets grew larger through legacy costs as well as increased welfare payments. Now, the people who are supposedly benefiting from this welfare state are, as Friedman would say, voting with their feet. Also, we see high-income earners moving from high tax states like NY and Massachusetts to lower tax states. These two classes are in essence "going Galt." The social utopia that the do-gooders have created in these states is driving those at the extremes of the income scale out of the states and putting the burden for this ever-growing government on the middle class, who are the real drivers and creators of economic growth. It will be interesting to see how all of this shakes out.

The beginning of Corporate Capitalism

2009-04-22T12:39:00.001-04:00

From National Review Online: My man Larry Kudlow

An old friend e-mailed me this week about how to characterize Obama’s economic interventions into the banking and auto sectors (with health care next on the list). He says it’s not really socialism. Nor is it fascism. He suggests it’s state capitalism. But I think of it more as corporate capitalism. Or even crony capitalism, as Cato’s Dan Mitchell puts it.

It’s not socialism because the government won’t actually own the means of production. It’s not fascism because America is a democracy, not a dictatorship, and Obama’s program doesn’t reach way down through all the sectors, but merely seeks to control certain troubled areas. And in the Obama model, it would appear there’s virtually no room for business failure. So the state props up distressed segments of the economy in some sort of 21st-century copy-cat version of Western Europe’s old social-market economy.

So call it corporate capitalism or state capitalism or government-directed capitalism. But it still represents a huge change from the American economic tradition. It’s a far cry from the free-market principles that governed the three-decade-long Reagan expansion, which now seems in jeopardy. And with cap-and-trade looming, this corporate capitalism will only grow more intense.

As always, Larry Kudlow makes some fine points and doesn't break down into mass hysteria or ridiculous populism. Although I would make one point. With the EPA designating carbon dioxide as a green house gas and impending cap-and-trade(which more than likely will not pass in it's current incarnation; I hope)the government will have a dictatorial hand in the day-to-day operations of business. Now, of course this is not a dictatorship in the everyday vernacular; however, what we are seeing is a "market" created and administered by the FEDS which will be oppressive to economic growth. There must be risk that comes with whatever "reward" our new titans of industry in Washington D.C deem is ok. Government should be equalizing the market by setting rules for business to work within that will not stymie growth. That doesn't appear to be the case.

Kudlow; as always a great read here.

The Daily Twain

2009-04-22T11:02:00.000-04:00

Always acknowledge a fault. This will throw those in authority off their guard and give you an opportunity to commit more.

A Back door to Nationalization

2009-04-20T10:45:00.000-04:00

A Headline from the NY Times, U.S. may convert bank bailouts to common stock:

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

Any person who is worried about undo political influencing decisions about who should and should not be extended credit should shutter at the thought, even implication of bank nationalization. The Obama administration, and the President himself have tried to stay away from any talk of nationalizing the banks as the political hit that will arise from a power grab of this magnitude would sink even his ratings. How does the government "vote" at shareholder meetings? Will congress now be the largest shareholder, pushing aside private capital? These are serious questions that need to be addressed.

Read the entire article here

The Daily Twain

2009-04-20T09:07:00.001-04:00

A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.

Reason TV

2009-04-17T11:28:00.000-04:00

As always, an excellent video from my friends at Reason.tv

The Daily Twain

2009-04-17T09:33:00.000-04:00

I have never let my schooling interfere with my education.

An Excellent Website

2009-04-16T16:52:00.001-04:00

From the Claremont Institute

Founding.com

George Will in "Fine" form

2009-04-16T12:36:00.000-04:00

Here is a good one from the Washington Post today:

Denim is the carefully calculated costume of people eager to communicate indifference to appearances. But the appearances that people choose to present in public are cues from which we make inferences about their maturity and respect for those to whom they are presenting themselves.

Do not blame Levi Strauss for the misuse of Levi's. When the Gold Rush began, Strauss moved to San Francisco planning to sell strong fabric for the 49ers' tents and wagon covers. Eventually, however, he made tough pants, reinforced by copper rivets, for the tough men who knelt on the muddy, stony banks of Northern California creeks, panning for gold. Today it is silly for Americans whose closest approximation of physical labor consists of loading their bags of clubs into golf carts to go around in public dressed for driving steers up the Chisholm Trail to the railhead in Abilene.

I don't know whether I'm laughing at myself or with GW for having people read this.

Read it all here

Update

For the no one who reads this blog, this will waste minutes of your life.

The Daily Twain

2009-04-16T09:13:00.001-04:00

I have been through some terrible things in my life, some of which actually happened.

Note to self: Don't Fuck your cousins

2009-04-15T18:37:00.000-04:00

From the UK Telegraph:

Inbreeding caused demise of the Spanish Habsburg dynasty, new study reveals

The study found that nine out of 11 marriages over the 200 years were between first cousins or uncles and nieces, producing a small gene pool that made rare recessive genetic illnesses more prevalent.

Only half of the babies born to the dynasty during the period studied lived to see their first birthday, compared with about 80 per cent of children in Spanish villages at the time.

Also, we have found a few pictures of the last remaining members of the Hapsburg family.

Stress Tests and the Bank Situation

2009-04-15T10:29:00.000-04:00

A good news piece from the WSJ this morning talking about the results of the Treasury's "Stress Tests" and how to handle the findings.

The Obama administration is considering making public some results of the stress tests being conducted on the country's 19 largest banks, said people familiar with the matter, a move that could help more clearly separate healthy banks from the weaklings.

Until now, the government has tried to treat all banks equally, pouring cash into both strong and struggling institutions to prop up the financial sector. The strategy has provided cover for beleaguered banks, which received funds along with their stronger brethren.

What the government has done through TARP and the capital injections has been to treat all banks that could be considered a systemic risk as though they all have, or might get the flu. The idea being that by inoculating all the banks with extra cash they will continue to lend.

This possible move, combined with first-quarter bank earnings and the push by some financial institutions to raise new capital and repay their bailout funds, could lay the groundwork for a new phase in the financial crisis. Within weeks, the stronger banks could emerge free of government shackles and flush with new funds, with weaker ones still reliant on federal largesse. That would transform how investors and the government view the financial sector.

Since announcing the stress tests earlier this year, the government hasn't made clear what, if anything, would be disclosed about the assessments. The Treasury originally suggested it would defer to individual banks to disclose results. But some regulators worried about banks selectively leaking information, causing a possible bias against rivals.

We should look at how these findings are released to investors, as we don't want to have a run on the weaker financial institutions. The truth is that we have signed up to support the flu-ridden banks until they get better. This is the fundamental problem with the intervention by the government. Banks that would have continued lending through the crisis and not over-leveraging themselves have been almost forced to over-leverage their balance sheets as the FEDS are forcing them to extend credit as a condition of the TARP funds. This is why the banks that are strong are doing everything possible to get out of TARP.

The stress tests were designed to build confidence that the nation's largest banks could weather a severe and prolonged economic downturn. Regulators are trying to determine how much assistance banks might need to continue lending in such circumstances. Banks that need more capital will get six months to raise it from private investors or take cash infusions from the government.

Banks not under the TARP protection will have an easier time raising capital than a large bank, like Citi, for instance. Investors know that the FEDS are in the capital injection game for the long-haul and are the lender of last resort. They should just drop the six months provision. They won't get the money from the market. We are trying to cure the flu with anti-biotics.

A senior U.S. Treasury official said the government will accept repayment of rescue funds from any institution whose regulator dubs it healthy enough to operate without federal capital.

The move to stop treating banks equally is sparking concern about the effect on specific institutions seen as weaker than peers. "You can create a run on a bank pretty quickly," said Eugene Ludwig, chief executive of consulting firm Promontory Financial Group and a former Comptroller of the Currency.

Of course you can create a run on a bank, just ask Chuck Schumer. However, I was under the impression that we increased the FDIC deposit insurance amount to $250,000 to prevent runs on the bank. What the government needs to do is make the "stress test" information available to the public so that they can choose what to do with their money.

Wayne Abernathy, executive vice president of financial institutions policy and regulator affairs at the American Bankers Association, said the government needs to provide information about the results but also protect examination data.

"I don't think they can ignore the appetite they have created for this information," Mr. Abernathy said. Having the government publicize some information would allow policy makers to control the message. "It's what can we say that is meaningful while still protecting the quality of that exam data," he said.

Mr. Ludwig cautioned that any information could give rise to mischief. "Bank exams are confidential for good reason," he said. "Given the kind of confidential information they contain, there is always the possibility of misuse or misinterpretation."

I fear that we will have some bad news come out of the release of the stress test results. Of course then again, the banks are lending free money so even a moron could make money, but we will see.

The Daily Twain

2009-04-15T09:39:00.001-04:00

I have a higher and grander standard of principle than George Washington. He could not lie; I can, but I won't.

We need to have Dolphins with Lazers on them to fight the pirates.

2009-04-15T09:28:00.000-04:00

I thought about this

Upon reading this.

The Chinese merchant ships escorted by a China's fleet sailed on the Gulf of Aden when they met some suspected pirate ships. Thousands of dolphins suddenly leaped out of water between pirates and merchants when the pirate ships headed for the China's.

The suspected pirates ships stopped and then turned away. The pirates could only lament their littleness before the vast number of dolphins. The spectacular scene continued for a while.

What the story doesn't cover is how the laser equipped dolphins melted the medulla oblongata of the Somali pirates. Sweet.

In honor of my more conspiratorial friends

2009-04-15T09:21:00.000-04:00

Upon reading this story in the Washington Times yesterday, I got to thinking...

Enjoy...

Somebody's watching me

Kentucky Grilled Chicken... Popeye's is sounding better every day.

2009-04-14T16:19:00.000-04:00

From the AP:

In a culinary gambit backed by buckets of big money, KFC is hoping to replicate its founder's recipe for success with the national introduction of Kentucky Grilled Chicken.

Get it, buckets of money, like chicken.

This week's rollout is KFC's most ambitious attempt to win over health-conscious customers as the chain known worldwide for fried chicken tries to reinvigorate lackluster U.S. sales.

"It's going to get people who haven't eaten KFC for a long time to come back into our restaurants," said KFC President Roger Eaton. "It's going to get people who have never eaten KFC to come into our restaurants."

I'm sure that the grilled chicken and veggie crowd are going to look forward to sharing dining space with guys named Skeeter and the average red-state voter. Hey, great idea, they could come up with a KGC "Famous Bowl" which could consist of the grilled chicken, soy gravy, tofu and alfalfa sprouts. There's a winner. I'm sure Skeeter would sign right up.

KFC's slow-grilled chicken drew strong reviews from the lunchtime crowd Monday at a KFC restaurant in Louisville, the chain's hometown. Eddie Collard proclaimed grilled better than fried.

"I think the colonel would be happy," Collard said of KFC founder Colonel Harland Sanders.

Like its predecessor, Kentucky Grilled Chicken has its own secret recipe. The original copy of the recipe — a blend of six herbs and spices — will be kept in an electronic safe at company headquarters. It will sit alongside Sanders' handwritten recipe of 11 herbs and spices coating the chain's Original Recipe fried chicken.

The difference is in the nutritional numbers.

I like the line about how the Colonel would be happy with the new recipe for the grilled chicken. Personally, I think he is rolling over in his grave, rotisserie style. IT'S CALLED KENTUCKY FRIED CHICKEN.

Mike Ash, who ate a grilled chicken lunch at the Louisville KFC, remembered the rotisserie chicken as "mushy and bland." He liked the new grilled offering, having picked it to the bone.

He said he might be more apt to pick up a bucket of chicken on his way home, though he predicted he might still "fall off the wagon every now and then" and choose the fried option.

The grilled chicken will cost the same as Original Recipe chicken. KFC will offer customers a free piece of grilled chicken on April 27.

But the push for grilled chicken doesn't mean KFC is abandoning its roots, Eaton said. The chain is testing new fried chicken products, and remains committed to its core product.

"It would be incredibly arrogant to think we could create a product that could supersede Original Recipe chicken," Eaton said. "But this product is easily good enough to sit alongside it."

Hey, KFC big-wigs, here is some market research for you. The reason that people like myself stop by KFC for a bucket of fried chicken is because frying chicken at home is a pain in the ass. Any moron can grill chicken. Hell, my son can grill chicken and he's not yet three. Even better, I think that Colonel Sanders, the dead guy, could probably grill chicken.

Anyway, I'm looking forward to this experiment falling to the way-side like the Fruit Cup offering at Wendy's and fast-food chains offering granola bars instead of fries. Follow the Hardee's example, I would eat the grilled chicken, after they fry it.

Surpise! Captain Phillips spent time at sea with Pirates discussing Pirate movies.

2009-04-14T09:43:00.001-04:00

In a surprising news story this morning, the soon to arrive hero revealed in an interview this morning that he was able to survive his harrowing detainment by Somali Pirates through their shared love of pirate movies.

"I have to tell you," Captain Phillips shared with Skip Parsons, intrepid reporter for the Aden Times, "those Pirates really had a good taste in pirate movies." Captain Phillips went on to explain how he felt about the possibility that he may have been taken back to the Somali Pirates Lair on the mainland. "Any time that you are with new people, you need to find some common ground. We found that on our shared appreciation of the Pirates of the Caribbean Movies. The youngest pirate I gave the nickname of Will Turner, and the most effeminate of them I gave the nickname of Elizabeth Turner. Like they were married or something. Everyone got a real giggle out of that one." Upon discovering that he may be held hostage, Captain Phillips was light-hearted as usual. " The Pirates kept telling me about how they really thought the best Pirate movie of all Time was Cutthroat Island, with Geena Davis and Matthew Modine."

Captain Phillips went on to explain how he would have felt about being held hostage. " Well, the prospect of being held hostage was frightening, but I wanted to make the best of the situation if possible. Also, the girly pirate, you know the Elizabeth Swann character, was telling me that if I didn't like Cutthroat Island when I first saw it, I should watch it in Blu-Ray. He said it would blow my mind."

The press corps were interested in this, "Captain Phillips, as Somalia is a dirt-poor country, where did they think that they were going to get a Blu-Ray player with the home-theater system to truly enjoy the movie."

Captain Phillips replied, " Well, I thought the same thing myself, but the Will Turner pirate told me that they were expecting a delivery of Blu-Ray players and home-theater systems later this month."

More details to come

The Daily Twain

2009-04-14T09:16:00.000-04:00

I don't give a damn for a man that can only spell a word one way.

Breaking News, Vince the Sham-Wow Guy used the Slap Chop to beat up hooker who bit his tongue.

2009-04-13T17:30:00.000-04:00

In an interesting bit of news, we here at Free-Market Libertine have gotten breaking news about the case.

This bit we learned from the Smoking Gun.

Shlomi told cops he paid Harris about $1000 in cash after she "propositioned him for straight sex." Shlomi said that when he kissed Harris, she suddenly "bit his tongue and would not let go." Shlomi then punched Harris several times until she released his tongue.

What we have recently uncovered in new court documents is that Shlomi used the Slap Chop to beat up Ms. Harris and tried to clean up the bloody crime scene with the sham-wow. In a shocking revelation which is sure to affect sales for both items, Vince kept asking if Ms Harris, "liked his chopped up nuts" while rambling incoherently while in court for his arraignment.

In lighter news, apparently Phil Spector, O.J. Simpson and Robert Blake have ordered the Slap Chop and Sham-Wow shammies

Goldman posts profit, will raise $5 Billion through stock offering to pay back TARP Funds

2009-04-13T16:58:00.000-04:00

A news alert from the NY Times:

Goldman Sachs, the first of a string of banks to announce first quarter results over the next few weeks, also said it intends to raise $5 billion in common stock from the public. The bank said that new capital would help it return the $10 billion in government aid that it received last fall. Goldman will need approval from regulators to return the taxpayer capital.

In other news, an unnamed source within Goldman Sachs stated that the company was looking forward to running as far away from the Treasury Secretary as humanly possible.

GM possibly filing for bankruptcy

2009-04-13T16:17:00.000-04:00

An interesting news story...

The White House-appointed autos task force has given GM 60 days to come up with a restructuring plan and it is trying to determine whether the automaker can be a viable company.

Quoting sources who had been briefed on the GM plans, the Times said the goal was to prepare for a fast "surgical" bankruptcy.

The newspaper said preparations are aimed at assuring a GM bankruptcy filing is ready if the company is unable to reach agreement with bondholders to exchange roughly $28 billion in debt into equity in GM and with the United Automobile Workers union.

A plan under consideration would create a new company that would buy the "good" assets of GM after the carmaker files for bankruptcy, the Times said.

Less desirable assets, including unwanted brands, factories and health care obligations, would be left in the old company, which could be liquidated over several years, according to the paper.

In the finest example of "new-speak," at least today, we are told that GM needs to be ready for a "surgical" bankruptcy. Or those of us who aren't morons like to call it, the bondholders getting hosed and the UAW getting a cash settlement before moving over to the "new" company.

What I love is how when a company screws the pooch like GM has done, the government needs to step in and create a "new" company to purchase the "good" or "bad" assets of companies that fail as they pose a systemic risk to the system. This used to be handled by the market-place through what is referred to as "creative-destruction," but obviously we are not smart enough to know what is good and what is shit.

Insulting. Here's an idea. How about a "new" company not involved with the FEDS "buys" GM and proceeds to "shed dead weight" or tell the unions to "piss against an electric fence" as a "good" company makes GM "profitable." Now, I know this sounds crazy, but I think that it has worked before. Here's another crazy idea. Maybe we should hop in our way-back machine and bail-out the buggy whip industry. The market needs to work. This is not a free-market.

Jury reaches verdict in Phil Spector case... Botox industry worried it will lose it's best client

2009-04-13T15:35:00.001-04:00

In a breaking story from Los Angeles, the jury for the Phil Spector murder trial have reached a verdict.

After hearing about a possible verdict for Spector, we contacted Sindy "Stretch" Hawkins, the national spokesperson for the Botox industry.

We aren't too terribly worried about the loss of Mr. Spector's business," Ms. Hawkins tried to say through a clenched jaw. " We are currently beginning to work closely with the embalming business to try and expand our market share. From the looks of it, Mr. Spector may already be working with an embalmer."

More to follow.

Everyone should pay Income Taxes...

2009-04-13T11:32:00.000-04:00

So says Ari Fleischer:

Congress should start by refusing to go along with Mr. Obama's promise to cut taxes for 95% of the country. With the government running an almost $2 trillion deficit, no one should have their taxes cut -- no one. Given the size of the deficit, fiscal responsibility demands nothing less.

Republicans in Congress need to develop their own version of an Economic Growth Code, an alternative tax code that directly targets the current mess and helps us to grow our way out of it. Republicans should not doodle in the margins -- they should use their minority status to launch the next big movement in policy and politics. Nothing creates revenue like growth and that's where Republicans should make their mark.

I favor the abolition of all Social Security, Medicare and estate taxes. In their place, we should create a simple income tax system that has no deductions or credits at all. The result would be a progressive, multitiered income tax in which everyone pays. The bottom 50% won't be excused from paying the cost of government and top earners will no longer have the loopholes they're used to. The middle-class, whose wages have stagnated, will benefit from economic growth. Social Security and Medicare will be funded from income taxes, ending the myth that these programs are supported through government trust funds and payroll taxes. The tax base will broaden dramatically, allowing rates to fall and helping to foster what's most important -- economic growth.

I'd also create a mechanism so tax rates go up or down for everyone -- no more dividing the country by lowering taxes for some or raising them only for others. A revenue system whose purpose is to pay the government's bills should apply fairly to one and all. If Congress wants to raise or cut taxes, it should do so for everyone.

Another benefit is that such a system will create an environment in which spending programs receive the scrutiny they deserve. It's funny what happens when everyone pays the bills; Americans may want less spending so they can pay fewer bills.

Fleischer makes several well heeled points in his editorial. First, the idea that everyone should pay income taxes reminds me of the great Alexis De Tocqueville quote, "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money." By having the tax burden fall equally upon the individuals in our Republic, it will be much harder for Congress to bribe the people as they will have to pay for whatever "goodies" that the people vote for themselves. This is a valid point in todays world as we will have all of the income taxes paid by a minority of the people of the country.

The thing that we need to remember about taxes is that it is the usury fee for general use of the government. The perverse thing is, as Fliechser points out in his piece, is that the people receiving the lion's share of government largess are the ones who pay no tax. What is the incentive for these individuals to work harder, save and invest to move up in society when the perverse incentive keeps individuals on the teat.

Again, I would call for a negative income tax to ease the transition into the tax paying base in a laissez faire economy. I can dream can't I.

Israel may lay the smackdown on Iran

2009-04-13T10:44:00.000-04:00

Per the JPOST:

In an interview with Kol Hai Radio, Peres also said that the arrest before the weekend of a Hizbullah terror cell in Egypt was a blow to Iranian President Mahmoud Ahmadinejad's power.

"Ahmadinejad recruits forces against us, but there are also forces against him," Peres said. "What happened in Egypt created a fierce opposition and we must unify all his opponents - the Sunnis and the Europeans, as well as those afraid of nuclear weapons and terror."

Wow, you mean that Iran is not a peaceful republic which has given so much to the world. At least, they were the villains in 300. Maybe, the way to deal with them is how the Spartans did at Thermopylae.

Peres went on to say that he hoped Obama's call for dialogue with Ahmadinejad would be heeded, but warned that if such talks don't soften the Iranian president's approach "we'll strike him."

I know some bad-ass planes we can sell to the Israelis. Also, it will keep some sweet, sweet jobs in the U.S.

We need to support the Israeli's as it advances our own interests in the region. The question is will it be done, and will the U.S. provide the support that the Israeli's need.

Come on Down to Timmy Geithner's PayDay Loans

2009-04-13T09:46:00.000-04:00

An excellent piece from the NY Times over the weekend:

Douglas Leech, the founder and chief executive of Centra Bank, a small West Virginia bank that participated in the capital assistance program but returned the money after the government imposed new conditions, said he complained strongly about the Treasury Department’s decision to demand repayment of the warrants. That effectively raised the interest rate he paid on a $15 million loan to an annual rate of about 60 percent, he said.

“What they did is wrong and fundamentally un-American,” he said. “Even though the government told us to take this money to increase our lending, the extra charge meant we had less money to lend. It was the equivalent of a penalty for early withdrawal.”

Stephanie Cutter, a spokeswoman at the Treasury Department, said it did not comment about the participation of specific banks in the plan or their efforts to exit the program.

Personally, I could give a hoot in hell that these bankers don't like that the government doesn't want to provide them with a reach-around as they try to escape the government shower room where they have been receiving frequent capital injections. Hank Paulson played Vito Coreleone with these bankers last fall, telling them that they had to take capital injections to keep credit flowing. Now, the banks which have been solvent, and will continue to be solvent are forced to pay a large settlement that is equal to a 60% interest charge on the money that was forced on them to get out from under the government's "protection."

Perhaps when these banks were told that they had to do this they could have said, "no." Would that have been so difficult. Saying no to Uncle Sam and telling them that they would allow the market to sustain or destroy them. That is the problem with the bail-out culture that we see ourselves in now. Us plebians could have told anyone of these titans of industry that by getting into bed with Hammerin' Hank and his capital injections would lead to government control over their operations. These bankers should pay the penalty and take it on the chin, proverbially. Government intervention will only lead to more government intervention, as the wheels of bureaucracy can't react to the market the way that a company without political interests can. That is the rub, since these banks have received TARP money, they are political whether they want to be or not. The best outcome is that these banks pay the fine and run as far away from the FEDS as possible

The Daily Twain

2009-04-13T09:11:00.001-04:00

I didn't attend the funeral, but I sent a nice letter saying that I approved of it.

Great name for a new Bravo TV show... Trade Wars

2009-04-10T16:13:00.000-04:00

It could run right after the Real Housewives of Orange County.

From the WSJ:

Mr. Obama acquiesced in Congress's unilateral rewriting of Nafta earlier this year, despite warnings of potential retaliation. Well, last month Mexico responded with a 20% tariff on select U.S. products, including pears, cherries, apricots and Christmas trees. The Capital Press agriculture Web site reports that pear exports to Mexico have already "ground to a halt" as importers stop buying them because of the cost and uncertainty. That's a potential annual loss of $50 million to $60 million in U.S. pear exports alone. "If we have that 20% tariff and Argentina enters the market, it could hurt our ability to ship fruit the rest of the season," said Jeff Correa, of the Pear Bureau Northwest.

That's how trade wars work. A tariff imposed to please a powerful domestic constituency leads to retaliation that whacks innocent bystanders who lack the ear of the White House or Speaker of the House. In this case, a payoff to the Teamsters stuffed in a spending bill has now become a hardship for the farm growers and workers of Oregon. We elect Presidents to stop this kind of economic damage, not to promote it.

Amateurs running the show.

The Daily Twain

2009-04-10T11:27:00.001-04:00

Honesty is the best policy - when there is money in it.

Because it's Friday

2009-04-10T11:17:00.000-04:00

Morris Day and the Time

SURPISE! Banks lending nearly free money from the FED turn a profit

2009-04-09T17:27:00.001-04:00

You mean by responsibly charging more for a commodity than you paid for it means you can turn a profit.

Investors have been grasping at any sign of improvement in the crippled banking industry, and Wells Fargo's report Thursday that it expects first-quarter earnings of $3 billion provided an encouraging sign that a deep freeze in borrowing activity may finally be thawing. Wells Fargo said it benefited from its January acquisition of Wachovia and an increase in mortgage applications.

What is most laughable is that even though these moron's are getting at least a 5% return on the loans they are making, the investor's still are afraid that they can't "unfreeze" the credit system. The system is frozen for those of us who were irresponsible and need a fresh infusion of credit to right the ship. This smells like profit-taking to me.

It could be worse...

2009-04-09T16:32:00.000-04:00

This is depressing...

Only 53% of American adults believe capitalism is better than socialism.

Just a little over half of the population if the UNITED STATES OF AMERICA believe capitalism is better than socialism. As WFB used to say, the problem with capitalism is the capitalist and the problem with socialism are the socialists. Although do not fret...

Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided. Thirty-somethings are a bit more supportive of the free-enterprise approach with 49% for capitalism and 26% for socialism. Adults over 40 strongly favor capitalism, and just 13% of those older Americans believe socialism is better.

Investors by a 5-to-1 margin choose capitalism. As for those who do not invest, 40% say capitalism is better while 25% prefer socialism.

There is a partisan gap as well. Republicans - by an 11-to-1 margin - favor capitalism. Democrats are much more closely divided: Just 39% say capitalism is better while 30% prefer socialism. As for those not affiliated with either major political party, 48% say capitalism is best, and 21% opt for socialism.

At least the free-enterprise system is still more popular. Also in a more generic poll 70% of respondents prefer free-enterprise. Maybe they mistook socialism and free-enterprise by the modifier "free."

I'm going to have a beer...

The Daily Twain

2009-04-09T11:02:00.001-04:00

Habit is habit and not to be flung out of the window by any man, but coaxed downstairs a step at a time.

Kim Jong-Il

2009-04-09T10:43:00.000-04:00

Ain't elections grand. Kim Jong-Il just broke the record for highest percentage of the popular vote by unanimously being re-elected to a third term as Supreme Leader of North Korea.

What is most impressive is that the Dear Leader actually received a larger percentage of the poplar vote than good old Saddam did in the hey-day of the Iraqi dictatorship. Is it just me or can you not wait for these goons to croak.

Stop Spending our Future

2009-04-09T10:38:00.000-04:00

Excellent

The Website

The Daily Twain

2009-04-08T09:50:00.001-04:00

Grief can take care of itself, but to get the full value of a joy you must have somebody to divide it with.

Nukes in the neighborhood

2009-04-07T12:22:00.000-04:00

An excellent, as usual, lead editorial from the Wall Street Journal today about the fantasy that is the President's "nuke free world."

"And I had an excellent meeting with President Medvedev of Russia to get started that process of reducing our nuclear stockpiles, which will then give us a greater moral authority to say to Iran, don't develop a nuclear weapon; to say to North Korea, don't proliferate nuclear weapons," Mr. Obama said, implying that previous American Presidents had lacked such "authority."

The President went even further in Prague, noting that "as a nuclear power -- as the only nuclear power to have used a nuclear weapon -- the United States has a moral responsibility to act." That barely concealed apology for Hiroshima is an insult to the memory of Harry Truman, who saved a million lives by ending World War II without a bloody invasion of Japan. As for the persuasive power of "moral authority," we should have learned long ago that the concept has no meaning in Pyongyang or Tehran, much less in the rocky hideouts of al Qaeda.

The truth is that Mr. Obama's nuclear vision has reality exactly backward. To the extent that the U.S. has maintained a large and credible nuclear arsenal, it has prevented war, defeated the Soviet Union, shored up our alliances and created an umbrella that persuaded other nations that they don't need a bomb to defend themselves.

I love the idea that by reducing our nuclear stockpile, which has prevented war as well as massive proliferation, will give us the moral authority to tell Tehran to not continue with their weapons program. This makes about as much sense as the crazy old man in your neighborhood getting rid of his rottweiler and shotgun from his front porch and expecting the kids to not play on his lawn. I can imagine just how shocked he would be when, surprise, they proceed to go rooting in his front yard and upturning his petunias.

The moral authority of the United States doesn't come from agreeing to get rid of our stockpile of nukes, but from our saving the world from itself on numerous occasions within the 20th century. Also, we did invent the snuggie, along with a host of other items which have made the world a better place, up to and including the Slap-Chop, the Sham-Wow as well the Big City Slider Station. Should we agree to rid the world of our consumer durables? I think we would have more authority by agreeing to send Billy Mays and Vince the Sham-Wow guy to Gitmo than we would by apologizing for our use of an atomic bomb and destroying our deterrent which has, cost benefit wise, saved more lives than any conventional weapon in modern history.

What the current administration doesn't understand, or probably won't admit, is that the world is a dangerous place. The kids that want to play in our front yard don't care about upturning our petunias as much as destroying the moral order of our garden. The rottweiler and shotgun of our yard are nuclear weapons and a missile shield. I hope my President begins to understand this point.

Barack Bucks!

2009-04-07T09:34:00.000-04:00

Form the USA Today, er, today;

Communities print their own currency to keep cash flowing

"We wanted to make new options available," says Jackie Smith of South Bend, Ind., who is working to launch a local currency. "It reinforces the message that having more control of the economy in local hands can help you cushion yourself from the blows of the marketplace."

So the plan is to use these Barack Bucks to help local business' weather the recession. Why not cure two birds with one stone. How about you can use the Barack Bucks to purchase an automobile.
Hold on, South Bend is pretty close to Chicago... I think I know someone who may need a job in this current recession.

I got what this is really about; you can use the Barack Bucks down at Crazy Uncle Jeremiah's Auto Show-Place...

"With all of the savings of Barack Bucks, all my customers are coming home to ROOST!"

The Daily Twain

2009-04-07T09:26:00.001-04:00

Get your facts first, and then you can distort them as much as you please.

The Great Mustache Speaks

2009-04-06T15:22:00.000-04:00

Is there any better expert on Foreign Policy matters than John Bolton?

What the Security Council will ultimately produce is of course uncertain -- but resolutions almost never get tougher as the drafting and negotiations proceed. Even worse than a weak resolution would be a "presidential statement," a toothless gesture of the Council's opinion. Either way, North Korea has again defied the Security Council, gotten away with its launch with the support of Russia and China, and now will likely confront only pleas by Mr. Obama and others to return to the six-party talks.

Those talks are exactly where North Korea wants to be. From them ever greater material and political benefits will flow to Pyongyang, in exchange for ever more hollow promises to dismantle its nuclear program.

So far, therefore, the missile launch is an unambiguous win for North Korea. (Although not orbiting a satellite, all three rocket stages apparently fired, achieving Pyongyang's longest missile flight yet.) But the negative repercussions will extend far beyond Northeast Asia.

Iran has carefully scrutinized the Obama administration's every action, and Tehran's only conclusion can be: It is past time to torque up the pressure on this new crowd in Washington. Not only is Iran's back now covered by its friends Russia, China and others on the U.N. Security Council, but it sees an American president so ready to bend his knee for public favor in Europe that the mullahs' wish list for U.S. concessions will grow by the minute.

Israel must also be carefully considering how the U.S. watched North Korea rip through "the international community." The most important lesson the new government headed by Prime Minister Benjamin Netanyahu should draw is: Look out for No. 1. If Israel isn't prepared to protect itself, including using military force, against Iran's nuclear weapons program, it certainly shouldn't be holding its breath for Mr. Obama to do anything.

Russia and China must also be relishing this outcome. They will have faced down Mr. Obama in his first real crisis, having provided Security Council cover for a criminal regime, and emerged unscathed. They will conclude that achieving their large agendas with the new administration can't be too hard. That conclusion may be unfair to the new American president; but it will surely color how Moscow and Beijing structure their policies and their diplomacy until proven otherwise. That alone is bad news for Washington and its allies.

Joe Biden the test has come sooner than expected.

Education in the Age of Obama

2009-04-06T12:20:00.000-04:00

From the Wall Street Journal; this is Education in the Age Of Obama...

Voucher recipients were tested last spring. The scores were analyzed in the late summer and early fall, and in November preliminary results were presented to a team of advisers who work with the Education Department to produce the annual evaluation. Since Education officials are intimately involved in this process, they had to know what was in this evaluation even as Democrats passed (and Mr. Obama signed) language that ends the program after next year.

Opponents of school choice for poor children have long claimed they'd support vouchers if there was evidence that they work. While running for President last year, Mr. Obama told the Milwaukee Journal-Sentinel that if he saw more proof that they were successful, he would "not allow my predisposition to stand in the way of making sure that our kids can learn . . . You do what works for the kids." Except, apparently, when what works is opposed by unions.

Mr. Duncan's office spurned our repeated calls and emails asking what and when he and his aides knew about these results. We do know the Administration prohibited anyone involved with the evaluation from discussing it publicly. You'd think we were talking about nuclear secrets, not about a taxpayer-funded pilot program. A reasonable conclusion is that Mr. Duncan's department didn't want proof of voucher success to interfere with Senator Dick Durbin's campaign to kill vouchers at the behest of the teachers unions.

The decision to let 1,700 poor kids get tossed from private schools is a moral disgrace. It also exposes the ugly politics that lies beneath union and liberal efforts across the country to undermine mayoral control, charter schools, vouchers or any reform that threatens their monopoly over public education dollars and jobs. The Sheldon Silver-Dick Durbin Democrats aren't worried that school choice doesn't work. They're worried that it does, and if Messrs. Obama and Duncan want to succeed as reformers they need to say so consistently.

This is what we get when the teacher's unions get in bed with democratic politicians. For the Obama administration, which prides itself on "data, not ideology" this is a shameless sop to the teacher's union's and unfortunately is probably a harbinger of what is to come with the Federal Governments involvement with GM and the UAW.

We have empirical proof of the success of school vouchers in providing opportunities for low-income students to escape the hell that is the public-school system which costs the taxpayer LESS than it does to put them in a failing public school, $7000 in vouchers vs. $14000 in a public school. This isn't change I can believe we can believe in, it's the same footsie game with the teachers unions that has been played for the last thirty years.

Also an excellent piece in the American by Jay Matthews is recommended to help stoke the fires of ire about this killing of a successful pilot program to please the unions.

Bernanke's "Green Shoots"

2009-04-06T11:05:00.000-04:00

From Bloomberg this morning.

The Labor Department’s April 3 report that the economy shed an additional 663,000 jobs last month, while the unemployment rate rose to 8.5 percent, will be followed by months more of bad-news headlines, economists say. The recession, now in its 17th month, has already cost 5.1 million Americans their jobs, the worst drop in the postwar era; unemployment may hit 9.4 percent this year, according to the median estimate in a Bloomberg News survey, and may top out above 10 percent in 2010.

The risk is that the jobs picture turns even more bleak than forecast or the drumbeat of bad news still to come causes consumers, whose spending has firmed up in recent months, to hunker down again.

“If something happens to spook consumers and they crawl back into their tortoise shells, that would be terrible news,” says Alan Blinder, former Fed vice chairman and now an economics professor at Princeton University.

Consumer spending, which accounts for more than 70 percent of the economy, rose 0.2 percent in February after climbing 1 percent in January, breaking a six-month string of declines.

“Whether the little wisps of improvement in spending are sustained needs watching,” says Stephen Stanley, chief economist at RBS Securities Inc. in Greenwich, Connecticut.

Interest Rates

Declining interest rates on mortgages and business loans led Bernanke, 55, to tell CBS Corp.’s “60 Minutes” on March 15 that he sees “green shoots” in some financial markets, and that the pace of economic decline “will begin to moderate.”

Fueled by optimism that the economy may finally be stabilizing, the Standard & Poor’s 500 Index last month gained 8.5 percent, the most in seven years. Still, “I would be careful about chasing this rally,” Jason Trennert, chief investment strategist at Strategas Research Partners in New York, said in a March 27 interview.

With the Obama administration borrowing to finance record budget deficits, U.S. debt sales will almost triple this year to a record $2.5 trillion, according to estimates from Goldman Sachs Group Inc.

The borrowings may send 10-year yields as high as 6 percent by the end of 2010 from 2.9 percent on April 4, Trennert says, adding that it’s “hard to get optimistic” about stock prices “if you’re in a situation where it’s reasonable to expect long- term interest rates to be higher.”

Stock-Price Plunge

Another plunge in stock prices is just one of the things economists say might derail any recovery. Others include the disorderly collapse of General Motors Corp., Chrysler LLC or a major financial firm; or the failure of the Obama administration’s bank-rescue plan.

A one-month jump in the jobless rate of more than 0.6 percentage point would be a severe blow to confidence, says Alan Blinder, former Fed vice chairman and now an economics professor at Princeton University. So would monthly job losses that continue to top 600,000 into the second half of the year, says Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania.

Payrolls have been shrinking by more than that every month since December. Losses need to come down below 500,000 in the next few months and drop close to 100,000 by year-end to confirm that the worst of the recession is over, Zandi says.

“If we continue to lose 600,000-plus jobs a month, that will burn out those green shoots pretty quickly,” he says. “If you lose jobs like that, it continues to undermine consumer spending and confidence.”

I think that Big Ben has this right. We are seeing lots of "green shoots" or "mustard seeds" that will lead to a long term economic recovery. We have a crash in energy prices, as well as retailers that are offering the barn to try and stoke retail sales upward again. Also, the low, low interest rates lead to an upturned yield curve for banks that are borrowing to responsible lenders so bank balance sheets are becoming less leveraged. Also, we want to remember that unemployment is a lagging indicator so going forward we shouldn't look at the last quarters numbers as much as at the leading indicators. Also, with bargains abounding in the stock market the bear hopefully will go into hibernation within the next few quarters.

All of the indicators are pointing to recovery in the financials, but we are still struck down by a bout of fear.I think that this is capital's fear of the impending tax hike as well as fear of hyper-inflation. The President should retreat from his call for tax hikes until the economy has recovered, as we can not afford to lose any capital investment that would come our way.

The Daily Twain

2009-04-06T10:55:00.001-04:00

Fiction is obliged to stick to possibilities. Truth isn't.

Wouldn't a world without mean people be nice too...

2009-04-06T10:32:00.000-04:00

From the Wall Street Journal this morning.

Speaking at Prague's Castle Square, Mr. Obama told the audience his administration was committed "to seek the peace and security of a world without nuclear weapons."

"We have to insist: 'Yes, we can,'" he said, reprising a campaign theme recognizable to a crowd a continent away from his election victory.

Sunday's speech followed a meeting Wednesday between Mr. Obama and Russian President Dmitry Medvedev, where the two leaders committed to conclude a new bilateral treaty that would reduce U.S. and Russian nuclear arsenals below the 1,700 to 2,200 deployed warheads agreed to in 2002.

Mr. Obama's strategy, however, also seeks to gain the support of developing nations by recognizing their right to develop nuclear power.

The Obama administration is specifically supporting the development of an international nuclear-fuel bank that aspiring nuclear-power states could tap to feed their reactors.

Such a system, say U.S. officials, would undercut demands of countries like North Korea and Iran that they need to develop their own infrastructure to produce nuclear fuel. Such technologies can be easily shifted into producing fissile material for nuclear weapons.

The President has a limited amount of political capital that he can use in both domestic and foreign affairs. Why he would choose to go into a former soviet Bloc country to call for an end to nuclear weapons in what amounts to not much more than a campaign speech is beyond me. The intention is good, but the steps to go about strengthening our position against Russian, Iranian and North Korean hegemony is not to pray for cats and dogs to live together in peace, but to take a substantiative stance against nuclear proliferation, including everything up to a missile defense shield in Eastern Europe as well as the possible use of force against those nations who would use nuclear capacity against there perceived enemies.

One thing that I have realized about the North Koreans is that they are willing to push the envelope but not to step to over the line. (Sorry about the mixed metaphors) In that regard, I believe that the President's response was appropriate. However, Iran is the big issue here. If this is a test, by proxy, of the President by the Iranians, unfortunately he came across in Carteresque fashion.

NY TIMES gets it wrong...Again

2009-04-06T09:32:00.000-04:00

This report from the NT Times this morning details the "failure" of the North Korean "satellite" launch over the weekend.

A disgraceful passage.

The command said that North Korea launched a Taepodong-2 missile at 11:30 a.m. Sunday local time, or 10:30 p.m. Eastern Daylight Time on Saturday, and that its first stage fell into the Sea of Japan, which analysts had expected as the point of splashdown in a successful launching.

However, “the remaining stages, along with the payload itself, landed in the Pacific Ocean,” the statement said. Analysts had expected the rocket’s second stage to land in the Pacific but its third stage and its ostensible satellite payload to fly into space.

The command emphasized that “no object entered orbit,” apparently a reference to both the rocket’s third stage as well as the supposed satellite.

North Korea’s public portrayal of the event as a complete success was similar in its celebratory tone to the happy note it struck in 1998 after having failed to loft a satellite into orbit.

News reports out of Japan also said the rocket’s second stage splashed down in the Pacific, hundreds of miles short of the danger zone that North Korea announced last month. Western analysts said that shortfall, if correct, probably indicated a failure of the missile’s second stage.

Does it occur to the "Newspaper of record" that the North Koreans weren't trying to launch a satellite. Perhaps they wanted to rattle the saber at the Japanese and President Obama, who was giving a vaunted, teleprompted speech about a world without nuclear weapons. I know that my liberal friends want to compare the President to Superman, but if he is Superman it is the Superman of the 4th shitty movie; Superman IV: The Quest for Peace

What the situation over the weekend reminds me of is a D.A.R.E officer giving a speech on a drug-free school system while the bad kids sit on the fire escape snorting coke. "Maybe if those bad kids heard how good the speech about the drug-free world is then why would they use drugs." I think that we would be able to stop the Dear Leader's saber rattling by beaming this into the country.

Another case of the Trailer being better than the movie

The Daily Twain

2009-04-05T19:06:00.001-04:00

Facts are stubborn things, but statistics are more pliable.

The Daily Twain

2009-04-04T09:33:00.000-04:00

Education: that which reveals to the wise, and conceals from the stupid, the vast limits of their knowledge.

Unemployment may be 8.5% but all I wanna do is dance!

2009-04-03T10:31:00.000-04:00

Because it's Friday

Economics of baseball

2009-04-03T09:37:00.000-04:00

From the AEI's magazine the American, an excellent piece on the economics of baseball and how markets work in a real world scenario.

A Recommended read

The Daily Twain

2009-04-03T09:18:00.001-04:00

Don't part with your illusions. When they are gone you may still exist, but you have ceased to live.

G-20 gives a Trillion

2009-04-02T15:48:00.000-04:00

The main Headline on Drudge this afternoon Super Pump: $1 Trillion to IMF, World Bank

An important bit which will not be mentioned. Boring but important:

Brown also says the 20 countries at the summit will enact common policies to crack down on tax havens, regulate hedge funds, and rebuild trust in the financial system to "prevent a crisis such as this from happening again."

He says the G-20 nations will also give emerging powers a greater say in the world economy.

Brown did not outline any new fiscal measures but says that the stimulus packages already announced by major nations have already been the biggest in history.

Obviously, to me at least, that the world leaders at the G-20 Summit never took an economics course above what they needed to sound like they know what they are talking about. (They probably learned to look what they know what they are talking about in Drama Class.) To take this blurb in parts.

1. Crack down on tax havens, regulate hedge funds, and rebuild trust in the financial system. So they want to eliminate tax havens, where capital is stored and used between expenditures. You know, saving before investing. Also, low tax states/countries are the emerging economies in the world. Ireland for instance. Capital didn't start to flee until the Irish raised tax rates. If we weren't bailing out the bets(CDS's, derivatives, etc.) that Hedge Funds have made over the last several years they would have received the haircut that the market wanted to give them, creative destruction. Driving them into the ground to be replaced by more responsible investors and capital. Trust will not be rebuilt in the financial system until new capital can be raised by the LARGEST INVESTOR CLASS, I.E. the middle Class. Raising taxes on them and shrinking economic growth with greater regulation and higher taxation will be ruinous.

2. The G-20 will not help emerging economies. It will stifle and kill their ability to grow through increased regulation and the loss of incentives that these economies should have at their disposal, lower taxes and cheap energy which would level the playing field and attract venture capital.

3. In regards to the stimulus. We have spent more money than I can even fathom to try and increase "liquidity" into the markets. I see this as being an incredibly stupid move. We will never know the true "value" of the world's toxic assets until the real underlying value of the assets can be factored and then sold or written off. Of course this would entail severely restricting our monetary policy to squeeze the real value out of the toxic assets. In simpler terms, who can "afford" those assets and who is floating on credit. This is what the market has been trying to do.

So a quick exit question. With the yield curve for banks, what they are paying to borrow the money vs what they are getting back in payment, making it easy for any banker to make money. Why do we still see a "frozen" credit system. My bet is that the market fears that investors feel that we haven't seen the worst of this big bear yet.

Art Laffer "kills" the Death Tax

2009-04-02T14:49:00.000-04:00

In The Wall Street Journal Art Laffer, an economist for the Reagan administration and prominent supply-side economist lays out the case for repealing the death tax.

Indeed, from a societal standpoint, inheritance is an unmitigated good. Passing on to successive generations greater health, wealth and wisdom is what society in general, and America specifically, is all about. Imagine what America would look like today if our forefathers had been selfish and had left us nothing. We have all benefited greatly from a history of intergenerational American generosity. But just being an American is as much an accident of birth as being the child of wealthy parents. If you are an American, it's likely because ancestors of yours chose to become Americans and also chose to have children.

When we generally think of the death tax, it is to prevent the Paris Hilton's of the world from inheriting huge sums of money which will be blown on rhinestone encrusted thongs for an army of show dogs. However, this is not the case.

In its most basic form, it's about as silly an idea as can be imagined that America in the aggregate can increase the standards of living of future generations by taxing individual Americans for passing on higher standards of living to future generations of Americans of their choice. Clearly, taxing estates at death will induce people who wish to leave estates to future generations to leave smaller estates and to find ways to avoid estate taxes. On a conceptual level, it makes no sense to tax estates at death.

Study after study finds that the estate tax significantly reduces the size of estates and, as an added consequence, reduces the nation's capital stock and income. This common sense finding is documented ad nauseam in the 2006 U.S. Joint Economic Committee Report on the Costs and Consequences of the Federal Estate Tax. The Joint Economic Committee estimates that the estate tax has reduced the capital stock by approximately $850 billion because it reduces incentives to save and invest, has excessively high compliance costs, and results in significant economic inefficiencies.

Those crazy market oriented supply-siders, how dare they continue to document facts proving that the death tax isn't about revenue, but retribution.

Today in America you can take your after-tax income and go to Las Vegas and carouse, gamble, drink and smoke, and as far as our government is concerned that's just fine. But if you take that same after-tax income and leave it to your children and grandchildren, the government will tax that after-tax income one additional time at rates up to 55%. I especially like an oft-quoted line from Joseph Stiglitz and David L. Bevan, who wrote in the Greek Economic Review, "Of course, prohibitively high inheritance tax rates generate no revenue; they simply force the individual to consume his income during his lifetime." Hurray for Vegas.

That's it, I got it. The government wants us to spend all of our money during our lifetime as a sop to the SEIU. Of course the idea behind the death tax is to square one for the little guy. If our liberal friends cared about raising revenue, they would eliminate the death tax.

Read the editorial here. Well worth the time.

Is this the end of Capitalism?

2009-04-02T11:48:00.000-04:00

Daniel Henninger takes a pair of pliers and a blowtorch to the anti-globalization crowd

An Excerpt:

China wants a new global currency to replace the inflatable dollar. The managing director of the International Monetary Fund, Dominique Strauss-Kahn, has said the world financial system needs an "early warning system," which one guesses the rocket scientists at the IMF would provide. France's Nicolas Sarkozy wants a global "financial regulator." On Sunday the New York Times raised its hand to announce the crisis "has led to a fundamental rethinking of the American way as a model for the rest of the world."

Here's my two cents worth: Beware of real-estate salesmen.

The housing bubble that floated into view in 2007 is turning into the blob that ate the world. Real-estate mortgages and their derivative securities are a significant problem. That discrete problem, however, has been pumped up to an historic "crisis of capitalism."

Capitalism didn't tank the U.S. economy. Overbuilt housing did. Overbuilt housing tanked the economies of the U.K. and Ireland and Spain. If little else, we've learned that artificially cheap housing sets loose limitless moral hazard.

Read the whole thing.

The Daily Twain

2009-04-02T11:31:00.000-04:00

Don't go around saying the world owes you a living. The world owes you nothing. It was here first.

Congress doesn't like being Tea Bagged...

2009-04-02T11:07:00.001-04:00

Although I'm sure that Larry Craig wouldn't mind...

H/T/ Drudge

Noted Douche Bag Gets it wrong again

2009-04-02T10:49:00.001-04:00

Joe Biden proves once again that he is the smartest man in Washington D.C.

Say what you want about Dick Cheney being Darth Vader and Darth Maul wrapped into one evil package, but at least he understood how to balance a checkbook. I know everybody likes the "that's funny uncle Joe" but does this guy have a clue or have the hair plugs completely taken control of his brain, Terminator style.

Jack Kemp Jr.?

2009-04-01T16:47:00.000-04:00

Paul Ryan and Eric Cantor are two of the most exciting neo-supply siders that are currently in the Republican minority. As this editorial from the Wall Street Journal states http://online.wsj.com/article/SB123854083982575457.html

- Deficits/Debt. The Republican budget achieves lower deficits than the Democratic plan in every year, and by 2019 yields half the deficit proposed by the president. By doing so, we control government debt: Under our plan, debt held by the public is $3.6 trillion less during the budget period.

- Spending. Our budget gives priority to national defense and veterans' health care. We freeze all other discretionary spending for five years, allowing it to grow modestly after that. We also place all spending under a statutory spending cap backed up by tough budget enforcement.

- Energy. Our budget lays a firm foundation to position the U.S. to meet three important strategic energy goals: reducing U.S. dependence on foreign oil, deploying more clean and renewable energy sources free of greenhouse gas, and supporting economic growth. We do these things by rejecting the president's cap-and-trade scheme, by opening exploration on our nation's oil and gas fields, and by investing the proceeds in a new clean energy trust fund, infrastructure and further deficit reduction.

- Entitlements. Our budget also takes steps toward fulfilling the mission of health and retirement security, in part by making these programs fiscally sustainable. The budget moves toward making quality health care affordable and accessible to all Americans by strengthening the relationship between patients and their doctors, not the dictates of government bureaucrats. We preserve the existing Medicare program for all those 55 or older; and then, to make the program sustainable and dependable, those 54 and younger will enter a Medicare program reformed to work like the health plan members of Congress and federal employees now enjoy. Starting in 2021, seniors would receive a premium support payment equal to 100% of the Medicare benefit on average. This would be income related, so low-income seniors receive extra support, and high-income seniors receive support relative to their incomes -- along the same lines as the president's Medicare Part D proposal.

We strengthen the Medicaid safety net by converting the federal share of Medicaid payments into an allotment tailored for each state's low-income population. This will enhance state flexibility and sensitivity to spending growth.

In one of the most valued government programs -- Social Security -- our budget begins to develop a bipartisan solution to the program's pending bankruptcy by incorporating some of the reforms advocated by the president's budget director. Specifically, we provide for a trigger that would make small adjustments in the benefits for higher-income beneficiaries if the Social Security Administration determines the Social Security Trust Fund cannot meet its obligations. This is a modest but serious proposal which would not affect those in or near retirement, but is aimed at helping develop a consensus, across party lines, toward saving this important retirement program. We also assure that benefits for lower-income recipients are large enough to keep them out of poverty.

- Tax Reform. Our budget does not raise taxes, and makes permanent the 2001 and 2003 tax laws. In fact, we cut taxes and reform the tax system. Individuals can choose to pay their federal taxes under the existing code, or move to a highly simplified system that fits on a post card, with few deductions and two rates. Specifically, couples pay 10% on their first $100,000 in income (singles on $50,000) and 25% above that. Capital gains and dividends are taxed at 15%, and the death tax is repealed. The proposal includes generous standard and personal exemptions such that a family of four earning $39,000 would not pay tax on that amount. In an effort to revive peoples' lost savings, and to create an incentive for risk-taking and investment, the budget repeals the capital gains tax through 2010 for all taxpayers.

On the business side, the budget permanently cuts the uncompetitive corporate income tax rate -- currently the second highest in the industrialized world -- to 25%. This puts American companies in a better position to lead in the global economy, promotes jobs here at home, and strengthens worker paychecks.

We hope the administration and Democratic leaders in Congress do not distort and preach fear about our Republican plan. Some may be tempted to appeal to the darker emotions of envy and insecurity that surely run high in times like these. Yet we know Americans are stronger, smarter and prouder than this ploy assumes.

This editorial could have appeared in the WSJ or National Review in 1976. What excites me the most is tax reform. Milton Friedman used to say that people(capital) vote with their feet. I can see Paul Ryan sitting around with Art Laffer and, my man, Larry Kudlow talking incentives and how to stimulate real Growth. The one thing that I think that Representative Ryan also could have proposed is a negative income tax to go along with a flat tax. http://en.wikipedia.org/wiki/Negative_income_tax

This is a debate that we can win

What a gift giver

2009-04-01T14:16:00.000-04:00

I want Obama to give me a gift next...

http://blogs.telegraph.co.uk/toby_harnden/blog/2009/04/01/barack_obamas_gift_for_the_queen_an_ipod_your_majesty

Obviously the new administration is simply trying to reach out to our neighbors across the pond by giving the Brits gifts which signify American might. DVD's to Gordon Brown(made in Indonesia) and an iPod to the Queen(made in Taiwan) The gift that he is planning on giving Prince Charles and William and Harry is a stack of Penthouse's and a bottle of Astro-glide. That's the way to "grease" the rails of diplomacy.

H/T Drudge

Welcome Back David Brooks... You were missed

2009-03-31T11:23:00.000-04:00

http://www.nytimes.com/2009/03/31/opinion/31brooks.html?_r=1&ref=opinion

Well, the president certainly acted tough on Monday. In a show of force, he released plans from his Office of People Who Are Much Smarter Than You Are. These plans insert the government into the car business in all sorts of ways. They pick winners (new C.E.O. Fritz Henderson) and losers (Rick Wagoner). They basically send Chrysler off into the sunset. Joe Biden will be doing car commercials within weeks.

But will Biden be able to top this...

I think not

The Incomparable Thomas Sowell

2009-03-31T09:42:00.000-04:00

Wow...

http://article.nationalreview.com/?q=ODk5M2I3YWI2NTU2ZGZjZDBjMGVjNTVkZGQwNWI5ZTg=

What is even worse than making mistakes is having sycophants telling you that you are doing fine when you are not. In addition to all the usual hangers-on and supplicants for government favors that every president has, Barack Obama has a media that will see no evil, hear no evil, and certainly speak no evil.

They will cheer him on, no matter what he does, short of first-degree murder — and they would make excuses for that. Even Reagan speechwriter Peggy Noonan has gushed over President Obama, and even crusty Bill O’Reilly has been impressed by Obama’s demeanor.

There is no sign that President Obama has impressed the Russians, the Iranians, or the North Koreans, except by his rookie mistakes — and that is a dangerous way to impress dangerous people.

What did his televised overture to the Iranians accomplish, except to reassure them that he was not going to do a damn thing to stop them from getting a nuclear bomb? It is a mistake that can go ringing down the corridors of history.

Future generations who live in the shadow of that nuclear threat may wonder what we were thinking about, putting our lives — and theirs — in the hands of a rookie because we liked his style and symbolism?

In the name of “change,” Barack Obama is following policies so old that this generation has never heard of them — certainly not in most of our educational institutions, where history has been replaced by “social studies” or other politically correct courses.

Seeking deals with our adversaries, behind the backs of our allies? The French did that at Munich back in 1938. They threw Czechoslovakia to the wolves and, less than two years later, Hitler gobbled up France anyway.

This year, President Obama’s attempt to make a backdoor deal with the Russians, behind the backs of the NATO countries, was not only rejected but made public by the Russians — a sign of contempt and a warning to our allies not to put too much trust in the United States.

Barack Obama is following a long practice among those on the left of being hard on our allies and soft on our enemies. One of our few allies in the Middle East, the Shah of Iran, was a whipping boy for many in the American media, who vented their indignation at his regime — which now, in retrospect, seems almost benign compared to the hate-filled fanatics and international-terrorism sponsors who now rule that country.

However much Barack Obama has proclaimed his support for Israel, his first phone call as president of the United States was to Hamas, to which he has given hundreds of millions of dollars, which can buy a lot of rockets to fire into Israel.

Am I the only one who is not surprised by the terrible performance of my President...Nope, thank God for Tom Sowell keeping me sane.

This is what we need more of...

2009-03-30T17:25:00.000-04:00

Here is my man Milton Friedman, swinging the BIG DICK of Free Market Capitalism.

We don't make them like we used to

GM

2009-03-30T16:56:00.000-04:00

Just Nationalize them fully so that I can post a crazy conspiracy theory...

Bonzaii!!

2009-03-26T20:45:00.000-04:00

I just wanted to crash my brother's blog and say to anybody who accidentally landed here googling "Lindsay Lohan beaver shot"---because neither of us have bothered with the social networking recquired to attract actual readers---I have a new journal of sorts as well, and it's over at onemoreasshole.com. Check it out. We're like two totally different flavors of smartass.

So have great night, Chris... and get your hand out of your pants.

Cheers!

William

An encouraging sign but what is the trade-off?

2009-03-10T14:18:00.000-04:00

http://apnews.myway.com/article/20090310/D96RAIPO0.html

A few comments about this:

Among the principles Obama laid out were:

_Challenging states to adopt world-class standards rather than a specific standard. Obama's economic stimulus plan includes a $5 billion incentive fund to reward states for, among other things, boosting the quality of standards and state tests, and the president said the Education Department would create a fund to invest in innovation.

_Improved pre-kindergarten programs, including $5 billion in the stimulus plan to grow Head Start, expand child care access and do more for children with special needs. He also said he would offer 55,000 first-time parents regular visits from trained nurses and said that states that develop cutting-edge plans to raise the quality of early learning programs would get an Early Learning Challenge Grant, if Congress approves the new program.

_Reducing student dropout rates. To students, Obama said: "Don't even think about dropping out of school." But he said that reducing the dropout rates also requires turning around the worst schools, something he asked lawmakers, parents and teachers to make "our collective responsibility as Americans."

_Repeating his call for everyone to commit to at least one year or more of higher education or career training, with the goal of highest proportion of college graduates in the world by the year 2020.

On charter schools, he said the caps instituted by some states on how many are allowed aren't "good for our children, our economy, or our country."

Obama also spoke at length about what he described his policy toward teachers, what he called an 'unprecedented commitment to ensure that anyone entrusted with educating our children is doing the job as well as it can be done." In up to 150 more school districts, Obama said, teachers will get mentoring, more money for improved student achievement and new responsibilities.Also, Obama said, "We need to make sure our students have the teacher they need to be successful. That means states and school districts taking steps to move bad teachers out of the classroom. Let me be clear: if a teacher is given a chance but still does not improve, there is no excuse for that person to continue teaching."

First this is an exciting development from our President, but as with all things, I tend to err on the side of caution. The language that he uses is always very specific, but the details of the programs themselves leave to much to the imagination. Obama is a big-government liberal in that he always wants to allocate the money for his ideas before we are given any specificity of detail.

The first point, to create through the DOE, a fund to invest in innovation. He wants us to move from a "specific standard" to a "world class" standard. What type of standard Mr. President? This is a straw man that Obama is setting up using rhetorical flourish. No, longer will we hold anyone to a specific standard. How can anyone of us oppose more massive federal intervention in the states education establishment if the point is to make it world class. This fund is supposed to incentivize states to bring themselves to a world class standard. This isn't the point of the fund. NCLB at its core was a way to spook the teachers unions to shape up or lose federal funding. Obama is rolling this back. Bet on it.

The second piece of this new Obama plan seems to be a way to cut off at the knees home-schooling parents before they start there own curriculum. Being in a business where I deal daily with parents home-schooling their children, this must be a frightening proposition. Most homeschool parents will tell you that they start homeschooling long before the state mandates that there children be graded and tracked by a municipality. I believe that the idea is to take the choice of curriculum for pre-K kids out of the hands of the parents, making the possibility that they will be home-schooled when they enter kindergarten less likely. We need more freedom in education. If the state wants to help parents with special needs children, we should create a home-schooling tax deduction. This can be done at the state level as property taxes tend to go towards education. More freedom and liberty for the parents, less FED involvement. Reward them at the state level, not from a $5 billion slush fund.

The third part, reducing drop-out rates, should be addressed with expanded voucher programs. Kids who want to drop out of school should have a meeting with the parents, yeah they are important, and the school administrators. The children who are dropping out should be given the opportunity to continue their education in a school which may be more conducive to their learning needs. Give the parents the power to make the decisions for their children. This will be best addressed by expanding choice for the parents.

President Obama also wants to have the largest proportion of college graduates in the world by 2020. This is possible. What we don't need is the largest proportion of underwater basket weaving post-colonial feminist program graduates. We need to incentivize the areas of our economy that we need. Engineers, nurses, teachers are all going to be in high demand. Offer free in-state tuition to any individual who wants to pursue one of these careers. To back up their end of the bargain these individuals would have to volunteer 25 hours a week in the fields which they want to go into. This is a more free-market solution than saying "oh, I Hope and Change on a Rainbow" that we will have more sub-continental African studies majors.

With charter schools and the teachers unions, we know that the President is just blowing smoke. The number of charter schools should be expanded, but the President is postulating that when card check passes that the charter schools will be forced into unionization, just making them another arm of the EDUCATION ESTABLISHMENT. This is comical if it weren't so frustrating.

In all, everything that President Obama spoke about sounds all well and good but will be shaped not by the vision he lays out now, but how the field will look in several years. This is disingenuous. He knows that the establishment in education will never go for the more market oriented parts of his agenda and that squishy conservatives (Brooks, Buckley, Noonan etc.) will champion the more market oriented parts of the policies as they believe in magic. They are not looking at the Grand Picture of what this country will look like in several years when these plans come to fruition. We need to fight for the market oriented parts of his proposals and see, if card check gets defeated, if he will still champion market solutions in education. My guess is no.

Hello, Governor

2009-03-08T19:53:00.000-04:00

How come we keep referring to former elected officials by the title of the last political office which they held. For instance we refer to Newt Gingrich as the Mr. Speaker, Mike Huckabee and Mitt Romney as governor and Rick Santorum as Senator. I will refer to you by the title of your office when you are occupying that office, but if you want to have a title, go back to medical school

The Gift for the Iranians

2009-03-06T18:34:00.000-05:00

The Obama Administration Gift Giving gets better...
every American gets an Easy Button

Why?

2009-03-06T16:55:00.001-05:00

1.Do we pile up mountains of debt when we can't pay back what we have on credit now?

2.Is our President more concerned with "fundamentally transforming the country" than being a proper steward of a limited government?

3. Are our elected political heroes not able to understand that you don't need to re-invent the wheel every time there is a market correction?

4. Should I continue to vote for the major political parties when they don't listen to me anyway?

Answer:

1. Obviously, to me at least, we no longer value leaving a world richer in resources to our children than the one that we inherited. The entitlement mentality of my generation and every generation since WWII doesn't seem to understand that life in a free enterprise system is a series of trade-offs. Liberals only value deficit spending when it is to buy a new cool Prius, not when it is to finance two wars and protect the American People.

2. President Obama sees himself as the individual who can finally sell the country on European Statism and thus far has done so. Nothing in his agenda will be denied as long as he has the political capital to sell it. The established capital he does have is tripled by the media and backed in full by agitators on the left who will do everything possible to make sure that his agenda is passed with minimal debate. The case in point is the concerted effort on the part of the WHITE HOUSE CHIEF OF STAFF to rope-a-dope the American public with talk of Rush to deflect attention off of his plans. Thank God El Rushbo is the man they are targeting as he will inform and entertain the people who want to watch the fight. The President has picked the wrong dog to fight with. Limbaugh will create a new generation of conservatives to fight back at the statism in 2010.

3. If not for Eric Cantor, Paul Ryan and Mike Pence I might have to move to Hong Kong. Solid conservatives who want to keep the free in free enterprise. They know you don't need government to fix the problem.

4. Once again we see trade-offs. Government will continue to grow, the secret is to keep the size of it relative to GDP down. Smart supply-siders are needed to explain how lower tax rates contribute to higher economic growth.

White House Press Release

2009-03-04T16:50:00.000-05:00

Washington March 4 '09: This afternoon the White House announced a new White House Summit on how to conduct a Summit. " The American people need to know how important holding White House Summit's are to the President and we take our Summit holding very seriously," White House Press Secretary Robert Gibbs said during a press conference this morning in between ravenous bites of his feet. "This is why President Obama has decided to hold a White House Summit on Summit holding."
The White House Press corps had several in depth and challenging questions for Gibbs. "Do you plan on having any experts at this Summiting Summit?" The Daily Kos's Pinko McCommie queried.

"The President plans on having several experts attending the summit, luminaries of the speech and summit series such as Bill Clinton, former President George H.W. Bush as well as the President's favorite motivational speaker, Richard Simmons." Press Secretary Gibbs responded.

Major Garrett of Fox News posed the next question. " Does the President believe that Richard Simmons, of the Sweating to the Oldies series of motivational tapes, can really help motivate the populace into understanding how to summit there misunderstanding of the Summit on Summits."

"The President believes that if Richard Simmons can sell older suburbanite, bourgeois middle Americans to dance and lose weight to "Lightening striking again" by Lou Reed he is the perfect man to show him how to climb the insurmountable summit of the White House Summit on Summits." Secretary Gibbs said.

Further details will be released by undersecretary of White House Summit's Summit, Summit Sumnter.

He shall be Sir Edward Kennedy Knight Errant of Glenlivet

2009-03-04T15:09:00.000-05:00

It never ceases to amaze me how people cling to a vision of Camelot...

http://apnews.myway.com/article/20090304/D96NCGOO0.html

Sir Edward Kennedy Knight Errant of the Glenlivet Region, Protector of the Ancient Scotch er... Scotts.

How about another bubble...?

2009-03-04T12:13:00.000-05:00

According to the Wall Street Journal this morning, the genius' who gave us the credit system's massive coronary through government intervention which led to a "shadow market" of credit want to find a way to re-clog our arteries...

http://online.wsj.com/article/SB123609012856118765.html

Much is riding on the initiative, known as TALF for Term Asset-Backed Securities Loan Facility. At the height of the credit boom, Wall Street issued more than $1 trillion a year of securities that were backed by consumer credit, and trillions more backed by mortgages. These markets -- sometimes called "the shadow banking system" because they operate outside traditional bank activity -- accounted for roughly 40% of all consumer lending before the financial crisis erupted last year. But the market dried up last year. Issuance of securities tied to consumer loans dropped to less than $8 billion in the final three months of last year.

"There has been somewhat of a collapse of the banking system, but an almost total collapse of the shadow banking system," said Princeton University economist Alan Blinder. "Given our reliance on the latter, we need to get that shadow banking system revived."

Hey, great idea America. You just had a massive blow out heart attack so... lets go out for chili cheese hot dogs, bacon cheese fries and Crisco soda on us(really it's on you...but most of you rubes don't understand this after we use the word derivative.) If we believe and wish and know that hope, change, rainbows and leprechauns are real reinflating the bubble larger than before will work. What a great idea!

At the heart of the collapse of our credit markets was the securitization and packaging of debt into more palatable risk for banks and other providers of credit to the public at large. The government demanded that providers of credit extend more credit to individuals who didn't fit into their risk schemes. As with everything that the government does when attempting by edict to make outcomes equal the risk is spread out to consumers who were, or are, credit worthy. Instead of the issuers of credit passing on the risk to their "prime" customers, the loose monetary policy and low interest rates provided by the FED led to the risk being spread amongst institutions. Washington is at fault in this crisis and don't seem to realize that they are the cause of the continued rot of these securities at the heart of our problem. The market found a way around the government intervention to continue to lend to people who couldn't afford to pay.

Instead of trying to reinvent the wheel and making free markets more equitable in their distribution of outcomes, the government needs to be the overseer of the market system in a way that doesn't resemble Hobbes Leviathan. What the feds will never understand is that the market will do more to reward the producers and punish the frauds and cheats than any government czar will be able to do.

Scary times ahead... stay tuned