Archive for the ‘Economy’ Category

“Mirror, Mirror”

Saturday, March 6th, 2010

While we are on the subject of bitch slaps (see previous), did you see how James Taranto took care of Professor Krugman. It was a little bit wordier than George Will leaving his own handprint on Krugman’s rodent-like face, but just as elegant.

Former Enron adviser Paul Krugman takes note in his New York Times column of what he calls “the incredible gap that has opened up between the parties”:

Today, Democrats and Republicans live in different universes, both intellectually and morally.

“What Democrats believe,” he says “is what textbook economics says”:

But that’s not how Republicans see it. Here’s what Senator Jon Kyl of Arizona, the second-ranking Republican in the Senate, had to say when defending Mr. Bunning’s position (although not joining his blockade): unemployment relief “doesn’t create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work.”

Krugman scoffs: “To me, that’s a bizarre point of view–but then, I don’t live in Mr. Kyl’s universe.”

What does textbook economics have to say about this question? Here is a passage from a textbook called “Macroeconomics”:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of “Eurosclerosis,” the persistent high unemployment that affects a number of European countries.

So it turns out that what Krugman calls Sen. Kyl’s “bizarre point of view” is, in fact, textbook economics. The authors of that textbook are Paul Krugman and Robin Wells. Miss Wells is also known as Mrs. Paul Krugman.

It seems Krugman himself lives in two different universes–the universe of the academic economist and the universe of the bitter partisan columnist. Or maybe this is like that episode of “Star Trek” in which crewmen from the Enterprise switched places with their counterparts from a universe in which everyone was the same, only evil.

Like Spock, the evil Krugman is the one with the beard.

Are Businesses People?

Thursday, January 28th, 2010

After sitting through all of President Obama’s State of the Union address, and updating my list of “Obama Speech Bingo” items from 53 to 87, I am left with exactly one question. I don’t know if it will be answered in this lifetime or not. I’d like to know what, exactly, the loyal hard-left liberal democrat has in mind when he talks about “the economy,” as in the economy is getting stronger, we want to see it get better, the economy took a whallopin’ “Over The Last Eight Years,” et al. I’ve prowled over the clues, looking for some semblance of consistency…and perhaps that is a mistake. Near as I can figure, The Economy is something that thrives when taxes are raised and is starved when taxes are cut. And yet it has something to do with jobs, which makes me wonder if the loyal extreme liberal democrat has it straight in his own mind what “The Economy” is.

Miss Me Yet?The jobs thing has something to do with businesses making decisions to hire people, that much I get; and this seems to be on par with the way we see “the economy” here on Planet Earth. It is equally clear to me, however, that on Planet Wild-Eyed Liberal, a business hiring someone has a lot more to do with willingness than with ability.

I found this nugget on page 7 of the New York Times transcript to be an aptly representative sample of what I heard over the seventy minutes last night:

Now, I know that some in my own party will argue that we can’t address the deficit or freeze government spending when so many are still hurting. And I agree — which is why this freeze won’t take effect until next year — (laughter) — when the economy is stronger. That’s how budgeting works. (Laughter and applause.) But understand –- understand if we don’t take meaningful steps to rein in our debt, it could damage our markets, increase the cost of borrowing, and jeopardize our recovery -– all of which would have an even worse effect on our job growth and family incomes.

From some on the right, I expect we’ll hear a different argument -– that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that’s what we did for eight years. (Applause.) That’s what helped us into this crisis. It’s what helped lead to these deficits. We can’t do it again.

Rather than fight the same tired battles that have dominated Washington for decades, it’s time to try something new. Let’s invest in our people without leaving them a mountain of debt. Let’s meet our responsibility to the citizens who sent us here. Let’s try common sense. (Laughter.) A novel concept.

I recall the President said something about really sticking it to the businesses and it brought the democrat side of the chamber to a standing ovation. Can’t remember if this is that moment or not, and it really doesn’t matter. What matters is that goofy moment just a little bit later, about the Supreme Court decision. President Obama has earned for Himself a fusillade of justified criticism here. He seems to have been taking a break from trying out His novel concept of common sense. As one Georgetown University Law Center Professor asks,

In the history of the State of the Union has any President ever called out the Supreme Court by name, and egged on the Congress to jeer a Supreme Court decision, while the Justices were seated politely before him surrounded by hundreds Congressmen? To call upon the Congress to countermand (somehow) by statute a constitutional decision, indeed a decision applying the First Amendment? What can this possibly accomplish besides alienating Justice Kennedy who wrote the opinion being attacked. Contrary to what we heard during the last administration, the Court may certainly be the object of presidential criticism without posing any threat to its independence. But this was a truly shocking lack of decorum and disrespect towards the Supreme Court for which an apology is in order. A new tone indeed.

I’ve read all the arguments in favor of the decision and dissenting from the decision, and again it comes down to this central question: What is an economy? More precisely, are businesses people? If they are not, then I could begin to see the logic: How dare that Supreme Court allow those green-headed monsters to have an influence on our elections! But if they are…

If they are, then this is the very appearance of fascism, is it not? You just take anyone from among the citizenry who might object to your new proposals, and define them out of existence. That’s how it works right?

President Obama, like any energized, extremist liberal, seems to come from that other planet on which businesses are food, not people. They have nothing to do with this thing we call “the economy” other than feeding it by making occasional random decisions about hiring & firing.

No wait — if that were the case, you’d have to acknowledge the business’ welfare is linked to the welfare of the rest of us. So it must be something like the businesses hurt the economy by laying people off. For fun or something.

Whatever. The facts are not on the President’s side on this one:

Tonight the president engaged in demogoguery of the worst kind, when he claimed that last week’s Supreme Court decision in Citizens United v. FEC, “open[ed] the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”

The president’s statement is false.

The Court held that 2 U.S.C. Section 441a, which prohibits all corporate political spending, is unconstitutional. Foreign nationals, specifically defined to include foreign corporations, are prohibiting from making “a contribution or donation of money or ather thing of value, or to make an express or implied promise to make a contribution or donation, in connection with a Federal, State or local election” under 2 U.S.C. Section 441e, which was not at issue in the case. Foreign corporations are also prohibited, under 2 U.S.C. 441e, from making any contribution or donation to any committee of any political party, and they prohibited from making any “expenditure, independent expenditure, or disbursement for an electioneering communication… .”

This is either blithering ignorance of the law, or demogoguery of the worst kind.

Well, I live on Earth. Over here, businesses are people. They are people who will be filing income taxes at the end of the year, because they are required to file them…and they are organizing under a charter recognized by the governments of the nation and the states, for the purpose of making that money on which they’ll be paying the taxes. “Tax the businesses” just means taxing a whole lot more.

And no, Mr. President, the “status quo” is not “investing less in our people” — unless, by investing less in our people, you mean continuing to tax the businesses on their production of wealth that is going to be taxed on an individual basis later. If this double-taxation is what You meant by this remark, You were right, but that would involve seeing businesses as people. I’ve got a pretty good idea of where you stand on that question, so I have a feeling that is not what You meant.

Because now that You’ve had the opportunity to give hundreds and hundreds of speeches to get Your point across, with the Obama-Speech-Bingo phrase “Let Me Be Clear” always sprinkled generously throughout — You are, at least somewhat, clear. You, obviously, come from that other planet. Where it is not altogether certain what exactly an “economy” is, and I guess nobody really cares. But you all gather every night around the Na’vi Hometree and tell spooky stories about scary alien monsters that are “corporate special interests” that have to be taxed “to pay their fair share,” but shouldn’t be allowed to say anything about the policies of the government that sees such nobility in multiple-taxing them…

…and then putting together one commission after another to try to figure out why “The Economy” isn’t taking off.

Photoshop credit once again goes to Gerard.

Where Americans Aren’t Moving

Sunday, December 27th, 2009

They’re the blue states where liberals run everything.


Couldn’t Have Said It Better Myself… XXII

Friday, December 4th, 2009

Neal Boortz says it all, doesn’t say anything that doesn’t need saying, covers everything that does. A home run.


For Democrats to announce that they’re abandoning all attempts at health care “reform” until the economy is back on its feet. People – knowledgeable people – are scared to death about what these Democrats may dream up. If they stick with this scheme it just cannot end well.

“Will You Kiss Me?”

Tuesday, November 24th, 2009

Hat tip to Primordial Slack.

Repealing Sound Economic Policies Means Repealing Their Results

Friday, November 20th, 2009

Here’s something to scare the bejeezus right outta you. Congressmen Jeb Hensarling and Paul Ryan, writing in a Wall Street Journal op-ed:

One of the strongest factors promoting recovery from our 10 post-World War II recessions was an unshakable conviction that, regardless of the immediate trouble, the American economy is fundamentally strong. Based on this underlying confidence, recessions and recoveries roughly conformed to the principle of the bigger the bust, the bigger the boom, and vice versa.

Repealing the ResultsThus real growth in the four quarters following postwar recessions averaged 6.6% and 4.3% over the following five years. As the chief economist for Barclays, Dean Maki, said in this newspaper on Aug. 19, “You can’t find a single deep recession that has been followed by a moderate recovery.”

That may no longer hold. Since the current recession has lasted a record seven quarters—and has been marked by a near-record average GDP decline of 1.8% per quarter—we should be witnessing the start of a powerful and sustained recovery. Yet forecasts of a 2% recovery in growth are only one-fourth as strong as postwar experience suggests. Meanwhile, unemployment sits at a generational high of 10.2%.

Why all the pessimism? The source appears to be a growing fear that the federal government is retreating from the free-market economic principles of the last half-century, and in particular the strong growth policies that began under Ronald Reagan. A review of the economic policies instituted by President Barack Obama and the Democratic-controlled Congress lends credibility to this concern.
Anyone who believes the Democratic Party’s recently expressed concern over the deficit should look at the relentless growth of spending on its watch. Total nondefense spending set an all-time record this year—20.2% of GDP—double federal spending as a percentage of GDP during the height of the New Deal in 1934. Even without this year’s stimulus bill and last year’s bailout of the financial system, nondefense discretionary spending authority still grew by 10.1% in fiscal year 2009 and is projected to rise by another 12% in fiscal year 2010. Forty-three cents of every dollar of this spending is borrowed money.

Given the magnitude of federal borrowing, there is good reason to expect higher interest rates and strong inflationary pressures in the future.

It is hardly surprising that many investors are reaching the conclusion that this administration and Congress favor policies that virtually guarantee the economy will not return to the climate of low interest rates, benign inflation and strong growth that we knew from 1982-2007. These investors understand a simple truth that current Washington policy makers fail to grasp: When you repeal the Reagan economic program, you repeal its results.

How do we solve the problem? First, we have to define it.

The fundamental problem with what we are doing right now is an enduring and often unstated belief that expurgation is the key to our success. The economy is just part of our society, and our society is suffering because it isn’t yet pure enough. People in charge right now are giving lots and lots of speeches about things — it seems to be their answer to every single problem that comes along. And I don’t hear very much about people-making-money-helping-other-people in those speeches. I don’t hear much about liberty or freedom.

What I do hear about is other people being the cause of all our problems. Certain types of people. “Wall Street bankers who caused this mess in the first place” is a more familiar phrase than one would expect any intact phrase to be, in a healthy, thinking environment. People clinging bitterly to their guns and their bibles. Sometimes I hear about sacrifice. We are to become rich by first becoming poor…or, forget the rich part, it is our destiny to simply be poor and we shouldn’t want anything more than that. We already got ours, now we have to sacrifice for whoever is behind us in line. The equal distribution of our misery, is much more worthy of mention than the ending of it.

I don’t recall Reagan saying or doing anything like this. I don’t recall him saying anything about fixing the economy solely for the benefit of people who eat arugula…or those who don’t…or people who cling to their bibles, or people who don’t. He spoke of The People as — investors. Stakeholders. Real people, who had every right and reason in the world to expect their representatives to run the government that belonged to them…non-destructively.

We were waiting for the representatives to roll back a bloated and harmful government. To repair a mistake. The way a man might wait for you to roll your car off his foot.

Our current administration came riding in on a white horse as a champion delivering us from a bad situation, as a remedy to past mistakes. But it doesn’t seem to think the representation is what rolled the car onto the poor guy’s foot; it seems to think he stuck his foot under there. Come-uppins seems to be the prevailing theme binding all these speeches together.

We are to be purified of our past sins through pain. Salvation may lie on the other side…things may get better after they get worse…maybe. But no promises there. The pain is the important thing right now. Sacrifice…apologize…grab-a-mop, and I-inherited-this-mess.

What’s the solution? The message that needs to go to our leaders has to be one of expectations within a certain window of time. Things should improve. It’ what they’re there for. If they can expect re-election while things are not getting better, then it is silly to think there’s any incentive for them to make things better.

FDR’s tarnished-silver legacy is going to have to get a little bit more tarnished here, I’m afraid. And it should. There’s no reason for a recession, even a giant, rancid, history-making recession, to drag on over an entire decade. But when a sour economic climate can be used as a foundation for a re-election campaign, as opposed to just for regime-change campaigns — that is what happens. Countries become saddled with cancerous governments, layers of bureaucracy politically invested in that country’s continued suffering.

And then those countries turn into dictatorships. Their people are told what to think. They’re told to believe things are getting better when they really aren’t.

If this is not to happen in America, we need a better job definition for our leaders. The message needs to be expressed that things should be getting substantially better, and soon. Or else. If we ask for them to tell us sweet little lies every election cycle, then that’s exactly what they’re going to do. This would cost us not only our prosperity, such as it is, but our freedom as well.

Just Forget About Your “Jobless Recovery”…

Thursday, October 29th, 2009

This looks to be a recovery that will take place at the expense of jobs.

Oh well. Guess we just blame George W. Bush.

Third-quarter estimates this week are expected to show that the economy grew for the first time since the quarter ending in June 2008. Despite the estimated 3 percent expansion and a stock market that has been on a tear since March, hundreds of thousands of people are still being laid off each month.

Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 61/2 months, a post-World War II record. Many of those workers will never recover financially.

California’s hole, deepened by a state budget mess and volatile tax system, is far worse: Unemployment is at 12.2 percent, third highest in the nation; and adding discouraged and part-time workers puts it over 20 percent.

“It’s not even a jobless recovery; it’s a recovery with more job losses,” said UCLA economist Lee Ohanian. “The idea of having essentially no net job creation after a remarkably severe recession is a real pathology for the U.S. economy.”

Recession’s Over, Business is Booming, Bonuses Paid

Thursday, August 27th, 2009

Not out here, quite so much. In there

A month after they voted to punish some corporate executives for taking hefty bonus payouts, members of the House of Representatives quietly gave their own staffers a new potential bonus by making even their top-earning aides eligible for taxpayer dollars to repay their student loans.

The change, which took effect in May, means House employees earning up to $168,411, or the top level, are now eligible for government-funded subsidies to help pay down their student loans.

Hey, you oughta be happy; that’s the economic recovery that got your vote last November. Remember? “Change” and all that?

That’s Great, Now Fix the Economy

Monday, July 13th, 2009

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
That’s Great Now Fix the Economy
Daily Show
Full Episodes
Political Humor Joke of the Day

Thanks to Donald Sensing, who has many salient thoughts and some pretty but depressing charts, with a hat tip to Gerard.

Are You Feeling Stimulated?

Monday, July 6th, 2009

Stop The ACLU:

May’s numbers out of Ohio are dismal. The Buckeye State’s unemployment rate hit 10.8% and the national rate is 9.5% with today’s numbers for June. In Dayton, Ohio, a company which has been in Ohio since the 19th century, NCR, has decided to relocate to another state. Columbia, SC, is using money from the President’s Stimulus Package to lure NCR away from Ohio. I’m sorry people, but all the road projects in the world won’t replace those long-term high paying jobs.

So my question to all of you is – Are You Feeling Stimulated?

According to the latest Gallup numbers – you aren’t.

63% are unsatisfied with the state of the nation
58% have a negative consumer mood
49% believe that economic conditions are poor
59% believe that things are getting worse

So it seems that none of you are feeling the least bit stimulated by all of Obama’s spending.

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” — Winston Churchill

“You Keynesians are all the same, with your beady little eyes and flapping heads!” — Morgan K. Freeberg

Keynesian Bumper Sticker

Friday, July 3rd, 2009

Bumper sticker slogans are really tough, especially for a windbag like me.

But Paul Krugman’s educated-man-delusions of grandeur put the big reveal on the situation: It’s dire. It is heart-attack serious. We truly are witnessing the greatest country the world has ever beheld, thrashing around in agony, suffering a disease that is about to turn terminal. And the docs around the deathbed are quacks. We’re talking leeches, bloodletting, pigeons pecking at the feet stuff.

Time for a bumper sticker slogan. I make no claim to authoring the best one possible, or possessing the talents necessary for such a thing. I’m just offering something to the public domain. Something must be done. The public must be exposed to what is truly going on, and it has to be done in a language the public can understand. And the word that applies, that has seldom found the benefit of ink or voice, must be put in the slogan. It must, like all effective bumper sticker slogans, mix what is familiar with what is not yet familiar, and must be researched, with gusto, diligently, and in a great big hurry.

So here’s my humble offering:

You Keynesians are all the same, with your beady little eyes and flapping heads!

With heartfelt and profound apologies to Trey and Matt. Had to do it, guys. Word needs to get out, and we can’t depend on bad results to teach the lesson. The student has to have some humility in order for that to work, and it obviously isn’t there. The time has come to borrow some points from the Alinsky playbook (this one would be making use of Rule Twelve). We have to use what works.

The stakes are far too high to dick around with anything else, and too much damage has already been done.

Update: And here we go.

These people need to be ridiculed, to be lampooned. Their position is today — and it was exactly this position in the thirties! — “the reason our plan didn’t work is because you didn’t do it big enough.” The bucket of gasoline didn’t put the fire out, so go get a bigger bucket.

The concept of “Out of Control” has no more vivid an incarnation on this plane of reality; nor can it. Seriously.

Make fun of the Keynesians. Make fun of them as hard as you can. We know in that direction lies victory, for they themselves know they cannot afford to call themselves what they are. They cannot articulate their argument for what it is, and they cannot mention the name of their founder; either one would enable the common man of average intelligence to see through the smokescreen and the lies.

That Canadian-Ambassador dude looks kind of like Mr. Krugman, viewed in the right light, doesn’t he?

Update: For those who have greater belief in How the World Works than in me, you should be aware he’s on my side on this thing. In fact, he states the case much stronger than I ever did.

He’s right. Krugman’s record of being on the wrong side of things, is about as impressive as it can possibly be. Him and his Keynesian flying monkeys too.

It’s the Economy, Stupid

Thursday, June 4th, 2009

Great news for anybody in the Limbaugh camp, who is hoping The Anointed One fails. Starting to look like He probably will.

It is becoming clear that the economy is now the top issue. Mr. Obama’s presidency may well rise or fall on it. The economy will be his responsibility long before next year’s elections. Americans may give him a chance to turn things around, but voters can turn unforgiving very quickly if promised jobs don’t materialize.

That’s what happened in Louisiana, where voters accepted Democrat Gov. Kathleen Blanco’s missteps before Hurricane Katrina but brutally rejected her afterward because she failed to turn the state around.

Until now, the new president has benefited from public willingness to give him a honeymoon. He decided to use that grace period to push for the largest expansion of government in U.S. history and to reward political allies (see the sweetheart deals Big Labor received in the GM and Chrysler bankruptcies).

The difficulty for Mr. Obama will be when the public sees where his decisions lead — higher inflation, higher interest rates, higher taxes, sluggish growth, and a jobless recovery.

The good news for the President is that in leveraging His wonderful charisma, or whatever it is, to keep His holy shoulders free of the burden of responsibility for the economy — He’s marshaling the most potent weapon in His arsenal. There can be little doubt at this point that Barack Obama is among the most charming, if not the most charming, politician the civilized world has seen in modern times. I’ve said it before and I’ll say it again: Forget about selling refrigerators to the proverbial Eskimo, this guy could sell hairdryers to snowmen.

More good news for President Obama: If failure looks like an economy in recovery, taking way longer to recover than it should…that is negligible-to-nothing political fallout, right? Under Obama’s predecessor, the economy was in a remarkably sustained period of growth, but rather flaccid growth. A prolonged, sputtering recovery would be just more of the same. Mister “I Inherited This, Don’t Forget” could go on tossing out some cliches about how He inherited the whole mess. It’s worked up until now.

But then we get right back to that thorny problem…and I think it’ll just get thornier…

How effective of an agent of “Change” is this guy, if His most reliable fallback excuse is that His predecessor was doing the same stuff and producing the same effects?

Obama’s chosen tactic is going to work out great, if nothing changes. But things always do; that is the point. Obama, I’m afraid, has placed Himself in a position to sustain great potential damage if our nation’s landscape is as dynamic as His campaign rhetoric has suggested. He requires stasis in order to succeed, even just politically. Which means He has placed Himself into an antagonistic relationship with change itself…and He owes His presidency to that very catchphrase.

We’ve been down this road before. That means, simply put, we haven’t been delivered what we were promised.

Conservative Economics in Quotes

Monday, April 20th, 2009

John Hawkins has the round-up. I award the booby-prize to this one…

“If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand.” — Milton Friedman

Among the ones that are not to be found on the list, this one is my favorite…it must’ve been an oversight…

On Reviving the Economy

Thursday, April 9th, 2009

I’m hearing an awful lot lately about how weak the economy is, and how we all need to get together to make it better. Let us look up what exactly an “economy” is. carries eight definitions, and I think the fourth one is apropos:

the prosperity or earnings of a place: Further inflation would endanger the national economy seriously.

The fourth definition is also the most relevant one at Merriam-Webster:

the structure or conditions of economic life in a country, area, or period; also : an economic system

Wikipedia seems to agree, at the higher levels, with

The economy is the realized social system of production, exchange, distribution, and consumption of goods and services of a country or other area.

I think by now we have a thumbnail sketch: Within a region, usually a physically or politically contiguous one, that may be a country — the economy is the purchasing power of the free people who dwell within it. And it’s some kind of an average; a good economy means people who are ordinarily rich can buy even more stuff, and people who are ordinarily poor can buy more than they usually can. If the economy sucks, the poor people suffer more than usual, and the rich people can’t buy as much of what they normally could.

It’s important to achieve a full comprehension of this “all boats” concept; we all have an interest in reviving the weak economy. And that symbiotic relationship works across neighborhoods, towns, townships, counties, states and regions…for the meaningful border is formed by the use of the United States Dollar. Naturally, this means it works across the economic strata. The word “economy,” in other words, implicitly acknowledges the truism of trickle-down economics. If rich people have more money then the poor people are going to be better off.

And herein lies my rant. I’m seeing an awful lot of highly-placed, powerful, prominent public officials, some of whom have been ensconced in their positions of political might for decades or more, talking up a good game about “reviving the economy” and then spurred into action by the perception that someone within the private sector has too much money, and they need to fix this by taxing away large pieces of it, sometimes 90 percent or more.

The issue we have with rich people being part of the economy, seems to be the same one we have with humans being part of the environment: We’ve got a lot of people walking around entrusted with power and authority, who talk at length about wanting to help the bigger thing, without acknowledging the smaller thing is a part of it…pretending, instead, that the smaller thing is an agent of destruction upon the larger thing. Aren’t humans, their carbon-emissions & all, part of the environment? Aren’t rich people, their bonuses and all, part of the economy?

My point is that when you’re talking about anything that involves problems, solutions, and plans to reach those solutions, words are important. It seems to me we all bear some blame in leaving this one undefined for a little bit too long. Revive the economy? If that means something to you besides embiggening the purchasing power of rich & poor alike — then what exactly do you think you’re reviving? If it’s something else…redistribution, perhaps?…then shouldn’t you be made to specify that, before we hear any more about what exactly it is you’re proposing?

Our current President who is also the Savior to untold millions who voted for Him — while running for that high office last year, eschewed the notion of individuals enriching themselves to such extent as to have control over their local climates.

We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times…and then just expect that other countries are going to say OK.

So He is high on my list of people who like to talk a lot about “reviving the economy” — but seem to have something other than “the economy” in mind about what exactly it is they’re trying to revive. Either that, or He admitted to an intention of assault upon the “economy,” until such time as it is battered into a sufficiently weak state that “other countries are going to say OK.” I’m not entirely sure which one was His intention…and I don’t suppose it very much matters, does it?

And so I have a very simple solution for our weak economy; it’s simple, but I’m afraid it won’t be carried out because we just got done electing a lot of people who are directly opposed to it. My idea would be to start with the objective of making people richer. Which means whenever we see someone walking around with a million dollar bonus, or with a paycheck that simply leaves enough room for them to turn the thermostat to 72 degrees, our reaction is — “Alright, way to go! What do I have to do to earn the same thing?”

That’s the American way.

D’JEver Notice? XXVI

Tuesday, April 7th, 2009

One Revolution AwayBack when conservatives were in power and liberals were out of power, the conservatives looked at the liberals with a mixture of scorn and distress, regarding the content of the liberal ideas. George Bush and Dick Cheney should be tried in the Hague for war crimes, 9/11 was an inside job, the Jews are making all the decisions about military operations, the President was going to invoke martial law and ban elections, et cetera, et cetera…all that stuff.

Now that the liberals are in power and the conservatives are out of power, the liberals look upon the conservatives with dread…with an urgency that Something Must Be Done, because the conservatives have too much power (still) to make their thoughts heard.

Now, what are these thoughts, exactly? You don’t have to say much to convince the nearest good liberal that you need to be shut-up or shut down. Skepticism that the new President’s stimulus plan is constitutional…is supported by history…will be effective. Old-fashioned dissent, in other words. It isn’t too much about the content. President Obama’s ideas for reviving the economy are uncertain, untried and untested; even the most enthusiastic Obama fan is entertaining some doubts about whether or not they’ll work. (Why else, all the hubbub about Rush Limbaugh hoping Obama fails?) No, it isn’t the content of the message, it’s the ability to get it out there. The conservative cause has not yet been gutterballed enough.

Perhaps this is of interest to us outside of the realm of politics. There seems to be an intrinsic, perhaps subconscious, knowledge that these methods we’re invoking to revive our economy — they’re ineffective if the last residues of audible dissent are still reverberating somewhere. That they require complete buy-in, with unanimity…or virtual unanimity. Kinda like Tinkerbell, she won’t come back to life unless everyone claps their hands.

Or maybe they understand their ideas only look good when nobody is around to articulate what might be wrong with them.

Either way, it’s obvious they still need (or want) some more change.

Doctor Frankenstein

Tuesday, April 7th, 2009

Did he create the monster that is rampaging through our economic village?

In 1985, aged 30, Mr. [Michael] Osinski and the woman who was now his wife moved to New York, and he landed his first job on Wall St with Salomon Bros as a programmer. “In the pecking order, the computer guys were slight above the typing pool, figuratively and literally,” he said. “We were a necessary annoyance for the traders.”

But that was all about to change. Just two years earlier, finance firms had started experimenting with “securitisation”, the process of turning mortgages into securities designed to spread the risk to lenders and investors.

When Mr Osinski asked his manager how these securities worked, he was told: “You put chicken into the grinder and out comes sirloin.” His boss added perceptively that the bonds were also a guarantee of employment for computer programmers.
Mr Osinski bounced around various Wall St firms and ended up in 1995 with the company that supplied the software for nearly all the big finance houses. It was also around now that a client asked him to enhance his software to include a new ingredient – “subprime” debt. Mr Osinski’s reaction was excitement at the prospect of both new customers and new challenges.

The loans were so-called because they were made to people who failed to meet standard, or prime, borrowing requirements, presenting a higher risk that was covered by charging much higher interest rates than for borrowers with good credit histories.

With house prices rising year after year, the theory was that people could simply refinance their properties at higher values and take out new loans as their repayments increased. The laws of house price cycles were collectively forgotten or ignored, and lenders and borrowers alike were caught up in the wave of hubris, greed and naivety.

It’s a fascinating story. Perhaps I’m biased…but it seems to me the guilt Mr. Osinski bears for our financial crisis, is on par with the guilt shouldered by a gun manufacturer in the wake of a murder/suicide. He built the freakin’ tool. Just like Shane said about the sidearm — it’s as good or as evil as the man that carries it.

“It is certainly unnerving when you see the world crumbling around you and you have an intimate knowledge about how that process came about,” he said.

He has regrets every day, but they are tempered with the belief that others misused, sometimes fraudulently, his work. “One thing, don’t portray me as a monster,” he said, before going back to emptying the oyster cages he had just recovered from the sea-floor.

You know what we used to call this in my first job? GIGO. Garbage In, Garbage Out.

“I Want, I Want, I Want; and by God, I Expect To Get”

Sunday, April 5th, 2009

I Think ^(Link) is admiring the work of Victor Davis Hanson

Victor Davis Hanson does it again.

If anyone wished to know what the baby-boomer generation would do when, in its full maturity, it hit its first self-created, big-time recession, I think we are seeing the hysterical results.

Baby boomers. I’m one and when we want something, we expect to get it. Forget about consequences. Forget about the future. It’s all about me, right now.

I want a house, but I can’t afford one. That’s ok, bank A will get me into one. Bank A wants money for my mortgage but who would buy it? No problem, we’ll package it and sell it to bank B. Bank B needs money for those mortgages, but I’m not paying the mortgage. No problem, the government will handle it.

Same story, different want. I want a vacation, but I can’t afford one. That’s ok, I can use the equity in my house ……..

I want, I want, I want. And by God, I expect to get.

VDH himself, after putting together an admirably simplistic list of things that really are simple when all’s said and done, concludes…

At some point in all this serial hysteria, we are beginning to see the problem is not in the stars of the economy or of the war, but in ourselves—a weird generation that, when it finally came of age, proved to be just about what we could expect of it from what we saw in its youth.

It’s really quite sad, when inspect the wreckage. For all these decades, working hard and living in an apartment instead of a home, is a crisis…an intolerable crisis…you’ve just gotta have a house. And then when you have kids, a three-bedroom home is a crisis because you have to have five rooms plus a bonus. The car must be big, to make you feel safe, and you have to have two of ’em.

Once the baby-boom wave has come and gone, the nation will be financially weak. Ironic, because while they were here, most of them spent much of that lifespan babbling away something about drinking out of recycled-cardboard cups, unplugging your cell phone, and participating in Earth Hour…all to leave “mother earth” in better shape than when you found her.

But the bill is coming due for this entire generation’s entire lifetime of saying “I want I want I want” — and the solution is debt on top of the debt, so that their kids have to clean up the mess.

Try to do some fixing in the here-and-now? To actually produce something, to create real wealth as opposed to simply shuffling it around? Just find a way to do that — without someone calling you “greedy.” We aren’t contending with the ghostly disease of an ancient and deceased mindset; we’re battling demons that are consuming us right in the here-and-now. And losing.

On Corporate Income Tax Rates

Saturday, March 14th, 2009

…the claim that the United States has the second-highest rate in the entire civilized world?


Hmmm….the economy is anemic. What to do, what to do, what to do. Household wealth plummeting…what to do, what to do.

Hey liberals. Can you put together a coherent, however-many-words-you-want essay on why any form of tax cut — corporate, personal, any other kind — should not be categorized as one possible (particularly effective) type of economic stimulus? Seriously. Type it in the comment box below and submit it to me…or e-mail off-line if you’re feeling shy. I really want an answer to this one.

If you can’t come up with anything, you know what? I’d like to know about that too. My name is Barack Obama and I live at 1600 Pennsylvania Avenue in Washington, DC. You are not being timed. Go.

Perfect Storm

Monday, March 9th, 2009

Victor Davis Hanson, on why Wall Street isn’t feeling the hope:

1) The proverbial Wall Street capitalists believe that, with new federal income tax rates, the removal of FICA ceilings, increases in capital gains rates, decreases in deductions, and simultaneous tax raises, not only will Obama remove incentives for innovation and productivity, but that he does not seem to care about—or perhaps appreciate—he consequences?

2) On the spending side, investors see too many subsidies and entitlements that may Europeanize the populace and erode incentives, while creating so much debt that in the next decade, should interest rates rise, the federal budget will be consumed with servicing borrowing and entitlement obligations. A redistributive economy in which government ensures an equality of result is Wall Street’s worst nightmare. Debt can only be paid back by floating more foreign debt, issuing more US bonds at home, raising taxes, or printing money—all bad options in the mind of the investor.

3) Too many are beginning to think Obama is, well, a naïf—and hence dangerous. He chest-thumps speeches Geithner cannot deliver. He says we are near the Great Depression—but then, after the stimulus package passes, suddenly hypes future growth rates to suggest that we will be out a recession, soon after all? Add in all the talk of high-tax, Al-Gorist cap-in-trade, wind and solar, socialized medicine in the midst of a financial crisis, and at best Obama comes across as confused and herky-jerky, and at worse, clueless on the economy—as if a Chicago organizer is organizing a multi-trillion-dollar economy. Talking about ‘gyrations’ and confusion about profits and earnings, and offering ad hoc advice about investing do not restore authority.

`4) Given the amount of debt the US is incurring (and the decades needed to pay it off), given the loose talk about the ‘rich’, and given the rumors about nationalization, investors are unsure whether the United States will remain a safe haven for investment, or even offer a climate for profit-making, since it would either be taxed to the point of seizure, or its beneficiaries would be culturally and socially demonized. Ultimately perhaps some will accept that as the price of doing business in a socialist US, but for now it creates doubt. This is not a defense of Wall Street (a year ago Richard Fuld and Robert Rubin were our Zeuses on Olympus who strutted like gods), simply a warning that we are going from excess to stasis, and the cure will be as bad as or worse than the disease.

5) Uncertainty. Who is now our Commerce Secretary? Which cowards is the Attorney General talking about? What did Geithner mean about pernicious oil and gas companies? What is with this Solis, and card check? How hard is it to ensure a Richardson or Daschle is clean? In other words, market watchers see after five weeks chaos, and think there is no sure and steady paradigm in which they can make careful business decisions and anticipate with some surety future risk.

So the perfect storm forms, and millions of individuals come to millions of identical conclusions: “Cut your losses with these guys, and get your cash out before it gets worse” rather than “Wow, what bargains! I gotta get in before the window of profit opportunity closes.”

It’s scary how much sense it makes.

I wonder what the other side’s take on it is. I’m perceiving, rightly or wrongly but I think rightly, that there is a point of agreement among persons of all ideological tints and shades that there was a serious downward slide in the third quarter of ’08 that continues today. “On George W. Bush’s watch.”

Well, I’m certainly not flush with biases favorable to The Chosen One. But to a more objective mindset, even, it seems to me when you overlay His prospects of winning the election last year, with what the market was doing, the evidence is damning. Let’s see, He had this long knock-down drag-out with Hillary…the bottom fell out sometime shortly after that whole thing was resolved. There may have been a brief spell of semi-serious doubt from Palin-mania, but perhaps the Palin-mania took root only with the dedicated knuckle-dragging barbeque-breath bitter people clinging to their guns and Bibles, like me. At any rate, Charlie Gibson and Katie Couric did their level best to put the kibosh on it, and they succeeded in short order.

Obama came to enjoy a virtual lock on the presidency, at just about exactly the time the market tanked. If you want to get pinpoint-precise about it, I seem to recall a major avalanche about a third of the way or halfway through October — right about the time word was getting around about what He told Joe the Plumber about “spreading the wealth around.” What does VDH’s Point #2 say up there? “A redistributive economy in which government ensures an equality of result is Wall Street’s worst nightmare.”

Game, set, match. Now, is there a way out of this tailspin, other than impeachment? Because somehow, I have my doubts that a President Biden or President Pelosi will succeed in reversing the trend.

Financial Aspects of the SotU

Friday, February 27th, 2009

Like all dopey ideas, the State of the Union is dealt the most devastating damage when it is taken seriously. Rather like a beached whale suffocating under its own weight — its rib cage simply wasn’t designed to withstand the force.

This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.

Consider the IRS data for 2006, the most recent year that such tax data are available and a good year for the economy and “the wealthiest 2%.” Roughly 3.8 million filers had adjusted gross incomes above $200,000 in 2006. (That’s about 7% of all returns; the data aren’t broken down at the $250,000 point.) These people paid about $522 billion in income taxes, or roughly 62% of all federal individual income receipts. The richest 1% — about 1.65 million filers making above $388,806 — paid some $408 billion, or 39.9% of all income tax revenues, while earning about 22% of all reported U.S. income.
A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010.
The bottom line is that Mr. Obama is selling the country on a 2% illusion. Unwinding the U.S. commitment in Iraq and allowing the Bush tax cuts to expire can’t possibly pay for his agenda. Taxes on the not-so-rich will need to rise as well.

Call me nutty, but this has just the whiff of inspiration for a rather cagey sort of optimism. President Obama, clearly, has meant very little of all the things He has said up until now. Changing America, it would seem, is about the only thing His rhetoric has had in common with His deeds. If He’s just promised to spend money on all these programs He obviously can’t afford, with His track record that’s pretty much the same as not having promised anything at all.

Again: The fault does not rest with President Obama. The fault lies with the rest of us. It’s a non-partisan position that we shouldn’t pass on debt to the next generation, but it’s a blisteringly partisan position to take that we should write to our congressmen or to the White House telling ’em to stop spending so much goddamned money.

No such dichotomy can be embraced by a sane mind. But that’s the mindset of our culture right now. So what’s this little dance people are going through, pretending to be trying to make sane decisions? Who do they think they’re kiddin’?

Cross-posted at Right Wing News.

Being a Dictator, Being a Bitch…What Else is Left for Feminists?

Tuesday, February 24th, 2009

Speaking of “Buck,” our good blogger friend down in New Mexico by that name is taunting us, ridiculing our favorite Presidential (Vice) candidate in the title of his latest post.

Yeah good one, Buck. Like you wouldn’t give up some teeth to see her sworn in right about now. In hot pants, Supergirl cape and go-go boots. Hey…for the next three years, ten months and three weeks, that last part is about as likely to happen as the former part…a fella might as well dream.

Well, Californians know how to be snarky too. So I sent him a link to Cassy’s place. In which a feminist is demanding her rightful status, not as a flesh-burning, head-chopping brutal dictator, but rather as a more modest generically-unpleasant female person. A rhymes-with-rich.

As if we’ve had some kind of shortage of those.

Speaking of delusions of supply-and-demand, I hear PrezBO is going to descend from his cloud tonight to tell us the best way to balance the budget is to spend money we don’t have like crazy. Oh yeah, Obambi! That’s exactly the way my household does it! Phone’s about to be shut off and there’s a cardboard thingy from the power company on my doorknob…only one thing to do…run up the charge cards on a whole lotta crap!

That doesn’t seem to make an awful lot of sense, does it?

And yet…there our elected representatives go…the ones whom, I’m told, are so much smarter than the rest of us. Doing that very thing.

You figure this shit out, drop me a line explaining it. Okay? I’ll be snoozing away, dreaming about a certain Governor of Alaska being sworn in, in some kind of getup that would make Stacey Keibler blush.

Thanks For Doing Everything My Way, Now You’re All Dead

Tuesday, February 24th, 2009

Within the list of guys in world history who got everything done their way, George Soros is my nominee for all-time champion Gloomy Gus.

At Columbia University last Friday, legendary hedge fund manager George Soros shocked his audience, proclaiming …

”We witnessed the collapse of the financial system. It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.“

Soros went on to say that …
The crisis is actually more severe than the Great Depression …

It’s like watching the demise of the Soviet Union, and …

There is no prospect of a recovery any time soon.

Kind of reminds me of Eric Holder’s speech…you know, the “Thanks for electing a President of color who appointed an Attorney General of color, and by the way, you’re all cowards.”

Why are people so adamant about having everything done their way, and then just sit around and squawk that things are so bad, once it happens?

More on Soros

Regulators are in part to blame because they “abrogated” their responsibilities, Soros, 78, said. The philosophy of “market fundamentalism” was now under question as financial markets have proved to be inefficient and affected by biases rather than driven by all the available information, he said.

“We’re in a crisis, I think, that’s really the most serious since the 1930s and is different from all the other crises we have experienced in our lifetime,” Soros said, adding that the Federal Reserve had created several by lowering interest rates.

I’ve heard all these talking points before. With weaker regulation, people looked after their own selfish interests and ruined things.

Trouble with that is, what are we hoping will revive, exactly? Something called “the economy,” right? Can anyone tell me what an economy is…other than a bunch of people looking after their own selfish interests?

In fact, since these greedy selfish people are just people, and regulators are just people — it’s a little like arguing what color to paint a bomb you’re going to drop on a city, isn’t it? I mean, what exactly is it about regulators that makes them wise and un-greedy?

All I can think of is motivation. Those filthy robber barons are motivated toward a healthy bottom-line. Huh. You know, if what we’re bitching about is unhealthy bottom-lines, I don’t see how their objectives are different from ours. People like Soros have had many chances to explain this to me, and I must be too dense to figure it out because it remains a mystery. Regulators, on the other hand, aren’t really motivated toward any one thing…their job, when you get down to it, is to get in the way when decisions are made too quickly for the benefit of the bottom line. To be a fly in the ointment, a pain in the ass. They represent everything-else. They’re the opposition.

But getting back to the subject of this post. How decisively does an election have to culminate in a triumph for Mr. Soros’ interests, before he stops being such a depressing little gnome? This is a guy who has ruined national economies for his own personal benefit. The more I think of it, the more his lecturing us about greed, seems one and the same as Eric Holder lecturing us about cowardice.

I think this needs to go in the memory file, for the next time we’re presented with an opportunity to do things the way these gentlemen want us to. You know, it’s true throughout all of life, anytime someone demands you do something rather than asking nicely…

Thing I Know #52. Angry people who demand things, don’t stop being angry when their demands are met.

Obama’s Bold New Plan to Wreck the Economy

Monday, February 23rd, 2009


I’m very proud to announce the establishment of a new government agency called the Monetary Uniformity Group. This agency will put people to work performing a simple but effective task: Americans who are currently [mimes scare quotes] “earning” too much money will be relieved of all excess cash — by force only if necessary — after which it will be gathered up, bundled into thick, heavy bales, and thrown into a wood chipper.

Now, I know what some of you are thinking, but please keep in mind that this plan is flexible. It could be some sort of industrial shredder instead. Or the money might be incinerated with flamethrowers, or weighed down with lead and dropped into the deepest part of the ocean. There are any number of options. The whole idea is to get that money moving away from people who don’t deserve it.

To put it in terms someone like you might be able to understand: Look at your neighbor. Is it fair that he has a nicer car than you? A bigger TV? A younger, more physically fit wife or girlfriend? Well, then, let’s see how he likes it when I grab his wallet and throw it in the wood chipper.

[Smiling, Obama mimes taking a wallet from someone’s pocket with his thumb and forefinger, tossing it over his shoulder, and cringing slightly at the imaginary roar of the machine.]

Just picture that. Doesn’t it feel good? A minute ago he thought he was soooo great, and now he’s all mad because he doesn’t have his iddle-widdle wallet. Look at him, he’s actually crying. Got something to say, Richie Rich? Yeah, I didn’t think so.

Only by following this plan can we restore America to the greatness it has yet to achieve. Remember: You deserve better, which means everybody else deserves worse.

Thank you.

Good satire resembles real life. I’m afraid this bears more than just a passing similarity. And just remember, Obamatons, this does nothing to break a campaign promise. There were very few made. You weren’t that insistent on finding out what Chosen One was gonna do. All that mega-awesomeness to be celebrated.

Hat tip: Gerard.

“President Obama Has Turned Fearmongering Into an Art Form”

Tuesday, February 17th, 2009

Bradley Schiller, writing in WSJ Friday:

President Barack Obama has turned fearmongering into an art form. He has repeatedly raised the specter of another Great Depression. First, he did so to win votes in the November election. He has done so again recently to sway congressional votes for his stimulus package.

In his remarks, every gloomy statistic on the economy becomes a harbinger of doom. As he tells it, today’s economy is the worst since the Great Depression. Without his Recovery and Reinvestment Act, he says, the economy will fall back into that abyss and may never recover.

This fearmongering may be good politics, but it is bad history and bad economics. It is bad history because our current economic woes don’t come close to those of the 1930s. At worst, a comparison to the 1981-82 recession might be appropriate. Consider the job losses that Mr. Obama always cites. In the last year, the U.S. economy shed 3.4 million jobs. That’s a grim statistic for sure, but represents just 2.2% of the labor force. From November 1981 to October 1982, 2.4 million jobs were lost — fewer in number than today, but the labor force was smaller. So 1981-82 job losses totaled 2.2% of the labor force, the same as now.
Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a “recovery” package that delivers a lot less than it promises. A more cool-headed assessment of the economy’s woes might produce better policies.

I wonder if the spirit of pessimism that enshrouds us after a typical “Hope and Change” Obama speech, isn’t quite so much pure emotional depression, or pure economic analysis, but more a reasoned pondering of the history of executives taking charge of things.

After all, bosses typically pull victory from the jaws of defeat when they take ownership of a given situation. If they spend all their time blaming their predecessors for every little hiccup, they usually preside over disaster.

In the pantheon of hopeful guys, this new President doesn’t seem to have an awful lot to do with hope. And when I hear this new President speak, what I usually hear is a lot of blame. It’s not the rhetoric that comes from a boss who is about to preside over victory. It’s the kind of stuff you hear from a ship’s captain who has made damn sure his name is on the safest lifeboat.

Hat tip to Dr. Helen.

Neo-Neocon on Alan Greenspan

Sunday, February 15th, 2009

She says his ignorance is rather shocking, and I’m going to have to go ahead and agree.

For years, Alan Greenspan was thought to be a genius, responsible for keeping inflation at bay and encouraging our booming economy. He fine-tuned interest rates to make sure all this was going smoothly, and to the best of my recollection he earned resounding praise from almost everyone.

Well, it turns out this emperor had no clothes after all. But when he finally realized something was fishy, somewhere around late 2005, he says there was nothing he could do about it:

“If we [had] tried to suppress the expansion of the subprime market, do you think that would have gone over very well with the Congress?” Mr. Greenspan said. “When it looked as though we were dealing with a major increase in home ownership, which is of unquestioned value to this society—would we have been able to do that? I doubt it.”

Funny thing, I happen to agree with him. That doesn’t mean he shouldn’t have tried, though. Nor does it excuse the rather shocking disclosure of the limits of his understanding of derivatives and the mortgage market and what it all meant.

One of the most interesting quotes from Greenspan is this:

We could have basically clamped down on the American economy, generated a 10 percent unemployment rate,” he said. “And I will guarantee we would not have had a housing boom, a stock market boom or indeed a particularly good economy either.”

In other words, we could have suffered then instead of suffering now. There is no free lunch; ever hear of it? I wonder if Greenspan has.

When a bubble is created, it must burst at some point, because bubbles are inherently fragile things. But just try telling it to Congress, then or now.

Here, let’s take some different excerpts from the story and then I’ll offer my thoughts:

Alan Greenspan, the former chairman of the Federal Reserve, told CNBC in a documentary to be shown Thursday night that he did not fully understand the scope of the subprime mortgage market until well into 2005 and could not make sense of the complex derivative products created out of mortgages.

“So everybody in retrospect now knows that that boom was developing under the markets for quite a period of time, but nobody knew it,” Mr. Greenspan told CNBC’s David Faber. “In 2004, there was just no credible information on that. It wasn’t until we got well into 2005 that the first inklings that that was developing was emerging,” he said.
The Fed’s “easy money” policy created an excess of cash that inflated equity and asset prices, leading to both the technology bubble of the late 1990s and the housing bubble in this decade.

While Mr. Greenspan acknowledges that he could have done something to avert the housing crisis, he contends his hands were tied.

“If we tried to suppress the expansion of the subprime market, do you think that would have gone over very well with the Congress?” Mr. Greenspan said. “When it looked as though we were dealing with a major increase in home ownership, which is of unquestioned value to this society — would we have been able to do that? I doubt it.” [emphasis mine]

NN’s analogy about the Emperor and clothes just seems more and more apt, the more you find out about it, huh? Bubble this, bubble that…bubble, bubble, toil and trouble, fire burn and cauldron bubble.

It is the price we pay for fiat currency: The value of money is based on the emotional state of some construct, which in turn consists of millions of strangers who will never be personally met.

And so, since we went off the gold standard, and for many years before that, every single universal financial difficulty has been a direct result of a bubble bursting. What happens when a bubble bursts? An exuberant perception of an asset’s worth, is suddenly realigned with the more modest reality of it. It was true in the case of these homes, and the loans attached to them; it was true of the dot-coms, and the practical value of an hour of labor from the geeks who staffed them; it was true of the stocks, the bonds, the petroleum — everything. It’s all evaluated by the emotional state of strangers.

Which means we’ve Yang-ified money. That means, rejecting a more methodical arrival at reasoned inferences based on established facts, in favor of group-think. Nothing is carved in stone because it all depends on what the other fellow thinks. Greenie came out and admitted it word-for-word up there, didn’t he: “If we tried to suppress the expansion of the subprime market, do you think that would have gone over very well with the Congress?” This is why committees make bad decisions. Cause-and-effect takes a back seat to what-does-someone-else-think.

Our twenty-first century economy is one that is prone to bubbling up, because bubbling is what it is. Our money is bubbles, our investments are bubbles, our houses are bubbles. All our property is bubbles. We chose to make it that way — everything is valued according to the way it is perceived, and so this painful alignment of perception-with-reality has become a way of life. Crashy, crashy. Get used to it. We don’t have the proper mindset to confront unpleasantness early — we have rejected that option every time it has arisen — so we have to do our confronting late, when it’s more expensive for us to do it.

The mystery, though, is that I can figure it out and I’m just a guy in his underwear typing on a laptop, enjoying the benefits of a rather lackluster high school education.

This was a surprise to Greenspan?

They Monopolize Emotions

Wednesday, February 11th, 2009

Well, Good For Her!The one thing that made by far the biggest impression on me about the joyful, tragic, thigh-slapping ya-gotta-be-kiddin’-me tale of Henrietta Hughes, is the list of comments under the story at Fort Myers News-Press (hat tip: Boortz). It’s just like Wikipedia — half a quart of relevant information for those willing to study the article itself, plus a five-gallon bucket of it if you’re willing to simply click through to the “Talk Page.” Henrietta’s a plant. Obviously. It’s a little silly that there’s any debate about it. And President Obama saw to it she got everything she wanted…since she was on camera, and he’s a bleeding-heart lib. Then he made sure he got the publicity for it. So far, everyone’s doing what they can be expected to do.

Well, you’re not likely to meet Henrietta Hughes or Barack Obama. What is useful, is to study the behavior of everyday folks. These are the people with whom you have to share a subway ride, or a freeway, or an office building. And this is a fascinating window into the souls of all of us.

Do select the option to read the oldest posts first. Pretty please. See what I see? For the first page and a half, no critical thinking whatsoever — none. Oh joy! She got a house! And she’ll live happily ever after!

This is how people think. It’s the “doughnut rule”: Once someone’s picked out the first glazed, or maple bar, it’s fair game. You can measure the consumption in pastries-per-minute. But until that first one’s been picked out, the box just sits, and sits, and sits. No one wants to go first.

That’s the way with noticing, by President Obama’s behavior, that it’s nearly impossible for Ms. Hughes not to be a plant. And, that if everything’s on the up-and-up, her problems are just beginning because of the taxes that have to be paid on her new home. And — gosh, it’d be nice to have some more details about what happened here, like how she got into this rally, what her 37-year-old son’s situation is, how things got to this point, and that really ugly one…what are all the other homeless people supposed to do, just wait in line for The Divine One to descend from heaven somewhere near them?

This is why I want you to read oldest-first. See the doughnut-rule in action. One or two dozen glittery comments from folks who’ll just let the naked Emperor parade right on by. By the third page, people have been given license to type in exactly what’s unsettling about this, what’s giving them second thoughts.

But the intellectual lightweights continue to lash out.

I think my favorite was AuPouvoir:

2:55:07 PM
I would like to know what else Mrs. Hughes needs, and how I might get it to her.

3:40:56 PM
Replying to wickedlyscarlett:

I am so tired of these gimme gimme gimme types of people. Gimme a break!! They’re leaches!

You need to sit back and reflect.. there but for the grace of God, go YOU!

3:41:47 PM
Replying to grannym1:

I am glad she is getting help, but SHE WAS PLANTED IN THE AUDIENCE. Someone knew of this problem and pulled strinsg so “Obama of the White Momma” would look good. This woman is no
better off then my grandson who can not get disabbilty or health insurance, unable to work, needs a hip repacement more whiney stuff. etc. So excuse me but poltics are just that. Obama of the White Momma, need more that this showy stuff. So get behind me Satan and lets help the economey instead of showing off !

You should be ashamed of yourself. I don’t even know you, and I’m ashamed of you.

You see the pattern I’m seeing?

You have the goo-gooders — and you have the every-man-for-himself s.o.b.’s. You have feel-good emotions — and you have logic and reason.

The goo-gooders do not deal in logic & reason at all. Many among their ranks will admit this readily. Who cares about what causes what, and what is the effect of what, when Ms. Hughes’ story just makes you feel so gosh darn good? Others will put up some kind of phony masquerade pretending that they are, in fact, dealing with logic…or a superior base of knowledge, anyway. We all are, after all, just a paycheck away from living in a car just like Henrietta Hughes, are we not? So you s.o.b.’s need to just think ahead, and anticipate where you’ll end up someday. Henrietta Hughes is you!

Now the s.o.b.’s work with a mixture of logic and emotion. Logic as in: Eh, Obama can’t give anybody a damn thing without taking it away from someone else. If massive blessings are about to rain down on someone due to the blessings flowing from the Substitute Jesus, there will have to be an equivalent plundering from someone else.

Here, we run into a basic fact about people and the way they behave. Parents, telling their children how people work, out of politeness leave this out…along with lots of other things. In fact, it’s right there on the list of Things I Know Now About People That I Wasn’t Told When I Was a Child — Item 16:

People who are overly concerned about their emotions, don’t want anyone else to be overly concerned with thinking.

So you see, this is why AuPouvoir is ashamed of someone she doesn’t even know. She’s overly concerned with her emotions, she doesn’t want grannyml to be concerned with thinking…even if it’s thinking about others who are worse-off than Henrietta Hughes, and/or are perhaps more deserving of assistance from others. This really has very little to do, and probably nothing to do, with helping others worse-off. It’s about a cheap and easy way to “prove” you’re a decent person.

If this reads like I’m picking on AuPouvoir and people like her, I’ve only just begun. There really is no appeal in cheap-and-easy ways to prove you’re a decent person…if, deep down, you already think of yourself that way. In fact, if you’re truly concerned about lightening the load of others, the very last thing you’re going to do is upload a post to the blog of the Fort Myers News-Press saying you’d “like to know what else Mrs. Hughes needs” so you can get it to her. If this was your concern, you wouldn’t even need to have it pointed out that gosh, maybe there are some other folks just as badly off as Ms. Hughes who haven’t managed to attract the publicity. You wouldn’t need to have that pointed out to you. You’d already know.

But the real scolding comes for the every-man-for-himself s.o.b.’s who deign to show their emotions. See, the goo-gooders are unhappy when the s.o.b.’s vocalize their thoughts; but they’re really, really unhappy when the s.o.b.’s vocalize their emotions. That, right there, is encroaching on the goo-gooders’ turf. It’s a turf thing; definitely a turf-thing. To the dedicated goo-gooder, emotions have one purpose and one purpose only, and that’s to showcase to each other what incredibly decent people we are. And goo-gooder is the only way any humans should ever be. All those other ones should just dry up and blow away.

They want a complete monopoly on emotions. They get to have their emotions — you aren’t allowed to have yours. Not unless you join them.

These are not stable people. For a number of reasons. For one thing, if they got exactly what they wanted, they’d be miserable. There wouldn’t be any humans left except goo-gooders…emotional goo-gooders…constantly communicating their emotions about how much they want to help poor people. Which would just stiffen the competition. They’d have to talk & type that much faster, to maintain their “King of the Mountain” status in wanting to get more help to Henrietta Hughes. It isn’t about helping Ms. Hughes, or talking about helping Ms. Hughes. It’s all about relativity. It’s a competition. A race. As in, ha ha, I’m better than you, I want to help Henrietta Hughes more than you do.

The other thing is, they want anyone not like them, to go away. Not to lose arguments…but to disappear. That is always a sign of instability. But as a general rule, every-man-for-himself s.o.b.’s are more productive than goo-gooders. People tend to get bitter about having things taken away from them, when they had plans insofar as what they were going to do with those things.

So the goo-gooders can’t really afford for the s.o.b.’s to go away, because someone has to be fleeced in order to fund their plans to get houses to people like Henrietta Hughes. They want something that, because of their own ambitions, they can’t have.

I suppose I could’ve left these thoughts un-typed. If President Obama’s chosen strategy is to put people like Ms. Hughes in his audiences as plants, I could’ve pointed this out any ol’ time. Indeed, I do think this is the Holy President’s Grand Strategy, and I do think there will be many, many more occasions to comment on it later on.

But when I do, I’ll make a point of observing not so much how He behaves, and how His audience-plant-of-the-month behaves…but how others behave. There won’t be a lot of variation to it. The doughnut-rule will apply, and Item #16 will apply too. So, too, will Thing I Know #266:

People will flock, like moths to flame, to a way of showcasing some inner decency that is costless and doesn’t really mean anything.

These are constants in the human condition.

Lukewarm Reception

Wednesday, February 11th, 2009

It amounted to a do-over for tax-cheat and guy-who-runs-the-I.R.S. Timothy Geithner.

For Treasury Secretary Timothy F. Geithner as much as for the troubled government program to bail out the financial system, Tuesday amounted to a do-over.

Initial reviews for the man and his plan were not good, however. Stock markets slid through the day, perhaps spurred downward by withering punditry on the business-news cable channels faulting Mr. Geithner for not providing more details, particularly on stemming home foreclosures. Senators of both parties lodged similar complaints at a hearing.

“I haven’t heard yet how we’re going to solve this problem,” Senator Bob Corker, Republican of Tennessee, told the Treasury secretary more than three hours into the Senate Banking Committee hearing.

With a formal speech, live television interviews and then his Senate appearance, Mr. Geithner announced the Obama administration’s overhaul of the Bush administration’s bank bailout program, which had proved largely ineffective at getting credit flowing again.

I have a really thin paperback on my bookshelf. It’s called “Government plans to meddle in the economy, that worked.” It’s up there, sandwiched among “Republicans who survived scandals,” “democrats who didn’t” and “Movies made from video games that don’t suck.”

Seriously. As I just said last night, I’m flabbergasted at how quickly this whole party is over. “Party,” not as in political party, but that huge cocktails-and-LSD bash that was The Annointed One’s inaugural festivities. Where’s all that hopey-changey goodness? I wish I was happy about all this failure as the Obamatons keep saying I/we are. I’m not. I’m about as happy as I am when I’m watching one of those scary movies, and the girl’s walking backwards after the lights have gone out, muttering “Bobby is that you? It’s not funny anymore”…and doing drugs…and fornicatin’…pretty much breaking all the rules. And you have the scary music going on, and she hears a noise but it turns out to be the cat…and then she runs into the REAL KILLER and gets her head lopped off. Yeah, just like that. “*Sigh* Couldn’t have seen that one coming.” How quickly we reach the turning point, is surprising. That we did — not so much.

Practicing Obamanomics in Everyday Life

Tuesday, February 10th, 2009

Fellow Webloggin contributor Joshuapundit…this needs no further comment from me.

Which isn’t unusual; it’s a little unusual, perhaps, that I can see it needs no further comment from me…anyway, on with the show.

A hilarious way of practicing Obamanomics and `spreading the wealth around…..’:

Today on my way to lunch I passed a homeless guy with a sign the read “Will Vote For Change.” I thought that was hilarious.

Once in the restaurant, I noticed my server had on a “Obama 08” button, so I thought this was a superb opportunity to see how this works in real life.

When the bill came, I decided not to tip the server and explained to him that I was exploring the Obama concept of spreading the wealth around. He stood there in disbelief while I told him that I was going to redistribute his tip as an economic stimulus to the homeless guy outside. The server angrily stormed away …apparently he has no concept of Hope n’ Change.

I went outside, gave the homeless guy $10 and told him to thank the server inside as I decided he could use the money as a stimulus. The homeless guy was grateful and thanked me.

At the end of my experiment in economic stimulus, I realized the homeless guy was happy to take money he did not earn, but the waiter was really angry that I gave away the money he earned even though the homeless guy needed the stimulus more,based on my criteria. Obviously the waiter was Rich, and doesn’t understand that the homeless guy needed and deserved the money more, based on Obamanomics. The homeless guy,however, was happy with the Change.

I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.

And I guess the waiter just needs to get used to working for the change he voted for, hmmm?

Where the Present Crisis Began

Sunday, February 8th, 2009

Baron’s, via Hot Air, via Newsbusters, via Gateway Pundit:

We are in this mess largely because critical thought and moral judgment have been subordinated to the politicization of our economy, resulting in regulatory gaps and excessive controls of the wrong kind. Government regulations should be limited to those that increase and protect transparency and competition, protect public and private property, promote individual responsibility and enforce equal opportunity under the law. Even if the right laws and regulations could be found, they would prove insufficient to protect freedom and prosperity.
Today’s problems have their roots in programs and financial instruments that shifted the locus of moral responsibility away from private individuals and institutions to wider circles that were understood to end with a government guarantee. Heads of the top banks and financial institutions could approve substandard home-mortgage underwriting — prone to increased default — because those loans could be securitized by Wall Street and sold off to investors or to government-sponsored enterprises (GSEs), with no likely recourse to the financial institution of origin.

Our present crisis began in the 1970s, during the Carter administration, with passage of the Community Reinvestment Act to stem bank redlining and liberalize lending in order to extend home ownership in lower-income communities. Then in the 1990s, the Department of Housing and Urban Development took a fateful step by getting the GSEs to accept subprime mortgages. With Fannie and Freddie easing credit requirements on loans they would purchase from lenders, banks could greatly increase lending to borrowers unqualified for conventional loans. In the name of extending affordable housing, this broadened the acceptability of risky loans throughout the financial system.
There is plenty of blame to go around on both sides of the political aisle. But the lesson should be clear that socializing failed businesses — whether in housing, health care or in Detroit — is not a long-term solution. Expanding government’s intrusion into the private sector doesn’t come without great risk. The renewing and self-correcting nature of the private sector is largely lost in the public sector, where accountability is impaired by obfuscation of responsibility, and where special interests benefit even when the public good is ill-served.

It’s not Bush-apologia, it’s just plain truth…and it’s important truth. This conundrum was not caused by a dearth of government meddling, but rather by an abundance of it.

Pretending to Value Experience

Sunday, February 8th, 2009

I thought it was interesting a few minutes ago when I noticed my local paper’s editorial section has four cartoons — all four of them are dedicated to a common theme. That these “Wall Street executives” are receiving huge bonuses and compensation for their experience, and it’s just a big crock.

One sympathizes. Who among us hasn’t worked for a large company, and seen his own division placed under the tutelage of a “seagull manager.” Who among us cannot recall one or several seagull managers brought in from the wreckage of some previous failure, often compensated to ludicrous extremes both in the past & present. Who among us cannot recall the resulting plummet in morale. Yes, experience can be overblown; in fact, the purported effort to compensate “appropriately” for experience, can be a half-hearted effort to camouflage something that could be called, with more than a hint of accuracy, bribery.

What is of interest to me, is Mr. Geithner’s fiasco. It’s just in our rear-view mirror, not too much distance between where that is, and where we are. We just went through it. For those who have been living in a cave, Mr. Geithner had thousands of dollars of unsettled tax issues, bearing the imprint of the weakest excuse there ever was — “I forgot.” The position to which he was nominated, is our nation’s top tax dude. And he was confirmed. Why? Because in times like these, we need his experience.

This is merely the latest example of the oldest rule in Washington: “Do as I say, not as I do.”

So is there anything at all that we could call the Geithner rule, something that takes the news and hardens it into precedent, allowing at least some of us a measure of forgiveness for our own innocent mistakes?

I think so, but you’ll have to bear with me. It goes like this:

Mr. Geithner got a pass on his tax problems because we really, really like him. So he gets a highly individualized form of amnesty. Sort of a personalized “olly olly oxen free.”

Also, we really, really need him. It’s almost like what Princess Leia said in Star Wars: “You’re my only hope.”

So if there’s a Geithner rule, it is extremely narrow. I believe that we should call it the olly olly oxen free, Obi-Wan Kenobi amnesty. If you are the nation’s only hope, you might qualify.

Here’s a simple test: Is your name Timothy F. Geithner? No?

See you at the audit.

Yeah, I think the rule is just a tad different. It has to do with experience. It’s a precious commodity if you work in government, especially if your job is to take money away from people who earned it. Not so much if you work in business and are tasked with making things happen that actually produce the wealth that the government will be taking away.

With its experienced people running the collection proceedings, and what-not.

Do you realize the utter devastation this mindset encounters if it is opened to just a tiny bit of challenge? Let’s try it: Once in awhile, here and there, a businessman will be experienced and his experience will really count for something — compensated or not. Money will then roll in, which means Geithner’s IRS will come knocking. To take that money. The continuing operations of the government will be counting on it, since experienced people like Geithner will be moving the money around, not actually producing it, which is an entirely different thing.

Government's RoleThe experienced people running our government will therefore be tasked with “appreciating” the experience of others…for the purpose of confliscating the money that resulted from that experience. Not for the purpose of compensating it appropriately. Only they, with their experience moving money around, may be compensated for their experience — which, in turn, is useless if there’s no money to be confiscated or moved around.

In fact, they’re about to use their experience to limit the compensation that may be made for experience in the private sector. Yeah, right now that limit is to apply only to firms that accept bailout money. If it passes. But that’s for now.

Bottom line: We’re still in the process of figuring out if there’s really a bunch of “hope in the air” after this changing-of-the-guard last month. Perhaps the status quo is much better now than it was previously. Perhaps it does make sense in the final analysis. Maybe the folks running the show really know what they’re doing. But if that’s the case, experience counts for — something extreme. All, or nothing. One or zero. No fractions allowed.

And it counts if you work in government, which produces nothing, and doesn’t count at all in business — where we absolutely, positively, must expect things to improve if the economy is ever gonna get turned around.

One wonders what these maybe-experienced, maybe-not business people are doing to create that money if whatever experience they have, doesn’t matter for squat. The mind boggles. If your scheme is to fly into Vegas and play the tables, you have to have experience to do that, right? If it involves just doing some kind of rain-dance and hoping it’ll rain dollars and quarters, I would think experience would count there, too. So what is it we think these people do? Just grow hundred dollar bills, like an old man growing hair in his nose & ears?

Cross-posted at Right Wing News.