Archive from February, 2009
10 Feb
2009
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Obama’s Plan for the Census

There’s a great op-ed in today’s Wall Street Journal by John Fund about how the Democrats plan to subvert the coming census into a political tool for their own benefit.

Read this and spread the word. The donkeys have gone too far on this one and they can’t be allowed to get away with it.

10 Feb
2009
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Talk to People, Not Machines

Frustrated by those awkward computerized phone trees you get when trying to call customer service? Well grab an ax and chop down that phone tree!

The GetHuman Database at www.gethuman.com provides instructions for bypassing automated phone trees for hundreds of companies and organizations so that you can cut to the chase and talk to a real live person to ask your real live questions.

Now, I can’t make any promises that you’ll be immune from the runaround with a live operator. But at least you’ll save a few minutes before slaving away on the intricacies of the English language with a representative from Bangalore.

10 Feb
2009
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Stimulus for All, Except Oil Companies Working in Utah

Interior Secretary Ken Salazar cancelled oil and gas leases on 130,000 acres in Utah last week.

The signal sent here is that if America is going to get stimulus money to invigorate our economy and create jobs, those jobs are not going to be in the oil and gas sector. And if we are going to ween ourselves off foreign oil, we are apparently not going to consider developing our domestic oil resources in the interim.

That’s too bad. Any cohesive energy policy that expects to succeed is going to have to include developing domestic oil and gas reserves, otherwise it simply will not work. Nuclear plants and the implementation and distribution of wind and solar power will take many years to develop. What are we supposed to fuel our economy with in the meantime if we don’t use oil during this transitional period?

10 Feb
2009
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Sad State of the White House Press Corp

President Obama should have had his feet put to the fire at tonight’s press conference on a number of occasions, but the White House press corp totally blew it.

Obama claimed there is no pork in the stimulus plan. That’s a flat-out falsehood. It’s loaded with pork. He also used several occasions to talk up bipartisanship, which never really existed, and pushed the false choice that it was either the stimulus or Doomsday. (The Republicans have come up with a perfectly reasonable stimulus alternative).

I could go on and on. Perhaps I will have to because we certainly can’t rely on the White House reporters to challenge Obama about the shaky points he made. The only questions he got were practically designed for him to reiterate the points he made during his opening statement.

10 Feb
2009
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You Say Press Conference, I Say Softball Tourney

President Obama’s first prime time presser isn’t even over yet as I write this, but I can’t wait to decry what a complete sham it was.

First off, virtually every answer he gave to a question related to the stimulus was equal in length to his ten-minute opening statement. His foreign policy answers, not so much. We got a healthy dose of ums and uhs there.

Second, the White House press corp can lob some nice pitches. The ones that Obama hit probably won’t even land before next Tuesday.

Third, Helen Thomas touched on the presence of “so-called terrorists” in the hinterlands of Pakistan. “So-called terrorists?” Can someone tell me, is she still with UPI or did she go back to Pravda?

Fourth, Obama on more than one occasion blamed the previous administration for a $1 trillion deficit. Obama’s going to double that deficit by the time he hits his second year in office, so he might want to temper the finger pointing. Also, the reason there was a $1 trillion deficit in the last year of the Bush administration was because of emergency spending to stem a financial crisis that had its origins in the loosening of lending practices so that low-income people could buy homes they ultimately couldn’t afford.

10 Feb
2009
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A Plan To Get Our Economy Working Again

American Solutions, a non-partisan organization fronted by former Speaker of the House Newt Gingrich with the goal to end partisan gridlock in Washington, has come up with a plan to get America’s economy working again.

“12 American Solutions for Jobs & Prosperity” will do more to help our current economic situation than the current stimulus bill.

A few of there suggestions are below:

Get rid of the capital gains tax:

  • This will give consumers confidence to invest in American industry and therefore bring jobs back to numerous sectors in our economy.

Invest in new energy and transportation infrastructure

  • Our current transportation system is in shambles with roads and bridges that need repair, numerous airline delays and cancellations, and a limited rail system. I believe one solution could be to invest in European-style bullet trains…that will help move people quickly within these six regions (Atlantic Coast, South, Midwest, Southwest, Northwest, Pacific Coast). This would allow commercial airlines to focus on cross region and international travel, therefore reducing air traffic

The rest of the solutions are here.

9 Feb
2009
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George Reisman on Dowd

Here’s a link to Prof. George Reisman’s (Professor Emeritus of Economics at Pepperdine University) retort to Maureen Dowd’s NYT column on executive compensation.

…I’m thinking even a Democrat would realize she’s in over her head.

9 Feb
2009
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Obama Begins the Buckling Process

Iran’s testing missiles. North Korea’s testing missiles. What is President Obama’s plan? To “reconsider” our missile defense system. In political parlance this means he is going to stop it.

Which means Russia will think we’re weak for caving in to their demands to remove the system in Poland. History has proven that their demands from here will only get bolder.

It also means that Iran and North Korea will continue their push to militarize terrorists and all of our enemies. Again, history has proven that in the face of anything but pure force, they will only be emboldened to come after us.

I’ll try to be as unequivocal here as I can: Anything short of continuing to research, fully fund, build, and deploy missile defense systems to protect ourselves and our allies will be a mistake of epic proportions. Let the consequences fall squarely on Obama’s shoulders.

6 Feb
2009
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TARP: Anodyne or Asinine?

This is no place to comprehensively review TARP and the sub-prime mortgage crisis, and I know for a fact that there are more authoritative sources than the me, a political hobbyist. But in light of yet another “stimulus” bill, it is helpful to have a fundamental understanding of the underpinning ingredients of this unprecedented government intervention in our economy.

To understand how a burst housing bubble can cause so much misery, one needs to understand first the function of prices in a market economy. Prices are what coordinate economic activity. They are, fundamentally, information. If you were charting a cross country road trip, you would look at a map and decide which roads to take in order to satisfy your interests. For businesses operating in a dynamic economy, prices are the GPS on the windshield. Through financial calculation of the predicted profit and loss, business decide what is feasible (profitable) and impossible (loss). In terms of material satisfaction of the population, only accurate pricing can help create new wealth because it allows this calculation.

Prices are expressed in terms of money – that is, they find numerical expression in dollars, pounds, euros, pesos, etc. Money, for this reason, is considered one of the most useful inventions in human history. Monetizing preference, i.e., individual judgments of value, allows for economies of huge scale and complexity to emerge from free and disparate economic actors (that is, we the people). It does not really matter how much money is in circulation, just that the quantity remains stable.

And while money serves the important role of rationally expressing preference, its primary function is one of exchange. It eliminates the main obstacle posed by a pure barter system: the double coincidence of wants. Basically, money allows people to exchange all sorts of services indirectly through a commonly accepted medium. This gives rise to specialization, arguably the foundation upon which modern society is built. Such an understanding should also clarify the difference between money and wealth, wealth being the goods and services we actually consume, among other things, and not the currency.

If the above is true – that money exists (in part) to express preference, allow for economic calculation, and help facilitate coordination – then the effects of increasing the money supply, or inflation, are obvious. In the long run, prices rise proportionately to the monetary expansion, adding no real wealth. But in the short and medium term, before the new money has been properly re-valued, the increase in the monetary base distorts economic calculation of new enterprises. One likely consequence is adding fuel to the fire of a speculative bubble. Can you say “housing?”

Anyone who has taken an introductory macroeconomic course knows how our government adds money to the economy: the Federal Reserve buys U.S. Treasury bills on the market. It does this through the digital age’s equivalent of a money printing press – the computer, the “0” key. Facing likely recession in 2001, the Fed sought to lower their target rate, and thus began purchasing these securities. A graph is available here: http://en.wikipedia.org/wiki/Federal_funds_rate

This new rate allowed banks to extended mortgages (and other loans) at previously unthinkably low rates. Inevitably, projects that before were unprofitable became so due to a lower discount rate. Coupled with the Community Reinvestment Act, this was a recipe for disaster in the housing market. Yet this happened in every industry, housing being only the most prominent. As money slowly came to its new market value corresponding to its expanded base, companies were unable to redeem the dollars for goods/services (this was termed a “credit crunch,” a bit of a misnomer). The economic dislocation brought on by inflation was finally brought to light, and markets and banks began to tank.

Instead of letting markets self-correct, the government, through the Federal Reserve, began buying these “toxic assets,” i.e., conglomerations of solvent and insolvent loans, from banks to help their balance sheets. Consequently, banks are sitting on hundreds of billions of new TARP dollars, food for yet another round of boom/bust. Through monetization, the government socialized the losses of banks, losses that the government helped precipitate.

It’s difficult to understand why our government would do so wittingly. In their defense, academia has its fair share of inflationary apologists (see Paul Krugman), and the philosophy is similar to that of the New Deal (that’d be Fascism and Keynes). The new spending bill, unlike TARP, is not aimed solely at banks (instead, it’s aimed at Democrat special interests groups). It’s purported that it will save 3 million jobs. The truth is that it would shift 3 million jobs into projects that the government, perhaps as few people as a small committee, deems necessary, not the people. It does so through deficit spending, either through borrowing or additional monetary expansion. All this spending adds additional risk to the future validity of the American dollar, teetering already under inflationary fears.

Unless you’re into politbureaus, there is every reason in the world to oppose this bill.

6 Feb
2009
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Deconstructing the Rhetoric

It’s difficult to stomach the daily news cycle when news pundits and commentators butcher the English language like a German would Wiener schnitzel.

In the world of our supposedly bias-free press, words lose their meaning, and as even a cursory knowledge of the philosophy of Ludwig Wittgenstein (a la Wikipedia) would predict, logical analysis cannot therefore exist.

What is a “toxic” asset? It’s not, as the word “toxic” connotes, a poisonous contagion that if left on the balance sheets of banks will spring to life and destroy our cities and families. No, it is simply bad debt. Banks messed up by “securitizing” a bunch of bad mortgages, forced upon them by the seemingly egalitarian Community Reinvestment Act – a product not of infamous “Wall Street greed,” but the United States Congress. The solution is flexibility in contract law and re-negotiation of mortgage rate, along with the standard foreclosure process; there are no shortcuts. Socializing bad loan losses through TARP appears to me flagrantly unconstitutional as well as ineffective.

What of “responsibility?” Responsibility roughly translates to self-reliance when it comes to American civics. President Obama and his sycophantic press, advocates of big government, define responsibility as compliance to government/bureaucratic edict. Twisted, but true.

And how about “Rights?” Well, we’ve got some in the first 10 amendments, but nowhere do I see anything about education or healthcare. Americans have conceived rights as God-given; used to anyway. Now we are told we have a right to education, a right to healthcare, a right to a “livable” wage (likely defined by Barney Frank). No government can provide these things without severely infringing on the liberty and property of others. In other words, our new “rights” demand tyranny.

A gigantic spending bill being rammed through Congress that would line the pockets of Democratic constituents goes under of header of economic “stimulus.” No, taking taxpayer money, particularly money of those who are not yet born, and redistributing it to friends of the Democratic party is not stimulus. It is legal theft being sold by a 24/7 propaganda machine and benefiting from the economic ignorance of the population – the ignorance a product of another failed government program, public education. Above all, such a bill is morally reprehensible.

And, “Action!” “Action” for President Obama means passing this spending bill now rather than later. Correspondingly, any other plan is “partisan.”