Archive from August, 2010
30 Aug
2010
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Obama’s Summer of Poverty

One in six, or approximately 17% of, Americans are now enrolled in government “anti-poverty” programs, an all-time high.

That is what USA Today found in survey of state data:

Government anti-poverty programs that have grown to meet the needs of recession victims now serve a record one in six Americans and are continuing to expand.

More than 50 million Americans are on Medicaid, the federal-state program aimed principally at the poor, a survey of state data by USA TODAY shows. That’s up at least 17% since the recession began in December 2007.

Moreover, more than 40 million are now on food stamps, and over 4 million on welfare.  Private physicians are already at full capacity with patients and worried about the additional 16 million who will become eligible for Medicaid as a result of Obamacare.

Though it may seem overly simplistic, the easiest, most cost effective way to reduce poverty is to allow businesses to create jobs.  The more taxes, regulation, bureaucracy, and political uncertainty, the less jobs and the more poverty.  Note: these are all creations of government.  Therefore, the most effective “stimulus” that government can manufacture is to recede, gradually phase out subsidizing the unemployed, and encouraging the private sector to expand and hire.  With new businesses and new hires, tax receipts will begin to accumulate faster than outlays.

A further positive step that government could take would be to abolish the Federal minimum wage of $7.25.  Unemployment for youth is at an all time high, standing at a staggering 51.1%.  Such a misguided policy only leads to further unemployment or black market jobs.  It is particularly pernicious at a time when prices are falling (i.e., in common parlance, deflation).  A fixed national wage in a deflationary economy essentially means that the least qualified workers are asking for wage increases.  There’s no way youth unemployment will fall substantially given the present conditions and policies.

It has been over 45 years since Lyndon Johnson declared “war on poverty.”  Channeling Johnson, and further back FDR, Barack Obama declared open war on the recession.  Unfortunately, as the warm weather draws to a close, there’s still no end in sight for this so-called “recovery.”

For those who are interested, here’s a list off the top of my head of the records (or near-record) set in this current depression:

1) Record for largest bank bailout – $700 billion (TARP)
2) Record for largest “anti-recession” “stimulus” - $862 billion (source CBO)
3) Record for youth unemployment rate – 51.5%
4) Record for longest average time unemployed (since recordkeeping began in 1948) – 24.5 weeks
5) Record for national debt – $13.3 trillion (a/o August 2, 2010)
6) Record for largest monthly budget deficit – $220.9 Billion (Feb 2010)
7) Record for unfunded liabilities – $60 trillion – $100 trillion
8) Record 1-in-6 on government “anti-poverty” programs (“pro-poverty” seems more fitting)
9) Record 40 million Americans on food stamps
10) Consumer debt – $2.45 trillion (May 2010)
11) Record $1 TRILLION (and counting!) in excess bank reserves (i.e. loan fodder at multiples up to 100x)

In case you’re not all that familiar with the magnitude of national aggregates, these are HUGE numbers and cut across just about every aspect of the economy.  Particularly disturbing is the simultaneous rise of unemployment and debt.  Unemployment and public debt, they teach, must be treated as trade-offs.  (Yes, the Phillips curve refers to “inflation” and not traditional “debt.”  Suffice to say there’s no need to quibble.  Inflation as understood here amounts to debt.)  Too much unemployment?  Increase debt.  Too much debt?  Must suffer through a tighter fiscal policy, and the consequence of more unemployed, to restrain debt.  Obviously, this formulation has reached its theoretical terminus, as unemployment sits at near-Great Depression levels and debt at WWII levels.

Living in New York City, one is wont to hear anecdotal stories from the finance industry.  All anecdotal evidence suggests great uncertainty, extreme risk-aversion, flight to quality (i.e. cash and gov’t bonds) to maintain principal, worries about the necessity to increase taxes to pay public debt, and overall pessimism.

Lurking in the background, for the moment, is #11.  There is simply no historical precedent that we can use as a guide.  The closest I can think of would be the Mississippi Bubble of 1718-1720.  This speculative mania was fueled through the French government’s decision to tie the value of their currency to French real estate rather than precious metals.  This resulted in a multiplication of the French currency, as shares of the Mississippi Company paid dividends with printed notes (the owner of the Mississippi Company, the now infamous John Law, had become the French Gov’ts “central banker,” and could print money at will).  Such machination relieved France of burdensome debt through debauchment, which was the whole point in the first place.  But the spectacular land bubble and currency inflation eventually resulted in France’s admission that notes were not backed by anything of actual worth.  You see, eventually people want to exchange banknotes for goods.  And therein lies the rub.

Make no mistake about it: We are marching off an economic cliff. Come this November, it is critically important to vote for legislators who understand the severity of the situation and will vote with courage to slash spending.

27 Aug
2010
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Jobless Claims, 2Q GDP Down

First time jobless claims declined by 31,000 to 473,000.  It was their first decline in 4 weeks.

In other news, second quarter GDP estimates were revised downward to 1.6%, which, to give some perspective, is positively awful.  Emergence from recessions is typically marked by 4% – 8% growth rates.

The second quarter runs from April – June.  In case you don’t recall, during this time the public was inundated with news of the broad based recovery and strengthening economy.

Now that about half the press and one quarter of academic economists have woken up to the fact that we’re really in a full-fledged depression, confirmed by the events of the third quarter, one wonders what the 3Q growth rate will be?  We can hope it remains positive rather than “double dipping.”

Other considerations:

There was an FOMC (Federal Open Market Committee) meeting in Jackson Hole, Wyoming this week.  Today Bernanke announced that the Fed would energetically fight “deflation,” the specter of falling prices.  (Don’t ask what’s wrong with falling prices; they’re bad cause the Fed says they’re bad, so you remember it!)

Interbank interest rates have been held between 0-0.25% for nearly 2 years now.  The inevitable result of such policies is a “bubble” – as in dot-com bubble, housing bubble, oil bubble, etc.  The talk now in the financial press is the “bond bubble.”  Yields on fixed-income securities are minuscule.  Being that our Federal Government is in a truly dire debt situation and being warned to protect its AAA rating by Moody’s, it only makes sense that interest rates must rise to provide incentive to invest in these increasingly risky securities.

Interest rates also must rise if we want to encourage lending.  In risky times such as these, banks are not going to take trifling rates of 3%, 4%, or even 5%.  Why?  The amount of uncertainty introduced by Congress and the Presidency of Obama has made forecasting extremely difficult.  No banking institution that is interested in self-perpetuation is going to be caught underwater with loans at well below market rate once the Fed increases rates – which it must sooner or later.  Think about it: if you could make a loan for 4% over 5 years, but that same loan would cost you 5% in only 2 years, would you do it?  You’d be signing up to lose money, plain and simple.

Traditional methods to “fight recession” (a completely idiotic formulation that perceives government as external to other economic affairs) including fiscal and monetary stimulus are all but spent.  The Fed has hits its ultimate constraint – 0% interest rates.  Short of dropping money from the sky, there’s not much left for the Fed to try.  The administration’s 45% approval rating and Democrat Congress’ ~20% approval rating all but prevent it from passing another stimulus, a.k.a. partisan pork handout, bill.  It’s worth stating that both these traditional methods have utterly failed at averting economic catastrophe over the past 2 years.

What’s left to try is what government hates – shrinking public spending, reducing taxes, and freeing up the private sector.  This means unions have to take wage cuts, entitlement programs must raise their age requirements or cut benefits (likely both), and hundreds of (mostly useless) government agencies must be cut completely or else have their budget halved.  Sound impossible?  It is, and always has been, a matter of political will.  Besides, the alternative is the defaulting on our debts, hyperinflation, and decline.

The problems inherent in our economy are complex, intertwined, and require careful and deliberate unraveling by smart policy makers who understand how an economy actually works.  These policy makers also must understand that recovery comes from liberty, not statist scheming, tinkering, and control.  Until our government determines a credible exit strategy and a politically practical way to reduce our long term public expenses, unemployment will remain high and America will remain weak.

27 Aug
2010
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Cabbie Stabbing

From the New York Times:

In fact, Mr. Enright’s interest in the plight of young troops was growing into a passion, say those who know him. Within two months of contacting Mr. Anthony, Mr. Enright traveled to Hawaii to join a Marine unit deploying to Afghanistan, with the idea of filming a documentary about their experiences.

He was already volunteering with a nonprofit group whose mission included fostering understanding between religions and cultures, veterans and civilians.

Mr. Enright told Mr. Anthony that he wanted to make a film about his book, “Mass Casualties: A Young Medic’s True Story of Death, Deception and Dishonor in Iraq.”

In several telephone conversations, some lasting as long as 45 minutes, Mr. Anthony recalled, “There was zero hint of bigotry, prejudice.”

It goes without saying that an unprovoked stabbing of an innocent driver is a crime, and that Enright deserves a few years in prison.

It is equally important not to let the Left use the case of a deranged military filmmaker into the poster child for all those who oppose the Ground Zero Mosque.  As evidence by this Times story, Enright’s motivations seem to be tied to the carnage and terror he witnessed overseas.

25 Aug
2010
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Have you ever told a Holocaust survivor that he didn’t learn his lesson?

This lunatic did:

Yeah, it’s sick out there these days.  Pretty damn sick.

23 Aug
2010
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Frédéric Bastiat: A Guide for Our Times

In this age of Keynesian based economic interventionism, when Congress and the President (and this president’s predecessor, for that matter) refuse to let large companies and banks declare bankruptcy and refinance; when each government induced market failure is “combated” with a newer, more extensive central plans; when the government ominously declares itself to be on the side of the “working man” whilst destroying his employer; when the political class is every bit as dangerous as the Snake in the Garden of Eden…

It helps to have at your disposal a reliable guide for dependable truth and wisdom.  Enter Frederic Bastiat.  A perennial favorite of free market oriented economists from Joseph Schumpeter, to F.A. Hayek, to Murray Rothbard, to Henry Hazlitt (Bastiat was Hazlitt’s archetype in many respects) to Milton Friedman, Bastiat’s common-sense based denunciations of meddling government resonates to this day.

Monsieur Bastiat lived from 1801-1850.  He was a French economist, political philosopher, and statesman.  A dedicated classical liberal, he wrote timeless critiques of mercantilism, socialism, and statism.  The majority of his work that survives was written from the period of 1848, the year of French revolution, to the time of his death in 1850.  In a span of two years he poured out some of the wittiest, incisive, most consistent and withering critiques of improper governmental action of all times.

His most famous work is The Law, which distinguishes between two types of law: those that protect natural rights, i.e. the proper intention of law, and those that pervert the function of law and reduce it to a mechanism for “legal plunder.”  Bastiat writes, famously,

And when it has exceeded its proper functions, it has not done so merely in some inconsequential and debatable matters. The law has gone further than this; it has acted in direct opposition to its own purpose. The law has been used to destroy its own objective: It has been applied to annihilating the justice that it was supposed to maintain; to limiting and destroying rights which its real purpose was to respect. The law has placed the collective force at the disposal of the unscrupulous who wish, without risk, to exploit the person, liberty, and property of others. It has converted plunder into a right, in order to protect plunder. And it has converted lawful defense into a crime, in order to punish lawful defense. [emphasis added]

Equally as instructive as The Law is his essay on the subject of the economic science.  In That Which is Seen, and That Which is Not Seen, Bastiat explains that economics must consider the short term and the long term, the factual and the counter-factual, of all economic questions.  Writes Bastiat,

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause – it is seen. The others unfold in succession – they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference – the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, and the converse. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, – at the risk of a small present evil.

In a lesser known work entitled What is Money?, Bastiat takes on the nearly impossible task of trying to explain the most confounding of all economic subjects.  In a Socratic dialogue between a frenzied Financier, F, and an alarmed and patient interlocutor, B, Bastiat works through a multitude of common fallacies related to the topic of money: socialism, inflationism, protectionism, and war.  Explains the Financier,

F. Heaven preserve me from that! For riches, don’t you see, are not a little more or a little less money. They are bread for the hungry, clothes for the naked, fuel to warm you, oil to lengthen the day, a career open to your son, a certain portion for your daughter, a day of rest after fatigue, a cordial for the faint, a little assistance slipped into the hand of a poor man, a shelter from the storm, a diversion for a brain worn by thought, the incomparable pleasure of making those happy who are dear to us. Riches are instruction, independence, dignity, confidence, charity; they are progress and civilization. Riches are the admirable civilizing result of two admirable agents, more civilizing even than riches themselves — labor and exchange….

B. Well! now you seem to be singing the praises of riches, when, a moment ago, you were loading them with imprecations!

F. Why, don’t you see that it was only the whim of an economist? I cry out against money, just because everybody confounds it, as you did just now, with riches, and that this confusion is the cause of errors and calamities without number. I cry out against it because its function in society is not understood, and very difficult to explain. I cry out against it because it jumbles all ideas, causes the means to be taken for the end, the obstacle for the cause, the alpha for the omega; because its presence in the world, though in itself beneficial, has, nevertheless, introduced a fatal notion, a perversion of principles, a contradictory theory, which, in a multitude of forms, has impoverished mankind and deluged the earth with blood. I cry out against it, because I feel that I am incapable of contending against the error to which it has given birth, otherwise than by a long and fastidious dissertation to which no one would listen. Oh! if I could only find a patient and benevolent listener! [emphasis added]

I confess this piece holds a special place in my heart because it was finally able to establish a basic understanding of monetary principles in my own head.  I confess also that I sympathize with the desperately frustrated F and his impending despair.  When the leading intellectual monetary authorities are preaching a perverted doctrine of money and economics, attempting to explain sound theory requires first a thorough deprogramming.  This task is made doubly difficult, as both the leading economists of the Left (Krugman, Keynes) and the Right (Friedman, most of Wall St.) are lost in hopelessly specious, pseudo-sophisticated planning schemes.

Whether you’re interested in politics, economics, or money, Bastiat’s words are as edifying as they are entertaining.  Unlike many boring journalists and commentators, who make a living parroting their favorite politicians regardless of their consistency, Bastiat writes independently, with great learning and tremendous wit.

At times, the reader glimpses Mssr. Bastiat’s wry and sardonic personality.  From his work, A Petition, written as an open letter to the French Parliament ostensibly from France’s candlemakers,

We are suffering from the ruinous competition of a foreign rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival… is none other than the sun… [emphasis added]

In that particular work, dripping thick with derision, one can almost sense his disgust with contemptible politicians who use the law to stifle competition and harm consumer interests.  Indeed, as the above passage exemplifies, even if you’re completely uninterested in all things political, his writing qua writing is deserving of your attention for its literary merit and rhetorical charge.

Bastiat’s worth in these times is incalculable (a formulation he may or may not take issue with!), as the American government expands in size and power with every vote of Congress.

Additional resources for the works of Bastiat can be found here and here.

20 Aug
2010
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Bloomberg Encourages Frontier Justice for Indian Tribes

New York’s own Mayor, his Honorable Michael Bloomberg, recently called for cowboy like, shotgun aided, justice for Indian tribes who oppose a new tax on cigarettes.

Said the mayor,

“I said, you know, get yourself a cowboy hat and a shotgun. If there’s ever a great video it’s you standing in the middle of the New York State Thruway saying, you know, ‘Read my lips — The law of the land is this and we’re going to enforce the law,'” he said.

A local tribe, the Seneca Nation, is calling for and apology and resignation.

This is the same health nanny, statist mayor who outlawed cigarettes indoors and now wants to ban smoking outdoors, as well.  Who has raised taxes on cigarettes astronomically, so they now cost over $10/pack.

The same arrogant mayor who changed the then-new term limit laws so us plebeian New Yorkers could enjoy an additional 4 years of his rule.

The same knee-jerk liberal mayor in May prematurely blamed the foiled Times Square bombing on, I paraphrase, an angry Tea Partier upset at the passage of the healthcare bill.

The same billionaire mayor who endorses a cap-and-tax plan, which would drastically raise energy and production costs on families already struggling to pay their bills in the midst of a depression.

And the same out of touch mayor who wholeheartedly endorses the Ground Zero mosque, a 13 story Islamic cultural center within a stone’s throw away from the murder of 3,000 New Yorkers in the name of Islam.  A far cry from his predecessor, Mayor Giuliani, who is appalled.

I agree with the Seneca Nation.  Here we have an infamously anti-gun rights and notoriously anti-smoking Mayor suggesting the Governor enforce a new cigarette tax through threatened gun violence, all under the allusion of the white man sticking to the red man.  Literal or not, it’s a disgraceful thing for a public official to say.

Fellow New Yorkers, can’t we do better than this?

19 Aug
2010
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Jobless Claims Rise during Obama’s ‘Summer of Recovery’

Dutifully and solemnly I will continue to report the continuing erosion of American employment…

From MarketWatch:

WASHINGTON (MarketWatch) — First-time filings for state unemployment benefits rose unexpectedly last week to reclaim the highest level for this key economic benchmark since the middle of last November, the Labor Department reported Thursday.

For the week ended Aug. 14, initial claims rose 12,000 to 500,000. This is the highest level since the week ended Nov. 14, 2009.

As usual, “economists were surprised.”  The news was “unexpected.”  Um, why?  Why after 18 straight months of wrong predictions are they still surprised when they’re wrong?

On Tuesday, CNBC reported that bankruptcies have reached a 5-year high:

U.S. bankruptcy filings have reached the highest level since 2005, government data released on Tuesday show, as the economy slows and the unemployment rate hovers just below double digits. There were 422,061 bankruptcy filings between April and June, according to the Administrative Office of the U.S. Courts, up 9 percent from 388,148 in the prior three-month period, and up 11 percent from 381,073 a year earlier.

In other news, the Philly Fed reports that its manufacturing index has turned negative.  This, predictably, was “unexpected”:

NEW YORK (MarketWatch) — Treasury prices turned higher on Thursday, pushing yields down, after the Philadelphia Federal Reserve’s manufacturing index unexpectedly turned negative this month.

Let’s recap and summarize:

  • Employment, Manufacturing DOWN
  • Bankruptcies UP
  • “Economists” have a worse prediction record than the weatherman
  • The “Summer of Recovery” is doublespeak for what is truly the “Summer of Depression”
  • The moral today’s blog post is that “unexpected” really means expected.
  • What’s really expected is negative economic news.

Thank you Obama, Pelosi, and Reid for bringing us back to 1932.

18 Aug
2010
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Americans Are Evaluating Their Ideal Government

In 2008, Americans were looking to improve Washington D.C. and make the federal government more effective in solving the problems that faced the nation both domestically and abroad.  They knew that they wanted to get away from the depressing years of the Bush presidency, which brought on 9/11, enduring wars, and a sagging economy.  Whether former President Bush is responsible for any of those circumstances is up for debate, but clearly the American people were looking to go in a new direction.  Their goal was to elect a leader that would make them forget about the misery of the past 8 years and lead America into a new golden age of prosperity and good feeling.  Their plan was to elect a leader that wanted to “change” Washington D.C. and make it more effective for the citizens of the United State.  So, their plan evolved into electing Barack Obama the 44th president of the United States.  The voters executed this plan on November 4, 2008 and many celebrated in Hyde Park that night believing that the nations problems had been solved with the election of President Obama.

However, over the past 20 months, Americans have gotten the chance to evaluate President Obama and are unsure whether he has been successful in bringing a more effective government to D.C. than his predecessor.  Even though they still believe that the federal government failed under George W. Bush, they don’t think that Barack Obama has provided the answer they were looking for.  Americans didn’t expect nationalized health care, takeovers of car companies, ineffective handling of a major environmental crisis (BP oil spill in the gulf), and an unemployment rate hovering near 10%.  These results from the current White House have caused voters to question whether Barack Obama is capable of delivering the government they sought in 2008.  Groups such as the tea party, independents, and  the “professional left” have disagreed with the President’s approach to handling our nation’s problems in varying ways.  However, the most troubling for the current President is how Independents have fled from him in droves.  According to the Gallup Poll released on Monday, only 39% of independents approve of the president’s job in office, which is a 23% drop since this time last year.  Over the same time period, Republicans have only dropped 5% in their approval of Obama, which is at an all-time low of 12%.  So, in order to create an effective government in D.C., Americans are considering giving President Obama and the Democrats less power, and turning over seats in the House and the Senate to the Republican Party.

This logic is driving the last CNN Opinion Research poll, which shows that the eventual GOP nominee would come out on top against President Obama 50-45 in the 2012 election.  That is a solid advantage for a potential Republican presidential candidate, with former Massachusetts Governor Mitt Romney (21%) receiving the most support from those polled. However, as this same poll in 1994 had Bill Clinton losing by 15 points to an eventual GOP nominee in 1996, so things can change.  In order for President Obama to bring the “change” people want to the federal government, he MUST listen to the people.  This mistake of “tuning” out the American people was made by LBJ and George W. Bush, who both left office with dismal approval ratings.  Obama has to realize that independents in this county were not asking for “more” government, but rather ?effective” government.  Passing a nearly $800 billion stimulus bill that causes unemployment to rise close to 10%, rather than stay under 8% as promised is not effective.   Unless the president can find a way to lower unemployment dramatically by 2012 and generate economic growth, he will go down easily in defeat, as Jimmy Carter did to Ronald Reagan in 1980.  Unemployment is Obama’s number one problem and it seems that he has no clue on how to solve it.  Obama would be wise to echo Ronald Reagan and build broad coalitions in Congress, so that good legislation, rather than partisan legislation, can be created.  If he does this, than I believe Barack Obama will be elected in 2o12.  If he tries to go it alone with the Democrats, then Obama might have one of the most unsuccessful presidencies in American history.

16 Aug
2010
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Just how bad are things?

A few short months ago, the story in the business press was one of the “recovery.”  2Q GDP growth was estimated at 2.4%.   Inventories were rising with industrial production.  While unemployment remained stubbornly high, worker productivity was rising, but also plateauing, suggesting that new hiring would soon begin chipping away at the 9.6% rate.

Now that all seems like a distant memory.  The government has revised its paltry 2.4% annual growth rate to a pitiful 1.3%.  In truth, 2.4% was always disappointing.  Recessions are usually followed by 6%, 7%, even 8% growth.  America roared out of the recessions of the early 80s with 8.1% annualized growth in Q4 of ’81.  As economist Ron Ross writes in The American Spectator,

At 33 months it is already more than three times longer than the average length of the other ten recessions we’ve had since WWII. There are no clear signs it will be ending anytime soon. Glimmers of a recovery appear from time to time, but most indicators remain depressed and many are worsening. On balance, the outlook is more negative than positive. Not since the Great Depression have we had two consecutive years of unemployment in excess of nine percent.

Among the ominous signs that things are indeed getting worse:

1) First time jobless claims are at a five month high.
2) Foreclosure rates are increasing dramatically, rather than decreasing.
3) States are being bailed out by the Feds.
4) The housing market is a MESS, with home prices falling once again, foreclosure and delinquency rates increasing rather than decreasing, and the home builder index at a 17 month low.
5) On August 17th, almost 2 full years after the crash of September ’08, Congress is finally getting around to dealing with the 2 largest bankrupt companies in the world – Fannie Mae and Freddie Mac.
6) The Fed is monetizing government debt.  Foreign governments are no longer willing to subsidize our profligate government as they once were.  Our lenders are aware of the precarious situation of our national finances and not so eager to invest in a failing state.  Our government has turned to printing money to pay its bills; to issuing debt upon debt with the incredulous belief that the pyramid will not collapse.
7) Our political class has so disgusted our border control agency that they recently voted no confidence in their leadership.  When your constituents get feisty and recalcitrant, starting Tea Parties and whatnot, just import some new constituents!
8) Gold is back near all time highs, as people flee traditional investments (which are stagnant) and cash (as currencies deteriorate) for the age-tested commodity.

In spite of this overwhelmingly negatives news, we can count on the cadre of socialists in Washington to make things worse.  Soon likely to come:

1) Tax Hikes, as the Bush era tax cuts expire
2) Cap-and-Tax, potentially passed in the lame duck Congress
3) Full implementation of gov’t run healthcare and its correlated tax increases
4) Need to repay $13 trillion (and counting) in debt
5) Higher interest rates from the Fed.  One Federal Reserve official is already calling the unprecedented low rates a “dangerous gamble.”
6) New revenue generating taxes/regulations due from the Debt Commission.  VAT tax?  Death tax?  Carbon tax?  Food tax?

The outlook is grim.  If we had a balanced budget and not $13 trillion of debt we’d be entering choppy waters.  But instead we’re like a bankrupt family, who instead of cutting their losses, implementing an austerity program, and buying only essentials, has decided to take out more and more loans.  But countries, unlike families, have no recourse to bankruptcy laws.  States that go bankrupt erupt in chaos as life savings are wiped out, entire industries collapse, and lawlessness prevails.  The economic collapse of the United States would almost certainly result in armies crossing borders.

Who knows how this will end?  What sort of sick legislators and leaders do this to their country?

Our best shot at avoiding calamity comes this November. We must clean house and elect leaders who will have the courage to reverse course, and dramatically.  We must deal without government charity until we can again afford it.  Unsustainable businesses must liquidate and begin to rebuild.  The wealth must again be allocated to those who use it responsibly, productively.  All this crap about taxing carbon must end before we chase away all industrial manufacturing.  Taxes must be cut; spending cut even more.  We should seriously begin to re-evaluate the wisdom of fiat money and monetary tinkering, and begin looking toward re-establishing a gold standard to force discipline on the political class.

In less dire times, political parties argue about relatively inconsequential matters – nitty-gritty specifics of environmental and financial regulation, so-called “class” incidence of tax burden, legalization same-sex unions, professed belief or non-belief in creationism/evolution, views on long-ended conflicts and court battles, support/non-support of the self-described feminist mindset.  These are minority interests by almost by definition.  Liberty, and the need to remain free of crippling debt and a collapsing national currency, could not have a larger audience.  It is imperative for everybody to temporarily put aside their parochial interests and to focus on the perilous situation at hand.

This is not a time to quibble.  Vote for candidates who recognize the severity of the debt/economic problem and who will vote to liberate, rather than strangle, the American people.

6 Aug
2010
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More Job Losses

From MarketWatch:

WASHINGTON (MarketWatch) — U.S. employers continued to hire but at a sluggish pace that adds to pessimism about the economic outlook and may put pressure of the Federal Reserve to take more steps to support the economy.

Private sector payrolls rose by an estimated 71,000 in July, the Labor Department said.

Total nonfarm payrolls fell by a seasonally adjusted 131,000 in July, but all the lost jobs were temporary jobs at the U.S. Census.

The number of temporary Census workers dropped by 143,000. There are still 196,000 census workers on the payroll.

The nation’s unemployment rate held steady at 9.5%.

I continue to post the unemployment figures so as to underscore the point that Obama either has no idea what he’s doing, or, alternatively, is pursuing a legislative agenda that is designed to make us all poorer (in his eyes, this apparently means more equal.)

The Democrats are going to lose both Houses in November.  And in 2012, Obama is going to lose 49 states.