Monday, November 29, 2010

Al Gore's 'Mistake' - WSJ.com

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Gathering corn in the field, Pie Town, New Mexico (LOC)
Gathering corn in the field, Pie Town, New Mexico by The Library of Congress, on Flickr
Gore just told his European environmental friends that ethanol will not save the planet after all.

Al Gore's Ethanol Epiphany - WSJ.com

Al Gore's 'Mistake' - WSJ.com

It is the entrenched lobbying interests and the billions in taxpayer subsidies that represent the ongoing problem. But then, that has been known for decades.

The Strange Case of Ethanol Subsidies

Federal Eye - Obama announces 2-year pay freeze for federal workers

We see that Obama is following the Bob Rae play book almost to the letter. He has just announced a 2 year pay freeze for federal workers just like Rae did.

But because he is President of the United States rather than the Premier of Ontario, Obama can make the plays on a much grander scale and with the implicit ideological help of the Federal Reserve, create far more damage.

It took determined politicians a decade to recover from the Bob Rae Keynesian debacle. Any guesses on how long it will take to recover from Obama?

The Cause of High Unemployment: Still Due to Dwindling Job Creation | The Heritage Foundation

What is the problem with our economy?  It is worth reminding ourselves of graph The Heritage Foundation put out on job creation.

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Job creation is the issue with the economy
Job Creation, not job losses, is the leading factor in unemployment


The Cause of High Unemployment: Still Due to Dwindling Job Creation | The Heritage Foundation

It is not the job losses.  There is just no job growth.  Regulation which prevents whole industries from hiring (e.g., fossil fuels) must be at least part of the answer.

A graph outlining major regulation in the last 20 years would be highly illuminating, especially if it targeted specific industries.  We have a suspicion that anemic job growth is industry specific.

Marginal cost is instructive here.  Jobs are sticky.  That is, they tend to remain until the economy worsens and produce lay-offs.  Those jobs have a tendency not to come back if they can be out sourced in the face of oncoming domestic regulation.

The graph also shows why Keynesian government spending will not solve the problem; it will not create long term job growth.

Wednesday, November 17, 2010

Mr. Cutler bemoans absentee voting

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Voters being turned back at Coliseum (LOC)
Crowd being turned back at Coliseum (LOC) by The Library of Congress, on Flickr
In the Journal today, Mr. Eliot Cutler bemoans the the effects of absentee voting. We can not help but comment on the elephant in the room, pardon the pun. Curiously, no one is talking about it.

Mr. Cutler makes some provoking points:

Maine voters can request an absentee ballot for any reason whatsoever, and some communities offer in-person voting at polling places in October. About 25% of all votes were cast this year before Nov. 2. Many voters are making decisions at times when horse-race coverage dominates the news, attention to issues is limited, and key debates haven't taken place.

Eliot Cutler: Who Stole Election Day? - WSJ.com

Tuesday, November 16, 2010

Hooked on Crack: the problem with the Fed, Dodd-Frank, and the Deficit Panel

The people voted. And they voted for smaller government. The Republican Congress, pushed on by the Tea Party, is challenged with cutting spending. The argument could easily be made that the voting majority has been looking for a smaller government since Jimmy Carter, and voting majorities out of the House, Senate and Presidency when they are disappointed.

In the midst of this populist backlash, I'm making a prediction. And the prediction is that the only group that can successfully cut spending are the Progressives. And spending will not come under control until they do it. That may be heresy. It is also unavoidable.

Monday, November 15, 2010

The European narrative

"It is not sufficient that I should succeed, it is necessary that someone else should fail." ~Gore Vidal

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Gold mining, New England
Gold mining, New England by Powerhouse Museum Collection, on Flickr
There is a structural issue with our economies. And nowhere else is it more plainly presented to us than in Europe. At the outset, let us consider the narrative. For here, the intellectual version of democratic socialism has obtained everything it wanted. Its social nets are generous, it has taken up above all else the Marxian precept that the worker and therefore the government must fight the effects of the bourgeoisie, that we can live a less consumerist, more genteel life without a constant and harrowing scrabble for work and brutish advancement.

It is of course curiously hypocritical that its bureaucratic masters are all bourgeoisie themselves, administering their socialist policies from the remarkably narrow doorway of its political ideology just as assuredly as from the throne. Only a moron can not make the sense of that.

Wednesday, November 10, 2010

The pronunciation of the intellects

The other day, I was down by the ocean and entered a large hotel foyer just as a small cadre of corpsmen entered. They were boisterous and all wearing Adidas and track suits.

The corpsmen were a rowdy bunch, having just returned from Iraq on furlough, before heading over to Pakistan. An old lady approached them and thanked them profusely for their service, which for me was the coup de gr├óce of their arrival. She wore a simple dress with a d├ęcolletage which she carried well despite her age, and the troops were solicitous and respectful of her.

Another guest could be heard saying, "You boys be safe, and y'all come back now, ya hear?" He left with no further adieu, got in his Porsche, and roared off.

The uppity Left is beyond comprehension. They actually believe the Right are Neanderthals. It is enough to want to take a Bayer. Later, while I was reading Dr. Seuss to my son, I wondered what rules they use to inconsistently pacify foreign language.

Enough said.

Monday, November 8, 2010

The continuing war on Keynes: Practicality

In private enterprise, continued losses spell disaster. But deficits are a symptom of inviability, not a cause, albeit one that can kill you. The challenge of successful turnarounds is to quickly diagnose and treat the disease. That few business people, especially experts, know how to successfully do so, is itself a statement of inadequacy of most management theory. Most turnaround efforts are not aimed at the disease, but an orderly treatment of the symptom and sale of the body parts during the death-throws.

Carbon Trading ends a quiet death

Carbon Trade Ends a Quiet Death at Chicago Climate Exchange: "The Chicago Climate Exchange (CCX) announced on October 21, 2010 that it will cease carbon trading this year. However, Steve Milloy reporting on Pajamasmedia.com (November 6, 2010) finds this huge story strangely unreported by the mainstream media."

A longer view than false debt injection

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Interior of school on Mileston Plantation
Interior of school on Mileston Plantation; School begins ... by New York Public Library, on Flickr
Back in the summer, Mohamed El-Erian, chief executive of Pimco, wrote an article warning the two government policy camps they were missing part of the issue.

In one corner stands the "growth now" camp, arguing that expansion is a prerequisite to service their debt sustainably. Without it tax receipts implode, investment is turned away, and meeting future debt payments is harder. This camp abhors Europe's shift towards austerity, questions Tuesday's tough UK budget, and urges countries like Germany to adopt expansionary policies. Some advocate additional fiscal stimulus even for high deficit countries, like the US.

Saturday, November 6, 2010

Not yours to give

One day in the House of Representatives a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support. The Speaker was just about to put the question when Crockett arose:

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Alamo where Crockett died
Alamo in San Antonio, Texas by Oregon State University Archives, on Flickr

Bank Failures in Slow Motion

Bank Failures in Slow Motion - Doug French - Mises Daily:

The Moody's Commercial Property Price Index (CPPI) has fallen 43.2 percent since its peak in October 2007. Raw-land and residential-lot values have fallen even further. Almost 3,000 of the 7,830 banks in the United States are loaded with real-estate loans where the collateral value has fallen over 40 percent, and yet less than 300 banks have failed?

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Pollster comparison
Huts and unemployed, West Houston and Mercer Street, Manhattan by New York Public Library, on Flickr

Bernanke's $600 billion op-ed in plain English

The original op-ed written by Fed Chairman Bernanke on the Fed's decision to print $600 billion can be read in the Washington Post titled, "What the Fed did and why."  For those of you attempting to make sense of Bernanke's report and its effect on the economy, read the quotations (abbreviated) and the accompanying translations below.

Friday, November 5, 2010

Rasmussen Polls Were Biased and Inaccurate; Quinnipiac, SurveyUSA Performed Strongly - NYTimes.com

Nate Silver tears into Rasmussen with retributive zeal in his  Five thirty-eight column saying, Rasmussen Polls Were Biased and Inaccurate; Quinnipiac, SurveyUSA Performed Strongly.

We humbly suggest Silver doth protest too much.  For the fundamental issue of polling data is not so much the statistical vagaries introduced into the polling method as they are the tendency to over stretch polling model purpose, highlighted by the increasing challenge of predicting turn-out.

Chinese jobs

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Pollster comparison
Chinese R.R. by The Library of Congress, on Flickr
Politicians lament all the jobs 'going to China.' But they do not talk about the hundreds of millions of Chinese that are becoming middle class citizens of the world. Never mind that they were lamenting the Japanese worker 40 years ago. Remember when they were going to take over the west?

Exactly what is it that people do not like about the fall of the Bamboo curtain? The world is climbing out of poverty, which is cause for celebration. The fundamental trade issue looks suspiciously like a classic case of externalizing our own problems.

Let us review some of the changes in American society in the last 40 years.

Creating class in government

“The necessary result, then, of the unequal fiscal action of the government is, to divide the community into two great classes; one consisting of those who, in reality, pay the taxes, and, of course, bear exclusively the burden of supporting the government; and the other, of those who are the recipients of their proceeds, through disbursements, and who are, in fact, supported by the government; or, in fewer words, to divide it into taxpayers and tax-consumers.

Thursday, November 4, 2010

The ideology is one thing, but do not forget the tactics

Steve Mangala of City Journal (Manhattan Institute), author of Shakedown, talks to Alan Barton.



Click the graphic for full screen. Commentary after the fold.

A key strategic free market move

It is partly true that misery will motivate voters. It is also true that even in today's environment, about 700,000 people voted in the Nevada election, or something less than 30% of the population. So Harry Reid's ground game, buttressed by union organizers bussed in from across the country, have a great and significant effect.

For many psychological, political and structural reasons, people do not see voting as an answer, nor do they tend to feel empowered. That the tea parties have made a dent in those perceptions at all is a testament to the times.

Wednesday, November 3, 2010

Donald Trump: Please save us from his run for presidency

In this post on "Are we really a center right nation: why there is really no squishy middle," I explain why there is a bottomless untapped audience for free markets.

Fox just proved my point in its ludicrous interview with Donald Trump.

Outsourcing Myths - Investors.com

Outsourcing Myths - Investors.com:
"But that's false. A 2005 study of the high-tech industry by Global Insight Inc., for instance, found that outsourcing was a 'net positive for American workers and the U.S. economy,' responsible for creating hundreds of thousands of U.S. jobs and boosting pay here.

And as Dan Griswold, a trade expert at the Cato Institute, recently noted, 90% of what U.S. companies make overseas is sold abroad — not imported to the U.S. In 2008 alone, U.S. firms sold $6 trillion in goods and services abroad — three times what we exported.

Nor is it all a one way street. From 2005 to 2009, foreigners poured an average of $87 billion year into U.S. manufacturing. We invested just $45 billion a year overseas. So who's outsourcing?"

Progressive analysis of the elections

Given election results on November 2nd, 2010, what can Progressives learn? What are their next steps? Following is a short list:

It is the Economy, Stupid

It really was just all about the economy and jobs.  Americans were angry and confused about the lack of jobs, and their frustration found expression in the polls. We humans are genetically incapable of thinking clearly when we are scared and angry, susceptible to bigotry and prejudice in periods of uncertainty and change.

Strategy: Appear more recalcitrant, empathetic and focused on jobs. Appear more open and transparent in the way we are transforming the country to address these and other issues. Include the economy and jobs in speeches more often, and work with Republicans on further programs without compromising fundamental principles.

The Great Californian experiment

Californians firmly rejected the Tea Party and its philosophies of free markets and austerity.  In electing Jerry Brown, they chose the one Governor who did the most to take a fast growing state in surplus to the structural bankruptcy they are in today.

There is a certain irony in asking the man most responsible for getting them into their current mess to fix it.  But certainly it is rarely the case that strategy works.

And so we have an interesting real life lab experiment setting up in California.  How does a progressive legislature that repudiates all free market principles save a state from bankruptcy?  California will tell us.

The federal government is not a good example.  Because the Fed can print money, the federal government can remain in denial, buttressed by a Keynesian religion unconfused by reality.

But in California we have a whole nation sized state that must now squarely face reality, without the benefit of market philosophy to help them.  What will they do?

We shall find out.  Painfully.

The Morning after

In the train wreck that was the elections, especially at the state level, the principal question is how the President and the Democrats will react.  What is the story they are telling themselves?

We have a President who told ABC's Charlie Gibson that he would favor higher capital-gains tax rates even if they brought in less revenue to the government.  Much can and should be presumed from such a gob smacking statement.

We have a President that continues to believe Americans are just unable to understand the nuances of the health care bill and his other initiatives.  He has a 'communication problem.'  This is a President and a party in denial.

This is a President that feels most Americans cling to guns and butter and the Bible out of fear and frustration and generally a mystification at the workings of the world.  This is a Party that holds a hammer that is big government, and every issue looks like a nail.

Monday, November 1, 2010

The Walking Dead series opener

Well, it was violent.  So that will get some points.

The debut of the new hit series the Walking Dead did not answer how the series would go forward, unless the interminable search for other humans is going to somehow hold our attention.  That is not going to work, by the way.

And beginning the series with killing a child filmed in close  and gory was obviously an edgy start, even if she was obviously a part of the great undead horde.