Friday, February 26, 2010

- Like Feeding Atheists To The Lions

Team Obama has asked all the liberal faithful to take to the airwaves and "overwhelm" conservative talk radio shows with the wisdom of their positions on healthcare. This strikes me as like asking the Christians to overwhelm the lions.

Rush Limbaugh is really the only talk radio I listen to anymore, (although I occasionally listen to Mark Levin when schedules permit) and he has liberal callers on all the time. But they are usually so detached from reality that they are mostly unpersuasive. It's not just that the are amateurs at arguing their points. Even the most persuasive advocates of central planning in healthcare would be unable to make a difference arguing with someone like Rush.

Like them or not, the men of conservative talk radio debate this stuff for a living... being persuasive is what they are all about. They are professionals who will make minced meat of any liberal caller. And the 'gotcha' style of arguing that is so persuasive on the left is usually ignored by the right because we care about results not intentions.

Liberals... you can certainly call if you want to. I wouldn't expect you to take advice from me anyway. But if I were you I honestly would skip it. It's only going to end up hurting your highly fragile egos. And while I think that would be fun to listen to, it doesn't really advance the debate.

- Is It Obama He's Talking About?

I think it's no small irony that these are precisely the same sorts of complaints that my buddy Craig would have about Obama if he were in the Senate. Just replace the word Greece with the word California (or the words "General Motors" for that matter)

The only possible exception is the part where he calls him competent and capable part.

Thursday, February 25, 2010

- The Cargo Cult Presidency

It's such a great description of Obamaworld that I had to repeat it. Take this quote for example:

"We have arrived at a juncture in our politics where reasonable efforts to update our regulations, or make basic investments in our future, are too often greeted with cries of 'government takeover' or even 'socialism'," Obama said.

"Getting this balance right has less to do with big government or small government than it does smart government. It's not about being anti-business or pro-government; it's about being pro-growth and pro-jobs," he said.

He has no idea. He's the equivalent of a New Guinea tribesman, sitting beside a make shift runway with coconuts on his ears, reciting the chant "angels 1 5 ...come in angels 1 5." into a pretend radio. He thinks he's observing all the forms and the results should follow. He literally has no idea why none of it is working and the polls continue to fall away.

So he's going to to do the same thing that those tribesmen did... he's going to be even more diligent with his chant. Soon... the gods will reward him and return with all the 'stuff'. Jobs will re-appear, prosperity will return, and his poll numbers will begin to rise again. The speech is all he knows how to do and he's convinced that, like the tribesmen, if he does it just right everything will be better.

He believes he's so smart that even though central planning has failed every time it's ever been tried, this time it will be different. It hasn't occurred to him that EVERYONE who ever tried central planning felt that way. He hasn't realized that we can see right though his silly speeches. He thinks we don't notice that every solution he has for 'getting the balance right' always seems to involve letting the government control massive portions of our formerly free markets.

In the end the soviet system was a lot like that too. Even when that drunk guy was climbing up on the tank outside the Kremlin, there were true believers inside who were still convinced that the only problem with the soviet system was that the capitalists systems were 'unfairly' competing with them.

If 1/6th of the economy is taken over by 'smarter government' it's still taken over. But they don't realize that in Obamaworld. All they know there is that they should keep their eyes on the heavens, and continue the chant. "Smarter Government... come in smarter government.....Hope and Change... do you read me hope and change..."

Postscript - I heard the title of this piece for the first time when Rush read an American thinker piece on his show. I didn't think of the phrase, and I'm horribly angry at the guy who did, in the same way that I get angry every time I read something by Mark Steyn. I'd known about the cargo cults for years, but I never made the mental link. I went back and read the piece but I couldn't find a good way to work it in so I didn't link it. Instead I just stole the catch phrase... apologies to the guy who actually came up with it.

Wednesday, February 24, 2010

- Serfdom For Dummies

I went to the DC Tea party with 4 other guys who were typical of the movement. One of them I've known for nearly 20 years and is one of the smartest, most clear thinking guys I know. The others are all highly skilled professionals who are very successful in their chosen careers. Our average IQ was in the area of 160; given that my buddy was there... maybe even more. I will put our intelligence and knowledge of any subject up against any 5 members of the Whitehouse Staff including Ms. Jarrett and Obama. I don't think there is any need for the Whitehouse staff to find a way to 'dumb down' their message for us.

There really is no limit to the hubris of these people.

- Free Labor Zones

The population of El Paso Texas is about 750,000, but the population of Ciudad Juarez Mexico which is basically the south side of El Paso, is 1,500,000 …and 500,000 more people arrive there every year. It’s presently Mexico’s third largest city, and is one of the fastest growing cities in the world. Why is that do you think. Is it the wonderful weather, or pastoral beauty of the Chihuahua desert? Nope. In a word, it’s work. Companies that require large amounts of low skilled labor choose El Paso and Juarez because it allows them to skirt around the US Labor laws that are so disruptive to business.

So why isn’t it possible for the US to set up ‘free labor zones‘ inside the US that will allow companies to be exempted from US labor law? Allow them to set pay at any level they want and to set any terms for employment that they wish, with the single requirement that everyone they hire must be a documented US citizen. They will be exempted from all employee and payroll taxes, and any regulations other than those which refer to impact to their neighbors. They won’t for instance, be able to pump heavy metals into the water supply or arsenic into the air, but if it doesn’t effect their neighbors then they’re off the hook. No unions, no quotas, and no minimum wages. Everyone works there at their own free will with no compulsion from government of any kind. You don’t like the pay or the terms of the job? Then leave.

Make this ‘free labor zone’ large enough and you’ll probably be able to get every employer in Michigan to move into it. Unemployment will fall to zero, and economic growth will soar. So why won’t we do it? Why do we allow our industrial base to move to Mexico instead of giving them a place inside the country with the same rules? We won’t be losing anything that we wouldn’t already lose to other countries anyway… so why not? (The answer is probably obvious but...) It seems like it would all be upside to me.

- Blaming The Boomers

The first, and arguably most controversial, piece of social commentary I ever wrote was an essay on how the Baby Boomers were the most spoiled generation. I made the claim, supported by substantial evidence, that it was their sense of entitlement and their self absorption that created most of the social hardship of the last 40 years. And while they have always been in a position to dance, someone else has always ended up paying their piper for them.

America, with the singular exception of that generation, has always placed a much higher premium on liberty than safety. And I still think you can make the claim that it's the Boomer's flirtation with socialism that has caused many of our problems. We've always had socialists of course, but they were a fringe group... not something to be taken seriously. But for the Boomers it's an ideology to be placed right up there with the founding principles of America.

The generation right before and right after the boomers are both substantially more Conservative. Even the generation emerging from the Socialist incubator of America's university system, (built by the boomers btw) is quick to snap out of that stupor as soon as they see some of the costs. So far what I've seen of this documentary looks like it steals a lot of bases, but I think there is a case to be made about how the embrace of socialism was a generational phenomenon.

Part 2:

Part 3:

Monday, February 22, 2010

- Don’t Blame Goldman - Part: 78,543,121

Back when I used to ride my dinosaur to work at 60 Wall Street, I was a quant on the commodity derivatives desk. And one of my very first tasks in that role was building pricing models for commodity swaps. One in particular sticks in my memory. The government of Argentina wanted to swap a series of crude oil deliveries at a set of forward dates, for a big bunch of cash today. The model for the deal was pretty straightforward. But what struck me about the whole thing was that for reasons too lofty to explain to a little drone like me, Argentina decided to do the whole thing as an SPV so it could be held totally off balance sheet.

Given the checkered history of some of the past governments in Argentina, it wouldn’t’ shock me to learn that they wanted to do it that way so that they could steal the money without anyone finding out. The truth is I really have no idea. But this was my first experience with the SPV which later became famous as a tool in the Enron and Credit market scandals.

The use of the SPV (short for Special Purpose Vehicle) is unbelievably common. Argentina used them and so did Greece. The State of New Jersey uses them to get around its constitutional debt limits. It’s used by every government in the western world as well as banks, insurance companies, pensions, investment managers, and all manner of commercial entities. It’s a much more common phenomenon than most people apparently realize. But it’s not the tool itself that’s bad, but the way it’s used.

The fuss in the media over the way the Greek balance sheet was manipulated to get into the Euro has nothing to do with Goldman any more than I can be held personally responsible for those Argentine Commodity swaps. If someone in Greece decided to hide the existence of those liabilities by placing them off balance sheet, it’s not the fault of the guy who structured their finances. That’s like blaming the guy who sold them the car because they hid a body in the trunk. No one at Goldman compelled the Greek government to defraud their currency partners. The Greek government had a responsibility to be forthcoming about their finances to the examiners when they entered the Euro. It’s no fault of Goldman if they didn’t.

The press, being a day late and a dollar short as always, are asking that critical question “Did any of the other Euro members use this horrible financial practice.” It’s been 20 years since I’ve worked on a swaps desk and I can still tell you with absolute certainty that Yes… yes they did. All of them did. The Spanish, the Irish, the Portuguese, the Italians, the British, and every other major western country has some of their debt carried off balance sheet. No one but the press could ask such an idiotic question with a straight face.

The real question should be, have they adequately disclosed the state of their finances in total. In most cases I’m sure the answer is yes. But even if they didn’t, it’s no fault of Goldman Sachs.


Apparently Goldman is saying the same thing I am.... the ALL did it... every last one of them. They all used off balance sheet tools and SPV's. Whether they fully disclosed their situation however remains a mystery.

Sunday, February 21, 2010

- This Has My Name All Over It

The Carlton Draft people are now responsible for 2 of my all time favorite ads, and I've never even tried the stuff. I'm gonna try to go get some today. They've earned my business.

- The Best 17 Minutes You'll Have Today

Send this to EVERYONE:

This is Bob McEwan's speech from CPAC. It's a simple explanation of why everything liberals tell you is just as wrong as it was when they said it during the Carter administration.

Saturday, February 20, 2010

- The Temptation That Democrat's Can't Resist

The only way Paul Krugman can think of to lower health insurance premiums is to use the authority of government to force healthy people to buy insurance that they don’t think they need. Krugman was a brilliant Economist once, but there must be something in the water at the New York Times offices. Now he has all the depth and creativity (and the same confidence in liberty and the free market) as Leon Trotsky. It’s a tragic thing to see. But I suppose that’s what happens to your thought processes when you live your whole life insulated from any consequences for being wrong.

Since he has apparently slipped off the edge of reason, let me toss out another, more reliable idea on how to lower costs. Deregulate. These days, in the shadow of credit crisis, your average New York Times reader is under the impression that deregulation only leads to excess and catastrophe. Politicians and talking heads have been trashing it so aggressively that few people realize that it didn’t cause the problems they say it did. But one thing it has always reliably done is lower costs.

Government is already deeply involved in the medical and insurance industry. One excellent example is how liberal New Jersey proudly requires that mammograms be covered by all group medical insurance policies. But that requirement increases the minimum cost of premiums. If the insurance companies wanted to create a low cost policy that included catastrophic care but not preventive care like mammograms, the state insurance director would prohibit it. Let me say that more clearly, the government is mandating that costs be HIGHER.

This is the point where your average liberal starts pulling out all the unproven assertions. “Well preventive care keeps people healthier, and lowers overall costs”. (There is no evidence of that anywhere, and my doctor laughs every time I mention it... but that doesn't deter liberals from believing it.) Or “If the industry was deregulated then insurance companies could charge what they want and gouge people for coverage.” (If you understand how the free market works you know that 'insurance companies charging what they want' doens't mean higher costs, it means lower costs.)

If there really were a free market for insurance products, Aetna or Blue cross may be charging more for their policies out of cruelty or racism or whatever liberals think drive them to it, but if they did… some other small company would figure this out. They’d use those higher prices as an opportunity to steal customers away from the big insurance companies… then the big companies would be forced to lower costs to keep market share. The net effect would be lower prices to the consumer. This result has been the case EVERY SINGLE TIME DEREGULATION HAS BEEN TRIED. History is absolute on this point.

“But what about all those people who wouldn’t get mammograms?” say the dim witted liberals. The answer is, they still would. What would inevitably happen is that the number of options for consumers would expand dramatically. Customers will be able to pick and choose the kind of coverage they want; customizing their costs and coverage in a way that best suits them. If they want their mammograms to be covered they choose a plan that includes it but costs slightly more. If they don’t want it covered, they are rewarded with lower premiums. A deregulated market leaves the choices with the customer, instead of with some bureaucrat in Washington or Trenton.

Central to the liberal political ideology is the belief that most people are simply too stupid to run their own lives. They believe that we’d be better off with some expert making our decisions for us instead of making them for ourselves. History shows the foolishness of this idea, but they don’t care. The fact is, the experts who engage in central planning don’t really know what’s best for others. They can’t… that’s not how knowledge works. But you can explain this till you’re blue in the face and liberals still won’t get it. Maybe it’s because their dim, or in the case of someone like Krugman, maybe they just don’t want to understand it. The prize of commanding the lives of so many others is simply too tempting for them so they'll believe anything they have to if it ends with them in control of the lives of others.

The American public understands this of course, which is why they’ve reacted with such revulsion at the Democrats’ idea of centralizing all healthcare decision making. But the Whitehouse and Democrats in congress apparently still can’t resist the temptation. That’s why Obamacare is back from the dead in spite of all it’s cost them this year politically. Krugman lets it cost him his credibility, and for the politicians it may cost them their jobs. In that way I guess this healthcare bill really will help America after all.

Friday, February 19, 2010

- Village Idiot At The New York Times

I deal with a lot of very smart people in my day to day life. Practically everyone I know is a genius, and some of them make your average genius look dim. I think it’s a fair claim when I say that I know what ‘the elite’ of America are about, so when I say that David Brooks is totally full of $%it…. again…. I know from where I speak.

In his poorly argued NY Times column, he’s making the threadbare claim that as the elite of American society have increased their degree of merit, the common people of America have become detached from them and trust them less. The latter part is obviously true, but the connections he draws to his imagined causes are typically useless David Brooks pabulum.

The cause of America’s distrust of the elite is obvious to everyone not sealed in the NY Times editorial cocoon. Never before in history has the elite been so consistent in their assumption that it’s them who should be making all the decisions in our life. In short, this is a generational problem. The children of the 60’s and 70’s, the boomers who currently make up the elite, all feel that they are the only ones with the knowledge and wisdom to make the decisions about the lives of 300 million Americans.

Those 300 million Americans did not cede them that authority however so they are balking as the elite try to fit them with their yoke. Brooks’ column is a laughable parody of that; a boomer trying to fathom excuses for why the unwashed won’t simply obey their betters like they should. It's a common Brooks theme. And since so much of the boomer philosophy is based on nothing but self congratulation, they remain too insecure and too egotistical to admit the truth to themselves.

The truth of course, is that they aren’t nearly as smart as they think they are, and therefore have no business trying to tell the rest of America how to live their lives. They don’t really possess the wisdom that they’ve awarded themselves. And everyone knows it but them. The village idiot may think he’s the smartest person in town, but his thinking it doesn’t make it so. And apparently the same is true of David Brooks.

David Brooks:
The Power Elite

- Undead Legislation

Believe it or not, there is still a push by some hard left Senators to make a government run health insurance company a part of the federal government. They think this is an important change because they believe that the government can institute anti-competitive pricing for health insurance. They have no constraints on their balance sheet like a private company, and have no need to charge more for a service they offer than their costs.

If a private company were to do something like that, they would end up with an anti-monopoly investigation from the justice department. But since it's government that's going to do it, they think it's OK. They have said all along that this will help competition in the industry, but in reality it's designed to eliminate it, like all monopolistic actions.

And if you thought the vox populi had been heard on this issue and that Obamacare was dead... think again. If there is one thing that people like Frank Lautenberg know about it's keeping things alive and in Congress long after they are of any real use to anyone. And using 'reconciliation' to push through a 'public option' is still very much on the agenda for every Senator that the unions own.

They still don't care that the jig is long up on this issue... their union masters want it, and they intend to give it them by any means.

Anyone who voted for these useless corrupt hacks should be deeply ashamed of themselves.

- VAT Tax Will Be A Game Changer

A broad based and transparent tax on consumption would be an excellent idea for our federal government, but that’s not a VAT. A VAT is essentially a tax on production not consumption, and that makes it a little tough to take. But if you could only have one word to describe a VAT it would have to be obscure. Once a VAT is implemented it becomes almost impossible to determine what portion of a product’s rapidly increasing price is due to taxation.

They political classes in Europe love the VAT because it allows them to tax the living daylights out of the private sector without any political consequences. It’s a broad based tax so the money comes rolling in for them, but since no one can determine the amount of taxes they are paying or when they are paying them, they don’t know who to blame. So instead the political discussion becomes about which political classes have the clout to ram through some new special treatment or government delivered perk.

The VAT is a boon for leftists, because it hides the mechanism of taxation, while keeping the money flowing. It’s a catastrophe for anyone who thinks that the government does too much already because it will fundamentally change the relationship of between the citizen and the government. After a VAT is implemented, reducing government’s size by any peaceful means will effectively become impossible.

You’re going to hear a lot of information about VAT’s in the next few months. You’ll hear that it taxes the poor the same as the rich, and that it will raise consumer prices and lower our standard of living. All of that is true, even if it is somewhat away fro the central issue of a VAT. But we should still use those points and any others we can find to oppose the implementation of a VAT. If the far left gets this, it will be more of a long term game changer than any other issue; even nationalized healthcare. If you love liberty, then you need to do all you can to prevent the VAT.

The VAT commission.

Tuesday, February 16, 2010

- Tea Parties Scare The Coastal Elites

The New York Times is apparently terrified that the Tea Party movement isn’t turning out to be the cartoon depiction of gap-toothed Klan wannabe’s that they thought it was. They are taking seriously….sort of. I mean, they still try to spin it as a way to decimate the political right, and they include a silly quote from some nobody who says that it’s all based on racism. But at least they are beginning to recognize that it’s not all Republican Astroturf.

Largely they blame Glenn Beck for the whole thing. (I'm sure Glenn Beck is thrilled about that.) For a window into how the elite’s view Beck you should watch Bill O’Reilly interview Jon Stewart. In it, Stewart claimed that Beck was a ‘shill for the new movement’, as if all those tea party people wouldn’t know what to complain about if it weren’t for Beck and his TV show.

This isn’t him ignoring the truth, it’s him missing it for lack of interest. When you operate from the belief that people are too stupid to run their own affairs, like Stewart and the coastal elites do, it never occurs to you that there might be a group of people out there who have all privately reached the same conclusions and were only waiting for someone like Beck to give them a megaphone. That’s what’s actually happened. The tea party is a group that has been systematically ignored, and now they’re finally asserting their voice.

This is what a real grass roots movement looks like. It has no money, and no centralized authority, and no clearly defined bullet points for media consumption. But in this case at least, it does have principles, and those are pretty easy to find.

My buddy Jose used to laugh like hell every time I reached into my bag during a debate and pull out a mini copy of the US constitution. It seemed unreal to him that I would find that document so important that I’d go to the trouble of carrying one around. But to me, it was the roots of everything. It was literally ‘the law of the land’, and as a staunch second amendment advocate I found it the best way to refute the standard liberals lies.

Those are the principles of the 'new movement'. the government that has served the interests of the liberal elites does all kind fo things that it has no authority to do. We want it to stop, and we're prepared to make it do so. And if the coastal elites want to understand what’s happening in the Petri dish where they’ve put the tea parties, they might want to think about looking at that document as well. That’s what it’s really about. Those are the ideas that we’ve all embraced on our own. We didn’t need Glenn Beck to read them to us, but we appreciate that he feels the same way we do.

We are not, and have never been, the brainless drones you believe us to be. But you’ve been married to that particular fiction for so long that it’s unlikely we’ll convince you otherwise. We know that you need to think of us as stupid so you can imagine yourselves as smart, and we don’t really mind that you feel that way. The truth is, we just want you and your bloated plutocracy to leave us alone. Do that… and we’ll all get along fine. Don't and... well ... I'm convinced that you will ...eventually.

Friday, February 12, 2010

- And Now We Know Why It Froze Over....

Who is this Chris Christie?! If I had known he was going to do and say things like this I'd have supported him more aggressively in the election. And if he survives his term as governor (I sincerely hope his security is first rate) then at the rate he's going he'll have my support when he wants to go to Washington too.

Scott Brown is a wishy washy left leaning Republican who is Genghis Khan compared to the guy whose seat he took, but more and more Chris Christie is looking like the real deal. He may look like an extra from the sopranos, but I'm actually getting to like him.

N.J. Gov. Christie Freezes Spending

With State's Budget In 'Shambles,' New Governor Slices Into School Surpluses, NJ Transit Subsidies; Dems Furious

Wednesday, February 10, 2010

- Hell Freezes Over... Again.

Women and Children Hardest Hit

- Even More Union Stupidity

You have to ask yourself what the Greek civil servants are thinking; what exactly do they hope to get out of a general strike right now. They’re protesting the government’s proposed budget cuts, but it’s not like the government is going to be able to do anything about it. There is no money. They can’t borrow it, they can’t print it, they literally have no options… the spending must be cut.

But that slice of reality is not going to stop the unions. They will simply refuse to accept that fact; in the hope that they’re refusal will somehow change it. Of course, this kind of blatant denial isn’t unique to our Mediterranean cousins. The unions in California are doing their best to drive that state off the cliff financially as well, and don’t even get me started about the kind of idiocy we’ve seen from the civil servant unions in NJ. It’s as if you turn in your brain when you pick up your union card. (Or maybe the union gets half and the other half is just tossed away when you accept a government job… that would explain a lot.)

I particularly liked the quote that the mindless AP reporter managed to get:

"It wasn't the workers who took all the money, it was the plutocracy. It's them who should give it back," said Alexandros Potamitis, a 57-year-old retired merchant seaman.

Actually Mr. Potamitis the workers are EXACTLY who it was. If the liberal Media will allow me to co-opt a phrase of theirs, the civil servants unions are like a giant blood sucking squid on the face of the world's financial systems. They reduce the output as much as possible, increase the costs as much as possible, and make things as uncompetitive as they can in an effort to get more while producing less. They are precisely who took all the money, and since that's so, they are the ones who are going to have to give a good portion of it back.

So how will this end? Who knows. Like spoiled children, unions have a long history of resorting to violence when they don’t get their way, and after all the pampering I don’t imagine we’ll see any better from the civil servants. They’ve been promised a long life of leisure and comfort, but those promises can’t possible be met, either in Greece or in America. So what will they do? I dunno… I can never understand what people this detached from reality are going to do. But I’ll tell you this much, I may not understand the clueless union membership, but I understand governments. And nothing solves a labor riot as effectively as live ammunition. And if the unions force the issue I don't think they'll have problem resorting to it.

Tuesday, February 9, 2010

- My Anteater Question Answered...

Personally I thinks it's terrible the way those leftists exploit that poor helpless anteater. Is it unionized? Does it have free medical care? Isn't that leash a form of slavery?

Monday, February 8, 2010

- John Murtha RIP

I'm betting that this isn't the way he would have wanted to be remembered, but it seems to me that he should have considered that at the time.

- TOTUS Humor

No story... I just thought this was really funny.

- The Future Under The Green Nazi's

Shouldn't they all be wearing those little armbands with the Obama symbol on them?

(There are lots of things I don't understand about the environmentalism cult... but one question that's really puzzling me is...why is she using an ant-eater to sniff under that truck?)

- You'd Think He's Been Reading My Stuff...

In his NRO piece 'Unsustainable', Mark Steyn swings his verbal rapier through the 'new normal' of the modern economy, and ends up sounding much like me:

But, if they’re “unsustainable,” what happens when they can no longer be sustained? A failure of bond auctions? A downgraded government debt rating? Reduced GDP growth? Total societal collapse? Mad Max on the New Jersey Turnpike?

I don't know Mark at all but his NRO compatriot John Derbyshire, the guy who literally wrote the book on pessimism, has repeatedly called my outlook 'apocalyptic' in our correspondence. (For the record I disagree with that specific label.) So what does it say when Mark Steyn ends up noticing all the same things I've been talking about for the last year?

As always, Steyn is well worth reading, even when he isn't sounding like me:

Friday, February 5, 2010

- NJ Commuter Relocation Guide

Presidential rhetoric notwithstanding, most of the people on Wall Street don’t make all that much more than everyone else. And that means that they can’t afford to both live in Manhattan and have a family. My buddy Rob does pretty well, but he’s in that range (like most of us) and is considering moving his happy family to this side of the river. So in the interest of helping him out, I thought I’d write up a little guide for those Wall Streeter’s looking to crossover to the land of the ugly license plate.

The central issue of moving to any one of New Jersey’s commuting towns is, as you would imagine, the length of the commute. When I lived in Manhattan and was working at Moore Capital I lived right around the corner, so my commute was further vertically than horizontally. When my wife talked me into leaving town, I didn’t want to cope with a long lonely train ride. And spoiled as I was, I had this fantasy that I could move out of town and have a roughly 1 hour door to door commute. But in practice that doesn’t really work out very well.

A one hour commute to Penn Station New York will leave you in some of New Jersey’s most undesirable towns. No upper middle class Wall Street staffer is going to raise a family in Newark, or East Orange or Union City. There are nice towns with good schools within 1 hour of midtown, but for reasons I’ll discuss below you will probably want to stay away from them. You can get much more for your money if you are willing to travel about another half hour like the rest of us.

In terms of a door to door trip to midtown, you should really be thinking about a 1.5 hour commute. Further if you can stand it. But at a minimum, you’re really looking at roughly a 1 hour train or bus ride, and whatever driving and scurrying you need to do to get to and from mass transit. That opens up lots of possibilities, but eliminates some others. Basically you’re stuck to the north – east part of the state, and there are some other filters you can apply to winnow them down further. In the interest of brevity, I’ve broken them down by county:

Bergen County:

The problem with commuting to Bergen county is that the trains only go to Hoboken. From there you have to switch to the comparatively seedy looking PATH trains. Personally I find the trip depressing, but even more than that, it adds 30 minutes onto the length of your trip, so you can’t get very far out of town with your remaining time. This leaves you more subject to the snows and traffic on the bus or in your car.

Worst Part:
The lack of trains to NY and abysmal public schools. Plan on sending the kids to private school, in which case you might as well move back to Manhattan.

Best Part:
It’s a pretty, if somewhat crowded area that’s more like Rockland County NY.

High. Excluding the actual state house in Trenton, this is the most pro-tax (liberal) area in the state. They are simply thrilled to have taxes go up and naturally, they always do.

I like it…. If you go far enough out of town it can be quite pretty. Like I said, it’s a lot like Rockland county New York.

Poor. It’s crowded, and that means that if you want to live in a nice house with a nice yard and a pool you’ll have to really pay up. In terms of what you get for the money almost anywhere else that meets your minimums will be better.

Passaic County:

The trains still only go to Hoboken, leaving you on the depressing PATH trains or stuck in traffic.

Worst Part:
Paterson. It’s been a depressed city for years and shows no signs of improving. The proximity of such a low income area to relatively high income areas also causes a higher crime rate relative to other towns. The public schools are still awful in all the areas where you can realistically commute.

Best Part:
If you don’t mind commuting further and driving a lot, there are really nice towns in the north where you won’t even know you’re in New Jersey. Rent a movie called ‘the station agent’ to get a look at some.

Taxes: High. If you live in a county that contains an economic sink hole like Paterson, everyone else’s taxes have to rise to compensate for all the theft, graft, extortion and union malfeasance that go along with NJ cities.

Aesthetics: this is Tony Soprano country. If you liked the way the scenery looked on the Soprano’s TV show, then you’ll like the look of the nicer parts of Passaic county. Personally most of it looks to me like a low rent version of Bergen County. Like the difference between the upper east side, and queens.

Value: Actually pretty good. The high crime rate and difficult commute drives down home prices relative to other areas. But you probably have to be more than 1.5 hours away to make it really work.

Hudson County:

From most of the county it’s quite good, but it has all the same problems that living in Manhattan does.

Worst Part:
Jersey City. It’s a sink hole in every way.

Best Part:
Hoboken… if you’re a 25 year old analyst who can’t afford to live in town.


Aesthetics: Like I said, if you’re single it works… otherwise…look elsewhere.

Value: Be serious. This isn’t a suitable location for raising a family. Move further away or tough it out in town. You’ll thank me.

Essex County:

First rate.

Worst Part: Newark and much of the surrounding area. If you need me to explain this you have bigger problems than I can solve for you.

Best Part: There are some towns like Short Hills which exist as upper middle class islands surrounded by a sea of urban blight. But you will pay more in those towns than anywhere else in the state. The contrast in how little you get for the dollar is breathtaking.

Taxes: Preposterous...even by New Jersey standards. Newark and the surrounding area are the corruption capital of America. You’ll pay and pay and pay, and get virtually nothing for it.

This is the area that NJ gets its reputation from. I’ve described it in the past as an urban madmax set. Most of it is simply horrible.

Value: Horrendous. If you buy in one of the islands like Short hills, you will get less for your money than you will anywhere else in the state. And for your trouble you’ll have a higher crime rate, and taxes that would make a socialist grumble.

Union County:

Like Essex county, Much of Union County is easily accessible. But none of the areas where you want to live will be.

Worst Part:
Actually I lied; the city of Elizabeth is the town that gives NJ its reputation. It has all the charm of Jersey City with the government efficiency of Newark. I get uncomfortable just driving though it.

Best Part:
Westfield or Summit. Like Essex county, union has it’s ‘islands’, and they have the same problems but to a somewhat lesser degree. The western parts of the county are quite nice too, but are really stretching the limit in terms of commute time.

Taxes: Lofty, but not choking like Essex county.

The western parts like Gillette and Stirling are quite nice. The islands are a little crowded for my tastes.

Value: Westfield and surrounding area are still delivering very little for your money relative to the other areas, but aren’t shocking like Short Hills. Taxes are steep and you can’t get a parking space at the train station. The wait list for it extends decades into the future.

Middlesex County:

Well that depends. The places that are easy to commute from like Woodbridge are undesirable for other reasons and the best areas are further. On the whole I’d call it largely accessible, but mostly by bus.

Worst Part:
New Brunswick, but that still isn’t so bad. Its home to Rutgers of course, and has a high crime rate and is a sink hole by and large, but very little of it overflows into the surrounding areas.

Best Part:
Most of Middlesex County isn’t bad, but it isn’t all that great either. It’s largely a blue collar area that is without major vice or virtue. As usual, the western parts are the most upper of the upper middle class suburbs. If you’re an Indian immigrant (as many wall streeter’s are) then you probably know that Edison NJ has the highest concentration of Indians in all of North America.

Passable - you know… for New Jersey.

Being a blue collar area, much of it is less than gorgeous. But it’s not the thunderdome like blight of Essex or Union Counties either. For the most part it’s clean and relatively safe.

Not bad, but there aren’t a ton of place to choose from. You’ll probably end up looking in North, South, or East Brunswick. But once again, these towns will put you on the bus and at the mercy of the weather and traffic.

Somerset County:

Commute: The nice parts of Somerset county involve changing trains in Newark, and that places most of them outside the 1.5 hour limit. Even the busses are very limited.

Worst Part:
In truth, apart from the commuting distance, I don’t think Somerset County really has one. If only it were a little closer.

Best Part:
Again, there are so many truly beautiful areas that it’s hard to choose. For my money I think the area around the national equestrian center in Far Hills is about as pretty as any countryside in the world. Anywhere from Branchburg north qualifies as truly beautiful.

the schools in Somerset county are first rate, and come with a first rate tax bill. They are lower than breathtaking Short Hills, but higher than most everywhere else in the country. But you have to live somewhere. Taxes aren’t the reason to avoid Somerset county, the distance is.

Honestly beautiful, almost everywhere.

You get a lot for your dollar but you pay for it in commuting time. But if you can live with 2 hours each way you get a lot for it here.

Monmouth County:

Commute: Most of the county is unreachable in 1.5 hours. But there are several nice towns inside the 1.5 hour limit. Full disclosure, this is where my wife and I chose to live.

Worst Part:
Like Somerset County, there aren’t really any big problems in Monouth county…. Maybe Asbury Park, but that’s too far to commute. The traffic on Rt 9 might be a problem for some.

Best Part:
Colts Neck. It’s pricier than the other commuter towns, but that’s because the taxes are lower. It’s the most upper of the upper middle class areas. The town of Rumson is as nice as Beverly Hills, but if you can afford to live there, then you can afford to live anywhere.

It ain’t cheap but there are worse in New Jersey. The lower income towns in Monmouth County have a high percentage of illegal immigrants, and they don’t draw a lot in social services so it’s cheaper than other areas.

My town is all horse farms and apple orchards and we’re 20 minutes from the beach. I think Somerset County is prettier, but Monmouth has its advantages. One of them is that the weather pattern is solidly mid-Atlantic, making the weather more like Baltimore than Boston. The Connecticut suburbs are firmly in New England so there is quite a spread in temperature between here and there. That was what pushed my wife over the top.

Actually pretty good all things considered. And there is probably more breadth and diversity in the housing market here than in any other commuter accessible area.

There are other nice parts of the state too but they aren’t generally commutable. I knew a guy once who commuted to New York from Allentown Pennsylvania, so it can be done. But it’s not going to be a good fit for most people. With that said though, Morris and Hunterdon, and Eastern Mercer counties offer all the benefits of Somerset County with lower home prices and taxes. But 2 hours or more each way seems a bit much to me. Some people can make that work and if you can, include them in your search too.

These are some very broad brush strokes, and they leave out many important details. There are 'less nice' places in Somerset county and beautiful places in Essex. It's not all homogeneous (except for Middlesex county where decent blue collar homogeneity is sort of the point.) But on the whole, New Jersey is one of America’s best kept secrets. But for the government it would be a really terrific place. I'm sure if you give it a fair chance you'll come to see that the same as I have.

%%%%%% Out Of State Addendum %%%%%%%

For you folks reading this from out of state, there is a peculiarity of NJ public finance I need to explain. The public schools here are funded ONLY though property taxes. There are some complications to that, but for the most part it means that if your taxes are higher, your schools are at least better funded. In Bergen and Essex counties the institutionalized corruption means that more money equals more money wasted and the school performance won't improve at all. There are other complications too like Abbot districts where the taxes of a rich town are given to other impoverished towns for their school boards to steal.

If you want good public schools you should realistically be looking at Somerset, Eastern Morris, and Northern Monmouth counties, or the far western portion of Middlesex county.

- Stupid - Evil Republicans

Charles Krauthammer:

This being a democracy, don't the Democrats see that clinging to this agenda will march them over a cliff? Don't they understand Massachusetts?

Well, they understand it through a prism of two cherished axioms: (1) The people are stupid and (2) Republicans are bad. Result? The dim, led by the malicious, vote incorrectly.

Even for him this is a great, highly readable piece:

The Great Peasant Revolt of 2010

Thursday, February 4, 2010

- There Is A Backlash Building...

For years now I've been going on about how horribly unjust it is that civil service unions do so much better than those of us who actually create wealth in the private sector. And lately I can tell that people have finally begun to get that message. It's still premature... we're a long way from tax revolts. But the nature of how unjust it is has started to become apparent to lots and lots of people, and since that's so, it's just a matter of time.

The minimum I'm hoping for is a ban on unionized civil service. The most I'm hoping for is that anyone who works for the government or doesn't have a positive tax burden will no longer have the right to vote. The latter is unlikely I know... but it seems to me that it would be a far more just world if only the people who are paying the bill get to decide what is put on it.

- The Future As a Government Worker

I've been arguing with John Derbyshire about the kind of future you'll have if you get a government job. He thinks it's a great idea.

I say, it may look like high pay, little work, and a pension and medical benefits that the private sector will never be able to match, but it's really just buying into a promise that will never be followed through on. The tax revolt and the demands of the market will come to bear long before this years freshman civil servants ever see a dime of their lofty retirement packages.

If you want to see the future of the US civil service system, look to Greece. Their largest civil service union has called a strike to protest the Greek government facing reality.

Tuesday, February 2, 2010

- My Favorite SuperBowl Ad

...well sort of. I don't think its actually an ad from the Superbowl... but it's it does have that Superbowl Ad sort of feel, and .. it is a big ad...

The music is Carmina Burana. This translation of the orginal lyrics says a lot about why I so like it:

O Fortune, variable as the moon, always dost thou wax and wane.
Detestable life, first dost thou mistreat us, and then, whimsically, thou heedest our desires. As the sun melts the ice, so dost thou dissolve both poverty and power.

Monstrous and empty fate, thou, turning wheel, art mean, voiding good health at thy will. Veiled in obscurity, thou dost attack me also. To thy cruel pleasure I bare my back. Thou dost withdraw my health and virtue; thou dost threaten my emotion and weakness with torture.

At this hour, therefore, let us pluck the strings without delay. Let us mourn together, for fate crushes the brave.

We are all slaves to fate after all... the control we imagine is really just an illusion. So while I may be a slave to fate, in the immortal words of Deadwood's Al Swearingen, I'm gonna 'Take it like a man'.

- Keynesian Talking Points Debunked

This is Richard Epstein and John Taylor chatting about 'What caused the financial crisis'. For my Wall Street readers, this is THE John Taylor of the "Taylor Rule", which we've all had drilled into our skulls back when the Fed actually change interest rate targets. It's hard to imagine someone knowing more about the effect of money supply on the markets than this guy.

- I might Have Been Wrong About NJ's New Governor

I'm married... so I'm quite accustomed to admitting I was wrong about something. I'm not ready to go quite that far on Chris Christie just yet, but I have to admit, this is a more daring and more admirable move on his part than I ever expected.

N.J. Gov. Chris Christie issues order curbing political donations by unions

I've long argued that assasination is a tool fo the left not the right. I think (and hope) the governor has some awesome security because he's making all the right enemies.

Monday, February 1, 2010

- The Goldman Chief's 100 Million Bonus

Take it all LLoyd; take the whole hundred million and screw those A-holes in DC. In fact, if you can get the board to give you a 500 million bonus you should take that too. For what it's worth I not only think you should take the whole thing in cash, but you should spend it all on building a private lake on your estate, then fill the lake with champagne, launch your yacht into it, and have a non stop roman orgy that makes Mardi Gras look like high tea at the Vatican... if that's what you want to do.

I'm so sick of Washington trying to pick all the winners and losers, that for any guy who actually delivered the goods, I'd cheer him for taking the cash and spending it on matter how profane. It's none of their business what someone gets paid even though they desperately want to make it so. And I greatly resent all the sanctimony that's flowing north from that cesspool.

It's like that old Russian joke about Ivan and Sergey. They had lives that were the same in every way except that Ivan had a goat and Sergey didn't. One day Sergey finds a magic lamp and a genie appears to grant him one wish...anything he likes. Naturally he says ... "I want Ivan's goat to die". That's DC under Obama... they all want all our goats to die.

Naturally Blankfein doesn't want to spend the money the way I suggested... the truth is... even I don't really want to spend any money that way. But I'd cheer him if he did. And I do think he should get paid every penny he can manage. And if the sanctimonious third parties in Washington don't like it, they can all take a long walk off a short pier, into a private man made lake, filled with champagne.

But in the meantime I wanted Lloyd to know that not everyone in this country is consumed with envy. Not everyone thinks that the government should decide what people get paid. So I say... get it in Cash Lloyd and spend it all... absolutely any way you damned well please.

Goldman has denied they're going to give it to him... and to that I say ... too bad.