Friday, January 29, 2010
I want to give a special shout out to my buddies Craig and Tim, whose enthusiasm and determination to not see their country sucked down into the third world by socialist dogma, was what managed to drag 3 more of us out of our warm beds, to drive down to the big Washington DC tea party last autumn.
The tea party wasn’t made up of the kind of people who usually protest the government. Instead it was made up of the kind of people who typically can’t waste their time on activism because they have businesses to run, or jobs to do, or kids to drive to baseball practice or step dancing class. It was regular people who all believed different things but were joined in their belief that the government does far too much already and that we all need to find some way to make it do less.
For our trouble, we have been ridiculed in the press and among leftists activists. We’ve been called Nazi’s by Nancy Pelosi, fascists by Harry Ried, and radical crazies by the white house press corps and the New York Times. We were treated with the same kind of dismissiveness that people usually reserve for a sit in launched by a bunch of middle school students to protest a no cell phone policy. We were not taken all that seriously to say the least. And the fact is, I’m probably stretching the meaning of the word when I say “We”.
It’s true I was there… but I’m not really all that engaged in politics at the moment outside this blog. I have a business to run and a job to do, and a child to drive to karate class. But Craig & Tim have all those problems too and still manage to stay very much is engaged… they’re engaged enough for all of us.
Since the election of Scott Brown, the entire political establishment has at the very least, begun to take the tea party seriously. The blue dogs are in a panic, Republicans are abandoning ‘compassionate conservatism in droves, and the media is even starting to sit up and listen. Obama and Pelosi are both still pretty clueless, and the editorial staff at the Times still thinks its 1968, but you can only fix so much. One things for sure… the tea party movement is no longer the butt of every inside the beltway joke you can imagine.
They aren’t making jokes or calling us a bunch of crazies anymore. And that’s because of guys like Craig & Tim who go to the trouble of calling their friends, and renting a van, and getting up at 4:00 in the morning to drive 200 miles in the rain with a bunch of grumpy middle aged men, so they can carry around a sign that says ‘leave us the hell alone’!. The tea party movement has gotten some respect now, and the world will be a different place because of it. And its guys like them who have reason to be most pleased about that.
I'm not generally a big fan of Lew Rockwell, but I think in this piece about unemployment he distills the salient points very nicely. He makes the claim that our unemployment rate could be at zero tomorrow if we didn't have so many government mandates standing in the way. Like:
- The high minimum wage that knocks out the first several rungs from the bottom of the ladder;
- The high payroll tax that robs employees and employers of resources;
- The laws that threaten firms with lawsuits should the employee be fired;
- The laws that established myriad conditions for hiring beyond the market-based condition that matters: can he or she get the job done?;
- The unemployment subsidy in the form of phony insurance that pays people not to work;
- The high cost of business start-ups in the form of taxes and mandates;
- The mandated benefits that employers are forced to cough up for every new employee under certain conditions;
- The withholding tax that prevents employers and employees from making their own deals;
- The age restrictions that treat everyone under the age of 16 as useless;
- The social security and income taxes that together devour nearly half of contract income;
- The labor union laws that permit thugs to loot a firm and keep out workers who would love a chance to offer their wares for less.
This is solid common sense, but his best quote is this:
People are saying that it is better that people be unemployed rather than being exploited at low wages. If so, it all comes down to your definition of exploitation. If $10 per hour is exploitation, we should be creating even more unemployment by raising the minimum wage. We could dis-employ all but a few by raising the minimum wage to $1,000 per hour.
The rest is here.
Wednesday, January 27, 2010
The biggest problem with Hope and Change wasn't hope, it was change. When the deeds of men fail to meet the lofty standards of hope, it's only the person doing the hoping that suffers. But when an elitist, anti-business redistributionist talks about changing things, that uncertainty makes everyone suffer. Businesses curl up into the fetal position, markets pull back into their shells, and everyone waits to see what havoc is going to come from government. That pretty well describes what's happened in America during Obama's first year.
But now... thanks in part to Scott (41) Brown, Obama has had a political defeat in the form of his failed healthcare initiative. He's no longer seen as the omniscient, walking on water savior of the progressive movement and cannot do whatever he likes to America based on his whim. The Democratic faithful are deserting him in droves, and true to form, his fellow elected officials are beginning to worry more about saving their own skeevy hides than fulfilling his vision.
The healtcare bill died last week and today we hear that Cap and Trade is also a dead legislative initiative. Global warming as a political principle is a laughingstock as are the people who still support it. That means that the taxes they dreamed of will not be levied, and businesses will be abel to use that money to instead hire more workers. Even Obama's dream of 'making the fat cat's pay" is beginning to look like thin gruel to the electorate. People know that the poor hire no one, and they don't like the idea of team Obama eating their lunch by raising taxes that keep them unemployed.
Since that's so, we can begin to reduce the level of political risk we incorporate into most financial models, and we can begin to worry about what the data actually says. Now that Obama is no longer any greater a threat to stability than any other Democrat, things can begin to improve and business can begin to make assumptions about the threats that the future holds. All this has been brought about by Obama's first major political failure.
It will take some time before people begin to be certain about that, but in the next few months, I'd expect the individual investors to begin to creep back into the markets, and for professional investors to begin to prudently expand their positions out along the risk curve. There remain a number of serious macroeconomic issues and the chance for government intervention still exists, particularly in the capital markets and banking. But to a great extent that risk of major change has now diminished.
I'm no fan of Tim Geithner. I think he's a government hack and an elitist tax avoiding weasel. But there is no creature that walks upon the earth that I hold in higher contempt than a US Congressman - even a Democrat Treasury secretary. It's sort of a choice between the devil and the deep blue sea, but watching him testify before these grandstanding circus clowns, it's obvious that he's smarter than they are.
Ollie North he ain't... but on the whole I find myself enjoying those moments when he makes the committee members look like the idiots they are. He may be nothing more than Obama's financial hatchet man, but he understand the basics at least. These congressmen don't have any idea what they're talking about and I hate to see people pretend that they understand banking when they really don't. I especially hate it if it's someone who is going to be writing laws about it.
Go get em Tim.... just walk over there and slap Cummings right in the face and 20% of America will hold parades in your honor.
All this anger by the congressmen is so disingenuous. I was opposed to the bailout, but all of these A-holes were all for it. Paulson - Bernanke et al were all right there in the fire making the decisions and taking responsibility. And when they did, all these a-holes in Congress sat in the back like little girls crying "Oh Please save us... we don't care what you do just do it quick!!!!" Then when the parties involved stepped up and took responsibilty I think they were wrong, but I recognize that in a situation like that it's an easy mistake to make. and I'm not going to sit here now demanding someone take the fall because emergency decisions made in a moment didn't turn out exaclty the way I hope.
These people in Congress totally disgust me... Democrat and Republican alike.......
All of this is apparently as a reaction to the Scott Brown election. This is what it looks like when Congressmen try to 'talk tough' and become more populist. Basically it's amounting to one unsubstantiated insinuation after another about how the AIG bailout was really done at behest of Goldman Sachs. since I imagine that's a big part of what the State of the union address will be about, I wonder if team Obama is getting upset at the congress stealing their thunder?
Monday, January 25, 2010
In the interest of seeming 'tough on the fat cats' the most economically illiterate portion of the Senate is making noise about not confirming Ben Bernanke as Fed Chairman. I've been critical of him too, and I think there are good reasons to be critical of him, but these people don't know any of them.
Barbara Boxer is upset about monetary policy? Spare me. She neither knows nor cares how monetary policy impacts Americans or the American economy... that's not how she processes things. Even Ron Paul, who in general I agree with, is a Congressman not a Senator so he isn't actually part of this vote - and I think he's really desperately off the mark when it comes to Bernanke.
I could go on and on about the intricacies of the monetarist school and relay some of the more terrifying choices that Obama might make in place of Bernanke, but there is really no point. All this is just posturing by the economic illiterates in the Senate, designed to make the rubes believe that they're tougher or smarter than they really are. They are trying to be populist, but in the end they don't know what they're talking about. So they'll confirm him "reluctantly... and with great reservation" as if they pondered all the serious questions and now see him as the least bad choice.
In reality it's all posing. All of it. And it fills me with an urge to tell them to shut their pie holes and confirm him. I have neither the time nor inclination to listen to them pretending that they know what they're talking about when it's so painfully, embarrassingly obvious that they don't. There are a lot of potentially very scary things that can come from the Fed, and Bernanke is the only guy within reach who even has a shot of keeping a lid on them. So please just cut the crap, make your vote, and save the populist nonsense for campaign trail... you f'ing idiots.
Friday, January 22, 2010
Obama says a fight with Wall Street is a fight he’s willing to have, but the truth is, I know he doesn’t mean it. He won’t fight with the Iranians, Al-Queda, or the anti-American wing of his own party, and they’re all doing great harm to his political image. So he’s certainly not going to fight with someone like me.
If you ask me, I don’t think Obama's image as a sneering condescending law professor is the kind of thing that lends itself to anti-wall street populism. And to perfectly honest about it…I think I can take him (both physically and intellectually) so if he wants to throw down then I’m not going to miss my chance. Risk management is an expertise which takes ages to learn and he's had no chance to learn it. In the meantime... like the man said... 'that just my game'. So let me tell you what’s going to happen with the president’s new populist move to limit bank risk.
Goldman Sachs, Bank Of America, JP Morgan and all the other big money center banks will simply divest their deposits and the business units that manage them. Their “banks” will become subsidiaries of much larger financial firms which will still engage in highly leveraged activities. They will no longer be able to combine their balance sheets, but they will be able to lever the equity holdings that those banks represent, so very little will change. That’s how it was before glass-Steagall. And that law didn’t have anything to do with the recent market turbulence.
As is usually the case with liberal policies, this move won’t do one thing to accomplish any of the goals that Obama said it would. It won’t make the financial system any more stable, and it will do nothing to promote economic growth. On the contrary, over the short term it’s going to inhibit growth. The financial system will be forced to reduce its cumulative leverage somewhat, and that will push interest rates up and stocks down. It won’t increase lending at all because without the support of their highly profitable investment banking operations, the new banks will be less willing to submit to further extortion from ACORN and the like that had in the past pushed them into lowering their credit standards.
The good news about this however is that it will effectively eliminate the moral hazard created by commingling the government and the banks. The big excuse for bailing out the financial system in the first place was that it’s the channel used by the Federal Reserve for managing the money supply. In effect the bailout was really to designed to support the fed, not the banks themselves. And undoing that link will make it much easier for the winners to win and the losers to lose.
When Obama realizes that, he’s not going to like it. He’s not going to like the fact that this will limit his influence over the financial system. The next time he calls the banks in to tell than that he’s the only thing between him and the pitchforks, under this new rule they’ll probably tell him to take his pitchfork and shove it. And that’s how it should have always been if you ask me.
The most overworked phrase in finance this week will be that ‘the devil is in the details.’ It’s a good thing to not have banks too closely linked to the government, but given Obama’s prior agenda, we’re all having trouble believing that he means it. We’ll see. If we get a bill that can fit on a single page it will be fine and we’ll probably all be for it, but if we get a 12,000 page behemoth filled with pork, earmarks, and a wealth of new rules, regs and taxes (like we would expect from this congress) then it will be a disaster.
I guess we’ll see.
Thursday, January 21, 2010
Wednesday, January 20, 2010
Barak Obama really is beginning to seem like a delusional, hubris addled, "Nero" like character to me. He claimed today that the anger that got Scott Brown elected was the same anger that got him elected. This is one of the more delusional things I've heard him say.
Obama wasn't elected because of anger, he was elected because of self congratulation. All across the country rich, white, college educated liberals said to themselves "I'm a good person - and I proved it by voting for that intelligent sounding black guy. I can't possibly be a racist now. What a moral person I am."
Self congratulation is the basis for virtually all liberal social policy, which is why it served as such a great tool for Obama to use as a springboard to the Whitehouse. But Americans don't really want his vision of a redistributive America, and that's what got Scott Brown elected. Rich white liberals want their guilt assuaged, but had they known that it would mean that the winners will lose and the losers will win, all by government fiat... John McCain would be president right now. No one still believes in socialism except ... well... excpet people like Obama.
Obama might not want to admit something like that in public but he certainly should be aware of it. If he really thinks he was elected by the righteous anger of the downtrodden, then he really is clueless.
I’d love to be a fly on the wall when the senior Whitehouse staff has it’s meeting to discuss the current state of the healthcare bill. The truth is, it’s dead…. finished… whatever the spin-meisters say, there will be no reviving Obama’s signature legislation now that the people have spoken and given Ted Kennedy’s old Senate seat to a … gasp…Republican.
I can’t even type it without smiling, but the truth is I don’t really want to gloat. Scott Brown is no Ted Kennedy, which my readers know will be enough to spare him any of my future pugilistic intentions. And since he’s an ex soldier, and looks to be much tougher than bloated and gin soaked old Ted, I’m probably the better for it. But in my sewing circles he’d still be viewed as extremely liberal. He is from Massachusetts after all, and people only get so conservative up there. Even many of the reactionaries in greater Boston are still anti-gun and pro-abortion.
All the same though, he’s a liberal Republican that I’m glad to have join the party. But the question I have is… what will happen now?
It’s my belief that this sham of a healthcare reform bill has never been anything except a way to transfer assets to the unions. Collectivism is the ‘perpetual motion machine’ of modern economic thought. It sounds good in theory but it never works the way you want in practice. In the end, it always requires external support or the whole thing just grinds to a halt. The unions are no different, and they’ve built up an impressive set of unfunded liabilities that are sure to leave them bankrupt in the next few years without help from the government.
And the government is certainly going to give it to them. The nice thing about the healthcare bill was that it gave Obama and congressional Democrats good cover… it gave them a believable story that they were doing this all for ‘everyone’ and not just for their union paymasters. But with Scott Brown’s election that issue is dead so they’ll have to do something else.
My speculation is that we’ll see the private sector unions roll their retirement benefit plans in with the public sector unions. They don’t even need a law to be written to do something like that…they can claim it’s for ‘efficiency’ or something. But what that will give them is a way to benefit from the federal bailouts that are coming for the states and municipalities that go bankrupt.
It’s no coincidence that those states with the highest percentage of unionized civil servants are the states with the largest unfunded liabilities, and are also the most likely to go bankrupt. California is already on the brink. Just behind them is Illinois, Michigan and (guess who) New Jersey. All are deep blue states with firmly entrenched liberal political machines, and a reliable voter block in their unionized civil service.
1 in 9 New Jersey citizens gets their living from the State or local government in some way, and that doesn’t include teachers. The story is similar in the other deep blue states. A real slash and burn government cutter is unlikely to be elected to anything where that’s the case. And although voters in Texas and Utah are going to quickly tire of sending their tax money to voters in California and New Jersey, the ‘emergency’ should let the Obama administration slip a few of the worst offenders through the door before it’s slammed shut.
It will have a much higher political cost than the sham of a healthcare bill, but if we’ve learned anything from this healthcare debate, it’s that the Democrats will pay any price when they need to. Scott Brown has closed this road, but they’ll try all the others before giving up.
Tuesday, January 19, 2010
It's also important to remember that the unions in question are the most part civil servants. They collect the taxes... they award themselves compensation more generous than their private sector peers...they make the rules and make all the decisions... and if the Democrats get their way, they will also be excused from paying the same taxes as the rest of us. Sure it's unconstitutional, but in the immortal words of Nancy Pelosi "The constitution?! ...are you Serious?!"
This Scott Brown thing is looking exciting. It may take ACORN and the Democrat party lawyers until summertime to steal this election, even if the dead vote as early and often as they do in NJ. Pelosi says they'll ram through health care anyway... if they do, they'll be a backlash unlike anything this country has seen since the civil war.
Thursday, January 14, 2010
He's a "Republican" from Massachusetts... hardly the gun toting, libertarian leaning candidate of my dreams. But then again, I'll bet he hasn't abandoned anyone to drown when his car went off the bridge either.
He might not be the candidate of free market conservative dreams, but he's better than anything I ever expected to come out of greater Boston.
In most cases I think the underlying Democrat philosophy of assuming that individual Americans are too stupid to make their own decisions, is totally misplaced. And then I hear what unions are supporting. Living in NJ, it’s all too easy to find examples of the union rank and file supporting ideas which are not only clearly contrary to their interests, but aren't even consistent with one another.
As an example, there was this guy who used to commute to the city on the same early train that I did, who always wore a pro-union T-shirt. Written across the back was the phrase “No Human is Illegal” in both english and Spanish. The obvious idea there was that the union supports the importation of illegal immigrants, even though those same illegal immigrants were clearly taking jobs from their union members. It was astounding to me that the union leaders could convince that idiot that not only was this a generally good idea for him, but could also convince him to advertise his stupidity by wearing a shirt declaring it.
Then there was the ‘genius’ at my gun club who announced for anyone who would listen, that the real cause of the financial crisis was ‘corporate greed’. This kind of broad based and unspecific indictment is exactly the kind of thing that appeals to the typically uneducated union rank and file. It didn't matter at all to him that the greedy corporation helped him buy a $750,000 house with no money down and an income that couldn't support it. To him that was one fo the good side benefits that he'd managed to wrangle out of the system. And when he couldn't pay his mortgage and he was kicked out....guess what... more corporate greed.
His solution to this social problem was to unionize everyone everywhere, and have the government take over any industry like the banks, that wouldn’t cooperate. A world where everyone was paid what a carpenter is no matter what they did, made far more sense to him. But when he was challenged on the issue he claimed that “Oh no… he’s not a socialist… he just thinks the government should tell these greedy corporations what to do.”
My point is, there is a reason Democrats think we’re all too stupid to decide things for ourselves, and as near as I can tell, that reason is that most Democrats (and all union members) really are too stupid to decide things for themselves.
Personally, I don’t think that’s reason enough. I think if you’re too stupid to decide how to run your life you should be allowed to gain the knowledge that comes from making mistakes. And sure enough, in no time you WILL know enough to run your own life. No one, not even a union member, is dumb enough to keep making the same mistakes over and over again if they have to bear the consequences of those mistakes. But so long as it’s someone else who bears the burden of mistakes made by the unions, they will have no reason to learn how the world really works.
When the American industrial base reacted to strong unions by moving overseas and automating, American big labor moved into those areas that can’t be sent offshore…. specifically the building trades, and government. And now that they’re in government and have bought themselves a big-labor presidency, they intend to remake America based on their own, poorly thought out design. This healthcare exemption is just the beginning of that:
“Unions tentatively struck a deal Tuesday to exempt collectively bargained healthcare plans from a tax on high-cost plans expected to be used to help raise revenue for the healthcare overhaul,” CongressDaily reports.
So if you're in a union you get one tax level, and if you're not in a union, you get another. That sounds fair right? Meanwhile, the union leadership can't see that they are killing the golden goose. They are trading 20 years of power for assuring the inevitable collapse of the American govenrment. You can't spend money you don't have forever... and the bill is going to come due for the govenrment and for the unions as well.
But the rank and file of the unions clearly don't understand that. If they did...an angry mob would be chasing Andy Stern, Richard Trumka, and Ron Gettelfinger through the streets right now.
Tuesday, January 12, 2010
One of my favorite episodes of I love Lucy was the one where she was in Rome, separated from little Ricky on his birthday. A local urchin, making the most of her mood, declared that it was his birthday too, and got a new pair of shoes for his trouble. A few minutes later he shows up at her hotel room in his new wingtips with about 30 other barefoot children declaring that it's "all of their birthday's too".
Something about that exchange has always reminded me of how government works. People always respond to the poorly thought out government incentives, and this one is no different.
In fact I predict that if this all works out, the fastest growing religious sect in America over the next few years will become "The Amish".
Thursday, January 7, 2010
I've read of my favorite female (ex-)Politician has now come from Larry Elder.
The things that is most hobbling Sarah Palin's political future is 'the big lie'. The left has said things about her which are demonstrably untrue and invented from whole cloth, but since they keep saying them as loudly as they can manage and pretending that they are the truth instead of a joke from a Saturday Nite Live skit, it's been hard for conservatives to come to her defense. But we should. As usual, the facts are on our side. Larry Elder is saying things about her that need to be said.
I'm still a Sarah Palin fan. And I still believe that the truth about her will bubble to the top eventually over all the media generated noise.
Anyway... here's Larry Elder's excellent defense.
I've been overwhelmed lately... sorry for my absence. I've been handling multiple crises, but I should be past it (for better or worse) in a week or so.
In the meantime you will not want to miss this announcement from Michael Walsh at the new "Bigjournalism.com" website. He says all the things about the journalism business that has bothered many of us for years. He's an insider; a producer of "the news" who makes it clear that those of us who have problems with the MSM aren't crazy after all. A small sample:
Around the time of the Iran-Contra affair, politics entered the newsroom. Maybe it was Oliver North and his chest full of fruit salad. Maybe it was Arthur Liman, grilling the witness. Maybe it was Brendan Sullivan, shouting, “I’m not a potted plant!” Still reeling from Ronald Reagan’s historic, 49-1 wipeout of Walter Mondale, reporters started rooting against the administration, and not just the op-ed columnists. The ideal of American journalism – objectivity – began to be assaulted, at first obliquely and then openly. Deconstructionism, the curse of the modern university, set in: how can you really be objective? Don’t we all bring our prejudices to bear on what we see and hear? Isn’t it really impossible to know the truth? Why bother?
And so American journalism began to look, sound and read more like European journalism, frankly partisan and often untrustworthy, even in its presentation of what we used to laughingly call “facts.” By the time the Clinton Administration had succeeded the hapless rump parliament of G.H.W. Bush, the battle was joined and impeachment only served to drive another nail into the coffin of any Code of Ethics.
The election of 2000, and Bush Derangement Syndrome, was the end, and since then the MSM – having essentially self-selected itself into a giant Harvard fraternity, as conservatives like me left to do other things – has been at war, not only with its own readership, but with the country. To watch the self-congratulatory logrolling of Morning Joe (which could be a good show, but isn’t) on MSNBC at dawn, and the roaring sneer-fest that is the station’s programming-bloc over four hours in the evening, a parade of Mr. Ed, Sputtering Chris, the Former Sportscaster, and the lovely and talented Rachel Maddow, is to see the real face of the leftist media, and what it thinks of you.
On many levels I'm a proffessional consumer of news, and from my persepctive the problems with the MSM are obvious. I haven't watched a big network (ABC,NBC,CBS,CNN) news program in more than a decade.... not even a little. What's the point? I already know what they're going to say.
At least now it looks like the people who have something else to say, will be saying it in more places than on Fox News.