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Thought for the day

We live in a world where the central bank (Fed) *rigs interest rates low, in order to rig debt levels and asset prices high* as they can possibly go.

I know it’s abstract and I comment on it ad nauseum, but I’m not sure it can be over-stressed. It has lots of bad effects.

  • You think homes are unaffordable, compared to (say) 20-40 years ago? Guess why home prices aren’t a good deal lower. (There are many reasons – but try guessing the biggest.)
  • Feel hopeless about your ever retiring? Take a guess why retirement income is hard to come by.
  • Feel like you struggle to make ends meet every month, while wealthy people (having lots of financial assets) keep doing better and better? One more guess why.
  • Feel like new, good jobs are impossible to come by? The Obama administration (including Obamacare) is a big drag, there. But the Fed doesn’t exactly help.
  • Feel like the stock market is a crazy bubble again? Feel like we learned nothing from the 2008 crisis, and our economy is still much too ‘financialized’ and debt-ridden? Again, many causes – but one guess as to the top cause…

Interest rates are the most important price in the economy. They should be set by the People in free markets. I see no reason to have a Politburo which plans them – and plans them badly, in ways that injure society.

This Is What Desperation Looks Like

Ezra Klein — who is at least a Level Six Operating Thetan in the Cult of Obamatology — desperately spins the hopeless disaster of Kathleen Sebelius Reign as Commissar of the Department of Hell and Inhuman Servitude.

Obamacare has won. And that’s why Secretary of Health and Human Services Kathleen Sebelius can resign.

Sebelius is such a colossal FAIL she couldn’t even make it through her own resignation speech without a glitch, but Ezra Klein and the rest of the glassy-eyed cultists refuse to see the failure.

Ezra Klein and the rest of them were so convinced that Obama really was the Lightbringer, the Socialist Ronald Reagan who was so brilliant, and so deft that Big Government would finally work. Socialism would finally work because finally “the right people” were in charge of it.  But it hasn’t. Massive Government in the economy has brought nothing but stagnation, cronyism, and death. The Obama Foreign Policy is a complete shambles. Michelle Obama’s school lunch program has resulted in school lunches even more vile and unpalatable than they were before. And Obamacare has turned out to be nothing but another bloated, inefficient Government program noted for spending tons of money and making lives worse for its victims.

But the True Believers can’t bring themselves to admit this. Admitting that Obama’s Policies have failed means admitting that Progressive Socialism has failed. Worse, it would mean admitting that Obama’s critics (blasphemers!) were right all along. And that is too devastating a blow for the leftist ego to contemplate. (Caribou Barbie was right and the Clean Articulate Unprecdented Black Man from Harvard was wrong? Inconceivable!)

The Progressive Mind cannot process the possibility that their Religion (Progressive Socialism) and their Prophet (Barack Obama) have failed. They must convince themselves that the prophecy must have been… misread, somehow. The flaw cannot be in Progressive Socialism, but in the failure of the people to live up to its tenets.

Update: I found this quote in an Ed Driscoll post about David Letterman:

“The laments of the small-town leftists get voiced with such intemperance and desperation. As if those who voice them are fighting off the nagging thought: If the Republicans aren’t particularly evil, then maybe I’m not particularly special.”

Today’s sadly-ironic headline

Posted by Jeff (ILoveCapitalism) at 5:10 pm - April 9, 2014.
Filed under: Big Government Follies,Crony Capitalism Consequences

HP pays $108 million to settle foreign bribery probes:

WARSAW/WASHINGTON (Reuters) – Hewlett-Packard agreed to pay $108 million to resolve wide-ranging U.S. government investigations into whether some of its foreign units bribed government officials to obtain lucrative contracts, U.S. officials said on Wednesday.

HP’s Russia subsidiary pleaded guilty…Polish and Mexican units of the computing giant also resolved U.S. criminal charges related to contracts they had won in those countries…

Get it?

  1. Foreign companies (owned by HP) paid fees that foreign officials demanded of them. Everyone called these fees “bribes” in order to displace the guilt, that is, to hide the extortion aspect.
  2. U.S. officials were jealous so they, in turn, demanded and got $108 million from HP. Everyone called these fees “settling criminal charges under the Foreign Corrupt Practices Act”, again in order to displace the guilt, that is, to hide the bottom-line extortion aspect.

Pro-business or pro-market?

Jonah Goldberg makes a great distinction:

…the difference between being pro-business and pro-market is categorical. A politician who is a “friend of business” is exactly that, a guy who does favors for his friends. A politician who is pro-market is a referee who will refuse to help protect his friends (or anyone else) from competition unless the competitors have broken the rules. The friend of business supports industry-specific or even business-specific loans, grants, tariffs, or tax breaks. The pro-market referee opposes special treatment for anyone.

Goldberg’s point is that the GOP must make up its mind about which one it is. Pro-business is crony capitalism, venture socialism and Big Government as we know it today. Pro-market is more the Tea Party putting real checks on Washington. Goldberg describes the GOP’s dilemma in more detail; RTWT.

To make my view clear: I am not pro-business, I am absolutely pro-market. The mentality that the economy would boom (and America would be great again) if only we could vote in smart people to tinker with the economy in good ways – if only the Republicans had power to do better Washington-y things than the Democrats do – that mentality is part of what has gotten America into a hole.

The truth is, nothing that government does to rig interfere with markets and business outcomes is ever much good. It never turns out anything as well as the politicians said it would, and never as well as what markets – that is, free people – could do, if left to their own devices.

Recovery for the One Percent

To continue my series on this, I’ve been accumulating chart links. There are so many, especially on Zero Hedge which has great coverage. I’ll make some introductory remarks, then show the charts.

As a capitalist, I have no objection to the good inequality that investors, employers and consumers award by their actions in the marketplace. The problem is inequality awarded by force or fraud. That includes crime of course; but the systemic problems in our economy today arise, sooner or later, from *government force* and fraud. Under President Obama – and our nut-job economic planners at the Federal Reserve – we have more government intervention than ever. We also have more inequality. It can’t be a coincidence.

I believe that Obama likes it on some level, because the more inequality there is, the more he can offer (still more) government intervention as the alleged “solution”. While our problems did not start with Obama, he has exploited and worsened them because inequality of power – taking ever-greater amounts of power away from the People, giving ever-more power to the Party/bureaucrats/government – is the deep tendency of the State, and as well, the deep goal of the Left.

I could talk about the explosion of welfare dependency under Obama, which rapes the “working poor” (among others) for the sake of the “lazy poor”. But my focus today is on the rape of the middle class for the so-called “One Percent”, the wealthier people who gain from our government-planned economy and government-rigged markets.

The charts show that under Obama, U.S. income inequality has increased and may be the biggest it’s ever been.

Under Obama, U.S. income inequality is the greatest it's ever been

More charts: (more…)

And This Is Why I Call Them Dramacrats

Failed VP Candidate and Emphatic Amnesty Supporter Congressman Paul Ryan released a budget blueprint today that contains some very modest entitlement reforms and mild reductions in the rate of spending growth. Not nearly enough to deal with the unsustainable spending and expansion of the Federal behemoth. Seriously, it’s like decreasing the speed of the Titanic by half a knot, or a couple with massive credit card debt and an underwater mortgage deciding to buy a Lexus instead of a Bentley.

The Democrats responded to this budget proposal the way Lindsay Lohan responds to the phrase, “Ma’am, you’ve had enough, and I think someone should take you home.”

“This reckless Republican budget casts a dark shadow over the American Dream. By gutting vital investments in our future, it is a direct attack on job creation and a recipe for our nation’s economic decline.”

Earthquakes, volcanoes, the dead rising from the grave! Human sacrifice, dogs and cats living together… mass hysteria! The Senate Majority Leader rambled incoherently about the budget creating something called a “Kochtopia.”

And, everyone knows how this Kabuki play ends. Both sides agree to spend more, and both walk away pretending they aren’t totally satisfied with the outcome.

Speaking of Drama Queens, the Diva-in-Chief of the Dramacrat Party accused people opposed to the Obamacare debacle of being “mad about the idea of folks having health insurance?

It is beyond sad that 51% of the electorate is stupid enough to believe this garbage.

Update: Oh, and a Democrat Representative in Missouri called a Republican a Nazi for introducing a bill that would let employees opt out of Union dues.

And suddenly, HFT

I never knew that Casey Kasem was the voice of Shaggy. But I digress.

CBS recently did a good piece on High Frequency Trading (HFT), a means by which well-connected computers churn the stock markets and skim the cream. 15 minutes, here it is:

But a few things are odd about HFT as a story, or at least noteworthy.

First: the curious absence of government involvement. HFT has been going on for years (Zero Hedge started blogging it in 2009). Where have the vaunted government regulators been, all this time? Answer: Nowhere (until right now, as we’ll discuss in a minute).

The CBS piece praises Brad Katsuyama, a trader who figured out years ago how HFT works and founded a new exchange, IEX, to try to defeat HFT. That’s a great example of private enterprise being ahead of the regulators.

In fact, private enterprise has run circles around the regulators; first by creating HFT, then by being years ahead of government in working to defeat HFT. Could it be that government regulation isn’t effective? (cough)

The mainstream media’s absence from the HFT story until now (2014) is also striking. And that brings us to the second oddity: the timing of the CBS story. As if by magic, within days of its airing, we have also had announcements that the FBI will finally probe HFT. And that Goldman-Sachs will back IEX, the new HFT-free exchange. (Update: And the pr0n-watching SEC finally, also, investigating.)

I’m old enough to recognize a co-ordinated campaign. Granting that HFT is a real story, I still must speculate that the reason why HFT is suddenly on our collective lips, under investigation, etc., is because somebody powerful finds it convenient, at this time. (Where in the previous five years, they didn’t find it convenient.)

Who is that somebody? I don’t know. I did just note that Goldman-Sachs is rolling with the punches, at least. Over at Zero Hedge, they speculate that HFT is now being set up as the scapegoat for a coming stock market bubble-crash. The Federal Reserve is (by its QE, ZIRP and many other policies) the biggest market-rigger of all. The Fed has engineered the stock market bubble of the last five years. And, when that bubble bursts eventually, the Fed will want us all to blame something or someone else.

UPDATE: On CNBC, Katsuyama and a (truly obnoxious) pro-HFT guy get down-n-dirty. Good times.

It’s hard to blog about Obamacare

It’s hard because there are so many items to choose from, weekly. And they’re mostly both technical and depressing (not fun to read). Obamacare is a mess of unbelievable proportions. Even now, I have 40+ related items open in browser tabs, that I had meant to get to sometime.

But here goes; I’ll try to hit a few highlights. First, President Obama’s top three Obamacare promises in 74 seconds, all lies:



The House GOP want to bless Obama’s delay of his “individual mandate” (that immorally forces people to buy insurance). Yet Obama means to resist them.

Last month, the Congressional Budget Office (CBO) found that Obamacare will weaken the economy. Along with other Obama policies, it effectively raises marginal tax rates, giving people less incentive to work. “…the CBO…reported that by 2024 the equivalent of 2.5 million Americans who were otherwise willing and able to work before ObamaCare will work less or not at all as a result of ObamaCare.” Labor unions agree that Obamacare will slam wages and work hours.

Even Dana Milbank (liberal at the Washington Post) agrees that young people are rejecting both Obamacare, and Obama. “The administration announced last week that only 1.08 million people ages 18 to 34 had signed up for Obamacare by the end of February…If the proportion doesn’t improve significantly, the result likely will be fatal for the Affordable Care Act.”

Robert Tracinski asks, What was the point of Obamacare? Because it’s not insuring the uninsured; many of them are finding Obamacare unaffordable (!) and not signing up. The Washington Post agrees.

Along those lines, Catherine Austin Fitts observes, “I don’t see Obamacare as something designed to offer healthcare…It was designed to create a framework that would allow three things. One…to use digital technology to radically reduce labor costs…Second…you wanted, as the baby boomers were aging, to…dramatically reduce the healthcare services available to them…Third…to use healthcare to really control the population…an effort to centralize power.” – Austin Fitts sees government bureaucrats as profoundly competent, once you know their real plan. What they achieve in practice (which may be bad) was very likely their real plan, as opposed to what they told the public.

Bonus article: The Greeks are finding that socialized medicine doesn’t work, once you get older and need more of it.

UPDATE: Obamacare raises family insurance costs MORE than the previous eight years, combined. Just like Obama adding more to the national debt than the previous 8 Presidents combined, I guess.

HHS Bureaucracy Completely Dysfunctional Says Former HHS Bureaucrat

Posted by V the K at 12:09 pm - March 14, 2014.
Filed under: Big Government Follies

Progressive leftists tell us that letting the Government run things optimizes efficiency because Government doesn’t have to worry about profits, and can therefore focus on providing the most efficient and effective services to people.

A former bureaucrat at the Department of Health and Human Services (HHS) tells us that this is total [link to accurate visual metaphor]. From the (popup-riddled) Daily Caller:

In a resignation letter obtained by ScienceInsider, David Wright, director of the Office of Research Integrity (ORI) — which oversees and monitors possible research misconduct — offers a scathing rebuke of the unwieldy and inefficient bureaucracy that he dealt with for the two years he served in the position.

According to Wright, activities that in his capacity as an academic administrator that took a day or two, took weeks and months in the federal government.

He recalled an instance in which he could not get approval for a $35 cost to have cassette tapes converted into CDs. He eventually was able to get them converted in 20 minutes for free by a university. And another instance in which he “urgently needed to fill a vacancy,” but was told there was secret priority list. Sixteen months later, he wrote, the position was still unfilled.

He also recounts an occasion on which the HHS bureaucracy once evaluated the efficiency of its practices; and the results were so bad they decided to do what any business would do; retool its processes to make them more efficient and get rid of the dead weight.

No, just kidding, they buried the report and vowed never to do it again.

“On another occasion I asked your deputy why you didn’t conduct an evaluation by the Op-Divs of the immediate office administrative services to try to improve them,” he wrote. ”She responded that that had been tried a few years ago and the results were so negative that no further evaluations have been conducted.”

HHS is the agency progressive leftists think should be responsible for everybody’s health care.

No wonder they think Obamacare is a rousing success.

Obama’s daily lawlessness

On Wednesday, V noted how President Obama set aside his own Obamacare law and decreed a delay to the “individual mandate”. (The mandate that he previously told the Supreme Court was an absolutely essential part of Obamacare.)

Thursday’s example was Obama’s plan to decree overtime pay for some 10 million who had willingly been working without it, because they are salaried employees.

It’s not a good thing. First of all, anytime the government mandates pay increases, it costs real people their jobs. While some people might get more pay, others’ pay goes to part-time, or to zero. When Obama proposed his minimum wage hike last month, even the Congressional Budget Office (CBO) agreed that it would cost 500,000 jobs.

But the deeper problem is that, in Barack H. Obama, we have a President who increasingly abandons constitutional, legislative and democratic processes. Throughout his administration, in issue after issue, he has declared that the rules are now different because he says so. Whether it’s ripping off honest GM bondholders, Fast and Furious, hiding information about corrupt federal prosecutors, Obamacare or countless other issues, you never can tell when this President will suddenly decide on different rules.

With this overtime change, there is serious debate about whether the President has the legal authority to do it. Some say he doesn’t; some say he does. But that means his move is dubious. And however that might be – and I say, even worse – Obama’s move makes the government interfere, once again, in arrangements that freely consenting adults had agreed on. (Liberals may want government out of the bedroom, but boy, do they want government in everything, everyone and everywhere else.)

This is one more, little thread in the tapestry of America’s decline: we have become a nation ruled by “men, not laws.” And if you think that arbitrary government doesn’t make for an atmosphere of fear and uncertainty that stifles the economy, think again.

UPDATE: Allahpundit has video, as he puts it, of Obama “in 2008 promising to roll back Bush’s executive overreach because he was a law professor and knew the Constitution ‘n stuff.”.

Rep. Trey Gowdy gives an appropriate response.

Obama, not fixing his Debt Bomb

Last week, President Obama released his new budget proposal, which in February he said would be the end of austerity. First let’s ask, what is meant by “austerity”? As a policy, was it ever tried?

As discussed by myself and others, “austerity” means tax hikes (not spending cuts) in practice. Lefties hurl the word “austerity” to demonize the idea of spending cuts. But few of the countries which left-liberals accused of cruel austerity in the last few years cut their overall government spending levels; the majority continued to increase spending. So spending cuts can’t explain those countries’ poor economic results. What can? Well, most of them raised taxes.

Clearly, we should end (or reverse) the tax hikes. That would be a great “end of austerity”. But Obama’s meaning is that we should undertake spending increases; which, for reasons touched on below, probably mean deficit increases.

Before going into Obama’s proposal, let’s review the current state of the U.S. budget. (more…)

Why Do We Need Politicians to Oppose Bigotry?

Posted by V the K at 9:34 am - March 3, 2014.
Filed under: Big Government Follies

A legitimate question:

So why do many people assume that the only remedy for anything bad—including bads that involve no physical force—is state action, which always entails the threat of violence? Are we really so powerless to deal with repulsive but nonviolent conduct unless politicians act on our behalf?

Why should we give up our power and freedom to the State in order to deal with a few isolated cases of “people doing things we don’t agree with?”

I’ll give you an answer: Because leftists get off on using state power to punish people they don’t like.

Sochi-lism

They had years to plan, and billions of dollars to spend. They knew when the project had to be finished and how many prople were counting on everything being ready for them. Instead, they delivered a typical effed up socialist debacle. Nothing works properly, and Twitter is filled with stories of the nightmarish ordeals people are going through. Yet, the regime keeps insisting that everything is great, and instead of addressing the problems, attacks critics as anti-patriotic malcontents. They claimed they had embraced capitalism, but this botched project just shows that they are still socialists, and produce typical socialist results.

But enough about Obamacare, how about those Sochi hotel accommodations?

Also, Mr. Vice President Biden was off complaining about how NYC’s LaGuardia looks all shabby and third worldy. You mean it smells bad, the government is hopelessly corrupt, and there’s an appalling gap between the wealthy elite and the poor masses? Have you never been to New York City, Mr Biden? Anyway, didn’t you guys spend very close to a Trillion dollars on “Stimulus” spending your first term? Why the heck didn’t you fix the airport then instead of shelling out half a bil to Solyndra to build defective solar panels with whistling robots?

When the Only Tool You Have Is a Hammer…

Do the Democrats ever offer any “solutions” that don’t involve bigger, badder, more intrusive and more expensive Government?

Three items from the past three days:

P.S. Gene in PA wanted me to mention Global Warming. OK, so how about the fact that Houston, New Orleans, and the Gulf Coast of the USA are under a Winter Storm Watch? Yet Obama and his Environmentalist zealots in the EPA are pushing ahead with Draconian, job-killing regulations?

Republicans Pick a Really Stupid Time to Abandon Limited Government

So, Mitch McConnell and John Boehner (and Paul Ryan) have declared War on the Tea Party because they say that people concerned about Big Government represent a crazy, ‘whackobird’ fringe and supporting fiscal restraint and limited Government will lead to electoral oblivion because Big Government is, like, uber-popular (the New York Times says so and Rachel Maddow agrees) and what Americans really want is $63Billion in new spending, a replacement for Obamacare that still puts the Government in charge of health care, more NSA surveillance, and Amnesty.

According to Gallup, however, the ‘Whackobird’ fringe is now 72% of the population. i.e. 72% of Americans say Big Government is the biggest threat the USA faces.

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That’s a big fringe.

And yet John Boehner, after his victory in blowing up the Sequester, has now turned his sights on Amnesty. Because that’s what Big Business wants. By the way, Big Business, who the Republicans are jumping into bed with, was ranked as the Biggest Threat by 21% of Americans. The GOP establishment is going against 93% of the public.

The Stupid Party, indeed.

Is Obama dumb, or just his base?

Is President Obama ignorant of how the job market works, or does he cynically exploit the ignorance of his left-wing, “low information” voter base?

If economics has two consistent findings, they are:

  1. Rent control messes up a city’s rental market, driving rents *up* (and rental quality down) over time.
  2. Raising the minimum wage kills low-end jobs, the ones held by young and/or poor people.

You can prove (2) to yourself with a simple thought-experiment. Imagine we raised the federal minimum wage from its present $7.25/hour to, say, $25. Would McDonald’s or any other restaurant, large or small, be able to stay in business?

They might, if they adopt Applebee’s new “Waiter Terminator”.

The E La Carte Presto tablets – powered by Intel – will allow patrons to pay from their seats while also adding food and beverages to their existing orders…

The Presto tablets, which were developed at MIT, have been “ruggedized” to deal with the spills and rowdy children…

DineEquity said it might consider introducing the tablets at its IHOP restaurant chain as well. The company joins many others in the industry that have begun incorporating technology into the customer experience.

When government forces wages up, it forces businesses to kill jobs: either by the business dying, or by its replacing workers with technology (a.k.a. capital). The restaurant industry has technology waiting in the wings.

As if to defy that reality, last week Obama tweeted his base the following total falsehood:

Hence, my question. (more…)

Something funny happened around 2007/8…

Median household income, DC vs. America

DC – i.e., government employees – got richer compared to the rest of America. What also happened back then was a newly-Democrat Congress adding hundreds of billions to government spending, followed of course by President Obama and his 2009 “Porkulus”.

Via Zero Hedge, who suggests that Obama should maybe keep this in mind when he gives his speeches on inequality.

UPDATE (from Dan):  Here’s something to chew on, Jeff, the difference between the governing class and Americans may be considerably greater than this graph suggests.  Bear in mind the vast differences in income in the District itself with many blighted areas in the North- and Southeast quadrants of the city.  And if incomes there would be pulling down the overall average, some folks living in Northwest (and the gentrified areas around Capitol Hill) would be earning far more than this graph suggests.

Fairness ‘frayed’? Poor people trapped? Sorry Mr. Obama, but You Are The Problem

Current Yahoo! headine, Obama: Economic fairness ‘frayed’:

President Barack Obama prodded Congress to raise wages and secure the social safety net as he issued an overarching appeal Wednesday to correct inequalities that he said make it harder for a child in the United States to escape poverty. “That should offend all of us,” he declared. “We are a better country than this.”

Obama argued that the dream of upward economic mobility is breaking down and that the growing income gap is a “defining challenge of our time.”

“The basic bargain at the heart of our economy has frayed,” the president said…

This is an example of the Left’s classic tactic, “poison as food, poison as antidote”. First the Left creates/worsens problems with their dysfunctional policies; then they position themselves (or, even more dysfunctional left-wing policies) as the supposed solution.

In this case, President Obama’s own policies create/worsen the inequality he decries. As I’ve discussed in my “Recovery for the One Percent” series here, here, here and here.

For any lefties reading this, who need the reminder:

  • Raising the minimum wage costs people jobs.
  • Big Government denies opportunity to the working poor.
  • High government spending hurts the economy and stops new businesses from being formed, as do high regulation and taxes.
  • Quantitative Easing bails out (or subsidizes) the One Percent, at the expense of the poor and middle-class.

All policies increased, maintained or advocated by Your Obama.

To be clear, the problems didn’t start with Obama; but he has worsened them.

Math arrives in Detriot

Posted by Jeff (ILoveCapitalism) at 1:47 pm - December 3, 2013.
Filed under: Big Government Follies,Liberalism Run Amok

A judge has ruled that Detroit’s bankruptcy proceedings can go forward.

The landmark ruling ends more than four months of uncertainty over the fate of the case and sets the stage for a fierce clash over how to slash an estimated $18 billion in debt and long-term liabilities that have hampered Detroit…

[Judge] Rhodes — in a surprise decision this morning — also said he’ll allow pension cuts in Detroit’s bankruptcy…

Pension cuts will likely be large. I don’t think they’ll be 84% as some have suggested, but I could see them easily being 25-50%. And it will set a precedent for other cities (and perhaps States) doing the same thing.

The point is that a pension (or Social Security, for that matter) is just a hypothetical future promise. If the money doesn’t exist to pay yours when the time comes, then it just doesn’t exist. Plan accordingly, now.

The disaster that is Obamacare (ongoing)

My earlier post may have to become a series. As before, you may know the following already from news or other blogs, but it deserves to be acknowledged here at Gay Patriot.

UPDATES (late morning):