Please Be Patient

Due to the lingering effects of Hurricane Irene, there is still no power or internet access available to us.  WE are hopeful that services will be restored in the next day or so, at which point posts will resume.

In the meantime, we hope everyone is safe, and those in the northeast states are dry.


-Mason Dixon

Send Lawyers, Guns and Money...But Mostly Guns

While those of us on the east coast prepare for the hurricane, this article suggests that while we are stocking up on supplies we should probably get ready to add guns and ammo to the shopping list.  David DeGraw, in an article titled, Federal Reserve Policy + Extreme Weather = Revolution + World War III  suggests that data indicates that increased food prices come as a result of QE, and extreme weather conditions are directly linked to the outbreak of war.  

In summation, Ben Bernanke and the Fed’s economic central planners were clearly aware of the hostile climate and weather patterns when they engaged in QE2. The Fed’s infamous policy, as Isaid before, “deliberately threw gasoline all over those brush fires. QE2 was another economic napalm bomb from the global banking cartel.” They knew that they were deliberately attacking (sacrificing) tens of millions of people, but that was secondary to keeping their global Ponzi scheme going by pumping another $2.1 trillion into their fraudulent, insolvent banking system through both QE programs. This is why Ben Bernanke is guilty of crimes against humanity.

Take a quick look at the whole thing.  Then begin your internal debate of 9mm versus .45.

Beware of Warren Buffett

Warren Buffett took a break recently from advocating higher taxes on the wealthy, and decided to prop-up Bank of America.  All of this raises many questions about just what the F*$% is going on.  One of the richest men on the planet thinks that the wealthy should be paying more in taxes...income taxes, that is. Warren ignores the fact that real, down to earth 'Mericans like him who are lucky enough to be rich, are completely unaffected by higher income tax rates.  These guys ALREADY HAVE MORE MONEY THAN THEY CAN USE.  For example, Steve Jobs has an annual salary of $1.  ONE FREAKIN' DOLLAR!  You could tax these guys at 100% of everything they earn - income, capital gains, appreciation on their childhood baseball card collection - they will remain ludicrously wealthy.  Families that are at the low-end of the rich spectrum do not have that luxury; they are still busting their respective humps to get to the point where they are financially secure.  Raising their taxes does have an effect.

So, Buffett then makes a long-term investment of $5billion in BofA.  Exactly why is an 81-year-old making any long-term plans?  This guy doesn't need to check the expiration dates on milk before he buys a gallon.  Strange, no?

This is part of the subject of an article posted at Zero Hedge, wherein the author takes a few interesting stabs at Buffett. 

The truth of the matter is, as I and other have exposed these last several years, is that he essentially runs a financial services company.  When the system itself was threatened the status quo was threatened.  Buffett stepped in and became a government agent once he saw the writing on the wall.  He did not step up for America.  He did not step up for the people.  He stepped up for himself and his legacy.  He stepped up to save the status quo because he is the status quo.  All of this raises a very serious issue in America right now and one that needs to be dealt with in the next crisis (which has arrived) or we will never be able to recover into the world’s most vibrant and dynamic economy again.  A lot of people lament the lack of upward mobility in the U.S. right now and I share those sentiments.  However, equally important is downward mobility.  What makes the concept of America unique is not merely the concept that the poor can become rich but that the rich can become poor.  It is this second part that is the most dangerous to social cohesion when it disappears.

First of all, this $5 billion preferred investment by Uncle Warren in preferred stock is extremely bearish for the market, the economy and the financial system.  This is not an investment, it is political-economic strategy.  It tell us so many things that we probably already suspected.  It tells us that Bank of America did indeed need capital.  Even worse they probably need so much that they went to Uncle Warren for five big ones so that people would just look the other way and gain “confidence.”  This is how out to lunch these guys are.  They don’t understand that the root of the lack of confidence is that the people see a country devolving into a Banana Republic led by greedy oligarchs and politicians stealing everything in sight as the ship sinks.  So then they roll out the number one crony capitalist in America, tell us he is investing in Bank of America and expect that to lead to confidence!!  What a bunch of maniacs run this nation.  This is 1789 France folks as I have said many times before. Second, the fact that TPTB are resorting to Uncle Warren for everything now may mean the Fed is out of the game.  No one has confidence in the Fed to come save the day so they need the next thing.  That next thing is Uncle Warren.  Unfortunately it’s not working and it is not going to work.  You can see it in the market today.  People are waking up.  They are starting to see through the matrix.  Buffett is a fraud and a shill.  If you follow him it will be right over a cliff.

 The whole article is worth reading; I just wanted to give you a taste of it first.

More On Keynesian Thought

Over at The Burning Platform (H/T Zero Hedge), there is a rather interesting article about the failure of Keynesian economics.  It even has graphs so most people can keep up with it.  Anyway, it's well worth reading, although strict adherents to Keynes will probably not enjoy it very much, which is ok - the rest of us don't enjoy John Maynard very much!

Some excerpts:

I can reveal his plan today because the White House has already leaked the major aspects of his plan. He will call for an extension of the Social Security payroll tax cut of 2% for all working Americans. This was supposed to give a dramatic boost to GDP in 2011. Maybe it will work next time. He will demand that extended unemployment benefits be renewed. Somehow providing 99 weeks of unemployment benefits is supposed to create jobs. It’s done wonders thus far. He will propose some semblance of an infrastructure bank or tax cuts to spur infrastructure spending. It will include a proposal for training and education to help unemployed people switch careers. He will attempt to steal the thunder from the SUPER COMMITTEE of 12 by coming up with $2 trillion of budget savings by insisting the Lear jet flying rich fork over an extra $500 billion.

You may have noticed that followers of Keynesian dogma like Paul Krugman, Larry Summers, Brad Delong, Richard Koo, John Galbraith, every Democrat in Congress, and every liberal pundit and columnist have been shrieking about the Tea Party terrorists and their ghastly budget cuts that are destroying our economy. They contend the stock market is tanking and the economy is heading into recession due to the brutal austerity measures being imposed by the extremists in the Republican Party. There is just one small issue with their argument. It is completely false. It is a bold faced lie. This is 2011. The economy has been in freefall since January 1. No spending cuts have occurred. Nada!!! As the CBO chart below reveals, the horrendous slashing of government will amount to $21 billion in 2012 and $42 billion in 2013. Of course, those aren’t even cuts in spending. They are reductions in the projected increases in spending. Politicians must be very secure in the knowledge that Americans are completely ignorant when it comes to anything other than the details of Kim Kardashian’s wedding and who Snooki is banging on Jersey Shore.

 Obama has taken Keynesianism to a new level. Federal spending will total $10.8 trillion in Obama’s 1^stthree years, versus $8.4 trillion in the previous three years. Even a Harvard economist can figure out this is a 29% increase in Federal spending. What has it accomplished? We are back in recession, unemployment is rising, forty six million Americans are on food stamps, food and energy prices are soaring, and the middle class is being annihilated. The standard Keynesian response is we would have lost 3 million more jobs, we were saved from a 2^nd Great Depression and the stimulus was too little. It would have worked if it had just been twice as large.

The 2^nd Great Depression was not avoided, it was delayed. Our two decade long delusional credit boom could have been voluntarily abandoned in 2008. The banks at fault could have been liquidated in an orderly bankruptcy with stockholders and bondholders accepting the consequences of their foolishness. Unemployment would have soared to 12%, GDP would have collapsed, and the stock market would have fallen to 5,000. The bad debt would have been flushed from the system. Instead our Wall Street beholden leaders chose to save their banker friends, cover-up the bad debt, shift private debt to taxpayer debt, print trillions of new dollars in an effort to inflate away the debt, and implemented every wacky Keynesian stimulus idea Larry Summers could dream up.  These strokes of genius have failed miserably. Bernanke, Paulson, Geithner and Obama have set in motion a series of events that will ultimately lead to a catastrophic currency collapse. We have entered the 2^nd phase of the Greater Depression and there are no monetary or fiscal bullets left in the gun. Further expansion of debt will lead to a hyperinflationary collapse as the remaining confidence in the U.S. dollar is exhausted. We are one failed Treasury auction away from a currency crisis.

John Maynard Obama got everything he asked for in January 2009. He had both houses in Congress and did not need to consult Republicans to pass his Keynesian $862 billion porkulus bill. It seems that $252 billion, or 29% of the package was nothing more than transfer payments. Of course, according to Keynesians, the $252 billion should have had a multiplier effect when it was handed out. I think they were right. Obama was able to multiply the number of people on food stamps in January 2009 from 32 million to the current tally of 45.8 million. The monthly food stamp transfer payment has gone from $3.6 billion to $6.1 billion. Keynesians should be thrilled by this success story.

Obama’s Keynesian dream bill included:

• $1 billion for Amtrak, the federal railroad that hasn’t turned a profit in 40 years.

• $2 billion for child-care subsidies.

• $50 million for that great engine of job creation, the National Endowment for the Arts.

• $400 million for global-warming research.

• $2.4 billion for carbon-capture demonstration projects.

• $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

• $8 billion for renewable energy funding.

• $6 billion for mass transit that had a low or negative return on investment.

• $600 million more for the federal government to buy new cars. Uncle Sam already spends $3 billion a year on its fleet of 600,000 vehicles.

• Congress earmarked $7 billion for modernizing federal buildings and facilities.

• The Smithsonian received $150 million.

• The Department of Education got $66 billion, more than the entire Education Department spent a just 10 years ago. $6 billion of this subsidized university building projects.

Obama declared in December 2008 there were shovel ready projects across the land that would create immediate jobs. Too bad he didn’t tell the American public only $30 billion of the $862 billion mountain of pork was earmarked for highways and bridges. Obama declared his stimulus would create 3.5 million jobs, later changed to “create or save”. There were 144 million Americans employed in January 2009. Today, there are 139 million Americans employed. Obama gives the term “success story” a new meaning. The Keynesians had their chance and now they want a do-over. Sorry, that isn’t how it works in the real world. As Speaker Nancy Pelosi put it, “We won the election. We wrote the bill.” No truer words have ever been spoken.
As we know, that was only the beginning of our Keynesian debt nightmare. Let’s do some critical thinking and assess the results of Obama’s other Keynesian solutions:

• The Homebuyer Tax Credit cost taxpayers $27 billion or $43,000 per additional house sold. The Keynesians handed 3.9 million people $7,000 to do something they were going to do anyway. They lured first time home buyers into the market. Since the credit expired, median home prices have fallen $15,000 and continue to fall. This wonderful government program has created more underwater homeowners and did nothing to stabilize the housing market or home prices.

• Cash for Clunkers cost taxpayers $3 billion. An incremental 125,000 cars were sold at a cost of $24,000 per car. This Keynesian dream program lured more people into debt and warped the used car market by destroying used cars and driving up prices for poor people who couldn’t afford a new car. There were no carryover benefits except for government controlled union car makers.

• Obama’s HAMP program allocated $11 billion to supposedly allow 4 million homeowners to modify their mortgages, reduce their monthly mortgage payments and avoid foreclosure. HAMP has proven a colossal failure that has done more to harm than help debt-laden homeowners. It has achieved slightly more than 500,000 permanent modifications, 40% of which the Treasury expects to default. Far more borrowers have dropped out of the program than successfully achieved permanent loan modification. These borrowers, along with those who later default, will often be left with larger outstanding debt, worse credit scores, and less home equity.

• Obama even handed $30 billion to the largest homebuilder corporations in the country, run by billionaires like Bob Toll, by allowing them to carry back their losses and wipe out tax liabilities in prior years. This did wonders for the housing market. It did stimulate bonus payments for the CEOs of these companies.

• Billions of tax revenue was lost by handing out $1,500 tax credits for people to buy new windows, doors, and appliances they were going to buy anyway. We are still waiting for that multiplier effect.

The usual suspects are now declaring that we can’t make the same mistakes FDR made in 1937 resulting in a dramatic downturn in 1938. As usual, the Keynesian storyline about the Great Depression is false.

I know it appears as though I included all of the article, but I promise you I didn't.  Please do yourself a favor and click over there and read the whole thing.  You'll come away smarter...or your money back.

Time To Stock Up On Guns & Ammo

There are a lot of aspects of the economy that I don't pretend to understand.  However, I read this interview and now I'm too scared to leave the comfort and safety of my bathroom.  Below are a few choice excerpts:

With the markets fluctuating so wildly, the Dow going up and down hundreds of points per day, that’s very likely to spook the government, investors, business managers, and consumers even more than they already are. Normally I don’t pay much attention to consumer confidence; it’s an emotional state, and emotions can change in a New-York second. But at this point the economy rests on nothing more substantial than confidence. It’s a confidence game. And confidence can blow away like a pile of feathers in a hurricane.
L: So what we’re looking at is not just a bump in the road. It’s going to change priorities and marching orders for market participants – and for those who interfere in the markets in various ways.
Doug: Yes. It’s the kind of thing that accelerates a negative spiral, in good part because everybody wants the government to “do something,” in the idiotic belief that it can improve things by doing more. Actually it can only help by doing less.
L: So… the economy slows more. Why can’t the government reanimate the corpse one more time, turning up the juice on the stimulus heart-shock paddles?
Doug: They’ve already created trillions more currency units. Most of these are currently sitting in banks rather than circulating. That’s partly because people are afraid to borrow and banks are afraid to lend, but also because the Fed is paying banks interest to keep what are considered to be excess reserves locked up. So these trillions of dollars that were created to bail the banks out are sitting there, but they’re not going to sit there forever. Once those dollars start circulating in the economy, prices will rise rapidly.
The other way for prices to really explode would be for the foreigners holding some six or seven trillion hot-potato dollars to start dumping them. With the U.S. government clearly unable to deal with its debt and the consequent credit rating downgrade – which was both inadequate and long overdue – those foreigners are getting pretty nervous holding dollars. Almost any sort of financial calamity could spook some central bank into exiting its dollar position wholesale. And once one of them starts, the race will be on, because no one is going to want to be left holding the bag.
These are two time bombs that are ticking away right now – the trillions of dollars outside the U.S. that could come pouring back in, and the trillions of dollars inside the U.S. that were created to paper over the leading edge of the storm. Either of those things could bring on the end of the dollar as we knew it, and both may well happen at once.
L: Okay … But the state has been very good at convincing people to pay no attention to the man behind the curtain. If the markets settle down, why can’t people go back to imagining that everything’s fine?
Doug: I’m not sure that many people really ever believed there was a recovery under way. Wall Street acted like there was – but only somewhat, since banks never started lending again. But unemployment has remained high; it’d actually be about twice the official 9% level, if it was calculated the same way it was 30 years ago. And outside of the price collapse of certain asset classes – like real estate – the cost of living has increased greatly for most people; the calculation of the government’s CPI is as corrupt as its unemployment numbers. I think it’s a mistake to talk about a double dip in the economy; we entered the Greater depression in 2007 and are still in it. A “jobless recovery” is not a recovery. The only thing that’s recovered is the stock market, to some degree. Aside from government hocus-pocus, the mirage of corporate earnings, and foolish investors wanting to believe it was safe to get back in the water, things have not gotten better. And they are about to get much worse.
L: That may be so, but the government, the press, and corporate America have all been talking about a recovery. With the Fed promising easy money, if the markets calm down, couldn’t the illusion of recovery be reestablished?
Doug: I don’t think so. The economy isn’t going to stay in the eye of the storm for much longer. The stab of panic we saw last week gave lie to the emperor’s new recovery clothes. It’s not just the losses on the stock market, but gold hitting significant new all-time highs in nominal terms, and Bernanke saying that the Fed would hold interest rates close to zero for another two years. That’s huge – and a huge mistake. It tells me that Bernanke has truly panicked. The impact this will have on the dollar cannot be overstated; it’s a guaranteed disaster. It assures that people will do all sorts of things they would not do without that artificially easy money.
L: Okay, but if they go into debt to buy houses and cars, they’ll create jobs and there will be more appearance of recovery, won’t there?
Doug: That’d just be digging the hole deeper at this point. What needs to be done is to let the market raise interest rates, to encourage savings – the accumulation of the capital needed to start moving forward on a solid basis. Instead of encouraging people to work, spend less than they make, and save the difference, these low interest rates encourage profligacy. They encourage people to liquidate savings and live above their means. As usual, the government isn’t just doing the wrong thing, it’s doing the exact opposite of the right thing.
L: Because...
Doug: Because of the false belief that printing money stimulates the economy. The artificially depressed interest rates of today will result in very high inflation and very high interest rates in the near future. A healthy economy gets naturally low interest rates as a result of a lot of savings, a lot of capital creation. A healthy economy has stable interest rates that relate to the amount of new wealth being created, typically just above the natural rate of inflation that results from real money – gold – being mined out of the ground. Artificially low interest rates stimulate malinvestment.

The Fed is also keeping rates low because of the government’s massive debt problem. The U.S. is already running trillion-dollar deficits – if interest rates go up, say, to 12% like back in the ‘70s, that would add another trillion to the deficit right there. Financing a $16 trillion debt at 12%, rather than 2%, equals another $1.6 trillion of spending – just for interest.
This really means they have no choice. The situation is completely out of control – the U.S. financial house of cards is irredeemable at this point, even with interest rates at close to zero. The whole financial structure is close to collapse, and that’s why I think we’re exiting the eye of the storm.
L: The Titanic has been struck, but Captain Obama just doesn’t yet realize how badly?
Doug: Exactly. And – adding insult to injury – not only are they doing the opposite of the right thing, they are actively punishing people who did the right things, who worked hard and saved. Pensioners living on fixed incomes are being forced to reach for higher and higher yields, which means they are being forced to put their nest eggs into riskier and riskier investments. This guarantees that the pensioners and the savers will be wiped out.
L: Unless they put their savings into gold.
Doug: Sure, but nobody but crazy goldbugs even thinks about that. And it gets worse: The current course guarantees the total destruction of the U.S. dollar. Again, I cannot emphasize enough how serious this is. People all around the world save in dollars. If the dollar is destroyed, it won’t just be Americans who’re hurt, it will be all the hard-working people around the world who’ve struggled to scrimp and save and put money away for future needs. All these people who were wise and frugal, they are going to be wiped out. They are going to be left with absolutely nothing. This is criminal – it’s the stuff revolutions are made of. And that’s exactly what I expect we’ll see plenty of, all around the globe.
L: Seems so clear – what could they possibly be thinking?
Doug: Perhaps Bernanke’s making the same mistake people with maxed-out credit cards make, when they think hyperinflation will wipe out their debts. They forget how nasty, brutish, and short life can be in a society in a hyperinflationary collapse. And think about it: What happens if you wipe out these debts? Who are the debtors? They are the most profligate people in society. So these artificially low interest rates reward the most irresponsible and punish the most responsible people in society.

Gallimaufry Time!

I know things have been a bit slow over here in our little tube on the interwebs.  I'd like to be able to blame end-of-summer vacations, good fishing days, pennant races, and the innumerable tasks associated with preparing for the arrival of Mason, Jr...but we all know that it's really just Bush's fault, right?  The last I heard, it was perfectly acceptable to blame anything and everything on the guy who was left the White house nearly three years ago.  Anyway, I digress...but that is actually the point of this post.  With so much going on and so little to actually write about, let's hit it all...let's have a GALLIMAUFRY!!! (apologies to Ken Tremendous and the gang at Fire Joe Morgan)

Unemployment rate has doubled since 2007, and that doesn't take into account the folks who have simply stopped looking for jobs.  We just brought the nation to the brink of something or other in a debt ceiling crisis - but no worries, we have a hyper-partisan committee looking into budget solutions that will be chock-full of proposals that will horrify the other party into a virtual coma.  Where's Obama?  On vacation, of course. But it's ok, because he has explained a few things.  Aside from announcing that he is just weeks away from unveiling his new plan for fixing the economy, he has also told us that he fixed the first recession, or rather he fixed the economy and ended the first recession and that there will be no 2nd or double-dip recession.  Pay no attention to the economists that are all telling us that a double-dip is inevitable, or the signs from the Fed that suggest that nothing will improve for a couple of years (so let's keep the free money coming).  Do pay attention to the economists who say that the recession ended...but ignore the ones who try to tell you that the recession ended in June of 2009.

I know, this all sounds terribly confusing, which is why I recommend getting a teleprompter.  Everything makes sense and sounds good when you read it off a teleprompter.  Here's the key stuff to remember: Obama "fixed" the economy and ended the recession within 5 months of taking office by borrowing a ton of money from China and increasing our national debt.  He did other stuff, too, but let's keep it simple.  Then, no one got their jobs back and no one hired anyone new.  This lasted for...well, it's still going on.  Then in March of 2011, an earthquake and tsunami stuck Japan, and our economy was dealt a devastating blow, which combined with the totally foreseen collapse of the Greek economy in a perverse conspiracy that made Obama sad because it then appeared that he did not know anything about economics.  Charles Krauthammer wrote a nice article about this on Friday.  You should read it HERE.

GALLIMAUFRY!!!

MSNBC has breaking news that Social Security will be out of money by 2017.  Of course, MSNBC skews the story to be about the perceived backlog of cases.  They do, however, report that last year SSA paid about $1.4 BILLION in over-payments.  Perhaps someone can explain how it is that Social Security will run out of money when we just found $1.2 TRILLION in secret zero-interest loans were made to banks (which have yet to pay it back!).  Seriously - how can we say that a bank is too big to fail, but somehow the SSA (which we have all been paying into via FICA taxes) is in danger of becoming insolvent?  This is a great example of how the government is no better with money than your drunk uncle is.

GALLIMAUFRY!!

Note to Rick Santorum: We know you are a dumb person, but exactly what did you hope to accomplish by calling Maxine Waters "vile?"  Oh...you were trying to make the point that the media employs a double standard for jumping on what republicans say versus what democrats say?  Everyone knows this, but let us know how that works out for you.  How is that you are still a candidate and Pawlenty has packed it in?

GALLIMAUFRY!

Via Reuters: (H/T Zero Hedge)

Goldman Sachs Chief Executive Lloyd Blankfein has hired high-profile Washington defense attorney Reid Weingarten, according to a government source, as the Justice Department continues to investigate the bank.
Blankfein, 56, is in his sixth year at the helm of the largest U.S. investment bank, which has spent two years fending off accusations of conflicts of interest and fraud.
The move to retain Weingarten comes as investigations of Goldman and its role in the 2007-2009 financial crisis continue.
The news spooked already jittery investors. Goldman shares fell sharply in the final minutes of regular trading after Reuters reporting the hiring, finishing down 4.7 percent at $106.51, their lowest level since March 2009.
They slipped further in after-hours trade to $105.45.
The Senate's Permanent Subcommittee on Investigations (PSI) in April released a scathing report that criticized Goldman for "exploiting" clients by unloading subprime loan exposure onto unsuspecting clients in 2006 and 2007, and concluded that its top executives misled Congress during testimony in 2010.
Goldman has said it disagreed with many of the report's conclusions, but took seriously the issues addressed. The Justice Department launched its investigation in late April.
On Monday, Goldman said: "As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the PSI report hired counsel at the outset."
Blankfein has not been charged in any civil or criminal case.
"Why do you bring in someone like that?" said the source, who was not authorized to speak publicly, about Weingarten. "It says one thing: that they're taking it seriously."

This will be well worth watching.  I think I'll start a GoldmanSachs Indictment Watch.

Which Is Better?

Over at National Review, Jim Geraghty has posted a very interesting piece contrasting the differences in approaches and results between the Democrat Gov. of MD and the Republican Gov. of VA.

It's a short one, so I'll post it in it's entirety here: (H/T: The Mysterious Stranger)

A Tale of Two Governors, Two States, and Two Parties This morning the Republican Governors Association is chuckling over the newest sharp contrast between their chairman and the chairman of the Democratic Governors Association (and governor of a neighboring state). Just days after Virginia governor Bob McDonnell announced a $544 million surplus, Maryland governor Martin O’Malley told county leaders Saturday that Maryland may need toincrease taxes to solve a $1 billion budget gap next year. What makes the contrast even more striking is the fact that McDonnell previously balanced an inherited $4.2 billion budget deficit that Gov. Tim Kaine had said could only be closed with a $2 billion tax increase, while O’Malley has already signed the largest tax increase in Maryland history during his first term. Both states benefit from the hiring spree and rare layoffs in the federal government, but the unemployment rate in Virginia is 6.1 percent, while the unemployment rate in Maryland is 7.2 percent.

Obama's Econ 101 Grades

A Picture says 1000 words.  This one only needs to say one: FAIL

New Development In Black Panther Case

As many of you know, the DOJ declined to prosecute members of the Black Panther Party for voter intimidation stemming from the 2008 elections.  Judicial Watch filed a FOIA request for documents related to that decision, which the DOJ has rigorously resisted.

Last week a Federal Judge ruled against the DOJ on it's claim that the documents being sought were protected by the attorney work-product doctrine.

Breitbart's BIGGOVERNMENT website has the story.  (Via Lucianne)

He Has A Plan

Stop the presses!  The President has a plan...a PLAN! 

The AP is reporting that Obama is preparing to give a speech that will outline his jobs plan, as well as a plan to get the economy going, and, if that weren't enough, a plan to reduce the national debt.

This news is, well, startling.  Of course, we can't get too excited today, because he is going to finish his vacation first, and give the speech after Labor Day...which is 2 and a half weeks from now.  I suppose he has to rest.  He probably has been very busy learning about how the economy works, how taxes influence a host of corporate decisions, including hiring, operating the printing lever at the Treasury.  Perhaps he wants to rest up and be fresh for when he gives the speech reads the teleprompter.  Maybe TOTUS needs a break...

A cynical person might point out that America has been struggling with high unemployment for a few years; that we just had a massive showdown that took us to the 11th hour on a debt-ceiling "crisis"; that the US economy has slowed to a crawl over the past 2+ years, and that Obama has never put anything even close to resembling a reasonable plan forward. (Reminder: his proposed budget failed to garner a single vote in the Senate, and has been roundly dismissed as laughable.).  Most reasonable people would find themselves in total agreement with that cynical person. 

So, to recap, Obama has not previously outlined any reasonable plan regarding budgets, employment (or lack thereof) or national debt.  He has displayed an affinity for history lessons, higher taxes, increased borrowing, higher spending and demagoguery.  He brought so little to the table during the debt ceiling crisis that the other players simply worked around him and his ego.  He NOW has a plan, but his vacation is more important than telling us that plan, so all of the unemployed workers will have to wait about three more weeks before they learn how he intends to get them back in the work force.

I'm a cynic, so I believe that he wants to be able to enjoy his vacation without hearing his plan being mocked by everyone for how ridiculous it is.  We know how thin-skinned this guy is. 

We have seen pictures of Putin's election campaign in recent weeks where he went diving and "recovered" ancient artifacts.  I'm dreading the release of photos of Obama wearing his jeans and sandals, licking ice cream or looking like a complete dork on his 10-speed with a bike helmet.  Go throw a football, or build something or clear some brush.  I know we're gonna end up with a picture of him dropping a Frisbee...

Down With Keynesian Thought

Paul Roderick Gregory has written a wonderful article over at Forbes.com.  It's called "Tea Party Understands Economics Better than Obama or Bill Maher."  It is a great starting point for what I believe to be the most important corner that needs to be turned in understanding economics: debunking Keynes.

The appeal of Keynesian economics is its simple logic. If government spending for goods and services is part of GDP, then any increase in government spending must raise GDP.
As President Obama explained in a town hall meeting on Feb. 8, 2009:
“Republicans say this is not a stimulus bill but a spending bill. What do you think a stimulus is? That’s the whole point.” (Laughter from the crowd).
Keynesian economics is easy, even for stupid people. More thought and analysis are required to understand why it has not worked as it is supposed to. Keynesian skeptics must show that increases in government spending cause other components of GDP, such as consumption, investment, or exports, to fall. Such countervailing forces require more nuanced and sophisticated thought. They are not for the mentally lazy or those seeking simple answers.

Liberal commentators and comedians appear to accept Keynesian economics as such an evident truth that non-believers must be stupid. Keynesian economics has become a liberal dogma, not subject to challenge by reasonable people.
Consider comedian Bill Maher’s quip to a former Obama advisor on Aug. 6, 2011:
“Keynesian economists and climate scientists both know real things, but the stupid people who don’t know things get an equal vote. Isn’t that frustrating?” (Laughter from the audience.)
Liberals target the Tea Party as their favorite nominee for the “stupidity” prize. Tea Party members are not only dunces. They are irresponsible hostage takers who do not care if they bring the country down with them.
Here is a shocker for Obama, Maher and Tea-Party haters: Since the Nobel Prize in economics was established, seven Nobel Prizes have been awarded to economists who cast serious doubt on Keynesian economics. Not one Nobel Prize has been awarded to an economist who advanced the Keynesian agenda. New York Times liberal columnist, Paul Krugman, won his Nobel Prize for trade theory, not for macroeconomics.

Perhaps the president simply does not want to hear from those who disagree with the course he has chosen. It could be that the president’s goal is not recovery and economic growth but growing the size and scope of government to achieve his goal of a redistributive state.

Sadly, Gregory's last paragraph is what I consider to be the truth.

Obamacare Unconstitutional

So says the  Court of Appeals for the 11th Circuit.  You can read about it here and read the decision here.

The issue that the decision turned on was, of course, the individual mandate.  The decision would allow the rest of the statute to stand, but would strike the Mandate.

The individual mandate, however, can be severed from the remainder of theAct’s myriad reforms. The presumption of severability is rooted in notions of  judicial restraint and respect for the separation of powers in our constitutionalsystem. The Act’s other provisions remain legally operative after the mandate’sexcision, and the high burden needed under Supreme Court precedent to rebut the presumption of severability has not been met.

 Ilya Somin at Volokh Conspiracy notes that  Judge Hull, representing half of the majority in a 2-1 decision, is a Clinton appointee, and is the first Democrat appointee to rule against the Mandate's constitutionality.

So we have the 6th Circuit upholding Obamacare balanced by the 11th Circuit declaring the individual mandate unconstitutional.  We are still waiting to hear from the 4th Circuit, but I think it's clear that this case is heading to the Supreme Court - if there was ever any doubt of that. 

What this means to us is that we continue to have massive legislation that encompasses something like one sixth of what is left of our economy hung up in limbo.  Employers still do not know which way the decision is going to fall, which means that paralysis pervades the ability to make large-scale hiring decisions.  Look at the damage caused by uncertainty...and now imagine the landscape if this law survives judicial scrutiny and is not repealed.

Clueless and Irrelevant

Krauthammer does it again!  Watch this clip (via RealClearPolitics) of Krauthammer describing Obama's economic acumen.

What really needs to be at the forefront of everyone's minds right now is contained in this bit.  Our nation has run up nearly 4 trillion dollars in debt over the first 3 years of Obama's presidency.

Further, it was only when faced with a debt ceiling crisis that Obama discovered the need to start talking about debt reduction, though he only does so in the abstract. 

It is beginning to appear that everyone has taken notice that this President is not a leader and if he has a vision he seems to be wary of sharing it with anyone.  NO vision, no plan, not even a basic framework of an idea, or an outline of goals has made it out of the White House.  It is no wonder that the House Speaker and Senate Leaders have resorted to leaving him out of the discussion. 

Are you $4 Trillion better off than you were four years ago?

$4,000,000,000,000.00 !!!!!

Global Warming News

2 articles that have  - unsurprisingly - received very little attention in the news relating to new findings on global warming. (Hat Tip to: The Mysterious Stranger)

The first comes from the Washington Examiner and addresses the impact of a reduction in the number of solar spots on the sun.  Specifically, it looks at the potential for a period of global cooling and how such evidence should lead the EPA to maintain current emission standards.

Despite increasing evidence that "global warming" climate change is not the unified scientific theory it has been promoted to be, vested interests continue to push for stringent limits on carbon dioxide emissions.Certain investment banks and trading houses that stand to make billions on so-called "carbon credits," and the environmental sociologists who have as a stated purpose to change our way of life, are a powerful bloc.In the Obama administration, this cabal has a willing "big stick" in the form the U.S. Environmental Protection Agency, which has enacted draconian measures that will, by President Obama's admission, make energy costs "skyrocket."The subject of intense litigation, the EPA regulations were enacted this year without congressional approval as required by the Clean Air Act and other laws. Estimates put the economic damage of these regulations at $1 trillion over the next 20 years, with a loss of between four and 10 million jobs.Ironically, the current rush by global warming advocates to uncouple mounting evidence of global cooling from the global warming regime is not the first time they've backpedaled.As referenced in ongoing litigation, the EPA admitted that generally applicable regulations would lead to "absurd" results, leading the agency to create a so-called "Tailoring Rule."For example, global warming alarmists admit by their own calculations that reducing carbon emissions among a sample of large U.S. "emitters" to EPA-required levels might reduce the surface temperature by .00071 degree Celsius -- or 70 times lower than what is detectable.

 The second article is about NASA's satellites' data indicating that far more heat is allowed to escape the earth's atmosphere then previously believed.  Why is this important?  Because global warming alarmists have long relied on computer models to predict the effects of warming.  These models were constructed on a theory that carbon dioxide emissions building up in the atmosphere would trap heat and result in warmer temperatures.

The new NASA Terra satellite data are consistent with long-term NOAA and NASA data indicating atmospheric humidity and cirrus clouds are not increasing in the manner predicted by alarmist computer models. The Terra satellite data also support data collected by NASA's ERBS satellite showing far more longwave radiation (and thus, heat) escaped into space between 1985 and 1999 than alarmist computer models had predicted. Together, the NASA ERBS and Terra satellite data show that for 25 years and counting, carbon dioxide emissions have directly and indirectly trapped far less heat than alarmist computer models have predicted.
In short, the central premise of alarmist global warming theory is that carbon dioxide emissions should be directly and indirectly trapping a certain amount of heat in the earth's atmosphere and preventing it from escaping into space. Real-world measurements, however, show far less heat is being trapped in the earth's atmosphere than the alarmist computer models predict, and far more heat is escaping into space than the alarmist computer models predict.
When objective NASA satellite data, reported in a peer-reviewed scientific journal, show a "huge discrepancy" between alarmist climate models and real-world facts, climate scientists, the media and our elected officials would be wise to take notice. Whether or not they do so will tell us a great deal about how honest the purveyors of global warming alarmism truly are.

I added the emphasis to the last sentence of the quote.  Sadly, the fact that these two articles have not seen wider publication and reference is all too evident that the media has a close-minded approach to the issue. 

The Tea Party Terrorists

The recent tone that the left has taken towards the Tea Party is distressing, but it belies a deep realization on their part.

During the debt ceiling debate, Democrats started referring to Republicans who were allied with the Tea Party as radicals, extremists, even terrorists.  Of course, this is the same party that decided to refer to the actual terrorists as freedom fighters, so who the hell knows what they are really talking about.  Oh, wait, we do know what Willis is talkin' 'bout: scare voters away from the Tea Party.

We have known that the debt ceiling was getting ready to boil over and burn us for a long time.  When the Dems controlled the Executive and Legislative branches, it didn't matter - they were drafting major spending bills in secret, passing them through dubious methods and jamming all sorts of garbage through, with nary a care towards the economy.  In fact, Harry Reid and Co. haven't passed a Budget in over 2 years, so that probably illustrates just how much thought and attention they put towards their fiscal responsibilities.  Anyway, the left would have you believe that a handful of Tea Partiers were responsible for bringing the country to the brink of...well, let's detour for a moment before finishing that thought.

They told us that Aug 3 was the deadline for DEFAULT, until we learned that it wasn't.  Turns out that DEFAULT is based on decisions by the Executive to not pay our debts, and that we certainly had enough money and cash flow to pay our creditors...we just wouldn't be able to pay our creditors AND  meet our domestic expenditures.  Gee, seems like that might not have been such a problem if we had implemented a budget.  Then, Timmy "Why Do I still Have A Job?" Geithner turned from his gloom and doom tour of the networks to explain that what we are really trying to avoid is a downgrade in our credit rating, before assuring us that there is NO CHANCE that our credit rating would be downgraded.  The White House was telling Wall Street that we would never fail to meet our debts and to not worry about the US defaulting.  So, to recap: we weren't going to default and therefore there was no chance that our credit rating would be adversely impacted.  Do we still have stocks?  I mean the old-fashion kind where you clamp a guy between some boards by his neck and hands so that the community can come down and laugh at him and throw things at him?  I think Tim Geithner deserves to spend a loooong time in one of those.

Returning from our detour...it seems we were brought to the brink of nothing, or to the brink of the inevitable.  Either way, it is ludicrous to suggest that a handful of congressmen  - most of whom are freshmen - got us to that point last weekend.  It was probably the rest of Congress.

But now we have the left calling these folks terrorists, and MSNBC's current in-house dolt, Martin Bashir,  (whom you may recall suggested that Palin be arrested for violating US Flag Code) recently brought a psychologist who is an expert on addiction onto his show to discuss the collective psychology of the Tea Partiers in Congress.  This was his learned contribution to the meme that the Tea Party is chock full of crazies.  Meanwhile, Congressman Wu remains at large, and I must have missed the show when Anthony Weiner was psychoanalyzed.

All of this rhetoric appears to be ineffective in rehabilitating support for the President.  Obama's numbers continue to founder - I suspect that they probably won't go much lower, but it doesn't matter because he has lost the middle/independents.  Instead this talk merely shows that the left is out of ideas on how to counter the Tea Party.  By resorting to the accusation that people are against the President solely out of racial bias is them scraping the bottom of the barrel.  How do you win back voters who are dissatisfied with your brand of leadership and your vision (more accurately, people who perceive a lack of leadership and vision) when you dismiss them broadly as racists?  I guess we'll see next November.

The attempt to paint the Tea Party as terrorists seems to be failing.  The only people left in that church is the choir.  I think that the newest MSNBC commercial for Ed Schultz' show tells it best; the ad shows Ed sitting at the counter in a diner trying to sound reasonable about things.  The various camera angles show that Ed is alone in the diner, talking either to himself or presumably to the poor bastard stuck being the counter who is his captive audience.  His words are reaching nobody.

Debt and Taxes

Does it really better that the US' credit rating has been downgraded?  On one level, of course it does.  But as far as truly practical reasons, it might not really  matter.

China is by far the biggest holder of US debt.  More importantly, China has been the only nation (read: lender) that has significantly increased the amount it has given to the US over the past year - the US has borrowed from China about $250 BILLION between May 2010 and May 2011.  No other nation even comes close.

So, China is, in effect, the only bank in town.  China doesn't need references from our neighbors and relatives to vouch for our credit-worthiness; China knows how much we make and how many kids we have to feed.  Track records and good intentions don't mean anything when China can do the math and knows that America has finally reached the tipping point.

How does a debtor show his/her potential creditors that despite having a negative debt to earning ratio, he/she is a reasonable credit risk?  Again, a track record of paying your bills doesn't matter much when you owe more than you earn.  I submit that the answer is to show the creditor that you are making changes to your lifestyle, that you are tightening your belt a bit.  I don't think you get there by insisting that your boss will give you a raise next year.

Harry Reid continues to claim that the answer is a "balanced approach" that includes raising taxes revenues.  This is garbage, but I hope he takes time every day for the next 14 months to stand in front of a microphone and tell voters that he wants to raise taxes.  Raising taxes is dumb for a number of reasons.  First of all, we are in the throes of a recession, and you don't raise taxes during a recession.  Second, Bernanke is gutting the value of the dollar, so raising taxes lessons the amount of reduced-value dollars families have to spend, which will immediately impact the ability for families to save money and secondarily reduces the ability for people to purchase goods - starting with luxury items and moving on to necessities.  When consumer spending falls, retailers and manufacturers start laying people off.  That increases unemployment, which , aside from hurting an already fragile and damaged economy, reduces the amount of revenue taxes the government can collect to supposedly pay China off before it breaks our collective leg.

More importantly, signaling to our creditors that our national answer is to squeeze the workers for more taxes does nothing more than show that we see the problem but don't understand it.  To get our deficit under control in the semi-near future we need to cut spending.  Period.  Raising taxes gives a government that has already proven itself to be fiscally incompetent more money.  That seems dumb.  Would you teach your spendthrift daughter financial responsibility by giving her cash to pay off her credit cards, or would you also take the cards away from her and put her on some kind of allowance - new shoes be damned?  It's the difference between a bailout and a correction.  Harry Reid is demanding that wealthy people bail America out, and that they ask not what their country can do for them.  But we know how that will turn out, right?  I mean, we have already given the government a lot of money in taxes, and the government has borrowed yet more and spent a lot of it unwisely.  Why on earth would we or should we give them more?

What Harry Reid proposes is that the wealthy and corporations bail Washington out. He wants the money to be able to show that we are "getting serious" about paying our debt, but he doesn't want to have to cut any spending because that might cost him votes.  So, he needs to bailed out politically and turns to the people he rails against the most.  It would be polite if he would use the word "please" before trying to help himself to more money.

If a downgraded credit rating means that it is more expensive for America to borrow money, can't that become a good thing?  Make living within our means more attractive than going into debt.  Cut government spending, re-write the tax code with fewer exemptions and lower rates so that companies can put that money into new hires and increase the ranks of working people, which increases the size of the tax base which in turn increases the revenue that government collects. In short, let America work.

Pay No Attention

Captain Oblivious believes that the economy is growing and there is no reason to fear a double-dip recession. Also, if for some reason people are afraid that the stage is set for a recession, it is important to be clear on one thing and one thing only: it won't be Obama's fault.  See, aside from inheriting a mess from his predecessor (who somehow was actually some kind of god-emperor who caused all manner of suffering despite Congress being controlled by the Dem's for the last portion of his term reign), Obama has also suffered the misfortune of numerous natural disasters (no doubt caused by his predecessor out of spite and racism) that have thwarted his visionary economic recovery plan.

Yes, there is no fear of a double-dip recession.  Unless you talk to any of the last three directors of the Fed's monetary affairs committee, who put the odds of a recession between 20% and 40%.

Unemployment is up, hiring is down, manufacturing is down, inflation is on the rise.  Where exactly are the signs that our economy is turning around?

Oh, right - the lavish birthday party/fund raiser Obama is throwing himself.

QE3

It's coming.  Don't say you weren't warned.

I am off to sell all of my stocks and invest in ammunition, beef jerky and fire extinguishers.

You Say It's Your Birthday!

As the ship sinks, the band plays on.  Captain Oblivious, after railing against millionaires and billionaires during the debt ceiling debates tantrums and demanding that the wealthy pay even more of their fair share, is celebrating his 50th birthday in grand fashion.  Really grand fashion, it turns out.  Of course, it's not just a birthday party...it's a fundraiser!  Tickets to the event will cost around $40,000!  I bet a lot of the people who will pay $40K are also owners of private jets or run corporations or even run/own corporations that own private jets.

what is not clear is whether anyone who ponies up the $40K will then get to claim that they have erased their personal share of the national debt.

would a balanced approach to the debt crisis include asking wealthy people to voluntarily donate money to the government for the express purpose of paying off the national debt?  Do any wealthy people give extra money to the government on the belief that the government needs it more than they do, or that the government will find a better and more worthwhile way to spend that money than the individual could?  There is no law prohibiting the voluntary payment of extra taxes.  Finally, when does the government's revenue constitute a windfall?

I just hope that nobody serves Obama peas on his birthday...although the old line, "It's my party and i'll cry if I want to" works on just so many levels these days.

Photo Of The Day

Wishful Thinking

Obama today:

"In the last few months, the economy has had to absorb an earthquake in Japan, the economic head winds coming from Europe, the Arab Spring and the rise in oil prices, all of which have been very challenging for the recovery. But these are things we couldn't control. Our economy didn't need Washington to come along with a manufactured crisis to make things worse. That was in our hands. It's pretty likely that the uncertainty surrounding the raising of the debt ceiling for both businesses and consumers has been unsettling and just one more impediment to the full recovery that we need and it's something we could have avoided entirely. So, voters may have chosen divided government but they sure didn't vote for dysfunctional government. They want us to solve problems, they want us to get this economy growing and adding jobs,"

I was almost sure that he would then utter the words: "which is why I have chosen not to seek re-election."

Good to see that Captain Obvious (or Captain Oblivious) hasn't missed a step from his lecture series.