Monday, November 26, 2012

Economics, Politics, and War

Politics is an extension of economics by other means.  War is an extension of politics by other means.  Therefore, failed economic policies (lack of economic freedom and free markets) lead to politics.  Furthermore, failed political strategies (disregarding the laws, even supreme law, that leaders swear to protect when accepting a political position) unfortunately has the potential to lead us down a dangerous path, as Thomas Sowell wrote in 2007 (Sowell does NOT advocate this - and neither do we - however he merely states that our current path is a dangerous one).

"When I see the worsening degeneracy in our politicians, our media, our educators, and our intelligentsia, I can’t help wondering if the day may yet come when the only thing that can save this country is a military coup."

Reasons Not to Watch Fox News

Fox News is "Fair and Balanced" - which is why you need not watch them.  There is absolutely no reason to listen to those that defend socialist policies.

1.  Juan Williams
2.  Alan Colmes
3.  Bob Beckel
4.  Heraldo Rivera
5.  Shepard Smith
6.  Marc Lamont Hill
7.  Kirsten Powers
8.  Leslie Marshall
9.  Greta Van Sustren
10.  Bill O'Reilly (even though he is better than most, he is an economic illiterate and a populist.  Giving air time to Jon Stewart and Bill Maher is indicative that his show should be disregarded.  One would be much better off listening to Mark Levin).


The Divided States of Entitlement

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.  After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a dictatorship."

"The United States of American will endure, until politicians realize they can bribe the people with their own money."

The Divided States of Entitlement.  Where social security is anything but secure and will eventually prove to be a major social detriment when it is declared insolvent.  Where trade unions don't bring trade or unity; they block trade and bring divisiveness.  Where 'progressives' are not progressive; they are regressive.  Where 'liberals' are not liberal; they are the most intolerant of all.  Where Democrats do not tolerate the democratic process, unless it advances their agenda and extends their power (the health care takeover has lacked majority support since inception).  Where the Department of Justice commits gross injustice and illegally funnels guns to the those that should not have them. Where the Department of Education does not educate anyone.  Where the Department of Energy does not provide any energy.  Where the Department of Agriculture feeds no one.  Where the Department of Housing and Urban Development actually creates housing crises in which homes are initially unaffordable and eventually (after an inevitable collapse) become underwater/upside-down for the homeowners.  Where the Department of Transportation takes years to pave a road.  Where diplomats make the case for war, overwhelmingly convincing the country it must be done, and then backtrack and take no responsibility and blame others only after things turn south (Colin Powell).  Where diplomats out secret agents and receive no real criticism (Colin Powell's Deputy Richard Armitage).  Where diplomats say things like "We came, we saw, we died" (while laughing as if their job is some sort of game), after an enemy is dragged through the streets and tortured and killed.  Where diplomats blame terrorist attacks on an unrelated youtube video, solely for political reasons.  Where a market that is over-regulated and often arbitrarily regulated by fools is somehow considered a "free market".  Where a President is so arrogant and so much of a coward that he has advanced his own political career by turning The United States of America into divided states of entitlement using class warfare and turning citizens against each other.  The welfare state and the entitlement state have finally consumed almost everyone into a trap of dependence and an ever-increasing amount of people into despair.

Sunday, October 21, 2012

Venture Socialsim and Losers

Venture socialism (as opposed to venture capitalism) will always fail because any type of socialism is destined to fail.  The reason for this is simple:  socialists use other people's money, and are therefore willing to expend it for political reasons as opposed to economic reasons.  When a venture fails, the socialist just blames the loss of jobs and the loss of capital on the market itself.  As Governor Romney has stated, this type of government intervention [socialism] picks winners and losers; however our current administration just seems to pick losers.

From The Foundry (Heritage), the complete list of faltering or bankrupt green-energy companies:

1.  Evergreen Solar ($25 million)*
2.  SpectraWatt ($500,000)*
3.  Solyndra ($535 million)*
4.  Beacon Power ($43 million)*
5.  Nevada Geothermal ($98.5 million)
6.  SunPower ($1.2 billion)
7.  First Solar ($1.46 billion)
8.  Babcock and Brown ($178 million)
9.  EnerDel’s subsidiary Ener1 ($118.5 million)*
10.  Amonix ($5.9 million)
11.  Fisker Automotive ($529 million)
12.  Abound Solar ($400 million)*
13.  A123 Systems ($279 million)*
14.  Willard and Kelsey Solar Group ($700,981)*
15.  Johnson Controls ($299 million)
16.  Schneider Electric ($86 million)
17.  Brightsource ($1.6 billion)
18.  ECOtality ($126.2 million)
19.  Raser Technologies ($33 million)*
20.  Energy Conversion Devices ($13.3 million)*
21.  Mountain Plaza, Inc. ($2 million)*
22.  Olsen’s Crop Service and Olsen’s Mills Acquisition Company ($10 million)*
23.  Range Fuels ($80 million)*
24.  Thompson River Power ($6.5 million)*
25.  Stirling Energy Systems ($7 million)*
26.  Azure Dynamics ($5.4 million)*
27.  GreenVolts ($500,000)
28.  Vestas ($50 million)
29.  LG Chem’s subsidiary Compact Power ($151 million)
30.  Nordic Windpower ($16 million)*
31.  Navistar ($39 million)
32.  Satcon ($3 million)*
33.  Konarka Technologies Inc. ($20 million)*
34.  Mascoma Corp. ($100 million)

*Denotes companies that have filed for bankruptcy.

Green energy isn't really about energy as much as it is about control over the economy.  The vast majority of us are all for conservation and the minimization of pollution and waste, however that doesn't mean that we must embrace socialist or communist policies in the name of environmentalism.  While the current administration complains that one particular corporation (Exxon Mobil, which employs well over 100,000 people, provides a product to millions of people, and pays billions of dollars in taxes every year) uses one particular tax deduction (similar to deductions that many other companies use), we will remind you that this corporation also pays $3 in taxes for every $1 in profit.  Solyndra used our tax dollars and can no longer provide a product, profit, or employment to anyone due to the fact that they are a miserable failure.

Monday, October 15, 2012

Repeal The McCarran-Ferguson Act

Anyone with sufficient information and basic intelligence now realizes that ObamaTax needs to repealed.  The debate as to whether or not it should be replaced is another issue.  Yes, it needs to be "replaced", but not with more legislation; it needs to be replaced with free market solutions such as the ability to purchase insurance in any of the 50 states.  It needs to be replaced:

1.  With higher limits on HSA contributions and easier access to HSA's (ObamaTax does the opposite).
2.  With different types of insurance products (that the free market will provide) for different types of situations, such as a very high deducible policy with very low premiums for only catastrophic events (this product does not currently exist in New York State).
3.  With an individual market of various high-deductible insurance plans instead of the comprehensive insurance purchase mandates by the federal government.
4.  With associated payment plans (similar to the paydown of a loan) toward the high-deductible.  Also, one should be able to deduct the interest charged from this product on their federal taxes.
5.  With tax benefits for those that maintain HSA's (such as the ability to contribute with pre-tax dollars to a personalized, portable HSA where one also maintains their bank, credit lines/loans, and retirement accounts).

Other counterproductive legislation (redundant?) needs to be repealed as well.  The McCarran–Ferguson Act was passed by Congress in 1945, and has wreaked havoc on individuals purchasing health insurance and health care ever since.  It confines one's ability to purchase health insurance products to their state of residence only, leaving the other 49 states unable to compete for someone's business.  As Representative Paul Gosar (R-AZ) has illustrated, this also must be repealed in order to:

1.  Restore competition among health insurance companies as it corrects an historical error that granted an exemption to health insurance companies from federal anti-trust and unfair competition laws.
2.  The McCarran–Ferguson also prohibits class action suits against health insurers in antitrust lawsuits, but it maintains legal enforcement actions for wronged individuals on a case by case basis.

Similar to The Patient Destruction and Unaffordable Care Act, The McCarran–Ferguson Act (or at least the majority of it) hurts us far more than it helps us.  Mark Levin commonly states that "everything the government touches turns to crap!"  Not only is this statement true, but it is also attributed to a very unlikely source; Beatles drummer Ringo Starr.  Congress need not "let it be" and repeal legislation that:

1.  Restricts supply.
2.  Increases demand.
3.  Inevitably raises costs, allowing Congress the ability to blame the market for their own failures.

This also illustrates the cowardice of the Democrat Party leadership.  They knew that repealing this law in 2009 would help reduce costs by fostering a more robust market, however they completely failed to do so, as outlined in this Slate article.

Sunday, October 14, 2012

Progressives are Not Progressive

We already know that "Liberals" are not liberal.  We will now cover how "Progressives" are not progressive at all.  Progressive means forward moving and advancing, however less liberty and more government is the opposite of advancement.  More government control over law abiding citizens is not progress, and is actually regression.  Therefore, modern day statists, socialists, Marxists, communists, and fascists are regressive.  More government, less freedom, less liberty, and less choice would absolutely cause our society to regress.  Once again, the left has twisted the language to distort what it is that they truly stand for.

Leftists, Progressives and Socialists by Walter E. Williams on October 19, 2010

One of the greatest sources of confusion and deception is the difference between leftists, progressives, socialists, communists and fascists. I thought about this as I caught a glimpse of the Oct. 2 "One Nation" march on Washington. The participants proudly marched with banners, signs and placards reading "Socialists," "Ohio U Democratic Socialists," "International Socialists Organization," "Socialist Party USA," "Build A Socialist Alternative" and other signs expressing support for socialism and communism. They had stands where they sold booklets under the titles of Marxism and the State, Communist Manifesto, Four Marxist Classics, The Road to Socialism and similar titles.

The gathering had the support of the AFL-CIO, Service Employees International Union, stalwarts of the Democratic Party such as Al Sharpton and organizations such as the NAACP, the National Council of La Raza, Green for All, the Sierra Club, and the Children's Defense Fund.

What goes unappreciated is that socialists and communists have produced the greatest evil in mankind's history. You say, "Williams, what in the world are you talking about? Socialists, communists and their fellow travelers care about the little guy in his struggle for a fair shake! They're trying to promote social justice." Let's look at some of the history of socialism and communism.
Nazism is a form of socialism. In fact, Nazi stands for National Socialist German Workers' Party. Nazis murdered 20 million of their own people and in nations they captured. The unspeakable acts of Adolf Hitler's Socialist Workers' Party pale in comparison to the horrors committed in the Union of Soviet Socialist Republics (USSR). Between 1917 and 1987, Vladimir Lenin, Joseph Stalin and their successors murdered, or were otherwise responsible for the deaths of, 62 million of their own people. Between 1949 and 1987, Mao Tse-tung and his successors were responsible for the deaths of 76 million Chinese. The most authoritative tally of history's most murderous regimes is in a book by University of Hawaii's Professor Rudolph J. Rummel, "Death by Government." A wealth of information is provided at his website.

You say, "Williams, isn't it a bit unfair to lump the "One Nation" communists, socialists and their supporters with mass murderers such as Hitler, Stalin and Mao Tse-tung? After all, they expressed no such murderous goal." When Hitler, Stalin and Mao were campaigning for political power, you can bet they didn't campaign on the promise to murder millions of their own people, and probably the thought of doing so never crossed their minds. Those horrors were simply the end result of long evolution of ideas leading to consolidation of power in central government in the quest for "social justice." It was decent but misguided earlier generations of Germans, Russians and Chinese, like many of today's Americans, who would have cringed at the thought of genocide, who built the Trojan horse for a Hitler, a Stalin or Mao to take over. But as Voltaire said, "Those who can make you believe absurdities can make you commit atrocities."

While America's leftists, socialists and communists condemn Hitler, they give the world's most horrible murderers a pass. First, they make a false distinction between fascism, communism and socialism but more importantly, they sympathize with the socioeconomic goals of communism and socialism. The primary goal of communism and socialism is government ownership or control over the means of production. In the U.S., only a few people call for outright government ownership of the means of production. They might have learned that government ownership would mess things up. Instead, they've increasingly called for quasi-ownership through various forms of government regulation, oversight, taxation and subsidies. After all, if someone has the power to tell you how you may use your property, it's tantamount to his owing it.

I believe most Americans find the ideals and principles of socialism, communism and progressivism repugnant, but by our sanctioning greater government centralization and its control over our lives, we become their dupes or, as Lenin said, "useful idiots."

Thursday, October 11, 2012

Liberals are Not Liberal

Liberals are not liberal at all.  Liberal means being open to, and tolerant of, other opinions and views.  Classical Liberalism as a political philosophy means limited government and the utmost individual liberty so long as one does not infringe upon another's rights.  Limited government equates to maximum liberty and therefore maximum choice as to what one wishes to pursue with their own life.  The Democrat party and the left wing are not "liberal" in either sense of the word.

Why, then do Democrats refer to themselves as being "liberal"?  Very simple; they cannot call themselves what they truly are:  statists, socialists, Marxists, and (at times) Communists.  Some have even determined that the current administration is fascist.  None of those labels are attractive in America.  How do they justify calling themselves "liberal"?  Also very simple; they rationalize that it is "liberal" (compassionate and generous) to use the government to excessively tax some, and redistribute resources to others.  When their programs fail, as they usually do, they claim that we must have a "safety net", as if one does not already exist.  The safety net(s) must always be bigger and more expansive in their opinions.  Most of their policies are contingent upon a "zero-sum fallacy", and that they must take from some in order to help others.  This is not "liberal" at all, and merely equates to being economically ignorant and outright foolish.

Sunday, October 7, 2012

Contradiction-in-Chief

Do we currently have a Commander-in-Chief or a Complainer-in-Chief?  Blaming all the world's problems on someone else and only taking responsibility for the positives is not leadership.

Celebrity-in-Chief?  Appearing on morning talk shows and late night comedy shows diminishes the office of the President of the United States, and indicates a distorted view on priorities.

A true Commander-in-Chief would not make the following mistakes:

Barry Salutes Navy “Corpse-Man”
Barry Mispronounces "Corpsman" At Prayer Breakfast
Barry Mispronounces Navy 'Corpsman' at Prayer Breakfast

and...

Barry Thinks U.S. Soldiers Use AK-47's
Barry and the AK-47
Barry’s Urban League Speech: AK-47’s for America’s Enemies, Gun Control for American Citizens

and...

Barry Botches Rank of Top Navy SEAL, Calling Admiral William McRaven a General
Barry Botches Rank Of Top Navy SEAL...
Barry is so Proud of Admiral McRaven, He Just Promoted Him to General

Monday, October 1, 2012

The Power of the Purse

"The power of the purse" resides with Congress, specifically the House of Representatives, in the federal government.  The fact that Bill Clinton is trying to claim the credit for balancing the budget four straight years in the 1990's is sad.  

The 1995 Republican majority in the House of Representatives (the first in 46 years) coupled with the 1995 Republican majority in the Senate (the first in 8 years) led to responsible federal spending.  Before 1995, the Republicans had not controlled both chambers of Congress since 1949 (after only two years of having majorities in both the House and Senate).  Bill Clinton only stopped vetoing the Republicans spending cuts because he realized he would have to compromise if he were to receive re-election.  Perhaps he knew that he could try to take credit (despite his multiple vetoes) years later for "balancing the budget".  Bill Clinton is a political hack that looks out mainly for himself.  Our current President is a radical ideologue that has shown zero ability to compromise throughout his political career.   

Our current Congress has not passed a budget in years due to a corrupt Senate Majority Leader, Harry Reid.  Reid has blocked all budgets passed in the House (where the budgets should be deriving from) so that the Democrat Party can continue to spend like drunken Marxists under the Teleprompter's administration



By ALISON MITCHELL 
Published: June 08, 1995

President Clinton vetoed his first bill today, striking down a plan to cut $16.4 billion in spending this year and marking a new phase in his confrontation with the Republican-controlled Congress.

The Economic Recovery

...that we have yet to experience.  As The Lonely Conservative points out: the Unemployment Rate would be 11.2% if the labor force was the same size as when the Teleprompter-in-Chief took office.  It is clear that the Teleprompter's economic "plan" is bad for everyone (except Washington D.C. bureaucrats).

Everyone must have missed the notice that the "Recovery Summer" was kicked off in June of 2010.  As of September 11, 2012, the labor force participation rate is well below 64% (the lowest it has been in almost 30 years).  Nice recovery.

Wednesday, September 26, 2012

The Department of Education and The Small Business Administration

What do The Department of Education and The Small Business Administration have in common?  Both are counterproductive and neither should exist.  Does this mean that we are anti-education and against small business?  Absolutely not.  The reason as to why we are against both bureaucracies existing is because we are pro-education and proponents of small businesses.

If one were to state that we should do away with The Department of Education, the response from others is likely to produce straw man arguments such as:  1. You don't believe in education?! 2. You want to privatize education?! 3. You are heartless for taking away from children's education!

The Department of Education does not educate anyone (as Mark Levin often reminds us).  The Department of No-Education takes resources from communities and states, spends some of those resources on overhead, and then redistributes those resources back to communities and states.  Extremely inefficient and usually counterproductive when administered at such a high level.  This is the job of a state level Department of Education.  If a particular state wishes to punish communities that educate their students well, and reward other communities for doing a poor job; that is the state's business to extract resources from one area and apply those resources elsewhere.  There is no reason why education should be managed from a top-down federal government bureaucracy.  Therefore, we are pro-education and believe that the federal education department should be closed.  Let states and especially local communities (parents, teachers, neighborhood's, etc.) manage this important aspect of society.

Due to the fact that we recognize that The United States of America is founded upon libertarian principles of individualism and conservative principles of family; we are also strong proponents of small businesses.  Without small (individual owned and family owned) businesses, there would be no large businesses.  Even before reading David Einhorn's Fooling Some of the People All of the Time, we were fairly certain that The Small Business Administration is ineffective and unnecessary.  After reading Einhorn's book, we now know that The Small Business Administration is counterproductive and primarily serves as a detriment to American small businesses (amongst other agencies such as The Export-Import Bank, and in large part The Department of Agriculture).  Small businesses succeed every day in this country due to individuals.  Small businesses pay onerous taxes every day in this country to pay for foolish government agencies to redistribute resources (after the overhead costs of operating a bureaucracy).  Bureaucracies have small businesses to thank for their existence.  Small businesses have bureaucracies to thank for higher taxes.  Has The Small Business administration at times helped small businesses succeed?  Of course, however as Thomas Sowell urges you to consider; "At what cost"?  If The Small Business helps one multi-million dollar organization succeed at the cost of billions of dollars, the result is still a net loss.

Tuesday, September 18, 2012

Corporations Are Not People

Corporations are not people, however corporations are made up of people (employees, customers/clients, shareholders, etc.).  Therefore, whenever a corporation (or any organization for that matter) is taxed, the underlying people are truly the ones paying the taxes in either decreased wages/benefits (employees), increased prices (customers/clients), and decreased returns (investors, including common citizens with IRA's, 401(k)'s, 403(b)'s, etc.).  Those that wish for corporations to pay more in taxes are asking for 1. reduced compensation to workers, 2. higher prices for consumers, and 3. less retirement income for all investors.

Sunday, August 26, 2012

MediCARE is Raided Over $700 Billion To Pay for ObamaTax


From Townhall.com

As a reminder, the Obama administration stole the $700 billion from Medicare to pay for their government takeover of the healthcare system without a plan to replace Medicare funding. Despite this fact, team Obama constantly claims ObamaCare will be better for seniors when the opposite is true.


The Congressional Budget Office has confirmed that ObamaTax (also know as the UNaffordable "Care" Act) will raid over SEVEN HUNDRED BILLION DOLLARS from our senior citizens to pay for a disastrous Democrat experiment.  Senior citizens have been paying into MediCARE their entire life, and to now defund MediCARE should be considered a criminal act.  Forget that health care costs and health insurance costs have skyrocketed (with even more velocity than before 2009) over the past three years.  Forget that ObamaTax adds 21 new taxes to an already struggling economy.  Forget that ObamaTax adds an endless bureaucratic maze that includes thousands of new IRS agents to comb through citizens tax returns and medical information.  Remember that ObamaTax cuts over $700 Billion from seniors that have been paying into and depend on MediCARE, and also implements IPAB (powerful unelected officials to further ration and restrain MediCARE spending indicating that it will probably not stop at $700 Billion) and robs benefits that rightly belong to our seniors.


From Heritage:

According to the CBO, the payment cuts in Medicare include:

Obama's Cuts to Medicare:Total Amount Cut by Service:
Hospital Services$260 Billion
Medicare Advantage (MA)$156 Billion
Home Health Services$66 Billion
Skilled Nursing Services$39 Billion
Hospice Services$17 Billion
Medicaid/CHIP$114 Billion
Other Services$33 Billion
DSH Payments$56 Billion

Monday, August 20, 2012

The Democratic Party Consistently Opposes Liberty

The Democrat Party is not "Democratic" at all.  Liberals are not liberal at all.  Progressives are not progressive at all.  The left is only a supporter of personal liberty when it involves terminating an unborn life.  Otherwise, Democrats do not promote or accept any type of "choice" whatsoever.    Liberal means being open to, and tolerant of, other opinions and views.  Classical Liberalism as a political philosophy means limited government and the utmost individual liberty so long as one does not infringe upon another's rights.  The Democrat party and the left wing are not "liberal" in either sense of the word.  Progressive means forward moving and advancing, however less liberty and more government is the opposite of advancement.  If the Democrat Party embraced personal liberty as would traditionally be expected from the left, they would not prevent one from having a choice in ones own medical care; they would not allow the TSA to harass and molest citizens; they would not prevent people from having a choice as to where they or their children attend school; they would not try to prevent freedom of speech just because they are in disagreement with that speech.  The modern Democrat Party in America is no longer Democratic, liberal, progressive, or even leftist:  The modern Democrat Party in America is is Statist and Authoritarian.


Sunday, August 19, 2012

Dodd-Frank Failure

Like most of what Congress does; Dodd-Frank (also know as financial "reform") is a complete and total disaster.  To call it a failure would be too kind.  To call it a failure would imply that it merely does not fix the issue it was intended to remedy.  Not only does this financial deform (certainly not "reform", as reform implies progress) fail to even mention Fannie Mae and Freddie Mac in the lengthy legislation but it also makes the issue of "too big to fail" much worse.  According to a Fitch Ratings study:  Six largest US banks hold about 98% of notional value of derivatives markets.  "Too big to fail" has now become yet another ticking time bomb, just as Nassim Taleb once wrote that "Fannie Mae and Freddie Mac were ticking time bombs", and (unfortunately for us) he was proven correct.  Once again, Congress creates a problem, blames the problem on free markets (economic freedom), divides us by demonizing certain "classes" of people and attempts to divide us against one another's industry (banks, insurers, hedge funds, private equity funds, venture capital funds, coal, oil, natural gas, and of course small businesses), wastes tax dollars that could have created growth in the private sector, and makes the problem considerably worse.

Monday, July 16, 2012

Thomas Sowell on Chief Justice John Roberts

Thomas Sowell on Chief Justice John Roberts disastrous decision to betray the Constitution and hundreds of millions of Americans:

There are many speculations as to why Chief Justice Roberts did what he did, some attributing noble and far-sighted reasons, and others attributing petty and short-sighted reasons, including personal vanity. But all of that is ultimately irrelevant. 

What he did was betray his oath to be faithful to the Constitution of the United States. 

Who he betrayed were the hundreds of millions of Americans -- past, present and future -- whole generations in the past who have fought and died for a freedom that he has put in jeopardy, in a moment of intellectual inspiration and moral forgetfulness, 300 million Americans today whose lives are to be regimented by Washington bureaucrats, and generations yet unborn who may never know the individual freedoms that their ancestors took for granted.

Federal Reserve and Printing Money

The Federal Reserve does not actually physically print money, however what the Fed is doing (QE, QE2, Operation Twist, Operation Twist 2,...) has the same affect:  devaluation of the dollar.  Ben Bernanke doubles down on the curve flattener in another desperate attempt to "steer" the economy:

The central bank will prolong the program through the end of the year, selling $267 billion of shorter-term securities and buying the same amount of longer-term debt in a bid to reduce borrowing costs and spur the economy.

Very few outside of Washington D.C. are benefiting from Bernanke's policies.  As of today, real treasury yields are almost completely negative:

DATE                    5 YR    7 YR    10 YR 20 YR 30 YR
07/02/12           -1.04 -0.81 -0.50 0.10   0.51
07/03/12           -1.08 -0.82 -0.48 0.14   0.53
07/05/12           -1.12 -0.86 -0.51 0.10   0.50
07/06/12           -1.12 -0.87 -0.53 0.08   0.48
07/09/12           -1.14 -0.89 -0.57 0.03   0.43
07/10/12           -1.16 -0.92 -0.59 0.01   0.40
07/11/12           -1.15 -0.90 -0.57 0.03   0.41
07/12/12           -1.13 -0.90 -0.58 0.00   0.39
07/13/12           -1.15 -0.91 -0.59 -0.01 0.38
07/16/12           -1.18 -0.94 -0.61 -0.02 0.37

                   Monday Jul 16, 2012, 4:20 PM

Tuesday, May 29, 2012

Trickle-Down Straw Man

Thomas Sowell writes in Capitalism Magazine:

Tax Cuts and the “Trickle Down” Economics Straw Man  

Among the suggestions being made for getting the American economy moving up again is a reduction in the capital gains tax. But any such suggestion makes people on the left go ballistic. It is “trickle down” economics, they cry.

Liberals claim that those who favor tax cuts and a free market want to help the rich first, hoping that the benefits they receive will eventually trickle down to the masses of ordinary people. But there has never been any school of economists who believed in a trickle down theory. No such theory can be found in even the most voluminous and learned books on the history of economics. It is a straw man.

This straw man is not confined to the United States. A critic of India’s change from a government-dominated economy to more free market activity in the 1990s accused those behind this change of having “blind faith in the ‘trickle-down’ theory of distributing the benefits of economic growth among different socio-economic groups in the country.” But free-market economics is not about “distributing” anything to anybody. It is about letting people earn whatever they can from voluntary transactions with other people.

Those who imagine that profits first benefit business owners — and that benefits only belatedly trickle down to workers — have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.

Money goes out first to pay expenses first and then comes back as profits later — if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.

Even with successful businesses, years can elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid — geologists, engineers, refinery workers, truck drivers.

Nor is the oil industry unique. No one who begins publishing a newspaper expects to break even — much less make a profit — during the first year or two. But reporters and other members of the newspaper staff expect to be paid every payday, even while the paper shows only red ink on the bottom line.

In short, the sequence of payments is directly the opposite of what is assumed by those who talk about a “trickle-down” theory. As for capital gains, some countries don’t tax capital gains at all. They tax a business’ earnings, but not capital gains, which are harder to define and sometimes illusory.

The real effect of a reduction in the capital gains tax rate is that it opens the prospect — only the prospect — of greater future net profits. But that is enough to provide incentives for making current investments. Reductions in the capital gains tax rate tend to draw money out of tax shelters like municipal bonds and into creating jobs and productive capacity. That’s the point!

As with all taxes, a distinction must be made between tax rates and tax revenues. Tax revenues went up while tax rates went down in the 1980s. Similarly in the 1960s and the 1920s. That is because incomes rose more than tax rates fell. But still it will be claimed that we cannot “afford” to cut tax rates because it would create deficits. Spending creates deficits — and it is big spenders who fight hardest against cutting tax rates.

It is not faith but empirical evidence that is overwhelming on the actual track record of tax cuts and free markets. By the 1980s, this mounting evidence convinced even left-wing governments in various parts of the world to cut back government operations and sell government-owned enterprises to private industry. Faith had nothing to do with it.

In India, in the decade since the 1991 economic reforms which were condemned as “blind faith,” the country’s economic growth rate has soared. It has been estimated that the real blind faith — in government planning — had cost the average Indian hundreds of dollars a year in income during the decades when socialist dogma ruled. In a poor country like India, this was income they could not afford to miss. Even in a prosperous country like the United States, there is no need to forego economic benefits for the sake of a political phrase.

First published in Spetember 2001.

Wednesday, May 16, 2012

Entitlements Will End - One Way or the Other


From TownHall.com:

The country's two marquee social insurance programs, Social Security and Medicare, face worsening fiscal conditions driven by near-term economic challenges and long-term trends of population aging and health care costs, according to the annual report released by the two entitlements' board of trustees.

The trust funds of Treasury bonds that provide back-stop funding for the programs will be exhausted sooner than anticipated: the Medicare hospital insurance fund will exhaust five years sooner than previously expected, in 2024, and the Social Security trust fund will expire in 2036, a year earlier than last projected.

The trustees, led by Treasury Secretary Tim Geithner, concluded the two programs are not on a sustainable path and that legislative action will be needed to avoid "disruptive consequences" to beneficiaries and taxpayers.

If a sunset concept for our entitlements programs is not enacted, the fallout in the U.S. will make the meltdown in Greece look like an Alan Greenspan testimony.

Wednesday, April 18, 2012

Health Care Deform

Health Care costs have the ability to destroy America, according to David Walker, the nation's former chief accountability officer, head of the Government Accountability Office (GAO):

"If there's one thing that can bankrupt America, it's health care,"

The hyperbolic Paul Krugman claims that government run health care is more efficient than government run health care, however MediCARE loses 100 billion dollars a year in fraud waste and abuse and MediCARE also denies more treatment than any private insurance company.

Health care: A 'goldmine' for fraudsters:

"NEW YORK (CNNMoney.com) -- There's a group of people who really love the U.S. health care system -- the fraudsters, scammers and organized criminal gangs who are bilking the system of as much as $100 billion a year."

Medicare: Largest Denier Of Health Care Claims:

"According to AMA’s National Health Insurance Report Card, Medicare denies 6.85 percent of its claims, higher than any private insurer (Aetna was second, denying 6.80 percent of its claims), and more than double any private insurer’s average."


Anyone not skeptical of Barack Hussein Obama's feeble attempt to take over the health care sector is a fool.  Hopefully the Supreme Court will strike down the individual mandate and throw out the entire 2,700 pages altogether.

Wednesday, March 7, 2012

Pension Reform in New York State

Three important links regarding Pension Reform in New York State:

Undoing Andrew

"Sheldon Silver has been speaker of the New York Assembly for going on 19 years now, and not for a moment of his tenure has he been his own man."

Beggared by Benefits

"That reform is modest; it doesn’t apply to current workers, only to state employees hired after the measure becomes law. But for those future employees, it would put in place new contribution requirements and options, including 401(k) plans, that are projected to save taxpayers $79 billion over the next 30 years."

Tier VI Pensions Are Essential

"The plan for Tier VI will save the taxpayers more than $93 billion dollars over 30 years. This pension reform plan is necessary, fair and, remember, doesn't even affect a single current employee."

Wednesday, February 22, 2012

Credit Where It Is Due

We tend to avoid foreign policy and stick to domestic issues.  However, we are also strong supporters of our military and we would like to state that the military and intelligence community should receive 100% of the credit for incapacitating a dangerous threat in terminating Osama bin Laden.  We would provide our esteemed Teleprompter-in-Chief with some credit; however we cannot do so.  He opposed the harsh interrogation methods used to gain intelligence that led to the termination of Osama bin Laden.  Although the stuttering, stammering, and mumbling incompetent fool that occupies the White House would like to take credit for every accomplishment - and blame every failure on another party - anyone with any ability whatsoever to think critically can easily see through this charade for what it is: a Marxist-Socialist ideologue with zero leadership ability grasping at straws.  

From the L.A. Times:

An Al Qaeda suspect who was subjected to harsh interrogation techniques at a secret CIA prison in early 2004 provided a clue, the nom de guerre of a mysterious courier, that ultimately proved crucial to finding Osama bin Laden, officials said Wednesday.

From the Boston Globe:

Hassan Ghul, an Al Qaeda courier arrested in Iraq in 2004, spent two years in a secret CIA prison, where detainees were subjected to interrogation practices such as facial slaps and sleep deprivation.

Sometime during those two years, Ghul named another important courier, a crucial tip that eventually helped lead to Sunday’s daring raid on Osama bin Laden’s hide-out, according to the Associated Press.

US officials have acknowledged that clues gleaned from the Bush administration’s controversial network of detention centers, coupled with years of patient intelligence work, netted the terrorist mastermind on Sunday. But they declined to say whether harsh interrogation practices — which President Obama opposes — played a role in their historic intelligence success.

Former Bush administration officials say the successful raid on bin Laden’s compound provides some vindication for detention and interrogation policies that have been widely criticized by the legal community, human rights advocates, and Obama himself.

“This would not have been possible if we were releasing terrorists willy-nilly and not interrogating them,’’ Paul Wolfowitz, deputy defense secretary under Bush told reporters Monday.

Benjamin Wittes, a senior fellow at The Brookings Institution who has authored books about the legal challenges of detaining terrorists, said it is too early tell what role, if any, coercive tactics played. But he said it is clear that interrogating hundreds of detainees over a period of years “developed a mosaic that led to bin Laden.’’

“There were many people who were far too quick to insist that no good could ever come from coercive interrogation,’’ Wittes said. “Those of us who resisted that proposition were always derided as apologists for torture. But the premise of that conventional wisdom was wrong. Actually important information does emerge from that sort of a program, and maybe even from the portions of that program that we call morally distasteful.’’

Thursday, February 9, 2012

Internal Destruction

A great civilization is not conquered from without until it has destroyed itself from within.

Marco Rubio on the Administration's Tactics

Part of Marco Rubio's CPAC speech:

“When the president took over as president of the United States, we had high unemployment," Rubio said. “When the president took over as president of the United States, we had an economy that was going through some real struggles. He became president. He had a Democrat-controlled Congress. He got everything he wanted from the Congress. And guess what? Everything got worse.

“The unemployment went up, the debt went up, the economy slowed down. Everything got worse,” Rubio continued. “So, he cannot run on his record. And so if he can’t run on his record, what is he going to try to do instead? And what we have seen is unprecedented. Unlike any leader in modern American history, we are led today by a president that has decided to pit Americans against each other.

“The basic argument that he’s making to our nation is the reason why some of us are worse off than we used to be is because other people are doing too well,” Rubio added. “That the only way for some of us to do better is for other people to do worse. That the only way for some people to climb the political ladder is for other people to be pulled down. This is the argument that this president, unlike perhaps any figure in modern American politics, is making. And he’s doing it because it is a calculated effort to win the election.

Tuesday, February 7, 2012

Do Not Cry Wolf When There is No Wolf

Zerohedge takes on this (unbelievably irresposible attempt at journalism) by Reuters.  Apparently, according to Reuters "journalist" Patrick Temple-West, we are now supposed to believe that citizens "opposed to taxes and regulations" not only "pose a growing threat", but are also considered "anti-government extremists".  It truly is sad that they are trying to convince us that those who peacefully and legally attempt to promote a monetary policy of sound money, the Constitution, and government responsibility, accountability, and transparency are somehow "anti-government extremists".  Similarly, it is beyond sad when demagogues cry wolf and attempt to portray their opponents as racist for simply believing in conservative or libertarian views of limited government (that is, a federal government that operates within the limits of the Constitution and therefore within the confines of supreme law).

The Big Short is a Big Disappointment

The Big Short: Inside the Doomsday Machine by Michael Lewis was a big disappointment.  Lewis discusses the symptoms and the fallout of the housing crisis.  However, like many others, he completely fails at addressing the real disease and the genesis of the problem: poor government policy.  If one would like a real look inside the "doomsday machine", Thomas Sowell's The Housing Boom and Bust provides further details on the real culprits and their policies, legislation, and accompanying regulation that led to perverse incentives, moral hazard, and outright foolishness on the part of the federal government.

As shown on page 11 of the CBO report: Fannie Mae, Freddie Mac, and the Federal Role in the Mortgage Market; Fannie Mae, Freddie Mac, and Ginnie Mae hold over half of the mortgage debt outstanding.  This is due to government policy that, in the effort to "increase home ownership", compelled the three institutions to buy mortgages on the secondary market at a skewed price.  If Congress sets up entities to buy (subsidize) something in the secondary market; albeit mortgages, automobilesethanol, or solar energy, then the end result will be an influx of each from mortgage originators, auto dealers, corn farmers, and  "clean energy producers" respectively.  This influx is not due to a market demand acting upon what is economical, but a distorted and perverse incentive of artificially inflated values of the afformentioned goods.  Also revealed on page 7 of the report, the triumvirate (Fannie, Freddie, Ginnie) dominated the Mortgage Backed Securities (MBS) issuance market.  Yet somehow we are supposed to believe it was the (not-so-)free market that caused a housing catastrophe.

Friday, January 27, 2012

Taxes

It is beyond sad when the (ever so eloquentleader of the free world (in between stuttering, stammering, and mumbling) invokes class warfare and attempts to divide the constituency he claims to represent by purporting all of our problems would be solved by higher tax rates.  Assuming the world would be a better place if only the federal government had more power and more tax dollars from the 53% of Americans currently paying income taxes is na├»ve to the extent of utter foolishness.  It is true that much of the 47% (not paying income taxes) do pay into programs such as OASDI, RSDI, FICA / SECA, MediCARE, and MedicAID; commonly and incorrectly referred to as "payroll tax".  However, the payroll tax is not a tax at all, despite what your increasingly tyrannical government claims.  The following programs, that constitute the "payroll tax" are either insurance, savings, or retirement/pension programs.  Therefore one does not pay "taxes"; one would pay premiums, make deposits, or contributions respectively.


- OASDI - Old-Age, Survivors, and Disability Insurance

- RSDI - Retirement, Survivors, and Disability Insurance

- FICA -  Federal Insurance Contributions Act

- SECA - Self Employment Contributions Act

- MediCARE - health insurance for the people 65 or older, people under 65 with certain disabilities, people with end-stage renal disease.

- MedicAID - health insurance for lower-income people, families and children, the elderly, and people with disabilities.


After all this social engineering and central planning is sorted out, one might inquire who bears the burden of federal taxes.  From the Daily Capitalist / National Taxpayers Union:


If anyone wishes to pay more in taxes, they can do so voluntarily.  One should brace themselves for the hilarity of the Teleprompter in Chief to resume claiming (lying) he has cut taxes.

Tuesday, January 24, 2012

Rand Paul and Constitutional Conservatism

Senator Rand Paul was recently detained by the TSA (yes, the same TSA that has yet to accomplish anything substantial) for refusing to forfeit his fourth amendment rights.  Supposedly there was a body scanner "anomaly", however the only anomaly is that a member of Congress is actually trying to uphold an oath to "support and defend the Constitution of the United States".

Senator Paul also recently returned five-hundred thousand dollars from his office budget to the Treasury which leads one to believe he was very serious about his budget proposal to cut five-hundred billion dollars in government waste/spending.  This is in strong contrast to the wasteful spending seen under Nancy Pelosi's tenure as Speaker, and the current administration's disastrous and frivolous spending in the name of "recovery".

Tuesday, January 3, 2012

Doves and Hawks

With the Republican presidential candidates failing to prioritize strengthening the constitution and supporting term limits, and a Democrat party that refuses to acknowledge or respect the supreme law of the United States; one can only HOPE our central bankers will protect the integrity of our currency - but hope is as hollow as fear.

From ZeroHedge:

"the composition of the FOMC voting members changes drastically as of January 1, with Hawks Fisher, Kocherlakota and Plosser now out of the voting rotation, and replacing them will be the gaggle of ferocious doves Pianalto, Lockhart and Williams. In fact the only hawk left in the Fed as of today through the end of the year is Richmond Fed's Jeffrey Lacker who has shown substantial dovishness in the past. In other words, from a rotation of 7 and 3, the Fed is now uber-dovish by a 9 to 1 majority. So does this mean that printing is imminent? Stay tuned and find out in 3 short weeks: the January FOMC statement comes out on January 25. The only good news: Charles "the fire hydrant" Evans is finally out."