National Debt Clock

Thursday, December 31, 2009

Our Inept Government's Responds to the Christmas Day Bomber

"System worked?"

"Allegedly? Suspect?"

"Systemic Failure?"

So which is it? The truth is the system failed because our leaders don't view this as a war. They view it as a police action. The see each incident separately. They don't understand that these people want to kill us no matter what. They think that tolerance and kindness will disuade these maniacs from strapping explosives to their crouches. They are so afraid of "offending" someone at airport screening that they put everyone under undue scrutiny. They are so afraid of a racism charge that they pretend to increase security by installing new machines and new policies. In reality though, it is how you train the people who use them. If you are taught not to single out those that are most likely to be terrorists, but rather use random screening, we have failed. If the enemy most of the time fits a neat description, common sense says we single out those people.

No Increase in Fraction of Atmospheric Carbon Dioxide in Past 150 Years

Most of the carbon dioxide emitted by human activity does not remain in the atmosphere, but is instead absorbed by the oceans and terrestrial ecosystems. In fact, only about 45 percent of emitted carbon dioxide stays in the atmosphere.

To assess whether the airborne fraction is indeed increasing, Wolfgang Knorr of the Department of Earth Sciences at the University of Bristol reanalyzed available atmospheric carbon dioxide and emissions data since 1850 and considers the uncertainties in the data.

In contradiction to some recent studies, he finds that the airborne fraction of carbon dioxide has not increased either during the past 150 years or during the most recent five decades.

Wednesday, December 23, 2009

Second Wave of ARM Resets and Foreclosures

“The second wave of ARM resets and foreclosures might come sooner than you think,” notes Jim Nelson. “According to Whitney Tilson and Glenn Tongue of T2 Partners, the experts on this subject, about 80% of option ARMs are negatively amortizing. Meaning these so-called top-tier borrowers are heading further into the hole. Once their rates reset, they could be in serious trouble.

“And that could be happening very soon

“The chart above, which should look familiar, shows the two peaks in this long-term housing conundrum. The first mountain is comprised of subprime ARM resets. And the second is mostly constructed of option ARM resets. We appear to be in the eye of the storm.

Option ARM Definition (Source):
An "option ARM" is typically a 30-year ARM that initially offers the borrower four monthly payment options: a specified minimum payment, an interest-only payment, a 15-year fully amortizing payment, and a 30-year fully amortizing payment.

These types of loans are also called "pick-a-payment" or "pay-option" ARMs.

When a borrower makes a Pay-Option ARM payment that is less than the accruing interest, there is "negative amortization", which means that the unpaid portion of the accruing interest is added to the outstanding principal balance. For example, if the borrower makes a minimum payment of $1,000 and the ARM has accrued monthly interest in arrears of $1,500, $500 will be added to the borrower's loan balance. Moreover, the next month's interest-only payment will be calculated using the new, higher principal balance.

Transvestites, Mao ,and Obama Ornaments Decorate White House Christmas Tree

Tuesday, December 22, 2009

The Deflation Threat

A falling price trend is at first a benefit to consumers. But then it leads to a spiral of economic decline: a depression. Deflation occurs when money for whatever reason becomes scarce, and therefore more valuable. Lower prices are the effect. Producers starve for profits, which leads to layoffs, loan defaults, and bankruptcies. Borrowers find they have to repay with more expensive dollars, so they pay off their debts. Low debt throttles growth and slows purchases. Expensive dollars make exports less competitive. Unsold inventories waste away on the shelf, crumble in value, and must be sold at deep discounts. Prices fall further, and so on, in a vicious circle.

Normal downturns are triggered by cyclic imbalances in which supply temporarily exceeds demand. Growth pauses while inventory excesses are liquidated. This time, however, things are different. The triggering event was an asset valuation bubble -- high stock and real estate prices -- boosted excessively in a buying mania fueled by cheap credit during the last fifteen years. Lots of borrowing creates financial leverage, which pumps up profits during good times and wipes them out during bad. Consumer credit swelled with the aid of cheap mortgages and home equity lines. Businesses borrowed cheap short-term money and invested long-term, expecting to roll the loans over as profits expanded. Most significantly, bankers ran high ratios of what they lent out versus what they took in. All of this borrowing was encouraged by the Federal Reserve Board and Congress to foster social goals like full employment and high levels of homeownership.

But the system eventually became unstable. The real estate that served as collateral for trillions of dollars of debt on the banks' (and the bank-like Fannie and Freddie) balance sheets became priced too high, and for the first time in seventy years, prices began a serious decline. Many highly leveraged borrowers had their equity wiped out, so they threatened to default. An increased sense of risk rippled through these debt pools, erasing much of their value and rendering them unsalable, or "toxic." Soon, a "run," or loss of general confidence, pervaded the U.S. and European economies. Though it has come to be called the housing bubble recession, a better name is the great credit bubble depression.

Deflation stems from a shortage of money. Isn't the Fed creating trillions of new dollars that they lend to banks and to the Treasury for disbursement in "stimulus" programs? Yes, but even as the Fed has recently created $2 trillion in new assets, many times, more money has been and will continue to be taken out of the world's economy through the process of de-leveraging -- that is, the paying off or writing off of a portion of the hundreds of trillions in credit floated around the world. Despite talk of TARP success and nascent recovery, those toxic assets are still on the books, some with the banks and some with the Fed itself. Eventually, much of this money will become worthless. As fast as the Fed is printing new money, money is being destroyed as debt is taken off the table. In the end, the Fed will lose as the quicksand of depression sucks more and more money into its muck.

Ironically, the 60% stock market rally of 2009, which in itself is anti-deflationary, is no source of comfort. Though it's hard to prove why stocks move, the recent rally is most likely due to a "carry trade," in which banks borrow cheaply from the Fed and invest in high-return risk markets like stock, gold, or even foreign currencies. The Fed is encouraging this with low rates precisely because this asset re-inflation makes the dollar less valuable. They are fighting the inevitable deflation.

But they are also creating a new asset bubble just like the one that imploded last year. They have lowered short-term interest to zero. As prices correct downward and the dollar rises as deleveraging continues, the Fed can take rates no lower. The last remedy available is for the Fed to buy government and corporate debt in the open market, literally printing money at will -- adrenaline for a burst, perhaps, but not sustainable. Other government measures like deficit spending and expansion of primarily public sector jobs in the "Stimulus" program are simply wasteful, destroying more dollars in the present and creating public debt to burden the future. These effects are deflationary. Obama's plans for new taxes and regulations, which extinguish dollars, are also deflationary.

What about the oft-cited signs of recovery like upticks in GDP, consumer sentiment, and retail sales? Well, even in a trending economy -- and ours is trending down -- it is normal to see short blips, zigs, and zags against the trend. The numbers are also somewhat cooked for political effect. You'll know that the grip of deflation is tightening if you continue to see more of the following: discounts, price reductions, joblessness, real estate vacancies, bank failures, business failures, public finance failures, pension defaults, loan defaults, shrinking debt and credit, higher savings ratios, and frugal spending.

The depression will be terrible, but it could have a cleansing effect.

By 2019, 24 Million People Will Remain Uninsured Under Obamacare

Under the health care bill introduced by Senate Majority Leader Harry Reid (D-Nev.) on Wednesday, by 2019 taxpayers will be paying $196 billion per year to subsidize other people’s health insurance coverage, but there still will be 24 million uninsured people in America, according to the Congressional Budget Office and the Joint Committee on Taxation.

According to an analysis published Wednesday by the CBO and JCT, this subsidy will cost taxpayers $196 billion per year by 2019 but will still leave 24 million people uninsured in America, about 8 million of whom will be illegal aliens. The estimate assumes that there would otherwise be about 55 million uninsured people in the United States.

$100 Million Item for Senator Dodd's Healthcare Vote

A $100 million item for construction of a university hospital was inserted in the Senate health care bill at the request of Sen. Christopher Dodd, D-Conn., who faces a difficult re-election campaign, his office said Sunday night.

The legislation leaves it up to the Health and Human Services Department to decide where the money should be spent, although spokesman Bryan DeAngelis said Dodd hopes to claim it for the University of Connecticut.

Banks with Political Ties got Bailouts, Study Shows

U.S. banks that spent more money on lobbying were more likely to get government bailout money, according to a study released on Monday.

Banks whose executives served on Federal Reserve boards were more likely to receive government bailout funds from the Troubled Asset Relief Program, according to the study from Ran Duchin and Denis Sosyura, professors at the University of Michigan's Ross School of Business.

Banks with headquarters in the district of a U.S. House of Representatives member who serves on a committee or subcommittee relating to TARP also received more funds.

Study: Schools Face Shortfalls After Stimulus Ends

Using federal stimulus money to avoid layoffs at schools is going to create a shortfall even more difficult for states and schools to contend with when that money runs out, according to a first-of-its-kind study released Monday.

In July, the GAO cautioned that many states facing deep deficits were using stimulus dollars to fill budget holes and avoid layoffs, rather than reforms that could mean longer-term savings or programs such as building new schools.

When one saves a job, it doesn't mean one saves it indefinitely," she said.

The Congressional Budget Office has noted the difficulty of measuring the number of jobs saved by the stimulus. "It is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package," a CBO report said last month.

Monday, December 21, 2009

"It is natural to man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth -- and listen to the song of that syren, till she transforms us into beasts. ... Are we disposed to be of the number of those, who having eyes, see not, and having ears, hear not?"

--Patrick Henry

Thursday, December 17, 2009

Hawaiian Bill Would Transfer Public-Owned Lands to a Native Hawaiian Government

Sponsored by Senator Daniel Akaka, the bill would transfer a percentage of public-owned lands to a native Hawaiian government within the state of Hawaii. The legislation would collect some 400,000 ethnic Hawaiians scattered across the country into a newly affiliated tribe, eventually endowed with the powers of a sovereign state, including freedom from state taxes and regulations and separate police power.

With some 38% of the state falling under public ownership and thus theoretically available for transfer, the benefits accruing to racial Hawaiians could be significant. For those without a drop of Hawaiian blood, the amount of lost tax revenue and other costs will also be sizable. According to a study by the Grassroot Institute of Hawaii and the Beacon Hill Institute, the total amount of state tax and land lease revenue lost annually could range from $342.8 million to $689.7 million, depending on the percentage of public land ceded to the project.

The state could also expect to lose as many as 20,000 private sector jobs and more than $200 million in investment. The burden will fall on non-Native taxpayers, costing the average taxpayer between $705 and $1,461 in real disposable income a year.

Broken Vows of Government Representatives

Unlike Woods, some prominent politicians who've violated their marriage vows have refused to relinquish their office after being exposed, treating it as a personal entitlement rather than a privilege. Unlike Washington, they imagine that their private immorality has no impact on national morality and the integrity of their constitutional oath.

Maybe it's time to ask candidates for public office if they promise to resign immediately if they breach their marriage vows. If a politician's spouse can't trust him or her to forsake all others, how can we trust their vow to "support and defend the Constitution of the United States against all enemies, foreign or domestic," to "bear true faith and allegiance to the same," and "well and faithfully discharge the duties of the office"?

All that is at stake is our life, liberty, and property.

 "Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."

-- George Washington

"Those who stand for nothing fall for anything."

-- Alexander Hamilton

"The true Soldier fights not because he hates what is in front of him, but because he loves what is behind him."

-- G. K. Chesterton

"A human group transforms itself into a crowd when it suddenly responds to a suggestion rather than to reasoning, to an image rather than to an idea, to an affirmation rather than to proof, to the repetition of a phrase rather than to arguments, to prestige rather than to competence."

-- Jean-Francois Revel

"People seem not to see that their opinion of the world is also a confession of their character."

-- Ralph Waldo Emerson

"All that is necessary for the triumph of evil is that good men do nothing."

-- Edmond Burke

"It does not take a majority to prevail, but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."

-- Samuel Adams

"Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports."

-- George Washington

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race."

-- Calvin Coolidge

Wednesday, December 16, 2009

Source: White House Threatens Sen. Nelson with Nebraska Military Base Closure if won't Vote for Healthcare

According to a Senate aide, the White House is now threatening to put Nebraska's Offutt Air Force Base on the BRAC list if Nelson doesn't fall into line.

Offutt Air Force Base employs some 10,000 military and federal employees in Southeastern Nebraska. As our source put it, this is a "naked effort by Rahm Emanuel and the White House to extort Nelson's vote." They are "threatening to close a base vital to national security for what?" asked the Senate staffer.

Indeed, Offutt is the headquarters for US Strategic Command, the successor to Strategic Air Command, and not by accident. STRATCOM was located in the middle of the country for strategic reasons. Its closure would be a massive blow to the economy of the state of Nebraska, but it would also be another example of this administration playing politics with our national security.

2010 Home Prices Expected to Fall 5-10%

Of every housing market in America, Moody’s said this week that it expects Pittsburgh -- and Pittsburgh alone -- to have its home prices rebound in 2010. A whole 0.41%, thank you very much.

For everyone else, your editors included, too bad. Moody’s chief economist Mark Zandi expects home prices to fall another 5-10% next year for the other 99 metropolitan areas in the U.S.

For the record, Zandi forecast this time last year that prices would fall 14.5% in 2009. Likely to come in around 13% this year, that’s pretty damn good… and pretty bad news for 2010.

A Call to Action to Stem the Mounting Federal Debt

Over the past year alone, the public debt of the United States rose sharply from 41 to 53 percent of gross domestic product (GDP). Under reasonable assumptions, the debt is projected to grow steadily, reaching 85 percent of GDP by 2018, 100 percent by 2022, and 200 percent in 2038.

Interesting article, don't agree with all the recommendations, but the analysis is scary.

Climate Talks Deadlocked as Clashes Erupt Outside

"I regret to report we have been unable to reach agreement," John Ashe of Antigua, chairman of one negotiating group, reported to conference Wednesday morning.

The Copenhagen talks so far have been marked by sharp disagreements between China and the United States, and between rich and poor nations. After nine days of largely unproductive talks, the lower-level delegates were handing off the disputes to environment ministers in the two-week conference's critical second phase.

Governments had weeks ago given up hope of concluding a finished treaty at Copenhagen and aimed instead at establishing a framework, through decisions here, for negotiating more formal agreements next year.

Climategate's Stubborn Facts

What are the facts? Well for starters, scientists at the Smithsonian Institution tell us that during what is known as the Medieval Optimum, the Vikings were growing grapes in Greenland. An agronomist at Virginia Tech suggest that if you are planning to start a vineyard, the roots of the vines cannot be exposed to temperatures below 25 degrees F or the vine will die. Even though there were no thermometers at the time of Eric the Red, this gives us a benchmark for reference. There are no vineyards in Greenland today because it is too cold. In fact, the Smithsonian reports that there is evidence which supports the theory that the Viking colonies later collapsed as a result of a dramatically cooling climate.

Atmospheric chemists will tell you CO2 is a trace gas in the atmosphere and is measured in parts per million. It seems a bit of a stretch that the tail can wag the dog, especially when CO2 absorbs such a narrow portion of the infrared spectrum. According to Dr. Fred Singer of the Science and Environmental Policy Project, the global climate change models cannot "hindcast" known climatic changes such as the Medieval Optimum, when good, vintage, homegrown wines could be enjoyed in Greenland.

Another "error" was admitted by the National Snow and Ice Data Center when they under-reported the amount of polar sea ice in the northern hemisphere. It seems they had a "sensor drift" which prevented the detection of ice coverage of more than 190,000 square miles -- roughly an area the size of California.

100 Reasons Why Climate Change is Natural

Top 10:
1) There is “no real scientific proof” that the current warming is caused by the rise of greenhouse gases from man’s activity.

2) Man-made carbon dioxide emissions throughout human history constitute less than 0.00022 percent of the total naturally emitted from the mantle of the earth during geological history.

3) Warmer periods of the Earth’s history came around 800 years before rises in CO2 levels.

4) After World War II, there was a huge surge in recorded CO2 emissions but global temperatures fell for four decades after 1940.

5) Throughout the Earth’s history, temperatures have often been warmer than now and CO2 levels have often been higher – more than ten times as high.

6) Significant changes in climate have continually occurred throughout geologic time.

7) The 0.7C increase in the average global temperature over the last hundred years is entirely consistent with well-established, long-term, natural climate trends.

8) The IPCC theory is driven by just 60 scientists and favourable reviewers not the 4,000 usually cited.

9) Leaked e-mails from British climate scientists – in a scandal known as “Climate-gate” - suggest that that has been manipulated to exaggerate global warming

10) A large body of scientific research suggests that the sun is responsible for the greater share of climate change during the past hundred years.

Sunshine Speeded 1940s Swiss Glacier Melt

A surge in sunshine more than 60 years ago helped Swiss mountain glaciers melt faster than today, even though warmer average temperatures are being recorded now, Swiss researchers said Monday.

Yet, average temperatures have been rising in the past two decades and scientists have said glacier melt is accelerating at unprecedented levels under the impact of climate change.

"The surprising thing is that this paradox can be explained relatively easily with radiation," said one the ETHZ researchers, Matthias Huss, in the university's online review.

"This should not lead people to conclude that the current period of global warming is not really as big of a problem for the glaciers as previously assumed," he added.


How Minimum Wage Affects the Job Hunt

They examined sixty years of data and concluded the minimum wage actually cuts down on job opportunities and even wages, over time, for low-skilled workers.

“A small number -- and it depends how big the minimum wage increase is -- will lose their job.
“Some people entering the labor market for the first time, or, you know, anew, will not be able to find a job because of the higher minimum wage."

The last bump for the minimum wage was this past July, a seventy cent increase to $7.25 an hour.

Tuesday, December 15, 2009

Federal Employees Owe Uncle Sam $3B in Unpaid Taxes

At a time when the White House is projecting the largest deficit in the nation's history, Uncle Sam is trying to recover billions of dollars in unpaid taxes from its own employees.

Federal workers owe more than $3 billion in income taxes they failed to pay in 2008. According to Internal Revenue Service documents, 276,300 federal employees and retirees owe $3,042,200,000.

The IRS tracks the voluntary compliance rate of federal employees and retirees each year, and each year feds come up short. The one bright spot in this year's report is that after several years of a steady increase, the amount owed by feds is down from the previous year.

Federal employees and retirees owed $3,586,784,725 in unpaid income taxes in 2007.
The documents show delinquent employees from nearly every federal agency with more than 25 employees

D.C. Hands out $15M in Bonuses Despite Recession, Budget Gaps

City officials have doled out nearly $15 million in bonuses and awards since Mayor Adrian Fenty took office in January 2007, records obtained by The Examiner under the Freedom of Information Act show.

Among the big winners were Schools Chancellor Michelle Rhee, who was handed $41,250 in August 2007 after barely two months on the job; Department of Health Director Pierre Vigilance, who was given $15,000 in 2008; and city property manager Robin-Eve Jasper, handed $18,000 over two years.

The bonuses were ladled out even as the city was facing nine-figure budget shortfalls and officials -- including Rhee -- were firing employees by the busload, claiming they could no longer afford them.

It paid to be on Rhee's good side. School employees, including Rhee's top staff, accounted for nearly half of the Fenty-era bonuses, records show. Then-special education "czar" Phyllis Harris was paid $17,000 in 2008; special-ed bureaucrat Karen Griffin was given $25,000 the same year; and Rhee's chief of staff, Lisa Ruda, was given $17,000 in 2008, records show.

Under Rhee, standardized test scores in the public schools have made marginal improvements. Fourth-graders' test result are now only the fourth-worst in the nation; eighth-graders' are only the second-worst.

Worried by possible bad publicity for doling out cash during a recession, the city council voted to ban the practice as of Oct. 1, 2009. That hasn't stopped the gravy train from rolling: Records show hundreds of employees have been paid more than $565,000 in bonuses since October.

Climategate TKO in Copenhagen?

Today's London Times carries what might eventually be considered the most important headline in the world for the last twenty years -- and the most hopeful news for the next twenty years if it is correct:

Copenhagen Stalls Decision on Catastrophic Climate Change for Six YearsThe key decision on preventing catastrophic climate change will be delayed for up to six years if the Copenhagen summit delivers a compromise deal which ignores advice from the UN's science body.

World leaders will not agree on the emissions cuts recommended by the Intergovernmental Panel on Climate Change (IPCC) and are likely instead to commit to reviewing them in 2015 or 2016.

The Times says that industrialized countries have not been able to agree to the draconian 25%-40% cuts in carbon emissions by the year 2020 demanded by the poor nations and the Intergovernmental Panel on Climate Change (IPCC).

President Obama has reportedly agreed to only a 4% reduction from the 1990 levels by 2020.
Leaders of the industrialized world are set to arrive on Friday, the last day of the summit. It is speculated that if an agreement is not worked out in the next few days, some of the leaders may not bother to come.

Sunday, December 13, 2009

Government Average Job Pays $30,000 more than Private Sector

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.
Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

Secret Document Exposes Iran’s Nuclear Trigger

Confidential intelligence documents obtained by The Times show that Iran is working on testing a key final component of a nuclear bomb.

The notes, from Iran’s most sensitive military nuclear project, describe a four-year plan to test a neutron initiator, the component of a nuclear bomb that triggers an explosion. Foreign intelligence agencies date them to early 2007, four years after Iran was thought to have suspended its weapons programme.

An Asian intelligence source last week confirmed to The Times that his country also believed that weapons work was being carried out as recently as 2007 — specifically, work on a neutron initiator.
The technical document describes the use of a neutron source, uranium deuteride, which independent experts confirm has no possible civilian or military use other than in a nuclear weapon. Uranium deuteride is the material used in Pakistan’s bomb, from where Iran obtained its blueprint.

“Although Iran might claim that this work is for civil purposes, there is no civil application,” said David Albright, a physicist and president of the Institute for Science and International Security in Washington, which has analysed hundreds of pages of documents related to the Iranian programme. “This is a very strong indicator of weapons work.”

Friday, December 11, 2009

The On-Again, Off-Again Depression
By Bill Bonner

The US stock market is still in “bounce mode.” All bounces come to an unhappy end. This will be no exception.

If you step back a bit further, you could see it in a different light. Ten years ago, The Daily Reckoning warned of a long, Japan-like slump. Then, the stock market fell and the economy went into a recession. But the downturn didn’t last long. And in the bubbly years that followed, our alert was quickly forgotten – especially by us! But now, 10 years have gone by. The S&P 500 has lost 20% of its value during that period. Wages and income are static. And there is not one single more job in America than there was then. It was a “Lost Decade” for the American economy.

So get ready…

How about a depression that lasts for 20 years? It could be on its way.

In December, exactly 20 years ago, Japan’s stocks closed at an epic high – 38,957 for the Nikkei 25 index. Last week, that same index closed at 9,977.

Readers will quickly note that the Japanese are idiots. Why else would they allow a 20-year bear market? Why else would they permit their economy to slide sideways for nearly an entire generation?

Where is the Japanese Bernanke?

This is almost the same question we posed readers 10 years go. Except then, we asked: Where is the Japanese Greenspan?

Greenspan…Bernanke…it didn’t seem to make any difference. American central bankers seemed to have magical powers, at least compared to their Japanese counterparts. They seemed able to succeed where the Japanese failed…

American economists mocked the Japanese 10 years ago. But what goes around, comes around…
Japanese and American economists go to the same schools. They have the same silly ideas. They are equally incompetent, as near as we can see. And yet, the Japanese have suffered one ‘lost decade’…and then another…while Americans went from bubble to bubble….

But, maybe our first idea was right after all. After we warned that the country could follow on Japan’s heels…entering a long, soft, slow depression…the Greenspan Fed and the Bush federal government opened up with all cannons. They blasted away on both fiscal and monetary fronts…ending up with the biggest barrage of stimulus the world had ever seen.

And what happened? They inflated another bubble…bigger and more dangerous than any before it.

Now, that bubble too has blown up. And now we look around. Once again, the Bernanke/Obama team is firing every gun; just as the Greenspan/Bush team did in the early 2000s…only more of them. But this time, the volleys are not having the same effect. Even though asset markets are bubbling up as hoped, the depression won’t go away. Unemployment is over 10% and still increasing. This is not another “jobless recovery” like the one in 2002-2003. This is no recovery at all.

Then, we look back at the last 10 years. What do we see? Instead of making economic progress, we see a nation making economic mistakes. And, under the leadership of the Obama/Bernanke/Geithner team…they’re still making mistakes. The same mistakes. Only bigger ones. And so we have to wonder…

Maybe the next decade will be ‘lost’ too. Stocks have gone nowhere for the last 10 years, but they are still expensive. On average, they sell for 50% more than the long-term average P/E. Usually, when they are this high, the next generation produces piddly gains. Could it be that, 10 years from now, we will look back without having added a single dollar of net return? Yes…it is quite possible. Likely even. That will mean a total of 20 years with no profit for stock market investors.

Which would serve them right. You’ll recall, perhaps, that at the end of the ’90s it was widely advertised that the surest, simplest road to riches was the stock market. The Dow was supposed to go to 36,000, according to one well-publicized forecast. All you had to do was ‘buy and hold.’ You’d get rich for sure.

Of course, it doesn’t work that way. As soon as investors all come to think the same thing the only sure thing is that what they all think is balderdash.
Well…then…what do they think now?

As near as we can see they believe two contradictory things. On the one hand, everyone says the dollar is doomed. On the other hand, they all seem to want dollar-denominated US Treasury bonds.

But actions speak louder than words. They may talk about the end of the dollar; but that is what they still own. And that is what they’re still buying – via US Treasuries. So…we want to be short US Treasuries for the next 10 to 20 years.

But wait. Isn’t it too soon? Ah, there’s the rub. Treasuries seem to be approaching a major peak. Maybe they are there already. Maybe they aren’t.

“What bothers me is that we still haven’t had that other major leg down in the stock market,” we told colleagues Issy Bacher and Dan Denning today. “It’s not natural for a bear to take a chunk out of asset prices…and then just go away. Typically, the assets bounce back…and then the bear takes another chunk out of them.

“Since we haven’t had that next leg down…we have to assume it’s still ahead. But investors seem totally unprepared for it. When it comes, they’re going to panic. They’re going to sell shares all over the world. And they’re going to seek safety…where? They’re probably going to turn to US Treasury bonds. Treasuries will go up, not down…

“Now the funny thing is that moving to Treasury bonds will help the US government finance its deficits…and possibly stretch out the depression for years. As long as the dollar is in jeopardy, the feds are in danger. They might not be able to finance their deficits. Which means, foreigners…and investors generally…could walk away from the dollar at any time. That would cause a major crisis. If the feds couldn’t finance the deficit with borrowed money…they’d be forced to print it…causing hyperinflation.

“As long as they can finance it, on the other hand…we could face a long depression.
“That’s the risk that no one is paying attention to…and no one is prepared for. That’s why it seems like the most likely outcome. A long, slow, on-again, off-again depression…just like we forecast 10 years ago.”

You Will Lose Your Private Health Insurance

By Robert Tracinski

Before Thanksgiving, the Senate voted to opening debate on President Obama's health-care bill, and that debate has begun in earnest this week.

Well, if they want a debate, let's let them have it. But let's not get distracted by the sideshows Senate Majority Leader Harry Reid has planned for us. Receive news alerts Sign Up Robert Tracinski RealClearPoliticsHealth care

Forget about abortion. Of course the left will accept restrictions on funding for abortion, because they want to keep moderate Democrats on board for the goal they know is really important: giving the government a dominant role in health care. Everything else is just details, and funding for abortions is an issue to which the left can return at leisure later on-once government is firmly in charge of everything.

And don't bother debating the "public option," either, because it's already dead; enough Democratic senators have come out against it. But Harry Reid is all too happy to have a debate over the public option so he can make a show of "compromising" and giving it up. And while we're having that fake debate, he's hoping that we won't be challenging everything else in the bill.

So let's get straight what the real essentials of the bill are-and how disastrous they are.

Three provisions constitute the vicious heart of the Democrats' health-care overhaul.

The first is "guaranteed issue" and "community rating." This is the requirement that insurance companies have to offer coverage to people who are already sick, and that they be limited in their ability to charge higher rates for customer who pose a higher risk. The extra expense to the insurance companies of covering people with pre-existing conditions will get passed on to existing customers in the form of higher premiums. But why spend years paying these inflated premiums for insurance you're not using, when you can get exactly the same benefits by waiting until you actually fall ill? The obvious result is that million of people, especially healthy young people, will quickly realize that there is no reason to buy health insurance until they get sick.
Rather than increasing the number of insured by making health insurance more affordable, this bill makes health insurance more expensive and increases the incentive to simply drop your insurance until you need someone to pay for your medical bills. It is an attempt to turn health insurance into what the left really wants: another welfare program in which everyone is entitled to free benefits, mandated by the government. But this would wreck private health insurance, making the whole industrial financially unsustainable.

Following the usual pattern of government intervention, the health-care bill offers another intervention as the solution for the problem created by the first. The "individual mandate" requires everyone to buy health insurance and subjects us to a tax if we fail to do so. But this is an especially onerous new tax, the first tax not tied to any kind of income or activity. It's not a tax on stock-market profits, say, or a tax on buying cigarettes. It's just a tax for existing.
So fearing a public backlash, Congress didn't have the guts to make this new tax very large-only $750. Yet actual insurance can cost more than $3,000 per year-and as we shall see, this legislation goes out of its way to drive up those rates by mandating more lavish coverage. So we end up getting the worst of both worlds. This provision won't actually drive anyone to buy health insurance and prop up the risk pools for those who are insured. All it will accomplish is to create a brand new form of tax.

But the biggest power-grab in the bill is the government takeover of the entire market for health insurance. The bill requires all new policies to be sold on a government-controlled exchange run by a commissioner who is empowered to dictate what kinds of insurance policies can be offered, what they must cover, and what they can charge.

Right now, your best option for reducing the cost of your health insurance is to buy a policy with a high deductible, which leaves you to pay for routine checkups and minor injuries (preferably from savings held in a tax-free Health Savings Account) but which covers your needs in catastrophic circumstances-a bad car accident, say, or expensive treatment for cancer. This is the kind of coverage I have.

But the health-insurance exchange is intended to eliminate precisely this kind of low-cost catastrophic coverage. Its purpose is to force health-insurance companies to offer comprehensive coverage that pays for all of your routine bills-which in turn comes at a higher price. So under the guise of making health insurance more affordable, this bill will restrict your menu of choices to include only the most expensive options.

So there we have the real essence of this bill. It restricts our choice of which insurance to buy and pushes us into more expensive plans. At the same time, it destroys the economic incentive to purchase insurance in the first place and replaces insurance with a free-floating tax on one's very existence.

By all means, let's debate some of that in the Senate.

When you understand what this bill does, you can see why the Democrats would be happy to compromise and drop the public option-for now. This bill so comprehensively wrecks private health insurance that pretty soon a "public option" will seem like the only alternative, and they will already have put into place one of the new taxes needed to pay for it. If the left's goal is to impose socialized medicine in America, this bill does it in the most callous and destructive way possible. It smashes private health care-then leaves us stranded in the rubble, at which point we will be expected to come crawling back to the same people who caused the disaster and ask them to save us.

That is the final and perhaps most compelling reason to kill this bill: the sheer arrogance of the whole enterprise. It is the arrogance of stampeding an unwilling public toward a monstrous 2,000-page piece of legislation while admitting that it still has huge problems, but promising that it will all somehow be fixed later on. It's the arrogance of selling us a bill that expands government spending by hundreds of billions of dollars while telling us that it will reduce the deficit. It is the sheer unmitigated gall of appointing a bureaucrat to run a government-controlled insurance market that takes away all of our health choices-and then calling this bureaucrat the Health Choices Commissioner.

That's the kind of government arrogance that has to be smacked down hard, and that alone is reason to demand that your senator reject this vicious bill in its entirety.

Thursday, December 10, 2009

Obama Used Faulty Anecdote in Sept 9, 2009 Speech to Congress

President Barack Obama, seeking to make a case for health-insurance regulation, told a poignant story to a joint session of Congress last week. An Illinois man getting chemotherapy was dropped from his insurance plan when his insurer discovered an unreported gallstone the patient hadn't known about.

"They delayed his treatment, and he died because of it," the president said in the nationally televised address.

In fact, the man, Otto S. Raddatz, didn't die because the insurance company rescinded his coverage once he became ill, an act known as recission. The efforts of his sister and the office of Illinois Attorney General Lisa Madigan got Mr. Raddatz's policy reinstated within three weeks of his April 2005 rescission and secured a life-extending stem-cell transplant for him. Mr. Raddatz died this year, nearly four years after the insurance showdown.

Wow, despite the insurance company not being in the best light here, you would like the most power person in the world would be able to get his ONE anecdote correct.

New Jobless Claims Rise to 474,000 After Falling For 5 Straight Weeks

The number of newly laid-off workers seeking jobless benefits rose more than expected last week, after falling for five straight weeks.

Despite the increase, claims have fallen steadily since this summer, a sign that job cuts are slowing and hiring could pick up as soon as early next year amid a broad economic recovery.
Initial claims for unemployment insurance rose by 17,000 to a seasonally adjusted 474,000, the Labor Department said Thursday. That was above analysts' expectations of 460,000 new claims.

Still, claims will have to fall to about 425,000 for several weeks to signal the economy is actually adding jobs, according to many economists.

Healthcare Math

So if we assume the cost of healthcare reform will be around $1 trillion...

...and we assume that there are 47 million uninsured (a high estimate to be sure)...

...and we assume that Obama's estimate of the annual average cost for healthcare now is $12,000...

...some simple math produces:

Cost for healthcare reform to insure 1 person = $21,277
That's almost $10,000 more than what the average person pays annually now. Intersting...

44% Want Bush Back

Perhaps the greatest measure of Obama's declining support is that just 50% of voters now say they prefer having him as President to George W. Bush, with 44% saying they'd rather have his predecessor. Given the horrendous approval ratings Bush showed during his final term that's somewhat of a surprise and an indication that voters are increasingly placing the blame on Obama for the country's difficulties instead of giving him space because of the tough situation he inherited.

Just What is the Average Cost of Healthcare Insurance?

1. The Association of Health Insurance Plans, an insurance trade group, conducts a survey of individual policies each year. In December 2007, they issued a report with information about average premiums sorted by age, as well as average premiums by state.

The report states that nationwide, annual premiums averaged $2,613 for single coverage and $5,799 for family plans in the 2006-2007 period. This is where McCain most likely obtained his numbers, though some would argue that information obtained from industry associations is not reliable, given the goals of the association: promoting private insurance plans.

The report goes on to state that for single policies, annual premiums ranged from $1,163 for persons under age 18 to $5,090 for persons aged 60-64. For family policies, premiums ranged from $2,325 for policies covering children under age 18 to $9,201 for families headed by persons aged 60-64.

The limitation of relying on this study is that it is only based on individual policies and does not incorporate the costs of corporate insurance policies.

2. The National Coalition on Health Care, the nation's largest non-profit, non-partisan alliance working to improve America's health care, places the average annual cost that a health insurer charges an employer for a health plan covering a family of four at $12,100 (2007 estimate). This relays the true cost of the insurance to the employer, even though the average cost per employee for family coverage is estimated at $3,300.

The information comes from a 2007 report by the Henry J. Kaiser Family Foundation which goes on to state that the average annual cost for health care premiums for individuals is $4,500, of which the average person actually pays $694.

A major limitation of this study is that it only addresses employer-sponsored health care plans, leaving out the 40 percent of Americans (U.S. Census Bureau number) not covered by corporate health care plans. But it seems, Senator Obama still used the $12,000 estimate for health care costs, even though that estimate pertains for corporate costs for families of four, not the actual cost felt by employees, and does not account for those without corporate insurance.

3. A third study conducted by Leighton Ku of George Washington University and Matthew Broaddus of the Center on Budget and Policy Priorities compares the costs of Medicaid to individual health care plans. The study found that average medical expenditures per person are lower under public programs like Medicaid or the State Children's Health Insurance Program (SCHIP) than under private insurance.

Specifically, the study places the cost of insuring those on Medicaid at $5,700 versus $7,000 per year for private policies, after adjusting for the poor health of Medicaid recipients on average.

In summary, the actual annual cost would likely fall around $9,000-10,000 per year, per family. This means both candidates are using erroneous numbers. Anyone surprised?

Health Care 'Sticker Shock'

Get ready for a whole new set of trade-offs. For example, people in their 50s and early 60s, when health problems tend to surface, are likely to pay less than they would now. Those in their 20s and 30s, who get the best deals today, will face higher premiums, though for better coverage.

Most of the uninsured will be covered, but not all. As many as 24 million people would remain uninsured in 2019, many of them otherwise eligible Americans who still can't afford the premiums.

Wednesday, December 9, 2009

House Panel Passes College Football Playoff Bill

A House subcommittee approved legislation Wednesday aimed at forcing college football to switch to a playoff system to determine its national champion, over the objections of some lawmakers who said Congress has meatier targets to tackle.

The bill, which faces steep odds, would ban the promotion of a postseason NCAA Division I Football Bowl Subdivision game as a national championship unless it results from a playoff.

Why don't we just shread the Constitution while we are at it?

Obama's Safe School Czar Kevin Jennings is Keynote Speaker at 2001 GLSEN Conference which Gave High School Students' "Fisting Kits"

In March 2000 the Gay, Lesbian, and Straight Education Network (GLSEN) organization of Massachusetts held its 10 Year Anniversary GLSEN/Boston conference at Tufts University. This conference was fully supported by the Massachusetts Department of Education, the Safe Schools Program, the Governor’s Commission on Gay and Lesbian Youth, and some of the presenters even received federal money. During the 2000 conference, workshop leaders led a “youth only, ages 14-21″ session that offered lessons in “fisting” a dangerous sexual practice. During another workshop an activist asked 14 year-old students, “Spit or swallow?… Is it rude?” The unbelievable audio clip is posted here. Barack Obama’s “Safe Schools Czar” Kevin Jennings is the founder of GLSEN. He was paid $273,573.96 as its executive director in 2007. Jennings was the keynote speaker at the 2000 GLSEN conference.

This is Obama's "Safe School" czar! What company our President keeps...

Sen. Feinstein Says It’s ‘Morally Correct’ to Force Taxpayers to Fund Abortion

CRU's Source Code: Climategate Uncovered

We can now prove, beyond a shadow of a doubt, that the hockey stick is an absolute ruse. The hockey stick graph cannot possibly be based on the actual data. (Wherever and whatever that data might have been. The CRU has admitted destroying the raw data.)

The bottom line is that if this kind of code were to be used by, say, an insurance actuary -- or by someone writing banking software or for tracking the stock market -- the programmer would immediately be fired ... and probably face criminal prosecution.

And the former apparently wasn't a particularly well-guarded secret, although the actual adjustment period remained buried beneath the surface.

Plotting programs such as print this reminder to the user prior to rendering the chart:

  • IMPORTANT NOTE: The data after 1960 should not be used. The tree-ring density records tend to show a decline after 1960 relative to the summer temperature in many high-latitude locations. In this data set this "decline" has been artificially removed in an ad-hoc way, and this means that data after 1960 no longer represent tree-ring density variations, but have been modified to look more like the observed temperatures.

Others, such as, issue this warning:

  • NOTE: recent decline in tree-ring density has been ARTIFICIALLY REMOVED to facilitate calibration. THEREFORE, post-1960 values will be much closer to observed temperatures then (sic) they should be which will incorrectly imply the reconstruction is more skilful than it actually is. See Osborn et al. (2004).

Tuesday, December 8, 2009

Convict Robert Creamer Invited to Obama State Dinner

Creamer resigned from Citizen Action/Illinois after the FBI began investigating him for bank fraud and tax evasion at Illinois Public Action. He was convicted in 2006 and sentenced to five months in federal prison in Terre Haute, Indiana, plus eleven months of house arrest.

While in prison—or “forced sabbatical,” he called it—Creamer wrote a lengthy political manual, Listen to Your Mother: Stand Up Straight! How Progressives Can Win (Seven Locks Press, 2007).
The book was endorsed by leading Democrats and their allies, including SEIU boss Andy Stern—the most frequent visitor thus far to the Obama White House—and chief Obama strategist David Axelrod, who noted that Creamer’s tome “provides a blueprint for future victories.”

In the book, Creamer draws lessons from decades of experience on the radical left, including the teachings of arch-radical Saul Alinsky, and several episodes from Rep. Schakowsky’s political career. He also lays out a “Progressive Agenda for Structural Change,” which includes a ten-point plan for foisting universal health care on the American people in 2009:

  1. “We must create a national consensus that health care is a right, not a commodity; and that government must guarantee that right.”
  2. “We must create a national consensus that the health care system is in crisis.”
  3. “Our messaging program over the next two years should focus heavily on reducing the credibility of the health insurance industry and focusing on the failure of private health insurance.”
  4. “We need to systematically forge relationships with large sectors of the business/employer community.”
  5. “We need to convince political leaders that they owe their elections, at least in part, to the groundswell of support of [sic] universal health care, and that they face political peril if they fail to deliver on universal health care in 2009.”
  6. “We need not agree in advance on the components of a plan, but we must foster a process that can ultimately yield consensus.”
  7. “Over the next two years, we must design and organize a massive national field program.”
  8. “We must focus especially on the mobilization of the labor movement and the faith community.”
  9. “We must systematically leverage the connections and resources of a massive array of institutions and organizations of all types.”
  10. “To be successful, we must put in place commitments for hundreds of millions of dollars to be used to finance paid communications and mobilization once the battle is joined.”
He was also at the White House state dinner last month—together with Stern, Axelrod, and other cronies—despite the fact that ex-convicts are usually barred from such events.

U.K., U.S. Top Aaa Ratings Tested by Debt Burdens, Moody’s Says

Moody’s Investors Service said the top debt ratings on the U.S. and the U.K. may “test the Aaa boundaries” because public finances are worsening in the wake of the global financial crisis.

Moody’s defines “resilient” countries as “Aaa countries whose public finances are deteriorating considerably and may therefore test the Aaa boundaries, but which display, in our opinion, an adequate reaction capacity to rise to the challenging and rebound.”

We shall see if we have an adequate, or correct reaction then...

Harry Reid's History Lesson

"When this body was on the verge of guaranteeing equal civil rights to everyone regardless of the color of their skin, some senators resorted to the same filibuster threats that we hear today."

Historians also faulted Mr. Reid's curious reference to the Senate civil rights debates of the 1960s. After all, it was Southern Democrats who mounted an 83-day filibuster of the 1964 Civil Rights Bill. The final vote to cut off debate saw 29 Senators in opposition, 80% of them Democrats. Among those voting to block the civil rights bill was West Virginia Senator Robert Byrd, who personally filibustered the bill for 14 hours. The next year he also opposed the Voting Rights Act of 1965. Mr. Byrd still sits in the Senate, and indeed preceded Mr. Reid as his party's majority leader until he stepped down from that role in 1989.

Harry Reid Likens Healthcare Opposition to Slavery

“If you think you’ve heard these same excuses before, you’re right,” Reid said. “When this country belatedly recognized the wrongs of slavery, there were those who dug in their heels and said, ‘Slow down, it’s too early, things aren’t bad enough.’ ”

The New York Times, Aug. 14, 1976, "Many Signs that Earth may be Headed for Another Ice Age."

In 1974, the National Science Board announced: "During the last 20 to 30 years, world temperature has fallen, irregularly at first but more sharply over the last decade. Judging from the record of the past interglacial ages, the present time of high temperatures should be drawing to an end…leading into the next ice age."

In 2002 I stood in a room of the Smithsonian. One entire wall charted the cooling of our globe over the last 60 million years. This was no straight line. The curve had two steep dips followed by leveling. There were no significant warming periods. Smithsonian scientists inscribed it across some 20 feet of plaster, with timelines. Last year, I went back. That fresco is painted over. The same curve hides behind smoked glass, shrunk to three feet but showing the same cooling trend

Science's prediction of "A full-blown, 10,000 year ice age," came from its March 1, 1975 issue. The Christian Science Monitor observed that armadillos were retreating south from Nebraska to escape the "global cooling" in its Aug. 27, 1974 issue.

Copenhagen Climate Summit: 1,200 limos, 140 Private Planes and Caviar Wedges

Ms Jorgensen reckons that between her and her rivals the total number of limos in Copenhagen next week has already broken the 1,200 barrier. The French alone rang up on Thursday and ordered another 42. "We haven't got enough limos in the country to fulfil the demand," she says. "We're having to drive them in hundreds of miles from Germany and Sweden."

And the total number of electric cars or hybrids among that number? "Five," says Ms Jorgensen.

The airport says it is expecting up to 140 extra private jets during the peak period alone, so far over its capacity that the planes will have to fly off to regional airports – or to Sweden – to park, returning to Copenhagen to pick up their VIP passengers.

According to the organisers, the eleven-day conference, including the participants' travel, will create a total of 41,000 tonnes of "carbon dioxide equivalent", equal to the amount produced over the same period by a city the size of Middlesbrough (Pop. 142,691, UK Census 2001).

$246,436 Per Stimulus Job

The Obama Administration is touting that their stimulus program has saved or created 640,329 jobs since it was enacted back in February through the end of October. This number is updated and posted on the Administration’s web site. That amounts to $246,436 per job based on the $157.8bn that has been awarded so far! Total compensation earned by the average payroll employee during October, on an annualized basis, was $59,867.

If the government had simply used the funds awarded so far to pay for a year’s worth of labor, that would have paid for 2.6mn jobs!

Pelosi Endorses ‘Global’ Tax on Stocks, Bonds, and other Financial Transactions

House Speaker Nancy Pelosi (D-Calif.) endorsed the idea of a “global” tax on stock trades and other financial transactions, saying the estimated $150 billion in annual revenue from such a tax could be used to help fund more stimulus spending.

“I think there would be a market for it among the American people to say that we are all participating in the economic prosperity of our country, and we are all pitching in to continue that prosperity,” said Pelosi.

What a socialist idea. Since when is it my job to contribute to the economic prosperity of our country? That's not my duty as a citizen, nor should it be. She has it completely backwards. You don't force people to be stewards of their country, because people don't want to do that. They want to take care of themselves and their own. The best way to allow them to do that is for the government to get out of the way. The end result is that by individuals pursuing their own selfish interest, the economy as a whole benefits because it is a positive sum game. When you take from one and give it to another, as she calls it: chipping in, it's a zero sum game because one has to lose in order for another to gain.

The Complete ACORN Whitewash Report: Nothing to See Here Folks, Move Along

Well, ACORN retained a law firm to investigate its operations and, surprise, the law firm found that ACORN hadn’t done anything wrong in the undercover videos filmed by James O’Keefe and Hannah Giles. The review, overseen by former Massachusetts Attorney General Scott

Harschbarger, a long-time ally of ACORN, found that any problems within ACORN are, gosh darn it, simply because ACORN was too successful, i.e. grew too big and too fast. The problems are also mostly, conveniently, the result of people who are no longer employed by ACORN, i.e. Wade Rathke.

The entire report can be summed up: Wade Rathke really made a mess of things. The current management, i.e. Bertha Lewis, has been trying to reform the organization and she is really, really committed to it now. ACORN has a “roadmap” for reform that, while it may take a while to implement, will really fix everything you thought was wrong with ACORN. Just trust them.

Supplies with Obama Logo Surprise School

Pencils and notebooks resembling President Barack Obama’s 2008 campaign ads have been sold in at least one Columbia school and other public schools, causing the company that distributes the materials to travel around the state yanking the supplies out of machines.

“Don’t be mad at us,” said Greg Jones, a sales representative with Pencil Wholesale. “It was a total accident.”

Sure it was. And what kind of businessman responds this? "There were razorblades in your soup, but don't be mad, it was an accident."

Tuesday, December 1, 2009

Healthcare Hoops

Map of Bogus Jobs Created by Stimulus,-97.119141&spn=23.633433,57.128906&t=p&z=4&source=embed

The Washington Examiner has created this interactive map to document exaggerated job claims of the $787 billion stimulus.

11/19 update: The total number of jobs we have found to be "not really created or saved" now approaches 80,000. Several new states and the Territory of Guam have new entries. We will continue updating the map in the coming weeks.

Entrepreneurs Go on Strike

The point is that politicians are equally ill-equipped to run the auto industry or the health industry or the lending industry or the insurance industry -- and their determination to do so is sucking all the dynamism from the entrepreneurial class in this country.

Taking risks and investing blood, sweat, and tears into a business that will -- should it become successful -- fall under the strict supervision of Washingtonians is simply a non-starter.

For many decades, the American dream has been undergirded by the faith that regardless of its current state, the economy would come back around thanks to the greatness of ordinary people being free to do extraordinary things. Thus the bold gunslinger mentality many business owners have had in previous recessions, refusing to participate, and even expanding cheaply to grab market share in the next recovery.

But it's different now, and there is no denying it. The dream itself is being killed by legal and regulatory micromanagement. Washington is determined to employ policies to cure something that can be cured only by government getting the hell out of the way.

HRES 615: Urging Those Who Vote For Public Healthcare to Forgo FEHBP

Resolved, That it is the sense of the House of Representatives that Members who vote in favor of the establishment of a public, federal government run health insurance option are urged to forgo their right to participate 2 in the Federal Employees Health Benefits Program 3 (FEHBP) and agree to enroll under that public option.

Howard Dean Declares Debate Between Capitalism and Socialism to Be Over

U.S. to Stop Counting New Missiles in Russia

The United States is about to lose a key arms-control tool from the closing days of the Cold War -- the right to station American observers in Russia to count the long-range missiles leaving its assembly line.

The end of full-time, on-site access will likely ignite complaints in Congress, with insiders from both parties arguing over whether the George W. Bush or the Obama administration is responsible.

Although the United States does not produce new long-range missiles, Russia continues to do so and has built dozens of missiles since the monitoring started 15 years ago.

Monday, November 30, 2009

ObamaCare’s Cost Could Top $6 Trillion

One gimmick makes the new entitlement spending appear smaller by not opening the spigot until late in the official 10-year budget window (2010–2019). Correcting for that gimmick in the Senate version, Sen. Judd Gregg (R-NH) estimates, “When all this new spending occurs” — i.e., from 2014 through 2023 — “this bill will cost $2.5 trillion over that ten-year period.”

Another gimmick pushes much of the legislation’s costs off the federal budget and onto the private sector by requiring individuals and employers to purchase health insurance. When the bills force somebody to pay $10,000 to the government, the Congressional Budget Office treats that as a tax. When the government then hands that $10,000 to private insurers, the CBO counts that as government spending. But when the bills achieve the exact same outcome by forcing somebody to pay $10,000 directly to a private insurance company, it appears nowhere in the official CBO cost estimates — neither as federal revenues nor federal spending. That’s a sharp departure from how the CBO treated similar mandates in the Clinton health plan. And it hides maybe 60 percent of the legislation’s total costs. When I correct for that gimmick, it brings total costs to roughly $2.5 trillion (i.e., $1 trillion/0.4).

When we correct for both gimmicks, counting both on- and off-budget costs over the first 10 years of implementation, the total cost of ObamaCare reaches — I’m so sorry about this — $6.25 trillion. That’s not a precise estimate. It’s just far closer to the truth than President Obama and congressional Democrats want the debate to be.

Obama's Cabinet Appointments: Less Than 10% with Private Sector Expierence

"Public sector employment has ranged since the 1950s at between 15 percent and 19 percent of the population,” yet the Obama Cabinet got more than 90 percent of its prior experience in this relatively thin slice of America. So, the current Cabinet largely lacks a practical understanding of the country and companies which it now regulates — understanding that might come in handy now that our government is more enmeshed than ever with banks and auto makers, and is pushing for radically different rules for energy and health-care producers and consumers.

Is it really any wonder then that the bailouts, the stimulus, or the ludacris spending have not worked?

Health Bills Fail to Block Illegals From Coverage

Hundreds of thousands of illegal immigrants could receive health care coverage from their employers under the bills winding their way through Congress, despite President Obama's explicit pledge that illegal immigrants would not benefit.

The House bill mandates, and the Senate bill strongly encourages, businesses to extend health care coverage to all employees. But the bills do not have exemptions to screen out illegal immigrants, who usually obtain jobs by using false identities and are indistinguishable from legal workers.

A rough estimate by the Center for Immigration Studies suggests that the practical effect of the mandates would be that about 1 million illegal immigrants could obtain health insurance coverage through their employers.

"If it was not bad enough that illegal immigrants take jobs that rightfully belong to citizens and legal immigrants, now they will get health care benefits that should go to Americans," said Rep. Lamar Smith of Texas, the top Republican on the House Judiciary Committee. "If they were not in the country, we wouldn't have to worry about emergency room or health insurance costs at all. And Americans would have these jobs."

HHS Would Become Federal Giant Under Senate Plan

A quick search of the Senate health bill will bring up "secretary" 2,500 times.
That's because Health and Human Services Secretary Kathleen Sebelius would be awarded unprecedented new powers under the proposal, including the authority to decide what medical care should be covered by insurers as well as the terms and conditions of coverage and who should receive it.

"The legislation lists 1,697 times where the secretary of health and humans services is given the authority to create, determine or define things in the bill," said Devon Herrick, a health care expert at the National Center for Policy Analysis.
For instance, on Page 122 of the 2,079-page bill, the secretary is given the power to establish "the basic per enrollee, per month cost, determined on average actuarial basis, for including coverage under a qualified health care plan."

The HHS secretary would also have the power to decide where abortion is allowed under a government-run plan, which has drawn opposition from Republicans and some moderate Democrats.

And the bill even empowers the department to establish a Center for Medicare and Medicaid Innovation that would have the authority to make cost-saving cuts without having to get the approval of Congress first.

Whatever Became of ACORN’s ‘Internal Investigation’?

Mr. Harshbarger promised to release preliminary findings of his review at the end of October. Monday is the end of November and his preliminary findings don’t seem any closer to release.

Still, ACORN has recently filed suit against the federal government to restore its federal funding. And just this week, Eric Holder’s Justice Department issued a ruling saying federal agencies could ignore Congressional bans on funding and could continue to pay ACORN for existing contracts.

Sunday, November 29, 2009

Climate Change Data Dumped

SCIENTISTS at the University of East Anglia (UEA) have admitted throwing away much of the raw temperature data on which their predictions of global warming are based.

It means that other academics are not able to check basic calculations said to show a long-term rise in temperature over the past 150 years.

The UEA’s Climatic Research Unit (CRU) was forced to reveal the loss following requests for the data under Freedom of Information legislation.

The data were gathered from weather stations around the world and then adjusted to take account of variables in the way they were collected. The revised figures were kept, but the originals — stored on paper and magnetic tape — were dumped to save space when the CRU moved to a new building.

Saturday, November 28, 2009

White House: State Dinner Crashers Met Obama

After the Secret Service insisted that President Barack Obama was never endangered by a security breach that allowed a couple to crash his first state dinner, the White House has released a photo showing that not only did the pair get close to Obama, they actually shook hands and talked to him.

I wonder if the coverage would be different if Bush was still in office?

Dubai is Just a Harbinger of Things to Come for Sovereign Debt

According to new estimates by Moody’s, the credit rating agency, the total stock of sovereign debt worldwide will have risen by nearly 50 per cent between 2007 and 2010 to $15.3 trillion. The great bulk of this increase comes not from irrelevant little states like Dubai, but from the big advanced economies – America, Europe, and Japan.

Dubai debt crisis: Now British Banks Face Fresh Crisis After Investing Billions

British banks were teetering on the brink of a fresh meltdown today after it emerged they had invested heavily in crisis-hit Dubai.

An $80billion debt default in the emirate has already reawakened the spectre of a global 'double dip' - that the first shoots of recovery could be wiped out by a second wave of recession.

Dubai's debt problems are a hangover from a property bubble that imploded after the financial crisis derailed its plans to become a magnet for tourists and a regional hub for everything from shipping to entertainment.

Banks' exposure to a Dubai default pales in comparison to the $2.8 trillion in writedowns the International Monetary Fund estimates U.S. and European lenders will have to make between 2007 and 2010 as a result of the credit crisis.

Dubai in Deep Water as Ripples from Debt Crisis Spread

Fears of a dangerous new phase in the economic crisis swept around the globe yesterday as traders responded to the shock announcement that a debt-laden Dubai state corporation was unable to meet its interest bill.

Although the scale of Dubai’s debts is comparatively modest at $80 billion (£48 billion), the uncertainty spooked the markets, with no one sure who its creditors are. Several banks rushed out statements to reassure investors that their exposure was small.

IAEA chief: Iran Investigation at 'Dead End'

The International Atomic Energy Agency probe of Iran's nuclear program is at a dead end because Tehran is not cooperating, the chief of the U.N. nuclear watchdog said Thursday in an unusually blunt expression of frustration four days before he leaves office.

Mohamed ElBaradei also warned that international confidence in Iran's assertions of purely peaceful intent shrank after its belated revelation of a previously secret nuclear facility. And he criticized Tehran for not accepting an internationally endorsed plan meant to delay its achieving the ability to make nuclear weapons.

Iran says it is enriching only to power a future network of nuclear reactors. But enrichment can also produce fissile warhead material. Iran continues enriching, despite three sets of U.N. Security Council sanctions meant to make it freeze that activity and has built an enriched stockpile that could arm two nuclear warheads.

Climategate E-mails May Scuttle Barack Obama's Cap and Trade Laws

But the real car crash for Obama is on Capitol Hill where it is now confidently believed his Cap and Trade climate legislation is toast. It was always problematic; but with a growing awakening to the scale of the scientific imposture sweeping the world, as far as the Antipodes, the clever money is on Cap and Trade laws failing to pass, with many legislators sceptical and the mid-term elections looming ever closer.

The term that Fox News is now applying to the Climategate e-mails is “game-changer”. For the first time, Anthropogenic Global Warming cranks are on the defensive, losing their cool and uttering desperate mantras such as “You can be sceptical, not denial.” Gee, thanks, guys. In fact we shall be whatever we want to be, without asking your permission.

At this rate, Copenhagen is going to turn into a comedy convention with the real world laughing at these liars. Now is the time to mount massive resistance to the petty tyrants and hit them where it hurts – in the wallet. Further down the line there may be, in many countries, a question of criminal prosecution of anybody who has falsified data to secure funds and impose potentially disastrous fiscal restraints on the world in deference to a massive hoax. It’s a new world out there, Al, and, as you may have noticed, the climate is very cold indeed.

Wednesday, November 25, 2009

The Real Story of Thanksgiving: A Celebration of Private Property and the Free Market

Here is the part [of Thanksgiving] that has been omitted: The original contract the Pilgrims had entered into with their merchant-sponsors in London called for everything they produced to go into a common store, and each member of the community was entitled to one common share.
"All of the land they cleared and the houses they built belong to the community as well. They were going to distribute it equally. All of the land they cleared and the houses they built belonged to the community as well. Nobody owned anything. They just had a share in it. It was a commune, folks. It was the forerunner to the communes we saw in the '60s and '70s out in California – and it was complete with organic vegetables, by the way.

Bradford, who had become the new governor of the colony, recognized that this form of collectivism was as costly and destructive to the Pilgrims as that first harsh winter, which had taken so many lives.

He decided to take bold action. Bradford assigned a plot of land to each family to work and manage, thus turning loose the power of the marketplace.

"That's right. Long before Karl Marx was even born, the Pilgrims had discovered and experimented with what could only be described as socialism. And what happened?
It didn't work! Surprise, surprise, huh?

What Bradford and his community found was that the most creative and industrious people had no incentive to work any harder than anyone else, unless they could utilize the power of personal motivation!

But while most of the rest of the world has been experimenting with socialism for well over a hundred years – trying to refine it, perfect it, and re-invent it – the Pilgrims decided early on to scrap it permanently.

What Bradford wrote about this social experiment should be in every schoolchild's history lesson. If it were, we might prevent much needless suffering in the future.

"'The experience that we had in this common course and condition, tried sundry years...that by taking away property, and bringing community into a common wealth, would make them happy and flourishing – as if they were wiser than God,' Bradford wrote. 'For this community [so far as it was] was found to breed much confusion and discontent, and retard much employment that would have been to their benefit and comfort. For young men that were most able and fit for labor and service did repine that they should spend their time and strength to work for other men's wives and children without any recompense...that was thought injustice.'

Why should you work for other people when you can't work for yourself? What's the point?
"Do you hear what he was saying, ladies and gentlemen? The Pilgrims found that people could not be expected to do their best work without incentive. So what did Bradford's community try next? They unharnessed the power of good old free enterprise by invoking the undergirding capitalistic principle of private property.

Every family was assigned its own plot of land to work and permitted to market its own crops and products. And what was the result?

'This had very good success,' wrote Bradford, 'for it made all hands industrious, so as much more corn was planted than otherwise would have been.'

Bradford doesn't sound like much of a... liberal Democrat, "does he? Is it possible that supply-side economics could have existed before the 1980s? Yes.

"Read the story of Joseph and Pharaoh in Genesis 41. Following Joseph's suggestion (Gen 41:34), Pharaoh reduced the tax on Egyptians to 20% during the 'seven years of plenty' and the 'Earth brought forth in heaps.' (Gen. 41:47)

In no time, the Pilgrims found they had more food than they could eat themselves.... So they set up trading posts and exchanged goods with the Indians. The profits allowed them to pay off their debts to the merchants in London.

And the success and prosperity of the Plymouth settlement attracted more Europeans and began what came to be known as the 'Great Puritan Migration.'"