Saturday, February 28, 2009

It Doesn't Matter What You're Doing, Drop It And Watch This Now

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The media, politicians, and even many businessmen have blamed today’s financial meltdown on capitalism. But in this talk, John Allison—the longest-tenured CEO of a top-25 financial services company—argues that this crisis is a legacy of the government’s anti-capitalist policies.

Mr. Allison uses his unique inside view of the financial services industry to show how massive government intervention into the U.S. economy—from the creation of the Federal Reserve in 1913 to a reckless crusade to encourage home-ownership—laid the groundwork for an unsustainable real estate boom. And he shows how the government’s response to the inevitable bust—a frenzied series of bailouts, nationalizations, and “stimulus” efforts—is only making things worse.

Finally, Mr. Allison explains the underlying philosophical reasons for the crisis, and discusses the immediate and long-term solutions. He shows that capitalism, far from being the cause of today’s crisis, is its only cure.

The best overall exposition, analysis and proposed solutions in one viewing of the crises I have seen to date. Nothing else even comes close.

Oh, and if there were even a sliver of justice in the world, Obambi would be immediately impeached and we would find a way to elect this man as President.

On Not Reading The Program Correctly

We wrote here and here about President Obama's appointment of Saudi shill Charles Freeman to chair the National Intelligence Council. Freeman's loyalty to Saudi Arabia and his outside-the-mainstream views on the Middle East make him a strange choice for the post, to say the least. But now even more explosive information about Freeman has emerged.

Check out this April 2002 program in which Freeman participated, sponsored by the Washington Institute for Near East Policy. Freeman's contributions included a tribute to the government of Saudi Arabia that began:

I urge anyone who has not done so to read the most profoundly self-reflective speech by a political leader that I have seen in the last quarter-century: Saudi Arabian Crown Prince Abdullah's December 2001 address to the Gulf Cooperation Council summit in Muscat.

Perhaps I am not reading the program correctly; I wonder whether Ambassador Freeman was the U.S. ambassador to Saudi Arabia, or the Saudi ambassador to America. (Laughter.)


Deliberate Falsehood Or Impenetrable Ignorance?

It's no secret that there is no intellectual integrity on the Left, but it's still hard not to be a bit shocked by liberals' reaction to the budget proposal that Barack Obama unleashed yesterday. Let's take the example of the New York Times, probably the most prominent voice of the Far Left in the U.S. Throughout the George W. Bush administration, the Times' editorial board waxed eloquent about the terrible consequences to be expected from the Bush deficits. Let's cite just a few examples.

April 16, 2003:

It is incredible to see a wartime president demanding a tax cut that would, in an instant, require a record $984 billion increase in the national debt, to $7.384 trillion, with annual deficits of $400 billion and more under a Republican Party that once bragged of budgetary rectitude.

Obama's budget contemplates a $1.75 trillion deficit in its first year, and does not even aspire to a deficit as small as $400 billion at any time in the future.

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I'll take both of the above for $400 (trillion).

Which reminds me, if government spending and the Keynesian "multiplier" works so well, why don't we just up the plans from a few trillion to a hundred trillion or so? Then we could all retire and be done with it -- no? ... (crickets chirping) ... No?

The "Pollutant"

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“The whole hockey-stick episode reminds me of the motto of Orwell’s Ministry of Information in the novel 1984: ‘He who controls the present, controls the past. He who controls the past, controls the future.’ The IPCC has made no serious attempt to model the natural variations of the earth’s temperature in the past. Whatever caused these large past variations, it was not due to people burning coal and oil.  If you can’t model the past, where you know the answer pretty well, how can you model the future?” he stated.  

“I keep hearing about the ‘pollutant CO2,’ or about ‘poisoning the atmosphere’ with CO2, or about minimizing our ‘carbon footprint.’  This brings to mind another Orwellian pronouncement that is worth pondering: ‘But if thought corrupts language, language can also corrupt thought.’ CO2 is not a pollutant

Plants, and our own primate ancestors evolved when the levels of atmospheric CO2 were about 1000 ppm, a level that we will probably not reach by burning fossil fuels

Global Warming Strikes North Dakota. Ya Sure.

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Snow, wind, and cold have assaulted North Dakota yet again in the past 24 hours. In Bismarck Friday morning the temperature was 12 below zero with a new inch or two of snow expected following Thursday’s more significant storm.

According to USA Today, snow in the southern part of the state was bad enough Thursday that snowplow operators were pulling off the road, blinded by the whiteout conditions. A foot of snow was common in the heaviest band.

The National Weather Service predicts a high temperature of 3 degrees Fahrenheit Friday in Bismarck, as well as additional snow. As of Thursday, three-quarters of the state’s roads were still snow-covered, in whole or in part, from the storm that just ended the day before.

By the end of January, many counties had more than 400 percent of normal snow totals on the ground, and Governor John Hoeven had declared a state of emergency. 

You betcha. (I grew up there so I get to have a little fun with having escaped it

Friday, February 27, 2009

The Gramscian Axe

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“There will be blood” — Niall Ferguson, speaks in Ottawa.

Ferguson observes that much of US consumption — indeed much of the Obama administration’s deficit — will be financed from overseas. And why do foreigners lend America money? Because crisis isn’t American. It’s global. And despite it’s weaknesses, the United States, was due its institutional strengths, the best bet in a storm.  That combination of characteristics made it a safe(r) haven in the the coming upheavals. As Ferguson puts it, the current crisis “hits others harder than the United States”.

However this is exactly the reverse of the tale which is currently being peddled by some liberal ideologues.

It is not a “crisis of globalization” that we are experiencing; but a Bush-Halliburton-Cheney depression.
It is supremely ironical that the response of some liberal ideologues is to simply to take the axe to what others regard as the safest tree in the forest.

Those Pesky Little People

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ANOTHER OBAMA TAX PROBLEM: Gawker: Obama’s Chief Vetter Has His Own Tax Problem. “White House general counsel Gregory Craig has seized control of Obama’s vetting process after a series of nominees with unpaid taxes. But his wife’s business may also have avoided taxes. Who vets the vetter?”

You know, for such enthusiasts of taxes and regulations, these folks don’t seem big on complying with taxes and regulation.

Tea For Me, But Not For O

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UPDATE: Going beyond Rick Santelli? A reader emails: “Thought I would share with you a suggestion given by Dave Ramsey this evening on CNBC. He suggested boycotting BOA & Citibank in order to send a message to the Feds (now part owners) that we will not do business with the Federal Gov’t. If you have a balance on a credit card with them transfer it to a responsible lender. Move your checking, savings or any other dealing to another lender.” Hmm. Did Dave Ramsey really say this?

Does This Sound Reasonable?

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Who Killed The Constitution

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That last post reminded me to post this one. You need to listen to all five parts...

What Constitution?

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ALTHOUSE: I don’t know how even to articulate an argument that it’s constitutional to give a vote to a D.C. representative in the House. “Shredding the Constitution. It’s not just for the Bush administration anymore.”

I think the argument is, I won.

Britney world arguments carry the day in Britney world. Shocking, isn't it?

Shhhh! If We Don't Talk About It Then It Won't Exist

Democrats have already spent twice as much as the total cost of the War in Iraq.
They are likely to spend 6 times as much as the total cost of the Iraq War before they are through with their bailouts.

On The Relation Of The 2 And The 40

The wealthiest 2% earn just 22% of all income, but pay 40+ percent of all taxes. Hmmm, isn't that double their "fair share"? Considering that something like 40% of Americans pay zero income taxes, shouldn't they be grateful that because the wealthy work so hard, earn so much, and pay so much in taxes, they get to pay nothing or worse yet receive a "tax credit" (welfare) check at tax time?

Thursday, February 26, 2009


Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.

“There will be blood.”

And much of today's mess is the fault of central bankers who targeted consumer-price inflation but purposefully turned a blind eye to asset inflation.

The Sweet Songbun Of ODirective 10-289

In the aftermath of the Korean War, North Korea imposed the notion of “songbun” on its citizenry. The poor and shiftless for being poor and shiftless had “good” songbun, and today they are the privileged class for having failed most impressively. The successful in North Korea were demonized for being that way, and today they are the bottom caste in a society that has committed economic suicide right before our eyes.

So while it’s surely a reach to suggest the U.S. is going the way of North Korea, it’s also true that bad policy has a way of slowly wrecking societies over time. At present, with the federal government creating incentives whereby companies will be rewarded by the tax code for not laying off unproductive employees, and just the same where irresponsible homebuyers are being sanctified for being irresponsible, the U.S. political class is imposing its own, minor form of songbun; these actions signaling our nation’s long-term economic decline.

Sound Familiar?

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Producing cellulosic ethanol from non-food feedstocks has been studied extensively at a local scale, but it’s difficult to estimate the environmental impacts on larger, heterogeneous regions. In this study, researchers evaluated two potential consequences of diverting usable land to biofuel production: either existing agricultural operations are intensified, or large areas of natural forest are cleared to increase cropland. Sound familiar?

Could cellulosic ethanol cause more harm than good? As always, it depends on how it’s actually implemented:

Cellulosic biofuels may yet serve as a crucial wedge in the solution to the climate change problem, but must be deployed with caution so as not to jeopardize biodiversity, compromise ecosystems services, or undermine climate policy.

-MIT Report

OInnumeracy Update

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But let's not stop at a 42% top rate; as a thought experiment, let's go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That's less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable "dime" of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.

Fast forward to this year (and 2010) when the Wall Street meltdown and recession are going to mean far few taxpayers earning more than $500,000. Profits are plunging, businesses are cutting or eliminating dividends, hedge funds are rolling up, and, most of all, capital nationwide is on strike. Raising taxes now will thus yield far less revenue than it would have in 2006.

Votes Have Consequences

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"I feel it's unfortunate that they don't continue the policy of the Bush administration, which was much more pro-Israel," said Akiva Homnick of Jerusalem.

"I happen to have a lot of family who live in Israel and I feel, personally, when you are dealing with people who are very strong against you, you have to stand up to them," said Tami Davudoff of Kew Gardens.

"Hillary had Mrs. Arafat here and she invited Mrs. Arafat for lunch when she was the first lady," added Babak Chafe of Great Neck. "She is pro-Palestinian 100 percent, really. Of course, we always knew it."

"The easy way to make a peace agreement is to pressure Israel because you can't pressure the Arabs," said Solomon Loewi of Monsey, N.Y.

All this could lead to a chilly reception when Mrs. Clinton arrives in the Middle East next week.
The Tinfoil Apocalypse will apparently be only one of them as far as I can tell...

How TVs Work

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Perfect Political Storm


What is most troubling about this story is the role played by politics. Congress was not just an observer of the real estate/bank meltdown, it was an active participant that played a role which, with hindsight, we can all agree was both discreditable and corrupt:

Why were both rating agencies still rating FNMA and FHLMC AAA? National politics. A downgrade of the two "government sponsored enterprises" to BB (which the average behavior of the rating agencies would have dictated) might have--after the fact--been argued to be the "cause" of their failure, sure to be condemned by the CEOs of both firms and by senior government officials.

The failure of credit rating agencies to accurately assess the risk of default is an important aspect of the history of the current crisis. If this failure was the result of a reasonable fear of antagonizing a nearly all-powerful Congress, it is one more way in which misguided government policy and excessive government power created the perfect storm

Karl Again

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BOB KRUMM: “Barack Obama’s plans to hyper-inflate the government bubble while he taxes the rich at confiscatory levels, is so certain to collapse the economy that I can only conclude that he is a brilliant Rovian plant whose purpose is to finally drive a stake into the heart of the era of big government.”

Too Hasty

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L.A. Times: “” You know, I haven’t bought the theory, circulating in some quarters, that Obama is an America-hating Manchurian Candidate who’s out to destroy the country. But when he put Joe Biden in charge of the stimulus, I began to wonder if my dismissal was too hasty. I mean, it’s not as if you’d put Biden in charge of something you wanted to succeed . . . .


Gabriel Schoenfeld blows the whistle on President Obama's decision to name Charles "Chas" Freeman, Jr. as chairman of the National Intelligence Council. This is the outfit responsible for prodcing National Intelligence Estimates.

Freeman is a shocking choice. He has a long and deep association with Saudi Arabia. In particular, he became president of the Middle East Policy Council in 1997. The MEPC is a mouthpiece for the Saudi government, which finances it. In this capacity, the MEPC has published an abridged version of the notorious essay by John Mearsheimer and Walt, "The Israel Lobby and U.S. Foreign Policy," which argues that American Jews have a stranglehold on the U.S. Congress, and use it to advance Israeli interests at the expense of those of the U.S. According to Schoenfeld, Freeman has expressly endorsed this thesis. It looks like Samantha Power won't be lonely in the Obama administration.

Wednesday, February 25, 2009

Do No Harm

Fidelity’s Edward “Ned” Johnson jumped into the controversial debate over President Obama’s “New Deal II” and what Johnson called government “make-work projects.”

“We can only hope that the government’s cure doesn’t further sicken the patient,” Johnson wrote in his annual update on Fidelity’s performance over the past year.

“During the ’30s, Congress - with guidance from the president and the same kind of good intentions - shifted the country’s cash flow away from productive businesses to government make-work projects, which most likely prolonged the Great Depression,” wrote Johnson, arguably Boston’s most powerful business executive.

As for the financial-system crisis, Johnson also took a somewhat anti-government conservative view toward its causes, saying “this climate was caused by many well-intentioned policies - stimulated by individuals at high levels in government and sanctioned by regulatory structures.”


Japanese scientists have
made a dramatic break with the UN and Western-backed hypothesis of
climate change in a new report from its Energy Commission.

Three of the five researchers disagree with the UN's IPCC view that
recent warming is primarily the consequence of man-made industrial
emissions of greenhouse gases. Remarkably, the subtle and nuanced
language typical in such reports has been set aside.

One of the five contributors compares computer climate modelling to
ancient astrology. Others castigate the paucity of the US ground
temperature data set used to support the hypothesis, and declare that
the unambiguous warming trend from the mid-part of the 20th Century has

Deep Breath

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83% of Egyptians are cool with killing American troops in Iraq? WTF kind of propaganda are they getting fed?


87% or Palestinians have no problem with, say, the al Qaeda attack against the USS Cole. Hey, let's give these guys $900 million!


Deep breath. On to the paranoia.


Uh Huh

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Remember back in February 2008 when President Obama came to Boise and spoke at a big rally? He made a big point of saying, “I won’t take away your guns,” because those nasty, dishonest Republicans were saying that Obama was going to do that.

It sure didn’t take long for Obama to reveal his intentions.

Weasel out: Banning further sales of “assault weapons” isn’t the same as “taking them away.” Uh huh.

The Only Problem Is John Galt

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ZOGBY/WEMEDIA POLL: “Nearly two-thirds of Americans (63%) said small business and entrepreneurs will lead the U.S. to a better future, while 52% said the same of science and technology leaders. Americans are far less optimistic about the leadership of government (31%), large corporations and business leaders (21%), or traditional news media such as newspapers, television, radio, and magazines (13%).”

Just Like You Know Who

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Put away childish things, President Obama said during his inauguration. He couldn't have found a theme more suited to the moment. The preoccupations that he and most politicians are used to running on, and that still characterize too many of his administration's utterances, are being exposed in the global economic disaster as the soppy indulgences they always were.

In any case, has Mr. Obama taken a gander at collapsing industrial production numbers around the world? He's going to get a big reduction in CO2 output whether he wants it or not. Nor will the public be moved to make costly, material changes in its energy habits, especially if the recent global cooling trend continues. What we'll get instead is already depressingly clear: climate pork

Put away the "energy independence" conceit. This notion, a favorite of Tojo and Hitler, was debunked by Churchill, who reasoned that true energy security came from a diversity of suppliers, not the foolish pursuit of self-sufficiency.

His Day Of Reckoning Awaits

I shall not want. He comforts the afflicted. He is a miracle worker.

He promises to provide for Americans from cradle to grave, while lightening the load of government on the backs of ordinary Americans. He promises not to increase their taxes "one penny." He promises to reduce their taxes.

He must be quite sure that the ordinary American owns no stock and thus will be untouched by the expiration of rate cuts on capital gains and dividends. Perhaps He counts on the stock market to assure that ordinary Americans will remain unaffected by an increase in the capital gains rate.

He thinks that increasing tax rates on the most productive Americans who shoulder the lion's share of the income tax load will not retard economic growth. He does not count on Americans to respond to the incentives and disincentives he places on them. He does not account for them.

He says our day of reckoning has arrived. Yet it is a judgment from which He exempts Himself. His day of reckoning awaits.

On Fire

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OBAMA: "We have launched a housing plan that will help responsible families facing the threat of foreclosure lower their monthly payments and refinance their mortgages. It's a plan that won't help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values."

THE FACTS: If the administration has come up with a way to ensure money only goes to those who got in honest trouble, it hasn't said so.

Defending the program Tuesday at a Senate hearing, Federal Reserve Chairman Ben Bernanke said it's important to save those who made bad calls, for the greater good. He likened it to calling the fire department to put out a blaze caused by someone smoking in bed.

"I think the smart way to deal with a situation like that is to put out the fire, save him from his own consequences of his own action but then, going forward, enact penalties and set tougher rules about smoking in bed."

Bring It On

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Son Of Porkulus

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“I yield to no ink-stained wretch in my vast and bottomless dislike of George W. Bush but let’s hold Obama’s feet to the fire here: He has consistently pledged to, you know, stop spending right after well, you know, he and Congress stop spending. . . . If Obama is serious about restoring trust and confidence in the government’s ability to live within its gargantuan means (and he should be), he should start by rewriting the $410 billion Omnibus Spending Bill that the Democrats have just dropped like a big, wet, steaming, stinking pile of…pork barbecue.”

The Most Technically Savvy President? Or Just An Asshole?

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Good luck searching through the omnibus spending bill:

The $500 billion omnibus spending bill to fund the most of federal government for the rest of the year will be debated in the House this week. And it has now finally been posted online.

It’s a PDF of scanned pages, meaning it can’t be searched or parsed in any other way. All 1,133 pages of it. Same with the 1,845-page explanatory statement.

That’s placing form over substance, putting a bill online in a useless format.

You can figure out my vote.

Tuesday, February 24, 2009

I Wish I Had Said That

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In other words, hate speech is an objectively meaningless concept created by ideological bigots who are incapable of defending their ideas without government intervention.
... But then I would be a hatemonger, wouldn't I?


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Hillary then diligently ducked the “or else” question of what penalties she would inflict on the young, helathy and recalcitrant who would prefer to hold off on buying insurance until they were sick. As a nostalgia piece here is a link to a lefty wondering why his party was so committed to forcing young, healthy members of the working class to subsidize the rest of us on health care; that seems like a good question but I am long resigned to not being smart enough to be a lefty.

Aww, Tom. You’re plenty smart enough. Just not angry, bitter or jealous enough.

As for the “or else” question, Obama and the Congress won’t be able to duck that one. I can only imagine what sort of sword they intend to dangle of recalcitrant ,comrades citizens who refuse to sign up for the program.


The longer he talked, the more it sounded like a campaign speech. That's not all bad; Obama is pretty good at giving campaign speeches--better, probably, than he is at anything else. But I think most people understand that it's time to quit campaigning. Obama has won the office; now he needs to do something with it.

The problem with governing is that he will now have to take responsibility for his decisions. Obama is committed to policies that will damage our economy, run up trillions of dollars in debt, increase taxes, cause inflation, make the nation less competitive, feed unproductive Democratic Party constituencies at the expense of the "real" economy, and make the United States weaker abroad. He can give any number of speeches, and Nancy Pelosi, Harry Reid and their cohorts will applaud. But reality will not yield so easily.

News Flash

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What is your assessment of the federal government's $787 billion stimulus package?

They are trying to restart consumption and lending, but I have a news flash: It was excessive consumption and excessive debt creation that got us into this mess. The government is trying to act as the consumer of last resort.

Rather than giving an $8,000 credit to buy homes, we should be reinvesting this money to change part of the industrial dynamic of the U.S. economy. Over the next 10 to 15 years, exports as a percentage of GDP are going to have to go up. We are going to be in a donnybrook. If we do not increase exports to replace the contraction of consumption, we go to the government to be the consumer of last resort. And then GDP growth will be worse off.

Monday, February 23, 2009

The Certainty Of Worse

The investors, the people who are the real poll on the state of the economy are not investing.  They are betting on the market continuing to go south. . . . Folks, Obama doesn't have it . . . Biden doesn't have it. Reid doesn't have it, Pelosi doesn't have it, Barney Frank doesn't have it.  There is nothing that is going to come along tomorrow and restore the value of your house, replenish your 401(k) and your kids' college fund, take the Dow back to 13 on the way to 15; it isn't there. It could be again, but not with the leadership we have now. 

That sounds right. If the United States government got out of the way, things might get worse before they get better. With the government in the way, we have only the certainty of worse. Washington is engaged in the doomed project of attempting to re-inflate a credit bubble. Can't be done.

Plan Nine From Chicago

That summit today was hilarious, especially the bit before all the bigshots went off to their "breakout sessions" and Obama told them, in best Community-Organizer-in-Chief mode, "not just to identify problems, but to identify solutions." A reader adds:

I haven't heard dialogue that leaden since Edward D. Wood was producing, directing and writing his classic films. Plan Nine From Chicago. All Obama needs is a silk body suit, a tin foil helmet and a shower head that's supposed to be a ray gun.

It'd be funny if the shower head wasn't shooting trillion-dollar bills . . .