Saturday, May 16, 2009

Any Chrysler Execs In The Audience Tonight?

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Yeah, all kinds of people are kicking themselves for voting for me. Any Chrysler execs in the audience tonight? Wave your top hats and monocles. Just kidding, they’re all in their panic rooms. If they want to figure out what the hell happened, I hope they stocked copies of The Communist Manifesto. It’ll change your life! [grins]

Well, it’s about time for me to clear the stage so Wanda Sykes can say things really loudly and wait for people to laugh. I hope she uses the Limbaugh jokes I sent her.

And that’s my time, folks, you’ve been great. POTUS out!


UPDATE: OK, I just can't let you miss this part:

Hey, have you seen that new Star Trek movie? Terrific, terrific stuff. A Star Trek for our times. I’ve even read some reviews saying I’d make a good starship captain. Yeah. Can’t you just see it? Right after I lay off 8.9% of the crew and blame it on the previous captain, I go around the galaxy apologizing to the Klingons. And the Romulans. And the Cardassians. And the Ferengi. And the Tribbles…

I wouldn’t have Air Force One, though. Or as I like to call it, Air Force 9/11. We really put a good scare into those New Yorkers, huh? Gotta keep ‘em on their toes. They’ll get over it, though. I mean, what are they gonna do, not vote for me? [biggest laugh of evening]

Friday, May 15, 2009

Balancing The OCheckbook

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A close examination of their finances shows that the Obamas were living off lines of credit along with other income for several years until 2005, when Obama's book royalties came through and Michelle received her 260% pay raise at the University of Chicago. This was also the year Obama started serving in the U.S. Senate. . . .

In April 1999, they purchased a Chicago condo and obtained a mortgage for $159,250. In May 1999, they took out a line of credit for $20,750. Then, in 2002, they refinanced the condo with a $210,000 mortgage, which means they took out about $50,000 in equity. Finally, in 2004, they took out another line of credit for $100,000 on top of the mortgage.

Tax returns for 2004 reveal $14,395 in mortgage deductions. If we assume an effective interest rate of 6%, then they owed about $240,000 on a home they purchased for about $159,250.

This means they spent perhaps $80,000 beyond their income from 1999 to 2004.

Intending To Still Avoid The S.E.R.E. Question

[Rep. Dan] Lungren [(R., CA) and the state's former attorney general] then switched gears to a line of questioning aimed at clarifying the Obama Justice Department’s definition of torture. In one of the rare times he gave a straight answer, Holder stated at the hearing that in his view waterboarding is torture.  Lundgren asked if it was the Justice Department’s position that Navy SEALS subjected to waterboarding as part of their training were being tortured.

Holder:  No, it’s not torture in the legal sense because you’re not doing it with the intention of harming these people physically or mentally, all we’re trying to do is train them —

Lungren:  So it’s the question of intent?

It Has Been For A Long Time

Alinsky’s influence goes well beyond Obama, obviously. There are many wonderful Democrats in this world, but evidence suggests that rising in that party’s political hierarchy requires some adoption of a variation of the Alinsky philosophy: Power comes first. Few Democrats are expressing outrage over Nancy Pelosi’s ever-shifting explanation of what she knew about waterboarding. Those who screamed bloody murder about Jack Abramoff’s crimes avert their eyes from John Murtha. The anti-war movement that opposed the surge in Iraq remains silent about sending additional troops to Afghanistan. Obama will never get as much grief for his gay-marriage views as Miss California.

It’s not about the policies or the politics, and it’s certainly not about the principles. It’s about power, and it has been for a long time.


Obama insists that he doesn’t want the government to run car companies, but he has fired CEOs, demonized bondholders, ensured the UAW gets the sweetest deal, and guaranteed warrantees. He insists that he doesn’t want to run banks, but his Treasury Department hesitates to take back some of the TARP funds that give them influence over bank policies. He’s critical of Wall Street, but he signed off on Treasury Secretary Tim Geithner’s remarkably generous plan to give hedge funds and private investors a low-risk, high-reward option on toxic assets.

Much of this is explained by Alinsky’s epigram, “In the politics of human life, consistency is not a virtue.”

Alinsky On Innumeracy

In a letter to the Boston Globe, Alinsky’s son wrote that “the Democratic National Convention had all the elements of the perfectly organized event, Saul Alinsky style. . . .  Barack Obama’s training in Chicago by the great community organizers is showing its effectiveness. It is an amazingly powerful format, and the method of my late father always works to get the message out and get the supporters on board. When executed meticulously and thoughtfully, it is a powerful strategy for initiating change and making it really happen. Obama learned his lesson well.”
As a tool for understanding the thinking of Obama, Alinsky’s most famous book, Rules for Radicals, is simultaneously edifying and worrisome. Some passages make Machiavelli’s Prince read like a Sesame Street picture book on manners.
One of Alinsky’s first lessons is: “Radicals must have a degree of control over the flow of events.”
Millions of Americans do not know how many million dollars make up a billion.

Just Like The 30s ... That Worked Out SO Well...

On their two top domestic priorities, President Obama and leading congressional Democrats this week executed pincer movements that allied them with traditional adversaries in business and potentially isolated congressional Republican opponents.

These maneuvers on health care and energy could signal a crucial shift in Washington's tectonic plates of power.

"You've got business that has sometimes opposed everything Democrats have done lining up to help get it done," White House Chief of Staff Rahm Emanuel said.

The potential breakthrough on energy came on Tuesday when Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts introduced revised legislation to promote renewable energy and reduce the carbon emissions linked to global warming, but at a slower pace than they originally sought. The compromise, which Waxman's Energy and Commerce Committee is set to mark up next week, drew head-turning praise from the Edison Electric Institute, the utility trade association.

One Hundred Six Point Four

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To put it another way, the total unfunded indebtedness of Social Security and Medicare comes to $106.4 trillion. That is how much larger the nation's capital stock would have to be today, all of it owned by the Social Security and Medicare trust funds, to generate enough income to pay all the benefits that have been promised over and above future payroll taxes. But the nation's total private net worth is only $51.5 trillion, according to the Federal Reserve. In effect, we have promised the elderly benefits equal to more than twice the nation's total wealth on top of the payroll tax.

Of course, theoretically, benefits could be cut to prevent the necessity of a massive tax increase. But how likely is that? The percentage of the population that benefits from Social Security and Medicare is growing daily as the baby boom generation ages and longevity increases. And the elderly vote in the highest percentage of any age group, so their political influence is even greater than their numbers.

Oh, Wait

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President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries.

“We can’t keep on just borrowing from China,” Obama said at a town-hall meeting in Rio Rancho, New Mexico, outside Albuquerque. “We have to pay interest on that debt, and that means we are mortgaging our children’s future with more and more debt.”

Holders of U.S. debt will eventually “get tired” of buying it, causing interest rates on everything from auto loans to home mortgages to increase, Obama said. “It will have a dampening effect on our economy.”

Gee, you don’t say. I wonder how things could have come to such a pass? Good thing Obama’s on the job paring our debt. Oh, wait:

COTD: Brit Quotes

“The inherent vice of capitalism is the unequal sharing of blessing; the inherent virtue of socialism is the equal sharing of miseries” - Winston Churchill
“The problem with socialism is that you eventually, run out of other people’s money.” - Margaret Thatcher

Thursday, May 14, 2009

Hasta La Vista Awnuld

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He was the perfect political superhero, sent to rescue California from spend-happy politicians at just the right time. And yet Arnold Schwarzenegger’s reign as governor has turned into a disaster flick that could spell catastrophe for the Golden State—and the whole nation.

Sadly, California and Schwarzenegger are hardly alone in spending well beyond their means. As many as 40 states face whopping deficits that are only going to get worse as the recession continues.

If country-wide trends do start in California, Rep. McClintock worries about what's in store for our nation. "As high taxes, high borrowing and high spending destroy California’s economy, Californians are moving to those 49 other states. If we allow the same policies to destroy our country where are we going to go?"

The video is well done and sobering. Click over and watch it. It's an SEIU nation apparently. Oh, and you wonder where lots of the cash came from that elected O Duce?

Energy Deja Vu (Part 38,735)

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the “consensus” back in the mid-1970s was that America and the world were running out of oil. Ironically, some in the media were also claiming a scientific consensus that the planet was cooling, fossil fuels could be to blame, and we were all going to freeze to death unless we kicked our fossil-fuel habit. We were told we needed to find alternatives to oil – fast. That task, we were told, was too important to leave to markets, so government needed to intervene with massive taxpayer subsidies for otherwise uneconomic forms of energy. That thinking led to the now infamous 1977 National Energy Plan, an experiment with central planning that failed miserably. Fast-forward to today, and: déjà vu. This time the fear is not so much that we‟re running out of oil, but that we‟re running out of time – the earth is getting hotter, humans are to blame, and we‟re all doomed if we don‟t stop using fossil fuels – fast. Once again we‟re being told that the job is too important to be left to markets.
If it wasn't for the (minor) part on coal CO2 sequestration, this would get a perfect 10. RTWT.

Amusing Ourselves To Death Watch

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It IS Corruption

The Obama administration's agenda of maximizing dependency involves political favoritism cloaked in the raiment of "economic planning" and "social justice" that somehow produce results superior to what markets produce when freedom allows merit to manifest itself, and incompetence to fail. The administration's central activity -- the political allocation of wealth and opportunity -- is not merely susceptible to corruption, it is corruption.



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Traditionally, empires that hold the global reserve currency are also net foreign creditors and net lenders. The British Empire declined — and the pound lost its status as the main global reserve currency — when Britain became a net debtor and a net borrower in World War II. Today, the United States is in a similar position. It is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets. The resulting downfall of the dollar may be only a matter of time.

Wednesday, May 13, 2009

No Laws At All

Even the ancient Chinese knew what it meant to Go John Galt.

Confucius said, “When the ruler is correct, his will is put into effect without the need for official orders. When the ruler’s person is not correct, he will not be obeyed no matter how many orders he issues.” Analects XIII.6

Interpretation: Confucianism, amongst other things, is extremely averse to having too many laws. In fact, an ideal state will have no laws at all.

Probably Right About Both

Today, Martin Felstein adds his considerably more authoritative voice to the outrage:

The barrage of tax increases proposed in President Barack Obama's budget could, if enacted by Congress, kill any chance of an early and sustained recovery.

Historians and economists who've studied the 1930s conclude that the tax increases passed during that decade derailed the recovery and slowed the decline in unemployment. That was true of the 1935 tax on corporate earnings and of the 1937 introduction of the payroll tax. Japan did the same destructive thing by raising its value-added tax rate in 1997.

I increasingly wonder whether the Obama administration has persuaded itself that blame for the poor economy is so completely on the shoulders of George W. Bush that the public will not hold it responsible for the poor economy at any point. Or, perhaps, that the massive new largesse showered on American voters will protect the Democrats in forthcoming elections. Perhaps they are right about both.

What Actual Torture Looks Like

North Korean defector Bang Mi-sun shows her torture scars at a press conference in Washington, D.C. on Wednesday. /Yonhap

COTD: Promises

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Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the Independent “Trust Fund” rather than into the General Operating Fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Q: Which Political Party took Social Security from the Independent “Trust Fund” and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

Tuesday, May 12, 2009

Mythology Update

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Wrong. The British Antarctic Survey, working with NASA, last week confirmed ice around Antarctica has grown 100,000 sq km each decade for the past 30 years.

Long-term monitoring by the US National Oceanic and Atmospheric Administration reports the same: southern hemisphere ice has been expanding for decades.

As for the Arctic, wrong again.

The Arctic ice cap shrank badly two summers ago after years of steady decline, but has since largely recovered. Satellite data from NASA's Marshall Space Flight Centre this week shows the Arctic hasn't had this much April ice for at least seven years.

Norway's Nansen Environmental and Remote Sensing Centre says the ice is now within the standard deviation range for 1979 to 2007.

The Fraud This Time: Nobody Home... Just Move Along Now...

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Obama won't do anything...because he was put into office by the same financiers that benefit from this fraudulent federal reserve system.

Take a look at his top campaign contributors and the people in charge of these companies. You'll notice Goldman Sachs at the top of the list.
The audio is horribly muted but just crank up the volume and listen closely. If you weren't so cynical you would faint about half way through.

She couldn't run a lemonade stand.

What Was In That Stimulus Bill Again?

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The stock market still has big hurdles to clear. You can have a jobless recovery, but you can't have a profitless recovery. Consider: Earnings are subpar, Treasury's last auction was a bust because of weak demand, the dollar is suspect, the stimulus is pork, the latest budget projects a $1.84 trillion deficit, the administration is berating investment firms and hedge funds saying "I don't stand with them," California is dead broke, health care may be nationalized, cap and trade will bump electric bills by 30% . . . Shall I go on?

Liberal Repression

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PELOSI FLOATS ANOTHER DEFENSIVE TRIAL BALLOON: “House Speaker Nancy Pelosi learned in early 2003 that the Bush administration was waterboarding terror detainees but didn’t protest directly out of respect for ‘appropriate’ legislative channels, a person familiar with the situation said Monday. The Pelosi camp’s version of events is intended to answer two key questions posed by her critics: When, precisely, did she first learn about waterboarding? And why didn’t she do more to stop it?” It also answers the question of “how weaselly can Pelosi’s defense get?”

She’s getting pretty close to Frank J.’s recommendation: Good line for Pelosi: “Yes, I heard about the waterboarding, but it was so traumatic I repressed it.”

Monday, May 11, 2009

COTD: All Theirs

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I agree that collectivism is on the way out, but it will take the end of the Baby Boomers to bring that about. This generation has nearly brought about the ruin of the Great American dream with their destruction of our schools, our media and our government at the altar of collectivism.

Unfortunately for the Boomers, they are retiring in masses just as their collectivist policies come to full flower. I give you Terry Shiavo Rest Homes, my friends, where the Boomers who cannot feed or take care of themselves will be denied food and water until they die. You tell me what the government is going to do when millions of Boomers are helpless elders and there is no Social Security and not enough tax dollars to support them?

Terry Shiavo time. They bought it, they paid for it, and now it is all theirs.

... and ours too unfortunately.


the Chrysler debacle and the looming repeat at GM may mark a major shift in the ability of American business to finance operations and growth.

Indeed, this particular chicken may come home to roost almost immediately. the Business Law Prof observes:

... when the government got tough it did so by threatening to bring nasty public pressure on the creditors.  Creditors that were already on the government dole with TARP money caved immediately; hedge funds held out a bit longer - took incredible public heat - and eventually caved as well.  The hedge funds, by the way, are the players the government needs to get into it public/private partnership program and its TALF program for either to succeed.  So the government ended up ripping players it needs to play in the future for the success of its programs

Like most bullies, the Obamabots seem unable to realize that their conduct may have long-term consequences.

A Critique Of What Ogabe Is Reading

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There are some good ideas and details in "Animal Spirits." For example, I didn't know that Enron abused the new "mark-to-market" rules established by the SEC to overbook profits (pp. 33-34).

But I was surprised by the large number of gaffes made in "Animal Spirits," such as:

1. The authors failure to include any reference to Milton Friedman and Anna Schwartz' classic "Monetary History of the United States" in explaining the cause of the Great Depression in the 1930s. They adopt an entirely outmoded Keynesian explanation
2. On page 130, Akerlof and Shiller claim, "In the absence of social security people would grossly undersave." Isn't it just the opposite? It is BECAUSE of social security that people grossly undersave
"Without intervention by the government the economy will suffer massive swings in employment." Again, shouldn't it be just the opposite? It is BECAUSE of intevention by the government that the economy suffers massive swings in employment and output.
A shocker I know. And Lord knows he wouldn't be caught dead anywhere near "Meltdown". Then he might actually learn something.

Speaking of which, if you're not going to take me up on my free "Meltdown" book offer, you can at least take an hour and go listen to Tom Woods give a great interview about the book.

A Pack Of Gum For The A.D.D. And Innumeracy Riddled Populace

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When it comes to federal spending, there's a pattern emerging with President Obama, and it's not a flattering one. The president says all the right
things about the importance of getting the deficit under control, but
his actions don't come close to matching his rhetoric.

Then, when he unveiled his 2010 budget last week, Obama made a big deal of his demand for $17 billion in cuts, insisting that the cuts "even by Washington standards ... are significant" and that $17 billion is "real money."

The president got it backward. Out in the rest of the world, $17 billion is a ton of money. But in Washington, where the president is proposing to spend $3.6 trillion next year, $17 billion looks puny — a little less than half a percent of the budget, or the equivalent of cutting a $100 grocery bill by handing back a 50-cent pack of gum.

The Sham This Time

Though much of the criticism of the Obama administration’s plans for Chrysler and GM has centered around government excesses, threats to the capital markets and the rule of law, it’s interesting that Prof. Skeel worries more for what it may portend in terms of bankruptcies in general.

The Chrysler sale looks like the latest of a series of government interventions that have run roughshod over ordinary legal rules, and it appears to be paving the way for a similar strategy in a General Motors bankruptcy. Much of what the government is doing allowing Chrysler to file for bankruptcy, promising to guarantee its warranty obligations is admirable. But the use of a sham sale of the sort the New Dealers thought they had forever eliminated will cause mischief in future bankruptcy cases.

Not only may the government go back to this well, but in the future private parties will conclude that sham sales are a legitimate tool in their own cases.

Sunday, May 10, 2009

Obsessive Housing Disorder

In December, the New York Times published a 5,100-word article charging that the Bush administration’s housing policies had “stoked” the foreclosure crisis—and thus the financial meltdown. By pushing for lax lending standards, encouraging government enterprises to make mortgages more available, and leaning on private lenders to come up with innovative ways to lend to ever more Americans—using “the mighty muscle of the federal government,” as the president himself put it—Bush had lured millions of people into bad mortgages that they ultimately couldn’t afford, the Times said.

Yet almost everything that the Times accused the Bush administration of doing has been pursued many times by earlier administrations, both Democratic and Republican—and often with calamitous results.

We’ve largely forgotten that Herbert Hoover, as secretary of commerce, initiated the first major Washington campaign to boost homeownership.
This is a RTWT.