Economy

Applied Liberalism

Mark Noonan28 Comments

Liberal, Democrat governor; liberal, Democrat legislature; tax hikes…and what do you get?  From the Illinois Policy Institute:

In a trend that continues to worsen, more Illinoisans found themselves unemployed in the month of July.

Illinois lost more jobs during the month of July than any other state in the nation, according to the most recent Bureau of Labor Statistics report. After losing 7,200 jobs in June, Illinois lost an additional 24,900 non-farm payroll jobs in July. The report also said Illinois’s unemployment rate climbed to 9.5 percent. This marks the third consecutive month of increases in the unemployment rate.

Illinois started to create jobs as the national economy began to recover. But just when Illinois’s economy seemed to be turning around, lawmakers passed record tax increases in January of this year. Since then, Illinois’s employment numbers have done nothing but decline…

This is entirely unsurprising – in fact, it was predicted in many quarters.  Why on earth should business expand or even remain in Illinois if they are to be taxed higher than elsewhere?  Do you liberals out there really think that higher taxes are just so much water off the business duck’s back?  I mean, seriously – tell us:  did you really expect that things would get better after a tax hike?

Over in Wisconsin the conservative, Republican governor and legislature took the opposite course – and it is paying off in jobs growth.  Anyone want to bet that some of those new, Wisconsin jobs are old, Illinois jobs?  Not like its all that far to move.  This isn’t rocket science – make something more expensive and there will be less of it being used…Illinois made having employees more expensive, so less employees are being used.

As I’ve said before, the dichotomy between the States being governed by liberalism and those by conservatism will be immensely instructive for a generation of Americans.  In practical application, the people are seeing the results.  Those States with the most liberalism are doing worse than those States with the most conservatism…and as time goes on, this will merely become more pronounced…and when the next election rolls around, I think we’ll see some startling results in the liberal States.

HAT TIP:  Mish’s

Paved With Good Intentions

Mark Noonan6 Comments

You know the destination – from Strategy Page:

Complaints from the Congo are growing about the U.S. legislation intended to stop illegal mineral sales. The Dodd-Frank bill (also called the Obama Law) has a clause that prohibits the sale of so-called conflict minerals may have been well-intentioned but it was not well-thought out. Rather than run the risk of buying any minerals that might have been smuggled from the Congo, many major mining companies are simply refusing to buy minerals from central Africa. The result is a de facto embargo. There are few buyers for Congo’s valuable minerals, especially tantalum and tungsten which have many hi-tech uses. This has damaged the Congo’s economy, because the nation relies on mineral exports. According to some sources, China, which does not have to meet Dodd-Frank standards, is snapping up many minerals at very cheap prices.

Which, then, will eventually find their way in to products used by Americans because we import so much from China…and there is no way to separate out that bit of mineral inside your electronic gadget which was obtained in the Congo.  We have very much shot ourselves in the foot…as well as shot the poor people of the Congo, while at the same time given even more power and wealth to our enemies in China.  Good job, well-intentioned sob-sisters.

God gave us reason and He expect us to use it.  In a rather confusing world where there is always conflict, we are supposed to thread our way carefully.  Before we take a step we should be thinking about what may come after – will it have the effect we want?  If it does, will it also have some bad effects?  Will the good effects equal or outweigh the bad?  It is hard to get people to look even an inch in to the future…but it must be done.  If we go off half-cocked an allow emotion to rule our decisions, then we are bound to get it wrong…emotions have their place, but only as a spur to action…the action, itself, must always be in accord with the best reason we can muster.

We want to ensure that evil people do not profit off the sweat of poor, working people.  That is an admirable goal…a completely Christian goal.  But before we take an action designed to thwart evil we’d better be sure that it (a) thwarts evil and (b) doesn’t cause even more problems for the poor people we’re trying to help.  Some poor man in the Congo who breaks his back mining the goods of the earth deserves first priority on the benefit of those goods…how are we to get the benefit to him?  By cutting him off?  By making his primary customer the People’s Republic of China?  Come on, think clearly!

Perhaps instead of cutting off the Congolese mineral exports to the United States we should, instead, have put a tariff on it and plowed the proceeds back into to efforts to improve the lot of the miners?  Give them some schools and hospitals?  Just an idea…something to think about; and thinking is what we most need in the world…and it is what we have so little of these days.

I realize that thinking can be hard work – I further realize that the more we think, the less liberalism we’ll have.  This is why liberals are so opposed to thought and so insistent upon adherence to a party line.  Start thinking about what we want and what steps might get us there and all of a sudden there’s not much room for appeals to raw emotions which lead to stupid, counter-productive policies.  And just where would liberalism be then?  But I do believe it is a risk worth taking – we can become a rational world again.  We can recover the traditions of the Judeo-Christian West and start to think, and apply human reason to the problems of human life.  It has been done in the past, and it can be done again…just takes a little bit of courage.

Another Obama Business Dies

Mark Noonan9 Comments

If Obama lauds it, it will die – from NBC Bay Area:

Solyndra, a major manufacturer of solar technology in Fremont, has shut its doors, according to employees at the campus…

…Solyndra was touted by the Obama administration as a prime example of how green technology could deliver jobs. The President visited the facility in May of last year and said  “it is just a testament to American ingenuity and dynamism and the fact that we continue to have the best universities in the world, the best technology in the world, and most importantly the best workers in the world. And you guys all represent that. ”

The federal government offered $535 million in low cost loan guarantees from the Department of Energy. NBC Bay Area has contacted the White House asking for a statement…

Government can’t deliver jobs – it can’t even pick which company will be solvent a year later.  The only proper role of government in the economy is as a facilitator of a honest and free market…after that, it is up to the people to decide what works and what doesn’t.  Maybe Solyndra’s technology will eventually catch on or maybe it will remain a white elephant…but there is no way for government to know, and any attempt by government to make it work only ensures it will fail…because if you subsidize something, you’re just going to ensure that it never developes enough strength to make it on its own.

Please learn the lesson, liberals…you can’t control the market.  Sure, you can make certain that everyone is being honest; sure you can make the paths of the inventor, manufacturer, investor and consumer smooth…but you can’t choose the path and you can’t force people on to it.  Leave it alone – it will all be ok; it happens all of its own accord, if you just leave it alone.

Obamunism! Killing Green Jobs

Mark Noonan5 Comments

From Investor’s Business Daily:

President Obama’s green jobs agenda has become a victim of its own red tape. Several internal reports show that state-level projects have stalled for years due to federal regulations favored by labor and green groups — big boosters of the green jobs push…

This is what you get when you attempt a Big Government solution – parts of the Big Government will work against other parts of it.  Remember, it is only average Americans who want jobs…for the union officials, government bureaucrats and liberal activist groups, the agenda is quite different.  The unions, naturally, want to ensure that all the money only goes to union-approved (and thus over-priced) contractors.  Government bureaucrats want to ensure that the money only goes to contractors who donate the right way.  Liberal pressure groups – in this case, environmentalists – want to ensure that they get a cut of the pie, even if they bring nothing to the table.

The thing we can never get our liberals to understand is that government can never get it right.  Even in the areas where government is supposed to have the authority (law enforcement and national defense) the government gets it wrong.  For all the splendid people in the military and law enforcement, which of us couldn’t in five minutes search find a score of examples of corruption and incompetence in both areas?  And the people in the military and law enforcement are leavened by a those who actually have a selfless dedication to duty…for government agencies without that esprit d’corps, it becomes one gigantic mess.  Think about it – in the Army you’ll find a large number of people who will leap on a grenade to save their friends…how many people at the Department of Energy do you think would do that?  And so how many people at Energy are really willing to sacrifice their own careers in order to advance the the prosperity of those they don’t know and will never meet?

When you put government in charge of trying to make things work you are putting the job in the hands of people who are most likely to fail.  They are not spending their own money, they are not going to put their own future on the line…their prime motivation is to ensure the least amount of work for the highest amount of pay, ending up with a fat pension when they are still relatively young.  That anyone ever thought that the government could lead the way in switching us to a “green” economy demonstrates that we’ll never lack for stupidity.

Scrap it; provide tax incentives to those private enterprises who are investing in green technology and just let the natural development of the economy take it the rest of the way.  There won’t be anything in there to provide fat contracts, cushy jobs and opportunities for graft, but we’ll eventually get a green economy…

More Rumors the Fed Will Print

Mark Noonan2 Comments

From Zero Hedge:

For now it was just Jan Hatzius calling for QE3 now if not sooner. With the addition of JPM to the list of banks now implicitly expecting (read demanding) QE3, it is now quite clear how Wall Street feels – after all someone has to pay those Wall Street bonuses – it sure won’t come from M&A activity, underwriting of Chinese IPO frauds, or trading volume. Here is the key sentence from a just released note by JPM’s Michael Feroli: “We believe the minutes lend themselves to our view that there is a somewhat better-than-even chance the Fed takes action at the next meeting to increase the average maturity of assets on their balance sheet.” Keep an eye on the market tomorrow for confirmation: a third day of the same low volume meltup we have seen this week should make the open QE3 question into case closed…

For those unfamiliar, a “low volume meltup” is when the stock market rises high for no reason (or, indeed, even rises when the news clearly indicates a down day) on low trading volume.  For the most part of late, if you see the market dropping it is a much higher volume trading day than the days you see it rise.  All part of the fake, ponzeconomy we currently have.

Anyways, getting back to the Fed printing money.  I’m still figuring it won’t happen.  I understand that the only way we may avoid an “official” recession (ie, where the government numbers clearly show it) is by printing up money…but even that isn’t a sure thing, and any “good” you get out of it will have to be counterbalanced by the knowledge that more printing will lead to more inflation for basic necessities (food and fuel).  To me, there is far more downside political and economic risk in printing than in not printing.  But rumors of “QE3” keep flying, and now there this statement from someone at JP Morgan saying it may well happen..and if anyone is juiced in to Fed decision making, it would be a firm like JP Morgan.

I hope they don’t do it as it would be, long term (and possibly short term) a catastrophe for the economy.  But the Ruling Class is desperate – something has to be done to get unemployment down below 8% by August of next year or Obama and his Ruling Class liberals are doomed.  Dying Ruling Classes do tend to cast around for desperate expedients to stay alive…even rather stupid expedients.  And, so, even though I still think they won’t print, I have to put money printing in the realm of distinct possibility…we’ll see how it comes out.

 

The War Against Economic Freedom

Mark Noonan24 Comments

From Points and Figures:

Last night I went to see the documentary Farmageddon in Chicago. I also stayed for the full panel discussion…
…This documentary illustrates the plight of the organic farmer, specifically the organic dairy farmer. If a dairy farmer wants to sell raw milk, they will be run out of business and many times imprisoned by the federal bureaucracy. The USDA actively tries to run Raw Milk Producers out of the business. They work closely with agents from state agricultural agencies.

The documentary shows film of agents descending on various organic farms and outlets, guns drawn, SWAT teams present. It’s straight out of science fiction and something that you can’t believe happens in America. I can understand a huge police presence when going after a drug lord, but a family farmer? Sure, farmers keep guns but in my experience they aren’t violent people…

Why does this happen? Because we have built a corporate and government system which is forcefully opposed to a free market.  The market is where people go to buy – what is in the market is whatever people try to sell.  With reasonable regulations for genuine safety, people are supposed to broadly be able to decide what they will buy in the market and what they will sell.  The trouble with this rather common-sense ideal of the market is that it cuts in to the profits of the largest sellers and by giving people choice is annoys Big Government which prefers that you buy what the government wants you to buy.

Its not just organic milk producers.  Time and time again over my life I’ve seen the heavy club of government working in tandem with established business interests to crush market place upstarts.  If you ever wondered why we’ve only got 3 US auto makers – instead of 30, as the size of the American auto market would indicate – it is because Big Government and Big Corporation have set things up so that no one else can enter the market…except, of course, for big, foreign outfits who can afford to grease the legislative and regulatory wheels.  What the final result of all this has been is a progressive constriction on entry in to the market place – ultimately, a restriction on the ability of average Americans to create new wealth.

All of this utter nonsense of safety regulations, lawsuits, warning labels, etc works out to be nothing more than restraint of trade – and a restraint of trade which ensures easy profits for Big Corporation and a steady stream of donations to politicians in favor of Big Government (Big Union is in there, too…a sort of hybrid of Big Government and Big Corporation, working both sides of the street, as it were).   For 100,000 years or so the human race managed to consume milk products and we never died out – some how or another with out a single regulation from the FDA, humanity survived milk consumption.  The bottom line is that milk is food…a sort of food human beings are very used to eating.  Of course, like all human activities, eating food does carry a risk.  But, then again, life is risk…and, in the end, you never get out of it alive, anyway.

Don’t get me wrong here – I’m no libertarian arguing for a completely unregulated market, but what regulation there is must be there to ensure honesty and dignity.  If it starts getting in to deciding what you will buy, then it is a negation of the market place.  If someone wants to buy raw milk, then as long as the seller is honest about his product, then government has no interest in the transaction.  So, too, with all other economic transactions…as long as no one is defrauded or degraded (a human being cannot sell a human being – even if that human being is himself), then government should, for the most part, keep hands-off.

When I speak of freeing up our economy, this is what I mean – getting rid of the government and the corporations who shackle the economy.  We are bound hand and foot…and thus our people are growing poor, our dependent class is growing and foreign competitors are starting to catch us up.  We can fix this – but to do so Big Government and Big Corporation must be brought to heel.

Noticing the Recession and Finding the Cure

Mark Noonan61 Comments

Good thing to do, because the one that started in 2007 kind of sneaked up on us in 2008, right?  Well, my bet is that the renewed (double-dip) recession began in April or May of this year and rather than wait until 2012 when it is plain as a pikestaff, why not dig around for the indicators that its already here?  The bad news here is that I’m not skilled enough to do that – but Tony Pallotta over at Zero Hedge, is:

The consumer driven recession has begun. Keeping it very simple of the four GDP components (consumer, fixed investment, government and net trade) the consumer has simply rolled over. In Q1 2011 the consumer contributed 1.46% to the 0.4% total GDP. In other words if it was not for consumer growth or even if .5% of that growth was removed the economy contracted in Q1 2011.

Fast forward to Q2 where the consumer component is now 0.3%. In other words the trend of the consumer is deteriorating. Representing roughly 70% of total GDP the consumer is the economy. Confidence drives the consumer, the consumer drives demand and demand drives the economy…

Which is why, by the way, we need to shift our economy from consumerism to wealth creation.  We have used debt to finance consumer spending – and now the debts are too high and the consumer is tapped out.  There is no way for consumer spending to lead us out of recession.  Rather than buying gadgets from China and calling that “growth”, we need an economy which will make things here in the United States.  The reality is that the only things of genuine economic value are things which are made, mined and grown…if what you’re doing doesn’t do or facilitate such actions, then it just isn’t that important to the economy.  Doesn’t mean it shouldn’t happen but it is just not something we need to be concentrating on.

The trouble is that our current government doesn’t recognize this.  Obama and Co (and quite a few Republicans, too) figure that we can some how, some way, keep things going as they have been for the last 30 years (and especially the last 20).  The thinking is that we can re-inflate asset bubbles, give people a sensation of being rich and convince them to plunge even further in to debt to buy things increasingly made overseas but which generate profits here in the United States.  Sorry to say, but it just can’t work like that any more…ultimately, if you want to buy something from a foreign country, you have to exchange wealth for it…the way we’ve been paying for the stuff we get is to sell off, as it were, our capacity to make, mine and grow things.  Essentially, in return for that cool cell phone, you gave China a factory, Mexico a farm and Chile a mine.  But now you’ve got no more mines, farms and factories to hand over to them…so how do you pay for your next cell phone?  That, essentially, is the problem we have.

A course of balanced budgets, regulatory relief, corporate reform (Big Corporation is nearly as bad as Big Government…such corporations tend to work for a restraint of trade nearly as much as unions do…and we need to figure out a system which ensures that small and mid-sized players can compete against the big boys), tax adjustments to ensure no foreign enterprise has a tax advantage over us and a general insistence that work replace welfare will fix what is wrong with us.  Not overnight.  It took many years to get in to this mess and it will take quite a while to get out of it.  The good news is that we can still fix it – there is still enough genuine American spirit in the United States to overcome the debt and the laziness and the consumerism of the past.   The bad news is that the window of opportunity is closing fast…if we don’t get our house in order soon then we will condemn ourselves to permanent decline.

2012 is that important – who we choose to give power to next year will determine, for good, the fate of our nation.  We’ll either do what is right and restore American greatness, or we’ll slink away in a cowardly surrender and insist upon a Big Government shroud for our national funeral.  We’ll see how we choose.

 

Buffett’s Obama Bail Out

Mark Noonan9 Comments

Why  did Buffett buy $5 billion of Bank of America stock? Mish suggests that Buffett was just trying to energize financial stocks, in general, as he’s up to the gills in them and puffing them up would allow him to unload all other financials before they go “poof”. That could be it, but I think there was more going on.

Warren Buffett’s most prestigious investment these day is President Obama.  If Bank of America had failed – and it is still “one foot in the grave, other on a banana peel” – then it would likely have served as the trigger for a general financial collapse…begin Great Depression II, end of any chance for Obama’s re-election.  While this would have hit Buffett hard financially there is still the fact that if you’re worth $45 billion and lose $10 billion, you’ve still got $35 billion left.  Buffett remains rich no matter what – ego is involved here.

Buffett has specially bought in to what Obama stands for…his image of himself stands or falls with the success of Big Government liberalism.  Buffett told us that Obama was The One; Buffett tells us that if we’ll just tax and spend some more all will be made well; Buffett tells us that it is us knuckle-dragging conservatives who got it wrong.  But if Obama fails, then Buffett got it massively wrong.  Buffett is not about to be proved wrong by a bunch of bitter-clinger adherents of that worn out, has-been Constitution!

It won’t work – Buffett has seemed like a savvy businessman because he’s piled up huge amounts of cash by milking the Big Government, fiat-money, usury-based economy for all its worth.  That economic model, though, has now gone on as long as it can.  We’re bankrupt; there is simply no more money to borrow, any more printing will just touch off ruinous inflation…its all done gone up the spout, as it were.  Buffett may think that if he throws around a few billion it will change the dynamic…all it will do is delay the inevitable, and not by nearly as much as all of Bernanke’s trillions in fake money.  Not only is Buffett about to be proved wrong, he’s also going to be proved a bad businessman…someone who can only make it in a ponzeconomy, but has no relevance to one based on hard work, thrift and careful investment.

UPDATE:  Buffett is also relentlessly avoiding taxes…this report shows that he’s arguing with the IRS over taxes unpaid since at least 2002.  Yeah, he really wants to pay more…

Christie’s Error

Mark Noonan31 Comments

From Politicker NJ:

Issuing a one-year moratorium on “fracking,” Gov. Chris Christie today issued a conditional veto of S-2576, recommending changes to the legislation that balances protecting New Jersey’s environment and drinking water and encouraging cleaner energy alongside the potential impacts of hydraulic fracturing, or fracking.

As currently written, S-2576 would permanently prohibit fracking in New Jersey, a drilling technique used for the exploration or production of natural gas, even as concurrent studies on the practice are underway by the federal government and no known natural gas deposits necessitating use of the fracking process have been proposed for development in New Jersey.

“I share many of the concerns expressed by the legislators that sponsored this bill and the environmental advocates seeking a permanent moratorium on fracking. We must ensure that our environment is protected and our drinking water is safe,” said Christie. “I am placing a one-year moratorium on fracking so that the DEP can further evaluate the potential environmental impacts of this practice in New Jersey as well as evaluate the findings of still outstanding and ongoing federal studies.”

No, Governor, the complaints about “fracking” are mythical in nature…no event has happened which indicates even the slightest risk from the process, so all complaints about it are based upon guesses…and if they are guesses which in any way, shape or form stem from environmentalist groups, they can likely be considered nonsense.  Unless and until someone demonstrates  a risk, no governmental action should be taken.

The environmentalists want to shut down”fracking” because they are deathly afraid that the United States will use it and become more energy independent.  That is not an environmentalist goal – they want us paying an ever higher price for energy so they can shut down industry and force Americans on to public transportation.  To the full-blown environmentalist, the death of American prosperity is a victory for the Earth, and Earth is more important, to them, than the people of the United States.

Christie has been an excellent governor and would still get my enthusiastic support for President…but this is just caving in to environmental insanity.