Nobody Owes You A Living

There is a lot of talk about restricting imports in order to create jobs for Americans. I don't buy it.

Nobody owes you a living. And you know what happens when politicians control what is bought and sold? The first thing bought and sold is politicians. So objectively being for government controlled trade is to be in favor of crony capitalists. What? You thought I wouldn’t notice?

There is no eternal law that says workers who price themselves out of the market will keep their jobs. If the price of labor is high enough it makes sense to either outsource or get machines to do the job (which is what has happened to manufacturing labor – just as it happened to agricultural labor). Or go broke.
Municipal Bankruptcy.

Maybe we can get government to repeal the laws of supply and demand. Then wage rates can rise to any level you like and you will no doubt find customers very willing to pay what ever you ask. Unless they resort to smuggling. Or off the books deals. Both were common in the late stages of the USSR.

You want higher pay? Find a skill that is in short supply. My kids have figured this out. #3 son is 4th year EE and it looks like he has a job already lined up. My #1 daughter is 3rd year Chem E, an A student. I have no doubt she will have no trouble finding work when she graduates. #2 son graduated with honors from UChicago (my old school) in Russian language. He is currently working for AC Nielsen in Russia. The previous year he was teaching English language and American studies at a Russian University. #1 son is an artist (no family is perfect). But I do have something you may do that not very many know how to do. Learn how to program these chips:

Green Arrays

Taxing Christmas

The government is now taxing Christmas in order to pay for its wrecking of the economy.

In the pre-dawn darkness of a chilly LA morning, my day started off with a chuckle. A friend in the reforestation business sent me an email detailing the US Department of Agriculture’s new ‘Christmas Tree’ tax that was approved yesterday. I thought it was a joke. It wasn’t.

One can only laugh at the absurdity of the government getting involved in such a matter. But it’s happening more and more.

You see, the United States is on a one-way collision course with its financial judgment day; the country long ago passed the historical point of no return– the point at which it has to start borrowing money simply to pay interest on the money it has already borrowed.

Throughout history, countries that passed this point of no return soon defaulted on their debts, entered into extended periods of severe inflation, or both. This is nothing new– the idea of a government going bankrupt is practically as old as the concept of government itself.

The free lunch is over.

Cross Posted at Classical Values

Dialog With The 99%

The New American has some thoughts on the OWS (is that like multiple owies?).

Wall Street drank the alcohol that the Federal Reserve poured. If there was no Fed pouring the alcohol, if Fannie and Freddie weren’t guaranteeing all these mortgages, Wall Street wouldn’t have originated them. So it was Wall Street working with government, but the source of the problem was the government. Government started it. That’s how come when I was warning about the crisis back in 2004-2005, begging the Fed to raise interest rates, trying to get Fannie and Freddie out of the mortgage guarantee business, nobody wanted to listen to me.

Read the whole thing. And watch the video.

Whatever Happened To The Promises?

It seems the crackdown the Feds are doing on medical marijuana dispensaries is none too popular among Democrat voters.

Medical marijuana advocates have reacted angrily to reports of the Obama administration threatening dispensaries, including some in the Bay Area. California voters passed a medical marijuana law in 1996, and many people use the drug to help ease pain related to HIV and AIDS and other illnesses.

But in recent weeks, federal prosecutors have announced broad prosecutions against medical marijuana dispensaries across California, reportedly threatening landlords with eviction, property seizures, and imprisonment.

That sort of action in a state where medical marijuana is legal is leading even California politicians to protest.

Assemblyman Tom Ammiano and state Senator Mark Leno, both out gay Democrats from San Francisco, held a press conference Wednesday, October 19, to call for an end to the federal crackdown.

In a recent statement, Ammiano said the Department of Justice's stance means "a tragic return to failed policies that will cost the state millions in tax revenue and harm countless lives."

He continued, "Whatever happened to the promises [Obama] made on the campaign trail to not prosecute medical marijuana or the 2009 DOJ memo saying that states with medical marijuana laws would not be prosecuted? Change we can believe in? Instead we get more of the same.

It is too bad most Republican politicians are too stupid to capitalize on this discontent. Well not too stupid in their minds. Cracking down on people using the wrong kind of plants for medicine make perfect sense if it keeps even one person from abusing pot. Especially if the pain, suffering, and premature deaths caused by the denial of medicine are not assigned to their actions. It is how politicians traditionally get away with murder.

H/T Drug Policy Forum of Texas

Cross Posted at Classical Values

It Must Produce Revenue

Eric is discussing my post Prevention Methods, and looks at the harms that making things illegal causes. A commenter chimes in with this bit of wisdom.

...many of these “illegal drug” like Marijuana can be produced without a good means of tax revenue – another reason to outlaw them

You can make quite a bit of your own booze (200 gal a year I believe) without paying any taxes (a permit may be required). I wonder if we should be making alcohol illegal to recover that lost revenue. Oh. Wait. If they make alcohol illegal there is zero revenue. Only enforcement costs. Barring the usual theft pardon me "asset forfeiture" by police of anything people own that they cannot account for. Like cash. This is sometimes referred to as highway robbery.

Cross Posted at Classical Values

Feds Go On A Diet - Spending Up Only 5%

I guess this is what passes for fiscal restraint these days.

Despite all of the rhetoric coming out of Washington about cutting federal spending and living within our means, the numbers don’t lie. According to the recently released numbers by the Congressional Budget Office, our Federal Government spending was up 5% in 2011 over what we spent in 2010. This marks the largest year of budget expenditures in our nation’s history.

The Federal government spent an alarming $3.6 trillion dollars in 2011, more than the previous year and even more than 2009 when President Obama pushed his failed Stimulus package through an attempt to spend us out of a recession.

Eventually this will end. I predict not well.

Government Solution

Occupy Wall Street? You might as well send them a check.

The only way to get business out of government is to make government smaller. There is no "government" solution to the government problem.

Update: I see comments here and there around the www about how messed up these kids are. I dunno – Wall Street pretty much owns government. Aside from the part the Drug Cartels control. They got the problem right. They got the answer wrong. What they want is smaller government. Something no faction in America favors. They all have their pet projects for improving moral and social conditions that REQUIRE Big Intrusive Government (that would be BIG. And if this were a movie it would be controlled by Mr. Big or perhaps his brother). Ah. Well. Maybe when the kids grow up they will become libertarians.

Cross Posted at Classical Values

The Government Doesn't Care

She is about 1/2 way there. Government is never going to care. Therefore we have too much government for the most part. "Bail us out too" is such a forlorn call.

The Unnecessary Is Inevitable

This is the Industry Week take on the Solyndra solar cell company's crash and burn.

What a complete -- and unnecessary -- disgrace the Obama administration's performance in the Solyndra affair has been.

Admittedly, not all the facts are out about the administration's decision to award a $535 million dollar federal loan guarantee to the recently collapsed California-based solar panel maker. And admittedly, many free-market extremist politicians and think tank hacks are only too happy to blur a critical distinction: between criminal or otherwise corrupt activities (or simple incompetence, for that matter) on the one hand, and the inherent difficulties and risks on the other hand of subsidizing new, potentially game-changing, but by definition chancy products and technologies that will struggle to attract private capital from the short-term focused American financial system.

By the way he is wailing you know that debacle has hit a nerve. But think about it. Aren't all political decisions subject to cash under the table influence?

The way we handle looking out for the long term in America is that the government supports research and then attracts companies to put up their own money to capitalize on the fruits of that research. Perfect? No. Subject to manipulation re: who gets the patents? Yes. But at least companies are putting up their own money for a roll out. Which gives them some skin in the game.

Cross Posted at Classical Values

A Chance

Thirty seconds of political truth. And it may just sell some autos.

H/T Libertarian Republican.

Cross Posted at Classical Values

Asleep At The Wheel

Why will America come back before too long? Because it appears to be the only country in the world asking the most important question of the day.

The truly fundamental question that is at the heart of the disaster toward which we are racing is being debated only in America: is it possible for a free market economy to support a democratic socialist society? On this side of the Atlantic, the model of a national welfare system with comprehensive entitlements, which is paid for by the wealth created through capitalist endeavour, has been accepted (even by parties of the centre-Right) as the essence of post-war political enlightenment.

This was the heaven on earth for which liberal democracy had been striving: a system of wealth redistribution that was merciful but not Marxist, and a guarantee of lifelong economic and social security for everyone that did not involve totalitarian government. This was the ideal the European Union was designed to entrench. It was the dream of Blairism, which adopted it as a replacement for the state socialism of Old Labour. And it is the aspiration of President Obama and his liberal Democrats, who want the United States to become a European-style social democracy.

But the US has a very different historical experience from European countries, with their accretions of national remorse and class guilt: it has a far stronger and more resilient belief in the moral value of liberty and the dangers of state power.

One thing to keep in mind kids. Don't get cocky. There is a LOT of Trash hauling still to be done.

Job Destroyers

I was looking around the 'net and for some Vonnegut material and came across a review of Player Piano.

Here is the central theme of the book and the review.

Remember the days Greenspan would trumpet productivity improvements brought on by the internet as a key factor in maintaining benign inflation during economic expansion?

It was a great time.

But these days, productivity gains brought on by the net as well as other technological advances only serve to exacerbate our nation’s inability to improve employment.

In other words:

If it weren't for farm machinery we would all have jobs.

Cross Posted at Classical Values

Doing Well In Business

If you want to do well in business have a friend in government. Evidently Exxon-Mobil is short of friends.

Unfortunately, Exxon has discovered firsthand what it’s like to deal with what Investors Business Daily calls “regulatory pirates” in the Gulf of Mexico:

ExxonMobil, and its Norwegian partner Statoil made the biggest discovery of all — a field worth a billion barrels of oil — 7,000 feet below sea level in its “Julia” field in 2007.

Exxon tried to keep its discovery secret to keep marauders away. Sadly, the pirates in this instance are U.S. regulators — and their aim is to stop them.

That’s right: Instead of marvel at the continuing treasures of the New World, or hail the human ingenuity that made retrieval of so much oil possible, or simply quantify how this discovery will boost U.S. energy security, Interior Department bureaucrats moved instead to snatch Exxon’s permits and shut the whole thing down.

They may not have paid enough to the right party.

Here is a group that paid plenty and is unhappy with their ROI (yes it is a pun using a foreign language - the nominal meaning is Return On Investment)

Let’s see. Obama has lost Wall Street, the progressive grassroots, and even a few unions. Now it looks like another funding source for his re-election bid might fade as well — high-tech Silicon Valley. Politico reports that the innovation center once celebrated the fact that they had backed a President who uses a Blackberry, but now think he’s just another middle-aged man with some ubiquitous personal technology...

Let us not forget that he is a middle-aged BLACK man. That still counts for something. Not as much as it used to. In any case if you make efforts to strangle the electrical supply - which the boys in the valley totally depend on to make their products and make them useful - people interested generally take notice. Making oil more expensive isn't helping either.

Go to the "paid plenty" article for a multitude of links.

Reserve Margin

You may have heard that the EPA is planning to shut down roughly 20% of coal generated electrical capacity by 2015.

Francois Broquin, a co-author of reports on coal by Bernstein Research, said the combined rules could push as much as 20 percent of U.S. coal-fired electric generation capacity to retire by 2015. "Obviously that will have an impact," he said.

What kind of impact? Let us get technical (not too) and see.

Electrical power grids must be able to supply the power demanded or else they will not supply any power at all. But. You know in the real world the SCHTF. Things like electrical storms and high winds can break power lines. A bad bearing can trip a generator off line. A tsunami can flood a plant. S*** Happens. So you have reserve margin. Generators either in hot idle or cold idle that can be brought on line for peak demand or to make up for failures in part of the system. So how much margin is enough? Around 10% is sorta adequate and 20% is too much (it costs money to carry the idle equipment on the books).

We are running at the low end of that range and possibly below. But for this case knowing roughly is good enough. Let me add another roughly: coal supplies 40% of the electrical power in America. It may be more. Never mind. So what is 40% of 20%? (coal generation times % shut down) . That would be about 8% of grid capacity. Or almost all of the margin that makes the electrical supply reliable.

Nationwide blackouts and certainly local black outs are in our future if this is not stopped or scaled way back.

Cross Posted at Classical Values

The Elite Speak

I found at Hawaiian Libertarian the words of Zbigniew Brzezinski.

"The technetronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities." - Between Two Ages: America’s Role in the Technetronic Era, 1970

I'm working to put a lot of sand and gravel in that machine.

Who Said?

"We are living on borrowed money and borrowed time. These deficits hike interest rates, clobber exports, stunt investment, kill jobs, undermine growth, cheat our kids and shrink our future."

I'll give you a hint. It was from a political speech in 1980.

The answer is here.

A Change In Policy

Suppose you have a bad experience with a company. What can you do?

Stop buying their product.

Suppose you have a bad experience with government. ....

Hangover

The first minute and fifteen seconds are commercials. Then comes a bio of the guest, Niall Ferguson, which lasts until about three minutes and thirty seconds into the video. Then you get about twenty minutes of good stuff.

The video was recorded in February. In the interim it looks like there may have been a change in political direction even if the results so far are meager. Inflection points are by definition the beginning of change. And at the inflection point there is balance. But there is also momentum. And ultimately the question is: how much force can be applied for how long in order to increase the velocity towards the goal? Just getting to the inflection point is not enough.

And something else. Mr. Ferguson says no one has been discussing his preferred solution - Privatization. That is not true. Harry Browne who ran for President on the Libertarian ticket in 2000 and who I strongly supported at the time was saying exactly that during his campaign. The Federal Government owns too much of America.

And let me also speak to his last point. The trouble with our education system. The solutions are appearing in places like Kahn Acadamy among others. It would be really good if our education system wasn't so reactionary. But it doesn't matter. The Lower Education Bubble will burst. The end is in train. We just can't say when. The if is not in doubt.

Niall's book Civilization: The West and the Rest will be out in November.

Cross Posted at Classical Values

How The Government Works

The Congress (the House actually) authorizes spending. The President (effectively) signs the checks. The Social Security checks. And yes the money is there. It is in all those certificates in the Social Security Lock Box. He could start cashing those. If you don't get a Social Security check next month it is because the President decided you weren't worth the money. Or he wants you screaming at him.

I propose you start the screaming early.

Cross Posted at Classical Values

Pelosi Power

Nancy Pelosi who currently has no effective power in the House of Representatives is planning on exercising her power to prevent a balanced budget.

House Minority Leader Nancy Pelosi has so far played a minor, background role in the negotiations between President Obama and congressional Republicans over raising the debt ceiling. But she sought to change all that Friday, in a private meeting with Obama to drive home her earlier pledge to oppose any deal that cuts the nation's entitlement programs.

I doubt she has the power to sustain her desires. Looming even bigger is the fact that the nation lacks the resources to sustain her desires. So far Congress has been unable to repeal the law of Supply and Demand. I predict they will do no better with gravity. Congress does have a bit of expertise in this area that is unsurpassed though. The Critters involved know how to increase friction. Very handy if you want to slow things down.