They Don't Know Up From Down

NEW YORK - Home prices rise for the third straight month, signaling a housing recovery is taking hold. (El Lay Times)

"This is good news for homeowners underwater due to the Bush economy,"  said Congressman Barney Frank. 

Obama administration official Angela Marks agreed.  "Higher home prices are key to keeping people in their homes despite the irresponsible decisions they have made." 

Borrowing against the increasing value of ones home is seen by the US government as key to restoring consumer spending to it's rampant pre-recession levels.

Congress Tries to make home ownership more affordable

Congress has also announced the continuation of it's blue ribbon program to lower home prices, making home ownership available to the poor and unemployed. 

"This will be a real economic boon to the economy, and it is the socially responsible thing to do," said Princeton economist and Nobel Laureate Paul Krugman. "To each according to his need, from each according to his means"

 Economically ignorant people should keep their hands off of the economy...

El Lay Times

If I Had a Trillion Dollars...

Archimedes' Lever:

“Give me a place to stand and with a lever I will move the whole world.”
-- Archimedes

Modern political corollary:

"Give me enough money to spend and and I will fix the whole world."
-- DC Fatcat

I'm tired of hearing "if we only raised taxes and spent more money..." this big program or that government initiative would work.

Of course! Like Archimedes, if you give me enough money I can do anything. That's not the issue. The trick isbeing smart enough to figure out how to efficiently use what you've got. Working class people know that because they have to do it every day.

Bureaucrats don't know it because what they can't squeeze out of you and me they borrow from China. It's the loaves and fishes for them...

...And now, in honor of our dishonorable free-spending politicians... If I had a Million Dollars by The Bare Naked Ladies




NYU.edu - Archimedes' Lever

What's Wrong With Government?

It's growing while our economy sheds jobs, according the the NY Times.

While the private sector has shed 6.9 million jobs since the beginning of the recession, state and local governments have expanded their payrolls and added 110,000 jobs, according to a report issued Thursday by the Nelson A. Rockefeller Institute of Government.

These same state and local governments are threatening taxpayers with police and firefighter layoffs and furloughs.

Why is this bad?
Because every dollar consumed by the government is one less dollar that could be used for something more productive. Same for each individual. Don't believe me? Imagine a government that employed every one of it's employable adults. At the micro level, that would help each individual, but on the macro level that government's economy would be in permanent contraction, ending ultimately in national bankruptcy.

We need government to provide many of our basic services, but we're way beyond that now.

We Don't Trust Our Government
ObamaCare is floundering, along with Obama and his Democrats, and Daniel Henninger blames trust.

The left likes to say that conservatives hate government. The truth, and it holds for many people beyond conservatism, is closer to what Alfred Hitchcock said when he was accused of hating the police. "I'm not against the police," Hitchcock said, "I'm just afraid of them."

We the People Say, Prove It!

President Obama in his public pleas for the plan appears to be truly upset that his benign view of it isn't obvious to all. In his op-ed Sunday for the New York Times he said, "We'll cut hundreds of billions in waste and inefficiency in federal health programs like Medicare and Medicaid."

Hundreds of billions? Just like that? This is nothing but an assertion by one man. It's close to Peter Pan telling the children that thinking lovely thoughts will make them fly.

Why don't they prove it? Because they can't.

Coal-Powered Prius and Other Liberal Ideas

The law of unintended consequences, like the laws of physics, will catch up with you every time

I am not against health care reform or whatever they're calling it nowadays. We could use some tort reform and insurance deregulation.

I am against clueless crusaders trying to save the world by building monstrosities with my money. Having hope in our politicians is like having hope that those one-thousand monkeys pounding away on a thousand typewriters will eventually produce the great American novel.

Consider what our government has accomplished, or should I say destroyed, so far.

Starve People, Feed Cars!
What a great idea ethanol is! Food riots, skyrocketing prices in poverty-stricken nations that can least afford it. Grain shortages have also resulted in higher prices for grain-fed livestock. All brought to you by the US Government.

Killing people in the War on Terror, bad. Starving them to death so smug liberals can feel good about themselves when they tank up at that special pump, priceless!

Coal-Powered Environmentalism
So you think your electric car is environmentally friendly? Wrong! It runs on coal. More so if you live back east, less so out west. This will continue to be the case until you can plug that little self-righteous crap-box into a windmill or solar panel.

Do you really believe Obama when he says his health care plan will save money? Do you really think he and his confreres in congress believe it? Ask the food rioters in Oaxaca if they believe it.

CS Monitor - Price Shock
RCM - Bill Frezza
Monthly Review - Food Crisis
Truth About Trade
Liberal Government Perversity

Government LooniCycle

Feral Government Crisis Cycle:
1. Find a crisis, or better yet, create one by spending obscene quantities of money on a perverse incentive program, like encouraging lenders to give mortgages to people who can't pay them back

2. Shake down the taxpayer and borrow from China to spend even more money on a "solution" that involves handing money over to well-heeled political donors

3. "Solution" creates a bigger crisis

4. Return to step 1 and repeat ad infinitum, ad nausium, ad absurdum...

That dizzy feeling is caused by the swirl of your country being flushed down the toilet.

Casa D' Ice

More Madoff Madness

Government Protects the Greedy and Complicit, Screws the Innocent Investors

Government strikes again! People who personally invested with Bernie Madoff are eligible for SIPC (A form of government-sponsored investment insurance). Pensioners who merely invested in a pension fund or 401K that in turn invested with Madoff get nothing. Squat. Nada

This is bass-ackwards
People who knew him personally or invested directly should get nothing, because they had to be either stupid or greedy to look at the returns they were getting and not suspect something.

Pension fund and 401K managers should be prosecuted along with Bernie. This is their profession, and they didn't think something was fishy? Once again, they were either professionally incompetent or implicitly complicit.

Meanwhile, pensioners who depend on a monthly stipend and knew nothing of the Madoff scheme their funds invested in, are not eligible for this FDIC-like program for investments.

Finally, our stupid government, which shields people from investment fraud like this through the SIPC, insures a ponzi scheme.

You want these people running health care?

WSJ

NBC NY – Madoff

SIPC

CSM

USA Today

American Revolution 2009

When in the Course of Human Events...

Economic Nullification is an intriguing concept explained by Locke Smith (gotta be a nom de plume). Washington's recent Bridge Loan to Nowhere is what pushed him over the edge:

The bailout of General Motors and Chrysler – appalling in its own right – is a sure sign that whatever feeble constitutional and political constraints that had kept the government in check are gradually disappearing. We know our rights as citizens are being trampled when the government can take resources from the productive sector of our economy and provide them to unproductive, money losing companies, organizations and individuals.

This got me thinking... There's gotta be some way short of armed rebellion or tax resistance to stop this out of control monster our experiment in democracy has turned into. Both parties have hijacked government and turned it into a trillion dollar Pez dispenser.

Then I read an article in Reason Magazine written by Brian Doherty containing depressing boilerplate about the decline and fall of the GOP. Near the end he noted the recent death of conservative intellectual Father Richard John Neuhaus:

My favorite Neuhaus moment involved a now mostly forgotten intra-right wing controversy that is worth remembering: In 1996 he ran a symposium in his magazine First Things which seriously raised the question (in the context, mostly, of judicial decisions about abortion) of whether the U.S. government had so exceeded both its legitimate mandate and any meaningful democratic controls that conscientious citizens should no longer owe it their allegiance.

Not so much in memory of Neuhaus, but in respect for its own soul, the GOP needs to ask itself whether a government that so exceeds its constitutional mandates is one the American people have any reason to respect—and to realize the extent to which it is complicit in the out-of-control, improvident, destructive beast the U.S. government is.

Those are strong words, but appropriate I think. So my question is, what can we do about it? Taking up arms is unwarranted and ineffective. Tax revolt will just land people in jail. So what's left short of these options?

Progressives instinctively understand: Destroy the system from within. You don't bring it all down with bombs, cannons and conflagration; you do it by millions of persistent little nibbles and snarks from furtive, scurrying pseudo-intellectual rats and amoral cockroaches. It's a shameful, inglorious revolution, with all that darting, crouching, and sneaking, but it is effective. Just look at Europe or American academia.

No. Slithering subversion won't do for Conservatives. We want a grand but legal revolution. Ronald Reagan represented the first wave, it is unclear who will lead the next, but I have a few inchoate ideas about how light the fuse. I hope this inspires others to come up with their own:

Idea #1. Ransack the Republican National Committee headquarters and publicly hang the country club leadership or behead them and mount their brainless heads on pike poles at the building entrance. If that's too harsh, we could simply chase them out with torches and pitchforks. But seriously, a major ideological insurrection needs to happen, a revolution of ideas, resulting in a takeover by youngsters under 30, constitutionalists without bow ties and libertarians who don't talk like robots from outer space.

Idea #2. Recruit a phalanx of small-government constitutional lawyers to launch a blunderbuss of lawsuits and injunctions against the federal government, tying it in knots trying to defend the unconstitutionality of its wildly out of control actions.

This would ultimately fail, but the modern day Boston Massacre could spark a debate in this country and actually get people reading the constitution and writings of the founding fathers. Reporters may actually wake up and start asking real questions and talking about substantive issues...

The GOP (indeed, all Americans) needs to ask itself whether a government that so exceeds its constitutional mandates is one the American people have any reason to respect—and to realize the extent to which it is complicit in the out-of-control, improvident, destructive beast the U.S. government is.

http://www.realclearmarkets.com/articles/2009/01/power_to_the_people_economic_n.html

http://reason.com/news/show/130999.html

Moral & Intellectual Bankruptcy

America may be approaching financial ruin, but we've already achieved moral and intellectual bankruptcy. I'm not into new years resolutions, but can we all resolve this new year to abandon reckless personal and government spending?

Moral Bankruptcy

Mark Levin made a fantastic point on his radio show a few weeks ago: The Federal Government is prosecuting Bernard Madoff because he took voluntary contributions and ran a ponzi scheme with it, and now the house of cards has collapsed and $50 billion dollars went up in smoke. This same Federal Government takes forced contributions to run a gigantic ponzi scheme known as Social Security, which is racking up liabilities in the trillions. Think I'm wrong? Ask your senator to show you the Lock Box.

Politicians thunder from their arrogant pulpits at the venal bankers and greedy businesspeople who have put us on the road to penury. These same irresponsible high rollers saddle our nation with an increasing debt burden (over $59 Trillion now). They say it's for the children, the poor, whatever, but it's really just to bribe us into letting them keep their sweaty, white-knuckled grip on the levers of power.

Intellectual Bankruptcy
The US savings rate was negative; people were borrowing too much and spending money that they didn't have. This contributed to our current economic calamity. So what's our government's solution? Offer consumers more credit so they can buy more stuff they can't afford!

Nov. 26 (Bloomberg) -- The Federal Reserve's new $800 billion effort to combat the financial crisis is designed to make credit more accessible to shaken consumers who aren't sure they want more debt.

Albert Einstein once said:

“The definition of insanity is doing the same thing over and over again and expecting different results.”

Einstein also said:

No problem can be solved from the same level of consciousness that created it."

Einstein was a genius. The Wall Street pirates and Washington hucksters grappling with this catastrophe they made are not. They are morally and intellectually bankrupt, and We The People continue to put up with it.

NYT: Irresponsible Lending Caused Economic Crisis

An amazing admission from the official paper of the Democratic Party, the New York Times: Loaning money to people who couldn't pay it back caused the financial crisis. Of course they don't say it just like that. They faithfully lay out the facts, assign blame to the wrong people, then draw the wrong conclusions. This is why readership is dwindling at the Senile Old Lady.

They also admit that government is a guilty party. Of course, Barny Frank, Chris Dodd, and Chuck Schumer are never mentioned. No, in the Toilet Paper of Record's version, President Bush is the only villain.

The NYT propagandists start by weaving the fantasy that President Bush invented the idea of pushing homeownership on more Americans. He did not; this initiative was started by President Carter, greatly bolstered by the Clinton administration, and indeed enthusiastically embraced by President Bush.

Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed.

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.

He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

The Bush critics go on to explain how the president and his staff failed to recognize what was causing the housing market to tank and why foreclosures were increasing. Then they pile on some tired rhetoric about not enough regulations. Note the lack of praise for the president's big-hearted generosity; that doesn't fit the storyline. No, helping poor minorities was a mere unintended byproduct of lining his political cronies' pockets and grabbing more power. Do these people actually believe the crap they write?

What this slanted piece of writing inadvertently shows is that by the time we recognized the housing bubble, the seeds of destruction had already been sewn. Government had already forced lending institutions to irresponsibly loosen time-tested standards. That's how unqualified borrowers ended up getting mortgages, which in turn explains the high foreclosure rates. The mortgage industry had previously done a good job predicting who could and who could not pay back a loan. Uncle Sam stepped in, made them lower the bar, and, just as night follows day, foreclosures increased. That's the deregulation that wrecked the market.

Missing in all of this drivel is the cautionary tale of government intervention, no matter how good-hearted or well intentioned, and the lessons we can learn from it.

Just as giving a society the trappings of democracy does not make it democratic, giving people the outward signs of financial solvency does not make them financially secure. Democracy and financial security cannot be imposed. They are outward manifestations of an inner attitude. Democratic institutions and thrifty homeownership are the tangible and beneficial fruits that spring from those noble inner motives.

But this type of inductive reasoning is beyond the New York Times, which is why they now find themselves on the ever growing junk heap of national failures. It is much easier to draw a "Bush is Stoopid" cartoon than it is to provide a balanced analysis that could actually educate people.

Blame Bush, blame congress. They all had a share in creating and crashing this economic lead balloon. More important than fixing blame (nobody in DC pays for their mistakes anyway) is to learn the right lesson. Presidents and legislators intervened in a previously-rational market and forced it to make irrational decisions, causing that market to fail. Now we are all paying the price.

You can pound a square peg into a round hole if you're the government and you have a big enough hammer. Just watch out for the splinters and the sparks.

Government's Golden Rule

It's a sad state to which our society has fallen. And saddest of all is that our government has led this descent into craven pandering. Like starving third-world refugees fighting over bottled water and bags of rice, we witness bankers, union workers, auto executives, business owners, homeowners, community activists, governors, and mayors shove and trample one another in slavering pursuit of government largess. So much for the pioneer spirit of the New World.

And in true entitled recipient fashion, the beggars curse the benefactors all the while...

I realized we had abandoned the realm of sanity when something the Reverend Al Sharpton said on TV yesterday actually made sense to me. He lambasted Bank of America for for laying off thousands of workers after accepting government money. I just wasn't right, he maintained. They took government money so they should be saving jobs, not destroying them.

More vitriol is aimed at GE for taking a government handout and using it to buy Chinese airplanes. Savagely elbowing their way to the front of the line, Angry UAW members (has anyone ever heard of a happy UAW worker?) demand to know why congress shovels trillions to Dirty Hank's Wall Street bandit buddies but denies Detroit a mere $15 Billion?

I stand with Reverand Al and the UAW: Our government has acted in an unfair and immoral fashion. It's all legal mind you, if you ignore the original intent of the constitution, but it stinks of immorality to us commoners. It violates that vague, secular American sense of fairness.

This is what happens when a government becomes disconnected from its founding principles. What are the rules of this damned bailout? It's just one rule: The Golden Rule: They who have the gold make the rules. Our constitution should be our moral code for governance, but it's being used as a doormat right now. Reverend Sharpton, union workers, and underwater homeowners can all rightly cry "foul."

If you're going to pick winners and losers you better have a clear set of rules that all the players understand or you are wide open to charges of fraud and favoritism. Better yet, why doesn't our government tend to getting its own fiscal house in order and leave picking winners and losers to the consumer?

Unbalanced

The GM Chief Financial Officer obviously hasn't seen the government's balance sheet...

DETROIT -(Dow Jones)- General Motors Corp. (GM) expects the federal government, possibly in the form of an oversight board charged with overseeing the auto maker's turnaround, to have a key role in restructuring the company's debt.

"It is very, very evident from the government's perspective that we're going to have to restructure the balance sheet to make sure we have a viable enterprise going forward," Chief Financial Officer Ray Young said Wednesday. He added that the government will have a say on how this restructuring gets done. (Read Entire CNN Article)

Now, can we get someone to come in and force our government to restructure its balance sheet "to ensure we have a viable enterprise going forward?"

http://money.cnn.com/news/newsfeeds/articles/djf500200812031112DOWJONESDJONLINE000680_FORTUNE5.htm

Good News! We'll all be Millionaires Soon!

Bad News: A million dollars won't be worth a bucket of spit. Think it can't happen here?

Consider Argentina: The corrupt, incompetent colossus of South America. It has lucrative farming operations, abundant fertile land, natural resources and universities, but it is an economic basket case. It wasn't always like this. 100 years ago Argentina enjoyed one of the top 10 global economies and was a powerful, respected nation. Those evil twins, Corruption and Socialist Statism, got the best of them.

Still think it can't happen here? Consider what our Socialist Interventionist government is doing:

- Bailing out the Wall Street welfare queens (formerly known as capitalists)
- Bailing out people who bought more house than they could afford
- Bailing out Fannie Mae and Freddie Mac
- Bribing taxpayers with free money and calling it a "Stimulus Package"
- Putting our nation further in debt to continue this unbridled spending spree
- We're sitting on enough oil, gas and coal to tell the world to get bent, but thanks to congress, we continue to sit on it
- Wind, solar, hydrogen. Like the weather, everybody talks about it but nobody does anything. Hey government! Got Energy Policy?

Adding fuel to the fire, Senator Chuck Schumer, in an act both venal and stupid, caused a good old fashioned bank run. Panicked citizens, apparently not realizing their deposits were federally insured, lined up demanding their money, ala "It's a Wonderful Life," although I doubt this story will end with everyone happily singing Auld Lang Syne.

Speaking of bank runs, if Fannie Mae and Freddie Mac go under and require government money to save them, we are in big trouble:

"Fannie Mae and Freddie Mac own or guarantee $5 trillion of mortgages, nearly half of all U.S. mortgages." (Reuters)

This particular crisis was caused by, you guessed it, government policy. Presidents Clinton and Bush, egged on by congress, established irresponsible policies that encouraged home ownership by people who had no business owning one. Of course, this scheme was funded with our tax dollars. Here's an excerpt from reuters:

"Efforts that began in the Clinton White House and continued through the Bush administration to boost home ownership, particularly among Americans in minority groups and with lower incomes, were what helped drive a surge in Fannie Mae and Freddie Mac activity. Supporters in Congress egged them on."

Oh, and Speaker Pelosi wants to hand out more free money. Congressional approval is below 10% and elections are less than 4 months away. Coincidence? You decide...

And for my progressive friends who want me to include "President Bush's wars" in the financial toll, I remind you that Democrats voted for both wars but then didn't have the rocks to back their vote when the Nut Roots went crazy. If these same politicians had stood up for what they voted for instead of stabbing the president in the back at every turn, both wars would be won now and our troops would be home.

Free Market Capitalism works. Socialism fails. History has taught us that. Capitalism built every successful economy on the globe, including ours. If you want to blame conservatives for something, blame them for a lack of regulation. They forgot that Capitalism without a moral code is a jungle. Adam Smith, the proto-capitalist of "Invisible Hand" fame, told us so 200 years ago.

So here's my suggestion. Let the greedy and the stupid fail: It will put them where they belong and serve as a lesson to the rest of us. Let the conservatives plan laissez fair economic policy and let the progressives be the watchdog. Having a liberal on each shoulder should teach those Wall Street Bankster pigs a lesson! And, as a bonus, liberals will be performing a useful function besides just nagging and protesting. Finally, American Citizen, have enough pride in yourself to tell your candy man congresswoman and senator to shove it next time they dangle goodies in front of you. You have to live by a budget, demand they do the same.

It beats the hell out of being an Argentinian millionaire.