Friday, August 31, 2012
Albert Jay Nock, American, here:
Various social superstitions, such as magic, the divine right of kings, the Calvinist teleology, and so on, have stood out against many a vigorous frontal attack, and thrived on it; and when they finally disappeared, it was not under attack. People simply stopped thinking in those terms; no one knew just when or why, and no one even was much aware that they had stopped. ...
Great and salutary social transformations, such as in the end do not cost more than they come to, are not effected by political shifts, by movements, by programs and platforms, least of all by violent revolutions, but by sound and disinterested thinking. The believers in action are numerous, their gospel is widely preached, they have many followers.
Posted by jm at 10:13 PM
The great desideratum in a tariff, for instance, is its license to rob the domestic consumer of the difference between the price of an article in a competitive and a non-competitive market. Every manufacturer would like this privilege of robbery if he could get it, and he takes steps to get it if he can, thus illustrating the powerful instinctive tendency to climb out of the exploited class, which lives by the economic means (exploited, because the cost of this privilege must finally come out of production, there being nowhere else for it to come from), and into the class which lives, wholly or partially, by the political means.
Albert Jay Nock, 1927, here:
The State originated in conquest and confiscation, as a device for maintaining the stratification of society permanently into two classes — an owning and exploiting class, relatively small, and a propertyless dependent class. Such measures of order and justice as it established were incidental and ancillary to this purpose; it was not interested in any that did not serve this purpose; and it resisted the establishment of any that were contrary to it. No State known to history originated in any other manner, or for any other purpose than to enable the continuous economic exploitation of one class by another.
Everyone knows that the State claims and exercises the monopoly of crime that I spoke of a moment ago, and that it makes this monopoly as strict as it can. It forbids private murder, but itself organizes murder on a colossal scale.
Amity Shlaes is in full-throated opposition to the mortgage interest deduction, here:
The distortion of the housing market, we now know, stemmed not only from the tax deduction but also from the subsidies of government-sponsored entities such as Fannie Mae and Freddie Mac (FMCC) and from inappropriately loose monetary policy promulgated by the Federal Reserve. ...
Opponents of deduction abolition today argue that abolition will make the market crash some more, as per Thomas of the Realtors. One could argue this the other way. Now Americans see houses for what they really are: boxes that depreciate. This is therefore the least expensive time to abolish the deduction. We have already taken the hit -- and 2012 is also the time when we most need the $100 billion or so from the elimination.
No mention here of the cost of, say, the reduced rates of taxation on capital gains and dividends, which came to $91 billion last year. Nor of the costs of any of the other tax loss expenditures which benefit everyone.
She's worried about the distorting effects of the deduction on house prices, but fails to address the distorting effects on stock prices of the lower capital gains tax rate. All tax loss expenditures have distorting effects, not just the one for housing.
Worse to me is her objectification of the home as a depreciating box. The fact is housing was long stable in America, until Republicans in league with Bill Clinton started fiddling with it and the tax law surrounding it in 1996. What they did was turn the home into a commodity, which abnormally shot up in value and now has shot down.
The question going forward isn't whether to gut the home some more by removing the tax deduction. Even with it home values have declined dramatically today, and could go even lower despite it as they have in the past. And they probably should and probably will decline without any change to the tax deductibility of mortgage interest. If you aren't old enough to have experienced the housing crash of 1980, you aren't old enough to really understand how relatively small changes in housing values compared to now felt a lot bigger from time to time.
When you attack housing you don't just hurt people where they live in the economic sense, but you hurt them also spiritually. The home in America has been much more than a mere store of economic value, a treasury which greedy government enticed Americans to unleash in a torrent from 1997. The home is the incubator of the next generation of Americans, the place where we engage in the most important work we do as a people: replacing ourselves.
The question is what are we going to do about all the distorting effects of government tax policy, not just the distorting effects of one of them.
That Amity Shlaes leaves them all out except as they impact homeowners suggests not just an economic hostility to housing, but a cultural one, part of a broader hostility which has resulted in family dissolution, not family formation.
If the profane bottom line is tax revenue, the way to achieve it is through more taxpayers. You know the kind: the ones who get up everyday, get to work on time, and work hard.
And the most reliable way we have found to produce them is in families, families which overwhelming still prefer to live in houses.
Subsidizing this enterprise comes with a cost.
So does not subsidizing it.
Posted by jm at 3:46 PM
We once hoped Paul Ryan was a real spending cutter instead of a spending growth cutter, but is now just a defender of Medicare spending growth, or something.
In other words, you are either going to vote for a Republican Welfare State in Romney/Ryan sans ObamaCare, or a Democratic Welfare State in Obama/Biden with it, but not for a Fiscally Conservative State, and certainly not for a Limited State.
The Investor's Business Daily doesn't seem to care that failing to cut the overall size of a program over time, adjusted for inflation, means you are not a fiscal conservative, here:
Media fact-checkers also complained about Ryan's charge that Obama is cutting $716 billion from Medicare to fund ObamaCare. Not true, they said. Medicare's growth is just being slowed.
But Obama achieves that slower growth by making real cuts in provider payments. And in any case, the media always and everywhere call a reduction in the rate of federal spending growth a "cut." So why suddenly charge Ryan with being misleading for using that same term?
In any case, Obama himself admitted that he's doing what Ryan says. In a November 2009 interview with ABC News, reporter Jake Tapper said to Obama that "one-third of the funding comes from cuts to Medicare," to which Obama's response was: "Right."
Reducing the size of government is different than reducing how much it grows.
Plans like the Penny Plan -- if they threw out the ever-rising baseline which makes government bigger every year because spending on programs must rise to accommodate increased population -- would work in a fiscally conservative sense because they essentially freeze programs in time and lop-off 1 percent annually until revenues grow enough to balance the budget.
But in no sense can even such a plan be construed as a limited government plan because such plans do not commit to paying off the debt, which by my calculations would take $850 billion annually or so for 30 years at 3.5 percent on top of balanced budgets each and every year over the period. This is how households used to work and no longer do, which is why government no longer does.
A country is only as good as its people. If Americans will not control their own spending, the government which represents them never will.
It begins with us, not with Barack Obama or Paul Ryan.
Whatever Mitt Romney is, he's not a utopian.
As reported here:
After electing a man of huge promise and ambition, voters might welcome a candidate with curbed enthusiasm. That seems to be Romney’s calculation, anyway. “President Obama promised to begin to slow the rise of the oceans and heal the planet. My promise is to help you and your family,” Romney said, drawing perhaps the loudest cheers of the night.
Posted by jm at 9:32 AM
Thursday, August 30, 2012
An average of 21.9 million viewers tuned into the nine broadcast and cable networks that were broadcasting convention proceedings Wednesday night between 10 p.m. and 11 p.m., according to Nielsen. That was 41% less than the 37.2 million who tuned in the same night four years ago, the research firm said.
Gee, when Romney loses will they blame the conservatives again?
William Saletan for Slate mocks Paul Ryan, here:
Since Mitt Romney tapped you as his running mate, you haven’t stood for fiscal restraint. You’ve attacked it. You warned voters in North Carolina and Virginia that cuts in the defense budget would take away their tax-supported jobs. ... Four days after Romney put you on the ticket, you began parroting his Medicare shtick. You protested that Obama’s $700 billion savings in the future growth of Medicare payments to providers—a spending reduction that any sensible conservative president would have sought, and that you had previously included in your budget plan—would “lead to fewer services for seniors.” You depicted a horror scenario: “a $3,600 cut in benefits for current seniors. Nearly one out of six hospitals and nursing homes are going to go out of business.” You assured seniors that the Romney-Ryan agenda for Medicare “does not affect your benefits.” And you promised future retirees “guaranteed affordability” of health care. In short, you adopted every tactic in the liberal playbook. You framed a reduced rate of growth as a draconian cut. You inflated the likely impact of the reduction. You denounced any loss of services as unacceptable. You promised not to touch seniors’ benefits. And you reaffirmed a fiscally unsustainable guarantee. By my count, you’ve now done this in at least six speeches and rallies. Every day, you’re reinforcing the culture of entitlement and making it harder to rein in retirement programs.
This isn't quite right. There was no fiscal restraint in the Ryan budget to begin with. It simply returned the trajectory of the growth in spending to the status quo ante Obama, which was bad enough. This is why Ryan's budget doesn't achieve balance for decades: it supports the continued growth in spending in programs like Medicare, sans ObamaCare. Obama cuts that growth to help pay for ObamaCare. In other words, it's just business as usual with the Republicans, made to look like fiscal conservatism because it wipes away the really insane spending trajectory threatened under more of Obama.
Bait the conservatives, and switch.
Yea, shame on you, Paul Ryan.
Who is the more conservative, Mitt Romney, who has said he won't cut spending dramatically in his first year for fear of causing another recession, or John McCain, who was quite radical by current standards in calling for a freeze on spending?
September 26, 2008|Russ Britt
LOS ANGELES (MarketWatch) -- Sen. John McCain proposed a possible spending freeze on virtually every federal program except the Department of Defense, for veterans and entitlement programs in a presidential debate with rival Barack Obama Friday night. Obama countered that approach is too broad-based, saying it was the equivalent of "using a hatchet where you need a scalpel."
Anybody seen the scalpel? The debt back then was $10 trillion. Now it's $15 trillion. And we're no longer AAA.
His map is here.
He now shows Missouri no longer leaning Romney.
Joel Kotkin's formulation of the class war, here, between
"people engaged in farming, fishing, forestry, transportation, manufacturing and construction"
"an ever-expanding class of minders — lawyers, teachers, university professors, the media and, most particularly, the relatively well paid legions of public sector workers — who inhabit Washington, academia, large non-profits and government centers across the country."
Posted by jm at 10:25 AM
The latest figures are reported here.
They show initial claims, not-seasonally-adjusted, revised for August 18 falling to their lowest level yet during Barack Obama's tenure: 311,787.
And the advance number for August 25 is just a hair under 310K, while August 11 came in just under 318K. At the end of July he posted a number just under 313K.
In March of this year, Obama achieved numbers as low as 319K and 315K, but the trend melted up after that. Now he has five weeks in a row between 310K and 320K.
Expect him to say this is reason for hope that the skies are finally clearing.
Posted by jm at 10:01 AM
That bottom could easily be plumbed again, and indeed overshot to the downside in view of the massive bubble on the upside topping out at 218 in 2005, which was completely contrary to historical experience. Housing values fluctuated for a long time around the 120 level, but there is no reason why a bottom should be anchored around that number given the huge oversupply today.
What's really preventing the market from clearing is the banking system. It holds the bad paper on all this oversupply, and to clear the banking system needs to clear. Which means bankruptcy.
And as we all know, bankruptcy is failure, and failure is no longer acceptable in America. Which is why your kids will get no Fs in the upcoming academic term, and why housing will be a Zombie indefinitely.
Posted by jm at 8:56 AM
Anthony Randazzo thinks so, here:
RealtyTrac data suggests a 1.6 million home foreclosure backlog at present. Add this to the roughly 2 million foreclosures currently in progress, according to Barclay's Capital research, the 1.5 million to 4 million homes that are at least three months behind on their payments, and the 10 million mortgages that remain underwater and candidates for defaulting down the road, and you get headwinds of several different storms coming together to create a potential foreclosure hurricane headed right for the shores of today's supposedly bottoming out housing market.
Obama has done nothing important to address this problem, or the unemployment problem, during his entire tenure.
And Romney actually INTENDS to do nothing about housing if he is elected.
So expect more of the same, with downward pressure on housing prices.
Wednesday, August 29, 2012
The news release is here.
The awful number is no longer 1.5 percent, but 1.7 percent. An annualized growth of this small magnitude is about half of the historical average up until the year 2000. In the post-WW2 period GDP averaged about 3.5 percent per annum until the turn of the century.
From 2000 to now, however, GDP growth has been far less robust, with year 2004 the lone year as high as 3.5 percent. All the rest have been lower, with some negative in the little depression of 2008 and 2009.
The pdf is here.
Has it occurred to anyone we were spending too much money taking the war to the enemy, and making war on the American people in the name of security, and subsidizing too much stuff like drugs for seniors, food stamps, and healthcare? Ratcheting up these expenditures during the last decade has coincided with a streak of terrible growth numbers.
The necessity of spending cuts has never been greater, but our politicians, of both parties, seem bent on doing anything but cut spending. Which is why AAA went away.
Posted by jm at 10:21 PM
Most of the commentary I'm reading from Catholic critiques of the Republicans is avoiding the manifest hypocrisy of the "life of the mother" and "cases of rape" excuses for abortion advocated by many Catholic Republicans and the Romney campaign.
Those excuses are contrary to Catholic teaching, yet there they are, so-called Catholics, so-called conservatives, hounding out of the Republican Party a man whose point was that pregnancies resulting from rape are rare, which they manifestly are, and that allowing them to come to full term and enjoy life isn't an "option" in some policy world. It's a moral imperative. In this Rep. Todd Akin, a conservative Presbyterian from Missouri, is a better Catholic than the Catholics.
Instead, the critiques are focusing on the libertarianism of Rep. Paul Ryan.
This makes excellent sense, after some reflection, for the simple reason that Catholicism sees in libertarianism a rival ideology, not unlike what Bolshevism saw in National Socialism. The point says more about Catholicism than it does about libertarianism. Catholicism fell victim to the ideological habit of mind long enough ago that Spengler in the 1930s could say:
"[A]ll Communist systems in the West are in fact derived from Christian theological thought . . . Christian theology is the grandmother of Bolshevism."
This observation makes the history of political economy necessarily a topic under the study of the history of religion. The concept of the church, which was totally foreign to Jesus, took the place of the failed imminent coming of the kingdom of God in his teaching, and immanentizes the eschaton he expected before the disciples had finished preaching in Israel. That false kingdom is now administered by popes, cardinals, bishops and priests. As such the church has been responsible for spinning off rival, "heretical", ideologies ever since. And if not the ideologies themselves, at a minimum the ideological habit of mind.
The conservative response to this is most certainly not to keep thinking ideologically. A dead Catholic named Russell Kirk also tried hard to tell us these things before he died.
Like Spengler's, his remains a voice crying in an impoverished wilderness of idealisms.
The author writes that bin Laden ducked back into his bedroom and the SEALs followed, only to find the terrorist crumpled on the floor in a pool of blood with a hole visible on the right side of his head and two women wailing over his body.
Bissonnette says the point man pulled the two women out of the way and shoved them into a corner and he and the other SEALs trained their guns’ laser sites on bin Laden’s still-twitching body, shooting him several times until he lay motionless. The SEALs later found two weapons stored by the doorway, untouched, the author said.
It was a kill, not a capture, operation from the get go, and the regime's story that Osama went for a gun just proves that there is still a moral majority in America which has to be mollified, as usual, with lies.
Posted by jm at 10:35 AM
Tuesday, August 28, 2012
Mark Levin is all over this like a chicken on a June Bug.
Romney obviously hates the primary process because it exposes his weaknesses as a
candidate conservative. By having power over the rules between conventions and the delegate selection process, if he wins election in four years he'll be burying every Tea Partier under six feet of concrete.
The time for a national conservative third party has arrived.
I won't vote for Obama. I would never do that. But I sure as hell won't vote for Romney now.
It was "Mickey Mouse" for me before, but now it's probably Virgil Goode.
Posted by jm at 6:48 PM
In teh last segment, so-called conservative Sean Hannity affirmed his position on abortion as allowing abortion in the cases of rape or the life of the mother being in danger.
This amounts to self-excommunication because abortion in all instances is prohibited under Catholic dogma. For taking this position he should be denied communion as bishops have threatened against prominent Democrat politicians who support abortion. The same goes for Rep. Paul Ryan.
When is the Roman Catholic Church going to make a public statement rebuking this man who is much more public than any politician because he has microphones to the millions and is a routine and vocal proponent of Roman Catholicism?
Posted by jm at 5:29 PM
Notice the dramatic uptick in fuel economy after the oil embargo of the 1970s. Economy went from about 12 mpg to about 20 in just about 5 years, an improvement of over 60 percent in a very short time.
Then economy was flat to declining for 30 years.
Since we've committed ourselves to the suburban lifestyle, it only makes sense to get the best fuel economy we can. And if anyone can do it, the Japs can.
Posted by jm at 2:57 PM
Did you ever get the feeling that an entire column was merely a pretext to slam someone the writer didn't like . . . with a sucker punch saved for the very end?
That's the overwhelming feeling I got from reading Mark Judge's "HL Mencken Against The Journalists" here, which ends with this:
"So let's just put an end to it. Call them analysts. Call them pundits. But to coo over people like Frank Rich and Monica Crowley as brilliant intellectuals is to denude the term of meaning."
After ridiculing liberal after liberal in the column the lazy writer realizes at the end he needs to be an equal opportunity critic and throws poor old Monica under the bus just to make himself look objective.
If Mark Judge hangs around people who coo over anyone, let alone journalists, he's clearly in special company already. They used to call them asylums.
You know, the sort of place which makes you write like this: "but as a man with whom we could speak with about any topic".
Neither Social Security nor Medicare has ever had enough assets to cover its liabilities. Very simply, there has never been enough money put aside to do what the government promised to do.
These systems operate on what their advocates like to call a "pay as you go" basis. That is, the younger generation pays in money that is used to cover the cost of benefits for the older generation. This is the kind of financial pyramid scheme that got Charles Ponzi put in prison in the 1920s and got Bernie Madoff put in prison in our times.
There's a great interview with Luigi Zingales in The Economist here:
Companies with a lot of money abroad sponsored a bill in 2004/5 that allowed them to repatriate their profits at a low tax rate. Thus $1 produced $220 of tax savings. The Bush-approved drug and Medicare act was a huge bonanza for the drug industry. Their market value increased by several billion dollars when this was announced. I could continue.
American incomes have fallen during the "recovery" according to this story:
Real median annual household income fell to $53,508 from $54,916 during the 18-month recession from December 2007 to June 2009, according to the firm’s [Sentier Research LLC] study of income data for the 36-month period ended in June 2012. Incomes kept falling during the 36-month period since then, dropping to $50,964 in June 2012.
The statistic is nearly meaningless if you haven't lost your career.
People with personal experience of having lost a good job and having had to take such work as they can get typically see household income drop much more than a few to several percentage points. Try experiencing a 40+ percentage point cut. That's what's happened to many of the long-term unemployed, whose huge losses get averaged out, and lost, over all households in these studies.
Posted by jm at 10:56 AM
The whopper of the day comes from Annie Lowrey in The New York Times, here:
Shortly after “taxmageddon,” perhaps sometime in February, the American government will exhaust its borrowing authority – meaning some unprecedented form of government default. It almost happened in the summer of 2011 and resulted in a credit downgrade. Neither party wants to go back there. Expect some agreement to lift the debt ceiling to come along with the deal to delay or otherwise soften the blow of the fiscal cliff.
No, we experienced a credit downgrade because we needed to cut $4 trillion in spending over the next ten years and could only agree on $1 trillion, and if we don't get busy cutting spending more than that there will be more credit downgrades to come.
The partisan and liberal New York Times must think we can't read out here in fly-over country. "Tax reform" is now code for "tax increase".
The drumbeat to raise your taxes continues, here, an "absolute necessity":
Both parties agree on the absolute necessity of reforming the addled, inefficient American tax code. That means eliminating much of the underbrush of credits, loopholes and expenditures and then reducing marginal tax rates. Of course, the devil is in the details. Just about every tax expenditure has a powerful interest group behind it. That is part of the reason why neither party has gotten specific about what they would put on the chopping block, and both anticipate a drawn-out fight during the tax reform process.
Marginal tax rates are much easier to raise and frequently are raised, which is why the credits and deductions have to go: as long as the deductions and credits remain they suppress revenues when taxes are inevitably raised after a "reform". That's exactly what happened in 1993 after the broadly lower rates achieved in the 1986 tax reform were swept away by Bill Clinton. The deductions sacrificed in 1986 never returned.
Liberals in both parties intend to do this to the American people again.
There's nothing wrong with the current code that spending cuts couldn't fix: especially on defense and social welfare which both have dramatically increased under Bush and Obama.
Posted by jm at 9:39 AM
The national average price of a gallon of gasoline stayed above $3.11 for about 7 months under liberal George Bush, but under catastrophe Barack Obama we're now well into our 19th month above $3.11.
Monday, August 27, 2012
The New Republic has trouble spelling the name of the mayor of Los Angeles, Antonio Ramón Villaraigosa:
What, then, could be the path to a Republican resurgence? The first thing would be to break the Democratic hold on the minority vote by winning back a reasonable share of the Hispanic vote—say, 40 percent or more, which Republicans once got. Success in this case depends on advancing policies on immigration that win favor among Hispanics, but it also may hinge on Republicans take the side of Hispanics in a battle over scare public resources with blacks. One could see this kind of black-Hispanic division surfacing in 2005 Los Angeles mayoral election pitting James Hahn, who enjoyed black support, against Antonio Villagarosa.
Well . . . who wouldn't?
Posted by jm at 4:16 PM
Liberal Al Hunt at Bloomberg, here, bemoans the erosion of liberal Republicanism and hurls the "ideologue" epithet at conservatives:
'Movement conservatives are motivated by ideology, sometimes small-government economics, other times the religious social agenda. They range from Paul Ryan, the small-government, economic policy-savvy vice-presidential candidate, to Todd Akin, the Missouri Senate contender who last week suggested that it is rare for women to become pregnant as a result of rape, saying “If it’s a legitimate rape, the female body has ways to try to shut that whole thing down.”'
To a liberal Republican, apparently, preventing murder and national bankruptcy are unrealistic and idealistic causes.
Conservatives, on the other hand, are nothing if they aren't against ideology, and for life and economic solvency.
Conservatives define ideology as visionary speculation of an idealistic and unrealistic sort. They abhor notions of the perfectibility of man, and therefore also of man's social arrangements. They are not dreamy enthusiasts like President Obama who believes that "our union can be perfected."
Conservatives are ever mindful that human nature is a mixture of good and evil, and that just as self-government, the prerequisite of freedom, requires that human nature be checked by the individual's recourse to religion and morality to prevent sin and servitude, government above the individual level must also be limited by recourse to checks on its power to prevent crime and injustice. Above all, conservatives are mindful that there are no arrangements which will guarantee 100 percent success in these matters, only that some arrangements tend to work better than others, taught by long experience and reflection. They know that just because in the long run we are all dead doesn't mean there should be no speed limit signs.
It is a characteristic of liberalism to use intellectual categories like "ideology" not just to promote its (unrealistic) goals, but to attack its political opponents, after the manner of the Marxists who attacked bourgeois ideology. Nevermind that the bourgeoisie has hardly anywhere, ever been so self-conscious as even to think in ideological terms. But Barack Obama does, and self-consciously brings it up even when nobody else has: "I mean, that's my point, is that -- I am not an ideologue. I'm not." The term is left wing in its origin and development, and its continued use by liberals as an epithet and an intellectual category shows the close relationship between liberalism and the left which endures to this day.
This is who Al Hunt is, regrettably, and what liberal Republicanism is: an inherited thinly-veiled hatred of the middle class, which in its love of life and the enjoyment of its fruits stands in the way of the crackpots and schemers.
Hard-money conservatives like Larry Kudlow who think Gov. Mitt Romney is actually serious about maintaining the value of the dollar ought to remember that Romney argued in October 2011 that the TARP bailout was designed to keep the currency worth something:
According to Governor Romney, the $700 billion Wall Street rescue package "was designed to keep not just a collapse of individual banking institutions, but to keep the entire currency of the country worth something."
Noting could be further from the truth and Romney knows it.
TARP was not sold as a program to prop-up the dollar; it was sold as a means of keeping credit markets liquid, to keep banks lending to business, so businesses would keep people employed.
Not surprisingly, from that perspective TARP has been a spectacular failure -- because as soon as Congress granted then-Treasury Secretary Henry Paulson a blank check for $700 billion (along with near-dictatorial powers over the American financial services industry and de facto control over the U.S. economy), something changed.
Suddenly, instead of being a program to move illiquid mortgage-backed securities off the books of banks, TARP became a no-strings-attached cash infusion to favored financial institutions and corporations.
Among the insiders who received the no-strings-attached cash were Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group – that’s what Romney and Cain were defending.
If borrowing money to spend on circumventing the failure necessary to the proper operation of free markets props up the value of the dollar, it hasn't worked very well.
Since the (first!) bailout of Chrysler signed into law by Jimmy Carter in January 1980 you now need $2.73 to buy what $1.00 did then.
Way to go Brownie!
|a little hurricane humor there|
And William Cohan buys it, here for Bloomberg, after Jack Welch, Lou Gerstner and Bob Wright all agree with this statement from Dimon:
"[T]he rest of us should hold hands, get together -- collaborate -- business and government together to fix the problems. It’s going to be very hard for government to do it on its own and business can’t do it without collaborating with the government.”
Gee, what a shock. GE, IBM, NBC and JP Morgan Chase and Co. all agree that we should just forget the sins of the past and . . . move forward!
Now where have I heard that before?
Against Obama methinks they doth protest too much. Just the semblance of disapproval is too much for these guys. And with Romney in charge, that farcical posturing will at last be over, and it will be back to business as usual.
I'll bet none of the mothers of these guys ever spanked them once.
Sunday, August 26, 2012
A guy with a high school education called in to Bob Brinker's "Money Talk" radio program today claiming to have collected almost 19 pounds of gold nuggets and gold dust over the years.
With a purity on average of between say 83 and 92 percent, those nuggets at $1,672 the ounce are worth between . . . $415K and $460K!
What a nice problem to have. He has $40K in the bank, but ten times that in gold.
Posted by jm at 7:01 PM
So says Jeffrey Snider of Alhambra Investment Partners here:
The new Basel Rules are positioning gold to enter the all-important ZERO RISK WEIGHTING category (targeted for adoption in 2015). Upon adoption, the new proposed rules would “elevate” gold in the regulatory hierarchy to the same status as cash and OECD sovereign debt in terms of capital ratios and regulatory leverage. Even the FDIC and OCC here in the United States have opened the requisite comment periods to adopt this proposal for US bank treatment. ...
If banks can now, under these proposed rules, keep the physical in their vaults and monetize it as collateral in derivative arrangements (IR swaps mostly), then they have a new outlet to obtain positive cash flows from gold without rendering additional physical selling – an almost exact reversal of the [previous] leasing/swap dynamic. This is also extremely useful if gold is accepted at the zero risk weighting, meaning that it would provide not only direct monetization for gold holders, it would do so with added regulatory and capital leverage (which is all that banks are after for any asset they own). Less selling pressure has been positive for price thirteen years , but it might also lead to banks reclaiming physical stocks from the market place if demand is high as a preferred collateral (which would be the case as uncertainty rises, particularly with regard to currency risk since gold is a good hedge against shifting currency prospects).
If you haven't yet heard of it, the threat from "regionalism" is the attempt to overturn the dominant organizing principle of physical space in America today: the suburbs and the governments formed to serve them. In my most recent local primary election, the Republican candidate favoring the regionalist philosophy not so narrowly won against a challenger who ran opposing it.
Americans overwhelmingly live in the suburbs not in the least because they like it. There they have four walls of their very own, some green grass to enjoy and a little peace and quiet away from the bustle of life and the crime associated with large cities. Love of country-like living also happens to be an important inheritance from our English past, from which we get the ideal of the country gentleman, the garden and the hunt. Our estates are often less impressive and the ideal not so self-conscious, but few of us can imagine a better way to live.
The war against this way of life has taken many forms in recent times, the war against the SUV and now against the gasoline engine itself being prominent examples. What better way to deprive us of our dream than to compromise our access to and enjoyment of it? Another is to force us back into trains, where TSA VIPR units will soon be frisking us as frequently as they do now at airports. Yet another is to take away the tax deduction for mortgage interest, to make home ownership in the suburbs itself less appealing economically. So many forces are arrayed against the way of life of millions of normal Americans that one might be forgiven for thinking it is all some vast conspiracy.
Lately the war against our preferred way of life has taken shape in the drive toward "regionalism", a dreary subject to most Americans which is really a sleeper threatening to deprive citizens of representation and extend a trend which has been at work since at least the 1920s. At that time in America the US House of Representatives, chiefly controlled by Republicans, voted to circumvent the constitution and fix the number of representatives at the then current number of 435, when on the constitution's principle we should have by now at least 10,267 members in the US House. That's the reason your congressman doesn't know your name, and why you probably don't know his.
Today Democrats and Republicans in various places are uniting to extend this trend by forming alliances on behalf of "tax sharing" districts and "amalgamated" governments at the local level in the name of squeezing "efficiencies" out of larger scaled units. In fact the real motivation often turns out to be finding new sources of revenue to pay the exorbitant salaries, pensions and health care benefits of unionized government employees who have been promised the moon by big cities but which can no longer afford it, if they ever could.
There is a new book on the subject by Stanley Kurtz, Spreading the Wealth: How Obama is Robbing the Suburbs to Pay for the Cities, and an important article here by Wendell Cox, REGIONALISM: SPREADING THE FISCAL IRRESPONSIBILITY, a short and helpful introduction to the subject, from which this excerpt:
"[S]pecial interests have more power in larger jurisdictions, not least because they are needed to finance the election campaigns of elected officials, who always want to win the next election. They are also far more able to attend meetings – sending paid representatives – than local groups. This is particularly true the larger the metropolitan area covered, since meeting[s] are usually held in the core of urban area[s] not in areas further on the periphery. This [gives] greater influence to organized and well-funded special interests – such as big real estate developers, environmental groups, public employee unions – and drains the influence of the local grassroots. The result is that voters have less influence and that they can lose financial control of larger local governments. The only economies of scale in larger local government benefit lobbyists and special interests, not taxpayers or residents."
Posted by jm at 10:20 AM
Friday, August 24, 2012
|"Caesar ... and Christ; they had them both. And the word is spreading only now."|
Oh dear, here, but if the author only understood that he also believes only in death:
[B]y now the base knows what Governor Romney believes, too. By now we all know what Governor Romney believes; by now his beliefs are more manifest and less mysterious than that of any candidate who’s ever run. Governor Romney believes nothing. ... What’s happening in and to the Republican Party this past week isn’t an aberration; it’s happening because of what the party has become . . ..
It's like a bad episode of Star Trek, in which The Enterprise visits a planet bent on civilizational suicide but must follow The Non-Interference Directive and let it go all to hell.
Posted by jm at 10:50 PM
Eliminating the mortgage interest deduction has become something of a fetish for liberals and libertarians in America. The enthusiasm for eliminating the deduction suggests a hatred for bourgeois values.
Liberals use it like a shield to obscure the hidden privileges they enjoy under the tax code, privileges which the vast lumpen proletariat is too dumb to understand. Extracting more revenue from their lessers so that they have more money to play with is the goal of liberals, whose constant refrain is "the money is in the middle." Actually, the money escaping taxation in America is at the top, where nearly $2 trillion of net compensation escapes Social Security taxation, amounting to a tax loss to the feds of about $300 billion annually.
Libertarians use elimination of the mortgage interest deduction more actively. To them it is like a club which they can use as a weapon to drive people from their homes in their effort to turn workers into interchangeable parts, which they can then move around wherever they need them and thus drive down the cost of their labor. If you are unemployed for a very long time because you won't move from your home, to a libertarian like a John Tamny or a Megan McArdle at The Atlantic, you are nothing but a depreciating asset, as she has put it.
Just look how Bruce Bartlett attacks the mortgage interest deduction here, misrepresenting its place not simply by singling it out but also by failing to place it within the spectrum of tax loss expenditures generally:
"The problem, insofar as tax reform is concerned, is that the mortgage interest deduction and that for property taxes reduce federal revenues by $100 billion per year."
If only that were an impressive number compared to the usual categories of tax loss expenditures.
The Joint Committee on Taxation, for example, puts the combined tax loss from deductions for health-related and cafeteria plans at $140 billion.
Tax loss from exclusion of retirement-related benefits comes to $160 billion when you include Social Security and Railroad retirement benefits, capital gains excluded at death, and pension and 401k plan contributions.
The last two together alone come to $91 billion.
Coincidently, reduced rates of tax on capital gains and dividends as a category by itself means a tax loss of nearly $91 billion, more than the mortgage interest deduction at $78 billion.
The rich may benefit a lot from the tax perspective from the mortgage interest deduction, but they benefit more than anyone from reduced rates of tax on capital gains, and Bruce Bartlett knows it:
For most people, income is simple: it means wages or perhaps a pension or Social Security benefits. Income from capital – dividends, interest, rent and capital gains – seldom enters into the calculation. The vast bulk of such income is earned by the ultrawealthy, like Mr. Romney.
Bruce Bartlett has made it a regular habit to sniff at the proposals of Republicans, who recently restored the mortgage interest deduction plank in their platform, the real inspiration for his screed.
In this he reminds me of no one so much as Katie Couric when she went nosing around the "unwashed middle" before her ilk got hosed off in the November 2010 elections. But liberals still have a certain air about them.
I think they need another bath.
|"You're umbday in any language"|
In ye good olde days, a college degree came with a foreign language requirement in addition to demonstrated facility with the finer points of English.
Holders of college degrees could reliably be counted on to read something in Italian, German or French and put it in a presentable form in their own language. In addition to knowing how to type, the skill supplements the work, say, of a financial blogger, unless your name is Mish, who has a degree in civil engineering.
On August 21 he's trying to plumb the depths of stories about the European Central Bank, noting here:
Every day I get links from Spain, Italy, Germany, and Australia. The first three frequently cause problems. Translation from German is particularly difficult.
For example, a Google-translated headline on Welt Online reads ECB chief demonstrates German banker. ...
With the help of Bran from Spain, Andrea from Italy, and "EM" from Germany I can frequently provide much better translations of foreign articles than I could otherwise.
Then three days later he complains here in a lengthy diatribe that colleges today turn out too many useless degrees:
Yet colleges churn out thousands of graduates, year after year, with perfectly useless degrees.
Clearly his own degree has failed him, not in the least because, even after all that, he still doesn't recognize it.
Posted by jm at 9:01 AM
Mish has the chart and discussion here.
Posted by jm at 8:34 AM
Thursday, August 23, 2012
Based on Rasmussen's electoral college map tonight, Gov. Mitt Romney must win Florida to prevail against Obama.
Rasmussen shows Obama presently with 247 and Romney with 206 electoral college votes, and just six states in toss-up status (unlike RCP's ten in toss-up status): Colorado (9), Iowa (6), Wisconsin (10), Ohio (18), Virginia (13) and Florida (29).
My hunch is Obama figures Iowa is key to himself because he's counting on heavily union-dominated Ohio going his way, but Obama is so far making an effort not to telegraph this fact. Together those two toss-ups put him at 271, just enough to win. That's why he's spending so much time in Iowa after the pick of the 42 year old Rep. Paul Ryan by Romney, and why Byron York is fixated on Iowa in a recent column, but for the wrong reason. Iowa is more winnable for Obama than it is for Romney. In other words, Obama is theoretically right now conceding in a worst case scenario Florida, Virginia, Wisconsin and Colorado to Romney, which together give Romney only 267, not enough to win, because he believes he can win in Iowa and Ohio.
A Romney loss in Florida and an unlikely sweep of all the rest of these Rasmussen toss-ups means Romney still loses with 262.
Romney must prevail in Florida to win, if Rasmussen's map is correct. That's why Romney has focused on Florida right out of the box in sending Rep. Paul Ryan to Florida to appear there with his mother, reassuring the seniors on Medicare.
This election is going to be about the economy in general, but spending for Medicare is the tip of the Republican spear, while the president parries with appeals to the youth vote, which in Iowa turns out second only to Minnesota. For a state Romney at one time early decided not to contest in the primaries, Sen. Rick Santorum's narrow victory there identified Iowa to Obama as a state vulnerable for a candidate Romney.
The Des Moines Register reports here on five visits to Iowa by Obama in recent days:
The sitting president of the United States is coming back to Iowa next week to do some more campaigning, on the heels of a super-sized three-day visit to the state last week.
Obama is spending so much time in such an insignificant place because of the electoral math somewhere else, combined with the probability of winning Iowa's youth vote.
Well obviously! He's a man, a Protestant, and holds an MDiv degree from a theologically conservative seminary, making him once, twice, three times a . . . baddy.
Lois Schwaeber, director of legal services for the Nassau County Coalition Against Domestic Violence, said cases where people make false reports of rape hurt all legitimate rape victims seeking justice. But she said prosecuting someone who has made a false report will discourage real rape victims from coming forward as well.
But in August 2012 Rep. Todd Akin can't use the phrase "legitimate rape" and remain the Republican nominee for the US Senate from Missouri?
The story is here.
Here is the screenshot:
But for some reason Rep. Akin made a mistake using the words "legitimate" and "rape" together.
The story is here by Ann Givens:
On the one hand, they will want to discourage people from lying to law enforcement, and show that there will be consequences for doing so, experts said. On the other, they don't want to discourage legitimate rape victims from coming forward, or discourage people who lied at first from telling the truth later on, experts said.
Here's the screenshot:
Posted by jm at 5:32 PM
Rep. Todd Akin can't use the words together, but she can?
The story is here:
"There is potential that the recent cases involving false allegations of sexual violence will negatively influence legitimate rape victims from coming forward to receive recovery services, report the crime to law enforcement and ultimately hold their offenders accountable," she says.
Here's the screenshot:
Posted by jm at 5:10 PM
So says George Neumayr for The American Spectator, here, and so do I:
An authentically conservative party would find Romney's unprincipled position far more chilling than Akin's gaffe. If unborn children gain or lose their right to life depending upon the circumstances of their conception, then the party has already conceded that that right doesn't exist. Ronald Reagan understood the implications of that concession and never wavered in his defense of the right to life of all unborn children, not just some of them. ... For all the talk about "pragmatism" and "diplomacy" this week from country club Republicans, they didn't display any towards a candidate who won a primary fair and square.
Posted by jm at 3:03 PM
From Bill Kauffman, here:
[T]he Port Huron Statement, and SDS, emphasized the core principle of decentralization, of breaking overly large institutions and even cities down to a more human scale, “based on the vision of man as master of his machines and his society.”
“We oppose the depersonalization that reduces human beings to the status of things,” declared the authors. The line might have been written by another Michigan lad, Russell Kirk of Mecosta. Kirk was no New Leftist, though he did later befriend—and in 1976 voted for—Eugene McCarthy, the peace candidate of the 1968 Democratic primaries, the distributist-inclined Catholic intellectual who befuddled his conventional liberal supporters with talk of a salutary “depersonalizing” of the presidency, of reducing that office to its constitutional dimensions, shorn of the accreted cult of personality.
"[T]he conservative movement is enfeebled, intellectually and in backing, at the very hour of its popular ascendancy. (By the way, America’s bigger men of business, with very few exceptions, never have been of any help to really conservative causes; if they think of politics at all, it is much as they think of professional sports teams: 'Winning is the name of the game.') This may become a fatal impoverishment. ...
I am not implying that conservative folk should set to forming a conservative ideology; for conservatism is the negation of ideology. The conservative public man turns to constitution, custom, convention, ancient consensus, prescription, precedent, as guides—not to the narrow and fanatical abstractions of ideology. I am saying, rather, that unless we show the rising generation what deserves to be conserved, and how to go about the work of preservation with intelligence and imagination—why, the present wave of conservative opinion will cast us on a stern and rockbound coast, perhaps with a savage behind every tree. Conservative leaders ought to declare, with Demosthenes, 'Citizens, I beg of you to think!' ...
So it is that thinking folk of conservative views ought to reject the embraces of the following categories of political zealots:
Those who urge us to sell the National Parks to private developers.
Those who believe that by starving South Africans we can dish Jesse Jackson and win over the black vote en masse.
Those who would woo the declining feminists by abolishing academic freedom through a new piece of 'Civil Rights' legislation.
Those who instruct us that 'the test of the market' is the whole of political economy and of morals.
Those who fancy that foreign policy can be conducted with religious zeal, on a basis of absolute right and absolute wrong.
Those who, imagining that all mistakes and malicious acts are the work of a malign or deluded 'elite,' cry with Carl Sandburg, 'The people, yes!'
Those who assure us that great corporations can do no wrong.
Those who discourse mainly of the Trilateral Commission, the Bilderburgers, and the Council on Foreign Relations.
And various other gentry who abjure liberalism but are capable of conserving nothing worth keeping."
-- Russell Kirk, 1986 (here)
Laura Ingraham calls him a liar, Sean Hannity gives a prominent forum to Ann Coulter, who likens Akin to Eliot Spitzer and elsewhere calls him a swine, and Hugh Hewitt encourages him to drop out. Oh yeah, and throw in the VP nominee, well after the deadline.
Wednesday, August 22, 2012
Why is it we hear the loudest shrieks for mortal sin from the mouths of Republican Roman Catholics?
-- John Quincy Adams
Posted by jm at 6:06 PM
If you generally tax some income at one rate and other income at a lower one, what do you think would happen over a long period of time?
Obviously you would see income shift to the category taxed at the lower rate, to the extent that this is possible for those earning it.
This is what has happened with income from capital gains, the tax rate on which has been much lower by law than the tax rates paid on ordinary income.
That's the long-term lesson from the data, the salience of which seems to elude Bruce Bartlett writing for The New York Times:
For most people, income is simple: it means wages or perhaps a pension or Social Security benefits. Income from capital – dividends, interest, rent and capital gains – seldom enters into the calculation. The vast bulk of such income is earned by the ultrawealthy, like Mr. Romney.
According to the Tax Policy Center, in 2011 those in the middle of income distribution got about 70 percent of their income from labor and only about 3 percent from capital. By contrast, those in the top 1 percent of income distribution got 30 percent of their income from labor and 35 percent from capital.
The disparity is even more pronounced when one looks at the distribution of aggregate capital income. The total came to $1.1 trillion last year. Of this, 86 percent was earned by those in the top 20 percent of households, ranked by income. But this figure is misleading, because within the top quintile, the vast bulk of capital income went only to those at the very top. ...
[T]he tax code makes a sharp distinction between income from labor and income from capital. Wages are fully taxed at rates as high as 35 percent by the income tax, plus taxes for Social Security and Medicare. In contrast, realized capital gains and dividends on corporate stock are taxed at a maximum rate of 15 percent and do not bear any taxes for Social Security or Medicare.
Income inequality in America has grown precisely for this reason, and it is an artifact of progressivism, and of liberalism generally.
The contemporary distinction between capital gains and ordinary gains got much of its impetus under FDR, when the modern tax code differentiated for the first time between capital gains held for 1, 2, 5 and 10 years, exempting from taxation 20 percent of gains, 40 percent, 60 percent and 70 percent, for the respective holding periods. Considering how steep and confiscatory marginal tax rates became after 1916, the provisions under FDR look like a bone thrown to the rich. What these reforms did, however, was cement the trend toward tax avoidance for the rich which had been introduced earlier.
Originally capital gains had been taxed as ordinary income up to a rate of 7 percent, which was the top marginal income tax rate for the first three years of the modern income tax. But as marginal tax rates on ordinary income skyrocketed after 1916, the low 7 percent capital gains rate continued to apply until 1921, after which the rate was 12.5 percent, regardless of holding period and despite the fact that marginal income tax rates soared to 63 percent and higher as the years marched on.
So from the very beginning the rich were given their privileges in tax avoidance by making distinctions between income while the broad mass of the people got soaked with income taxes on their ordinary income. The steeply progressive rates made it appear that the rich were paying their fair share when in effect they had recourse to a back door to ameliorate their condition through the capital gains code provisions. Liberalism was nothing if not hypocritical.
If our tax policy goal today is to reduce income inequality, as seems to be the prevailing notion among liberal and liberal-leaning commentators, we ought to reconsider that history and appreciate better how tax policy is often just pushing on a string. To a conservative what leaps to mind is making taxes on ordinary income look more like taxes on capital gains income by flattening rates, not the other way around, raising capital gains rates to look more like progressive income tax rates, and broadening the base up the scale by capturing all income of all kinds for Social Security and Medicare before considering broadening the base down the scale by abolishing tax loss expenditures like the mortgage interest deduction.
Income inequality begins with treating some forms of income differently than others for tax purposes. There may be important social and economic reasons for doing so, such as promoting family formation or capital investment, but it should never be forgotten that you will immediately be introducing inequality into the equation when you do. How you compensate for that is what matters in approximating a just society.