Irwin Stelzer Wonders Why Romney Isn't Attacking Democrat Crony Capitalism

Maybe because Romney isn't the right candidate?

It's a pretty good piece on American-style fascism by Irwin Stelzer for The Weekly Standard here, but I couldn't help but notice once again how even very smart people pour their ideas into and project their hopes onto candidates even though there isn't the slightest bit of evidence to justify it. Consider all these phrases from the article, which on every issue Stelzer recommends as conservative reveal that Romney is already NOT on board:

... doesn’t mean that Romney should refuse ...

And where is Mitt Romney ...

Alas, that statement came not from Romney ...

Romney must know better than anyone ...

Why does Romney not agree with ...

Romney can propose a simple rule ...

Romney can propose eliminating ...

Finally, where is Romney every time . . ..

If Gov. Romney isn't already showing a firm grasp of free-market conservatism as defined by the neoconservative Weekly Standard, what is he on board with?

Don't we already know that Romney thinks ObamaCare is nothing to get angry about?

Or how about out-of-control government spending (is there any other kind?), the cri de coeur of the Tea Party movement? Romney has explicitly stated that he will not slash spending as president, even though it's the very ground cronyism walks on. His answer for that? Because cutting government spending in a slow-growth environment would throw America into a depression.

This tells you that Romney is no different than Obama in one very important respect: he's cool, in the deceitful sense that he allows supporters to think he shares their passions when he doesn't. Just as Obama has deeply disappointed the American far left, a president Romney will do the same to the right on every issue dear to them.

The caution and calculation of such cool cats often gives the first impression of ulterior motives. Alternatively, however, the coolness may simply be a mask for an underlying mediocrity, or even stupidity.

For example, the single stupidest thing that Obama and the Democrats have done to date was to insist that they prevented a depression and bailed-out everybody to do it. Arguably what they should have done is embraced the depression which did in fact occur in 2008-2009 and blamed it on Bush. They also should have let the depression happen big-time, cleansing the debt-overhang for the good of the country and punishing their enemies in the process. Republicans would have been finished for decades to come, just like in 1932.

And you thought Obama was the smartest president ever.

Can Romney be far behind him? At this juncture in the campaign you would think a smarter candidate would be consistently avoiding everything which depresses the mood of the base of his party. If the neocons aren't happy with Romney, who is?

Not that it really matters much what Romney says or doesn't say about this, that or the other thing when it comes to actual governing. After all, the president proposes, but it is the Congress which disposes. (Unless, of course, you're Obama, who disposes of the Congress fairly routinely, whether on war powers in Libya, recess appointments or immigration.) America's problem with crony capitalism can indeed be made much worse by a president like Obama for whom it becomes his motto, no doubt about it. An awful lot of money has been wasted on failed green energy schemes.

But cronyism in America is really the specialty of our ever more remote representatives to the US House and Senate. Our nearly intractable problems of waste, corruption, and deceit which they are responsible for have taken over ninety years to develop, and they won't go away in an instant. What we most certainly need is to destroy the concentration of spending power in the hands of a few powerful men and women in the House and Senate.

One way to do that is to restore representation numbers to the constitutional ratio of 1 to 30,000, the number one answer to the constitution's number one perceived deficiency during the ratification process over two centuries ago. The immediate effect of installing thousands of new Congressmen today would be to dilute the power of the existing cabal of skilled cronies. It is true that as happened in the 1920s there seems to be nothing that would again prevent Congress from flouting that provision of the constitution even if we restore representation to the status quo ante. The last thing we need is 10,267 corrupt representatives instead of the 435 we've already got. Still, short of revolution in the streets, it's probably the best and most constructive alternative we have presently available, and probably a more certain guarantee of keeping things like ObamaCare from happening in future than mere reliance on one political party controlling the levers of a government distant from the people.

Another way which would help is to repeal the 17th Amendment, and return election of senators to the States and take it away from the globalized monied interests. That is no guarantee against cronyism, to be sure, but at least States would have actual representation in Washington again as the Founders intended. As it is, the only representation they have is before the bar of justice, if it agrees to hear the case at all. Ask the 26 States who lost in front of John Roberts how good they're feeling about that today. ObamaCare, after all, originated in the Senate. All things being equal, senators from those 26 States would not have voted for it and we wouldn't be having this enormous controversy.

These sorts of returns to originalism might actually make a difference going forward, but all the evidence we have right now is that Romney has as little interest in them as he does in the issues animating the base of his party.

A Romney in the White House will most likely mean just another dutiful tax collector for the crony welfare state, like the rest of them.

Luigi Zingales: Democrat Crony Capitalism Fosters Liberal Agenda

Luigi Zingales, quoted here:

“Democrats have promoted crony capitalism to foster their liberal agenda. They are pro-business -- at least certain businesses -- but fundamentally anti-market. This is exactly the opposite of what most Americans want. .  .  . A pro-market, but not pro-big-business, platform would be a winner for Republicans.”

The more efficient locution is "Democrats promote liberal fascism".

Geithner's NY Fed Knew Of Barclays Bank LIBOR Lies In April 2008 And Did Nothing

The little twit who got away with failing to report income on his tax returns and became our Treasury Secretary should hang for failing to report this.

As reported here:

The Federal Reserve Bank of New York learned in April 2008, as the financial crisis was brewing, that at least one bank was reporting false interest rates.

At the time, a Barclays employee told a New York Fed official that "we know that we're not posting um, an honest" rate, according to documents released by the regulator on Friday. The employee indicated that other big banks made similarly bogus reports, saying that the British institution wanted to "fit in with the rest of the crowd."

Although the New York Fed conferred with Britain and American regulators about the problems and recommended reforms, it failed to stop the illegal activity, which persisted through 2009.

America's LIBOR Banks' Silence Is Deafening

John Carney for NetNet, here:

I asked Bank of America, Citi, and JP Morgan Chase to provide answer[s] to four sets of questions about their Libor practices.

1. Who makes the Libor submission for your bank? How many people involved? Who does the submitter report to? How high up in management does decision go? Is it reviewed before or after submitted to BBA? Who signs off on changes?

2. How is the submission calculated?

3. Has this procedure changed over time?

4. Is it under review following Barclays scandal?

Not one of the banks would provide the information requested. Bank of America and JPMorgan declined to comment. Citigroup did not return phone calls.

BO's Got A Basketball Jones: One On One Against The World, Left-Handed

lyrics here

video here

HELOC Required Payments Are Set To Explode Between 2012-2018

Today, just $11 billion in home equity lines of credit require both principal and interest payments. By 2018 the number will be ten times that, $111 billion.

The four biggest banks alone hold HELOCs with credit lines approaching $300 billion.

Gretchen Morgenson has many of the details at The New York Times, here.

It is unclear from the story just how many first mortgages already underwater also have HELOCs. It is widely estimated that 25 percent of firsts are underwater. Add HELOCs on top of any of those and both lenders and borrowers are back in a world of hurt, as if they had actually gone anywhere but the purgatory we now inhabit.

At Best Meredith Whitney's Predicted Municipal Bond Market Meltdown Was Early

That seems to be the take away from this story examining the pros and cons of the US municipal bond market since 2010:

Whitney rocked the fixed income world when, during a December 2010 appearance on "60 Minutes" she forecast 50 to 100 muni defaults in 2011 that would cause damage in excess of $100 billion.

Though munis saw only 28 muni defaults in 2011 and about two dozen this year, most of which were comparatively small in dollar value, Whitney told CNBC as recently as March that a "tidal wave" of defaults looms.

"Ultimately, her numbers...are not out of the realm of possibility over the long term," Coffin says. ...

Overall, investors in the $3.7 trillion muni bond market seemed not to have cared much about the individual gloomy headlines.

But think about it: a worst case scenario $100 billion hit to a $3.7 trillion market is less than 3 percent. I seem to recall though that the prediction was reported as hundreds of billions of dollars.

As ever, whatever it is, diversification is key.

The Bane of Our Existence v. The Face of Bain Capital

The Financial Markets Are Completely Corrupt Monday Through Friday. On Weekends They Just Have The Staggers.

Simon Johnson on the completely corrupted financial markets, for The New York Times, here:

Robert E. Diamond Jr., who resigned last week as chief executive of Barclays, reportedly said, “On the majority of days, no requests were made at all” to cheat on Libor. The Economist, which does not make a general habit of criticizing prominent people in the financial sector, observed, “This was rather like an adulterer saying that he was faithful on most days.”

Vern McKinley Connects Long History Of Bailouts In US Especially With 1930s

Vern McKinley's new book on 100 years of bailouts in the US is reviewed here, including this quotation from the book:

“the number of agencies deploying bailouts multiplied, the safety net became bigger and bigger, and the primary beneficiaries were soon concentrated among the largest of financial institutions, who came to rely on and demand this ready source of government backstopping…” 

The word "fascism" never occurs in the review, but the smell is unmistakeable and Herbert Hoover would have recognized it.

It's Friday The 13th: Is This Rigged Or What?!

Bernanke Helps Banks Recapitalize By Paying Interest On Excess Reserves

That's the nice formulation of what's been happening since 2008 in banking from Mish today, here, taking inflationists like Michael Pento to the woodshed:

The simple fact of the matter is Pento has no idea how bank lending works in the real world. 

There is no other way to state it. If banks thought they had good credit risks, they would lend (provided of course they were not capital impaired).

Moreover, by paying interest on reserves, Bernanke is slowly recapitalizing banks over time. Would Bernanke easily give that up? Well he hasn't so far. Nor has he even dropped a hint of it.

The Federal Reserve can talk all it wants about fulfilling its too many and misguided missions, and it does so, incessantly, and I would say purposefully in order to divert your attention from the real mission. Nor is this done without the full approval of the political class in America, which profits from the arrangement.

The one thing you can be sure of is that the one mission the Federal Reserve has is to watch out for its own in the Federal Reserve banking system. Recapitalizing the banking system whose failures have cost the banking industry north of $88 billion is the Fed's #1 priority.

Our country is of the bankers, by the bankers, and for the bankers. If you can't find work or refinance your house, dat's tough, Anwar. Dhey are on a meession from Gad. The banks must be saved at all costs, which is why the taxpayers are on the hook for everything in the Fascist States of America.

Who is recapitalizing YOU?

Drudge Condi Rice Poll For VP: So-Called Conservatives Doubling Down On Liberalism

NY Fed Study Shows S&P 500 Near 600 Subtracting Fed Interventions Since 1994

Many have been thinking and some have been saying for quite some time now that assets are egregiously overvalued because of Federal Reserve policy which manipulates the cost of money, the problem with which is that this short-circuits the process of price discovery.

Barry Ritholtz is especially famous with me because he came out at a critical time and wrote that perhaps the most important investing lesson you can learn is "don't fight the Fed".

Now we have proof of this of a sort from the NY Fed itself, showing that minus Fed witching-hour moves in the markets, the Standard and Poor's 500 index would stand nearer 600 today instead of 1300.

The almost laughable story is here:

The FOMC has released eight announcements a year at 2:15 ET since 1994. The study took the gains in the SP 500 from 2 pm the day before the announcement to 2 pm the day of the statement and subtracted that market move from the SP 500’s total return over that time span.

Without the gains in anticipation of a positive Fed action, the SP 500 would stand at just 600 today, rather than above 1300.


575 looks as good to me now as it did in August 2011, here.

"We're going to get a recovery, because the amount of deficit spending taking place, a corpse would sit up."

"We're going to get a recovery, because the amount of deficit spending taking place, a corpse would sit up."

-- Martin Walker, May 2009

About 42 Percent Of Today's $10.2 Trillion Mortgage Market Is Still Private Label

That's the story from Diana Olick at CNBC.com, here:

Government-backed mortgages (Fannie Mae, Freddie Mac, Ginnie Mae) accounted for 58 percent of the $10.179 trillion U.S. mortgage market as of the end of March, 2012, according to data compiled by Inside Mortgage Finance. 

Private-label mortgage-backed securities (MBS) investors held 10 percent and banks/other financial institutions held 32 percent.  It’s that non-government, 42 percent of the market that is having the most trouble refinancing due to poor credit scores and negative equity. Lenders and investors are particularly risk-averse these days.

Mish Admits The Hard Lesson Of Fighting The Fed And Global Central Banking

It's always refreshing to read someone who admits to being wrong. That is a person who is open to the world and learns from it, and that is a person you want to read because you can learn something too.

Here's Mish:

I surely underestimated the effect of global coordinated liquidity move[s] by central bankers virtually everywhere (US, EU, UK, China, Australia, Canada, etc.). The result was we had a 10-year stock market rally in three years. ... [But t]he fact of the matter is Fed tail-chasing policies combined with fractional reserve lending and moral-hazard bailouts have amplified the crest and trough of every boom and bust.

Mish admits he can't predict the next bust which will be a doosie, but he's flat-out asserting we're already in a recession for one key reason: 

Fiscal stimulus from Congress is not coming.

The significance of that must not be ignored, as many of us ignored its opposite back in May 2009 as told by Martin Walker of UPI:

"We're going to get a recovery, because the amount of deficit spending taking place, a corpse would sit up."

Keep your powder dry.

Glass-Steagall Was An Expression Of Hierarchical System Modularity

That is the unstated conclusion of Mark Buchanan's "Living Cells Show How to Fix the Financial System" for Bloomberg.com here:

In “The Architecture of Complexity,” an extraordinarily original paper published 50 years ago, the economist, psychologist and artificial-intelligence pioneer Herbert Simon asked the question, Why does nature so consistently organize itself into hierarchies? Why, that is, are so many of its creations designed as systems of systems? ...

Both high concentration and high interconnectedness contribute to an “everything is linked to everything” outcome that is the very opposite of modularity, and a likely recipe for instability. Financial engineering should learn to avoid this architecture, just as surely as biology has.

Abandoning Glass-Steagall in 1999 was obviously not a milestone of evolutionary progress.

Milos Forman Isn't Just Skilled At Movies, But Also At Disinformation

Gee, I wonder where he could possibly have learned about disinformation techniques?

In concert with The New York Times, here, Milos Forman offers up a little disinformation on behalf of the regime, which couldn't possibly come close to qualifying as socialist or even militant, no:

"What we need is not to strive for a perfect social justice — which never existed and never will — but for social harmony. Harmony in music is, by its nature, exhilarating and soothing. In an orchestra, the different players and instruments perform together, in support of an overall melody."

Sure, sure:

"A new dawn of American leadership is at hand. To those who would tear this world down - we will defeat you."

"Our union can be perfected. And what we have already achieved gives us hope for what we can and must achieve tomorrow."

-- Barack Obama, 4 November 2008 (here)

As Ever, Monetarists Blame Savers For Depression Instead Of Themselves

So Martin Wolf, here:

In 2007, US gross private borrowing was 29 percent of GDP. In 2009, 2010 and 2011, however, it was negative.

Above all, private sectors are running large surpluses of income over spending. In the U.S., the financial balance of the private sector turned from a deficit of 2.4 percent of GDP in the third quarter of 2007 to a surplus of 8.2 percent in the second quarter of 2009. This massive shift would surely have caused a huge depression if the government had been unwilling to run offsetting fiscal deficits. That is how the depression was contained. ...

Austerity should follow a strong recovery, not proceed [sic] it.

Should! What a crock!

Private actors in every economy everywhere work every day year in and year out in the hope that they will and the belief that they can save enough to enjoy and care for themselves and their families, but governments never save a damn thing, not even in the good times, which is why citizens hate taxes.

The promise of the time value of money leads the wise always to save, and when they cannot save to economize. Truly exceptional individuals always do both, but neither idea can even be found in the track record of governments.

Think of it as a form of bipolar disorder writ large. The whole world is suffering from it.

"Liberalism is a mental disorder."

-- Michael Savage

Remember People! Only An Ultra-Conservative Losing Would Be A GOP Debacle!

A Mitt Romney loss? Well, that wouldn't be a debacle; that would be just a loss.

So said David Frum, spokesman for the non-Tea-Party-type Republican, last October, here:

Back-to-back losses under John McCain in 2008 and Mitt Romney in 2012 will open the way to an ultra-conservative nominee in 2016 -- and a true party debacle.

It's just like Keynesianism, see. If massive spending doesn't succeed, it's because we didn't spend enough. How do we know that? Well, we failed, so we didn't spend enough.

Faith is by definition not falsifiable.

Thars Gold In Them Thar Landfills

As told here:

Each year 320 tons of gold and more than 7,500 tons of silver are used in the manufacture of iPads, Samsung Galaxy Tabs, notebooks, PCs, smartphones and more. Recovering that metal when the device is discarded could be worth $21 billion a year.

New York Fed's Geithner Knew All About Libor Irregularities In 2008

So says a story, here:

According to the calendar of then New York Fed President, Timothy Geithner, who is now U.S. Treasury Secretary, it even held a "Fixing LIBOR" meeting between 2:30-3:00 pm on April 28, 2008. At least eight senior Fed staffers were invited. ...

Darrell Duffie, a Stanford University finance professor who has followed the Libor issue for several years, said that he believed regulators were "on the case reasonably quickly" after questions were raised in 2008.

"It appears that some regulators, at least at the New York Fed, indeed knew there was a problem at that time. New York Fed staff have subsequently presented some very good research on the likely level of distortions in Libor reporting," Duffie said. "I am surprised, however, that the various regulators in the U.S. and UK took this long to identify and act on the misbehavior."

Just 64.3 Percent Of Labor Force Is Working, A Level We Left Behind In 1985

Chart and data here.

Thomas Sowell for Investors.com puts that into perspective, here:

"During this administration, the proportion of the working-age population that has a job has fallen to the lowest level in decades. The official unemployment rate does not count the millions of people who have simply given up looking for a job.

"If everybody gave up looking for a job, the official unemployment rate would fall to zero. But that would hardly mean that the problem was solved or that the 'stimulus' worked. Creating particular jobs does not mean a net increase in jobs."

Libor Scandal Is A Ridiculous Witch Hunt By Hypocritical Governments

So says Guy Spier for CNBC here:

[T]his seems like a ridiculous witch hunt to me, and there is an atmosphere of “shoot first, ask questions later”, which is unwarranted, and is ultimately highly destructive to London . . ..

I find the hypocrisy to be massive: There are the Bank of England, the Fed and other central banks who, in cahoots with their respective treasuries are massively and successfully manipulating interest rates via quantitative easing — something which comes at very high and real cost to those members of society who were parsimonious spenders, and who saved up money for a rainy day, who are now earning pittance on their savings.

And these most responsible members of society are extremely ill-served by ... self-serving and bloated governments ... which ... for far too long, they have been living beyond their means and ... borrow too much.

ObamaCare Creates Not Just Harm, But Havoc For Jobs

Strong words from hedge fund manager Dennis Gartman of The Gartman Letter, quoted here:

"Governments can, at best, try to do little if any harm to the economic environment, and this administration is not only creating harm, it is creating havoc with its health care bill which has jeopardized any hopes for material increases in jobs on the part of private industry until the elections are held and either the current regime is retained or a new regime takes its place. This is the harsh reality of the moment."

Libor Shmibor: If Anyone's Been Manipulating Interest Rates, It's The West

Not just one fine formulation about our banking problems from Nicole Gelinas, reminiscent of Ambrose Evans-Pritchard's picturesque "debt draws forward prosperity", but two in one column just loaded with even more good sense (emphases added in red):

If the West had let markets work in the years leading up to 2008 and beyond, there’d be no need to get rid of this crop of bad actors. When bubble-era banks went out of business because of their disastrous mistakes and mischief, they would have taken their failed leadership with them.

Yes, a few firms did fail, but not enough to change the institutional culture of Wall Street and the City (London’s financial district). Instead, institutions that should have gone under, including the Royal Bank of Scotland, have forged ahead, dragging problems that should have been solved by now into the future and harming economic growth. ...

[I]f anyone has been manipulating interest rates to pretend that everything is A-OK, it’s Western governments. In recent years, central banks in America and Britain (and in Europe) have bought hundreds of billions’ worth of bonds in an effort to keep global interest rates low, financial firms afloat, and middle-class borrowers placated. 

Why Would Anyone Tell You Their Secrets To Financial Success On A Blog?

For the same reason a guy on the radio who says he even wrote a book about how his trading secrets made him $1.9 million in just a few short years wants you to sign up for his advice now.

Good stuff from Noah Smith, here:

If the writers of Zero Hedge really knew some information that could allow them to beat the market, why in God's name would they tell it to you? If they had half a brain, they'd just keep the info to themselves, trade on it, and make a profit! Maybe then, after they had made their profit, they'd release the news to the public (and collect ad revenue), but by then the news would be worthless. Financial news sites, you should realize, are not in the business of giving you insider tips out of the goodness of their hearts.

Still Waiting For That Job . . . Three And A Half Years Later

They're Angry With Obama In Anchorage

Hey, take a number. Osama bin Laden quit trying to kill the president because the line was too long.

Story here.

In The Realm Of Domestic Policy, Obama Has Arrogated To Himself Unprecedented Power

So observes the very clever Kimberley Strassel, for The Wall Street Journal, here, where you will find a veritable litany of President Obama's imperial transgressions, in contrast to Pres. Bush's somewhat more muted sins, which were restricted for the most part to constitutionally prescribed executive functions:

Ah, yes. The "imperial presidency" of George W. Bush was a favorite judgment of the left about our 43rd president's conduct in war, wiretapping and detentions. Yet say this about Mr. Bush: His aggressive reading of executive authority was limited to the area where presidents are at their core power—the commander-in-chief function.

Ah, no. Ms. Strassel provides no accounting of Bush's penchant for an excessive number of signing statements on legislative points with which he disagreed. Well, yeah, at least Bush didn't go around the Congress as Obama has done, but still he laid the groundwork, the ethos, in the Executive Branch to do what Obama has done.

There it hangs, suspended in space, that trimming suggestion of "core power". It's not as if, on any objective reading of the constitution, that the executive should be the subject of ruminations about its core powers vs. its peripheral powers. All the branches have well-defined powers. The problem has been, perhaps now more so than heretofore, that the executive's imperial tendencies have occupied center stage in competition with a judiciary wont to legislate from the bench. Left hopelessly behind and co-opted have been the people, whose representatives are too few and too divided to present a true image of the country in the halls of power.

The US House has become more of a cheering section than a countervailing weight in the government, mostly because one of the unintended consequences of stopping its enlargement according to population growth in the 1920s meant that it inevitably became the creature of other interests, usually executive interests in the age of the worship of the blended strongman. Hence America's almost insane preoccupation with who will be the next president while no one knows the name of their Congressman.

The way forward to remedy some, but by no means all, of America's most acute problems is to let the people have their say for a change. We must enlarge the US House of Representatives and make the other branches compete for power and influence once again, not simply take it while so few people are watching.

Global Central Banks Go Hyper-Monetarist But Re-Recession Goes Unimpeded

So says Jeffrey Snider, here:

Yesterday the ECB relented on interest rates, reducing both its benchmark rate and its deposit rate (to 0.00%), bowing to the reality that Europe's hoped-for economic progress is now firmly in reverse. In addition to the ECB's action, the Bank of England increased its quantitative easing program by £50 billion in an effort to pull the UK out of its own sharp and persistent re-recession. Even the People's Bank of China got into the monetary act by reducing its benchmark bank lending rate (the 7-day repo rate on reserve payments, the RRR) and continuing its reverse repo operations.

These measures follow closely the intentional reductions in collateral acceptance parameters at the ECB and the Bank of England from just a few weeks ago. And just before that, the Federal Reserve pledged to keep its Operation Twist program going, extending the maturity of its US treasury portfolio still further. Most significant, however, may have been the first officially sanctioned instance of negative interest rates. The Danish central bank reduced the certificate of deposit rate to -0.20%, commenting that this was a "good problem" to have. In doing so, the Danes have confirmed that money continues to flow out of the European periphery and into the so-called "core" that apparently includes Denmark.

Central banks continue to employ "monetary stimulus" in unconventional ways, through unprecedented means and taken to unbelievable levels. And the arc of re-recession continues and spreads unimpeded.

Basel Capital Rules Reinforce Fascist Financialization Of The Global Economy

Robert Barone for Minyanville summarizes better than anyone else I have read the process whereby banking in partnership with government has grown out of all proportion to the real economy and throttled it, here:

Under all of the Basel regimes, "sovereign" debt is considered riskless.  Everything else has a varying degree of risk to it which requires a capital reserve.  Loans to the private sector have the highest capital requirements. ... The bias imparted with this sort of capital regime makes loans to the private sector unattractive, especially in times of economic stress where bank capital is under pressure.  But, it is in times of such stress that loans to the private sector are needed to create investment, capital spending, and jobs. ... Simply put, the banking model in the west now promotes moral hazard (banks making bets that are implicitly backed by taxpayers) and Too Big To Fail (TBTF) policies while it stifles private sector lending. ... Isn't it clear that the relationship between the US federal government and the banking system is unhealthy, perhaps even incestuous, to the detriment of the private sector?  That very same banking model is emerging in Europe with the emergency funding by the European Financial Stability Fund (EFSF) to recapitalize the Spanish banks and talk of a pan-European regulatory authority and deposit insurance.

What's missing from this otherwise penetrating analysis, however, is an appreciation of the extent to which banking has been redefined, particularly in the US as a result of the Gramm-Leach-Bliley Act of 1999, which finally overturned the Glass-Steagall Act of 1933.

Now companies as diverse as automobile manufacturers, investment banks, insurance companies and highly diversified multinationals like GE are deemed banking institutions which qualify for government TARP bailouts, FDIC protection, or preferred treatment at the Federal Reserve's discount window. Almost any big business that gets in trouble can now get "help" from the taxpayer by becoming a "banking" concern under the new definition of the rules, to the detriment of those trying to compete in our so-called free market.

Moral hazard doesn't extend now just throughout the traditional banking system, stiffing the disciplined, prudent smaller banks with high FDIC premiums to bailout the failures, it now effectively short-circuits the process by which an innovative small firm might grow one day to challenge GE's gargantuan share of the household appliance market, or in aircraft engines, nuclear reactors and the like.

As financialization of the economy deepens and grows, companies as they are with their relative advantages have those advantages locked into place, while those without market heft are frozen-out. Some people call this crony capitalism, others state capitalism. Almost any euphemism will do, it seems, the latest being venture socialism, which gets us closer to the truth.

In the end it's just good old-fashioned fascism from the 1920s. Obama absolutely loves it. George Bush practiced it. Bill Clinton signed it into law, with the help of Newt Gingrich.

But please don't call this stagnating, ossified, economy failed, free-market capitalism. Just like Christianity before it, you can't say something is a failure which isn't at all being practiced.

June Unemployment 8.2 Percent: Every Month Under Obama Above 8 Percent

The government's unemployment report for June 2012 is here.

I'm sure Obama would just love to take credit for January 2009 when unemployment hit 7.6 percent. All 41 of his months in office are a sea of red on this chart, with no month below 8 percent unemployment.

Unfortunately Obama would then have to take credit for his massive and ineffectual February 2009 stimulus spending which his little Marxists like Rex Nutting at Marketwatch and elsewhere shift onto George Bush's fiscal year ending in summer 2009 to make Obama look like a tight wad when it comes to spending.

If I've still got a quarter left in my pocket on election day he can have it if Obama gets unemployment to 7.6 percent by then.

Honest Liberal: Job Losses Under Obama Continue Worst In Post-War Period

So Calculated Risk, here, an honest liberal:

This [chart] shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

I say that Obama's done doodleysquat!

Compared to George W. Bush's long jobs recession, or any other jobs recession since the Great Depression, Obama's jobs recession will forever live as a monument to what one man who hates capitalism can do to a country by simply doing doodleysquat to fix it, and plenty to hinder it.

Obama Has Done Nothing To Improve Employment In America Since Taking Office

Here's the government's own broad measure of unemployment since January 2009, which includes people working as few hours as one per week. It's a veritable desert.

Employment To Population Ratio 58.6 Through May, Level Last Seen In 1981 And 1977

Data here.

With progress like this, who needs decline?

The Central Banking World Is In A Panic

So says Mish, here:

In a 45-Minute Salvo today, the ECB cuts rates to a record low 0.75 percent and reduced the deposit rate to zero. Meanwhile, the People’s Bank of China cut their benchmark borrowing costs (the second time in a month), and the Bank of England raised the size of its asset-purchase program.

Also note the central banks of Australia, the Czech Republic, Kazakhstan, Vietnam and Israel cut rates in June, while the Swiss National Bank is buying euros to defend its franc ceiling.

ECB president Mario Draghi said these events were not global coordinated easing.

I am willing to take him for his word. Thus, it's safe to assume that what has transpired was more akin to global uncoordinated panic.

The ECB, Bank of China, Bank of England and the Swiss National Bank are obviously four of the eight big, heavy-hitters which include the US Federal Reserve, the Bank of Japan, the Bundesbank, and the Banque de France.

Given what is happening in those other four economies, I'd say they'll be joining the panic soon enough.

Will it be before summer vacation ends, or right after?

How about Monday?!

Politico Still Can't Spell

As seen here:

"We will not go back to the days when insurance companies pray [sic] on the sick," Obama said. "Six million young people are now on their parents health insurance plans."

Does this mean the government has finally stopped the insurance companies from injecting religion into healthcare? Who knew insurance companies did that?

And just how many sick young people were preyed upon by insurance companies anyway?

Obama To Expand American-Style Fascism Into All Corners Of The Economy

The partnership between government and business gets ever closer under Obama, whose socialism still routinely lacks the qualifier "National" in the popular press, as Tim Carney reports here:

Obama plans to use the Export-Import Bank -- a federal agency that gives taxpayer-backed loans and loan guarantees to foreign buyers who buy American goods -- to subsidize U.S. manufacturers even when they are selling to other American companies.

This would be a significant step in the federal government's transformation into a venture capital firm and investment bank involved in all corners of the economy. It's private profit and public risk. Conservative Sen. Jim DeMint calls it "venture socialism." ...

Big Business loves all these forays into venture socialism. The Chamber of Commerce lapped up the Troubled Asset Relief Program, the Detroit bailout, the stimulus, the infrastructure bank and Build America Bonds. The chamber also was the key lobbying force to win over Republicans during Ex-Im's reauthorization earlier this year.

Banks, of course, enjoy the opportunity to reap profits while taxpayers bear the risk.

This broad support from the manufacturing and finance sectors makes government underwriting very popular in Washington. Politicians get to steer the flow of money to the sectors they like while making their lobbyist friends and campaign donors happy.

Slavery Is Now

Slavery Is The Future

America's Own System Of Government Is Once Again Bumping Up Against The Limits Of Its Own Legitimacy

So says Jerry Bowyer for Forbes, here:

If you are a patriotic American, you believe that there are circumstances under which it is right to take up arms against your own government. ...


[T]he rationale for the existence of the nation known as the United States of America, which first appeared in print 236 years ago today, is entirely dependent on the premise that there are indeed times “…when in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another ..."

In short, the Declaration and the principles on which it is based are the foundational ideas of our Republic. One can deny their truth, but one cannot deny their legal authority.

This implies something very important: No governmental official can deny the right of the people to dissolve the political bands which tie them to a tyrannical government without at the same time denying the Declaration and, by extension, the Constitution on which his own power is based. If he says, “The Declaration no longer applies; you must obey my authority no matter what.” We can rightly reply, “If the Declaration no longer applies, then the government of which you are a part no longer possesses legitimacy; which means you have no authority in the first place and therefore have no right to demand that we obey.”

This would be a useful discussion of this issue except that it leaves out a little period known as 1861-1865.

The claims of the unitary state advocated by Lincoln were enforced at that time most bloodily, precisely by appealing to the Declaration of Independence and its language of liberty and equality. Lincoln's reasoning divined a higher obligation in the Declaration and used it to deny the right of states to dissolve the political bands which joined North and South.

We are still living today with the sorry effects of this divided reading of the Declaration by Lincoln, where once sovereign States repeatedly plead their case to a Supreme Court and demonstrate their servility as they wheedle for a nearly forgotten liberty.

That Lincoln's reading was ahistorical is proven by nothing if not by the writing of the Constitution itself, which would not have talked of negroes as 3/5 of a person if Americans at the time, just a few short years distant from 1776, really believed in the primacy of principles for political economy as Lincoln did.

Lincoln's reading of the Declaration was ahistorical because it was an ideological reading from a looming ideological age which did violence to the Declaration's other parts and set it to war against itself instead of against tyrannical monarchy. America had had limited and divided government, separation of powers, and similar artifices precisely designed to short-circuit the natural tendency in man toward the despotism of ideology until Lincoln came along and refounded the country on the unitary principles of equality and liberty.

Until Lincoln, the Declaration had been an expression of a philosophical and Protestant insight that human beings are sold under sin, an evil tyrant, whose political analogue is despotism. Without strenous preparations against it, all hell breaks loose. With Lincoln, self-restraint was thrown to the winds and hell is what we got.

The sad truth about Independence Day 2012 is that most Americans no longer hold these truths to be self-evident. Slavery is the future because it is already present, and no amount of verbal wizardry can replace what faith makes prerequisite.

Abraham Lincoln took up arms against his own government, and won. And he's still winning.

Drudge Story On Midwest Spy Drones Doesn't Even Mention Drones!

In fact, the story says EPA officials actually go up in small planes to conduct surveillance:

EPA officials explained during a meeting with ranchers in West Point, Neb., that they lease small planes that fly EPA staffers over cattle operations. The staffers take photographs as they seek evidence of illegal animal waste running off into rivers and streams.

ParanoiaWillDestroyYa.

Contrary Indicators: Signs Of Our Own Bottoming In Germany

As seen here:

The euro crisis hasn't yet reached the German labor market. Last week, Frank-Jürgen Weise, head of the Federal Employment Agency (BA), announced a new jobless low: With 2.8 million people out of work, the unemployment rate had declined to 6.6 percent, the lowest level in 21 years.

A growth boom builds in America, silently waiting to spring, like a patient but hungry cat, coiled for its prey.

If You Love Liberty, The Dept. Of Homeland Security Thinks You're A Threat

Hey, thanks! The feeling's mutual: The State is our enemy.

Read the latest January 2012 DHS assessment of patriots as homegrown terrorists for yourself, here:

Extreme Right-Wing: groups that believe that one’s personal and/or national “way of life” is under attack and is either already lost or that the threat is imminent (for some the threat is from a specific ethnic, racial, or religious group), and believe in the need to be prepared for an attack either by participating in paramilitary preparations and training or survivalism. Groups may also be fiercely nationalistic (as opposed to universal and international in orientation), anti-global, suspicious of centralized federal authority, reverent of individual liberty, and believe in conspiracy theories that involve grave threat to national sovereignty and/or personal liberty.

Conservative Supremes Insist It's An Unconstitutional Penalty, Not A Tax, But Romney Gets Attacked For Saying The Same Thing

So-called conservatives are upset with Mitt Romney's team for calling the ObamaCare mandate an unconstitutional penalty, not a tax, which is what the dissenting Supremes have called it.

Here's a question for y'all: Do you have the courage of your convictions and the brains to express them, or are you going to retreat into political expediency?

We already have the answer to that. They want Mitt Romney's man Fehrnstrom to go into hibernation in the summertime.

Here's another question: Are the dissenting Supremes conservative, or not? If they are not, then tell us why. Ignoring their arguments isn't going to make them go away. Real conservatives respect what they have to say. Anyone who's telling us to accept the tax argument as framed by Roberts for the liberal wing of the Supremes is doing it for political reasons and is a fake conservative. Prominent among these are Rush Limbaugh and Laura Ingraham.

If Romney's camp keeps this up he might actually get accused of being a conservative by real ones. I'm suddenly feeling less alarmed by Mitt Romney.

Well, that's the spin from the Financial Times anyway, here, whose idea of a conservative is a Jack Welch or a Rupert Murdoch. Ha ha ha ha ha.

Pure agitprop.

You Think This Is Hot. It's Hotter Where We're Goin' . . . In A Hand Basket

The first use recorded in the Oxford English Dictionary of the phrase, to hell in a hand basket, was in The Great North-Western Conspiracy in All Its Startling Details, an account by I. Windslow Ayer of events surrounding the Camp Douglas Conspiracy. Ayer alleges that, at an August meeting of the Order of the Sons of Liberty, the Judge Morris noted above said: "Thousands of our best men were prisoners in Camp Douglas, and if once at liberty would ‘send abolitionists to hell in a hand basket.'"

(source)

Our emancipators are and were always slaves.

Rep. Waxman Botches Unemployment Facts, Claims We're In A Depression

Leave it to Democrat politicians to botch the facts about the economy, as Rep. Waxman here.

Unemployment surged to over 10 percent under Obama, not when he took office as Waxman says. When Obama took office in late January 2009 unemployment was 7.6 percent. It climbed to 10.2 percent for the first time in October 2009, nine months after Obama took office.

As for economic depression, Democrats have been saying all along that Obama's policies prevented a depression from occurring. But they didn't prevent one. Plausibly they ended one!

A depression occurred in fact in 2008 and 2009 when GDP declined two years in a row. For a Democrat to say we're in a depression now is insane, given the fact that GDP stills prints positive and has been doing so since 2010, when the depression ended. The growth is pathetic, but it's still growth.

If Democrats had been smart, they'd have admitted it was a depression right away after the 2008 election and really played that up. It could plausibly have been laid at the feet of President George W. Bush. The Keynesian-like stimulus passed in 2009 under Obama could also have been plausibly credited with ending the depression, since GDP rebounded in 2010.

How come Democrats are so stupid?

Bile: The Autonomic Fake Conservative Detector

"I'll make it simpler for you than Rush [Limbaugh] does . . . : if bile doesn't rise in your throat at the very notion of an Obama presidency, then you are NOT a conservative."

-- Kathy Shaidle, 25 October 2008

The Stupid Statement of the Day, From Traitor Douglas Kmiec, a Republican Who Voted For BO

Here:

“I think [Roberts] knows in his heart that he’s reached a good decision for the well-being of the court and I don’t think he’s earned any long-term enmity of the conservatives,” Kmiec said. “If anything, this will give him more bargaining ability for years to come on both sides.”

Any Republican who is not angry with Roberts henceforth is by definition not a conservative, just as Kmiec is not now, nor has he ever been, a conservative.

ObamaCare Taxes Are In Fact New Income Taxes

The Wall Street Journal here agrees that the ObamaCare ruling has simply and incorrectly shifted government's drive for unlimited power over the people under a different part of the constitution, the taxing power, than the court had heretofore been accustomed to use, namely the commerce clause:

[Roberts'] gambit substitutes one unconstitutional expansion of government power for another and rearranges the constitutional architecture of the U.S. political system. ...

The rest of the column is a very useful and informative discussion of indirect vs. direct taxation, but it does not really make the proper equation demanded by the reasoning of the John Roberts' opinion. Since the tax penalty only arises when one fails to pay for health insurance, there is effectively no difference between the tax penalty which will have to be paid by those going without coverage and the premiums paid by those who have coverage.

Going forward under ObamaCare, if the refusal to buy health insurance results in a tax (which is in reality an unconstitutional police-power-type penalty, or fine), then the purchase of health insurance must be understood as a tax, too (penalty, fine). When the IRS comes calling, those who "gave at the office" are generally going to be treated as having already paid.

I don't think the editorial is correct to say this is somehow a new kind of tax which is really neither an income nor an excise. I think it's pretty clear that ObamaCare is a form of (increased) income taxation.

The tax penalty paid for not having insurance will be based on income. Government subsidy to purchase insurance will be based on income. Affordability of plans offered by employers will be scrutinized based on income paid to employees, and on and on. The IRS' new, main, and very intrusive interest will be in determining household income for purposes of ObamaCare compliance and participation. So it looks to me like it's all about income and comes under the income taxation umbrella, however tortured it may at first appear.

There is a longish discussion of this from the income angle by Liz MacDonald here which makes it pretty clear how everything in ObamaCare hangs on income, including this:


The percentage of income penalty rises at a lower rate than the fixed dollar amount, from 1% in 2014, to 2% in 2015, and to 2.5% in 2016 and after, and then is capped at the national average premium for what’s called “bronze” coverage, which provides the least amount of coverage under the new law, 60% before the patient must chip in for co-insurance, deductibles and co-payments.


Capping the penalty at the national average premium level for basic coverage means you're paying the basic premium. So the premium becomes a tax becomes a premium. It's all designed to fund the system, which is what taxes do. Penalties punish people for breaking the law. But lawbreakers under ObamaCare will be punished with Bronze Level Healthcare, which is why Roberts had to rewrite the law from the bench, construing the penalties as taxes, in order to save ObamaCare.

That was a political act, as The Wall Street Journal rightly goes on to say:


If this understanding is correct, then Chief Justice Roberts behaved like a politician, which is more corrosive to the rule of law and the Court's legitimacy than any abuse it would have taken from a ruling that President Obama disliked. The irony is that the Chief Justice's cheering section is praising his political skills, not his reasoning. Judges are not supposed to invent political compromises.

If anything good comes of this, maybe a new interest will develop out there to repeal the income tax once and for all as a way of getting rid of this new, very expensive and unconstitutional, monstrosity called ObamaCare.

George Bush's Legacy

not just this . . .

. . . but also this

Dissenting Justices' Opinion Lectures Roberts, Giving Up Debating Him

So Jan Crawford for CBS News, here:

The majority decisions were due on June 1, and the dissenters set about writing a response, due on June 15. The sources say they divided up parts of the opinion, with Kennedy and Scalia doing the bulk of the writing.

The two sources say suggestions that parts of the dissent were originally Roberts' actual majority decision for the Court are inaccurate, and that the dissent was a true joint effort.

The fact that the joint dissent doesn't mention Roberts' majority was not a sign of sloppiness, the sources said, but instead was a signal the conservatives no longer wished to engage in debate with him.

The language in the dissent was sweeping, arguing the Court was overreaching in the name of restraint and ignoring key structural protections in the Constitution.

From now on, we can legitimately expect to see Roberts making more alliances with the left than with the right. He is effectively unreachable.

ObamaCare Will Coerce Americans Into Health Insurance Contracts

ObamaCare coerces Americans into health insurance contracts on threat of a financial penalty, which Justice Roberts now speciously calls a tax in order to find some penumbra in the constitution other than the commerce clause to allow it.

Under contract law, coercion nullifies any contract when it nullifies the equality which must exist between the two parties making the contract.

Justice Roberts pretends that there is equality here. There isn't. I either buy a policy on my own, or pay a fine to the government. Either way, I'm out the money and have no choice about it.

In the real world, choice means I get to choose not to purchase and keep my money. In the case of ObamaCare, I have no such choice.

And therefore health insurance will stop being a lawful contract.

Justice Roberts has just vitiated centuries of contract law. You can call that anything you want (tyranny comes to mind), but it certainly isn't conservatism or originalism.

Britain Hasn't Been Wetter Since 1860: Too Cold To Grow Strawberries

The UK Telegraph has the story here, with one commenter adding:

So much for all the hullabaloo about global warming!

10 years ago, we were told that we would be growing our own grapes, lemons and oranges. I cannot even grow bl--dy strawberries, it is so cold and wet and dismal!

Why Won't Obama Use This Super Tanker To Fight Colorado Fires?

Read the story, here, about why this Boeing 747 supertanker just sits on the ground in Arizona while Colorado goes up in smoke.

George Will Only Imagines Congress' Power Has Been Limited, But It Hasn't

Here:

If the mandate had been upheld under the Commerce Clause, the Supreme Court would have decisively construed this clause so permissively as to give Congress an essentially unlimited police power — the power to mandate, proscribe and regulate behavior for whatever Congress deems a public benefit. Instead, the court rejected the Obama administration’s Commerce Clause doctrine. The court remains clearly committed to this previous holding: “Under our written Constitution . . . the limitation of congressional authority is not solely a matter of legislative grace.”

The fact remains, however, that with the stroke of a pen the Court has changed the locus of unlimited power-seeking from the venue of commerce to the venue of taxation. Congress' power "to mandate, proscribe and regulate behavior" hasn't been diminished one bit, just shifted.

I can now be penalized (!) with a tax (!) for not buying whatever Congress' decides. This used to be a power reserved to the States, which can force you, say, to purchase a gun. Now the Court has given that power over you to the Congress, by-passing the States.

The issue was well-framed for us already, in the dead of winter, during the Republican primary debate about RomneyCare, here:

One difference between the health care bills is that Romneycare is constitutional and Obamacare is not. True, Obamacare's unconstitutional provisions are the least of its horrors, but the Constitution still matters to some Americans. ... As Rick Santorum has pointed out, states can enact all sorts of laws -- including laws banning contraception -- without violating the Constitution. That document places strict limits on what Congress can do, not what the states can do. Romney, incidentally, has always said his plan would be a bad idea nationally. The only reason the "individual mandate" has become a malediction is because the legal argument against Obamacare is that Congress has no constitutional authority to force citizens to buy a particular product. ... States have been forcing people to do things from the beginning of the republic: drilling for the militia, taking blood tests before marriage, paying for public schools, registering property titles and waiting in line for six hours at the Department of Motor Vehicles in order to drive. There's no obvious constitutional difference between a state forcing militia-age males to equip themselves with guns and a state forcing adults in today's world to equip themselves with health insurance.


But now the Congress has this power, under the taxing authority, at least until some enterprising citizens challenge healthcare premiums they actually pay as a form of unapportioned direct taxation, and win.

Until then, we have no place left to hide. The whole country has become Massachusetts.

"Congress Can Now Tax People For Not Buying Broccoli"

So Randy Barnett for The Washington Post, here:

"Congress can now essentially tax people for not buying broccoli."


The trouble is, that is a penalty, not a tax.