Saturday, August 18, 2012

Peter Schiff Warns About Rising Interest Rates But Avoids The Sorry Truth

Peter Schiff, here:

The current national debt is about $16 trillion (this is just the funded portion...the unfunded liabilities of the Treasury are much, much larger). The only reason the United States is able to service this staggering level of debt is that the currently low interest rate on government debt (now below 2 per cent) keeps debt service payments to a relatively manageable $300 billion per year.


First of all, interest payments on the debt haven't been close to $300 billion a year since 1994. They've been above that level ever since 1994, and frequently way above that level.


In fact, interest payments on the debt have been above $400 billion each year from 2006 inclusive, except for 2009. This is important in the context of a Republican House which congratulates itself endlessly for a one-time spending cut of $38 billion.

Secondly, if we were really paying an effective 2 percent interest rate to service the debt, say in 2011, our interest payment that year would have been closer to $296 billion.

But the total US public debt at the end of the 2011 fiscal year reached almost $14.8 trillion, and interest payments on that debt were actually $454 billion, implying an interest rate in excess of 3 percent, half again as high.

That's the real lesson of rising interest rates. A 50 percent rise in interest rates from 2 percent to 3 on a pile of debt that size means an increased interest expense of $158 billion. People who think rates can't rise that much very quickly haven't been paying attention to the recent experiences of Greece, Spain and Italy. For example in Spain interest rates paid on 10yr paper lept 50 percent in six months' time this year.











In Italy they lept over 35 percent in five months' time.










Third, while Peter Schiff is surely right when he warns that rising interest rates threaten to consume government revenues, leaving nothing for essential services, the sorry truth is that our interest payments on the public debt are really more like the interest-only payments on loans people took out during the housing bubble. Those loans were DESIGNED never to require principal payments, and so the buyers of those homes never built any real equity and never were on a path to retiring those debts. That's our federal government. We NEVER make principal payments on the money we borrow, and we effectively borrow the money we need to make the interest payments, and then some.

Instead of paying $454 billion a year in interest-only payments on the national debt, we should be on a path to retiring that debt. At 3.5 percent interest for 30 years, that would mean interest AND principal payments together totaling $864 billion a year, not $454 billion. And it would also mean: NO MORE BORROWING.

Can you imagine such an America? Of $2.8 trillion in current revenues, that would leave just $1.9 trillion for the feds to spend, 50 percent less than the $3.8 trillion and climbing which they spend now.

If there were any real conservatives in America, let alone in the Republican Party, that's what they'd be telling the American people. Anyone who tells you otherwise is just a pretender.

Another Voice Saying Rep. Paul Ryan Isn't Serious About Cutting Spending

Peter Schiff:

So what was the Ryan Budget's radical departure from the status quo that has caused such uproar? If enacted today, the Ryan budget would so drastically upend the fiscal picture that the U.S. federal budget would come into balance in just... wait for it.... 27 years! This is because the Ryan budget doesn't actually cut anything. At no point in Ryan's decades long budget timeline does he ever suggest that the government spend less than it had the year before. He doesn't touch a penny in current Social Security or Medicare outlays, nor in the bloated defense budget. His apocalypse inducing departure comes from trying to limit the rate of increase in federal spending to "just" 3.1% annually. This is below the 4.3% rate of increase that is currently baked into the budget, and farther below what we would likely see if Obama's priorities were adopted.

Read the whole thing here.

Who Needs A Bullet-Proof Vest When You've Got This?


"VP Joe Biden Is A Stock Looking For A Bottom"

As just stated by Larry Kudlow on WABC Radio.

Central Bank/Institutional Gold Demand Is Running at 630 Tonnes Annualized

The pace of gold acquisition by central bankers and institutions looks to have picked up over 50 percent in Q2 2012 over the 400 tonne-pace set between March 2011 and March 2012, according to this story:


Demand for gold from central banks and official sector institutions more than doubled in the second quarter of this year to 157.5 metric tons from the same quarter a year ago, according to a World Gold Council (WGC) report released Thursday.

That marked a record quarter for central bank buying since the sector began recording net purchases in the second quarter of 2009, according to the WGC report. Central banks in Kazakhstan, Russia, Ukraine and South Korea were among the big buyers.

If You Can't Spell 'Commodities' Don't Listen To Jim Rogers

So says Jim Rogers himself, here:


"But people – if they can’t spell commodities, they shouldn’t be listening to me. They should be doing what they know about."

How To Tell Who Is Winning

If the debate we're having is about taxes, the liberals are winning. If it's about spending, the conservatives are. Just never forget that winning isn't the same thing as success.

Friday, August 17, 2012

Oil Is Still "On Sale"

Oil is still "on sale", but the discount relative to gold has declined a little bit.

The gold to oil ratio stands at 16.8, which represents a mark-down of roughly only 12 percent for oil. Gold has firmed up in the neighborhood of 1615 of late, presumably on central bank acquisitions replacing coin demand. And saber rattling and unrest in the Middle East continue to put pressure on oil prices, moving the ratio closer to the theoretical norm of 15.

We've had gold to oil ratios much higher than 15 in recent months, including hits of 19.5 and the like.  But I don't like oil and gold at any of these prices. I'm not acquiring these and I'm holding what I've got because I bought them low.

Assets remain inflated overall.

I Built This Blog, And Obama Can Kiss My Sweet German-American Ass


















And I approve this message, too.

Praetorian Guard Openly Turns On Obama

The owner of a Virginia business said 'No' to a visit by VP Joe Biden because of Obama's 'You didn't build that' remark, so the Secret Service detail for Biden went in and bought a bunch of stuff to thank him, according to this local story:


Here's the back story, we’re told that shortly after Crumb and Get It told Biden’s advance people 'no' -- the secret service walked in and told Chris McMurray ''Thanks for standing up and saying 'no' -- then they bought a whole bunch of cookies and cupcakes.

McMurray said he's hoping folks will understand he just didn't want to be part of a photo op for an administration whose policies he doesn’t agree with.



GIVE US YOUR COLLEGE TRANSCRIPTS!


Wednesday, August 15, 2012

The New York Times Uncorks The Wildest Slur Yet Against The Tea Party

Suddenly the Tea Party is the most selfish, arrogant and yet servile lot on the planet, according to one Jennifer Burns, an assistant professor at Stanford, for The New York Times, here:

". . . the Tea Party, whose members believe they are the only ones who deserve government aid."


Wow. Haven't heard that one yet. Is that what it takes to get tenure at Stanford these days? The intimate connection she divines between the Randians and the Tea Party is, quite simply, the sort of fantasy one might expect of someone trying to find something new to say. Not that the Shruggers wouldn't like to co-opt the Tea Party. They would, and they are trying, as is the Republican Party's Dick Armey, which is enough to give anyone who has watched them from the beginning the staggers. The spontaneous revulsion of common, everyday folk in America to the designs of their elected leaders provoked the reaction which is the Tea Party, most of which is as non-ideological as a hamburger. 


I dunno, maybe she's confusing the Tea Party with Occupy Wall Street, some of whose members are infamous for demanding student loan forgiveness, and the right to poop on your stoop.

Just two years ago in Slate Mark Gimein could reasonably characterize the Tea Party as "the responsibles" who rose up against "the deadbeats", homeowners who had stopped paying on their mortgages and wanted bailouts from the Obama regime even as millions of underwater homeowners continued to pay on theirs.

I guess Jennifer is fairly new to the planet.

Tuesday, August 14, 2012

Russian Attack Sub Punks Obama's Navy In Gulf Of Mexico For A MONTH

Spending hundreds of billions of dollars abroad on nation building and protecting US interests in Europe, East Asia and the Persian Gulf, Obama's US Navy continues to go to hell in a handbasket, and along with it the very security of the US mainland.

A Russian attack sub operated undetected in the Gulf of Mexico for weeks in June and July, armed with nuclear-warhead-equipped cruise missiles in easy range of Kings Bay, Georgia:




















The U.S. Navy operates a strategic nuclear submarine base at Kings Bay, Georgia. The base is homeport to eight missile-firing submarines, six of them equipped with nuclear-tipped missiles, and two armed with conventional warhead missiles. ...


The Navy is facing sharp cuts in forces needed to detect and counter such submarine activity.

The Obama administration’s defense budget proposal in February cut $1.3 billion from Navy shipbuilding projects, which will result in scrapping plans to build 16 new warships through 2017.

The budget also called for cutting plans to buy 10 advanced P-8 anti-submarine warfare jets needed for submarine detection.

Bill Gertz has the story here, detailing the growing threat being orchestrated by our Russian enemy Vladimir Putin in our own backyard in the Gulf of Mexico, and in the arctic. 



Romney May Well Tax Interest Earned On Life Insurance And Municipal Bonds

So says The Wall Street Journal, here, which approves as a way of helping pay for Romney's proposed across the board 20 percent tax cuts.

Without saying, of course, that this will shift costs from the rich who buy most of these bonds onto the broad base of taxpayers, in the form of higher taxes raised through property taxation. Property taxes will necessarily have to be increased because municipalities will have to pay more to borrow for spending on infrastructure, schools and the like without a ready pool of incentivized investors, i.e. the wealthy.

Municipal bonds are tax exempt for a reason: it makes borrowing cheaper and therefore taxes lower on the people who directly benefit from the spending. So what if the wealthy also benefit thereby? They should, and they do. For every bit of tax-free income the wealthy enjoy, someone somewhere has decent roads, schools and fire protection. It's not like the voters don't get to say No to such local spending. Property tax referenda are the meat and potatoes of local politics. 

This kind of cost-shifting was pretty much Romney's m/o in Massachusetts, where he made it almost an art form, increasing fees on businesses under the rubric of equalization, and on property tax payers of all kinds. Americans can probably expect the same from a President Romney, except on a much larger scale. It won't be spreading the wealth around to make people equal, it'll be spreading the taxation around, eliminating "loopholes".

Taxing interest gains from life insurance plans is a case in point. It will hurt any beneficiary of such plans, not just the rich. Think of a wife left with young children to raise, who will have just a little less left from her dead husband because she had to pay her fair share. And imagine having to pay tax on that life insurance when the buyer was counting on it to pay the taxes due on his estate so that his heirs wouldn't have to sell assets to do so. Talk about throwing a monkey wrench into the estate plans of countless millions.

Push here, and it comes out there.

Are Americans really going to vote for someone who is already getting bogged down in the weeds of tax loss expenditures? All Obama has to do in response to this is say Republicans are going to take away your tax deductions. This is not the way to sell the Republican brand.

As tax loss expenditures go, the two together add up to $90 billion annually in lost government revenue and benefit mostly the wealthy, according to an AEI source quoted in the editorial. Nevermind the $3.8 trillion we're already spending in this fiscal year is itself "lost government revenue".

Republicans ought to be saying every dollar spent by government is lost.

Don't hold your breath. 

David Stockman Misses An Opportunity: The Warfare State IS The Welfare State

The New York Times is only happy enough to run an op-ed from David Stockman, here, attacking the phony conservatism of the Republican Party since Ronald Reagan, in which he rather relishes pointing out, among other things, that when push came to shove Rep. Paul Ryan "folded like a lawn chair" and voted for TARP:


Thirty years of Republican apostasy — a once grand party’s embrace of the welfare state, the warfare state and the Wall Street-coddling bailout state — have crippled the engines of capitalism and buried us in debt. Mr. Ryan’s sonorous campaign rhetoric about shrinking Big Government and giving tax cuts to “job creators” (read: the top 2 percent) will do nothing to reverse the nation’s economic decline and arrest its fiscal collapse.

Mr. Ryan professes to be a defense hawk, though the true conservatives of modern times — Calvin Coolidge, Herbert C. Hoover, Robert A. Taft, Dwight D. Eisenhower, even Gerald R. Ford — would have had no use for the neoconconservative imperialism that the G.O.P. cobbled from policy salons run by Irving Kristol’s ex-Trotskyites three decades ago. These doctrines now saddle our bankrupt nation with a roughly $775 billion “defense” budget in a world where we have no advanced industrial state enemies and have been fired (appropriately) as the global policeman.

Mr. Stockman never once calls this Republicanism what it is. I suppose if he had the Times wouldn't have printed it. And I don't know how he really could since his family is allied with liberal social positions anyway. Paul Ryan isn't the only phony conservative liberal around.

But the truth is (someone's got to say it) the warfare state since Reagan is another consequence of liberalism, expressed as a failure of nerve with respect to conscription. Good wars are wars for which Americans more or less readily submit to the draft, fight successfully and end relatively quickly. They have the consent of the governed and are representative wars, conducted as they are by a cross-section of the population. Bad wars don't have the consent of the governed. And so these must emphasize among other things protecting warriors and civilians, not destroying the enemy's ability to make war, and are all too often fought to draws after protracted efforts. These cannot be conducted except with compliant volunteers, who come from more or less distinct sectors of American society: the South, and poor minorities. And these volunteers require enducements in addition to a commitment from government to their safety, such as citizenship, a college education, or a pension. As in the private sector, the military's single biggest cost is personnel, which explains perhaps more than anything the drive to mechanized war in a new form, the vanguard of which is drone technology. Can The Terminator be far behind?

The war in Afghanistan would be long over if we had destroyed its infrastructure, annihilated its people, and salted its poppy fields. But we couldn't do that. That would have been a war crime. And besides, where we would get our drugs then?

Liberalism, you see.


"Yet Reason frowns on war's unequal game,
Where wasted nations raise a single name,
And mortgaged states their grandsires' wreaths regret,
From age to age in everlasting debt;
Wreaths which at last the dear-bought right convey
To rust on medals, or on stones decay."

-- Samuel Johnson


Monday, August 13, 2012

Monetarist Ambrose Evans-Pritchard Eats Keynes For Dinner, Austrians For Dessert

Frustratingly inconclusive and full of explanatory power at the same time, here:


Monetarists blame the ECB and the Fed for keeping money too tight in early to mid 2008, pushing a fragile credit system over the edge. They blame “pro-cyclical” regulators for aborting recovery ever since by forcing banks to raise asset ratios too fast. They are right on both counts.

Yet the `Austrian School’ is surely right as well to argue that a rise in debt ratios across the rich world from 167pc of GDP to 314pc in just thirty years was bound to end badly. There comes a point when extra debt draws down prosperity from the future. The future arrived in 2008.

How Would You Like A Monthly Mortgage Payment Of $72 Billion?

That's what it would take to pay off the total public debt of $16 trillion, financed at 3.5 percent, in 30 years: $25.920 trillion in total payments ($16 trillion principal/$9.92 trillion interest).

Got any collateral?

Notice The Subtle Anti-Reaganism Of Sen. Tom Coburn (R-OK)

TARP Republican
Sen. Tom Coburn comes to bury Caesar, not to praise him, here:

"The last time Congress reformed the tax code was 26 years ago, which preceded the longest peacetime economic expansion in our history."

What's wrong with that? you say.

Well, that statement dates the longest peacetime economic expansion in our history from after 1986, ignoring that it actually began much earlier as a result of Reagan's stimulative tax cuts in the early 1980s. Now why would a Republican ignore that? Maybe because he's a Bush Republican who hates voodoo economics, the ungrateful louts who never defended the Gipper against the left's attacks then and still won't.

What's worse is that Sen. Coburn goes on to pretend that Reagan viewed tax credits with scorn like Martin Feldstein does:


Reagan’s key economic advisers such as Martin Feldstein persuasively argue that tax extenders are spending by another name. If tax carve-outs for green industry, rum makers, Eskimo whaling captains, and more, were on the other side of the ledger – such as in President Obama’s stimulus bill – they would be derided as spending, and rightly so.

Actually, Reagan defended spending through the tax code, for example, through the Earned Income Credit which he expanded considerably in the very 1986 tax reform Coburn praises, to get people off of welfare and into work.

Martin Feldstein may have been Reagan's economic advisor, but he was a deficit hawk who often collided with Reagan over spending, and left the service of the president after only two years, in 1984.

To rewrite the history of Ronald Reagan as Coburn does is completely dishonest.



Sunday, August 12, 2012

Obama's Enthusiasm For Bailouts Becomes National Socialism in Colorado Remarks

Obama views the GM auto bailout as an example of a successful government investment in the private sector, never mentioning, of course, that the success is at the expense of the former private investors in GM, its non-union elements, and of the tax-paying public. Without those, GM is still a failure, and should be again.

That Obama now says in Colorado that he wants to similarly rescue more companies, however, indicates that the bailout model was more to him than a one-off which he fortuitously inherited from the Republican establishment, an intellectually lazy cohort of Baby Boomers which long ago had betrayed free market principles. Obama's commitment to a model of government superintendence of private industry marks a new public face for an old familiar mixture of State and industry, the inspiration for which Herbert Hoover noted in his memoirs FDR had derived from Mussolini and the other strong men of Europe.

We all know what is the result of this type of thinking because we've already experienced it, not just in FDR's long failure, and not just in the recent auto company bailouts, but also in the rescue of the financial industry:

  • more moral hazard which has allowed so-called private banking players like the five or ten biggest banks to take even more unwarranted risks and grow ever larger and more too big to fail than ever, knowing the public purse is backing them up;
  • taxpayer-funded bailouts whose pain is never really felt by the taxpayers because, like most public spending, the bailouts are simply financed by more borrowing, which in their turn have only worsened the fiscal health of the nation and contributed to the loss of its once vaunted AAA rating;
  • corruption of elected public officials and bureaucrats whose crimes destroy the public's consent to be governed, as witnessed by the rise of protest movements like the Tea Party and Occupy Wall Street, and by the capital strike by individual investors;
  • picking winners like multinational GE and Wall Street firms who reaped huge rewards in the form of tax breaks and bonuses because of their close relationship with government, and therefore by definition also picking losers on Main Street like small banks and entrepreneurs who can't beat the system because it is rigged against them, crushing confidence in "capitalism";
  • a complete repudiation of free market principles in which failure and bankruptcy become as unacceptable as saying "No" to the kids or as marking an "F" on a report card, unless for unrelated political reasons your industry happens to become a target for elimination, you know, like Chick-Fil-A, or the Roman Catholic Church in America.

Perhaps the most interesting thing about Obama's remarks in Colorado is the way he is now touting his commitment to this model in explicitly nationalistic terms, emphasizing his as a patriotic concern for the American people to bring their jobs home, and Romney's as an unpatriotic intent to export those jobs.

Obama's socialism has been deemed a distraction by establishment Republicans, who find all the purported links between Obama and the communist left made by conservatives just a little too disturbing for polite conversation. It reminds them too much of the McCarthy era. But now explicitly linked to nationalism, Obama's remarks become an opportunity to refocus the conversation on the coincidence of these elements in fascism, which the left has hitherto succeeded in attacking and marginalizing as a phenomenon of the right, of conservatism.

Locating Obama in fascism actually makes better sense of his presidency to date. It explains the disillusionment of the left with him as a sell-out who has had the temerity to spend so much of his time enjoying himself instead of pushing their agenda, crafting policy to maximize campaign contributions from favored industries, and throwing his weight around as Commander In Chief. After one year progressives were already ridiculing his administration as a squandered presidency. And fascism also coheres with the interpretation of his experience in Chicago where he allied himself with financial, insurance and real estate interests and the Democrat Party to take over the property of the South Loop,  enrich themselves, and further their political careers. The president's friendship with Jeffrey Immelt is not a bug. It's a feature. 

The historical reality is that the fight between the communists and the fascists was always a fight on the common ground of socialism, rather like the fight between Democrats and Republicans has been a fight on the common ground of liberalism. The radicalization which occurred in the arguments between socialists culminating in the Second World War occurred because the conservatism of a prior monarchical age had completely lost its tempering force in society. The civilization of Europe was completely overcome from within by a capitulation to eschaton-immanentizing ideologies before it destroyed itself from without in war. In that process, liberalism was the vanguard softening up the enemy for the totalitarianism to come. Conservatism was beside the point then, but not here, not now.

In the arguments between Democrats and Republicans in our time, matters have not yet degenerated into such violence because the unique contributions of conservatism from the American Founding still inform much of the body politic. And the most important of those contributions, derived from human and religious experience both, has been the self-limiting conviction that human nature is not perfectible and always remains a mixture of good and evil which no rearrangement of human affairs can alter.  In the person of Barack Obama, however, we have met with someone who explicitly asserts otherwise, as an ideologue, that the union is perfectible. He deliberately goes out of his way to attack those individuals and institutions who know, believe and say otherwise. And armed with the imperial accoutrements gathered by his predecessors in the presidency, one might say that the people actually face for the first time a real and foreign threat in charge of the executive, a foreigner in his heart, mind, and affections who keeps his past sealed precisely because the revelation that he once presented himself as a foreigner for his own advantage even though he was born in Hawaii would offend more than actually being a foreigner.

Liberalism is defenseless against this because it drinks from the same cup of idealism. This is why it keeps quiet and doesn't look too deeply into President Obama. It is afraid it might see its own reflection. And this is also why a liberal like Mitt Romney can't bring himself to entertain Obama's socialism, let alone his national socialism. If it worked, he'd actually agree with it.

ABC News has the most recent formulations of Obama's national socialist vision here:

"When the American auto industry was on the brink of collapse, more than 1 million jobs at stake, Gov. Romney said, let’s ‘let Detroit go bankrupt.’ I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again. So now, I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry. I don’t want those jobs taking root in places like China. I want them taking root in places like Pueblo.  Gov. Romney brags about his private sector experience, but it was mostly investing in companies, some of which were called “pioneers” of outsourcing.  I don’t want to be a pioneer of outsourcing.  I want to in-source.  I want to stop giving tax breaks to companies that are shipping jobs overseas.” ...

"When the American auto industry was on the brink of collapse, 1 million jobs at stake, Mr. Romney said, ‘Let Detroit go bankrupt.’  I said, let’s bet on America’s workers.  And we got management and workers to come together, making better cars than ever. And now, GM is number one again and the American auto industry has come roaring back.   So now, I want to say what we did with the auto industry, we can do it in manufacturing across America.  Let’s make sure advanced, high-tech manufacturing jobs take root here, not in China.  Let’s have them here in Colorado.  And that means supporting investment here.”


Projected Unemployment Rate For August 12, 2014 Is 8.9 Percent

As calculated here:

Saturday, August 11, 2012

Conservatives Outnumber Liberals 2 To 1: If Only They Knew What That Meant

and sigmas aren't what they used to be at Cambridge

So Gallup, in January, here:

PRINCETON, NJ -- Political ideology in the U.S. held steady in 2011, with 40% of Americans continuing to describe their views as conservative, 35% as moderate, and 21% as liberal. This marks the third straight year that conservatives have outnumbered moderates, after more than a decade in which moderates mainly tied or outnumbered conservatives.

In America you can be whatever you want to be, even if you're not what you say you are.

You know, like the Baptist preacher down the street who fancies himself a Greek scholar but misspells the English on his road sign.

Ryan Is No Conservative: He Voted For The Biggest Entitlement Program Since The 1960s

Rep. Paul Ryan, Republican from Wisconsin, Gov. Romney's VP nominee, is a huge friend of the welfare state and is no conservative.

Not only did he vote to bail out the banks and everyone else in 2008, in 2003 he voted for the largest expansion of government entitlement since the 1960s when he said "Yes" to Drugs For Seniors.

If he has any principles, they don't animate his votes when it's time to roll back liberalism. Instead, he rolls with liberalism when push comes to shove. Which is why Romney picked him. A man after his own heart he is.

Conservatives don't say "Yes" to Mitt Romney. Conservatives say what they said in South Carolina:

WE DESPISE MITT ROMNEY TO THE VERY CORE OF OUR BEING.

Scott Rasmussen Says Most Americans Think Both Parties Are Fascists

They just don't say it that way. Instead they call the two parties crony capitalists.

Here is Rasmussen for the Boston Herald:


[S]even out of 10 Americans believe government and big business work together against the rest of us.

In other words, Americans believe crony capitalism is a reality regardless of which party is in the White House. This is the root cause of much of the frustration sweeping the nation today. ...

[T]hey want the government to stop picking winners and losers in the business world.


Looking The Part

Don't Vote For The Fascists. It Only Encourages Them.

Three Tax Collectors For The Welfare State (And One Nincompoop)

US Public Debt Under Obama Has Soared Exactly 50 Percent In 43 Months





Friday, August 10, 2012

Romney Doesn't Oppose Obama's Financier Fascism, He's Part Of It

"[D]espite taking office in the midst of a massive financial meltdown, Obama’s administration has not prosecuted a single heavy-hitter among those responsible for the financial crisis. To the contrary, he’s staffed his team with big bankers and their allies. Under the Bush-Obama bailouts the big financial institutions have feasted like pigs at the trough, with the six largest banks borrowing almost a half trillion dollars from uncle Ben Bernanke’s printing press. In 2013 the top four banks controlled more than 40 percent of the credit markets in the top 10 states—up by 10 percentage points from 2009 and roughly twice their share in 2000. Meantime, small banks, usually the ones serving Main Street businesses, have taken the hit along with the rest of us with more than 300 folding since the passage of Dodd-Frank, the industry-approved bill to “reform” the industry. ...


"In a sane world, one would expect Republicans to run against this consolidation of power, that has taxpayers propping up banks that invest vast amounts in backing the campaigns of the lawmakers who levy those taxes. The party would appeal to grassroots capitalists, investors, small banks and their customers who feel excluded from the Washington-sanctioned insiders' game. The popular appeal is there. The Tea Party, of course, began as a response against TARP. ...


"Romney himself is so clueless as to be touting his strong fund-raising with big finance. His top contributors list reads something like a rogue’s gallery from the 2008 crash: Goldman Sachs, JPMorgan Chase, Morgan Stanley, Credit Suisse, Citicorp, and Barclays."

Read the whole thing from Joel Kotkin, here.

Obama's Gangster Auto Tsar Admires China, The Largest Expression of Crony Capitalism In History

As pointed out by Joel Kotkin for The Daily Beast, here, who refrains from using the still radioactive term "fascist" in lieu of which the euphemism "crony capitalism" will still have to do:

Obama’s financial tsar on the GM bailout, Steven Rattner, took to The New York Times to stress that Obamians see nothing systemically wrong with the banking system we have now, blaming the 2008 market meltdown on “old-fashioned poor management.” ... 

Rattner ... paid $6.2 million and accepted a two-year ban on associating with any investment adviser or broker-dealer to settle with the SEC over the agency’s claims that he had played a role in a pay-to-play scheme involving a $50,000 contribution to the now-jailed politician who controlled New York State’s $125 billion pension fund. He’s also expressed unlimited admiration for the Chinese economic system, the largest expression of crony capitalism in history. Expect Rattner to be on hand in September, when Democrats gather in Charlotte, the nation’s second-largest banking city, inside the Bank of America Stadium to formally nominate Obama for a second term.

Relative to Gold, Oil is Still ON SALE

The gold to oil ratio stands at 17.44, meaning oil is "on sale" relative to the price of gold.

Low Tech Auto Security System

The Upper Limits Of Middle And Upper-Middle Individual Incomes 1990-2010

SocialSecurity.gov here provides comprehensive net compensation statistics going back to 1990, from which one can chart the nominal growth of individual incomes over the period.

Below I have charted both the nominal and CPI-adjusted growth in the upper income limits for middle incomes (60th percentile) and for upper middle incomes (80th percentile) between 1990 and 2010, choosing years where the income tranches ($5000 each) hit within less than 1 point of 60, or 80, percent of total earners. For the 80th percentile chart this meant stopping with the year 2007 because years after 2007 do not yet provide a clear demarcation of the 80th percentile for an income tranche within 1 point of 80 percent. For proper comparison purposes real growth in green for both is expressed in 2010 dollars.

What the charts show is that the income ceiling defining the upper limit of the middle rose over nineteen years in real terms 9.4 percent, and the ceiling for the upper middle rose over seventeen years in real terms 15.6 percent, a difference in the real rate of change of nearly 66 percent.

This is cause for much hand-wringing in some circles, where, it seems, it is rarely considered how the costs associated with acquiring the skills and credentials necessary to earn upper middle incomes have skyrocketed. Those costs have increased nearly 72 percent over the period, in real terms, consuming 70 percent of the upper-middle upper-limit salary of $50,000 in 1990 for the typical 4-year public university degree, and 104 percent of the comparable salary in 2007.

Map of the World's Major Fascist Regimes (In Yellow)!

Thursday, August 9, 2012

Rosie Agrees: The Market Cheers Bad News, Because That Means More Stimulus Is Coming

Here's Rosie:


It's gotten to the point, he said, where the market actually cheers bad news . . ..

"We're back to the situation where for the stock market bad news is good news, because the good news is that we're going to get more gobs of stimulus to push asset prices higher at least over the near term," he said. "That's a driving factor behind this recovery that we've seen in the stock markets globally in the past month or so."



Top Ten Tax Loss Expenditures 2011 From The Joint Committee On Taxation

10. Exclusion of benefits under cafeteria plans ................................................................$31 billion
10. Exclusion of untaxed Social Security and Railroad Retirement benefits ....................$31 billion
  9. Exclusion of capital gains at death .............................................................................$38 billion
  8. Deduction of state and local government income taxes, sales and property taxes ......$42.4 billion
  7. Pension plan contributions .........................................................................................$42.7 billion
  6. 401 K plan contributions ............................................................................................$48.4 billion
  5. Tax credit for children under 17 .................................................................................$56.4 billion
  4. Earned income tax credit ............................................................................................$59.5 billion
  3. Mortgage interest deduction ........................................................................................$77.6 billion
  2. Reduced rates of tax on dividends and long term capital gains ...................................$90.5 billion
  1. Exclusion of employer contributions for health care, health/long term care insurance.$109.3 billion

Welfare Practised Through The Tax Code Is Liberalism, Not Conservatism

This is why those who call Ronald Reagan a conservative are wrong, because the intent of his tax policies has been all along to practise welfare through the tax code and thereby create a whole class of people at the bottom half in the country who are dependent on the federal government on April 15th, have no stake in policy and thus in politics because they do not pay for it, and are as a result ungrateful, unmotivated to climb higher, and are increasingly a nation apart from the Americans who do pay for it:

"Reagan and succeeding Republicans abolished federal income taxes on the working poor and on what the Left calls the working class, and they almost abolished them on the middle class.

"It began with the Earned Income Tax Credit (EITC), which grew out of then-Governor Ronald Reagan's famous testimony before the Senate Finance Committee in 1972. Reagan proposed exempting the working poor from all Social Security and income taxes as an alternative to welfare, with the credit serving as a way to offset payroll taxes for low-income workers. ...

"[B]y 2007, after 25 years of Reaganomics and before President Obama was even elected, the bottom 40 percent of earners, on net and as a group, paid less than 0 percent of federal income taxes, according to official IRS data, as reported recently by the Congressional Budget Office. Instead of paying at least some income taxes to help support the federal government, the federal government paid them cash through the income tax code. That same year, the middle 20 percent, the true middle class, paid less than 5 percent of all federal income taxes."

So Peter Ferrara now, here, defending Romney's tax plan as more of the same.

These policies, now accepted by both Democrats and Republicans alike, have turned Social Security into pure welfare because a large majority of the people eventually receiving it will have effectively received refunds of everything they've put into it long before they start drawing it. Temporary reductions of contributions to Social Security during the recent financial crisis, advocated by Democrats in complete control of the government, have only underscored the point.

If nothing else it is another flip for Romney, who famously characterized himself as an independent and not in the mold of Reagan-Bush during his race for Kennedy's seat in Massachusetts in 1994.

"Look, I was an independent during the time of Reagan-Bush. I’m not trying to return to Reagan-Bush."

Who knows, maybe the flipper will flop after he's elected. Stranger things have happened. After all, many of us on the right feared Obama in 2008 because we thought he was a commie. Little did we know he was a fascist.

Wednesday, August 8, 2012

Stephen Prothero Of Boston University Is Biased Against Whites And Christians

The overwhelming majority of bias crimes in the US are racially motivated, and only 20 percent are specifically religious. And of those, fully 65 percent are anti-Semitic in motivation. Just over 13 percent are anti-Islamic, and just under 8 percent specifically anti-Christian.

So says Kate Shellnutt here for The Houston Chronicle.

When it comes to crimes of religious bigotry in America, most of us have to take a number behind the Jews.

CNN blogger Stephen Prothero of Boston University, unfortunately, unhelpfully conflates the racial and religious motivations for bias crimes, and just decides out of thin air and without evidence that Christians and whites are to blame for all of it, here:

When murderers target and kill religious minorities simply because they are nonwhite or non-Christian, something of each of these traditions dies. So we need to redouble our efforts to keep both vibrant.

... [H]ateful invective is a weapon too, and it can be heard not only among white supremacist extremists but also on our mainstream radio and television talk shows.

Last time I checked, Jews are classified as whites. Do they endure the overwhelming number of cases of violence "because they are nonwhite"? Do Muslims attack Jews because Jews are non-Christian? And why do so many acts of violence against Christians come from disaffected Christians? And prejudice from denizens of the American academy?

Stephen Prothero hasn't committed an act of violence, but his bias against Christians and whites is a crime nonetheless, against intelligence.

What Does Elizabeth Talking Bull Warren Have To Hide In Her Taxes?

Plenty, apparently.

Story here.

You Have Been Warned

"[T]oday’s low interest-rate dynamic is not an entirely stable one. It could unwind remarkably quickly."

-- Kenneth Rogoff, here

North American Death Squad

The Burning Question On The Day After The Michigan Primary Election

Were any of the corporations which voted yesterday in the Michigan primary election actually registered to vote in Michigan?

Single Investor Buys 650 Macomb County Michigan Tax Foreclosures For $4.8 Million

It was a package deal in which every tax delinquent property was sold to the investor, not just the nice ones.

Story with links here.

The buyer wasn't a Wall Street vulture, but now that he's got them he can certainly resell them.

I wonder if there's a fracking angle?

Privatizing The US Postal Service Is A Bad Idea On Mail Fraud And Privacy Grounds

Michael Hiltzik for The LA Times does a pretty good job of presenting the reasons why we shouldn't privatize the US Postal Service, but unfortunately misses an important one: mail fraud statutes come in real handy for felony convictions and long prison sentences for some of society's worst actors.

He draws this comparison on privacy:


Law enforcement can't open your mail without a judge's say-so, and any private individual who tries could face a long sojourn as an involuntary guest of the feds.

But laws governing the sanctity of your email are in their infancy. Actually, that's a gross overstatement: They're positively fetal. Government agencies may not need any warrant at all to read some of your emails. Google, Yahoo, Microsoft and anyone else whose system carries your email can read your messages at whim, with no consequences.

Read his full argument here.

Tuesday, August 7, 2012

One More Reason Not To Read National Review

Sarah Palin Still Can't Dress Herself

Who would pick such shoes?! They are disgusting! Lose 'em and try simple black pumps. Or for a little daring, Superman blue pumps to match the shirt. Or red or yellow pumps to match the logo. Or better yet, all three colors in the pumps, like little red Ss on the toes on a yellow field. Something to knit the picture together. And the belt has to go. It cuts her in half. Totally the wrong color which confuses the picture. I dunno, maybe untuck the shirt? Or still OK tucked in w/o a belt? But the shoes! What a train wreck. She looks like a refugee from Chinese foot binding.

Were 20,000 Non-Union Pensions At Delphi Victims Of Geithner At Treasury?

Administration officials have testified otherwise under oath.

The Daily Caller claims to have the goods on Geithner's Treasury Department, here. You know Geithner, the guy who forgot to pay taxes on his IMF salary, but is still the Secretary of the US Treasury Department anyway.

Obama's Financial Fascism At Work At DOJ: Not A Single Prosecution Since 2008

'Between 2002 and 2008, for instance, [the] GAI [Government Accountability Institute] points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”


'“Clinton’s DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds.


'But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive.'

Read the whole sordid tale here at The Daily Caller, implicating Attorney General Eric

'Holder, Associate Attorney General Tom Perrelli, Associate Attorney General Tony West, Assistant Attorney General Lanny Breuer, Deputy Attorney General James Cole and Deputy Associate Attorney General Karol Mason — who “all came to the DOJ from prestigious white-collar defense firms where they represented the very financial institutions the DOJ is supposed to investigate.”'

The Market Was Already Overvalued In October 2011, And It Still Is

So says Robert P. Seawright, here, and here:

[T]he market remains overvalued and, if anything, somewhat more overvalued than it was last October. As I have been saying for a long time ... – we are (since 2000) in the throes of a secular bear market, subject to strong cyclical swings in either direction. I continue to encourage investors to be skeptical, cautious, and defensive yet opportunistic. I suggest that they look to take advantage of the opportunities that present themselves while carefully managing and mitigating risk, which should remain their top priority.

Seawright presents the case for overvaluation using a variety of metrics, not the least important of which is the Shiller p/e. Long term investors remain skeptical of the present rally based on these metrics.

Nevertheless, the SP500 shot up over 100 points from 1099 between October 3-20, 2011, and is again above 1400 today, a nominal gain of over 27 percent in less than a year. That's a pretty long sucker rally.

Neil Barofsky Calls Geithner And Obama Two-Faced Housing Bailout Liars

'[I]n 2009, $50 billion in TARP funds had been committed to help homeowners through the Home Affordable Modification Program (HAMP), a program that the president announced was intended to help up to 4 million struggling families stay in their homes through sustainable mortgage modifications. Hundreds of billions more were still available and could have been used by the White House and the Treasury Department to help support a massive reduction in mortgage debt. But Geithner avoided this path to a housing recovery, explaining that he believed it would be “dramatically more expensive for the American taxpayer, harder to justify, [and] create much greater risk of unfairness.” Treasury amplified that argument in 2010, after it reluctantly instituted a weak principal reduction program in response to overwhelming congressional pressure. ...

'[T]hree years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.'

Read the entire entry here.

The announcement of HAMP is what really got Rick Santelli's goat on CNBC one day in early 2009 and set off a fire storm which coalesced in the outrage of the Tea Party movement. The conservative instincts of the Tea Party movement were and remain opposed to bailouts of homeowners, bankers, car manufacturers, insurers, multinationals like GE, and on and on. Barofsky is probably right that this is nothing more than a cynical political ploy to shore up support among Democrats. But if he's not buying it, who will? 

Monday, August 6, 2012

Bob Brinker Of "Money Talk" Is Wrong: GDP Isn't Growing At An Average Of 1.75 Percent

On his radio program "Money Talk" yesterday Bob Brinker sought to defend recent economic performance as better than the Q2 report of 1.5 percent makes it appear. He accomplished this feat by averaging that number 1.5 with the 2.0 percent reported in Q1, coming up with a little better number, 1.75 percent.

This is wrong and I stated so in a post I have since removed.

I thought Bob Brinker said this for political reasons in the context of the remarks, and in a fit of pique I posted that Bob Brinker is a shill for the Obama regime in doing this, remembering as I am wont that Bob Brinker has stated on the program, among other things that hint of leaning to the Democrats despite calling himself an independent, that Obama's man in the US Senate, Dirty Harry Reid, is "a good man, a good man." Harry Reid is manifestly not a good man, recently using the well of the Senate to innoculate himself for potentially libelous remarks he has made from there against Mitt Romney, a fellow Mormon to Reid no less. Harry Reid has also been the chief instrument of gridlock on Capitol Hill, both now and when Pelosi was Speaker of the House. Just ask her how many bills she sent to him which never received action.

I've removed that post because I think it's possible Bob Brinker made the comments entirely out of ignorance, not from political bias. The reason is that I've realized that I've made the exact same mistake about GDP myself on this very blog, and my bias against Obama didn't keep me from making it. I actually forgot about those errors long after I had improved my understanding of GDP. So even if Bob Brinker did make the statements in order to put Obama's performance in the best possible light, it's also possible Bob Brinker just isn't as smart about GDP as he thinks he is. After all, it is a complicated subject about which very few people really are expert, and if I can make an honest mistake about it, so can he.

So the politics aside, it is impermissible to take the sum of quarterly headline GDP and divide by 2 or 3 or 4 to get an average rate. Each quarterly statement of GDP is already stating the annual rate, that is, the annual rate prevailing during the quarter. That's what the meaning of annualized is. As the quarters roll and the data become more full and complete, the numbers are routinely refined, even many years after we learn of the third and final estimate of quarterly GDP for month x, y or z. GDP is always a work in progress, and even somewhat controversial among the truly expert.

So in the second quarter, the annualized rate of GDP growth is 1.5 percent, not 2 percent, and not 1.75 percent. And that is terrible for everyone, Democrat, Republican and independent alike, because we are all in this together.

At least that is what we would like to think.

Yuval Levin Opens A Window On Obama's American Fascism

Yuval Levin opens a window on Obama's American fascism, noting its assault on the middle ground which separates the individual from The State:

Its approach to the private economy has involved pursuing consolidation in key industries — privileging a few major players that are to be treated essentially as public utilities, while locking out competition from smaller or newer firms. This both ensures the cooperation of the large players and makes the economy more manageable and orderly. And it leaves no one pursuing ends that are not the government’s ends. This has been the essence of the administration’s policies toward automakers, health insurers, banks, hospitals, and many others. ...


The [contraception] rule implicitly asserted that our nation will not tolerate an institution that is unwilling to actively ratify the views of those in power — that we will not let it be and find other ways to put those views into effect (even though many other ways exist), but will compel it to participate in the enactment of the ends chosen by our elected officials. This is an extraordinarily radical assertion of government power, and a failure of even basic toleration. It is, again, an attempt to turn private mediating institutions into public utilities contracted to execute government ends.

Read it all, here.

The Detroit News Attacks Obama's Imperial Presidency, Congress' Servility

"The imperial presidency Obama is building should worry Democrats as much as it does Republicans. This has never been an "end justifies the means" nation. Even if you agree with the outcomes the president is seeking, his running roughshod over the rule of law should be objectionable, because the powers he is claiming will not be forfeited by the next Republican president."

Read it all, here.

Sunday, August 5, 2012

Conservatives' Answer To Change

Spengler On Elections: Revolution Exalted Into A Constitutional Process

"[R]evolution, in the form of periodic mass elections fought by all available means of money, brains, and even - after the Gracchan method - physical violence, is exalted into a constitutional process."

-- Oswald Spengler

WaPo Repeats The Big Lie: "There Are Just Not Enough Tax Breaks To Close For The Rich"



"[T]here are just not enough tax breaks to close for the rich, and the big money is in those for middle-income taxpayers."

The leftist drumbeat to raise taxes on the middle class just never ends.

But it's not just their agenda, it's the agenda of Republicans and libertarians, and it flies under the radar of "tax reform" and "broadening the base". Its most passionate advocates in the Republican Party are people like Gov. Mitt Romney and Rep. Paul Ryan, and certain members of the Gang of Six and the Gang of Twelve, you know, like Sen. Tom Coburn and Sen. Saxby Chambliss. The Stupid Party is stupid because the rank and file of America end up voting for this liberalism all the time. But those elected officials aren't stupid. They know exactly what they are doing and how it works.

You promise lower marginal tax rates across the board in exchange for giving up some tax deductions. Then as time passes the Democrats get the government in their hands again and raise taxes. But those lost deductions? They remain lost, and overall the tax burden on the middle class increases. It's what happened in 1986 with the loss of deductibility of interest on revolving credit in exchange for tax reform which lowered rates. But along came Bill Clinton in 1992 and up went the taxes. To help pay for things during the recession which Clinton's higher taxes made worse, middle class Americans tapped home equity like crazy, which was the rope Republicans furnished to hang us with. And now look at us, tapped out like never before with owners' equity in real estate down to 41 percent, facing a bunch of traitors on our side who want more money to misspend.

Tax collectors for the welfare state is who they are, to borrow a phrase from a recent Republican candidate for president who really let us down by not using it during the primary season.

As usual, conservatism's worst enemies are in their own party.

I'm getting just a little sick of it, too, primarily because there is a HUGE pool of tax revenue forfeited by the government which amounts to a gift to the top third of income earners in America. In 2012 everything earned above $110,100 escapes Social Security taxation. That's roughly $2 trillion which flies under the tax radar. At 15.3 percent, that's the biggest tax loss expenditure out there by far: $306 billion of lost revenue to the federal government because high-income earners don't pay it. The mortgage interest deduction, by contrast, is less than a third of that.

Conservatives want the misspending stopped. Until it is, tax increases are off the table.

Total Value Of Household Real Estate, Owners' Equity and Percentage of Total Value

The following charts reproduce real estate data compiled from the Federal Reserve's z.1 Flow of Funds releases going back to 12-11-97 showing the most up-to-date values for the total value of household real estate, the value of owners' equity, and the percentage of owners' equity relative to total value.