The extremes of the bond market rarely make sense

So says Eric D. Nelson of Servo Wealth Management, here:

For diversified, long-term oriented investment portfolios, interest rate and bond price changes matter very little. Most of a portfolio’s volatility comes from stocks.

Interest rate cycles can last for very long periods of time which makes interest-rate forecasting almost impossible. Further, the extremes of the bond market (cash or long-term bonds) rarely make sense. Sticking with bonds of between one and five years in maturity works best. Long-term bonds sometimes produce the best returns, but this tends to coincide with periods when stocks are also doing very well, when the bond component of a diversified portfolio is needed the least.

A “variable maturity” strategy is superior to simple indexing or the “laddering” of bonds by taking advantage of current bond prices and higher-expected return environments when yields are significantly higher for longer-maturities (up to five years), while limiting interest rate risk when yields are flat or inverted across the bond market. This approach eliminates any need to forecast future interest rates, even if such a thing were possible.

Current premiums you will have to pay to own popular Vanguard bond funds

Trading above the 10.40 level since August 2009, almost 5 years, Vanguard's short term bond index fund VBISX is currently priced at 10.55, a premium of 1.44%. The average annual return for the last three years through April has been 1.53% according to Vanguard. Current assets total $35.7 billion.

Trading above the 11.00 level since May 2010, 4 years, Vanguard's intermediate term bond index fund VBIIX is currently priced at 11.48, a premium of 4.36%. The average annual return for the last three years through April has been 4.92% according to Vanguard. Current assets total $14.7 billion.

Trading above the 12.00 level since April 2011, 3 years, Vanguard's long term bond index fund VBLTX is currently priced at 13.55, a premium of 12.92%. The average annual return for the last five years through April has been 9.73% according to Vanguard. Current assets total just $6.5 billion.

Trading above 10.50 since April 2010, 4 years, Vanguard's total bond market index fund VBMFX is currently priced at 10.83, a premium of 3.14%. The average annual return for the last three years through April has been 3.41% according to Vanguard. Current assets total a whopping $113.6 billion. 

The birth rate has fallen almost 12% under Obama to the lowest level in the post-war

The birth rate per 1000 women both in 2006 and 2007, according to the latest CDC figures, was 14.3, but in 2012 it had fallen to 12. 6 from 12.7 in 2011.

The falloff means that annually you get something like 364,000 fewer new Americans to take our place.

In the late 1950s peak birth rates were in excess of 25.0 per 1000 women.

So if we were doing our job reproducing ourselves today like we were in the 1950s, we'd have something like 7.9 million newborn Americans in 2012 instead of 3.95 million.

Birth rates fell into the 15-range in the 1970s and have stayed there pretty much ever since, until now.

Now you know why GDP is also half what it used to be.

We are literally committing suicide.

Zillow says 10 million mortgages remain underwater concentrated among homes worth less than $100,000

CNBC's Diana Olick reports here:

Nearly 10 million borrowers still owe more on mortgages than their homes are currently worth, according to Zillow. That has kept them stuck in place. ... affordable homes are still drowning disproportionately. They are three times more likely to be underwater than expensive homes, according to Zillow. Thirty percent of mortgaged homes in the bottom price tier ($98,400 and below) are in negative equity, compared with 18 percent in middle tier ($90,400 to $306,700) and 10.7 percent in top tier ($306,700-plus).

Junk thought from Mish on labor force, employment and population

Here:

Since April 2008, the population in age group 25-54 declined 0.8%, but the labor force declined 3.6%, and employment declined 4.6%. ...

In the core age 25-54 age group, the population is down 1,053,000 but employment is down a whopping 4,614,000.

Thus, in the 25-54 age group, roughly 3,561,000 people are not working who should be working. The figure is higher if you include other age groups.

------------------------------------------------------------------

Mish is looking at the issue from a zero-sum perspective which forgets that the age groups have changed in composition over time. Of course employment levels are down. The question is where did it all go, and why did it go there.

The 25-54 age group was full of Baby Boomers in 2008 who in 2014 are now in the 55+ category where the employment level has continued to grow and grow despite the recession. What has happened is that the Baby Boomers in the 25-54 age group have been replaced by subsequent demographic tranches bringing up the rear which were much less numerous because birth rates to Baby Boomers dropped dramatically compared to their parents' era. As a consequence no age group will ever reproduce labor force sizes which match what they were as the Baby Boomers grew up. In fact, the size of the 25-54 group will continue to decline for five more years until all the Baby Boomers cross over to the 55+ group.

The supposed four million+ deficit in employment in the 25-54 age group today can be explained entirely by demographics.

I presented the data here, concluding:

"It appears therefore that the fall-off in the employment level of those 25-54 can be explained entirely by the aging of their cohort in which many millions over the last seven years have moved on to the next level, and by the failure of the younger members of this group to bring up the rear in terms of their aggregate numbers because there just weren't enough of them born. The reason for the decline of their employment level is therefore structural, not economic, and will continue to be so for the next five years.

"Indeed, workers aged 55 and older have escaped a decline in their employment level. There are in fact 6.9 million more working at this age right now in 2014 than there were exactly seven years ago, which is what one would expect from the data. The Baby Boom is simply aging and continuing to work as it did before, and it has a lot of room left to run."

Facebook's Zuckerberg is the poster child for H-1B visa sins

From a story reported here by Breitbart's Tony Lee:

High-tech lobbies like Facebook co-founder Mark Zuckerberg's FWD.us have poured in millions of dollars in high-profile campaigns to secure more high-tech visas.

And they have partly been succeeding. The Senate's amnesty bill that passed last year would double and possibly triple the number of high-tech visas and, as Breitbart News has reported, House Judiciary Committee Chair Rep. Bob Goodlatte's (R-VA) "SKILLS" Act that ... passed out of his committee would double the number of H-1B visas.

Ron Hira, a public policy professor at the Rochester Institute of Technology who has worked on these issues for more than a decade, said on the conference call that the H-1B visas that are filling the supposed "gaps" are "doing more harm than good" to the U.S. science and engineering workforce.

He noted that the majority of the H-1B visas are being used for "cheaper workers" from abroad and mentioned that offshoring firms used 50% of the cap last year to further their business model of bringing in "lower-cost H-1B workers to replace American workers." [Rutgers University's Hal] Salzman said that even after American software engineers train their replacements, they cannot speak out about their experiences for fear of being blackballed or having to forfeit their severance payments.

Hira said that the H-1B program has run amok because "Congress sets the wage floors way too low" and "far below the market wages for American workers" while not placing any "requirement to look for or recruit American workers first, so there is no displacement of American workers."

"As a result, you are basically inducing companies to game the system to bring foreign workers to undercut American workers," Hira noted. "Instead of complimenting the U.S. workers as it should, it's substituting for the U.S. workforce and taking away future opportunities by shifting the work overseas."

Salzman said that in this arrangement, the employer has nearly total control of the "indentured" H-1B workers because they hold their work permits. ...

Further, Matloff emphasized that H-1B visa holders earn 5-10% less on average than American workers and there is a high churn rate that gives companies a "never-ending supply of new hires," allowing them to replace workers over the age of 35 while weakening the "bargaining position of current workers." The Senate bill, Matloff said, exacerbates this problem by providing 150% of the visas that the IT industry has said they needed at the beginning of the debate.

Obama is using the Justice Dept. and FDIC member banking system to choke the gun industry

Just like he has used the IRS to stop his political opposition in the Tea Party.

From the top of the story here:

Gun retailers say the Obama administration is trying to put them out of business with regulations and investigations that bypass Congress and choke off their lines of credit, freeze their assets and prohibit online sales.

Since 2011, regulators have increased scrutiny on banks’ customers. The Federal Deposit Insurance Corp. in 2011 urged banks to better manage the risks of their merchant customers who employ payment processors, such as PayPal, for credit card transactions. The FDIC listed gun retailers as “high risk” along with porn stores and drug paraphernalia shops.

Meanwhile, the Justice Department has launched Operation Choke Point, a credit card fraud probe focusing on banks and payment processors. The threat of enforcement has prompted some banks to cut ties with online gun retailers, even if those companies have valid licenses and good credit histories.

Criminal GM discovers it can kill 13 people and it only costs them $2.9 million a pop

We bailed out these creeps, why?

The guilty should be in jail and the company dissolved. It remains arrogant about the matter to this day.

Story here:

WASHINGTON — Three months after announcing the start of a safety recall that has swelled to include 2.6 million cars, General Motors has agreed to pay the federal government $35 million -- the maximum penalty -- for failing to report the potentially deadly defect earlier. ... GM has asked a bankruptcy court in New York to rule that it is protected from economic loss claims associated with the recalled vehicles. GM went through a government-backed bankrutpcy reorganization in 2009, which voided any liability claims tied to products made before July 2009.

US Senate reaches new low under Democrat Leader Dingy Harry

TheHill.com reports here:

But even some Democrats have chafed under Reid’s refusal to allow votes on GOP-sponsored amendments, which derailed an energy efficiency bill last week and a package of temporary tax cuts this week. ... Senators have complained for months that the chamber, once dubbed “the most deliberative body in the world,” has become dysfunctional. The collapse of two modest bills with broad bipartisan support this month marked a new low in cooperation.

Justin Amash's pal John Conyers finally reaches the level of his incompetence

The 85 year old congressman famous for not reading bills because they're too dang complicated, preferring lighter fare with pictures like Playboy Magazine on crowded flights, has failed to get enough signatures to appear on the ballot after serving in Congress since 1965.

The Detroit Free Press reports:

Wayne County Clerk Cathy Garrett ruled earlier this week that Conyers’ petitions were insufficient to qualify for the ballot because at least three people gathering signatures were not properly registered to vote, a requirement of state law. Congressional candidates are required to have at least 1,000 valid signatures. Conyers turned in 2,000 and more than 700 were disqualified for a variety of reasons. Another 644 were thrown out because the circulators weren’t registered voters, leaving Conyers with only 592 valid signatures.

---------------------------------------

It makes you wonder whether Conyers ever read the Amash-Conyers anti-NSA amendment in the first place, which was defeated 205-217, or whether Justin Amash's bi-partisan work with this patsy was nothing more than a cynical ploy.

Bank Failure Friday: AztecAmerica Bank, Berwyn, Illinois, the seventh bank failure of 2014

AztecAmerica Bank, Berwyn, Illinois, failed yesterday, costing the FDIC $18 million.

It is bank failure number seven in 2014.

That one didn't last long . . . it opened in 2005.

No word yet on whether it failed because it was appealing to Hispanic Americans, or unappealing.

Warped New York Times views inflation as sign of increased demand

Nelson D. Schwartz, here:

Besides the increase in consumer prices reported on Thursday, data Wednesday on producer prices showed a rise of 0.6 percent last month, the largest increase since September 2012 and an indication that demand for a number of basic goods is growing faster than economists expected.

Never mind industrial production fell 0.6% (expectation was 0.0%) along with capacity utilization, which dropped to 78.6% (expectation was 79.2%). Import prices were down 0.4% (expectation was for an increase of 0.3%). Retail sales also disappointed up just 0.1% vs. expectation of 0.4%. The expectation ex-autos was even higher up 0.6%, and the disappointment even lower with a flat 0.0%. Crude oil supplies were up .947M when they were expected to be down .400M. The housing index came in lower at 45 vs. expectation of 49.

Against this backdrop of soft demand, higher producer and consumer prices along with back to back months of flat wages are indicative of nothing so much as . . .

PAIN.

Which is what, evidently, The New York Times enjoys inflicting the most. 

Poster Child For America's Decline

Designed to make babies, has none (at least that we know of).

Jim Cramer reads fellow Democrat Tim Geithner and suddenly discovers frugality: both men are only five years behind the curve

THE MARKET IS UP 11% SINCE CRAMER SAID SELL IN SEPTEMBER 2013

Jim Cramer, quoted here:

"I think America's gone frugal. Just like our parents, or grandparents, or even great-grandparents changed their patterns of behavior somewhat radically after the Great Depression, I'm thinking we've changed ours, too."

Here's a newsflash for you Jim: America went frugal already more than five years ago. Why do you think things are the way they are?

See Mish's "The Age of Frugality" here, from October 19, 2008, which noted that frugality had finally (!) made the cover of a magazine after he'd been talking about it since at least March:

"Frugality has finally made front page. BusinessWeek is commenting on The New Age of Frugality."

Cramer thinks there's a new opportunity in the "new" frugality. Remember, this is coming from the same guy who told you in October 2008 to get out of the market if you needed your money in the next five years. If you took his advice, you missed one of the most incredible bull markets in the history of investing. Unfortunately, being five years behind Jim doesn't realize we've already reaped the opportunity of the new frugality.

The future?

I'm still with Chris Whalen and Ambrose Evans-Pritchard: DECADES of economic shrinkage ahead. We've already enjoyed the prosperity which the debt we racked up provided. Civilizationally speaking: It's time to pay for all that.

Sorry old boy.

Unnumber'd Maladies each Joint invade,

Lay Siege to Life and press the dire Blockade;

But unextinguish'd Av'rice still remains,

And dreaded Losses aggravate his Pains;

He turns, with anxious Heart and cripled Hands,

His Bonds of Debt, and Mortgages of Lands;

Or views his Coffers with suspicious Eyes,

Unlocks his Gold, and counts it till he dies.

-- Samuel Johnson, 1749

Can you find yourself on this temperature chart?

The modern warm period is at the right in red.

Our entire history as a species as preserved in the usual objects of historical inquiry occurred in a period much warmer than now, and it could all be coming to an end because of cooling, not warming.

Discussed here, but from an inferior chart.

Why Republicans Must Not Get Control Of The US Senate And Hopefully Won't

Story here:

Two national surveys have shown that a plurality of voters would be "less likely" to support a candidate who favors amnesty, which could enhance the number of Democrats at the polls, which could make states like Arizona, Texas, and Georgia even more competitive. To complicate matters even more, an Eagle Forum report documented how mass immigration may doom a conservative Republican Party, by depressing conservative voters who may not turn out at the polls like they did not for Mitt Romney in 2012, while perpetually importing more Democrats.

Americans believe the most important problem facing the country involves representation, but don't say it quite that way

Dissatisfaction with the government, Congress and politicians took first place in a January Gallup poll. This includes dissatisfaction with poor leadership, corruption and abuse of power.

Perhaps if someone explained how too much power is concentrated there in too few hands the American people might be persuaded that more representatives with smaller districts might help solve the problem of our oligarchical Congress and improve its responsiveness to the people.

Results here.







h/t Laura Ingraham

Obama hates your guts, deliberately releases 36,000 violent aliens in 2013 to kill you, rape you, kidnap your children, beat you up, steal your car, deal drugs, drive under the influence

And he does it with a smile.

CBS News reports, of all people, here:

A majority of the releases were not required by law and were discretionary, the organization [ICE] says.

According to the report, the 36,007 individuals released represented nearly 88,000 convictions, including:

193 homicide convictions

426 sexual assault convictions

303 kidnapping convictions

1,075 aggravated assault convictions

1,160 stolen vehicle convictions

9,187 dangerous drug convictions

16,070 drunk or drugged driving convictions

303 flight escape convictions

Warren Buffett keeps the liberal wolves at bay by favoring higher taxes and now we learn abortion to the tune of $1.2 billion

In exchange for Warren Buffett's liberalism on tax increases on the rich and his support for abortion Obama is content to enrich Buffett with oil carried by Buffett's rail cars instead of approving the Keystone Pipeline, which in turn serves to strengthen Obama's support from the environmentalists while hurting Obama's conservative enemies as well as his greater enemy, the nation.

See how useful just one idiot can be?

Story here.

S&P500 ekes out another new high riding on the thermals, up just 0.8 points from yesterday's new high

Up 0.04% from yesterday.

Whoopee! Some new high.

"Are you going away with no word of farewell?

Will there be not a trace left behind?

Well, I could have loved you better,

Didn't mean to be unkind.

You know that was the last thing on my mind."

-- Tom Paxton

FiveThirtyEight Economists Assert But Don't Demonstrate Distributional Characteristics Of Great Recession Spending Pullback

I refer to "Why the Housing Bubble Tanked the Economy And the Tech Bubble Didn’t" by AMIR SUFI and ATIF MIAN, here, where they basically blame the spending pullback of the Great Recession on the poorest, most indebted homeowners:

"The poor cut spending much more for the same dollar decline in wealth. This fact is one of the most robust findings in all of macroeconomics, ... It also makes intuitive sense."

Their forthcoming book may show this, but this article surely doesn't.

They present data which tell us about homeowners' housing as a share of their net worth by quintiles, their mortgages as a share of their home values by quintiles, and about the net worth of richest and poorest homeowners. These are useful distributional observations which, unfortunately, in the case of spending are missing in the presentation! You'd think they would be present in a story which attacks traditional economists like Ben Bernanke for ignoring distributional data sets. Ah, yeah.

Apart from whether showing the distributional characteristics of the spending pullback is even possible, I wonder if it makes any sense that the poorest homeowners could cut their spending enough to account for the sums involved, which is what traditional economists wonder. Weren't they the ones primarily represented in the 5.6 million who lost their homes to foreclosure in the first place?

Using November 2007 real retail and food service sales as the baseline ($179.37 billion), the cumulative month to month shortfall from that to November 2012 came to $663.09 billion. Yes, it took five full years for real retail to recover. But the peak to trough decline in real GDP from 4Q2007 to 2Q2009 alone, on the other hand, was $639.2 billion, not even half way through the great retail depression. Retail spending shows only part of the picture.

Which is why it's wrong to imply, as the authors do, that the decline in spending, supposedly linked to the poorest homeowners, explains the Great Recession. It only explains about a third of it, but just how much of that can be blamed on the poorest homeowners remains a mystery.

New S&P500 all time high today at 1896.65 beats April 2nd high by just 0.3%

This doesn't look like a break-out to the upside to me, just floating around up in the ether riding the thermals.

Two members of the fascist oligarchy have a little fun with the rubes and pretend they're not part of it

"Are we still a capitalist democracy or have we gone over into an oligarchic form of society in which incredible economic and political power now rests with the billionaire class?" -- Senator Bernie Sanders, Socialist-VT

"And so I don't know what to call our system or how to -- I prefer not to give labels; but there's no question that we've had a trend toward growing inequality and I personally find it very worrisome trend that deserves the attention of policy-makers." -- Janet Yellen, Federal Reserve Chair

Read the Q&A here.

The S&P500 wouldn't be where it is without stock buybacks and cheap loans to finance them

Steven Pearlstein for WaPo, here:

[T]he corporations of the Standard & Poor’s 500-stock index spent $477 billion last year buying back their own shares, a 29 percent increase over 2012 and the most since the peak year of 2007. The idea behind buybacks is that they are a tax-advantaged way to return profits to shareholders by boosting the market price of their shares. Since the stock market tends to value companies by multiplying the profits per share times the number of shares, reducing the number of outstanding shares has the arithmetic effect of boosting the stock price. ...

Stock buybacks in the S&P 500 transformed what would have been an 80 percent rebound from the lows of 2009 into a 178 percent increase, according to a study by Fortuna Advisors.

It would be one thing if most of these stock buybacks were paid for out of the trillions of dollars in cash now sitting on corporate balance sheets. But as it happens, most of them have been paid for by near-record levels of corporate borrowing. Of the $3.4 trillion in additional debt taken on by nonfinancial corporations since 2009, nearly 87 percent has been sent off to shareholders in the form of dividends and stock buybacks, according to Paradarch Advisors. ...

The Federal Reserve has also played a big role in the buyout bonanza. Over the past five years, the Fed has pumped $3 trillion into the financial system, much of which remained there rather than making its way into the real economy. That’s made it easy for companies to use cheap borrowed money to buy back their stock, or that of other companies.

In 2012 births were 12.6 per 1000 women, but chlamydia infections were 456.7 per 1000 population

That means this sexually transmitted disease infection actually occurs about 36 times more frequently than pregnancy carried to term.

Stated another way, this venereal disease infection in America dwarfs actual reproduction by 3524.6%.

Story here at cnsnews.com:

In 2012, the average chlamydia infection rate in the U.S. was 456.7 per 1,000 population. Mississippi had the highest rate (774.0 per 1,000) while New Hampshire had the lowest (233.0 per 1,000).

Left untreated, chlamydia can make you blind.

Gay men have become walking syphilis factories exploding the disease by 183%

Story here from CBS in Atlanta:

[T]here has been a steady rise in gay and bisexual men catching the disease. They account for most of the recent infectious cases. ... [Syphilis] was far more common until antibiotics became available in the 1940s, slashing the number of annual cases to below 6,000. Last year, there were nearly 17,000 cases.

Pope Francis pontificates, calls for legitimate redistribution of economic benefits by the State

In front of the UN this morning, quoted at length and discussed here:

"[E]quitable economic and social progress can only be attained by joining scientific and technical abilities with an unfailing commitment to solidarity accompanied by a generous and disinterested spirit of gratuitousness at every level. A contribution to this equitable development will also be made both by international activity aimed at the integral human development of all the world’s peoples and by the legitimate redistribution of economic benefits by the State, as well as indispensable cooperation between the private sector and civil society."

Ed Morrissey tap dances all around this:

"It’s clear, though, that he wasn’t calling for widespread and massive confiscation of wealth by governments."

Yes he is, while calling for it at every level knowing that that's not going to happen, and hiding behind the word "legitimate", a qualification foreign to the language of Jesus on the subject. 

Well, you first. The pope, the Vatican and the people of the Roman Catholic faith should take the lead: Let the redistribution begin with them, with the enormous wealth of the church. When we see them impoverishing themselves for the sake of the poor perhaps we'll take this more seriously.

Until then, this is just more pontificating.

What part of "that ye have" don't they understand?

"Sell that ye have and give alms." -- Luke 12:33

Rick Santorum is right: Conservatism is about the family, and libertarianism isn't about enough

Blue Collar Conservatives, reviewed here:

A blithe attitude about economic disruption and the decline of traditional industries goes along with what Santorum sees as a philosophical overemphasis on individualism. Conservatives, he argues, have neglected an important strand of political thought in which the family is the fundamental unit of the polis.

“The basic unit of the society is the family,” he writes, not “the individual.” Liberty in America shouldn’t mean just “freedom from” coercion, he argues, but “freedom for” — for Americans to do the right thing, to choose the virtuous and Godly course. That, he explains, is the properly understood meaning of the right to “pursuit of happiness.” (He takes this up in American Patriots, his recent book of exempla from the Revolutionary period divided into defenders of life, defenders of liberty, and defenders of “the pursuit of happiness,” i.e., virtue.)

Santorum explicitly blames libertarians for the rise of individualism, but it’s hard not to feel as if he’s taking issue with most of his party. ...

Our brilliant masters raised the cost of youth labor by 41% in the teeth of the financial crisis, decimating their employment by 43%

The current deficit in the general employment level is about 1.55 million below the July 2007 peak (all figures are not-seasonally-adjusted as published by stlouisfed.org). Since the measurement typically is at its highest in the summers, it looks likely that after seven years we are finally going to dig out of this hole this coming summer. Swings up 2 to 4 million from the winter lows to the summer highs are not unusual for this measurement.

That said, deficits in the levels for some age groups remain, and reveal how far behind the employment level remains even as population has increased over the period by an additional 16 million.

The question is why.

Most importantly, workers in the core of the working age population 25-54 years old are today 5.7 million fewer in number than they were at their November 2007 peak, which is the largest deficit by age group.

The oldest of these workers today were born in 1960 when births per 1000 women were still 23.7. The youngest were born in 1989 when births per 1000 women had plummeted to 16.4. But it wasn't until 1965 that births fell below 20 per 1000. That means there are only five tranches left in the measurement today from the high birth rate years 1960-1964 inclusive, whereas seven years ago the picture was a little different. We had seven more high birth rate years represented than we do today. Those aged 54 seven years ago were born in 1953 when births per 1000 were pushing 25. Births per year from 1955 through 1964 reached as high as 4.27 million in 1961. Contrast that with 1973 through 1976 when births crashed to 3.1 million per year, a deficit of 4 million over just those four years compared to the pre-1965 levels.

It appears therefore that the fall-off in the employment level of those 25-54 can be explained entirely by the aging of their cohort in which many millions over the last seven years have moved on to the next level, and by the failure of the younger members of this group to bring up the rear in terms of their aggregate numbers because there just weren't enough of them born. The reason for the decline of their employment level is therefore structural, not economic, and will continue to be so for the next five years.

Indeed, workers aged 55 and older have escaped a decline in their employment level. There are in fact 6.9 million more working at this age right now in 2014 than there were exactly seven years ago, which is what one would expect from the data. The Baby Boom is simply aging and continuing to work as it did before, and it has a lot of room left to run.

If there is an economic problem revealed by the employment level, it has to do with the youngest workers.

Consider teenagers 16-19: 3.2 million fewer teenagers are working today in that age range than at their pre-recession peak in July 2006 at 7.5 million. That's a 43% decline in teenage employment levels in almost 8 years, an utter catastrophe which has nothing to do with demographics. Birth rates have held steady between 1987 and 1998 at 15.4 per 1000.

Unfortunately, teenagers paid the biggest price because in the teeth of the first economic depression in the post-war this country decided it would be a good idea to raise the minimum wage in 2007, again in 2008, and again in 2009. When wages came under severe pressure for every other age group and millions took pay cuts just to keep working, our brilliant masters decided to raise the cost of youth labor by 41% since 2006. And then the dopes voted for a guy who wants to raise the cost of their labor another 39%.

  

College age workers 20-24 by contrast, are in deficit from July 2007 by only 0.8 million.

The declines for the three age groups of 9.7 million minus the gain of 6.9 million for those 55 and older implies a net loss of 2.8 million in the employment level, impacting workers primarily 16-19.

If you want less of something, tax it. And that's what the minimum wage is, a tax on labor which reduces the quantity of it naturally.

After the holocaust of Jews, a holocaust of Germans at the hands of the victors

Remembered in After the Reich, reviewed here:

[Giles MacDonogh's] best estimate is that some three million Germans died unnecessarily after the official end of hostilities. A million soldiers vanished before they could creep back to the holes that had been their homes. The majority of them died in Soviet captivity (of the 90,000 who surrendered at Stalingrad, only 5,000 eventually came home) but, shamingly, many thousands perished as prisoners of the Anglo-Americans. Herded into cages along the Rhine, with no shelter and very little food, they dropped like flies. Others, more fortunate, toiled as slave labour in a score of Allied countries, often for years. Incredibly, some Germans were still being held in Russia as late as 1979.

The two million German civilians who died were largely the old, women and children: victims of disease, cold, hunger, suicide - and mass murder.

Apart from the well-known repeated rape of virtually every girl and woman unlucky enough to be in the Soviet occupation zones, perhaps the most shocking outrage recorded by MacDonogh - for the first time in English - is the slaughter of a quarter of a million Sudeten Germans by their vengeful Czech compatriots. The survivors of this ethnic cleansing, naked and shivering, were pitched across the border, never to return to their homes. Similar scenes were seen across Poland, Silesia and East Prussia as age-old German communities were brutally expunged.

With housing ATM shut down, Americans tapped retirements prematurely in 2011 to the tune of $57 billion

So says the story here at Bloomberg, extrapolating using the basic early withdrawal penalty rate of 10%:

It’s a small number that’s part of a much larger picture: The Internal Revenue Service collected $5.7 billion in 2011 from penalties, meaning that Americans took out about $57 billion from retirement funds before they were supposed to.

The median size of a 401(k) is $24,400 as of March 31, with people older than 55 having $65,300, according to Fidelity Investments. Those funds can disappear quickly in retirement, and the early withdrawals indicate that the coming retirement crisis could be even more acute than expected. ...

Meanwhile, the amount of home-equity loans outstanding was $704 billion in 2013, down 38 percent from the 2007 peak, according to Federal Reserve data. ...

During the 2008 campaign, President Barack Obama proposed allowing penalty-free withdrawals of up to $10,000 from retirement accounts. That idea went nowhere and wasn’t included in the 2009 economic stimulus.

In 2012, the New York State Society of Certified Public Accountants proposed a temporary waiver of the penalties while families were recovering from the recession.

--------------------------------------------------------------------------------

Actually the premature withdrawals could have been significantly higher than $57 billion in 2011. There are many exceptions to the 10% penalty rule, one of which is for withdrawals to pay for health insurance premia, which began jumping in the wake of the passage of ObamaCare in March 2010. Careful taxpayers withdrew exactly for that growing expense, paid no penalty and in certain circumstances also deducted the expense from income when self-employed. Since those sums escaped the 10% penalty, additional sums withdrawn probably contributed to the total penalties collected in 2011.

Obsessed with Congress' flaws, Justin Amash finds himself alienated from Republicans as a libertarian crank

The Detroit News here highlights how in "Michigan GOP leaves Justin Amash to fend for himself", including this from Mike Rogers who evidently feels more free to speak because he's baggin' it:

Rogers has sparred with Amash on foreign policy intervention and fought off an Amash attempt last year to curb the National Security Agency phone surveillance program. Rogers points to Amash’s lack of support on Iran sanctions, a vote against a balanced budget amendment and the “embrace” of isolationism that’s “not consistent with what’s in the best interest of the future of the United States. I just worry you have somebody who’s more concerned about their brand than the substance of the issues,” Rogers said.

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Congress' flaws are legion, but their remedy is not libertarianism. Their remedy is in representation.

In his zeal for the constitution Justin Amash has little to say about representation, perhaps because he represents the libertarian interests of a few, not the broader interests of his constituents. Which is odd, since lack of representation was the key complaint of the founding era which wrote it.

Today we have a Congress which is an artifact of the 1920s, not of the founding era. Representation has ceased to grow with population since the 1920 Census, by an act of Congress itself, the effect of which has been to turn the Congress into a powerful oligarchy arrayed against the great masses of the unwashed taxpayers whose wallets are plundered by it.

The Tea Party would be more convincing if it actually believed in a more representative Congress, which means a far more numerous Congress than the 435 member one we have now. So far we haven't seen the Tea Party demonstrate passion for any such thing, even from its preeminent leaders like Justin Amash who claim to be inspired by everything constitutional, except for representation at the level of one per 30,000.

Americans hate their Congress in unprecedented numbers, and the reason is because their individual representatives don't speak for them.

If the Tea Party had any genuineness to it, it would make fixing that job #1. 

The myth of the American holocaust: There were 4 million slaves in the US in 1860, yet "millions" were murdered

Math . . . hard to figure.

Story here:

“Its symbolism in history is directly linked to the enslavement, torture and murder of millions of Americans,” Hall said of the Confederate flag. “The state of California should not be in the business of promoting hate toward others.”

When you consider that in 1860 prime male field hands went for between $1,200 and $1,800 each, it is incredible to believe that such large numbers of slaves were murdered.

Liberals still imagine conservative Democrats just evaporated when they actually became Republicans

Liberal Peter Beinart admits Republicans hate Obama because he's a Democrat, not because he's black, but still can't accept it that the Democrat Party left the southerners, not southerners the Democrat Party, here:

I’m not claiming racism is irrelevant to Republican opposition to Obama. Race is a constant presence in American politics, and it’s impossible to understand either political party without it. But the right’s strategy of militantly opposing, and sometimes delegitimizing, Democratic presidents stretches back two decades now. It has its roots in the end of the Cold War, which stripped Americans of a common enemy; in the fragmentation of media that once spanned ideological divides and now exacerbates them; and in the near-extinction of the southern conservative Democrats and northern liberal Republicans who once helped broker political compromise.

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And you'd think he'd see the victory in this instead of the defeat, because Democrats joining the Republican Party have done far more to liberalize it, and the nation as a whole, than Republicans have done to "conservatize" the new arrivals. The constant leftward drift of politics since the Reagan era proves that, especially in the realm of social policy.

Conservative traitor Bush 41 ACCEPTS JFK Profile in Courage Award for breaking no new taxes promise

To Democrats the only good Republican is the traitor to his own kind. It is enough of an insult that George Herbert Walker Bush was given the award, but the real outrage is that he accepted it.

Story here:

"Candidly speaking, my grandfather didn't want to raise taxes," Lauren Bush said as she accepted the award. "But ... he felt he owed the American people action and results. Compromise is a dirty word in Washington today. ... But once we get back to realizing the importance of actual governance, I suspect this too will pass.". . . The award is named for Kennedy's 1957 book, Profiles in Courage, which tells the stories of eight U.S. senators who took unpopular stands.

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The farce of the award is that the Kennedy clan still doesn't have the courage to admit that JFK didn't write it:

John F. Kennedy is credited as its author, but there are credible allegations that most of it was the work of his speechwriter, Theodore Sorensen.

The loyalty of libertarians, as with other ideologues, is to something other than borders, language and culture

Mike "Mish" Shedlock, here, who has no home, no country, no roots anywhere which are not exposed to the withering glare of libertarian "principle":

According to Gabrielė "From soap operas to ballet performances, the Russian government is doing everything to influence the cultural life of Eastern Europe, and to maintain a stranglehold on the mentality of the people."

Let's assume that is true. Here is an equally true statement "From soap operas to ballet performances, the EU is doing everything to influence the cultural life of all of Europe, and to maintain a stranglehold on the mentality of the people."

Here's another "The US is doing everything to everyone globally, and by military force where necessary, to maintain a hypocritical stranglehold on any country that dares go against the vision of the United States."

It's time to treat the rich like equals: Dean Kalahar speaks up for proportional taxation

Here, although the ahistorical reading of Scripture by liberals on behalf of progressive taxation is hardly new:

Proportional taxes actually meet the equity and ability to pay principles of effective, efficient, and "fair" taxes. With a proportional tax everyone pays the same percentage but those who earn or spend more pay more. For example: if you buy a $50,000 car and the Fair/proportional tax is 10%, then you pay $5,000 in tax. If, on the other hand, you buy a $5,000 car, your tax is $500. By paying the same percentage, everyone is offered the dignity of being treated equally, and those who afford more pay more. Isn't that what liberals are always demanding?

"We have to raise the progressive tax rate so the "rich" pay their "fair share."

In reality, progressive tax rates, like the federal income tax, might meet the ability to pay principle but not the equity principle. Progressive taxes have varied tax rate percentages depending on income so taxpayers are not treated equally. Currently the top 20% of income earners pay more than 90% of the income taxes, while the bottom 50% pays less than 3% of the income taxes. Who's actually "paying their fair share?"

Robert Tracinski has been reading The Bible

It turns out Robert Tracinski is both an atheist and a libertarian, which makes perfectly good sense. I think he gets just one mention here on the blog before this. It turns out he's been reading the Bible.

Story here and here.

I wonder how long it will take him to discover that his own conception of Western-style individualism is also the product of a madman. 

Under Democrat rule the level of America's core workers aged 25 to 54 remains 5.662 million below the 2007 peak

The peak level of workers aged 25 to 54 was 101,083,000 in November 2007. In April 2014 the level was 95,421,000.

Under 6+ years of Democrat rule, full time employment remains 5.146 million below the 2007 peak

Peak full time employment was 123,219,000 in July 2007. Almost seven years later full time stands at 118,073,000. If we are lucky this summer full time will hit 120 million.

Not seasonally adjusted, total nonfarm employment remains 1.115 million below the November 2007 peak

Peak was 139,443,000 on November 1, 2007. On April 1, 2014 the level stood at 138,288,000.

The agony under rule by Democrats: 75 months later, 6.25 years, employment remains 113,000 short of the previous peak in 2007

For a graph and discussion, see Calculated Risk, here:

"This 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." 

For a second graph and discussion, see here:

"This graph shows the job losses from the start of the employment recession, in percentage terms - this time aligned at maximum job losses.  At the recent pace of improvement, it appears employment will be back to pre-recession levels next month (Of course this doesn't include population growth)."

Unemployment plummets to 6.3%, 288,000 jobs are added in April and the stock market just shrugs its shoulders

The employment situation report from the Bureau of Labor Statistics for April 2014 is here.

806,000 people dropped out of the labor force in April (seasonally adjusted), many of whom likely caused the unemployment rate to plunge 0.4 points to 6.3%. Fewer people not counted as unemployed even though they were unemployed makes the headline number drop. The not-seasonally-adjusted number leaving the civilian labor force was 782,000.

People are making too much of this data point, however. Granted, the drop was large for a March to April cycle. But key is that the civilian labor force level always peaks in July each year and then declines and rises again to a new high. It is not appreciated that a new all time high in the civilian labor force level was reached just last July at 157,196,000. True, the pace of achieving new peak levels was arrested after July 2008. Adding about 1.5 million to the labor force each summer as in the past would mean we should have been at about 163.8 million in the summer of 2013. We were off that pace by 6 million. The April 2014 level, however, was higher than the April 2013 level, which was higher than the April 2012 level, which was higher than the April 2011 level. The point is the civilian labor force level is climbing out of its hole, and the peaks and valleys prove it. When they stop proving it we should be concerned.

The 288,000 added to payrolls in April stands in vivid relief against the 190,000 average added to payrolls per month in the preceding twelve months. The employment level of those who are 25-54 years old surged 321,000 to 95,421,000, still almost 6 million under the November 2007 high. At 288,000 per month for a year, one could easily add almost 3.5 million to payrolls and in two years return the levels of those of prime working age to the previous peak.

Per hour earnings for all employees did not rise and remained flat. That is concerning, but at least production and nonsupervisory employees saw an increase.

The Case Shiller Home Price Index Shows Housing Prices Almost 20% Above The Long Term Mean Level

The current level of the Case Shiller Home Price Index is 152.48 and the mean level is 127.51.

About 140 on the index looks like the historical high water mark beyond which housing appears to be in a bubble, meaning we are in one.

Given the scale of the recent extreme housing bubble, housing should not have been prevented from correcting fully, probably well below 120, in order to reset the market on a surer basis. That might have prevented the current escalation in prices, which are unaffordable to almost everyone beneath upper middle class income levels of around $76,000.

Recent tirades against income inequality forget that the bottom half of the population typically has most of what wealth it has tied up in housing and is not well diversified. Loss of homes and home equity have been major drivers of income inequality under Barack Obama, compounded by loss of employment and housing policy inattention, even as stock markets have been driven higher by nominally positive policy through Obama's Federal Reserve chairs.

Obama sent money, after all, to Aunt Zeituni's family to help with her funeral, but he did not attend, and went golfing instead.

Are Democrats fanatical about abortion rights for unstated racist reasons?

Seen here:

New Jersey city council chairman and mayoral candidate Marie Strumolo Burke was caught on tape lamenting her city’s descent into a “fucking nigger town” — and nearly all media reports failed to identify her as a Democrat. Burke is chairman of Belleville, New Jersey’s city council and is running for mayor in the town’s June election. And yes, she is a member of the Democratic Party. In an undated recording of a voicemail left by a former council chairman, Burke’s voice can be heard in the background “discussing” proposed changes to the town’s tax rates. “This is terrible. This is terrible,” she can be heard moaning in the background. “This is gonna be a fucking nigger town!”

Catastrophic Q1 2014 GDP report at 0.1% makes 21 quarterly reports under Obama averaging just 1.76% each

The latest GDP report is here.

The decline in GDP in Q1 to 0.1% annualized was from 2.6% annualized in Q4 2013, a whopping 96% free fall. In other words, the economy did a panic stop, slamming on the brakes and hitting the wall.

Blaming it on the winter, for those of us who've seen more than fifty of them north of the Mason-Dixon Line, is laughable beyond belief. We don't hibernate like bears up here. We get up early and blow the snow off the 200 feet of driveway and get on with our day.

Here's the truth: Quarter on quarter durable goods consumption crashed over 70%, nondurable over 95%. Real nonresidential fixed investment was a catastrophe, the spread plummeting 136%. Residential investment added a decline of 5.7% to the previous quarter's decline of 7.9%. Exports went deep sea diving, the spread down 180% quarter on quarter, and the spread for imports was down even more, 193%. A slight uptick in government spending kept GDP barely positive.  

Five years of GDP reports under Obama have averaged just 1.24% per year, so the sixth year is off to a terrible start at 0.1%.

Eight years of GDP reports under Bush averaged 2.13% per year, pretty lame all by itself but 1.7 times better than Obama so far.

I'd take it in a heartbeat.

Obama's awful GDP explains lower incomes, long term unemployment, government dependency and loss of confidence

So says Investors.com here:

Had his recovery matched Ronald Reagan's growth rates, U.S. GDP would be $2 trillion bigger today. Had it matched John Kennedy's, it would be $3 trillion bigger. These aren't just abstract numbers. Obama's weak recovery explains why household incomes are lower than they were when the recession ended, why millions are long-term unemployed and millions more have given up looking for work, why government dependency is at all-time highs and why confidence is so low.

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Which is why our propagandists in the media have buried the most important story of our time. America's first black president is an abject failure.

MSNBC dingbat tries to tell the world Animal Farm wasn't aimed at the Soviet Union

Her name? Krystal Ball.

(With a name like that shouldn't she be doing the weather somewhere, or maybe the traffic? No, I know! Market futures!)

Here she is in all her dimness, trying to frame George Orwell's fairy story as a screed against capitalism:

Animal Farm, hmm. Isn't that Orwell's political parable of farm animals where a bunch of pigs hog up all the economic resources, tell the animals they need the food because they're the makers and then scare up a prospect of a phony boogie man every time their greed is challenged?

Sorry, no. The original capitalist pigs were the communists, which is why the communists like "Krystal Ball" work so hard to make you think the opposite:

One publisher during the war, who had initially accepted Animal Farm, subsequently turned it down after an official at the British Ministry of Information warned him off. The publisher then wrote to Orwell, saying: "If the fable were addressed generally to dictators and dictatorships at large then publication would be all right, but the fable does follow, as I see now, so completely the progress of the Russian Soviets and their two dictators [Lenin and Stalin], that it can apply only to Russia, to the exclusion of the other dictatorships. "Another thing: it would be less offensive if the predominant caste in the fable were not pigs. I think the choice of pigs as the ruling caste will no doubt give offence to many people, and particularly to anyone who is a bit touchy, as undoubtedly the Russians are."

In Orwell's London Letter for Partisan Review dated 17 April 1944 he stated how it was "next door to impossible to get anything overtly anti-Russian printed" because of the US, UK, Soviet alliance.

What's next from old Krystal? The OSS (formed in 1941) murdered Trotsky?

America Becomes France, Shrugs Shoulders Over Disastrous Q1 GDP Of 0.1%, News Media Avoid Story

No major news outlet makes the disaster of GDP under Obama, who owns the absolute worst record in the post-war, the lead story this morning except for business news outlets like CNBC and Marketwatch. ABC's story is a one line headline from AP. That's it! You have to actively go looking for the GDP story under "Money" or "Business" or "Economy" to find it just about everywhere even though it is the story of our time because it's the reason there are no jobs, no income growth, declining living standards and growing income inequality. All brought to you by Barack Hussein Obama, hm hm hm, who has turned America into a slum.

Q1 2014 GDP 0.1%: Consensus 1.2% Only Overestimated By 1100%, That's All!

The median priced existing home is affordable only to the highest reaches of the upper middle class

From an interesting discussion recently about what it means to be middle class, here:

One helpful yardstick to judge whether you're middle class: Median household income was $51,017 in 2012, according to the most recent U.S. census data. Robert Reich, a professor of Public Policy at the University of California-Berkeley and former Secretary of Labor, has suggested the middle class be defined as households making 50 percent higher and lower than the median, which would mean the average middle class annual income is $25,500 to $76,500.

If you're in the middle of the middle, however – not lower or upper-middle class – that would be an income range between $39,764 and $64,582, says Aaron Pacitti, an assistant professor of economics at Siena College in Loudonville, N.Y.

Again, it isn't official. Nobody gets a membership card to the middle class.

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The former spread, $25,500 to $76,500, comes to about 53 million individual wage earners in 2012 according to Social Security wage statistics, out of almost 154 million total. This spread looks like it comes from dividing the total workers into thirds and seeing where the income lines fall . . . in other words, not a wealth driven measure but grading on the population curve. This means a third of wage earners (about 50 million) make less than $25,500 and a third make more than $76,500.

The latter spread, between $39,764 and $64,582, comes to just 20 million individual wage earners in 2012.

Typically, working couples must combine such incomes to enjoy middle class life styles, which usually means homeownership.

Perhaps a better way to measure membership in the middle class is through housing affordability. Often housing is deemed affordable at about 2.6 times earnings on an historical basis, which implies an existing home price to the $39,764 earner at $103,400 or lower, and $167,900 or lower to the $64,582 earner.

Unfortunately the US existing home median sales price in March 2014 was $198,500, which presently requires an income of $76,300 to be affordable. In other words, you've got to have extreme upper middle class household income just to afford the median priced existing home.

But the median household income in 2012 was just $51,017. That only supported an affordable home at $132,600 or less, not much of a home.

Three Cheers For Dana Rohrabacher: Christian Love Is Furthered By Individual, Not Government, Action

Quoted here at 218, the blog of the oligarchy:

"No. 1, a policy of legalizing the people who are here, the sort of easy way out, would in the long run put 40 million new people into our country, which would change the nature of our country, and that would be a bad thing, not to mention breaking the bank, etc."

“Also, my response was that Christian love is not furthered by advocacy of government policy but instead by individual action and commitment."

“Individual commitment is not individual commitment to changing a government policy, it is to come out and help specific people and people who are in need, and if [the pastors] really wanted to help people who are here illegally or in bad situations they, they want to pay for their health insurance and everything, then I would be saying how wonderful that is. But if they are advocating that the government do that, then it will break our bank and destroy our country.”

If Hillary Doesn't Run, Her Marxism Dictates That Chelsea Must . . . For Something: How About Ambassador To Libya To Get Her Started?

Libya accepts pregnant ambassadors, right?

Mickey Kaus, here:

The Clinton mode of production, then, is running for office or serving in office. That is the material basis for the Clinton Foundation and the Clinton lifestyle and the whole Clinton institutional structure. In order to keep this mode of production from breaking down, the Clintons–one of them, at any rate–must be at least potentially in the running for a powerful office at all times. If Hillary doesn’t really want to run, she can’t admit it in public. She must maintain the facade of candidacy until the last minute–or else the Foundation will have to cut back and Ira Magaziner might need to find a job. If it looks like Hillary might not run–perhaps because of health reasons–the model would predict that another Clinton, presumably daughter Chelsea, would start making noises about launching a political career. Voila! Data point confirmed. The theory is off to a good start. …

h/t Chris

Senate Republicans Kill Provision Requiring Disclosure Of Total Executed Annually By Drone

From The New York Times, here:

The provision, passed by the Senate Intelligence Committee last year as part of its authorization bill, required Mr. Obama to make public an annual report on “the total number of combatants killed or injured during the preceding year by the use of targeted lethal force outside the United States by remotely piloted aircraft.” The provision was the same for civilians killed or injured. But officials said that the provision encountered almost immediate resistance both from intelligence officials and Republican lawmakers, some who have fought against any changes to the way the targeted killing program has been managed.

Beaver Pennsylvania: Home Of The $6.30 Screw Job

From the story here:

A widow was given ample notice before her $280,000 house was sold at a tax auction three years ago over $6.30 in unpaid interest, a Pennsylvania judge has ruled.

The decision last week turned down Eileen Battisti's request to reverse the September 2011 sale of her home outside Aliquippa in western Pennsylvania.

"I paid everything, and didn't know about the $6.30," Battisti said. "For the house to be sold just because of $6.30 is crazy."

Another story here says she owes a lot more than $6.30:

Tax records show that as of last week she has an outstanding balance of more than $20,000, including penalties and interest, for county, municipal and school taxes from 2009 to 2013.

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Beaver PA is the home of Boss Quay.

Papal iniquity: Let him who is without money among you cast the first stone

So the pope has tweeted that inequality is the root of social evil.

The redefinition of terms is startling, as if there were a difference between social evil and individual evil. The classic formulation from 1 Timothy 6 says the love of money is the root of all evil, so what we have here is a pope who is at best unanchored. According to Jesus, you cannot serve both God and Mammon.

Speaking of which, since the cost of Christian discipleship according to Jesus is personal poverty, when the fabulously wealthy papacy and the rest of the world's Catholics become as poor as the poor there will be reason to pay attention, but until then the pontweetification will remain just that, and disappear into the ether.

Next stop, an appearance on The Tonight Show?

New book details liberal disdain for the middle class

From Tom Bethell's review of it here:

Ortega y Gasset’s Revolt of the Masses was published in 1930, but don’t be misled—its author was hostile to the masses. They had attained “complete social power,” and he resented that. The masses “neither should nor can direct their own personal existence.”

Fred Siegel’s Revolt Against the Masses (Encounter Books) takes issue with Ortega and can be seen as a belated corrective. A bracing, well-written reinterpretation of liberalism, Siegel’s new book identifies a political trend that has been in place for decades, yet is rarely noticed or mentioned.

It is subtitled “How Liberalism Has Undermined the Middle Class.” Siegel calls them gentry liberals—our equivalent of old-fashioned Tories and every bit as class-conscious. In the 1960s they took up “the priestly task of de-democratizing America in the name of administering newly developed rights.”

His message, says Michael Barone, co-author The Almanac of American Politics, is that “the roots of American liberalism are not compassion but snobbery.” 

Secretary of State John F Kerry does The Mussolini

The end of oligarchy

Oligarchy ends when the few who rule us become so few in number that they eventually resolve into a singularity, known as tyranny.

Matthew Continetti Thinks He Ought To Hear One Of The Oligarchs Complain About The Oligarchy

Here, in The Washington Free Beacon:

If the business editors of the [New York] Times were aware of the irony of lamenting the political influence of great wealth on one half of their page while handling it with kid gloves on the other, they gave no sign. “Mr. Cohen says he understands the criticism that he has access most citizens do not,” says the article, before handing Cohen the microphone. “But I also don’t believe in unilateral disarmament,” he said. Two paragraphs earlier, he had said, “My priorities in political giving are Comcast priorities. I don’t kid myself. My goals are to support the interests of the company.”

There you have it: A wealthy Democratic donor admits he funds candidates to improve his bottom line. And yet I hear from the Senate floor no denunciations of his attempts to buy American democracy, no labeling of him as un-American. I have not received a piece of direct mail soliciting donations to fight David L. Cohen’s hijacking of the political process, nor do I wake up every day to investigations of the Cohen political and charitable network. Why?

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Matthew needs to re-read that George Orwell line with which he starts the story, get his nose out of the Times and aim it in the direction of the Congress:

“To see what is in front of one’s nose,” George Orwell famously wrote, “needs a constant struggle.” 

I'll say.

The whole point of representation is that it be adequate to the task of balancing the influence of competing interests which all from time to time display the same shortcomings of human nature. Continetti's faith in the goodness of the Senate is shockingly naive. It especially misses the fact that the oligarchy it itself constitutes works hand in glove with the oligarchy of business by which it was captured long ago after state legislatures lost their right of electing them. The founders wanted the Senate to be an oligarchy of the interests of the states qua states, balanced by a House of the people which grew in size as the country did, but we willingly gave that up long ago when Senators became popularly elected and Congressmen fixed their number based on the population level of the 1920 US Census. Now every important issue hangs in the balance depending on what just one or two men or women can do in government, as when a Biden, a McConnell or a Boehner, a Pelosi or a Reid brokers some deal to get legislation passed. And almost always bad legislation.

Talk about oligarchy. Wherever two or three are gathered together in the name of government these days, there is one.

It is counterintuitive that in order for the people to have more control of their government, government has to be bigger, just not the part that's already too big, which it is precisely because the part that isn't anywhere near big enough is as small as it is.

Repeal the 17th Amendment, and expand the US House to its constitutional proportions: 10,566. It won't be perfect. It's not a panacea. Some measure will have to be taken to preclude the House and Senate from doing what they did before in concentrating power in their few hands. But there is no other alternative if we are to rescue ourselves from the miserable few who now tyrannize us routinely, as with ObamaCare. If we don't, the next step is a true tyranny of one.