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Posts Tagged ‘Economy’

The Funniest Guy in America

I was a little bereft of blog inspiration this morning when I saw this op-ed by Treasury Secretary Tim Geithner:   “Welcome to the Recovery.”

Hahahaha!

I seriously do not think I’ve seen anyone nearly so incompetent, overpromoted, and out of touch with reality until, well, until the last time I took a serious look at Obama.  And if these two think they’ll convince millions of broke, unemployed, underemployed, “under water,” and hurting Americans that they’re in a recovery simply through words and sleight of hand, they are seriously mistaken.

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Wall Street Bill

I obviously haven’t read the new bill, nor do I know all its details, but I do know that the new financial reform does relatively little to prevent the use of leverage or get rid of the prop desk or do much else that would be needed to take away banks’ (particularly investment banks’) incentives to take huge risks with other people’s money.  The current incentives to do so create systemic risks for the economy and the banks’ depositers.  Since many deposits are FDIC insured, this creates huge risk for the rest of us.  Under the bill, Fannie Mae and Freddie Mac will remain on lifesupport status, courtesy of massive and continuing subsidies.  The circumstances under which bailouts take place will remain murky and likely, with Obama types at the helm, continue to involve Chicago-style decisionmaking, i.e., patronage and small ball politics.

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Brief Update

I’ve been in process of moving cities.  I haven’t forgotten you dear readers.  This weekend the home internet is getting hooked up, and I’ll be back to regale you with the usual stuff.  My brief recap of the week:

Iraq is still a hell hole, and if this is “success” we should pull up the chocks on Afghanistan today.

Economy still looking bad.

Kagan is a leftist and an extremist, but also witty and likable, and this is why she’ll be confirmed.  Indeed, this may be why Harvard Federalist Chapter liked her:  she had a sense of fair play and liked the exchange of ideas.

Thank you WASPs for letting us displace you (at the NY Times of course).  We won’t return the favor for the next up and coming group of people looking to displace us, of course.

Ammo on sale at ammunitiontogo.com.  1000 rounds .223 for $200.   What a way to celebrate Second Amendment Supreme Court victory this week, which was expected after Heller, but a nice triumph after all my years disarmed by Daley’s thugs in Chicago.

Al Gore has gone from enviro-crazy to possible criminal.  A lot of folks are sugegsting this is beyond the realm of possibility–and to me it’s equally likely this woman is an opportunist engaged in high stakes blackmail–but, then again, the sexual passions can be strong and overwhelming even for people otherwise successful.  Look at Eliot Spitzer or Bill Clinton.  Plus, Al Gore seems to have become very angry and nasty after the 2000 election.  Anything’s possible.  What a fitting denoument for the Clinton administration if this comes to pass.

I’m hopping mad that Obama’s felaty to unions and myopic concern for peacetime environmental regulations is keeping effective, foreign, non-union oil skimming vessels from assisting in the Gulf of Mexico.

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Impending Eurozone Collapse

The guys at Absolute Return Partners outdo themselves in this month’s letter on the various reasons Europe is totally screwed on account of mixing unequal regimes, huge levels of debt, and the chimera of European unity.

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The rudderless Democratic leadership in Washington is grandstanding on the AIG affair in typical and predictable fashion.  But the whole thing is a charade, a distraction.  Obama and the House Democrats are playing a big game of three card monte.  We’re all supposed to be angry about $160mm in bonuses–and I am indeed angry about this, as I am annoyed about the whole principle of bailouts-while forgetting that AIG was given $160B by the government that in turn was given by AIG to Goldman Sachs and various foreign banks under various CDS contracts.  The whole sum is money from taxpayers to formerly rich people turned welfare cases.  And we’re supposed to get mad about this smallish amount of money–.1% of the bailout funds AIG received–that AIG was obliged to pay out in contracts to employees. The bonuses are the equivalent of a rounding error compared to the scale of the bailouts and stimulus packages as a whole.

Even worse, this show trial of AIG’s CEO is happening on the very day the Federal Reserve announced that it will depart from its prior practice and will now be buying long term treasuries outright to the tune of $1T!!! This is printing money folks, a confiscation from all of us.  The Federal Reserve’s actions takes from wealth-holders and our children in particular in order to keep this ponzi scheme of big government spending and fiat currency going as long as possible while avoiding the reckoning that Greenspan’s loose money policy has wrought.

The government is spending with abandon, but they want us all to think that a few measly bonus checks from a basket-case pass-through entity are the problem.  It’s exactly what I’d expect from the likes of the corruption-ridden Barney Frank and the Chicago shakedown artist  Barack Obama.

Bailouts are bad for many reasons.  But the two worst are that they cost a ton of money, and, second, they get government in bed with business.  As a result, we’re becoming increasingly numb as a people to the idea that a $1T here and a $1T there is no big deal, just as we’re getting used to the idea of the government has any business directing how private companies should spend their money.  The bailout is an anti-capitalist virus that attacks our public finances and our commitment to corporate independence.  We must let these companies fail or we’ll destroy free market capitalism.  That is the real systemic risk.

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I thought Mitt Romney’s op-ed opposing the Detroit bailout had the right combination of free market instincts, industry knowledge, patriotic compassion, and credibility. It reminded me of why I voted for him.  I say that as someone who recognizes the unfairness of bailing out Wall Street while letting this strategically important industry suffer.  But there’s no reason to throw good money after bad.  The Unions have screwed themselves, management has done little more than make excuses, and the only way to get it right is a “cut to the bone” slashing of workers, debt, and other costs in a Chapter 11 proceeding.  I don’t buy the criticism that Chapter 11 is the death of GM or Ford, not least b/c the actual products are decent enough and warranties can always be exempted from the stay, something that occurs routinely in manufacturers’ bankruptcies.  But without changing their cost structure, all these companies are dead, to our collective detriment as their well-paid workers do not have skill sets that can be easily transferred, and there are a lot of reasons America should be making its own cars.

This bearish report by Gerald Celente predicting tax riots and mass homelessness rivals my own bearishness and, sadly enough, comes from a guy that has been right on everything from the Panic of 2008 to the Asian Financial Crisis of 1997.

This analysis of the ebb and flow of “idealism” in American politics was interesting. Some of my favorite homeboys like Burke and Oakeshott make an appearance.  I’m glad the author noted that Obama is at best a pragmatist but, more likely, a purveyor of washed up 60s-era Welfare-statism.  One thing I wish Obama and his supporters would remember is that deficit spending is not wealth-creating, the government rarely “invests” right, and that all this money for bailouts to failed sectors and infrastructure and healthcare must be siphoned out of the healthy parts of the economy, which risk suffocation under the burden of “spreading the wealth around.”

The David Brooks thing on the “formerly middle class” is depressing, but worth absorbing.   I’ve met more such people (or people on the brink) in the last 12 months than I have in my entire life previously.

On a related note, I perused gunbroker.com recently. It’s the ebay of gun buying.  Colt 6920s are now going for $1700.  CMMG, STAG, and other generic M4s are north of $1000.  Thirty round PMAGs have crept north of $20, though they were previously available for about $14.  Ammo prices remain ridiculous, in spite of the drop in commodity prices.  This panic will probably last a while, both from the fear that Obama, the former Brady Campaign/Joyce Foundation board member, will make guns now available banned forever and untransferrable to boot.  I think the overall conditions also suggest fear of increasing crime, disorder, and Depression-era conditions.  My gut instinct on this is reinformed by the ridiculous premiums over spot–20-30%–for silver and gold coins.

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If America lurches towards dictatorship, it will be more with a whimper than a bang. We won’t need to fear secret police so much as the oppressiveness of mass conformity, social pressure, the siphoning of wealth, and the spread of “official” viewpoints. I realize Americans’ fears of one’s political opponents assuming dictatorial powers are a bit overwrought and overdone. Neither W, Bush Senior, Clinton, nor Reagan was in any real sense a potential dictator, even though all three were reviled and feared by many opponents. Nonetheless, with the perspective of time, we see that their imagery, styles, goals, and personalities were American through and through.

The times and the place create the leader, and our post-religious, meaning-starved society more than ever wants atonement, purpose, and passion. The Obama message to white and black alike has resonated.  To the former he promises forgiveness, to the latter, dignity and power.  But his style, his words, and the imagery of his campaign are all new, whether in the form of enormous adoring crowds or the creepy posters. Coupled with an existing economic crisis and the Bush administration expansion of executive power, Obama certainly could move us in a very bad direction from which it would be very difficult to return to ordinary, constitutionally limited government.  Some of the brakes we take for granted will be absent.  Obama can cry racism, for instance, in the casual, insinuating way he did in his primary campaign against Hillary Clinton.  Further, his supporters and his support is both intense and untethered to specific actions.  It is hard to imagine that Obama will be forced to deflect the kind of criticism Bush has been subjected to from the right. By 2004, Bush was widely treated by conservatives as a mere magistrate and widely defended simply as the lesser of two evils.

The best analog would probably be someone like the Four Term leader, FDR, who retained a cult-like level of respect long after his death among working class survivors of the Great Depression. In reading a collection of contemporary essays, I was struck by the prescience and continuing relevance of the following passage by Herbert Agar:

Our real danger is from people like the late Huey Long, or the amiable Doctor Townsend. If fascism comes to America, it will not come as the result of a comic-opera putsch in which Wall Street buys an ex-general of Marines to lead a march on Washington. It will come as it came to Europe, as a revolt of the lower middle class, of the people who want to be self-respecting proprietors, but who find themselves-dispossessed–proletarian in fact, but not in feeling. These people are easy game for the demagogue, for the man who will promise them the moon and promise it quickly, who will tell the desperate middle class the the problem of making them all kings, or all financially independent, is perfectly simple.

If the middle class is sufficiently desperate, it will vote the demagogue into power. And when the demagogue comes to power, he will find that his ‘age of plenty’ is not so easy to provide. At that point fascism is born. At that point the demagogue, threatened with a breakdown of the whole economic system, turns to the Lords and Masters whom he has been abusing, and makes a deal.  The demagogue stays in office and keeps the people quiet.  The Lords and Masters stay in power and run the economic systems just the way they ahve always wanted to run it.  The corporate State is monopoly-capitalism made safe, monopoliy capitalism with the whole power of society behind it.

The economic bailout rammed through Congress will give Obama and his future treasury secretary incredible leverage over every sector of the economy.  Apparently “helping” our basket case auto industry is now on the agenda, but everything will have a catch:  obeissance to whatever faddish idea Obama has about giving his constituents a fair deal, anti-free-market environmentalist extremism, and who knows what else.  The worst thing about this will be that Bush’s corporate welfare was always rightly labeled as such by genuine free market critics.  Obama will have his mass movement in his corner, denouncing critics as retrograde special interests and uncompassionate failures.  He’ll tie the passions of young people with the most small-minded and short-sighted indulgences in mercantalism.  Judging by the way he handled things in Chicago and on the campaign trail, don’t expect kid cloves from The One, especially when he’s pursuing bad policies that help the connected few at the expense of the many.

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