Resurrect Capitalism!

March 21, 2009

Cut Spending!!!

Filed under: Obama, bailouts, debt, politics, socialism — Tags: Obama idealist, Obama's debt — admin @ 8:16 am

In the Bush years Democrats made a lot of hay about the size of the Federal deficit and cumulative debt levels. I agree with those criticisms and think that it is irresponsible to increase government debt levels unless you have an overwhelmingly good reason to do so.

In 2004 then Representative Ramm Emanuel criticized Bush’s deficit in 2004 when it was a “paltry” $375B.

“The deficit is going to be a symbol of their credibility problem, and the budget is going to be the document we use” to make that argument, said Rep. Rahm Emanuel, D-Ill., a member of the House Budget Committee

In between the “stimulus” plan, endless bailouts, and ludicrously large budget plans Obama’s debt levels are unfortunately going to dwarf the Bush deficits.

President Barack Obama’s budget would produce $9.3 trillion in deficits over the next decade, more than four times the deficits of Republican George W. Bush’s presidency, congressional auditors said Friday.

Apparently Mr. Emanuel would not call this a “credibility problem”. We now see how hollow those Bush budget criticisms were. I think the true numbers would be worse than this as the budget assumptions do not assume plunging tax revenues, which is almost certain to happen.

I said previously that Obama is a dangerous man because he has never had to test his ideas against the constraints of reality. He is an unconstrained idealist. This is pretty evident with his reaction to the gargantuan debt levels his plans will saddle America with:

But Obama insisted on Friday that his agenda is still on track. “What we will not cut are investments that will lead to real growth and prosperity over the long term,” Obama said. “That’s why our budget makes a historic commitment to comprehensive health care reform. That’s why it enhances America’s competitiveness by reducing our dependence on foreign oil and building a clean energy economy.”

This guy seriously thinks that a “clean energy economy” (effectively subsidies on renewable energy and massive taxes on cheaper energy sources) is going to cause economic growth. He seriously thinks that massive government control of healthcare (more massive than the nearly 50% it already controls in America) is going to be a big growth boost.

Time to scale back the agenda, Mr. Obama. We are all limited in what we can do, no matter how badly we want it, and you are no exception. How much debt are we going to saddle our children with??? Fortunately it looks as though Democrats in Congress are not going to just follow his agenda. Let’s hope.

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March 20, 2009

Even Unions Hate Unions

Filed under: hypocrisy, unions — Tags: union hypocrites — admin @ 7:32 am

The SEIU (Service Employees International Union) is the most influential union in the nation. They agitate for many legal changes that would benefit union members at the expense of employers. Most notably, they are in full-force behind so-called “card check” legislation that would make it much easier for unions to form.

It might come as a surprise then that the SEIU does not extend to its own employees the same benefits and protections that it agitates for on behalf of its members. They are laying off a number of union members they employ and shifting work to contractors and temporary employees.

The Service Employees International Union, considered the most influential union in the nation, has notified the union that represents about 220 of the SEIU’s national field staff members and organizers that it is laying off 75 of the employees.

In return, the workers union, which goes by the somewhat postmodern name of the Union of Union Representatives, has filed charges of unfair labor practices against the SEIU with the National Labor Relations Board. The workers union’s leaders say that the SEIU is engaging in the same kind of practices that some businesses use: laying off workers without proper notice, contracting out work to temporary-staffing firms, banning union activities and reclassifying workers to reduce union numbers.

I’m not surprised at all. The SEIU is trying to do what any business does: control its costs. Of course when a business does this SEIU will say that it is greedily exploiting employees and do anything in its power to stop the cost cutting. But it’s OK for SEIU to layoff union members because this is a “special time”.

SEIU officials say the layoffs are part of a long-running plan to reallocate resources. Its national office will devote more of its resources to lobbying and communications in Washington to take advantage of Democrats’ ascendance. Most organizing would be left to local chapters, where officials say they have identified dozens of openings for the laid-off staff.

“This is not a financial issue,” said SEIU President Andy Stern. “We need to respond to the once-in-a-lifetime opportunity our members created by helping elect President Obama.”

The SEIU is reallocating its recources towards where it judges they will be most effectively implemented. If this is done to make a profit that is “bad”. If reallocating resources is done to increase the exploitations from companies that is “good”.

Hypocrites! This should be getting much more media attention.

“Do as I say, not as I do”, SEIU President & WEASEL Andy Stern

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March 18, 2009

Removing the Union Chokehold

Filed under: entitlements, unions — Tags: union busting — admin @ 11:18 am

I have been closely watching the bankruptcy proceedings of the city of Vallejo, California. It is a medium-sized suburb of San Francisco that found its finances shattered by this economic downturn. A major reason for its bankruptcy was its onerous public employee union contracts. Unions refused to renegotiate their contracts as the municipal finances collapsed.

Bankruptcy judge Michael McManus has ruled that Vallejo can void its union contracts as part of its restructuring. The repercussions of this could be huge… hugely POSITIVE for taxpayers!

“My understanding is that a lot of cities are watching this and particularly this motion,” said Woodruff. “If the city of Vallejo succeeds in using bankruptcy to void union contracts I am sure others will follow,” she said.

Vallejo attorney Norman C. Hile of Orrick, Herrington & Sutcliffe’s Sacramento, Calif. office said, “This is a decision that is somewhat groundbreaking.”

Of course the unions will challenge this ruling. Let’s hope the decision stands and public employee pay can be scaled back to more realistic levels everywhere. Public employee pension and benefit costs are a ticking time bomb and the sooner the bomb is defused the better off all taxpayers will be.

The entitlement mentality needs to be dismantled one piece at a time. Why should union members not suffer the same pain and grief that the rest of us are enduring in this downturn?

Somebody in California buy Judge McManus a beer!

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March 17, 2009

Growth of the Command Economy

Filed under: bailouts, politics, socialism — Tags: increasing socialism — admin @ 9:01 pm

The bad news keeps piling up for Capitalists. The central planners in our government are throwing their weight around more forcefully than ever.

Hybrid automobile sales have fallen off a cliff. This February the total number of hybrid sales were 2/3 less than in April of 2008. The market is clearly providing feedback: hybrids are not in demand. However, thanks to government intrusion into the auto industry via bailouts automakers now feel compelled to make hybrids to appease politicians.

…automakers feel they have little choice but to make more hybrids. Though car buyers are losing interest, politicians are pushing them as key to reducing U.S. dependence on foreign oil and limiting the global-warming gases Supply & Demand: Dead in the Auto Industry?that cars emit into the atmosphere.

In January, President Obama called on the industry to “thrive by building the cars of tomorrow” and prepare for federal and state regulations that could push average fuel economy above 40 miles per gallon by 2020.

“The automakers are in the situation of needing to pacify politicians that are in the position to bail them out with expensive fuel-efficient cars,” said Rebecca Lindland, auto analyst with IHS Global Insight. “But shouldn’t it be more about satisfying the needs of the American consumer?“

I couldn’t have said it any better myself. Obviously the only way the automakers will regain financial health is by making vehicles that people actually want to pay for. Instead they are making vehicles that socialist politicians like. “Supply and demand” has been transformed to “bailout and command”.

Let this be a lesson for CEO’s on the brink: accepting bailouts is the financial equivalent of selling your soul. You buy yourself some breathing time but you get a massive ball and chain clamped to your ankle. I feel no pity for executives who think they are taking the easy way out.

This is a chilling thought but the seeds of a command economy are planted.

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March 16, 2009

Stimulus Rage

Filed under: bailouts, capitalism, good news, turmoil — Tags: economic stimulus rage — admin @ 11:07 am

I’m pretty pissed off about the bailouts, “stimulus” plans, and other government distortions of the economy as of late. I’m happy to learn that many other people are as well. There have been a number of “tea parties” to protest these socialistic government plans. The biggest one I’ve heard of so far was in Cincinnatti this Sunday.

About 4000 people showed up. This is pretty good for a conservative oriented protest that spread through word of mouth.

Wish I was there...

Some great quotes from the article:

Five-year-old Kaylee McChesney posed for pictures. Her tongue-in-cheek “Where’s my free pony?” sign attracted lots of attention.

Her mom, Lisa, said she’s concerned that Kaylee’s generation will be left on the hook for “today’s excessive government spending.”

“It’s going to overshadow her entire life. As a parent, I think this is unconscionable. Now is the time to do something,” said McChesney, of Mason.

There were a few isolated stimulus supporters in the crowd.

Hoisting a “Spend, baby, spend” sign in the air, she said she agreed with the stimulus plan, although she knew Sunday she was far outnumbered.

“This is the worst economic crisis of our lives. We’ve got to do something.”

This perfectly demonstrates the panic-stricken thinking behind the bailouts. “Things are really bad and we’ve got to do something”. Why do “we” have to do anything? Why does “doing something” have to involve trillions of dollars that our children and grandchildren will be paying off all their lives? Why is it that the government allegedly has the ability to allocate capital better than freely interacting individuals in times of crisis? You can’t reason with someone like this stimulus supporter.

What those of us who support capitalism need to promote is the notion that government can’t and shouldn’t even attempt to solve many problems that it currently tries to fix. In the muddled thinking of the stimulus supporter the government can fix anything it wants. It wouldn’t matter if you showed her statistics of how poorly stimulus plans have fared historically. It wouldn’t matter if you showed her how economies survived and improved without explosions of government spending.

We need to somehow uproot the notion that government is the answer for all of life’s woes. How to do that, I do not know.

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March 14, 2009

Central Planning for Growth and Recovery?

Filed under: Obama, politics, socialism — Tags: Obama, politics, socialism — admin @ 6:52 am

A few days ago President Obama said to a group of businessmen that things in the economy are “not as bad as we think they are”. No one in the mainstream media called him out on that rather abrupt flip-flop from just last month:

Obama warned that failure to pass an economic recovery package could plunge the nation into an even longer, perhaps irreversible recession

Quite a startling contrast with his more recent statements.

But I digress. In this same meeting with businessmen President Obama has started to flesh out his vision for how to get the American economy moving and growing again. Being a socialist through and through it should be no surprise that Obama’s plans involve bigger government and bigger sums of money being spent.

“What we need to do is go back to fundamentals,” he said. “And that means driving our healthcare costs down. It means improving our education system so our children are prepared and we’re innovating in science and technology. And it means that we’re making this transition to the clean energy economy.”

On the surface these sounds like sensible remarks. But boiled down to essentials they will involve ever more bureaucracies consuming ever more massive sums of money.

How will Obama “drive our healthcare costs down”? Why, by increasing the governments role in healthcare. I can’t remember the last time the government subsidized anything and made it cheaper, but that’s just me. Obviously Obama doesn’t care about costs as much as having socialized healthcare. Most people would be surprised to learn that government spending comprises nearly 50% of all healthcare expenditures in this nation. How much more expensive will it get when the government’s share of healthcare funding increases, as it will surely do under the Obama administration?

Education, like healthcare, is another area where government interference has been massive and costs have increased much more rapidly than inflation. Of course Obama will never see this connection.

There are certainly things Obama could and should do to stimulate the economy but they don’t fit in with his socialistic vision. Make America a more appealing place to do business. Trim regulations. Allow people and businesses to keep more of their own time and money. Let people be free!

The economy will recover and the recovery will not by led by a man who has never been tested by market forces.

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March 9, 2009

Coexist ???

Filed under: Islam — Tags: Islam, stupid coexist sticker — admin @ 6:24 am

Yesterday was a beautiful day today in Massachusetts- it actually cracked 50 degrees Fahrenheit. So I went jogging and I saw not one but two cars with those annoying “Coexist” bumper stickers.

You’ve almost certainly seen them before:

dopey_coexist

I did a little digging to see what some of the symbols stand for.

Every letter has a symbol that represents a system of thought: The crescent and star for Islam; the pentagram for Wicca; the relativity formula for science; the star of David for Judaism; the Karma Wheel dotting the i for Buddhism; the Tao symbol for Taoism; the cross for Chrisitianity.

To better assess how well the belief systems do in fact “coexist” I put together a “coexistence matrix”. A red cell in entry (i,j) indicates that the belief system from row “i” fails to peacefully coexist with the belief system from column “j”. A green cell indicates that the same two belief systems succeed in peacefully “coexisting”.

coexistence_matrix

I find the bumper stickers to be irritating because everyone knows that all of the worlds belief systems peacefully “coexist” except for Islam. The rest of us hardly need lectures and smug bumper stickers about tolerance and the like from self-righteous folks.

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March 8, 2009

Obama is Killing the Economy With Uncertainty

Filed under: Obama, capitalism, psychology, turmoil, uncertainty — Tags: uncertainty — admin @ 7:25 pm

One of the reasons recessions turn into depressions is that people hesitate to commit their capital to new investments due to uncertainty. Right now credit is tightening up because people do not know the true extent of bad loan losses. It is unknown who is suffering losses and to what extent. The zeitgeist is one of panic and confusion.

One of the absolute worst things our government can do right now is to create more uncertainty. And yet that’s exactly what Obama is doing on multiple fronts. The problem is in trying to figure out how Obama’s bailouts, tax increases, changes in regulations, and modifications to social programs will affect businesses.

Many health care stocks are down because of fears of new government restrictions and mandates as part a health care overhaul. Private student loan providers were pounded because of the increased government lending role proposed by Obama. Industries that use oil and other carbon-based fuels are being shunned, apparently in part because of Obama’s proposal for fees on greenhouse-gas polluters [NOTE: greenhouse gases are not pollution!].

The obvious expectation is that Obama’s actions will harm all of these industries. But nobody can have a firm estimate of how badly Obama’s programs will damage the industries in question because nobody knows what legislation will pass. Why commit your precious funds to a particular investment that could be wiped out with a new law or a bureaucrat’s whim?

I see an economic stalemate forming, just like during the Great Depression when people with capital hesitated to invest it due to massive uncertainty.

Obama’s endless bailouts are also creating massive uncertainty. Investors are staggered by the sums being alloted and are wondering where the money will come from. Inflation seems to be the most likely way to finance them. Of course inflation devalues a currency and the plausible specter of it creates additional uncertainty.

Many deficit hawks also worry that the trillions of federal dollars being doled out by the administration, Congress and the Federal Reserve could sow the seeds of inflation down the road, whether the measures succeed in taming the recession or not. The money includes Obama’s $3.6 trillion budget and the $837 billion stimulus package he signed last month.

So in addition to creating uncertainty with tax increases and new programs and regulations that threaten to strangle entire industries the “stimulus efforts” are creating uncertainty in our currency.

The best thing for our government to do would be to get out of the way and let the market sort out the winners and losers. Let the insolvent entities go bankrupt and separate the healthy parts of banks from the cancerous divisions. Of course this is not a painless process and the bailout recipients are heavily invested in lobbyists.

At least some Republicans are recognizing that eternal life support is short-circuiting the market feedback. Republicans will be back in power but they first need to rediscover their free market roots. A fantastic quote from Senator John McCain:

“The best thing that could probably happen to General Motors, in my view, is they go into Chapter 11,” Senator John McCain said on the “Fox News Sunday” program today.

The automaker could reorganize and renegotiate its labor contracts to come out “stronger, better, leaner,” McCain, from Arizona, said.

Why couldn’t McCain have said this during his campaign? [In my opinion one of the worst things McCain did during his presidential run was to "suspend" his campaign and throw his full support behind the TARP bailout]. Bankruptcy was created for a reason. What Obama doesn’t seem to understand is that bankruptcy is not synonymous with liquidation. Just because a company goes bankrupt does not mean that it will no longer exist.

At this point everyone who is paying attention knows that Obama is a socialist. He is a very dangerous man- he’s an idealist with an immense amount of power who has never tempered his plans against the constraints of reality. The question (and source of uncertainty) is, how far will he be able to enact his agenda? That is the fundamental unknown.

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March 7, 2009

Rewarding Irresponsibility

Filed under: bailouts, injustice, socialism — Tags: bailouts, injustice, socialism — admin @ 9:13 pm

The Obama administration is intent on rewarding the irresponsible members of our society. This includes irresponsible borrowers and irresponsible lenders. Resentment is building up among the responsible.

Lenders who steered away from reckless lending are now being forced to bailout their reckless peers. As you might guess they are not happy about this prospect.

TCF Financial Corp., the Wayzata, Minnesota-based bank that never made a subprime loan and hasn’t lost money since 1995, is asking why it should help clean up the mess made by Wall Street.

“I’m kind of bitter,” said William Cooper, chief executive officer of the 448-branch bank, adding that over the years TCF has invested about $1 billion in the Federal Deposit Insurance Corp.’s fund that guarantees bank deposits. “We pay for the excesses of our competitor over and over again.”

The FDIC fees keep increasing. If we were capitalists the bankers like William Cooper would be scooping up market share as the irresponsible giants stagnated or failed. Instead we allow those most responsible for this economic crisis to survive, even profit from being so incompetent that they would cause politically unacceptable fallout if they failed.

In every segment of our economy those who pull their own weight and live with the consequences of their actions are forced to socialize the losses of the irresponsible. This is NOT RIGHT! This is a grave injustice that will have devastating long-term consequences.

Another important observation here: Obama and other socialists are insisting that our economy has no life. But institutions like TCF Financial Corp- not a small lender by any means- is alive and well without any government support. Actually government support is hurting it as TCF is forced to subsidize its rivals.

This is not capitalism that we are living under.

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March 6, 2009

A Symptom of Financial Illiteracy

Filed under: Obama, capitalism — Tags: capitalism, Obama — admin @ 11:03 pm

This Wednesday Obama said in a speech:

“Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it”

This is a small gaffe but at the same time it is very telling. Anyone who has ever paid attention to financial markets knows that Obama meant to say “price to earnings ratio”. Maybe community organizing isn’t good economic experience after all.

economically clueless

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