Will Generation “Gimme” Work for the American Dream?

The short answer: No. The propaganda is succeeding. The Enlightenment notion of Life, liberty, and Property laid out in the Declaration of Independence and the Constitution has given way to the entitlement society.

Michael O'Leary: EU Gadfly and Low Cost Innovator of Ryan Air

Michael O'Leary is a man to be emulated. If more CEO types spoke out about regulatory burdens and corporate taxes, we might start to see a popular revolution. O'Leary's frustration is not unique to the airline industry, either. The frustration with regulatory zeal goes across a great swath of industries.

Let's be honest. Some CEOs love regulations. The biggest industry players know that regulations are barriers to their industry. Regs become a cost of doing anti-competitive business. But there are still a lot of CEOs out there who get it. They are tired of trying to make life better for customers wearing straightjackets. They are tired of being tax collectors for bureaucrats -- and passing the costs onto their customers.

Via Ideas Matter

JIB JAB Year in Review

The Legacy of North Korean Communism

While many in the OWS crowd are longing for a Communist takeover of the United States so all the nation's wealth can be distributed equally among the comrades, they would be well instructed to look economic legacy of the two Koreas. The chart above shows another comparison of the economies of North and South Korea, based on data from Angus Maddison. Between 1950 and the early 1970s, real GDP per capita in South Korea was exactly the same as in North Korea. As South Korea implemented market reforms, its economy and output per person started consistently rising while economic conditions to the north stagnated. After forty years of market-based growth, real GDP per capita is now about 17.5 times higher in South Korea compared its norther neighbor.

Night on the Korean Peninsula

Grouch: So shouldn't the OWS crowd be protesting against crony capitalism and excessive government intervention in the economy in favor of more free market reforms for their own future prosperity and success?

Cartoon of the Day: Corzine

Chris Davis and David Winters on Wealthtrack

Two investors from the Ben Graham and Warren Buffett school of value investing appear on WealthTrack this week. Chris Davis shares three generations of investment lessons he is applying at the Davis Funds. Wintergreen Fund’s David Winters explains his market and peer beating global strategies.

Forget College? Become an Entrepreneur?

Do you agree with Peter Thiel? I do for those handful of people who have the drive, confidence and genius to make their visions a reality, but I think these types of people are few and far between, and the right path for most people is to go to college and take the "safer" road to prosperity.

Kurt Vonnegut: On The Shape of the Story

A Very Buffett Christmas

For those of us who own Berkshire Hathaway stock and want to contribute to the company's success with our Christmas purchases, the question always arises what is the best way to do that. Here are some suggestions from the Grouch:

1. See's Candies -- great gifts for work colleagues who have a sweet tooth.
2. Helzberg Diamonds -- don't know to get for your significant other, you can't go wrong with diamonds.
3. Tony Lama boots -- want to bring out the inner cowboy in some suburbanite yuppie, these are the perfect gift.
4. The Pampered Chef -- for those who want to feel like royalty in the kitchen.
5. Ginzu Knives -- to bring out the inner samurai.  
6. Decadent Desert Sauces from The Pampered Chef -- a must for every Santa.
7. Worldbook Encyclopedias -- not sure why anyone would buy these in the age of the internet, but there might be some folks who these appeal to.
8. Campbell Hausfeld Power Tools -- you can pick these up at Home Depot or Lowes for your special handyman.
9. Clayton Homes sustainable living -- manufactured, eco-friendly housing for those in need of a new place to live.
10. Russell Outdoors Camouflage Hunting Gear -- for the avid hunter.
11. Fruit of the Loom undies -- no comment needed.
12. Wells Lamont Work Gloves -- for the tough, work-outdoors types.
13. Forest River RV -- for those who like take scenic driving vacations.
14. Spaulding Basketball and Backboard -- for the future NBA star.
15. Brooks Running Shores -- for those who like to stay fit and trim.
16. Borshiems Christmas Tree Ornaments -- for those who take special pride in their holiday decorations.
17. Berkshire Hathaway Activewear Collection -- polo shirts, etc., with the Berkshire logo, for true Berkshire fans.

This is only a sampling of the products offered by Berkshire Hathaway.  It is possible to pick up all your Christmas gifts from Berkshire Hathaway companies and not even realize it.

Quote of the Day: Kevin Williamson

“I simply do not know where the money is, or why the accounts have not been reconciled to date.” Let’s translate that Jon Corzine quote into Latin, engrave it in stone, and make it the official motto of Congress. Anybody remember that this Wall Street Democrat used to sit on the Senate committees on banking and the budget?

Question: Why should we believe that the motives of people in (cough, cough) “public service” are different from the motives of people in the for-profit sector? Was Jon Corzine a rapacious self-seeker at Goldman Sachs, then a public-spirited man when he was in the Senate and in New Jersey’s governorship, only to revert to form when he went to MF Global? If you doubt that this is true, and suspect that Jon Corzine was the same guy all along, why would you want to give government more power?

~ Kevin Williamson, from ‘I Simply Do Not Know Where the Money Is’

Grouch: The only good thing about the MF Global meltdown is that the government did nothing, and finally let a financial firm reap the consequences of its poor decision making and lack of risk management. This is the way Capitalism is supposed to work.

Why Obama's Stimulus Failed: A Case Study of Silver Spring, Maryland

From Reason TV:

High, persistent unemployment and a sluggish economy underscore what all but the most-dedicated supporters of Barack Obama know to be true: The president's 2009 stimulus program was a massively expensive bust.

Understanding why the stimulus failed is an important step in understanding how the government can—and cannot—goose economic recovery. To get a better sense of how and where the stimulus went wrong, Reason.tv focused on Silver Spring, Maryland, a suburb of Washington, D.C., that's home to a large number of government contractors and other recipients of money earmarked for the sorts of "shovel ready" projects that were going to bring the economy back to life.

President Obama's top economic advisor Larry Summers laid out ground rules for how stimulus dollars should be spent: The funds must be "targeted" at resources idled by the recession, the interventions must be "temporary," and they needed to "timely," or injected quickly into the economy.

None of that turned out to be true. "Even if you were to believe that government spending can trigger economic growth," says Veronique de Rugy, Reason columnist and senior research fellow at the Mercatus Center, "the money is never spent in a way that's consistent with the conditions laid out by the Keynesians for it to be efficient."

Reason.tv identified four basic ways in which the stimulus was doomed almost before it was put into operation.

Government Contracts: More of the Same

According to proponents, an effective stimulus program must put idle resources back to work. A particularly bad way to go about this is to give money to big government contractors to do more of what they're already doing.

Yet that's what happened in downtown Silver Spring, where $138 million dollars in stimulus grants and contracts went to 46 organizations. Just three firms took home a majority of the money. These three firms—Synergy Enterprises, Senior Service America, and Social & Scientific Systems—were major government contractors before the stimulus was signed. In fact, these firms received a combined $71 million in stimulus funds. Over that same period, they got $702 million in other government contracts, according to USASpending.gov.

So the stimulus money was like icing on the cake. Take Palladian Partners, a communications firm in Silver Spring that's received $97.5 million dollars in government contracts over the past 12 years. The National Insitutes of Health (NIH), which is Palladian's biggest client, tacked $363,760 stimulus dollars on to an existing contract, and then followed it with two more awards totaling $431,333. Palladian was to spend the money collecting and disseminating information about how the NIH was spending stimulus money.

Palladian was well paid for its work, but with the project 80 percent complete, its main activities have included building a website, and publishing 29 short articles for the site. The stimulus grant went to hire two new employees, neither of whom was unemployed before coming to Palladian. That's no way to jumpstart the economy.

Infrastructure: Money for Nothing

President Obama said the stimulus bill would put nearly 400,000 people back to work rebuilding America. But over the next two-and-a-half years, the U.S. construction industry shed about 900,000 jobs or 14 percent of the building workforce.

In Maryland, the "specialty trades," a subset of the construction industry that handles big infrastructure projects, has lost 8 percent of its total, which amounts to 8,000 jobs. Maryland's Department of Transportation says stimulus money for transit projects has steadily paid the salaries of only about 600 construction workers since the middle of 2009.

Why didn't Maryland's $771 million stimulus dollars for transit infrastructure have a bigger impact on the state's economy?

Partly because Gov. Martin O'Malley cut infrastructure spending more than enough to offset any gains from the stimulus. Maryland’s Transportation Trust Fund generally pays for highway repairs by collecting a special gas tax and other user fees. After the stimulus money was available, Governor O’Malley raided the trust fund by diverting $861 million over the next three years to help balance the state's budget, according to information provided by Maryland's Department of Legislative Services. After you account for the $771 million in stimulus money, state funding for transit infrastructure saw a net decrease of $90 million. That sort of scenario played out in all sorts of ways in all sorts of states: Stimulus dollars were used to cover general expenses rather than to increase overall spending.

The Green Jobs Fiasco

The stimulus bill set aside $500 million for a program to train and recruit people for the new green economy. The program promised to place 80,000 people in so-called green jobs. The grant period is more than half over, and the program has placed only 8,000 people in jobs, according to a report by the Department of Labor's Inspector General.

In downtown Silver Spring, a union-backed organization called the International Transportation Learning Center got $5 million in stimulus dollars partly to recruit thousands of new workers and train them in new "green job" skills. But because transit workers already face low unemployment and low turnover and the new jobs weren't materializing, the group is instead using the entire grant to teach new skills to workers who already have jobs.

"The spirit of the stimulus shouldn't be to get people who already have jobs to get more money to do the same thing, just bigger," says de Rugy. Under stimulus theory, she says, "government spending should be going to places where unemployment is very high, going to people who are poached from unemployment lines."

Weatherizing Homes: Not So Shovel Ready

According to the Keynesian theory that undergirds it, stimulus spending must be spent quickly to be effective. By Barack Obama's own testimony, one of the most "shovel-ready" stimulus programs was supposed to be a $5 billion program to weatherize 590,000 homes around the country.

But the weatherization program started off as a slow-moving, dismal failure. According to a February 2010 report by the Department of Energy's Inspector General, only 8 percent of the weatherization money had been tapped in the program's first year.

In Silver Spring, Gov. O'Malley held a press conference at the home of Sonja and Richard Lowery in June 2009. It was the first home in Maryland to get weatherized with stimulus money. The program was underway. And then it nearly ground to a halt. In the first year, Maryland weatherized only 279 homes, or 4 percent of its goal.

The main holdup was a concession to organized labor that the "prevailing wage" rules apply to programs funded by stimulus dollars. That meant weatherization workers had to earn at least the average wage in their area for the particular work they were hired to do. Before workers could be paid, Maryland (and every other state) spent months conducting surveys to determine average wages and benefits for workers weatherizing homes in every county.

Today Maryland is racing to spend the remainder of its weatherization money before it’s forced to forfeit what’s left in early 2012.

"The main lesson of the stimulus is that creating jobs is a very complex process," says de Rugy, "and certainly it can't be directed by a top down institution that pretty much fails at everything it does."

Supply and Demand: A Thug Story

Cartoon of the Day: Net Worth Since 2008

Charlie Ellis on Wealthtrack

Charlie Ellis, author of Winning the Loser's Game and The Elements of Investing, gives his views on investing and indexing.

Walter E. Williams: Do Corporations Pay Taxes?

Professor Williams says no. Corporations are but tax collectors. The idea of lowering corporate taxes would make the occupiers howl with rage. But as Professor Williams says: people pay taxes. That is, you and I do in the form of higher prices and lower returns in our 401ks.

Even if we could agree on the level of collection/revenue necessary to keep basic government services going, it would be far more efficient to collected taxes through other means. For example,a consumption (sales) taxes is far easily to collect, but I wold only support that if the 16th amendment was repealed. A dual national income tax and sales tax would put the US firmly on the road to Europe (if it isn't already).

Note: United States corporations pay the 2nd highest tax rates in the world. No wonder CEOs are moving their companies overseas and sheltering their dollars offshore.

Milton Friedman: The Aftershock Doctrine

In spite of the ravings of folks like Naomi Klein and her Shock Doctrine Theory, the impact of Milton Friedman's ideas are still being felt around the world today (though sadly, not nearly enough in the U.S.) Consider these examples:

• Hong Kong -- as Johan Norberg suggests in the clip above, Friedmanite policies still hold sway in the world's wealthiest city state.
• Estonia -- Estonian president Mart Laar read Free To Choose and considered it his handbook once he became Prime Minister. Laar says it was his first contact with Western economics. Estonia is the wealthiest, fastest growing post-communist country in Eastern Europe.
• Chile -- The Chicago Boys (economists) who studied under Friedman at Chicago helped usher Chile into an age of prosperity. Today is the most prosperous country in South America and the only South American country in the OECD.

Milton Friedman is still making impact. His aftershocks will be felt long into the 21st century.

Land of the Freebies

Death to Pennies

Chuck Woolery Launches Unoccupy Wall Street Movement

Quote of the Day: Burton Malkiel

Artificially low interest rates are a subtle form of debt restructuring and represent a kind of invisible taxation. Today, the 10-year U.S. Treasury bond yields 2%, which is below the current 3.5% headline (Consumer Price Index) rate of inflation. Even if inflation over the next decade averages 2%, which is the Federal Reserve's informal target, investors will find that they will have earned a zero real rate of return. If inflation accelerates, the rate of return will be negative.

~ Burton Malkiel, from The Bond Buyer's Dilemma

Grouch: I couldn't agree with Dr. Malkiel more. The odds of inflation equaling or exceeding 2% over the next 10 years are pretty high. Treasuries are a very unappealing investment at the moment. I am staying away from Treasuries in my portfolio.

America's Vast Energy Resources

Environmental scholar Steven Hayward exposes how U.S. energy policies have restricted access to America's vast energy resources. The result? America is less competitive in the world, energy prices are skyrocketing, and the economy is suffering. The United States must open federal lands to exploration and end the regulatory blockade that keeps shale oil and gas out of our reach. To read the North American Energy Inventory study Dr. Hayward's video is based on, go here.

Executive Summary:

• North America is blessed with enough energy supplies to promote and sustain economic growth for many generations. The government’s own reports detail this, and Congress was advised of our energy wealth when the Congressional Research Service of the Library of Congress released a report showing that the United States’ combined recoverable oil, natural gas, and coal endowment is the largest on Earth.
• The amount of oil that is technically recoverable in the United States is more than 1.4 trillion barrels, with the largest deposits located offshore, in portions of Alaska, and in shale in the Rocky Mountain West. When combined with resources from Canada and Mexico, total recoverable oil in North America exceeds 1.7 trillion barrels.
• That is more than the world has used since the first oil well was drilled over 150 years ago in Titusville, Pennsylvania. To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves. For comparative purposes, the technically recoverable oil in North America could fuel the present needs in the United states of seven billion barrels per year for around 250 years.
• Moreover, it is important to note that that “reserves” estimates are constantly in flux. For example, in 1980, the U.S. had oil reserves of roughly 30 billion barrels. Yet from 1980 through 2010, we produced over 77 billion barrels of oil. In other words, over the last 30 years, we produced over 150 percent of our proved reserves.
• Restrictions in the form of federal bans and leasing combined with declining offerings of lease acreage mean only about 2.2 percent of America’s offshore acreage is currently leased for production.
• Proved reserves of natural gas in the United States and throughout North America are enormous, and the total amount of recoverable natural gas is even more impressive. The EIA estimates that the United States has 272.5 trillion cubic feet of proved reserves of natural gas. The total amount of natural gas that is recoverable in North America is approximately 4.2 quadrillion (4,244 trillion) cubic feet.
• Given that U.S. consumption is currently about 24 trillion cubic feet per, there is enough natural gas in North America to last the United States for over 175 years at current rates of consumption.
• Total supplies of natural gas in North America dwarf those of other countries. The United States, Canada, and Mexico have more technically recoverable natural gas resources than the combined total proved natural gas reserves found in Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan.
• With respect to total recoverable resources, however, North America’s combined coal supplies are even more staggering. The United States, Canada, and Mexico have over 497 billion short tons of recoverable coal, or nearly three times as much as Russia, which has the world’s second largest reserves. North America’s recoverable coal resources are bigger than the five largest non-North American countries’ reserves combined (Russia, China, Australia, India, Ukraine).
• North American recoverable coal could provide enough electricity for the United States for about 500 years at current levels of consumption.
• While the US and North America contain enormous energy wealth, US policies have increasingly made exploration, development, production and consumption of that energy more difficult.
• Therefore, a scarcity of good policies, not a scarcity of energy, is responsible for US energy insecurity.

Live Like There is No Tomorrow

Some awesome photography

Wall Street On Trial

Another great video from Andrew Klavan that exposes the hypocrisy on both sides of the Wall Street debate. Socialism for everybody! It's exciting how the idea of crony capitalism and all of its negative impacts is starting to work its way into the thinking of the public. Great civilizations fall due to the dynamics in this cartoon. Hopefully, the electorate will wake up and keep the pressure on Washington until there is real change, not the phony stuff we see today. I don't see real change happening until real money is taken out of the hands of the master crony capitalists in DC.

Does This Commercial Convince You to Buy Gold?

Multi-touch Glass Keyboard and Mouse

Jason Gidding’s stunning Multi-Touch Glass Keyboard and mouse has surpassed its Kickstarter funding goal of $50,000 for prototype, tooling and pre-production of the device. I hope to see it one day in the near future in my local Wal-mart or Best Buy. It will be refreshing to have a non-Windows or Apple centric keyboard.

Abandoned windmills in Hawaii: When the Tax Dollars Dry Up, The Turbines Stop Turning

Click to Enlarge

Despite billions in taxpayer subsidies pumped into the so-called “green-energy” industry, almost 15,000 windmills — maybe more — have been left to rot across America. And while the turbines have been abandoned over a period of decades, the growing amount of “green junk” littering the American landscape is back in the headlines again this week.

Across the country, subsidized wind farms are meeting increasing resistance — and not just from taxpayers and electricity consumers forced to foot the bill. "If wind power made sense, why would it need a government subsidy in the first place?” wondered Heritage Foundation policy analyst Ben Lieberman, who deals with energy and environmental issues. “It's a bubble which bursts as soon as the government subsidies end."

It turns out that wind power is expensive and inefficient even in the best wind-farm locations in the world. And regular power plants always need to be on standby in case there is no wind, not enough wind, or even too much of it — a fairly regular occurrence.

That is why, when the tax subsidies run out, the towering metallic structures are often simply abandoned. In their wake: a scarred landscape and dead wildlife — the very same ills offered as justifications by administration officials for preventing oil exploration.

~ Alex Newman, from Wind Turbines & “Green” Subsidies Under Fire

Paul Tudor Jones at the Robin Hood Heroes Breakfast

Paul Tudor Jones speaks at the Robin Hood Heroes Breakfast on the poverty of opportunity in the nation, economic inequality and the imperative of helping those in need:

Paul Tudor Jones II- 2011 Heroes Breakfast from Robin Hood on Vimeo.

Clarifying OWS for OWSers

Few protest groups exhibit more ignorance over what they are protesting than the OWS crowd. Is there something there to protest against? You bet, but none of them that I've seen can present a coherent argument about what is broken and how to fix it that goes beyond simplistic platitudes and propaganda. This video helps clarify what the OWSers should be protesting against, and where the problems truly exist. Will the taxpayers ever get their money back from Fannie Mae, Freddie Mac, GM and AIG? Only time will tell, but my bet is that the taxpayers will eat some massive losses on these companies.

6 Paradoxes

The Tax Mess Deepens

Click to Enlarge

As Congress and the Administration struggle to come up with any kind of fiscal policy other than spend, spend, spend, a number of tax increases will kick in over the next two years:

Expiring in 2011
• 2% Social Security payroll-tax cut for employees
• Alternative minimum tax patch
• IRA charitable contribution for people older than 70½.

Expiring in 2012
• Bush tax cuts of 2001 and 2003.
• top tax rate on wages reset to 39.6% from 35%
• top rate on long-term capital gains to 20% from 15%
• Special 15% rate on dividends
• estate-tax provisions.
• 10 million lower-income families and individuals restored to the tax rolls

These additional revenues may help the deficit, at least be prepared to hear that the argument from the mainstream media, but recent history shows that Congressional spending increases will outstrip any increases in revenue.  That looks like a trend no one is willing to stop.

Chuck Woolery Cuts $1.2 Trillion From the Budget

Game show host Chuck Woolery shows the not-so Super Committee how to get the job done. If we were serious about preventing economic collapse, we wouldn’t be asking what to cut from the federal budget, but rather what not to cut.

Charlie Rose Interviews Seth Klarman

The first 18 minutes is about "Facing History", his nonprofit organizaiton. Then they turn to his book of "Margin of Safety". Klarman's discusses his view of Warren Buffett's three stages of investing:

1. Buy cigar butts at good prices.
2. Buy great companies at great prices.
3. Buy great companies at so so prices.

Klarman thinks that his own personal investing strategy is still at stage 1.

TEDx Talk: The Next Big Shift in the Internet

"The next big shift in the Internet is now, and it’s not what you think: Facebook is the new Windows; Google and Windows must be sacrificed. Ten years from now we will interact with the Internet in completely different ways. In this TED talk, Roger McNamee identifies six changes that are already transforming the ways we consume and create content."

The Real Story of the First Thanksgiving

This article originally appeared in 1985 in The Free Market and is from the Mises Institute.

The Great Thanksgiving Hoax

by Richard J. Maybury

Each year at this time school children all over America are taught the official Thanksgiving story, and newspapers, radio, TV, and magazines devote vast amounts of time and space to it. It is all very colorful and fascinating.

It is also very deceiving. This official story is nothing like what really happened. It is a fairy tale, a whitewashed and sanitized collection of half-truths which divert attention away from Thanksgiving’s real meaning.

The official story has the pilgrims boarding the Mayflower, coming to America and establishing the Plymouth colony in the winter of 1620-21. This first winter is hard, and half the colonists die. But the survivors are hard working and tenacious, and they learn new farming techniques from the Indians. The harvest of 1621 is bountiful. The Pilgrims hold a celebration, and give thanks to God. They are grateful for the wonderful new abundant land He has given them.

The official story then has the Pilgrims living more or less happily ever after, each year repeating the first Thanksgiving. Other early colonies also have hard times at first, but they soon prosper and adopt the annual tradition of giving thanks for this prosperous new land called America.

The problem with this official story is that the harvest of 1621 was not bountiful, nor were the colonists hardworking or tenacious. 1621 was a famine year and many of the colonists were lazy thieves.

In his History of Plymouth Plantation, the governor of the colony, William Bradford, reported that the colonists went hungry for years, because they refused to work in the fields. They preferred instead to steal food. He says the colony was riddled with “corruption,” and with “confusion and discontent.” The crops were small because “much was stolen both by night and day, before it became scarce eatable.”

In the harvest feasts of 1621 and 1622, “all had their hungry bellies filled,” but only briefly. The prevailing condition during those years was not the abundance the official story claims, it was famine and death. The first “Thanksgiving” was not so much a celebration as it was the last meal of condemned men.

But in subsequent years something changes. The harvest of 1623 was different. Suddenly, “instead of famine now God gave them plenty,” Bradford wrote, “and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God.” Thereafter, he wrote, “any general want or famine hath not been amongst them since to this day.” In fact, in 1624, so much food was produced that the colonists were able to begin exporting corn.

What happened?

After the poor harvest of 1622, writes Bradford, “they began to think how they might raise as much corn as they could, and obtain a better crop.” They began to question their form of economic organization.

This had required that “all profits & benefits that are got by trade, working, fishing, or any other means” were to be placed in the common stock of the colony, and that, “all such persons as are of this colony, are to have their meat, drink, apparel, and all provisions out of the common stock.” A person was to put into the common stock all he could, and take out only what he needed.

This “from each according to his ability, to each according to his need” was an early form of socialism, and it is why the Pilgrims were starving. Bradford writes that “young men that are most able and fit for labor and service” complained about being forced to “spend their time and strength to work for other men’s wives and children.” Also, “the strong, or man of parts, had no more in division of victuals and clothes, than he that was weak.” So the young and strong refused to work and the total amount of food produced was never adequate.

To rectify this situation, in 1623 Bradford abolished socialism. He gave each household a parcel of land and told them they could keep what they produced, or trade it away as they saw fit. In other words, he replaced socialism with a free market, and that was the end of famines.

Many early groups of colonists set up socialist states, all with the same terrible results. At Jamestown, established in 1607, out of every shipload of settlers that arrived, less than half would survive their first twelve months in America. Most of the work was being done by only one-fifth of the men, the other four-fifths choosing to be parasites. In the winter of 1609-10, called “The Starving Time,” the population fell from five-hundred to sixty.

Then the Jamestown colony was converted to a free market, and the results were every bit as dramatic as those at Plymouth. In 1614, Colony Secretary Ralph Hamor wrote that after the switch there was “plenty of food, which every man by his own industry may easily and doth procure.” He said that when the socialist system had prevailed, “we reaped not so much corn from the labors of thirty men as three men have done for themselves now.”

Before these free markets were established, the colonists had nothing for which to be thankful. They were in the same situation as Ethiopians are today, and for the same reasons. But after free markets were established, the resulting abundance was so dramatic that the annual Thanksgiving celebrations became common throughout the colonies, and in 1863, Thanksgiving became a national holiday.

Thus the real reason for Thanksgiving, deleted from the official story, is: Socialism does not work; the one and only source of abundance is free markets, and we thank God we live in a country where we can have them.

What to be Thankful For in the Land of Evil Capitalism: 25 Wonderful Trends of the 20th Century

Click to Enlarge

Shatner's Frying Club

The Hidden Infrastructure of the Internet

OWS Pictures of the Week

Zuccotti Love

Obviously an English major. Maybe someone should tell him the Government nationalized the student loan program a while back.

A little rest and relaxation on a cold day.

Looking at the world through rose-colored glasses.  Why can't we all be dreamers?

Applying deodorant.

Cheered on by the troops.

Cheered on by Wall Streeters.

Hypocritical "Patriotic Millionaires" Demand Congress Raise Their Taxes But Won't Voluntarily Pay More

Washington — "Two dozen “patriotic millionaires” traveled to the Capitol on Wednesday to demand that Congress raise taxes on wealthy Americans.

The Daily Caller attended their press conference with an iPad, which displayed the Treasury Department’s donation page, to find out if any of the “patriotic millionaires” were willing to put their money where their mouth is."


Grouch: Are their reactions not 100% predictable? And supremely hypocritical? What fool would give the government extra money that he wasn't forced to give? The name of the game is to pay the government as few taxes as legally possible because you know they are going to do a bunch of stupid and wasteful things with the money. Better to keep it and grow a business that employees more people or give it to a low overhead charity who will the dollars are put to good use.

Smackdown: Rep. Bachus vs. Peter Schweizer

Rep. Bachus responds to Peter Schweizer and 60 Minutes:




Peter Schweizer responds to Rep. Bachus:

(Evil) Profits

Elvis has Left the Building

The last of the mutual fund rock stars, Bill Miller of Legg Mason Value Trust, has decided to give up active management of that fund in the near future to assume the role of Chief Investment Officer.

Bill Miller became a household name and his fund, a member of many 401k plans, amid a 15-year streak of beating the S&P 500, beginning in the early 1990s. But in recent years reversion to mean has punished Miller run funds and their shareholders mightily.

Some might argue that the era of the mutual fund and superstar stock pickers have gone the way of AOL, one of the stocks Miller built his reputation on. Ultimately, Miller's gunslinging twist on value investing was unable to match his past superior performance due to his love of financial stocks and an expense ratio of over 1.76% at a time when certain ETFs and index funds are charging as little as .07% in fees.

Five Lessons for America from the European Fiscal Crisis

The five lessons she identifies are:

1. Higher taxes lead to higher spending, not lower deficits. Miss Morandotti looks at the evidence from Europe and shows that politicians almost always claim that higher taxes will be used to reduce red ink, but the inevitable result is bigger government. This is a lesson that gullible Republicans need to learn – especially since some of them want to acquiesce to a tax hike as part of the “Supercommitee” negotiations.
2. A value-added tax would be a disaster. This was music to my ears since I have repeatedly warned that the statists won’t be able to impose a European-style welfare state in the United States without first imposing this European-style money machine for big government.
3. A welfare state cripples the human spirit. This was the point eloquently made by Hadley Heath of the Independent Women’s Forum in a recent video.
4. Nations reach a point of no return when the number of people mooching off government exceeds the number of people producing. Indeed, Miss Morandotti drew these two cartoons showing how the welfare state inevitably leads to fiscal collapse.
5. Bailouts don’t work. This also was a powerful lesson. Imagine how much better things would be in Europe if Greece never received an initial bailout. Much less money would have been flushed down the toilet and this tough-love approach would have sent a very positive message to nations such as Portugal, Italy, and Spain about the danger of continued excessive spending.

The only thing I think she left out is that the private sector needs to grow faster than government, which, sadly, hasn't happened for quite a while, and doesn't seem to be in the cards for the near term.  The current cast of characters seem hellbent on increasing the power and influence of government over individuals.

Time Lapse Photography from the International Space Station

Earth | Time Lapse View from Space, Fly Over | NASA, ISS from Michael König on Vimeo.

Time lapse sequences of photographs taken by Ron Garan, Satoshi Furukawa and the crew of expeditions 28 & 29 onboard the International Space Station from August to October, 2011, who shot these pictures at an altitude of around 350 km.

Shooting locations in order of appearance:

1. Aurora Borealis Pass over the United States at Night
2. Aurora Borealis and eastern United States at Night
3. Aurora Australis from Madagascar to southwest of Australia
4. Aurora Australis south of Australia
5. Northwest coast of United States to Central South America at Night
6. Aurora Australis from the Southern to the Northern Pacific Ocean
7. Halfway around the World
8. Night Pass over Central Africa and the Middle East
9. Evening Pass over the Sahara Desert and the Middle East
10. Pass over Canada and Central United States at Night
11. Pass over Southern California to Hudson Bay
12. Islands in the Philippine Sea at Night
13. Pass over Eastern Asia to Philippine Sea and Guam
14. Views of the Mideast at Night
15. Night Pass over Mediterranean Sea
16. Aurora Borealis and the United States at Night
17. Aurora Australis over Indian Ocean
18. Eastern Europe to Southeastern Asia at Night

What Does Unhate Mean?

What does unhate mean?  UN-hate or stop hating altogether?  I'm not really sure, and this ad campaign, besides grossing me out, is not exactly presenting a clear and compelling message.

The Washington Post reports:

The Benetton has dropped the image of the Pope kissing an Imam from the campaign after complaints.

Benetton returns to its controversial marketing roots with a new campaign that features President Obama and other world leaders engaging in a kiss. In two separate ads, Obama is seen kissing Venezuelan president Hugo Chavez, and Chinese President Hu Jintao.

The Unhate Foundation, founded by the Italian clothing company, is an advocacy group for tolerance. The controversial ad campaign is an attempt for Benetton to regain its status from the “United Colors” ads that regularly shocked viewers with subjects that had nothing to do with clothing: A priest kissing a nun, a man dying of AIDS, a just-born baby with umbilical cord still attached, a trio of real human hearts.

In the new campaign, the leaders of North and South Korea lock lips, and the Pope kisses Ahmed Mohamed el-Tayeb, the Imam of al-Azhar mosque in Egypt. The Vatican condemned the image, and the company decided to remove it from all publications after complaints. German Chancellor Angela Merkel smooches Nicholas Sarkozy, president of France (What will Carla Bruni think?). Palestinian President Mahmoud Abbas and Israeli Prime Minister Benjamin Netanyahu also share a kiss. The campaign was inspired by a kiss between Soviet leader Leonid Brezhnev and East German communist leader Erich Honecker in 1979.

A Random Act of Journalism: How Congress Critters Enrich Themselves

A random act of investigative journalism occurred last night on CBS's 60 minutes. In case you missed it, I've embedded the video below:



(CBS News) -- "Martha Stewart went to jail for it. Hedge fund honcho Raj Rajaratnam was fined $92 million and will go to jail for years for it. But members of Congress can do the same thing -use non-public information to make stock trades -- and there's no law against it. Steve Kroft on "60 Minutes" reports on how America's lawmakers can legally make tidy profits on information only they know, simply because they won't pass a law against themselves.

If senators and representatives are using non-public information to win in the market, it's all legal says Peter Schweizer, who works for the Hoover Institute, a conservative think tank. He has been examining these issues for some time and has written about them in a book, "Throw them All Out." "Insider trading laws apply to corporate executives, to Americans...If you are a member of Congress, those laws are deemed not to apply," he tells Kroft. "It's really the way the rules have been defined... lawmakers have conveniently written them in such a way as they don't apply to themselves," says Schweizer.

Efforts to make such insider trading off limits to Washington's lawmakers have never been able to get traction."

Update:  A 2011 research article in the journal Business and Politics ("Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives") found that the stock portfolios of House of Representative members outperformed the overall stock market by 55 basis points per month, or 6.6% on an annual basis between 1985 and 2001, suggesting that lawmakers have a "substantial informational advantage" over the general public and even over corporate insiders.

Grouch: I thought the 60 Minutes piece was much less scathing than it could have been and should have been. Corruption in Congress and Government in general runs deep in both parties. This was a surface treatment of the issue. treading lightly around the problem. I would have expected a more penetrating report from this reputable news organization. For a deeper look at the problem see Government Gone Wild! -- How Congressmen Enrich Themselves While in Office.

CLICK HERE TO SEE MORE

Michael Moore's Vacation Hovel

Michael Moore: "Capitalism did nothing for me. The system is not set up to help somebody from the working class."

Grouch: When Michael Moore is not stepping out of his multi-million dollar dwelling in NYC to urge the OWS croud to rage on against capitalism and greed, he spends time relaxing over a copy of the Communist Manifesto, Mao's Little Red Book of The Collected Works of V.I. Lenin in this squalid hovel on the shores of Torch Lake, Michigan---one of the most elite communities in the United States. He is indeed a true revolutionary and a man of the people.

A Sister’s Eulogy

Here's how Steve Job's sister eulogized him.  A reminder of what is important in life.

The Big Oil Quiz

1. ExxonMobil produces 2 million barrels of oil per day of worldwide.  In addition to its own production, Exxon also purchases crude oil at the market rate for its global refining network.  How much oil does Exxon buy every day at the prevailing market rate?
a. 500,000 barrels
b. 1 million barrels
c. 3 million barrels
d. 5 million barrels

2. Local, state and federal gasoline taxes average roughly 49 cents per gallon nationally, and are as high as 67 cents per gallon in California and New York.  What amount of profit does ExxonMobil earn per gallon of gasoline sold? 
a. 65 cents per gallon
b. 45 cents per gallon
c. 25 cents per gallon
d. 8 cents per gallon 

3. More than 75% of ExxonMobil’s operating earnings come from outside the United States. What percent of ExxonMobil's workforce is based in the United States?

a.  20%

b. 40%

c. 60%

d. 80% 

4. ExxonMobil is the world’s largest publicly traded oil company. What percent of the world’s oil reserves does it actually control?
a. Less than 1 percent
b. 2 percent
c. 5 percent
d. 10 percent 

5. What percent of the world's oil reserves do America's "Big Oil" companies control?
a. 3 percent
b. 6 percent
c. 12 percent
d. 18 percent 

6. In the first half of 2011, ExxonMobil paid $6.7 billion in tax expenses in the U.S. What were ExxonMobil's operating earnings for that period? 
a. $20 billion
b. $7 billion
c. $5.5 billion
d. $3.5 billion

Find the answers here.

The Grouch's bonus question:  Who gouges their customers more and reaps windfall profits, Exxon-Mobil or Apple Computer?

HT: Carpe Diem

A Painful Truth

Quote of the Day: Warren Meyer

If the very rich got that way through special access to government power, then why is the solution to tax them more, and not just to reduce government power?

And if the very rich got that way through hard work and innovation, then why the hell are we proposing to take resources out of these people’s hands?

~ Warren Meyer

Several Interviews with William Bernstein

Take Risks in Stocks, Not Bonds


What Looks Cheap Right Now


Precious Metals: Time for Fear, Not Greed


William Bernstein, author of several classic investment books The Four Pillars of Investing, The Investor’s Manifesto, is interviewed by Christine Benz of Morningstar about a variety of timely investment topics.

Peter Schiff vs OWS

USA, Inc.: Where We Are, How We Got Here, What May Be Next

There's a lot of info packed into the long presentation. May only be suitable viewing for hardcore policy wonks.

Phantom Water

PHANTOM WATER EDIT from Chris Bryan on Vimeo.

Quote of the Day: ABC News

At a million-dollar San Francisco fundraiser today, President Obama warned his recession-battered supporters that if he loses the 2012 election it could herald a new, painful era of self-reliance in America.

“The one thing that we absolutely know for sure is that if we don’t work even harder than we did in 2008, then we’re going to have a government that tells the American people, ‘you are on your own,’” Obama told a crowd of 200 donors over lunch at the W Hotel.

“If you get sick, you’re on your own. If you can’t afford college, you’re on your own. If you don’t like that some corporation is polluting your air or the air that your child breathes, then you’re on your own,” he said. “That’s not the America I believe in. It’s not the America you believe in.”

ABC News, from Obama: If We Lose in 2012, Government Will Tell People ‘You’re on Your Own’

Grouch: All I can say is thank goodness the country wasn't founded on self-reliance and individual responsibility. Who cares about life, liberty and the pursuit of happiness as long as Big Brother is there to take care of us. That's all that counts...... (Side note: Kind of ironic Obama is at the "W" hotel soliciting money.....)

Cartoon of the Day: The 1%

The Wal-Mart Education System

But who has three hands to count this high?

Free or Equal: How Friedman Freed Man

Quote of the Day: Russ Roberts

Occupy Wall Street reminds me of a doctor who sees a patient with a broken arm, decides that both arms are broken, and proceeds to amputate them: The diagnosis is half right, and the cure may be worse than the disease.

Start with the diagnosis. "Us against them" always makes for good theater. But is the big problem with the American economy really the top one percent versus the rest of us? Are we being victimized by the fat cats? The data seems undeniable. The share of income going to the top one percent has risen dramatically over the last 40 years. If the top one percent have more, surely the rest of us have less, right? But as the writer P.J. O'Rourke has said, wealth is not a pizza. If we're sharing a pie, and you get a bigger piece, that does not mean that I have less to eat. It depends on what happens to the size of the pizza. Ten percent of an enormous pizza is more filling than all of a tiny one.

The protesters are right about one thing: Washington has been coddling Wall Street. But they have missed the most important way that Wall Street lives off the rest of us. Programs like the Troubled Asset Relief Program of 2008 are red herrings. TARP did send $700 billion to Wall Street, but most of it has been paid back.

There is a much more important, albeit quieter, favor Washington has been performing for Wall Street over the last 25 years: When large financial institutions get into trouble, policymakers make sure that their creditors receive 100 cents on the dollar.

The economist Milton Friedman liked to point out that capitalism is a profit-and-loss system. Profits encourage risk-taking. Losses encourage prudence, which is just as important. Over the last 25 years, however, government policy has been laissez-faire when it comes to profits, and socialist when it comes to creditor losses. That is a very destructive cocktail. It has encouraged imprudent risk-taking financed with large amounts of borrowed money. When you subsidize recklessness, you unsurprisingly get a lot more of it.

The bailouts of large creditors -- such as the 1984 rescue of Continental Illinois, the 1995 rescue of Mexico, and the 1998 government-orchestrated attempt to save the creditors of Long-Term Capital Management -- sent a signal to large lenders that they might lose little or nothing if the investments they fund go bust. That in turn made lenders much less cautious, allowing financial institutions to use borrowed money, rather than their own capital, to finance the housing boom.

Using borrowed money instead of equity lets you keep the upside for yourself. Such an arrangement is always appealing. But why did lenders accept such risks when they do not share in the upside, especially when the investments were increasingly risky? Part of the reason is that government created expectations that lenders might get their money anyway.

~ Russ Roberts, from Occupy Wall Street and Washington's History of Financial Bailouts: Why We Need More Capitalism, Not Less

120 MPH Ford Focus Crash Test

I certainly won't be driving my Focus 120mph anytime soon. Not sure it can even obtain those speeds.

The Personification of Big Government--- The Adult Baby

Stanley Thornton Jr. was cleared of fraud allegations by the social security administration, and continues to live off of his social security check that he receives due to his "disability."

The Washington Times reported:

The California man who lives part of his life as an “adult baby” and collects Social Security disability payments says the federal agency has cleared him of wrongdoing and will continue sending checks.

Stanley Thornton Jr. now wants an apology from Sen. Tom Coburn, the Oklahoma Republican who called for the benefit review because the investigation disrupted the final months of life for his roommate Sandra Dias, who playacted as his mother, spoon-feeding him and helping him into his baby clothes until her death in July.

“We recently reviewed the evidence in your Social Security disability claim and find that your disability is continuing,” the agency said in an August letter that Mr. Thornton posted on the website he maintains to document his adult baby lifestyle.

Mr. Thornton first gained prominence after he appeared on a reality television show and later after Mr. Coburn asked for the Social Security Administration to investigate him. The lawmaker questioned why he was receiving taxpayer-funded Supplemental Security Income (SSI) payments, commonly called disability checks, given the woodworking skills he demonstrated in May on the National Geographic channel television show “Taboo.”

Dias died July 7, and Mr. Thornton moved out of the apartment they shared.

Quantum Locking

Equality from a Different Perspective

Hey, it's only fair that my pub band should get paid the same as U2.  We've worked really, really hard on our U2 cover tunes.... sound just like them.

Nassim Taleb on Wall Street Protest, Banking

Nassim Taleb, author of "The Black Swan" and a New York University professor, discusses the "Occupy Wall Street" protest and his view of the global banking system, including how to apply the principles of "Hammurabi's Code" to the banking system. I think applying "Hammurabi's Code" first to the politicians would result in a more satisfying outcome across the entire economic spectrum of activities.

As Allan H. Meltzer said: "Capitalism without failure is like religion without sin. Bankruptcies and losses concentrate the mind on prudent behavior."

Sovereign Debt Champions

Dorian Electra: Roll With The Flow

Dorian Electra has done a fantastic job of communicating the basic lessons of Austrian Economics in, well, a single song. She covers:

• Subjective value - One person's trash is another's treasure.
• Human action (in circumstances of time and place) - Your economic behavior is unique and perspectival.
• Knowledge problem, as well as problems of quantification and measurement - Macroeconomic models are pretty much useless.
• Unseen costs - Big digs and boondoggles mean foregone opportunities for growth.
• Bottom up versus Top Down - The collective behaviors of individual actors on the ground make up the economy (not aggregate demand).

Via: Ideas Matter

Quote of the Day: Ron Alsop

When Gretchen Neels, a Boston-based consultant, was coaching a group of college students for job interviews, she asked them how they believe employers view them. She gave them a clue, telling them that the word she was looking for begins with the letter "e." One young man shouted out, "excellent." Other students chimed in with "enthusiastic" and "energetic." Not even close. The correct answer, she said, is "entitled." "Huh?" the students responded, surprised and even hurt to think that managers are offended by their highfalutin opinions of themselves.

If there is one overriding perception of the millennial generation, it's that these young people have great -- and sometimes outlandish -- expectations. Employers realize the millennials are their future work force, but they are concerned about this generation's desire to shape their jobs to fit their lives rather than adapt their lives to the workplace.

~ Ron Alsop, from The 'Trophy Kids' Go to Work

Economic Freedom and Quality of Life

The Green Jobs Answer Man

Quote of the Day: Thomas Sowell

To believe in personal responsibility would be to destroy the whole special role of the anointed, whose vision casts them in the role of rescuers of people treated unfairly by “society.”

~ Thomas Sowell, from The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy

Quote of the Day: Peter Wallison

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis....

Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.

The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.

~ Peter Wallison, from Wall Street's Gullible Occupiers