Nuggets of Optimism from the Berkshire Hathaway Annual Report

"Last year – in the face of widespread pessimism about our economy – we demonstrated our enthusiasm for capital investment at Berkshire by spending $6 billion on property and equipment. Of this amount, $5.4 billion – or 90% of the total – was spent in the United States. Certainly our businesses will expand abroad in the future, but an overwhelming part of their future investments will be at home. In 2011, we will set a new record for capital spending – $8 billion – and spend all of the $2 billion increase in the United States.

Money will always flow toward opportunity, and there is an abundance of that in America Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born (see chart above). The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead."

~ Warren Buffett

Gubment Work, California Style

The Only Chart You Need To See To Understand Why The US Is Screwed

Click to Enlarge

This chart comes from Business Insider.  Read Mary Meeker's full analysis here.


A more effective representation of the same data by the Coyote.

Friedman's 4 Ways to Spend Money

Friedman's own explanation:


This intuitive little matrix gets ordinary people thinking about who should control resources in society, why and how. To my mind, it goes along way towards countering Keynesian make-work notions that are pervasive among "experts" today. Common sense is not so common among our political leaders.

Consider also these quadrants in terms of healthcare spending. I'd group some of the major options as follows:

1. Patient-driven healthcare (HSAs).

2. American health insurance (PPOs).

3. Medical Philanthropy.

4. Single payer (that is, until it requires rationing).

HT: Ideas Matter

Kurzweil on Artificial Intelligence

Sunday Verse: Thomas Lux

Empty Pitchforks

          "There was poverty before money."

There was debtors’ prison before inmates,
there was hunger prefossil,

there was pain before a nervous system
to convey it to the brain, there existed

poverty before intelligence, or accountants,
before narration; there was bankruptcy aswirl

in nowhere, it was palpable
where nothing was palpable, there was repossession

in the gasses forming so many billion ... ;
there was poverty—it had a tongue—in cooling

ash, in marl, and coming loam,
thirst in the few strands of hay slipping

between a pitchfork’s wide tines,
in the reptile and the first birds,

poverty aloof and no mystery like God
its maker; there was surely want

in one steamed and sagging onion,
there was poverty in the shard of bread

sopped in the final drop of gravy
you snatched from your brother’s mouth.

~ Thomas Lux

Lewis and Clark Air Rifle

This gun, it could be said, changed the entire history of the United States

Have You Been Hacked?

Budget Battle Showdowns

Wisconsin. Ohio. Michigan. New Jersey. New York. Budget-battle showdowns are coming soon to a statehouse near you.

Thousands of angry school teachers, union members, and their sympathizers have descended on capitals to fight against reducing pay and benefits for public employees. The protesters are up against a new crop of governors who are hell-bent on spending cuts to deal with deficits that may rise to combined $125 billion in the next fiscal year.

Gov. Andrew Cuomo (D-N.Y.) is looking for public employees to pay $500 million towards benefits they’re currently receiving for free.

New Jersey's Chris Christie is proposing public employees pick up 30 percent of their health care premiums. Wisconsin's Scott Walker wants public employees to pay at least 13 percent of their health care premiums. And he wants state workers to start contributing to their retirements for the first time.

This newfound fiscal discipline comes after a virtually unchecked binge over the past 10 years during which state expenditures exploded by more than 80 percent in inflation-adjusted dollars, including big bumps in overall worker compensation.

The most controversial aspect of the budget battles deals with public-sector unions and collective bargaining. Wisconsin'sWalker and others argue that the current process is inherently stacked against taxpayers because the government isn’t spending its own money like companies in the private sector do. What’s more, taxpayers have no way of opting out of any agreement that’s reached. In the private sector, consumers can always take their business elsewhere. That’s the basic reason why progressives such as Franklin Roosevelt and labor legend George Meany were against unions for government workers.

In a world of super-tight budgets, it's a foregone conclusion that public-sector workers are going to have to give back compensation. Public school teachers make up the bulk of government employees in every state in the country and they already make 35 percent more in straight salary than their private-school counterparts. There's also a growing gap between what they get toward retirement and what private-sector professionals receive.

Teacher union leaders in Wisconsin and elsewhere now say that educators are willing to accept less compensation - just as long as nobody cuts the union out of the deal-making. Whatever the fate of public employee unions in this, the winter of our discontent, there's no question that teachers and other state workers are going to have to get used to making less.

That's not a total fix, much less a revolution, but it counts as real progress in a country where every state government has spent itself to the brink of bankruptcy.

Libertopia

Enter Libertopia, a documentary by director Christina Heller and producer Craig Goodale that follows three guys' attempt to make one state free. Heller sat down with Reason.tv's Ted Balaker to discuss the Free State Project, why she admires libertarians, and how a persuasive band of Free Staters just might have transformed her from a liberal into a libertarian.

The Free State Project was proposed by a Yale PhD student in 2001, and the goal was to convince 20,000 pro-liberty activists to commit to moving to New Hampshire in hopes of returning the state to its "Live Free or Die" roots. So far, the project reports that there are more than 10,000 participants, and almost 900 "early movers" have already settled in the Granite State.

The documentary follows one man who is walking across the country to raise awareness about the Free State Project, another who already moved to New Hampshire and works as an advocate for medical marijuana patients, and a Ron Paul-inspired teenager who decides to leave his friends and family in California to live in New Hampshire.

Fiscal Risk Index 2011

Souce: Maplecroft

Maplecroft just released its fiscal risk index for ranking of 163 countries. Europe trumps all other regions with 11 out of twelve countries rated as "extreme risk." However, quite surprisingly, only one PIIGS country--Italy which takes the top spot--is in the top 12.

One problem within Europe is that it has a low labor participation rate in the 65+ age bracket. In fact, the labor market participation of age 65+ amongst the ‘extreme risk’ nations ranges from 1.4% in France, 7.71% in UK, to 11.7% in Sweden, vs. a 28% average across all countries ranked in the index.

Although the United States is not ranked among the "extreme fiscal risk," the country is classified as "high risk", along with Spain, Australia, Canada, and Russia.

The dependency ratio in the U.S. is 22 in 2010, but is projected to climb rapidly to 35 in 2030, according to the U.S. Census Bureau, mainly due to baby boomers moving up into the 65+ age bracket. The ratio then will rise more slowly to 37 in 2050. The labor participation for age 65 and over in the U.S. is at 17.5 according to data at Bureau of Labor Statistics (BLS). This is better than most of the European countries, but below the overall average of 28%.

The Maplecroft study concludes

"...in high risk countries, it is increasingly likely that the private sector will be called upon to contribute in the form of pensions and private health care.... Without significant adjustments, such as raising taxes or reducing spending, countries risk going bankrupt."

A highly productive labor force and relatively young population makeup tend to mean sustainable prosperity and better odds at climbing out of a hole. So, while widespread protests are still going on in Europe over pension age being raised and many austerity measures, amid the European sovereign debt crisis, the U.S. and other countries in the same “high fiscal risk” could be the wave 2 of this global fiscal chain of events.

Grouch: I have always found it quite troubling that many US politicians have always held up the European socialist model as an example the US should follow. Notice where the concentration of red is on this map.

Quote of the Day: Johah Goldberg

Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order, the federal ban on government unions. Civil service regulations and similar laws had guaranteed good working conditions for generations. The argument for public unionization wasn't moral, economic or intellectual. It was rankly political.

Private sector unions fight with management over an equitable distribution of profits. Government unions negotiate with politicians over taxpayer money, putting the public interest at odds with union interests and, as we've seen in states such as California and Wisconsin, exploding the cost of government. The labor-politician negotiations can't be fair when the unions can put so much money into campaign spending.

This is why FDR believed that "the process of collective bargaining, as usually understood, cannot be transplanted into the public service," and why even George Meany, the first head of the AFL-CIO, held that it was "impossible to bargain collectively with the government."

~ Jonah Goldberg

HT: Carpe Diem

Interview With A Vampire… I mean RESPA Writer

Look at the fangs on this guy. Leave it to the vampires to come up with a way to beat the mortgage companies at their own game. They don't live forever without picking up some knowledge of the law over the centuries. ;-)

Spending Restraint, Part II: Lessons from Canada, Ireland, Slovakia, and New Zealand

Nations can make remarkable fiscal progress if policy makers simply limit the growth of government spending. This video, which is Part II of a series, uses examples from recent history in Canada, Ireland, Slovakia, and New Zealand to demonstrate how it is possible to achieve rapid improvements in fiscal policy by restraining the burden of government spending. Part I of the series examined how Ronald Reagan and Bill Clinton were successful in controlling government outlays -- particularly the burden of domestic spending programs.

Spending Restraint, Part I: Lessons from Ronald Reagan and Bill Clinton

Ronald Reagan and Bill Clinton both reduced the relative burden of government, largely because they were able to restrain the growth of domestic spending. The mini-documentary from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to show how Reagan and Clinton succeeded and compares their record to the Bush-Obama years.

Gas Prices Around The World

"Petrol prices in America are substantially below levels elsewhere in the rich world, and this is almost entirely due to the rock bottom level of petrol tax rates. The low cost of petrol encourages greater dependence; the average American uses much more oil per day than other rich world citizens. This dependence also impacts infrastructure investment choices, leading to substantially more spending on highways than transit alternatives. And this, in turn, reduces the ability of American households to substitute away from driving when oil prices rise.

There are any number of good reasons to raise the petrol tax rate. The current rate no longer brings in enough money to cover current highway spending. Petrol taxes are an efficient way to raise revenue, and the government needs revenue; President Obama's deficit commission recommended an increase in the federal petrol tax rate. Burning oil produces carbon emissions, and dearer fuel would reduce America's sky-high per capita carbon footprint. But a higher tax rate would also diminish the possibility that a sudden rise in oil prices would throw the economy into recession. That would be a nice risk to minimise! And yes, higher tax rates would hit consumers just like rising oil prices. But those prices are rising anyway; better to capture the revenue and use it, all while improving behaviour.

It's hard to take any fiscal hawk seriously so long as this measure isn't on the table. It's as close to a win-win solution as one is likely to find."

~ The Economist, Tax away vulnerability

Grouch: The Netherlands tops out the list at around $8 a gallon. This number is probably higher today considering the turmoil in the middle east and its impact on crude prices. The Economist seems very keen on advising the US how to fix its budgetary woes, and lord knows we need all the help we can get. The raising taxes solution always suffers from one major problem: the crowd in Washington can't control their spending and will offset any new dollars in tax revenue by on average $1.40 in new expenditures. Until this spending addiction is addressed and some charismatic political figure somewhere in either party actually shows some leadership and statesmanship, the US deficit problem will continue unchecked.

Quote of the Day: Warren Buffett

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

~ Warren Buffett, New York Times op-ed, October 16, 2008.

Porker of the Month for Feb. 2011!

Not so Great Moments in Economic and Political History

In this August 1971 speech, Richard Nixon takes action to "defend the American dollar" by closing the gold window and ending the Bretton Woods era. It is a masterpiece of political double-speak and concealed intentions, and signaled a multi-year decline in the value of the dollar against the currencies of our major trading partners. The Nixon administration gave those that followed a living example of how not to run an economy. In this speech you'll hear many of the familiar nameless demons wreaking havoc on the financial markets through speculation. It's like deja vu all over again.



HT: Kids Prefer Cheese

Quote of the Day: The Economist

IMAGINE you have developed a serious weight problem. Things have been going badly for you, and as a result you have been piling on the pounds; in the past three years your weight has ballooned by a shocking 10% a year. Your advisers all say that this will give you a heart attack: not immediately, but in the next decade or so. What do you do? Not many doctors would recommend a diet confined to items that make up only an eighth of your consumption (and were in any case often rather good for you), while slyly sticking to a plan to increase gradually the number of cream buns and cheeseburgers you eat every day. Yet that is exactly what Barack Obama has prescribed for the bloated American government....

Indeed, the real problem with both Mr Obama’s budget and the Republicans’ proposals is not so much the half-truths and fibs within them, as all the things they both left out. America needs to simplify its tax system and (slightly) increase its overall tax take. It needs to rein in its defence spending, which is currently equivalent to that of the next 20 countries combined. And it needs to tackle the gathering surge in entitlement costs. All these recommendations were made by the deficit-reduction commission that Mr Obama himself set up, but his budget conspicuously fails to take up any of them. Other debt-burdened Western countries have embarked on a stringent diet. America continues to gorge.

Why not show a little leadership? In a routine that is becoming depressingly familiar, Mr Obama’s camp argues that the time for these things is not yet ripe. Rather than set out any bold proposals of his own, the president would rather leave it to Congress. Once congressional Republicans and Democrats have found some common ground, he will work with them.

In fact, a small group of brave senators from both parties is already toiling away to just that end. But neither the president nor Republican leaders have had the courage to support them. In the absence of statesmanship, the chances are that only a crisis in the bond markets will provide the necessary impetus. Economic management by fiscal heart attack is not a very prudent remedy.

~ The Economist, The Latest Cop-Out

Grouch: All I keep hearing out of Washington are more ideas on how to super-size the debt, not how to cut back to the dollar menu. Investors, keep your US bond maturities short.

The Sad Tale of Borrow and Spend verses Save and Invest

1. According to the Washington Post, national, state and local debt in the United States will reach a level this year unseen since just after World War II, easily exceeding the size of the entire economy.
2. 40 cents of every dollar spent by the Federal Government is borrowed.
3. According to Gallup, the U.S. unemployment rate is currently 10.3 percent. When you add in part-time American workers that want full-time employment, that number rises to 20.2 percent.
4. According to the U.S. Bureau of Labor Statistics, the number of job openings in the United States declined for a second straight month during December.
5. There are currently more than 4 million Americans that have been unemployed for more than a year.
6. The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.
7. Gasoline prices in the United States recently hit a 28-month high, and are headed higher.
8. During the 4th quarter of 2010, 4.63 percent of all U.S. home loans were in foreclosure. That matched the all-time high, and it was up significantly from 4.39 percent in the 3rd quarter.
9. It is estimated that there are about 5 million homeowners in the United States that are at least two months behind on their mortgages, and it is being projected that over a million American families will be booted out of their homes this year alone.
10. Almost 14 percent of all credit card accounts in the United States are currently 90 days or more delinquent.
11. The average credit card rate in the United States had increased to a whopping 13.44 percent at the end of 2010.
12. Americans now owe more than $890 billion on student loans, which is even more than they owe on credit cards.
13. Average household debt in the United States has now reached a level of 136% of average household income. In China, average household debt is only 17% of average household income.
14. U.S. life expectancy at birth is now three years less than Canada and four years less than Japan.
15. New home sales in the state of California were at the lowest level ever recorded in the month of January.
16. 43 percent of all mortgages in south Florida are currently underwater.
17. Prior to the most recent economic downturn, there were usually somewhere around four to five million job openings in America. Today there are about 3 million.
18. When you adjust wages for inflation, middle class workers in the United States make less money today than they did back in 1971.
19. One out of every seven Americans is now on food stamps.
20. One out of every six elderly Americans now lives below the federal poverty line.

Many of these facts were culled from http://capoliticalnews.com, and are reflective of the transformation of the nation from the greatest generation which was born into the scarcity of the depression to the entitlement generation which was born into the plenitude of the post war boom. 

Images from Wisconsin and the Battle for Fiscal Sanity

Sunday Verse: James Dickey

Cherrylog Road

Off Highway 106
At Cherrylog Road I entered
The ’34 Ford without wheels,
Smothered in kudzu,
With a seat pulled out to run
Corn whiskey down from the hills,

And then from the other side
Crept into an Essex
With a rumble seat of red leather
And then out again, aboard
A blue Chevrolet, releasing
The rust from its other color,

Reared up on three building blocks.
None had the same body heat;
I changed with them inward, toward
The weedy heart of the junkyard,
For I knew that Doris Holbrook
Would escape from her father at noon

And would come from the farm
To seek parts owned by the sun
Among the abandoned chassis,
Sitting in each in turn
As I did, leaning forward
As in a wild stock-car race

In the parking lot of the dead.
Time after time, I climbed in
And out the other side, like
An envoy or movie star
Met at the station by crickets.
A radiator cap raised its head,

Become a real toad or a kingsnake
As I neared the hub of the yard,
Passing through many states,
Many lives, to reach
Some grandmother’s long Pierce-Arrow
Sending platters of blindness forth

From its nickel hubcaps
And spilling its tender upholstery
On sleepy roaches,
The glass panel in between
Lady and colored driver
Not all the way broken out,

The back-seat phone
Still on its hook.
I got in as though to exclaim,
“Let us go to the orphan asylum,
John; I have some old toys
For children who say their prayers.”

I popped with sweat as I thought
I heard Doris Holbrook scrape
Like a mouse in the southern-state sun
That was eating the paint in blisters
From a hundred car tops and hoods.
She was tapping like code,

Loosening the screws,
Carrying off headlights,
Sparkplugs, bumpers,
Cracked mirrors and gear-knobs,
Getting ready, already,
To go back with something to show

Other than her lips’ new trembling
I would hold to me soon, soon,
Where I sat in the ripped back seat
Talking over the interphone,
Praying for Doris Holbrook
To come from her father’s farm

And to get back there
With no trace of me on her face
To be seen by her red-haired father
Who would change, in the squalling barn,
Her back’s pale skin with a strop,
Then lay for me

In a bootlegger’s roasting car
With a string-triggered I2-gauge shotgun
To blast the breath from the air.
Not cut by the jagged windshields,
Through the acres of wrecks she came
With a wrench in her hand,

Through dust where the blacksnake dies
Of boredom, and the beetle knows
The compost has no more life.
Someone outside would have seen
The oldest car's door inexplicably
Close from within:

I held her and held her and held her,
Convoyed at terrific speed
By the stalled, dreaming traffic around us,
So the blacksnake, stiff
With inaction, curved back
Into life, and hunted the mouse

With deadly overexcitement,
The beetles reclaimed their field
As we clung, glued together,
With the hooks of the seat springs
Working through to catch us red-handed
Amidst the gray breathless batting

That burst from the seat at our backs.
We left by separate doors
Into the changed, other bodies
Of cars, she down Cherrylog Road
And I to my motorcycle
Parked like the soul of the junkyard

Restored, a bicycle fleshed
With power, and tore off
Up Highway 106, continually
Drunk on the wind in my mouth,
Wringing the handlebar for speed,
Wild to be wreckage forever.

~ James Dickey

Wisconsin Teachers Union vs Wisconsin Taxpayers--- Coming to a State Near You

Revolutions everywhere--in the middle east, in the middle west. But there is a difference: in the middle east, the protesters are marching for democracy; in the middle west, they're protesting against it. I mean, Isn't it, well, a bit ironic that the protesters in Madison, blocking the state senate chamber, are chanting "Freedom, Democracy, Union" while trying to prevent a vote? Isn't it ironic that the Democratic Senators have fled the democratic process? Isn't it interesting that some of those who--rightly--protest the assorted Republican efforts to stymie majority rule in the U.S. Senate are celebrating the Democratic efforts to stymie the same in the Wisconsin Senate?

~ Joe Klein, Wisconsin: The Hemlock Revolution

The difference, of course, is that in Egypt the protesters were marching to get rid of a public-sector kleptocracy, while in Wisconsin they are marching to preserve one.

~ Marc Thiessen

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.

~ Franklin Delano Roosevelt

Governor Walker on what will happen if his proposals are not passed: It means 5,500 state workers would be laid off. It means anywhere from 5,000- 6,000 local employees would have to be laid off. That’s anywhere from 10,000 to 12,000 people in a time when we have a 7.5% unemployment rate. We can’t afford to have anyone laid off. I’m trying to save jobs.

The states are not the Federal government. They cannot paper-over their irresponsible spending by printing money. Most governors are mandated by their constitutions to have a balanced budget each year. As governors and legislatures have to make the tough choices this year don't be surprised if more of these type protests don't arise. Perhaps even in your state.

Watson's Next Challenge-- Health Care

Sacrifice Redefined-- The Budget Cutting Spam Email

Some of you may have received this email over the past several days:

Biting the bullet—cutting expenses. I HOPE YOU WILL PARTICIPATE, AND DO YOUR PART !

The President ordered the cabinet to cut a $100 million from the $3.5 trillion federal budget.

I’m so impressed by this sacrifice that I have decided to do the same thing with my personal budget. I spend about $2000 a month on groceries, household expenses, medicine, utilities, etc, but it’s time to get out the budget cutting ax, go line by line through my expenses, and cut back!

I’m going to cut my spending at exactly the same ratio -1/35,000 of my total budget. After doing the math, it looks like instead of spending $2000 a month; I’m going to have to cut that number by six cents!

Yes, I’m going to have to get by with $1999.94, but that’s what sacrifice is all about. I’ll just have to do without some things, that are, frankly, luxuries. (Did the prez actually think no one would do the math?)

John Q. Taxpayer

I was so inspired by this email that I also decided to participate in the sacrifice, but was hardpressed to identify what I spent 6 cents on over the course of the month. I therefore decided to sacrifice 100 times more than our political leaders and give up coffee one day a week for a total savings of $6 a month. Why can't they make a similar sacrifice?

The Long Term Purchasing Power of the Greenback

Click to Englarge

Buffett On His Own Good Fortune

Buffett says he feels lucky to have been born in the United States, lucky to have found what he loves doing very early in life, and "extremely lucky in that the two most important people to me in my life, my dad and my wife ... they both extended to me unconditional love. And there's no power on earth in my view like unconditional love."

Quote of the Day: Thomas Jefferson

"To preserve independence, we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers."

~ Thomas Jefferson, letter to Samuel Kercheval, 1816

The Spirit of Mount Vernon: The George Washington Distillery

The NFL 2011 Labor Lockout

Give me $10M a year and I'll suit up for 16 games.

The Wal-Mart Jihad Continues

“Wal-Mart does not suit the clientele we have in the city of Boston. I don’t need employers like that in our city.”

~ Tom Menino, Boston Mayor

Non-union Wal-Mart is having a tough go of it trying to implement its new growth strategy of penetrating the underserved inner-city markets. They are running into political opposition in strong union enclaves. The latest battleground is Boston, where Mayor Tom Menino wants to save inner city families from everyday low prices. As Michael Graham editorializes in the Boston Globe:

I’d love to hear the mayor explain to Boston’s blue-collar families why it’s better for them to stay unemployed than to let Wal-Mart come to town and hire them. I’d also like to hear the mayor explain to struggling families why the falling food prices that arrive with every Wal-Mart are a bad thing. Why they can’t enjoy the 20 percent to 30 percent drop in the cost of necessities that communities often experience when Wal-Mart arrives.

In 2008, when food costs surged, Wal-Mart dramatically cut its prices. In 2009, when unemployment spiked, Wal-Mart added more than 22,000 workers. Those mean-spirited bastards! 

If Wal-Mart opens in Boston, poor people will win. They will have access to new jobs, cheaper food and increased economic choices. But since when has helping poor people been Menino’s priority? In 2008 he turned down CVS’s request to open “minute clinics” here, providing cheap health care in some of Boston’s neediest communities. Why did Menino oppose it?

“Allowing retailers to make money off of sick people is wrong,” Menino told CVS — a company whose entire business is selling medicine to sick people.

Maybe Boston's Mayor should pay closer attention to what happened in Chicago when a Wal-Mart opened there. The neighborhood became safer. It attracted 22 new stores and businesses to the area. It created hundreds of new jobs at Wal-Mart, and also helped to generate a net increase of hundreds of new jobs in the neighborhood at other stores and businesses-- not to mention the money it saved its customers.



Grouch: I do not live in the inner city, but my community fits the Wal-Mart rural store model.  They were the first major store to come to our underserved community and soon other stores followed such as Home Depot, Kohls, Walgreens and numerous national restaurant franchises.  Would these stores have come without Wal-mart being there?  I doubt it.  Wal-mart proved we were a viable retail community.  The other benefits we've received are lower prices not only at the Wal-mart, but the other stores that much compete with them.  In addition Wal-mart provides numerous employment opportunities for our high school and college aged kids as well as senior citizens.  The business that have grown up around Wal-mart provide additional opportunities.  I'm glad we have Wal-mart in town and look forward to even lower prices in the future.

HT: Carpe Diem

The Limits of Constitutional Authority

Click to Enlarge

The Cato Institute is running this add in a number of newspapers this week.  It pretty much speaks for itself.  

Support Your Local Police

The Lumberjack

The Red Menace: Even Bigger Than You Think

The politicians in Washington either do not understand the magnitude of the debt problem they have created or do not care, thinking they can continue to kick the can down the road. The budget submitted by The President proved woefully inadequate when it comes to spending cuts. The administration's lack of seriousness is underscored by their request for a 315% increase in the in the Department of Health and Human Services’ public affairs propaganda budget. In fact, Obama's HHS Department is slated to spend $909.7 billion in 2011, which is more than the entire government spent in 1965 under LBJ at $822.6 billion in inflation adjusted dollars.

Neither party seems to be truly serious about cutting spending or has demonstrated they even have the faintest idea how to tackle the greatest national security threat to the nation. Business as usual in Washington seems to be in overdrive these days, and real change is still out on sabbatical.

A Day Made of Glass....... Made Possible by Corning

IBM's 'Watson' Pits Man vs. Machine on Jeopardy!

Nova: The Smartest Machine on Earth

Chapter 1



Chapter 2



Chapter 3



Chapter 4



Chapter 5



Chapter 6


Update: After day 2 of Jeopardy, IBM's Watson is impressively kicking the butts of its human competition. Watson consists of ninety clustered IBM POWER 750 servers, 16 Terabytes of memory, and 4 Terabytes of clustered storage running Novell’s SUSE Linux Enterprise Server. Watson uses IBM DeepQA software to “understand” natural language questions and answers like those in Jeopardy. Doing this is really the hard trick for Watson and its designers. Humans don’t talk or think clearly or logically. To work out what someone means, a computer needs to understand context, slang, puns and a hundred other things that we take for granted when we talk to each other.

Update #2: The final tally from the two games: Watson at $77,147, Jennings at $24,000 and $21,600 for reigning champion Brad Rutter -- who previously won a record $3.25 million on the quiz show. "I for one welcome our new computer overlords," contestant Ken Jennings -- who holds the "Jeopardy!" record of 74 straight wins -- cheekily wrote on his answer screen at the conclusion of the much-hyped three-day showdown.

The Evils of Capitalism

Byte Magazine, 1976

newegg.com, 2011

Your Life According to the Government

This video presents an interesting perspective on the average American's life. Makes me think of some of the most feared words in the English language: "I'm from the government and I'm here to help."

Happy Valentines Day

Picture of the Day: The Tools of Revolutionaries

"Social media is a revolutionary force. We know that, but we're still catching up with its implications. A leader of the Egyptian revolt was a Google executive. Could the future be any clearer?

No takeable dictatorship will survive this era. The ones that do last will be so effectively totalitarian that their very brutishness will be their bulwark.

A Hollywood director once said that a great Western is defined by this dynamic: "The villain has arrived while the hero is evolving." Egypt itself is evolving. May its people be heroes and do great things."

~ Peggy Noonan, from the Wall Street Journal

Atlas Shrugged Part 1

Part 1 of the greatest literary work of countermoonbat Ayn Rand is coming to the silver screen on Tax Day, April 15:

Sunday Verse: William Stafford

Ceremony

On the third finger of my left hand
under the bank of the Ninnescah
a muskrat whirled and bit to the bone.
The mangled hand made the water red.

That was something the ocean would remember:
I saw me in the current flowing through the land,
rolling, touching roots, the world incarnadined,
and the river richer by a kind of marriage.

While in the woods an owl started quavering
with drops like tears I raised my arm.
Under the bank a muskrat was trembling
with meaning my hand would wear forever.

In that river my blood flowed on.

~ William Stafford

Google Authors: Ray Kurzweil-- The Web Within Us: When Minds and Machines Become One

Ray Kurzweil visits Google's Mountain View, CA headquarters to discuss his book "The Web Within Us: When Minds and Machines Become One." This event took place on July 1, 2009, as part of the Authors@Google series.

At the onset of the 21st century, it will be an era in which the very nature of what is means to be human will be both enriched and challenged, as our species breaks the shackles of its genetic legacy, and achieves inconceivable heights of intelligence, material progress, and longevity. The paradigm shift rate is now doubling every decade, so the twenty-first century will see 20,000 years of progress at todays rate. Computation, communication, biological technologies (for example, DNA sequencing), brain scanning, knowledge of the human brain, and human knowledge in general are all accelerating at an even faster pace, generally doubling price-performance, capacity, and bandwidth every year. Three-dimensional molecular computing will provide the hardware for human-level "strong" AI well before 2030. The more important software insights will be gained in part from the reverse-engineering of the human brain, a process well under way. While the social and philosophical ramifications of these changes will be profound, and the threats they pose considerable, celebrated futurist Ray Kurzweil presents an inspiring vision of our ultimate destiny in which we will merge with our machines, can live forever, and are a billion times more intelligent...all within the next three to four decades.

Nine Steps to Living Well Forever

Futurist Ray Kurzweil-- Nine Steps to Living Well Forever presents a practical, enjoyable program so that readers can live long enough (and remain healthy long enough) to take full advantage of the biotech and nanotech advances that have already begun and will be occurring at an accelerating pace during the years ahead. This easy-to-follow program will help readers transcend the boundaries of our genetic legacy and live long enough to live forever.

Quote of the Day: The Washington Post

"The Arctic ocean is warming up, icebergs are growing scarcer and in some places the seals are finding the water too hot, according to a report to the Commerce Department yesterday from Consulafft, at Bergen, Norway. Reports from fishermen, seal hunters and explorers all point to a radical change in climate conditions and hitherto unheard-of temperatures in the Arctic zone. Exploration expeditions report that scarcely any ice has been met as far north as 81 degrees 29 minutes. Soundings to a depth of 3,100 meters showed the gulf stream still very warm. Great masses of ice have been replaced by moraines of earth and stones, the report continued, while at many points well known glaciers have entirely disappeared.

"Very few seals and no white fish are found in the eastern Arctic, while vast shoals of herring and smelt which have never before ventured so far north, are being encountered in the old seal fishing grounds. Within a few years it is predicted that due to the ice melt the sea will rise and make most coastal cities uninhabitable."

~ The Washington Post, November 2, 1922

The Free Frontier

NASA may have lost its way, but out under the radar America has a bold, imaginative, successful and efficient Private Space Age starting to bloom. Find out what's wrong with the current state of big-government, manned space exploration, how to fix it, and what private property is actually flying in space above your heads RIGHT NOW.

An Epic Failure: Detroit Public Schools - Episodes 4 & 5 - "Kids Aren't Cars"

Imagine an education system that spends over $1 billion a year and graduates students who cannot read their diploma. It's happening in Michigan's largest city. We meet one of those graduates and the leaders trying to help him. We also show the powerful interests that continue to fight to put the interests of adults first.





Continuing on the theme that education in the US has primarily been designed to benefit the adults instead of the children, I was able to track down some compensation information on Illinois public schools (sorry, I couldn't find stats on Detroit).

These eye-popping pension numbers are like nothing I've ever seen in the private sector, except for the top 2 or 3 officers in a Fortune 500 company.  And the taxpayers of Illinois, most of whom earn substantially less than these fat cats, get the privilege of paying these pensions for year and years to come.  No wonder Illinois state taxes were just hiked 66%.

Four Reasons Why Big Government Is Bad Government

This Economics 101 video from the Center for Freedom and Prosperity explains that excessive government spending undermines prosperity by diverting resources from the productive sector of the economy. Moreover, the two main ways of financing government -- taxes and borrowing -- cause additional economic damage.

What Is The Gender Of Your Computer?

To find out the gender of your computer follow the instructions below:

1. Open your notepad
2. Type or copy paste: CreateObject("SAPI.SpVoice").Speak"I love you" (if you copy+paste the code, replace quotes by actual quotes on your keyboard)
3. Save as computer_sex.vbs
4. Run the file.

If you hear a male voice, you have a boy if woman’s, it’s a girl.

This only works on Windows machines........ my office computer was female.

How to Do Things Faster

Quote of the Day: Vo Nguyen Giap

"What we still don't understand is why you Americans stopped the bombing of Hanoi. You had us on the ropes. If you had pressed us a little harder, just for another day or two, we were ready to surrender! It was the same at the battle of TET. You defeated us!

We knew it, and we thought you knew it.

But we were elated to notice your media was helping us. They were causing more disruption in America than we could in the battlefields. We were ready to surrender. You had won!"

~ General Vo Nguyen Giap, North Vietnamese Army

AOL: Still Crazy After All These Years

Before this deal was announced, I had honestly forgotten that AOL still existed.  I would be hard pressed to spell out how they make money.  They have bought a number of smaller websites over the past couple of years, but the big news earlier in the week was that they bought the liberal news site The Huffington Post for the eye-popping sum of $315M.  AOL has a history of making foolish moves with their cash and this acquisition may keep that tradition alive.  I think this large acquisition signals the beginning of the end for AOL, and will hitch the Huffington Post to a falling star.

Update: Since announcing the acquisition AOL has lost $315M in capitalization, proving that the market is an excellent discounting mechanism and recognizes a lot of hot air when they see it. Does this baffling deal mark a near-term market high for liberalism?

We Are Makers

MAKE magazine publisher Dale Dougherty says we're all makers at heart, and shows cool new tools to tinker with, like Arduinos, affordable 3D printers, even DIY satellites.

Halo and Horns

Quote of the Day: Bill Gross

Financiers have lost their high ground and, if truth be told, we began to lose it a long time ago when we figured out that money was more than a medium of exchange or a poor substitute for a store of value. We figured out a turbocharged way to make money with money and proclaimed ourselves geniuses in the process. Well, we’re not. We may be categorized as “opportunists,” to be generous, but society’s “paragons” and a legitimate destination for a significant percentage of college graduates? Hardly. To paraphrase Paul Volcker, the only productive invention to come out of the banking industry over the past generation was the ATM.

~ Bill Gross, PIMCO Funds

Grouch: I'd probably add the index fund to the list in addition to the ATM, but I wouldn't expect an active manager to come up with that one.

The Great Stagnation

Tyler Cowen, George Mason economist, discusses his view that innovation has slowed down and has led to our current period, The Great Stagnation.

2011 SuperBowl – DECLARATION OF INDEPENDENCE

The Ronald Reagan Centennial Celebration

"We who live in free market societies believe that growth, prosperity and, ultimately, human fulfillment are created from the bottom up, not the government down. Only when the human spirit is allowed to invent and create, only when individuals are given a personal stake in deciding economic policies and benefiting from their success – only then can societies remain alive, dynamic, prosperous, progressive and free.

Trust the people. This is the one irrefutable lesson of the entire post-war period, contradicting the notion that rigid government controls are essential to economic development. The societies that have achieved the most spectacular, broad-based progress are neither the most tightly controlled, nor the biggest in size, nor the wealthiest in natural resources. No, what unites them all is their willingness to believe in the magic of the marketplace."

~ Ronald Reagan at the NYSE

An historic moment, President Reagan’s visit to the NYSE in 1985 marked the first time a sitting president had visited the Exchange.

Reagan Compilation from 60 Minutes



CNN Compilation of Reagan

Sunday Verse: Richard Hugo

The Lady in Kicking Horse Reservoir


Not my hands but green across you now.
Green tons hold you down, and ten bass curve
teasing in your hair. Summer slime
will pile deep on your breast. Four months of ice
will keep you firm. I hope each spring
to find you tangled in those pads
pulled not quite loose by the spillway pour,
stars in dead reflection off your teeth.

Lie there lily still. The spillway’s closed.
Two feet down most lakes are common gray.
This lake is dark from the black blue Mission range
climbing sky like music dying Indians once wailed.
On ocean beaches, mystery fish
are offered to the moon. Your jaws go blue.
Your hands start waving every wind.
Wave to the ocean where we crushed a mile of foam.

We still love there in thundering foam
and love. Whales fall in love with gulls
and tide reclaims the Dolly skeletons
gone with a blast of aching horns to China.
Landlocked in Montana here
the end is limited by light, the final note
will trail off at the farthest point we see,
already faded, lover, where you bloat.

All girls should be nicer. Arrows rain
above us in the Indian wind. My future
should be full of windy gems, my past
will stop this roaring in my dreams.
Sorry. Sorry. Sorry. But the arrows sing:
no way to float her up. The dead sink
from dead weight. The Mission range
turns this water black late afternoons.

One boy slapped the other. Hard.
The slapped boy talked until his dignity
dissolved, screamed a single ‘stop’
and went down sobbing in the company pond.
I swam for him all night. My only suit
got wet and factory hands went home.
No one cared the coward disappeared.
Morning then: cold music I had never heard.

Loners like work best on second shift.
No one liked our product and the factory closed.
Off south, the bison multiply so fast
a slaughter’s mandatory every spring
and every spring the creeks get fat
and Kicking Horse fills up. My hope is vague.
The far blur of your bones in May
may be nourished by the snow.

The spillway’s open and you spill out
into weather, lover down the bright canal
and mother, irrigating crops
dead Indians forgot to plant.
I’m sailing west with arrows to dissolving foam
where waves strand naked Dollys.
Their eyes are white as oriental mountains
and their tongues are teasing oil from whales.

~ Richard Hugo

Markets in Everything: Crown Jewels

 

I'm sure the happy couple is orgasmic at having their likenesses associated with this product.

Facts about China

Many pundits are singing the praises of the Chinese economic miracle, but not everything is rosy in China. Yes, they have taken over a lot of the world's manufacturing through low-cost labor and state subsidies, but  China is not exactly the model of economic or political freedom.  Here are some facts that present a more balanced view or China and its economic central planners:

China's economy grew 7 times as fast as America's over the past decade (316% growth vs. 43%)

China's GDP per capita is the 91st-lowest in the world, below Bosnia & Herzegovina

85 percent of artificial Christmas trees are made in China. So are 80 percent of toys

If he spent his ENTIRE YEARLY INCOME on housing, the average Beijing resident could buy 10 square feet of residential property

China has more pigs than the next 43 pork producing countries combined

Chinese consume 50,000 cigarettes every second

America's fastest "high speed" train goes less than half as fast as the new train between Shanghai and Beijing (150 mph vs 302 mph)

China's enormous Gobi Desert is the size of Peru and expanding 1,400 square miles per year due to water source depletion, over-foresting, and over-grazing

China has 64 million vacant homes, including entire cities that are empty

The world's biggest mall is in China... but it has been 99% empty since 2005

When you buy Chinese stocks, you are basically financing the Chinese government. Eight of Shanghai's top ten stocks are government owned

• PetroChina
• Industrial and Commercial Bank of China
• Sinopec
• Bank of China
• China Shenhua Energy Company
• China Life Insurance Company
• Bank of Communications