Thursday, December 29, 2011
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.
Thursday, December 22, 2011
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
Wednesday, December 21, 2011
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?
Monday, December 19, 2011
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.
Friday, December 16, 2011
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.
Thursday, December 15, 2011
- See's Candies -- great gifts for work colleagues who have a sweet tooth.
- Helzberg Diamonds -- don't know to get for your significant other, you can't go wrong with diamonds.
- Tony Lama boots -- want to bring out the inner cowboy in some suburbanite yuppie, these are the perfect gift.
- The Pampered Chef -- for those who want to feel like royalty in the kitchen.
- Ginzu Knives -- to bring out the inner samurai.
- Decadent Desert Sauces from The Pampered Chef -- a must for every Santa.
- 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.
- Campbell Hausfeld Power Tools -- you can pick these up at Home Depot or Lowes for your special handyman.
- Clayton Homes sustainable living -- manufactured, eco-friendly housing for those in need of a new place to live.
- Russell Outdoors Camouflage Hunting Gear -- for the avid hunter.
- Fruit of the Loom undies -- no comment needed.
- Wells Lamont Work Gloves -- for the tough, work-outdoors types.
- Forest River RV -- for those who like take scenic driving vacations.
- Spaulding Basketball and Backboard -- for the future NBA star.
- Brooks Running Shores -- for those who like to stay fit and trim.
- Borshiems Christmas Tree Ornaments -- for those who take special pride in their holiday decorations.
- 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.
“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.
Wednesday, December 14, 2011
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."
Tuesday, December 13, 2011
Friday, December 9, 2011
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.
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.
Thursday, December 8, 2011
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.
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.
- 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.
Wednesday, December 7, 2011
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.
Saturday, December 3, 2011
Friday, December 2, 2011
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.
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 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:
Thursday, December 1, 2011
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.