Sunday, January 30, 2011

Suspicious Activity at Walmart

Porkers of the Month for January 2011

Quote of the Day: Vaclav Havel

The government has embraced an arrogant ideology. They claim to know the key to prosperity. It's analogous to communism. They thought the same thing. The clever ones - themselves - would run everything. That's the analogy. The key to prosperity is to let things run themselves. We'll liberalize everything, let everyone look after himself, let business, not the state, run the economy. The state should have no views, no policies of its own. Just open it all up, step back, let it go and you'll see how well everything will work if we just leave things alone.

~ Vaclav Havel, former President of the Czech Republic overheard in conversation explaining the Czech economic slump of the mid-1990's.

Andrew Klavan: Good Intentions

Sunday Verse: Ellen Bryant Voigt

At the Movie: Virginia, 1956

This is how it was:
they had their own churches, their own schools,
schoolbuses, football teams, bands and majorettes,
separate restaurants, in all the public places
their own bathrooms, at the doctor’s
their own waiting room, in the Tribune
a column for their news, in the village
a neighborhood called Sugar Hill,
uneven rows of unresponsive houses
that took the maids back in each afternoon—
in our homes used the designated door,
on Trailways sat in the back, and at the movie
paid at a separate entrance, stayed upstairs.
Saturdays, a double feature drew the local kids
as the town bulged, families surfacing
for groceries, medicine and wine,
the black barber, white clerks in the stores—crowds
lined the sidewalks, swirled through the courthouse yard,
around the stone soldier and the flag,

and still I never saw them on the street.
It seemed a chivalric code
laced the milk: you’d try not to look
and they would try to be invisible.
Once, on my way to the creek,
I went without permission to the tenants’
log cabin near the barns, and when Aunt Susie
opened the door, a cave yawned, and beyond her square,
leonine, freckled face, in the hushed interior,
Joe White lumbered up from the table, six unfolding
feet of him, dark as a gun-barrel, his head bent
to clear the chinked rafters, and I caught
the terrifying smell of sweat and grease,
smell of the woodstove, nightjar, straw mattress—
This was rural Piedmont, upper south;
we lived on a farm but not in poverty.
When finally we got our own TV, the evening news
with its hooded figures of the Ku Klux Klan
seemed like another movie—King Solomon’s Mines,
the serial of Atlantis in the sea.
By then I was thirteen,
and no longer went to movies to see movies.
The downstairs forged its attentions forward,
toward the lit horizon, but leaning a little
to one side or the other, arranging the pairs
that would own the county, stores and farms, everything
but easy passage out of there—
and through my wing-tipped glasses the balcony
took on a sullen glamor: whenever the film
sputtered on the reel, when the music died
and the lights came on, I swiveled my face
up to where they whooped and swore,
to the smoky blue haze and that tribe
of black and brown, licorice, coffee,
taffy, red oak, sweet tea—

wanting to look, not knowing how to see,
I thought it was a special privilege
to enter the side door, climb the stairs
and scan the even rows below—trained bears
in a pit, herded by the stringent rule,
while they were free, lounging above us,
their laughter pelting down on us like trash.

~ Ellen Bryant Voigt

Saturday, January 29, 2011


Whether the pro-American Mubarak government can hold onto to power or not remains to be seen. The real danger in this whole situation is that Egypt becomes another Iran, turning the Arab world's most populous nation into an Islamic theocracy run by The Muslim Brotherhood. For investors, this uncertainty and turmoil will create short-term market volatility and enough of a correction to present a buying opportunity for long-term investors.

Contortion in a Box

Andrew Klavan: History of Western Culture in 2 1/2 Minutes

The Flying Car -- Maverick 2

The Indigenous People's Technology and Education Center, Itec, ( presents the Maverick Sport - "the flying car that does!" Not exactly the Jetsons, but it does really fly.

Quote of the Day: Don Boudreaux

"An economy’s success is best measured by how well it pleases consumers, not by how well it pleases businesses. Each business sees matters differently. It wants to profit as much as possible. In a free market, businesses profit only by pleasing consumers. But a business that obtains special favors from government can profit without pleasing consumers. And it’s here that trouble starts.

Consider Obama’s commitment to make America more “competitive.” “Competition” sounds good. But businesses don’t like competition; they like protection from competition – along with subsidies, special tax breaks, and other government favors that relieve them from the need to cater energetically to consumer demands. So a pro-business president is prone to curry favor with businesses by shielding them from competition.

Tariffs and other import restrictions are examples of pro-business policies. They increase the bottom lines of those businesses that no longer must compete vigorously against foreign rivals. Such pro-business policies are also anti-consumer and anti-market. They rob consumers of choice; they shrink consumers’ spending power by enabling protected businesses to raise prices; and they stymie economic growth, in part by channeling entrepreneurs’ efforts into lobbying government for favors and away from figuring out how to build better mousetraps.

The irony is that such policies – which really should be labeled “crony capitalist” – are often labeled “competitiveness” policies. Because these policies increase the profits of some domestic businesses, they are mistakenly believed to make the domestic economy more “competitive” when, in fact, they make it less so."

~ Don Boudreaux, State of the Union shows Obama is now pro-business. He should be pro-growth.

Grouch: I don't think this is a criticism that can be leveled at Obama specifically. Anytime the government starts playing favorites, picking winners and losers in the marketplace, regardless of which party is in power, the inevitable outcome seems to be crony capitalism.

Theo Jansen’s Strandbeests – Wallace & Gromit’s World of Invention Episode 1 Preview

The WTF Express

Sorry, I know these jokes are too easy and obvious.

Friday, January 28, 2011

Is Capitalism Evil?

This video explores the roots of economics, what works and what does not, and dispels the myth that capitalism is simply a tool to prey on the weak. In fact, the average middle class American today lives better than the Kings and Queens of just 100 years ago.

How to Get More People to Use the Stairs

In Sweden the piano plays you.

Marc Faber On US Stocks

Marc Faber, publisher of the Gloom, Boom & Doom report, discusses the outlook for the U.S. economy and stock market. In an unusually candid interview, Faber lets it rip on Obama, Bush, Bernanke, and the financial whizzes at Davos.

Thursday, January 27, 2011

A Public Service Announcement For Our Readers: Get Acclimatized!

Identity Crisis: Obama 2.0: The Remaking of a President

"I didn't leave the Democratic Party.  The party left me." ~ Reagan

Welcome back.

Jim Rogers on Stocks and Commodities

Soros at Davos-- On the States' Financial Problems and the Eurozone

Not one of my favorite people in the world, but Soros makes an interesting point: Importing inflation is healthy because it is need to ease the burden of excessive debt weighing on the states and the federal government.

My Own Personal Global Warming Paradise

Over 12 inches of paradise fell last night.

Quote of the Day: Scott Grannis

From a taxpayer's perspective, Obama's biggest weakness is his lack of understanding of how the economy really works. That weakness has already cost us $1 trillion, and what he said in his SOTU speech last night shows that this was a lot of money down the drain, because he learned very little from his failures these past two years. He continues to believe that enlightened politicians can boost economic growth much like a good coach can whip a team or a star player into shape. Last night's SOTU speech was Coach Obama's pep talk before the big game. Problem is, he still doesn't understand the game of economic growth, so there is little chance that his coaching will prove effective....

If Obama really understood the economy, he would have showed much more interest in cutting spending. Proposing to freeze discretionary spending while also proposing to spend a whole lot on "investments" is not going to avoid the fiscal train wreck we are headed for, and it's not going to help the economy. Federal spending has increased hugely under his watch, and is scheduled to absorb an unprecedented amount of the economy's resources in the future. This is sapping the economy's strength by allowing inefficient government programs and bureaucrats to waste the economy's scarce resources. Cutting spending now is the best way to strengthen the economy, since it returns money to the private sector where all true growth originates. Cutting spending also reduces expected future tax burdens, which in turn encourages more investment and work effort.

~ Scott Grannis

Wednesday, January 26, 2011

Understanding the Rise of China

Speaking at a TED Salon in London, economist Martin Jacques asks: How do we in the West make sense of China and its phenomenal rise? The author of "When China Rules the World," he examines why the West often puzzles over the growing power of the Chinese economy, and offers three building blocks for understanding what China is and will become.

Estimated 2011 Federal Deficit to Set Record at $1.5T

The day after Obama 2.0 was unveiled in the State of the Union Address, repackaging many familiar themes in new advertising and demonstrating that he has some limited understanding of the mid-term elections by talking about deficit reduction and job creation, the CBO has estimated the 2011 federal deficit will hit a record $1.5T due to a generally weak economy coupled with excessive spending.  These eye-popping numbers mean the government will continue to borrow 40 cents for every dollar it spends.  How long can this go on?  As Walt Kelly says in the Pogo comic strip: we have met the enemy and he is us..... not the post-Sputnik Russians, or the Chinese, or the Indians.  None of these countries could inflict the kind of economic damage we've inflicted on ourselves.

Deficit Hawk Spotted in the Library of Congress

Prior to the President's State of the Union Address a deficit hawk was spotted flying around the Library of Congress, fittingly in the Thomas Jefferson room (anyone familiar with Jefferson's writings knows he would not be happy with the sorry state of the nation's finances).  Could this be a portent of things to come?  Could there be real cuts coming to the Federal Budget instead of the usual accounting trickery?  Has a new day dawned in the hallowed halls of Congress?

The bird is believed to be a Cooper's Hawk, and numerous people from the Raptor Conservancy of Virginia and the Washington Human Society as well as K Street lobbyists are attempting to capture for release back into the wild before it does any real damage to the Federal Budget.

Tuesday, January 25, 2011

Milton Friedman: Free to Choose: Part 10-- How To Stay Free

Democracies have only recently been considered desirable. Historically, it was feared that democracies always self destruct when citizens, forgetting that you cannot remove want and misery through legislation, insist on government actions that physically and morally bankrupt their nation. Friedman explains why the United States has so far avoided this outcome and how we can continue to do so.

Up From the Projects

In a new book, Up From the Projects, nationally syndicated columnist and prolific author Walter E. Williams recalls some of the highlights and turning points of his life. From his lower middle class beginnings in a mixed but predominantly black neighborhood in West Philadelphia to his department chair at George Mason University, Williams tells an only in America story of a life of achievement.

Williams describes the influences of his early years such as the teachers who demanded his best efforts and made no excuses for him and tells how his two years in the army became an important part of his maturation process, in spite of the racism he encountered. He recounts his early time getting established in Los Angeles getting his B.A., going on to grad school at UCLA, and beginning his teaching career. And he tells how his subsequent move to the Urban Institute in Washington opened his eyes to how decisions are really made in D.C.

For those unfamiliar with Dr. Williams, here are a few Williamsisms:

"The welfare state has done to black Americans what slavery couldn't do, what Jim Crow couldn't do, what the harshest racism couldn't do. And that is to destroy the black family."

"Sometimes I sarcastically, perhaps cynically, say that I'm glad that I received virtually all of my education before it became fashionable for white people to like black people. By that I mean that I encountered back then a more honest assessment of my strengths and weaknesses. Professors didn't hesitate to criticize me—sometimes to the point of saying, 'That's nonsense.'"

"We lived in the Richard Allen housing projects. My father deserted us when I was three and my sister was two. But we were the only kids who didn't have a mother and father in the house. These were poor black people and a few whites living in a housing project, and it was unusual not to have a mother and father in the house. Today, in the same projects, it would be rare to have a mother and father in the house."

"Racial discrimination is not the problem of black people that it used to be. Today I doubt you could find any significant problem that blacks face that is caused by racial discrimination. The 70% illegitimacy rate is a devastating problem, but it doesn't have a damn thing to do with racism. The fact that in some areas black people are huddled in their homes at night, sometimes serving meals on the floor so they don't get hit by a stray bullet—that's not because the Klan is riding through the neighborhood."

"I try to write so that economics is understandable to the ordinary person without an economics background. I think it's important for people to understand the ideas of scarcity and decision-making in everyday life so that they won't be ripped off by politicians. Politicians exploit economic illiteracy."

"For the first time in my lifetime—and I'm approaching 75 years old—you hear Americans debating about the U.S. Constitution. You hear them saying 'This is unconstitutional' or 'We need limits on government'—things that I haven't heard before. I've been arguing them for years, but now there's widespread acceptance of the idea that we need to limit the government."

"In 1794, Congress appropriated $15,000 to help some French refugees. James Madison stood on the House floor and said he could not take to lay his finger on that article in the Constitution that allows Congress to take the money of its constituents for the purposes of benevolence. Well, if you look at the federal budget today, two-thirds to three-quarters of it is for the purposes of benevolence."

"We need a constitutional amendment that limits the amount of money the government can spend. Let's say 18% of GDP to start. The benefit of a spending limitation amendment is that you're going to force Congress to trade off against the various spending constituencies. Somebody says, 'I want you to spend $10 billion on this,' and the congressman can respond, 'My hands are tied, so you have to show me where I can cut $10 billion first.'"

"A historian writing 100 or 200 years from now might well say, 'You know, there was this little historical curiosity that existed for maybe 200 years, where people were free from arbitrary abuse and control by government and where there was a large measure of respect for private property rights. But then it went back to the normal state of affairs.'"

Anyone interested in hearing more of Williams' point of view can look up What is a Right? or his PBS show "Good Intentions."

Monday, January 24, 2011

Quote of the Day: Rush Limbaugh

"The moral code, the moral compass of the state-controlled media is something to behold. Now, some of you may not know the 2009 Nobel Peace Prize winner hosted a state dinner last night (January 19) for Hu Jintao of China. Hu Jintao is holding the 2010 Nobel Peace Prize winner in prison in China. Not making it up. The 2009 Nobel Peace Prize winner hosted a dinner for the guy holding the 2010 Nobel Peace Prize winner in prison, and the media does not get the irony of this at all. They're too busy running around chasing Sarah Palin and radio talk show hosts over 'civility.'"

~ Rush Limbaugh

We Are All Cyborgs Now

What is the "Return" on Your Social Security "Investment"

Despite the naysayers (some may put me in this camp), odds are social security will be part of your future. No question our national pension systems has many well-documented problems, but they are potentially solvable through a combination of cost cutting and tax raises before the money runs out.

One question I've always had is Social Security worth it? Are the benefits you will received for a career's worth of taxes adequate compensation? If Social Security were treated as an investment what would be your compounded rate of return? I've read articles over the past several years that claim those returns are anywhere from negative to in the low teens. The latest answer provided by a new Urban Institute Social Security study is that you will received back more than you paid in. However, to arrive at this positive return the people conducting this study needed to bundle Social Security and Medicare, leading me to believe the picture for Social Security by itself is not so rosy. The Urban Institute assumes a 2% real return above inflation for their calculations, which given the current low interest rates seems to be an optimistic number.

A walk through the Urban Institutes numbers show that Social Security definitely plays favorites. Women make out better than men with their tax dollars because 1) they live longer 2) they are more likely to collect widow's benefits, and 3) they are not just stuck with their benefits, but are also entitled to half of the husband's benefit if that is higher. If you retired last year as an average wage-earning man, for example, you could expect a lifetime benefit worth $417,000 in today’s dollars on $345,000 in taxes. If you were a woman with the same work history, you could expect to collect $464,000 on the same taxes.

Other Social Security winners include married couples with single breadwinners (this is what you might expect from a system launched in 1935), as well as baby boomers and their parents.  The payments tend to decline for later generations after the baby boomers.  It is vital for them to save for retirement outside of Social Security.

What is not covered in this study is the opportunity cost of the social security "investment," what people could earn if they were allowed to invest this money on their own.  A 30 - 40 year investment that does not at least double the original investment seems like a pretty crummy deal to me for those disciplined enough to save and invest on their own.

Sunday, January 23, 2011

The Dream of Blogging

Bottoms Up Beer

These two videos show the amazing “Bottom’s Up Draft Beer Dispensing System," which “pours” a draft beer nine times faster than traditional methods and dramatically reduces spillage. It's made by a Washington start-up company named GrinOn Industries, whose president Josh Singer saw it a way to end the dreaded stadium beer line, according to Yahoo Sports.

"The key is the use of a cup that features a hole at the bottom and small, circular magnet that rests over it. When placed on the system, the magnet is lifted up by the pressure-driven beer. The cup fills up until the weight of the liquid pushes the magnet back down over the hole (see video above). The cup can then be lifted off and the beer consumed as normal. A single stand has been able to deliver 56 draft beers in one minute, an unofficial world record (see video below)."

Sunday Verse: Frank Stanford

Place on a Grave

It's not hard to forget what they ate
Every winter, when the father
And oldest brother went back to do time,
Cowpeas and smoked goat, all winter
The same muddy supper, their voices
Thick as pan bread, the hollering
At dawn when the mother went out
To the pens in cowboy boots
With a bucket of feed and a roll
Of toilet paper, finding a swatch
Of her daughter's nightgown
Fluttering on the barbed-wire,
The hollering and calling
The rest of them did when they
Raised up from their cold beds
And went out searching at first light
For their crippled sister, who dreamed
Walking over the mountains
In the dead of winter, the smell
Of cooking in her hair, believing
She was gone from there, dignified
Like a wooden figure on the prow
Of a ship with no horizon.

~ Frank Stanford

Saturday, January 22, 2011

Saving Social Security with Personal Retirement Accounts

There are two crises facing Social Security. First the program has a gigantic unfunded liability, largely thanks to demographics. Second, the program is a very bad deal for younger workers, making them pay record amounts of tax in exchange for comparatively meager benefits. This video explains how personal accounts can solve both problems, and also notes that nations as varied as Australia, Chile, Sweden, and Hong Kong have implemented this pro-growth reform.

Friday, January 21, 2011

Quote of the Day: George Will

James Q. Wilson, America's preeminent social scientist, has noted that until relatively recently, "politics was about only a few things; today, it is about nearly everything." Until the 1930s, or perhaps the 1960s, there was a "legitimacy barrier" to federal government activism: When new policies were proposed, the first debate was about whether the federal government could properly act at all on the subject. Today, there is no barrier to the promiscuous multiplication of programs, because no program is really new. Rather, it is an extension, modification or enlargement of something government is already doing.

~ George Will, Hubris heading for a fall

Thursday, January 20, 2011

Calling All Teenagers

Are You Saving Enough for Retirement?

The answer for most is, sadly, no.  In fact, one in three people have zero retirement savings.  What are they thinking?  The answer,sadly, is they are counting on Social Security to be their sole income in retirement.  Big mistake  These people need a close encounter with reality.  Social Security should only count for 1/3 of your retirement income, and 1/3 from pensions, 401ks, and the last 1/3 from savings.

The medium savings in IRA accounts today is $2000 according to the Bureau of Labor Statistics.
American's in the lower income brackets overwhelmingly look to Social Security for just about 100% of their retirement incomes.  I won't go into a lengthy discussion here about the health of Social Security, but suffice it to say people should be very concerned with its ability to keep up with real inflation measurements that would include energy and food, unlike the government's measurements which understate inflation, and suppress Social Security cost of living adjustments.

Click to Enlarge

HT: theo

Natural Gas-- Fuel of the Future

From the fine folks at Carpe Diem, we learn that "more natural gas produced was produced in October - 2,330,551 million cubic feet - than in any previous month in U.S. history."  Natural gas now sells at less than half the price it was five years ago,  and with the vast quantities that are available the Energy Department is predicting lower prices for natural gas and  electricity for the next quarter-century.

Amy Myers Jaffe writes in the Wall Street Journal:
"We've always known the potential of shale; we just didn't have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag—and set the stage for shale gas to become what will be the game-changing resource of the decade.

I have been studying the energy markets for 30 years, and I am convinced that shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy."

Grouch: Politicians tend to be backward looking reactionaries who repeatedly fail to recognize the obvious. While they are funneling billions of dollars on the hope that wind power, ethanol, solar, or bio-diesel might be the clean fuel of the future that can power the nation and reduce our dependency on foreign oil the answer lies right below their feet-- at least a hundred year supply of clean burning natural gas that could be used to power cars, electric plants and homes for a very long time while keeping energy dollars here in the US and creating US based jobs.

50th Anniversary of JFKs Inauguration

Grouch: Whenever I listen to this speech I can't help but think how much the Democratic message has changed over the past 50 years.

"And yet the same revolutionary beliefs for which our forebears fought are still at issue around the globe -- the belief that the rights of man come not from the generosity of the state, but from the hand of God."

30th Anniversary of Reagan’s Inauguration

"In this present crisis, government is not the solution to our problem; government is the problem. From time to time we’ve been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. But if no one among us is capable of governing himself, then who among us has the capacity to govern someone else?"

The Beauty of Pixar

Debtaholics Not So Anonymous

Wednesday, January 19, 2011

Jason Fried: Why Work Doesn't Happen at Work

The World of Logos

Logorama from Marc Altshuler - Human Music on Vimeo.

NMA TV on Hu's Visit to the US

The jokers at NMA TV take a satirical look at Hu's visit to the US.

Milton Friedman: Free to Choose: Part 9-- How to Cure Inflation

Inflation results when the amount of money printed or coined increases faster than the creation of new goods and services. Money is a "token" of the wealth of a nation. If more tokens are created than new wealth, it takes more tokens to buy the same goods. Friedman explains why politicians like inflation, and why wage and price controls are not solutions to the problem. Friedman visits Japan, U.S. and Britain.

Monday, January 17, 2011

Happy Birthday, Ben Franklin

The country could certainly use the wise counsel of Ben Franklin these days.  Some of my favorite quotes from Franklin are:

A good conscience is a continual Christmas.

A life of leisure and a life of laziness are two things. There will be sleeping enough in the grave.

A man wrapped up in himself makes a very small bundle.

A penny saved is a penny earned.

Beware of little expenses. A small leak will sink a great ship.

An investment in knowledge pays the best interest.

And whether you're an honest man, or whether you're a thief,
depends on whose solicitor has given me my brief.

By failing to prepare, you are preparing to fail.

Certainty? In this world nothing is certain but death and taxes.

Content makes poor men rich; discontent makes rich men poor.

Diligence is the mother of good luck.

Dost thou love life? Then do not squander time, for that is the stuff life is made of.

Each year one vicious habit discarded, in time might make the worst of us good.

Even peace may be purchased at too high a price.

Experience is a dear teacher, but fools will learn at no other.

God helps those who help themselves.

Genius without education is like silver in the mine.

Having been poor is no shame, but being ashamed of it, is.

He that displays too often his wife and his wallet is in danger of having both of them borrowed.

He that is good for making excuses is seldom good for anything else.

He that is of the opinion money will do everything may well be suspected of doing everything for money.

He that rises late must trot all day.

He that waits upon fortune, is never sure of a dinner.

He who falls in love with himself will have no rivals.

I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things.

I saw few die of hunger; of eating, a hundred thousand.

I should have no objection to go over the same life from its beginning to the end: requesting only the advantage authors have, of correcting in a second edition the faults of the first.

If a man could have half of his wishes, he would double his troubles.

If you would know the value of money, go and try to borrow some.

It takes many good deeds to build a good reputation, and only one bad one to lose it.

Life's Tragedy is that we get old to soon and wise too late.

Many people die at twenty five and aren't buried until they are seventy five.

Never confuse motion with action.

Rather go to bed with out dinner than to rise in debt.

Rebellion against tyrants is obedience to God.

Remember not only to say the right thing in the right place, but far more difficult still, to leave unsaid the wrong thing at the tempting moment.

Tell me and I forget. Teach me and I remember. Involve me and I learn.

The Constitution only gives people the right to pursue happiness. You have to catch it yourself.

The doors of wisdom are never shut.

The worst wheel of the cart makes the most noise.

There are three faithful friends - an old wife, an old dog, and ready money.

There are three things extremely hard: steel, a diamond, and to know one's self.

There is no kind of dishonesty into which otherwise good people more easily and frequently fall than that of defrauding the government.

There never was a truly great man that was not at the same time truly virtuous.

They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.

Three can keep a secret, if two of them are dead.

Wars are not paid for in wartime, the bill comes later.

Wealth is not his that has it, but his that enjoys it.

Well done is better than well said.

Whatever is begun in anger ends in shame.

When in doubt, don't.

Where there's marriage without love, there will be love without marriage.

Who is rich? He that rejoices in his portion.

Wine is constant proof that God loves us and loves to see us happy.

Write injuries in dust, benefits in marble.

You may delay, but time will not.

Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.

Tucson: Descent into Madness

"60 Minutes" talks to Jared Loughner's friends and classmates and to ex-Secret Service, to reconstruct the pathway to mass murder he allegedly took in Tucson. Scott Pelley reports.

The Problem that is Always "Decades Away"

The NYT weighed in as S&P and Moody’s both warned that the AAA rating of the US was in jeopardy:

Standard & Poor’s and Moody’s Investors Service, warned that the nation’s gilt-edged rating might fall into jeopardy. But the two statements, made within hours of each other, were seized on by deficit hawks as further evidence that the government must reduce spending and debt to avert disaster. That is just what many Tea Party supporters insist.

But many economists say the reckoning, if it comes, is still years or even decades away.

Grouch: I don't buy the "decades away" argument. It seems like just another excuse to continue on the current insane spending trajectory, and postpone the inevitable until the crisis hits. Few politicians have the vision or leadership to head off an impending crisis. Our current crop is no exception. Soaking the rich is not going to get us out of this mess. Reduced spending and increased economic growth are our only hope..... or a bad case of prolonged inflation.

Test Your Civics IQ

Are you more knowledgeable than the average citizen? The average score for all 2,508 Americans taking the following Civics test was 49%; college educators scored 55%. Can you do better? The 33 questions on this Civics Quiz were taken from the 2008 Civic Literacy exam.

The Grouch got 31 of 33 right, 93.94% (I still dispute the two I got wrong). How did you do?

Martin Luther King -- "I Have a Dream"

What does a $15 Trillion Dollar Economy Look Like?

The Economist has an interactive map that compares the economic output of American states to the economic output (GDP) of entire countries, which helps put the large U.S. economy (GDP of about $15,000,000,000,000) into perspective. Some might say to US is the largest free trade zone in the world.

Sunday, January 16, 2011

I, Toaster

Think you can build something as simple as a toaster from scratch?

Quote of the Day: JFK and Milton Friedman

"Ask not what your country can do for you - ask what you can do for your country."

~ John F. Kennedy

"In a much quoted passage in his inaugural address, President Kennedy said, "Ask not what your country can do for you - ask what you can do for your country." Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic "what your country can do for you" implies that government is the patron, the citizen the ward, a view that is at odds with the free man's belief in his own responsibility for his own destiny. The organismic, "what you can do for your 'country" implies the government is the master or the deity, the citizen, the servant or the votary.

To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, an instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served. He recognizes no national goal except as it is the consensus of the goals that the citizens severally serve. He recognizes no national purpose except as it is the consensus of the purposes for which the citizens severally strive.

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather "What can I and my compatriots do through government" to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom? And he will accompany this question with another: How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect?

Freedom is a rare and delicate plant. Our minds tell us, and history confirms, that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom. Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp.

How can we benefit from the promise of government while avoiding the threat to freedom? Two broad principles embodied in our Constitution give an answer that has preserved our freedom so far, though they have been violated repeatedly in practice while proclaimed as precept.

First, the scope of government must be limited. Its major function must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets. Beyond this major function, government may enable us at times to accomplish jointly what we would find it more difficult or expensive to accomplish severally. However, any such use of government is fraught with danger. We should not and cannot avoid using government in this way. But there should be a clear and large balance of advantages before we do. By relying primarily on voluntary co-operation and private enterprise, in both economic and other activities, we can insure that the private sector is a check on the powers of the governmental sector and an effective protection of freedom of speech, of religion, and of thought.

The second broad principle is that government power must be dispersed. If government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does, be it in sewage disposal, or zoning, or schools, I can move to another local community, and though few may take this step, the mere possibility acts as a check. If I do not like what my state does, I can move to another. If I do not like what Washington imposes, I have few alternative in this world of jealous nations."

~ Milton Friedman, from Capitalism and Freedom

Grouch: Almost 50 years ago, on January 20, 1961, JFK made this famous statement as part of his inaugural address that has inspired millions of pro big government activists over the ensuring decades. I've never been very comfortable with sentiments in this quote and, quite frankly, found it did not express my beliefs. I believe that government is best when it gets out of the way and let's people pursue their self-interests, that the country is the strongest when people are not the servants of government but the servants of their own talents and abilities. In the years since JFK took office, government has expanded enormously, changing from a medium sized Frankenstein to a gigantic Frankenstein that tries to regulate almost every aspect of its citizen's lives. The people in power have made a sport out of gifting taxpayer money to their cronies and campaign contributors, and now they even want to tell us what we can and can't feed our children. How much more ridiculous can things get before we the people reach the limit of can be tolerated? It's high time to start disassembling Frankenstein, and restoring freedom and individual responsibility. But it will take men and women of extraordinary character to do so, and, sadly, I see few of those types on the horizon.

HT: Carpe Diem

Flunked - Part 2

Up through 4th grade, American students are above-average when tested against students of other nations. After that, they begin a steady decline to the point where, by the 12th grade, American students are down near the bottom. Something is wrong in American education. Flunked went out and found some teachers who are doing something about it...

Reagan's Soviet Jokes

A couple of these jokes aren't too bad.

Ok Go - This Too Shall Pass

Sunday Verse: Olena Kalytiak Davis

Like Kerosene

Yes, it’s daily
that we move into each other—but this morning
I was separate even from myself—
my hands were shovels, I had mosquito netting for hair,
and the insect beating against the night
was my heart. My name was hallow
and the sky was made of shale when

I walked into a part of morning
I’ve never seen: the sky still heavy, still
smoldering with the nightmares of others,
the drunkenness and sorrow rising like dew, like fog,
like smoke back into the clouds. Suddenly,
my face was wet with it. I wanted to lie down
with it. To rest against the almost exhausted night.

Uncertain of what to do there
I started dividing the layers, the sediment,
thinking: Usually I sleep through his sadness.

And the morning asking: Why do you keep track
of the middle of the day when you should be
waxing the moon? How can these young fragile branches
be left out in the darkness, and who set that darkness
wandering inside your heart? Who can your love ignite,
like this, like kerosene?

And then the sky lit the morning.
And then I went in to set my own house on fire.
And then I lay down next to you:
a body filling with feathers or with snow
asking: and who are you that my love can light
like this, like kerosene.

~ Olena Kalytiak Davis

Friday, January 14, 2011

Burton Malkiel: Delusions and Denials Keep the Markets Moving

Shanghai World Expo Closing Ceremony - Fusion of Art and Music

Flunked - Part 1

Up through 4th grade, American students are above-average when tested against students of other nations. After that, they begin a steady decline to the point where, by the 12th grade, American students are down near the bottom. Something is wrong in American education. Flunked went out and found some teachers who are doing something about it...

Thursday, January 13, 2011

Quote of the Day: Jonathan Blattmachr

"The U.S. tax code is the most politicized law in the entire world. Everything is driven by politics; not by what is fair or sensible."

~ Jonathan Blattmachr, tax lawyer

Is the American Dream Dead?

Among the highlights of this year’s report:

  • Hong Kong maintained its position at the top of the rankings
  • While the global economic freedom score increased, the United States dropped once again
  • Countries with the highest rate of government spending saw their GDP grow 4.5% slower than countries where government spending is better contained

Here at home, the report raises important questions about how the government’s reckless spending habit has harmed America’s competitiveness in the world.

More Evidence of Global Warming: Snow in 49 States

As evidence continues to grow that global warming is a real, man-made phenomenon, what more supporting evidence is required than here in the US we now have snow on the ground in 49 of the 50 states, the sole exception being Florida.  Paradoxically, much of North America has been experiencing a colder than average winter this year, and the UK has experienced their coldest winter in 1000 years.  It should be no surprise to anyone that this is caused by the buildup of carbon in the atmosphere, and though our kids have forgotten what snow looks like with the alarming rise in global temperatures they can still relive the experience by buying snow cones from the local Eskimo stand.  

Someone I work with who lives in Huntsville, AL sent me the photo below.

This picture has obviously been digitally altered, because there is no way anyone in Alabama could have snow on the ground.  I totally discount the local newspaper reports that Homer Gantry, of Homer's Auto and Body Shop fame, was unable to get his ancient snow plow attached to his pickup truck and now the good folks of Huntsville will just have to wait until the big thaw before they can get their cars on the road again to create more global warming.

2011 Index of Economic Freedom

I find it troubling the US keeps slipping further down this list each year, now to position #9. If we truly are the shining beacon of freedom to the world, and the last, best hope for humanity we should be in the top three.

Click to Enlarge

From the executive summary:
"Economic freedom advanced this year, regaining much of the momentum lost during the fiscal crisis and global recession. Many governments around the world have rededicated themselves to fiscal soundness, openness and reform, and the majority of countries are once again on a positive path to greater freedom."

Wednesday, January 12, 2011

Quote of the Day: Warren Myer

We libertarians cringe when presented with a “national tragedy” like the shooting of Gabriella Giffords. Not because we are somehow more or less sensitive to vilence and loss of life, but because we begin bracing for the immediate, badly thought-out expansion of state power that nearly always follows any such tragedy, whether it be 9/11 or Columbine or Oklahoma City or even Pearl Harbor. Those looking to expand the power of the state, and of state officials, make their greatest progress in the emotional aftermath of a such a tragedy. These tragedies are the political equivilent of the power play in ice hockey, when defenders of liberty find themselves temporarily shorthanded, and those wishing to expand state power rush to take advantage.

~ Warren Myer, from Never Waste a Crisis

The Difference Between Metaphor and Action

Most of the blogs I routinely read have remained silent on the shooting this weekend in Tuscon of Rep. Giffords.  Like most people I find this act reprehensible and mourn for the victims and their families as I hope for the full recovery of all who were wounded.  This is an unspeakable tragedy and no rational person wants our elected Representatives living in fear of speaking to their constituents, whether those constituents agree with their political beliefs or not.

What we know now is that the shooter, Jarod Lee Loughner, appears to be a deeply disturbed individual who was obsessed with Rep. Giffords from as early as 2007, when he asked a bizarre question at one of her events and received an answer back that he felt was humiliating.  As the facts have trickled out, it is obvious this act is not politically motivated, but the product of some kind of twisted reality that exists only in the mind of Loughner.

What I find truly repugnant and irresponsible in this entire matter is the reaction of the media.  Before any facts were known the titans of the mainstream media were rushing to blame the foes of big government, and calling for those voices to be silenced.   The enthusiasm and speed at which they jumped to this conclusion speaks volumes as they sought to exploit the act of a lone madman to push their agenda of the Fairness Doctrine, limiting free speech, gun control, the welfare state, class envy, and amnesty for illegals to keep big government rolling.

Since the beginning of time-politic, metaphors of war have been used to describe political struggles between different factions.  This  rhetoric is certainly nothing new, and has been used by both sides of the political spectrum.  Why is the media targeting one group of people with whom it disagrees?  The answer is obvious.  The apolitical madman who committed this act is alone to blame. No one demonized by the TV and print media made him scrawl "Die, bitch" on a personal correspondence from Rep. Giffords, and then pull the trigger repeatedly that Saturday morning.  There is a huge difference between metaphor and action.  The mainstream media knows this and deliberately crossed the line to promote its political agenda.  Oh, you thought the news media was impartial?  Really?  Why do you think the alternative media has grown so popular and now must be silenced?  

I, for one, believe in rigorous political debate, especially now that the country is at a crossroads, and the well-being of every citizen is threaten by massive government debt and the perpetuation of the status quo.  But those who profit handsomely and derive their power from the status quo will not go down without a fight.  There is way too much taxpayer money at stake.  May the side with the most powerful arguments win.  However, the public needs to loudly cry foul the next time such cheap tricks are attempted by so-called impartial journalists.

The most eloquent voice in the midst of this tragedy has been John Green, father of Christina Green, the 9 year old born on 9/11.  I'll let him have the final say:

"We know she wouldn’t want things changed. She would not want restrictions… I think there’s always going to be random acts. I think Christina and our family generally believes that there’s a lot of good people out there and that’s what we’re going to take away from this… We don’t wish this on anybody and I’m sure they don’t wish this on us. If we live in a country like the United States where we are more free than anywhere else then we are subject to things like this happening. And, that’s the price we have to pay."

~ John Green

Are DIY Investors Doomed by Their Reptilian Brain

I've read various articles over the years that talk about how the brain evolved over the eons and that people still have vestiges of their reptilian brains at the core of their brain and spinal cord. This part of the brain controls most of our emotional responses to external events such as fear, greed, anxiety, or self-preserving behavior, things that might be called gut reactions.  When the reward center of the brain is active, people take more financial risk.  When the anxiety center dominates, people tend to retreat from financial risk.

The enemy of the DIY investor is emotion.  The natural human response to rising markets is that fell good emotion of putting all the poker chips into game in the misguided belief that markets only go up; in falling markets, peoples' instincts are to take their money out of the market to preserve their cash-- precisely the wrong reaction in both cases.  CNBC and Fox Business scream buy, sell, buy, sell all day long to anyone who tunes in.  A parade of experts are trotted out to get the emotions churned up.  After all, TV is about sensationalism.

What's a DIY investor to do?  Turn off the stimulus.  Don't watch the business news channels except on rare occasions.  Don't check investment prices everyday.  But do develop a long-term investment plan based on a diversified asset allocation strategy.  Do practice dollar cost averaging religiously.  Do plan on investing for 30-40 years.  Turn off all that stimulation to reptilian brain that can cause you to do dumb things like move to cash at market lows.  I can't tell you how many people I knew that did that in 2008-2009, which was the buying opportunity of a generation.  They missed a gigantic upside move in prices like they will probably never see again all because their reptilian brain kicked into fear mode and their instinct for self-preservation took hold.  As John Bogle and the White Rabbit in Alice in Wonderland say:  "Don't just do something, stand there."  For long-term investors, that is the wisest advice of all.

Tuesday, January 11, 2011

Milton Friedman: Free to Choose: Part 8-- Who Protects the Worker?

Unions sometimes protect some workers - their members - but usually at the expense of other workers. Government protects its employees and special groups of workers at the expense of other workers. Both unions and government restrict freedom. Friedman explains how the competition of employers for the talents of workers leads to the highest wages and best working conditions.

Milton Friedman: Free to Choose: Part 7-- Who Protects the Consumer?

Various government agencies have been created on the claim that they will protect the consumer. These agencies restrict freedom, stifle beneficial innovation, and become agents for the industries or groups they are intended to regulate. Friedman explains how the apparent chaos of the market place, the competition of many suppliers for business, is the best protection of consumer interests.

Milton Friedman: Free to Choose: Part 6-- What's Wrong with our Schools

Parental choice and parental responsibility in the education of children is the U.S. tradition and is consistent with a free society. Centralized government control has eroded freedom and adversely affected the quality of education. The poor help pay for education for the future rich. Friedman has long advocated using vouchers to solve the problem. He explains why.

Monday, January 10, 2011

Milton Friedman: Free to Choose: Part 5-- Created Equal

The Declaration of Independence says, "all men are created equal." Friedman explains that this did not mean all persons should or will have equal talents or income. Equal opportunity to better one's self, and the right to personally benefit from the gains realized, are consistent with freedom. Equality of results requires force. Taking from some to give to others destroys freedom and removes the incentive for creating new wealth. Friedman visits India, U.S. and Britain.

"The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both." ~ Milton Friedman

Milton Friedman: Free to Choose: Part 4-- From Cradle to Grave

The welfare state arises from the attempt to do good with other people's money. Such attempts always fail because: Nobody spends somebody else's money as carefully as his own. Welfare is supply driven. Those spending the money use force to collect it and to insure those receiving it use it for "right" purposes. Good intentions are corrupted by bad means. Friedman visits U.S. and Britain.

The dollar amounts of waste, fraud and abuse that Friedman cites with horror are merely chump change by today's standards.

The Ten Greatest Trades of All-Time

International Business Times – Top 10 greatest trades of all time:

1. John Paulson’s bet against subprime mortgages
2. Jesse Livermore’s call on the Crash of 1929
3. John Templeton’s foray into Japan
4. George Soros’ breaking of BOE
5. Paul Tudor Jones’ shorting of Black Monday
6. Andrew Hall’s $100 oil prediction
7. David Tepper’s 2009 bet on financials
8. Jim Chanos’ prescient shorts
9. Jim Rogers’ early call on commodities
10. Louis Bacon’s geopolitical play

I've heard of most of these trades. They are all large macro calls, and don't include individual stocks, like going long Apple, or short Enron, MCI, AIG, GM, etc. I'm surprised they don't call out anyone shorting Japan after their dizzying bull market of the 1980s, or shorting dotcom in the 1990s.

Milton Friedman: Free to Choose: Part 3-- Anatomy of Crisis

The Great Depression has been popularly viewed as a failure of capitalism. The stock market crash, the failure of the Bank of the United States, loss of personal savings, were visible symbols supporting this belief. As Friedman explains, the real cause was the unseen failure of government policy and action. Yet this crisis resulting from government failure leads to decades of government expansion.

Fascinating discussion on Keynes, Keynesian economics, and the legacy of Keynes.

Milton Friedman: Free to Choose: Part 2-- The Tyranny of Control

Government planning and detailed control of economic activity lessens productive innovation, and consumer choice. Good, better, best, are replaced by "approved" or "authorized." Friedman shows how "established" industries or methods, seek government protection or subsidization in their attempts to stop or limit product improvements which they don't control. Friedman visits India, Japan and U.S.

Interestingly enough, Donald Rumsfeld is part of the ensuing discussion when he was a titan of industry and prior to his stint as Defense Secretary.

Sunday, January 9, 2011

Milton Friedman: Free to Choose: Part 1-- The Power of the Market

America's freedom and prosperity derive from the combination of the idea of human liberty in America's Declaration of Independence with the idea of economic freedom in Adam Smith's Wealth of Nations. Friedman explains how markets and voluntary exchange organize activity and enable people to improve their lives. He also explains the price system. Friedman visits Hong Kong, U.S. and Scotland.

The discussion in the second half of this video is as enlightening as the main program itself. It may be 25 - 30 years since this program was made, but the issues are still the same, and there are still many who believe that strict government regulation and controls are preferable to individual freedom.

Sunday Verse: Phillip Levin

What Work Is

We stand in the rain in a long line
waiting at Ford Highland Park. For work.
You know what work is--if you're
old enough to read this you know what
work is, although you may not do it.
Forget you. This is about waiting,
shifting from one foot to another.
Feeling the light rain falling like mist
into your hair, blurring your vision
until you think you see your own brother
ahead of you, maybe ten places.
You rub your glasses with your fingers,
and of course it's someone else's brother,
narrower across the shoulders than
yours but with the same sad slouch, the grin
that does not hide the stubbornness,
the sad refusal to give in to
rain, to the hours wasted waiting,
to the knowledge that somewhere ahead
a man is waiting who will say, "No,
we're not hiring today," for any
reason he wants. You love your brother,
now suddenly you can hardly stand
the love flooding you for your brother,
who's not beside you or behind or
ahead because he's home trying to
sleep off a miserable night shift
at Cadillac so he can get up
before noon to study his German.
Works eight hours a night so he can sing
Wagner, the opera you hate most,
the worst music ever invented.
How long has it been since you told him
you loved him, held his wide shoulders,
opened your eyes wide and said those words,
and maybe kissed his cheek? You've never
done something so simple, so obvious,
not because you're too young or too dumb,
not because you're jealous or even mean
or incapable of crying in
the presence of another man, no,
just because you don't know what work is.