Here we go again....

Well, we did it. Americans elected B Hussein to another term. While I am somewhat sickened by the thought of another four years of trying to navigate a socialist in the White House, maybe we had it coming. We are in a fiscal mess. $16T in debt. Unemployment at ~8% and the lowest percentage of Americans actually in the workforce in decades. Housing has not come back and inflation is on its way and it is really just a matter of time before the awful effects of this nasty condition inflict harm. All this is pretty bleak, but there is a bright spot. Americans only make difficult decisions when they have to, no later and no earlier. We have not hit rock bottom yet. We are still the best looking pig at the show. Better to be American than any place in Europe or South America. India is no threat. Their government is a bigger joke than our own. China is no threat. With GDP at $2500 per capita, they have years to go to be a threat to the US. Africa, they are 200 years or more behind with a growing Islamic tendency that will annihilate itself. What we can do is regress and that is exactly what I believe will happen. We will still be on top, but at a much lower standard of living. Kids will no longer surpass their parents' standard of living. Business investment and innovation will lag and the formation of capital stock will reverse course. Fortunately, B Hussein's policies will take us to rock bottom and much faster than those of Mitt Romney. Only then will Americans wake up and realize that 20% of the population cannot possibly care entirely for the other 80%. Only then will the unproductive realize they have killed the goose that laid the golden eggs. It is scary, but it was inevitable. It has happened in every prosperous society for 2500 years. When the masses realize they can plunder the public treasury, it is just a matter of time before the decay begins. I can only hope that we hit rock bottom soon so my kids have a chance at a future that is bright. Otherwise, they will spend their adulthood dealing with the effects of a government that has failed the people. It is sad to think, but I am not sure Romney would have been much better. A guy that spends 7 years running for president after serving as governor is really a career politician, not a businessman or big government reformer.

The Volt...

Very funny video...I do smell something?

Chevy Volt - Building a Better Tomorrow from Ben Howe on Vimeo.

New from the RNC. Hope for Change....

Makers vs Takers

An editorial from the WSJ today paints a very bleak picture for producing Americans. Government is now the biggest industry....

Makers vs Takers.

American Production

Some interesting articles on US Manufacturing prowess and our place in the the world. First:

Per Capita GDP US vs China.

Second:

WSJ Article.

Mark Perry has a great blog as well.

Governments and Unions

A must read:


Lew Rockwell

Money and Politics

Just a sample of political donations from the side that says corporations are buying politicians:

Based on SEC filings as of September 13, 2010, here are how several large union PACs are donating to political candidates:


International Brotherhood of Electrical Workers has donated $2,608,873 to political candidates. 98% of their donations have gone to Democrats.

Operating Engineers Union has donated $2,104,300 to political candidates. 89% of their donations have gone to Democrats.

American Federation of State/County/Municipal Employees has donated $1,914,500 to political candidates. 99% of their donations have done to Democrats.

Teamsters Union has donated $1,863,010 to political candidates. 98% of their donations have gone to Democrats.

American Federation of Teachers has donated $1,809,750 to political candidates. 100% of their donations have gone to Democrats.

Laborers Union has donated $1,807,500 to political candidates. 96% of their donations have gone to Democrats.

Machinists and Aerospace Workers Union has donated $1,726,500 to political candidates. 98% of their donations have gone to Democrats.

Carpenters & Joiners Union has donated $1,716,875 to political candidates. 84% of their donations have gone to Democrats.

National Air Traffic Controllers Association has donated $1,674,900 to political candidates. 83% have gone to Democrats.

State of the Union...

The state of events in Wisconsin are hopefully a turning point in American government. Johna Goldberg has an excellent column on why public sector unions are so bad for the tax payers of this country.

Even Roosevelt (the FDR variety) understood there was conflict of interest in public sector unions. While I am not a fan of labor unions, they have served a purpose over the years. However, the private sector unions could only go so far as to bankrupt a company. In the case of public sector unions, they can bankrupt states and that is a totally different matter.

I hope Wisconsin stays the course and doesn't cave like Indiana. We can only be so lucky as to replace B Hussein with someone who will be equally vigilant in DC post 2012.

Misallocation of Capital

The WSJ had a fabulous editorial yesterday that is a must read.

Here are some key points..

Less laudable is Mr. Immelt's habit of inviting government to be his business partner and promoter. In his 2008 letter to shareholders, the CEO declared that the financial crisis and election of Mr. Obama meant that the U.S. economy had been fundamentally "reset."

His key line: "The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."

This is an invitation to the same kind of capital misallocation that led to the housing bubble. Mr. Immelt's particular goal is to promote policies and subsidies that aid green energy, in which GE is deeply invested. But if wind turbines are a good business, they will find a market on their own. If wind power turns out to be an uncompetitive bust, then the government will have misallocated hundreds of billions more dollars that could have found more productive uses.

and this...

Yet Tuesday night can't erase the fact that in his first two years Mr. Obama has overseen an historic expansion of government. He has increased federal spending to as much as 25% of the economy from a modern average between 20% and 21%. In terms of allocating resources, this means that 4% of annual economic output was suddenly taken out of private hands and put under government control.

and finally...

Government "investments"—Mr. Obama's favorite word last night—are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices. In our view, that 4% of GDP a year could have contributed far more to economic recovery had it stayed in private hands.

Capital is a scarce resource. I put my bet on the private sector allocating it to the highest value rather by B Hussein and his cronies.

What's wrong with Social Security

From the US Government site:

Monthly Benefits

In 1950 all Social Security beneficiaries received a general "cost-of-living" increase--for the first time since benefits began in 1940. Ida May Fuller is seen here receiving her first increased benefit check on October 3, 1950.

Payment of monthly Social Security benefits began in January 1940, and were authorized not only for aged retired workers but for their aged wives or widows, children under age 18, and surviving aged parents. On January 31, 1940, the first monthly retirement check was issued to Ida May Fuller of Ludlow, Vermont, in the amount of $22.54. Miss Fuller, a Legal Secretary, retired in November 1939. She started collecting benefits in January 1940 at age 65 and lived to be 100 years old, dying in 1975. (Examining the first batch of checks) Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits.

I guess there is such thing as a free lunch....for a while.

Protectionist Questions

I read an old column by Prof. Boudreaux today that is worth posting. I am sure there is going to be something in the SOTUS address tonight where this will be valuable knowledge.

Ask the protectionist.

I especially like the following:

Many of you protectionists hyperventilate about America's alleged loss of manufacturing prowess. Are you aware that your worries on this front arise solely because you confuse manufacturing jobs with manufacturing output? Manufacturing jobs, as a percentage of all jobs in America, are indeed declining. And you hysterically interpret this fact as somehow proving that foreign producers are undermining America's economy.

But are you aware that America's manufacturing output today is near its all-time high? Are you aware also that America is by far the world's largest exporter of manufactured goods?

Are you aware that the reason manufacturing jobs are declining as a share of all jobs has far more to do with increased productivity of American industry -- that is, increased strength of American industry -- than it has to do with increased foreign trade? Manufacturing jobs are being lost to technology and improved efficiencies. Do you think that this trend is undesirable?

Getting Rich

Thomas Sowell has a brilliant column on the rich. There are plenty of people on the left that criminalize wealth without understanding where it originated.

New Heroes vs. Old.

Today, we tend to think of John D. Rockefeller as just one of those famous rich people. But Rockefeller didn't just "happen to have money." How he got rich is the real story-- and it is a story whose implications reach far beyond that one particular individual.

Before Rockefeller's innovations reduced the price of kerosene to a fraction of what it had once been, there wasn't a lot for poor people to do when nightfall came, other than go to bed. But the advent of cheap kerosene added hours of light and activity to each day for people with low or moderate incomes.

Econ 101 but so easily forgotten.

Social Security Hole

More Trade Is Good....For Everyone.

Good Top-Ten list on why trade is good....

Top Ten.

What's in a number part II.

What's a trillion look like?

See it here.

Now the government wants to move the debt ceiling past $14 Trillion? I think we have a problem....

What's in a number?

8000. We took on Obamacare for 8000 people.

See the story here.

Unbelievable. Nothing like politicians creating a problem....

Great Sowell Articles

Here are two great Thomas Sowell Columns:

Number One...

Number Two...

How To Reduce Unemployment.

This article posted today at Real Clear Markets offers some good advice for POTUS to consider. In addition to these 5 things, I can think of a few additional items to consider.

1. Drop the corporate income tax altogether. Business make investment choices based on after-tax returns. Increasing those returns will give more marginal investments an opportunity to generate a return and produce more income to tax. This also avoids the double-taxation of business profits and put equity and debt financing on equal ground. By giving equity financing the same status a debt financing it should reduce the need for companies to take on too much debt making our businesses more stable and strong. No corporate income tax would also free up monies that no longer have to be spent to hire tax attorneys and accountants that add no value to a business.

2. Cut government bureaucracy by 50%. The more government employees you have, the more busy-bodies there are to create rules and regulations. Reduce the number of people then slash the number regulations by 50%. Do we really need a regulation of bath room fixture height? In addition, there should not be multiple government agencies with oversight of the same issues. Take customs for instance. There are no fewer than 5 different agencies with their hand in the customs clearance process. This is absurd.

3. Every state should be a right-to-work state. The federal and state government should ban unionization of their workforce. Work rules where the people paying the salaries have little to no say in those rules is wrong. A collective bargaining agreement that is under the influence of politicians is not good for the tax payers. This government unionization drives up the cost of labor with no increase in productivity. That is not good for the economy.

4. Remove the minimum wage entirely. You cannot pay $7.25 for labor that is only producing $5 in value. Sorry that is a recipe for bankruptcy or unemployment.

I am sure there are many more ideas out there. In general, government needs to get out of the way and stop driving up the cost to hire workers.

Poor get richer too...

From another of my favorite blogs....

Living the good life

One can argue that the gap between rich and poor is growing. I tend to doubt this, but as Professor Perry points out, life is getting better for everyone.

Merry Christmas.

Health Care as a "Right"

This might be the best editorial on Health Care ever written:

From Cafe Hayek and Don Boudreaux

Could not be better said...