The US Economy 2012: All Hail the Farmers and Workers Soviets

Farmers! Workers! The Party( Which one?  Doesn’t matter.) Fight for You!


Earlier in the week, the President reached into his stash and produced $170 million to “help” livestock producers by directing the federal government to step up meat purchases.

The caption for this photo in Businessweek was”Pigs at the Lehmann Brothers Farms LLC in Strawn, Illinois. Photographer: Daniel Acker/Bloomberg.” But actually, it’s Lehman Brothers with one “N” and it’s not the Wall Street guys. Too bad, I could really have riffed on that.

As a result of the this  year’s drought –and the permanent mandate that 40% of the U.S. corn crop be turned into ethanol – feed prices are rising so that producers are selling animals for slaughter early, thus leading to a glut, and lower costs to consumers.

Can’t have that.

From Bloomberg:

Obama said he also directed the Defense Department to speed up purchases and hold the meat for later use. The buying will help farmers, and the government will get a better price on products than if they were bought later, he said.

So, the government – which uses our money, and the money it borrows on our behalf -, will get a better price, while we pay more.

Nowadays, you aren’t allowed to call stuff like this cheese. “Processed cheese food” is the correct nomenclature. Lasts forever, and rates and roaches won’t touch it.

What rally floored me about this was that the government is still buying food commodities  directly.  I thought the era of government cheese was long since over.   I know people who remember receiving a Velveeta like substance in waxed cardboard boxes( and thus the origin of the urban vernacular term “cheese,’ meaning money, but I had assumed that USG these days put its food requirements out to tender on the open market for ready to use products.


The President went on to say:

“We’ll freeze it for later — but we’ve got a lot of freezers,” Obama told supporters in Council Bluffs as he kicked off a three-day visit to Iowa, a swing state that is also the country’s leading producer of pork, soybeans, corn and ethanol. “That will help ranchers, you know, who are going through tough times right now.”


So somewhere, the Government has a whole heap of foodstuffs frozen for whenever or whatever.

Have you heard of USDA’s Agricultural Marketing Service(AMS)?  I hadn’t.

AMS Commodity Procurement Division purchases a variety of food products in support of the National School Lunch Program and other food assistance programs. These purchases also help to stabilize prices in agricultural commodity markets by balancing supply and demand.

I thought supply and demand balanced themselves.  One requirement for government jobs must be that one not have taken Econ 101, and this applies apparently, not only to the permanent bureaucracy but to the executive and legislative branches as well..  The hoary grail of “price stability” dates back to the New Deal, if not the Wilson war time administration.  Price stability, one could note was a characteristic of the old Soviet Union, where prices remained the same for decades, for phantom goods stocked on empty shelves.

Coming from California, I well remember periodic uproars over the high price of lettuce( we do love our salads) during seasonal price spikes that were entirely predictable. After a lot of hot air in Sacramento, during which debates I found something else for the salad bowl, $1.59 head lettuce sooner or later when down to $.59, two for a buck on coupon days.

FDR’s Agricultural Adjustment Act was not popular. Nor did it make sense: a depression is characterized by a severe drop in output. Mandating an additional reduction leads to…more depression. Nor was destroying food food popular when so many went hungry. In the previous decade, the Bolsheviks had taken a different approach, simply stealing all the food and leaving the farmers to starve. So, I guess we’ve made some progress.

I suppose this is better than buying food and destroying it, as was done in New Deal Days, although the ethanol program comes close, taking food off the market to produce a fuel with less BTU yield than the fossil fuel used to produce it.

This kind of nonsense crosses administrations, party lines and decades.  The best agricultural policy would be none at all.  Ask yourself this: have you ever gone down to the store and found that there wasn’t any food?  Yet governments remain convinced that they can get it right so that in Europe,  once known for mountains of surplus dairy products, Norway can also experience as it did not long ago, a butter shortage.

Old timers in Indonesia where I was raised, and now live, fondly recall when government employees and workers in large firms were paid in a mix of commodities and cash. A barely developed consumer economy, largely lacking infrastructure, and periodic hyper inflation made this a valuable perk.

This former “third world” country(Now classified as lower middle income by the U.N.)has largely abandoned such practices, while we seem to be a heading for a future in which a large part of the population lines up for government cheese.

It gets worse:  When I saw a link on Drudge to a story on Labor Department subsidies  for payrolls in the states, I assumed it meant state and local governments, the destination of a good deal of stimulus funds, but to my amazement when I went back and had a look, I found this:

US Labor Department announces nearly $100 million in grants available for states to implement, improve short-time compensation or ‘work sharing’

In other words, funds will be provided  so that private employers can avoid layoffs. Now, in the US economy, 100 million isn’t a whole lot, and when apportioned among the states the amounts are laughably small, as the Labor Department  graphic shows, indeed so small that one wonders if the administrative cost will exceed the benefit, as is the case for the entire US government anti poverty effort, which if simply divided by the number of poor people, and then disbursed to them, would lift all of them over the poverty line, with a bit  of a surplus to boot.

What isn’t laughable here is the principle:  In a small part, the government is going to be paying the wages of some private sector employees.  Keep going, and, one day, you have state socialism.

So, this is manifest evidence of the Obama administration’s commitment to government management of the economy, right?  Well,  it isn’t.  You will find this odd program as subtitle D in HR3630, best known for its extension of the payroll tax cut, but which contains all kinds of other little goodies like this one.

I don’t know whose idea this was.  Rep Pelosi didn’t care for the bill at all, but she doesn’t mention this part, so perhaps it was a Democrat effort. It really doesn’t matter  It’s a proudly owned GOP bill..  Republicans have quite rightly decried Federal subsidies to state and local government payrolls.  Do similar – albeit, at this stage, far smaller – subsidies to private payrolls have virtues that those advocated by democrats do not?

The only virtue the mainstream Republican party has is that it is not the Democratic party, and that, rather than being a virtue, is just smaller scale vice, and smaller only due to lack of opportunity rather than any overriding principle.

Both parties claim to work for the benefit of the middle class, want to help struggling farmers and workers, but

The old German DDR symbol has grain for agriculture and the traditional hammer of industry, but also a calipers signifying technology. This might be closer to the mark for today’s emerging collective. Perhaps an iPad substituted for the calipers.

reach for power by favoring one group over another as it suits them. Those attracted by these blandishments should remember that that icon of oppression, the hammer and sickle, was first thought to represent the tools of honest labor, but in the end were used to crush  all into a dependent class, and to cut down any who dared to rise.

Impenetrable Care: Parsing the 2446 Pages of “Obamacare.”

Speaker Pelosi signing bill she hasn't read. She wasn't the only one, and not the first, or the last, to do so.

As have many ,I’ve railed against Congress for passing the Patient Protection and Affordable Care act without reading it. The bill famously had to be passed to find out what was in it, as Speaker Pelosi explained.

Since, like many, perhaps millions of Americans, I’m convinced I’m as smart as at least half the folks in Washington, It occurred to me that the time had come to walk the walk.  I’m going to read the whole damn thing – 2464 ages with the reconciliation – with the aim of finishing before the Supremes rule.

What do I bring to the job?  First, time. I’m retired.   This sucker is long!  A

The Emperor Justinian's Corpus Iuris is quite succinct by modern standards.

cursory search indicates that, so far, the Act runs to about 1.1 million words.  The Revised Standard Version(King James ) Bible is something  in excess of 700,000 words.  Justinian’s 7th Century code of Roman law is estimated at between two and three bibles.

I have no legal training, but rigorous high school English, four years of Latin and five of French – for that latinate legal vocabulary – and a master’s in English should help. And I spent many years in a job requiring me to read complex commercial contract language.  I am, I think, better equipped than many citizens for this task. Let’s  see if I’m up to it

 So we begin

“In the Senate of the United States,

December 24, 2009.

Resolved, That the bill from the House of Representatives (H.R. 3590) entitled ‘‘An Act to amend the Internal Revenue Code of 1986 to modify the first-time homebuyers credit in the case of members of the Armed Forces and certain

other Federal employees, and for other purposes.’’, do pass with the following…”

 Huh? Homebuyer’s credit?


Strike out all after the enacting clause and insert:


2 (a) SHORT TITLE.—This Act may be cited as the ‘‘Patient Protection and Affordable Care Act’’.

Oh,here we are. Congress does work in mysterious ways.

A fifteen page table of contents follows. Then after striking this, that, and the other thing we get to this:


 Subtitle A—Immediate Improvements in Health Care Coverage  for All Americans”

Section 2711 states that there shall be no benefit limit, either per annum or lifetime. Coverage, which may not be revoked except for fraud.   However, those benefits not considered essential under section 1302 b can be limited. Maybe. I guess we’ll see when we get to 1302(b) . Also referenced are some IRS codes. I’ll never finish this if I go and look them up as I go along.

Providers must cover

evidence-based items or services that have in

effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force.”(page 21)

Huh? Who are they?

…an independent panel of non-Federal experts in prevention and evidence-based medicine and is composed of primary care providers (such as internists, pediatricians, family physicians, gynecologists/obstetricians, nurses, and health behavior specialists who work under the auspices of the Agency for Healthcare Quality and Research.”

Never heard of them either? Me too. They hang out at HHS. Another to add to the collection of alphabet agencies such as BATF, ICE, and so on. I wonder if they have a SWAT tram.

‘‘(2) immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved;”

 So again, a reference to standards to beset by a government agency. At least I’ve heard of these guys, as we all have.

Here is also a philosophical question: what is the meaning of insurance, if we insure ourselves for foreseeable needs, such as childhood immunizations, or Ms. Fluke’s birth control pills? I really don’t remember, but I thin I got my shots at the doctor’s office, and my parent’s paid. In the 50s there was the polio epidemic and I remember getting the vaccine at school.

20 ‘‘(3) with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guide lines supported by the Health Resources and Services evidence -informed preventive care.”


I understand every word and semiotic unit in this phrase, yet have no idea what they are talking about.

The process of distilling and disseminating the best available evidence from research, practice and experience and using that evidence to inform and improve public health policy and practice. “

Now I get it. Somebody, or, rather, a whole lot of somebodies, will decide what’s best for younger people, and that’s what they will get. Interesting that the first reference I found was in Canada.

‘‘(4) with respect to women, such additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph.”(page 21)

Wait a minute. Health Resources and Services Administration? Another bunch?  I scrolled back and checked; Yup, first reference. So who are these folks?

The Health Resources and Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services, is the primary Federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable. ‘ And..”Comprising six bureaus and ten offices .


‘‘(c) VALUE-BASED INSURANCE DESIGN.—The Secretary may develop guidelines to permit a group health 7 plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.”(page 22)

Value based?

“…the idea that consumers’ out-of-pocket medical costs should be based on the value of a service to their health rather than its price.”( From the Washington Post.)

So is that clear? I thought so.

“REGULATIONS.—The Secretary shall promulgate regulations to define the dependents to which coverage shall be made available under subsection (a).”(page 22)

The Slackercare clause

Well, well, well, no wonder insurance companies wanted in on this. This next section smacks of the industrial codes of the New Deals National Reconstruction Act.

‘‘(a) IN GENERAL.—Not later than 12 months after the date of enactment of the Patient Protection and Affordable Care Act, the Secretary shall develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage, in compiling and providing to enrollees a summary of benefits and coverage explanation that accurately describes the benefits and coverage under the applicable plan or coverage. In developing such standards, the Secretary shall consult with the National Association of Insurance Commissioners (referred to in this section as the ‘NAIC’), a working group composed of representatives of health insurance-related consumer advocacy organizations, health insurance issuers, health care professionals, patient advocates including those representing individuals with limited English proficiency, and other qualified individuals.”

"Your plan for coordination of industry follows precisely our lines of cooperation." Benito Mussolini, speaking in open letter to FDR, 1933.

Pure corporatism, which is a polite way of saying classically fascist: industry, advocates and qualified individuals, all working together to tell us what w e need and what we’ll get. Given current practice, those “advocates” will likely be funded in part by the government, just as the EPA funds NGOs that then sue it.

At least, that’s the way I see it.  I suspect the people who out this together view it as a collaborative effort of the “healthcare community.”

And yet another group involved, without even a name yet, but they will no doubt get plenty of office space and a snazzy web page, funding and per diems.

Pages 25-27 describe benefits summary standards. This seems harmless though rather prescriptive, but it is noteworthy that the sections preempts any state regulation.Is it really harmless? A government controlled consortium of “interestd” parties will define the language in which we describe insurance terms and medical procedures. Will they think out of the box, or box us in?

Also, there is the philosophical question: would not insurance companies that gave out fraudulent or impenetrable benefit summaries suffer in the marketplace? In making such market based objections one is in the position of howling after a train that is disappearing down the track or more accurately left before the passenger arrived,or should this legislation stand, the metaphor would be that the station is closed, and grass has overgrown the rusting rails.

I have barely reached page 30, but have already learned that the Federal government is even  more vast than I knew and is set to be even more so, beyond  imagination as that is.  This act, with its multi-aency involvement, working groups and standard setting, is set to loose great torrents of administrative law that will in time seep into every aspect of our lives  It is classically fascist in that it aims  to shepherd disparate social and economic groups to an ostensibly mutually beneficial agreement under the eye and ultimately enforcement, of the state.

The emperor Diocletian used coercion, micromanagement and a debased currency in trying to halt economic decline. Sound familiar?

The urge to control economic activity is an old one, and the record of failure for such efforts is equally ancient.

  (More to come)




Legislative Inflation: The Weimar Solution

Patient Protection and Affordable Care Act in physical form

As the Supreme court considers the constitutionality of the Patient Protection and Affordable Care Act (Obamacare) it is meet to consider this statute in another light: length.

The bill which famously had to be read to determine its contents is often referenced as being around 1500 pages – estimates vary.  How many pages of regulations and administrative law cases this will spawn is anybody’s guess, but the exponent will be very large.

Lengthy laws and codes are nothing new, as is s alack of consensus on the exact length The Code of Justinian was two to three times the length of the bible( I.m not sure which one) according to a cursory internet search.

The Anglo Saxon tradition seems to be a bit more pithy, and to have survived the Norman invasion as  as the Magna Carta fit on a single length of parchment, and the quite succinct United Sates  Declaration of Independence and Constitution.

Tend: Holding steady. See for more fun stuff.

But that was then.  Now there is  for example,  the monstrous United States Tax code, which metastasizes daily.  16,000 plus pages, by some counts.  That’s a lot of dead trees, but the pulp based holocaust is at least tempered by digital formatting..

If ignorance of the law is no excuse, then, at this point we are all guilty of something,

When the inflation on Germany’s Weimar republic reached a height where the denominations were simply beyond human comprehension, they did find a solution.

I would suggest the same for many of our statutes.




Death Spiral: Kathleen Sibelius and W.B. Yeats

On 29 February,  HHS Secretary Kathleen Sibelius was on the Hill testifying as to why the Affordable Care Act is not the cause of the decline in employer provided health insurance.  When asked about the decline in employer provided health insurance coverage, the Secretary replied:*

“Well again, Congressman, what you’re seeing…  It wouldn’t have mattered if we had passed the Affordable Care Act or not. The private market is in a death spiral.”

In health insurance parlance, a “death spiral” is:

“The health insurance death spiral occurs when individuals with higher health expenses are driven by market forces towards one particular plan. The higher costs associated with individuals who have pre-existing health conditions cause premiums and out-of-pocket costs to escalate, which drives healthier individuals out of the plan, because the cost becomes too high for the small amount of need they anticipate. This causes premiums and out-of-pocket costs escalate further because there aren’t as many healthy individuals left to absorb the risk, so even more healthy people leave the plan, and prices climb even higher. This cycle continues spiraling on and on until prices are so high that the coverage is unaffordable.”.(source)

This describes Obamacare.  Of course the private market is dying.  That’s the idea.  It always was.

It is something of a cliche to quote the most well known of Yeats, but when I read the word death spiral could not but hep think of the falcon’s gyre in “The Second Coming.”

                                     Turning and turning in the widening gyre
                                     The falcon cannot hear the falconer;
                                     Things fall apart; the centre cannot hold;
                                     Mere anarchy is loosed upon the world

This administration’s attack on the insurance market is only one instance of the anarchy they have loosed  Obama promised fundamental change.  This is one promise he has kept.

                                     The blood-dimmed tide is loosed, and everywhere
                                      he ceremony of innocence is drowned;

Marx and Engels condemned the bourgeoisie in that  ” It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors.”   That of course was what led to the great advances in human prosperity and freedom.  The modern Left wishes to sunder the ties of law and civic responsibility that have made Western  Civilization so successful,  and reestablish those feudal ties to our natural superiors, the governing class. The sundering of of ancient ties to our freedoms has been accomplished without the blood once foretold by the likes of Bill Ayers and Bernardine Dohrn, but that “ceremony of innocence,” our confident sense of self, the optimism and energy that so entranced deTocqueville, are indeed drowning.. And thus we turn to government, even for something so basic as deciding who will care for our bodies, and how this should be done.

And those who should be guarding our institutions, seem helpless, lost, or worse, indifferent, while the new vanguard advances heedless to all objection

                                   The best lack all conviction, while the worst
                                   Are full of passionate intensity.

There is no question as to the “passionate Intensity” of this administration in pursuing its goals. Indeed, the death spiral Ms Sibelius cites is an unintended metaphor for what may be yet to come, as she testified on March 2nd:

Sebelius told a House panel Thursday that a reduction in the number of human beings born in the United States will compensate employers and insurers for the cost of complying with the new HHS mandate that will require all health-care plans to cover sterilizations and all FDA-approved contraceptives, including those that cause abortions.

“The reduction in the number of pregnancies compensates for the cost of contraception,” Sebelius said. She went on to say the estimated cost is “down not up.”

On the less weighty side of things, Ms Sibleius’ comment is typical of the kind of flip accounting gimmicks that are thrown up by all sides in political discourse.  In the longer view, it is deeply troubling. The Secretary is then perhaps unaware unaware of the demographic death spiral in the old cultures of Europe, where the birthrates for native Europeans – and yes, that means whites – have long since fallen below  replacement.

Or perhaps she is, and subscribes to the notion that the shortfall in human beings can be replaced with industrious immigrants.  One need only look to Britain where population has increased due to immigration from countries with a much lower level of economic, and human development, resulting in vast welfare dependency, defiant and resistant enclaves committed to Islamic rule, and a government that submits to the demands  of the invaders for whom it threw open the gates. Such a society most certainly “lacks all confidence.”

In the U.S., births were at replacement rate as recently as 2007, after thirty- five years  below that rate, 2.2 live births per woman, necessary to maintain a population, but has since dropped again.

“The rule which we intend to promulgate in the near future around implementation will require insurance companies, not a religious employer, but the insurance company to provide coverage for contraceptives,” Sibelius told the subcommittee.

The key word is “promulgate”.  It smacks of the arrogance of imperium. The praetors of the left know best. What we have here is a whiff of the totalitarian population control fantasies of the 1970s, a leading exponent of which was  John Holden, Obama’s “Science Czar.” He has since tepidly disavowed these views( rather recently, in fact, when they came to view), but the lesson is that he was wrong then, yet this administration is once again looking to population control, and, one could say, the eugenics of Margaret Sanger, when one considers African -American abortion rates, to manage a perceived problem.

The lLft simply doesn’t like people, other than those who form their self anointed elects( and not always then, as the history of leftist purges demonstrates)  The communist regimes of Europe and Asia spoke of their love of the masses, then slaughtered them.  The soft totalitarianism of the modern left will keep them from being born.

Coda: Finally, in a story that has hardly blazed across the airwaves, The estimated ten year cost of affordable Care, according to the CBO has doubled and the impact on employer provided coverage far more severe than anticipated.  Isn’t it always so?

*On these posts, it is my habit to use only “mainstream media”  as sources.  I am often alerted to stories by “right wing blogs,” but as I hope, in my small way, to perhaps , one at a time, convince the unconvinced, I research the stories in the traditional media which, quite undeservedly, retain a reputation for accuracy and even handedness.Yet, I was unable to find any reference on to Ms Sibelius’ testimony in the alphabet services. It’s real – you can see the video here.

Unemployment Figures: Rosy Scenario is a Lyng Slut, and the MSM Pimp Her.

Good News in the January Employment figures : MSNBC Headlines :” Jobless rate drops to lowest level in almost three years.”

The market rises.  Democrats celebrate.  Republicans quake.

Those not too lazy to scroll to the bottom of the page, and click a few links to verify this pablum find something different.

In the second to last  of around twenty paragraphs, the reader finds this:

Even with the January jobs gain, the employment market still faces a long road back to full health. The nation has about 5.6 million fewer jobs than it did when the recession began in late 2007. And there are still 12.8 million people out of work, though that is the fewest since the recession ended. An additional 11 million are either working

part-time but would prefer full-time work, or have stopped searching for jobs.

The article quotes the President as saying there remain, ” too many Americans who need a job.”

He is entirely right on that.  Clicking around the Bureau of Labor Statistics, one finds this under “Employment Situation.”

After accounting for the annual adjustments to the population controls, the employment-population ratio (58.5 percent) rose in January, while the civilian labor force participation rate held at 63.7 percent. (See table A-1. For additional information about the effects of the population adjustments, see table C.)

For a similarly low employment-populatoin ratios haven’t been seen since the Carter years. 

This chart tells a sorry tale of labor force participation

Series Id: LNS11300000 Seasonally Adjusted Series title: (Seas) Labor Force Participation Rate Labor force status: Civilian labor force participation rate Type of data: Percent or rate Age: 16 years and over

Discourage enough people, and make it easier for those not inclined to work, and indeed the unemployment rate will decline.  While there is little doubt that a Republican administration in a similar pickle would also be crowing, one wonders how the media would be pitching it.

As for the jobs that are being added, I would posit that the improvement reflects the resiliency of the business cycle, which, while distorted by statism, hasn’t been entirely crushed – yet.

Elizabeth Warren: the Mathematics of Warm Fuzziness

Below is a transcript of Warren’s remarks: “I hear all this, you know, ‘Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own — nobody. “You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did. “Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.”

A relative posted this on my Facebook Wall. She knows where I stand and enjoys provoking me, Her comment was, “Napalm!” Presumably meaning that Ms Warrens argument blows away any refutation

I had already seen this as it made quite a stir, but had dismissed it as the usual bushwa, unworthy of comment. But seeing this come from my relative, a prosperous inhabitant of Northern Virginia, comfortably ensconced  within the the  confines of the permanent   government prosperity bubble, a woman who fits exactly the Obama Campaign 2012 target group of well-paid white professionals after its abandonment of white working men, it gave me pause. The strategy is working.



My Facebook response:

Barf! As P.J. O’Rourke said, Liberalism is communism sold by the drink, and this lady has downed quite a few. A fatuous One pctr of the academic academic nomenklatura, who would lack for nothing in the people’s paradise she advocates. Cf, Milovan Djilas, “The New Class.”


Napalm hardly necessary: a match applied to the Marxist flatulence here would do the trick. Ms Warren seems to believe that a primordial government arrived in North America and then built an infrastructure, perhaps using gold they found in treasure caves, and then business made money, and she is now presenting the bill. Where does she think the revenue for building roads and bridges comes from? From the productive sector, not government. She presents an absurd, ex nihilo argument that is only coherent to one who believes the people(small c people, left talk for the state ) has the primary claim to property, whether extant or newly created.

While faintly praising her example factory owner for achievement, Warren says it is “the rest of us” who paid for the infrastructure and ancillary services that support the enterprise. Leaving aside fees and levies specific to industrial construction, which can be quite onerous, where did “the rest of us” get the money that was taxed in order to pay for the civic goods the industrialist is so greedily exploiting?

Ms. Warren, a tenured professor at Harvard, author of many published journal articles as well as mass market books on personal finance, certainly has a more extensive corpus of work than the President she echoes, but credentials don’t make an argument. Clearly, most community organizers and professors have little understanding of capital and competition.

Neither Ms Warren nor the President have any experience in ventures aimed at profit. Ms. Warren might try a turn at introspection. Have not “the rest of us” helped Harvard achieve its status as a sanctum for thinkers whose ideas need not stand up to real world conditions and enjoy job protection as iron bound as any shop steward? Harvard may be private, but it is no stranger to federal money. Even better, major universities rarely if ever go out of business. Harvard can not only raise the price for its brand but use it to obtain government grants, and encourage students to mortgage their futures for the privilege of a Harvard education.

Fair enough; that’s the way it works.

In my Facebook Post, I called Ms Warren a “One Percenter.” Her campaign finance disclosures, vague as they are allowed to be under the rules still indicate that she is definitely one of those under-fleeced millionaires the Republicans have been protecting from a righteous shearing.

Well, one might think, she, like Warren Buffet, Mark Damon and others of prominence are taking a principled stand, even though it will cause her to pay more.

I doubt it somehow. Such people have access to legal and accounting services that will keep their assessments quite comfortable within the convoluted and ever expanding tax code.

Even were they to be shorn completely down to their well cared for skins, it wouldn’t make much of a difference. The WSJ published a story stating that the entire income of the plus 250k crowd would not pay for the deficit. This was gleefully debunked, but the concept is worth further examination.


But all of the taxable income of those earning more than $100,000 in 2008 was actually $3.4 trillion, more than double the figure published in the editorial. We checked the math ourselves using IRS data. The Journal ran a correction on April 19 on page A16. The online version of the editorial was corrected two days later. The bottom of the editorial now says: “An earlier version of this story incorrectly stated that the total taxable income of Americans earning over $100,000 in 2008 was $1.582 trillion. The correct figure is $3.4 trillion.”

If you go to the OMB site, you’ll find something rather disingenuously called “The President’s Budget.” Disingenuous because this budget has never been submitted to Congress. Also a little sneaky is that while some programs are touted with costs and “savings” the total of the budget can only be found by clicking on to some excel tables, which will turn quite a few people off.( Even I can make graphs with excel spreadsheets; why don’t these guys? Would it then be too easy to see what is going on?)

2011 total expenditures are predicted to be 381889 million(That’s how we say “trillion.”)

So, if all those rich people have an equal or better year as they did in 2008, and the White house projections are correct, we will have a half trillion or less deficit. If we take ALL their taxable income. The following year, we could confiscate their assets,as they would have given up on earning money.

A look at some IRS stats will show you that the rich are already paying the most, and at progressive rates, while about half the country pays nothing at all. Even if you accept this cultural Marxist frenzy of envy based redistribution, we aren’t going to be able to tax our way out of this. Not on the rich. Look for the 25000,00 – or is it 200,000, accounts vary – floor to descend.

The Administration knows these things to be true; its supporters refuse to see. Like my relative, they go to bed at night and sleep well in the complacency of unearned virtue and bogus “sacrifice.”.

How to Save America( for a while): Go Venezuelan

“Hey! Matilda, Matilda, Matilda, she take me money and run Venezuela.” Harry Belafonte, 1953

In the wake of the Keystone XL pipeline cancellation(or delay, depending on where you stand), the quantum increase in proven reserves of recoverable hydrocarbons in North America has been covered even more by those in favor of their development.  It isn’t just about opening ANWR anymore.  We are talking about oil and gas from North Dakota and Ohio, among other places.  That’s right, Ohio!

This has to do with oil prices pretty steady close to a hundred dollars a barrel and the “fracking revolution” which is actually  a refinement of long used techniques. Environmental lobbies predict near doomsday scenarios of poisoned aquifers and human  caused earthquakes, while proponents feel  we cannot afford not to develop these resources.

Given the Obama’ administration’s green predilection, it would seem we should  expect continued opposition to traditional energy development in the US. The congress thought so when Republicans  put a rider in an appropriations bill forcing Mr. Obama to say up or down within 90 days, when the administration planned to make its decision ion on the pipeline, already studied for three years, after the election this year.

Pro oil and gas folks naturally expected him to cancel it at that point so forced him to do it up front.  I’m not so sure it would played out this way.  Let’s try a little thought experiment.

The US is saddled with massive debt, and there is even greater liability off the books than the enormous sum the government does acknowledge.  Debt free government is a thing of the past, but  if we are to avoid default or monetizaton and hyperinflation,  the debt to GDP ratio needs to return to historic norms, and this appears politically impossible.

So we are screwed, right?

Perhaps not right away.

The President, in his State of the Union address,  while excoriating Big Oil ( who doesn’t? Not me, but I’m not a politician) announced a comprehensive plan to open up the majority of offshore potential for drilling.

Pre-election positioning or a sign of something larger?

Imagine a second Obama administration, free of any constraint, and without a need to secure its base.  The administration could then open the way to massive development of hydrocarbon based energy sources.  A  NIxon going to China moment?

Not at all,  More like Obama going to Venezuela.  The revenues could be used to support his statist projects in green energy, as well as maintain and expand the welfare state – and keep the bond ratings agencies at bay as deficits grew at a slower rate.

This tack could assure democrat administrations for some time to come, but Democrat or Republican in the White House, would the government be wise enough  to avoid the resource trap?

We could use the windfall to finance a sovereign wealth fund, as did Norway, squander it as did Britain, or if we really have as much as some experts figure, export it like crazy, and use the receipts to fund popular subsidies and prop up ailing nationalized industries, as in Venezuela.

Which would you bet on?

So, instead of “take me money and run Venezuela, it would be “Take the

money and run the country like Venezuela.”  Mr. Belafonte would no doubt approve.

Low Voltage Sales May Mean End of People’s Green Car

…but not an end to the impulses that led to the latest, or soon to be latest, green disaster.

The Volt is likely soon to join distinguished company: The Edsel, Gremlin, Pinto, and of course, the Yugo (Image: Sodahead)

GM said it would sell 10,000 of its signature electric, the Chevy Volt, a key component of Obama’s “Green Jobs” push.  Reuters reports that final sales for 2011 were “around 8000.”

The spin never quite stops.  While mathematically, it’s fair to round up, the actual figure of 7,671 looks even worse.  On the bright side, that’s 329 massive,toxic batteries that will not have to be disposed of one day.

Although its hard to track down totals( Neil Cavuto on Fox wasn’t quit able to), a large portion of  2011 Volt sales are to fleet buyers, prominent among whom is GE.  No surprise here, as GE has long since ditched its role of a quality American producer of electrical and industrial goods, from light bulbs to locomotives, in favor of the security of being a government favored enterprise.  Municipal governments have also been buyers in Michigan, Florida, where federal funding was used, New York City, Las Vegas, and of course the Feds are in for a few as well.  A more exhaustive search might well come up with further examples.

GM’s agreement to build  Volts in China leads some to think that production might be offshored entirely, while others think that line production will soon end, with volts being made only to order,


Some commenters on an earlier posthere on the Volt defended the government’s

The Volt has done better than this 70s Soviet Electric, with a total production of 47.

role in electric vehicle development by citing spin offs from defense research and development.  They have it backwards.  The internet wasn’t invented so I could write this post; GPS wasn’t developed so amateur hikers who couldn’t run compass courses didn’t get lost.  The government developed these technologies in carrying  out its constitutional mandate to defend the nation. Further developments in the private sector brought the technology to the consumer, and government uses privately developed technology as well.  The drone operator using a joystick is utilizing technology developed for missile control, game playing, and industrial uses, a  continuous cross fertilization going back many decades.

German prisoners near Giesen, 1945. Remarkably advanced engineering. There was nothing like it in America. Yet the disciplined German collective lost .

The German National Socialists did have  a vision of prosperous citizens zipping about the autobahn in “people’s cars”, but the Volks with its air cooled engine and the advanced road network were developed for military purposes. The Russians didn’t put the first Sputnik up so I could one day watch American cable here in Bali, but to develop their military communication and spying capability.

Soviet irrigation projects dried up most of theAral sea, ending a productive fishery.

The Soviets wanted to build a Socialist man.  Stalin thought he could change the drainage of Eurasia, and Khrushchev made the deserts bloom, and then added the Aral sea to the expanding sands.  The Volt springs from a softer, but quite recognizable  collectivist impulse

This is the hubris of the Left.  It waxes and wanes, but never changes.  The Left sees the world as it is and then tries  to reshape it, without reference to human nature, laws of economics,  or even physics.  Obama and Chu want us driving electrics, and  bring the influence of government to bear, so that we who need instruction, learn, and follow the proper path.

A momentary triumph of the collective.

But while our leaders work from a collectivist impulse we are not yet a collective.

Reality never matches the collectivist ideal.

Consumers in the old East Bloc had a limited choice of goods, many of which no one wanted in any case.  In the United Sates, the administration and GM cannot force the Volt on us, and have instead used borrowed dollars for subsidies to supplement moral suasion in trying to induce consumers to want the car. One would hope that the President and his faction would learn from this, but given the history of the Left, this is unlikely. Rather , should this administration continue in power, more likley, while compulsion is not yet possible, incentive may be replaced with penalty.  Rather than a bayonet, six dollar gasoline.

(Meanwhile, in other news: BMW sales reach record highs…)


2012: Plus Ca Change…Down with the Czars, up with the Czars


I am strong

I am big and well made.

I am sick of a nation’s stenches.

I am sick of propertied czars.

I have deamed my great dream of their passing.

I have gathered my tools  and my charts.

My plans are finished and practical.

I shall roll up my sleeves- and make America over.

“The Dreamer”-Rexford Tugwell, Assistant Secretary of Agriculture

and member of  FDR’s “Brain Trust.”


Remind you of anybody?

My wish for 2012 is that America not be made over and remain fundamentally untransformed.

The Commerce Clause: Herding Economic Animals into the Statist Corral

Article I, Section 8, Clause 3

(Congress shall have Power) To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;


This same question—what are the limits of Congress’s authority under the Commerce Clause—is at the heart of the dispute over the health-care law’s individual mandate.Adam Winkler, “Daily Beast, November 11, 20011


Man is an economic animal as well as a political animal andis, therefore, born into an industrial system as inevitably as he isborn into a political state. -Henry J. Thurston, “The  Teaching of Economics in secondary Schools Schools, The School Review, Vol.4,no.8, 1896



This administration is rather big on logos.

There are plenty of amateur constitutional scholars out there; I’m not one, yet it seems to me that a little common sense and average reasoning skills would lead one to be deeply troubled by Obamacare, not just in itself, but also as proof that our governed really knows no limits, and only observes those that suit its purposes of the moment.

If the government can tell you to buy a product you may not want or need, and can tell the seller how to configure the product, what can’t the government do in any field of economic activity?

If Obamacare can tell you to buy insurance, and tell the insurance company that it must keep your children on your policy until they are 26, why can’ t the government tell you to buy an electric car, and the manufacturer that it must include GPS and a high end stereo whether you want these features or not?

No doubt it can, and may well do so one day.

If the government can tell Insurance companies what their profit margin should be, as Obama care does with the “medical loss ratio” proviso,  why can’t the government dictate what is an acceptable profit in any industry, even to the point of none at all?

Under the line of argument presented by Obamacare’s defenders, and if indeed man is an economic animal, then there is little of our behavior that  government cannot regulate.  The devil can quote scripture, and this administration can and will cite the Constitution of a government clearly conceived to be limited, in order to further its limitless ambition.