Peter Schiff on the Current and Long Term American Economic Spin Down...

polifrog

Polifrog <---> Peter Shiff -- I'm not sure there is a difference.

Peter Schiff:

We are in a depression in the United States but the depression was interrupted by some economic stimulus that actually made the problems worse. Now as the stimulus is wearing off the depression is resuming with a vengeance because government is interfering with the correction.

...

The source of our misery is government and the solution is free markets, capitalism. That when we did have that a long time ago our economy thrived and we created a lot of wealth which we have since dissipated with redistributionist socialist programs that have been layered onto the economy.

We need to go back to what made us great; not what is bankrupting us.

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Bailing out Europe's Social Democracy Junkies...

polifrog

NationalPost:

Thursday's announcement that the U.S. Federal Reserve and other central banks would be providing "dollar liquidity" to European banks represents more smoke and mirrors.

...

However, the notion that they might be considering some kind of new "Marshall Plan" is delusional. Under the Marshall Plan, the United States helped a Europe ravaged by war and willing, indeed desperate, to work. Today's Europe is ravaged by the delusions of social democracy, economic security and an ill-conceived single-currency area. Its economy has been undermined by its banks' feeding its constituent countries' debt habit.

That so many central banks work in unison to stem European insolvency is an indication of just how weak Europe is. That they do so without addressing the cause of that insolvency, Social Democracy, is a predictor of Europe's looming failure.

Neil Young called it first, though.

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Ford, An American Company That is Still American...

polifrog

I've been meaning to post this advert.

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So, How Does the SEC Define a Ponzi Scheme?

polifrog

SEC:

What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

...

With little or no legitimate earnings, the schemes require a consistent flow of money from new investors to continue. Ponzi schemes tend to collapse when it becomes difficult to recruit new investors or when a large number of investors ask to cash out.

I wonder if the SEC is on to this?

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John Stewart / Solyndra

polifrog

Aggregation with a smile:

Greece is Broke Again, Germany is Tired and Europe is Boned...

polifrog



Simon Black:

Why should a German hairdresser who retires at age 65 stick his neck out so that a Greek hairdresser can retire at age 50? This, from a continent that was perpetually at war with itself for over a thousand years.

With a weary Germany, Europe turns with empty pockets to China:

It’s a testament to the absurdity of our failed financial system when the highly indebted rich countries of the world have to go to China, a nation of peasants, for a bailout.

Don't think that China is all into Keynesian pump priming the world so they can sell their goods. No. China is buying political influence in the western world at the expense of western citizens who made the mistake of trading individual responsibility for shared responsibility.

We are the ones China has been waiting for.




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Poor Governance ... Roosting Chickens...

polifrog




Washington Post:

... President Obama suffered a sharp rebuke Tuesday when voters in New York elected a conservative Republican to represent a Democratic district that has not been in GOP hands since the 1920s.

...

Turner, 70, a retired cable TV executive who has never served in elective office, defeated Democratic State Assemblyman David Weprin, 55, who has two decades of experience in public service, to fill the seat left vacant when Anthony Weiner (D) resigned in disgrace in June after more than 12 years in the House.

The defeat came as Republicans trounced Democrats in another special House election Tuesday, in northern Nevada, where Republican Mark Amodei led Democrat Kate Marshall, 56 percent to 39 percent almost from the start.

...

In both contests, the GOP pulled ahead by linking the Democratic candidate to Obama and his handling of the economy. Both Republican contenders urged voters to “send a message” to the president.

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Karl Denninger With Max Keiser...

polifrog

The Keynesian face of government has become unpopular, Obama's current "jobs bill" notwithstanding, but the soul of Western government remains Keynesian.

Denninger and Keiser discuss that Keynesian soul via its corporal circulatory system based on the abuse of capital formation:

No government knows better how to invest savings than does the individual who initially gathered that capital and it is for that reason government attempts at shifting capital from savers via currency devaluation to spend $450 billion on a fresh jobs bill or on capital cronyism deals like that with Solyndra will always fail. With capital formation the fertilizer of private economies, it should come as no surprise that when government diminishes capital and punish the efforts of savers that economies suffer and find themselves mired in a Keynesian Depression.

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Obama TRAPPED in Keynesian Twilight Zone

polifrog

mnmajoritydotorg:

What may be politically surreal has resulted in the reality of what is our shared full bore Keynesian Depression.

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More Selfishness From the No-Sacrifice Generation...

polifrog

Bill Quick's SS breakdown...

... a Ponzi scheme in which money from the most recent participants goes to fund the payoffs of the first participants, a scam that can continue only as long as a sufficient number of new suckers signs on. We’re running out of suckers, and the Ponzi scheme is collapsing. That is not, nor should it be, a question. The question is what to do about replacing the unsustainable scheme with something workable. Assuming, of course, that the whole structure doesn’t simply collapse before we can get anything done.

He's right.

But if we are to put off the collapse of Social Security, what politically is referred to as "save Social Security", then either

• the productive will be asked to pay more to support the retired,
• the retired will asked to do with diminished benefits,
• or both groups will be asked to sacrifice.

Enter this tidbit from the LA Times...

Upending the conventional notion of parents carefully tending their financial estates to be passed down at the reading of their wills, many baby boomers say they instead plan to spend the money on themselves while they're alive.

In a survey of millionaire boomers by investment firm U.S. Trust, only 49% said it was important to leave money to their children when they die. The low rate was a big surprise for a company that for decades has advised wealthy people how to leave money to their heirs.

As I have noted previously this is the last chance the Boomer Generation will have to do what every generation is required to do for a nation to be successful ... sacrifice. Theirs is a generation that has not only not known sacrifice, but has refused sacrifice and if the above statistic is any indication, theirs is a generation of Americans that will never know sacrifice.

Theirs is a generation that eats its young.

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Living Beyond Our Moment...

polifrog


There are times when we live a few beats before the current moment. When it's good, an athlete has an innate sense of where to be at at just the right time to increase the odds for the right move. Unfortunately, like most of us, for me the only future I am treated to are the moments before events collide and possible tragedy too often unfolds as predicted.

The souls of United Flight 93 saw the confluence of events that could lead to tragedy and were the first to enter what would become the future of American engagement and sacrifice: (Frank Cagle)

At 8:48 a.m. Mohammed Atta took a jet headlong into the north tower of the World Trade Center. Eighteen minutes later and accomplice did the same to the south tower.

When Jeremy Glick called his wife, his first question was an attempt to confirm something another passenger had heard on his spousal call: was the World Trade Center story true?

Lizzy Glick paused, thought for a minute, swallowed hard, and told him the truth. Yes, they had. Moments later, still on the line with her husband, Lizzy Glick saw that another plane had run into the Pentagon. She passed that information on as well to her husband, who relayed it to the other passengers.

Jeremy Glick then told her that the passengers were about to take a vote and decide if they should rush the hijackers and attempt to foul up whatever evil plans they had.

He put down the phone and a commotion was heard by those on the other end of the line. Then nothing. A dead line. An aborted missile launch against the town where I live.

That was 10:37 a.m. on Tuesday, September 11... just 109 minutes after Mohammed Atta rammed the first plane into the north tower of the World Trade Center.

Just 109 minutes after a new form of terrorism -- the most deadly yet invented -- came into use, it was rendered, if not obsolete, at least decidedly less effective.

Deconstructed, unengineered, thwarted, and put into the dust bin of history. By Americans. In 109 minutes.

And in retrospect, they did it in the most American of ways. They used a credit card to rent a fancy cell phone to get information just minutes old, courtesy of the ubiquitous 24-hour news phenomenon. Then they took a vote. When the vote called for sacrifice to protect country and others, there apparently wasn't a shortage of volunteers. Their action was swift. It was decisive. And it was effective.

United Flight 93 did not hit a building. It did not kill anyone on the ground. It did not terrorize a city, despite the best drawn plans of the world's most innovative madmen. Why? Because it had informed Americans on board who'd had 109 minutes to come up with a counteraction.

And the next time a hijacker full of hate pulls the same stunt with a single knife, he'll get the same treatment and meet the same result as those on United Flight 93. Dead, yes. Murderous, yes. But successful? No.

H/T Instapundit





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The Evil of a Public Square Reserved for One...

polifrog

It appears to me that there is a conceptual framework based on the excesses of medieval Christianity that still defines current Christianity for some. I do not see any evidence of "deceit and murder, abuse of human rights and usurpation of Constitutional norms" in modern Christianity.

In fact, Christianity has suffered from the usurpation of Constitutional norms, as it has been chased from the public square it once shared with atheists. Sure, atheists were out numbered in that earlier shared public square, but the various interested parties had on the whole a voice commensurate with their numbers.

Today, as Christianity is physically chased from the lawns of town halls, as court rooms are cleared of the 10 commandments in towns unable to defend their right to such expression, and students fight to lead prayer at school, we increasingly see an atheistic minority in our public square with a voice far in excess of the minority position they hold. This silencing in the public square of the religious majority, I would argue, is the genesis of an atheocratic state within the US.

When we leave a single religion in the public square after having silenced all other religions, atheism included, we create a theocracy. But when we silence all religions leaving only atheism in the public square we create a greater evil, an atheocracy.

During the 20th century we have seen atheocratic states from the Soviet Union, to China, to North Korea, to WWII Germany and we have witnessed the extreme horrors soulless men are capable of levying against humanity. There is no example of the atheocratic state's counterpart, the theocratic state, exceeding the atrocities of man unleashed through atheism.

To be clear, I do not argue for a theocratic state, only to scale it against the athocratic state in terms of abuse toward humanity. What I do argue for, is the inclusion of religion in all its forms (as well as non religion, athesim) in the public square.

There is a strength in such diversity. It was evident among the various beliefs of the founders of our nation and reflected when crafting the Constitution (even today atheists and the religious each point to aspects of the Constitution that reflect their thinking) and it was a strength the US was able draw upon until the mid 20th century when it began to fade due growth in government and the growth of government's natural lust for an atheocratic state. In fact, it was this diversity in which no single religion or non religion (atheism) had the public square to itself that added to what we think of as American exceptionalism today, for in what other nation can we find such respect and tolerance for our fellow man that men allow each their voice regardless of the group with which they identify.

One can argue for the atheocratic state if they wish, but the morality of such an argument is sorely lacking considering modern evidence.

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Remembering Kelo...

polifrog



Big Government:

In 2005, Kelo v. City of New London made eminent domain infamous. The widely reviled Supreme Court ruling gave the go ahead for the city of New London to use eminent domain for taking private property in order that it be given to a private company for “economic development.”

The public response was one of outrage. Facing the potential wrath of voters, politicians across the country moved to add new protections against such abusive seizures. But that wasn’t enough to save the homes of the folks in New London, whose property never would be developed. Pfizer, the intended beneficiary of the land theft, walked away years ago from their development plans.

Now at the end of this experiment in economic development via central planning there is a dump instead of a tax paying neighborhood.

Watch New Haven dump on the grave of one of their own neighborhoods, and in so doing their own private property rights, rather than steps of the New Haven City Hall:




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The Swiss Go Bernanke on Europe... I got a fevah and the only prescription is more Keynesian Depression ...

polifrog

The title comes in part from from polipundit whose synopsis of the Swiss dance is the most succinct yet:

For decades, the Swiss Franc has had a reputation of quality and stability, as the Swiss could be counted on for sane fiscal and monetary policy (not to mention a refreshing lack of entanglement in foreign military quagmires).

No longer. Swiss Franc Collapses 7% – Swiss National Bank to Fix CHF to EUR and Debase Currency.

The SNB indicated it would buy an
unlimited amount of euros regardless of the risk to maintain that
value.

The idea is that as the U.S. and Europe debase their currencies to try to prop up their bad banks, other countries will devalue as well in order to keep their export and labor markets competitive. No country can afford to have the only sound currency in a Zimbabwe Ben world. Not even Switzerland....

Simon Black at Whiskey and Gunpowder had this to add:

...

Markets are not functioning properly. Competitive devaluation means that governments are all striving to out-print each other… Europe is printing as much as they can to bail out the PIIGS, Switzerland just signed up to join then, Japan and China are not far behind, and QE3 is set to launch soon in America.

With so much money sloshing around the financial system, there is absolutely no sense of value anymore; people cannot invest with confidence given all the massive bureaucratic intervention.

...

In the Swiss National Bank’s brief statement, they said “With immediate effect, [the SNB] will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20. The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities.”

The three key words here are ‘WITH IMMEDIATE EFFECT’. This is just another example of a government making instant changes that pose dramatic risk over people’s lives and livelihoods.

Make no mistake, we can all wake up tomorrow to a new reality.

How is accurate pricing communicated through our markets when there is no sense of value? It isn't.

Our Keynesian Depression has just been lengthened.

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Defining Unearned Income...

polifrog



Judge Judy:

Seventy thousand dollars right down the sewer.

But it's all Okay, he says:

It's me.

I do believe this exchange went a bit beyond the reach of his over priced three year college education.

However, he did appear to realize he won the case.




"That's who we are creating ... a him."

H/T John Hayes



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So, What of Those Jobs Saved or Created?

polifrog



CNBC:

The US economy created no jobs and the unemployment rate held steadily higher at 9.1 percent in August, fueling concerns that the US is heading for another recession.

It was the first time since World War II that the economy had precisely net zero jobs created for a month.

Jobs. None created. And as William A. Jacobson (Legal Insurrection) notes the jobs picture is much uglier than our flat 9.1 unemployment rate.

I have posted before about how the shrinking workforce tends to mask just how bad unemployment really is because people who have given up hope and stopped looking are not counted in the most widely cited calculation.

So the news yesterday that the unemployment rate held steady at 9.1% with zero net job growth actually is worse than it seems.

Obama economic policies have created a reservoir of untapped unemployment that will keep our nation's unemployment numbers menacingly high for the Obama Administration long after the economy overcomes the weight of governance and once again begins to expand.

Obama the candidate ran beyond the minutia of measured results; he ran as a transcendent persona upon which one could pin their own "hope and change". However, victorious politicians can run such a campaign only once, as a successful bid leads to office and holding office leads to the minutia of measured results. In this case. 9.1% unemployment as far as the eye can see.




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Questioning "a brief recovery"...

polifrog




Victor Davis Hanson:

Zero jobs last month — a net change of zero job growth? It was just announced that last month’s unemployment is still above 9% — despite the nearly five trillion dollars in Keynesian pump-priming, the near zero interest rates, the expanded unemployment and food stamp support, and the government takeovers and subsidies of businesses.

...

In the last 30 months, the Obama administration has created a psychological landscape that finally just seemed, whether fairly or not, too hostile to most employers to risk new hiring and buying. Each act, in and of itself, was irrelevant. Together they are proving catastrophic and doing the near impossible of turning a brief recovery into another recession.

The bit in bold bothers me. Where is the evidence of a recovery outside of stimulus? It seems to me a recovery is economic growth beyond that growth that is the direct result of fiscal stimulus.

I understand the argument that over the long term the positive effects of debt spending are counter balanced by the negative effects of paying down that debt; that the two can be ignored when figuring GDP over the long term due to the fact that they cancel one another out over the long term.

But what of the short term? Should the same logic apply when figuring our GDP over the past quarter? I do not think so, yet that is how GDP is measured.

GDP = C + G + I + NX

where:

"C" is equal to all private consumption, or consumer spending, in a nation's economy
"G" is the sum of government spending
"I" is the sum of all the country's spending on capital
"NX" is the nation's total net exports, calculated as total exports minus total imports. (NX = Exports - Imports)

Where is the debit that would represent debt incurred as a result of debt spending (fiscal stimulus for the concern of this post) that has yet to be paid off? It is ignored based on the long term assumption that one cancels the other even though we generally look at quarterly snapshots of our economy.

This application of long term reasoning to short term measurements is akin to an inappropriate mixing of "tense" and results not only in confusion, but an inflated sense of GDP during recessions. To get a more accurate reading of GDP we should include the debit that is debt incurred as well as the credit that is debt cancelled in GDP for the period of time being measured.

If the argument is that we should use fiscal stimulus to "kick start" our economy, it behooves us to measure whether or not stimulus is having a measurable effect on the economy by subtracting stimulus from GDP measurements. Currently government stimulus is included in GDP thus allowing Keynesians and bureaucrats to point to stimulus inflated GDP numbers as though they were a sign of a strengthening economy and a measure of their success.

It is as if during every recession we have a Keynesian behind the wheel of a stalled car and all the effete fellow can muster is to turn the key and point to the jittery needle on the tachometer as a his measure of success. Then when the car battery is drained and the public's tolerance for debt spending is similarly drained our Keynsian turns to the public and blames them for the tachometer needle that again rests on zero. What we need is a tachometer that reads only when the engine is running on its own.

The end result of measuring GDP as we currently do is to give the appearance of success where there is none and give the impression of "a brief recovery" in the past when there is not one.

Green shoots .... sigh.






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The Smile File Visits the First Keynesian...

polifrog

• Keynesian solutions that were intended to propel us out of the Great depression landed us in the Recession of 1937.
• Keynesian solutions that were intended to propel Japan out of their late 80's recession landed Japan in a 20 year perma-recession.
• Keynesian solutions that were intended to propel the US out of the recession of 2008 landed us in yet another Keynesian Depression.

We should really get naming recessions and depressions that result from Keynesian Theory what they are ... Keynesian Depressions.




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A Deterrence of Prickly Resistance...

polifrog



Re-posted in total from Maggie's Farm. (A commenter notes that at the time the US was not actively engaging the Germans but rather lending a helping hand to the British.):

After the Japanese decimated our fleet in Pearl Harbor Dec 7, 1941, they could have sent their troop ships and carriers directly to California to finish what they started. The prediction from our Chief of Staff was we would not be able to stop a massive invasion until they reached the Mississippi River. Remember, we had a 2 million man army and war ships all fighting the Germans.

So, why did they not invade?

After the war, the remaining Japanese generals and admirals were asked that question. Their answer|...they know that almost every home had guns and the Americans knew how to use them.

The world's largest army... America's hunters! I had never thought about this. A blogger added up the deer license sales in just a handful of states and arrived at a striking conclusion: There were over 600,000 hunters this season in the state of Wisconsin. Allow me to restate that number. Over the last several months, Wisconsin 's hunters became the eighth largest army in the world. More men under arms than in Iran .. More than in France and Germany combined. These men deployed to the woods of a single American state to hunt with firearms, and no one was killed. That number pales in comparison to the 750,000 who hunted the woods of Pennsylvania and Michigan 's 700,000 hunters, all of whom have now returned home. Toss in a quarter million hunters in West Virginia and it literally establishes the fact that the hunters of those four states alone would comprise the largest army in the world.

The point? America will forever be safe from foreign invasion with that kind of home-grown firepower. Hunting -- it's not just a way to fill the freezer. It's a matter of national security.

Deterrence comes in many forms that will forever pass over the heads of the common liberal until they get the government they deserve.




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Litany...

polifrog



It is one thing to talk to an empty room, but it is another to talk to a room full of eyes that have been directed your way. It is for this reason I have gone quiet for last two weeks.

With gracious links from Bill Quick over at Daily Pundit and bigfurhat at iowntheworld a wonderful thing happened, my comfortable empty room grew uncomfortably populated ... well, by my low standards. The result has been the appearance of a surprising fear, the fear that I would screw up. That fear is accentuated by the fact that I find communication with the like minded more difficult than communication with those I disagree.

Anyway, it is the first of the month and it is time I get over a good thing:

Couldn't find Get Over It by Guadelcanal Diary, so I'll settle for Litany:

Smile File

polifrog







Many more at FloppingAces


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Is There an Inalienable Right to Self Defense?

polifrog



A Bill Quick reduction...

If there is no right to defend life, there is no right to life itself.

And without that what good are those much discussed rights and for that matter all rights.




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Home Defense ... 14 Round 12 Gauge From Kel-Tec...

polifrog


Shooting Illustrated:

We found the gun quite manageable, and its compact size (owing to the bullpup configuration) makes it very maneuverable. Obviously, with 14 rounds on board, capacity is never going to be an issue. Those factors make it perhaps the best shotgun for home defense we’ve seen in a while.

My current 12 gauge is a bit long, the Seecamp's travel convenience leaves it a bit underpowered, the .357 Seville looks pretty, the CZ 52 over penetrates ...

but the wife likes the .38.



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Christie Lapses Into Global Warming Gibberish...

polifrog




Christie may have cornered the market in clearing the fog of Teacher 's Union influence in New Jersey and by example, the nation but I don't expect Chris Christie to be a point of clarity on all issues; he represents New Jersey, after all.

However ... AGW gibberish? Really?

Politico:

In vetoing a bill (S2946) that would have required New Jersey to stay in a regional program intended to curb greenhouse gases — a program Christie plans to leave by the end of the year — the governor said “climate change is real.”

He added that “human activity plays a role in these changes” and that climate change is “impacting our state.”

Global Warming is no more scientific than a teacher's union and like a teacher's union AGW represents not needs of those their representatives claim but rather the desires of statists.





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Allen West - Modern Day Harriet Tubman...

polifrog



Allen West last night:

So I’m here as the modern day Harriet Tubman to kinda lead people on the underground railroad away from that plantation into a sense of sensibility.”

The contrast between our leader and leadership is astounding.

Thanks to GatewayPundit
H/T MaggiesFarm



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Smile File ...

polifrog











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Felonious Munk Debt Rant...

polifrog




My apologies for my lack of commentary and my reliance on quips and video but I am currently distracted by obligation. I will remain so through early next week.

Felonious (NSFW) Munk:






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Newt Last Night and a Reminder...

polifrog


For a man who can get so much so right:



he can get so much so wrong, as when he expressed support for a version of the individual mandate:



As I said then:

I like Newt, and believe he raises the bar of debate, but if he is unaware that supporting a "version" of the individual mandate is an untenable position in today's conservative party then he has no business in the race.

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Rep. Brad Miller (NC-13) Wants Hear From You...

polifrog



Just remember that on the second Tuesday of each month you too can speak with Brad Miller's.... constituent services representative.

After all, phones and e-mail can be so inconvenient.

LOCAL OFFICE HOURS FOR REP. MILLER: A constituent services representative from the office of U.S. Rep. Brad Miller will be available to hear concerns from local citizens on the second Tuesday of each month at the Rockingham County Governmental Center in Wentworth. Hours will be from 1:30 to 3 p.m. For more information, go to www.house.gov/bradmiller.

GoDanRiver





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Socialism's Marxist Class Struggle in England...

polifrog




Remember that silhouette jumping from the burning building in England?




She is not just a silhouette; she is person,


She was a productive member of society and fortunately still is, but is she proletariat or bourgeoisie?

It is interesting to note the parallels between the riots in England and Marx's proletariat/bourgeoisie conflict that supposedly would lead to capitalism's demise. First it didn't, at least not directly or under the same definitions for proletariat/bourgeoisie and second, it seems that before capitalism may enter a "Marxist" struggle it must first embrace a social state in which the proletariat become the unproductive and the bourgeoisie are the productive.

Socialism, the last step before equality of poverty.

Still mulling this over...

I don't know where I saw these quotes. so there are no links.

Give a man a fish and he will riot for more free fish.

and

These rioters have suffered from not nearly enough incoming fire.

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Rick Santelly - Wrong Track...

polifrog

A Non Objective Purr ...

polifrog



Bill Quick:

... I have to ask: How did “volatility” come to mean “the stock market is crashing into a bottomless hole?”

They never apply the term to the market rising. Then its “the markets are booming, surging, racing higher.”

But when what they really are collapsing, dumping, vomiting, going in the crapper, racing lower, and dropping like a stone,” well, that’s just “volatility.

Sometimes ratings isn't about the blood, but rather the soothing purr of telling folks what they want to hear.




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Cowboy Bill ...

polifrog




This guy asks some reasonable questions:

What year did the nation of Palestine come into existence?
What were its national boarders and what year did it cease to exist?
...

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The Final Sunday...

polifrog



martinra (dailypundit)

If all that were needed in order to sustain a permanent state of moderate growth and prosperity were a little bit of government and central bank tugging one way on booms and the other way on busts, then Keynesianism would work fine. Keynesianism fails in the long term because the corrections are not mathematical accidents, not merely lines on the graph, but necessary events to permit new growth. The tonic of failure, of bankruptcy, and of creative destruction is necessary to clear away error, drive out incompetence and deadwood, reallocate capital towards its more effective users, and permit growth to resume. Delay the pain and you delay the healing.

Here's to the Last Day Before the Healing Begins...



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Apologize, Obama!

polifrog

He's not going to be known as the first Black President. He's going to be known as the President who had a downgrade.

...

You want me to hire, you want me to take risk, you want me to go further in debt, you want me now to co-sign for stuff.

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The Snp Downgrade? It's all Laughs for Former Obama Economic Adviser Christina Romer ...

polifrog


NSFW:




This is how we got here folks...




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SnP Downgrade Thought Roundup...

polifrog



Bruce Krasting:

It would have been helpful if the S&P had provided some thinking on this critical issue. S&P was willing to take on the entire legislative part of government. But they didn't have the balls to take on the Fed. Interesting
....

We have just a few months before the next explosion. S&P has put the US on a negative alert. Meaning further downgrades are going to happen if the US fiscal house is not put in better order.

Folks, that CANNOT HAPPEN without substantial cuts in both Medicare and Social Security.

So over the next few months when Harry Reid and Nancy Pelosi tell us that there will be no cuts to these mega programs, respond by immediately shorting the stock market. If Obama sticks in the mud and says, “We will not cut SS” the Dow will fall 500 points.

...

Face it Krugmans of the world. Keynesian economics has hit its limit. You can’t spend your way out of this problem. That door is now closed.

If there is a silver lining to the S&P action it is that mainstream economists on both coasts of the US (but not Chicago) have also been downgraded. The notion that Debt = Growth is now a dead concept. I couldn’t be happier.

:::::::::


David Freddoso:

The bond-rating houses kept saying all along that they weren't worried about the debt ceiling not being increased. Rather, they were worried about the long-term prospects of the U.S. government paying back $15-plus trillion, which is where our national debt (both publicly held and obligated to trust funds) will be shortly.

Because last weekend's deal didn't cut spending deeply enough, S&P has just downgraded us. We'll see just how disastrous this becomes -- some are arguing it's not such a big deal -- but consider this the market's revenge for TARP and the stimulus package. You run up the debt, Mr. President, you lose your good credit.

::::::::::::


LATimes, China said:

China, the largest creditor of the world's sole superpower, has every right now to demand the United States to address its structural debt problems and ensure the safety of China's dollar assets...

...

If no substantial cuts were made to the U.S. gigantic military expenditure and bloated social welfare costs, the downgrade would prove to be only a prelude to more devastating credit rating cuts, which will further roil the global financial markets all along the way...

China is dictating conditions.

::::::::::

Michelle Bachman requests the resignation of Tim Geithner:

Tonight’s decision by S&P to downgrade our credit rating to AA+ is a historically significant and serious event for the United States. The United States has had a AAA credit rating since 1917. That rating has endured the great depression, World War II, Korea, Vietnam and the terrorist attacks on 9/11. This President has destroyed the credit rating of the United States through his failed economic policies and his inability to control government spending by raising the debt ceiling.

“We were warned by all of the credit agencies that a failure to deal with our debt would lead to a downgrade in our credit rating, but instead he submitted a budget that had a $1.5 trillion deficit and then requested a $2.4 trillion blank check. President Obama is destroying the foundations of the U.S. economy one beam at a time. I call on the President to seek the immediate resignation of Treasury Secretary Timothy Geithner and to submit a plan with a list of cuts to balance the budget this year, turn our economy around and put Americans back to work.”

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Harry Reid, The Hill:

The action by S&P reaffirms the need for... revenue-raising measures like closing taxpayer-funded giveaways to billionaires, oil companies and corporate jet owners.

Yeah, that will fix our 80 year dance with Keynes and resultant social state calamity. Just as raising the debt ceiling was a short-term fix that brought on a downgrade, so is raising taxes.

The only solution is cuts in Government spending with commensurate cuts in taxation. Government has proven itself not to be the solution.

Fire it.





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Bill Whittle - Rich Man, Poor Man

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If you hadn't been told differently by your moral betters in the main-stream media, a fellow could look at these numbers and come to the conclusion that the rich get richer and the poor, well, they get richer too.

Envy in America:





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Buy Now Pay Later...

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S and P Downgrades US Debt From AAA to AA+...

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The Tea Party was right and the Democrats along with the GOP Gentry were wrong.

CBS:

Credit rating agency Standard & Poor's says it has downgraded the United States' credit rating for the first time in the history of the ratings.

The credit rating agency says that it is cutting the country's top AAA rating by one notch to AA-plus. The credit agency said late Friday that it is making the move because the deficit reduction plan passed by Congress on Tuesday did not go far enough to stabilize the country's debt situation.

Of course, the Obama Administration claims that S&P 's rating has "deep and fundamental flaws" because S&P doesn't understand credit.

This comes on the heels of the debt ceiling debate in which the left argued that US debt would be downgraded if the ceiling was not raised and that attempts to address the fundamental problem of overspending by "holding the debt ceiling hostage" would result in a downgrading of US debt. The left was wrong and the GOP Gentry was too soft.

This is yet another rebuke for the Obama Administration the left and the GOP Gentry and is a sad sad day for the nation.

Update:

Legal Insurrection:

Democrats own the downgrade. They fought Republicans and Tea Party supporters every step of they way, and forced a deal which was insufficient. They played class warfare and race politics against arguments that we needed to drastically change our spending habits.

This is Barack Obama and Harry Reid’s crowning achievement.

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Rockingham GOP Breakfast This Sat. Morning...

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Rockingham County NC Conservatives Meeting

August, 6 (Saturday Morning) 8:00 to eat; 9:00 to meet
Windy's Cafe and Catering Event Center

306 W. Main St.
Mayodan

Map

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Foundering on the Rocks of Keynesian Spending and History...

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IBD:

A day after purchasing managers reported an "unexpected" slump in manufacturing, another surprise report shows consumer spending falling for the first time in nearly two years. Double dip, anyone?

Despite the largest Keynesian spending splurge in the history of the planet, the economy continues to founder.

Yep, history repeats.

Perhaps, as Keynesians argue, what we needed for Keynes to have worked was more spending as in the case with WWII.

However, when being asked to believe that WWII represented a Keynesian success, we are being asked to believe that Keynesian solutions require us not only to raise national spending to well over 60% of GDP, but that we must also destroy the industrial capabilities of friend and foe alike, destroy their infrastructures, destroy their homes and cities, kill a large part of their workforce, have them kill a large portion of our workforce, and then have them pay for retooling our economy so that we may sell them goods, climb back from recession and give Keynes a pat on the back for a job well done.

Really? We have to do all this to make Keynesianism work?

Really?

If it takes rehashing WWII for Keynesianism to work, I want no part of it. And when Keynesians have only WWII to rely on as an example of a Keynesian success story, they have lost their argument.

69% Say It’s Likely Scientists Have Falsified Global Warming Research...

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Rasmussen:

The latest Rasmussen Reports national telephone survey of American Adults shows that 69% say it’s at least somewhat likely that some scientists have falsified research data in order to support their own theories and beliefs, including 40% who say this is Very Likely. Twenty-two percent (22%) don’t think it’s likely some scientists have falsified global warming data, including just six percent (6%) say it’s Not At All Likely. Another 10% are undecided.

Those new Global Warming stories? Just "more cowbell".




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Obama's Keynesian Gamble...

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Krauthhammer:

He’s out of bullets. He’s out of arrows. He’s looking for stones on the seashore. … There’s nothing left in the cupboard. He did a huge Keynesian gamble, and it failed.

Keynes has never pulled the US from any recession. Never.

Keynesian Theory has lengthened 3 depressions. The first was the Great Depression, of course depressions aren't called depressions anymore. The current contraction in the US is referred to as the Great Recession while the other in Japan was called the 10 Year Recession but is now referred to as the more illuminating 20 Year Recession, as for 20 years Japan has seemed mired in a seemingly endless economic nightmare of stimulus spending from which the nation has been unable to awake.

What do the Great Depression, The Great Recession, and the 20 Year Recession have in common? The answer is that they have all employed the Keynesian gamble that is Keynesian Theory and failed.

Thieving from the future, while comforting today, yields a diminished tomorrow.

In the case of Japan that tomorrow came within a single economic contraction. Even now Japan continuous the feel good Keynesian stimulus that has resulted not in boom, but a full generation of economic stagnancy. In Japan we see firsthand the real loss that was transferred to the unborn when Japanese leaders chose Keynesian solutions.

Those unborn are now young adults enduring the fiscal abuse metered out by elders who gambled on Keynesian solutions and failed.




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Keynesian Solutions at Work...

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The largest and longest dip in employment is the present economy.

Remember, a double dip is likely scenario at this point, the rise in the middle of a double dip being debt funded Keynesian solutions giving the impression of an expansion when the reality is much different.

Questionable government debt funded positive GDP numbers aside, we have been in a depression since 2008.

Enjoy the ride.


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-- a Depression...

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When does a recession become a depression?

Are we required to wait for black and white photos of white collar citizens in soup lines, gaunt families searching for work while living out of their overladen roofless Model Ts, the more fortunate huddled around their spiky farm implements or resting amid dust on the porch?

That won't come. Many of those photos that so define the depression are simply representative of the era, depression or not.

However, society's mental template of what a depression is, is changing; it's being modernized. Until that metamorphosis occurs or we have a conservative president immune from "unexpected" economic numbers what we are currently living through will not be called what it is, a depression.

::::

Some spooky charts via The Atlantic:





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TropherTV

My father always told me growing up that no matter what happened, I could always come home. When I was 15, I found out why. When he was a young adult, living on his own, he hit rough times - working only a few days a month at best, putting his entire paycheck towards debts and rent - barely scrapping by on venicen. one day, he heard a knock at the door, where he found his father, my grandfather, waiting for him. He said, "Grab your things, son, I've come to bring you home."

Commented in reference to Solsbury Hill.

My grandfather rode the rails as a teenager during the Great Depression; he had no home to retreat to in which he would not have been a burden. His father did not come for him. After he had grown and his own children were leaving home my grandfather made it clear to my father that he would always have a home to return to.

My father made the same clear to me.

Depressionary scars run through the depth of generations.









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Judge Napolitano Questions the Constitutionality of Debt Ceiling Super Congres...

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Gallows Humor from the Smile File...

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Budget Busting Baseline Budgeting ...

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Baseline budgeting was consummated with passage the Congressional Budget Act of 1974 in the immediate wake of the resignation of Nixon and assumes a fixed growth in the federal budget below which even budgetary growth is considered a "cut".

How does it work?

Lets say the current budget is $10 and under baseline budgeting next year's budget is assumed to be $15. But after a flurry of activity impossibly deep cuts are made in the next year's budget that brings it down from $15 to $14. Voila, budget cuts that result in an increase in the budget from $10 to $14.

Lets look at a chart of how often the debt limit has been raised since 1940:




Baseline budgeting seems to have been a mistake.

Rush:











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Rep. Brad Miller (NC-13) and His Buy Today - Pay Tomorrow Economy...

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Bloomberg:

Representative Brad Miller, a North Carolina Democrat, said the immediate spending cuts will contract the economy. The measure “is going to take money out of the economy, it is going to take money out of people’s pockets,” he said.

Of course, cuts in government which result in "taking money out of the economy" should be offset by cuts in taxes which would put that money back into the economy.

We are often asked to "sacrifice" to help pull our nation from the recession. Why can't government sacrifice? Why not cut government and return those savings to the citizenry in the form of tax cuts?

Lets face it. Government growth has afforded us a pool of revenue from which to draw from ... government itself.




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The Joe Biden and Bob Becker "Tea-terrorist" Meme an Indication of Stolkholm Syndrome...

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Vice President Joe Biden likens the Tea Party to terrorists and Bob Beckel on The Five derisively labels the Tea Party "Tea Terrorists".



They are not alone.

The idea that the economy was "held hostage" by "tea terrorists" is based on the statist's double assumption that our nation is not being held hostage to the restraints of debt and that our economy is driven by DC policy.

Freeing ourselves from buy-now-pay-later governance requires recognizing that both of those assumptions are fundamentally wrong, that it is the private sector that drives economic growth while policy hinders that growth and that those who support buying nice things via government with the intent to pay later are the real terrorists who hold the nation hostage with the debt they produce.

Consider the Volker approach of raising interests rates in the early 80's in a successful battle against stagflation. If such an approach were needed today we would not be able to afford it, as the cost of carrying our debt would become too high.

Just as labeling the SWAT team that dispatches with hostage takers as hostage takers is a symptom of Stolkholm syndrome for the abducted, so is labeling the Tea Party hostage takers for attempting to dispatch the nation of debt an indication of Joe Biden's and Bob Beckel's mental illness.

Their attachment to debt is a weakness.

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Of Exponential Charts and How Often the Debt Limit has Been Raised...

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A perfect chart by which to ring out the month from ZeroHedge:


Nah, there's no problem. We have Keynes in our back pocket.




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You're Gonna Pay! Gets Permanent Real Estate...

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Wilson Getchell has earned permanent real estate on my sidebar with "Your Gonna Pay,".

Fiscally Responsible Punk Rock Music

and

Monkeys on cocaine.

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Paul Krugman - Blind to Patterns and Blinded by Keynes...

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We all know Will Smith. Successful. When asked about the source of his success one of his answers has been his reliance on being able to recognize patterns of success and jumping on. For instance: before Men in Black Smith recognized that up to that point over half of the top 10 grossing movies had, as he put it, "creatures". When given the opportunity to star in Men in Black he relied on his recognition of a pattern of success when accepting the role.

Will Smith:

No. I do not believe in getting trapped in a pattern when you recognize the pattern. The child-actor are obvious. I am kind of a student of the patterns of the universe. When my partner, James Lassiter, and I came to Hollywood, I said, "I want to be the biggest movie star in the world." We observed that of the top ten movies of all time, ten were special effects or animation. Nine were special effects or animation with creatures. Eight were special effects or animation with creatures and a love story. So we made Independence Day. When you see the , you just try to put yourself in the position to get lucky.

Not all of us are as proficient as Will Smith in recognizing patterns to jump on to or off of, though.

Krugman had this to say via Huffpost:

"From the perspective of a rational person -- in other words a progressive -- we shouldn't be talking about spending cuts at all now," Krugman said during a roundtable discussion on ABCNews' This Week With Christiane Amanpour. "We have 9 percent unemployment. These spending cuts are going to worsen unemployment. It's even going to hold the long-run fiscal picture because we have a situation where more and more people are becoming permanent long-term unemployed."

When is a Keynesian wrong? The answer is never, as they are the economic back beat to Climate change.

Apparently there are no conditions under which either theory is falsifiable even when patterns of failure emerge...

Simple questions:

::Why is it that the recession in the early 30's became the great depression after Keynesian expansion?

::Why was there a recession in 37 (until recently a recession second only to the Great Depression in severity) after years of enacting Keynesian solutions?

::If WWII was an example of Keynesian success why was it immediately followed by the recession of 45 at the war's end?

::If Japan executed one of the greatest Keynesian experiments in modern history then why do they languish in a perma-recession.

::If the US invested it's own round of Keynesian based solutions beginning in 2008, then why does the US seem to be entering it's own perma-recession in the same way that it did during the great depression and in the same way that Japan has?

::If Keynesian Theory is intended to "kick-start" an economy out of recession, why was there a greater rate of growth after recessions prior to the use of Keynesian solutions?

Keynesian solutions have racked up an impressive pattern of extending recessions. Only the most credentialed among us can pass off the stupidity of arguing otherwise otherwise as intellectual thought.

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You're Gonna' Pay!

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There is nothing wrong with conservative art, so how about some Sunday morning punk...

A Powerline 100,000 prize entry.

Or maybe some folk:


Also a powerline entry.




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Democrats and Their Golgafrinchan Like Economic Solutions...

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Upon adopting the leaf as a form of currency Golgafrinchans suffered tremendous inflation. Their solution was to begin a campaign of burning their deciduous forests.

Bloody Idiots.

:::

Spend first then find the revenue; idiotic, but it's the the foundation for Democrat paradigm through which political power is maintained. Now in their effort to maintain the flow of easy debt dollars in the face of monetary reality Democrats suggest burning forests:

• Barny Frank sputters: If Moody's downgrades US economy, just ignore them.
• After tabling the Boehner Bill, Harry Reid effectively filibusters his own debt ceiling bill.
• Mint two One Trillion Dollar coins and give them to the Federal Reserve.
• Nancy Pelosi claimes: "We're trying to save life on this planet as we know it today."
  
• And member of the Gentry Conservative, John McCain calls the Tea Party Hobbits.

Democrats recognize that they have a paradigm to protect, one that is based not on spending other people's money, but the dollars of subsequent generations ... debt ... on giveaways in exchange for political power.

In a climate of, as they claim, lower taxes, it is all they have left and they have gone as batty as the Golgafrinchans in defense of their debt spending.

All the while the desire for a balanced budget is labeled "extremist".



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Rep. Brad Miller Considers Raising His Odds of Remaining a Rep. to 50%...

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RollCall:

Miller told Roll Call that he thought a primary between him and Price would be “very unlikely,” but he stressed that the 4th “includes a lot of very familiar territory for me."

"It would be a district that I would be very pleased to represent. I would love to represent my hometown as well as the town I live in now,” said Miller, who was born and grew up in Fayetteville, in the 4th under the new lines.

...

Miller said the new 13th “does not include much of the district I’ve represented or what has been my political base, where I draw support and votes.” He noted Price “has represented more of the new 13th than I have represented.”

Two points:

• the redistricting process has considerably reduced Miller's chances of retaining his seat in the 13th
  
• map 2 of the redistricting process put Miller's current address in 12 term Democrat David Price's 4th district thus giving Miller a tolerable excuse to run against one of his own

It is only rational for Miller to entertain raising the probability that he will continue warming a seat in Congress from from near zero to around fifty percent. Self preservation.

So, was redistricting map 2 a favor to Miller?




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