Juxtaposition XXIX

Wall Street Protest

Tea Party Rally

See 13 Demands and Mark Steyn's Comments

Yuan for the Money, Two for the Show ...

The conventional thinking is that free trade is good and protectionism, through higher imposed tariffs, is bad.  It was the Smoot-Hawley protectionist-trade bill that is thought to have contributed the Great Depression in 1930 as trade wars then became the order of the day and economic growth slowed around the world (see: The Economist Article).
 
Now the United States is contemplating imposing tariffs on certain Chinese goods in retaliation for China not allowing its currency, the yuan, to float (allowing world currency markets to determine its value as opposed to China itself pegging an artificially low yuan-to-dollar rate.)  It is thought that China keeps its currency at 20-30% below fair market value in order to subsidize its exports and discourage imports.  In other words, such manipulation amounts to a virtual tariff and many politicians in the United States now believe that it is time to bring things back into balance with selective U.S. tariffs on Chinese goods.  A bipartisan Senate bill that so does should be voted on today ... see: Expected Senate Vote.  China has threatened to retaliate (see: China's Threat) and this has caused some politicians, particularly John Boehner in the House, to speak out against taking such an protectionist action.  President Obama is noticeably absent in this kerfuffle (see: Wall Street Journal Article) since staking a claim on either side doesn't seem to help his reelection chances.

Whatever the results of this action against China in the U.S. Congress may be (my prediction, it will eventually pass), I believe that China's bark will be worse than its bite.  One has to only look at the recent trade numbers (see:  Trade Balances with China) to see that, if a full-fledged trade war does break out, China would be far worse off than the United States in terms of its balance of payments.  Yes, U.S. domestic economic activity may turn down in the short term, but, longer-term, there should be much benefit to be gained for U.S. industries.  However, since the United States is the major buyer of China-made goods, an industrial production  turn-down there would likely cause great social unrest ... a situation that Chinese leadership might find difficult to damp down.  Already, there are predictions of such Chinese economic dislocations independent of protectionism actions on the part of the U.S. Congress ... see CNBC Comments.

Possible investment consequences might well be: a further deflation in world-wide commodity prices, an inflation in consumer goods prices in the U.S., and an increase in interest rates on U.S. government securities (if China starts dumping its holdings).  Also, holding onto the stocks of Walmart, Best Buy, etc. might not be a great idea.

Fetid

How can we have an Attorney General who lies to Congress?  See: Fast and Furious.

Or an Energy Secretary who gives billions of unvetted dollars to the Administration's friends?

Or, for that matter, how can we have a Treasury Secretary who cheats on his income taxes?

(You fill in the other blanks ...)

The Barry's cabinet is as fetid as a Calcutta garbage dump.

(And who knows what all those czars are up to?)

Underdog to the Rescue

"There's no need to fear ...  Underdog is here!"  See: The ABC Interview.

Apparently, an Obama transmogrification is the order of the day.  Things are so far down, they look like up. Admit that re-election prospects suck, you've screwed up big time, and play for the sympathy vote in the 2012 election.  It just might work ... considering that the weepy females in this country helped elect Obama in 2008.  Such a strategy blunts the ability of his opponent to attack him in the debates next year.  He can just play the rope-a-dope and look put-upon to counter such obvious rhetorical parries ... kind of like what Hillary Clinton did when she ran for Senator.  Remember when Rick Lazio confronted her on the debate stage?  Many think this Lazio aggression is what won it for her.

The only thing is ... unlike Underdog's alter ego, Shoeshine Boy, I don't think The Barry ever stooped to that level ... but maybe that's next.

The Rock

When I was much younger, there was a law in Virginia against sodomy.  In so many words, this law stated that "sodomy is a crime so heinous that it can not be described."  I often humorously imagined what would happen in a courtroom where someone was being tried for this crime.  What evidence could be produced?  How would the defendant counter such a nebulous charge?  What would the judge's instructions to the jury contain?  And how would such a convicted defendant feel spending years in the slammer without any specifics ever having been given at trial? 

I was reminded of this enigma this morning watching Morning Joe where there was an allusion to a word on a rock at the entry leading in to a Texan hunting lodge that Rick Perry had used/rented/owned.  No one on this TV show would describe what was on this rock except to decry it and, in hushed tones, say that it could not be specified.  So I had to wait until I read the Powerline blog later in the AM.  Here's where I found what I couldn't hear on Morning Joe -- The Rock.  I'm not writing this blog entry to defend Rick Perry.  You will have to judge this for yourself after reading all the various spins on this "indescribable incident" ... but rather to indicate how amused I am by the lexical temerity of those who are usually so outspoken on Morning Joe.

Breaking Wind

Billions for green energy, not one cent for nuclear ...  Here is a recent Op Ed from the New York Times revealing what the tree huggers are doing to the trees in Vermont ... all to reduce our nation's "carbon footprint" by a teeny weeny fraction of one percent. See: Green Mountaineering.  It's one thing to see huge wind farms on the barren highway passes between LA and Las Vegas, but on an entire ridgeline in Vermont?  Ouch!  And how do these hugely-expensive politically-correct projects get funded?  You guessed it ... mainly by that kindly old man with the billy-goat beard, striped pants, and a cut-away coat.

Have we learned nothing from the failure of the green energy initiatives in Spain? (See: No Gain in Spain.)  Please also read this link that describes an Obama $61 billion slush fund called the Federal Financing Bank ... see: Secret Government Bank.  This revealing reference was given to me by a contributor who also seems worried about how our current government is squandering billions upon billions of dollars on questionable green-energy projects ... none of which so far involves the splitting of an atom.

Afterthought: Here is a list of wind turbine manufactures: Wind Turbines.  Is all this green energy B.S. adding or subtracting from our balance of payments and employment levels?

A Snipe Hunt

Recently I blogged a piece about the International Monetary Fund and, in it, referenced its incredible lack of transparency (see:  I.M.F...ing).  Since then I have spent time on the IMF site (see: IMF Site) trying to find out exactly how much money the United States contributes and has contributed to this fund ... and into all the various slush-fund pockets it seems to have?  Ditto for China. Ditto for Russia. Ditto for Germany and France.  Etc.  And I would also like to find out who is lent (given?) this money on a year by year basis from these various slush funds?  And how much of this money has been paid back historically?  And how much has never been paid back?  What interest rates are charged? 

How much does the IMF spend annually for operating expenses?  (The former IMF head, Dominique Strauss-Kahn spent $3,000 per night for the hotel room where he was caught in his peccadilloes.) Specific salaries (I found on the NY Times how much Strauss Kahn was paid.  He made $442,000 per annum with a $79,120 expense account ... see: NY Times Article)?  What does the IMF income statement look like?  How about its balance sheet?  A cash flow statement?  Who has contributed gold to the IMF reserves?  Has much of this gold has been sold or otherwise disposed of?

If any reader out there has a week or so to devote to this snipe hunt on the above referenced web site, I welcome your travails and answers.  Like the U.N. (see: The U.N.) and the World Bank (see: The World Bank), I suspect  that the real meaningful numbers are locked up in New York or Geneva or Washington somewhere where prying eyes such as mine will never find them.  (I just hope that the Congress has access to this data.)  The only thing that these international (unelected) agencies allow us schnooks to see is the mountains of  gibberish and spin provided on their web sites.  They are self-perpetuating bureaucratic mazes whose major function seems to be politically correct arm waving and spending someone else's moolah.  If any U.S. corporation were as opaque as these international organizations, its entire management team would be peeking out from behind bars.

If I Only Had a Brain ...

Does he know the difference ...
Corps vs. Corpse
2008 vs. 2011.
Transcontinental vs. Intercontinental
Breathalyzer vs. Inhalator vs. Inhaler.
Jews vs. Janitors
57 states vs. 50 states
(See: Michelle Malkin)

And a heart ... (See: Jane Sturm)

And some courage ...
“We watch a president who once talked about the courage of his convictions, but still has yet found the courage to lead,” Christie said.  (see: Chris Christie)

The Wizard of Ozama

Purloined Powerline

The Powerline blog (see: Powerline) ran an entry this week on "things I don't care about" which idea I found so compelling I have decided to "borrow" it.  (I've also borrowed their above graphic.)  So here are the things that cause me to switch channels, turn off the radio, or start daydreaming about a zesty Bloody Mary:

- The Miss America contest
- The very latest Apple Inc. Iphone®
- Saltine® crackers
- Time magazine (or Newsweek, etc.)
- Sting (or Bono or Paul McCartney, etc.)
- Doonesbury (I borrowed this one from Powerline too)
- James Sokolove TV ads
- Thomas Friedman's solutions to the world's problems
- Robo telephone calls (no matter from whom)
- The Emmy's
- Falling-to-earth space junk
- Pasteurized apple cider
- Chrysler® cars
- Debby Wasserman Schultz
- Anyone living on the fictional Wisteria Lane
- Pizza from nationally-franchised companies
- Wagnerian operas
- Lists of things people don't care about (just kidding)

International Monetary F...ing

Christine Lagarde, the head of the IMF (International Monetary Fund), now estimates that, in order to fully protect the European Economic Community (EEC) from cascading debt default, it will cost the IMF €3 trillion (see Lagarde Unloads).  The IMF now has about €300 billion in available funds which means that it is €2.7 trillion short of this needed bailout reserve.  The question then becomes ... what will it cost the United States to put this gigantic finger in the financial dike?  Well the Wall Street Journal states the our additional share of this shortfall would be at least 17.1% to 19% ... or even possibly more (read the: WSJ Article).

This translates into a $618 billion to $687 billion reach into the (empty) U.S. piggy bank to bail out Europe!  Wow! This is more than five times the 2008-inflation-adjusted cost of the post-World-War-II Marshall plan (see: Bailout Costs).

The operational idea behind the IMF seems to be -- "from each according to its ability, to each according to its need."  Hmmm, what does this sound like?  (By the bye, the world's second largest economy, China's current related IMF assessment percentage is ... I think ... below 4% ... and it may be 0% ... the IMF is not very transparent about these things.)

Juxtaposition XXVIII

Congress




 











Circular Firing Squad

Harry Reid: "Ready, aim, FIRE!" 

Crony Capitalism

The Barry is sagging under the weight of two crony capitalism disclosures -- Solyndra Corp. (see: Reuters Article) and LightSquared (see: LightSquared).  Now we hear that Jeff Immelt, the CEO of General Electric and a clear Obama crony, has just been thrown a $230 million bone from OGX, the Brazilian oil company, to supply them with off-shore drilling technology (see: Surprise GE Contract).  Now, clearly coincidentally, when Obama was in Brazil earlier this year, he announced a $2 billion U.S. loan to help Brazil develop its huge off-shore oil discovery (see: Forbes Take on the Loan ) ... despite the fact that he has effectively stopped oil exploration off our own shores.  He punctuated this largess by another of his arm-waving grand gestures ... saying that the United States is looking forward to importing this new Brazilian oil (see: Drill Brazil Drill).

Is anyone surprised that Obama will raise $1 billion to fund his re-election campaign?

Long afterthought:  Here is another link to a listing of Green Energy pork: Michelle Malkin

Bail? ... Bananas!

I've complained before about the fiction of Iran releasing a female American prisoner "on bail."  Iran is ready to release the last two Americans captured after straying across the Iraq border over two years ago ...  after a payment of $1 million ... called "bail" (see: $1 million Bail Payment). How can people who have been convicted of spying and sentenced be released on bail?  Let's face it, this is ransom money ... and the American media plays along with this silly narrative ... and helps to paint Iran as being less depraved than they truly are.  Bananas!! What happened to America's backbone?  Remember, "Millions for defense, not one cent for tribute" (generally attribute to Thomas Jefferson when refusing to pay ransom to the Barbary pirates in order to free American sailors).  Please, media monkeys, let's be realistic with your language for a change ...

The UNdoing of Israel

This week there will be a series of arm-waving speeches at the UN headquarters in New York City regarding an attempt by the Palestine Authority to establish itself as a full voting member of the General Assembly ... as opposed to its current PLO observer status.  Were this to happen, this will mean that the UN will de facto recognize Palestine as a legitimate state.  This obviously cannot happen as then there will be zero leverage for Israel in its negotiations with the Palestinians toward mutual state recognitions ... and this 65-year old conflict, in turn, would continue to be an open sore for a long, long time.  Therefore, the United States may be forced to issue a veto of this resolution in the Security Council and further paint itself as an anti-Arab force in world politics.

The Barry has brought this embarrassing situation upon himself (and us) with his misguided rhetoric and misunderstanding (hopefully) of the consequences of same (see: Obama's Axle Wrap).  See my thoughts on this Obama-boner here.  According to John Bolton, our UN Ambassador under Bush 43, in previous similar situations, the United States has gone to the UN member states to whom we give foreign aid and threatened to withdraw this aid if a vote for Palestinian General Assembly membership were to occur.  This kept this genie in a bottle for the last twenty years.  Now, with his chin high and a wave of his hand, President Obama has given up this leverage. Was the naivete or purposefulness on his part? 

You decide ...

No Moral Compass?

The Barry's recent spending cuts proposal has been analyzed by Jeff Sessions in the Senate and ... surprise, surprise ... it contains no net cuts to actual federal spending.  Under Obama's proposal, the federal deficit would balloon back above $1 trillion in fiscal 2012.  It is all accounting legerdemain (see: Powerline Reprise) clearly designed to raise taxes and fool the gullible public.  How can a President continue to try to pull the wool over the eyes of the American people?  Has he no feelings for the fate of his fellow countrymen?  Has he no moral compass?  Is he after all just a cynical Chicago thug politician who will try to take advantage of every crisis to further his own political agenda ... even though it might help ruin his own country?

The very sad fact is ...  it appears so.

The President's Chimera

"Pass this jobs bill now!"
"We need to pass this jobs bill right now!"
"If you love me, you will help me pass this jobs bill now!"
"Now is the time to pass this jobs bill!"

What jobs bill?  The Barry really must believe that the American people are naive ... or stupid ... or worse.  He urgently wants us to pass a jobs bill that hasn't been filed yet in Congress.  And if it hasn't been filed, it can't be voted on.  And obviously it can't then be passed.  It can't be scored by the Congressional Budget Office to see if it really will create [and save?] the jobs he claims ... or that it will only cost $447 billion of taxpayer money.  And it's not clear when it will be filed.  If you don't believe me, read this surprisingly frank artcle in the L.A.Times.

What kind of rhetorical charade is Obama engaged in?  Has this bill really even been written?  Or is it still evolving in focus groups and in the friendly editorial rooms of the main stream print media and network television.  In a way, this is a scary situation.  The President is representing a reality that doesn't exist so that he can attack the Republican members of Congress.  And yet the fact that this bill hasn't been filed isn't generally known to the cheering crowds he is appealing to ... or to the overall American public for that matter.  We are being fed a feast of ephemeria ... right out of George Orwell.  I am nervous that we now have a President who is so detatched from the truth ... and that he believes that he can turn this chimera into a living, breathing beast with his teleprompter skills.
 
And it's time for us all to be nervous.

Stupid Republicans

Stupid Republican

The Republicans have for years called the Democrats the "tax and spend party."  Obviously they have had it wrong.  The savvy Democrats are clearly the "spend and then tax party" ... see: $1.5 Trillion in New Taxes and Coming Obamacare Taxes.  This most assuredly will get the economy going ...

Savvy Democrat

Energy Slaves

Buckminister Fuller and his Geodesic Dome

Many, many years ago (around 1971 as I remember) I had a chance to have a sit-down with the great Buckminster Fuller (see: Wikipedia Entry). I was demonstrating for him a piece of software that I had architected called MUSE®. MUSE, among many other things, had a mechanism for resolving units calculations such as BTUs to calories ... and all the more complex physics conversions. Mr. Fuller was quite impressed with this capability until I showed him that it also handled monetary units conversions (such as drachmas to dollars) at which point he bristled. Apparently he, being an outside-the-box thinker, felt that mixing the metaphysical (monetary units) with the physical units was anathema.

He then revealed to me his far-sighted solution to this dilemma – all national currencies should be based upon the cost of producing a quantity of work. He called this monetary unit an “energy slave” (see: Calculations) on the basis that it would be the same the world around and would not be susceptible to the political vagaries of national bank shenanigans and/or a particular country’s trade policies. And, if one thinks about it, the amount of energy that our world possesses is constantly being augmented by that grand and universal mint, the sun.  Therefore our global money supply would expand at a fairly predictable rate.

Upon reflection and given the current ultra-fluid nature of world currency markets, I hearken back to Mr. Fuller’s idea. Were we to adopt this notion for an international monetary base, China would not be able to artificially devalue its currency, the yuan, to capture world manufacturing; countries would not be able to inflate their way out of their profligate spending and borrowing ways; and gold might not be the Silas-Marner investment haven it has become. And, very possibly, this country might adopt more rational policies toward the development of our own energy resources. Wouldn’t that be special?

Pass This Jobs Bill Now!

President Obama (The Barry) has proposed new taxes to pay for his proposed $447 billion "jobs" program (see: The NY Times Agrees).  I suspect this tax proposal is as much to play politics as it is to pay for his dog's breakfast of "new" jobs proposals.  That is ... The Barry knows that the Republicans will not go along with any tax increases now and therefore he can call them out during next year's campaign and blame them for what surely will be high unemployment rates then.  In other words, it is a bald-faced set up to try to keep his job rather than grow new jobs for the rest of Americans.

However, surprisingly, I agree with a few of the bullet points in this new taxes proposal ... independent of whether his jobs proposals will or will not help the economy ... and so I will list these points as outlined by the NY Times editorial and indicate my feelings about each:

1) Capping the value of itemized deductions and other tax breaks at 28% (of adjusted gross income?).  I AGREE  This, in effect would be an extension of the alternative minimum tax in the current tax code ... a step that I have already proposed (see: Taxing Ideas).

2) Ending tax breaks for oil and gas companies.  I DISAGREE  If we are going to become energy indipendent then we cannot punish the very companies that would make this happen.  I have opined on this in more detail in the past (see: Oily Decision).

3) Not letting hedge-fund managers pay taxes on most earnings at the capital gains rate.  I AGREE  This has been an egregious loophole through which the wealthest on Wall Street have avoided paying their fair share of our government's cost.

4) Curbing tax breaks for corporate jets.  I DISAGREE  This is pure two-faced silliness by a man who flies, at taxpayer expense, in the most expensive flotilla of jets of any other American entity.  Is he bound and determined to kill the private-jet building business?  Even Warren Buffet has disagreed with this proposal.

5) Ending the lower tax rates installed by George W. Bush.  I DISAGREE  If The Barry's proposal to cap tax deductions (see #1 above) comes about, then there will be no need to scrap the Bush tax cuts as I strongly suspect that government receipts will grow anyway.

The Democrats, as of this hour, have not yet filed The Barry's "pass this jobs bill now." bill.  What's up?

Is this just political theater afterall?

Re: Cursive

I recently received a note from a fraternity brother of mine written in a beautiful cursive script.  Now, I am a tutor in a MetroWest school system outside of Boston.  I have taught many students in Algebra, Geometry, Trigonometry, Calculus, History, English, Physics, Biology, and Chemistry.  To my shock and disappointment none of my students has been able to write in longhand.  They all print ... usually very slowly and often so illegibly that they cannot read their own notes.  A few say that they did learn cursive writing early on in school but can no longer perform it due to lack of practice and pedagogical focus.

Can I be a little dogmatic?  I think that this failing on the part of our nation's schools is a main reason for our educational degeneration.  The simple ability of students to take notes quickly and efficiently while in class or on the computer is a big step forward in their learning process.  Too, too many of today's students cannot do this and therefore have lost a tempo in what was once the traditional educational experience.  And learning script writing was a second- and third-grade rote exercise that I also believe helped reinforce our children's  hand-eye coordination, hand-eye-mind connection and, even more importantly, non-oral communications skills.

How about it Arne Duncan, our Secretary of Education, can you spend a few billions of your huge yearly budget to re-introduce serious cursive writing practice into our children's early educational experience? I can even suggest a slogan for this effort: "Writing is also fundamental!"

Added thought: I did not mention that, if a student cannot decipher his/her own printing, how is his/her teacher supposed to understand and/or fairly grade such student's essays, exams, and other written communications?

Roosting Chickens

The above picture represents the gift that the Reverend Jeremiah Wright sent to the Ground Zero 9/11 ceremony yesterday in New York City to commemorate the comments he made shortly after the terrorist attack in 2001 (See: About Half Way Down).

Data Drives Out Speculation

The Barry took off the gloves last night and pretty much gave the speech that two days ago I predicted he would make (see: Laser-like Focus).  He kicked off his 2012 campaign with the proposal to "spend" $447 billion of money our government doesn't have to create jobs.  But as one can see from the above chart I "borrowed" from the Powerline blog (see: Powerline) there appears to be a clear inverse relationship between such Keynesian economics and job creation.  I even think Obama's proposal to continue the cuts in the FICA tax is more a political move than an economic one.  Can one seriously say that the extra few dollars a week in everyone's paycheck is going to cure our economic malaise?  Or will the long-term damage that this does to the Social Security System negate any short-term "stimulus effect." And, for that matter, has the FICA tax cut last December helped one bit in creating jobs?  I don't see any evidence to support this notion.

The more I reflect on the United States jobs problem, the more I am convinced it is a policy issue and not a process issue.  Our current government unfortunately has continually exhibited an anti-business bias in its day-to-day actions -- from trying to stop Boeing from building the Superliner in South Carolina ... to its recent rapping of Gibson Guitar's knuckles in Tennessee over the wood that it uses ... to the stopping of oil exploration in the Gulf of Mexico.  And, if one takes a serious look at the tax increases that The Barry has or plans to impose on U.S. businesses (if you doubt me, please take a gander at: Obama Tax Hikes), one can understand their reticence to invest in the future and thus grow jobs.

I'm sorry President Obama, even though you "hope" it will get you re-elected, more of the same just doesn't cut it in my book.

Further Thought:  One might add to the list of Obama's anti-business actions ... the recently-passed health care law.  Again, to see exactly how this act works against U.S. companies, refer back to the link above referring to Obama Tax Hikes and see how oppressive this unilateral action has/will become to capitalism.

Kitchen Cabinet

Last night, while watching the Republican debate from the Reagan Library in Simi Valley, California, I was impressed with this lineup of Presidential hopefuls. I also felt it was a shame that only one of them could take the fight to The Barry next fall. I realize that this idea cuts across the grain of the current media narrative -- that the Republicans offer a weak slate of candidate hopefuls. But, to me, each of these potentials is better than what we got now … and each has significant strengths that he/she could bring to the next administration. Since only one could be our next President, the next fanciful step then was to imagine how each of them would fit into a Republican administration. I do realize that this would never happen, but I did have this chimera and let me here share it with you:

Mitt Romney – President
Newt Gingrich – Vice President (if I can’t have Marco Rubio)
Jon Huntsman – Secretary of State
Ron Paul – Surgeon General
Rick Perry – Secretary of Defense
Michele Bachmann – Attorney General
Rick Santorum – Secretary of  Treasury (if I can’t have Paul Ryan)
Herman Cain – Secretary of Commerce

I can dream can't I?

Thursday’s Laser-like Focus

[My prediction ... to be straight from the Teleprompter-in-Chief]

"My fellow Americans. I am here today to focus like a laser on jobs. I have suffered almost three years of stagnent job growth in this nation, primarily brought about by the severe recession that I inherited from my predicessor. I have stopped the bleeding but the patient is not cured. I believe that, if we as a nation can come together and focus on providing jobs to those unfortunate among us who have no gainful employment, then I, with your help, can start to grow our economy once again. This is my mission and my only mission for the next 15 moths of my current administration. My mission is to get America and Americans back to work. I may not be able to complete this mission before 2013, but I think this mission is so big that it may take even more time to complete my vision for America. … and this is why I insist that we must come together."

"And when I say come together, I mean that the obstructionists among us need to step back and let their fellow Americans get back to work. I have had to get our economic car out of the ditch in which I found it … and, in doing so, I have had to deal with many of you I see sitting in front of me now who want to see this car stay in the ditch … so that their party can grab the reins of power back. I can only do so much.  If I do not get your cooperation then I will see continued stagnation as a nation and the car will be driven back into the ditch. I cannot tolerate this and I cannot let the obstructionists among us here try to destroy this nation. And so I plead with you to stop this partisan bickering and follow my lead into a better economy."

"I believe we are a great nation that needs to get back to what has made us great and to this end I want to propose the following twenty-seven steps that I guarantee will bring jobs back to our nations’ factories and service sectors:

1) I urge you to create an infrastructure bank that will focus on investing in the rebuilding the crumbling roads, bridges, and schools in our country.

2) I would propose that you provide major government-funding for re-education programs that will enable the long-term unemployed to refresh their job skills so that they can reassimililate themselves into our new high-tech economy.

3) I think that there should be created a twenty-first century equivalent of the Civilian Conservation Corps so our government can reconstruct our national parks, seashores, and wilderness areas while at the same time providing jobs to hundreds of thousands of young Americans.

4) I blah, green jobs blah, me blah, my blah …"

Solar Flare

Once again we learn the painful lesson that the federal government is seldom a savvy investor.  It seems that The Barry has thrown $535 million of taxpayer money down a rat hole to show how sensitive he is to growing "green jobs" (see: Solyndra Shuts Down). 

As it turns out, these 1,100 jobs at Solyndra Corp. in Fremont, CA lasted only a little over one year and now the only green left there is the envy that these erstwhile environmentalists feel for their neighbors who are still gainfully employed.  To be perfectly fair, one has to mention that $600 million of private venture capital had also been frittered away on this cadre of tree-huggers (see: The Green Wombat).  And this also parallels an even more foolish investment of something like $20 billion of federal funds in 1979 by Jimmy Carter on the pie-in-the-sky Synthetic Fuels Corp. (see: Synfuel Sin).

Now, Thursday next in his "jobs, jobs, jobs" pep rally, when The Barry calls for our government to "invest" in more green jobs, please also invest a healthy amount of scepticism on your own at his pom-pom waving.

Full Eclipse

The Barry has announced he would like to schedule his "jobs speech" to a joint session of Congress for the same night (Wednesday) and at the same time (8:00 PM) as the next Republican debate at the Reagan Library (see: Schedule Conflict).  Clearly this timing is meant to eclipse the audience and news coverage of this debate (the first to include Rick Perry.) This otherwise important debate event is to be broadcast on NBC.  The White House has suggested that, if this conflict is a problem,  the debate can be rescheduled.  Small-minded is a complement for this Administration action and I'm sure it is designed to get Republicans "all wee-wee-ed up" (to use an old Obama quote.)

An opening salvo such as this suggests that the coming election campaign on the part of Democrats will be beyond dirty ... it likely will be despicable.

Postscript:  The Barry's "jobs speech" has been petulantly moved to Thursday night.

Beer Today, Gone Tomorrow

Do you rememember these old-fashoned brews?

Ballantine: India Pale Ale
Blatz: Milwaukee's Finest
Carlings: Hay Mabel Black Label
Schaefer: One Beer to Have ...
Falstaff: Growth and a Long Slide
'Gansett: Narragansett
Meister Brau: Panther P*ss
Rolling Rock: Latrobe Brewing
Schlitz: Made Milwaukee Famous
Rheingold: Miss Rheingold
Ruppert: Knickerbocker
Pabst: Blue Ribbon
Old Peculier: Theakstons
Utica Club: Saranac

If they are all not dead, many are certainly dying.  (I truly love the last two ... and I liked Rolling Rock when it was brewed in western Pennsylvania.)

The Big Mac Index

Being that my wife and I are traveling to France this fall, I am watching the euro, hoping against hope that it will deflate relative to the dollar before we have to pay the bills then.  One of the more interesting ways of comparing monetary exchange rates is by using the Big Mac index created by The Economist magazine.  I won't go into the details of this calculation here but those of you who are curious please visit The Economist for its very interesting algorithm.  The bottom line is that the euro seems to be overvalued by about 35% ... which means that the euro should currently trade at about $1.10 per euro ... not the current $1.45 per euro.  Wouldn't it be nice if this adjustment were to occur before our trip?

Another salient part of this investigation involves what might happen to the economy in the European Economic Community before and during our trip.  Any shocks here might well affect the exchange rates to which we would be subjected  To pursue this analysis I have found an interesting website that shows the cost of credit default swaps (CDSs) in many countries (see: Credit Default Swap Costs).  Think of this credit default swap data as the cost to buy insurance against a particular country defaulting on $10 million of its 5-year sovereign debt.  Obviously, the higher the cost ... the greater the risk of default ... and the greater the chance of this country's currency deflation. 

Today, it costs $47.35 for such insurance against the U.S.'s sovereign debt versus $164.84 against France's (and $2,218.27 to insure Greece's).  Now the euro is used in many of the countries represented in this table so to be very accurate, one would have to use a GDP-weighted average of these CDS figures.  So, forgetting about how our Federal Reserve Bank and the European Central Bank intervene to manipulate these exchange rates, surely the cost of the euro would/should move close to the Big-Mac-index parity figure by the time of our trip.  If it doesn't, I think then my wife and I will be buying lots of Big Macs in France this fall.

What's NeXT?

One of the premier examples of the extraordinary entrepreneurial spirit in the United States, Steve Jobs of Apple Inc. has just sadly stepped down as its CEO yesterday.  An original founder of Apple Computer in 1976 (see Apple Computer.), who pioneered the Apple 1 computer kit, the Apple II, and the Macintosh with its innovative Graphical User Interface (GUI).  Jobs was ousted in 1984 and went on to found NeXT Computer (see NeXT Computer) with enormous financial backing ... including Warren Buffet. 

The 1986-released NeXT computer was not a commercial success, primarily, in my opinion, because it did not include a floppy disc drive.  Steve Jobs, in his typical visionary way, was years ahead of his time, substituting an early version of a CD-RAM for both a mass storage device and input/output (I/O) device.  This was one of the few mistakes Jobs ever made in his technical career ... primarily because it became difficult (and expensive) to move data and applications from the rest of cyberspace onto the NeXT computer and the data-access rates of this device were snail-slow.  Today, 25 years later, CD-RAMs are often the primary hardware I/O devices on personal computers ... and mass data storage is rapidly moving off of its miniature hard discs and onto static-RAM memory (such as flash drives).  Here, Steve was just a few years too soon.

But Jobs can easily be forgiven this one technical hiccup for, after returning to Apple in 1997, he went on to lead the creation of the IPod, the IMac, the IPhone, and the IPad (with its GUI on steroids) which have fostered enormous worldwide markets for American technology.  Even the Apple Store is a technology marketing innovation which can be partially attributed to Jobs.

Now, Steve Jobs is leaving and the future of Apple Inc. is in question.  One has to echo all the kudoes being lavished on Steve Jobs.  In fact, they may not be lauditory enough.  So, when The Barry gives his early September address to the nation with the shibolith "jobs, jobs, jobs," my mind will certainly wander to that health-plagued founder of Apple.

Gold Bug

The price of gold hit $1,900 per ounce yesterday ... the highest in history.  And many ads on current cable TV and talk radio focus on selling this metal to gullible consumers.  I say "gullible" despite the fact that many who bought this yellow metal last year have cleaned up.  But those speculating on gold must note that the buyer's price and the seller's price can often differ by as much as 20% and the only possible gain from gold is a capital gain, no interest or dividends ... plus there are often selling and buying commissions and margin fees ... plus, if one buys in quantity, there are hefty shipping or storage fees.  And don't forget that old adage: "you can't eat gold."

This all aside, gold has had a remarkable run ... I bought some for my grandson when he was born five years ago at about $550 per ounce ... it is higher now by more than a triple ... quite a run.  The question then present themselves: Why such a run?  And, how high might gold go?

The answer to the first question has a lot to do with the decline of the U.S. dollar.  Obviously, the price of gold in euros or in yen has not had such incredible price inflation.  Also, worldwide political and economic uncertainty causes many to seek a safe haven for one's assets.  The U.S. dollar had been such a haven in the past, but this is rapidly changing due to irresponsible fiscal policies in the U.S. over the last ten years.  Thus, gold moves to the fore for nervous investors.  But some pundits believe that this may be a dangerous strategy currently ... see: Danger in Gold

The second question is a lot more difficult to answer.  It mostly depends if one believes that the U.S. will listen to Ron Paul (and others) and return to the gold standard ... and what one believes will happen to world inflation rates over time.   To see if a U.S. return to the gold standard is viable, one has to inspect the level of its gold holdings relative to its supply of currency in circulation, see:  World's Gold Reserves and Money Supply Statistics A number of years ago I remember hearing that the total amount of gold in the world would only fill a small barn.  I suspect that, today, it would fill a big barn (with a very strong floor).  The slide show referenced says that there are currently 30,160 tons of gold in the world ... of which the United States owns 8,965.6 tons (29.7%). At $1,900 per ounce, these U.S. holdings would be worth about $598 billion while the amount of U.S. currency in circulation is $974.8 billion.  This suggests that, to justify a return to the gold standard at parity would require that the price of gold to rise by at least 79% ... to about $3,400 per ounce ... just to back the existing currency in circulation.  Backing the entire M1 money supply (including demand deposits), but probably not needed, would require our gold to price-inflate to about $6,375.

Do I think that this is going to happen?  No.  First, I don't think Ron Paul will be elected President and I don't think that we will return to the gold standard ... Fort Know would be emptied in a trice.  And I am always skeptical of listening to and acting on sleezy TV and radio ads.  But it sure seems that the current rate of inflation in the price of gold seems to be trying to get us there.

Juxtaposition XXVII




Bush/Katrina

 



Obama/Martha's Vineyard

  

Apparently this juxtaposition needs further explanation: It pained me to see the man I voted for, George W. Bush, act so cluelessly regarding Katrina. Just as I suspect it might pain someone, who voted for Barack Obama, to witness his flying above the many economic crises now in progress. The parallelism of these optics gave rise to this Juxtaposition blog post.

Another Honeypot

Early in September, The Barry is set to go on national television to roll out, finally, his set of proposals to create American jobs ... one of which is expected to be an infrastructure bank (see: Reuters Story).  Wow! What a bad idea!  Have we learned nothing from the sub-prime mortgage meltdown and the role that the quasi-governmental banks, Fannie Mae and Freddie Mac, played in this debacle? 

Mort Zuckerman, owner of the New York Daily News, a few years ago called these federal re-mortgaging banks "Democrat honeypots" (see: Honeypots) and I suspect that this infrastructure bank would be destined to be a carbon copy of Fannie and Freddie ... populated with Democrat political hacks who will fatten their bank accounts at the taxpayers's expense (see: Fannie Mae Piggy Bank).  Fannie and Freddie so far have cost the taxpayers hundreds of billions of dollars (see Cost to Taxpayers).  How big a rat hole would this infrastructure bank be?

Bad, bad, bad idea!!!

For the Record

Yesterday, while perusing the Bureau of Labor Statistics website (see BLS.gov) for verification of Obama's contention about his jobs growth performance (see Fact Check), I also researched George W. Bush's record on the same statistic.  (Democrats and many media types repeatedly claim that Bush ... and the Bush tax cuts ... did not grow jobs during his Presidency.)  As it turns out, there were 137.8 million (seasonally adjusted) Americans working when G.W.B. took office and an equivalent 142.2 million Americans working when he left -- an increase of 4.4 million workers.  However, Bush's last six months in office were severely impacted by the sub-prime mortgage crisis ... with the result of 3.3 million Americans joining the ranks of the unemployed.

So, the near high-water mark of the effects of the Bush tax cuts and his management of the U.S. economy was that jobs grew by more than 7.7 million (4.4 million + 3.3 million) Americans.  The Barry's regime, so far, has shrunk the number of jobs in this country by 2.9 million.  Somehow, the facts always seem to be ignored or spun during political discourse.  What a pity!

Greyhound One

Apparently a $1,000,000,000 war chest is not enough to run The Barry's 2012 reelection campaign.  Now U.S. taxpayer schlubs are being hit up for another 5 or 6 million dollars to pay for a three-day Presidential "listening" bus tour in Midwestern swing states.  The buses being used for this tour have been tagged Greyhound One (and Two?) and were bought by the Secret Service at a cost of at least $1.5 million apiece.  Mitt Romney calls this boondoggle a "Magical Mystery Tour"  (see Mitt Romney).  These vehicles together with first-class hotel accommodations (see Lucianne Dubs) and a retinue of SUVs should bring the total cost of this obvious campaign tour to at least $5 million.

Avi Nelson, a radio talk show host here in Boston, this afternoon assumingly described this trip as being paid for by the Democrat National Committee.  He was wrong.  It is being paid for by us, the ever-suffering nudnick taxpayers.  But now that the federal debt-ceiling has been raised, our government checks should clear.

Fact Check

I've heard the current administration repeatedly say that Obama (The Barry) has added 2 million jobs since he took office ... including today on his taxpayer-funded, re-election bus tour in Minnesota.  So, being curious and skeptical, I went to the source, The Bureau of Labor Statistics, to see if this were the case.  The actual numbers (see BLS.gov) are as follows: 

When The Barry took office the civilian non-institutional population of the United States (for the definition, see Wikipedia) was 232.6 million and the seasonally-adjusted number of people employed was 142.2 million (after the shock of the sub-prime mortgage crisis in 2008).  As of the end of July, 2011, the civilian non-institutional population was 239.7 million (up 7.1 million) whereas the equivalent employment number was 139.3 million (down 2.9 million).  So, according to the President's own truth-telling bureaucrats, he seems to be "spinning" things ... but then, what else is new?

Addenda:
See: Just the Facts Ma'am for an update on this data through Nov., 2011
See: Pants on Fire for an update through Dec., 2011
See: "Lucy  for an update through Jan.,m 2012

2012 Presidential Prediction

Mitt Romney

Marco Rubio

In next year's election, the Misters (M.R.s) sweep all the states but California, Connecticut, New York and Vermont.

Grand Tetons

Dow Jones 3-Day Average

Whipsawed are we?  Had I only invested in the VIX ...

VIX -- Market Volatility Index

A Woman of a Certain Age

The Statue of Liberty is about to receive another makeover costing $27.25 million (see: Lady Liberty Upgrade).  This seems a little surprising in that the Lee Iacoco-managed complete 100-year restoration, costing $89 million, had just been completed in 1986 (see: 1986 Restoration) and a $20 million security upgrade was done in 2004.  One would think that such extensive restorations,  a mere 7 years and 25 years ago, would have held up a mite site longer?

Deleveraging

Deleveraging (the reduction of borrowed money) is now what is happening in much of the world.  Many countries, mostly in the developed world, had gone on a borrowing binge to the point of severe pain.  Even though it is a year old, this CNBC slide show is eye-opening insofar as pointing out which nations are the world's biggest debtors as a percent of their GDPs ... see: Biggest Debtor Nations  (begorrah hint, Ireland is way out in front). And, if the United States Federal Reserve Bank had not led other national banks in keeping interest rates artificially low, the moneys of the free world would already be spiraling out of control into hyperinflation. 

In other words, the spending binges that these western governments (including the United States) had been on are unsustainable and the only two solutions are deleveraging through extreme austerity ... witness the resulting riots in Greece and England ... or Weimar-style hyperinflation.  The Standard and Poors downgrading of the sovereign debt of the United States is one indication that a tipping point in this process has been reached.  (One wonders, after viewing this slide show, how France and Germany have escaped this same Standard and Poors downgrade from their AAA ratings.)

Nevertheless, the U.S. has only two real Hobson's choices:
1) Listen to the Tea Party folks and stop the spending binge that we have been on for the last decade (and, maybe, overhaul the tax system when this economic slowdown is over), or
2) Keep printing money until bread costs $1,000 a loaf.  (The day after the recent $400 billion debt-ceiling increase, little Timmy Geithner wrote checks for $239 billion ... 90% of which were cashed by Ben Bernanke at the Federal Reserve Bank.  In other words, we printed that much money in one day -- a very good start toward Weimar.)

The question now is which way do we go?  Do we inflate our way out of our rapidly growing debt morass?  Or can we rein in the tax-and-spenders whose only vision extends through the next election?  (I do think that the only real difference between these options is that the pain of austerity is felt mainly by the younger population whereas the pang of hyperinflation is felt by us oldsters.)  Seeing the recent lack of real political will in this country ... and the degree to which the Tea Party is being castigated by the main-stream media ... my (rapidly devaluing) money is still on the former option -- hyperinflation.

Yes, hyperinflation will be painful ... just as painful as austerity measures ... if not more so.  But we are a democracy and our people, in their childlike naivete, get to pick their poison.

Duncan Donuts

Arne Duncan, our overly-lauded Secretary of Education, has requested that the educational standards that were put in place with "No Child Left Behind" now be left behind in all of our 50 (or is it 57?) states (see The Department of Non-Education).  This is after hundreds of billions of dollars of taxpayer money have been lavished on the Department of Education since 2009 ... including even on a SWAT team that is specific to this department (Arne's Army?).  If you don't believe me on this, please read Mark Styne's comments on this ridiculously spendthrift item ... Swat the SWAT Team.  Even The Barry's 2009 economic stimulus program allocated $100 billion to America's educational lushness (see Government Numbers).

Lest you forget, our Department of Education educates not one child.  All it does is create layers after layers of bureaucratic fluff that mollifies liberals into believing that we are serious about fixing our flawed educational system.  And this is despite the fact that we already are spending more money on educating our children that any other country ... and keep getting sub-par results (see: Spending and Results).  Perhaps the lesson of Atlanta (see: Atlanta Scandal ) should be taken seriously ... effective education cannot be a top-down process.  We must first re-learn how to teach our children and this is not a function of spending more money.  It may well require that we sweep out many of the educational administrators and focus instead on how we teach our teachers (the "what" they teach much more than the "how" they teach) ... and burn everything that Albert Shanker, the former head of the American Federation of Teachers, ever wrote.

Afterward: The reason I say this spiteful thing is that Albert Shanker, past president of the American Federation of Teachers (now deceased),  was once asked why he didn't pay more attention to the slipping educational results for our children. His response was, in effect, "When they start paying union dues." Yuck!! 

The Fog of Mendacity

Chrysler Peapod

Here is a must-read blog entry on Powerline ... see Chrysler's Resurrection.  Prepare yourself to get sick to your stomach and again wonder if those bozos in Washington are ever being straight with the American public.  And, also see a clear example of how an august newspaper such as the New York Times can flack for the current administration.

The story is about Chrysler and its $12.5 billion bailout from the American taxpayers in 2009.  Most of the details are in this well-documented story and its contained links, but the bottom line is that, for all this generosity on the U.S. taxpayers' part, we have ended up taking a $1.3 billion haircut and also being on the hook for a $3.5 billion loan to Fiat (which recently finished purchasing 51% of Chrysler.)  This loan is ostensibly meant to allow Chrysler to develop cars such as the Peapod shown above ... but it will most likely never be paid back.

Now the other 49% of Chrysler is owned by the United Auto Workers which is a clear recipe for disaster ... anytime union workers negotiate with themselves over pay raises and work rules, they always end up winning in the short term but losing big in the long run.  Yes, you say, they do have jobs currently ... but with salaries that are effectively being paid for by the U.S. taxpayer.

Another part of this saga that isn't told directly therein is that the bondholders in the original Chrysler were virtually wiped out (30 cents on the dollar) and that the original stockholders now have lost something like 90% of their investment -- a very convoluted calculation. (In a traditional bankruptcy, they would have probably faired much better.)  If you are tempted to dismiss these losses to the better good of Chrysler's staying in business, please reflect on how many pension plans, 401Ks, and IRAs have lost oodles and boodles in this transaction ... just maybe one of yours.

So, next year, when you hear The Barry bragging about how he saved Chrysler and 115,000 "auto-industry" jobs ... with very little cost to the U.S. taxpayer, you will know "the rest of the story."