Monday, March 30, 2009

Signs of the Apocolypse

I never in my adult life thought I would ever see this headline anywhere except possibly in the Onion:
Uncle Sam Wants to Warranty Your Car
Here is the article - seriously.

I'm not a huge believer in the idea that the Constitution should be taken literally because the Founders themselves tried to figure out ways around the limits. Jefferson bought Louisiana and Hamilton set up a national bank (neither of which were particularly "Constitutional") right after we ratified the thing for Pete's sake. But does this quote really reflect the spirit with which the Framers wrote the Constitution:
"Your warranty will be safe. In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warranty," President Obama said on Monday.
In my humble view, the fellows who met in Philadelphia in 1787 and ratified what, up till now, has been the most successful experiment in self-government in human history never in a MILLION YEARS wanted the U.S. government to do something like this.

And as I wrote about three months ago, enough with the plan a day strategy. It's not helping in case people hadn't noticed. What would help GM and just about every auto manufacturer, bank, financial institution, homeowner, and local government official would be doing nothing more. Enough with the programs and bailouts. If 2 trillion plus is not helping, another trillion won't make it any better.

Friday, March 27, 2009

Quote of the Morning

For me anyway. From Freeman Dyson on the global warming debate:
Beyond the specific points of factual dispute, Dyson has said that it all boils down to “a deeper disagreement about values” between those who think “nature knows best” and that “any gross human disruption of the natural environment is evil,” and “humanists,” like himself, who contend that protecting the existing biosphere is not as important as fighting more repugnant evils like war, poverty and unemployment.
It's from this piece in the NYT weekend section (why do they release it on Friday?) about one of the world's most prominent physicists, a liberal, who is a global warming skeptic.

No matter what your views are on global warming, and I happen to think something is going on, this piece is good biography, and a nice and fair review of the politics, science and morality behind this public debate.

Thursday, March 26, 2009

It's Not My Fault You Chose to Live Near a River

Normally I have tremendous sympathies for all of my brethren, and breth-women, in the Midwest. I have a slow cooker; I shovel snow and clear off my neighbor's sidewalk, hills scare me. But whenever spring rolls around there are always stories like this one where some Midwestern town, located along a river, faces destruction because there's a flood.

This year it's North Dakota, last year it was Iowa. In 2007, historic flooding hit Kansas. In 2006 it was Minnesota that had serious flooding. Every spring floods hit, every summer farmers complain about droughts, and every fall the world does not come to an end.

Now in case any of y'all in the South or West are wondering, rivers in the Midwest do not randomly start searching each spring for some unsuspecting town to attack and flood. No, people choose to live next to rivers, which is largely a function of history. Rivers USED TO provide a critical transportation link and promote economic growth. The carbonly evil automobile solved all that, but most of the towns along rivers never really shut-down.

Only problem with all of this is that the Federal Government is the nation's primary provider of flood insurance. I have only one question to ask here - ah, WHY?

Well because the Federal Government has externalized all of the risk that people who live in flood areas have on those of us who are smart enough to decide that we don't want to live near rivers, or oceans, or lakes, or even retention ponds. In the 1960's, as this John Tierney column points out, the Feds starting offering heavily subsidized insurance to people in flood areas, but only about 1/3 of eligible people bought it. The other 2/3 correctly guessed that FEMA would save them when disaster struck. They were right in the case of New Orleans, and the pictures of people being pulled out of flooded cars on the news usually precedes an announcement by the Feds of disaster areas and checks in the mail.

Now in Fargo we are getting a lot of very emotionally moving stories about folks who are fighting a rising river to save their homes. Look, I feel for them, but let's say that these folks lived next to an active volcano, and we were reading about attempts to build a lava levy or roofs to prevent ash from burying their homes. I suspect we'd all be thinking "Sorry I'm not them, but hey, what did they think was going to happen? It was sort of stupid deciding to live near a volcano and thinking it would not erupt." And I doubt we'd be happy that our tax dollars were going to pay to REBUILD their homes next to the volcano so it could happen again.

Now there is some good news on this front because one private insurer wants to get more actively involved in the business of flood insurance, so perhaps we can begin to push the Feds out of this horrible practice. But the way politics works I doubt that will happen soon.

Your tax dollars at work - abating other people's risky, and somewhat stupid behavior. We don't need to live next to rivers in the Midwest anymore, and we certainly don't need to subsidize people who want to live near them.

My Bold Prediction

Obama's gonna try to legalize pot. Seriously. And it's not because I've called for legalization last month.

For a while I've been kicking around in my head how he's going to pay for all of this. Cap and trade is looking waaaaay less likely to pass without a major downsizing, and that means less revenue. Health care reform is still going to cost a ton. The easiest, and most painless way, to raise money is through pot legalization.

Teddy and I were cruising through stylish French Lick, Indiana last weekend, and we popped into the casino located there. The clientele is utterly blue collar - they have 2 cent slot machines populated with old folks who smoke cigs and take hits from their oxygen masks all the while pulling the one-armed bandits. It's like watching a scary, geriatric Busby Berkeley number. However despite all this exploitation of the old, sick poor, it still raises enough revenue to quench the thirst of government spending in the Hoosier state.

Sin taxes are the only really new and potentially bountiful source of government revenue that remain untapped. And Obama can combine the legalization revenue with a reallocation of cops who now focus pot busts and call it an increase in police protection. It's a total win-win.

And what's more, Yahoo news is reporting today pot legalization received a ton of attention during his town hall session on-line. It will happen folks - bet on it.

I Hate Conservatives and Liberals This Morning

Despite great news on the home front - Fundbaby is sleeping in his crib, in his room, for fairly decent stretches - I cannot believe the hypocrisy of the right and the audacity of the left this morning.

Victor Davis Hanson, a cheerleader for the Iraq debacle during the Bush years, tells us here that we need a "Socrates" in Washington to tell us the truth about the impact that our government's spending is going to have our on financial futures. Problem is, his facts and logic are all screwed up. Note this quote:
During the Clinton years, we got higher taxes but eventually balanced budgets. During the Bush administration, we got lower taxes but spiraling deficits. But now during the era of Obama, we apparently will get the worst of both worlds - higher taxes than under Clinton and higher deficits than under Bush.
Vic, can I call you Vic? Vic my boy the key for the Clinton and Bush stories are simple. With Clinton you did get some higher taxes initially, but you also got spending curtailed by sleaziest divorcee in America - Newt Gingrich - who's GOP buddies blocked a bunch of Clinton programs. With Bush half of the reason we had spiraling deficits was this stupid Iraq War you love so much. By the way, all those "tax cuts" aren't real because we have to pay for them down the road without corresponding spending cuts. Bush, who never had a mortgage in his life, didn't understand that basic concept.

At least Obama's being honest about his deficits, although as I've noted here on a regularly basis, trillions are big numbers...........really big numbers. Which brings us to how the Democrats plan on paying for all this red ink.

Turns out the payment will come in the form of higher taxes. I'm shocked. What possible evidence do we have to suggest Democrats like raising taxes? Well this morning the Left is showing it's true colors - finally. EJ Dionne has stopped the charade and along with Alice Rivlin is simply asking that more people pay more taxes. The "rich" will now be the top 8% (note she doesn't give the income numbers of where that ax will fall). But my favorite part is the way Alice avoids the phrase "tax increase." Check out this quote, it's friggin New Speak:
Congress could increase funding for health-care reform by including part of employer-paid health benefits in taxable income. It could put the Social Security system on a sustainable long-term basis by making minor tweaks to benefits and revenue to take effect a decade or more hence.
"Tweaks", "including part of employer paid benefits in taxable income," and "to take effect a decade or more hence." Translation - "cut benefits and raise taxes," "raise taxes and discourage employers from providing benefits," "put off the impact of the taxes until a new (probably Republican) administration has to deal with them."

By the way, why is that all of the folks who want to fight wars are too old to be drafted and NEVER SERVED A SINGLE DAY IN THE MILITARY like Victor Davis Hanson? And why is it all the folks who want to raise taxes are rich elite talking head types like Alice Rivlin who serves on the Board of New York Stock Exchange or EJ Dionne who lives in snobbish Bethesda, Maryland and went to Harvard and Oxford? Just wondering?

Wednesday, March 25, 2009

The Wolf Howls Correctly

Crazy meeting day and Mrs. Fundman and I have a "date" later, so not much posting today. However I couldn't resist a little something from the best column I've read critiquing the Bank Bailout Plan by Martin Wolf. The key quote:
the government has ruled out the only way of restructuring the banks’ finances that would not cost any extra government money: debt for equity swaps, or a true bankruptcy. Economists I respect – Willem Buiter, for example – condemn this reluctance out of hand. There is no doubt that the decision to make whole the creditors of all systemically significant financial institutions creates concerns for the future: something will have to be done about the “too important to fail” problem this creates. Against this, the Treasury insists that a wave of bankruptcies now would undermine trust in past government promises and generate huge new uncertainties. Alas, this view is not crazy.
If he's right, Obama is putting a HUGE bet on the "too big to fail" argument with a plan, heavily subsidized by the Feds with our money, that most serious people believe won't solve the underlying problem. He notes earlier in the column that IF this plan fails after hedge funds and bankers have made money from the government subsidizing the risk involved in buying these bad assets, the banks will still be screwed up. He worries that this situation "is going to convince ordinary Americans that their government is a racket run for the benefit of Wall Street."

Don't worry Martin, most Americans already know that. However in the past most of us were making money along the way, so we tolerated it like a successful business tolerates paying protection money. The real problem now is that we are transferring the funds to Wall Street while we're all getting killed in our investments. That's too much to bear. Let me provide an example from U.S. history to illustrate.

In Mike Royko's classic book Boss, there's a police scandal in Chicago in the 1960's, which sounds weird because the Chicago Police Department was one of the most corrupt in America in the 1960's. But this one was different. Officers were literally breaking into people's homes and businesses, not just shaking down criminals or taking bribes. As Royko put it:
The public was genuinely shocked. It's one thing to take a few bucks to overlook an illegal U-turn; but even Chicagoans could become indignant at the thought of policeman jimmying the locks of appliance stores and loading up their trunks, on city time yet.
We'll put up with Wall Street owning both sides of the Duopoly, as long as we are largely left alone, not unduly burdened with taxes, AND making a decent living. When it gets out of control all bets are off. Obama's from Chicago; he should pick up Daley's book and study it. Then he should tell the bankers, and their whiny powerful creditors, to sleep in the beds they both made and stop asking the rest of us to bailout out their audacity and stupidity.

Monday, March 23, 2009

The Socialists Continue to go Free Market

I noted several weeks ago that in France of all places the housing market is largely shielded from the carnage that's occurred here. Why? Well they don't subsidize housing and they require people to have a pretty good sized chunk of change to buy a place. They also have lower household debt than we do. In short, despite their reputations they seem pretty sane when it comes to household finance.

Now today comes word that the American left's other favorite socialist paradise had decided to take a pass on nationalizing Saab, the Swedish automaker. Yes Sweden, the hammer that every good liberal in the U.S. uses when socialism gets critiqued, has decided to let the market kill off Saab unless some private investor steps-up to the plate.

In the meantime today we see that Timmy O'Toole, sorry, I mean Geitner, is planning on continuing to throw billions of OUR dollars at basically five large insolvent U.S. banks. This is a radical departure from the previous administration's plan to throw billions of dollars at every bank they ran into walking along the street.

How recycled is this plan from the Bush administration's plan? Well even Dr. Depression, Paul Krugman, calls it recycling. Paul doesn't understand the key problem. Read the piece - he honestly believes that simply by making reasonable arguments to the Obama folks they will see the light. The real problem is not about arguing policy - it's that both Democrats and Republicans owe their existence to the same rich interests. Those rich interests don't want to lose money with those large banks. The two parties are one and the same - no difference between the two gangs of thugs.

But back to our "socialist" Europe friends. I've always cringed when folks have blamed "capitalism" for this current crisis as much as I've twitched when they called European countries socialist. We aren't Hong Kong or some libertarian paradise. The Europeans do have markets, albeit typically ones that are more regulated than ours.

But the events of the past few months have really got me completely confused. I mean, am I going to start hearing Leftie Americans railing against the oppressive housing policies of the French and the failure of the Swedish government to acknowledge the suffering of workers? Will Ann Coulter buy a place in Stockholm? Is Fox News going to broadcast from Paris? Tune into the next episode of the Twilight Zone.

This Week's Nominee for "That's Journalism?"

From the Washington Post today on the Obama administration's decision to reconsider giving "women" under the age of 18 the Morning After Pill. The reporter gets a quote from a pro-choice group, not a pro-life one, and the representative gives this gem of a comment:
The message is clear: The FDA has to put science first and leave politics at the door.
Yeah because pro-choice advocacy groups are not political - at all.

Geez.........from the Post? That's a new low no matter what your views on abortion and birth control are.

Where's Jonathan Swift When We Need HIm?

Remember Swift? He penned the "Modest Proposal," in which he satirically suggested that the way to deal with Irish poverty and overpopulation was to have the Irish sell their babies as meat for rich English customers. Trust me, you probably read it in high school.

Anyway, I'm waiting for the day when an environmentalist suggests a similar "solution" to deal with the impact of the world's poorer countries on global warming, ooooopppsss, climate change because they are already suggesting the best way for them to address global warming is to stay poor and be unemployed, and now not have the right to buy cars and get wealthy.

Now setting aside for a moment the fact that who the hell are we to tell another country that it can't produce and sell a car, has anyone of these enviro-reporters or activists actually stopped to think for a minute what wealth and progress mean for the environment? They all seem predisposed towards an idyllic vision of poverty in which "native peoples" "at one with the land" "only use what they need."

The problem with all of these preconceived notions about the world is that they are deeply political, as Matt Ridley correctly notes in this article. Folks in the environmental movement claim that progress has done more damage to the environment than subsistence living and native practices. The problem is that the fossil record doesn't bear it out.

And more bluntly, neither does any trip to the developing world. If you want to see trash thrown from buses and people destroying forests, go to Brazil, or Guatemala, or Kenya. If you want to see people picking up trash, planting trees, or worrying about cleaner air and water, go to the richer parts of Western Europe or America where wealthy people have the time to pursue those policy goals.

So while I have no doubt that Tata's new Nano will increase carbon emissions in the short run, I have little doubt that in 20 years a richer India will do much more to preserve the environment, not to mention that thousands, possibly millions of lives that will be saved and enriched if we let them grow economically.

Unless the real green agenda is an anti-human one - in which case I suggest the environmentalists sell their babies as meat to prevent environmental degradation, not the Indians.

Friday, March 20, 2009


I mean I don't believe this article from the Los Angeles Times - not National Review, not the Wall Street Journal. Obama is comparing AIG to a suicide bomber at a time hall meeting............I mean, shouldn't someone be screaming about this? Like a lot?

Instead the friggin Washington Post reports, very apologetically, about Obama making an inappropriate joke about how is bowling game is like "the Special Olympics." Wonder if Cheney had made a joke like that........ah I don't even know why I'm going there.

Back in the real world, people want to kill AIG employees. God Bless America.

Hat tip to Jay Greene's awesome blog.

Thursday, March 19, 2009

Dr. Keynes, Meet Dr. Friedman

Well so much for the New Deal analogies. Yesterday the Fed did exactly what Uncle Miltie would have done - dropped a trillion plus bucks from a helicopter onto the stock market. Combined with the fiscal stuff that Obama's been doing, we've entered into very new, and very weird territory. I largely agree with this guy who points out that we will eventually have some nasty inflation and some real "Third World" debt issues if things break a particular way.

My initial take on this, sitting in a hotel lobby, is that the Fed must have seen something in the data that scared them. I'm not sure why Bernanke was talking about the recession ending maybe later this year UNLESS he was counting on this working.

Folks, doing this fits with what the monetarists (read here, University of Chicago economists) say you should do. It's textbook. Only a small slice of economists have a strong critique to it - the so-called Austrian School. They argue you have to ride out the problems, make the structural adjustments, and that any government intervention simply makes it worse.

Alas now any arguments that Keynesian economics can finally be tested here are gone. This blurs the line between monetary and fiscal. We really won't be able to know which one of these, fucking gigantic, interventions has the biggest impact when, ok, IF, we get out of this mess.

The Fed yesterday basically instantly added a trillion, deep breath 1,000,000,000,000 DOLLARS into the money supply. This had better work or "Welcome to Zimbabwe!"

Wednesday, March 18, 2009

I'll Take a Beer and a Shot

So as long as we're all pissed about hypocrisy, I give you this little gem and this other little gem.

If this blogging gets any easier I may have one of my cats do it.

Have yourself a wonderful night seething in continued anger at the bullshit theater that continues in DC.

Ignore the Man Behind the Curtain

165 million dollars is enough for myself, Mrs. Fundman, Fundbaby, and most of our neighbors on our block to retire on comfortably. We could probably throw in our immediate families and a few friends. It's a lot of money for any normal sane person.

It is, however, much smaller than 300 billion dollars. Why compare it to 300 billion? Because two stories down on the front page of the Post this morning is this article, which will not receive 1/1000th of the attention that the AIG crap is getting, in which a budget expert says that the Pentagon has wasted about 300 billion dollars with the way it chooses and pays for its weapons systems.

Where do all of these Members of Congress, who have been irresponsibly and blatantly wasting our money like it grows on trees, get off crucifying this mope WHO THEY FRIGGIN HIRED over a lousy 165 million when just down the hall there's another guy WHO THEY HIRED telling them they've wasted 300 billion?

If the Wizard of Oz had managed to deflect attention this well Dorothy might still be in Oz, Judy Garland wouldn't have gotten hooked on drugs, and we wouldn't have to suffer through Liza Minelli concerts.

Monday, March 16, 2009

I'm Sure GM Will Spend it Better......and Citi too

Look, anyone who's not pissed off that Hammer Hank's monster, AIG, took our money and gave it to foreign banks and people in their financial services division that started this mess is probably working in AIG's financial services division.

That having been said WHAT IN GOD'S NAME DID THE GOVERNMENT THINK WOULD HAPPEN WHEN THEY GAVE BILLIONS OF DOLLARS WITHOUT ANY APPARENT OVERSIGHT AT ALL TO A COMPANY THAT HAD SCREWED UP IT'S FINANCES????????????? Were they hoping for some sort of miraculous transformation of judgment, wisdom, and benevolence? That only happens in sitcoms and Disney movies.

Your neighbor has just destroyed all of his lawn equipment because he's just not very good with mechanical things. He appears at your frontdoor and says "hey, I need to borrow your chainsaw, cut down some trees in the neighborhood because if I don't my house will have a tree fall on it and ruin the value of all of the homes in the neighborhood." Your response is not "Sure, good ahead, cut away, bring it back whenever, I trust you." Your response is "Gee Bob, I'm out of chainsaw oil," or "Man, Bob, why don't you ask Phil," or "Bob, I'd be happy to, but let me do the cutting."

You see, you're not stupid. The government on the other hand is stupid, and irresponsible, and now trying to point fingers at AIG when they should have known better.............Jeez.

The 800 Pound, Obese, Gorilla in the Room

In 2006 Massachusetts mandated that just about everyone in the state be offered health care that was going to be run through the state government paid for with taxes on businesses. It was a radical plan to increase coverage, and it was pretty widely hailed on the Left as a great idea and on the Right as something straight out of Revelations. Of course, neither event seems to have happened as this piece in today's Times shows.

Instead of a wonderful fairyland full of hospitals staffed with friendly doctors or a hellish wasteland created by some beast with 666 (or maybe 616 apparently) stamped on its head strolling around, it's expanded coverage, but at a substantially increased cost. And that's left the politicians wondering where to get more cash and where to save money.

And that brings me to the only thing I know about what will happen if the government "provides" health care. Here's the key quote from the Times piece:
Some health policy experts argue that changes in payment practices will not be enough to slow the growth in spending, even when combined with other cost-cutting strategies. To truly change course, they say, the state and federal governments may need to place actual limits on health spending, which could lead to rationing of care.

“Really controlling costs requires just stopping spending,” said Stuart H. Altman, a professor of health policy at Brandeis University.
No one on either side of this political fight wants to admit it, but here's the truth. Reform will mean changes. If you're uninsured or underinsured now, you'll be better off - full stop. If you are insured, paying a ton, and don't have any particularly exotic problems, you'll probably be better off in terms of costs, but you will have to wait longer to see doctors and specialists. If you have serious problems, or really like your coverage now, you are going to be worse off. You can't have it all. In short there will be trade-offs as the folks in Massachusetts are finally finding out.

Friday, March 13, 2009

Over 100

I've been doing this for two months. I've posted more than 100 entries. Your thoughts, comments, critiques, tossed tomatoes, would be greatly appreciated......unless you have mean things to say, in which case you can keep your thoughts to yourself.

Fry Bernie Madoff

I should begin by saying up front that I oppose the death penalty in all cases. It's a religious/moral thing that I won't bore you with. But since we live in a country that happens to still reserve the right to kill its citizens legally, I'd like to propose we impose the death sentence on the, now self-admittedly guilty, Bernie Madoff.

Punishment should be proportionate to crime. If we believe that an individual has done extremely destructive things that damage the fabric of society and harm the well-being and safety of lots of other citizens, we should have a punishment that fits the scope of the crime.

I can think of no other criminal in my lifetime who has done more widespread harm to public trust, capitalism, non-profits, universities, individuals, and the health of the U.S. economy than Bernie Madoff. He's stolen billions, ruined thousands of lives directly, further damaged what little trust existed for investment advisers and bankers, already cost tax payers millions and will cost perhaps billions more in investigations, tax research, law suits, and countersuits. And of course the blizzard of regulation that will occur in his wake will cost us even more. He's even prompted a couple of Wall Street folks to commit suicide, so you can put killing people on the list as well. He may be the most destructive individual force I've ever seen since Bin Laden.

As I noted in an earlier post, my Dad works in the criminal justice field. When he first started out he had to watch a couple of executions, which helped seal his opposition to the practice. They had a nickname for guys in death row back when they still used the electric chair - they called them "crispy." Let's turn the chair up to "11" and make Bernie "extra crispy."

Exactly What IS the Daily Show

I'll admit I don't watch anymore primarily because it is on too late now that Fundbaby has arrived. But when people talk about it, and most of these folks are my left-wing friends, they always talk about how Jon Stewart is ridiculing Republicans and Wall Street. And when I ask them if it's a news show, they laugh and say no.

But my understanding is that A LOT of kids actually treat it as a news show. That opinions are formed. That information is transmitted. And last night's "interview" with Jim Cramer, in which two FRIGGIN MEDIA FIGURES, both of whom are basically entertainers, produces headlines all over the web, I guess I wonder exactly what's news, what's not news, and what's the Daily Show? Anyone who watches it regularly, help me out here.

Strangely I think the Daily Show, like a lot of comedy/news/current affairs outlets faces a real problem with Obama. First off, Bush was just plain easier to make fun of. The guy's a dufus. But there are other obvious problems with Obama, like the race thing. I wonder how they'll do in terms of evening out the bias that others have found (see the above link) and subjecting him to the ridicule he should get as president.

Thursday, March 12, 2009

Karl, How Do You Sleep at Night?

And frankly how does anyone who works in politics? Take a look at this completely disingenuous column in today's Journal from Karl Rove on how Obama is being deceptive in his projected budget spending.

Here's an example of the hypocrisy from KR:
Mr. Obama's budget downplays some programs' true cost. For example, his vaunted new college access program is funded for five years and then disappears (on paper); the children's health insurance program drops (on paper) from $12.4 billion in 2013 to $700 million the next year. Neither will happen; the costs of both will be much higher and so will the deficits.
Since when has anyone from the Bush White House given a damn about deficits? Deficits were like water boarding for you guys - necessary and certainly legal.

Well it certainly takes one to know one buddy, because my favorite hobbyhorse from the W years, the drug benefit for Medicare millionaires, was sold to the Congress BY THE BUSH WHITE HOUSE as being half as expensive as it turned out to really be.

I know this stuff sells print space for the Wall Street Journal and airtime for Fox, but Karl, dude, do you really believe it?

Like Mom Always Said About Carrots

To this day, I hate carrots, especially raw. My Mom would make me eat them at least a couple times a week. She'd always say "eventually you'll learn to like them."

Which reminds me of this creepy headline from the New Republic this morning:

Americans Like Big Government:
They just don't really know it yet

Oh thanks - can you hold the carrots though?

Free Speech in Iraq Gets You Three Years in Jail

Nice to see we've built a regime based on rule of law in Iraq. Imagine how many years he would have gotten if he'd actually hit W with the shoe.

Why We Need Walmart - Warts and All

The Poet asked me to blog about WallyWorld a couple of weeks ago, when she forwarded me this undercover piece by a person who actually went to work at a Walmart. The article basically says that, despite what Walmart's opponents say online, working there sounds stunningly like working in just about any other retail place. It's dreary, dull, hardly inspiring and tough to make a living working there, but Walmart is not exactly like a labor camp.

It took me a couple of weeks to figure out what I wanted to say more broadly when I came across this piece in the Times. Remember that during the White House's Health Care Fiesta they were claiming that tons of cost savings could come from electronic patient records? Well it looks like Walmart has beaten them to the punch, and in a fight between the Federal government and Walmart, we have plenty of evidence to suggest Walmart would wipe the floor with the Feds.

Mrs. Fundman and I shop at Wally World at least once every couple of weeks. The produce blows, and I'd sooner chew on shoe leather than purchase any fish from a Walmart. But if we are out of spaghetti sauce, canned tuna, dairy, pasta, or Mrs. Fundman's Soy Breakfast Hockey Pucks it's the only place to go. Packaged stuff is so much cheaper than any place else. How do I know this? Well partially through comparison shopping, but partially through simply observation. I just look at who is shopping there.

The store is full of immigrants (or my town has a miraculously successful Spanish program in its public schools), African Americans, and working Moms who benefit from the prices and the ability to make one trip to shop for everything. Anyone who's a parent understands how friggin important it is to be able to save time and not shop at three or four different places. When you drive a Lexus SUV, have "domestic employees" at home and send your kids to boarding school you may not understand the appeal of Walmart. When you work for a living and try to raise a family you do.

Oh I've heard the claims from the left that Walmart destroys local "Mom and Pop" businesses and hurts minorities by not offering health insurance and underpaying people and they don't do the union thing, and blah, blah, blah. Lower middle class folks, older people, poorer folks who cannot afford to eat tofu, organic beet chips, free range mushrooms, or buy hydroponic toilet paper, environmentally friendly free trade toilet cleaner, or enjoy Turkish llama cottage cheese need Wally World and the savagery that it inflicts upon other retailers to drive down prices. "Mom and Pop" usually means "Boutique" these days, and Walmart eats Boutique for lunch.

And THREE YEARS before President Greenie won office, lookie who was putting solar energy panels on their new stores to save money? That would be Walmart. And who sells tons of organic foods each year? Wallyworld.

But thinking more broadly, going to Wally World is like flying Southwest Airlines or seeing people at McDonald's order a Latte. It's about democratizing quality of life. You, as a lower middle class consumer, can do much better saving money at Wally World and do more with it. The same goes for Southwest Airlines. No more long bus trips and lost time. Both of them have improved the lives of a lot of people. And you don't have to look into a Starbucks and wonder what Cappuchino tastes like; you can afford one for a buck fifty at Mickey D's.

Which is not say they are a panacea. I wouldn't want to work at Wally World now even though they are now being called "innovators" in providing health care. McDonald's still grosses me out foodwise. But all of them, and Southwest too, provide opportunities for folks who aren't rich and affluent to enjoy more of the conveniences and luxuries of modern life. They do it by playing fairly through markets, not relying on government subsidies or handouts to fight the competition. So don't be surprised if Walmart and its ilk continue to be at the forefront of innovation and cost saving in a lot of surprising areas. Now if they could just sell a decent piece of Tilapia......

Wednesday, March 11, 2009

Environmentalists Celebrate Human Suffering

In not one, but TWO articles in major news outlets this week. Don't worry about delaying your retirement, forcing your kids to take out more loans for their college education, or helping out your neighbors who are unemployed - carbon emissions have gone down! Thank God! So sayeth Newsweek in this thoughtless little piece on how the world's recession is good for the planet. How can anyone think that unemployment among the world's poor is somehow "good?" I mean where have sensibilities gone?

At least in the case of this piece from the Boston Globe they have some regional bias which explains the hypocrisy. I mean this is the same place where the liberals from New England are happy to have wind power, as long as it doesn't ruin the view from Cape Cod.

Monday, March 9, 2009

An Alternative Title

Most of the major news outlets have been reporting on this study about the state of American religion by a couple of demographers funded by Lilly with headlines about the decline in Christianity in the U.S. No doubt their numbers reflect that, but in one area only - mainline Protestantism. Check out Table 3 on page 5. It's pretty amazing.

Alternative title - "Welcome to Catholic/Evangelical America" Now we know why Obama was trying to reach out to Evangelicals with the whole Rick Warren thing.

No Guns and No Strollers

Those were the only two things you could not bring to the Golden Gloves matches held at the Armory in my hometown several years ago - I kid you not. Apparently some smart Army reservist had decided that preventing the widespread distribution of these two dangerous tools of destruction among the crowd would make us all safer. So can we ever know that by preventing strollers and firearms from entering in the Armory did save me from gunshot wounds and being beaten to death by a 1,200 dollar stroller?

Over the past few weeks a lot of folks in the blogosphere, media, and government have been debating the fate of Citibank since its share price is around a dollar and the government has become the largest shareholder at 36%. By the way, the government's other big "investment" AIG, has now turned completely sour and will almost certainly end up being a huge money loser after some people argued the deal might actually turnout profitable.

The gist of the Citi debate, on the surface, is the "too big to fail" vs. "markets must have failure to function" argument. Because Citi is much more than just a bank, because it has operations in more than 100 countries, and because a very rich Saudi prince happens to have invested billions, the government can't let it fail. After all when it let Lehman die, look what happened!

There are two folks, Megan McArdle and Kevin Drum, who I read, and they have both posted on this issue over the weekend. I think both make reasonable opposing arguments on the matter.

I'm not an economist, although as I've noted before even if I was it would hardly make me authoritative on the issue of how the macro economy functions, so I have no particularly strong view on how bad a Citi shutdown or nationalization would really be. But I do know this - from a political standpoint the actual issue of causality and credit-claiming is central here.

Folks on the left argue that while the government sat around and "did nothing" during the Bush years the economy collapsed. Folks on the right have argued that the market's decline since Obama became President is "caused" by his policies. Harry Reid says the Stimulus Package will "create" 3 million jobs, and Richard Shelby isn't worried about letting Citi fail and says it would fit into the model of how we deal with smaller banks.

So here's what it comes down to - the left uses something called the "precautionary principle" when it makes most of these arguments. Whether it's about the stimulus, bank bailouts, or safety regulation, they argue that 1) past failure to act has caused problems and 2) current actions will solve and prevent problems. Generally speaking conservatives and/or libertarians argue the opposite that 1) past problems are caused by government actions and 2) government actions just exacerbate current problems.

Who's right? Well who knows because determining "causality" in statistical terms what causes something to happen, is really, really, really, difficult to determine in complicated systems. Try to determine in the real world what causes things and it gets even harder.

My general rule is that the precautionary principle overstates risk, BUT, and this is a huge but, most people are very risk averse during crises and willing to "pay" for risk abatement through future taxes. In English, yes I will mortgage part of my children's future even if there's a small chance this policy will prevent a horrible Depression. Interest groups (read here bond holders in AIG and Citi) know this and play up the fear.

But the right has never, NEVER done a good job acknowledging the potential risks and real costs that markets incur on losers during crises. That's why they are losing now, and that's why the costs of all this government "risk prevention" are so much more costly than they have to be because they have not offered a comprehensively less costly alternative set of plans.

And in four years when Obama is running for president again and the economy has turned around, which it will probably do, the two parties will have to fight over whether his plans helped spur the turn around or simply burdened us with higher taxes and debt. Either way the key issue of what actually "caused" the recovery won't matter - what will matter is who can make the better case politically, and that will probably, again, be the Democrats.

Sunday, March 8, 2009

As My Father Likes to Say

About guys who go on a killing spree and THEN kill themselves, why do they always get the order wrong? Remember: First start with yourself.


Two more idiots, one in Alabama and the other in Germany, also got the order wrong this week.

Thursday, March 5, 2009

Angry White Men Won't Cut It

As Wall Street tumbles, the government prints money like Mugabe, and the Bachelor apparently was lying, Republicans have had to spend the past week bowing down at the altar of Limbaugh. I honest to God never thought I would write a sentence like that in my life.

I mean this is the guy who made fun of Michael J. Fox's Parkinson's disease. The guy who was addicted to prescription pain killers and still wanted us to go after drug dealers. The guy who did the "magic Negro" parody on his show is that revered in the GOP? And a political party staffed, presumably by professionals, has allowed the White House to make HIM their spokesperson.

I'd like to recommend that the Republicans hold a special training seminar for their leadership in which they watch this film. Maybe they'll learn something about politics and how it's played.

Bailing Out Failed Entrepreneurs

Remember when Obama first said that this bailout was not going to reward speculators? Check out this little quote from NPR's All Things Considered this morning:
Tucker Roberts, 31, of Crested Butte, Colo., purchased a townhouse for just under $500,000 two years ago. He was hoping to sell it for a profit soon, but instead prices have gone down.

"So now I own a house that's worth, probably, $150,000 to $200,000 less than my total mortgage is on the place," says Roberts.

His salesman salary ranges from $50,000 to $75,000 a year, so the $3,400 monthly mortgage is nearly impossible to afford. Until recently he had two roommates but now that they're gone he's burning through his savings and says he may have to liquidate other assets to keep current on the payments.

"By spring of next year if I can't get my house sold or I can't start making a lot more money, there'll be a three bedroom two-and-a-half bath house for sale really cheap through a bank," says Roberts.

Roberts is among those a new U.S. Treasury Department program is designed to help. The $75 billion foreclosure relief plan is for those facing imminent hardship. It offers cash incentives to lenders who modify mortgages on single-family houses up to $729,750.
With all due respect - are you kidding me? He bought a half a million dollar townhouse at the ripe old age of 29 making 50k a year. Put two roommates in the house to cover a 3400 dollar mortgage. Hell - how many people does anyone out there know with a THREE THOUSAND FOUR HUNDRED DOLLAR MORTGAGE?

Then he friggin admits he was flipping, but this new Treasury plan was DESIGNED TO HELP HIM??????

This entire plan has lost sight of its originally intended goal of helping people who were screwed into bad mortgages. The reason it has is simple - the vast majority of people who are "stuck" were speculating. We've seen the enemy and it is us. The only real victims here are those of us who did not speculate. We are going to bail out a bunch of folks who made bad bets and now want "the government" to bail them out. Of course "the government" will ask those of us "suckers" to pay for the entrepreneurs' failure. Since when was that the American way?

The banks, Countrywide, real estate agents cannot be solely blamed. You can't con an honest person, but you can sure as hell con a greedy one. We have to point the fingers of blame at ourselves when there were at least four television shows about house flipping on cable just last year. Two of the shows basically had the same name - one was called Flip that House, and the other was originally called Flip this House. They couldn't even come up with original names for it. Bravo had a show called Flipping Out which now seems prophetic. Now I wonder if they'll have shows called "Bail Me Out," or maybe "Up Side Down in Phoenix!" or possibly "Foreclose This!"

This has become total and utter risk abatement by the government. Young Tucker took a calculated risk in the marketplace. It did not work out for him. The asset lost value. It was never, NEVER in his mind supposed to be a home in the traditional sense. He might as well have been buying gold, or internet stocks, or tulip bulbs.

Now instead of putting him through the same entrepreneurial process that Henry Ford went through several times in his life, losing his shirt, before he made it big, Tucker will be "bailed out" by the Feds. To what end?

He's now trapped in a house he doesn't want. Some young couple that's saved diligently for this opportunity will be denied the chance to purchase that home. The rest of us will not benefit from this supposed price support because this will simply put off the inevitable - he'll have to sell the house at a loss eventually. And besides, we are also paying 75 billion dollars to put off this problem. Of course with the Feds throwing around trillions, 75 billion seems like pocket change doesn't it?

The lesson Tucker learns is that there really isn't any risk anymore. There was no downside. No one loses. Everybody gets participation ribbons, even the kids who finish last. No more jokes about France people. At least in France people still have to pay their debts. Check out this quote from a piece on the situation in the French debt and housing market from last year:
Only 57 percent of French people own their own home, around 10 points below the euro zone average and banks have generally required large deposits for home purchases, limiting the build up of large loans.

OECD data shows the debt of French households was only 89.1 percent of income in 2006. In Britain and the United States that ratio stands at 168.5 percent and 139.7 percent respectively.
France has not made the idea that everyone must own a home the national mantra. France, the land of markets and responsible government. How early to the bars open around here...............



Folks I'm going to be asking donations be sent to poor Chadi Moussa. Read about his horrible, heart-wrenching saga in this New York Times piece that has brought my frustration with this "bailout" to new heights. Mr. Moussa bought a 2.25 million dollar home that's lost half its value..................unfortunately, the piece seems to say, he doesn't qualify for a bailout. Sob, sob, sob.

I urge, nay, implore you, to send him whatever help you can to help him in this difficult circumstance..............when's the next flight to Paris?

Wednesday, March 4, 2009

The Philanthropy Wars

Full disclosure - as I noted when I opened this blog, I work for a non-profit.

A lot has been made about Obama's proposal to limit the tax deductions that rich people get when they are contributing to charity. Folks who study philanthropy at Indiana argued that the plan would reduce charitable giving by "several billion dollars" a year with the implication that this is a bad thing.

Of course folks in the philanthropic world are just like any other organized interest that receives a government granted tax advantage. I see them as no different than farmers who get checks to not plant crops. They are going to produce reports that defend their positions. And like farmers they produce a "good" but it's less tangible than soy beans.

Then yesterday this piece in the WSJ's Opinion section argues that some "activists" are interested in forcing non-profits into giving to specific causes regardless of donor intent. So if donors gave money to an organization with the explicit purpose of promoting Beanie Baby appreciation, the National Committee for Responsive Philanthropy would like to see 50% of that money going to lower income and other "marginalized" groups. So what's more important, donor intent or broad social goals that have nothing to do with original donor intent? It's been a big question in philanthropic circles for a while.

But there's a political side to this stuff that has been simmering for a while as well. For a number of years these folks have been going after certain foundations based on their ideology. Originally it just looked like they wanted it known that some foundations were right-wing. Now it seems they want to redefine who ought to be allow to called a "charity" and receive the tax benefits that accompany that title.

Non-profits, like limited liability corporations, exist because the state has carved out a unique tax situation for them. In theory governments do that because they deem the work and "goods" produced by philanthropic organizations to be both important in a free society and somehow underprovided by both the government and for-profit sector.

Of course the state has the right to wonder if giving broad tax breaks to foundations, some of which will promote Beanie Babies and other malaria eradication, is worth it. The key point is that the existence of foundations rests on the whims of the government - and governments change hands.

It now seems that the worm has turned. Folks within the administration and in society at large are wondering what constructive role philanthropy, that doesn't fit certain ideological criteria, can play. Or they're just plain hostile to what they see as the unfair advantages given to rich donors to promote public policies free from having to pay taxes. Or they may simply believe that, as is the case in Europe for example, government should step in and play a much larger role in providing the "goods" that non-profits previously produced because government can do a better job of providing those goods.

In some ways a thorough re-examination of what a non-profit is, what it's tax status should be, and what activities they can engage in is a useful enterprise. Foundations last year gave more than 42 billion dollars in grants. That's a really big number, and Europeans now think that foundations are nothing more than intermediaries to dodge taxes. If that's true, and no "good" is provided, than the state has a right to re-think the tax benefit it provides.

But that tax advantage shouldn't be used to skew public debate. For example, labor unions now support a wide range of liberal think tanks (which are all non-profits) that have emerged in the past ten years. These guys are a good example who receive about 30% of their funding from unions. As lobbying groups, they are now engaged in a fight with conservative groups over the future direction of American society.

It's pluralism, and I think it's a fair fight that should be based on the merit of the ideas. The notion that one side should somehow be prohibited from benefiting from the tax code because you don't like their ideas strikes me as pretty ridiculous. I mean conservative groups aren't denying the Holocaust or arguing for a flat earth. They have legitimate positions that deserve a fair hearing in the public sphere, just as the left's positions do. Any attempt to legislate those views out of the debate is not only contrary to the values of any free and liberal society, it's also doomed to fail because a lot of folks believe in those positions rightly or wrongly.

And finally, as this article from the Washington Post shows, even conservative, stodgy, old non-profit institutions like the Roman Catholic Church can adapt to changing times and different incentives. Try to put them out of business by changing the tax code, and they will simply pursue their goals in other ways that the "smart people" cannot possibly imagine.

Jim Cramer He Isn't

As I've said on a number of occasions here, I hate George Bush and blame him for a lot of our current problems, but today's flip piece in the NYT about comments from Obama about the stock market losses during an impromptu press event with Gordon Brown was either very poorly written or represents someone who doesn't get the pain people are going through.
The president did not offer any specific stock tips, but suggested that he believed the market might be close to its low point.

“Profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal,” Mr. Obama said, “if you’ve got a long-term perspective on it.”
That first sentence better have been a lame, inappropriate joke from the Times reporter or else he really messed up. And if it was a joke, I personally don't think it's particularly funny that folks have lost more than 10.4 TRILLION DOLLARS in wealth in less than 2 years.

The second point I'm sure comes without the slightest bit of self-interest as is the case with most politicians because although he denies that he looks at "day to day gyrations" it sure must be unpleasant to be looking at "day to day massive losses in potential tax revenue" for any politician. He better hope it's near its low point or else we may make Iceland's financial implosion look pretty good before too long.

What may be much more troubling for Obama is that when folks like Paul Krugman constantly invoke the Great Depression, this current crisis is different in two ways. First, it's not nearly as horrible in terms of lost value. Second, the long bear market from the Great Crash of 1929 till 1932 ended in the summer of 1932 when it was clear the country was going to get a new president. Instead this bear market seems to be getting much worse as the macro situation worsens (which is not his fault) and responses to his plans fall flat (which, much as the Dems want to deny it, is now his responsibility). Someone in a national media outlet is going to figure this out and wonder about the Audacity of Markets. How Obama responds then will be interesting to see.

Tuesday, March 3, 2009

Headache Inducing

The Czarina, as some of you know, is a philosopher. So I'd like to ask her what type of philosophical term is associated with the following stupid action:

1) You're in the middle of a major economic crisis that appears to have been caused, at least partially, by banks and government giving lots of credit to people who should not have had access to said credit.

2) You now propose a new plan to give those same unqualified people another 200 billion dollars (200,000,000,000) in credit for things like cars, boats, credit cards, monster trucks, and new RV's as a solution to the current problem.

I'm not sure what the philosophical term is, but I believe the plain old English phrase is Zimbabwenomics. Or maybe "are you fucking kidding me?"

Don't Get a Toothache in Fort Kent, Maine

The New York Times has an article about a shortage of dentists in Maine. It's weird because it reminds me very much of this hysterical little number they had last week about how instead of using Charmin we should all employ cardboard or reusable sponges in our restrooms. It made me want to check the quality of the TP in the Times public restrooms.

Like the toilet paper piece, it's not new. FoxNews covered the dentist shortage late last year for example. Also like the toilet paper piece it coincided with the announcement of an Obama initiative - health care reform.

Anyway the gist of the Maine dentist shortage piece appears to be that there aren't enough dentists, especially in rural areas. The author attributes this to the vague notion that "many young graduates do not want to work in rural areas." Now setting aside for a moment the fact that the author of this piece lives in Manhattan, which might bias her against the joys of rural life, that explanation seemed to me to be a bit vague.

So I actually did some RESEARCH (which I guess was left out of the history degree that Katie Zezima got at BU) because according to this little piece from an actual Maine newspaper the problem is very different. The reason dentists don't want to get a hobby farm and practice out in the middle of nowhere is that most folks in those areas get their dental work reimbursed by MaineCare which is state provided health insurance for poor people.

Now according to the advocates universal health care, programs like MaineCare are supposed to overcome the "market-based" problems that limit access to decent medical care for folks who don't have insurance in the middle of nowhere - and Maine has a lot of "nowhere" where kids are so bored they are popping Oxycotin and shooting up because there's nothing to do.

Anyway, why is there this shortage of dentists when MaineCare should be providing dentists to rural Maine? It terms out, market incentives are the problem, because despite the attraction of the annual moose hunts in rural Maine, dentists don't like getting paid 13 bucks to examine a kids mouth, which is all that MaineCare will pay.

So will Obama's universal healthcare create doctor and dentist shortages by "cutting costs?" Something to chew on for advocates of universal healthcare - or maybe gum on if things go like they do in rural Maine.

The Bloom is Coming Off of the Rose

I, without much sleep or coffee to confirm this bold judgment, declare today the first day I have seen an article like this one in which implicitly, President Obama gets criticized for his economic policy on the frontpage of a major, mainstream newspaper. It doesn't mention Obama or his administration explicitly, but it does point out that markets have tanked and said "tanking" reflects skepticism about whether governments are "doing enough."

Of course in my view, they are doing more than enough. But from a political perspective, seeing something like this at the top of the Washington Post webpage the day after the markets hit their lowest level in 12 years says something - and it's not exactly "Good Morning Mr. President!"

Monday, March 2, 2009

The Politics of Doing Nothing

Fundbaby was the big winner this past weekend - at least with my parents. We took the little bugger to visit Grandma J, Grandpa G, and Unkle Rorie and he pretty much never hit the ground. Of course when we got home last night he brazenly expected this situation to continue..........that was pretty inconvenient for us at 5 am this morning. But all in all it was a great time - until the discussion turned to politics.

My Dad and I have never agreed on much of anything politically - and it's gotten worse since the recession began. We could agree on how much we hated George Bush, but we've reacted pretty differently to just about everything Obama has done since he's been in office.

Maybe because my Dad does some work with a bank, he's not opposed to bailing out banks. Maybe because he has some stock in Citibank, he doesn't see any problems giving them money either. And perhaps some of the work he does with a parts supplier to GM has skewed his view of helping Detroit as well, or maybe it's his love of big American cars. Still one has to tread lightly about pointing out such conflicts of interest when someone is holding your son while you are sipping coffee and reading the morning paper.

When we did get around to arguing I felt pretty stupid all weekend because my canned response, that we let things work themselves out without massive spending programs, to all of his views about this blizzard of government action and activity sounded so hallow and callous. "We have to do something!" he'd declare, and if the first few things didn't work we'd try other things. Why didn't I want to help people in trouble with their mortgages? Rick Santelli was a get the idea.

Of course unlike many of the talking heads and academics spouting off about our current problems my Dad did live through the Great Depression and can remember bread lines and other such stuff. His family's business survived, but times were tough and the impact of the New Deal was pretty profound on him and his generation.

Setting aside the economics of the spending spree and all of the proposed bailouts, I have to say that politically those of us firmly planted in the skeptic camp about the morality, efficacy, efficiency, and wisdom of all this government largess look like country bumpkins arguing that we need to do less, not more.

When the levy is breaking, you don't sit around and watch the water rolling in and hope the levy will fix itself. When planes flip out of control pilots rarely cross their arms and wait for the aircraft to right itself. Patients who are sick want doctors to take action to help.

The problem is that those types of analogies just don't work when the system that's having problems is self-correcting, as markets often are, the "pain" from the problem is not evenly distributed, and most importantly POLITICIANS not engineers or doctors or pilots are the ones saving us. And let's not forget that economics is not as advanced as engineering or aerodynamics today. And in my view, economics looks a lot like medicine did in the 18th century when going to a doctor was likely to get you killed.

The economics of recession are bad, but they are not universally bad, and unless we are really sure about the effectiveness of a potential "cure" it sure doesn't hurt to look at the cost of the "cure." The equation gets scary bad when someone from Washington shows up to help. But even if politicians were not involved in politics, the really key issue is that I believe the "cure" might be way worse than the disease, more expensive in the long run and will definitely have all sorts of unintended effects than we cannot foresee.

But the politics of being principled and saying, "I'm skeptical that all of this government will make things better," is usually not popular and easily ridiculed during crises because no one gets elected by saying "Let's do nothing." Hence this column by Frank Rich on how Obama should "savior this moment" when some folks are pleading we do less rather than more. He savagely attacks folks like Bobby Jindal (in ways I doubt anyone on the right would be allowed to do to a person of color) and Mark Sanford for wanting to do less based on their long held principles that government doesn't help things.

By pointing out that both are from poorer states he managed to score points about how callous they look. When he describes both of them as outdated he seems to be saying how those policies of "getting government out of the way" have failed - miserably.

As I've regularly noted, Bush spent more than any president in U.S. history - until Obama, so it's not as if this crisis was preceded by limited government. We also have experienced an explosion of capitalism throughout the world that has benefited a lot of people in places like China and India - something the left likes to ignore.

If former communist regimes throughout Eastern Europe and Asia are sticking with relatively free markets, why are we running from those positions? Is it because capitalism failed or because the politics of an advanced democracy provide the opening for political entrepreneurs to dole out gifts to their allies and supporters at the expense of the rest of us, whether it Halliburton, or the SEIU?

I hope Obama and his people get this "cure" right, but I fear that all they are doing is making the patient sicker and granting gifts to their friends and allies. Either way those of us who are openly contemptuous of government in general are living in tough times when letting nature take its course is viewed with scorn.