Wednesday, March 05, 2008

There are no Obama posts below because they are all on my Obama blog

Ohio has itself to blame -- not NAFTA

There's no doubt times are tough in Ohio. The state has lost 200,000 manufacturing jobs since 2000, home foreclosures are soaring, and real family income is lower now than in 2000. Meanwhile, the Texas economy has boomed since 2004, with nearly twice the rate of new job creation as the rest of the nation.

Let's start with the fact that Texas's growth puts the lie to the myth that free trade costs American jobs. Anti-Nafta rhetoric doesn't play well in El Paso, San Antonio and Houston, which have become gateway cities for commerce with Latin America and have flourished since the North American Free Trade Agreement passed Congress in 1993. Mr. Obama's claim of one million lost jobs due to trade deals is laughable in Texas, the state most affected by Nafta. Texas has gained 36,000 manufacturing jobs since 2004 and has ranked as the nation's top exporting state for six years in a row. Its $168 billion of exports in 2007 translate into tens of thousands of jobs.

Ohio, Indiana and Michigan are losing auto jobs, but many of these "runaway plants" are not fleeing to China, Mexico or India. They've moved to more business-friendly U.S. states, including Texas. GM recently announced plans for a new plant to build hybrid cars. Guess where? Near Dallas. In 2006 the Lone Star State exported $5.5 billion of cars and trucks to Mexico and $2.4 billion worth to Canada....

Ohio's most crippling handicap may be that its politicians -- and thus its employers -- are still in the grip of such industrial unions as the United Auto Workers. Ohio is a "closed shop" state, which means workers can be forced to join a union whether they wish to or not. Many companies -- especially foreign-owned -- say they will not even consider such locations for new sites. States with "right to work" laws that make union organizing more difficult had twice the job growth of Ohio...

So tomorrow the eyes of America will be on these two states moving in different directions. Ohio has an economy burdened by high taxes and work rules that impose heavy costs on employers. Texas embraces free trade, keeps taxes low, doesn't impose unions on business and has tooled itself for 21st century global competition. Ohioans may not like to hear this, but for any company considering where to locate a new plant or move an existing one, the choice between Ohio and Texas isn't even a close call.

More here


The Fed: a watchdog that didn't bark

Rather reminiscent of another failure of the Fed -- in 1929. Fed incompetence caused banks to fail then and banks are taking heavy hits now. But the problem this time is likely to be transient. It's just bank shareholders and investors in funds who will suffer to some extent. I am one of those, I might add. I am $200,000 down at the moment. But it's only money -- JR

The principal cause for concern today is the paralysis of the credit markets. Credit is always key to the expansion of the economy. The collapse of confidence in credit markets is now preventing that necessary extension of credit. The decline of credit creation includes not only the banks but also the bond markets, hedge funds, insurance companies and mutual funds. Securitization, leveraged buyouts and credit insurance have also atrophied.

The collapse of the credit markets began last summer when the subprime mortgage crisis demonstrated that financial risk of all types had been greatly underpriced, that the market prices of complex financial assets overstated their true values, and that the credit scores provided by rating agencies are not to be trusted. Because market participants now lack confidence in asset prices, they are unwilling to buy existing assets, thus preventing current asset owners from providing credit to new borrowers.

The lack of confidence in asset prices also translates into a lack of confidence in the creditworthiness of other financial institutions, impeding the extension of credit to those institutions. And because financial institutions do not even have confidence in the value of their own capital and in the potential availability of liquidity, they are reluctant to make new lending commitments.

There is plenty of blame to go around for the current situation. The Federal Reserve bears much of the responsibility, because of its failure to provide the appropriate supervisory oversight for the major money center banks. The Fed's banking examiners have complete access to all of the financial transactions of the banks that they supervise, and should have the technical expertise to evaluate the risks that those banks are taking. Because these banks provide credit to the nonbank financial institutions, the Fed can also indirectly examine what those other institutions are doing.

The Fed's bank examinations are supposed to assess the adequacy of each bank's capital and the quality of its assets. The Fed declared that the banks had adequate capital because it gave far too little weight to their massive off balance-sheet positions -- the structured investment vehicles (SIVs), conduits and credit line obligations -- that the banks have now been forced to bring onto their balance sheets. Examiners also overstated the quality of banks' assets, failing to allow for the potential bursting of the house price bubble.




California exodus turns to stampede: "California, which once lured Americans from near and far, is now driving out millions of the most productive residents - including high percentages of the most affluent. "When California faced a Mount Everest-sized $14 billion deficit in 2003, one of the major causes for the red ink was the stampede of millionaire households from the state," says a report called "Rich States, Poor States" by economists Arthur Laffer and Stephen Moore. "Out of the 25,000 or so seven-figure-income families, more than 5,000 left in the early 2000s, and the loss of their tax payments accounted for about half the budget hole." And it's not just the rich leaving. Based on data from moving companies, California had the second-highest domestic population out-flow of any state in 2005, according to the report, "despite the beautiful weather, beaches, and mountains." The bad news for California is that it faces a $14 billion deficit this year, despite boasting one of the highest tax burdens in the nation."

John T. Flynn and the myth of FDR: "Albert Jay Nock, distinguished man of letters and philosophical anarchist, was an inspiration to thinkers as diverse as Murray Rothbard and Robert Nisbet, Frank Chodorov and Russell Kirk. A personal friend of the father of William F. Buckley, Jr., he was a kind of guru to the young Buckley as well. In April, 1945, Nock wrote a cheery letter to two of his friends, describing the death of Franklin Roosevelt as 'the biggest public improvement that America has experienced since the passage of the Bill of Rights,' and suggesting a celebration luncheon at Luchow's.... When Flynn came to write his major study of the four-term president, he aptly titled it The Roosevelt Myth."

The Iranian bomb exposed: "Last Monday, the chief United Nations nuclear inspector gathered ambassadors and experts from dozens of nations in a boardroom high above the Danube in Vienna and laid out a trove of evidence that he said raised new questions about whether Iran had tried to design an atom bomb. For more than two hours, representatives to the International Atomic Energy Agency were riveted by documents, sketches and even a video that appeared to have come from Iran’s own military laboratories. The inspector said they showed work “not consistent with any application other than the development of a nuclear weapon,” according to notes taken by diplomats."

There is a new lot of postings by Chris Brand just up -- on his usual vastly "incorrect" themes of race and IQ.


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"Why should the German be interested in the liberation of the Jew, if the Jew is not interested in the liberation of the German?... We recognize in Judaism, therefore, a general anti-social element of the present time... In the final analysis, the emancipation of the Jews is the emancipation of mankind from Judaism.... Indeed, in North America, the practical domination of Judaism over the Christian world has achieved as its unambiguous and normal expression that the preaching of the Gospel itself and the Christian ministry have become articles of trade... Money is the jealous god of Israel, in face of which no other god may exist". Who said that? Hitler? No. It was Karl Marx. See also here and here and here.

The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialistisch) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party".


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