Monday, January 25, 2010

Even the British Left think Obama is wrong about the banks

It's just an obvious stunt on Obama's part to distract attention from the meltdown of Obamacare. He's unlikely to get new laws through the Sanate anyway so it is just more of his usual hot air

Alistair Darling warns today that President Barack Obama’s proposals for shaking up the banks would not have prevented the crisis and risk undermining the international consensus on reforming the financial system.

In an interview with The Sunday Times, the chancellor made clear that he saw serious shortcomings in the American approach. “It is always difficult to say ex ante that you would never intervene to save a particular sort of bank,” he said. “In Lehman, for example, there wasn’t a single retail deposit, but the then American administration allowed it to go down and that brought the rest of the system down on the back of it.

“You could end up dividing institutions and making them separate legal entities but that isn’t the point. The point is the connectivity between them in relation to their financial transactions. “Equally, the large-small thing doesn’t run. Northern Rock was very small in global terms but systemically it was quite important when it got into trouble.”

The chancellor said Britain would continue to work with America on financial reform but that any proposals would have to be “workable and deliverable” and that he would not do anything to “disadvantage London relative to the rest of the world”.

Darling’s big worry is that Obama’s bombshell proposals, based on ideas set out last year by Paul Volcker, former chairman of the Federal Reserve Board, will shatter the consensus within the G20 nations on banking reform. “If everyone does their own thing it will achieve absolutely nothing. The banks are global — they are quite capable of organising themselves in such a way that if the regime is difficult in one country they will go to another one, and that doesn’t do anyone any good.”



Why Did the “Stimulus” Fail to Help the Economy?

Spending Money Does Nothing to Address the Economic Factors Causing a Recession

When Congress was debating President Obama’s proposed “stimulus” last year, two of the watchwords for the near-trillion-dollar boondoggle were “jobs” and “shovel-ready.” Now, given what comes out of Washington, one needs a shovel to clean up the muck, and I appreciate the politicians and the media telling us we needed to have our shovels ready.

Now that the numbers are in, however, it seems that money spent had no appreciable effect on lowering unemployment:
A federal spending surge of more than $20 billion for roads and bridges in President Barack Obama’s first stimulus has had no effect on local unemployment rates, raising questions about his argument for billions more to address an “urgent need to accelerate job growth.”

An Associated Press analysis of stimulus spending found that it didn’t matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.

Keynesians, not surprisingly, have an answer: The government did not spend enough. They reason that economic growth can occur only if “aggregate demand” is great enough to prevent an overall “glut” of unsold goods. (Like the mercantilists before them, Keynesians believe that recessions occur because businesses cannot sell all the goods they produce. Socialists similarly claim that workers are “unable to buy back the products” they make.)

Therefore if government is to prevent the recession-causing “glut,” it must spend whatever is necessary to cover any “shortfall” in private consumption and investment spending. Out of this “theory” we get the present “stimulus,” complete with the blessing of Ivy League economists (who seem to perform the role of the High Priests in today’s political economy).

Such a “theory,” however, is doomed to fail every time, and I wish to give some reasons why.
* Individuals are purposeful creatures, so their spending also will reflect their own purposeful behavior. (It is interesting that many people who endorse the “aggregate demand” terminology also decry what they see as “mindless consumption of the masses.”)

* The economy is not a blob into which one stirs in money the way one stirs in an ingredient into a cake. In other words, the economy does not have a “just add money” in a recipe. It is driven by people making purposeful decisions.

* An economy has a structure of production that when working well directs resources, labor, and capital toward those areas of production that reflect the desires and needs of consumers.

* When governments expand money through the central bank, the rush of new money distorts the production structure and changes the relative value of assets and factors of production. In the early stages of this government-inspired boom, the malinvested assets (the ones that become more valuable as a result of the artificial boom itself) expand relative to other assets.

* The credit-fed boom ultimately cannot be sustained, and it becomes painfully clear that malinvested assets (see the housing-real estate bubble) quickly lose their value relative to other assets. This is the beginning of the recession, which is a period in which the economy begins to reassert the “consumer-preferred” value of economic assets.

Attempts to “stimulate” the economy through massive government spending may put money into the pockets of politically connected people, but it does nothing to restore the economic factors to their proper balances. Instead, the “stimulus” only serves to further distort the economic fundamentals and prolong the downturn.

That’s right. The stimulus has not staved off a major depression; instead, it has ensured the greater likelihood of a major economic collapse by keeping the factors unbalanced and distorting the structure of production.

The fact that the “elite” economists ignore (or even mock) what is known as the Austrian Theory of the Business Cycle does not change the fact that it explains why the Keynesian “solutions” are making things worse. Government can no more end a recession by pouring new money into the economy than one can end a fire by pouring on gasoline. But it can burn down our economic house.



The TSA at work again

Why can't they empoy people with a few brains?

A college student returning to school after the winter break fell victim to a prank at Philadelphia's airport by a Transportation Security Administration worker who pretended to plant a plastic bag of white powder in her carryon luggage. The worker is no longer employed by the TSA after the incident this month, a spokeswoman said.

Rebecca Solomon, 22, a University of Michigan student, wrote in a column for her campus newspaper that she was having her bags screened on Jan. 5 before her flight to Detroit when the employee stopped her, reached into her laptop computer bag and pulled out the plastic bag, demanding to know where she had gotten the powder.

In the Jan. 10 column for The Michigan Daily, she recounted how she struggled to come up with an explanation, wondering if it was bomb-detonating material slipped in by a terrorist or drugs put there by a smuggler. "He let me stutter through an explanation for the longest minute of my life," Solomon wrote. "Tears streamed down my face as I pleaded with him to understand that I'd never seen this baggie before."

A short time later, she said, the worker smiled and said it was his. The worker "waved the baggie at me and told me he was kidding, that I should've seen the look on my face," she said.

Solomon said she asked to speak to a supervisor and filled out a complaint, and during that process was told that the man was training TSA workers to detect contraband. Two days later, she said, she was told he had been disciplined. "I had been terrified and disrespected by an airport employee," she said. "He'd joked about the least funny thing in air travel."



Taxpayers, Shareholders Should Be Furious Over Olbermann Comments

After MSNBC talking head Keith Olbermann predicted the downfall of democracy due to yesterday's U.S. Supreme Court easing restrictions on political speech, a policy expert at The National Center for Public Policy Research notes that taxpayers should be outraged. Not only is Olbermann calling for reduced freedom in America, but the company that employs him has been using its own influence to save itself at taxpayer expense, says National Center for Public Policy Research Free Enterprise Project director Tom Borelli.

The decision in Citizens United v. Federal Election Commission eases certain restrictions on the free speech of businesses, associations, organized labor and certain advocacy groups with regard to their participation in political campaigns. Olbermann suggested the decision in the Citizens United case would lead to corporations and wealthy citizens essentially buying lawmakers. MSNBC is currently owned by General Electric.

Borelli said: "To call increased political participation a threat to democracy is ludicrous. What seems to be the case is that Keith Olbermann wants to keep the playing field clear for his employer. "Taxpayers kept GE solvent by bailing out GE Capital - the company's financial arm. Yet the company now escapes Obama's assault against the banking industry. Additionally, GE's lobbying army - which has a $20 million annual budget - helped secure hundreds of millions of dollars for the company's utility customers from Obama's economic stimulus package, and the Waxman-Markey cap-and-trade bill that passed the House of Representatives would mandate the purchase of renewable energy products such as GE's wind turbines.

"Let's also not forget that taxpayer money was also used to prop up GE during the credit crisis. Shockingly, it's our money that was used to pay Keith Olbermann's salary.

Both shareholders and taxpayers should be outraged because GE CEO Jeff Immelt and Olbermann continue to use MSNBC to attack the American people in a failing effort to defend President Obama's left-wing policies. Ultimately, for them, this effort may be a marketplace failure. To wit, GE's NBC unit just today reported a 30 percent drop in profit. "Immelt and Olbermann may have secured favors from the Obama Administration, but they are just continuing to prop up a losing enterprise."




Obama: Campaign finance ruling 'devastating': "President Barack Obama says he can't imagine "anything more devastating to the public interest" than the Supreme Court's decision to ease limits on campaign spending by corporations and labor unions. He also suggested in his radio and Internet address Saturday that the ruling could jeopardize his domestic agenda. In the 5-4 decision Thursday, the high court threw out parts of a 63-year-old law that said companies and unions can be prohibited from using their own money to produce and run campaign ads that urge the election or defeat of particular candidates by name. "This ruling opens the floodgates for an unlimited amount of special interest money into our democracy," the president said."

Union membership in the private sector falls to an all time low: "Union membership in the private sector declined in 2009 to a record low of 7.2 percent, as a recession eroded employment in labor-organized industries such as construction and manufacturing, a U.S. report showed. The figure compares with 7.6 percent in 2008, according to data released today by the Labor Department. Union membership made up 12.3 percent of the total workforce, down from 12.4 percent in 2008. It increased among government workers to 37.4 percent from 36.8 percent."

Socialism and death in Haiti: "As President Obama and his cohorts struggle over what to do now with their socialist health-care plan in response to the Democratic defeat in Massachusetts, now would be a good time to point out one of the biggest reasons for the enormous death toll in Haiti — socialism. Yes, I am referring to the economic philosophy of American liberals — the people who purport to love the poor but whose economic policies condemn the poor to destitution and even death.”

SarBox might be coming to an end: "Prospects for substantial relief from or repeal of one of the most burdensome corporate regulations in recent memory have suddenly grown in Congress and in a constitutional challenge before the U.S. Supreme Court. The regulation is known as the Sarbanes-Oxley Act of 2002, or SarbOx. Rushed through Congress and signed by President Bush in the wake of the Enron and WorldCom scandals in 2002, the law has quadrupled the costs of the audit process for public companies and achieved little in preventing fraud.”

Church of England congregations fall again, and half are retired people: "The Church of England has been hit by a new slump in its congregations, with the latest figures showing its fifth year-on-year decline. Also, the Church’s first analysis of its worshippers showed that nearly half are pensioners. The established Church has lost more than 40,000 worshippers since 2003, shortly after Dr Rowan Williams became Archbishop of Canterbury in December 2002. Average weekly attendance fell from 1.187 million in 2003 to 1.145 million in 2008. In spite of a rise in the number of children and young people at services, the average age of a member of a Church of England congregation is 61, according to statistics published yesterday. The figures also show a slight acceleration in the rate of decline in the past 12 months, indicating that there may be even worse news in years to come... Just under 3 per cent of the population, or 1.7 million people, go to a Church of England service at least once a month. The average Sunday attendance is down to 960,000, with the worst Sunday showing 611,000 adults in a Church of England service that week." [Not mentioned is that the more fundamentalist congregations remain strong]

Britain to cut public employee pay? "Alistair Darling, the chancellor, today warns public sector workers they need to follow the example of the private sector and accept wage cuts if they want to hang on to their jobs. Signalling an assault on public sector pay and bonuses, starting with the highest-paid employees, Darling said it was time for a change of culture. “What is being paid has sometimes lost the relationship it ought to have with what someone actually does. Once that happens, it’s not only unfair, it’s actually grossly inefficient,” he said in an interview with The Sunday Times. He cited the example of private sector firms, two-thirds of which are planning wage freezes or cuts this year as an alternative to redundancies. “There’s a lot of evidence that people in the private sector have taken pay cuts and held on to their jobs,” he said. He is drawing up plans to slash remuneration for some posts and end the routine awarding of extra “performance” payments. It follows an outcry over bonuses in Whitehall and among council and quango staff". [We'll believe it when we see it]

Obama's "gap" increases: "The Rasmussen Reports daily Presidential Tracking Poll for Saturday shows that 24% of the nation's voters Strongly Approve of the way that Barack Obama is performing his role as President. Forty-three percent (43%) Strongly Disapprove giving Obama a Presidential Approval Index rating of -19. These figures come from nightly telephone surveys and are reported on a three-day rolling average basis. Today’s update is the first based entirely upon interviews following Tuesday’s election in Massachusetts and the Approval Index has fallen eight points since Tuesday morning.... Sixty-one percent (61%) of voters nationwide now say Congress should drop health care and focus on the economy."


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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" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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