Wednesday, December 29, 2010
Friday, December 17, 2010
There are consequences when the United States gives China a trillion or so dollars in net trade: the Chinese use that money to capture new world markets and push others out. One example is the wind energy industry. Just a few years ago the United States and some European firms were poised to explosively grow their wind energy markets in the U.S. and China (one remembers Tom Friedman's column on alternative energy being the growth industry for America). Cheap loans and land leases to domestic startup companies, provided by the Chinese government, along with onerous local content requirements on foreign firms have allowed the Chinese to build a world-competitive wind industry on the backs of GE and others. Now the Chinese are moving to capture the U.S. and European wind markets. Our government and our normally rabid anti-free trade unions have hemmed and hawed in creating an effective response to ersatz free trade as practiced by the Chinese.
Saturday, December 11, 2010
Sunday, December 05, 2010
11:1 A shoot shall come out from the stump of Jesse, and a branch shall grow out of his roots.
11:2 The spirit of the LORD shall rest on him, the spirit of wisdom and understanding, the spirit of counsel and might, the spirit of knowledge and the fear of the LORD.
(The picture is of a Bavarian ivory panel, circa 1200, depicting the Tree of Jesse. Image courtesy of the Divinity Library at Vanderbilt University.)
Tuesday, November 30, 2010
For decades Christians have been hectored regarding tolerance for other religious beliefs or atheism. We wonder whether the self-proclaimed foes of Christianity and its traditional Catholic or Protestant expressions even understand its essence: the reconciliation of Man with God, Man's salvation through Him, and the spiritual transformation of Man by God. This Christian claims no more than epsilon of such understanding, but enough he believes to assert that no human power can bring people to God, but God himself provides this force (through the Holy Spirit). Christians can only bear witness to others of God's grace. Christians can best provide this witness through humble, pious and compassionate living. Tolerance for the religious beliefs of others is axiomatic to Christian life. (Perhaps some would accuse this Christian of advocating a "post-evangelical" life in the world; we think of it more as a "neo-evangelical" life.)
So it is too, during Advent that Christians rejoice at the coming of our Savior, and wish to express our joy of His coming to the world. What others make of this remembrance is for them to decide - Christians should, we believe, understand and accept this for the aforementioned reasons. All that this Christian would humbly ask is that the world not persecute us nor try to humiliate and shame us for our enthusiasm for Advent. In return we present Christmas to the world as a recess from the jungle of everyday living, a respite to provide a time for kindness and civility and love between people.
The poster shown above is a billboard now displayed near a busy thoroughfare an approach to New York City. It ridicules Christians for their beliefs. The spokesman for American Atheists recently stated, “this year, we decided to give the religious right a taste of what war on Christmas looks like.”
We do not understand how this billboard is an attack that is particular to "the religious right" - it appears to be a snide attack on Christians that is completely indiscriminate toward either the Christian "left" or "right". The American Atheists appear to claim that whatever a Christian's political stripes, they are unreasoning boobs for their allegiance to a myth.
So who is the party that really needs to demonstrate tolerance in religious beliefs?
Thursday, November 25, 2010
This correspondent derives great joy in making the Thanksgiving Feast for loved ones. In particular we like to find recipes that pay tribute to the traditional board, but with a twist:
- Beer-Brined Apple-Smoked Turkey
- Wild Rice with Turkey Stock and Raisins
- Braised Spinach with Bacon and Onion
- Cranberry-Orange Relish
- Blackberry Pie
And a nap (completely traditional).
From Nathaniel Morton's journal of the Plymouth Colony:
...Being now passed the vast ocean, and a sea of troubles before them in expectations, they had now no friends to welcome them, no inns to entertain or refresh them, no houses, or much less towns, to repair unto to seek for succour; and for the season it was winter, and they that know the winters of the country know them to be sharp and violent, subject to cruel and fierce storms, dangerous to travel to known places, much more to search unknown coasts. Besides, what could they see but a hideous and desolate wilderness, full of wilde beasts and wilde men? and what multitudes of them there were, they then knew not: for which way soever they turned their eye (save upward to Heaven) they could have but little solace or content in respect of any outward object; for summer being ended, all things stand in appearance with a weatherbeaten face, and the whole country, full of woods and thickets, represented a wild and savage hew.
If they looked behind them, there was a mighty ocean which they had passed, and was now as a main bar or gulph to separate them from all the civil parts of the world.
Tuesday, November 16, 2010
Presumptive Senator-reelect Lisa
A list of these projects, all $80M of them for 2010, are listed here. Note that many of these are defense projects. The DoD normally specifies (earmark) all of the spending in their budget, so these projects presumably are those that Senator M. added as being, in her judgement, critical to the mission of our armed forces.
Oklahoma Senator James Inhofe (R), and Mississippi's Thad Cochran (R, and Earmark Champion) have also vowed to nip the ears of Porky, too.
(Visual: John Q. Public, wearing a five-dollar suit and straw boater, holding a deed to the Brooklyn Bridge. Caption: "You mean they lied to me?")
Sunday, November 14, 2010
Wednesday, October 27, 2010
With the brouhaha over NPR's sacking of Juan Williams, we thought it might be worth calling the question: Is National Public Radio really public radio? Our thoughts on this consideration, from an earlier post, can be found here.
Sunday, October 24, 2010
The Center for Responsive Politics has tabulated the spending by independent organizations (i.e., not the political parties). Here are the totals:
- US Chamber of Commerce - $75.0M
- "American Crossroads" (Rovian Cabal) - $65.0M
- AFSCME - $87.5M
- SEIU - $44.0M
- NEA - $40.0M
Friday, October 22, 2010
The Dry Rot at NPR Breaks Through.
Willie Geist and Mike Barnacle speak out about NPR's firing of Juan Williams.
For the record, here is the Google search tagline for Juan's NPR page, now removed:
Juan Williams, one of America's leading journalists, is a news analyst with NPR News. He also works on documentaries and participates in NPR's efforts to ...
Well, at least they used to think he was a leading journalist.
Saturday, October 16, 2010
For the second consecutive year, Social Security payments will not increase. Federal rules require that COLA increases occur when the Consumer Price Index is higher than the previous year. However, when the CPI is constant or falls, SSI payments are fixed at the previous year's level' and increases do not resume until the CPI exceeds that level.
Until 2009 this prudent rule for Social Security had resulted a string of unbroken payment increases: the average SSI COLA from 2000 through 2009 has been 2.8%, while the CPI has increased on average by 2.6% over the same period. And everyone, particularly the AARP, was quite happy.
Then in the first full year of the Great Comeuppance the CPI fell, and SSI payments were frozen. Uncle Sugar Daddy has broken the bad news that 2010's CPI also fell 0.6% below the 2008 level, so that next year's SSI payments will remain unchanged. Now all Hell has broken loose in The Dismal Swamp.
The White House and Democrats want to ignore the COLA rule, and toss an extra $250 toward each senior, if not to buy their love, then at least to secure their vote. That's an additional $14B on the fiscal bonfire. But that's our kids' problem, right?
Thursday, October 14, 2010
N. Gregory Mankiw, Harvard professor of economics and confessed fat-cat, runs through the math of the proposed tax hikes, and finds that, combined with current tax rates, it will effectively zero out all growth in his next dollar.
Monday, October 11, 2010
Thursday, September 30, 2010
Two nuggets in the news that add to the increasing pile of evidence that we are doomed:
- A UAW chapter has nixed a deal to sell an Indianapolis parts plant that would have kept its doors open, albeit with lower wages and benefits. The opponents' rationale was that when the plant closes, many of the union workers will be able to transfer to other plants, keeping their current higher rates of pay. The unlucky workers at the plant who cannot transfer, all of the support workers at the Indy plant, and local merchants are, of course, left holding the bag.
- It seems that majority taxpayer-owned General Motors has made over $90K in contributions to congressional campaigns, including those of Democrats John Dingell, Debbie Stabenow, and Republican Eric Cantor. To say that this reeks of "moral hazard" is to be polite.
Monday, September 27, 2010
An often-encountered TV commercial: offers for senior mobility scooters with where Medicare picks up the cost...
Scooters for seniors are a good thing, as is any medical technology or treatment that helps people lead more comfortable and productive lives. As health care becomes more entwined with politics, one can forsee the pressure for Medicare and Medicaid to pick up the tab for many, many good things like scooters. Ultimately someone must pay for all of these good things.
Democrats will stick to the issues for the rest of the campaign, the NYT reports. Critical issues like their opponents' divorces, drinking, bankruptcies, philandery, lawsuits, kids' bad grades, and fashion sense.
Sunday, September 26, 2010
Friday, September 24, 2010
Four years ago, our TV was bombarded by ads for Jumbo home loans, teaser-rate home loans, no-interest home loans, etc. Now we see many ads for companies that will help you "walk away from your mortgage, scott-free". God, what hath we wrought?
Tucked in the deep recesses of the Obamacare Law is this mind-blowing tax-reporting provision (as reported by the Paper of Record):
...To improve compliance, the new health care law requires businesses to file tax forms known as 1099s identifying anyone to whom they pay $600 or more for goods or merchandise in a year.
Businesses will also have to send copies of the form to their vendors, suppliers and contractors. The forms are already widely used to report various kinds of payments of taxable income other than wages, like interest income or dividends. But the health care law requires filing the forms in many more instances than they were typically used before.
The premise of the requirement was that businesses would be more likely to pay taxes on their income if they knew that the income was already being reported to the Internal Revenue Service by their business partners...
The claim is that whopping $17B in additional revenue may be recovered over the next ten years. Of course, the cost to businesses - particularly small businesses - is not considered. Former GE CEO Jack Welch made the following observation: a independent truck driver who hauls cross-country loads will have to issue 1099s to dozens of truck stops, simply for fueling-up his rig, or face the wrath of the IRS.
This madness must end.
Tuesday, September 21, 2010
Another telling moment at the President's CNBC Wall Street Town Hall: during an exchange about taxes on the Ultrarich, the President suggested that it was only reasonable that a Big Wheel should pay taxes on his dividend income at a rate closer to the higher rate that his secretary pays on her wages. Perhaps the President forgot that taxes were paid on those dividends before their distribution, as income to the company. Also, the Big Wheel is not getting a guaranteed return in exchange for his labor, but the secretary is. The Wheel is also risking a loss on his capital investment, but that is another tax policy argument. Perhaps the President forgot these facts. Then again, perhaps he didn't know them - unlikely - or maybe his ideology guides him otherwise.
Monday, September 20, 2010
Wonderland Comes to the Street.
On CNBC the Lecturer in Chief expounded on the economy, blaming others (GOP, Bush, the Ultrarich) for all problems, and generally how those who disagree with him are just so wrong. Lots of Obamites in the town hall crowd, and one could swear there was an APPLAUSE sign over them.
Outrage of the event: the President claimed that government is less intrusive than it was thirty years ago. Make sure to pick up your jaw before leaving the room.
Monday, September 13, 2010
From CNBC: Senator Carl Levin will attend A123 Systems' opening of its new car battery plant today in Livonia, Michigan. It will provide 3000 jobs...provided by $2.4B of Federal Stimulus Ham. That's a paltry $800K per job. Observers of the electric car business note that there may already exist a substantial surplus in electric car battery production in the U.S. Levin's answer: more Federal Ham to pay folks to buy electric cars. The Chevy Volt will start at a list price $40K. Will Uncle Sam throw in $10K of that to make them competitive with comparable vehicles with conventional power plants?
Saturday, September 11, 2010
Monday, September 06, 2010
Tony Blair Stands Firm.
Former British Prime Minister was goaded by Christiane Amanpour to concede that intervening in Iraq was a mistake, and he would have nothing to do with it. Ms. Amanpour's frustration in clearly evident in the video as Mr. Blair strays from "the narrative".
Sunday, August 08, 2010
This lay-historian continues to be (naively) baffled that when a society passes a "major historical juncture", that the occurrence of this event is not considered obvious. This is setting aside any consideration as to what course needs to be set to navigate beyond this point.
We believe that a clear - and simple - declaration of such a historical juncture that Western Civilization has recently passed is David Hart's reflection of our world in that of Rome's emperor, Julian.
Thursday, August 05, 2010
Wednesday, August 04, 2010
The American Spectator reviews Mortal Follies: Episcopalians and the Crisis of Mainline Christianity, by William Murchison. He chronicles the decline of this historically critical Protestant denomination, correlated with its "rejection of orthodoxy in favor of cultural and political fads, regardless of the spiritual consequences".
The Evangelical Lutheran Church in America (ELCA) is now following a similar path. One hopes one will chronicle that tragedy as well.
Wednesday, July 14, 2010
Thursday, July 08, 2010
NASA Administrator Charles Bolden, a decent and brave man, shared the President's primary goal he envisions for NASA: reaching out to the Muslim world, so that they can feel good about their contributions to math and science. We are not making this up. In contrast, let us remember this moment shown below, that occured nearly fifty years ago:
President Obama's vision for NASA is pathetic. To see a preview of this diminished role for the U.S. in space, see Deputy Administrator Lori Garvin's webcast with Space News earlier this year.
Sunday, July 04, 2010
Tuesday, June 22, 2010
Should a capable general be fired over a "they said that he said" article in Rolling Stone? The latest report is that the general will arrive at the White House with resignation letter in hand.
Perhaps General McChrystal has been asking the President to answer the Four Essential Questions of Strategy, as stated by Thomas Ricks, author of Fiasco:
- Who are we?
- What are we ultimately trying to accomplish?
- How will we do it?
- What resources and means will we employ in doing it?
Do we have clear answers to these questions regarding Afghanistan?
Thursday, June 17, 2010
Tony Hayward, CEO of BP, is not an Oil Man. His pedigree is finance, serving in the corporation's Mergers and Acquisitions department for the majority of tenure at BP. In today's testimony to Congers, it was very clear that Hayward was not there to answer questions specific to his expertise, but was summoned so that Congresscritters could look good to the "little people" by ranting at him. Not that they understood the significance or triviality most of the technical questions they threw at him. If we were offered a seat along side the Critters, we would have asked the following questions:
- When you became CEO of BP and directed a "laser-like focus" on improving safety, at that time were you made aware of any drilling, production, refining, or petroleum transportation activity that was operating with unacceptable bounds of safety, regardless of whether they met federal oversight requirements? For example, were you told that the overall approach to drilling procedures could allow operations with an amplified risk of failure or accident? Were there operations that you unilaterally halted because of safety concerns?
- As CEO you receives safety briefings that were at the highest level, with little technical detail for evaluation. Basically, you are given "red light - green light" status reports of safety initiatives. Who in the BP organization does have the responsibility to evaluate the technical criteria to assess whether BP operations were improving in safety? What reports were you getting from these personnel about the state of drilling safety?
- What conditions did you place on your subcontractors, Transocean and Haliburton, in decision-making for safe practices on the rig? Did either have veto power over procedures directed by BP personnel?
- What are the experience requirements for BP rig managers? Does a single BP manager have authority for rig operations?
- What direction or guidance were you given by MMS as part of your improved safety initiatives? Did you solicit input from MMS for this? If so, what was their response?
These hearings can be quite valuable in determining the structure of risk manangement and decision making for operations of BP and the other producers in the Gulf, and the interaction of MMS. Or they can be useless theater.
Sunday, June 13, 2010
Nansen Saleri, former head of reservoir management for Saudi Aramco, provides a non-hysterical, apolitical, and sober analysis of oilshore oil drilling in the shadow of the Deepwater Horizon accident. His claim is that the principal failure that lead to the catastrophe was that of effective risk management. Saleri also reminds us that shutting down offshore drilling may actually increase the risk of another oil spill from much more vulnerable oil tankers.
Thursday, June 03, 2010
Michigan's Junior Senator, Debbie Stabenow continues to embarass her state. We are not inclined to ad hominem attacks on congresscritters. But we'll suspend our restraint for this one, extraordinary moment: Debbie Stabenow is a Chucklehead. She believes that the power, dignity, and solemn gravity of her office should be used to call for the Commissioner of Baseball to overrule the umpire who denied a Tiger pitcher a perfect game:
MACKINAC (ISLAND) (sic)– U.S. Senator Debbie Stabenow (D-MI) today made the following statement urging Major League Baseball Commissioner Bud Selig to invoke the “Best Interests of the Game” clause to declare Armando Galarraga’s performance perfect.
“Last night’s performance deserves its place in the record books. It is clear that Commissioner Selig should make an exception in this case and invoke the ‘best interests of the game clause’ to reflect Armando Galarraga’s perfect game for the Detroit Tigers.” – U.S. Senator Debbie Stabenow.
Will some human, animal, vegetable or mineral, take up votes and by opposing this twit, end her Senatorial career? Please?
Wednesday, June 02, 2010
The "Competence" Theme Snowballs.
Tom Coburn's appearance on a recent Morning Joe says it all. But if you need additional ammunition, read Peggy Noonan's recent WSJ column. But to be fair, this is problem is beyond Mr. Obama or any president. It's a loss of vision by our leadership - and the electorate - of what constitutes conscientious stewardship of our Republic.
Sunday, May 30, 2010
Louisiana Governor Bobby Jindal was interviewed by ABC News' Jake Tapper about the strange laxidasical behavior by the United States Government regarding the protection of his state's coastal wetlands. Aha! thought Jake, doesn't this contradict his conservative view of limited government? Jindal replied:
“When government grows too big, it doesn't do its core functions properly. Absolutely, I believe in a limited government that is effective and competent in what it does. We need federal government exactly -- we need our federal government exactly for this kind of crisis.”
George Will has also jumped on this theme: asserting that a massive central government that intervenes in all aspects of the nation's life will, by corollary, be competent at the essential functions that are truly of national interest is false. Advocacy for a limited federal government is not simple ideology of Washington "doing nothing". There are roles - such as national defense or the coordination to mitigate an interstate enviromental disaster - that are appropriate for a federal government. Then there is most of the rest of what Washington believes is good value for your tax dollars.
Look for the theme of "limited and competent government" to grow in the public conversation.
Tuesday, May 25, 2010
Is Big Oil Undermining US Security?
Larry Kudlow has been dogging oil giants Shell, BP, and Total about selling the Pentagon refined petroleum with one hand while paying Iran for the crude with the other. That's money that goes to kill Americans in Afghanistan and build nuclear weapons.
Remember the bill to extend unemployment insurance for which Senator Jim Bunning had the cruelty to ask "who pays for it"? Well, get ready for another "emergency" job stimulus and tax loophole closing (tax and spend for short) bill coming from Congers. Pay as you go? Come on, that is soooo two months ago!
We are heading for a tipping point in cynicism of the people towards their government.
Thursday, May 20, 2010
Like Milton in Office Space, Utah Senator Robert Bennett just can't accept that he is being let go. The Nattering Nabobs are mourning Bennett's loss: how could the rabble* turn out such a marvelous patrician and "cut short" a stellar political career?
Because if we accept a Ruling Class, as many in the Beltway do, we are doomed. It's not a lifetime appointment; you serve at the pleasure of the people and the support of your party. Bennett, from what we can discern, has been a fine public servant. But there is a time for all things, and if he has thrived courtesy of the Utah GOP, then may wilt by them as well. Bob, make sure to take your fern on the way out, and tell Arlen Specter he has thirty minutes to collect his stuff. If you choose to run as an independent, you are free to do so. You may want to consult with Joe Lieberman.
*A gushing fan of Adlai Stevenson confessed to him, "Mr. Stevenson, all of the thinking people of America are voting for you!". "Madam", replied Stevenson, "that is not sufficient...I need a majority".
Spain announced austerity measures, including a 5% cut in the pay of civil servants. You know, those guys that don't create wealth, just consume it? The Spanish workers, convinced that the government is hiding the unicorns in secret warehouses, have called for a national strike on June 8. Meanwhile there are plenty of free-lance unicorn hunters among the 20% of Spaniards who are currently unemployed.
Like Scrooge and his Third Shadow, we are seeing images of things that could come to pass.
Thursday, May 06, 2010
Sunday, May 02, 2010
George Will has his hands full on ABC's This Week, facing such scintillating intellects as Bill Maher, Al Sharpton, and Katrina Vanderfloogle, as he argues for enforcement current federal law. What magical ordinances will "comprehensive immigration reform" possess such that it will not be necessary to confront people, with reasonable cause, to determine if they are registered legal aliens? It is a pig in a poke, and the Left knows it.
Monday, April 26, 2010
Wednesday, April 14, 2010
Saturday, March 27, 2010
Partly. Frum has criticized the GOP for adopting a Nyet! strategy on healthcare, supposedly fomented by the Radio Talkosphere. Frum noted that the version of Obamacare that was signed is very similar to Massachussetts' Romneycare, so the GOP was a trifle hypocritical in their opposition.
Frum is right to claim that a Nyet! strategy was wrong, but it wasn't wrong for Obamacare. That mess will end up at least as bad as Romneycare, where costs are skyrocketing. But the GOP did fail to understand after the 2004 election that the healthcare problem was a nasty boil that would be quickly coming to a head (yuck, sorry about that). Republicans could have moved a free-market, small government-oriented package of solutions in 2005 (something like the McCain plan of 2008) that would have forced the Dem's hand and preempted the crypto-socialist "solution" that we are now stuck with.
Why was this approach not pursued? Perhaps it was because the GOP believed, as Democrats would have hoped, that such a proposal would have been transmogrified into the Middle-Class Black-Tar Heroin of a massive government entitlement. But the risk should have been taken; at least Republicans would have controlled the process. Ultimately one should ask those visionary ex-leaders of the former GOP House majority, Tom Delay and Dennis Hastert, and George Bush, father of the disasterously underfunded Medicare drug program.
Congresscritter Henry Waxman, enraged that Catepillar, John Deere, AT&T and other corporations have restated lower earnings to reflect higher immediate costs from Obamacare, will be holding an Inquisition to personally berate them for their impertinent honesty.
Tuesday, March 23, 2010
MSNBC's Rachel Maddow gleefully laid out the rain of goodies to be expected from Obamacare. As a public service we provide some commentary and include some of the other events that will occur during the first few years of the rollout (points marked with * indicate reforms that are commonly accepted as part of less intrusive solutions):
- Tax credits for small businesses to provide health care for their employees*. May not be sufficient to compensate for increased rates (see below).
- Kids can stay on their parents' plan until age 26; if the increment in rates is not onerous, this could improve the financials.*
- More money for seniors' drugs by plundering Medicare Advantage.
- High-risk pools established.* May or may not raise rates.
- Ban on "previous condition" denials for kids*. This is likely to raise rates.
- Health Savings Accounts gutted; maximum HSA deduction reduced by 60%
- Pro-abortion advocates likely to overturn "Stupak's Order".
- Patching the Medicare provider payment reductions eats all of this year's "savings" and them some.
- The new enormous federal healthcare bureaucracy begins to be assembled, to join all of the other federal government healthcare bureaucracies (Medicare, Medicaid, VA, Military, SCHIP, Indian Health, to name a few).
- The IRS begins hiring its required additional 16,000 agents.
- Pork deals to garner Congresscritters' votes explode like fiscal grenades throughout the year.
- Student loan program converted in government monopoly, except in North Dakota. On the surface, it seems that this has nothing to do with health care. However, it is expected that the profit made on these loans, generated from the interest rate difference between borrowing and loaning, will be part of the advertised "health care savings".
- Long-term care insurance program established; minimum 5 years of premiums required, but who is going to say no to Grandma?
- Free preventative care for Medicare recipients. Likely to raise rates.
- Annual $2.5B "Pay to Play" charges to drug makers begins.
- Insurance companies must pay out 80-85% of premiums in health care expenses, or must refund difference to policy holders. Most health insurance companies have profit margins at or under 5%, so increased overhead costs to implement new federal rules and mandates are likely to lead to losses in intial years. The federal government's profit ceilings on insurance companies begins their transformation into utility companies.
- Excise tax on medical devices begins.
- New Medicare taxes on the "Super-Rich" (couples with incomes greater than $250K)
- New tax on dividends and interest income.
- Pilot programs to test "bundled care" Medicare payment programs.
Thursday, March 18, 2010
Wednesday, March 03, 2010
Today the President gave yet another speech on healthcare, supposedly to announce inclusion of ideas championed by GOP Healthcarewonks into the "process". But, ahem...nothing in the present process has changed: the two chambers of Congress have only their respective bills to negotiate, which are the same as they were when they were passed. Today's exercise by the President is akin to ad men trumpeting that a sink cleanser now has green disinfecting power, hoping that consumers forgot that it had always been green.
Saturday, February 20, 2010
Any proposal to "privatize" a portion of the Social Security program is met with pitchforks and torches from the Left. They kvetch about gambling with the old folks' money in the stock market. However, they feel it is perfectly reasonable to lure savers and investors into the promise of a "guaranteed annuity" from the Gummint in exchange for taking their IRAs and 401(k) accounts to plug the federal debt, or to purchase annuities from that bastion of financial strategery, AIG. Newt Gingrich and Peter Ferrara consider where this may lead.
Friday, February 19, 2010
Just a point of reference for understanding what is reasonable in the discussing Social Security reform: under the present system, consider a person enters the workforce at 25, with a starting yearly income of $20K, an annual raise of 5% (inflation + merit), and an employee+employer deduction for Social Security of 12.4%, using the current cap of $106,800. Upon retirement at 65 the citizen will have a personal savings of about $290K. The retiree living to 85 will then have a monthly income from this savings of about $1210.
Now, allow this stagnant savings be partially invested (like the federal employee program) such that it results in an annual return of just 2%. The personal savings after forty years will be $390K, for a monthly income (assuming no additional growth) of $1625, more than 30% higher than the stagnant system. Assuming a 1% return on the savings will result in a personal savings of $335K. Of course, these calculations assume that the government didn't spend the money on something else, i.e., they didn't steal it.
The Rant Heard 'Round the World.
February 19, 2009: the day we finally said: NO! It's not about birth certificates, secret socialist plans, or all that other nonsense. It is about preserving the greatest economy in history by insisting on responsibility by individuals, corporations, and the government. The true message is not partisan, it's about accepting some very bitter medicine: serious and painful reform on all government spending, entitlements and otherwise, living with one's means, and allowing the market to reckon with foolishness.
Sunday, February 07, 2010
The Gummint will be closed tomorrow because of "The Big Snowjob" (not to be confused with "The Budget Freeze", but the latter does possess qualities of the former). Perhaps Mother Nature can do what the Congresscritters can't: restrain the growth and spending of the federal government.
Walking with Brahms.
The University of Michigan's Music faculty perform recitals regularly; this afternoon featured Brahms's Piano Quartet in A Major, Opus 26 (1862). The opening, Allegro non troppo, carries one away to wet, windswept ridge (well, that's where it carried us). Here is part of the opening, as performed by Sviatoslav Richter and the Borodin Quartet.
Tuesday, February 02, 2010
Except for David Rosenberg, as reprinted by one of the best financial websites in the world, Minyanville:
The current level of US outstanding nonfederal debt is $27 trillion, which is astounding both in absolute terms and even more so relative to nonfederal GDP -- a 206% ratio. It is down fractionally from the 208% peak, but here is the rub. If mean-reversion means that we get back to some norm of the 1990s, then we are talking about the need to extinguish $8 trillion of nonfederal debt. The only question is how this happens, not if. If we’re talking about mean reverting to the very stable trend of the 1960s and 1970s, then the credit contraction is very likely to exceed $11 trillion.
How do you extinguish debt? Well, most households do so by deferring new purchasing in favor of paying off previous purchasing. Credit will continue to be tight, regardless of government machinations to make it otherwise. Therefore, we're not expecting the consumer to stampede the stores anytime soon. This is going to be a long, painful recovery, but it was a heck of spree that got us to this point.
Wednesday, January 27, 2010
Bill Gates has pooh-poohed concerns about internet censorship in Red China (yes, we still think that way), undercutting Secretary of State Clinton calls for greater freedom of expression there and Google's claims that Red Chinese operatives have conducted cyber espionage against its employees. Gates claimed that internet censorship in Red China is "limited", comparable to internet restrictions that exist in other countries, and easy to bypass. "[And] so you've got to decide: Do you want to obey the laws of the countries you're in, or not?" said Mr. Gates. Yes, Mr. Gates you certainly have asked the right question. Alas, throw another industrialist on the Totalitarian Collaborator Pile.
Tuesday, January 26, 2010
The Financial Times reports that hackers are targeting friends of Google workers, compromising their social networking accounts to lure the Google personnel into clicking on their spyware links.
The source of these attacks? From the article: "the evidence pointed to a government-sponsored effort that only large spy agencies or perhaps some of the most advanced big companies could have withstood, experts said. China on Monday described accusations it was behind cyberattacks as 'groundless'."
It is our opinion that China is engaged in economic warfare through a massive effort to steal proprietary information, and refusing to adhere to world-accepted agreements on intellectual property and trade (note the recent steel dumping episode). Our dependence on their "beneficience" in buying our debt cripples our ability to retaliate in force.
Saturday, January 16, 2010
Larry Kudlow asserts that the "Bank Tax" is just blatant crony capitalism. We agree:
Obama Rewards Losers, Punishes Winners by Larry Kudlow on National Review Online
Friday, January 15, 2010
Electric cars are being offered as die Wunderlösung to solve our transportation system's dependence on petroleum. But what would the wide-scale adoption of electric vehicles require in terms of increased electricity production?
We will take as a representative electric vehicle the Chevy Volt. The Volt is expected to operate such that it will consume 8 kW-hr to provide 40 miles of driving (which is a reasonable assumption for a day's mileage of a passenger car). The total distance driven in passenger cars and light trucks in the United States in 2008 was about 2.4T miles. If half of that distance were to be driven in Chevy Volts, the total required electricity to support this yearly travel budget would be about 240M MW-hr.
Note that the total electricity generated in the US in 2008 was about 4.2B MW-hr, so we would need to increase our generation capacity by about 6% to support the widespread use of electric vehicles. In terms of electric-power generation plants, this would mean we would need to build either 20 new nuclear-fueled plants, or 60 more coal-fired plants. This is a substantial investment in infrastructure; a typical coal-fired power plant runs about $1B to build. By the way, using the effective yearly output from a 2MW wind turbine, the number of turbines one would need to provide this electricity would be about 40,000 at a cost of about $120B just to install the turbines. Good luck with that.
One could argue that the energy needs for electric vehicles could be met with the present inventory of generating plants combined with an diligent electricity conservation program. Maybe, but it will take some fancy footwork when combined with the needs for increased electrical power to support robust economic growth.
Then there's the matter of the onerous cost of electric vehicles, but that's another detail the Ultragreen crowd likes to sweep under rug.