Sunday, September 5, 2010
Instead of going to shovel ready jobs, some of the Stimulus money is going to shovel something else.
It ain’t shinola. But it could be a close cousin. In relative terms. But let’s get back to the money.
If memory serves me, the total Stimulus was 862 billion dollars. Between now and November 2, unspent Stimulus dollars will be spent in the billions, used as a kind of cover to the millions that’ll be finding their way into Democratic coffers; countless commercials. Do I have proof? Nope. But on a one to ten scale of belief, I’m at a ten. I’d bet my bottom dollar on it. Taxpayer money is going to be spent on the Democratic campaign effort. Big time.
Of course, I wish I had the goods on Obama’s corrupt Democratic machine this minute, but I don’t. At the same time, proof never stood in the way of Barack Obama from saying something he knew to be untrue. A while back, for example, since Obama said ObamaCare would lower premiums, I wanted to know what his position papers and press releases had to say specifically to back that statement on. Would you believe it? From Google to Dogpile, I couldn’t find a single site that would shed light on that question. It’s as if Obama made the statement during his State of the Union Address and nobody from the mainstream media followed up to find out what Obama based that “premium lowering” statement on.
The President’s people admit a couple hundred billion of Stimulus money hasn’t as yet been spent. As to the monies that have been spent, I’ve read that taxpayer money has lined the pockets of supporters from sea to shining sea, but without proof, who can really say. Obama’s big on offering jobs so people won’t run for office, but he’s not big on naming special prosecutors to investigate possible crimes.
Desperate men do take desperate measures. I think the President knew all along that his left-as-Lenin positions would catch up to him. In the November 2, election, he could lose both houses. But I believe the destructive left turn Obama’s taken the country is, in his warped mind, worth it. And in the sharp minds of his lawyers, using the Stimulus money was always going to be the last ditch trump card play to save the House and Senate.
Is it corrupt? Of course it is. Federal Statutes say it is.
But when you’re the most corrupt President in the history of this nation, well, you don’t need me to tell you. We have a crook in the White House who’s capable of anything.
Saturday, September 4, 2010
Just Right!
I don’t care if you love country music or detest it: Make this go viral:
And sing it loud!
Friday, September 3, 2010
“Our Cultural Inheritance”
Rarely does a day pass that I am left uninspired by one or more of my Esteemed Co-Conspirators. Aaron Brenzel's piece, immediately prior to this one, is another example in a long and impressive series, especially as Aaron's predictions couple to this equally impressive insight into the core of feeling behind the August 28th Restoring Honor rally at the National Mall:
Beck gets that there is a deeply and urgently felt conviction emerging organically across a broad swath of the American populace that the spectacular economic and political collapses of recent years were made possible -- even inevitable -- by a much longer Great Moral Decline. Americans' commitment to Judeo-Christian principles, secured for most by a belief in biblical authority, long served to fuel the engine and fortify the rails of our government and economy. Yet now, it is feared, that commitment is no longer powerful and pervasive enough to propel the American marketplace and constrain the excesses and abuses in private and public sectors. In the words of Dr. Alveda King: "Our material gains seem to be going the way of our moral losses."......Americans for generations have passed down a set of values, principles, and practices that honor integrity over greed, frugality over conspicuous consumption, industry over dependency and liberty over coercion. There may be other cultures capable of sustaining a reasonably sound democratic government and free market economy, but the American Judeo-Christian culture undergirded a government and an economy that have arguably been the most successful in all of history.
The deep concern across the United States appears to be that we have squandered our cultural inheritance. We have exchanged the extraordinary treasury of Judeo-Christian stories, values, and wisdom that sustained us for generations in favor of the cheap culture of corruption, indolence, and dissolution that has swiftly bankrupted our economy and our government.
The values embedded in the "cultural inheritance" of which commentator Timothy Dalrymple speaks above are not utterly inseparable from America's Christian heritage. However, they have been transmitted down the generations overwhelmingly through our Christian faith. That transmission line has been seriously abraded.
Over the decades since World War I, religious faith in general and Christianity in particular have been attacked as no abstraction ever has, in all of recorded history. Though the attackers remain a minority among us, because of their control of our major channels of communication they have been remarkably successful at delegitimizing values born from religious faith and propagated through religious faith as political positions. In effect, Thou shalt not murder, Thou shalt not steal, Thou shalt not bear false witness, and Thou shalt not covet have been excluded from political discourse.
A military man will tell you: The moral is to the material as a foundation is to the house built upon it.
Aaron's prognosis for the November elections, particularly as regards the low name recognition of the surging "outsider" candidates, illuminates an important aspect of Americans' current attitude toward Washington: the majority of energized voters will be going to the polls to vote against. The prevailing mood isn't so much anti-Democrat as anti-Establishment and anti-Washington. Party alignments are of secondary importance.
Why? Until recently, the grumbling about the federal government's intrusions and exactions was fairly moderate. Yes, we complained, especially those of us with personal priorities that were being neglected, or personal oxen being gored. But we haven't edged this close to outright rebellion since Daniel Shays and the Whiskey Rebels. Even specially passionate electoral rejections of the sitting hegemons have been rare: FDR's massive defeat of Herbert Hoover in 1932; Ronald Reagan's overturning of Jimmy Carter's skiff in 1980. Clearly, something big is afoot.
At such a time, it's well to look beyond the polls, and to address a wider field than the political prognosticators allow themselves.
I'm acquainted with several persons, not all of them politically like-minded, who sense a calamity approaching. It's possible to endorse government activism in principle without approving of the results of specific exertions thereof; thus, many a welfare-state liberal has taken exception to the excesses of the present administration and Congress. It only requires open eyes to read the writing on our wall.
The folks of whom I speak have been forting up. They're following the advice of the broker in the old gag: "Buy canned goods and ammunition." And they're not at all happy about it.
They sense that their retirements are dubious.
They sense that their livelihoods are threatened.
They sense danger for their children, and their friends...and their country.
And they have begun to sense, however inchoately, that the approaching storm was ignited, and continues to be fueled, in Washington.
A key concept for the analysis of our political devolution is that of agency. An agent is, of course, one who acts on another's behalf. Agent Smith is hired by principal Jones to do something Jones wants done. Perhaps it's something Smith is more skilled at than Jones; alternately, it might be a chore Jones finds arduous or distasteful. But whatever the character of the task or Jones's reasons for delegating it, it is fixed in the everlasting congruity of things, immovably embedded in the moral order of the Universe, that if Jones has no right to do it, then Smith has no greater right to do it on Jones's behalf.
That's easy enough to understand when put in terms of individuals. But what if the agent in the tableau is an organization...or a government?
Marshall Fritz, founder of the Advocates for Self-Government, liked to illuminate this critical moral truth with a sequence of stories about thieves and their unwilling victim. If the thieves outnumber the victim -- if they take a vote on whether or not to steal the victim's belongings -- if the victim is permitted to vote alongside them -- can that sanctify their subsequent theft?
Can wrong be made right by majority approval? Can it be made right by turning the proceeds to charitable ends? Can it be made right if the wrongdoer's intentions are sufficiently benign?
Hearken to the words of the foremost sociopolitical analyst of all time, the great Herbert Spencer:
I asked one of the members of Parliament whether a majority of the House could legitimize murder. He said no. I asked him whether it could sanctify robbery. He thought not. But I could not make him see that if murder and robbery are intrinsically wrong, and not to be made right by the decisions of statesmen, then similarly all actions must be either right or wrong, apart from the authority of the law; and that if the right and wrong the law are not in harmony with this intrinsic right and wrong, the law itself is criminal. [From "The Proper Sphere of Government," in The Man Versus the State]
Government is an agent. Except in an absolute monarchy whose founding principle is that God Himself has given the monarch unchallengeable authority over "his" people and lands, a government has no independent moral standing; it exists solely to act on others' behalf. It cannot make right what is intrinsically wrong. Yet every government known to Man, throughout all the millennia for which we have records, has arrogated to itself that very privilege.
If a people should grant the government over it that privilege, it will be used...and abused.
I wrote some time ago, in addressing another aspect of our political problems, that a class is defined by its privileges. Our political class is no exception.
When our rulers sit together to "make law" and "decree justice" -- yes, yes, those are "sneer quotes" -- their individual interests and agendas are conveniently concealed behind a committee's facade. That doesn't depend at all on the size of the committee; two consuls acting in concert are no more and no less a committee than the House of Representatives. Every individual member can deflect the odium for the decisions of the whole onto his fellows. In recent years, a member's rationales for doing so even if he's concurred in the committee's majority decision have become quite elaborate.
Note how the privilege of setting aside the moral law when our rulers sit in committee has been "informally delegated" to our rulers as individuals. The plethora of scandals, especially financial scandals, that have touched elected officials in recent years bears witness to their fondness for that privilege, and to their desire to exploit it to the fullest. Most notably, every attempt by Us the People to qualify or limit that privilege has been met with a resistance so multifarious and fierce as to defeat my powers of description.
I believe we have found the nerve nexus upon which the Restoring Honor rally, the Tea Party movement, and Glenn Beck and Sarah Palin, the most visible representatives thereof, have pressed: the unassuaged, ever-growing ache Americans feel from having let our political class "get away with it."
The Commandments of Mount Sinai are ten in number, but there was an unspoken eleventh, implied by the enunciation of the others: Thou shalt not get away with it. God will have the final Word on our lawless lawgivers. Whether he will include all of us who hold ourselves individually blameless as their accessories before and after the fact, we cannot know.
I'd rather be safe than sorry.
When Timothy Dalrymple speaks of "our cultural inheritance" in the essay cited above, he speaks not only of the moral strictures that comprise the Judeo-Christian ethos, but also of the breadth of mechanisms by which they've been propagated down the centuries. And indeed, when we strain to explain our political maladies, the enervation of those mechanisms are more important than the ethos itself.
Glenn Beck's Restoring Honor rally was billed, organized, and operated as a non-partisan, even non-political event, despite the presence of former Alaska Governor Sarah Palin and several other political figures. Beck's personal focus was on the return to faith and trust in God and attention to His laws. To the dismay of Beck's many detractors (and no doubt our entire political class), that was the most brilliant stroke of the past two years, a game-changer in the exact sense.
God is non-partisan. His laws bind Democrats and Republicans alike.
The religious conduits through which Americans' moral educations have flowed have been most seriously obstructed by a cultural elite that dominates the education, communications, and entertainment industries. That elite has done its damnedest to efface the moral absolutes graven into the foundation of the Universe by trumpeting messages of relativism and nonjudgmentalism. To this they've coupled baseless yet thunderous denunciations of our "racism," "sexism", "homophobia," and "hard-heartedness." They've slandered the proponents of traditional moral standards as "Puritanical," and have aimed blistering accusations of "hypocrisy" at anyone who defends that standard yet occasionally fails to meet it perfectly. They've abjured God in favor of Cthulhu; they've rejected progress in favor of Congress. The indirectly expressed theme is that, since we are fallen, we might as well dismiss the possibility of rising and enjoy a thorough wallow.
Though I dislike to say it, most Americans have been inhibited from contradicting those emissions, at least overtly. But the conviction that we've gone badly wrong has been swelling in us nevertheless. It could not remain unarticulated forever.
A personal note, which you might find relevant: regular readers of Eternity Road who've dipped into the Short Fiction section are aware that I write the occasional bit of erotica. Being a religious sort, I have a rather different approach to erotica, as you might have guessed. A dear friend has called my stuff "Catholic family-values porn," a phrase I've made my own and have employed in the promotion of my works.
I've included my erotica in my recent E-publishing efforts at Smashwords. Those three volumes have attracted thousands of readers, and have garnered quite a lot of email as well. The common message that runs through those emails has been Why can't I find more material like this?
My most recent offering in that vein is Farm Girl, an unabashed celebration of family life and family love. The response, measured by emailed reader reactions, has been nothing short of stupendous. There's an actual hunger abroad for a return to virtue that doesn't command asceticism or condemn pleasure. Thousands of people, judging solely from what they've written to me, are desperate for a path back to God that embraces life and joy and disdains sackcloth and ashes.
To me, that is quintessentially, even uniquely American. As P. J. O'Rourke says in Parliament of Whores, this is the Happy Kingdom. That's written into the birth certificate of the Republic, right there in the central paragraph, and cannot be excised.
But we cannot be enduringly happy while we reject our moral knowledge. Sociopaths excepted, our consciences cannot be permanently numbed. Nor can we accept the rule of an amoral and rapacious political elite, whose appetite grows with each passing year, while we strain to remain within the bounds of the laws God has written into our natures.
I've written on several occasions that the atheist who leads a blameless life -- Dante's "virtuous pagan" -- will be raised to eternal bliss at its end. But that way is far harder to travel than the Christian or Jewish path; it requires an insight into moral absolutes that few persons possess, and a firmness of conviction that few atheists can sustain.
For the great majority of Americans -- 74% at the last completed census -- Glenn Beck is pointing the proper way. To capitalize on his insight and direction, we must revitalize our "cultural inheritance:"
- The great moral fables of Aesop, Hans Christian Andersen, and the Grimms;
- The philosophical bequests of Aristotle, Augustine, and Aquinas;
- The literary patrimony of the Western Canon;
- Most important of all, the Gospels.
These things must be taken out of our cultural trunk and made vibrant in new stories, new poems, new songs and movies. We must relearn their lessons and proclaim them to our fellows and our children without embarrassment, and certainly without fear. Equally important, we must accept and admit that we are fallen: when we depart from virtue, we must acknowledge our failures, and resolve to do better next time.
We must hold our political class accountable by those standards, without exceptions, evasions, or excuses. We must exact the proper penalties for their betrayals and deceits.
And we must begin at once.
Thursday, September 2, 2010
What’s Coming
For quite awhile now, we’ve been reading prognostications about what the election results in November might look like. The serious ones have usually be prefaced with the caveat “if nothing changes between now and November.”
Well, we’re quickly running out of time.
In order to understand what’s going to happen in a few month’s, it’s important to know what dynamics shape midterm elections. Sean Trende at RealClearPolitics has done an able service of outlining them:
- What is the economy like?
- What do voters think of the President and his agenda?
- What is the size of the majority (if the incumbent party has one) and how recently was it established?
For those keeping score at home, the worst-case scenario looks like this:
- The economy is in the toilet
- The President’s agenda was over-ambitions and very unpopular
- The incumbent party has recently acquired a large majority
If you’re thinking that worst-case scenario gives a pretty accurate description of what’s happening this year, you would be absolutely correct. In truth, we have not seen the stars align in this way for any election in living memory. By many counts 1932 would qualify, although if we dismiss 1932 then we would have to revisit the 19th century to find an environment as bad for the incumbent party as this year is. In 1932, the Democrats rode Franklin Roosevelt’s wave to a 97-seat pickup in the House of Representatives, the closest any party has come to a triple-digit gain.
Could we see a similar defeat for the Democrats this year? I have hesitated to say so publicly until now, but my opinion is an emphatic yes!. One major caveat is that the Republicans will not be riding a resoundingly victorious presidential candidate into office. Such presidential candidates have very real effects on the outcome of elections, for two (related) reasons:
- A well-liked presidential candidate can serve to mask unpopular candidates beneath him because he is the focus of attention and his party label matters to voters. In 2008, voters who were excited to elect Barack Obama also elected candidates whom in other years they would have rejected, like Alan Grayson or Al Franken.
- The presidency is unique among American offices in its ability to set the agenda and produce change. For that reason, even presidential elections involving an incumbent are often forward-looking in nature. In contrast, Congress’s subordinate role in agenda-setting means midterm elections are by nature reactive to the record of the incumbent Congress.
Point (1) would seem to be a net negative for Republicans this year, while point (2) would be a net positive. Notice, however, that the policy platform of the opposition nor their campaign cash nor their television presence has so far entered the debate. This will prove a crucial point as the media gears up into full “horse race” mode in the fall.
In a midterm election, the views of the opposition mean little if nothing on the whole. The views of individual candidates can certainly have an effect on those races, but distributed over roughly 450 federal races and countless state and local races nationwide, those effects will tend to even out. Unless the challenger is particularly controversial or well-known for other reasons, the incumbent in races below the statewide level (governor and senator) will maintain a significant name recognition advantage all the way to Election Day more often than not. Even today, with all the news about the elections, we see results like this:
- AZ-1: “Despite Representative Ann Kirkpatrick having 95 percent name ID (with a 42 to 37 percent favorable-unfavorable rating) compared to challenger Paul Gosar’s 46 percent (23 to 6 percent favorable), Gosar leads on the ballot by a 47 to 41 percent margin.”
- CA-11: “Despite Representative Jerry McNerney having 93 percent name ID (with a 41 to 34 percent favorable-unfavorable rating) compared to challenger David Harmer’s 47 percent (19 to 8 percent favorable), Harmer currently leads McNerney on the ballot by a razor-thin 45 to 44 percent margin.”
- CO-4: “Despite Representative Betsey Markey having 98 percent name ID (with a 37 to 50 percent favorable-unfavorable rating) compared to challenger Cory Gardner’s 57 percent (23 to 13 percent favorable), Gardner leads on the ballot by a 50 to 39 percent margin.”
First, these are truly horrific numbers for the Democrats, but notice how low the challengers’ recognition levels are compared to the incumbents’. By Election Day, it will be a safe bet that more than 46% of voters in AZ-1 will know who Paul Gosar is, but it is also safe to say that percentage will likely be lower than 95%. More importantly, if 95% of the district already knows who Ann Kirkpatrick is and still wants to vote for someone else, how much good will all the advertising money in the world do? Harry Reid will face this same problem, and this is why months of negative advertising against Sharron Angle have at best put him in a tie with her. Finally, notice two of the three Democrats above are losing despite decent favorable ratings. This is some of the first evidence I have seen that we will be in an anti-Democrat year rather than an anti-liberal year.
There is very little, other than some kind of positive personal event for Obama, that is going to change any of these dynamics in the next two months. The economy is not bouncing back, and Obamacare is not going to become suddenly more popular. For those who enjoy electoral history, you are most likely going to witness a slice of it in just a few months.
Wednesday, September 1, 2010
A madman has taken this nation hostage. If only we could call in a SWAT team.
Trying to negotiate with this fruitcake leader of a self proclaimed ruling class, in my opinion, is fruitless. So what should be done about this nattering nabob of socialist dogma? His recent TV performance from the oval office reminded me of a wolf on its high horse howling at the moon while trying to balance a spinning plate on his nose.
How to free the country from ObamaInsanity.
Can the American people, the governed which Obama has lost the consent of, afford to use stretched legal means, albeit extra legal means, to unseat the President who can’t say what he believes any more than OJ could admit to murder? We can’t afford not to.
The constitutional, political, social, economic and military ramifications of inaction are too dire; the carnage Obama leaves in his wake at every turn makes two years the equivalent of an eternity.
Really, the problems faced by America are the same problems faced by a number of Western countries (perhaps all of them bar Switzerland). The problem isn’t any particular political party or ideology but rather with the political class, along with their allies in the bureaucracies. They’re utterly indifferent to the will of the people because they’re able to buy enough support by bribing and threatening the uninformed, the indifferent, the apathetic and the cowardly with money and services taken from others. And we enable it by our acquiescence and cowardice.
“The ballot box won’t fix this. Not soon enough.
“A determined minority, prepared to stand together and demand change-and threaten real violence or crippling disruption if change isn’t forthcoming- just might.
The unforeseen consequences of such action could well turn out to be horrible. But not half as horrible as a slow descent into serfdom.” (KG, Comments, Eternity Road)
Last night, you heard the disjointed, disingenuous, downright ridiculous speech delivered by a President who can no longer make a case even for himself. The crooked Chicago politician who can’t remember pewing in a racist Trinity Church with a pastor who welcomed the terrorists on 9/11 with mellifluous tones of brotherhood is now suffering from thinking that’s crooked to the nth degree. You almost want to feel sorry for him. Almost.
One of his internal dilemmas: Obama has a huge rhetorical problem, one Hitler never had. One Stalin never had.
While the dynamically dastardly duo that I named, more evil than the double play combination of Aparicio and Fox was skilled, meant what they said, Obama is in the unenviable position at almost every turn of believing one thing and having to say another. This is the confusion and double talk so many try to wrap their minds around. He’s President of the wrong nation.
Guys, Obama’s inability to repeat the oath of office was the first major national clue that Obama doesn’t believe what he says. Like the eye moves to motion, the brain fights untruth. To the brain, it’s a dissonant note. To come unscathed out of ObamaMouth, “Preserve, protect and defend the constitution” didn’t stand a prayer.
Obama believes what Rich and Dowd and Olbermann believe. The destiny of Obama in his own mind is to transform America. He’s committed to kill every element of freedom, free enterprise and individual rights that formed this nation’s foundation more than two centuries ago. Looting our treasury in quantities of million dollar paybacks to supporters is disgraceful, not to mention criminal. Getting part of these monies are Hollywood allies who cast TV shows and movies to conform to ObamaWishes.
You couldn’t make up a script that anyone would buy and call it “The Obama Presidency.” William Morris would call it too unbelievable.
Unbelievably, Obama has succeeded in redistributing the wealth of America; just as he mistakenly let slip was his intention that day he walked up to the house of Joe the Plumber.
When Obama speaks off the cuff, truth has a habit of coming out. About little things like redistribution of wealth. About slightly larger things like Obama’s belief in the national destruction of the exceptional nation that leads the free world.
In a country that believes in the supreme law of the land Obama is the exception.
He doesn’t care about following court decisions he disagrees with because he doesn’t believe in the American rule of law. He’s a constitutional lawyer who doesn’t believe in the constitution. Is that pitiable irony lost on anyone? He mocked the Supreme Court during his State of the Union Speech. And lied about why he did it. Don’t you remember? For the first time ever, a congressman yelled, “lies” during the lying halls of congress speech. Have you forgotten when Alito mouthed, “untrue”? Now and then the truth does escape ObamaMouth, but when it does, it’s nasty; you can smell the stink a mile away. But most of the time Obama is curving the truth like an old Nolan Ryan roundhouse.
If Obama were to talk straight, he’d admit that every knee jerk ObamaReaction is to go against the will of the American people. If there’s 70% agreement in this country about most anything, “I’m a thirty percenter 100% of the time” an honest Obama would say. I can hear him sing like a canary.
Hail, hail the Victory Mosque, the whole socialist, marxist gang is here. Where?
In highly paid positions in the White House, carrying out Saul Alinsky dictims.
The Mosque fiasco is the perfect example of Obama letting something that’s inside him escape, like-to-many-baked-beans might cause gas to escape into a movie theatre seat. The result stinks. The American people smell the rottenness of the indecent mosque and Obama’s support of it. And they’re repelled by the odor of that ObamaTruth escaping. Some things, Obama just can’t hold in even though he ends up with egg on his face.
That campaign statement about Americans clinging to their guns and bibles is precisely what I’m talking about.
Consequently, when he’s giving a speech to the American people, the writing of it is as tortured as the delivery. Of course he’s emotionless when he speaks to us. It’s almost impossible to speak with passion about something you totally disagree with; don’t believe. Only the finest actors can pull it off. Or the best con artists.
Of course, electing Obama was a huge mistake. Like sending off a spacecraft with a defective o-ring. He’s like a guy who lies his way into the position of Pope without believing in Catholicism.
Okay, Ollie, another fine mess you’ve gotten us into. What do we do now to free the nation? I’m afraid that inaction isn’t an option.
It took Hitler twelve years to destroy Germany. Obama thinks he can bring the United States to its knees in four. If Obama were President in 1941, we’d have lost the war. If we can’t call a SWAT team to release a hostage nation, what do we do?
A super mole takes up residence in the White House. How to remove it is the question. At this point, I’ll even try the yellow pages. Maybe the Orkin Man is available.
Recession, Depression, And Inflation
With Esteemed Co-Conspirator Scott Angell so nicely covering the economics beat here at Eternity Road, your Curmudgeon hasn't had a lot to say on the subject. However, with the approach of a second round of economic contraction -- you have noticed the downtrend, haven't you? -- it would be well to examine the terminology that's commonly slung about on the subject. If we have a good grip on the meanings of the most common terms, we might better grasp the predispositions and intentions of those who harangue us about the economy.
Each of the three critical terms comes factory-equipped with both a "strict" meaning and a colloquial one.
First, recession:
Strict: Two or more successive quarters of economic contraction ("negative economic growth").
Colloquial: When your neighbor loses his job.
Second, depression:
Strict: A severe contraction of economic activity, characterized by a great reduction of available credit.
Colloquial: When you lose your job.
Third and last, inflation:
Strict: An increase in the money supply, especially one that considerably exceeds recent increases in overall productivity.
Colloquial: An overall increase in the price of common goods and services.
Of the three terms, inflation has recently been the one bandied about in hushed tones. Persons with even a modest knowledge of basic economics know that, without an expansion of the money supply, an overall increase in the prices of goods and services is impossible. We also know that the Bush TARP program and the Obamunist "stimulus" bill have caused the injection of a large amount of new currency and credit into our financial system. What's held back prices to this point has been the tightening of conditions for the granting of credit by most significant lending institutions, coupled to the reluctance of creditworthy borrowers to borrow at a time of politico-economic uncertainty.
But money has a way of expressing itself. There's little chance that the huge cash balances on the ledgers of our banks will lie still forever. For one thing, Washington is unlikely to permit it. For another, financial accounting regards cash-in-hand as a debit item, which must be laid against some corresponding obligation for the books to balance.
When those balances are transformed into loans or the purchase of securities, the standard inflationary process will kick off.
In the "closed" United States -- i.e., the U.S. financial system exclusive of any sources or sinks of money outside its borders -- the embryo of inflation forms when the Federal Reserve Bank purchases Treasury bills. Those purchases are paid for with newly created money. The Fed lists the T-bills purchased as an asset to offset the new money, formally balancing its own books. But the T-bills, which are obligations of the federal government, need not be retired; thus, there is no net effect on the federal debt.
In a "normal" economy, the new money will slowly work its way through the economic system, raising prices first on those goods that are first purchased with it, then on the second round of purchased goods, and so on. After a certain interval -- at this time, about eighteen months -- the effect will have pervaded the system; the overall price level will have increased by an amount corresponding to the increase in the volume of money. If no more new money were to enter the system, stability would prevail.
In a recessionary economy, where economic activity has contracted modestly for six months or more, the dynamic is somewhat different. First, if private citizens and institutions are aware that a contraction is ongoing -- and they usually are -- newly created money will tend to travel more slowly through the economy, and will be put to different uses. In particular, it will be used to a greater degree to retire debt and build up reserves. Thus, the effect on prices will be retarded. If the issuance of new money was politically motivated, a measure intended to "fight the recession," that will usually result in further issuances, as politicians are among the least patient people known to science.
The cumulative effect of repeated issuances of new money, however, is the depreciation of the currency unit -- the dollar -- which will ultimately reveal itself as the prices of goods and services rise in concert. This will cause an accelerating tendency to "flee to safety," abandoning dollar-denominated assets for other currencies or for hard assets such as gold, silver, or land. But hard assets are not productive; they generate no new economic activity. Thus, as the dollar weakens and ever more wealth seeks shelter, the recession will deepen, possibly enough to qualify as a depression.
In the "open" United States, which has access to sources of credit outside our borders, the matter is different only in being worse. By borrowing from foreign holders of dollars -- i.e., selling them T-bills -- Washington can seed an inflationary surge without needing to involve the Fed. That increases the national debt and the interest payments on it, thereby reducing the fraction of federal revenue available to fund ongoing activities and increasing Washington's incentive to borrow. The sole evidence that this has occurred is on the federal government's own balance sheets, which are of dubious integrity.
But credit is indispensable to a capitalist economy. Without willing lenders, there will be few or no new enterprises; even existing, long-established ones will find it difficult to operate. When governments have soaked up the greater part of the available credit, economic contraction becomes inevitable -- and is usually severe.
When Carter Administration official Alfred Kahn dared to warn Americans of the possibility of a depression, the White House directed him to cease to use the word. Ayn Rand probably rolled over in her grave at that. (Well, she would have, if she'd been dead at the time.) The terms we use to describe reality cannot change reality. They can, however, affect our attitudes toward that reality, which was precisely what the Carter Administration, which had increased the federal deficit sharply upon arriving in power, sought to avoid.
Carter and his policymakers were liberals and Keynesians. They believed they could moderate the nation's economic malaise by fiscal operations. They were wrong -- Keynesianism must be the most thoroughly refuted economic doctrine of all time -- but like hardened ideologues of all sorts, they persisted nonetheless, even into the teeth of 13% annual inflation and 20% interest rates. In a way, it was fortunate for us, for it brought us the Reagan Revolution and a (temporary) rationalization of federal fiscal policy. Federal revenues nearly doubled over the Reagan years, while price increases dropped to 2% to 3% per annum. That Congress persisted in overspending its budget bears not at all on the success of the Reaganauts' fiscal corrections, but was rather an exercise in Public Choice / special-interest political dynamics.
We have a second Jimmy Carter in the White House, less rational and more headlong than the first one. He's backed by even larger and more complaisant majorities than his predecessor. What's restraining us from a second round of Carterite fiscal and financial disasters is only the reluctance of lenders to lend and borrowers to borrow, owing to the murkiness of the foreseeable economic future.
Remember in November.
Tuesday, August 31, 2010
President Obama bragged that he’d transform this nation. This nation is about to transform Obama.
Barack Hussein Obama is the super mole in the White House leading us down the superhighway of destruction. If the 25th Amendment can’t remove him, the voters will.
Back From The Berkshires
Well, that was pleasant. Shortly it will be "back to the regular grind," but first a few lines of reportage from that hotbed of sociopolitical intrigue, the Berkshires of Massachusetts.
1. The Economy.
Things are bleak for the hospitality / vacation industry, at least in the Berkshires.
The hotel at which we stayed, which had never previously had any vacancies over a summer weekend, had a total of five guests -- at a 300-unit hotel. The restaurants at which we ate were equally depopulated. Nor were there many "foreign" license plates to be found at any of the tourist destinations we passed.
There was one spot of visible activity: the outlet mall. But even there, prices were being jacked downward almost too fast for the eye to follow. Merchants at the Berkshire Mall, a conventional shopping center, have very little traffic -- for a typical store, a couple of dozen walk-ins per day, with actual purchases in the single digits.
But this is the "Summer of Recovery," right? Right?
2. "Sister Cities."
Pittsfield, Massachusetts has apparently gone the way of Berkeley, California in adopting "sister cities." There were signs at all the roads into town enumerating those "sister cities" -- four in all -- which one must assume the Pittsfield city council regards as like-minded or like-charactered in significant ways:
- Ballina, County Mayo, Ireland
- Cava de' Tirreni, Italy
- Cheongju, South Korea
- Malpaisillo, Nicaragua
Berkeley adopts "sister cities" on the basis of political alignment (hard left, of course). On what basis Pittsfield chose its foreign siblings, I do not know. But judging from the proliferation of Priuses, Birkenstocks, and unshaved female legs, I have my surmises.
3. WiFi.
Contrary to what one might expect -- or hope -- wireless Internet access in hotels is not yet universal.
Our hotel is divided into three separate buildings. I was assured that the one in which we stayed had continuous, reliable WiFi. Well, that turned out not to be the case, at least in our rooms, where the connection was extremely slow and as unpredictable as the affections of a politician.
There was one spot in the building where access was continuous, fast, and reliable: a second-floor conference room that was unused throughout the weekend. However, that room was unlighted and un-air-conditioned, which made it less than pleasant for the purpose.
It was also the room we had to go to for our "complimentary Continental breakfast." More than coincidence?
4. Small Town Journalism.
The regional daily newspaper, the Berkshire Eagle, carries a small amount of national news, but mostly covers local developments. For example, the edition for Saturday paralleled a story on the collapse of American birth rates with a story about a single employee of a local concern who'd been fired, unjustly in his opinion, and was protesting the dismissal -- both front page, above-the fold.
There's something refreshing about that. Not every media organ aspires to national significance; not every newspaper relentlessly mimics the New York Times. When a paper's reporters must produce news items of importance to the daily lives of its proximate readers, those reporters must commit actual investigative journalism: they must look for what's happening, capture it in process or shortly thereafter, and relate the facts essentially without editing or "framing," so that the reader can grasp their relevance to him as a resident of the area.
A dear friend has written extensively about the faults and essential insufficiency of broadcast journalism: the sort of organ that attempts to cover all (and only) the biggest stories from around the world. I think he'd approve of the Berkshire Eagle. Its attitude toward journalism could spark a revival of interest in it...hopefully, among journalists.
5. Frame of Mind.
Monday morning, as we prepared to depart the Berkshires for Long Island, I realized a terrible thing: I had relaxed.
I was in a totally unsuitable frame of mind for returning to the hurly-burly of my job, my home, my animals, and my several pursuits. There was no way I could re-immerse myself in my usual life without first "gearing up." That would be like requiring a community organizer with no other job experience to undertake the responsibilities of president of the United States.
It weighed on me all through our drive south. When we stopped for a bite of lunch, I resolved to use the one and only technique available to get back into the required state of anxiety.
I let the C.S.O. drive the rest of the way.
Don't get me wrong: I love my wife. But she regards the highways as her personal property, and the laws of physics as suspensible by sheer willpower (hers, of course). To her, to leave ten feet between cars moving at 75 mph is wasteful; six or seven feet is more than sufficient. Of course, any speed below that is an affront to the gods of internal combustion. And so, after 100 miles of heart-in-mouth derring-do on high-speed roads populated by creatures from every page of the automotive bestiary, I found myself back on Long Island, blood pressure once again grazing four digits, and in need of a really big drink.
And how was your weekend?
Monday, August 30, 2010
The reason for leftist panic.
I would suggest that one of the main reasons so many liberals are in a flop-sweating, bowel-stewing panic over Fox News and the Tea Parties is that they understand such developments are a real threat to epistemic hegemony of liberalism that has been unraveling for the last decade and half. . . .
. . . Since 1950, “vital center” liberals, and of course leftists, have looked for every conceivable excuse to delegitimize conservative dissent and criticism. For decades, liberal elites abused their monopoly on the media and their near complete control of the commanding heights of the culture to attack not just conservative ideas, but conservative motives . . . . That effort is still under way in the arts, in academia and in the few remaining bastions of the “legacy media.”
. . . [L]iberals have grown more shrill and desperate in their efforts to delegitimize conservative ideas, new and old.
Liberal reaction to conservative argument heads south after the first two or three sentences. Conservatives are racists, sexists, nativists, bigots, borderline paranoids, full-fledged paranoids, homophobes, or xenophobes. You see it everywhere.
Mr. Goldberg is right. Liberals go straight to vitriol and personal attack because they’re desperate at the loss of the monopoly and unaccustomed to doing the work to refute the substance of conservative arguments. The Supreme Court’s reversal of 140+ years of learning on the Commerce Clause was an atrocious betrayal and a lie from the word “The” on down. Yet, since the New Deal, this betrayal has been lauded as wisdom incarnate and served up as the mother’s milk of the unitary state.
Now conservatives have the outlets to proclaim leftist lies for what they are and leftists can do nothing to stop the threat to the foundation of their power. They try to foist hate speech laws, PC codes, Fairness Doctrine II, and net neutrality on us. But their real agenda is plain. They are attacking free speech and will do all in their power to demonize their hated enemies on the right.
Leftist hostility to liberty is clear.
”The Conservative Bubble and Liberalism’s Cargo Cult.” By Jonah Goldberg, The American, 4/13/10.
Oriental Bookkeeping
It was recently announced that China had finally surpassed Japan’s GDP to make it the second largest economy in the world --
China surpassed Japan as the world’s second-largest economy last quarter, capping the nation’s three- decade rise from Communist isolation to emerging superpower.
Japan’s nominal gross domestic product for the second quarter totaled $1.288 trillion, less than China’s $1.337 trillion, the Japanese Cabinet Office said today. Japan remained bigger in the first half of 2010, the government agency said. Japan’s annual GDP is $5.07 trillion, while China’s is more than $4.9 trillion.
However, a few observant souls pointed out something which should have been obvious—that in real terms China’s GDP is actually far higher than the nominal figure would suggest. By other measures, China passed up Japan long ago. When measured in Purchasing Power Parity (PPP), China’s GDP is about twice as large—indicating that its currency trades on forex markets at about half its real value relative to the yen. Compare the following data on nominal GDP vs. PPP GDP:
Nominal GDP
— European Union 16,447,259
1 United States 14,256,275
2 Japan 5,068,059
3 China 4,908,982
4 Germany 3,352,742
5 France 2,675,951
6 United Kingdom 2,183,607
7 Italy 2,118,264
8 Brazil 1,574,039
9 Spain 1,464,040
10 Canada 1,336,427
11 India 1,235,975
12 Russia 1,229,227
13 Australia 997,201
14 Mexico 874,903
15 South Korea 832,512
16 Netherlands 794,777
17 Turkey 615,329
18 Indonesia 539,377
19 Switzerland 494,622
20 Belgium 470,400
PPP GDP
— European Union 14,793,979
1 United States 14,256,275
2 China 8,765,240
3 Japan 4,159,432
4 India 3,526,124
5 Germany 2,806,266
6 United Kingdom 2,139,400
7 Russia 2,109,551
8 France 2,108,228
9 Brazil 2,013,186
10 Italy 1,740,123
11 Mexico 1,465,726
12 South Korea 1,364,148
13 Spain 1,360,605
14 Canada 1,281,064
15 Indonesia 962,471
16 Turkey 880,061
17 Australia 851,170
18 Iran 827,858
19 Taiwan 735,997
20 Poland 688,761
(My apologies on the table format. Fran’s HTML editor hates me.)
Gentle Reader, which list looks more reasonable?
PPP looks at how much stuff a unit of currency would buy in a local economy, then compares that to the purchase price of the same stuff in another currency in a different economy. Since theoretically (but of course not practically) all goods trade on an international market, they should have the same or very similar prices in every market—much like turning everything into a commodity money a la the old international gold standard that prevailed in the nineteenth century. Notice the particularly glaring disparities of the highlighted countries, especially China and India. All tend to be (amazingly!) competitive exporters.
I also noticed this huge disparity when I was in China back in 2005. The prices of goods did not remotely reflect the exchange rate, but were very consistent with one another relative to what I would expect to pay in America. The exchange rate was (I think) about eight to one at that time, but goods were priced as if the rate were only about four to one. For example, a pound of grapes that might go for $1 here was only about 4 yuan instead of eight.
What a steal, right! No wonder Chinese exports are so ‘competitive’—they’re being given away at half-price. At fair valuation, they wouldn’t be competitive at all. I’ve said it before and I’ll say it again—the Chinese economy is not that competitive. People not that close to the situation cannot comprehend the wastefulness and corruption that is endemic there. China has had to rely on sleight of hand like this to keep it’s edge, and now that this scheme has exploded on it, the Chinese economy is out of luck. It is said that China will start to wean itself off exports and start relying on domestic consumption, but nobody seems to want to ask the obvious questions—if it were that easy, why hasn’t it happened already, developing organically? Why not do that all along if that were all there was to it? Why did China need export markets to come out of revolutionary economic deep-freeze?
The obvious answer is that it didn’t because it can’t, and basketcases are basketcases for a reason. People who don’t need crutches don’t use them, and nobody with any sense sees a guy in a wheelchair and expects him to leap up and run a marathon on command. But then, I suppose that economics is not a subject to expect to see much good sense.
I don’t care what the experts say, that country is going nowhere fast. Barring total annihilation of the West, China will not surpass US GDP by 2030, and it may not even do it by the end of the century. Here is an excellent (thought somewhat lengthy) article about Japanese-Chinese similarities, and what might happen to China going forward. His analysis is not particularly Austrian—he attributes Asian bubble-blowing to built in subsidies that force manufacturing and industrial development at the expense of domestic consumers—but the outcome is not entirely different from an export mania created by currency manipulation. In the end, the nation develops an established economy dependent on the distortions, and unable to function and develop once they’ve lost any meaningful effect.
Here’s a particularly interesting passage:
But for a long time the problem of misallocated investment, which was whispered about in Japan but not taken too seriously, didn’t seem to matter. After all, as nearly everyone knew, Japan’s leaders were extremely smart, with a deep knowledge of the very special circumstances that made Japan different from other countries and not subject to “western” economic laws, with real control over the economy, with a strong grasp of history and penchant for long-term thinking, and most of all with a clear understanding of what was needed to fix Japan’s problems.
And look what a great job they had already done: by the early 1990s Japan had generated so much investment-driven growth that it had grown from 7% of global GDP in 1970 to 10% in 1980, and then surged to nearly 18% at its peak in the early 1990s. In about twenty years Japan’s share of global GDP was two-and-a-half times its initial share. That is an extraordinary growth story and one that can only be explained as a function of a new kind of economic thinking, right?
But less than twenty years later, after a terribly long struggle to adjust to high debt levels and massive overinvestment, Japan is about to be overtaken by China with only 8% of global GDP. Japan, in other words, has given back in less than two decades almost the entire GDP share it had taken in the two astonishing decades that preceded it (while during the same period the US has maintained its share). What’s worse, it is hard to pick up a newspaper today and read about Japanese policymakers without getting the idea that they are a totally dysfunctional, narrowly ambitious, and not especially savvy lot, much like their US and European peers. As Mortimer Snerd used to say, who woulda thunk it?
Don’t be fooled by the arguments of the brainwashed ‘capitalists’ touting repressive, backwards societies as models for Western policy and economic development, and don’t blindly accept whatever outcome the market produces as the honest-to-goodness ‘correct,’ most optimal arrangement. There will never be anything approaching free markets or free trade so long as there are central banks and meddlesome governments to manipulate currencies and terms of trade. As long as they exist, you can’t really trust the ‘market’ outcome.
It’s all a game.
