Thursday, February 26, 2009

It's at $1.75 Trillion Now

Back in January, when everyone was yelling about a $1 Trillion budget deficit, I predicted a $2 Trillion budget deficit for Fiscal Year 2009.  Well, President Obama sent his budget request to Congress, and it requires a $1.75 Trillion deficit.  There will be more spending bills.  My $2 Trillion projection may be low.

Wednesday, February 25, 2009

This is why it's going to get worse

The Old Gray Lady has an article today by Hiroko Tabuchi that blames Japan's two lost decades and current depression, not on government-sponsored zombie banks, lousy central planning, and unsustainable deficit spending that kills investor confidence, but on consumer frugality.  Now intelligent people gave up on The Times as a reliable source years ago, but many of the educated in our society still look at it as a respectable medium.  Here's a simple lesson for Mr. Tabuchi: The root word in capitalism is capital.  The basis of the economic system is that the economy is powered by those with capital.  Consumerism, funded by ever-expanding credit is an unsustainable system that will lead to collapse.  If you have good banks, a frugal citizenry, and a government that lives within its means and thus doesn't take the loans that would go to producers, your country will build capital, which can be lent to the productive class to increase production.  With more production, you create more capital, and can sustainably consume more.  The Austrian School has a famous saying: "Consumption is the reward for Production."  The only things that will stop savings from being turned into increased productivity are: Government deficits crowding out good loans or zombie banks with bad balance sheets taking the savings without the ability to loan.  (This is why those banks must be liquidated.)
I charge The New York Times to not print articles like this.  They should be easy to spot.  If anyone blames our current financial mess on too little consumption or poor consumer confidence, they don't know what they are talking about, and giving them a voice does a disservice to the country.

Monday, February 23, 2009

GM Business Plan

Since GM needs so much help, I have a plan to get them profitable. First, they need to put all of those eliminated because of loss of sales back to work. So they can pay them to paint the factories and repave parking lots. Then they can get a few of them to replace their old, outdated natural gas power generation with new, efficient windmills. And since these will cause power reliability issues, they can put in new smart meters that shut production lines down when the wind doesn't blow.  It might hurt production at times, but think of all the money they'll save on energy.  Finally, to keep workers happy, they'll expand their health benefits, extend unemployment benefits for those who they can't re-hire, and give away their cheapest cars to the lowest level workers.

Of course, they'll have to borrow a lot of money to do all of this, and they're already pretty deep in debt, so they'll have a summit to discuss their profitability plan. In it, they'll promise to reduce losses by half in 4 years. They'll do this by 1) praying that sales recover somehow, 2) raising prices by 20% on Hummers, Cadillac SUVs, and Corvettes, and 3) eliminating any incentives available to their high volume fleet customers.

After all, this is the business plan that President Obama and his administration of the best and brightest has produced for the Federal government. It should work swimmingly.

Friday, February 20, 2009

Kid Rock for Commerce Secretary

Kid Rock is getting a $700,000 stimulus check for his brewery from Michigan's Economic Growth Authority, and will create 400 jobs.  That's $1750 in tax credits per job created.  Since the Trillion Dollar Obama-Pelosi-Reid-Snowe-Collins-Specter national spending program is conservatively estimated to cost $225,000 per job created (~$170,000 in government spending, ~$55,000 in tax cuts and credits), it seems obvious to me that Kid Rock has much better economic sense than anyone that had input into the bill.  So President Obama should use his expertise, appoint him as Secretary of Commerce, and let him manage the spending bill.  If he has similar results, he might be able to offset all damage done by TurboTax Timmy at the Treasury.

Sunday, February 15, 2009

Tyranny of City Planning and Zoning

At the Pitchfork and Musket Junta, we tend to concentrate on State and Federal tyranny, because we generally believe that local tyranny will be taken care of by citizens voting with their feet. That tyranny still exists, though, and we should expose it when we come upon it. I recently have come across three examples of tyrannical local laws destroying opportunities for local citizens.

The first from San Francisco, where the Planning Commission refused to allow American Apparel to open a store in the Mission District. According to Caille Millner:
It is too easy to make fun of the people who packed Room 400 in San Francisco's City Hall to stop American Apparel from opening a store on Valencia Street in the Mission District last week.

They are not serious people. They live in a world where facts like 27 vacant storefronts on Valencia Street and 9.3 percent unemployment statewide and nearly 600,000 jobs lost nationally last month do not matter. The few who read books know no authors beyond Naomi Klein. They do not believe that the world has changed since the 1999 World Trade Organization protests in Seattle. This accounts for both the static nature of their vocabulary - "no formula retail!" is their death chant, though anyone who has picked up a newspaper in the last five months could tell you that there isn't a single retail establishment with a formula today - and the juvenile nature of their worldview. They do not want to see businesses be successful. They do not want the Mission District to be welcoming to different types of people.

What they want is magic.

The word "magic" kept recurring during the hours of public comment at the Planning Commission meeting where the American Apparel store's permit was up for a vote. "Valencia Street is a magical place," one speaker said. Another claimed that "Our neighborhood is a dream, a delicate flower." Others spoke of American Apparel as a "parasite" on their "ecosystem." Several local business owners testified that it was their "dream" to operate in such a "magical" place, and noted, with horror, that they might have to make alterations to their business plans if a new store opened in the area.

Next, in Chicago, Walmart proposed building 5 new stores. Chicago has only allowed one Walmart to be built inside the city so far. It employs 400 workers at an average of $11.25/hour, roughly average for unskilled workers. You would think that, during a recession (depression?), Chicago would welcome 2000-2500 new decent jobs, and a retailer that consistently lowers prices to serve poor citizens. Chicago's planning board refused to rule and punted to city council. Chicago alderman are fighting it tooth and nail, because of objections by big labor.

Finally, in Beaumont, they've banned mobile food stands. According to Junta member Shane, who was at the council meeting and heard testimony to get the moratorium overturned, the objectors were all full service restaurant owners. These taco stands and barbecue stands provide cheap, quick lunches, and are frequented by the poorest workers in the city, many of them immigrants.

These three examples are all vastly different, but they have one thing in common. By abusing the zoning privileges of a city, they all will reduce choice for their citizens and will lower the standard of living for the poorest of their citizens.

This Would Make a Great Crime Movie

Courtesy of The People's Cube:

Friday, February 13, 2009

I'm Respectfully Reject the Postition of Commerce Secretary

Dear President Obama,

I understand that you are have trouble filling the position of Secretary of Commerce. I'm sorry, but I can't accept either. Unlike Governor Richardson, I have never traded government contracts for campaign contributions, but like Senator Gregg, I tend to think that our beliefs about the Federal Government's role in Commerce are irreconcilably different. Thank you for your consideration.* I am truly honored.

Good luck finding someone honorable that agrees with your ideology on Commerce. It may be difficult.



* - President Obama hasn't notified me about consideration for any Cabinet position. At the rate he is going through candidates, I assume my name is coming up soon.

Wednesday, February 11, 2009

The First 435 People Listed in the Telephone Directory

William F. Buckley famously said, "I'd rather entrust the government of the United States to the first 400 people listed in the Boston telephone directory than to the faculty of Harvard University."  Well, now the American people trust that randomly selected group more than they do those currently elected to Congress.  According to Rasmussen:
Forty-four percent (44%) voters also think a group of people selected at random from the phone book would do a better job addressing the nation's problems than the current Congress, but 37% disagree. Twenty percent (20%) are undecided.
Other highlights from the survey:
Americans trust themselves more than Congress.
When it comes to the nation's economic issues, 67% of U.S. voters have more confidence in their own judgment than they do in the average member of Congress.
And the part that is most interesting to me:
Fifty-eight percent (58%) agree, too, that "no matter how bad things are, Congress can always find a way to make them worse."
As Will Rogers said more than 70 years ago, "This country has come to feel the same when Congress is in session as when the baby gets hold of a hammer."  It applies as much today as it did then.

Tuesday, February 10, 2009

Priming the Pump

Last night, President Obama gave his first press conference to make his case for the spending package. He did a pretty good job of demonizing the opposition, and painted a pretty bleak economic picture. First of all, I agreed with him on two points: 1) Republicans, specifically Bush, got us into this mess. 2) Alex Rodriguez using steroids is a black eye on Major League Baseball.

For his main point though, Obama's defense of using massive government spending for stimulus is based on junk science. I don't remember him using the analogy, but the typical one used for this kind of stimulus package is "priming the pump". His idea is that the government can spend a lot of money on projects for a while, and that will create confidence, spark consumption, and at some point, spark private investment will create more long-term jobs. It's an idea right out of Lord Keynes' General Theory. The problem is that the theory has never been supported by evidence in the real world. During the New Deal, despite 5% of the workforce being employed by the CCC and WPA, unemployment remained relatively constant. The jobs created by government were almost completely offset by jobs destroyed in the private sector. We got some nice National Parks' buildings from the CCC, and nice paintings on Post Offices from the WPA, but no economic growth. Over the past 15 years or so, Japan has had a similar experience.

We will get some good infrastructure projects out of the spending bill and some wasteful ones. Some people who have lost their finance job that won't come back will get to stay in their house a little longer than they would earlier. Some state and local governments won't have to cut as many programs. What we won't get is stimulus.

Saturday, February 7, 2009

The Most Egregious Act of Generational Theft in History

Question: What's the difference between a Donkey and a RINO?

Answer: About $100,000,000,000 of future taxpayers' money. That's the amount of money that Democrats cut out of the $800+ Billion pork/welfare/state bailout/Medicaid/public art/maybe a little bit of infrastructure bill to get Arlen Specter, Susan Collins, and Olympia Snowe to jump in with both feet. The bill that Congresscritters are calling a stimulus bill, despite the fact that Congressional Budget Office calls it harmful to the economy over the long term. (I figure that John McCain was holding out for another $15).

You've seen them in action. 61% of the Senate, and 56% of the House will shackle an enormous national mortgage to the the feet of their children to grow their own power. It is taxation without representation.

(Thread title borrowed from Tom Coburn's excellent op-ed on the same topic.)

Wednesday, February 4, 2009

Reports of the Death of the GOP Are Somewhat Exaggerated

It's been popular since the election to pronounce the death of the Republican Party as a national force.  Democrats have claimed that they own the West Coast, the Northeast, and the Middle Atlantic, and some even go as far as to claim the Midwest as solidly Democratic.  They usually drag out this map that shows that for most of the country, the trend showed many more votes for Obama in 2008 than Kerry in 2004.  And they have some evidence in their favor.  After all, there are no longer any Republican Congresscritters in the Northeast.  I've even been guilty of this, saying that the Republican Party's focus for the next four years should be on growing grassroots networks, and not really worrying about major elections.  I wholly endorse the 435-district strategy, but I have thought of it more as a very long-term plan than most have. 
But there might be another explanation for these trends.  It not be realignment at all, but a one-year response to a much better Democratic candidate than Republican.  Evidence for this:
First the weak evidence: In yesterday's Fairfax County Board of Supervisors Chairman election, the Republican outperformed McCain by 10%, is 1200 votes behind, and still has an outside chance of pulling the race out once all the absentee ballots and provisional ballots are counted.  Now, normally a Fairfax County election wouldn't mean much beyond Fairfax County, but with an RNC Chairman in Maryland and a DNC Chairman in Virginia, this was a bit of proxy battle.
Now the strong evidence: A Quinnipiac poll shows that Republican Chris Christie, former US Attorney, leads Democrat Governor Jon Corzine, 44%-38%, in very early polling for the New Jersey Governor's race.  Cristie doesn't even have the nomination yet and he has a strong lead over an incumbent Democrat in a state that Obama won by nearly 15%.  The New Jersey and Virginia governor's races are often bellwethers for the strength of the national Parties in the first post-Presidential years, and both states have been claimed as solidly Democratic by Democrats.  We'll definitely keep an eye on them.

Tuesday, February 3, 2009

New Hampshire Legislature has some heroes!

A RESOLUTION affirming States' rights based on Jeffersonian principles.
SPONSORS: Rep. Itse, Rock 9; Rep. Ingbretson, Graf 5; Rep. Comerford, Rock 9; Sen. Denley, Dist 3
COMMITTEE: State-Federal Relations and Veterans Affairs
This house concurrent resolution affirms States' rights based on Jeffersonian principles.
In the Year of Our Lord Two Thousand Nine
A RESOLUTION affirming States' rights based on Jeffersonian principles.
Whereas the Constitution of the State of New Hampshire, Part 1, Article 7 declares that the people of this State have the sole and exclusive right of governing themselves as a free, sovereign, and independent State; and do, and forever hereafter shall, exercise and enjoy every power, jurisdiction, and right, pertaining thereto, which is not, or may not hereafter be, by them expressly delegated to the United States of America in congress assembled; and
Whereas the Constitution of the State of New Hampshire, Part 2, Article 1 declares that the people inhabiting the territory formerly called the province of New Hampshire, do hereby solemnly and mutually agree with each other, to form themselves into a free, sovereign and independent body-politic, or State, by the name of The State of New Hampshire; and
Whereas the State of New Hampshire when ratifying the Constitution for the United States of America recommended as a change, "First That it be Explicitly declared that all Powers not expressly & particularly Delegated by the aforesaid are reserved to the several States to be, by them Exercised;" and
Whereas the other States that included recommendations, to wit Massachusetts, New York, North Carolina, Rhode Island and Virginia, included an identical or similar recommended change; and
Whereas these recommended changes were incorporated as the ninth amendment, the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people, and the tenth amendment, the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people, to the Constitution for the United States of America; now, therefore, be it
Resolved by the House of Representatives, the Senate concurring:
That the several States composing the United States of America, are not united on the principle of unlimited submission to their General Government; but that, by a compact under the style and title of a Constitution for the United States, and of amendments thereto, they constituted a General Government for special purposes, -- delegated to that government certain definite powers, reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the General Government assumes undelegated powers, its acts are unauthoritative, void, and of no force; that to this compact each State acceded as a State, and is an integral party, its co-States forming, as to itself, the other party: that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among powers having no common judge, each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress; and
That the Constitution of the United States, having delegated to Congress a power to punish treason, counterfeiting the securities and current coin of the United States, piracies, and felonies committed on the high seas, and offences against the law of nations, slavery, and no other crimes whatsoever; and it being true as a general principle, and one of the amendments to the Constitution having also declared, that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people," therefore all acts of Congress which assume to create, define, or punish crimes, other than those so enumerated in the Constitution are altogether void, and of no force; and that the power to create, define, and punish such other crimes is reserved, and, of right, appertains solely and exclusively to the respective States, each within its own territory; and
That it is true as a general principle, and is also expressly declared by one of the amendments to the Constitution, that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people;" and that no power over the freedom of religion, freedom of speech, or freedom of the press being delegated to the United States by the Constitution, nor prohibited by it to the States, all lawful powers respecting the same did of right remain, and were reserved to the States or the people: that thus was manifested their determination to retain to themselves the right of judging how far the licentiousness of speech and of the press may be abridged without lessening their useful freedom, and how far those abuses which cannot be separated from their use should be tolerated, rather than the use be destroyed. And thus also they guarded against all abridgment by the United States of the freedom of religious opinions and exercises, and retained to themselves the right of protecting the same. And that in addition to this general principle and express declaration, another and more special provision has been made by one of the amendments to the Constitution, which expressly declares, that "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech or of the press:" thereby guarding in the same sentence, and under the same words, the freedom of religion, of speech, and of the press: insomuch, that whatever violated either, throws down the sanctuary which covers the others, and that libels, falsehood, and defamation, equally with heresy and false religion, are withheld from the cognizance of federal tribunals. That, therefore, all acts of Congress of the United States which do abridge the freedom of religion, freedom of speech, freedom of the press, are not law, but are altogether void, and of no force; and
That the construction applied by the General Government (as is evidenced by sundry of their proceedings) to those parts of the Constitution of the United States which delegate to Congress a power "to lay and collect taxes, duties, imports, and excises, to pay the debts, and provide for the common defense and general welfare of the United States," and "to make all laws which shall be necessary and proper for carrying into execution the powers vested by the Constitution in the government of the United States, or in any department or officer thereof," goes to the destruction of all limits prescribed to their power by the Constitution: that words meant by the instrument to be subsidiary only to the execution of limited powers, ought not to be so construed as themselves to give unlimited powers, nor a part to be so taken as to destroy the whole residue of that instrument: that the proceedings of the General Government under color of these articles, will be a fit and necessary subject of revisal and correction; and
That a committee of conference and correspondence be appointed, which shall have as its charge to communicate the preceding resolutions to the Legislatures of the several States; to assure them that this State continues in the same esteem of their friendship and union which it has manifested from that moment at which a common danger first suggested a common union: that it considers union, for specified national purposes, and particularly to those specified in their federal compact, to be friendly to the peace, happiness and prosperity of all the States: that faithful to that compact, according to the plain intent and meaning in which it was understood and acceded to by the several parties, it is sincerely anxious for its preservation: that it does also believe, that to take from the States all the powers of self-government and transfer them to a general and consolidated government, without regard to the special delegations and reservations solemnly agreed to in that compact, is not for the peace, happiness or prosperity of these States; and that therefore this State is determined, as it doubts not its co-States are, to submit to undelegated, and consequently unlimited powers in no man, or body of men on earth: that in cases of an abuse of the delegated powers, the members of the General Government, being chosen by the people, a change by the people would be the constitutional remedy; but, where powers are assumed which have not been delegated, a nullification of the act is the rightful remedy: that every State has a natural right in cases not within the compact, (casus non foederis), to nullify of their own authority all assumptions of power by others within their limits: that without this right, they would be under the dominion, absolute and unlimited, of whosoever might exercise this right of judgment for them: that nevertheless, this State, from motives of regard and respect for its co-States, has wished to communicate with them on the subject: that with them alone it is proper to communicate, they alone being parties to the compact, and solely authorized to judge in the last resort of the powers exercised under it, Congress being not a party, but merely the creature of the compact, and subject as to its assumptions of power to the final judgment of those by whom, and for whose use itself and its powers were all created and modified: that if the acts before specified should stand, these conclusions would flow from them: that it would be a dangerous delusion were a confidence in the men of our choice to silence our fears for the safety of our rights: that confidence is everywhere the parent of despotism -- free government is founded in jealousy, and not in confidence; it is jealousy and not confidence which prescribes limited constitutions, to bind down those whom we are obliged to trust with power: that our Constitution has accordingly fixed the limits to which, and no further, our confidence may go. In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution. That this State does therefore call on its co-States for an expression of their sentiments on acts not authorized by the federal compact. And it doubts not that their sense will be so announced as to prove their attachment unaltered to limited government, whether general or particular. And that the rights and liberties of their co-States will be exposed to no dangers by remaining embarked in a common bottom with their own. That they will concur with this State in considering acts as so palpably against the Constitution as to amount to an undisguised declaration that that compact is not meant to be the measure of the powers of the General Government, but that it will proceed in the exercise over these States, of all powers whatsoever: that they will view this as seizing the rights of the States, and consolidating them in the hands of the General Government, with a power assumed to bind the States, not merely as the cases made federal, (casus foederis,) but in all cases whatsoever, by laws made, not with their consent, but by others against their consent: that this would be to surrender the form of government we have chosen, and live under one deriving its powers from its own will, and not from our authority; and that the co-States, recurring to their natural right in cases not made federal, will concur in declaring these acts void, and of no force, and will each take measures of its own for providing that neither these acts, nor any others of the General Government not plainly and intentionally authorized by the Constitution, shall be exercised within their respective territories; and
That the said committee be authorized to communicate by writing or personal conferences, at any times or places whatever, with any person or person who may be appointed by any one or more co-States to correspond or confer with them; and that they lay their proceedings before the next session of the General Court; and
That any Act by the Congress of the United States, Executive Order of the President of the United States of America or Judicial Order by the Judicatories of the United States of America which assumes a power not delegated to the government of United States of America by the Constitution for the United States of America and which serves to diminish the liberty of the any of the several States or their citizens shall constitute a nullification of the Constitution for the United States of America by the government of the United States of America. Acts which would cause such a nullification include, but are not limited to:
I. Establishing martial law or a state of emergency within one of the States comprising the United States of America without the consent of the legislature of that State.
II. Requiring involuntary servitude, or governmental service other than a draft during a declared war, or pursuant to, or as an alternative to, incarceration after due process of law.
III. Requiring involuntary servitude or governmental service of persons under the age of 18 other than pursuant to, or as an alternative to, incarceration after due process of law.
IV. Surrendering any power delegated or not delegated to any corporation or foreign government.
V. Any act regarding religion; further limitations on freedom of political speech; or further limitations on freedom of the press.
VI. Further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition; and
That should any such act of Congress become law or Executive Order or Judicial Order be put into force, all powers previously delegated to the United States of America by the Constitution for the United States shall revert to the several States individually. Any future government of the United States of America shall require ratification of three quarters of the States seeking to form a government of the United States of America and shall not be binding upon any State not seeking to form such a government; and
That copies of this resolution be transmitted by the house clerk to the President of the United States, each member of the United States Congress, and the presiding officers of each State's legislature.

Monday, February 2, 2009

Don't Cry for Me, United States

Philip Jenkins over at The American Conservative has a great article this week that compares the response by the United States to this financial crisis to that of Argentina to the Great Depression.  It ain't pretty.
Side note: For those out there that are traditional conservatives or want to know what traditional conservatives think, The American Conservative might just have the best commentary available.  It's worth a subscription.