A fiscal parable: by guestblogger Lulu

[My friend, and too infrequent guest-blogger, Lulu puts our economic problems in terms the women who voted for Obama might be able to understand.]

Recently I was talking to some bright, educated women about how they wanted to help their children learn the value of money and appreciate receiving things, and to understand that it takes money and work to earn items. One mother complained that her daughter demanded things constantly and the mother, a single mom and not a big earner, simply couldn’t afford to provide her daughter with all these goodies — goodies her wealthier friends could afford easily.

The parents talked about strategies to teach their kids that they can’t spend everything parents earn. Money has to go to bills, savings for college, and myriad other expenses. “Why can’t the kids grasp this?” they pondered.

I made a vague comment alluding to the similarities this had to our national debt situation. Blank and confused faces stared at me. Every one of these women had voted for the man who was driving our nation’s economy into a free fall. The expressions on their faces were not showing anger or political resentment. They simply didn’t connect the dots between wanton government spending and the kind of behavior they were worried about in their kids.

I concluded that the reason they can see the problem spending with their children is because the issues are real, immediate and tangible. Our government debt is all theoretical. We have been hearing about the debt crisis and the fiscal cliff forever.

When it comes to the debt crises’ effect on the economy, besides some minor belt-tightening with higher gas and grocery bills, these folks haven’t experienced much of a change in lifestyle. They may know people who lost their jobs, or college kids who can’t find work, but these people survive. The college grads move back in with Mom and Dad. Their friend on unemployment and food stamps is doing OK.

The economic reality of a debt-ridden government and economy just hasn’t hit their consciousness yet. They are not making rag rugs, soap bars out of soap scraps, and other Depression era survival strategies. They live in California, after all, where voters have never connected the dots between the dismal fiscal situation and the people they vote for.

The only way to convey the situation, I figured, is to explain the macro debt disaster in micro terms, as if it affected only their own family. Here is my parable with these nice ladies in mind:

You finished college and you have started bringing in steady income. Every month with that paycheck coming in, you realize that, in addition to the regular household bills, groceries, gas, health insurance and taxes, you can actually afford some perks. You can eat at restaurants a few times a week and not even feel it. You can buy nice clothes, take a big vacation every year, and, if you use your credit card, you can buy some things you couldn’t afford today, but you can pay off.

Eventually, you get a bunch of different credit cards because each one has a limit. You buy a new car, thousand dollar shoes (why not, I deserve them?), a wind surfboard, a new plasma TV, an amazing sound system, a designer dog, a new stove, dishwasher— heck, a whole new kitchen remodel, a backyard pool, a trip to Paris, season tickets to the ballet as well as the LA Kings, and — “I’m sick of these clothes”—a new wardrobe.

Eiffel Tower

Put together, these expenses vastly exceed your income, but you’re able to make minimum payments every month on each of these credit cards. OK, there’s interest, but you’re managing.

Now you marry a really popular guy with a great smile. He likes to spend too, on popular guy necessities such as great clothes, sharp haircuts, and a luxury car.

Your super cool husband has some credit card debt too. He doesn’t seem to be struggling to pay it off, though, because he constantly spends money on things other than those credit cards. He goes to Vegas often, although he seldom comes back on top. He invested in a solar company and it went bankrupt and he lost his entire investment. He invested heavily in a car company but hasn’t recouped his investments. And he spends, spends, spends.

Lobster

Wherever your guy goes, he has to treat. He buys dinner for everyone in the restaurant and he insists on paying all the neighbors’ and their kids’ doctor bills.

You scream. “Why do you need to pay that? Those ‘kids’ are 25! Why do you want them to be dependent on you?”

He laughs and accuses you of being stingy and not generous. You scream more loudly, “But you don’t have the money to be generous! Our bank account is empty. We are spending more than we bring in! Last month our combined salaries were $4000 and you spent $7000. We will never pay off our credit card debt that way.”

“Oh, don’t worry about it,” he says soothingly. “I have a plan. It will be OK.”

Casino sign

He goes to Vegas again and lost his shirt. To console himself he takes a luxury trip to Tahiti, golfs and feels much better. He was helped by the fact that he stayed in a 5 star hotel and got massages to calm his nerves. Upon his return from Tahiti, your super cool husband decides to buy a new yacht and puts in the order.

You can’t stop screaming. “We can’t afford the yacht! We can’t afford the vacation! We will already never pay off what we owe!!!”

Hubby reaches over, pats your arm and says, “Stop grumblin’. Mr. Wong down the street has given me a big loan. We are fully covered. He said he has plenty more. And Mr. Mahmoud around the corner was willing to talk. So stop your belly-achin’. Let’s live, baby!”

A few weeks later you discover that you are pregnant with twins. You have to cut back on work. Your income drops.

Although your income is significantly less, your husband’s spending doesn’t go down. In fact, he announces that he has more things he wants to buy.

You plead, “But the babies will need so many things. We need to do their room, buy supplies, begin a college saving program. Let’s watch our budget.”

Mr. Super Cool is unfazed: “I promise it will be OK. When they get to college, college will be free. Why should we skimp now when things will be different when they grow up? Everything will be free for them.” He condescendingly pats you on the head and heads to the golf course with his new set of clubs.

Paying bills

Recently he started hanging out with Beyonce. You sit at home worrying about the two lives that are growing inside you. If you can’t pay off your debts, what will happen to your kids?

When your husband comes home, you plead, “I have been thinking about our kids and their future. We need to change our ways.”

“Don’t worry,” he smiles and cuts you off.

Determined, you continue, “If we don’t pay off our debt, they will inherit it. It is already so big I don’t know if it can ever be paid.”

“Stop your grumblin,” he snaps. “I’ve been trying very hard. I can’t get it completely fixed because these fat cats at work keep interfering with my plans. They don’t get that I can spend as much as I want because our incomes and Mr. Wong’s loans cover everything. I have to pay for the neighbors’ doctor appointments because I’m a caring guy. They look up to me. They depend on me. Don’t you see? So, don’t worry. Don’t listen to Paul. He’s just a blowhard, OK. Smile for me, Sweetie.”

Then the roof springs a huge leak and needs to be replaced. The fridge goes on the fritz. The twins are born and one has a costly medical condition needing a supportive treatment not covered by the insurance. Then the house catches on fire and half of it needs to be rebuilt. It is unlivable for months.

Mr. Wong loans your husband more money but he is not smiling anymore. He is starting to complain.

Four years go by and you divorce. Your ex- husband buys a luxury estate in beautiful Hawaii. Meanwhile you have to leave your nice home and move into a small apartment.

You remarry, a man who is a better financial planner, maybe a bit less charming than your last husband, but a solid working man. Every day he struggles to control the credit card debt, maxed out at every card. Mr. Wong refuses to loan you more money, news that your new husband greets with relief.

You have to stop eating at restaurants. You buy your daughters’ clothes at thrift stores. They can’t take ballet or piano lessons. There is no money for birthday parties and trips to Disneyland.

Every month you pay out an amount that would have once brought you a comfortable, luxurious lifestyle. Instead, it all goes to paying off the credit cards, Mr. Wong, and all the interest.

The twins, growing up in hand- me-downs, knee patches, leftovers and resentments, complain constantly that it isn’t fair. “We get nothing and look how much you and dad enjoyed! When I grow up I will get nothing and I will be paying all my life for your shopping sprees! I will work for nothing! Live in this cruddy apartment forever, all because you maxed out and borrowed from Mr. Wong- who now lives in our old house! And when we have kids, if we ever do, they will still be paying off your shopping sprees!!!”

Garage sale sign

You weep and apologize, hating to see your children suffer and struggle, but the bill collectors are pounding at the door.

I hope this little parable brings our current national financial shape into a clearer picture for those who need to bring the theoretical into the realm of the personal.

Stephen Moore, of the Wall Street Journal, knows how to give a good speech

Stephen Moore by David Shankbone

When conservative writers and thinkers come to San Francisco, it’s a good bet that they’re doing so under the aegis of Sally Pipes’ Pacific Research Institute (PRI), a conservative think tank rather surprisingly located in San Francisco.  Sally’s specialty is free-market medical care, but PRI is concerned generally with free markets.  Thanks to PRI, I’ve already had the opportunity to hear Jonah Goldberg and Michael Ramirez speak.  Today, I added to my collection of scintillating conservative speakers when I attended Stephen Moore’s luncheon talk and book signing.  (If you want the book for yourself, it’s called Who’s the Fairest of Them All?: The Truth about Opportunity, Taxes, and Wealth in America.)

If you get the chance to hear Moore, seize the opportunity.  He’s a delightful speaker.  He knows his stuff, so he doesn’t bother with notes; he’s not shy, so he engages well with the room; he’s an organized thinker so, even when he goes off on a tangent, the tangents are interesting and still relate to the main topic; and he’s quite funny.  I’m still snickering over his statement that a friend of his says it’s no surprise that Republicans are the pro-Life party, because they so often end up curled into a fetal position.  That’s too true.  When the going gets tough — especially when the drive-by media gets nasty (which is always) — Republicans tend to shrink in on themselves, rather than re-taking the field with banners flying.

Moore’s primary topic, which he interspersed with funny anecdotes; ruminations on the wonders of fracking, which will make America one of the giants of the energy world; and on-point (rather than name-dropping) reminiscences about Milton and Rose Friedman and other well-known political thinkers and actors (on both sides of the aisle), was the fiscal cliff.  He had the room (and it was the grand ballroom, not some little back room) eating out of the palm of his hand when he said that Republicans should stop negotiating with Obama, because Obama is not negotiating with them.  Moreover, to the extent there are budget talks, they should take place in the open, rather than behind closed doors, a process that invites dishonesty and corruption.  (Those last two nouns are mine, not Moore’s.)

Moore said that, if he had his way, he would tell the Republicans in the House to pass two bills, one of which keeps the Bush tax cuts in place for everybody and the other of which gives Obama what he told the voters he was going to get:  namely, a tax increase on the top 2% (after all, elections do have consequences).  Then, House Republicans should pass those two bills on to Harry Reid in the Senate and stand down.  Harry Reid then has a problem, which is compounded by the fact that he’s managed to let the United States go three years without a budget.  If he has a brain in his head, he’ll realize that the best deal for American tax revenues is to keep the Bush tax cuts in place.  As John F. Kennedy (D. Mass.) said in 1962 (and Moore approvingly quoted):

John F. Kennedy

It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.

Because Reid is long on political game-playing, but short on practical knowledge, he’ll reject the reinstatement of the Bush tax cuts.  Instead, he’ll have to go with the tax increase.  You know, and I know, and Harry Reid is quickly going to figure out that the tax increase on the 2%, the same 2% that is already responsible for paying a significant chunk of taxes for our underfunded budget, won’t make a dime’s worth of difference to increased revenue and, instead, will almost certainly decrease revenue.  The pressure will then be on Obama to cut his beloved government or to be remembered as the president who led America into bankruptcy.

Moore also said that Republicans shouldn’t fight sequestration — which was Obama’s idea back during his last round of serious negotiations with the Republicans — but should, instead, embrace it.  The best thing to happen to the federal government would be belt-tightening.  Moore acknowledged concerns about the American military but, pointing to stream-lined American businesses, he said that there’s no reason why America’s public institutions can’t do the same — including the military.

Overall, Moore was optimistic about conservativism’s future.  His advice was to bypass the Republican party, which is depleted now, both financially and ideologically, and to give any monies we still have lying around after four years of Obama to innovative, energetic organizations and think tanks, such as PRI or the Heritage Foundation.  He also said that, if Republicans can manage to hold firm to true conservative values, when things go badly, as they inevitably will, Obama, not Republicans, will be on the defensive.  (Can I pat myself on the back here, since I’ve been saying the same thing?)

Moore’s message could be summed up as follows:  Be of good cheer.  Although things are inevitably going to get worse before they get better, they will get better.  Conservative ideas are better, Progressive ideas will fail once they get out of the Ivory Towers and into the market places; and fracking (assuming that Obama doesn’t put a stop to it somehow), will make us the world’s leading energy exporter and will bring production costs down across the board.

Thomas Sowell on the fallacy of liberal ideas

“Who’s Thomas Sowell?” my daughter asked.

“He’s a genius,” I replied.

“Why?”

“Because he has the rare gift of simplifying very complex ideas without dumbing them down.”

See for yourself:

After listening to Sowell, my blog’s motto seems appropriate:  “Conservatives deal with facts and reach conclusions; liberals have conclusions and sell them as facts.”

Hat tip: American Thinker

Gore’s boiling frogs versus real boiling frogs: can we save ourselves?

Al Gore got a lot of mileage out of likening the slow accretion of anthropogenic climate change to a frog in cold water that was gradually being heated to boiling point. He contended that, just as the frogs were lulled by the gradual heat to be the point at which they’d fail to react when the heat became deadly, so too were we humans going to allow our planet slowly to boil us to death.

Except that everything Al Gore said was untrue.  First of all, there’s increasing evidence that anthropogenic global warming doesn’t exist.  Climate change definitely exists, and always has.  Sadly for Gore’s inflated sense of self, though, the earth’s climate does not bend to human will.  Humans are capable of polluting their environment, something that they’ve done since time immemorial, but the evidence for them changing the climate doesn’t add up.  Second of all, frogs do not allow themselves to be slow-boiled.

Unlike the earth’s climate, humans have direct responsibility for economic changes.  In America, the tension is between free markets and a government-managed economy.  At the federal level, voters opted for government-management.  At the local level, it was a mixed bag.  As a resident of California, I can tell you that a government-managed economy, especially one further tainted by union favoritism, is a recipe for economic disaster.  In California, we are the frogs in the hot pot.

Here’s the question:  will we humans react like real frogs and try to escape from the government-managed economic mess we’ve created, or will we go Gore and sit there was we boil to death?

Obama’s economy and his health care plan come together in the restaurant business

On Monday, I noted that ObamaCare regulations requiring employers to provide full (really full) insurance coverage to all employees may make running restaurants, which have a famously low profit margin, so prohibitively expensive that many will go out of business.

It turns out that we needn’t fear this eventuality, because we’re about to see a perfect confluence of two Obama policies.  Restaurants can avoid the costs of ObamaCare by hiring only part-time employees.  This is so because ObamaCare says that employers don’t have to provide health insurance for part-time employees.  The down side of this is that the poor, part-time employees will have to provide their own insurance (or pay a penalty), not to mention struggling to pay for food and housing on a part-time salary.  Or will they?

As you might have noticed, the economy has not improved measurably under Obama.  Indeed, thanks to Obamanomics, college graduates are barely getting by:

In California, it’s long been the joke that prospective actresses come to the state to become waitresses. Now, thanks to the Democrat-created economy, so do college graduates. The newest census shows that between 2006 and 2011, the number of college graduates working as waiters doubled. Approximately 260,000 California college graduates below the age of 30 worked in low-level menial jobs in 2011, an increase of 60,000 over 2006.

And there you have it:  the Obama economy provides ready-made part-time employees for a restaurant that can no longer afford full-time employees.  Even better, these part-timers will live in their parents’ basements and, until they’re 26, get their insurance from their parents’ employers.  Right now, we won’t worry about what happens when their parents’ employers can no longer bear the cost of providing for their own full-time employees, plus an increasing number of Obamanomics-created dependents.

What we’re seeing is the perfect symmetry of an imploding Leftist-managed economy.

Too much education makes people economically dumb

I’m not boasting when I say that I move in very rarefied circles.  It’s a fact that became glaringly obvious to me today when I started reaching out to legal colleagues via LinkedIn.  I’m launching a new business enterprise, and those connections will be useful.

For those unfamiliar with it, LinkedIn is the professional equivalent of Facebook.  Rather than chit-chatting about children, sports, and the minutiae of their lives, people use LinkedIn to post their resumes, boast about their professional accomplishments, and network with other professionals to whom they can be useful or who can be useful to them.  So, as I said, I’m working on using LinkedIn to touch base with lawyers I’ve met over the years, whether high school classmates who went into law, law school classmates, professional colleagues, or people whom I’ve met through PTA and the neighborhood who also happen to be lawyers.

As with Facebook, LinkedIn examines your friends’ friends and, if two of them share a common friend, LinkedIn will suggest that person to you as a possible link in your own professional network.  This is where I get to the rarefied bit.  When I scroll through my LinkedIn contacts (who currently number less than 100, because I’ve never paid that much attention to cultivating these contacts), I get suggestions that run the gamut from high stratum A to rarefied stratum B:  ambassadors, corporate CEOs, senior counsel at major corporations, managing partners of huge law firms, etc.  In my circles, these titles are predominant amongst the various professional friendships LinkedIn identifies for me.  I

What interests me so much about these people is that I know for a fact as to most, and can reasonably guess as to the remainder, that they voted for Obama and, within their own states, counties, and cities, also voted for the most Democrat and Progressive (although not Green) candidates.  This milieu — rich in degrees, Ivy League diplomas, and money — is disproportionately Leftist in orientation.  If you ask them about their political beliefs, they will say that it’s because they’re smart and educated, implying that brilliant mines inevitably embrace Progressivism.

I see things differently, of course.  All of these people are products of America’s colleges, universities, and professional schools, not to mention fine high schools, both public and private, in nice neighborhoods and suburbs.  All of these schools lean Left or have simply stopped leaning and collapsed completely on the Leftist side of education.

So these smart people are right that there’s an inevitability here, but it’s not that the logical output of a brilliant mind is Leftism.  Education certainly matters, but not in the way they think.  The fact is that, if you’re academically smart, you’re more likely to graduate from high school, attend college, and even attend professional school.  In other words, the smarter you are, the longer your exposure to Leftist academic thought will be.  These high earning, upper echelon people didn’t embrace Leftism because their intellectual analysis inexorably led them to it.  Instead, they embraced Leftism because their smarts mean they’ve been steeped in the Leftist stew for infinitely longer than the average American who didn’t go on to a higher degree.

These same people also remind me that academic smarts do not correlate with real life intelligence.  I have no doubt that these people are good lawyers, doctors, CEOs, ambassadors, etc.  What they’re trained to do, they do well.  Outside of their sphere of expertise, however, they’re remarkably naive and intellectually incurious.

Here’s my example for today:  In the wake of the election, I’ve heard five Obama supporters — all of whom also voted for all the California Democrats and for all the California taxes — complain that their taxes are going up next year.  The cognitive dissonance is almost painful.  All of them consistently embrace big spending — and, therefore Obama and his fellow Democrats — because they’ve been trained to believe that the spending on welfare, entitlements, and “select” businesses is a “good thing.”  This is a knee jerk belief.  They will always vote for these “good things,” and for the candidate who promises them.  And they will ignore the rhetoric about higher taxes (Obama was not shy about targeting them as the next big source of funding), and they will ignore fiscal cliffs, and they will ignore plain old common sense that says that someone must pay the piper.

One of the things that made the rounds on my Facebook was a boastful poster saying that those states with the highest number of college-educated people all went for Obama.  The implication is that these smart Blue State people, unlike the ill-educated yahoos in Red States, are the ones who have the brains and ability to understand how Obamanomics will serve America.

What the genius who created this poster missed the fact that these smart Blue States are, not coincidentally, almost all broke.  Thus, of the list above, the following Blue States are amongst those states running the biggest budget shortfalls in America:  Virginia, New Jersey, New York, Vermont, Massachusetts, Maryland, New Hampshire, and Minnesota.  In other words, 80% of the “best educated” states are in dire financial straights.  You’d think that, with all those smart people, they’d be rolling in the green stuff.

It turns out that one of the biggest indicators of Blue state-ness isn’t smarts — it’s brokes.  Here’s the list of the states Obama won, with the ones that have more than a 10% budget shortfall marked, appropriately enough, in red:*

California
Colorado
Connecticut
Delaware
Florida
Hawaii
Illinois
Iowa
Maine
Maryland
Massachusetts
Michigan
Minnesota
Nevada
New Hampshire
New Jersey
New Mexico
New York
Ohio
Oregon
Pennsylvania
Rhode Island
Vermont
Virginia
Washington
Wisconsin

It’s striking that, of the 26 states that gave their electoral votes to Obama, 84% are in debt.  (The perpetually broke District of Columbia also gave its vote to Obama, raising to 85% the number of broke jurisdictions that went true blue.) You’d think that, with all those smart people floating around, they’d manage their money better. In a way, you could say that the Blue States are actually Red States, given their financial hemorrhaging.

By the way, given that we’re still in a recession, it’s true that many Red States are also in debt.  Still, there’s no doubt that the Red States are managing their money better than the ones filled with all those educated Progressive geniuses:

Alabama
Alaska
Arizona
Arkansas
Georgia
Idaho
Indiana
Kansas
Kentucky
Louisiana
Mississippi
Missouri
Montana
Nebraska
North Carolina
North Dakota
Oklahoma
South Carolina
South Dakota
Tennessee
Texas
Utah
West Virginia
Wyoming

As you can see, only 41% of the “dumb” Red States are seriously in the red.  They may not have the degrees, but they have sufficient smarts to control their budgets — which is the fundamental responsibility of all viable governments.

If the election is any indicator, it shows that our education system leaves people incapable of rational economic thought.  This is true even when these same educated people are the ones most hurt by their economic ignorance and Leftist credulity.

_______________________________

*I culled the state deficit information from here.

Cargo cults and E-cons

During WWII, New Guinea natives noticed that whenever Allied soldiers built airfields, airplanes would magically appear out of the sky bearing gifts. Thus, reasoned the islanders, all they had to do was to build airfields to propitiate the gods and magic airplanes would appear bearing gifts. Sounds logical.

Ha, ha, ha…silly islanders! But hold on…who are we to laugh? We practice the very same logic in our society today. Consider the ever-lengthening string of taxpayer-funded environmental “green energy” companies going belly-up busted broke. Here’s a recent list of these taxpayer-funded E-conomic disasters (up-to 34 and growing fast):

http://blog.heritage.org/2012/10/18/president-obamas-taxpayer-backed-green-energy-failures/

Quite clearly, our own environmentally sensitive natives believed that all one needed to do was to build bricks, mortar and steel into modern-looking structures, pick an environmentally friendly “technology” with a cool sounding name and, voila! Magic benefits would come out of thin air – endless BTUs of cheap, pollution-free, guilt-free, Gaia-approved energy that defied the laws of physics, engineering and economics. What did fall out of the air was never-ending wads of taxpayer cash.

Thus did the E-natives expropriate $-billions and $-billions of other peoples’ labor and monies to build their false idols and propitiations to Mother Gaia. And, now…nothing! The money is gone and the losses pile up as useless junk. Just as with the airport idols in New Guinea, Gaia remained strangely silent.

There is, of course, one very big difference between this modern chain of events and that of the New Guinea islanders. And that is this: the sharks and grifters (E-cons) who took their cuts from those $-billions of taxpayer funds in the form of inflated salaries, over-generous pension plans, consulting fees, legal fees, subcontracts, illegal equity payouts, Washington lobbyist budgets, Democrat party donations and union crony deals. Somehow, I suspect that these variables did not factor in the New Guinea islander cargo-cult politics. With bankruptcy, the paper-trail remnants of these shady, underhand practices will pretty much be shredded from public view.

The New Guinea Islanders may have been guilty of faulty logic and misplaced idol worship. The modern day cargo-cult environmentalists have been just as guilty of false-idol worship, but, supposedly, they had “education”, “science” and “reason” on their side.

However, herein lies the critical difference: today’s Gaia’s acolytes have waged a far-more corrupt and damaging game than any New Guinea native ever did, through the enormous waste of resources that can never be recaptured by a world that is currently bleeding capital in a time of desperate need. That lost capital will not be available to drive the economic growth that this world needs.

I can only hope that some day, soon, this growing list of E-con-driven bankruptcies will be submitted to extensive forensic audit in the public domain to cast light on those who benefited from this exploitation of the Gaia cult fantasies and to detail just how the taxpayers got shafted in this growing list of debacles.

Let there be a full accounting.

Then, bring out the pitchforks.

Will Obama’s failure to create genuine wealth finally end Keynesian economics?

Many of Obama’s most educated supporters believe in him because they believe in Keynesian economics.  Central to that belief is the theory that government itself can be an economic engine.  If people aren’t working, have them work for the government or at least have the government fund their ostensibly “private sector” jobs.  This theory holds that all jobs are good jobs, regardless of the employer.  Indeed, ardent Keynesians say the government is both the best employer and economic manager, because it’s big enough to control the entire economy, getting money and jobs where they most need to be.

I turned my back on Keynesian theories when I finally figured out that there’s a difference between jobs and wealth.  As Milton Friedman famously said, if all that you’re interested in is employment, forget shovel-ready jobs and aim, instead, for spoon-ready jobs, which will put more people to work.  At the end of the day, whether you have ten people with digging away with shovels or one hundred people picking away with spoons, all you’ll end up with are holes.  Under this model, any benefits from fuller employment are transitory.

What creates meaningful jobs, the kind that move the economy forward instead of create a static back-and-forth of taxes to the government and make-work to the people, is a dynamic private sector.  That’s where you get innovation, imagination, and energy.  Under this free-market economic model, the government’s job is to prevent abuse.  It steps aside to allow the greed that’s necessary for capitalism, while acting affirmatively to prevent fraud, abuse, and other kinds of things that interfere with the marketplace.

During the debate, Romney was referring to this policing role when he said some regulation is not only good, but actually necessary.  It’s when the government starts managing the economy that wealth vanishes.

If you have a rich country (or, as was the case with Europe when America paid for her Cold War security, a sugar daddy), you can keep the back-and-forth of taxes and government make-work going for quite a long time.  Eventually, though, you’re left with jobs, but no wealth.  And no wealth means no taxes, which means no jobs.  Welcome to Greece.

What Romney has to do during the next month is convince undecided voters, or worried voters who aren’t as decided as they thought they were, that, while, Obama’s policies can and will create jobs (as today’s anemic, and suspect, job reports revealed), his policies not only cannot create wealth, they are antithetical to wealth creation.  I think this ad is a good start:

“Quantum of Easing”

Another American Crossroads ad in a James Bond style, this one attacking Obama’s inflationary policies:

It’s clever, funny, and understandable, so please consider sharing it with others.  The election clock is ticking, and it’s up to citizens to counter the media’s all-out push for Obama.

Why redistribution fails

Trust Thomas Sowell to explain why government-forced redistribution always fails, and to do so in language so clear even a child educated in public schools can understand:

You can confiscate only the wealth that exists at a given moment. You cannot confiscate future wealth — and that future wealth is less likely to be produced when people see that it is going to be confiscated. Farmers in the Soviet Union cut back on how much time and effort they invested in growing their crops when they realized that the government was going to take a big part of the harvest. They slaughtered and ate young farm animals that they would normally have kept tending and feeding while raising them to maturity.

People in industry are not inert objects either. Moreover, unlike farmers, industrialists are not tied to the land in a particular country.

Russian aviation pioneer Igor Sikorsky could take his expertise to America and produce his planes and helicopters thousands of miles away from his native land. Financiers are even less tied down, especially today, when vast sums of money can be dispatched electronically to any part of the world.

That’s it.

Romney’s problem as a candidate is that he does not know how to state this simple proposition and, instead, falls back on Hallmark-esque platitudes.

We need your help getting the bad employment information past the media’s Iron Curtain

The Romney campaign looked at he numbers.  Will the Obama Media be able to hide this from the American people?

23,136,000: The Number Of Americans Who Are Unemployed, Underemployed, Or Have Stopped Looking For Work. (Bureau Of Labor Statistics, Accessed 9/7/12)

12,544,000: The Number Of Unemployed Workers. (Bureau Of Labor Statistics, Accessed 9/7/12)

8,031,000: The Number Of Workers Working Part-Time For Economic Reasons. (Bureau Of Labor Statistics, Accessed 9/7/12)

5,033,000: The Number Of Workers Who Have Been Unemployed For 27 Weeks Or Longer. (Bureau Of Labor Statistics, Accessed 9/7/12)

1,043,000: Construction Jobs Lost Since President Obama Took Office. (Bureau Of Labor Statistics, Accessed 9/7/12)

582,000 Manufacturing Jobs Lost Since President Obama Took Office. (Bureau Of Labor Statistics, Accessed 9/7/12)

368,000: Workers That Dropped Out Of The Labor Force In August. (Bureau Of Labor Statistics, Accessed 9/7/12)

261,000: Jobs Lost Since President Obama Took Office. (Bureau Of Labor Statistics, Accessed 9/7/12)

41,000: Downward Revision Of Jobs Created Over The Last Two Months. (Bureau Of Labor Statistics, Accessed 9/7/12)

15,000: Manufacturing Jobs Lost In August. (Bureau Of Labor Statistics, Accessed 9/7/12)

1981: The Last Time The Labor Force Participation Rate Was At Its Current Level Of 63.5 Percent. (Bureau Of Labor Statistics, Accessed 9/7/12)

43: Consecutive Months The Unemployment Rate Has Remained Above Eight Percent. (Bureau Of Labor Statistics, Accessed 9/7/12)

39.2 Weeks: The Average Duration Of Unemployment – Nearly Double The 19.8 Weeks When President Obama Took Office. (Bureau Of Labor Statistics, Accessed 9/7/12)

14.7 Percent: The Real Unemployment Rate, Including Those That Are Working Part-Time Due To Economic Reasons. (Bureau Of Labor Statistics, Accessed 9/7/12)

11.2 Percent: The Unemployment Rate Had Labor Force Participation Remained Steady Since President Obama Took Office. (American Enterprise Institute, 9/7/12)

8.4 Percent: The Unemployment Rate Had Labor Force Participation Remained Steady From July. (American Enterprise Institute, 9/7/12)

8.1 Percent: The Unemployment Rate In August. (Bureau Of Labor Statistics, Accessed 9/7/12)

7.8 Percent: The Unemployment Rate When President Obama Took Office. (Bureau Of Labor Statistics, Accessed 9/7/12)

5.4 Percent: The Unemployment Rate President Obama’s Advisers Predicted If We Passed His $787 Billion Stimulus. (Christina Romer and Jared Bernstein, “The Job Impact Of The American Recovery And Reinvestment Plan,”1/9/09)

Since we know the MSM won’t report these numbers, please do what you can to get them past the media Iron Curtain.

Two videos on the economy — funny in presentation, depressing in effect *UPDATED*

The first video has Andrew Klavan explaining Obamanomics.  The second video shows Obamanomics in action.  The first video is funny and depressing; the second video startled a nervous giggle out of me, but mostly made me deeply fearful for our future:

UPDATE: I need to add another video to this mix, one that shows Jennifer Granholm hysterically lauding throwing taxpayer money at failing industries:

Which party is most likely to reverse course before we hit the economic iceberg? (Hint: it’s not the Democrats)

Danny Lemieux left a link to this video in the comments.  I think it deserves its own post.  You might also want to share it with your friends.  It’s studiously non-partisan, so one hopes it will make liberals thoughtful, rather than defensive.

Incidentally, if any of your liberal friends think the answer is just to tax the rich, Iowahawk already considered that possibility and concluded — based on actual math — that it can’t be done.

For those who panic when numbers show up, Bill Whittle made a nice video based upon the Iowahawk post:

Oil boom!

Just recently, I happened to drive through the southern end of the Bakken Field in North Dakota on my way to Montana. I can tell you that an oil boom in the making is absolutely awesome to behold! There is black gold in them thar hills!

The I-94 freeway was a solid line of trucks ferrying equipment to the oil fields. Low-level hotel and motel rooms are booked 4 years out and cost in the upper $-100s per night. Everywhere over North Dakota’s (very attractive, in my view) rolling western plains you see oil storage tanks and pumps blending (yes, blending…they are not ugly or obtrusive) in the countryside. The crush of people from all over and construction in small-but-fast-growing towns like Dickinson and Williston is energizing. Oh, if I was young again…

I met a semi-retired petroleum engineer in Alberta that was working on the Canadian tar sands development. I asked him what he had heard regarding the size of the Bakken oil field. He indicated that, pessimistically, it contained 1x the reserves of Saudi Arabia, while the optimistic projection was 3x the Saudi oil reserves. Plus, there are all the other oil fields out there waiting to be developed (e.g., Western Colorado) and the natural gas fields scattered throughout the country.

Interestingly, he also told me that he thought the Obama administration made the right call on the Keystone Pipeline in that the forced redirection of the pipeline would be much more responsible (environmentally speaking), given the shallow ground water tables in Nebraska.

I don’t believe that this can be stopped. Cheap energy is at hand and it will change our country and the world.

The intersection of politics and the economy does affect the recovery

A few days ago, I challenged at HuffPo post that saw a die-hard Progressive repeat economic talking points that have proven, rather consistently, to be failures in the real world.  I wish that, when I wrote that, I’d already read More Evidence On What Is Holding the Economy Back, at Economics One.  Using simple language and pictures, it proves that it’s not merely coincidental that Obama’s governance is seeing an unusually slow, tepid recovery.

Economic principles made simple

I’ve heard and probably posted this story several times before (and it may originate with Arthur Brooks), but I liked the five points tacked on at the end so much, I’m sharing the whole thing with you once again:

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, “OK, we will have an experiment in this class on socialism”.. All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A…. (substituting grades for dollars – something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied ‘hard’ were upset and the students who studied ‘little’ were happy. As the second test rolled around, the students who studied little had studied ‘even less’ and the ones who studied hard decided they wanted a free ride too so they studied ‘little’.

The second test average was a ‘D’. No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that “socialism” would also ultimately ‘fail’ because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.

Remember, there IS a test coming up. ” elections sometime soon – perhaps the sooner the better”

Your chance to have YOUR say.

These are possibly the 5 best sentences you’ll ever read and all applicable to this experiment:

1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

2. What one person receives without working for, another person must work for without receiving.

3. The government cannot give to anybody anything that the government does not first take from somebody else.

4. You cannot multiply wealth by dividing it!

5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.

Can you think of a reason for not sharing this? Neither could I.

Are we as a society obligated to rescue people (banks or lenders) from their stupid mistakes?

My local Marin paper recently ran a story that showed paralyzing stupidity on the part of both a bank and an individual couple.  The law favors the bank, which was insanely greedy and stupid, so Occupy Marin is stepping up to help the couple, which was also insanely greedy and stupid.  I feel for a couple that might be homeless, but this is truly a “plague on both your houses” situation.

The story started a few years ago when the bank and the couple got together to be as dumb as vast collection of posts:

Graybill, a contractor and cabinet maker, said he and his wife, an interior designer, lost their home due to two home equity loans they took out. He said the loans were issued by World Savings, which at the time held the mortgage on their house. World Savings was bought by Wachovia in 2006, and Wells Fargo merged with Wachovia at the end of 2008.

Graybill said that with the encouragement of a World Savings employee they took out a second equity loan of $600,000 — even though the house had most recently been appraised for just $243,000. Graybill said the World Savings employee lied on the loan application indicating that the couple had two new cars and $100,000 in home furnishings, which they didn’t have. The loan featured an adjustable interest rate and balloon payments.

“We were foolish. We shouldn’t have borrowed the money,” Graybill said. “We shouldn’t have used our home as a checkbook.

“My parents grew up in the Depression and they never would have done what we did,” Graybill said. “My wife and I, like so many others, were betting that things would continue to get better and we would be able to turn the situation around.”

The above set of facts raises two questions:  What in the world were Graybill and his wife doing taking out a loan that was more than twice the value of the house?  And what in the world was a bank doing issuing a loan that was more than twice the value of the house?

The lender, having successfully instituted foreclosure proceedings, is now trying to evict the couple.  That it has the legal right to do so does not make any better its original stupid decision.  The property is still worth way less than the outstanding debt, so the lender is still in the hole.  Meanwhile (and this is why the story hit the news), Occupy Marin is trying to force the bank to stop eviction proceedings, allowing the debtors to keep their home.  Considering that these people took out the world’s dumbest mortgage, I don’t see that they deserve that kind of favorable treatment.

Ever since the housing market collapsed, both sides of the political aisle have been criticizing the banks’ greed.  Loans such as this one certainly lend credence to that line of thinking.  Of course, Congress created this nightmare when it forced banks to give bad loans so that “everyone” could own a home.  Once the banks got a system in place for giving bad loans and then immediately selling them, it had an incentive to create and sell as many bad loans as possible. That doesn’t excuse these deleterious bank practices, but it explains them.

But what’s the individual’s excuse?  Why in the world would people burden themselves with debt that they cannot possibly pay off?  These people admitted that they used their house as a check book.  Well, fine.  That’s a decision you’re allowed to make, but should you be able to come back later crying that your decision was a stupid one, so now the world has to support you?

Honestly, when I read stories such as this one, I see red.  I get angry at government policies that encourage profligate banking practices; I get angry at banks that use those same policies to justify almost criminal banking decisions; and I get angry at individuals who make foolish financial decisions and then expect the world to bail them out.

Sadly, at the end of the day, the politicians keep pandering and destroying, while the banks and the borrowers get rescued as always by the American taxpayers.  Which leaves one thing hanging:  when the taxpayers run out of money, who’s going to rescue them?  Germany?  I don’t think so.

Romney is proving to be a predictably bland candidate but honest-to-God, it would be so wonderful to have our chief executive officer be someone who understands finances at both a theoretical and practical level.

Let’s do the time warp again — Progressives keep urging those failed economic policies

The Huffington Post is one of the ugliest websites I’ve ever seen.  I’m not talking about content (although I’ll get to that), but about its layout.  The left-most column (and that turns out to be a very clever pun on my part) actually has some visual stability, insofar as it allows the hapless visitor to grasp what content the various blogs are offering.  The central column and right columns, however, are a disorganized amalgam of pictures and one- or two-word summaries of underlying stories.  Even I, an adept at reading the internet, find that these summaries range from cryptic to unintelligible.  Even worse, they keep resetting automatically, so it’s difficult to find a story that, one or two minutes before, might have caught my interest.

Having had occasion to read the substantive articles at HuffPo, I’m beginning to wonder whether this home page chaos is intentional, insofar as it’s meant to keep people away from content.  I mean, if I was the one publishing Robert Kuttner’s article about the American economy, I’d be so embarrassed as the publisher that I too would want to use subterfuge and prestidigitation to keep people away.

Kuttner, bless his little ol’ heart, is someone who seems to have missed the last 80 years.  More than that, he’s missed any sophisticated analysis of the last 80 years.  His economic understanding is rooted in post-New Deal 8th grade American history textbooks that assured credulous youngsters that even FDR’s best efforts at centralizing America’s economy failed, making WWII an economic necessity.  I kid you not:

Something similar [to today's economic problems] happened in the late 1930s. Though economic growth returned, it wasn’t strong enough to repair the damage of the Great Depression or create enough jobs. Despite the New Deal, unemployment remained stuck at around 12 percent.

World War II solved the problem — it was the greatest accidental economic stimulus in economic history. It put people back to work, retrained the unemployed, and recapitalized industry. But today, there is nothing in the wings waiting to play the role of the Second World War.

During the war, federal deficits averaged more than 25 percent of GDP, nearly triple today’s deficits. But that’s what it took to blast out of the depression. After the war, high growth rates paid down the accumulated national debt.

Anyone who had read Amity Shlaes’ very accessible The Forgotten Man: A New History of the Great Depression knows that Kuttner’s view of the 1930s is based upon Progressive propaganda, rather than economic facts. Shlaes cut through this gauzy reminiscent haze about the glories of New Deal Democratic politics, and looked at the economic numbers in the 1930s.

With actual data, Shlae’s ably demonstrates that Hoover, like Roosevelt, tried to manage the post-crash economy, and with equally deleterious results. Fortunately, because he was essentially conservative, Hoover’s efforts were tentative, and therefore not deeply destructive.  Sadly, the 1932 election came along before the economy had a chance to right itself from Hoover’s tepid efforts at market management.

With FDR’s New Deal firmly in place, there was no hope. FDR sucked money out of the economy and into the government, paralyzing wealth creation.  Since this economic experiment was the first of its kind in America, however, and because people bought into FDR’s ebullience and optimism (something sadly lacking in the dour, accusatory man living in the White House today), people cheered the sizzle and ignored the fact that it was, in fact, a scratchy recording, unaccompanied by actual steak.

When World War II came along, it had the virtue of providing almost full employment for the American public. Significantly, although the government was writing the checks, this wasn’t make-work. The U.S. needed to build ships, tanks, planes, and weapons, and it needed bodies in the field. In other words, this was the rare occasion when a centralized command and control economy was geared towards efficiency, rather than simply producing low employment numbers.

Normally, the opposite is true — that is, output is irrelevant — in a government-run economy. Milton Friedman nailed the problem with a government’s make-work “economy” when he delivered his pithy challenge to the whole notion of “shovel-ready jobs”:

Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”

Busy work does not create economic dynamism. It simply allows a government to boast about its low unemployment. Eventually, the government runs out of money, and then you have . . . Greece.

What Kuttner also fails to grasp with his erroneous Depression/WWII analysis is that part of the US’s enormous economic success in the post-war era was the fact that it was the only Western or Eastern country that hadn’t seen its infrastructure (and population) destroyed by the War. England and Germany, which had led the free world in manufacturing before the War, had seen virtually every one of their factories wiped out. Those few English factories that survived the war were firmly rooted in the 19th Century, and the stagnant socialist economy that followed the war meant that these factories stayed mired in the past.

WWII  also spelled the end of Empire.  England and other former imperialist powers didn’t have their previous unemployment safety valves, nor did they have ready access to the rare materials that had once powered their manufacturing.

Russia had lost perhaps 20,000,000 people, which was a heavy burden when added to the 20-30,000,000 that Stalin killed in the 30s. Add to this the inefficiencies of a Communist “economy,” and you can see that Russia wasn’t going to stand in America’s way.

In other words, it wasn’t just that America was so good after the war; it was also that everything else was so bad. Right now, under Obama, we have the worst of all possible worlds, which is that both America and the rest of the world are in dire straits. By copying the world’s disastrous economies, America is unable to rise above them.

In addition to misunderstanding the 30s, 40s, and 50s, Kuttner seems to have slept through the 80s and the aughts. I vividly remember Jimmy Carter’s malaise economy, consisting in equal parts of inflation and stagflation. I remember, too, the uproar when Reagan insisted on unleashing capitalism’s power. Sublimely locked into my juvenile Leftism, I absolutely refused to acknowledge that it was Reagan’s commitment to the marketplace that enabled me, a young lawyer, to step into a thriving economy, complete with an obscene salary. I’m glad to say that, in 2001, when Bush pushed through his tax cuts, I’d matured enough to realize that the best way to allow economic growth is to trust “We, the people” with the money, leaving to the government the job of creating a stable environment that doesn’t see wealth creators (individuals and businesses) constantly trying to hide their money from an avaricious, inefficient, frequently corrupt bureaucracy.

Working from a mountain of ignorance, amnesia, misconceptions, and misapprehensions, Kuttner assures HuffPo’s hapless readers that the only way to end Obama’s economy is to raise taxes on the producers and have the government provide jobs for the unemployed — unaware, apparently, that this is precisely what Roosevelt did in 1932, and what led to a 12 year long Depression:

What’s needed today is a massive investment program, to shift the economy to a clean energy path, modernize infrastructure, increase productivity — and along the way create millions of good jobs and restore consumer purchasing power. Then, the vicious circle could be reversed.

The problem is that neither party is proposing such a program. It is entirely outside mainstream debate.

President Obama is willing to have the federal government spend more money. But he has partly bought the story that deficit reduction has to come first. The Republicans would further gut the public sector.

Contrary to the conventional view that deficit reduction would somehow “restore confidence” and increase business investment, that’s not how economies work. Businesses invest when they see customers with open wallets. Though the Congressional Budget Office projects higher growth returning around 2014, it bases these projections on a “return to trend.” There is no plausible story about where the higher growth will come from.

Kuttner is certain that, if Obama can just get four more years, everyone in America will eventually get a spoon. Then the American people can start digging their little holes, and the government can boast about its Soviet-style full employment.

A couple more fallacies in Kuttner’s thinking:

First, Kuttner, who insists that WWII was the best economic engine possible, was against the War in Iraq. Why was that? He should have been celebrating the economic opportunities, and shilled it as WWIII.

Second, Kuttner, in common with all the Progressives, keeps nattering on about revitalizing America’s infrastructure with “green” energy products. He makes this argument even though (a) the government’s “green energy” bets have failed at a terrible cost to the American budget (Solyndra, anyone?); and (b) the strangulation of rules and regulations (especially environmental rules and regs) in the last 30 years means that it’s virtually impossible to complete a big infrastructure job, or even to begin one.

As to the malignant effect of hyper-regulation, here’s just one example proving that the Hoover Dam era is dead and gone: The San Francisco-Oakland Bay Bridge partially collapsed in 1989, when the Loma Prieta earthquake struck. That collapse proved conclusively that the original eastern half of the Bridge (built in 1936) was a seismic disaster.

In a pre-regulatory era, it’s very likely that the Bridge could have been rebuilt, both quickly and economically. In modern American, though, by the time the new structure is completed (maybe) in September 2013, it will have taken 24 years to rebuild just half the bridge, at a cost no less than $6.3 billion — a mere $6.1 billion dollars over the original estimate.

Kuttner’s post is the triumph of theory over fact. Kuttner was clearly the good little boy back in the 1970s, carefully studying his generic history textbook, and locking away in his brain forever all the Leftist fallacies about economic growth and the glory days of a government controlled economy. He is the poster child for the fact that, while the first Obama term has pushed us to the edge of the economic cliff, a second one will most assuredly push us over.

The forgotten lunch tab and what it says about personal responsibility in the age of Big Government

ABC reports that President Obama treated two service men and two local barbers to a high-fat Father’s Day lunch (high-fat, at least, for Obama), and then left without paying the tab:

Amid the bustle of President Obama’s surprise stop for barbecue Wednesday the White House apparently overlooked one key detail: the bill.

Celebrating Father’s Day early, the president had lunch with two service members and two local barbers at Kenny’s BBQ on Capitol Hill.

As the group chatted about fatherhood, the president enjoyed a steaming plate of pork ribs with hot sauce, collard greens, red beans and rice and cornbread.

The bill for the president and his four guests was $55.58, but was left unpaid at the point of sale, according to pool reports.

The White House corrected the oversight and settled up the tab by the end of the business day.

I don’t for one minute blame Obama for forgetting to pay the tab.  That’s not his job.  But it’s apparent that in the swirl of government employees constantly circling around him, no one felt that it was his or her responsibility.  Isn’t that whole scenario a perfect paradigm for government?  Obama, the service men, and the barbers were all happily dining on someone else’s tab — and then the person who was supposed to pay didn’t.

(It’s ironic, really, that this happened within a couple of days of Obama’s sudden obsession with paying the tab at a restaurant:

“I love listening to these guys give us lectures about debt and deficits. I inherited a trillion dollar deficit!” he said. Obama compared Republicans to a person who orders a steak dinner and martini and then, “just as you’re sitting down, they leave, and accuse you of running up the tab.”

I mean, isn’t this better than a film script?  Within a week of accusing the opposing political party of hypothetically stiffing the American people at a restaurant, Obama actually stiffs an American restaurant owner.)

Although not directly on point, to the extent we’re talking about personal responsibility, this whole scenario is analogous to Hillary Clinton’s “It takes a village to raise a child” shtick from the 1990s.  The expression is true, of course, if there’s a real village.  I live in a very tight neighborhood where I know all the kids and all the parents, and they all know each other.  If a kid does something wrong — drinking, drugs, etc. — he can be assured that his parents will know within a day or two.  The children know that every parent in the neighborhood is watching out for them.  The kids also watch out for each other.  We are a genuine, organically grown community, based upon proximity, shared values, and social connections.  We all look out for each other, because we all know each other, and we know what matters to the other families.

Hillary, though, wasn’t envisioning a network of small communities that take care of their own.  That world view smacks of conservative thinking.  Instead, she pretended that an impersonal, distant government was precisely equivalent to that village.  Her promise was that, if we paid enough in taxes to create the Nanny state, we would get the “village” without the effort of looking after our own. Almost daily stories out of England about horribly abused children who slipped through the cracked network of social services tells us just how well that “government village” works.

The Democrat desire to avoid personal responsibility goes all the way up the ladder to the top man, the guy in the White House.  Obama avoids personal responsibility like the plague and is beginning to get mocked for that, even by his own party.  But why are his compadres surprised?  The entire Democrat ethos is based upon eating the food and having someone else pay the bill — and then expressing surprise when the bill goes unpaid.

To skip to another scenario (this is the scenario equivalent of mixed metaphors), think back to the last CPR class you took.  I always forget the number of pumps and breaths (and understand that they’ve now simplified it down to a Bee Gees song).  What I do remember, though, is that the one thing you should never do is holler out a generic “Call 911!”  This makes everyone responsible for making that call and experience has shown that if everyone is responsible then no one is responsible.  Instead, you have to tag someone.  “YOU, the guy in the black shirt, call 911.”

The same principle of failing to invest specific people with responsibility — and thereby creating a responsibility vacuum — holds true when the government sucks responsibility away from people and distributes it into its vast machinery.  Suddenly, individuals aren’t responsible — and you can’t find the clerk with the cash when you need him.

My sister once worked with a secretary who felt put upon.  No matter what one asked her to do, she came back with a single answer:  “That’s not my job, man.”  Since she was working for a private company, she was fired as soon as the company felt that it had protected itself against a potential wrongful discharge lawsuit.  In the federal world, this same gal would not only have lifetime employment, she’d be teaching taxpayer-funded seminars on avoiding direct responsibility for anything.

It starts at the bottom, with Barack Obama’s minions in the restaurant saying “That’s not my job, man.”  And it ends at the top with Barack Obama, speaking of the American economy and saying, “Bush started it.  That’s not my job, man.”

Americans hunger to take on the job of creating work and wealth.  Isn’t it time to let them?

Government perverts the marketplace, destroying true value analysis.

I have been following with interest the running comment thread on my post asking about whether electric cars are actually cleaner, or if they just shift pollution outside of the consumer’s view.  Very quickly, and probably inevitably, the post shifted to a cost-benefit analysis, which aimed to compare fossil fuel to alternative fuels.  Just as quickly, each side started accusing the other of hiding the real price of these energy sources behind government funding, whether in direct funds (alternative energy) or tax benefits (fossil fuels and alternative energy).

After reading everything, my question about the clean-air benefits of electric cars remains unanswered.  I don’t think anyone delivered a killing blow about electric cars’ virtues or failures.  What is patently clear, though, is that government interference perverts the marketplace, preventing a true analysis of each energy source’s true costs and, by extension, its true benefit in decreasing pollution.  It’s impossible to tell whether there wouldn’t be more utility in putting energy into clean methods for extracting, refining, and using fossil fuels, as opposed to having the government prop up the creation and use of alternative energy.  Only the marketplace can provide this true value analysis, and the government is completely corrupted the marketplace.

If I was king of the world, I would do away entirely with all direct or indirect subsidies.  Only in that way can we measure what really works.

Edward Conard makes sense — no wonder the Left hates him

The New York Times has a long article about Edward Conard, a former Bains partner, who makes the case — a compelling one, I believe — that in America, the wealthy aren’t parasites, they’re economically useful.  In a stagnant, agrarian class society, the wealthy simply live at the top, feeding off the poor.  In a dynamic marketplace, however, the wealthy don’t simply hoard their money in bags of gold and jewelry.  They spend as much as they are able (and, no matter how extravagant they are, it isn’t that much relative to their wealth), and they invest the rest.  In addition, because it’s their money, not other people’s money that they are investing, they invest it with an eye to market efficiency and profitability, rather than wasting it on political correctness and drowning it in bureaucracy.  It’s that last point that explains why the wealthy better than the government when it comes to creating wealth, not just for themselves, but for others.

Conard spells this out in his new book, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong.  This may be a good vacation read for me.