Steve Forbes on Health Care

Read this article on Health Care by Steve Forbes.

It succinctly describes the problems with Obama's socialized medical scheme. It also explains the vastly superior free market alternatives to his plans. I agree with his sentiments to the word.

I Will Never Buy a GM or Chrysler Again

Today, Chrysler announced a deal with the U.S. Treasury to avoid bankruptcy. The deal gives the United Auto Workers' union 55% ownership of the firm. The federal government would own 10%, and Fiat would take 35%.

What does this mean? The UAW and the federal government will run the firm....into the ground. Chrysler, which has almost zero chance of being profitable now that they are run by two organizations that hold profitability last on their list of priorities, will be a function of the government. The UAW is too interconnected with the White House and the Democratic party and will owe its allegiance to them. Make no mistake, you and I will now have to subsidize Chrysler for years to come. These taxpayer dollars will then be turned around in the form of multi-million dollar donations to the Democratic Party.

General Motors is also on the same path. They are now entertaining a deal with the government that Larry Kudlow details this way: (HT EPJ)

What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they’re getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they’re getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization.

That's right. The U.S. Federal Government will own 50% of the company. The UAW will own 40%. Political interference by the White House, the Democratic congress, and the UAW will prevent GM from ever becoming profitable again without government subsidies. Billions of your tax dollars will go to a company that will turn right around and give tens of millions to Democratic party candidates and our current President to help them stay in power.

If you believe in a truly free America you will do the same. Never buy any of their cars ever again.

4 out of 5 Ain't Bad - My Housing Predictions

In February of 2008 I made some predictions on 5 major housing markets as to their price falls from the then most recent data on the S&P Case Shiller.

Now, using the most recent data I've been able to check those predictions. Four out of five are spooky accurate, so I just had to brag.

Predictions for total price drop:

Miami – 32% drop
Los Angeles – 31%
Tampa, FL – 28%
Las Vegas – 28%
Washington – 24%

Actual

Miami - 33% drop
Los Angeles - 30%
Tampa, FL - 27%
Las Vegas - 38%
Washington - 23%

Note: For a fee I will send you lottery number predictions and perform Taroh card readings as well.

The Fed's Quantitative Easing is Having a Curious Effect

On March 18th, the Federal Reserve announced that it was going to perform 'Quantitative Easing'. The plan is to buy treasury bonds on the open market. This would have two effects. First, it should increase the money supply which does provide, in fact, a temporary boost to output (although a misallocation of resources that reduces long term growth). Second, it should lower interest rates, obstensibly to lower mortgage rates and induce consumers to purchase some of these unwanted houses around the country.


Well, an interesting thing has happened since this announcement. 30-yr Treasury yields have been rising and are now at their highest point so far this year. Is this a trend? Is this the beginning of the dramatic and inevitable rise I expect in borrowing costs? We'll see...




Source


Why is This Happening?


China is selling long-term U.S. Treasury Bonds in favor of short term t-bills. This has driven yield on short term t-bills down while putting upward pressure on yields for treasury bonds.


According to Bloomberg:


Rates on three-month bills turned negative in December for the first time since the government began selling them in 1929 as investors sacrificed returns to preserve principal. After increasing at the start of the year, rates have dropped 0.20 percentage point since the beginning of February to 0.13 percent.

Demand for bills is rising again because investors including foreign central banks are snapping up the shortest- term U.S. securities as the Federal Reserve buys Treasuries to drive down borrowing costs in a policy of so-called quantitative easing. China, the largest U.S. creditor, with $744 billion of debt, has questioned the practice and shifted purchases to bills from longer-maturity securities.

“There’s a group of investors out there who are looking at what the Fed is doing and the policy action they’ve taken and the asset purchases, and saying ultimately this is inflationary,” said Stuart Spodek, co-head of U.S. bonds in New York at BlackRock Inc., which manages $483 billion in debt. “You’re going to invest in very short-term bills because you absolutely need not just the quality but also the absolute liquidity.”

China bought $5.6 billion in bills and sold $964 million in U.S. notes and bonds in February, according to Treasury data released April 15. It was first time since November that China purchased more bills than longer-maturity debt.

There is Something Terribly Wrong in this Article

An Article from the New York Post entitled "CEO Stressed Out" opens with this sentence:

Citigroup CEO Vikram Pandit's job security is increasingly in jeopardy as momentum grows in Washington to oust him.

I love how someone like Tim Geithner who has never worked for, much less run, a private firm in his professional life now chooses CEOs for major American companies.

There's also a word for this kind of government behavior: Fascism.

Mises Conference on the Great Depression

On Saturday, May 30th, the Ludwig Von Mises Institute is hosting an event in Fort Worth, Texas dubbed "The Great Depression: Then and Now". A good friend of mine is planning to go, so I thought I would invite my readers to attend as well. (All 20 of you!)

There are several great speakers, including my friend* Bob Murphy, author of the new The Politically Incorrect Guide to the Great Depression and the New Deal. Bob seems to be a laugh riot from the youtube videos I've seen of his other speaking engagements.

Others Speakers are:

Walter Block
Thomas DiLorenzo
Jeffrey Tucker
Thomas E Woods, Jr. (author of the NYT bestseller Meltdown)

What's great about this conference?

First, it's only $75, which is a bargain. Second, if it's anything like the similar Mises Circle in Houston the crowds are usually small so if you wanted to get a book signed or ask some questions that is available. Third, I'll be there! If you let me know that you are going I may get a group together the night before to have dinner where you'll get to meet my darling wife and kids.

Reservations

To register, you can go here, and if enough of you mention my name in the comments I may be able to negotiate a reserved table closer to the front.

* I'm not sure how you refer to someone with whom you have exchanged a number of e-mails and debated on a blog. My bar for internet "friend" is whether they consistently respond to my e-mails, which he does.

I Need a Balanced Budget, Stat!

Dr. Alan Parks, MD, is the founder of Americans for a Balanced Budget Amendment. He sent me an e-mail notifying me of his new website. I perused for a bit, and found it worth mentioning. He's already gathered an endorsement from noted personal finance guru Dave Ramsey.

Dr. Parks ran across this post of mine in support of a balanced budget amendment. I tend to channel William Buckley when I'm emotional, as my vocabulary soars above my standard typo ridden fare. Looking back at it, I'm still pleased with it.

At any rate, check out Americans for a Balanced Budget Amendment, and lend your support.

Update on My Paranoia Front

Before I took my two week break, I wrote a post about my increasing concerns that the Left was trying to build a case to demonize the non-Left.

I wrote about this post where the young man in Pittsburg, PA, shot to death three police officers. I predicted it would show up in op-eds as further "proof" that those opposing Obama were dangerous. Refreshingly, it didn't reach any of the major papers that I peruse. It did however reach some left wing bloggers. Such as author David Neiwert who tries to link the shooter to conservative commentator Glenn Beck and also FoxNews.

This guy is a nobody, but I started reading the now infamous assessment from the Department of Homeland Security, where they list people who are pro-life, anti gun control, military veterans, and those who are generally anti big government as potential terrorists.

This is what it says on page 3:

A recent example of the potential violence associated with a rise in right wing extremism may be found in the shooting deaths of three police officers in Pittsburgh, Pennsylvania, on 4 April 2009.

So much for "weaving a narrative" to demonize, now it is explicitly linked by official government documents.

Texas is the Future

Fortune Magazine put out its annual list - The Fortune 500.

Last year, the state of Texas pulled out into the lead against New York by having 58 of the 500 largest companies in the U.S. New York fell to second with 55. This year, New York actually gained one, surprising given their financial problems extending well back into 2008. Texas, however, placed 6 additional companies on the list, for a total of 64.

Within Texas, the major metropolitan regions had these totals:

Houston 29
Dallas/Fort Worth 25
San Antonio 5
Austin 3
Pittsburg, El Paso 1 each

Here's a chart with a little historic data:

Bad News

Two articles from Saturday have raised the hairs on the back of my neck.

First, is the incident of three police officers being shot in Pittsburgh. The piece of information headlined at Drudgereport added that he, the gunman, "feared the Obama administration was posed to ban guns. "

I wrote here, that I was beginning to feel that the Left was beginning to weave a narrative to demonize conservatives and anyone not supporting Obama. Robert Reich's freightening mischaracterazation was this:

Make no mistake: Angry right-wing populism lurks just below the surface of the terrible American economy, ready to be launched not only at Obama but also at liberals, intellectuals, gays, blacks, Jews, the mainstream media, coastal elites, crypto socialists, and any other potential target of paranoid opportunity.

This story just broke on Saturday night. If someone doesn't write an op-ed linking these killings to a demonization this coming week, I'll be surprised. If you see one, let me know. Not on this blog, but privately I have expressed some concern to friends that a mass shooting or domestic terrorist event commited by a crazed anti-government type will lead to a broad demonization of the non-Left in the U.S.

Second, is this one at the WSJ:

I must be naive. I really thought the administration would welcome the return of bank bailout money. Some $340 million in TARP cash flowed back this week from four small banks in Louisiana, New York, Indiana and California. This isn't much when we routinely talk in trillions, but clearly that money has not been wasted or otherwise sunk down Wall Street's black hole. So why no cheering as the cash comes back?

My answer: The government wants to control the banks, just as it now controls GM and Chrysler, and will surely control the health industry in the not-too-distant future. Keeping them TARP-stuffed is the key to control. And for this intensely political president, mere influence is not enough. The White House wants to tell 'em what to do. Control. Direct. Command.

That's right. The government is not allowing banks to pay back the TARP money. The firm grip that Obama and his Congress have on Wall Street is not going to be relinquished.

The author, who is English goes on:

After 35 years in America, I never thought I would see this. I still can't quite believe we will sit by as this crisis is used to hand control of our economy over to government. But here we are, on the brink. Clearly, I have been naive.

Pat Buchanan becomes an Austrian

Pat Buchanan has a great column today at Human Events. He has apparently just read Tom Woods' Meltdown. A little secret: Tom Woods is an Austrian economist. Pat Buchanan seems to have discovered the Austrian Business Cycle Theory for the first time. The fact that the book has made the New York Times Best Sellers list (#18), and the fact that mainstream Republican thinkers are embracing it, is a good sign.

He seems most taken with Woods' account of the severe 1920-21 depression, where the U.S. quickly got out of it by doing what? NOTHING!

The "forgotten depression" of 1920-21 was caused by a huge increase in the money supply for President Wilson's war. When the Fed started to tighten at war's end, production fell 20 percent from mid-1920 to mid-1921, far more than today.

Why did we not read about that depression?

Because the much-maligned Warren Harding refused to intervene. He let businesses and banks fail and prices fall. Hence, the fever quickly broke, and we were off into "the Roaring Twenties."

He also rebuts the myth that Herbert Hoover was a laissez faire ideologue who refused to intervene as the economy began to tank

Herbert Hoover, contrary to the myth that he was a small-government conservative, renounced laissez-faire, raised taxes, launched public works projects, extended emergency loans to failing businesses and lent money to the states for relief programs.

Hoover did what Obama is doing.

Indeed, in 1932, FDR lacerated Hoover for having presided over the "greatest spending administration in peacetime in all of history." His running mate, John Nance Garner, accused Hoover of "leading the country down the path to socialism." And "Cactus Jack" was right.

Finally, he gets to the myth that World War II ended the great depression:

But how can an economy be truly growing 13 percent a year, as the economists claim, when there is rationing, shortages everywhere, declining product quality, an inability to buy homes and cars, and a longer work week? When the cream of the labor force is in boot camps or military bases, or storming beaches, sailing ships, flying planes and marching with rifles, how can your real economy be booming?

It was 1946, a year economists predicted would result in a postwar depression because government spending fell by two-thirds, that proved the biggest boom year in all of American history.

With this finale:

Should not this creature from Jekyl Island [The Federal Reserve], for all its manifold crimes and sins against the republic, also be summarily put to death?

Yes Pat, let's end the Fed.

Germans Persecuting Religious Minorities Again

As I have stated before, my wife and I plan to homeschool our children. Our motivation is only partially religious, but I err on the side of religious freedom for those whom it is the primary or sole motivating factor. I also do not believe that the government has any business running any schools. The temptation for the majority to purposefully suppress ideas of minorities is too great. I support the devolution of public schools through vouchers, and I recently wrote how public universities should be privatized.

From Foxnews:

Romeike, his wife Hannelore, and their children live in a modest duplex about 40 miles northeast of Knoxville while they seek political asylum here. They say they were persecuted for their evangelical Christian beliefs and homeschooling their children in Germany, where school attendance is compulsory.

When the Romeikes wouldn't comply with repeated orders to send the children to school, police came to their home one October morning in 2006 and took the children, crying and upset, to school.
...
He had to pay fines equivalent to hundreds of dollars for his decision, and he's afraid that if he returns to Germany, police will arrest him and government authorities will take away his children, who range in age from 11 to 3.
...
Lutz Gorgens, German consul general for the Southeast U.S., said he's not familiar with the Romeikes' specific situation but believes the claim of persecution is "far-fetched." He defended Germany's requirements for public education.

"For reasons deeply rooted in history and our belief that only schools properly can ensure the desired level of excellent education, we (Germany) go a little bit beyond that path which other countries have chosen," Gorgens said.

Germany's approach to homeschooling is starkly different to the U.S. and other European countries. Homeschool students have been growing by an estimated 8 percent annually in the U.S. and as of 2007 totaled about 1.5 million.

If you read between the lines in the article, what is apparent is that Herr Gorgens believes, along with much of Germany presumably, that it is the role of the state to properly engineer good citizens. They don't like minority viewpoints or value, so they actively seek to crush those viewpoints. If you resist, they will take your money and your children.

I support the Romeikes, and the United States should rebuke this kind of thuggery by granting them asylum.