Current Commentary

Republican congressman booed HARD at SC teaparty

http://www.youtube.com/watch?v=MJQVNXfKujc

The people of Greenville, SC, booed the hell out of their Republican congressman Gresham Barrett. He voted for the bank bailouts. In spite of Barrett's support for the rest of the Republican platform which he drones on for 5 minutes about, his position on the bailout alone was enough to nearly get him lynched by an angry mob, and that's the way it should be.

Whether Republican or Democrat, if they voted to take from the working and give to the wealthy in '08, they must go in '10.

Thursday, April 16, 2009 

My Bmore tax protest report

I got there late, about 4:15 (got slammed and couldn't finish up work till 4) so admittedly I missed over half of it. I'll tell you what I did see and some of the exchanges I had with some of the organizers:

There were probably 50-70 people standing in the cold rain listening to speakers. The organizers were four young guys, two of whom I doubt were over 21. There was also a young man speaking who is running for the US Senate on the Republican ticket against Mikulski in 2010. They opened up the mike (a bullhorn) to the audience. I did not speak. One guy railed against immigration. Another railed against illegal immigration. A physician railed against socialized health care. The guy running for Senate railed against everyone in Congress now and Dems in general, and the tax code in general. I think one of the other speakers did the same.

Now, what I specifically did NOT hear in my 40 minutes there: BANK BAILOUTS AND DEBT MONETIZATION.

Afterwards I took some of the organizers aside (because they are trying to keep this going as a movement) and said, "What are you doing?!" And, "If you want to go from a bunch of fringe yahoos standing in the rain whose numbers are in the 100s, to a force large enough to change the makeup of Congress, you need to get on board with a simple no bailout message."

It doesn't matter what your views on immigration are right now. We don't care about your views on socialized health care right now. This isn't even about socialism versus capitalism. In socialism they take from the rich and give to the poor. While I may disagree, I can at least understand the argument.

What I cannot understand -- and what Adam Smith, Karl Marx, Jesus Christ, and 65-75% of this country can't understand -- is taking from a guy who makes 45k a year and giving to a guy who makes a million a year.

After we stop that, and after we stop printing money like it's going out of style, we can debate immigration, health care, and whether it is right or wrong to take from a guy who makes 100k a year to give to a guy who makes less than 20. Until then, regardless of where you line up on the other issues, you need to drop your differences and work together to elect people in 2010 who will stop the bailouts and stop the printing presses.

Monday, April 13, 2009 

Alarming gold price spreads and what it indicates is to come

http://www.monex.com/liveprices

The COMEX physical delivery and the US Mint versus non-US Mint spreads are getting alarmingly wide. A few months ago, the COMEX spread was about 3-4%, now it is 7%. The US Mint (US Eagles and Buffalos) versus non-US Mint (Canadian Maple Leaves and Euro Philharmonics) was about 1%; now it’s 2.5%.

It doesn’t sound like much of an increase, unless you look at it as doubling -- which it is. People are paying a premium for the same amount of gold in order to get a US Mint stamp on it.

What does this indicate?

1. That there is weakening confidence in the credibility of the COMEX market.
2. That there is an increasing fear that Obama will pull an FDR-style confisication of private gold that exempts numanist coins.

Wednesday, April 08, 2009

What scares me most, and some better alternatives

What scares me most is that some basic fundamental truths are being ignored:

• Power corrupts, and absolute power corrupts absolutely.
• There is no free lunch; everything has a trade-off cost.
• If government supports one business or industry, it does so at the expense of another.
• The government does not create wealth, it can only redistribute it. (No, the government doesn't create wealth; I don't care what the Keynesian multiplier says. If it were true, governments should spend 100%.)
• No civilization in the history of the world has ever taxed, spent, or regulated its way to prosperity.
• Limited government is necessary for a free and prosperous society.
• Loans and agreements that were never backed by the full faith and credit of the US government should not be backed retroactively.
• I should not be made to pay for losses resulting from a bad private deal of which I was never a party to.

For some specific criticisms and critiques of Obama, consider these:

1. Supporting the second round of bank bailouts, something that only about 37% of the country supports and something that rewards reckless behavior while crowding out those who behaved responsibly.
2. Putting together a budget with such high deficit spending that it lead to the Fed monetizing (printing money) a trillion dollars worth of debt, which lead to China, the EU, and Russia talking about ditching the dollar as a world reserve currency. (Hold on for the hyperinflation bullet train if it gets to that point.)
3. Taking his time getting out of Iraq and continuing to waste billions of dollars while still there.
4. Appointing a Treasury Secretary with tax problems that would land the average man in jail. ($80,000 of unreported income. They fine you for creative deductions, but they throw you in jail for concealing or not reporting income.)
5. Lying on 60 Minutes about the limits to the bank bailouts being at the point when we couldn't borrow it anymore after printing a trillion dollars because the bailouts exceeded traditional borrowing avenues.
6. HAVING HIS TREASURY SECRETARY INSTRUCT CHRIS DODD TO INSERT A PROVISION THAT ALLOWED AIG TO PAYOUT 165 MILLION DOLLARS IN BONUS MONEY, SOME TO MILLIONAIRES, WITH YOUR MONEY! But of course that was needed to deflect attention from the real story of the trillion dollars of debt monetization or the other story that over half of the AIG money was being kicked out the back door to pay other banks -- some foreign banks -- at 100 cents on the dollar.

As for better alternatives, consider these:

1. Undo the provision of the Commodities and Futures Modernization Act of 2000 (CMFA2000) that created the credit default swap market.
2. Lift the SEC bar against any new ratings agencies. As it stands now Fitch, Moody's, and S&P are acting as government-sponsored monopolies that were able to give AAA-ratings on bundled dog feces. Those dishonest ratings made this mess a bring-the-free-world-to-its-knees-size of problem as opposed to just an interesting case study.
3. Stop the bail outs for banks and autos. Pass a law that states that -- in the interests of national security and industrial output -- only US-owned corporations may bid on the factories of the failed automakers. If you care about the pensioners, have a separate program that helps them, but the stock holders and the bond holders need to be CRUSHED and the management put out on the street. Someone with a fat balance sheet will come in and buy up the factories and start making cars if the price is right.
4. Pass a law that exempts small business owners under a certain size (e.g., 10 employees) from having to comply with the same employer-contributed payroll tax, workers comp, and unemployment insurance that Walmart complies with. This would make it easier to start, and grow a business, creating real jobs that create real things of value as opposed to "make work" government jobs.
5. Send a clear and certain message that there will be no further government help for bad loans. Why? Look at what happens: When someone gets a house with no money or credit and the loan goes bad, who really stands to lose? The lender or the borrower? So who does any bad loan assistance help? The lender or the borrower? Currently, banks are extremely reluctant to negotiate any kind of short sales or loan modifications because the banks believe there is a better government deal on the way. Why settle for something that loses your company money now, when -- if you wait -- those losses might be pushed off on the public? A clear message of no government help would encourage banks to negotiate and work out workable loans.