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  • Ruminations – 15nov2010

    George Rebane

    • Radical left says that Tea party is now a thugocracy
    • Alan Blinder and economics in the real political world
    • EPA comes to help CARB crush California
    • Charlie Rangel didn’t have time to get a lawyer (really!)

    The Tea Party is now painted as a thugocracy by the progressives and their farther left brethren and cistern 😉  This is happening at all levels of discourse, just as if the word went out to start the rant from national outlets to local blogs.  The charge is that the new conservative House will not fund the socialist programs put in place by the Barry, Harry, and Nancy show.  Obviously this will “shut down the government” and only legislative thugs would use the appropriations clause (Art I, Sec 9, Clause 7) of the Constitution to do such a thing.  And predictably the Saul Alinsky manual calls for the immediate launch of a vilification campaign which is now under way.

    HelicopterBen Princeton’s Alan Blinder is perhaps my favorite liberal economist.  His no nonsense visage and prognostications are even on the mark now and then.  But no kudos for his ‘In Defense of Ben Bernanke’ in the 15nov10 WSJ.  There Dr Blinder takes us through a ding-dong school version of Econ 101 presenting a weak apology of his buddy Ben’s QE2.  But what Princeton’s finest doesn’t seem to understand is that economics is not yet (and may never be) a science.

    An economy is a complex dynamic system which contains a mighty stochastic element called the human bean.  Not only that, but no matter how reasonable the rank and file humans attempt to be, their best intentions are almost always short-circuited by the politicians they elect whose utility function has only one attribute to be maximized – expected number of years to suck on the public tit.  The math models of Blinder and tribe do not include the resulting policy perfidies, and therefore we hear daily reports of economists being ‘surprised’ and ‘disappointed’ that their predictions are constantly off by hundreds of percent.  Opposing economists weigh in here, and I here.

    We now discover that Washington’s EPA is coming to the aid of our state’s CARB in making sure that the enforcement of AB32’s greenhouse gas provisions will be sufficiently draconian on California’s economy.  It’s more of the ‘if the right one don’t a getcha, then the left one will’.  Russ Steele has more of this on NC Media Watch.  The Rebane cars will proudly wear their Prop23 bumper stickers until the sun bleaches them off.

    RangleWaters Concluding with a picking from the Capitol Clowns’ Corner, we hear reports that ol’ Charlie Rangel got a mite ired this morning.  Seems that his House trial on multiple charges of years’ long corruption kinda snuck up on him.  For months the rest of the country knew that today was when he would have to stand tall in front of his colleagues, and explain how come he has been paying over a million dollars in lawyers’ fees absconded illegally from various PACs and other no-no funds.  All this in addition to not paying taxes on vacation homes and using rent-controlled living units for his private offices.

    So this morning the old irascible scumbag got on his high horse in front of the House panel trying him, and (drum roll please) demanded a delay in the proceedings because he hadn’t yet hired another lawyer.  And then, after excoriating the panel and with high dudgeon firmly strapped on, the sumbich walked out of the hearing room.   Next we will be able to enjoy the Maxine Waters Show that’s also been in the oven for some months now.  No end to the entertainment value coming out of that greatest deliberative body in the world.  Only in Congress.

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  • The Tea Party Movement – here to stay

    George Rebane

    Last night at the GV Elks Lodge the Nevada County Tea Party Patriots held a packed house celebration of the mid-term election results – California excepted, but Nevada County included.  Jo Ann and I attended with our friends Russ and Ellen Steele.  While both Russ and I did our usual scribbling during the goings on, Russ has already posted an excellent account of the meeting’s main thrust and points – including the new TPP 40-year plan – on NC Media Watch.

    MarkMeckler1011 The main takeaway of the tea party movement meetings going on nationwide is that, no matter to which faction/segment of the movement you belong, our work in holding the politicians accountable for implementing our principles has only begun.  We the people are here to stay.

    This morning’s WSJ contained a good report of some of the happenings in the DC area this weekend.  Our own TPP national co-founder Mark Meckler (AP photo) is prominently featured.  The fundamental message put out during these meetings with freshman members of Congress is that we the people will now organize ourselves into perennial watchdog groups and take an historically keen interest in what’s going on in Washington and the state capitols.  We the people are neither going to trust you politicians nor quietly go back to our knitting until the next election.

    One of the strong winds on the back of the tea party movement is that the progressives, starting with Obama and going all the way down to local leftwing bloggers, haven’t a clue of what has happened and what will be going on.  Their seventeen slogan ideology has no breadth within which these events can be encompassed, let alone understood.   And as the producers begin to retake and reduce our government, the socialists will again become a shrinking echo chamber.

    And if we are successful, America will be in the best position to climb out of the fiscal and monetary hole we have dug for ourselves.  It will not be easy, and we will always have the progressive parroting pinheads on the sidelines screeching ‘Just tax the rich, tax the rich!!’  But reassuming our world leadership role in a post-Obama world is what the other producing nations of the world have been urging us again at the G-20 meetings in Seoul (here).  The community organizer gets none of this, and is just telling everyone that the really important thing to do between now and 2012 is to stay the collectivist course and massage the message more skillfully.

    Things are looking up.

     

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  • On the Road to Weimar (addended)

    George Rebane

    [This is the submitted copy of my November column in the 13nov10 Union.  The online version is available here.]

    You no doubt agree that these are interesting times.  The economy is swimming in molasses, the declared unemployment rate is cemented at about 10% (the actual is closer to one in six, or about 17%), and public debt at all levels of government is soaring beyond amounts that anyone knows how to pay off.  And we just got another ‘surprise’ announcement that California will be running uncontrollable deficits exceeding $20B annually – that on top of half a trillion dollars of unfunded liabilities already cooked into the state’s books.

    To add insult to injury, the feds will not let us print the money we need, and are being more than obtuse about letting the folks in Ohio and China fund our rightful and well-deserved spending programs.  This is clearly unfair since the feds can print all the dollars they need as they need them.

    The recent election may not have done anything but highlight the deep divisions between our two halves – one saying ‘government get off our backs and let us create the needed jobs’, and the other responding ‘oh no you don’t, you already have too much of our money and have to be watched like a hawk.’  As a solution to our debt problems, print and plunder are the accepted alternatives to growing the economy.

    (more…)

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  • 2010 Bastiat Prizes in Journalism

    “When you see that trading is done, not by consent, but by compulsion–when you see that in order to produce, you need to obtain permission from men who produce nothing–when you see that money is flowing to those who deal, not in goods, but in favours and approvals–when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you–when you see corruption being rewarded and honesty becoming a self-sacrifice–you may know that your society is doomed.”  Ayn Rand

    George Rebane

    The International Policy Institute awards the annual Bastiat Prize and the Bastiat Prize for Online Journalism.  Last night in New York Bret Stephens of the Wall Street Journal placed first in the Bastiat Prize competition.  Second place was tied by Tim Harford of the Financial Times and freelance writer Jamie Whyte.  James Delingpole who blogs for telegraph.co.uk won the Online Journalism prize.  Delingpole writes –

    Why does the Bastiat Prize matter so much? Because it’s about the only prize left which celebrates those true journalistic virtues of scepticism and inquiry which our libtard MSM [mainstream media] has all but abandoned in its eagerness to suck up to whichever bunch of statist shysters currently happen to be in power. It’s about free markets, about small government, about liberty.

    Hard to add anything here.  (H/T to two RR readers for this material.)

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  • Veterans’ Day 2010

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  • Walking into the Liquidity Trap

    George Rebane

    QE2 used to be the short moniker of HMS Queen Elizabeth 2, flagship of Cunard’s luxury liners.  You boarded QE2 and forgot your troubles as you were transported across The Pond with more comforts than you could imagine.  Today’s QE2 is the code word most people hear and can’t put together with anything that might affect them, let alone cause them more discomfort than they can imagine.

    QE2, the second tranche of ‘quantitative easing’, is planned to pump $600B more newly printed fiat money into the economy backed by nothing but the blather of the Obama administration.  Coming from the Fed, it is intended to turn loose more money from the banks that have been using past bailouts and QE1 to fatten their reserves instead of making needed loans.  The additional money is supposed to continue to ease interest rates and maybe even revive the housing market.  Not a chance.

    The real purpose of QE2 is to ‘monetize the debt’ – i.e. to continue destroying the value of the dollar so that our government’s (or should that be governments’) debts and unfunded liabilities can be paid off in worthless dollars that add to up to the quoted nominal amounts that are on the books for the Chinese, Japanese, … lenders and our legions of pensioners.  In short, it is the quiet beginning of the last stage of government make believe that all is still well with our economy.

    The thing here is to note that we have entered the dreaded Keynesian ‘liquidity trap’

    “There is the possibility … that after the rate of interest has fallen to a certain level, liquidity preference is virtually absolute in the sense that almost everyone prefers cash to holding a debt at so low a rate of interest. In this event, the monetary authority would have lost effective control.”  John Maynard Keynes, The General Theory.

    Expanding on this, John Hussman of the Hussman Funds writes –

    Alternatively, monetary policy might transmit its effect on the real economy by directly altering the quantity of funds available to lend. In that view, a liquidity trap would be characterized by the failure of real investment and output to expand in response to increases in the monetary base (currency and reserves).
     
    In either case, the hallmark of a liquidity trap is that holdings of money become “infinitely elastic.” As the monetary base is increased, banks, corporations, and individuals simply choose to hold onto those additional money balances, with no effect on the real economy. The typical Econ 101 chart of this is drawn in terms of “liquidity preference,” that is, desired cash holdings plotted against interest rates. When interest rates are high, people choose to hold less cash because cash doesn’t earn interest. As interest rates decline toward zero (and especially if the Fed chooses to pay banks interest on cash reserves, which is presently the case), there is no effective difference between holding riskless debt securities (say, Treasury bills) and riskless cash balances, so additional cash balances are simply kept idle.

    LiquidityTrap 

    (more…)

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  • An Evening with Dan and Karl

    George Rebane

    Rove1 Last night we attended a reception for re-elected Assemblyman Dan Logue that was held at the Southridge Event Center in Sutter.  The gathering also honored retiring State Senator Sam Aanestad for his years of service.  Sam was presented with a large commemorative resolution that will now grace the wall of his office.  But what made the evening special was that Sam, who knows Karl Rove, told Rove of all the good work that Dan has done in his short time in Sacramento.

    Karl Rove, President GW Bush’s top adviser for those just in from Mars, was coming up to Napa for a well-deserved post-election respite when Sam nabbed him and convinced Mr Rove to take a little detour and speak to us for a bit on a Saturday evening.  The ‘us’ were invited guests who had supported Dan during his time in office and contributed to his re-election campaign.  Jo Ann and I were pleasantly surprised when Dan brought Karl Rove by for a shake and a howdy with us as he escorted his special guest to the podium.

    Rove2After some good and mercifully short prelims, Karl Rove was introduced and began his extemporaneous monologue.  The event was off-the-record with no press people present, and only an occasional itinerant blogger there with his pen, madly scribbling away.  Therefore my report of Rove’s remarks will contain stuff that you may have heard him say on his recent media appearances and published columns.  His own ruminations about the Presidents Bush and Obama will not be included in this little summary.

    Rove started by speaking of his early years in government and involvement with Radio Liberty.  Of receiving the ceremonious gratitude of Russian workers after the Fall of the Wall, workers who had listened to the broadcasts in secret and at great peril to themselves and their families.  This tied in with the rights that all Americans have to really choose their political leadership – rights which over 90 million voters exercised during these mid-terms.

    The tea party movement was appropriately recognized and lauded for making the difference that it did.  Rove cited that 55% of independent voters had voted Republican, which contributed to the nationwide (sans California) landslides.  He also invited people to look at the Appendix One chart in Romer & Bernstein’s January 2009 report on stimulus job creation.  The fudging that the government has done to attempt justification of its $814B stimulus will not be heralded on MSNBC. (more here)  This job destroying legislation begs the question ‘if the claimed job creation/saving was over 3 million, why stop at $814B?’

    (more…)

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  • Marriage – A Union of Fungible Units

    George Rebane

    [This is a transcript of my bi-weekly KVMR-FM commentary broadcast on 5 November 2010.]

    Two years ago California voters approved Proposition 8 that made marriage, as a union between a man and a woman, a part of the state’s constitution.  According to the people, the debate about ‘marriage’ was over.  But this was not to be.  This August in US District Court, Judge Vaughn R Walker, who is a homosexual, held that this new clause in the state’s constitution violated the US Constitution 14th Amendment’s due process and equal protection clauses.  And marriage became a relationship whose modern meaning was once more set adrift.  (more here and here)

    Under Perry v. Schwarzenegger, Judge Walker’s ruling will be appealed to the Ninth Circuit Court of Appeals where you can bet the farm that it will be upheld, and then further appealed to the Supreme Court.  Most likely, the Supremes will vote 5 to 4 to uphold Judge Walker and declare Prop8 null and void.  And why will we have gone through all that?

    (more…)

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  • MSNBC Suspends Olbermann – Shhh or BFD?

    George Rebane

    KeithOlberman MSNBC has suspended hard left pundit and talk show host Keith Olbermann.  Why is that such a big … deal?  The reason given was that the man gave money to support the campaigns of three Democratic candidates.  Why cannot any citizen express his right to free political speech by openly contributing to whatever issues or politicians he wishes?

    I suspect it’s MSNBC still trying to foist some ‘standard of journalism’ on its rapidly shrinking audience.  Does anyone besides the cadre of useful idiots of the left believe that Olbermann revealed an unknown political bias by such contributions?  A political bias that was carefully kept hidden by his record of well balanced reports and commentaries?  General Electric (owner of MSNBC) is apparently concerned that this revelation on politico.com will reduce even further the market share of their poorly camouflaged hard left outlet.

    For my money Keith Obermann and everyone else in the media claiming to be middle-of-the-road, unbiased, balanced, or unbalanced can give to their hearts’ content to support whatever out there they want.  After all, it is their own money.

    I’d rather see that kind of open support than the stuff that George Soros and other big swingers are doing in quietly backing organizations that support other organizations that support …, well, you know what I mean.  In partisan political campaigning, everyone gets to toot their own horn no matter its size, and it’s best so long as everyone else also gets to know who the tooters are.

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  • California in Iron Lung – Hard Left Unfazed

    George Rebane

    Last Tuesday’s inland tsunami washed over most of the land without much effect on the coasts.  With its margins of establishment pullback, the voters shouted loudly that the country has been going in a hard left direction under the leadership of hard leftwingers.  This, of course, is something totally invisible to those with a firm grip on the port rail of our ship of state.  Starting with our fearless leader, the problem was not his policies and legislation – which has ranged from ineffective to ravaging – but that the whole nation couldn’t be better bamboozled.  It was all a problem in messaging.

    Well, there was no problem in messaging states like California and New York.  In the once golden state, the unions got out there in force and convinced ‘the blacks, the Hispanics, and selected Asian communities’ to vote the Peter/Paul Principle.  Arguably, these communities contain the most politically innocent among us and have always been ballot box fodder for the left.  2010 was no different.

    PensionPayouts What continues to amaze me in post-election talks with some liberal friends, is that some of them still don’t believe that government service unions have driven states and hundreds of local jurisdictions across America to the brink of bankruptcy.  They are convinced that all this reporting (e.g. ‘Tough Fiscal Problems Loom for Cities’) is still some rightwing anti-labor conspiracy.  And these are otherwise educated people.  This intellectual chasm is what keeps that sought after middle ground a no-man’s land.

    And with Jerry ‘Moonbeam’ Brown back in the saddle, with the same gang in Sacramento that got us where we are, our direction is sealed.  Remember his ‘age of limits’; now he’s in a position to implement those limits.  The state’s Prop23 failure and Prop25 passage have given the progressives more than enough ammunition to keep California at the bottom of the stack for the indefinite future.

    From the liberal lie factory we heard for months that Obamacare was going to provide better medical care, reduce healthcare costs, and lower deficits.  Casual examination of the new law quickly showed that that was not even close.  So starting in September the White House put out the word to the Dems on the stump to stop touting those lies, because the Repubs would take them to the cleaners.  Most listened, and even the lamestream media quit giving mouth-to-mouth to that progressive public policy cadaver.

    Now the question is how long (please submit your entries in sealed envelopes) it will be until the “cleantech” economy-boosting, job-creating AB32 propaganda will be quietly pulled from the public view.  Along with the unions, the bay area capitalists are going to have a problem with a Congress that will put subsidizing California’s social experiments on a short leash – all that money invested in an ersatz and subsidized economic future.  The 5nov10 WSJ summarized it with –

    … much of the funding to defeat Proposition 23 came from a Silicon Valley that is deeply invested in green technology and its iron lung of government subsidies. After Dodd-Frank, Wall Street is also now more than ever tethered to Washington.

    The bottom line is that we continue to be at the mercy of the public service employee unions whose power has made their message short and to the point – ‘Pay us, or we’ll shut you down.’

    … In other words, the results in California and New York are an instructive lesson in what happens when government doesn’t serve a state but holds it hostage.

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