Was anyone else surprised by the Fed’s quarter point rate cut yesterday?

I haven’t been following the financial sites lately, and apparently I shouldn’t have been surprised, but I was. It seemed like a good time to sit back and do not too damned much.

Does anyone else think that it’s sort of cool that the Chinese government now has a super secret underground lair?

Well, maybe not so super secret since everyone seems to know about it, but it does fit the bad guy image they’ve been cultivating of late, doesn’t it? And, no, I’m not particularly worried about the thing; I’m pretty sure James Bond managed to single-handedly destroy more impressive super secret underground lairs a few times in his career. Once call to our friends in the UK and that thing is toast.

Does anyone else think that Josef Fritzl is going straight to hell when he dies--and that his is a clear case where his government should give him a helpful push down the path?

There are reasons that we keep the words “monster” and “evil” in our non-ironic lexicon. He serves as a reminder that evil is very real, that there are monsters in the world, and that we need to remain vigilant if we plan to keep citizens safe from the worst of us.

Is anyone else terrified of the fact that we’re having a worldwide spike in food prices and availability because, largely, of destructive government policies?

Let me continue that thought for a moment: most modern food shortages occur because of natural events. Floods, droughts, disease--acts of God if you will. The food shortages now (because we are tying our food policy to our energy policy, because trade barriers are being erected, because the cost to bring food to market are growing wildly) are manmade. I’m sure that, as we always do, we’ll absorb the painful losses, change our policies somewhat, and adjust to new realities and costs. We always do. What scares me, though, is that if our policies aren’t changes wisely, what happens to energy costs, food costs, and food availability when God visits us will a really good flood, drought, or plant disease that severely limits the supply of some staple grain? Because what has happened over the last year or so has happened without dips in actual production.

I might be missing something that makes it all okay, but this has me worried.

Does anyone else think that the whole Lesbos/Lesbian thing is absolutely hilarious?

I’ve got nothing to add to that. It’s just funny, I tell you.

Does anyone else think that the Open Source Boob Project kerfuffle sort of goes to prove all the worst stereotypes about a certain subset of geekdom?

To the point, that this class of geek imagine themselves to be extra-special-evolved in cultural terms while the rest of us just recognize the reality of their sexually immature, juvenile social ineptitude. To try to somehow demystify breasts by making such a big deal about an ongoing gropefest seems a good way to miss the actual point of their point.

That’s only compounded by the native geek tendency to suck the spontaneous fun out of a thing by codifying it, over-explaining it, and extending it like overeager schoolboys into places where it doesn’t belong. All the while they see it as a way to make a social statement of some indistinct kind.

Hi, I’m socially evolved and don’t buy into the cultural taboos about boobs. Can I fondle you now? I promise it will be totally non-sexual.

Proving with impressive emphasis that some of the worlds smartest people can still buy into stupid like nobody’s business. Especially when breasts are the topic.

I originally saw this on Scalzi’s site. He’s nicer than I am.

For the record: any deals you make to grope or be groped by another consenting adult aren’t any of my business, I know. But pretending to some heightened sexual enlightenment because of something like the oddly named “Open Source Boob Project” just looks dumb.

In the face of high royalty payments owed by online radio stations, does anyone else think that we’d all be better off when the record companies had to pay for their stuff to get played?

Instead of working toward the destruction of Internet radio, we would see a boom in the number of stations, the variety of music, and the financial health of the businesses that, for all intents and purposes, are advertisers for the record companies. By comparison to this superhighway robbery, was payola really such a bad thing? Hell, I think it was more honest.

In no way did Wesley Snipes deserve a three year sentence for misdemeanor charges of failure to file his taxes--and a piss poor way of saying thanks for the $5,000,000 in checks that he handed over before sentencing in an effort to show that not only had he learned his lesson, but that he had a newfound willingness to pony up.

As a bonus, I’m also pretty leery of government agents and agencies when they are looking to prosecute harshly in an effort to send a message to the rest of us. That is, quite baldly, a threat. Honestly, I don’t mind “We think it sends a real message” when it’s in the form of high explosives dropped in the laps of terrorists or long sentences doled out to murderers. This doesn’t quite qualify, though, does it?

It’s extremely rare to see a criminal prosecution like this (and remember that Snipes was acquitted of the harshest of the charges) and the prosecution admits to using Snipes’ celebrity to make a point to the rest of us--essentially delivering a different standard of justice to Snipes than I would have faced if I had made the same exceptionally bad decisions as the actor. It rankles when celebrities are given a free pass for stupid (and occasionally criminal) behavior; it’s no less wrong when celebrities are unfairly made into legal targets because of their social standing.

My buddy Mark called me a sucker the other day, and I couldn’t help but agree with him. See, girl and I would like to move into a new house, but the sad truth is that our current home would be near impossible to sell without losing money--significant amounts of money. But we aren’t going to abandon our house and we aren’t looking to the government to make our mortgage payments for us. We aren’t whining about not being able to make payments because she bought a place that wasn’t beyond her means, that didn’t have painful terms, and that didn’t require a lender to get playful in qualifying her.

All of which sounds pretty good (specifically, pretty responsible) to me. If the government goes on to bailout the idiots who signed loans for houses that they couldn’t afford and the companies who wrote those loans without much regard to buyers’ abilities to repay the loans, that’s a massive, tax-payer funded gift to the people who weren’t being responsible with their decisions. Which makes me--doing my best to do things the right way, yet potentially paying the way for those who weren’t so scrupulous--a sucker.

The markets don’t always choose right, I know, but tell me this doesn’t warm the cockles of your little capitalist heart.

Shares of Wells Fargo & Co. rallied Wednesday, gaining as first-quarter profit fell a smaller-than-forecast 11% amid signs that the lender employed relatively strict lending standards.

See, Wells Fargo apparently had responsible lending standards that minimized risk in the face of market downturns.

Indeed, Chief Executive John Stumpf said on a Wednesday morning conference call that the first quarter of 2008 “was one of the best we’ve ever had for our mortgage business”—a marked contrast to other banks beating a hasty retreat out of the mortgage market after a year full of billion-dollar write-downs.

Here’s to Wells Fargo for exhibiting fiscal responsibility and reaping the rewards.

Read the story.

In Palenque, Mexico, the saviors of humanity are converging to lend their knowledge of the sciences to the fight against global warming be teaching us about “reviving Indian notions about ownership, use, compensation and respect.” Which doesn’t sound like it will go far in finding ways to increase fuel efficiency in cars, cheap ways to sequester emissions from coal burning plants, or even a practical way to get the nuclear power industry jump-started in the US.

Which is a shame since, according to US EPA regional administrator Elin Miller, “The planet-wide stress on the environment today means that collaborative efforts ... are not just good things. They may well be essential for our survival.” If that means we die unless collaboration with these folks brings useful solutions, we are well and truly screwed.

Seriously, though, looking to cultural guides for wisdom in how to live our lives from a practical and moral standpoint isn’t necessarily a bad thing. But only a fool could expect a solution to providing the amenities and necessities of civilized society (health care, longer lives, abundant food, clean water, the new CD from the Gutter Twins) with clean energy sources that aren’t so disruptive to economies that they see us fall into a global depression. This native wisdom isn’t going to solve those problems, and, with all due respect, I want better health care, a longer life, better nutrition, and better insulation than the average Native American saw before the Damned, Evil white devils showed up.

Ultimately, all religions do what they can to remain relevant to their times, but religion and cultural wisdom don’t engineer anything other than the shape of society, and then only within certain boundaries.

Those lessons--generally some variations on things like respect and responsibility to the planet and to future generations and the expectations of our behavior placed by a God (or whatever deity or deities you prefer) who gave us a special role in His creation--are important and useful guides to the way we should approach living our lives. Those ancient wisdoms did little to teach us how to combat infections with antibiotics, treat cancer with radiation, or revive lagging libidos with little blue pills.

If we need salvation on a global scale from anthropogenic global warming, then it won’t be at the whim of religious dictate, it will be because of scientific breakthroughs and smart energy policies.

Of course, if we follow the indigenous path, we might all get some hella nifty Flinstone-mobiles to ride to work. Not sure how I’ll get the drive to be downhill both ways, though…

Read the rest.

This may not be the coolest thing ever in the ‘sphere, but it must be close.

5 The Bishop sipped upon hys tea
36 And sayed, “an open mind must we
37 Keep, for know thee well the Mussel-man
38 Has hys own laws for hys own clan
39 So question not hys Muslim reason
40 And presaerve ye well social cohesion.”

Read and marvel at the wonder of the thing.

Big thanks to Christopher Orlet for pointing this out. And then, to wash it down, Shawn’s suggested reading for yesterday: Be My Political Valentine. You’ve captured a supermajority of my heart!

Then, when you’re done laughing and stuff, go here for the big come down. Someone put on the breaks; we’re heading for a cliff.

Bill Ritter wants to raise taxes on the people of Colorado. He wants to raise taxes to the tune of an estimated $500 million a year.

Now, get this: he doesn’t want to let the people vote on it and he doesn’t want to call it a tax. How will he work his plan? By raising fees on the 5 million cars registered in Colorado by an “average of $100.” For reference, currently, according to the article, the average car registration in Colorado runs about $142--mine is a good chunk higher on a 2001 Mazda Millenia and I’m curious to see if I’d be right there in the “average” category. A $100 fee would tack about 50% onto my registration fee.

And I don’t have any say in the matter.

What is most frustrating is that since 1992, Colorado has had a “Tax Payers Bill of Rights” (TABOR) which is not only Douglas Bruce’s finest hour, but says that any tax that increases government revenue by more than the combined rate of population and inflation must be approved by a popular vote. There is a lot more to the TABOR Amendment, but this is the part that concerns us here. Ritter’s proposal--regardless of your opinion of the merit of his goal of rebuilding roads and bridges throughout the state--is designed to circumvent Colorado’s constitution and the TABOR Amendment by levying a monumental increase in fees in the state without allowing the voters any say in the matter.

While Democrats praised Ritter’s approach, Republicans said they were “flabbergasted” by his remarks, which followed eight months of study by his commission.

“The governor was unbelievable,” said Senate Minority Leader Andy McElhany of Colorado Springs. “Instead of a practical solution, all he wants to do is talk some more. And all he wants to talk about is another de facto tax imposed on the people of this state.”

Rep. Cory Gardner, R-Yuma, also trashed the registration-fee increase.

“A car tax is a penalty on Colorado families, poor and small businesses,” he said.

Republicans accused Ritter of trying to circumvent voters with a $500 million fee increase and said any proposal to generate significant money for transportation should go to the ballot.

Colorado’s citizens approved the TABOR Amendment because they wanted a hand in the economic decisions of the state--and a half-billion dollar end run around the voting public isn’t just a bad idea, it’s an unethical violation of the spirit of TABOR.

Governor Ritter, who is facing tough funding choices right now (partially because of some of the other interesting features of TABOR--features that I like because in theory it forces our state government to think hard about its funding decisions), should go to the people and make his case. If the roads and bridges are in such bad shape, explain to us why current registration fees, gas taxes, and other state funds aren’t enough to cover maintenance and repairs. If it is so necessary to pile this new spending onto the budget, persuade me and my fellow citizens that a fee or tax increase is the right path to solving the problem.

We may agree and we may not agree, but, ultimately, it’s our money that these folks are playing with.

Governor Ritter, you have an opportunity to back away from your suggestion and do the right thing by letting the people of Colorado vote and choose. We are adults and it would be nice if you would treat us as such.

Read the rest.

Update: Kindly linked by our friend, Robert.

At a time when consumer confidence in the US economy is flagging, the deficit is growing, run-away entitlement spending threatens to seriously damage our economy, and it’s really freakin’ cold and snowy outside in Denver, CO, is telling a Denver crowd that we need to stunt the economy to combat global warming a winning strategy?

I would say no. Bill Clinton would say yes. Unless he secretly hates his wife, in which case his evil plan to derail her presidential bid is coming along nicely, thanks.

In a long, and interesting speech, he characterized what the U.S. and other industrialized nations need to do to combat global warming this way: “We just have to slow down our economy and cut back our greenhouse gas emissions ‘cause we have to save the planet for our grandchildren.”

At a time that the nation is worried about a recession is that really the characterization his wife would want him making? “Slow down our economy”?

A charitable view might imagine that he misspoke, but I’m not so sure. Increased economic activity means more energy consumption. Even with breakthroughs in efficiency, energy consumption tends to go up as economies grow and energy consumption tends to go up as populations become more affluent. It’s hard to work job growth, fiscal responsibility, and the American love of comfy living into a strategy of intentionally hobbling the nation’s economy, I would guess. But, then, I’m not an economist, so my ideas might just be old fashioned.

I watched a portion of his speech last night, and I admit that it was fun to watch him smack down a Truther who had disrupted the event--even while advocating a position that I find foolish (immediately ending the war without, apparently, consulting the military, without considering consequences, without even a nod to the idea of victory), he was strong in his defense of common sense and verbally slapped the Truther around a bit when he wouldn’t shut up. The crowd was appreciative and so was I.

None of which changes the fact that Bill must hate his wife to be talking about intentional economic slow-downs during her campaign. And, damnit, I want some global warming to come along and melt the snow and give me warmth. Global warming is a promise that I want our elected officials to keep.

Slackers.

PS - I’m not the only one who thinks Bill might be batting for the other team. Wait, that didn’t sound right, did it?

PPS - Apparently I’m being unfair. He actually made a good point with the not-so-out-of-context bit that you can read at the link. Bill doesn’t hate Hillary.

Marketwatch’s Chris Pummer takes careful aim at an AP story about consumer confidence in the US.

Associated Press economics writer Jeannine Aversa referred to confidence falling to an “all-time low” in her first paragraph, a spin that landed the Jan. 11 story on Yahoo’s home page, a prime position for stories to reach millions of readers.

Only at the end of the second paragraph does the reader discover the result is from a Royal Bank of Canada survey begun only in 2002, a survey that is often at odds with highly tracked readings from The Conference Board and University of Michigan.

“If the story said a second-tier survey hit a six-year low, it wouldn’t get any attention,” says Ken Goldstein, senior labor economist for The Conference Board. “It doesn’t pass the smell test and it shouldn’t.”

I love a good take-down.

Which is precisely why everyone should vote for my house band over at the brand new, freakin’ awesome Whiskey in my Sippy Cup. Because I am worthy and hopeful and not at all a prognosticator of doom.

Actually, to be fair, there are a number of really good covers in that mix. 

I wasn’t a big fan of the stimulus package because, regardless of the idea of the rebates as tax cut, I can’t imagine that the outlay is going to do much to help people. My own rebate will likely go directly into a savings account to be used to pay my 2008 taxes, which doesn’t work much to stimulate the economy, does it? Perhaps I’ll let someone talk me into buying one of Apple’s new Time Capsules, instead--but if I were to be honest, I would probably be doing that regardless of the tax refund.

I support the business tax cuts, on principle, although, but the rebate outlay is going to be huge and won’t address the underlying problems of our economy. People are more than willing to spend: through the toughest parts of the last few years (and through all of the minor recessions of the last few presidencies), citizens have continued to show a remarkable willingness to spend their money to the point that individual savings are frighteningly low. Is spending really the problem?

Anyway, news of the stimulus deal is further dampening my enthusiasm.

Democratic and Republican congressional leaders reached a tentative deal Thursday on tax rebates of $300 to $1,200 per family and business tax cuts to jolt the slumping economy.

Congressional officials close to the negotiations said House Speaker Nancy Pelosi and Republican Leader John Boehner of Ohio reached agreement in principle in a telephone call Thursday morning.

The officials, speaking on condition of anonymity, said the two wanted key members of their parties to sign off on the accord before any announcement.

The accord came as the White House said Thursday an agreement was imminent.

Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining rebates of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes.

Here’s what bugs me: if a rebate is in any way meaningful, it goes back to the people who have actually paid. This package won’t send money to the people at the top, but it will send to people at the bottom who didn’t pay in. That’s not a rebate, that’s a brand new outlay and another way of piling more debt onto the current deficit. How, precisely, is that a good idea? Another thing that our economy doesn’t need is even more debt from a Federal government that can’t seem to find ways to keep its budget balanced.

Maybe I’m missing something. Maybe the greater good is being served with significant business tax cuts and the trade off is the only way to have made the deal. Maybe, since I’m not an economist, I don’t understand the complex machinery of our economy that will be motivated by giving an extra $300 to those of us earning little enough to receive the bounteous harvest from Uncle Sugar. It would be fair to assert any of the above, and I’m willing to listen to arguments lecturing me in the ways that I’m wrong; but right now I just feel like we’re seeing another bad deal being made that will fail to address the real issues facing our nation’s fiscal future. That just seems like bad math.

At least Pelosi and Co. can now say that they accomplished something over the last few years. Hollow Achievements “R’ Us.

Read the rest.

Update: Investors certainly think that I’m wrong.

U.S. stocks reclaimed higher ground for a second day after a taxpayer rebate plan was unveiled by the White House and the House leadership, lifting an equities market recently battered by worries of an economic recession.

Read the rest.

I didn’t support Arnold for Governator when he first ran mostly for two reasons: first, I felt that his accusers were credible enough that I believed he had acted in hugely inappropriate ways towards women during his career in Hollywood (not a stretch for nearly any self-obsessed movie star), and, second, that I didn’t believe that he would act as a strong conservative. Of course, I’ll never be able to prove the first, but the second seemed to be accurate.

Yes, I praised the man during the 2004 election cycle, mostly for his speeches at the RNC. He deserved that praise: he was eloquent in a way that Bush rarely is, which is funny considering the years of jokes about Schwarzenegger’s accent. Apparently, my first instincts were more trustworthy than that second glance.

Here’s one of the first things that I wrote about him back in ‘04:

Yes, he would be more conservative in a few areas (immigration, for instance), but would there really be a large difference in the most important California issue (the economy)? I don’t think so.

Of course, like Wesley Clark, it’s hard to pin Arnold down on policy since he doesn’t have a well-defined stand on many issues or a track record to judge. Star power only gets you so far. Sooner or later, you have to have strong will, vision, and policies to be elected and be successful.

Now comes this story from American Spectator about Arnold’s apology for his earlier, somewhat conservative campaign.

SCHWARZENEGGER said many of the right things during the recall campaign to unseat and replace Davis, for which he is now apologizing. He called many state legislators “inept”; he railed against the “waste, fraud, and abuse” that swelled California’s state budget and ballooned its deficit; and he called for repairing the Golden State’s failing education system without spending ever more taxpayer money.

He promised to eliminate dozens of useless state boards and commissions and cut the funding of state programs and entitlements that had become “bloated and inefficient.” “Never again,” he promised, would the state of California face a $14 billion deficit, because he would not let the taxpayers’ money be handled so irresponsibly.

That was four years ago. Now, facing a $14 billion annual budget deficit for which he is responsible, and with more bills coming due in the next few years than Sacramento will have incoming checks with which to pay them, Governor Schwarzenegger—in a moment of sober honesty—recanted the principles on which he ran and for which the citizens of California elected him in the first place.
{...]
The Schwarzenegger California’s voters thought they were getting would not have continued to push a $14 billion “universal health care” bill—built on tax increases and an assessment of crippling financial penalties on businesses large and small—through the state legislature and onto the November ballot when the budget deficit being faced by his state was of an equally obscene amount.

And the Schwarzenegger California’s voters thought they were getting would not have called a meeting with the editorial and reportorial staff of the Los Angeles Times for the purpose of apologizing for his misguided adherence—however fleeting and ineffective—to even semi-conservative principles.

It had seemed for some time that the man currently serving as Governor of California was not the man the citizens of the Golden State once thought they were putting into office. His actions during the last several months of his term should have made that clear enough.

I’ve snipped huge chunks because, frankly, this post will already be too long. So, please, do go and read the rest.

The short story, though, is very simple: conservative California voters who were voting for change got ripped off. The Arnold they hoped for wasn’t the Arnold they got and now they are in, very nearly, the same situation they were in when Davis was recalled.

That ties into why I’ve supported Fred Thompson, too: I trust him to behave in a responsible, adult, conservative manner in office. When faced with financial difficulties, I trust that he will be the first guy in a long time to say, “We need to trim our expenses instead of finding new ways to add to the debt.” Aside from Ron Paul--and the possibility of him earning my vote is slender, indeed--how many of the others come across as honestly economically conservative? Huckabee, with his love of nanny-state projects? Romney with his health care mandates? Perhaps Giuliani and, on a good day, McCain could strike a conservative chord. On the left, of course, you’ll only find various shades of terrifying new mandates and projects to suck the money right from your wallet.

The same goes for entitlement reform: only a handful of the candidates express any serious interest in tackling the issues facing Social Security and Medicare, for instance, with all of the others rushing toward solutions that would remove gobs of money from the private sphere and shuffle it right into one or another form of welfare (and, yes, that’s precisely what Social Security is) without tackling the underlying problems of the structure that the programs are built upon.

I get going for the best of the bad, but California under a Republican who is very nearly a Democrat has to act as a cautionary tale to the rest of us. He ran on change, but offered more of the same. He had an economically conservative message, but piled new debt on old. California needed a big change, but it got a big con.

Republicans--and America--need to see a true economic conservative in office. We need to hold feet to the fire and force a change in economic expectations. Of course, the likelihood of that is slender when it comes to asking people to actually give up pet projects.

The contemporary wisdom seems to say that you can’t ask Americans to sacrifice because Americans won’t accept negative messages from their leadership. That’s only half true: Americans won’t accept unrelenting negativism from their leaders, it’s true. But I believe that Americans, faced with a cogent argument, will accept that it’s only through a little bit of sacrifice that we might face ultimate economic renewal in this country.

Universal health care, big stacks of cash in aid to the rest of the world, a speedy switch to alternative forms of energy, free pre-school and college for everyone are all just so much useless talk if we let the economy crash under the weight of irresponsible policies. Anyone who promises to fix the economy by adding even more to our future obligations, and subsequently funding it by taking money out of the pockets of the people who create the jobs, is selling the Free Money Fairy theory of economic recovery: if we believe hard enough, then everything will be just fine.

Arnold-like leadership, on a national level, would be disastrous.

Unfortunately, South Carolina’s soft showing for Thompson probably put an end to his presidential run, which is a damned shame. While he is more socially conservative than I am, I came to believe that his fiscal and foreign policy would be strong and reliably conservative in nature--more so than Bush has been and distinctly more than Romney, McCain, Huckabee, and Giuliani would be. My loss.

Soon, Republicans will be choosing the leader that will take them into a fight against the economically irresponsible policies of Clinton or Obama (What? You really believe that right now is the time to saddle our economy with a meteoric jump in tax rates and expanded social programs when we can’t even find long-term funding for our current obligations?). Simply finding a way for the GOP to win isn’t enough; finding a way to win with a principled leader is what we need. California chose Arnold on big talk and personality instead of on a history of principled action. That should be warning enough for the rest of us.

Part of the Bush stimulus plan aimed at heading off a recession would be giving individual tax payers a little check (I’m seeing something between $200-300) in hopes of stimulating short term consumer spending. Of course, there are other reasons to do this and the entire stimulus package will contain other components, but this check from Uncle Sugar to you is what I want to talk about.

First: Do you think that individual checks like these are a good idea in heading off a deepening recession and why?

Second: If the stimulus package is approved, what will you do with the check that you receive?

An article today on Marketwatch is a warning to the wealthy to buy stuff now to avoid rising consumer prices and the dangers of a Democratic presidency.

Presidential candidates see domestic wealth increases as prime pickings for tax increases, meaning that all the wealth that has come the way of the rich may be reduced some.
Obama has a “Tax Fairness for the Middle Class” plan that calls for nearly doubling the capital-gains tax rate from 15% to 28%. Clinton, getting advice from Warren Buffett, is in favor of keeping an estate tax in place; the tax is due to expire in 2010, then return the next year in a former incarnation.

John Edwards, too, wants an estate tax and has aggressively proposed repealing the Bush tax cuts for the highest-income households altogether. He also wants to close “unfair” loopholes like the tax breaks for hedge funds and private-equity fund managers and unlimited executive pensions—things the other candidates, too, have attacked.

All this means, if you are rich there’s a chance that more capital restrictions could apply in the future. Republican candidates, of course, are more forgiving and tax shy.

All of this also means that if a Democrat does take office next year, we could be seeing seed money for new ventures and development drying up along with a deepened recession and tightening job market. Look for that to happen within the first two years as first year tax increases are guaranteed with any of the Democrats. While I expect Obama or Edwards increases to be the kind that shock the markets, Hillary may have learned from her husband’s first term that baby steps are better when it comes to tax increases both economically and politically.

Again, one of the reasons that I like her as the best option from the left is that she probably learned the power of moderation when it comes to her more progressive instincts. It’s funny: I think her natural political instincts would be somewhere to the left of Obama, and that she really wishes she could shove a very aggressive agenda down our throats. I also believe that her political savvy would lead her to be much more of a centrist in the same way that Bill was and entirely willing to adopt some ideas from the right (like Bill did with welfare reform).

Read the rest.

This Merrill Lynch report titled 1980s Redux? caught my attention this morning, especially the charts with comparisons between the late 1980s economy and the sputtering economy of today.  The charts are identical except that you have to look closely to see that the household debt-to-income ratio of the 2000s begins above 100% and rises from there.  In the late 80s it peaked around 85%.  It’s an interesting short read with lots of pictures, so check it out and then think back to what life was like for you then versus today. 

I was just graduating high school in the late 80s and preparing to vote in my first presidential election. One of my favorite memories from that time is riding in my friend Huck’s VW bus with a group of friends to the polling place and casting my first Bush vote. The van was full of smoke and we were having a great time as always in sunny Southern California.  I obviously didn’t think too much about the economy or politics then and was really only thinking about how to pay the rent and college tuition.  I solved both of those problems by joining the Army for five years and naively insulated myself from reality while I finished my degree.  Fortunately, I left the Army in 1994 after the brief recession of the early 1990s worked itself out. 

Things are different today for me just as they are for millions of other people.  I have the proverbial wife, kids and a real estate business, which causes me to worry more about the economy and trends in the housing market than I care to at the moment.  In regards to real estate, I believe the markets will correct themselves and we’ll experience another positive economic cycle, but right now nobody seems to have any clue what to expect in the next year or two.  Many people in my industry have been predicting some miracle reversal in the short term, 6-12 months, but it feels like this one is going to take some time to stabilize. I get the feeling this fall that we’re just experiencing a pause or quiet before the storm in early 2008 when home inventory levels will reach new highs, possibly 12-months worth of unsold homes on average. That’s just my opinion and millions of homes are going to continue to sell in the next year, but the trends overall are not positive as the Merrill Lynch report indicates.  I’m interested in how real people are perceiving the current market, as compared to the wild extremes that are covered in the media, which don’t correlate with my day-to-day exposure to the market.

1. I like that the CU Buffs beat the #3 Sooners. Cool. Surprising. Signs of a resurgent CU team? I wouldn’t quite go that far yet, but it’s obviously going to be a better season than last year.
2. I like the idea of an “eternal net tax ban.” I’m not actually opposed to taxes and I do believe that the government at its many different levels does provide services that are valuable and necessary. But taxes are an eternal struggle--to keep politicians and bureaucratic growth in check, it’s the responsibility of citizens to tug money out of the pocket of the government when they have the chance. An eternal ban on Internet access taxes is one of those things that citizens should support to keep our money from flowing into government coffers (and because network access taxation would likely have an adverse effect on small businesses and consumers).
   

   “Preventing the taxation of Internet access will help sustain an environment for innovation, ensure that consumers continue to have affordable access to the Internet, especially high-speed Internet, and strengthen the foundations of electronic commerce as a vital and growing part of our economy,” they said.

   The officials’ statement is likely geared toward lighting a fire under a U.S. Senate committee scheduled to vote Thursday on a bill that would merely extend the tax ban for four more years, as opposed to making it everlasting. President Bush in the past has also advocated for the tax halt.

   If the moratorium is allowed to expire on November 1, states would be allowed to levy taxes on digital subscriber line, cable modem, wireless and even BlackBerry-type data services. They would also be free to charge different tax rates for goods sold on the Internet and goods sold offline. It’s unclear how many states would have immediate plans to enact such laws, though, if the ban lapses.

   Because none of the pending permanent tax ban bills has been called up for a vote in the Senate Commerce Committee on Thursday, a temporary extension appears more likely. That approach represents a compromise of sorts with state and local officials who have balked at the idea of never having the opportunity to revisit the potential for Internet access taxes as a revenue source. (Some states are still allowed to levy such fees because of “grandfather” provisions in existing law.)
   

3. I love my new iPhone. More about it later, but, damn, what a wonderful piece of kit.
4. Speaking of the net tax ban, I don’t like that quiet congressional inaction could kill the idea. In fact, it makes me cranky.
   

   If a lackadaisical Congress does nothing, in other words, Americans soon are likely to be paying more to local governments for the privilege of buying DSL and cable modem service. (These are some of the same local governments that have adopted as their motto: “If it exists, tax it. And then tax it some more.")

   Time’s running out. Sen. John Sununu, a New Hampshire Republican who does support renewing the moratorium, made a good point in a statement after the nonvote: “We introduced a bill to permanently ban Internet access taxes back in January. I just don’t understand the continued delay in action. The clock continues to tick, placing Internet tax freedom in real jeopardy.”

   You can blame the Democrats for this state of affairs. Not all of them in the Congress, to be sure, but if this was a priority for the Democratic leadership, Majority Leader Harry Reid would make this happen post-haste.
   

5. I really like the idea of BMW bringing back the Triumph marque. They did a damned fine job with the Mini. I doubt it will happen, but it certainly wouldn’t hurt my feelings.
6. I don’t like that TheDenverChannel.com was a little overzealous in protecting their copyright in relation to a story published by Trench. I understand their point; I just don’t agree with it.
7. I like that the Rockies are in the hunt for their first playoff spot since way back in ‘95. Although, to be fair, I’m pretty cranky that it has taken this long for them to really show the potential.

This may be the funniest thing I’ve read all day, especially considering the context of the massive idiocy it references:

We have come to the conclusion that the crisis Michigan faces is not a shortage of revenue, but an excess of idiocy. Facing a budget deficit that has passed the $1 billion mark, House Democrats Thursday offered a spending plan that would buy a MP3 player or iPod for every school child in Michigan.
[...]
We wonder how financially strained Michigan residents will feel about paying higher taxes to buy someone else’s kid an iPod.

Stupid government tricks are not party dependent, but if there were ever a moment to break out the “big government Democrat” stereotype and complain about overspending, this would be the occasion. I won’t lean to heavily on that platform, though, since my own, beloved “party of smaller government” isn’t making me proud on the fiscal responsibility front…

Read the rest.

Today’s Rocky has an editorial by Vincent Carroll that made me smile. That’s a tough job when I’m back up after just a few hours of sleep, facing another long day at the office, and wondering how to get my freelance clients to actually pay me without burning any bridges for the future. It’s also tough when dealing with a subject as irritating as oil production and the continued idiotic prices paid for the stuff in global markets (leading to, unsurprisingly, higher prices paid by me when filling up my little Mazda).

I figured that if it worked for me, it might be worth sharing.

BP has spent the past few years trying to convince consumers that it has no real interest in producing oil. Now we learn to our dismay that the company may have been telling the truth. It has so little interest in producing oil that it permitted its pipelines in Prudhoe Bay to corrode to the point that they must be replaced, a fact that is driving oil prices through the roof.

Admittedly, that isn’t funny in itself, but the turn of phrase makes me smile.

I like words.

The Wall Street Journal noted Tuesday with mischievous glee that whereas the BP pipeline fiasco removes about 400,000 barrels a day from the market, drilling in the nearby Arctic National Wildlife Refuge would “result in an extra 1 million barrels a day” - and yet is routinely dismissed by opponents as a meaningless addition to supplies.

Yet even the Journal may have understated ANWR’s potential.

As former Interior Secretary Gale Norton noted in House testimony three years ago, “ANWR could produce nearly 1.4 million barrels of oil (a day), while Texas produces just more than 1 million barrels a day, California just less than 1 million barrels a day, and Louisiana produces slightly more than 200,000 barrels a day.”

And that 1.4 million barrels a day would likely last for 30 years - long enough to make huge strides toward development of alternative energy sources.

What is so funny about that? The idea that the opponents of ANWR drilling are paying the same as me at the pump and a goodly number of them are screaming for BP blood right now because, well, these prices are getting to be painfully high. I wonder how many of them have changed their minds about small footprint, limited drilling in the flat, desolate, mud puddle that is the portion of ANWR that would be open to oil production?

Which, come to think of it, maybe there isn’t anything funny about this stuff at all…

Read the rest.

Scott Kirwin asks: How is fire protection - a recognized public good today (it always wasn’t) - different than health care - which we currently do not recognize as a public good?

Here’s one difference: providing more fire protection will not cause more fires whereas providing more health protection will cause more people to regularly use that “free” benefit. That is, people won’t call to report fires just because they have protection, although people will go see a doctor more often for increasingly minor complaints the better their health coverage is.

The government isn’t--or shouldn’t be--in the business of simply providing benefits because it sounds like a good idea. Nationalized, universal health care would be so tremendously expensive that it would require a massive tax hike to fund--a tax hike that would stunt economic growth and would likely still fall short of the actual cost of the entitlement.

Here’s another difference: while pretty much all fires can cause a danger to the community at large, not all health issues are community issues. Your broken bone, your migraines, your non-communicable health issues aren’t my problem. Scott makes it sound like every health care issue is a public one when that simply isn’t true.

Is there a health care crisis? Yep. But proportionally America spends more on health care than it has at any time in history. The better coverage they have, the more often they go to the doctor, the more drugs they take, and the more expensive the technology they use to help diagnose problems. Shifting the cost from health care providers to the government won’t reduce that cost (in fact, it will drastically increase expenditures as each dollar filters through a massive bureaucracy) it will just put it on another part of the ledger.

Private companies will breath a sigh of relief because they will no longer have to deal with the constant health care cost increases. Until they see that extra tax hit them every quarter and each and every American sees that extra tax hit them with every paycheck.

So the crisis isn’t in the number of dollars spent on health care, the crisis is in consumer expectations on those dollars spent. Everyone thinks that they are entitled to their pills (no matter how much they cost companies to research and develop) for a five-dollar co-pay. Everyone thinks they are entitled to visit a highly educated and trained doctor for a co pay less than they are willing to spend on Jiffy Lube’s “Best” oil change.

These aren’t necessarily insurance issues. Pills are planned expenses and so are a lot of doctor visits. Your yearly check-up isn’t something you need to be insured against in the same way that your radiator coolant flush and transmission service aren’t things you need to be insured against. Yet no one is lobbying for nationalized car care insurance so that you never have to pay more than a $20 co pay whenever you rack up another 50,000 miles on the car.

I admit, health care is a more complex thing than car care and potentially wildly more expensive. That doesn’t magically make it the same kind of public interest as fire and police departments or a standing military. Our health care system is failing us precisely because we haven’t come to the right solution that balances the “insurance” aspect with the fact that planned expenses increase faster when people have no incentive to control costs.

While obsessively looking through my referrals, I noticed a trickle of traffic from Memeorandum. Having never heard of the site, I followed the link back to see who the hell was linking my stuff. Lo, from the Post-Lastly in the previous post, Memeorandum (which is actually pretty interesting--it might even find its way to the blogroll) linked up my piddly writing and Matthew Yglesias over at Tapped.

Normally, I’d grin a little grin and that would be the end of it; this time, though, I had to comment on what Yglesias wrote.

Obviously, The American Prospect is something I read only when I’m aiming for cranky--the politics don’t exactly mesh with mine. The Yglesias assault on Robert Samuelson’s article (as referenced in the Catallarchy post) is not only disturbing to any fiscal conservative, but indulges itself by labeling Samuelson’s work as “fear mongering” while failing to even attempt to refute the figures that Samuelson offers.

First, I happen to believe that the growing wealth of the nation does not belong to the government. No one but a “progressive” could call me an extremist on tax and spending issues, but the government should be limited to the things that it either does well or tasks that simply can’t be performed properly by individuals. The list isn’t a long one and it is tending to grow shorter in response to so many others’ apparent willingness to put undue faith in our government’s efficiency.

I also believe that wealth created by an individual is generally going to be used more wisely than it would be after the government gets hands of it--and that gathering wealth isn’t the selfish activity that most liberals seem to believe. Building wealth is an activity of guarantying security for individuals and their families--building the kind of financial safety blanket that ensures that a family won’t rely on Social Security, flawed prescription assistance, and heavily subsidized school loans. If more people were allowed to amass wealth, and if more people could see their wealth flow down to their children, then the need for government assistance would shrink.

Less confiscation means more individual wealth and only people like Yglesias see it as otherwise.

But contra Robert Samuelson’s fear-mongering, there’s no serious issue of “generational justice” here. Taxes will—yes—go up. But while my generation will pay a larger proportion of our income in taxes than did our elders, we’ll also have more after-tax income than our elders did. And while baby boomers will get more health care services than the “greatest generation” did (because new stuff’s been invented, and growing public-sector health care programs will pay for it), my generation will get even more health care services than our parents will (because even more stuff will be invented).

The first flaw is the idea that we somehow owe a larger proportion of our paycheck to the government just because we’ll all still be rich on the other side. Especially in regards to the damage that increased taxes can do to an economy--damages that Yglesias doesn’t bother to address--there is also the fear that under this model taxes as a percentage of our incomes would ultimately grow to be the greater portion of our paychecks leaving us with far less than “our elders did.”

Consider the tax increases that would be necessary to salvage our current social programs (Social Security, Medicare, and the like) according to Samuelson:

To cover these costs, we’d have to do one of the following: Raise all federal taxes by 30 to 50 percent (depending on whether today’s budget were balanced); eliminate defense spending and 30 percent of other federal spending, excluding interest payments; run budget deficits three times present levels.

Any of these moves would be disastrous to our economy and our individual wealth--our individual security (not to even delve into the national security issues involved with any of those solutions). Yglesias rushes past without even discussing the numbers, the potential damage, or the inherent unreasonableness of 30-50% tax increases. All he offers is some happy thoughts about how we’re all actually pretty darned rich compared to our parents even after the government gets done raising taxes and spending our money.

Thing is, he’s right. For now. But part of the reason is because of the economy that Reagan created and that Greenspan has shepherded--an economy whose bumps came because of natural disasters, acts of war, one bout of lunacy during the dot-com era, and after significant tax increases. Does he imagine that our economy is sustainable under the kind of taxation necessary to save social programs as they are currently configured?

Of course he does because he isn’t even considering that side of the equation. The only thing he sees is the hopeful benefit on the other side.

This is just the way of the world. Trying to hold expenditure-shares constant as the economy grows would produce preposterous results. Everyone would have way too much computing power and food, but average elementary school class sizes would balloon. The whole thing would be a disaster.

Most of us wouldn’t propose keeping spending constant in terms of absolute dollars, but wonder why the same job can’t be done with a similar portion of our incomes going to taxes. Because if the proportion left behind leaves all of us so much better off, wouldn’t the bit going to the government look similarly enhanced?

Update: Kindly linked by Andy.

I believed that Germany needed Angela Merkel—a moderate conservative who could be a tough-minded economic reformer. I was in love with the idea that she could be the leader to tear apart the broken apparatus of Germany’s overwhelming social programs and build up new structures of commerce and stability.

Trouble is, Merkel isn’t the person that I thought she was and the reforms being proposed by her coalition government could be far more ruinous than Schroder’s incompetent neglect. God help Germany.

The specifics of the proposal aren’t just ugly: they contradict the economic policies that have maintained healthy economies in the US and helped usher in growth in emerging economies throughout the world.

Germany’s plan to cure its self-confessed economic failure by doing exactly the opposite to what modern economics would suggest is certainly a bold and novel idea. Jim O’Neill, the chief international economist of Goldman Sachs, remarked on television last week that German politicians are acting as if they had never seen an economics textbook, much less understood one.

Accordingly, the new German Government has decided to impose one of the biggest tax increases in postwar history and to target the extra taxes on the weakest and most sensitive parts of the economy: consumption, which will suffer a three percentage point increase in VAT, and housing, which will lose tax incentives for first-time buyers. In addition, to fend off accusations that the new consumption taxes will bear unfairly on poorer consumers, the Government will hit the rich as well, increasing the top rate of income tax from 42 per cent to 45 per cent.

What Merkel’s coalition has done, simply, is to wave the white flag. They are admitting that they don’t have the backbone to re-work the social programs that are dragging the economy down, admitting that they have no idea how to broaden the tax base by making an economic climate more conducive to business expansion (and job growth), and admitting that in the absence of other ideas they will simply ask the working class to foot even more of the bill for the unemployed and retired.

Read the Rest...

Okay, so I was writing morning market advice for investors. I was going to talk about the four reasons that today’s market outlook is dismal (fears about heating oil costs, mildly negative jobs data, a much wider September trade deficit forcing lower third quarter GDP growth estimates, and GM’s continued woes--including an accounting oops leading to a restatement of $400 million in profits for 2001).

It was good, and early gains notwithstanding, the market has quickly turned to negative.

It was good.

Of course, my computer ate my freakin’ homework.

Now the benefit of my wisdom won’t be yours as I’m heading off to work. Sorry about that.

Oh, and I should probably note that I’m hardly a market expert. If you take my advice, you get what you deserve.

Update: Which is all sort of okay seeing as the market bumped up big late in the day after an unusually strong bond auction from the Treasury department. Didn’t see that coming. It didn’t hurt that both oil and natural gas eased off today (oil coming in below $58).

The big bump, though, came from the Treasury auction that brought in quite a bit of international attention. With the dollar’s recent advance, it indicates that foreign investors are still betting on the US economy to stay strong.

All of which should mean good things for my mutual funds…