Bonus Quotation of the Day…
6 hours ago
If you choose an answer to this question at random, what is the chance you will be correct?
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.Addendum: A lot of people think that greed is the key to capitalism. It is not--greed is a constant that exists in all economic systems. The key to capitalism is trust, and the conditions under which it is wise to trust others are difficult to develop and easy to destroy. Trust of strangers does not exist in many societies, and as the result their ability to use markets is limited. The rule of law with well-defined property rights is a key to generating the trust needed for a market society because it reduces risk.
"Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to a rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort." p 67.It is quite possible that none of the Occupy people have read Joseph Schumpeter though they all enjoy the fruits of capitalism. Few probably have any idea who he was.
Joe ended our conversation by telling me that he didn't want to pressure me on any issues on behalf of the Clinton administration, but he did want me to know that the administration was strongly in favor of CRA.Meyer did not know what CRA was, but Stiglitz handled the situation with diplomacy and sent him the information he needed. Meyer then tells the reader about it:
CRA stands for Community Reinvestment Act. It was passed by Congress in 1977 to remind banks that they are obligated to meet the needs of their communities, with special emphasis on meeting the needs of people in low- and moderate-income neighborhoods. Democrats love CRA because it demonstrates how the government can provide better opportunities for lower-income families. Republicans hate CRA because it represents interference by government in the operation of businesses (in this case banks.)Meyer says that he became the Board expert on CRA and its chief cheerleader.
"This was a nasty, vindictive man who laid off workers en masse, bragged about stealing ideas from competitors, belittled his employees with screaming tirades laced with oaths and imprecations, overburdened them with heinous work schedules, cheated his best friends and oldest colleagues when it came time to distribute shares, outsourced everything he could to Chinese factories that employ child labor under dangerous conditions, practiced a cruel Darwinian meritocracy that disdained diversity, lied constantly out of pure habit, sicced the government on his chief business rival, possessed a “Nietzschean attitude that ordinary rules didn’t apply to him”, and even denied paternity of his firstborn child. Then he took credit for the work he practically whipped out of people while posing as a benevolent sage."
In early 2009, President Obama’s economic advisers seem to have understated the substantial professional uncertainty and disagreement about the wisdom of implementing a large fiscal stimulus. In early 2009, I recall President Obama as having said that while there was ample disagreement among economists about the appropriate monetary policy and regulatory responses to the financial crisis, there was widespread agreement in favor of a big fiscal stimulus among the vast majority of informed economists. His advisers surely knew that was not an accurate description of the full range of professional opinion. President Obama should have been told that there are respectable reasons for doubting that fiscal stimulus packages promote prosperity, and that there are serious economic researchers who remain unconvinced.
“Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.”
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.
Why should ECRI’s recession call be heeded? Perhaps because, as The Economist has noted, we’ve correctly called three recessions without any false alarms in-between.
A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course.
It’s important to understand that recession doesn’t mean a bad economy – we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar.
Perhaps ironically, one of the most powerful challenges to any Keynesian diagnosis of economic ailments also focuses on inadequate investment spending, but from a wholly different perspective. That challenge is today most closely associated with the economist Robert Higgs.
Higgs' careful look at the data on the Great Depression and World War II convinced him that (1) a U.S. economy producing genuine prosperity wasn't restored until 1946, and (2) investors hunkered down, especially from 1935-40, because New Deal regulations -- along with President Franklin Roosevelt's increasingly vocal hostility to enterprise and successful risk-takers -- created too much uncertainty about how government would treat profits and wealth accumulation.
The "regime uncertainty" -- described by Higgs as "a pervasive uncertainty among investors about the security of their property rights in their capital and its prospective returns" -- unleashed by actual and threatened New Deal interventions made private innovation and entrepreneurial effort simply too unattractive. So private investment spending largely ground to a halt during FDR's reign.Both are essentially arguing that the focus should not be on the demand side, as both Keynesians and monetarists have argued, but on the supply side. To understand the reason that recovery was so slow in the Great Depression, and by extension the reason we see so little recovery now, look not to the theories of macroeconomics, but to some of the literature on economic growth and development that argues that secure property rights and an impartial legal system are keys to economic growth.
“Every sex act is part of a ‘pricing’ of sex for subsequent relationships,” Regnerus said. “If sex has been very easy to get for a particular young man for many years and over the course of multiple relationships, what would eventually prompt him to pay a lot for it in the future -- that is, committing to marry?”
So, what can women do to return the balance of sexual power in their favor? Stop putting out, experts say. If women collectively decided to cross their legs, the price of sex would soar and women would regain control of the market. Like a whoopie cartel.
“Let’s be realistic: It’s not going to happen here,” Regnerus says. “Women don’t really need men and marriage -- economically, socially, and culturally -- like they once did. What I hear in interviews with women is plenty of complaining about men or about the dating scene, but their annoyance is seldom directed at other women.”
Statistics compiled by the Ministry of the Interior (MOI) showed that Taiwan's total fertility rate stood at a low of 0.895 in 2010, far lower than the level of 2.1 needed to maintain a stable population structure. This constituted a warning signal for the island's declining population.The experiences of Taiwan and Japan suggest that China, having reduced its fertility rate, will not be able to increase it even when it abandons its one-child policy.
I must say, however, that as someone who has undoubtedly benefited from affirmative action programs during my academic career, and as someone who may have benefited from the Law Review's affirmative action policy when I was selected to join the Review last year, I have not personally felt stigmatized either within the broader law school community or as a staff member of the Review.
The first person I’ve found drawing the parallel is economist Paul A. Samuelson. In the November 13, 1967 Newsweek Samuelson defended Social Security by pointing out that it was linked to population growth and that “A growing nation is the greatest Ponzi scheme ever devised. And that is a fact, not a paradox.” (I found this quote in Phillip Longman’s excellent essay “Missing Children,” in the latest issue of the journal The Family in America. I can’t find the original Newsweek cite to provide full context, but Longman says that Samuelson was defending Social Security and I’m happy to trust him because Phillip Longman is stone-cold awesome.)This view is really not that surprising. Laurence Kotlikoff writes in Jimmy Stewart Is Dead: Ending the World's Ongoing Financial Plague with Limited Purpose Banking:
For its part, economics places no moral stigma on the words: "Ponzi scheme." Indeed, there is a significant economics literature concerned with the question of whether Ponzi schemes--chain letters--are preferred investments for everyone. (p. 61)Kotlikoff goes on to say that if population or productivity is growing faster than the rate of interest, social Ponzi schemes work well. However, when population growth and productivity slow or come to halt, the programs will run into trouble.
The rapid improvement in the public's mood is without precedent in modern history. Last week's Washington Post poll found that 50 percent of Americans think things are generally going in the right direction, up from only 8 percent in early October. That's the quickest change in optimism since the question was first asked by The Post in 1980. Views of President Obama, in turn, were impossibly high: Ninety percent called him willing to listen to different views, and better than 70 percent called him a strong leader, honest and trustworthy, and understanding of people's problems.
And that was before happiness started busting out all over yesterday.
Now we know why they don’t call themselves ‘police forces’ any more. But they aren’t ‘services’ either, for they certainly don’t serve us or do what we want them to do, preferring to arrest us for defending ourselves. The criminals, who are cunning without being intelligent, all know this.
Last night Obama was in New York for a fund-raiser. At that event he elaborated on the "you deserve better" theme: "What was remarkable was to see outside of Washington the enthusiasm, the energy, the hopefulness, the decency of the American people. And what I said to them is you deserve better. You deserve better than you've been getting out of Washington over the last 2½ months--for that matter, for the last 2½ years."
I don't buy it. I just think the president isn't very bright.
Socrates taught that wisdom begins in the recognition of how little we know. Mr. Obama is perpetually intent on telling us how much he knows. Aristotle wrote that the type of intelligence most needed in politics is prudence, which in turn requires experience. Mr. Obama came to office with no experience. Plutarch warned that flattery "makes itself an obstacle and pestilence to great houses and great affairs." Today's White House, more so than any in memory, is stuffed with flatterers.Is this past week the time in which the median voters have started to acknowledge that the emperor has no clothes?
Bove points out that the proposal, which he dubs absurd, would “effectively take U.S. banks out of the financial system for an extended period. It would have a similar impact on the economy as the Fed’s two reserve ratio increases in 1937 which plunged the United States back into depression.”
The Treasury crowed that Fiat had agreed to pay a whopping $560 million for the government's Chrysler shares.Wow! 560 million smackeroos! If you laid them out end to end, they're equivalent to what the federal government borrows every three hours. That's some windfall! In the time it takes to fly Obama to Toledo to boast about it, he'd already blown through the Italians' check.A small bit of a longer piece that no single excerpt can do justice to. Read the whole thing. As someone who occasionally writes rants, I am awed at the skill of Mark Steyn.
In a series of clearly written narratives with many names, dates and figures, they show that government officials took actions that benefited well-connected individuals, who in turn helped the government officials. This mutual support system thwarted good economic policies and encouraged reckless ones. It thereby brought on the crisis, sending the economy into a tailspin.One economist who has argued that housing policy had nothing to do with the crisis is Joseph Stiglitz. However, Stiglitz was one of those who gave us those housing policies, so he is not an unbiased voice.
Three times he has gone up against Netanyahu; three times he has ingloriously failed. This last defeat — Netanyahu’s deadly, devastating speech to Congress in which he eviscerated President Obama’s foreign policy to prolonged and repeated standing ovations by members of both parties — may have been the single most stunning and effective public rebuke to an American President a foreign leader has ever delivered.
[T]he financial crisis was not caused by weak or ineffective regulation. On the contrary, the financial crisis of 2008 was caused by government housing policies -- sponsored and promoted by many of the same people who framed and ultimately enacted the DFA.Because his argument puts the blame on the government and not on the private sector, it has been attacked. He responds here.
Our benchmark results suggest that the ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs.
To keep a society sustainable, the birth rate needs to be kept around at 2.3 children per female inhabitant. But all the objective surveys, including that of the 2000 census and the 1% sampling survey of 2001, show that since the mid-1990’s the birth rate in China has been stuck around 1.3.Demography remains the great untold story.
China is set to repeat Japan’s economic recession experience of the 1990s. The difference is Japan became rich before growing old, while China is growing old before even getting rich.
Last June, for the first time in history, Americans owed more on their student loans, a record $833 billion, than on their credit cards, $826.5 billion. The amount owed on student loans increases at a rate of about $2,853.88 per second, meaning we're on track for total student debt to cross the $1 trillion mark sometime this year.Some people have argued that that the next bubble to pop will be a higher-education bubble. The cost of education has risen so that it is no longer a good investment for most students--they will never recover the costs of going to college with higher wages. Maybe. I know that I saw a lot of students who did not belong in college when I was teaching. And I recall top administrators who saw nothing wrong with raising tuition and fees by 5%-10% each year.
Since getting hired almost a year ago, they have worked him as much as possible. He averages close to, but not quite at, 40 hours a week. The reason being, most kids they hire don’t show up when they scheduled, don’t work when they are there, and they mouth off to the management. And at 10 months or so, he has seen dozens of new people come and go.A lot of young people are not worth $7.00+ per hour, and if they are not, they will not be hired, or if hired, they will not be retained. The minimum wage is a very cruel law.
The US is going down a similar road as that taken by Greece and Portugal with regard to its budget decisions, John E. Silvia, chief economist at Wells Fargo, said on Wednesday.
CBO’s baseline budget updates suggest the date for reaching what Carmen Reinhart, Kenneth Rogoff and other prominent economists believe is a critical insolvency threshold -- a 90 percent ratio of federal debt held by the public to gross domestic product -- has moved four years closer, in just nine months!
Actually, 2017 is optimistic. Uncle Sam’s creditors will soon start charging exorbitant interest rates -- like those Greece, Ireland and Portugal now face. The market’s concern with those countries’ bonds is outright default, which is unlikely in the U.S. What is likely is rising inflation as the Federal Reserve continues to print vast quantities of money to help pay the Treasury’s bills.
I generally don’t give investment advice, but Bill Gross, co-founder of PIMCO and manager of the world’s largest bond mutual fund, has it right. It’s time to dump all but your very short-term U.S. Treasuries and other dollar-denominated bonds. A safer alternative is Treasury inflation protected securities, or TIPS.
United Nations Assisted Program
Directorate of International Payment
United Nations Liaison Office - Africa
To The Attention Of Beneficiary,
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You have two options to receive your payment which is either a Pin Based ATM card or Certified Cashier’s Check. You are advised to select one out of the two options on how you wish to receive your $2.500, 000.00 Million Dollars through ATM card or Check which will be shipped via Ups Express Shipping Courier Company and would get to you within 2 to 3 working days at most.
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Dr. Gee Pascal
UN Envoy (African Region)
That's right -- February 27-March 5 is officially, "Ignore Sarah Palin Week." For just one week, signers of this petition pledge to do the following:
Questions: If you really are ignoring Sarah Palin, why would you go to a web page devoted to Sarah Palin? Doesn't signing the petition violate point two of the pledge? If you really want to ignore her, wouldn't it be better to just ignore her?
- Change the channel if she comes on TV
- Surf to another page if she pops up on the web
- Turn to another article if she appears in a newspaper, magazine, comic book, etc.
The cost of maintaining government structures is making it impossible to maintain government functions. To fund commitments made to the providers of services, services must be cut. So piles of money go to government pensions and benefits instead of roads, education or mental health services. This is one of the primary reasons the public resists tax increases. A tax increase used to provide an actual public service might have a shot at support. But a tax increase to prop up a system that consumes endless resources while cutting services is a harder sell.What are they doing in Illinois? Cutting state funding to drug and alcohol abuse programs. Druggies do not demonstrate, state union workers do.
But events in Madison are also a preview of the federal debt debate. On the continuum of pain, Obama has targeted home heating oil subsidies for the poor and Teach for America. House Republicans' reductions have been broader but included foreign aid and low-income housing. Few protesters have emerged to scream and chant. But these cuts are distractions from the problem of unsustainable entitlement obligations to the middle class and the wealthy, which threaten to eventually consume the other functions of the federal government. Structural change is required - reforming benefits to reduce costs while focusing benefits on those in the greatest need.
We are destined for still more polarization. Neither side can pull back, because the financial crunch is going to have to be resolved one way or another. We either scale back government and the power of public employee unions, or we move toward a structurally higher tax burden and a permanently enlarged welfare state. The very nature of the American system is now at stake. The emerging populist movements on both the right and left recognize this, and so cannot turn back from further confrontation.Two years at the University of Wisconsin-Madison during the peak of student protests exposed me to the radical Left, so what Kutz is saying about Obama is no surprise to me. People without that exposure have a hard time understanding what Obama is because he is outside of their range of experience.
Obama's game is transparent, isn't it? He is playing a game of chicken. He puts forward a series of proposals that he knows are more or less insane; but he also believes that Republicans will come to his rescue. They, not being wholly irresponsible, will come up with plans to reform entitlements--like, for example, the Ryan Roadmap. Ultimately, some combination of those plans will be implemented because the alternative is the collapse, not just of the government of the United States, but of the country itself. But Obama thinks the GOP's reforms will be unpopular, and he will be able to demagogue them, thus having his cake and eating it too. Is that leadership? Of course not. But it is the very essence of Barack Obama.
If the potential employer makes an offer to a candidate and that candidate is in fact a gifted teacher, the home institution will make a counter offer. If the candidate is in fact a poor or average teacher, the home institution will not make a counter offer and the potential employer is likely to hire a poor or average teacher. This leads to what economists call “adverse selection” for job offers to potential teachers. Since the prospective employer knows it is likely to hire a poor or average teacher rather than an exceptional teacher, it does not make offers designed to attract exceptional teachers, and the market for exceptional teachers does not exist. Clearly, this problem is made worse by tenure, since tenure greatly increases the cost of making a bad hiring decision. In short, the “market for superior teaching” has unraveled due to insufficient information about teaching quality.
A friend of mine has an AOL e-mail address, so I called her and gently asked if she is still paying the AOL subscription fee.
“Well, yes, I like the service, and everybody already has my AOL address,” she said.
I tried explaining that all this is free, but I’m sure she was skeptical. How can something that’s valuable now be free?
AOL’s paid subscriptions are declining each year, down from about 8 million five years ago. Folks are getting the message, but not a certain group that basically doesn’t care to understand how the Internet works.
Palin put the term "death panel" in quotes to indicate that she was using it figuratively. She was not lying but doing just the opposite: conveying a fundamental truth about ObamaCare. Proponents were describing it as a sort of fiscal perpetual-motion machine: We're going to give free insurance to tens of millions of people and reduce the deficit! As a matter of simple arithmetic, the only way to do that is by drastically curtailing medical benefits.Palin is a tremendously talented politician with the ability to take complex ideas and put them in terms that ordinary people can understand. She did it in this case, highlighting the fact that the government would inevitably ration health care as it does in every country that has nationalized it.
Palin got the truth out with the help of journalists determined to bolster the deceptions at the heart of ObamaCare. She was instrumental in winning the political argument that looks increasingly likely to render ObamaCare's legislative victory a Pyrrhic one. Sarah Palin outsmarted the formerly mainstream media simply by being blunt and honest. That is why they burn with a mindless rage against her.However, I think we will hear less from her and she will be less newsworthy in the next year. She can offer only rhetorical opposition to Obama and the Democrats. With a majority in the House of Representatives, Republicans in congress can now offer real opposition to Obama and the Democrats, and that opposition will be more important and more newsworthy. She could play the role as leader of the loyal opposition when the Republicans in Washington were powerless, but now that they have some power, the leadership will pass to them.
It wasn't the financial crisis that undermined dysfunctional Arab states, but Asian prosperity. The Arab poor have been priced out of world markets. There is no solution to Egypt's problems within the horizon of popular expectations. Whether the regime survives or a new one replaces it, the outcome will be a disaster of, well, biblical proportions.
The Greek economy is riddled with distortions — the number of trucking licenses has remained unchanged in Greece since 1971, for example, and the country is among the world’s leaders in lawyers per capita. It has one lawyer for every 250 people, compared with about one for 272 in the United States.
Yet the unemployment rate is still over 9%—double what it was before the recession—and it's been stuck above 9% for 20 consecutive months. Why the extraordinarily high and prolonged unemployment? My research shows that discretionary government interventions—deviations from sound economic principles and policies—have been largely responsible.The Paul Krugmans of economics will not like hearing that.
There is a stigma that long-term jobless people have been sitting around and don't really want to work. There is the perception that they won't take a lower-paying job -- and if they do, they will bolt as soon as they find a higher-paying one.
On top of that, some companies have explicitly barred the unemployed from certain job openings, outright telling them in job ads that they need not apply.
....Does a person lose job skills as a result of being unemployed for a long time? Or does long-term unemployment tend to be a marker for people who are less reliable and dependable than average? The article does not tell us much, but then the reporter probably does recognize that these are interesting questions.
But the company is far from alone in wanting workers who already are gainfully employed, said Patrice Waidner, board chairwoman of the Indianapolis chapter of Business & Professional Exchange, a networking organization that helps unemployed professionals."Companies are saying, 'I will take the person who was just working or is currently working,' " she said. "It is extremely difficult to get back into the job market."
To a woman who has internalized this point of view, Sarah Palin's opposition to abortion rights is a personal affront, and a deep one. It doesn't help that Palin lives by her beliefs. To the contrary, it intensifies the offense.
Liberal men put down Palin as a cheap way to score points with the women in their lives, or they use her as an outlet for more-general misogynistic impulses that would otherwise be socially unacceptable to express.