It's no surprise that mushy moderate Mitch McConnell, with his National Taxpayer Union average of only 72%, leads the charge to save earmarks--they are the only way he can get his Kentucky-only horse socialist bailouts!
http://online.wsj.com/article/SB10001424052748703514904575602690040454972.html?mod=djemEditorialPage_t
Monday, November 15, 2010
Thursday, November 11, 2010
Hensarling Could Be an Actual (Mushy?) Conservative
Tea Party favorite Michelle Bachman has dropped out of the race for the number 4 position in the House Republican leadership, the House Republican Conference Chair. She has endorsed the establishment candidate, Jeb Hensarling. So how good does Hensarling sound? For that matter, how good to the other three likely Republican leaders sound?
Hensarling has a substantially more conservative lifetime average from the National Taxpayers Union than Boehner and Cantor, 86% to their 70% ratings. Like the two mushy moderates, Hensarling's record, however, improved drastically in the three Democrat-majority years over his previous performance, in his case from 81% to 93%. The likely third-ranking Republican, Kevin McCarthy of California, bucked the Democrat tide of 2006 to win his first election and so has a record only under Democrat majorities, with an average of 81%, so he falls between the Boehner and Cantor on the one hand and Hensarling on the other hand, into the zone I call mushy conservative.
Breaking down their voting records into the period when the GOP had a majority and the period when the Democrats had a majority, moreover, we see a startling change in their voting patterns: both Boehner and Cantor actually had liberal Republican voting records (64% and 63%) when their votes actually determined spending, taxes and regulation. Boehner and Cantor rose a stunning 20 points to the mushy conservative range only when their votes, under the Democrats, could no longer determine spending, taxes and regulations. Hensarling had a smaller increase, but still 12 points, taking him from mushy conservative when his votes could determine the outcome to solidly conservative then the Democrat majority rendered his votes irrelevant. While McCarthy has no record under a Republican majority, we can see that he voted marginally worse than Boehner and Cantor under the Democrats. I've summarized their voting records below.
We don't yet know how conservatively Tea Party favorite Michelle Bachman will vote, nor do we know whether Boehner, Cantor and Hensarling will revert to their previous records when their votes once again determine spending, taxes and regulations. We also don't know if McCarthy will continue to vote mushy conservative or fall down to the previous levels of Cantor and Boehner. I do know two things: that I would have felt more confident of the Republicans if they'd chosen Michelle Bachman as their 4th-ranking House leader, and that we need to watch the four of them--like a hawk.
Analysis of NTU Averages of Likely House GOP Leadership
Name Likely Position NTU Avg Avg Under GOP Majority Avg Under Dems
John Boehner (OH) Speaker 70% 64% 84%
Eric Cantor (VA) Majority Leader 70% 63% 83%
Kevin McCarthy (CA) Majority Whip 81% - 81%
Jeb Hensarling (TX) Conference Chair 86% 81% 93%
http://www.politico.com/news/stories/1110/44976.html
Hensarling has a substantially more conservative lifetime average from the National Taxpayers Union than Boehner and Cantor, 86% to their 70% ratings. Like the two mushy moderates, Hensarling's record, however, improved drastically in the three Democrat-majority years over his previous performance, in his case from 81% to 93%. The likely third-ranking Republican, Kevin McCarthy of California, bucked the Democrat tide of 2006 to win his first election and so has a record only under Democrat majorities, with an average of 81%, so he falls between the Boehner and Cantor on the one hand and Hensarling on the other hand, into the zone I call mushy conservative.
Breaking down their voting records into the period when the GOP had a majority and the period when the Democrats had a majority, moreover, we see a startling change in their voting patterns: both Boehner and Cantor actually had liberal Republican voting records (64% and 63%) when their votes actually determined spending, taxes and regulation. Boehner and Cantor rose a stunning 20 points to the mushy conservative range only when their votes, under the Democrats, could no longer determine spending, taxes and regulations. Hensarling had a smaller increase, but still 12 points, taking him from mushy conservative when his votes could determine the outcome to solidly conservative then the Democrat majority rendered his votes irrelevant. While McCarthy has no record under a Republican majority, we can see that he voted marginally worse than Boehner and Cantor under the Democrats. I've summarized their voting records below.
We don't yet know how conservatively Tea Party favorite Michelle Bachman will vote, nor do we know whether Boehner, Cantor and Hensarling will revert to their previous records when their votes once again determine spending, taxes and regulations. We also don't know if McCarthy will continue to vote mushy conservative or fall down to the previous levels of Cantor and Boehner. I do know two things: that I would have felt more confident of the Republicans if they'd chosen Michelle Bachman as their 4th-ranking House leader, and that we need to watch the four of them--like a hawk.
Analysis of NTU Averages of Likely House GOP Leadership
Name Likely Position NTU Avg Avg Under GOP Majority Avg Under Dems
John Boehner (OH) Speaker 70% 64% 84%
Eric Cantor (VA) Majority Leader 70% 63% 83%
Kevin McCarthy (CA) Majority Whip 81% - 81%
Jeb Hensarling (TX) Conference Chair 86% 81% 93%
http://www.politico.com/news/stories/1110/44976.html
Wednesday, November 10, 2010
Obama Wants to Wiretap the Internet
Why aren't liberals screaming bloody murder that Obama wants to wiretap the Internet?!
http://www.nytimes.com/2010/09/27/us/27wiretap.html?th&emc=th
http://www.nytimes.com/2010/09/27/us/27wiretap.html?th&emc=th
Monday, May 3, 2010
VA Congressional District 11 GOP Primary, June 8, 2010
I don't know if you've heard much about the June 8 GOP primary for Virginia's 11th Congressional district. I haven't heard much but I've seen a few things. I got some campaign literature in the mail from Herrity that uses the term “conservative” almost as often as it uses the word “the.” Today I ran across a link to a pro-Fimian website that claims that Herrity lied when he said that he's never raised taxes and that he has in fact voted with the Democrats on the Fairfax Board of Supervisors to raise your property taxes, at http://www.herrityhikedtaxes.com/. The website there also says that Herrity voted to create a new taxing district to extend the Metro out to Dulles. The new taxing district will start taxing your home in 2013 at a rate of 20 cents per $100 of assessed value. If they assess your home at $200,000, for instance, then you'd have to pay another $400 per year so that politicians and lobbyists can take the Metro from DC to Dulles on your dime.
Here are the minutes from the Fairfax County Board showing that Herrity voted for a property tax hike from $0.92 to $1.04 per $100, or an extra $0.12 per $100. Again assuming an assessment of $200,000 you'd pay an extra $240 per year on top of the $1840 you'd already be paying, or a total of $2080. That's more than a month and a half of rent for me! http://www.fairfaxcounty.gov/bosclerk/summary/2009/09-04-27.pdf
On the Herrity side they're claiming that Fimian used to say that Herrity was "a conservative's conservative" but neglect to mention that Fimian called Herrity that BEFORE Herrity voted to increase your annual real state taxes by $640 (half a month's rent to me). They also claim that Fimian has no record to run on, but of course that's always true of anyone who hasn't had a previous career in politics.
I think that the worst case for Fimian, ironically, comes from Virginia Congressman Eric Cantor's endorsement of him. Both sides are treating Cantor as though he were the conservative he claims to be, but I just calculated his National Taxpayer's Union lifetime average on spending, taxes and regulation, and it comes to a paltry 69.78 out of 100. In my book that's only a D+. John McCain, whom some conservatives in the last presidential election were saying is "as bad a Obama," actually has a lifetime record of 77.88, or a C+ in my book--a whole letter grade better than Cantor. (Obama actually has a Senate average of 9.33, what I call a K+, so far below an F that Obama couldn't even aspire to get as high as an F.) Still, Herrity has a list of endorsements from a gaggle of local GOP politicians about whom I know nothing and who could be, especially here in northern Virginia, a bunch of liberal, tax-and-spend, gun-control-freak RINOs (Republicans in Name Only).
I've noticed, furthermore, that in politics friendships often transcend or ignore political ideology in ways that ideological activists like me often find hard to understand. Back in Iowa, for instance, I knew a conservative small-town business owner who loved my political columns and voted Republican in most races, but voted for an exceptionally liberal Democrat for the local state house repeatedly because the business owner went to high school with the candidate. Even though his high school chum voted for everything the business owner hated about liberal policies, the business owner proved exceedingly reluctant to consider voting for his chum's conservative opponent. I never did ask for whom he ultimately voted, but if I had to bet real money (if I had any) I'd bet that he reverted to traditional form and voted for his liberal chum over the ideologically-compatible conservative Republican. So while an endorsement from Cantor doesn't say that Fimian's a conservative like Fimian claims, it also doesn't say that Fimian's not a conservative either, and we do know that Herrity has voted to raise taxes at least twice. I’ve always thought that politician endorsements of political candidates generally carry little water (and less information).
I'll try to keep an eye out for more information. On local races of this sort without much attention from the national media (both liberal and alternative) it's harder to get real information. Much of what I’ve read has shed more heat than light, consisting mostly of name-calling and personal attacks rather than information. Based on the little I know so far, however, Fimian seems like the more conservative candidate.
Here are the minutes from the Fairfax County Board showing that Herrity voted for a property tax hike from $0.92 to $1.04 per $100, or an extra $0.12 per $100. Again assuming an assessment of $200,000 you'd pay an extra $240 per year on top of the $1840 you'd already be paying, or a total of $2080. That's more than a month and a half of rent for me! http://www.fairfaxcounty.gov/bosclerk/summary/2009/09-04-27.pdf
On the Herrity side they're claiming that Fimian used to say that Herrity was "a conservative's conservative" but neglect to mention that Fimian called Herrity that BEFORE Herrity voted to increase your annual real state taxes by $640 (half a month's rent to me). They also claim that Fimian has no record to run on, but of course that's always true of anyone who hasn't had a previous career in politics.
I think that the worst case for Fimian, ironically, comes from Virginia Congressman Eric Cantor's endorsement of him. Both sides are treating Cantor as though he were the conservative he claims to be, but I just calculated his National Taxpayer's Union lifetime average on spending, taxes and regulation, and it comes to a paltry 69.78 out of 100. In my book that's only a D+. John McCain, whom some conservatives in the last presidential election were saying is "as bad a Obama," actually has a lifetime record of 77.88, or a C+ in my book--a whole letter grade better than Cantor. (Obama actually has a Senate average of 9.33, what I call a K+, so far below an F that Obama couldn't even aspire to get as high as an F.) Still, Herrity has a list of endorsements from a gaggle of local GOP politicians about whom I know nothing and who could be, especially here in northern Virginia, a bunch of liberal, tax-and-spend, gun-control-freak RINOs (Republicans in Name Only).
I've noticed, furthermore, that in politics friendships often transcend or ignore political ideology in ways that ideological activists like me often find hard to understand. Back in Iowa, for instance, I knew a conservative small-town business owner who loved my political columns and voted Republican in most races, but voted for an exceptionally liberal Democrat for the local state house repeatedly because the business owner went to high school with the candidate. Even though his high school chum voted for everything the business owner hated about liberal policies, the business owner proved exceedingly reluctant to consider voting for his chum's conservative opponent. I never did ask for whom he ultimately voted, but if I had to bet real money (if I had any) I'd bet that he reverted to traditional form and voted for his liberal chum over the ideologically-compatible conservative Republican. So while an endorsement from Cantor doesn't say that Fimian's a conservative like Fimian claims, it also doesn't say that Fimian's not a conservative either, and we do know that Herrity has voted to raise taxes at least twice. I’ve always thought that politician endorsements of political candidates generally carry little water (and less information).
I'll try to keep an eye out for more information. On local races of this sort without much attention from the national media (both liberal and alternative) it's harder to get real information. Much of what I’ve read has shed more heat than light, consisting mostly of name-calling and personal attacks rather than information. Based on the little I know so far, however, Fimian seems like the more conservative candidate.
Sunday, April 25, 2010
CBS News Online Poll Results
A CBS News online poll currently shows 68% give Obama an F on the economy, 60% on foreign policy, 79% on health care, 32% on Afghanistan (not a majority but a plurality), 36% on Iraq (again a plurality), 58% on terrorism, 55% on energy and the environment, 59% on social issues, 78% on bipartisanship, and 64% on his overall job. These are staggeringly bad numbers, and the funny thing is that he gets his least-bad results for the one area on which liberals most oppose him--Afghanistan! Although I gave Obama an F in most areas, I did give him a D on Afghanistan because while he's been losing the war there (much as Bush spent years losing the war in Iraq before he agreed to McCain's surge) he hasn't cut and run like the John Edwards leftists want him to (when they're not too busy cheating on their spouses to care about foreign policy).
Given Obama’s imposition of fascist health care on us, it's no surprise that Obama scores worst on health care, where 79% give him an F, but note that an almost identical share (78%) gives him an F on bipartisanship. Obama made a big deal during the 2008 presidential campaign claiming he would govern with bipartisan support. The liberal media spread Obama's claim far and wide, even though Obama, according to the National Taxpayers Union ratings, has the most liberal voting record on spending, taxes and regulation of any member of the Senate. Mushy moderates tend to fall for such liberal media claims, but the viciously partisan imposition of fascist health care by Obama and his Democrat allies in Congress has, for the moment, revealed to mushy moderates (and even some mushy liberals who are wishing they'd supported Hillary in the Democrat primaries) the preposterous fraud behind Obama's claims to bipartisanship. Obama's fraudulent bipartisan claims should serve as a salient lesson to mushy moderates and mushy liberals not to believe liberal media propaganda about Democrats. People have short political memories, however, so I wouldn't count on mushies learning any long-term political lessons, although I'd be happy to have them prove me wrong.
To vote in the poll and see the results, you can go to http://www.cbsnews.com/8301-503544_162-6116297-503544.html?tag= and then scroll down.
Given Obama’s imposition of fascist health care on us, it's no surprise that Obama scores worst on health care, where 79% give him an F, but note that an almost identical share (78%) gives him an F on bipartisanship. Obama made a big deal during the 2008 presidential campaign claiming he would govern with bipartisan support. The liberal media spread Obama's claim far and wide, even though Obama, according to the National Taxpayers Union ratings, has the most liberal voting record on spending, taxes and regulation of any member of the Senate. Mushy moderates tend to fall for such liberal media claims, but the viciously partisan imposition of fascist health care by Obama and his Democrat allies in Congress has, for the moment, revealed to mushy moderates (and even some mushy liberals who are wishing they'd supported Hillary in the Democrat primaries) the preposterous fraud behind Obama's claims to bipartisanship. Obama's fraudulent bipartisan claims should serve as a salient lesson to mushy moderates and mushy liberals not to believe liberal media propaganda about Democrats. People have short political memories, however, so I wouldn't count on mushies learning any long-term political lessons, although I'd be happy to have them prove me wrong.
To vote in the poll and see the results, you can go to http://www.cbsnews.com/8301-503544_162-6116297-503544.html?tag= and then scroll down.
Democrats Could Lose Even Old Safe Seats
As the New York Times story at the link below demonstrates, even the liberal media have to admit that the Democrats' creation of massive new Big Business subsidies and shoving of fascist health care down our throats have created such a backlash against the Democrats that they might lose even some of their traditionally safe seats in Congress. It's the very likelihood that Democrats will suffer major losses in November that leads them to their current scorched earth policy, trying to impose as much fascist control as possible over our lives now, knowing that when they're back in the minority they can use the filibuster to stop Americans from repealing the fascism that Democrats are imposing on us now. I don’t expect Democrats to lose the 40 House seats required to lose their majority entirely this November alone, nor to lose the Senate (which would require Democrats to lose every competitive contest). I do expect, however, that they will suffer substantially more than the traditional midterm congressional losses, losing their ability to overcoming virtually any filibuster in the Senate while losing a practical, working House majority in support of most of their fascist policies.
http://www.nytimes.com/2010/04/25/us/politics/25campaign.html?th&emc=th
http://www.nytimes.com/2010/04/25/us/politics/25campaign.html?th&emc=th
GM Used TARP to "Repay" Loan
You might recall that on October 3, 2008, Democrats in Congress passed a massive bailout of Wall Street investment firms called TARP (Troubled Asset Relief Program), which the Congressional Budget Office (CBO) optimistically (or disingenuously) estimated would cost "only" $700 billion of your tax dollars. Although President Bush supported the massive TARP bailout of Big Business, not a single Republican in the House or Senate supported it.
Seeing big financial institutions get a government bailout, the Big Three American auto companies, GM, Ford and Chrysler, went begging to the federal government on November 19, 2008 to get their own multi-billion-dollar bailout. Congressional Democrats and President Bush agreed to an auto bailout bill that the CBO again optimistically estimated would cost "only" $15 billion. Conservative Republicans in the Senate, however, filibustered the auto bailout. Of 41 Republicans in the Senate, only 10 liberal or mushy moderates ones voted to kill the filibuster, along with 40 Democrats and the Senate's two liberal "independents" (who caucus with the Democrats). A supermajority of 31 Republicans (just more than three-fourths) joined 4 Democrats in supporting the filibuster. Without 60 votes to kill the filibuster, the Democrats failed to bring this second Big Business bailout to a vote, and it died.
Not to be deterred by Congress, President Bush unconstitutionally used an "executive order" to amend the first massive bailout law, TARP, to allow himself to give to the auto companies some of the money intended to bail out financial firms. GM and Chrysler eagerly took the TARP money, but Ford executives, wanting to keep their jobs, changed their minds. (Once Obama became president, he used the Bush-Democrat bailout of GM to force the old GM CEO to resign.)
On February 18, 2009, GM and Chrysler again approached the federal government, hats in hand, begging for another bailout. On February 24, Obama announced in an address before the joint session of Congress that he would give GM and Chrysler another $15 billion of your tax money. (It amazes me that liberal Democrats still run around claiming that it's Republicans and not liberal Democrats who support Big Business.)
You might have noticed recently that the new CEO of GM has been running TV ads where he crows about how GM has paid back the billions of dollars of your tax money that the federal government gave GM so that the United Auto Workers could continue to be the most overpaid union workers in the world. As Senator Chuck Grassley (R-Iowa) reports in the two stories below, however, Obama's GM CEO should be eating crow instead: TARP's own inspector general, Neil Barofsky, reports that GM merely used more TARP money to "pay back" the subsidies, which came largely from TARP money in the first place! So GM's much-vaunted repayment is half like using your VISA card to pay off your MasterCard--and half like using your VISA card to repay your VISA card! I must say that the Democrats' capacity for blatant deception never ceases to amaze me.
http://newsmax.com/InsideCover/charles-grassley-gm-bailout/2010/04/23/id/356756?s=al&promo_code=9CE6-1
http://www.foxnews.com/politics/2010/04/22/grassley-slams-gm-administration-loans-repaid-bailout-money/
Seeing big financial institutions get a government bailout, the Big Three American auto companies, GM, Ford and Chrysler, went begging to the federal government on November 19, 2008 to get their own multi-billion-dollar bailout. Congressional Democrats and President Bush agreed to an auto bailout bill that the CBO again optimistically estimated would cost "only" $15 billion. Conservative Republicans in the Senate, however, filibustered the auto bailout. Of 41 Republicans in the Senate, only 10 liberal or mushy moderates ones voted to kill the filibuster, along with 40 Democrats and the Senate's two liberal "independents" (who caucus with the Democrats). A supermajority of 31 Republicans (just more than three-fourths) joined 4 Democrats in supporting the filibuster. Without 60 votes to kill the filibuster, the Democrats failed to bring this second Big Business bailout to a vote, and it died.
Not to be deterred by Congress, President Bush unconstitutionally used an "executive order" to amend the first massive bailout law, TARP, to allow himself to give to the auto companies some of the money intended to bail out financial firms. GM and Chrysler eagerly took the TARP money, but Ford executives, wanting to keep their jobs, changed their minds. (Once Obama became president, he used the Bush-Democrat bailout of GM to force the old GM CEO to resign.)
On February 18, 2009, GM and Chrysler again approached the federal government, hats in hand, begging for another bailout. On February 24, Obama announced in an address before the joint session of Congress that he would give GM and Chrysler another $15 billion of your tax money. (It amazes me that liberal Democrats still run around claiming that it's Republicans and not liberal Democrats who support Big Business.)
You might have noticed recently that the new CEO of GM has been running TV ads where he crows about how GM has paid back the billions of dollars of your tax money that the federal government gave GM so that the United Auto Workers could continue to be the most overpaid union workers in the world. As Senator Chuck Grassley (R-Iowa) reports in the two stories below, however, Obama's GM CEO should be eating crow instead: TARP's own inspector general, Neil Barofsky, reports that GM merely used more TARP money to "pay back" the subsidies, which came largely from TARP money in the first place! So GM's much-vaunted repayment is half like using your VISA card to pay off your MasterCard--and half like using your VISA card to repay your VISA card! I must say that the Democrats' capacity for blatant deception never ceases to amaze me.
http://newsmax.com/InsideCover/charles-grassley-gm-bailout/2010/04/23/id/356756?s=al&promo_code=9CE6-1
http://www.foxnews.com/politics/2010/04/22/grassley-slams-gm-administration-loans-repaid-bailout-money/
Friday, April 23, 2010
Socialist Porn?
The historically savvy among you might think I'm referring to the infamous pornography produced under the rule of the German National Socialist chancellor, Adolf Hitler, but as the following story shows, I'm actually referring to the use of taxpayer-purchased computers at the Securities and Exchange Commission, a federal agency dedicated to socializing as much of American capital markets as possible. While the SEC bureaucrats pretend to regulate capital markets to protect investors, they actually spend your tax dollars surfing the web for Internet porn! With thriving free markets in porn, we hardly need socialist porn, but the following story sure gives me a great laugh. I say let's fire the whole lot of them, close down the SEC, and let them go home to surf for Internet porn on their own computers! :-D
http://www.foxnews.com/politics/2010/04/23/republicans-slam-sec-porn-surfing-report/
http://www.foxnews.com/politics/2010/04/23/republicans-slam-sec-porn-surfing-report/
Friday, April 16, 2010
US Navy Denied Access to FoxNews.com
I've just learned that the government has denied the US Navy access to FoxNews.com. You can read about it at http://www.foxnews.com/politics/2010/04/16/navy-access-fox-news-web-site-blocked/. Do we really believe the blockage is just an "error?"
Wednesday, April 14, 2010
The Story On Medical Insurance
The story on medical insurance starts with how WW II wage and price controls led defense contractors to offer health insurance as additional, unregulated income to attract workers from other industries since the wage and price controls prohibited paying higher wages. Congress exempted health insurance from taxation too, making it all the more attractive. Once labor unions—which the New Deal turned into government-enforced labor cartels—got a taste of tax-free health insurance they began to demand not just more of it, but an ever-increasing share of their income in it. The pro-union government policies of the 1950s and especially 1960s, and reduced competition from the European companies laid low by the war, meant that large American corporations gave in to these demands.
By the late 1960s, when government started inflating the money supply to pay for the Great Society social programs and the Vietnam War without overtly raising taxes (inflation is a covert tax on your money), large, tax-free health insurance polices had become the norm for Big Labor. All that money being diverted into health care had the predictable effect of raising health care prices relative to the prices of other goods and service. When the stagflation of the 1970s pushed millions of Americans into higher tax brackets while lowering their real (inflation-adjusted) pre-tax earnings, they looked at Big Labor and started demanding the same sorts of benefits. When these other Americans got a taste of tax-free medical insurance, they wanted more too. It took a while, but where once very few people had health insurance and nobody needed it for a simple annual physical, decades later almost every takes it for granted and believes they need it. (I have actually survived without it, but that’s another story.) All that additional spending on health care naturally raised health care prices relative to other goods and services even more than Big Labor’s health benefits did.
As tax-free health insurance became more widespread, it also mutated from health insurance into prepaid medical care. Unlike real insurance, where if you use it you end up paying higher rates, with much so-called health insurance, if you don’t use it, you lose it, and within certain parameters you do not pay more. I, for instance, have exhausted both the office visit benefit and the diagnostic benefit of the half-hearted health insurance that I buy through my private university as a part-timer there. My rates will not rise as a result of my using my benefits. If I were, on the other hand, to smash up my 12-year-old car, I would get almost no money from the insurance company (because of the age of the car and because the policy, as real insurance, has a large deductible) and they would almost certainly raise my rates (assuming I’m at fault). (In Denver I had a minor accident where I caught the side-stripping of my car on the wall of a parking garage. Repairing it cost just under that the amount for which Colorado law would allow them to raise my premiums, so they cancelled my policy instead! Thank you state of Colorado for pricing me out of the market! The state of VA did the same thing for private health insurance for me which is part of why I went without insurance entirely for a while—actually a couple of whiles.)
The widespread development of prepaid heath care has predictably driven up prices of medical care relative to prices of other goods and services. It’s very much like the impact of student loans: a cat chasing its tail; the faster it runs, the faster the tail runs away from it.
Health insurance also suffers from state as well as federal regulation. If you have several preexisting conditions, for instance, the natural response of an insurance company would be to 1. Exclude the preexisting conditions or 2. Charge more for preexisting conditions. When I first went to apply for an individual health insurance plan, I had three pre-existing conditions. Aetna, which so far as I can tell seems to be the best of the over-regulated lot of big health insurance (pre-paid health) companies, increases the base premium by 25% for each preexisting condition. So for my three conditions they would have been willing to write me a policy with a premium 75% higher than the base. I would have paid it too, as my family was willing to help out (I couldn’t have afforded even the base at that time). My family was willing to cough up the $450 per month to have me insured. The state of Virginia, however, in its infinite liberal compassion, “protected” me from “price gouging” by limiting insurance companies to a 50% increase in the premium over the base. Aetna couldn’t legally charge me for all three preexisting conditions, so the VA price control, rather than protecting me, simply priced me out of the market. Instead of having a policy at 175% of base, I had no policy at 150% of base. Neat, huh?
And at the federal level during the Clinton years liberals came up with a “solution” for my lack of heath care: they passed a law (called HIPPA) allowing states to create state monopolies for “high-risk” patients. The law allows either a fascist monopoly, wherein the state government grants the monopoly to a state-regulated private company, or a communist monopoly, wherein the state offers the insurance itself. In VA we have the fascist version, and VA happened to have granted the monopoly to Aetna. So VA wouldn’t let Aetna offer me a normal policy for $450/month, but it would let Aetna offer me a high-risk policy for $4500/month. I kid you not.
There is another aspect to the rise of medical prices relative to other goods and services. As real incomes per person rise, as they have done in every year in the industrialized countries since the Industrial Revolution except during recessions and depressions (so that the average real income has risen about 25 times, or 2400%, in the US since 1700), people can afford not just to buy more and better food, clothing, shelter, transportation, health care and entertainment, but shift more of their income from food, clothing and shelter to transportation, health care and entertainment. Even for a compulsive overeater in the grips of the disease there’s some sort of point of satiation (called a bliss point in economics), where more food or better quality food doesn’t appeal to the person. While the bliss points for clothing and shelter might range much higher, it’s still true that as income levels have skyrocketed over the past 200+ years, people have shifted proportionately from good, clothing and shelter to transportation, entertainment and medical care. The improvements in medical care have been profound. At the turn of the 19th century, average life expectancy in America was about 55 years. Most likely you and I, had we survived to age 49, wouldn’t plan on lasting much longer. My 81-year-old mother most likely would have been long in her grave. My dad probably would have died 30 years ago rather than 3 years ago. The leading cause of death among woman was childbirth. People would have regarded the tragic death of my high school friend Margie from pregnancy complications as commonplace, not the rare tragedy that it was thanks to our not having socialism destroy medical innovation in America. Men on average lived longer than women, even though women rarely smoked. (Indeed one of the perverse effects of 1960s/1970s feminism, which took smoking as a symbol of liberation, was to reduce the average number of years by which women had come to outlive men, although the gap remained around 7 years or so last I checked.) We pay more for medical care in part because we get far more than we used to, just as we pay more for entertainment because we get far more than we used to.
I don’t hear too many complaints about entertainers making too much money or about the un-affordability of sporting events—and certainly not to the degree where most liberals want the government to seize control of such things. Americans voluntarily choose to spend billions of dollars annually on entertainment instead of health care. At the same time it’s natural that as we get higher incomes we spend an increasing share of treatments that extend our lives and improve its quality. People now routinely spend millions on relief from ailments like allergies and arthritis with which people once just suffered. Cancer used to be an automatic death sentence when I was a kid, so much so that I can recall the days when people were actually afraid to say the word lest just saying it might invoke the disease. Now millions routinely live for years with various types of cancer. Probably some day the treatments that now sometimes cure and often at least slow the cancer will seem crude and barbaric, and we will have much better treatments. The more people spend on these things—whether treatments to remove allergies or treatments to cure cancer—the better they’ll get if scientists and companies are left to do research and respond to patient demands rather than political demands.
The British National Health Service provides a good, brief example of what happens when government seizes control of health care: Britain actually has fewer hospital beds now than it did before government seized control of health care, and for years after we had dialysis routinely in America, British doctors lied to patients with kidney failure, telling the patients that there was nothing medical science could do for them. That’s what socialist medical care—whether fascist or communist—does to doctors: it turns them into liars for the state and stifles medical innovation. The irony under socialist health care is that it forces nearly everyone to have the same lousy care—everyone except the politicians who give themselves better health care, and the very rich who can afford to spent the money to travel to a more market-oriented health care system, like ours (or like ours was before ObamaCare) and pay for good health care.
It’s a perverse trait of humans that if someone invents something that we really, really love we often resent them for it and demand that government seize control of it and give it to use for free. Public transportation in the big cities, for instance, started out entirely private. People found it so useful that they soon clamored to have government first regulate its prices, and then seize control of it entirely. We see the same sort of thing happening now with health care. Sure, government’s labor, taxation and monetary policies have artificially inflated the price of medical care relative to all other goods, but ultimately it’s the wondrous and constantly-improving state of medical care that sets our bliss point for medical care astronomically high, so that as our incomes rise it will continue to be natural for us to spend an increasing share of our income on health care just as we do on entertainment. Setting aside the inflation of medical prices from bad government policy, it’s actually a good thing that we can afford to pay spend increasingly-larger shares of our income on increasingly-better health care.
By the late 1960s, when government started inflating the money supply to pay for the Great Society social programs and the Vietnam War without overtly raising taxes (inflation is a covert tax on your money), large, tax-free health insurance polices had become the norm for Big Labor. All that money being diverted into health care had the predictable effect of raising health care prices relative to the prices of other goods and service. When the stagflation of the 1970s pushed millions of Americans into higher tax brackets while lowering their real (inflation-adjusted) pre-tax earnings, they looked at Big Labor and started demanding the same sorts of benefits. When these other Americans got a taste of tax-free medical insurance, they wanted more too. It took a while, but where once very few people had health insurance and nobody needed it for a simple annual physical, decades later almost every takes it for granted and believes they need it. (I have actually survived without it, but that’s another story.) All that additional spending on health care naturally raised health care prices relative to other goods and services even more than Big Labor’s health benefits did.
As tax-free health insurance became more widespread, it also mutated from health insurance into prepaid medical care. Unlike real insurance, where if you use it you end up paying higher rates, with much so-called health insurance, if you don’t use it, you lose it, and within certain parameters you do not pay more. I, for instance, have exhausted both the office visit benefit and the diagnostic benefit of the half-hearted health insurance that I buy through my private university as a part-timer there. My rates will not rise as a result of my using my benefits. If I were, on the other hand, to smash up my 12-year-old car, I would get almost no money from the insurance company (because of the age of the car and because the policy, as real insurance, has a large deductible) and they would almost certainly raise my rates (assuming I’m at fault). (In Denver I had a minor accident where I caught the side-stripping of my car on the wall of a parking garage. Repairing it cost just under that the amount for which Colorado law would allow them to raise my premiums, so they cancelled my policy instead! Thank you state of Colorado for pricing me out of the market! The state of VA did the same thing for private health insurance for me which is part of why I went without insurance entirely for a while—actually a couple of whiles.)
The widespread development of prepaid heath care has predictably driven up prices of medical care relative to prices of other goods and services. It’s very much like the impact of student loans: a cat chasing its tail; the faster it runs, the faster the tail runs away from it.
Health insurance also suffers from state as well as federal regulation. If you have several preexisting conditions, for instance, the natural response of an insurance company would be to 1. Exclude the preexisting conditions or 2. Charge more for preexisting conditions. When I first went to apply for an individual health insurance plan, I had three pre-existing conditions. Aetna, which so far as I can tell seems to be the best of the over-regulated lot of big health insurance (pre-paid health) companies, increases the base premium by 25% for each preexisting condition. So for my three conditions they would have been willing to write me a policy with a premium 75% higher than the base. I would have paid it too, as my family was willing to help out (I couldn’t have afforded even the base at that time). My family was willing to cough up the $450 per month to have me insured. The state of Virginia, however, in its infinite liberal compassion, “protected” me from “price gouging” by limiting insurance companies to a 50% increase in the premium over the base. Aetna couldn’t legally charge me for all three preexisting conditions, so the VA price control, rather than protecting me, simply priced me out of the market. Instead of having a policy at 175% of base, I had no policy at 150% of base. Neat, huh?
And at the federal level during the Clinton years liberals came up with a “solution” for my lack of heath care: they passed a law (called HIPPA) allowing states to create state monopolies for “high-risk” patients. The law allows either a fascist monopoly, wherein the state government grants the monopoly to a state-regulated private company, or a communist monopoly, wherein the state offers the insurance itself. In VA we have the fascist version, and VA happened to have granted the monopoly to Aetna. So VA wouldn’t let Aetna offer me a normal policy for $450/month, but it would let Aetna offer me a high-risk policy for $4500/month. I kid you not.
There is another aspect to the rise of medical prices relative to other goods and services. As real incomes per person rise, as they have done in every year in the industrialized countries since the Industrial Revolution except during recessions and depressions (so that the average real income has risen about 25 times, or 2400%, in the US since 1700), people can afford not just to buy more and better food, clothing, shelter, transportation, health care and entertainment, but shift more of their income from food, clothing and shelter to transportation, health care and entertainment. Even for a compulsive overeater in the grips of the disease there’s some sort of point of satiation (called a bliss point in economics), where more food or better quality food doesn’t appeal to the person. While the bliss points for clothing and shelter might range much higher, it’s still true that as income levels have skyrocketed over the past 200+ years, people have shifted proportionately from good, clothing and shelter to transportation, entertainment and medical care. The improvements in medical care have been profound. At the turn of the 19th century, average life expectancy in America was about 55 years. Most likely you and I, had we survived to age 49, wouldn’t plan on lasting much longer. My 81-year-old mother most likely would have been long in her grave. My dad probably would have died 30 years ago rather than 3 years ago. The leading cause of death among woman was childbirth. People would have regarded the tragic death of my high school friend Margie from pregnancy complications as commonplace, not the rare tragedy that it was thanks to our not having socialism destroy medical innovation in America. Men on average lived longer than women, even though women rarely smoked. (Indeed one of the perverse effects of 1960s/1970s feminism, which took smoking as a symbol of liberation, was to reduce the average number of years by which women had come to outlive men, although the gap remained around 7 years or so last I checked.) We pay more for medical care in part because we get far more than we used to, just as we pay more for entertainment because we get far more than we used to.
I don’t hear too many complaints about entertainers making too much money or about the un-affordability of sporting events—and certainly not to the degree where most liberals want the government to seize control of such things. Americans voluntarily choose to spend billions of dollars annually on entertainment instead of health care. At the same time it’s natural that as we get higher incomes we spend an increasing share of treatments that extend our lives and improve its quality. People now routinely spend millions on relief from ailments like allergies and arthritis with which people once just suffered. Cancer used to be an automatic death sentence when I was a kid, so much so that I can recall the days when people were actually afraid to say the word lest just saying it might invoke the disease. Now millions routinely live for years with various types of cancer. Probably some day the treatments that now sometimes cure and often at least slow the cancer will seem crude and barbaric, and we will have much better treatments. The more people spend on these things—whether treatments to remove allergies or treatments to cure cancer—the better they’ll get if scientists and companies are left to do research and respond to patient demands rather than political demands.
The British National Health Service provides a good, brief example of what happens when government seizes control of health care: Britain actually has fewer hospital beds now than it did before government seized control of health care, and for years after we had dialysis routinely in America, British doctors lied to patients with kidney failure, telling the patients that there was nothing medical science could do for them. That’s what socialist medical care—whether fascist or communist—does to doctors: it turns them into liars for the state and stifles medical innovation. The irony under socialist health care is that it forces nearly everyone to have the same lousy care—everyone except the politicians who give themselves better health care, and the very rich who can afford to spent the money to travel to a more market-oriented health care system, like ours (or like ours was before ObamaCare) and pay for good health care.
It’s a perverse trait of humans that if someone invents something that we really, really love we often resent them for it and demand that government seize control of it and give it to use for free. Public transportation in the big cities, for instance, started out entirely private. People found it so useful that they soon clamored to have government first regulate its prices, and then seize control of it entirely. We see the same sort of thing happening now with health care. Sure, government’s labor, taxation and monetary policies have artificially inflated the price of medical care relative to all other goods, but ultimately it’s the wondrous and constantly-improving state of medical care that sets our bliss point for medical care astronomically high, so that as our incomes rise it will continue to be natural for us to spend an increasing share of our income on health care just as we do on entertainment. Setting aside the inflation of medical prices from bad government policy, it’s actually a good thing that we can afford to pay spend increasingly-larger shares of our income on increasingly-better health care.
Tuesday, April 13, 2010
Obama and the Working Poor
Thanks to the passage of Obama's fascist health care plan, my insurance company raised the premium on my half-hearted basic health insurance. Since the fascist health care plan imposes so many new regulations and taxes, however, my insurance company dropped the best of the three optional supplementary insurance plans, which I elected when I first started teaching at my online university, so with lower coverage my overall premium actually went down. So my paycheck actually contained an extra $12 today! So I'm paying a tiny bit less to get only one-third the health care benefits. And people say that Obama isn't helping the working poor!
Monday, April 12, 2010
Gallup: Obama & Democrats at All-Time Lows
With the majority of Americans opposed to Obama's imposition of fascist health care on us, it's not surprise that passage of ObamaCare hasn't stopped his downward slide in the polls:
Gallup: Obama Numbers at All-Time Low
http://newsmax.com/InsideCover/obama-gallup-poll-numbers/2010/04/12/id/355405?s=al&promo_code=9BC3-1
nor that Democrats have also reached their all-time low in the polls:
Gallup: Democrats' Approval at Historic Low
http://newsmax.com/InsideCover/gallup-democrats-approval-healthcare/2010/04/12/id/355438
and are trailing in reelection races for November--where they haven't already announced that (because they're trailing) that they're retiring. In the wake of Scott Brown's upset in the great state of Taxachusetts--arguably the most liberal state in the union--probably no seat is safe for Democrats in the wake of their imposition of fascist health care, with its taxes, cuts in medical care, regulations, and prison sentences. As the second story above indicates, Democrats on spring recess are scattering like cockroaches exposed to the light, largely refusing to meet with (angry) constituents who opposed ObamaCare. The real question right now is: how much more damage to American can the liberal Democrats do before those (angry) constituents throw the bums out in November? I think we can expect the Democrats to continue their slash-and-burn tactics to impose as much government control as possible between now and then, lying, cheating and stealing as they did when the House pretended to pass the Senate version of ObamaCare and Obama pretended he could amend legislation by executive order in promising to pro-life Democrats that despite the Senate version's funding of abortions, Obama wouldn't fund any abortions. But hey, welcome to the Democrats, the party of compassion!
Gallup: Obama Numbers at All-Time Low
http://newsmax.com/InsideCover/obama-gallup-poll-numbers/2010/04/12/id/355405?s=al&promo_code=9BC3-1
nor that Democrats have also reached their all-time low in the polls:
Gallup: Democrats' Approval at Historic Low
http://newsmax.com/InsideCover/gallup-democrats-approval-healthcare/2010/04/12/id/355438
and are trailing in reelection races for November--where they haven't already announced that (because they're trailing) that they're retiring. In the wake of Scott Brown's upset in the great state of Taxachusetts--arguably the most liberal state in the union--probably no seat is safe for Democrats in the wake of their imposition of fascist health care, with its taxes, cuts in medical care, regulations, and prison sentences. As the second story above indicates, Democrats on spring recess are scattering like cockroaches exposed to the light, largely refusing to meet with (angry) constituents who opposed ObamaCare. The real question right now is: how much more damage to American can the liberal Democrats do before those (angry) constituents throw the bums out in November? I think we can expect the Democrats to continue their slash-and-burn tactics to impose as much government control as possible between now and then, lying, cheating and stealing as they did when the House pretended to pass the Senate version of ObamaCare and Obama pretended he could amend legislation by executive order in promising to pro-life Democrats that despite the Senate version's funding of abortions, Obama wouldn't fund any abortions. But hey, welcome to the Democrats, the party of compassion!
Tuesday, January 26, 2010
Obama Tacking to the Right After Taxachusetts Defeat?
Last week's special election in Taxachusetts to replace the late Ted Kennedy in the US Senate served as a referendum on Obama's fascist health care plan, with its mandates, taxes, fines and prison sentences. A majority of voters in what's arguably the most liberal state in the republic came out and soundly defeated Democrat Martha Coakley and gave the seat to a Republican for the first time in decades. Scott Brown, the Republican victor, promised during the election to oppose Obama's fascist health care program.
A week later, according to liberal media outlet The New York Times, Obama plans to tack sharply to the right, pretending fiscal conservatism by proposing to freeze some discretionary domestic spending, while leaving defense spending and entitlements untouched. Since entitlement spending makes up the majority of (non-interest) spending in the budget, even Obama's wildly optimistic (some might say, "delusional" or "deceitful") show his alleged freeze reducing the projected $9 trillion in federal budget deficits by only $250 billion, or less than 3%. In the meantime, his budget for the coming fiscal year would actually increase spending even more with another $150 trillion of "stimulus" pork spending. Even the liberal New York Times admits in the story below that all of Obama's talk of freezing the budget would serve mostly as a symbol of fiscal conservatism--while leaving trillions of dollars of new pork on top of the trillions of dollars of continuing pork.
Keep in mind, too, that the federal government uses something called "baseline budgeting." Under baseline budgeting the Congressional Budget Office estimates next year's "need" for spending and then calls that the baseline. Somehow the "need" increases every single year, even after adjusting for inflation and population growth. So baseline federal spending increases every single year in real dollars per person. Obama's proposed "cuts," even if they did materialize, would simply represent reductions in the baseline projected rate of increase, not actual cuts in spending from one year to the next.
Worse still, Congress has shown repeatedly, particularly Democrat Congresses in the 1980s and early 1990s, that "spend more now, cut later" actually means "spend more now, spend even more later." Each time Democrats and mushy moderates like Bob Dole promised Reagan and the first Bush that they would "cut the budget" they actually authorized far more than even the baseline. I would expect Obama, who's first-year spending binge dwarfs anything under FDR or LBJ (or indeed the two combined) to accept let Congress get away with far more in spending increases than Reagan or even Bush did.
Still, while Obama's calls for a budget freeze probably consist of roughly have delusion and half deceit, it's good to see that despite some liberal media claims to the contrary, Scott Brown's victory does indeed signal that Americans are fed up with Obama's liberal policies of tax, spend, regulate and imprison.
http://www.nytimes.com/2010/01/26/us/politics/26budget.html?th&emc=th
A week later, according to liberal media outlet The New York Times, Obama plans to tack sharply to the right, pretending fiscal conservatism by proposing to freeze some discretionary domestic spending, while leaving defense spending and entitlements untouched. Since entitlement spending makes up the majority of (non-interest) spending in the budget, even Obama's wildly optimistic (some might say, "delusional" or "deceitful") show his alleged freeze reducing the projected $9 trillion in federal budget deficits by only $250 billion, or less than 3%. In the meantime, his budget for the coming fiscal year would actually increase spending even more with another $150 trillion of "stimulus" pork spending. Even the liberal New York Times admits in the story below that all of Obama's talk of freezing the budget would serve mostly as a symbol of fiscal conservatism--while leaving trillions of dollars of new pork on top of the trillions of dollars of continuing pork.
Keep in mind, too, that the federal government uses something called "baseline budgeting." Under baseline budgeting the Congressional Budget Office estimates next year's "need" for spending and then calls that the baseline. Somehow the "need" increases every single year, even after adjusting for inflation and population growth. So baseline federal spending increases every single year in real dollars per person. Obama's proposed "cuts," even if they did materialize, would simply represent reductions in the baseline projected rate of increase, not actual cuts in spending from one year to the next.
Worse still, Congress has shown repeatedly, particularly Democrat Congresses in the 1980s and early 1990s, that "spend more now, cut later" actually means "spend more now, spend even more later." Each time Democrats and mushy moderates like Bob Dole promised Reagan and the first Bush that they would "cut the budget" they actually authorized far more than even the baseline. I would expect Obama, who's first-year spending binge dwarfs anything under FDR or LBJ (or indeed the two combined) to accept let Congress get away with far more in spending increases than Reagan or even Bush did.
Still, while Obama's calls for a budget freeze probably consist of roughly have delusion and half deceit, it's good to see that despite some liberal media claims to the contrary, Scott Brown's victory does indeed signal that Americans are fed up with Obama's liberal policies of tax, spend, regulate and imprison.
http://www.nytimes.com/2010/01/26/us/politics/26budget.html?th&emc=th
McConnell: Bernanke Will Win; McCain Opposes
Yesterday I learned that Republican Senate Majority Leader Mitch McConnell of Kentucky predicted that Ben Bernanke will win Senate approval for another term as chairman of the Federal Reserve System. (Technically the position has the title, "Chairman of the Board of Governors of the Federal Reserve System," but as that's a bureaucratic mouthful even for journalists, nobody uses the full title.) McConnell himself wouldn't say which way he would vote, and I suspect is waiting to see which way the political winds are blowing. While some critics on both right and left have criticized the job he's done harshly, many in the big business community like him--as well they might, since he spent tens of billions of dollars bailing them out of the financial mess his inflationary policies helped Fannie Mae and Freddy Mac cause.)
Republican Senator John McCain of Arizona, however, came out in opposition to the reappointment of Bernanke, whose policies destroyed McCain's presidential candidacy in the weeks after the Republican presidential convention in 2008. McCain came out of the convention leading Obama, but fell behind once Bernanke's 2007-2008 inflationary bubble burst as I warned my students it would as far back as fall of 2007.
Republican Senator John Cornyn has also come out against reappointing Bernanke, and according to the news report below, "Some Republicans have imposed a procedural block on Bernanke's confirmation, forcing Senate leaders to secure a super-majority of 60 votes in the 100-member chamber to advance the nomination." Requiring 60 votes can likely means that some Republicans have initiated a filibuster against Bernanke's reappointment. Republican Senator Orin Hatch of Utah, however, supports the nomination, and while two Democrats (Boxer of California and Feingold of Wisconsin) oppose it too, I suspect that President Obama won't have too much trouble rounding up enough Democrats to combine with Hatch and other pro-Bernanke Republicans to kill the filibuster. Still, I can't recall any nominee for Fed chairman to get this sort of opposition on both sides of the aisle in the Senate.
You can read a bit more about the story at http://www.newsmax.com/InsideCover/bernanke-mcconnell-confirmation-vote/2010/01/24/id/347821
Republican Senator John McCain of Arizona, however, came out in opposition to the reappointment of Bernanke, whose policies destroyed McCain's presidential candidacy in the weeks after the Republican presidential convention in 2008. McCain came out of the convention leading Obama, but fell behind once Bernanke's 2007-2008 inflationary bubble burst as I warned my students it would as far back as fall of 2007.
Republican Senator John Cornyn has also come out against reappointing Bernanke, and according to the news report below, "Some Republicans have imposed a procedural block on Bernanke's confirmation, forcing Senate leaders to secure a super-majority of 60 votes in the 100-member chamber to advance the nomination." Requiring 60 votes can likely means that some Republicans have initiated a filibuster against Bernanke's reappointment. Republican Senator Orin Hatch of Utah, however, supports the nomination, and while two Democrats (Boxer of California and Feingold of Wisconsin) oppose it too, I suspect that President Obama won't have too much trouble rounding up enough Democrats to combine with Hatch and other pro-Bernanke Republicans to kill the filibuster. Still, I can't recall any nominee for Fed chairman to get this sort of opposition on both sides of the aisle in the Senate.
You can read a bit more about the story at http://www.newsmax.com/InsideCover/bernanke-mcconnell-confirmation-vote/2010/01/24/id/347821
Sunday, January 24, 2010
Is Bernanke In Trouble?
Two Democratic US Senators, Barbara Boxer of California and Russell Feingold of Wisconsin, signaled last week that they would not support the reappointment of Ben Bernanke as chairman of the Federal Reserve System. While most people regard Boxer and Feingold as belonging to the left wing of the Democratic Party, Bernanke has been unpopular with the right wing of the Republican Party as well for his inflationary policies. (Apparently Boxer and Feingold want MORE inflation, if you can believe that.) With critics on both right and left then, Bernanke might well be in trouble so far as his reappointment goes. If he didn't get reappointed he apparently would be the first presidential nominee for Fed chairman whom Congress did not appoint.
With Bernanke's position as Fed chairman (but not as a Fed board member, for which his separate 14-year term doesn't expire until 2020) in at least some doubt, it's worthwhile to review how he, his successor Alan Greenspan, presidents Bush and Obama, and Congress got the economy into the worst recession since 1946 and possibly since the Great Depression itself. Rather than reinventing the wheel, I'll quote from messages I sent previously.
Tuesday, August 25, 2009
"Greenspan actually started the mess by creating too much money which helped by Fannie Mae and Freddie Mac ended up going mostly into real estate, where it gave people the erroneous impression that it represented more wealth. If the new money had pushed up consumer prices instead of real estate prices, everyone would have recognized it for the inflation that it was. Bernanke tried to stop the inevitable bust that came from Greenspan's inflationary bubble--by creating another inflationary bubble. So instead of just suffering a recession we suffered recession AND inflation, with food and especially gasoline prices spiking sharply in 2008. The spike in fuel prices savaged both the auto makers and the airlines, ensuring an even deeper recession."
Saturday, January 9, 2010
"I've been saying for maybe a year now that the economy likely would get worse before it got better. The trouble started back in the middle of the decade when the Federal Reserve System, under Alan Greenspan, caused the money supply to grow substantially faster than the real economy was growing. Much of the excess money, driven by Fannie Mae and Freddie Mac housing subsidies, wound up in real estate, artificially inflating real estate prices, creating a bubble that eventually had to burst. It did burst, as you probably know, starting in 2006 with the weakest borrowers in the so-called sub-prime mortgage market. The collapse of the sub-prime market led the bubble to burst in the rest of the housing market, dragging down the economy.
"Starting in late 2007 the Federal Reserve System, then (and now) under Ben Bernanke, tried to stop what seemed like a likely recession caused by the first monetary bubble by--yes, that's right, by creating a second monetary bubble. It's a bit like trying to stop a cocaine addict from going through withdrawal by giving him more cocaine. I thought back in 2007 that we might have avoided a recession, but once Bernanke started inflating the money supply drastically faster than the real economy was growing, I predicted that we would have the very recession that he was trying to prevent.
"Bernanke (and surprisingly, Greenspan) are Keynesian economists. Keynesian theory teaches that government can wave a magic wand and create new "aggregate demand" out of thin air. (We'll have more on Keynesian economics for those of you in my macroeconomics class.) By inflating the money supply, the government can create the short-term appearance that aggregate demand has risen, but when people figure out that it's just more money chasing the same level of goods and services, the monetary bubble bursts and rather than having more aggregate demand we actually end up with less of it. So by pursuing the fatally-flawed Keynesian polices to try to prevent the recession, Bernanke actually caused (or helped cause) the very recession he wanted to prevent.
"Fiscal policy has the same effect as monetary policy: all the trillions of dollars of "TARP" and "stimulus" spending passed by the Democrats in Congress and supported by Republican President Bush and Democratic President Obama simply helps circulate all the new money that the Fed creates, making the bubble--and the bust--even bigger. You might recall those skyrocketing oil and gas (and food) prices in 2007, which hurt the auto and airline industries. The skyrocketing prices came directly from the Bernanke-Bush polices of inflate and spend. The stock market bubble of 2007, which alas for John McCain burst right after the Republican convention, also came directly as a result of the Bernanke monetary inflation. Obama and Bernanke have followed the same policies of inflation and government spending that led to the real estate and stock market bubbles, so it's not surprising that more than two years after Bernanke started them to try to stop the downward spiral caused by Greenspan's earlier inflation, we remained mired in recession.
"Bernanke has testified before Congress because he's up for re-appointment and apparently he wants the job again very much. And has he learned his lesson, the lesson for which we paid so dearly in the 1970s and early 1980s, that government can't spend and inflate the economy into real growth? No. He sees his fatally-flawed policies, on the contrary, as having saved the economy from even worse. So more than two years after he started the current mess to try to clean up the mess caused by his predecessor, I'm still saying that I wouldn't be surprised if things get even worse before they get better."
So it sounds like reappointing Ben Bernanke would be a very bad idea indeed, and that if President Obama does reappoint him we could expect a continuation of the current ruinous Keynesian inflationary policy. The catch, however, is that if President Obama doesn't reappoint Bernanke, Barbara Boxer and Russell Feingold want the president to appoint someone even WORSE.
I suspect, when push comes to shove, that Boxer and Feingold, and perhaps a couple of conservative Senate Republicans, will ask Bernanke some embarrassing questions, and he’ll pat himself on the back and claim again he saved us from another Great Depression, and that a majority in the Senate will end up approving his reappointment. Did I mention that I expect the economy to get worse before it gets better?
You can read the full story in The New York Times at http://www.nytimes.com/2010/01/23/business/economy/23fed.html?th&emc=th.
With Bernanke's position as Fed chairman (but not as a Fed board member, for which his separate 14-year term doesn't expire until 2020) in at least some doubt, it's worthwhile to review how he, his successor Alan Greenspan, presidents Bush and Obama, and Congress got the economy into the worst recession since 1946 and possibly since the Great Depression itself. Rather than reinventing the wheel, I'll quote from messages I sent previously.
Tuesday, August 25, 2009
"Greenspan actually started the mess by creating too much money which helped by Fannie Mae and Freddie Mac ended up going mostly into real estate, where it gave people the erroneous impression that it represented more wealth. If the new money had pushed up consumer prices instead of real estate prices, everyone would have recognized it for the inflation that it was. Bernanke tried to stop the inevitable bust that came from Greenspan's inflationary bubble--by creating another inflationary bubble. So instead of just suffering a recession we suffered recession AND inflation, with food and especially gasoline prices spiking sharply in 2008. The spike in fuel prices savaged both the auto makers and the airlines, ensuring an even deeper recession."
Saturday, January 9, 2010
"I've been saying for maybe a year now that the economy likely would get worse before it got better. The trouble started back in the middle of the decade when the Federal Reserve System, under Alan Greenspan, caused the money supply to grow substantially faster than the real economy was growing. Much of the excess money, driven by Fannie Mae and Freddie Mac housing subsidies, wound up in real estate, artificially inflating real estate prices, creating a bubble that eventually had to burst. It did burst, as you probably know, starting in 2006 with the weakest borrowers in the so-called sub-prime mortgage market. The collapse of the sub-prime market led the bubble to burst in the rest of the housing market, dragging down the economy.
"Starting in late 2007 the Federal Reserve System, then (and now) under Ben Bernanke, tried to stop what seemed like a likely recession caused by the first monetary bubble by--yes, that's right, by creating a second monetary bubble. It's a bit like trying to stop a cocaine addict from going through withdrawal by giving him more cocaine. I thought back in 2007 that we might have avoided a recession, but once Bernanke started inflating the money supply drastically faster than the real economy was growing, I predicted that we would have the very recession that he was trying to prevent.
"Bernanke (and surprisingly, Greenspan) are Keynesian economists. Keynesian theory teaches that government can wave a magic wand and create new "aggregate demand" out of thin air. (We'll have more on Keynesian economics for those of you in my macroeconomics class.) By inflating the money supply, the government can create the short-term appearance that aggregate demand has risen, but when people figure out that it's just more money chasing the same level of goods and services, the monetary bubble bursts and rather than having more aggregate demand we actually end up with less of it. So by pursuing the fatally-flawed Keynesian polices to try to prevent the recession, Bernanke actually caused (or helped cause) the very recession he wanted to prevent.
"Fiscal policy has the same effect as monetary policy: all the trillions of dollars of "TARP" and "stimulus" spending passed by the Democrats in Congress and supported by Republican President Bush and Democratic President Obama simply helps circulate all the new money that the Fed creates, making the bubble--and the bust--even bigger. You might recall those skyrocketing oil and gas (and food) prices in 2007, which hurt the auto and airline industries. The skyrocketing prices came directly from the Bernanke-Bush polices of inflate and spend. The stock market bubble of 2007, which alas for John McCain burst right after the Republican convention, also came directly as a result of the Bernanke monetary inflation. Obama and Bernanke have followed the same policies of inflation and government spending that led to the real estate and stock market bubbles, so it's not surprising that more than two years after Bernanke started them to try to stop the downward spiral caused by Greenspan's earlier inflation, we remained mired in recession.
"Bernanke has testified before Congress because he's up for re-appointment and apparently he wants the job again very much. And has he learned his lesson, the lesson for which we paid so dearly in the 1970s and early 1980s, that government can't spend and inflate the economy into real growth? No. He sees his fatally-flawed policies, on the contrary, as having saved the economy from even worse. So more than two years after he started the current mess to try to clean up the mess caused by his predecessor, I'm still saying that I wouldn't be surprised if things get even worse before they get better."
So it sounds like reappointing Ben Bernanke would be a very bad idea indeed, and that if President Obama does reappoint him we could expect a continuation of the current ruinous Keynesian inflationary policy. The catch, however, is that if President Obama doesn't reappoint Bernanke, Barbara Boxer and Russell Feingold want the president to appoint someone even WORSE.
I suspect, when push comes to shove, that Boxer and Feingold, and perhaps a couple of conservative Senate Republicans, will ask Bernanke some embarrassing questions, and he’ll pat himself on the back and claim again he saved us from another Great Depression, and that a majority in the Senate will end up approving his reappointment. Did I mention that I expect the economy to get worse before it gets better?
You can read the full story in The New York Times at http://www.nytimes.com/2010/01/23/business/economy/23fed.html?th&emc=th.
New Jobless Claims Rise Instead of Falling
News organizations often report on the economic expectations of a "consensus" of economists. I'm never quite sure which economists the news organizations regard as forming the consensus, but the reports almost always illustrate that the consensus gets their economic forecast substantially wrong. I suspect that right now news organizations which support President Obama report on the consensus of pro-Obama economists who keep forecasting a recovery in hopes that simply by forecasting it they can make it happen, and then they can give the credit to Obama.
According to the liberal Associated Press, the consensus (in this case of "Wall Street economists" whomever they might be) expected initial claims for unemployment insurance to drop slightly. Instead of dropping, however, initial claims for unemployment insurance rose 36,000 to a seasonally-adjusted total of 482,000. Nearly half a million workers, in other words, lost their jobs last week--up 36,000 from the nearly half a million workers who lost their jobs the previous week.
It's frightening how quickly the failed Keynesian policies of the Bush and Obama administrations and the Democratic Party majority in Congress have caused the US economy to shed jobs. Instead of cutting marginal tax rates and reducing government spending to ease the deadweight losses government imposes on the economy, government has imposed Keynesian policies which have increased the deadweight losses and dragged the economy into what's now clearly the worst recession since 1946, and arguably since the Great Depression itself.
Ben Bernanke, chairman of the Federal Reserve System, has led the charge to try to trick the economy into real growth by inflating the money supply. Increasing the money supply at a rate faster than the rate at which the economy is growing causes inflation, which is a tax on every dollar that you hold. I predicted in the fall of 2007 that if he imposed inflationary Keynesian policies to try to avert a recession that he would cause the very recession he wanted to avert, and that's exactly what happened. Because Bernanke, Obama and the Democratic Congress have continued the policies that Bernanke (and his predecessor, Alan Greenspan) and Bush started, I've predicted that things will continue to get worse before they get better.
I see no sign that Obama, congressional Democrats, or Bernanke have learned their economic lessons, so alas I have to renew my prediction that things will continue to get worse before they get better. I think right now that the best hope for the economy lies in big Republican gains in the 2010 congressional elections, forcing Congress to make cut marginal income tax rates and reign in the federal government's vast multi-trillion-dollar spending binge that started when Bush and congressional Democrats got together in late 2008 to pass the so-called TARP bailout of Fannie Mae, Freddie Mac, and the private financial intuitions that they'd subsidized into making home loans to people who couldn't afford home loans. A big Republican congressional victory too might persuade Bernanke (or whoever replaces him as he's up for reappointment) to stop inflating the money supply too. Unfortunately the officials at Fannie Mae and Freddie Mac are using some of the TARP bailout (that came from your tax dollars) to pay themselves millions of dollars in bonuses. So expect things to continue to get worse before they get better.
There's not much to it, but you can read the original Associated Press (AP) story at http://www.foxnews.com/politics/2010/01/21/new-jobless-claims-rise-expected/. I'd like to point out to those who still think it's Fox News that's the biased network that here we have another example of Fox balance, as it carries the liberal AP story. Fox in fact regularly carries liberal AP stories. I'll also point out that while Fox carried the full speeches of both Republican Scott Brown, and Democrat Martha Coakley, PMSNBC and the Commie News Network carried substantially more of loser Coakley's speech than of winner Brown's. Fox too was the only network to give Hillary Clinton a fair shake against Obama during the 2008 Democrat presidential primaries.
According to the liberal Associated Press, the consensus (in this case of "Wall Street economists" whomever they might be) expected initial claims for unemployment insurance to drop slightly. Instead of dropping, however, initial claims for unemployment insurance rose 36,000 to a seasonally-adjusted total of 482,000. Nearly half a million workers, in other words, lost their jobs last week--up 36,000 from the nearly half a million workers who lost their jobs the previous week.
It's frightening how quickly the failed Keynesian policies of the Bush and Obama administrations and the Democratic Party majority in Congress have caused the US economy to shed jobs. Instead of cutting marginal tax rates and reducing government spending to ease the deadweight losses government imposes on the economy, government has imposed Keynesian policies which have increased the deadweight losses and dragged the economy into what's now clearly the worst recession since 1946, and arguably since the Great Depression itself.
Ben Bernanke, chairman of the Federal Reserve System, has led the charge to try to trick the economy into real growth by inflating the money supply. Increasing the money supply at a rate faster than the rate at which the economy is growing causes inflation, which is a tax on every dollar that you hold. I predicted in the fall of 2007 that if he imposed inflationary Keynesian policies to try to avert a recession that he would cause the very recession he wanted to avert, and that's exactly what happened. Because Bernanke, Obama and the Democratic Congress have continued the policies that Bernanke (and his predecessor, Alan Greenspan) and Bush started, I've predicted that things will continue to get worse before they get better.
I see no sign that Obama, congressional Democrats, or Bernanke have learned their economic lessons, so alas I have to renew my prediction that things will continue to get worse before they get better. I think right now that the best hope for the economy lies in big Republican gains in the 2010 congressional elections, forcing Congress to make cut marginal income tax rates and reign in the federal government's vast multi-trillion-dollar spending binge that started when Bush and congressional Democrats got together in late 2008 to pass the so-called TARP bailout of Fannie Mae, Freddie Mac, and the private financial intuitions that they'd subsidized into making home loans to people who couldn't afford home loans. A big Republican congressional victory too might persuade Bernanke (or whoever replaces him as he's up for reappointment) to stop inflating the money supply too. Unfortunately the officials at Fannie Mae and Freddie Mac are using some of the TARP bailout (that came from your tax dollars) to pay themselves millions of dollars in bonuses. So expect things to continue to get worse before they get better.
There's not much to it, but you can read the original Associated Press (AP) story at http://www.foxnews.com/politics/2010/01/21/new-jobless-claims-rise-expected/. I'd like to point out to those who still think it's Fox News that's the biased network that here we have another example of Fox balance, as it carries the liberal AP story. Fox in fact regularly carries liberal AP stories. I'll also point out that while Fox carried the full speeches of both Republican Scott Brown, and Democrat Martha Coakley, PMSNBC and the Commie News Network carried substantially more of loser Coakley's speech than of winner Brown's. Fox too was the only network to give Hillary Clinton a fair shake against Obama during the 2008 Democrat presidential primaries.
Scott Brown’s Win Called Victory for Netanyahu
In my blog (http://david-lifelibertyandproperty.blogspot.com/) last March and April I documented the 6 anti-Israel appointments that Obama made to his then-new foreign policy apparatus (and the 7th anti-Israel whose appointment we managed to kill), his funding of Hamas in the massive pork "stimulus" bill, and his agreement to do nothing to stop the mass-murdering Muslim monsters ruling Iran from developing nuclear weapons to exterminate Israel. So I thought maybe you'd like hear how nearly a year later we have a little good news for Israel: the election of Republican Scott Brown, who ran against Obama's fascist health care plan and solidly defeated liberal Democrat Martha Coakley in what's arguably the most liberal state in the republic, brings to Congress a solidly pro-Israel US Representative. I'm proud to say that I made a small contribution to Brown's campaign and persuaded a few family members and friends to do likewise.
You can read a little bit more about how Brown's triumph supports Israel again Obama's pro-terrorist policies in the NewsMax story below. Obama has been pressuring Israel to surrender to his Jew-butchering terrorist buddies, and despite liberal assurances to Jewish voters (74% of whom voted for Obama) in the last election, neither Rahm Emanuel nor Democrats in Congress have lifted a finger to protect Israel from Obama. Brown's victory over the Obama-backed candidate takes a tiny step in the direction of protecting Israel, but we need to keep watching Obama like a hawk, as he has conducted most of his anti-Israel machinations under the table. Still it's nice to have something good to report for a change.
'3. Scott Brown’s Win Called Victory for Netanyahu
'The election triumph of Republican Scott Brown in the race to fill Ted Kennedy’s Senate seat in Massachusetts is a “huge victory” for Israeli Prime Minister Benjamin Netanyahu, according to Israel’s Haaretz newspaper.
'Netanyahu has been pressured by Obama to make concessions to the Palestinians to help restart peace talks. But with Republicans now holding 41 seats in the Senate, Obama will be more dependent “on the support of his Republican rivals, the supporters and friends of Netanyahu,” Haaretz reported.
'Netanyahu dragged out negotiations over a freeze on Jewish settlements in the West Bank and East Jerusalem, then declared that a freeze would last for 10 months and end in September — “just in time for U.S. congressional elections in which Democrats are expected to suffer heavy losses,” the newspaper observed.
'“Netanyahu understood he must withstand the pressure until his right-wing supporters recapture a position of power on Capitol Hill and work to rein in the White House’s political activities. The election in Massachusetts . . . will from this moment on be a burden for Obama.”
'With the current political atmosphere in the U.S., “Netanyahu can rely on Republican support to thwart pressure on Israel.”'
You can read the full report in Haaretz ((in English) at http://www.haaretz.com/hasen/spages/1143891.html.
You can read a little bit more about how Brown's triumph supports Israel again Obama's pro-terrorist policies in the NewsMax story below. Obama has been pressuring Israel to surrender to his Jew-butchering terrorist buddies, and despite liberal assurances to Jewish voters (74% of whom voted for Obama) in the last election, neither Rahm Emanuel nor Democrats in Congress have lifted a finger to protect Israel from Obama. Brown's victory over the Obama-backed candidate takes a tiny step in the direction of protecting Israel, but we need to keep watching Obama like a hawk, as he has conducted most of his anti-Israel machinations under the table. Still it's nice to have something good to report for a change.
'3. Scott Brown’s Win Called Victory for Netanyahu
'The election triumph of Republican Scott Brown in the race to fill Ted Kennedy’s Senate seat in Massachusetts is a “huge victory” for Israeli Prime Minister Benjamin Netanyahu, according to Israel’s Haaretz newspaper.
'Netanyahu has been pressured by Obama to make concessions to the Palestinians to help restart peace talks. But with Republicans now holding 41 seats in the Senate, Obama will be more dependent “on the support of his Republican rivals, the supporters and friends of Netanyahu,” Haaretz reported.
'Netanyahu dragged out negotiations over a freeze on Jewish settlements in the West Bank and East Jerusalem, then declared that a freeze would last for 10 months and end in September — “just in time for U.S. congressional elections in which Democrats are expected to suffer heavy losses,” the newspaper observed.
'“Netanyahu understood he must withstand the pressure until his right-wing supporters recapture a position of power on Capitol Hill and work to rein in the White House’s political activities. The election in Massachusetts . . . will from this moment on be a burden for Obama.”
'With the current political atmosphere in the U.S., “Netanyahu can rely on Republican support to thwart pressure on Israel.”'
You can read the full report in Haaretz ((in English) at http://www.haaretz.com/hasen/spages/1143891.html.
Wednesday, January 20, 2010
Petition to Seat Scott Brown Immediately
Now that Republican Scott Brown has won the US Senate seat held by Ted Kennedy for decades, Democrats in the Senate have lost their 60-seat filibuster-proof majority and so can no longer pass Obama's fascist health care plan with its mandates, taxes, fines and criminal prison sentences. Or have they?
Democrat Senate Majority Leader Harry Reid might try to delay the seating of Scott Brown until after the House-Senate Conference Committee sends back a fascist health care bill that reconciles the Senate version with the even worse House version. Reid doesn't care much that a majority of American people oppose the fascist health care bills and that even in Massachusetts, arguably the most liberal state in the republic, thousands of liberal Democrats who voted for Obama came out to vote against Obama's fascist health care bills. Reid himself now runs a serious risk of getting tossed out by the voters of Nevada in his 2010 reelection bid, so he's likely to conduct a scorched-earth policy and impose as much fascist government control on us as possible before Nevadans put an end to his legislative reign of terror and lop off his political head.
To help oppose fascist health care you can sign a petition to demand the immediate seating of Scott Brown at http://www.countryfirstpac.com/seathimnow/?initiativekey=3JTODVIZSRFF. Reid might not be listening, but some other Democrat Senators are: already last night, Virginia's US Senator, Jim Webb, a Democrat with a liberal voting record but a moderate reputation, stated that no vote should on health care reform should take place before the Senate seats Brown. Webb won his Senate seat in 2006 by only three-tenths of a percent against conservative Republican George Allen, and only because 1. The liberal media managed to turn Allen's non-racial "macaca" comment into a racial slur; 2. Voters sick of losing Bush's then-losing policies in Iraq wanted to win; 3. Enough voters were foolish enough to believe that Democrats would win rather than try to cut and run; and 4. The liberal media managed to paint Webb as a "moderate" or even "conservative" Democrat because he'd once served as an Assistant Secretary of the Navy under Reagan (but also called Reagan a fool, a fact that the liberal media loved but hid from you). Webb knows then that he's skating on thin ice. He routinely votes a liberal line, but without much media attention routinely gets away with it. On fascist health care (on which he voted to kill the Republican filibuster) though there's far too much media attention, and he knows that he's in serious danger of not getting reelected in 2012.
So while the petition probably won't affect Reid directly, it can certainly affect Democrat Senators like Webb and others from so-called "purple states" where voters could easily toss out the Democrat Senators with moderate reputations revealed to be liberal and not the moderates they pretended to be. So let's do everything possible to drive the wooden stake through the heart of Obama's fascist health care plan and sign the petition to seat Scott Brown immediately at http://www.countryfirstpac.com/seathimnow/?initiativekey=3JTODVIZSRFF. I've already signed it, and I hope you will too.
Democrat Senate Majority Leader Harry Reid might try to delay the seating of Scott Brown until after the House-Senate Conference Committee sends back a fascist health care bill that reconciles the Senate version with the even worse House version. Reid doesn't care much that a majority of American people oppose the fascist health care bills and that even in Massachusetts, arguably the most liberal state in the republic, thousands of liberal Democrats who voted for Obama came out to vote against Obama's fascist health care bills. Reid himself now runs a serious risk of getting tossed out by the voters of Nevada in his 2010 reelection bid, so he's likely to conduct a scorched-earth policy and impose as much fascist government control on us as possible before Nevadans put an end to his legislative reign of terror and lop off his political head.
To help oppose fascist health care you can sign a petition to demand the immediate seating of Scott Brown at http://www.countryfirstpac.com/seathimnow/?initiativekey=3JTODVIZSRFF. Reid might not be listening, but some other Democrat Senators are: already last night, Virginia's US Senator, Jim Webb, a Democrat with a liberal voting record but a moderate reputation, stated that no vote should on health care reform should take place before the Senate seats Brown. Webb won his Senate seat in 2006 by only three-tenths of a percent against conservative Republican George Allen, and only because 1. The liberal media managed to turn Allen's non-racial "macaca" comment into a racial slur; 2. Voters sick of losing Bush's then-losing policies in Iraq wanted to win; 3. Enough voters were foolish enough to believe that Democrats would win rather than try to cut and run; and 4. The liberal media managed to paint Webb as a "moderate" or even "conservative" Democrat because he'd once served as an Assistant Secretary of the Navy under Reagan (but also called Reagan a fool, a fact that the liberal media loved but hid from you). Webb knows then that he's skating on thin ice. He routinely votes a liberal line, but without much media attention routinely gets away with it. On fascist health care (on which he voted to kill the Republican filibuster) though there's far too much media attention, and he knows that he's in serious danger of not getting reelected in 2012.
So while the petition probably won't affect Reid directly, it can certainly affect Democrat Senators like Webb and others from so-called "purple states" where voters could easily toss out the Democrat Senators with moderate reputations revealed to be liberal and not the moderates they pretended to be. So let's do everything possible to drive the wooden stake through the heart of Obama's fascist health care plan and sign the petition to seat Scott Brown immediately at http://www.countryfirstpac.com/seathimnow/?initiativekey=3JTODVIZSRFF. I've already signed it, and I hope you will too.
Saturday, January 9, 2010
US Loses 85,000 More Jobs in December 2009
I've been saying for maybe a year now that the economy likely would get worse before it got better. The trouble started back in the middle of the decade when the Federal Reserve System, under Alan Greenspan, caused the money supply to grow substantially faster than the real economy was growing. Much of the excess money, driven by Fannie Mae and Freddie Mac housing subsidies, wound up in real estate, artificially inflating real estate prices, creating a bubble that eventually had to burst. It did burst, as you probably know, starting in 2006 with the weakest borrowers in the so-called sub-prime mortgage market. The collapse of the sub-prime market led the bubble to burst in the rest of the housing market, dragging down the economy.
Starting in late 2007 the Federal Reserve System, then (and now) under Ben Bernanke, tried to stop what seemed like a likely recession caused by the first monetary bubble by--yes, that's right, by creating a second monetary bubble. It's a bit like trying to stop a cocaine addict from going through withdrawal by giving him more cocaine. I thought back in 2007 that we might have avoided a recession, but once Bernanke started inflating the money supply drastically faster than the real economy was growing, I predicted that we would have the very recession that he was trying to prevent.
Bernanke (and surprisingly, Greenspan) are Keynesian economists. Keynesian theory teaches that government can wave a magic wand and create new "aggregate demand" out of thin air. (We'll have more on Keynesian economics for those of you in my macroeconomics class.) By inflating the money supply, the government can create the short-term appearance that aggregate demand has risen, but when people figure out that it's just more money chasing the same level of goods and services, the monetary bubble bursts and rather than having more aggregate demand we actually end up with less of it. So by pursuing the fatally-flawed Keynesian polices to try to prevent the recession, Bernanke actually caused (or helped cause) the very recession he wanted to prevent.
Fiscal policy has the same effect as monetary policy: all the trillions of dollars of "TARP" and "stimulus" spending passed by the Democrats in Congress and supported by Republican President Bush and Democratic President Obama simply helps circulate all the new money that the Fed creates, making the bubble--and the bust--even bigger. You might recall those skyrocketing oil and gas (and food) prices in 2007, which hurt the auto and airline industries. The skyrocketing prices came directly from the Bernanke-Bush polices of inflate and spend. The stock market bubble of 2007, which alas for John McCain burst right after the Republican convention, also came directly as a result of the Bernanke monetary inflation. Obama and Bernanke have followed the same policies of inflation and government spending that led to the real estate and stock market bubbles, so it's not surprising that more than two years after Bernanke started them to try to stop the downward spiral caused by Greenspan's earlier inflation, we remained mired in recession.
Bernanke has testified before Congress because he's up for re-appointment and apparently he wants the job again very much. And has he learned his lesson, the lesson for which we paid so dearly in the 1970s and early 1980s, that government can't spend and inflate the economy into real growth? No. He sees his fatally-flawed policies, on the contrary, as having saved the economy from even worse. So more than two years after he started the current mess to try to clean up the mess caused by his predecessor, I'm still saying that I wouldn't be surprised if things get even worse before they get better.
You can read more about the bad employment news at
http://www.nytimes.com/2010/01/09/business/economy/09jobs.html?th&emc=th
Starting in late 2007 the Federal Reserve System, then (and now) under Ben Bernanke, tried to stop what seemed like a likely recession caused by the first monetary bubble by--yes, that's right, by creating a second monetary bubble. It's a bit like trying to stop a cocaine addict from going through withdrawal by giving him more cocaine. I thought back in 2007 that we might have avoided a recession, but once Bernanke started inflating the money supply drastically faster than the real economy was growing, I predicted that we would have the very recession that he was trying to prevent.
Bernanke (and surprisingly, Greenspan) are Keynesian economists. Keynesian theory teaches that government can wave a magic wand and create new "aggregate demand" out of thin air. (We'll have more on Keynesian economics for those of you in my macroeconomics class.) By inflating the money supply, the government can create the short-term appearance that aggregate demand has risen, but when people figure out that it's just more money chasing the same level of goods and services, the monetary bubble bursts and rather than having more aggregate demand we actually end up with less of it. So by pursuing the fatally-flawed Keynesian polices to try to prevent the recession, Bernanke actually caused (or helped cause) the very recession he wanted to prevent.
Fiscal policy has the same effect as monetary policy: all the trillions of dollars of "TARP" and "stimulus" spending passed by the Democrats in Congress and supported by Republican President Bush and Democratic President Obama simply helps circulate all the new money that the Fed creates, making the bubble--and the bust--even bigger. You might recall those skyrocketing oil and gas (and food) prices in 2007, which hurt the auto and airline industries. The skyrocketing prices came directly from the Bernanke-Bush polices of inflate and spend. The stock market bubble of 2007, which alas for John McCain burst right after the Republican convention, also came directly as a result of the Bernanke monetary inflation. Obama and Bernanke have followed the same policies of inflation and government spending that led to the real estate and stock market bubbles, so it's not surprising that more than two years after Bernanke started them to try to stop the downward spiral caused by Greenspan's earlier inflation, we remained mired in recession.
Bernanke has testified before Congress because he's up for re-appointment and apparently he wants the job again very much. And has he learned his lesson, the lesson for which we paid so dearly in the 1970s and early 1980s, that government can't spend and inflate the economy into real growth? No. He sees his fatally-flawed policies, on the contrary, as having saved the economy from even worse. So more than two years after he started the current mess to try to clean up the mess caused by his predecessor, I'm still saying that I wouldn't be surprised if things get even worse before they get better.
You can read more about the bad employment news at
http://www.nytimes.com/2010/01/09/business/economy/09jobs.html?th&emc=th
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