Tag Archives: Economy

Economy, Media, War On Terror

Bin Laden Audio Message

Yeah. It is this Muslim, and his followers, that the West needs to neutralize. Maybe NPR will rebroadcast this. Do ya think?

As an aside, even Bin Ladin sees America headed towards bankruptcy, were it a perfect world. There are some vacancies in Obama’s economic czar department. But left up to Obama and his advisers, we’ll just print more money, create trickle up poverty, and transform America into just another broke and lazy country whose people are dependent on government. Oh happy day. NOT

Link: MEMRI, Bin Laden in Audio Message to France: As You Kill, So Shall You Be Killed

Economy, Politics, Uncategorized

Videos On Politics And Immigration

Below are some videos that even the hardened Left can understand. From the funny to not so funny.

Here is a serious video that addresses world poverty and immigration. It is something that the thugs in the United Nations should be forced to watch.

The answer to world poverty can be summed up in one word. Freedom. That is what made the United States what it is in a matter of a couple hundred years.  When people are allowed the freedom to have the fruits of their labor, and not be under the thumb of a dictator or some violent and ancient theocracy, they will thrive. And freedom is the way that these people will be able to help themselves right where they live.

Given where we are today, this funny video looks 20 years into the future.

Funny, isn’t it?

Senator Barbara Boxer worked so hard for that title. This parody explains it all.

And then there is this gem. At a debate sponsored by the League of Women Voters, the moderator Kathy Tate-Bradish, an Organizing For America member, scolded the audience for saying the Pledge of Allegiance at the beginning of the debate. The debate was for Illinois’ 8th Congressional District candidates Joe Walsh, Melissa Bean and Bill Scheurer at Grayslake Central High School.

Apparently she had an agenda of her own. She should have embraced the idea, after she joined in the pledge herself.

The Executive Director of the League of Woman Voters and former ACORN worker, Jan Czarnik, accused supporters of Republican candidate Joe Walsh and tea party members of bully the organization. Right. Saying the Pledge of Allegiance is something you should have to be coerced into doing?

Czarnik also characterized the 300 member audience, standing and reciting the Pledge of Allegiance as, “phony patriotism.”

Apparently, that’s the way the League of Women Voters roll.

China, Economy, Fair Tax, Politics, Uncategorized

Is Currency Devaluation Coming?

1 Comment

That’s what the group of global financial egg-heads like Timothy Geithner are looking to avoid. The group of 20, G-20, ended their two-day meeting in South Korea Saturday with nothing to show for it but words that express a need for some way to prevent that from happening. On the positive side, there seemed to be more faith in a free market than a government manipulated one to manage the global economy.

The grouping, which accounts for about 85 percent of the global economy, said in a statement that it will “move towards more market determined exchange rate systems” and “refrain from competitive devaluation of currencies.”

The agreement comes amid fears that nations were on the verge of a “currency war” in which they would devalue currencies to gain an export advantage over competitors – causing a rise in protectionism and damaging the global economy.

Funny how Geithner’s position on free markets changes when he goes abroad. Considering the negative attitude that Geithner and his boss have over free markets here, is there any doubt that we are looking at our future with headlines like these?

Group of 20 vows to avoid currency devaluations and G-20 Vows to Avoid a Currency War

With our debt sitting squarely on the shoulders of future generations of Americans, much of which is owned by China, it’s time for a new dynamic. Something that will maximize business opportunity and job growth. Something that will grow the private-sector economy. Given that the devaluation of the dollar is not a matter of if but of when, the imperative has to be growing the economy, not government.

That new dynamic is a bold replacement of our current tax code. The current tax code taxes work, investment, and productivity, everything we want, to one that only taxes consumption. It is called the FairTax.

Implementing the FairTax does not increase the debt. Aside from being progressive in nature, it will attract new international business and bring back trillions of dollars of business capital that has fled this country because of the current tax code. Putting $10-15 Trillion to work in the United States, in other words, letting the market drive the economy instead of politicians in Washington, is the best way to hedge against the devaluation and hyper-inflation that may follow.

And speaking of the FairTax, Gov. Huckabee challenges anyone in Washington to a debate about the merits of it.

2010 Election, China, Economy, Politics

China Putting Mineral Embargo On The West

Have you heard? Probably not. Sad thing is, the President and the State Department probably haven’t heard either. Either that, or they don’t have the time to spend on national security and ‘our image around the world’ when the President is on the campaign trail. And where is our Secretary of State on this?

China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted some shipments of those materials to the United States and Europe, three industry officials said this week.

That President Obama is so focused on political expediency to the detriment of his constitutional duties, qualifies as a dereliction of duty. Then again, he prioritizes as a community organizer would, not as a president should.

Are you feeling more secure now?

Link: China Said to Expand Rare Earths Embargo to West – NYTimes.com.

Economy, Europe, Politics, Uncategorized

France’s Sarkozy, Making The Hard Choices

Doing what every nation in Europe needs to do (and the United States is no exception), French President Nicolas Sarkozy has the guts to do what needs to be done to prevent France from becoming another Greece. The European economies are over-run with debt and unsustainable pension plans, retirement plans, employment laws, and social welfare plans that they can no longer afford. It is to the point that reform means ‘taking away.’

We have the same problem here. It is just as serious, but not as bad. For now. But that will change in a few short years.

Labor unions like the SEIU know all about it. They don’t want to give up anything in Europe, and are fighting tooth and nail in this country, with the help of the Obama administration, to find a way for the government to bail them out of their un-sustainable pension and benefit plans. The plan here is to just nationalize industry, then the union’s problem becomes our (the taxpayers’) problem. And you see  how well that’s working out in France.

The amazing thing is that, having lived under socialism for over 60 years, Europe is trying to get away from it while President Obama and his advisors are rushing us towards it.

Links: The State of the Welfare State |  Sarkozy defies French strikers on pension reform |  And closer to home: Public Sector Pension Funding Just Became Three Times More Fun

Economy, Media, Politics

Politicians And The Dumb Masses

One of President Obama’s campaign promises was not to raise taxes on middle-class Americans. So here’s my question: If there’s a corporate tax increase either in the form of “cap and trade” or income tax, does it turn out to be a middle-class tax increase? Most people would say no but let’s look at it.

There’s a whole subject area in economics known as tax incidence — namely, who bears the burden of a tax? The first thing that should be recognized is that the burden of a tax is not necessarily borne by the party upon whom it is levied. That is, for example, if a sales tax is levied on gasoline retailers, they don’t bear the full burden of the tax. Part of it is shifted to customers in the form of higher gasoline prices.

Suppose your local politician tells you, as a homeowner, “I’m not going to raise taxes on you! I’m going to raise taxes on your land.” You’d probably tell him that he’s an idiot because land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, “Williams, that’s pretty elementary, isn’t it?” Not quite.

What about the politician who tells us that he’s not going to raise taxes on the middle class; instead, he’s going to raise corporate income taxes as means to get rich corporations to pay their rightful share of government? If a tax is levied on a corporation, and if it is to survive, it will have one of three responses, or some combination thereof. One response is to raise the price of its product, so who bears the burden? Another response is to lower dividends; again, who bears the burden? Yet another response is to lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of the tax.

Because corporations have these responses to the imposition of a tax, they are merely government tax collectors.

They collect money from people and send it to Washington. Therefore, you should tell that politician, who promises to tax corporations instead of you, that he’s an idiot because corporations, like land, do not pay taxes. Only people pay taxes.

Here’s another tax question, even though it doesn’t sound like it. Which workers receive higher pay: those on a road construction project moving dirt with shovels and wheelbarrows or those moving dirt atop a giant earthmover? If you said the worker atop the earthmover, go to the head of the class. But why? It’s not because he’s unionized or that construction contractors have a fondness for earthmover operators. It’s because the worker atop the earthmover is working with more capital, thereby making him more productive. Higher productivity means higher wages.

It’s not rocket science to conclude that whatever lowers the cost of capital formation, such as lowering the cost of investing in earthmovers, enables contractors to purchase more of them. Workers will have more capital to work with and as a result enjoy higher wages. Policies that raise the cost of capital formation such as capital gains taxes, low depreciation allowances and corporate taxes, thereby reduce capital formation, and serve neither the interests of workers, investors nor consumers. It does serve the interests of politicians who get more resources to be able to buy votes.

You might wonder how congressmen can get away with taxes and other measures that reduce our prosperity potential. Part of the answer is ignorance and the anti-business climate promoted in academia and the news media. The more important reason is that prosperity foregone is invisible. In other words, we can never tell how much richer we would have been without today’s level of congressional interference in our lives and therefore don’t fight it as much as we should.

The above was graciously lifted from a piece entitled Politicians Exploit Economic Ignorance by Walter E. Williams.

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

2010 Election, Economy, Media, Politics

‘Shovel Ready,’ Obama’s ‘Read My Lips’

Couldn’t help but notice the comparison here. Bush 41 made his pledge not to raise taxes with his ‘read my lips’ statement at the 1988 Republican National Convention as he accepted the nomination. He made that case as part of his platform. Similarly, candidate Obama ran on jump starting the economy with ‘shovel ready’ projects. He made the same case in passing the $787 billion porkulus bill. But that’s where the similarity ends. For Obama, there was no time to read the bill. But the money was going to be spent on projects that could start within 90 days, he said.

Aside from Ted Kennedy’s funeral, what other shovel ready jobs were there? Today President Obama says there’s no such thing as ‘shovel ready.’

As for the media reaction. That remains to be seen. You will recall that they skewered Bush 41 after he raised taxes, relentlessly, day after day, front page, above the fold. (Isn’t that what Barack Obama wants to do today? Raise taxes?) All those who think the media will treat Obama the same way, please raise your hand. Be on the lookout for it. I hope I’m wrong but I don’t think you’ll see the same kind of reaction. Even though Obama’s deception put our country into debt for generations to come, I think the media will give him a pass. But come November 2, I doubt the voters will.

2010 Election, Economy, Florida, Media, Politics

Khavari For Governor YouTube Video

1 Comment

This isn’t a flashy video produced in Hollywood. It’s not funded by the coffers of the DNC or the RNC. And it’s not funded by special interests. Unless by ‘special interests’ you mean you and me and individual citizens around the State of Florida who care as much about Florida as he does. Right, it’s not fancy or flashy. And, it doesn’t attack the character of his opponents nor does it call them evil or criminals. I already did that.

What it does do is show you how sincere candidate Farid Khavari (I) is on helping the State of Florida and its citizens. He details the reason you should vote for him. He doesn’t tell you why you should not vote for someone else. How refreshing!

Isn’t this the kind of person we’ve been looking for to be chief executive of our state? Farid Khavari is the only candidate with an actual plan for the State of Florida that will promote economic recovery and create private sector jobs while making it possible for people to stay in their homes.

Like him, I invite you to go to his website and check out his plan for yourself. Then on November 2, vote for the person you think can deliver for Florida instead of the candidate with the most TV and print exposure. I think you will find that to be Dr. Farid Khavari, Independent candidate for Governor of the State of Florida.

Link: Khavari For Governor

Economy, Politics

The FUD Factor Explained

Former Federal Reserve Chairman Alan Greenspan, trusted by the previous administration and the current one, especially after he endorsed the government bailouts of both, describes in this piece precisely what the FUD Factor is all about. Fear, Uncertainty, and Doubt. It explains, as he details in this piece, why there exists a jobless recovery. If by ‘recovery’ you mean not a total collapse of the economy.

Fear undermines America’s recovery

By Alan Greenspan

Although rising moderately this year, US fixed capital investment has fallen far short of the level that history suggests should have occurred given the recent dramatic surge in corporate profitability. Combined with a collapse of long-term illiquid investments by households, they have frustrated economic recovery. These shortfalls, the result of widespread private-sector anxiety over America’s future, have defused much, if not most, of the impact of the administration’s fiscal stimulus. Moreover, the activism embodied in such programmes has itself stoked the degree of anxiety.

The instinctive reaction of businessmen and householders to uncertainty is to disengage from those activities that require confident predictions of how the future will unfold. For non-financial corporations (half of gross domestic product), the disengagement is best measured by the share of liquid cash flow allocated to illiquid long-term fixed asset investment. In the first half of 2010, that share fell to 79 per cent, its lowest reading in the 58 years for which data are available.

The corresponding surge in the proportion of liquid assets following the Lehman bankruptcy was the most rapid in postwar history, amounting to a rise of nearly $400bn. By mid-2010 total liquid assets had risen to $1,800bn, the highest share of total assets in nearly a half century. Without this unprecedented cash flow diversion, the rate of increase in capital expenditures of non-financial corporations would have been double the modest increase that emerged during the first half of this year.

In such an environment, the equity premium (the excess return that equity produces over the risk-free rate) has become exceptionally elevated. As estimated by JPMorgan, it is currently “at a 50-year high”.

American households have shifted their cash flows from illiquid real estate and consumer durables to paying down mortgages and consumer debt. Commercial banks are exhibiting a similar reduced tolerance towards risk on partially illiquid lending. A trillion dollars of excess reserves remains parked, largely immobile, at Federal Reserve banks yielding only 25 basis points with little evidence of banks seeking higher returns through increased lending.

It is this rapid rise in aversion to illiquid risk that explains a large part of the anaemic recovery in the US. Construction outlays, almost all long-term, are down 43 per cent in real terms since their peak in 2006 and reflect the heaviest price discounting of any major fixed asset class.

The pronounced lack of tolerance for illiquid investment risk is quite at variance with current relatively narrow corporate bond spreads. Since a portfolio of liquid privately issued 10-year bonds can be sold virtually at will, the portfolio is the equivalent of a very short-term asset that happens to exhibit high price and interest rate volatility. The difference between liquid and illiquid assets is the reason non-financial corporations, whose assets are largely illiquid, maintained net worth amounting to 45 per cent of assets at the end of 2006 (just prior to the onset of the crisis) compared with 10 per cent for commercial banks.

In these extraordinarily turbulent times, it is not surprising that important disagreements have emerged among policymakers and economists. Almost all agree activist government was necessary in the immediate aftermath of the Lehman bankruptcy. The US Treasury’s support of banks through the troubled asset relief programme (Tarp), and the Federal Reserve’s support of the commercial paper market and money market mutual funds, were critical in stemming the freefall.

But the value of fiscal stimulus has been the subject of wide debate. Fiscal stimulus – the amount of tax cutting and federal spending increases – from the programme’s inception in early 2009 was approximately $480bn. During the same period, the cumulative shortfall in private fixed capital investment measured against the long-term average shares of cash flow appears to have been about $325bn.

Most in the business community attribute the massive rise in their uncertainty to the collapse of economic activity, but its continuance since the recovery took hold is attributed to the widespread major restructuring of our financial system and the burgeoning federal deficit, which creates critical future tax uncertainty.

Only the deficit lends itself to being quantified. Fixed capital investment as a share of cash flow over the past four decades has been significantly (negatively) correlated with the ratio of the federal deficit to GDP, with the deficit ratio leading the fixed investment share by nine months.* This would imply that the federal deficit as a percentage of GDP since September 2008 (cyclically adjusted to remove the effect of a weaker economy), accounted for as much as a third of the $325bn shortfall in business capital investment since early 2009.

But an indeterminate amount of the remaining shortfall reflects both a direct and indirect hobbling of vital financial intermediation. It is going to take years to address the unprecedented complexity of final rulemaking required in the massive Dodd-Frank bill. The inevitable uncertainty engendered will inhibit financial innovation and intermediation, and render the rules that will govern a future financial marketplace disturbingly conjectural. This is bound to have a significant impact on economic growth. Business planners must now confront a much wider set of scenarios that could affect the profitability of contemplated long-term commitments. This wider set, of necessity, increases risk premiums on illiquid assets.

The critical question, of course, is how much of a contraction in deficits and a decrease in the frenetic pace of new regulations can assuage the sense of a frightening future, allowing the natural forces of economic recovery to take hold. That process, which I outlined in earlier Financial Times articles on March 23 and June 25 2009, would accelerate if fear-determined equity premiums were reduced and stock prices accordingly rose. That would spur capital investment (they are highly correlated) and wealth-driven consumer expenditures. Economic growth would finally bring an important fall in unemployment.