Thursday, February 26, 2009

What's It All About?

I've come to the conclusion that when a Democrat says "It's not about X. It's about Y", you can bet your bottom dollar that it's about X. You can also be pretty sure that a meaningful definition of Y is going to be pretty elusive.

"It's not about unions. It's about how America is going to rebuild the middle class"
- Andrew Stern, president of the Service Employees International Union (on "card check")

"It's not about bigger government or smaller government, it's about smarter government."
- Barack Obama

"It's not about helping banks, it's about helping people."
- Barack Obama

I'm sure you can find more.

Hands-On Government

This morning on the news there was a story about a bill in front of our state legislature to legalize noodling.

For those of you unfamiliar with the term, it's a method fishing where you catch them with your bare hands. Apparently the law's been on the books for 90 years, and it looks like in a rare case of pondering a government roll-back, they're considering repealing the law.

If you can catch a fish with your bare hands, buddy, more power to ya. You da man!

But I gotta wonder... who was it that was sitting down in Jefferson City 90 years ago saying, "People are catching fish with their hands???? We can't allow that!!!!!"

Monday, February 23, 2009

Logical Whiplash

So I deigned to click on one of my "No Go" columnist's columns today, the oft-cheered-by-the-Left Paul Krugman... because, hey, I'm a reasonable man and I like to look at the spectrum of the ideas if only to know what they are. Besides, I know myself that the whole business of "creating" money is a bit more complicated than I (or maybe anyone) can actually understand.

This one is titled "Banking on the Brink", in which Krugman is in favor of Nationalization -- but hold on -- what he says he means here is the same kind of bank cleansing the FDIC does when it takes over a failed bank -- the bank gets re-privatized. So he came up with a term "pre-privitization" ... by which he really means "pre-re-privitization"... but that's awkward. At any rate, call it money laundering, or loan laundering, or whatever. And I don't know, maybe Paul's right on this one given the fact that the problem is, basically, that banks don't have enough assets to come close to covering the losses they may incur in a big recession/depression.

As an aside, here's my hand-waving description of how money works in this country. I'll start at the low level -- because that's where it all really happens. It's where the rubber meets the road. Then we'll work our way up.

Money represents productivity -- productivity of goods and services. It's a store, like a battery is for electricity. Or call it a "productivity conversion and transport device". I produce for 7-11 by working the Slurpee counter. 7-11 gives me some money for it. (Never mind where the bills physically originate for now.) I can't eat the money. But I want a Big Mac. I haven't done any work for McDonalds, but I can give them this "battery unit" representing my productivity for 7-11, and they'll do work to make me a hamburger (for which McDonalds pays them) and give it to me. And now maybe they can go rent a movie from Blockbuster with the money McDonalds gave them for making me a hamburger.

If I put drywall up in Bill's basement but he's got nothing I need, he can give me money he got for doing something someone else needed and I can go use that for something else in some completly unrelated venture. The money itself is a representation of the value Bill and I agreed putting the drywall up in his basement.

But that value was created by me doing the labor. So money cannot be finite. Somebody does the work - bang! New value. Means new money. Nobody does the work; No value created. It is not a zero-sum game. There's not just people with money and people without money. Things you and I do actually create money in an almost literal sense. But we don't get to print it up ourselves. That all gets done through the banking system. Call it a big standardization institution. A lucrative one, no doubt. But outside of a strict bartering economy, a necessesary one.

So how does a loan work? A friend once told me, and he was shocked -- that when a bank lends you money, they create the money out of thin air by giving it to you, and then saying you owe it back, plus interest. But that they never had it to begin with.

I knew deep down there was more to it than this at the time. If that were true, banks could just keep creating money out of nothing and transferring it to the banker's accounts. As much as they want. So what's stoping them? Risk. The activity is not without risk. (Not that it isn't still extremely lucrative and subject to abuse). They are placing a bet -- making a guarantee on the production of goods and services by their customers. It is tied to events, past, present, or (mostly, typically) future events which will guarantee the value the loans represent. And over time I came up with this model in my head that explains the whole thing pretty well in my head.

The bank does, in fact, have some money. Enough to, say, pay the former owner of a house you just bought completely off -- and to do that for many people per day. But the amount of money it has on hand and the amount on it's balance sheets are diffferent, because basically they are relying on you to go produce for someone and give some of that to them, plus some interest for their trouble, and they've got lots and lots of people doing this day in and day out. So they've always, in a sense, got what's coming in every day to hand out every day -- (and they're supposed to have reserve on hand too... but let's not get into that).

So what they're basically banking on is the fact that you're going to go produce something for someone -- enough that you can meet the obligations of your contract with them. With a house or car loan they have some element of a guarantee that the deal won't be a total loss for them if you walk away from it -- which most people won't -- because your house or car will be worth something. The contract will say that they get it in that event, and they can sell it to someone else and get some or all of the money back... maybe more depending on the market value.

So the bank is taking a calculated risk with each loan it makes -- and that risk is that you might not produce ... and thus add to the economy and give some of the value represented by that in money -- to them (both to pay them back and to "tip" them for their trouble).

So what it basically means is that you are the one that actually creates the wealth, represented by the money. If you don't create it, or get it from somebody else that created some, they don't get the money they guaranteed to someone on behalf of you.

Little banks, in turn, play similar roles as you and I do to those banks ... to larger banks that primarily lend to ... banks. Those are the big boys. Up at the top of the food chain is the Federal Reserve, where high-level monetary policy gets decided.

Right now what we have is banks looking at each other, wondering if they have enough assets to cover the loans one is asking another for.... banks worried about the risk of lending to one another. Big Bank A is worried that bank B is not going to be able to get the payments it needs from bank B's assets (which include its customers) to meet the obligation it's asking for. So it won't lend bank B the money it needs to lend money to Bob the Builder to buy the materials he needs to build the new shopping center and pay his employees before the shopping center owners pay them ... the shopping center owners in turn are banking on loans they're taking against future space rentals from businesses who will in turn take out loans they'll pay back depending on how flush their customers feel after they open. Including promises to pay their employees.

This has been caused basically by banks overestimating their assets -- which was fueled largely by runaway real-estate prices that were assumed to be perpetually heading upward, fast.

They stopped, making the risks in bad loans a bigger deal. And there is a very real domino effect that can easily be set off here unless somebody figures out a way to neatly pull a few dominoes out of the line near the top.

Anyway, what I'm saying here is that Krugman, a man I hate to read, may be right here about a method to do just that. I don't know.

But that's not what got me started on this, although I'm glad we went through that exercise. What got me thinking about it was this comment someone left on the article. It starts out coherent sounding enough... but wait until you get to the end:

The problem with the banking industry is not just banks that are effectively bankrupt, with deposits unable to adequately cover failing debt obligations or falling asset values. The underlying issue is liquidity and the structure of loan portfolios going forward. Nationalization or preprivatization should be a condition for the federal government providing liquidity to failing banks. However, there will be little economic value created in recapitalizing the banks, if these banks move forward and choose to make loans for uneconomic activities. Thus, the federal government's more important role with respect to the banking industry may be to institute regulations that encourage borrowing for needed projects that have a high economic return on invested capital (ROIC). Today, one of the most productive categories of high economic ROIC projects are those that decarbonize the economy - pull carbon out of industrial processes that emit CO2 into the atmosphere.
I was actually following the dude until that last sentence. Basically, he's saying that to fix the banking problem, we should address "global warming". Show me where decarbonization projects are going to give us a high ROIC! Where is the demand for that among people with capital to spend? How much of your income are you willing to give to such projects? Because ... that's where it would have to come from. The government. Barring some sudden formation of a private organization with lots of money to spend voluntarily. Private organizations that want to spend money on this stuff exist, for sure. But they don't want to spend their money. They want to use the coercive power of the government to force you to spend yours.

Saturday, February 21, 2009

Losers

I know I'm late to the game on this. Sue me. :-) I've been sick.

Anyway, caught this the other morning on the news.


The guy brings up some good points, not the least of which underscores the main reason Socialism doesn't work in the long run. It rewards bad behavior.

I noticed he used the word "losers" to describe people who took out mortgages that were over their heads. As he's describing an aggregate, he's probably right. I, for one, did not take out a mortgage that was even twice our annual household income, much less three or four or more. And I did that for a reason. For me to be subsidizing with the money I saved by being conservative -- someone else's extravagance in poor judgement... doesn't settle well with me. See, this also punishes good behavior.

At any rate, if it hasn't been done already, the press will now trot out examples of middle class families we can all identify with ... knowing that they aren't typical examples of what's going on ... to promote the idea that it's "just folks" and that we should get on board (see Bernie Goldberg's BIAS)

Well we don't have much choice thanks to the America voting the Socialists in.

Hang on, folks, it's going to be a bumpy ride. I just hope this isn't the endgame for America.

Wednesday, February 18, 2009

A New Take on Balancing the Budget

In light of the recent spate of tax-paying challenged political nominees by The Chosen One, I present this from Bob Parks at Black And Right:


Ok, that's at least a little bit funny, now, come on!

That's about the size of it

Forwarded to me in an email by my lovely wife.

Katie Couric, Charlie Gibson, Brian Williams and a tough old U.S. Marine Sergeant were captured by terrorists in Iraq.

The leader of the terrorists told them he'd grant each of them one last request before they were beheaded and dragged naked through the streets.

Katie Couric said, 'Well, I'm a Southerner, so I'd like one last plate of fried chicken.'

The leader nodded to an underling who left and returned with the chicken.

Couric ate it all and said, 'Now I can die content.'

Charlie Gibson said, 'I'm living in New York , so I'd like to hear the song, The Moon and Me, one last time.'

The terrorist leader nodded to another terrorist who had studied the Western world and knew the music.

He returned with some rag-tag musicians and played the song.

Gibson was satisfied.

Brian Williams said, 'I'm a reporter to the end. I want to take out my tape recorder and describe the scene here and what's about to happen. Maybe, someday, someone will hear it and know that I was on the job till the end.'

The leader directed an aide to hand over the tape recorder and Williams dictated his comments.

He then said, 'Now I can die happy.'

The leader turned and said, 'And now, Mr. U.S. Marine, what is your final wish?

'Kick me in the ass,' said the Marine.

'What?' asked the leader, 'Will you mock us in your last hour?'

'No, I'm NOT kidding. I want you to kick me in the ass,' insisted the Marine.

So the leader shoved him into the yard and kicked him in the ass.

The Marine went sprawling, but rolled to his knees, pulled a 9 mm pistol from inside his cammies and shot the leader dead. In the resulting confusion, he emptied his sidearm on six terrorists, then with his knife he slashed the throat of one, and with an AK-47, which he took, sprayed the rest of the terrorists killing another 11.

In a flash, all of them were either dead or fleeing for their lives.

As the Marine was untying Couric, Gibson, and Williams, they asked him, 'Why didn't you just shoot them all in the first place?'

'What?' replied the Marine, 'and have you three assholes report that I was the aggressor... .? '

Semper Fi!

Tuesday, February 17, 2009

Leavin' On a Jet Plane

Ron Paul, a guy I actually voted for in 1988 had this to say about the stimulus package.



I could'a voted for him this time around if it weren't for the Iraq thing. It's one defensible position to say perhaps we shouldn't have gone in. It's quite another to say let's pull out now and damn the torpedoes. But I digress.

I note that it keeps getting mentioned that Obama promised on the campaign trail that he would wait 5 days between passage of bills to when he signs them ... so the American Public will have a chance to read it -- transparency. One reason the conservatives that did vote for Obama voted for Obama.

However, if you go back and look at what Obama actually said on the trail was that would only be for non-emergency bills, and this is considered an emergency bill. So that's how he'll get around THIS one.

So it was stuffed with several hog farms worth of pork and rushed through as an emergency bill that was passed last friday.

But apparently it wasn't "Emergency" enough for Obama to sign it Friday. Or Saturday. Or Sunday. Or Monday. No, instead he burns 10,000 gallons of fuel to fly to Denver to make a big deal out of signing it in front of windmills and solar panels. You know, because it's a "green" stimulus package... one which apparently couldn't've been signed in DC.

I wonder if Gore will be driving out there with his fleet of SUV's?

The Modern Leftist Activist

Once again, the brilliant wit of Mark Steyn comes through loud and clear. Espcecially clear.

He's speaking of George Clooney, specifically -- but this seems to apply to most modern leftist activists ... another BSIHORL, to rival or even surpass yesterday's:
"He’s more taken by the idea of “speaking truth to power” than the footling question of whether the truth he’s speaking to power is actually true." - Mark Steyn
I once was just a guy who liked Mark Steyn.

I think I've now been swayed into the realm of "Fan". Do go read the piece linked above. It's an old column. But it's still good.

They're tired already

Twice today (and I'm not even trying) I've come across comments on stories/blogs from Obamatons lamenting the "whining" coming from conservatives/republicans about Obama's every little move.

Man, it's not even Feb 20th yet. And they're already tired.

Judging from the past 8 years, I assume, then, that it is because they prefer to be the ones doing the whinning.

Monday, February 16, 2009

Another BSIHORL Post

A complete and shamless robbery of Morgan's "Best Sentence I've Heard Or Read Lately" genre of posts, but I prefer to call it "adoption". Anyway, here's my newest BSIHORL award.
"Obama is skilled mainly at evading clarity, at wrapping hard questions in a generalized gaseous uplift of abstract nouns. " - Mark Steyn
Boy do I love it when someone concisely distills something down to it's essence.

Saturday, February 14, 2009

Two important videos

The hat tip goes to Morgan for both. (you'll have to follow the hat-tip tracebacks from there if you're interested ;-) ) I'll show the most important one first.




America is not a group of people to be taken care of ... America is an idea that says we are all free to fend for ourselves with minimal governmental control over our lives.

And the second



This is exactly what I've been saying... I am far more worried about other forms of pollution, particularly water, air, and piles of trash from people who don't care (you know, the kind of trash that's piled 10" deep on Roger Barnett's ranch by illegal aliens who are suing him for allegedly violating their civil rights.)

The very slight rise in "global temperature" we've seen over the last 150 years is a blip in history near what is probably the end of a natural warming cycle, and it started about 150 years before the industrial revolution. It ain't us.

To see it on Lou Dobbs on CNN being presented by a meteorologist is a sign of hope.

Friday, February 13, 2009

Wondermark

I can't remember where I first found the link to this, but I've stumbled across a brilliant comic. Brilliant in an uniquely off-beat manner. Here is but one example, and it meshes with one our pet themes here quite nicely.

Tuesday, February 10, 2009

"Resolved" Old Battles

Barack Obama, in his Feb 9 press conference:
And in fact there are several who have suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.
Check this out.

“I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises.”
“I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot!”
Sounds like Obama and the Democrats campaigning against Bush, McCain in the 2008 election, doesn't it?

Now check this:

“We have tried spending money. We are spending more than we have ever spent before and it does not work.”
Clearly the wing-dinger, fascist Republican response, right?

Well, those quotes are all from FDR's secretary of the Treasury Henry Morgenthau ... after 8 years of the New Deal. Fortunately for the economy, the country started gearing up for WWII shortly after that -- first to help supply Europe and eventually to supply ourselves when we officially got involved.

I just finished reading Amity Shlaes' "The Forgotten Man"... and I've gotta say (and I think I've said it before) every Congresscritter and the President himself should take two days out to read this book before sitting down to decide what to do to "fix" the economy.

Oh Yeah? Well I'm Not

Thursday, February 05, 2009

Nah. Socialism? Just Wing-Dingers overreacting

This was last year at Congress' eleventy-jillionth raking of oil companies over the coals for high gas prices that Congress has had more impact on than the oil executives. But that's not the point. Watch Congress woman Maxine Waters, and listen to what she says.


"And guess what this liberal would be all about? ... This liberal would be all about socializing ... uh ... uh ... ... um ... would be about ... ... basically ... taking over, and the government running all of your companies." -- Rep Maxine Waters (D, CA)
Watch the look on her face when she realizes she's let the cat out of the bag, and tries hard to put it back. Wow. About 1:10 into the clip.

Isn't California the state whose social programs are running it into the ground, like New York City in the 1970's?

And yesterday, Goldman Sachs decided it wants to pay the $10 Billion of bailout money that it got from the government back -- because it now sees the move for what it was. A bid for federalization of the banking industry. Money from the federal government always comes with strings attached.

And that would include socialized uh ... uh ... um ... nationalized ... uh... "universal" ... health care.

Tuesday, February 03, 2009

Hee hee....

Are they selling popcorn? This is almost cheerin' me up.

At yesterday's White House briefing, ABC News's Jake Tapper asked whether Obama worried that the nearly $200,000 in back taxes and penalties owed between Geithner and Daschle will "undercut the president's cry for an era of responsibility."

"Both Secretary Geithner and Secretary-designate Daschle are the right people for very important jobs," press secretary Robert Gibbs replied.

"Is there an amount of money in unpaid back taxes for any nominee to the President's Cabinet that would be considered disqualifying?" needled Fox News's Major Garrett.

"I'm not going to get into hypotheticals," Gibbs answered.




UPDATE: It's been pointed out and duly that I didn't provide a link. I do that sometimes.

Home Field Advantage

I'm shocked they had the balls to point it out, but while watching the the Superbowl I saw an NBC spot promoting Matt Lauer interviewing President Obama, and it presented it pretty much thus: "President Obama gets the home field advantage with Matt Lauer".

Wow. Pretty freaking bold. And accurate. NBC.