Audacity of Hope 1

The future will likely re-title this tome "The Audacity of Despair,  if there is enough freedom left in America to allow it after this demagogue gets through. He finally defines what he says he means by the title of his book on p 356

"The audacity of hope. That was the best of the American spirit, I thought-having the audacity to believe in spite of all the evidence to the contrary that we could restore a sense of community to a nation torn by conflict; the gall to believe despite personal setbacks, the loss of a job or an illness in the family or a childhood mired in poverty, we had some control-and therefore responsibility-over our own fate.

It was that audacity, I thought that joined us as one people."

Whew, after all that talk of "shared values" in the book, there it was, although there was little in the book about personal responsibility and incentives. The book was about government and unions being able to solve just about any ill in the universe. One would think that we could just pass a law that everyone be wealthy, fulfilled, well educated, loved, happy, and have a meaningful life.

For me, the central message of the book was on page 57:

Unfortunately, too often in our national debates we don't even get to the point where we weigh these difficult choices. Instead, we either exaggerate the degree to which policies we don't like impinge on our most sacred values, or play dumb when our own preferred policies conflict with important countervailing values. Conservatives, for instance, tend to bristle when it comes to government interference in the marketplace or their right to bear arms. Yet many of those same conservatives show little or no concern when it comes to government wiretapping without a warrant or government attempts to control people's sexual practices. Conversely, it's easy to get most liberals riled up about government encroachment in freedom of the press or a woman's reproductive freedoms. But if you had a conversation with thise same liberals about the potential costs of regulation to small business owner, you will often draw a blank stare.

In a country as diverse as ours, there will always be passionate arguments about how we draw the line when it comes to government action. This is how democracy works. But our democracy might work a bit better if we recognized that all of us possess values that are worthy of respect: if liberals at least acknowledged that the recreational hunter feels the same way about his gun as they feel about their library books, and if conservatives recognized that most women feel as protective of their right to reproductive freedom as evangelicals do of their right to worship."

Whew! First of all, it is important to recognize that for all of that text he said precisely NOTHING. He started talking about "facing hard problems", touched on a number of points ... gun rights, wiretapping, abortion, maybe gay marriage (although hard to tell), but took NO POSITION AT ALL! This is "core Obama".

However, my take is he is trying to make subtle points to all. He is telling HUNTERS that they will still have guns, but unfortunately our founding fathers always thought THAT was a GIVEN! The purpose of the right to bear arms is to convince the government that there are points to which they better not push an armed populace. Since he mentions "hunters", the gun control lobby can choose to believe that he is signaling that he may support removal of all guns except those explicitly required to hunt (maybe we can check them out at the local hunting preserve).

On the surface he seems "reasonable" and "moderate" ... he points out faults in both sides, however like most of his writing, the best guess is that is purely a ruse. Are conservatives really in favor of "wiretapping without a warrant"? Nope, in general they are fine with listening in on cell phone calls to known terrorists, which seems pretty different from "wiretapping". Wiretapping is more like warrantless collection of financial data on income, interest and stock sales (which the government does all the time!). Exactly what might he mean by "controlling sexual practices"? gay marriage? Is marriage a "sexual practice"? It used to be a legal arrangement designed to create families, but I'm not exactly sure what that has to do with gay marriage or sexual practices.

Notice his claim that "liberals" get riled up about "freedom of the press". Conservatives don't? In fact, I wonder who would get most riled up about putting the "Fairness Doctrine" back in place? I'm betting it won't be those defenders of press freedom the liberals. I love "reproductive freedoms" ... he of course means abortion on demand at any point in the pregnancy. Wow, liberals don't adequately care about the cost of government regulation.

Most chilling of all, a recreational hunter FEELS about his guns as a liberal feels about library books? Uh, this guy is a genius? So the founding fathers found it important to protect the "feelings of recreational hunters" in the CONSTITUTION? I wonder if any conservatives are smart enough to "care about library books"? Apparently not. I guess we are only smart enough to hunt in his mind.

Women feel about abortion as evangelicals feel about worship? I guess that one is more apt from a liberal point of view, as they consider abortion a sacrament - although he misses the point that most evangelicals don't have any sacraments. I suspect he let a little bit of whatever he has that is somewhat like a soul slip through on that one. You can pretty much directly see that he finds an equation with the importance of worship and the importance of abortion to be reasonable in his universe.

His aim is for all the sheep to find him "reasonable". He constantly "covers" both sides (in his own biased way), but in the end you can tell that his real answer is that the farthest left is the "truth". He "sees all views", it is just that the right, business, the founding fathers, and anybody that doesn't agree with Obama is wrong. The only issue is to buy or fool enough votes to make his "truth" the policy of the nation. Sadly, it looks like he is well on his way.

Discover Your Inner Economist

I can't recommend this book by Tyler Cowan. I'm sure the guy is hugely intelligent and would be a lot of fun to chat with, but the book has such a complete lack of focus that it was hard to make it through.

He makes some points that I was relatively familiar with, but they are worth repeating:

"I believe we must learn what can be obtained by exchange-monetary or otherwise and what we cannot trade for. The central concept of economics is not money but rather incentives. Quite simply, an incentive is anything that motivates human behavior, or encourages an individual to make one decision rather than another."

"One of the most important lessons of economics is how to cope with scarcity. Economics developed out of a recognition of that fact that many things worth having don't just fall into our laps in the course of our everyday lives. The real purpose of economics is to get more of the good stuff in life."

"It is a profoundly important fact that you can't understand how incentives work if you don't understand the importance of a respect for human liberty"

I'd argue that the last point is the point at which liberals really part company with economics. To them, "human liberty" would actually mean "freedom from incentives" - all the "good stuff" would be a "right" and incentive could be better described as "a whim". What they believe they want is a "right to happiness", not a "right to PURSUE happiness". They mistake liberty for entitlement and fail to realize that the result of their pursuit is TYRANNY. Equality of opportunity is heaven, equality of result is hell.

They also tend to lament "how important money is", which means that they understand neither money or life in the US today, since we still have a good deal of personal liberty. Nobody is forced to drive, use electricity, modern medicine or much of anything in our society. Availability of something is neither encouragement or license. The success of our system creates huge OPPORTUNITY, and if one wants to take advantage of those opportunities, THEN money is very useful. It is however YOU that makes that money "important" by what parts the overflowing cornucopia of goods and services you feel "incented" to want.

To live in a culture with liberty means that some will find that money is "too important"
and others will find that leisure or religion or education or books or computing or technology or environmentalism or politics or ?? is "too important" or not important enough. That is essentially what liberty means-"the freedom to think or be different", and as long as liberty exists, there will be disagreement-on priorities, limits on liberty, etc.

Liberals tend to see the "best way" to get our country back to be "less divided" is to remove some liberty-by say re-establishing the "fairness doctrine" so a set of conservative views were no longer presented, removing this blog from the internet, reducing the number of kids that are home schooled or in private schools, taking some money away from those who earn it, or 1000s of other ways.

We live in a looking glass world where "liberals" as strongly put off by the availability of Fox news, talk radio or internet blogs. "Liberal" may be a nicer sounding name for that sentiment, but what it is really is TOTALITARIAN. Liberty means MORE difference, dissension, argument and disagreement, not less!

Obama Islam

I'm nearly through "Audacity of Hope" and got to have a conversation with my son on Iraq last night. I was struck how closely both he and Obama's view 100% reflect the mass media view:

1). Islam is a religion of peace, we have nothing to fear from Islam
2). Radicalization is all due to US and other Western involvement in the mideast. If we would leave them alone, there would be no issues.
3). Bush is as fault for making us far less secure, if there should be any problems in the future, they will be due to the war in Iraq

I look at those points and think of my view of current events:
1). We were attacked on 9/11 less then 8 full months since Bush took office, yet we have not been attacked since. Therefore we are LESS safe and if we are attacked in the future our best way to understand that will be just "it is Bush's fault"?
2). Obama mentions the attack on Bali in 2002 (he spent time in Indonesia in his youth). He also mentions that Indonesia is increasingly Muslim, and yes, it his thesis that us going on offense in Iraq has made us less safe. Did Bali send in troops?
3). Obama makes the claim that "in Cairo Muslims prayed for the US after 9/11" in concert with trying to both praise the immediate handling of 9/11 in the book and yet criticize it. (apparently the core of "Audacity of Hope" is to claim to be on all sides of an issue yet reflexively take the most far left position in each case and call it "moderate"). He completely fails to mention that in MANY places they danced in the streets celebrating "death to America" as well. Since 9-11 we have had Al Quaeda bombings Bali, Spain and Britan. We have waited in vain for the so-called "modertate Muslims" to rise up and decry the "hi-jacking of their religion by radical forces against the will of Allah".

We have however had some Danish cartoons that depicted Allah with a bomb in his turban and comments by the Pope that cited writings from the 14th century on the spreading of Islam by the sword. In both these cases the "Arab street" as well as Arab leadership acted quickly and loudly with violence and death threats, and in the Danish case, someone associated with the cartoonist was actually murdered.

What I personally conclude from this is:
1). There is absolutely zero evidence that at least modern Islam is a "religion of peace". There has been very close to zero outcry from the Arab street against Al Quaeda supposedly "hijacking their religion", yet loud demonstrations, statements and actual violence and threats of violence over cartoons and very non-inflamatory rhetoric in the case of the Pope. The "Arab Street" is paying attention, they "see" cartoons and comments by the Pope and react with anger and violence. They ALSO see attacks in Spain, Bali and Britain, yet even in this country their are no "moderate Muslim voices" that decry those attacks and certainly no "Arab Street" rising up to decry the "hijacking of their peaceful Religion". I can only conclude that Muslims are NOT offended by the use of violence in their name.

2). Even a cursory reading of Muslim history will lead you to a "House of Peace and a House of War". Look at WHY the Crusades started by looking at Moorish Spain and what was happening in the world at the time before you you come to the conclusion that all of the modern problems can be traced to "historical western meddling". The core of liberal foreign policy theology is "we don't really need to defend ourselves since all things that look like threats are really just "blowback", so as long as we stop using any military force globally we will be fine". I'd argue that the evidence that the evidence of "Balian Imperialism" is limited. Bali didn't even have a lot to do with the Crusades or the creation of hated Israel. Unlike Obama and the masses, I conclude that Muslims see "innocent infidel" as a complete oxymoron, and are perfectly willing to see plenty of "collateral damage" of Muslims killed in bombings and the WTC attack as well.

3). Muslims mean what I hear them saying. We are infidels and unless we bow to the will of Allah in matters as small as cartoons, speech (the Pope) and the treatment of women, we are in the "house of war".

So, I guess either Obama and the masses are wrong or I am. That is OK, I'll just keep reading, writing and observing. What I find most disconcerting from Obama about this is not the unwillingness to recognize any lessons from the bombings in Bali that affected him since he was familiar with the hotel that was bombed, but his pre-emptive view that the "Bush adventure in Iraq" increases the threat of violence against us. Bali was not in Iraq, yet they were attacked. We have NOT been attacked since 9/11, and we have been in Iraq since March of 2003. How is it observationally correct to conclude that going on offense against Al Quaeda is counterproductive? WORSE, at least my reading him, one would assume that if we ARE attacked in the future it will be written off as "Bush's fault". When we were attacked in 2001 was that Clinton's fault?

The Line Between Naive and Delusional?

From the Obama comment during the debate, it is obvious that he actually believed that Al Quaeda wasn't present in Iraq. The MSM is so amazingly credulous of His Royal Hopefullness that they never question his subsequent churlish claim; "Of course I know that Al Qaeda is in Iraq". Huh? So he claims that he would send in troops IF they were there, but claims he is going to WITHDRAW troops IMMEDIATELY day after day? But he is well aware that they are there? So is he lying or insane and does anyone in the MSM even care of which it is?

It seems pretty obvious that Obama just forgot the sleight of hand behind the left/MSM views on Iraq. Since Al Qeada WAS active in Iraq even before 9-11, the left was forced to fabricate a "re-branding" of "Al Qaeda in Iraq" as a similarly named but completely different group than the Osama Bin Ladin Al Qaeda.

Naturally, we are to pay no attention to the constant statements of brotherhood between the two groups and the fact that known Al Qaeda in Afghanistan terrorists have been killed in Iraq. Prior to the US invasion of Iraq, even the NYT and PBS agreed that Iraq had terrorist training camps. Naturally, when it became important for there to be "no reason for the US to be in Iraq", they managed to forget what their own reporting on the subject had been. When one is on the left, how one "feels" is WAY more important than any factual information.

Once it was pointed out to Osama Obama that he had erred from the fabrication, he panicked and just lied about "OF COURSE I knew that Al Quada is in Iraq". It is hard to sound smooth and hopeful when one is backpedaling on something that they obviously have no real thoughts on. I'm sure in fact there is no circumstance at all that B Hussien Obama ... or "BO" would defend America. I mean, it is a country that isn't even good enough for his wife to be proud of, it certainly isn't worth shedding anyones blood over!

It is fun to watch how the MSM protects their own. NOBODY in the media even THINKS to point out the absurdity of a guy that claims that he is going to withdraw troops immediately claiming that he will send them in IF Al Qaeda was in Iraq when anyone that is "reality based" knows that Al Qaeda is there already. They naturally just report it as some "McCain political sniping" and the sheep graze on in ignorace and Obama worship.

McCain Criticizes Obama on Al Qaeda

By JOHN M. BRODER

Published: February 27, 2008

Senator John McCain, looking ahead to a possible general-election matchup with Senator Barack Obama, attacked Mr. Obama on Wednesday for what he called a weak and naïve approach to the conflict in Iraq and the effort to combat international terrorism.

Seizing on a comment from Tuesday night’s Democratic debate, Mr. McCain, the presumed Republican presidential nominee, said that Mr. Obama’s plan to rapidly withdraw American troops from Iraq would leave the country in the hands of Al Qaeda and possibly other terrorist groups. 

In response to a hypothetical question at the debate, Mr. Obama said that although he intended to withdraw American forces as rapidly as possible, he reserved the right to send troops back in “if Al Qaeda is forming a base in Iraq.” 

Mr. McCain pounced on the remark. “I have some news,” he said at a town hall-style meeting in Tyler, Tex. “Al Qaeda is in Iraq. It’s called ‘Al Qaeda in Iraq.’ My friends, if we left, they wouldn’t be establishing a base. They’d be taking a country and I’m not going to allow that to happen.” 

Mr. Obama, in Columbus, responded soon after. “I have some news for John McCain,” Mr. Obama said at a large rally at Ohio State University. “There was no such thing as Al Qaeda in Iraq until George Bush and John McCain decided to invade Iraq.” 

Both men essentially ignored Mrs. Clinton, who was campaigning in Ohio on economic and trade issues. Mrs. Clinton, speaking to reporters Wednesday morning, said she was pleased with her debate performance and indicated she intended to pursue the nomination even if she loses the Ohio and Texas primaries next Tuesday. Her husband, former President Bill Clinton, said last week that she needed to win those contests to remain a viable candidate. 

“I think what’s important is that we have a lot of people yet to vote,” Mrs. Clinton told reporters traveling on her plane. “I’m doing everything I can to win. That’s what I intend to do.” 

She said she remained optimistic about the race because she is raising $1 million a day online. “People have just been really rallying to my candidacy,” she said.
Mr. Obama delivered one of his most aggressive critiques of Mr. McCain. For several minutes, Mr. Obama mocked his potential Republican rival as he answered Mr. McCain’s charge that he lacks sufficient foreign-policy experience for the presidency.
“I’ve been paying attention, John McCain,” Mr. Obama said, speaking to a crowd of 7,000 in the St. John Arena on the Ohio State campus. “So John McCain may like to say he wants to follow Osama bin Laden to the gates of Hell, but so far, all he’s done is follow George Bush into a misguided war in Iraq.”

Katharine Q. Seelye contributed reportiung.

Wishful Patriotism

The following from the WSJ gives a little insight into what "Obamanomics" might be like. Like a lot of Democrat thinking is is pretty much down the lines of "there is great plenty of everything, humans have no need of incentives and disincentives, there is no such thing as competition and the primary problem of government is one of redistribution". In a simple world like that, we can pretty much have success just by adding laws and bureaucracy. If such a world existed, I'm not at all sure if it would be heaven or hell, the only thing I'm pretty sure of after 50 years of life with 30 of them in corporate America while raising a family, is that this world isn't like that.

To attempt to link thinking about those largely economic issues with "Patriotism" seems WAY more disingenuous and divisive than the supposed Bush doctrine of calling the immediate surrender at all cost Democrats "unpatriotic". Just because somebody doesn't buy into the lefts latest concept of a lotus chewing nirvana where all needs are provided for by just pulling them out of the supposedly well larded coffers of American business seems questionable at best on the "can't we just all get along and sing cumbyah" path.

Anyone want to explain to me why it is "divisive" to question the patriotism of someone who claims that a war in which we are adding troops is "lost", but it is somehow "healing" to question the patriotism of businesses successfully operating, creating products, jobs and profits according to existing laws and practices.

Is it possible for everyone to have a whole lot more, do a whole lot less and accept a whole lot less risk? Gee, I hope so, that is why I'm in the technology business after all and during the 30 years I've been in that business we have certainly delivered. Everything to do with computers and electronic technology in general is 100's if not 1000's of times more capable and at prices that are typically 100ths or at least 10ths of what they were 30 years ago. (I paid nearly $5k for my first computer, a computer with 1000s of times more capability today costs well under $500 in dollars that are well inflated from the early 80's). I'd like to see someone claim that government could be innovative enough so that during the next 30 years my taxes will only go down by a mere 10x and my government services will only be a mere twice as good as they are now. I know I'm a softie, but given that government has less effective incentives and disincentives, I don't think they need to be held to anything like the standards that we in business live with every day.

I tend to believe it is very possible for the kind of economic growth that we have seen since 1980 to continue, but I also believe it is even easier to return to the stagflation of the 70's. It looks to me that Obama is headed back to the bad old days.

Obama's 'Patriot' Act

No, we're not talking about Barack Obama's opposition to the post-9/11 antiterror law. We're referring to the Senator's support for something called the Patriot Employer Act, which deserves more attention as an indicator of his economic agenda.

Along with Democratic co-sponsors Sherrod Brown and Dick Durbin, Mr. Obama introduced the bill in the Senate in August 2007. Recently in Janesville, Wis., he repeated his intention to make it a priority as President: "We will end the tax breaks for companies who ship our jobs overseas, and we will give those breaks to companies who create good jobs with decent wages right here in America."

Mr. Obama's proposal would designate certain companies as "patriot employers" and favor them over other, presumably not so patriotic, businesses.

The legislation takes four pages to define "patriotic" companies as those that: "pay at least 60 percent of each employee's health care premiums"; have a position of "neutrality in employee [union] organizing drives"; "maintain or increase the number of full-time workers in the United States relative to the number of full-time workers outside of the United States"; pay a salary to each employee "not less than an amount equal to the federal poverty level"; and provide a pension plan.

In other words, a patriotic employer is one which fulfills the fondest Big Labor agenda, regardless of the competitive implications. The proposal ignores the marketplace reality that businesses hire a work force they can afford to pay and still make money. Coercing companies into raising wages and benefits above market rates may only lead to fewer workers getting hired in the first place.

Under Mr. Obama's plan, "patriot employers" qualify for a 1% tax credit on their profits. To finance this tax break, American companies with subsidiaries abroad would have to pay the U.S. corporate tax on profits earned abroad, rather than the corporate tax of the host country where they are earned. Since the U.S. corporate tax rate is 35%, while most of the world has a lower rate, this amounts to a big tax increase on earnings owned abroad.

Put another way, U.S. companies would suddenly have to pay a higher tax rate than their Chinese, Japanese and European competitors. According to research by Peter Merrill, an international tax expert at PriceWaterhouseCoopers, this change would "raise the cost of capital of U.S. multinationals and cause them to lose market share to foreign rivals." Apparently Mr. Obama believes that by making U.S. companies less profitable and less competitive world-wide, they will somehow be able to create more jobs in America.

He has it backwards: The offshore activities of U.S. companies tend to increase rather than reduce domestic business. A 2005 National Bureau of Economic Research study by economists from Harvard and the University of Michigan found that more foreign investment by U.S. companies leads to greater domestic investment, and that U.S. firms' hiring of more offshore workers is positively, not negatively, associated with the number of American workers they hire. That's in part because often what is produced overseas by subsidiaries are component parts to final, higher-value-added products manufactured here.

Mr. Obama is also proposing to raise tax rates on affluent individuals, as well as on capital gains and dividends. This would also lead to more capital and jobs leaving the U.S. The after-tax return on U.S. investment would fall appreciably if these tax hikes were adopted, and no amount of tax-credit subsidy will keep capital from fleeing to lower tax jurisdictions.

If the U.S. didn't impose the second highest corporate income tax rate in the world, companies would have less incentive to move jobs overseas. Rather than giving politically correct companies a 1% tax credit, it makes more sense to reduce the U.S. corporate tax rate for everyone -- by at least 10 percentage points to the global average.

Economists have long understood that companies don't really pay taxes; they merely collect them. A study by the American Enterprise Institute has shown that U.S. workers bear the cost of the corporate income tax in lower wages and salaries. To borrow Mr. Obama's language, what's really unpatriotic is the 35% U.S. corporate tax rate.

See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.

Glenn Beck, Defconomy

Ran into this out on the Web the other day. The Democrats have been in power for a year now in both houses at the Federal level and and at the state level here in MN. Here in MN they are in the process of raising taxes on gas, cars and sales in the face of an economy that has already started to sour. Are they responsible? I don't know, when Bush took over in 2001 he was considered instantly responsible for the economy that was in a slowdown.

The fact that we have both congress and an executive branch at both the federal and state levels makes it more complicated. Both share some of the blame/success when it is split, but I think it is relatively easy to figure out "who is in charge". In the late '70s, it was really easy - Democrats had it all, and we had predictable disastrous results. In the 80's, Democrats had the house all the way, but Reagan had a lot of sway due to big wins in '80 and '84 and the economy boomed as he got his way.

By '86 he was losing on the interim, got into Iran Contra, and the Democrats mostly took over-the economy cooled. Bush Sr took over in a time of Republican control sinking and his economy sank -- which he helped by giving in to tax increases. Clinton took over with all Dems in '92 and an economy that was already growing and into which the federal reserve dropped interest rates to some of the lowest levels ever (for reasons that I still don't completely follow) -- the country sputtered along and the Republicans took over both houses and held the upper hand with a growing economy and dropping government spending until '98 when their attempt to impeach Clinton failed and he received the complete support of the MSM. (one could argue that '94-'98 or '99 were the best combination times of economic growth and reduced RATE OF GROWTH in government spending that we have seen since prior to '29).

Enter Bush, during the first year he had no capability and inherited a recession. After 9-11 he gained power and so did the economy until '06 when he and the Republicans lost big -- by 2008, it appears the economy is losing as well, we can hope that loss isn't big, but it might be. It seems certain that we are going to have some level of recession and the Democrats will continue to raise taxes on those most capable to get us out of it (giving a re-bate to people who pay less taxes is a form of a tax increase).

Beck thinks that we will get to somewhere between "defconomy" 2-3. I'd like to hope that we don't even sink that low, but the country looks like it really thinks that it is time to teach "the rich" a lesson. Actually, "the rich" are usually those that already understand "the lessons" pretty well which is why they are "rich". Economic slowdowns always hurt the folks at the bottom of the ladder the worst, but on the bright side they DO cut income inequality.

The top of the ladder loses the most percentage and real dollars of wealth as the markets drop, but of course all that really means to them is that they reduce DISCRETIONARY spending until some the nation finally decides that "the lesson is over" and we worry more about making progress at all rather than who makes the most progress. After awhile, the "success" of the rich guy keeping the Lear in the hanger a few weeks out of the year while you stand in an unemployment line and turn down the heat seems a bit hollow. Envy can be fun, but paradoxically, reducing it often isn't.

I'd argue that Obama may be enough of a demagogue to even go beyond FDR though and get us to "Defconomy 0", where we follow the road to the gulag and kill as many of the "wealthy" as possible, or at least "re-educate them", while the borders completely break down, speech becomes controlled well beyond "hate speech" and the destruction of family and religion is carried out. I just finished his book. Only a totalitarian state has any prospect of getting close to the "shared values" that he thinks we all "share".

Maybe we have a slowdown, come to our senses in a couple years and throw the bums out in 2012 -- we really need to, I don't see Al Qaeda as going away, there are a lot of social security bills built up, and most of the baby boomers haven't seen fit to save more than $50K for retirement. If we think the cud chewing masses and central bureaucracy in Washington is going to take the place of innovation and hard work, it will be a long and depressing depression.

DEFCONOMY FIVE

How you'll know we're here: The housing downturn turns into a free fall, making it the worst collapse in our country's history. That not only triggers massive numbers of foreclosures and lost household wealth, but it also sets off another large wave of bank write-downs.

Odds we get here: Roubini told me that it's "extremely likely, even unavoidable" that we hit this stage because "the excess supply of new homes in the market is like we've never seen before." Prices, he believes, "need to fall another 10 to 20 percent before that clears."

• DEFCONOMY FOUR

How you'll know we're here: Americans upside-down on their mortgages and unable to pay their home equity loans begin defaulting on other debt, like credit cards, car loans and student loans. In addition, bond insurance companies lose their perfect credit ratings, forcing already troubled banks to write down another $150 billion.

Odds we get here: High. Roubini says that 8 million households are already upside-down on their mortgages and he thinks we could see that number go to between 16 million and 24 million by the end of 2009. A lot of those people, he believes, will simply walk away from their homes and send their keys back to the bank.

• DEFCONOMY THREE

How you'll know we're here: Some banks begin to crack under the pressure of continuing write-downs and mounting defaults by consumers. A national or large regional bank finally collapses, triggering hedge fund failures and general chaos on Wall Street, potentially leading to a 1987-style market crash.

Odds we get here: Very good. Roubini says that we'll likely socialize the losses, "effectively nationalizing the mortgages or the banks." It would be, he told me, "like Northern Rock (the large bank in England that was recently taken over by the British government) times three." He thinks the stock market will head south throughout the year as fears about a severe recession are confirmed.

• DEFCONOMY TWO

How you'll know we're here: Most forms of credit (both to consumers and businesses) become virtually nonexistent. That results in a "vicious circle" of additional write-downs, stock market losses, and bank collapses, which leads to even less credit being available.

Odds we get here: Good. Roubini says that credit conditions are becoming worse everyday across a variety of markets and won't be getting better anytime soon. Without extra credit available, people might have to actually (gasp!) live within their means.

• DEFCONOMY ONE

How you'll know we're here: Welcome back to 1929. A full economic meltdown results in a complete failure of the underlying financial system. What will be known to future generations as "The Greater Depression" has arrived.

Odds we get here: Not likely. Roubini believes that this will be a "very painful and severe recession" that could last for 18 months or more, but it will be more like 1981 than 1929. Families may be eating soup again, but at least it'll be in their own kitchens.

Now, do I think any of what you just read will happen?

I have no idea, and that's exactly the problem. I'm not an economist or a stockbroker; I'm just a guy trying to make the best decisions I can, and picking the brains of real experts helps me do that.

But I do know one thing for sure: Depressions aren't advertised in advance. Last time around we went from the Roaring '20s to bread lines in a matter of just a few years.

Anyone who says that can't happen again either doesn't know history, doesn't understand how interconnected the world's economies have become, or is lying to you. While that doesn't mean you should panic, it does mean you should prepare -- something my grandfather would've done a long time ago.

WFB RIP

William F Buckley passed away today at 82, dying while working at his desk. I suspect that other than maybe dying in church, that is probably as good as it could be for him, and there is nobody that deserves a passing as they would desire more. No doubt the quality of discussion in heaven has already improved immeasurably, and those of us still here have one more reason to keep the faith in order to able to meet a great man in eternity.

I've written about him in the Blog before. It was Jimmy Carter that made me realize in a negative way that I needed to pay more attention to political ideas, Buckley that led the way to the right theories, and Reagan that showed that those right theories worked in the real world. Unfortunately, during those years I also learned that for folks from the left, politics is a faith beyond religion, and no amount of the failure of their ideas or the success of their opposite will ever sway their opinion. If living through the time of Carter, Buckley and Reagan isn't enough to realize the error of modern liberal thought, neither fact nor superior argument will suffice.

I and the entire country owe WFB a gigantic debt for keeping the spark of conservatism burning through some dark days and then fanning that spark to become a prairie fire sweeping Reagan to the White House and returning Americato greatness and freeing millions of people around the globe from the scourge of communism. Those ideas rage on in global economic development far beyond the imagination of the Carters of the world.

Sadly WFB passes at a time when it appears that a return to the darkness is all but inevitable. His passing is a reminder that as long as the flame of truth is preserved the dawn can happen again. The torch needed to be passed to a new generation of folks with capabilities like Buckley and Reagan, but it appears that has not happened.

Accidental Election Results Leak

Somehow I don't think there will be any concern when Obama wins ...


Diebold Accidentally Leaks Results Of 2008 Election Early

Iron River

More pictures out here.

Great snowmobile trip to Iron River WI last week Wed PM to Saturday AM. Stayed at the Lumberman's Inn in Iron River for probably the last time. It used to be a great little motel with a nice restaurant next to it, but I suspect the mild winters of the past 10 years didn't do it any good.

Thursday AM was a bit chilly with about zero degrees as we went out to an excellent breakfast at the Rustic Roost. The Apex was a little cold blooded to start and we had to give it 10 min before the "wait" light went out, but it was fine the rest of the day. Drove over to Washburn and stopped for coffee. Rode up to Red Cliffs and made sure there had been a lot of folks on the ice (there had) before heading out. Got about 1/2 mile out and went into panic mode. The wind had cleared big sections of ice completely, 100 yards or more of pure black ice ... gave me a VERY uncomfortable feeling. Would have liked to have turned around, but really didn't want to because it SEEMED that those "might be thin", although one couldn't see just how.

About 2 miles out, off the end of one of the Islands, there were some guys fishing and I just had to stop to see if there were any known problems with the ice. Turned out that it was the In Fisherman trying to do some filming. I ought to have asked which stars were out there, but I was too interested in the ice. We were on 14" in 150' of water, it was one of those black ice areas, you could look right through it and see little bubbles under the ice -- not that comfortable of a feeling. That was least ice they had found, and they said folks had been driving all over for a month at least, if our sleds went through it had to be our time to go! We continued on down to the Bell Street Tavern on Madeline and had their excellent sweet potato fries.

Rode back over to Bayfield next to the ice road and enjoyed the great trails back to Iron River . 150 miles for the day. Some other guys from work were up there staying up near Washburn, but had a sled problem so I hauled their sled back up there in the trailer, about 80mi round trip, but nice to do a good deed for a fellow rider. We went out and ate at Deep Lake Inn, really super steaks, nice place. Slept like a rock.

Little trouble getting the Yamaha started again in the AM and we were all the way to me trying to tow the heavy beast and I burned my belt on the sled a bit. Learned a lesson when I changed it out on Saturday and rode down by Preston, even though it looked just fine, the new belt was MUCH smoother. Rode up to Port Wing and had a nice big blueberry pancake for beakfast. Six guys in their 20's eating in the next room having bloody mary's and talking smart -- having a fun time being young. We took off and rode on super trails across Valhalla over to the Pub and Grub near Washburn and had a nice lunch, then rode back into Iron River.

Sledding buddy was tired, so I stole the Apex and rode to Superior and back. Haven't been on it in awhile. I love my Fusion for seating position, ride, power, and especially lightness on the twisties, but on a flat firm trail the Apex is scary smooth. I like to cruise at 60 on my sled ... it feels great and that is fast enough. The Apex at 80 feels just like my sled at 60 ... it is like moving from a little rattletrap car to a nice SUV, it seems like you are crawling. I tried to still drive 60, but most times I would look down and be between 70-80 and have to slow down again. On the way back there was a .5 mil stretch where I could see there were no deer around and I had drove it going the other way for awhile -- 103MPH on a sled, fastest I've ever gone on one and it didn't even seem scary to look down -- no vibration, no ski chatter, no sense of it being "topped out" at all. With those snow conditions I have no doubt that one could get to 120MPH or more on that sled. Amazing.

Ate over at Ashland next ot the Best Western on the S end of the bay. Tasty, probably stay there next time we go up. Slept pretty good, but sleds were arriving every now and then after 12 with loud pipes and riders including the last set at 3AM. Got up and hit the road at 7, stopped for a good breakfast in the cities, pulled into home at noon. Marla wanted to ride, so I swapped her sled on the trailer, replaced my belt and we went down and put on 60 mi down by Fountain, Preston, Lanesborro with dinner at the Branding Iron in Preston.

Great snowmobile weekend, the 4-stroke Apex 150 HP Yamaha is easy to love when the trails aren't too twisty.

Liberals Switch Their Fantasies

It is interesting to see the NYT, NPR and lots of folks on the left re-assess the Clintons. I don't see anything that I haven't seen for 16 years from them. They have always been completely ruthless and "all about themselves". Is this something that has just dawned on the MSM and many Democrats? I suppose that as long as Bill and Hill were bashing Republicans, it seemed like just good old fashioned hardball politics, but I suppose once the their extreme nastiness the Clinton's started bashing their "Pope of Hope", the MSM / Democrat cabal suddenly thought the world looked different.

Unless Billary digs up solid evidence of Obama being into child porn or something similarly evil, "Obamamania" will continue run wild with the same level of intellectual realism as "Beatlemania", "Hulkamania" or other manias. After it runs it's course, we will have a hangover -- how serious the hangover is will remain to be seen, but unless he is "better than God" (God makes demands on everyone, not just "the rich"), he is guaranteed to be a HUGE disappointment. Much like stock market bubbles, mania is mania -- the results are predictable, it is only the extent that is in doubt. Krauthammer covers it well here.

No actual Republican can ever be prone to this kind of mania -- it is the domain of the Democrats, the "creative class". We like Star Trek, Moby Dick, and Wicked just as much or more as the most creative and hopeful, we just know that those are stories, and in the real world it is the common man that has to write the real scripts and keep the stage lights lit. I think the mania will likely work until something past the first 100 days this time, because a lot of folks really "want it to work". I always like it when Dorthy and Toto get home as well -- I just know it typically has a lot more to do with boring things like risk, reward, determination, commitment, delayed gratification, sacrifice, etc than it does with ruby red slippers.

How the MSM Shapes the Political Message

Here is an article that is related to the Michelle Obama Statement, titled "Cindy McCain, Michelle Obama in patriotism flap"

Why does a Democrat even NEED a political staff when they have the MSM? Here are some pointers on how the MSM acts as a massive Democrat assist:

• First, DON'T take direct MSM notice of what Michelle Obama herself said, NOT prompted in ANY WAY by "evil Republicans". She said it of her own free will, and when you watch the video, it is OBVIOUS that she meant what she said. Why not? She and Barak are obvious complete left wing partisans. They reviled Reagan I'm sure, HW Bush no diff for them, Billy C no doubt was WAY too centrist for them and W Bush was no doubt the worst of the bunch. If you are a partisan ideologue, it is "par for the course" to have "conditional love for your country". You love a country that agrees with you.
  
• When the Republican sees that this is going to be completely ignored and makes a fairly indirect comment on it, go after THEM ... insinuate it is THEY that are somehow "fighting dirty".
  
• "Consider it covered" ... for the few folks that even see this minor headline at all, they will never go off to the video and given the way it is written it will simply add to the traditional "Republican Dirty Tricks" -- everyone KNOWS that Republicans fight dirty, avoid the issues, etc. The MSM and the Democrats focus on the IMPORTANT stuff like if Nancy Reagan consulted astrologers or an affair with Frank Sinatra, Dan Quayle's failure to spell "potatoe", HW Bush not knowing the price of bread, or how well W did in the Air National Guard 30 years ago. Yes indeed, the Dems and the Media ALWAYS and ONLY focus on the important stuff!
  

It is very easy to see why the sheep believe what they believe, this is the only kind of "intellectual feed" that they get and it is hard to go searching for other pastures.

Michelle Obama Finally Proud of America

This article comments on her statement, it links to the video of her saying it in Madison WI.

What she said was:

“for the first time in my adult lifetime, I am really proud of my country. And not just because Barack has done well, but because I think people are hungry for change. I have been desperate to see our country moving in that direction.”

WOW. She basically said it twice, I think she was very honest. Yet again the reason why the Obama candidacy likes to stick to "change" rather than any specifics. Here we have an Ivy league power couple that has made millions off books alone, and knows that with the combination of race and gender they can punch their tickets whenever they want for 100's of K a year salary, bitching about that country that has already given them

Blueprint for Malaise

I received a link to Obama's "Blueprint for Change" the same day that I ran into this excellent Charles Krauthammer article. I still believe that the Clinton machine will find a way to do him in, but the hype has reached a point that I've started reading "Audacity of Hope". One doesn't have to read very much Obama to realize that one can write a whole lot while avoiding saying much at all. There is a lot of "inclusion", "shared this and that", and horrendously mixed metaphors that culminate for the Obama faithful in "he is exactly what I want". I remain unconvinced that he has REALLY said much beyond "hope and change", although he certainly wants the easily led to believe that he has.

I heard him say after the IL shootings that "he was a strong proponent of the right to bear arms". At least that is what I heard. I wonder if I'll find out that he really meant "the right to BARE arms"? That is a joke of course, but what the joke means is that he MAY mean just about anything, including what some Democrats like to say; it means that the ARMY gets go have guns! Since he points out in his book that he believes the Constitution is a LIVING document ... open to all sorts of "interpretation", EXCEPT in those areas where HE sees it clearly ISN'T open to interpretation. Who says he isn't a classic liberal? Well, he does, but then his voting record shows him to be the most liberal Senator we have -- naturally THAT would be unfair and "unsphisticated" to use to attempt to evaluate him.

Here is a bit of a sample from the 60 pages of "plan". This first quote is right off the bat in the book, so one might assume that it is important:

“I am in this race to tell the corporate lobbyists that their days of setting the agenda in Washington are over. I have done more than any other candidate in this race to take on lobbyists – and won. They have not funded my campaign, they will not get a job in my White House, and they will not drown out the voices of the American people when I am president.”

So then what might we make of the following from Open Secrets?



Does Goldman Sachs have no interests for their $420K, or are they just not "special"? Maybe they aren't a "corporation" or they have promised not to call anything they do "lobbying"? How about all of the other big investment and lawyer firms that are up on his contribution list? Even if we don't count what he is being given, what about all the folks that he is promising to GIVE things to if he is elected? How about Unions? Are they a "special interests" with lobbyists? How about all the federal workers in AFSCME? Is there no reporter in America that has the time to read his "plan" and check any of it out?

It is very hard to tease any real meaning at all out of his statements even if one suspends disbelief and assumes they are somehow connected to the real world. They would only seem like "a plan" to those that assume that the next big thing, the next diet fad, the next lottery ticket, the next medication, the next relationship or marriage, the next church swap, or in this case, the next politician is going to "solve my problems". To be human is to have sympathy for such thinking, since on one or more topics, all of us have been there. The "sale of hope" is as old as mankind itself, but our founding fathers were wise enough to realize that in leadership it is often quite dangerous.

There are many ways to say nothing. The easiest is to just speak in generalities and actually write nothing. The 2nd is to write a whole bunch of nothing. It is pretty easy to see why he sticks with "just change" in most of his speeches. It is even easier to see why the MSM is in no hurry to give the general platitudes that he would call "a plan" any scrutiny.

A concrete example;
"Eliminate Income Taxes for Seniors Making Less Than $50,000: Obama will eliminate all income taxation of seniors making less than $50,000 per year. This will provide an immediate tax cut averaging $1,400 to 7 million seniors and relieve millions from the burden of filing tax returns. "

So if you are a Senior that didn't take care of your retirement and have less than $50k of yearly income, Obama says you deserve the "reward" of ZERO taxes. If you are a Senior that was responsible your whole life and DID take care of your retirement, you deserve to pay for the other guys reward (he doesn't say how much you get to pay extra) The Obama way is to penalize work, study, persistence and virtue, and subsidize sloth, indolence, irresolution and vice. Of course he doesn't SAY that, he just says what the feeble minded want to hear. Dire Straits said it better; "Get your money for nuthin and your chicks for free".

It would be GREAT if we could get what we want with minimal effort, little risk and in a very timely fashion, but sometimes it takes a whole stack of education, hard work, sticking with things when the going is tough, and investing today in time/money/commitments that won't pay off until the future, and even then only with RISK. Doing the right thing doesn't ALWAYS work, but unfortunately, doing the WRONG thing seems to "work" with predictable results.

Watching this play out in the 30th year of may career and knowing that I can walk out the door at about 1/3 of my salary is a new experience to watch an election from. There are A LOT of folks sitting where I'm sitting, and there are MANY billions of dollars hanging in the balance. If we walk out the door, his tax receipts fall by a whole bunch.

Are we all "rich"? Well, although our incomes are FINALLY "high", we worked long careers and invested every step of the way to get where we did. We didn't say "write a couple books and win a Senate seat" and suddenly go to being a multi millionaire. Not many of us went to Harvard either. Do I begrudge Obama success? No, not at all, but it would be nice if he didn't begrudge my success and the success of those that work and produce either.

One way the US system is SUPPOSED to work is that you PERSONALLY invest your time and money in years of education and work in a competitive "filter" that gets tougher and tougher as you rise through the ranks. For each step you make on that ladder you "win" higher wages, but also have a tougher job with a greater chance of being fired - you are more visible and the expectations on you are higher. More of your life ends up being invested in your career. If you are able to make it to a relatively high level relatively fast, you will have enough earning capacity for some period of time to make all those years of investment worth it.

There are a lot other ways; create your own business and sink everything you have into it to try to make it grow. Join a startup company and trade years of your life for stock options that you hope against hope will end up being worth a lot eventually. The list could go on.

The point is, that if there is no "pot of gold", the incentive to do all the innovation, risk taking, hard work and "basic slog" through decades of trial / error / challenge / learning is reduced, and at some point simply goes away and we are no longer America. I saw us get there once at the time of the "great malaise" in the late '70s. From the looks of the electorate and "plans" like Obama's, it looks like we are turning that way again.

Change

I love listening to the Democrats this year. I keep thinking of other scenarios where if someone comes up to you and says "there is going to be a lot of change", if one would be so willing to jump to the conclusion that it was going to be good. Try a few of these on:

1. Your Doctor says: "Well, you are going to see some big change in your life".
   
2. Your spouse tell you "There is going to be a major change in our relationship".
   
3. Your Boss says "It is time for some big changes in your relationship to the company".
   

I could go on, but you likely get the picture. The MSM and the Democrats, especially Obama are simply saying that they are "about change", with little to no idea of the specifics of that change, and why it might be good. Yes, yes, I know that a bunch of folks see "anything but Bush" as being "positive change", but this is STILL way beyond what would normally cause at least SOME media personality or SOMEBODY from asking for "just a bit more detail".

It isn't so hard to be popular when the media lets you get by with "just being about good things". Hillary seems to finally be trying to get a LITTLE definition out of what that Obama "change" might be about. The degree that the sheep are willing to step up and pull the lever for "just change" is a testament to the perennial power of the demagogue.

Garrison Keilor Realizes Results Count

We're failing our kids | Salon.com

Wow, this is the kind of thing I very rarely see, a VERY surprising and out of character for Garrison view that just because "No Child Left Behind" was a Republican idea doesn't make it evil, RESULTS actually DO count, and SOMEONE ought to be ACCOUNTABLE for those results. WOW!!! an extremely UN-lefty thought!

Naturally the responses from all the other leftys are 100% predictable with nobody supporting Garrison's views, BUT I give him extreme credit for being willing to leave the Education Lobby thought reservation for even just this short excursion.

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