Archive for July, 2009

“We may be seeing the beginning of the end of the recession”

Friday, July 31st, 2009

Obama sees end of recession
“We may be seeing the beginning of the end of the recession”, says Obama

It has become apparent that the way for economists to become important, respected, even get Nobel  prizes, is to tell politicians and bureaucrats what they want to hear, which is usually that there is sound economic reasons to do whatever pleases lobbyists, special interest groups, and strategically important voting blocks.

Here is Bernanke on the housing boom back before it burst – he is telling us that the there is no bubble, that the government inflating prices will not cause crash and recession – were he to tell us something different people might think that the government pressuring banks to throw trillions of dollars in the general direction of people of the politically correct race but economically incorrect credit rating might lead to serious problems.

That does not of course mean the recession is going to get worse.  What it does mean, however, is that all the very clever economic experts around Obama will tell him that things are going to be fine, regardless of whether they are going to be fine or not.

Because some of the people around Obama are crazies, notably his science Czar, craziness automatically becomes mainstream, and the good and the great start figuring out clever rationalizations why those programs are not crazy at all.

Well Obama has stuck his neck out a little, and made his prediction, so it is only fair that I stick my neck out and make my prediction: My prediction is for high unemployment, high inflation, or both, leading to ballot box stuffing and heavy intimidation of white and aged voters in the vicinity of the voting booth in 2010 and 2012

Kaufman predicts soaring unemployment

Monday, July 27th, 2009

In U.S. Still Melting Jobs, Let’s Count The Ways Kaufman argues unemployment will continue to rise because of numerous hostile federal law changes and initiatives aimed against employers and entrepreneurship.

Meanwhile, the mainstream keeps predicting that unemployment is near maximum, that things will shortly start getting better.

I expect that the mainstream will be proven wrong.  You just cannot go forth and smash capitalism and expect everything will just continue to work fine – though as everything goes to hell, doubtless capitalism will be blamed, and Krugman and the rest will declare that they have been proven right – that all the bad things happening are proof that capitalism does not work and therefore they did not crush it enough.

You are probably a federal felon

Sunday, July 26th, 2009

There are a lot of laws, indeed they are growing so fast that not only can they not be read by legislators, but with in creasing frequency not even printed, existing only in electronic form, no longer practical to commit to paper.  Further, many of these laws are deliberately overbroad for the convenience of prosecutors

Thus for example  Krister Evertson was convicted of abandoning hazardous waste – notwithstanding the fact that the materials were not waste, nor abandoned, nor even stored unsafely.  The law is that someone’s materials, if hazardous, can constitute waste even if they are extremely valuable to him and under lock and key in secure storage, and once the EPA has broken into that secure storage using cutting torches, he has abandoned the materials.

A law that on its face appears to be about potentially hazardous chemicals dumped in a creek, also covers potentially hazardous chemicals on private property in locked chemical and criminal resistant stainless steel container.   And furthermore, nearly all chemicals have been declared hazardous.

The same is true of an enormous variety of other laws on other matters, laws that now multiply faster than is physically possible to print them – each law written to include all possible behavior that the state might possibly want to punish, not to exclude behavior that is innocent and honest.

British political prisoners.

Tuesday, July 21st, 2009

Two british nazis, Simon Shappard and Stephen Whittle, were charged with writing heresy.  They fled to the USA, but last month were forced back to Britain, where they have each been jailed for two years and two months for publishing thought crimes:  They posted on their web site that Hitler did not exterminate the Jews, but that he should have. (more…)

Goldman Sach’s hand caught in piggy bank.

Friday, July 17th, 2009

They admit their hand was in the piggy bank, but say they were just feeling the money, not stealing it. (more…)

A politician speaks the truth!

Wednesday, July 15th, 2009

Usually, any statement or report emanating from government, any government white paper, is a lie, but in a remarkable fluke outburst of truthfulness,  the U.S. House of  Representative Committee on Oversight and Government Reform  has issued a report: The Role of Government Affordable Housing Policy in Creating the Global Financial Crisis of 2008

The long and the short of the report being that the government pressured financiers to issue easy money bad loans to irresponsible borrowers, which government policy eventually blew up.  Of course, if you have been reading the blogs, that is not news to you.  For several years you heard that was going to happen, and then for a couple of more years you heard that is what did happen, but it is most astonishing to hear it from the government itself!

I predict: 1. Seemingly good economic news

Wednesday, July 15th, 2009

I predict that around 2009 October or so, there will be lots of seemingly cheerful economic news. Quite possibly sooner, possibly some time in August.

I predict that the Keynesian element of the depression will rapidly and visibly diminishing towards the end of the year.  Crises that are well described by Keynes (aggregate demand falling below aggregate supply) never last long, except to the extent government intervenes to forbid businessmen to adjust to them.  Say’s law is observed to be mostly true in practice, except where the government makes it illegal.   Obama, for all his faults, has not done much to stop Say’s law from operating, therefore aggregate demand is going to be fine very soon.

It will then become apparent to what extent this is a crisis as described by the Austrian school – (unemployed financiers, real estate agents and union car makers that have to learn new careers) and to what extent this is a Galt strike, a crisis as described by Ayn Rand in “Atlas Shrugged” (horrified entrepreneurs despair and flee.)

I also predict that when it becomes apparent to what extent this is a Galt Strike, the cheery economic news will not look so cheery in retrospect – that at some time between late 2010 and early 2012 the “green shoots” of 2009 will be discovered to have been composed of poison ivy.

One more crazy murderous totalitarian pal of Obama’s

Monday, July 13th, 2009

Zombietime reads the writings of Obama’s science Czar, discovers he is a total loon who wants to use the panic du jour to impose a totalitarian world state. (more…)

Speaking power to truth

Monday, July 13th, 2009

If  an economist wants to get places, he had best tell politicians and bureaucrats what they want to hear.  The danger is that if says it often enough, he will himself come to believe it.

Larry Summers is an economist.  When Bush was in power, he believed in Bushonomics, which got him into trouble in an academic environment of rigid, mindless, and unthinking left wing orthodoxy.  Now, however, it seems he firmly believes in Obanomics. (more…)

The “stimulus” is far too large and far too small.

Saturday, July 11th, 2009

Republicans are getting traction by condemning the “stimulus”, as an outlandishly extravagant porkfest, as miserly and inadequate, and as a disaster that should not be repeated – an attack made all the more effective by the many radical Democrats who complain the porkfest was inadequate, and call for a bigger and better porkfest: “Stimulus II”

Obama’s approval ratings, though still high, are plummeting fast under this withering criticism.

In Japan, they are now on stimulus umpteen, the Japanese economy is not looking very stimulated, and the Japanese government is getting close to bankruptcy.

The porkfest is too small in that it takes the government a very long time, several years, between deciding to spend money, and the money actually getting into people’s pockets, so the only stimulus that has had any effect are the tax cuts – and the carbon bill looks suspiciously like an alarmingly large tax rise: “tax and raid”, as the Republicans are calling it.  This is not very stimulating.

As for too large – well we cannot definitely say it was too large unless serious inflation or national insolvency sets in, and so long inflation remains subdued, people can always say it would have worked had it been larger.

My expectation is that it will not work, not matter how large, because this is primarily a Galt Strike, and only to a minor extent the inadequacy of aggregate demand that Keynes described.  But this theory can only be tested if the Democrats put the pedal to the metal, and do enough stimulus that serious inflation sets in.

If inflation sets in without recovery in employment and investment, that will be compelling evidence in favor of the Galt Strike theory and against the Keynesian theory.  But as long as inflation remains low, people can say of the American stimulus, as they say of the Japanese stimulus, that it would have worked if only it was tried hard enough.

If, on the other hand, the stimulus actually stimulates something broader than gigaprofits at Goldman and Sach, then that will be compelling evidence that Keynesianism or neo Keynesianism does describe the present economy accurately enough.

If inflation with high unemployment and stagnant investment, then I am proven right.

If low inflation with high unemployment and stagnant investment, then everyone can plausibly claim to have been proven right, though in fact nothing will be proven – the situation we now have with Japan.

If low unemployment and adequate investment, the Keynesians will be proven right.