Free Markets, Free People

Dale Franks

Dale Franks’ QandO posts

Economic Statistics for 19 Dec 12

The following US economic statistics were announced today:

November housing starts came in at a slightly les than expected 0.861 million pace, but building permits rose 3.6 percent to an annual pace of 0.899 million.

The MBA reports that higher interest rates made mortgage applications plunge -12.3% last week, with purchases down -5.0% and refinancings down -14.0%. An increase in mortgage rates caused the drop in activity.

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Dale Franks
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Economic Statistics for 18 Dec 12

The following US economic statistics were announced today:

In weekly retail sales, Redbook reports a 2.4% increase from the previous year. ICSC-Goldman reports a strong weekly sales increase of 4.3%, and a 3.5% increase on a year-over-year basis.

The Housing Market Index tose to 47, as homebuilders report the best conditions in more than five years.

The US current account deficit fell by $11 billion in the 3rd quarter, to -$107.5 billion. 

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Dale Franks
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Observations: The QandO Podcast for 16 Dec 12

This week, Bruce, Michael, and Dale discuss the Newtown shootings.

The direct link to the podcast can be found here.

Observations

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What’s happening to us?

I‘m just sick about today. It’s really incomprehensible, isn’t it? Sure, it was the act of a lunatic, and lunatics are, almost by definition, incomprehensible. So, I can’t even begin to get my mind into the sort of space where you massacre children. It’s just been a day of grief and depression.

These kinds of shootings seem to be coming ever faster, and I honestly don’t know what we can do about them. I’m sure that we’ll be spending a lot of time talking about gun control for the foreseeable future, but…well…that’s not really going to solve anything. Quite apart from anything else, there’s 300 million guns floating around in the US. Good luck rounding them all up.

Besides, that’s not really the root of the problem.

I just can’t escape the sense that we are watching our society and culture slouching towards collapse, and that what happened today is a symptom of that. There’s a streak of mad decadence in American culture; a streak of anger, and a lack of civility, and a surfeit of selfishness that can’t sustain a functional civil society.

Our politics are so angry that otherwise sane men physically attack other men, and scream at them like angry children for holding a different political opinion. Our popular media is drenched in sex and violence. Our news media are little more than mouthpieces for socialist pieties. Traditional religion is belittled and reviled in popular entertainment as New Wave beliefs are treated with credulity. Individual responsibility is ignored, while victimization is fetishized.

The litany is depressing, and none of it indicates a confident, forward-looking culture. And it puts out a vibe of craziness and violence that even lunatics can pick up. Maybe they could always pick up on it, but, at least prior to the 1970s, we could lock lunatics up through involuntary commitment. Since then, of course, we’ve ensured that we can only lock up lunatics after they violently act out. So there are a lot of them lurking about, now, many of them homeless, walking the streets.

I honestly have no idea how to fix this. Clearly, government isn’t the answer. A government that can’t even do what is obviously necessary to balance—or even produce—a budget certainly isn’t going to effect any useful cultural change. Besides in a democratic system, the government reflects the culture, not the reverse. Our government is increasingly one that is characterized simultaneously by arrogance and incompetence. Those would be incompatible characteristics in a rational culture, but they accurately describe our culture, the government that reflects it.

We’ve had it so good in this country, for so long, that I’m afraid the culture has internalized the idea that it’ll always be that way. There’ll always be second chances if you screw up, and someone will always be there to keep the machinery running. What problems we do have are First World problems: the free in-flight wi-fi doesn’t work; Starbucks ran out of Pumpkin Spice. We go into debt getting our degrees in Gender Studies, and we expect a lucrative job as a reward. Our kids come in last place in their soccer league, but they’ll always get their trophy for participation.

We’re living off the financial, moral, and intellectual capital of people who opened a continent-wide frontier, defeated horrific foreign tyrannies, and then sent men to the moon. We, of course, will do none of those things.

Quite apart from anything else, we couldn’t afford to. We’ve spent the last thirty years going ever deeper into debt to defer ever making any hard choices. Instead, everybody got everything they wanted. I mean, we got our Great Society, and our Cold War military build-up; Medicare Part D, and No Child Left Behind; wars in the Mideast, and subsidized college loans. We’ve denied ourselves nothing that we wanted, and now that the bill is coming due, all we can figure out how to do is raise taxes, and have the Fed buy back some bonds so we can keep the party going on longer, and stretch out the time that we’re allowed to go ever deeper into debt.

But, not only can we not afford to, we don’t want to embark on some great cultural mission whose rewards will be enjoyed by our children instead of ourselves. We just want to pull up some porn on our iPads, and watch Netflix after we finish.

The founders of the Republic understood that democratic self-governance is only suited to a moral, responsible people. A people who cannot strive to create a polity where ethics and responsibility are primary principles are a people who are not capable of governing themselves. And I no longer see us as a people who can create that kind of polity.

Some of my libertarian friends think that a financial or societal collapse will lead to a better understanding of the importance of freedom, and that a new flowering of liberty will bloom in the aftermath.

That’s a foolish and stupid idea.

What will actually happen is what happened when Rome fell: a period of barbarism and tyranny and darkness will sweep over us at worst, or at best, people will demand that a man on a white horse punish the appropriate scapegoats and make the trains run on time again. Sure, I hope I’m wrong, but history is on the side of pessimism. As nearly as I can tell, all we can do is hold on tight, because we’re getting ready to ride this puppy down in flames.

Still, Rome didn’t collapse in a day, and maybe we can manage to avoid a total collapse and ensuing Dark Age for another 30 years or so, until after I’m gone. Frankly, that’s about all the optimism I have left in me.

But, maybe, in 500 years or so, a confident, adventurous people will once again step onto the surface of the moon. No doubt they will be amazed to learn that the mythical figures of Buzz Aldrin, Alan Shepard, and their companions actually did exist, and set foot there once upon a time, and left behind six beautiful, red-striped banners, spangled with white stars on a field of blue.

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Dale Franks
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Economic Statistics for 14 Dec 12

The following US economic statistics were announced today:

The Fed reports that industrial production rose a strong 1.1% in November, while capacity utilization in the nation’s factories rose to 78.4%.

The Consumer Price Index fell -0.3% in November, but the core rate rose 0.1%. On a year-over-year basis, the CPI rose 1.8%, and the core rate rose 1.9%

The PMI Manufacturing Index Flash rose almost 2 points to 54.2 for the first half of December.

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Economic Statistics for 13 Dec 12

The following US economic statistics were announced today:

Initial jobless claims fell 29,000 last week, to 343,000. The 4-week moving average fell 27,000 to 381,500. Continuing claims fell 23,000 to 3.271 million.

The producer price index in November fell -0.8%. The core rate, which excludes both food and energy, rose 0.1%. On a year-over-year basis, the PPI is up 1.4%, while the core PPI is up 2.2%.

Retail sales rose 0.3% overall in November, while sales ex-autos were unchanged, and sales ex-autos and gas rose 0.7%.

Business Inventories rose 0.4% in October, but falling sales pushed the stock to sales ratio up to 1.29.

The Bloomberg Consumer Comfort Index fell another -0.7 points to -34.0.

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The flight of the ‘greedy rich’

France’s prime minister, Jean-Marc Ayrault, is hopping mad. In response to the French socialist government’s plan to significantly increase taxes on "the rich"—including a proposed 75% tax on incomes above €1 million—rich people are moving out of the country. This is intolerable to Mr. Ayrault.

"Those who are seeking exile abroad are not those who are scared of becoming poor," the prime minister declared after unveiling sweeping anti-poverty measures to help those hit by the economic crisis.

These individuals are leaving "because they want to get even richer," he said. "We cannot fight poverty if those with the most, and sometimes with a lot, do not show solidarity and a bit of generosity," he added.

It could be a scene right out of "Atlas Shrugged".

Mr. Ayrault is angry because rich Frenchmen are fleeing the country to keep their money, instead of handing it over to him. And he is joined by the baying of the other hounds in France’s left wing. Case in point, French actor Gerard Depardieu, whose announcement that he was moving to Belgium provoked responses such as:

Socialist MP Yann Galut called for the actor to be "stripped of his nationality" if he failed to pay his dues in his mother country, saying the law should be changed to enable such a punishment.

Benoît Hamon, the consumption minister, said the move amounted to giving France "the finger" and was "anti-patriotic".

In a stinging editorial, Libération, the left-leaning daily, called him a "drunken, obese petit-bourgeois reactionary".

They are owed this money, by God, and how dare you try and steal it away from them!

This is always the implicit argument of the Left: They have the first claim to your income, and you have a duty to honor that claim. No matter how you earned that money, they have the right to take as much of it as they please away from you, and if you dispute that right, you’re unpatriotic, and should be punished.

This is Leftism in a nutshell. You are not a free individual, but rather a serf of the state or some other politically-defined "larger community" that has an absolute claim on your property and income that you may not defy. This is no different in concept, or in practice, than the idea of ancient Babylon or Akkad that every subject is a slave of the king.

You can dress it up in high-sounding phrases like "solidarity" or "social justice", "helping the poor" all you want, and it still amounts to nothing but the simple declaration that the state owns you.

The people who believe in this idea are the enemies of freedom, and should be treated as such.

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Economic Statistics for 12 Dec 12 (Updated)

The following US economic statistics were announced today:

The MBA reports that mortgage applications rose 6.2% last week, with purchases up 1.0% and refinancings up 8.0%.

Export prices fell -0.7% in November, but are up 0.7% over last year. Import prices fell -0.9% for the month, and are down -1.6% Year-over-year.

The Fed announced after the FOMC meeting this afternoon that short-term interest rates would remain close to 0% unless unemployment declines to 6.5%. They also said that the $85 billion a month in bond buys would continue. Gold rose more than $6.00 immediately after the announcement. Crude oil futures rose as well.

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Economic Statistics for 11 Dec 12

Following a quiescent Monday, the us economic calendar kicks off this week with the following statistics:

In weekly retail sales, Redbook reports a 2.2% increase from the previous year. ICSC-Goldman reports a weekly sales decline of -0.7%, and a 2.5% increase on a year-over-year basis. Sales growth has been slow for two straight weeks, and analysts say consumers are awaiting the final round of pre-holiday bargains before buying.

The U.S. international trade gap in October widened to $-42.2billion as exports declined.

The NFIB Small Business Optimism Index in November fell a steep 5.6 points to 87.5, going deeper into recessionary territory.

Wholesale inventories rose 0.6% in October, with an unexpected -1.2% drop in sales, leaving a stock-to-sales ratio at a troubling 1.22.

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