Free Markets, Free People

Dale Franks

Dale Franks’ QandO posts

Final Election Predictions

Tomorrow’s the big day. So, I thought I’d join Bruce in tossing out my final pre-election prognostications (with error bars).

House: Republicans 247, Democrats 188 (+/-3)

Senate: Democrats 50, Republicans 50 (+/-1)

The Senate is the real imponderable here. With Patty Murray leading by only 0.3% in a watershed year, I’m going to go ahead and tentatively call this one for Dino Rossi. But this one could go either way, so worst case for the Senate, I think, is a 51/50 Democrat chamber. I also think it might be days before we know that final Senate number, too.

Observations: The Qando Podcast for 31 Oct 10

In this podcast, Bruce, Michael, and Dale discuss Tuesday’s midterm elections.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Following the House of Bourbon

I really do try not to be pessimistic about the future, but this is the kind of thing that keeps me up at night:

[W]ithout serious course correction, America is doomed. It starts with the money. For dominant powers, it always does – from the Roman Empire to the British Empire. “Declinism” is in the air these days, but for us full-time apocalyptics we’re already well past that stage. In the space of one generation, a nation of savers became the world’s largest debtors, and a nation of makers and doers became a cheap service economy. Everything that can be outsourced has been – manufacturing to by no means friendly nations overseas; and much of what’s left in agriculture and construction to the armies of the “undocumented”. At the lower end, Americans are educated at a higher cost per capita than any nation except Luxembourg in order to do minimal-skill checkout-line jobs about to be rendered obsolete by technology. At the upper end, America’s elite goes to school till early middle age in order to be credentialed for pseudo-employment as $350 grand-a-year diversity consultants (Michelle Obama) or in one of the many other phony-baloney makework schemes deriving from government micro-regulation of virtually every aspect of endeavor.

So we’re not facing “decline”. We’re already in it. What comes next is the “fall” – sudden, devastating, off the cliff. That’s why this election is consequential – because the Obama-Pelosi-Reid spending spree made what was vague and distant explicit and immediate. A lot of the debate about America’s date with destiny has an airy-fairy beyond-the-blue-horizon mid-century quality, all to do with long-term trends and other remote indicators. In reality, we’ll be lucky to make it through the short-term in sufficient shape to get finished off by the long-term. According to CBO projections, by 2055 interest payments on the debt will exceed federal revenues. But I don’t think we’ll need to worry about a “Government of the United States” at that stage. By 1788, Louis XVI’s government in France was spending a mere 60 per cent of revenues on debt service, and we all know how that worked out for the House of Bourbon the following year.

Oh, but wait, it gets worse, because we’re not just talking about the effect on the US. Our current path affects the whole world.

In 2009, the US spent about $665 billion on its military, the Chinese about $99 billion. If Beijing continues to buy American debt at the rate it has in recent times, then within a few years US interest payments on that debt will be covering the entire cost of the Chinese military. This summer, the Pentagon issued an alarming report to Congress on Beijing’s massive military build-up, including new missiles, upgraded bombers, and an aircraft-carrier R&D program intended to challenge US dominance in the Pacific. What the report didn’t mention is who’s paying for it.

Answer: Mr and Mrs America.

By 2015, the People’s Liberation Army, which is the largest employer on the planet, bigger even than the US Department of Community-Organizer Grant Applications, will be entirely funded by US taxpayers. When the Commies take Taiwan, suburban families in Connecticut and small businesses in Idaho will have paid for it.

When these kinds of crises hit, they often happen suddenly, without warning, often as the result of an event that is minor, in and of itself, but becomes the straw that breaks the camel’s back. When Gavrilo Princip popped a couple of slugs into Franz Ferdinand and his wife, Sophie, it seemed trivial. It was the kind of story that appeared on Page C-4 of Le Monde or the Times of London, and yet, weeks later, sparked a war that literally unmoored Western Civilization from everything that had gone before.

Let’s also be clear that this won’t be a European experience. The post-war European decline , if not painless, was at least very powerfully cushioned by the financial and political support of the United States. We won’t have that cushion.

In a two-party system, you have to work with what’s available. In America, one party is openly committed to driving the nation off the cliff, and the other party is full of guys content to go along for the ride as long as we shift down to third gear. That’s no longer enough of a choice.

Hard choices–very hard choices–are at hand. We will make those choices willingly, and try to maintain some control over our destiny, or reality will simply make those choices for us.

Observations: The Qando Podcast for 24 Oct 10

In this podcast, Bruce, Michael, and Dale discuss the NAACP’s finding of racism in the Tea Party, and the Tea party in general.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Legislative Seat Counter

It’s getting close to election time, so once again, it’s time for me to release the 2010 version if Legislative Seat Counter shockwave app. The interface looks like the screen shot below.

The app will run in your browser, or you can download the SWF file  it and run it locally in your computers flash player.  The file can be found here: CongressSeats

Oh, and while we’re at it, even though it’s a couple of years early, you can also play with the 2012 Electoral Vote Calculator, too. Just remember, this will have to be revised once the 2010 census updates the electoral votes of each state: PresidentialElection

Observations: The Qando Podcast for 17 Oct 10

In this podcast, Bruce, Michael, and Dale discuss the Economy, and the government’s effect on it.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Looking at the PPI

Today’s release of the Producer Price Index raises some interesting and scary questions. The core PPI was up only 0.1%, but a 1.2% increase in good prices and a 0.5% increase in energy prices brought the overall PPI up by 0.4%.

Now, the reason that food and energy are excluded from the core PPI and CPI is that they often show a lot of monthly volatility. Those prices simply rise and fall quickly, so, on a month-to-month basis, they may not mean much. Ultimately, however, a trend of price increases in, say, energy will trend to raise prices across the board, as that increases the cost of production.

The traditional Keynesian argument about inflation is that it tends to decrease when the economy is struggling, as aggregate demand is stifled. Sadly, in the 1970’s we learned that simply wasn’t true, and the existence of stagflation sent the Keynesians back to the drawing board for about 15 years to reformulate a Neo-Keynesian economic model. Essentially what happened in the late 60’s and early 70’s was that the Fed pursued a very accomodative monetary policy. Ultimately, even a slow economy couldn’t prevent that monetary expansion from showing up as inflation.

Sound familiar?

It should, because the housing boom was kicked off by a similar policy, and since the collapse, the Fed has pursued a policy of “quantitative easing”, i.e., buying $1.2 trillion of securities with hastily printed money. Overall, the monetary base has more than doubled over the past two years, also, as the Fed has kept short-term interest rates at 0%.

So, I guess the question is whether today’s PPI is just a monthly outlier due to the volatile sectors, or whether it’s a sign that monetary expansion is beginning to kick off an inflationary spike that will soon begin to show up in the CPI as real, noticeable inflation.

VFW and VFWPAC come to a crossroads

Veterans of Foreign Wars National Commander Richard Eubank, Sr. Vice Commander Richard DeNoyer, and Jr. Vice Commander John E. Hamilton, all appear miffed at the political endorsements made by the VFW’s independent political action committee. The endorsement of Barbara Boxer (D-CA), known colloquially as “Senator Ma’am” seems to be the straw that broke the camel’s back. They now say they’ll be putting the question of the PAC’s termination to the membership.