Dale Franks’ QandO posts
Paul Krugman was on CNN yesterday, as a guest on “Fareed Zakaria GPS”. I’m glad of it, because he provided us with this gem:
If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better–
I guess since the Nazis and Imperial Japan are no longer with us, an alien attack threat is all he’s got left. In one sense, he’s right. If aliens were coming to attack us, we’d do whatever we had to do, and damn the expense. Of course, the aliens, assuming they were really interested in killing us all off, would probably stop close to the asteroid belt and drop bolides on us until we said "uncle". Or were extinct. Which would solve our financial problems.
Here’s the thing about military spending. we consider a lot of military spending to be on durable goods. We count it that way as part of GDP. But these goods are NOT durable goods. They are consumables. We build them with the expectation that they will be quickly, and violently consumed in combat. And outside of combat, they generally have no useful role in society.
But let’s assume he’s right. We have a massive space armaments buildup, everyone goes back to work, and we borrow another $14 trillion to do it. Great. 18 months later, everybody is working in the armaments factories, thousands of "space fighters" and orbital x-ray lasers are buzzing around in near earth orbit, command bunkers are built deep in the earth’s crust…woo hoo! The economy is booming again.
Then we find the threat has been mistaken. There aren’t any aliens coming to attack us. Are we really better off? I mean, we’ve been better off for a couple of years, while we were preparing for the aliens, and everybody was working. But what happens now?
Now we have a huge stockpile of useless military equipment that we have to destroy, or borrow more money to maintain. Demand for plasma cannon and shield generators disappears. The armaments factories close down, and those jobs are gone forever. We have rung up a $30 trillion debt to purchase a massive amount of goods that have no constructive purpose, and generate no wealth. And what wealth we did have is now sunk into space weaponry we can’t use for…well…anything. What we can use, we have a glut of, and have to either destroy or surplus out.
So, where do all the jobs go now? How are we better off? All the alien-fighting military and civilian jobs evaporate, our national wealth has been sunk into useless alien-fighting equipment, and we’re now carrying a debt of 200% of GDP. It seems to me that we’re now worse off than we were before the alien scare.
This is Keynesianism taken to the furthest logical extreme: We’d be better off creating a massive buildup of useless and unusable military equipment, because it would stimulate the economy. The trouble is, how do we pay for it once we’ve done it?
Frankly, if the aliens do come, I’d prefer that we do nothing. If they can cross the vastness of interstellar space, their technology is so far ahead of ours that any attempt at defense would be futile. And, of course, I presume that any society so advanced would, if nothing else, deliver us from Prof. Krugman’s brand of irrational economics once and for all.
I‘ll be honest with you. I dunno if Rick Perry would be a good president or not. I don’t even know if he’s been a particularly good governor of Texas. But it’s becoming apparent he’s perceived as a pretty big threat to Barack Obama. The guy entered the race less than 48 hours ago, and we’re already being treated to things like this, this, and this, from the usual suspects on the left. It’s like the oppo research has already been done, and they were just waiting to go with it. As hard as that might be to believe.
In the next couple of weeks, we’re going to learn more about Rick Perry than we ever thought possible. Which kind of inclines me to think that anybody that has the Left jumping in to castigate them this quickly must have something going for him.
What’s especially interesting about this response is that we knew what Rick Perry’s college grades were before he even announced his candidacy, and 2.5 years into Obama’s presidency, we can merely state, with some degree of confidence, where he went to college.
At least we won’t have to worry about whether Rick Perry gets properly "vetted".
In this podcast, Bruce, Michael, and Dale discuss The Ames Straw Poll and the 2012 election.
The direct link to the podcast can be found here.
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 2010, they can be accessed through the RSS Archive Feed.
The US Postal service has a financial problem. That’s not a surprise, especially is a time when the entire US government has a financial problem. Unlike the rest of the US government, the USPS is relatively limited in the amount of government money it can receive, and is more or less—and often less, granted—supposed to rely on postage to fund its operations. It still manages to get nice subsidies from the government, but even then it’s supposed to pay those back. Eventually.
In other respects, though, it operates like the rest of the government. Nice federal workers’ and union bennies, heavy bureaucracy, a monopoly on the service it provides, etc., etc. So, that makes it sort of a canary in the coal mine when it comes to government financing. Which makes this interesting:
The U.S. Postal Service would eliminate about 220,000 full-time jobs and shutter about 300 processing facilities by 2015 under a proposal to bring its finances in order, a postal official said on Friday.
The Postal Service needs to cut payrolls to about 425,000 employees and take over its retirement and health benefits instead of participating in federal programs, Postmaster General Patrick Donahoe told Reuters.
This will require abrogating union contracts on layoffs on retirements and health care, and restructuring its employment and benefit rules, close about 3,000 post offices, and contract out mail services to private organizations.
Naturally the unions are already screaming, as are some Democratic lawmakers.
Cry me a river. This is what financial reality looks like. This is the reality that’s coming to the rest of the Federal government in the not-too-distant future. Get used to it.
Well, CoverItLive completely crapped out. So I guess the live bit is down to me manually updating the liveblog, like some kind of animal.
1917: Ron Paul says we need to mind our own business. Iran is a problem because we overthrew Mossadegh and installed the Shah.
1919: Ron Paul now seems to be saying we have to try terrorists, and not reject the rule of law. Not just say someone is a terrorist and then shoot ‘em.
1921: Yeah, I’m sure Rick Santorum is extremely concerned that Iran’s mullahs violate the rights of gays. Paul: That’s war propaganda.
1922: Ron Paul is quite the isolationist. I get Paul’s stance, but I certainly worry that ignoring the world will result in another Pearl Harbor. Although, having said that, we spent several years ticking the Japanese off prior to Pearl.
1929: The Lovely Christine thinks Herman Cain is weak. “Go back to selling pizzas.”
1931: Romney wants a Federal Marriage amendment to the Constitution to ban gay marriage. Jon Huntsman, on the other hand, loves him some Civil Unions for gays. Ron Paul could care less. Rick Santorum doesn’t like it all. Doesn’t think much of abortion, either. Even in cases of rape.
1939: Romney wants personal unemployment accounts, rather than unemployment benefits.
1942: Huntsman wants to end the EPA’s regulatory power, and have more industry in the US.
1943: Bachmann: This increase in debt and the debt ceiling is madness, and the S&P downgrade proves it.
1945: Cain: Cap gains tax to 0%. Tax breaks to companies that bring profits back to the US.
1947: The Fed needs more transparency, according to Gingrich, and needs a sound money policy. But we still need it. Paul is happy that the issue of the Fed is getting some traction.
1949: Santorum thinks the Fed should be audited, but Ron Paul is a crank. Pot. Kettle.
1954: Huntsman says No Child Left behind should be scrapped. Cain says the federal Govermne t should be out of the business of micro-managing education.
1959: Closing statements of any interest: Ron Paul: Liberty is my chief value. Perhaps the only candidate for which that’s true. Romney: Obama is an economic incompetent. Huntsman: This nation is hurting and it’s bankrupt. Debt is killing us. Gingrich: The election is 15 months away. This country is in crisis now. We need leadership.
So, that was it. No one really grabbed me. Did anyone grab you?
One of the irritating things about being deeply in debt is dealing with your creditors. Happily, if your creditor is, say Wells Fargo, they tend to stay within strict legal bounds when dealing with you. If you’ve been unfortunate enough to seek credit from fellows whose last names end in vowels, they tend to be more…forceful in delivering their messages to you. As it happens one of the United States’ creditors also has a name that ends with a vowel: China.
And they have a message. The more or less official organ of the Chinese Communist Party—which is to say the Chinese Government—is the newspaper People’s Daily. So, it is with much interest that I read an op/ed piece in that fine journal with the title, "China must punish US for Taiwan arm sales with ‘financial weapon’". As messages go, this one’s pretty simple.
Now is the time for China to use its "financial weapon" to teach the United States a lesson if it moves forward with a plan to sale arms to Taiwan. In fact, China has never wanted to use its holdings of U.S. debt as a weapon. It is the United States that is forcing it to do so.
The U.S. House of Representatives just passed a debt ceiling bill on Aug. 1. On the next day, a total of 181 members of the House of Representatives signed a letter sent to U.S. President Barack Obama stating that the federal government should approve the sale of F-16 C/D fighter jets to Taiwan as soon as possible to help ensure peace and stability across the Taiwan Strait…
Despite knowing that major creditor countries, especially China, would be the main buyers of its new debt, certain arrogant and disrespectful U.S. Congress members have totally ignored China’s core interests by pressuring the president to sell advanced jets and even an arms upgrade package to Taiwan.
U.S. treasuries will lose value if China stops or reduces its purchases of them on a large scale, which will also affect the value of China’s U.S. treasury holdings. However,as the situation has gotten out of hand, allowing Washington politicians to continue their game might lead to more losses.
U.S. arms sales to Taiwan can only create more jobs for the United States but cannot improve the ability of Taiwan’s military force to compete with the Chinese mainland. The essence of the problem is that some U.S. Congress members hold a contemptuous attitude toward the core interests of China, which shows that they will never respect China. China-U.S. relations will always be constrained by these people and will continue along a roller coaster pattern if China does not beat them until they feel the pain.
I am mildly amused by the claim that such sales both threaten "China’s core interests", but "cannot improve the ability of Taiwan’s military force to compete with the Chinese mainland." Both of these arguments cannot simultaneously be true.
Less amusing is the common attitude of loan sharks to their creditors displayed here using much the same language that Tony "The Shark" would use: Namely, if creditors don’t do what they’re told, you have to "beat them until they feel the pain."
With the recent rise in bond prices and drop in yields, the Chinese have a number of options. The least damaging to the US would be to sit out a few bond auctions, which would force interest rates up. But they’ve also got the nuclear option of selling off as much paper as the market could bear. Yes, they’d forego some yield payments, but they’d probably make a nice tidy premium over the original purchase price to make up for it. Rising interest rates now, at a time when the economy is weak, and short-term rates are already effectively zero, would slow the US economy. At the same time, a massive repatriation of renminbi to China would cause a steep drop in the value of the dollar in foreign exchange markets. This would raise the price of imports equally steeply. This would cause something very similar to the oil price shocks of the 1970s, that plunged the US into stagflation.
Naturally, the Chinese would be hurt by the reduction in their export capability. The question then becomes, "Which of the two political systems, China or the US, is more concerned about democratic pressure to change policy in order to improve the economy?" Who is more responsive to public pressure: our government, or the government that initiated the Tiananmen Square massacre?
I don’t know about you, but I wouldn’t expect Hu "The Kommissar" Jintao to be the one that blinks first.
Of course, if we weren’t $14 trillion in debt, we wouldn’t be very vulnerable to this sort of thing.
Children are widely believed to be a blessing, and I suppose, in many ways, they are. But children are also a problem, in that each new generation of kids is a vertical invasion of barbarians. They have to be taught the details of how to behave in civilized society, to be instructed in its standards and norms. Moreover, those norms must be enforced, and violators must face the appropriate penalties for violating those norms. Doing all of this is an important charge, and you fail in it at your peril. Because, as the London riots show, the result of that failure is this:
The first line of defence against crime, the justice system, is not seen as sufficiently threatening to deter the youths. One of the group says this would be my first offence, "the prisons are over-crowded. What are they going to do? Give me an ASBO? I’ll live with that."
The government has failed to keep order, according to the group. They agree that their motivation is partially that "the government aren’t in control – because if they was we wouldn’t be able to do it could we?".
The low rate of arrest of looters is then also brought up as an incentive to loot, with one youth saying "they failed, innit? How many people have they arrested really, though? Ten." He then says "I’m not really bothered. I’ll keep doing this every day until I get caught."
The incentive to make money from their crime spree is clear: one of the youths says he has been looting because he didn’t want to "miss the opportunity to get free stuff that’s worth, like, loads of money".
Powerless families are also shown to be a major factor in allowing the looting to take place. One youth admits to warning his family he was going to be present at the riots, and then describes a subsequent telephone conversation with a family member: "He said ‘get home, you’re in trouble’ I said ‘no’ and just put the phone down. They can’t get into town, they can’t get me, and when I get home, nothing’s going to happen to me, I’m not going to get grounded or shouted at. I might get shouted at but that’s it, I’ll live with it and keep doing it."
These youths are not being irrational. Quite the opposite. They’ve quite fully absorbed the reality of modern life in the UK, a society that has largely abandoned the fundamental norms of civilization, giving them lip service, but without enforcing them.
Think of the very real shortcomings the attitudes above inculcate.
- The justice system is a farce, and no severe penalties need be feared.
- The government cannot effectively control lawlessness or protect property.
- The property of others can be taken without real fear of reprisal.
- Family discipline is toothless.
The larger society aids and abets these attitudes by defining self-defense as criminal vigilantism, and punishing the victims of crime for having the temerity to defend themselves, and perhaps injuring their assailants if attacked.
These youths in London and Manchester have learned their lessons well. Property owners cannot resist them, the police can’t control them, and if they are unlucky enough to get caught, sanctions will be minimal. These are not cultural attitudes that promote civilization. Quite the reverse, in fact. They are the attitudes of barbarism, in that they reduce all of society to victims—except for those that choose to be predators. The cultural message these youths have received is that predation pays and is relatively risk free.
They’re acting on that cultural message, in a perfectly understandable and rational manner, while authorities dither for days about whether the use of water cannons or rubber bullets are an appropriate response.
What these rioters need is the type of lesson that armed property owners convey with an immediacy that the police are unable or unwilling to provide. But, of course, in modern "civilized" Britain, that’s literally the last thing they have to fear.
As the great philosopher Monty Python once said, "Always look on the bright side of life". That’s what Democrats are doing today in response to the Wisconsin recall elections.
“The fact of the matter remains that, fighting on Republican turf, we have begun the work of stopping the Scott Walker agenda,” said state Democratic Party Chairman Mike Tate.
Phil Neuenfeldt, president of the Wisconsin State AFL-CIO, said voters sent a message that there is a growing movement to reclaim the middle class.
“Let’s be clear, anyway you slice it, this is an unprecedented victory,” he said.
Well, it certainly appears to have been a moral victory. Which is exactly like a real victory, except that it lacks, you know, victory. Republicans still control both houses of the legislature, as well as the governor’s mansion. And, with two Democrat senators coming up for recall votes next week, losing either of those two seats—or both of them—will make their moral victory somewhat less relevant than it already is.
At the moment, though, not only does this mean that all of Gov. Walker’s previous reforms will remain intact, the Democrats cannot—except by fleeing the state again, I suppose—prevent further fiscal reforms in the state. At the end of the day, the unions dumped something like $30 million into the recall elections, and they failed to wrest control of the state senate from republicans. The most expensive single effort, the $8 million effort against Alberta Darling, failed.
One of the Democrats "successes" was against a state senator that left his wife for a 25 year-old staffer, then moved out of his district. You really had to be politically sharp to win that one.
But, I have no problems with the unions and their allies enjoying their moral victory. Perhaps Markos Moulitsos said it best: "But let me just say, if tonight was a loss, I hope we have many more such "losses" in 2012."
Me, too, Kos. Me, too.
Today was the day of the recall elections in Wisconsin that government unions and their allied thugs and lefties set up to wrest control of the state senate from Republicans, in order to keep the taxpayer supported gravy train rolling. Sadly, they were largely successful in their attempt to overturn the last general election, and return reliable union pawns to the statehouse.
Of the six Republican state senators recalled, only three are now projected to defeat the recall, while two democrats are projected to win, and, at the time of this writing, one seat is undecided, but with the Republican with a slight lead. Even if that seat flips to the
Democrats unions, the resulting Senate composition will be tied 16-16 between Democrats and Republicans.The most likely result at this point, however, is that it will end up 17-15 Republican in the state Senate.
In either event, that essentially means that Gov. Walker’s reforms will remain in place. As a policy matter, irrespective of the results for the individual senators, the final result is tons of union money spent to accomplish nothing of substance. I hope that at least spending that $20-30 million felt good. I certainly feel good knowing that the unions no longer have it in their coffers.
It should go without saying that government employee unions are an anathema to a free society, and should be universally banned. Free market unions, of course, are an entirely different story. It’s funny to remember that in my lifetime, both the Left and the Right—and unions, for that matter—were opposed to government employee unions. Of course, that was before government unions became wholly-owned subsidiaries of the Democratic Party.
In the larger sense, of course, this is all pointless posturing, as the welfare state is essentially dead, or will be soon enough. That ride is pulling into the terminal, as I have explained in some detail previously.
Apparently, I’ve been far too depressing. Fine. Forget the collapse of the dollar, hyperinflation, exploding debt, moribund economy, etc., etc. I mean, why be so down? In the long run, we’re all dead, anyway, right? So why worry? Let’s talk about something we can all enjoy, then: Beer.
Actually, not beer, as such. I generally don’t drink plain old beer. If you enjoy the watery, bland flavor of of your Michelob Light or Miller Genuine Draft, then knock yourself out. I wouldn’t touch any of that stuff, though. I like to go deeper into the catalog, and enjoy the stout, the porter, and the fantastic subset of beer known as India Pale Ale, commonly known as IPA. I’ve actually been on a tasting rotation of several different IPAs in the past few weeks, and I thought I’d jot down a few notes about them. And, living in what is probably the epicenter of craft brewing in the United States, I have lots of choices.
Stone Brewery, which is conveniently located several blocks from my house, has an excellent reputation, and they have some great products, particularly the Imperial Russian Stout, and the Oatmeal Chocolate stout. and they’re probably best known for their Arrogant Bastard Ale. You’d expect the Stone IPA to be similarly enjoyable, but…I dunno. It really seems like a bland and uninspired IPA to me. It has just enough hoppy bitterness to be an IPA, but considering the premium price, and the quality of Stone’s other offerings, it should be better. There’s literally nothing about the Stone IPA that sets it apart.
Ballast Point Sculpin IPA
Ballast Point is another San Diego brewery, and the Sculpin IPA is very hard to find. If you do find it, I suggest you grab all of it you can, as it’s produced in small batches, and anything other than the 22oz singles are hard to find. As are the 22oz singles. This is a very complex IPA. The hoppy bitterness has a hint of pine, and the finish is complex and spicy. This is an recognizable IPA in flavor, but with lots of extra complexity and character at the finish. Highly recommended, if you can find it.
Widmer Brothers X-114 IPA
Widmer is just now getting into IPA brewing, and are starting off a "Rotator Series" IPA which will eventually consist of four different IPAs. The first release is the X-114 IPA. I imagine that the primary motive for brewing this was the thought, "You want hops? You want bitterness? Then stand by!" This is a very bold IPA. The nose is very redolent of pine, as is the taste. It’s just pure hops. I call it "Christmas Ale" because that’s what it reminds me of. It’s the smell of a clean house with fresh Christmas tree in the living room. The flavor is similarly crisp. I’d say you really have to love a bitter, hoppy ale to enjoy this, but if you do, this is the one for you. [UPDATE: I had another one after writing this post. This is an enjoyable brew if you’re an IPA fan, but if you’re just starting on IPA, you should stay away from it. It really has a strong character of hops, and newbies will find it far too astringent to enjoy.]
Sierra Nevada Torpedo Double IPA
This is one of the most balanced IPAs I’ve run across. Everything about it is just good. It’s not as complex as the Sculpin, and not as bitter as the X-114. It’s balanced, crisp, and refreshing, without going overboard in any direction. It has a nice, clean nose of hops, and just enough bitterness to bite. There’s no single element of the Torpedo IPA that’s outstanding. Instead, all of the elements are in balance, resulting in a marvelous IPA that’s more bold than, say the Stone IPA, without being overpowering. If you can’t find the Sculpin—and you probably can’t—then the Torpedo Double IPA is equally good.
New Belgium Ranger IPA
Ranger IPA is very close to the Torpedo in fine balance, strong, but not overpowering bitterness, and a clean, hoppy nose. I’d put it between the Stone IPA and the Torpedo for complexity of taste. At the same time, it seems lighter, crisper, and more refreshing than the Torpedo. It’s like an extra bitter summer ale.
And, finally, not an IPA…
Deschutes Obsidian Stout
This one is hard. Try it back to back with a Guinness (Extra Stout, not Draft), which is a dry stout, and you’ll hate it. Try it by itself, and you’ll love it. It’s an unusual stout, in that it has these flavors of malt and barley sweetness that the bitter hops overcomes at the finish. Lots of dark chocolate and coffee notes as well. It’s a much bolder stout than usual. I wouldn’t use it as a refreshing summer drink, because it isn’t. This is a sipping stout that’s very robust and substantial. I’d think that you’d really need to be a porter or stout fan to truly enjoy this, as it’s definitely not an introductory brew. Also, it’s available no further east than TX.
New Belgium Summer Ale and New Belgium Fat Tire Ale
Both of these ales are very close in flavor. They are much more lightly hopped than an IPA, and both have a fuller, more malty hint of sweetness in taste. The Summer Ale, however is a bit lighter, and crisper, and is an excellent, refreshing hot-weather beverage. Both are very good pale ales. I was drinking the Summer Ale a few weeks ago when we were having a heat wave here. You can drink it like water, but I wouldn’t recommend doing that, unless you don’t need to operate heavy machinery. Or stand up.
I went to BevMo this weekend, and picked up a couple of six-packs of some British imports: Fuller’s London Porter and Extra Special Bitter and Samuel Smith’s Oatmeal Stout, so I’ll be trying those out for the next several days. I’ll let you know how that goes. I’m especially keen to try the Samuel Smith’s Oatmeal Stout. This is the original modern oatmeal stout. First brewed in the 1750’s, Smith’s produced it until after WWII. They resurrected this type of stout in 1980, and were quickly followed by others in the UK and US.
I put the two different bottles of Fuller’s in the fridge this afternoon, and I couldn’t wait to taste it this evening.
Fuller’s ESB (Extra Special Bitter)
It pours a dark amber, with a thin, tan head. The nose is filled with hints of apricot and dried fruit. The taste comes on with a very slight hint of bitterness that is quickly overcome by a full malt flavor with hints of toffee and caramel, and finishes with a taste of whole-wheat bread sweetness. it’s got slightly more carbonation than I remember from pub draft bitter in the UK, which is only to be expected from the bottle, which dissipates after the glass has been sitting for a few minutes. Other than that, it’s very much in the tradition of a draft pub bitter. Probably a good choice for people that find the bitterness of an IPA is too much, and prefer the milder, sweeter ales. Or people, like me, who just like to try different ales. Even The Lovely Christine, who hates beer, tasted this and pronounced it drinkable. It’s that good, and that mild.
Fuller’s London Porter
Oh. My. God. It pours black with a red flare. Before you even sip it fills your nostrils with a strong essence of earth and wood smoke. The taste attacks with strong notes of coffee and chocolate and toast. And it finishes with the bitterness of roasted malts, rather than the astringency of hops, followed by sweet toffee aftertaste. It has a thick, substantial mouth feel, and is smooth and creamy. Under it all is this sweet, malty, richness. I’ve had a number of American "Smoked Porters", but nothing like this. The coffee and cocoa notes are so pronounced! It’s lightly carbonated. This is just absolutely fantastic. Rate My Beer gives this a perfect 100. Now I know why.