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Free Markets, Free People

Economic Statistics for 8 Aug 13

The following US economic statistics were announced today:

The Bloomberg Consumer Comfort Index rose 3.5 points to -23.5, the highest in 5 years.

Chain store sales were mostly positive for July, though most of the increases come from new stores, with same store sales a bit weak.

Initial claims for unemployment rose 7,000 last week, to 333,000. The 4-week moving average fell 5,750 to 335,500, Continuing claims rose 59,000 to 3.018 million.

The Fed’s balance sheet rose $13.6 billion last week, with total assets of $3.585 trillion. Reserve Bank credit increased $10.3 billion.

The Fed reports that M2 Money Supply increased by $46.4 billion last week.

~
Dale Franks
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Give government power and they’ll abuse it: Part II

Well, well, well … here’s a surprise!  Not!

Remember the post the other day about how the DEA was “recreating the investigative trail” to hide where they got some of their initial info (you know, the newest euphemism for lying)?

As with most of these sorts of stories, it apparently only exposed the tip of the proverbial iceberg:

Details of a U.S. Drug Enforcement Administration program that feeds tips to federal agents and then instructs them to alter the investigative trail were published in a manual used by agents of the Internal Revenue Service for two years.

The practice of recreating the investigative trail, highly criticized by former prosecutors and defense lawyers after Reuters reported it this week, is now under review by the Justice Department. Two high-profile Republicans have also raised questions about the procedure.

A 350-word entry in the Internal Revenue Manual instructed agents of the U.S. tax agency to omit any reference to tips supplied by the DEA’s Special Operations Division, especially from affidavits, court proceedings or investigative files. The entry was published and posted online in 2005 and 2006, and was removed in early 2007. The IRS is among two dozen arms of the government working with the Special Operations Division, including the Federal Bureau of Investigation, the National Security Agency and the Central Intelligence Agency.

So … it could even go deeper, no?  And of course, this just adds more mud to the IRS’s already mud-spattered reputation.

Show of hands … how many would be shocked, shocked I tell you to learn that the FBI, CIA, NSA and a myriad of other alphabet soup Federal agencies were doing this as well? 

For those not raising your hand, naïve doesn’t even begin to cover it.

~McQ

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Again, if ObamaCare is so great, why doesn’t anyone want it? And why are the “elite” being exempted?

The latest proof of its undesirability comes from … Congressional staffers.  I mentioned this before.  They, like the IRS, want no part of this costly boondoggle.

So who rides to the rescue?  Why Mr. ObamaCare himself, even while he’s telling the rest of us poor, ignorant schlubs how much we’re going to enjoy his legislative legacy:

Members of Congress and Hill staffers will not lose their healthcare subsidies from the government when Obamacare is implemented because of an exception proposed Wednesday by the Office of Personnel Management.

Under the current system, the government covers most of the cost of healthcare premiums for members and their staffers. But an amendment to the Affordable Care Act — proposed by Iowa Republican Sen. Chuck Grassley — threw those subsidies into question saying that members and staff must enter into the exchanges or be covered by insurance “created” by law.

The potential for staff losing the subsidies led to concerns of “brain drain” from the Hill if staffers left as a result of the increased costs.

We could use a good “brain drain” from the population that has helped bring us this debacle that even they don’t want. But on to the good part … relatively speaking:

Last week, when President Barack Obama came to the Hill to meet with Senate Democrats, he informed them that he would personally get involved to sort out the confusion, and the White House said that OPM would issue guidelines this week.

The guidelines, released Wednesday, allow for members and staff to retain their subsidies from the government, an exception in exchange for giving up “premium tax credits” that they would otherwise be eligible for under Obamacare.

This is what our government has become … the dispenser of favors to the politically favored. Apparently Congress is “too important to fail” and they don’t want to be losing all those brilliant folks who, over the years, have brought us to this state of affairs.

And yet there are fools who will defend this sort of favoritism.  Because, you know, government is just a big candy machine for some … if you have the right coins.

~McQ

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Economic Statistics for 6 Aug 13

Here are today’s statistics on the state of the economy:

America’s trade deficit narrowed to $-34.2 billion in June. Exports rose, and imports fell, though the falling imports may signal a lack of domestic consumer demand.

The Gallup Economic Confidence Index (ECI) fell from -98 to -12 in July.

Redbook is reporting solid retail sales growth at 3.7% from a year ago. ICSC-Goldman reports retail sales rose 0.3% last week, and are up 2.5% from a year ago.

~
Dale Franks
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The need for more direct action against the GOP establishment

I was reading Da Tech Guy’s musings on why limited government types need to work within the GOP rather than try a third party approach to rid themselves of the GOP establishment. He quotes Rush Limbaugh on what Ronald Reagan managed to do the last time the GOP establishment found themselves threatened:

The real question, in my humble opinion, is that this effort and energy needs to be used, as Ronald Reagan did, to take over the Republican Party, to repopulate it and that’s exactly what Reagan did, he took it away from the Rockefeller blue-blood country club types starting in 1976, took him ’til 1980 to do it.

Worked before, so it should work again, right? I’m skeptical.

First, what did Reagan really accomplish? A few things, sure. Don’t get me wrong – he was the best we’ve seen in my lifetime, but given the competition, that doesn’t mean much.

He got income taxes down from their preposterous progressive wet dream rates of 70%. He stood up to the Soviet Union, and possibly hastened the crumbling of that creaking empire by a few years. He made it respectable, after the raging waves of liberalism in the sixties and seventies, to say that government was more likely to be a problem than a solution for social problems.

And that’s about it.

There was no “taking over the Republican Party” under Reagan. He got a few things done, but as soon as he was out the door, it was back to business as usual for the GOP. 

Reagan was forced or induced by the GOP establishment to take on one of their blue bloods as his VP. Then, after Bush the Elder won what was supposedly a third helping of Reagan, he immediately broke his solemn promise on taxes, passed more social nonsense such as the ADA, and managed to fumble away the popularity and credibility built by Reagan to the point that he was defeated by a smarmy hick used car salesman from Arkansas.

The GOP then proceeded to nominate Bob Dole, Bush the Younger, John McCain, and Mitt Romney as their presidential candidates. GOP establishment stalwarts, every one of them. In some of those cases, the GOP establishment pulled out every trick in the book to drag their preferred choice over the finish line.

Yes, the GOP establishment learned something from the ascent of Reagan. They learned techniques to keep it from ever happening again.

The GOP establishment has made something perfectly clear: they would prefer to lose rather than let people like Reagan threaten their dominance of the party. Even when they get control, as Newt Gingrich managed in 1994, they revert to their ruling class habits and fumble the opportunity away without making any progress in limiting government. In fact, after a few years, and given a cooperative president, they proved they prefer bigger government to smaller. Under Bush, a classic GOP establishment blue blood, the establishment players in the Congress enthusiastically federalized education, passed a whole new social welfare program for seniors, and passed the biggest infringement of free speech seen in my lifetime (thankfully eventually overturned by the Supreme Court).

What motivation do limited government types have to vote for such weasels or give them support of any kind? Not much, and the elections of 2006 and 2008 proved it.

Even after seeing their limited government base re-energize the party and give them back control of the House in 2010, the GOP establishment still didn’t get the message. They worked their butts off to get the “electable” Mitt Romney as their presidential nominee. Having again shown contempt for limited government types, the establishment GOP thus managed to lose against one of the weakest presidential candidates for re-election in history. No one besides Obama has *ever* won re-election with fewer votes than he got the first time, which ought to tell you just how weak he was. But the GOP managed to be even weaker, with a candidate who looked like an android programmed to only say nice things, and never ever raise any of those unpleasant ideas about limiting government. Oh, no, government was just going to be managed better. Just like it was under those managerial types named Bush.

So how do these establishment GOP types keep getting what they want? One big reason is that limited government advocates such as Limbaugh, Da Tech Guy, Charles Krauthammer, Allahpundit over at Hot Air, and about half the denizens of sites such as Free Republic pound the same drum every election. Their basic message is “Yep, we’ve been screwed by these guys more times than we can count, but we still have to support them because the Democrats are worse!TM

OK, message taken – the Democrats are worse. But, as limited government types demonstrated in three of the last four elections, that’s not enough reason to support the GOP establishment. Indeed, in the only exception that the GOP did well (2010), many of the limited government types only turned out because they were supporting someone other than an establishment candidate.

So we’re really four for four in proving that limited government types are fed up on supporting the establishment GOP.

Why on Earth would they not be? What’s the point of investing time, energy, and emotion in an effort to elect someone who will most likely end up being just as subverted by the GOP establishment as Bill Frist, Tom Coburn, Jeff Flake, and Mario Rubio have been?

And even on those occasions where a Ted Cruz or Rand Paul ends up winning and sticks to their guns, they can’t get anything done. After obediently voting for establishment GOP types for leadership positions, they then spend more time fighting the very people they supported instead of fighting Democrats.

The limited government advocates I mentioned above all desperately want to believe that the answer is simply running better primary candidates to beat establishment Republicans, but then supporting the establishment guys who win the rigged game at least nine times out of ten. That’s playing by their rules.  I simply don’t see how that can ever work.

Therefore I’m confident that simply “working within the GOP” isn’t the answer. It’s a fantasy to think that will get us a party in which the leaders will work for limited government. The establishment GOP has decades of experience defeating every such attempt, and they’ve got the entire nomination and campaign financing game rigged in their favor.

Plus, the establishment GOP is willfully blind to the biggest successes the Republicans have had in my lifetime: Reagan, and the turnovers of Congress in 1994 and 2010. All three were fueled by enthusiasm for limited government. If the establishment GOP were simply practical politicians, they would embrace the limited government strategies and philosophies that won those elections.

But by subverting every one of those successes, they proved that they’re not just apathetic to limited government – they’re actively opposed to it. As members of the political class, the only thing they like about their limited government base is the votes provided. They are willing to pretend to embrace limited government principles to get those votes, but that just makes them more dishonest than Democrats, who are at least honest about growing government without end.

I see no reason to give the establishment GOP any quarter whatsoever.

The reluctant backers of the GOP establishment then say, “A third party would be disastrous! The Democrats would dominate for a generation!” I think things are a lot more complex than that.

First, waves of political change tend to happen in unpredictable, non-linear ways. We’re headed for some radical change in the next couple of decades, as we face multiple “what cannot go forever will stop” problems. Plus, a majority of people consider politicians more untrustworthy than the guys offering Three Card Monte on the streets of New York. I think there are plenty of possibilities in that mix to trigger the downfall of a major party.

Second, a third party opens up possibilities that make it more likely to genuinely take back the GOP by kicking out enough establishment Republicans.

The GOP stalwarts would have you think that the only way a third party would work is trying to challenge both the Democrat and the Republican in a large number of races. That would indeed give Democrats a better chance in marginal districts, and help them achieve majorities in Congress. But that’s not the only way to do it.

Many states allow candidates to run under the banner of more than one party. In such places, a candidate backed by a Tea Partyish third party could also run for the GOP nomination.

The message to Republicans would be “Look, I’ve already secured this limited government party’s nomination, and so I’m running. I’d also like to be the Republican nominee, which would mean I have a really good chance to win. But if I’m not the GOP nominee, the conservative/libertarian vote will be split and the Democrat would probably win.”

The GOP establishment would be furious, and as I noted above, they would probably prefer to lose to a Democrat rather than cave to such pressure. I’m not so sure, though, about the typical Republican primary voter. A lot of them are fed up with business-as-usual Republicans, and might be open to someone who shows serious limited government credentials by also running under a party specifically created to advance those principles.

A variation in other states would be to run for the GOP nomination, and make it clear from the beginning that losing that nomination to an establishment Republican will then result in a third party run. Sure, the establishment GOP and media would be shouting “sore loser!” till election day. But they had no problem with an establishment Republican (gentry GOP member Lisa Murkowski) who did exactly that, so why not ignore their hypocritical braying and do it anyway?

Would these kinds of strategies work? Probably in some cases, and not in others. But we can’t solve the current dominance of establishment Republicans by playing by their rules. It’s time to try more hardball strategies.

There is risk in that approach. There’s also risk in the “stick by the GOP because Democrats are worse” route. The limited government energy generated in 2010 has already been reduced to cynicism in many Tea Party supporters, and much of that reduction is due to seeing their goals subverted by candidates they trusted who defected to the establishment GOP side. We’ve seen what happens when the base just gets sick of supporting the establishment Republicans and drops out of the process. We get demagogue Democrats.

I think it’s time for direct confrontation with the GOP establishment. They’ve screwed us long enough. Any game theory expert would tell us it’s time to return the favor.

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Give it power and government will abuse it

Seems odd, to me, that we have to point this out every now and then.  The naive trust some people have in government always perplexes me.  It speaks to an ignorance of both human nature and history that is simply profound.

Our latest example? Well, right here from the good old US of A, land of the free, home of the brave … and the DEA:

A secretive U.S. Drug Enforcement Administration unit is funneling information from intelligence intercepts, wiretaps, informants and a massive database of telephone records to authorities across the nation to help them launch criminal investigations of Americans.

Although these cases rarely involve national security issues, documents reviewed by Reuters show that law enforcement agents have been directed to conceal how such investigations truly begin – not only from defense lawyers but also sometimes from prosecutors and judges.

The undated documents show that federal agents are trained to “recreate” the investigative trail to effectively cover up where the information originated, a practice that some experts say violates a defendant’s Constitutional right to a fair trial. If defendants don’t know how an investigation began, they cannot know to ask to review potential sources of exculpatory evidence – information that could reveal entrapment, mistakes or biased witnesses.

“Some experts say?”  Really?  Frankly, if all of them aren’t saying it, they’re wrong.  Again, we have laws … you know, rules? … that require federal law enforcement to go through a process to obtain warrants in order to get this sort of information.  And if they don’t, if they get it without a warrant and through other means, it is considered to be unusable in a trial.

So to avoid that, they “recreate”.  In other words, federal agents, at least those in the DEA, are trained to do what?

Lie.

I have never heard of anything like this at all,” said Nancy Gertner, a Harvard Law School professor who served as a federal judge from 1994 to 2011. Gertner and other legal experts said the program sounds more troubling than recent disclosures that the National Security Agency has been collecting domestic phone records. The NSA effort is geared toward stopping terrorists; the DEA program targets common criminals, primarily drug dealers.

“It is one thing to create special rules for national security,” Gertner said. “Ordinary crime is entirely different. It sounds like they are phonying up investigations.”

Ya think?!  Of course they’re phonying up investigations if they’re obtaining “evidence” via illegal means and the “recreating” the investigative trail to “cover up” where the info originally came from.

Question: how many people have ended up in jail due to the lies of DEA agents?

My guess is hundreds if not thousands.

Of course, any abuse has defenders:

But two senior DEA officials defended the program, and said trying to “recreate” an investigative trail is not only legal but a technique that is used almost daily.

A former federal agent in the northeastern United States who received such tips from SOD described the process. “You’d be told only, ‘Be at a certain truck stop at a certain time and look for a certain vehicle.’ And so we’d alert the state police to find an excuse to stop that vehicle, and then have a drug dog search it,” the agent said.

Can’t imagine why “two senior DEA officials” would defend it, can you?  Oh, yeah, their rear-ends are on the line – so move along citizen, don’t peek behind the curtain, nothing to see here.

You see, there’s a difference between acting on a tip and using information that was illegally obtained.

But apparently that nuance is beyond our two senior DEA officials.

~McQ

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Economic Statistics for 2 Aug 13

Here are today’s statistics on the state of the economy:

A disappointing 162,000 net new jobs were created in July, but the Unemployment rate declined to 7.4%. The working age population increased by 204,000 last month, yet the labor force declined by 37,000. So, "unemployment" fell. Yay! In the real world, the labor force participation rate fell to the historic low of 63.4% again. Also, the average work week decreased by 0.1 hour in July to 34.4 hours, while average hourly compensation dropped by 2 cents to $23.98. Of the new jobs created last month, a quarter were in restaurant or food services. Using the historical average level of labor force participation, the real unemployment rate is 11.58%.

Personal income rose 0.3% in June while consumer spending jumped 0.5%. The overall PCE price index rose a sharp 0.4%, while the core rate rose 0.2%. On a year-over-year basis income rose 3.1% but spending rose 3.3%, while the PCE price index is up 1.3% and the core PCE is up 1.2%.

Factory orders rose 1.5% in June, entirely on transportation orders. Ex transportation orders fell -0.4%.

~
Dale Franks
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