Questions and Observations

Free Markets, Free People

What was Einstein’s definition of “insanity”?

Oh yeah, “doing the same thing over and over again and expecting different results”.

Today’s example, via the usual suspects, just boggles the mind:

The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.

President Obama’s economic advisers and outside experts say the nation’s much-celebrated housing rebound is leaving too many people behind, including young people looking to buy their first homes and individuals with credit records weakened by the recession.

In response, administration officials say they are working to get banks to lend to a wider range of borrowers by taking advantage of taxpayer-backed programs — including those offered by the Federal Housing Administration — that insure home loans against default.

This is just, frankly, incredible in its stupidity.  We’ve been here, done this and suffered the consequences in terms of a financial meltdown and an economy that seems to be in permanent “recession”.  We’d have the T-shirt too, but they took it off our backs.

Consider the administration’s solution to the perception that we’re “leaving too many people behind:  Let’s do again what was a major contributor to the last melt down.  No prob.  They’ll just blame the banks and the “market”.  The result: more people “left behind”.

I mean, it hasn’t even been a decade yet.  We’re not even doing this with a new administration.  These are, for the most part, the same people who crashed it last time.

Why is it that “leaving too many people behind” is the priority, when in the past those who were supposedly left behind, found some way in the future to catch up?  Why is it government’s job to “insure” risky loans because of that feel-good claptrap?

Because we’re freakin nuts, that’s why.  We’re bound and determined to ruin this country based on an ideology that plays to “feelings” and “emotions” rather than good common sense, the laws of economics and freedom and libery.  That’s why.

This is tar and feathers worthy, yet we’ll sit around like lumps while a majority claims it’s a “good idea” because it is “only fair”.

“Fair”.  The word that will – is – ruining this country.

~McQ

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Some sanity, sad as it is

It’s not often one finds a dose of sanity in the New York Times. When one does, it should be celebrated, rather than ignored. In this case, the sanity comes from David Stockman, former budget director for President Reagan. His bottom line is no different than what I’ve been predicting since 2009. It’s just as gloomy:

[T]he Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or the welfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.

When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.

He calls it a state-wreck, which is exactly what it is. An arrogant government that thinks it can fix everything, help everyone, and create money out of nothing has corrupted the markets & political culture, and mortgaged our future.

Even now, the Fed, after two previous rounds of "monetary stimulus"—code words for creating en ever larger supply of "money"—is dumping $44 billion cash into the market every month. And where it going? Creating millions of new jobs? No. It’s just going to Wall Street, where the equity markets have hit an all-time high.

The wheels have been wobbling for the last five years. Sometime in the not-too-distant future, they’ll simply…come off, and then we shall see what we see.

Read the whole article. Save it. Print it out. Keep it. That way, you’ll be be able to show your children how the richest, most powerful nation in the history of the earth committed suicide.

~
Dale Franks
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Economic Statistics for 2 Apr 13

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

Automakers are reporting the strongest monthly sales in 6 years for March. Ford, GM: 6%, Chrysler: 5%, Toyota,Nissan 1%.

In weekly retail sales, ICSC-Goldman Store Sales rose 4.7% for the week, but are up only 1.9% from last year. Redbook reports a strong year-on-year sales increase of 3.5%.

Factory orders rose 3.0% in February, and January’s number was revised upwards by a full 1% to -1.0%. Ex-Transportation, orders rose only 0.3%, however.

~
Dale Franks
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Regulation tends to cost lower income people more

I know that’ll come as an absolute stunner, huh? Not really. Regulation costs money. It costs money for compliance enforcement, which comes from taxes, and it costs companies money for compliance in the form of higher costs – costs that are passed on to consumers.

So? So – from the Mercatus Center at George Mason University, find out:

Low-income households benefit the most when they act to reduce their exposure to the greatest risks they face, such as relatively common events and activities that cause illness, injury, and death, many of which can be traced to living in unsafe neighborhoods. In contrast, high-income households generally focus more on small risks—for example, tiny environmental risks that are far less likely to occur and generally affect fewer people at the expo- sure levels regulations address.

LOWER INCOME HOUSEHOLDS BEAR MORE OF THE COSTS OF REGULATION

Regulation focused on small risks delivers benefits to a limited group but spreads the costs across everyone. As a result, regulation effectively transfers money from low income households, who need to prevent larger risks, to high income households, who are concerned about small risks. Low income households are, in a sense, paying for the lifestyle preferences of the wealthy.

Such regulation increases consumer prices and lowers worker wages.

• Regulations act like a regressive sales tax, with middle and lower income households bearing much of the cost of rules that focus on the risk preferences of wealthier households, since they all pay the same, higher prices.

• Cost of regulation as a share of income is estimated to be as much as six to eight times higher for low-income households than for high-income households.

• [Diana] Thomas estimates that households can mitigate the same level of mortality risks privately for about one fifth of the cost of public risk-reduction strategies.

Well, imagine that, the laws of economics at work in a very predictable way.  And, of course, completely opposite of the professed claim of the left to be on the side of the poor. Because it is that very group that continually push more and more regulation because, one assumes, they believe if some regulation is good, more has to be better. But, as a group, being mostly economically illiterate combined with unaccountable faith in government power, they end up with these sorts of ‘unintended consequences’ all of the time.

~McQ

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For our readers in software development–a new technology called the agilo-modulizer

Today seems like a perfect day to tell you about some new technology I’ve been involved with for software development. Here’s a ninety second video with a high level description, made by the video training company that I did a course with last year:

 

I know some of our regular commenters, particularly looker, will be interested in this technology.

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Observations: The QandO Podcast for 31 Mar 13

This week, Bruce, Michael and Dale discuss the events of the week.

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 2010, they can be accessed through the RSS Archive Feed.

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North Korea declares war on the US and South Korea

A little delusion on a grand and dangerous scale:

The government, political parties and organizations of the DPRK solemnly declare as follows reflecting the final decision made by Kim Jong Un at the operation meeting of the KPA Supreme Command and the unanimous will of all service personnel and people of the DPRK who are waiting for a final order from him.

1.From this moment, the north-south relations will be put at the state of war and all the issues arousing between the north and the south will be dealt with according to the wartime regulations.

The state of neither peace nor war has ended on the Korean Peninsula.

Now that the revolutionary armed forces of the DPRK have entered into an actual military action, the inter-Korean relations have naturally entered the state of war. Accordingly, the DPRK will immediately punish any slightest provocation hurting its dignity and sovereignty with resolute and merciless physical actions without any prior notice.

You can read the whole thing here. Apparently Marshall Poppin Fresh, aka Kim Jong Un, is a little full of himself and feeling froggy. The mouse has roared. Unfortunately, this mouse had a nuke or two and is threatening to use them. Whether they’ll work or whether he can actually deliver them remain to be seen (and hopefully he’s just as delusional about that as he is actually going to war).

Another in a long line of attempts to use Nork threats to extort money from the West, or is this little fool serious?

Stay tuned.

~McQ

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Economic Statistics for 29 Mar 13

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

Personal income rose 1.1% in February, while personal spending rose 0.7%. The PCE Price Index, an inflation measure, rose 0.4% at the headline level, and 0.1% at the core. On a year-over-year basis, personal income is up 2.6%, while spending is up 3.3%. The PCE Price Index is up 1.3%.

The Reuter’s/University of Michigan’s consumer sentiment index erased last month’s decline, rising to a strong 78.6 in March.

~
Dale Franks
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On casting stones at same-sex couples

Over at RedState, Erick Erickson promoted a post in favor of legalizing same-sex marriage by “mjdaniels,” a Christian conservative and long-time lurker there.  It’s a long post that makes a number of good points, but he ultimately makes a number of rhetorical errors that give his fellow Christian conservatives an easy way out, and they did fix on those errors.  So it is that the people I see praising his argumentation with the fewest reservations are mostly not currently practicing Christians or self-identified conservatives.

Among those errors, the biggest was probably when he said, “Is Homosexuality a Sin? I. Do. Not. Care.”  Christians are supposed to care whether others sin. The proper question is the duty others have to sinners. And behold all the RedState regular commenters saying that they’re called to rebuke sin and lead sinners away from sin, out of love.  Many deny that enshrining these rebukes in legal exclusivity is tantamount to “hunting down sinful people,” and they claim that it isn’t them but same-sex marriage activists who are trying to “wield the power of the government to enforce my convictions on others.”

I’d sorely like to see how his fellow Christian conservatives would respond if they couldn’t focus on those errors.  In particular, I wished “mjdaniels” had better focused on something he only said in passing at the end of his post: that opponents of same-sex marriage were essentially calling for “casting the first stone at” this set of sinners.

It seems to me that when persuading Christian conservatives, one should be absolutely clear that the status quo is coercion – discriminatory taxes and inheritance rules, and denying the right to contract, all of which conservatives agree is state coercion when it’s applied to them – and that when Jesus was challenged to support such coercion (stoning a woman caught in the act of adultery, according to Mosaic Law), he in turn challenged the teachers of law and Pharisees that the first stone should be cast by one who is without sin.  When no one would stone her, he said he would not condemn her that way either, and he simply told her to leave her life of sin.

If even Jesus doesn’t think it’s humans’ place to punish violations of one of the Ten Commandments dealing with marriage, then it’s an uphill climb for a Christian conservative to argue that it’s their duty to uphold the use of such force based on moral strictures that are much less clear.

I find it baffling that conservatives think the government is capable of making a compact sacred by calling it a marriage, but there I see it in the RedState comments.  Do they teach their children that the state’s refraining from coercion is an indication of societal approval of a behavior?  No; what is not prohibited is merely left to be governed by the other aspects of civil society (the family, the market, churches, social pressure, etc.) and, if Christians are correct, God’s ultimate judgment.

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