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Economic Statistics for 11 Sep 13

The MBA reports that mortgage applications fell -13.5% last week, with purchases down -3.0% and re-fis down -20.0%. Rising mortgage rates are the culprit. This implies eventual increases in Treasury yields, which, in turn, imply a higher cost of federal debt service, and higher deficit. Enjoy.

Wholesale inventories rose a slight 0.1% in July, with the stock-to-sales ratio steady at 1.17.

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Why no one buys Obama’s strike talk

Ed Morrissey at Hot Air, talking about the speech Obama made about Syria last night, had this to say:

Yesterday, though, Obama sounded contradictory and confused.  He attempted to rouse moral outrage over the use of chemical weapons against scores or hundreds children in Damascus on August 21st, which is an easy case to make — but thousands of children have been killed in the Syrian civil war in all sorts of ways, by all sides. Obama argued that Bashar al-Assad had to be deterred from using chemical weapons in the future, but left out any call for regime change, which is still the official strategic goal of the Obama administration. To Americans reluctant to engage in another war, Obama cajoled us to action, claiming that only the United States had the power to bring Assad to heel.

In this instance, Obama is completely right.  However, to bring “Assad to heel” would take a whole lot more of American power than this president is willing to use.  If, in fact, he keeps it “small”, i.e. a very limited strike, people are asking ‘what’s the use’.  It won’t bring Assad to heel as he claims we have within our power.  He’s wanting one thing but not willing to do what is necessary to achieve it.  And we all know about how mission creep works.   Especially when there is a political ego involved.

But that sort of incoherence wasn’t at all confined to that portion of the speech.  As Politico’s editor-in-chief said:

‘Two weeks of zig-zag foreign policy by President Barack Obama – marching to war one moment, clinging desperately to diplomacy the next – culminated Tuesday night, appropriately enough, in a zig-zag address to the nation that did little to clarify what will come next in the Syria crisis but shined a glaring hot light on the debate in the president’s own mind.

‘The speech began with an earnest statement on behalf of Zig, a sober appreciation that military power has its limits and good intentions don’t necessarily equate to good policy: ‘I have resisted calls for military action because we cannot resolve someone else’s civil war through force, particularly after a decade of war in Iraq and Afghanistan.’

‘But it was followed the next paragraph by some piercingly indignant words making the case for Zag, the conviction that conscience and the obligations of global leadership sometimes require America to act. The aim was to shake a skeptical public out of complacency: ‘The images from this massacre are sickening: men, women, children lying in rows, killed by poison gas, others foaming at the mouth, gasping for breath, a father clutching his dead children, imploring them to get up and walk.

As another columnist for Politico said:

“In a painful reminder of why presidential addresses are usually day-of bookings – made when the White House can match the right timing with a clear message for the American people – Obama went before the cameras in the East Room and said… not much that he hadn’t said already over the last two weeks.

Back to Morrissey:

So what was Obama asking of the American people? Nothing. What new and convincing information did Obama bring to the American people?  None.  What new argument did Obama make to shift the strong momentum against military action? He had none.  There was nothing new in this speech from Obama that hadn’t been argued at length in his six broadcast-network interviews the day before, or that his White House and State Department hadn’t offered in the previous week before the speech.

Meanwhile Obama wants the vote in Congress to be delayed because, well, you know, he’d lose.

But all is right with the world now … Obama has made a speech and the spin machine is hard at work trying to pretend this all went according to some plan that no one knew about previously.


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Stumbling into a solution on Syria?

Yeah, not really … although the usual suspects are bound to try to spin this as a triumph of diplomacy.  Oh, it’s a “solution” (“Peace in our time”!) … but not one that accomplishes much of what the US wanted done – well, except maybe save a little face.  And for that, they’re rather glad to capitulate.

In fact, as The New Republic pointed out, Putin and Assad just played Obama … big time. They knew he was desperate for a way to climb down from his “red line” comments and so they took an absurd, off the cuff remark by Sec. State John Kerry and the administration said, “sure”.

As TNR reports it:

Speaking in London next to British Foreign Secretary William Hague on Monday, Secretary of State John Kerry said that perhaps the military strike around which the administration has been painfully circling for weeks could be avoided if Bashar al-Assad can “turn over every single bit of his chemical weapons to the international community in the next week. Turn it over, all of it, without delay, and allow a full and total accounting for that.”

The fact that Kerry immediately followed with, “But he isn’t about to do it, and it can’t be done, obviously,” didn’t seem to bother anyone. (Probably because they were focusing on his other slip-up: calling the promised strikes “unbelievably small.”)

The Russians immediately jumped on the impromptu proposal, calling Kerry to check if he was serious before going live with their proposal to lean on Syria. An hour later, they trotted out Syria’s foreign minister, Walid al-Mouallem, who said he too was down with the proposal, which was a strange way to get the Syrians to finally admit they even had chemical weapons to begin with. Before long, United Nations Secretary-General Ban Ki Moon, the English, and the French were all on board, too.

As for the “truth” about this being something planned by the White House and Kerry? Too late to claim that. The White House blurted out reality:

Meanwhile, back in Washington, the White House was just as surprised as anyone. Asked if this was a White House plan that Kerry had served up in London, Deputy National Security Advisor Tony Blinken was unequivocal. “No, no, no,” he said. “We literally just heard about this as you did some hours ago.”

That would be funny if it wasn’t so sad and scary.

So how did they play the Obama administration? Remember that Kerry said they had to be under international control in a “week”? Yeah, that’s going to happen isn’t it. How about 2 years? 3?

Here’s the point … they avert any strike with their agreement knowing the international community – now that the UN is back in the game and Russia and China still have Security Council vetoes – won’t be able to move the ball for months if at all.

Again, I’ll just let TNR lay it out for you:

[Kerry] answered a hypothetical question in a hypothetical way. He blurted out a pie-in-the-sky, hyperbolic idea—getting rid of “every single bit” of the chemical weapons scattered across Syria “in the next week”—but everyone seized on it as a realistic proposal. It’s not.

First, how do you deal with a regime that only admits it has chemical weapons under the threat of impending military intervention? Or that uses chemical weapons while a team of U.N. inspectors is there to investigate the prior use of chemical weapons, in the same city?

Second, that handful of chemical weapons storage and mixing facilities are just the ones we know about, and, now that the U.S. has been loudly beating the war drum for weeks, Assad has been moving his troops and weapons around. If we thought getting to “beyond a reasonable doubt” with the intelligence on the August 21 chemical attack was hard, imagine us getting to “every single bit.”

Third, negotiating with the Russians and the Syrians about what “every single bit” and what disposing them mean will certainly take more than “the next week.” Both Moscow and Damascus have all the time in the world, and the Kremlin, which has never met a legal norm it couldn’t waltz around, will quibble and hair-split and insist that this is all done legally—whatever that means in Moscow.

Fourth, the mechanics of disposing these chemical weapons are far from straightforward. Quoth the Times: “flying [the chemical weapons] out of the country is not as simple as picking up nuclear components—as the United States did in Libya in late 2003—and moving them to a well-guarded site in Tennessee.”

Fifth, and most important, is the fact that Assad giving up his chemical weapons was only part of the stated objective. If you listened to the White House pitch closely, the point of the military strike was not just to stop Assad from using chemical weapons further on his citizens, and it was not just to warn other rogue leaders with their fingers on various triggers. Part of the goal was to force a political solution that would remove Assad from power. That is, even though the Obama administration has been insisting that it is not interested in “regime change,” that disastrous cornerstone of the Bush era, it was, in fact, pursuing regime change, at least until Monday.


Absolutely played. Oh, sure, Obama can now climb down and pretend to have implemented a real solution by claiming his threat of a strike caused this. In fact, the threat of a strike is pretty much irrelevant right now.  We’re into interminable word wars now.  By taking this up, as TNR points out, Syria now has “all the time in the world” while Russia plays its part in international negotiations. Immune now from a military strike and no real threat that anything will happen of any significance to take control of their chemical weapons any time soon.

So Assad will pursue his strategy without any implicit or explicit attempt at regime change (or deterrence, or armed intervention or …) and, as it appears the regime is getting the upper hand in the civil war, work toward ending it. Then Russia can declare the control of Syria’s chemical weapons a moot point and veto everything in sight.


But it is all good in the White House – they think the president’s credibility has been saved by this charade.

Seriously … they do.

So it’s back to “leading from behind.”

As it stands now, Russia and France have taken the lead on working out a plan to get Assad to hand over his chemical weapons, a lead Obama seems all too happy to relinquish. Hammering out the details will take a some time, and, while they’re at it, Assad will still have his chemical weapons but will no longer be under the threat of a U.S. military strike. (Who knows if he’ll use them, but he certainly hasn’t let up on the conventional shelling.) Putin has succeeded in throwing sand in the gears of the American political process and separating the U.S. from its allies, and the current American handwringing over Syria seems likely to grind on for weeks. And a pro-Assad paper ran with the following headline this morning: “Moscow and Damascus Pull the Rug Out From Under the Feet of Obama.”


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Meanwhile in climate alarmist land, not such good news …

Nonetheless we’ll hear the usual suspects try to claim “scientific consensus” when the UN issues its next IPCC report.  But in reality:

The Northwest Passage from the Atlantic to the Pacific has remained blocked by pack-ice all year. More than 20 yachts that had planned to sail it have been left ice-bound and a cruise ship attempting the route was forced to turn back.

Some eminent scientists now believe the world is heading for a period of cooling that will not end until the middle of this century – a process that would expose computer forecasts of imminent catastrophic warming as dangerously misleading.

The disclosure comes 11 months after The Mail on Sunday triggered intense political and scientific debate by revealing that global warming has ‘paused’ since the beginning of 1997 – an event that the computer models used by climate experts failed to predict.

In March, this newspaper further revealed that temperatures are about to drop below the level that the models forecast with ‘90 per cent certainty’.
The pause – which has now been accepted as real by every major climate research centre – is important, because the models’ predictions of ever-increasing global temperatures have made many of the world’s economies divert billions of pounds into ‘green’ measures to counter climate change.

Those predictions now appear gravely flawed.

“Gravely flawed”? Boy, there’s an understatement. If you need a picture, this might help:

Oh, and speaking of predictions, don’t forget this one:

The rebound from 2012’s record low comes six years after the BBC reported that global warming would leave the Arctic ice-free in summer by 2013.

Uh, huh.


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Observations: The QandO Podcast for 8 Sep 13

This week, Bruce, Michael, and Dale discuss the Republican-led House’s decision to fully fund Obamacare, the economy, and the Obama Administration’s Syria-related stupidity.

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.

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Amateur hour in foreign affairs

What’s the saying? “It is better to remain silent and be thought a fool than to open your mouth and remove all doubt?

Living proof:

Iran is enduring economic sanctions designed to slow the country’s nuclear weapons program, but President Obama’s team thought the regime might abandon dictator Bashar Assad over his use of chemical weapons in Syria’s civil war.

Samantha Power, the U.S. Ambassador to the United Nations, hoped that a team of UN investigators — many of whom, presumably, have a longstanding relationship with Iranian leaders — could write a report that would convince Iran to abandon its ally at the behest of the United States.

“We worked with the UN to create a group of inspectors and then worked for more than six months to get them access to the country on the logic that perhaps the presence of an investigative team in the country might deter future attacks,” Power said at the Center for American Progress as she made the case for intervening in Syria.

“Or, if not, at a minimum, we thought perhaps a shared evidentiary base could convince Russia or Iran — itself a victim of Saddam Hussein’s monstrous chemical weapons attacks in 1987-1988 — to cast loose a regime that was gassing it’s people,” she said.

Good lord … how freakin’ naive and inept is this bunch, really?

Result of naive thinking?

Rather than “cast loose” Assad after the latest chemical weapons attack, as the Obama team hoped, “Iran’s supreme leader Ayatollah Khamenei has warned the Obama administration against any proposed military strike on Syria,” as the International Business Times reports.

Look, it’s fairly simple – if the US is “for” something, Iran is most likely going to be against it. It has been like that for decades. And, in Iran’s world, Iraq does not equal Syria. More importantly, no matter what Syria does, it isn’t the “Great Satan”. And nothing his bunch has done in 4 1/2 years has changed that calculation one bit.

Incompetence on a level not yet seen before.


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Economic Statistics for 06 Sep 13

The BLS reports that a sluggish 169,000 net new jobs were created in August, though unemployment rate fell -0.1% to 7.3%, as 312,000 people left the labor force. The labor force participation rate declined to 63.2%, the lowest since 1978. The average workweek rose a single tick to 34.5 hours, while average hourly earnings rose a nickel to $24.05. Using the average labor force participation rate prior to the 2009 recession, the real unemployment rate stands at 11.46%. There is nothing good in this report. The unemployment rate dropped only because a third of a million workers left the labor force. The rate of job creation is roughly 100,000 jobs less than the rate of creation we need just to keep up with population growth. The real rate of unemployment is essentially the same as it was all the way back to January of 2012, since we’ve been hovering within a tick or two of 11.5%. We have essentially gained no ground whatsoever in the labor market for 20 months.

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The obligatory “this ain’t libertarianism” post

My dad used to refuse to watch Hollywood’s version of war or life in the Army.  He said it was more of a cartoon than reality.  Of course Hollywood is famous for that, and nothing much has changed over the years.  My dad enjoyed documentaries about the military (I remember well, “Victory at Sea”) but he preferred real cartoons to Hollywood’s version.

I’m sort of that way with articles about libertarianism.  As you know, both sides of the establishment political spectrum are scared to death of real libertarianism.  And so they attempt to demonize it and make it “unpalatable” for the mass of the citizenry.  The usual procedure is to decide what they want to claim, define their version of “libertarianism” to support their claim and then using their false premise, attempt to logically prove their point.

The latest attempt is an article in Bloomberg entitled “Libertarians are the new Communists“.  Now as ridiculous as that sounds, the point of the article isn’t to say libertarians are the same as communists, i.e. pretty much share the same belief systems.  But that libertarianism suffers from fatal flaws that ignore human nature just as communism does.  And that’s where they try to establish their false premise, i.e.:

Like communism, this philosophy is defective in its misreading of human nature, misunderstanding of how societies work and utter failure to adapt to changing circumstances. Radical libertarianism assumes that humans are wired only to be selfish, when in fact cooperation is the height of human evolution. It assumes that societies are efficient mechanisms requiring no rules or enforcers, when, in fact, they are fragile ecosystems prone to collapse and easily overwhelmed by free-riders. And it is fanatically rigid in its insistence on a single solution to every problem: Roll back the state!

Wow, where to start.  Let’s start with “selfishness”.  Among non-libertarians this is the most misunderstood concept of them all.  What they try to do is make a simple and absolute part of human nature into something else again.  Libertarians do not believe that “humans are wired only to be selfish”.  What libertarians do believe is that we act in our own enlightened self-interest. That’s a no-brainer. Anyone who argues otherwise doesn’t know human nature. We all act in our own rational self-interest when we do things. And guess what? Sometimes it is in our own rational self-interest to cooperate with others! Oh my goodness. You mean libertarians believe in cooperation. Yes! As long as it is voluntary cooperation, not coerced.

Now, does that sound so horrible or something that is against human nature? Of course not. But to listen to the Hollywood version, well we’re all selfish SOBs.

Number two … no libertarian that I know actually believes that we shouldn’t cooperate to ensure that others rights aren’t violated or people aren’t coerced into doing things they don’t wish to do.  How that translates into a system with no rules or enforcers is beyond me.  The very fact that libertarians believe in individual rights (rules), are against coercion (rule) and would like to ensure those rights aren’t violated (rules/laws/enforcement) makes a dog’s breakfast out of that claim.  It’s nonsense.

By the way, before you get too far into this, let me point out that although in the title, the authors use the term “libertarians”, throughout the piece they pretend they’re talking about “radical libertarians”.  Their examples?

Some, such as the Koch brothers, are economic royalists who repackage trickle-down economics as “libertarian populism.” Some are followers of Texas Senator Ted Cruz, whose highest aspiration is to shut down government. Some resemble the anti-tax activist Grover Norquist, who has made a career out of trying to drown, stifle or strangle government.

Can you say “establishment hit piece”?

And that’s all this is.

Anyway to wrap it up, look at their final claim – Single solution to every problem is “roll back the state”.  Single solution?  Have these two bothered to look at the state of the state these days?  Are they insisting that rolling back the state is always a bad thing (see I can make unsupported assumptions about them too)?  Any prudent student of today’s state knows it has grown out of all proportion to its original design.  And, they also know it has become oppressive, intrusive and frankly arrogant in its power.  Anyone who isn’t screaming “roll back the state”, whatever their ideological affiliation, is a statist and no friend of liberty.

And that’s how I classify these two authors.  They’re establishment statists deathly afraid of the liberty those they try to demonize represent and willing to misrepresent libertarianism as anarcho-capitalism.  I’m sorry, but that’s not libertarianism, extreme or otherwise, and ask any self-respecting an-cap and they’ll be the first to agree.

So in essence, what we have in this article is an attempt at political demonization, by misrepresenting libertarianism and giving it the Hollywood war picture treatment.



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