Questions and Observations

Free Markets, Free People

And now for something completely different

Looking for the perfect gift for the beer drinking PETA member you know. Not to worry, Scotland’s BrewDog brewery has just the gift.

Well, not this year as they’ve already sold out of the 12 bottles they made. And it’s a healthy brew – an ale they call "The End of History" – a little Francis Fukuyama joke.

At 55% alcohol and $765 it isn’t cheap nor is it for the faint of heart. As the company says, it should be treated “more like a whiskey” than a beer.

As for what would appeal to the PETA member?

Well, the recycling of roadkill as a cover for the bottle, of course.

100723-brewdog-beer-hmed-140a.grid-6x2

~McQ

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"Legal nullification" likely AZ immigration law case outcome

William Jacobson over at Le-gal In-sur-rec-tion (a great blog and always a worthwhile read) lays out the probable outcome of the DoJ case against the AZ immigration law:

Based on reports of the hearing before the federal District Court Judge yesterday, it appears that the provision of the Arizona immigration law requiring law enforcement to verify immigration status is likely to survive, while other aspects creating independent state criminal sanctions will not.

This outcome — with the caveat that a Judge’s comments do not necessarily predict the outcome — makes sense legally. There is no interference with the federal administration of the immigration laws if the state, after confirming that a person is here illegally, merely turns the person over to federal authorities.

That means, essentially that the part of the law that will survive is that which requires all law enforcement to check the immigration status of anyone of which have a reasonable suspicion may be here illegally.  And if they’re determined to be here illegally, turn them over to federal authorities.

And that’s where the probable “nullification” may take place –i.e. the nullification of the intent of the AZ law which had at its foundation the apprehension, removal and deportation of illegals found in the state.  As Jacobson says:

While the survival of this aspect of the Arizona immigration law would still outrage opponents, the practical effect would be to allow federal authorities to nullify the state law in practice by refusing to take custody of or prosecute those turned over by state authorities.

Indeed, this is what happens sometimes in Rhode Island, when the State Police notify federal authorities and there are no outstanding warrants on the person.

Willful disregard for the law. 

Isn’t one of the foundational principles of our nation “the rule of law” and not the “rule of men”?  Isn’t such willful disregard counter to that principle?  How does one count on being equal with all other men before the law when the government can arbitrarily decide what it will and won’t enforce?

All questions I’d like to see asked in court of the Department of Justice.  Put them on trial as well.  Make them explain why they feel entitled to ignore some law and rigorously enforce others.

If we don’t like a law, think it is wrong and should be taken off the books, there are several methods on the books to allow that – the courts or Congress (at a federal level) to name two.  But selective non-enforcement – at least in a country that purports to be governed by the “rule of law” – isn’t one of them.  And it drives states, such as AZ, to understandably take matters into their own hands.

It is the DoJ and ICE that should be in the docket – not AZ.

~McQ

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Bureaucracy and bureaucratese – no sign of common sense

This story out of Ann Arbor, MI is a perfect example of bureaucratic inertia and the use of bureaucratic language to evade a common sense solution to a changed situation:

The debate in Ann Arbor, where firefighters are being laid off due to a multimillion dollar budget deficit, is over an $850,000 piece of art.

That’s how much the city has agreed to pay German artist Herbert Dreiseitl for a three-piece water sculpture that would go in front of the new police and courts building right by the City Hall.

The city has the money to do it because in 2007, it agreed to set aside for public art 1 percent of money that went into capital improvement projects that were $100,000 or larger. Most capital projects involve streets, sewers and water.

Anyone – what has changes since 2007?  Perhaps the economic climate?  So if a city can agree to “set aside” money for public art – a luxury for economically flush time – why can’t it now agree to change that previous agreement?  Why can’t it now spend the money set aside on critical jobs jeopardized by the economic downturn?

Well here’s the city administrators answer, I guess:

City Administrator Roger Fraser wrote in an e-mail that the solid waste coordinator position was eliminated as a cost-cutting measure because the solid waste millage had decreased. Fraser wrote that the art coordinator position would be paid for by the public art fund.

Fraser noted that the public art dollars did not come from the city’s general fund, which is used to pay salaries and benefits, and that less than $6,000 of the art money came from the general fund.

The art projects also must have a "thematic connection" to the source of funding, Fraser wrote. The $850,000 art project is water-themed, because the money came from storm water funds.

So there.  If that isn’t a pant load of, well you know what it is.   As one resident noted, when it wants too the city has always found ways to shuffle money from one fund to another.   But if it did that, it couldn’t scare the hell out of the citizenry claiming it was going to have to lay off critical public safety types and therefore justify increasing taxes, etc.

"Administrators cry poverty while lavishing money on the beautiful people," LaFaive said. "The threat to dismiss firefighters often comes while officials protect golf courses, wave pools and art. No city can cry poverty while it defends recreation and aesthetics such as art."

Have you ever noticed that?  Layer upon layer of bureaucrats and non-essential workers stay on staff, but police and fire protection are the first on the block.  Meanwhile almost a million bucks is slated for “water art”.  And it is all defended by bureaucratic nonsense – bureaucratese.  When they want to do something, the rules mean nada.  When they don’t want to for whatever reason, the rules constrain them.

And Ann Arbor isn’t unique here – the same song and dance is going on at the state and local level.

This is your government at work.  The politicians are only the part-time help.  Bureaucrats are who really run it all.  And the the result?

Well, look around you.

~McQ

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The usual hypocrisy

Apparently the “pay czar” is about to release a report that the Wall Street bonuses, paid by financial firms that had received bailout money, were largely “unmerited”.

With the financial system on the verge of collapse in late 2008, a group of troubled banks doled out more than $2 billion in bonuses and other payments to their highest earners. Now, the federal authority on banker pay says that nearly 80 percent of that sum was unmerited.

In a report to be released on Friday, Kenneth R. Feinberg, the Obama administration’s special master for executive compensation, is expected to name 17 financial companies that made questionable payouts totaling $1.58 billion immediately after accepting billions of dollars of taxpayer aid, according to two government officials with knowledge of his findings who requested anonymity because of the sensitivity of the report.

Of course, that is Mr. Feinberg’s opinion.  However I don’t know his opinion about this, reported in March of this year:

Fannie Mae is due to pay retention bonuses of between $470,000 and $611,000 this year to some executives, despite enormous losses at the government-backed mortgage company. Fannie’s main rival, Freddie Mac, also plans to pay such bonuses but hasn’t yet provided details.

I know what my opinion is, but of course our government won’t talk about these two entities – both of which had a key, if not major role in the financial collapse.  You see, if they investigated this with an eye toward actually figuring out how that collapse transpired, it would inevitably lead back to those two institutions and the Community Reinvestment Act. And that would lead to calls for “accountability”, a standard to which only generals and the “little people” are held. With government and politician’s popularity rating already below that of used car salesmen, they’d prefer to pretend it all happened on Wall Street.

Not that anyone should be particularly surprised by that.

~McQ

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Dale’s Observations For 2010-07-22

Scotland to Senate Lockerbie inquiry: Drop dead. http://bit.ly/aBcWUZ #

Bernanke Says Extending Bush Tax Cuts Would Maintain Stimulus. http://bit.ly/cQX3uR #

Huh. They never mentioned this possibility in the whale watching tour brochure. http://bit.ly/bWGfwh #

For those who are interested, I do a lot of writing about motorcycling. I have interests outside of politics/economics. http://bit.ly/cHshw7 #

With the unemployment benefits, we will have spent more on stimulus than on the Iraq and Afghanistan wars combined. http://bit.ly/c8ENR7 #

The index of U.S. leading indicators
fell 0.2 percent in June, the second decline in three months. http://bit.ly/cvA0zs #RecoverySummer #

Existing home sales fell–yes, unexpectedly–by 5.1% in June. http://bit.ly/be4klY #RecoverySummer #

Initial unemployment claims rose unexpectedly-we really need to talk about these expectations-to 464k. http://bit.ly/bnF6LE #RecoverySummer #

This journolist stuff is fabulous. I guess EVERYBODY gets all tough and manly on message boards. #

Eric Alterman, author of "What Liberal Media?": "Let’s just throw Ledeen…through a plate glass window." Thanks, @ezraklein! #

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It’s official – cap-and-trade is dead … for now

The Senate just pulled the plug on including cap-and-trade, even on a limited basis (only utilities). Any energy bill will be a scaled back version not including climate change legislation.

Senate Democrats pulled the plug on climate legislation Thursday, pushing the issue off into an uncertain future ahead of midterm elections where President Barack Obama’s party is girding for a drubbing.

Rather than a long-awaited measure capping greenhouse gases — or even a more limited bill directed only at electric utilities — Senate Majority Leader Harry Reid (D-Nev.) will move forward next week on a bipartisan energy-only bill that responds to the Gulf of Mexico oil spill and contains other more popular energy items.

And, if the “drubbing” comes through – as it should – the possibility of that window opening again any time soon is poor.

But that doesn’t mean the Dems won’t at some point attempt it again – whether supported by the people or science.

I mean, look how many times they took a run at health care.

~McQ

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Dumb idea of the day – Reintroduce the public option to lower deficit

Yes, that’s what 128 Democrats in the House are sure will be the way to lower the deficit in coming years:

As both political parties worry about the growing federal deficit, an unlikely proposal is returning from last year’s divisive healthcare debate: the "public option."

Creating a major government health insurance program was roundly rejected last year, but 128 House Democrats are pushing to reconsider the idea, contending that it would hold down federal spending.

Anyone – what are Medicare and Medicaid? Well, yes, you’re right, they’re "government health insurance programs". And how solvent are they? Well, you’re right again – they’re not. Both have unpaid future liabilities in the tens of trillions of dollars.

So explain to me how, after these two "government health insurance programs" have been mismanaged to the point of impossible future liabilities, giving the government the rest of the population will, as CBO claims "save the government $68 billion between 2014 and 2020.

Yeah, see, I’m not on board with this idea at all – seems to me to be more smoke and mirrors. I’d love to the reasoning behind the CBO’s findings. Oh, wait, how about this:

The government’s administrative costs would be lower than private insurers’, proponents say, and it could pay hospitals and doctors less.

No, their admin costs are not "lower" and that’s been pointed out ad naseum for quite some time. They just passed the "doc fix" and there is no stomach (or spine) to cut doctor’s pay in the Congress and they risk all sorts of problems if they cut pay to hospitals.

So yes, I’m right – smoke and mirrors.

Let’s see how they play this hand of vapor as Democrats try again – before the window closes for good – to move us another step closer to single payer with nothing more than hot air promises as a basis for their arguments.

~McQ

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Another “Great Depression” or just a very slow recovery?

Of course you an find “experts” who will point to each and say that’s our future.   USA Today has a list of them in an article which explores the title question.  It appears most believe it will be the latter – a slow recovery.  But some are worried about signs that the present situation compares very closely with the 1930s.

And, in many ways it does.   We continue to see weakness everywhere.  And it appears until we get the housing market squared away (housing starts down 5% this month) and some other areas cleaned up, plus get some hiring going on, it is going to continue to be rough out there.

Jobs continue to be key to the recovery (we are a consumer driven economy – no job, no money.  No money, no consumption) so the faster we can employ the jobless, the faster we see the recovery take off.  However, that’s a huge undertaking:

The national unemployment rate stands at 9.5%, or more than 14 million Americans, says the Department of Labor, far below the peak unemployment rate of 25% during the Great Depression. But those numbers don’t fully convey the jobs weakness. Another 8.6 million people are working part time because they can’t get full-time jobs. And 3.8 million, discouraged by the dearth of job opportunities, are out of work but were not counted as unemployed.

So while not at 25%, we’re most likely somewhere in the 14% range in real terms (not the politically motivated U3 of 9.5%). 

"If you’re not making money, it’s pretty hard to spend it," or pay bills, Johnson says. "There’s no fuel in the economic engine to make it grow. People are spending less and saving more."

This, of course, is where the impetus comes from to claim if the people can’t spend, the government should.  We’ve seen, first hand, how that’s worked out – unemployment went up and stayed up.  And “more” wouldn’t have made any difference as is now being argued.

The answer isn’t government spending – not in a consumer driven economy.  No, the way you help solve this problem, if you’re government, is to incentivize business expansion and thereby hiring to drive consumer spending.  Instead, the policies of this administration, at least to this point, have businesses on the sidelines sitting on both their hands and their money.

Further crimping the outlook for future growth is the fact that cash-rich U.S. companies, despite improving profitability, are still leery of the recovery and are reluctant to deploy that money to grow or hire new workers.

"Companies have pared their expenses dramatically, upgraded their technology, improved their profit margins," Johnson says. "But they are not hiring more people, because they would have to see greater demand to do so."

Once again, the government can’t create that “greater demand” via “stimulus”.  That demand has to come from consumers.  Those are the customers businesses rely on to generate demand, and with about 14% in the unemployment/underemployment mix, that demand simply isn’t there – or, at least, not enough to expand and hire.

Catch 22?  In a way.  So what can government do? 

Cut business taxes.  Get out of the way.  Provide incentives to expand and hire (accelerate capital equipment depreciation for instance, if bought now).

There are lots of ways short of spending us into oblivion that the government can positively effect the market and the business climate.  Unfortunately, as Mort Zuckerman has stated and the business community as a whole believe, we have an “anti-business” administration in charge right now – and that further unsettles the situation.  Perception being reality, as long as the business community believe that, not much is going to change.

So, there’s your day’s sunny outlook on the economic front.  As Donald Luskin says:

"The only way to get out of debt is to earn money," Luskin says. "The only way to get out of recession is to grow. If you kill growth, you are" in trouble.

And right now, we’re in trouble.

~McQ

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Doing the Netflix thing

Not the usual fare for this blog, but what they heck.  I recently signed up for Netflix.  Having a PS3 – yes an old geezer like me likes gaming and the fact that it is a Blue Ray player – I can do instant selection and streaming via my PS3 or on my laptop.

I believe the price is $8.99 a month (they have various plans) for a “single disc”, but unlimited watching.  They have a lot of content that I haven’t seen available via that method – especially TV shows sans commercials.  Some I’ve seen, some I haven’t and some I’m enjoying viewing again (for instance all the Firefly episodes – why didn’t that series stick?).

Noticed this today from the Netflix CEO:

In terms of streaming content, we are rapidly expanding our TV shows available for streaming and since our last call we have added thousands of TV episodes from new deals with Fox, MTV Networks and Warner Television. These shows include all seasons of “24,” “Futurama,” “Lie To Me,” “The Chapelle Show,” “Nip/Tuck” and “Veronica Mars,” and in a few weeks all seasons of “The Family Guy” will be available to stream as well. We see TV shows as equally important to our franchise as movies.

And, there’s more:

As we evolve from DVD by mail into streaming, the role of exclusive content changes….At this point we can start to afford some major TV shows and movies on an exclusive basis, and plan going forward on a mix of more-expensive exclusive content and lower-cost non-exclusive content. Our willingness to license some higher-priced exclusive content will open up new licensing opportunities for us…[we] are looking for more exclusive deals, especially on TV shows, as well as non-exclusive content.

So with the percentage of their customers using the streaming media option, its just going to get better.

I just dropped HBO, Showtime and Starz (saving a lot of money) from Direct TV.  I no longer have to look at their listings and then record what I want to watch.  Now I just browse the Netflix selections and watch what I want.  If you’re a PS3 owner they send you a “streaming disc” you have to use to watch on your TV (not necessary for your laptop).  The interface works quite well.   Yup, for $8.99 per month, a very satisfied customer.

All right – back to the dismal world of politics.

~McQ

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