Despite all the happy talk from the Fed about its ability to manage the money supply and wring the excess out of the economy at the proper time, avoiding inflation, when and if the economy ever takes off, is going to be a lot tougher than advertised. And we’re beginning to see rumblings that inflation is trying to find it’s footing:
Inflation at the wholesale level surged in November, reflecting price jumps in energy and other products.
The bigger-than-expected increase is certain to get the attention of Federal Reserve policymakers beginning a two-day meeting on interest rates.
The Fed has been able to keep interest rates at record-lows to bolster the shaky recovery, but if inflation pressures begin to mount, the central bank could be forced to start raising rates sooner than expected to cool the economy and keep prices in check.
That’s the trade-off: raise interest rates to hold off inflation. The tricky part is knowing how much to raise them to do that without killing the recovery. And, with the massive amounts of cash pumped into the system, I’m not sure that’s possible. Which means it is probable, at some point, that the Fed is simply going to have to make a choice – inflation or high recovery killing interest rates. My guess is they’ll choose the latter (while the politicians holler foul and try to spend more money). That’s why many don’t see economic recovery in the cards any time soon despite the “green shoots” so many politicians continue to spot among the economic ruin of the present economy.
I‘m sure this will come as a surprise to someone out there – like our State Department and perhaps the CIA:
Confidential intelligence documents obtained by The Times show that Iran is working on testing a key final component of a nuclear bomb.
The notes, from Iran’s most sensitive military nuclear project, describe a four-year plan to test a neutron initiator, the component of a nuclear bomb that triggers an explosion. Foreign intelligence agencies date them to early 2007, four years after Iran was thought to have suspended its weapons programme.
Yup, four years after the world bought off on the claim by Iran that it hadn’t been doing anything in the nuclear weapons area. “It’s for peaceful purposes”? In the future schools of foreign policy will use this particular situation as a case study in how a small state manipulates the most powerful nations of the world at will.
“Although Iran might claim that this work is for civil purposes, there is no civil application,” said David Albright, a physicist and president of the Institute for Science and International Security in Washington, which has analysed hundreds of pages of documents related to the Iranian programme. “This is a very strong indicator of weapons work.”
A “strong indicator?!” It is weapons work, Mr. Albright! Why are these people so loathe to say that?
A Foreign and Commonwealth Office spokeswoman said yesterday: “We do not comment on intelligence, but our concerns about Iran’s nuclear programme are clear. Obviously this document, if authentic, raises serious questions about Iran’s intentions.”
No. It doesn’t. It answers questions about Iran’s intentions! For goodness sake, the dance continues, doesn’t it?
You remember the NIA that was produced in 2007?
A 2007 US National Intelligence Estimate concluded that weapons work was suspended in 2003 and officials said with “moderate confidence” that it had not resumed by mid-2007. Britain, Germany and France, however, believe that weapons work had already resumed by then.
And it appears they were correct. So now what?
The fallout could be explosive, especially in Washington, where it is likely to invite questions about President Obama’s groundbreaking outreach to Iran. The papers provide the first evidence which suggests that Iran has pursued weapons studies after 2003 and may actively be doing so today — if the four-year plan continued as envisaged.
It shouldn’t just invite questions about Obama’s Iran agenda – the whole world continues to be played for a sucker by Iran. But it is ironic that this president who has made nuclear non-proliferation a priority of his administration is all but allowing Iran to develop them.
Is this a casus belli as one expert claims? Or will we see more diplomatic ring-around-the-rosy with tough talk and the usual non-action?
Given the history, I think that about covers it, don’t you? I wonder what the over/under in months is before Iran is welcomed into the nuclear weapons club?
You know, sometimes I think Joe Lieberman does this sort of stuff just to remind his Democratic Senate colleagues about the fact that they deserted him during his last run for office in favor of Ned Lamont.
In a surprise setback for Democratic leaders, Senator Joseph I. Lieberman, independent of Connecticut, said on Sunday that he would vote against the health care legislation in its current form.
Of course it would be nice to know what that “current form” is, but Harry Reid and the Democrats are keeping that a secret. However, details have leaked out, and, additionally, Lieberman pretty well laid out his objections:
“You’ve got to take out the Medicare buy-in,” Mr. Lieberman said. “You’ve got to forget about the public option. You probably have to take out the Class Act, which was a whole new entitlement program that will, in future years, put us further into deficit.”
Class Act refers to a federal insurance program for long-term care, known as the Community Living Assistance Services and Supports Act.
Mr. Lieberman said he would have “a hard time” voting for a bill with the Medicare buy-in.
Of course, the removal of those three items guts the Reid compromise and it also would move the Senate version of reform further and further away from the House bill, making the ability to reconcile the two, assuming the Senate passes something, much harder.
Lieberman isn’t the only Democrat not happy with the plan. Sen Ben Nelson, an abortion foe, has reservations about the abortion provisions and is not at all a fan of the Medicare buy-in either:
Mr. Nelson said he wanted to know the cost of the Medicare buy-in. “I am concerned that it’s the forerunner of single payer, the ultimate single-payer plan, maybe even more directly than the public option,” he said.
Of course he’s absolutely correct – such a buy-in would indeed be the forerunner of a single payer system. And a single-payer system is the worst thing that could happen to this country when it comes to health care. It certainly won’t “improve it” or drive down cost (as Medicare’s unfunded trillions in future liabilities shows).
This leaves Reid with few choices, thankfully. Of course Lieberman offers his own bit of advice:
“We’ve got to stop adding to the bill. We’ve got to start subtracting some controversial things. I think the only way to get this done before Christmas is to bring in some Republicans who are open-minded on this, like Olympia Snowe.”
Senator Snowe, of Maine, has tried to find common ground with Democrats, but has rejected Mr. Reid’s proposal to let uninsured people 55 to 64 years old purchase coverage under Medicare.
Assuming Senate Democrats could put something together that would satisfy Snowe (whatever that would take would most likely also satisfy Lieberman), she would be the 60th vote (unless they were also able to satisfy Nelson, in which case she’d be 61) and make it “bi-partisan”.
Funny how Snowe is touted as “open-minded” by Lieberman when it comes to supporting and enabling a huge government takeover of a large chunk of the private sector economy. That’s a reminder to those on the right to look at Lieberman as some sort of hero that at heart he really is a liberal with a love for big government. He just wants to use this opportunity to get his version of “big government” in place, not someone else’s.
That said, I really hope he can stall this (or, hope of hopes, kill it completely) until well into the new year. The closer it gets to the 2010 election with some polls showing upwards of 60% of Americans against this legislation, the less likely we are to see it passed.
In a previous post, I talked about Dr. Judith Curry from Georgia Tech. She believes that there is a case for human caused global warming. But, as I noted, she doesn’t think there’s a case for shoddy science and believes that CRU emails show serious problems are likely with the data produced there.
Roger Pielke, Professor of Environmental Studies at the University of Colorado, could in no sense be described as a climate change sceptic, let alone a ‘denier’.
‘Human-caused climate change is real, and I’m a strong advocate for action,’ he said. ‘But I’m also a strong advocate for integrity in science.’
Pielke’s verdict on the scandal is damning.
‘These emails open up the possibility that big scientific questions we’ve regarded as settled may need another look.
‘They reveal that some of these scientists saw themselves not as neutral investigators but as warriors engaged in battle with the so-called sceptics.
‘They have lost a lot of credibility and as far as their being leading spokespeople on this issue of huge public importance, there is no going back.’
Or to those trying to wave away the scandal and pretend this isn’t “any big deal” it is you who are in denial now. As you can tell, ethical scientists disagree completely.
The quote is from a must-read article in the UK’s Daily Mail in which we’re shown why, via some blowups of the CRU’s data, one way inconvenient data was omitted (literally – it wasn’t graphed because it showed a marked cooling trend rather than a warming trend – so they left it out).
Also found in the article was this little nugget:
Critics such as McIntyre had been ‘after the CRU station data for years. If they ever hear there is a Freedom of Information Act now in the UK, I think I’ll delete the file rather than send to anyone’.
Yesterday Davies said that, contrary to some reports, none of this data has in fact been deleted. But in the wake of the scandal, its reliability too is up for grabs.
Really? So where is it and why hasn’t it been produced by now?
Russian secret service agents admitted yesterday that the hacked ‘Warmergate’ emails were uploaded on a Siberian internet server, but strenuously denied a clandestine state-sponsored operation to wreck the Copenhagen summit.
Read the whole article – there is some excellent info in there and some more detailed analysis of the CRU emails.
The myth is that without government regulation, the market would certainly do everything it could do to kill or cheat its customers. Of course most of us realize that doing those things is a sure way not to be in business long. But for a significant number of others, that myth is alive an well. A recent example, however, provides a perfect example of the absurdity of that notion. And, I suggest that it should be applied to health care as well.
The U.S. Department of Agriculture says the meat it buys for the National School Lunch Program “meets or exceeds standards in commercial products.”
In the past three years, the government has provided the nation’s schools with millions of pounds of beef and chicken that wouldn’t meet the quality or safety standards of many fast-food restaurants, from Jack in the Box and other burger places to chicken chains such as KFC, a USA TODAY investigation found.
McDonald’s, Burger King and Costco, for instance, are far more rigorous in checking for bacteria and dangerous pathogens. They test the ground beef they buy five to 10 times more often than the USDA tests beef made for schools during a typical production day.
And the limits Jack in the Box and other big retailers set for certain bacteria in their burgers are up to 10 times more stringent than what the USDA sets for school beef.
So the burger at Jack in the Box is safer than the mystery meat your child is served at school. Children are served tons of chicken in school each year that KFC won’t touch (KFC doesn’t do “spent hens” but your child does).
Jack in the Box and KFC have to please and answer to customer demands if they want to stay in business. If KFC makes you sick because of bacteria, you and others will most likely vote with your feet and go elsewhere. What is your choice if that happens in a government school?
Now, think health care.
End of story.
Not content with fiscally enslaving your children, Congress plans on doing the same to your grandchildren:
In a bold but risky year-end strategy, Democrats are preparing to raise the federal debt ceiling by as much as $1.8 trillion before New Year’s rather than have to face the issue again prior to the 2010 elections.
“We’ve incurred this debt. We have to pay our bills,” House Majority Leader Steny Hoyer told POLITICO Wednesday. And the Maryland Democrat confirmed that the anticipated increase could be as high as $1.8 trillion — nearly twice what had been assumed in last spring’s budget resolution for the 2010 fiscal year.
The leadership is betting that it’s better for the party to take its lumps now rather than risk further votes over the coming year. But the enormity of the number could create its own dynamic, much as another debt ceiling fight in 1985 gave rise to the Gramm-Rudman deficit reduction act mandating across-the-board spending cuts nearly 25 years ago.
You have to love the lead sentence: “In bold but risky year-end strategy …”. “Bold”? It’s more like feeding an addiction. And it’s hardly “bold” in another sense. They’re going to hide it in a defense appropriation bill:
“This is a defining moment,” said Senate Budget Committee Chairman Kent Conrad (D-N.D.), one of the lead sponsors, and New Hampshire Sen. Judd Gregg, the panel’s ranking Republican, is already maneuvering to try to add the legislation as an amendment to any bill tapped to carry the debt increase.
As explained by Hoyer and other Democrats, that will almost certainly be a pending $636.4 billion Pentagon appropriations bill that includes $128.3 in contingency funds for military operations in Iraq and Afghanistan.
That’s not “bold”, that’s cowardly. But what it buys Democrats is cover. Adding it (and hiding it) in a defense appropriations bill guarantees “bi-partisan” passage or contingency funds for our two wars won’t become law. But the fact remains this is an old tried and true tactic of both sides in Congress.
Somehow spending like this needs to see the requirement to stand alone imposed on it. Make them do this sort out in the open and in the sunlight. Make them pass any debt increases where everyone can see it – and judge it on election day.
And it was once considered “service” – now, the federal government, using your tax dollars, is increasing top salaries to government workers:
The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.
Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.
Bonuses? For what – trillion dollar deficits? Broken procurement systems? Aren’t those the arguments we heard used to deny Wall Street their bonuses? Well, in terms of waste, fraud and abuse Wall Street can’t touch the fed. But we’re paying bonuses and 6 figure salaries?
The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.
When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.
The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.
The problem? The law of unintended consequences coupled with stupid pay rules and the left hand not knowing what the right hand was doing all combined to see unseemly pay raises the rule in the midst of 7.3 million job losses – a true, “do as I say not as I do” moment. That’s right – it’s up the the rest of you to “sacrifice” – not the fed.
It would appear the “Gang of 10 (Senators)” compromise bill which Harry Reid has been touting but refusing to give details about would bend the cost curve way up:
Senate Democrats have provided few details about their latest health care proposal, but this much seems clear: Anyone who wants to buy the same health benefits as members of Congress, or to buy coverage through Medicare, should be prepared to fork over a large chunk of cash.
According to the Congressional Budget Office, a family of four earning $54,000 in 2016, when the health legislation is fully in effect, would be eligible for a subsidy of $10,100 to help defray the cost of insurance under the health legislation being debated by the Senate. By then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000.
That could leave the family earning $54,000, slightly more than the current median household income, with monthly premium costs of more than $825.
The Democrats’ proposal would also allow some people ages 55 to 64 to “buy in” to Medicare, starting in 2011. That could cost about $7,600 a year per person or $15,200 for a couple, according to a budget office analysis of an earlier version of the concept. No subsidies would be available until 2014.
So why are many Democrats so “enthusiastic” over the proposal. Well, let’s knock off all the spin and be blunt about it:
“Extending this successful program to those between 55 and 64 would be the largest expansion of Medicare in 44 years and would perhaps get us on the path to a single-payer model,” said Representative Anthony Weiner, Democrat of New York.
That is the name of the game here and don’t ever loose sight of that. Liberals want a government run single-payer system. And whether they get there via a “public option” or expanding Medicare doesn’t matter one whit to them.
Whatever your feelings on abortion, this isn’t representative of what is being considered:
The city of Berkeley made an official statement on abortion Wednesday by sending coat hangers — a symbol of illegal abortions — to 20 Democrats in the U.S. House of Representatives who voted to restrict federal funding for abortions in the health care bill.
Councilmember Kriss Worthington, who co-sponsored the item before the City Council on Tuesday night with Susan Wengraf and Linda Maio, put the coat hangers and an official city letter in the mail Wednesday.
“The coat hanger represents the time when women had to have abortions in back alleys and tried to self-abort,” Wengraf said. “My initial take was this is too extreme. But women’s reproductive health is very important to me.
“I don’t want my granddaughter to go through what my grandmothers had to. I don’t want it compromised. I don’t think the health care bill is reform if it excludes access to women’s reproductive health care.”
It does not “exclude” access to “women’s reproductive health care”, today’s euphemism for abortion. Abortion remains legal and accessible. It simply denies payment at a federal level for the procedure, much like coverage for cosmetic coverage is denied. Does the denial of the latter somehow “exclude” access to cosmetic surgeons and make that procedure a “back alley” procedure? No, you simply buy a private bit of insurance or, *gasp*, pay for the procedure out of pocket. But both remain completely legal and completely available. Neither, however, should be subsidized by taxpayers (along with many other things).
“I think the coat hanger is an inappropriate symbol, and it could backfire on us,” Wozniak said.
Indeed, it’s not only inappropriate, but it demonstrates a fundamental misunderstanding of the proposal which makes the coat-hanger group look foolish. But then consider what group is doing this (the city that banned the military) and it isn’t at all surprising they look foolish.