Date ►►► September 25, 2013
Obamunism = Drowning In Debt
Peter J. Tanous presents a grim and grisly future of staggering debt due to the Federal Reserve's "quantitative easing" (QE) -- which itself appears to stem from a bad misreading of John Maynard Keynes. (Is there a good reading of Keynes?)
(I'm certainly no expert on Keynesianism; I never even made it to the 50-page mark in any of its creator's books. But I've read Keynesian analyses -- written by true-believer Keynesians -- that say JMK himself only advocated flooding the market with money when the country being flooded had a very, very small debt-to-GDP ratio... and definitely not when it was already deeply underwater. If any Keynesian expert wants to correct me, please feel free to do so in the comments!)
Under QE, as the Wikipedia article indicates,
The central bank may enact quantitative easing by purchasing a predetermined quantity of bonds or other assets from financial institutions without reference to the interest rate. The goal of this policy is to increase the money supply rather than to decrease the interest rate, which cannot be decreased further.
The last sentence of this paragraph offers a dire warning:
This is often considered a last resort to stimulate the economy.
I wonder whether this mindset, that the government must "stimulate" the economy, is actually the root cause of the fiscal and economic problem in the first place. Perhaps we should consider being more hands-off, helping the "deserving poor" hit by unmanageable financial collapse, and letting Capitalism right the ship in its own time. But be that as it may, that's not the system we have nor likely to have in the near future. So let's return to what is actually happening and the dire consequences quantitiative easing may produce.
The article identifies several risks of QE that can severely damage the American economy:
- The intended result of QE is to flood the economy with cheap money; but another word for "cheap money" is "inflation."
- Because interest rates have dropped precipitously, interest on pensions and savings may not stay ahead of said inflation, leading to a continuing loss of retirement income for ordinary people.
- "The new money could be used by the banks to invest in emerging markets, commodity-based economies, commodities themselves, and non-local opportunities rather than to lend to local businesses that are having difficulty getting loans." We see this today, with stock prices soaring even as wages are stagnant or dropping, employers are cutting hours to push more of their employees into "part time" status, and startups that could have filled the job gaps are depressed because of the lack of lending to new businesses.
The recipients of the extra cash under QE tend to be banks, companies that already have ready access to large lines of credit, and homeowners who already have mortgages; consider how many of us have taken advantage of the low interest rates to reduce payments on our existing home mortgages. The article notes, "Economist Anthony Randazzo of the Reason Foundation wrote that QE 'is fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy. It is a primary driver of income inequality'."
Massive income inequality typically leads to social dislocation, a two-tiered economy, the loss of belief in opportunity for upward mobility, and ultimately, to more reliance on government handouts -- thus leading to a more big-government paternalism and a citizenry leaning more towards socialism and welfare.
But Tanous notes an even nastier consequenece of QE... one which, rather than being unintentional, might actually be the "hidden agenda" of the Fed's policy of flooding the economy with cheap dollars. From the CNBC piece:
Let me start with a question: How would you feel if you knew that almost all of the money you pay in personal income tax went to pay just one bill, the interest on the debt? Chances are, you and millions of Americans would find that completely unacceptable and indeed they should.
But that is where we may be heading.
That eventuality may be shocking, but it would not be difficult to achieve. QE has driven down interest rates on federal debt to 2.4%; as we have about $12 trillion of such debt, we're paying about $288 billion every year just to service that debt... that is, to pay the interest; we are not, of course, reducing that debt. In fact, it's still increasing and is expected to rise by 2020 to the princely sum of $16.6 trillion.
But the chief danger of QE is that it cannot continue indefinitely, because, as Friend Lee has said, government can set the price but not the cost of goods and services. An excess of money (which is what is meant by quantitative easing, e.g. cheap money, e.g. electronic counterfeiting) cannot be forever suspended overhead. Sooner or later, it must come crashing down.
And when it does, among other dread problems, interest rates will rise again. Obamunists hope that the crash will hold off until a Republican sits in la Casa Blanca, so they can blame the resulting financial carnage (from their own stupid policies) on that luckless bag-holder... just as Democrats tried to blame the 9/11 attacks on George W. Bush.
So how high might interest rates rise? Tanous says that the average interest rate for U.S. debt over the last two decades is actually 5.7%. If interest rates were only to return to the average, then instead of $288 billion per year in interest, we would be paying $684 billion.
But in the meantime, more debt will accumulate up to that $16.6 trillion level by 2020. Thus not only the interest but the principal would rise... and we would actually be paying $946 billion in debt service alone. (Tanous says $930 billion; I'm not sure why the discrepency, perhaps a rounding error.)
In 2012, the entire amount of personal income tax collected by the IRS was $1.1 trillion. Assuming QE doesn't lead to a great economic leap forward -- not even the Feds predict that! -- Americans would soon realize that 85% of their income taxes (or 86%, if you use the $946 billion number) went to nothing but paying interest on the bloated national debt.
Tanous drolly suggests that --
[I]f Americans find out that the lion's share of their income tax payments are going to service the debt, prepare for a new American revolution.
I think that's an understatement. But the scariest uncertainty is whether that revolution will target the real culprits -- the Obamunists, going all the way back to the Progressivist cadres who captured the 2006 election, the ones who broke the economy in the first place... or whether voters will simply (and simplistically) blame whoever is president at the moment -- likely a fiscally conservative Republican trying his best to clean up the awful mess the Left left behind.
If I wasn't utterly convinced of the essential incompetence of the administration and its lickspittels in Congress, of their inability to think beyond a two-year window, I might believe this was a deliberate conspiracy to destroy the American economy, ushering in a new New Deal era of socialism, tyranny, and totalitarianism. The only thing missing would be another "world war" to warp patriotism into slavish devotion to a cult of personality, an American Hugo Chavez.
Fortunately, there is nobody on the Progressivist horizon with enough charisma to fill that role; at worst, we might end up with a Teddy Roosevelt-like, big-government Republican... a Chris Christie, for example. And as bad as Christie might be, he would still be more interested in preserving the Union than "transforming" it.
The Secret Weapon of AntiProgressivists...
...Is of course risible, regressive "Progressivism" itself! Whenever, through false advertising or a memory lapse within the American electorate, these proglodytes seize control of a city, state, or the entire country, they can never restrain themselves from going whole-hog and trying to overturn everything that works and replace it with its perverse inversion.
As we see anent ObamaCare -- which is not the subject of this post.
Here are a few examples recently in the news:
- California state legislature sends gun-prohibition bills to Governor Jerry Brown; one bill will ban all hunting with lead bullets (steel jacketed bullets are already banned for hunting here). Another will ban all semi-automatic guns that take detatchable magazines -- which seems to me to encompass everything but bolt-action rifles, shotguns, and revolvers.
(It's possible the bill restricts its effects to long guns, but that's not how it was presented.)
So what's the next step? All guns shall be single-shot, muzzle loading, un-rifled blunderbusses. Nobody needs more than that to kill a bunny rabbit!
The felony offense of self defense. 'Nuff said.
Allan Brauer, "Communications" chairman of the Sacramento Democratic Party, tweets to Amanda Carpenter -- an aide to Sen. Ted Cruz (R-TX, not yet rated) -- "May your children all die from debilitating, painful and incurable diseases." When the vasty fertilizer hits the propeller, Brauer offers the traditional, half-vast, liberal-Progressivist apology: "I am truly sorry for my tweet. I was very upset and lashed out. Your kids are not fair game either. My apologies."
Well, tra-la-la. Nothing to see here folks, just MoveOn. But where is the censure, the condemnation? Where is the condemn outrage? Has the Sacramento Democrat Party, Dem-central in California's capital, so much as wagged a finger at Brauer?
And about time! This disruptive, free-thinking student failed to get permission from Modesto Junior College to give away free copies of the fundamental source of all our law. He fell afoul of the "hate speech" code. (Yes, this happened on a college campus. Future leaders of America.)
- New California law: Grade-school students can choose their own "gender," on a day by day basis, deciding which bathroom or shower to use and which sports team to join.
Under this bill, already signed into law (but subject to a potential citizens' initiative to kill it before it becomes effective), a fourteen year old, middle-school boy can announce on Tuesday that he is "really a girl," under his own conception of gender; he can push his way into the girls' locker room and shower with them, whether they like it or not. Then on Wednesday, he can suddenly revert back to being a boy again.
Take a picture; it lasts longer.
On a more serious note, he can also join the girls' soccer team -- and body slam his female opponents, breaking a pelvis (or spine), or perhaps just a rib or two. Pretty soon, smaller or unathletic boys will discover how fun it is to be able to win all the time!
(Psst... it's already happening on adult sports teams; even the International and U.S. Olympics now allow "transgender" male-to-(so-called)-female athletes.)
But the "Bathroom Bill," as many Californios have taken to calling it, goes much further: A student needn't have any hormone treatment or any parts of his body lopped off. All it takes is his (or her, but don't expect too many of those) subjective decision that "today I feel like a girl... a dirty, dirty girl who desperately needs to take a shower!"
So what are the Democrats telling us via these examples?
- Liberals/Progressivists/Democrats want to ban all guns, one bite at a time.
- They reject the very concept of self defense; if set upon, we have the duty to die (passively).
- Respect for freedom of speech and basic civility are vestiges of more primitive times... that is, when the speechifier target is "to the right."
- They see the U.S. Constitution as a subversive document that interferes with Progressivist mob-populism.
- And Progressivists believe in, or pretend to believe in, the "gender insanity" locker-room libel: that there literally is no male and no female, just "social constructs" of "gender." Who needs fathers? Who needs mothers? Let the children be raised by the State in our brave, new world!
I believe we approach a classic tipping point. When insanity piles atop insanity, when the center cannot hold, when the loony Left begins its program to "fundamentally alter" us all, man, woman, and child alike, into their nightmare conception of the Socialist Person, the citizenry will not acquiesce in the destruction of everything we have believed for centuries.
The Plantation Media kept the lid tight enough, prior to 2012, that the low-information voters never realized just how madly the Left had unmoored itself from reality. But like Jack Nicholson in the Shining, we have found the four-hundred page "book" consisting of nothing but "all work and no play makes jack a dull boy," repeated endlessly.
It's now dawning upon the lowest of the low informationers that the Progressivists didn't just go a little funny in the head; they've been whopping loonie-toons for decades! They just hid it well.
The Truth may be slow, but when it finally gets there, it blasts away all the ludicrous lies and fraudulent fabrications.
The secret weapon of the anti-Progressivists -- is Progressivism itself.
Date ►►► September 15, 2013
These Aren't Your Grandpappy's Movies
I suppose that most of you have noticed that the price of "entertainment," broadly defined, is spiraling upward. You can't see a play in a major venue anymore without dropping $150 to $200 a ticket. Restaurants are so pricey, you think twice even about going to dim sum or a barbecue joint. The circus, the county fair, a concert, a ball game, even your kids' high-school recital is an occasion to balance the dang checkbook and make sure nothing vital will bounce.
In fact, the average American family has even been priced out of Disneyland -- something which I guarantee would never have happened if Walt were still alive! The cost of a trip to the Tragic Kingdom today runs $92 for "adults" (age 10 and up, one day, one park) and a scant $86 for ages 3-9.
So Dad, Mom, a sixth grader, and his fourth-grade sister sets the family back $362 just to get in the door... and remember, that's one day at one park. If you want to park-hop -- say, visit both Disneyland and California Adventures (right across the plaza) -- that same hypothetical, four-person family would have to cough up FIVE HUNDRED AND FORTY-TWO SIMOLEONS... not counting food, t-shirts, Mickey ears, candy, and of course parking -- $16 per vehicle, car or motorcycle. And the resort hotel stay, hundreds more!, if you don't happen to live within easy driving distance of beautiful downtown Anaheim, California.
Most ordinary families would have to look for miraculous specials via some packager -- or winning the lottery -- even to think about it!
(Psst... It's even more expensive at Walt Disney World/Magic Kingdom.)
So ordinary kids will never again get to see Disneyland or Disney World; only the ultra-rich (usually liberal Democrats), and of course those on the opposite end of the scale, living in "poverty" -- that is, anywhere up to 150% of the so-called poverty line; they can probably get free tickets, and free bongs, if they prove they're reliable Democrat voters.
So I reckon only we, those of us stuck plum in the vast middle of the economic spectrum, are financially restricted to the dubious entertainment value of the latest blockbuster movies. Hey, at least a night at the movies is pretty cheap, eh?
Guess again, muggle. When Star Wars first came out in 1977, in most big cities, the cost was $3.00. (Remember the parody Hardware Wars? Its catchline was "You'll laugh! You'll cry! You'll kiss three bucks goodbye!")
But today, in those same big cities, ticket prices range as high as $16.00. Inflation accounts for $8 of that increase; but the remaining $5 increase is just movie studios and production companies deciding they prefer to sell less product for more money per unit, than the other way round.
In other words, they're following the trend, pricing ordinary middle-income families out of going to the movies. (And if you want higher prices, you must pay for it with lousier movies. Anybody here sick of seeing CGI special effects take the place of real special effects, real stuntmen and stuntwomen, real actors, and real stories?)
And if you can believe George Lucas, director, writer, and executive producer of the orginal Star Wars, we can look forward to much, much higher prices for future blockbusters:
"Going to the movies is going to cost you $50, maybe $100, maybe $150," says George Lucas, the creator of "Star Wars" and founder of Lucasfilm, which is now owned by the Walt Disney Co., ABC’s parent company.
Lucas and director Steven Spielberg talked about the future of entertainment while on a panel at the University of Southern California Thursday.
Spielberg said studios were increasingly putting money into "mega-budget" movies, causing a tectonic shift in the entertainment industry.
"There’s eventually going to be an implosion, or a big meltdown," Spielberg said. "There’s going to be an implosion where three or four, or maybe even a half-dozen mega-budget movies, are going to go crashing into the ground, and that’s going to change the paradigm."
The thrust of their discussion was the looming paradigm-change of "differentiated pricing depending on the film," as senior equity analyst Michael Corty puts it. And in theory, I have no problem with that; it's Capitalism.
But if a blockbuster starts to cost even a measly U.S. Grant, going to see a quiet, family picture is surely going to be significantly more expensive than sixteen buckaroonies. You'll get a "bargain": half the price of the next Avengers sequel!
And of course, when there's money (or a chance to kick the free market in the knee), would the Obamunist regulators lag behind? La Casa Blanca is giddy with excitement at the new regulatory regime about to be released anent the silver screen -- Warning! Extremely annoying commercial video begins playing immediately you click the link, and sometimes refuses to stop even when you click "pause," repeatedly:
The Obama administration is nearing completion of a proposal to require that movie theaters offer technology so blind and deaf people can go to the cinema.
The draft rule, which is part of a decades-long effort by advocates for people with disabilities, would likely require thousands of movie theaters across the country to offer devices that display closed captioning and provide audio narration of what’s happening onscreen.
Disability associations say that the new regulation will make sure that blind and deaf people can appreciate the latest blockbuster just like everyone else.
But theater owners worry that a federal mandate will force small, rural and struggling theaters to close given the costs associated with the rule.
"These theaters can barely stay in existence and often need community support to break even," the trade group wrote in a comment to the Justice Department’s 2010 precursor to the upcoming proposal. "To require them to install expensive closed captioning technology at this time is an undue financial burden that may result in these theaters closing."
But watching theaters close across (red-state) America is, of course, a miniscule price to pay for regulating all Americans -- requiring technology that will flash bright closed-caption LEDs in other patrons' eyes and loudly narrate all the ongoing visuals, minute by minute.
Heck, it's bad enough having to listen to the cell-phone conversation of some ninny two rows up, having a loud argument with his girlfriend about leaving the seat up in the "reading room." In the immediate future, we'll also have to listen to several sonic devices for the blind bellowing out, "Frank enters the room! He sees Manya! He throws a peanut-butter sandwich at her head!"
Well... well, I suppose we'll just have to buy DVDs instead, sit in our own living rooms, and make our own buttered popcorn. Cheaper that way anyway... Until Blu-Ray takes over completely, and we have to replace all of our $16 DVDs with $28 Blu-Rays -- which will shortly be jacked up to "$50, maybe $100, maybe $150." Of course, all those crappy, old movies -- low-res, un-CGI'ed, sans impossible stunts, no Transformers, maybe even silent! -- will still be free, more or less, on Turner Classic Movies.
I can live with that.
Date ►►► September 5, 2013
In a recent post on my favorite blog, Paul Mirengoff concludes:
The combination of Republicans who don’t understand the importance of America possessing credible military power in the Middle East and Democrats who believe that America should not exercise military power anywhere (at least if there’s the slightest risk involved) seems poised to carry the day in the House. And a growing number [of] Republicans have come to share the Democrats’ view of exercising U.S. power.
Paul appears to see such Republicans as short-sighted spoilers, or worse, dog-in-the-manger hypocrites who believe that if they can't be allowed to claim the victory, then nobody should; better American defeat and diminishment than allow Obama to soar!
But I, by contrast, see a growing number of Republicans who sincerely believe it's too dangerous to allow the current occupier of 1600 Penn. Ave. to exercise military power anywhere; I doubt they would feel the same about a President Cruz, a President Romney, or a President Christie.
Perhaps some of those GOPpers are simply meanspirited enough not to want Barack "Leading from behind" Obama to get the glory and credit, even if such wishes damage the United States. But I strongly suspect the vast majority of anti-intervention Republicans believe -- and not without good reason -- that the Obama administration is so venal, feckless, and incompetent that any military intervention at this juncture would likely have a perverse effect, leaving us worse off than had we done nothing.
For example, given Obama's open praise of the Muslim Brotherhood in Egypt and his condemnation of the military coup that overthrew the radical-Islamist tyrant Mohamed Morsi -- an absurdly perverse misunderstanding of the religio-political dynamics of that country -- is it not reasonable to fear that Obama might also have sugar-plum-fairy fantasies that the rebels against Bashar Assad are all budding Rooseveltian (or Wilsonian) democrats, waiting only for the fall of the dictator to implement a glorious socialist revolution that will be Obama's crowning achievement?
I see Obama as having the revalatory gravitas of Michael Jackson in the videos "Thriller," "Beat It," and the Disneyland attraction "Captain EO": He sees himself as Barack the magic man who need merely Imagine great triumphs, then declare, "Make it so!" But if his political bumbling and misunderstanding allows Assad's chemical weapons to fall into the hands of the al-Qaeda rebels in Syria -- democrats pining only for freedom! -- would that not be worse than the current status quo, even including Assad's massacre?
I'm not entirely onboard that particular bandwagon; I'm not certain that an Obamic intervention in Syria would necessarily produce perverse results. But I do sympathize with those Republicans who see the situation as more perilous than I; and I possess no secret evidence (or fully functioning Magic 8-Ball) that Obama will turn out to be a better wartime leader anent Syria than he has been to date anent Libya, Egypt, the Palestinians -- or any of our traditional allies.
© 2005-2013 by Dafydd ab Hugh - All Rights Reserved