The Greatest Tragedy of The New Decade

I think that it is safe to say, without any hint of exaggeration, that Tyra Banks' decision to end her TV talk show is a bigger tragedy than the Hindenburg crash, the sinking of the Titanic, the product of Nancy Pelosi's numerous facelifts and the move "Gigli", all put together and multiplied times 1000.

The Decade From An Investment Perspective

As we close out the year, we can look at the data and conclude that this was NOT a good decade economically or for investments.

From Econbrowser:

First, the US ended the decade with roughly the same people working as it did in 2000.

Also, when you strip out dividends, the S&P 500 nominal price index finished about 20% lower. Adding back the dividends doesn't really help if you also factor in inflation. The last chart shows that real earnings for the S&P 500 dropped precipitously at the end of the decade and finished below where we started.

Government Can't Protect American Fliers, So Let's Put Them In Charge Of Healthcare

When Don Boudreaux sends a letter to the New York Times or to any other print media company headed for extinction, he always administers a serious beatdown:

From Cafe Hayek:

Here’s a letter that I sent today to the New York Times:

Two celebrated advocates of active and expansive government – President Obama and yourself – admit, quite accurately, that the security breach on Northwest Flight 253 represents a momentous failure of government (”The System Failed,” Dec. 30).

Ponder this fact carefully. Government’s core function is to protect citizens from violence. If Uncle Sam fails at this central, all-important task, what reason have we to trust that it will succeed at delivering less-costly and higher-quality health-care? Or at productively restructuring financial markets?

Surely, before government directs energy and resources to these and the countless other tasks that it now tries to do, it should first master its most fundamental duty.

Sincerely,
Donald J. Boudreaux

If the gardener isn’t up to the task of keeping the flowers properly watered, then it’s especially foolish to assign to him the additional task of mastering plant genetics.

Healthcare Legislation Needed 2,000 Pages To Truly Capture Harry Reid's Brilliance

The 2,000+ page Senate healthcare bill needed to be that long to capture all of the brilliant ideas that Harry "Out of A Job Next Year" Reid, Max "My Mistresses Get Good Government Jobs" Baucus, Ben "You Can Easily Put A Price Tag On My Values and Integrity" Nelson and the other members of the Senate had to make healthcare better, more efficient and cheaper.

Other, less consequential pieces of legislation like the Civil Rights Act and the Homestead Act didn't require as many pages because those Congresses didn't have intellectual titans like we do today.

From Mark Perry:

Equity Valuations Based on Price to 10 Year Real Earnings

Is the equity market expensive, having run up so much since last March? Some people prefer a variation of the P/E multiple to measure the general cheapness or expensiveness of stocks by taking earnings from the last 10 years and adjusting them for inflation. By doing this, you get a much better sense of the long term earnings potential of S&P 500 companies and filter out the noise of short term writeoffs and unsustainable short term increases in earnings. And, you strip out inflationary growth in earnings, which nobobdy should pay for when investing.

So, here is a chart of the S&P 500 that shows the price of the index divided by the previous 10 years real (inflation-adjusted) earnings. The red line is the historical average.

From Greg Mankiw:

Politicians In Washington Have Our Best Interests In Mind At All Times, So Don't Worry

This post from Henry Payne at The Corner nicely summarizes why Americans generally despise the politicians in Washington:

Detroit — As I stood in line at security Sunday to board Northwest Flight 3502 back home to Detroit from St. Louis, I reflected on the terrorist incident that took place just two days before on a similar Detroit airliner. It was a telling bookend to a Christmas holiday marred by Washington governance.

On Christmas Eve, Senate Democrats, acting on their president’s highest priority, forced through a federal takeover of the U.S. health system (aka, monstrous mountain of toxic pustules – bravo, Mr. Steyn). On a partisan vote, our Washington leaders used the cover of the holiday to defy public opinion and extend their power over 20 percent of the U.S. economy.

Just 24 hours later, a Muslim bomber from Nigeria defied the security system this same federal government had put into place and nearly blew up 278 airline passengers. Our government system failed to flag an individual who was in a federal terror database and failed to detect the explosive attached to his body.

As I waited for my Detroit plane, Michigan Rep. Pete Hoekstra – a Republican member of the House Intel Committee and a rare voice of sanity on terror issues this past year – told Fox News that the “the threat is real.” Yet, by rejecting the “War on Terror” and adopting the term “man-made disasters, this administration has downplayed the threat from terrorism.”

Clearly, the events of this holiday season show that Washington has lost its way .The federal government’s first priority is the security of its citizens. Instead, the same Washington that still struggles with airport security will now be taking over our health care system.

Janet Napolitano Is Like a Typical DMV Worker, Only Not As Dynamic

A few days ago, I said that Janet Napolitano "wasn't smart." Upon further reflection, let me say, instead, that she is an incompetent dolt and a pathetic bureaucratic hack.

Daniel Pipes concurs:

Umar Farouk Abdulmutallab smuggled 80 grams of PETN in his underwear on a Northwest flight on Christmas Day from Amsterdam to Detroit and almost killed 288 passengers and crew.

How did the geniuses in the Obama administration respond? Janet (“ man-caused disasters”) Napolitano, secretary of the Department of Homeland Security, concluded that the system “worked really very, very smoothly.”

Need one really point out that, had the system worked, Abdulmutallab would not have been allowed on the aircraft, and certainly not with a bomb? When her statement was criticized, Napolitano reversed course and announced a day later that “Our system did not work in this instance.”

While it’s good to see that even Obama appointees can learn from their errors, Napolitano’s original gaffe reveals a state of mind among this country’s top decision makers that so long as hundreds of people do not perish, all is well.

Abdulmutallab’s near-success and Napolitano’s idiotic response tell Americans about the weakness of counterterrorist efforts so many years after 9/11. In brief, because law enforcement refuses to “threat profile” and focus on Muslims, the flying public is both inconvenienced and unsafe.

Americans Fleeing Blue State Tax Hells For Red States Like Texas

If the California/New York economic model--high taxes, big municipal and state government bureaucracies and unions, high regulations, in your face environmentalism, etc--is so wonderful, why are Americans fleeing those states in droves? Why are they moving, instead, to states with lower taxes and more freedom (i.e. "red states")?

Obviously, a lot of people agree with me that it is great to be in Texas.

Great article from Joel Kotkin at New Geography:

Net Domestic Migration by State
2009 Rank		Net Domestic Migration		Rank 2000-2009
	State	2009	2000-2009
1	Texas	143,423	838,126	2
2	North Carolina	59,108	663,892	4
3	Washington	38,201	239,037	9
4	Colorado	35,591	202,735	10
5	South Carolina	31,480	306,045	7
6	Georgia	26,604	550,369	5
7	Tennessee	20,605	259,711	8
8	Oklahoma	18,345	42,284	19
9	Virginia	18,238	164,930	12
10	Oregon	16,173	177,375	11
11	Arizona	15,111	696,793	3
12	Louisiana	14,647	(311,368)	45
13	Alabama	11,044	87,199	14
14	Utah	8,623	53,390	17
15	Wyoming	7,192	22,883	25
16	Kentucky	6,268	81,711	15
17	Arkansas	5,298	75,163	16
18	West Virginia	4,510	17,727	26
19	District of Columbia	4,454	(39,814)	37
20	Massachusetts	3,614	(274,722)	44
21	New Mexico	3,366	26,383	24
22	Delaware	2,580	45,424	18
23	Montana	2,410	39,853	21
24	South Dakota	1,619	7,182	27
25	Idaho	1,555	110,279	13
26	North Dakota	1,375	(18,071)	31
27	Pennsylvania	1,346	(33,119)	34
28	Alaska	979	(7,360)	29
29	Missouri	(124)	41,278	20
30	Nebraska	(956)	(39,275)	36
31	Vermont	(975)	(1,505)	28
32	Kansas	(1,242)	(67,762)	41
33	Iowa	(2,135)	(49,589)	40
34	New Hampshire	(2,602)	32,588	22
35	Maine	(2,937)	29,260	23
36	Nevada	(3,801)	361,512	6
37	Hawaii	(5,298)	(29,022)	33
38	Mississippi	(5,529)	(36,061)	35
39	Wisconsin	(5,672)	(11,981)	30
40	Rhode Island	(6,172)	(45,159)	38
41	Indiana	(6,805)	(21,467)	32
42	Connecticut	(7,824)	(94,376)	42
43	Minnesota	(8,813)	(46,635)	39
44	Maryland	(11,163)	(95,775)	43
45	Florida	(31,179)	1,154,213	1
46	New Jersey	(31,690)	(451,407)	47
47	Ohio	(36,278)	(361,038)	46
48	Illinois	(48,249)	(614,616)	49
49	Michigan	(87,339)	(537,471)	48
50	New York	(98,178)	(1,649,644)	51
51	California	(98,798)	(1,490,105)	50
Derived from US Bureau of the Census data.