Thursday, May 31, 2012

Tweet by Chris Ellis

Legal to kill your baby girl because you wanted a boy, yet illegal to buy 20oz sugary soda. Total depravity of man at its finest!

by Chris Ellis at 5/31/12 7:48 PM


Sent from my iPhone

Wednesday, May 30, 2012

Calafia Beach Pundit: Good and bad austerity

Good and bad austerity

I've been a friend and admirer of David Malpass for a long time, even though we have not always agreed on the outlook for the economy. Today, David has a very nice op-ed in the WSJ, "Greece's False Austerity," that makes a critical distinction: austerity that shrinks the public sector is good, while austerity that imposes increased burdens on the private sector is bad. This is excellent advice for Greece, just as it is for the U.S. Some excerpts:

The conflict between growth and austerity is artificial and framed to favor bigger government. Growth comes from economic freedom within a framework of sound money, property rights, and a rule of law that restrains government overreach. Businesses won't invest or hire as much in an environment where governments dominate the economy. Thus, government austerity is absolutely necessary for economic growth in both the short and long run. 
Economics has often ignored the critical distinction between austerity for the government and government-imposed austerity on the private sector. In the former, governments which are over-budget sell assets, restrain their hiring, and limit their mission to essentials. That's growth-oriented austerity. 
In the private-sector version of austerity, governments impose new taxes and mandates on the private sector while maintaining their own personnel, salaries and pensions. That's the antigrowth version of austerity prevalent in Europe's austerity programs.Many economic models, including the U.S. Congress's budget scoring system and Keynesian stimulus, ignore national debt levels and disregard whether spending decisions are made by the private sector or the government. This creates the absurd result that an economy in which the government spends and invests increasing amounts—even 100% of GDP—has the same projected growth rate as an economy where the government spends and taxes less. 
As the U.S. struggles with tax reform, deficit reduction and the year-end fiscal cliff, it will be critical to distinguish between reforms that downsize the government and reforms that downsize the private sector and put the dollar at risk. One approach points to growth, the other to Greece.

UPDATE: The Centre for Policy Studies yesterday published a study of 28 OECD countries that finds "that the size of government as a proportion of GDP is a major influence, controlling for other factors, on a country's rate of economic growth. If you want growth, scaling back the state should be an aim whether you have a deficit or not." Furthermore, the study finds that "other things equal, countries with small governments and with small tax burdens grow faster," and "pupils in small-government countries achieve significantly better results in reading, math and science than those in big-government countries."

The good news is spreading: cutting back on bloated government spending is not austerity, it is one of the best ways to stimulate an economy.

Sent from my iPhone

CARPE DIEM: A Tutorial for the President on Profit Maximization

A Tutorial for the President on Profit Maximization

Writing in the WSJ last week, economics professor Paul Rubin "takes the community organizer-in-chief to task for his dismissive comments about profit maximization" (ht/E. Frank Stephenson):

"In justifying his attacks on Bain Capital, President Obama argues that "profit maximization" might be an appropriate goal for a private-equity firm, but not for more general public policy. This argument ignores one of the most basic premises of economics.

We economists assume that firms always maximize profits, and that profit maximization by firms (all firms, not just private-equity ones) is a very good thing. But this is not because profits are in themselves good. Rather, profit maximization is good because it leads directly to maximum benefits for consumers. Profits provide the incentive for firms to do what consumers want. 

Consider the converse: What if a business does not maximize profits? Then it is either not making the products that consumers want the most, or it is not producing its products at the lowest cost. In either case, consumers are harmed. Any argument against "profit maximization" is an argument against consumer welfare.

Maximizing consumer welfare is the ultimate justification for an economy. Consumers are of course also workers and voters. Contrary to President Obama's claim, skill at profit maximization does translate directly into skill at governing the economy. Failure to understand this simplest and most basic point is probably itself enough to disqualify someone from the presidency when economic issues are paramount."

MP: Another good time to invoke the sagacious words of Frederic Bastiat below:

"Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race."

HT: Warren Smith

Sent from my iPhone

Tuesday, May 29, 2012

Re: Sex-Selective Abortion in America - National Review Online

Re: Sex-Selective Abortion in America - National Review Online

Kathryn: Your video calls to mind an excellent essay by Nicholas Eberstadt from the Fall 2011 issue of The New Atlantis. In "The Global War Against Baby Girls," Eberstadt, the Henry Wendt Chair in Political Economy at the American Enterprise Institute, details the demographic fallout of sex-selective abortion — a "ruthlessly routine" practice that "has come to alter the overall sex ratio at birth of the entire planet." From the opening paragraph:

Over the past three decades the world has come to witness an ominous and entirely new form of gender discrimination: sex-selective feticide, implemented through the practice of surgical abortion with the assistance of information gained through prenatal gender determination technology. All around the world, the victims of this new practice are overwhelmingly female — in fact, almost universally female . . . resulting in millions upon millions of new "missing baby girls" each year. In terms of its sheer toll in human numbers, sex-selective abortion has assumed a scale tantamount to a global war against baby girls.

Read Eberstadt's essay here.

UPDATE: The Daily Caller reports that the Planned Parenthood employee caught, in a Live Action video, encouraging a sex-selective abortion (Kathryn Lopez posted the video here this morning) has been fired. Leslie Kantor, a vice president for education at the Planned Parenthood Federation of America, said that the employee, called "Rebecca" in the video, failed to "follow our protocol for providing information and guidance when presented with a highly unusual patient scenario."

As for the investigators, Kantor said:

Recently, opponents of Planned Parenthood conducted hoax patient visits with hidden video cameras and are now using edited videotapes to promote false claims about our organization and patient services. In highly unusual and scripted scenarios, hoax patients sought services related to sex selection.

Does she mean the "false claim" that some Planned Parenthood employees encourage abortion for sexual selection?

No, Leslie, looks like that one is true.

Sent from my iPhone

A Post from Business Insider

The CBO has seemingly not been known for its infographical prowess, but they're apparently looking to change that.

Today, under the rubric of "energy security", they published one of the sharpest and cleanest breakdowns we've seen showing which energy source — oil, natgas, coal, etc. — gets used by which modern convenience — car, air conditioning, etc.

Here's how it reads: first row = % of total U.S. energy source; second row = % of given source in given end use; third row = % of given end use's total sources; fourth row = amount spent to power end use.

middle graph

We recommend that you check out the whole infographic, which has even more detail on the breakdown.

Read More Here

Sent from my iPhone

EconoMonitor : EconoMonitor » Why Can’t People Understand National Accounting?

Sent from my iPhone

Saturday, May 26, 2012

blog maverick

Sent from my iPhone

RealClearMarkets - Bigger Than Facebook

Sent from my iPhone

Ready, Fire, Aim | Washington Free Beacon


Column: Team Obama's reputation is vastly overrated

AP Images

AP Images

We are rapidly approaching the moment at which Washington reevaluates the Obama campaign's reputation for competence and expertise. Every week, one or several of Obama's surrogates trip over their own words; every day, Jim Messina and David Plouffe and David Axelrod must scratch their heads in wonder at the mess they are creating. One gaffe is an isolated event. Two is an embarrassment. But three or more form a pattern, one that is damaging not only Obama's precarious chances for reelection but also the fortunes of the Democratic Party.

The most recent trouble arrived last Sunday in the person of Newark Mayor Cory Booker, who went fantastically off message when he said his fellow Democrats' attacks on Mitt Romney's background in private equity are "nauseating." The Obama for America hazardous waste disposal team leapt into action, forcing Booker to record a hostage-video-like recantation of his comments by the end of the day. It was too late, though. Booker had tested the waters of intra-Democrat dissent and had found they were warm. Dianne Feinstein, Chris Coons, Steve Rattner, Ed Rendell, Artur Davis, Harold Ford Jr., Mark Warner, and Joe Manchin all followed him in.

What Obama intended as an attack on the business practices of Bain Capital transmogrified into a debate over the fairness of that attack. The press hates hypocrites, and it did not take much digging to report that Obama raised more from private equity in the 2008 cycle than any other candidate, and that the president's negative ad buy went up on the very day he held a $35,800 per plate fundraised in New York City with the president of private equity firm Blackstone.

Not even MSNBC's Andrea Mitchell could reconcile the war on Bain with the fact that Obama has taken more than $200,000 from the likes of Bain Capital managing Director Jonathan Lavine, not to mention tens of thousands from Landmark Partners Chairman Francisco Borges. The man would not even be president without the longstanding support of Chicago's Pritzker family, which knows something about, in the words of Rep. James Clyburn (D., S.C.), "raping companies and leaving them in debt."

The hypocrisy runs to the staffing decisions Obama makes. His White House is stuffed with Wall Street types. Two corporate buyout specialists sit on the president's job council. All three of his chiefs of staff have worked for financial houses. His small business administrator worked in private equity. His former chief technology officer left to join a private equity firm. His former communications director Anita Dunn left the White House and promptly offered her services to protect the private equity executives she had attacked while in government. And yet the president is happy to run unseemly ads arguing private equity firms are job-destroying "vampires" that "suck the life" out of other companies and profit from their demise. Indeed, he informed the country Monday that Romney's private sector career "is what this campaign is going to be about."

Really? Obama may spend close to a billion dollars demonizing Bain, only to find that when the national exit poll comes out the night of November 6, "private equity" will not rank at the top of the public's priorities. There is also a larger danger with shifting the focus of the campaign to such ancillary topics as whether private equity is good or bad: When you run a tactical campaign that targets the news cycle, you run the risk of having the attacks backfire. That is exactly what happened in the case of Booker, and what has happened in other cases as well.

In February, the president's Chicago team jettisoned the political identity Obama had been building for years. He had already turned off independents by outsourcing legislation to the left-liberals in Congress in 2009, ignoring the bright flashing neon DANGER sign that was Scott Brown's victory in 2010, and waiting until the last minute to release an economic plan that had no chance of passing in 2011. But it was not until the New York Times reported that Obama had reversed his position on raising money for the Super PACs he had once called a "threat to our democracy" that the bloom truly came off the New Politics rose.

This purported reformer was a classic politician who broke promises and compromised ideals in a relentless quest for cash. Lacking a popular record of accomplishment, and having betrayed his reputation for youthful, sunny, bipartisan Hope and Change, Obama had no other choice but to run a negative campaign in which he tried to paint the alternative candidate as too frightening to govern. So here we are.

The "war on women" message was conceived as a way to frighten all the single ladies into turning out for Obama in the fall. But that narrative quickly collapsed when Democratic strategist Hilary Rosen appeared on CNN in April and proclaimed that Ann Romney had not worked "a day in her life," a remarkably stupid attack on stay-at-home mothers that Obama Super PAC donor Bill Maher "explained" by saying, "What she meant to say, I think, was that Ann Romney has never gotten her ass out of the house to work."

America was thus treated to the spectacle of the president, his wife, and the vice president all defending Ann Romney's honor, and of the White House press secretary pretending that he did not know the well connected Democratic player who had stepped on the campaign's message. Making matters worse, the Free Beacon revealed that both the White House and Senate Democrats pay female staffers less than male ones.

Joe Biden's May 6 appearance on Meet the Press turned into a similar disaster when the vice president said he was "absolutely comfortable" with same-sex marriage. That put Biden at odds with his boss, who at that time opposed "men marrying men, women marrying women." Education Secretary Arne Duncan sided with Biden the next morning. Soon the media wanted to know whether Obama agreed with his subordinates. It was a treat to watch the condescending and preening White House press secretary being pummeled for 21 minutes with questions he could not answer because his bosses at the White House and at the campaign hadn't the faintest clue of what to do.

Here, too, money was the foremost concern. Major fundraisers in the LGBT community were threatening to withhold cash if Obama did not endorse gay marriage. Jay Carney could not dodge press inquiries forever. ABC correspondent Robin Roberts was rushed from New York to D.C., where the president informed her that Sasha and Malia had helped him evolve into a supporter of same-sex marriage. The timing could not have been worse. The interview aired the day after North Carolina, which had been a swing state and where the Democrats will hold their convention in September, banned gay marriage and civil unions with 61 percent of the vote. Team Obama, however, managed to tell reporters—somehow while keeping a straight face—that they had been planning such a shift all along. The public doesn't buy it.

Democrats may be able to forget Obama's campaign finance hypocrisy. They may laugh off the Rosen and Biden gaffes. But Cory Booker's remarks will haunt them, because in just a few sentences, the mayor exposed a growing rift in the Democratic Party.

The Democrats clawed their way back to the presidency in 1992 thanks to a revolution in Democratic affairs: No longer would his party be captured by its client groups, Bill Clinton promised. The Democrats would not merely be a tool of the unions and the New Class of "helping professions" that rely on government spending for sustenance. Democrats would be pro-business, pro-Wall Street even. Freed from a Democratic Congress after the 1994 elections, Clinton was able to make good on this pledge and restrain spending, reform welfare, cut capital gains taxes, and enjoy an economic boom. His party grew close to Wall Street. It accumulated so much goodwill there and in boardrooms across the country that in 2008 even a former community organizer with roots in the left was able to pull the wool over the eyes of some of America's most powerful financiers.

What resulted—the stimulus, Obamacare, Dodd-Frank, the relentless pursuit of higher taxes on wealth, the bashing of hedge funds and private equity—has turned much of high finance against the Obama administration and even the Democratic Party at large. Cory Booker was performing triage. He was trying to sustain the dying embers of a Clintonite, pro-business Democratic Party. He understood that Obama and his Keystone Kops are turning the New Democrat dream into ashes. And Booker, like other Democrats, is terrified by the answer to the following question: Who else will Obama bring down with him?

About The Author

Ready, Fire, Aim

Column: Team Obama's reputation is vastly overrated

AP Images

We are rapidly approaching the moment at which Washington reevaluates the Obama campaign's reputation for competence and expertise. One gaffe is an isolated event. Two is an embarrassment. But three or more form a pattern, one that is damaging not only Obama's precarious chances for reelection but also the fortunes of the Democratic Party.

Sent from my iPhone

Tuesday, May 15, 2012

President Obama’s Business Record | Points and Figures

President Obama's Business Record

President Obama attacked Mitt Romney's business record today. Romney ran Bain Capital, and several other businesses before entering the public sector. Today, I want to reverse the roles and attack Obama's business record before he entered the public sector.

Here are my points.


Actually, you can't attack Obama because he never was in the private sector. He never did anything of note before he was President. I call that a government bureaucrat or hack. My kids have contributed more to GDP already in their young lives than Obama has done in his.

But, if we look at some of the economic data from the last four years, we can discuss Obama's record.

1. First time the US ever defaulted on debt.
2. Largest budget deficit in history
3. Largest increase in government spending ever
4. Highest prolonged unemployment ever since the Great Depression
5. Lowest percentage of people in the work force ever.
6. Most anemic GDP in a "recovery" ever.
7. Trampled on investors rights in government takeover of industries.
8. If re-elected, the highest tax increase in American history.
US Unemployment Rate Chart

US Unemployment Rate data by YCharts

Discuss. Let's make a change in November.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus

Sent from my iPhone

President Obama’s Business Record | Points and Figures

Sent from my iPhone

Friday, May 4, 2012

Tweet by Edward Harrison

Here's my list of all the financial bloggers you should follow

by Edward Harrison at 5/4/12 7:20 AM


Sent from my iPad