Answer me these questions three!!!

December 1, 2009.  Thanks to Breitbart TV for giving us all a nervous laugh watching Howard.

Our Howard telling the French how fondly he feels about socialism at Breitbart.

In Paris in April of 2009 Howard Dean delivered the great speech extolling the truthiness of communitarianism.  Apparently somebody in the George Washington University Sociology department recognized in the 1980’s that socialism, as an ideal, was long past its sell-by date.  Just like the butcher that repacks old meat in a new wrapper, socialism has now been dressed up as communitarianism. George Orwell would be proud.

One must suppose that on his bus ride out of Iowa a few years ago, old Howard found a pamphlet in the loo written by the ideologically confused Amitai Etzioni. The estate of Comrade Karl Marx must be incensed that Mr. Etzioni took off the red dust jacket from Mr. Marx’s book and colored it pink in time to catch the eye of the physician cum commissar. Or, is it communitariasar.  Actually, I think the proper term would be communitariasaur to properly reflect the extinct ideas being repackaged here.

Thank you, Howard, for reminding us that originality is not a requirement for senior political leadership.

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

This, on the eve of the November 30, 2009 Senate debate on what is called healthcare ‘reform.’

Abraham Lincoln called it a lullaby during his campaign against Douglas. What he meant was the political promises contrived to make people feel comfortable enough that they would sleep through the important debates (then it was slavery) and allow the back room deals to be made. In this case the democrats are allowing the lullaby to lure them into voting for healthcare legislation that will indenture every man, woman and child in this country with little or no demonstrable return to the people.

The democrats have allowed themselves to be convinced that they must pass this legislation now or be caught on the wrong side of history. What they really fear is depth-charging a President and a white house chief of staff who painted them all into a corner on healthcare legislation. What they really are doing is CYA for Pennsylvania Avenue and pretending they are doing great things. Yes, pretending, as in fiction.

If the democrats really had any backbone, they would choose this moment to stand athwart this Marxist freight train and push back. Push back the role and obscene cost of government until it resembles something other than a serpent swallowing its own tail; push back until we discover anew the ideal that we, as individuals, can take care of ourselves; push back until everyone realizes that the pervasive influence of government has never been benign and that it’s influence is now parasitic.

What do you suppose are the chances that those democrats will chose to fight for the real needs of the nation (defined as a return to at least one or two of our founding principles), or embarrassing a President who ignores those needs? Thought so.

At a time when the socialists in Europe and China are saying we ought to reconsider the path to socialism, our Democrats, having ruled us for 80% of the time since 1932, are ready to double down all those bad bets and listen to the lullaby.

Here is a chart with the reality. Feel better off with all that government intervention?

	1966	2008	2009
Government spending (Billion’s)	$216	$5,297	$6,456
GDP	$789	$14,441	$14,240
Government spending % of GDP	27.4%	36.7%	45.3%
Unemployment rate	3.9%	7.2%	9.6%
Poverty Rate	14.7%	13.2%	14.5%
Generational Obligation (Billions)	$717.0	$42,000.0	$61,000.0
Government Spending Definition	All Federal, State, and Local Spending
Generational Obligation	The deficit gap obligated to taxpayers for the trailing 80 years
Generational Obligation for 1966 is an estimate, as is the GDP for 2009. Generational obligations are estimates based on projections by the CBO.  Other data is derived from the US census, From the CBO, and from the Executive office of the President of the United States, specifically the budget and its associated historical tables. The 2009 poverty rate is an estimate.

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

If anyone, and I mean anyone, is surprised at the state of the debt at Dubai World, it proves that some people just do not pay attention. The whipping boy for the recent world financial crisis has been the United States, and specifically our property fueled drunkenness. All the smart bankers around the world that invested in sub-prime debt instruments were mere dupes of the intellectually superior bubbas buying homes in Atlanta’s suburbs. And, of course, the dead-eyed subdivisions surrounding American cities were the only place where speculation happened.

Now the truth of the matter begins to seep through. The bubble in Dubai is merely the first major one to drop its trousers in public. What will everyone think when Shanghai or Beijing pops? What about Jakarta, Moscow, or Vancouver?

The reality is there are more shoes to drop. But I say, so what? Bubbles pop, people get hurt, but we survive and move on. The real danger is that the various political, theological, and monarchical classes will use these events as excuses to vest more power in the state and prolong whatever misery is created by the events. At no meaningful time in a century have the marktets been allowed to act without government intervention, often to the great harm of the people. See the U.S. in the thirties and Japan in the nineties for stark examples and bleak results. As scary as the Dubai World risk feels today, at least it is out of hiding and we can deal with it.

At no time since 1932 has a market bubble popped without some savior from the U.S. government intervening. In other words, it has been at least four generations since a market was allowed to heal itself, without a bailout. So how do we know that the markets would not function normally and recover? How could we ever know if fewer people would be harmed? The truth is, we do not. Our only experience is with government intervention before the fact (Fannie Mae and Freddie Mac) and after the fact in the form of the stimulus and the resolution trust, for example. Think about that before you feel the urge to call the government for help; you know, the same government that created the Freddie/Fannie bubble, monster deficits, and perpetually false risk premiums. Lately it feels like we are living inside the movie: “Dr. Strangelove, or How I Learned to Stop Worrying and Love the Bubble.”

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

The last fiscal year at our little company ended on March 31, 2009. In April 2009 I was honored to give a brief speech at an awards ceremony celebrating the highest performing sales people in our company. I recently found the speech wedged in a notebook. Upon reading it again, I found the sentiments continue to be relevant today. Suffice it to say that in the face of the economic deterioration occurring at the time my intention was to lead the team out of their bunkers. Please let the words speak for themselves and I will share some color commentary afterwards.

These days it is fashionable to apologize. It is fashionable to get bailed out with your grandchildren’s money. It is fashionable to say that risk is bad and too dangerous. It is fashionable to use the economy as an excuse. It is fashionable to feel guilty about our failings, though someone once taught me that if you do not fail you are not trying hard enough.

It is even more fashionable to feel guilty about our success. It is fashionable to believe that someone else will solve our problems. It is fashionable to believe that an exceptional individual or company is bad. It is fashionable to believe that if you have more skill, more will, and more daring than others you do not deserve more success.

Well, I am not fashionable. Tonight you are not fashionable. You are contrarian.

We are here to celebrate our individual and collective success. We are not here to be fashionable. 2008 and 2009 will be remembered, without a doubt. Many of the fashionable are today advising that we hunker down, pull back, accept a lower standard of living; think small. I do not know about you, but I have no intention of wrapping a warm blanket of mediocrity around me or our company.

Here is what history will record about us in 2008:

1) We outperformed all our competitors in the U.S. market.
2) We grew sales, we grew share, and in the worst conditions, we were the best in our business.
3) We launched the largest new product in our history, and survived.
4) We survived the most tragic economy in eighty years without a handout.
5) Seven of you will be remembered as the best of the best in the worst of times.

Lions make no apologies for what they are. We will make no apologies about our success. Of our accomplishment this year you earned every inch.

What will history record about us in 2009? That is up to you. There is no greater opportunity than right now to be in front of our customers, trying to meet their needs. There is no better time to be in the fight. Let our competitors sit in their foxholes. We will not. There is no other group I would want to be with than those in this room, right here, right now, in this time. Regardless of the daunting task, we have the ability to fight through and solidify ourselves as the industry leader in North America.

Thank You

For all its inelegance, as blue collar business speeches go I think it stacks up alright. At the time of that speech the stock market had hit rock bottom, GDP had gone from recession to near collapse, congress was enacting a spending plan and calling it a stimulus. We had just laid off a big segment of our national workforce. Credit was draining out the bottom of market. And Pennsylvania Avenue was busy leading the nation in a heroic round self flagellation for all the ills we had visited upon the world.

As I re-read this speech I played a game where I inserted ‘our country’ where I had previously used the word company. I also tried it with ‘our people,’ ‘our race,’ and ‘our international community.’ In a time when every person on the planet is still facing an economic upheaval, where every worker, business owner, CEO, doctor, lawyer, scientist, soldier, parent and teacher wakes up to uncertainty every morning, the message still resonates. The people of our republic have accomplished amazing things in a quarter of a millennium. The difficulties we now face are solvable. Every U.S. citizen can contribute to solving them, as can the citizens of other nations. I believe that. Why don’t our leaders? Why do they believe the only way to solve things is with government?

It appears fashionable to believe that the people of the world are delighted with the fact that the U.S. is suffering. Perhaps some are. But, perhaps more want to shake us and tell us what my grandparents told me at one time or another when I made a mistake. Stop apologizing, shake it off, grow up and get back to work. Sulking and feeling sorry for yourself only wastes your mountain of talent. To be fair, my grandparents never actually used the words ‘mountain of talent.’ I think they usually said the longer you sulk the longer you are on our dole. You get the meaning, though, I am sure.

So I have to ask, when will any one of our leaders give this speech? When will they say we have confidence in the people of America? When will they say our republic stands together, but its people are self reliant and they do not need government to intervene in every aspect of their lives? When will they say that our system, having generated more significant human advancement from the private sector than any government in history, needs to be nurtured, not shackled with taxation and redistribution schemes? When will they say that for all its flaws our capitalist democracy stacks up better than any of the socialist states our current lords – the Democrats – admire? When will they believe that every person should not feel ashamed at his or her success, that in fact it should be encouraged? When will they say that failure is a risk we all understand, but without the risk of failure we end up with mediocrity? When will they say what my grandparents said: You do not need our help, and we believe in you?

When will someone in government today give that speech? Thought so.

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

On the deification of Government in the U.S. and the chronic vacuity of the modern American left.

Like lemmings, the majority of the scribblers claiming membership in good standing in the fourth estate are rushing to sell the healthcare indenture to the American public. Long gone is even the thin veneer of objectivity as they parrot the economic talking points offered by Reid, Pelosi, Frank, Dodd and Krugman. With the exception of the few Libertarian and conservative commentators, journalists around the country are barking from every street corner that the healthcare collectivization is good for everyone. This, despite ample evidence that the legislation will increase costs, further ration care, strip services from the elderly, dampen investment in the broad economy because of confiscatory taxation, and impose a lifetime liability on every man, woman, and child from the day they breathe their first breath on our soil.

However, this is not an argument against this tragicomic legislation, per se. It is a factual rebuttal to the fabricated memes that the first American principles inherently impoverish our people and that the broad application of government is the true path to freedom and prosperity. In this recent argument for the collective written in the Sunday News in Lancaster, Pennsylvania, the author offers a new line of reasoning why all this is good for you. In a nutshell: We have been increasing the role of government almost without pause for the last century, we all seem happy with the result, so the collectivization of healthcare must therefore also be a good thing.

This vacuum of ideas has taken on a life of its own, despite the mountain of evidence to the contrary. Socialization of healthcare is good, and everything else is bad. Government has served nothing but the common good, so even more would be just spectacular. We must act to serve the greater good, magically raising all boats, regardless of the expense or the real outcome of confiscation and redistribution by the government. Everyone is disadvantaged in some way, so social justice demands we intervene everywhere. To reiterate, the argument is that our republic is inherently unfair and systematically victimizes our own people.

Krugman, Kerry, Pelosi, Dodd, and Reid would have us believe that their new ideas are different than those of Marx and Keynes. They would have us believe that the economic and physical terror visited on the peoples of the great socialist experiments does not exist. They believe that the U.S. system is inferior, and we must complete the collectivization begun in 1932 in order to finally put right the wrongs visited upon the citizens of the United States by their own freedoms. We have a President on a ‘contritionpalooza’ apologizing for all the world’s ills, pointing out our obvious inferiority and pretending that all the left’s ideas are new. In the face of that headwind, it might be valuable to insert some facts about the U.S. into the discussion. This chart shows the US world rank in some key indicators of the human condition and compares them to select others.

World Rankings of Some Key Economic and Human Comparisons Between the Socialists/Former Socialists and the Socialist in Training 2009.*
		GDP Per Capita	Human Development Index	Economic Freedom Index	Life Expectancy ***	Green Index	Free Press Index**	Migration (Net immigration per 1000)
The Socialist in Training	USA	10	13	6	50	12	9	25
The Socialists	Russia	67	71	146	162	67	65	71
	China	114	92	132	105	81	70	104
	Cuba	95	51	177	55	51	75	133
	Vietnam	137	116	145	127	105	68	103
	Zimbabwe	74	NA	178	213	74	61	NA
	Venezuela	160	70	136	103	151	72	108
*Sources: IMF, World Bank, CIA factbook, United Nations Development Program, Freedom House.
** Any ranking below 47 indicates a press designated as NOT FREE by the Freedom House.
***Life expectancy figures for the US are likely depressed because of factors such as the 30% obesity rate.

In every measurable category of economics and the human condition the U.S. is apparently ranked above every single current or former socialist theocracy. So why would the President, ninety percent of the nation’s actors, ninety percent of the nation’s editorial pages, all union leadership and ninety percent of the nation’s televised media persist on telling us we need to be more like them?

One possible answer is that they are just unserious, using the tired mantra of ‘we must do good’ as a reason surrender us to the state. They ignore the facts that the U.S. delivers among the best living conditions to our people. They also ignore the fact that our prosperity and our rankings have declined as government intrusion has increased. For example, as recently as 1990 the U.S. ranked first or second in GDP per capita. As the ratio of all government spending raced above 30% of GDP, that ranking declined. Despite the clear evidence that the nature of the state is to be carnivorous unless brought to heel by the people, our Democrats and their enablers in the media believe unflinchingly in its benign hand. It remains inconceivable to them to live without the welfare state.

Another, more likely answer is that they really believe you and I are little more than ewes bleating in the field waiting to be shaved, unable to make our own decisions. The government, to them, should be making all the important decisions for us. And no one, other than them, should be receiving any reward greater than anybody else. We, the people, as individuals are inferior. We are factors of production. How else could they interpret the facts above so differently from the reality?

Perhaps it is simpler than that. The American left has simply forgotten he concept of the self-made individual and its pivotal role in forming this nation. Instead of leading that individual by establishing high expectations for success (the last two presidents to do this were Kennedy and Reagan), they prefer to lead by bribery. Bribe with free healthcare, bribe with welfare, bribe with comfort. They will argue that all these things are good for the common man. But are they really?

In this country today the combined federal, state and local governments spend the equivalent of 37% of GDP.  For fiscal 2009 that will be 45% of GDP. The table below demonstrates the negative correlation between GDP growth and government spending comparing three periods over a 100 year span of time. In short, GDP growth rates subside as government spending rises, robbing the individual of the fruits of his or her labor. This data does not take into account the affects of national resources, monetary policy, and productivity or technology advancements, all of which can mitigate the deleterious effects of government encroachment. In fact, technology has the ability to reduce scarcity and therefore mask the harmful effects of government. In other words, without advancements in technology, our economy might have stalled completely during the last fifteen years as the government siphoned resources away from the people.

The Three Beer Solution.  Drop government spending back to 29% of GDP and add 7.5 million jobs to the economy.
	15 year growth  multiplier of GDP	Government Spending as Percent of GDP	Total Additional GDP ($billions)	Reduction in Government Outlays ($billions)
1913 to 1928	2.49	13%
1953 to1968	2.39	29%
1993 to 2008	2.13	35%
1993 to 2008            Re-model assuming we cut government spending  to 1968 levels of 29%	2.39	29%	20,502	10,727
	Net Additional GDP ($billions)	Total Additional Jobs at $75000 salary and benefits	Government Jobs Lost @ $68,000 per job	Net additional Employment
1993 to 2008            Re-model assuming we cut government spending  to 1968 levels of 29%	9,775	8,689,090	1,166,802	7,522,288
Federal employees (civilian) 2008: 2,768,000
State Employees 2008: 4,363,000
Local Employees: 12,316,000
Sources: U.S. Census, U.S. Budget

All other things being equal, we may have entered 2008 with lower deficits and 7,500,000 more jobs if we had contained government spending under these assumptions. This is rough theoretical logic, but at least it has a logical, data-driven foundation. The socialists in waiting will argue that we need more, not less government. The first table above clearly demonstrates that the U.S. is not inferior despite having less government. The second demonstrates that more government intrusion apparently decreases collective wealth and opportunity. Both point to significant erosion of human rights, freedom of the press, and life expectancy (especially when government spending rises above thirty percent of GDP).

So, is the American left’s platform of ‘social justice, equality, and fairness,’ merely a canard? In order to arrive at the mindset that Government must solve all your problems, it seems they must arrive at two assumptions, that both the American citizen and our first principles codified in our constitution are inferior. Do the left’s intellectual leaders really feel that the average American citizen is utterly incapable of standing on his or her own? Do they think that little of us? Do they think that little of us?

Physics dictates that we should not be able to hear anything in a vacuum. Why is it, then, that in the vacuum of ideas offered by the American left we hear their chanting louder every day? Oh, I forgot, deification involves faith, not facts. Above I referred to socialism as a theocracy. One has only to visit the tombs of Lenin, Mao and Ho-Chi Minh – or buy a Che t-shit – to understand that socialism has it own saints to worship. Who needs facts when you have blind or thoughtless faith? How long do you think it will be before some California congressman sees the face of Che on a burnt piece of toast and hails it as a sign we must end private property in this country?

Frankly, we the people are better than that.

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

Louis Woodhill writes in Real Clear Markets this week that the U.S. stimulus will lead inevitably to more unemployment. His contention that discretionary fiscal stimulus massively distorts the economy has ample historical evidence to support the argument. The experience of the U.S. during the Great Depression and Japan for the last 19 years provides support to the argument that the so-called Keynesian multiplier is about as real as the Easter Bunny. At the end of the Depression (ended by WWII) and despite seven years of so-called stimulus, socialist labor tinkering, and tax increases the U.S. entered the war with unemployment above 15%. Despite nearly one trillion dollars in stimulus in Japan since 1990, can anyone seriously argue that the Japanese economy is robust?

One can argue that even Mr. Woodhill’s well reasoned examples do not dive deep enough to really uncover the disease. For example, gross private fixed investment actually declined for eight quarters beginning in the fourth quarter of 2007. The decline accelerated dramatically in the first quarter of 2009. It is arguable that the giant sucking sound of treasuries was among the contributing factors to this decline along with the general environment of fear, collapse of the credit markets etc. In fact, including the most recent quarter, non-residential private fixed investment has an active decline streak of 15 months.

What does this have to do with anything, you might ask? This lack of investment means three things. First, no private businesses are investing in plant and operations that will add to the supplies of jobs and product for Americans or for export. Let me repeat that. Few new jobs will be created by private companies because they are foregoing, conservatively, two to three hundred billion dollars in investment in new plant and equipment per year. One quarter of GDP growth because of ‘cash for clunkers’ cannot stem that tide. Second, two years with declines in investment says something about the confidence of the risk takers in this country. It says they do not believe the future is so bright despite the fountain of solutions and prosperity promised by the politburo in Washington and the serial toadies in the media. Finally, if Washington increases taxes and increases debt to a combined tune of one to one point five trillion per year, how much would a rational person say will be left over to build anything else but monuments to the Nobel committee?

If stimulus is such a panacea, would we not see an investment boom bigger than any in history going on right now? With all this printing of money going back to the fall of 2008, should we not expect about twenty or thirty million new jobs? The standard answer from the Keynes and Krugman crowd is that we have not spent enough to prime the pump. Of course, the inconvenient evidence from the Depression and Japan argues we should try something different. Yet, our leadership appears to be hell bent on doubling down on those bets. For all those of us who like lullabies and the warm quilt of stimulus, it is time to party like its 1937.

For some three-beer solutions, see here.

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

We do not need facts, we have answers. But, please don’t look at the Congressional Budget Office scoring of H.R. 3962, the Affordable Health Care for America Act released on November 6, 2009.

Thus appears the philosophical state of the political class in the U.S.A. From health care to climate change to the internet, the executive branch and the perpetually leftist legislature have solutions to problems you may not have. Please just turn the channel to American Idol and ignore the man behind the curtain.

For now, though let us talk health care. If the fashionable have their way with you, you will very shortly have a shiny new health care mandate in this country. It will only cost an estimated one point one trillion dollars over the next ten years. The beauty of this plan is that it genuinely has something for everyone to hate.

First, do we or do we not restrict abortion payments through the plan? The House version now says no abortions. How long do you think that will survive the Senate? This is a volatile issue, but ironically the least damaging in terms of economic havoc. That havoc being defined as the potentially devastating affect on the standard of living in this country.

The House bill essentially establishes a lifetime liability for a citizen to live in this country. If you are alive, you must buy health insurance. This, more than similar mandates for automobile insurance and taxation, appears to fully undermine the concept of liberty on which the country was founded. For those of us that believe the absence of that liberty will be a tragedy for the U.S. and for humanity, we are deeply saddened by its demise. Is this legislation leading us back into bondage? Is the battle cry now, “Chain my People up,” instead of “Let my People go?”

For additional fun, the November 6th CBO report shows that taxes and fees will go up by $789 billion in order to fund part of the plan. Of course, in Obamalosiland, that increase in tax has a neutral effect on the economy. Remember, we never met a fact we liked or a tax we hated.

If you receive the much beloved Medicare, Medicaid, or CHIP benefits, your benefit will be cut by $396 billion. The CBO scores these as ‘savings’. I wonder how that big a haircut will affect care. Oh, wait, in Obamalosiland everything is neutral.

Finally, at the end of the day the CBO says we will still have eighteen million uninsured. Of course, we have to assume that the today’s unverified number of forty-six million uninsured is real in order to calculate our ‘success.’ However, assuming that we will still have eighteen million left at the end (some of whom will be undocumented aliens) we will still have another problem to solve. Eighteen million unhappy voters seem like a bad thing after spending a trillion or more.

My apologies for my earlier statement, there is one group that will be happy. The bill explicitly says that states cannot cap lawyers’ fees or damages, effectively ending medical tort reform efforts in this country. So the lawyers win, and we the people…

Lazy Jack

© Edward Hunter and Thanks for the Laughs, 2009

Democrats voted for healthcare collectivization last night, and all that word implies. My reading of the bill sets buying healthcare insurance as a precondition for living in this country. This bill presupposes a citizen has an expense from their date of birth, just for existing. Unlike taxes, which confiscate part of an individual’s effort, this bill implies that an individual is indebted to the state just for being born. With taxes you have a choice not to work. With car insurance mandates you can avoid them by not driving. Conceptually the bill, on the anniversary of the Eastern European freedom from the Soviet Era, moves the bondage from east, to west. Sweet land of liberty, indeed.

For reference as to the success of recent U.S. attempts at collectivization, ask this: What was the benefit from the last trillion-dollar debacle, the so called stimulus? Thought so.

As for history, what do you suppose are the lies agreed upon this morning?

If the Democrats vote for healthcare collectivization tonight, my reading of the bill sets buying healthcare insurance as a precondition for living in this country. How is this different from paying taxes, you may ask? Taxes are paid on what you might happen to earn. This bill presupposes a citizen has an expense from their date of birth, just for existing. Sweet land of liberty, indeed.

What was the benefit from the last trillion-dollar debacle, the so called stimulus? Thought so.

As for history, what do you supposed will be the lies agreed upon in the morning?

The bill is in print.

This gem from page 1432:

A state shall be eligible for incentive payments for enactine medical liability reform in compliance with the following:
(4) CONTENTS OFALTERNATIVEMEDICALLI-
ABILITYLAW.—The contents of an alternative liabil-
ity law are in accordance with this paragraph if—
(A) the litigation alternatives contained in
the law consist of certificate of merit, early
offer, or both; and

(B) the law does not limit attorneys’ fees
or impose caps on damages.

So, this bill that is supposed to cut the costs of healthcare is going to pay states to enact laws to keep doing the same things they have always done for medical malpractice lawyers.

LOL