Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Huh?
on: October 19, 2013, 08:58:07 AM
I heard some reports yesterday, including on Bret Baier, that a Congressional committee with secured hearings under its belt, has concluded that that in point of fact there were no assets in place that could have made a difference.
This is quite contrary to what we have been hearing and covering here , , ,
Anyone that buys that, pm me. I have some beach property in Arizona for sale.....
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Government programs & regulations, spending, deficit, and budget process
on: October 16, 2013, 01:51:54 PM
Re Harsh Price for Fast Food Jobs: I saw this contested this morning on the basis of it being a serious political hack job, not a legitimately performed study/analysis, in the service of unions pushing for higher minimum wages.
It's actually being pushed by companies that make automated restaurant equipment.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / The sun is setting on dollar supremacy, and with it, American power
on: October 14, 2013, 07:29:33 PM
The sun is setting on dollar supremacy, and with it, American power
A serious alternative to the dollar is still a long way off, but the latest shenanigans on Capitol Hill have given the search for them renewed momentum
Such is the dollar's dominance that, to begin with at least, investors might simply have to take default on the chin. Photo: Bloomberg News
By Jeremy Warner, Assistant Editor
8:18PM BST 14 Oct 2013
All great empires – from the Greek, to the Roman, the Spanish and the British - have at their heart a dominant means of exchange which is very much part of their political and social hegemony. Once upon a time, it was Roman coinage which was the world's pre-eminent currency. In more recent times it was the British pound. Today, it's the US dollar to which international investors flock as a safe haven for their money. Highly liquid and apparently reliable – until recently at least – nothing else comes even remotely close to the greenback's dominant position in the international monetary system.
That this position – what Giscard d'Estaing referred to as America's "exorbitant privilege" – could so casually be put at risk by politicians on Capitol Hill is an extraordinary spectacle that may be indicative of a great power already seriously on the wane.
With the pound, the fall from grace was swift. Britain emerged from the devastation of the First World War an irreparably damaged economic and military power, with crushing debts and a deeply impaired manufacturing sector.
The dollar was able quickly to usurp the pound's position. Final defeat for sterling came with Britain's decision to leave the gold standard in 1931 – an economically sensible decision but a psychological turning point for sterling from which it never recovered.
Lack of any credible alternative means it won't happen so quickly with the dollar. For all the progress of the last 30 years, China for now remains a much smaller economy than the US and in any case is nowhere near ready financially to assume such a role. As for the euro, the dollar needn't trouble itself much about this one-time pretender to the throne.
Yet rarely before has international dissatisfaction with the dollar's role as reserve currency to the world been as great as it is now. The most visible anger comes from China, with more than $3 trillion of dollar foreign exchange reserves, $1.3 trillion of them held in US Treasuries. For ordinary Chinese, it has come as a revelation to discover they own so much American debt. That they own it in a country which because of political brinkmanship may actually default has provoked understandable fury.
"It is perhaps a good time for the befuddled world to start considering building a de-Americanised world", China's official government news agency has said.
A steady erosion of trust which began with the financial crisis five years ago has reached apparent breaking point with the pantomime antics on Capitol Hill. The search for long-term alternatives to the dollar is on as never before. Regrettably, there aren't any, or not for the time being in any case. Everyone can only look on in horror as the US commits apparent economic suicide.
Such is the dollar's dominance that, to begin with at least, investors might simply have to take default on the chin. More than 60pc of global foreign exchange reserves are held in US dollars, which also account for more than 80 per cent of global foreign exchange trading.
So important is dollar liquidity in global trade that if, for instance, you wanted to sell Singapore dollars and buy South African rand, your forex dealer would first typically buy US dollars with your Singapore dollars and then use them to buy the South African rand. The dollar is the middle currency in the vast bulk of international transactions.
By the same token, US Treasuries are the very backbone of the global financial system. They are the supposed "risk-free asset" against which everything else is benchmarked, and as such are the collateral of choice in a huge array of financial market transactions. The dollar is also the currency used to price most commodities, from oil to gold.
The dollar's hegemony is all pervasive. This has given the greenback a degree of leverage unmatched by any other reserve currency in history. If China starts to sell dollar assets, it will only weaken the dollar, undermining Chinese exports and reducing the value of its remaining portfolio of dollar assets.
I'd been part of the received wisdom that any act of US default would set off a devastating chain reaction of bankruptcies that would provoke a second global financial crisis. But David Bloom, chief currency strategist at HSBC, has convinced me that dollar hegemony might perversely act in the opposite way, at least initially.
Unlike a generalised credit event, where all instruments default at the same time, the US would initially engage in a series of little, self contained defaults, or "selective defaults", whose individual impact would probably not be that great.
Each bond has a life and coupon of its own. The missed coupon payment might therefore be regarded as not so bad – especially as this is a case of "won't pay", rather than "can't pay".
Markets see such defaults differently, with missed payments expected to be made up eventually once a political resolution is found. It's also very likely that the Federal Reserve would attempt to counter the damage in financial markets with more QE, buying up the Treasuries that investors dumped.
Furthermore, the financial uncertainty created by default would likely drive investors towards past safe havens of choice – in particular, US dollar assets. Alternative safe havens, such as Japan and Switzerland, have been rendered defunct by central bank money printing. Ironically, emerging markets are likely be more damaged by default than the US itself, with further capital flight.
Such is the degree of "exorbitant privilege" enjoyed by the dollar that it might therefore be the first currency in history to see an asset price rally on the back of a default. However, if there were repeated selective defaults, a second, less benign phase would eventually set in. Spooked markets would begin to sell off the dollar.
The consequent stronger euro and pound would have powerfully deflationary consequences for Europe. Internal demand in the US would also collapse as a result of the wrenching fiscal squeeze that would result from federal government attempts to match expenditures with tax revenues.
Dollar hegemony has long been a destabilising force at the centre of the international monetary system; it's a major part of the sharp build-up in global current account imbalances and cross border capital flows that have been at the heart of so many of the problems in the world economy. The unprecedented accumulation of dollar foreign exchange reserves has in turn caused new challenges for the US, making it more difficult to maintain fiscal and financial stability within its own borders.
Policies that may or may not be good for the US are in all probability bad for everyone else. Loose monetary policy in the US since the crisis began has induced unwanted demand and asset bubbles elsewhere in the world.
Serious alternatives to the dollar, such as a global reserve currency, are still a long way off, but the latest shenanigans on Capitol Hill have given the search for them renewed and added momentum. The US is wrecklessly throwing away its future.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Schadenfreude-tastic!
on: October 14, 2013, 07:14:28 PM
|It's nice seeing all the Obama voters finding out just how expensive their magical healthcare law is. http://finance.yahoo.com/news/obamacare-driving-doctors-stop-taking-221939584.html
Obamacare Is Driving Some Doctors To Stop Taking Insurance Altogether
By Mandi Woodruff | Business Insider – Wed, May 29, 2013 6:19 PM EDT..
Bangor Daily News
A Portland, Maine family doctor is the latest poster child for private practitioners who are turning their backs on insurers altogether.
In April, Dr. Michael Ciampi stopped accepting all forms of insurance, including Medicare and Medicaid, and started charging for his services a la carte.
"We're asking people to pay at the time of service just like you would pay at your garage or your lawyer or your plumber," Dr. Michael Ciampi told the Bangor Daily News' Jackie Farwell. "Now, I work for patients. I don't work for the government and I don't work for insurance companies."
Primary care doctors are among the lowest paid in the industry, and they've seen big cuts to their bottom line recently, as insurers cap physician fees in order to rein in health care costs. Once Obamacare goes into full effect in 2014, it's predicted that insurance premiums will skyrocket, and all the extra paperwork required will cost private practices like Ciampi's more time, money and manpower.
The Inquisitir explains:
A doctor’s income is what the office takes in payments minus expenses or overhead. Physician overhead cover many things but the most expensive cost is the staff necessary to handle insurance coverage. About 20 to 30 years ago this cost used to be around 15 to 30% of revenue. Now for many doctors this insurance overhead has grown to an outstanding 60% or more, with more staff being hired to handle the quickly enlarging piles of paperwork required by Obamacare.
To top it off, Medicare is beginning to cap payments while the overhead costs remain the same, or worsen. So doctors may stop insurance coverage from Medicare just because they’d see a huge drop in their annual income.
Since the switch, Ciampi says he has been able to slash his prices by half in some cases, just from his overhead savings alone. But he's lost patients in droves, with several hundred of Ciampi's 2,000 patients ditching him altogether.
Nashville, Tenn.-based Dr. Robert Tomsett had similar results after converting to a no-insurance model at his practice in 2011. Unfortunately, his staff paid the price.
"We did have to let some of the existing staff go as our patient count has dropped since initiating our transition to self-pay," Tomsett wrote. "This is typical from accounts by other providers around the country that have converted their practices, some as much as a 75% drop in patient count."
Six weeks into his no-insurance model, Tomsett saw only 75 patients and managed to break even.
"I am able to spend more time with each patient than any other time in my career," he wrote.
In a similar case in San Antonio, Texas, a pair of primary-care physicians made headlines when they stopped accepting third-party insurance a year ago. They told MySanAntonio.com that they moved to a direct pay model because of the " expensive and bloated bureaucracy that drives financial reimbursements."
A 2012 survey of more than 13,500 doctors from around the country found that 26% have already cut services for Medicaid patients due to costs, and within the next two years more than 50% plan to cut some patient access to their services. About 7% plan to switch to cash-only practices, like Ciampi's, or "concierge practices" in which patients pay doctors an annual retainer.
What happens if more doctors follow Ciampi's lead and take matters into their own hands?
You've got a couple of options –– take your business elsewhere or pay the piper. Some insurers will offer partial reimbursements to out-of-network physicians, but the onus will be on you to deal with the paperwork involved.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / America’s default on its debt is inevitable
on: October 14, 2013, 06:57:07 PM
America’s default on its debt is inevitable
By James Grant, Published: October 10
James Grant is the editor of Grant’s Interest Rate Observer.
“There is precedent for a government shutdown,” Lloyd Blankfein, the chief executive officer of Goldman Sachs, remarked last week. “There’s no precedent for default.”
How wrong he is.
The U.S. government defaulted after the Revolutionary War, and it defaulted at intervals thereafter. Moreover, on the authority of the chairman of the Federal Reserve Board, the government means to keep right on shirking, dodging or trimming, if not legally defaulting.
Default means to not pay as promised, and politics may interrupt the timely service of the government’s debts. The consequences of such a disruption could — as everyone knows by now — set Wall Street on its ear. But after the various branches of government resume talking and investors have collected themselves, the Treasury will have no trouble finding the necessary billions with which to pay its bills. The Federal Reserve can materialize the scrip on a computer screen.
Things were very different when America owed the kind of dollars that couldn’t just be whistled into existence. By 1790, the new republic was in arrears on $11,710,000 in foreign debt. These were obligations payable in gold and silver. Alexander Hamilton, the first secretary of the Treasury, duly paid them. In doing so, he cured a default.
Hamilton’s dollar was defined as a little less than 1/20 of an ounce of gold. So were those of his successors, all the way up to the administration of Franklin D. Roosevelt. But in the whirlwind of the “first hundred days” of the New Deal, the dollar came in for redefinition. The country needed a cheaper and more abundant currency, FDR said. By and by, the dollar’s value was reduced to 1/35 of an ounce of gold.
By any fair definition, this was another default. Creditors both domestic and foreign had lent dollars weighing just what the Founders had said they should weigh. They expected to be repaid in identical money.
Language to this effect — a “gold clause” — was standard in debt contracts of the time, including instruments binding the Treasury. But Congress resolved to abrogate those contracts, and in 1935 the Supreme Court upheld Congress.
The “American default,” as this piece of domestic stimulus was known in foreign parts , provoked condemnation in the City of London. “One of the most egregious defaults in history,” judged the London Financial News. “For repudiation of the gold clause is nothing less than that. The plea that recent developments have created abnormal circumstances is wholly irrelevant. It was precisely against such circumstances that the gold clause was designed to safeguard bondholders.”
The lighter Roosevelt dollar did service until 1971, when President Richard M. Nixon lightened it again. In fact, Nixon allowed it to float. No longer was the value of the greenback defined in law as a particular weight of gold or silver. It became what it looked like: a piece of paper.
Yet the U.S. government continued to find trusting creditors. Since the Nixon default, the public’s holdings of the federal debt have climbed from $303 billion to $11.9 trillion.
If today’s political impasse leads to another default, it will be a kind of technicality. Sooner or later, the Obama Treasury will resume writing checks. The question is what those checks will buy.
“Less and less,” is the Federal Reserve’s announced goal. Under Chairman Ben Bernanke (with the full support of the presumptive chairman-to-be, Janet Yellen), the central bank has redefined price “stability” to mean a rate of inflation of 2 percent per annum. Any smaller rate of depreciation is an unsatisfactory showing to be met with a faster gait of money-printing, policymakers say.
In other words, the value of money has become an instrument of public policy, not an honest weight or measure. In such a setting, an old-time “default” is impossible. How can a creditor cry foul when the government to which he is lending has repeatedly said that the value of the money he lent will shrink?
The post-1971 dollar derives its value from the stamp of the government that issues it. Across the seas, this imprimatur is starting to look a little tenuous. Lend us your dollars for 10 years, the Treasury proposes. We will pay you the lordly interest rate of 2.7 percent per annum. And at the end of those 10 years, we will hand you back your principal, which will almost certainly buy less than the money you lent.
This is the unsustainable conceit of the world’s superpower-cum-super debtor. By deed, if not audible word, we Americans say: “The greenback is the world’s great monetary brand. You have no choice but to use it. Like it or lump it.” But the historical record of paper currencies is clear: Governments always over-issue it. The people finally do lump it.
What to do? Let us face facts: We have defaulted in the past. Let us confront the implied message of the Federal Reserve’s pro-inflation policy: We will default in the future, though no lawyer will call it “default.” And let us preempt the world’s flight from our intangible money by taking steps to fashion a 21st-century improvement. We have the gold and the brains to find the solution.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Lower your income, get free Health Care
on: October 14, 2013, 03:48:25 PM
Even better, lots of people are going to have their incomes drop without even trying!
Lower your income, get free Health Care. "If they can adjust their income, they should." "It's not cheating. It's allowed", says Karen Pollitz, a senior fellow with the Kaiser Family Foundation.
Under the Affordable Care Act, if your 2014 income is between 138 and 400 percent of poverty level for your household size, you can purchase health insurance on a state-run exchange (such as Covered California) and receive a federal tax subsidy to offset all or part of your premium.
If your income falls below 138 percent of poverty, you qualify for Medicaid, which provides no-cost health care to low-income people. In California, it's called Medi-Cal.http://www.sfgate.com/business/networth/article/Lower-2014-income-can-net-huge-health-care-subsidy-4891087.php
If everyone would lower their income enough, healthcare would be totally free!
Politics, Religion, Science, Culture and Humanities / Politics & Religion / National Socialist Park Service
on: October 08, 2013, 07:12:51 PM
Report: Armed rangers forced senior-citizen tourists to stay inside their hotel during Yellowstone visit because of shutdown
posted at 2:41 pm on October 8, 2013 by Allahpundit
Via Breitbart and Ace, who’s demanding that the National Park Service pay some sort of price for serving as “the shock troops of the punitive bureaucracy” through all of this. I’ve written similar things over the past week, and right now I can’t understand why either of us would bother. They’re not going to pay any price. We all know it. Issa will haul the director and his deputies before the Oversight Committee and they’ll mouth the requisite perfunctory regret and warnings not to judge the whole department by the behavior of a few “overzealous” rangers. Maybe someone will receive a few weeks or months of “administrative leave,” i.e. paid vacation, a la Lois Lerner, but then he’ll be quietly reinstated when no one’s paying attention anymore. News outlets and bloggers will get a few days of content out of it when the hearings are being held and then that’ll be that. Nothing will change. No lessons will be learned. No scalps will be taken. That’s how it goes now. If anything, the White House will be more reluctant to fire someone over this than they were over the IRS scandal because ranger-enforced shutdown theater helps them spread the liberal message that closing the government is an unconscionable hardship.
No one’s going to pay for this. Even if it involves a ranger with a gun warning your grandma to get back in her hotel and away from the scenery.
The bus stopped along a road when a large herd of bison passed nearby, and seniors filed out to take photos. Almost immediately, an armed ranger came by and ordered them to get back in, saying they couldn’t “recreate.” The tour guide, who had paid a $300 fee the day before to bring the group into the park, argued that the seniors weren’t “recreating,” just taking photos.
“She responded and said, ‘Sir, you are recreating,’ and her tone became very aggressive,” Vaillancourt said.
The seniors quickly filed back onboard and the bus went to the Old Faithful Inn, the park’s premier lodge located adjacent to the park’s most famous site, Old Faithful geyser. That was as close as they could get to the famous site — barricades were erected around Old Faithful, and the seniors were locked inside the hotel, where armed rangers stayed at the door.
“They looked like Hulk Hogans, armed. They told us you can’t go outside,” she said. “Some of the Asians who were on the tour said, ‘Oh my God, are we under arrest?’ They felt like they were criminals.”
Supposedly, on their way out of the park, the tour guide wanted to pull over at a dude ranch inside the perimeter so that the seniors onboard could use the restrooms there — but couldn’t, because the park rangers told the dude ranch that its license would be revoked if they permitted it. So unbelievable is all this, even by the standards of NPS behavior over the past week, that I doubted whether it was true. But there’s corroborating evidence for at least some of it: The tour guide was interviewed by a different newspaper a few days ago and accused the Park Service of — wait for it — “Gestapo tactics.”
Hodgson said in a phone interview Monday that a ranger pulled up behind the bus and told him he would have to get everyone back on the bus — recreation in Yellowstone was not allowed.
“She told me you need to return to your hotel and stay there,” Hodgson said. “This is just Gestapo tactics. We paid a lot to get in. All these people wanted to do was take some pictures.”
Hodgson said the ranger told him he could be convicted of trespassing if he disobeyed.
“The national parks belong to the people,” he said. “This isn’t right.”
He didn’t mention armed rangers outside the hotel, but he was told that “his group would not be allowed to walk on any of the boardwalks located just outside their hotel, or visit any other geyser basins in the area.” All they could do, per Hodgson, was eat dinner in the dining room, which squares with the claim that rangers wouldn’t let guests inside leave until they were ready to leave the park altogether. “We’ve been told to make life as difficult for people as we can,” said an anonymous ranger to Wesley Pruden last week. Mission accomplished.
The only redress here, I think, is for tourists to sue. They’d probably lose, but it’ll be useful to know as a matter of law that national parks belong to the National Park Service and not to the public. I’m curious as can be to see a judge explain how trespassing laws don’t apply to park visitors who are engaged in “First Amendment activities” but do apply to tourist photography, which, as a somewhat artistic endeavor, would seem to fall pretty squarely within the First Amendment. At the very least, the bad press from the suit would do some much-deserved damage to the agency’s reputation. Which, it seems, they’re increasingly worried about:
Good news. Keep blogging the ugly stuff and maybe there’ll be more.
DBMA Martial Arts Forum / Martial Arts Topics / Re: Fire Hydrant: Howls from Crafty Dog, Rules of the Road, etc
on: October 07, 2013, 03:39:02 PM
I was talking to Frankie McRae today. He's working as the tech adviser on a new TV show. They told him they were sending two MMA fighters for him to train in gun skills. Turns out the two fighters were Forest Griffin and Stefan Bonner!
So, Frankie is teaching them "the Crafty Dog Stance" and FG says "You know Marc Denny? Tell him hello for me."
Even my son thinks this is cool
I heard Forrest Griffin interviewed on the radio a while ago. He sounded like a real sharp guy. Quick witted and good sense of humor.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Resistance
on: October 07, 2013, 03:29:31 PM
- The Daily Caller - http://dailycaller.com
Americans cross Obama’s parkway barriers
Posted By Neil Munro On 11:51 PM 10/06/2013 In Politics | No Comments
Many Americans crossed the barriers that were set this weekend by President Barack Obama’s deputies to block public access to the Potomac River from Virginia’s George Washington Memorial Parkway.
In many quiet acts of civil disobedience, Americans removed car barriers and cut police tape, or walked across barriers after parking on grass verges or in adjacent suburbs.
Once past the federal barriers, they were able to enjoy the bike paths, parkland and overlooks — on what singer Woody Guthrie described as “your land” — during the sunny, 80-degree weekend.
Still, the Obama administration blocked easy access to the river for many Americans, except for boat club members or property owners in the 22308 zip code, where riverside homes sell for at least $1.5 million.
The federal barriers were set along 20 miles of the parkway, starting at a government-built parking lot at President George Washington’s Mount Vernon home and continuing northwards to scenic overlooks in McLean, Va.
“I’ll take my chances,” said one man as he unloaded his two children on a grassy verge beside Roosevelt Island, just across from Washington’s Georgetown district.
But their day in the sun was darkened by a locked gate on the narrow bridge from the parkway to the island that celebrates President Teddy Roosevelt, who is widely regarded as the first presidential advocate for national parks.
Motorists who pushed through the barriers were applauded by other Americans.
OCTOBER 6, 2013 — Cars driving past barricades on the Washington Memorial Parkway (Neil Munro/TheDC)
“They’re right to do that,” a cyclist told The Daily Caller as motorists drove through an opened barrier at a private marina near the Belle Haven Country Club, located just south of Alexandria, Va.
Still, many citizens were stopped by the barriers. Some were blocked because they could not get their boat down the blockaded slips, and others because they were not willing to risk a parking ticket from patrolling police cars.
A family, complete with three kids and a speedboat, found themselves at a scenic overlook 300 feet above the northern end of the river because all the normal slips were blocked. They told TheDC that they would turn back south to search for an unguarded boat ramp.
OCTOBER 6, 2013 — Motorists ignore a government shutdown sign and park on a scenic overlook on the George Washington Memorial Parkway (Neil Munro/TheDC)
In several places, Americans gathered together to park in large groups around knocked-aside barriers.
But their respect for the law prevented them from puncturing the water-filled plastic barriers — at least during daylight — that are too heavy to be shoved aside.
GOP governors have also pushed back.
In Wisconsin, Gov. Scott Walker defied the federal edict, and cleared away barriers hindering Americans.
The state “has clarified areas where the federal procedures are over-reaching,” said an email from Cathy Stepp, secretary of the Wisconsin Department of Natural Resources.
In contrast, the administration’s progressive officials were unapologetic about their massive resistance to public access of the federal parks and memorials.
“Republicans are willing to vote funding to reopen national parks, museums, memorials, veterans’ payments and the D.C. government. Why is the White House against it?” one reporter asked White House press secretary Jay Carney on Wednesday.
“Because… It’s a gimmick and it is unsustainable and it’s not serious,” he insisted.
On Friday, Carney was unable to cite any actions taken by Obama to reduce the government’s blockade of parks or websites.
Jonathan Jarvis, the service director at the National Park Service, insisted Thursday he had no choice but to send officers out to close the parks, overlooks and parking lots because he had to furlough 21,000 park service officers.
“To meet the standard of protection for these places…I had to shut them down,” Jarvis declared in a C-Span “Washington Journal” interview.
Law enforcement officers were stationed around parks and monuments to deter Americans from walking on their government’s turf.
“We’ve been told to make life as difficult for people as we can,” a park ranger told The Washington Times. “It’s disgusting.”
Vice President Joe Biden used a Thursday tweet to applauded a park official who patrolled the perimeter of the World War II monument.
“’I’m proud of you,’ VP called to tell the Park Ranger who was chastised by a GOP Rep today at the WWII Memorial,” said the tweet.
The monument was built to applaud the Americans who destroyed Germany’s Nazi regime and Japan’s militaristic empire.
On the southern end of the riverside parkway, several small overlooks remained blocked by plastic fences, and the Civil War-era Fort Hunt Park was padlocked.
At Roosevelt Island, officials replaced at least one set of lightweight barriers that were visible Saturday with heavy, water-filled barriers that fully blocked the parking lot on Sunday.
On Sunday, just north of Ronald Reagan airport, a police officer parked himself in the road to deter more Americans from joining about 40 trucks, family vans and SUVs that were parked on the grass beside Gravelly Point field. The cop tried to chase away additional autos, but none of the autos parked on the verge showed parking tickets.
TheDC, however, did find a parking ticket on a car that was parked behind the ersatz gates of a government-owned lot at Mount Vernon, the home of the nation’s first American president.
Article printed from The Daily Caller: http://dailycaller.com
URL to article: http://dailycaller.com/2013/10/06/americans-cross-obamas-parkway-barriers/
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Why Uncle Sam is hoarding gold
on: October 07, 2013, 03:22:02 PM
Oct. 7, 2013, 7:56 a.m. EDT · CORRECTED
Why Uncle Sam is hoarding gold
The Treasury says it won’t tap its gold stockpile, even to avoid a default
By Brett Arends
CORRECTION: An earlier version of this story misidentified a holding owned by the Appleseed fund.
Grab any Wall Street trader in a bar, or any portfolio manager in his office, and he’s likely to tell you gold is finished.
It’s silly, nothing more than a shiny metal, a substance with little use and little real value, a “barbarous relic,” and the stuff of nothing more than superstition. Only a fool would own any gold in his portfolio.
After all, its value has plunged by $500 an ounce in the past year, and $100 just in the past month. Gold hasn’t even rallied during the budget crisis: So much for its “safe haven” status.
There is just one nagging problem with this story line. One group of people disagrees. And I am not talking about wacko gold bugs in Arizona (“the ex-husband state”) with tinfoil on their heads.
I am talking about the people running the United States Treasury.
They remain firm believers in gold. Big-time.
This week I asked them if they would consider selling some of the country’s gold reserves to pay the bills if the budget crisis escalates later this month.
Their response? Not a chance.
The Treasury has considered that option, among the many others, and rejected it. “Selling gold would undercut confidence in the U.S. both here and abroad,” a spokeswoman said, “and would be destabilizing to the world financial system.” She was quoting an official position laid out last year in a letter to Senator Orrin Hatch, but so far apparently little noticed on Wall Street.
The Treasury’s position is, in a word, extraordinary. We hear all this skepticism these days about gold. Yet the Treasury itself considers U.S. gold holdings to be a key element in maintaining confidence in the country’s soundness—and the stability of the international financial system.
I thought gold was a joke. Totally over. I thought no one cared about gold. But if that were really the case, why wouldn’t the government just dump the holdings for whatever it could get?
To get the full measure of that statement, it is worth reminding ourselves of where we are now. The government has already shut down and there is a non-trivial risk that in just over two weeks it may actually default on its debts. I’m not saying it’s likely, but I am saying the risk is real. To prevent that happening, Congress, which can’t even agree to keep open the Bunker Hill Monument for tourists, must agree to hike the debt ceiling. If it doesn’t, the federal government will quickly run out of money.
The Treasury has considered various scenarios and contingencies, officials say. They have concluded that delaying government payments across the board—from Social Security to debt interest — would be the least harmful approach.
Click to Play What do gold prices do during a shutdown?On the second day of the shutdown, the markets were relatively stable -- but what about gold? Heard on the Street editor Liam Denning joined MoneyBeat to discuss. Photo: AP.
In other words, according to the official position of the U.S. Treasury, the promises and commitments of the government, and its “full faith and credit,” are actually worth less than gold. They’d rather default than lose their bullion.
The federal government has about 8,100 metric tonnes of gold, held in places like Fort Knox. At current prices that’s worth about $340 billion. That would only keep the government going for about a month, which tells you how little gold we really have in relation to our commitments.
Governments in Europe, including those in Great Britain and Switzerland, have sold off some of their gold in the past (much of it near the bottom of the market 13 years ago).
Josh Strauss, co-manager of the Appleseed mutual fund (and a gold fan), calls the Treasury’s admission extraordinary. “With gold on the ropes this year, investors are increasingly questioning the intrinsic value of gold,” he says. “Given the craziness in D.C., it seems to me that investors should really be questioning the intrinsic value of paper dollars backed by feckless promises.”
Strauss’s fund has a big position in gold. He owns, and especially likes, the Central GoldTrust /quotes/zigman/27810/quotes/nls/gtu GTU +1.12% , a closed-end fund with gold in its vaults. The shares trade for 6% less than their net asset value, and because it is a stock your capital gains, if any, will be taxed at the lower rates levied on shares, rather than at the higher rates levied on collectibles such as gold.
I confess I am a gold agnostic—neither a confirmed skeptic, nor a true believer. I try to keep an open mind. (I do see some value in owning it, since in the past it has often tended to do well when other assets, such as stocks and bonds, have done badly.) But the Treasury’s comment is really remarkable. The Treasury suspects that if the government just sold its gold, all those “gold skeptics” who run the financial markets would panic.
What does that tell you?
/quotes/zigman/27810/quotes/nls/gtu Add to portfolio GTU Central GoldTrust US : U.S.: NYSE MKT $ 45.90 +0.51 +1.12% Volume: 49,458Oct. 7, 2013 3:45pP/E RatioN/ADividend YieldN/AMarket Cap$906.28 millionRev. per EmployeeN/A
Brett Arends is a MarketWatch columnist. Follow him on Twitter @BrettArends.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / An entitlement-driven disaster looms for America, yet Washington persists with
on: October 07, 2013, 03:09:46 PM
Niall Ferguson: The Shutdown Is a Sideshow. Debt Is the Threat
An entitlement-driven disaster looms for America, yet Washington persists with its game of Russian roulette..
By NIALL FERGUSON
In the words of a veteran investor, watching the U.S. bond market today is like sitting in a packed theater and smelling smoke. You look around for signs of other nervous sniffers. But everyone else seems oblivious.
Yes, the federal government shut down this week. Yes, we are just two weeks away from the point when the Treasury secretary says he will run out of cash if the debt ceiling isn't raised. Yes, bond king Bill Gross has been on TV warning that a default by the government would be "catastrophic." Yet the yield on a 10-year Treasury note has fallen slightly over the past month (though short-term T-bill rates ticked up this week).
Part of the reason people aren't rushing for the exits is that the comedy they are watching is so horribly fascinating. In his vain attempt to stop the Senate striking out the defunding of ObamaCare from the last version of the continuing resolution, freshman Sen. Ted Cruz managed to quote Doctor Seuss while re-enacting a scene from the classic movie "Mr. Smith Goes to Washington."
Meanwhile, President Obama has become the Hamlet of the West Wing: One minute he's for bombing Syria, the next he's not; one minute Larry Summers will succeed Ben Bernanke as chairman of the Federal Reserve, the next he won't; one minute the president is jetting off to Asia, the next he's not. To be in charge, or not to be in charge: that is indeed the question.
According to conventional wisdom, the key to what is going on is a Republican Party increasingly at the mercy of the tea party. I agree that it was politically inept to seek to block ObamaCare by these means. This is not the way to win back the White House and Senate. But responsibility also lies with the president, who has consistently failed to understand that a key function of the head of the executive branch is to twist the arms of legislators on both sides. It was not the tea party that shot down Mr. Summers's nomination as Fed chairman; it was Democrats like Sen. Elizabeth Warren, the new face of the American left.
Yet, entertaining as all this political drama may seem, the theater itself is indeed burning. For the fiscal position of the federal government is in fact much worse today than is commonly realized. As anyone can see who reads the most recent long-term budget outlook—published last month by the Congressional Budget Office, and almost entirely ignored by the media—the question is not if the United States will default but when and on which of its rapidly spiraling liabilities.
True, the federal deficit has fallen to about 4% of GDP this year from its 10% peak in 2009. The bad news is that, even as discretionary expenditure has been slashed, spending on entitlements has continued to rise—and will rise inexorably in the coming years, driving the deficit back up above 6% by 2038.
A very striking feature of the latest CBO report is how much worse it is than last year's. A year ago, the CBO's extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year's long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year.
As the CBO noted last month in its 2013 "Long-Term Budget Outlook," echoing the work of Harvard economists Carmen Reinhart and Ken Rogoff: "The increase in debt relative to the size of the economy, combined with an increase in marginal tax rates (the rates that would apply to an additional dollar of income), would reduce output and raise interest rates relative to the benchmark economic projections that CBO used in producing the extended baseline. Those economic differences would lead to lower federal revenues and higher interest payments. . . .
"At some point, investors would begin to doubt the government's willingness or ability to pay U.S. debt obligations, making it more difficult or more expensive for the government to borrow money. Moreover, even before that point was reached, the high and rising amount of debt that CBO projects under the extended baseline would have significant negative consequences for both the economy and the federal budget."
Just how negative becomes clear when one considers the full range of scenarios offered by CBO for the period from now until 2038. Only in three of 13 scenarios—two of which imagine politically highly unlikely spending cuts or tax hikes—does the debt shrink from its current level of 73% of GDP. In all the others it increases to between 77% and 190% of GDP. It should be noted that this last figure can reasonably be considered among the more likely of the scenarios, since it combines the alternative fiscal scenario, in which politicians in Washington behave as they have done in the past, raising spending more than taxation.
Only a fantasist can seriously believe "this is not a crisis." The fiscal arithmetic of excessive federal borrowing is nasty even when relatively optimistic assumptions are made about growth and interest rates. Currently, net interest payments on the federal debt are around 8% of revenues. But under the CBO's extended baseline scenario, that share could rise to 20% by 2026, 30% by 2049, and 40% by 2072. By 2088, the last date for which the CBO now offers projections, interest payments would—absent any changes in current policy—absorb just under half of all tax revenues. That is another way of saying that policy is unsustainable.
The question is what on earth can be done to prevent the debt explosion. The CBO has a clear answer: "ringing debt back down to 39 percent of GDP in 2038—as it was at the end of 2008—would require a combination of increases in revenues and cuts in noninterest spending (relative to current law) totaling 2 percent of GDP for the next 25 years. . . .
"If those changes came entirely from revenues, they would represent an increase of 11 percent relative to the amount of revenues projected for the 2014-2038 period; if the changes came entirely from spending, they would represent a cut of 10½ percent in noninterest spending from the amount projected for that period."
Anyone watching this week's political shenanigans in Washington will grasp at once the tiny probability of tax hikes or spending cuts on this scale.
It should now be clear that what we are watching in Washington is not a comedy but a game of Russian roulette with the federal government's creditworthiness. So long as the Federal Reserve continues with the policies of near-zero interest rates and quantitative easing, the gun will likely continue to fire blanks. After all, Fed purchases of Treasurys, if continued at their current level until the end of the year, will account for three quarters of new government borrowing.
But the mere prospect of a taper, beginning in late May, was already enough to raise long-term interest rates by more than 100 basis points. Fact (according to data in the latest "Economic Report of the President"): More than half the federal debt in public hands is held by foreigners. Fact: Just under a third of the debt has a maturity of less than a year.
Hey, does anyone else smell something burning?
Correction: Net interest payments on the federal debt are about 8% of revenues. The Oct. 5 op-ed "The Shutdown Is a Sideshow. Debt Is the Threat" misstated the payments as a percentage of GDP.
Mr. Ferguson's latest book is "The Great Degeneration: How Institutions Decay and Economies Die" (Penguin Press, 2013).
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Exclusive: Judicial Watch Files FOIA for Information Related to Closing of WWII
on: October 02, 2013, 12:01:31 PM
Exclusive: Judicial Watch Files FOIA for Information Related to Closing of WWII Memorial
October 2, 2013 - 9:48 am
Government watchdog Judicial Watch has filed a Freedom of Information Act request to get to the bottom of the National Park Service’s actions at the World War II Memorial in Washington this week. The NPS has barricaded the memorial and on Tuesday tried to prevent veterans from visiting the memorial, which has no amenities and is normally open to the public at all times.
The Judicial Watch FOIA request reads:
The National Park service has closed facilities that are either unmanned or take no federal funding, and says that the Obama administration ordered the shutdown. Anna Eberly, Managing Director of the Claude Moore Colonial Farm in Virginia, told Tatler that the NPS is renting the barricades that it is using to enforce the closures, an increase in the service’s operating costs at a time that the government is partially shut down.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Kotlikoff says Grannis is wrong about hyperinflation
on: October 02, 2013, 11:25:21 AM
Laurence Kotlikoff, Contributor
I cover fiscal policy, macro, banking, healthcare, etc.
9/28/2013 @ 4:33PM
Is Hyperinflation Just Around The Corner?
In his parting act, Federal Reserve Chairman Ben Bernanke has decided to continue printing some $85 billion per month (6 percent of GDP per year) and spend those dollars on government bonds and, in the process, keep interest rates low, stimulate investment, and reduce unemployment.
Trouble is, interest rates have generally been rising, investment remains very low, and unemployment remains very high.
Bernanke’s dangerous policy hasn’t worked and should be ended. Since 2007 the Fed has increased the economy’s basic supply of money (the monetary base) by a factor of four! That’s enough to sustain, over a relatively short period of time, a four-fold increase in prices. Having prices rise that much over even three years would spell hyperinflation.
And while Bernanke says this is all to keep down interest rates, there is a darker subtext here. When the Treasury prints bonds and sells them to the public for cash and the Fed prints cash and uses it to buy the newly printed bonds back from the public, the Treasury ends up with the extra cash, the public ends up with the same cash it had initially, and the Fed ends up with the new bonds.
Yes, the Treasury pays interest and principal to the Fed on the bonds, but the Fed hands that interest and principal back to the Treasury as profits earned by a government corporation, namely the Fed. So, the outcome of this shell game is no different from having the Treasury simply print money and spend it as it likes.
The fact that the Fed and Treasury dance this financial pas de deux shows how much they want to keep the public in the dark about what they are doing. And what they are doing, these days, is printing, out of thin air, 29 cents of every $1 being spent by the federal government.
I have heard one financial guru after another discuss Quantitative Easing and its impact on interest rates and the stock market, but I’ve heard no one make clear that close to 30 percent of federal spending is now being financed via the printing press.
That’s an unsustainable practice. It will come to an end once Wall Street starts to understand exactly how much money is being printed and that it’s not being printed simply to stimulate the economy, but rather to pay for the spending of a government that is completely broke — with long-term expenditures obligations that exceed its long-term tax revenues by $205 trillion!
This present value fiscal gap is based on the Congressional Budget Office’s just-released long-term Alternative Fiscal Scenario projection. Closing this fiscal gap would require a 57 percent immediate and permanent hike in all federal taxes — starting today!
When Wall Street wises up to our true fiscal condition (and, some, like Bill Gross already have), it will dump long-term bonds like hot potatoes. This will lead interest rates to jump and make people and banks very reluctant to hold money earning no return. In trying to swap their money for goods and services, the public will drive up prices.
As prices start to rise and fingers start pointing at the Fed for fueling the inflation, QE will be brought to an abrupt halt. At that point, Congress will have to come up with an extra 6 percent of GDP on a permanent basis either via huge tax hikes or huge spending cuts. Another option is simply to borrow the 6 percent. But this would raise the deficit, defined as the increase in Treasury bonds held by the public, from 4 to 10 percent of annual GDP if we take 2013 as the example. A 10 percent of GDP deficit would raise even more eyebrows on Wall Street and put further upward pressure on interest rates.
But why haven’t prices started rising already if there is so much money floating around? This year’s inflation rate is running at just 1.5 percent. There are three answers.
First, three quarters of the newly created money hasn’t made its way into the blood stream of the economy – into M1 – the money supply held by the public. Instead, the Fed is paying the banks interest not to lend out the money, but to hold it within the Fed in what are called excess reserves.
Since 2007, the Monetary Base – the amount of money the Fed’s printed – has risen by $2.7 trillion and excess reserves have risen by $2.1 trillion. Normally excess reserves would be close to zero. Hence, the banks are sitting on $2.1 trillion they can lend to the private sector at a moment’s notice. I.e., we’re looking at an gi-normous reservoir filling up with trillions of dollars whose dam can break at any time. Once interest rates rise, these excess reserves will be lent out.
The fed says they can keep the excess reserves from getting lose by paying higher interest on reserves. But this entails poring yet more money into the reservoir. And if interest rates go sufficiently high, the Fed will call this practice quits.
As excess reserves are released to the economic wild, we’ll see M1, which was $1.4 trillion in 2007 rise from its current value of $2.6 trillion to $5.7 trillion. Since prices, other things equal, are supposed to be proportional to M1, having M1 rise by 219 percent means that prices will rise by 219 percent.
But, and this is point two, other things aren’t equal. As interest rates and prices take off, money will become a hot potato. I.e., its velocity will rise. Having money move more rapidly through the economy – having faster money – is like having more money. Today, money has the slows; its velocity – the ratio GDP to M1 — is 6.6. Everybody’s happy to hold it because they aren’t losing much or any interest. But back in 2007, M1 was a warm potato with a velocity of 10.4.
If banks fully lend out their reserves and the velocity of money returns to 10.4, we’ll have enough M1, measured in effective units (adjusted for speed of circulation), to support a nominal GDP that’s 3.5 times larger than is now the case. I.e., we’ll have the wherewithal for almost a quadrupling of prices. But were prices to start moving rapidly higher, M1 would switch from being a warm to a hot potato. I.e., velocity would rise above 10.4, leading to yet faster money and higher inflation.
I hope you’re getting the point. Having addicted Congress and the Administration to the printing press, there is no easy exit strategy. Continuing on the current QE path spells even great risk of hyperinflation. But calling it quits requires much higher taxes, much lower spending, or much more net borrowing (with requisite future repayment) from the public. Yet weaning Uncle Sam from the printing press now is critical before his real need for a fix – paying for the Baby Boomers’ retirement benefits – kicks in.
The one caveat to this doom and gloom scenario is point three – increased domestic and global demand for dollars. The Great Recession put the fear of God into savers worldwide. And the fact that U.S. price level has risen since 2007 by only 15 percent whereas M1 has risen by 88 percent reflects a massive expansion of domestic and foreign demand for “safe” dollars. This is evidenced by the velocity of money falling from 10.4 to 6.6. People are now much more eager to hold and hold onto dollars than they were six years ago.
If this increased demand for dollars persists, let alone grows, inflation may remain low for quite a while. But our ability to get Americans and foreigners to hand over real goods and services in exchange for very few green pieces of paper is hardly guaranteed once everyone starts to understand the incredible rate at which Uncle Sam is printing and spending this paper. Once everyone gets it into their heads that prices are taking off, individual beliefs will become collective reality. This brings me to my bottom line: The more money the Fed prints, the more it risks everyone starting to expect and, consequently produce, hyperinflation.
Laurence Kotlikoff is Professor of Economics at Boston University and co-author of The Clash of Generation and author of Jimmy Stewart Is Dead.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: The greatest generation rises to fight tyranny once more
on: October 02, 2013, 11:00:39 AM
Why was the World War II Memorial barricaded?
Lawmakers on Capitol Hill do not seem any closer to an agreement that would end the government shutdown.
On Tuesday, when veterans came to the World War II Memorial only to discover it had been barricaded because of the shutdown, they moved the blockade, then continued on to pay their respects. But the memorial is a federal site in a public space. According to the National World War II Memorial website, "The memorial is operated by the National Park Service and is open to visitors 24 hours a day, seven days a week."
Why was there a need for barricades in the first place?
"Park Service did not want to barricade these, but unfortunately we have been directed, because of the lack of appropriations, to close all facilities and grounds," said National Mall and Memorial parks spokeswoman Carol Johnson. "I know that this is an open-air memorial, but we have people on staff who are CPR trained, (and) we want to make sure that we have maintenance crew to take care of any problems. What we're trying to do is protect this resource for future generations," said Johnson.
CNN's Erin McPike reports.**Hmmmm. So I guess all those Park Police officers aren't trained in CPR?
Politics, Religion, Science, Culture and Humanities / Politics & Religion / 164 Democrats Vote Against Funding Veterans' Benefits
on: October 02, 2013, 10:38:31 AM
164 Democrats Vote Against Funding Veterans' Benefits
HJ Res. 72
Vote summary: 264-164. Failed (required 2/3 majority).
This bill would have restored funding for American veterans' benefits. The 164 Democrats listed on this page don't think veterans' benefits are important enough to pay for. Click the tweet buttons to ask them why.
•Johnson, E. B.
•Lujan Grisham (NM)
•Luján, Ben Ray (NM)
•Sánchez, Linda T.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / The greatest generation rises to fight tyranny once more
on: October 02, 2013, 10:29:31 AM
Unreal: Park workers installing more barricades around WWII Memorial to keep vets out; Update: Vets enter Memorial
posted at 10:41 am on October 2, 2013 by Allahpundit
Not just barricades, either. My friends, it’s come to this:
I’m rushing this post out because, per Ed’s stellar round-up from earlier this morning, the Honor Flight vets are headed to the Memorial regardless. Members of Congress, among them Michele Bachmann, are already there, as are reporters of all stripes. If you use Twitter, I recommend following the Standard’s John McCormack, National Review’s Betsy Woodruff, and the Examiner’s Charlie Spiering, who took the photo I used for our front-page thumbnail of the feds actually deploying forklifts to set up gates around a memorial that’s open 24 hours a day with little supervision under normal circumstances. As I write this at a few minutes after 10:30 ET, Spiering is tweeting that the vets are scheduled to arrive within the next 15 minutes. Is your government really about to arrest 96-year-olds who fought at Guadalcanal because this bit of sub-moronic shutdown theater is too precious to them to forfeit? Stay tuned. It wouldn’t be the first own-goal they’ve scored because their pettiness overwhelmed their sense of optics.
By the way, the WWII Memorial isn’t the only one with a gate in front of it this morning. When McCormack strolled over to the World War I Memorial, he found this. No joke:
The sign reads, “Because of the federal government shutdown, this National Park Service area is closed, except for First Amendment activities.” So if you want to protest there, you’re good. If you want to quietly remember the dead, get off the damned lawn.
An exit question via Legal Insurrection while we wait for updates: How come the Lincoln Memorial isn’t open now if it was open “>during the 1995 shutdown?
Update: A Park Service spokesman says they were told to close the memorial by the Office of Management and Budget. Paging Darrell Issa: Time to find out who made the decision at OMB. And why.
Update: If you’re near a TV, you might want to turn on CNN. Tapper is there at the Memorial; if there’s some sort of confrontation, I assume they’ll cut to him live.
Update: The vets have arrived.
Dan Foster says, “This is President Obama’s Bonus Army.”
Update: Forced to choose between locking up elderly World War II heroes and letting them past the barricades, the Park Service bows to political reality:
Chad Pergram ✔ @ChadPergram
Source signals they are going to let the WWII vets and lawmakers into the WWII Memorial on the Mall
8:59 AM - 2 Oct 2013
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Ben Carson: ‘I had my first encounter with the IRS’ after challenging Obama
on: October 01, 2013, 07:05:41 PM
- The Daily Caller - http://dailycaller.com
Ben Carson: ‘I had my first encounter with the IRS’ after challenging Obama
Posted By Jeff Poor On 9:47 AM 10/01/2013 In Politics | No Comments
At an event in Birmingham, Ala. Monday night, former Johns Hopkins neurosurgeon Ben Carson revealed that he had received a visit from the Internal Revenue Service following his much-noted remarks at a National Prayer Breakfast earlier this year.
“I had my first encounter with the IRS this year, unsurprisingly after the prayer breakfast,” Carson told an audience that at the annual Business Council of Alabama Chairman’s Dinner, according to a report from Cliff Sims of the Montgomery, Ala.-based Yellowhammer News.
Carson’s February speech February made him a conservative darling for criticizing President Barack Obama’s 2010 health-care reform law, while Obama was sitting just a few feet away.
During the event, which also featured former Arkansas Gov. Mike Huckabee, Carson spoke about the potential presidential candidacy of former Secretary of State Hillary Clinton, U.S. relations with Russia and the Environmental Protection Agency.
(h/t Cliff Sims, Yellowhammer News)
Follow Jeff on Twitter
Article printed from The Daily Caller: http://dailycaller.com
URL to article: http://dailycaller.com/2013/10/01/ben-carson-i-had-my-first-encounter-with-the-irs-following-the-national-prayer-breakfast/
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Remember when the left was all about "civility"?
on: October 01, 2013, 07:03:03 PM
OCTOBER 1, 2013
Two Russians Walk Into a Parliamentary Crisis...
BY JULIA IOFFE @juliaioffe
What is a president in a presidential constitutional republic to do when faced with an intransigent, bull-headed faction among his people's representatives?
Well, Boris Yeltsin, Russia's first democratically elected president, was once faced with a similar situation exactly 20 years ago, in October 1993. The parliament, then called the Supreme Soviet, was increasingly against Yeltsin's neoliberal economic reforms (suggested to him by young Western advisors like Jeffrey Sachs). On one hand, these reforms freed up the old Soviet command economy. On the other, they drove the country into chaos and violence, and left tens of millions impoverished, their savings nullified by skyrocketing inflation. The parliament, dominated by old Soviet conservatives, was increasingly against these reforms and refused to confirm Yeltsin's key economic advisor. Yeltsin held a national referendum, a sort of national vote of confidence, which he won, and used it as a justification for what he did next.
Almost exactly 20 years ago, he dissolved parliament. The vice president and the speaker of the parliament dissolved Yeltsin's presidency, and holed up with their supporters in the parliament's headquarters, now known as "the White House."
Then Yeltsin did this to it.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Re: Israel, and its neighbors
on: October 01, 2013, 10:41:50 AM
Unfortunately not only is that true, but Team Obama made Israel's logistics MUCH harder by leaking the existence of a refueling deal with Azerbaijian back when Israel was planning to bust a move.
My understanding is that Iran's program is so spread out and so dug in that a strike short of a nuclear attack would but delay the program-- AND IN THE EYES OF THE WORLD JUSTIFY IRAN GOING NUKE AND GOING TO WAR AGAINST ISRAEL.
Exactly the box Buraq wanted to put Israel in.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / IRS scandal means bad news for Obama: Column
on: September 30, 2013, 07:14:23 PM
IRS scandal means bad news for Obama: Column
Glenn Harlan Reynolds 10:23 a.m. EDT September 30, 2013
Come 2014, the government's damaged brand will reflect poorly on president and his party.
(Photo: Al Behrman, AP)
Most Americans think the IRS broke the law by targeting Tea Party groups for harassment.
But only 17% think it is even somewhat likely that anyone will be charged.
The lesson for the country is that trust in the government is very low.
So last week, while most of the country was talking about football or fears of a government shutdown, Rasmussen released a poll that should worry everyone -- but especially incumbent Democrats in Congress. According to Rasmussen's survey, most Americans think the IRS broke the law by targeting Tea Party groups for harassment, but few expect it to be punished. Fifty-three percent think the IRS broke the law by targeting the Tea Party and other conservative groups like the voter-integrity outfit True The Vote; only 24% disagreed. But only 17% think it is even somewhat likely that anyone will be charged, while 74% think that criminal charges are unlikely.
COLUMN: Assault by civil forfeiture
So a majority of Americans think that government officials who exercise an important trust broke the law, but only a very small number think anything will be done to punish them.
There are a couple of lessons to draw from this. One is bad for the country in general, but the other is bad for congressional Democrats.
The lesson for the country is that trust in the government is very low. (In another Rasmussen poll, 70% think that government and big business often work together against consumers and investors. According to Gallup, trust in government is lower than during Watergate.) But it's worse than that.
Believing that government officials break the law is one thing; believing that they face no consequences when they're caught and it becomes public is another. Not only is this a sort of "broken windows" signal to other bureaucrats -- hey, you can break the law and get away with it -- but it's particularly damaging where the IRS is concerned.
America's tax system, despite the feared IRS audit, is fundamentally based on voluntary compliance. If everyone starts cheating, there aren't enough IRS agents to make a dent. Beyond taxes, that's true regarding compliance with the law in general. Moral legitimacy is what makes honest people obey the law even when they can get away with breaking it. Undermine that and you get a country like, say, Italy, where tax evasion is a national sport.
Meanwhile, there's another bit of bad news buried in that poll, this time for Democrats. The bad news is that a majority of Americans thinks the IRS broke the law even though the news media have consistently downplayed the scandal. But as the scandal has dragged on for months, word has filtered out anyway. Come 2014, the government's damaged brand will reflect poorly on members of the president's party, regardless of media efforts to protect them.
Beyond that, the Wall Street Journal's James Taranto has begun calling President Obama "President Asterisk," saying that IRS efforts to weaken his opposition in the run-up to the 2012 election devalue Obama's victory the way illegal steroid use devalues an athlete's record-book standing. Taranto writes that this puts Obama in a situation that is in some ways worse than Nixon after Watergate: "We now know that government corruption -- namely IRS persecution of dissenters -- was a factor in Obama's re-election.
To be sure, Obama himself has not, at least so far, been implicated in the IRS wrongdoing as Nixon ultimately was in Watergate. On the other hand, Nixon's re-election victory was so overwhelming that no one could plausibly argue Watergate was a necessary condition for it. The idea that Obama could not have won without an abusive IRS is entirely plausible."
Of course, the press hated Nixon, while it is still doing everything it can to protect Obama. But, as we see, word filters out. Stay tuned.
Glenn Harlan Reynolds is professor of law at the University of Tennessee and the author ofThe New School: How the Information Age Will Save American Education from Itself. He blogs at InstaPundit.com.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / The truth starts to sink in....
on: September 30, 2013, 07:08:04 PM
I'm sorry, but we have to talk about the barbarism of modern Islamist terrorism
By Brendan O'Neill
The aftermath of an Islamist bomb directed at Pakistani Shiites (Photo: AFP/Getty)
In Western news-making and opinion-forming circles, there’s a palpable reluctance to talk about the most noteworthy thing about modern Islamist violence: its barbarism, its graphic lack of moral restraint. This goes beyond the BBC's yellow reluctance to deploy the T-word – terrorism – in relation to the bloody assault on the Westgate shopping mall in Kenya at the weekend. Across the commentating board, people are sheepish about pointing out the historically unique lunacy of Islamist violence and its utter detachment from any recognisable moral universe or human values. We have to talk about this barbarism; we have to appreciate how new and unusual it is, how different it is even from the terrorism of the 1970s or of the early twentieth century. We owe it to the victims of these assaults, and to the principle of honest and frank political debate, to face up to the unhinged, morally unanchored nature of Islamist violence in the 21st century.
Maybe it’s because we have become so inured to Islamist terrorism in the 12 years since 9/11 that even something like the blowing-up of 85 Christians outside a church in Pakistan no longer shocks us or even makes it on to many newspaper front pages. But consider what happened: two men strapped with explosives walked into a group of men, women and children who were queuing for food and blew up themselves and the innocents gathered around them. Who does that? How far must a person have drifted from any basic system of moral values to behave in such an unrestrained and wicked fashion? Yet the Guardian tells us it is “moral masturbation” to express outrage over this attack, and it would be better to give into a “sober recognition that there are many bad things we can’t as a matter of fact do much about”. This is a demand that we further acclimatise to the peculiar and perverse bloody Islamist attacks around the world, shrug our shoulders, put away our moral compasses, and say: “Ah well, this kind of thing happens.”
Or consider the attack on Westgate in Kenya, where both the old and the young, black and white, male and female were targeted. With no clear stated aims from the people who carried the attack out, and no logic to their strange and brutal behaviour, Westgate had more in common with those mass mall and school shootings that are occasionally carried out by disturbed people in the West than it did with the political violence of yesteryear. And yet still observers avoid using the T-word or the M-word (murder) to describe what happened there, and instead attach all sorts of made-up, see-through political theories to this rampage, giving what was effectively a terror tantrum executed by morally unrestrained Islamists the respectability of being a political protest of some breed.
Time and again, one reads about Islamist attacks that seem to defy not only the most basic of humanity’s moral strictures but also political and even guerrilla logic. Consider the hundreds of suicide attacks that have taken place in Iraq in recent years, a great number of them against ordinary Iraqis, often children. Western apologists for this wave of weird violence, which they call “resistance”, claim it is about fighting against the Western forces which were occupying Iraq in the wake of the 2003 invasion. If so, it’s the first “resistance” in history whose prime targets have been civilians rather than security forces, and which has failed to put forward any kind of political programme that its violence is allegedly designed to achieve. Even experts in counterinsurgency have found themselves perplexed by the numerous nameless suicide assaults on massive numbers of civilians in post-war Iraq, and the fact that these violent actors, unlike the vast majority of violent political actors in history, have “developed no alternative government or political wing and displayed no intention of amassing territory to govern”. One Iraqi attack has stuck in my mind for seven years. In 2006 a female suicide bomber blew herself up among families – including many mothers and their offspring – who were queuing up for kerosene. Can you imagine what happened? A terrible glimpse was offered by this line in a Washington Post report on 24 September 2006: “Two pre-teen girls embraced each other as they burned to death.”
What motivates this perversity? What are its origins? Unwilling, or perhaps unable, to face up to the newness of this unrestrained, aim-free, civilian-targeting violence, Western observers do all sorts of moral contortions in an effort to present such violence as run-of-the-mill or even possibly a justifiable response to Western militarism. Some say, “Well, America kills women and children too, in its drone attacks”, wilfully overlooking the fact such people are not the targets of America’s military interventions – and I say that as someone who has opposed every American venture overseas of the past 20 years. If you cannot see the difference between a drone strike that goes wrong and kills an entire family and a man who crashes his car into the middle of a group of children accepting sweets from a US soldier and them blows himself and them up – as happened in Iraq in 2005 – then there is something wrong with you. Other observers say that Islamists, particularly in Iraq and Afghanistan, but also the individuals who attacked London and New York, are fighting against Western imperialism in Muslim lands. But that doesn’t add up. How does blowing up Iraqi children represent a strike against American militarism? How is detonating a bomb on the London Underground a stab at the Foreign Office? It is ridiculous, and more than a little immoral, to try to dress up nihilistic assaults designed merely to kill as many ordinary people as possible as some kind of principled political violence.
We have a tendency to overlook the newness of modern Islamic terrorism, how recent is this emergence of a totally suicidal violence that revels in causing as many causalities as possible. Yes, terrorism has existed throughout the modern era, but not like this. Consider the newness of suicide attacks, of terrorists who destroy themselves as well as their surroundings and fellow citizens. In the 1980s and 1990s, there were an average of one or two suicide attacks a year. Across the whole world. Since the early and mid-2000s there have been around 300 or 400 suicide attacks a year. In 2006 there were more suicide attacks around the world than had taken place in the entire 20 years previous. Terrorists’ focus on killing civilians – the more the better – is also new. If you look at the 20 bloodiest terrorist attacks in human history, measured by the number of causalities they caused, you’ll see something remarkable: 14 of them – 14 – took place in the 1990s and 2000s. So in terms of mass death and injury, those terrorist eras of the 1970s and 80s, and also earlier outbursts of anarchist terrorism, pale into insignificance when compared with the new, Islamist-leaning terrorism that has emerged in recent years.
What we have today, uniquely in human history, is a terrorism that seems myopically focused on killing as many people as possible and which has no clear political goals and no stated territorial aims. The question is, why? It is not moral masturbation to ask this question or to point out the peculiarity and perversity of modern Islamist violence. My penny’s worth is that this terrorism speaks to a profound crisis of politics and of morality. Where earlier terrorist groups were restrained both by their desire to appear as rational political actors with a clear goal in mind and by basic moral rules of human behaviour – meaning their violence was often bloody, yes, but rarely focused narrowly on committing mass murder – today’s Islamist terrorists appear to float free of normal political rules and moral compunctions. This is what is so infuriating about the BBC’s refusal to call these groups terrorists – because if anything, and historically speaking, even the term terrorist might be too good for them.
Politics, Religion, Science, Culture and Humanities / Politics & Religion / Debt and deficits impoverish us in ways we can only begin to measure.
on: September 30, 2013, 06:58:37 PM
NATIONAL REVIEW ONLINE www.nationalreview.com
September 18, 2013 4:00 AM
The Price of Politics
Debt and deficits impoverish us in ways we can only begin to measure.
By Kevin D. Williamson
The headline numbers from the Congressional Budget Office’s newest debt and deficit estimates: Publicly held debt will be at 100 percent of GDP in 25 years, driven by spending on health care and Social Security that will double over the next quarter century. In spite of the fact that taxes as a share of GDP will be higher than their historical average, the debt will continue to grow — and interest payments on that debt will more than double from their current levels.
That’s the best-case scenario.
The more realistic outcome is that each of those measures of debt and spending as a share of GDP will in fact be considerably worse, because our GDP will grow more slowly. We have entered the realm of the vicious circle: Debt and deficits will slow down economic growth, and slower economic growth will make our debt and deficits worse.
Our growing debt slows down economic growth by sucking up capital that could have been used for productive investments. Today’s investors pay higher taxes to fund yesterday’s spending — at the expense of tomorrow’s workers, taxpayers, and entrepreneurs. As the CBO puts it:
The increase in debt relative to the size of the economy, combined with an increase in marginal tax rates (the rates that would apply to an additional dollar of income), would reduce output and raise interest rates relative to the benchmark economic projections that CBO used in producing the extended baseline. Those economic differences would lead to lower federal revenues and higher interest payments. . . . Increased borrowing by the federal government would eventually reduce private investment in productive capital, because the portion of total savings used to buy government securities would not be available to finance private investment. The result would be a smaller stock of capital and lower output and income in the long run than would otherwise be the case.
The cost of government spending isn’t just the total in the column marked “total disbursements” on the great Washington cash-flow statement. It is that plus the economic growth forgone as a result of that spending.
The CBO, to its credit, has attempted to get a handle on how heavily that growing debt will weigh upon economic activity in the next 25 years, and the answer is worrisome: Taking into account the economic effect of those deficits, instead of our debt hitting 100 percent of GDP in 25 years, CBO estimates that it will hit something closer to 200 percent of GDP — or 250 percent under the least sunny scenario. (There are even less-sunny scenarios, but the CBO does not believe that it can model them reliably.) Note here that these estimates also assume that the sequester and other deficit-control measures remain in place, which would consequently mean that spending on everything outside of Medicare, Medicaid, Social Security, and debt service — everything else the government does — will be reduced far below current levels, in fact reverting to pre–World War II levels as a share of GDP. That is unlikely to be the case. Assume, then, that those spending and debt numbers look worse to the extent that the ladies and gentlemen in Washington lack the brass to resist demands for more domestic spending — and more military spending, too. The loudest and most insistent critics of the sequester have been defense contractors and the cluster of politicians in Maryland and Northern Virginia most sensitive to their complaints.
This is not just a balance-sheet problem; it is a problem of values and a problem of philosophy. On the one hand, we have the traditional conservative view that the role of government is to protect property and enforce contracts. The traditional antagonist to this view has been socialism, and in a sense it still is, though the old-fashioned Marxist analysis has been supplanted by what we might call the “Hey, the government invented the Internet!” school of economic analysis.
The Left has of late been atwitter about a new and energetic expression of that banal idea in a book called “The Entrepreneurial State,” written by Professor Mariana Mazzucato, a scholar in the field of technology policy at the University of Sussex. Professor Mazzucato’s argument is not really a matter of technology policy at all but a moral argument, and a poor one. Because government has made economic interventions in various ways in the past (e.g., through military research that has supported advances in things like smart phones and pharmaceuticals), it is immoral for businesses to look to minimize their tax payments or otherwise resist political control of their capital, and it is immoral — not merely mistaken, but immoral — to look to entrepreneurs, venture capitalists, and the like as the main drivers of economic innovation. Professor Mazzacuto writes:
In this era of obsession with reducing public debt — and the size of the state more generally — it is vital to dispel the myth that the public sector will be less innovative than the private sector. Otherwise, the state’s ability to continue to play its enterprising role will be weakened. Stories about how progress is led by entrepreneurs and venture capitalists have aided lobbyists for the U.S. venture capital industry in negotiating lower capital gains and corporate income taxes — hurting the ability of the state to refill its innovation fund.
In support of her claim that the state is an effective entrepreneur, Professor Mazzucato cites the government’s role in developing what we now know as the Internet, its $500,000 investment in Apple through a small-business program, the CIA’s financial sponsorship of GPS technology, etc. This is a classic example of single-entry bookkeeping: Every government intervention that has some connection, however tenuous, with a profitable product in current use is listed on the credit side of the entrepreneur-state’s ledger. Nothing is listed on the debit side. How many Solyndras do we have for every $500,000 handout to Apple? How many Fannie Maes and housing bubbles for every GPS or nascent Internet? Do not look for Professor Mazzucato and those of her kidney to answer that question, or even to acknowledge it in any serious way. But past successes in state entrepreneurship can justify future adventures only to the extent that past efforts have been on balance successful. That is a difficult case to make.
And the debit side has to include much more than such obvious disasters as Solyndra. The government does support pharmaceutical and medical research in many ways — but how many potentially useful pharmaceuticals and medical products have been kept off the market by the federal regulatory apparatus and the enormous costs it imposes on effective and defective products alike? (And how much damage has been done by the FDA’s incompetent policing of defective products that do reach the market?) How many businesses have not been started, and how much innovation forgone, because of the state’s rapacious appetite for capital? For a sense of scale, consider that, as of October 2011, the world’s largest hedge-fund company was Bridgewater Associates of Westport, Conn., with $77.6 billion under management. That total is well less than Medicare loses to fraud year in and year out. You’d have to combine the assets of the three largest private-equity firms to match what Medicare loses to fraud in a typical year, whereas the holdings of venture-capital titans such as Andreessen Horowitz are hardly even rounding errors on that amount.
Would you invest with a firm with that record?
Government is what government does, and what government does is what government spends. Our government is a corrupt HMO with an underfunded pension plan attached, and a few aircraft carriers in tow. Contra Professor Mazzucato, the confiscatory taxes the federal government wishes to impose upon Apple et al. are not being used to replenish any such “innovation fund” as may exist in her imagination, but to prop up the corrupt, wasteful, and destructive programs that make up the great majority of its spending. Federal support for basic science research is pretty low on the list of things that small-government conservatives are worried about, and George Will is not entirely misguided in his admiration for the National Institutes of Health. But the neo-Nehruvian dream of the state as main entrepreneur cannot intellectually survive even the most modest attempt to balance benefits against costs.
As the CBO sees it, the economic weight of the deficits we’re expected to add just in the next 25 years is enough to bring the national debt from 100 percent of GDP to 200 or 250 percent of GDP, i.e., from paralyzing to catastrophic. The deficits we’ve run for the last 25 years have imposed costs of their own. That the costs mainly manifest themselves negatively — in the form of businesses that don’t exist, profits that aren’t collected, and help that is not wanted — does not make them any less real, or less tragic. In the long run, the deficit is as much about whether you have a decent job or die from diabetes complications as it is about figures in CBO estimates. The price may not always be obvious, but you pay it every day.
— Kevin D. Williamson is roving correspondent for National Review.