Saturday, February 13, 2010

I don't believe the latest unemployment numbers - and neither should you

I had e-mailed the gist of the following to a couple of friends last Sunday, but I hadn't made a blog post about it until now. Supposedly the U.S. unemployment rate fell from 10.0% in December to 9.7% in January. I didn't and still don't believe it for a second, and anybody who swallowed that guff just doesn't understand how much a monthly drop of 0.3 percentage points really is. It's huge.

I couldn't remember an unemployment drop of that magnitude in recent years. Fortunately, the Bureau of Labor Statistics maintains data going back to 1948. So that you can see how often the U.S. economy sees this kind of drop, I created my own spreadsheet with month-by-month changes on the side, marking drops of 0.3 percentage points or greater.

Such a drop is not unknown, but it hasn't been seen in twelve years (and 1998 was of course right in the middle of red-hot economic expansion). So as much as I'd like to think the U.S. economic situation is improving, I don't buy the feds' final number. The data has been cherry-picked, with the government economists using the household survey while ignoring the payroll survey that shows a net of 20K non-farm jobs lost in December.

Riddle me this, Batman: how can 20K jobs be lost, yet unemployment goes down? Are liberals going to excuse it with the same "people giving up and leaving the labor force" that they used to criticize Bush?

Like I've said before, consider the size of numbers first before accepting them as truth. We're also dealing with the same Obama administration so desperate for good news that it initially projected 3Q 2009 GDP as increasing 3.5% on an annualized basis, only to make an official estimate of 2.8%. And even that was very, very quietly revised to 2.2% for the final number.

Thursday, February 11, 2010

Those wonderful Saudi allies against terror

Like the French in war, the Saudis there when they need you. They couldn't wait for us to send over our military after Saddam's 1990 invasion of Kuwait. When it comes to intelligence operations, well, there's the old saying: "With friends like these..."

From the FCPA Blog:
The case began six years ago with allegations that BAE secretly paid $2 billion to Prince Bandar bin Sultan -- Saudi Arabia's former ambassador to Washington -- in return for inside help selling Typhoon jet fighters to the Saudi government. The SFO opened an investigation but was forced to drop it in December 2006 -- just as investigators were closing in on evidence about money transfers through Switzerland. The SFO later said Saudi Arabia had threatened to end all anti-terrorism cooperation with the U.K. unless the Blair government pulled the plug on the investigation.

"Olympic Village: Athletes Impressed, Taxpayers Angry"

That title alone is all you need to read to understand the nature of the state, but here are the particulars:
Paid for, thank you very much, by the taxpayers of Vancouver. More than any other project in recent Olympic history, the $1 billion residential complex represents the risks that urban governments face when trying to host one of the world's biggest parties. The city planned to invest about $47 million in the project back in 2006. However, cost overruns and the recession forced Vancouver to step in and bail out the private developers who were charged with financing the project. The city avoided the humiliation of welcoming the world with a half-built Olympic Village, but at a great price: in early 2009, new Vancouver mayor Gregor Robertson declared that taxpayers were "on the hook" for the $1 billion project. "What ended up happening was that the city became a bank for private-sector development," says Mark Cutler, director of Olympic Village Development for the Vancouver Organizing Committee, the body that is operating the complex during the Games. (See what becomes of Olympic stadiums.)
"Bank"? A real bank doesn't want to lend if it thinks it won't get repaid. However, taxpayers as a "bank" fits with the denouement of the movie "The Night Stalker": toward the end, Kolchak finds a victim that the vampire was keeping alive. "His own private blood bank."

Pay very close attention: this is how the state invariably works. It doesn't want to kill you, at least not until you can be replaced. Remember what St. Frédéric taught us: "The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."

When Salt Lake City began a second Olympics bid in the late 1980s, the contemptible Norm Bangerter, Utah's governor at the time, had no problem turning state taxpayers into human collateral. It was then that I learned that modern Olympics bids mean that developers get an implicit guarantee from politicians that taxpayers will pick up the tab for "cost overruns." What I didn't understand then is that when the state makes you pay for something against your will, you are most certainly human collateral: it isn't just your property being taken (or being promised by someone else to yet someone else), it's your very life being stolen, because you will never get back those moments you spent to acquire that property.

Those who don't understand that morality, or refuse to see it, should still be able to see the practical question: what possible motive do the organizers, developers and other Olympic affiliates have, then, to keep costs under control?

Robert Barney, director of the International Centre for Olympic Studies at the University of Western Ontario, has flatly said, "There has never been an Olympic Games that has made a profit...including federal allotments, municipal allotments, provincial or state allotments, it's always been that a debt has to be paid somewhere." His co-director, Kevin Walmsley, has said, "The Olympic Games are not a profit generator and never have been. What is always consistent is, there are always cost overruns." The facts prove them correct. Forget the lies that politicians, Olympics officials and developers feed us. Their accounting methods in the private sector would land people in jail for fraud.

I commented last October over at Alarming News:
Olympics are corporate welfare. Any infrastructure won't be built based on what actually people want and need, but on politics. If it's done in a free market, then businesses and "organizers" would be putting up their own money, and nobody would be forced into it. The reality, though, is that taxpayers are always implicitly put on the hook for any "cost overruns." They'll share in the debt, but not the profits.

Poor Rio. I hate to say "Better it happen to them than us," but how else can you put it?

Jamie, I've known enough to oppose Olympics since I was 12 years old, when I lived in Salt Lake City during the start of its ill-fated quest. No modern Olympics has ever made a profit, once all costs are taken into account. Check here:

MONTREAL, 1976: Debt: >1 billion (globe and mail;
LAKE PLACID, 1980: Debt: $11 million
CALGARY, 1988: Debt: $910 million
BARCELONA, 1992: Debt: US$1.4 billion
SYDNEY, 2000: Games billed as self-financing by politicians were a $2.3-billion loss (Auditor General New South Wales Report on Sydney (2000) Olympics)
The same link notes that:
Officially, Atlanta made US$10 million, but that excludes the US$1 billion taxpayers spent on infrastructure.

Utah tax revenues post-Olympics have fallen so far short of predictions that the state is facing a US$155 million shortfall, has slashed spending, dipped into emergency funding, and may have to order more employee layoffs.,1249,400008943,00.html
It's a very simple point of logic: if hosting an Olympics is such a great moneymaker for developers and city businesses alike, then why are taxpayers needed to guarantee it?

Bastiat wouldn't need to know anything else about our modern world to tell us the simple answer. He would reply, "Developers already know from past Olympics that they can't do it without taxpayers, whether to guarantee the debt or to pay for infrastructure. Do you not see it also?" The developers are just a modern form of protectionist, whom Bastiat described as petitioning to the government, "Thus, since everyone else uses the law for his own profit, we also would like to use the law for our own profit. We demand from the law the right to relief, which is the poor man's plunder."

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"A Democratic policy of businesslike retrenchment will go far to roll back the tidal wave that has overwhelmed the party."

The title is from the end of an op-ed in the New York Times. I'm absolutely serious.

The New York Times in 1894, that is.

A century before the failed "luxury tax" of 1990 and today's MTA shortfalls, the income tax was presented as guaranteed revenue by those whose lives were based on redistribution (giving or receiving), and you didn't have to be a proponent of the state to be skeptical of how much a tax could really produce.

Wednesday, February 10, 2010

"I have successfully privatized world peace"

For just this exchange alone, the Iron Man sequel should be incredible. A clip from the trailer:

The Senator: Our priority here is to have you turn over the Iron Man weapon to the American people.

Tony Stark: Well, you can forget it. We're safe. America is secure. You want my property? You can't have it! But I did you a big favor! I have successfully privatized world peace.

Who doesn't, who can't understand the magnificence of Stark's reply? It's his property, and to hell with tin-plated gods who demand it on behalf of "the people." And even though every other human on the planet would be free-riding, Stark was still willing to use his property to achieve world peace -- and more successfully than the state, he pointed out.

Saturday, February 06, 2010

Once again we see liberals' "fiscal responsibility"

Some schmuck, a Democrat, campaigning for local office was touting himself on the local news as fighting for government that's more transparent, more responsible, more accountable. As one example, he fought an 8.9 percent tax increase down to...8 percent. Yeah.

On a national level, the Democrat are again demonstrating their commitment to "fiscal responsibility." That is to say, "fiscal responsibility," as in all cases with government, without exception, means that the government spends, and "we the taxpayers" are given the responsibility of paying for it. Republicans were more than bad enough, raising the national debt "ceiling" whenever they needed more money to spend, and they were in no way hindered by Democrats who were only too eager to join in the frenzy -- including then-Senator Obama.

The House just voted to raise the national debt ceiling by $1.9 trillion to a nearly inconceivable $14.3 trillion. The Senate already passed it, so it's now ready for Obama to sign into law. Since 1917, federal law has set a "debt ceiling" for Congress, which is simply amended by new legislation. Of what use is a restriction when the entity being restricted is the one setting the rule? The analogy "Dad, I need to push my curfew back to 3 a.m." isn't quite right, because that phrasing is one of seeking permission. The federal government's effective tone is "Dad, I'm pushing back my curfew."

The previous increase was via H.R.4314 ("To permit continued financing of Government operations."), sponsored by the execrable Charlie Rangel. It was passed by Congress last December 24th and quietly signed by Obama on the 28th. It was largely ignored by the mainstream media, as was the fact that it was far from the first time Obama broke his campaign promise to wait five days before signing bills, so "the people" can view it. While mainstream news bombarded us with "health care reform" twaddle, H.R.4314 quietly raised the debt ceiling from $12.104 trillion to $12.394 trillion. Democrats were originally seeking $1.8 trillion, so how "fiscally responsible" that was! And "merely" a few hundred billion dollars is no problem, right? The Federal Reserve can always create new money to buy more Treasury bonds.

There's also the nonsense of "PAYGO," that supposedly the feds will be restricted to spending money only as it's coming in: any spending increases must be balanced by spending cuts elsewhere, or increases. And which do you suppose will happen?

We should not be surprised at any of these lies being fed to us. This is the age where Obama can say with a straight face that he'll use TARP money, by definition borrowed money, to reduce our debt. That never came to pass, of course, and quite the opposite: Obama recently abandoned that idea and wants to lend $30 billion of TARP money to small businesses.

So much for your promises
They died the day you let me go even before you were inaugurated

Even more apropos words are later on, for every idiot who thought Obama could de:

Woke up to reality
And found the future not so bright
I dreamt the impossible
That maybe things could work out right
I thought it was you who would do me no wrong
And now you've given me, given me
Nothing but shattered dreams, shattered dreams
Feel like I could run away, run away
From this empty heart

Lending TARP money is utterly irrational. (It's more importantly immoral because taxpayers will be forced to repay the borrowed money that they didn't want lent out, otherwise they'd be lending it themselves without government prodding them, but that's a subject for another post). As I recently blogged, irrationality with other people's money is because it's other people's money. "Rational" does not mean the decision is always the correct one, but it means the decision was made using a logical, methodical process to avoid systematic errors. Paraphrasing Milton Friedman, government is spending Other People's Money on yet other people, so why should any care be taken how much is spent and on what? The private sector doesn't want to lend to these small businesses for a very good reason: lenders are afraid of not being paid back.

Some time ago, a store owner I know lamented that his credit line was cut to a third of what it was. He's a nice guy, but "nice" doesn't guarantee sales, and his particular business is very dependent on people's extra income to buy non-essentials. Thus it's perfectly understandable that his bank decided not to trust him with a high debt limit. It started questioning his very business model of recycled debt. In a speech last year, Obama claimed that the federal government needed to stimulate lending so that companies can meet payrolls. Ask yourself: how can any sustainable business survive on the idea of perpetual borrowing to meet its obligations? That's understandable for the first few years while it's being established, but not continually. It defies all business sense, but it fits with the idea of government spending being irrational.

Of course, the real answer is for government to stop taxing businesses, which would then not have to worry about borrowing money, but heaven forbid that anyone should keep his own property.

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Wednesday, February 03, 2010

Because as I've said, liberals deserve no mercy

Work for the last several weeks has been exceptionally busy, but I've been around on other blogs. Check this for the latest from a cowardly, lying troll who departed from here as quickly as he came.

He can never answer anything straight-on. "The Almighty says, don't change the subject: just answer the fookin' question."