Learning from Dogs

Christina Romer

Christina Romer

I don’t know Ms. Romer personally but I certainly know her work both in and out of the White House. I can only hope that the inconsistency between her work as a truth-seeking academic and as an Obama apologist finally got to her and is, at least in part, one of the reasons she resigned as chair of the White House Council of Economic Advisers.

It will be very interesting to see how her writings progress from here.

by Sherry Jarrell

Alice in Wonderland?

Does anyone else see how perverted this story is?  A company which is 60% owned by the U.S. Treasury, in other words, 60% owned by taxpayers — not voluntary shareholders, but TAXPAYERS, has hired a private investment banking company to take the company public.

That is, to be sold to public stockholders.  For a profit.  Which is going to be distributed to whom?  The government.  Who took the company over by edict, essentially by force, ignoring lawfully binding financial contracts in the process.  Oh, yes, technically G.M. went through a “banktuptcy,” but when one of the two involved parties is the federal government — the one who makes up the rules of the game — then it isn’t a game anymore.  It’s “do it, or else!”

GM Headquarters

Absolutely unbelievable.  This IPO should not be happening.  The bailout should not have happened. None of this should have happened.  If the company cannot generate a profit in the marketplace, then it should go bankrupt and its resources freed up to be used where they are most valued by the marketplace.

by Sherry Jarrell

Greeks taking farce to new heights

Athens

Well, Ancient Greeks used to have tragedies; modern ones are better at farce, and so the “Shall we bung Greece billions of taxpayers’ money or not” farce rumbles on ….

It seems that the rising cost of borrowing for Greeks plus various warnings from people like George Soros about the possible collapse of the euro have pushed the EU (and in particular Germany) down a path they would have preferred not to go.

A vast loan at 5% has been offered, which is substantially below what the Greeks were having to pay before. So, crisis over? They can sleep well in Brussels again?

Errrmmmm …… hands up those who think Greece will ever be able to repay this money? Oh, at the time of writing (Monday 12th April) they haven’t yet ASKED for the money …. it really IS a farce rather than a tragedy, isn’t it?

Is there anyone on the planet who thinks they WON’T have to take the money? That they can get out of this mess WITHOUT it? No, nobody, except perhaps (as I speak) the Greek government itself. Well, they got the country into this humungous shambles in the first place so you’d hardly expect them to know what to do about getting out of it. This of course is in sharp contrast to the British government, which claims it is the ONLY party that can get out of the mess it itself created.

The reaction of German and British taxpayers to the bailing out of Greece (even though technically speaking it hasn’t yet occurred) is not yet clear ……. Neither is that of the other group of PIGS (Portugal, Italy and Spain). Incidentally, I am not sure how close the UK is to becoming a member of this rather grisly club, but as the country is still borrowing vast amounts at every tick of the clock it can’t be far off qualifying for full membership.

I did see a calculation this morning that the British taxpayer (I refuse to say government; all they do is pass on OUR money) will have to cough up around £600 million to help save Greece.

Of course, in return the Greeks will immediately start working as long and hard as we do, collecting taxes as efficiently as we do and avoiding corruption as well as we do. Yes, I am reporting from cloud-cuckoo land.

Well, we seem to be around Act III, Scene I in this farce, so there is plenty more entertainment yet to come, no doubt some of it tragic.

Today’s quiz question: What have lazy, corrupt, inefficient little countries in common with large, obscenely-rich banks? Answer -> They can’t be allowed to fail and some poor, hard-working mutt somewhere is going to have to bail them out, not that he’ll have any choice in the matter, this all being decided by the Great and Good (and Rich) in some posh office somewhere far away.

What you once couldn’t have made up now seems an almost daily occurrence.

By Chris Snuggs

Thomas Friedman of the Intl Herald Tribune

“Son, your ego’s writing checks your body can’t cash.”

Well, this may be old hat for specialists but it surprised me. Is the same true for Britain? In either case, as Friedman says, it suggests we should explore more forcefully the ways we could aid business startups.

I always find Thomas Friedman excellent value for the time invested in reading him! See here:

“Here’s my fun fact for the day, provided courtesy of Robert Litan, who directs research at the Kauffman Foundation, which specializes in promoting innovation in America: “Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less,” said Litan. ‘That is about 40 million jobs. That means the established firms created no new net jobs during that period.’”

And if you want to know where the opening quote comes from, read the Friedman article!

By Chris Snuggs

A Guest post by Patrice Ayme

Part One ended saying:

The euro, long in planning by some European institutions, was introduced minimally, namely without the governmental apparatus generally associated to a currency. This is the way Europeans have found to progress peacefully towards greater harmony: do what is necessary, and nothing more than that, and do it with total consensus.

Everybody knew that a currency without a government to create and anchor it had never happened before, and was unlikely to endure.

The European Union

Part Two continues

That fit the European federalists just right, and could not have escaped the understanding of Paris and Berlin. As it turned out, the PIIGS’ crisis is putting back Paris and Berlin, the historical engine of Europe, back on top, and this, for an excellent reason.

“PIIGS” stand for Portugal Ireland Iceland Greece Spain. All of them ran bubble economies, partially propelled by taxes from the richest European countries (including France and Germany). It became ridiculous as, for example, Ireland was getting European subsidies while the Irish were already way richer than those subsidizing them. (OK Iceland is not in the EU, yet, but it begged to enter the Eurozone, and it has disappeared the savings of countless Brits and Dutch, which means it has some outstanding business with the rest of Europe, that it will have to sort out, after executing a few more whales, guilty as charged.)

Some acknowledge the convenience of a common European currency and easier border transits, while remaining obsessed by what they view as gigantic differences between European countries. Those quaint nationalists and parochial types obsess that core differences between countries are so strong and deep-rooted that any form of real European union is a ridiculous concept. This is triply erroneous.

Read the rest of this Post

Little reason for celebration

The official unemployment rate of the U.S. economy remains at 9.7%,  and the underemployment rate increased to 16.9%.  These numbers represent a real tragedy for many Americans.

While the White House tries to celebrate the creation of 162,000 new jobs last month, at least 48,000 of these new jobs are government jobs, specifically temporary census workers, who are doing unproductive work and are being paid with taxes collected from the rest of the private economy.

Unemployment

Employment also increased in temporary help services and healthcare, but continued to decline in financial activities and in information, which is interesting given the recent comments by President Obama that the government takeover of the student loan program tucked into the health care bill “took $68 billion from banks and financial institutions.”(Obama’s  April 1 remarks)  That’s a lot of jobs, Mr. President.

Seems like there is more concrete evidence that, rather than creating jobs, the President’s policies are costing the economy jobs.

by Sherry Jarrell

Welcome Patrice Ayme

On the 22nd March, Learning from Dogs had the pleasure of a Post from our first Guest Author, Elliot Engstrom.  We were then doubly delighted to have Per Kurowski join us as our second Guest Author with his introductory Post.

Now we have the additional honour of welcoming Patrice Ayme to the growing ranks of Guest Author to Learning from Dogs.

Patrice, like Elliot and Per, also is a prolific blogger.  He describes himself as:

I was born in Europe, raised in Africa, and lived in America. So doing, I learned to compare different cultures, even during my early childhood, and to appreciate superiority of many of their traits, even the most surprising. I consider myself Senegalese, and proudly so. I studied, and know, several languages, not just Latin, and several cultures, deeply, by living through and inside them for years. I have done formal studies in mathematics and physics at three leading Universities receiving the highest degrees, and putting me in a good position to learn to differentiate between hard knowledge and wishful thinking, differently from many a common philosopher. I am a specialist of non commutative geometry, arguably the most abstract field of knowledge in existence (even hard core logic, model theory, is used in my approach).

Here is Patrice’s first Guest Post for Learning from Dogs.

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GREEK TROJAN HORSE TO CONQUER BETTER EUROPEAN UNION

Abstract:

The European currency, the euro, is, foremost, a solution to a problem. War. All other problems, and the euro solves many, pale in significance relative to this one.

Many talk about “problems” with the euro, and, oozing with glee all over, perceive weakness. They are right, there is weakness, but it is not European weakness. Just the opposite.

What those skeptics are seeing with their uncomprehending neurology is the further construction of the European imperium, according to its core principle: fix what needs to be fixed, but with complete consensus of the parties concerned, which means do it just so. It appears messy, because it’s democratic, and before the people (demos) can use its kratos (power), it needs to think right, which means it has to argue thoroughly. It looks like squabbling, but it is thinking aloud. Europe is not built for some parties to gain advantage anymore (as it was with Napoleon, or Hitler), but to solve problems and gain opportunities for all.

The euro is, for the first time, used as a weapon against Europe’s enemies. Hence all the squealing. Far from weakening Franco-German resolve, the recourse to the IMF adds another layer of authority to the European Communities. When the IMF, speaking in the name of Franco-German taxpayers, tell restive exploiters in Greece that they have to pay more taxes (only 6 plutocrats declare more than one million euro income in Greece, and more than 500 professions can retire at 50 years of age, whereas Germany just brought up the retirement age to 67!), they will have to submit under orders (imperare, to use the Roman notion)

The European Union

Read more of Patrice’s fascinating article

Well, it is a Chinese saying, “May you live in interesting times”!

A couple of weeks ago on Learning from Dogs, there was an article reminding readers that the web has been around for 20 years and Sir ‘Tim’ Berners-Lee is still hard at it in terms of Internet innovations. And to support this, today accompanying this Post is one on what the BBC is doing to commemorate the event.

The Internet has completely reformed the way that ordinary people get access to information.  Stratfor is a great example.

From their web site:

STRATFOR’s global team of intelligence professionals provides an audience of decision-makers and sophisticated news consumers in the U.S. and around the world with unique insights into political, economic, and military developments. The company uses human intelligence and other sources combined with powerful analysis based on geopolitics to produce penetrating explanations of world events. This independent, non-ideological content enables users not only to better understand international events, but also to reduce risks and identify opportunities in every region of the globe.

One can subscribe to a range of free reports and it came to pass that a Stratfor report on China came into my in-box.

Stratfor generously allow free distribution of this report and because the relationship between China and the USA has so many global implications, the report is published in full, as follows:

Read the Stratfor report

Ben S. Bernanke, Chairman of the Federal Reserve

Used toxic assets, anyone?

Ben Bernanke, Chairman of the U.S. Federal Reserve, announced that the Fed was likely to begin to sell some of the $1 trillion in mortgages, the so-called “toxic assets,” that it purchased over the last fifteen months to help stave off a total credit market meltdown. Those purchases essentially doubled the U.S. money supply, igniting fears of potential inflation should the underlying real economy recover before the money supply could be drawn back down. See earlier post.

Well, the process of tightening the money supply may be just around the corner. And increases in interest rates and the cost of everything purchased on credit – homes, cars, durable goods, and business capital expenditures – are not far behind. Increases in interest rates dampen economic activity, an unfortunate development given the current lethargic state of the U.S. economy. But it has to be done sometime – we cannot sustain such a huge increase in the money supply without paying an even higher price in terms of inflation and a weak dollar.

It will be interesting to see who buys the toxic assets and how much they will pay. Regardless, the sale will reduce the money supply which, if done in a slow, orderly manner, is a good thing for the economy. Getting the Fed out of the business of buying and selling private market securities will be an even better thing for the U.S. economy. Now more than ever we need a monetary authority that is focused on the best policies for our economy, not those that help Fannie Mae, the White House, or the Treasury Secretary save face.

By Sherry Jarrell

Welcome Elliot Engstrom

Learning from Dogs has been publishing on a daily basis since July 15th, 2009.  That’s over 460 posts and is a great tribute to the commitment of all the authors of this Blog.  We are grateful that our regular readership is also measured in the hundreds and is growing steadily.

Elliot Engstrom

It seemed time to make a small change.  We have decided to include articles from Guest Authors on a regular basis.  Our first guest is Elliot Engstrom.

Elliot Engstrom is a senior French major at Wake Forest University, and aside from his schoolwork blogs for Young Americans for Liberty and writes at his own Web site, Rethinking the State

Elliot first post for Learning from Dogs is about the US Federal Government and Poverty.  This also appeared in The Daily Caller.

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The federal government, which claims to be the greatest supporter of those in need, is anything but a friend of the impoverished.

Often times when conservatives speak of the government treating the rich differently than the poor, the discussion is framed around taxes and welfare, with the argument being made that the government forces the highest earners to pay a massive percentage of all taxes, both punishing success and stifling overall economic productivity and making it all the more difficult for anyone not in the upper echelons to accumulate wealth for themselves. I sincerely hope that I have not constructed a straw man version of this common conservative argument, as I certainly think it has a great deal of credibility. However, I also would like to draw attention to the fact that while government loots the rich through the direct means of taxation, it likewise loots the poor, albeit through a different set of means that is much more difficult to recognize, and thus much more difficult to counteract.

While looting the wealthy can often be construed as some kind of humanitarian effort to aid the poor, looting the impoverished is a much more difficult enterprise to disguise as a moral good. Thus we will find that the government’s means of taking money from the poor are much more difficult to detect, comprehend, and eliminate than the means of direct taxation that is used to extract money from the wealthier members of society.

The dollar in which the majority of Americans receive their wages or salary has no absolute, set value. We see this in the fact that the value of the dollar is constantly fluctuating when compared to gold, silver, or the currencies of other nations (which are all constantly fluctuating in value themselves). “Value” is determined by a wide range of factors, but is based in the fact that human beings are all rational maximizers who are all trying to get what they want while expending the least amount of resources possible to do so. The occurrence of this phenomenon in the mind of every single individual economic actor coordinates the price system in a free market economy.

A given worker making $10.50/hour may see himself as bringing home a constant source of income. However, this is not the case at all due to the constantly shifting value of the dollar. Even in a free and unhindered market, the value of the dollars that this worker takes home each day would fluctuate based on factors like how much liquid currency was actually in existence in the market, how many resources had been invested in banks or stocks, and what amount of resources had been converted into physical capital or products. In the end, the dollar itself has all the value of a flimsy piece of cotton paper – it derives its true value from the productive activities of economic actors who use it as a medium of exchange. In other words, the dollar is a widely accepted “I.O.U.” This would be the case even in the freest of economies. Values of commodities and currencies are always changing based on the effectual demand and effectual supply of the moment.

But, as we all know, we live in anything but a free and unhindered economy. Our supposed “free market” is criss-crossed with a Federal Reserve System that manipulates the value of the dollar at will, a corporate welfare system that socializes the losses of corporations at the expense of the rest of society, and law enforcement policies that weigh the heaviest on those who do not have the time or resources to easily deal with court and lawyer fees, jury duty, and detainments prior to trial, not to mention the fact that the War on Drugs does substantially greater damage to the lower classes of American society than it does good, particularly when speaking of poor African-Americans.

And here’s the scary part – this was all the case before the bailouts and stimulus package that George Bush began and Barack Obama continued and amplified. Not only do these bailouts threaten to massively inflate our currency, spelling disaster for those whose livelihood is based in hourly wages paid in dollars, but it also directly took from all of society, not just the rich or the poor, and gave to a few select corporate entities such as Goldman-Sachs and Wells Fargo. We know this because every new dollar created by the government in the stimulus plan detracted from the value of every dollar already existing in the pre-stimulus economy (or will do so when released into the economy).

Does this sound confusing? It should, because it is, and that’s exactly how the federal government likes it.

While the federal government would tell us that they protect the poor from the exploitation of the rich, economics would tell us that it is in fact the federal government itself that is the greatest exploiter of our nation’s impoverished, and it is this institution that in fact facilitates much of the disparity in wealth between wealthy national corporations and impoverished local communities.

Those of the small government mindset who wish to rally more people to their cause should not go about proclaiming that we should be immediately getting rid of affirmative action and welfare for the poor, but instead should be putting forth a rallying cry against corporate welfare, an inflation-minded Federal Reserve System, and a law enforcement system whose economic penalties weigh heaviest on those with the least money in their savings accounts. It does not have to be out of selfishness that we advocate for a reduction of the federal nanny-state. It can, and should, instead be out of a concern for the poverty and destruction of wealth that is directly generated by this institution’s misguided policies.

By Elliot Engstrom