The Democrats oppose an Energy Boom as it could Reduce their Political Power in the Big Cities

Posted by PITHOCRATES - December 1st, 2012

Week in Review

President Obama’s energy policy has only hindered oil production and raised gasoline prices.  Exploration and production are soaring.  But only on private land.  Any land that requires a federal permit is not booming with activity.

Despite the high gasoline prices and the poor economy President Obama won reelection.  In large part thanks to those states with the big metropolitan cities.  Those cities that border the heartland.  Or flyover country as those on the left call it.  Those cities that concentrate wealth.  Have massive public sectors.  And large social safety nets.  Funded by that concentrated wealth.  So people in the big cities approve of an expanding welfare state.  And have the population to turn out on election night to keep that welfare state expanding.  For awhile, at least (see Oil, gas boom lifts personal income in USA by Dennis Cauchon posted 11/27/2012 on USA Today)

The nation’s oil and gas boom is driving up income so fast in a few hundred small towns and rural areas that it’s shifting prosperity to the nation’s heartland, a USA TODAY analysis of government data shows…

Small-town prosperity is most noticeable in North Dakota, now the nation’s No. 2 oil-producing state. Six of the top 10 counties are above the state’s Bakken oil field.

Could this be the reason why the president’s energy policies hinder exploration and production?  To keep people and wealth out of the heartland?  Where they tend to vote conservative?  Perhaps.  For the last thing the Democrats want is for people to leave the big cities for good jobs in the private sector.  Where they live well thanks to jobs in the energy industry that the president’s base wants to regulate out of business.  So, no, an energy boom in the heartland would not benefit the Democrats.  It would shift the demographics away from their strongholds.  And into flyover country.  Favoring conservatives.

Just something to think about the next time you’re expressing dissatisfaction over the high price of gasoline.  That it would benefit the Democrats not to have good, high-paying jobs that could reduce the price of gasoline.  And their political power in the big cities that help them carry elections.

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The Solution to Europe’s Debt Crisis may be as ‘simple’ as the Eurozone Nations surrendering their Sovereignty

Posted by PITHOCRATES - June 24th, 2012

Week in Review

The solution to the Eurozone debt crisis is easy.  All the European nations have to do is surrender their sovereignty (see The eurozone’s long reform wishlist by Laurence Knight posted 6/24/2012 on BBC News Business).

A US-style federal budget may be needed to cover the cost of recessions, so that individual governments don’t risk going bust when their national economies get into trouble. For example, the cost of a minimum level of social security – especially unemployment benefits – could be permanently shared across the eurozone, paid for by a common income tax.

Welcome to the new world order.  At least the new country of Europe.  Made up from the former European nations.  And, unsurprisingly, the answer to all their problems is a new tax.  Not just any tax.  But a European income tax paid to a distant central power.  The kind of thing that embroiled Europe in wars to prevent going as far back as the Roman Empire.  And beyond.

The European Central Bank may need to have its mandate changed so that it has an explicit dual target to support employment as well as price stability, just like the US Federal Reserve does, as proposed by the new French President Francois Hollande.

Because it has worked so well in the United States.  The Fed was in charge during the Great Depression.  The Fed was in charge during the stagflation of the Seventies.  The Fed was in charge during the irrational exuberance of the Nineties.  And the Fed was in charge during the great housing bubble that gave us the subprime mortgage crisis.  Few people in the US think the Fed should be supporting anything these days.  For they feel they’ve done enough damage.

All Europeans (and especially southerners) are having to implement structural reforms that will increase their long-term growth and strengthen government finances, including removing restrictions on market competition, raising the retirement age, laying off (over many years) a lot of state employees, and making it much easier to hire and fire employees.

Really?  Something the individual European nations couldn’t do (cut back generous state benefits) a European country can?  Students in France took to the streets when they added a year or so to the retirement age.  Students took to the streets in Britain when they tried to make students pay for a part of their college education.  And Greece’s answer to austerity?  Riots.  It is easy to say what they must do.  Getting them to do it is another thing.  And they’ve clearly shown they don’t like doing it.  And so far have chosen not to.

In the same way that Washington has helped out struggling US states, the southern European governments may need to be given money (given, not lent) by the rest of the eurozone via direct fiscal transfers, so that they can afford to prop up their economies until they have regained competitiveness. These transfers could end up taking the form of bailout loans that are never repaid.

The US government can’t afford to bailout any states.  The state of California is in trouble.  As are some of our big cities.  Such as Chicago.  And New York City.  They have the same problem Greece has.  They have far more spending obligations than they can afford to pay.  As did the state of Wisconsin.  Whose governor implemented the kind of structural reforms suggested for the new European country.  And the opposition party and the federal government attacked them for it.  Organized a recall drive to kick out the governor.  And undo those structural reforms.  But the recall failed.  The governor won the recall election by a large margin.  Showing the people are no longer going to pay for other people’s irresponsible spending.  As the European people probably won’t want to either.

To make a full banking, fiscal and monetary union work, the eurozone governments would need to hand power to a central authority (the European Commission) that can pay for and supervise all of the above, while national governments accept that in future they have to keep their own spending strictly within their limited means.

 As most of the above reforms involve Germany sharing its wealth with the rest of Europe (and all European nations handing power to Brussels), Berlin is insisting on the principle of no taxation without representation – in other words a move towards full federalism, with spending and regulation controlled by a directly elected presidency of the European Commission.

Few European governments like hearing Germany tell them to implement structural reforms.  They’re not going to like it any better coming from Brussels.  Federalism wasn’t easy in the US.  We had to fight a civil war.  Go through reconstruction.  To this day we’re still fighting regional conflicts.  The Midwest is strongly union while the southern states are not.  And the federal government recently intervened on the side of the unions when Boeing tried to build a new aircraft manufacturing plant in the South.  In fact, those in the federal government refer to those states as flyover country.  Which is all they want to see of that country.  Flying overhead as they go between the east and west coasts.  Where the big government people live.

The 13 original American states had only about 200 years of history before they joined the federal union.  The European people have over 2,000 years of history.  It is unlikely that they will willingly choose to become flyover country.  No, there isn’t any easy solution to their problem.  If there was they would have already done it.  A currency union without a political union may just prove to have been a bad idea.  A political union isn’t likely.  Unless the people of Europe are more willing to give up their 2,000 years or so of history than the Americans were willing to give up their 200 years or so of history.  And if they’re not they should really think long and hard about creating something even bigger than the Eurozone.  That may be even more difficult to fix.  Should it follow US history too closely.  Where that first hundred years proved to be a bitch.

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FUNDAMENTAL TRUTH #45: “The bluest of cities in the bluest of states have the most activist governments, the deepest recessions and the most abject poverty.” -Old Pithy

Posted by PITHOCRATES - December 21st, 2010

Blue States Bleeding Red

We call it the Great Recession.  It started with the subprime mortgage crisis.  Then the dominoes started falling.  And unemployment rates started to climb.  So many people lost their jobs that it wasn’t only banks and auto companies staring into the abyss of bankruptcy.  Our city and states were, too.

But not all our cities and states.  Some were hanging in there during the Great Recession.  There was a pattern.  Sure, it was a rule with some exceptions, but a general rule all the same.  And if you looked at one of those red/blue electoral maps, you could see the states (and the cities) having the biggest financial troubles.  You just looked for the blue.

The blue states are the ‘Democrat’ states.  The red states are ‘Republican’.  And the states that are in the news with financial troubles tend to be the blue states.  The New England States.  The Mid-West states.  And the West Coast states.  The rate of business failures and high unemployment rates have hammered these states.  Taxable income plummeted.  Without the income to tax, tax revenue plummeted.  And these blue states are bleeding red.

Blue States and Unionized Public Sector Employees

These are the Big Government states.  Home for most of the nation’s liberal democrats.  Although liberal democrats make up only about 20% of the national population, most of them live in these states.  And when you pack a lot of this 20% into these small areas, their influence can reach a majority.  And they can control these cities and states.  And do.

These liberals are the guilty rich (anti-capitalist inheritors of great wealth).  Crony-capitalists (anti-capitalists who eschew the free market and bribe politicians in exchange for governmental favoritism).  Big Union (anti-capitalists who eschew the free market and seek legislation that favors them).  The celebrity rich (anti-capitalist movie stars, musicians, painters, artists, etc., who don’t live in the real world).  University professors (anti-capitalists who still have posters of Che Guevara up in their classrooms).  The mainstream media (anti-capitalists who want to shape opinion instead of practicing journalism).  And, of course, the poor and government-dependent.

And then you have public sector employees.  Unionized public sector employees.  And their ranks are growing.  They don’t work very hard.  But boy are they paid well.  And talk about fat benefits.  Pension plans that most can’t even imagine.  They have made themselves a privileged class.  And with their boss having the power to tax, that privileged class will be remaining privileged for a long time to come.  Unless a Great Recession comes along.

Much of Flyover Country not having any Budget Crises

What is flyover country?  It’s that are area of the country liberals fly over when traveling between the West Coast, the Big Union Mid-West, New England and, of course, Washington D.C.  It’s that area in between.  The red states.  You see, liberals fly over the red states because they don’t like them.  Or Republicans.

Because America is a center-right nation, and the liberals have concentrated in the blue states, that has left most of ‘fly over’ country conservative.  And what do conservatives NOT like?  Big Government.  So liberals don’t go where they’ve not welcomed.  For Big Government is the heart and soul of liberalism.

So the red states don’t have Big Government.  They don’t have masses of government-dependent people.  And they don’t have large public sectors.  Or public sector union employees.  Which means they don’t have huge Big Government budgets.  Or budget crises.

The Public Sector Out Paces the Private Sector in the Blue States

But the blue states do.  Their Big Cities are packed with government-dependent people.  And they have a huge public sector to cater to these people.  And a public sector union that pays this public sector very well.  They have pay and benefit packages that are to die for.

Of course, a public sector doesn’t make anything.  They have no goods or services that they can sell in the free market.  They have but one source of income.  Taxes.  And when times are good, taxes are good.  But when times are poor, so are taxes.

Part of the liberal democrat’s strategy to remain in power is to get as many people as possible dependent on government.  This helps make Democrat voters (people who vote Democrat because they are afraid of losing their government benefits).  And justifies their huge government budgets.  So they keep adding people to the public dole.  And keep growing their budgets.  It’s a foolproof plan.  As long as the private sector grows along with the public sector.  So the private sector can keep paying the taxes to support the public sector.  And the privileged class.

Big Government – The Road to Bankruptcy

But it doesn’t always work.  When businesses fail they don’t have any income.  So they can’t pay any income taxes.  And when a business fails people lose their jobs.  And their incomes.  So they don’t pay any income taxes either.  But it doesn’t end there.  Without any income, they can’t buy anything in the free market.  So other businesses see their sales decline.  And have to lay off employees.  And these laid-off people can’t buy anything in the free market.  So more businesses see their sales decline.  And they lay off people.  And on and on it goes.  Where does it stop?  Usually in a bad recession.  Or even a great one.

You add all of this up and what do you get?  Big cities with growing budgets (and growing pension obligations).  And shrinking tax revenue to pay for it.  Costs exceed revenues.  Ergo, bankruptcy.

And some of the states with the most generous public sector pay and benefits are California, Illinois and New York.   Some of the bluest of blue states.  And coincidentally, these are the states facing some of the biggest budget crises.  Actually, it’s no coincidence.  It’s the ultimate consequence of Big Government.  Bankruptcy.

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Stupid Republicans Help Smart Democrats Lose Elections

Posted by PITHOCRATES - November 22nd, 2010

Figures don’t Lie, but Liars Figure

Is a 70 degree Fahrenheit a warm day?  Or a cold day?  It depends on your perspective.  If you’re from Norilsk, Russia, you’d probably say it’s warm.  If you’re from Al’Azizyah, Libya, you’d probably say it’s cold.  70 degree Fahrenheit is a fact.  But it means different things to different people.  And neither the Russian nor the Libyan is wrong.  Weather is relative.

The Republicans won control of the House of Representatives, a majority of the state governorships and a majority of the state legislatures in the 2010 midterm elections (see Election 2010 posted on The New York Times for election results).  Some say this is a rejection of the Obama/Pelosi/Reid agenda.  Some say the Democrats lost so much because the Obama/Pelosi/Reid agenda did not go far enough.

Interesting, huh?  The same data reviewed by different people who then reach such different conclusions.  Are the election results as relative as the weather?  Or is Mark Twain closer to the truth?  “Figures don’t lie, but liars figure.” 

Old, Stupid White Men Vote Republican?

There is a political divide across the country.  You can see it when you look at the election map.  The nation is mostly red.  With some blue on the coasts.  And around the big cities in between.  I look at that and I have an idea why it looks like that.  The Washington Post, on the other hand, has a different interpretation (see Political divide between coasts and Midwest deepening, midterm election analysis shows by T.W. Farnam, Washington Post Staff Writer, posted 11/21/2010 on The Washington Post).

The Republican Party’s big gains in the House came largely from districts that were older, less diverse and less educated than the nation as a whole. Democrats kept their big majorities in the cities.

Translation?  Old, stupid white men vote Republican.  I see it differently.  What are big cities full of?  Poor people.  And welfare.  Big city governments.  With big union pay and benefits.  Big bureaucracies that employ the unemployable and increase the costs of doing business.  Big universities.  University professors.  University students.  Art museums.  Theatres.  A liberal and libertine party atmosphere (which draws the young).  Teen pregnancy.  Abortions.  STDs.  Drug addicts.  Prostitutes.  Etc.

The Obama coalition remained intact. Democrats remained strong in areas with the party’s core of minorities and higher-educated whites. But movement of white working-class voters away from the party is a concern for Democrats, especially because of President Obama’s traditional weakness with those voters.

Higher-educated whites?  Yeah, right.  A lot of those degrees are from the big universities in the big cities.  Women’s studies.  Art History.  Philosophy.  American Studies.  English Lit.  Communications.  Poetry.  And, of course, Law.  Very popular with the anti-business crowd.  And, as it turns out, very unpopular with actual businesses. 

Higher educated, perhaps.  But an education that has little market value.  So they end up working for a nonprofit dependent on government funding.  Or work as another piece of deadwood in a bloated government bureaucracy.  Or file frivolous lawsuits and are dependent on government NOT to reform tort law.

“There’s definitely been a hardening of Democratic support along the coasts since 1994,” said James Gimpel, a political scientist at the University of Maryland.

New York City, Boston, Seattle, San Francisco and Los Angeles.  Coastal cities.  Homes of the uber liberal.  Here they sip their lattes and look down their noses at flyover country. They’re only 20% of the population.  But when you concentrate 20% of the population in these small geographical areas, those areas will have liberal majorities.  While at the same time if you pull that 20% out of the rest of the country, that big geographical area they call flyover country is left conservative.

The Poor, Unemployable and Irresponsible Vote Democrat

It’s not that Republicans are old, stupid white men.  Democrats have lost so much of the country because they and their agenda don’t appeal to people who have jobs.  So who do they appeal to?  The poor, unemployable and irresponsible.  And lawyers.  Who all tend to be anti-business.  Like the Democrat Party.

Saying the reason why you lose elections is because the electorate is stupid is figuring with facts.  The facts say otherwise.  Besides, when the young is a strong demographic for you, you kind of lose that argument.  Young people are uneducated and inexperienced.  Young people fill our Colleges.  And they’re going there not because they’re smart.  They’re there going to get ‘smart’.

Meanwhile, the higher educated liberals often have those useless degrees.  Because they care about people, not profits.  So they don’t do anything so coarse as to get a degree that might help a business earn a profit.  Instead, they’ll subsist off of government funding.  Or by suing businesses for unearned wealth.

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The People are Speaking – and They’re Rejecting Pelosi and Obama and Their Very Expensive, Jobless, Liberal Agenda

Posted by PITHOCRATES - October 31st, 2010

Ethical and transparent is all well and good with Republicans in power, but devious is just fine when the Democrats are back in power.

The Wall Street Journal’s John Fund sat down with Rep. Brian Baird, a six-term Democrat from Washington State.  He’s not running for a seventh term.  He’s retiring and going home to be with his children while they’re still children.  With a close to his political career, he had nothing to lose speaking his mind.  And he did.  (See Requiem for the Pelosi Democrats posted on line 10/30/2010.)  One thing this Democrat wasn’t happy with was the Democrat leadership.

Mr. Baird recalls that he was “very excited” when his party took control of Congress in 2006, but he saw ominous signs early on. Before the 2006 election, he says, Mrs. Pelosi had 30 members working on a rules package to make the House more ethical and deliberative. “We abandoned all that work after the election, and leaders told us we should trust them to clean things up. I don’t know a single member of the Democratic caucus who saw the final rules package before they voted on it.”

Even her own don’t like her.  Nancy Pelosi was going to have the most ethical and transparent House.  Of course, Pelosi initiated that initiative when the Republicans were in control.  When she was working on a very draconian set of rules for the House of Representatives.  Then, to her shock, the Democrats won a majority in the House and, with it, the leadership positions.  And the 30-member panel stopped their work.  Why?  Those draconian rules had but one purpose; curb Republican power.  With them being in the majority, they didn’t need any set of rules to curb Republican power.  And they sure as hell weren’t going to implement any rules that would curb their own power.  For the devious like to work outside the rules as much as possible.

Obamacare – long and convoluted, best passed without reading (for it’s not as quick a read as War and Peace or Atlas Shrugged).

Once back in power, they were giddy with that power.  They took it as a mandate to change America.  But it wasn’t.  It was a mandate to change Washington.  But they tried their level best to remake America to what the people wanted.  Demanded.  To make it liberal.  To give us Big Government.  This is what they and about 20% of Americans who call themselves ‘liberal’ wanted.  So they ignored the other 80% and went to work.  Their bills were so long and convoluted that it made Leo Tolstoy’s War and Peace and Ayn Rand’s Atlas Shrugged (both in the 1,000-page class of novel) seem like Readers Digest reading by comparison.  And one of the longest and most convoluted?  Obamacare.  Which few read before voting. 

“What the hell were we doing voting on this? I had labor groups come to me and insist the bill was so important we couldn’t wait to know what was in it,” he recalls. “I asked them if they were handed a new union contract and told it was so important they had to agree to it without reading it, would they go along?” They continued to insist he vote for the bill and threatened him with a primary challenger.

Even Nancy Pelosi said that Congress would have to approve it before they could learn what was in it.  Remarkable.  Can you imagine the teachers’ union agreeing to this?  Saying to the school board, “Sure, whatever you say.  If the contract’s fair that’s good enough for me.  We, the teachers, can learn about what we agreed to after we vote to ratify it.”  No, they wouldn’t.  Neither would Nancy Pelosi pass a bill sponsored by Republicans without reading it.  It’s okay for her, though.  Because she’s an elitist.  And doesn’t really care what we ‘rubes’ think anyway.

Obamacare – We’ll pay for filet mignon but get hotdogs and hamburgers, a very expensive mediocrity.

Passing Obamacare required some financial shenanigans.  They needed CBO to score it under a trillion dollars.  Which was like giving everyone filet mignon at the family reunion BBQ by asking everyone to pay $5 to cover the cost.  You can’t do it.  If you’re buying food for everyone and only collecting $5 a head, trust me, you’re serving hot dogs and hamburger.  But if you collect the money first and don’t feed anyone until after, say, 4 years, you’ll be able to stay within your imaginary budget in those first 4 years.

“I warned my fellow Democrats that the insurance companies they were whacking could increase premiums just before the midterm election and blame them for it,” he sighs. “I pointed out that the major benefits wouldn’t kick in till 2014, but the costs were up front. I asked them, where was the political win? There was no real answer.”

Of course, people are not going to enjoy paying for nothing.  They’re not just going to sit idly by with their wallets open, whistling a happy tune.  There will come a point when they’re going to ask what they’re getting for all their money.  And then after 4 years of paying for filet mignon, they’ll finally get to enjoy the benefit they’ve been paying and waiting patiently for so long.  And, guess what?  They’ll still get hot dogs and hamburger.  Because everyone can’t have filet mignon.  It’s just too damn expensive.  So like with everything else Big Government does, we’ll end up with a very expensive mediocrity.

The rubes in flyover country have had enough of deficits.  And enough of the arrogant and condescending Pelosi and Obama.

Nancy Pelosi and most in Congress are elitists.  They are so far removed from ordinary America that it’s like visiting a foreign land for them.  That’s why they call it ‘flyover’ country.  The only thing the country outside their liberal districts is good for is flying over en route to another liberal district.  They either think everyone thinks like they think.  Or that those too stupid to be able to think like they think should just be seen and not heard, grateful for whatever alms they hand out.  The concept of alternate viewpoints is alien to them.  So when advisors told them to go ahead and spend because the people (the people that count – the 20%) don’t care about deficits, they listened.  Well, not so much listened.  But heard what they wanted to hear.

Democrats, he says, will also have to recognize why they lost touch with voters. “Back in September, we had pollsters and strategists from my party tell members that the mass of people didn’t care about the deficit. The mind-boggling lack of reality coming from some of the people who give us so-called advice is stunning.”

Well, people care about deficits.  Like the Left used to care about when Ronald Reagan was running up a deficit the size of a drop in the bucket compared to theirs.  And the amazing thing is, they aren’t done spending yet.  Which is really frustrating the 80%.  The rubes.  The good people in flyover country.  Who are growing weary of the condescending and arrogant Nancy Pelosi and President Obama.

The mandate was to change Washington, not America.  Now, America is polarized.  And it’s business as usual in Washington.

Toby Harnden, American Way, wrote a piece appearing on www.telegraph.co.uk called US midterm elections: Barack Obama’s world turned upside down as Democrats face electoral disaster.  Those familiar with history will be familiar with part of this title.  For tradition says that when Lord Cornwallis surrendered at Yorktown in 1781, the British marched out while their band played The World Turned Upside Down.  How very apropos.  For the ruling elite is stunned, much like Lord Cornwallis was, at the thought of being defeated by a bunch of rubes.  So desperate to avoid such a ‘Cornwallian’ disaster, the Left is trying everything within their power.  Even abandoning the lie that brought them into office.  

The irony of Obama being the blue-state president is acute. Back in 2004, the then state senator shot to international attention by mocking the pundits who “like to slice and dice our country into red states and blue States”.

He declared: “There’s not a liberal America and a conservative America. There’s the United States of America. There’s not a black America and white America and Latino America and Asian America. There’s the United States of America.”

Of course, once he got into office, it was all, “I won.  You lost.  Nyah nyah, na nyah nyah.” 

Swept into power on a wave of adulation and talk of an historic new era, Obama never felt he needed to work with Republicans. It took him 18 months before he invited Senator Mitch McConnell, the Senate Minority Leader, to the White House.

But the center-right, the 80%, were not amused.

The problem was that his world view was that of a conventional liberal Democrat but he was president of a nation that was centre-right. His victory came from those who wanted him to change Washington, not America.

And by governing against the will of the people, America is polarized more than ever.  And it’s business as usual in Washington.  Perhaps a bit dirtier, though.

Jobs talk and liberal BS walks.  Yeah, it’s the economy, stupid.

Obama ran as a centrist.  But once in office, he ruled as a liberal.  The most liberal president ever.  And like Nancy Pelosi, he is getting exasperated by these rubes who are just too stupid to know what’s best for them.  So he’s abandoning that reaching across the aisle nonsense and doing what Democrats do best.

Obama’s high-minded appeals for national unity are no more. His electoral strategy is one of desperate damage limitation. Most pollsters expect Democrats to lose more than 50 seats and control of the House of Representatives.

They will probably keep control of the Senate but at least six seats look lost. Obama’s response has been to “slice and dice” the electorate in the way he condemned. He endured the indignity of being called “dude” on Jon Stewart’s Comedy Central show as the price for enticing young voters.

He’s appeared on the Reverend Al Sharpton’s internet radio show to woo black voters. On Univision radio, he told Latino voters of the need to “punish our enemies”. He routinely attacks Fox News and Karl Rove, President George W. Bush’s former adviser, as a way of energising liberals.

With the realization that America doesn’t want what Pelosi and Obama are pushing, they reach out to those who they once simply took for granted: the young, the blacks and the Latinos.  Who they need more than ever now that so many women are turning to the Republicans this election.  Because there are no jobs.  After 2 years in office.  And trillions of dollars in spending.

What was that the Democrats used to say?  Oh, yes, I think I remember.  “It’s the economy, stupid.”  Duh.

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