Decriminalize Marijuana and the Kids will Smoke more and Eventually Vote Democrat

Posted by PITHOCRATES - July 28th, 2013

Week in Review

Teenagers typically vote Democrat.  In part because of the liberal bias in our public schools.  And in our colleges.  As well as in the mainstream media.  In Hollywood.  In television.  And the music industry.  These things do a lot to shape the way our kids think.  But there is another reason why our kids become Democrat voters.  Because it is the left that is handing out free birth control.  While their parents say ‘no’ the left says ‘go ahead.  Have fun.’  And then there is the push by the left to decriminalize marijuana.  Something else these kids’ parents say ‘no’ to.  While the left says ‘go ahead.  Have fun.’  Even if it may be harmful to them.  For what’s a few burnt brain cells in exchange for the youth vote (see Pot’s march toward mainstream by Alicia A. Caldwell And Nancy Benac, The Associated Press, posted 7/27/2013 on The Vancouver Sun)?

It is a moment in the U.S. that is rife with contradictions: People are looking more kindly on marijuana even as science reveals more about the drug’s potential dangers, particularly for young people…

Exploration of the potential medical benefit is limited by high U.S. government hurdles to research. Washington policy-makers seem reluctant to deal with any of it.

So we know it’s bad for the children.  But we really don’t know how bad.  For it is the only medicine (medical marijuana) ever allowed without proving the drug through clinical trials.  To make sure the drug works.  And it doesn’t cause irrevocable harm.  No pharmaceutical is allowed this luxury when bringing a new drug to market.  And we know how dangerous cigarettes and alcohol are.  But not marijuana.  No.  That drug we just accept on faith that it will cure us.  Besides just giving us a great high.

Opponents of pot are particularly worried that legalization will result in increased use by young people.

“There’s no real win on this from a political perspective,” says Sabet. “Do you want to be the president that stops a popular cause, especially a cause that’s popular within your own party? Or do you want to be the president that enables youth drug use that will have ramifications down the road?”

If anyone legalizes it will be the left.  Who are always attacking the right for hating children whenever they say we can’t afford to spend any more money.  But smoking pot harms kids.  And the left is okay with that.

“Having a regulated system is the only way to ensure that we’re not ceding control of this popular substance to the criminal market and to black marketeers,” says Aaron Smith, executive director of the National Cannabis Industry Association, a trade group for legal pot businesses in the U.S. See Change Research, which analyzes the marijuana business, has estimated the national U.S. market for medical marijuana alone at $1.7 billion for 2011 and has projected it could reach $8.9 billion in five years. Overall, marijuana users spend tens of billions of dollars a year on pot, experts believe…

In Washington state, the Liquor Control Board is drawing up rules covering everything from how plants will be grown to how many stores will be allowed. It expects to issue licences for growers and processors in December, and impose 25 per cent taxes three times over – when pot is grown, processed and sold to consumers…

Marijuana advocates in Washington state…have projected the legal pot market could bring the state a half-billion a year in revenue…

Decriminalizing marijuana will make it easier for kids to smoke it.  Because it’s easier to get things that are only illegal for people under a legal age.  As opposed to being completely illegal.  Kids aren’t legally allowed to smoke cigarettes but they do.  In fact, it is fair to say kids smoke more cigarettes than marijuana.  Because cigarettes aren’t completely illegal.  They’re only illegal for kids.

So cities suffering under the crushing costs of their public sectors are looking at a windfall of tax revenue by decriminalizing marijuana.  And don’t seem to have a problem of people spending more of their money on getting high instead of saving for their retirement.  Paying for their kids’ education.  Or putting food on the table.  It was the same thing when cities scrambled to legalize gambling.  Because they wanted the tax revenue.  Despite people gambling away money that they should have spent on their family.  No doubt these cities would be disappointed if more kids didn’t start smoking marijuana.  So that when they grew into adults they would already have a healthy drug habit the city could tax.  To help pay for the crushing costs of their public sectors.

Of course, the states and cities will never see those rosy projections of tax revenue.  Because when they “impose 25 per cent taxes three times over” they will raise the price of legal marijuana so much that it will benefit, not hurt, the black market for marijuana.  Even if the black market price is below the official taxed price.  Why?  Because people smuggling cigarettes from a low-tax state to a high-tax state don’t do the time drug dealers do when caught.  Encouraging more people to sell a legal substance illegally.  To cheat the state out of that tax revenue.  And pot smokers, especially the kids, will turn to the black market for their pot.  Where it will be even more readily available when the growing, transporting and selling of marijuana is no longer illegal.  Like cigarettes.  Which kids have no problem buying.

California steps back California’s experience with medical marijuana offers a window into pitfalls that can come with wider availability of pot.

Dispensaries for medical marijuana have proliferated in the state, and regulation has been lax, prompting a number of cities in the state to ban dispensaries…

In May, the California Supreme Court ruled that cities and counties can ban medical marijuana dispensaries.

A few weeks later, Los Angeles voters approved a ballot measure that limits the number of pot shops in the city to 135, down from an estimated high of about 1,000. By contrast, whitepages. com lists 112 Starbucks in the city…

In 2010, California voters opted against legalizing marijuana for recreational use, drawing the line at medical use.

But Jeffrey Dunn, a Southern California lawyer who has represented cities in pot cases, says that in reality the state’s dispensaries have been operating so loosely that already “it’s really all-access.”

“What we’ve learned is, it is very difficult if not impossible to regulate these facilities,” he said.

The people may have voted for marijuana in California.  But the people didn’t like living in a Cheech and Chong movie surrounded by stoners.  And seeing a pot shop every time they turned around.  Which is the last thing a parent wants.  To have it so much easier for their kids to smoke pot.  Or eat it.

A Denver-area hospital, for example, saw children getting sick after eating treats and other foods made with marijuana in the two years after a 2009 federal policy change led to a surge in medical marijuana use, according to a study in JAMA Pediatrics in May. In the preceding four years, the hospital had no such cases.

The Colorado Education Department reported a sharp rise in drugrelated suspensions and expulsions after medical marijuana took off.

“What we’re doing is not working,” says Dr. Christian Thurstone, a psychiatrist whose Denver youth substance abuse treatment centre has seen referrals for marijuana double since September. In addition, he sees young people becoming increasingly reluctant to be treated, arguing that it can’t be bad for them if it’s legal.

You decriminalize marijuana and, of course, kids will see that as an admission from the state that smoking pot can’t be bad for you.  So more kids use the drug.  Ending up in the hospital.  Getting suspended or expelled from school.  Or in drug rehab for a pot addiction.  But the left is okay with this.  Because, after all, it is the right that hates kids.  Whereas the left is the cool uncle that will let their niece and/or nephew smoke a joint.  Which is why the kids love the left.  They are always helping them do things their parents won’t let them do.

Legalization foes Opponents counter with a 2012 study finding that regular use of marijuana during teen years can lead to a long-term drop in IQ, and another study indicating marijuana use can induce and exacerbate psychotic illness in susceptible people. They question the notion that regulating pot will bring in big money, saying revenue estimates are grossly exaggerated…

They warn that baby boomers who draw on their own innocuous experiences with pot are overlooking the much higher potency of today’s marijuana.

In 2009, concentrations of THC, the psychoactive ingredient in pot, averaged close to 10 per cent in marijuana, compared with about four per cent in the 1980s, according to the National Institute on Drug Abuse.

So the left will sacrifice our children for money.  So they can pay for those costly public sectors breaking their budgets.  They won’t take on the public sector unions.  But they will sacrifice our kids.  Because kids don’t pay taxes.  Or vote.  Yet.  But when they do they hope they will remember their cool uncle when in the voting booth.

The baby boomers, who filled the theaters watching Cheech and Chong movies, look back to their days of pot smoking with nostalgia.  Thinking they turned out all right.  And so will the younger generation.  As they anxiously wait for the decriminalization of marijuana so they can buy more.  And smoke more.  Loving the high potency of the new stuff.  Not at all like the stuff they grew up smoking.  Which still fried their brains.  Providing a head start to what dementia will do to them as they reach their golden years.

Kids will on average start smoking at an earlier age.  More of them will smoke because if it’s legal it can’t be bad for you.  And they will be smoking a more potent marijuana than their parents smoked.  Accelerating the damage pot smoking will do to them compared to what it did to their parents.  But the left is okay with that.  Because it is the right that hates the children.  Not the cool uncle.  At least that’s how the youth vote will see it.  Which is all that matters to the left.

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U-3, U-6 and the Labor Force Participation Rate 2004 through February 2013

Posted by PITHOCRATES - March 12th, 2013

History 101

During Obama’s First Term the U-3 and U-6 Unemployment Rates moved Further Apart

The latest employment data showed the official unemployment rate fell in February to 7.7% from 7.9% in January.  The Labor Department also reported the addition of 227,000 new jobs.  Proof, the economists say, that the economy is improving.  But when you dig deeper into the data you find otherwise.  For the economy may have added 227,000 new jobs but 296,000 jobs left the labor market.  And they didn’t count these people as unemployed.  So there was a net loss of jobs.  Despite the fall in the official unemployment rate.

We keep saying official unemployment rate for a reason.  For the government has six different unemployment rates.  The ‘official’ rate is what they call U-3.  Which doesn’t count a lot of people who can’t find full time work.  A more inclusive rate is the U-6 number (see Labor Force Participation Rate for an explanation of the U-3, U-6 and the labor force participation rate).  The U-6 rate counts pretty much everyone who can’t find a full-time job.  Including discouraged workers, the marginally attached and those working part-time because they can’t find a full-time job.  Before the Great Recession (during the George W. Bush administration) the U-3 and U-6 unemployment rates tracked closer together than they do now (during the Barack Obama administration).  As we can see in the following chart (see Data Retrieval: Labor Force Statistics (CPS) for data source).

Unemployment Rates U3 U6 2004-2013

During Bush’s second term U-3 was between 4% & 6%.  And U-6 was between 8% and 10%.  But during Obama’s first term U-3 shot above Bush’s U-6.  And Obama’s U-6 soared to twice Bush’s U-6.  Most of this was due to the subprime mortgage crisis.  And the resulting Great Recession.  But that doesn’t explain why the graphs moved further apart.  And why did they do this?  Was it because they were overstating U-6?  Were they understating U-3?  Or is there some other explanation?  It has to be something.  And it’s likely not good.

The Official Unemployment Rate has been Understated by at least 2.9 Points during the Obama Presidency

During President Bush’s second term there was on average a 4-point spread between U-3 and U-6.  During President Obama’s first term this point spread increased to 6.9.  A difference of 2.9 points.  Which if we subtract to U-6 or add to U-3 the graphs will move closer together.  So they track each other at the same distance apart from each other they did during Bush’s second term.  When you look at the labor participation factor and the lost jobs one can only assume we’re understating U-3.  And not overstating U-6.  So if we add 2.9 points to U-3 after December 2008 the graphs look like this.

Unemployment Rates U3 Adjusted U6 2004-2013

We can ignore the sharp rise in U-3 adjusted.  As the loss 2.9 points of the U-3 unemployment rate would not have been instantaneous once January 2009 hit.  But once we get to the new highs the graphs maintain the same distance from each other as they did during Bush’s second term.  Which means the official unemployment rate didn’t fall from approximately 10% to 8% during Obama’s first term.  It actually fell from 12.9% to 10.6%.  And that the current official unemployment rate is not 7.7%.  But 10.6%.  Which is, of course, 2.9 points higher.

So the official unemployment rate is higher than they report.  With the official unemployment being understated by at least 2.9 points.  And the economy is not improving like they say.  Anyone reading the jobs data can see this.  But the Obama administration and their friends in the media, as well as mainstream economists, all say everything is getting better.  Or they say it is just the new normal.  To provide some cover for their failed Keynesian economic policies.  Which failed to pull the economy out of the Great Depression.  They failed to pull the economy out of the stagflation of the Seventies.  And they are now failing to pull the economy out of the Great Recession.

The ‘New Normal’ under President Obama has been a Steadily Declining Labor Force Participation Rate

Keynesian economics calls for the government to have control of interest rates.  They keep interest rates artificially low.  To expand the money supply.  They also increase taxes.  And borrow money.  Just so they can spend.  A lot.  For Keynesian theory says when the economy falls into recession the government should spend.  Even if it requires running a deficit.  To generate economic activity.  But expanding the money supply only causes inflation.  And higher prices.  Which dampens economic activity.  Which is why we have never spent our way out of a recession.  And never will.

President Obama is a Keynesian.  His Keynesian policies have hindered, not helped, the economic recovery.  And his excessive regulations have further hindered the economic recovery.  He shut down the domestic oil industry on public lands.  His war on coal has laid off swaths of coal miners and others in the coal industry. His rejection of the Keystone XL Pipeline has prevented the creation of thousands of new jobs.  His environmental regulations have increased the cost of doing business.  As has Obamacare.  Which has put a freeze on new hiring.  And pushed lot of full time people to part time.  Nothing this administration has done has helped the economy.  While most everything it has done has hurt the economy.  And we can see that when we look at the labor force participation rate.  When we graph it along with U-3 (the official rate not the adjusted rate) and U-6 (see Employment Situation Archived News Releases for data source).

Unemployment Rates U3 U6 Labor Participation Rate 2004-2013

And here we see what caused U-3 and U-6 to move further apart.  U-3 is understated because people are continually leaving the labor force.  Unable to find a job.  This is why we have a net loss of jobs even when they report a gain of 227,000 new jobs in February.  Or a gain in any other month.  This is why the economy hasn’t improved under President Obama.  Despite what the official unemployment rate is.  And despite all of the new jobs they’ve created.  Because the ‘new normal’ under President Obama has been a steadily declining labor force participation rate.  Meaning he is a job destroyer.  And the only reason why the unemployment rate falls is because these people disappear from the labor force and they just don’t count them anymore.  Sort of how the European employment picture improved after the plague.  So many people left the labor force by dying that it created a labor shortage.  And low unemployment.  The problem here is that these people didn’t die.  They’re still out there waiting to rejoin the labor force.  To hire into jobs that are just not there.  And it’s going to take a long, long time for the economy to absorb these people.  Meaning the economy won’t be getting better anytime soon.  Because it’s a lot worse than they’re reporting.

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Third Party

Posted by PITHOCRATES - December 1st, 2011

Politics 101

Representative Government changed Government to Serve the People instead of the Other Way Around

Politics can be confusing.  And dirty.  Which tends to put most people off.  Many only get involved during big elections.  And even then voter turnout can be low.  In addition to the confusion and dirt there’s a feeling of apathy.  Nothing ever changes.  And they feel that it really doesn’t matter if they vote or not.  So many don’t.

They feel that it doesn’t matter who you send to Washington.  Because once there even the honest become corrupt.  Republican.  Or Democrat.  They’re both the same.  Rich and powerful.  Joining other rich and powerful.  In their little games.  So this feeling of apathy is understandable.

But politics matter.  Because it is and always has been a power struggle.  And understanding the essence of this power struggle is important.  For throughout time this struggle has been between competing oppressors who wanted to establish minority rule over the masses.  So the few could live comfortably at their expense of the many.  And it was like this for a long, long time.  Until representative government.  When government began to serve people.  Instead of the other way around.

Third Party Candidates often Rise up from Voter Apathy and Anger

Of the two major political parties, one is for the growth of government.  And one is for limiting the growth of government.  One is for higher taxes.  One is for lower taxes.  One is for higher regulation of the free market.  And one is for rolling back excessive regulation.  One is for transferring wealth from the private sector to the public sector.  And one is for leaving wealth where the wealth creators created it.  In the private sector.  One party serves those within the party (by growing government).  And one party serves the people (by limiting government).  Disagree?  If so I’m guessing you still know which party we’re talking about.  Even if you do disagree.

So there is a difference between the two major parties.  Sometimes it’s hard to see because of the game of politics.  Winning elections.  And many believe the way to win elections is by buying votes.  And both political parties do this.  Spend a lot of taxpayer money on projects for their home district to make their constituents happy.  Grateful.  And, hopefully, in a ‘return the favor’ frame of mind at election time.  But to get pork for your district you often have to let others get pork for their districts.  A little you vote for my pork and I’ll vote for your pork.  Which puts a lot of people off when it comes to voting.  Gives them the feeling that all politicians are the same.  And leads to all that apathy.  Setting the field for third party candidates.

So what is a third party candidate?  They are many things.  But one thing they are not is this.  Winners.  Because they don’t win elections.  Third party candidates often rise up from that voter apathy.  And anger.  Fed up with their party, they split and form a third party.  Thinking they know how best to beat the opposition candidate.  Because they know what single issue will carry the election.  Or so they think.  But all they do is help the opposition candidate they so loathe to victory.  By splitting the vote against the opposition candidate.  Because they don’t think.  They feel.  And let their passion for a singular issue overcome rational thought.

The Majority of Voters Vote to either Expand or Limit the Role of Government in our Lives

And then you have the fringe ideologies so far out of mainstream thought that they don’t have a snowball’s chance in hell of winning a national election.  Such as the Green Party.  The Reform Party.  The Libertarian Party.  The Socialist Party USA.  The International Socialist Organization.  The Socialist Labor Party of America.  The Socialist Workers Party.  The Communist Party USA.  The People’s Front of Judea.  The Judean People’s Front.  The Judean Popular People’s Front.  And, of course, the Popular Front of Judea.  Splitter!

Okay, the Judean stuff is from a scene in the classic movie Monty Python’s Life of Brian.  But it illustrates as well as belabors the point.  Third party candidates are destined for failure.  Because there’re too many of them.  And they don’t differentiate themselves enough to make significant numbers of people leave either of the main two parties.  At least they haven’t yet.  And probably never will.  Though, surprisingly, Ross Perot came closer than most to winning a presidential election.  But he and his Reform Party soon faded to political oblivion.  Which was far less surprising.

You see, the majority of voters don’t base their vote on these fringe, single issues.  Or extreme ideologies.  Instead they vote to either expand the role of government in our lives.  Or vote to limit the role of government in our lives.  For more of a nanny state.  Or less of a nanny state.  For a Democrat.  Or a Republican.  It’s that easy.  And with the large amount of voter apathy and anger that’s enough politics in their lives.  Either the Democrat bum if you want more free stuff.  Or the Republican bum if you are optimistic but expect to be disappointed later.  When you see your limited government candidate expand government, albeit smaller than what the Democrat candidate would have done.

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Liberal (lĭb’ər-əl), n., One who adheres to the social and political philosophy of (neo) liberalism.

Posted by PITHOCRATES - October 27th, 2011

Politics 101

The Single Goal of Liberalism is to Transfer as much Wealth and Power from the Private Sector

The Founding Fathers were liberals.  They believed in individual liberty.  Personal responsibility.  The Rule of Law.  And limited government.  Very limited government.  Very, very limited government.  Not something you associate with liberals today.  Which is why we must call the Founding Fathers classical liberals.  Because liberalism today isn’t our Founding Fathers’ liberalism.  In fact, it’s what they rebelled against.  Privilege.

Liberals today are a small sliver of the population.  About 20%.  And they’ve been around forever.  They’ve just had different names.  The nobility.  The aristocracy.  The planter elite.  Those born of privilege.  And who live off of the wealth created by others.  Through inheritance.  Through land ownership.  Or via taxation.  This privileged class does not work.  No.  They get others to create wealth for them.  And their tool is class warfare.

Their single goal is to make government as large as possible.  For the larger it is the more wealth and power they can transfer from the private sector.  And there is nothing more effective for growing government than pitting one group of people against another.  Rich against poor.  Employees against employers.  Labor against capital.  Consumers against corporations.  And, of course, racism, sexism, ageism, whateverism.  Whoever you are they’ll find someone who has discriminated against you.  And they’ll use that to their advantage.  To legislate a new law in Congress.  Or from the bench in the judiciary.

Liberals get us Accustomed to Living on the ‘Kindness’ of Government and Terrified of Losing the Government Way of Life

Liberals don’t see individuals.  They see the group the individual belongs to.  And how they can use one group to agitate another.  To advance their agenda.  To increase taxation.  And regulation.  To grow government.  To extend their power and influence over the private sector.  So secure their position of privilege.

They once called themselves the ruling elite.  And ruled accordingly.  Until the inconvenience of elections.  Representative government.   And a Constitution that limits their power.  Now they have to be stealthier.  And hide who they are.  What they truly believe.  And use the courts to make law that they can’t legislate in Congress.  How do they do this?  By dumbing down our public education.  Changing the meaning of words.  And by fooling us.  By hiding in a ‘benevolent’ Big Government.  A government that protects the poor.  The disadvantaged.  The little guy.  When in fact they use the poor, the disadvantaged and the little guy to secure their position of privilege.  For if they actually helped these people their work would be done.  And that’s the last thing they want.  To lose their expanding powers to regulate and tax.

So they extend their power and control over us.  While telling us it’s for our own good.  And make as many of us dependent on them as possible.  By providing generous welfare programs.  Social Security.  Medicare.  And now Obamacare.  Getting us accustomed to living on the ‘kindness’ of government.  And making us terrified of losing our government way of life.

Liberals Consume Tax Dollars and Benefit from a Growing Government that Increases Taxes and Regulations

Liberals consume tax dollars.  They don’t pay tax dollars.  The private sector taxpayers pay the salary and benefits of all politicians.  Public sector employees.  Public school teachers.  And college professors.  Via ever escalating tuition prices that no liberal ever objects to.  (Unlike rising prices in the private sector.)  Either paid for by rich parents.  Or student loans.  Once backed by the government.  Now issued by the government.

Liberals enjoy generous pay and benefit packages courtesy of the taxpayer.  In return liberals in education advance the liberal agenda.  (Ask a kid to explain global warming and capitalism and guess which one he or she will be able to explain).  Liberals in unions repay that government kindness (such as favorable legislation that restricts competition) through generous contributions from their union dues.  And agitate, organize and vote for the liberal agenda.  To keep the spigot of that government kindness open.

And then you have the guilty-rich.  People who try to assuage their guilt of inheriting their wealth.  Those who made it rich in the movies.  In music.  In sports.  As an author.  Anyone who got obscenely wealthy.  But doesn’t want to be attacked for being obscenely wealthy.  Like those on Wall Street.  And those corporate CEOs.  So they, too, advance the liberal agenda.  While sheltering their wealth from the greedy hands of government.

Then there’re the pseudo-intellectuals.  Those who advance the liberal agenda to sound smart.  Or to be included in the inner circle of the elite.  Those in the mainstream media.  And celebrities.  Who cry out desperately for affirmation.  That they are more than just someone pretending to be someone else.  Or simply someone reporting on the exciting lives of others.

Finally the young.  The uneducated.  Or poorly educated.  Who don’t understand capitalism, economics, history or public policy.  And they don’t care.  As long as they get something.  Government benefits.  Or fun.  Whether it be sex and drugs.  Or the thrill of protesting.  Anything to escape living in the real world.  Those who just don’t want to grow up.  And become responsible adults.  Like their parents.  Until they start raising a family.  Then they are exactly like their parents.  So the liberals have to get them while they’re young.  And keep them woefully ignorant about the real world for as long as possible.

The Liberal Social and Political Philosophy has the Simple Goal of Securing their Position of Privilege

The liberal social and political philosophy is simple.  Everything they believe, everything they do, has but one goal.  Securing their position of privilege.  Which explains a record of contradiction and failure.  Such as ‘working hard’ to create jobs while the economy wallows in recession due to an unfriendly job-creating environment.  Because of their high taxes.  Costly regulations.  And the great uncertainty of what will come next.

But when you understand their goal it makes perfect sense.  High taxes and regulation extends their control over the private sector.  And recession sets the stage for Keynesian stimulus spending.  Which creates more government programs.  Paid for by higher taxes.  Which is more wealth transferred from the private sector.  Further extending their control over the private sector.

Liberal policy, then, makes perfect sense.  When you understand its goal is to expand their control over the private sector.  To secure their position of privilege.  Because when you do you’ll see that this policy has never been contradictory.  And it has never failed.

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The Occupy Wall Street Protesters don’t want Fairness, They want Privilege

Posted by PITHOCRATES - October 9th, 2011

People who hate Capitalism hate America

Those on the Left keep trying to paint these Wall Street protesters as the Left’s version of the Tea Party.  Only better because they are standing up to corporate greed.  But when you step back and look at the broader picture you see some interesting things.  For one, our enemies abroad hate the Tea Party.  And love these Wall Street protestors (see Iran calls Wall Street protests ‘American Spring’ posted 10/9/2011 on The Associated Press).

An Iranian military commander said Sunday that the protests spreading from New York’s Wall Street to other U.S. cities are the beginning of an “American Spring,” likening them to the uprisings that toppled Arab autocrats in the Middle East.

Gen. Masoud Jazayeri of Iran’s Revolutionary Guard said the protests against corporate greed and the gap between rich and poor are a revolution in the making that will topple what he called the Western capitalist system.

So the Occupy Wall Street people have the support of Nancy Pelosi, Hugo Chavez and this guy.  This Iranian general.  Who hates America.  And would love nothing better than to see its collapse.  There’s a lesson here.  People who hate capitalism hate America.

What strange bedfellows.  Pelosi.  Chavez.  And this Iranian general.

Class Warfare Works because Gullible People are Fed with Misinformation to Produce a Withering, Festering Hate

But they don’t see that.  These Occupy Wall Street people.  All they keep hearing is how the rich are screwing them.  And business owners are getting rich by underpaying them.  Because many of them think gross sales are also net profits.  They’re not.  And have no idea of what it costs to run a business (see Small Business, Occupy Wall Street Is Aimed at You! by T. Scott Gross posted 10/9/2011 on Forbes).

Small business owners, this protest is about money—yours. And if you want to bring a semblance of sanity to the discussion, you had better start showing the money…

So I say you had better show them the money. Gather your employees. Take a handful of coins that add up to a dollar. Swipe away your cost of goods. Take out payroll and then payroll taxes. Follow with utilities, cost of capital, training, advertising, maintenance, insurance, and the rest until you have accounted for all the overhead, leaving those few lonesome pennies of profit that you have risked everything to make.

Been there.  Done that.  The problem is they won’t believe you.  Because they’ve been so brainwashed to believe you are lying when it comes to the money.  Say all you want but someone is telling them, “Sure, they say that, but look at the car your boss drives.  The house your boss lives in.  Are they better than yours?  You bet they are.  And you know why?  Because they’re screwing you.  That’s why.”

This is why class warfare works so well.  You have people who don’t know any better.  Being fed with misinformation to produce a withering, festering hate.  Which is how people like Nancy Pelosi, Hugo Chavez and this Iranian general rise to power.  By exploiting the gullible masses.

The Obama Administration wants us to Hate People Making $250,000 or More

This kind of hate makes it easy to tax the rich.  Which is a very popular sentiment these days.  Because everyone hates the rich.  Especially those who don’t make the rich cut (see Democrats aim to tax the rich — but who are they? by Kathleen Hennessey posted 10/8/2011 on the Los Angeles Times).

President Obama and Democrats in Congress have aligned on a populist, “tax the rich” strategy for the 2012 campaign. Now they have to figure out exactly who that is…

Obama and his fellow Democrats for years have described the wealthy as couples making more than $250,000 and individuals making more than $200,000 — 3% of U.S. households. By shifting away from that number in hopes of benefiting from the sound-bite punch of a millionaires tax, the administration may find it difficult to return to casting the broader net…

Obama’s threshold was based on broad principles, including the desire to leave the middle class untouched by higher taxes while collecting “enough” tax revenue, Bernstein said, although even he quibbles with the president’s cutoff and suggests that a broader tax increase may be needed in the future.

Going in the other direction — aiming for incomes of $1-million-plus — would yield far too little revenue to fund “a recognizable government,” Bernstein said. While the Democrats’ surtax proposal may make sense to pay for a jobs bill, “it’s actually quite important that $1 million does not become the new $250,000 when it comes to the permanent tax base,” he added.

Well, that complicates things.  Who’s rich?  People earning $1 million or more?  Or people making more $250,000 or more?  Who exactly are we to hate?

The Obama administration wants us to hate people making $250,000 or more.  Because there are a lot more of them than millionaires.  So that’s a lot more money they can spend.  But it’s also a lot of people to piss off by raising their taxes.  And with an election year coming up that’s the last thing those up for reelection in Congress want to do.

But if they only settle for $1 million now will that mean it will be harder to hate those making between $250,000 and $1 million later?  Oh me oh my.  Just who to hate?  As you can see this is quite the quandary for the hate monger.

Stimulus is Temporary whereas Tax Cuts and Deregulation are Forever

But there is a bigger issue at play.  You see, the problem with hating those earning between $250,000 and $1 million is that this income range includes our small business owners.  The job creators.  Who tend to not create jobs when things bother them.  Such as people waving their pitchforks at them crying, “Tax!  Tax!  Tax!” (see Poor Sales by Russ Roberts posted 10/9/2011 on Cafe Hayek).

Finally, I would note that while the survey that Invictus cites does indeed list “Poor Sales” as the single most important problem (25% in the September survey (scroll down to “Single Most Important Problem), taxes are listed as the single most important problem by 18% and government regulations and red tape is listed by 19%. So the two combine to 37%. They also happen to be two factors that government can actually control.

The Keynesians look at this and say we need more stimulus.   But if they’re saying this after that $800 billion stimulus in 2009 you can have but one conclusion.  Stimulus doesn’t work.  A big reason for this is that stimulus is temporary.  Like pain.  Whereas tax cuts and deregulation are like pride.  They’re forever.

Sales are complicated.  A lot of things influence people before they depart with their hard-earned money.  And there’s not a lot government can do about that.  But there’s a lot they can do about taxes and regulations.  And they do.  Unfortunately, they always choose to do the wrong thing.

The Occupy Wall Street People are Angry at Capitalism because they weren’t Born into Privilege

There are a few kinds of people in the world.  The informed.  Such as Tea Party People.  Who cite law and tradition in at their Tea Party events.  And the uninformed.  Such as the Occupy Wall Street People.  Who are an angry mob.  Angry at capitalism because they weren’t born into privilege.

And then you have people who love America.  And those who hate America.  Such as Iran.  And Hugo Chavez in Venezuela.  Enemies of freedom.  And democracy.  Who have come out to support the Wall Street protestors.  There’s another lesson here.   Actually, it’s the same lesson as before.  People who hate capitalism hate America.

Here’s a solution to solve their unhappiness.  Let’s ask these protesters which country is better than America.  Whatever nation that is we’ll generously pay for their one way airfare there.  Problem solved.  Everyone happy.

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Obama Prolongs the Recession with High Food and Gas Prices and anti-Business Policies

Posted by PITHOCRATES - May 27th, 2011

Consumer Spending and Wages are Flat thanks to Inflation

Consumer spending at last shows some growth.  No, wait a minute.  It’s not growth.  It’s only inflation (see April consumer spending shows weak gain by the Associated Press posted 5/27/2011 on the Los Angeles Times).

Consumer spending rose 0.4 percent, reflecting a surge in the category that covers food and gasoline, areas which showed big price gains last month, the Commerce Department reported Friday. Excluding price changes, spending rose a much smaller 0.1 percent.

Incomes rose 0.4 percent but after-tax incomes adjusted for inflation were flat for a second straight month.

Analysts are worried that weak income growth and big gains in gasoline and food prices are leaving consumers with little left to spend on other products. That could dampen economic growth. Consumer spending is closely watched because it accounts for 70 percent of economic activity.

Increased consumer spending is a good thing.  But not when consumers are only paying more for the same stuff.  That’s not new economic activity.  That’s just inflation making life more expensive.  Food and gasoline are the main culprits.  And it’s gasoline that plays a large role in making food more expensive.  Because gasoline is used everywhere in bringing food to our grocery stores.

Worse, Americans are paying more.  But not earning more.  Which leaves less disposable income to stimulate the economy. In other words, the U.S. is still in recession.  And won’t be coming out of it anytime soon.

Still no Recovery in the Housing Market

So we’re still mired in recession.  Of course that means houses should still be cheap.  With low interest rates.  Put the two together and someone should be buying houses at least (see Pending Home Sales Plunge, Reaching Seven-Month Low by Reuters posted 5/27/2011 on CNBC).

Pending sales of existing U.S. homes dropped far more than expected in April to touch a seven-month low, a trade group said on Friday, dealing a blow to hopes of a recovery in the housing market.

Damn.  Housing sales had been the backbone of the U.S. economy.  Because furnishing a house drives so much consumer spending.  The more people that bought houses the better.  So that was U.S. policy.  Putting people into houses.  Which led to the subprime mortgage market.  A housing bubble.  The subprime mortgage crisis.   And a glut of foreclosed homes on the market driving housing prices down further.

It’s a buyer’s market now.  Because so few are buying.  So the economy is not going to get any assistance from the housing market any time soon.

Universal Health Care Ruins Massachusetts First, then the United States

So things are bad.  But can they get any worse?  Are there any new big regulatory compliance or taxes in the pipeline?  Anything that could snuff out even the most anemic of economic recoveries?  As it turns out, yes (see Health Insurance Premiums Continue to Rise Under RomneyCare by Peter Suderman posted 5/27/2011 on reason).

Not only are Masachusetts’ health insurance premiums higher than elsewhere in the U.S. on average, they’ve grown at a faster rate since the adoption of RomneyCare, according to a report released yesterday by the state government. The report, which was published by the state’s Division of Health Care Finance & Policy, notes that for the last two years, private group insurance premiums rose by between five and 10 percent per year despite the fact that the regional consumer price index, which measures inflation on common goods and services, rose by just two percent..

The Obama administration has explicitly stated on numerous occasions that RomneyCare was the model for the federal overhaul. Given the Bay State’s spiraling costs, it seems more and more likely that, thanks to ObamaCare, we can all expect higher health insurance premiums in our future.

So Obamacare is Romneycare at the national level.  So the American people can expect spiraling health care costs and insurance premiums.  That can’t be good for the economy.

Obamacare hasn’t really kicked in yet.  Most of the activity has been by companies seeking waivers to be excluded from the requirements of Obamacare as it places too great a cost burden on their small businesses.  But these are only one-year waivers.  So small business costs will be going up eventually.  When they do in fact comply with Obamacare.  And that will be a great disincentive to hire new employees.  Being that small business is the biggest generator of jobs, Obamacare will further stretch out this recession.  Or make it an even more severe recession.

The Obama Administration would like Gas at $8/Gallon

If only we could get a break on gasoline prices.  That is such a large part of consumer prices that if they went down the economy might tick up.  So the government should focus all of its powers on lowering gas prices (see Obama’s Bad Policy, Harmful Regulations Add to Gas Prices by Darrell Issa posted 5/27/2011 on USNEWS).

From the campaign trail, then Senator Obama spoke of increased electricity prices as a means for advancing his agenda, noting that costs would “necessarily skyrocket.” Energy Secretary Stephen Chu was equally blunt. “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe [currently $8 a gallon],” Mr. Chu announced. Last year, President Obama declared that America must be the nation that leads the “clean energy economy.”

So the plan was to make gasoline prices high all along.  To make gasoline so expensive that the more expensive green energy became cost competitive.  To encourage the American people to choose it.  And by ‘encourage’ I mean force.  Talk about devious. 

Even as compliance costs for traditional and affordable sources of energy rise, the administration’s willingness to promulgate even tighter regulatory controls and raise taxes on oil and gas producers rolls along. In his fiscal year 2012 budget, President Obama requested more than $60 billion in direct tax and fee increases on American energy production over the next 10 years.

Tighter regulatory controls and higher taxes won’t help the economy.  Especially when those controls and taxes are on the one thing that drives most prices.  Gasoline.  It’s almost as if the Obama administration is trying to prolong the greatest recession since the Great Depression.

The Government’s Help is killing Small Business

So how about the man in the street.  Or, rather, a man on an airplane.  Stephen Carter, Yale law professor, sat next to a small business owner on a recent flight.  An actual person.  Not the abstract business people who are trying to cheat the government out of their taxes or take grandma’s medications away.  A flesh and blood real person.  They had an interesting conversation.  About small business.  The greatest generator of American jobs.  And he asked this business owner why he was prolonging the recession by not hiring new employees (see Carter: Economic Stagnation Explained, at 30,000 Feet by Stephen L. Carter posted 5/26/2011 on Bloomberg).

“Because I don’t know how much it will cost,” he explains. “How can I hire new workers today, when I don’t know how much they will cost me tomorrow?”

He’s referring not to wages, but to regulation: He has no way of telling what new rules will go into effect when. His business, although it covers several states, operates on low margins. He can’t afford to take the chance of losing what little profit there is to the next round of regulatory changes. And so he’s hiring nobody until he has some certainty about cost.

One thing business people don’t like is uncertainty.  Because when they screw up they can’t just raise taxes or print money.  They have to deal with real the consequences of bad decisions.  So they are very careful about making costly decisions.  Like hiring people.

“I don’t understand why Washington does this to us,” he resumes. By “us,” he means people who run businesses of less- than-Fortune-500 size. He tells me that it doesn’t much matter which party is in office. Every change of power means a whole new set of rules to which he and those like him must respond. ‘‘I don’t understand,” he continues, “why Washington won’t just get out of our way and let us hire.”

Republican.  Democrat.  It doesn’t matter.  Every time there is a change there are new rules to follow.  And more of that thing they so hate.  Uncertainty.

“I think about retirement a lot,” he says. “But I can’t.” I wait to hear about how much he loves the business he founded, or about his responsibilities to his employees, or perhaps to the town, somewhere in the Dakotas, where his factory is located. Instead, he tells me that it’s impossible to make a sensible decision about winding down his firm when he doesn’t even know from one year to the next what the capital gains rate is going to be.

So it’s just not the Wall Street robber barons affected by the capital gains tax.  The greatest employer, small business, is affected, too.  He is just one of many.  Unable to make decisions like when he can retire.  Does he have enough money to retire?  And pay his capital gains tax?  If not it could be a problem.  Because you just can’t un-retire when you sell or close down a small business if you calculated wrong.  Instead, you’ll be an old guy trying to find a job.

I ask him what, precisely, he thinks is the proper role of government as it relates to business.

“Invisible,” he says. “I know there are things the government has to do. But they need to find a way to do them without people like me having to bump into a new regulation every time we turn a corner.” He reflects for a moment, then finds the analogy he seeks. “Government should act like my assistant, not my boss.”

An assistant doesn’t tell the boss how to run his business.  Because an assistant doesn’t know how to run his boss’ business.  Government bureaucrats aren’t even as knowledgeable as the assistant.  The assistant at least has a job in a business.  Few in Washington have ever run a business.  Let alone had a real job.  Yet here they are constantly trying to tell others how to run their businesses.

On the way to my connection, I ponder. As an academic with an interest in policy, I tend to see businesses as abstractions, fitting into a theory or a data set. Most policy makers do the same. We rarely encounter the simple human face of the less- than-giant businesses we constantly extol. And when they refuse to hire, we would often rather go on television and call them greedy than sit and talk to them about their challenges.

Recessions have complex causes, but, as the man on the aisle reminded me, we do nothing to make things better when the companies on which we rely see Washington as adversary rather than partner.

The best thing Washington can do to help small business?  Stop helping. 

In the Recession Business?

From small business regulation to inflation to the high cost of health care to the high cost of gasoline it would appear that the current administration is actually in the recession business.  Or utterly incompetent.  One almost has to lean towards incompetence.  Because there is an election in 2012.  And making the worst recession since the Great Depression more like the Great Depression can’t possibly help at the polls.  Even if you have compromising photographs of the Republican candidate having a good time with someone that is not his or her spouse.

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Energy Drives both Food Prices and the Economy. And Politics.

Posted by PITHOCRATES - March 16th, 2011

The Left Promotes and Attacks Electrical Power

The Left wants to get rid of the internal combustion engine and make all cars green.  Plug-ins.  Cars with batteries that charge by plugging them into electrical outlets.  They say it will break our dependence on foreign oil.  And stimulate the economy with new green technology.  For the same reason they want to dot the landscape with high-speed electric trains.  They want to make everything electric.  Because electric motors don’t pollute.

At the same time there is an all out assault on electrical generation in this country.  The nuclear power industry (the closest to a ‘green’ useful source of electricity we have) has been stalled since 1979 thanks to The China Syndrome and Three Mile IslandHydroelectric dams (another ‘green’ source of useful electricity) kill fish and alter the ecosystem.  So we can’t build them anymore.  With two down they’re turning their sights onto fossil fuels.  And they’re locked and loaded (see E.P.A. Proposes New Emission Standards for Power Plants by John Broder and John Collins Rudolf posted 3/16/2011 on The New York Times).

The Environmental Protection Agency proposed the first national standard for emissions of mercury and other toxins from coal-burning power plants on Wednesday, a rule that could lead to the early closing of dozens of generating stations and is certain to be challenged by the utility industry and Republicans in Congress…

She estimated the total annual cost of compliance at about $10 billion, in line with some industry estimates (although some are much higher), and the health and environmental benefits at more than $100 billion a year. She said that households could expect to see their electric bills rise by $3 to $4 a month when the regulation is fully in force after 2015.

With the country struggling to come out of the greatest recession since the Great Depression they want to raise the cost of energy?  For what?  Health and environmental benefits they pull out of the air (there are no ledgers anywhere totaling these costs)?  To offset one of the highest regulatory costs to come down the pike in history?  This is insanity.  One has to ask do they want to push the nation into a depression?  Or are they that ignorant in things economic?

She said that installing and maintaining smokestack scrubbers and other control technology would create 31,000 short-term construction jobs and 9,000 permanent utility sector jobs.

Okay, we increase the cost of electricity forever but we get a few temporary construction jobs.  Construction jobs aside, if you do the math, each of those new permanent jobs will end up costing us over $1 million each year.  In addition to their wages and benefits.  All paid for by the electrical consumer.  The fact that they talk about this as a good thing shows their utter ignorance of things economic.  And contempt for the consumer.

The National Association of Manufacturers said the proposed rule would lead to higher electricity prices and significant job losses.

“In addition, electric system reliability could be compromised by coal retirements and new environmental construction projects caused by this proposed rule and other E.P.A. regulations,” said Aric Newhouse, the group’s vice president for government relations. “Stringent, unrealistic regulations such as these will curb the recent economic growth we have seen.”

Manufacturers use a lot of electricity.  The more they have to pay for it the less they can spend elsewhere.  The new utility costs will always be there.  To stay competitive in the market, they will have to offset that permanent increase with cuts in their operating costs.  Translation?  Layoffs.  Or they simply will not hire new people.  Instead they will make capital investments to increase their productivity.  And use fewer people.  This is how they do things when costs go up.  Either that or they will send manufacturing operations out of the country.

What Happens in Vegas isn’t much these Days

Economic activity is driven by disposable income.  That’s the money you have left after paying the things you have to pay for just to subsist.  Food.  Mortgage.  Gasoline.  Property taxes.  Those kind of things.  Once we pay these, we can splurge on economic stimulation with what’s left over.  Dinners out.  Movies.  Vacations.  And gambling (see The Penny Slot Economic Indicator by Douglas French posted 3/16/2011 on Ludwig von Mises Institute).

Those at the Fed and in the financial press are telling us that the economy is turning around. Corporate America is ginning up profits so prosperity on main street can’t be far away…

However, if gaming trends in Nevada are any indication the middle class is hurting. Tourism and gaming peaked in 2007, with middle America making the trek to the gambling city to sit down and play a little blackjack (or 21). Latest figures have blackjack revenue down 31 percent from 2007, the Las Vegas Sun reports.

Last year was the first time baccarat, a game favored by Chinese high-rollers, generated more revenue than blackjack. But the $1.2 billion in baccarat revenue pales next to the $2 billion that penny slot machines generated…

So Las Vegas is limping along dependent on high rollers from China and low rollers playing penny slots. “This is why Vegas got hammered,” Anthony Curtis, publisher of Las Vegas Advisor says. “It needs the middle market.”

Casinos worked in Las Vegas because people went to Las Vegas to lose their money.  It’s a destination city.  All the other cities who opened casinos to cure their budgetary woes saw no magic.  The middle class just spent their money at the casinos instead of at the movies or the restaurants.  And by taking staycations.  We spent the same amount of money in the community.  We just spent it at different locations.

The recession may be over according to Washington, but it’s not over for the middle class.  Because they haven’t returned to vacationing in Las Vegas.  Why?  They don’t have as much money as they used to have.  And prices are going up.  A double whammy.  They have less to spend and subsistence costs are on the rise.

If Energy Costs Rise Food Costs Rise

In the summer of 2010 the Obama administration was touting their summer of recovery.  Declaring that their stimulus spending had ended the recession.  They were a bit premature.  Unemployment is still close to 9%.  Despite all of their quantitative easing.  They printed a lot of money.  Didn’t help.  Worse, on top of stubborn high unemployment, prices are going up on almost everything (see Wholesale prices up 1.6 pct. on steep rise in food by the Associated Press posted 3/16/2011 on Yahoo! Finance).

Wholesale prices jumped last month by the most in nearly two years due to higher energy costs and the steepest rise in food prices in 36 years. Excluding those volatile categories, inflation was tame…

Food prices soared 3.9 percent last month, the biggest gain since November 1974. Most of that increase was due to a sharp rise in vegetable costs, which increased nearly 50 percent. That was the most in almost a year. Meat and dairy products also rose.

Energy prices rose 3.3 percent last month, led by a 3.7 percent increase in gasoline costs.

Separately, the Commerce Department said home construction plunged to a seasonally adjusted 479,000 homes last month, down 22.5 percent from the previous month. It was lowest level since April 2009, and the second-lowest on records dating back more than a half-century…

Food costs, meanwhile, are rising. Bad weather in the past year has damaged crops in Australia, Russia, and South America. Demand for corn for ethanol use has also contributed to the increase.

Prices rose 1 percent for apparel, the most in 21 years. Costs also increased for cars, jewelry, and consumer plastics.

Some would love to see $4/gallon gasoline again.  It would push people into electric cars and mass transportation.  But there’s a downside.  A big one.  Higher energy costs make everything more expensive.  Even our vegetables.  Because those vegetable don’t appear by magic in the grocery store.  They travel long ways on trucks that burn diesel fuel to get to the grocery store.

Food and energy are tied at the hip.  If energy costs rise food costs rise.  And when you siphon some food off to make low-energy ethanol that no one wants that just increases food costs more.  We should use food for food.  And oil for fuel.  It’s more cost efficient.  And consumers will have more money left over to stimulate the economy with.

The Left Makes a Very Poor Argument Against Nuclear Power

And speaking of energy, nuclear energy is in the news these days in a big way.  But not in a good way.  Japan has some reactors that were hit with a one-two punch of earthquake and tsunami.  The tsunami took out the cooling systems.  So there’s a little trepidation over these plants right now.  And absolute glee as anti-nuclear people exploit this for all it’s worth.  They’re saying, “See!  That’s what could happen in America right now.  And in Europe.  We need to stop all nuclear power.”  I’m paraphrasing, of course.  But you get the gist.  Why, some are even playing loose with facts.  Even lying.  And some are writing top 10 lists why nuclear power is bad and why solar and wind are good (see Too Cheap to Meter: The Top 10 Myths of Nuclear Power by Michael Rose posted 3/15/2011 on The Huffington Post).

The best way to generate new power for the long term is not to build nukes but to invest in large scale solar and wind, coupled with natural gas as a transition in the short term.

The problem has been coordinating the power produced when the wind blows and the sun shines, distributing the power and storage. There are solutions to all of these. “You need to link up the disparate sources to compensate for when the wind is blowing and the sun isn’t shining,”

Coordinating the wind and the sun?  Really?  That should be our energy policy?  And how will that work during a major blackout?  Like the Northeast Blackout of 2003?  Can solar power really run all our air conditioning systems during the dog days of summer?  Our fossil fuel-fired plants can’t always do that.  Can you imagine a hot summer without those high capacity plants?  The inevitable blackouts won’t be rolling.  They’ll simply be scheduled daily during air conditioning weather.

The nuclear industry has asked for loan guarantees from the Federal government because the banks looked at the risk and took a pass. With the loan guarantees in hand the companies can get financing and if they default, or walk away from the projects (which is what happened before) the taxpayers will be stuck with the bill. “It’s the same as if you defaulted on your mortgage and the Federal government had to step in to pay the banks back,” said Hirsch.

We saw above how new regulations are going to cost the coal-fired plant operators.  The new regulations will probably force some plants to shut down.  This is the fear of regulation.  Uncertainty.  If you change the rules midway through the game there’s a good chance you’re going to end up losing in the end.  Power plants are costly.  They are difficult to build because of the regulatory hoops you have to jump through.  It is a very high-risk game.  And nowhere are the risks and regulatory hoops greater than nuclear power.  These plants take even longer to build.  Are far more costly because of the regulatory compliance costs.  And have by far the greatest uncertainty because of the length of time from drawing board to operating on line because of these regulatory hurdles.  This is why banks don’t want to invest.  Because the government can change the rules and prevent a plant from ever going on line, leaving the bank to eat the construction costs.

It’s true that building the reactors does create jobs, but these disappear when the reactor is complete. And there are staff positions for running the reactors, providing maintenance and security but not enough to warrant the high costs and risks…

Ironically some fear that building new nukes will chase jobs away because electric rates will have to dramatically increase to pay them off. “No state ever created a net increase in jobs by raising electric rates to commercial and industrial customers. Such a policy drives jobs out of many businesses to create relatively few permanent jobs at the new reactor,” said Bradford.

Funny.  The same arguments work for other federal stimulus spending.  Those short-term construction jobs are good when they’re trying to pass a stimulus bill.  But it’s not good if it will stimulate nuclear power.  And they say here that increasing the cost of electricity will kill jobs.  Meanwhile, increasing the cost of electricity by adding new regulations for coal-fired plants will increase jobs.  Costs are funny that way.  Sometimes they’re bad.  Sometimes they’re good.  Sometimes they’re rooted in reality.  Other times, in fantasy.

France is pointed to as demonstrable proof that nuclear power can be affordable and safe. While it’s true France gets about 75% of its electricity from nuclear power and that it has avoided a large scale disaster but we don’t know very much about their accident record since its industry is nationalized and run behind a veil of secrecy…

It also adds to the costs of the producing nuclear power which is one reason French electric rates are 20% above U.S. rates despite subsidies, according to Bradford.

So, yes, France has energy independence.  And they haven’t had a nuclear disaster.  But that doesn’t mean anything.  They could.  Just because they didn’t doesn’t mean they can’t have a China syndrome next week.  Or tomorrow.  So we should proceed as if they will.  Despite their safety record.  And the cost?  Interesting.  Because the source they cite paints a little different picture.

The present situation is due to the French government deciding in 1974, just after the first oil shock, to expand rapidly the country’s nuclear power capacity. This decision was taken in the context of France having substantial heavy engineering expertise but few indigenous energy resources. Nuclear energy, with the fuel cost being a relatively small part of the overall cost, made good sense in minimising imports and achieving greater energy security.

As a result of the 1974 decision, France now claims a substantial level of energy independence and almost the lowest cost electricity in Europe. It also has an extremely low level of CO2 emissions per capita from electricity generation, since over 90% of its electricity is nuclear or hydro.

In mid 2010 a regular energy review of France by the International Energy Agency urged the country increasingly to take a strategic role as provider of low-cost, low-carbon base-load power for the whole of Europe rather than to concentrate on the energy independence which had driven policy since 1973.

Energy independence?  Low fuel costs?  Almost the cheapest electricity in Europe?  Extremely low CO2 emissions?  And the International Energy Agency wants them to be the provider of “low-cost, low-carbon base-load power for the whole of Europe…”  I don’t know.  These sound like good things to me.  Talk about being a bit disingenuous.  And by a bit I mean a lot.  Clearly they are cherry-picking some facts to forward an agenda.  Speaking of which, back to the HuffPo.

All civilian nuclear programs create spent fuel that can be reprocessed into weapons grade plutonium. This is what Iran, North Korea, India and Pakistan have done.

It doesn’t take much. At first you needed a chunk of plutonium about the size of a softball now it’s down to the size of a golf ball. “If a country has done its engineering, it can take about a week to go to a bomb,” said Gillinsky. “Safeguard inspections are too late.”

And here we come to why we use the energy we use.  Because it’s concentrated.  A little bit of nuclear fuel goes a long way.  Just like our fossil fuels.  That’s why our cars run on gasoline.  Because it’s easy to store and it’s highly concentrated.  With a small tank of fuel you can drive a very long way.  While carrying your whole family.  And a lot of your stuff.  That’s why we don’t drive electric cars.  You can’t do any of this in a battery-electric car.  The battery takes up too much space.  And you just can’t go very far on a charge.

Solar farms and wind farms are not concentrated sources of energy.  The very term we use to describe these generating ‘plants’ tells us this.  You need so many of them that we call them ‘farms’.  Not ‘plants’.  And even with a large footprint their electricity output won’t come close to what the power plants using concentrated-fuels can produce.  A couple of reactors on a small site can power a large city.  It would take a very large plantation of solar panels and windmills to produce the same amount of electricity.  And they will only produce when the sun is shining or the wind is blowing.  Our concentrated fuel-fired power plant will be there 24/7, day or night, rain or shine.

Will the Great Recession turn into the Great Depression II?

Never before has our energy policy been in such a mess.  The children have taken control of policy.  They’re promoting fanciful solar panels and windmills no doubt while dreaming of unicorns and sugar plum fairies.  They don’t understand energy.  Or economics. 

Energy costs.  Construction costs.  Fuel costs are recurring.  While construction costs are one-time.  Therefore, the best economic policy would be to minimize fuel costs.  And coal, natural gas, oil, and nuclear do just that.  You get huge amounts of energy from small amounts of fuel.  Especially nuclear.

Yes, sunshine and wind are free.  And you can’t minimize fuel costs more than free (except with nuclear that can use some nuclear waste to produce more fuel).  But the infrastructure cost to make solar and wind provide meaningful amounts of energy are staggering.  A nuclear plant can sit on a small footprint out of the way.  While solar and wind farms will take acres of land.  Or water (for offshore wind generation). 

While they play with energy and economic policies, consumer costs rise everywhere.  And will continue to do so.  As a direct consequence of their policies.  Consumers pay more.  And the greatest recession since the Great Depression drags on.  Perhaps turning recession into depression.  Could the Great Depression II be around the corner?  I hope not.  But one can’t rule it out with the current administration.

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LESSONS LEARNED #35: “Not only is ignorance bliss, but it’s a godsend to Big Government.” -Old Pithy

Posted by PITHOCRATES - October 14th, 2010

If Jefferson Could Talk from the Grave He’d Be Hoarse from Shouting by Now

Politicians.  They’re all the same.  Well, most of them.  They enter politics for one thing.  For a career.  And what do people want from a career?  Great success.  Great prestige.  Great wealth.  Great power.  And a little revenge.  The pencil-neck, computer-nerd geek takes great pleasure in seeing a jock from his high school days emptying his trash while boarding his private jet. “Those wedgies and swirlies were a bitch but look at us now.”  It’s true.  The best revenge is living well.

But some people lack any talent or ability.  Some of them will never amount to anything.  They’ll never know the joy of looking down on people better than them with sweet condescension.  So these people go into politics.  Where people with no talent or ability can live well.  It’s a simple formula.  Sell your soul.  Whore yourself out.  Shake down businesses with taxation and regulation (and get even with all those people who have far more talent and ability than you ever had).  Collect tribute.  Consolidate power.  Hold those you serve in contempt.

Lord Acton wrote in 1887, “Power tends to corrupt, and absolute power corrupts absolutely.”  A century earlier, Thomas Jefferson fought tirelessly to prevent great money and federal power from conjoining.  The Old World capitals consolidated money and power.  And this concentrated the money and power into fewer and fewer hands.  Kings ruled by whim.  And oppressed their hapless subjects.  It’s a story as old as time.  And is still true today.  To the great chagrin of Jefferson.

Go West, Young Man

The transcontinental railroad was making poor progress during the Civil War.  Because it was starved for capital.  No one would invest.  Few doubted that they could build it.  Even if they could, few doubted it would ever make money.  The West was mostly raw, unsettled land.  There was nothing to transport.  Nothing to earn revenue.  It was a huge investment with a huge risk.  Investors are smart when it comes to money.  And they saw the transcontinental railroad as a one-way road that their money would go down and never return.  They needed something.  Big Government.

When it comes to throwing money away on a losing investment there is but one place to go.  Uncle Sam.  With the power to tax, the federal government has huge piles of money to play with.  So here’s what happened to build that railroad.  Union Pacific (UP) created a shell company called Crédit Mobilier (CM) to finance and build the railroad.  These companies were one and the same.  Without getting too complicated, UP sold their ‘worthless’ stock to CM at par.  Now, CM being a finance and construction company, a train never had to run over the road they were building to make a profit.  Union Pacific, on the other hand, needed trains running on that new track.  They were a transportation company.  They earned a profit from transporting goods on their trains.  This meant it could take years before UP could even hope to earn a profit on the new transcontinental railroad.  CM, on the other hand, could start earning a profit with the first invoice they submitted for construction.  And they did.

CM had strong revenues.  They submitted grossly inflated construction invoices to UP.  UP added a small construction management fee and submitted them to the government.  The government paid UP.  UP paid CM.  With revenues far exceeding their costs, CM made obscene profits.  CM stock took off into the stratosphere.  Some of which was sold to Congressmen at a deep discount who in turn realized obscene capital gains if they sold their stock.  Or collected obscene dividends if they held onto their stock.  In return for this sweetheart deal, they approved all cost overruns.  Killed any legislation unfavorable to UP/CM.  Provided lucrative incentives to build track on the worst ground in the most indirect path (to maximize the railroad’s mineral rights).  Provided little to no oversight on the construction of the road (some track was built on ice, with cheap steel and flimsy wooden trestles wherever possible).  When east met west the different railroads kept on building, parallel to each other to keep billing Uncle Sam.  All paid by the public treasury.  By the taxpayer.  The little guy.  Being raped and pillaged by their own representatives.

Affordable Housing for Those Who Vote Democrat

Politicians buy votes.  Pad the federal payroll.  Steal from the treasury.  Break the law.  Violate our trust.  You know, politician stuff.  Because of the inconvenience of elections, they can’t be too blatant about their rape and pillage.  So they do things that are in the best interest of the public.  Or so they say.  Like affordable housing.  You see, the Left buys the votes of the poor and minorities by throwing bones to them.  And there are a lot of minorities in the inner cities of the bluest of blue cities.  So they threw big bones to them.  Houses.

Despite their War on Poverty, the Left just can’t help these people.  The truth is, of course, that they don’t want to help them.  If they’re poor and dependent on the government, the Left can count on their vote.  If they escape poverty and don’t need Big Government to provide for them, these people are of no use to the Left.  Ergo, they never escape poverty.

Of course, the problem of remaining in abject poverty is that you can’t qualify for a mortgage.  Banks are funny that way.  They only loan money to people who can pay them back.  So they declined a lot of mortgages to these poor inner city minorities.  Well, this was just too good for Big Government to pass up.  A large group of minorities (i.e., a large Democrat voting bloc) being denied mortgages?  Why, that’s racism.  So they drafted a lot of legislation and unleashed their justice department with extreme prejudice.  The message?  Approve these loans.  Or face the consequences (revoking a bank’s charter, a federal lawsuit, a public demonstration headed by Jesse Jackson, Charlie Rangel, et al, etc.).  So they found creative ways to approve loans.  And they got a little help from Uncle Sam.

The Subprime Mortgage Crisis is a Lot Like the Crédit Mobilier Scandal

By a little I mean a lot.  Uncle Sam screwed the mortgage bankers by making them approve extremely risky loans.  So, to help the mortgage bankers, Uncle Sam screwed the American people.  They guaranteed those highly risky mortgages, thus transferring the risk from them to us, the taxpayer.  And to further mitigate the bankers’ risks, they purchased a lot of those highly risky mortgages to remove them from the banks’ balance sheets.  It’s called the secondary mortgage market.  And the primary players are none other than Fannie Mae and Freddie Mac, ground zero of the subprime mortgage crisis.

Once upon a time, a mortgage was one of the safest investments.  People saved up to pay a 20% down payment.  With their life savings invested, people paid their mortgage payment and they paid them on time.  And if you could afford a 20% down payment, mortgage bankers had a lot of confidence that you would be able to service your mortgage.  But in the day of 5%, 3% and 0% down, a person doesn’t have a whole lot to lose.  This makes the first few years of these mortgages especially risky.  The introduction of ‘no documentation’ mortgages meant people could lie about their income (or include overtime earnings).  Add to that the Adjustable Rate Mortgage (ARM) and the interest-only mortgage and you just made these especially risky mortgages even more risky.  Sure, these will get almost anyone into a home, but they get in by the skin of their teeth.  But if they lose their overtime due to a weakened economy, if their interest rate on their ARM resets at a higher rate or a balloon payment is due on their interest-only loan, guess what?  That stream of mortgage payments could very well stop.

Now that would be a BIG problem.  Because of what Freddie and Fannie did with those mortgages they bought.  They sliced them up and built creative investment vehicles.  Derivatives.  Mortgage backed securities called collateralized debt obligations.  Wall Street repackaged all these risky mortgages into highly profitable investments.  Everybody bought them.  Pension funds.  Trust funds.  In America.  And throughout the world.  Big gains with a low risk.  Or so it would seem.  You see, they never eliminated the risk.  They only transferred it to someone else.  And once people couldn’t pay their mortgage payments anymore, the house of cards came crashing down.  We call it the subprime mortgage crisis of 2008.  It caused a worldwide recession.  And cost the American taxpayer dearly.  Even those not born yet.

Yes We Can…Screw the American Taxpayer

The subprime mortgage crisis of 2008 is a government creation.  Their quest of affordable housing to buy votes put more and more people into houses they couldn’t afford.  They created legislation akin to extortion of the banking industry.  They used the Justice Department to apply the muscle for that extortion.  They had their friends in the media and the activists for racial equality to further pressure the banking industry.  Their lack of oversight of Fannie and Freddie (thank you Barney Frank and Chris Dodd) let them make extremely risky loans.  And their policies of buying extremely risky mortgages ultimately transferred all risk to the taxpayer.  Why?  Because like all good government scandals, the seekers of favors rewarded our representatives well for their complicity with sweetheart mortgage deals, vacation junkets, fat contributions to their campaign war chests, etc.  In other words, politics as usual.  But on a grand scale.

Why do they do it?  Because they can.  They count on you being ignorant of history.  And accepting every lie they tell you.  Because they hold you in contempt.  They look down on you with sweet condescension.  These pencil-neck geeks who could never amount to anything on their own merit or ability.  But some sold souls later and they have finally gotten even with those who were better than them.  And here they are.  Still living well.  Even during the worst recession since the Great Depression.

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FUNDAMENTAL TRUTH #20: “It is never a consumer that complains about ‘predatory’ pricing.” -Old Pithy

Posted by PITHOCRATES - June 29th, 2010

LOW PRICES.  GOD help me, I do hate them so.  I hate them with every fiber of my body.

Who says this?  Do you?  I don’t.  Of all the times I’ve spent shopping, I have never heard anyone bitch about low prices.  I’ve heard people bitch about high prices.  But never about low prices.  When gas approached $3/gallon, people bitched about that being too high and drove 10 miles to find ‘cheap’ gas to save a few pennies per gallon.  Let it approach $4/gallon and they’ll want Congress to take action.  To attack Big Oil.  To seize their oil and their profits and give us cheap gasoline in return.  But when gas was cheap, no one ever bitched about it being ‘too’ cheap.  It just doesn’t happen that way.  People bitch about high prices.  Not low prices.

So who bitches about low prices?  Competitors.  There’s a saying that competition makes everything better.  And it does.  It lowers prices.  And raises quality.  And who is looking for lower prices and higher quality?  Consumers.  Who isn’t?  Competitors.  Especially competitors with political connections.

WHEN THE BIG 3 were putting out crap in the 1970s, they did so because they could.  I mean, who else were you going to buy a car from?  So what if your car breaks down and the fenders and quarter panels rust away?  That just means you gotta buy another car sooner rather than later.  A pretty sweet deal.  Especially when there are only three places to go to buy a car.  And each of the Big 3 is selling the same crap.

Then the Japanese had to go and ruin a good thing.  They started selling cars in America.  These cars were smaller than your typical American car.  But there were other differences.  They didn’t rust like the American cars.  They didn’t break down as much.  And the imports were cheaper than the American cars.  Lower price and higher quality.  More bang for the buck.  Exactly what consumers were demanding.

So what was the response of the Big 3?  Did they rise to the level of their new competitors and deliver what the consumer wanted?  No.  They ran to government for help.  For protection.  And they got it.  Voluntary Export Restraints (VER).  The government negotiated with the Japanese to ‘voluntarily’ limit the number of cars they exported to the United States.  Or else.  So they did.  To avoid worse protectionist policies.  Problem solved.  Competition was limited.  And the Big 3 were very profitable in the short run.  Everyone lived happily ever after.  Until the Japanese refused to play nice.

The problem was what the Big 3 did with those profits.  Or, rather, what they didn’t do with them.  They didn’t reinvest them to raise themselves up to the level of the Japanese.  Protected, they saw no incentive to change.  Not when you have Big Government on your side.  And how did that work for them?  Not good. 

So look, the Japanese said, the Americans like our cars.  If the American manufacturers won’t give them what they want, we will.  While honoring the VER.  We won’t export more cars.  We’ll just build bigger and better cars to export.  And they did.  The Big 3 were no longer up against inexpensive, higher quality subcompacts on the fringe of their market share.  Now their mid-size and large-size cars had competition.  And this wasn’t on the fringe of their market share.  This was their bread and butter.  What to do?  Build better cars and give Americans more bang for their buck?  Or run to government again?  What do you think?

The Big 3 assaulted the Japanese under the guise of ‘fair trade’.  The cry went out that unless the Japanese opened up their markets to American imports (in particular auto parts), we should restrict Japanese imports.  To protect American jobs.  To protect the American worker.  To protect the children.  This was code for please make the Japanese cars more unattractive to purchasers so they will settle for the more costly and lower quality cars we’re making.  (Let’s not forget the reason Americans were buying the Japanese cars in the first place).

The Japanese response?  They took it up a notch.  They entered the luxury markets.  They launched Acura, Lexus and Infiniti.  They competed against Cadillac and Lincoln.  And well.  The quality was so good they even affected the European luxury imports.  More attacks followed.  Americans were losing their jobs.  Soon there would be no more American manufacturing left in the country.  So the Japanese built plants in America.  And Americans were now building the Japanese cars.  The Japanese actually created American jobs.

SON OF A BITCH!  So much for the loss of American jobs.  The Japanese threw a wrench in that argument.  So now the argument became about the loss of ‘high paying’ American jobs.  For the Japanese plants were non-union.  Didn’t matter that their workers were making better pay and benefits than many in their region.  No.  What mattered was that they were building a better product.  And they didn’t want THESE jobs in America.  But if they couldn’t get rid of these new workers, they should at least unionize them so their cars cost more.  To make them a little less appealing to the American consumer.  So far they have been unsuccessful in this endeavor.  The workers are happy as they are.

Well, these cars just weren’t going away.  So the Americans surrendered car manufacturing to the Japanese.  They couldn’t beat them.  (Of course, it’s hard to do that when you don’t even try).  They, instead, focused on the higher profit truck and SUV markets.  Then the Japanese entered those markets.  And at every level they competed with the Americans, the Japanese gave more bang for the buck.  And the consumers responded.  With their hard-earned wages.  It just wasn’t fair.  The Japanese kept giving the American consumer a better product.  No matter what political action the Big 3 took or demanded.

And there’s the problem.  They sought their answers from government.  Instead of making a better car.  They wanted to stop the Japanese from giving the American consumer what they wanted so they could force Americans to pay more for less.  All the while the economy was forcing the majority of consumers to get by on less (the majority of consumers do not have the wage and benefit package the ‘select’ few had in the Big 3). 

Fast forward to 2008 and we see the ultimate consequence of their actions.  Bankruptcy.  GM and Chrysler had to grovel for a federal bailout and in the process become Washington’s bitch.  Ford survived on her own.  As did the Japanese.  You can bitch all you want about costs, but if you have the revenue you can pay your costs.  And the Americans just couldn’t sell enough cars to maintain the revenue they needed for their cost structure.  By refusing to address the core problem (they weren’t making cars Americans wanted to buy), they only made their competition stronger and more entrenched in the U.S. market.

IT’S ALL POLITICS.  Political cronyism.  And crony capitalism.  It all comes down to political spoils and patronage.  That’s what happens when politics enter capitalism.  Big Business partners with Big Government and they enter into relationships.  You scratch my back and I’ll scratch your back.  But when government protects a business for political expediency, the industry suffers in the long run.  As the U.S. automobile industry has.  Ditto for the U.S. textile industry.  And the U.S. steel industry.

So what goes wrong?  When you protect an industry you insulate it from market forces.  You can build crap.  The problem is, consumers don’t buy crap.  So, for awhile, politics intervene and makes the crap more favorable.  Whether it’s predatory pricing, monopolistic pricing or collusion, business can’t win.  Big Government is there.  If your prices are too low, government will intervene.  If prices are too high, government will intervene.  If prices are too similar, government will intervene.  To make things ‘fair’.  And by fair they mean to reward those who play the game and to punish those who don’t.  And the spoils go to those large voting blocs they need.  And in return for their votes, they can count on patronage.  Government jobs.  Political positions.  Favorable legislation and regulation.  If you got the vote out, you were rewarded quite nicely. 

And consumers be damned. .

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LESSONS LEARNED #19: “Philosophical debates can be effective but character assassination is more expedient, especially when no one agrees with your philosophy.” -Old Pithy

Posted by PITHOCRATES - June 24th, 2010

THOMAS JEFFERSON HATED Alexander Hamilton.  So much so he hired Philip Freneau as a translator in his State Department in George Washington’s administration.  You see, Jefferson did not like confrontation.  So he needed a way to slander Hamilton, his policies and the Washington administration without getting his own hands dirty.  And that was what Freneau was supposed to do with the money he earned while working in the State Department.  Publish a newspaper (National Gazette) and attack Hamilton, his policies and the Washington administration.  Papers then were partisan.  More so than today.  Then, lies and libel were tools of the trade.  And they knew how to dig up the dirt.  Or make it up. 

Another scandalmonger, James Callender, was slinging dirt for Jefferson.  And he hit pay dirt.  Mr. and Mrs. Reynolds of Philadelphia had a lucrative business.  They were blackmailing Alexander Hamilton.  Mr. Reynolds had his wife seduce Hamilton.  Which she did.  And did well.  They had an affair.  And Mr. Reynolds then blackmailed him.  Jefferson pounced.  Or, rather, Callender did.  To keep Jefferson’s hands clean.  Hamilton, Callender said, was using his position at the Treasury Department for personal gain.  He was using public funds to pay the blackmailer.  They found no proof of this.  And they did look for it.  Hard.  But when they came up empty, Jefferson said that it just proved what a good thief Hamilton was.  He was so good that he didn’t leave any traces of his treachery behind.

Of course, when you lie down with dogs, you get up with fleas.  And Jefferson’s association with Callender would come back and bite him in the ass.  In a big way.  Upset because Jefferson didn’t appropriately compensate him for all his loyal dirt slinging (he wanted the postmaster’s job in Richmond), he publicized the Sally Hemings rumors.  And after breaking the true story of the Hamilton affair, many would believe this scoop.  That Jefferson was having an affair with one of his slaves.  It was a dark cloud that would forever hang over Jefferson.  And his legacy.

Hamilton admitted to his affair.  Jefferson admitted to no affair.  Hamilton would never hold public office again and would later die in a duel with Jefferson’s one-time toady, Aaron Burr.  This duel resulted because Hamilton was doing whatever he could to keep the amoral and unscrupulous Burr from public office (in this case, it was the governorship of New York).  When the election of 1800 resulted in a tie between Jefferson and Burr, Hamilton urged the House to vote for Jefferson, his archenemy.   Despite what had appeared in the press, Hamilton did have morals and scruples.  Unlike some.  Speaking of which, Jefferson would go on to serve 2 terms as president.  And all of that angst about Hamiltonian policies?  They all went out the window with the Louisiana Purchase (which was unconstitutional, Big Government and Big Finance).

RONALD REAGAN WAS routinely called old, senile and out of touch by the entertainment community, the media and his political foes.  But he bested Mikhail Gorbachev and the Soviet Union, something Jimmy Carter never did.  He said ‘no’ at Reykjavik because he told the American people that he wouldn’t give up the Strategic Defense Initiative (SDI).  He knew the Soviet Union was bleeding.  Communism was a farce.  It inhibited human capital.  And impoverished her people.  SDI may have been science fiction in the 1980s, but capitalism wasn’t.  It could do it all.  Including SDI.  The Soviet Union was on the ropes and Reagan would give no quarter.  The days of living in fear of the mushroom cloud were over.  And capitalism would deliver the knockout punch.

Reaganomics, of course, made this all possible.  Supply-side economics.  Which follows the Austrian school.  Say’s Law.  ‘Supply creates demand’.  You don’t stimulate the economy by taxing one group of people so another group can spend.  You stimulate it by creating incentives for risk takers to take risks.  And when they do, they create jobs.  And wealth.

Tax and spend is a failed Keynesian, zero-sum economic policy.  When you take from the earners and give to the non-earners, we just transfer purchasing power.  We don’t create it.  For some to spend more, others must spend less.  Hence, zero-sum.  The net some of goods and services people are purchasing remains the same.  Different people are just doing the purchasing.

When Apple invented the Macintosh personal computer (PC), few were demanding a PC with a graphical user interface (GUI).  But Apple was innovative.  They created something they thought the people would want.  And they did.  They took a risk.  And the Macintosh with its mouse and GUI took off.  Apple manufacturing increased and added jobs.  Retail outlets for the Macintosh expanded and created jobs.  Software firms hired more engineers to write code.  And other firms hired more people to engineer and manufacture PC accessories.  There was a net increase in jobs and wealth.  Just as Say’s Law predicts.  Supply-side economics works.

Of course, the Left hates Reagan and attacked Reaganomics with a vengeance.  They attacked Reagan for being pro-rich.  For not caring about the poor.  And they revised history.  They say the only thing the Reagan tax cuts gave us were record deficits.  Of course, what those tax cuts gave us were record tax receipts.  The government never collected more money.  The House of Representatives (who spends the money), awash in cash, just spent that money faster than the treasury collected it.  The record shows Reaganomics worked.  Lower tax rates spurred economic activity.  More activity generated more jobs and more personal wealth.  Which resulted in more people paying more taxes.  More people paying taxes at a lower rate equaled more tax revenue in the aggregate.  It works.  And it works every time people try it. 

Because Reaganomics worked and showed the Left’s policies were failures, they had to attack Reagan.  To discredit him.  They had to destroy the man.  Except when they’re running for elected office.  Then they strive to show how much more Reagan-like they are than their conservative opponents.  Because they know Reaganomics worked.  And they know that we know Reaganomics worked.

GEORGE W. BUSH was routinely called an ‘idiot’ by the entertainment community, the media and his political foes.  Yet this ‘idiot’ seems to have outwitted the elite of the liberal Left time and time again.  I mean, if their policies were winning, they would be no reason to have attacked Bush in the first place.  The Left hated him with such vitriol that they said he blew up the Twin Towers on 9/11 as a justification for invading Iraq for her oil.  It was Big Oil’s lust for profit, after all, that was driving this Texan’s Big Oil policies.  And taking Iraq’s oil would increase Big Oil’s sales and give her even more obscene profits.

If Bush was an idiot, he must have been an idiot genius to come up with a plan like that.  Then again, gasoline prices crept to $4/gallon following the Iraq War.  Had all that oil gone on the market according to plan, that wouldn’t have happened.  Unless the plan was to keep that oil OFF of the market, thus, by rules of supply and demand, the price of oil (and the gasoline we make from it) would go up thus enriching Big Oil through higher prices resulting from a lower sales volume.  My god, what evil genius.  For an idiot.  Of course, gas taxes, numerous summer gas blends (required by the government’s environmental policies), an aging and over-taxed pipeline infrastructure and insufficient refinery capacity (the government’s environmental policies make it too punishing even to consider building a new refinery) to meet increasing demand (soaring in India and China) had nothing to do with the rise in gas prices.

IS THE POLITICAL Left evil?  Probably not.  Just amoral.  They have an agenda.  They survive on political spoils and patronage.  Old time politics.  Enrich themselves through cronyism.  If tribute is paid they’ll extend favorable treatment.  If tribute is not paid, they will release their wrath via hostile regulation, litigation, Congressional investigation and punitive taxation.  Just like they did to Big Tobacco (and, no, it wasn’t about our health.  They could have just made tobacco illegal.  But they didn’t.  Why?  It just brings in way too much money to the government.  Via sin taxes.  And federal lawsuits.  And with it being addictive, it’s a frickin cash piñata for them.)

They know few agree with their philosophy.  But they don’t care.  It’s not about national prosperity.  It’s about power.  And they want it.  That’s why they can’t debate the issues.  They know they can’t win.  So they attack the messenger.  Not the message.  If you don’t believe that, you can ask Abraham Lincoln, Ronald Reagan, George W. Bush, Sarah Palin and just about any other Republican.  Well, you can’t ask Lincoln or Reagan.  But you can guess what they would say.

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