Wall Street is Doing Well because the Fed’s Inflationary Policies keep Raising Prices

Posted by PITHOCRATES - March 9th, 2013

Week in Review

Investors like rising stock prices.  They don’t like falling stock prices.  Which is why Wall Street likes inflation.  And fear deflation.  Even though the economy is still sluggish with more and more people dropping out of the labor market (which is why the unemployment rate fell) investors are bullish.  Because of the Federal Reserve and all of their quantitative easing.

The more the Fed increases the money supply the more inflation there will be.  Investors like that.  Because inflation increases prices.  Such as the prices of their stocks.  As well as gasoline and groceries.  Making the current economic times odd.  For the stock market recently reached a record high.  Even though the labor participation rate (see THE EMPLOYMENT SITUATION —FEBRUARY 2013, page 4) continues to fall.  It is now at 63.5%.  Which means 89,304,000 people are not in the labor force.  A record high.  But you wouldn’t know this by looking at the official unemployment rate.  Or the stock market (see Stocks And Inflation: The End Of An (Abnormal) Affair? by James Picerno posted 3/69/2013 on Seeking Alpha).

The positive correlation between the market’s inflation forecast and the stock prices appears a bit looser these days, but it’s premature to declare that the link has been broken…

Normally, rising/high inflation doesn’t inspire the bulls. But the last several years have been less than normal in terms of the macro backdrop. The crowd has remained worried about disinflation/deflation, which means that signs of higher inflation in the future have soothed anxious traders…

And why not?  For when have inflationary policies ever caused an asset bubble? That burst into a long and painful recession?  Except the housing bubble that brought about the 1990-91 recession.  The dot-com bubble that brought about the 2000-01 recession.  And that other housing bubble that brought about the 2007-09 recession.  AKA The Great Recession.  So there is no worry that these record highs in stock prices aren’t just another bubble.  Just waiting to burst.  Bringing on another deflationary recession.  I mean, what are the odds of that happening again?

Actually, the chances are pretty good that 2013 will have a very painful recession.  Because we don’t have any real economic growth.  These gains in the stock market aren’t because businesses are expanding and hiring.  Not with a falling labor participation rate.  No.  For all intents and purposes we are still in the 2007-09 recession.  Only we should probably call it the 2007-(end date to be determined) recession.  Because the president’s economic policies haven’t helped the economy yet.  And probably never will.

There’s no reason to believe that the fifth year will be any better than the previous four years.  In fact, it will probably be worse.  In fact one would almost get the impression that he is not trying to help the economy.  But, instead, trying to destroy the Republican Party.  So he can win the House of Representatives back in 2014.  So he can pass even more anti-business policies.  To transform the country into something it was never before.  Less prosperous than communist China.

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The Democrats issue new Lending Regulations to address the Financial Crisis they Created

Posted by PITHOCRATES - January 13th, 2013

Week in Review

The subprime mortgage crisis is still a political football.  The Democrats are using the crisis to further regulate the financial markets.  Giving us the convoluted Dodd-Frank Wall Street Reform and Consumer Protection Act.  Financial reform.  For apparently there was no financial oversight of the financial markets up until now.  Despite Barney Frank being the Chairman of the House Financial Services Committee (2007-2011).  And Chris Dodd being the Chairman of the Senate Committee on Banking, Housing, and Urban Affairs (2007-2011).  Both of who were responsible for the oversight of Fannie Mae and Freddie Mac.  The GSEs at the center of the subprime mortgage crisis (see Mortgage lender rules released by Daniel Wagner, Associated Press, posted 1/10/2013 on The Washington Times).

In the wake of the national housing collapse that helped bring on the Great Recession, federal regulators for the first time are laying out rules aimed at ensuring that borrowers can afford to pay their mortgages.

The long-anticipated rules being unveiled Thursday by the Consumer Financial Protection Bureau impose a range of obligations and restrictions on lenders, including bans on the risky “interest-only” and “no documentation” loans that helped inflate the housing bubble…

CFPB Director Richard Cordray, in remarks prepared for an event Thursday, called the rules “the true essence of responsible lending…”

Mr. Cordray noted that in the years leading up to the 2008 financial crisis, consumers could easily obtain mortgages that they could not afford to repay.

So, prior to the Great Recession and the 2008 financial crisis we did not have responsible lending.  Which resulted in consumers obtaining mortgages they could not afford to repay.  Why?  Why were people getting mortgages they had no chance of repaying?  Who was responsible for that?  Well, as it turns out it was President Clinton.  Whose administration overhauled the Community Reinvestment Act (see New Study Finds CRA ‘Clearly’ Did Lead To Risky Lending by Paul Sperry posted 12/20/2012 on Investors.com)

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, “Yes, it did. We find that adherence to that act led to riskier lending by banks.”

Added NBER: “There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts,” or predominantly low-income and minority areas.

To satisfy CRA examiners, “flexible” lending by large banks rose an average 5% and those loans defaulted about 15% more often, the 43-page study found…

The strongest link between CRA lending and defaults took place in the runup to the crisis — 2004 to 2006 — when banks rapidly sold CRA mortgages for securitization by Fannie Mae and Freddie Mac and Wall Street.

CRA regulations are at the core of Fannie’s and Freddie’s so-called affordable housing mission. In the early 1990s, a Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie.

It passed a law requiring the government-backed agencies to “assist insured depository institutions to meet their obligations under the (CRA).” The goal was to help banks meet lending quotas by buying their CRA loans.

But they had to loosen underwriting standards to do it. And that’s what they did…

From 2001-2007, Fannie and Freddie bought roughly half of all CRA home loans, most carrying subprime features…

Housing analysts say the CRA is the central thread running through the subprime scandal — from banks and subprime lenders to Fannie and Freddie to even Wall Street firms that took most of the heat for the crisis…

While the 1977 law was passed 30 years before the crisis, it underwent a major overhaul just 10 years earlier. Starting in 1995, banks were measured on their use of innovative and flexible” lending standards, which included reduced down payments and credit requirements.

Banks that didn’t meet Clinton’s tough new numerical lending targets were denied merger plans, among other penalties. CRA shakedown groups like Acorn held hostage the merger plans of banks like Citibank and Washington Mutual until they pledged more loans to credit-poor minorities (see chart).

A Democrat Congress gave HUD the authority to set and enforce (through fines) CRA-grade loan quotas at Fannie and Freddie?  And Democrats say that Community Reinvestment Act had nothing to do with the 2008 financial crisis?  Funny.  Based on the historical record the Democrat Congress that forced lenders to loosen underwriting standards to meet those quotas are solely responsible for setting into motion the events that led to the 2008 financial crisis.  Not Wall Street.  Not the banks.  It was the Democrat Congress that empowered HUD to destroy good lending practices.  And they bear the responsibility for the 2008 financial crisis.  And the Great Recession.

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FT143: “When liberals say ‘unite and work together’ they really mean ‘divide and conquer’.” —Old Pithy

Posted by PITHOCRATES - November 9th, 2012

Fundamental Truth

President Obama didn’t Moderate any of his Positions after the Punishing Losses of the 2010 Midterm Elections

During President Obama’s victory speech following the 2012 election he said there are no red states and no blue states.  Just the United States of America.  Which was a common theme during all his campaign stops.  He kept saying that together we can do these great things.  If we unite we can overcome any obstacles.  Yet he did anything but unite people during his campaign.  Instead he was a great wedge driver.  To drive people away from each other.  And into opposing camps.  To foment anger between these disparate groups.  And to peel these groups away from the Republicans.

We heard compromise talk like this following the 2008 election.  And what happened then?  There was no uniting or working together.  When it came to the stimulus bill the President and Nancy Pelosi shut the Republicans out.  When the Republicans offered suggestions President Obama brushed them aside.  Saying elections have consequences.  And that the Republicans could make all the suggestions they’d like but it wouldn’t matter.  Because he wasn’t listening.  Nancy Pelosi acknowledged that the Democrats wrote the stimulus bill in its entirety without any Republican input.  Why?  Because they won she smirked.  The Democrats weren’t interested in any bipartisan compromise then.  So it isn’t likely they are now.  Unless it’s the kind of bipartisan compromise they like.  The kind where the Democrats get what they want.  And the Republicans surrender unconditionally.

So there’s ancient history (2008-2010) and the words from the recent campaign that tell us not to hold our breath for all of that uniting and working together to materialize.  It just won’t happen.  For the president didn’t moderate any of his positions after the punishing Democrat losses of the 2010 midterm elections.  So why would he after a triumphant victory of the status quo in 2012?

Democrats warned America that if Mitt Romney became President he would take the Country back to the 1950s

The Democrats have no interest in bipartisan compromise.  Because to compromise you have to give up stuff you want.  And let others have a little of what they want.  But when you look at the negative campaign ads of the past election there can be no compromise.  For the Democrats did not battle the Republicans in the arena of ideas.  They demonized their opponents for thinking differently than they did.  Looking for issues of opportunity to seize.  Such as the war on women.

Catholicism does not permit birth control or abortion.  Extreme positions to some, perhaps.  But not to Catholics.  Who choose to be Catholics.  When Obamacare forced Catholics to provide free birth control and the abortion pill in their health care benefits they took offense.  As did the Republicans.  For the First Amendment states in part, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”  And forcing Catholics to provide birth control and the abortion pill clearly prohibited the free exercise thereof.  So the Catholics, and the Republicans, protested this violation of a First Amendment right.  And the Democrats responded to this protest by calling it a war on women.  Where Republicans wanted to take birth control and access to abortion away from women.  As well as wanting women to die from cancer.

The Democrats helped organize the Occupy Wall Street movement to stoke up hatred for rich people.  In anticipation for the Republican nominee they were already planning to campaign against.  Mitt Romney.  A rich person.  But not just any rich person.  But an old rich white man.  Who worked in high finance.  Which, of course, tied him to Wall Street.  A man disconnected from the common people.  And from contemporary times.  The Democrats warned America that if Mitt Romney became president he would take the country back to the 1950s.  Take away women’s birth control and access to abortion.  As well as happily letting them die from cancer.  In addition to cutting taxes for rich people.  While raising taxes on the poor and middle class.  When he wasn’t busy closing down factories and shipping jobs overseas.  And, of course, stacking the deck against blacks, Hispanics and anyone else that wasn’t as white as he.

Liberals must Divide and Conquer as their Records don’t allow them to run any other Campaign

You see, the Republicans are hateful people.  For example, they’re bigots and homophobes because they oppose gay marriage.  So it’s okay to hate Republicans.  Because they hate gay people.  While at the same time they hate women because they want all women to be barefoot and pregnant.  In a marriage.  So on the one hand Republicans are hateful people for trying to prevent gay people from marrying.  While on the other hand they’re hateful people for trying to encourage women to get married.  Making marriage a fascinating issue.  For if gay people want it marriage is a beautiful thing.  An expression of love between two people.  But for single women who want a career it’s nothing less than slavery.  Pure male subjugation of women.

Odd, isn’t it?  How Democrats can be on both sides of the same issue.  For they can both love and hate marriage.  And they can hate Republicans for both opposing and promoting marriage.  How can that be you ask?  Easy.  For marriage is not what’s important to Democrats.  What’s important to them is using marriage to demonize Republicans.  It’s about the hate.  And the opportunity to drive a wedge between people.  To drive people into opposing camps.  That have a common enemy.  Republicans.

Democrats don’t have a great success record for their policies.  They can’t hold up the Carter years as a success.  For they were horrible.  They like to point to the Clinton years as vindication for their policies.  But his economy was helped by Japan’s Lost Decade.  And an inflationary binge that caused the dot-com bubble.  As well as the run up to the subprime housing bubble.  Neither of which burst during his presidency.  Though he was largely responsible for them.  And the Democrats couldn’t point to anything in the Obama years as a success.  So they didn’t run on their record.  But attacked their opponent.  By demonizing Mitt Romney.  Getting one group after another to hate Mitt Romney and the Republicans.  And to vote against them.  Not for the Democrats’ successful policies.  For they had none.  So when liberals say ‘unite and work together’ they really mean ‘divide and conquer’ as they have always done.  As they always must do.  For their records don’t allow them to run any other campaign.

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High Gasoline Prices blamed on Wall Street instead of Where it Belongs – Environmentalism

Posted by PITHOCRATES - April 15th, 2012

Week in Review

Is Wall Street to blame for high gasoline prices?  Or are governmental environmental policies.  Most like to blame Wall Street.  Because they have no understanding of the oil business.  Even though it’s pretty straight forward.  And follows all the rules of supply and demand.  Where most of the current price pressures are coming on the supply side of the equation.  But Wall Street isn’t to blame for that.  We are.  For our collective attacks on the oil industry.  And our acquiescence of the environmental movement (see If the U.S. is now an oil exporter, why $4 gas? by Leah McGrath Goodman posted 4/11/2012 CNNMoney).

The U.S. is now selling more petroleum products than it is buying for the first time in more than six decades. Yet Americans are paying around $4 or more for a gallon of gas, even as demand slumps to historic lows. What gives..?

Americans have been told for years that if only we drilled more oil, we would see a drop in gasoline prices. (Speaking to voters last month, Newt Gingrich made the curious assurance that more oil drilling could drive down gasoline prices to $2.50 a gallon, prompting the White House to accuse him of “lying.”)

But more drilling is happening now, and prices are still going up. That’s because Wall Street has changed the formula for pricing gasoline.

Until this time last year, gas prices hinged on the price of U.S. crude oil, set daily in a small town in Cushing, Oklahoma – the largest oil-storage hub in the country. Today, gasoline prices instead track the price of a type of oil found in the North Sea called Brent crude. And Brent crude, it so happens, trades at a premium to U.S. oil by around $20 a barrel.

So, even as we drill for more oil in the U.S., the price benchmark has dodged the markdown bullet by taking cues from the more expensive oil. As always, we must compete with the rest of the world for petroleum – including our own…

To put it more literally, if a Wall Street trader or a major oil company can get a higher price for oil from an overseas buyer, rather than an American one, the overseas buyer wins. Just because an oil company drills inside U.S. borders doesn’t mean it has to sell to a U.S. buyer. There is patriotism and then there is profit motive. This is why Americans should carefully consider the sacrifice of wildlife preservation areas before designating them for oil drilling. The harsh reality is that we may never see a drop of oil that comes from some of our most precious lands.

It’s not Wall Street.  It’s the crude oil.  The refineries.  And the fact some refineries can only refine the Brent sweet crude oil.

The stuff we import, Brent sweet crude, is a higher quality crude.  It’s cleaner.  And easier to refine.  But it’s more expensive.  Which is a problem for the refineries on the east coast.  And on the Gulf Coast.  Because that’s the crude they can refine.  Because their crude costs are higher their refined gasoline costs are higher.  Therefore, these refineries lose money when selling at the prevailing market price.  So they export their gasoline where they can sell it at a higher price that covers their costs.  Or they shut down refineries.  Which they have done.  Shutting done some 5% of refinery capacity within the last 6 months.  Bringing total online capacity to about 60%.

The stuff we get from Canada, North Dakota and the Gulf of Mexico is West Texas Intermediate.  Which is a heavier, dirtier crude oil.  The refineries that can refine this oil are located in Oklahoma, Kansas and outside Chicago.  And because the gasoline they sell starts with a crude oil priced about $20 less a barrel than their east and Gulf Coast rivals they can sell at prevailing market prices and make a profit that recovers all of their costs.  Which is why these refineries are operating at about 95% of capacity.  Which explains why gasoline is cheaper in Midwest than on the coasts.  Well that, and California’s own emission standards that require an even more costly blend of gasoline than your typical summer blend (to reduce the polluting affects of gasoline at higher temperatures).

(You can read more about refining costs in a February Bloomberg article.  And more about gasoline blends in an Energy Policy Research Foundation article.)

So, no, it’s not Wall Street causing the high gas prices.  It’s environmental policy.  Which requires costly blends of gasoline to reduce emissions.  And makes any expansion of the refinery infrastructure cost prohibitive.  Environmental impact studies alone can take years to complete.  And cost hundreds of millions of dollars.  So the aging infrastructure strains at the seams.  Whereas if those policies weren’t so cost prohibitive we could build new refineries along the east and Gulf Coast to replace those underutilized and shuttered facilities.  And flood them with domestically produced West Texas Intermediate.  Which would make gas prices fall.  At least it would lower the east and Gulf Coast prices to that enjoyed in the Midwest.  But not in California.  Who will forever have the highest gasoline prices thanks to their emission standards

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Our Favorite Athletes are Part of the 1% and try to Minimize the Taxes they pay just like those on Wall Street

Posted by PITHOCRATES - March 25th, 2012

Week in Review

Don’t think high taxes influences behavior?  Of course, no one cares about the evil 1%.  Those greedy Wall Street types that don’t pay their fair share of taxes.  But you know who else is in that greedy 1%?  Your favorite athletes.  And guess what?  They want to hold on to their earnings just like those greedy Wall Street types (see Professional Athletes’ Big-League Tax Bills by Jay MacDonald posted 3/15/2012 on Yahoo! Finance).

Behind every sports star who’s hauling down the big bucks is a keen-eyed certified public accountant quick-stepping through a maze of state and local income taxes imposed on nonresident athletes, commonly known as the “jock tax.”

Professional sports players get taxed by pretty much every city and state in which they play, says Ryan Losi, CPA and executive vice president of Piascik & Associates, a Glen Allen, Va., accounting firm that represents more than 70 professional athletes.

“NFL players typically file in 10 to 12 jurisdictions. NBA is somewhere between 16 and 20. MLB is somewhere between 20 and 26, and the NHL is between 14 and 16,” says Losi.

Professional sports players are great big cash piñatas to these city and states that chronically over spend.  They all want a piece of these guys.  To make sure they pay their ‘fair share’ of taxes.  While they can before some career-ending injury puts an end to this gravy train.  But because these players could lose millions in future career earnings because of a career-ending injury, they want to keep their money.  For they may never be able to get another job.  Sure, some may move into the front office.  Some may move on to coaching.  But few will earn the kind of money they did during their short careers.  So they want to keep as much as they earn.  To take care of their wife and kids.  And have enough for their retirements.  Which can be rather long for these worn out and injured bodies.  So they just don’t sit by passively while every taxing authority is shaking them down for everything they’re worth.

The lion’s share of most players’ income, their salary, is taxed in the city and state where the team is based. But income from other sources, including endorsements, personal appearances, dividends and interest income, is taxed in their state of residence.

This is the reason New York Giants quarterback and Super Bowl MVP Eli Manning lives in Hoboken, N.J., instead of in the Big Apple. It’s simple arithmetic, says Raiola.

“If he were a resident of New York, he’d pay 8.97 percent New York state tax and another 3.78 percent New York City tax on top of that, not only on his wage income but also his endorsements and investment interest,” he says. “In New Jersey, he only pays 8.97 percent…”

Taxes — or the lack of them — may also have had something to do with NBA all-star and 2010 free agent LeBron James’ choice to play for the Miami Heat instead of the New York Knicks. Losi points to Florida’s lack of a state income tax.

“That may have been one of the factors that led LeBron to choose Florida versus New York,” says Losi. “Ten percent of his first contract was going to be the difference. For him, it was an extra 5 (percent to) 9 percent difference in tax. That’s real money.”

New York City may be the greatest city in the world but the rich pay an enormous amount of taxes to live there.  So many chose not to.  In fact, a lot of athletes chose where they live and raise their families based on their total tax burden.

Professional golfers, tennis players and other athletes who compete on the world stage often leave a third or more of their earnings in the local coffers.

“Whenever they play in foreign countries, they have to pay taxes in that jurisdiction, and the tax liability is much bigger than the 5 (percent) to 10 percent state tax. It’s usually in the 30 (percent) to 40 percent bracket,” says Losi. “Usually it’s withheld in their prize money, and they can file a nonresident return if they think they might have a refund coming.”

Because the United States is one of the few countries that taxes all personal income regardless of source, some pro sports stars who compete internationally actually have a financial disincentive to make their home in America.

“If they’re (not U.S. citizens or green card holders) and they’re not planning to stay here more than 183 days out of the year, from a tax perspective it absolutely makes sense to not live in the U.S.,” says Losi. “All the foreign golfers who come here to play, if they want all of their foreign prize money and endorsement money to be taxed, all they have to do is hang out here for 183 days.”

Being an athlete competing at the level that makes them millionaires is not an easy life.  While others look forward to weekends, holidays and vacations to kick back and relax and recharge their batteries with copious amounts of alcohol and enormous quantities of fattening foods these athletes don’t.  They often work on weekends and holidays.  And when they’re not working they’re practicing.  Where their practice is often more intense than their competition.  This is their life.  This is how they become elite athletes.  And their reward?  To be whacked open like a cash piñatas by the taxing authorities so the politicians they serve can take their money and spend it to buy votes for the next election.  And forcing them to choose where to live based on who will penalized them the least for being really good at something.

This is not a meritocracy.  Where we reward people for achievement.  This is out of control government spending to maintain a privileged class.  Politicians.  And government workers.  Who live and feed off of taxes.  To fund their class warfare that makes these privileged few secure in their class.

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After Enabling the Subprime Mortgage Crisis, Fannie and Freddie are still Losing Money and want Another Bailout

Posted by PITHOCRATES - November 13th, 2011

Week in Review

Fannie Mae and Freddie Mac are still losing money.  And are now asking for another taxpayer bailout.  Imagine that (see Falling home prices leads to bigger Fannie Mae loss; asks taxpayers for $7.8 billion more by the Associated Press posted 11/8/2011 on The Washington Post).

Mortgage giant Fannie Mae is asking the federal government for $7.8 billion in aid to cover its losses in the July-September quarter…

Michael Williams, Fannie’s president and CEO, said Fannie’s losses are increasing for two reasons: Some homeowners are paying less interest after refinancing at historically low mortgage rates; others are defaulting on their mortgages.

When property values drop, homeowners default, either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.

The problem now isn’t low mortgage rates and defaults.  That was the problem when government policy used Fannie and Freddie to create a housing bubble.  This is what gave us the subprime mortgage crisis.  Putting people into houses they couldn’t afford.  By forcing banks to qualify the unqualified.  And then having Fannie and Freddie buy these toxic mortgages from the banks.  So the banks could qualify more of the unqualified.  And continue the cycle.  All the while putting more and more risk onto the American taxpayer.  Because, as we have seen, it is the American taxpayer that bailed out Fannie and Freddie.  And now they’re asking for more money.

Government created the subprime mortgage crisis.  With their enablers of bad credit Fannie and Freddie.

Washington-based Fannie and McLean, Va.-based Freddie own or guarantee about half of all mortgages in the U.S., or nearly 31 million home loans. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.

Fannie and Freddie buy home loans from banks and other lenders, package them with bonds with a guarantee against default and sell them to investors around the world. The companies nearly folded three years ago because of big losses on risky mortgages they purchased.

This wasn’t the banks on Wall Street causing this mess.  The deed was already done by the time they sold those toxic mortgages.  For had it not been for Fannie and Freddie they would have been no toxic mortgages for Wall Street to sell.  And no subprime mortgage crisis.

And there would have been no Fannie and Freddie mess without their overseers.  The federal government.  And their policy to put as many people into houses.  Whether they could afford it or not.

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FT91: We vilify doctors, hospitals, pharmaceuticals and insurance companies for rising health care costs but we don’t vilify professors or universities responsible for rising tuition costs.

Posted by PITHOCRATES - November 11th, 2011

Fundamental Truth

Greedy Taxpayers are Blamed for the High Cost of Higher Education

Both health care and tuition costs are rising.  They’re out of control.  Both are crises.  We hear about it all the time.  And we’re doing something about it.  Interestingly, though, we’re trying to solve these crises differently.

We’ve identified villains in the health care industry.  Doctors who order unnecessary procedures.  Hospitals that carry out unnecessary procedures.  Greedy pharmaceutical companies that make seniors choose between food and medicine.  And greedy insurance companies who keep raising their premiums while aggressively denying claims.  All who contribute to the rising cost of health care.

So we know who wears the black hats in the health care crisis.  It’s a little different in the tuition crisis.  Do you know who the villains are there?  We are.  The greedy taxpayers.  Who have nothing to do with the rising cost of tuition.  No.  Our crime is our opposition to ever higher taxes.  So we can subsidize ever more of the high cost of higher education.

The Rich Fat Cats above the Professors live like Wall Street Fat Cats

So why are costs so high?  And why aren’t we blaming those who make these costs so high?  Like we blame doctors, hospitals, pharmaceutical companies and insurance companies?

Universities are awash in cash.  From tuition.  From the state.  From corporations.  From benefactors.  From alumni.  And, of course, from college sports.  A multibillion dollar industry.  That doesn’t pay a dime to the athletes that generate all that cash.  So universities have a lot of cash.  Yet tuition costs keep going up.  Why?

What are the costs of a higher education?  There are classrooms.  But these are long-term fixed assets.  That last decades without any improvements.  There are textbooks.  They’re very expensive.  Rarely less than $100.  Which is odd.  Because it’s rare to find a book at Barnes and Nobel for more than $100.  So that’s a profitable enterprise.  Textbook publishing.  While all other publishing is bleeding red and going out of business.  And there are, of course, faculty.

The life of a university professor is pretty sweet.  You get to hide from the real world on campus.  You have great working hours.  You get a lot of time off.  Sometimes all summer.  And have graduate students do all of your busy work.  It’s a charmed life.  And students pay them well for it.  And once they get tenure they can pretty much do whatever they want.  And no one will ever fire them.  No matter how many of their graduates can’t find a job.

And then you have all the rich fat cats above the professors who do even less.  Who drive the same kind of cars the Wall Street fat cats do.  And live in the same kind of houses the Wall Street fat cats live in.  But no one protests these rich fat cats.  Who got rich by ripping off students.  Via the ever rising costs of higher education.

Getting into the University System is like being Knighted in the Old World

The university system is a microcosm of Old World aristocracy.  Getting into the system is like being knighted in the Old World.  And university life is like the Old World.  Where no one challenges your privilege.  Because that wouldn’t be proper behavior.  And lacking the respect due to the privileged class.

Of course this isn’t a problem when you produce great doctors, scientists and engineers who make the world a better place.  We thank those professors who work tirelessly for the betterment of society.  But to those who sucker kids into worthless degree programs?  Where there’s no math?  Only ‘no right or wrong’ essay questions?  And no jobs waiting for them in the private sector?  Well, we’re not quite as enamored with these professors.

Because we’re left to clean up their mess.  From students defaulting on their student loan debt.  Because they can’t get a job.  To the mess they make while protesting Wall Street greed.  Because they can’t get a job.  All the while those responsible for their plights are preparing to raise tuition costs yet again.  As they always have.  And always will do.  Free from blame.  Even though they are more blameworthy than those on Wall Street.

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The Problem with the Occupy Wall Street People is that they don’t Know the Difference between Capitalism and Crony Capitalism

Posted by PITHOCRATES - October 15th, 2011

Bank Tellers have a Job because they didn’t go to College to get a Philosophy or an English Degree

Another proud day for American public education and American colleges (see Protesters arrested in bank march, party in Times Square by Georgett Roberts, Jennifer Bain and Kevin Fasick posted 10/15/2011 on the New York Post).

The “Crossroads of the World” were jammed when thousands of anti-greed protesters brought their party to Times Square, capping a day of marches marred by the arrest of more than 20 who stormed a Citibank branch.

And what do they want?  A lot of free stuff.  The greedy little bastards.

Brought their ‘party’?  Yeah, that about sums up these beatniks on Wall Street.  For them life is nothing but a party.  And a protest is an even better party.  I mean, look at them.  They’re having the time of their lives.

Earlier, 24 protesters were arrested when a mob stormed a LaGuardia Place Citibank and shouted slogans as two demonstrators closed their bank accounts in protest just after 2 p.m.

I hope they find a safe place for that money.  There are a lot of desperate people out there who need money.  And it would have been a lot harder for them to get at that money if they had left it locked in a bank.

They were screaming and chanting while they were going in. Security told them to leave, but they didn’t. They stood in a group chanting things to the tellers. There were locked in, and then they were taken away.”

If I’m not mistaken bank tellers aren’t part of that superrich 1%.  No.  They’re probably a part of that 99%.  Like the protesters.  Only they have a job.  Unlike the protestors.  Because they didn’t go to college to get a philosophy or English degree.

“We went into the bank to peacefully protest,” she said. “People were standing in the bank giving testimonials, speaking about their student debt, some of which is held by Citibank and a few undercover police officers came into the bank”

These people partied for 4 years (or more) while going to college getting their worthless degrees.  And learning how to hate America.  And the man.  And now they’re bitching to complete strangers about their own bad decisions?  Taking on debt for some BS degree?  Mom and Dad probably warned them not to do that.  To get a degree in something useful instead.  Like business.  Accounting.  Chemistry.  Something that has value in the economy.  But did they listen?  Apparently not.

He said he paid $559 annually in fees to the bank, including late charges.

“I’ve been wanting to move my money for awhile. But this opened my eyes,” he said of his experiences. “I’m going to use a community-based bank for my funds.”

This is just like someone living in East Berlin at the height of the Cold War waiting for their chance to escape to West Berlin.  To scale the Berlin Wall.  Before the East Germans shot him.  Or her.  Of course, there are some subtle differences.  East Germany was an oppressive police state that killed people trying to escape.  While America is a free county.  With a free market.  Where you can move your money to any bank you wish.  Without the threat of being gunned down by the state.

We call this free market capitalism.  Businesses compete for you business by pleasing you more than their competition.  You don’t need a law to make banks please you.  If you don’t like how a bank is treating you, leave.  All you have to do is open a new account.  Withdraw your money from the old account.  And deposit it into the new account.  It’s that easy.  It sure is a hell of a lot easier than trying to
climb a barbwire wall under withering machine gun fire.

If Government Favoritism Bothers you Perhaps you should Direct your Angst at Washington D.C. at the Next Election

These protestors may hate capitalism.  Because they were taught that on our college campuses.  But they sure love some of its billionaires.  Even though they belong to that 1% (see Protesters should not target entrepreneurs like Steve Jobs by Antony Davies posted 10/12/2011 on The Morning Call).

Steve Jobs, the co-founder of Apple who died last week at age 56, left the world a better place than he found it — and not just because of the treasure trove of gadgets he shepherded into creation.

Mr. Jobs’ life is a testament to what economists have long been telling us — that wealth and plunder are not the same thing. Plunder is what you get when you take from others. Wealth is what you get when you give to others.

Due to his commercial success, Mr. Jobs accumulated $8 billion of wealth over his life. But you won’t see Occupy Wall Street protesters coming after Jobs or Apple because it is so obvious that we freely gave our money to him in exchange for his products. We don’t view Jobs’ wealth as plunder, but as one-half of a transaction. We gave him $8 billion and he gave us the world that science fiction authors promised.

We voluntarily gave our money to billionaire like Steve Jobs.  The Occupy Wall Street mob is trying to take money from others.  The Steve Jobs of the world create wealth because they please us.  People like those on Wall Street threaten us for plunder or else.  Steve Jobs good.  Plunderers bad.

The young protesters currently occupying Wall Street should be careful where they direct their ire. People like Steve Jobs who gained their wealth by providing value to others — including the protesters using iPhones to call their friends — shouldn’t be the subject of protest. The protesters should focus their ire on those who use the political process to gain plunder by forcing the rest of us to subsidize their losing business models.

Some of these pirates can be found on Wall Street. They benefited when the government forced taxpayers to underwrite Fannie Mae and Freddie Mac’s largesse, and they benefited when the government forced taxpayers to bail out the companies that bet on that largesse.

But they’re not just in New York City.

Let us not forget that Fannie Mae and Freddie Mac are Government Sponsored Enterprises.  With close ties to the government.  Executing government policy.  And being under the official oversight of the government.  In particular, at the time of the subprime mortgage crisis, Barney Frank and Chris Dodd.  Who kept saying there’s nothing wrong with Freddie or Fannie.  That they were both as sound as a pound.  All the way up to the Great Recession.  Which they caused.

Pirates can be found on Main Street, where businessmen ask the government to create an unfair licensing system that will hamstring their competitors. They can be found in the public sector, where public unions ask the government to maintain a system that forces us to use the U.S. Postal Service to send first-class mail. Some can even be found on the farm, when they fight to maintain government requirements to put ethanol in our gas tanks and pay huge tariffs on imported sugar.

Here’s my point. Pirates can be found in all cities, and in all sectors, but their power to plunder has its source in one city: Washington, D.C. The federal government and the businesses that use political ties to force their products on consumers aren’t creating value — they’re enriching themselves at our expense. If protesters want to stop the plunder, then they are protesting in the wrong place.

That’s right, it takes two to tango.  And to plunder.  Lobbyists can’t lobby politicians unless they’re for sale.  Corporations can’t plunder unless they have cronies in Washington letting them.  By restricting competition.  And this is the key difference between capitalism (such as Steve Jobs used) and crony capitalism (such as what everyone is pissed off about).  It’s is crony capitalism that gets special favors from government.  In exchange for campaign contributions.

So if this kind of government favoritism bothers you, perhaps you should direct your angst to those who make the rules.  Washington D.C.  And by that I mean at the voting booth at the next election.  The way real democracy works.

The Occupy Wall Street Protestors have no Idea about Capital, Labor, Regulatory, Distribution, Insurance or Piracy Costs

And speaking of piracy, let’s talk about that a little.  And I’m not talking about bootlegging music or movies.  I’m not about literal pirates on the high seas (see Prepare to repel boarders posted 10/13/2011 on The Economist).

SOMALI pirates can be persistent. They have attacked the Maersk Alabama, a container ship owned by an American subsidiary of Denmark’s Maersk Line, no fewer than five times, most recently in May. In the first attack, in 2009, the captain was held hostage until the US Navy rescued him. Then Maersk put private armed guards on the ship. Since then, it has successfully repelled all boarders.

Maersk says it is only arming a few ships plying the pirate-infested waters off East Africa. But the practice is spreading rapidly among shipping firms despite the cost, which can run to $100,000 per voyage for a four-man team. That is because the number of attacks, off Somalia and elsewhere, has kept growing despite the strengthening of naval patrols (see chart). The European Union’s NAVFOR task-force, NATO warships and other navies patrol the waters off Somalia, but this has only pushed the pirates out into the open ocean, extending their attack zone towards India’s coast and as far south as Mozambique’s. This has forced the shipping industry, its insurers, and the national and international authorities that oversee them to accept that private armed guards are a necessity.

American ships plying these waters are bringing American-made goods to overseas markets.  Which everyone agrees is vital to our economy.  A positive balance of trade.  More exports.  Less imports.  And here we are trying to deliver our exports.  And having our ships hijacked by pirates.

Protestors hate corporations.  Because that’s where rich people sit back with their feet up on their desk puffing away on their fat cigars.  While counting their money.  At least, that’s what the protestors think.  They have no idea about the capital costs for plant and equipment.  Labor costs.  Regulatory costs.  Distribution (container ships ain’t cheap).  Insurance.  And, of course, piracy on the high seas and ransom demands.

Protestors are no fans of military spending, either.  They think the military is used just to invade other countries so we can steal their oil.  Well, they can’t blame this Somali piracy on America.  For the Somalis are stealing from anyone.  And nations everywhere have banded together to try and protect their trade routes.  But can’t.  Which is pretty sad.  Because during World War II we eventually defeated the U-Boat menace in the North Atlantic.  Of course, back then, we spent what was necessary on the military to win.  Unlike today.  Where the military budget is just a source of funds the Wall Street protestors want to plunder.

The Occupy Wall Street protestors are Acting like Spoiled Children, Like a Bunch of Eric Cartmans

The Occupy Wall Street protestors hate banks.  Capital formation.  Corporations.  That is, capitalism.  How do we know this?  Because they have told us.  Via Twitter.  Blogs.  YouTube.  Which they wrote and/or recorded on their Apple products.  And uploaded it to the Internet.  That we then downloaded on our Apple products.  Or other devices.  All of which made possible by banks, capital formation and corporations.  That is, capitalism.

These kids love capitalism.  They love the toys capitalism offers.  They just hate not being born into privilege.  Where they can afford to satisfy every want and urge as soon as they have it.  Without having to work hard or wait until they can afford to pay for these things.  They’re acting like spoiled children.  Like a bunch of Eric Cartmans.  Except for that part about being a bunch of filthy, stinking hippies.  For everyone knows that hippies are the bane of Cartman’s existence.  But apart from that one difference, these protestors are Eric Cartman.

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Capitalism vs. Communism, Socialism, Occupy Wall Street and President Obama

Posted by PITHOCRATES - October 14th, 2011

The Corporation was Created to Raise Capital and Manage Risk so they can Build the Stuff we Want

No wonder the Occupy Wall Street people have their heads filled with nonsense.  Here’s an Ivy League publication that doesn’t even understand what a stakeholder in a corporation is.  They have a stake, i.e., a share.  They own stock.  They’ve risked their capital.  And if you don’t risk capital, then you’re just not a stakeholder (see Occupy Wall Street: What Businesses Need to Know by Hari Bapuji and Suhaib Riaz posted 10/14/2011 on the Harvard Business Review).

The demonstrators are asserting that they are stakeholders in American business, and they’re correct — they are stakeholders, as consumers, as employees, and as citizens affected by the financial system in general.

No they’re not.  Unless they bought stock in these corporations.  Which I doubt, because people typically don’t protest against companies they invest in.  Unless they’re idiots.

The corporation was created to raise large amounts of capital.  And manage risk.  By selling stocks to shareholders.  So they can raise the money to build the stuff we want.  Things that hopefully would make a profit one day.  A profit that the shareholders would share in.  As they are the ones taking the BIGGEST risk.  The corporate officers of these corporations have a fiduciary responsibility with the shareholders.  To make a profit.  It’s their company.  They paid for it.  And these shareholders owe nothing to that mob on Wall Street.  Unless any of them own stock.

You’d think those writing for a business school would understand basic business 101.

Businesses should look at whether existing models of compensation are contributing to this inequality. They need to find ways to reward performance without increasing pay disparities. Developing new models of compensation and governance is not easy and can only be possible through a long-term and sincere engagement with a wide set of stakeholders, such as regulators, academics, and representatives of workers.

They want to do away with merit.  And introduce something more akin to communism.  Where everyone is equal.  No matter the value of their work.  People have tried this.  In North KoreaCuba.  And the former Soviet Union.  Note the word ‘former’ in that last one.  There’s a reason why it’s former.  No one wanted to do the harder jobs if they didn’t get paid any more for the additional brain power or risk.  And those stuck carrying the weight of their comrades?  They just didn’t bust their ass in the process.  And that’s why the Soviet Union is a ‘former’ union.

But this is what the Occupy Wall Street people want.  Force people to do those harder jobs.  But pay these wealth creators no more than them.  Even if they only work at a Starbucks.  Or collect government assistance.

The Egalitarian Polices of the Great Society Destroyed the Economy in the Seventies

So an Ivy League publication doesn’t understand business.  But you know who does?  Al Jazeera.  Their conclusions are all wrong but at least they get a lot of stuff right along the way (see The instability of inequality by Nouriel Roubini posted 10/14/2011 on Al Jazeera).

While these protests have no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalised world; resentment against corruption, including legalised forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies.

Of course, the malaise that so many people feel cannot be reduced to one factor. For example, the rise in inequality has many causes: the addition of 2.3 billion Chinese and Indians to the global labour force, which is reducing the jobs and wages of unskilled blue-collar and off-shorable white-collar workers in advanced economies; skill-biased technological change; winner-take-all effects; early emergence of income and wealth disparities in rapidly growing, previously low-income economies; and less progressive taxation.

American industry is uncompetitive.  That appears to be the problem.  That’s why there are fewer jobs.  So people who earn income via their labor are being priced out of the market by their generous pay and benefit packages.  But people who earn their income via capital always have a place to invest capital.  Capital is capital.  It is always competitive.  That’s why more wealth is accumulating to the rich.  Because they haven’t killed their golden goose.  Like unions have killed unskilled American manufacturing.

This doesn’t explain those kids on Wall Street, though.  The ones with college degrees.  Their problem is their degrees.  Many of them are worthless.  Probably a lot of English majors out there.  Or have degrees in sociology.  Anthropology.  Philosophy.  Women studies.  Etc.  But there just aren’t a lot of stores out there selling this stuff.

The increase in private- and public-sector leverage and the related asset and credit bubbles are partly the result of inequality. Mediocre income growth for everyone but the rich in the last few decades opened a gap between incomes and spending aspirations. In Anglo-Saxon countries, the response was to democratise credit – via financial liberalisation – thereby fuelling a rise in private debt as households borrowed to make up the difference. In Europe, the gap was filled by public services – free education, health care, etc. – that were not fully financed by taxes, fuelling public deficits and debt. In both cases, debt levels eventually became unsustainable.

Too much debt is never a good thing.  But those bubbles weren’t the result of inequality.  They were the result of trying to make everyone equal.  Extending credit to the credit unworthyPutting people into houses who had no business owning a house.  That was the fault of irresponsible government policy.  Not inequality.  Just like the free education, health care, etc.  We didn’t have these problems when those things weren’t free.  And when only people who could qualify for a mortgage were getting mortgages.

The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalisation, unfettered financial capitalism, and redistribution of income and wealth from labour to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fuelled by credit bubbles and asset-price booms and busts.

Karl Marx was wrong.  At least, he hasn’t been proven right yet.  And many have tried.  The Soviets.  The Chinese.  The North Koreans.  The Cubans.  Marxism has been an abject failure.  And those busts were made worse by monetary policy trying to eliminate them.  If credit wasn’t so cheap and mortgage standards weren’t so low there would have been no housing bubble.  It was government policy that encouraged people to accumulate debt.  Not inequality.  Government is just bad at running things.  Which is why Marxism has been an abject failure.

Thus, the rise of the social-welfare state was a response (often of market-oriented liberal democracies) to the threat of popular revolutions, socialism, and communism as the frequency and severity of economic and financial crises increased. Three decades of relative social and economic stability then ensued, from the late 1940’s until the mid-1970’s, a period when inequality fell sharply and median incomes grew rapidly.

Some of the lessons about the need for prudential regulation of the financial system were lost in the Reagan-Thatcher era, when the appetite for massive deregulation was created in part by the flaws in Europe’s social-welfare model. Those flaws were reflected in yawning fiscal deficits, regulatory overkill, and a lack of economic dynamism that led to sclerotic growth then and the eurozone’s sovereign-debt crisis now.

Government spending exploded during the Sixties.  They printed so much money in the Seventies to pay for the obligations of the Sixties that Nixon decoupled the dollar from gold.  So he could print more money.  Giving us record high interest rates.  And record high inflation.  Weak GDP.  And high unemployment.  This was all because of the egalitarian polices of the Great Society.  They destroyed the economy in the Seventies.  Reagan and Thatcher brought back prosperity.  By stopping the insanity.  They cut taxes.  Cut regulation.  And the economy took off.  It’s the reversal of the Reagan-Thatcher policies that are returning the economy to the malaise of the Seventies.  Both in the UK.  And the USA.

In the Soviet Union all of the Good Stuff came from the Decadent, Capitalist West via the Black Market

But this socialist/communist claptrap is what they’re teaching in American universities.  These protestors don’t understand the role of capital in the modern economy.  The entrepreneurial spirit.  Risk management.  They don’t understand anything other than that they weren’t born into privilege.  And this just pisses them off (see OWS’ Program? Distract From Dems’ Failures by Charles Krauthammer posted 10/14/2011 on Investors.com).

To the villainy-of-the-rich theme emanating from Washington, a child is born: Occupy Wall Street. Starbucks-sipping, Levi’s-clad, iPhone-clutching protesters denounce corporate America even as they weep for Steve Jobs, corporate titan, billionaire eight times over.

These indignant indolents saddled with their $50,000 student loans and English degrees have decided that their lack of gainful employment is rooted in the malice of the millionaires on whose homes they are now marching — to the applause of Democrats suffering acute Tea Party envy and now salivating at the energy these big-government anarchists will presumably give their cause.

Except that the real Tea Party actually had a program — less government, less regulation, less taxation, less debt.

What’s the Occupy Wall Street program? Eat the rich. Then? Haven’t gotten that far. No postprandial plans.

It’s ironic that that they hate corporate America but love to indulge in their products.

During the Cold War.  When there was full employment behind the Iron Curtain.  In the tractor factories.  People stood in line all day to buy soap and toilet paper at reasonable prices.  But they bought Levi’s on the black market.  And anything else they wanted that wasn’t dreary and drab.  Or scratchy and caustic.  Whatever the price.  Why?  Because all of the good stuff came from the decadent, capitalist West.

These protestors need to read a little history of what it was like when there was true egalitarianism.  It sucked.  That’s why Soviets defected to the U.S.  And Americans didn’t defect to the U.S.S.R.  Because capitalism was better.  People lived better under capitalism than they did under communism.

The President of the United States should not use the Risk of Civil War as a Reelection Strategy

As Krauthammer says in his column, this Occupy Wall Street movement has political motives.  Obama is following in the shoes of Jimmy Carter.  The economy is in the toilet.  His policies have all failed.  And he has no chance of reelection based on his record.  So he is using the class warfare card.  Which is irresponsible.  And dangerous.

Obama is opening a Pandora’s box. Popular resentment, easily stoked, is less easily controlled, especially when the basest of instincts are granted legitimacy by the nation’s leader.

Mobs are easy to create.  But they take on a life of their own.  Are dangerous.  And unpredictable.  The president of the United States should not use the risk of civil war as a reelection strategy.  Because it’s not exactly constitutional.  Or in keeping with the oath of office he swore.

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The Wall Street Protesters’ Pain is a Joke to those Truly Suffering around the World

Posted by PITHOCRATES - October 10th, 2011

Cuba is Imploding.  Like all Communist Countries Have.  Are.  Or Will.

Wall Street is bad.  Capitalism is bad.  Because they put profits ahead of people.  Instead of putting people before profits.  Like they do in Cuba (see A Troubling Sign that Economic ‘Reform’ in Cuba Isn’t Working by Juan Carlos Hidalgo posted 10/10/2011 on Cato@Liberty).

The number of Cubans intercepted at sea trying to reach the coast of Florida more than doubled in the last fiscal year according to figures released by the Department of Homeland Security…

This is yet another sign that the much heralded economic “reforms” announced by Havana aren’t working. The massive layoffs of hundreds of thousands of public employees undertaken by the government of Raúl Castro were meant to be absorbed by Cuba’s almost non-existent private sector…

Earlier this year I talked to an official from the U.S. Interest Section in Havana who told me that we shouldn’t be surprised if we see a steady increase of Cubans trying to escape the island towards the United States. Faced with a dilapidated economy, hundreds of thousands of unemployed, and growing social unrest, the Castro regime wouldn’t hesitate in letting more Cubans use the “escape valve” of emigration. We might be seeing the first signs of this.

The Castro brothers (Fidel and Raúl) are no fans of America.  Or capitalism.  No.  Cuba is a hardcore communist country.  Because the communist way guaranteed the best of everything for everyone.  Without corporate greed or the pursuit of profit getting in the way.  But Cuba is imploding.  Like all communist countries have.  Are.  Or will.  As they always will.  Whenever you have the government put people before profits.  Because when states do that somehow the people always take it on the chin.

So the solution to save their people?  Get rid of their people.  Let them swim to America.  Because if they’re no longer in Cuba they no longer have to feed them.  House them.  Or fight them in the inevitable revolution.

Life is Truly Difficult in Syria with some 400 People Dying on Average each Month

Castro would rather these people flee his communist utopia than fight them.  Because this kind of thing has been going on in North Africa.  The Middle East.  And he wants none of that (see Syria violence: EU poised to announce fresh sanctions in wake of latest killings by Adrian Blomfield posted 10/10/2011 on The Telegraph).

More than 30 people were killed in the latest wave of violence after security forces opened fire on a funeral in the city of Homs and the army clashed with deserters from its ranks who have defected to the opposition. The battle underscored the growing shift in the uprising from the peaceful demonstrations of its early days to an armed insurrection that is gaining strength on the periphery of what is still an overwhelmingly civilian revolt.

The latest fatalities took the overall death toll since the uprising began to just under 3,000, according to UN calculations.

Makes you scratch your head about the Libyan War.  For we launched that war to prevent these things from happening in Libya.  And here they are.  Happening in Syria.  And yet we have a different policy.  Why is that?  But that’s another story.

This brutal oppression has been going on for some 7 months.  And it’s only gotten worse.  After living under such an oppressive regime these people won’t give up.  And neither will Assad.  Making life truly difficult in Syria.  And claiming some 400 lives on average each month.  For now.

Why is Europe the go-to Continent during Humanitarian Crises?  Because they are Richer and More Capitalistic.

Some of these Syrians are fleeing their country.  A lot of them are trapped for the duration.  Not really knowing what their nation’s fate is.  Or their own.  As millions of others face turmoil throughout the world.  And millions of these are fleeing their countries.  And for their lives (see Multiplying crises create 43 million refugees by D. Parvaz posted 10/10/2011 on Al Jazeera).

Regional conflicts and the potential for violence have complicated aid efforts aimed at the nearly 12 million affected by the drought in Africa. The unrest rose to such a level that people were crossing over from Libya to Tunisia, from which people were also fleeing to France and Italy due to mass unrest.

According to the International Organisation for Migration (IOM), as of September 30, more than 700,000 people have left Libya, with the bulk of that migration, 304,127, heading to Tunisia…

Livio Zilli, the international secretariat of Amnesty International’s Refugees’ and Migrants’ Rights Team, points out that many of the people leaving Libya aren’t Libyan nationals, but likely were already among transient populations who were forcibly displaced due to security or economic issues. These people are refugees twice over…

This, said Zilli, makes the current situation: “A refugee crisis on the doorsteps of Europe.”

And Europe might not want to deal with it, he said.

Like Europe doesn’t have enough problems to deal with.  What with that whole sovereign debt crisis crippling Europe.  They’re going broke.  And spending more and more tax dollars to try and save the Euro.  Which is in danger of going the way of the dodo because of excessive government spending.  That caused excessive government debt.  And the last thing they need are tens of millions of refugees being fed and housed on the taxpayers’ dime.

Yes, this is a humanitarian crisis.  But Africa was here before Europe.  So why is it that Europe is the go-to continent during humanitarian crises?  Because they are richer than most of these countries in crisis.  And more capitalistic.  Where the Rule of Law keeps the peace.  And puts no one above the law.  Setting the stage for a prosperous free market economy.  That can provide for all a nation’s needs.  Or trade for them during times of crisis.  All handy things for a safe, healthy, prosperous nation.

No Doubt some of the Egyptian Protestors from 8 Months back are having Buyer’s Remorse

Egypt had a lot of these things.  By Middle East standards it was a pretty prosperous nation.  People had more freedom than others.  A bustling tourism industry thanks to a rich and glorious past.  Peace and stability with its neighbors.  And within the country.  Even Muslims and Christians lived together in relative peace.  For all its corruption, oppression and faults, it was one of the most benign of Middle East dictatorships.  But the Egyptian people threw out the tyrant during the Arab SpringHosni Mubarak.  And it hasn’t been as peaceful since (see Coptics Criticize Egypt Government Over Killings by David D. Kirkpatrick posted 10/10/2011 on The New York Times).

Egypt’s Coptic Christian church harshly criticized the government on Monday over its actions in crushing a bloody protest in Cairo the night before that left at least 24 people dead, mostly Christians, as grieving families began to bury their dead, some of them mangled by tanks, bullets and beating wounds.

The protest on Sunday was the most violent in Egypt since the revolution that toppled Hosni Mubarak from the presidency eight months ago and raised new questions about the country’s ability to move forward toward a pluralistic and tolerant democracy…

The violence on Sunday began after a demonstration by Christians angry about a recent attack on a church. By day’s end it had morphed into a raging riot directed against the military council that has ruled Egypt since Mr. Mubarak was ousted in February. The violence seemed to be aggravated by the public’s widespread distrust of the military’s authority because of repeated delays in turning power over to Egyptian civilians.

After some 8 months of ‘freedom’ from the tyrant the country still bleeds.  And burns.

If you’re a Christian in Egypt you no longer have the peace and security you had under Mubarak.  And if you’re a Muslim that just wants to live in peace with everyone.  As you did before the Arab Spring.  You now risk being caught in the crossfire.  Eight months and still no democracy.  Still military rule.  And growing violence.  No doubt some of the protestors from 8 months back are having buyer’s remorse.  And probably believe perhaps Mubarak with some reforms might have been better than near-anarchy they’re seeing the occasional glimpse of.

The Protesters are Asking the People to Use the Power of Capitalism to Redress the Abuses of Capitalism

We finally have a demand from the Occupy Wall Street people.  Well, not so much of a demand.  But a request.  Not for the oppressive bankers and corporate thugs.  But for the people (see Wall Street Protests Get Specific: Could ‘Bank Transfer Day’ Pit Americans Against Their Big Banks? by Martha C. White posted 10/10/2011 Time Moneyland).

The growing anger directed at U.S. banks (especially the big ones that took federal bailout funds) over recent fee increases coalesced this weekend into a Facebook-driven campaign urging Americans to close their accounts at large banks and move their money to credit unions by Nov. 5.

Remarkable.  They’ll march on Wall Street because Bank of America imposed a monthly debit card fee.  But they could care less about the out of control government spending and regulation that takes more out of their pockets every hour of every day.  But I digress.

These protesters aren’t all that original.  I’ve heard of this request before.  They’re asking the people to use the power of capitalism.  If one business becomes less attractive to your needs let your wallet voice your displeasure.  They act as if we aren’t free to be able to do this already.  But we are.  And we have a myriad of choice available.  Because that’s what capitalism is.  Businesses compete against each other to see who can please us the most.

People Truly Suffering Around the World must be Thinking if Only they Had it so Bad as the Wall Street Protesters

There is real suffering around the world.  And these Occupy Wall Street people are whining about high bank fees.  They want government to intervene.  When they already have the power to cause change themselves.  We call it free market capitalism.  We have it.  A lot of people don’t.  People in Cuba.  Syria.  Libya.   Somalia.  Kenya.  Ethiopia.  And everywhere else where capitalism is constrained and maligned.

Can you imagine these people truly suffering around the world seeing these Wall Street protesters?  Playing their drums?  Tweeting their whiny tweets to family and friends?  Wearing face paint?  Women dancing topless?  While they starve.  Get run over by tanks.  And shot.  They must be thinking if only they had it so bad.

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