Yes, Even for the Rich

We have now entered the era of "compromise" if you are a Democrat.  The Bush Tax Cuts are set to expire, so the "compromise" that will no doubt be put forth by Barry O and the gang will be "let's keep the tax cuts for everyone BUT the rich."  Sounds soooo reasonable...come on you mean Republicans, play along!

No, don't.  As this poll illustrates, the American people understand economics a whole lot better than the numbskulls in Washington.  Small business people, you know the folks who create the jobs, are the ones hardest hit by this...let's pray after the explosion of this Tuesday past that we make the tax cuts permanent for EVERYONE.  Alexis de Tocqueville said it best: "Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom."  All men are created with equal opportunity, and that opportunity should be protected with our blood and treasure...not all will achieve equal outcome, and that too must be defended.

Jobless Numbers

They are doing back-flips at the White House today after release of the November jobless report that showed losses had slowed. No, there were no net job gains, we are still headed south and as the above chart illustrates we are doing so at a rate not seen since the Great Depression. Contrast those three lines - which one is the one we have spent over $1 Trillion in ? Oh, that's right, the worst one - the "Recession of O." One piece of good news, they don't seem to be trumpeting that little bit of happy smoke, the "jobs saved or created" number around. Maybe that file got mixed in with the CRU data...

"No!" To The Neo-Malthusians

From time to time we get angry posters here at the Rumbler Report screaming about population growth and how we are all going to die because some of us believe in the right to life. "You believe in magic," they scream, "we are running out of resources and we have to regulate who gets to have children!" They are living up to Thomas Malthus's famous quote: "Life is dull, dreary and short." Sad existence really...well this ought to cheer them up. Brendan O'Neill over at Spiked.com has penned a short piece that refutes the neo-Malthusian argument succinctly: "Too Many People? No, Too Many Neo-Malthusians." Enjoy the read and live a little!

Economic Freedom Slipping

Well, this will come as no surprise - U.S. economic freedom is slipping under the Obama administration. This is coming from Cato Institute and their annual study of international economic freedom (Cool interactive map available by clicking here!) Here's the current standing:

1. Hong Kong (8.97/10)

2. Singapore (8.66/10)

3. New Zealand (8.3/10)

4. Switzerland (8.19/10)

5. Chile (8.14/10)

6. United States (8.06/10)

7. Ireland (7.98/10)

8. Canada (7.91/10)

9. Australia (7.89/10)

9. United Kingdom (7.89/10)

-----------------------------------

19. United Arab Emirates (7.58/10)

27. Germany (7.5/10)

28. Japan (7.46/10)

33. France (7.43/10)

86. India (6.45/10)

111. Brazil (6.00/10)

112. Iran (5.99/10)

And last place

141. Zimbabwe (2.89/10)

Here are the categories that are used to arrive at these numbers:

1 Size of Government: Expenditures, Taxes, and Enterprises;

2 Legal Structure and Security of Property Rights;

3 Access to Sound Money;

4 Freedom to Trade Internationally;

5 Regulation of Credit, Labor, and Business.

Hmm, last year we were second...now we are sixth..."size of government?" Oh yeah we are growing that beast at a heretofore unseen rate. "Security of property rights?" Kind of hard to maintain those when the needs of the O supersede - how do you say "GM Bondholder?" "Access to sound money?" Well, the dollar is in free fall and the U.N. and the Chinese keep yammering about a new world currency. "Freedom to trade internationally?" Well, slapping tariffs on Chinese tires and continuing to exclude Columbia from the benefits of a trade deal has got that covered. "Regulation of credit, labor and business?" Ha, ha, ha, ha, hoo, hoo, hee, hee - dear Lord, this man is less than a year into his presidency and we are headed for the United Socialist States of America! Check on all five. Amazing. Incompetent.

$9 Trillion Deficit!

More good news from Reuters: Revised deficit forecast to reach $9 TRILLION in 10 years. Now I understand that our economy is a dynamic system and should grow such that $9 TRILLION in ten years won't be the same as $9 TRILLION today...but this will become a giant sucking sound on our wallets. At what point do they stop dreaming up new programs to spend our money and worry about the commitments already made?

Eight Reasons Why Big Government Hurts Economic Growth

Great summary of why excessive government spending is a BAD idea. This should be required viewing in all American high schools.

Hat tip: Mark Perry over at Carpe Diem

Keynesian Clunkers

Zero Hedge has an excellent analysis of the economics of the "Cash for Clunkers" program that just got another $3 Billion of OUR money. Basically, the program is encouraging more personal debt and lathering on another heaping Cinnabon of debt onto the Federal err, taxpayers, books.

The Cinnabon of Debt!

From the article:

The $28,000 average price per car translates into a total sale value of $21 billion. Of that amount $3b will be borrowed by Treasury, the balance of $18b will be financed by the new owners.

A month from now the new payments will hit both households and Treasury. For Treasury the cost is $90 million a year. Just $7.5mm per month. Think of it as $7.5mm a month forever. For the households who are driving nice new cars the numbers are much worse.

If buyers finance their purchase with 8% money and a five-year payback the monthly nut for these cars is $375 million. Nearly $5b a year. The owners will have a fully paid asset at the end of the five years, but they have to pay for it in full. It comes to $500 per person each month on a fully loaded basis.

What? You mean it's not good to have another coupon book you have to pull and pay every month?

Over indebted consumers nearly killed us last year. CC’s, crazy mortgages, store cards, car loans you name it. We are not out of trouble yet from our debt binge. For the government to be crafting ‘solutions’ that just put another $18 billion of debt onto consumers is bad policy.

Simply put, this represents more flawed (panicked?) thinking on the part of our Democratic Masters, uh I mean, leaders, to jump-start the economy. Damned the cost! Full speed ahead. I have never been a big fan of Keynesian Theory - when I studied economics in the late 1970's, the theory was in the process of being completely discredited. But if you are going to do it, can't you at least do it right?

Yes, there may never have been such a "marriage of beauty and brains as that of Lopokova and John Maynard Keynes," but what we have right now is the marriage of socialism and power consolidation and it ain't pretty. But what the heck - we can all still afford a Cinnabon can't we? I sure hope so:

Blue Man Crying

I enjoy the penultimate blue man Joel Kotkin's writing on urban development and architecture. This is an interesting piece he has posted on Blue State Demographics. A couple of tidbits to inspire you to read it:

When the recovery comes, job growth also is most likely to resurge first in the red states, while the blue states continue to lag behind. For reasons as diverse as regulatory policy, aging infrastructure, and high levels of taxation, blue states continue to be more susceptible to recessions than their red counterparts.

Hmm, "high levels of taxation" are bad?

These demographic and economic trends will have a long-term political impact. The net in-migration states—almost all of them red—will gain new representatives in Congress after the next census while New York, Pennsylvania, Michigan, and perhaps even California could see their delegations shrink.

In fact, amidst the Blue Man’s current political ascendency, the devolutionary process is likely to continue. Its roots are very deep, and will prove more difficult to reverse than media and policy claques suggest. In historic terms, blue states’ relative decline represents one of the greatest shifts of political and economic power since the Civil War.

Look, as a proud resident of a staunchly red state, I want to see all the states do well. But if you need an example of what works in economic policy, the contrast of economic health between the two regions is stark.

We Miss You Milton

The maestro, Milton Friedman, would have been 97 today. Sadly, he left us at 94 in 2006. It's just as well - the inanity of Obanomics would have slayed him anyway. I miss his pragmatic, smooth diction. Here's a great piece from an interview he did with the poofy haired Phil Donahue...it's a Ginsu knife demonstration in logic:

Here's another nice piece on the power of choice. Would someone please play this for the Democrats in Congress?? Everyone else is figuring out that freedom works and we are busy heading the opposite way.

Evil

Howard Kunstler is not someone I typically agree with politically as much as I like his writings on urban development and planning. But he has an excellent column this week titled Evil Syndicated, and it is worth the read...whet your appetite:

As we turn the corner toward autumn, President Obama looks increasingly like a dupe, a tool, or a co-conspirator of Goldman Sachs. If he doesn't instruct the Justice Department to commence investigations of the company, and if he doesn't dissociate himself from their alumni hanging around the White House, the Treasury Department, and elsewhere in the government, he's going to become the object of an awful public wrath. Obama has no other choice at this point except to clean house - to fire Larry Summers, Robert Rubin, Tim Geithner, and all other former Goldman Sachs employees in positions of power and influence around him.

It's Coming...

This is grim news...more:

Wage hikes always cause a spike in the unemployment rate, and this year, with the country in the middle of a recession, businesses are already struggling to make ends meet. The economy will continue to hemorrhage entry level jobs unless legislators stop this summer’s minimum wage hike from happening.

Economists are nearly unanimous in pointing out that unskilled workers bear the brunt of minimum wage hikes. According to a 2007 survey from the American Economic Association at the University of New Hampshire Survey Center, 73 percent of labor economists believe increases in the minimum wage will lead to employment losses, which will fall disproportionately on the least skilled workers.

Teens get hit especially hard by wage hikes. Research from the University of Georgia (2006) found that for every 10 percent increase in the minimum wage, teen employment at small businesses decreased between 4.6 to 9 percent. Last summer’s 12 percent minimum wage hike contributed to a 5 percent drop in teen employment and the losses continued this year. Since Congress began implementing the 2007 wage hike, over 480,000 teen jobs have disappeared across the country.

Ahh, to heck with it - Congress passed it, it must be good!

Hayek put Simply

So simple even a liberal err, "progressive" could understand it: The Road to Serfdom In Cartoons.

Sign from the Tea Party

We had a little Tea Party in Nashville last week. As always, creative Tennesseans showed the way to another great bumper sticker! Unfortunately (or fortunately for our paint jobs), conservatives don't plaster their philosophies all over their cars - nevertheless, this is a great slogan.

It's WAR!

He is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.

Larry Kudlow has it exactly right. Read the rest of the article here.

I've been having this discussion with Rumbler's inner circle. It goes something like this:
Rumlepal: "Is Obama stupid? No one has ever climbed out of an economic death spiral by raising taxes!"
Rumbler: "The alternative is that he is an idealogue..."
Rumblepal: "But surely, he can't really believe that the government runs things better..."
Rumbler: "It's not about the efficiency of running it, it's about the control."
Rumblepal: "Naaw, I mean he's not really going to go through with this..."
Rumbler: "Dow's off almost 3000 since the Magic O took the lead over McCain in September -it still hasn't figured out where the floor is that icorporates the risk of an Obama presidency."
Rumblepal: "Is this window up here operable?"
Rumbler: "Step away from the ledge!!"

Weimar America

This is a chart of U.S. dollars in circulation. The steady line up to about 1971 was when we were on the gold standard. The straight line up at the end is the result of the first stimulus package - you know the one where we were all going to die if Congress didn't put the money in. The next stimulus package being debated right now would take the line OFF THE CHART!

Ummm...and we should put MORE money in?

Trammell Crow, RIP

We lost a real estate legend in the passing of Trammell Crow on Wednesday night. He was 94. Trammell came from a humble background in Dallas, Texas. He served in the Navy in World War II and when he came back, he went into real estate as a property manager and developer. He invented the concept of the trade mart and speculative building for industrial and warehouse space. His business model was simple - he wanted partners, not employees and he built the largest real estate empire in the United States on that principle. The Trammell Crow Company and Trammell Crow Residential were to be "Evergreen," to live on into the future after he was gone and in some form, they will.
Trammell was a man of his word. In down swings, it was not uncommon for Trammel to work deals out with lenders just on the strength of his promise...and he always kept it. I had the honor of being one of his partners and will remember fondly, his gracious style and his incisive mind. (That pic is your humble Rumbler with Trammell in 1986.) When he hosted partner get-togethers at his house in Dallas, he and his wife, Margaret, were the consumate entertainers. They were married for 66 years and I know she will miss him dearly. There was a joke running around in the '80's about Trump gazing on the New York skyline, pointing at buildings and saying "Got it, got it, want it, got it..." Trammell could gaze on the Dallas skyline and the skylines and suburbs of countless cities and say the same thing.

"We get more than one hundred qualified applicants for every newcomer we take on, and have been singled out as one of the best companies to work for in the United States. Yet this really isn't quite accurate, since as indicated these people won't be working for us, but rather for themselves with us. When a good person is in that position you don't have to watch him too carefully, since he will knock himself out to make certain the project succeeds. Believe me, it does remarkable things to a person when he's an actual owner of a property he's working on. Become an owner and things inprove. I guess that's just the way people are created."
-Trammell Crow

This is a lesson this incoming (and outgoing) administration and Congress should heed well. This is the essence of capitalism...let's keep what's left of it. We have lost a giant.

Math

Help me with this. Barack Hussein Obama (his Inauguration name, don't get mad at me!) says he needs $800,000,000,000 ($8 Billion) to save 3,000,000 jobs. OK, so if I line those up and cancel out the zeros that's $800,000 to 3...yes? OK, 3 goes into 800,000 umm, hang on, got to get my shoes off...266,666.66666666 times. Let's see that means each of those jobs is worth $266,666.67???

Hang on, let me untangle the signal halyard and hoist:















That's non-classified Navy-speak for Whiskey Tango Foxtrot???

Where do I apply?

Odd Looks

The headline over at the Wall Street Journal reads "Automakers would accept oversight board..."

Here's the photo:
I mean look at these guys! This is embarrassing!! The guy on the left, probably some dillwad attorney trying to look tough...next in is Colonel Potter with a comb over - oh, that's Mr. Union Man, Gettelfinger...then comes Mulally from Ford who looks like someone just pulled a new puppy out to show him...then comes Nardelli from Chrysler who has the "Why am I here when I could have these clowns whacked" look...

I officially hate the bailout. To watch these guys with straight faces tell Congress that they will do anything that Congress wants them to do is like watching some junkies beg for methadone. It's downright unseemly. Mulally was right, one of either GM or Chrysler is going to fail and fail catastrophically. That's what happens in capitalism. Then Ford or the other survivor, or a foreign manufacturer buys the production capacity, the fat gets trimmed and off we go again. The alternative is the Democratic nationalization of auto production...this is what you will end up with:
That little beauty was built by the Soviets from 1940 something to 1980 something...it's the Zaz! Maybe Congressman Waxman will demand that the fuel efficient models have a sporty touch, so they can add a spoiler! Yessir, yessir...here you are sir:

How about a convertible with extra safety bumpers and ADA step up ladder? You got it:

We have truly fallen down the rabbit hole. The free market is dying before our eyes and the same clowns that negotiated those great deals with the Unions and awarded themselves huge bonuses are now going to get to give monthly term papers to Congress. We're doomed.