Quid Pro Quo as Detroit Swirls the Bowl

As the "leaders" of the most pathetic example of modern day liberalism meet to discuss the method for  blaming someone else for their stupidity, this moron distinguishes herself by her proposed solution.

She claims that "leadership" demands begging for bacon (as she puts it) from Obama because she and the overwhelming majority of other non-thinkers voted for him. It's payback time.

She claims it worked before. Who can argue with logic like that? How long before this comes to Illinois?

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Liar, Liar, Your Car's On Fire

When I was a kid the rhyme was about your pants being on fire, but since Obama (and his economic mentor GWB before him) hasn't bailed out any clothing companies, the ditty had to be changed a bit.

Our guest columnist Wes Messamore ran a piece yesterday on his excellent blog The Humble Libertarian about the lies being told by Obamanocchio concerning the bailout of union thugs and the idiot management at Chrysler and Government Motors. There were quite a few whoppers, as usual.

And Wes wasn't the only one who noticed. The Washington Post ran a story  pointing out all the semi-clever deceptions and half truths that splintered off Geppetto's wooden President in Ohio last week while mysteriously courting the only people who will never turn their backs on him at election time.

I'm not a political wizard but I find it odd that candidate Obama would spend time trying to convince unionists to vote for him when they are already a sure thing. But he tricked the children once already so who am I to question his tactics?

One thing is certain, the puppet master for our needle-nosed leader is none other than the unions he bailed out with your money. When he told Joe the plumber he wanted to spread the wealth around, poor old Joe probably thought he meant transferring it from rich to poor, not from the non-union worker to the union worker.

Maybe Joe should have aspired to build electric cars that no one buys instead of fixing toilets that always have to be flushed twice.

Inflating the Money Bubble

Image courtesy of http://immobilienblasen.blogspot.com/

There has been much talk about bubbles lately. One was the bubble in the real estate prices. Another was the bubble of consumer debt. And stock market bubbles were all the rage just a few years ago when (then) Federal Reserve Chief Alan Greenspan made a comment about "irrational exuberance" after investors used his easy money policies to bid up the price of any company even remotely connected to the "dot com" industry. (His remark was quite premature when he made it, but the warning proved correct after a time.)

No one minds Bubbles too much as long as they own some of the assets on the "up escalator."
During one such ascension in stock prices, my former colleague and close friend on the exchange floor, "Geo", used to wear a badge on his trading jacket that said, "Never confuse brains with a bull market." Good advice, but rarely taken.

The problem with bubbles, of course, is that after they inflate too much, they tend to burst. The bigger the bubble, the bigger the bust. And when that happens even those not chewing the gum can get sprayed with the residue. Witness the last few years, when most of us got hit with financial debris as the value of our homes imploded after a real estate bubble with which very few of us had any connection.

As bad as that situation is, the next implosion may make it seem like a smallish pop by comparison. Absent any meaningful action to correct the expansion of the money supply, our once great experiment in democratic republicanism is headed for the laboratory trash can faster than almost any of us can imagine. And since no such action is yet on the radar screen, the Republic we live in threatens to become the banana variety in a historical blink of the eye.

The current President, like the last, is in denial. Just yesterday he essentially declared that the "stimulus" pork spending and big business bail-out preceding it saved the world. Nothing personal, but if he actually believes that, he is a buffoon. If not, well, let's just say he is worse than any of his critics actually realized. My hope is that  it is the former. That way he can just blend in with most other politicians.

So, a refresher course in "inflation 101" is in order for all of us. In fact for many, it may actually be a primer since they have been misinformed for so long about what inflation actually is. It's not a text book concept, it is an "up close and personal" theft of all of your savings.

"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output".- Milton Friedman.

What this means is that rising prices themselves are not inflation, they are the symptom of it. In other words, when your nose runs, it's because of the cold you have. That's why Kleenex and NyQuil don't correct the problem. The rising prices are the sneeze, inflation is the virus which caused it. People don't die from colds, but countries often die from inflation.

And that is why having a slowing economy can't regulate inflation. Decreased spending can stifle rising prices when they are caused by high economic activity, but since inflation is caused by devalued money (not increased demand) restrained spending can not work against it. 

In the initial stages, inflation lags somewhat as the newly printed money takes a while to work through the economy, and this time around is no different. The vast amount of new spending by the economic illiterates running this country has hardly begun. And there is very little demand for new "stuff" when much of the country is unemployed. That is the reason we haven't experienced the pain as of yet. (I know it's hard to stay awake during these dissertations, but our future is at stake here.)

So it might be time for alert level one when you should "get a helmet" as comedian Ron White advises, because the time is approaching for alert level two, when you should "put the damn helmet on." When the current inflated money balloon bursts you will need one with a chin strap.

People my age still remember the 21% interest rates of the 70s quite vividly. This time around the bubble is exponentially larger, so go figure. Trillions of dollars of deficits have the presses at the treasury printing Franklin's faster than the "hope" is fading, so your retirement budget may need a few changes. Maybe a "cat food" category to replace the "cabin at the lake" category.

If you have read this far perhaps you will read the essay which will follow shortly. That piece will deal with the personal consequences of continuing the insane policies which are rendering the US dollar worthless. As a bonus, I'm going to tell you how to make the Social Security and Medicare funding problems disappear, the "Chicago way."  Stay tuned.

Tales of the Bizarro World

I’m sure most people my age or older can remember the Superman Comics and the wonderful imagination of the authors who cooked up the idea of a “Bizarro” world, where everything was opposite of the real world. At least what the real world was back then.

No, the world back then wasn’t perfect, far from it, but the fantasy of those authors had to do with the American ideal, not the imperfect world it always has been. I remember the intro to the Adventures of Superman show on TV which referred to “Truth, justice and the American way“. It seems that back then it was still OK to think the American way was the correct way. Now it’s the "Chicago Way". (that's an essay for a different day)

The American way, as I understood it then, was that you had to work to earn your keep, you had to take responsibility for yourself and your family and then were expected to care for your neighbor. You were free to succeed, or fail.
Ideally, the government was a group of people who were pressed into service, rather than sought it out so they could mind everybody else’s business. Their important task was to defend the rights of those who they served, and little else.

Businesses were owned and operated by private people and the government only got involved in that arena when some needed service could not be provided by the people themselves due to a lack of sufficient capital. (Think of the post office or the Erie Canal)
In that world, the government praised successful companies and gave failed ones a decent burial. Things are, well, a little different now.

Government in the Bizarro world rewards failed companies with billions and billions of dollars taken from the successful and threatens with lawsuits and new regulation any companies who dare to actually serve the public by providing goods and services which are actually in demand.
Microsoft, ATT, IBM and others come to mind a few years back and Google, et al, are the targets today. Meanwhile, failed banks, brokerage firms and automobile companies with crummy management and bad business models are “invested in”. The message is fantastical if you think about it.
You are in trouble if you get too big, but by then you are “too big to fail” and they will be delighted to bail you out, if only you will become incompetent.
Of course that’s not weird in the Bizarro world.

Only in the port sided environment where we current live, could a group who runs a mandatory retirement plan which is shortly to be upside down, a medical system that is already in deficit, a regulatory body which can’t catch a Ponzi operator (even after having multiple experts explain to them for years in advance the exact method of the criminality), now propose to an adoring public that they be rewarded for those efforts by being put in charge of an expansion of the regulations and the regulated, a new health care system to be built on the model of the one currently collapsing, and the management of banks, car companies and insurance companies. I don’t think even the creators of the Bizarro Superman could have thought this stuff up.

But in the Bizarro world, Superman would order a double Kryptonite burger at his far off, slow food restaurant and gobble it down as quickly as the citizen lemmings are now swallowing the bizarre menu choices currently before them. With the same results I fear.

This is helping?

It seems we are unhappy that banks needed "bailout" money from the government. Those people were supposed to be smart! Turns out they were stupid, and they ruined the country!
Umm, maybe.
But upon further reflection, perhaps we were a little too quick to trust the media and didn't see the obvious path that things were going down.
No "help" ever comes from anyone without conditions. And if you don't actually want help but have it thrust upon you, you better be sure your skepticism hat is secure on your head.
This issue concerns the banks in our country and who controls them, but the concept can be applied to any business, and we should all be frightened about which industry is next. It seems that more and more banks want to return their TARP funds, but the government won't take the money back. HUH?
Read the Wall Street Journal article and consider the opinion there. It will be time well spent in my opinion. What's your opinion?