Category Archives: Democrats

Another bad idea brewing in Europe

Posted on by
1

As pointed out previously, bad ideas that begin in Europe tend to find there way over here. And this is a bad idea that Democrats (especially one Barack Hussein Obama) will love. The financial transaction tax:

A new report, launched in Brussels on Monday by the Socialists and Democrats in the European Parliament, shows that – contrary to what the finance sector’s paid lobbyists have been insisting – a European financial transaction tax (FTT) would boost growth in Europe by at least 0.25%,  raise the revenue to combat poverty and climate change at home and abroad, and help re-balance the economy by making long-term investment more worthwhile than short-term, high frequency trading. This new report by noted economists Prof Avinash Persaud and Prof Stephany Griffith-Jones comes on top of revised estimates from the European Commission who originally produced some of the data that fat cat financiers pounced upon. The Commission’s original impact assessment was based on a flawed model which shows all taxes as harming growth, whatever the revenues are used for, but misunderstandings of what the impact assessment showed were used to create concern among progressive politicians and abused by people opposed to the tax all along to justify their position (even though the same people shed few tears over the impact on growth of measures they support like increased VAT or cuts in public services.)

Right…

The EU will regulate the economy is such a way as steer money in to long-term investment more worthwhile rather than short-term, high frequency trading. What could go wrong (other than making it difficult for publicly traded companies to raise capital through the sale of stock i.e. trading)?

Tim Worstall, my favorite economist, described this lunacy perfectly:

What are these people smoking?

Couldn’t have said it better myself.

How Obama admin is skewing data, creating illusion of falling jobless numbers

Posted on by
3

Via Robert Reich @ The Guardian blog:

President Obama’s only chance for rebutting Republican claims that he’s responsible for a bad economy is to point to a positive trend. Voters respond to economic trends as much as they respond to absolute levels of economic activity. Under ordinary circumstances, January’s unemployment rate of 8.3% would be terrible. But compared to September’s 9.1%, it looks quite good. And the trend line – 9% in October, 8.6% in November, 8.5% in December, and now 8.3% – is enough to make Democrats gleeful.

The new 8.3% unemployment number is such a scam. As pointed out on Zero Hedge:

it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation.

A picture is worth a thousand words.

How can the BLS just drop 1.2 million people from the labor market? In one month no less.

Rush Limbaugh sums up this data nicely:

But the raw numbers, 130 million jobs in December, 128 million jobs in January, give or take a couple hundred thousand either side. But when the seasonal adjustments take place, there is a gain of 200, whatever they’re reporting, 33,000 jobs. Now, what’s happening is the labor force is shrinking. There are fewer jobs. Even the Drive-Bys, so excited, they can’t wait to report the good news, but even they are reporting that the labor force participation rate, number of jobs out there, is continuing to dwindle, and most of the jobs being created are low wage.

But none of that’s gonna matter. None of it’s gonna matter. I don’t want to be an “I told you so,” but way back last year, even recently toward the end of last year, this being an election year, I predicted. But you knew. You knew what was gonna happen when this year started. You knew that the statistics are that no president has ever been reelected when the unemployment rate’s over 8%. So guess what it’s gonna be by the time we get to Election Day? It’s just that simple.

Yep. The left will stop at nothing to get Obama re-elected.

Interesting Graph: How charities and religion (should) solve the problem of social spending

Posted on by
Reply

Found this very interesting graph at the Adam Smith Institute.

Via ASI:

As they show in Figure 1. (pg 259 of the paper) European welfare states (such as Sweden, Denmark, France, Germany, Norway etc.) experience traditionally high levels of social spending (measured as a % of GDP) while simultaneously religious beliefs (measured by the importance of God in a person’s life) are not very high (averaging between 4 and 5 on a 1 to 10 scale). On the other hand, countries in which religious beliefs play an important role (between 7,5 and 8,5 on the same scale) in an individual’s everyday life (such as the US, Ireland, Canada, Portugal) the level of spending tends to be much lower, 5 to 10 percent on average, thus strengthening their initial hypothesis. Therefore religion could act as a substitute for an inadequate level of state funded social insurance.

Very interesting trend. The ASI article concludes with this:

Charitable donations can be tracked in the same direction; due to the fact that more people tend to privately solve the coordination problem in the demand for social insurance, there is less need for the state to step in and provide it.

 
If this is indeed true, it should act as a signal to countries such as the UK or Ireland to lower their welfare spending, since private incentives and charitable organizations are likely to take over from the government and provide services such as child day care, private schools, hospital care, retirement homes, homeless shelters, soup kitchens etc. The Salvation Army does just that, as do many other UK organizations. Perhaps it isn’t quite sure how much the private sector can ‘offload’ the government in its welfare spending, but it should be given a chance to do so, particularly in the Anglo-Saxon countries where social capital is undoubtedly very high.

Private charities are always more effective than government.

Obama Demands Taxpayers Increase Funding For Overpriced Universities

Posted on by
Reply

Trying to buy votes Barry?

“You’re the ones who need help,” the president told students gathered at the University of Michigan’s Al Glick Field House.

“A quarter of all millionaire [earners] pay lower taxes than millions of middle-class households. t… [audience boos] Is that fair? … does it make sense to you? … do we want to invest in things like… student loans and grants?”

He called on Congress to cut the interest rate on government loans to students, and said he had already limited graduates’ monthly payments on government loans to 10 percent of their after-tax income.

It seems the college aged Obama was busy honing his street agitation skills rather than hitting the ECON 101 books.

If he were truly serious about bringing college costs down, Obama would stop advocating policies (i.e. easy student loans & grants) that artificially increase demand for college. Any high school student can tell you when demand increases, prices will increase.

As pointed out previously here at MCT, if the government would stop artificially inflating demand by funneling tax payer money to colleges, prices would drop in a hurry:

One way to drive down the cost of college tuition is getting the government out of the business of student loans. Every time government becomes involved in an economic activity, it becomes more expensive. If government student loans are severely limited and Universities see fewer students attending their hallowed halls of higher learning, cost of tuition will drop in a hurry.

Of course, it’s tough to buy college student votes if politicians can’t pull the strings of student loans.

Markets don’t fail… Politicians on the other hand…

Posted on by
Reply

When you see nonsense such as this:

Democrats call for broader investigation into banks’ foreclosure processes

…….

Meanwhile, Maryland Democrat Elijah Cummings, ranking member of the House Oversight and Government Reform Committee, sent a letter to Chairman Darrell Issa (R-Calif.) asking him to bring high-ranking executives from the nation’s biggest mortgage banks to Capitol Hill testify about foreclosure abuses.

“Rather than using its substantial investigative powers to protect American consumers from the abuses of banks, the committee has focused instead on attacking the new agency created by Congress to protect these same consumers,” Cummings wrote.

Miller said the settlement won’t likely include enough relief for those who are underwater on their mortgages. He and Brown said they don’t yet know what mortgages are subject to the settlement because negotiations are ongoing.

Remember, markets don’t fail.

But markets don’t “fail.” They respond rationally, quickly and often brutally to conditions as they find them. If they see a shortage of supply or an excess of demand, they’ll drive prices higher. Conversely, excess supply or falling demand drives prices lower. If you’re looking for villains, examine why supply is constricted or inflated or why demand is stifled or encouraged. But don’t blame the markets for responding accordingly.

Politicians, on the other hand, do.

For example, the onset of the financial crisis three or four years ago was largely due in the US and the UK to excessive demand for mortgages from people who couldn’t afford them. In the US, this was driven by government mandates to Fannie Mae and Freddie Mac to do just that – pump up demand for housing. In the UK, tight restrictions on construction limited supply to a market that quite rationally came to believe home ownership was a sound substitute for more productive investment.
In both cases, the bankers’ cost of funding was distorted by deliberately low official interest-rate policies, the implicit knowledge they wouldn’t be allowed to fail and lax competition enforcement that led to the likes of Royal Bank of Scotland swallowing up competitors. The logical response by the markets was to divert money to housing, just as the politicians wanted.

How could anyone think government is going to solve this, or any other economic mess, when the government created the mess in the first place.

You can almost hear Art Laffer saying “I told you so”

Posted on by
1

After 67% tax increase, Illinois continues to be in a precarious fiscal position.

Topinka says this is extremely disappointing, since a year ago, the state sharply increased income taxes (by 67 percent) and corporate taxes.

“After the largest tax hike in our history, the state continues to be in this precarious fiscal position with persistent payment delays, and frankly, the situation is unlikely to significantly improve in the near term,” she said.

You can almost hear Art Laffer saying “I told you so.”

Obama goes to Disney and shuts down Main Street USA

Posted on by
Reply

Via Mediaite:

Disney says the president will be at the Magic Kingdom, which means guests can plan for heavy security. Main Street USA will be closed for the duration of the president’s time there. Guests will be re-routed to other parts of the park. Disney is also cancelling extra magic hours for the Magic Kingdom, and pushing back the “Celebrate a Dream Come True” parade.

Fitting.

DGPI blog has the quote of the day regarding King Obama’s Disney trip:

So his majesty goes to Disney and fittingly shuts down Main Street USA and interjects himself into the vacations of people who likely had planned their trips for months if not years.

I wonder who Obama will blame for the “poor optics” this time?

Obama rejects Keystone XL pipeline and economic growth

Posted on by
2

If anyone needed further proof Obama wants to strangle our economy to create even more dependency, his killing of the Keystone XL pipeline is it.

“The rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment,” Obama said.

“As a result, the secretary of state has recommended that the application be denied. And after reviewing the State Department’s report, I agree.”

This is complete BS.

Rather than send the oil from Canada via pipeline to us here in the states, Canada will send oil via pipeline to the Pacific, load the oil onto tankers and ship it overseas to China. How is this protecting ‘the environment?’ All this will accomplish is keeping energy prices high, unemployment high, and in turn, keep the economy depressed.

Remember what they said in Pravda:

Energy is the key stone to any and every economy, be it man power, animal power, wood or coal or nuclear. How else does one power industry that makes human life better (unless of course its making the bombs that end that human life, but that’s a different topic). Never in history, with the exception of the Japanese self imposed isolation in the 1600s, did a government actively force its people away from economic activity and industry.

Even the Soviets never created such idiocy.

And only wealthy countries can afford to worry about ‘the environment.’