Saturday, July 24, 2010

On vacation!

No posting till August 2nd.

Thursday, July 22, 2010

Leading economic indicators swoon

Evidence that the economy may be slowing. Do you think that all the new and untested regulatory hurdles, higher taxes, and ObamaCare will make matters better? Don't bet on it.

Wednesday, July 21, 2010

Housing skips a beat

So now that the $8K tax credit to buy a home ended in April, it seems that housing prices are still facing a deflationary environment. All the tax credit did was put off the inevitable to a later date. Housing inventory continues to climb and housing starts are falling again. This is clearly bad news but not surprising for those of us that advocate the Austrian economic perspective. Attempting to prop up housing prices with short-term government aggregate demand is a losing battle. My opinion is that housing has a long way to go before it hits bottom; it may take years before it all washes out and prices stabilize. The federal government has tried everything to prop up prices--tax credits, mortgage refinance programs, and even having Fannie Mae soaking up billions of underwater loans to no avail. Unfortunately, it seems that we are going to learn the hard way that artificially propping up prices solves nothing in the long run.

Tuesday, July 20, 2010

A post racial President?

Best post that I have read regarding the ouster of Tea Party Express spokesman Mark Williams from the greater Tea Party movement:

While I understand that Mark Williams is trying to make a point of how backwards the logic of the NAACP has become, the execution of that point is a complete failure. This “letter” is the kind of thing that simply strengthens the left’s argument about racism in the Tea Parties. So much of it reads like the stereotypical accusations that have been leveled at blacks for eons. Without full background behind the debate between Williams and the NAACP, it is too easy to read this letter and assume the charges are being leveled against all black people. It’s an Epic Fail in execution.

Another reason why this letter is a failure is because it doesn’t directly address the true problem with the NAACP. The NAACP’s problem is that they are using the good they did in the past like a mask. The mask is designed to look like they are defending or advancing the black race, when what they really are doing is launching racial attacks in order to defend the liberal agenda. Getting into a battle over the term “colored people” does little to remove the mask and expose the true goals of the NAACP.

It is high time we all started challenging those who play the race card for political gain. However, race is still a flashpoint for controversy and thus requires a very thoughtful and tactful approach. Sloppy ill-conceived approaches like this one can only backfire and end up doing way more harm than good.

Monday, July 19, 2010

The ObamaCare beta is happening right now in MA

So, how is RomneyCare doing these days?

The relentlessly rising cost of health insurance is prompting some small Massachusetts companies to drop coverage for their workers and encourage them to sign up for state-subsidized care instead, a trend that, some analysts say, could eventually weigh heavily on the state’s already-stressed budget.

Since April 1, the date many insurance contracts are renewed for small businesses, the owners of about 90 small companies terminated their insurance plans with Braintree-based broker Jeff Rich and indicated in a follow-up survey that they were relying on publicly-funded insurance for their employees.

In Sandwich, business consultant Bill Fields said he has been hired by small businesses to enroll about 400 workers in state-subsidized care since April, because the company owners said they could no longer afford to provide coverage. Fields said that is by far the largest number he has handled in such a short time.

“They are giving up out of frustration,’’ Fields said of the employers. “Most of them are very compassionate but they simply can’t afford health insurance any more.’’

Precisely how many small businesses have recently given up offering insurance is hard to pinpoint. The Office of Labor and Workforce Development said the most recent quarterly insurance data collected from small companies has not been compiled.

Oh, snap! It seems that companies are kicking their employees off of their insurance rolls and hoisting them on the taxpayer! What a shock! You think that this might happen with ObamaCare? Nah, come on now.

Companies are sitting on their cash

According to this report, non-financial firms have $1.6 trillion dollars in cash. My guess is that they are sitting on all this money due to all of the uncertainty that is expected when taxes rise in 2011.

Saturday, July 17, 2010

Politicians on a dragonslaying mission

Harrison Price adroitly summed up the Dodd-Frank financial reform bill yesterday. This bill is a victory for Fannie Mae cheerleaders, Chris Dodd and Barney Frank. They will sell it to the public as a great accomplishment by liberal government to make the financial sector "safe." Yet, Fannie Mae and Freddie Mac are allowed to run their treasury busting business without nary a slap on the wrist---they continue to lose billions of taxpayer dollars each quarter. Liberals are going to claim that this bill is a great achievement. That is, of course, until another collapse rears its ugly head and then they will look to blame someone or something else.

Thursday, July 15, 2010

Wednesday, July 14, 2010

It's time for another sales job!

The stimulus has not made much of a dent to private sector job creation, so Mr. Obama is on a propaganda tour to sell it to likely voters in the upcoming November elections. Isn't it interesting that a good chunk of the porkulus will get spent before mid-term elections?

Enjoy the decline!

Friday, July 9, 2010

I'm sorry, but this is still a waste...

According to this story on CNN, this one stimulus program is popular with Republicans because it puts people back to work:
There's at least one stimulus program that's creating jobs and winning praise from both sides of the political aisle.

A little-known Recovery Act initiative is expected to put more than 200,000 unemployed people back to work in 32 states and the District of Columbia. It's called the Temporary Assistance for Needy Families Emergency Fund, and it subsidizes jobs with private companies, nonprofits and government agencies.

But the $5 billion it receives runs out on Sept. 30, even though employers and state officials administering the money say there's lots more demand out there...

The "program will provide much-needed aid during this recession by enabling businesses to hire new workers, thus enhancing the economic engines of our local communities," Barbour said when the initiative launched last year.

While this program sounds promising at first, it essentially subsidizes hiring until taxpayer funds run out. Does that sound like an efficient way to run an economy? This is a perfect example of how people are fooled by short-term results while the long term ramifications are not even explored. CNN thinks this program is putting people back to work but this program is taking funds out of the private economy and having it redistributed by federal bureaucracy. How efficient is that?

Thursday, July 8, 2010

Small businesses not hiring

More evidence that the "stimulus" has done nothing for small businesses and that matters will only get worse:

A payroll services firm says employers with no more than 19 workers made fewer hires in July than in any month since October. Those companies usually drive the unemployment rate down.

For the recovery to gain steam, most economists believe small businesses need to be strong enough to hire new workers. But according to one measure, the employment picture in this sector is weakening.

Intuit Inc., which provides payroll services for small employers, says the nation's tiniest companies had fewer new hires last month than any time since October.

The data are further evidence of a trend that has had many economists worried for months and intensifies concerns that smaller firms may not be robust enough to help lead the country out of its financial slump. The slowdown in hiring is particularly troublesome, experts say, because small businesses typically hire first during a recovery. A reluctance by little companies to add positions could mean that the big firms, which typically lag behind, will add jobs even more gradually.

"It's a bad sign," said Susan Woodward, an economist who tracks small business employment for Intuit. "Small businesses hire first — and they're losing their steam."

Does anybody believe that tax hikes next year will help small businesses?

Accounting gimmicks and Social Security

Despite what Paul Krugman and Dean Baker have been telling you, the Social Security trust fund is in bad shape. Robert P. Murphy at LVMI explains.

Wednesday, July 7, 2010

Prescient words from Uncle Milton Friedman

From chapter five of Milton Friedman’s “Capitalism and Freedom” which was originally published in 1962:

Each recession, however minor, sends a shudder through politically sensitive legislators and administrators with their ever present fear that perhaps it is the harbinger of another 1929-33. They hasten to enact federal spending programs of one kind or another. Many of the programs do not in fact come into effect until after the recession has passed…The haste with which spending programs are approved is not matched by an equal haste to repeal them or to eliminate others when the recession is passed and expansion is under way. On the contrary, it is then argued that a “healthy” expansion must not be “jeopardized” by cuts in governmental expenditures. The chief harm done…is therefore not that it has failed to offset recessions, which it has, and not that it has introduced an inflationary bias into governmental policy, which it has done too, but that it has continuously fostered an expansion in the range of governmental activities at the federal level and prevented a reduction in the burden of federal taxes.

Does any of the above sound familiar? All I read from liberal blogs and Paul Krugman these days is how it would be a bad idea to stop “priming the pump,” cutting government stimulus and spending. To be sure, we can see from the above quote from Mr. Friedman, that this is not a new strategy and it most certainly is not one that has favorable long term results. Anybody want to bet that it will all turn out differently this time?

Sunday, July 4, 2010

Happy July Fourth!

Here's a little ditty by some guy named Jimi Hendrix.

Thursday, July 1, 2010

Interview with a Zombie!

This video is a riot! Thomas Woods is interviewed by a zombie regarding his latest book. Since most talking heads and talk show hosts are brainless boobs, this zombie does a swell job.