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  • Archive for the 'Big Government' Category

    What has happened to Venezuela?

    Posted by Michael Kennedy on 21st May 2016 (All posts by )

    venzuela

    Venezuela is in the news as the country cannot even buy paper to print money.

    This all goes back to 1998 when Chavez was elected by the people.

    He was an army officer and had previously attempted to overthrow the government, a coup that failed.

    in the early 1980s. Chávez led the MBR-200 in an unsuccessful coup d’état against the Democratic Action government of President Carlos Andrés Pérez in 1992, for which he was imprisoned. Released from prison after two years, he founded a political party known as the Fifth Republic Movement and was elected president of Venezuela in 1998.

    Venezuela is an example of The Curse of Natural Resources.

    The idea that resources might be more of an economic curse than a blessing began to emerge in debates in the 1950s and 1960s about the economic problems of low and middle-income countries.[3] The term resource curse was first used by Richard Auty in 1993 to describe how countries rich in mineral resources were unable to use that wealth to boost their economies and how, counter-intuitively, these countries had lower economic growth than countries without an abundance of natural resources. An influential study by Jeffrey Sachs and Andrew Warner found a strong correlation between natural resource abundance and poor economic growth.

    Venezuela is only the latest and worst example. The history is depressingly familiar.

    Read the rest of this entry »

    Posted in Big Government, Civil Liberties, Civil Society, International Affairs, Leftism, Public Finance | 52 Comments »

    A Fine Friday Miscellany

    Posted by Sgt. Mom on 20th May 2016 (All posts by )

    Ah, the stupidities come so thick and fast of late. It’s like the rain here in Texas, which has been pouring down with such intensity over the last few days that all the usual low-water flood-danger locations have been – as any fool could easily predict – flooded and closed to vehicle traffic. It rained so hard on Thursday morning that for the first time in ages, we skipped walking the dogs. Looked out at the flooded street, the flooded front walkway, rain coming down sideways, and the sky so dark that it looked like twilight already; nope – not even the dogs were keen, especially Nemo the Terrier-God-Knows-What, who loathes and despises water with a wholly undoglike passion.

    But social and political stupidities – what a rich buffet was laid before us this week, even apart from the gross stupidity of deciding that the ostensible civil rights and good-will of what may be .03% of the general population – that miniscule transgender portion of it – supersedes the rights of women and girls in a public restroom/locker/changing room to be certain they are not being letched on by a perv who has twigged to the fact that if he only declares that he feels female on that particular day that no one will want to firmly escort his perverted ass out of said safe space. Yes, the Kennedy Administration vowed to put a man on the moon, the Obama Administration has put a man in the Ladies’ Room and damned if the pervy wretch isn’t insisting that he has a perfect right to be there. Progress, y’all. While the perv element may have witless friends in the form of various celebrities ostentatiously declaring that they won’t be performing in *insert the location here* because hate/failure-to-socially-advance/toleration-eleventy!! I am brought to wonder if their concerts were significantly less than sold-out, and this is a handy means of cancelling an event and putting a convenient cover over the economic failure of it all. And I am also reminded of the way that mobs came out to eat at Chick-fil-A, in response to an announced boycott because the gaystapo getting all (you should pardon the expression) butt-hurt over the Chick-Fil-A CEO mildly expressing personal support for traditional marriage.
    Read the rest of this entry »

    Posted in Big Government, Civil Liberties, Civil Society, Conservatism, Crime and Punishment, Current Events, Environment, Politics, Privacy, Society | 31 Comments »

    The Breakdown of the Social Contract and the Rise of Geopolitics

    Posted by Michael Hiteshew on 19th May 2016 (All posts by )

    Dr. Pippa Malmgren, founder of DRPM Group, former US Presidential Adviser and alumna of the London School of Economics, makes some very insightful connections between the breakdown of responsible economic policy in the USA and the increase of global warfare, from China and the South China Sea to Russia in the Ukraine.

    She also explains that things like inflation don’t just happen like bad weather or something, they’re choices made by policy makers as a method of defaulting on debt.

    Some quotes:

    If you people in emerging markets are experiencing knock-on effects from our (inflationary) policy, that’s your problem…It’s our dollar, and your problem! …They’re view is, I’m taking enough pain, you can’t expect me to ask my people to take even more pain by dealing with a global financial crisis and now demand has collapsed..you can’t ask me to inflict more pain. What is the end result? When central banks are trying to create inflation, a normal side effect is that hard asset prices go up…we’ve seen record all time prices for stock markets, for property, we actually seen record all time prices for things like proteins, which are particularly important in an emerging market context. Emerging market workers are spending 40%-70% of their income for food and energy, so price movements in this area matter.

    Suddenly, all these pressures, all these problems are bearing down on these few smart people sitting in the West Wing who we think can solve this. And they’re speaking in a language that is highly technical, highly mathematical, it makes it very difficult for the general public to engage in the question. They’re told, Don’t worry about quantitative easing, it’s all in your interest! And they’re going, Yeah but my Cadbury Creme Egg, I’m getting less of those, and my rent is going up, and I can’t get a job still. But there’s a mismatch between the language the public wants to speak to engage in these issues and the language in which the policy discussion is conducted. And that a gap exists in understanding, What are the consequences of the choices that being made on our behalf?

    A highly worthwhile use of an hour or so of your time.

    Posted in Big Government, Civil Society, Economics & Finance, International Affairs, War and Peace | 16 Comments »

    Texas Fracking and the Death of Big Oil

    Posted by Trent Telenko on 15th May 2016 (All posts by )

    It isn’t often you see the death of a major worldwide industry. Last week I saw the death of the “Big Oil” economic model. It just died at the hands of Texas oil frackers who have developed a new “disruptive technology” that has made obsolete all the pillars of technology underpinning large, vertically integrated oil companies. More importantly, the same is true of all the petro-states that nationalized Big Oil’s assets in the 1960s to make all the state oil companies around the world today.

    I found this out doing my day job last week as a Defense Department quality auditor visiting a mid-sized oil service company diversifying into federal contracts. The meeting was about issues with the contract they won and touched on others they have bid on. As a side bar at lunch the following points about their main business came up:

    1. Oil field spending has died. Rig count in the USA is the lowest it has been since 1940.
     
    2. One oil rig controller company these folks worked with saw a year over year drop of 72% in its business.
     
    3. Another company they supplied had their “Cap-X” budget drop from ~$400 million for 2015-2016 to little over $30 million for 2016-2017.
     
    4. One drilling company they supplied went from 120(+) new wells last year to _12_ this year.
     
    5. This supplier sold a lot of copper tubing for “frack-log” drilling. That is the drilling of holes in good oil-bearing rock without fracking rock for oil immediately — and here is the new part — to take advantage of a new long-flow fracking technique.

    While most of the points above are due to the Saudis’ oil price war on Texas frackers. An ex-Big Oil geologist I know put it this way —

    The entire reason for the price drop was because the Saudis wanted to destroy fracking in the United States in order to keep us dependent upon them in order to keep them getting a free defense. The Saudis will have to diversify and start spending money on defense before the price goes back up, or they will be in serious trouble.

    The technique in Point #5 above marks another “fracking revolution” that is of growing importance to the USA. This new fracking energy revolution will upend the world order as we know it. Political winds willing, America may well be a net hydrocarbon exporter in five to eight years.

    Explaining why that is requires some background in Texas oil fracking.

    Read the rest of this entry »

    Posted in America 3.0, Big Government, Business, Capitalism, Economics & Finance, Energy & Power Generation, Miscellaneous, National Security | 42 Comments »

    Book Review: The Myth of the Robber Barons

    Posted by Michael Hiteshew on 15th May 2016 (All posts by )

    The Myth of the Robber Barons, by Burton Folsom

    —-

    MythOfRobberBaronsCover‘Who controls the past,’ ran the Party slogan, ‘controls the future: who controls the present controls the past.’ ~George Orwell, 1984

    Controlling our view of the past – even our view of the present – is an obsession with the Progressive Left. Our understanding of history deeply influences our thinking and philosophy. Among other things, it shapes our view of both the morality and social-economic effects of free market capitalism versus socialism.

    To that end, a group of enormously successful people from the 19th century were demonized by turn of the century Progressives and have continued to be demonized as The Robber Barons by Leftist historians in primary school and college texts ever since. More subtly, through dark Orwellian references in Leftist entertainment programs and media, they have been thoroughly maligned in the popular imagination as well. Yet few people know who these people actually were and what, for better or worse, they actually did in their lives and how their works affected our lives even today. In his book, Robert Folsom sets out to take fresh look at people we would today call entrepreneurs.

     

    Read the rest of this entry »

    Posted in Academia, Big Government, Book Notes, Business, Capitalism, Education, Entrepreneurship, History, Video | 1 Comment »

    “THE 30-SECOND GUIDE TO GOVERNMENT SPENDING”

    Posted by Jonathan on 9th May 2016 (All posts by )


    View post on imgur.com

    (Via Dan Mitchell: Milton Friedman, Adam Smith, and Other People’s Money – well worth reading.)

    Posted in Big Government, Economics & Finance, Political Philosophy, Public Finance | 3 Comments »

    “Britain’s political class risks losing the authority to govern”

    Posted by Jonathan on 25th April 2016 (All posts by )

    From an astute commentary by Robert Salisbury, former Leader of the House of Lords. Almost all of the essay applies as well to the USA and other western countries.

    Our own country is caught by all this, as it was in the first half of the 19th Century and in the middle decades of the 20th. We were able to adapt to survive: in the 19th by extending the franchise and in the 20th by expanding public services and mass prosperity. As a result British governments regained the authority to govern. They did so by reforming the institutions of representative government the country already had, thereby responding to the demands of an electorate emboldened and liberated by technological change.
     
    Today, governments are once again losing the authority to govern, and for similar reasons. Another major financial crisis might lose them it completely; but a new crisis might not even be needed. Whitehall’s failure to control immigration, its puny efforts to tackle the housing question, the feebleness of our defences, the incompetence of our transport and energy policies might, whether jointly or severally, tip us over.
     
    In the past, the country has been sustained in times of crisis by a solid body of electors who felt they had an interest in the existing structures which kept them, on the whole, safe and relatively prosperous. That body’s support is no longer so solid. The IT revolution is largely responsible. The speed of communications make governments and Parliamentary procedures look flat-footed. Increasingly the public is at least as well-informed as the Whitehall departments who are telling them what to do. It is virtually impossible to keep anything secret and anyone who betrays a confidence is regarded as heroic. The more rules we have, the more the public feels they are used as a means of flouting their spirit.
     
    Worst of all, social media stimulate one issue politics and make the simple solution credible. You and I know that competent administration is boring and usually demands compromises. We also know that effective legislation needs careful preparation, much internal and external debate, a mind-numbing command of detail and a lively warning mechanism against the law of unintended consequences. The same applies to parliamentary scrutiny.
     
    Any sensible electorate would be only too pleased to delegate this necessary day-to-day grunt to a Whitehall and Westminster it trusted and, although interested and argumentative, get on with the rest of its life.
     
    Sadly, that is not where we are.

    The candidacies of Trump and Sanders are in large part responses to public concerns about the problems Salisbury describes. They are inadequate responses, likely to fail politically and on their own terms and eventually to be superseded by other responses. The pot will continue to boil at greater or lesser intensity depending on who gets elected and what follows. It seems unlikely that the underlying problems will begin to be solved unless the voters develop a realistic understanding of what needs to be done, and start electing politicians who are both willing and competent to do it. It may be a while.

    Posted in Anglosphere, Big Government, Britain, Elections, Europe, Politics, Predictions, Quotations, Systems Analysis, Tea Party, Trump | 24 Comments »

    Why Importing Foreign Doctors May Not Solve the Shortage.

    Posted by Michael Kennedy on 17th April 2016 (All posts by )

    MoS2 Template Master

    The coming doctor shortage that I have previously written about might be dealt with as Canada did with theirs some years ago, by importing foreign medical graduates. Britain has adopted a similar plan as thousands of younger doctors plan to leave Britain.

    How is the plan to import foreign doctors working out ?

    Not very well.

    Nearly three-quarters of doctors struck off the medical register in Britain are foreign, according to shocking figures uncovered in a Mail on Sunday investigation.
    Medics who trained overseas have been banned from practising for a series of shocking blunders and misdemeanours.
    Cases include an Indian GP who ran an immigration scam from his surgery, a Ghanaian neurosurgeon who pretended he had removed a patient’s brain tumour, and a Malaysian doctor who used 007-style watches to secretly film intimate examinations with his female patients.

    First of all, foreign medical schools are often limited in real experience and students often graduate with nothing beyond classroom lectures.

    Read the rest of this entry »

    Posted in Big Government, Education, Health Care, Immigration, Medicine | 15 Comments »

    The Federal Takeover of State Debt is About to Begin…

    Posted by Carl from Chicago on 17th April 2016 (All posts by )

    Often people focus on the “loud” items and miss the subtle, important events that really change the world. On the positive side, the 401(k) plan has that obscure name because a financial expert basically “invented” it out of a line in the tax code which enabled tax-deferred savings. And Jack Bogle of Vanguard did the same thing with “passive” investing, which reduced fees and for practical purposes has taken over the investing world (along with ETFs).

    One very subtle item that is about to occur is the nationalization of state debt (and likely debts of individual cities) by the federal government. At the highest level, states and cities have made promises (mainly pensions) to their employees that are un-payable without raising taxes to extortionate rates. Detroit cracked first but since it was a city and there was some state framework they were able to use bankruptcy, but many more are to follow, including Puerto Rico (right now) and soon thereafter likely the City of Chicago or its teachers’ pensions as well as the state of Illinois.

    A very similar event occurred in Europe when the ECB basically put the debts of Greece and Portugal onto the backs of taxpayers in Germany and Holland. The ECB had a moment (several moments, actually) when they could have fundamentally changed how Greece ran their economy, shutting down statist laws and heavy governmental interference in the economy to open up competition and growth, but they blinked and instead just “wired them money in exchange for promises”. The Greeks, of course, haven’t kept their promises, and why should they, given that the ECB continually blinks when the showdown occurs.

    The reason that these states and territories like Puerto Rico are in dire straits is because they

    1. Spend more money than they make every year,
    2. Rely on borrowing to pay for operating expenses,
    3. Have giant, unfunded liabilities on top of this that can never be repaid (pensions, medical bills, etc…).

    This situation is enabled by a governing class that views funds as an opportunity to redistribute wealth to favored constituents and relies on “fairness” as a bedrock of their planning. The apex of this sort of planning can be seen in crony capitalist states like Brazil, where large enterprises like the National Oil Company (partially on the stock market, partially owned by the state) are used to fund politicians and social programs and are systematically diverted away from their core mission (to make money) until the enterprises are bled almost totally dry. Then, ironically, the state has to bail out the very companies that were supposed to provide for the socialistic wealth in the first place.

    The CORE issue is – if you give these sorts of entities money (bailout) without a “root and branch” cleaning of the issues – you will just get more of the same, indefinitely, as their individually painful debts become part of the larger national (or pan-European) debt, which continues the little game of overspending and wasting money on favored political groups for a little longer (maybe a couple years, maybe longer).

    The slippery slope – the trigger – is occurring right now in Puerto Rico. That entire economy is corrupt and ridden with subsidies from electricity to taxes to everything else. For Puerto Rico to thrive, it would need to break down barriers to private enterprise, reduce taxes, levies and bureaucracy, and find some way to bring logical industry into their jurisdiction. However, the more likely course is as follows:

    1. Point out the current individuals suffering from a lack of funding (the poor, kids in school, the elderly),
    2. Note that the debt which was once owned by individuals was bought up by hedge funds for a fraction of its original value – these funds are in a position to fight (legally and politically) for repayment and although they may be termed “vultures” or something else, they really are the last man standing for individuals who lack the means to fight legally for their rights,
    3. Use the political system to “promise” reforms that will never be carried out (because why would you if you can use funds to enable the current system to thrive),
    4. Talk about the retirees, and “promises” made to them over the years that cannot be paid, and how they can’t go back to the work force and earn more money so that they have to be made whole,
    5. Use political or class warfare to point out the groups that run Washington don’t look like the groups that are broke and make it a fairness issue or tied to some century plus grievance.

    It is very likely that these tactics will “work” and that the debts of Puerto Rico will be backstopped by the US government. While this technically isn’t a “bailout”, it absolutely is, because Puerto Rico can’t borrow one dollar on their own anymore (who would lend money to someone who says they won’t pay you back?), and we know that without major reform (which won’t happen) Puerto Rico will just continue to bleed money indefinitely (and fall back on fairness arguments and the above listed tactics to ensure that this keeps happening).

    Then soon after this subtle bailout (and likely before Puerto Rico fails AGAIN, which will happen again as it will with Detroit), entities of Illinois or the state itself will drive straight through this loophole and federalize their debt, too. The state and entities will make lavish promises about change that will never occur, because this is the lifeblood of the Democratic Party (patronage workers and the public sector) and all of the clout / featherbedding / etc… will continue on indefinitely, without any of the sorts of laws that enable competition.

    Watch the headlines… see this occur… it will be seismic in its long-term nature, because it will fundamentally change the nature of the US government, since the debts of the states and cities will become everyone’s debt and we don’t have any “real” tools to govern their behavior or fix the long-term promises that destroy competitiveness and economic growth.

    This is the real story, it is happening under our noses, and instead of paying attention we are following these idiotic presidential campaigns of pure vapor.

    Cross posted at LITGM

    Posted in Big Government, Chicagoania, Economics & Finance, Illinois Politics | 13 Comments »

    Paying Higher Taxes Can be Very Profitable (rerun)

    Posted by David Foster on 15th April 2016 (All posts by )

    (originally published in 2010 and now an April perennial)

    Chevy Chase, MD, is an affluent suburb of Washington DC. Median household income is over $200K, and a significant percentage of households have incomes that are much, much higher. Stores located in Chevy Chase include Tiffany & Co, Ralph Lauren, Christian Dior, Versace, Jimmy Choo, Nieman Marcus, Saks Fifth Avenue, and Saks-Jandel.

    PowerLine observed that during the 2008 election season, yards in Chevy Chase were thick with Obama signs–and wondered (in 2009) how these people were now feeling about the prospect of sharp tax increases for people in their income brackets.

    The PowerLine guys are very astute, but I think they missed a key point on this one. There are substantial groups of people who stand to benefit financially from the policies of the Obama and company, and these benefits can greatly outweigh the costs of any additional taxes that these policies require them to pay. Many of the residents of Chevy Chase–a very high percentage of whom get their income directly or indirectly from government activities–fall into this category.
    Read the rest of this entry »

    Posted in Big Government, Economics & Finance, Leftism, Taxes, USA | 3 Comments »

    Government, the things we do together.

    Posted by Michael Kennedy on 6th April 2016 (All posts by )

    cal

    Barack Obama is fond of describing government this way.

    As President Obama said the other day, those who start businesses succeed because of their individual initiative – their drive, hard work, and creativity. But there are critical actions we must take to support businesses and encourage new ones – that means we need the best infrastructure, a good education system, and affordable, domestic sources of clean energy. Those are investments we make not as individuals, but as Americans, and our nation benefits from them.

    That was a reaction to Romney’s criticism of his silly comment.

    I prefer the quote attributed to Washington.

    “Government is not reason, it is not eloquence,—it is force! Like fire, it is a dangerous servant, and a fearful master; never for a moment should it be left to irresponsible action.”

    Now, we see a new imposition.

    The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.

    Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

    Read the rest of this entry »

    Posted in Big Government, Capitalism, Economics & Finance, Public Finance | 7 Comments »

    Revisiting “Belgium — The Failed State in the Heart of Europe”

    Posted by Trent Telenko on 4th April 2016 (All posts by )

    Jim Hoft over at Gateway Pundit has a guest post by Drieu Godefridi that is essentially a follow up to my March 24th, 2016 “Belgium — The Failed State in the Heart of Europe” piece.

    It is unsurprisingly titled “Guest Post: More Terrorist Attacks Likely in Failed State of Belgium.”

    Please go give Jim Hoft’s site some “linkie love” while checking out the full post, but before you go, this portion of that post bears immediate and close reading —

    It is thus obvious that the Belgian government is in a shambolic state at every level, from the local to the federal, and from the executive branch to the judiciary.
     
    Of course none of this would have been possible without the policy, in place now for 30 years, to open Belgian citizenship — and the borders — to hundreds of thousands of people from around the world. This open invitation has been extended mainly to Muslim countries, instigating the creation, ex nihilo, of huge Muslim communities in the cities of Brussels, Antwerp and every other Belgian city. Radicalized or not, fundamentalist of not, peaceful or not, these communities tend, in Belgium as anywhere else, to impose their political-religious credo.
     
    A study by the WZB Social Science Center (Berlin), published last year in the “Journal of Ethnic and Migration Studies”, indicates that half the Muslims in Belgium, France and Austria are fundamentalists, i.e. they think that Muslims should return to the roots of their faith; that there is only one interpretation of the Koran; and that Muslim law should supercede civil (or common) law, (“Religious Fundamentalism and Hostility against Out-groups. A Comparison of Muslims and Christians in Western Europe”, Journal of Ethnic and Migration Studies, Vol. 41, N°1, 33-57). This Weltanschauung (or concept of the world) is irreconcilable with the rudiments of our Western civilization, or for that matter any society which is not strictly Islamic. To assert that Islam—which is much more than simply a religion—has nothing to do with the current spate of terrorist attacks in Europe is a psychotic denial of reality.

    Denial of reality is at the heart of the “European Union” project, which has Brussels as its capital.

    That is why the “Belgium — The Failed State at the Heart of Europe” meme is spreading. It is obvious to all this will not end well…but end it will.

    And its passing will be marked with fire and blood.

    Posted in Big Government, Civil Society, Culture, Current Events, Europe, Miscellaneous, National Security, Politics, Terrorism | 24 Comments »

    The Doctor Shortage revisited.

    Posted by Michael Kennedy on 1st April 2016 (All posts by )

    33 - Lister

    I have previously written posts about a coming doctor shortage.

    They assume that primary care will be delivered by nurse practitioners and physician assistants. They are probably correct as we see with the new Wal Mart primary care clinics.

    The company has opened five primary care locations in South Carolina and Texas, and plans to open a sixth clinic in Palestine, Tex., on Friday and another six by the end of the year. The clinics, it says, can offer a broader range of services, like chronic disease management, than the 100 or so acute care clinics leased by hospital operators at Walmarts across the country. Unlike CVS or Walgreens, which also offer some similar services, or Costco, which offers eye care, Walmart is marketing itself as a primary medical provider.

    This is all well and good. What happens when a patient comes in with a serious condition ?

    The health policy “experts” have been concerned to train “lesser licensed practitioners” and have pretty much ignored primary care MDs except to burden them with clumsy electronic medical record systems that take up time and make life miserable.

    I repeatedly ask medical students if they would choose a career in primary care if it would completely erase their student loan debt. A few hands go up, but not many. In fact, for a while now, the federal government has dedicated millions of dollars to repaying loans for students who choose primary care. Yet residency match numbers show that the percentage of students choosing primary care is not increasing. Though loan forgiveness is a step in the right direction, medical students realize that by choosing a more lucrative specialty, they can pay off their loans just fine.

    I proposed years ago, a health reform that resembled that of France where medical school is free. It could be arranged that service in primary care, low income clinics would give credit against student loans. Nothing happened. Except physician income has declined. And tuition has increased.

    Read the rest of this entry »

    Posted in Big Government, Education, Entrepreneurship, Health Care, Medicine | 19 Comments »

    Unions and Robots.

    Posted by Michael Kennedy on 30th March 2016 (All posts by )

    port

    California has now decided to impose a a $15 per hour minimum wage on its remaining business economy.

    Denial of consequences is an important part of left wing philosophy.

    “California’s proposal would be the highest minimum wage we have seen in the United States, and because of California’s sheer size, it would cover the largest number of workers,” said Ken Jacobs, chairman of the UC Berkeley center. “This is a very big deal for low-wage workers in California, for their families and for their children.”

    Implicit in all the assumptions is the belief that employers will not adjust by reducing the number of minimum wage employees they have.

    The UC Berkeley estimate also includes some who earn slightly more than the lowest wage and stand to benefit from a ripple effect as businesses dole out raises to try to maintain a pay scale based on experience, Jacobs said.

    If Brown’s plan passes, 5.6 million low-wage workers would earn $20 billion more in wages by 2023, according to the UC Berkeley analysis. It assumed no net jobs would be lost as businesses look to trim costs.

    The experience in other places has not been positive.

    Even a former chairman of President Obama’s Council of Economic Advisers, Alan Krueger, has cautioned recently that “a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”

    Read the rest of this entry »

    Posted in Big Government, Business, Economics & Finance, Politics | 27 Comments »

    Foreign Gov’ts Asking Washington DC Lobbyists about Donald Trump…

    Posted by Trent Telenko on 30th March 2016 (All posts by )

    …what could go wrong?

    That sounds like the plot line from a Broadway musical comedy, yet it’s happening. See this this text clipped from THE HILL column “Trump angst pours in from overseas” about the details.

    Lobbyists in Washington say they are being flooded with questions and concerns from foreign governments about the rise of Donald Trump
     
    Officials around the globe are closely following the U.S. presidential race, to the point where some have asked their American lobbyists to explain, in great detail, what a contested GOP convention would look like.
     
    The questions about Trump are “almost all-consuming,” said Richard Mintz, the managing director of Washington-based firm The Harbour Group, whose client list includes the governments of Georgia and the United Arab Emirates.
     
    After a recent trip to London, Abu Dhabi and Beijing, “it’s fair to say that all anyone wants to talk about is the U.S. presidential election,” Mintz added. “People are confused and perplexed.”
     
    The Hill conducted interviews with more than a half-dozen lobbyists, many of whom said they are grappling with how to explain Trump and his unusual foreign policy views to clients who have a lot riding on their relationship with the United States.

    The comic possibilities in those sorts of miscommunications are better than THE PRODUCERS improbably successful money scam play “Springtime for Hitler.”

    Posted in America 3.0, Anglosphere, Big Government, Civil Society, Humor, Politics | 7 Comments »

    Who’s More Fascist: Presidential Candidate Donald Trump or Former Federal Reserve Chairman Ben Bernanke?

    Posted by Kevin Villani on 19th March 2016 (All posts by )

    How Economists Facilitated the Transition of Erstwhile “Market” Economies to Fascism

    The Left calls Donald Trump a fascist invoking the memory of Hitler and Mussolini, to which Trump might reply: “they were losers; I’m no loser.” Fascism is in essence the political control of the private economy, historically justified by democratically elected leaders to defend against perceived or orchestrated external threats. Progressive war politicians from Presidents Wilson and FDR to Johnson and Obama and now candidate Clinton have pursued this same goal in the US as has the social democratic European Union.

    At the recent meeting of the G20 leaders and central bankers political responsibility for and control over their respective economies was assumed, but their Alfred E. Newman “what, me worry” smiling faces belie the fragility of the current global economy. The political distortions to both the financial and real economy have arguably never been greater, to which politicians and their economist enablers prescribe more of the same mostly wasteful public spending financed by money printing, a cure reminiscent of medieval bloodletting.

    Having never been of much use to business, economists mostly followed “Say’s Law” that supply creates its own demand (for academic economists). They got their first pervasive shot at political power when President Wilson – an academic who chafed at constitutional constraints – created the Federal Reserve which helped US bankers fund the Allies until he could mobilize a war economy, making the first WW “Great.” The unprecedented death and destruction of the Great War knocked the global economy off kilter and the massive international war debts made stabilization politically difficult. As the creditor and least damaged victor, the US economy boomed in the roaring ’20s, followed by a bust.

    Purveyors of the “dismal science” had previously counseled that politicians had to own up to the cost of war until the private economy recovered. While the “arts” of manipulating the value of currency and public spending financed by coercive taxes and often uncollectable debt as well as coercive regulation were as old as politics and war itself, post WW I economists became noticeably less “dismal” and purportedly more “scientific,” believing that such “macroeconomic” interventions could be calibrated to “tame business cycles” in part by transferring or defaulting on war debts. This was complemented by “microeconomic science,” the recent objective of which has been to prove that individuals aren’t always perfectly rational (and by inference in need of paternalistic political protection and direction). Macroeconomists contend that this psychological defect is contagious, conjuring irrational mobs running on banks (or attending Trump rallies).

    Read the rest of this entry »

    Posted in Big Government, Crony Capitalism, Economics & Finance, Public Finance, Trump | 5 Comments »

    Quote of the Day

    Posted by Jonathan on 18th March 2016 (All posts by )

    Glenn Reynolds:

    The Tea Party movement — which you also failed to understand, and thus mostly despised — was a bourgeois, well-mannered effort (remember how Tea Party protests left the Mall cleaner than before they arrived?) to fix America. It was treated with contempt, smeared as racist, and blocked by a bipartisan coalition of business-as-usual elites. So now you have Trump, who’s not so well-mannered, and his followers, who are not so well-mannered, and you don’t like it.

    Posted in Big Government, Deep Thoughts, Obama, Politics, Quotations, Tea Party, Trump | 32 Comments »

    Quote of the Day 2

    Posted by Jonathan on 17th March 2016 (All posts by )

    Nassim Nicholas Taleb on Facebook:

    What we are seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking “clerks” and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think… and 5) who to vote for.
     
    With psychology papers replicating less than 40%, dietary advice reversing after 30y of fatphobia, macroeconomic analysis working worse than astrology, microeconomic papers wrong 40% of the time, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating only 1/5th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers with a better track record than these policymaking goons.
     
    Indeed one can see that these academico-bureaucrats wanting to run our lives aren’t even rigorous, whether in medical statistics or policymaking. I have shown that most of what Cass-Sunstein-Richard Thaler types call “rational” or “irrational” comes from misunderstanding of probability theory.

    (Via Richard Fernandez.)

    Posted in Big Government, Crony Capitalism, Current Events, Deep Thoughts, Elections, Human Behavior, Politics, Society, Statistics, Tea Party | 5 Comments »

    More on where Trump came from.

    Posted by Michael Kennedy on 7th March 2016 (All posts by )

    There is increasing panic among the GOPe about the possibility that Trump could win the nomination. The “Anyone But Trump” fixation is obsessing the usual suspects.

    Megan McArdle: As I see it, there are basically three strategies you can follow:

    Anyone but Trump: It doesn’t matter, as long as you vote against Trump. Democrats in open primary states can play, too.
    Vote the leader: Pick the winner in your state, and force the nomination selection to the convention.
    Attempt to generate an actual alternative front-runner by voting for the national poll leader, or the most plausible candidate — probably Marco Rubio, given that he seems to have the most support from the highest number of GOP coalitions, but possibly Ted Cruz, since he appears to be the next most appealing to Trump voters.
    I’ll just start by asking: Which of these would someone follow if their main priority is to defeat Trump? Or am I thinking about it all wrong?

    Sean Trende: No, I think you have it basically right. I actually think that, for now, their best chance lies behind Door No. 2.

    Why are the elites so obsessed with keeping Trump away from the levers of power ? This is not limited to the USA. Germany is having its own voter revolt.

    The anti-immigrant AFD – Alternative for Germany – party has scored massive gains in municipal weekend elections which reflect growing public anger at the refugee policies of Chancellor Angela Merkel.
    The polls for councils in the state of Hesse saw the AFD make significant inroads on the two main established parties – Merkel’s conservative CDU and the centre-left SPD – to come in third with 13.2 percent of the vote, knocking the environmental Greens into fourth place.
    Frankfurt CDU politician Markus Frank said: ‘The preliminary result of the AfD is frightening. I had expected a maximum five percent.’

    Where does this voter anger come from ?

    Maybe it is one manifestation of the Principle Agent Problem.

    Read the rest of this entry »

    Posted in Big Government, Civil Society, Culture, Current Events, Elections, Europe, Immigration, Trump | 70 Comments »

    The Romney Speech

    Posted by Michael Kennedy on 3rd March 2016 (All posts by )

    romney

    I did not watch Romney’s speech attacking Trump but have seen short excerpts and comments about it. I think it was a catastrophic mistake by Romney and has ended any future he might have in the GOP. Had he stayed neutral, with perhaps some comments about what is important in a Republican president, his role might be intact. But nobody, especially Mitt, can out insult Trump. It was a foolish lapse of judgement.

    I read a blog every day written by a retired Foreign Service Officer, who calls it Diplomad 2.0, and it has commenters from other diplomatic services. His reaction to Romney’s speech is interesting.

    I like Romney. I think him a decent man, and one who would have been a very good president. Our country and the West would be in much better shape today if Romney had won in 2012. I had a very minor role on Romney’s foreign policy team and did my best from my lowly position to get the campaign to sharpen its message on foreign affairs, especially on Benghazi–to no avail.

    What follows is revealing in the explanation for Romney’s failure as a candidate.

    His campaign was dominated by “the oh-so-clever-ones” who think things to death, and analyze until they paralyze. The papers we sent up to Romney were wordy “on the one hand, but on the other hand” expositions of little to no use in a campaign. They read like something written for a transition team, not a campaign team. It was impossible to get Romney’s main handlers to recommend that he go after Obama and Clinton hard on Benghazi and the rest of the misadministration’s foreign policy disasters. They thought that was “too politicizing” and “unbecoming.” Well, what happened, happened.

    Romney now comes out and attacks the probably GOP nominee in terms he would never have used on Obama and probably Hillary.

    The result ?

    The punchline. I had been sitting uncomfortably on the fence re the GOP candidates. After listening to the Romney speech and the other “establishment” types, and hearing the anchor pundits, the pundit anchors, and all the other assorted wise ones, I have jumped off the fence. I have landed in Trump’s farm. He is not perfect, far from it. I might even change my mind, but for now I support Trump.

    I don’t know if Trump will be terrible; I do know that what we have right now is horrible beyond words. I can’t bear the thought of a Hillary presidency.

    I kind of feel the same way. Trump’s weakest point is foreign policy and here is a guy with years of experience all over the world, who thinks he is better than Hillary and might be OK.

    Posted in Big Government, Conservatism, Elections, Trump | 47 Comments »

    Macroeconomic Fallacies, Fed Chairman Bernanke’s Delusions and the Rise of Donald Trump

    Posted by Kevin Villani on 2nd March 2016 (All posts by )

    The G20 leaders recently called upon the leaders of the developed nations to employ more massive amounts of debt financed government spending to ward off the current economic stagnation and in some instances the early stages of recession. That fits Einstein’s definition of insanity: “doing the same thing over and over again but expecting a different result”. The pursuit of so-called “macroeconomic (fiscal and monetary) policies” has produced a quarter century of economic stagnation in Japan, a $30 trillion debt bubble in China with little to show, and stagnation and looming recession in Europe and increasingly in the US.

    Einstein was a genius who remains relevant today. Just within the last few weeks evidence was reported of gravitational waves predicted by Einstein almost a century ago. Proving Einstein’s theories has been the focus of physics during the past century, but he maintained that had he been able to get an academic appointment instead of a position at the Swiss patent office he never would have been able to develop and publish his new path-breaking theories.

    In his recently released biography The Courage to Act (2015), former Federal Reserve Chairman Ben Bernanke describes how, initially failing physics, he turned to macroeconomics as an outlet for his mathematical skills. This was auspicious. In physics, when your equations don’t fit the reality it is the equations that must be changed unless there is new evidence to change the understanding of reality. Einstein’s biggest error was rather than waiting for better data when his equations predicted an expanding universe, he fudged the equation (introducing the Max Planck constant) to fit the current understanding of a stagnant universe, then disagreed for most of his lifetime with the next generation of quantum physicists who proved he had gotten it right in the first place. Einstein’s one mistake is the modus operandi of modern macroeconomists.

    Read the rest of this entry »

    Posted in Big Government, Crony Capitalism, Economics & Finance, Elections, Politics, Systems Analysis, Tea Party, Trump, USA | 29 Comments »

    The Transformation of Economics.

    Posted by Michael Kennedy on 1st March 2016 (All posts by )

    A great piece in the Wall Street Journal today about what has happened to Economics and Economics education.

    I took an Economics class in college in 1957 and it changed me to a Republican. My first vote was for Richard Nixon in 1960. My family was furious as they thought we were related to the Boston Kennedys and they had always been Democrats. I wonder if an Economics class would have that effect today?

    And that political economy and my assessment of it has changed over a career spanning more than half a century. Here are five developments I would emphasize:

    I agree with his appraisal.

    1. Diminishing returns to research. A core economic principle is the Law of Diminishing Returns. If you add more resources, such as labor, to fixed quantities of another resource, such as land, output eventually rises by smaller and smaller amounts. That applies—with a vengeance—to academic research. Teaching loads have fallen dramatically (although the Education Department, which probably can tell you how many Hispanic female anthropologists there are teaching in Arkansas, does not publish regular teaching-load statistics), ostensibly to allow more research. But the 50th paper on a topic seldom adds as much understanding as the first or second.

    This has been characteristic of Medicine, as well as other academic subjects.

    Emory University’s Mark Bauerlein once showed that scholarly papers on Shakespeare averaged about 1,000 a year—three a day. Who reads them? How much does a typical paper add at the margin to the insights that Shakespeare gave us 400 years ago?

    That isn’t all he has shown.

    The attitude touches the President’s favorite pastime. Tevi Troy reported in Commentary how much Obama enjoys television, particularly SportsCenter and the middlebrow series Homeland and Mad Men. The New York Times added Breaking Bad and The Wire in its article “Obama’s TV Picks: Anything Edgy, with Hints of Reality,” and while it warned of the foolishness of “psychoanalyzing” a president based on “the books he reads or the music he listens to or the television shows he watches,” the story mentions not a single book. One would expect Marxists, feminists, queer theorists, post-colonialists, anti-imperialists, and media theorists to chide Obama for his bourgeois, masculinist taste, but as far as I know they have remained silent.

    Obama’s taste runs more to sports and rap music.

    Read the rest of this entry »

    Posted in Academia, Big Government, Civil Society, Economics & Finance, Education, Leftism, Politics | 17 Comments »

    The Big Middle Finger

    Posted by Sgt. Mom on 27th February 2016 (All posts by )

    Honestly, that is the only way that I can account for the out-of-completely-left field popularity of Donald Trump. He is not a notorious small-government libertarian like the Koch brothers, or has any previous political interests of any stripe to recommend him particularly; not even any detectable small-government, free-market and strict Constitutionalist Tea Party sympathies to recommend him.  If anything, he has always appeared to me as one of those big, vulgar crony-capitalist, unserious reality-TV personalities; the epitome of vulgar architectural bad taste and in blithely using his money and influence to cheerfully run over anyone who got in his way. His campaign at first seemed to be a particularly tasteless joke – a grab for publicity on the part of a flamboyant personality who never seemed to get enough of it, in a bad or a good way. So – all props for having the sheer brass neck to start playing the game, and playing it with calculated skill. Read the rest of this entry »

    Posted in Big Government, Civil Society, Conservatism, Current Events, Society, Tea Party, USA | 38 Comments »

    Negative Interest Rates! What A Great Idea!

    Posted by Jonathan on 23rd February 2016 (All posts by )

    Japanese Seeking a Place to Stash Cash Start Snapping Up Safes (WSJ, subscription required):

    TOKYO—Look no further than Japan’s hardware stores for a worrying new sign that consumers are hoarding cash—the opposite of what the Bank of Japan had hoped when it recently introduced negative interest rates.
     
    Signs are emerging of higher demand for safes—a place where the interest rate on cash is always zero, no matter what the central bank does. Cash languishing in safes could thwart the Bank of Japan’s move to get money circulating more vigorously in the economy.
     
    Shimachu Co., which operates a chain of stores selling hardware and home products, said Monday that sales of safes in the week that ended Sunday were 2½ times higher than in the same period a year earlier.

    Of course the Fed would never be so foolish as to institute a negative-rates policy in the hope of getting investors to prop up weakening securities markets. Right?

    (Via T. Greer on Twitter)

    Posted in Big Government, Economics & Finance | 12 Comments »

    “Breaking the iPhone: Once again, conservative establishment is urgently, insistently wrong”

    Posted by Jonathan on 20th February 2016 (All posts by )

    J. E. Dyer:

    But I don’t have any confidence that the Fox panel would have been smarter if its members understood the issue better. The real problem was that they didn’t come down in principle on the side of privacy. They could have at least expressed regret, or been reluctant about siding with the FBI.
     
    But they were slavering urgently for whatever measure the FBI demanded to get into Syed Farook’s iPhone – as if all our lives depended on giving law enforcement any privacy-busting capability it sees a need for.
     
    Technology doesn’t change the fact that this perspective is the opposite of the perspective of the Fourth Amendment. If our highest priority should be opening the people’s lives up to law enforcement, in case there are terror links lurking in our coupon drawers, then we should throw the Fourth Amendment out and require the people to all give the police keys to our homes, so it will be less of a hassle for them to get in whenever they declare a need to.
     
    Conservatives are supposed to be smarter than this. Let’s walk through it briefly to clarify why there is no need to bust the built-in security feature of the iPhone for the FBI’s general convenience.

    Worth reading in full.

    Posted in Big Government, Law, Law Enforcement, Tech, Terrorism | 14 Comments »