Big Government

Random Links

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–Will Israel Be the Next Energy Superpower? – A balanced, thoughtful look at recent developments from Arthur Herman. There is cause for optimism.

–Wildlife photographer pleads guilty to violating Endangered Species Act – The gist of the story is that some guy was photographing “endangered” birds from less than 500 feet away, which apparently is a violation of the Endangered Species Act, and was turned in to the feds by zealous environmentalists who saw him do this. Of course he copped a plea. If he had taken his chances in court he could have ended up in jail for years. As it is he may still do time and will end up with a felony conviction and probably a big fine to make an example of him. The birds he supposedly harassed aren’t even rare, merely locally rare in Florida, and he didn’t harm any of them. At most he should have been fined a few hundred bucks and warned to stay farther away from the wildlife. But nowadays everything is a federal crime with draconian penalties, and you can’t fart in a wetland without violating some rule. And the enforcement agencies have to justify their budgets. He should have left the birds alone, but his punishment is cruelly excessive. Some of the comments in response to the article are remarkably heartless. Not just the EPA but also the Fish and Wildlife Service and the Park Service deserve substantial defunding.

–Possibly my best blog post ever.

The “Deep State.”

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UPDATED to correct the author of the essay.

This essay by Mike Lofgren on Bill Moyers’ web site, is interesting. It has the usual leftist slant of Moyers on the topic but also includes many good observations. Lofgren is also a very interesting guy. He spent 28 years as a Republican staffer. From 1995 to 2004, he was budget analyst for national security on the majority staff of the House Budget Committee. From 2005 until his retirement in 2011, Lofgren was the chief analyst for military spending on the Senate Budget Committee. The Democrats took The House in 2006 and the Senate Majority from 2001 to 2003 and then since 2007. If he was on the Budget Committee of the Senate, he must have been a staffer for the Democrat majority, as well.

he was “appalled at the headlong rush of Republicans to embrace policies that are deeply damaging to this country’s future; and contemptuous of the feckless, craven incompetence of Democrats in their half-hearted attempts to stop them.” He charged that both major American political parties are “rotten captives to corporate loot”, but that while Democrats are merely weak and out of touch, the Republican Party is “becoming more like an apocalyptic cult”. Lofgren and Moyers are both leftists but Lofgren has had an interesting odyssey.

There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington partisan politics: the tip of the iceberg that a public watching C-SPAN sees daily and which is theoretically controllable via elections. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power. [1]

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America 2.0 Looks To Be Worth Around Twenty Five Cents on the Dollar

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A while back I dissected the debt of Detroit, the classic America 2.0 case. By this, I mean a gigantic government presence, working with manufacturing and unions to push off obligations into the future with no clear plan of really what to do. In the end, of course, it all came crumbling down and yesterday we got a slight glimpse into just how bad it can get.

To review, here is the diagram I had to make after reading several sources on the subject, to help wrap my head around the calamity that was the city of Detroit’s books:

This looks crude, and it is, but it really helped me get my brain around the nightmare.

From everything I have been reading, Kevyn Orr is getting ready to propose that the general obligation and pensions get settled out at .25 on the dollar. That sounds a bit expensive to me, and as Lex Green said to me in an email certainly isn’t “fire sale” prices yet, but that is what the consensus seems to be saying.

In an odd bit of news, many private foundations have been trying to gather enough money to offset an auction of Detroit’s art collection, estimated by some to be worth up to a billion dollars. If I were Orr, that would have been the first thing I would have done is liquidate that stuff, but I am quite a bit less sensitive than I would need to be to ever consider a career being a politician.

All of this is subject to the whims of the BK judge, but if I were a retired Detroit fireman, I would certainly begin tightening the belt stat, if that wasn’t done already.

This may affect municipal investments, but honestly I imagine any fallout from it is already baked into the pie.

Is Chicago next? We shall soon see.

From a political standpoint, the Republilcans should make the Democrats own this just like they should own Zerocare ™ and the nightmare in Illinois/Chicago that is coming down the tracks. How easy can it get for a Republican? All they have to say is “look at that” and they should get easily elected in any of a number of districts in 2014.

(Disclosure – I have many different municipal investment vehicles in my portfolio).

Cross posted at LITGM.

Worthwhile Reading & Viewing

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A Valentine’s Day story from Sheila O’Malley

Some thoughts on the color green from Gerard Van der Leun

Germany’s war against homeschooling, and Obama’s complicity therein

Early industrial capitalism: myths and realities

Cashing in on connections in Washington

The crisis of the administrative state

Is Common Core encouraging a generic and simplistic approach to literature?

Why does the question “do you like horror movies?” have predictive power when it comes to how long a relationship will last?

Liberalism and the credentialist conceit

 

The Depression may be here.

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I have believed for some time that we were entering another Depression. I have previously posted about it.

The Great Depression did not really get going until the Roosevelt Administration got its anti-business agenda enacted after 1932. The 1929 crash was a single event, much like the 2008 panic. It took major errors in economic policy to make matters worse. Some were made by Hoover, who was a “progressive” but they continued under Roosevelt.

I posted that statement earlier and it got a rather vigorous rebuttal. I still believe it, however. I think a depression is coming soon. What is more, I am not the only one. Or even only one of two.

The second article preceded the election of 2012 but is still valid.

When employment hit an air pocket in December, most analysts brushed off the dreadful jobs number as an anomaly, or a function of the weather. They chose to believe Ben Bernanke rather than their lying eyes. It’s hard to ignore a second signal that the U.S. economy is dead in the water, though: on Monday the Institute for Supply Management reported the steepest drop in manufacturing orders since December 1980:

fredgraph

In January, only 51% of manufacturers reported a rise in new orders, vs. 64% in December. Not only did the U.S. economy stop hiring in December, with just 74,000 workers added to payrolls; it stopped ordering new equipment. The drop in orders is something that only has occurred during recessions (denoted by the shaded blue portions of the chart). The Commerce Department earlier reported a sharp drop in December orders for durable goods. In current dollars, durable goods orders are unchanged from a year ago, which is to say they are lower after inflation.

So, the economy stopped hiring, even at the poor pace the past five years have seen, but business also stopped buying.

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