Public Finance

The Johnstown Flood

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Pennsylvania borrowed more money to build infrastructure supporting canals than any other state to take advantage of the trade opportunities of the Erie Canal. Construction started on the South Fork Dam in 1838 with scheduled completion within a year, but by the time it was finished in 1852 the railroads had made it obsolete. The state wrote it off and it eventually provided a fishing lake for Pittsburgh’s elite. When it burst in 1889, causing the Johnstown flood, the total loss in life and property was probably 100 times the initial construction cost. Pennsylvania, having long since declared bankruptcy in 1841, blamed the rich.

Most every year the Congress metaphorically dances on top of the earthen South Fork Dam looming over Johnstown with the water lapping at their feet. Their solution is always the same: Let’s throw some more dirt on top this year. We’ll drain it when we drain the swamp, after we eliminate the air pollution in Johnstown, the price paid for the industrial revolution raising American living standards in the late 1800s.

The primary issue facing America during the post WW II era was whether its consumerist economy could continue to produce rising living standards for all, the cornerstone of political legitimacy. The leader of America’s competitor Nikita Khrushchev in the Soviet Union put the issue crudely six decades ago: “we will bury you” with a savings and investment rate several multiples of yours. America’s intelligence community and economic elite were shocked by the sudden collapse of the Soviet economy – like a dam bursting – less than three decades later.

Khrushchev, like most of America’s development economists, understood the role of saving and investment but not how important the private capital markets were to the allocation of capital to its highest and best use, politically directed credit being the main cause of their collapse. In Johnstown everyone knew that the valves to lower the water level in the lake had been removed during the last amateurish reconstruction, but fixing or removing it was opposed by rich land owners. The debt ceiling has similarly proven an ineffective mechanism to control America’s flood of debt, with the central bank standing ready to buy it all to the benefit of the wealthy. American politicians, feeling unbound by constitutional constraints, are addicted to issuing debt, the birthing person’s milk of politics. The Biden Build Back Better Plan  promises to strengthen the dam, but like the amateurish repairs to the South Fork will weaken the dam’s foundation while causing water levels to rise, possibly to a critical level.

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We Need to Talk About Joe

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The fictional mass murderer  Kevin  is most often described as a psychopath and his mother Eva a sociopath in book and movie reviews, the latter defined the same as the former, but without the insanity defense, i.e., a physical brain disorder rather than a choice. President Biden isn’t suspected of any such brain disorder (although dementia has long been suspected, common for his age). But Bruce Cannon Gibney argues that Baby Boomers, those born between 1940 and 1964, are  A Generation of Sociopaths  (2017) based primarily on their over-consuming at the expense of future generations, a massive inter-generational injustice. He allows for exceptions, but not among the Baby Boom political leaders, of which Joe Biden was the first on the national scene.

Sociopaths are defined  as narcissists with additional characteristics, among which are: superficial charm, glib, manipulative, self serving, grandiose, pathological lairs, without remorse, self-centered, untrustworthy, physically aggressive, impulsive, blaming others, lacking in empathy, break promises, an ability to avoid persecution for illegal acts, and a belief they deserve to rule the world. As a result of the Obama/Biden “Good War” over half the current population of Afghanistan was born under American protection. These and thousands of those who assisted the American occupation and their families have been left behind by Joe to meet repression, and, for many, death at the hands of  his captors  and other Islamic radicals. His press conferences revealed almost all these sociopathic tendencies, leaving no doubt as to the applicability of Gibney’s diagnosis.

Like Kevin, Joe is competitive among his sociopathic political peers. For sheer narcissism it would be difficult to top former President Trump, and  the Clintons  are unlikely to ever be surpassed in the team sociopath competition. But Joe Biden,  whose first attempt  to rule the world over three decades ago was thwarted by a plagiarism scandal, seeks to exceed FDR,  the record holder  by size of Mall Monument, as a world leader not on his  foreign policy experience, but by spending his way to a risky  “fundamental transformation”  of the US economy and society. Should we  trust in Joe, or is he  the “Borax Man”  (a soap salesman)?

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Looking Back on the Biden Ten Year Plan

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(An Ode to Lionel Shriver)

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Back in 2021 President Biden reiterated that his proposals, unprecedented in scope and expense, represented an investment in the future with extraordinary returns that could only be evaluated over the longer, e.g., ten- to fifty-year time horizon. This perspective coincidentally facilitated claims it was paid for without new taxes, while postponing an evaluation of actual returns beyond his term in office, even if he should run and win a second term in 2024 at 82 years old.

Saving American Democracy

But it’s now a decade later and Biden is still in office. Well, not exactly in  office, as he had been replaced by a hologram in late 2021, addressing the American people from  his estate  in McLean Virginia, purchased for $50 million cash (before GSA improvements). Following FDR’s precedent people were told that changing leaders in the midst of a crisis, and these continued to accumulate over the decade, was dangerous.

Besides, he had run virtually unopposed in the 2024 election after all those registered Republicans within a half mile of the Capitol on January 6,th 2021 had been arrested, tried, convicted and jailed for “terrorism and crimes against the State,” after which Republican voter registration plummeted.

The expanded Supreme Court, 29 Justices to accommodate race, ethnicity, gender, etc., had finally ruled on the legal concept of “disparate impact,” concluding that everything from global warming and COVID 19 to voter identification, rent collection, college admission requirements and even law enforcement represented illegal racial discrimination. The expanded Court then called an indefinite recess during the construction of a new edifice to house it.

There was really no point in holding a faux election in 2028 in any event. The progressive campaigns to eliminate the electoral college and voter ID laws to prevent “voter suppression” had both been successful, and the ongoing COVID lockdown still allowed mail-in ballots under the rules in place in 2020, so there was no need to go through the motions. The New York Times and the Washington Post, the only remaining Party sanctioned newspapers, simply announced “the will of the people.” By now, 2031, most people have long since forgotten the promises of that Biden Ten Year Plan.

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Soviet Socialism Was a Bad Joke; Sanders/Biden Democratic Socialism is a Comical Tragedy

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The Soviet era joke “we pretend to work and they pretend to pay us” has been replaced by the Biden joke “they pay us more not to work so we don’t.” Democrats’ complete denial that the refusal to accept job openings is in any way related to their pay to stay home policies is comical. To admit such spending is not only unnecessary but counterproductive represents an existential threat to their Party’s agenda, but to ignore their denial that incentives matter will end in tragedy.

 

Democratic Socialism isn’t Socialism, It’s a Rent-Seeking Extortion Racket

Socialists promised “to each…” but repressed consumer demand with queues lasting years and often decades. Democratic socialists aren’t socialists in that they don’t promise to work or produce anything. Sopranos’ aficionados recall the high paying “no-show” and the “no-work” union jobs sitting at the construction site in lawn chairs smoking, drinking and playing cards while laughing at the actual exhausted workers. Since incentives don’t matter, democratic socialists believe they can provide higher paying jobs just like the mafia with no loss of production. And, like the   mafia’s benevolent political acts such as delivering Thanksgiving turkeys, capitalists will still deliver the goods for them.

Rent-seeking (living off the work of others, generally payback for political bribery and protection) appeared free to the young Bernie Sanders for a few weeks, until his commune threw him out. What do democratic socialists propose in place of a hundred million deaths from Stalin’s Soviet Gulag and Mao’s Great Leap Forward and the scenes of mafia beatings, sometimes fatal, to extort business? They promise to squeeze “big business” with taxes, regulation and threats to match socialist demand with capitalist supply.

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Why I Like Ike

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Why I Like Ike. The Greatest of the Greatest Generation followed by the Worst of the Worst.
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Dwight D. Eisenhower served during the Great War, lived through the Great Depression, and led the Allies to Victory in WW II. But perhaps Ike’s greatest contribution was his leadership as President of the United States, ensuring the peace and building America’s infrastructure while imposing additional sacrifices on his generation to eliminate the WWII debt burden, the failure to do so after the Great War being the primary cause of the next. His hard won legacy of freedom and democracy has been completely squandered over the last half century by fiscally irresponsible Baby Boom politicians.

The Clinton Administration cut the deficit every year, averaging only .8% of GDP, the lowest since the Eisenhower Administration, leaving the budget in what was predicted by many at the time to be a permanent surplus. But the deficit during the Obama/Biden Administration averaged 5.9% of GDP, the largest since WW II, increasing the outstanding debt accumulated over the centuries by 70% and now exceeds 100%, the level at the end of WW II. The CBO projects that under existing law, including repeal of the 2017 tax cuts in 2025, that will double again to 200% of GDP over the next generation as the $200 trillion in unfunded liabilities continue coming due. State and local governments face similar unfunded liabilities that they are prevented from borrowing to fulfill, so subsequent federal bailouts as currently demanded will add to these federal totals. This CBO forecast implies declining middle class/middle age after-tax incomes even as debt and deficits balloon.

The Biden Plan

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