Archive for September, 2010

Deflation While Commodities Prices Rise?

September 28, 2010 Leave a comment

My Dad was a small businessman, entrepreneur and incredible salesman. He always told me that a thing is only worth what you can sell it for. Looking back, that was a pretty brilliant insight. Just because you purchase a thing for a certain price, or a price guide says it is worth X dollars, doesn't mean a thing. Likewise, just because something is of little to no value on its face doesn't mean you cannot sell it for a huge profit.

Similarly, the seeming contradiction between rising commodities prices and deflation is not as contradictory or mysterious as it may seem. The raw materials needed to manufacture a product may be increasing. However, that doesn't mean that in an economically distressed environment of high unemployment, relatively stagnant wages, and low demand you can receive a higher price for the finished product.

Mish Shedlock, in his Global Economic Trends Analysis Blog, explains it quite nicely:

 I keep getting told that there MUST be a pass through of rising commodity prices. I disagree. The cost to produce something is irrelevant as to the price it will fetch. The latter is purely a supply/demand issue.

You can read the full article from Mish entitled Zero Hour for a more in-depth perspective. 
Categories: Uncategorized

Hey GOP: Uncertainty Not the Problem

September 27, 2010 1 comment

Not all politicians are pinheads, but just about all of them are. Representatives John Boehner and Kevin McCarthy appeared on Fox News Sunday with Chris Wallace and relentlessly pushed the meme of uncertainty. I’m not sure what planet they live on, but here on Earth, let me assure them, uncertainty is not the greatest problem facing the United States of America.

Here are a few problems they might want to check into first:

  • Credit / Debt Crisis: Across the board – personal, local, state, and national – society has accumulated too much debt. This has resulted in people being forced to save more and pay down their debts. This has also led to a contraction in credit extended, as well as a reduction in demand for credit as businesses don’t have sufficient customers to risk taking on additional loan debt.
  • Debt-Based Economy: Under our fractional reserve banking system, no money is created unless a corresponding debt is created. This system has lead to the steady devaluation of our currency, the transfer of vast sums of wealth to the wealthiest in society, and the slow destruction of the middle class.
  • Unaccountable Government: Our government is essentially unaccountable to the people. Sure, we hold regular elections, but this changes very little. Our politicians are richly rewarded for crafting legislation that benefits their patrons while, generally, harming the people. The whole process generally is opaque and not subject to public review or scrutiny. People have lost nearly all faith that government serves them in any way.
  • Widespread Financial Fraud: The American people know that banks of other powerful financial interests have and continue to commit fraud on a widespread basis. Banks play extend and pretend with junk financial instruments, lie about the value of the assets on their books, fraudulently foreclose on houses for which they do not legally own, and more. 
  • No Regard for Rule of Law: The powerful regularly circumvent the rule of law. What President Obama did when the government took over General Motors, handing money and benefits to union cronies, while negating the rights of bondholders was theft, plain and simple. Where are the convictions for all the fraudulent liar loans issued to people who purchased homes, but never had to prove they had the ability to make payments? The list goes on and on.
  • The Deficit: The U.S. doesn’t have the money to meet its current or future obligations. We may be able to get away with this for a few more years, but eventually there will be a sovereign debt crisis. Unlike Japan, we have been a debtor nation for some time and our savings rate was low relative to there savings rate. So, unfortunately, our crisis could occur much more suddenly than the Japanese crisis did.
That’s not nearly a complete list, but just a few things off the top of my head. Americans aren’t so much uncertain, as certain. We’re certain that our government has no intention of dealing with any of the real problems that face us. We are certain that our government is corrupt, incompetent or both. We are certain that government needs to be vastly reduced in size and scope, far beyond what Republicans have proposed in their Pledge or YouCut. We’re certain that we’re not so stupid that repeating the word uncertainty over and over and over again is going to blind us to the fact that unless we deal with the above, the decline of our nation will be certain. Perhaps the only uncertain thing is whether justice still reigns, and if it does, how swiftly it will come to those that brought our nation to the brink.
Categories: Uncategorized

Originalist Sin

September 26, 2010 Leave a comment

Every once in a great while an article will say, as the great political philosophers C&C Music Factory once sang, “Things That Make You Go Hmmmm…“Sam Adams to America: “I told you so”, is such an article.

Much of the Conservative conventional wisdom heard today is that Progressive “reforms” have moved our nation away from the original intent of the Founding Fathers as set forth in the Constitution. While there is truth to that, the author, Joel McDurmon, goes back further. However, he goes back not to the Civil War, and Lincoln, as some have, but to the Constitutional Convention itself, which he calls “…the first great advance of tyranny…”

While, on its face, this seems shocking, the Constitution replaced the loose confederation of states under the Articles of Confederation with the Constitution. Sam Adams, and other liberty-minded patriots, feared the loss of state sovereignty to a consolidated (national) government.

One of the elements of the Constitution that these patriots anticipated would lead to tyranny was the Supreme Court. As McDurmon writes, 

“Candidus,” attributed to Samuel Adams, warned that it would “occasion innumerable controversies; as almost every cause (even those originally between citizens of the same State) may be so contrived as to be carried to this federal court.”

So while today we debate the original intent of the Constitution and hope that members of the Supreme Court will follow that same intent, Sam Adams, and other patriots of his time  foresaw the tyranny of national government that is now upon us.

Despite the genius of the Constitution, and the character of the Founders, the Constitution was the sin that put power in the hands of a central government which has taken our sovereignty, thinks nothing of taking our property, and takes our money and later bribes us with it to stay in power.

If Sam Adams were alive today he might well point to the originalist sin and urge not the restoration of the Constitution, but the Articles of Confederation.

Note: HT @tjholthaus for pointer to original article.
Categories: Uncategorized

YouCut: You Suck

September 22, 2010 Leave a comment

It's appropriate that in an age with reality T.V. and talent competitions, our so-called leaders offer up something called YouCut. I guess I should be thrilled that our Representatives in Washington, D.C. have all converted to Mr. Smith Goes to Washington types and are finally looking out for the little peons…oops, people.

Guess what? I'm not thrilled. In fact, I'm offended. First of all, after years of Tea Party protests our leaders still think we're so stupid that throwing us a bone – some measly tax cuts, is enough. Well, it's not enough. It's not within a country mile of near enough.

Amongst the "winning" ideas on YouCut is reforming Fannie Mae and Freddie Mac. You remember? Fannie and Freddie, where the government is socializing all of the mortgage losses from their grand scheme to make us an "ownership" society. Congratulations, you – the taxpayer – own  hundreds of billions – if not much, much more – in garbage.

May I propose something vastly simpler and capitalistic – remember Capitalism? Eliminate Fannie Mae and Freddie Mac. Get the government out of mortgages. If private banks, mortgage companies, etc. aren't willing to finance and risk all of their own money on a mortgage, then don't make the loan.

The idea of these pathetic cuts assumes that the government has any right to what I earn. Government doesn't. Participating in YouCut is about as practical as helping your master design your chains and shackles. "Ooh, I want the silver shackles!" 

I reject YouCut's and government's premise. I don't believe in negotiating with the government and humbly asking them if I may keep a few crumbs after they have feasted on my labor. It is government that should humbly submit to the people as servants, and ask for no more than absolutely necessary to carry out its proscribed duties under the Constitution. 

It's time to repeal the 16th Amendment – the income tax – and end this YouCut silliness. Oh yes, we should cut government…to the bone. I'm sick and tired of negotiating for what is already mine.

YouCut – you suck, and so does the premise behind our out-of-control government at present.
Categories: Uncategorized

Bullish on the Tea Party?

September 19, 2010 Leave a comment

Should we be economically bullish that the Tea Party will at last force fiscal sanity upon Congress and unleash the economic potential of our country?

I am not optimistic it will do so. Unless we repeal the 17th Amendment which took the selection of Senators out of the hands of state governments, repeal the 16th Amendment which brought forth the pestilence of income taxes and massively bloated government (aka Fedzilla), put the 10th Amendment front and center when discussing our liberty, restore the rule of law, and force through a Congressional agenda that includes auditing, then eliminating, the Federal Reserve Bank, makes Congress cite it's Constitutional authority to pass a proposed piece of legislation, ensures that our representatives actually read the bills they vote on, keeps special interests and the White House from writing bills, prevents log rolling which encourages back-room deals and pork, allow adequate time for public comment on proposed legislation, and more, then I see no reason for optimism that any future Congress will be a significant improvement from the current one.

The simple fact is, depending on the political establishment for the protection of your rights and economic liberty is not the best path to take. A better path is to restore our country and the Constitution by taking the steps outlined above. If you want government to consume fewer tax dollars, then you must forbid it from confiscating your money (property) through the income tax. If you want a Congress that respects the rights of the states and people, then you must restore proper oversight by allowing the states to control the process of selecting U.S. Senators and sending representatives to Congress who respect and honor the Tenth Amendment. I suspect that Senators selected by state legislatures would be much more reluctant to stomp on the rights of the states and the people and pass legislation such as Health Care Reform.

Over the course of the last hundred years or so, we have allowed our system of federalism to devolve into a highly centralized national government. This has eroded our economic liberty. Unfortunately, we don't have any political party that will restore what we have lost. Tea Party or no, I'm not optimistic that gradualism – or trying to convince the thieves to kindly give us back what they have stolen – will work. If we want our liberty back, we'll have to take it back or humbly submit to our masters in Washington, DC.
Categories: Uncategorized

Need to Forget (Poem)

September 19, 2010 Leave a comment
A brief intro: Sometimes we all just need to forget. Other times our forgetting is not deliberate. What's it all about? I forget.

Need to Forget

I just need to forget.

The past.

Need to forget to remember to take my medication.

Don't know why I ever wanted to remember.

Not now. Not now.

Don't remind me.

Quit trying to help me all the time.

All the reminders not worth the paper they're written on.

Remember when nothing was impossible?

Not anymore.

Try to remember to take out the garbage.

Finish the project.

You've got potential.

Need to forget.

Try to remember why you got married.

She thought you were someone else.

Then one day she woke up with you.

Sorry for that.

One day you're vertical.

The next you're horizontal forever.

Died bolt upright in your La-z-boy.

You were at peace until I tried CPR.

Should have let you rest in peace.

Still trying to forget.

Tears we've cried.

Lies we've lied.

Lives we've led.

The deaths we've died.

Should have tried.


Make an effort.

Try harder.

Take the magic pill so I can retire.

What was I thinking?

Some day.

I'll make it.

One day.

You'll be proud of me.

Forget it.

Try to forget me.

You need to.

I was never here.

At least not that you noticed.

A stranger lingered for a while.

Too long.

It was me.


I forget.
Categories: Uncategorized

Garbage (Poem)

September 19, 2010 Leave a comment
From time to time I get that sensation of something eating away at me in some dark recess of my mind. Occasionally, the result is a poem. Hopefully writing it all down will keep me from going all Van Gogh on myself.


Garbage on my desk and in my garage.

Some of it in trash cans, some in stacks and stacks.

Sideways leaning stacks cluttering the flat surfaces.

Garbage in, but rarely out. 

A steady stream of refuse, some human, some forced through machines to come out lily white on the other side.

When will I become lily white?

Hard to be with so much garbage in my head.

Garbage on my TV. Heaps more flow from my computer and cell phone.

Work so dirty you'd barely recognize me.

Scrub the dirt off in the shower but fear it's seeping in to my soul.

So much garbage.

Garbage inside.

Garbage outside.

Buy more garbage whatever the ads are selling.

Take it home but garbage won't make me happy.

Heaps of garbage. Boxes of files. What's in them all?

Stuff in storage I never use. Why the hell am I storing it?

Memories I can't shake. 

Other peoples' garbage blows onto my front lawn.

I have enough garbage. I don't need their garbage too.

Is this garbage?

Am I just a trash receptacle?

Maybe God can recycle me.
Categories: Uncategorized