Archive for the ‘economics’ Category

The Energy Crisis in Africa.

Sunday, May 3rd, 2015

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This is a powerful piece on the cost of environmental extremism to the world’s poor.

The soaring [food] prices were actually exacerbated (as the Food and Agriculture Organisation of the UN confirmed) by the diversion of much of the world’s farmland into making motor fuel, in the form of ethanol and biodiesel, for the rich to salve their green consciences. Climate policies were probably a greater contributor to the Arab Spring than climate change itself.

The use of ethanol in motor fuels is an irrational response to “green propaganda. The energy density of biofuel, as ethanol additives are called, is low resulting in the use of more and more ethanol and less and less arable land for food.

Without abundant fuel and power, prosperity is impossible: workers cannot amplify their productivity, doctors cannot preserve vaccines, students cannot learn after dark, goods cannot get to market. Nearly 700 million Africans rely mainly on wood or dung to cook and heat with, and 600 million have no access to electric light. Britain with 60 million people has nearly as much electricity-generating capacity as the whole of sub-Saharan Africa, minus South Africa, with 800 million.

South Africa is quickly destroying its electricity potential with idiotic racist policies.

Just to get sub-Saharan electricity consumption up to the levels of South Africa or Bulgaria would mean adding about 1,000 gigawatts of capacity, the installation of which would cost at least £1 trillion. Yet the greens want Africans to hold back on the cheapest form of power: fossil fuels. In 2013 Ed Davey, the energy secretary, announced that British taxpayers will no longer fund coal-fired power stations in developing countries, and that he would put pressure on development banks to ensure that their funding policies rule out coal. (I declare a commercial interest in coal in Northumberland.)
In the same year the US passed a bill prohibiting the Overseas Private Investment Corporation — a federal agency responsible for underwriting American companies that invest in developing countries — from investing in energy projects that involve fossil fuels.

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Pessimism is coming into style

Friday, May 1st, 2015

Richard Fernandez, at Belmont Club is my go to guy for news and analysis. Today, he is getting as pessimistic as I am.

[R]emembering how the migrant boat from Libya sank on the way to Italy. The passengers crammed into the ship rushed blindly to one side to catch a glimpse of a freighter, thereby capsizing it. The perfectly describes the Left, who , facing catastrophe on every front is doing the only thing it knows how: doubling down on Leftist canon. Everyone is now stampeding left, because that will save the boat.

He provides a series of examples but the best one comes from Huffungton Post which functions as a sort of Bible for the left.

Why the Planet Is Happy That Bernie Sanders Is Running for President

It’s amusing in an Anthropology sort of way, but it is depressing to see what is important to the left.

The Baltimore mayor was unconcerned about property destruction because she was convinced that “someone” would rebuild it. The same “someone” who will pay for the deficit and ransoms to al-Qaeda, as well as the bribes to Iran. The identical “someone” that will cough up the reparations to the inmates of Guantanamo. The “someone” who will man the ships to fight the Iranian boghammers, should it come to that.

“Someone” is the source of other people’s money.

Whose ?

Lenin called imperialism the final stage of capitalism, but he always assumed that Communism would be the highest phase of socialism. That’s where he was wrong. What Lenin didn’t realize was that prayerful piety is the ultimate stage of Leftism. It’s when you are in a line praying there is still toilet paper, or bread or a job left for you at the end; it is when you are on your knees before al-Qaeda begging them to reduce the ransom from $2 to $1.85 million because that’s all your house, car, jewelry and life savings are worth. It is when your arms are raised in rapturous hope at the coming of Obama, Warren, Sanders — or Hillary. That’s the last vision of heaven you will see as you rush to one side of the boat.

The stock market is in 1929 territory with interest rates at zero or less.

At least one Spanish bank, Bankinter SA, the country’s seventh-largest lender by market value, has been paying some customers interest on mortgages by deducting that amount from the principal the borrower owes.

The problem is just one of many challenges caused by interest rates falling below zero, known as a negative interest rate. All over Europe, banks are being compelled to rebuild computer programs, update legal documents and redo spreadsheets to account for negative rates.

Interest rates have been falling sharply, in some cases into negative territory, since the European Central Bank last year introduced measures meant to spur the economy in the eurozone, including cutting its own deposit rate.

That should help the economy.

Meanwhile, the political left is obsessed with gay rights and women’s risk of rape on college campuses.

Pessimism may not be pessimistic enough.

Drill, Baby, Drill.

Wednesday, March 25th, 2015

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It looks like the battle for Saudi Arabia has begun and, if it follows the pattern of other Obama wars, it will be soon lost, or so Richard Fernandez believes.

Even the New York Times sees it.

President Abed Rabbo Mansour Hadi fled Yemen by sea Wednesday as Shiite rebels and their allies moved on his last refuge in the south, captured its airport and put a bounty on his head, officials said.

The departure of the close U.S. ally and the imminent fall of the southern port of Aden pushed Yemen further toward a violent collapse. It also threatened to turn the impoverished but strategic country into another proxy battle between the Middle East’s Sunni powers and Shiite-led Iran.

Saudi Arabia and its Gulf allies believe the Shiite rebels, known as Houthis, are tools for Iran to seize control of Yemen and say they intend to stop the takeover. The Houthis deny they are backed by Iran.

The stakes are very high for Europe, especially.

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A Tribute to Lee Kwan Yew

Tuesday, March 24th, 2015

Thomas Sowell has a fine tribute to the leader of Singapore who died yesterday.

It is not often that the leader of a small city-state — in this case, Singapore — gets an international reputation. But no one deserved it more than Lee Kuan Yew, the founder of Singapore as an independent country in 1959, and its prime minister from 1959 to 1990. With his death, he leaves behind a legacy valuable not only to Singapore but to the world.

Born in Singapore in 1923, when it was a British colony, Lee Kuan Yew studied at Cambridge University after World War II, and was much impressed by the orderly, law-abiding England of that day. It was a great contrast with the poverty-stricken and crime-ridden Singapore of that era.

Today Singapore has a per capita Gross Domestic Product more than 50 percent higher than that of the United Kingdom and a crime rate a small fraction of that in England. A 2010 study showed more patents and patent applications from the small city-state of Singapore than from Russia. Few places in the world can match Singapore for cleanliness and orderliness.

Mr Lee had an impressive life story, himself.

Lee graduated from Fitzwilliam College, Cambridge University, with a double starred-first-class honours in law. In 1950, he became a barrister of the Middle Temple and practised law until 1959. He co-founded and was the first secretary-general of the People’s Action Party (PAP), leading it to eight consecutive victories. He campaigned for merger with Malaysia, a move deemed crucial to persuading Britain to relinquish its colonial rule in 1963; but racial strife and political tensions led to Singapore’s separation from the Federation two years later. Leading a newly independent Singapore from 1965, with overwhelming parliamentary control, Lee oversaw the nation’s transformation from a relatively underdeveloped colonial outpost with no natural resources into an Asian Tiger economy. In the process, he forged a widely admired system of meritocratic, clean, self-reliant and efficient government and civil service, much of which is now taught at the Lee Kuan Yew School of Public Policy.

He was a great man and his legacy is being maintained in spite of faint praise from the NY Times.

Pragmatic even about death and averse to a cult of personality, Mr. Lee, who died Monday at age 91, said the house would cost too much to maintain and would become a shambles when “people trudge through.”

There was no wrecking ball on Mr. Lee’s quiet street on Tuesday, and the official memorial does not begin until the public viewing of his coffin in Parliament on Wednesday.

But Singaporeans are asking the same questions about the larger house that Lee Kuan Yew built — modern Singapore and the vaunted “Singapore model.” Will it survive him, or has the sleek Asian financial hub outgrown his father-knows-best style of government?

Among members of the country’s increasingly assertive and demanding electorate, there are calls for a new social contract, a more consultative government and participatory rule-making.

They may be ready for democracy now but there was no question about it then.

A Very good explanation of Hillary Clinton.

Sunday, March 15th, 2015

Kevin Williamson is one of my favorite writers and I have read his book and thoroughly enjoyed it. Today he has an excellent column on Hillary Clinton that seems to me very insightful.

[T]he Democrats place an extraordinary value on cleverness: They are the party of the student council, and Bill Clinton has spent 50-odd years proving to the world that he is the cleverest boy at Hot Springs High School, and his admirers loved him not in spite of his gross opportunism and dishonesty but because of those very things. Finally, the Democrats rejoiced, a man who can show those Republicans for the unsophisticated, unclever fools that they are! Mrs. Clinton is at the moment looking somewhat short of clever.

I have thought all along that Bill was the clever boy in school who was almost an accidental president. George Bush was convinced to raise taxes at the beginning of a recession, I have always believed, as part of a deal to get Democrats to vote for the Gulf War. There has been considerable speculation about Al Gore’s vote for the Gulf War.

Later that night, Sen. Gore called Greene and asked if Sen. Dole had scheduled him for a prime-time speaking slot. When Greene said nothing had been finalized yet, Gore erupted, “Damn it, Howard! If I don’t get 20 minutes tomorrow I’m going to vote the other way!”

Gore wanted more time on TV. What about Dan Rostenkowski ? The Democrats supported Bush in the Gulf War vote by a minority of 32% of their members

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Amnesty and Our Future.

Saturday, March 14th, 2015

I came across an excellent long post at Bookworm this morning. I have been very aware of the growing presence of illegal aliens in California for the past 40 years. Not far from my home you can see some of it as Hispanic men gather at street corners looking for day labor.

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Two such corners are at Jeronimo and Los Alisos in Mission Viejo. Another is a half mile away at a U-Haul yard where people rent trucks and trailers. Every morning you will see 50 to 60 men standing on the corner and running over to any car that seems to be slowing down or stopping.

Anyway, here are a few reflections on what is happening.

The communists’ big moment came in 1995 when no one was looking. That was the year that the Democratic Socialists of America, a communist group, put one of their own — John Sweeney — in as head of the AFL-CIO. Overnight, the AFL-CIO, an organization that was once ferociously anti-communist and that opposed amnesty because it would hurt working Americans, turned into a pro-communist, pro-amnesty group.

More than that, through the AFL-CIO, communists suddenly owned Congress. After all, unions (headed by the SEIU, which outspends the next two donor organizations which are also Leftist) are the largest contributors to Democrat politicians.

Ok, Ok I know that communists are an old story. Still, what we see in this country is Socialism gaining adherents among the young and poorly educated and among the rich who consider themselves immune to its ill effects.

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Is War Coming ?

Wednesday, February 11th, 2015

There are three, possibly four, major areas of international strife and all are getting worse as we watch.

Europe is trying to deal with Vladimir Putin and the new Russia. It is not doing well.

There was a palpable tone shift in U.S. policy toward Ukraine this week, when the Obama administration signaled that it was ready to consider sending the country lethal military aid. A confluence of factors is pushing President Obama toward this decision. The fragile ceasefire brokered in September between Ukraine and Russian-backed separatists has failed, manifested in the series of recent and high-profile separatist advances against the Ukrainian military this week. Bipartisan congressional support for sending weapons to Ukraine, championed by Sens. John McCain (R-Ariz.) and Robert Menendez (D-N.J.), as well as a newly released report by former senior U.S. and European officials recommending lethal military aid for the embattled country, have also contributed to Obama and his tight inner circle of foreign policy advisers reconsidering the lethal aid option.

Will this happen ? I doubt it.

As Kadri Liik of the European Council on Foreign Relations pointed out recently , many Western leaders persist in seeing the Ukraine invasion as a hiccup in relations with Russia that can be smoothed over, rather than as a demonstration that Mr. Putin’s agenda is fundamentally at odds with Europe’s security interests and its values. Because of their attachment to the hiccup theory, governments — including the Obama administration — have refused to take steps, such as providing the Ukrainian government with defensive weapons, that could help stop Mr. Putin’s aggression. Instead, they concoct futile schemes for “reengaging” the Russian ruler.

The next crisis will be the end of NATO.

Late this week, the Obama administration unveiled its new National Security Strategy, amid less than fanfare, with the execrable Susan Rice explaining in “remain calm, all is well!” fashion that things are really much better globally than they look. This White House’s new foreign policy mantra is Strategic Patience, which seems to be the been-to-grad-school version of “don’t do stupid shit.” Since nobody inside the Beltway is taking this eleventh-hour effort to articulate Obama’s security strategy seriously, it’s doubtful anyone abroad, much less in Moscow, will either.

Soon, Putin will turn his gaze on the Baltics.

Jaws dropped this week when Anders Fogh Rasmussen, who until recently was NATO’s civilian head, stated that it is highly likely that Russia will soon stage a violent provocation against a Baltic state, which being NATO countries, will cause a crisis over the Alliance’s Article 5 provision for collective self-defense. Rasmussen merely said what all defense experts who understand Putin already know, but this was not the sort of reality-based assessment that Western politicians are used to hearing.

NATO has disarmed and is in panic mode now if they have to face Russia, weak as it is in the long term. As Keynes said, “In the long term we are all dead.” We are partly responsible for this state of affairs.

Not all the fault for this sorry state of affairs lies in Europe. Here America has played an insidious role too, encouraging spending on niche missions for the Alliance at the expense of traditional defense. Hence the fact that Baltic navies have considerable counter-mine capabilities — this being an unsexy mission that the U.S. Navy hates to do — yet hardly any ability to police their maritime borders against intruding Russians. To make matters worse, since 2001 the Americans have encouraged NATO partners to spend considerable amounts of their limited defense budgets on America’s losing war in Afghanistan.

We should have gotten out in 2009. The absurd Rules of Engagement are only part of it.

Now, we face another major threat in the Middle East, Theater Two.

For the situation with Iran, I have long relied on the writing of Spengler.

Dying civilizations are the most dangerous, and Iran is dying. Its total fertility rate probably stands at just 1.6 children per female, the same level as Western Europe, a catastrophic decline from 7 children per female in the early 1980s. Iran’s present youth bulge will turn into an elderly dependent problem worse than Europe’s in the next generation and the country will collapse. That is why war is likely, if not entirely inevitable.

The rulers of Iran have shown no moderation of their messianic beliefs and their willingness to destroy themselves to bring about the coming of the Twelfth Imam.

Twelver Shi‘a believe that al-Mahdi was born in 869 (15 Sha‘bin 255 AH) and assumed Imamate at 5 years of age following the death of his father Hasan al-Askari. In the early years of his Imamate he would only contact his followers through The Four Deputies. After a 72-year period, known as Minor Occultation, a few days before the death of his fourth deputy Abul Hasan Ali ibn Muhammad al-Samarri in 941, he is believed to have sent his followers a letter. In that letter that was transmitted by al-Samarri he declared the beginning of Major Occultation during which Mahdi is not in contact with his followers.

The coming of the Imam is part of the end of the world and the rulers of Iran are “Twelvers.”

Shi’as believe that Imam al-Mahdi will reappear when the world has fallen into chaos and civil war emerges between the human race for no reason. At this time, it is believed, half of the true believers will ride from Yemen carrying white flags to Makkah, while the other half will ride from Karbalaa’, in the `Iraq, carrying black flags to Makkah. At this time, Imam al-Mahdi will come wielding `Ali’s Sword, Zulfiqar , the Double-Bladed Sword. He will also come and reveal the texts in his possession, such as al-Jafr and al-Jamia.

The Shi’ites have this belief as part of their religion and the rulers of Iran seem to be sincere in their beliefs, which is why Obama is insane to consider them rational.

The Sunni equivalent is the new group called Islamic State in Syria and various other names.

The recent rise in terrorist attacks is only one part of the problem. We also see the collapse of Iraq after Obama removed all US troops.

What are we going to do about all this? Probably nothing as Obama has a master plan that will solve all our problems. He will make friends with our worst enemies.

What about China ? We were going to “pivot to Asia.”

One question is whether China is stable. There are questions about China’s economic future.

Beijing can manage a rapidly declining pace of credit creation, which must inevitably result in much slower although healthier GDP growth. Or Beijing can allow enough credit growth to prevent a further slowdown but, once the perpetual rolling-over of bad loans absorbs most of the country’s loan creation capacity, it will lose control of growth altogether and growth will collapse.

The choice, in other words, is not between hard landing and soft landing. China will either choose a “long landing”, in which growth rates drop sharply but in a controlled way such that unemployment remains reasonable even as GDP growth drops to 3% or less, or it will choose what analysts will at first hail as a soft landing – a few years of continued growth of 6-7% – followed by a collapse in growth and soaring unemployment.

What would happen then ? I just don’t see a war with China in our future, partly because neither of us can afford it. China is threatening its neighbors, like Japan and the Philippines, but we are unlikely to intervene. Our former allies in the east are now seeking help from each other as Obama destroys the US influence.

Unemployment benefits and jobs

Wednesday, January 28th, 2015

The Pelosi Congress extended unemployment benefits in 2009 to a maximum of 53 weeks. This has been renewed until the new Republican Congress after 2010, unable to get Obama to negotiate, allowed the extra benefits to lapse.

Federal unemployment benefits that continue for 26 weeks after a person uses up the 26 weeks of state unemployment benefits ended Saturday, so now some 1.3 million people won’t be getting their $1,166 (on average) monthly check. By June, another 1.9 million will be cut off.

Many in the federal government are talking about the need to extend benefits. President Obama labelled it an “urgent economic priority” and called a couple of senators to pressure them to bring the matter up when the Senate reconvenes next week, and is urging Congress to extend the benefits for another three months. Senate Majority Leader Harry Reid has promised a vote no later than January 7 for the three month extension. Gene Sperling, the head of Obama’s National Economic Council, lamented the end of the federal aid…

Disaster was predicted.

Amazingly, the disaster did not happen. In fact, job growth went up.

Just looking at the economy’s overall size, you wouldn’t think that the last year was much different from any of the others since the recession. The U.S. economy grew at about the same rate in 2014 as it did in the previous four years — less than 2.4 percent, according to the Federal Reserve’s most recent projection. Yet last year was different. People started going back to work. The percentage of Americans working, more or less stuck in a ditch since 2009, increased from 58.6 percent in December 2013 to 59.2 percent last month. Employers added an average of 246,000 positions a month, about 3 million jobs overall.

What happened ?

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Rape Culture

Sunday, December 14th, 2014

UPDATE: here is another pretty good article on this topic as even the left starts to realize the truth.

The country is going through one of the increasingly common episodes of hysteria in modern times. In the 17th century, there was the period of The Salem Witch Trials.

From June through September of 1692, nineteen men and women, all having been convicted of witchcraft, were carted to Gallows Hill, a barren slope near Salem Village, for hanging. Another man of over eighty years was pressed to death under heavy stones for refusing to submit to a trial on witchcraft charges. Hundreds of others faced accusations of witchcraft; dozens languished in jail for months without trials until the hysteria that swept through Puritan Massachusetts subsided.

The episode was begun by what sounds like hysterical symptoms occurring in the daughter of the new minister. Before it was over, a number of people of the village of Salem had been accused of witchcraft and 19 were executed and five others had died.

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Suspected witches were examined for certain marks, called “witch marks,” where witches’ “familiars” could nurse. The hysteria ended as quickly as it began. By the end of 1692, it was over and all surviving accused were released.

The period of the hearings in America after World War II, in which many were accused of being communists, the so-called “McCarthy period,” is often compared to this era and a left wing playwright, Arthur Miller, wrote a play called “The Crucible,” which made the connection between the Salem trials and Senator McCarthy’s accusations the theme.

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Gruber’s lies.

Wednesday, December 10th, 2014

The left does not do economics. They do politics and elections and lying to get past the “stupid voters” but, when pressed, nothing they do qualifies as numerically or mathematically sound. Social Security worked until everyone found the queue and until Congress raided the trust fund in the 90s.

Obama and the Democrat leaders knew that Hillary made enemies of the insurance companies in 1992. The insurance companies funded devastating TV ads with “Harry and Louise” that cost the Democrats Congress in 1994. Therefore, they had to do what was necessary to get the insurance companies “inside the tent pissing out and not outside the tent pissing in” in Lyndon Johnson’s immortal words.

Insurance companies have considered health insurance a loser for 25 years now. What they prefer is becoming “Administrative Service Organizations” which administer self funded health plans by employers.

Corporate benefits include- organizing/ negotiating health insurance, group dental, STD, LTD, life, etc.

The plan the Democrats came up with, with Gruber’s help, was to make the government the funding entity and pay the insurance companies to run the program. That way everybody is happy, except, of course, the taxpayer. The taxpayer does not like tax increases which would be needed to pay the bills. Therefore the taxpayer has to be fooled.

The excise tax on high-cost health plans was among the many fees and taxes proposed as offsets to help slow the rate of growth of health costs, particularly premium growth, and finance the nationwide expansion of health coverage. When the Affordable Care Act was signed into law in March 2010, its coverage provisions were estimated to cost more than $900 billion over the next decade, from 2010 to 2019, and were to be paid for by fees and taxes on both individuals and businesses. At the time the health reform bill passed, the excise tax on high-cost plans was estimated to raise roughly $32 billion in revenue over the next decade, or by 2019.

Without the taxes to pay the bills, the whole plan collapses. At its base, Obamacare is Medicaid for everyone. The employer mandate has been, contrary to the text of the law, postponed as the flaws in implementation appear. If it were to be enforced, there would be a revolution. The funding from employee plans is called “The Cadillac Tax which is an excise tax on employer plans that exceed the benefits of Medicaid.

As health coverage expands to tens of millions of Americans–through Medicaid expansion in states and the new state health insurance exchanges that will soon begin selling individual health coverage–some Americans with employer-sponsored health coverage are seeing their benefits decrease.

One of the most significant, and controversial, provisions of the Affordable Care Act is the new excise tax on high-cost health plans proposed to both slow the rate of growth of health costs and finance the expansion of health coverage. The provision is often called the “Cadillac” tax because it targets so-called Cadillac health plans that provide workers the most generous level of health benefits. These high-end health plans’ premiums are paid for mostly by employers. They also have low, if any, deductibles and little cost sharing for employees.

If this is ever implemented, the Medicaid-for-all nature of Obamacare will become obvious. That’s why it will not happen. The fundamental premise behind Obamacare is not viable. That is why it will fail and the numbers do not add up.

Gruber can’t say this. All he can do is obfuscate.