Archive for the ‘economics’ Category

The disgrace of the IRS

Tuesday, November 25th, 2014

The IRS scandal has forever discredited the Internal Revenue Service. The scandal is going on two years in length. It began with the notorious Lois Lerner, who headed a division called “The Exempt Organizations Unit.” This was supposed to evaluate applications for tax exemption.

Lerner served for a time on Federal Election Commission, which suggested her interest in electoral politics.

Lerner began her IRS service in 2001 as Director Rulings and Agreements in the Exempt Organizations function of TEGE. [2] In January 2006, she was selected as Director Exempt Organizations. In this capacity, Lerner led an organization of 900 employees responsible for a broad range of compliance activities, including examining the operational and financial activities of exempt organizations, processing applications for tax exemption, providing direction through private letter rulings and technical guidance and providing customer education and outreach to the exempt community.

Here it is apparent that she was promoted by the Bush Administration and was not a political appointee of the Obama people. Why was she involved in this scandal ? The Treasury Department is run by a career Civil Service bureaucracy. Career federal agents and employees are prevented from political partisan activity by The Hatch Act of 1939. Does this work ?

No.

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Obama’s “Amnesty.”

Saturday, November 22nd, 2014

I am not happy about Obama making his speech about amnesty and defying the GOP newly elected Congress to do anything about it. However, there is less here than it seems.

First: And to those members of Congress who question my authority to make our immigration system work better or question the wisdom of me acting where Congress has failed, I have one answer: Pass a bill. I want to work with both parties to pass a more permanent legislative solution. And the day I sign that bill into law, the actions I take will no longer be necessary.

king obama

I don’t believe him but the GOP could do worse than assume this is true. The next steps would be to take actions assuming he was not lying.

Obama clearly wanted to make himself look like the compassionate actor in this debate, and Republicans the heartless, cruel nativists. Instead of trying to fight that battle, make Obama own it and bypass it for the real battle the GOP wants to win on border security. Make Democrats vote against a border security bill, and make Obama veto one while his own amnesty remains in place.

Not everybody is willing to accept this as a phony gesture which I think it is.

When President Obama announces that he will be suspending laws to bless the illegal presence of millions of foreigners in the United States, he will have adopted the most basic philosophy of John C. Calhoun: some laws can be tossed aside because his ends justify the lawlessness.

I don’t trust Obama’s intent but I think he is a fool and did not plan this correctly, or else chickened out. There is more interesting comment at Powerline today.

Procedurally what happens is an undocumented person applies for ‘deferred action’ and then after receiving this ‘quasi-status’ – he/she is eligible for work authorization.

See the last paragraph on page 4 of this key memo: “Applicants must file the requisite applications for deferred action pursuant to the new criteria described above. Applicants must also submit biometrics for USCIS to conduct background checks similar to the background check that is required for DACA applicants. Each person who applies for deferred action pursuant to the criteria above shall also be eligible to apply for work authorization for the period of deferred action, pursuant to my authority to grant such authorization reflected in section 274A(h)(3) of the Immigration and Nationality Act.”

I still think the Republicans can trump this with real reform. Then they can send a bipartisan bill to Obama and see if he vetoes it. That Powerline post also emphasizes that Silicone Valley is pushing this and that explains their support of Obama.

How many Senate Democrats would be willing to sustain that veto before the 2016 election? I’m betting not too many. But Republicans have a perfect opportunity to turn the debate in that direction now and force Obama and his shrinking number of allies on Capitol Hill to go on the record.

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Could Obama go rogue if the Senate flips ?

Saturday, October 11th, 2014

Roger L Simon has an interesting column on the consequences of a GOP win this fall.

Barack Obama is a man unaccustomed to losing. Life has been exceptionally kind to him, sailing, as he did, through balmy Oahu sunsets, college, law school and career on into the presidency with scarcely a bump. He has been a protected man beyond any in recent memory, feted and praised virtually everywhere he went until the last couple of years. Even now, despite catastrophe after catastrophe, there are acolytes who continue to celebrate him, paying tens of thousands merely to have their photographs taken with him.

When such cosseted people are forced to confront failure, they typically do not do so with grace.

Obama’s style of governing seems to be quite unusual for modern presidents. He does not have a circle of “Wise Men” as most presidents have done, including Bill Clinton, who had Robert Rubin advising him on economics and the bond market.

Obama, instead, relys on a small circle of advisors with little or no experience in national affairs.

Insider books by Robert Gates, Hillary Clinton and Leon Panetta have appeared in rapid succession, implying or directly alleging that the president lives in a bubble, unwilling to listen to advice. He frequently threatens to — and sometimes does — go around the Congress to get his way via, often unconstitutional, executive fiat. We all know that he lies, constantly.

His closest advisor appears to be Valerie Jarrett who has no policy experience and who seems to be a Chicago insider.

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Is Britain beginning the revolution we need ?

Saturday, August 30th, 2014

A “Seismic Shock is coming to the British political system.

Douglas Carswell, a prominent Conservative MP has announced he is switching to UKIP. a new political party that has been attacked as “racist” and has been attracting a larger constituency from the British traditional voters.

A new political party has appeared in Britain called UK Independent Party. It has been called racist and a number of other things that might sound familiar to Tea Party members here.

For example:

News reports about the rising primary school population in England fail to mention the ‘elephant in the room’, said MEP Paul Nuttall.

“It is accepted that primary schools have increasing numbers of pupils, which causes all manner of problems, but what is frequently not referred to is why we have such a boom in numbers.

“And the answer is unlimited immigration into this country. It hits some areas harder than others but there cannot be many primary schools in the country which have not been affected at all,” said Mr Nuttall, UKIP Education spokesman.

Why is this controversial ? In the 1990s, the Labour Party opened the floodgates of immigration from Pakistan. The Conservatives have mentioned reducing this but have done little about it.

Steven Woolfe, UKIP Migration spokesman, attacks Conservatives for ‘lying to electorate’ on promises to cut migration, adding that ‘it is no wonder their own MPs are losing faith in them and they are haemorrhaging support to UKIP.’

“These shocking figures today show that the Government does not have a handle on immigration. The Conservative Party promised to cut net migration to tens of thousands and yet it has shot up by a staggering 68,000 in just one year. It is quite simple. They lie to the electorate. They lie to try to keep votes. Well they are being found out.

This is one reason why UKIP is hated. For example, of the 1400 young girls made sex slaves by “Asian” men, several were taken from foster parents because they had voted for UKIP.

A couple had their three foster children taken away by a council on the grounds that their membership of the UK Independence Party meant that they supported “racist” policies. The husband and wife, who have been fostering for nearly seven years, said they were made to feel like criminals when a social worker told them that their views on immigration made them unsuitable carers.

Sounds like the Tea Party to me.

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Medicine is coming to be a government benefit.

Sunday, August 3rd, 2014

Obamacare is having serious trouble as I have discussed. The success stories, like California, are an example of what I have called Medicaid for All.

“It’s a total contradiction in terms to spend your public time castigating Medicaid as something that never should have been expanded for poor people and as a broken, problem-riddled system, and then turn around and complain about the length of time to enroll people,” said Sara Rosenbaum, a member of the Medicaid and CHIP Payment and Access Commission, which advises Congress.

Most of the new enrollees are Medicaid members and those enrolled in “private insurance” learn that they have severely restricted choice of doctor or hospital.

Now we have a new development.

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What next for health reform?

Saturday, July 26th, 2014

It looks to me that the Supreme Court will have little justification for continuing the Obamacare program as it exists. The Halbig decision should kill it off. It is clear that the IRS subsidies to federal exchange subscribers are illegal.

The only statement anyone has found in the legislative history that addresses this point comes from the Act’s lead author, who affirmed that Congress did intend to withhold tax credits in federal Exchanges. During a September 23, 2009, mark-up of his bill, which ultimately became the PPACA, Senate Finance Committee chairman Max Baucus (D-MT) refused to consider a Republican amendment regarding medical malpractice on the grounds it fell outside the Committee’s jurisdiction. Sen. John Ensign (R-NV) protested, asking how Baucus’ bill could do other things that lie outside the Committee’s jurisdiction, like direct states to create Exchanges. Baucus responded the bill creates tax credits, which are within its jurisdiction, and makes eligibility for those tax credits conditional on states creating Exchanges. Conditional necessarily means that Baucus intended to withhold tax credits in states that did not create their own Exchanges.

I just don’t see how the Court can ignore that history. The political left has been on a rant about Congressional intent since the decision was announced.

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An Update on Medical Reform

Monday, July 21st, 2014

Cash medical practice or, in the phrase favored by leftists critics, “Concierge Medicine,” seems to be growing.

Becker is shifting to a new style of practice, sometimes called concierge or retainer medicine. With the help of a company that has been helping physicians make such shifts for over 13 years, he will cease caring for a total of 2,500 patients and instead cut back to about 600. These patients will pay an annual fee of $1,650. In exchange, they will receive a two-hour annual visit with a complete physical exam, same-day appointments, 24-hour physician phone access, and personalized, web-based resources to promote wellness.

The article suggest that all these doctors choosing to drop insurance and Medicare are primary care. Many are but I know orthopedists and even general surgeons who are dropping all insurance.

The concierge model of practice is growing, and it is estimated that more than 4,000 U.S. physicians have adopted some variation of it. Most are general internists, with family practitioners second. It is attractive to physicians because they are relieved of much of the pressure to move patients through quickly, and they can devote more time to prevention and wellness.

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Is Israel winning the Global War on Terror for us ?

Saturday, July 12th, 2014

Update: From Instapundit

UPDATE: Question: Come a real confrontation with Obama — which seems possible — could the Israelis flip and ally with Putin? The Soviets backed the Israelis pre-1967, and right now Putin’s siding with Assad against the Islamists. Israel would be a game-changing ally for Russia in the Middle East, especially with all the traditional Arab powers looking shaky — not only in terms of military assets, but more significantly in terms of intelligence assets.

Interesting as a game changing gambit although unlikely. Not even Obama is that stupid.

Hamas has attacked Israel, first with the kidnapping of three teenagers, now with rockets aimed, for example, at Tel Aviv and its airport.

GAZA: Islamist Hamas’ armed wing has warned airlines that it intends to target Israel’s Ben Gurion International Airport with its rockets from Gaza and has told them not to fly there, a statement by the group said Friday.

So far, Israel’s Iron Dome antimissile system has been successful in intercepting those that are a risk to populated places.

Israel’s astonishingly effective Iron Dome air defense has prevented Hamas from killing Israeli Jews and spreading terror in the civilian population. Ironically, though, the better Iron Dome works, the less sympathy the rest of the world has for a nation that remains under rocket attack.

That sentiment is to be expected as even the Presbyterian Church is anti-Isreal.

David Goldman, who has been writing as “Spengler” for years, reports on the situation in Israel.

the thumbnail version is that Hamas is making a demonstration out of weakness. Money is tight, 44,000 Gaza civil servants haven’t been paid for weeks, and the IDF did significant damage to its infrastructure on the West Bank after the kidnapping-murder of the three yeshiva boys. Netanyahu will look indecisive and confused, because he has to deal with an openly hostile U.S. administration on one side and his nationalist camp on the other. Time, though, is on Israel’s side: economically, demographically, strategically. The proportion of Jewish births continues to soar. The fruits of a decade of venture capital investing are ripening into high-valuation companies. And the Arab world is disintegrating all around Israel’s borders.

Israel has been in mortal danger for 50 years. They have survived and thrived. The Arab countries are collapsing into chaos. Iran is still a threat but its demographic future is grim.

There will be no Intifada on the West Bank: the Palestinian Arabs are older, more resigned and less inclined to destroy their livelihoods than in 2000. Syria and Iraq continue to disintegrate, Lebanon is inundated with Syrian Sunni refugees (weakening Hezbollah’s relative position), and Jordan is looking to Israel to protect it against ISIS. Egypt is busy trying to survive economically.

Israel is becoming a huge economic success under Netanyahu. Just think of our future had we elected his friend, Mitt Romney.

Obama promised a “pivot to Asia” but Israel may in fact be the one doing the pivot, leaving us in the dreary Socialist past.

Richard Fernandez notes that in the view of the world press and elites being rich makes you “white.” Everybody knows that white people, even if they are Asian like John Derbyshire’s Eurasian children, are the root of all evil.

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Mozilla steps in it.

Saturday, April 5th, 2014

Firefox has been a browser that I use going back to the time it replaced Netscape.

Netscape stock traded from 1995 until 1999 when it was acquired by AOL in a pooling-of-interests transaction ultimately worth US$10 billion. Shortly before its acquisition by AOL, Netscape released the source code for its browser and created the Mozilla Organization to coordinate future development of its product. The Mozilla Organization rewrote the entire browser’s source code based on the Gecko rendering engine; all future Netscape releases were based on this rewritten code. The Gecko engine would later be used to power the Mozilla Foundation’s Firefox browser.

The Netscape browser was the original interface for the World Wide Web. It all began with Mosaic, which was a project of Marc Anfdreessen when he was a grad student at the U of Illinois.

“In the Web’s first generation, Tim Berners-Lee (of CERN) launched the Uniform Resource Locator (URL), Hypertext Transfer Protocol (HTTP), and HTML standards with prototype Unix-based servers and browsers. A few people noticed that the Web might be better than Gopher.

In the second generation, Marc Andreessen and Eric Bina developed NCSA Mosaic at the University of Illinois. Several million then suddenly noticed that the Web might be better than sex.

In the third generation, Andreessen and Bina left NCSA to found Netscape…”

It was originally founded under the name Mosaic Communications Corporation on April 4, 1994, the brainchild of Jim Clark who had recruited Marc Andreessen as co-founder and Kleiner Perkins Caufield & Byers as investors. Clark recruited other early team members from SGI and NCSA Mosaic, including Rosanne Siino who became Vice President of Communications. Jim Barksdale came on board as CEO in January 1995.

The name change was a result of action by the University.

The University of Illinois was unhappy with the company’s use of the Mosaic name, so Mosaic Communications changed its name to Netscape Communications, and its flagship Web browser was the Netscape Navigator.

Then came Microsoft which saw Netscape as a threat, which it was.

Microsoft released version 1.0 of Internet Explorer as a part of the Windows 95 Plus Pack add-on. According to former Spyglass developer Eric Sink, Internet Explorer was based not on NCSA Mosaic as commonly believed, but on a version of Mosaic developed at Spyglass (which itself was based upon NCSA Mosaic). Microsoft quickly released several successive versions of Internet Explorer, bundling them with Windows, never charging for them, financing their development and marketing with revenues from other areas of the company. This period of time became known as the browser wars

The free browser from Microsoft was able to win “the browser wars” even though it was an inferior product.

Andreessen has become a famous investor and “angel” of Silicone Valley startups. He has also been involved in a bit of politics.

Andreessen endorsed Democratic candidate Barack Obama during the 2008 presidential elections. In 2012, however, Andreessen switched his allegiance to the Republican candidate Mitt Romney

Hmmm…

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Where is housing going ?

Sunday, March 9th, 2014

UPDATE: Megan McArdle has some doubts about house prices.

housing

The housing inflation seems to be limited to certain cities. How will this last in the poor (except District of Columbia) economy ?

I live in south Orange County and have noticed a huge amount of rental construction going on. This area has been mostly single family homes and condos since 1972 when I moved here. Now, we see big projects like this and others nearby that I don’t know the name of. These are big projects including hundreds and perhaps thousands of units. The builder is the Irvine Company which, in my previous experience, has built mostly homes and condos. Recently, I began to notice more rental projects in Irvine.

The Irvine Company Apartment Communities is dedicated to making it easy to find a home you’ll love with unsurpassed services meeting your every need. With approximately 122 exceptional apartment communities located throughout the prime California regions of Orange County, West Los Angeles, San Diego and Silicon Valley, we offer choices to fit every lifestyle and budget.

They seem to be going to rental property in a big way. Maybe this is the reason.

From reading the mainstream press all you hear are glorious signs of housing resurrection! Come one come all into the house of real estate where the almighty Fed will allow no harm to occur. Just sign and pray and the next thing you know you’ll be the next Donald Trump. The flipping, rehabbing, and housing shows are once again filling the space on a cable station near you. The perception of the Fed being this almighty protector of housing makes a bit of sense but where was the Fed in 2007?

I see lots of housing flips in southern California, not in Orange County so far.

foreclosure-completions

Even in 2013 we had 1.4 million properties with notice of defaults, scheduled auctions, and full on REOs taken on. Early in the crisis these stories were common since they were a novelty to the press. Now however, many of these properties are shifting over to large investors pushing inventory up. A clear consequence of this is a large pool of potential buyers that are unable to buy.

These may be the renters.

first-time-home-buyer

Yup. The would-be first time buyers have student loans and bad credit. They are renting.

The number of first time buyers is pathetic because household formation is weak and many young Americans are living at home with mom and dad. Forget about buying, they are having a tough time paying higher rents to the new feudal landlords. You would expect with the rapid rise in prices that existing home sales are off the charts but they are not.

Housing prices do NOT mean buyers who will be occupants. Look at mortgage applications !

mortgage-apps-for-purchase

Wow ! We are back to levels last seen nearly 20 years ago! Only difference is that we have 50,000,000 more people today walking the streets of the U.S. of A. than we did back then. Since access to middle class living is getting tougher thanks to weak income growth, more people are opting to rent:

rentals-vs-households

This is what I am seeing in Orange County. I have been looking in San Pedro for a small house near the ocean. I can no longer afford Orange County except condos. I sold my house four years ago and bought a house in the mountains. That was a bad move. I found that I could not tolerate the altitude. I had to sell into the bad market of 2012. That cost me a lot. Now, I have to lower my sights and may just stay a renter for a while. At my age, it may make better sense.