The Path To Tyranny

My book, The Path To Tyranny, is now available for sale on Amazon.

On Tiger Woods

I am quoted about Tiger Woods' recent indiscretions:

http://pajamasmedia.com/instapundit/89407/

TIGER WOODS, IMAGE, AND INFIDELITY. Is infidelity an external force, something that “takes down” a man? And Tiger may be only human, “but wasn’t Tiger Woods perceived as a special god-like man? And isn’t that key to the most lucrative aspect of his career, endorsements?”

UPDATE: Reader Michael Newton writes: “Tiger was respected and admired not just for winning golf tournaments, but for his discipline and concentration. So many of his ads play up the ‘mental’ part of his golf game. Now we find out he lacks discipline away from the golf course and he looks like a charlatan selling us a bill of goods.” Everybody’s human, and nobody’s without flaws. But those who let themselves be built up into something more than human tend to find that people are disappointed when they turn out to be human after all.

The Path To Tyranny

The website for my new book, The Path To Tyranny: A History of Free Society's Descent Into Tyranny is now up and running. It is still under construction though.

We can't buy everybody health care

I keep seeing people write and hearing people say that everybody should have the right to health care.

Here are some numbers:

World Gross Domestic Product: $61 trillion (http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29)
World population: 6.8 billion (http://www.census.gov/main/www/popclock.html)

GDP per person: $8,971

Do you think everybody can get health care on just $8,970/year income with much of that first going to pay for food, shelter, and clothing, which take priority over health care?

Economic recovery?

Recent economic data shows that things are not as bad as they once were or that we are actually recovering. I am not too sure. The Fed and Treasury have put a lot of new dollars into the system and the the Democrats in Congress along with President Obama are well on their way to spending the $787 billion in "stimulus."

The stimulus will temporarily push forward demand. Keynes argued that the government should increase spending during a recession and decrease during the good times. Unfortunately, we forget to decrease it during the expansions. Nevertheless, this stimulus is temporarily boosting the economy, but will result in lower economic output in the future, simply shifting demand from the future to the present.

Meanwhile, the sudden injection of tons of money into the system makes all economic calculation impossible. If you add a trillion dollars into the system, it appears like we are richer, spending more money, and companies increase their production. But it is all a smoke screen. It is simply new money devaluing old money, the basic financial situation has not changed. The "real" amount being produced and earned has not changed, though it has appeared to.

So it is impossible to know whether the economy really recovering or if we are simply shifting demand and creating an illusion.

President Obama had beer at the White House yesterday with police officer Jim Crowley and Professor Henry. Using all his famous personality and charm, Obama got the two of them to "agree to disagree."

Now we just need Obama to get Israel and the Palestinians or North and South Korea to have beer with him at the White House. Maybe they too can agree to disagree!

Nuclear for Iran, but not for US

Obama said in his Cairo speech: "And any nation -- including Iran -- should have the right to access peaceful nuclear power if it complies with its responsibilities under the nuclear Non-Proliferation Treaty."

The US last built a nuclear power plant thirty years ago. Why should Iran be allowed to build nuclear power plants while the US's electric companies are not?

No posts in a while

I'm sure you've noticed I haven't posted anything new in a while. I started writing a book and haven't paid as much attention to the blog. Sorry to disappoint.

Obama giveth and Obama taketh away

Headline: Obama wants to cut $17B from budget

The reality: President Barack Obama is seeking $81 billion more in spending on domestic initiatives in his record $3.55 trillion budget plan while calling on Congress to trim $17 billion worth of programs, including raising more tax revenue from the oil and gas industries.

Only in Washington can you increase spending by $64 billion and get credit for budget cuts.

Update: Now Yahoo is showing the headline "Obama seeks to trim 121 federal programs." What a joke!

UPDATE: IBD reports: Bush was ridiculed in his last budget for proposing cuts of $18 billion on 151 separate discretionary programs, but the GOP was hammered relentlessly for its supposed profligacy. Where are the critics now, as deficits are estimated to hit $4.42 trillion through 2012, and total debt will soar from 41% of GDP in 2008 to 67%?

British tax rates

Adam Smith must be turning over in his grave: Marginal tax rate in Britain hits 61.5%.

Misdirected outrage

It has now been revealed that:

Bank of America Chief Executive Ken Lewis said that the Treasury and the Federal Reserve threatened to remove him and the firm's board of directors if the company did not go through with a planned acquisition of Merrill Lynch late last year. According to the minutes of a December 22 meeting, which were released Thursday by New York Attorney General Andrew Cuomo, the government made the threat when the bank was considering invoking a "material adverse change" clause to quash the deal after it became clear Merrill's finances were collapsing. According to the minutes, Lewis, told the board that, "the Treasury and Fed stated strongly that were the corporation to invoke the material adverse change clause in the merger agreement with Merrill Lynch and fail to close the transaction, the Treasury and Fed would remove the board and management of the corporation."

I've heard that a number of major shareholders will try to oust Lewis, claiming that he was looking out for his own job instead of the interest of the shareholders. Why am I not hearing more people blame the Paulson and Bernanke?

I want to see the shareholders of Bank of America sue the Fed and Treasury, which committed at least two crimes: covering up the material information and blackmailing Bank of America's management.

But I am going to excuse Mr. Lewis even though he "should have" released the information to shareholders. He was probably worried about more than just losing his job. When the federal government tells you do something or else, you really have to worry. We have seen many businessmen thrown in jail recently on trumped on charges. Remember Martha Stewart, who was found guilty of lying to investigators about insider trading for which she was found not guilty. I am sure that when Mr. Lewis was told that he has to keep the information quiet and continue the merger with Merrill Lynch, the Feds also told him that breaking off the merger would crash the stock market and financial system and they would hold him responsible. Mr. Lewis was probably worried about more than just losing his job.

Efficient Market?

While I am no firm believer in the efficient market hypothesis, I do question whether it is worth the time and effort to try beating the market. If only mutual fund managers would stop trying:

Over the five year market cycle from 2004 to 2008, the SPIVA scorecard shows that the S&P 500 outperformed 71.9% of actively managed large cap funds, the S&P MidCap 400 outperformed 75.9% of mid cap funds, and the S&P SmallCap 600 outperformed 85.5% of small cap funds. These results are similar to that of the previous five year cycle from 1999 to 2003.

For the vast majority of people who don't have the time or patience to try to beat the market, low cost index funds are obviously the way to go.

And for those who think they can beat the market: good luck. When you take into account the costs of trading (commission, spreads), you are starting from a losing position. Add to that the opportunity cost (how much money could you make or how much fun would you have if you didn't spend th time trading) and trading doesn't seem to be a profitable venture.

Chauncey Gardner for President

I said many times during the election that Barack Obama ran as a modern day Chauncey Gardner.

Now, Obama senior adviser David Axelrod said: "You plant, you cultivate, you harvest. Over time, the seeds that were planted here are going to be very, very valuable."

David Axelrod's statement could have easily been said by Chauncey Gardner. If you have not yet seen Being There, I highly recommend it.

President Obama is black?

EUGENE ROBINSON: "Not even three months have passed since President Obama's historic inauguration, and already it tends to slip the nation's collective mind that the first black president of the United States is, in fact, black."

I don't know about everybody else, but I never cared about Barack Obama's race. I based my vote on the candidates' positions, character, qualifications, and experience. It made me sick to listen to all those people talk about the "historic" election and inauguration. What was so historic about it? We've been electing Presidents for over 200 years and this election was little different from those that preceded it. The only thing "historic" about it was that many people voted for a candidate to prove to the world, the country, and themselves that they are not racist. I already knew I was not racist and didn't feel the need to prove it. I am glad to see those on the left will finally "focus on Obama's ability, not his color," though I am not too sure how able he is based on his performance so far.

GM bankruptcy?

The Obama's administration's leading plan to fix General Motors Corp. and Chrysler LLC would use bankruptcy filings to purge the ailing companies of their biggest problems, including bondholder debt and retiree health-care costs, according to people familiar with the matter.

For months, we libertarians have been saying to let GM go bankrupt. The lefties called us crazy and talked about all the jobs that will be lost. Somehow, I doubt they will attack President Obama with the same level of anger, if at all. In the mean time, the taxpayers could have saved tens of billions of dollars had we let them go bankrupt.

The government solution

Geithner on the Sunday talk shows: "The market will not solve this."

Yes, of course the market will not solve this economic crisis because it is not being given a chance. Except for the deregulation or Reagan in the early 1980s, the market hasn't been allowed to work us out of a recession, depression, or panic in over nearly a hundred years (the last time was in 1921).


Geithner added: "And the great risk for us is we do too little, not that we do too much."

SARCASM ALERT: I totally agree! Federal government spending has gone from 19% to 28% of GDP, but that is not nearly enough. I think it should go to 40 or even 50%. Heck, why not 100%? Remember, "the great risk for us is we do too little, not that we do too much." So government spending accounting for 100% of GDP should alleviate that concern.

French workers on Thursday freed the manager of a factory run by U.S. company 3M held hostage in his office for more than 24 hours in a labor dispute over terms for laid-off staff.

French workers have every right to protest and express their grievances. But to hold a person hostage is clearly a violation of his liberty. How often do we hear these "liberals" (socialists really) go on about the government violating civil rights, yet here they have no problem doing so themselves?

We are seeing the same problem with AIG here in the US. Not only do we hear Senators, ACORN, and protesters attack AIG executives and their big bonuses, their spouses and children are afraid of being attacked.

Over in England, Fred Goodwin, CEO of Royal Bank of Scotland, had his house vandalized his kids bullied, and wife shouted at in the street.

The intolerant left is bringing back Liberal Fascism.

Postal chief says post office running out of money

The post office will run out of money this year unless it gets help, Postmaster General John Potter told Congress on Wednesday as he sought permission to cut delivery to five days a week.

"We are facing losses of historic proportion. Our situation is critical," Potter told a House panel.

The agency lost $2.8 billion last year and is looking at much larger losses this year. Reducing mail delivery from six days to five days a week could save $3.5 billion annually, Potter said.

Anybody looking forward to a health care system run by the government?

Who will buy the rest?

The Treasury bond market went wild yesterday after the Fed announced it will buy $300 billion of Treasury bonds. The 10-year Treasury rate fell from 3.00% to 2.53%, the biggest decline in years.

While $300 billion is a lot of money, the expected deficit this year is $1.75 trillion. So after the Fed buys their chunk, who will be buying the other $1.45 billion? The market got excited about yesterday's news, but the fundamentals are still working against Treasury bonds.

AIG bonuses

"The bill would apply to bonuses of people making more than $250,000 a year, and would apply only to payments from companies getting more than $5 billion from the federal government."

So now, everybody making more than $250,000 and getting bonuses at AIG will quit and find a job elsewhere. For example, if a trader makes tens of millions in profit for the company or a salesman brings in hundreds of millions in new client funds, that person will quit and find work for somebody willing to pay for his talents. In the end, the good employees, the ones earning big bonuses as a result of making huge profits for the company, will quit. And the bad employees who don't do well enough to earn a bonus will stay.