Saturday, December 7, 2013

The Tribute

The “Stupid Party” Strikes Again: Republicans Poised to Give Up Sequester Victory

Townhall ^ | 12/07/2013 | Daniel J. Mitchell 

There’s a saying in the sports world about how last-minute comebacks are examples of “snatching victory from the jaws of defeat.

I don’t like that phrase because it reminds me of the painful way my beloved Georgia Bulldogs were defeated a couple of weeks ago by Auburn.
But I also don’t like the saying because it describes what Obama and other advocates of big government must be thinking now that Republicans apparently are about to do the opposite and “snatch defeat from the jaws of victory.”
More specifically, the GOP appears willing to give away the sequester’s real and meaningful spending restraint and replace that fiscal discipline with a package of gimmicks and new revenues.
I warned last month that something bad might happen to the sequester, but even a pessimist like me didn’t envision such a big defeat for fiscal responsibility.
You may be thinking to yourself that even the “stupid party” couldn’t be foolish enough to save Obama from his biggest defeat, but check out these excerpts from Wall Street Journal report.
Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), chief negotiators for their parties, are closing in on a deal… At issue are efforts to craft a compromise that would ease across-the-board spending cuts due to take effect in January, known as the sequester, and replace them with a mix of increased fees and cuts in mandatory spending programs.
But the supposed cuts wouldn’t include any genuine entitlement reform. And there would be back-door tax hikes.
Officials familiar with the talks say negotiators are stitching together a package of offsets to the planned sequester cuts that would include none of the major cuts in Medicare or other entitlement programs that Mr. Ryan has wanted… Instead, it would include more targeted and arcane measures, such as increased fees for airport-security and federal guarantees of private pensions.
But the package may get even worse before the ink is dry.
Democrats on Thursday stepped up their demands in advance of the closing days of negotiations between Ms. Murray and Mr. Ryan. House Democratic Leader Nancy Pelosi (D., Calif.) brought a fresh demand to the table by saying she wouldn’t support any budget deal unless in included or was accompanied by an agreement to renew expanded unemployment benefits that expire before the end of the year—which would be a major threat to any deal.
Gee, wouldn’t that be wonderful. Not only may GOPers surrender the sequester and acquiesce to some tax hikes, but they might also condemn unemployed people to further joblessness and despair.
That’s even worse than the part of the plan that would increase taxes on airline travel to further subsidize the Keystone Cops of the TSA.
But look at the bright side…at least for DC insiders. If the sequester is gutted, that will be a big victory for lobbyists. That means they’ll get larger bonuses, which means their kids will have even more presents under the Christmas tree.
As for the rest of the nation? Well, you can’t make an omelet without scrambling a few eggs.
P.S. I suppose we should consider ourselves lucky that this looming agreement isn’t as bad as some past budget deals, such as the read-my-lips fiasco of 1990.

The State Causes the Poverty It Later Claims to Solve!

The Mises Daily ^ | 12/7/2013 | Andreas Marquart 

If one looks at the current paper money system and its negative social and social-political effects, the question must arise: where are the protests by the supporters and protectors of social justice? Why don’t we hear calls to protest from politicians and social commentators, from the heads of social welfare agencies and leading religious leaders, who all promote the general welfare as their mission?
Presumably, the answer is that many have only a weak understanding of the role of money in an economy with a division of labor, and for that reason, the consequences of today’s paper money system are being widely overlooked.
The current system of fractional reserve banking and central banking stands in stark opposition to a market economy monetary regime in which the market participants could decide themselves, without state pressure or coercion, what money they want to use, and in which it would not be possible for anyone to expand the money supply because they simply choose to do so.
The expansion of the money supply, made possible through central banks and fractional reserve banking, is in reality what allows inflation, and thus, declining income in real terms. In The Theory of Money and Credit Ludwig von Mises wrote:
The most important of the causes of a diminution in the value of money of which we have to take account is an increase in the stock of money while the demand for it remains the same, or falls off, or, if it increases, at least increases less than the stock. ... A lower subjective valuation of money is then passed on from person to person because those who come into possession of an additional quantity of money are inclined to consent to pay higher prices than before.[1]
When there are price increases caused by an expansion of the money supply, the prices of various goods and services do not rise to the same degree, and do not rise at the same time. Mises explains the effects:
While the process is under way, some people enjoy the benefit of higher prices for the goods or services they sell, while the prices of the things they buy have not yet risen or have not risen to the same extent. On the other hand, there are people who are in the unhappy situation of selling commodities and services whose prices have not yet risen or not in the same degree as the prices of the goods they must buy for their daily consumption.[2]
Indeed, in the case of the price of a worker’s labor (i.e., his or her wages) increasing at a slower rate than the price of bread or rent, we see how this shift in the relationship between income and assets can impoverish many workers and consumers.
An inflationary money supply can cause impoverishment and income inequality in a variety of ways:

1. The Cantillon Effect

The uneven distribution of price inflation is known as the Cantillon effect. Those who receive the newly created money first (primarily the state and the banks, but also some large companies) are the beneficiaries of easy money. They can make purchases with the new money at goods prices that are still unchanged. Those who obtain the newly created money only later, or do not receive any of it, are harmed (wage-earners and salaried employees, retirees). They can only buy goods at prices which have, in the meantime, risen.[3]

2. Asset Price Inflation


Investors with greater assets can better spread their investments and assets and are thus in a position to invest in tangible assets such as stocks, real estate, and precious metals. When the prices of those assets rise due to an expansion of the money supply, the holders of those assets may benefit as their assets gain in value. Those holding assets become more wealthy while people with fewer assets or no assets either profit little or cannot profit at all from the price increases.

3. The Credit Market Amplifies the Effects


The effects of asset price inflation can be amplified by the credit market. Those who have a higher income can carry higher credit in contrast to those with lower income, by acquiring real estate, for example, or other assets. If real estate prices rise due to an expansion of the money supply, they may profit from those price increases and the gap between rich and poor grows even faster.[4]

4. Boom and Bust Cycles Create Unemployment

The direct cause of unemployment is the inflexibility of the labor market, caused by state interference and labor union pressures. An indirect cause of unemployment is the expansion of the paper money supply, which can lead to illusory economic booms that in turn lead to malinvestment. Especially in inflexible labor markets, when these malinvestments become evident in a down economy, it ultimately leads to higher and more lasting unemployment that is often most severely felt among the lowest-income households.[5]

The State Continues to Expand


Once the gap in income distribution and asset distribution has been opened, the supporters and protectors of social justice will more and more speak out, not knowing (or not saying) that it is the state itself with its monopolistic monetary system that is responsible for the conditions described.
It’s a perfidious “business model” in which the state creates social inequality through its monopolistic monetary system, splits society into poor and rich, and makes people dependent on welfare. It then intervenes in a regulatory and distributive manner, in order to justify its existence. The economist Roland Baader observed:
The political caste must prove its right to exist, by doing something. However, because everything it does, it does much worse, it has to constantly carry out reforms, i.e., it has to do something, because it did something already. It would not have to do something, had it not already done something. If only one knew what one could do to stop it from doing things.[6]
The state even exploits the uncertainty in the population about the true reasons for the growing gap in income and asset distribution. For example, The Fourth Poverty and Wealth Report of the German Federal Government states that since 2002, there has been a clear majority among the German people in favor of carrying out measures to reduce differences in income.

Conclusion

The reigning paper money system is at the center of the growing income inequality and expanding poverty rates we find in many countries today. Nevertheless, states continue to grow in power in the name of taming the market system that has supposedly caused the impoverishment actually caused by the state and its allies.
If those who claim to speak for social justice do nothing to protest this, their silence can only have two possible reasons. They either don’t understand how our monetary system functions, in which case, they should do their research and learn about it; or they do understand it and are cynically ignoring a major source of poverty because they may in fact be benefiting from the paper money system themselves.


It is neither an accident of history nor an inevitable result of being an "advanced" economy that the financial sector of the economy has grown all out of proportion to the others. It is simply that, when making money by speculating on money becomes more profitable than producing consumable goods, people will do so.
There would be no investment of money in money if its quantity was stable and its purchasing power constant. 

Running From ObamaCare

Wall Street Journal ^ | 12/06/13 | Jason L. Riley 

Many Democrats up for re-election next year have to find some way to defend their past support for ObamaCare. A new campaign spot for Democratic Sen. Kay Hagan of North Carolina hints at how some candidates might try to pull this off.

**SNIP**

The goal here seems to be to defend the law's more popular provisions without ever using the words "ObamaCare" or "Affordable Care Act." "The ad focuses on stressing Hagan's support of aspects of ObamaCare—without once mentioning the law by name," explains the Hill newspaper. Don't be surprised if other Democratic candidates, particularly in red states that President Obama lost last year, employ a similar midterm election strategy in 2014. ObamaCare is more unpopular than ever, and support continues to fall.
(Excerpt) Read more at online.wsj.com ...

Obama Is The Danger Constitution Was Designed To Avoid

Investor's Business Daily ^ | December 7, 2013 | IBD EDITORIALS 

Executive Orders: A liberal constitutional scholar warns of the concentration of power not only in the hands of one branch of government but in a single man who ignores the Constitution and acts of Congress on a whim.
As the story goes, Benjamin Franklin emerged from Independence Hall at the close of the Constitutional Convention in Philadelphia on Sept. 18, 1787, when a woman asked, "Well, Doctor, what have we got, a republic or a monarchy?" Franklin is said to have replied, "A republic, madam — if you can keep it."
The Founders designed a system of checks and balances among three branches of government that was based on the consent of the governed. The power grab that is ObamaCare, nationalizing one-sixth of the economy, is just the latest example of an increasingly imperial presidency that ignores the Constitution, the will of Congress, the laws sworn to be faithfully executed and the will of the people who never wanted it in the first place.
Rep. Steve King, R-Iowa, recently noted to Fox News' Sean Hannity how President Obama "extended the employer mandate for a year, even though the law says 'shall commence in each month after December of 2013.' He extended the individual mandate, stretched that out and now the small-package plans. There's at least three times that he's violated the Constitution with ObamaCare."
When confronted with his lies that under ObamaCare you could keep your plan and doctor if you like them, and millions were losing the coverage they liked, the president held a press conference where he decreed that insurance companies could violate the "law of the land" and reissue policies that did not contain Obama-Care's 10 essential mandates, if only for a year.
(Excerpt) Read more at news.investors.com ...

Does smoking pot cause man boobs?

CNN ^ | December 5, 2013 | Dr. Anthony Youn 

(CNN) -- A young man in his 20s -- let's call him George -- sits across from me in the exam room.
"Dr. Youn," he says, "I have man boobs."
I notice a not-so-unfamiliar smell wafting from his body. It's the same odor that floated my way during a rock concert I recently attended.
"How long have you had a problem with this, George?"
"Hard to say. But it seems to have gotten worse over the past year or so."
"George, the first thing you need to do is stop smoking pot. Marijuana could be causing your man boobs."
(Excerpt) Read more at edition.cnn.com ...

After Snubbing Thatcher Funeral, Obama and Michelle to Visit South Africa for Mandela

Breitbart ^ 

On Friday, the White House announced that President Obama and First Lady Michelle Obama would travel to South Africa next weeks to pay their respects to Nelson Mandela. Obama has already announced that the White House will fly the flags at half-staff though December 9 in Mandela’s honor.
When former British Prime Minister Margaret Thatcher died, President Obama did not lower the White House flags, nor did he attend her funeral, instead sending ex-Secretaries of State George Shultz and James Baker III.
(Excerpt) Read more at breitbart.com ...

41% of Net New Jobs in November Were in Government

CNS News ^ | December 6, 2013 | Terence P. Jeffrey 

(CNSNews.com) - Federal, state and local governments hired a net additional 338,000 workers in November, equaling 41 percent of the total of 818,000 net additional jobs created in the United States during the month.
At the same time, the unemployment rate for government workers fell from 4.4 percent in October to 3.2 percent in November. (The overall national unemployment rate fell from 7.3 percent to 7.0 percent.)
- See more at: http://www.cnsnews.com/news/article/terence-p-jeffrey/41-net-new-jobs-november-were-government#sthash.lZxkLG6e.dpuf
(Excerpt) Read more at cnsnews.com ...

Realizing the lies of ObamaCare

Pittsburg Tribune ^ | Byron York 

In April, the Real Clear Politics' average of polls showed 47 percent of Americans opposed ObamaCare, while 41 percent supported it — a 6-percentage-point edge for opponents of the president's health care law, which at the time was still months away from implementation.
The latest average of polls, less than two months into the law's rollout, shows 57 percent opposing ObamaCare, with 38 percent supporting it — an enormous 19-point gap between opponents and supporters.
For years, GOP warnings about ObamaCare were about something that had not yet arrived. People had not experienced it, did not have friends who had experienced it and didn't fully understand what it was. Many tuned out the Republican alarms.
Now that has changed. Millions of Americans are unhappy with what they have experienced under ObamaCare — canceled policies, higher premiums and sky-high deductibles. They also are much more likely to believe predictions of future problems. They've seen what has already happened and now know it can get worse.
So how can it get worse? So far, ObamaCare has upended the individual market for health insurance, which covers about 10 million people. The next step, according to the respected health care analyst Robert Laszewski, will likely come in the small-employer market, meaning businesses with anywhere between two and 50 employees. That covers about 45 million people.
Under ObamaCare, the small employers who offer their workers health coverage will be “required to comply with the same essential benefit mandates, age-rating changes and pre-existing condition reforms the individual market faces,” Laszewski says. “That means essentially all small-group policies cannot continue as they are — they have to be discontinued.”
In the small-group market, Laszewski predicts many employers will use a feature in the law that allows them to keep their current plans for about a year. But then: “They will likely increase employee premiums and deductibles to keep the wolf from the door for maybe another year.” And after that: They will “hope for a rescue party.”
It has become impossible to defend President Obama's promise that his health care scheme would make the system work “better for everybody.” It's also impossible to defend his claim that ObamaCare would “cut the average family's premium by about $2,500 per year.”
The unavoidable truth is that ObamaCare will hurt millions of Americans; the only question is how many.
“The redistribution of wealth has always been a central feature of the law,” writes The New York Times' John Harwood. “Throughout the process, (the law's authors) knew that some level of redistributing wealth — creating losers as well as winners — was inescapable.”
The problem is, President Obama and his Democratic allies neglected to tell the public.
In 31⁄2 years, millions of voters, no matter what doubts they might have had, thought it best to give ObamaCare a chance to work. That's why they didn't respond to the GOP's dire warnings. But now they've seen what ObamaCare can mean in their lives. And they won't be buying any more promises.

Obama admin: It’s now ok for wind turbines to kill eagles!

Michelle Malkin ^ | 12/6/2013 | Doug Powers 

News flash: You’re now allowed to kill bald eagles, but only if the people who care more about the earth’s inhabitants than you do consider your purpose just.
We’re used to end of the week document dumps, but this is more like a Friday eagle drop:
The Obama administration said Friday it will allow some companies to kill or injure bald and golden eagles for up to 30 years without penalty, an effort to spur development and investment in green energy while balancing its environmental consequences.
The change, requested by the wind energy industry, will provide legal protection for the lifespan of wind farms and other projects for which companies obtain a permit and make efforts to avoid killing the birds.
[...]
Under the change announced Friday, companies would have to commit to take additional measures if they kill or injure more eagles than they have estimated they would, or if new information suggests that eagle populations are being affected. The permits would be reviewed every five years, and companies would have to submit reports of how many eagles they kill. Now such reporting is voluntarily, and the Interior Department refuses to release the information.
So desperate has the administration become to keep perpetuating the “green” sham that eagle sacrifice has now been approved. Meanwhile, if you accidentally kill a spotted owl after chopping down a tree, you can still go to jail (a year for the owl, six months more for the tree, and three additional if it fell on a snail). Unless of course you can convince the administration you did it in order to put up a wind turbine that somehow benefited a favored campaign donor.
Before long it might be legal to dispose of batteries by dumping them in the river, but only if the batteries came from electric cars.Anything to save the planet.