Monthly Archives: February 2012

And This from the Fourth Branch of the Federal Government

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Victoria McGrane and Jon Hilsenrath write in The Wall Street Journal:

The Federal Reserve has operated almost entirely behind closed doors as it rewrites the rule book governing the U.S. financial system….

Hmm….

Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. In the process it is reshaping the U.S. financial industry by directing banks on…what kind of trading they can engage in and what kind of fees they can charge retailers on debit-card transactions.

It’s hard to have such arrogance when the public is listening in.

But some would disagree with the secretiveness.  Sheila Bair, ex-Chairwoman of the FDIC, suggests

People have a right to know and hear the discussion and hear the presentations and the reasoning for these rules.  All of the other agencies which are governed by boards or commissions propose and approve these rules in public meetings.  I think it would be in the Fed’s interest to do so as well.

Naturally, the Fed insists that there’s nothing wrong with the secrecy.  Fed Governor Daniel Tarullo says with a straight face that open meetings aren’t always the most effective means to increasing public understanding, and they aren’t a gauge of regulators’ work.

You can have a scripted meeting that does not show any engagement at all….

But this is just a red herring.  Scripting is a hazard of all public meetings, not only the Fed’s.  But more to the real point, this argument elides the fact that there’s no increase in public understanding, either, from secret meetings, nor do such closed-door meetings provide any gauge at all of regulators’ work.

Open meetings could also strain the already busy schedules of top Fed officials. The Fed currently has 250 separate rule-writing projects under way.

There’s a hint there, and it has to do with all those regulations and regulation-writing exercises.

For whom do these guys think they work?

The New American Dream

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Don’t dream big, anymore.  Don’t reach for the stars, anymore.  Don’t even reach for the moon, much less Mars, or beyond.

Dream small.  Live small.  That’s the new American Dream, Obama style.

President Obama tells us to longer believe, for instance, our 50-year old dream “that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”  President Kennedy had gone on:

We intend to be first.  In short, our leadership in science and in industry, our hopes for peace and security, our obligations to ourselves as well as others, all require us to make this effort, to solve these mysteries, to solve them for the good of all men, and to become the world’s leading space-faring nation.

No more.  Now we’re begging rides into earth orbit from our rivals.  And the viable Republican candidates for President aren’t any better than Obama in this; although Governor Romney at least would keep government out of the way of private enterprise pursuing these goals.

What President Obama says is this:

Folks don’t have unrealistic ambitions. They do believe that if they work hard they should be able to achieve that small measure of an American Dream.

“That small measure.”  Umm, yes, we do have large, even unrealistic, ambitions.  Most of us haven’t, in fact, given up.  We do still have—and work toward—large dreams.  That’s what entrepreneurialship is all about, for instance, as well as going into space.  Far out into space.  We’ve just given up on you, Mr Obama.

Your message, though, is made for the times as you would have us believe they are, permanently, with our country emerging, despite your policies and spending, from recession.   But most of us understand that it’s now three years since the end of the current recession, and you’re still telling us to think and play small.  Most of us understand that Kennedy made his articulation of the American dream just three months after the end of the 1960-1961 recession.

Vanderbilt University political science professor John Geer suggests

[Obama] can’t paint too rosy a scenario because things aren’t that rosy.  He’s got to come up with a theme that appeals to voters, especially middle-class voters, alleviates their fears and gives them reason to believe the future will be better.

And yet, Kennedy did just that—while suggesting that Americans had, and should expect to have, bigger aspirations.

No longer do our incumbent leadership inspire: “Ask not what your country can do for you; ask what you can do for your country.”  Now they promise: “Ask not you can do for your country; ask what your government can do for you.”

Of course, there were fewer demands on our dollar or on our tax dollar in Kennedy’s day.  When he talked about our aspirations, the modern welfare state of Medicare, Medicaid, Social Security, and Obamacare hadn’t been built yet.

Another Lesson from the European Model

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Here’s the present situation in Greece—it really is this apocalyptic.  Children are street-begging for food, and adults are dumpster-diving for food as soup kitchens close their doors on people because the kitchens have run out.  Professional talent is leaving the country for foreign work, and others are squirreling their money away in foreign bank accounts.  Medecins Sans Frontieres is reporting a return of malaria—and so the exposure of Europe generally to this once-eradicated disease.

University of Athens economist, Panagiotis Petrakis, describes other aspects of the economic failure:

…standard of living down, by as much as 30 per cent; bank deposits that have not been spirited out of the country are dwindling; almost 70,000 businesses folded in 2010 and bankruptcy is stalking more than 53,000 of the remaining 300,000; unemployment, 25 per cent – but youth joblessness is 47 per cent and rising; a quarter of the population living in poverty; homelessness, up 25 per cent, with well-educated youngsters accounting for much of the rise.  Petty crime, doubled.

Greece—and Portugal, Spain, and Italy; although Greece is the farthest down the path—is demonstrating the results of a welfare state running out of other people’s money.  The stimulus money is fully expended, and there are no positive results; only failure: competitiveness has disappeared into an overwhelming national debt, and with the loss of prosperity from that competitive fire, any ability to heal the economy—to repay that debt—is sorely constrained.  Corruption—crony capitalism—is becoming rampant.

Greece, like Detroit, and the US, like Greece, are gravely wounded by the policies of welfarism, however disguised by pretty words of “everyone gets a fair shot.”  Yet our own political elite still want to double down on their failed spending, taxing, borrowing—wealth redistribution—policies by imposing yet higher taxes, increasing spending even more, and expanding our debt explosively beyond its current already unsustainable levels.

Though Europe’s economies are dying, the collective mind of its political elite is still gripped patterns of thought and modes of analysis that were hatched in another era.  And so it is here, where Progressive policies, born in the failed New Deal, continue to hold sway and continue to fail today.

h/t to Belmont Club

Oil and the Economy

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Here are some numbers on the impact of oil in our economy—and so why the government’s oil policy is important to our economic future.  These data have been collected for a Fox News article on a related subject.

Our economy grew at an anemic 1.7% for 2011.  This performance is especially poor in context: that rate did not come at the end of an extended period of prosperity, but at the beginning of a “recovery” from an especially deep recession—a time when growth normally is much stronger, in the 5%-8% range.

Global oil demand is expected to increase by 1.5% (to 89.25 million barrels a day) in 2012, and against this backdrop, the price of North Sea oil (comparable to Middle east oil, but which supply is more stable) is up 11% over last year, to $119 per barrel, while oil produced in Texas is up 19% to $103 per barrel.  This is apart from Iranian shenanigans.

This has driven gasoline prices, nationally, to $3.53 a gallon, up a quarter of a dollar just since the start of 2012, and it could well go $4.25 by April—just in time for the summer driving season, such as it will be.  That’s also up nearly $1.65 per gallon since the 2009 beginning of the present administration.

And the money (sorry) datum: each 25-cent jump in the price of gasoline over the course of a year represents an annual total of $35 billion that’s spent on gasoline and so is not available for use in other parts of the economy. Those $35 billion equate, roughly, to a bit over a third of the cost of the just-passed payroll tax cut.  Thus, in President Obama’s three years, we’ve already had to spend that payroll cut on gasoline.  Indeed, just last year, we spent 8.4% of our household income on gasoline alone—double the per centage of 10 years ago.

Karl Rove, former senior advisor to President Bush the Younger, notes that

One out of every six Americans is unemployed, working part-time, looking for full-time work or so discouraged they’ve dropped out of the workforce altogether.

As the saying goes, work is somewhere else, and you get there in a car.

The government’s oil policy?  President Obama, through his campaign spokesman Robert Gibbs, insists

Our domestic oil production is at an eight-year high, and our use of foreign oil is at a 16-year low.  So we’re making progress.

Others, though, don’t see the increase, or the progress.  John Hofmeister, former CEO of Shell Oil and founder of Citizens for Affordable Energy, points out that national oil production today is 7 million barrels per day—down from 10 million a few short years ago.  Furthermore, Obama has killed the Keystone XL pipeline that, aside from the tens of thousands of jobs the pipeline’s construction would have represented, also would have brought nearly 625,000 barrels per day from Canada into the US.  The current oil policy’s negative impact on oil production only worsen our economy.

And Then There’s Free Speech

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There’s this from Matt Ridley concerning the effect of Internet anonymity on speaking freely.

It is now well known that people are generally accurate and (sometimes embarrassingly) honest about their personalities when profiling themselves on social-networking sites. Patients are willing to be more open about psychiatric symptoms to an automated online doctor than a real one. Pollsters find that people give more honest answers to an online survey than to one conducted by phone.

Ridley traces a path back to our (very distant) forebears.

In many monkeys and apes, face-to-face contact is essentially antagonistic. Staring is a threat.

And

For many primates, face-to-face contact carries a threat. When we’re online, we’re essentially faceless.

It would seem that we’re not bad, we’re just evolved that way.