Hey Stupid!

The Stupidest Day of the Year

2009-04-27T19:02:00.000-07:00

On April 15th I had a dream. In it, a haggard looking Uncle Sam emerges from a cloud of burning dollar bills and beckons toward three figures. They are, I see, the Vice President and two liberal journalists. Sam looks as if he hasn’t been getting much sleep lately and who can blame him. Sam waves a finger at each with a booming baritone voice and says “I want you….”. Each man salutes and cuts Sammy a check, their relief noticeable that this is all their needy Uncle required. Joe Biden pronounces them all patriots of the highest order and they walk off into the sunset to a chorus of fireworks and a musical score by John Phillips Sousa. I awoke in a cold sweat.

It was Biden, who, like a dream led the call on the campaign trail by pronouncing the paying of higher taxes to be a patriotic endeavor (http://www.msnbc.msn.com/id/26771716/). As tax day neared, journalists like Paul Begala (http://www.cnn.com/2009/POLITICS/04/15/begala.taxes/index.html?eref=rss_topstories) and Alan Colmes (http://foxforum.blogs.foxnews.com/2009/04/15/colmes_tea_party_tax_day/) joined the back slapping chorus chanting that paying taxes is patriotic and those who dare to question that wisdom are right wing nut jobs.

Paying taxes without comment makes you a patriot? That which is required under pain of imprisonment can hardly be our lofty standard for modern day patriotism, can it? The argument exemplifies the folly of our “participation medal” culture. You don’t get gold stars and a pat on the head for funding a bloated bureaucracy with a proverbial gun to your head. Say, if paying taxes is such a patriotic pleasure why don’t more nominees for cabinet positions try doing it? But I digress…

Begala is probably the most shrill faux patriot, criticizing the Bush administration and then stealing a page from their playbook. It is as if Begala took the age old Liberal refrain, “what about the children” and substituted a new noun. “George W. Bush and the Republicans cut taxes on the idle rich and put the screws to the working stiffs…How ‘bout protesting how little we give back to our Veterans.” As a working stiff and a Veteran who makes a decent enough living to qualify for AMT I know who put the screws to me. His initials weren’t GWB and the “illegal war” he was trying to fund was a bit east of Baghdad. Sometimes historical perspective is everything.

Casting stones at the Bush administration spending, while fun and generally correct, misses the point. It’s not some spending or some programs we are questioning anymore, it is all of them. Our Veterans receive shoddy treatment because government spending now encompasses not just the military and infrastructure, but every facet of American life. When you try to do everything you end up doing nothing well. We don’t need more spending but fewer programs on which to spend. Why do these people continually act as if there is one side to a balance sheet?

No Democrat or Republican in the last decade has seen a government program they didn’t like at least a little. At the end of a hard day in Washington, why get your hands dirty? Fixing problems is as easy as avoiding direct action, calling for more funding, cutting a check and hoping someone figures it out. I would prefer to keep my money and deploy it the best way I see fit. Not for politicians to throw at what is popular and expedient.

Last year the Bidens reported after tax income of $183,315. They paid $46,952 in federal taxes, $11,164 in Delaware and donated $1,885, about 1%, to charity. Is there any question who Joe feels is better at solving problems like hunger or homelessness? Support the grass roots efforts? Nah, give it to my Uncle Sam-he’ll figure out what is best. It reminds me of a joke I heard around April 15th. A bedraggled man knocks on the door of the Vice Presidential mansion. Joe Biden answer the door in his bathrobe and his hair is perfect. The man asks him for a donation to a local shelter for the needy. Joe unfurls an American flag from his pocket as the Star Spangled banner plays in the background. “Sorry pal….I gave at the office.”

Stupid with Chips and a Drink

2008-08-07T20:14:00.000-07:00

New Subway Job Goes Stale : Anger Management: Occasional Rants And Raves

This article is a good example of why many animals eat their young. Stupid factor 9.9/10
By Addison Herron-Wheeler courtesy of Fredricksburg.com

I usually don’t pick on the mentally retarded but that is more of a guideline than a rule…so I shall press on.

July 17, 2008 12:15 am

IT NEVER FAILS: Murphy's Law. When applying for jobs, the one place you do not want to call you back inevitably will. Nice to know that in this horrific economy we still have job that people have but don’t really want. I encountered this annoying fact applying for jobs in Richmond, when I landed one at the local Subway. In the immortal words of Drew Carey, there is a support group for people who hate their jobs. It is called everyone.

Of all the interesting, vibrant-looking places in my area that I could have worked, this was definitely my last choice. Which really says something about you, your attitude and your resume. But the only other places I had wanted to work told me it would be a few weeks or months, and I had to have something ASAP so that I could pay the rent. What, your subrpime mortgage already lead to a foreclosure?

At first glance, the job didn't seem as horrible as it could have been. I have plenty of experience making sandwiches and working in food service, so it wasn't hard at all. Thank god, you have skills. Now shut up and make me a tuna on rye. The man who hired me seemed nice enough, and I liked a few of my co-workers. I even got all subs at an employee discount, which made the delicious veggie sub I love cost mere chump change. I failed to take into account, however, my inability to function in this kind of a situation for very long and my disdain for the restrictions that come with employment at any fast-food restaurant. Restrictions? Like showing up on time and asking if I want chips and drink? Welcome to adulthood, its going to be a long trip so shut your mouth and enjoy the ride.

First of all, some of my co-workers whom I met later are not exactly savory. Something tells me you aren’t exactly the belle of the ball either. They are much older than me and don't seem to respect me at all, even though I am doing my best to comply with their every wish and to be the best employee I can be. Wrong, they don’t respect you because you are a sniveling little failure. The management also demands that I remove my lip rings while working--which is ridiculous considering how many people with piercings I serve every day. Hey, moron, I don’t care what the people buying the food are doing, I care what the people making the food are doing. So put on your hairnet, take out the lip ring and put on your plastic gloves. And where is that tuna on rye? This makes things a bit difficult due to the fact that I don't have the extra money right now to go out and buy spacers to put in the holes while I'm at work. Then shut the hell up and work until you have some money.

The one fellow employee that I really liked has crumpled under the awful pressure and quit, and I am being paid minimum wage--a fact I did not learn until the first paycheck came out. Ah yes, the awful pressure of the boardroom or trading pits? Laughable until you’ve gone eyeball to eyeball with a meatball sub and lived to tell about it.

But what makes the situation really unbearable is not the employees at Subway or even the stupid rules and pay, but the fact that I am barely getting any hours at this terrible job. At places like this, a worker is just a commodity, serving the functions of the business--not a person with needs that should be met. Maybe if you were better educated, had a better attitude and din’t show up to work looking like a circus freak, better things would come your way. Six hours a week is not exactly going to cut it for someone who asked for more than 40 hours and has rent and bills to pay. I worked more hours than that a week as an intern at The Free Lance-Star, a job that was supposed to be educational and never a means to earn a living. Too bad, you are just stupid enough to make it as a journalist.

To top it all off, the fast-food industry is wasteful and goes against even the most basic environmentalist practices. Mishandled food or food that can't be served is thrown away, not saved to be taken home by the workers. Something tells me a guy like you makes enough mistakes without the restaurant rewarding you for it. Each sub is wrapped in paper and then placed into a small plastic bag--basically the equivalent of a grocery store giving customers one bag for each grocery. Even the apples we sell come sliced and packaged in plastic, although they would be perfectly sellable without any of that. In short, it is all about the profit and not about the overall good of society. Ah, the old "more packaging for more profit" trick. Please, skip the next hackey sack tournament and check in your Economics 101 class, okay sport?

So what can I do about all of this? Well, apart from complaining in my column and trying to get another job as soon as possible, not much. In actuality, probably nothing at all given your track record of abysmal failure, but good luck. I just have to keep going to work and hoping for the best. And maybe, some day, I will start my own restaurant, just to combat all the evil that I see in the fast-food industry. But until then, I will have to try to content myself with the fact that at least I am getting paid. Evil capitalism wins again…insert maniacal laughter here. Something tells me your restaurant is just a pipe dream and that forty years from now when you are poor and alone you will look back on these years of your life and say "I really wish I hadn't been such a douche".

Addison Herron-Wheeler is a rising freshman at Virginia Commonwealth University. I don’t know anything about VCU except that my children will be strictly forbidden from attending there. They will be encouraged, however, to road trip there and incessantly mock the workers at Subway.

This article is proof positive of our need for more birth control, legal abortions and re instituting the draft.

A Parody of Stupidity

2008-07-23T19:50:00.000-07:00

Unfortunately one of these articles is real, and it is the first one. As this one combines finger pointing, shirking responsibility and involving lawyers it's stupidity factor is off the charts.

California, Illinois File Lawsuits Over Countrywide's Practices
By RUTH SIMON

June 25, 2008 12:25 p.m.

California's attorney general has filed a civil lawsuit alleging that Countrywide Financial Corp. engaged in deceptive advertising and unfair competition by pushing borrowers into risky loans. The 46-page complaint also names Countrywide chairman Angelo Mozilo and the company's president David Sambol.
"Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market," California attorney general Edmund G. Brown said in a statement.
The lawsuit alleges that Countrywide "viewed borrowers as nothing more than the means for producing more loans" and originated loans "with little or no regard to borrowers' long-term ability to afford them and to sustain homeownership." These practices "were created and maintained with the knowledge, approval and ratification of" Mr. Mozilo and Mr. Sambol, it alleges.
The Illinois attorney general's office, which began an investigation into the business practices of Countrywide last fall, also filed a civil suit against Countrywide and Mr. Mozilo on Wednesday. In a draft of the Illinois complaint obtained Tuesday, the state alleges that Countrywide engaged in "unfair and deceptive practices" in the sale of mortgage loans. The 78-page document says the company loosened its underwriting standards, structured loans with "risky features" and engaged in "marketing and sales techniques" that incentivized employees and mortgage brokers to push loans whether or not homeowners had the ability to repay them.
Illinois Attorney General Lisa Madigan says she is asking that all Countrywide loans originated using "unfair and deceptive" practices be rescinded or modified in some way, even if Countrywide has to repurchase the loans. She is also asking that her office be given 90 days to review any loans that are currently in foreclosure or that are moving toward foreclosure.
The suits came as Countrywide shareholders approved Wednesday the company's takeover by Bank of America.
Write to Ruth Simon at ruth.simon@wsj.com

California Files Suit Against “Stupid Residents”

By John Manfrintinginson, A.P.

July 1st, 2008

California's attorney general has filed a civil lawsuit alleging that thousands of residents conspired to accept mortgage loans that were unaffordable and of questionable value to those who ultimately assumed ownership of them as part of Collateralized Debt Securities. The 150 page complaint lists numerous defendants throughout the state and investigators are close to proving collusion, the attorney general’s office said.

“The three or four hundred hard working residents of this state are embarrassed by the stupidity of some of our residents. We believe that the massive scope of this operation indicated collusion on the part of stupid people in this state and across America,” Edmund Brown said in a statement.

“The Attorney General has had it,” said Michael Westfield, a low lever staffer who spoke on condition of anonymity. “We think that these stupid people got together and planned out how to do this to Wall Street. It appears to us that many of them met at Wal Mart and they may have exchanged secret messages during television shows such as The View and Dancing With the Stars. It was a widespread conspiracy and though these people are stupid, they appear very organized.”

Celebrating the Truly Stupid Cost of Government

2008-07-17T20:28:00.001-07:00

Hooray! Wake up tomorrow and go make money for yourself for the first time all year.

Stupid Factor: 4/10.

July 16, 2008
Happy Cost of Government Day

By Grover Norquist

This year Americans have worked until today, July 16, to pay for the total costs of federal, state and local government. This is 197 days of the year consuming 53.9 percent of national income. Over the past 22 years, in only four years (1982, 1983, 1991 and 1992) did Cost of Government Day fall later in the year.

Federal spending will consume 83.7 days. State and local spending will consume 50.5 days effort. Federal regulations cost 4l.7 days and State regulations cost 20.9 days. The spending data is precise, the regulatory burdens are understated.

Compared to when George W. Bush assumed the presidency in 200l, federal spending now consumes an additional three days of your life in 2008. The burden of federal regulations increased by one day after having remained stable as a percentage of the economy for the previous four years.

State and local spending increases cost Americans six additional days since 2003. Since the election of more liberal governors and state legislators in 2006, state spending has increased by 13.5 percent relative to the general economy.

Not all states are the same. Connecticut citizens with a more expensive state and local government burden will have to wait an additional two weeks for their cost of government day: July 31. Virginians work two days longer than the average American and Maryland citizens toil a full work week more until July 21.

Federal spending has increased $867 billion from 2001 to 2008 or stepping past September 11, federal spending has increased $570 billion dollars from 2003 to 2008. Since the 2003 tax cut on capital gains and dividends, the economy has grown by $2.9 trillion, federal revenues have shot up $785 billion. But had the federal government limited federal spending to grow only as rapidly as the economy since 2000, the budget would have been in balance by 2006 and in surplus today.

Politicians and pundits tend to focus on the federal deficit. But the deficit is the uninteresting and unimportant number that is the difference between two very interesting and important numbers: total government spending and total taxes raised. A government that costs one hundred dollars of spending where ninety dollars are taken in taxes and ten are borrowed is as expensive and burdensome as one where the government takes and spends all hundred. No money is freed up for the economy by taking an additional ten in taxes. The true cost of government, whether paid for today through taxation or borrowing, is total government spending plus the regulatory burden paid by consumers in higher prices.

The last fifteen years have been a unique period in American history. Since the 1993 Clinton tax increase that passed without a single Republican vote--there has not been a net tax increase passed by Congress and signed by the president. Fifteen years without a legislated tax hike.
That is the longest period in American history going back to George Washington. Since 200l, there have been 15 tax cuts. Some small. Most temporary.The pro-growth tax cut of 2003 created economic growth that by2008 increased the number of American jobs by eight million, real per capita income grew $2,887, the stock market increased by $3.7 trillion in value and federal revenues jumped by $785 billion. Those tax cuts lapse in January 2011 and already the markets are anticipating losing those gains.

The next president and Congress will not only need to maintain the relatively pro-growth lower tax rates on individual income and investments, but -- as Cost of Government Day painfully reminds us - deal with the true costs of government: total government spending and the regulatory burden.

Norquist is president of Americans for Tax Reform and author of Leave Us Alone " Getting the Government’s Hands Off Our Money, Our Guns, Our Lives.
Page Printed from: http://www.realclearpolitics.com/articles/2008/07/cost_of_government_day.html at July 17, 2008 - 08:35:40 PM PDT _uacct = "UA-31527-1"; urchinTracker();

Thanks Grover for ruining my Tuesday but making my Wednesday that much sweeter.

Wishful and Stupid Thinking?

2008-07-17T19:56:00.000-07:00

A baseless tirade of whining about how bad things are as the author drinks a latte and taps away on his Mac. Hope he was sitting at one of the Starbucks that is closing down.

Stupid Factor 6.5/10

Americans may be losing faith in free markets

Things are hard all over the financial landscape, and politicians and experts are now looking with favor at more, not less, government involvement in the economy.

By Peter G. Gosselin, Los Angeles Times Staff Writer July 16, 2008

WASHINGTON -- For a generation, most people accepted the idea that the core of what makes America tick was an economy governed by free markets. And whatever combination of goods, services and jobs the market cooked up was presumed to be fine for the nation and for its citizens -- certainly better than government meddling.

Spurred by the continued housing crisis, turmoil in financial markets, spiking oil prices, disappearing jobs and shrinking retirement savings, the nation and its political leaders have begun to sour on the notion that the current market system is the key to a fair, stable and efficient society. Yeah, forget a couple hundred years of free markets bringing us from itinerant farm workers to 40 hour a week whining babies with flat screen satellite television in high definition. That was an abysmal failure based on the last 12 months.

"We're at a hinge point," said William A. Galston, a senior fellow at the Brookings Institution in Washington who helped craft President Clinton's market-friendly agenda during the 1990s. "The strong presumption in favor of markets, which has dominated public policy since the late 1970s, has been thrown very much into question."Now, to a degree not seen in years, politicians and outside experts are looking with favor at more, not less, government involvement in the economy.Of course, Americans always grouse during troubled times. And as market advocates are quick to point out, the current run of bad economic breaks has yet to result in the throwing over of free-market principles in favor of some drastically different approach -- such as a government-directed economy.

"There may be a backlash against markets at the moment," acknowledged Kevin A. Hassett, economic studies director at the American Enterprise Institute in Washington and an advisor to presumed Republican presidential nominee John McCain. "But the backlash doesn't seem to be informed by any alternative view of how the world works."

Yet the sheer volume of setbacks that people have been dealt has sent consumer confidence to some of its lowest levels in half a century, according to Reuters/University of Michigan surveys. A remarkable 84% of Americans are convinced that the nation is on the "wrong track," according to a recent Gallup poll. In just the last week, the financial markets have provided ample new evidence that markets are not working smoothly. Washington had to ride to the rescue of two government-chartered mortgage giants -- Fannie Mae and Freddie Mac, which hold or guarantee nearly half of the nation's $12 trillion in mortgage debt -- after investors all but extinguished the pair's market value amid fears that falling home prices would push them into insolvency. Meanwhile, federal regulators seized IndyMac Bancorp, a $32-billion mortgage lender based in Pasadena, in what regulators called the second-largest bank failure in U.S. history. And the already battered stock market took another sharp dip. The fact that experts keep pushing back the date when conditions may improve and the failure thus far of any national leader -- including either of the major-party presidential candidates -- to offer a convincing vision of how America will make its way back to sustained prosperity suggest that the current crisis will probably be very different from other recent economic bad patches. So may Americans' reaction to it. Even the Bush administration, which took office arguing that the Social Security crisis could be solved, in part, by tying some of retirees' future benefits to Wall Street, has begun advocating more government regulation of financial markets.

When Fannie Mae and Freddie Mac, which are government-chartered but investor-owned, began to teeter last week, the administration quietly went to work on possible government action. "If the pendulum swung away from government toward much greater confidence in markets during the last generation, the pendulum is clearly swinging back again now," said Daniel Yergin, whose 1998 book with coauthor Joseph Stanislaw, "The Commanding Heights," chronicled the worldwide spread of the free-market credo."Everything is weighing in at the same time, and that affects how people view markets and government," Yergin said."Nobody in this country really believes in unfettered free markets, and nobody really believes in socialism," said UC Davis historian Eric Rauchway, but economic crises of the past have produced constituencies favoring the reining in of markets and regulation of the economy -- constituencies that ultimately grew large enough to produce change.

Consider just a few of the things that are pushing people in that direction now: The price for a gallon of regular unleaded gasoline has nearly doubled in the last year, while that for a barrel of crude oil has more than doubled, cutting short Americans' love affair with gas-guzzlers and driving the nation's trucking, auto and airline industries into deep trouble. Most mainstream economists assert that these increases are simply the logical outcome of booming global demand meeting limited global supply. But the price run-ups seem out of whack with demand, which has increased only about 1% worldwide. Hey stupid, this is not a one for one relationship. Since production (supply) is practically static in the short term, prices must rise enough for 1% of consumers to stop buying it. 2-3 cents a gallon doesn’t logically seem like that kind of number does it? Please America, be smarter than this.

The mismatch has fueled suspicion among many Americans and their political leaders that the third financial bubble of the decade -- after tech stocks and housing -- is underway, this time in energy. Both presidential candidates have fingered market speculators, rather than the forces of supply and demand, for helping drive up prices. What about the doubling of steel prices? Must be those speculators at work again right? Oops, turns out there is no futures market for steel. Anyone want one guess why prices are rising? Say it with me stupid presidential candidates: supply and demand.

At a recent hearing, Rep. John D. Dingell (D-Mich.) cornered the federal official whose agency regulates the market where oil futures are traded. "How is it that the market isn't working to the benefit of the consuming public?" the lawmaker demanded. Hey Dingle, how is it you managed to get elected with such a limited knowledge of economics and such lousy people skills? The agency has launched a number of studies to discover whether speculators are behind the price increases, the official answered."Don't tell me you're doing studies!" Dingell shot back. "You've spent more than a year sitting idly by" while oil prices jumped. And so have you. Thankfully.

At least half a dozen measures have been introduced in Congress to limit speculation or to tax oil company profits. Similar anger -- and similar legislative efforts to intervene in the marketplace -- can be seen in housing. While Americans have been accustomed to some fluctuation in the value of their homes, most expected their houses to rise in value over time. And for much of the last several decades, that's what happened. But not this year! Scandal! Betrayal! Lock the doors and find the perpetrator of this madness! How dare the price of my home decline in a year, this might be the end of television shows such as “Flip This House”.

But starting in mid-2004, the upward arc of house prices began to flatten, and by 2007 it was falling -- sharply. Prices, especially along the West and East coasts, have skidded as much as 16% during the last year alone, their steepest decline in two decades. Many analysts predict further slippage. In large part, the rise in house prices and the recent plunge grew out of an almost unregulated corner of the mortgage market -- the one for riskier loans. As with fuel, "the message that Americans are getting is that something went wrong with the markets and you got hurt," said economist Robert E. Litan of the Brookings Institution and the Kauffman Foundation of Kansas City, Mo. Yes, we tried to lend to some crappy credit risks because everyone said what a wonderful world it would be if everyone owned a home. Turns out many of you aren’t responsible enough and can’t be trusted. I’d like to take you all out and shoot you but I think we just won’t lend to you anymore. Oh well…

"With energy, it's the speculators. With housing, it's predatory lenders or crummy credit-rating agencies or stupid banks. We're not ready to throw out markets altogether," he said, "but we want government to do something about the excess." Stupid banks? How about stupid people asking for loans they can’t afford? Or is that a little too Phil Gramm for you? Let me also add my own scourge to the list-the stupid media. A similar pattern of hopes raised and hopes dashed shows up in global trade and retirement investing. Americans entered the new century convinced that "we had a new economy built on services and information technology that would let us win globally," said Harvard economist Robert Z. Lawrence. "The whole premise of globalization in the year 2000 was that it worked well for us and the other developed countries but that the developing countries would need help," Lawrence said.Today, virtually all those optimistic assumptions have been turned on their heads. Life sucks, go home and watch it unfold on your flat screen TV. "We've seen unprecedented growth in the developing countries, while the developed countries are being led into a slowdown by the United States," Lawrence said."We've found out that instead of services and information technology, it's all about oil and other commodities" that are not the nation's strong suit.

Finally, when it comes to investment, especially for retirement, recent years have brought unsettling disappointments as the stock market has failed to regain and maintain the peaks that it reached in 2000. An investor who put a dollar in a broad market index fund early in this decade not only would have made no money by today but would have lost a little of his initial amount.That's a far cry from the 1990s, when people told pollsters that they expected to make 15% annual gains indefinitely. That was equally as stupid as believing it will return nothing for the rest of time. Historians watching the nation's current economic and financial troubles say that just because Americans don't throw up their hands about markets and rush to an opposite pole, such as socialism, it doesn't mean that change isn't underway. As UC Davis' Rauchway pointed out, the devastating panics and depressions of the late 19th century eventually resulted in the progressive reforms of the early 20th century and, later, the New Deal of the 1930s. Today, Americans are not ready to throw out markets altogether, said economist Litan, but "what people may be demanding is New Deal lite." Nah, I demand that you all stop crying and go to work or school or whatever will make you stop believing that the last few months are bringing on Armageddon.

"When the going gets tough...the tough get, get, get a going"
-Billy Ocean

Snake Oil for the Stupid

2008-07-12T22:10:00.000-07:00

The following is commentary from the author. Stupid factor 0/10.

What Barrack Obama Thinks…Of You.

Much was made during primary season of Barrack Obama’s seemingly elitist view of Middle Americans who “cling” to guns and religion in an effort to deal with the changing world around them. Elitist? Maybe. But Obama’s problem isn’t that you are “clinging” to something, it is that you are “clinging” to the wrong things, at least in his mind.

In 2001 Obama made the following comment: “…I would argue that affirmative action is important precisely because those who benefit typically rise to the challenge when given an opportunity."[1] Note the use of the word “given”. In order for something to be given, someone has to also be the giver. Someone must bestow opportunity on another. To Obama, opportunity is not seized, taken, grasped or won. Opportunity is not the prize at the end of a long struggle or journey. To him, opportunity is a gift from someone else, a reward for simply hanging in there. Sure you can “rise to the challenge” but someone needs to tell you what that challenge is, right? You as an individual cannot possibly be counted on to get off the couch and seize the day, so someone needs to knock on your door, get you dressed and make sure you use the bathroom before our big trip to prosperity-ville. Its nonsense, of course, but it sells.

It sells, precisely because of the prosperity that Obama denies exists. The prevalence of flat screen TVs, cell phones and personal computers among the middle class not only demonstrates how far we have come as a society in the last 100 years, it gives people serious alternatives to work. My grandfather didn’t have American Idol to come home to so putting in overtime or going to school on the GI Bill at night were legitimate ways to spend his time. Today, we are so distracted with the niceties of life that we the ambition drive in neutral and wait for government to step in and provide the opportunities we used to go out and seek. At least, that is what Mr. Obama believes.

Where does Obama develop such beliefs? From us, of course. He extrapolates stories of struggle and personal failure to us as a nation. When a woman in Michigan says “…I have been poor, and I have had to struggle, so I should get special treatment." [2] Obama doesn’t ask, what have you done to improve your life? He asks, how can we help? How can we give you what you need to succeed? What kind of special treatment should your government provide that it hasn’t? One of my favorite comedian’s was the late Sam Kinnison who famously asked the starving people of Ethiopia why they lived in a desert and didn’t “go where the food” was? Shouldn’t the same question apply to those who are struggling in high tax, low employment areas like Ohio and Michigan? While we feel your pain, perhaps we should determine what is causing it before we try to fix it. Obama is a modern day snake oil salesman prescribing the cure for you symptoms without fully understanding the disease.

Obama doesn’t think there is any real fix to problems like those of people suffering in Michigan other than government programs. A recent Wall Street Journal interview summarized his thoughts: “While Sen. McCain has argued that tax cuts -- particularly on business -- spur growth, Sen. Obama rejected that as flawed economics. "I've seen no evidence that...would actually boost the economic growth and productivity," he said.” [3] Really? No evidence? Did Mr. Obama happen to swing through Texas at any point in the last couple of years? Has he noted that low tax Texas is gaining employers and residents while high tax states like the aforementioned Ohio and Michigan are losing both? Has the junior Senator from Illinois traveled abroad recently? Has he seen the prosperity in Ireland that has been driven by the lowest corporate tax rate in Western Europe? Did his Harvard education teach him to view these as mere coincidence?

The answer is that, very likely, Obama knows better. But he believes that you don’t. He thinks that you are oblivious to the real world experiments that show how high taxation drives away jobs and business. He believes that you feel like you are owed something and he is more than willing to promise it to you. Its easy to play Robin Hood this political season, promising to take from the wealthy and give to the poor. Because Obama can’t win if we cling to guns and religion. But he can and will win if we cling to big government.

Will Rogers said it best-“Even if you are on the right track you will still get run over if you just sit there.”

[1] http://online.wsj.com/public/article/SB121340482731674019.html?mod=special_page_campaign2008_leftbox

[2] IBID
[3] http://online.wsj.com/article/SB121365641014879041.html?mod=Leader-US

Stumping Without Stupidity

2008-04-16T17:28:00.000-07:00

The campaign speech you won't hear this election season...but should.

Stupid factor 0/10.

My fellow Americans, I know that you are suffering and in the words of William Jefferson Clinton: "I feel your pain". I know that some of you have lost manufacturing jobs to foreign workers and even though those are crappy jobs that I don't want my children doing I still feel your loss. And I know that others of you have lost at least 5% of the value of your 401K in these hard recent economic times and maybe twice of that in your home. And to help you through this time of intense trouble I am prepared to do...NOTHING.

That's right. I believe that you are strong enough to be competitive in a global marketplace and patient enough to survive a tumultuous stock market. I believe in capitalism, free markets, hot dogs at baseball games and apple pie a la mode (Yes, I know that is French but I can't be any less popular after this diatribe can I?) And I believe that trade barriers, government intervention and wealth redistribution are insulting and demeaning to you. They underestimate your ability to adapt and overcome. They are un-American.

You see, the founders of our country realized that, being human, we would try to tinker with the lives of our fellow citizens from time to time. That is why they instituted a series of checks and balances in an effort to make things very difficult to change. Therefore, if you want someone who represents the great history of our country in the tradition of Jefferson and Adams, someone who will gladly sit idly by and let free markets do their magic, well...I'm your man. If you want someone to create a government program to wipe your nose while you cry about how unfair the world is, vote for Obama. Or Clinton. Or McCain. It really doesn't matter because they are all better at running your life than you are. Just ask them.

When we were kids we traded baseball cards. And if you got two for one but both of you were happy with the trade, did it matter that the kid across from you was Chinese? No. Both of you benefited from the trade because you got what you wanted. If I want to do the same thing today with the Indian or Chinese grown ups then butt out. If you can't make something better or cheaper than the Chinese then get up earlier, stay later and get better at your job. Or go find something else to kick their ass at. But don't go whining to 60 Minutes and expect me to come riding in on a white horse named Uncle Sam with my dollar dispensing six guns. Because I think you can handle yourself. Sometimes I will be wrong about that. Some of you will fail miserably. So be it. I'd rather have a few of you fail and learn something from the experience than subsidize all of you. This would only encourage you to do...nothing. And lets be clear, doing nothing is my job. I'm with the government and I'm not here to help.

I'm Lost in the Blog, and I approved this message.

Hey Hey, Ho Ho...Stupid People Have to Go!

2008-03-27T21:23:00.000-07:00

Playing the blame game in NYC.

Stupid Factor: 8.5 / 10

Protesters enter Bear Stearns building in New York
Wed Mar 26, 2008 4:17pm EDT

By Karen Brettell

NEW YORK, March 26 (Reuters) - About 60 protesters opposed to the U.S. Federal Reserve's help in bailing out Bear Stearns (BSC.N: Quote, Profile, Research) entered the lobby of the investment bank's Manhattan headquarters on Wednesday, demanding assistance for struggling homeowners. Ah, the rhythmic beat of the human voice, the gentle swaying of massed humanity, the wafting scent of cannabis and body odor. Must be a protest.

Demonstrators organized by the Neighborhood Assistance Corporation of America chanted "Help Main Street, not Wall Street" and entered the lobby without an invitation for around half an hour before being escorted out by police.

"There are no provisions for homeowners in this deal. There are people out there struggling who need help," said Detria Austin, an organizer at NACA, an advocacy group for home ownership.
Bear Stearns employees were amused and perplexed, some taking pictures. One man in the lobby applauded. Its easier to pay for your house if you are working during the day and not bothering people by protesting at their office.

"Homeowners, that's more than $1 trillion (in mortgage debt), you're crazy," another man in a suit screamed at a protester on the street. Sir, please do not pollute this argument with facts. They get in the way of good stories about how "the man" is screwing everyone over.

The protesters blamed Bear Stearns and JPMorgan Chase & CoCo (JPM.N: Quote, Profile, Research) employees for helping fuel the mortgage crisis. Shouldn't we blame the people who aren't paying those mortgages? Or is that way too fascist and sensible?

Demand for mortgage debt from investment banks including Bear Stearns encouraged lenders to drop standards to create new loans. Some lenders resorted to scams and fraud to initiate loans.
The banks repackaged and resold the debt to investors. If you give someone a mortgage and they pay it back you were just doing your job. If they don't pay it back you are the anti-Christ. Go figure.

"Blame the mortgage tsunami on Bear Stearns," read one sign. Another read, "Bear Stearns employees aren't worth $2." Yeah, put those people out of work so they can't pay their mortgages. Oh, sweet irony!

After leaving Bear Stearns, the crowd moved to JPMorgan. The protesters were easy to trace as a cloud followed them like Pig Pen from Peanuts.

"We will go to their neighborhood, we will educate their children on what their parents do. They should be ashamed," NACA founder Bruce Marks said of employees at both banks. Go to your own neighborhood and educate your own damn children. Maybe then, one day, they can have good jobs and take care of their families instead of bothering hard working people who happen to give others the opportunity to own homes without paying cash up front.

On March 16, JPMorgan Chase & said it would acquire its rival the Bear Stearns Co Inc. for $2 per share, in a deal brokered by the Federal Reserve aimed at heading off a bankruptcy and a spreading crisis of confidence in the global financial system.

On Monday, JPMorgan raised its offer to about $10 a share to appease angry stockholders who vowed to fight the original deal. Bear Stearns traded at $11.25 a share at 3:30 p.m. (1930 GMT) on Wednesday, up 2.8 percent.

As part of the deal, the Fed agreed to guarantee up to $29 billion of Bear Stearns assets.
The agreement has raised concerns that the U.S. government is prepared to help rescue a failing Wall Street bank while declining to bail out millions of home owners facing the possibility of foreclosure. That, retards, is because the Federal Reserve actually expects to be paid back. Just like all these poor people were supposed to pay back their mortgages. Remember that part of the deal?

If banks didn't make loans to people we'd all cry discrimination. Instead we are blaming them because people can't pay their loans off.

Stupid on the Fourth of July

2008-03-27T21:18:00.000-07:00

The following are the comments of congressman Dana Rohrabacher (R-CA) and an open letter to said congressman .

Stupid Factor: 10/10, we are talking about politicians after all!

Rohrabacher: If we bring in more people from the outside, realizing that we’re bringing the most talented people from other countries, will it not hurt those countries? And will it also not depress the wages in our own country that people like yourself would have to pay your employees in order to get quality people or in order to train people within our own society?

Gates: No, no. These top people are going to be hired. It’s just a question of what country they do their work in.

Rohrabacher: I’m really not talking about top people here. You know . . . There’s a lot of other people in society rather than just the top people. It’s the B and C students that fight for our country and kept it free so that people like yourself would have the opportunity that you’ve had. Those people, whether or not they get displaced by the top people from another country is not our goal. Our goal isn’t to replace the job of the B students with A students from India, because those B students deserve to have good jobs and high-paying jobs.

Dear Congressman Rohrabacher:

In your recent exchange with Bill Gates you referred to my compatriots and me as “…not top people” and that it is “the B&C students that fight for out country and kept (sic) it free”. I guess to you, veterans are just the people wearing funny hats and marching in the Fourth of July parade. We certainly aren’t the people with funny hats driving go carts, those are the Shriners. But I digress.

As a veteran I find your comments simply stupid and I give you an ‘F’ in diplomacy. In order to defend the honor of veterans everywhere I challenge you to an academic contest in any subject of your choice. Given your anachronistic views on jobs perhaps we can compete in economics. Or, given your struggle with grammar perhaps English? Either way, I feel confident that when Bill spoke about “top people”, he wasn’t referring to you. Being a politician obviously doesn’t indicate intelligence. After all, not only do ‘C’ students fight for our country, some of them become Commander In Chief.

Respectfully,
LITB

Stupid in the Senate

2008-02-14T19:01:00.000-08:00

Your tax dollars at work. Stupid Factor: 8/10.

Goodell: Pats have taped since 2000
Belichick told NFL commish he thought it was OK to do

Posted: Wednesday February 13, 2008 6:37PM; Updated: Wednesday February 13, 2008 11:42PM

WASHINGTON (AP) -- Bill Belichick has been illegally taping opponents' defensive signals since he became the New England Patriots' coach in 2000, according to Sen. Arlen Specter, who said NFL commissioner Roger Goodell told him that during a meeting Wednesday.
"There was confirmation that there has been taping since 2000, when Coach Belichick took over," Specter said.
Specter said Goodell gave him that information during the 1-hour, 40-minute meeting, which was requested by Specter so the commissioner could explain his reasons for destroying the Spygate tapes and notes.
"There were a great many questions answered by Commissioner Goodell," Specter, the senior Republican on the Senate Judiciary Committee, told reporters after the meeting. "I found a lot of questions unanswerable because of the tapes and notes had been destroyed." I know this is hard for many Americans, but stop and think about this, please. Why is a member of the Senate Judiciary Committee concerned about a team breaking the rules of its league? Is there some obscure law I haven’t found yet that says it’s a Federal crime to video tape a fat guy in a sweatshirt playing charades in a football stadium?
Goodell said Belichick told him he believed the taping was legal; Goodell said he did not concur.
"He said that's always been his interpretation since he's been the head coach," the commissioner said. "We are going to agree to disagree on the facts."
Specter, from Pennsylvania, wants to talk to other league officials about what exactly was taped and which games may have been compromised. I’m guessing Specter is an Eagle’s fan and he is still ticked about the 2005 Super Bowl. Get over it and stop wasting my money.
"We have a right to have honest football games," he said. Ah yes, “Life, Liberty the pursuit of Happiness and honest football games. And a safety net in old age. And universal healthcare. And cheap prescription drugs. And an economic stimulus package.” That has quite a ring.
Goodell noted that "we were the ones that disclosed" the Patriots' illegal taping of the New York Jets' defensive signals in Week 1 of last season. Further, Goodell said, they had an admission by Belichick.
"I have nothing to hide," Goodell said. Nope, you don’t. Not that Coach Hoodie is innocent or that the Patriots aren’t a suspect organization or that the NFL didn’t cover this up to avoid tarnishing its brand…but you have nothing to hide because you are private industry who owes nothing to Senator Spec-tator.
Goodell also told Specter that that he doesn't regret destroying the Spygate tapes or the notes.
"I think it was the right thing to do," Goodell said.
Still, Specter wants to know why penalties were imposed on Belichick before the full extent of the wrongdoing was known and the tapes destroyed in a two-week span. Asked if he thinks there was a coverup, Specter demurred.
"There was an enormous amount of haste," Specter said. How would you know anything about haste? You have been working for the government for decades! How about getting my mail to me with some haste?
He scoffed at the reasons Goodell gave for destroying the tapes and notes, particularly about trying to keep them out of competitors' hands and because Belichick had admitted to the taping.
"What's that got to do with it? There's an admission of guilt, you preserve the evidence," Specter said. As for keeping the tapes out of the hands of others: "All you have to do is lock up the tapes." Ah, yes. Ask a government official how to preserve evidence and take care of tapes. They are clearly the experts.
Belichick was fined $500,000 and the team was fined $250,000 because of the Spygate incident. The Patriots also forfeited a first-round draft pick.
Specter has questioned the quality of the NFL's investigation into the matter and raised the possibility of congressional hearings if he wasn't satisfied with Goodell's answers. Specter also raised the threat of Congress canceling the league's antitrust exemption and reiterated that in the meeting with Goodell. What is next? Investigating the Bad News Bears because that whole “hiding the ball in your glove while walking back from the pitchers mound and tagging out the runner" was probably not in the rule book?
Goodell also said he has not heard from Matt Walsh, the former Patriots employee who performed some videotaping duties for the team.
Walsh told The Associated Press last week during the Pro Bowl in Hawaii that he couldn't talk about allegations that he taped a walkthrough practice by the St. Louis Rams before the 2002 Super Bowl. New England, a two-touchdown underdog, won that game 20-17.
Goodell said he has offered Walsh a deal whereby "he has to tell the truth and he has to return anything he took improperly" in return for indemnity. Specter said he, too, wanted to talk to Walsh and perhaps offer a different deal.
Goodell also said he reserves the right to reopen the investigation if more information is uncovered.
Copyright 2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

A note to the American voter-Senator Spector is a member of the "small government" party. That rumbling sound is our founding fathers collectively rolling over in their graves.

Sea Level Stupid

2008-01-09T20:57:00.000-08:00

Quite possibly the worst abuse of our legal system since I got a ticket for parking in a repainted handicapped spot because I "should have known it was meant to still be one."

Stupid factor 9/10.

Katrina victim sues U.S. for $3 quadrillion
Federal government hit with 489,000 damage claims after hurricane
The Associated Press
updated 9:40 a.m. PT, Wed., Jan. 9, 2008

NEW ORLEANS - Hurricane Katrina's victims have put a price tag on their suffering and it is staggering — including one plaintiff seeking the unlikely sum of $3 quadrillion. Who ever said you can’t put a price on human life? Or on memories? Or on stupidity? Anyone with a calculator want to tell me what that is after taxes?

The total number — $3,014,170,389,176,410 — is the dollar figure so far sought from some 489,000 claims filed against the federal government over damage from the failure of levees and flood walls following the Aug. 29, 2005, hurricane. I cannot say this loudly enough or repeat it enough times: people who live below sea level and count on things built by the government to keep them from losing everything are playing Russian roulette with a loaded gun. And then taking that loaded gun to the SuperDome to shoot at the National Guard.

Of the total number of claims, the U.S. Army Corps of Engineers said it has received 247 for at least $1 billion apiece, including the one for $3 quadrillion.

"That's the mother of all high numbers," said Loren Scott, a Baton Rouge-based economist. It’s the “Stupid Mother who watches the View and thinks they are smart, independent women” of all numbers.

For the sake of perspective: A mere $1 quadrillion would dwarf the U.S. gross domestic product, which Scott said was $13.2 trillion in 2007. A stack of one quadrillion pennies would reach Saturn. Some residents may have grossly exaggerated their claims to send a message to the corps, which has accepted blame for poorly designing the failed levees.

"I understand the anger," Scott said. "I also understand it's a negotiating tactic: Aim high and negotiate down." Act stupid, get attention and ask for money. The new American dream boys and girls. Paris Hilton would be proud. A quadrillion dollars? That’s hot.

Daniel Becnel, Jr., a lawyer who said his clients have filed more than 60,000 claims, said measuring Katrina's devastation in dollars and cents is a nearly impossible task. I'm sure his fee won't be impossible to calculate, though.

"There's no way on earth you can figure it out," he said. "The trauma these people have undergone is unlike anything that has occurred in the history of our country." Ah…civil war, slavery, world conflict? All of these pale in comparison to the trauma of building things below sea level and then wondering why they went bye-bye.

The corps released zip codes, but no names, for the 247 claims of at least $1 billion. The list includes a $77 billion claim by the city of New Orleans. Fourteen involve a wrongful death claim. Fifteen were filed by businesses, including several insurance companies. A wrongful death can only occur when you listen to the warnings and actually evacuate. Anything else is just Darwin doing his thing.

Little is known about the person who claimed $3 quadrillion. Except that they are stupid, spiteful and keeping some poor lawyer from his tee time. It was filed in Baker, 93 miles northwest of New Orleans. Baker is far from the epicenter of Katrina's destruction, but the city has a trailer park where hundreds of evacuees have lived since the storm.

Katrina, which is blamed for more than 1,600 deaths in Louisiana and Mississippi, is considered the most destructive storm to ever hit the U.S. It caused at least $60 billion in insured losses and could cost Gulf Coast states up to $125 billion, according to the National Oceanic and Atmospheric Administration. Not because it was bigger or more powerful than the Galveston hurricane at the turn of the century but because more people had built stuff there…below sea level…on the Gulf Coast…where there are hurricanes.

Most of the claims were filed before a deadline that coincided with Katrina's second anniversary, but the Corps is still receiving them — about 100 claims have arrived over the past three weeks — and is feeding them into a computer database. Stupid and tardy? No problem, we are with the government and our job is to coddle you!

The Corps said it isn't passing judgment on the merits of each claim. Federal courts are in charge of deciding if a claim is valid and how much compensation is warranted.

"It's important to the person who filed it, so we're taking every single claim seriously," Corps spokeswoman Amanda Jones said. Ah yes, you work for the Government so it is your job to make idiots feel as if their ideas have merit. Well done Amanda. But these people are stupid and they need someone to tell them they are stupid or they will continue to do things like this and waste our time. We need tort reform or better birth control in this country if not both.

A Welcome Break from Stupidity

2007-12-29T14:15:00.000-08:00

These folks just plain get it.

Stupidity factor: 0/10

So You Want to be a Masonomist

By Arnold Kling : 17 Oct 2007

"Imagine there's no countries. It isn't hard to do" John Lennon

In 1962, few people knew that the future of popular music was to be found in Liverpool, England and Hamburg, Germany. In the early 1970's, few people knew that the future of information processing was to be found at the Homebrew Computer Club. In 1993, few people knew that the future of online software was in Champaign-Urbana, Illinois. Years from now, perhaps people will be saying that something big got started recently at the George Mason University department of economics. Maybe if you become a Masonomist now, you will be getting in early on a trend that will soon catch on much more widely .. (Note: my formal link with GMU is rather tenuous--I teach one course as an adjunct. Informally, my links through blogging are stronger.)

The excitement at Mason is in blogs and books. The three most well-known blogs are Marginal Revolution (Tyler Cowen and Alex Tabarrok), Econlib (Bryan Caplan and myself), and Cafe Hayek (Russ Roberts and Don Boudreaux). Robin Hanson (Overcoming Bias) is one of many other Mason faculty and graduate students who blog. This year, both Caplan and Cowen produced influential books, Myth of the Rational Voter and Discover Your Inner Economist, respectively. Why do Masonomists blog so avidly? I think it is because there is a sense that we are onto something, and we want to ramp up the conversation among ourselves as well as communicate with a wider audience.
Lose the we
Most economists favor the free market, with reservations. Masonomics rejects the reservations. If John and Mary are free individuals, and John trades with Mary, then John and Mary both are better off. End of story. Most other economists believe in the need for government intervention. Like many non-economists, they talk about government policy in terms of we. We must, we have to, we need, we should, etc. Once upon a time, "We, the people" was the preamble to a charter that reminded those in government of the limitations on the power granted to them. In today's political discourse, "we" is more often the preamble to something like a call for an involuntary collective health system.

If you want to be a Masonomist, you have to lose the we. When people use we in today's politics , they are doing two things.
1. Appealing to a moral entity that stands apart from and above John, Mary, or any other individual
2. Treating government as the embodiment of that higher moral entity

You can be a Masonomist and believe (1). It is a good thing to have a conscience and moral standards. It is a good thing to engage in volunteer work, to form organizations that address the needs of others, and to act unselfishly toward family and others in your community.
Masonomists encourage our noble impulses. Tyler Cowen's book is a cross between a self-help manual and an essay on moral philosophy. In one section, he suggests ways that one can modify one's behavior in order to give enough to charity and to ensure that one's charitable contributions are made wisely.

However, Masonomics is unrelenting in its rejection of (2). For many years, George Mason has been the home of Public Choice Theory, which says that instead of imagining what a wise, omniscient, benevolent government might do, one should pay attention to how government operates in practice. Nobel Laureate James Buchanan, founder (with Gordon Tullock) of Public Choice, is the gray eminence of Masonomics. In practice, the impetus for stopping John and Mary from trading typically comes not from a higher moral entity, but from Mary's competitor Sam. For example, Boudreaux has studied the history of anti-trust. In theory, anti-trust laws are designed to protect consumers from high-priced monopoly. In practice, anti-trust laws are used by competitors to punish low-price competition. For example, when Microsoft was hit with anti-trust action, the "crime" was giving away a web browser for free! You can learn more by listening to this conversation between Boudreaux and Roberts.

Melinda Gates, Lose the We
I should emphasize that "lose the we" does not mean that one should be selfish or uncompassionate or uncaring. Instead, it means that you should channel your impulse to do good by actually doing good. Saying we and advocating government policy is instead a way of feeling good. It is an arrogant, demagogic pose.

If you believe so strongly in we, why don't you put your money where you mouth is? Why don't you donate money to the government? I know my answer to that question. I try to choose charities that have low overhead and programs that seem to me to be working. I think that donating to private charitable organizations is more worthwhile than donating to government. If you, too, make no donations to government, then your actions say "lose the we." If your words say otherwise, then perhaps you should rethink your words. For example, Melinda Gates recently wrote,
We believe that Americans have the power to improve millions of children's lives by telling their political leaders -- in the 2008 presidential campaign and beyond -- that high schools matter and by demanding to know more about their plans for fixing them. ...If Americans can speak with one voice, then the next president and other elected leaders will feel compelled to offer visions and plans that will help ensure that every child in America attends a great high school.
Melinda Gates, lose the we. The visions and plans of our elected leaders are part of the problem in education, not the solution.

Back in the 1980's, I recall that Microsoft had a very low profile in Washington. Technology leaders, including Bill Gates, seemed to feel this way: those who can, compete; those who can't, lobby. In this view, a technology firm that has a big lobbying focus is indicating that it has lost its way. If the Gates Foundation cannot come up with a better way to spend its money than to plead with politicians, then I would suggest that it has lost its way.

Masonomist Trade Doctrine
Dani Rodrik, an economist at Harvard, where we gets used without a second thought, thinks that Masonomics overstates the case for free trade. He argues that we cannot prove that everyone in a country benefits from free trade. This is true. In fact, it is theoretically possible for more people to be hurt by trade than benefit from it. Therefore, Rodrik implies, it is conceivable that we should have tariffs, or, at the very least, we need to compensate those who are "hurt" by free trade.

Masonomics says to lose the we. Instead, like John Lennon, let us imagine that there are no countries. John and Mary are trading, and they are both better off, but an economist calculates that Sam would be better off if John and Mary were prevented from trading. What entity has the moral authority to stop John and Mary from trading?
Governments lay claim to legal authority to collect taxes or impose restrictions on trade across borders. But there is no moral significance to a border. If John, Mary, and Sam all lived within the same country, the question of whether free trade is good for "us" would never arise. John's right to trade with Mary without interference on behalf of Sam would not be questioned. It is hard to see how moving Mary across a border changes the situation from a moral or economic standpoint.

Boudreaux will tell you that one of the most widely-quoted economic statistics, the national trade deficit, has no meaning. There is no we that is in debt to a they. There are only individuals who have issued securities to individuals. It is true that governments issue securities also, and government deficits are truly something that we will have to repay. Some of those government securities are held by foreigners. There is certainly something meaningful about the total liabilities of government, and there may be something particularly meaningful about the liabilities of our government that are held by citizens of other countries or by foreign governments. But that is not what is measured by the national trade deficit. We do not measure the balance of trade between Maryland and Virginia, and no one is the worse for this ignorance. Similarly, if we stopped measuring the balance of trade between the U.S. and China, no knowledge would be lost. Indeed, our overall economic literacy would increase, because there would be fewer misleading stories written about trade deficits.

The Cure for Market Failure
At the University of Chicago, economists lean to the right of the economics profession. They are known for saying, in effect, "Markets work well. Use the market." At MIT and other bastions of mainstream economics, most economists are to the left of center but to the right of the academic community as a whole. These economists are known for saying, in effect, "Markets fail. Use government." Masonomics says, "Markets fail. Use markets."

Somewhere along the way, mainstream economics became hung up on the concept of a perfect market and an optimal allocation of resources. The conditions necessary for a perfect market are absurdly demanding. Everything in the economy must be transparent. Managers must have perfect information about worker productivity and consumers must have perfect information about product quality. There can be nothing that gives an advantage to a firm with a large market share. There cannot be any benefits or costs of any market activity that spill over beyond that market.

The argument between Chicago and MIT seems to be over whether perfect markets are a "good approximation" or a "bad approximation" to reality. Masonomics goes along with the MIT view that perfect markets are a bad approximation to reality. But we do not look to government as a "solution" to imperfect markets. Masonomics sees market failure as a motivation for entrepreneurship. As an example of market failure, let us use a classic case described by a Nobel Laureate, which is that the seller of a used car knows more about the condition of the car than the buyer. Masonomics predicts that entrepreneurs will try to address this problem. In fact, there are a number of entrepreneurial solutions. Buyers can obtain vehicle history reports. Sellers can offer warranties. Firms such as Carmax undertake professional inspections and stake their reputation on the quality of the cars that they sell.

Masonomics worries much more about government failure than market failure. Governments do not face competitive pressure. They are immune from the "creative destruction" of entrepreneurial innovation. In the market, ineffective firms go out of business. In government, ineffective programs develop powerful constituent groups with a stake in their perpetuation.

Unpopular Opinion
Masonomics disdains the obscure mathematics of mainstream economics. There is nothing about Masonomics that is beyond the comprehension of an intelligent layman. Although Masonomics has no pretensions to be over the average person's head, Masonomists are reluctant to concede anything to popular opinion. For example, Bryan Caplan's book describes the economically ignorant voting public as a menace. As consumers, ordinary people have sufficient incentive to learn what is best for them. As voters, they do not.

When it comes to matters of fact and analysis, Masonomics does not care how many people feel a certain way, or how strongly they feel it. Robin Hanson exemplifies this unforgiving intellectual outlook. For example, he recently wrote:
our main problem in health policy is a huge overemphasis on medicine. The U.S. spends one sixth of national income on medicine, more than on all manufacturing. But health policy experts know that we see at best only weak aggregate relations between health and medicine, in contrast to apparently strong aggregate relations between health and many other factors, such as exercise, diet, sleep, smoking, pollution, climate, and social status. Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. To their shame, health experts have not said this loudly and clearly enough.

Many health policy wonks are aware of the large number of studies that show little relationship between the amount of medical services a population receives and the health of that population. However, hardly anyone is willing to follow this result to its logical conclusion, namely, that we probably would be better off with less medical care. Hanson understandably regards this as a remarkable blind spot among health policy advocates.

One of the variables that is correlated with health status is Unmentionable. This Unmentionable Factor affects life expectancy, income, international differences in the standard of living, and many other phenomena. Garett Jones is a young economist who incorporates The Unmentionable into his research. I describe a recent paper of Jones as saying that "people with high levels of The Unmentionable are better able to co-operate with one another." Not surprisingly, Jones has just joined the faculty at George Mason.

Are You Ready?
So, if you are ready to get in on the next Big Thing in political economy, now you know what to do:
--lose the we
--recognize that market failures exist, and that is why we need markets
--arrive at truth by following the facts, not the fashions
When Masonomics itself becomes fashionable, it will be time to look for something else.

Stupidity in Hindsight, This Is!

2007-12-29T12:37:00.000-08:00

A not-so-fond look back at the days when Yoda ran the Fed and an attack on the great Ayn Rand. Stupidity Factor: 7.5/10

Greenspan's '63 Essay Foretold Subprime Inaction
Commentary by Jonathan Weil

Dec. 19 (Bloomberg) -- Why did Alan Greenspan fail to act while the roots of the subprime-mortgage crisis spread? Here's one possible explanation: The Ayn Rand disciple held fast to his unwavering laissez-faire beliefs. Another way to look at this would be that Greenspan figured poor people with less than stellar credit should be given a shot at home ownership.
Yesterday's New York Times carried a front-page article chronicling the many warnings the former Federal Reserve chairman received about aggressive subprime lenders luring unsuspecting customers into crazy mortgages they never could afford. What kind of imbecile applies for a mortgage and is then surprised by their first payment? Or their second? Or the one hundredth? Apparently the answer is about 10% of subprime borrowers? If you can’t pay for it…don’t buy the house. It’s not Greenspan's job or the banks to make sure you aren’t an idiot. ``Where was Washington?'' the newspaper asked. And where was Alan? Where was personal responsibility?
There was Edward Gramlich, the late Fed governor, who urged Greenspan in 2000 to have Fed examiners investigate the industry. Greenspan said no. Activists from a California housing group, the Greenlining Institute, met with Greenspan in 2004, urging him to press lenders for a voluntary code of conduct. How does one “press” that which is voluntary? Greenspan wasn't interested and didn't give a reason. He offered a weak defense: The Fed wasn't equipped to investigate and wasn't to blame for the housing bubble and bust.

Greenspan's recent memoir, ``The Age of Turbulence,'' offers no satisfactory answers either. Greenspan said he knew ``the loosening of mortgage credit terms for subprime borrowers increased financial risk.'' Yet he ``believed then, as now, that the benefits of broadened home ownership are worth the risk.'' Didn’t I just say that? Giving people who are riskier bets the chance to own a home is still a good thing. Of course, thanks to knee jerk, drive by columnists like our friend Jonathan, that opportunity went bye-bye around the first week of August. Poor people will be crashing on your sofa soon John. Hope you stocked up at Costco this week.
No, I believe the best answer can be found in an August 1963 article called ``The Assault on Integrity'' that Greenspan, then 37, wrote for Rand's monthly journal, ``The Objectivist.'' Judging by how he rebuffed Gramlich and others, it looks like he followed his old instincts as the subprime mess festered.

Agent of Consumers

``Protection of the consumer against `dishonest and unscrupulous business practices' has become a cardinal ingredient of welfare statism,'' Greenspan began his essay, which Rand included in her 1967 book, ``Capitalism: The Unknown Ideal.''
``Left to their own devices, it is alleged, businessmen would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings. Thus, it is argued, the Pure Food and Drug Administration, the Securities and Exchange Commission, and the numerous building regulatory agencies are indispensible if the consumer is to be protected from the `greed' of the businessman.
``But it is precisely the `greed' of the businessman or, more appropriately, his profit-seeking, which is the unexcelled protector of the consumer.
``What collectivists refuse to recognize is that it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.''
``Reputation, in an unregulated economy,'' Greenspan said, ``is thus a major competitive tool.''
Do Nothing
This view of the world might well explain why Greenspan did nothing. Yet if he'd said these words anytime in the past 20 years, they would have rung false to many people familiar with the 1980s savings-and-loan crisis, the corporate scandals touched off by Enron Corp., or the housing bust. Well, actually, Enron was unscrupulous and went out of business, proving Greenspan, Rand and every other person with a brain right in thinking that less regulation=good.
``He still believes philosophically what he wrote 30, 40 years ago,'' says Greenspan biographer Jerome Tuccille, author of the 2002 book ``Alan Shrugged.'' ``But he must know we don't have a truly competitive free-market economy, and that's the context he was writing about. He must know the propensity of corporations to put greed ahead of their reputations.'' Do you think we might be confusing profit for greed? Of course corporations work for profit, which is why they aren’t non-profits. The point is you can only push so far against what consumers think is right before they will stop buying your stuff. I’ll let you review my dealing with AT&Ts customer service department if you still question this.
Greenspan wrote: ``It requires years of consistently excellent performance to acquire a reputation and to establish it as a financial asset. Thereafter, a still greater effort is required to maintain it: a company cannot afford to risk its years of investment by letting down its standards of quality for one moment or for one inferior product; nor would it be tempted by any potential `quick killing.'

Opposite Result

``Newcomers entering the field cannot compete immediately with the established, reputable companies, and have to spend years working on a more modest scale in order to earn an equal reputation. Thus the incentive to scrupulous performance operates on all levels of a given field of production. It is a built-in safeguard of a free enterprise system and the only real protection of consumers against business dishonesty.''
Government regulation, he went on, ``is not an alternative means of protecting the consumer. It does not build quality into goods, or accuracy into information. Its sole `contribution' is to substitute force and fear for incentive as the `protector' of the consumer.'' Well, it also adds another layer of costs and keeps trial lawyers busy, but I digress. Minimum standards, he said, gradually become the maximums, and regulation undermines the moral base of business dealings.
``It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him.

Don't Stop Believin'

Journey reference aside, Jonathan, should we instead embrace the beliefs of the collectivists who flourish around the world in….in…Cuba? If anyone needs to abandon their way of thinking it is the people whose social experiments have failed time after time.
``Protection of the consumer by regulation is thus illusory,'' he said. ``Rather than isolating the consumer from the dishonest businessman, it is gradually destroying the only reliable protection the consumer has: competition for reputation.
``While the consumer is thus endangered, the major victim of `protective' regulation is the producer: the businessman.''
The largely unregulated subprime-lending industry, of course, didn't turn out this way. Countless mortgage brokers and lenders didn't care about their reputations. And now they have no companies and no jobs. Gosh it’s almost as if capitalism works. Oh, wait, it does! Wall Street banks, which packaged and pitched the loans as AAA securities, didn't care about theirs either. There were quick killings to be had. And money to be lost. Apparently there was a cost to taking on risky loans. Bet no one does that for a while. Once again, yay capitalism.
Four decades later, Greenspan's argument seems almost childlike in its idealism. Actually it is the consistent belief that government creates safety that is child like. Believing that government can step in and make things better by force of will is so naïve in the face of all the data of everyday life that all I can say is Jon Jon, time to grow up. Yet, judging by his inaction, it looks like he never stopped believing.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.) And they are stupid.
To contact the writer of this column: Jonathan Weil in Boulder, Colorado, at jweil6@bloomberg.net

I'll Be Stupid for Christmas

2007-12-29T12:21:00.000-08:00

This piece of garbage comes from the king of financial media, the Wall Street Journal. If you want to shell out for the subscription you can see the article here: http://online.wsj.com/article/SB119603767388403471.html

I'd like to save you the trouble.

Stupid Factor: 7/10.

Home or the Holidays? How clever and subversive...Anne must be auditioning for a 60 Minutes gig.

Mortgage Woes Are Creating A Subprime Christmas For Consumers and Stores

By ANN ZIMMERMAN

November 26, 2007;

Page B1

Susan and John Harriman normally spend about $500 on holiday gifts -- $100 on presents for each other, $50 on their 29-year-old niece, then $25 on all of their other family members. But this season, the couple has a wrenching choice to make: celebrate Christmas or keep their home out of foreclosure. "Celebrating" Christmas doesn't have to mean spending more money than you have."We're just sending out Christmas cards, with us standing in front of the house -- the house that cost us," says Ms. Harriman. If you are so poor, why spend that much? Stamps cost money too!

With all their might, the couple is trying to hold on to their modest 1,100-square-foot ranch house in Central Islip, N.Y. In the six and half years since they bought their home on Long Island, Susan, a former postal worker, and John, a school district custodian, have watched their monthly mortgage payments skyrocket 66% to $2,454 due to home-equity loans for repairs, delinquent fees, and an adjustable-rate mortgage that has risen twice in the past six months. Sounds like pretty poor planning…perhaps a budget would have helped? Or maybe a quick viewing of Tom Hanks in The Money Pit?"I think people pay less a month on mansions in the Hamptons than we do," Ms. Harriman says with a bitter laugh. Yes, and they are living within their means. How strange.

Housing-related woes may turn out to be this year's Grinch, not just for families like the Harrimans who are fighting off foreclosure, but for many other consumers accustomed to funding life's little extras -- from big-screen TVs to a Caribbean vacation -- by borrowing against their home's value. And I've been funding that stuff with cash all these years, how antiquated. Now, with mortgage delinquencies at record highs and mortgage-equity withdrawals well off the peak hit in the second half of 2006, the housing mess has begun to exact collateral damage on the larger consumer economy, beyond the furniture and home-improvement retailers that began to be squeezed a year ago. It is one of the main reasons that holiday sales are expected to be the weakest since the recession in the early part of the decade. Yet, they were up 8.3% over last years Black Friday and rose about 3.5%-4% over last years total. Some collateral damage. "Housing tentacles run deep into the consumer economy and threaten to choke it," says Mark Zandi, chief economist at Moody's Economy.com. Beyond the direct effect on the economy from home sales, which result in people spending to fix up and furnish their homes, almost 10% of all jobs are in housing-related businesses, from real-estate agents and mortgage brokers to landscapers and roofers. That means, let me check my math…90% of all jobs have absolutely nothing to do with housing. Gosh, how will the largest economy in the world cope with such insignificance?"Every dollar change in housing wealth results in a change of five cents in consumer spending. And that adds up to hundreds of millions," Mr. Zandi says . This is correct, changes in $1 of wealth result in .05 cent changes in spending. But changes in income result in .70 cent changes per dollar increase. Hourly wages have risen 3.8% over last year. Anybody still awake out there?

During the giddy days of the housing run-up, convinced their home's value would keep rising, many families dug further into debt by "withdrawing" equity to raise cash for other purchases. Well, that was dumb.

In addition to the common second mortgage, or home-equity loan, a popular method was to refinance with a larger mortgage reflecting a home's greater market value. Borrowers then paid off their original, smaller mortgage and pocketed the remaining cash -- called "cash-out refinancing." While interest on the new loan was usually less, monthly payments increased.Mr. Zandi estimates the withdrawals hit their peak in the second half of 2006 and totaled $850 billion, or 10% of disposable income. By the third quarter of this year that amount had fallen to $550 billion."With home values falling fast, it is more difficult to cash out, which is particularly hard on lower and middle income households," says Mr. Zandi. "One-third of households pulled equity from their homes the last several years. Those homeowners that have cashed out have a collective saving rate of negative 10%."With the knowledge that just one missed payment will start the foreclosure process, Ms. Harriman has to be scrupulously thrifty about her holiday spending. Except for the cards, the lights, the blow up ornament on the lawn and the gifts. Other than that, nothing. The Harrimans' attorney told them that if they make a year's worth of mortgage payments on time, they might be able to refinance at a fixed rate of 8%, down from 10.5% now. They have about six months to go. If your credit didn't suck you could probably get that at about 6% fixed right now. Ooops.

Ms. Harriman -- who revels in decorating for the holidays -- has three inflatable lawn ornaments, but will put up only one this year -- a Charlie Brown Christmas globe -- to save on the electric bill. This is being thrifty?? How about selling the globes on EBay and stop whining!For the same reason, she won't string multicolored lights on the outside of her house, nor put up the tiny white lights along the interior hallways. In their place, she will plant some cardboard candy canes along the front walk. To save money on the Christmas dinner, she'll serve turkey or lasagna, but not both."Everything is being halved," she says.The Harrimans are following the advice of the Community Development Corporation of Long Island. A nonprofit organization that, among other things, promotes homeownership, the CDC's caseload has mushroomed in recent months as problems with subprime mortgages -- loans extended to the riskiest borrowers -- have worsened.Its work is particularly anguishing around the holidays when clients are tempted to overspend."Everyone who comes here has to make tough choices and some of them can keep their houses by budgeting to the bare minimum," says Eileen Anderson, senior vice president of the CDC. I don't know about you, but I make the decision whether to spend every nickel I have on frivolities or not just about every day. Thankfully, I'm not stupid and I get that one right most days.

Ms. Anderson says it seems like the choices are increasingly harder to make as stores work overtime to lure shoppers with earlier promotions and no interest payments."Encouraging people to charge now and pay later is the worst thing to do when you're struggling," she says.

With home equity in the doghouse, consumers are turning back to credit cards, cushioning some of the blow to consumer spending. Recent data from Equifax Inc. shows that the growth in the number of new credit cards, as well as balances, is as strong as it has been since 2001, after remaining fairly flat in recent years. But defaults also are creeping up.Retail experts have begun to see consumers curb spending by turning to lower-price stores and goods. That explains the projected softness in "affordable luxury" sales at companies such as Nordstrom Inc. and Coach Inc. "Nordstrom customers are trading down to Macy's, and the Macy's customer is trading down to Target," says Bill Dreher, retail analyst with Deutsche Bank.Trading down, themselves, the Harrimans are calling it their dollar-store Christmas. The couple are typically Wal-Mart shoppers, with an occasional splurge at Kohl's. But this year they will give each other small tokens from the local dollar store.This was not what they expected when they became homeowners in April 2001. They knew they were stretching when they bought their three-bedroom home -- "two bedrooms and one the size of a closet," Ms. Harriman says -- about eight months after they got married. But the couple, renting a room in a friend's house, were ready for their own place, and they figured it would cost just as much to rent an apartment. They figured wrong. Poor planning and poor budgeting?

The house they bought hadn't been updated since it was built almost 80 years ago; it needed a new roof, insulated windows, a new kitchen. Even the doors, which had rotted, needed replacing.But their financial crisis was triggered when Ms. Harriman, who is 40 years old, began missing work due to flare-ups of her multiple sclerosis. She finally quit work in 2005, believing her pension and federal disability payments would make up for the lost salary. But it took six months for the disability to kick in and pension paperwork dragged on for two years. Perhaps a part time job? The real probelm here is that we have two people employed by the government marrying each other. Shouldn't there be a law against such blatant deepening of the stupidity pool? They took out a new mortgage, replacing their former fixed-rate loan with a lower adjustable rate that reset higher after two years, giving them time to catch up, they hoped. But they still couldn't manage, and ended up filing for bankruptcy protection. How exactly were you going to catch up without working? In September, Ms. Harriman finally got her pension. John, 38, started working a second job three mornings a week as a stock clerk at A.C. Moore crafts store. But just as they felt they were catching up, their mortgage interest rate jumped to 8%. This month it rose by two and a half points -- an increase of $800 a month."My husband was real down that there will be nothing under the tree this year," Ms. Harriman says. But, "it makes me want to work harder to get back to live my life normally again. It is a reminder and an incentive."

Write to Ann Zimmerman at ann.zimmerman@wsj.com 1

In all this is a good example of the media trotting out some poor half wit to show us how rough things are out there. Word to the wise? Things are always rough out there when you do dumb things. -LostintheBlog

A Message

2007-12-29T12:14:00.000-08:00

Alone (more or less) and adrift, I sail on a sea of idiocy. Battered by the waves of incompetence, seeking that far shore called sanity. Climb aboard, if you will, and join me in my journey.