Michael E. Newton's Blog, page 19
March 4, 2011
Democrats adopt the Monty Python strategy: Running Away
The Washington Post reports:
Democratic legislators embracing tactic to gain leverage: Fleeing
Yes, that's the actual headline. So what does this remind me of?
Brave Sir Robin [Fleeing begins at 2:30] (HT Instapundit):
Attacking a French Castle [Fleeing begins at 3:07]:
Killer bunny [Fleeing begins at 1:55]:
The end of that clip leaves off the most important part. It's leaves off the Democrats' strategy:
ROBIN: Would it help to confuse it if we run away more?
ARTHUR: Oh, shut up and go and change your armor.
GALAHAD: Let us taunt it! It may become so cross that it will make a mistake.
And there is the strategy of the Democrats. Run away to confuse people and taunt their enemies hoping they'll make a mistake. Hey, it's easier than learning how to govern.
Again, Hat Tip to Instapundit.
March 3, 2011
Federal Reserve discovers that paying people not to work equals fewer people working.
In case you didn't know, the Chicago Fed reports:
A research paper published by the Chicago Fed has concluded that extra jobless benefits — unemployed workers can now get up to 99 weeks of benefits — may be contributing up to 0.8 percentage points to the current unemployment rate, which was 9% in January. The Chicago Fed paper said the extra benefits may still be worthwhile, given that in their absence workers may be forced to take jobs that represent poor matches for their skill levels. Also on Thursday, Minneapolis Fed President Narayana Kocherlakota said the natural rate of unemployment — basically, the smallest rate of unemployment that won't lift inflation — ranges between 5.9% and 8.9%.
For those who are not economically literate, let me summarize: If the government pays people not to work, fewer people will work.
I don't know why the Fed had to do a study to determine that. Maybe they were just trying to figure out not if it had an effect but how large the effect is. Or maybe it was just a study devised to keep a few economics employed during the recession.
What I really don't understand is this line:
The Chicago Fed paper said the extra benefits may still be worthwhile, given that in their absence workers may be forced to take jobs that represent poor matches for their skill levels.
So the Chicago Fed thinks it is better to have people sitting around doing nothing rather than do a job below their current skill level? These people really do live in ivory towers.
March 2, 2011
Mubarak and Gaddafi were in it for the money. Tyrants always are.
Just in! Muammar Gaddafi has grown rich on the back of the Libyan people.
The dictator's dough: Astonishing wealth of Gaddafi and his family revealed
The astonishing wealth of Libyan tyrant Muammar Gaddafi and his family has been laid bare as countries around the world begin freezing billions of dollars worth of their assets.
The U.S. alone has seized $30billion (£18.5bn) of their investments, while Canada has frozen $2.4bn (£1.5bn), Austria, $1.7bn (£1bn) and the UK, $1bn ($600m).
These assets appear to be just the tip of the iceberg, as no one is yet certain exactly what the family owns around the world.
Previously, we learned the same thing about Hosni Mubarak in Egypt:
Mubarak family fortune could reach $70bn, say experts
President Hosni Mubarak's family fortune could be as much as $70bn (£43.5bn) according to analysis by Middle East experts, with much of his wealth in British and Swiss banks or tied up in real estate in London, New York, Los Angeles and along expensive tracts of the Red Sea coast.
But then we learned those estimates were too high. Nevertheless, Mubarak was still quite wealthy.
Hosni Mubarak's Wealth: He's a Thief, But Not That Big a Thief
Egypt's Former President Worth 'Only' $5 Billion, Says U.S. Intelligence; Family Wealth Estimates Range Up to $70 Billion
Newly deposed Egyptian President Hosni Mubarak and his family have a fortune of $1 billion to $5 billion stashed in foreign banks, according to U.S. intelligence estimates — a significantly lower figure than most recent estimates of the wealth accumulated by Mubarak during his 30 years in power.
Some experts have estimated that the Mubarak family has a net worth as high as $70 billion, while others have reported $40 billion, but U.S. intelligence sources told ABC News that the real number is probably much lower.
Surprised? I assume you are not and you shouldn't be. Aristotle warned us that tyrants are like this:
As of oligarchy so of tyranny, the end is wealth; (for by wealth only can the tyrant maintain either his guard or his luxury). [Aristotle, Politics Book 5 Part 10.]
Another practice of tyrants is to multiply taxes, after the manner of Dionysius at Syracuse, who contrived that within five years his subjects should bring into the treasury their whole property. [Aristotle, Politics Book 5 Part 11.]
Just in case some didn't believe Aristotle, a quick look at relatively recent history demonstrates the same. (Quotes from my book.)
Regarding the Soviet Union:
Stalin and his cronies, though, did not share in the people's suffering. In fact, Stalin and other leading Communists lived in houses that had belonged to Russia's wealthiest families before the revolution.
And in Nazi Germany:
As in all tyrannies, many of the Nazi leaders used their power to amass vast wealth. Hermann Goering used his power as commander of the Luftwaffe, administrator of the Four Year Plan, and Hitler's designated successor to acquire mansions and create an enormous industrial enterprise called Hermann Goering Works. As Reichsminister of Propaganda, Joseph Goebbels received gifts from the media, including a house given to him by the film industry. He also used his power to seduce several female film stars.
Thoughts on Governance
Writing for What Would The Founders Think?
In this post, Michael Newton tries to restore precision to our language. The American experiment was conceived as a republic, not a democracy. Present day efforts to conflate the terms not withstanding, the Founders were wary of democracies and they had good reason.
March 1, 2011
Profit windfall tax on absurd public pensions
It has been discovered that certain school administrators in Illinois are earning salaries in excess of $300,000 and are owed pensions valued in the tens of millions.
When oil companies make record profits, liberals start arguing for "profit windfall taxes." I suggest we turn the tables on them. These are clearly windfall pensions and should be taxed as such.
United States blamed for unrest in Yemen. What happened to hope and change?
One of the main attractions of Barack Obama was that he would restore our creditability around the world after George W. Bush lost it all. How is that working out?
Yemeni president says US and Israel behind unrest
By AHMED AL-HAJ
Associated Press
SANAA, Yemen (AP) — Yemen's embattled U.S.-backed president accused Washington on Tuesday of instigating protests against his regime, as hundreds of thousands marched in cities across Yemen in the largest rallies yet seeking the longtime ruler's ouster.
President Ali Abdullah Saleh's allegations, unprecedented in their harshness, signaled a growing rift with the United States that could hurt a joint campaign against the al-Qaida terror network in Yemen.
To blame the United States for the protests is certainly to give our President too much credit. And to think that Obama would restore American likability around the world by making speeches was surely the height of naivety and hubris.
February 25, 2011
Supporters of Liberty Are Always Attacked
Members of the tea party have been called tea baggers, extremists, racists, and Nazis by opponents of the grass-roots pro-liberty movement. While this shows the lack of "civility" of the left, supporters of liberty are always attacked for their beliefs.
Socrates spent his life fighting for freedom of speech and freedom of religion and became a martyr for these causes. In 399 BC, Socrates was charged and put to death for disbelieving in the official Greek pantheon and for corrupting the youth of Athens. But Socrates had also angered most of Athens for praising Sparta while the two were at war with each other, insulting the intellectuals of Athens by claiming he was the wisest man alive, criticizing the leaders of Athens, and arguing against democracy. Admitting that he enjoyed stirring up trouble, Socrates said at his trial: "For if you put me to death, you will not easily find another, who, to use a rather absurd figure, attaches himself to the city as a gadfly to a horse, which, though large and well bred, is sluggish on account of his size and needs to be aroused by stinging. I think the god fastened me upon the city in some such capacity, and I go about arousing." [Plato, Apology 30e.] Socrates' criticism of ancient Athens' political system and leadership got him killed.
Demosthenes fought bigger government, higher taxes, and political corruption in ancient Athens. But he is best remembered for his opposition to Philip of Macedon and his son Alexander the Great. For years, Demosthenes spoke constantly against Philip, but had little success gaining allies. Nevertheless, Demosthenes demanded action, arguing it is "better to die a thousand times than pay court to Philip." [Demosthenes, "Speeches" 9.65.] When Philip finally marched against Greece, his army easily won the battle and occupied Thebes but spared Athens. When Philip was assassinated, Demosthenes again attempted to form alliances and encouraged the territories under Macedonian control to rebel. But Philip's son Alexander marched on Thebes, which immediately submitted to him. Thebes and Athens rebelled yet again upon mistakenly hearing that Alexander was dead, at which Alexander destroyed Thebes and placed Athens under Macedonian control. When Alexander the Great died, Demosthenes again tried to rally the people for independence, but Antipater, Alexander's successor in Greece and Macedon, defeated the Athenians in battle, forced them to dissolve their government, and Demosthenes committed suicide before he could be arrested and executed.
Cicero was one of the most powerful men in ancient Rome and its Senate. Cicero fought for property rights, arguing "I do not mean to find fault with the accumulation of property, provided it hurts nobody." [Cicero, De Officiis 1.25.] Cicero also fought against government-provided welfare, abolition of debts, and redistribution of land and wealth. But he is best remembered for his fight against imperial power. In his quest for power, Julius Caesar asked Cicero to join his Triumvirate with Pompey and Crassus, but Cicero declined, fearing it would hurt the Republic. When Julius Caesar was assassinated, Cicero as leader of the Senate and Mark Antony as consul and leader of those who supported Caesar became the two leaders of Rome. Cicero opposed Antony and made a series of speeches against him, known as Philippics for the similarity of his speeches to those of Demosthenes against Philip of Macedon. Mark Antony formed the Second Triumvirate with Octavian, Julius Caesar's heir, and Marcus Aemilius Lepidus, a former consul and strong supporter of Julius Caesar. They immediately sought to exile or kill their political opponents, especially Cicero. Cicero was captured on his way to the coast, where he had hoped to escape to Macedonia. Cicero's capturers "cut off his head, by Antony's command, and his hands — the hands with which he wrote the Philippics." [Plutarch, Parallel Lives Cicero 48.6.]
Cato the Younger was a very stubborn man who vehemently opposed corruption, demagoguery, and immorality. In the Senate, Cato focused especially on taxes and wasteful government spending. When Caesar, Pompey, and Crassus created the First Triumvirate, Cato was an immediate opponent. Cato opposed Caesar's first major proposal to distribute public lands to the people. "No one spoke against the law except Cato, and him Caesar ordered to be dragged from the rostra to prison." [Plutarch, Parallel Lives Cato 33.1.] Though the Senate disagreed with Cato's position, they forced Caesar to free him from his unjust imprisonment. Seeing the growing tyranny, "Cato warned the people that they themselves by their own votes were establishing a tyrant in their citadel." [Plutarch, Parallel Lives Cato 33.3.] But the people refused to listen to Cato and continued to support Caesar. Ten years later, Caesar and his army crossed the Rubicon, thus declaring war on the Roman Senate. The Senate fled and Caesar chased after them. Seeing that Caesar had won and knowing Caesar would have him executed, Cato committed suicide.
When you are attacked for supporting liberty, know that you stand on the shoulders of giants. And let us thank God and country, for we live in a society in which we have freedom of speech and in which the supporters of government tyranny can do no more than insult their opponents.
February 22, 2011
Sovereign debt implications of Middle East turmoil
Disregarding the discussion about the political effects of the protests in the Middle East, how about the financial implications?
The cost of protecting sovereign debt against non-payment in northern Africa and the Middle East continued to rise Tuesday as investors reacted to ongoing turmoil in Libya. Morocco was hardest hit, with the spread on five-year credit default swaps widening to 200 basis points from around 184 on Monday, according to data provider Markit. That means it would cost $200,000 annually to insure $10 million of Moroccan debt against default for five years, up from $184,000. The Egyptian CDS spread widened 19 basis points to 375, Markit said, while Bahrain's spread widened 10 basis points to 317. The Israel CDS spread widened to 163 from 154.
Losses by banks in this region will only hurt the important countries' fiscal situation.
Looking at Portugal, now the key country, interest rate are new highs.
The turmoil in the Middle East just adds a new twist to the sovereign debt crisis. Until nations reduce their debt levels, which none are doing right now, this story is far from over and will be around for years to come.
February 19, 2011
How much does an education really cost?
I thing the 7% expected annual return may too high, but otherwise Mr. Bill Walker has a very good point. Are we really getting our money's worth with our public schools?
US Education: Show Us the Money!
by Bill Walker
According to the 2009 OECD figures, the US government spends more per pupil than any nation in the world except Switzerland. The US spent an average of $149,000 for the K–12 education of every 2009 public high school graduate. That works out to $11,461 per year or so.
So the solution is obvious: shut down the schools and invest the money instead. Just let the kids stay home and study on the Internet. Let's even save some money to reduce the deficit, and only invest $11,000 per year. At 7% return, each child would have a $391,000 IRA when they're 18. That way, even if they spend the next 50 years surfing or hiking the Appalachian Trail, they would all retire at 68 with $12,512,000 (assuming the same 7% average yearly return). This solves not only the education crisis, but the Social Security problem (they wouldn't need it) AND the health-budget crisis (how much heart disease could there be, if everyone spent their time surfing and hiking?)
February 18, 2011
An obvious defense of Scott Walker against the smears
Protestors in Wisconsin have compared Governor Scott Walker to Hosni Mubarak. But it's not just the protesters. Even former Rep. David Obey (D-WI), a 41-year veteran of the House, said:
"All I know is that last week, when people were asking where Mubarak was — whether he had gone to Sharm el-Sheikh or Paris — I was saying he was ensconced in the governor's mansion in Madison."
Let's compare the two.
Hosni Mubarak was an autocrat who ruled over Egypt for 30 years without fair elections and no checks and balances on his power.
Scott Walker is the duly elected governor of Wisconsin. He has been in power for a month and a half. He cannot enact any laws without bills first being passed by the state legislature.
The comparison is laughable. But then again, these very same people have compared Scott Walker to Mussolini and Adolf Hitler. Some even say he is Mubarak and Hitler combined.
As one who has been called a Nazi for supporting the tea party (I am an active member of the North Phoenix Tea Party), I know what it feels like. And for those who don't know, I'm an orthodox Jew. If you are going to insult somebody, at least be tactful. These attacks against Governor Walker are tasteless, historically inaccurate, and make the protesters look bad. But then again, maybe the protesters are bad…
