How Can You Tell He's Lying? (you already know the answer)

Here, Holman Jenkins pretty well sums up the status of the global warming debate and Al Gore's annoying, stupefying hypocrisy.

Sad to say, lots of so called scientists who should be acting like scientists aren't. They are too overcome by their zeal for slowing economic growth to remain scientists who are dedicated to letting the empirical chips fall where they may.

It is sad indeed to see the world revert in the 21st Century to religious bigotry and such disregard for science and its powerful method of discovery. It's as if the 17th Century never happened.

Will the Al Gores of the world prevail? Will cap-and-trade enrich Gore and Nancy Pelosi, both of whom are so financially vested in "green"? I remain hopeful that by the 2010 elections, enough Americans will have seen through the hypocrisy of Al Gore and his willful ignorance of climatology to turn his investments in cap-and-trade to sand.

Joe Legal vs Jose Illegal

A good friend sent this along. It's worth the read.

JOE LEGAL vs. JOSE ILLEGAL

You have two families: "Joe Legal" and "Jose Illegal".
Both families have two parents, two children, and live in California .

Joe Legal works in construction, has a Social Security Number and makes
$25.00 per hour and has taxes deducted.

Jose Illegal also works in construction, has NO Social Security Number,
and gets paid $15.00 cash "under the table".

Ready? Now pay attention...

Joe Legal: $25.00 per hour x 40 hours = $1000.00 per week, or $52,000.00
per year. Now take 30% away for state and federal tax; Joe Legal now has
$31,231.00.

Jose Illegal: $15.00 per hour x 40 hours = $600.00 per week, or
$31,200.00 per year. Jose Illegal pays no taxes. Jose Illegal now has
$31,200.00.

Joe Legal pays medical and dental insurance with limited coverage for
his family at $600.00 per month, or $7,200.00 per year. Joe Legal now
has $24,031.00.

Jose Illegal has full medical and dental coverage through the state and
local clinics at a cost of $0.00 per year. Jose Illegal still has
$31,200.00.

Joe Legal makes too much money and is not eligible for food stamps or
welfare. Joe Legal pays $500.00 per month for food, or $6,000.00 per
year. Joe Legal now has $18,031.00.

Jose Illegal has no documented income and is eligible for food stamps
and welfare. Jose Illegal still has $31,200.00.

Joe Legal pays rent of $1,200.00 per month, or $14,400.00 per year. Joe
Legal now has $9,631.00.

Jose Illegal receives a $500.00 per month federal rent subsidy. Jose
Illegal pays $500.00 per month, or $6,000.00 per year. Jose Illegal
still has $ 31,200.00.

Joe Legal pays $200.00 per month, or $2,400.00 for insurance. Joe Legal
now has $7,231.00.

Jose Illegal says, "We don't need any insurance!" and still has
$31,200.00.

Joe Legal has to make his $7,231.00 stretch to pay utilities, gasoline, etc.

Jose Illegal has to make his $31,200.00 stretch to pay utilities,
gasoline, and what he sends out of the country every month.

Joe Legal now works overtime on Saturdays or gets a part time job after
work.

Jose Illegal has nights and weekends off to enjoy with his family.

Joe Legal's and Jose Illegal's children both attend the same school. Joe
Legal pays for his children's lunches while Jose Illegal's children get
a government sponsored lunch. Jose Illegal's children have an after
school ESL program. Joe Legal's children go home.

Joe Legal and Jose Illegal both enjoy the same police and fire services,
but Joe paid for them and Jose did not pay.

Do you get it, now?

If you vote for or support any politician that supports illegal aliens...you are part of the problem.

It's way PAST time to take a stand for America and Americans.

The Fed Is the Problem, Not the Solution

Here, Kashyap and Mishkin put on their apologist hats for the Fed. What would you expect from a former governor of the Board of Governors of the Federal Reserve System?

Kashyap and Mishkin write to oppose the bill introduced by Ron Paul that calls for auditing the Fed. They do so in the name of central bank independence, claiming as the Fed and its apologists always do, that the Fed must be independent of the government to control run away inflation.

No, to control run away inflation, the Fed needs not to exist, as Ron Paul explains in his book End the Fed. The Fed is part of the government; it is not independent of the government. History shows plainly enough that it is the Fed that exacerbates --- if not causes --- booms and busts in the U.S. Economy.

Since 1913 when the Fed was born, the purchasing power of the dollar has gone from $1 to about 19 cents. I wouldn't exactly call that controlling inflation.

Sadly, most people do not understand enough about money and banking to understand why and how the Fed brings about inflation. Most people do not understand why and how the Fed causes booms and busts. Why would they? Our government schools don't require students to learn anything about economics, all the way from grade school through college, as a matter of fact. Instead, they learn about the hypothesis of how global warming is caused by excessive CO2 put into the atmosphere by humans trying to better their lives.

The Fed is anything but transparent, regardless of the claims of 400 economists who signed a petition against auditing the Fed. You will notice that Kashyap and Mishkin don't address any of Ron Pauls arguments. No, they just repeat the old, tired, misdirections that the Fed and all the economists who support the idea of a central bank have been mouthing for years.

The Fed and its apologists are not worried that we the people will catch them in the act. They know that the system erected in 1913 is far too complicated and opaque for the common person to understand. Best leave it up to the experts, right?

Fear This

As I have been saying recently in this space, the real problem with Obamacare isn't even about health care. It's about government control of your life, loss of liberty, and the road to serfdom. Read more here.

It will be interesting to see whether Americans will awaken from their euphoric stupor over BHO in time to keep Congress from further entrenching the tentacles of command and control in our lives.

The lessons of history are never learned well enough, especially by people like BHO who are supremely confident that they are the chosen one. Read this history if you want a glimpse of where we appear to be headed with BHO and the Democrat Congress.

Will the Young Stand By Their Man?

A good friend sent this along from the Cato Institute; the full briefing paper can be found here.

One of the most interesting questions about the health care overhaul now moving through Congress is how it would affect young adults. That legislation would force most or all Americans to purchase health insurance (an "individual mandate") and would impose price controls on health insurance ("community rating") that would limit insurers' ability to offer lower premiums to low-risk enrollees.

Those provisions would drive premiums down for 55-year-olds but would drive them up for 25-year-olds—who are then implicitly subsidizing older adults. According to the Urban Institute, many young people could see their premiums double, whereas premiums for older adults could be cut in half.

Massachusetts benefits from another type of subsidy that props up its regime of mandates and price controls: large subsidies from the federal government. In contrast, the United States as a whole has no external party it can exploit to subsidize a nationwide Massachusetts-style health care overhaul—unless Congress finances that overhaul through additional deficit spending, which is really just another way of taxing the young to subsidize the old.

The irony is that Barack Obama won the presidency with 66 percent of the vote among adults aged 18 to 29. That's a larger share than any presidential candidate has won in decades. Yet his health care overhaul could impose its greatest burdens on young adults.

One wonders if the young will stand by their man when the real terms of ObamaCare become evident.

True or False

A very good friend asked me which part of the account below is not true. I invite readers of this blog to refute any part of it with evidence.

Those who ignore history are doomed to repeat it.

The Ghosts Of '38


Politics: After their rout Tuesday in key state elections, Democrats would be wise to take a lesson from history. No, we're not talking 1994, when the GOP took back Congress after two years of Clinton. We're talking 1938.

That little-remembered year during the depths of the Great Depression was one of the most edifying in electoral history. With FDR in the White House, and still very popular, a rogue Congress with radical ideas embarked on a series of legislative initiatives that helped push a recovering economy back into depression.

The result: Democrats lost 80 seats in the 1938 election, after gaining seats in 1930, 1932, 1934 and 1936.

How did this happen? As Amity Shlaes notes in her history of the Depression, "The Forgotten Man," Roosevelt believed less competition and high wages would heal the economy. Aided by Congress, he went about engineering those two things with a vengeance, trebling the size of the federal government in less than a decade.

At the time, such drastic action may have seemed warranted. Within three years of the 1929 crash, GDP had fallen nearly a third and a fourth of the U.S. work force was idle. Even so, the economy appeared to stabilize in 1934 and 1935, and in 1936, Democrats won landslides in both Congress and the presidency.

What happened next is a tale of overreach and hubris — one that holds lessons for today's Democrats.

It starts with a series of far-reaching changes to the economy that FDR initiated after entering office in 1933. They included the Agricultural Adjustment Act, which slapped new taxes on farm goods and forced prices to go higher, and the National Industrial Recovery Act, which created business cartels, set prices and imposed more than 500 "codes" governing prices, wages and workweeks.

Both the NIRA (1935) and AAA (1936) were found unconstitutional. But they set the tone for economic tinkering. In a 2007 landmark study, economists Harold Cole and Lee Ohanian calculated that without these restrictive policies, the economy would have recovered in 1936 — seven years before it actually did recover.

Conditions only got worse in 1936 and 1937. Worried about budget deficits and the possibility of inflation, the Fed contracted the money supply. As it did, the newly enacted Wagner Act raised labor costs, encouraging many companies to lay off workers. Those who still had jobs noticed that their paychecks had shrunk, as Social Security withholding kicked in for the first time ever.

The Roosevelt Democrats also unveiled a 5% tax on corporate dividends, and raised the top income tax rate to 90% from 63%.

As today, anti-business rhetoric was rife. FDR called businessmen "economic royalists." Congress imposed new taxes on corporate earnings and put more restrictions on the stock market.

By 1937, notes the Mackinac Center for Public Policy's study "Great Myths of the Great Depression," the economy had scored a first — a "depression within a depression." Real output fell in 1938 by 6%, as business investment shrank by a third.

Democrats are following the same playbook today, spending wildly, trying to raise taxes and imposing government control over vast swaths of the U.S. economy. They'd be wise to back off. If they don't, 2010 could turn into a repeat of 1938.

Your Taxes Will Be Rising; Don't Listen to BHO

Just read it here.

Global Warming

Here, Robert P. Murphy provides a wealth of useful links and his usual incisive insight and analysis into the world's largest, most significant, hypothesized externality --- CO2 induced global warming. I say "hypothesized" because I am not persuaded that anything like all the science is in on the issue. And even if it were, I am completely certain that all the economics is not in on the issue.

As all students of ECON 101 will likely recall, a negative externality is a cost borne by someone who had no choice in the action that generated the cost. Economic thinking teaches us that resources will be used inefficiently when significant externalities prevail. That's because decisions about how to use scarce resources will not take account of all the costs (or all the benefits) that arise from using scarce resources in particular ways. The world is full of negative externalities (and positive externalities, too).

For example, if I start a pig farming operation next door to your home, the stench will likely be a cost you bear, even though you had no choice about whether I would go into the pig farming business or not. Moreover, since I'm not bearing the cost of the stench, the cost doesn't affect my decision about pig farming. Without some way of internalizing the stench cost, with voluntary exchange alone, we will end up using too many scarce resources for pig farming and not enough scarce resources for other valuable activities. With just a little thought, you can generate endless examples of negative and positive externalities.

Education is probably the easiest example of a positive externality. I benefit when your child is educated, even though I have no part in the choice of how much education and what quality of education your child will get. If that externality is not somehow internalized, with voluntary exchange alone, we will end up using too few scarce resources to educate children.

Standard economic thinking about externalities teaches us that externalities could be internalized if all resources were owned by someone, and if transactions costs of negotiating contracts to use scarce resources were zero (read about the Coase theorem here). Problem is, all resources are not owned by some one and transactions costs are not zero.

So far, that fact has led any number of people to conclude that we should all consent to government coercing us to do whatever a small number of people say we should do about any significant externality. Lovers of liberty and Austrian economists like me immediately reject that idea.

But in 2008, a majority of Americans decided to elect a Congress and a President who evidently don't love liberty all that much. As a result, we may get a cap-and-trade law that enriches Al Gore and Nancy Pelosi while the rest of us get to endure much higher electricity bills. But never mind that, let's get back to Murphy's excellent article and the issues at stake.

The hypothesis that global warming is mostly due to CO2 emissions is definitely a hypothesis about the world's largest ever externality. Incidentally, we have approximately 6.7 billion people who are CO2 emitters all around the globe. We also have about a gazillion production processes that emit CO2 or cause more CO2 to be emitted by using the scarce resources called energy, the most famous being coal-fired power plants.

If CO2 is actually a pollutant, as the U.S. Environmental Protection Agency now claims, and if burning fossil fuels really does produce the world's largest negative externality, then you, my friend, are a polluter --- and you are imposing external costs on the rest of us by continuing to choose to breath.

One of a few things must be true. Either there is no God, or CO2 is not the scourge of humankind, or God has a really twisted sense of humor.

Whether you believe the globe is now warming over a long, sustained, and accelerating trend; and whether you believe that CO2 emissions generated by humans (either by breathing or by burning fossil fuels) is the chief culprit; and whether you believe the science is all in on the issue; and whether you believe that the future for humans will be catastrophic if we don't quit emitting so much CO2 into the atmosphere --- or not --- you will benefit from reading Murphy's article and by reading all the links he so thoughtfully supplies.

I propose that we all take a deep breath, step back a bit, and quit throwing political and ideological bombs about global warming. Let's get the science all in --- and if you think it is all in, you just haven't read enough yet; let's get the economics all in --- I'm almost certain you haven't read enough about the economics of the issue yet; neither have I; and for sure, let's get the politicians and the political maneuvering all out --- right now, the politics of global warming is about all we're getting.

How Long Do We Have?

A most excellent friend sent this along to me. Some readers will have seen some of this before, but I think that Professor Olson's data is especially interesting.

About the time our original thirteen states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University Of Edinburgh , had this to say about the fall of the Athenian Republic Some 2,000 years Earlier:

'A Democracy is always temporary in nature; it simply cannot exist as a permanent form of government.'

'A Democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.'

' From that moment on, the majority always vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.'

'The average age of the world's greatest civilizations from the beginning of history, has been about 200 years'

'During those 200 years, those nations always progressed through the following sequence:

1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage

Professor Joseph Olson of Hemline University School of Law, St. Paul , Minnesota points out some interesting facts concerning the 2008 presidential election:

• Number of States won by: Democrats: 19; Republicans: 29
• Square miles of land won by: Democrats: 580,000; Republicans: 2,427,000
• Population Of counties won by: Democrats: 127 million; Republicans: 143 million
• Murder Rate per 100,000 residents in counties won by: Democrats: 13.2; Republicans: 2.1

Professor Olson adds: 'In aggregate, the map of the territory Republicans won was mostly the land owned by the taxpaying citizens of this great country. Democrat territory mostly encompassed those citizens living in government-owned tenements and living off various forms of government welfare...'

Olson believes the United States is somewhere between the complacency and apathy phases of Professor Tyler's sequence for democracies, with some forty percent of the nation's population already having reached the governmental dependency phase.

Send A Message

Congressman John Fleming (Louisiana physician) has proposed an amendment that would require congressmen and senators to take the same healthcare plan they force on us (under proposed legislation they are curiously exempt).

Congressman Fleming is encouraging people to go on his Website and sign his petition (very simple --- takes less than a minute). I have immediately done just that by going here:

The item appears under "Express Your Opinion" at the top, center of the home page.

Please urge as many people as you can to do the same!

If Congress forces a new health plan on the American people, Congress should have to accept the same level of health care for themselves and their families. What do you think?

Pass this on to you friends and neighbors if you are of a like mind