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Monday, May 31, 2010

The Hangman Cometh

The president has nominated his Obamacare executioner, who will decide when you and your loved ones are left to die in the name of egalitarian social justice.

Posted by Thomas E. Brewton on 05/31 at 08:44 PM
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Blind Paganism

If one’s mind is not clouded by faith in secular paganism, it’s obvious that “green" makes no economic sense. Some pet “green” projects consume more energy than using coal or petroleum and, when all elements of the process are considered, actually add to pollution.

Posted by Thomas E. Brewton on 05/31 at 08:24 PM
Junk Science • (4) Comments • (0) Trackbacks
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All That Glitters Is Not Gold

The public aren’t fooled by the Democrat/Socialist Party’s deliberately deceptive Obamacare PR. Reality is so bad that the Department of Health Education and Welfare feels compelled to spend millions of taxpayers’ dollars mailing a glossy, multi-color advertising brochure touting Obamacare. The brochure gives no specific, useful information; it’s just a political campaign puff piece that continues to misstate the facts. Its cost should be billed to the Democrat/Socialist Party campaign committee.

Posted by Thomas E. Brewton on 05/31 at 03:31 PM
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Sunday, May 30, 2010

Environmentalists' Responsibility

Charles Krauthammer notes that, along with BP, environmentalists have a share of the blame for the Gulf oil blowout.

Posted by Thomas E. Brewton on 05/30 at 07:46 PM
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Thursday, May 27, 2010

Diplomacy As A Children's Game

In the real world of political power struggles, the failure of mission in China by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner demonstrates the fairyland quality of liberal-progressivism’s faith in harmonious world government under the tutelage of socialist intellectuals.

Posted by Thomas E. Brewton on 05/27 at 12:19 PM
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Tuesday, May 25, 2010

Economic Booms And Subsequent Recessions

Ludwig von Mises explains, in Malinvestment, Not Overinvestment, Causes Booms.

A key phrase is: “...an expansion in the production facilities and the production of the heavy industries, and in the production of durable producers’ goods, is the most conspicuous mark of the boom.”

The Fed’s over-expansion of the money supply leads to non-economic investment that has to be liquidated by the recession that inevitably follows.

During the stagflation of the 1970s, investment in commercial real estate was wildly distorted by the Fed’s inflationary over-supply of money. Short term interest rates at times exceeded 20% per annum, and institutional investors and mortgage lenders were demanding at least a 15% per annum return on investment. Most traditional commercial real estate - office buildings, shopping centers, and apartments - couldn’t produce such a high growth rate in net cash flow, because tenants wanted to sign leases with terms of five to twenty five years. The one investment that did qualify, theoretically, was hotels, which could raise their room rents every day, as inflation roared ahead. The result was a massive overbuilding of hotels.

In similar fashion, riding the wave of money the Fed poured into the economy after the stock market’s sharp break in 1986, high tech companies were able to obtain almost unlimited amounts of equity capital, producing the dot-com boom of the 1990s. So much money was seeking any plausible outlet that normal credit and investment standards disappeared. Dot-com startups, with zero sales, obtained hundreds of millions of dollars of venture capital on no more than an idea for a product. When the bubble burst near the end of President Clinton’s second term in the presidency, the nation’s mileage of installed fiber optic cable, for example, was said to be roughly ten times what the market could support.

We all know, of course, the recent repetition of that pattern. Anybody, regardless of creditworthiness, could obtain a mortgage loan and the housing stock, a durable good, ballooned to proportions that the real economy could not support. The Fed’s easy money policy led everyone to assume imprudent amounts of debt. Eventually staggeringly high debt pushed individuals, states, and cities to the brink of bankruptcy and pushed the entire financial structure of the economy to the breaking point.

Exactly the same pattern, based upon some asset class not yet visible, will be repeated in the future, regardless of how many regulations Congress and our bureaucracies create, so long as the Fed is allowed to inflate the money supply in the Keynesian expectation that doing so can prevent unemployment and keep a boom going indefinitely.

Back to summary...

Posted by Thomas E. Brewton on 05/25 at 12:07 AM
Economics • (2) Comments • (0) Trackbacks
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Monday, May 24, 2010

Obama's Brown Shirts

Like Hitler’s Storm Troopers, SEIU labor union thugs take to the streets to intimidate opponents of Obama’s socialization plans.

Posted by Thomas E. Brewton on 05/24 at 11:19 PM
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Stimulus?

Keynesian Obamanomics has delivered the weakest economic recovery in many decades, and the recovery appears to be fading as temporary Federal spending dries up.

Saturday, May 22, 2010

Going Down?

Some climate scientists are now predicting a few decades of global cooling.

Quote:

It’s not exactly Copenhagen or Kyoto, but the 700 scientists attending the fourth International Conference on Climate Change, sponsored by the Heartland Institute, had some chilling news of their own in the most liberal sense.

“Global warming is over — at least for a few decades,” Don Easterbrook, emeritus professor of geology at Western Washington University, told the gathering. “However, the bad news is that global cooling is even more harmful to humans than global warming, and a cause for greater concern.”

Looking at much reduced sunspot activity and considering that the sun is our overwhelmingly largest source of heat, a cycle of global cooling is plausible. Let’s hope that doesn’t give new opportunities for climate “scientists” to embezzle more taxpayer funds.

Posted by Thomas E. Brewton on 05/22 at 11:47 PM
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