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Saturday, June 27, 2009

Smart People Being Dangerous

SEARCH BLOG: POLITICS

Smart people are dangerous because they can fixate on one aspect of an issue and ignore the rest.

Perhaps the issue is ensuring that lower income people have their needs taken care of. They make the first presumption that someone else needs to take care of these lower income people. That's the first presumption of the communist philosophy, but it just sort of slips by. Then, since someone else needs to take care of these lower income people, someone else needs to do it through payments to the government that will ensure proper redistribution to these lower income people. That's the second presumption of the communist philosophy.

Are these smart people communists? They would never admit to that. They don't see themselves as that at all. They see themselves as enlightened and compassionate... they have empathy.

Actually, what they have is sympathy and guilt. They feel sorry that these other people have made life choices that have restricted their incomes and capabilities. They feel guilty that their own accomplishments and financial success has allowed themselves to live so well while others are not. It is only fair that some of what people like them have should go to people who are not like them.

Then along comes a smooth-talking fellow who says he can fix the situation.

  • We will all move back into central cities and ride public transportation... and force other people who can't move into central cities to pay much more for their transportation and fuel.
  • We will all move to perfect climates where it is not too hot or not too cold so that we minimize our energy consumption... and force other people who can't afford to live in perfect climates to pay much more for their heating and cooling plus pay more taxes on the higher expenses.
  • We are too busy to volunteer or unwilling to be responsible for selecting a charity that helps people in need, so we will allow government bureaucrats to choose for the rest of us how our money should be used.
Then we are no longer guilty and don't have to be sympathetic anymore because our government and other people will be forced into doing the right thing for those who didn't.

All of those unsympathetic people will get what they deserve... a system that makes them into good people.
H.R. 2454: American Clean Energy and Security Act of 2009
Requires: (1) the Administrator to implement the Energy Refund Program to give low-income households a monthly cash energy refund equal to the estimated loss in purchasing power resulting from this Act....
And that is how smart people elect people like Barack Obama, Nancy Pelosi, and Harry Reid. That's what makes these smart people so dangerous... and their decisions so stupid.

The problem is that Barack and Nancy and Harry don't really share the attitudes of these smart people. Barack and Nancy and Harry are only interested in heading up a system that makes lots of other people dependent on them. They want a system that is so expensive and onerous that other people need the government... with them as leaders... to take care of those other people. How else will people like Barack and Nancy and Harry keep their power and special health care benefits and political perks that other people can't have?

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There is always an easy solution to every human problem—neat, plausible, and wrong.
Henry Louis Mencken (1880–1956)
“The Divine Afflatus,” A Mencken Chrestomathy, chapter 25, p. 443 (1949)
... and one could add "not all human problems really are."
It was beautiful and simple, as truly great swindles are.
- O. Henry
... The Government is on course for an embarrassing showdown with the European Union, business groups and environmental charities after refusing to guarantee that billions of pounds of revenue it stands to earn from carbon-permit trading will be spent on combating climate change.
The Independent (UK)

Tracking Interest Rates

Tracking Interest Rates

FEDERAL RESERVE & HOUSING

SEARCH BLOG: FEDERAL RESERVE for full versions... or use the Blog Archive pulldown menu.

February 3, 2006 Go back to 1999-2000 and see what the Fed did. They are following the same pattern for 2005-06. If it ain't broke, the Fed will fix it... and good!
August 29, 2006 The Federal Reserve always acts on old information... and is the only cause of U.S. recessions.
December 5, 2006 Last spring I wrote about what I saw to be a sharp downturn in the economy in the "rustbelt" states, particularly Michigan.
March 28, 2007
The Federal Reserve sees no need to cut interest rates in the light of adverse recent economic data, Ben Bernanke said on Wednesday.
The Fed chairman said ”to date, the incoming data have supported the view that the current stance of policy is likely to foster sustainable economic growth and a gradual ebbing in core inflation”.

July 21, 2007 My guess is that if there is an interest rate change, a cut is more likely than an increase. The key variables to be watching at this point are real estate prices and the inventory of unsold homes.
August 11, 2007 I suspect that within 6 months the Federal Reserve will be forced to lower interest rates before housing becomes a black hole.
September 11, 2007 It only means that the overall process has flaws guaranteeing it will be slow in responding to changes in the economy... and tend to over-react as a result.
September 18, 2007 I think a 4% rate is really what is needed to turn the economy back on the right course. The rate may not get there, but more cuts will be needed with employment rates down and foreclosure rates up.
October 25, 2007 How long will it be before I will be able to write: "The Federal Reserve lowered its lending rate to 4% in response to the collapse of the U.S. housing market and massive numbers of foreclosures that threaten the banking and mortgage sectors."
November 28, 2007 FED VICE CHAIRMAN DONALD KOHN
"Should the elevated turbulence persist, it would increase the possibility of further tightening in financial conditions for households and businesses," he said.

"Uncertainties about the economic outlook are unusually high right now," he said. "These uncertainties require flexible and pragmatic policymaking -- nimble is the adjective I used a few weeks ago."
http://www.reuters.com/

December 11, 2007 Somehow the Fed misses the obvious.
fed_rate_moves_425_small.gif
[Image from: CNNMoney.com]
December 13, 2007 [from The Christian Science Monitor]
"The odds of a recession are now above 50 percent," says Mark Zandi, chief economist at Moody's Economy.com. "We are right on the edge of a recession in part because of the Fed's reluctance to reduce interest rates more aggressively." [see my comments of September 11]
January 7, 2008 The real problem now is that consumers can't rescue the economy and manufacturing, which is already weakening, will continue to weaken. We've gutted the forces that could avoid a downturn. The question is not whether there will be a recession, but can it be dampened sufficiently so that it is very short.
January 11, 2008 This is death by a thousand cuts.
January 13, 2008 [N.Y. Times]
“The question is not whether we will have a recession, but how deep and prolonged it will be,” said David Rosenberg, the chief North American economist at Merrill Lynch. “Even if the Fed’s moves are going to work, it will not show up until the later part of 2008 or 2009.”
January 17, 2008 A few days ago, Anna Schwartz, nonagenarian economist, implicated the Federal Reserve as the cause of the present lending crisis [from the Telegraph - UK]:
The high priestess of US monetarism - a revered figure at the Fed - says the central bank is itself the chief cause of the credit bubble, and now seems stunned as the consequences of its own actions engulf the financial system. "The new group at the Fed is not equal to the problem that faces it," she says, daring to utter a thought that fellow critics mostly utter sotto voce.
January 22, 2008 The cut has become infected and a limb is in danger. Ben Bernanke is panicking and the Fed has its emergency triage team cutting rates... this time by 3/4%. ...

What should the Federal Reserve do now? Step back... and don't be so anxious to raise rates at the first sign of economic improvement.
Individuals and businesses need stability in their financial cost structures so that they can plan effectively and keep their ships afloat. Wildly fluctuating rates... regardless of what the absolute levels are... create problems. Either too much spending or too much fear. It's just not that difficult to comprehend. Why has it been so difficult for the Fed?

About Me

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Michigan, United States
Air Force (SAC) captain 1968-72. Retired after 35 years of business and logistical planning, including running a small business. Two sons with advanced degrees; one with a business and pre-law degree. Beautiful wife who has put up with me for 4 decades. Education: B.A. (Sociology major; minors in philosopy, English literature, and German) M.S. Operations Management (like a mixture of an MBA with logistical planning)