READ ABOUT DETROIT AND SOLUTIONS TO ITS PROBLEMS. CLICK HERE.

Thursday, February 23, 2012

Is Ron Paul Correct About Military Non-Involvement?

SEARCH BLOG: WAR and TRADE

The single thing that precludes Ron Paul from gaining wider acceptance among Republicans is his consistent position on the non-use of the military.

By and large, Dr. Paul's position boils down to one that states the military should be used to defend the U.S. ... on U.S. soil.  And gee whiz... sending our military to fight al Qaeda and the Taliban in the Middle East only makes them angrier.

Should the U.S. fight large land wars such as Iraq and Afghanistan... including occupation and nation building?  I think that is misguided.  Should the U.S. refrain from military action against al Qaeda and the Taliban?  I think that is also misguided.  Military action should be aimed at keeping an enemy in chaos and on the defensive until it loses its will to fight.

He would withdraw U.S. forces from the rest of the world and be reactive if there was yet another attack on U.S. soil by militaristic Islamic terrorists.  Possibly, he hopes that such action would convince them that the U.S. was sincere in wanting to live in peace with them and that would dissuade them from their goals of an Islamic-Sharia global empire where nonbelievers... infidels... were treated with contempt, barbarity, and disenfranchisement... like they are in such springtime places as Egypt.

As one of his supporters wrote in a comment:
By the way, my 13-year-old, who reads these comments suggests that you read or watch the Lord of the Rings. Aragorn is a great leader precisely because he is the type of man who does not seek power. Sauron was not an evil person at the beginning. He started off as wishing to impose order on the world. But the power of the ring consumed him and he did become evil. The power in the lesser rings consumed the human kings who possessed them and all of the 'good guys' rejected the One Ring because they understood just how dangerous the power that it represented really was. 
Of course, Tolkien leaned towards anarchy and hated the State just as Nozik did. Perhaps that is why they are held in such regard while the slimy public intellectuals that you appeal to in order to support your narratives are quickly forgotten and held in such low esteem by so many people.
Unfortunately, we do not live in a world of fantasy.  Is the anarchy of fantasy writers a good thing?  How about the chaos of fanaticism?  We live in a world where a single nuclear bomb in the hands of religious-political fanatics can leave the U.S. in shambles.


A "prevent defense" seldom works in football, fantasy, or real life.  That is why Dr. Paul's whole message does not resonate with those who do not live in a fantasy world.  Conservative Republicans love Dr. Paul's economic and limited government positions, but they also understand the enormous risks of his military position.

There is no logical connection between military strength and big government domestic spending programs.  There is no logical barrier created by military strength to free trade and liberty.  Those who attempt to make such connections are simply misguided... illogical.  We can afford to be strong; we can't afford to be weak.

2012 IS HERE

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Obama's Free Birth Control A Red Herring

SEARCH BLOG: HEALTH and GOVERNMENT

The recent flap about the Obama administration wanting to force the Catholic Church to provide free birth control to their employees is a bit of a...

yes... that's a herring... a red herring.

For those of you who don't know the significance of this image with regard to the Obama administration action, here's a little background.

This is a typical ploy of politicians when they find they are facing problematic issues and feel the need to avoid them.  In the case of the Obama administration, it is the President's push for mandating his version of better health care... even if it steps on the Constitutional rights of the Catholic Church [and everyone else].  The "red herring" is that this is being "fair" to the poor and, besides, it will be provided for free by insurance companies.

A few thoughts here:

  • If the Catholic Church is providing health insurance to its employees, the Church is paying for these "free contraceptives" even if the insurance companies are forced to show in their accounting that it is for free.  No insurance is "free."
  • The notion that free birth control is "only fair" is something being pull out of someone's a--.  Because they supposedly can't afford contraceptives?  Hardly.
  • Contraception is widely available and dirt cheap.  If you can buy that Coca Cola, you can buy several contraceptives.

If you got as far as fifth grade, you can do the math.  You can have a really cheap date for less than 40 cents.  If you can't afford that... you shouldn't be having kids.  

How about a little personal responsibility here?  From the CDC.
Unmarried Childbearing(Data are for the U.S.)
  • Number of live births to unmarried women: 1,693,658
  • Birth rate for unmarried women: 50.5 births per 1,000 unmarried women aged 15-44 years
  • Percent of all births to unmarried women: 41.0%
Source: Births: Final Data for 2009, table C Adobe PDF file [PDF - 1.3 MB] 
Well... that just raises the question about whether or not cheap or free contraceptives even are the issue.  Why are women having a dozen children out of wedlock with multiple partners?  Certainly not because they can't afford 40-cent contraception.

Perhaps it is the whole notion that contraceptives are even wanted that is the red herring.  This is a culture of irresponsibility abetted by the U.S. government... and not simply by providing abortions or contraceptive, but by taking away the consequences of irresponsibility... by providing all manner of support... in the name of "fairness."  We are moving to a culture where men are relegated to "sperm donors" and husbands are replaced by a rich uncle... Sam.

But then why is the President pushing this red herring?  Because he can then say he is "doing something" for the poor... that he really "cares".  Sure, he cares for their votes... but he doesn't want anyone to think this through the whole way.

RELATED:

MONDAY, FEBRUARY 20, 2012

2012 IS HERE

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Wednesday, February 22, 2012

Global Warming Heats Up

SEARCH BLOG: GLOBAL WARMING

First there was the "hockey stick" fiasco. [image from www.wattsupwiththat.com]

Then there were two rounds of Climategate and "hide the decline." [image from www.wattsupwiththat.com]





Now there are "global warming dirty tricks" document forgeries. [image from the Heartland Institute]



There is a pattern here to the global warming debate... on the activist side.

On one side are the environmental activists who have strong quasi-religious beliefs... that they hold the scientific truth with regard to climate knowledge because... that's what their computer models tell them.
That reminds me of my youth when I went to Sunday School and all the four-year olds would sing, "Jesus loves me this I know, for the Bible tells me so."  Of course, we were four-year olds and had no idea who Jesus was and what the Bible was other than a black book.  Now the grown-up version is, "Warming harms me this I know, for the models tell me so."  All this with a vague understanding of what's in the computer models and who the master programmers are... and what the real implications of warming or cooling are.
This side is well-funded and politically ensconced.  It sees the ends...  to "control" the climate... justifies the means... massive spending and regulation and outright lying.

******

On the other side are so-called "skeptics."  These are climate scientists, physicists, meteorologists, and other well-educated people who say "not so fast... nothing is ever as simple as it first seems."  These people want a scientific assessment of data and models, not a political pronouncement.
One organization dedicated to the scientific inquiry of climate dynamics is the Heartland Institute.  It's funding is private through contributions... no feeding off the government trough... and minuscule compared with the activists.  It became the target of activists because of their frustration with Heartland's refusal to accept... unconditionally... the political science of global warming and simplistic models based on CO2 as the primary factor affecting climate rather than the actual scientific study of all of the possible factors... including influences deemed "minor" by activists... such as the sun and clouds and ocean currents and land use [deforestation, farming, urbanization, etc.].
Why refuse to accept the so-called IPCC "consensus" projections?  Well, those models have problems; large problems... not the least of which may be using data that doesn't reflect the real world [as shown in the video above].  And the result is the IPCC projections have problems; large problems.

As The Wall Street Journal pointed out:
In this respect, an important gauge of scientific expertise is the ability to make successful predictions. When predictions fail, we say the theory is "falsified" and we should look for the reasons for the failure. Shown in the nearby graph is the measured annual temperature of the earth since 1989, just before the first report of the Intergovernmental Panel on Climate Change (IPCC). Also shown are the projections of the likely increase of temperature, as published in the Summaries of each of the four IPCC reports, the first in the year 1990 and the last in the year 2007.   
From the graph it appears that the projections exaggerate, substantially, the response of the earth's temperature to CO2 which increased by about 11% from 1989 through 2011. Furthermore, when one examines the historical temperature record throughout the 20th century and into the 21st, the data strongly suggest a much lower CO2 effect than almost all models calculate.
Actually, "it appears that the projections exaggerate" is an understatement of the problem for the activists.  The real issue is that there has been no warming for more than a decade.  That does not compute... at least in the way that alarmist models compute.


******


But just to put this in further perspective, we should note that the chart above is comparing projected versus actual temperature variations from long term mean [average].  Since the models used for projections are highly bound to changes in CO2, the IPCC projections are expected.

Joe D'Aleo, a meteorologist and executive director of the ICECAP site, provided the chart below that shows the actual relationship between atmospheric CO2 [right scale - parts per million] and global average temperature variation [left scale - 2 methods].


The relationship between the increase in atmospheric CO2 and global mean temperature variation from the long-term average over the past decade is approximately... zero.  In other words: other stuff happens.
For further discussion about the differences between the UAH and GISS temperature metrics, CLICK HERE.  That's another story of data manipulation, intrigue, and discovery.



So, when models do not compute, what is left is lying, falsification, and obfuscation.


RELATED:

WEDNESDAY, NOVEMBER 18, 2009

2012 IS HERE

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Tuesday, February 21, 2012

Soldier's Last Wish

SEARCH BLOG: WAR and COMMUNITY

A very special video... CLICK HERE TO WATCH.


HT: Dick Pasky

2012 IS HERE

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Michigan Primary Issues - 2

SEARCH BLOG: GOVERNMENT

With the Michigan more-or-less open primary coming in about a week [you have to select a party ballot, but you don't have to be a member of the party], it would be good to look at the issues as seen by the candidates.  Mitt Romney slipping somewhat in the GOP field, but is still near the top.  Here are his positions on the financial issues... from the Mitt Romney website [abbreviated... see website for expanded version].

I've highlighted those bullet-points where I believe there are real opportunities for improving government within the next four years and dimmed those that I think are merely symbolic or horse-before-the-cart points.  Those that need more consideration are left as is.  Some are a combination of these.



CUT SPENDING

Set Honest Goals: Cap Spending At 20 Percent Of GDP
Take Immediate Action: Return Non-Security Discretionary Spending To Below 2008 Levels
Follow A Clear Roadmap: Build A Simpler, Smaller, Smarter Government
1.    The Federal Government Should Stop Doing Things The American People Can’t Afford, Including:
  • Repeal Obamacare — Savings: $95 Billion. 
  • Privatize Amtrak — Savings: $1.6 Billion. 
  • Reduce Subsidies For The National Endowments For The Arts And Humanities, The Corporation For Public Broadcasting, And The Legal Services Corporation — Savings: $600 Million. 
  • Eliminate Title X Family Planning Funding — Savings: $300 Million. 
  • Reduce Foreign Aid — Savings: $100 Million. 
2.    Empower States To Innovate — Savings: $100 billion [block grants; Medicaid]
3.     Improve Efficiency And Effectiveness. Where the federal government should act, it must do a better job.  For instance:
  • Reduce Waste And Fraud — Savings: $60 Billion. 
  • Align Federal Employee Compensation With The Private Sector — Savings: $47 Billion. 
  • Repeal The Davis-Bacon Act — Savings: $11 Billion. 
  • Reduce The Federal Workforce By 10 Percent Via Attrition — Savings: $4 Billion. 
  • Consolidate agencies and streamline processes to cut costs and improve results in everything from energy permitting to worker retraining to trade negotiation.

PRESERVE ENTITLEMENTS 

Social Security: No one at or near the retirement age will see any changes and tax hikes cannot be on the table. Instead, Social Security can be placed on a sustainable trajectory with commonsense reforms: 
  • Gradually raise the retirement age to reflect increases in longevity
  • Slow the growth in benefits for higher-income retirees
Medicare: Medicare should not change for anyone in the program or soon to be in it.  Nor should tax hikes be part of the solution. Reforms must honor commitments to our current seniors while giving the next generation an improved program that offers the freedom to choose what their coverage under Medicare should look like: 
  • Give future seniors a choice between traditional Medicare and many other healthcare plans offering at least the same benefits
  • Help seniors pay for the option they choose, with a level of support that ensures all can obtain the coverage they need; provide those with lower incomes with more generous assistance
  • Allow beneficiaries to keep the savings from less expensive options or choose to pay more for costlier plans
While not identical, Rick Santorum shares many similar ideas with Mitt Romney.  It will be up to the voters to decide which one is more believable and more in line with their thinking... and it may not be just about fiscal matters.

RELATED:

SUNDAY, FEBRUARY 19, 2012

Michigan Primary Issues 



2012 IS HERE

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Monday, February 20, 2012

Avocados Turned Germ Killers

SEARCH BLOG: HEALTH

It appears that Avocados may have greater benefit than being a base ingredient for Tostitos dip during the Super Bowl.

From Eureka Alert:


PhD Jes Gitz Holler from the University of Copenhagen discovered in a research project a compound that targets a particular resistance mechanism in yellow staphylococci. The development of resistance in these specific bacteria is extremely rapid. Bacterial strains that do not respond to treatment have already been found in the USA and Greece.

"I have discovered a natural substance in a Chilean avocado plant that is active in combination treatment with traditional antibiotics. Resistant bacteria have an efflux pump in their bacterial membrane that efficiently pumps out antibiotics as soon as they have gained access. I have identified a natural substance that inhibits the pumping action, so that the bacteria's defence mechanisms are broken down and the antibiotic treatment allowed to work," explains Jes Gitz Holler.


Hmmm, surgery with appetizers.

2012 IS HERE

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Providing Free Contraceptives For All

SEARCH BLOG: WELFARE

From The Detroit News:
Since the national attention is on birth control, here's my idea: If we want to fight poverty, reduce violent crime and bring down our embarrassing drop-out rate, we should swap contraceptives for fluoride in Michigan's drinking water.  [READ FULL ARTICLE HERE]
This bit of sarcasm has gone viral as leftists go bonkers that anyone would even think to write something like that.  Obviously, the article's author, Nolan Finlay, achieved exactly what he wanted to achieve... getting people to... read his article.

2012 IS HERE

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Net Neutrality Nyet

SEARCH BLOG: OBAMA

From Big Government:

Another day, another Barack Obama Administration totalitarian diktat. 
In other words, whatever Obama wants – by any means necessary.Behold Obama’s Securities and Exchange Commission (SEC).  Which last week handed down from on-high a mandate that telecommunications companies AT&T, Verizon and Sprint MUST have Board votes on Network Neutrality. 
SEC to Telcos: Yes, Net Neutrality is a Significant Policy Issue
The problem for Obama’s SEC is – Net Neutrality isn’t even a LEGAL policy issue.  Because Congress has never passed a law making Net Neutrality actual policy.
IF OBAMA CAN'T GET A LAW PASSED, HE WILL BY-PASS THE LEGAL PROCESS.  NO CAP AND TRADE? NO PROBLEM?  THE EPA WILL MANDATE IT.  MAYBE WHAT WE NEED ARE MORE CZARS!
OF COURSE, IF HE DOESN'T LIKE A LAW, HE WILL DIRECT HIS JUSTICE DEPARTMENT TO IGNORE IT.  INTIMIDATION OF VOTERS BY SO-CALLED "BLACK PANTHERS"?  FORGET ABOUT IT.  ENFORCE IMMIGRATION LAWS?  FORGET ABOUT IT.  THE CONSTITUTION?  FORGET ABOUT IT.

2012 IS HERE

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Energy - Obstructionism As Policy

SEARCH BLOG: ENERGY and OBAMA

It started as a fight against a bogeyman.


But Obama supporters said that it just was meant as a "push" toward clean coal.

Then, with the EPA as the point agency, a variety of oil exploration and drilling efforts were prevented after it became clear that the "Cap and Trade" ploy had failed.

The latest obstruction, of course, is the Keystone pipeline which has ground to a halt.  See:
THURSDAY, FEBRUARY 16, 2012Energy Shortages Are Not Real
MONDAY, JANUARY 23, 2012Obama - Keystone Kop
By the way, if you are curious how much energy was obstructed by Obama's interference with the Keystone pipeline, click here.

The question is: can we live with this policy of energy obstructionism?


Well, can we?  Should we have to?

RELATED:
SATURDAY, FEBRUARY 18, 2012No Inflation Or Not

Sunday, February 19, 2012

Michigan Primary Issues

SEARCH BLOG: GOVERNMENT

With the Michigan more-or-less open primary coming in about a week [you have to select a party ballot, but you don't have to be a member of the party], it would be good to look at the issues as seen by the candidates.  Rick Santorum is making the biggest splash right now in the GOP field, so it reasonable to see what he says.  Here are his positions on the financial issues... from the Rick Santorum website.

I've highlighted those bullet-point PROPOSALS where I believe there are real opportunities for improving government within the next four years and dimmed those that I think are merely symbolic or horse-before-the-cart points.  Those that need more consideration are left as is.  Some are a combination of these.


Spending Core Principles
  • Live within our means so that America, our families, and our future generations will have a brighter future unburdened with oppressive debt and high taxation.
  • Prioritize our national security and defense
  • Refocus the federal government on constitutional priorities and parameters
  • Consolidate duplicative programs and agencies
  • Promote competition for provision of essential services
  • Eliminate outdated, ineffective, and wasteful programs
  • Empower State and Local Governments through partnership, block grants, and reserving functions for the States
  • Reform and Modernize Medicare since reducing healthcare costs is a prerequisite for our long term success and economic strength
  • Reforming Social Security which is essential for solvency, sustainability, and real retirement security
Proposals
  • Commit to cut $5 trillion of federal spending within 5 2 years. [REAL, NOT PROPOSED OR BUDGETED SPENDING]
  • Implement Strong America Now reform through Lean Six Sigma management process as a key engine for cutting government waste and improving efficiency.
  • Immediately reduce federal (non-defense discretionary spending) to 2008 levels through across the board spending cuts.
  • Freeze defense spending levels for 5 years and reject automatic cuts.
  • Freeze spending levels for social programs for 5 years such as Medicaid, Housing, Education, Job Training, and Food Stamps, time limit restrictions, and block grant to the States like in Welfare Reform.
  • Repeal and Replace ObamaCare with market based healthcare innovation and competition to improve America’s and Americans health, control costs, improve quality and access, and to keep and create jobs which provide resources for healthcare.
  • Pass a Balanced Budget Amendment to the Constitution capping government spending at 18% of GDP so that Congress and the President will need to balance the budget like Governors are required to do.
  • Pass legislation to reform the Congressional Budget Process and support legislation to require Congress to pass constitutionally required spending bills on time or not get paid the next fiscal year. 
  • Implement Medicare Reforms and Innovation proposed by Congressman Paul Ryan and speed up their implementation to control healthcare costs and improve quality.
  • Reform Social Security and place on a sustainable path by a combination of reforms such as addressing adjusting CPI, dependent benefits and disability income benefits reforms, moving back the retirement age for younger workers, means testing benefits, annual adjustments as needed, and dedicating Social Security payroll taxes to Social Security.
  • Implement reforms and cost savings of up to $100 billion in March 2011 GAO report requested by Senator Coburn listing 34 areas of duplication and waste.
  • Stop implementation of any remaining federal stimulus spending.
  • Freeze pay for non-defense related federal employees for four years, cut workforce by 10% with no compensatory increase in contract workforce, and phase out defined benefit plans for newer workers.
  • Eliminate all energy subsidies and most agriculture subsidies within four years. [distinguish between "subsidies" and normal tax accounting rules]
  • Eliminate funding for Planned Parenthood   [... and other tax-exempt organizations] and use half of the dollars to support adoption instead.
  • Cut EPA resources for job killing regulations and return focus to commonsense conservation and safe and clean air and water.
  • Cut in half the number of State Department USAID employees and US funding for United Nations programs.
  • Eliminate funding for implementation of Dodd/Frank regulatory burdens.
  • Eliminate funding for implementation of ObamaCare.
  • Cut funding for National Labor Relations Board for decision preventing airplane factory in South Carolina.
  • Eliminating funding for United Nations’ agencies which oppose America’s interests and promote abortion and cut the US contribution to the UN in half.
  • Phase out Fannie Mae and Freddie Mac within five years.
  • Sell unproductive and wasteful federal properties.
  • Transition Team will review all spending cut proposals and restructuring reforms of the Heritage Foundation, CATO Institute, American Enterprise Institute, and the Simpson-Bowles Commission for additional savings.
A large part of the tax/spending cycle is that the federal government legislates and then worries about funding... or presumes funding will be available... or uses bogus funding assumptions.  Each piece of new legislation that requires resources should have the funding rational included... and verified by independent accounting [CBO, GAO, and private accounting firms].

Spending cuts should focus first on administration costs and then on core costs.  Administration would include the federal bureaucracy established for the program.  More resources should be allocated for auditing; less for bureaucracy.  Individuals, businesses, and states all use borrowing as necessary for avoiding wasteful disruptions to operations when there are economic problems.  But borrowing should be the exception rather than the standard practice.

Waste and fraud should be the initial primary targets for auditing.  A protected-whistle-blower program that rewards 5% up to $10 million of eliminated waste and fraud should be established.  Whistle-blowers cannot be program administrators.  Retaliation against whistle-blowers would be a felony unless it can be shown that the whistle-blower was lying.

Federal grants and loan guarantees of more than $10 million should be required to have congressional approval... individually, not as part of a jumbo authorization bill.

The point is that all government spending should be subject to ongoing checks and balances... not simply authorized.  Slash and burn spending cuts sound appealing, but usually are counter-productive as was the case in the post-Vietnam military cuts.

FOR EXAMPLE:
In fiscal year 2010, the Centers for Medicare & Medicaid Services (CMS)--the agency that administers Medicare and Medicaid--estimated that these programs made a total of over $70 billion in improper payments. [Government Accounting Office]
One further point: Rick Santorum has stated elsewhere that he would not let his views on abortion color his judgment as President. Several points above refer to targeting funding for abortions.  While I agree in principle, such targeting distracts from the central points of responsible government and sets up strawmen for opposition arguments.

2012 IS HERE

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Saturday, February 18, 2012

No Inflation Or Not

SEARCH BLOG: ECONOMY

Inflation is one of those scare factors that have taken a back seat recently to U.S. politics, Iran and Climate Change.  According to one article at the website Seeking Alpha, inflationary pressures are pretty tame:

  1. For the six month period ending July 2011, the annualized inflation rate for CPI: All Items was 4.1%, and that fell to only 1.8% for the six month period ending last month.
  1. For the three month period ending July 2011, the annualized inflation rate for "food at home" was 5.5% and for the three month period ending January 2012, the annualized inflation rate was only 1.0%.
Bottom Line: Compared to last summer for the three and six month periods ending in July 2011, inflationary pressures fell significantly towards the end of last year and in the first month of 2012 for the three and six month periods ending in January. Inflation for food at home has fallen to only 1% (at an annual rate) for the November-January period.

But... according to another article at that same website:
Prices for food and beverages rose 0.2 percent, up 4.2 percent from a year ago, while housing costs were up 0.1 percent and are now 1.9 percent higher than last year at this time in a report that was unusual insofar as there were no major categories posting price declines, as evidenced by all the red bars extending upward in the graphic above.


Energy and food prices seem to be the culprit for the mixed messages... large year-over-year changes, but small changes last month.  Clothing and transportation prices are increasing rapidly, but those are expenses that can be deferred... unlike heating, electricity, and food.

While gasoline prices are up, natural gas prices are extremely low and this very mild winter has made overall energy costs much more tolerable.

The real pain in energy will be felt when we have another cold winter and oil prices drive up gasoline to even higher levels.



Low inflation now, but....

2012 IS HERE

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Friday, February 17, 2012

A Racist's Plea

SEARCH BLOG: OBAMA

No, this is not a fake video.  CLICK HERE.

2012 IS HERE

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Environment Or Climate - Not The Same

SEARCH BLOG: CLIMATE CHANGE

From windmill farms that are economically unfeasible to solar panel companies with no real market, government continues to try to tell us what is good for us by coming up with "solutions" that solve nothing and cause economic distress to our nation.  The latest effort, headed by Hillary Clinton, is a multi-national effort to control carbon soot, methane, and hydrofluorocarbons.



The environment, the people, and the government would be better served to stop dumping all these efforts into the "global warming" basket.  It is a tired concept and will surely be judged nonsense framed as it is.  Rather than tilting at windmills, the federal government would be better served to work with states and industries to find economical ways to provide abundant energy while being reasonable about environmental concerns... some efforts require some pollution... manageable pollution.

The cost to achieve "environmental" 6-sigma can be significant... the benefits for "climate change" are minuscule.


   

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CO2 Cap and Trade

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)