Ken Nelson

Old bank robber. So old fashioned.
It’s better to have the government rob for you!

Psst… hey kids, pay up!

Starting next year, this typical [66-year-old] couple, receiving the average benefit, will begin collecting a combination of cash and health-care entitlement benefits that will total $1 million over their remaining expected lifetime.

As an untypical 46 year old I expect to pay for the 66 year old for 20 years and then get screwed.

Correction: Get screwed the entire time.

I’m happy to help starving old people. And starving young people. But as needed, not just because they are old, or because they vote.

Now just to clarify…. everybody is getting screwed on this. Young, Old, Unborn. The only people not getting screwed are the really old (80+).

That $550K, if let to roll up as a private investment, in ‘safe’ t-bills would be worth about 1.3 million, not 1 million. So the Feds screwed them out of $300K – not chump change! 

And because the government forces them into Medicare, and screws up the private medical market, all (old and young) pay higher medical costs for less quality service.

And because the government wasted their $550K on vote buying, not saving it as promised, or even just investing it wisely in the growth of the country,  it is likely that the $1,000,00 they are being promised now will not be met.  

And, of course, I get to pay gazillions to keep their votes for Democrats.   And my kids and their kids lose the legacy America once stood for.

All in all, not quite the result of a “great” generation.

The government claims it is a success. Megan McArdle says “nope”.

To put that in perspective, GM had about 75,000 hourly workers before the bankruptcy.  We could have given each of them a cool $250,000 and still come out well ahead compared to the ultimate cost of the bailout including the tax breaks–and over $100,000 a piece if we just wanted to break even against our losses on the common stock.

Of course doing that would have been dumb too. But it does show the point.  Better would have been to let them take their lumps and end up being owned by their investors who would then have incentive to bring the company back to profitability and a higher competitive position.

But that wouldn’t help Democrats would it?

Moore’s Law continues…

The industry has considered 3D transistors for quite some time because of the potential to reduce leakage current and produce more predictable transistor performance characteristics, but the benefits do not end there. Intel’s analysis also demonstrates the potential for faster transistor transitions and lower voltage levels, which all translates into higher-performance and lower power chips. As with traditional planar transistor, Intel has developed various transistor designs to be able to optimise the transistors for power or performance.

http://nplusonemag.com/bad-education   (read in spite of the unfortunate blog sub-title).

N+1 magazine has an article by Malcom Harris that compares (unfavorably) the state of education finance with the housing bubble. At the heart of it… as you would expect, government.

The result is over $800 billion in outstanding student debt, over 30 percent of it securitized, and the federal government directly or indirectly on the hook for almost all of it.

He points out that 40% of students taking on the debt default with in 10 years. Also, alas, the colleges aren’t investing their sales to make their industry provide a better product. Nope. Instead they hire administrators – a startling number of them. By 2014 there will be more administrative staff than instructors at American colleges.

College need not cost this much. And the government certainly shouldn’t continue to foul this market like it does the energy, automotive, and housing markets. But they won’t resist, so it isn’t unrealistic to expect that colleges and college debt will be one of the next bursting bubbles.

In practice it seems clear to me that $50K a year for college is a bad investment that should only be done by those with $50K to burn.  This calculus is done today by people who really plan to borrow, burn the money, and then burn the creditor (me via the govenrment). I want that to end. 

My kids will probably go to college, but only on scholarship if it is an expensive school, and if on my nickel to a reasonably priced school that does not require them to take on any debt.

As a side note… the economic value of most college degrees is nil over just being home schooled to a high level. So in many ways college is a two way bad deal… you pay a lot and don’t get much for it, and you pay a lot for what you could do much cheaper in alternative ways.

I’ll send my kids, at a reasonable price, mainly so they can find a decent spouse and have a bit of fun before adulthood sets in. But they will go to a place where the economics and return on investment are in their favor.  What I would have wasted on an expensive, wasteful school, I’ll save to help them move out of my basement and to overcome the economic disaster their friends grandparents gave them.

Check out this talk on nuclear energy from thorium:

Learn more about it at energyfromthorium.com

So… would our 60 billion wasted on GM have been a better “investment” funding the powering of the world with thorium?  Or buying UAW votes and campaign donations?

Next time you think Obama is a visionary, stop. He’s just a bigger version of the same old same old.

Summary:  A rehash for those of us who followed the financial crisis closely. But still, it was interesting, and once you understand the bias of the filmmaker, useful.

Available on Amazon Video.

Longer:

“Inside Job” purports to explain the financial crisis of 2008/2009.  And it does a fine job skewering credit default obligations, and the host of cronies that revolved in and out of government to make sure investment banks could sell these things.

What the filmmaker wants you to take away from his documentary is that we need more regulation.  So he had, for instance, Barney Frank, on advocating that.  He didn’t cover that Frank is one of the “cronies”.  And Carl Levin. And a host of other Democrat blow hards advocating regulation.

Not that this was a Democrat hit piece. Plenty of Democrats and their appointees were skewered.  Including Obama and his appointees.

And that plethora of targets is why more regulation makes no sense to me, based on the movies’ own evidence. So I want Alan Greenspan regulating the finances? How did that work?  Or Ben Bernake?  Tim Geithner?  Barney Frank? Or Robert Rubin? Or Hank Paulson?  The film presents NO reasonable way that the regulators won’t be corrupted from the start.

Inside Job identifies a host of crooks, financiers, politicians, economists that caused it. But gives the real cause a pass.  What is the real cause?  You.

Yes, you.  If you bought a house speculatively figuring you could flip it, or sell it. If you did so with no money down. With a subprime loan, assuming the house would rise, even if your income didn’t.  If you bought a house to gamble rather than to live in then you caused it.

At the root, all the CDO, tranche, reinsurance, blah blah blah, at the root it is all YOUR debt.

And if you didn’t add debt irresponsibly, did you hold your Senator or Representative accountable on Fannie Mae, or Freddie Mac, or Community ReInvestment Act?  Did you vote for Barnie Frank?  Or Richard Markey?  Or Phil Gramm?

Did you support, basically, the entire system built up from the mid-70’s on that privatized gain while socializing risk?

Then YOU are the real problem.

The filmmaker skips that, instead showing home speculators as victims.

The movie is worth watching. But a thinking viewer will look past the red meat the documentary tosses out about some very bad, irresponsible people, and know that those people just were like many of us, only on a larger scale, later in the irresponsibility chain.

I wasn’t particularly happy with the House Republican leadership on the recent “spending cuts” bill that actually raised spending. I don’t like being lied too.

Another lie being spread is that not raising it would force us to default on our Treasury bond obligations.

Not true!

We have hundreds of billions of dollars going through our system at any time. We have PLENTY of money to pay our bondholders and other guaranteed obligations (Social Security for instance).  We just have to choose to do so.  And we would have to choose who not to send money too.

Given Obama’s treatment of GM bondholders, perhaps he thinks screwing lenders is “normal” – but it isn’t.

So if you here that default is the issue… it isn’t.  Not wanting to make choices about spending really is the heart of the matter.

Apparently the rise in gas prices corresponds most strongly (almost perfectly) to the drop in the value of the dollar:

Michael Pento, senior economist at Euro Pacific Capital in New York, says there is an almost perfect negative correlation between the falling dollar and oil prices—minus-0.9 to be exact.

"When you have negative correlations that strong, it’s not hard to understand that the reason why we’re having this price spike in commodities is primarily because of the weaker currency and not because of shortages of oil or international tensions or global growth," Pento says.

I say… why choose? Obama and his Democrats work every day to tighten supply. And they work night and day to make our money worth less.   Throw in a storm or two and $6.50 a gallon seems likely.

When will we have a government that recognizes that energy = quality of life?  And that works night and day to get us more of it?

Of course the end game might be that we just burn dollars in steam engines. There should be plenty or the worthless things around in the future.

The metaphor would apply if we bought the RV for the oldster driving it from future money.

I like the Tea Party. I go to Tea Party events. And at every one of them I meet morons that seem just as stupid as somebody I’d meet at an SEIU event.

Confirmation comes in today’s McClatchy poll where 70% of Tea Party members polled said that Medicare and Medicaid shouldn’t be cut to reduce the deficit.

The Tea Party skews old and when I’ve been at these events I’ve wondered what they hell they wanted to cut.  They are getting all the money anyway.  They voted it to themselves from the future.

I’ve left the Tea Party events disheartened about our nations future largely because of the simply moronic attitude they take that we can just ignore the money they are getting, and somehow cut out “waste” and “fraud” and cover the bills.

They haven’t a clue.

Yet… they are the best we have, which alas, isn’t saying much while it says all you really need to know.

I’m reading Atlas Shrugged. And I’m struggling.  It is a good book. I’m interested in the story, the characters, but…. but it may be the wrong time for me to read it.

It just seems too timely. A nation at a nadir.  Incompetence everywhere. The productive excoriated while being fed upon.  It just strikes a bit too close to home.  It is so timely it almost isn’t fiction.

I may finish it, or I may not.  I’ve no need to be reminded of what I can see every day.

Perhaps I’ll switch to a SciFi book where they’ve invented a nuclear battery so that you don’t have to fill your flyer up very often.  That would be entertaining.

Meanwhile…

Paterson, NJ laid off 25% of its police force.

And society didn’t crumble.

Legalize drugs, stop sitting around waiting to give people speeding tickets, and put real criminals in jail for a long long time and you don’t need all those coppers.

I suspect, strongly, that the rest of Paterson’s municipal work force could be cut even more without societal crumbling.

Right now I view municipal, county, and state workers as a financial threat that far outweighs any gain they provide. Cut them!

I continue to be unsatisfied with Republicans on the government spending issue.  The Democrats, at least, know what they are buying with our money – votes for Democrats.

I care less about what a deficit we have than what what we are getting for the resources forcibly taken.

I can handle a deficit if it it was created giving me free lifetime energy via advanced nuclear techniques.  Or roads that would handle  the driving for me.

The real problem with our spending is that it is unproductive. That will kill us, even if the books balance.

I don’t think Tea Party people get this either. But they are closer to getting it because most unproductive government spending buys votes.

Here is a hint… if the only reason to support a government program is because it gives you money, it probably isn’t productive and should be eliminated.

Commenter Carl will no doubt say that “politics is about deciding our investments, who can decide, other than vote”.  And that is somewhat true.

The real problem we have is structural, Constitutional, and unsolvable by Congress.  Our “rules”, i.e. The Constitution, permit free rides for those who vote themselves one. That leads to ruin, a place we are well on the path to.

What to do?  Change the structure, of course.  This means going to the heart of the federal spending ability – the Income Tax.  It needs to be eliminated, or made into a flat tax rate, or even better – a flat fee.   Voters need to feel the pain of our “investments” so that they can decide if the return is worth the cost.

Will this happen?  Only after the current system collapses. Which it will. Mathematically it has too.

Via Instapundit…

10 Things You The Government Shouldn’t Do on Gas Prices

2. Don’t drag on drilling permits. As the only country in the world that places a majority of its territorial waters off-limits to oil and gas exploration, at the very least we should be drilling in the areas where we do have access. Removing the de facto moratorium on drilling would immediately increase supply, create jobs, and bring in royalty revenue to federal and state governments.

Guess what… Obama is 0 for 9 of them and is thinking hard about the 10th (releasing oil from the Strategic Petroleum Reserve).

We couldn’t have elected a worse President for the problems facing us than the loser “leading” us now.

When we need honesty, he is dishonest. When we need more energy, he cuts production of it. When we need freedom he takes it away. When we need less corruption, he gives us more.

I can forgive people that were fooled into voting for this moron, but I can’t forgive or trust people that still think he is a good President.

Geoff, at Ace of Spades, says the new unemployment numbers really mean bad news on 5 of 6 statistics, and that:

 we should have 5 million more people in the labor force than we do today

That’s a lot of people who are feeling the change and losing the hope. 

Canada doubled our job production. Not the return we were promised on our trillion dollars of spending was it….?

As I look around the global scene, pretty much every player is screwed up. Us included.

That, to me, smacks of opportunity. If we get OUR act together, we can reassert our global economic dominance, and and reap the benefits that brings. And we can do so when it is hardest for our competitors to respond.  It’s like in a running race, when everybody faces the hill, and the smart runners PASS on the hill. That is where opportunity lies….

Readers of my past posts know I believe we have structure problems, stemming from flawed amendments to our Constitution, that have taken us to this brink of disaster.  And my preference would be to eliminate those amendments (16th, 17th) and clarify others (14th). 

But that will take time, and given the political gerrymandering, may not even be doable.

So what should we do, short of Constitutional solutions?

• Simplify and broaden our tax base. I mean bone simple. No deductions, except perhaps charity (and I’m dubious of that).  Two low rate tiers – everybody has to pay something.   This would spark economic activity. Due to competition it could be the BEST thing we could do for the rest of the world, as they follow us to fiscal sanity.
• Cut our defense obligations. Leave Iraq. Leave Afghanistan. Leave Korea. Leave Japan. Leave Germany. Leave England. Return our foreign policy to one focused on our direct needs/benefits. And one that treats our enemies with lethal precision.
• Outlaw public unions, and any kind of political donation (money or service) from public sector employees.
• Require super majorities to spend on any kind of public or private sector bailout.

And long term, we have to get rid of the temptations presented to our political class by the wallet exposing 16th amendment, and demographic shaping 14th amendment.

If we do most, but preferably all, of the above bullet items, we will see both economic troubles AND our competitor nations in the rear view window.

And as a bonus… freedom will continue to ring.