Uncertainty Is Not the Problem

Nice to see a REAL businessman speaking out against our socialist/fascist president's policies - at least to this day, he can still be open with his thoughts, as, after all, Obama's intellectual (sic) predecessors FDR and Woodrow Wilson simply had them imprisoned.

The author (who was an enthusiastic Obama supporter in 2008) makes the compelling and unassailable case that it exactly this president's open war against capital that has depressed our economy and will keep it so until he is consigned to the ash-heap of history.

After all, that is also exactly happened in the 30's and 40's under FDR...T

Many commentators blame our continuing economic woes on "uncertainty." They allege that recent and anticipated dramatic policy changes make business planning difficult, and that this is retarding growth and employment. This view is not wrong—but our main problem is not the uncertainty surrounding new policies. It is the policies.

Consider two uncertain situations. In the first, our business is waiting to find out the location decision for a customer's new industrial plant, so we know where to build our new supply facility. Until this is resolved, we will not invest in building nor will we hire staff. In the second situation, we know we are in for some pain, someone is going to make our business less productive and profitable, but we do not yet know how much. Planning is marginally more difficult, but the main reason we will not grow in the second situation is that investment is less attractive regardless of the precise resolution of uncertainty.

In the first case, uncertainty is the obstacle. Once it is resolved, we invest. In the second case, uncertainty is a small part of the problem. The large part is simply that bad things are happening. The day we are told "well, it's exactly a 30% hit to productivity and profits," all uncertainty is resolved—yet we will still not invest or hire.

The Obama administration's economic policies have defenders. For instance, New York Times columnist Paul Krugman will tell you the stimulus helped, and we didn't have enough. I disagree. I will tell you the stimulus was wasteful and politicized, and the American people, not being idiots, know they will have to pay for it eventually. People adjust their plans to account for the additional debt heaped on them, meaning lower investment and consumption.

I will also tell you Dodd-Frank, with its enshrining of too big to fail and its large regulatory costs, is an albatross. I will add that ObamaCare's gigantic new entitlement has hurt. I will throw in that massive additional regulatory costs being foisted upon business is an extra drain on the economy. I would definitely say that the disregard for law during the auto-company "bankruptcies" has long-lasting negative effects. I'd even throw in that the president's demonization of business has been harmful. Finally, I'd say the expected tax increases, even if only on the "super rich"—defined as anyone still gainfully employed—weigh upon us. So what does all this have to do with uncertainty and whether that's our problem? Consider a hypothetical.

Imagine, right now, we passed a giant additional wasteful stimulus. Imagine all the rules of Dodd-Frank were revealed and are even more stifling than we expected. Imagine we doubled the new health-care entitlement and expanded government control of health care more than previously predicted, but set all the details today. Imagine assorted government agencies passed more burdensome regulations than we anticipated, increasing both the cost of doing business and the drag of crony capitalism. But all uncertainty was resolved by passing them today.

Next imagine that the president promised, in no "uncertain" terms, to up his hectoring of business in perpetuity. Further, imagine we passed higher taxes going forward on everyone but, again, we settled it for certain right now. Finally, imagine we committed ourselves to no entitlement reform ever. Is all this good or bad? Well, uncertainty has been eliminated, but it sounds pretty darn bad.

Now let's go the opposite way and consider good policies surrounded by uncertainty. Imagine we will move from here toward free-market health-care reforms appropriate for a free people. We will reduce government spending and our debt, letting people spend their own money as they see fit. We will lower taxes across the board for individuals and businesses, and we'll reduce and simplify deductions.

Imagine even more that we'll make grown-up decisions and reform entitlements to levels we might possibly afford. Now imagine that while we know the direction of each of these policy changes, alas, we are very uncertain about how far these wonderful ideas will go. Imagine this uncertainty is even higher than it is around today's bad policies. Would these changes, uncertainty and all, make things better or worse? Well, it seems pretty clear that should these changes occur in any nontrivial fashion, you would have to duck to get out of the way of the ensuing economic boom, regardless of the uncertainty.

Focusing on "uncertainty" takes our eyes off the ball. We should not seek clarity about the many new drags on our economy. We should seek to have the administration cease and desist, then reverse them.

Mr. Asness is the managing and founding principal of AQR Capital Management
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Down With Big Government, Big Business, Big Labor

You see, they couldn't get away with it this time, in this age, in these days of constant information. Of the Internet, of Rush Limbaugh, FOX News, and REAL history being written and sold at Barnes & Noble: not the pap we were fed in school in the 70's. It's all over for Osama and the socialists/progressives, and this article, in keeping with my theme this week, lays out exactly WHY it is over for them, by telling the truth about what happened in the New Deal and the LBJ fiasco's...T

Some of the most important things in history are things that didn't happen -- even though just about everyone thought they would.

Recent example: Scads of liberals gleefully predicted that the financial crisis and deep recession would destroy Americans' faith in markets and increase their confidence in big government. Many conservatives gloomily feared they were right.

Hasn't happened. If anything, public opinion has moved in the other direction, with most Americans rejecting the stimulus package and the health care bill, denying that government action is needed to address global warming, expressing negative feelings about labor unions.

How to explain this? One way is to see the public's reaction as opposition to governance by an alliance of Big Units -- Big Government, Big Business and Big Labor.

In the 1930s, Americans supposedly lost faith in markets and rallied to government. But if you go back and look at public opinion polling then, you find something rather different. You find majorities grumbling about Big Government, scorning Big Business and opposing Big Labor.

The 1940s were different. Facing the threat of total war, Franklin Roosevelt transformed himself from "Dr. New Deal" to "Dr. Win the War." He fostered cooperation between Big Government, Big Business and Big Labor. Roosevelt was brilliant at selecting, from all these sources, the best men (and women) for jobs he considered important.

The result was a war effort that was brilliantly successful. America was the arsenal of democracy, vanquishing its enemies and inventing the atomic bomb. Big Unit governance gained enormous prestige and held onto it for a generation after the war.

The result was prosperity but also stasis. The Big Government of 1970 looked a lot like the Big Government of the 1940s. The same Big Businesses that dominated the Fortune 500 list in 1940 did so in 1970. The list of Big Labor unions remained pretty much the same.

Around 1970, these Big Units lost their edge. Big Government got mired in wars on poverty and in Vietnam. Big Business got hidebound and bureaucratic. Big Labor started to shrink.

Starting around 1980, the country began to revive. Big Government lowered taxes and deregulated transportation and communications. Entrepreneurs and investors replaced stodgy corporate managements with new companies and new products.

The conformist "organization man" Americans of the 1950s were replaced by non-conformist innovators, risk-takers and creators who made a new economy that central planners could never have envisioned. Bill Gates and Steve Jobs didn't wait for those at the top of Big Units to tell them what to do.

Big Business changed: The Fortune 500 list of 2010 doesn't look anything like that of 1970. Big Labor almost vanished: Most union members today are public employees.

The Obama Democrats, faced with a grave economic crisis, responded with policies appropriate to the Big Unit America that was disappearing during the president's childhood.

Their financial policy has been to freeze the big banks into place. Their industrial policy was to preserve as much as they could of General Motors and Chrysler for the benefit of the United Auto Workers. Their health care policy was designed to benefit Big Pharma and other big players. Their housing policy has been to try to maintain existing prices. Their macroeconomic policy was to increase the size and scope of existing government agencies to what looks to be the bursting point.

What we see is Big Government colluding with Big Business and trying to breathe life into Big Labor.

Some of this can be defended. The Obama Democrats are right in pointing out that the TARP financial bailout was the product of the George W. Bush administration, and they may well be right that it would have been disastrous to allow Citibank to fail.

But Big Unit policies are not a good fit for a country that has grown out of the wreckage the Big Units made of things in the 1970s. They freeze poorly performing incumbents in place, and they don't provide the breathing room for small units to start up and grow.

In the meantime, the Big Units are not performing as well as they did for Dr. Win the War. The visibly flagging economy and the slapdash stimulus and health care bills have left most voters ready to take a chance on the still reviled Republicans. The unanswered question is, will the Republicans have an effective alternative to Big Unit governance?
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This Will Not Stand: Newt On the Passage of Obamacare

Things to remember on this frightful day: This bill is as blatently unconstitutional as were the NRA and APL before it, respectively, which were struck down by the high court

First, Osama-care is an extra-constitutional violation of the 9th & 10th amendments. The 10th amendmentafter all, says this: that the " powers not granted to the national government nor prohibited to the states by the constitution of the United States are reserved to the states or the people. "

Secondly, and more importantly in this case, is Osamacare's dependance on the commerce clause to justify it's individual mandate the we must all purchase governmant mandated insurance or face jail time. Here is the text, in part: (Article I, Section 8, Clause 3) the United States Congress shall have power "To regulate Commerce with foreign Nations, and among the several States

This was meant to mean that individul states could not discriminate against each other in eeconomic ways such as tarriffs, taxation, and quotas etc...and certaibly NOT as a mechanism to allow for federal control over individuals actions and choices!

Obama, Reid, and Pelosi are progressive fascists who have simply shredded what remains of our federal system, and many states are preparing legislation to opt out of obamacare.

So either our Supreme court invalidates this illegal legislation, or a new States rights movement renders it moot. In any event, it will not stand...T

This will not stand.

No one should be confused about the outcome of Sunday's vote

This is not the end of the fight it is the beginning of the fight.

The American people spoke decisively against a big government, high tax, Washington knows best, pro trial lawyer centralized bureaucratic health system

In every recent poll the vast majority of Americans opposed this monstrosity

Speaker Pelosi knew the country was against the bill. That is why she kept her members trapped in Washington and forced a vote on Sunday.

She knew if she let the members go home their constituents would convince them to vote no.

The Obama-Pelosi-Reid machine combined the radicalism of Alinsky, the corruption of Springfield and the machine power politics of Chicago.

Sunday was a pressured, bought, intimidated vote worthy of Hugo Chavez but unworthy of the United States of America.

It is hard to imagine how much pressure they brought to bear on congressman Stupak to get him to accept a cynical, phony clearly illegal and unconstitutional executive order on abortion. The ruthlessness and inhumanity of the Obama-Pelosi-Reid machine was most clearly on display in their public humiliation of Stupak.

The real principles of the machine were articulated by Democratic Congressman Alcee Hastings who was impeached and removed from the bench as a federal judge, before being elected to the House when he said ""There ain't no rules here, we're trying to accomplish something. . . .All this talk about rules. . . .When the deal goes down . . . we make 'em up as we go along."

It is hard for the American people to believe their leaders on the left are this bad.

They are.

The American people will not allow a corrupt machine to dictate their future.

Together we will pledge to repeal this bill and start over

Together we will prove that this will not stand

2010 and 2012 will be among the most important elections in American history

These elections will allow us to save America from a leftwing machine of unparalleled corruption arrogance and cynicism

Sunday was one more step in the fight against a "Washington knows best" and "Washington should run everything" attitude.

Let us turn now to the Senate to continue this fight for real reform, for real self government, and for policies that create jobs, improve health outcomes, and increase freedom.

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GOP Should Run Against the Power of the Center

Image by Getty Images via Daylife

The argument has been frustrating.

We have the Colin Powell types demanding we draw and quarter the Rush Limbaugh's and abandon conservatism. It's just not fashionable, you see! We should just manage big government better than the democrooks.

Then there are the purists. Preferably start a new party, but at the very least, kick all the RINO's and McCain's to the curb! The republicans are worse than the democrats and must all lose, so that we can then win.

I've always thought both of these schools of thought were self defeating, for yes, we need to stand for limited government and constitutional jurisprudence, but there will never be enough of us to form a lasting majority. We must get better at teaching, explaining, and finding thoughtful, principled candidates, as well as finding some answer to the leftist, statist media monopoly that feeds the cancer of socialism that has befallen us. Reagan is the prototype. Idealistic, educated, dedicated to a purpose, not to a career, and yet appealing to centrists and democrats because he could explain conservatism in simple ways that people are instinctively drawn to and can't ignore.

Mr. Barone has hit on a perfect message to which we can only hope the GOP is listening!...T

"So I think Republicans today should be less interested in moving toward the center and more interested in running against the center. Here I mean a different "center" -- not a midpoint on an opinion spectrum, but rather the centralized government institutions being created and strengthened every day. This is a center that is taking over functions fulfilled in a decentralized way by private individuals, firms and markets.

...To govern is to choose, as John F. Kennedy said, and those in charge of these new centralized institutions are making choices that inevitably favor some and hurt others. Unsurprisingly, the politically well connected tend to get the favors. Banks forced to take government money are now blocked from paying it back and in the meantime must direct funds where the government wants them to go...when government gets this intertwined with the private sector, when it makes decisions not based on neutral economic criteria but by what is at best guesswork about the allocation and valuation of vast amounts of capital, bailout favoritism and crony capitalism are inevitable.

...It's arguably good policy as well as good politics to run against this over-powerful center. Bailout favoritism and crony capitalism not only misallocate economic resources, they also sap faith in the fairness of our institutions. After World War II, Democrats wanted to retain wartime high taxes, pro-union labor laws, and wage and price controls -- all manipulatable for political benefit by political insiders. Republicans ran in 1946 on the theme of "Had enough?" and won big enough majorities to lower taxes, revise labor laws and abolish controls.

The 1946 Republicans didn't move to the center. They ran against the power of the center and permanently redefined where the center of the political spectrum was. That's a path today's Republicans might want to consider.
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Random Thoughts

Two thoughts stuck me full force like a shot of espresso at 7AM while reading this piece - the 1st being the feeling of slowly having the wool pulled collectively over our eyes...and this one:

"Socialists believe in government ownership of the means of production. Fascists believed in government control of privately owned businesses, which is much more the style of this government. That way, politicians can intervene whenever they feel like it and then, when their interventions turn out badly, summon executives from the private sector before Congress and denounce them on nationwide television."

...T - Thanks to James/AKA CornetJim for this one!

Random thoughts on the passing scene:

I am so old that I can remember when music was musical.

Now that the federal government says that it will stand behind the warranties on General Motors' automobiles, does that make you more likely or less likely to buy a car from GM? If you were a rising young executive with a promising future, would you be more likely or less likely to go to work for a company where politicians can fire you?

We have become such suckers for words that politicians can spend our tax money like a drunken sailor, provided they call it "investment." At least the drunken sailor is spending his own money but people look down on him because he doesn't call it "investment."

Barack Obama seems determined to repeat every disastrous mistake of the 1930s, at home and abroad. He has already repeated Herbert Hoover's policy of raising taxes on high income earners, FDR's policy of trying to micro-manage the economy and Neville Chamberlain's policy of seeking dialogues with hostile nations while downplaying the dangers they represent.

We seem to be moving steadily in the direction of a society where no one is responsible for what he himself did but we are all responsible for what somebody else did, either in the present or in the past.

The famous editorial cartoonist Herblock could write as well as draw. In one of his books, he said something like: "You too can have the soothing feeling of nature's own baby-soft wool being pulled gently over your resting eyes." I think of that every time I see Barack Obama talking.

It has long been said that uncertainty is the hardest thing for a market to adjust to. No one can generate uncertainty as much as the government, which can change the rules in midstream or come out with some new bright idea at any time, as the current administration has already demonstrated.

We have now reached the truly dangerous point where we cannot even be warned about the lethal, fanatical and suicidal hatred of our society by Islamic extremists, because to do so would be politically incorrect and, in some European countries, would be a violation of the law against inciting hostility to groups.

Perhaps the scariest aspect of our times is how many people think in talking points, rather than in terms of real world consequences.

Barack Obama's favorable reception during his tour in Europe may be the most enthusiastic international acclaim for a democratic government leader since Neville Chamberlain returned from Munich in 1938, proclaiming "peace in our time."

How a man who holds the entire population of a country as his prisoners, and punishes the families of those who escape, can be admired by people who call themselves liberals is one of the many wonders of the human mind's ability to rationalize. Yet such is the case with Fidel Castro.
What does "economic justice" mean, except that you want something that someone else produced, without having to produce anything yourself in return?

Perhaps the way President Obama will reduce the deficit is by making more presidential appointments of people who will pay the back taxes they owe, in order to get confirmed by the Senate.

Liberals seem to think that they are doing lagging groups a favor by making excuses for counterproductive and self-destructive behavior. The poor do not need press agents. They need the truth. No one ever said, "Press agents will make you free."

If I were Secretary of the Treasury Timothy Geithner, I would not sign any long-term lease on a home in Washington.

Socialists believe in government ownership of the means of production. Fascists believed in government control of privately owned businesses, which is much more the style of this government. That way, politicians can intervene whenever they feel like it and then, when their interventions turn out badly, summon executives from the private sector before Congress and denounce them on nationwide television.

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EU leader condemns US ‘road to hell’

Franklin D. Roosevelt (via last.fm)

Two things here: One, it's not just "right wingers" who believe Obama is giving us worldwide socialism - it's much of the rest of the world, too!

The other, second point is that he is right. Roosevelt DID cause the great depression to last for over a decade! GDP was no larger in 1940 than it was in 1930. Anyone who had money would have been a fool to invest it when FDR was taking %90 of all cash in the system!

Also, no, Financial Times, it's NOT just "a view held by a small handful of right wing economists" that FDR is to blame - unless you include Milton Friedman and thousands of mainstream economists worldwide!...T

European Union hopes for a new era in relations with the US were thrown into chaos on Wednesday when the holder of the EU presidency condemned American remedies for the global recession as “the road to hell”...

“The US Treasury secretary talks about permanent action and we, at our spring council, were quite alarmed at that . . . The US is repeating mistakes from the 1930s, such as wide-ranging stimuluses, protectionist tendencies and appeals, the Buy American campaign, and so on,” he told a European parliament session in Strasbourg. “All these steps, their combination and their permanency, are the road to hell.”

Other leaders of EU member states, including Angela Merkel, Germany’s chancellor, disagree with US calls for big fiscal stimuli to battle the recession. But they have couched their opposition in more diplomatic language than Mr Topolanek’s.

Mr Obama has vigorously opposed the view that the Great Depression was caused by too much spending, rather than too little, a view held by a small handful of rightwing economists.
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Obama's Stimulus: A Colossal Waste?

So now even liberal economists think spending a Quadrillion dollars of taxpayer money on pork and democrat party causes is a big waste of money? Now?! Where were they before it was passed into law?!

I have been watching with interest all these cable news shows, doing program after program speculating on a forthcoming depression, on how spending wildly leads to hyper inflation via 70's Argentina, on how tax increases in a steep recession are historically guaranteed to deepen and prolong the downturn...again I ask: "Where were they?" when this communistic clown, with zero public record, was running virtually unopposed for the presidency of the United States of America?!

And now, ladies and gentlemen, our Great Socialist leader is going to balance the budget...balance the budget?! Did you not just spend a trillion dollars sir?! a trillion dollars? Have you no shame? At long last, sir, have you no shame? none at all?! ;)

And doing so by raising taxes on business, on capital gains (goodbye Dow Jones!), on the incomes of those that produce jobs, and by radically cutting the military? Isn't this the same clown that said we needed more troops in Afghanistan? That we should invade Pakistan?!

No dear readers, this revenue will be used to spend, spend, spend even more on pork, on welfare, on Union causes, on recruitment of illegal immigration, on government activism, and on inflating the size of our bloated government bureaucracy, because you see, they do all vote democrat, don't they?

Joseph Goebbels once opined that for a lie to be successful, it must be brazen, bold, and colossal, so as to be immune from rational dismissal, by rational thinking people. The BIG LIE...

We have in office as President a liar, a thief, and a communist of Orwellian proportion. May our nation be strong enough to outlast him. Jimmy Carter was an amateur in his shadow...T

WASHINGTON -- Judged by his own standards, President Obama's $787 billion economic stimulus program is deeply disappointing. For weeks, Obama has described the economy in grim terms. "This is not your ordinary run-of-the-mill recession," he said at his Feb. 9 news conference. It's "the worst economic crisis since the Great Depression." Given these dire warnings, you'd expect the stimulus package to focus almost exclusively on reviving the economy. It doesn't, and for that, Obama bears much of the blame.

The case for a huge stimulus -- which I support -- is to prevent a devastating downward economic spiral. Spending is tumbling worldwide. In the fourth quarter of 2008, the U.S. economy contracted at a nearly 4 percent annual rate. In Japan, the economy fell at a nearly 13 percent rate; in Europe, the rate was about 6 percent. These are gruesome declines. If the economic outlook is as bleak as Obama says, there's no reason to dilute the upfront power of the stimulus. But that's what he's done.....
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New White House Logo Unveiled

Socialism - Power - Quadrillions - Revenue

...after taking heat from the drive-by press during the campaign for misappropriating, arrogantly some say, the new deal era National Recovery Act (NRA) logo, president Osama Bin Hussein unveiled his new logo for the new socialist Utopian America!...T