Silver Goes Crazy

Back in 1994, I was publishing a zine called Asylum For Shut-Ins. (Yes, the name was a blatant rip-off of the TV show of the same name. I was trying to find the creators of it!) Anyhow, I offered a deal to subscribers, as an experiment: Take 90% off the subscription rate of $10/year by sending $1 in face value pre-1965 silver US coins.

I actually had several takers. In those days, silver traded at less than $5/oz, so my $1 in pre-1965 quarters, which are 90% silver, was worth close to $4. It was a good deal for subscribers.

That less-than-$5/oz price held for some ten years before edging upwards to $15/oz in 2006, then $20/oz in 2008. It dipped down hard to $10/oz in 2009. Since then, it's off to the races. Yesterday, it closed at $46.06! Link to silver price history.

So, that $1 in coins I got for a subscription, which I still have, is worth $41.54- until today's new high is set. That's a 1000% gain since acquiring 17 years ago. Yes, I would do this over and over, all day long.

Problem is, it only reflects a devaluing of our dollar. I'm not getting rich here. I'm preserving some value. I have crabbed and crabbed about inflation, especially at the stimulus when it happened about inevitable inflation. I don't know why that clarion cry, so widely issued by libertarians, was so widely dismissed. I dunno: $4 gas? Food prices going up?

I only wish I was in better position to heed my own advice. I did buy some silver when it was at $20 last year. Bought some this year at $30. I'm very glad that I hung on to every coin I got from the Asylum experiment! I imagine very few people hold metals. I'd be interested to know the percentage of Americans that have physical possession of gold or silver.

Oh, What A Relief

I feel so much better on this news from CNN:

The Great Recession ended in June 2009, according to the body charged with dating when economic downturns begin and end.

But the news is little comfort to the millions of Americans still out of work, underwater on their mortgages or uncertain about the future.

Yeah, that's a great comfort. I've been "working" in my chosen field the past year, but if I clear more than 15% of what I cleared in 2007, I'll be astonished. I'm employed, but I'm underemployed, and the current political climate wherein business owners lack confidence in the economic recover such that they are not expanding has greatly impacted me. I began looking forward to new budgets for 2011 in February of 2010.

I hope the people on the margins like this are enraged by the news and show up at the polls to punish incumbents. I'm obviously motivated enough without this kick in the pants, but it does feel like insult to injury.

Speaking to a town hall meeting in Washington, President Obama said the announcement about the end of the recession is further proof that steps taken early in his administration, including the economic stimulus package, were the right ones. But he cautioned it does not mean that the economy has recovered.

"Obviously, for the millions of people who are still out of work, people who have seen their home values decline, people who are struggling to pay the bills day to day, [the recession is] still very real for them," he said.

Thanks for the acknowledgment, Prez. Now, if you could send some kind of signal, anything at all, that businesses aren't an ox to be gored, maybe, just maybe, we'll start to see the kind of confidence enter the picture that you thought a "stimulus" package might engender. Alas.

This tells the story on whether or not stimulus was the 'right move'.

What? There's Waste?

On the drive from NYC to Cleveland last week, I saw the highway signs referred to in this CNN article:

A state senator from Ohio says his state is spending $1 million on road signs to advertise the use of stimulus money for road projects. In other words, the state is using your money to tell you it's spending your money.

State Sen. Tim Grendell, R-Ohio, calls it a waste of taxpayer dollars. The road signs he's concerned about display words such as "Project Funded by the American Recovery and Reinvestment Act" Some road projects have two signs, and some don't have any at all, but the signs aren't cheap.

The bigger signs can cost as much as $3,000 each, according to Grendell, who says this is just a big "thank you" to the Obama Administration.

He told CNN, "Send a fruit basket if you want to say 'thank you.' Don't waste a million dollars saying 'thank' you to Washington for giving us back our tax money."

Grendell says the message here is that stimulus dollars are "being spent stupidly."

Ohio's Department of Transportation says that criticism misses the point -- that this is all about transparency.

Oh, it's transparent all right. It's easy to see that money is being flushed down the shitter. Why not just post big signs campaigning for Obama's re-election? Yeah. Send the fruit basket instead. That it is called the 'American Recovery and Reinvestment Act' allows one to see through what a gigantic load of BS it is.

I've seen the same signs in southern Indiana, on I-64 between Louisville and Evansville, if memory serves. My reaction then was that it was more a big gesture of patting onesself on the back. The angle of the waste of it didn't even occur to me. $3,000 per sign? Wow.

Keynesian Spending Is Practical?

A recent comment asserted that free market advocates are idealogues, while Keynesian advocates are realists. I think that's crap. Both are idealogues. That's okay with me. If you don't have ideals to draw from, what is your compass? One has to solve a problem by some means, and I think for most people, their idealism becomes their realism. Certainly, it does for me. But in our goofy world, one is deemed practical when they cross their ideology.

The real outcomes are what matters. So, what of the stimulus spending? First off, let's not forget that stimulus spending is both a Bush and Obama solution. From Chris Edwards, at the Cato Institute:

In his Brookings Institution speech yesterday, President Obama called for more Keynesian-style spending stimulus for the economy, including increased investment on government projects and expanded subsidy payments to the unemployed and state governments. The package might cost $150 billion or more.

The president said that we’ve had to “spend our way out of this recession.” We’ve certainly had massive spending, but it doesn’t seemed to have helped the economy, as the 10 percent unemployment rate attests to.

It’s not just that the Obama “stimulus” package from February has apparently failed. The total Keynesian stimulus is not measured by the spending in that bill only, but by the total size of federal government deficits.

I'm struck by the chart... which I cannot seem to add right now. It's worth clicking through to.

I would argue that Keynesian economics is dogma for Democrats, (and for the liberal Republicans like Bush) but doesn't appear very practical in terms of boosting the economy. We haven't even seen the inflation yet. Look out! Perhaps it has been very practical in boosting this President's poularity, even while it did nothing for Bush. It's all very curious. In any case, maybe it's time for Obama to become truly practical by today's odd standard of the word, and start adopting some market solutions.

Bailouts & Stimulus Are The Problem

You've probably heard of Peter Schiff- the man who was the town crier, telling anyone who would listen that the sub-prime market would collapse, and then it did. Here's Schiff on the Daily Show:

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Peter Schiff
www.thedailyshow.com
Daily Show Full Episodes Political Humor Newt Gingrich Unedited Interview

Republicans set the fire. Democrats brought gasoline to 'fix' it. You need the Libertarians now more than ever.

H/T to Eric Schansberg for the clip!

Build It And They Will Come, Eh?

(Crawfordsville, IN)- One of the current 'stimulus' spending targets is high-speed passenger rail service, and as a railfan, it caught my attention that one corridor singled out for attention is Cincinnati to Chicago, through Indianapolis. From an Indy Star report:

The administration identified the corridor linking Chicago, Indianapolis and Cincinnati as one of 10 where the president wants to see efficient train service zipping along at 79 mph to 150 mph.

Dennis Hodges of the Indiana High Speed Rail Association said passenger routes from Indianapolis to Cincinnati and Chicago now run at about 45 mph; upgraded tracks and trains would raise that speed to 110 mph.

Crawfordsville in on that current route. Amtrak currently serves this run, so I thought it might be meaningful to look at its' current standing. From Amtrak's website:

One can currently commute from Crawfordsville on Amtrak's Cardinal #51 train. It departs Crawfordsville at 7:28am, and arrives in Chicago at 10:35am, all times local. The cost is $19 for a regular coach seat. Coming home, Hoosier State #850 departs Chicago at 5:45pm and returns to Crawfordsville at 10:35pm. The return trip is another $19.

Pretty workable, if you have a late starting work day. It's a long day, but what else would you expect, commuting from 150 or so miles away? These are the only trains that pass through all day, in either direction, so do make sure to be on time!

How many people ride? Hard to say definitively, but here's the evidence I could collect in the late morning:

Amtrak's current station is the thing that looks like a bus shelter, standing here in front of the old Monon RR station, that is now the home to a massage therapist and other businesses. There is no staff here: No ticket agent, no porter. There isn't even a rest room.

Amtrak's dedicated portion of this parking lot in Crawfordsville has 12 spaces. 5 are occupied by commuters. One is my car.

Who knows? Maybe there is a lot of walk-up ridership. Maybe each vehicle had seven people carpooling. Maybe, though, people choose not to ride.

The National Association of Railroad Passengers has statistics on Amtrak's various routes. According to NARP, 31,099 fares rode the Hoosier State in 2008. See pg 37 of NARP's factsheet. For comparison? According to the most recent (2002) INDOT count, the least travelled part of I-65 north of Indianapolis saw 26,330 vehicles PER DAY.

I know how it goes with these programs: If they had a lot of riders, it would stand as proof of the public's support and therefore the worthiness of public funding. As it shows few riders, it's proof that if only the service were upgraded- made to run faster, in this case- surely more people would ride. No matter what, though, shovel more money at it.

There is no comparing Europe's high-speed rail to American passenger service. I've ridden Spain's AVE train from Madrid to Sevilla, and it's a hoot. It runs at about 180mph. Total trip time is about 2 hours. What makes it different is that the rails are dedicated solely to the AVE train. No slow passenger trains to clog the rails with, and no freight trains.

In the US, and on the former Monon at Crawfordsville, the rails are owned by the freight companies, here, by CSX. Passenger service is second fiddle. The railroads had been trying to rid themselves of passenger service from the 1950s until finally in 1971 Amtrak was formed. Until then, the federal government forbade American railroads from eliminating passenger service, forcing those companies to operate these trains at a loss for years or even decades.

The Administration's plan is to upgrade the rails on existing routes. Well, that's nice. I'm sure the freight railroad will appreciate that gift. But it doesn't change the fact that the freight trains still take priority over passenger trains. Do this math for me: A passenger train capable of 200mph is going to go how fast if trailing a freight train going 35mph?

So, what are we going to do? Kick the freight trains off their own tracks? Build new dedicated corridors? Anybody think that land acquisition through Chicago will be easy or cheap?

Notice, I haven't even begun to talk about the operational subsidies that allow Amtrak to survive. A quick look at Amtrak's balance sheet shows that passenger fares barely cover salaries and benefits to Amtrak employees, and don't even cover bothersome things like train operation (you know, the core of the enterprise), or fuel.

In 2007, Amtrak lost more than a billion dollars. Who ate that? We did. Those of us who don't even ride.

Tea Party? Count Me In!

I will be participating in the Indianapolis Tea Party, proudly. Sure, the message isn't about 'taxation without representation' as it was in Boston back in 1773, but the spirit seems the same to me. It's about justice.

The Colonists objected because they lacked a literal voice in government and in the taxes that affected them, because it was unjust that they shouldn't have a voice. Tax protesters are up in arms primarily about the bailouts, started with the Bush Administration, and continued by the Obama Administration.

My position is that it is unjust to transfer wealth to private corporations, or individual citizens, to relieve them from the predictable outcomes of their bad decisions and often fraudulent actions.

I don't believe it was just that a single penny was sent to AIG, or Bank of America, or Fannie Mae or Freddie Mac, or to any mortgage holder. I do not want to see the Capital Improvement Board bailed out in Marion County, either.

It was wrong to wantonly print money in order to give it largely to politically connected friends, calling it 'stimulus'. It was unjust to devalue our currency this way when the Bush Administration did it, and unjust again when the Obama Administration did. It doesn't work, besides.

In sum, democracy can be a real sham on freedom when some citizens are declared losers by a majority of representatives, and others winners. It's worse than taxation without representation, because you want to have faith that your representative is one who defends you, rather than sells you out to some corporate interest that contributed mightily to his campaign warchest. As the Franklin quote goes, 'Democracy must be more than two wolves and a sheep voting on what to have for dinner,' yet that's exactly where we are. Representatives gather to decide who should have his pocket picked, for the benefit of another.

That should make any decent person mad as hell. Hence, a protest.

There are a few lessons that seem to have been learned from the 'Revolt at the Statehouse' from a couple weeks back, where the result was diffuse, and the Libertarians were singled out for mockery. I like these items from the Indianapolis Tea Party website:

RULES FOR A PEACEFUL PROTEST
NO STICKS ON SIGNS (Statehouse Grounds rule)
No violence, no racism, no law-breaking
Absolutely no obscene words or gestures
Treat Law Enforcement Officers with respect
Do not block sidewalks and streets with your bodies or signs
Avoid conflicts and any physical contact with any opponents. Our 1st Ammendment Rights are their rights, too
Take the high road....be CIVIL at all times

SIGN IDEAS

FRIENDLY REMINDER:
Stick to the point and stay on message! No abortion, marriage issues, or Obama bashing signs. We need to come across united and focused
Use black, red, or dark blue markers for visibility
Anticipate the adversary’s tactics and create a few counter-point slogans

These are the kinds of things protesters at large economic summits could learn a thing or two about. Seattle and Quebec come to mind. And, even though I agreed with their basic position, Iraq anti-war protesters have often lost me on some of their messages. I'm glad to see an admonition not to attack President Obama. The important thing is to focus on policy, not people. (More on that later.)

Old Boss, New Boss Chronicles

The more I see of President Obama, the more I think he's the four-year extension of the Bush Administration McCain was supposed to be. Likewise, the Democratic Congress. I love this passage, from a NY Post article:

The push to get the bill through before the holiday weekend was so frantic, members of Congress didn't have a chance to read all 1,071 pages of the document before they could vote.

"In a perfect world it would have been nice to have had more time to process it," said Ilan Kayatsky, a spokesman for Rep. Jerrold Nadler (D-NY).

Perfect? Heck, in a good world, we read the bills we're voting on. Is there a Democrat out there who, with a straight face, can express joy over not reading the bill prior to voting? You want to open the door to corruption? This is a GREAT way to do it. Allow staffers to write god-knows-what, and then vote on it.

Well, this is as good a chance as any to remind you of Downsize DC's "Read The Bills Act".

There's a basic principle at stake here. America was founded on the slogan, “No taxation without representation.” A similar slogan applies to this situation:
“No LEGISLATION without representation.”

We hold this truth to be self-evident, that those in Congress who vote on legislation they have not read, have not represented their constituents. They have misrepresented them.

Obama's promise to post bills for five days before passage is nice, but it's empty transparency. Posting the stimulus five days before VOTING on it would have been the real deal. It kinda reminds me of my favorite Che Guevara quote:

"We can hold the trials any time, so long as the executions happen now".

Honest government is unafraid of debate, unafraid of scrutiny, and is in no rush to get the signatures on the dotted lest anyone read the fine print. Alas.

The Sky Is Falling!

President Obama is going all-in on the first hand dealt to him. That does one of two things in a poker tournament- it doubles your chip stack (political capital) or it sends you out of the tournament (see you in four years). That's a heavy gamble to take with a nation. From Obama's press conference:

So what I'm trying to underscore is what the people in Elkhart already understand: that this is not your ordinary run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression. We've lost now 3.6 million jobs, but what's perhaps even more disturbing is that almost half of that job loss has taken place over the last three months, which means that the problems are accelerating instead of getting better.

and

If there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don't know where their next paycheck is coming from.

So, was 2008 the worst year since the Great Depression? Hardly.

Now, I like science rather than articles of faith. Show me the facts. Take a look at the Misery Index. You will see that 2008's numbers are actually better than the first year of Clinton's first term, better than all four years of George HW Bush's term, the first five years of Reagan's presidency, all four years of Carter's term, all three years of Ford's term, and three of the five Nixon years.

Obama is appealing to emotion, not facts. Rather than speaking to someone who has lost his job- something you can do any day of any year, of any decade, of any century- I'd rather look at the economy as a whole, as a nation, by judging the facts.

Now, if I have it straight, the Left likes to say that it prefers facts over faith, science over emotion. (See: 'global warming', etc.) Well, stick to it!

The definition of propaganda and 'assertion' are useful to review here, especially since Obama said the debate over whether or not to have a stimulus is 'over'.

Full disclosure: I don't know where my next paycheck is coming from. I have had one new job come in since October 1, where I like to keep a portfolio of 50-60. Hardly a time to panic, though. It's been a time to get my house in order, to position for the next opprtunities. But, if Obama directs you to talk to me, I'll tell you that he's full of shit. I spent my time when making money paying off my debt and lining up a savings- something everybody else should have done. It shouldn't be my problem if they blew their dough on entertainment, and failed to pay down debt and save. One's financial woes are self-created, beginning with how one chose to educate himself, continuing forward to the decisions they made in better times, including what they bring to the table as a potential employee, and whether or not one should run through their money, or rack up unsustainable debt, as though it wholly impossible that the money could stop.

What Would A Libertarian Do?

President Obama really alienated me last night with his press conference/sales pitch for the 'stimulus' package, going out of his way to single out people who would prefer we did little or nothing in terms of government intervention. This had to be a jab at libertarians, because Republicans had made an Exhibit 'A' case for their brand of economic interventions and 'stimulus', especially in the first 6 years of the Bush Administration.

When is it better to do nothing? When the 'solution' is worse than the malady. In the words of Harvard's Jeffrey A. Miron, via CNN:

When libertarians question the merit of President Obama's stimulus package, a frequent rejoinder is, "Well, we have to do something." This is hardly a persuasive response. If the cure is worse than the disease, it is better to live with the disease.

In any case, libertarians do not argue for doing nothing; rather, they advocate eliminating or adjusting policies that are bad for the economy independent of the recession.

Biron's actions would include the following:

1. Repeal the Corporate Income Tax
2. Increase Carbon Taxes While Lowering Marginal Tax Rates
3. Moderate the Growth of Entitlements
4. Eliminate Wasteful Spending
5. Withdraw from Iraq and Afghanistan
6. Limit Union Power
7. Renew the U.S. Commitment to Free Trade
8. Expand Legal Immigration
9. Stop Bailing out Businesses that Took on Too Much Risk

That's hardly a list of 'do nothing', in any case.

American leadership has gotten positively batty with overreactions and crisis. In this sense, Obama is a real continuum from Bush.

Is it bad out there? Sure, it's bad. Is the solution the same as taking all the money and going to Vegas and putting it all on 'red'? No, but it isn't far off, either.

Dog And Pony Show For Failure

It was mere months ago that Republicans were alarmists. So, what is President Obama's tone? It was mere months ago that President Bush's borrow-and-spend was failed policy. So, why are we to believe it is no longer failed policy?

So, here is Obama in my state, sounding alarmist, and promoting proven failure. From an Indy Star report:

Campaigning for action in the most dire terms, President Barack Obama said Monday that if Congress does not quickly pass an economic stimulus package, the nation will slip into a crisis so deep that “we may be unable to reverse” it.

“We can't afford to wait. We can't wait to see and hope for the best,” Obama said in Elkhart, Ind., a community reeling in job losses during the recession that has defined Obama's young presidency. “We can't posture and bicker and resort to the same failed ideas that got us in into this mess in the first place.”

Sorry- If Congress does pass this badly misnamed 'stimulus', that is when we slip into crisis that we may not be able to reverse. That is when we take Bush's recession and turn it into Obama's depression.

I am not suggesting 'doing nothing', although allowing failing businesses to go under would be good. It would be justice, for one thing. It would punish bad business practices, which would also be good. Rewarding failure with bailouts ensures continued bad business practices.

If you want to stimulate the economy, stop dragging it down with so many taxes. Reduce Federal spending by 25% or more, and stop ALL borrow-and-spend.

But, how about the panic in Obama's rhetoric? Where is the steady voice of Obama The Campaigner?

Out of the Frying Pan, Into the Fire

Or, as The Who sang, "Here comes the new boss, same as the old boss".

Then-candidate Obama was 100% correct when he described then-President Bush's bailout as 'Bush's failed economic policy of borrow-and-spend'.

Unfortunately, President Obama calls the same economic policy 'stimulus'.

In what meaningful way is it different from what Bush was doing? Are we going to hear a peep of criticism from Democrats about this?

I doubt it. In an Indy Star story covering Obama's planned visit to Elkhart, we see what 'stimulus' is all about. Pork, and paying off constituency groups, at the expense of the nation.

"Instead of focusing on a stimulus that will continue to open up the credit markets and create jobs, this bill spends billions on Democrats' wish-list projects," Indiana Rep. Mark Souder said last month after voting against the House version of the package. Souder, a Republican, represents part of Elkhart County.

The Bush bailout was spent on Republican cronies. The Obama bailout will be spent on Democratic cronies. The country will continue to slide towards depression. Thanks for nothing. Is this what 'change' amounts to? Different cronies? Is that the best we could do?