Thursday, March 25, 2010

Analogous to...

I stumbled across an essay the other day by George Orwell, and I spent some time trying to process the essay; what about this story insisted I pay attention. I'm posting it here in full. I should add, however, that, since there's no need to let this long beautiful essay dominate the page, please click the read more link at the end of this excerpt to read the entire essay.


Shooting an Elephant

In Moulmein, in lower Burma, I was hated by large numbers of people—the only time in my life that I have been important enough for this to happen to me. I was sub-divisional police officer of the town, and in an aimless, petty kind of way anti-European feeling was very bitter. No one had the guts to raise a riot, but if a European woman went through the bazaars alone somebody would probably spit betel juice over her dress. As a police officer I was an obvious target and was baited whenever it seemed safe to do so. When a nimble Burman tripped me up on the football field and the referee (another Burman) looked the other way, the crowd yelled with hideous laughter. This happened more than once. In the end the sneering yellow faces of young men that met me everywhere, the insults hooted after me when I was at a safe distance, got badly on my nerves. The young Buddhist priests were the worst of all. There were several thousands of them in the town and none of them seemed to have anything to do except stand on street corners and jeer at Europeans.

All this was perplexing and upsetting. For at that time I had already made up my mind that imperialism was an evil thing and the sooner I chucked up my job and got out of it the better. Theoretically—and secretly, of course—I was all for the Burmese and all against their oppressors, the British. As for the job I was doing, I hated it more bitterly than I can perhaps make clear. In a job like that you see the dirty work of Empire at close quarters. The wretched prisoners huddling in the stinking cages of the lock-ups, the grey, cowed faces of the long-term convicts, the scarred buttocks of the men who had been Bogged with bamboos—all these oppressed me with an intolerable sense of guilt. But I could get nothing into perspective. I was young and ill-educated and I had had to think out my problems in the utter silence that is imposed on every Englishman in the East. I did not even know that the British Empire is dying, still less did I know that it is a great deal better than the younger empires that are going to supplant it. All I knew was that I was stuck between my hatred of the empire I served and my rage against the evil-spirited little beasts who tried to make my job impossible. With one part of my mind I thought of the British Raj as an unbreakable tyranny, as something clamped down, IN SAECULA SAECULORUM, upon the will of prostrate peoples; with another part I thought that the greatest joy in the world would be to drive a bayonet into a Buddhist priest’s guts. Feelings like these are the normal by-products of imperialism; ask any Anglo-Indian official, if you can catch him off duty.

One day something happened which in a roundabout way was enlightening. It was a tiny incident in itself, but it gave me a better glimpse than I had had before of the real nature of imperialism—the real motives for which despotic governments act. Early one morning the sub-inspector at a police station the other end of the town rang me up on the phone and said that an elephant was ravaging the bazaar. Would I please come and do something about it? I did not know what I could do, but I wanted to see what was happening and I got on to a pony and started out. I took my rifle, an old .44 Winchester and much too small to kill an elephant, but I thought the noise might be useful IN TERROREM. Various Burmans stopped me on the way and told me about the elephant’s doings. It was not, of course, a wild elephant, but a tame one which had gone “must.” It had been chained up, as tame elephants always are when their attack of “must” is due, but on the previous night it had broken its chain and escaped. Its mahout, the only person who could manage it when it was in that state, had set out in pursuit, but had taken the wrong direction and was now twelve hours’ journey away, and in the morning the elephant had suddenly reappeared in the town. The Burmese population had no weapons and were quite helpless against it. It had already destroyed somebody’s bamboo hut, killed a cow and raided some fruit-stalls and devoured the stock; also it had met the municipal rubbish van and, when the driver jumped out and took to his heels, had turned the van over and inflicted violences upon it.

The Burmese sub-inspector and some Indian constables were waiting for me in the quarter where the elephant had been seen. It was a very poor quarter, a labyrinth of squalid bamboo huts, thatched with palmleaf, winding all over a steep hillside. I remember that it was a cloudy, stuffy morning at the beginning of the rains. We began questioning the people as to where the elephant had gone and, as usual, failed to get any definite information. That is invariably the case in the East; a story always sounds clear enough at a distance, but the nearer you get to the scene of events the vaguer it becomes. Some of the people said that the elephant had gone in one direction, some said that he had gone in another, some professed not even to have heard of any elephant. I had almost made up my mind that the whole story was a pack of lies, when we heard yells a little distance away. There was a loud, scandalized cry of “Go away, child! Go away this instant!” and an old woman with a switch in her hand came round the corner of a hut, violently shooing away a crowd of naked children. Some more women followed, clicking their tongues and exclaiming; evidently there was something that the children ought not to have seen. I rounded the hut and saw a man’s dead body sprawling in the mud. He was an Indian, a black Dravidian coolie, almost naked, and he could not have been dead many minutes. The people said that the elephant had come suddenly upon him round the corner of the hut, caught him with its trunk, put its foot on his back and ground him into the earth. This was the rainy season and the ground was soft, and his face had scored a trench a foot deep and a couple of yards long. He was lying on his belly with arms crucified and head sharply twisted to one side. His face was coated with mud, the eyes wide open, the teeth bared and grinning with an expression of unendurable agony. (Never tell me, by the way, that the dead look peaceful. Most of the corpses I have seen looked devilish.) The friction of the great beast’s foot had stripped the skin from his back as neatly as one skins a rabbit. As soon as I saw the dead man I sent an orderly to a friend’s house nearby to borrow an elephant rifle. I had already sent back the pony, not wanting it to go mad with fright and throw me if it smelt the elephant.

The orderly came back in a few minutes with a rifle and five cartridges, and meanwhile some Burmans had arrived and told us that the elephant was in the paddy fields below, only a few hundred yards away. As I started forward practically the whole population of the quarter flocked out of the houses and followed me. They had seen the rifle and were all shouting excitedly that I was going to shoot the elephant. They had not shown much interest in the elephant when he was merely ravaging their homes, but it was different now that he was going to be shot. It was a bit of fun to them, as it would be to an English crowd; besides they wanted the meat. It made me vaguely uneasy. I had no intention of shooting the elephant—I had merely sent for the rifle to defend myself if necessary—and it is always unnerving to have a crowd following you. I marched down the hill, looking and feeling a fool, with the rifle over my shoulder and an ever-growing army of people jostling at my heels. At the bottom, when you got away from the huts, there was a metalled road and beyond that a miry waste of paddy fields a thousand yards across, not yet ploughed but soggy from the first rains and dotted with coarse grass. The elephant was standing eight yards from the road, his left side towards us. He took not the slightest notice of the crowd’s approach. He was tearing up bunches of grass, beating them against his knees to clean them and stuffing them into his mouth.

I had halted on the road. As soon as I saw the elephant I knew with perfect certainty that I ought not to shoot him. It is a serious matter to shoot a working elephant—it is comparable to destroying a huge and costly piece of machinery—and obviously one ought not to do it if it can possibly be avoided. And at that distance, peacefully eating, the elephant looked no more dangerous than a cow. I thought then and I think now that his attack of “must” was already passing off; in which case he would merely wander harmlessly about until the mahout came back and caught him. Moreover, I did not in the least want to shoot him. I decided that I would watch him for a little while to make sure that he did not turn savage again, and then go home.

But at that moment I glanced round at the crowd that had followed me. It was an immense crowd, two thousand at the least and growing every minute. It blocked the road for a long distance on either side. I looked at the sea of yellow faces above the garish clothes-faces all happy and excited over this bit of fun, all certain that the elephant was going to be shot. They were watching me as they would watch a conjurer about to perform a trick. They did not like me, but with the magical rifle in my hands I was momentarily worth watching. And suddenly I realized that I should have to shoot the elephant after all. The people expected it of me and I had got to do it; I could feel their two thousand wills pressing me forward, irresistibly. And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man’s dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd—seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he destroys. He becomes a sort of hollow, posing dummy, the conventionalized figure of a sahib. For it is the condition of his rule that he shall spend his life in trying to impress the “natives,” and so in every crisis he has got to do what the “natives” expect of him. He wears a mask, and his face grows to fit it. I had got to shoot the elephant. I had committed myself to doing it when I sent for the rifle. A sahib has got to act like a sahib; he has got to appear resolute, to know his own mind and do definite things. To come all that way, rifle in hand, with two thousand people marching at my heels, and then to trail feebly away, having done nothing—no, that was impossible. The crowd would laugh at me. And my whole life, every white man’s life in the East, was one long struggle not to be laughed at.

But I did not want to shoot the elephant. I watched him beating his bunch of grass against his knees, with that preoccupied grandmotherly air that elephants have. It seemed to me that it would be murder to shoot him. At that age I was not squeamish about killing animals, but I had never shot an elephant and never wanted to. (Somehow it always seems worse to kill a LARGE animal.) Besides, there was the beast’s owner to be considered. Alive, the elephant was worth at least a hundred pounds; dead, he would only be worth the value of his tusks, five pounds, possibly. But I had got to act quickly. I turned to some experienced-looking Burmans who had been there when we arrived, and asked them how the elephant had been behaving. They all said the same thing: he took no notice of you if you left him alone, but he might charge if you went too close to him.

It was perfectly clear to me what I ought to do. I ought to walk up to within, say, twenty-five yards of the elephant and test his behavior. If he charged, I could shoot; if he took no notice of me, it would be safe to leave him until the mahout came back. But also I knew that I was going to do no such thing. I was a poor shot with a rifle and the ground was soft mud into which one would sink at every step. If the elephant charged and I missed him, I should have about as much chance as a toad under a steam-roller. But even then I was not thinking particularly of my own skin, only of the watchful yellow faces behind. For at that moment, with the crowd watching me, I was not afraid in the ordinary sense, as I would have been if I had been alone. A white man mustn’t be frightened in front of “natives”; and so, in general, he isn’t frightened. The sole thought in my mind was that if anything went wrong those two thousand Burmans would see me pursued, caught, trampled on and reduced to a grinning corpse like that Indian up the hill. And if that happened it was quite probable that some of them would laugh. That would never do.

There was only one alternative. I shoved the cartridges into the magazine and lay down on the road to get a better aim. The crowd grew very still, and a deep, low, happy sigh, as of people who see the theatre curtain go up at last, breathed from innumerable throats. They were going to have their bit of fun after all. The rifle was a beautiful German thing with cross-hair sights. I did not then know that in shooting an elephant one would shoot to cut an imaginary bar running from ear-hole to ear-hole. I ought, therefore, as the elephant was sideways on, to have aimed straight at his ear-hole, actually I aimed several inches in front of this, thinking the brain would be further forward.

When I pulled the trigger I did not hear the bang or feel the kick—one never does when a shot goes home—but I heard the devilish roar of glee that went up from the crowd. In that instant, in too short a time, one would have thought, even for the bullet to get there, a mysterious, terrible change had come over the elephant. He neither stirred nor fell, but every line of his body had altered. He looked suddenly stricken, shrunken, immensely old, as though the frighfful impact of the bullet had paralysed him without knocking him down. At last, after what seemed a long time—it might have been five seconds, I dare say—he sagged flabbily to his knees. His mouth slobbered. An enormous senility seemed to have settled upon him. One could have imagined him thousands of years old. I fired again into the same spot. At the second shot he did not collapse but climbed with desperate slowness to his feet and stood weakly upright, with legs sagging and head drooping. I fired a third time. That was the shot that did for him. You could see the agony of it jolt his whole body and knock the last remnant of strength from his legs. But in falling he seemed for a moment to rise, for as his hind legs collapsed beneath him he seemed to tower upward like a huge rock toppling, his trunk reaching skyward like a tree. He trumpeted, for the first and only time. And then down he came, his belly towards me, with a crash that seemed to shake the ground even where I lay.

I got up. The Burmans were already racing past me across the mud. It was obvious that the elephant would never rise again, but he was not dead. He was breathing very rhythmically with long rattling gasps, his great mound of a side painfully rising and falling. His mouth was wide open—I could see far down into caverns of pale pink throat. I waited a long time for him to die, but his breathing did not weaken. Finally I fired my two remaining shots into the spot where I thought his heart must be. The thick blood welled out of him like red velvet, but still he did not die. His body did not even jerk when the shots hit him, the tortured breathing continued without a pause. He was dying, very slowly and in great agony, but in some world remote from me where not even a bullet could damage him further. I felt that I had got to put an end to that dreadful noise. It seemed dreadful to see the great beast Lying there, powerless to move and yet powerless to die, and not even to be able to finish him. I sent back for my small rifle and poured shot after shot into his heart and down his throat. They seemed to make no impression. The tortured gasps continued as steadily as the ticking of a clock.

In the end I could not stand it any longer and went away. I heard later that it took him half an hour to die. Burmans were bringing dahs and baskets even before I left, and I was told they had stripped his body almost to the bones by the afternoon.

Afterwards, of course, there were endless discussions about the shooting of the elephant. The owner was furious, but he was only an Indian and could do nothing. Besides, legally I had done the right thing, for a mad elephant has to be killed, like a mad dog, if its owner fails to control it. Among the Europeans opinion was divided. The older men said I was right, the younger men said it was a damn shame to shoot an elephant for killing a coolie, because an elephant was worth more than any damn Coringhee coolie. And afterwards I was very glad that the coolie had been killed; it put me legally in the right and it gave me a sufficient pretext for shooting the elephant. I often wondered whether any of the others grasped that I had done it solely to avoid looking a fool.

--George Orwell (1939)
Read Orwell's entire essay


A mob [Entitlement Slaves] has gathered. In full possession of its spite and ire for the behemoth [the Constitution] determined to tear down what these squatters have built up, the mob looks to the Imperial [Liberalism], his long carbine over one shoulder, five fat slugs in his shirt pocket-- not unlike five smooth stones and a sling --to bring down this "destructive" giant and replace it with the giant facade of greater personal liberty.

The Imperial doesn't have to shoot the elephant but his growing boot of colonial serfdom has been so long on Liberty's throat it seems best to put the beast-- our Constitution --out of its misery. The mob behind him-- entitlement slaves --both hating the hand that supports them and loving him for the boons he grants them, salivate at the prospect of stripping the carcass. He doesn't have to shoot the elephant but he's oppressed the unwashed for so long he both sees himself as their protector and beneficent lord. He knows better than the pachyderm what nature has to say about freedom, and balance. And in the end botches the killing, forcing it to suffer a prolonged and painful death.


I find the parallels here to be curious: The Mob, ignorant and both distrustful and dependent upon the Imperial. The Elephant struggling to live the life it was meant to live in the face of the Imperial who sees himself as superior and justified in killing the law the elephant represents, and the Mob who wants what it wants, the Elephant be damned. I don't think the Imperial understands what he's done. And the Mob can't think beyond the meat they've hacked from freedom's corpse.

George Orwell later wrote something that perfectly describes this scenario:


War is Peace. Freedom is Slavery. Strength is Ignorance.


Are we there yet?

Monday, March 22, 2010

[insert intemperate thoughts about president & congress]

Channeling my inner Michelle...

For the first time in my adult life I am ashamed of my country.
More specifically, I am ashamed of every conservative or republican who, in '06 and '08, voted democrat to teach the Republican party a lesson. Congratulations, you've fucked your country. You've fucked us all. Elections have consequences, and what happens next is all your fault.

Welcome to the end of representative democracy in America. Welcome to totalitarianism in the United States of America. The only comfort I derive from the raping of our Constitution is that you too will suffer.

And I hope it tastes like dust and ash for the remainder of your pathetic miserable days.

Wednesday, March 17, 2010

Obama's Impending "Raw Deal"

He may have been a constitutional professor, but realistically, did he actually know the subject matter he taught? or was it some post he was assigned to or awarded, to which he thought, 'cool! this'll help me out when i run fo prez!' Thus far he's not shown us any adroitness in his preserving or defending the Constitution. Quite the contrary, actually. Instead he appears hell bent to shake it to its very foundations, and give us something wholly new-- a raw deal.

So, his grasp on the constitution is tenuous, okay. But there's another issue wherein he's doing this country another grave disservice-- our economy, and how best to manage its present intricacies-- and the present cold hard realities to which he seems completely oblivious.

Here's a man sworn to preserve and defend the Constitution. The man whom America is asked to trust in his leadership. And yet he can't even grasp simple economics. On top of which he's seemingly incapable of telling the truth. Prime example: on Monday Obama spoke in Ohio to a tiny crowd and said this:

"How many people are getting' insurance through their jobs right now? Raise your hands? A'right. Well, a lot of those folks, your employer, it's estimated, would see premiums fall by as much as 3,000%, which means they could give you a RAISE!"

If Obama genuinely believes this he is a fool. A grand spectacle of a fool. If he doesn't he's a liar. And, of course, anyone with a modicum of common sense knows that passing the healthcare bill will not allow premiums to go down 'as much as 3000%'. As I said, anyone who believes this is a fool. The man who repeats this tripe is a liar. Don't believe me? Ask Dick Durban (D), Illinois:

"Anyone who would stand before you and say, "Well, if you pass health care reform next year's health care premiums are going down," I don't think is telling the truth."

Ergo, Obama is a liar.

Here's the truth. Our economy cannot sustain the debt this healthcare bill will incur. In 2008 the CBO predicted the Social Security surplus would peter out in 2017, but when has the CBO EVER been right in their scoring? (They have always (with the exception of one program) been horribly off base. What they score virtually ALWAYS comes in WAY beneath what the program actually ends up costing. So why should we believe their scoring on healthcare.) At Brietbart's BigGovernment.com:

Time to Pay the IOUs out of the ‘Lock Box’
by Greg Knapp

All the lies about the Social Security “lock box” are now on full display. This is the year we will start paying out more from the SS program than we took in. We’ve gotten here even earlier than predicted. This wasn’t supposed to happen until 2017. Whoops…

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds— which are kept in a nondescript office building just down the street from Parkersburg’s municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn’t be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

But, wait! We have $2.5 trillion in there and it’s earning interest. It’s real money. We’re fine, right? Right. Pull this leg and it plays “Jingle Bells.” This is the mess conservatives have warned about for so long. The lock box hoax is nothing but a promise from the government (us) to pay us. Yes, the bonds will be paid, but that shouldn’t ease your anxiety. The money has to come from somewhere. Government only has two choices to get it:

1) Taxes.

2) Borrowing.

That’s it.

We are required to raise that money through borrowing or taxing until all those bonds are paid out. Say, "hello" to even more debt.


Now, add what you've just read to this excerpt from a piece at Whiskey & Gunpowder dot com:

The Big Dead-Cat Bounce
By Doug Hornig, Whiskey & Gunpowder
March 17, 2010


...The federal debt. How bad is it? Well, the Bank for International Settlements recently released a very frightening figure. In order just to stabilize debt at pre-crisis levels, the BIS says the U.S. government must run a budget surplus of 4.3% of GDP. Every year. For ten years.

For an in-depth look, try Harvard economist Kenneth Rogoff’s new book, This Time is Different: Eight Centuries of Financial Folly (co-authored with Carmen Reinhart of the University of Maryland), the first comprehensive survey of past financial crises around the world.

Dr. Rogoff, who may be the country’s leading expert on the historical record, concludes that a banking crisis often leads a country into default, because government’s response is usually to try to prop up the financial system with yet more debt.

If that sounds familiar and disconcerting, it should. Even more so because Rogoff has identified a clear tipping point, beyond which there is little hope of recovery. When a government’s debt grows to equal annual GDP, the game is essentially over.

Where we are now: We have $12.5 trillion in gross debt, growing at $2 trillion per year, on a GDP of $14.3 trillion. Next year, it will be $12.5T + $2T = $14.5 trillion on a projected $14.5T of GDP. Or 100%. A level we cannot survive for long.

That means it’s likely, in the not-too-distant-future, that the government will be confronted with a very stark choice between defaulting on the debt or trying to inflate its way out. The former would kill off economic growth and likely launch a worldwide depression of epic proportions.

Disastrous as that would be, if the alternative is chosen and Washington’s printing presses beget hyperinflation, that would probably be worse. In a serious deflation, those who have saved for a rainy day can make it through okay. In hyperinflation, which unconstrained further spending could easily bring on, everyone loses.

The truly prudent prepare, as best they can, for either eventuality.

This is just the tail end of a much larger article, but here's the rub. We are not out of the woods. Whatever media or politicians tell you (and how often are they ever right?) the end is not anywhere near in sight. Think what's happening in Greece can't happen here? Why? Because this is America? Think again.

Obama, for all that he's a great orator, is charming this nation into second-world status. And every one of you fawning Obama sycophants? You'll suffer right along with everyone else. Obama, for all his 'brilliance,' has shown no real ability to lead, or manage. He is turning out to be WORSE than Jimmy Carter. He wants to be a new FDR, but the only deal he seems prepared to give is a Raw Deal.

The parting shot from Whiskey & Gunpowder to Doug Hornig's piece illustrates the hard choice America faces. And we face it not because of any individual choice we currently possess, but rather, because of the choice we made in seating Obama in the Oval Office...

The Scylla of default...

Or the Charybdis of hyperinflation.

Odysseus chose to sail closer to Scylla than Charybdis. That way he lost only a few men in the jaws of a monster instead of his entire ship to a whirlpool.

Do the Obamabots even understand the predicament this portends? Does Obama?

This is what I see, to quote a recent movie title: There Will Be Blood. This much is inevitable, assuming Obama is as shrewd as Odysseus. If not? It's the whirlpool for us all.

Talk about raw deals!

Tuesday, March 16, 2010

The U.S. Needs More Unions... More Special Interests

The following letter illustrates the fatal flaw in our government's thinking. Though it's not exclusively a republican or democrat thing; one party is not worse than the other in the grander scheme of things. But this presidency, at the worst time in American history, has chosen to ignore common sense and plow full steam ahead wielding the sword of a deeply flawed economic philosophy. John Maynard Keynes, anyone?

At Geoffrey's place there is a post entitled, "High Taxes, More And Stronger Unions Are Key To A Robust Economy." This, I must confess, is the boldest statement I've read from the blogging Left in quite some time. Yes, I hear it all the time from the Left, but never have I read an article so completely off-kilter with reality. Now, I'm not here to deconstruct Geoff's article. I only offer it as another example of flawed economic philosophy. Because this is the belief Barack Obama is working under-- stronger unions and higher taxes are requirements for a healthy economy. And yet, America is on the verge of economic collapse. But I believe it's a bit myopic to use only California as a bellweather. Is anyone paying attention to what's happening in Greece, and the rest of Europe's response to her irresponsibility?

UNIONS are more to blame for American auto manufacturer collapse. Union demands have made American cars less competitive and more expensive to build. Curiously, with Toyota's problems (and let's remember that all manufacturers have had to deal with recalls), American auto manufacturers are coming out of the woodwork to tout their "bug-free" vehicles as being superior to Toyota's. This may or may not be true, but I can't help but think this particular recall is being used by Washington and American manufacturers to deflect attention from their own union-induced ills, and set up flawed AMERICAN economic philosophies as superior to those of, say, NON-union Toyota-- Just as Geoffrey has done.

And then there's the whole union "card check" deal Obama would love to slam through congress and... well, don't get me started.

Here then is the promised letter. A little light reading for you.


"Masked youths...attacked the head of Greece's largest trade union, who was addressing the crowd, and hurled stones at the police. GSEE union boss Yiannis Panagopoulos traded blows with the rioters before being whisked away, bloodied and with torn clothes."

The Daily Mail account put the blame for these disturbances on Germany's finance minister, who warned the Greeks that "the German government does not intend to give a cent." At least Bild, a popular German newspaper, was trying to be helpful. It suggested that Greece sell Corfu...and that Greeks get up earlier and work harder.

Meanwhile, from Iceland comes news that every voter with an IQ above air temperature has cast his ballot against a bailout plan. The Icelanders were slated to make good $5.3 billion in bank losses. But why shackle common voters to the banks' losses? The plan was so outrageous and so unpopular that Iceland's normally compliant Prime Minister called for a referendum. Given a chance to vote on it, 93% said no. The other 7% probably read it wrong.

Insurrection is in the air. In England, government employees are preparing the biggest strike since the '80s. In America, dissatisfaction with Congress is at record highs; four out of five of those polled say, "Nothing can be accomplished in Washington."

Herewith, an attempt to deconstruct the rebel yell. By way of preview, it's not the principle of the thing, we conclude; it's the money.

There are more clowns in economics than in the circus. They invented an economic model that has been very popular for more than 50 years — particularly in the US and Britain. It began with a bogus insight; John Maynard Keynes thought consumer spending was the key to prosperity; he saw savings as a threat. He had it backwards. Consumer spending is made possible by savings, investment and hard work — not the other way around. Then, William Phillips thought he saw a cause and effect relationship between inflation and employment; increase prices and you increase employment too, he said.

Jacques Rueff had already explained that the Phillips Curve was just a flimflam. Inflation surreptitiously reduced wages. It was lower wages that made it easier to hire people, not enlightened central bank management. But the scam proved attractive. The economy has been biased towards inflation ever since.

Economists enjoyed the illusion of competence; they could hold their heads up at cocktail parties and pretend to know what they were talking about. Now they were movers and shakers, not just observers. The new theories seemed to give everyone what they most wanted. Politicians could spend even more money that didn’t belong to them. Consumers could enjoy a standard of living they couldn't afford. And the financial industry could earn huge fees by selling debt to people who couldn't pay it back.

Never before had so many people been so happily engaged in acts of reckless larceny and legerdemain. But as the system aged, its promises increased. Beginning in the '30s, the government took it upon itself to guarantee the essentials in life - retirement, employment, and to some extent, health care. These were expanded over the years to include minimum salary levels, unemployment compensation, disability payments, free drugs, food stamps and so forth. Households no longer needed to save.

As time wore on, more and more people lived at someone else's expense. Lobbying and lawyering became lucrative professions. Bucket shops and banks neared respectability. Every imperfection was a call for legislation. Every traffic accident was an opportunity for wealth redistribution. And every trend was fully leveraged.

If there was anyone still solvent in America or Britain in the 21st century, it was not the fault of the banks. They invented subprime loans and securitizations to profit from segments of the market that had theretofore been spared. By 2005 even jobless people could get themselves into debt. Then, the bankers found ways to hide debt...and ways to allow the public sector to borrow more heavily. Goldman Sachs did for Greece essentially what it had done for the subprime borrowers in the private sector — it helped them to go broke.

As long as people thought they were getting something for nothing, this economic model enjoyed wide support. But now that they are getting nothing for something, the masses are unhappy. Half the US states are insolvent. Nearly all of them are preparing to increase taxes. In Europe too, taxes are going up. Services are going down. And taxpayers are being asked to pay for the banks' losses...and pay interest on money spent years ago. Until now, they were borrowing money that would have to be repaid sometime in the future. But today is the tomorrow they didn’t worry about yesterday. So, the patsies are in revolt.

Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors Rogoff and Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the US already too far gone on both scores, with external debt at 96% of GDP and 748% of exports.

The rioters can go home, in other words. The system will collapse on its own.

Regards,
Bill Bonner
The Daily Reckoning
March 15, 2010
Mumbai, India

Friday, March 12, 2010

"Democracy by Slaughter" One Catchy Title

The level of corruption and hypocrisy to which this democratic congress has fallen is astounding, and unparalleled in recent history.

As to hypocrisy, when Republicans considered the nuclear option to get judicial nominees an up or down vote in the senate, Democrats howled and foamed at every orifice over the 'corruption' of the Republican party. In the end it was a Republican who, with 6 others from his party and 7 Democrats who banded together to form the 'Gang of 14' in an effort to prevent the ruination of our democracy. Now when the tables are turned it's the Democrats who're exploring the nuclear option, and more...

Which leads me to their corruption-- aside from the many and several Dems guilty of their own little corruptions. From National Review Online, one catchy title...


Democracy by Slaughter by Daniel Foster

The sense around here for the last week or so has been that "only the House vote matters" in deciding the fate of Obamacare. But what if the Democrats can pass the bill with no House vote at all?

Astoundingly, House Democrats appear to be preparing to do just that:

House Rules Chairwoman Louise Slaughter is prepping to help usher the healthcare overhaul through the House and potentially avoid a direct vote on the Senate overhaul bill, the chairwoman said Tuesday.

Slaughter is weighing preparing a rule that would consider the Senate bill passed once the House approves a corrections bill that would make changes to the Senate version.

Slaughter has not taken the plan to Speaker Pelosi as Democrats await CBO scores on the corrections bill. "Once the CBO gives us the score we'll spring right on it," she said. . . .

House members are concerned the Senate could fail to approve the corrections bill, making them nervous about passing the Senate bill with its much-maligned sweetheart deals for certain states.

"We're well beyond that," Pelosi said Tuesday, though she did not clarify

That the Democrats could take this extraordinary step to avoid passing the Senate bill tells you that they have zero trust in the Senate to pass reconciliation "fixes," and zero trust in the president not to sign the Senate bill should it reach his desk and a reconciliation effort collapse. But most crucially, it gives the lie — in a big, big way — to the Democratic narrative that health-care reform should and will be finished via simple "majority rule," and not bound up in the arcane rules of the United States Senate.


Imagine that! The House considering passing a bill by simply DEEMING it passed! Without anyone having to vote! Certainly not any Democrats who oppose health care reform, and especially not any Republicans.

If a Republican congress were to have even considered doing this under President George W Bush, the Democrats would have, to quote Neal Boortz, shat cats.

It's clear, by ALL polling, that Americans do not want this health care bill. But our new president and congress do not care. They don't care what Americans think or want. Government knows what's best for the People. Well, sorry. This is not a monarchy-- though Obama often acts as though it is.

It's time to clean House, folks. House, Senate AND White! President Obama, Nancy Pelosi, and Harry Reid are the worst disasters to have ever made landfall on the United States of America, bar none! What America needs is regime change... one that will turn away from Saul Alinsky and return to the Constitution.

Wednesday, March 10, 2010

The Truth About Those "Evil Health Insurance Companies"




Insurer's Profits Aren't the Problem
by Jeffrey H. Anderson, National Review Online
February 24, 2010

[Posted in full...]


For an administration that says it’s committed to using empirical evidence to determine “what works,” and a president who says he’s “not an ideologue,” Obamacare’s marketing sure does rely on a healthy dose of fiction. The central inference behind the supposed need to pass Obamacare is that insurance companies are shamelessly gouging us and disproportionately driving up the costs of our entire health-care system. This is demonstrably false. But the Obama administration’s failure to recognize — or to admit — this inconvenient truth, largely explains why its proposed remedies would not only fail to drive health costs down, but would instead raise them up even further.

According to the most recent Fortune 500 rankings, health insurers are not even among the top-30 United States industries in profit-margin. Health insurers rank 35th, with a profit-margin of just 2.2 percent — less than one-fifth the profit-margin of railroads. None of the ten largest American health insurers made profits of more than 4.5 percent, and two of them lost money. Health insurers’ collective profit-margin is less than one-eighth that of drug companies and less than one-seventh that of companies that sell medical products or equipment. It’s also less than that of medical facilities. Yet when was the last time you heard President Obama rail against greedy hospitals?

The combined profits of America’s ten largest health insurers are $8.3 billion. That’s less than two-thirds of the profits of Wal-Mart alone, less than half of the profits of General Electric alone, and less than one-seventh of what Medicare loses each year to fraud. Health insurers collectively have one-eighth the profit-margin of McDonald’s or Coke, one-ninth that of eBay, and one-fifteenth that of Merck.

Why don’t these much more profitable companies or industries need to be taken over by the federal government? Why don’t they need to be subjected to something like President Obama’s proposed Health Insurance Rate Authority, which would be run by the same U.S. Department of Health and Human Services that already loses $60 billion of taxpayer money to Medicare fraud each year? (Not that I want to give the Obama administration any ideas.)

In all, the combined profits of the 14 largest American health insurers (the ones who crack the Fortune 1000) are $8.7 billion. That’s less than 0.4 percent, or 1/250th, of overall U.S. health-care costs, which are $2.5 trillion.

Anyone but an ideologue could plainly see that insurance profits aren’t the problem. The problem is having a health-care system with too many middlemen (government or otherwise); too little competition and choice; and too little opportunity for Americans to control their own health-care dollars, shop for value, or even see prices.

If you can’t identify the problem, you aren’t likely to stumble upon the solution. Maybe that’s why the Congressional Budget Office says that, under Obamacare, which would cost $2.5 trillion in its real first decade (2014 to 2023), the average family’s insurance premiums in the individual market would increase by $2,100 in relation to current law — while under the House Republican health bill, which would cost $61 billion (just 2 percent as much as Obamacare), the average premiums would be reduced by 5 to 8 percent.

President Obama likes to say that the Republicans don’t have any ideas, but the House GOP bill would clearly make the American health-care system better. The small bill would make it better still. Obamacare would raise nationwide health costs, siphon billions out of barely solvent Medicare and spend them elsewhere, cut Medicare Advantage benefits by an average of $21,000 per beneficiary in its real first decade, politicize medicine, reduce liberty, raise taxes, cost jobs, and inevitably lead to rationed care. In an Olympic competition between the GOP plan, the small bill, and Obamacare, the status quo would clearly merit the bronze.

In truth, the judges — the American people — disqualified Obamacare some time ago. But here comes President Obama, skating back onto the ice to the cheers of the far Left and the amazement of everyone else, seemingly as oblivious to the judges’ verdict as he is to the true causes of American health-care inflation and thus to the solutions that would constitute real reform.

Tuesday, March 9, 2010

Another Sign of Descent

I saw this AP article both online and in my local newspaper this morning. I'd say a shrinking city, particularly one once considered an economic and industrial powerhouse such as Detroit, is indeed evidence of the downward spiral. Others might say it is simply change, but no one can say it isn't a sign of the times.

How did Detroit come to this? It's been discussed before and for anyone with even a mere sample of common sense the answer is quite obvious. A combination of bad liberal tax policy (is there any other kind?) and union oppression has lead to this literal self-destruction. Yet nowhere in the article does it mention either in any way. It does mention a shrinking tax base, but what caused that? What prompts people and business to move away or for businesses to close? It wasn't as if no one drives cars anymore, the auto industry being the prime industry of the area.

The sad fact is that this decision is the logical consequence of those policies. Other areas are seeing the same thing in various stages. The article points to places like Youngstown, Ohio clearing land on a smaller scale for the same reasons. Other areas, like California and Illinois are experiencing their own economic struggles due to similar economic policies. Few are taking the lessons to heart. Worse, of those not learning, the worst of these are the voters who continue to support people who would enact the same or similar policies. Look how little good Obama's economic policies have done to see that bearing out, as some people still see him in a positive light.

And of course, Detroit is seeking federal funds to help with this project. That means they want more from the rest of us to help fund their stupidity. As if we can afford it. Like the auto corporations themselves, no federal funds should ever find it's way into the hand of Detroit decision makers until they are replaced and a solid plan that includes a total rejection of their current economic policies is submitted and approved.

Monday, March 8, 2010

Why Our Descent Sped Up

One of the gifts my lovely wife gave me last Christmas was a subscription to National Review. What a fine publication. It turned out to be a better gift than I would have imagined. Just having a monthly column by Mark Steyn makes it worth whatever the subscription price was.

An article in this month's issue (Mar8,2010) Kevin A. Hassett (Mortgage Morality) speaks of a book called, Predictably Irrational by Dan Ariely and it lends credence to an observation of mine regarding the whining of leftists regarding the mythical separation of church and state.

Now, the article itself surrounded the ramifications of borrowers walking out on their mortgages due to the value of their homes dropping below the remaining amount of their loans. The idea is that in many cases, it might make great financial sense to pass the six digit loss on to the bank as it discusses the pros and cons of doing so. But economists surveyed homeowners and found that 80% view doing so as "morally wrong". But, that number drops among those who know people who have already done it.
This suggests that the culture of those with such friends is different enough than those of the first group so as to influence their right/wrong standards as regards purposely defaulting on loans. Imagine that. People doing the wrong thing when the wrong thing is more commonplace!

So then they look to Ariely's book for explanations for this phenomena. They refer to an experiment testing students' willingness to cheat. Here's how it worked:

"A simple math test was devised, and students were given a fixed amount of time to complete it, with a reward for each correct answer. The subjects, all students at MIT, were divided into two groups: a control group that handed in their tests to be graded, and therefore had no chance to cheat, and a second group that reported their own scores and could fudge the results.

And there was an interesting twist: Of the students who had the chance to cheat, half were asked beforehand to list ten books tht they remembered reading in high school, while the rest were asked to write down as many of the Ten Commandments as they could remember.

The results were stunning. On average, the students in the control group answered 3.1 problems correctly. Students in the second group took the opportunity to cheat---under certain conditions: The ones who startd by listing ten books from high school cheated, on average reporting that they had answered 4.1 problems correctly. The students who were asked to recall the Ten Commandments, by contrast, did not cheat, reporting on average 3.0 correct answers.

Apparently, thinking about the Ten Commandments put the students in a moral frame of mind."


Did you get that? Merely being asked about the big Ten put them "in a moral state of mind". Yet, we're expected to believe that having them on the bulletin board in the classroom is a bad idea.

Sure, this is one little experiment, but as I said, it does lend weight to my argument that "removing God" from the classroom, as well as the public square has lead to or at least played a major role in the moral decline in our country. It has certainly affected the speed of that decline, as there is nothing to influence moral decision making but our own selves. Having "God in the market place" reminds those who believe even nominally that there is Someone always watching and it helps to build an atmosphere of morality that enhances our culture, as more people would be ready and willing to acknowledge right from wrong without compromise, without bowing to notions of relevancy and "gray areas". How could this not improve us?

Of course, one must be reasonable and understand that for some, there simply is no god or absolutes by which they must conduct their lives. Self-serving people always have and will exist. But we know that things are shown in movies and television that would never have been shown in the time either were invented and we know that as they became accepted and more common, ills related to such things rose in the real world.

We are influenced by our environment. To the extent that we can dress that environment for better or worse will change, and have changed, our perspectives and attitudes. The changes that have occurred in the time since separation really took place have not made us a better people. Deviancy has indeed been defined down without any alternative put in place to fill that void once filled by God in our culture.