Obama has unilaterally decided that the Defense of Marriage Act is unconstitutional and the Justice Department will not defend it in federal court. Many are applauding his decision. I assume that those who support his decision will have no problem if a future president decides that Roe v Wade is unconstitutional and will not defend it in federal court.
Contempt for the law is a recurring theme in this administration.
February 28, 2011
February 27, 2011
Public Unions Must Go
The following article by Jonah Goldberg of National Review makes a strong argument for why public unions are a mistake.
I hope the protesters are right. Public unions have been a 50-year mistake.
A crucial distinction has been lost in the debate over Walker's proposals: Government unions are not the same thing as private-sector unions.
Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It's been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. Mine disasters were frequent; hazardous conditions were the norm. In 1907, the Monongah mine explosion claimed the lives of 362 West Virginia miners. Day-to-day life often resembled serfdom, with management controlling vast swaths of the miners' lives. Before unionization and many New Deal-era reforms, Washington had little power to reform conditions by legislation.
Government unions have no such narrative on their side. Do you recall the Great DMV cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair's famous schoolhouse sequel to "The Jungle"? No? Don't feel bad, because no such horror stories exist.
Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil service regulations and similar laws had guaranteed good working conditions for generations.
The argument for public unionization wasn't moral, economic or intellectual. It was rankly political.
Traditional organized labor, the backbone of the Democratic Party, was beginning to lose ground. As Daniel DiSalvo wrote in "The Trouble with Public Sector Unions," in the fall issue of National Affairs, JFK saw how in states such as New York and Wisconsin, where public unions were already in place, local liberal pols benefited politically and financially. He took the idea national.
The plan worked perfectly -- too perfectly. Public union membership skyrocketed, and government union support for the party of government skyrocketed with it. From 1989 to 2004, AFSCME -- the American Federation of State, County and Municipal Employees -- gave nearly $40 million to candidates in federal elections, with 98.5 percent going to Democrats, according to the Center for Responsive Politics.
Why would local government unions give so much in federal elections? Because government workers have an inherent interest in boosting the amount of federal tax dollars their local governments get. Put simply, people in the government business support the party of government. Which is why, as the Manhattan Institute's Steven Malanga has been chronicling for years, public unions are the country's foremost advocates for increased taxes at all levels of government.
And this gets to the real insidiousness of government unions. Wisconsin labor officials fairly note that they've acceded to many of their governor's specific demands -- that workers contribute to their pensions and health-care costs, for example. But they don't want to lose the right to collective bargaining.
But that is exactly what they need to lose.
Private-sector unions fight with management over an equitable distribution of profits. Government unions negotiate with friendly politicians over taxpayer money, putting the public interest at odds with union interests, and, as we've seen in states such as California and Wisconsin, exploding the cost of government. California's pension costs soared 2,000 percent in a decade thanks to the unions.
The labor-politician negotiations can't be fair when the unions can put so much money into campaign spending. Victor Gotbaum, a leader in the New York City chapter of AFSCME, summed up the problem in 1975 when he boasted, "We have the ability, in a sense, to elect our own boss."
This is why FDR believed that "the process of collective bargaining, as usually understood, cannot be transplanted into the public service," and why even George Meany, the first head of the AFL-CIO, held that it was "impossible to bargain collectively with the government."
As it turns out, it's not impossible; it's just terribly unwise. It creates a dysfunctional system where for some, growing government becomes its own reward. You can find evidence of this dysfunction everywhere. The Cato Institute's Michael Tanner notes that federal education spending has risen by 188 percent in real terms since 1970, but we've seen no significant improvement in test scores.
The unions and the protesters in Wisconsin see Walker's reforms as a potential death knell for government unions. My response? If only.
Public Unions Must Go
The protesting public school teachers with fake doctor's notes swarming the Capitol building in Madison, Wis., insist that Gov. Scott Walker is hell-bent on "union busting." Walker denies that his effort to reform public-sector unions in Wisconsin is anything more than an honest attempt at balancing the state's books.I hope the protesters are right. Public unions have been a 50-year mistake.
A crucial distinction has been lost in the debate over Walker's proposals: Government unions are not the same thing as private-sector unions.
Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It's been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. Mine disasters were frequent; hazardous conditions were the norm. In 1907, the Monongah mine explosion claimed the lives of 362 West Virginia miners. Day-to-day life often resembled serfdom, with management controlling vast swaths of the miners' lives. Before unionization and many New Deal-era reforms, Washington had little power to reform conditions by legislation.
Government unions have no such narrative on their side. Do you recall the Great DMV cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair's famous schoolhouse sequel to "The Jungle"? No? Don't feel bad, because no such horror stories exist.
Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil service regulations and similar laws had guaranteed good working conditions for generations.
The argument for public unionization wasn't moral, economic or intellectual. It was rankly political.
Traditional organized labor, the backbone of the Democratic Party, was beginning to lose ground. As Daniel DiSalvo wrote in "The Trouble with Public Sector Unions," in the fall issue of National Affairs, JFK saw how in states such as New York and Wisconsin, where public unions were already in place, local liberal pols benefited politically and financially. He took the idea national.
The plan worked perfectly -- too perfectly. Public union membership skyrocketed, and government union support for the party of government skyrocketed with it. From 1989 to 2004, AFSCME -- the American Federation of State, County and Municipal Employees -- gave nearly $40 million to candidates in federal elections, with 98.5 percent going to Democrats, according to the Center for Responsive Politics.
Why would local government unions give so much in federal elections? Because government workers have an inherent interest in boosting the amount of federal tax dollars their local governments get. Put simply, people in the government business support the party of government. Which is why, as the Manhattan Institute's Steven Malanga has been chronicling for years, public unions are the country's foremost advocates for increased taxes at all levels of government.
And this gets to the real insidiousness of government unions. Wisconsin labor officials fairly note that they've acceded to many of their governor's specific demands -- that workers contribute to their pensions and health-care costs, for example. But they don't want to lose the right to collective bargaining.
But that is exactly what they need to lose.
Private-sector unions fight with management over an equitable distribution of profits. Government unions negotiate with friendly politicians over taxpayer money, putting the public interest at odds with union interests, and, as we've seen in states such as California and Wisconsin, exploding the cost of government. California's pension costs soared 2,000 percent in a decade thanks to the unions.
The labor-politician negotiations can't be fair when the unions can put so much money into campaign spending. Victor Gotbaum, a leader in the New York City chapter of AFSCME, summed up the problem in 1975 when he boasted, "We have the ability, in a sense, to elect our own boss."
This is why FDR believed that "the process of collective bargaining, as usually understood, cannot be transplanted into the public service," and why even George Meany, the first head of the AFL-CIO, held that it was "impossible to bargain collectively with the government."
As it turns out, it's not impossible; it's just terribly unwise. It creates a dysfunctional system where for some, growing government becomes its own reward. You can find evidence of this dysfunction everywhere. The Cato Institute's Michael Tanner notes that federal education spending has risen by 188 percent in real terms since 1970, but we've seen no significant improvement in test scores.
The unions and the protesters in Wisconsin see Walker's reforms as a potential death knell for government unions. My response? If only.
February 25, 2011
The Trouble with Public Sector Unions
Below is a link to a very informative, although lengthy, article on the history of public sector employee unions. Among the things it reveals is that the patron saint of democrats, FDR, was vehemently opposed to such unions.
The Trouble with Public Sector Unions
The Trouble with Public Sector Unions
February 24, 2011
Krauthammer
Charles Krauthammer makes a good point...there was a time when democrats were the "party of ideas", even if there ideas were bad ones. Now, they cling to the status quo. Obama ran on "hope and change", but he too wants to cling to the status quo.
GOP Wants Change -- Obama & Unions Want Status Quo
GOP Wants Change -- Obama & Unions Want Status Quo
February 21, 2011
Multiculturalism on the Rocks?
The Prime Minister of Great Britain, the president of France, and the German Chancellor have all recently been highly critical of multiculturalism.
David Cameron in the UK said "Let's properly judge these organizations: Do they believe in universal human rights - including for women and people of other faiths? Do they believe in equality of all before the law? Do they believe in democracy and the right of people to elect their own government? Do they encourage integration or separatism?"
Sarkozy in France said "It's a failure. The truth is that in all our democracies, we've been too concerned about the identity of the new arrivals and not enough about the identity of the country receiving them."
Angela Merkel in Germany said that multiculturalism has "utterly failed".
For anyone who applauds multiculturalism, I have a question...where are these European leaders going wrong?
David Cameron in the UK said "Let's properly judge these organizations: Do they believe in universal human rights - including for women and people of other faiths? Do they believe in equality of all before the law? Do they believe in democracy and the right of people to elect their own government? Do they encourage integration or separatism?"
Sarkozy in France said "It's a failure. The truth is that in all our democracies, we've been too concerned about the identity of the new arrivals and not enough about the identity of the country receiving them."
Angela Merkel in Germany said that multiculturalism has "utterly failed".
For anyone who applauds multiculturalism, I have a question...where are these European leaders going wrong?
February 20, 2011
Above the Law?
A federal judge recently found the Interior Department to be in contempt of court. Interior has ignored the judge's order overturning the administration's ban on offshore drilling, and the judge is not happy about it. I'm don't know if such a contempt order has any teeth. Can Ken Salazar be marched out of his office in cuffs? One can only hope.
The administration is also ignoring Judge Vinson's ruling on the health care bill. I haven't yet heard about a contempt order from Vinson, but I suspect it's coming.
Can an administration simply ignore the law and get away with it? When an administration effectively says to a judge "We don't like your ruling, so screw you", is there any recourse for the courts? Is the executive branch above the law?
The administration is also ignoring Judge Vinson's ruling on the health care bill. I haven't yet heard about a contempt order from Vinson, but I suspect it's coming.
Can an administration simply ignore the law and get away with it? When an administration effectively says to a judge "We don't like your ruling, so screw you", is there any recourse for the courts? Is the executive branch above the law?
February 19, 2011
Wisconsin
Are we watching the beginning of the American version of the riots in Greece over government austerity measures?
Wisconsin Governor Scott Walker has proposed a bill that would limit the collective bargaining ability of public employee unions, although police and firefighters are apparently exempted.
Among the provisions being hotly contested is that under the bill employees would have to contribute 5.8% to their pension plans. Most currently contribute nothing. Also, the new bill would have employees increase their contributions to their health plans from 4-6% to 12.6%. My God, what are they to do?
Public employees in Wisconsin have gotten accustomed to having the taxpayer foot the bill for their pension and health care plans. And when the taxpayer can't take it anymore, those employees are shocked to confront the possibility of having to contribute amounts that most of the private sector would think is a pretty sweet deal. I watched a representative of Wisconsin teachers on the news tonight saying that the proposed bill would be awful for the education of Wisconsin's children. Excuse me? If teachers have to contribute to their pension and health programs, then what?, they won't be able to teach anymore? Give me a break.
This is the end result of programs whereby governments give lots of goodies to selected groups. Those groups quickly feel that they are entitled to those goodies, and go apeshit when fiscal reality smacks them upside the head.
The protesters in Wisconsin are carrying posters depicting Governor Walker as Hitler, Mussolini, Mubarak (one dictator down, one to go), and in the "crosshairs". I thought we were supposed to be entering a new age of civility? I guess the left hasn't gotten the memo.
Wisconsin Governor Scott Walker has proposed a bill that would limit the collective bargaining ability of public employee unions, although police and firefighters are apparently exempted.
Among the provisions being hotly contested is that under the bill employees would have to contribute 5.8% to their pension plans. Most currently contribute nothing. Also, the new bill would have employees increase their contributions to their health plans from 4-6% to 12.6%. My God, what are they to do?
Public employees in Wisconsin have gotten accustomed to having the taxpayer foot the bill for their pension and health care plans. And when the taxpayer can't take it anymore, those employees are shocked to confront the possibility of having to contribute amounts that most of the private sector would think is a pretty sweet deal. I watched a representative of Wisconsin teachers on the news tonight saying that the proposed bill would be awful for the education of Wisconsin's children. Excuse me? If teachers have to contribute to their pension and health programs, then what?, they won't be able to teach anymore? Give me a break.
This is the end result of programs whereby governments give lots of goodies to selected groups. Those groups quickly feel that they are entitled to those goodies, and go apeshit when fiscal reality smacks them upside the head.
The protesters in Wisconsin are carrying posters depicting Governor Walker as Hitler, Mussolini, Mubarak (one dictator down, one to go), and in the "crosshairs". I thought we were supposed to be entering a new age of civility? I guess the left hasn't gotten the memo.
February 18, 2011
Freedom & Poverty
In an article by Walter Williams, economics professor at George Mason University, he makes the following observations...
Egyptians who come to the U.S. tend to be much better off than those who remain in Egypt. The same statement can be made about Nigerians, Cambodians and others from the Third World. Why is that?
In Egypt, 40% of its 80 million people live at or below the poverty line established by the World Bank, $2 a day.
According to Hernando de Soto, president of Peru's Institute for Liberty and Democracy, over 90% of Egyptians hold property without clear legal title. An Egyptian entrepreneur therefore has what de Soto calls "dead capital". It cannot be leveraged to obtain a loan for working capital, or used as security for contractual agreements. As a result, businesses cannot grow. In addition, government gets in the way. Says de Soto: "To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections." Not surprisingly, Egypt's underground economy is its largest employer.
To those who explain Third World poverty as being due to colonialism, Williams asks what about Canada, Australia, New Zealand, Hong Cong and the U.S., all of which were at one time colonies. What about natural resources as an explanation for the difference between rich and poor countries? Williams points out that South America and Africa are rich in natural resources, yet home to some of the world's poorest countries. Great Britain, Japan and Hong Cong are poor in natural resources, yet are among the richest nations.
So why the difference between rich and poor countries. According to Williams, the evidence strongly suggests that it boils down to economic systems. Those countries that are largely capitalistic (private markets, private property rights) as opposed to socialistic (state intervention, central planning, weak property rights), tend to be richer. In other words, there is a strong correlation between freedom and wealth.
Egypt and other Mideast countries where people are demonstrating to change governments will never be prosperous unless they allow their citizens economic freedom. Without that freedom, those countries will always suffer from abject poverty and thus be hotbeds for groups like the Muslim Brotherhood who preach hatred and violence. Perhaps Islam is simply incompatible with freedom, economic or otherwise, in which case the Muslim problem is going to be around for a long, long time.
Egyptians who come to the U.S. tend to be much better off than those who remain in Egypt. The same statement can be made about Nigerians, Cambodians and others from the Third World. Why is that?
In Egypt, 40% of its 80 million people live at or below the poverty line established by the World Bank, $2 a day.
According to Hernando de Soto, president of Peru's Institute for Liberty and Democracy, over 90% of Egyptians hold property without clear legal title. An Egyptian entrepreneur therefore has what de Soto calls "dead capital". It cannot be leveraged to obtain a loan for working capital, or used as security for contractual agreements. As a result, businesses cannot grow. In addition, government gets in the way. Says de Soto: "To open a small bakery, our investigators found, would take more than 500 days. To get legal title to a vacant piece of land would take more than 10 years of dealing with red tape. To do business in Egypt, an aspiring poor entrepreneur would have to deal with 56 government agencies and repetitive government inspections." Not surprisingly, Egypt's underground economy is its largest employer.
To those who explain Third World poverty as being due to colonialism, Williams asks what about Canada, Australia, New Zealand, Hong Cong and the U.S., all of which were at one time colonies. What about natural resources as an explanation for the difference between rich and poor countries? Williams points out that South America and Africa are rich in natural resources, yet home to some of the world's poorest countries. Great Britain, Japan and Hong Cong are poor in natural resources, yet are among the richest nations.
So why the difference between rich and poor countries. According to Williams, the evidence strongly suggests that it boils down to economic systems. Those countries that are largely capitalistic (private markets, private property rights) as opposed to socialistic (state intervention, central planning, weak property rights), tend to be richer. In other words, there is a strong correlation between freedom and wealth.
Egypt and other Mideast countries where people are demonstrating to change governments will never be prosperous unless they allow their citizens economic freedom. Without that freedom, those countries will always suffer from abject poverty and thus be hotbeds for groups like the Muslim Brotherhood who preach hatred and violence. Perhaps Islam is simply incompatible with freedom, economic or otherwise, in which case the Muslim problem is going to be around for a long, long time.
February 17, 2011
February 16, 2011
Government Investments
According to an item in the Atlanta Journal Constitution...
The idea sounded terrific. Use tree waste to create fuel, help break our dependence on Mideast oil, and create hundreds of jobs in rural Georgia to boot. What's not to like about that?
One problem. The Range Fuels cellulosic ethanol factory is now closed. Apparently, it wasn't such a terrific idea. Unfortunately, approx. $162 million in federal, state and local grants is now up in smoke.
While $162 million is relative chickenfeed in an era where we have all discovered the number "trillion", this anecdotal episode is instructive regarding government "investment", aka spending taxpayer dollars.
I would imagine it went down something like this...
Owner of Range Fuels to state Senator Foghorn: Ralph, I got a great idea for alternative energy and creating jobs. We make fuel out of tree waste. We call it cellulosic ethanol and...
Foghorn: How much?
Owner: Excuse me?
Foghorn: How much, boy, tell me what ya need.
Owner: Uh, I don't know, maybe $162 million.
Foghorn: Consider it done. I know the local boys will pony up some of it, cuz I got pictures they don't want the world to see. But I'll need to call Senator Blowhard in Washington, give me just a minute...Blowhard you ol' sumbitch, it's Foghorn...
Blowhard: How Much?
Foghorn: You even want to know what it's for?
Blowhard: Not really.
Foghorn: How soon?
Blowhard: We're voting on a bill tomorrow to keep orphans from starving, I'll stick it in that.
Foghorn: My best to the Missus.
The moral of the story is that when you're playing with other people's money, you're not as prudent as when your own money is at stake. When we hear about government "investments" in things like clean energy, we should ask ourselves whether they are using sound investment principles or simply picking winners and losers on the basis of political connections.
The idea sounded terrific. Use tree waste to create fuel, help break our dependence on Mideast oil, and create hundreds of jobs in rural Georgia to boot. What's not to like about that?
One problem. The Range Fuels cellulosic ethanol factory is now closed. Apparently, it wasn't such a terrific idea. Unfortunately, approx. $162 million in federal, state and local grants is now up in smoke.
While $162 million is relative chickenfeed in an era where we have all discovered the number "trillion", this anecdotal episode is instructive regarding government "investment", aka spending taxpayer dollars.
I would imagine it went down something like this...
Owner of Range Fuels to state Senator Foghorn: Ralph, I got a great idea for alternative energy and creating jobs. We make fuel out of tree waste. We call it cellulosic ethanol and...
Foghorn: How much?
Owner: Excuse me?
Foghorn: How much, boy, tell me what ya need.
Owner: Uh, I don't know, maybe $162 million.
Foghorn: Consider it done. I know the local boys will pony up some of it, cuz I got pictures they don't want the world to see. But I'll need to call Senator Blowhard in Washington, give me just a minute...Blowhard you ol' sumbitch, it's Foghorn...
Blowhard: How Much?
Foghorn: You even want to know what it's for?
Blowhard: Not really.
Foghorn: How soon?
Blowhard: We're voting on a bill tomorrow to keep orphans from starving, I'll stick it in that.
Foghorn: My best to the Missus.
The moral of the story is that when you're playing with other people's money, you're not as prudent as when your own money is at stake. When we hear about government "investments" in things like clean energy, we should ask ourselves whether they are using sound investment principles or simply picking winners and losers on the basis of political connections.
February 15, 2011
Change in the Air?
Leaving aside for now the fiscally laughable budget proposed by Obama yesterday, I have a question...
Everyone recognizes that unless entitlement spending is reformed, any other attempts to reduce the federal debt won't save the country from disaster. Is the public ready for significant entitlement reform?
I see where New York governor Andrew Cuomo is enjoying a 77% approval rating, despite proposing serious cuts in state spending that according to reports could lead to the layoff of 10,000 state employees. In a deeply blue state, that's pretty amazing.
Chris Christie in New Jersey, another strongly blue state, has an approval rating of 51% despite his aggressively conservative fiscal policies.
Is the public's attitude toward hitherto untouchable public programs beginning to shift? If so, will it be too late?
Everyone recognizes that unless entitlement spending is reformed, any other attempts to reduce the federal debt won't save the country from disaster. Is the public ready for significant entitlement reform?
I see where New York governor Andrew Cuomo is enjoying a 77% approval rating, despite proposing serious cuts in state spending that according to reports could lead to the layoff of 10,000 state employees. In a deeply blue state, that's pretty amazing.
Chris Christie in New Jersey, another strongly blue state, has an approval rating of 51% despite his aggressively conservative fiscal policies.
Is the public's attitude toward hitherto untouchable public programs beginning to shift? If so, will it be too late?
February 14, 2011
What's Next?
According to a poll taken by the Pew Research Center last year of the Egyptian people...
30% have a favorable view of Hezb'allah
49% have a positive view of Hamas
20% have a positive view of al Qaeda (72% have a negative view)
19% have a positive view of Osama bin Laden
48% say Islam plays a large role in their country's political life
85% consider Islamic influence over political life to be a positive thing for their country
61% see no struggle between those who want to modernize their country and Islamic fundamentalists
54% support making gender segregation in the workplace the law in their country
82% endorse the stoning of people who commit adultery
77% support whippings and cutting off of hands for crimes like theft and robbery
84% support the death penalty for those who leave the Muslim religion
59% say democracy is preferable to any other kind of government
20% support suicide bombing in defense of Islam
46% say suicide bombings are never justified
61% express concern about Islamic extremism in their country
While we must always be wary of polling data, if the above data is reasonably accurate, it paints a somewhat confusing picture of the Egyptian people. On the one hand, it's difficult to mourn the departure of Mubarak. On the other, what's coming next? In terms of our interests, should we be happier with a dictator like Mubarak, who if nothing else maintained peace with Israel? Or elections in which the Muslim Brotherhood could acquire power? The Brotherhood is not, as Director of National Intelligence James Tapper says, a largely secular group that eschews violence.
I can't help but wonder if the administration should temper its enthusiasm till it knows the final outcome.
February 13, 2011
Mitch Daniels at CPAC
The link below will lead you to Mitch Daniels speech at CPAC. You'll need about 40 minutes if you choose to watch and listen. Daniels isn't an exciting guy, but here's hoping the country is ready for competence after seeing how stylish but empty rhetoric has failed.
Mitch Daniels: The Charisma of Competence
Mitch Daniels: The Charisma of Competence
February 12, 2011
Republicans and Farm Subsidies
The following article from National Review takes several Republican presidential wannabes to task, and rightfully so. Republicans should seriously consider moving the Iowa primary election to later in the year. Its present status at the beginning apparently makes otherwise fiscally conservative Republicans sing a different tune. I hope you will all forgive me for picking on conservatives.
Republicans are Weak on Farm Subsidies
Republicans are Weak on Farm Subsidies
February 9, 2011
Economic Myths
The following article is a worthwhile read. Among the myths discussed is whether it would be catastrophic to not raise the debt ceiling in a couple of months.
Destructive Economic Myths
Destructive Economic Myths
February 5, 2011
Unintended Consequences
The following article from the American Thinker posits that U.S. policies may have had the unintended consequence of contributing to turmoil in the Mideast. I think he may have a point. Yet another reason to scrap ethanol.
America and the Middle East Food Riots
By Steve McCannPerhaps the most overused but most accurate term used to describe the policies and ideology of the American left is the "Law of Unintended Consequences." There is virtually nothing that these people espouse that, once put in place, has not had detrimental effects on either the people of the United States or the world.
Today there is a global food shortage and skyrocketing prices. This has become the underlying factor in the riots in Tunisia, Algeria, and Egypt, where up to 56% of a person's income is dedicated to the acquisition of food. These riots are now leading to the upheaval of governments and the very real possibility of the ascendancy of the radical elements into control.
While bad weather in various parts of the world is an element of the accelerating food prices, there are two other factors directly related to the United States and its policies.
First, because of the enormous deficits run up by the Obama administration and the Democrat-controlled Congress, the Federal Reserve has had to effectively print trillions of dollars, which have flooded the global market. Commodities are priced in dollars; consequently, emerging markets throughout the world, and the food sector in particular, are suffering from rapidly rising inflation.
The CRB food index is up an incredible 36% over last year. Raw materials are up 23%. Since 2009, the dollar has declined by over 13% against the Japanese yen and 25% against the Canadian dollar.
Larry Kudlow in the National Review writes in regard to the riots in Africa and the Middle East:
So I have to ask this tough question: Is Ben Bernanke's ultra-easy QE2 money-priming partially to blame.
But food riots in the North Africa/Middle East area are bumping smack into long-time resentment over autocratic government. If food is in fact the trigger for what may be a revolution in Egypt, then US monetary policy has to shoulder at least some of the blame.
February 2, 2011
Crying Over Spilled Milk
I am not making this up.
In 1970, the Environmental Protection Agency adopted the Spill Prevention, Control and Countermeasure program, which was designed to prevent oil discharges in navigable waters or near shorelines. At the time, it was assumed that the program would deal with, well, oil.
That was then.
Now the EPA has finalized rules that subject dairy farmers to the program. Dairy farmers?, you ask. Yup. The agency has decided that since milk contains "a percentage of animal fat, which is a non-petroleum oil", then it must take steps to protect the public against the catastrophic consequences of spilled milk. The new regulations will force farmers to file "emergency management" plans to show how they will deal with spilled milk, how "first responders" will be trained, and build "containment facilities" in the event that milk spills.
These regulations will of course result in higher prices for milk, but I suppose the threat to the public of spilled milk is worth the cost.
In Obama's State of the Union address, he talked about getting rid of regulations that are "just plain dumb". This would be a good place to start.
In 1970, the Environmental Protection Agency adopted the Spill Prevention, Control and Countermeasure program, which was designed to prevent oil discharges in navigable waters or near shorelines. At the time, it was assumed that the program would deal with, well, oil.
That was then.
Now the EPA has finalized rules that subject dairy farmers to the program. Dairy farmers?, you ask. Yup. The agency has decided that since milk contains "a percentage of animal fat, which is a non-petroleum oil", then it must take steps to protect the public against the catastrophic consequences of spilled milk. The new regulations will force farmers to file "emergency management" plans to show how they will deal with spilled milk, how "first responders" will be trained, and build "containment facilities" in the event that milk spills.
These regulations will of course result in higher prices for milk, but I suppose the threat to the public of spilled milk is worth the cost.
In Obama's State of the Union address, he talked about getting rid of regulations that are "just plain dumb". This would be a good place to start.
February 1, 2011
Move to the Center, or a Head Fake?
Charles Krauthammer on Obama's State of the Union address...
I think he nails it.
The Old Obama in New Clothing
I think he nails it.
The Old Obama in New Clothing
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