A Revealing Episode

Micahael Burry predicted the 2008 financial crisis and made about 100 million dollars for himself and around 700 million dollars for his clients by shorting the market . He wrote an Op-Ed in the New York Times titled 'I Saw the Crisis Coming. Why Didn't the Fed?'. What happened to him as a result of writing this Op-Ed? See what happened starting from minute 14:00 to 15:40. This should tell you something.  

From Bad to Good to Bad

Washington state recently privatized liquor sales. Before June 1st the state government had a monopoly on liquor sales. The people of the state, evidently COSTCO helped the initiative, voted to give all liquor sales to private vendors.

This could have been a great thing. Privatizing any industry is almost always good. But of course there are a ton of hidden taxes and fees. (oregonlive.com)

Because of the complex nature of the new fees, and additional markups by distributors, it's unclear what the final cost of a fifth or a half-gallon will be until it gets rung up at the cash register. State analysts have predicted prices could go up by as much as 20 percent from what they were before the privatization initiative passed

A liquor store manager in Rainier Oregon said that sales had jumped 20 percent since the new legislation was passed. Many Washington residents are flocking to the government ran liquor stores in Oregon to get better prices.

So, what was supposed to be a great thing, got screwed up by the government. The link above stated that there is a 20.5% sales tax and a $3.77 per liter tax! What is this, New York City?

While we are on the liquor sales subject, I have been thinking about something. Why can't alcohol be delivered the same as pizza? It seems to me that it would be a healthy benefit to society. A lot of Americans drink a few beers, catch a buzz, run out of booze, and drive to the store. The fact that residential alcohol delivery is illegal will not stop me from getting alcohol if I want it. Why didn't we elect Ron Paul?

June 5th - The Tide Continues to Turn

Three state and municipal elections on June 5th show that the sentiment towards facing reality is growing across our nation.  As we all know, the big election, maybe even bigger than the presidency this November, was Scott Walker's (and others') recall election in Wisconsin.  The other two were municipal ballot measures in San Diego and San Jose to adjust compensation for PEUs, making them like everyone else's rather than gold-plated. 

The recall elections in Wisconsin were a continuance of a panic/temper tantrum that the PEUs of Wisconsin have been throwing (with strong support from lefty allies) ever since Scott Walker was elected governor in 2010 with promises to control runaway state spending.  Though Walker did nothing justifying a recall (ie broke no laws), the PEUs knew they had to do whatever it took to throw him out of office.  This is typical of Democrats when they lose to pull every trick they can to overturn the will of the people.  The PEUs rightly worried that if the policies Walker enacted succeeded, the PEU's power over budgets and policitians would be broken.  In other words, that one of the greatest threats to our nation's stability and functionality would be overcome.  From their perspective, they were rightly panicked and tried any and all options to get the man either neutered (through Senate and Court recalls/elections) or thrown out through his own recall.

But the people of this Blue State (still support Obama by a good bit over Romney) were swayed by someone who promised to get their fiscal house in order, by whatever means. Wisconsin went from having a $3.6 billion deficit to a $154 million surplus under Walker, even as property taxes dropped, and teachers' jobs were saved.  As I said in a previous article, results count.  Sound fiscal policies get results and people, even some Democrats, pay attention to these results. 

The Red wave of Reality is striking at the State level across the nation.  I think someone on our blog pointed this out, but the biggest and least-reported news about the 2010 Republican tidal-wave (I prefer English terms to Japanese) was at the state level - wholesale conversions at the Governors' and State Legislators' levels from Blue to Red.  This is expected to continue.  The current Governor balance of 29 Republicans to 20 Democrats is expected to change to 33 Republicans to 16 Democrats (not sure what's the deal with the missing state, maybe an Independent somewhere) after 2012.  Why?  Because it is getting through to the people that fiscal discipline is needed at the State level.  States can't print money and devalue debt to get out of their budget problems like the Federal gov't can.  They must work their way out of it, and the people know, regardless of their policital outlook, that Republicans offer their best hope of getting it done.  And in places, here and there, it is getting it done.

This, by the way, is another good reason (besides it not violating the Constitution) for all these responsibilities (Education, Health Care, Welfare, etc) to be transferred back to the states:  They must get it done in a fiscally sound way (ie, there will be greater control than if it is done at the Federal level).

The two referenda in California are interesting: one occurred in San Diego, which is a lonely Republican bastion in California, and the other in San Jose, a typical True Blue Democratic municipality.  Both faced PEU benefit obligations that they simply could not afford.  And guess what?  They couldn't afford it, so the people voted to cut their benefits in both cases.  As someone says "that which cannot go on, won't".  This should give all us fiscal conservatives hope that, when push comes to shove, the problems we worry about will be addressed, rather than bring the whole nation's/world's economy down.

Keeping my fingers crossed for November.

RomneyCare/ObamaCare Issue

Conservatives have been tying themselves in knots over how to resolve backing Romney in spite of the fact that he has not-yet disavowed RomneyCare, the alleged, and most-likely-to-be-true model for ObamaCare.  ObamaCare is the biggest among the many big Obamanations foisted on our country by Obama and fellow Democrats.
ToeJamm posted an article rallying the troops to swallow the problems inherent with backing a candidate responsible for RomneyCare.  jeff00139x opposed, then grudgingly acquiesced to steeling himself to fill in the dot for Romney.  I'm not sure where KP is on this, but feel certain it's not an easy choice for him.   Melkor, I think is happy with Romney.  I could not believe that Republicans would choose to remove the most significant arrow in their quiver in their fight to overthrow Obama, but, understand that Obama must be overthrown regardless, and see numerous other hefty arrows left.
Well, the guys at the Powerline blog, who oppose RomneyCare and are generally very conservative, have posted an article in response to liberal douchebag EJ Dionne, pointing out why there are critical differences between RomneyCare and ObamaCare that make it not impossible for a conservative to not be a hypocrite for supporting Romney while opposing ObamaCare.  This won't make you pleased as punch for Romney, just allow you to explain your apparent hypocrisy.

Read the article for the details, but their main points:

- Constitutionality: Conservatives rightly challenge ObamaCare on Constitutional grounds.  RomneyCare is at the state level where there are no constitutional issues.

- Affordability:  Massachusetts could afford RomneyCare, America can't afford ObamaCare.  Says Powerline,

Taxes were not increased and funds were not “borrowed” to pay for Romneycare. This is not true of Obamacare.

- Regulatory Oppression: ObamaCare is a 2000 page document, RomneyCare comes in at 70 pages.  Says Powerline,

In Massachusetts, insurance companies were not, effectively, placed under government control, nor did Massachusetts become the default health care provider in that state.

This is not to say that Conservatives should applaud RomneyCare.  This is to say that is does not appear to violate the Constitution, it appears to be an affordable act that Massachewtions :) wanted, and it does not overwhelm the private enterprises providing these services in the state with regulations.

What Do You Think?

Europe is dealing with major economic issues that are threatening the survival of the European Economic and Monetary Union (EMU) and the whole European political project.

The historian Niall Ferguson points out that a monetary union requires economic and thus political centralization:

Is to follow through the original logic of monetary union. If you go back to 1989 Delors report it was explicit that one consequence of monetary union would be central control of national budgets, of national policy. And that is ultimately the crucial staging point for a federal system of the sort that you have here in Canada.

So if this logic is correct, then for the EMU to saved it will require further political and economic integration.

Do you think that the current situation in Europe will lead to the break up of the European Monetary Union or do you think that it will try to be saved. My opinion is that there will be further political and economic integration as the cost of not doing this would be too economically costly for Europe and the rest of the world.

Best Argument for Capitalism

The best argument for something is results.  The German magazine Spiegel has a series of photos of places in East Germany taken immediately after the fall of the Berlin wall and then some period later of the same sites.  The changes are astounding.  I think there's no doubt, looking at these photos, that the people's prosperity and happiness have both been greatly improved by the advent of capitalism in East Germany, even if the East Germans have been half-hearted in their embrace of the opportunity to prosper.  Also, keep in mind that East Germany was considered to have the highest standard of living of the countries controlled by the Soviet Union.

Portland Sucks

The May primary elections had a hand full of measures on the ballot for Portlanders. Once again, the People's Republic of Portland decided to keep feeding the libraries and to help rebuild a crumbling school system.


David Douglas School District needs some improvements, but instead of managing a tight budget they just take the easy way out and tax property owners. The politicians in Portland know they can play the sympathy card and claim its "for the children". Oh, yeah, we have to make sure to give the teachers their raises as well. We all know how much they deserve it. http://www.oregonlive.com/portland/index.ssf/2012/05/david_douglas_school_district_2.html

The Multnomah County Libraries will be kept on life support as well. We need to make sure that all the pan handlers have a place to access the internet in order to get the required paperwork for their food stamp cards. I swear, every time I've ever entered the county libraries in the last ten years it has been a surplus of lower income people waiting to use the internet. As we see paper books becoming obsolete and being replaced by blogs and kindles, of course it is the government that takes its time catching up to speed. Just like the outdated post office.http://www.oregonlive.com/portland/index.ssf/2012/05/multnomah_county_library_measu.html

I wonder how many voters who voted to tax property owners actually own property? The economy has some dependence on the housing market. These measures will depress the potential for growth.

Side note: Homeless people in Portland are not hungry. With 39 places in the city that serve 24 hr food to homeless, Portland has become a safe haven for them. We are actually seeing an obesity problem among homeless. This news came to me from a homeless shelter manager.