No Minister

Archive for the ‘Economics & Economy’ Category

Supersize that fraud

with 3 comments

There was a rather silly “documentary” film made some years ago called “Supersize Me”, which took a crack at the consumer practices of American fast food places.

It did this by having the maker of the doco live on nothing but McDonald’s food for 30 days and taking full advantage of their Super Size option if it was offered. He gained 11 kilos in that time and sent his cholesterol through the roof. It took months to lose the weight but he suffered no long-term problems with his health.

Six weeks after the film’s debut, McDonald’s discontinued its supersize portions.

It’s a shame that promoters of massive and ever-increasing government spending don’t learn the same thing, as this rather astounding article in the NY Post reveals:

[The Federal government has] already appropriated some $6 trillion in fighting COVID, though. That’s more than we spent fighting WWII, which cost about $4.1 trillion in inflation-adjusted dollars.

For that the US got dozens of fleet carriers, hundreds of other warships, tens of thousands of tanks and planes, millions of rounds of ammunition, plus supplying food and medical care to some twelve million men – plus the Manhattan Project and winning the war against two substantial enemies. As the article says:

Unlike in the ’40s, though, we’ve pretty clearly lost World War C. COVID has killed way more people than Hitler and Hirohito did, and unlike the Third Reich, it’s never going to go away. So while we’re getting used to the Forever Virus, we might as well pause for a sec and wonder: What the heck did all that spending buy us? 

Good question. I guess you could say it kept a lot of businesses afloat, and given the much larger US economy of today perhaps $6 trillion is not a surprise. Still, it seems rather thin compared to WWII results. But the real kicker of the article is this:

So far, $100 billion of it has been straight-up stolen, “resulting in the arrest of more than 100 suspects who span the spectrum from individuals to organized groups,” according to a CNBC report. Don’t worry, though, the feds are on the case, and so far they’ve recovered … $2.3 billion. 

$100 billion just flat out stolen? That’s most of NZ’s GDP! How is that even possible? Of course in just one state, California, they’re not able to account for where 49 million cheques totalling $320 billion of spending went in 2018 alone (Money. Wall. Pissing Against.) so maybe the Federal government’s doing better?

The article looks at a few of the crooks and scammers, but only the ones we know about that are responsible for a piddling few billion. There must be bigger crooks out there responsible for the remaining $97.7 billion still missing.

Incidentally, according to that article, Operation Warp Speed cost just $18 billion, and it’s one of the few C-19 programs that succeeded in doing what it claimed it would do.

Written by Tom Hunter

January 24, 2022 at 11:50 am

Vox Populi? Vox Humbug!

with 17 comments

That was General Sherman’s summation of the press’s response to General Grant’s great victory at Vicksburg on July 4, 1863. Sherman, a solid friend of Grant, bluntly said that while the press were praising the man now it came only after months of calling him a useless drunkard, and that they would turn on him again tomorrow when something went wrong.

I’ve already written – in Political Science and From ZOMG Omicron to “Long Covid”, – of the about-faces being taken by the likes of the CDC, Dr Fauci, Democrat governors and their MSM stenographers on Chinese Xi Snot-related things like masks, PCR tests, quarantine periods and what case numbers really mean – all of which is happening as the fortunes of the Democrat party nosedive, which is a complete coincidence.

The explosion in Omicron case numbers is just further evidence of how all those messages have to change if the Democrats are going to avoid being held responsible, although given how hard they pushed it in 2020 it’s going to be a slog to get away from stuff as blatant as “I’m gonna shutdown the virus”. The US MSM will try to help of course.

One of them, opinionater economist Paul Krugman, has become the go-to man for having to eat his words on almost every issue you can think of, entirely because of his pathetic and slavish devotion to the Democrats.

Sad to see what has become of a Economics Nobel prize winner, but he’s not alone.

They’re also refusing to cover the worsening shortages of food and other goods in US stores – which is a result of the impact on supply chains of their C-19 responses – leaving it to the British MSM, who are not so invested in defending Biden, to do the job, as the Daily Mail does here with “Back in the USSR“:

Holy Guacamole, sports fans. In 1989 Boris Yeltsin visited a Randalls supermarket in Texas and was so astonished with what he saw that he was despondent on the flight to Miami: “he sat motionless, his head in his hands… the last vestige of Bolshevism collapsed inside of the man”.

The odds of “President” Biden and his staff having a similar Come To Jesus moment after looking at the current #BareShelvesBiden are about zero, which is quite telling in comparison to a man who grew up in a communist system but could still face reality and learn.

As National Review’s Jim Geraghty (moderate Right Wingers you can trust) points out, local TV stations and newspapers, and their websites, across the USA, are covering this story, complete with those all-powerful photos of empty shelves, but their National affiliates refuse to pick it up.

The likes of Krugman, Hiltzik, and many other Democrat Operatives With Bylines continue to get published. However, they clearly are feeling the heat of those massive declines in readership (Die MSM, Die – Dying, they still beckon) because now they’re trying to take out their new competitors. Two recent examples are Joe Rogan, who they have whinged to Spotify about, asking them to pull his podcasts due to his “misinformation”….

… and then a hit-piece on “broadcaster”, Dan Bongino. The latter was seen as one of the successors to Rush Limbaugh but, like the Bernie Sanders-supporting Rogan, their impact is via Internet podcasts rather than talk-radio, let alone other older media – and not through the ring-fenced Social Media gardens of TwitFace and company either.

The fight was never summed up better than Bongino’s response to the The New Yorker.

It’s no surprise then that despite their great strivings to support Biden, the MSM is failing on that front as well, with his latest Quinnipiac poll at 33% popularity, three points down from the same poll in November in a year-long trend of decline. That’s five points worse than Trump was at the same stage of his first year (38% approval). Other recent polls are just as bad:

Not only that, but he’s dragging his entire party to its doom – although I’m not prepared to let Nancy Pelosi, Chuck Schumer and the rest of those idiots and their idiot policies off the hook:

That is a huge turnaround. I can recall nothing like it, even in years like 1994, 2002, 2010 and 2014 when the GOP kicked Democrat butt Mid-Term.

In the face of this, the Whitehouse idiots decided that what’s needed is a new messaging strategy – and they’re including the head of the CDC in that.

According to the WSJ, Walensky has been undergoing extensive media prep and has been coached by a media consultant ahead of several public briefings she plans to hold in the coming future.

On Monday, Rep. Ro Khanna (D-CA) told Fox News that the CDC should replace Rochelle Walensky with “someone who is compassionate, who is consistent, and where the messaging is clear.”

I guess Rachel Walensky’s flip flops on masks, PCR tests, quarantine periods, case numbers and vaccine boosters have proved to be a problem for Biden . Yeah! That’s the ticket, because even Biden can be different from the guy who said this:

“Even Dr. King’s assassination did not have the worldwide impact that George Floyd’s death did.”

Plus about ten billion other stupid things that have fallen out of his dementia-ridden old brain. Their first such effort was a 2 hour Biden press conference that had tongue-bathing journalists like the execrable PBS “reporter”, Yamiche Alcindor (PBS! How low have they sunk), raving about how he’d managed to stand up for so long.

Meantime, other people noted that on the issue of Ukraine alone he’d basically repeated what his military advisors had told him – that Putin has to do something, “would win“, with a “minor incursion” – shit that you’re not supposed to blab in public. This has resulted in both Russia and the US pulling staff from their embassies in the Ukrainian capital of Kiev, plus a blast at Biden from the Ukrainian President. It was so bad that even Late Night, Democrat Party, Cock Holster Comedian, Steven Colbert, took him to task on it.

“I would hate to see Joe as a hostage negotiator. ‘Why don’t we all just calm down? Just let everyone go…or shoot them.’ You gotta do something!”

But the most concise summation was this one from a former Special Assistant to GW Bush – who in 2020 undoubtedly bought into all the bullshit about Biden that he now professes to be surprised about – which is why he’s allowed on CNN:

As I’ve pointed out before, this is not a temporary glitch. This is what Biden always was, and unlike other Presidents who have been in trouble, he’s not capable of digging himself out of this hole.

As a result, the following cartoon that I’ve occasionally made reference to – published in early 2020 when all the Democrat nominees looked like losers – looks more prescient all the time.

And voila!

Written by Tom Hunter

January 24, 2022 at 12:40 am

Sad Stats and a world of unending fear

with 3 comments

Perhaps scary would be a better word. These being from the USA: Ten Statistics to Ruin Your Day.

Obviously there are pragmatic things like the $28 trillion debt of the USA and the increasing problems of getting military recruits because of obesity, other health problems and 10% of the pool (17-24 years old) having criminal records.

But these were the ones that I found sad:

1. The nuclear family fades in the USA:
According to a Pew Research study, the United States has the highest number of children living in single-parent households.  Almost one-fourth (23%) of children in the U.S. under the age of 18 live with one parent and no other adult, which is the highest in the world.

3. Tens of millions can’t read:
More than 30 million adults in the United States cannot read, write, or do basic math above a third-grade level.

5. We’re not having kids:
America’s total fertility rate fell in 2020 to just 1.67 births per female, the lowest in history, and well below the replacement level of 2.1.

Given the fading of the family that last is not surprising. But then there is perhaps the saddest of all – which feeds right back in the 1st.

8. But we’re lonely: A poll of 1,254 adults aged 18 and older found that 27 percent of Millennials have no close friends, 25 percent have no “acquaintances,” and 22 percent — or 1 in 5 — have no buddies at all.

Lindsay Mitchell addressed some aspect of this in her post, “Millennial Fetal Contentment”:

When enough Millennials reached young adulthood in the 2010s they cried out in pain. The real world wasn’t like the highly structured environments of their daycare centers or schools. Suicide, self-harm, depression, deviancy, drugs, self-mutilation (eg tatooing,) shock-hair colouring, and piercings became epidemic. When enough young Millennials had the chance to be an influence they promoted ‘Safe Spaces’ and Feminism and Gender Pronouns and Climate Change Catastrophisation and Racism to try to change their uncomfortable world into a place they felt at home.

When the world hurts you, and especially when you find you can’t control everything about even your small part of that world, you withdraw from it. The online world has the best safety since it is the most controllable by you. Lindsay finishes her piece with this:

The Millennial dream is everyone else’s nightmare.

She means in terms of control but what those stats above tell us is that another nightmare will be upon us before long where we don’t have enough young(ish) people, especially enough capable people, to power the world forward.

There are more than a few in the West who perhaps rather like that idea.

This slow destruction started decades ago:

In March of 1970, Anne Bernays penned a piece titled “What Are You Supposed to Do if You Like Children?”[1]  Her target was the Women’s Liberation Movement that was ushering in ideas that “men are sexual vampires, [and] marriage is stunting and exploitative.”

Those women who are “willing to acknowledge the remotest emotional obligation to husband and children, especially to children during their fragile first five or six years of life … can’t summon the time, physical energy, and psychic equipment to do two jobs simultaneously.  You can’t split a woman’s life down the middle and expect each half, like a severed worm, to go happily crawling off, to survive and function in perfect health.”

Yet that is exactly what has been demanded of most women as they valiantly try to raise a family and work outside their homes.  Or they simply decide that children are not worth their time or effort, or some other agency is left to the care and development of their children.

What I find incredible is that this feminism I grew up with in the 1980’s, that every one of my female friends supported, has not made women happier, as it was supposed to do.

And now women are being erased from many spaces by the transgender movement, to the horror of feminists, even though it was their ideas that started the ball rolling:

… it was Shulamith Firestone in the 1970s  who wrote that it has “become necessary to free humanity from the tyranny of its biology” and “eliminate the sex distinction itself [so that] genital differences between human beings would no longer matter culturally.”  Ultimately, Firestone asserted that the “blood tie of the mother to the child would eventually be severed,” and the “disappearance of motherhood” would follow.

Wish fulfilled, as the article points out by noting the steady legalisation of eliminating or marginalising oppressive words like father, mother, parents, son, daughter, and so forth: replaced by “gender-neutral language”. And the “legal” aspect is nasty, as this article noted:

Whereas the gay rights movement was about demanding more freedom from the state for people to determine their sex lives unconstrained by the law, the transgender movement demands the opposite: it calls for recognition and protection from the state in the form of intervention to regulate the behaviour of those outside of the identity group. Whereas in the past, to be radical was to demand greater freedom from the state and institutional authority, today to be radical is to demand restrictions on free expression in the name of preventing offence.

Exactly. With force of law.

Going back to the sad stats of the Millennials, many of whom are driving the Woke movement, the question must arise of how this has been affected by our two-year Pandemic Panic? There have been a couple of occasions where huge blackouts in New York City have led to baby booms nine months later, but I’ve yet to see the same from our lockdowns anywhere in the Western world. What’s different this time aside from a longer period of “nothing else to do”? Over at the NYT, David Brooks does not have an answer to any of this but points out that:

Not only is reckless driving on the rise, Yglesias pointed out, but the number of altercations on airplanes has exploded, the murder rate is surging in cities, drug overdoses are increasing, Americans are drinking more, nurses say patients are getting more abusive, and so on and so on. … Teachers are facing a rising tide of disruptive behavior. …

What the hell is going on? The short answer: I don’t know. I also don’t know what’s causing the high rates of depression, suicide and loneliness that dogged Americans even before the pandemic and that are the sad flip side of all the hostility and recklessness I’ve just described.

Well the massive increase in the murder rate is down to the sort of Democrat cities that Brooks loves, the hangovers from the Antifa/Burn Loot Murder riots of 2020, and idiot theories of law enforcement. But the rest of it probably has a lot to do with the response of TPTB to Chinese Xi Snot.

Sadly these effects may not go away anytime soon in our “post-Covid world”, at least judging by this argument from Commentary magazine, The Atlantic’s Nervous Breakdown:

The Atlantic reader who visits the website rather than simply journeying there through social-media links is turned into a doom-scroller, confronted time and again as she journeys down the homepage with headlines like this one: “America Is Running Out of Time.” Note how the title lacks specificity; it doesn’t need specificity, because this is what nearly every article in the Atlantic is about. (A recent feature in the January/February print issue of the magazine was titled, simply, “Are We Doomed?”)

“Bring Back the Nervous Breakdown,” urged a 2021 article. And so Goldberg’s Atlantic has. An astonishingly large number of stories in both the print and online versions of the magazine now focus on the irrational feelings of a very particular and privileged class of people—elite, left-of-center, educated people who ironically believe themselves too sophisticated to be emotionally manipulated like the unwashed Fox-viewing masses they abhor.

Pieces like Ian Bogost’s essay “I’m Starting to Give Up on Post-Pandemic Life” typify the Atlantic’s panic porn—the titillating personal account of a distorted negative emotional experience described lubriciously with no observable larger social purpose.

I read that last article. My advice is that you should not. A godawful piece of existentially painful navel gazing from a self-absorbed twat, who just happens to be “an American academic and video game designer.” He’s not alone: the article looks at another Atlantic writer, Alexis Madrigal, who caught Covid at a wedding despite being fully vaxxed, and promptly had a meltdown:

“The life disruption—the logistical pain you cause those around you—is now a major part of any bad scenario. As I write this, I’m now 10 days past my first symptoms, but I continue to test positive on antigen tests, and so I have not returned home. I haven’t hugged my kids for 10 days.”

He experienced only mild illness, his kids never got sick, and yet:

Madrigal’s conclusion isn’t that he might have overreacted in his risk assessment. He doesn’t even entertain that possibility. Rather, he doubles down on the idea of living in permanent emotional lockdown because of COVID: “Things aren’t likely to change that much for quite some time. Even after however many kids get vaccinated, there will still be breakthrough infections. Other variants could spread. Maybe we’re in this space for another year or two or three.”

Christ! What a hideous fate for a grand old American magazine that made its name during the US Civil War and was still an excellent read just twenty years ago.

FFS, we’re certainly never going to have a “post-pandemic world” if it’s heavily influenced by people like this, and while it’s tempting for me to make scathing observations about the modern writers of The Atlantic, the terrible truth is that there are apparently millions of people in Western nations that have been driven as insane as this – including New Zealand, judging by the frightened hordes lining up this week to get their little kids jabbed.

Despite this doom and gloom I will finish with this hopeful quote:

Human nature possesses an irreducible—or, if you will, an irremedial—capacity for resisting domination. We humans will not accept an harmonious arrangement of our lives that denies us all freedom to act as individuals. . . . We will not recognize as good any course of action that annihilates our sense of responsibility for the course of our lives. We cannot care for a world, however ostensibly good, in which we cannot recognize ourselves, or any whom we love.

Written by Tom Hunter

January 20, 2022 at 6:00 am

A second answer to Why?

with 4 comments

Why? was the title of a post by Nick K, my co-blogger here at NM, as he grappled with the “reasoning” behind the vaccine and mask mandates here in NZ and similar approaches taken in most corners of the globe.

I came across one possible answer to that question covered in the post, One answer to Why?, which looked at the control of popular thinking via language control in the modern context of Tech companies in the Webosphere.

Here’s some background to those companies and their leaders in this article from City-Journal in 2017, The Disrupters, which is all about the new Lords of Silicon Valley:

In just ten years, Facebook built a global empire that surpassed General Electric in market value—and did it with just 4 percent of the Old Economy giant’s workforce: 12,000, compared with 300,000. Whatsapp, a recent Facebook acquisition, managed an even more impressive wealth-to-labor ratio, with a $19 billion value and just 55 employees. Combined, both companies reach roughly one-sixth of humanity. Facebook’s entertainment colleague just to the south, Netflix, crushed Blockbuster’s mammoth national network of 9,000 stores and 60,000 employees with its more nimble workforce of just 3,700 employees.

Capitalism in action. Many firms have been so destroyed in the past by new competitors. The article goes on to explore what might happen next with AI, robotics and so forth, providing examples along the way involving brilliant young people, like Michael Sayman. In doing so the writer interviewed a number of the leading lights of this IT revolution and even got an opinion poll done of them to assess where they thought it was all going.

That’s where it gets sad – and scary. For a start these founders (147 were polled) don’t like talking about inequality, probably because of this:

As far as the future of innovation and its impact on ordinary people, the most common answer I received in Silicon Valley was this: over the (very) long run, an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial “gig work” and government aid.

Now I’ve done pretty well out of capitalism, but to me that future sounds like it sucks ass, even with a theoretical Universal Beneficiary Income (UBI). Fully Automated Luxury Communism it is not. It’s actually Marx’s “disguised form of alms”. It’s quite clear that these “thought leaders” are very leary of what may happen when they’ve built robots that can do most things better than a human.

And what of the political and philosophical attitudes that go with all this? Well it’s not actually as obvious as you might think. First with the political:

Contrary to popular opinion, most of Silicon Valley is not a libertarian ATM. The tech industry is overwhelmingly Democratic. In 2008, 83 percent of donations from the top Internet firms went to Obama, not John McCain. Many of the Valley’s household names, including Google’s then-chairman Eric Schmidt, personally helped Obama in both presidential campaigns. Republicans rarely get much money or talent from the Valley.

Yet they’re against unions and regulations (of their industry) and big on free trade of course, which is why Bernie Sanders gets no love from these people, nor would any Democrat of the pre-1990’s. Nor Donald Trump. Bill Clinton sniffed the winds well.

Then there’s the philosophical ideas that drive their politics:

What I discovered through my survey was that Silicon Valley represents an entirely new political category: not quite liberal and not quite libertarian. They make a fascinating mix of collectivists and avid capitalists…But Silicon Valley philosophically diverges with libertarians and conservatives in a key way: they aren’t individualists. 

He gives a great example of the latter:

When the libertarian icon Rand Paul began his early run for president in 2015, in San Francisco, he expected to be greeted like a hero. During the rally that I attended, Paul got rousing applause for railing against mass government spying. But when Paul asked, “Who is a part of the leave-me-alone coalition?” expecting to hear cheers, the room went silent. “Not that many, huh?” he nervously asked.

He’s not the only one who is nervous on hearing that, and it leads straight into this:

In my survey, founders displayed a strong orientation toward collectivism. Fifty-nine percent believed in a health-care mandate, compared with just 21 percent of self-identified libertarians. They also believed that the government should coerce people into making wise personal decisions, such as whether to eat healthier foods. Sixty-two percent said that individual decisions had an impact on many other people, justifying government intervention.

That is, tech founders reject the core premise of individualism – that citizens can do whatever they want, so long as they don’t harm others.

And consider that several of these fantastically wealthy men control companies that very much can aid (or oppose) a government via their extraordinary reach into influencing the lives of hundreds of millions, probably billions, of people. This is the world of “Nudge Theory”, and it’s very applicable to the last two years of the C-19 pandemic – a period that has seen their fortunes skyrocket beyond what was even thought possible in 2017, in several cases almost doubling to $150 billion or $200 billion plus.

Hold that thought.

What has all this done to the US state that is home to almost all of this wealth and genius, California?Well, as this National Review article describes, it’s not good, The Crumbling California Model. Again it’s lengthy with a lot of links to prove its points, but basically it comes down to this:

Yet it’s time now to see what California’s “success” is all about. It reflects a new kind of economy — dominated by a few large companies, with an elite workforce, a large service class, and a population increasingly dependent on wealth redistribution. This emerging oligarchic regime, however progressive it likes to label itself, is more feudal than egalitarian, more hierarchical than competitive, financed largely by the same tech giants who help fund Newsom’s successful defeat of the recall.

Exactly what was described by that 2017 poll of those Californian tech leaders. That state was once a remarkably diverse, job-rich economy, with vibrant aerospace, oil, trade, manufacturing, business services, and agriculture sectors, as well as software and media. But aside from the IT industry those sectors have fallen away, taking with them the well-paid jobs for people who can’t program a computer. If living on wealth redistribution sounds great to you, consider this:

For most, the reality on the ground is increasingly challenging. The state is now the second-most unaffordable state for home-buyers, a particular challenge for Millennials, and it suffers the highest rate of “doubling up” — only our friend Hawaii does worse. California has the largest gap between middle and upper wage quartiles in the nation, and it has a level of inequality greater than that of Mexico and closer to that of Central American countries such as Guatemala and Honduras than to such “progressive” developed counties as Canada and Norway.

The paradox is that California Democrats, the voters as well as the politicians, adore those welfare states and wish to be more like them without recognising that there is more to “welfare” than government money.

Back to that article I linked to the other day, looking at the control of language and ideas in our modern world. It finishes with this:

During the last three decades and possibly more, Western governments working hand in glove with large corporate interests have spent enormous energy and resources on perception management techniques designed to effectively undermine citizens’ ability to oppose the policies that these same elites, in their incandescent wisdom, have decided are best for the people. 

The attacks of September 11th gave these corporate and government leaders both the additional funds and the political latitude they needed to greatly accelerate work on these culture-planning processes. The Covid crisis has put the whole game on steroids. 

We have many ways of ignoring these frightening developments, most common and intellectually lazy of these being to dismiss them without examination under the rubric of “conspiracy theories.”

Bureaucracy vs. Robber Barrons

with 2 comments

“When propaganda is the goal, accuracy is the victim.”

I recently came across two articles from past years that I’ve had bookmarked and which I’ve enjoyed reading again over this summer.

First up is some humour that author J K Rowling may be treating more seriously in her ongoing fight with the Trans community, especially after getting her name removed from the Harry Potter movie franchise by Warner Brothers as they launch a 20th anniversary celebration of the first HP movie.

The humour comes from an essay written in 2006 for the Michigan Law Review, which analyses what Rowling is effectively saying in her HP books about bureaucracy, government and the media, Harry Potter and the Half-Crazed Bureaucracy:

The critique is even more devastating because the governmental actors and actions in the book look and feel so authentic and familiar. Cornelius Fudge, the original Minister of Magic, perfectly fits our notion of a bumbling politician just trying to hang onto his job. Delores Umbridge is the classic small-minded bureaucrat who only cares about rules, discipline, and her own power… The Ministry itself is made up of various sub-ministries with goofy names (e.g., The Goblin Liaison Office or the Ludicrous Patents Office) enforcing silly sounding regulations (e.g., The Decree for the Treatment of Non-Wizard Part-Humans or The Decree for the Reasonable Restriction of Underage Sorcery).

Rowling even eliminates the free press as a check on government power. The wizarding newspaper, The Daily Prophet, is depicted as a puppet to the whims of Ministry of Magic.

Sounds appropriate for our times. I don’t know how many of you have read the series, likely to your kids or even grandkids, or perhaps a guilty pleasure for yourself, but you may recognise some of this from the abstract.

I did not have to re-read the books to see all this, as it had jumped out at me when I read them originally, even if it went over the heads of my kids. I was hardly the only parent who speculated on what Rowling’s experience with government and bureaucrats had been in real life as she wrote her novels in poverty. Having said that it seems that Gen Z kids themselves continue to re-read the books now as they age into their twenties and thirties, where they likely also draw similar parallels:

it seems likely that we will see a continuing uptick in distrust of government and libertarianism as the Harry Potter generation reaches adulthood.

One can only hope. Which brings me to the next article, about a world almost completely at odds with the first, the Gilded Age of America, otherwise known as the time of The Robber Barrons.

More accurately The Myth of the ‘Robber Barons’. It turns out that it was created less at the time (despite cartoons such as the one above) than in the 1930’s, just when it was needed by the US Left, as described by historian Burton W. Folsom in his book about the subject.

It will surprise nobody to find that Far Lefters were behind it and that they were very ignorant about economics – and many other things. The main culprit was one Matthew Josephson, who quite literally wrote the best-selling book, The Robber Barons, after being inspired by Charles Beard, America’s foremost progressive historian, first at varsity and then years later during the Great Depression:

Josephson, the son of a Jewish banker, grew up in New York and graduated from Columbia University, where he was inspired in the classroom by Charles Beard, America’s foremost progressive historian—and a man sympathetic to socialism…“Oh! those respectable ones,” Beard said of America’s capitalists, “oh! their temples of respectability—how I detest them, how I would love to pull them all down!” Happily for Beard, Josephson was handy to do the job for him. Josephson dedicated The Robber Barons to Beard, the historian most responsible for the book’s contents.

Writing in the inspiring times of 1932 Josephson reached back fifty years in time to explain it all, but the following comments provide a clear idea of the quality of “analysis” he brought to the subject:

In a written interview for Pravda, the Soviet newspaper, Josephson said he enjoyed watching “the breakdown of our cult of business success and optimism.” He added, “The freedom of the U.S.S.R. from our cycles of insanity is the strongest argument in the world for the reconstruction of our society in a new form that is as highly centralized as Russia’s. . . .”

One is tempted to snigger but today we live with Bernie Sanders and Alexandria Occasional-Cortex, who believe the same shite about socialism and its Siamese Twin, giant centralised government.

He did little research and mainly used secondary sources that supported his Marxist viewpoint. As he had written in the New Republic, “Far from shunning propaganda, we must use it more nobly, more skillfully than our predecessors, and speak through it in the local language and slogans.” Thus he wrote The Robber Barons with dramatic stories, anecdotes, and innuendos that demeaned corporate America and made the case for massive government intervention.

Ah yes. As with today’s “journalists” the Narrative is everything and is best supported by dramatic stories. As Folsom points out in the article, that means there are lots of mistakes: “On page 14 alone, Josephson makes at least a dozen errors in his account of Vanderbilt and the steamships.” As Folsom says, “When propaganda is the goal, accuracy is the victim.”

But the main error – actually showing up on that page – is that Josephson never differentiated between market entrepreneurs like Vanderbilt, Hill, and Rockefeller and political entrepreneurs (i.e. government subsidy harvesters) like Collins, Villard, and Gould, even as he was honest enough to praise aspects of the former and lash the latter:

He quotes “one authority” on the railroads as saying, “The Federal government seems . . . to have assumed the major portion of the risk and the Associates seem to have derived the profits”—but Josephson never pursues the implication of that passage.

While the book hit the best-seller lists for six months Josephson was running around Russia praising bloody Stalin and his system. He missed the gulags, the farm collectivisations and all their horrors, especially in the Ukraine, and saw only the factories and other “glamorous” things:

He attended official dinners and even talked with select Russian writers and artists. He was ecstatic. The Soviet Union, Josephson said, “seemed like the hope of the world—the only large nation run by men of reason.” … Josephson also never realized that the Soviet factories he saw were often directly copied from Western capitalist factories—and were funded by Stalin’s confiscatory taxation. Instead, Josephson thought he had stumbled into a workers’ paradise, the logical result of central planning and superior leaders.

This book would go on to be more than just a best-seller: it had huge influence in the worlds of high schools, academia and journalism for decades:

Historian Thomas Brewer, who in 1970 edited The Robber Barons: Saints or Sinners? observed that the majority of writers “still adhere to the ‘robber baron’ interpretation.” Historian David Shi agrees: “For well over a generation, The Robber Barons remained the standard work in its field.” For many textbook writers, it still is. In the main study guide for the Advanced Placement U.S. history exam for 2015, the writers say:

America [1877-1900] looked to have entered a period of prosperity with a handful of families having amassed unprecedented wealth, but the affluence of the few was built on the poverty of many.

2015 FFS? It’s a wonder that Silicon Valley exists at all with this sort of high school education, though perhaps it wasn’t as bad when the likes of Zuckerburg, Gates, Bezos and Steve Jobs were passing through it, and of course Musk was educated in South Africa.

Folsom explains that this success, despite all the sloppy errors in the book, comes down to two reasons.

First, it was tailor-made for the Progressives of the 1930’s eager to blame the new generation of robber barons for the Great Depression. I always laugh at those Lefties who claim that Righties pined for President Herbert Hoover: it’s even in the opening song for All In The Family because of course it is. See how this cultural shit works? In fact:

Those harmful federal policies include the Federal Reserve’s untimely raising of interest rates, making it harder to borrow money; President Hoover’s blundering Farm Board; his signing of the Smoot-Hawley Tariff, the highest in U.S. history; and his disastrous Reconstruction Finance Corporation, which dispensed massive corporate bailouts to political entrepreneurs. Finally, Hoover muzzled investment by repealing the Mellon tax cuts and promoting a huge tax hike.

Including income tax rates that went up to 70%, which FDR criticised, but which he cunningly kept after getting elected. Oh yeah, we Righties love that Herbert Hoover. Actually the admiration is for “Silent Cal” Coolidge, his predecessor, who could have run for office again in 1928 and would have handled all of the above very differently (of Hoover he said, “That man has offered me unsolicited advice for six years, all of it bad.”)

The second reason is that a bunch of Marxist historians who influenced a lot of the post-WWII historical profession, loved the book and made sure it was embedded in the curriculums of their students, starting with Richard Hofstadter:

“My fundamental reason for joining [the Communist Party],” Hofstadter said, “is that I don’t like capitalism and want to get rid of it.”

He still desired that after quitting the Party. He’s also the guy who wrote the nasty little polemic about the US Right-Wing, The Paranoid Style in American Politics. Great guys communists, whatever profession they are they’re still communists, with all the toxic nastiness and fanaticism involved.

Folsum’s book, The Myth of The Robber Barrons
Also, The Forgotten Man

Written by Tom Hunter

January 4, 2022 at 6:00 am

The Dying Dollar

leave a comment »

That’s a hell of a title for an article but it’s hard to argue with the points made in it, especially when you consider the games played with the Consumer Price Index (CPI) over the years:

The methodology of the Consumer Price Index used to be a fixed basket of goods, now the basket is dynamic, allowing them to take out goods that increased significantly in price and replace them with substitutes that have more modest price increases or even price declines. According to economist Peter Schiff, the original CPI methodology would today show an inflation rate of around 15 percent. 

That last figure seems correct when you look at the price increases of ordinary things in the USA that people buy every day, as opposed to iPads. And it’s ordinary people who get screwed the most and the fastest by inflation, which is a tax you can’t avoid:

The wealthy hold assets and debt so they’re relatively protected, but the middle and working classes face penury. Remember the World Economic Fund slogan “You Will Own Nothing and Be Happy”? That dystopian vision is what runaway inflation is accelerating us towards. Wage workers won’t be able to afford down payments on property, credit will be tightened and rates will be raised to combat inflation. 

I think we’re seeing that here in NZ also. One of the many reasons the young friends of my kids gave for voting Labour in 2017 was that they saw little hope of being able to afford a house much before they hit their forties. Now they don’t even want to talk about it, so bleak have the prospects become, although their parents assure them they’ll help out.

Back in the USA there are some geo-political realities that must be accounted for because of the US dollar’s status as the ultimate reserve currency:

It backs all but a handful of other currencies around the globe and as such, its depreciation can lead to depreciation of other countries’ currencies, compounded by those countries’ own central bank inflation. The reserve currency status of the dollar is chiefly responsible for America’s standard of living being as high as it is. The entire American economic model is built on the dominance of its currency. We are able to sustain a perpetual trade deficit with the world because of it. We export dollars and we get cars and electronics and food in return. On the fiscal side, inflation is a tax paid not just by Americans who hold dollars, but by dollar-holding foreign countries, companies, and citizens as well. 

Countries tolerate this trade-off because of the anti-inflation credibility built over the past 40 years by hawks at the Fed like Paul Volcker.

Ah yes. The Federal Reserve of the USA. With them lies the solution. There’s just two huge problems with them providing a solution.

First is that they’ve enabled this bullshit to happen in the first place. Sure, the Federal government, especially in the hands of the Democrats, have reached unseen levels of insanity with spending. But it would not be possible for them to do this were it not for the Fed. When it comes to inflation, it’s the Fed, stupid:

Figure 2 (below) shows Real M2, adjusted for inflation (with 1982-84 dollars serving as the base), from 1959 to the present day. Here too, we see the line take a vertical turn in 2020. If those graphs do not alarm you, they should.

There are other equally scary graphs in that link, of things like the Fed Balance Sheet and Funds Rate, covering the infamous Quantitative Easing and Zero Interest Rate Policy (ZIRP) of the last decade since the GFC. The QE back then did not cause inflation, despite fears that it would. Why the difference now?

That [2008-2014] money never entered the real economy and did not even count as part of M2.

By the end of Bernanke’s term in January 2014, M2 was $11 trillion. In over five years’ time, the money supply increased 42%.

Powell’s Fed, since March 2020, has superintended a 37% increase in M2 – in only a third of the time that it took Bernanke’s Fed to witness similar growth.

Second, all this is piled on top of an already terrifying debt level of $28 trillion, more than 100% of GDP, which means that it’s going to be almost impossible to repeat what Volcker did starting in 1979:

Despite historically low interest rates, the federal government is projected to have spent $300 billion this year on interest payments on the national debt. Even a mild increase in interest rates would increase government expenditures on interest payments by hundreds of billions of dollars. 

The Federal Reserve’s hands are tied, as evidenced by their decision to keep interest rates between 0.00 percent and 0.25 percent, even while removing “transitory” from their vocabulary. Increase interest rates quickly and significantly enough to curb inflation and the entire market melts down along with the federal government’s fiscal budget.

What then will Fed Chairman Powell do? My bet is nothing for at least another year:

[He} faces a Sophie’s Choice scenario: continue to allow inflation to spiral out of control by keeping interest rates low—which would result in all manner of civil unrest and possibly even a real insurrection—or raise interest rates, which would crash the stock market and force Congress to cut spending, ensuring the complete and total destruction of Congressional Democratic majorities, the likes of which the country has never seen.

So wait until the GOP takes control of Congress in 2022, possibly with large majorities, and let them take the hits along with Biden. But the Democrats might not care; Biden – and their own policies – are millstones around their necks that are drowning them right now. Perhaps losing in 2022 will be the best thing that can happen to the Democrat Party? Promise an end to the pain in 2024 with lots of soothing government programs and win it all back?

The first article ends on an even more cynical note than I’m capable of:

The more 3D printed suicide pods I see the less I believe in mere coincidence. What I do know is that the ultra-wealthy and the banks have the most to gain from this and they are the ones who have most encouraged the policies that have brought us to this. It seems that they are well-positioned to buy up the remaining assets of middle and working class Americans at fire sale prices, after they have finished setting fire to the economy. But then again, it could just be incompetence. That is one commodity that there is no scarcity of among those who occupy the commanding heights of power in America. 

One thing I can say with confidence is that the government will not act. It will do too little, too late. There isn’t the courage left in our political class to make hard decisions. There are no more Jimmy Carters. We have to begin thinking about what comes next. 

Lastly this article has more up-to-date figures, and a better way of framing the impact on the US fiscal budget from increased interest rates:

The federal government will spend around $413 billion in 2021 on debt interest alone, according to the Congressional Budget Office. Debt service was a comparably reasonable $197 billion in 2010.

But remember that is at about one percent interest. Each one-percent interest-rate increase costs another $413 billion. More precisely, each one-percent interest-rate increase costs American taxpayers another $413 billion (and climbing.)

If the Fed was serious and raised rates to five percent—which still may not be enough—that would be close to $2 trillion in interest the federal government would need to pay annually. That’s half of the entire federal budget. Americans will be outraged to discover that Social Security, Medicare, defense spending, infrastructure, and everything else will need deep cuts in order to pay interest on money long spent by craven, irresponsible politicians. 

Meh. Let the GOP deal with that; they’re always boasting about being better with budgets and spending than the Democrats. Let them cut all those areas in 2023 when they’re in charge of Congress. By the same token the GOP will have to hope that Biden refuses to sign such cuts, going against his grain as it would be, as well as letting him be the fall guy for those millions of Americans who think the President is in charge of this stuff.

Written by Tom Hunter

December 30, 2021 at 1:03 pm

The slow blade penetrates the richest Democrats

with one comment

In this post – US Government cuts spending by $5 trillion – I’d already taken a look at the fighting going on inside the Democrat Party over their insane spending plans.

Insane because these multi-trillion dollar plans came on top of previous multi-trillion dollar plans already passed and on top of the “normal” government budget of $6 trillion plus.

Since that post the infrastructure bill ($1.2 trillion) has been passed by the US Senate and signed into law – thanks to help from The Stupid Party (GOP). The majority of the money is never going to be spent on what is actually infrastructure; roads, bridges, water works and so forth. The Progressive wing of the Democrats finally, grudgingly voted for it, accepting that they could no longer hold it hostage to the bill they really wanted, Build Back Better (BBB). They accepted the promises of Schumer and Pelosi that BBB would still pass, all $3.5 trillion of it.

Pelosi did get it through the House (with eleven idiot GOP votes) but it stalled in the Senate thanks to two Democrats: Senators Manchin (WV) and Sinema (AZ), the former in particular.

“President” Biden had already screwed up negotiations before, undercutting both Pelosi and Manchin. But the latest negotiations between he and Manchin were the last straw. While Biden admitted that the negotiations were probably going to go into 2022, he claimed that Manchin had “reiterated support” for the framework’s funding level. But Manchin had never agreed to those numbers – Biden’s statement was just a straight-up lie. That became very obvious when Manchin responded: “The president put out a statement. It’s his statement, not mine,” That’s a very polite hint, but incredibly the White House doubled down on their lie.

That was it. Just to rub salt in the wound, Manchin made the announcement on Fox News.

In addition to not pissing more money against a wall to add to already worrying increases in inflation, and the national debt, there was also one more great reason to celebrate the failure of this monstrosity: no change to the SALT deductions.

SALT you ask? No, it’s not the payment to Roman soldiers (from whence we get the word, salary). S.A.L.T stands for State And Local Taxes and they were a big part of the tax reforms the GOP passed a few years ago under Trump. In the USA when you do your annual tax returns you can deduct from your income the money you’ve paid in State and Local (usually meaning city) taxes before you apply Federal taxes.

It’s basically a tax deduction from the Federal side and it can add up. In Illinois I did appreciate not getting screwed twice for the 3% State Income Tax, and since then it’s gone up to 5%. In California it’s 13% and other Democrat One Party states and cities have followed the same path in introducing and then jacking up their tax rates, all of which are flat taxes. After all, their voters could deduct all that money from the Federal side so who cared – aside from GOP-controlled states that largely have no state income taxes. Let them carry more of the Federal burden while Blue states got on with spending.

In the 2017 tax reform package the GOP finally put a stop to this bullshit by capping the SALT deductions at $10,000. The Blue states howled and have not stopped howling since. Understand that this made no difference to the vast majority of working people in those states, since they didn’t earn enough to reach that threshold and could still deduct SALT as they always had.

But the richest 1% of Democrats, big donors to the Party, were not happy and have banged the drum behind the scenes for years now to eliminate the cap. Being one of these people herself, Nancy Pelosi was eager to help and one of the dirty little secrets of the BBB bill was that it would have eliminated that cap and given them a huge tax break, along with a spending assist to their pals running California, Illinois and New York.

So that’s now also dead. Excellent. Well done to the GOP for having screwed the richest 1%.

In case you’re wondering, Crenshaw is referring to this piece of performative bullshit from a prominent Democrat hypocrite – although to be fair it may be that she’s too dumb to understand this since she voted for the BBB.

Written by Tom Hunter

December 20, 2021 at 12:11 pm

Inflation heading this way in 2022

leave a comment »

In effect we’ve already been seeing inflation in New Zealand for a year now, as the huge flush of government created / borrowed money, designed to keep businesses and people afloat, has flowed into a New Zealand economy that could not absorb it thanks to lockdowns and other restrictions imposed by the government to fight the great Chinese Xi Snot pandemic. It’s just that our inflation has mainly been in the form of insane increases in house prices across the nation, none more so than in Auckland (Refer to the chart at the end of this article).

But in the US inflation is not showing up in house prices – yet. Over there it’s crashing into people’s consciousness in the prices they’re paying for everyday products.

Inflation hit 6.8% for November, which is the worst mark since 1982 when the country was still recovering from the Jimmy Carter years.

That’s just the generic figure and its calculation quite deliberately misses some everyday things. For ordinary people the following is the real inflation they’re facing.

Incidentally that article points out that this shocking piece of economic news is the likely reason why the following happened…

Earlier in the week, news broke that the White House had been colluding with mainstream media outlets in order to change the narrative surrounding Joe Biden’s fledgling economy. That collusion quickly produced results, with outlets such as CNN, MSNBC, and CNBC complaining that the administration was being treated unfairly.

Inflation for some of these things are already flowing into NZ, starting with the price of petrol. But the rest will be along soon enough to add to our already unaffordable homes, as pointed out by Mr Reddell at Croaking Cassandra:

If house price inflation slowed to 1 per cent per annum, year in year out and incomes rose by 2.6 per cent per annum, in 20 years time the nationwide price/income ratio would be 5.85.

And if by some chance you think a price/income of 6 doesn’t sound too bad. well (a) you’ve just too used to latter day New Zealand, and (b) check the table on page 15 of the Demographia report for the metropolitan areas (most of them) with ratios lower than 6, in lots of cases much much lower. New York – never really thought of as a cheap place to live – shows at 5.9, Montreal at 5.6, Manchester (UK) at 4.8, Nashville at 4.2, Edmonton at 3.8, and on downwards.

Graph from an older post, A Distorted Economy:

Written by Tom Hunter

December 11, 2021 at 5:00 pm

A trucker speaks

with one comment

It’s always good to hear something from the coal face of a problem.

In this case the ongoing logistics crisis in the USA, which is much more than the global shipping problems that every nation is experiencing, see here, here and here.

I’m A Twenty Year Truck Driver, I Will Tell You Why America’s “Shipping Crisis” Will Not End.

It seems that one of the basic problems is that at the US ports there is perhaps only one crane for every 50-100 trucks.

Let’s start with understanding some things about ports. Outside of dedicated port trucking companies, most trucking companies won’t touch shipping containers. There is a reason for that.

Think of going to the port as going to WalMart on Black Friday, but imagine only ONE cashier for thousands of customers. Think about the lines. Except at a port, there are at least THREE lines to get a container in or out. The first line is the ‘in’ gate, where hundreds of trucks daily have to pass through 5–10 available gates. The second line is waiting to pick up your container. The third line is for waiting to get out. For each of these lines the wait time is a minimum of an hour, and I’ve waited up to 8 hours in the first line just to get into the port. Some ports are worse than others, but excessive wait times are not uncommon. It’s a rare day when a driver gets in and out in under two hours. By ‘rare day’, I mean maybe a handful of times a year.

The reason this didn’t matter before was that the system had been smoothly flowing for years without the sort of major disruptions caused by government Covid responses, but once those problems hit, the system can’t recover quickly because it has no reserves. Think of it like a huge power station running on coal or gas; it’ll run great for months or years on end, but it’s not designed for rapid start up so if you shut the whole thing down it takes days to fire up.

The driver points out that as member of the Teamsters union he gets paid by the hour so although frustrating he’s not losing money. That’s not the case for the majority of truckers who are owner-operators. His opinion is that most will make almost no money and therefore have not shown up. So:

  • Not enough trucks because there’s no money in it.
  • Not enough port workers because of vaccine mandates and government relief payments that have seen them not return.
  • Not enough warehouse workers (where containers are unpacked) because the money is shit and the job is tough.
  • Not enough spaces to store containers (see this post)

But his key takeaway is this one:

What is going to compel the shippers and carriers to invest in the needed infrastructure? The owners of these companies can theoretically not change anything and their business will still be at full capacity because of the backlog of containers. The backlog of containers doesn’t hurt them. It hurts anyone paying shipping costs — that is, manufacturers selling products and consumers buying products.

But it doesn’t hurt the owners of the transportation business — in fact the laws of supply and demand mean that they are actually going to make more money through higher rates, without changing a thing. They don’t have to improve or add infrastructure (because it’s costly), and they don’t have to pay their workers more (warehouse workers, crane operators, truckers).

Before the pandemic, through the pandemic, and really for the whole history of the freight industry at all levels, owners make their money by having low labor costs — that is, low wages and bare minimum staffing. Many supply chain workers are paid minimum wages, no benefits, and there’s a high rate of turnover because the physical conditions can be brutal

So this is a market failure, and he says that there are no incentives in the system that will make it change.

Nobody is compelling the transportation industries to make the needed changes to their infrastructure. There are no laws compelling them to hire the needed workers, or pay them a living wage, or improve working conditions. And nobody is compelling them to buy more container chassis units, more cranes, or more storage space. This is for an industry that literally every business in the world is reliant on in some way or another.

By “compelling” you know he means laws and regulations (he is a Teamster after all) and perhaps the industry is such a monopoly, even if there are many companies competing with each other inside it, that such are needed. But it’s not like the industry doesn’t already have a mountain of regulations and laws around it.

To me it seems that it’s better to see what incentives can be changed or introduced because market incentives work better and faster than compulsion.

But how? Because it’s infrastructure one can’t just craft up another port to equal that of LA. These so-called natural monopolies are why we have Transpower in NZ looking after the primary power transmission lines, since nobody would ever “compete” by building a second or third set. Perhaps in this case the port could be cut up into multiple companies that are able to set their own rules for shipping, thus creating competition in its best form, the competition of ideas about how to do things.

I see that Florida Governor Ron DeSantis has already proposed one solution – send the ships to the ports of his state. That would be a major re-direction, especially for the China-US Pacific run (I’d think they’d transit the Indian and Atlantic oceans) but perhaps the extra time and fuel costs are now completely offset by the gains made in avoiding the West Coast?

Written by Tom Hunter

November 30, 2021 at 6:00 am

Youth Hostels gone

In the Winter of 1983 I drove all over the South Island for three months, never having visited it before, and stayed in Youth Hostels most of the time. Good memories of the people I met there, mostly young foreigners.

The only YHA place I ever rejected was the Pigeon Bay one that sat on farmland in Banks Peninsula. Leaving a mate’s flat in Chch one afternoon for the hostel I steadily came under attack from one of the worst cases of the flu I ever experienced. By the time I’d climbed the hills out of Lyttelton, driving from sealed roads to gravel with grass up the middle, as a cold night fell, to find a darkened building in the middle of nowhere, no idea where to get the key from, and feeling as sick as a dog, I’d had enough. I scuttled back the long way around to the YHA in Chch, briefly disturbing a petrol station owner who had retired for the night and persuading him to start the pumps up.

The lovely folks at the Christchurch YHA yielded on their normal rules of not allowing people to stay during the day and allowed me to rest for two days beside a roaring wood fire in a pot belly stove while I read cheap, trashy novels and indulged in hot drinks and as much pseudoephedrine as I could cram into my system.

Which brings me to this news.

Youth Hostel Association to close its hostels after 89 years

The YHA said the extended Auckland lockdown and no prospects of an international visitors this summer left the association in an unsustainable financial position.

The 11 hostels owned by the association will close from 15 December 89 years of operation.

“YHA was looking forward to a bright future in 2019 having just opened a new hostel in Tekapo. Unfortunately, the Covid-19 pandemic has just gone on too long for us to be able to ride it out”

The YHA should have been one of the strongest operators given that it had a very low cost structure, even with low-spending youth as their customers. If YHA is in this sort of trouble then it has to be concerning for the rest of the tourism industry.

Written by Tom Hunter

November 25, 2021 at 12:27 pm