Donnerstag, April 28, 2011
How To Destroy An Economy...
Consider a country that has a divided school system. All children go to elementary school through the 4th grade. Based on grades, a teacher's assessment of the child's natural abilities, as well as discussions with the parents, children are the sent to three different types of schools: the clever ones are sent to a school designed to turn them into well-educated, widely read young people who, basically, reflect the top 25% of the country's potential; the bright ones, but with little ambition or from blue-collar families, go to what amounts to a trade school, learning the proper tools to run a business or become an electrician (math, physics, but not much in the way of literature analysis); the third group goes to a school that is designed to churn out low-level employees such as retail sales people, gas station attendants, that sort of group, this time the lower 25% or so of the country's potential. That middle group is, of course, the larger of the three, with around 50%.
Those going to the clever schools overwhelmingly go on to proper universities, or enter management apprentice programs. Those going the bright schools go into all sorts of apprentice programs, and have a university path in fields such as engineering and other applied sciences. The others go out and get jobs, either directly or after a training period.
That, in a nutshell, is how the German schooling system works. First and foremost, it does recognize that there are differences in intelligence and that there are differences in social origin that can make or break individuals, and for all its flaws - and believe me, after putting my children through that system, there are many - it works well for Germany. You learn at an early age that choices made, right or wrong, have real-world implications down the road. You learn, as well, that you can surmount those decisions, but it takes hard work - transferring from the lower 25% to the upper 25% is not unheard of, but you have to prove to the system that you belong elsewhere - and is something that people respect and can be proud of. Muddling through lands you down at the lower cohort, but even someone not terribly gifted can, by dint of hard work and perseverance, can succeed. Children, of course, from wealthy families can afford to have tutoring to get them through the rough patches, and families with little money will struggle, but it's for a good cause: getting your Abitur - it is roughly the equivalent of an Associate Bachelor's degree in the US, i.e. high school + 2 years of college - means that you have, effectively, been approved by society as being someone who has passed the first test of becoming a productive member of society.
Now, there is one area in Germany that has been spectacularly successful over the last 50 years: Baden-Württemberg, the south-western corner of Germany. It's where Porsche and Mercedes call home; it's where the largest and most successful engineering firms are located; incomes are high, culture is good, life is well organized (there are rules about when you must sweep your sidewalks) and the virtues of the "Schwäbische Hausfrau", or Swabian Wife, are well known. It's a very self-satisfied area, rightfully so.
Now that there is a green-red coalition (German political parties go by a color in the normal vernacular: the Greens are the ecological party, the Reds are socialists, the Blacks are christian conservatives and the Yellows are a kind of liberal) running things in Baden-Württemberg, they have started the discussion about abandoning the three-tier system for a single school system.
In other words, they want to deconstruct exactly that system that has been a major contributor to the success of the German economy.
This is how you destroy an economy in the long run: dismantle the school system in the name of an illusionary system that "is more equal", forcing the bright and clever ones to be bored while pretending those left over are overwhelmed and frustrated. The Green-Red coalition was voted in - the coalition came after the election, not before it - after the Fukushima accident in Japan made the pre-nuclear policies of the blacks unacceptable for many swing voters: a protest vote, fundamentally, that now gives the more radical amongst the greens their opportunity to change how the country is run.
They are going after the school system first, as it is one area where they can simply make it so.
What is it with modern educators? They are sacrificing methods and systems that work in the search for something that is, purportedly, better: however, empirical evidence shows that these sorts of changes makes things worse, rather than better, but too many careers, I suppose, and too much professional status is involved for anyone to admit that the kids are worse off, rather than better.
This is how you destroy an economy: make sure the kids don't get an education that means anything. Make sure they know about gay history and how capitalism is bad, but not how to write something that people actually can understand or do their sums correctly. It takes a while, but it does explain how so many in the pedagogic business are on the political left.
Mittwoch, April 27, 2011
Still missing the point...
I guess I'm blessed by not having to watch shows like this, as the righteous ignorance would drive me up a wall.
The price of oil is a function of market prices: supply and demand.
Nothing more, nothing less. Oil is, for the purposes under consideration here, fungible: there are several key places where the oil prices are recorded, from oil from the North Sea to Saudi Arabia to Siberia. Oil prices have futures because companies want to lock in supplies and prices for business purposes.
The price of oil, as a function of supply and demand, is dependent on both supply and demand: if supplies are tight, prices go up. Right now, supplies are not tight.
It's a function of demand. The world is, economically speaking, no longer a duopoly - the US and the EU - but has added a major player in terms of oil demand: Emerging Asian countries, largely India and China, but also including a slew of countries that are starting to transcend poverty.
Hence, Whoopie: you're pissed that a bunch of Chinese and Indians are using the oil that you want to use. To adopt her vernacular: Get used to it, Girl.
She asks the question "Why are they doing this to us?"
The answer: they aren't doing that to you. They're just doing it.
And Jim Avila: "There is really no rational reason for the prices to be so high"? Really? That's your answer? Take a look at world demand patterns and don't tell me there's no rational reason for the prices to be high.
Guess what: they're not going to go down. Too much international demand. The days of cheap oil - and I remember filling up a 20 gallon tank of gas for what it now costs per gallon ($5), back around 1974 - are long, long, long over. Get used to it.
Oy.
Supply and demand: it's not just a good idea. It's how the world works.
Dienstag, April 26, 2011
Why does this not surprise me?
Or if someone in the company broke the law on their own initiative, the man running the company isn't blamed for breaking the law. He gets blamed for having bad judgement, perhaps, or for not having adequate and feasible checks and balances to prevent criminal behavior.
Unless, of course, you are the CEO of a drug company. Then you have to resign if your company wants to keep on doing business with the government.
Read this.
Key quote:
The Health and Human Services department startled drug makers last year when the agency said it would start invoking a little-used administrative policy under the Social Security Act against pharmaceutical executives. This policy allows officials to bar corporate leaders from health-industry companies doing business with the government, if a drug company is guilty of criminal misconduct. The agency said a chief executive or other leader can be banned even if he or she had no knowledge of a company's criminal actions. Retaining a banned executive can trigger a company's exclusion from government business.
Hmmm. Let's parse that one: someone in the company broke the law, the company accepts responsibility and is convicted of criminal actions. Even if the CEO knew nothing about this, they can be banned.
Just like that.
Why does this not surprise me?
Well, apparently this policy existed but, as the article said, wasn't used much. But apparently now the Obama Administration is now making, basically, the hiring decision of who gets to run drug companies.
Key further quote:
The new use of exclusion is meant to "alter the cost-benefit calculus of the corporate executives," said Lew Morris, chief counsel for the Department of Health and Human Services's inspector general, in congressional testimony last month.
In other words, HHS makes the assumption that corporate executives of drug companies base their operative decisions not on things like market needs and profitability, but rather based on what they can get away with.
Why does this not surprise me?
Again, this is not refusing to do business with someone convicted of doing something, but rather a refusal to do business with a company unless they fire their CEO because someone else at that company broke the law and was convicted for it, and the implementation is left up to the government to decide.
Why does this not surprise me?
Respect for the law and due process don't really seem to mean much to the Obama Administration these days (if ever).
Belated but not forgotten...
Read this.
There is a mythology on the anti-war left that the Bush Administration made up a connection to Al-Qaeda in order to sell the war to the American public. The only problem is that the Bush Administration never said that: there was an active connection: Vice President Cheney came closest when he said that the two had cooperated.
As always, the reality is a tad stranger than one imagines. Sure, there was no inked treaty of cooperation between the two. But neither did the Bush Administration make something up. The idea that politicians in the Arab world may do one thing in public and another in private may be difficult to accept, but it is reality; further, there is nothing contradictory in the fact that Al Qaeda was sponsoring anti-Saddam forces in areas that Saddam no longer really controlled (Kurdish folk didn't like either) while at the same time discussing operative cooperation with Saddam.
Welcome to the world of Arab politics. Nothing is as it appears, your worst enemy becomes your long-time best friend, and everyone is fully able to hold multiple, contradictory viewpoints all at the same time because that is how the world works there: it's tactical thinking from those whose only interest is survival and advancement.
The anti-war left was and is extraordinarily naive when it comes to such politics and how they, the anti-war left, were deliberately misled, manipulated and in some cases killed when it served the purposes of their erstwhile friends in governments, local NGOs (got news for you: any NGO in Arab countries cannot exist without being a pawn of the government, sometimes more obviously so than others, but no NGO can exist in these countries without being compromised).
The American public believed, back then, that there was a connection. The Bush Administration did not dissuade them of this notion, for it was, as far as anything can be true in that corner of the planet, the case. It never existed as the prima causae belli in anyone's mind except for the rabid anti-Bush left.
Donnerstag, April 14, 2011
An Informed Electorate...
These two links (Part I here and Part II here) are from a fairly unlikely source: an Australian journal called Quadrant, which bills itself as a "journal of ideas, literature, poetry and historical and political debate".
Normally you'd expect modern orthodoxy from such a source, but the links take you to a sensible argument that AGW is, bluntly, a crock and really bad science masquerading as scientific orthodoxy and mainstream thought.
What is disappointing is that you have to go to Australia to get this sort of writing. The US press, the mainstream media (MSM), is failing in one of its self-anointed tasks: of helping people make an informed choice when they vote. The dogmatic orthodoxy that you see in the MSM does exactly the opposite: those who vociferously complain about the ignorance and stupidity of the average American voter are the same people who created the problem.
An informed electorate is the last thing the Left want, as maintaining the Left's myths and fairy tales require a significant lack of intellectual curiosity - a closed mind - and adherence to an orthodoxy that has never had anything to do with the empirical world.
Which is probably exactly why you have to go to Australia to get this sort of writing.
Donnerstag, April 07, 2011
A Shrug: Return of the Railroad...
Starting in 2013, new energy laws come into effect in Germany, requiring companies within an industry to meet "best-of-class" energy targets or be required to buy emission permits to offset the fact that they do not meet best-of-class energy usage.
The problem?
It will drive key industries, those making energy-intensive products, into a corner where they can either close down, move production outside of the Euro-Zone, become uncompetitive or go out of business because profits won't finance the cash flow needed to invest.
The problem? Defining best-of-class energy usage for the industry as a whole.
Simply put, the EU is set to introduce benchmarks that certain key industries cannot meet. Not "can't afford to" or "is unwilling to" or "doesn't want to", but rather can't. The currently planned benchmark means that no open-furnace steel maker anywhere will be able to meet the benchmark as it is not technically possible to do so.
Either the companies can close their operations down and leave the business, or they can move production outside of the Euro-Zone and ignore the energy targets entirely, or they can pass the emissions permit costs on to their customers (driving their prices up and becoming, given the fact that competitors don't have to do this) and become uncompetitive (and hence leaving the business at some point via bankruptcy), or they can eat the costs, which will, however, be so high that they will no longer be able to finance investments out of their cash flow. The amount of money involved is not trivial (and comes out of profits): it will be hundreds of millions of Euro for Germany alone.
This isn't just the case for steel: it is also the case where electricity is one of the raw materials used in manufacturing, not merely used to light things and run computers. The largest PVC production plant, for instance, uses 800 GW-Hours in a year, about as much as fair-sized city: it is not technically possible to make it any other way.
We're not talking old, inefficient plants, either: these are the most modern around. The increases in prices due to the emission permits means an additional tax, as it is that, of around €15k per worker in 2013.
And possibly more.
The problem here is that politicians are making decisions that industry has to live with, but without understanding that at least some of the decisions are simply not technically possible. Not that they aren't feasible, or cost too much, or take too long to implement, but rather that there is simply no way to bend the laws of physics and chemistry to meet those goals.
So why the title?
Consider this: the industries involved (concrete, chemicals,, glass, metals and paper) are core primary industries. They feed into all other industries. Without their production, nothing else can be made.
What we have here is tragedy masquerading as policy. In the name of the greater good, functioning, efficient and profitable industries will be destroyed based upon the whim of politicians who should know better.
It is what happened in Ayn Rand's novel, Atlas Shrugged. If you have read that, you know how it ends. Substitute primary industries for the railroads, and you end up with the same story line.
If you haven't read it: worth the read. It's not the best economics, nor is much the story entirely plausible (railroads aren't that critical given the highway system and air transport), but it does contain a message worth understanding: beware the takers, beware those who are willing to destroy for the greater good.
Dienstag, März 29, 2011
A Day of Infamy...
It was a day of infamy. Not like Pearl Harbor, which was a surprise attack held during diplomatic talks, but a day of infamy in the original sense of the word, from the Latin infamia, the inversion of fame, the flipping of fame to infamy. It is a state of extreme dishonor, a black spot on US history.
But not for the reasons that the Left would have you believe.
The popular conception is that the Vietcong was fighting for independence against a corrupt government and that the North Vietnamese were helping their oppressed brothers (and sisters) fight against tyranny. The Tet offensive was a popular uprising that the US had to put down to save the regime. The US was involved because we were knee-jerk reactionaries, trying to prevent the spread of communism and willing to kill innocent civilians for the sake of geopolitics. My Lai and "We had to destroy the village in order to save it" proved that the war was horrible and we shouldn't be involved. It was nothing but a colonial war and the US was on the wrong side. We fought a war of genocide and were outfought by peasants.
As usual, the popular conception is wrong.
The Vietcong were financed and run by the North in order to destabilize the South, which, for all its failings, was a functioning government with popular support. The North was financed in turn by both China and Russia, with the latter dominating, who sent billions in weapons and supplies in the hope that the Vietnamese, if successful, would turn over Cam Rahn Bay, a lovely natural harbor, over to the Soviets for their geopolitical games with the US. The North Vietnamese were ruthless Leninists (and remain so today, largely) that were more than happy to massacre the Catholics in the North; they violated each and every agreement signed with the French that split Vietnam without regard to anything but their revolutionary ideals. They beat the French at Dien Bien Phu in a set-piece battle that reflected less on their abilities as much more the incompetence of the French military command which allowed the battle to happen at all. They fought to unify Vietnam under the banner of the Vietnamese Communist Party, hard-core Leninists who learned their trade at Moscow's knee at the start of the Cold War.
The US was involved because the South asked us for help at a time when Wilsonist idealists were running US foreign policy, more than happy to give a helping hand to anyone trying to emulate western political philosophies. The massive amounts of foreign aid corrupted the capital thoroughly and created a political system rife with corruption and incompetence. Tet was a deliberate suicide mission aimed at US public opinion, complete with wide-spread political assassination of Southern politicians by the North, resulting in the destruction of local guerrilla fighters (the Vietcong); thereafter, the war was fought by North Vietnamese regulars, using tactics that were illegal under the Geneva Laws of Warfare (disguising soldiers as civilians and use of cultural sites for military operations). The US was indeed involved to prevent a Communist takeover: there are good reasons to do so, and the fate of those fleeing Vietnam as Boat People should be an object lesson as to how far people will go to flee Communist rule.
Civilian lives were lost, but largely because of the way the North fought. They lost every single set-piece action they tried to fight, every single one. They lost tactically, they lost strategically, the only victory they achieved was political, sapping the will of the US to continue to fight. They fielded an army of peasants that was thoroughly trounced by drafted US soldiers and South Vietnamese soldiers. The story of the ARVN 18th Infantry Division defending Xuan Loc gives absolute lie to the claim that the South Vietnamese were incapable of fighting and worthless: that division outfought the North Vietnamese 4th Army Corps to a standstill until, outnumbered and running out of ammunition (that the US Congress denied them), they withdrew, with one unit staying behind to be completely wiped out to cover the withdrawal.
That is why this is a day of infamy. It is a day of infamy for the US congress, which made foreign policy by cutting aid, making it impossible for South Vietnam to defend itself. They prevented the US military from intervening via what we now call a no-fly zone, giving air support to the South at a time when it was being attacked by the North. The North Vietnamese had tried something similar before and was stopped by US air power
Put bluntly: the US failed in its commitment, failed in its duty, failed to stand by a country - South Vietnam - which by 1973 was fighting the war without US troops and holding its own, indeed winning back the countryside. It finally fell to a combined arms attack using more tanks and artillery than the Germans had when they started WW2.
The North broke every treaty it ever signed, broke every promise it ever made, and after the war was over, killed millions of Vietnamese through "re-education" camps and political oppression that led to desperate attempts to escape. They fought a war of lies and deceit, a typical Communist "war of liberation" that did anything but liberate the country. The Vietnam we see today is still run by that party, mellowed by age (and the dying-out of the Leninists) and itself thoroughly corrupted.
It is also a day of infamy because it led to an entire generation of Democratic politicians whose careers were made by opposing US actions, bordering on treason and sedition, typified by John Kerry, who used his service as a tool to gain and hold political office by making the US look as bad as possible in order to appeal to those who were disgusted by the war. This is nothing but brazen opportunism and is indeed infamous.
Lessons were learned. The US no longer has a drafted military, moving to a purely professional army instead because of many of the problems faced. Allies also knew that the US could only be relied on if led by the right politician, and indeed this gave solace to our enemies because they also knew that the US could not be relied on if led by corrupt and incompetent politicians. The US showed that it is vulnerable to the manipulation of public opinion and that there are more than enough willing and useful idiots more than happy to further their own careers by advancing viewpoints that damage US interests.
Now some reading this might roll their eyes and say "another revisionist..." but I dare anyone to state the case that the facts are different. You're entitled to your own opinions, but the facts speak another language. One of infamy.
Samstag, März 19, 2011
An Interesting Point...
Read it here.
First and foremost, President Obama should be going to Congress for authorization of the use of force under UN Resolution 1973. If he does not, it borders on abuse of presidential powers. President Bush I and II both went to Congress for such authorizations, which is the modern-day equivalent of the declaration of war that apparently has gone completely out of style.
If he fails to do this, he is setting precedence for future Presidents. No President has been happy with the War Powers Act that expressed the Congress' full intent of fulfilling its role under the Constitution of the United States, that it alone may declare war unless there is simply no time for it to meet.
Never has the press been so silent about this: this speaks volumes for the sycophants that appear to be in charge here. If the current President was a Republican, you'd be hearing about this in banner headlines.
Sometimes the absence of something is the proof that it exists.
President Obama has been quoted on this:
"The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation," the memo quotes then-Senator Obama saying on Dec. 20, 2007.
In other words, President Obama is on record for stating that he does not have the power to do what he is now doing.
Ye gods. The sooner the 2012 defeat of President Obama at the polls, the better.
Donnerstag, März 10, 2011
Worth watching...
The American people have been lied to since at least the Great Society programs of LBJ.
The mantras of "We can afford to..."; "The richest nation on the planet and we don't have..."; "We need to address the injustices of ..." are what is driving the deficits and the debt to unsustainable levels. Entitlements are the problem: pretending that they may not, can not and shall not be touched is a enduring political myth.
The reason that entitlement programs are called "The Third Rail" of American politics - touch and you die - is that when you look closely at them, the fabric unravels. Social security only works as a pay-as-you-go program when demographics and wage increases support permanent increases; Medicare and Medicaid only work when health care costs do not handily exceed the cost of living increases and only cover those who really cannot pay (as opposed to those who simply don't want to pay); the vast number of subsidies for successful interest groups and their lobbyists are like leeches, living off the life blood and ensuring their own success at the cost of their host.
If entitlements are not addressed now, when there is still a chance to do this with deliberation and with careful review, they will have to be addressed when the full fiscal crisis hits, after interest rates go up and the government has to pay significantly higher interest rates to roll over its debt.
The fiscal irresponsibilities are manifold and cross party lines. The sins of at least three generations of politicians - vote for me and there'll be pork in your district, money for nothing and your kicks for free (deliberate misquote, there) - are coming home to roost: pretending that they are not, that there is no 400lb gorilla in the room, simply pushes the final day of reckoning out to where that gorilla becomes a 25 tons gorilla that fills the room and leaves no other options than dealing with it.
The willful ignorance, the deliberate put-my-fingers-in-my-ears-and-say-la-la-la-la of the Democrat Party reflects the party's virtual total dependence on entitlements. Republicans are better in this aspect - middle-class subsidies such as tax breaks for mortgages have merged into the general landscape, rather than being something that the Republicans depend on to get their votes - but have their own home-made problems and sins of the past.
Unless the problem is dealt with - and as I have said before, only spending cuts will truly address the problem, as raising taxes to actually pay for everything would be onerous and ruinous - then the future of the country is at stake.
To take a slogan, so badly abused by the Democrats: "Do it for the children".
Party Over...
First of all, this.
The academics running the Obama foreign policy are doing active harm to the US: this will have repercussions. They can retire when Obama is defeated in 2012 and pretend that it wasn't them who screwed things up, but reality will tell another story and history can be so cruel.
To quote from the link:
The U.S. needs to issue a more public, unequivocal statement of support for authentic representative government. And find an active policy to go with it.
Only a U.S. president can lead this fight. But he has to (truly) believe in it. There is a school of thought, popular around the Obama foreign-policy team, that the world would be better off without the myth of American exceptionalism and burdens like these that come with it. If this government can't summon more than rhetoric or a U.N. resolution on behalf of 10 up-and-running democratic movements in the Middle East, that exceptionalism will wither. I'm guessing the world won't be better for it.
This is an moment where the only explanation - besides gross and widespread incompetence - is that such an epic failure is deliberately desired and planned. Such an abdication of US interests amounts to gross negligence and outright treachery, not merely to US interests, but to fundamental human rights and the case for democracy world-wide.
It is supremely ironic that it is the Democratic Party that is pursuing these goals. That party now appears actively moving to make its name as much a farce as "Democratic Republic" was for the Communist rulers of Eastern Germany. Orwell knew what he was writing about.
This also points to the end of the party. Fundamentally, the US government is broke: it is spending far more than it takes in (I originally wrote "earns", but that only makes sense of confiscation is the same as earning) and while it can leverage quite a bit of this spending by using the government's cash flow, at some point the numbers cease to add up and the party is over. This is as true of government as it is for private persons: the only difference is scale and time. Raising taxes, given the already heavy overall general tax burden, would be counterproductive: the only way out of the debt problem is for spending to be cut drastically.
Let me repeat that: the only way out of the debt problem is for spending to be cut drastically.
I've always referred to NPR since my Washington, DC days as "National Pinko Radio". The liberal bias was excruciatingly obvious, with liberal opinions masquerading as facts. The insular nature of their broadcasts, those whom they interviewed regarding issues (invariably heavily weighted towards whatever liberal/Democratic Party talking point story they brought), the issues chosen: All Things Considered is anything but inclusive, preferring to talk endlessly about health care and gay marriage.
In a time when the government is funding Poetry for Cowboys (and thank you, Harry Ried, for giving us all such a lovely pinata to bang away at!) whilst running up massive deficits and increasing national debt, it is time for someone to say that the party is over.
The party is over.
It is time for the government to stop trying to do good. It is time to stop the madness of financing Poetry for Cowboys, for financing the NPR, for financing luxuries in a time when it is hard to pay for the necessities. The party is over. The place needs to be cleaned up, the drunken guests who have shit in the pool need to be tossed out, the remnants of the orgy have to be disinfected and we need to get the stains out of the couch, carpet and drapes. It's time to stop wondering how someone smashed a banana on the ceiling and get out the ladder to clean it off. It's time to get rid of the slackers lying on the couch watching mindless TV - sorry, I repeat myself there - and get them to work cleaning up the mess they made. The house is trashed, the vases broken, no one knows what killed the goldfish (but the water is yellow) and someone thought it was really funny to make the cat drink a bottle of beer. Now morning has arrived and it is time to save what is left of the house.
It is going to hurt to cut the budget drastically: however, it is hurting right now to ask your average Mr. and Ms. America to pay for Democratic excesses and sheer incompetence when it comes to money. It is time to get our house back in order, to clean out the pigsty, repaint the walls after fixing the cracks and dents, get the washing machine and dryer running full time so that we can get back to normal. There's been a lot of damage done and we have to pay the bills, but this is not the time to head out golfing in the hope that someone else does the job.
Ye gods. It is time that the adults are back in charge.
Donnerstag, März 03, 2011
How To Destroy An Economy...
The single functioning mechanism that tells you everything you want to know about supply and demand is the price mechanism: left to its own devices (aka "The Invisible Hand", prices quickly develop that reflect true scarcity.
If you know the real price for a thing, you can also make the decision to transform that thing into something more valuable. Buy machines and you can turn inexpensive steel into gears and mechanical parts; if steel becomes more expensive, it makes sense to invest in order to use a scarce resource better.
This is fundamental, basic beginning Economics.
The German government, in all its wisdom - and given that it is a conservative government, there is actually some present, rather than what happens under socialist/green administrations - has come up with a real winner.
A tax on raw materials to force German companies to process raw materials better. See the Handelsblatt from today, first page.
Hmmm, you might say: what's so bad about that? Higher efficiencies are always a good thing, ceteris paribus, and if done right will add significantly to the bottom line.
The problem is that it will be the German government (or, more exactly, bureaucrats from the Environmental Agency) that decides which materials will be taxed and how much, rather than the market. That way lies madness.
Why?
Because German companies will be the ones investing their money, not the government. When the government gets it wrong - and it will, that is a fact of life - then German company investments will have been spent on the wrong thing, not because the company made the wrong decision, but because someone decided that it would be so.
That way lies madness. Seriously.
Prices are the only way to determine scarcity. If steel is heavily taxed, then other materials will be used; if all materials are heavily taxed, then companies will have to make decisions which materials to use based not on prices, but solely on technical grounds: that would, if anything, undermine the whole point of taxing materials at all.
It's not like German manufacturers are somehow incapable of producing goods with minimal usage of raw materials and the government has to give them a helping hand, as it were. If anything, they are better at it than most, if not almost all countries (I think that Japan is probably at the top there).
The argument of the Environmental Agency is that by forcing manufacturers to gain greater efficiencies now, their productive capacities will be that much more green and hence - hence! - more profitable.
What they are not taking into account is the destructive effect of misallocated capital, that investing large sums for marginal improvements only makes sense when indeed market prices force this.
Simply deciding what the price for something will be - and taxes do this - removes the rule of supply and demand from the production figure, leaving everyone to flounder.
Given that no less than 20% of German GDP is manufacturing (relatively high: US shows 13%, France and the UK 12%!) is generated directly in manufacturing, raising taxes here is extremely counterproductive at best and downright stupid at worst.
Oh, and inflation: the European Central Bank will blow steam from its ears if this affects overall prices. You can't imagine, even for a second, that German companies will not pass on these taxes in the forum of price increases: or is the German Environmental Agency then going to determine as well selling prices too?
Destroying the almost literal magic of supply and demand in determining prices in the name of a chimerical whimsy that the government can better tell what resources need to be better utilized is one of the surer ways of destroying an industrialized economy.
I cannot imagine that this will actually pass into industrial policy under the current administration in Germany: Chancellor Merkel may have questionable taste in Defense Ministers, but she is not lacking in common sense otherwise.
Words to ponder...
Leon Wieseltier writing at the New Republic on March 2:
As the dictators fall, the clichés fall, too. Cairo and Tunis and Tripoli are littered with the shards of platitudes about what is possible and what is impossible in Arab societies, in closed societies. Civilizational analysis lies in ruins. Idealism, always cheaply mocked, turns out to be a powerful form of historical causation, as disruptive of the established order as any economic or technological change, and even more beneficent. Stability, the false god of hard hearts, has been revealed to be temporary, chimerical, provisional, hollow, where the social arrangements are not decent or fair: the stability of injustice, though it may last a long time, is essentially unstable. It is delicious to see realists convicted of illusions, to hear them utter the words on which they used to choke. (If there is one thing that realists know how to do, it is pivot.)
The Arab uprisings have been heuristically useful: they have exposed a lack of intellectual preparation, a lack of historical imagination, a lack of moral aspiration, here at home. I count the president among the Americans who are sunk in stereotypes and dogmas, even if the good people at the White House want you to know that he is somehow a hero of this springtime. By now—after Tehran, Tunis, Cairo, and Tripoli—a presidential pattern has been established. Obama's reluctance to lead, and to establish the United States ringingly and incontrovertibly as the ally of the freedom movements, is owed to many things, but most of all, I think, it is the result of certain conventional assumptions about the historical agency of the United States in the developing world. In almost his every pronouncement about the valiant accomplishments of the liberalizing crowds in "the Arab street" (now an honorific!), Obama keeps insisting that we had nothing to do with this, that they did all this on their own, that Arab democracy must not be the work of the United States or any foreign power. He dreads the imputation of our influence. All his assurances of a new world notwithstanding, he is haunted by the ghost of imperialism.
Hat tip to the WSJ for that one.
The core belief system of the modern left - transnationalism, relativistic ethics, refusal to judge other countries yet permanently judge their own - is a intellectual fraud, a facade to hide the emptiness and meaninglessness of the academic. I studied in both the US and Germany and while there are those in academia who deserve accolades, respect and recognition, these are few and far between, More often you see those whose main claim to existence is the manipulation of the system, whose academic career, outside of endless faculty meetings where endless pontification replaces actual thought, is trivial at best and, in the greater scheme of things, irrelevant and a waste of human potential.
People with no actual knowledge of how the world actually works pontificate about imagined injustices and construct massive edifices with foundations of sand, based on fundamental mistakes and speculation replacing real knowledge.
Real scholarship is hard and has been replaced with sophistry.
Academia has failed us miserably, yet demands tens of thousands for the smallest of qualifications. What we have here is not a failure of the imagination, not an honest mistake or pardonable lapse. Rather, it is the willful denial, the conscious rejection of reality. Opinion is held to be more sacred than truth and facts.
The US today is without leadership. Political nature abhors such a vacuum.
The Oscars and Greenlining...
First and most fundamental, the subprime crisis was caused by politicians wanting to break market laws. If you don't have money, you can't afford a house: requiring banks to make risky loans was to be subsidized by charging everyone else more to cover the costs.
Didn't work, was destined to fail and the perpetrators are oblivious to the damage.
Read the article at the link to understand that the problem is still there, still alive, still festering and that unless economic ignorance is thoroughly and ruthlessly made public, we will be condemned to listen to the Gods Of The Copybook Headings time and time again.
The real culprit is the idea that you can make laws that abrogate economic reality: the only way it works is fraud.
Read the link: suffice to say that we have met the problem, and it is the Left.
Dienstag, März 01, 2011
The timing couldn't have been worse...or better...
The UN Human Rights Council is about to come out, it appears, with a report on human rights in Libya (see here).
The Universal Periodic Review System of the UN is designed to treat each and every country the same way, objectively and via its peer group of member countries.
Right.
Of course, the irony here is that the UN Human Rights Council, created to replace the thoroughly discredited Human Rights Commission - which had been captured, as it were, by the worst offenders of human rights in order to white-wash what they were doing, has itself now been captured by the same offenders.
You see, the report praises Libyan human rights.
Yep, you read that one right.
Who praised Libya so strongly?
Those paragons of virtue: Iran, Sudan and Cuba.
Like I said, the timing couldn't have been worse for UN credibility. It couldn't have been better either: perhaps now people will understand that the UN is thoroughly corrupted and compromised, incapable of any sort of rational work.
The only rational for further UN funding is that there isn't any real alternative. But that is increasingly a straw-man argument: following that logic, the League of Nations should still be calling the shots.
The UN has fallen to the level of parody, failing to maintain integrity in any way, shape or form. The Secretary-General is too afraid of criticizing those states who richly deserve it, and more than happy to criticize those that are largely flawless in their international standing and relationships for not being subservient enough to the whims of the UN's General Assembly. Moral authority and integrity are sacrificed on the altar of political correctness and the vain, academic and ultimately foolish attempt at engaging thugs and robbers in "constructive dialogue" while at the same time giving them a playground where they can play the bully.
The UN is a failure, just as the League of Nations was a failure. Only fools and simpletons can expect it to play a realistic function in the years to come: it is a complete fraud, a waste of money, time and effort.
Remind me, someone, why we still pay most of the bills?
Sonntag, Februar 27, 2011
It just keeps on getting better...
What a blow to his sainted status amongst the Democrats.
Woops, my bad. They don't care.
Rented a brothel for the entire night.
Key quote:
"The FBI's reluctance to follow the law and release this material shows that it, too, is not above politics. Our tough fight with the Obama administration shows that it was not keen on letting the American people know that Ted Kennedy, one of Obama's leftist politician heroes, liked to hang out with communists and prostitutes,"
The object lesson of Nixon was that the cover-up just never ends, and in the end, is what gets everyone caught.
The FBI covered for Teddy Kennedy and covered his apparent misdeeds. That was a disservice to the country.
Ah, the sweet delicious irony of it all...
The left is now calling for Gadaffi to be prosecuted and brought to justice.
Using the same arguments that justified the toppling of Saddam Hussein.
First, this:
Terrorism - at least where it is a policy of an organization and not a one-off incident - must surely be a crime against humanity since it is directed, like Gaddafi's present actions, against a civilian population.
Next, this:
...there is now a duty of intervention on the international community, existing under international law, 'whenever it becomes necessary to stop or to punish crimes against humanity'. He sees this as resting on the doctrine of a 'responsibility to protect'.
The illogical anger of the opposition to the Iraq war was and is irrational and absurd. Some of these people wouldn't know right from wrong if they were smacked upside the head with it, which is exactly what is happening.
How ironic. Don't you think?
Donnerstag, Februar 24, 2011
Truly Amazing...and Appalling
But if you read the review, there is one thing substantially and damningly missing: the sheer inhumanity of Marxism, the necessity of terror and the decades of human suffering imposed by delusional control freaks in the name of a "philosophy" that, in order to work, must deny fundamental human interests and humanity itself, all in the name of a Greater Good.
Appalling. Truly appalling. If this is the face of the modern left, all one can say is that for those who truly believe in the inevitability of history, their historical ignorance is truly appalling.
Here is the tenor:
In 1976, a good many people in the West thought that Marxism had a reasonable case to argue. By 1986, most of them no longer felt that way. What had happened in the meanwhile? Were these people now buried under a pile of toddlers? Had Marxism been unmasked as bogus by some world-shaking new research? Had someone stumbled on a lost manuscript by Marx confessing that it was all a joke?
The only ones who believed that Marxism had a reasonable case to argue in 1976 were those whose knowledge of what went on behind the Iron Curtain was nil. The reason that a decade later no one in their right mind could believe in Marxism is that it is, was, and will remain a fundamentally flawed doctrine.
Marx failed because he reduced work to a commodity: his future utopia could only work if work no longer mattered, that the mechanics of supply and demand were removed entirely and replaced by commands for workers to do as they were told, effectively by their betters.
Further:
If one thinker left a major indelible mark on the 20th century,' Hobsbawm remarks, 'it was he.' Seventy years after Marx's death, for better or for worse, one third of humanity lived under political regimes inspired by his thought. Well over 20 per cent still do. Socialism has been described as the greatest reform movement in human history. Few intellectuals have changed the world in such practical ways. That is usually the preserve of statesmen, scientists and generals, not of philosophers and political theorists. Freud may have changed lives, but hardly governments. 'The only individually identifiable thinkers who have achieved comparable status,' Hobsbawm writes, 'are the founders of the great religions in the past, and with the possible exception of Muhammad none has triumphed on a comparable scale with such rapidity.'
I suppose that you can consider socialism to be one of the greatest reform movements in human history if you see mass murder, genocide, deliberately caused ecological disasters and ruthless surpression of fundamental human rights as being "reform". To consider this a "practical" change underscores the utter moral bankruptcy of those who consider themselves Marxists or, more pointedly, even Leftist.
I find the fact that there are those who consider themselves to be true Marxists to be both amazing and appalling. Amazing because it most certainly must count as a truly bizarre way to look at the world; appalling because of the necessary complete and total denial of the lessons that history has taught us about Marx and his "philosophy" that has led to such massive suffering and death. No religion, despite what has been written there, has ever caused so many deaths as Marxism has.
Mittwoch, Februar 23, 2011
Menetekel and Reality Intruding...
However, this reminded me of what is going on in the background.
Simply put, the core principle driving ObamaCare - and how the Democrats are hating having it called that now - is the reorganization of the entire medical profession: the destruction, as it were, of the American Doctor.
Even if it were to be repealed tomorrow - and de-funding is a good first step - it has already started a negative trend, one that is deliberate and, even worse, aimed at doctors based on a faulty understanding of why medical costs are so high.
In the liberal mind set, costs are so high because medical doctors charge so much, earning enormous amounts of money based on their monopoly position as primary health care givers. The vast majority are private and you can't effectively put limits on what they can earn.
So what you do is force the doctors out of their private practices and into collectives of one form or another:
Six years ago, doctors owned more than two-thirds of U.S. medical practices, according to the Medical Group Management Association. By next year, nearly two-thirds will be salaried employees of larger institutions.
This is astonishing: there are fewer and fewer traditional medical doctors out there with their private practices. For the Democrats: goal achieved.
Why is this important?
Because once medical doctors lose their autarky, their independence, they became just one more salaried profession.
Under the faulty Democrat (sorry, I repeat myself) understanding of why medical costs are so high, they have forced medical doctors out of independence into collectivized institutions of one kind or another, which will then be controlled by ObamaCare.
Why is this a faulty understanding?
For two reasons, the second one the more important one.
First, medical doctors in private practice may appear to be earning quite a bit of money, but in reality they are also employers and have to carry their own malpractice insurance as part of being in business. Once that is deducted - plus rent for their offices and bills for their equipment, as well as salaries - things look slightly different for medical doctors' actual real take-home after costs and taxes. They continue to earn well, but it's nothing near what they took in overall.
The real reason why this line of thought is faulty is that the real problem is medical liability and malpractice insurance costs: these are what is driving up health care costs, not merely via the cost of the insurance, but also pushing medical doctors to run tests just in case someone takes them to court.
That is the real problem: this kind of insurance plus the cost of doing due diligence testing (because the cost of not doing the testing is, if you are sued (or even threatened with a lawsuit), is catastrophic and can financially destroy any medical doctor out there.
Now, collectivization of medical doctors may bring some efficiencies, but unless the real cause of increasing medical care costs is addressed, any health care reform is not worth the paper it is written on.
To repeat: ObamaCare is damaging, not merely because it is based on faulty thinking, but because it is already doing damage to the US health care system.
Who benefits?
First and foremost, the insurers who, if they play the game right, can charge more for the insurance they supply. There is no other explanation for the strong support for ObamaCare amongst the insurance companies.
Second, the trial lawyers. Without tort reform, but with collectivization of medical doctors, the pockets of the collective entities of medical doctors becomes automatically deeper and hence more lucrative to sue. What is the worth of bringing a $200mn wrongful injury/malpractice suit against a single doctor, who can never pay that, when they can collectively take 300 doctors to court?
Further, if ObamaCare reaches its logical conclusion, when there are no private medical doctors around any more. The entity of last resort in an injury/malpractice lawsuit is the owner of the company: if ObamaCare sets up the situation, then the payer of last resort will be the US taxpayer, who will then end up feeding the lawyers and accountants (and professional witnesses) through the practically unending deep pockets.
In other words, it is the usual Democrat politics, Liberal thoughts and intentions galore. Misplaced, as usual, and downright destructive if left alone.
Read the writing on the wall: מנא ,מנא, תקל, ופרסין
Daniel 5:25–28: And this is the writing that was inscribed: mina, mina, shekel, half-mina. This is the interpretation of the matter: mina, God has numbered the days of your kingdom and brought it to an end; shekel, you have been weighed on the scales and found wanting; half-mina, your kingdom is divided and given to the Medes and Persians.
The Democrats have numbered the days of the United States and plan to bring it to an end; you will be weighed on the scales and found wanting; your goods will be divided and given away.
That is the writing on the wall: this way lies madness, lies an utterly unsustainable doctrine that must end in thievery and disenfranchisement, all to be sacrificed on the alter of "social justice" and "fairness".
As I've said, reality intrudes on my side of the computer screen and I have been remiss. Suffice to say that things will ease up slightly and you can expect more. Very little of it will be nice and complimentary of recent events.
Mittwoch, Februar 02, 2011
On Egypt...
According to the mainstream observations of what is happening in Egypt, the people have taken a cue from Tunisia and are calling for democracy and an end to dictatorship.The dictator, Mubarak, is holding on to power by refusing to step down, and the Army is keeping neutral and letting politics work itself out.
The reality, I fear, is a tad more complex than that. Read this to understand why.
First and foremost: the Egyptian state has survived as long as it has because it provides bread and circus, with heavy emphasis on the former. The government controls bread and how it is distributed, for instance, rather than allowing private bakers to do that job. The reason for this is that bread prices are heavily subsidized and, as a result, supply and demand are seriously distorted.
The Egyptian government has been introducing liberalizations and reducing subsidies, but slowly. The designated heir-successor was following a neo-liberal approach to transforming Egyptian finances into some more sustainable, one where more private business activities were going to be possible and, at the end of the day, with greater efficiencies, prices would have remained at least stable, if not lower.
So far, so good: the problem really arises when you fail to communicate this and people suddenly no longer see the government supplying services that they have relied on for decades, for their entire lives. If you are used to getting up in the morning and pop down to the bread distribution point to pick up bread for the day, it is disconcerting and frightening to see that place no longer under control by the government. Never mind that the bakeries continue to sell bread: it looks like the government is no longer taking care of the people, ensuring availability at low price.
And that is the basis for the existence of the Egyptian government's longevity: it was seen as being the only institution that wasn't completely corrupted and wastrel, which is why it was charged with ensuring the availability of something as basic as bread.
Oh? Did I say government? The bread distribution in Egypt is in the hands of the military.
Now you can understand that this is a reactionary revolution: people are having their old, trusted system of guaranteed infrastructure dismantled and are reacting against that. The military is on their side: they do not want to lose the rights and privileges that come from fulfilling this fundamental role, resulting in a rejection of the changes in the status quo.
Hence things are not quite what they seem. What we have is the Egyptian people taking to the streets to protect their privileges and fighting reforms; the army is backing them, as they have the greatest to lose if things change.
This is not to say that the Egyptian government and military isn't corrupt and venally incompetent: they are. Many out on the streets have serious, long-term and legitimate complaints about the Mubarak government. But there is a lot more to the story than originally meets the eye.
This is less a revolution to end a dictatorship and bring in democracy as much more a reactionary revolt supported by those who have a vested interest in things remaining, largely, the same. Rather than modernize the Egyptian economy and reduce the role of the government, we will see lack of reforms and further stagnation.
This revolt is not solving the problems facing Egypt: while it probably isn't making them worse, it most certainly doesn't contain the fundamentals needed to move beyond re-arranging deck chairs on the Titanic.
