Selected in the top 100 Economics Sites

Follow me on Twitter

Sunday, December 21, 2014

They chanted for "Dead Cops" and now they got them.


Now the hard part. How do you live with yourselves?




Friday, December 5, 2014

CATO Institute

Made a trip yesterday with four students to the CATO Institute for a conference on "The Future of US Economic Growth". Some people said it doesn't look good. Others said people have said that for years, and the future looks bright. All agreed we don't have a clue on being able to reliably forecast it.

One high value statistic was the fact that in 1960 1 in 20 prime aged males between 25-54 were out of the labor force. Today it is 17% and rapidly approaching 1 in 5. If they are not in the labor force, then what are they doing?

Wednesday, November 26, 2014

Schmuck!

Charles Schumer is a schmuck. The fact that people like him and Harry Reid and Nancy Pelosi have leadership roles in this country makes me want to vomit. Thanks so much you cynical pathetic partisan hack yenta.

Hey! That's me!


Thursday, November 20, 2014

R.I.P. union Democrats

The party of Roosevelt and Truman is now the party of public worker unions and the whacko environmental left. 40,000 jobs sitting there for pipe fitters and steel workers and the Democrats in the Senate hold fast to Tom Steyer.

Hey there rough neck....ready to listen to the Republicans?

Tuesday, November 11, 2014

Regulator-in-Chief

So now the president wants the federal government to regulate the internet. Wonderful. He is going to treat it just like an electric company or the telephone company based on the Federal Communications Act of 1934. Now there is some fresh thinking for you. As the Wall Street Journal points out, this law was written based solely on the Interstate Commerce Act of 1887 where the word "railroads" was stricken and replaced with "telephone companies". Now the FCC will decide what prices can be charged and what is "fair".

The death of a thousand stings magnifies.






Tuesday, November 4, 2014

Live and not learn. The next trillion dollar bailout....




 The principles of economics explain the world...or at least most of it.


Underwriting the Next Housing Crisis
By PETER J. WALLISON
OCT. 31, 2014
WASHINGTON — SEVEN years after the housing bubble burst, federal regulators backed away this month from the tougher mortgage-underwriting standards that the Dodd-Frank Act of 2010 had directed them to develop. New standards were supposed to raise the quality of the “prime” mortgages that get packaged and sold to investors; instead, they will have the opposite effect.
Responding to the law, federal regulators proposed tough new standards in 2011, but after bipartisan outcries from Congress and fierce lobbying by interested parties, including community activists, the Obama administration and the real estate and banking industries — all eager to increase home sales — the standards have been watered down. The regulators had wanted a down payment of 20 percent, a good credit record and a maximum debt-to-income ratio of 36 percent. But under pressure, they dropped the down payment and good-credit requirements and agreed to a debt-to-income limit as high as 43 percent.
The regulators believe that lower underwriting standards promote homeownership and make mortgages and homes more affordable. The facts, however, show that the opposite is true.
In the late ’80s and early ’90s, down payments were 10 to 20 percent. The homeownership rate was 64 percent — about where it is now — and nearly 90 percent of housing markets were considered affordable (that is, home prices were no more than three times family income). By 2011 only 50 percent were considered affordable, and by 2014, just 36 percent — even though down payments as low as 5 percent are now common.
How could this be? Consider this: If the required down payment for a mortgage is 10 percent, a potential home buyer with $10,000 can purchase a $100,000 home. But if the down payment is dropped to 5 percent, the same buyer can purchase a $200,000 home. The buyer is taking more risk by borrowing more, but can afford to bid more.
In other words, low underwriting standards — especially low down payments — drive housing prices up, making them less affordable for low- and moderate-income buyers, while also inducing would-be homeowners to take more risk.
That’s why homes were more affordable before the 1990s than they are today. Back then, when traditional standards for “prime” mortgages prevailed, homes were smaller; they had fewer bathrooms, and the kitchens were not appointed by Martha Stewart. A family could buy and live in a “starter home” for several years before selling it and using the accumulated equity to buy a bigger or better appointed home.
In a competitive housing market not subsidized by lax standards, home builders would similarly adjust by reducing the size and amenities of new homes to meet the financial resources of home buyers entering the market. Home prices would stabilize and not rise faster than incomes. Low- and moderate-income families and millennials might have to wait to save for a first home, but they would be able to afford it.
(Higher down payments are not the only way to limit excessive borrowing. The “standard” 30-year mortgage is a subsidized, archaic result of our government’s distorted housing policies; very few home buyers stay in a home for 30 years. A 15-year fixed-rate mortgage means higher monthly payments, but the homeowner starts to accumulate equity sooner, reducing the lender’s risk.)
If the government got out of the way, would sound underwriting standards come back? History suggests yes. Although Fannie Mae and Freddie Mac were government-backed, they were shareholder-owned, profit-making firms. They adopted strong underwriting standards to avoid the credit risk of subprime and other high-risk mortgages. But after Congress enacted affordable-housing goals, administered by the Department of Housing and Urban Development, in 1992, underwriting standards declined.
Republicans generally favor eliminating the government’s role in housing finance, while Democrats worry that without government support, mortgages would be too expensive for low- and moderate-income families. Although it runs counter to the current Washington view, good underwriting standards can satisfy the objectives of both parties.
It’s clear that today’s policies create winners and losers. The winners include real estate agents and home builders, who want to increase borrowing and sell ever-larger and more expensive homes. The losers, as we saw in the financial crisis, are borrowers of modest means who are lured into financing arrangements they can’t afford. When the result is foreclosure and eviction, one of the central goals of homeownership — building equity — is undone.
After the financial crisis, Representative Barney Frank — the Massachusetts Democrat who led the House Financial Services Committee during the crisis, and a champion of credit programs for low-income buyers — admitted, “It was a great mistake to push lower-income people into housing they couldn’t afford and couldn’t really handle once they had it.” Policy makers who support homeownership would be wise to consider who is hurt and who is helped when we abandon traditional underwriting standards.

Peter J. Wallison, a senior fellow at the American Enterprise Institute, is the author of the forthcoming book “Hidden in Plain Sight: What Really Caused the World’s Worst Financial Crisis and Why It Could Happen Again.”

Saturday, October 11, 2014

The first gay marriage in North Carolina was to...

Two dudes who are deputy sheriffs! Our deliverance is now upon us. Instead of the cops beating the hell out of you in the future, perhaps you have pressed flowers and interior decorating help on the horizon!

Things just keep getting better!

Gay marriage? If you are against it what is the problem?

Look here, if you are against gay marriage then the objective should be to stop gay people from having sex. Now, if you think about it for one moment, is there any better way to get people to stop having sex than to let them get married?

Moreover, for all of us with children with an alternative lifestyle, one good result of this process is that when my step daughter soon marries her life partner of 14 years, since there are two girls involved, I only have half the bill. Guess I need to brush up on my moves for the Hokie Pokie.

Thursday, September 11, 2014

Trotsky said it all....



"You may not have an interest in war. But war may have an interest in you."

Perhaps the president has finally figured this out.

Wednesday, August 27, 2014

Morons at the gates....


I am delighted to call North Carolina my home. It is quite lovely here. However, like anywhere else I suppose, it does have its price.

Tuesday, June 24, 2014

The smartest woman in the world (with apologies to those of you who thought it was you). A glimpse into life with Hillary as President.









***TRIGGER WARNING****
The following may be offensive to those of you with any common sense.


http://online.wsj.com/news/article_email/dorothy-rabinowitz-a-glimpse-of-hillary-as-president-1403563803-lMyQjAxMTA0MDIwNDEyNDQyWj

R.I.P Fouad Ajami

It is with great sadness that Fouad Ajami has passed on at age 68 of prostate cancer. He was a brilliant mind and a student of the venerable Bernard Lewis. He saw the whole Mideast saga for the cruelty and waste that it is. And like Ayaan Hirsi Ali had the guts to say it.

ISIS and their buddies want to take the world back to the seventh century...and I am not going.

The world is not as nice a place with the passing of this incredible scholar. Ignore his writings as you dare.

Wednesday, May 7, 2014

Schmuck!


One does not have to go very far in digging around to have Tea Party sympathies. If you look at the movement now afoot to re-write the first amendment, pushed by Senators Schumer and Udall, you don't need to wonder who the extremists are. What a great idea. Let Congress regulate political speech. God save us.


We need a new national sense of shame and we should start with the Schmuck from New York.

Friday, April 11, 2014

Demagogue in Chief.


Slamming the illusory 77% statistics is nothing more than demagoguery, but it may in fact  work. Progressives love to hear this stuff and it matters not how things are measured and controlled. Just look at all the business about income distribution and how that is so sloppily measured. Elections can be won on demagoguery and the Administration is going to keep beating that false drum.

What bothers me the most is that employers are given the burden of proof to show that they did not discriminate. Guilty until proven innocent. Just another of the many ways this is not my America any more.




http://online.wsj.com/news/articles/SB10001424052702303532704579483752909957472?mod=trending_now_3

Thursday, April 10, 2014

Notable and Quotable...Holman Jenkins in yesterday's WSJ.

 "By the same token, defenders of the traditional family are crazy to think gay marriage is the threat. The threat is the growing inability of low-skilled workers to outbid state benefit programs to be the family breadwinner."

Friday, March 7, 2014

Wonder why we stay caught in the frozen years?

I just read from my theoretical macroeconomic notes in preparation for class..."Thus, an increase in the present value of real government purchases has a negative effect on households' wealth." Could this not be one major drag on the economy as Obama adds new layer after new layer of permanent increases in government spending? How could it be otherwise?

Tuesday, February 18, 2014

This really happened. When you got the drop on somebody, well, the following script can play out.



AN ACTUAL CRAIG'S LIST PERSONALS AD
To the Guy Who Tried to Mug Me in Downtown Savannah night before last.
Date: 2011-11-27, 1:43 am. E.S.T.
I was the guy wearing the black Burberry jacket that you demanded that I hand over, shortly after you pulled
the knife on me and my girlfriend, threatening our lives. You also asked for my girlfriend's purse and earrings. I can only hope that you somehow come across this rather important message.
First, I'd like to apologize for your embarrassment; I didn't expect you to actually crap in your pants when
I drew my pistol after you took my jacket.. The evening was not that cold, and I was wearing the jacket for a reason.. my girlfriend was happy that I just returned safely from my 2nd tour as a Combat Marinein Afghanistan .. She had just bought me that Kimber
Custom Model 1911 .45 ACP pistol for my birthday, and we had picked up a shoulder holster for it that very evening. Obviously you agree that it is a very intimidating weapon when pointed at your head ... isn't it?!
I know it probably wasn't fun walking back to wherever you'd come from with crap in your pants. I'm sure it
was even worse walking bare-footed since I made you leave your shoes, cell phone, and wallet with me. (That prevented you from calling or running to your buddies to come help mug us again).
After I called your mother or "Momma" as you had her listed in your cell, I explained the entire episode of
what you'd done. Then I went and filled up my gas tank as well as those of four other people in the gas station, -- on your credit card. The guy with the big motor home took 153 gallons and was extremely grateful!
I gave your shoes to a homeless guy outside Vinnie Van Go Go's, along with all the cash in your wallet. [That
made his day!]
I then threw your wallet into the big pink "pimp mobile" that was parked at the curb ..... after I broke the
windshield and side window and keyed the entire driver's side of the car.
Earlier, I managed to get in two threatening phone calls to the DA's office and one to the FBI, while mentioning
President Obama as my possible target.
The FBI guy seemed really intense and we had a nice long chat (I guess while he traced your number etc.).
 In a way, perhaps I should apologize for not killing you ... but I feel this type of retribution
is a far more appropriate punishment for your threatened crime. I wish you well as you try to sort through some of these rather immediate pressing issues, and can only hope that you have the opportunity to reflect upon, and perhaps reconsider, the career path
you've chosen to pursue in life.. Remember, next time you might not be so lucky. Have a good day!
Thoughtfully yours, Semper fi,
Alex

Thursday, February 13, 2014

This is taken from a paper by Brad DeLong. And what is the number one issue of our time? Income distribution. Enjoy the beach because you ain't gonna be working in the future.

The urgency of a growth agenda is strengthened by the recognition that the United States' social insurance system was designed for the pre-1973 rapid rather than the post-1973 slow pace of growth.Without faster long-term economic growth America's social insurance system as we know it is unlikely to survive the next generation. Thus there is a sense in which the stakes at risk in the task of finding policies to spur American economic growth are larger for the left than for the right half of the political spectrum. All have an interest in faster economic growth: faster growth empowers the American people to better achieve their ends whether their ends are sitting on beaches sunning themselves, raising their children, protecting endangered species, or increasing their level of education.

But in the absence of faster economic growth than has been seen in the past two decades, the future of the social insurance state is easy to read: Medicare and Social Security devour the rest of the Great Society and the New Deal over the course of the next generation. Two generations hence Medicare and Social Security run up against their own budget constraints, and destroy themselves.

Thursday, February 6, 2014

Here is why the debt-to-GDP argument is so tough to maintain.


It worked after WWII. But that was a different world all together.And the green part today is ready for a break out.

Who is the forgotten man in the US today? The working man that's who!



If person A and person B get together to help out person C and take the resources of person D to do it then person D is "the forgotten man." And now that the government is making leisure more lucrative with every new policy and statement they make (see yesterday's take of the NY Times to the employment effects of Obama Care), soon the only suckers left will be the working stiff who keeps paying the tax bill.

What is not discussed enough for me is the enormous implied future taxes that are positively the consequence of debt accumulation and permanent increases in government spending. Who is going to pay them? You and especially your children with higher marginal tax rates and other confiscatory policies to take your resources from you to fund the common good.

However, you baby boomers don't despair. Your children will have much more leisure than you did in your working life. So they will be able to be with you, and to spend all that time you feel guilty about not being with them when you worked. They will be with you in your retirement. And you'll have your son's girlfriend and child along for the company too since they neither can find a career nor have any desire for matrimony, nor feel as if working is "worth it."

You may want to ask you financial adviser if you can put an additional on the old ranch so junior has a place to stay. 

Tuesday, January 28, 2014

Duck Hunting can be deadly.

This was apparently at Pamlico Point during one of our Global Warming events.

Monday, January 27, 2014

This is so very correct.

Economist Donald Boudreaux in the Pittsburgh Tribune-Review, Dec. 25:
Suppose that Jones chooses a career as a poet. Jones treasures the time he spends walking in the woods and strolling city streets in leisurely reflection; his reflections lead him to write poetry critical of capitalist materialism. Working as a poet, Jones earns $20,000 annually.
Smith chooses a career as an emergency-room physician. She works an average of 60 hours weekly and seldom takes a vacation. Her annual salary is $400,000. Is this "distribution" of income unfair? Is Smith responsible for Jones' relatively low salary? Does Smith owe Jones money? If so, how much? And what is the formula you use to determine Smith's debt to Jones?

While Dr. Smith earns more money than does poet Jones, poet Jones earns more leisure than does Dr. Smith. Do you believe leisure has value to those who possess it? If so, are you disturbed by the inequality of leisure that separates leisure-rich Jones from leisure-poor Smith? Do you advocate policies to "redistribute" leisure from Jones to Smith—say, by forcing Jones to wash Smith's dinner dishes or to chauffeur Smith to and from work? If not, why not?

Monday, January 20, 2014

Financial Crises and Innovation...not here. Why not?

http://www.project-syndicate.org/commentary/robert-j--shiller-asks-why-innovative-ideas-to-prevent-another-financial-crisis-have-gained-no-political-or-media-traction?alcmpid=view




This is a very good read. Housing Partnerships makes great sense and yet no one is listening. With the complete cronyism that is now dominating this country it is not hard to understand why...but it is pathetic.

Thursday, January 16, 2014

From back in 2005...true then and true today...and true in 1964.


We have spent $20.7 trillion on poverty and income redistribution since then.
How's that working out for us?

Hallmark of the underclass: Self-destructive behavior.




http://online.wsj.com/news/articles/SB112795305361255317

Wednesday, January 15, 2014

Five Myths of Income Inequality.


What percentage of being poor is driven by out-of-wedlock births, drug and alcohol abuse, dropping out of high school, and Casey Mulligan's government policy "glue trap" where the poor can face 100% marginal tax rates for their gainful employment?

When is the last time you heard the president or Harry Reid say anything even remotely close to this?





http://www.independent.org/newsroom/article.asp?id=4844

Tuesday, January 14, 2014

Fun with Blogging.....







Hello again. I am back after a much needed break. I am sorry for the interregnum but pounding the Blog day after day, even though many have given me the business for being a "cut and paster", can get old after four straight years.

Anyway, I got this in a comment to my posting on the absurdity of the distribution of income as the main problem of our economy. This is too good not to post. 

This shows the joy and the pain of blogging. It can be very rewarding at times. At other times when morons make nasty comments about you that can't be published, well that is the negative price of being in the Blogsphere. But sometimes people will write and vent and you just let them go off. I get the feeling this guy just FELT BETTER after saying what he said below. Mind you, I am not knocking this dude and what is said. I'm a free speech guy here on my Blog as long as it is respectful. But I can't help but smile at the end after all that has been laid to waste in six tidy paragraphs.







.
Enjoy!





From a comment:



Funny thing is that wealth distribution IS currently a wreck if you look at whether or not people actually earn what they have. The problem is that most left wing solutions would only make the problem worse, and most right wing solutions do little to nothing to improve things either.

The real heart of the problem lies in our monetary system and the way the governing bodies are funded. Both are built on involuntary funding or theft, so everyone gets a lot of what they don't want.

Endless aggressive wars overseas, or on drugs or poverty or any other horrible domestic program would simply not be possible in the presence of a sound monetary system. The amount of economic misallocation caused by the current destruction of money is literally immeasurable, and so vast that essentially the entire US financial sector depends on it along with all other heavily subsidized organizations whether it's via government contracts or more direct funding.

The way I see it, the US is in about the same position as the USSR was before collapse, only we have laundered everything in the name of capitalism and "the land of the free." The most telling of any statistic, to me, is that we have a higher % of people in prison than any other tyrannical government ever before. If the % of people, specifically non violent people, in cages isn't an indicator of an unsustainable system, I don't know what is. It doesn't really matter if you can vote for a new head of the mafia, so long as the underlying social/legal structure that forces everyone to fund the mafia remains.

In other words the only difference between democrats (sic.) and republicans (sic.) is what they want to do with your money after they steal it.

Unfortunately the American experiment was a catastrophic failure. It created the mess we have today, because a piece of paper obviously isn't enough to restrain the growth of an organization funded involuntarily. Either the US constitution sanctions every bad government policy today, or it is unable to prevent a single one. But that is okay, we have learned quite a bit. The effort to decentralize government was correct, we just didn't go far enough. We know that voluntary funding of every aspect of society is absolutely essential if peace and prosperity and ultimately governance "by the people" are the end goals. And the new "founders" are already well on their way to creating a new free world with crypto currencies and crowd sourced projects and open sourced software. I am quite sure that all "public policy" will one day be entirely obsolete, and that is the only way to win. You don't oppose criminals via the channels they set up for you to oppose them, you undermine their entire system.

Glad to see you mention Austrian economics btw :)

Wednesday, January 1, 2014

Happy New Year!...And God Help Us!

Even the Little Sisters of the Poor have to be covered for birth control.