States Are Underestimating Budget Crisis By Trillions

From the interview with Jeffrey Miron:

The problem is pension liabilities are not being accounted for in state budgets. The results: states across the country, he estimates, are underestimating their liabilities by $1-2 trillion.

See here for more that I’ve written regarding state pension plans over the past years.

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Examining the Theory of Catastrophic & Man-Made Global Warming

In honor of the recent Gore-fest …

Climate Skeptic is a great source for logic and evidence in the field of climate change. Kudos to Warren!

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What’s Behind the West’s Involvement in Lybia?

Some food for thought regarding Lybia (a friend forwarded several articles to me):

First off, I believe it’s quite curious that the IMF was so quick to recognize the TNC as Lybian government:

International Monetary Fund (IMF) today recognised the rebel’s National Transitional Council (NTC) as the legitimate government of Libya, assuring the war ravaged country of rapid and sustainable economic recovery.

“I am happy to report that reflecting the views of the international community, the IMF will deal with the NTC as the government of Libya,” IMF Managing Director Christine Lagarde said.

“In this context, the Fund stands ready to help the authorities through technical assistance, policy advice, and financial support if requested, as they begin to rebuild Libya’s economy,” she said.

… it certainly helps motivate “rebel” leaders to seize power when they are given the ability to request massive financial aid, pay it out to themselves and their cronies, and kindly pass the bill on to the country’s future taxpayers, in short … the IMF’s modus operandi.

In March BBC already reported:

Libya has declared gold reserves worth more than $6bn at current prices, thought to be held largely at home.

The reserves are substantial, ranking in the global top 25, according to International Monetary Fund (IMF) data.

… since then gold has risen by about 30%, so those total reserves would now be closer to $8bn, if the reports are accurate.

And Asia Times Online asks Libya all about oil, or central banking?:

(…)

I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising. This suggests we have a bit more than a rag tag bunch of rebels running around and that there are some pretty sophisticated influences.

(…)

Another provocative bit of data circulating on the Net is a 2007 “Democracy Now” interview of US General Wesley Clark (Ret). In it he says that about 10 days after September 11, 2001, he was told by a general that the decision had been made to go to war with Iraq. Clark was surprised and asked why. “I don’t know!” was the response. “I guess they don’t know what else to do!” Later, the same general said they planned to take out seven countries in five years: Iraq, Syria, Lebanon, Libya, Somalia, Sudan, and Iran.

What do these seven countries have in common? In the context of banking, one that sticks out is that none of them is listed among the 56 member banks of the Bank for International Settlements (BIS). That evidently puts them outside the long regulatory arm of the central bankers’ central bank in Switzerland.

The most renegade of the lot could be Libya and Iraq, the two that have actually been attacked. Kenneth Schortgen Jr, writing on Examiner.com, noted that “[s]ix months before the US moved into Iraq to take down Saddam Hussein, the oil nation had made the move to accept euros instead of dollars for oil, and this became a threat to the global dominance of the dollar as the reserve currency, and its dominion as the petrodollar.”

According to a Russian article titled “Bombing of Libya – Punishment for Ghaddafi for His Attempt to Refuse US Dollar”, Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.

During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.

(…)

So is this new war all about oil or all about banking? Maybe both – and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible.

Most countries don’t have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation’s own publicly owned bank. Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans.

If the Gaddafi government goes down, it will be interesting to watch whether the new central bank joins the BIS, whether the nationalized oil industry gets sold off to investors, and whether education and healthcare continue to be free.

Of course health care is never free, so just ignore that nonsensical statement. The article also makes some, in my opinion, very questionable analyses about monetary policy and central banking which I am sparing you in the excerpts above. But that doesn’t mean it doesn’t provide a lot of interesting journalistic insights into what may be going on behind the scenes in this project.

As my friend who sent me these articles pointed out: Let’s see how long it’ll take until we hear stories about Lybian assets missing.

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The Inevitable Waste and Corruption of “Stimulus” Spending

A good theory has predictive power. A prediction doesn’t automatically make a theory true, but it’s a good first test in my opinion.

Quite a while ago, I made the case, based on praxeological reasoning, why bureaucracy can’t ever accomplish its stated objectives in the long run.

Based on that theory I suggested many times over that government stimulus programs will not be a panacea to economic sluggishness, quite the contrary.

In particular I wrote almost 3 years ago:

The $800 billion spending bill that is currently being discussed will not fix the US economy.
(…)
This bill was never [Obama’s] bill. It was the Congressional Democrats’ bill, led by Harry Reid and Nancy Pelosi. Now Obama has made it his bill. All the scandals, wasteful projects and corruption that will be uncovered under the projects funded by it will be associated with him.
(…)
To ignore [those who oppose it] would be the biggest mistake Obama could make now.
(…)
If he continues doing it, the political retaliation will ensue sooner or later in the next Congressional elections and maybe in the next presidential elections. This is an unnecessary, harmful, and avoidable political gamble.

Here we are, almost 3 years later, with an unemployment rate higher than it was at the time (~9% now vs. ~8% then), which I would submit as one piece of evidence that the stimulus did not work. (My readers will know that there are many more, but that’s not the main point of this post!)

(And yes, I know the good old argument that “it would have been much worse, had it not been for the stimulus” etc. I would only kindly ask that anyone wanting to submit such an argument please logically refute the counter arguments that I have already laid out very clearly in The Trouble With Bureaucracy, and empirically supply specific examples that corroborate this thesis and that outweigh any evidence that may exist to the contrary.)

But in addition to that, I would say that the corruption, scandals, waste, and the ensuing political backlash that I predicted above, have only just begun to unravel: The case of Solyndra is suddenly a big thorn in the administration’s side, and it doesn’t seem to be going away any time soon:

Pressure on the Obama administration over the loan guarantee given to Solyndra ratcheted up after the discovery of e-mails from a White House official warning of possible political ramifications of the loan. As Carol Leonnig and Joe Stephens reported:

A White House official fretted privately that the Obama administration could suffer serious political damage if it gave additional taxpayer support to the beleaguered solar-panel company Solyndra, according to newly released e-mails.

(…)

Solyndra, the first renewable-energy company to receive a loan from the stimulus law creating the guarantee program, had its headquarters raided by the FBI last week. As AP reported:

The FBI raided Solyndra’s headquarters last week and interviewed company executives at their homes. A U.S. official, who spoke on condition of anonymity because the case is under seal, said the search was related to a fraud investigation into whether Solyndra filed inaccurate documents with the government.

The Silicon Valley company was the first renewable-energy company to receive a loan guarantee under the stimulus law, and the Obama administration frequently touted Solyndra as a model for its clean energy program. President Barack Obama visited the company’s headquarters last year.

Even as Obama declared that “the future is here” during a May 2010 visit to Solyndra, warning signs were being sent from within the government and from outside analysts who questioned the company’s viability.

At least three reports by federal watchdogs over the past two years warned that the Energy Department had not fully developed the controls needed to manage the multibillion-dollar loan program.

… and as was predictable, Republicans are happy to pounce:

“What did the stimulus give us last time? It gave us Solyndra,” Bachmann said to cheers at a packed Tea Party fundraiser this week in liberal Marin County. “Wasn’t that great?”

Bachmann is among the growing ranks of Republicans, including the lineup of 2012 GOP presidential candidates, who are increasingly salting their stump speeches, press releases and talking points with references to the Fremont firm that once was a poster child for the Obama administration on alternative energy jobs before it shut down last month.

The Minnesota Congresswoman and Tea Party darling delights audiences when she dryly quotes Vice President Joe Biden’s past observation that the federal government’s $528 million loan to Solyndra “was exactly what the stimulus act was all about.”

“It’s exactly true,” she said to cheers and applause from conservative activists in Marin on Thursday. “I tell you … we have so much material, it’s going to be a joy.”

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/16/MNED1L5MRI.DTL#ixzz1YAbztAT7

I would actually be shocked if this will remain the only example of blatant stimulus waste that will come back to haunt the president.

Actions have consequences; stupid decisions, whose long term impact you are unable to assess, will come back to bite you in the ass, particularly during election year. From the Republicans’ viewpoint, Obama could not have picked a better time for pushing the stimulus bill, since it usually takes at least a few years for all the filth and corruption of giant government programs to build up and trickle through the shiny, pompous, and mindless facade of politics.

But as I have come to realize about politics a while ago, the best thing to do in my opinion is to abstain from participating in these spectacles, sit back, relax, and don’t hurt your head too much about petty, boring, and small minded sociopaths who aspire to exercise power over millions of people year after year.

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Comments Functionality Fixed!

I just noticed that for quite a while the comments functionality was broken, because reCaptcha seems to have changed a lot when they were moved into the Google Apps platform, and I wasn’t aware of this at all.

So I now issued a new public/private key pair and comments seem to be working again.

Sorry to all those people whose comments I have missed during that time.

It’s all up now, so … comment away! =)

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