political

You do have to wonder. Why have a government if you don't want it to govern?

nobody@vox.com(Snowy) — Sun, 08 Nov 2009 15:31:18 -0800

http://www.independent.co.uk/opinion/commentators/rupert-cornwell/rupert-cornwell-why-cant-the-us-learn-to-love-its-government-1816868.html

Rupert Cornwell: Why can't the US learn to love its government?

Out of America: Suspicion of rulers dates to the founding of the nation – and even Obama is unlikely to change that

What is it about Americans and government? The tea-party crowd were back in town the other day – more than 5,000 of them, gathered on the West Lawn of the Capitol to rail against the historic healthcare reform bill that the House of Representatives is expected to pass this weekend.

The passions the measure has generated among its Republican opponents have been remarkable. One Republican Congresswoman has declared that health reform was a greater threat to America than Osama bin Laden and global terrorism, while John Boehner, the party's leader in the House, urged the protesters to join Republicans in "defending our freedom".

A neutral observer would not know whether to laugh or cry at this so-called "Super Bowl of Freedom", featuring inter alia a giant banner describing the proposals as "National Socialist Healthcare, Dachau, Germany, 1945". Yes, the tea-party movement, currently touring the country, contains more than its share of cranks and nutters. But the fringes, too, can express political truths. This particular truth is that Americans just can't bring themselves to love government.

When President Barack Obama came to power, the stage seemed set for government activism unmatched in decades. The parallels with the early 1930s were palpable. Talk of a second Great Depression was everywhere, economists were urging a "new New Deal", Franklin Roosevelt was suddenly back in fashion. Nine months on, however, the urgency seems to have vanished. And why this cooling of reformist ardour? True, the economy has improved (though not by much, as evidenced by the news that unemployment last month rose to 10.2 per cent, the highest level in a quarter of a century.) The huge deficits being run up by Washington are also legitimate cause for concern. A more important reason though is America's ancestral suspicion of government.

The governors' elections in New Jersey and Virginia last week, in which Mr Obama's Democrats were soundly defeated, were largely local affairs. But in so far as they sent a message to the party that controls the White House and both chambers of Congress, the message was plain: slow down, the voters said, don't force change down the people's throats. With a young and charismatic President who won power by promising change, it's easy to forget that the US is a conservative country. Mr Obama triumphed in 2008 not by harnessing a vast tide of liberalism, but by persuading the wavering centre that he was a better bet than another four years of discredited Republican policies. In Virginia and New Jersey, exit polls showed, the centrists (moderates, independents, call them what you will) changed their minds and decided to put on the brakes.

A fascinating Gallup survey last month found that despite the Democrats' victories in 2006 and 2008, fully 40 per cent of Americans, more than ever, describe themselves as conservative, while 36 per cent call themselves moderates. Only 20 per cent are avowed liberals. It's not a question of government having failed the country. It's just that Americans aren't comfortable with the beast when its role, as now, threatens to expand – even when the deficiencies of the unfettered free market have never been more glaring.

Mr Obama secured his record-breaking $787bn stimulus package last February, albeit with virtually no Republican support. But that might be it. Yes, the House will probably pass a version of healthcare reform, but the measure could yet founder in the Senate, where party discipline is weaker, and a 60 per cent majority is required to pass anything of significance. If it does fail, it will basically be for fear that the reform amounts to a "government takeover of healthcare". The most contentious part of the bill is the "public option" – whereby a publicly financed scheme would be set up to provide some competition to rapacious private insurers. But that option now hardly dares speak its name. Leading Democrats prefer to speak of a "consumer option".

And health care is but one of three massive public policy issues on the table, beside a green energy programme to combat climate change, and regulation of the financial markets, aimed at preventing a repeat of last year's crisis. But there's no guarantee any of them will get through. For Europeans, all three would be no-brainers: assured health coverage for all (or rather almost all), steps to reduce both pollution and imports of costly foreign oil, and curbs on the excesses of Wall Street. Not so in the US – because each implies a substantial increase in the role of government.

And it has been ever thus. Suspicion of government is as old as the Republic. The movement that turned up on Capitol Hill again last week takes its name, of course, from the Boston Tea Party of 1773. Americans like to see their War of Independence as a revolution against government – back then the far-away government in London that taxed the colonies without allowing them representation – and the habit has never died.

These days, one thing unites every presidential candidate: a readiness to denounce the federal government in Washington and all its works. That the candidate in question might have made a long and comfortable career in that den of corruption and iniquity makes not a scrap of difference. Usually – as now – the sentiment works to the advantage of Republicans, but not always. Sometimes, the beneficiary can be a genuine outsider like the eccentric Texan businessman Ross Perot, who in 1992 came closer to winning the White House than any independent in 80 years. Sometimes it takes on the hyperbolic aspect of the tea-party crowd, and last summer's raucous town-hall protests against health reform. And on occasion it spills over into tragedy, into the raw hatred of Timothy McVeigh, who blew up the federal government building in Oklahoma City in 1995, killing 168 people.

No one is more aware of how distrust of government is part of America's collective political DNA than Mr Obama. Whether he can tame it is another matter.

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John Mauldin's Thoughts

nobody@vox.com(Zak Klemmer) — Sat, 07 Nov 2009 12:56:50 -0800

Thoughts from the Frontline Weekly Newsletter The Glide Path Option by John Mauldin November 6, 2009
In this issue: The Present Contains All Possible Futures The Ugly Unemployment Numbers Argentinian Disease The Austrian Solution The Eastern European Solution Japanese Disease The Glide Path Option Philadelphia, Orlando, and Phoenix
The present contains all possible futures. But not all futures are good ones. Some can be quite cruel. The one we actually get is dictated by the choices we make. For the last few months I have been addressing the choices in front of us, economically speaking. Today I am going to summarize them, and maybe we can look for some signposts that will tell us which path we're headed down. For those who are new readers and who would like a more in-depth analysis, you can go to the archives at www.2000wave.com and search for terms I am writing about. And I will start out by briefly touching on today's ugly unemployment numbers, with data you did not get in the mainstream media. But first, let me welcome the readers of EQUITIES Magazine to this letter. The publisher is sending the letter to you directly. This letter is free, and all you have to do to continue receiving it is type in your email address at www.2000wave.com. Likewise, I have arranged for my regular readers to get a free subscription to EQUITIES Magazine, if you would like. You can go to www.equitiesmagazine.com. For those who don't know, I write a brief monthly column for them. The Ugly Unemployment Numbers The headlines said unemployment, as measured by the "establishment survey," was down by 190,000; and even though that was slightly worse than forecast, market bulls were cheered by the fact that the number was not as bad as last month's. It is an improvement that we are not falling as fast. Well, maybe. What I did not see in many of the stories I read was that the number of unemployed actually soared by 558,000, to 15.7 million, as measured by the household survey. The establishment survey polls larger businesses; the household survey actually calls individual households. Let's look at the real number in the establishment survey. If you don't seasonally adjust the number, the actual change in unemployment for October was 641,000, or about 450,000 more than the seasonally adjusted number. And the Bureau of Labor Statistics added 86,000 jobs that they simply guess were created through the so-called birth-death ratio. Interestingly, the birth-death ratio number is not seasonally adjusted, so it is just added to the unemployment number. http://www.bls.gov/web/cesbd.htm The total (U-6) employment rate is at a record high of 17.5% (this includes those who are part-time for economic reasons). There are now over 10.5 million people who have lost their jobs since the beginning of the downturn. My favorite slicer and dicer of data, Greg Weldon (www.weldononline.com), offers up an even more horrific number. As I have noted before, if you have not looked for work in the last four weeks, the BLS does not count you as unemployed. Quoting Greg: "Moreover, when we combine the monthly change in the number of Unemployed, with the number Not in the Labor Force, we might consider the result to be a proxy for the actual 'change' in the underlying labor market situation ... in which case, October's figure of 817,000 represents the fourth LARGEST yet, behind last month's (September's) second largest figure of 1,021,000 ... for a two-month combined figure of 1.838 million, in newly Unemployed, or no longer 'in' the Labor Force ... "... the second LARGEST two-month total EVER posted, barely trailing the December-08/January-09 total 1.955 million. "Bottom line ... basis this measure AND the 'Total Unemployment Rate,' we could conclude that not only is there NO 'improvement' in the labor market, but moreover, that it continues to DETERIORATE, intently." There are plenty more implications in the data, but let's turn to the topic of the day. The Present Contains All Possible Futures Like teenagers, we as a US polity have made a number of bad choices over the past decade. We allowed banks to overleverage and, in the case of AIG (and others), sell what were essentially naked call options of credit default swaps, based on their firm balance sheets, far in excess of their net worth; and that put our entire financial system at risk. We gave mortgages to people who could not pay them, and did so in such large amounts that we again brought down the entire world financial system to the point that only with staggering amounts of taxpayer money was it brought back from the brink of Armageddon. We assumed that home prices were not in a bubble but were a permanent fixture of ever-rising value, and we borrowed against our homes to finance what seemed like the perfect lifestyle. We did not regulate the mortgage markets. We ran large and growing government deficits. We did not save enough. We allowed rating agencies to degrade their ratings to a point where they no longer meant anything. The list is much longer, but you get the idea. Now, we are faced with a continuing crisis and the aftermath of multiple bubbles bursting. We are left with a massive government deficit and growing public debt, record unemployment, and consumers who are desperately trying to repair their balance sheets. If present trends are left unchecked, we will need to find $15 trillion in the next ten years, just to pay for US government debt, let alone state, county, and city debt. And perhaps some loans for business will be needed? Where can all this money come from? The answer is that it can't be found. Long before we get to 2019 there will be an upheaval in the market, forcing what could be unpleasant changes. We are left with no good choices, only bad ones. We have created a situation that is going to cause a lot of pain. It is not a question of pain or no pain, it is just when and how we decide (or are forced) to take it. There are no easy paths, but some bad choices are less bad than others. So, let's review some of the choices we can make. (Again, I am being very general here. You can go to the archives for more specifics. This is a summary letter.) Argentinian Disease One way to deal with the deficit is to do what Argentina and other countries have done: simply print the money needed to cover the deficits. Of course, that eventually means hyperinflation and the collapse of the currency and all debt. There are writers who think this is an inevitable outcome. How else, they ask, can we deal with the debt? Where is the political willpower? One large hedge-fund manager in Brazil humorously remarked that Argentina is a binomial country. When faced with two choices (hence binomial) they always made the bad choice. Could it happen here? Hyperinflation is not an economic event; it is a political choice. I think last Tuesday's election is a sign that the voter population is beginning to pay attention to the need for something more than talk of change. There is growing discomfort with the size of the deficits. Further, the Fed would have to cooperate in order for there to be hyperinflation, and I think there is only a very slight (as in almost zero) chance of that happening. Could Congress change the rules and take over the Fed? Anything's possible, but I seriously doubt there is any appetite in saner Democratic circles for such a thing to happen. I think the chances of hyperinflation in the US are quite low. It would be the worst of all possible bad choices. The Austrian Solution Here I refer to the Austrian school of economic theory, based on the work of Ludwig von Mises and Friedrich Hayek, et al. There are those in the Austrian camp who argue the need to do away with the Fed, return to the gold standard, allow the banks that are now deemed too big to fail to go ahead and fail, along with any businesses that are also mismanaged (such as GM and Chrysler), and leave the high ground to new and more properly run. In their model, government spending is slashed to the bone, as are (in most cases) taxes. The advantage is that, in theory, you get all your pain at once and then can begin to recover from what would be a very bad and deep recession. The bad news is that you risk getting 30% unemployment and another depression that could take a very long time to climb out of. Now, let me say that I have GREATLY simplified their argument. If you want to learn more you can go to www.mises.org. It is an excellent web site for all things Austrian. While I am not Austrian, I have spent a lot of time reading the literature and have certain sympathies for this view. That being said, this also has almost no chance of being implemented. In Congress, only my friend Ron Paul is its advocate. Most Austrian followers are Libertarian by nature, and that is just not a political reality for the coming decade. The Eastern European Solution As it turned out, Niall Ferguson (last week I wrote about his brilliant book, The Ascent of Money) was in Dallas last night, and I was graciously invited to hear him. He gave a great speech and signed books, and then we went to a local bar and proceeded to solve the world's problems over Scotch (Niall) and tequila (me), and went farther into the night than we originally intended. He's a very fun and knowledgeable guy. As we were talking about possible paths, he brought one to mind that I hadn't thought of. He reminded me of the period after the fall of the Berlin Wall, as the nations of Eastern Europe broke from the former Soviet Union. They started with very weak economies and simply overhauled their entire governments and economies in a rather short period of time, though not in lockstep with one another. Privatization, lowered taxes, etc. were the order of the day. We here in the US are always talking about the need for reform. We need to reform health care or education or energy. In Eastern Europe they did not reform in the sense that we use the word. In many cases they simply started from scratch and built new systems. They had the advantage that there was general agreement that things did not work the way they had been, so there was more room for change. Today in the US there are large constituencies that resist change. We only get to tinker around the edges, when real structural change is needed. Sadly, we agreed that here there is not much chance of major change. We can't even get the obvious changes needed in the financial regulatory world. Sidebar: I am outraged at the paltry proposed financial "reforms." Rahm Emanuel said that no crisis should be allowed to go to waste. The Obama administration is wasting this one. How can we allow banks to be too big to fail? Where is the reinstatement of Glass-Steagall? If we are going to allow large banks to exist, then their leverage must be reduced to the point where their failure would not risk the system and require taxpayer dollars. I don't care if that makes them less profitable. They are making those large profits because they have taxpayers implicitly behind them, and I get no dividend payments from them, the last time I checked. Where is Fannie and Freddie reform (and their breakup)? No mention of an exchange for credit default swaps? (And yes, I know that such an exchange would reduce the number of swaps and the profitability of them. That is the point. They are dangerous if allowed to become too big a market.) This bill reads as if bank lobbyists wrote it. Where is the populist outrage? We have let the fox set up the rules for running the hen house. Shame on us all if we allow this to happen. Japanese Disease I have written a lot over the past year about the problems facing Japan. Their population is shrinking, as is their work force. They are running massive fiscal deficits and have done so for almost 20 years. Government debt-to-GDP is now up to 178% and projected to rise to over 200% within a few years. They started their "lost decades" with a savings rate of almost 16%, and are now down to 2% as their aging population spends its savings in retirement. They have had no new job creation for 20 years, and nominal GDP is where it was 17 years ago. As bad as our problems are here in the US, their bubble was far more massive. Values of commercial property fell 87%! Their stock market is still down 70%. They had twice as much bank leverage to GDP as the US. (Think about how bad off we would be if bank lending was twice as large and had even worse defaults and capital shortfalls!) And yet, they Muddle Through. Productivity has kept their standard of living reasonable. Up until recently their exports were strong. The trading floors of the world are littered with the bodies of traders who have shorted Japanese government debt in the belief that it simply must implode. While I believe that it eventually will, if they stay on the path they are on, Japan is a very clear demonstration that things that don't make sense can go on longer than we think. Richard Koo (chief economist of Nomura Securities, in Tokyo) argues passionately that Japan had a balance-sheet recession, and that the only way for Japan to fight it was to run massive deficits. Banks were not lending and businesses were not borrowing, as both groups were trying to repair their balance sheets, which were savaged by the bursting of the bubble. It is said that at one time the value of the land on which the Emperor's Palace sits in Tokyo was worth more than all of California. Clearly this was a bubble that puts our housing bubble to shame. So, I understand the point that there are differences between Japan and the US . But there are also similarities. We too have had a balance sheet recession, although here it was mostly individuals and financial institutions that have had to retrench and repair their balance sheets. Japan elected to run large deficits and raise taxes. As I wrote in the October 16^th letter (http://www.2000wave.com/article.asp?id=mwo101609), "Savings equal Investments: GDP (Gross Domestic Product) is defined as Consumption (C) plus Investment (I) plus Government Spending (G) plus [Exports (E) minus Imports (I)] or: GDP = C + I + G + (E-I) I don't want to go on at length again, but basically, the literature I quoted suggests that government stimulus and deficits have no long-run positive effect on GDP. In fact, the work done by Christina Romer, Obama's chairman of the Council of Economic Advisors, shows that tax cuts have a three-times-greater positive effect on GDP, and tax increases have the same level of negative effect. In the equation above, if you increase government spending it will have a positive effect in the short run on GDP, but not in the long run. In essence, the increase in "G" must be made up by savings from consumers and businesses and foreigners. But "G" does not enhance overall productivity. Government spending may be necessary but it is not especially productive. You increase productivity when private businesses invest and create jobs and products. But if government soaks up the investment capital, there is less for private business. And that is Japanese disease. You run large deficits, sucking the air out of the room, and you raise taxes, taking the money from productive businesses and reducing the ability of consumers to save. Then you go for 20 years with little or no economic or job growth. This is the path we currently seem to be on. The Japanese experience says that it could last a lot longer than people think before we hit the wall; because if savings rise in the US, and if banks, instead of lending, put that money on deposit with the Fed, as they are now doing (in order to repair their balance sheets), the US could run large deficits for longer than most observers currently believe. We will need 15-18 million new jobs in the next five years, just to get back to where we were only a few years ago. Without the creation of whole new industries, that is not going to happen. Nearly 20% of Americans are not paying anywhere close to the amount of taxes they paid a few years ago, and at least ten million are now collecting some kind of unemployment benefits or welfare. Choosing large deficits does not reduce the amount of pain we will experience, it just seemingly reduces it in the short term and creates the potential for a serious economic upheaval when the bond market finally decides to opt for higher rates. This path is a bad choice, but sadly, in reality it is one we could take. The Glide Path Option A glide path is the final path followed by an aircraft as it is landing. We need to establish a glide path to sustainable deficits (could we dream of surpluses?). That is because at some point there will be recognition, either proactively or forced upon us by the bond market, that large deficits are unsustainable in the long term. If Congress and the president decided to lay out a real (and credible) plan to reduce the deficit over time, say 5-6 years, to where it was less than nominal GDP, the bond market would (I think) behave. Reducing deficits by $150 billion a year through a combination of cuts in growth and spending would get us there in five years. The problem is that there is real pain associated with this option. Remember that equation above. Absent a growing private sector, if you reduce "G" (government spending) you also reduce GDP in the short run. You have to take some pain today in order to do that. But you avoid worse pain down the road: a bubble of massive federal debt that has to be serviced will be very painful when it blows up, as all bubbles do. The Glide Path Option means that structural unemployment is going to be higher than we like (which is actually the case with all the options). And the large tax increases that come with this option will by their very nature be a drag on growth (and cause a double-dip recession in 2011). We can debate tax increases all we want, but I sadly think we will soon have a VAT tax. There are no good options. I just hope that we cut corporate taxes enough when we do create a VAT, that it will make our corporations more competitive, which will be a boost for jobs. That's pretty much it. This is not a problem we can grow ourselves out of in the next few years. We have simply dug ourselves into a huge hole. This is not a normal recession. There is not a "V" ending to this recession. We are going to have deal with the pain. It will be the pain of reduced returns on traditional stock market investments, a lower dollar, low returns on bonds, European-like unemployment, lower corporate profits over the long term, and a very slow-growth environment. But if we choose this path, we will get through it in the fullness of time. And of course, then we will eventually have to deal with the $70 trillion in our off-balance-sheet liabilities in Medicare and Social Security and pensions. Sigh. But that's for another time. Philadelphia, Orlando, and Phoenix I really am more optimistic than this letter makes me seem. But if you ignore reality, then you have no chance to figure out how to make the best of your situation. It is the efforts of hundreds of millions of individuals trying to make their own lot a little better than will get us back to a robust economy. Monday I fly to Philadelphia and then the next day to Orlando for two speeches, and then the following week a quick trip to Phoenix, then home to start to plan for Thanksgiving. I will be in New York the first weekend of December (the 4^th) for Festivus, a great fundraiser for kids sponsored by Todd Harrison and the team at Minyanville (http://www.rpfoundation.org/), Interestingly, they hold it every year at a "Texas" barbecue joint. Look me up if you are there. Tiffani has been out the last two days of this week. She is due in seven weeks or less, and her hips are expanding. The pain is too much right now for her to walk up the stairs to the office, so she is working from home. The doctor says this is the one time that her pain is not a sign of something bad. She is being a trooper and not taking any pain meds. It has been 30 years since I was around a pregnant lady for more than a few hours, and it does bring back some memories. Watching her grow and change has brought back the sense of awe over how our bodies are designed. Ryan and Tiffani have decided on the name Lively for my first granddaughter, to add to the two new grandsons this year. From zero to three grandkids in just six months! Kind of makes me dizzy. I really enjoyed my time in South America. Rio is quite beautiful and I want to go back and spend some time. Have a great week. There will be enough good friends and family that I know I will. And tomorrow night I finally get to go to a Dallas Mavericks game. We may have a real team this year. Your always optimistic at the beginning of the season analyst, John Mauldin John@FrontLineThoughts.com Copyright 2009 John Mauldin. All Rights Reserved Note: The generic Accredited Investor E-letters are not an offering for any investment. It represents only the opinions of John Mauldin and Millennium Wave Investments. It is intended solely for accredited investors who have registered with Millennium Wave Investments and Altegris Investments at www.accreditedinvestor.ws or directly related websites and have been so registered for no less than 30 days. The Accredited Investor E-Letter is provided on a confidential basis, and subscribers to the Accredited Investor E-Letter are not to send this letter to anyone other than their professional investment counselors. Investors should discuss any investment with their personal investment counsel. John Mauldin is the President of Millennium Wave Advisors, LLC (MWA), which is an investment advisory firm registered with multiple states. John Mauldin is a registered representative of Millennium Wave Securities, LLC, (MWS), an FINRA registered broker-dealer. MWS is also a Commodity Pool Operator (CPO) and a Commodity Trading Advisor (CTA) registered with the CFTC, as well as an Introducing Broker (IB). Millennium Wave Investments is a dba of MWA LLC and MWS LLC. Millennium Wave Investments cooperates in the consulting on and marketing of private investment offerings with other independent firms such as Altegris Investments; Absolute Return Partners, LLP; Fynn Capital; Nicola Wealth Management; and Plexus Asset Management. Funds recommended by Mauldin may pay a portion of their fees to these independent firms, who will share 1/3 of those fees with MWS and thus with Mauldin. Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest with any CTA, fund, or program mentioned here or elsewhere. Before seeking any advisor's services or making an investment in a fund, investors must read and examine thoroughly the respective disclosure document or offering memorandum. Since these firms and Mauldin receive fees from the funds they recommend/market, they only recommend/market products with which they have been able to negotiate fee arrangements.
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Kucinich Blasts Operation: Cast Doubt

nobody@vox.com(LilTreva) — Fri, 06 Nov 2009 04:47:41 -0800

Dennis Kucinich blasted the voting congressional majority that voted for a bill that they did not bother to read. That bill was intended to officially declare that when war crimes are committed, they didn't really happen. The purpose of the bill was intended to protect certain war criminals.

Any one that attempts to protect one group of war criminals may as well protect them all.

"Today we journey from Operation Cast Lead to Operation Cast Doubt. Almost as serious as committing war crimes is covering up war crimes, pretending that war crimes were never committed and did not exist.

Because behind every such deception is the nullification of humanity, the destruction of human dignity, the annihilation of the human spirit, the triumph of Orwellian thinking, the eternal prison of the dark heart of the totalitarian." - Dennis Kucinich:

Video and transcript of Kucinich's response are on the same page here.

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Sorry, Repubs, it's all bad news. Obama's stimulus is working.

nobody@vox.com(Snowy) — Thu, 05 Nov 2009 16:24:45 -0800

http://www.theaustralian.com.au/business/markets/productivity-soars-as-us-on-the-mend/story-e6frg926-1225794888461

US productivity soars as jobless benefit claims lowest since January

Luca Di Leo
From: Dow Jones Newswires
November 06, 2009 6:30AM

US productivity, or output per hours worked, surged in the third quarter to hit its highest level in six years as the world's largest economy emerged from its worst downturn in decades.

Meantime, the number of US workers filing new claims for jobless benefits fell by more than expected last week to its lowest level since the start of the year, data from the Labour Department showed.

Non-farm business labour productivity rose by an annual rate of 9.5 per cent in the July-to-September period as the economy recovered and employers saved money by slashing staff. Economists surveyed by Dow Jones Newswires had predicted a 7.0 per cent increase in third-quarter productivity.

A rise in productivity is ultimately good for companies, workers and the economy. More productive companies have greater profits, which allow them to pay higher wages. That also allows the economy to grow faster without generating inflation.

But during a difficult time for the economy, a short-term productivity rise can be a sign that companies slash workers faster that they cut output. In other words, stretching existing workers means hiring fewer new ones.

Still, economic recoveries have in the past generally followed a consistent pattern: first productivity grows, then employment rises, and finally wages increase.

Over the past few weeks, economic data have continued to show that the worst recession since the Great Depression appears to be winding down, with clear improvements in manufacturing and the housing sector.

Gross domestic product, a broad measure of economic activity, rose by an annualised 3.5 per cent in the third quarter as the US government's massive stimulus plan boosted consumer spending.

"Message to the Fed: subdued inflation trends it is," said Jonathan Basile, economist at Credit Suisse, in comments on the two latest economic reports.

In its declaration that interest rates would remain near zero for "an extended period," the Federal Reserve yesterday included new qualifiers explaining the conditions that would justify keeping rates low: "low rates of resource utilisation, subdued inflation trends, and stable inflation expectations."

The Fed voted to maintain the target federal-funds rate for interbank lending at a record-low range of zero to 0.25 per cent to bolster the fragile economic recovery.

Productivity is defined as output per hours worked. It rose 6.9 per cent in the second quarter of the year, revised up from a previously estimated increase of 6.6 per cent.

A key gauge of inflationary pressures within the productivity report plunged. Unit labour costs fell 5.2 per cent last quarter at an annual rate. Economists had expected a 4.5 per cent decline.

"Modest unit labour costs indicate that there are few short-term worries about inflation," said Steven Wood, chief economist at Insight Economics.

Big productivity gains are common at the end of a recession or beginning of a recovery. But the increases come at the expense of jobs.

The US employment report for October, out tomorrow (AEDT), is expected to show that the jobless rate stayed close to a 26-year high of 9.8 per cent in September.

In a separate report, the Labour Department said new claims for jobless benefits decreased by 20,000 to 512,000 in the week ended October 31. That is the lowest level since January 3. The previous week's level was revised to 532,000.

Economists surveyed by Dow Jones Newswires had expected a decrease of only 5000 claims.

The four-week moving average of new claims, which aims to smooth volatility in the data, fell by 3000 to 523,750 from the previous week's revised figure of 526,750. That is the lowest level since January 10.

Initial claims still remain at a fairly high level, suggesting the job market has a long recovery ahead.

But some economists still see positive signs in the recent decreases in the four-week-moving average, and the latest 20,000 decrease in initial claims also may suggest an improvement in labour conditions.

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Are conspiracy theorists always this fun to laugh at?

nobody@vox.com(KatieKat) — Tue, 03 Nov 2009 14:40:35 -0800

Recently, a family member of mine became an Alex Jones and 911 Truth devotee. Ok, so it may not have been recently and it may have been building over time but it was only recently that I became aware of just how far from reality he has slipped. He may worry some people but for me, he and his lovely wife are an endless source of amusement!

I was made aware of his new found status as conspiracy theorist/anti-government extremist when a mutual high school friend asked me if my dear cousin had flipped. Apparently, he was posting an endless stream of "evil government" and "evil rich people" videos from the Alex Jones website. I was curious about the videos so popped over to "Prison Planet" to see what the fuss was about. Oh boy was I in for a treat!

I had seen the Truther sites before but Alex Jones was just a font of entertainment! Apparently, the swine flu was created to kill people so the rich could sit back and gather up all the resources (not sure who will be left to produce the goods to maintain the rich lifestyle.) Everybody will be tracked via microchip every moment of every day. We are week away from martial law (in fact some states are already living under it). the New World Order is out to destroy us all!

Now how do they prove this at Prison Planet? Well, they take some carefully framed video clips and put them to an ominous soundtrack. These videos actually make Michael Moore look like an honest, upstanding documentarian!

THEN...you get "expert" testimony in the form of people and youTube videos. For instance if you want to prove it was thermite that was used to purposefully take down the World Trade Center, you show a youtube video of guys playing with it on a car. They don't even have to show the science and math behind their "evidence" (it would take 18 thousand TONS of powdered thermite and a miracle burn that sent it horizontally), they just need that one video. For those people that like the space laser theory for the WTC, a materials engineer that specializes in dental materials seems to be PERFECT **rolling eyes**. The "experts" and "evidence" gain credibility just by being on the net and on Alex Jones' site!

Personally, I might be interested in one of their "theories" if they were to show their films ETHICALLY by presenting the whole story or with credible evidence/testimony/experts. However, the proof they offer is more flimsy than a World Daily News piece on "Bat Boy" or "Big Foot".

Now, I did find one area of the site that I enjoyed THOUROUGHLY - the discussion boards. It only takes a single comment ("Can you show me proof?") for the teeming masses to turn into a rabid mob foaming at the mouth. It was like throwing a piece of meat into a pit of starving animals.

Just a lesson people, if you do believe in this stuff - don't foam at the mouth if people ask you to prove your theories. It makes you look insane. If you think you have a valid conspiracy, discuss it logically - using your own words, not Alex Jones. Show the proof. Show the evidence. If somebody questions the credibility of your evidence, explain why you think the source does have credibilty. Otherwise, you sound like a member of the Jones' Cult (Jim or Alex, both are scary).

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The rise and fall of conservatism.

nobody@vox.com(Snowy) — Wed, 04 Nov 2009 20:24:45 -0800

My neighbour DoctorD recently had a thoughtful post on where conservatism was heading in the U.S. He also linked to the following article on the Becker-Posner blog on the same theme, which I thought said it all very well.

May 10, 2009

Is the Conservative Movement Losing Steam? Posner

I sense intellectual deterioration of the once-vital conservative movement in the United States. As I shall explain, this may be a testament to its success.

Until the late 1960s (when I was in my late twenties), I was barely conscious of the existence of a conservative movement. It was obscure and marginal, symbolized by figures like Barry Goldwater (slaughtered by Lyndon Johnson in the 1964 presidential election), Ayn Rand, Russell Kirk, and William Buckley--figures who had no appeal for me. More powerful conservative thinkers, such as Milton Friedman and Friedrich Hayek, and other distinguished conservative economists, such as George Stigler, were on the scene, but were not well known outside the economics profession.

The domestic disorder of the late 1960s, the excesses of Johnson's "Great Society," significant advances in the economics of antitrust and regulation, the "stagflation" of the 1970s, and the belief (which turned out to be mistaken) that the Soviet Union was winning the Cold War--all these developments stimulated the growth of a varied and vibrant conservative movement, which finally achieved electoral success with the election of Ronald Reagan in 1981. The movement included the free-market economics associated with the "Chicago School" (and therefore deregulation, privatization, monetarism, low taxes, and a rejection of Keynesian macroeconomics), "neoconservatism" in the sense of a strong military and a rejection of liberal internationalism, and cultural conservatism, involving respect for traditional values, resistance to feminism and affirmative action, and a tough line on crime.

The end of the Cold War, the collapse of the Soviet Union, the surge of prosperity worldwide that marked the global triumph of capitalism, the essentially conservative policies, especially in economics, of the Clinton administration, and finally the election and early years of the Bush Administration, marked the apogee of the conservative movement. But there were signs that it had not only already peaked, but was beginning to decline. Leading conservative intellectual figures grew old and died (Friedman, Hayek, Jeanne Kirkpatrick, Buckley, etc.) and others as they aged became silent or less active (such as Robert Bork, Irving Kristol, and Gertrude Himmelfarb), and their successors lacked equivalent public prominence, as conservatism grew strident and populist.

By the end of the Clinton administration, I was content to celebrate the triumph of conservatism as I understood it, and had no desire for other than incremental changes in the economic and social structure of the United States. I saw no need for the estate tax to be abolished, marginal personal-income tax rates further reduced, the government shrunk, pragmatism in constitutional law jettisoned in favor of "originalism," the rights of gun owners enlarged, our military posture strengthened, the rise of homosexual rights resisted, or the role of religion in the public sphere expanded. All these became causes embraced by the new conservatism that crested with the reelection of Bush in 2004.

My theme is the intellectual decline of conservatism, and it is notable that the policies of the new conservatism are powered largely by emotion and religion and have for the most part weak intellectual groundings. That the policies are weak in conception, have largely failed in execution, and are political flops is therefore unsurprising. The major blows to conservatism, culminating in the election and programs of Obama, have been fourfold: the failure of military force to achieve U.S. foreign policy objectives; the inanity of trying to substitute will for intellect, as in the denial of global warming, the use of religious criteria in the selection of public officials, the neglect of management and expertise in government; a continued preoccupation with abortion; and fiscal incontinence in the form of massive budget deficits, the Medicare drug plan, excessive foreign borrowing, and asset-price inflation.

By the fall of 2008, the face of the Republican Party had become Sarah Palin and Joe the Plumber. Conservative intellectuals had no party.

And then came the financial crash last September and the ensuing depression. These unanticipated and shocking events have exposed significant analytical weaknesses in core beliefs of conservative economists concerning the business cycle and the macroeconomy generally. Friedmanite monetarism and the efficient-market theory of finance have taken some sharp hits, and there is renewed respect for the macroeconomic thought of John Maynard Kenyes, a conservatives' bête noire.

There are signs and portents of liberal excess in the policies and plans of the new administration. There will thus be plenty of targets for informed conservative critique. At this writing, however, the conservative movement is at its lowest ebb since 1964. But with this cardinal difference: the movement has so far succeeded in shifting the center of American politics and social thought that it can rest, for at least a little while, on its laurels.

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Don't be hatin'

nobody@vox.com(randomrambling) — Wed, 04 Nov 2009 13:32:47 -0800

Paranoia

My first real job was for Senator Feinstein (D-CA). Like many recent college grads and recent arrivals in Washington, DC, I got an internship on Capitol Hill that led to a full time job. I lived in a group house on Capitol Hill with five other people. It was fantastic.

One thing I learned pretty early on was how much more in common I had with staffers across the aisle than I expected. Sure, we disagreed on just about every public policy issue in the world but our lives were pretty similar otherwise. We worked in the same building and went out to the same restaurants and bars. Being a Hill staffer is a lot like going back to college. Especially at that point in a career. Moreover, although we had our differences I always felt that we were united by a central theme: the desire to make the world a better place. We just disagreed on the best way to reach that goal.

I cling to that world view – that Democrats & Republicans, liberals & conservatives are all working in politics because we want to make a difference. That’s the whole basis behind the saying, “Politics is the art of the possible.” Yes, it is. My problem is that it seems the people across the aisle from me don’t necessarily feel the same way about me. That saddens me.

When George W. Bush got into the White House I had every reason to be upset. I had spent almost two years on the road doing advance for President Clinton and Vice President Gore. I exiled myself for almost six months because I was just too bitter to be around people. No, I did not believe (at least not then) that the 2000 election had been stolen. I actually found it more comforting to think we just lost because when you work on campaigns that is always a possibility. I was just tired, sad and depressed. The combination made me awful to be around.

Never did I think that George W. Bush was like Hitler. Nor did I come up with elaborate theories to discredit him and his election. Even when, about a year and a half into his presidency, I started to think the 2000 election had been stolen, I didn’t think his presidency was illegitimate. Moreover, it seemed pointless to argue the point because it was a fait accompli. As opposed to some of his policies as I was, I even gave him credit when he stuck by his campaign promises such as drilling in ANWR. I don’t support that policy and am glad Congress said no but during his campaign he said he would support it so when he did, well, that’s the point of campaigns. As Senator Lindsay Graham (R-SC) put it so eloquently, “Elections have consequences.”

In poll after poll and from anecdotal Facebook and Twitter evidence, I see that many on the right aren’t just upset that we have President Obama they are rabidly upset. It’s no longer enough to say you oppose someone’s positions, their entire character needs to be destroyed as well. It’s not enough to say “liberal policies are bad for America” you have to say “Liberals hate America and the Constitution. They have ended America as we know and we now live in a tri-state nation called the ’North American Union.” And/or “Obama cannot be president because he a, was born in Kenya b, lied about being a Muslim c, his health care plan will force you to kill or be killed and d, he eats puppies for breakfast.” The scariest part of that last sentence? Only choice d has not been uttered by at least five conservatives I know. Polls show that conservatives hate Obama more than liberals hated Bush II and that only 22 percent of Republicans think he was born in the US.

Oh, well. We Democrats will go back to making the world better. The right wing can go back to watching Glenn Beck.

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Feminism is Key to the "Making of a Slave"

nobody@vox.com(The Informer) — Wed, 04 Nov 2009 13:15:47 -0800

by Henry Makow Ph.D.

When a reader tipped me to a talk delivered by a slave owner in 1712, entitled "The Making of a Slave," I decided to compare past and present. Past methods of enslavement were highly sophisticated, and closely resemble modern feminist social engineering.

Willie Lynch was a British slave owner in the West Indies. He was invited to the colony of Virginia in 1712 to teach his methods to slave owners there. The term "lynching" is derived from his last name.

He advised slave owners to foster division, "fear, envy and distrust for control." Pit young versus old, light skinned versus dark skinned and most importantly, male versus female.

In a section called "The Breaking Process of the African Woman," he advocated shifting her dependency from the African male to the slave owner. This is achieved by beating and humiliating the male in front of the female. Then, beating the female if she doesn't get the message. This instills a kind of frigidity.

"We reversed nature by burning and pulling a civilized nigger apart, and bull whipping the other to the point of death, all in her presence. By her being left alone, unprotected, with the male image destroyed, the ordeal caused her to move from her psychological dependent state to a frozen independent state. In this frozen psychological state of independence, she will raise her male and female offspring in reverse roles."

"For fear of the young male's life she will psychologically train him to be mentally weak and dependent, but physically strong. Because she has become psychologically independent, she will train her female offspring to be psychologically independent. What have you got? You've got the nigger woman out front and the nigger man behind and scared. This is a perfect situation of sound sleep and economic."

She will teach her female offspring "to be like herself, independent and negotiable (...we negotiate her at will.)" She will raise her "nigger male offspring to be mentally dependent and weak, but physically strong, in other words body over mind."

"We will mate and breed them and continue the cycle. This is good and sound and long range comprehensive planning."

Sound familiar? We recognize these patterns in the US Black community, and, thanks to the hidden agenda of feminism, increasingly in the White.

AVOIDING SELF CORRECTION

"Willie Lynch" starts to sound like the Cabalist author of "The Protocols of the Elders of Zion."

"By reversing the positions of the male and female savages, we created an orbited cycle that turns on its own axis forever.." But "our experts" warned us of the danger that the mind might correct itself "if it can touch some substantial historical base." They advised us to "shave off the brute's mental history and create a multiplicity of phenomena of illusions, so that each illusion will twirl in its own orbit, sometimes similar to floating balls in a vacuum."

I haven't heard our society described better. Our collective identity (race, religion,nation and family) is being systematically erased and replaced by air. Lynch goes on to promote interracial breeding so the slaves are different shades of color befitting different levels of labor "and different values of illusion at each connecting level of labor."

"Cross breeding niggers means taking so many drops of good white blood and putting them into as many nigger women as possible, varying the drops by the various tones that you want, and then letting them breed with each other until another cycle of color appears as you desire."

In Orwellian fashion, Lynch concludes by stressing the importance of creating a new language befitting slavery. "We must completely annihilate the mother tongue of the new nigger..."
Again sounding like a Cabalist, he says, "language is a peculiar institution. It leads to the heart of a people. The more a foreigner knows about the language of a country the more he is able to move through all levels of that society. Therefore if the foreigner is an enemy, the country is vulnerable to attack or invasion of a foreign culture."

For example, the slave should learn the term "hog pen" but never "house."

CONCLUSION

Some people think this speech is apocryphal. The language has been modernized. Was the term "nigger" used in 1712? However, Blacks seem to think the speech is genuine. It is on many Black websites.

The point is that we are being socially engineered to be slaves in much the same way as Blacks were, and by the very same people.

The modern female has been "frozen psychologically" and now depends on the slave owner (government, corporation) for her security. The modern male is emasculated, strong in body but not in mind, grateful to be allowed to serve a master, who often is a woman.

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Mainers Repeal Gay Marriage Law...

nobody@vox.com(Wilford Tibbetts) — Wed, 04 Nov 2009 09:37:33 -0800

Maine-Yes-on-One

Bangor Daily News - our newspaper for Downeast Maine - is reporting that Mainers voted to reject the law passed by the State Legislature earlier this year yesterday. It seems Mainers have decided they won't move into the 21st Century yet.

With 87% of the votes in, 53% voted "Yes" on Question One, while only 47% voted "No". A very close vote, to say the least. Which, to me, shows that not all Mainers are against equality for all Maine Citizens.

No doubt we will have to rehash this again in another couple of years. As those who believe in equality here in Maine won't rest until Gay Couples are given the same equality under the law as Straight Couples.

The rest of the Initiatives on the ballot were as follows:

Question's Two(excise tax) and Four(Taxpayer Bill of Rights - TABOR) were defeated.

Question Three(repeal of the school consolidation law) rejected.

Question Five(Medical Marijuana Law) passed.

Question Six(Transportation Bond) passed.

Question Seven(to change the State Constitution) defeated.

And there we go. That is how Maine voted this year. Some of the results I'm happy about, others I'm not, but that's how it works. The people of Maine spoke with their votes, and that is the end of it - at least until the next Election.

Until next time...

-Wil

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GLENN BECK-AMERICAN HERO

nobody@vox.com(ken) — Mon, 02 Nov 2009 18:06:30 -0800

Glenn-beck

who is this guy,why does everybody love him or hate him.i never really watched him until all the liberals started to talk about him,and i said so what he's a political p.t. barnum,nothing special,nothing new.but the more i watched the more i liked,back when bush was president this guy was always pointing out bush's mistakes,talking about freedoms,talking about smaller goverment and the constitution as a guiding light.now that obama is president he's become even bigger and talks more about the excess of goverment.he helped start the tea party movement,he spearheaded the investigation of van jones.when the tapes came out about acorn helping to set up bordellos,complete with under age central american prostitutes and advice on how to smuggle them into the country,it was on glenn becks show first.who is this guy,is he like the white house would have us believe just a tool of the republican party,or is he something more then that.is he just a guy on t.v. that likes the truth.you all remember the truth don't you,its what we used to expect from t.v. broadcasters.even a year ago people like olbermann and beck were seen as the people to go to to hear about the waste and lies in goverment,then obama hit the seen,and most reporters forgot about their jobs as the people who looked out for us,the people who took a look at public people and pointed out when the emperors were wearing no cloths,now beck stands alone, the one voice that says the emperor has no cloths..he hasn't bowed to him like that idiot from abc,he doesn't get that glassy eyed faraway look when he mentions obamas name,he hasn't permanently attached his lips to obamas backside like olbermann..he's still out there telling the truth,pointing and saying,hey look thats wrong.. if thats not a american i don't know what is.maybe someday you or one of your children wil get the glenn beck award.and it will be a real award,not like the edward r. murrow award that scum like olbermann can get.not like the pulitzer prize thats awarded to the person who can say the mostanti- american things without being arrested for treason.not even like the peace prize that gets awarded for what you might do.but a real prize thats awarded for speaking the truth,for seeing something wrong,something broken,something so completely anti-american,and anti freedom,that he just has to speak up, he just has to say something.The glenn beck award.now theres a award that most people would want and treasure. a award thats given for speaking the truth,a pro american award,a freedom award,a pro humanity award.THE GLENN BECK award.

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May 10, 2009

Don't be hatin'

Feminism is Key to the "Making of a Slave"

Mainers Repeal Gay Marriage Law...

GLENN BECK-AMERICAN HERO