Rebane's Ruminations

Administrivia - RR hacked

George Rebane

Recently RR has been getting more and more spam comments from surreptitious merchants and other low-lifes.  I understand this often happens when a blog starts generating good numbers.  It takes some doing every morning to clean them out.  I'm not sure what to do about it but I have pulled the switch on requiring commenters to sign in.  I don't know whether that is better than my mediating the comments, I will try that next.  Please let me know (gjrebane@gmail.com), and thanks for your patience.

Pay Gaps and System D

George Rebane

Frankly, it’s a bit eerie how the events long predicted on RR are ticking off as recently having happened, or about to happen.  Here I want to focus on the infamous pay gap of the American worker, and an economic activity that is hard to track, but globally significant.

Income comes in two forms – wages and profits/interest.  As has long been argued here, the pre-Singularity years are illuminated by worker productivity abetted by screaming technology advances.  Using new gizmos and software, today a worker can make more and/or service more per unit time than yesterday, and even more tomorrow.  Given that the size of the markets requiring new stuff and services is not growing as fast as productivity, the result should be predictable for people who think.

Bob Crabb Nails Christmas

[This cartoon by Nevada County's irreverent interpreter of all things human and RR regular, RL 'Bob' Crabb, appears in its usual slot on the Tuesday opinion page in the 13dec11 Union (here).  I just had to filch it for readers who might otherwise have missed this precise pique through the heart of the perennial political season.  gjr]

The Systemic Train Wreck of the American Middle Class

George Rebane

“The truth is that we don’t know how to fix the US labor market – we are in uncharted territory,” says Peter Orszag, Mr Obama’s former budget director, now a vice-chairman of Citi. “It would help to spend more on retraining and on infrastructure and to have a more rational immigration system. But these wouldn’t fundamentally transform the situation for the middle class ... It is not yet clear what, if anything, could.”

This is how Edward Luce concludes ‘Can America regain most dynamic labour market mantle?’ in the 11dec11 Financial Times.  The article itself presents an excellent analysis of the systemic problems in the American workforce which have long been delineated in these pages (to a blizzard of reproach and denial from our Leftwing readers).

While President Obama and his liberal congressional cadres are out there demagogging the decline of the middle class as the fault of capitalism and the Republicans, the inescapable facts point to much deeper and more serious reasons why our middle class workforce is in irreversible decline.  None of it, of course, will make a dent in the herd of voters who are convinced that it is the system that is working against their right to sell for ‘fair wages’ whatever marginal or worthless skills they have left in their kit.  Such is the sum and stuff of populism.  But in a deeper sense they are right – it is ‘the system’ of 21st century Earth that is definitely against them.

And as Orzag eerily echoes the 1939 lament to Congress of FDR’s SecTreas Morgenthau (“… we simply don’t know what to do.”), no one has a plan to reverse this fundamental trend - it is not certain that such a plan even exists.  And by that I mean that neither the Republicans nor Democrats have put anything on the table, or discussed in their vaunted think-tank journals anything that softens the inevitable impact of advancing technology and a competitive global workforce on the expanded panoply of ‘rights’ on which the American worker has come to believe he has a perpetual draw.

Before the developed western countries do stabilize in some new competitive arrangement within the global economy, then to the extent that each of us got into socialized hock there will be hell to pay.  But then you already knew that, didn't you?

‘Tis the politically directed shopping season

George Rebane

A correspondent sent me the following information about which retailers support which political parties in the country.  You wouldn’t want to shop in the wrong place now would you?  Brought to you in the spirit of the season as a dispute-free and modest public service.

With the holidays upon us, we might wish to be mindful of what political party businesses donate to, as reported by the Center for Responsive Politics.
 
Shopping?
 
Price Club/Costco donated $225K, of which 99% went to Democrats
Rite Aid, $517K, 60% to Democrats
Magla Products (Stanley tools, Mr. Clean), $22K, 100% to Democrats
Warnaco (undergarments), $55K, 73% to Democrats
Martha Stewart Living Omnimedia, $153K, 99% to Democrats
Estee Lauder, $448K, 95% to Democrats
Guess? Inc., $145K, 98% to Democrats
Calvin Klein, $78K, 100% to Democrats
Liz Claiborne, Inc., $34K, 97% to Democrats
Levi Straus, $26K, 97% to Democrats
Olan Mills, $175K, 99% to Democrats
 
WalMart, $467K, 97% to Republicans;
K-Mart, $524K, 86% to Republicans;
Home Depot, $298K, 89% to Republicans;
Target, $226K, 70% to Republicans;

3M Co., $281K, 87% to Republicans;
 Hallmark Cards, $319K, 92% to Republicans;
Amway, $391K, 100% Republican;
Kohler Co. (plumbing fixtures), $283K, 100% Republicans;
B.F. Goodrich (tires), $215K, 97% to Republicans;
Proctor & Gamble, $243K, 79% to Republicans
  
Hungry?
 
Sonic Corporation, $83K, 98% to Democrats
Triarc Companies (Arby's, T.J. Cinnamon's, Pasta Connections), $112K, 96% to Democrats
Pilgrim's Pride Corp. (chicken), $366K, 100% Republican;
Outback Steakhouse, $641K, 95% Republican;
Tricon Global Restaurants (KFC, Pizza Hut, Taco Bell), $133K, 87% Republican;
Brinker International (Maggiano's, Brinker Cafe, Chili's, On the Border, Macaroni Grill, Crazymel's, Corner Baker, EatZis), $242K, 83% Republican;
Waffle House, $279K, 100% Republican;
McDonald's Corp., $197K, 86% Republican;
Darden Restaurants (Red Lobster, Olive Garden, Smokey Bones, Bahama Breeze), $121K, 89% Republican;
 
Traveling and/or dining?
 
Hyatt Corporation, $187K, 80% to Democrats
Marriott International, $323K, 81% to Republicans;
Holiday Inns, $38K, 71% to Republicans.

Ruminations - 11dec2011

George Rebane

People are asking whether Obama has become irrelevant.  My answer is an emphatic NO.  As long as he is in office, President Obama will remain a loose cannon impacting the fate of our country with his jaundiced ideology of an America destined to disappear into the woodwork of a new global order.  I agree with Gene Healy (Cult of the Presidency) that Obama sees himself as a “redemptive president”.  Healy observes that “the problem with ‘redemptive presidents’ is that when they fail to deliver national redemption, they invariably demand more power for the task.… Decades of longing for a national redeemer have turned the presidency into a constitutional abomination: an office that promises everything and guarantees nothing, save public frustration and the steady growth of federal power.”

You already know that the feds want to know who has what guns.  Now infowars.com reports that the feds are starting to compile lists of who has bought and is storing food for longer term emergencies.  This is all coming out of our Dept of Homeland Security and FEMA, and revolves around the implementation of two presidential executive orders, EO10999 from the Kennedy era which was rolled into the more comprehensive EO12919 (pdf here) signed by President Clinton.  Now your IQ has to be lower than that of a 2by4 with a face painted on it if you don’t believe that the purpose of compiling these lists is for the government (or its para-military FEMA) to confiscate your guns and food and/or criminalize your possession of them at some future time of their liking.

Iran has an RQ-170 US reconnaissance drone, that it claims to have brought down.  US officials confirm their possession of the UAV, and that it contains the latest and greatest surveillance gear that we have.  The aircraft clearly made a controlled soft landing, and now the mullahs have some serious hard capital to trade with the Russians and Chinese, further weakening what have already been ineffective sanctions against the biggest sponsor of ragheads in the world.  Obama refused three different scenarios to either recover or destroy the RQ-170, stating he didn’t want to really piss off the Iranians.  But what hasn’t been discussed, and what I have brought up locally with aviation professionals, is why this extremely valuable UAV was operated in a mode that caused it to default into a controlled landing when over enemy territory.  As a military systems guy with some experience in these matters, the first thing I would prescribe as SOP in such cases is that its default response to an emergency or control compromise is nose down and maximum throttle.  Neither the media nor the Repubs have yet to pick up on these dual lapses in operational protocols and the more serious command response.

The President’s Osawatomie speech revealed his 2012 campaign strategy along with his continuing assessment that his far Left base is stupid.   Since he can't point to any successes, he will now wage class warfare at the most regressive level, starting by painting a picture of America as a static society with the rich as always rich, and the poor as always poor.  This 12th century state of medieval Europe is a common antithesis with which progressives have always painted our country.  Now Obama is re-dredging it as his flagship idea for the campaign.  And, of course, the other half of his message is that bigger government is the necessary leveler to bring about the great age of collectivist social justice.

It’s hard to see why Attorney General Holder should not be impeached and prosecuted, or simply fired for incompetence on the ‘Fast and Furious’ gun walking case.  The man claimed ignorance of that farcical operation by stating that he had not read the emails from his direct reports that informed him of the operation.  Grant him a pass on perjury, but then nail his butt for being terminally incompetent in operating an agency as complex as the DOJ.  If he can’t even set up inter-office communication protocols through which he can be reliably contacted in such important matters, then he is simply incompetent and Obama should relieve him.  Don’t hold your breath.

On the wrong side of the tipping point

George Rebane

[This is the submitted version of my regular Union column that appears in the 10dec11 edition of the newspaper’s print edition and here in its online edition.]

Our leadership has committed to take the country down the Hugo Chavez path.  Last week Venezuela’s portly leader shouted “Socialism, socialism, and more socialism!” as the solution to his country’s mounting economic and social problems.  While our president can’t use those exact words, he does promote the policies that will get us to the same place.

It was American socialist Upton Sinclair who in 1951 said, "The American People will take Socialism, but they won't take the label.” – the Left has made this their watchword ever since.  Today the socialist will accuse anyone of name calling if they dare call him that in an open forum.

Europe is now roiling in the inevitable throes of socialism.  Recently its voters have sought to tilt their governments to the right, but it is too late.  The decades’ long doses of government handouts and entitlements have made European addicts by the tens of millions.  And like addicts, they fear the cure much more than delaying their next fix, no matter how that worsens the inevitable reckoning.  But the death spiral of Europe’s eurozone, and perhaps the EU itself, is not reported by the media by using the true name of the dreaded disease.

So in America, half of our politicians continue to sell dope to masses of voters that are already hooked.  And they tell those of us addicted that there is nothing to worry about the cost of all that social narcotic being pumped into our welcoming veins.  It makes us feel good right now, and it will continue to be paid for through the never ending loans from our global storefront lenders.  The best part is that we addicts will never have to pay it back.  Incredulously you ask, how does that work out?

The answer, we are told, is that we’ll get the rich to pay off the loans some day.  And when they run out of money or just run out, we’ll have (wink, wink) other means.  Well, the rich will not have enough money.  And the same lenders are already telling Europeans that they don’t want to throw good money after the bad money which countries like Greece, Italy, Spain, Belgium, …, and even France will never pay back. 

All this has finally caught the attention of the drowsy analysts at Standard & Poors – remember those guys who gave corporations about to fail top AAA ratings the night before.  S&P has now put the world on notice that Europe may not be as creditworthy as its lenders, many already sporting 50% haircuts, continue to hope.  So the people who today lend 40 cents of every dollar our government generously spends, they are saying that the AA+ downgrade America now wears is beginning to worry them.

And here’s where the ‘wink, wink’ comes in.  Since there is no way that we can, or even have the will to work ourselves out of debt, we’re going to stiff our lenders.  And we’ll do it with freshly printed worthless dollars that add up exactly to the amounts owed everybody.  We are not going to default on our loans, no sirree; cause we’re Americans and we pay our bills.

Now some of you may protest and say that we’re going to do the right thing – cut spending, raise revenues through a new tax code, get our workforce re-trained, and put our shoulders to the wheel – and then hold a big national celebration when our are accounts are cleared.  Not even close.

No such plan exists on God’s green earth, and no politician would dare put one forward if it did.  But that’s not even the bad part.  The bad part is that along with the Chinese and other lenders, we will screw ourselves when we print our way out of debt.  Yes, the accounts will be cleared, but so will our pocketbooks, retirement accounts, and our wealth-generating economy to boot.  And none of us addicts have the gumption to do anything about it.  Do we?

So look around you today, this is the view from the other side of the tipping point – a firm and unshakeable belief that we’re not on the wrong side yet, and that the cavalry will come charging from over that hill yonder to save us all.  Oh yes, anyone who says differently will be tarred and feathered to nip such fear mongering and foolish reports in the bud.  That’s the spirit.

George Rebane is an entrepreneur and a retired systems scientist in Nevada County who regularly expands these and other themes on KVMR and Rebane’s Ruminations (www.georgerebane.com).

Taxing the 1%

George Rebane

We wake up every morning to National Progressive Radio.  Listening to NPR is one of the many outlets we monitor so as to avoid the echo chamber effect of having others just adding to our confirmation bias (q.v.).  In the last couple of weeks NPR seems to have turned the heat on the Republicans, being more blatantly biased than usual in how it supports the Administration and Democrats.  This morning its mission was to repeat the progressive line that increasing taxes on people who create jobs does not affect their efforts to create jobs – a line in tune with 0bama’s current campaign to maintain the payroll tax relief and ‘pay for it’ by more taxes on the 1% - a kind of consistent theme that ranges from the screams of the street idiots, across the congressional Democrats, all the way to the Oval Office.

So NPR wound up sticking its mike into the faces of three fat cat Democratic contributors who run businesses to ask them about the effect of increasing their taxes.  Each dutifully explained that their own marginal tax rates had no effect on whether they decided to hire or not.   You have to know something about businesses to have understood their answers.  You see, each of these worthies ran outfits that hired educated white collar workers to do intellectually demanding contract work for high end clients.  When they sold a contract, then they hired more people if the work load called for it.  Of course their own marginal income tax rate would not enter into the decision – the new work provided marginal revenues which paid for workers, handled the marginal overhead, and dropped more profits to the bottom line.  The risk of hiring for them was essentially zero.

US 'Budget' 2010

‘You’re doing poorly because some other people are doing well.’
Class warfare litmus message

George Rebane

The following slides were sent to me by an RR reader who is also one of my Washington correspondents.  The title's semi-quotes draw attention to the fact that during 0bama's term there has been no budget passed in the normal sense of the word.  These graphics were prepared by the office of Representative Vicki Hartzler (R-MO) from OMB/CBO data.  The amounts and relative sizes of the revenues and expenditures for FY2010 are 'close enough for government work', at least the kind that we debate on these pages.  In any event, they are a clear presentation of the data, and are worth a close look for understanding our current fiscal situation.

Kakistocracy Rising (updated 10dec2011)

“Fathom the stupidity of a Government that will require every citizen to prove they are insured……but not prove they are a citizen”

George Rebane

Today we are reminded again that there are legally sane people out there among and even ruling us who believe that doing the same stupid thing which caused their problems in the first place are worth doing over again in order to solve them.  Both New York and California are vying for the ‘Economics Idiot of the Century’ award by attempting to cure their economies and budgetary ills in one swell foop by raising taxes on their residents.  Given that both states are union ruled, any serious economic reform is out of the question.

And, of course, the advertised source of the new tax revenues is those ever evil ‘rich’ who already pay the lion’s share of the states’ taxes, and whose unreliable income streams and ready defections to more suitable tax climates have left New York and California high and dry.  California especially is hurting because our dumbed down electorate is already way beyond the Peter/Paul Principle tipping point.  And Moonbeam knows this as he prepares the state’s tax increase to be voted on by the Golden State’s gimmes.  It’s a lead pipe cinch that the initiative will pass because it will be promoted as part of the national ‘fair share’ and new progressive taxes campaign that 0bama has been preaching from the pulpit.  (More details on these dual tragedies here)

Speaking of President 0bama, the man again made it official yesterday in Kansas when he clearly touted his “progressive administration” as the saving grace of the nation.  For the last several years on this and other blogs we’ve noted that our neighbors on the Left continue to accuse those using ‘progressive’, 'liberal', and ‘socialist’ to label their political behavior as launching ad hominem attacks using dirty words.  It is hard to tell where one should restart their educational process.  No attempts on these pages have made any impact.

Kakistocracy?  That’s a delightfully useful word that means “government by the worst persons; a form of government in which the worst persons are in power.”  When it comes to pursuing ignorant and unproductive policies, it’s hard to think of a worse dynamic trio than 0bama, Cuomo, and Moonbeam leading their jurisdictions to ruin.  (BTW, 0bama is spelled with a zero isn’t it?)

[8dec2011 update]  The Jon Corzine farce is playing out on its own.  As he stands in front of Congressional committees attempting to deflect the blame for MF Global’s collapse and the mysterious disappearance of $1.2B of investors’ money, he displays himself as a man of comprehensive incompetence in both his political and professional lives.  He is detached from the goings on of operations in which he should have had both hands on the wheel.  The man made his bones by dodging and weaving and being endorsed by other significant know-nothings into positions that allowed him to assure his ascendancy by writing big checks to politicians in power.  But all that is neither here nor there.

To continue the theme of this post, we have to recall the kinds of people our experience-free President has surrounded himself with.  The point in fact is that Jon Corzine was another example of candidates for top jobs.  Corzine and Geithner were both on the SecTreas shortlist.  Given Geithner’s record, I’m not sure that Corzine would have done worse.

[10dec2011 update]  Another semanticist and RR reader included this contribution to the present theme.

Finally, a way to describe Obama and his voters.

Ineptocracy (in-ep-toc’-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.