Rebane's Ruminations

Ruminations - 31may12

George Rebane

As a continuous lament on these pages, the country’s lack of technical talent is now reaching new lows.  We hear that “On college campuses these days, the top nerds are getting a taste of what it's like to be star jocks.  Companies big and small are going on school campuses to hire undergraduate tech majors, offering outstanding compensation packages and stock (more here).  Meanwhile tens of thousands of PhDs holding degrees in latino studies and women’s public policy are on the dole, with more arriving daily.  All of this is lost on the country’s liberal contingent.

Sex selective abortions are giving those feminists who understand things a bit of a problem.  There’s a bill in the House that would prohibit such abortions done for the sole purpose of getting a kid with specified outside plumbing.  It turns out that minority women are in the overwhelming majority who request such government sponsored genocide services.  Since such killings are the most basic form of gender bias, what’s a dyed-in-wool leftwing feminist to do?  Opposing the bill would be blatant hypocrisy, yet supporting it would deny the federal dole to clinics that do this kind of thing.  And it didn’t help that someone made a video of a woman having a very understanding interview with a worker in one of those abortion clinics.

The descendants of Lenin’s “useful idiots” are still parroting the denial of government worker pensions as the main cause of fiscal failures of local jurisdictions in America.  Now we hear that Mayor Rahm Emanuel has finally seen the brick wall after having gone splat against it in Chicago.  As the WSJ reports, in Illinois “Many teachers don't pay a penny toward pensions but can retire at age 60 with an annuity equal to 65% of their final salary plus a 3% annual compounded cost-of-living increase. The state's pension bill, which has quadrupled in five years, consumes all $7 billion of additional revenue from last year's income and corporate tax hikes. Even so, the pension funds are projected to go bust in a decade.”  So now that he has executive responsibility, the former Obama chief of staff is singing a different song titled “Illinois pensions are breaking my city.”

We Remember - 28 May 2012

George Rebane

Today we remember and honor the military service men and women who died for us, and those who have yet to come home.  We sent them into harm’s way to keep harm away from us and our loved ones.  They went willingly again and again to do the work of war with the belief, and sometimes only hope, that their country was behind them.  (continued)

Dear Reader, that was the opening to my last year's Memorial Day post.  Since I can't improve on it, I will simply recall your attention to those sentiments which are even more appropriate today.

The Liberal Mind – Profits vs Jobs

        'Tax rates have no effect on the behavior of the taxed.' - deeply held liberal tenet

George Rebane

This week President Obama made another extremely important statement that reveals his understanding of how the world works.  At a campaign stop he took Romney's credentials to task, doubting that anyone who has focused on business ventures like reorganizing companies for the purpose of making a profit is suited to be President of the United States.  The better recommendation for such a candidate would be to have focused on creating jobs.  On hearing this I could not help but go slack-jawed.

To be sure, it is a tragedy to have such ignorance (or perfidy?) resident in the chief executive of a putatively capitalistic country, but the portents of making such a statement to the electorate should be our real concern.  Obama spoke those words knowing that a large fraction of voters would agree with him simply because of his position, abetted by their inability to understand the basics of economics beyond their own spending habits.  In other words, the man knowingly pandered to the complacantly ignorant.

The correct message should have been that in free markets all businesses are created to make a profit, and when successful, such enterprises also create jobs.  No business is started for the purpose of creating jobs.  You have to be successfully shielded from reality or just plain dumb not to know that labor – i.e. a job – is an element of cost that makes any product or service more expensive to the customer, makes the business less competitive, reduces profits and the ability to grow, and jeopardizes the survival of the company.  In short, a successful business does its best when it minimizes the jobs needed to function profitably, and thereby best guarantees that the jobs it does provide will be the most secure.

It is only the collectivist state with its twisted ideology that sets up organizations, which employ cadres of inept and inefficient workers to impede the increase of wealth and the quality of life for the most people.  And the collectivist state does this without regard to the unsustainability of the entire scheme, counting on increasing the wholesale level of equally applied misery to mask any alternative approach to creating and distributing wealth.  This is what our President has been successfully selling, and through his cadres, successfully imposing on the country.

Part and parcel of such a downward spiral is the notion of a nation, up to its eyeballs in debt, spending its way to economic recovery and wealth.  The Greeks are now demanding to spend more, instead of tightening their belts from profligate borrowing and spending.  The French just voted in a socialist who promises to put their country on the same road.  Spain and Portugal are ready to sign on.

This entire approach was recently given a mind-boggling justification by Hannes Swoboda, a member of the European Parliament and president of the Progressive Alliance of Socialists and Democrats in that ‘august body’.  In his ‘Europe Can Spend Its Way to Growth’ (21may12 WSJ) he advances some economic prescriptions for the EU that have yet to work on this third planet from the sun – nevertheless, member countries are exhorted to throw themselves into the breech one more time.

First and foremost, he recommends compelled borrowing by states and businesses for the purpose of job creation.  This, of course, requires some mysterious compelling of lenders, since prospects for profits that assure a payback are neither apparent nor a necessity.  He then appeals to la-la-land accounting to dictate that such debts “should not be integrated in calculations of structural deficits and hence be punished because (somehow) investment in growth generates income and taxes, and therefore revenues for the state.”

To achieve this new level of unsustainable indebtedness, Swoboda argues that “European institutions should enact legislation that requires all members to make public investments in growth and employement.”  A staple of economic activity in this direction is to re-ignite the efforts that “would finally lead us onto the path toward a seriously environment-friendly economy.”  This in the face of the disastrous recent history that EU countries have experienced in their pell-mell charge into green industries, an experience which subsequently caused everyone to beat a hasty retreat in order to save their national fiscs.

How will all this be accomplished?  Swoboda’s sure-fire approach spells out that “these additional investments need to be financed, one way or another.”  (No kidding, you can’t make this stuff up.)  And just to make sure that capital has every impediment to moving into its most productive use, he prescribes a new “financial transaction tax".   On top of that, the EU would establish additional regulations to “fight against tax evasion” which then would “channel additional funds into national treasuries.”

To put a nice bow on it, we can now all do a little anticipatory happy dance because “once growth takes off, tax revenues will start flowing.  Tax policy that favors lower-income classes and better regulation of financital markets would (then) already be fostering growth.”  Now, do you see how easy all that would be?  And do you finally understand why Team Obama wants to take us down that same road once “after (his) re-election (he) will have more flexibility”?

Ruminations - 21may12 (updated)

George Rebane

President Obama’s background and biography is throwing people for another loop – at least those with their heads still exposed to the sun.  Who knows where the man was actually born?  Who knows what actually happened in South Chicago?  All we know is that the Washington establishment (both parties) and the lamestream don’t want to go there, no matter what is discovered under newly turned over rocks. 

And Obama’s ‘autobiographies’ will now have to be re-cataloged under fiction.  The disparities from truth are becoming so easy to document that a high school sophomore could do it for her term paper, if only her teacher would countenance such research.  PJMedia, Breitbart, and Drudge, along with some local blogs, have been having a field day on the new revelations about the background of our fearless leader.

Everyone with an ability to buy popcorn at a movie should now understand what a private equity firm like Bain does and did when Romney was there.  Especially revealing is the Left’s celebrated cause of telling the country that Romney and company bankrupted GST Steel and destroyed 750 secure long-lasting jobs; worse, sent them overseas to cheap steel makers.  ('Bain Capitalism 101')  Ol’ Joe can say it best of all from the Team Obama side.  Their lies are understandable, but the puzzle remains as to how well such lies work with the Left’s constituents.  A lot of these must be the parents of kids like those in Florida who flunked the state’s reading test. The answer’s gotta be in the double helix.

Illegal Aliens + IRS = Tax Fraud

George Rebane

There are over two million illegal aliens in America, overwhelmingly from Mexico.  Now it turns out that an additional draw for such illegals has been the ability to blatantly defraud the American taxpayer with the help of our compliant IRS.  The entire scheme involves filing the 1040 tax return using an IRS-created ITIN (Individual Taxpayer Identification Number) that was supposed to allow working illegals without an SSN to still pay taxes on their earned income.  (This stuff is hard to make up.)

Well, the damn thing backfired years ago when the illegals discovered this ‘loop hole’ (aka fraud) that allowed them to claim refunds for children supposedly living with them that were members of their larger families.  The refund is the Additional Child Tax Credit.  So tax returns with ITINs started being submitted by the hundreds of thousands and more, each with a list of kids on them who were nieces and nephews to pad the ACTC list on their 1040s.  Adding to this insult is that the kids don’t even live here, but are still back in Mexico.

The refunds are huge.  Individuals get back thousands of dollars apiece.  The total taxpayer bill comes to over $4.2B annually, year after year.  And no one at the IRS wants to fess up or talk about this fraud that has been known to them for years.  To show how dysfunctional our government is, even the US Treasury Department’s Inspector General has investigated and written reports about this abuse, and reported it to the IRS, all to no avail.  (more here)

None of the illegals feel bad about doing this because the ACTC is simply another commons added on top of the Great Commons of America which they already hold in contempt, and in which they live as fugitives from an inept and corrupt government headquartered in Washington DC.  (H/T to a correspondent.)

Placebos vs Big Pharma

George Rebane

A recent ’60 Minutes’ surprised me with a segment in which it was reported that placebos worked just as well as drugs like Prozac for fighting depression – well, almost as well.  Prozac did have a tiny edge in really severe cases of depression.  The research was done by Dr Irving Kirsch of Harvard, and it has reignited a firestorm of debate as to what real effect do many expensive big pharma concoctions have over sugar pills.

The power of the human brainbone to gin up alternative realities has been known for decades.  In the Greece of pre-Dorian invasions the gods regularly conversed with individuals and even attended public events such as weddings and other celebrations.  Everybody saw them and corroborated each other’s experiences.  In the middle ages and later, people actually saw witches fly on broomsticks, and believed such sightings to be as reliable as seeing clouds in the sky.  In the modern age anthropologists have discovered and studied a tribe in Papua-New Guinea whose known world has a boundary at a narrow river, the other side of which has always been invisible to the aboriginals.

Some psychologists have identified the responsible region of the brain for such hallucinations in the right hemisphere opposite Wernicke’s area (used in language processing).  In any event, most of us have heard some astounding stories and are aware of the power of placebos.  It all seems to revolve around the level of credibility (faith) we attribute to the sugar pills presented as medicine and administered by sincere and serious healthcare professionals.  And this effect seems to work in spades with anti-depressant medications.

But that wasn’t really what caught my attention in the TV segment.  The question that popped up was why did the FDA still allow Prozac et al to tout themselves as the clinically effective standard of care for depression.  The answer was that FDA’s approval procedures rate a drug effective, if it bests the performance of placebos in at least two properly conducted drug trials or studies.  It could fail to be better in, say, ten previous studies, but as soon as it racks up two victories over the placebo, it gets to go to market.

My instant reaction was ‘Wow! I didn’t know that.’  So if in a (double?) blind trial Prozac and a placebo are each given to two samples of 500 subjects suffering from depression, and Prozac is judged to effectively reduce symptoms in, say, 100 subjects, while the placebo equally reduces symptoms in only 98 subjects, then Prozac wins.  There was no requirement of statistical significance or any such technical niceties.  Two such victories, and the billions start rolling in.

The question then becomes, what kind of risk do big pharma companies take when bringing to market already developed, marginally performing medicines?

Message to Team Romney

George Rebane

Republican contender Romney is overlooking a key and compelling message to the voters.  He and his are just getting up to speed on, ‘Since Obama did not come close to meeting his first term promises of hope and change, and we are still in economic dire straits; what makes you think that Obama can deliver on the same promises during his second term?’

The real message that no one seems to be talking about in the pundit universe, and that has been totally absent in Romney’s copy is, ‘Since Obama did not come close to meeting his first term  promises of hope and change when his second term prospects still hung in balance; what makes you think that now in his second term he will keep those promises when he has no such requirement to deliver, and need let nothing stand in the way of implementing his twisted (aka ineffective, butt stupid, wrongheaded, socialist, …) ideology on America?’

Wordsmith it as you will, the logic of it is overwhelming, and this message should be heard from Republicans at all levels to the widest possible audiences until we vote on 6 November 2012.

Ruminations - 16may12

George Rebane

The bad news about Obamacare just keeps getting worse.  In addition to recent reports that colleges are dropping higher costing student health plans prescribed under the law’s provisions, we now discover that Obamacare puts a new excise tax on one of the remaining areas of job creating and innovation in which we still lead the world – medical device manufacturing.  It’s one of the few industries left that contributes to the positive side of our trade balance, and provides over 400,000 direct jobs and about two million indirect support jobs.  Here I’m talking about CT scanners, pacemakers, blood pressure devices, and even the new robots used in surgery.

In ‘Obamacare’s Killer Device Tax’ Dr Henry Miller writes that “the US leads the world in medical technology.  A punitive new excise levy jeopardizes jobs and innovation.”  Team Obama sees this industry as the next one it can attack in order to further disable American leadership in innovation and commerce.  Obamacare will impose a new add-on 2.3% excise tax on medical devices that kicks in next January.  This is a serious kick in the shorts because of the high regulatory cost of jumping through hoops, and the long accrual of sales revenues required before ROI becomes positive.  It isn’t that hard overseas.

And what happened to this year's five million new citizens that became of age and didn't bump the number in the workforce?  Lots of possible answers, "Or are more of the long-term unemployed becoming the never-again employed?"  The labor market participation has increased since the 1940s, then leveled and started going down around 2000, causing a lot of people to look for reasons.  My money is also on the govt worker retirees whose outlandish pensions came due, and made it easy to drop out early. Meanwhile on the campaign trail the Big Lie machine about how our economy is creating jobs under the Messiah is in full swing.  Daily the real news belies every bit of his empty braggadocio.

‘Testing is not Teaching’ is the growing cry of parents of minority kids across the country.  The teachers unions like NEA are joining in and asking that Congress roll back testing mandates that started under Bush2’s No Child Left Behind and were picked up by Obama’s Race to the Top.  The charges against testing range from being unfair to teachers, having arbitrary scoring levels, being poorly designed, to stifling the more creative aspects of education.  Teachers are accused of teaching to the tests, and they are not doing a good job at it.  Meanwhile other school districts are saying that their teachers have not changed their curricula, are not teaching to the tests, and that their kids are doing quite well on such tests.

I’m a proponent of standardized testing in core skill areas like reading, writing, and math.  Testing can also be useful in confirming what kids have learned in the hard sciences like physics and chemistry.  But things get squishier when you add in questions about sociology, literature, and even civics.  The opponents of testing don’t tell us about reliable alternatives for measuring how kids and teachers are doing in the learning and teaching of critical skills that underpin the ability to do well in all the other subjects, and in life.

For reasons that I don’t understand, the cost of testing has also gone up, even with the introduction of computers and other technology.  And that is part and parcel of the overall cost of education that is sky rocketing, again for reasons that both academics and economists are attempting to discover.  Over the years why does it cost more and more to turn out Susies and Johnnies who know less than ever?

And did you catch that some school children from LA are suing California for promoting a "statutory scheme" that keeps bad teachers in classrooms, especially classrooms in low-income schools.

Climbing Sugar Mountain.  Mark Zuckerberg’s baby is going to hit the merciless markets on Friday, and no one really knows what it’s worth.  Why?  Well, Facebook’s market cap will be based on “finding ways to make money that haven’t been demonstrated or articulated yet.”  No one is sure that ads on the social medium work, and dealing in the vast amounts of collected user data is an uncertain minefield.  And young Mr Zuckerberg has not exactly been sending strong signals about his concern for profits and acumen in being CEO of a public company, one that will be under intense scrutiny by everyone.  But what the hell - got a hunch, bet a bunch – after all,  people are saying that out the gate Facebook will be worth ten times as much as Google was at its IPO.

The Real Liberal Man

George Rebane

Social futurist(?!) Sara Robinson tells us the real meaning of Mother’s Day, and comes up with quite an analysis of men from both sides of the political spectrum.  Her ‘How the Ayn Rand-Loving Right Is Like a Bunch of Teen Boys Gone Crazy’ is a worthy sample of what sites like AlterNet.com and truthout.com are telling their own kind.  Again, it’s worth a read for our more conservative and libertarian readers to get a measure of the chasm, and also some perspective on the criticism from our more liberal readers clucking their tongues for merely being identified as collectivists or socialists or liberal or leftwing – all labels apparently of a pejorative nature when uttered in mixed company, and in the light of day.  H/T to a reader who definitely does not identify with the right, and yet is a bit embarrassed at the extremes her brethren and cistern (or is it sistern?) dish out.

Dufus Government – why we need to starve it

Government at its best is a necessary evil, and at its worst, an intolerant one. – Thomas Paine

George Rebane

The contradictory, self-defeating, and citizen oppressing behavior by government at all levels just added two more battle ribbons of stupidity to their banners.

The first is the latest outrage by the feds who deem marijuana consumption illegal across the country in contravention to 17 states which have pronounced it legal.  California is one of the 17, and Nevada County is currently in a white heat debate over its recently passed ordinance prescribing the cultivation of marijuana.

The ordinance is quite draconian, with sufficient measures of all hues in it that 99.44% of the county’s growers can be busted at any time at the discretion of local authorities.  And, of course, they can be arrested and indicted by federal authorities regardless of what California and our county permits.  Our local supes assure us to not worry about the ordinance; that unless you’re really really bad, no one will enforce it.  No such guarantees can be given about the feds.

Our congressman Tom McClintock joined with two other House members to introduce a bill that would remove funding for federal marijuana raids.  The bill failed miserably (262-163) with most Dems in favor, and only one in eight Repubs willing to back states’ rights (H/T to reader, more here).  Go figger, but don’t take too long, the problem is not that hard.  As I have long noted, the two cohorts in our society that would have the most to lose if marijuana progressed toward legalization are the drug traffickers and the drug enforcement authorities.  The trade is a cash cow for both, and neither wants the cops and crooks game to go unfunded and, God forbid, stop.  (History buffs will recall that for the same reasons the repeal of prohibition was equally opposed by the police and organized crime.)

Here in California our Governor Moonbeam made the easily predicted announcement today that none of the state’s past tax/fee increases, regulatory additions, green industries, …, none have produced the projected revenues needed to balance California’s so-called budget.  In fact, revenues have plunged enough to increase the recently announced $9B deficit to its current level of $16B.  Enough people have bailed and continue to banzai out of here to make a bad situation worse.

But the pullet pucky politicians in Sacramento are not done.  They have put their cross hairs on those wealth producers still here, and have decided that another round of tax increases is required to finally fix things.  Not having the character or courage to pass such an increase themselves, they have again thrown the measure into the referendum mill, hoping that we would be dumb enough to pass the increase this November.  One of the big lies, reported here before, is that some of the money will go to maintaining classroom services for our kids’ education.  Actually, the new tax money will go to shore up the egregious under funding of teachers’ union pension funds.  The kids will see no benefit.

Anybody willing to do a little wager on the amount of revenue shortfall the new tax increase will create if it passes?

So, dear reader, here is more conclusive proof that the fix-all remedy for government is simply to starve the beast while revising its legal code, abolishing rogue agencies, rewriting its tax code in toto, and returning rights to the states as exquisitely prescribed by our Founders.