Thank God; those towers are going to stand tall again and be a monument to freedom in our great country.
God bless America!
johngalt
14 years ago
I would have loved to have seen this start to happen quite a bit sooner, but at least progress is being made.
Zac
14 years ago
Maybe its the perfect time; the perfect time to honor our fallen countrymen by raising this tower, and maybe our enemy’s need to see what happens when you kill Americans, maybe; we the people are about to take our country back…
I’m not much of a believer in superstition but America is under attack from the inside, and we have just raised freedom tower? I don’t think that is coincidence.
Now, I don’t mind there being a mosque built there. Personally, I just wanted to get to a point where their puny little mosque sits deep in the shadows of the Freedom Towers.
I don’t know whose idea this was to let guns “walk” into Mexico from the US, and that includes .50 cal Barrett rifles, but the fact that some have been found at the scene of a Border Patrol Agent’s shooting is insane. One has to wonder how many other “walked” firearms were either used at, or found at, scenes of other Agent’s shootings.
blast
14 years ago
It is really outrageous that the Congressional Leaders, Speaker Boehner are not honoring Cpl Frank Buckles the last American who served in WWI by allowing his body to lay in repose at the Capitol.
In France when their last WWI vet passed, it was a national event. Here in our country we have no need for our old soldiers… this is a singular moment in our history and an opportunity for us to honor not only Frank Buckles service, but also reflect on the countless Americans who died protecting our freedom.
I hope the Speaker changes his mind and allows the Rotunda to be opened for Cpl Buckles.
Blast, hi, this portrait excactly where they are leaning toward, if they dont change their minds, they will deserve to be let go, on the next election, this is just one more insult on veterants to not forget, 2012
CURT, thank you, you acknowledge the important labor done almost, by the IRON MEN,
they said they would do it, and they did with their hard work and sweath,
what a difference it is compare with the leaders of this AMERICA, which haven’t accomplish nothing,
that the AMERICANS can feel proud of, but the IRON MEN did, and AMERICA IS PROUD OF THEM
I agree completely with your sentiments. Those who have given of themselves, to the country, should be respected beyond those respects traditionally given to mere politicians. They should be always held in the highest regard, with honors.
The great irony of it all is that Frank Buckles himself would probably wish the opposite for himself. Such are the values of those who truly deserve such an honor.
GREG, WE DID NOT MISSED IT, THERE ARE GOOD UNION WORKERS, AND GOOD SIDE OF UNIONS IF ONLY THEY WOULD ALL STAY WHERE THEY BELONG, AND NOT TRY TO RUN THE CITIZENS OF THE GREAT AMERICA, AND OBEY THE LAWS OF THE CONSTITUTION, AND NOT FORCE THEIR MEMBERS TO BECOME AND ACT LIKE THUGS AND DO THE WORK OF THE UNIONS WHICH GET PAY BY THEM
TO NEGOCIATE WITHOUT RUINING THE BOSS THEY ARE WORKING FOR, AND RESPECT IT’S EMPLOYER, NOT INSTIGATING HATE AND UNCIVIL DEMONSTRATION, THAT IS UNAMERICAN,
AND WONT GAIN NOTHING FROM IT ONLY SHAME
Missy
14 years ago
How clever:
These graphics were sent to the Wausau Tea Party from a Wisconsin County Employee. The employee received them via government emails in messages from an AFSCME Union Rep. The instructions were to put pressure on local businesses to make them aware that the unions are watching. “All public employees are being urged to look for this sign in business windows.”
From the Union Rep: “I encourage you to utilize your own business contacts and urge them to hang this prominently in their window. The explanation that I’ve found works best if they are apprehensive is that this is about local dollars, not politics. If our buying power is destroyed—their business will be affected adversely. Please let your area lead know which businesses you get to participate so that they might compile a list to distribute to the members.”
The County Employee also received an email with the Union “Business Card” and was instructed to “make copies of the business cards” and “distribute to each business where you spend money.
Copies of three of the signs and business card at site:
Has Obama and his love for all things union helped the recovery or held it back?
Just today I was reading that, AGAIN, the Davis – Bacon Act is being used by Obama to disproportionately benefit members of labor unions and their leaders.
All workers on federally supported construction projects must be paid “prevailing” wages in accordance with the Davis–Bacon Act, and these wages are higher than those in the competitive market. Such wages are common to union contracts. A recent Heritage Foundation study found that the Davis–Bacon Act increases the cost of federal construction projects by 9.9 percent and that its repeal would create 155,000 more construction jobs at the same cost to taxpayers.
James Sherk, “Why the Davis–Bacon Act Should be Repealed,” Heritage Foundation WebMemo No. 3163, February 22, 2011, at http://www.heritage.org/Research/Reports/2011/02/Why-the-Davis-Bacon-Act-Should-Be-Repealed.
Curt,
Not sure how to post this. It is an email I get on investments. I copied this from Porter Stansbury’s weekly comments. If it violates the copyright regulations, please delete it.
Porter has been telling subscribers about ” the end of America” as related to the position of the dollar in the world market. He describes some significant issues here:
How to Stop The End of America… A few secrets from Warren Buffett… The Project to Restore America …
Here I go again… By now, almost everyone reading the Digest knows we set aside Friday’s for me (Porter) to write personally. And though I’ve rejected the idea that people can teach anything (there is no teaching, only learning) – I can’t seem to help myself. If you’re tired of suffering through these lessons, you’ll be happy to know my impulse to empower our subscribers by showing them a few of the more unpleasant truths about finance has cost me a lot of money.
As I knew they would, my essays about the importance of cash and the one last week about asset allocation (when you buy what) resulted in a torrent of refund demands – about $1 million worth in the last two weeks. So if you got something out of those essays, do me a favor: Buy something. Anything. Preferably something expensive.
It is a quirk of human nature that most people don’t want to learn anything new and react negatively to anyone who challenges their deeply held views (even when they’re obviously wrong). You’ll know I’m truly a glutton for punishment when you realize the subject of this week’s Friday Digest: Our country’s severe financial crisis.
Writing about this topic has led to far greater problems than cancellations. I’ve gotten threatening letters and angry e-mails from folks who seem to believe that pointing out these dangers is tantamount to causing them.
More than two years ago (December 2008), I first warned in my newsletter that America would eventually lose its world reserve currency status and our debt crisis would lead to a massive inflation. I call this complex series of issues the “End of America.” Not because I believe it will lead to the end of our political union (though it might), but because I believe we’re heading into a crisis that will be far worse than anyone has yet realized. The crisis will result in a significant decline in our standard of living. These are deadly serious issues and I meant every word I wrote.
Even so, two years ago, lots of folks actually laughed at me – including a few in my own office. Not anymore. If you saw the Wall Street Journal headline yesterday (the “Why the Dollar’s Reign is Near an End”) or if you saw Sam Zell (the most successful real estate investor of all time) yesterday on CNBC, you know many of the smartest folks in our country take my warning seriously. Said Zell:
My single biggest financial concern is the loss of the dollar as the reserve currency. I can’t imagine anything more disastrous to our country… you’re already seeing things in the markets that are suggesting that confidence in the dollar is waning… I think you could see a 25% reduction in the standard of living in this country if the U.S. dollar was no longer the world’s reserve currency. That’s how valuable it is.
So today, I want to update some key figures of my End of America report. I want you to know where we stand. This is important enough to risk the inevitable criticisms (and refunds). But I want to take one criticism out of play right now. Don’t bother writing to complain about my “politics.”
This has absolutely nothing to do with politics. This matter is purely about economics. The facts, as you’ll see, are completely clear to anyone who bothers to learn them. We are spending way beyond our means – both publicly and privately. Worse, this spending has warped the incentives in our economy, resulting in not only debts we can’t afford, but outcomes we don’t seek. At the heart of this crisis, there’s a knowledge problem. Most Americans don’t understand even the most basic facts about our country’s financial position, nor do they take the time to consider the likely outcome of poorly structured government programs.
So please, don’t write to me about politics. I don’t care about the Democrats, Republicans, or even the Tea Partiers. I don’t care whose “fault” it is, because these debts belong to all of us. I care about the people who live in America… people who are going to be wiped out because of feckless leadership and genuine ignorance. I can’t do anything about our leadership – that’s up to you. I can try to do something about the ignorance.
In our search for facts and solid financial thinking, let’s start with Warren Buffett, who is neither feckless nor stupid. Buffett is the world’s best investor. He got that way primarily by figuring out how to correctly value equities and allocate assets… and because he learned one of the most valuable financial secrets in modern finance: why insurance companies are so valuable. (Hint: It’s the float. But that’s a discussion for another day.)
Buffett has become a sort of “rich uncle” to America, giving helpful advice about financial matters. And he recently said something that struck me as profound – something I’d wager almost everyone else ignored. Buffett explained why the buyers of his mobile homes (Clayton Homes) default at rates (1.86%) much lower than the national average for homebuilders (more than 25%). That’s true, even though the buyers of his mobile homes typically have low incomes, less job stability, and lower credit scores than the buyers of conventional housing. If you read nothing else in today’s Digest, please pay attention to what Buffett says here:
Our borrowers get in trouble when they lose their jobs, have health problems, get divorced, etc. The recession has hit them hard. But they want to stay in their homes, and generally they borrowed sensible amounts in relation to their income.
In addition, we were keeping the originated mortgages for our own account, which means we were not securitizing or otherwise reselling them. If we were stupid in our lending, we were going to pay the price. That concentrates the mind. If homebuyers throughout the country had behaved like our buyers, America would not have had the crisis that it did. Our approach was simply to get a meaningful down payment and gear fixed monthly payments to a sensible percentage of income. This policy kept Clayton solvent and also kept buyers in their homes…
… A house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.
Pretty simple, eh? Don’t sell houses to folks who can’t afford them. And make sure both the lender (who kept the note) and the borrower (who made a down payment – equity) have plenty of “skin in the game.”
You don’t want to create any incentive for the deal to go bad. You want both parties to have a powerful incentive to do what they’ve promised. After ignorance, almost all our country’s core problems come back to these same issues: a lack of equity and poorly designed incentives. Remember these concepts. You’ll see them again: skin in the game (equity) and properly designed incentives.
Let me take on the toughest problem first: Medicare/Medicaid. Since the government established this program in 1965, it has amassed a $5.6 trillion deficit. This program alone accounts for 40% of our government’s total debt. If you could erase these debts, our most recent two foreign wars (Iraq/Afghanistan), and the losses associated with the recent financial crisis, you could eliminate more than half our entire federal debt – a debt threatening to destroy our way of life.
Whether you’d choose to eliminate these debts by eliminating these programs is a political question. I’m not going to discuss politics here. The point I’m trying to make is, regardless of what you’d choose, we have to make a choice. We can’t afford to do all of these things.
Like the subprime buyers in the housing bubble, we’ve bought a government we cannot afford. That’s a simple fact. It should be obvious to any thinking person that when government spending makes up 45% of GDP (as it does today) and there’s one government employee for every six households, something has gone terribly wrong with America.
When my parents were born, America was still the land of the free. The incentives people faced were different. Before World War II, the federal government made up only 3% of GDP. It didn’t provide health care. People had to maintain their health, as best they could. People didn’t depend on Ponzi finance (Social Security) for their old age – they had to save. They had to take care of their families and help take care of the unfortunate in their communities.
We didn’t spend a lot on the military, either… which gave us an incentive to mind our own business. In fact, back then, our presidents promised to keep us out of foreign wars. Both Wilson and Roosevelt came to power promising to keep us out of the war in Europe. They lied. Almost every other president since has sent our boys to die for others wherever they could. War is good for business… and good for the government.
Lots of people reading this e-mail will say, “I don’t want to live in a country like that, where the government doesn’t provide a social safety net.” Other readers might say, “I don’t want America to be ‘isolationist.’ We need more troops overseas to fight terrorism.” OK… So maybe 3% of GDP is not enough for the government we will choose. But 45% of GDP is much too large – again that’s not a political choice; we simply cannot afford it.
So how then will we decide? My suggestion: Pay more attention to incentives. And demand much more equity from the voters.
Here are some interesting facts:
In 1965 – when Congress created Medicare/Medicaid and greatly expanded the federal government’s role in health care – about 13% of Americans were obese. Today, 32% of Americans are obese.
Before the government enacted Social Security, Americans typically saved between 15% and 20% of their incomes. Today? Almost nothing. In fact, for many years, the savings rate in America was actually negative.
Before the Great Depression, there wasn’t any government unemployment insurance. Not surprisingly, there was almost zero long-term unemployment.
One more interesting fact… the U.S. didn’t experience a Great Depression until the Federal Reserve was created. The main purpose of the Federal Reserve is to ensure that banks don’t fail. Sounds good. But it provides a perverse incentive for banks to act recklessly, which causes bigger booms and busts – just like the one we’re experiencing right now.
I’m not arguing government spending is the primary cause of any of these problems. But I am saying you’d have to be a fool to believe incentives don’t play a big role in human action. Think about why all politicians try to spend more than they collect in taxes. They have a huge incentive to promise more than they can deliver – and to make up the difference by borrowing against future taxes or printing more money.
The problems created by the perverse incentives of collectivist actions are well known. They are as old as the ideas themselves. They explain why socialism and communism always lead to failure. And yet… we seem eager to pursue these policies in an almost mindless pursuit of bankruptcy. Why? That’s not hard to figure out either.
What’s the No. 1 reason people make bad decisions? They don’t have to suffer the consequences. Which investors made worse decisions during the mortgage bubble? Was it the private hedge-fund managers, whose entire net worth was made up of the assets in their own funds and whose friends and families had invested alongside them? Or was it the senior managers of publicly owned banks, whose creditors were protected by the federal government and who owned little of their own company’s equity?
That’s easy to answer, even if you knew nothing about the financial crisis. Unless people have a stake in the outcome of an event, they are very likely to choose poorly or recklessly.
The most difficult problem we face today is, far too few Americans have any equity in our government. Less than half of all Americans pay any federal taxes. Don’t listen to the nonsense about how almost everyone pays payroll taxes. It’s true, but it’s irrelevant. Payroll taxes don’t come close to covering the costs of the entitlement programs they support.
Cutting government spending will be easy compared to trying to increase the average citizen’s equity in government. But we must. People will always demand more from the government until they realize how expensive government solutions really are. And the only way to show them is to share the burdens of government more equally.
Now, I know what you’re thinking… I’m making a political argument to reduce the progressive nature of our tax system. I’m not. I’m pointing out a simple fact: When half the voters don’t pay for any of the true costs of the government, your society is going to suffer terrible governance.
A democracy that concentrates the overwhelming burden of government on a tiny minority of the population is no different than an investment bank making bad loans and then selling them to someone else. You can’t separate the people making the decisions from the costs and the risks of those decisions. And yet, that’s what we’ve done.
We’ve reached a point where we can longer continue on our current path. America spends 800% more than its nearest rival on its military. We spend 200%-300% more per capita on health care than any other similarly wealthy country. Are we safer? Are we healthier? I honestly don’t think so.
And even if you believe we are, can we afford it? Here are the simple numbers. Americans now owe $56 trillion in total debt, much of it held by foreign investors. We must spend $3.5 trillion each year on interest. That is already more than the federal government spends, in total. I do not exaggerate when I tell you we cannot afford these debts. We will never be able to repay these debts – already equal to roughly four times our country’s GDP. The largest components of the debts we owe are government debts… and they are growing rapidly and show no signs of stopping.
The only way to stop the debt crisis we face is to reduce the total level of government spending – immediately and permanently. We have to stop giving our citizens improper incentives. We have to increase the “skin” voters have in the game by spreading the burden of government more equally. And most important, we must take away the politicians’ ability to debase our currency.
You see… politicians believe, as Dick Cheney famously said, deficits don’t matter. They believe these debts can be safely printed away – which is what the Federal Reserve is doing right now.
How can we accomplish these goals? I believe we need three simple amendments to our Constitution. First, we should have a balanced budget amendment. It’s hard to imagine why anyone would object to this, regardless of his politics. Politicians ought not have the right to burden future Americans with debt. It’s disgusting that we would leave a burden like this for our children and grandchildren.
Next, we need a constitutional amendment that ensures sound money. If you tell the politicians they’re not allowed to borrow, they’ll inflate instead. There is no reason Americans shouldn’t enjoy the stability and safety of sound money.
Every argument you’ll hear against backing our currency with gold comes from bankers and swindlers who need the ability to be bailed out so they can make risky bets with enormous amounts of borrowed money. Let’s put a stop to this, once and for all.
The American government is the world’s largest holder of gold. Let’s put it to work for us, right away, in the form of sound money.
Finally… we need a logical way to put a stop to the narrowing of the tax base. Everyone who votes should share in the burdens of government – otherwise the incentive will always exist to vote for more government spending.
I suggest a constitutional amendment limiting tax rates and abolishing all taxes except for income tax. Tax every adult over the age of 65 20% of his income – whatever the source. Give everyone a $24,000 annual personal exemption. Above that, everyone pays. No other deductions. We could get rid of the IRS. You could do your taxes on a post card. How much did you make? Send the government 20% of it.
Why do I think 20% is the right rate? The church has always asked for 10%. Surely the government can survive on twice what God needs. And… we should word the constitutional amendment to make clear our intentions: Every U.S. citizen has the right to keep 80% of his income. Let the feds and the states fight over your tax dollars. Remember, your assets and income are part and parcel of your freedom. A man cannot have his liberty without his property and the right to his wages.
By the way, the U.S. Constitution already decrees all citizens should be equal under the law. Making the tax code truly equal will merely be living up to the obligations our Constitution is already placing on the government. Likewise, the Constitution says Congress shall have the right to coin money. It says nothing about printing or the Federal Reserve.
And finally… the founding fathers of our country once rebelled over a 2% tax on sugar, and they expressly forbid income taxes in their Constitution. Can you imagine what they would think of marginal income tax rates in excess of 50% on people in certain states? These new amendments I’m suggesting aren’t really new at all: They’re simply a return, a restoration, of the real America – the greatest country in history.
If you like these ideas… please share this Digest. I’m sure it would be difficult to get these amendments passed. But if things in America get as bad as I think they’re going to, maybe people would be willing to rethink our government’s structure.
Sooner or later we have to learn to live within our means. Sooner or later, a preference for sound money will appear because inflation will have destroyed our currency. And sooner or later, the idea that you can live at the expense of your neighbor (through progressive taxation) will lead to a collapse. My preference would be to learn these lessons sooner, so the pain of this transition can be minimized.
Regards,
Porter Stansberry
Baltimore, Maryland
March 4, 2011
Randy
14 years ago
I am considering subscribing to the NY Times. The Colorado Springs is so small, I hardly have enough news print to start my wood fires!
Nan G
14 years ago
Arianna Huffington is being cast by some unpaid Huffington Post contributors as an unethical robber baron.
With Huffington awash in funds from AOL’s $315 million purchase of the Huffington Post, contributors have called a strike to demand proper compensation.
Visual Art Source members have contributed content to the Huffington Post for free since 2010.
Bill Lasarow, publisher of Visual Art Source wrote that “it is unethical to expect trained and qualified professionals to contribute quality content for nothing.”
Arianna claims that her HuffPo editorial pages have never made her any money, so they can go on strike but no one will notice.
Is it just me or is their a real lack of information on US involvement in the Balkans? I have a feeling this one has been butchered by the media! and the term “ethnic Albanians” is a dead giveaway. Am I right about this? And if someone has info on hand could you please send it my way?
Zac
14 years ago
War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself.
-John Stuart Mill
gregory_dittman
14 years ago
AOL’s stock price took a dive after buying the Huffington Post. There are two types of people blogging at that site. People believing they are cracking into the business and people that want to have their views heard to a “large” liberal audience.
The SP 500 has nearly doubled since 2009 and is near its historical high. 16.7% more growth will get the DOW to its historical high. Beware of scammers that tout buy higher rather than buy low and sell high. When the scammers come out, the best thing to do is sell and wait for the next crash.
U.S. movie attendence is down 22% from last year at the same time last year. Meanwhile there is a story where China is building movie theaters like mad. More movies are made in India than Hollywood. Hollywwod ranks 4th among India, China and even Nigeria (Nollywood). Those three countries combined make four times more movies than Hollywood. Hollywood complains of movie piracy is hurtiung their sales, but it’s really that their movies suck and are pricing themselves out of the market.
“Naturally the common people don’t want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”
~Hermann Goering
(I completely agree with John Stuart Mill’s statement, but there’s also be something important to be learned from the words of a dead Nazi war criminal.)
blast
14 years ago
Well, it looks official… The last of the WWI veterans will not lay in honor in the Capitol.
But, yeah, we could be more economical in our use of water and oil.
LIKE…..
Back when we first took over the responsibility to run our condo’s gardens and utilities we had no idea how much beauty is involved in saving water via native-drought-resistant plantings.
But we won the Earth Day award in a city of 1/2 million for our work. Our garden has been on native garden tours, too. I even consult to aid others in planting to save water.
BUT, one point: after Obama, even though we were using so little compared with averages, our utilities all went UP, way up!
Obama promised that the price of gasoline would have to skyrocket to force people to bend to his view of the world.
Our 27 condos use the water of the average 7 unit complex.
We use the electricity of a 4 unit complex.
Yet our bills are up.
Randy
14 years ago
@Nan G: That happened to Denver. Everyone was urged to conserve water and they did! Then there was not enough revenue to pay for water delivery, so the cost per 1000 gals went up!
Nan G
14 years ago
Government payouts make up 35 percent of all wages and salaries this year,
up from 21 percent in 2000 and 10 percent in 1960.
Madeline Schnapp, director of Macroeconomic Research at TrimTabs gives the country two stark choices. …..
In order to get welfare back to its pre-recession ratio of 26 percent of pay, ”either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion,
or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion.”
Gee.
I doubt our government can give away $2.3 trillion in extra wages just to create the taxes for that $500 billion.
Not even with printing presses running 24/7.
Greg
14 years ago
From the CNBC article linked in #29:
“Government payouts—including Social Security, Medicare and unemployment insurance—make up more than a third of total wages and salaries of the U.S. population, a record figure that will only increase if action isn’t taken before the majority of Baby Boomers enter retirement.”
Since when have Social Security, Medicare, and unemployment been considered “wages and salaries”? The article refers to them that way twice.
But I think it was Nancy Pelosi who started it with her belief that Unemployment benefits were the best thing for the economy.
“It creates jobs faster than almost any other initiative you can name.”
They created jobs and people bought stuff using them!
Of course all of them are taxable under some circumstances.
Randy
14 years ago
Is it true that Linsay Lohan will reprise “the Guardian” because she has experience in the role?
Nan G
14 years ago
Remember Scott Ritter?
He was set up in an Iraqi hospital so that Saddam could deliver young girls to him while he claimed to be inspecting weapons’ sites all over Iraq.
The girls were his price for saying Saddam was A-OK.
Now Scott R. is facing trial in Pennsylvania for soliciting sex with a minor over the internet.
This is the 3rd case brought against him since he left Iraq and had to find little girls on his own.
Obama’s White House just created the position of Cabinet communications director, appointing media adviser Tom Gavin to the job.
LOL!
A Cabinet Czar!
Obama got caught not bothering communicating with most of his REAL Cabinet for the whole 2 years he’s been in office and THIS is his solution?
Reminds me of the fact that he wanted a chief executive to ”do the job of President” so he could be free to vacation, campaign and play golf!
Thank God; those towers are going to stand tall again and be a monument to freedom in our great country.
God bless America!
I would have loved to have seen this start to happen quite a bit sooner, but at least progress is being made.
Maybe its the perfect time; the perfect time to honor our fallen countrymen by raising this tower, and maybe our enemy’s need to see what happens when you kill Americans, maybe; we the people are about to take our country back…
I’m not much of a believer in superstition but America is under attack from the inside, and we have just raised freedom tower? I don’t think that is coincidence.
Built by union ironworkers from the ground up.
Now, I don’t mind there being a mosque built there. Personally, I just wanted to get to a point where their puny little mosque sits deep in the shadows of the Freedom Towers.
http://www.commentarymagazine.com/2011/03/04/bill-gates-on-government-budget-gimmicks-enron-would-blush/
See “instant MEGO” (My Eyes Glaze Over) re: government accounting practices but useful for other areas of life and government.
Score another point for incompetence!
http://www.cbsnews.com/stories/2011/03/03/eveningnews/main20039031.shtml
I don’t know whose idea this was to let guns “walk” into Mexico from the US, and that includes .50 cal Barrett rifles, but the fact that some have been found at the scene of a Border Patrol Agent’s shooting is insane. One has to wonder how many other “walked” firearms were either used at, or found at, scenes of other Agent’s shootings.
It is really outrageous that the Congressional Leaders, Speaker Boehner are not honoring Cpl Frank Buckles the last American who served in WWI by allowing his body to lay in repose at the Capitol.
In France when their last WWI vet passed, it was a national event. Here in our country we have no need for our old soldiers… this is a singular moment in our history and an opportunity for us to honor not only Frank Buckles service, but also reflect on the countless Americans who died protecting our freedom.
I hope the Speaker changes his mind and allows the Rotunda to be opened for Cpl Buckles.
http://www.stripes.com/blogs/stripes-central/stripes-central-1.8040/lawmakers-want-u-s-capitol-honors-for-buckles-1.136652
Blast, hi, this portrait excactly where they are leaning toward, if they dont change their minds, they will deserve to be let go, on the next election, this is just one more insult on veterants to not forget, 2012
CURT, thank you, you acknowledge the important labor done almost, by the IRON MEN,
they said they would do it, and they did with their hard work and sweath,
what a difference it is compare with the leaders of this AMERICA, which haven’t accomplish nothing,
that the AMERICANS can feel proud of, but the IRON MEN did, and AMERICA IS PROUD OF THEM
@blast:
I agree completely with your sentiments. Those who have given of themselves, to the country, should be respected beyond those respects traditionally given to mere politicians. They should be always held in the highest regard, with honors.
The great irony of it all is that Frank Buckles himself would probably wish the opposite for himself. Such are the values of those who truly deserve such an honor.
@Iron Man, #4:
I hope no one misses the word “union” up there. The guys building the Freedom Tower would be Ironworkers Local 40 of New York.
GREG, WE DID NOT MISSED IT, THERE ARE GOOD UNION WORKERS, AND GOOD SIDE OF UNIONS IF ONLY THEY WOULD ALL STAY WHERE THEY BELONG, AND NOT TRY TO RUN THE CITIZENS OF THE GREAT AMERICA, AND OBEY THE LAWS OF THE CONSTITUTION, AND NOT FORCE THEIR MEMBERS TO BECOME AND ACT LIKE THUGS AND DO THE WORK OF THE UNIONS WHICH GET PAY BY THEM
TO NEGOCIATE WITHOUT RUINING THE BOSS THEY ARE WORKING FOR, AND RESPECT IT’S EMPLOYER, NOT INSTIGATING HATE AND UNCIVIL DEMONSTRATION, THAT IS UNAMERICAN,
AND WONT GAIN NOTHING FROM IT ONLY SHAME
How clever:
Copies of three of the signs and business card at site:
http://wausauteaparty.com/union_intimidation.html
With today’s jobs report, it’s time once again to remind you how badly this recovery has lagged every other recovery when it comes to jobs.
http://static2.businessinsider.com/image/4d71199c4bd7c8e877110000/chart-of-the-day-scariest-jobs-ever-march-2011.jpg
Has Obama and his love for all things union helped the recovery or held it back?
Just today I was reading that, AGAIN, the Davis – Bacon Act is being used by Obama to disproportionately benefit members of labor unions and their leaders.
Why do the union teachers in Wisconsin hate black students?” Iowahawk takes on Paul Krugman and his silly rantings. Good read! http://iowahawk.typepad.com/iowahawk/2011/03/longhorns-17-badgers-1.html
Curt,
Not sure how to post this. It is an email I get on investments. I copied this from Porter Stansbury’s weekly comments. If it violates the copyright regulations, please delete it.
Porter has been telling subscribers about ” the end of America” as related to the position of the dollar in the world market. He describes some significant issues here:
How to Stop The End of America… A few secrets from Warren Buffett… The Project to Restore America …
Here I go again… By now, almost everyone reading the Digest knows we set aside Friday’s for me (Porter) to write personally. And though I’ve rejected the idea that people can teach anything (there is no teaching, only learning) – I can’t seem to help myself. If you’re tired of suffering through these lessons, you’ll be happy to know my impulse to empower our subscribers by showing them a few of the more unpleasant truths about finance has cost me a lot of money.
As I knew they would, my essays about the importance of cash and the one last week about asset allocation (when you buy what) resulted in a torrent of refund demands – about $1 million worth in the last two weeks. So if you got something out of those essays, do me a favor: Buy something. Anything. Preferably something expensive.
It is a quirk of human nature that most people don’t want to learn anything new and react negatively to anyone who challenges their deeply held views (even when they’re obviously wrong). You’ll know I’m truly a glutton for punishment when you realize the subject of this week’s Friday Digest: Our country’s severe financial crisis.
Writing about this topic has led to far greater problems than cancellations. I’ve gotten threatening letters and angry e-mails from folks who seem to believe that pointing out these dangers is tantamount to causing them.
More than two years ago (December 2008), I first warned in my newsletter that America would eventually lose its world reserve currency status and our debt crisis would lead to a massive inflation. I call this complex series of issues the “End of America.” Not because I believe it will lead to the end of our political union (though it might), but because I believe we’re heading into a crisis that will be far worse than anyone has yet realized. The crisis will result in a significant decline in our standard of living. These are deadly serious issues and I meant every word I wrote.
Even so, two years ago, lots of folks actually laughed at me – including a few in my own office. Not anymore. If you saw the Wall Street Journal headline yesterday (the “Why the Dollar’s Reign is Near an End”) or if you saw Sam Zell (the most successful real estate investor of all time) yesterday on CNBC, you know many of the smartest folks in our country take my warning seriously. Said Zell:
My single biggest financial concern is the loss of the dollar as the reserve currency. I can’t imagine anything more disastrous to our country… you’re already seeing things in the markets that are suggesting that confidence in the dollar is waning… I think you could see a 25% reduction in the standard of living in this country if the U.S. dollar was no longer the world’s reserve currency. That’s how valuable it is.
So today, I want to update some key figures of my End of America report. I want you to know where we stand. This is important enough to risk the inevitable criticisms (and refunds). But I want to take one criticism out of play right now. Don’t bother writing to complain about my “politics.”
This has absolutely nothing to do with politics. This matter is purely about economics. The facts, as you’ll see, are completely clear to anyone who bothers to learn them. We are spending way beyond our means – both publicly and privately. Worse, this spending has warped the incentives in our economy, resulting in not only debts we can’t afford, but outcomes we don’t seek. At the heart of this crisis, there’s a knowledge problem. Most Americans don’t understand even the most basic facts about our country’s financial position, nor do they take the time to consider the likely outcome of poorly structured government programs.
So please, don’t write to me about politics. I don’t care about the Democrats, Republicans, or even the Tea Partiers. I don’t care whose “fault” it is, because these debts belong to all of us. I care about the people who live in America… people who are going to be wiped out because of feckless leadership and genuine ignorance. I can’t do anything about our leadership – that’s up to you. I can try to do something about the ignorance.
In our search for facts and solid financial thinking, let’s start with Warren Buffett, who is neither feckless nor stupid. Buffett is the world’s best investor. He got that way primarily by figuring out how to correctly value equities and allocate assets… and because he learned one of the most valuable financial secrets in modern finance: why insurance companies are so valuable. (Hint: It’s the float. But that’s a discussion for another day.)
Buffett has become a sort of “rich uncle” to America, giving helpful advice about financial matters. And he recently said something that struck me as profound – something I’d wager almost everyone else ignored. Buffett explained why the buyers of his mobile homes (Clayton Homes) default at rates (1.86%) much lower than the national average for homebuilders (more than 25%). That’s true, even though the buyers of his mobile homes typically have low incomes, less job stability, and lower credit scores than the buyers of conventional housing. If you read nothing else in today’s Digest, please pay attention to what Buffett says here:
Our borrowers get in trouble when they lose their jobs, have health problems, get divorced, etc. The recession has hit them hard. But they want to stay in their homes, and generally they borrowed sensible amounts in relation to their income.
In addition, we were keeping the originated mortgages for our own account, which means we were not securitizing or otherwise reselling them. If we were stupid in our lending, we were going to pay the price. That concentrates the mind. If homebuyers throughout the country had behaved like our buyers, America would not have had the crisis that it did. Our approach was simply to get a meaningful down payment and gear fixed monthly payments to a sensible percentage of income. This policy kept Clayton solvent and also kept buyers in their homes…
… A house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy. Our country’s social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford.
Pretty simple, eh? Don’t sell houses to folks who can’t afford them. And make sure both the lender (who kept the note) and the borrower (who made a down payment – equity) have plenty of “skin in the game.”
You don’t want to create any incentive for the deal to go bad. You want both parties to have a powerful incentive to do what they’ve promised. After ignorance, almost all our country’s core problems come back to these same issues: a lack of equity and poorly designed incentives. Remember these concepts. You’ll see them again: skin in the game (equity) and properly designed incentives.
Let me take on the toughest problem first: Medicare/Medicaid. Since the government established this program in 1965, it has amassed a $5.6 trillion deficit. This program alone accounts for 40% of our government’s total debt. If you could erase these debts, our most recent two foreign wars (Iraq/Afghanistan), and the losses associated with the recent financial crisis, you could eliminate more than half our entire federal debt – a debt threatening to destroy our way of life.
Whether you’d choose to eliminate these debts by eliminating these programs is a political question. I’m not going to discuss politics here. The point I’m trying to make is, regardless of what you’d choose, we have to make a choice. We can’t afford to do all of these things.
Like the subprime buyers in the housing bubble, we’ve bought a government we cannot afford. That’s a simple fact. It should be obvious to any thinking person that when government spending makes up 45% of GDP (as it does today) and there’s one government employee for every six households, something has gone terribly wrong with America.
When my parents were born, America was still the land of the free. The incentives people faced were different. Before World War II, the federal government made up only 3% of GDP. It didn’t provide health care. People had to maintain their health, as best they could. People didn’t depend on Ponzi finance (Social Security) for their old age – they had to save. They had to take care of their families and help take care of the unfortunate in their communities.
We didn’t spend a lot on the military, either… which gave us an incentive to mind our own business. In fact, back then, our presidents promised to keep us out of foreign wars. Both Wilson and Roosevelt came to power promising to keep us out of the war in Europe. They lied. Almost every other president since has sent our boys to die for others wherever they could. War is good for business… and good for the government.
Lots of people reading this e-mail will say, “I don’t want to live in a country like that, where the government doesn’t provide a social safety net.” Other readers might say, “I don’t want America to be ‘isolationist.’ We need more troops overseas to fight terrorism.” OK… So maybe 3% of GDP is not enough for the government we will choose. But 45% of GDP is much too large – again that’s not a political choice; we simply cannot afford it.
So how then will we decide? My suggestion: Pay more attention to incentives. And demand much more equity from the voters.
Here are some interesting facts:
In 1965 – when Congress created Medicare/Medicaid and greatly expanded the federal government’s role in health care – about 13% of Americans were obese. Today, 32% of Americans are obese.
Before the government enacted Social Security, Americans typically saved between 15% and 20% of their incomes. Today? Almost nothing. In fact, for many years, the savings rate in America was actually negative.
Before the Great Depression, there wasn’t any government unemployment insurance. Not surprisingly, there was almost zero long-term unemployment.
One more interesting fact… the U.S. didn’t experience a Great Depression until the Federal Reserve was created. The main purpose of the Federal Reserve is to ensure that banks don’t fail. Sounds good. But it provides a perverse incentive for banks to act recklessly, which causes bigger booms and busts – just like the one we’re experiencing right now.
I’m not arguing government spending is the primary cause of any of these problems. But I am saying you’d have to be a fool to believe incentives don’t play a big role in human action. Think about why all politicians try to spend more than they collect in taxes. They have a huge incentive to promise more than they can deliver – and to make up the difference by borrowing against future taxes or printing more money.
The problems created by the perverse incentives of collectivist actions are well known. They are as old as the ideas themselves. They explain why socialism and communism always lead to failure. And yet… we seem eager to pursue these policies in an almost mindless pursuit of bankruptcy. Why? That’s not hard to figure out either.
What’s the No. 1 reason people make bad decisions? They don’t have to suffer the consequences. Which investors made worse decisions during the mortgage bubble? Was it the private hedge-fund managers, whose entire net worth was made up of the assets in their own funds and whose friends and families had invested alongside them? Or was it the senior managers of publicly owned banks, whose creditors were protected by the federal government and who owned little of their own company’s equity?
That’s easy to answer, even if you knew nothing about the financial crisis. Unless people have a stake in the outcome of an event, they are very likely to choose poorly or recklessly.
The most difficult problem we face today is, far too few Americans have any equity in our government. Less than half of all Americans pay any federal taxes. Don’t listen to the nonsense about how almost everyone pays payroll taxes. It’s true, but it’s irrelevant. Payroll taxes don’t come close to covering the costs of the entitlement programs they support.
Cutting government spending will be easy compared to trying to increase the average citizen’s equity in government. But we must. People will always demand more from the government until they realize how expensive government solutions really are. And the only way to show them is to share the burdens of government more equally.
Now, I know what you’re thinking… I’m making a political argument to reduce the progressive nature of our tax system. I’m not. I’m pointing out a simple fact: When half the voters don’t pay for any of the true costs of the government, your society is going to suffer terrible governance.
A democracy that concentrates the overwhelming burden of government on a tiny minority of the population is no different than an investment bank making bad loans and then selling them to someone else. You can’t separate the people making the decisions from the costs and the risks of those decisions. And yet, that’s what we’ve done.
We’ve reached a point where we can longer continue on our current path. America spends 800% more than its nearest rival on its military. We spend 200%-300% more per capita on health care than any other similarly wealthy country. Are we safer? Are we healthier? I honestly don’t think so.
And even if you believe we are, can we afford it? Here are the simple numbers. Americans now owe $56 trillion in total debt, much of it held by foreign investors. We must spend $3.5 trillion each year on interest. That is already more than the federal government spends, in total. I do not exaggerate when I tell you we cannot afford these debts. We will never be able to repay these debts – already equal to roughly four times our country’s GDP. The largest components of the debts we owe are government debts… and they are growing rapidly and show no signs of stopping.
The only way to stop the debt crisis we face is to reduce the total level of government spending – immediately and permanently. We have to stop giving our citizens improper incentives. We have to increase the “skin” voters have in the game by spreading the burden of government more equally. And most important, we must take away the politicians’ ability to debase our currency.
You see… politicians believe, as Dick Cheney famously said, deficits don’t matter. They believe these debts can be safely printed away – which is what the Federal Reserve is doing right now.
How can we accomplish these goals? I believe we need three simple amendments to our Constitution. First, we should have a balanced budget amendment. It’s hard to imagine why anyone would object to this, regardless of his politics. Politicians ought not have the right to burden future Americans with debt. It’s disgusting that we would leave a burden like this for our children and grandchildren.
Next, we need a constitutional amendment that ensures sound money. If you tell the politicians they’re not allowed to borrow, they’ll inflate instead. There is no reason Americans shouldn’t enjoy the stability and safety of sound money.
Every argument you’ll hear against backing our currency with gold comes from bankers and swindlers who need the ability to be bailed out so they can make risky bets with enormous amounts of borrowed money. Let’s put a stop to this, once and for all.
The American government is the world’s largest holder of gold. Let’s put it to work for us, right away, in the form of sound money.
Finally… we need a logical way to put a stop to the narrowing of the tax base. Everyone who votes should share in the burdens of government – otherwise the incentive will always exist to vote for more government spending.
I suggest a constitutional amendment limiting tax rates and abolishing all taxes except for income tax. Tax every adult over the age of 65 20% of his income – whatever the source. Give everyone a $24,000 annual personal exemption. Above that, everyone pays. No other deductions. We could get rid of the IRS. You could do your taxes on a post card. How much did you make? Send the government 20% of it.
Why do I think 20% is the right rate? The church has always asked for 10%. Surely the government can survive on twice what God needs. And… we should word the constitutional amendment to make clear our intentions: Every U.S. citizen has the right to keep 80% of his income. Let the feds and the states fight over your tax dollars. Remember, your assets and income are part and parcel of your freedom. A man cannot have his liberty without his property and the right to his wages.
By the way, the U.S. Constitution already decrees all citizens should be equal under the law. Making the tax code truly equal will merely be living up to the obligations our Constitution is already placing on the government. Likewise, the Constitution says Congress shall have the right to coin money. It says nothing about printing or the Federal Reserve.
And finally… the founding fathers of our country once rebelled over a 2% tax on sugar, and they expressly forbid income taxes in their Constitution. Can you imagine what they would think of marginal income tax rates in excess of 50% on people in certain states? These new amendments I’m suggesting aren’t really new at all: They’re simply a return, a restoration, of the real America – the greatest country in history.
If you like these ideas… please share this Digest. I’m sure it would be difficult to get these amendments passed. But if things in America get as bad as I think they’re going to, maybe people would be willing to rethink our government’s structure.
Sooner or later we have to learn to live within our means. Sooner or later, a preference for sound money will appear because inflation will have destroyed our currency. And sooner or later, the idea that you can live at the expense of your neighbor (through progressive taxation) will lead to a collapse. My preference would be to learn these lessons sooner, so the pain of this transition can be minimized.
Regards,
Porter Stansberry
Baltimore, Maryland
March 4, 2011
I am considering subscribing to the NY Times. The Colorado Springs is so small, I hardly have enough news print to start my wood fires!
Arianna Huffington is being cast by some unpaid Huffington Post contributors as an unethical robber baron.
With Huffington awash in funds from AOL’s $315 million purchase of the Huffington Post, contributors have called a strike to demand proper compensation.
Visual Art Source members have contributed content to the Huffington Post for free since 2010.
Bill Lasarow, publisher of Visual Art Source wrote that “it is unethical to expect trained and qualified professionals to contribute quality content for nothing.”
Arianna claims that her HuffPo editorial pages have never made her any money, so they can go on strike but no one will notice.
LOL
They do deserve one another!
@ilovebeeswarzone: well said!! Bye.
Is it just me or is their a real lack of information on US involvement in the Balkans? I have a feeling this one has been butchered by the media! and the term “ethnic Albanians” is a dead giveaway. Am I right about this? And if someone has info on hand could you please send it my way?
War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself.
-John Stuart Mill
AOL’s stock price took a dive after buying the Huffington Post. There are two types of people blogging at that site. People believing they are cracking into the business and people that want to have their views heard to a “large” liberal audience.
The SP 500 has nearly doubled since 2009 and is near its historical high. 16.7% more growth will get the DOW to its historical high. Beware of scammers that tout buy higher rather than buy low and sell high. When the scammers come out, the best thing to do is sell and wait for the next crash.
U.S. movie attendence is down 22% from last year at the same time last year. Meanwhile there is a story where China is building movie theaters like mad. More movies are made in India than Hollywood. Hollywwod ranks 4th among India, China and even Nigeria (Nollywood). Those three countries combined make four times more movies than Hollywood. Hollywood complains of movie piracy is hurtiung their sales, but it’s really that their movies suck and are pricing themselves out of the market.
@Zac, #22:
“Naturally the common people don’t want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”
~Hermann Goering
(I completely agree with John Stuart Mill’s statement, but there’s also be something important to be learned from the words of a dead Nazi war criminal.)
Well, it looks official… The last of the WWI veterans will not lay in honor in the Capitol.
http://www.nytimes.com/2011/03/09/us/09buckles.html
I am really disappointed that Cpl Frank Buckles who represents this era is not going to focus our nation on the veterans of wars.
Today it’s all about oil. Tomorrow it will be water, and the story is very close to home.
@Greg:
We have lots of oil.
We also have lots of water.
And the aquifer mentioned in your link is replenishing!
As a matter of fact, even in Texas, where the article claims it is almost dead empty, there are sections of it that have been stable in depth of water for over 40 years.
Other sections of it are getting deeper.
http://www.gis.ttu.edu/OgallalaAquiferMaps/MapSeries/JPEGs/08_UseableLifetime_8x11.jpg
But, yeah, we could be more economical in our use of water and oil.
LIKE…..
Back when we first took over the responsibility to run our condo’s gardens and utilities we had no idea how much beauty is involved in saving water via native-drought-resistant plantings.
But we won the Earth Day award in a city of 1/2 million for our work. Our garden has been on native garden tours, too. I even consult to aid others in planting to save water.
BUT, one point: after Obama, even though we were using so little compared with averages, our utilities all went UP, way up!
Obama promised that the price of gasoline would have to skyrocket to force people to bend to his view of the world.
Our 27 condos use the water of the average 7 unit complex.
We use the electricity of a 4 unit complex.
Yet our bills are up.
@Nan G: That happened to Denver. Everyone was urged to conserve water and they did! Then there was not enough revenue to pay for water delivery, so the cost per 1000 gals went up!
Government payouts make up 35 percent of all wages and salaries this year,
up from 21 percent in 2000 and 10 percent in 1960.
Madeline Schnapp, director of Macroeconomic Research at TrimTabs gives the country two stark choices. …..
In order to get welfare back to its pre-recession ratio of 26 percent of pay,
”either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion,
or
social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion.”
Much more at CNBC
Gee.
I doubt our government can give away $2.3 trillion in extra wages just to create the taxes for that $500 billion.
Not even with printing presses running 24/7.
From the CNBC article linked in #29:
Since when have Social Security, Medicare, and unemployment been considered “wages and salaries”? The article refers to them that way twice.
@Greg:
Take it up with CNBC.
.
But I think it was Nancy Pelosi who started it with her belief that Unemployment benefits were the best thing for the economy.
“It creates jobs faster than almost any other initiative you can name.”
They created jobs and people bought stuff using them!
Of course all of them are taxable under some circumstances.
Is it true that Linsay Lohan will reprise “the Guardian” because she has experience in the role?
Remember Scott Ritter?
He was set up in an Iraqi hospital so that Saddam could deliver young girls to him while he claimed to be inspecting weapons’ sites all over Iraq.
The girls were his price for saying Saddam was A-OK.
Now Scott R. is facing trial in Pennsylvania for soliciting sex with a minor over the internet.
This is the 3rd case brought against him since he left Iraq and had to find little girls on his own.
He really needs a new enabler.
LOL!
Read more: http://www.belfasttelegraph.co.uk/news/world-news/antiwar-hero-scott-ritter-set-for-trial-after-child-sex-sting-15107809.html#ixzz1G7YwFU00
Obama’s White House just created the position of Cabinet communications director, appointing media adviser Tom Gavin to the job.
LOL!
A Cabinet Czar!
Obama got caught not bothering communicating with most of his REAL Cabinet for the whole 2 years he’s been in office and THIS is his solution?
Reminds me of the fact that he wanted a chief executive to ”do the job of President” so he could be free to vacation, campaign and play golf!