"Are the Good Times Really Over?"

Recently I heard a song by this title sung by Merle Haggard, and it seemingly described the feelings of a lot of folks right now. Don't worry, it was first published in the Spring of 1982 in the midst of the recession caused when Paul Volcker of the Federal Reserve cut off the credit spigot that had caused accelerating inflation from the late 1960's through the 1970's.

Lyndon Johnson's War on Poverty and the War in Viet Nam had been financed with credit, and very loose monetary policies were followed by Nixon, Ford and Carter, and the Fed chairmen that served under them. This created double digit inflation and extremely high interest rates by the end of Carter's term. He appointed Volcker to solve the problem. He did, but at the cost of a serious downturn.

At the end of the recession, the good times started back as a result of tax cuts and more deficit spending under Reagan, but this was again briefly halted by a real estate bust and the failure of most savings and loan institutions around the country.

Volcker was not reappointed, and Greenspan replaced him as chairman of the Fed.

The good times started back, to be only briefly interrupted by a tightening of money just in time during George H. W. Bush's term to cause a short recession in the election year of 1992, when Clinton was elected.

During Clinton's two terms, the good times returned, and the party, which was based upon very easy credit, lasted until 2007. Then, the world ran out of credit.

A slump has ensued that we are still not recovering from. So how about the good times? Are they really over for good?

I say "No." There are plenty of good times left. To get there, however, there must be some pain.

We as a country, and indeed the whole world, are at the end of a long term credit cycle. These have happened before, and, given human nature, surely will again.

What has happened? Chris Martenson put it this way:

"Banks began lending money at a faster rate than the global economy grew, and we're now at the turning point where we simply have run out of new borrowers for the ever-growing debt the system has become addicted to."


Now the bill is coming due. When one tries to create prosperity with easy credit, which the world has done, it will always end with a serious contraction.

Prosperity has to be earned, not borrowed. We have borrowed to obtain prosperity, and now, having danced to the tune, it is time to pay the Piper.

The economic paradigm we have operated under in the world since Bretton Woods in 1944, and particularly since Nixon closed the gold window in 1973, was based upon easy credit and fiat currencies, particularly the dollar.

In spite of huge efforts by governments and central banks around the world, led by the US, that old paradigm is failing, and cannot be saved. They are literally creating trillions of dollars and Euros out of thin air trying to do so, but it won't work in the end. But it will make the world's currencies, including the dollar, worthless if they continue. It may already have.

That reminds me of another country song, by Willie Nelson: "Turn Out the Lights, the Party's Over." All we have to do is recognize it, and move on.

Now, how about the good times? We have to get over the funk we are in. It will be painful, but we must go back to sound money. I am not expert on that, but we had pretty sound money before 1913, and since then the dollar has become worth only a penny of its value during that year.

Perhaps we will see whether after the Great Depression and the current ongoing crisis, our government and our people have the courage and determination to put in place a more sound and sensible economic paradigm.

If we do, the good times will come back.

Afterword:

For those who like country music, here ate the sites for the two songs:
http://www.youtube.com/watch?v=eFHJ41ktt3Q
http://www.youtube.com/watch?v=tsTAUs_h_uY

Bits and Pieces for January 12, 2012

Haley Barbour? Tell me it is not true! Apparently the conservative, law and order  Republican governor of Mississippi has pardoned a bunch of criminals, including 14 murderers. Even the Democrats are appalled. Ths story can be found here.

Marin County, California is going to outlaw smoking tobacco, but the county supervisors are going out of their way to make sure marijuana is not included in the ban. I suppose it shows a lot about the culture out there.

Marin’s war on smoking was blunted Tuesday as a measure cracking down on tobacco and other “weed” was sent back for revision to make clear the crackdown does not include marijuana.

Although supervisors were in agreement with the policy when county staff last month asserted an ordinance outlawing smoking in unincorporated-area apartments included marijuana and other herbs as well as tobacco, the county board Tuesday abruptly called for revisions making clear tobacco was the only weed at issue.

 This is not a joke. Coverage from the Marin Independent Journal is here.

Law and Order. Steven Hayward over at Power Line Blog has a good short story on the Obama recess appointments. It is a discussion with Tom Campbell. Read it here. Obama is pretty clearly making new precendent with them. What will be the end result?

Defense spending is shovel ready. So says Victor Davis Hanson. Pointing out that defense spending is not the real problem he concludes:

The decline of civilizations of the past -- fourth-century-B.C. Athens, fifth-century-A.D. Rome, 15th-century Byzantium, or 1930s Western Europe -- was not caused by their spending too much money on defense or not spending enough on public entitlements. Rather, their expanding governments redistributed more borrowed money, while a dependent citizenry wanted even fewer soldiers to guarantee ever more handouts.

History's bleak lesson is that those societies with self-reliant citizens who protect themselves and their interests prosper; those who grow dependent cut back their defenses -- and waste away.

Some people never learn.

Orangutans using iPads at zoos - soon to use Skype. For all of you iPad owners that think you are smart, just read this article from Gizmag.com.

"They like many of the free apps that I think children would like - they like the free apps where you can fingerpaint, they like the apps where you can use the drums," says Trish Khan, Milwaukee County Zoo's orangutan keeper.

Maybe we humans aren't as much smarter than the apes as we thought. lol

Climate change from CO2 may not be as bad as predicted. Also from Gizmag is a story about the new report from the National Science Foundation's Paleoclimate Program that says that climate change may be far less sensitive to CO2 than previously thought.

"Many previous climate sensitivity studies have looked at the past only from 1850 through today, and not fully integrated paleoclimate date, especially on a global scale," said Schmittner. "When you reconstruct sea and land surface temperatures from the peak of the last Ice Age 21,000 years ago - which is referred to as the Last Glacial Maximum - and compare it with climate model simulations of that period, you get a much different picture.

"If these paleoclimatic constraints apply to the future, as predicted by our model, the results imply less probability of extreme climatic change than previously thought," Schmittner added.

The sciece of anthropogenic global warming is still not settled, in spite of what the scaremongers who wish to profit from government programs would have you believe.

Masters of the World. That is what the Muslims Brotherhood's goal is. And good old Jimmy Carter says about their election in Egypt:

"I don't have any problem with that,and the U.S. government doesn't have any problem with that either. We want the will of the Egyptian people to be expressed."

I knew Carter when he was President, personally. He became the reason why I left the Democratic Party, along with the policies he and they espoused.

Like Obama, he has no use for the national interest of the United States. He would turn the whole world over to the radicals.

Bits and Pieces for January 11, 2012

New Hampshire. Romney and Obama both win, as expected. For a lot of stories, go to Memeorandum, which has a lot of links. Good site.

Pay particular attention to Nate Silver's FiveThirtyEight blog. Although he is a liberal and it is a New York Times blog, he is probably the best analyst out there these days. Pretty positive outlook for Romney, as one might expect.

Obama's War on Energy. John Hinderaker has a blurb over at PowerLine about this, with a good chart. He concludes, correctly:

The real question, of course, is how much petroleum is being recovered from public lands. Because of three years of Obama anti-energy policies, energy development is down substantially:

Oil production on federal lands is down 13 percent in 2011: 97,721,813 barrels in 2011 versus 112,124,812 barrels in 2010.

This is what happens when we have an administration that thinks Americans consume too many resources, which is to say, live too well.

 Mr. Obama’s 99% — Are We Poor or Just Unequal or Both or Neither?

Victor Davis Hanson has an excellent essay up exploring the differences between the 99% and the 1% that has been in all the news lately. I highly recommend it. He concludes:

Keep all that in mind as we enter the most divisive, class-warfare campaign in recent memory. We are living in the upside-down world Orwell wrote about. A president who likes upscale golf a lot, and Martha’s Vineyard even more, who has hired three “fat cat” bankers as his chiefs of staff (how odd that Emanuel and Lew probably both made a lot out of the Freddie/Fannie bubble), and who is the largest recipient of Wall Street cash in history now argues that half of America suffers from the hands of “them.”

Being unequal is not poor. And not having what the “rich” have hardly means having it bad. Sorry, that’s just the way it is.

FuturePundit reports that full genome sequencing costs are dropping to close to $1,000 per genome. The way things are going it won't be long before it is affordable for anyone that wants it.

These low prices are going to drive up the rate of full genome sequencing. Therefore expect to see an explosion of discoveries on what the many genetic variants mean. What I'm especially looking forward to: genetically derived personal advice on ideal diet, exercise, sleep, and other lifestyle choices.

I have had a small bit of mine sequenced, and the information derived is quite interesting. I got my testing at Family Tree DNA and tranferred it and had additional testing at 23andMe as well. It is all pretty interesting.

A Future History. Came across this wandering around some science blogs. Kind of wild speculation, but interesting. Much seems impossible, but I remember my Dad telling me in the 1950s (I was reading science fiction of the day) that men would never go to the moon. Neil Armstrong stepped onto the moon less that three years after he passed away. For those who may be interested in space, this is an interesting read.

Here are the writer's prediction for 2015:

By 2015:
By now, Virgin Galactic will have flown dozens of tourists into space, and anticipation will be growing for the next step – Bigelow’s orbiting hotels. It should come as no surprise that many couples are already making advanced bookings with a wink toward zero-gravity sex. The Google Lunar X-Prize will have been won and a few companies vying to dominate the resulting private space probe market. Exoplanets continue to be discovered, with a few Earth-sized planets plus many more large planets in habitable zones, but as yet no confirmed Earth-like planet.

With commercial launch capabilities now obvious even to Congress, plus growing space programs in other nations, the ambivalence toward NASA is finally subsiding. Human spaceflight, beyond the recreational commercial near-Earth activities is now being pursued in the form of multinational programs and the negative stigma of nuclear space propulsion and power is waning. NASA has a large role in making that happen, along with a resumption of the research to bring the more-difficult space technologies to fruition.

There are a lot more predictions. Go to the site and see what they are.

Twinkies. Has filed for bankruptcy according to the WSJ. It owes the union nearly $1 billion, and can't pay. It has tried to sell out, but there are no buyers. Too bad.

Paying College Athletes is a Terrible Idea. So says Mark Emmert in today's Wall Street Journal.

There are fundamental flaws in the pay-for-play mantra. Proponents naively think that paying players will solve all the problems involving agents, team boosters and others who are willing to break rules. They are wrong. The stakes will simply be raised to bribe athletes to attend a school, support them financially for the agent's future gain, or help them cheat in school. No, paying players a salary would make the situation worse.

Can't say I disagree  but what he proposes may do the trick. The problem is that the NCAA doesn't have the guts to really enforce the rules, and larger schools get away with a lot of violations, and aren't really punished when they are caught. It is a lot easier for an Oklahoma or Ohio State or an Oregon or a USC to get away with it because the NCAA is dependent on schools like that for their money. They don't make any off of Arkansas State, or similar schools.

We have to be willing to take hard stands based on our principles. Rather than push college athletics further and further from academics, we need to bring it closer. The values of our colleges and universities need to be consistent across the campus, classroom and playing fields. Coaches, administrators and student-athletes need to be held to the same standards and expectations as all members of the community.


That's what we started in the fall: clearing the way for student-athletes to get a $2,000 miscellaneous expense allowance, awarding multiyear scholarships, raising academic standards, simplifying the rule book, and toughening the penalties for egregious rule breakers.

I will have to see it to believe it.

Is Romney the only Republican candidate that has not alienated more than one half of the Republican Party? Jay Cost over at the Weekly Standard suggests that it is atleast so in New Hampshire.

We have heard a lot over the last couple months about the anti-Romney sentiment in the Republican party. However, this statistic suggests that, in New Hampshire at any rate, Romney is the only candidate with whom a majority of the party is satisfied. The rest of the candidates seem to have alienated more than half of the GOP.

There is more analysis in the story. Read the whole thing at the site.

Did Ron Paul win the liberal crossover vote in New Hampshire? So say Jim Hoft, who has the exit polls here. Go read it all at the site.

Bits and Pieces for January 10, 2012

Politics. Is anybody getting pretty sick at the inanity of our politics and the press coverage thereof? I am.  Is contraception or the ability of someone in the private sector to fire people all that important?

This may be the most important election in our lifetime, and nobody is really doing much talking about what the real issues are, or the press is not covering it.

We need to get serious about this. Now.

Is it just me. Or is it just a dull day all over while we wait for New Hampshire to vote?

I guess it is not dull in the world of medicine. Brigham and Women's Hospital, via E! Science News, has announced:

Researchers at Brigham and Women's Hospital (BWH) have successfully tested a controllable endoscopic capsule, inspired by science fiction, that has the ability to "swim" through the body and could provide clinicians with unprecedented control when photographing the inside of the human body. The capsule is designed to be swallowed like a pill and can be equipped with a camera. Once inside the patient's digestive track, a doctor can "steer" the capsule through the body using an MRI machine, photograph specific areas of interest, and view those pictures wirelessly.

Wow! Anyone that has ever had endoscopy or colonoscopy will appreciate this research. Let's hope the FDA won't screw this up.

The Congressional Budget Office has released a brief on suggested changes to Medicare and Social Security eligibility. They have a chart on their blog. The blog concludes:

CBO estimates that by 2035, the set of increases just described would cause outlays for Social Security and Medicare to fall by 0.4 percent of GDP and federal revenues to rise by around a half percent of GDP—leading to a reduction in the budget deficit of nearly 1 percent of GDP, not including the effects of lower interest outlays. Altogether, by 2060, the federal budget deficit would be reduced by about 1¾ percent of GDP.

 In a 15+ trillion dollar economy, those can be big numbers. Enough to save the system? Who knows?

Maybe something will come out of the MF Global scandal. Seems one of the perps wants to make a deal:

While prosecutors and regulators have jointly conducted dozens of depositions with former and current employees, a senior official in the Chicago office of MF Global recently declined to meet with the federal authorities, people briefed on the investigation said.

That official, Edith O’Brien, a treasurer at MF Global, is considered a “person of interest” in the investigation, the people said. Federal authorities suspect that she transferred about $200 million to JPMorgan Chase in London on the eve of the bankruptcy of MF Global, money that turned out to be customer cash.

If they can get some of the rats to rat on the others, maybe at long last we will see a big banker do the perp walk. There have been far too few prosecutions of the bankers who have perpetrated huge frauds against the public. Of course, the reason for that is they are being protected by politicians including the one at the very top.

The top perp in this case is Jon Corzine, one of Obama's big pals.

 

Bits and Pieces for the Day

Speaking of Goldman Sachs, Timothy Haight, writing in The Orange County Register, says that the Dodd-Frank legislation did not solve the problem of the Too Big to Fail financial institutions.

Unfortunately, legislation enacted does not solve the fundamental problem. It simply provides cover for those who were asleep at the wheel, while ignoring the underlying cause of the crisis.

Some, of course, knew this. Including most in Congress. But many in the public were fooled. Our ignorance is going to come back and bite us. He recommends that we go back to Glass-Steagall and increase bank capital requirements. He would also cap the FDIC insurance on bank deposits per institution. That is leave the coverage where it is for smaller banks, but cap the exposure in the very big ones.

My thought is that the FDIC should charge premiums to the large banks according to the real risk they have. But that would require that they be honest with their risks, and right now the Federal Reserve and the Treasury are permitting them all to pretend they aren't already broke. I call it The Golden Rule: those with the gold, make the rules. In spite of their anger at Obama, they have had it real good the last few years. And they have pretty much had their way with the Congress and the President.

Uh Oh. Charles Gasparino says in the New York Post that Goldman Sachs is supporting Romney this year after having been Obama's big supporter in 2008.

What makes Goldman’s move to the right so striking is just how far to the left it was in 2008. The Goldman community gave more than a $1 million to the 2008 Obama campaign, bested only by donors tied to the ultraliberal University of California. But the latest contribution records (through the end of September) show that Goldman-linked givers barely crack the top 20 of Obama donors, with a little more than $50,000 toward his 2012 re-election effort.

Now they are the leading source of cash for Romney. They are good at picking winners. That has given them unprecedented power and influence in Congress and the executive for many years. How else could they have gotten the huge bailouts in 2008 and since?

Romney should not celebrate this. It gives many a sound reason to oppose him. Very sound. The crony capitalism we have had the last two decades is a huge part of the financial difficulties we have been experiencing. GS and a lot of the huge institutions have way too much influence.


Tim Tebow.  What more can one say? After all of the denigration and criticism, he put in a great performance to win the playoff game yesterday. Congratulations to him, and a big loud raspberry to those who have been on him for his overt Christianity. I am really getting tired of the people who belittle others for being Christian, particularly when many of them are apologists for Muslims, even the radical ones. You can guess who I am talking about.


The only known photos from the White House’s 2009 “Alice in Wonderland” party.

Why did the Obamas want to keep this secret? Why did the press go along? Goodness, Marie and Louis partied during a recession. Guess the Obamas wanted to avoid the same result. LOL

There are others. Go to the site for more.



Roger L. Simon takes on George Stephanoloupos and his question on contraceptives in Saturday night's debate here. He also is critical of the GOP for letting the leftwing media set the terms of the debates and would prefer having no moderators:

I am interested in the candidates and what they have to say to each other — mano-a-mano — in the style of Lincoln and Douglas.

They should be given a topic for the debate (entitlements, Iran, whatever) and be set free to examine it. Those issues can be discussed at length and in more depth without the interference of media personalities who, besides being biased one way or the other, are often more interested in the promotion of themselves or their companies.

Mark Steyn also has a post on the subject:

 This country is broke, and the unprecedented scale of its brokeness is an existential threat. Yet, with the exception of Newt’s occasional flashes of contempt for the questioners, everyone else plays along with this absurd game. It’s not merely that the GOP is letting the left frame the contest but that a party willing to dignify this pitiful charade is sending a broader message about the likelihood of its mustering the determination to stand up to a Democrat-media establishment once in office and effect meaningful course correction.

I think I have to agree with them both. Does anyone think Obama would do debates like this, particularly without a teleprompter?


Quote of the Day:

In a world inhabited by sincere sane leaders, willing to level with the citizens and disposed to allow financial institutions that took world crushing risks to fail through an orderly bankruptcy process, debt would have been written off and a sharp short contraction would have occurred. The stockholders, bondholders and executives of the Wall Street banks would have taken the losses they deserved. Instead Wall Street used their undue influence, wealth and power to force their politician puppets to funnel $5 trillion to the bankers that created the crisis while dumping the debt on taxpayers and unborn generations. The Wall Street controlled Federal Reserve provided risk free funding and took toxic mortgage assets off their balance sheets. The result is total credit market debt higher today than it was at the peak of the financial crisis in March 2009.

Read 2012 - The Year of Living Dangerously here. This is certainly not an endorsement of everything he says. He gets off the rails a bit, particularly towards the end when he gets partisan.

Lance Roberts at StreettalkLive.com has a good rundown on last week's employment report:

First, let's start by putting things into perspective. If you take a look at the  actual number of those "counted" as employed, that number has risen from the recessionary trough. However, in reality, employment is still far below the long term historical trend. Currently, the deviation from the long term trend is the widest on record and has made very little improvement.

 The unemployment number went down, but it was not all a happy thing.

If, and that is a big "IF", employment was truly improving, we would be seeing these numbers begin to reverse course. They aren't, and the reason is due to population growth. During the last month it is estimated that the number of individuals of working age, 16 years and over, rose by 143,000 with the working age population now residing at 240.6 million. The offset is that, while job gains are modest and primarily located in lower-paying temporary employment for the end-of-year seasonality, the population continues to grow at an unfettered clip. In simple terms, the economy is not creating jobs fast enough to keep up with population growth.

There are some very good charts that show the real situation. If the government were measuring unemployment like they did during the Great Depression, the unemployment rate would be much, much higher. Read the whole thing at the site.

At USA Today, Richard Wolf notes that the US national debt is now at 100% of the economy. This is the point where all analysis shows that we are in seriious trouble. And our politicians are whistling past the graveyard trying to avoid offending anyone by doing what is necessary. All of them are failing us because they are too busy playing politics. Its time for a change. They all need to be thrown out.


Gallup says that 40% of Americans prefer to be independent rather than identify with either of our political parties. 31% are Democrats and 27% are Republicans.

As dysfunctional as both parties are, I cannot really imagine anyone wanting to identify with either of them.