Thursday, February 20, 2014

Access of Evil

Re: FCC to Monitor Newsrooms

Is there a more dangerous word in the statist’s lexicon than “access”?  OK, maybe you could make a case for “fairness” or “right”, but I’d wager that lurking not far from either of those words would be a plethora of accesses too. 

The subprime boom that crashed financial markets in 2008 was built on a mountain of access.  Access to affordable housing, access to affordable mortgages, access to credit, access to the McMansion of your dreams, etc.  In short, access to stuff you could not possibly afford.  Ergo, access to other people’s stuff. 

Obamacare is built on a mountain of access too:  access to healthcare, access to affordable insurance, access to top hospitals, access to contraception, and on and on.  This is working out so well that now it is providing - access to unemployment lines, access to a lame website, access to a doctor shortage, access to higher premiums, access to higher deductibles, access to higher copays, access to fewer drugs, etc. 

Today we learned about a new threat from the “access of evil”.  The FCC is planning on placing monitors in TV, radio, and print newsrooms to insure that their audiences have “Access to Critical Information”.  Gee, this sounds an awful lot like what the East German Stasi and the Soviet KGB did.  I wonder which broadcasters and networks will be found lacking in providing this "critical information" access?  Would this not be a great way to provide access to a monopoly state-controlled media?    

From the first page of the FCC plan:  “the purpose of this Study of Critical Information Needs (CINs) is to provide a comprehensive analysis of access/barriers to CINs in diverse American communities.”  If this sounds a bit too Orwellian and unbelievable, here is the link to the actual document (assuming they haven’t taken it down yet).        

The word “access” appears 21 times in the document. 

(Update: Apparently the daughter of Democrat Congressman James Clyburn is a key player in all this.)

Wednesday, February 19, 2014

The War On Women Backfires

Kathleen Willey recently said, "Hillary Clinton IS the war on women".  I cannot let that go without reposting my cartoon on the subject, which must be watched to the end to get the full relevance.  

Tuesday, February 18, 2014

Subprime Nation

(This graph is a modified version of one I posted earlier.  I think it is worth revisiting as I get back to actively blogging after a hiatus.)

Since the financial crisis in 2008, we have known that one of the key reasons for the collapse was that the new breed of subprime mortgages and their derivatives were completely misunderstood and assumed to be as safe as mortgages had historically been.  (There's an old joke about what happens when you assume...)  Rather than treat these new subprime beasts as risky and different, the prevailing assumption was that they would behave just like the old 30 year fixed rate mortgages had, when borrowers had real income, real assets, real down payments, and real equity.  Big mistake.

We may be living a repeat of this kind of error, only this time it has to do with government spending.  Since 2008, Ben Bernanke's Fed and Barack Obama's government have presided over an historical explosion in government spending as a percent of the private sector.  Like subprime mortgages and derivatives back in 2007, we have no historical basis for understanding this kind of explosion in peacetime spending.  Even during the Great Depression nothing like this happened.

Two other times in history reveal large bursts in government spending - WWI and WWII.  The difference is, after both those wars the US enjoyed an unchallenged perch atop the world economy - Europe lay in ruin as did Japan after WWII. China was yet to be a world economic power.  That's not the case now.

Another issue:  What has been achieved by all the spending?  In WWs I and II,  we achieved something of lasting value - survival, peace, victory.  Today we are spending at world war levels and achieving little more than an illusion of prosperity.  The politics make sense if not the economics.  By delaying the effects of runaway spending, politicians are shielded from ever being associated with the borrowing and money creation catastrophes they've created.    

What all this means is that we are in uncharted waters.  Just like subprime mortgages in 2007, the conventional assumption is that there is nothing dangerous about peacetime spending at this level and we will be able to taper or unwind without incident.  I was a skeptic back in 2007 during the subprime boom.  I'm a skeptic now too.

(Note on the graph:  Quantitative Easing is included as government spending in the years it occurred, 2008 - 2013.  That's because it is government spending!)