Ice Bucket Irony

What to do about ISIS?

What should we do about ISIS?  (Or as the president prefers, ISIL, which uses the French diplo-speak term Levant for the mideast, and after all who amongst us doesn’t get a tingle up their leg from using French diplo-speak?)  Whatever you call it, we should do everything we can at the local level, here in the US, to prevent domestic attacks from these extremely dangerous jihadists.  Overseas, we should retreat from areas where ISIS may attack.  Beyond that we should probably pray.

I realize this is a contrarian position.  There seems to be a bi-partisan consensus forming that the Obama administration must take bold and decisive action to fight ISIS “over there, so we don’t have to do it here”.  Never mind that this sentiment was once known as “The Bush Doctrine”, and that it’s repudiation is one of the core ideologies of our current president -- it only makes sense as national policy with a competent Commander in Chief.  Barack Hussein Obama is not and will never be that person. 

If you want to occupy the student union, Obama is your guy.  If you want to choose brackets for March Madness, Obama is your guy.  If you want to hear platitudes read off a teleprompter, Obama is your guy.   If you want to hear how this country is racist, guilty, flawed, corrupt, unfair, mean, nasty, sexist, and has a crappy constitution, Obama is your guy.  If you want to play golf, attend fundraisers, and do talk shows, Obama is your guy.  But if you want to communicate with deadly radical jihadists in the only language they understand, the language of force, I’d recommend anyone other than Barack Hussein Obama, and that includes my Labradoodle.  

So let’s prepare ourselves here and do everything we can to ensure the jihadists can't hurt us.   Beyond that, let's do nothing until we have a competent president.  Will there be chaos and mass casualties?  Perhaps.  But going to war with an incompetent commander would be like having open heart surgery performed by a comedian -- better to do nothing, pray, eat healthy, and get to the gym.

America, We Have a Problem

I have no idea what happened in Ferguson, MO, and neither do you.  And we all agree any unnecessary death is a tragedy.  But we have a judicial system to deal with bad cops, if that turns out to be the case.  Rioting, looting, Molotov cocktails, death threats, and the like, should be singled-out as inexcusable no matter what the facts turn out to be.  Justice can only be served through our judicial system and that takes time, patience, civility, and wisdom.  Instead of making that case convincingly and emphatically, as a president should,  Barack Obama spoke to the nation in bland platitudes and equivocated.  

America, we have a problem.

(Update:  Obama spoke to the nation again yesterday (8/18) and again equivocated.  If he wanted to avoid further violence, looting, anger, and hate, he could have explained to those calling for "death to Darren Wilson!" that we have a judicial system and that the facts will come out as they do in every public case, especially when there are dozens of eye witnesses as there are in this case.  But this case should not be tried on TV, or in the streets,  or from the pulpit, or with molotov cocktails.  Instead he drew a moral equivalence between our judicial system and looting rioters.  Think about this America --  The President of the United States, for political reasons, does not want to prevent further violence, looting, anger, and hate.)

August Super Moon

#WhenMoronsVote

PEACE PRIZE PRESIDENT POUNDS ISIS!  Today Obama began the third Iraq war, which of course was completely avoidable had he not failed to keep a deterrent force in place.  We were no longer losing soldiers there on a regular basis, the peace was holding, the government was bad, but not as bad as Hussein, it was a nascent democracy that was free to elect new leaders, and it was costing us very little to be there and deter radicals like ISIS.  But no, Obama had a campaign promise to keep so we pulled out completely and left a vacuum.  In the last week alone, ISIS murdered some 3000 civilians in Iraq.  That's in one week.    

So now we are bombing from 30,000 feet, which of course is the preferred method for Peace Prize enthusiasts.  I'm sure Obama will use the Israeli system of dropping leaflets, making phone calls, and knocking first before bombing.  Hey, that's what he did in Libya, right?

In light of this, it's time to revisit the whole series of "Obama is Awesome!" cartoon videos.  Here they are in order:







 

An Open Letter from Benjamin Netanyahu to The American People

Dear America,

I too share your desire for peace.  Like you, I am tired of the seemingly endless cycle of violence.  It gets to the point where no one can even tell you where it all began.  And certainly each side has its own version of history!  

I have a unique proposal that will once and for all put and end to this conflict.  Of course, some hard choices will have to be made.  I know I can trust the American people to hear me out, and give this some careful thought.  If we agree that peace is the desired outcome, and that neither side has been able to secure it yet, what choice do we have but to try something new?  Doing the same thing and expecting a different result is the very definition of insanity, right? 

Let’s look at some of the elements we can all agree on before getting into the specifics: 

1. Both sides believe their positions are justified and worth fighting for. 
2. One side has the military might, and the other suffers disproportionate casualties. 
3. Both sides would like to exist and govern themselves in a manner to their liking. 
4. The international community has put its faith in “land for peace” as an appropriate solution.

In light of the above, I do recommend swapping land to allow the nation-less to establish their own self-governed nation.  The new nation would be free to pursue all the freedoms enjoyed by nations everywhere:  they will be able to arm and defend themselves, they will be free to trade with other nations, they can make and produce all the things they currently produce and disseminate.  They would be free to establish Sharia Law if they please.  We may not agree with the things they produce, what they disseminate, or how they treat others, but it would be their country, ruled by them, sovereign, free, and independent. 

There are already examples of Muslims living peacefully with non-Muslims all over the world.  Several such examples are already right in your own country.  Dearborn, Michigan is sometimes referred to as “Dearbornistan” owing to its majority Muslim population.  There are similar examples throughout the US in numerous states.  Perhaps the best example is Illinois, which has more Muslims per capita than any other state, and no one thinks of Illinois as a terror state!

Once established, this new state would be a beacon for like-minded people to immigrate to and live in peace, free of the oppression they currently experience thanks to the endless conflict.  Bombings, raids, drone attacks, captures, prisons, -war itself - will no longer be an imperative!  I know this will not be easy, but it must be done and it must be done now!

Therefore, I believe Illinois would be the perfect place to establish the new state of “al Qaedastan”, or if you prefer, “ISIS” (Islamic State of Illinois and Syria”), a two-state solution, which will once-and-for-all end the violence.  Finally, America and al Qaeda, living side-by-side in peace.  Join me America, and stop this madness now! 

Sincerely,

Benjamin Netanyahu

Prime Minister, Israel

P.S.  A majority of The UN has already endorsed this proposal.  This must be done at once if the US hopes to remain among the community of nations.

P.P.S.  I also believe that Khalid Sheik Muhammad, the political prisoner currently in your custody, should be freed like Nelson Mandela, and would likely rise to lead the new nation of al Qaedastan.  Furthermore, I have taken the liberty to nominate KSM to the Nobel Committee for consideration for the peace prize.  As expected, they are onboard 100%!

USA vs. Europe

I find myself in a bit of a conundrum.  Having just gotten back from a trip to Europe, my seventh in about a dozen years, I continue to be amazed by the visible and tangible evidence that Europe is kicking our butts in a number of economic areas.  Sure, I’m aware of the things we like to focus on when we poopoo Europe’s economic performance:  structural unemployment, highly socialized economies, bloated governments, frightening demography, etc.   Nevertheless, their stuff is just better than our stuff.  Just about everything that is manmade is of a higher quality, better maintained, and more functional in Europe than in the US.  And yet, I have always thought that big-government Europe could never compete with the US with its emphasis on individual liberty and limited government.  How can these bloated bureaucracies be kicking our butts when it comes to making and maintaining high quality stuff?   Apparently I need to rethink my premises.

First, some observations from my most recent trip.  The eye popping differences began with the flights.  As it happened, we flew Lufthansa over and United back.  No surprise: Lufthansa won hands down.  The Lufthansa Airbus A340-600 was new, staff was courteous (and gorgeous), food good, even in coach the silverware was metal, and alcohol, including good wine, was available without additional charge.  The United return was an aging Boeing 767 in bad need of an overhaul (as was the staff), alcohol was extra, and halfway through the flight the bathroom was out of toilet paper and remained so the rest of the flight. 

We flew into Munich where the escalators all worked, the luggage carousels purred, and the rental cars were all BMWs, Mercedes, Audis, and VWs in excellent condition.  When we landed back in Newark, somewhat depressed by the return flight experience, the first escalator we encountered was, appropriately, not working. 

Of course, tourists usually see the best of what a locale has to offer.  But the same can be said of where I live in the US.  I spend nearly all my time in areas that cater to tourists and are analogous to the areas I’ve visited in Europe.  ( I know, pinch me!)  That said, I am blown away by the level of construction and the quality of the properties in Europe.  You cannot even compare high-end construction in the US with the same level in Europe.  What we call the finest door or window in the US wouldn’t even qualify for a shed in prosperous parts of Europe.  The same can be said for just about every detail in high-end construction.  Europeans build for the long run.  In the US, most of what we build is disposable and reflects that. 

Infrastructure in Europe also wins hands-down over the US.  Trains throughout Europe are superior, even in the indebted countries like Italy and Spain.  They run on schedule, go fast, and can take you (and your bike and dog) just about anywhere.  Roads, funiculars, cog railways, and even hiking trails have been built and are maintained to an amazing degree in the most inhospitable of places.  Autobahns are plenty smooth at even 100mph.  You can hike for hours up just about any mountain in the Alps, and chance upon ancient Inns that are only accessible by foot (or now helicopter), and get a beer, a delicious meal, a hot cappuccino, and often a room. 

On the technology front, again a mismatch.  I’m proud that much technology originated in the US, but Europe has adopted it as well as anywhere.  Smart phones, computers, and broadband internet are ubiquitous.  Some things however haven’t made it the other way across the pond.  Anyone who’s stayed in a European hotel knows that the key card must be inserted before the power goes on.  How many coal fired plants could we do without if we adopted this simple idea?  European waitstaff enter orders digitally and remotely, accept credit cards remotely, and hence can serve more tables more efficiently than we can with our centralized and more manual systems.  I believe this is a consequence of the European custom where the waitstaff works for the restaurant and is paid a salary, versus the US custom where the waitstaff largely works for the diner via tips (a system I prefer as a diner, btw).  Seems to me better efficiency would benefit restaurants and diners, but this technology has not been adopted in the US. 

Back when I first visited Europe in 1974, the rap on the old world was that you couldn’t find decent toilet paper and the commode would likely be a hole in the floor.  No more.  On this trip I encountered a public bathroom halfway up a mountain, in Italy no less, that practically wiped your bum for you.  Electronic toilets, electric doors, faucets that both washed and dried your hands, and door handles that changed color to indicate occupancy.  It was a level of technology and excellent design in a public restroom I’ve never seen anywhere in the US. 

So, how is Europe able to have bigger government, more redistribution, more regulation, hence less economic freedom, and at the same time produce tangible things that are superior to ours?  The answer is that they do not necessarily have less economic freedom.  Despite the best intentions of our founders, in many ways Europeans today are the economically freer people! 

For twenty years now The Heritage Foundation has published a ranking of countries based on economic freedom.  At current standing the US is #12.  Switzerland is #4.  Overall, four European countries beat the US:  Switzerland, Ireland, Denmark, and Estonia.  Of the top twenty, ten are European.  And yet, I believe Heritage understates Europe’s economic freedom and overstates ours. 

Wherever you go in Europe you see things you would never see in the US.  Swimming pools have diving boards, hotels have trampolines, and in the Alps, parapenters (hang gliders) and squirrel suit flyers are everywhere.  Sometimes people die or are injured doing these things, but Europeans are free to take these risks, and businesses are free to offer these experiences.  A tort system that supports litigious actions effectively limits our freedom in the US without specific laws banning behavior.  I once tried to rent a mountain bike in NJ but was told insurance rates due to litigation made that impossible.  The result is a loss of freedom and economic freedom.  Heritage does not account for the effects of our tort system and our lawsuit culture on economic freedom. 

Also, remember how we were supposed to be the country specifically designed to have limited government and unprecedented liberty?  Remember how that was the thing that made us “exceptional”?  Well, according to my calculations, six European countries have more limited government than we do, and some of them are prosperity powerhouses:  Switzerland, Slovakia, Estonia, Poland, Ireland, and Norway (which is tied with the US).   Moreover, three more are within the margin of error:  Luxembourg, Czech Republic, and the industrial powerhouse of Europe, Germany. 

(*This is a larger list than the one Heritage arrives at.  See note at the end for a full explanation of the method I use versus the one Heritage uses.)

Sure, not everything in Europe is awesome.  There are slums in Europe just as there are in the US.  Having fast trains, nice buildings, great cars, and amazing infrastructure doesn’t create a classless society.  To do that you have to go full Socialist, or full Communist, and then you end up with none of the above, except of course the slums and a few grand palaces. 

Here’s the upshot: 

Europe is highly decentralized, being made-up of sovereign nations, often with semi-autonomous regions within those nations.  The US is now highly centralized with states that have fewer rights than ever in our history.  Decentralized systems are inherently more resilient.  Europe is a place where you can find limited government, reasonable regulation, democracy, human rights, personal accountability, prosperity, freedom, rule-of-law, etc. all in one place, though certainly not everywhere.  The US is a place where you cannot find all those things to that degree in a single place thanks to centralization.  Advantage Europe. 

Europe now does its redistribution in the right place thanks to the Euro - away from the political entity that prints most currency (The ECB).  The US redistributes at the federal level where it also prints it’s currency setting up a fatal conflict of interests.  National debt per capita is currently $30,504 in the Euro countries.  It is $55,228 in the US.  Advantage Europe. 

Europe is a place where citizens can drive as fast as they please, but they are accountable.  The US is a place where the federal government dictates driving speeds.  Europe is a place where public swimming pools have diving boards, hotels have trampolines, and citizens are accountable to use them responsibly.  The US is a place where its citizens are denied many freedoms due to a litigious tort system and centralized federal power.  Advantage Europe.

The US has the highest corporate tax rate in the industrialized world along with a tax system that seeks to tax foreign earnings as well as domestic.  European countries only tax earnings in their own country, hence many US companies are doing"inversions" where they merge with smaller European companies and move their headquarters there.  Advantage Europe.

Europe produces better stuff, and in many ways, a better standard of living.  They just do.  Much of this is cultural, but the result is undeniable.  Advantage Europe.

I used to maintain that the US was a place with unmatched adherence to the rule of law, a constitution that protected our rights, limited government, economic freedom, and a future second to none.  Now I admire Europe. (With a caveat for demography, although ours isn’t looking too good either!)

(Update - Certainly one reason Europe produces better stuff is due to history; Europe, and especially Germany, have a highly evolved Guild System in place, which has been churning out the world's best tradesmen and craftsmen since before Columbus sailed to the New World!  But that does not diminish the role of economic freedom in determining the quality of goods in a nation.  All one need do is look at the examples of East and West Germany, or North and South Korea where similar cultures resulted in radically different outcomes due to freedom, both political and economic.

Also, whenever discussing economic history, particularly when comparing the US and Europe, the role of WWII must be acknowledged.  A major reason for US economic power in the post WWII world was due to the fact that we emerged the largest intact industrialized nation by far.  Europe and Japan were smoldering ruins, and China was still in loincloths.  Those days are long gone, yet we are still enjoying the fruits of that post WWII world with our dollar being the world's reserve currency.  Imagine how our $18 trillion debt will look if the dollar loses that status?)     

*Note on government spending:  My ranking of government spending differs from Heritage’s in two ways:  I compare government spending (all federal, state, and local) to just the private sector portion of GDP for all countries.  Heritage uses both the public and private part of GDP in the denominator, which is problematic especially in measuring the US, which has been on a money printing, borrowing, and stimulus binge.  To correct for this, I consider only the private portion of GDP (GDP less Government Spending) for all countries.   The Heritage formula is, Total Government Spending divided by GDP, and mine is Total Government Spending divided by (GDP less Government Spending). 

Also, Quantitative Easing is not specifically accounted for in Heritage’s government spending numbers.  I do include it because it is government spending. 

For a full explanation of my method see “The True Tax Rate is 70%!” 

All numbers come from the OECD (Organization for Economic Co-operation and Development) data.  (not all European countries participate in the OECD)

The Immaculate Recession

Two days ago, on June 25^th 2014, the third update to GDP numbers was released for the first quarter of the year, and the latest numbers show a GDP change of -2.9%.  This is pretty amazing since the consensus opinion going into the quarter was for +2.5%, the advanced estimate in April was for +0.1%, the first revision in May was for -1%, and now the second revision in June is a whopping -2.9%!

Even in a business like economic forecasting and reporting, which is known for being particularly dodgy, this discrepancy is unusual.  But there may be a simple, though not comforting, explanation for this wild swing. 

Consider that the official definition of a recession is two consecutive quarters of negative GDP growth.  Therefore, the lower the first quarter, the easier it will be to avoid the “R” word when the second quarter is reported.  For example:  if the first quarter had actually been -1.5% and the second quarter comes in again at -1.5%, that would ring the recession bell and the overall 2014 GDP would be -1.5%.  But if the GDP really is -1.5% after two quarters, and the first quarter is reported as -2.9%, then the second quarter can be reported as +1.4%, and no recession will have officially occurred!  Call it the immaculate recession. 

Now you might be saying, “that’s ridiculous , the Bureau of Economic Analysis (BEA) is a highly respected non-partisan government agency which would never manipulate official numbers to benefit incumbents during an election year!”  Yeah, tell that to the victims of the IRS, FDA, FBI, INS, DOJ, NLRB, NTSB, Fish and Wildlife, etc, etc, etc. 

Update: Oh, and remember this?  Census "faked" election 2012 jobs report.

Ben Stein Hits the Mark

Ramirez Hits The Mark

Lifted from Investors.com, with apologies.