Wall Street Journal reports that Wal-Mart Stores Inc. plans to use removable radio ID tags on individual pairs of jeans and underwear supposedly to better control inventory (and prevent employee theft):
"Wal-Mart Stores Inc. plans to roll out sophisticated electronic ID tags to track individual pairs of jeans and underwear, the first step in a system that advocates say better controls inventory but some critics say raises privacy concerns.
"Starting next month, the retailer will place removable "smart tags" on individual garments that can be read by a hand-held scanner. Wal-Mart workers will be able to quickly learn, for instance, which size of Wrangler jeans is missing, with the aim of ensuring shelves are optimally stocked and inventory tightly watched. If successful, the radio-frequency ID tags will be rolled out on other products at Wal-Mart's more than 3,750 U.S. stores."
The hitch is, these tags can be removed but cannot be turned off. That's gotten some to raise privacy concerns:
"While the tags can be removed from clothing and packages, they can't be turned off, and they are trackable. Some privacy advocates hypothesize that unscrupulous marketers or criminals will be able to drive by consumers' homes and scan their garbage to discover what they have recently bought.
"They also worry that retailers will be able to scan customers who carry new types of personal ID cards as they walk through a store, without their knowledge. Several states, including Washington and New York, have begun issuing enhanced driver's licenses that contain radio- frequency tags with unique ID numbers, to make border crossings easier for frequent travelers. Some privacy advocates contend that retailers could theoretically scan people with such licenses as they make purchases, combine the info with their credit card data, and then know the person's identity the next time they stepped into the store."
What's troubling also is what the store (and others like Wal-Mart) is NOT doing: to embed the sensor in clothing, and that technology seems already available:
"Smart-tag experts dismiss Big Brother concerns as breathless conjecture, but activists have pressured companies. Ms. Albrecht and others launched a boycott of Benetton Group SpA last decade after an RFID maker announced it was planning to supply the company with 15 million RFID chips.
"Benetton later clarified that it was just evaluating the technology and never embedded a single sensor in clothing.
"Wal-Mart is demanding that suppliers add the tags to removable labels or packaging instead of embedding them in clothes, to minimize fears that they could be used to track people's movements. It also is posting signs informing customers about the tags."
And an obligatory inane comment from a supposed expert:
""Concerns about privacy are valid, but in this instance, the benefits far outweigh any concerns," says Sanjay Sarma, a professor at the Massachusetts Institute of Technology. "The tags don't have any personal information. They are essentially barcodes with serial numbers attached. And you can easily remove them.""
So as long as it benefits the business, we the 'small people' who shop and spend money to support the 70% of the GDP of the United States should put up with such a minor concern like privacy. Thank you Professor Sarma, that makes me feel proud to do my part!
The word "privacy" clearly doesn't mean a thing for the younger generations like this one, and as for the older ones, well, as long as it "keeps us safe and secure".
Like sheep and pigs tagged. They are secure until ...
Friday, July 23, 2010
Wall Street Journal reports that Wal-Mart Stores Inc. plans to use removable radio ID tags on individual pairs of jeans and underwear supposedly to better control inventory (and prevent employee theft):
Thursday, July 22, 2010
BP was caught doing it again, photoshopping the photograph of a supposed aerial (albeit low-altitude) shot from a helicopter. Just like the previous "fake" photos of the command center (here and here), telltale signs of mediocre photoshop job were easily spotted by someone who quickly forwarded the info to Gawker.com. If you click the photos at their site (not the photo on the left), you can view the high-resolution version so you can join the "finding Waldo" game and test your eyes.
Why did they do it? Probably just to look good on PR, not really expecting the scrutiny by the netizens. No malicious intent. The pictures were probably good enough for the only segment of the population who are not literate enough in tech or the Internet: politicians on Capitol Hill.
Wednesday, July 21, 2010
Latest: David Blumenthal, as Electronic Health Record Czar.
We now have 35 Presidential Czars and Czarinas, I think.
On my list, I do not include people who were appointed by the President but needed the Senate confirmation and/or are under Senate oversight. (Or I try to...)
Latest Addition (7/21/2010)
David Blumenthal as Electronic Health Record Czar, aka National Coordinator for Health Information Technology.
(Did you know that a huge chunk of health care "reform" was passed already when the Congress passed $800 billion stimulus back in February 2009? You would have known if you had read my post way back when. I would link it if only I could find that post...)
Latest addition (7/16/2010)
Health Food Czar Sam Kass, who continues to be the White House chef. Mr. Kass, who was Obama's personal chef back in Chicago (a mere Senator could afford a personal chef??), has been quietly appointed as "Senior Policy Adviser for Healthy Food Initiatives".
Other Czars and senior staff are paid $172,200, but there is no information about Mr. Kass's salary.
Latest addition (6/15/2010)
Oil Drilling Czar Michael Bromwich, in the wake of continuing disaster in the Gulf.
Latest addition (10/19/09)
Food Safety Czar Michael Taylor, ex-Monsanto executive and lobbyist
Manufacturing Czar Ron Bloom (double duty as Car Czar)
Latest subtraction (10/19/09)
Green Czar Van Jones resigned on September 5, 2009
Latest additions (8/31/09):
AIDS Czar Jefferey Crowley
Counterterrorism Czar (or Homeland Security Czar) John Brennan
Religion Czar Joshua DuBois (a 26-year old pastor who worked in Obama campaigns)
Trade Czar Ron Kirk
Safe School Czar Kevin Jennings (He is a founder of the Gay, Lesbian and Straight Education Network (GLSEN).)
Latest addition (8/25/09):
Green Czar Van Jones has been added. He was a co-founder of Color of Change, an African American political advocacy group which is now actively campaigning for the boycott of advertisers to Glenn Beck's program on Fox News. Green Czar's formal title is "special advisor for Green Jobs, Enterprise and Innovation at the White House Council on Environmental Quality".
Latest addition (8/21/09):
Science Czar John P. Holdren has been added. He advises President Obama on climate change and other science matters. According to the Senate Commerce Chairman John D. Rockefeller IV, Dr. Holdren is so miraculous that he can walk on water. Dr. Holdren has other rather unique ideas and philosophies on wide-ranging subjects (wealth, health, life), which will warrant a separate post.
Update - correction (8/17/09):
Vivek Kundra, previously listed as Technology Czar, turns out to be Information Czar. Technology Czar is actually his buddy, Aneesh Chopra, who got the job despite the fact that he doesn't appear to have any technology training (BA from Johns Hopkins University, Masters in Public Policy from Harvard University).
Already appointed: 34
- AIDS Czar (Jefferey Crowley)
- Af-Pak Czar (Richard Holbrooke)
- Automotive Communities and Workers Czar (Ed Montgomery)
- Bailout Czar (Herb Allison)
- Car Czar (Ron Bloom)
- Climate Czar (Todd Stern)
- Counterterrorism Czar (or Homeland Security Czar John Brennan)
- Drug Czar (Gil Kerlikowske )
- Economic Czar (Lawrence Summers. Or is it Paul Volcker?)
- Education Czar (Arne Duncan)
- Electronic Health Records Czar (David Blumenthal)
- Energy Czar (Carol Browner)
- Food Safety Czar (Michael Taylor)
- Great Lakes Czar (Cameron Davis)
- Guantanamo Closure Czar (Daniel Fried)
- Healthcare Czar (Nancy-Ann DeParle)
- Health Food Czar (Sam Kass)
- Information Czar (Vivek Kundra)
- Iran/Middle East Czar (Dennis Ross)
- Manufacturing Czar (Ron Bloom)
- Middle East Czar (George Mitchell)
- Oil Drilling Czar (Michael Bromwich)
- Pay Czar (Kenneth Feinberg)
- Performance Czar (Jeffrey Zients. She had to withdraw because of some tax problem...)
- Regulatory Czar (Cas Sunstein)
- Religion Czar (Joshua DuBois)
- Safe School Czar (Kevin Jennings)
- Science Czar (John P. Holdren)
- Stimulus Accountability Czar (Earl Devaney)
- Technology Czar (Aneesh Chopra)
- Trade Czar (Ron Kirk)
- U.S. Border Czar (Alan Bersin)
- Urban & Housing Czar (Adolfo Carrion Jr.)
- Violence Against Women Czar (Lynn Rosenthal)
- WMD Czar (Gary Samore)
Yet to be appointed:
Financial Regulation Czar (With the passage of so-called financial "regulation" bill, this is all but inevitable; or it may just mean the double duty for Chairman Bernanke.)
Copyright Czar (I have no idea if anyone got appointed. Here's petitioning for one.)
High-Value Detainee Interrogation Czar (See the post.)
Green Czar, to be refilled after Van Jones resignedSpeculative, for now:
Urban Demolition Czar (Dan Kildee)
Fat Czar (Richard Simmons) - I guess Sam Kass's appointment killed this one.
Art Czar (see the post, 3rd topic on the post)
It turns out the blowout preventer (BOP) originally manufactured by Cameron International was extensively modified under the order and instruction from BP. And that modification was done in China by a Chinese subcontractor to save money.
UK's Guardian reports:
BP oil spill: failed safety device on Deepwater Horizon rig was modified in China: Blow-out preventer was sent to Far East at BP's request rather than overhauled in US (Tim Webb, 7/18/2010 Guardian)
"BP ordered the owner of the Deepwater Horizon rig, whose explosion led to the worst environmental disaster in US history, to overhaul a crucial piece of the rig's safety equipment in China, the Observer has learnt. The blow-out preventer – the last line of defence against an out-of-control well – subsequently failed to activate and is at the centre of investigations into what caused the disaster.
"Experts say that the practice of having such engineering work carried out in China, rather than the US, saves money and is common in the industry.
"...There is no evidence that the significant modifications to the blowout preventer (BOP), which were carried out in China in 2005, caused the equipment to fail. But industry lawyers said BP could be made liable for any mistakes that a Chinese subcontractor made carrying out the work. It would be almost impossible to secure damages in China, where international law is barely recognised.
"It is understood that lawyers for Cameron International, the manufacturer of the BOP, will argue the device was so significantly modified in China that it no longer resembled the original component, and that Cameron should therefore not be held liable.
"Transocean, the owner of the Deepwater Horizon, which bought the BOP from Cameron, has already told congressional hearings into the disaster that the modifications were carried out at BP's request and "under its direction" as the lessee of the rig. BP and Cameron declined to comment this weekend." [Emphasis is mine. The article continues.]
Well, well. Then the cheap plastic seal made in China may have indeed been used in the BOP that was modified in China by a Chinese company...
It is the culture of BP, I'm afraid, fostered under the BP's previous CEO Lord Browne of Madingley, who also happened to be a director of Goldman Sachs until May 2007: to cut corners, to deceive, to pretend (that BP is a "green" company, for one), to suck up to the power that be, wherever they operate.
(I needed a chuckle to lighten up the day.)
The latest news from the Onion Network News...
Local Family Homeless After Tornado Destroys White House: 'We've Lost Everything,' Family Says (7/21/2010 ONN)
WASHINGTON—Barack Obama stands alone in the ruins of what was once his living room, calling out in vain for a dog that never comes. Less than 36 hours ago, his house stood proudly intact. But the violent tornado that tore through the region late Sunday night upended everything in an instant, scattering his belongings and leaving his family homeless and helpless.
"My God, just look at this," the 48-year-old government employee said as he surveyed the splintered furniture and mangled chandeliers that littered the 18-acre property. "Everything is gone. Our clothes, our family photos, the federal budget for fiscal year 2011—it's all gone."
Added Obama, "This was our dream home."
With no relatives in the area to turn to, the Obamas have been living in the basement of Calvary Methodist Church on M Street and bathing at the nearby YMCA. However, with the church running low on canned goods and funds to support the displaced family, Obama worries he and his loved ones may soon be forced to move into a shelter or live out of their motorcade.
"My youngest daughter keeps asking me when we can go home," said part-time social worker Michelle Obama, 46, who escaped the disaster with nothing more than her enduring spirit and the Narciso Rodriguez cap-sleeve silk dress on her back. "I don't know what to tell her."
As of press time, several items of sentimental value to the family remained unaccounted for, including Mrs. Obama's wedding gown, both daughters' baby books, David Axelrod, and an antique portrait of George Washington that had been in the home for generations.
For Mr. Obama, who had worked primarily from a home office, the tornado's merciless destruction has been a doubly painful blow.
"My desk was right here," said a drawn Obama, pointing down at a tattered, rubble-strewn carpet bearing the Seal of the President of the United States. "I'd sit here every morning with my cup of coffee and paper, quietly perusing the latest intelligence on credible terrorist plots against the U.S. mainland."
"I'd give anything to have the comfort of that daily routine back," Obama added.
According to the National Weather Service, the category F3 tornado was spawned by a line of severe thunderstorms that struck the District of Columbia around 11 p.m. Sunday. The funnel cloud, with winds gusting up to 165 miles per hour, touched down only briefly, carving a short but devastating swath of destruction along Pennsylvania Avenue that not only leveled the family's house, but also uprooted numerous trees and drove one of Obama's American-flag lapel pins 3 inches into the north face of the Washington Monument.
Although they had only lived in the charming 132-room house for a year and a half, the Obamas had been eyeing the residence for years before finally being able to close on it in November 2008. What Obama had worked ceaselessly to attain, however, was demolished in a matter of moments, with the ravaging storm not even sparing his wife's beloved backyard vegetable garden.
"A really loud roaring noise woke me up, and I just knew it was a twister," said Malia Obama, 12, clad in an ill-fitting 'Hillary 2008' sweatshirt donated by a family friend. "So, just like Dad taught us, we all ran out of our bedrooms, down the Grand Staircase, through the foyer, the East Colonnade, and the Garden Room, down into the East Wing sub-basement, and made it into the bunker just as the roof of the house was lifted off."
While the Obamas acknowledge that regrouping from such a devastating tragedy will be a long and difficult process, they are drawing strength from the overwhelming outpouring of support and generous donations they have received from friends, neighbors, and lobbyists.
"When I heard the bad news, I figured I'd swing over with a few longnecks for Barry and some intimates for Michelle," said Joe Biden, one of Barack Obama's coworkers, referring to the six-pack of Budweiser and assortment of women's underwear and negligee that he hand-delivered to the family Monday evening. "Hope she's a size 10. Sure looks like a 10."
that there is an open whole several miles away, from which oil is still gushing unchecked;
that this is a cover-up by BP and the administration on an unprecedented scale;
that the pressure gauge on the cap is a PR stunt;
that there's nothing we can do to stop it other than small nuke bomb;
that the cleanup cost (he doesn't seem to think we can clean it) will be over $1 trillion;
that the Gulf of Mexico is dead;
that BP's shares will go to $1.
Interview on Bloomberg TV on July 21:
Here's another interview he did with Kingworld News on July 17, 2010.
3-minute intraday chart of Dow Jones Industrial Average:
The market shorts thank you, Chairman Bernanke, whatever you're babbling in the hearing...
(UPDATE) CNBC reports that:
J.P.Morgan Chase and Goldman Sachs CEOs were not invited;
Bank of America and Morgan Stanley CEOs were invited;
California's CALPERS Chief Investment Officer was invited.
Another article on the matter at CNBC quotes:
“Basically, the White House made the decision to invite only the banks that were most sycophantic in the run-up to the passage of Dodd-Frank,” one senior Wall Street executive said.
You're not kidding...
There are some interesting names in the list that names part of "a wide array of nearly 400 individuals who were instrumental in passing this historic legislation" announced by the White House press secretary.
Two 'small people' from ordinary, suffering Americans supposedly shared the stage this morning (I couldn't bring myself to watch the video) with Obama:
Mr. Andrew Giordano, who "was saddled with hundreds of dollars in overdraft fees on his veteran’s account because his bank had automatically enrolled him in “overdraft” protection that he never asked for."
Ms. Robin Fox, whose "credit card company retroactively increased the rate on her existing credit card balance from 10.90% to 17.90%, even though she paid her account on time."
In the "Expected Attendees" of the WH announcement, we find:
President of UK bank Barclays (Bob Diamond)
Chairman of Barclays America (Archibald Cox Jr., who is the son of the special prosecutor in the Watergate investigation)
CEO of Citigroup (Vikram Pandit)
President of Bank of New York Mellon (Gerald Hassell)
President and CEO of National Council of La Raza (Janet Murguia)
Vice Chairman of Federal Reserve under President Clinton (Alan Blinder)
A Former Vice Chairman of the Fed and CEO of La Raza were "instrumental in" passing this historic (not in the sense that Gibbs the mouthpiece probably means) bill.
Just saw this on Yahoo Finance. I hope it's a joke, I hope it was taken from the Onion Network.
If my hope proves to be totally unfounded, this video is supposed to have been produced by the Obama White House to sell the disgusting FinReg to us 'small people'. (Goebbels would be proud.)
Since it is so inane and basically only says "bad banksters caused all this", I have a sinking feeling that this was indeed produced by the economics-illiterate Obama White House.
It actually makes me angry, not so much at the "banksters" but at the Congress and this administration and the past two ones. And the Federal Reserve. (And I hate such an inate piano music.)
Obama is scheduled to sign this piece of you know what into law on 11:30AM EST on Wednesday.
Or so it seems.
Obama's Pay Czar cum Oil Spill Escrow Fund Czar Kenneth Feinberg wants to subtract money that Gulf coast fishermen earn by working on the cleanup effort from any future damage claims against BP.
Dahr Jamail of Truthout reports:
BP's Scheme to Swindle the "Small People" (Dahr Jamail, 7/19/2010 Truthout)
"Gulf Coast fishermen and others with lost income claims against BP are outraged by a recent announcement that the $20 billion government-administered claim fund will subtract money they earn by working on the cleanup effort from any future damage claims against BP. This move, according to lawyers in Louisiana working on behalf of Louisiana fishermen and others affected by the BP oil disaster, contradicts an earlier BP statement in which the company promised it would do no such thing.
"Kenneth Feinberg, who was appointed by President Obama as the independent administrator of the Gulf Claims Facility for the $20 billion BP Deepwater Horizon oil disaster compensation fund, said yesterday that the wages earned by people working on BP's cleanup will be deducted from their claims against the company.
"He said the fund is designed to compensate fishermen and others for their lost income, and if BP is already paying someone to help skim oil and perform other cleanup work, those wages will be subtracted from the amount they're eligible to claim from the fund."
The article title is a bit misleading, because this would be news to BP, whose lawyer had formally written to the attorneys for cases pending in Lousiana:
"A.T. Chenault, a lawyer representing BP, responded in writing via letter stating, "We have no personal knowledge of the presentation of a Voluntary Waiver and Release to numerous people from Plaquemines Parish in Venice, Louisiana. However, it is the position of BP that any such documents will be rescinded and not binding on anyone signing same."
"Lastly, we confirm that BP will not offset payments to vessel owners or other volunteers against claims they might have," wrote Cheault, who is with the firm Fowler, Rodriguez, Valdes-Fauli." [The entire article at the link above.]
This blog already raised the question as to exactly whose interest Mr. Feinberg intends to represent in dispensing this fund.
But other questions beg answers, too.
1. Has anyone seen the actual signed agreement for the escrow fund?
2. What is in the agreement, exactly?
3. Who signed the agreement? BP and ....? Obama?
4. If Obama, who (or what) gave him the authority to demand and sign an agreement like that?
5. Where was Congress?
6. Where is Congress now?
7. Why isn't anyone demanding to know what is in the agreement?
8. Why isn't anyone asking why this private attorney (Feinberg) has any authority to dispense this fund? Just because Obama said so?
9. Is Mr. Feinberg's law firm set to benefit in any way? If so, in what way? (The article does mention that the attorneys with cases in Louisiana court are planning to meet Mr. Feinberg's law partner Michael K. Rozen.)
Interestingly, Mr. Rozen was seen speaking to attorneys, insurance companies, government agencies and answering questions in Oil in the Gulf Conference, explaining this escrow fund. He was addressing himself as "we", indicating he is a part of the official team. (So if Obama appoints Feinberg, his partner is also automatically in??)
This escrow fund (if there's any money in it) smells more and more like the settlement of a big class action lawsuit, except the settlement is already at hand without the lawsuit. Just like any class action lawsuit settlement, likely winners are the attorneys representing the 'small people' who will receive pittance. If that.
Monday, July 19, 2010
That's got to be the first, a Keynesian success...
Germany's New Economic Miracle - A Keynesian Success Story
(7/19/2010 Spiegel Online)
"During the worst of the global financial meltdown, Berlin pumped tens of billions of euros into the economy and spent hundreds of billions propping up German banks. Now, the country is reaping the benefits as Germany is once again Europe's economic motor.
"It was just the sort of photo-op German Chancellor Angela Merkel urgently needs. Peter Löscher, the CEO of electronics giant Siemens, was sitting on a throne-like chair in the governor's palace in the central Russian city of Yekaterinburg. Contracts were being handed to him in brown leather folders, and every time Löscher signed one of the documents with his malachite green pen, the chancellor clapped with delight. The procedure took place four times, and by the time the round of contract signing ended, Siemens had secured Russian orders worth about €4 billion ($5.2 billion).
"The real purpose of Merkel's five-day visit to Russia and China last week was to hold political talks with the two countries' leaders, but the most important message of the trip was meant for the German people. Look, Merkel seemed to indicating to German citizens, German industry is in demand worldwide, even if the government at home is divided and lacking direction.
"The German economy has indeed come roaring back to life this summer. Two years after the outbreak of the financial crisis, the auto industry is adding extra shifts once again. The machine building, electronics and chemical industries are all reporting a rapidly growing number of orders. Total unemployment is expected to drop below the 2.8 million mark this fall, the lowest level since 1991.
"For the first time in decades, the former "sick man of Europe" is back to being an engine for economic growth. According to an internal government assessment, the country's gross domestic product increased by more than 1.5 percent in the second quarter of this year. In their last prognosis, completed in April, government officials had predicted only 0.9 percent GDP growth. Production in the manufacturing industry increased by 5 percent over the previous quarter. The government assessment also shows that exports grew by more than 9 percent in May." [Emphasis is mine. The article continues.]
The article defends the government spending and guarantees, even though they were ill-spent (bridge to nowhere, building a school only to have it shut down, etc.) and often unnecessary (loan guarantee to solvent companies who kept the money just in case). The article claims the government action kick-started the economy, and the economy took on its own momentum and started to grow.
With the numbers like these in the article above, it is understandable that the Spiegel wants to attribute success to Keynesianism.
Angela Merkel's coalition government has provided 480 billion euro stimulus (US$620 billion), 400 billion of which is loan guarantees and $80 billion for assisting banks in recapitalization. About 38% of the money has been actually spent so far.
In the US, the government has done way more, to the tune of $12 trillion in various programs and loan guarantees, but hasn't got much to show for it other than some inventory build-up.
What does Germany have that the US does not? And what does the US have that Germany does not?
Germany continues to manufacture things that countries around the world want, even at a premium - automobiles, machinery, electronics, chemicals.
The United States has Obama.
So the First Dog Bo got his own private jet, attended by Obama's personal assistant Reggie Love.
The Obamas enjoyed another nice vacation (inconveniencing residents and tourists along the way), the third since BP's oil spill started in April 20, the seventh since Obama became the president. (Bush was criticized for clearing brush in his own ranch.)
Obama's golfing hours far exceeds the pace set by his predecessor.
Now comes another party at the White House, featuring Tony Award-winning Broadway actors.
Good to know Obama is enjoying life as the president of the United States. I just wish he did all these with his own money.
I also wish he at least pretended to work longer than his schedule suggests. This is his schedule for the day (hey, lunch with Biden is missing today!):
10:30AM: President Obama delivers a statement to the press about the economy
10:45AM: President Obama receives the Presidential Daily
11:15AM: President Obama receives the Economic Daily Briefing
12:00PM: President Obama meets with senior advisers
1:40PM: President Obama welcomes the WNBA Champion Phoenix Mercury to the White House to honor the team's 2009 championship season
2:05PM: President Obama meets with Senator GlennNothing for the rest of the afternoon, until 7:00PM when this Broadway musical event takes place.
I admit I was naive. I thought the UK Conservative Party actually meant it when it said it would reduce deficit by slashing the departmental budgets by as much as 25%. I thought maybe, just maybe, the UK's businesses would actually become more competitive when the government stopped wasting resources and capital and let private businesses and citizens decide what to do with their money.
Conservative Prime Minister David Cameron is going the way of Progressive Left - Lindon Johnson ("Great Society") and Barack Obama (community organizing), with a new twist: he wants to achieve his "Big Society" vision by community organizing effort by non-profits directed by his government, but fund that effort by raiding dormant bank accounts in the UK held by private citizens. The raided funds goes to his Big Society Bank, and he will dispense money to foster community organizing throughout the country as he and his bureaucrats see fit.
UK's Telegraph reports:
David Cameron sets out Big Society plan (7/19/2010 Telegraph UK)
"David Cameron has issued an invitation for communities across the country to take over responsibility for services ranging from libraries to housing developments.
"In a speech setting out his vision for the “Big Society,” which he described as the mass transfer of power from the state to “people power,” the Prime Minister said that it was his “mission” to create a generation of volunteers.
"Four areas in diverse parts of the country have been chosen to form a “vanguard” in realising Mr Cameron's dream of “people power”. [...groan...]
"The four – the greater London borough of Sutton and Cheam, the leafy Berkshire council of Windsor and Maidenhead, rural Eden Valley in Penrith, Cumbria, and the metropolitan city of Liverpool - were chosen after they petitioned Downing Street to start their own projects.
"They will be the first to be invited to submit applications to the Big Society Bank.
"The four pioneer communities will be helped by dedicated civil servants who will give expert advice if they encounter legal problems or bureaucratic obstacles.
"Officials will also identify local residents with a particular aptitude for taking part in Big Society projects – they will then receive training to become community organisers, motivating their neighbours to take part in action schemes.
"They will also be able to draw on the Big Society Bank, which, Mr Cameron promised, would use “every penny of dormant bank and building society account money” to help finance social enterprises, charities and voluntary groups.
"Accounts left untouched for at least 15 years will be channelled to good causes. Over time, Mr Cameron said, the Bank would provide “hundreds of millions of pounds” to Big Society projects, with money starting to be distributed from April." [The article continues.]
The law that allows confiscation of dormant bank accounts already exists, though the banks have been reluctant to use it.
The article gives examples of "community organizing" efforts envisioned by the "Big Society" which is to be build upon the money confiscated (or stolen, if you prefer) bank accounts under the direction of the government bureaucrats:
- Help finance social enterprises [called "social entrepreneuring" in the US], charities, volunteer groups (Sound familiar?)
- Local residents to be picked by government officials to serve as "community organizers" to organize their neighbors (Sound familiar? The US already has a law passed April last year, and it's called "Serve America Act of 2009".)
- Public services to be run by "volunteers" (like this?)
- Power to buy out "local assets" (Sound familiar?)
- Bringing broadband Internet to local communities (Sound even more familiar?)
Peggy Noonan's plea to David Cameron to not follow Barack Obama clearly fell on the totally deaf ear of the Prime Minister. He is following every single step, and more.
Cameron's Big Society doesn't seem much different from the Third Way advocated by Labour (Tony Blair, Gordon Brown are the most recent examples).
When he meets Obama this week, he may even inspire the community-organizer-in-chief to start grabbing money from accounts held by private citizens.
Japan's prime minister, who was also aping Obama's every single policy, didn't last a year. That's the only hope I have for British businesses and citizens - that Cameron won't last a year if he copies Obama.
Sunday, July 18, 2010
The chatter of imminent QE2 is getting louder by the day (here, here), as the economy shows more signs of slowdown (to put it mildly). The ECRI's Weekly Leading Indicator is perilously close to -10%, which may indicate the double-dip recession in about 13 weeks. (Never mind that the economy in many parts of the country didn't even recover in the first place.)
The last time around, the Federal Reserve did the quantitative easing by buying up Treasury notes and bonds, MBS, and agency bonds from the banks; in return, the banks simply parked the proceeds at the Fed, as excess reserves. Precious little money flowed into the real economy aka Main Street. Big banks thrived, with cleaner balance sheet and virtually free money from the Fed to invest and trade. When they invested, they invested in the safest debtor - the US government - by buying Treasuries. (Never mind that we the 'small people' end up paying those interests to the banks. We are the perpetual money making machine for the banks.)
So this time around, what would the Fed buy, and how, if it actually is to attempt to "revive" the flagging economy?
Doing what it did the first time but doing it in a larger scale ($4 trillion instead of $2 trillion, for example) wouldn't likely produce a different result. Banks would probably continue to hold the proceeds as excess reserves, and would not lend. Instead of $2 trillion balance sheet, the Fed would have $4, 5 trillion balance sheet, and nothing else would change.
It's not the amount of money for QE2; it's how it is done that will have consequences.
If the Federal Reserve decides to do the Quantitative Easing part two (or the Obama administration decides for the Fed), the administration may insist that the QE2 operation benefit Main Street this time. (Never mind how the cheapened dollar with less purchase power is supposed to benefit Main Street. The people in this administration, like the ones before, are ignorant of economics.)
So what choices does the Federal Reserve have, in terms of what else to buy and how to buy?
1. The Fed buys Treasuries directly from the government (monetization), and the government spends the money.
2. The Fed buys real assets from non-bank businesses, even from individuals. It already owns an empty shopping mall and an oil rig, via Bear Stearns.
3. The Fed buys sovereign debt from troubled European countries, prints and ships US dollars to these countries. Part of it will come back to the US as these countries pay interest to the existing debt holders (Wall Street banks), part of it will be spent by their governments, perhaps artificially reviving their economies so they are more inclined to buy stuff, hopefully from the US. In a very roundabout way, the money will flow to the real economy in the US. Sovereign debt from PIIGS will be part of "assets" that backs the US dollar.
The Fed may refuse to do QE2 at all, of course, and the economy may not tank without QE2. But the perceived reality is what counts these days, and that reality is that unless the Fed does QE2 it is going to be a deflationary depression right here, right now.
As a self-proclaimed expert on the first Great Depression, Bernanke cannot risk that perception to tarnish his reputation (if he thinks he still has it), can he?
There is a way to force money into Main Street right now, without QE2. Dr. Gary North has been saying this for some time. It is to force excess reserves out of the Fed's balance sheet by charging fees on the reserves instead of paying interest as the Fed currently does, so that banks move the money out of the Fed and invest in "riskier" investments.
Banks will likely opt for investing in the Treasuries, at least initially, instead of businesses that creates capital and jobs. Once the government gets that money, unlike businesses (including banks) and consumers, it has no problem spending all and more. However inefficiently, the money will flow to the real economy.
The problem is that we do not have a free market any more, which efficiently prices the values of money, capital, labor, assets, and liabilities. The money thus unleashed into the real economy will be mispriced and misallocated. Now that the financial "reform" bill has passed the Congress, the control of money flow will be handled by a committee of politicians and the administration officials supported by technocrats. I thought that kind of experiment died with the Soviet Union.
I don't see a way out.
From Japan's Yomiuri Shinbun. A reader of the newspaper (Soichiro Watase) sent in this photograph he took, of the rainbow-colored cloud.
Now that he signed it into law, Obama says the health care insurance reform is a form of taxation and not the "right". Oh really. As if the majority of Americans who opposed (and still oppose) the Obamacare didn't know. I mean, really.
Changing Stance, Administration Now Defends Insurance Mandate as a Tax (Robert Pear, 7/16/2010 New York Times)
"WASHINGTON — When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”
"And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.
"Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations.
"In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.
"Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.
"While Congress was working on the health care legislation, Mr. Obama refused to accept the argument that a mandate to buy insurance, enforced by financial penalties, was equivalent to a tax.
"“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”
"When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.” "[Emphasis is mine. The article continues.]
These people have no shame. They just say anything to get their way, and they have no problem changing the tune to fit their new purpose (in this case, fend off the lawsuits). Would anyone hold them accountable for their words?
Hell no. After all, this is an administration led by a president who won and accepted the Nobel Peace Prize as he started bombing Pakistan immediately after the inauguration. Some people have finally started to smell a rot (or "sense of malaise" for the sophisticated) and it's started at the top.
Now, what would the supporters of this so-called health care "reform" say?
Later in the same article,
"“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.
"In their lawsuit, Florida and other states say: “Congress is attempting to regulate and penalize Americans for choosing not to engage in economic activity. If Congress can do this much, there will be virtually no sphere of private decision-making beyond the reach of federal power.”"
Exactly. And absurdity of it all. And now they passed the financial regulation bill that will regulate how the money flows in our economy. If it flows anymore, that is.
Nullification will be the only answer.