Saturday, December 12, 2009

Ron Paul Votes Against His Own Amendment

to be exact, against the bill that contains his own amendment.

Ron Paul votes against his own amendment
(Robert Rule, 12/11/09 San Francisco) [emphasis is mine]

"Congressman Ron Paul (R Texas) is the last true statesman. Want proof, the Congressman and 2008 Presidential candidate fought more than twenty years to finally create an amendment to fully audit the Federal Reserve, which is the main cause of the present financial crisis.

"The Audit the Fed bill was accepted as an amendment to a larger bill, the Wall Street Regulatory Overhaul. Even though the congressman’s bill was attached he could not in good faith vote for the larger legislation. Imagine a country full of men like that. Imagine just having 100 representatives like that.

"The legislation will now go to the Senate for a vote. Ron Paul said “I have no clout in Congress, it was the people (grass roots) who made this happen.” A good guess would be that the Senate will try to take this amendment out. Reportedly, Senator’s are a little closer to those at the Fed than Congressman. It will be up to the people once again to make sure this amendment sticks if the larger bill is passed." (The article continues.)

I had suspected that Dr. Paul would do exactly what he just did. In good conscience he couldn't have voted for the larger bill, H.R. 4173 "The Wall Street Reform and Consumer Protection Act of 2009", which will create another federal bureaucratic monstrosity called Consumer Financial Protection Agency and will give the federal government unprecedented authority to seize a private entity which it deems to be of a threat to the greater economy, even before the threat becomes real. And of course that "threat" is defined by the government.

Sound familiar to you? It should, because that's the Bush doctrine of preemptive strike even if the threat is not there. All this government needs is a possibility of a threat that it may jeopardize the system sometime in the indeterminate future.

Are we entering the Greater Depression, contrary to what Obama said ("we avoided the depression" he averred the other day), where the government is set to control every single aspect of our economic life to "save us from ourselves", so to speak? From our capitalist mentality that a free market gives us prosperity, from our (dwindling majority, maybe) deeply ingrained belief that we can pull ourselves up by our bootstraps?

Thursday, December 10, 2009

Congressional Dems to Raise Debt Limit by $1.8 Trillion

Why even bother setting a limit?

Currently, the debt limit is at $12,104 billion. The Congressional Democrats want to raise it by $1,800 billion (or if you prefer, $1.8 trillion) to $$13,904 billion, a 15% increase over the current limit.

(Source: "The Debt Limit: History and Recent Increases" April 7, 2009, Congressional Research Service)

According to Politico's article, "Dems to lift debt ceiling by $1.8 trillion, fear 2010 backlash" (12/9/09) (Politico, by the way, is the latest target of dissing campaign by the thin-skinned White House), of that $1.8 trillion, over 60% of that will be appropriated in the very near future, like within this year:

  • $636.4 billion Pentagon appropriations bill
  • $446.8 billion year-end package covering more than a dozen Cabinet departments and agencies and representing a healthy 9 percent to 10 percent increase over current spending for the same accounts.

There you go. 60.2% of the debt ceiling increase is gone with just these two bills to pay for the ever-expanding government.

Add to that the unused portion (majority) of the February stimulus bill, which so far has preserved about 600,000 jobs including 3 in Hillary Clinton-related PR firms that received nearly $6 million. The government's official accounting method is cash accounting, even though they do keep books using accrual method. Cash accounting doesn't account for money unless it is actually spent. When that bulk of stimulus money hit Main Street, as is planned right now for 2010, you can pretty much kiss the new debt ceiling goodbye much sooner than Congressional Democrats are hoping.

According to Politico, House Majority Leader Steny Hoyer told Politico "We’ve incurred this debt. We have to pay our bills."

Who are "we"? I have a feeling that "we" in his first sentence is different from the "we" in his second sentence. The correct sentences would be: We the Congress and the Government have incurred this debt. We the taxpayers of the United States have to pay Congress's bills.

Wednesday, December 9, 2009

Climategate: Gore Falsifies the Record

or he misspoke. (Ooo I hate that word.)

This from Andrew Bolt of Australia's Herald Sun, regarding Slate magazine's Q&A with Al Gore over global warming, those pesky leaked emails, and his new book (what a surprise). Andrew Bolt has other excellent posts on global warming and the "Climategate".

(Remember that Australia's Senate voted down the government's bill on carbon trading recently, partly thanks to the "Climategate" emails.)

Climategate: Gore falsifies the record (12/9/09, Herald Sun, Australia)
[emphasis is original]

"Al Gore has studied the Climategate emails with his typically rigorous eye and dismissed them as mere piffle:

Q: How damaging to your argument was the disclosure of e-mails from the Climate Research Unit at East Anglia University?
A: To paraphrase Shakespeare, it’s sound and fury signifying nothing. I haven’t read all the e-mails, but the most recent one is more than 10 years old. These private exchanges between these scientists do not in any way cause any question about the scientific consensus.
" And in case you think that was a mere slip of the tongue:
Q: There is a sense in these e-mails, though, that data was hidden and hoarded, which is the opposite of the case you make [in your book] about having an open and fair debate.

A: I think it’s been taken wildly out of context. The discussion you’re referring to was about two papers that two of these scientists felt shouldn’t be accepted as part of the IPCC report. Both of them, in fact, were included, referenced, and discussed. So an e-mail exchange more than 10 years ago including somebody’s opinion that a particular study isn’t any good is one thing, but the fact that the study ended up being included and discussed anyway is a more powerful comment on what the result of the scientific process really is.

"In fact, thrice denied:
These people are examining what they can or should do to deal with the P.R.
dimensions of this, but where the scientific consensus is concerned, it’s completely unchanged. What we’re seeing is a set of changes worldwide that just make this discussion over 10-year-old e-mails kind of silly.
"In fact, as Watts Up With That shows, one Climategate email was from just two months ago. The most recent was sent on November 12 - just a month ago. The emails which have Tom Wigley seeming (to me) to choke on the deceit are all from this year. Phil Jones’ infamous email urging other Climategate scientists to delete emails is from last year.

"How closely did Gore read these emails? Did he actually read any at all? Was he lying or just terribly mistaken? What else has he got wrong?"

It's Newspeak, Mr. Bolt. "One month ago" means "10-years ago", and "two months ago" means "more than 10 years ago", by imperious Al Gore's decree. Well, Mr. Gore has a lot depending on the global consensus on global warming and implementation of cap and trade globally.

What I want to ask in addition is this: Since when is the validity of science determined by consensus?

If the age of the planet earth had been determined by the consensus, it would have stayed at 100 million years, the number mathematically derived by the very influential and brilliant physicist (Lord Kelvin). For the next three decades, it stayed that way during which scientists tried their best to come up with the evidence that would justify Lord Kelvin's conclusion. Sounds familiar, doesn't it?

This brilliant conclusion about the age of the planet, agreed upon by most scientists, was rudely overturned by empirical evidence: Discovery of radioactivity that threw a monkey wrench into Lord Kelvin's meticulous calculation on thermodynamics. (For more, please read the article by David Deming, titled "Global Warming and the Age of the Earth: A Lesson on the Nature of Scientific Knowledge", 12/3/09

But the age of the planet didn't affect nation's GDP or welfare of the nation's inhabitants the way this idea of global warming is going to affect.

Mr. Gore, himself a non-scientist, seems to have decided science should be run like politics - compromise, consensus, arm-twisting, silencing the opponent, outspending the opponent to win the race. And partly thanks to people like Mr. Gore, science, particularly climate science, has become exactly that: a branch of politics.

Another thing I want to ask is about Slate: Were they also unaware that the emails were as recent as a month ago? Or are they taking part in perpetuating this new myth created by Al Gore that those emails were "more than 10 years ago"?

Tuesday, December 8, 2009

CO2 Is a Dangerous Pollutant

so declared the Environmental Protection Agency on Monday.

The agency is dutifully doing the bidding of the administration just in time for the Copenhagen climate summit. I will believe that when these officials at the agency show us the way by stopping breathing completely in order to save the planet.

Here's a take on the issue by the Heritage Foundation:

EPA Formally Declares CO2 a Dangerous Pollutant
(12/7/09 The Foundry, Heritage Foundation)

"Step aside, elected Members of Congress. If you can’t pass cap and trade legislation, The Environmental Protection Agency will move in with massively complex and costly regulations that would micromanage just about every aspect of the economy. They announced today that carbon dioxide and five other greenhouse gases (GHGs) threaten public health and the environment." (The article continues. Click on the link above to read.)

This, despite the "Climategate" where the world's leading climate scientists are accused of falsifying the data to fit their theory of global warming.

The following article about the "Climategate" is about the only one posted on the mainstream media outlets. The author, Declan McCullah, has written good articles on health care "reform" and climate change legislation.

ClimateGate Could Threaten Copenhagen Climate Deal
(Declan McCullah, 12/7/09, CBS News)

Soon, the government will decree that:

War is peace;
Fiscal responsibility means profligate spending;
Recession/Depression is over;
Only the government can save you;
The world is flat;
The sun revolves around the earth, again;
Sky is falling.

What else?

Ooops forgot the obvious.

The earth is warming because of pesky humans.

Monday, December 7, 2009

Let Wall Street Pay for the Restoration of Main Street Act of 2009

This idea of taxing the trading has been around. Each time it went nowhere, but this time it may actually go somewhere, with unintended but totally predictable consequences. Nancy Pelosi even wants to make it a "global tax".

Pelosi Endorses ‘Global’ Tax on Stocks, Bonds, and other Financial Transactions (Matt Cover, 12/7/09 CNS News)

"( – House Speaker Nancy Pelosi (D-Calif.) endorsed the idea of a “global” tax on stock trades and other financial transactions, saying the estimated $150 billion in annual revenue from such a tax could be used to help fund more stimulus spending.

"At her weekly press briefing on Thursday, Pelosi said the financial transactions tax (HR4191) currently before Congress would have to be made “global” to keep U.S. investors from taking their business overseas and out of taxable reach."

And where does she think the money is going? A second stimulus, of course.

"The House speaker said that a transaction tax could be imposed in conjunction with congressional efforts to divert funds from the Troubled Asset Relief Program (TARP), with funds from both going to fund a second stimulus spending package. (The first stimulus bill, $789-billion, was signed into law by President Barack Obama on Feb. 13, 2009.)

"“I believe that the transaction tax still has a great deal of merit,” Pelosi told reporters. “The concern that many of us or others have had is that it will send, it will send transactions overseas.""

They want to divert TARP funds and this proposed "Wall Street tax" into a second stimulus to stimulate job creation. The first stimulus has been a great success, so far having created 600,000 jobs, as the administration claims. The cost per job estimate ranges from $70,000 to $250,000, and the stimulus spending to create such jobs include $30 million for pro baseball spring training camps and $4000-per-bike bike locker and garage (see here).

Now, let's take a look at the actual bill, H.R. 4191, shall we?

H.R. 4191 was crafted by an Oregon Democrat Peter DeFazio and the bill was introduced in the House on December 3, 2009.

Section 1 is the preposterous official title: Let Wall Street Pay for the Restoration of Main Street Act of 2009.

What a joke. As you will see, it is more like Let Main Street and Wall Street Pay for Both Ends of Pennsylvania Avenue Act of 2009.

Section 2 lists 12 reasons why DeFazio and his cosponsors believe this bill must pass [my comment in bold italic]:

(1) Our Nation continues to be hamstrung by a recession that led to the current jobless recovery and record deficits. [Well, that's partly thanks to you, government and the Fed.]

(2) The unemployment rate is now 10.2 percent and most economists expect it to climb higher.

(3) The Federal deficit has reached $1,400,000,000,000 for 2009. [That's your problem, not Main Street or Wall Street.]

(4) The jobless recovery suggests that the Federal Government must continue to prime the economy, but the record deficit is a real obstacle. [That's what you think, but there are a lot of people who totally disagree with you.]

(5) Following their $700,000,000,000 bailout, Wall Street is now enjoying a resurgence in profits and bonuses.

(6) A robust economy needs more than Wall Street profits. Main Street America is strengthened by good paying jobs for all Americans, not just Wall Street bankers.

(7) To restore Main Street America, a small securities transaction tax on Wall Street should be invested in job creation for Main Street America. [Who will invest? You, the government, who has created a record deficit, the highest in peacetime history of the U.S.?]

(8) A securities transaction tax on Wall Street has a negligible impact on the average investor and pension funds. [How can you say that, when the actual tax you are proposing is on all securities transactions done by all investors big and small, not a surtax only on Wall Street firms?]

(9) This transfer tax would be assessed on the sale and purchase of financial instruments such as stocks, options, and futures. A quarter percent (0.25 percent) tax on financial transactions could raise approximately $150,000,000,000 a year.

(10) The United States had a transfer tax from 1914 to 1966. The Revenue Act of 1914 (Act of Oct. 22, 1914 (ch. 331, 38 Stat. 745)) levied a 0.2 percent tax on all sales or transfers of stock. In 1932, Congress more than doubled the tax to help financial recovery and job creation during the Great Depression. [During the Great Depression, did this transfer tax help financial recovery and job creation? History says otherwise. It was more likely to have been another obstacle for real recovery.]

(11) Half the revenue generated by this transaction tax will be used to directly reduce the deficit.
[Yeah right. Nancy doesn't say anything about deficit reduction, does she?]

(12) Half of the revenue generated by this transaction tax will deposited in a Job Creation Reserve to fund the creation of good paying jobs and put Americans back to work rebuilding our Nation. [Good paying jobs were in manufacturing. Manufacturing firms have very little incentive to bring the jobs back. They are not coming back.]

Section 3 talks about the creation of the "Job Creation Reserve" from half the receipt of this proposed tax. Jobs have to be paying at least the median wage, and come from manufacturing and "other jobs we are losing to unfair overseas competition". The U.S. government once said that a foreign language spoken in a foreign country was an unfair trade barrier.

Section 4, short and strange, talks about the deficit reduction part of the deal. "It is the Sense of Congress that half the additional Federal receipts by reason of the enactment of this Act shall not be expended and therefore reduce the Federal deficit."

The "Sense of Congress" means that they think it is a good idea to do so, but it's just an opinion and nothing more; nothing is binding here to use half the tax receipt for deficit reduction. (Read this explanation about the term.)

Section 5 is where the details of this trading tax are spelled out.

  • 0.25% tax on transactions (buying and selling) of stocks, futures, swaps, CDS, and options
  • IRA accounts are exempt, so the investment in mutual funds
  • Covered transaction - any purchase/sale made in the U.S., any purchase/sale made by a U.S. person (Nancy Peloci wants to make this global - any purchase/sale made anywhere by anyone).
  • $250 credit allowed against the tax
  • First $100,000 transactions per year are exempt

$100,000 transactions don't amount to much at all. Say you buy 100 shares of GLD, a gold tracking ETF. Currently it is $113.23. 100 shares cost $11,323. GLD goes to $120 and you decide to take profit. You sell 100 shares for $12,000. The round-trip transactions amount to $23,323, already near 1/4 of $100,000. Many, many retail investors and traders trade shares, options, futures more than 4 round-trips per year. Many of them trade more than 4 per week, if not by day or hour.

Far from "not affecting small retail investors" as they claim, the tax hits them directly. The total transaction cost per trade, which is very low thanks to online discount brokerages (some of them offer $0 commission), will skyrocket. In the above GLD case, if I use the commission of my broker, the transaction cost per trade is currently $8. Under the proposed tax, this will become $8 plus 0.25% of $11,323, which is $36.31. That is 354% jump in trading cost.

Instead of punishing Wall Street, this will end up punishing Main Street investors and traders who try to recover what they've lost by participating in the stock market. (Remember, this is a jobless recovery...)

"Punishing" Wall Street idea seems bizarre to me to begin with. Congress was the one who gave Hank and Ben the TARP money, against overwhelming objections from taxpayers. Congress couldn't pass up an opportunity to tack on their pet projects. Hank proceeded to half threaten the bank CEOs to accept the bailout capital injection.

This blog has reported on this trading tax on a few occasions, and my fear remains the same: this time they will pass this labor union-supported (by AFL-CIO) piece of you know what.

Sunday, December 6, 2009

US Ambassador to Japan Shouts at Japan's Ministers in Rage Over Okinawa Base

Chicagoland thuggery goes to Japan.

Democratic Party of Japan (DPJ) came to power, promising "change" (just like the new U.S. administration). Unlike the U.S. counterpart, though, they are actually trying. One of the things they are trying to change is the relocation plan of U.S. Marine Corps Air Station in Okinawa.

Between Japan's Aso administration and U.S.'s Bush administration, they agreed in 2006 to move the Marine airbase in Futenma, Okinawa, to another city, Nago, also in Okinawa. The strong opposition of Nago citizens as well as environmentalists' opposition (the base would be built on a landfill over coral reef) was totally ignored. Now, Prime Minister Hatoyama, whatever his political calculation is (or lack thereof), seems aligned with the citizens of both Futenma and Nago in opposing ANY U.S. military presence at all in Okinawa. He has delayed the decision on Futenma until next year.

This has angered the Obama administration, which has just expanded the Afghan war. Defense Secrerary Gates went to Japan and threatened Japanese of "serious consequences" if they didn't do the U.S. bidding. President Obama couldn't solve the Futenma issue when he visited Japan. (Why did he go to Asia, to begin with?) Now, Japan and the U.S. have started high-level negotiations in Tokyo to resolve the relocation issues.

The American Ambassador to Japan, John V. Roos, a big Obama campaign donor with zero foreign and diplomatic experience or knowledge, is a member of the U.S. negotiation team. He apparently blew up on the first day of the negotiation, according to Sankei Shinbun:

"In a closed session of the negotiation, Ambassador Roos flew into a rage and started shouting at Japan's Foreign Minister Okada and Defense Minister Kitazawa."

Don't you dare renege on the promise under Bush administration!

That sounds like Rahm Emanuel cloned.

(Sankei Shinbun, by the way, seems highly approving of the rude manner of the ambassador. The newspaper is heavily right-leaning, and heavily pro-U.S., a combination possible only in Japan.)

The base relocation was agreed upon in 2006 after an incident in 1995 of an abduction and rape of a 12-year-old girl by three U.S. Marines. Violent crimes (rape, armed robbery, homicide) committed by the U.S. soldiers based in Japan, particularly in Okinawa, have irked and angered Japanese over the years, but this particular incident triggered an overwhelming disgust and protest against the U.S. military presence in Okinawa. (One of the Marines later killed himself after raping a woman in Georgia.)

Japan, like so many other nations in the world, was ecstatic over the election of Barack Obama, welcoming the "change" from Bush administration. Now the reality sets in. Okinawa's newspaper Ryukyu Shinpo, in its editorial, has this to say to Obama administration: "Change? What change?" [rough translation from original Japanese]:

"It is highly doubtful that Ambassador Roos knew or understood anything about Okinawa's situation before he visited Okinawa. Obama administration's call for "change" rings so hollow now.

"New administrations in Japan and the U.S. have sparked the hope that problems associated with the U.S. bases in Okinawa, which have been highly contentious and divisive, may finally be resolved. But Ambassador Roos simply repeats the same old official U.S. line that the U.S. believes the current plan (move the base from Futenma to Nago, with Japanese government paying for most of the cost) is the best option.

"The Japan-U.S. working group, which is made up of ministers and high-ranking officials including Mr. Roos, is supposedly examining the issues and exploring options. But if the U.S. has already decided on the conclusion (that the current plan is the best one for the U.S.), what is the point of even negotiating?"

According to Yomiuri Shinbun, Michael Green, former senior director of Asian affairs of the U.S. National Security Council under George W. Bush, warned that if the Japanese government does not proceed with the base relocation plan as agreed, it will jeopardize the entire U.S. plan for military reorganization in the Far East. He predicted total collapse of trust between the U.S. and Japan, and threatened that the U.S. would go over Japan's head and discuss important issues with China only. (Just like it routinely bypass Korea now.)

So the Obama "Change" administration enlists a former official from the previous administration to bully the new Japanese administration. Same old, same old. I guess the occupation of Japan has never been lifted.

Japan has almost always liked and respected the U.S. ambassadors sent by the administrations over the years. The U.S. always took care to pick a respected, senior member of the diplomatic corp, senior politician, or noted scholar - Reischauer, Mansfield, Mondale. The ambassador under George Bush, Tom Schieffer, was also very much liked and respected by the Japanese politicians and businessmen. That tradition was rudely ended when Obama appointed his campaign contributor and political/diplomatic/scholarly nobody as the ambassador.

Several days ago Zero Hedge reported the rumor that Japan is planning to sell U.S. Treasuries [that they hold]. I hope the U.S. won't regret having bullied a long-time subservient "ally" if and when that rumor turns out to be true.