Tuesday, April 26, 2011

Steve fuels the car

Steve Israel wants to tap the Strategic oil reserve. There are 700 million barrels in the reserve; the US uses 20 million barrels a day, so the reserve is little over a3 month supply. Negligible on the world market.
Steve doesn’t say how much he wants to use – it’s a strategic reserve and it would be foolish to release all of it; he doesn’t project what this will do to oil prices – it won’t have any effect since there is very little available compared to the world wide daily market; he doesn’t say how much the US should sell it for or how it should be replaced. His plan seems to be for the Feds to buy oil at the market prices and sell it at below market rates. That would keep gas prices down and could borrow more money from China to keep that system going. Steve’s suggestion doesn’t make much sense but this is the same guy who wants all states to receive the same amount of money back from the Federal government as the states send the Feds in taxes. Why we listen to economic wizards like this is a mystery.

Newsday Friends Dodd/Frank

Newsday continue to paint banks as bad guys. Now they are being chastized for havingthe gall to lobby against the Dodd/Frank bill.

It is demonstrable that Levin, Frank and Dodd were key players in engineering our current financial situation.

Frank: "I would like to get Fannie and Freddie more deeply into helping low-income housing... I want to roll the dice a little bit more in this situation towards subsidized housing." House Financial Services Committee hearing, Sept. 25, 2003

Dodd: "This is not a time to be panicking about this. These are viable, strong institutions," July 2008 press conference about Fannie Mae and Freddie Mac.

Carl Levin is now leading the charge to point fingers at everyone except the culprits and Newsday’s editors are buying it (see Point two fingers of Recessionary Blame). Having these guys make the new rules for banks while they completely ignore Fannie Mae and Freddie Mac and their own culpability is a measure of their cluelessness and true aims. The fox is in the hen house.

Among their solutions to a situation that has its roots with Freddie Mac and Fannie dropping all pretense of lending guidelines to meet their social goals is to have the government determine what constitutes a reasonable and fair cost for a transaction. In their world, price controls, contrary to fact that price controls have failed every time they have been imposed, will solve part of some unrelated problem. These culprits seem to believe that something is inherently wrong when a business passes along its costs to the end customer. There is also part of the Dodd/Frank mess that allows borrowers to sue the lender for making a loan that borrower doesn’t pay back. Somehow, is supposed to facilitate prudent lending but is clearly a cookie for the trail lawyers.

Financial institutions are quite correct to lobby against this law – another one where we will see what is in it when it takes effect. There is clearly need for some reform but a populist campaign to divert attention from the real culprits and basic causes will only make things worse.

The blame game is helpful when it correctly points at the culprits, and helps to develop corrective measures that have some basis in economic practicality. That is not what is happening.

Kings Point Cameras

The big objections to the Kings Point cameras is that “it will have the effect of screening every driver – resident or visitor – for criminal activity.” Further, “it isn’t being applied to troublesome, or even potentially troublesome, spots”.

It can only be concluded that the editorial would be in favor of a system that did not screen every driver and was only applied to troublesome locations. Should Kings Point have applied some sort of selective parameters to the process? Perhaps they could only take pictures of persons who fit a profile of troublesome; or only position the cameras at locations where troublesome people congregate. Seems like that would resolve your objections.

Whether there is an expectation of privacy on public streets will eventually be determined in the courts. The current practice of fondling everyone at the airport indicates what that decision will be.

Thursday, April 21, 2011

Never the Twain shall meet

Two opinions are current. One encourages the President to take Social security, Medicare and Medicaid off the table and accuses the GOP of wanting to do away with entitlements; the other accuses the GOP of fraud and both want to stop the “unnecessary” tax cuts to the wealthy.

No one has said anything about cutting entitlements. The Ryan plan does not do anything to those over 54. For those under 55, it attempts to put the plans on a fiscal basis that will ensure that the plans are around to actually pay benefits to people who are 54 and younger. A plan that provides benefits is somewhat better than a plan that is not there.

Hello. Someone who makes $250,000 pays five times more in the taxes than the guy who makes $50,000. This President ran on the promise to take money from the rich (defined as anyone who makes more than you do) and share the wealth with those who make less. We know that will work for President but it doesn’t work for the economy.

Safe Borders

The Custom and Border Patrol announced that they had stopped and confiscated 25,000 chocolate Kinder Eggs. Stopped them cold as they were coming in from Europe. And why did they do this? Exploding eggs? Tainted Chocolate? Nope. They were deemed a choking hazard for kids under 3 years old. And how does a 3 year old kid obtain one of these dangerous things? Maybe they would need help from Mommy or Daddy. Someone would have to drive the kid to the store. Or maybe a stranger would do it while Mommy and Daddy were not paying attention. But who gives the kid money to buy one, if he could reach the counter? Doesn't seem like there should be a problem here.
But congrats to the Customs guys for capturing these dangerous chocolates. Easier than capturing any illegal aliens like they should be doing. Plus now they get to eat the chocolate.
Parents should do parent stuff and customs guys should actually protect the borders.

The Third Finger

The Opinion article in Newsday Point two fingers of recessionary blame] points fingers at banks and public employee unions for the current economy but left out the largest offenders. One of the two things these situations have in common is that the banks and unions both acted in their own best interests. The unions can only propose contracts. Politicians and school boards have to agree to them. You propose a contract with salary, benefits and raises that are unsustainable and beyond other industries. Your employer gives it to you. Do you turn it down? Probably not.

The banks made mortgages according to the rules set down by the politicians who ran Fannie Mae and Freddie Mac. The mortgages were guaranteed. The instruments that the banks created were backed by these guaranteed mortgages. Banks made money on both. They didn’t turn the money down either.

There is a pattern here that shows that there is a third finger to point. In both cases, bank and union actions were determined by what politicians did. The other thing that these situations have in common is that in both cases the politicians were spending money they didn’t have. When the reason for what happened is properly defined there will be hope of getting on the right track. Until then, everyone will blame everyone else and those truly responsible will continue to be re-elected

Republicans are dopey II

Perhaps the only intelligent thing Bill Clinton ever said was, "It's the economy, stupid." That is more correct now than ever.
It is not about abortion, whether George marries Fred, or whether either of them is in the Army. It is about taxes and spending, jobs and growth. There is a need to lower the first two and raise the second two.
The constant drum beating about these social issues is going to provide us with an unelectable Republican candidate for President and continue to allow the Democrats and their lackey press to obscure the important issue.
Look at it logically. The conservatives are not going to have abortions anyway, if people who believe in abortion have less abortions they will have more kids that they will raise to believe what they believe. That doesn't help. George and Fred will not be having any abortions anyway.

Somewhere there is an aged Republican with a bad arm who stands on street corners with an anti-abortion sign - in one hand. He is the next Republican Presidential candidate

Fixing the Banks

This was a story from Reuters:

Fed unveils proposal on mortgage standards

WASHINGTON (Reuters) - Lenders would be required to make sure prospective borrowers have the ability to repay their mortgages before giving them a loan, under a proposal released by the Federal Reserve on Tuesday.

The rule, which is required by the Dodd-Frank financial reform law, is intended to tighten lending standards and combat home lending abuses that contributed to the 2007-2009 financial crisis.

The rule would establish minimum underwriting standards for most mortgages and lenders could be sued by the borrower if they do not take the proper steps to check a borrower’s ability to repay the loan.

Unbelievable! Barney and Chris have suddenly decided that you have to have the ability to repay a mortgage loan. The part about everyone owning a home didn't work out so well. Needing the ability to payback a loan sounds pretty obvious but that is not the point of the law. This is in the Dodd/Frank Bank Act or whatever According to their plan, if you don’t repay the loan, you can sue the bank that lent you the money because they lent you money that you don’t repay.

I don't think this will reduce loan defaults and with such a dopey rule, why should anyone ever repay any loan? Just default and sue the bank who lent you the money. You can then pay off the loan with the money you get from the law suit. But then you can repay the loan so the bank will sue because you can pay the loan. The bank wins this time because you can pay the loan. Now you have no money because you lost and can’t pay the loan so you can sue the bank for lending you the money. But you win and can pay the loan so…..

Might never end. But the lawyers make out well. Probably doesn't make any difference since with this kind of law out there, why would anyone lend any money?

Wednesday, April 6, 2011

A Real Policy Change

There was once a President who had a policy that terrorists fighting against the US did not have any claim to the protections of the US Constitution; a policy that those terrorists should be held at Gitmo; that those terrorists should be tried by military tribunals; and that those military tribunals should be held at Gitmo.

Then there was a candidate for President who campaigned on the policy that the terrorists were entitled to the same Constitutional protections as US citizens; that the terrorists should not be held at Gitmo and that it should be closed; that the terrorists should be tried in civil courts; and those civil trials should be held in major population centers.

Was the first position right all along? What is different now?

The Dynasty Cracks

We learn from Newsday’s reviewer that the Kennedy miniseries has been produced by “an avowed conservative”. Apparently, to the avowed liberal who wrote the review that description is intended to convey that the series is inaccurate. To those whose religious Trinity is comprised of Jack, Bobby and Teddy such a formulation is just another obvious religious tenet. But the larger - not surprising - story is that the History Channel pulled because the remaining worshipers have complained. These complaints were probably not based upon the bad dialogue and there is no mention of inaccuracy; the series just taints their gods. Meanwhile, pulling a series or movie that was critical of an avowed conservative for any reason would a.) never happen and b.) if it ever did be met with cries of censorship. Fair and balance reporting is a difficult goal.