The Dodd-Frank financial reform act is another one of the bills where it had to be passed in all its 2500 page splendor in order to find out what is in it.
The Democratic PR machine has managed to convince many people that any law that interjects the government into private business (oil, banks, health care) is a good one. But as usual, the devil is in the details. The trumpets blared as the First Dope announced that any bank too big to fail would no longer be propped up by the US taxpayer.
Sounds good but how? Their solution is that any bank that was too big to be allowed to fail would be rescued by getting money from the other banks that were not too big to fail. Huh? I’ll say it differently. Big banks that do stupid things will be saved by smaller banks that do not do stupid things. They won’t be saved by smaller banks that do stupid things because these smaller stupid banks will be allowed to fail. The bill gives poorly run large banks a competitive advantage against well run smaller banks. Well run banks will have to charge more for their services than poorly run banks to cover their higher costs. This bill encourages people to take thgeir business to poorly run banks. Thus is the economic wizardry of the Democratic party members. What else can you expect from something named after Frank and Dodd?
There is more.
Friday, July 30, 2010
Terrorists
They come in shades of dopey. A woman who was found taking pictures of a military installation and had an assault rifle, ammunition and a shotgun in her car. She is arrested. Good job officers? Not to her. She is suing because she was treated as a terrorist. She has a disease that apparently enabled her to fire an assult rifle but not be handcuffed. She should also be fined for wasting taxpayer money defending the police, County and Town against the lawsuit.
Another reason for tort reform.
Another reason for tort reform.
Tests
An article about test scores today says, “A state decision to raise passing standards on English and math tests has produced a dramatic drop in the number of students deemed academically proficient on Long Island and elsewhere across New York , outraging many local school officials.”
Here is a test.
A student takes a test and gets 6 out of 10 questions correct. The passing grade is 60%. The student passes. The next day the same student takes the same test and gets the same 6 questions right and again scores 60%. Passing grade that day has been raise to 80%. The student fails.
The test has two questions that both parents and educators don't seem to get right:
1) Has the student become less proficient?
2) Does proficient mean that everyone should get a trophy?
Here is a test.
A student takes a test and gets 6 out of 10 questions correct. The passing grade is 60%. The student passes. The next day the same student takes the same test and gets the same 6 questions right and again scores 60%. Passing grade that day has been raise to 80%. The student fails.
The test has two questions that both parents and educators don't seem to get right:
1) Has the student become less proficient?
2) Does proficient mean that everyone should get a trophy?
Sunday, July 25, 2010
Orange Jumps suits and other Beneficiaries
The First Dope had a photo op yesterday to celebrate the signing of a bill that was “intended to slash by $50 BILLION the taxpayer money improperly paid to dead people, fugitives and those in jail who shouldn’t be getting benefits”.
A few comments:
The intent of the bill seems to indicate that some part of the taxpayer money that goes to dead people, fugitives and those in jail is actually properly paid to them.
Slashing the amount by $50 BILLION is presumably a good thing but the (probably underestimated) guess is that there are $110 BILLION of such payments to dead people, fugitives and those in jail.
If they are 100% successful in meting their goal, more than ½ of the money that is now paid to dead people, fugitives and those in jail will continue unimpeded. (Aiming for the stars being a forgotten concept)
If they are going to redistribute income, at least redistribute it only to people who are still breathing. The dead are very poor consumers and will not help the economy that much.
They are passing a bill that declares that the government is not doing a good job but are going to fix that by passing a bill making the government do a good job.
The First Dope’s loyal media is celebrating this like it makes sense.
A few comments:
The intent of the bill seems to indicate that some part of the taxpayer money that goes to dead people, fugitives and those in jail is actually properly paid to them.
Slashing the amount by $50 BILLION is presumably a good thing but the (probably underestimated) guess is that there are $110 BILLION of such payments to dead people, fugitives and those in jail.
If they are 100% successful in meting their goal, more than ½ of the money that is now paid to dead people, fugitives and those in jail will continue unimpeded. (Aiming for the stars being a forgotten concept)
If they are going to redistribute income, at least redistribute it only to people who are still breathing. The dead are very poor consumers and will not help the economy that much.
They are passing a bill that declares that the government is not doing a good job but are going to fix that by passing a bill making the government do a good job.
The First Dope’s loyal media is celebrating this like it makes sense.
Car Sales
GM is going to buy a Finance Company and pay 24% over the current stock price so that they can make more sub prime loans (poor credit risks) so they can sell more cars. That’s the way they can become a real profit making company again - make loans to people who are poor credit risks so they can buy /lease their cars. That will be good until the defaults start. Can you say “another bailout” boys and girls? On the upside, it will help the used car market when all these cars are re-po’d and hit the secondary market. Might even help the ratings of that TV show.
This mess started because people were getting mortgages that were bad credit risks. Here we go again. And who thinks this is a good idea?
The CEO of GM was put in place by the US Government who owns 61% of GM. Think the Gov’t had a voice in this despite what the article says (Yahoo News being a notorious First Dope supporter)?
So, once again the Gov’t is encouraging a plan to give money to people to buy things they can’t afford. (Einstein: An idiot is a person who does the same thing over and over and expects different results.) Giving people with bad credit the ability to buy a new car is another way of redistributing wealth. If you can’t afford a new car or a new house of a flat screen TV, the best thing for the economy is to not buy it.
This mess started because people were getting mortgages that were bad credit risks. Here we go again. And who thinks this is a good idea?
The CEO of GM was put in place by the US Government who owns 61% of GM. Think the Gov’t had a voice in this despite what the article says (Yahoo News being a notorious First Dope supporter)?
So, once again the Gov’t is encouraging a plan to give money to people to buy things they can’t afford. (Einstein: An idiot is a person who does the same thing over and over and expects different results.) Giving people with bad credit the ability to buy a new car is another way of redistributing wealth. If you can’t afford a new car or a new house of a flat screen TV, the best thing for the economy is to not buy it.
Sunday, July 18, 2010
Econodopes
A new claim is that the middle class has been disappearing for 40 years. The chart "proving" this shows that the assets (undefined) of the top 1% have increase by about ½ in 40 years. The assets of the middle class have increased about 10 times. Which return do you want? So, his chart shows that the “rich” who invest get a smaller return on their wealth than the “poor”. Probably wrong there.
Second, these types of charts showing wealth over time never consider that the group in the lowest category in 1962 (whose wealth increase by a factor of 6) are not the same people as in 2001. And where did those people go? They went up into the next category to be replaced by a new low income group populated by recent graduates, immigrants etc. Same happens in all the categories. Some wealthy people stay wealth – so what but which category were Gates and Jobs families and the rest in in 1962?
This falls into the theory that if a rich guy has a dollar, it is a dollar a poor guy does not have. Fostering class warfare is not a path to economic progress. This guy supports redistribution – we are currently seeing how well that works.
It is also unclear whether his definition of “assets and liabilities” is a net and how does it account for the incredible amount of stocks held by pension funds and other investments that impact over 50% of the people in the country.
And this guy writes for a business magazine?
He identifies the cause as the globalization of markets is way too simplistic. If the cell phones and computers we all have were produced which in the USA in unionized, heavily taxed manufacturing facilities what would they cost? Could everyone afford one? They clear answer is ‘NO” and the same applies to clothes and every other thing all of us consumers buy. So we would have more jobs producing things that less people could afford to buy. Would the companies continue to produce the articles and keep paying for the jobs involved. Another No there.
The problem is that the costs of production have not kept pace with the productivity of the American worker. That can be fixed through changes in the tax laws, tort reform and work rule changes.
Hoover determined that the best way out of the Depression was to close US markets to foreign products (Look up the Smoot Harley Act) to protect US jobs. That worked really well.
Second, these types of charts showing wealth over time never consider that the group in the lowest category in 1962 (whose wealth increase by a factor of 6) are not the same people as in 2001. And where did those people go? They went up into the next category to be replaced by a new low income group populated by recent graduates, immigrants etc. Same happens in all the categories. Some wealthy people stay wealth – so what but which category were Gates and Jobs families and the rest in in 1962?
This falls into the theory that if a rich guy has a dollar, it is a dollar a poor guy does not have. Fostering class warfare is not a path to economic progress. This guy supports redistribution – we are currently seeing how well that works.
It is also unclear whether his definition of “assets and liabilities” is a net and how does it account for the incredible amount of stocks held by pension funds and other investments that impact over 50% of the people in the country.
And this guy writes for a business magazine?
He identifies the cause as the globalization of markets is way too simplistic. If the cell phones and computers we all have were produced which in the USA in unionized, heavily taxed manufacturing facilities what would they cost? Could everyone afford one? They clear answer is ‘NO” and the same applies to clothes and every other thing all of us consumers buy. So we would have more jobs producing things that less people could afford to buy. Would the companies continue to produce the articles and keep paying for the jobs involved. Another No there.
The problem is that the costs of production have not kept pace with the productivity of the American worker. That can be fixed through changes in the tax laws, tort reform and work rule changes.
Hoover determined that the best way out of the Depression was to close US markets to foreign products (Look up the Smoot Harley Act) to protect US jobs. That worked really well.
Cars
Obama’s latest photo op was in Michigan to promote making batteries for electric cars. It could even create 300 jobs for its $151 million cut of the stimulus pie (That would be about $500,000 per job created!!!!). But there might be some unintended consequences:
The worst thing you can put into a landfill is a battery. They are really, really bad for the environment. And electric cars have a bunch of them that do not last forever.
Pop Quiz: When they plug all these cars into charge overnight, they will plug into a solar charged battery (batteries again)that has stored the solar power from the previous day - unless it has rained; or into a windmill in their backyard – unless it is the still of the night; or a coal powered power plant that has to burn more coal because the overnight power requirements have increased? Which one of these things is good?
The worst thing you can put into a landfill is a battery. They are really, really bad for the environment. And electric cars have a bunch of them that do not last forever.
Pop Quiz: When they plug all these cars into charge overnight, they will plug into a solar charged battery (batteries again)that has stored the solar power from the previous day - unless it has rained; or into a windmill in their backyard – unless it is the still of the night; or a coal powered power plant that has to burn more coal because the overnight power requirements have increased? Which one of these things is good?
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