Draining the Fed

The Chief Economist and Deputy Chief Economist at First Trust coauthored an article in which they point out that although the economy has returned to normal after the Panic of 2008, the one thing that hasn’t done so is the size and overreach of government with an emphasis on the Fed. Indeed, the point they make is that it is time to drain the Fed swamp:

It wasn’t government that saved the economy.  Quantitative Easing was started in September 2008.  TARP was passed on October 3, 2008.  Yet, for the next five months markets continued to implode, the economy plummeted and private money did not flow to private banks.

On March 9, 2009, with the announcement that insanely rigid mark-to-market accounting rules would be changed, the markets stopped falling, the economy turned toward growth and private investors started investing in banks.  All this happened immediately when the accounting rule was changed.  No longer could these crazy rules wipe out bank capital by marking down asset values despite little to no change in cash flows.  Changing this rule was the key to recovery, not QE, TARP or “stress tests.”

The Fed, and supporters of government intervention, ignore all these facts.  They never address them.  Why?  First, institutions protect themselves even if it’s at the expense of the truth.  Second, human nature doesn’t like to admit mistakes.  Third, Washington DC always uses crises to grow.  Admitting that their policies haven’t worked would lead to a smaller government with less power.

The Fed has become massive.  Its balance sheet is nearly 25% of GDP.  Never before has it been this large.  And yet, the economy has grown relatively slowly.  Back in the 1980s and 1990s, with a much smaller Fed balance sheet, the economy grew far more rapidly.

Here’s hoping the Don is as good at making Fed appointments as he is at appointing good judges.

Hat tip: Outside the Box from Mauldin Economics

Posted September 14th, 2017 Filed in Economics and the Economy, Government

Technocracy Fail

Charles Gave authors a short but fascinating read, Toynbee’s Europe. I found this bit particularly notable:

Mervyn King, the former governor of the Bank of England, wrote in his recent book The End of Alchemy that European leaders pushed for the adoption of the euro as a single currency knowing that it would cause an economic disaster in Southern Europe. The idea was that the impact of weakened economies would force national politicians to accept “reforms” imposed by Brussels. Put simply, Lord King argues that these elites consciously organized a huge decline in living standards in the expectation that it would undermine the legitimacy of local politicians. The problem is that most regular people (rightly) believe that their state is the best guarantor of their society being able to “live together”, which is the basic contract binding a nation.

This, as well as much of the article, is a damning condemnation of Technocracy which is the Globalist’s dream State. This is the same strategy being pursued by many of the Republicrats ruling from Washington, not to mention Hillary and Obama.

Read the entire article.

HT to the essential Mauldin newsletter, Outside the Box.

Posted August 4th, 2016 Filed in Europe, Government

Where America Stands: Apple vs. FBI

Infographic: Where Americans Stand on the Apple-FBI Dispute | Statista

You will find more statistics at Statista

Personally, I’m on the privacy side of the issue. Power will always be abused (IRS, NSA, low-level government officials, cops … the list is seemingly endless!).

Posted February 26th, 2016 Filed in Government, Privacy, War on Islamofascism

Why So Many Millennials Are Socialists

Fascinating analysis from The Federalist into why so many are “feeling the Bern” these days. It’s because these voters are just plain ignorant:

First, millennials don’t seem to know what socialism is, and how it’s different from other styles of government. The definition of socialism is government ownership of the means of production—in other words, true socialism requires that government run the businesses. However, a CBS/New York Times survey found that only 16 percent of millennials could accurately define socialism, while 30 percent of Americans over 30 could. (Incidentally, 56 percent of Tea Partiers accurately defined it. In fact, those most concerned about socialism are those best able to explain it.)

With so few able to define socialism, perhaps less surprisingly a Reason-Rupe national survey found college-aged millennials were about as likely to have a favorable view of socialism (58 percent) as they were about capitalism (56 percent). While attitudes toward capitalism remain fairly constant across age groups, support for socialism drops off significantly when moving to older age cohorts. Only about a quarter of Americans older than 55 have a favorable view of socialism.


Conservatives often use the word “socialist” like an epithet, but they don’t realize that neither their audience nor even their political opponents really know what the word even means. This may help explain the inability of free-market advocates to communicate with them using phrases like “big government,” “socialism,” and “collectivism.”

So what do millennials think socialism is? A 2014 Reason-Rupe survey asked respondents to use their own words to describe socialism and found millennials who viewed it favorably were more likely to think of it as just people being kind or “being together,” as one millennial put it. Others thought of socialism as just a more generous social safety net where “the government pays for our own needs,” as another explained it.

So once again, we fall victim to the failure of the American education system. Socialism is a kinder gentler society, nothing to do with the failed states of every socialist government over past 94 years.

I wonder which of these 35 countries the students would like for us to emulate (via Wikipedia’s List of Socialist States):

Country From Until
Soviet Union 30-Dec-22 26-Dec-91
Mongolia 24-Nov-24 12-Feb-92
Yugoslavia 29-Nov-43 29-Nov-45
Albania 29-Nov-44 11-Jan-46
Poland 28-Jun-45 30-Dec-89
North Vietnam 2-Sep-45 30-Apr-75
Yugoslavia 29-Nov-45 7-Apr-63
Albania 11-Jan-46 28-Dec-76
Bulgaria 15-Sep-46 7-Dec-90
Romania 30-Dec-47 21-Aug-65
Czechoslovakia 9-Jun-48 11-Jul-60
North Korea 9-Sep-48 19-Feb-92
Hungary 20-Aug-49 23-Oct-89
People’s Republic of China 1-Oct-49 Present
East Germany 7-Oct-49 3-Oct-90
Czechoslovakia 11-Jul-60 29-Mar-90
Yugoslavia 7-Apr-63 27-Apr-92
Romania 21-Aug-65 30-Dec-89
Republic of Cuba 1-Jul-66 Present
South Yemen 30-Nov-67 1-Dec-70
Somalia 21-Oct-69 26-Jan-91
Congo-Brazzaville 3-Jan-70 15-Mar-92
South Yemen 1-Dec-70 22-May-90
Ethiopia 28-Jun-74 22-Feb-87
Cambodia 17-Apr-75 10-Jan-79
Mozambique 25-Jun-75 1-Dec-90
Angola 11-Nov-75 27-Aug-92
Benin 30-Nov-75 1-Mar-90
Lao People’s Democratic Republic 2-Dec-75 Present
Socialist Republic of Vietnam 2-Jul-76 Present
Albania 28-Dec-76 22-Mar-92
Afghanistan 27-Apr-78 30-Nov-87
Cambodia 10-Jan-79 1-May-89
Ethiopia 22-Feb-87 27-May-91
Afghanistan 30-Nov-87 28-Apr-92


Not exactly a ringing endorsement. Thirty-five tries. Of those, 31 have already been resigned to history’s dustbin, 3 of the 4 current socialist states are clearly outright failures (Cuba, Laos, N. Vietnam) and China (not exactly socialist given the number of very, very rich party members and more than 82 million people living below the poverty line on just $1/day) is circling the drain while we hope that we don’t go down with it.

Education fail.

Posted February 23rd, 2016 Filed in Education, Government

10 Years and $1B Gets You …

This is a story of a government initiative that was supposed to revolutionize an antiquated paper-based system in 8 years and for the bargain price of $500 million dollars. What could go wrong?

Everything, apparently. And I do mean everything. Work that has to be redone. Scrapping technology solutions because they were out of date before being put into production. Poor planning. Mismanagement. The list is endless.

The Washington Post has the entire, sordid story but basically the project has already taken ten years, has already spent a billion (with a “B”) dollars, and has resulted in just one out of 95 documents being available online.

One document.

A decade of work. A billion dollars. One document, 94 to go.

While the government diddles ...Heaving under mountains of paperwork, the government has spent more than $1 billion trying to replace its antiquated approach to managing immigration with a system of digitized records, online applications and a full suite of nearly 100 electronic forms.

A decade in, all that officials have to show for the effort is a single form that’s now available for online applications and a single type of fee that immigrants pay electronically. The 94 other forms can be filed only with paper.

This project, run by U.S. Citizenship and Immigration Services, was originally supposed to cost a half-billion dollars and be finished in 2013. Instead, it’s now projected to reach up to $3.1 billion and be done nearly four years from now, putting in jeopardy efforts to overhaul the nation’s immigration policies, handle immigrants already seeking citizenship and detect national security threats, according to documents and interviews with former and current federal officials.

Did you see that? Only another $3.1 billion and four more years to fix everything and get another 94 documents online!

Anyone taking book on whether it takes longer and costs much, much more? Because I want some of that action. I’d bet my life savings that the project won’e be completed by 2020 in less than $6B. Seriously.

It’s worth mentioning that the one process that has been digitized isn’t for new immigrants; it’s to replace or renew a Green Card. It doesn’t keep known terrorists out of the country. It doesn’t identify known criminals attempting to live among our citizens. It was low hanging fruit and has low impact to our safety. A billion dollars so someone can renew a green card.

And the media wonders why so many see Donald Trump is seen as a viable alternative to career politicians and a bat toting neurosurgeon.

Posted November 10th, 2015 Filed in Government, Immigration

Irony Defined

A lesson in irony.

The Food Stamp Program, administered by the U.S. Department of Agriculture, is actually proud of the fact it is distributing the greatest amount of free meals and food stamps ever.

Meanwhile, the National Park Service, administered by the U.S. Department of the Interior, asks us to “Please Do Not Feed the Animals.” Their stated reason for the policy is because the animals will grow dependent on handouts and will not learn to take care of themselves.

This ends today’s lesson.

Posted July 11th, 2012 Filed in Government, Humor

Outrage: Tax Dollars for Political Partying

 Congress has set aside $136.5 million to pay for such items as booze, balloons and security at the Dem and GOP conventions this year. This comes from the same congress that was outraged over $823,000 being spent on a 2010 conference at a Las Vegas-area resort that a GSA admin was pushed to resign.

The BGOV Barometer shows the events where President Barack Obama and Republican Mitt Romney will formally receive their parties’ nominations will cost taxpayers $136.5 million, up about $3 million from 2008.

The figure includes $100 million Congress provided to pay for security at the conventions, plus $18 million for each party to pay for balloons, signs, alcohol, flags, lanyards and other expenses through a program designed to reduce the influence of campaign contributions. Senator Tom Coburn, pointing to lawmakers’ promises to cut the $1.2 trillion budget deficit, said the parties should forgo the taxpayer funds.

“If the parties want to have a convention, let them have a convention, but they ought to be paying for it,” said Coburn, an Oklahoma Republican. “We can have just as good a party” without tax dollars.

I always liked Coburn. Too bad there aren’t more like him, because both parties are going ahead with the plans.

Posted June 9th, 2012 Filed in Government, Politics

Poll: Government Threat to Rights

For the first time since I remember, the American people get it:

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Friday say they think the federal government’s become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens. Forty-four percent of those polled disagree.

The survey indicates a partisan divide on the question: only 37 percent of Democrats, 63 percent of Independents and nearly 7 in 10 Republicans say the federal government poses a threat to the rights of Americans.

Now, if they will only start voting differently because of it.

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TSA Forces Disabled 4yo to Remove Braces and Walk

Your government dollars at work, via Boing Boing: TSA forces travelling policeman to remove his disabled four-year-old son’s leg-braces.

Philadelphia TSA screeners forced the developmentally delayed, four-year-old son of a Camden, PA police officer to remove his leg-braces and wobble through a checkpoint, despite the fact that their procedure calls for such a case to be handled through a swabbing in a private room. When the police officer complained, the supervising TSA screener turned around and walked away. Then a Philadelphia police officer asked what was wrong and “suggested he calm down and enjoy his vacation.”

Who thought it was a good idea to make these people civil servants? Oh yeah. Democrats.

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Posted February 16th, 2010 Filed in Government, Miscellaneous

Congressional Approval Nears Historic Lows

Approval of how Congress is performing the lowest since Democrats took over DC, mainly due to disappointing the Democrat base. From Gallup:

McCain Palin Bumper Sticker


Gallup notes:

The all-time low Gallup reading on congressional approval is 14%, recorded in July 2008. Prior to this, 18% was the lowest in Gallup’s history of asking this question, which dates to 1974. In addition to the current measure, congressional approval was at 18% for several months in 2008 as well as in March 1992. It was only slightly higher in June 1979 (19%) and October 1994 (21%).

Congress enjoyed a bump in public approval at the start of last year as the Obama administration was getting underway — fueled mostly by enhanced approval among Democrats and independents. Nearly all of that heightened support among independents had peeled off by last fall, and now Democrats are breaking away.

This certainly does not bode well for Democrats in November.

Posted February 8th, 2010 Filed in Government, Races of '10