Saturday, May 31, 2008

If Obama Wins, I'm Moving...No Goddamn Where

So Susan Sarandon claims she'll move to Italy if John McCain wins the presidency.  I have many reactions.  First, I think this is an enormous opportunity.  Let's band together America and make sure this annoying, faux-sex symbol (I've seen her in person, she's gross) has cause to high tail it to Tuscany or wherever.  Second reaction is that she's bluffing.  Didn't Alec Baldwin say he was going to France if GWB won in 2004?  Last I checked, we still had to deal with him, he wasn't sufficiently Francophiled in my book.  Third reaction is that I should make a statement in response.  What will I, as a prominent American (I get 20-25 hits every day BABY!), do if Barack " Holy Fuckin' Neophyte Nobody With Awful Judgement" Obama wins the Presidency?  Let me say this now...I won't move to France or to Italy or to Portugal or to bloody Estonia (although I want to move to Estonia) at all.  I'll stay in this blessed land and I'll deal with the Obamessiah's BS like a man.  I will shelter my damn income.  There are plenty of legal ways (and some 'on the fence' ways) to keep my hard earned income out of Barack's hands.  

Truth is, I am secure enough to ride out an Obama presidency.  I ain't rich (certainly by typical Obama supporter standards) but I am secure enough to hide in the shadows during an Obama presidency by not committing capital or exposing capital to excess taxation.  Word to can't make me write a check nor can you make me  cash out.  I am in control.  

Thursday, May 29, 2008

Good (Free Market) News on Healthcare

Excellent news on the healthcare policy front today if you caught a glimpse the WSJ Op-ed page. Florida Gov. Charlie Crist has brought home a policy reform that is a solid bullseye for advocates of pro-market, pro-consumer choice healthcare reform. Last I checked Florida was a pretty big and important state, whose policy is highly visible and influential around the country, so this is big news. The second bit of news comes from New Jersey (birthplace and childhood home of Donny Baseball [aside: here is the text of Bruce Springsteen's induction speech into the NJ Hall of Fame. He nailed it. Jersey Baby!]), where a porposal has been advanced in the legislature to allow Jerseyans to buy health insurance across state lines. Healthcare insurance in NJ is equally as disastrous as it is in my now-home state.

For deeper background on healthcare policy go here and here. Seriously, go there.

Get It On, Rex T.

Kudos to my fellow ExxonMobil shareholders for slapping down all of these silly shareholder proposals aimed to weaken ExxonMobil and for rebuking the busybody Rockefeller trust fund babies.

Here is an example of the distorted and shoddy reporting on the ExxonMobil shareholders meeting. It is about what you'd expect from the Canadian press. The first error, born of bias, comes right in the title "ExxonMobil CEO take aim at environmentalists". Truth is that environmentalists have taken aim at Exxon. They picked this fight. Tillerson is simply defending his company, which is his job. We don't have to wait too long for the second error, which this time is merely the result of shoddy journalism, for it comes in the first sentence. "Rex Tillerson, chairman and chief executive of Exxon Mobil Corp., the world's largest oil-and-gas company, came out swinging Wednesday..." ExxonMobil is not the world's largest oil and gas company. Not even close. It is the largest privately held oil and gas company, meaning the largest oil and gas company to allow such open and vigorous debate regarding its role in the industry and even in society. National Iranian Oil and Saudi Aramco, not so much.

Good work Rex. Now let's get it on.

Tuesday, May 27, 2008

``They should just pay up and shut up.''

Reason #37 why gas prices are high: Oil companies do business in places where piss ant thugs steal under the guise of state power.

Kudos to BoJo

Not only did newly-elected London mayor Boris Johnson scrap the policy of useful idiot former mayor, Ken Livingstone, of accepting cut rate oil from Venezuelan dictator Hugo Chavez, he did so while slipping in a bad pun. Who says England is in decline? For those of you who lament that now a few select people will pay more to ride the bus in one of the world's most expensive cities, what about the Venezuelans who don't have food at any price?

Unfortunately the useful idiots still reign here across the pond. My previous (hyper-insightful) take here.

Wednesday, May 21, 2008

One More (Pretty Big) "Whoops" On Ethanol

Forget about what corn-based ethanol is doing to food prices, the basic physics of ethanol as a fuel should be enough to expose our ethanol mandate as the stupidity that it is. Fortunately, you can always count on some functionary branch of the government to provide a real-world test case for the bad policies that emanate from the halls of the Great Sausage Factory. Sure enough, today's example comes from the US Postal Service. They bought a bunch of flex-fuel trucks. Turns out their ethanol vehicles burn more fuel and cost more. So, it is costing more to not achieve the stated goals (of reducing emissions). I don't know the difference in the chemical properties between corn-based ethanol and sugar-based (or cellulosic) ethanol, but this evidence would seem to damn ethanol full stop, regardless of what it is made of or where we get it.

Maybe this will get certain academic economists to cease obsessing about 'negative externalities' and focus on another fundamental economic concept, the 'deadweight loss'.

Friday, May 16, 2008

Rep. Tom Davis Has It Exactly Backwards

Tom Davis, apparently a very important Republican Sausage Factory Worker feels that Republicans must separate from George W. Bush, who he dubs as "radioactive." Davis is clueless. The Republican Party's basic problem is they have broadly abandoned their principles in a stunningly self-imposed destructive spiral downward. No one man could possibly achieve the level of cluelessness, denial, and cynicsm that has been the cause of Republican woes. It took a village...of idiots. Top of my list on this roster...Don Young. Young is the poster child for the unrepentant, entitlement-mentality that drives excessive, corrupt and rapacious raiding of taxpayer dollars for self-aggrandizement and personal incumbancy. Add to the list every member that defended and/or voted for any of Don Young's spending orgies (and given cover by asinine statements like Tom DeLay's declaration that all waste had been eliminated) and voted down Jeff Flake's courageous attempts to pull the party back from the ledge. Also, high on the list, squishy Senators like George "Cry Me A River" Voinovich, Olympia Snowe, Arlen Spector, and Lindsay Graham. Of course, there's the adolescent minds walking around in the bodies of putative adults, such as Mark Foley and Larry Craig. Oh, don't forget the outright crooks like Duke Cunningham.

Drilling in ANWR. The Republican dominated Sausage Factory couldn't push that through. Tax cuts. I've enjoyed them, but they're expiring thanks to their squishiness. Now they're scrambling to bail out people who made bad home-buying decisions. Still (still!) you want to spend billions on obnoxiously inefficient and distortionary farm and energy bills. All the while resisting any and every attempt to hold themselves to basic standards of accountability and transparency. Well, the ultimate accountability mechanism is in the offing - getting booted from office.

I, and many others like me, have been and would be 'money in the bank' votes for Republicans this November if it weren't for the embarrassing and frustrating Republican congress of the last 10 years. These Republicans have sawed off the small government leg of the stool that Reagan built. If I could "hit replay" and redo the last eight years with either George W. Bush or the Republican congress, I'd cashier the bozos in the Sausage Factory and keep GWB. Got that, Rep. Davis? Your buck passing and finger-pointing over your upcoming electoral prospects is perfectly apt for the cluelessness and detachment with which you have conducted yourselves over the years. I hope you lose. I hope many more Republicans lose. There is no resurrecting the small government, pro-growth, free-trade agenda with you and your ilk running the GOP.

UPDATE: If you want to know what I mean, check out this exchange. Larry Kudlow hits with some hard questions and just listen (read) to the meely-mouthed, weasel act that Rep. Eric Cantor puts out. Atrocious.

MORE: Here and , especially, here.

Wednesday, May 14, 2008

Donny Baseball's Anti-Max Baucus Capital Allocation Blueprint for Public Companies

Ripped directly from Strattec's (STRT) 2007 annual report:

"The Board therefore declared a regular quarterly dividend of $0.15 per share. Further, given the magnitude of our cash reserves and the current relatively favorable tax treatment of qualified dividends, the Board believes this is an opportune time to declare a special, one-time dividend of $1.00 per share. Both our initial quarterly dividend and the special dividend are payable on October 1st, 2007 to shareholders of record as of September 14, 2007."

Smart companies, and hopefully companies that I am invested in, will have this in their 2009 annual reports:

"Further, given our cash position and the impending changes in tax policy, the Board determined that the best way to return excess cash to shareholders was to declare a special dividend equal to the dividends that the company would have paid in fiscal years 2010 and 2011. This special dividend will be paid to shareholders of record on December 15, 2009, and subsequently the company will cease regular dividend payments. To compensate for the loss of regular dividends, the Board has increased the authorized share repurchase plan to allow the company to buy back up to 15% of outstanding shares through December 31, 2012."

Translation: "Suck it, Max Baucus."

Do the Polar Bear Fizzle

It is no coincidence. At about 2:30 pm, the EPA issued the silly proclamation that the polar bear is an endangered species due to melting arctic ice caused by global warming. It is well known that this is a major victory for environmentalists as it gives them another legal bat to beat business over the head with. Emit carbon? You're killing the polar bears and prepare to get sued. New energy supplies to support our growing economy? Fine, just not coal or oil or gas. Enjoying high energy prices? Get used to them. They just got harder to lower, regardless of what the Fed does. So what happened to the nice rally that was driven by today's inflation data? Toast.

Think I'm kidding? Wake up. This is terrible news for the economy and for the stock market. All this despite that the principal habitat for the polar bear lies outside of the borders of the United States. No matter to the mind of a regulator, they feel they can extend the hand of regulation anywhere they choose.

UPDATE: Whoops. Not so fast. I stand by my claim that the decision fizzled the rally, but apparently the fine print is worth reading. Environmentalists ain't happy...

"The decision includes guidelines to make sure the Endangered Species Act isn't used as a ```back door'' way to restrict greenhouse gases, said Kempthorne, who said his decision was based on melting sea ice. He said the guidelines ``will ensure the protection of the bear while allowing us to continue to develop our natural resources in the Arctic region in an environmentally sound way.''
Environmental groups denounced the decision. The Sierra Club said it was ``riddled with loopholes, caveats and backhanded language that could actually undermine protections for the polar bear and other species,'' said Carl Pope, the group's director.

Actually, looks like no one is happy...

"The Alaska Oil and Gas Association, which represents 17 oil companies that do business in the state, expects environmental groups to sue to block Arctic oil exploration, said Marilyn Crockett, the group's executive director, in a phone interview today. ``We are very disappointed,'' she said. "

Expect more court battles.

Safer Toys. Brought to You By...

Want safer toys for your kids? Don't waste your time writing your congressmen. Instead, shop at Wal-Mart. Despite a thicket of regulations that no doubt runs to tens of thousands of pages and a small army of bureaucrats, our federal government has been unsuccessful at preventing unsafe toys from being sold. Remember the Chinese-made toys that contained lead a few months ago? Now there is a new toy safety sheriff in town, and its name is Wal-Mart. Wal-Mart is blowing past the standards set by the government and you can bet the ranch that the folks in Bentonville will be able to enforce them.

Tuesday, May 13, 2008

Now Just Any Old Busybody Can Increase the Cost of Healthcare!

Previously reserved for a small minority of elected officials, screwing with and screwing up our healthcare system is now open to people like you and me!

Tucked away inside section A of today's WSJ is a nifty little account of how two busy-body private citizens (both lawyers if you can believe it) decided they wanted to make healthcare policy in Connecticut without having been elected to anything. What they wanted was more disclosure from insurance companies regarding reimbursement and approvals and they got the governor on board. Sounds good, right? Greater disclosure will bring "accountability" say these crusaders for the common good. Not really. What their "accountability" really amounts to, at the basic level, is paperwork. Paperwork is costly. So here is the spectacle of politicians and free-lance do-gooders who constantly tell us that they can and will make healthcare affordable by squeezing out costs, adding needless costs to the system by demanding increased levels of paperwork and compliance. Of course the immediate effect is a delicious taste of free market revenge, several of the private companies running the Medicaid program in Connecticut have dropped out of the program. Nobody has to engage in any business they don't want to (still, at least), and the likes of Anthem and WellPoint have said 'no thanks' to the Nutmeg state. Connecticut citizens will suffer, but you can thank the ignorance of these busybodies and their political enablers. Medicaid payments are a fixed revenue item set by government. Costs however are variable. Without the ability to increase revenue, why would any company accept what are essentially mandated higher costs? This was as foreseeable as you can get. And we still want more government involvement on our healthcare system?

Friday, May 09, 2008

So, You're Gonna Raise My Taxes?

Barack Obama: "I will raise taxes."

Donny Baseball: "I will shelter income."

Totally legally of course. IRAs, HSAs, 529s. Plenty to work with there. Build up a stash now, so maxing out all these contributions during an Obama presidency won't hurt you. Got some equity in your house? HELOCs are going cheap. If you were planning on doing an addition or any work that could add to the value of your home, now is the time. The HELOC can give you an additional mortgage interest deduction and you pad your long term asset base. Jittery about the housing market? Get over it. Buy that house and get that mortgage deduction and property tax deduction. Have more than 20% to put down? Stick to 20%. Put the excess in munis and take the bigger deduction. Own stocks? Write the Board of Directors and suggest they implement the Donny Baseball/Anti-Max Baucus Advance Dividend Payment Scheme.

Happy tax avoidance!

Wednesday, May 07, 2008

Why Most of Us Are Skeptical of Experts: We're Not Too Smart for Our Own Good

The WSJ accurately sums up the shifting tide regarding our momumentally stupid ethanol mandate. Further, Greg Mankiw posits that anything that goes against the tide of academic "expert" consensus is either ignorant, mendacious, or hubristic.

All this puts me in mind of an oldie-but-goodie post of mine in which I discuss Nassim Taleb's notion of the failure/unattainability of expertise. I humbly submit that it is worth your time.

Tuesday, May 06, 2008

Final Word on the Gas Tax Holiday

From Milton Friedman...
"I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."

Screw the 200 economists who oppose the gas tax holiday, I'll cast my lot with Uncle Milty.

UPDATE: Mankiw thinks the only possible explanations for advocating the gas tax holiday are ignorance, hubris or mendacity. Why would he say such awful things about Milton Friedman? Seriously though, notice the hubris that Mankiw exhibits, academic economists are the "experts" and thus ought to carry the day. They are the only people who could possibly be correct, they are the annointed. So the people who brought us the Phillips Curve , only to repudiate it, kind of, later; the people who write incessantly about ending poverty but never seem to end any poverty; the people who chronically warn us over the trade deficit although the richest nation the world has ever seen has run trade deficits nearly continually for more than a century; the people who elevate John Kenneth Galbraith the heights of their profession despite a stunning capacity to get it totally wrong. The people who tell us that unionization has kept wages high when union membership has fallen precipitously precisely over the time period where standards of living have exploded. The people who...OK, you get the point. Frankly, I gotta side with Hillary on this one, and I'll harken to Buckley's preferrence to be governed by the first 100 names in the Boston phonebook rather than by the Harvard faculty. So, basically I am advocating a "screw the experts" view on this one, a view which history tells us would put us in pretty good straits.

Finally, I think a smart candidate could neutralize all this academic elitism by claiming that Milton Friedman is now their chief economic advisor and reference the quote above. I doubt Hillary would cotton on to this, but it is not too late for John McCain. Hey, he's the straight talk guy after all, isn't he?

Gas Tax Holiday: Bad Policy, But Good Thing

The gas tax holiday proposed by both Hillary Clinton and John McCain has entered MSM hell where bad analysis and soundbyte journalism wreck any and all reasonable discussion. You know where I stand - any transfer of resource allocation to private hands from government hands is good - and GMU economist Bryan Caplan is OK with the idea too. Well, Instapundit has dug up a gas tax holiday that Obama supported ("Score One for Obama", indeed). And, to be intellectually honest, why shouldn't he? Consumers and voters want it. They see their gas taxes as too high and they know that gas taxes feed inefficient at best, and corrupt at worst, government spending on an enormous scale. While economists and analysts dub the holiday "bad policy" that is not the same as a "bad thing". Sure it is bad policy - any temporary change to tax policy is by definition bad policy, which ought to have a high degree of certainty; and, it doesn't do anything to solve deeper structural problems that cause high gas prices. But that doesn't mean the holiday is a bad thing. Buying the stuff we use cheaper is a good thing. Only an academic economist would tell you that it is not. Here in New York City, we were losing retail business to New Jersey and their tax-free enterprise zones just a train ride away, so we tested out several tax holidays in which clothing and shoes were exempt from city sales taxes. People loved it so much the state also dropped it's sales tax levy. The program was such a success, now there is no city or state sales tax on clothing and shoes under $110. That my friends, is what so many politicians and elites fear - that a gas tax holiday will prove so successful that voter demand for it to become permanent will increase. Think of all the power that would be taken away from politicians and global warming alarmists if they lost the power to tax your fuel consumption. They fear giving you a taste of gas purchases without tax for fear that you might actually like it - and it is they, not you, that know what is good for you.

It Was As Predictable As the Sun Rising

If you're like me (you should worry) and the sheer idiocy of US energy policy gets you down, here's what little cheer I can offer: at least we're not as dumb as Europe! To begin with, the power industry across Europe is essentially a state affair, so structurally there is no dynamism at all in the market. Then there are the oddball, dumb decisions. Take Germany for example. The Germans are supposed to be big greenies, but went ahead and started shutting down their nuclear plants in hopes that wind power would make up the difference. Good luck with that. Meanwhile they are more reliant now on Russian oil and gas, which isn't as clean or cheap as nukes and as an added bonus, Putin & Co. have their hands on the switch. (Gerhard Schroeder made out good though, he's on the Russian payroll.) Then overlay a tight regulatory regime aimed at reducing the speculative effects of the speculative phenomenon of global warming. The result, energy prices are on an aggressive march upward. In the US, we have today exactly the energy prices that we deserve based on our collective choices. In Europe it is the same, only more so. All together now in your best Dr. Phil voice, "We have ha enurgee pry sez, beecauz we wont ha enurgee pry sez."

Thursday, May 01, 2008

This Should End the Discussion on Universal Healthcare, But It Won't

Every once in awhile we get such a pure, distilled, unadulterated, undeniable, and unspinnable example of large-scale government incompetence to refresh our sense of tragic amazement at the workings of human organization. The latest example comes courtesy of the Census Bureau and the folks at the WSJ Op-ed page do absolutely everything they can with this rich material. Priceless. These are the same folks operating under the same incentives that would ensure your healthcare under a universal system. Have a nice day.