"In This Economy, Fear Is Rational"

Title of a Feb. 23 article in The New York Times.

http://www.nytimes.com/2009/02/23/business/23views.html?ref=business

This is a curious piece, because despite feints at a conservative, i.e., rational, understanding of economics, it never once mentions the market. It's as if that whole concept has suddenly just dropped out of the picture (down the Memory Hole), an unfact, a datum non grata (gratum?). What better way to abolish the market than to silence the very word?

Unfortunately the market cannot be bypassed in this way; the market, in fact, is the reason the lords of finance are having such a devil of a time "managing" the world economy. You can't fool the market; the market is reality, and it's having its revenge.

I read a sci-fi novel once, I think it was called "Virus," which posited a financial meltdown caused by a computer virus. The solution in the end was that the world agreed to set the value of everything back to what it was before the virus struck, and proceed from there.

There can be no solution to the current panic without allowing the market to operate, painful though that may be for some, and perhaps for all.

Marianalysis!

Below is a list someone forwarded of many if not most items included in the stimulus package being pushed by the ruling class.

I have gone through and highlighted in red those portions of the listed items that do appear to be the kind of make-work but useful sorts of things that might actually function as stimulus (e.g., "modernization, renovation and repair" of existing productive facilities and infrastructure). I left out military-related items on the theory that such spending is inherently of negative value, that is, wasteful. I also left out government-sponsored research on the theory that if the market (real demand) can't or won't support it, it will ultimately prove a waste of time and money.

The Wall Street Journal has estimated that only 12% of the almost $1 trillion total will be truly "stimulating" spending. My calculation is that $42,816,000,000 or about 4.67% of the currently mentioned amount might be stimulus-producing. However, since most of the facilities to be built or renovated are themselves government-related, the REAL value of that building and renovation is much less than if actual farmland or manufacturing (plantings and plants, so to speak) were involved. For instance, renovating Dept. of Agriculture edifices only strengthens an agency that has always had the effect of damaging, distorting and destroying agriculture in the United States.

Also, the Carrying Capacity Network and others have pointed out that nothing in the bill prevents many of the proposed construction jobs from going to illegal immigrants, which of course will do nothing to help our fellow Americans get back on their feet - quite the contrary.

Thus even the most generous definition of stimulus amounts here to less than one-twentieth of the amount being so loudly demanded.

My favorite quip that's come out of the Crisis so far is the anti-Keynesian "You can't get rich by writing yourself a check."

Note: Daniel Guerin was a fiery French anarchist whose 1939 book Fascism and Big Business remains a fascinating analysis of the "capitalist crisis." He noted that capitalism goes through regular crises of profitability, prevented from making new investments or introducing new technology by the need to amortize (and pay off the compound interest) on previous investments and technology. "The authors of the New Deal," he wrote, seventy years ago, "temporarily succeeded in restarting the capitalist machine only by arms purchases even more gigantic than those in Germany. With the return of peace, American capitalism could survive only by remaining on a war footing" (this last sentence was added to the 1945 edition).

"[The state]," Guerin continued, "is always ready to come running whenever these [capitalist] gentlemen cannot pull through by themselves. In any such crisis, it is immediately at their service, 'socializing' their losses, refloating their enterprises, and keeping them alive with its orders."

The "paradox" is that this function is now being performed by self-professed socialists and "unrepentant" leftist revolutionaries!

Guerin's tombstone bears the epitaph "Ni dieu ni maitre" (Neither god nor master) ...

See if your pet project is in this list!

Just Some of the Economic Stimulus Bill By Jamie Dupree

What follows are a number of the spending projects included in the economic stimulus bill filed by Democrats late on Friday, which will be voted on in coming days by the House of Representatives.

This is Not a Complete List.

Instead, it is an overview of some of the major items found in this bill in terms of spending.

No judgments are made about the need for these expenditures.

That is up to you, the voter, and your elected members of the House and Senate.

You can find the full text of the bill, H.R. 1 at

http://www.rules.house.gov/111/LegText/111_hr1_text.pdf

Here is a sampling of what we found:

$44 million for construction, repair and improvements at US Department of Agriculture faculties

$209 million for work on deferred maintenance at Agricultural Research Service facilities

$245 million for maintaining and modernizing the IT system of the Farm Service Agency

$175 million to buy and restore floodplain easements for flood prevention

$50 million for "Watershed Rehabilitation"

$1.1 billion for rural community facilities direct loans

$2 billion for rural business and industry guaranteed loans

$2.7 billion for rural water and waste disposal direct loans

$22.1 billion for rural housing insurance fund loans

$2.8 billion for loans to spur rural broadband

$150 million for emergency food assistance

$50 million for regional economic development commissions

$1 billion for "Periodic Censuses and Programs"

$350 million for State Broadband Data and Development Grants

$1.8 billion for Rural Broadband Deployment Grants

$1 billion for Rural Wireless Deployment Grants

$650 million for Digital-to-Analog Converter Box Program

$100 million for "Scientific and Technical Research and Services" at the National Institute of Standards And Technology

$30 million for necessary expenses of the "Hollings Manufacturing Extension Partnership"

$300 million for a competitive construction grant program for research science buildings

$400 million for "habitat restoration and mitigation activities" at the National Oceanic and Atmospheric Administration

$600 million for "accelerating satellite development and acquisition"

$140 million for "climate data modeling"

$3 billion for state and local law enforcement grants

$1 billion for "Community Oriented Policing Services"

$250 million for "accelerating the development of the tier 1 set of Earth science climate research missions recommended by the National Academies Decadal Survey."

$50 million for repairs to NASA facilities from storm damage

$300 million for "Major Research Instrumentation program" (science)

$200 million for "academic research facilities modernization"

$100 million for "Education and Human Resources"

$400 million for "Major Research Equipment and Facilities Construction"

$4.5 billion to make military facilities more energy efficient

$1.5 billion for Army Operation and Maintenance fund

$624 million for Navy Operation and Maintenance

$128 million for Marine Corps Operation and Maintenance

$1.23 billion for Air Force Operation and Maintenance

$454 million to "Defense Health Program"

$110 million for Army Reserve Operation and Maintenance

$62 million for Navy Reserve Operation and Maintenance

$45 million for Marine Corps Reserve Operation and Maintenance

$14 million for Air Force Reserve Operation and Maintenance

$302 million for National Guard Operation and Maintenance

$29 million for Air National Guard Operation and Maintenance

$350 million for military energy research and development programs

$2 billion for Army Corps of Engineers "Construction"

$250 million for "Mississippi River and Tributaries"

$2.2 billion for Army Corps "Operation and Maintenance"

$25 million for an Army Corps "Regulatory Program"

$126 million for Interior Department "water reclamation and reuse projects"

$80 million for "rural water projects"

$18.5 billion for "Energy Efficiency and Renewable Energy" research in the Department of Energy. That money includes:

$2 billion for development of advanced batteries

$800 million of that is for biomass research and $400 million for geothermal technologies

$1 billion in grants to "institutional entities for energy sustainability and efficiency"

$6.2 billion for the Weatherization Assistance Program

$3.5 billion for Energy Efficiency and Conservation Block Grants

$3.4 billion for state energy programs

$200 million for expenses to implement energy independence programs

$300 million for expenses to implement Energy efficient appliance rebate programs including the Energy Star program

$400 million for expenses to implement Alternative Fuel Vehicle and Infrastructure Grants to States and Local Governments

$1 billion for expenses necessary for advanced battery manufacturing

$4.5 billion to modernize the nation's electricity grid

$1 billion for the Advanced Battery Loan Guarantee Program

$2.4 billion to demonstrate "carbon capture and sequestration technologies"

$400 million for the Advanced Research Projects Agency (Science)

$500 million for "Defense Environmental Cleanup"

$1 billion for construction and repair of border facilities and land ports of entry

$6 billion for energy efficiency projects on government buildings

$600 million to buy and lease government plug-in and alternative fuel vehicles

$426 million in small business loans

$100 million for "non-intrusive detection technology to be deployed at sea ports of entry

$150 million for repair and construction at land border ports of entry

$500 million for explosive detection systems for aviation security

$150 million for alteration or removal of obstructive bridges

$200 million for FEMA Emergency Food and Shelter program

$325 million for Interior Department road, bridge and trail repair projects

$300 million for road and bridge work in Wildlife Refuges and Fish Hatcheries

$1.7 billion for "critical deferred maintenance" in the National Park System

$200 million to revitalize the National Mall in Washington, D.C.

$100 million for National Park Service Centennial Challenge programs

$200 million for repair of U.S. Geological Survey facilities

$500 million for repair and replacement of schools, jails, roads, bridges, housing and more for Bureau of Indian Affairs

$800 million for Superfund programs

$200 million for leaking underground storage tank cleanup

$8.4 billion in "State and Tribal Assistance Grants"

$650 million in "Capital Improvement and Maintenance" at the Agriculture Dept.

$850 million for "Wild land Fire Management"

$550 million for Indian Health faculties

$150 million for deferred maintenance at the Smithsonian museums

$50 million in grants to fund "arts projects and activities which preserve jobs in the non-profit arts sector threatened by declines in philanthropic and other support during the current economic downturn" through the National Endowment for the Arts

$1.2 billion in grants to states for youth summer jobs programs and other activities

$1 billion for states in dislocated worker employment and training activities

$500 million for the dislocated workers assistance national reserve

$80 million for the enforcement of worker protection laws and regulations related to infrastructure and unemployment insurance investments

$300 million for "construction, rehabilitation and acquisition of Job Corps Centers"

$250 million for public health centers

$1 billion for renovation and repair of health centers

$600 million for nurse, physician and dentist training

$462 million for renovation work at the Centers for Disease Control

$1.5 billion for "National Center for Research Resources"

$500 million for "Buildings and Faculties" at the National Institutes of Health in suburban Washington, D.C.

$700 million for "comparative effectiveness research" on prescription drugs

$1 billion for Low-Income Home Energy Assistance

$2 billion in Child Care and Development Block Grants for states

$1 billion for Head Start programs

$1.1 billion for Early Head Start programs

$100 million for Social Security research programs

$200 million for "Aging Services Programs"

$2 billion for "Office of the National Coordinator for Health Information Technology"

$430 million for public health/social services emergency funds

$2.3 billion for the Centers for Disease Control for a variety of programs

$5.5 billion in targeted education grants

$5.5 billion in "education finance incentive grants"

$2 billion in "school improvement grants"

$13.6 billion for Individuals with Disabilities Education Act

$250 million for statewide education data systems

$14 billion for school modernization, renovation and repair

$160 million for AmeriCorps grants

$400 million for the construction and costs to establish a new "National Computer Center" for the Social Security Administration

$500 million to improve processing of disability and retirement claims

$920 million for Army housing and child development centers

$350 million for Navy and Marine Corps housing and child development centers

$280 million in Air Force housing and child development centers

$3.75 billion in military hospital and surgery center construction

$140 million in Army National Guard construction projects

$70 million in Air National Guard construction projects

$100 million in Army Reserve construction projects

$30 million in Navy Reserve construction projects

$60 million in Air Force Reserve construction projects

$950 million for VA Medical Facilities

$50 million for repairs for military cemeteries

$120 million for a backup information management facility for the State Department

$98 million for National Cyber security Initiative

$3 billion for "Grants-in-Aid for Airports"

$300 million for Indian Reservation roads

$300 million for Amtrak capital needs

$800 million for national railroad assets or infrastructure repairs, upgrades

$5.4 billion in federal transit grants

$2 billion in infrastructure development for subways and commuter railways

$5 billion for public housing capital

$1 billion in competitive housing grants

$2.5 billion for energy efficiency upgrades in public housing

$500 million in Native American Housing Block Grants

$4.1 billion to help communities deal with foreclosed homes

$1.5 billion in homeless prevention activities

$79 billion in education funds for states

Scot free?

Since the latest financial bubble popped so loudly, commentators have been recalling a gentleman named John Law. Law was an adventurous Scot who back in the very early 1700s came up with the "Mississippi Scheme," a speculative investment project which ended up just about bankrupting the French nation. The project had so many repercussions that the first 45 pages of Charles Mackay's classic Extraordinary Popular Delusions and the Madness of Crowds ( 1841) are devoted to it.

Was Law then an economic criminal in the class of Charles Ponzi, Alexandre Stavisky or Bernard Madoff? Mackay himself is ambivalent, on the one hand saying that "Historians are divided in opinion as to whether they should designate him a knave or a madman," and on the other asking, "How was [Law] to foretell that the French people ... would kill, in their frantic eagerness, the fine goose he had brought to lay them so many golden eggs?"

A recent book by Niall Ferguson, The Ascent of Money, terms John Law "the man who invented the stock market bubble." In Arthur Herman's How the Scots Invented the Modern World, Law is portrayed as "a dreamer who never let details get in the way of a good plan," a visionary who "convince[d] the French crown to set up the Bank Royale."

Where does the truth lie, I wonder. Not all financiers are swindlers. But even if high finance can be a good thing, we have had much too much of it.

Mea taxima culpa

As a middle-class American, I know it is my fault. What is? (Ask rather, What is not?) In this case, "it" refers to sluggish sales at this most sacred retail time of year, the Holidays.

I should be out there buying, purchasing, acquiring, getting; I should be stretching every last atom of what credit remains to me helping to prop up the giant edifice and grease the vast machinery of American Consumption, without which, apparently, the economy of the entire world is grinding to an ungainly halt.

Yet I confess to confusion: I am told I neither save enough nor spend enough. With impatience I await the far more specific orders that are bound to emanate profusely from the Obama White House. Perhaps these orders will be simplified by Obama's new tax policy. If I have no money left after taxes to misuse, surely I can't make any more bad decisions, and the great ship of State will right itself and sail forward once again ...

Voltaire's Candide

. . . offers us, 260 years on, a way to look at the world and a way to act in it that can scarcely be improved upon.

Everything is for the best

in this best of all possible worlds.

And,

We must cultivate our own gardens.

Mystery post

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A blessing in disguise?

It sure does look as though the mighty powers aligned behind the B.H. Obama candidacy will get their way next Tuesday, although - oddly - a majority of voters seems to be shuddering at the prospect. According to a recent poll (http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/63_say_obama_more_likely_to_restrict_gun_rights),
most Americans think Obama will increasingly ban guns - and we also know that most Americans don't care for that sort of thing.

But imagine what the election of John McCain would mean.

• Four more dismal years of Bush-Republican rule. Despite McCain's protestations to the contrary, he is more like Bush than any other of the Republican candidates he defeated. His election would mean no well-deserved repudiation of the Bush experiment in preemptive war, currency debasement and throwing ersatz money around like a drunken apparatchik - all the while calling it "conservatism" and wrecking the rep of the GOP.

• Continued malaise on the right. Sure, the GOP would be "in power," but with what mandate, and with what energy? Let the Democrats take over the mess; conservatives need to regroup, buck up, and take a long hard look at how the past eight years could have happened, so that it may never happen again.

• Misuse of Sarah Palin. Peggy Noonan may not fancy Sarah, but most conservatives do - a lot. Is suddenly being made vice-president the best use of this tremendous natural resource? Palin should be allowed to develop, gain experience, and truly blossom as a leader. She has the potential to be our Maggie Thatcher - but not just yet.

• 1992 all over again. An Obama presidency would rejuvenate, resurrect, resuscitate, reenergize, reanimate and re-you name it the conservative movement. Especially if the Dems contrive a trifecta, the makings of the 1994 Republican Revolution will once more be in play. And this time we will not be saddled with Newt Gingrich: May we learn from his disgraced example, both political and personal.
  

• And last/not least: We would be deprived of the spectacle of Barack Hussein Obama playing the role of President of the United States.