Category Archives: Economics

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks once again to Pirate’s Cove for the Rule Five links!

Some of you True Believers probably ingested some ethanol over the weekend just past, in various forms – I know I did.  The problem is, your car or truck is ingesting it too, and unlike your consumption, your vehicle’s ethanol is heavily subsidized by the Imperial government.  We could save folks a lot of money by getting rid of the whole ethanol scam.  Excerpt:

The Scientific American reports that roughly 40% of America’s corn crop goes to manufacture ethanol added to gasoline. That is more than the second largest use of corn — as feed for cattle, pigs and chickens — which consumes 36% of the annual corn crop. Is it wise to burn food for fuel, more than for feeding a hungry world?

Using so much of the corn crop for fuel has already caused world corn prices to rise sharply. That is not noticed in rich countries, but it has caused food riots in poor, Third World countries, where poor families consequently suffer hunger.

This is particularly outdated in a world flooded by oil and natural gas, due to the effects of modern fracking. That flood has already caused world prices of oil and gas to sink.

Contributing to these perverse effects is the U.S. Renewable Fuel Standard (RFS). That policy requires all transportation fuels sold in the U.S. to contain a minimum level of renewable fuels, such as ethanol.

Ethanol lobbyists say the RFS promotes economic growth. But the RFS is more like a tax increase than economic growth. The free market will always choose the least costly fuel alternative, without the need for any regulatory mandate. The ethanol mandate just raises costs above whatever the least costly alternative is.

The ethanol subsidy is, of course, heavily lobbied for in the farm states; a candidate cannot be elected dogcatcher in places like my own home state of Iowa if they don’t support various agricultural subsidies, including the ethanol horseshit.  And also, in those same places, you’ll hear a lot of rhetoric from pols about protecting the “family farm.”

But a farm – full disclosure, I come from a long line of farmers on both sides of my family – is not a holy calling.  It’s just a business, like any other.  And business models change.  Big corporate farms produce goods for consumers at lower cost than family farms, and subsidies in agricultural goods, like with any other goods, just screw up the self-regulating nature of markets and are always, in the end, inflationary.

Markets, not governments, should pick winners and losers.  That applies to fuels, foods, and everything else.

Rule Five Government Theft Friday

Let me begin by saying this:  Any government elected, appointed or hired official who supports civil asset forfeiture should be tarred, feathered and run out of town on a rail.  This family had their life savings stolen – yes, fucking stolen- by an illegitimate act of a government gone mad.  Excerpt:

Rustem Kazazi, 64, was headed to his native Albania to visit relatives in October, according to a federal lawsuit that he, his wife, Lejla, and son, Erald, filed this week in Ohio against the agency and others.
The suit alleges Customs and Border Protection used civil forfeiture laws to take the money without arresting or charging anyone with a crime.

Kazazi had planned to spend six months in Albania and buy a vacation home for retirement on the Adriatic coast, according to court documents. He also wanted to help members of his extended family, who are struggling, the court documents said.

To make the transactions easier and avoid bank fees, he reduced his family’s life savings to cash, packed it in a carry-on and brought it with him to the airport, according to the family’s lawsuit.

“He counted the cash several times, separated it into three stacks of $20,000, $19,100 and $19,000 each, and then, after counting again, labeled each stack with the amount it contained. He then placed the three stacks in a single envelope and wrote ‘$58,100’ on the outside,” the documents state.

Transportation Security Administration agents spotted the money inside Kazazi’s bag as he went through security on October 27 at Cleveland’s airport to catch a flight to Newark, New Jersey, before flying out to Albania, according to court documents. TSA called Customs and Border Protection agents, who took Kazazi’s passport and driver’s license, according to the filing.

He was put in a small private room for a body search, the documents state.

Kazazi speaks limited English, according to the lawsuit.

Customs agents “interrogated him without a translator, and then seized his family’s life savings without charging anyone with a crime,” according to the Institute for Justice, whose attorney, Wesley Hottot, is representing the Kazazi family in the lawsuit.

So, Mr. Kazazi – who is in the United States legally, legally worked and contributed to our economy and his community, wanted to take some of the resources he earned back to his country of origin to buy a home their and oh, by the way, help his family.  His resources.  Resources he earned, legally.

And government officials just seized the money.  Because fuck you, that’s why.

In what sane world are civil forfeiture laws not a gross violation of the Fourth and Fifth Amendments?  Mr. Kazazi was subjected to an unwarranted search, and had a considerable amount of property, the aforementioned $58,100, stolen by agents of the Imperial government with no due process.  Giving him a receipt for an unspecified amount of U.S. currency was just adding insult to injury.

This kind of horseshit should have been slam-dunked by the courts years ago.  Why hasn’t it been?

One my suspect the answer:  A court decision against this practice would dry up a big source of unearned increment (excrement?) for various levels of government.

If you’ve ever looked for reasons to strip government of power, this practice should be high up on the list.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links!

Moving along:  You can’t make this stuff up.  Excerpt:

At an island resort off the coast of Singapore, U.S. event planners are working day and night with their North Korean counterparts to set up a summit designed to bring an end, eventually, to the North’s nuclear-weapons program.

But a particularly awkward logistical issue remains unresolved, according to two people familiar with the talks. Who’s going to pay for Kim Jong Un’s hotel stay?

The prideful but cash-poor pariah state requires that a foreign country foot the bill at its preferred lodging: The Fullerton, a magnificent neoclassical hotel near the mouth of the Singapore River where just one presidential suite costs more than $6,000 a night.

The mundane but diplomatically fraught billing issue is just one of numerous logistical concerns being hammered out between two teams led by White House deputy chief of staff Joe Hagin and Kim’s de facto chief of staff, Kim Chang Son, as they strive toward a June 12 meeting.

So, if that batshit-crazy Stalinist regime can’t afford The Presidential Suite at the Fullerton, why not go for whatever the Singapore equivalent is of a Motel 6?  Honestly, it’s North Korea.  The short bus of nation states.  A Motel 6 ought to be good enough for a stunted little gargoyle with bad hair.

President Trump could always call ahead, ask the hotel to leave the light on for the Nork party.

Seriously, the Imperial government may deem it worth the shekels to spring for the rooms if it will get the Norks to the table.  But that seems a damned slim justification to me.  The message here should be “we are negotiating a deal that might result in crushing sanctions finally being lifted from your looney-tunes little excuse of a country.  You can damn well arrange your own lodgings.”

But that’s just me.

Rule Five Progressive Utopia Friday

Have a look at the reality of leftist utopias from someone who lived in one.  Excerpt:

I grew up in one of the most progressive societies in the history of humanity. The gap between the rich and poor was tiny compared to the current gulf between the ‘haves’ and the ‘have-nots’ we find across much of the West. Access to education was universal and students were paid to study and offered free accommodation. Healthcare was available to all and free at the point of use. Racial tensions were non-existent, with hundreds of different ethnic groups living side by side in harmony under the mantra of ‘Friendship of the Peoples.’ Women’s equality was at the very heart of Government policy. According to the prevailing ideology “all forms of inequality were to be erased through the abolition of class structures and the shaping of an egalitarian society based on the fair distribution of resources among the people.”

You are probably wondering whether the idyllic nation from which I hail is Sweden or Iceland. It was the Soviet Union.

And:

Low levels of wealth and income inequality were achieved by making everyone poor and restricting access to basic goods such as food, domestic appliances, and basic clothing. The ’emancipated’ women of the USSR were denied the evil fruits of misogynistic Western civilisation such as tampons, washing machines, and the ability to feed their children. And while healthcare provision was universal, it was also universally poor and entirely corrupt. Only people with influence, connections, and the ability to pay bribes could actually obtain good treatment.

University places which paid students to study were subject to the same corruption with examiners able to solicit bribes and favours. In exchange for an education, you forfeited the right to a future career of your own choosing—instead, you would be allocated a job by the state system, often in a completely different part of the country.

This is the inevitable result of socialism, folks, followed by economic collapse and either a peaceful restructuring in to a more market-based economy (see eastern Europe n the Nineties) or a complete meltdown (see Venezuela, right now.)  In the first case you get a reasonable transition that leads to more personal freedom, more economic freedom and greater prosperity.  In the latter, you get increasingly brutal government crackdowns and people starving and, due to increasing desperation, violent revolution.

The fall of the Soviet Union was somewhat in the middle, with an initially more liberal (in the classical sense) government slowly sliding back to authoritarianism under Czar Putin.  But it’s the comments on “equality” in this article that bring up that inevitable truism, that capitalism presents the equal distribution of opportunity, while socialism presents the equal distribution of misery.

Don’t expect this lesson to sink in with American lefties, though.  The counter-argument always seems to be that all of those failed socialist experiments just didn’t have the right Top Men in charge.  “They didn’t do it right.  We will.”

Uh huh…

This isn’t a cultural battle that will ever be won or lost, no matter how convinced either side is of the rightness of their cause.  And it’s sad, because one side is arguing for freedom, and the other, servitude.  There are elements of this longing for control in both major American political parties, sadly, and in pols of every description.  Robert Heinlein said it best:

Political tags — such as royalist, communist, democrat, populist, fascist, liberal, conservative, and so forth — are never basic criteria. The human race divides politically into those who want people to be controlled and those who have no such desire. The former are idealists acting from highest motives for the greatest good of the greatest number. The latter are surly curmudgeons, suspicious and lacking in altruism. But they are more comfortable neighbors than the other sort.”

Remember that next election season.

Animal’s Daily Seattle Stupidity News

Seattle has a homelessness problem.  So, as John Stossel notes, they are reacting by punishing businesses.  Go figure.  Excerpt:

Members of Seattle’s city council want all big Seattle businesses to pay a tax of $500 per employee.

In response, Amazon stopped building a new complex. Construction workers joined Amazon in protesting the new tax.

On the other side are city council members like Kshama Sawant. She and members of her political party, Socialist Alternative, demonstrated in support of the tax. They chanted, “Housing is a human right!”

Seattle does have large encampments of street people. Some are mentally ill. Some are young people looking to get stoned and live free. Some are homeless simply because they cannot afford apartments. There are many reasons for that, but one is that Amazon and other companies have brought so many new jobs to Seattle that the demand for housing exceeds the supply.

Normally, when that happens, the free market quickly solves the problem. Builders view the rising prices as a wonderful thing. They quickly build new housing to sell to the new customers. But in Seattle, and many towns in America, politicians make that very hard.

Seattle’s building code is 745 pages long.

If you want to build apartments, you better hire lawyers and “fixers” to keep you on the right side of the rules.

But at least the city’s overlords can see reason:

Monday, after Amazon’s pushback, the city council imposed a tax of $275 per worker instead of the originally proposed $500 tax.

The money raised, supposedly, will go to “solve” the homeless problem.  One consultant reckons that this will cost the city $400 million; funds they are unlikely to raise when their policies are driving major employers out of the city.

Stupid is as stupid does, and the Seattle City Council is being gobsmackingly stupid here.  Never mind the destructive head tax; never mind the ruinous zoning restrictions.  It’s a rule of nature that what you tax you get less of, and what you subsidize you get more of.  Seattle is proposing to tax employment and subsidize homelessness.  This won’t end well.

Animal’s Daily Doubling Down on Stupid News

Thanks as always to Pirate’s Cove and The Other McCain for the Rule Five links.  And, emphatically, thanks to all readers for your kind words on yesterday’s post.

Moving on:  California has evidently decided to address their housing affordability crisis by making things worse.  Excerpt:

For seven years, a handful of homebuilders offered solar as an optional item to buyers willing to pay extra to go green.

Now, California is on the verge of making solar standard on virtually every new home built in the Golden State.

The California Energy Commission is scheduled to vote Wednesday, May 9, on new energy standards mandating most new homes have solar panels starting in 2020.

If approved as expected, solar installations on new homes will skyrocket.

Just 15 percent to 20 percent of new single-family homes built include solar, according to Bob Raymer, technical director for the California Building Industry Association.

“California is about to take a quantum leap in energy standards,” Raymer said. “No other state in the nation mandates solar, and we are about to take that leap.”

The proposed new rules would deviate slightly from another much-heralded objective: Requiring all new homes be “net-zero,” meaning they would produce enough solar power to offset all electricity and natural gas consumed over the course of a year.

Now, I’ll admit one thing; if there’s a state where solar panels on roofs might be effective, it’s sunny Californey.  And I would never, ever object to someone deciding that solar panels on their roof was a good idea.  Where the stoopid comes in is in the comment:  “No other state in the nation mandates solar…”

Mandates, that’s the dumb part.  An appropriate response from California builders would be “fuck off, slavers” but I doubt that will be the case.  What will happen now is that California’s already high housing prices will rise even higher, and the exodus of the middle class from the Left Coast will accelerate.

Bug?  Or feature?

Rule Five Loony Ideas Friday

Everyone’s favorite loony old socialist from Vermont is at it again, this time promising Imperial jobs for all, to be paid for by… something.  Excerpts, with my comments:

Sen. Bernie Sanders (I-Vt.) is set to announce a federal jobs proposal that would guarantee a job with at least a $15-per-hour wage and health benefits to every adult American “who wants or needs one,” The Washington Post reports.

Senator Sanders, it should be noted, ascribes to the Underwear Gnomes Theory of Economics:

  1. Promise Free Shit
  2. Raise Taxes
  3. ???
  4. Profit!

The senator is still in the early stages of crafting the plan, according to the Post, which would provide a job or required training for any American.

Sanders’s office has yet to release the details of the plan’s funding, but previous large-scale projects proposed by the Vermont progressive have involved ending tax breaks for the wealthiest Americans and large corporations.

Which won’t pay for even ten percent of this lunatic idea.  What utter horseshit.

The Vermont senator joins two other possible 2020 contenders, Sens. Kirsten Gillibrand (D-N.Y.) and Cory Booker (D-N.J.), who have also expressed support for similar proposals in recent weeks.

And this could present a problem for the GOP; all the Dems have to do is continually promise more Free Shit.  It’s hard to run against Santa Claus.

“The goal is to eliminate working poverty and involuntary unemployment altogether,” Darrick Hamilton, an economist at The New School, told the Post.

It won’t.  It will just cripple private enterprise and balloon government wildly beyond the most fevered dreams of statists currently extant.

Fortunately:

The proposal would have trouble gaining enough Democratic support to get real traction and conservatives have long said a jobs promise is unsustainable and unaffordable, citing costs, the effects on the private sector and the possibility of inflation.

Honestly, this idea is probably not going anywhere.  (A few years ago would have left out the qualifier, but I’ve lost faith in the wisdom of the American electorate of late.)  But if a state, say, California, wanted to try such a nutcake idea, well, that’s the whole idea of Federalism, isn’t it?

California wouldn’t even have to secede to try some similar nutballery.  And since California has already abandoned any pretense of fiscal responsibility – just look at their state employees pension fund, or the state of their high-speed rail project – they wouldn’t even have to overcome that mental hurdle.

Let the laboratory of liberty experiment in California – and leave the Imperial government the hell out of it.

Animal’s Daily Hidden Tax News

This just in from libertarian scribe John Stossel:  Hidden Taxes.  Excerpt:

Yesterday was “Tax Day.” It was April 17 this year because April 15 fell on Sunday and Monday was Emancipation Day. But by calling April 17 “Tax Day,” the media miss the big picture. Income taxes make up less than half the tax most of us pay.

We also must pay payroll tax, corporate tax, gift tax, gambling tax, federal unemployment tax, gas tax, cable and telecom taxes, plane ticket tax, FCC subscriber line charges, car documentation fees, liquor and cigarette taxes, etc.

People can’t keep track. For my latest YouTube video, Tate asked people, “What’s your tax rate?” Tourists in Times Square said that they thought they paid about 20 percent. But they left off the hotel taxes, airline taxes, etc., that push Americans’ total tax load to almost 50 percent.

And yet, with all these taxes, the Imperial government is still 20 trillion dollars in debt.

There are two sides to this problem.

  1. Most people have no idea how much they are actually taxed, at all levels.  Here in the Casa de Animal we probably have a better idea than most, as we have been small business owners for years and have to make quarterly payments.  But payroll withholding has effectively ‘hidden’ direct taxes, and most folks aren’t bothered to add up all the various taxes and fees that suck away income.
  2. The scope of government is out of control.  No matter how much of our resources the government confiscates under threat of force (try not paying your Imperial taxes and see how long it takes them to send men with guns out after you) the governments spend more, and more, and more.  The answer is obvious and I’ve said it many times here:  Fuck you, cut spending.

There’s an answer to all this, at least at the Imperial level:  The balanced budget amendment and the FairTax.  But the odds of the Imperial Congress voting to strip themselves of that much power is so small as to be immeasurable; you’d have better odds counting neutrinos.

Animal’s Daily Government Waste News

Nobody should be surprised by this, but the Imperial government is going to audit the progress of Californey’s high-speed train to nowhere, and things aren’t looking good.  Excerpt:

Gee, I wonder what federal auditors will find — besides a phantom train set and a lot of wasted money? With a new study out showing that California doesn’t have the funding to complete even the first phase of their high-speed rail project, the Inspector General for the Department of Transportation will open the books to see how federal monies have been spent:

California’s high-speed rail project is facing an audit from the U.S. Department of Transportation’s as costs continue to climb.

The inspector general’s audit, announced Thursday, will examine the Federal Railroad Administration’s oversight of nearly $3.5 billion in federal grant money awarded to the project.

That’s bad news for a project that has already had plenty of bad news over the last several years. The IG will apparently focus mainly on how the FRA has performed in reporting on California’s progress rather than the performance of the California High-Speed Rail Authority. At issue will be whether the FRA has enforced project performance requirements, but that will still point out the lack of progress California has made despite all of the cash it received:

The federal money awarded to California comes with specific conditions that Kelly has promised to meet. They include completing a 119-mile (192-kilometer) segment of track now under construction in the Central Valley and finishing environmental reviews for the full line by 2022.

The audit will specifically evaluate how the Federal Railroad Administration determines whether California has complied with federal guidelines.

Out on a limb.

Let us all hazard a guess, shall we?  The state of this project’s finances will, very likely, be grounds for multiple prosecutions, if not a full-blown RICO investigation.  This is a cluster-fuck of, well, Californian proportions.

And the bad thing is this:  It was doomed to failure from the start.  A high-speed rail network will work in a country like Japan, where 200 million people live in a land the size of California.  Trains are even useful in the densely populated northeaster USA.  But in the wide-open Western states, where there are miles and miles of miles and miles?

Nope.

This entire project wasn’t thought up and pushed through for any practical reason.  It was state-wide virtue signalling, nothing but, in a heavy-handed attempt by government to wean people off their cars (which allow a pesky amount of independence and freedom of movement) and shove them into rail travel.

Doomed to failure, True Believers.  I’m sure you didn’t hear it here first, but it’s nonetheless true.

Goodbye, Blue Monday

Goodbye, Blue Monday!

Thanks once again to Pirate’s Cove and The Other McCain for the Rule Five links!

File this under “so obvious it’s not funny”:  Science Proves Communism Makes Nations Poorer and Less Healthy.

Duh.  Excerpt, with my comments interspersed:

Researchers testing historical connections between cultures found that whether a country had been under communism was the biggest factor for those with lower health, income and educational levels.

In the first undertaking of its kind, they analyzed the fortunes of 44 countries across Europe and Asia and looked at geography, religion, systems of government and a more intangible quality called “deep cultural ancestry.”

I wonder how you quantify “deep cultural ancestry?”

Writing in the journal Royal Society Open Science, they matched these factors against where they ranked on the United Nations Human Development Index, which measures per-capita income, life expectancy at birth and the number of years its citizens spend in education.

Actually those seem like pretty fair measures of how prosperous a society is.  I can think of many more, but it’s a start.

Most of the issues they looked at appeared to have little or no effect on the disparities between the countries, except for Islamic countries scoring a little worse on education.

Instead, the single strongest predictor for a country’s health, and the second-strongest for its wealth, turned out to be whether its rulers had embraced communism.

Who knew?  Well, anyone who has read about the history of communism – or anyone who has read a recent news story about conditions in North Korea.

I don’t have numbers, but I have a strong suspicion, backed by fifty-six years of direct observation, that the converse is true as well:  You can probably draw a direct correlation between per-capita income, life expectancy at birth and education and liberty.  That is to say, the free-est nations are almost certainly the most prosperous.

Why hasn’t anyone studied this?  Oh, wait – a big group of people have been studying it for over two hundred years.  We’re called Americans.  As supporting evidence, I offer the fact that people in every other nation of the world, including those who claim to hate us, all want to come live here.