How a Rational US President Would Create Jobs Now

A rational US president who was genuinely concerned about revitalising the American economy, would first remove all unnecessary and nonsensical government impediments to business investment and enterprise. Commerce and industry are particularly susceptible to government restrictions on the energy, power, and fuels that run society's crucial machinery. That would be a good place to start.

Video h/t Washington Examiner

Imagine if all of Obama's devastating policies of energy starvation were revoked. The resulting growth of jobs, revenues, and energy production would be astounding. Growth of jobs directly involved in energy production, transport, and sales, would be just the beginning. Each new energy job would stimulate the creation of supporting jobs in services, housing, manufacturing, infrastructure, etc. And so it goes: growth breeds growth.

The images below are taken from a report released last week by Wood MacKenzie, looking at the impact of relaxing just a few of President Obama's anti-energy policies (h/t Powerlineblog).

Job Creation Under Relaxation of Obama RulesWood Mackenzie’s analysis found that U.S. policies which encourage the development of new and existing resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, support an additional 1.4 million jobs, and raise over $800 billion of cumulative additional government revenue.
_quoted_in_Powerlineblog

Enhancement of Government Revenues Under Relaxation of Obama Anti-Energy RulesThe report assumes that the following changes would be made to existing Obama policies in order to allow energy and economic recovery to occur:

• Opening of Federal areas that are currently “off limits” to exploration and development
• Commencement of leasing, drilling and development activity in currently closed regions. Regions to be opened include: Eastern Gulf of Mexico, portions of the Rocky Mountains, Atlantic OCS, Pacific OCS, Alaska National Wildlife Refuge (ANWR) – 1002 Area, National Petroleum Reserve, Alaska (NPRA) and Alaska offshore

• Lifting of drilling moratorium in New York State
• Commencement of drilling and development of Marcellus shale in New York State

• Increased rate of permitting in the offshore Gulf of Mexico
• Allows for a return to pre-Moratorium exploration and development activity

• Approval of the Keystone XL and other future Canada to U.S. oil pipelines
• Facilitates additional Canadian oil sands development, thereby increasing the demand for U.S. supplied equipment and infrastructure

• Regulation of shale resources remains predominately at the State level
• Environmental regulation of shale gas and tight oil plays are not duplicative or unduly burdensome. Permitting levels are at sufficient rates to develop resources in a timely manner _quoted_in_Powerlineblog

Increased Energy Production Due to Relaxation of Just a Few of Obama's Energy Starvation Rules
The improvements projected in the Wood MacKenzie report (PDF) are based largely on the revocation of Obama's de facto offshore oil moratorium, the approval of pipelines from Canada through the US for oil sands transport, and a cleaner and more streamlined set of regulations overseeing shale oil & gas production. The report also assumed an opening of currently blocked oil & gas resources in the Arctic and in the US mountain states, for development, and a reduction of duplication of bureaucratic environmental regulations.

In reality, according to Al Fin energy analysts, a more rational pro-energy policy would improve North American jobs, government revenues, and energy production far more quickly and to higher levels than the Wood Mackenzie report suggests. The reason our analysts are so confident is that potential for development of massive coal and kerogen deposits were not closely considered in the projections. Nor was the potential for development of advanced nuclear energy technologies for both uranium and thorium cycle reactors carefully considered.

Abundant energy opens the doors to other industries and commerce, which means more jobs and more revenues even in areas far removed from direct energy production or sales. The converse is true: energy starvation reduces jobs and revenues not only in the energy-related industries, but in society as a whole. And that is where the US stands under President Obama's policies.

Energy starvation -- shutting down reliable energy in favour of unreliable forms of energy such as big wind and solar -- is never a smart policy. It is a strongly ideological policy promoted by green faux environmental activists, with the unspoken aim of whittling away at the industry and commerce which support advanced economies. Economies which fall under the curse of energy-starvation policies slowly succumb to worsening economic conditions.

Adapted from an article published on Al Fin Energy

More: Three more places where Obama policies are holding back wealth and energy creation: Julia, Arctic, Bakken

The Obama agenda could not be more destructive of US jobs and the US economy if it were designed specifically to wreck the private sector.

Global Control of Economic Super-Network

Brian Wang links to a 36 page PDF report which attempts to tease apart the tangles of the global financial super-network of control. Who is pulling the strings of global economies and governments?

36 page PDF at ArXiv

In 2007, a mere 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations, researchers report in a paper published online July 28 at arXiv.org.

...The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers. _NBF

NBFThe superentities listed above exist in order to acquire more control so as to climb ever higher on the ladder and especially to avoid dropping to a lower rung. In order to achieve this goal, superentities must maintain close connections with national governments around the world, and with supranational and multinational entities of all kinds.

At this level of action, all is fair as long as one is not caught or punished too severely.

Libertarians typically focus their efforts against government regulations, taxes, and controls of all kinds -- because government entities are a more immediate problem and conern. But multinational and supranational entities can cause severe limitations of freedom just as surely as local, regional, and national governments. But the superentities must act through the authority of local, regional, and national governments -- which is a key point.

These superentities could not exist without the complicity and cooperation of national governments. Powerful individuals frequently occupy positions of authority in either governments, multinational entities, international agencies, or superentities -- at any given time. The movement of persons of influence at these high levels of power, between these various power structures, is quite fluid.

Popular media tends to ignore the actual wielding of power, in favour of circus side shows to keep the public's attention occupied. The public, of course, is complicit in the entire charade, and would apparently prefer to be kept in the dark so as to avoid responsibility on a personal level.

Men of peace have long dreamed of a supranational entity which could limit the power of governments to make war on each other, or on their own people. High hopes were placed in the League of Nations after WWI, and in the United Nations after WWII. But what has evolved instead of a world government is a shadow network of superentities which exert significant -- although not total -- control of most of the world's governments.

As noted, competition within this network can be fierce and brutal. While the supernetwork would generally prefer to handle differences via established channels, there is always the possibility that a superentity will consider the risk of limited war to be acceptible.

Larger wars would upset the balance of power unduly, and are generally discouraged by the supernetwork. This attitude is important, given the large influence which superentities exert upon national governments.

But if something unexpected were to come along to potentially upset the balance of power, it is possible that a portion of the supernetwork would be willing to go to war on a large scale pre-emptively, to maintain its clout. Issues of war and peace are often considered, like other bargaining pieces on the table, albeit behind the scenes and secretly.

If these ideas make you uncomfortable, your best means of protecting yourself is probably via your representative government. But since governments are so deeply interconnected with supranational entities, your task will be very difficult if you actually want to change anything about the influence of the supernetwork on your life.

Best to start with your own situation, then work outward from there. Take care of things -- and make suitable preparations -- on a local level first. Then proceed as you can. Take your time. If you are old, try to inform persons of the younger generation, so that they can work to expand personal freedoms in the future.

Superentities exist in many forms -- not just as financial, commercial, and industrial powerhouses. The environmental-political complex has become a global superentity with enormous influence and power -- a significant threat to personal freedoms. It must be considered along with the rest. And so on.

Hope for the best, but prepare for the worst. In general, group action is more effective than individual action. Focus on what you can do, not on what you can't.

Crime and Immigrant Welfare by Region

Intentional homicide rates per 100,000 population by region and subregion, 2004[6]	Rate
Southern Africa	37.3
Central America	29.3
South America	25.9
West and Central Africa	21.6
East Africa	20.8
Africa	20
Caribbean	18.1
Americas	16.2
East Europe	15.7
North Africa	7.6
World	7.6
North America	6.5
Central Asia and Transcaucasian countries	6.6
Europe	5.4
Near and Middle East/South-west Asia	4.4
Oceania	4
South Asia	3.4
Asia	3.2
South-east Europe	3.2
East and South-east Asia	2.8
West and Central Europe	1.5

Table from Wikipedia

An Audacious Epigone
Welfare use by immigrants from particular countries and regions.

International Homicide Rates Neglecting Subsaharan Africa and South America

World IQ Map via Wikipedia
If one were designing a rational immigration policy in a time of massive national debt and prolonged economic downturn, one would tend to favour immigrants who were more likely to contribute positively to national productivity and achievement. In general, one would not favour immigrants from nations with high crime rates, low average IQ, or nations whose previous immigrants had high rates of welfare dependency.

Unfortunately for the US, current immigration policies are leading to a high influx from just such regions. How stupid is that? Welcome to the coming Idiocracy.

Who is John Galt?

Makers vs. Takers; Moochers vs. Producers

Makers are essential to life. Humans must exert effort to create the food, housing, clothing, and other things we need and want. Producers are the people who make that effort and deliver the goods.

Some think producers are limited to corporate moguls, but in fact, they include anyone on any level — from janitors to company presidents, in small or large organizations — who earn what they have and don’t steal from others.

Producers offer their goods through voluntary trade — capitalism. Whenever producers have been the freest, the result has been an explosion of wealth and prosperity and a high standard of living for everyone. Witness 19th-century America or today’s least-regulated fields, like technology.

The opposite type is the taker, who wants to forcibly live off others’ efforts. Looters are takers who jockey for positions in government in order to seize wealth and gain power over producers. Moochers vote the looters into power in order to receive government benefits like welfare, subsidies, grants, business advantages, or jobs.

Since its inception, America has been a land of producers. The world’s most can-do people cleared farms, opened shops, lived and traded with one another in harmony, and created the great middle class — the producer class. Now, many Americans take no responsibility for their lives. Instead, they line up for money that’s not theirs; it’s simply “Obama money.” _DC

From Madison, Wisconsin to Washington, DC, the battle of moochers vs. producers is being played out across the US. Interestingly, this contemporary battle was foreseen half a century ago by an author whose magnum opus is just now making it to the silver screen.

“Atlas Shrugged: Part I,” which opens April 15th, is a movie unlike any other. Based on Ayn Rand’s novel, it dramatizes the fundamental conflict gripping our world: the battle between those who create value and wealth through their own efforts (the producers) and those who seek them through force (the looters and moochers).

With eerie accuracy, Rand’s novel depicted — in 1957 — the very struggle between these diametrical opposites that we’re witnessing today. This battle couldn’t be more important because the fate of civilization rests on the outcome. Since this conflict inescapably affects everyone, it’s crucial to know which side you’re on.

In Atlas Shrugged, producers like railroad executive Dagny Taggart and self-made steel titan Hank Rearden create new products and services, offer them in free trade, and consequently become rich. They are exploited by looters and moochers like Dagny’s brother James Taggart and steel executive Orren Boyle, who seek government intervention that favors them and thwarts their competition. In the story, the producers are vilified and their property expropriated, until they disappear. Without them, the country collapses.

Sound familiar? Today, America is in decline. The Wall Street Journal reports that “the number of U.S. IPOs has plunged to an annual average of about 130 since 2001 from an average of 503 during the 1990s.” Our nation’s debt is skyrocketing. Government has seized unprecedented control over industries like healthcare and banking. Corruption, group warfare, and the sense of “entitlement” to other people’s money are rampant. As Steve Moore notes in “We’ve Become a Nation of Takers, Not Makers,” public jobs, money, and power are burgeoning while the private sector is shrinking _DC

More on how the US became a "looter state."
Producers may either generate something of value, or they may trade items of value on the open market. Moochers tend to beg, borrow, and steal with no intention of reciprocating value for value. When governments and government employees become net moochers, citizens often have nowhere to turn for redress of grievances. That is how life has been for the governed since the inception of central governments above a certain size.

As the above article states, the US was set up to benefit producers -- either creators of value or merchants of value. But the moochers have creeped into control over time, portraying themselves as protectors of the disenfranchised -- much to their own benefit, and to the gradual but accelerating ruination of the entire nation's economy and productive base.

Consider reading Atlas Shrugged, or seeing the movie, just to get your subconscious working on solutions to the problem. It will not be easy, because things have degenerated much too far. Start with planning a competent community able to pick itself up and take off from there. Then consider how such communities might work together over time to build entire regions that are more producer friendly.

The idea is too important to leave to just one nation.

US Government Desperately Needs a Maintenance Shutdown

Machinery of all types experience wear and tear over time. Routine scheduled shutdowns for vital maintenance are part of any industrial plant's life cycle in the developed world. Such routine and profound plant overhauls prevent disastrous failures at future times. The machinery of large governments is no different -- it needs to be shut down periodically for crucial maintenance, replacement, and refurbishing.

The US government is in current desperate need of overhaul, requiring deep surgical cuts to prevent a far worse catastrophic failure in the future. Despite rampant quasi-superstitious fears over the thought of a government shut-down, the alternative of "business as usual" is the genuine cataclysmic alternative.

The government in Belgium has been shut down for 257 days, and the people there seem happy with the result. In the US, as long as the social security checks and other important entitlement disbursements continue during the shutdown, the people of America should be likewise content. Particularly if they were made aware that crucial maintenance was being done to the government, to allow it to avoid a massive breakdown within the next decade or two.

Fiscal policies of government are in particular need of overhaul, with no end in sight for a growing massive debt. Educational, immigration, and cultural policies are leading to a dumbed down Idiocracy which cannot support a high tech society for long. Current energy policies are leading to a terminal energy starvation whose fatal repercussions will rebound through the US economy and society in devastatingly short order.

The US elections of 2010 revealed a deep-seated dissatisfaction among the American electorate, with the direction of the Obama - Pelosi - Reid regressive government. Most Americans believed the nation was being badly mis-directed by its leadership. The election of 2010 re-arranged the US Congress as well as state-level legislatures and governorships. It was not a merely cosmetic overhaul.

There is an awakening at the American grassroots -- particularly among persons who must produce the wealth which the rest of the country lives on -- that the American government has grown a huge crop of freeloaders both within and around Washington DC and state capitals. It is an unsustainable crop which is choking off any chance of economic prosperity for the nation at large.

A few modest attempts to right some of these wrongs in the state of Wisconsin has led to a massive reactionary and potentially violent government-sector union response. President Obama himself has denounced the Wisconsin governor's attempts to balance the Wisconsin state budget -- using his campaign apparatus to bus in hundreds or thousands of outside agitators-for-hire in an attempt to intimidate the government and people of Wisconson into acquiescing to their own death-by-parasites.

What is happening in Wisconsin is bound to happen in many or most other US states, and eventually in the US government. No one knows how violent and bloody these standoffs can become, if the freeloaders of the public sector decide to go all out in demanding their special privileges and benefits. Mr. Obama has so far done everything he can to fuel public union intransigence, anger, and potential violence.

If something cannot go on forever, it will eventually stop. It is in the interest of government and public sector unions to accept the reality that a perpetual wild and exponential growth in their ranks and benefits is unsustainable. An orderly shutdown and overhaul -- similar to a deep maintenance shutdown in an industrial plant or a "controlled burn" in the wild -- is mandatory to prevent a cataclysmic collapse eventually.

Scheduled, elective surgery is always in the best interest of the patient, the surgeon, and the medical centre. It is time to schedule a deep surgical procedure on the US government.

A Bright Clear Knowledge Threatens the Established Order

No one comprehends the world in which he is immersed. Consider it a given starting point. There are ways to bring up a child capable of a far better understanding of his surroundings, but the established order has a vested interest in keeping things the way they are.

In Australia, scientists are working on a "thinking cap" which boosts creativity. They are at a very primitive stage, as of yet. But Allan Snyder, director of the University of Sydney's Centre for the Mind, thinks he is making progress.

Another interesting Australian innovation which may lead to improved thinking and brain development, is "Mathletics." Mathletics gives learning power to families and students themselves, leaving massive and extortionate educational systems with fewer justifications for their existence.

Scientists are learning more about how the brain is connected in networks. We are learning how young brains develop and prune themselves to become more efficient over time.

We are also becoming more interventionist when things go wrong. Brain implants are becoming smaller, more sophisticated, and more biocompatible. We are seeing a cyborg future, for many.

As we learn to grow more powerful, more imaginative, and clearer thinking brains, the massive infrastructure of inter-locking institutions grows at risk. Justification for the ruinously expensive system of institutions underlying modern societies is already vanishingly weak. As humans grow smarter and less tolerant of institutional bullshit from the power structure, a revolution will be brewing.

Big Money in Climate Change: Who Gives, Who Gets

The amount of money being spent on climate change research this year is astounding. I urge you to read the document yourself. Here is the question to take away: what are we getting for the billions of dollars we've spent? When 2011 is over will we look back at the published research and be satisfied with how our billions have been spent? This type of spending has occurred for some time, and what do we have to show for it? Multiple federal agencies having multi-hundred million dollar budgets in the same (controversial) field is wasteful. Let's make sure 2011 is the last year these budgets increase. _ClimateQuotes_via_TomNelson

Tom Nelson from ClimateQuotes
Climate Change is a big money complex. The US government alone spends roughly $4 billion a year to finance climate research and initiatives. That level of spending leaves all private US entities in the dust by a factor of roughly 1,000. In North America, the US federal government controls climate change spending.

The big winner in the climate change money train is the National Science Foundation. They are requesting $1.616 billion dollars. They want $766 million dollars for the Science, Engineering and Education for Sustainability Program. This is a 15.9% increase from their last budget. They also need another $370 million for the US Global Change Research Program (USGCRP) an increase of 16%. The say they also need another $480 million for Atmospheric Sciences an increase of 8.1% and Earth Sciences up 8.7%. Oh, and not to be left out we need $955 million for the Geosciences Directorate, an increase of 7.4%. That’s a mighty hefty sum of money to dig into if you’re doing climate change research. _EnergyTribune

A 15.9% increase from last year's budget? They must have found some very, very urgent issues that need their attention. Certainly things are getting desperate for the NSF to be requesting so much more money to study this issue -- right in the middle of a long-term economic downturn?

The second largest request for money in 2011 comes from the Department of Energy. They say they need $627 million dollars for things like funding for renewable energy. The request represents a whopping 37% increase from last year! They want a 12% increase for energy efficiency programs. They want to eliminate $2.7 billion dollars of subsidies for industries that emit large amounts of carbon dioxide. A 37% increase? I thought we were broke. _ET

OMG! A 37% increase for the DOE for climate change related programs. Certainly we are on the razor's edge, one whisker's breadth from total oblivion?

For 2011 NASA wants $438 million dollars to study climate change, an increase of 14%. NASA’s total Earth Sciences budget request is actually $1.8 billion dollars. Some $809 million of that is for satellites, some of which are specifically put in orbit to study climate change. It is difficult to separate out which ones are for climate monitoring and which ones are not so I won’t include this number in the over all climate change money train, but make no mistake about it, a significant percentage of the $809 million is exclusively for climate change satellites. _ET

NASA doesn't have the time for space exploration, now that climate change is so much better at ripping budget funds out of tight fisted congresspersons. No, NASA is all climate change, all the time, now.

The National Oceanic and Atmospheric Administration is looking for $437 million dollars for climate research. This is an increase of 21.4% from the previous budget. This includes funds for regional and national assessments of climate change including ocean acidification. Once again, another meaty bag of money to tap into for researchers who have nice cars and big houses and need to keep up the payments. All aboard the money train!

The Department of the Interior (DOI) is also interested in tapping into the climate change vault. They say they need $244 million in 2011. Of this total, $171 million is for the Climate Change Adaptation Initiative. This program identifies areas and species that are most vulnerable to climate change and implements coping strategies. Another $73 million is needed for The New Energy Frontier Initiative. The goal of this program is to increase solar, wind and geothermal energy capacity. Interesting that solar and wind power don’t actually make any money without this government funding.

Wow! This list just goes on and on, no wonder we have a $14 trillion dollar deficit!

But wait! as the say on TV there’s more. The Environmental Protection Agency (EPA) wants there share of the pot of gold. They need $169 million to reduce greenhouse gas emissions, an increase of 1%. Do you really believe that next year greenhouse gases will be reduced by EPA spending $169 million dollars? I would bet the ranch that greenhouse gases will continue to increase next year and the year after that and the year after that despite EPA spending millions of dollars. It’s a complete waste of $169 million dollars.

I’m beginning to wonder if there is any government agency that does not get some climate change funding! The United States Department of Agriculture (USDA) wants $338 million dollars for climate change programs. They want $159 million dollars for climate change research, up a whopping 42%. They also want another $179 million for renewable energy, an increase of 41%! The USDA’s climate change efforts are supposed to help farmer and land owners adapt to the impacts of climate change. _ET

The popular message we get from the idiots in the media and the echo chorus of circular jerkulars, is that big oil and big coal is funding a vast network of climate change deniers. The reality is that institutions such as the US government outspend more neutral and anti-catastrophe entities by about 1,000 to 1.

Smart people tend to be skeptical people. But virtually the full weight of government, journalism, academia, and the entertainment media is pushing the public to accept uncritically the orthodox dogma of anthropogenic climate catastrophe. From the first grade of school -- if not earlier -- children are indoctrinated into the cult of carbon hysteria by their teachers, as if the fate of the world depended on the little tykes adopting a boundless attitude of carbon hysteria. And from there it only gets worse. Paid for by your government, of course, which means you.

Ever since ClimateGate, more smart people have peeled off from the mass of unthinking drones. But the government-financed, media amplified message of catastrophe continues to blare at full volume over virtually every media outlet.

And the energy starvation! The suffocating regulations, prohibitions, taxes, and penalties! The choking off of new business and new sources of employment! It continues to get worse -- all financed from the top.

The people receiving these big money budgets and grants understand that everything depends upon their continued findings of "climate catastrophe." Anyone who falls off-message will be cut off, demonised, and left for dead -- figuratively speaking.

Washington DC is increasingly the place to be if you want to prosper in the US -- at least now, in the days of Obama. DC is the chokepoint, literally.

Now the race is on, between the ability of Americans to comprehend the enormous suicidal scam being pulled, and the ongoing processes which are turning the US into an Idiocracy. Precautions may be called for. Hope for the best, prepare for the worst.

Source

Climate Change in the FY 2011 Budget (PDF)

How Much Crap Will Americans Take from Their Governments?

Before the US could become an independent country, it had to fight a bloody revolution in order to force Britain to release its claim on the colonies. The US experienced its ups and downs, over the centuries, but other than a brief civil war its people have remained relatively loyal to the crown government. But things do tend to change over time, and we may soon see just how far royalty-imitating US governments can push their subjects before the people decide to rebel.

Many members of the ruling classes suffer under the delusion that "The Tea Party Movement" is as bad as rebellions in the US are likely to get. Consequently these pseudo-intellectual twits tend to direct their most concentrated bile against people such as Sarah Palin or Sharron Angle. These complacent fools have a lot to learn, and a long way to fall.

The US federal government is spending its way into oblivion -- but the US government can have new money printed to make up its deficits. US states, cities, and counties, are likewise spending themselves into perdition, but they cannot print their own money. Consequently, they must issue bonds and otherwise borrow money to operate. But as these local governments continue to spend beyond their means, eventually even bond investors begin to wise up. Their bonds lose value, and such governments must pay more to borrow more.

When governments reach the end of their ability to borrow, they will be forced to cut services and other obligations. But even cutting services and all obligations except for public sector union contracts will not save the cities, states, and counties. These profligate spenders are going to have to do the unthinkable -- declare bankruptcy and slash their union contracts to the bare bones.

Even that will not be enough. They will have to go back on their word to workers and retirees, and in many cases dump public sector union contracts altogether -- and make public sector unions illegal for many occupations such as police and fire.

The unions will not sit still for this, in fact they will become even more violent than we are accustomed to seeing them become. In addition, when police and fire departments go on strike, let the public beware. Many cities, counties, and states have already begun cutting back on essential services, so when law enforcement and fire departments go on strike, a lot of people may not notice very much difference.

The Pew Center on the States estimates $1 trillion of underfunding for the pensions and health benefits of states.

Economists Robert Novy-Marx of the University of Rochester and Joshua Rauh of Northwestern University have higher totals for pensions alone; their gaps are about $3 trillion for states and almost $600 billion for localities.

Underfunded health benefits for states and localities together are reckoned by different studies between $500 billion and $1.5 trillion, report economists Robert Clark and Melinda Morrill of North Carolina State University.

Whatever the ultimate costs, they threaten future levels of public services. The generous benefits encourage workers to retire in their late 50s or early 60s after 25 years of service. The health benefits typically provide coverage until retirees qualify for Medicare at 65.

To pay for unfunded benefits, either government services must be cut or taxes must be raised. _Samuelson

Here is the public union problem in a nutshell: Union members lobby vociferously for untenable wages and benefit packages. Greedy politicians willing to accept bribes to get reelected, go along. On any threat of reduction in benefits, union organizers get out the vote with massive fear-mongering campaigns promising ruin if they do not get what they want. At election time unions donate massively to candidates willing to back union sponsored agenda. Over time, school boards, city halls, and legislative bodies in general get packed with politicians accepting bribes (campaign contributions) from the unions. _Mish

Like homeowners, states and cities splurged on debt and found inventive ways to get around borrowing limits to finance projects they couldn’t pay for otherwise. And recently the federal government encouraged investors to pour their money into the coffers of these less-than-creditworthy borrowers.

Now some of those investors, like the few lonely mortgage-industry short sellers in 2005–06, have started betting against the borrowers. Time reports that some of them “are jumping into the credit default swap market to bet against cities, towns and states.” A CDS is an insurance contract that protects a bond holder against default. But there’s a difference: You don’t necessarily have to be exposed to the underlying bond to buy a CDS. They can be bought or sold, and are priced depending on the market’s perception of bond default probability. If the risk increases, it is likely that the demand for CDSs will too, leading to an increase in their price. Brian Fraser, a partner at the law firm Richards Kibbe & Orbe LLP, told Time, “The spreads on CDSs have been growing, and the dollar amount of CDSs on municipals has grown in the last year. That’s a clear warning sign that people are effectively starting to short the muni market.”

The state and municipal debt crisis could culminate in a request for the third near-trillion-dollar bailout of the last two years. That much federal borrowing on top of the current debt could very quickly have an impact on interest rates and on the dollar. And at that point, we can just forget about the recovery. _ReasonMag

The last quote above suggests that once the repercussions from state and municipal defaults and overspending percolate through the federal government bailout process, we can forget about any economic recovery.

But that is just the author's optimism speaking. In reality what you can forget about is any kind of domestic harmony between government worker and taxpaying citizen.

What should you expect, ultimately? When all of the money-grubbing corruption at the state, municipal, and federal levels impacts the total economy and sinks through the thick skulls of the average citizen, producer, employer, and investor, there will be more anger and hostility within the citizenry than can be contained by traditional and legal means.

Anticipating this, the federal government and many states have tried for several decades to strip US citizens of their US Constitutional Bill of Rights 2nd Amendment right to own firearms equivalent to weapons used by average soldiers in the national infantry. Since most Americans do not own or practise with firearms regularly, the reaction against such rights-limiting moves have been only sporadic and limited. But some people have been paying attention.

Americans tend to think in narratives -- stories -- so the stories that are passed from parents to children and from peer to peer are significant, in terms of how Americans will act in the public sphere. The more oppressive and "lordly" governments and government employees tend to act toward ordinary citizens, the more often stories such as "Unintended Consequences", "Let Us Prey," and the long list of similar narratives will be passed from person to person.

Such ideas will not likely captivate the majority of Americans' minds, but compared to the number of Americans who sit at the controls of the corrupt governmental enterprises, the number of persons who become indignant at the growing tyrrany of the ruling classes is likely to be significant.

The problems of debt and corruption are not unique to American states, municipalities, or federal governments. Governments in Europe are facing the same problems -- with the added problem of a growing underclass of third world Muslims who are apt to generate bloody uprisings of their own.

The bond markets do not look good in the intermediate term, as all of this excrement contacts the rotating fan blades. The economic picture in general does not look good, which means that demand for economic goods such as commodities -- other than food -- does not look good.

How all of that will play out on the international stage -- who will be tempted to launch a war against whom, and so on -- must be left to your imaginations.

In the opinions of Al Fin economists and sociologists, it is public sector unions and their political partners in the US and other nations in the west who will bear a huge amount of blame for the economic brittleness and lack of flexibility which may ultimately (over decades) lead to governmental collapses across Europe and the Anglosphere. These public sector unions artificially inflate the sizes of governmental agencies to enhance their own power and income -- and prevent all governments and their agencies from downsizing during the inevitable, cyclic economic downturns which occur in any economic system.

As the next economic downturn develops long before we recover from the current one, the underlying dysfunctionality of politically correct, non-assimilated multiculturalism will manifest themselves in a very unpleasant manner.

You must know that those who are forewarned will more likely ride out the storm to reach the other side safely.

How Government Regulation and Bureaucracy Invigorates the Private Sector and Creates New Jobs and Prosperity

After watching the video carefully, one can no longer deny the benefits of the massive new bureaucracy and regulation being installed under the 2 year Obama Pelosi reign of error. Mr. Obama's love for government control over the economy, and his antipathy to constitutional freedoms, have arrived in time to save the day.

Be thankful, Americans, for the wisdom of your ruling class.

H/T Instapundit

Who Will Save the Drowning Man?

InkityAnd just who is the drowning man? Is it the US, sinking rapidly into a deepening debt quagmire? Or is it Europe, with its naughty little PIIGS flirting on the edge of permanent insolvency, threatening to pull the rest of the EU down with them?

Ambrose Evans-Pritchard calls Europe's economic situation a "horrible truth."

This NYTimes article suggests that a European debt crisis might spread like a contagion, with dire consequences.

Here is a comparison of the US government's financial situation with that of some European countries:

The French government's revenue stood at an unbelievable 48% of GDP and Greece consumed a little less, but still a high percentage at 37%. By comparison, the U.S. Revenue/GDP ratio was a miniscule 15%, although we still feel that government taxes are too high and wasteful practices don't seem to end. What does that mean? Despite the negative economic impact, the U.S. government can raise taxes and increase revenue, while the European Union has virtually no room to maneuver.

Add austerity plans and public sector jobs cuts like we've seen in the U.K. (a reduction of 500,000 government jobs), and one will wonder how the bills will be paid on the Eastern side of the Atlantic. As 2011 approaches, the spending cuts will start to affect — and infect — the European economic engine. The bloated public sector that was created over the last 50 years cannot be undone in 2 or 3 years without major restructuring and disruption — and that task will take a generation to "correct." _SeekingAlpha

The NYTimes recently provided a nifty interactive puzzle, which allows each reader to attempt to balance the US Federal budget for both 2015 and 2030, using a combination of spending cuts and tax increases. The puzzle lacked the most important ingredient for achieving fiscal health -- the ability to eliminate harmful regulations which are preventing the private sector from growing and thriving. The NYTimes editors likewise neglected to offer the reader the ability to eliminate public sector unions. In addition, the NYTimes feature did not provide the power to institute strong tort reforms -- except in a very modest way for medical malpractise.

I balanced the budget with a combination of 88% spending cuts and 12% tax increases. But what I really wanted to do was to cut the size of government by 50%, as an appetizer. After that preliminary cut, I would begin looking at the tough choices for downsizing government.

A sane existence will involve a certain amount of pain and risk. It is the heedless avoidance of all pain and risk that leads to total extinction.

So, who is the drowning man?

Jobs are Scarce Unless You Know Where to Look

FreakingNews

Since Obama Pelosi was put in place, millions of Americans have lost their jobs. The private sector is shriveling before our eyes. Obama has been particularly hard on construction, manufacturing, business startups, the financial sector, the energy sector, and any part of the economy not dominated by labour unions, environmental lobbies, or trial lawyers. The outlook under the current regime continues to be bleak into the indefinite future.

Vanishing of jobs will plague the rest of this decade and more. Meaningful employment is no longer guaranteed to dutiful, studious members of the middle class in the Western world. College education, which was hugely expanded after World War II and sold as a basic right, is doing a poor job of preparing young people for life outside of a narrow band of the professional class. _Chronicle

Government is hiring. And if you want to pick and choose for the best federal jobs, insiders put the US Nuclear Regulatory Commission at the top of the list.

Ordinarily, the government doesn't create wealth, but can certainly regulate those who do. The Obama Pelosi regime has decided to go against tradition, and try to grow wealth by hiring as many government regulators as possible.

So if you can find the right government job, you should be set for life, right? Well, no. You should have thought of that 30 years ago, so that you could be retiring to a life of ease in your early to middle 50s -- with a yearly income that might make many retired millionaires envious.

No, if you are just now getting into government work, you'd better be prepared for some very rude awakenings over the next decade or two. Today's private sector is not what it used to be. There is only so much flogging and ravaging that it can take from an overgrown government sector and overblown government pensions, benefits and mandated entitlements, taxes, and regulations. Things fall apart. Expect it, and prepare for it.

Most Fatal Addiction for Society? Addiction to Government

In a totalitarian society, all social functions are performed by government agencies and bureaucracies. Individual initiative and entrepreneurship do not exist -- there is no place for independent thought or action under totalitarian regimes. So what happens when totalitarian countries go cold turkey, and dump their dictatorships and replace them with choice? Most of the formerly totalitarian countries shrink rapidly -- perhaps eventually to nothing. Like a drug addict who does not know what to do without his drug.

America was once rich in independent thought and action, prosperous in entrepreneurship and economic activity. But as government has taken over progressively more of the functions of society, independent initiative inevitably atrophies and dies.

A direct result of increasing dependence on government is that the self-reliance that was such a fundamental aspect of the American culture for generations has been eroding. And that value of self-reliance was a major driver of our entrepreneurial nature as Americans. _CSM

People who make their lives in government are not likely to understand what drives entrepreneurial activity. So they are unlikely to institute policies which encourage the economic activity which is the lifeblood of a prosperous nation.

Contrary to President Obama's view, the crucial factor for improving life in every society has been private enterprise, individuals who seek to uplift their lives and those of others. Entrepreneurship is neither created nor nurtured by government, nor reserved to the privileged; it springs from individuals and can be found even in the poorest communities in countries worldwide. _IBD

One of the most recent examples of government destruction of the private sector and private enterprise is the Dodd-Frank Act, which was hailed by Obama Pelosi as the salvation of the US economy.

...the worst thing about the CFPB is not the costs it will impose on the economy, the innovation it will stifle, or the small businesses it will eliminate. The worst thing about this agency is that it will operate independently, without any control by the Fed, Congress, or the president....Moreover, all this power is concentrated in a single person, the director of the CFPB. Even the Fed, with all its independence, is ultimately governed by a board with a bipartisan membership. The establishment of an agency with this scope of authority, under the direction of a single person removable only for cause, outside the control of Congress or the president, is an unprecedented and--I might say--an irresponsible act, which Congress will eventually come to regret. _AEI

A fatal flaw in the legislation, certainly. But only one of many fatal flaws contained within the Dodd-Frank Act -- and the Dodd-Frank Act is only one of many fatally flawed acts of recent government, which strip the private sector of independence and make every economic enterprise from top to bottom hopelessly dependent upon government agency and caprice.

You should be able to understand why the hard times are only beginning for the US, and the parts of the world that have been dependent upon the US in some way or another -- which is almost the entire world. Any thoughts you may have had about a "return to normal", or any type of normal economic recovery should be flushed down the pipes by reality.

Hope for the best. Prepare for the worst.

Big Government, Big Education, Big Unemployment, No Skills

Modern westerners have grown complacent and sheep-like in the face of governments that have inserted themselves into every aspect of their lives. This "government-uber-alles" is not working out well.

Consider the shortage of "skilled workers":

Workers with specialized skills like electricians, carpenters and welders are in critically short supply in many large economies, a shortfall that marks another obstacle to the global economic recovery, a research paper by Manpower Inc (NYSE:MAN - News) concludes.

"It becomes a real choke-point in future economic growth," Manpower Chief Executive Jeff Joerres said. "We believe strongly this is really an issue in the labor market." _finance.yahoo

Governmental emphasis on college attendance may be turning universities into huge, opulent drop-out factories. Trying to force everyone into college -- whether suited for higher education or not -- is a good recipe for destroying young lives by teaching them to think of themselves as failures.

Meanwhile, university administrations have become bloated with bureaucrats and functionaries, driving the costs of higher education inexorably upward.

...the Obama Administration’s priorities is to funnel more money into higher education–which will reinforce exactly the sorts of pressures that Greene highlights. Higher education almost perfectly converts subsidies (whether direct or aid to students) into higher prices. With no real reason to expect that those subsidies will be used to promote better substantive outputs instead of internal agency costs. _Volokh

Businesses are reluctant to hire new employees in a highly uncertain economic climate. Meanwhile, tenured and unionised government workers -- such as teachers -- are becoming the new privileged classes, relentlessly sucking the blood out of a shriveling private sector which is headed toward critical care life support.

Image Source

Government defaults are inevitable, in large part due to ballooning pensions, wages, and benefits to unionised government workers.

Under Obama - Pelosi, US governments are doing everything wrong from top to bottom. Sucking the productive and taxpaying segment of the country dry, the O-P regime is laying the groundwork for perpetual economic shortages for the indefinite future (example).

When governments insert themselves into every activity of every productive member of their society, inefficiencies and disruptions in the economy abound. When the voting public cannot tell the difference between politicians who will only dig the statist hole more deeply, and those who aim to take government controls away from the greater parts of society where government was never meant to be involved -- at that point society becomes an Idiocracy.

More: Here is a fascinating glimpse of the nature of government as it is evolving under Obama Pelosi