North Korean Cyberattack Topples Numerous Sites

Quick note which I would have sent to you earlier--except that I couldn't get through to Blogger.

In case some of you didn't notice, portions of the Internet were a disaster today through roughly 1:30 PM EDT by my reckoning. Specifically, I myself had a hell of a time accessing any kind of software that provided stock market quotes. And my Internet broker was absolutely unavailable from about 10:30 AM EDT until roughly 1:30 PM.

The likely cause: an ongoing cyberattack, more than likely from our close friends in North Korea and/or their fellow travelers in South Korea. A massive, bot-driven attack, the network carnage started--surprise--on the 4th of July holiday weekend in South Korea, overwhelming several South Korean government sites and eventually attacking over here, including the Pentagon, the White House, NSA, and, surprise, Homeland Security, portions of whose site were disabled as late as this afternoon. (I checked.) They also went after banks and the NYSE with varying degrees of success.

My friends on the left will say, oh, you have no proof. The hell I don't. According to numerous government sources, this ain't the first time these 5-star agressors have done this stuff. And just because you don't have an immediate smoking gun is no reason not to gear up to go after these criminals in some way, shape, or form.

But to be honest, the worst perps in this were the increasingly disgusting and uselesss MSM. I only became aware of this ongoing, rolling attack this morning when, after being unable to trade not long after the market open, I lost several thousand dollars because I couldn't hedge a few of my positions. If I'd known what was going on, I might not have put on the positions to begin with.

But the MSM, enmeshed in wall-to-wall suckup coverage of Michael Jackson (ratings, anyone?) never bothered to tell me or anyone else what had already been discovered in some quarters. And it took me quite a few web searches this morning to track down the likely difficulty.

The press loves to extol its virtues as our savior and protector against the Predators who run the Republican Party. But if they'd been doing our job, most of us would have known about this major cyberattack as early as Friday night or Saturday morning of last week--and we might have been able to act accordingly.

But no. The MSM--which of course, de facto, is better than you and me--spent nearly the entire weekend of valuable airtime with nonstop coverage of someone who, for all his obvious talent and weirdness--will never hold a candle to the heart surgeon in your local hospital.

Furthermore, aside from an anonymous dispatch or two from AP--never seemingly picked up by anyone--we all remained in the dark as our government sustained a massive cyberattack which today moved to damage the already damaged retirement portfolios of folks like you and me.

Small wonder these clowns are on their way out. They've turned into reliable media shills who trumpet the latest crap from New York and Hollywood. That's why the rest of us have to rely on the web and the blogosphere for our information. When the Dear Leader isn't taking it down, anyway.

Leave the Dollar Out of Trade? India Joins Japan and China

Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said in a July 3 interview that he is urging his nation to diversify its foreign holdings away from the dollar.
The challenge to the dollar, a linchpin of world finance and trade since 1945, underlines the shift in relative economic power toward emerging markets and away from the developed nations that spawned the global crisis...Russia, India Question Dollar Reliance..., Mark Deen & Simon Kennedy, Bloomberg News, July 6, 2009

A major diplomatic effort from the State Department in the last ten years was to turn India away from China and Russia, regarded as a huge and peaceful success story. One of the consequences of the first five and a half months of the new administration's fiscal policies may undo a decade's hard work and turn India's perception of, and relationship to, the United States upside down.

A classic blunder for an inexperienced administration is to be blind to context, to fail to see the overall effect of a given policy action. It's also a standard tactic of the Left to disregard the consequences of their actions, a perfect match between ideology and a White House proceeding with almost breathtaking ignorance abroad. When all that matters is power, who cares if it wrecks international initiatives? In this instance, however, the international initiative was to help counter the rising probability that Pakistan will turn into an outpost of Islamic fascism. India wanted this relationship too, maybe even more for self-protection, but if it can't afford it and has to turn north again, you'll know who to thank. A lesson the White House needs to learn is that in international politics, economic well-being comes before security issues. People can't fight if they haven't eaten.

Luther

Cooling New York

Here are the top ten coolest and wettest
junes on record since 1869 for central park ny:

coolest wettest
avg. temp. year inches precip. year
64.2 1903 10.27 2003
65.2 1881 10.06 2009
65.7 1916 9.78 1903
66.8 1926/1902 9.30 1972
67.2 1958 8.79 1989
67.3 1927 8.55 2006
67.4 1928 7.76 1887
67.5 2009/1897 7.58 1975
67.7 1878 7.13 1938
67.8 1924 7.05 1871

Interesting facts to note:

This june is tied for the 8th coolest on record. The average
temperature was 67.5...3.7 degrees below normal...which also
occurred in 1897.Public Information Statement, National Oceanic and Atmospheric Administration, July 6, 2009

It is unlikely that the Anthropogenic Climate Change disciples of NASA wack job James Hansen and Anti-Development-Pope Al Gore will quote that statement from the NOAA. The writer lives in New York, and it has been cool spring and summer. We have had one day of 90, and that was in April. Usually, by this time of the year, we've had dozens of days in the high 80s and 90s, with some occasionally in the 100s. Of course, what's the matter of actual evidence compared to the beauty of an all-encompassing theory?

Wait! Isn't that what Intelligent Design people say?

And here we thought the White House was bringing “science” back into the poltical debate. It was religion all along!

Luther

England is NoticingOur Debt Too

The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank.. Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current 3.5%...The impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a “debt explosion”. Mr Laubach’s study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case. ..US Lurching Toward Long-Term 'Debt Explosion'...,Philip Aldrick, Banking Editor, UK Telegraph, July 6, 2009

Even before the debt explosion overwhelms rational markets, the super-deficit funding of Federal programs like health care “reform”, bailouts, and cap-and-cronyism will steal a huge proportion of investment capital from the private sector, and make what's left prohibitively expensive for US private firms to recover, never mind expand. Why the Democrats are doing this may be a question whose answer has a graver consequence than a debt explosion.

The chief political objective of socialism, wherever it has been tried, is for the state to totally dominate the economy regardless of the impact this might have on the nation and its people. In France, for example, decades of socialism has led to decades of double-digit unemployment and to a crass neglect of the old and disabled (see prior post on "real debate on medical care") that is appalling.

Women in the workforce might take notice of this as well. As wonderful as socialized medicine and other liberal programs may sound for working women,especially those with children, it is worth noting that the dramatic expansion of the U.S. economy from 1983 onwards formed the primary support for the expansion of jobs. Without that expansion, the explosive new opportunities for women might never have happened. When the state dominates in a socialist program, it is not very supportive of revolutionary changes. Indeed, socialism may be said to be a kind of pathological conservatism, where nothing changes except your range of movement and your freedom of expression. This may be why the Left is so fond of Islamic fascism. And, thanks to Phyllis Chesler and other students of that political pathology, we know what that group thinks of women.

Luther

California Budget Bust: The Nightmare Scenario for Democrats?

With California mired in a budget crisis,...a political impasse that makes spending cuts and tax increases impossible, Controller John Chiang said the state planned to issue $3.3 billion in IOU’s in July alone. Instead of cash, those who do business with California will get slips of paper...The California morass has Democrats in Washington trembling...If Obama’s health-care plan passes, then we may well end up paying for it with federal slips of paper worth less than California’s...The publicity surrounding the California debt fiasco almost assures his resounding defeat...It takes years and years to make a mess as terrible as the California debacle, but the recipe is simple. All that you need is two political parties that are always willing to offer easy government solutions for every need of the voters, but never willing to make the tough decisions necessary to finance the government largess that results...California has engaged in an orgy of spending, but, compared with our federal government, its legislators should feel chaste. The California deficit this year is now north of $26 billion. The U.S. federal deficit will be, according to the latest numbers, almost 70 times larger...Kevin Hassett, Bloomberg News, July 6, 2009

Is Hassett's doomsday view wishful thinking? If you've watched California over the last decade, a sequence of legislatures and governors suggests that Hassett is wrong, that, at least in the life-is-a-beach state, there is no longer any check on out-of-balance accounts. Indeed, detailed examination suggests that the legislature's in-house political encyclopedia doesn't include the phrases fiscal responsibility, balanced budget, or rational planning. A Federal bailout is more likely, I think, with the White House encouraging the Fed to simply buy the bonds issued to pay taxes that Californians showed in their votes on a recent public initiative that they are unwilling to bear. And bailout is what the one-party government in Washington views as the basic solution to all our problems. The doom, it seems, will be for you and me, as we see a dollar shrink in value as our taxes (and tax-related prices – see cap-and-cronyism) go up.

However, look at what's happening. If the White House and Congress decide to monetize the debt (print the money), whether for their ill-considered programs, or for federal debt, some previously happy consumers of American government bonds may decide that it's not worth the trouble. While China is still buying, signs are good that Japan and other major creditors are slowing their purchases down. If the Feds can't sell American bonds overseas, and domestic investors think the rate of return is worthless, that will put grave inflationary pressure on the dollar.

In the 1970s, when a similar policy was used to pick up the tab left behind by Johnson and the “veto-proof” majorities of Democrats in Congress for the Vietnam War and the Great Society, the cost, in a shrinking dollar and higher taxes, was borne mostly by Americans. As expensive as those bills were to pay, in terms of lost value to the dollar, they were modest compared to what irresponsible governments are expecting bondholders to absorb this time, whether the governments of New York, California, or that in Washington, DC. Explosive inflation, 10, 20, 30 percent a year, is political dynamite. Even 12% during Carter's Presidency overturned the government, bringing Reagan and a rightist thirty-year domination of politics. That carried us through the wealthiest era in American history, a good thing, but such a result is hardly guaranteed. You could look it up in histories of Germany and Argentina.

As such, Republicans shouldn't act like Democrats, and pray for an inflation disaster, because inflation after a certain level favors no party. When inflation in Germany exploded, it brought a fascist government that nearly wrecked the civilized world. When inflation in Argentina exploded in the 1950s, it brought a fascist dictator to power. Dictators are no better for business than the socialists. Argentina has never recovered from Peron.

Luther

Health Care Democrat-Style: No Reform At All? Samuelson

Uncontrolled health spending is almost single-handedly determining national priorities. It's reducing discretionary income, raising taxes, widening budget deficits and squeezing other government programs. Worse, much medical spending is wasted...It doesn't improve Americans' health...The Obama administration's response is to talk endlessly about restraining health spending...The president summoned the heads of major health-care groups representing doctors, hospitals, drug companies and medical device firms...All pledged to bend the curve...Does anyone believe the American Medical Association can control the nation's 800,000 doctors or that the American Hospital Association can command the 5,700 hospitals?...The central cause of runaway health spending is clear. Hospitals and doctors are paid mostly on a fee-for-service basis and reimbursed by insurance, either private or governmental. The open-ended payment system encourages doctors and hospitals to provide more services -- and patients to expect them. It also favors new medical technologies, which are made profitable by heavy use. Unfortunately, what pleases providers and patients individually hurts the nation as a whole....Wrong Way on Health Care 'Reform', Robert Samuelson, Washington Post, July 6, 2009

What's interesting about economist Samuelson's view is that it reflects some private opinions by the President, that a good model would be the Mayo Clinic, which does not operate on the fee-for-service plan. Everybody at Mayo, including all of the doctors, is an employee. Malpractice insurance is held by a group instead of by an individual. There's no motivation to go the unnecessary, unneeded, or inappropriate mile in surgery or treatment to improve one's bank account.

One thing is clear, not only from Samuelson's article, but from hundreds of studies, essays, and reports on the Democrat plan to pick up the tab for the “uninsured.” The uninsured already get health care; it's subsidized by patients with insurance, and by physician and hospital write-offs. The Democrat plan will raise the cost for providing care to this group, a third of which is made up of illegal immigrants, to far higher than we're already paying now. What this looks like is another variety of cronyism, or of rent-seeking for Democrat constituents.

Luther

Obama's Love Affair with Dictators

How strange that our rather nondescript, sober friends abroad do not garner attention from the current administration, yet overt enemies in Cuba, Nicaragua, Iran, Venezuela, and the West Bank most certainly do. Is there some covert code of conduct known to these dictators that allows them to win a pass from supposedly liberal Americans, who profess to value human rights, religious tolerance, and consensual government?...A Thug's Primer, Victor Davis Hanson, National Review Online, July 6, 2007

You might want to read Hanson's darkly funny primer for dictators. Being angry about the White House pampering of tyrants is a good motivation, especially as we get close to the 2010 Congressional elections, but a dose of satirical humor may ease the pain.

Luther

GM & Chrysler Sales Drops: Conservatively Political Car Buying?

"Government Motors" is driving Americans away...There is a groundswell of disdain for the federal bailouts of General Motors and Chrysler, even as polls show that a growing "Buy American" sentiment is boosting sales for the only Detroit automaker that avoided bankruptcy and federal rescue – Ford...Conservatives thunder that the country has taken a socialist route with President Obama at the wheel..."I won't buy a socialist car," columnist and radio talk-show host Hugh Hewitt thundered last month..."Over the years, we have mostly been a General Motors family. Since GM has become Government Motors, we will never again buy a GM product," said William Crowley of Spicewood, Texas....GM, Chrysler Sales Suffer after Bailout, William Ehart, Washington Times, 7/6/2009

There are other political reasons to be wary of GM and Chrysler. Both management and the UAW know that at these two automakers, politics means more than quality. The bailouts, which illegally trashed first tier creditors in favor of the UAW, were unabashed political payoffs. It's basic math. The UAW contributed many millions to the Democrats, perhaps as much as $40 million, during the 2008 Presidential and Congressional campaigns. They get a huge part of the ownership of two car companies in return. The all-Democrat government has “invested” a hundred billion dollars in these two losers. Who knows if best what the government will do if things don't work out? What if it takes another hundred billion? Two hundred?

If you buy a GM or Chrysler car, in other words, you'll pay for it twice: purchase; and taxes for the bailouts. Even those who buy Fords are helping to pay for Chevies and Dodges. Socialism and its grim sister, crony capitalism, always costs more than they generate. Fred Barnes at Weekly Standard agrees.

Delphi, the auto parts manufacturer once owned by GM and still its biggest supplier, has been in bankruptcy for four years. To acquire its assets and run the company, Delphi and Obama's Auto Task Force picked an affiliate of the private equity firm Platinum Equity. There was no auction or competitive bidding...Why Platinum? The UAW favored it, sources said...There's a name for all this: crony capitalism...usually identified with Third World despots, like Hugo Chávez, who reward their friends and allies in the business and financial communities...the chief characteristic of crony capitalism is favoritism for some companies or organizations (unions, for example)--in loans, grants, giveaways, and specific policies...Obama isn't merely rewarding a few cronies, he's seeking more and more favored groups to reward...through his energy, health care, and other policies, which would boost certain companies and industries over others. Another way is by providing cheap capital, which gives firms an advantage over competitors who must acquire capital at higher interest rates in private markets...The effect of Obama's approach to business has been enormous. In less than six months, he's changed the relationship between the private sector and Washington. Companies increasingly "compete for government favoritism, not for consumer choice or preferences," says Republican representative Paul Ryan of Wisconsin...The Triumph of Crony Capitalism, Fred Barnes, Weekly Standard, July 6, 2009

With the UAW is doing it for the President, not for the consumer, the least likely car this writer would buy would come from Chrysler or General Motors.

Luther

Wonker Reveals Secret Identity

It's Independence Day weekend. What better time for Wonker to reveal at last his secret identity? In reality, I am and have been the freelance/contract writer/journalist known, to Washingtonians at least, as T L Ponick--Terry to my friends.

When Luther and I started this blog, we both felt it critically important to keep our names secret--not out of cowardice but out of common sense. In my case, until recently, I'd been working as a government contractor. Simple discretion dictated that I not inadvertently cause harm to my Federal customers. Luther was (and is) similarly constrained but for completely different reasons.

Since I'm no longer contracting to the Feds, however, there's no longer a reason to keep my own identity secret--which is great, since the blogosphere these days seems to trust real names more than pen names.

My background? Although I have a Ph.D. in American Lit, I opted out of a professorial career years ago and navigated into the private sector rather than risk a decade in the wilderness as a gypsy scholar in search of virtually nonexistent tenure track positions. (A scandal that persists to this day for thousands of young scholars.)

That fateful choice proved interesting indeed--and increasingly lucrative--leading me to multiple career tracks. These included stints as an insurance agent, a stockbroker, a technical writer (hardware and software); and, in a late-inning surprise, two separate gigs as a contractor, writing and editing science policy documentation for a White House sub-agency under two administrations. So when I write about this kind of stuff, I actually do know what I'm talking about.

But wait, there's more. As a sideline, I used to review community theater for smaller newspapers which actually led to a better part-time job at the Washington Times, America's Newspaper for those on the right-side of the aisle. After the departure of their music critic for the San Francisco Chronicle in 1994, I auditioned for his slot, and actually got the job, sort of. In what's now the wave of the future for an increasing number of newspapers, the paper picked me up part-time, not as a staffer.

I'm still there today, writing primarily on classical music in the DC Metro area with occasional pieces on jazz, popular culture, politics and music, and theater when the theater critic is out of town. Recently, the recession has caused some shrinkage in my coverage and column inches of course--just like every other newspaper--almost all of which, I suspect, will wind up exclusively on the Web in the fairly near future.

By now, I've penned literally thousands of words for the Times. If you're curious or don't believe me, just Google the name I gave you above and you'll find plenty of my stuff still linked online.

As for my dayjob luck? That ran out last summer as the economy tanked. But I've been able to re-deploy my investing acumen to keep things together while I look for something else. Or maybe I'll just go into semi-retirement. I've occasionally chronicled my personal economic fun here in this blog, just so you know that your own situation is not hopeless--just as long as the socialists who currently control the government don't screw things up worse than they already have. A big "if," eh?

Anyhow, Happy Independence Day! I'm sure enjoying mine. But on Monday, back to the battlements!

Sarah Palin's Independence Day

It's no big secret now that Alaska Governor Sarah Palin has resigned from office and will leave her position as of the end of this month rather than gear up for a re-election campaign.

This isn't a surprise in a way, even though the media portrays it that way. They've been trashing her nonstop since the day McCain selected her as his running mate in 2008. Her political enemies both within Alaska and within the RINO (Republicans In Name Only) precincts have been jumping on the jampile with disgusting--and completely untrue--allegations about her family. And 15 (yes 15) "investigations" for impropriety have been mounted against her in her own state, with 13 of them by now adjudged unfounded but with two more to go. Never wealthy, her family has by now incurred an estimated $500,000 in legal bills and there's only so much of this crap that a normal human being can take. Which her well-funded opponents are well aware of.

What we've been seeing here, for those who have been watching as opposed to indulging in it, is a 24/7 vilification campaign that makes even the left's trashing of Dick Nixon look like amateur hour. Palin is a fresh political voice who genuinely represents a major political point-of-view in flyover country (read 75% of the America you never see in the media). Dangerous stuff for the tax-and-spend left currently in power. The East and Left Coasties in the media and entertainment business as well as the permanent political classes in New York and DC needed to get rid of her quick before, like Andrew Jackson, she wins the White House and has a bunch of uncouth supporters invading the White House and putting their muddy boots on the expensive chairs. And they've done so. For now.

If you wonder today why good, honest people won't run for office, you have no further to look than to this disgusting treatment. Hugh Hewitt, cited by a guest columnist in his own Townhall blog, sums the whole spectacle up pretty well:

As Hugh said on the air the other day while talking to Jim Geraghty, “everything she is is the antithesis of everything that liberal urban elites are, so it's not just enough to say, 'I disagree with you,'; she has to be repudiated and crushed."

You had a taste of this during the second term of Dick Nixon. The blows rarely landed on Ronald Reagan. (But they landed tellingly on the heads of Judges Bork and Thomas during their hearings.)

The technique Hugh cites was perfected during the Clinton Administration which honed it to a fine art--you didn't merely refute your opponents. You beat them into the gutter and then stomped on them so they could never get up again.

Who knows why Governor Palin is really quitting? Is there a REAL scandal ready to come out of the closet. Some like to think so. But only time will tell. I personally think she's looking for a way to change the rules of the ball game and turn the tables on her critics. At some point. Maybe not now.

They don't call her Sarah Barracuda for nothing.

We wish her the best of luck.

Fireworks Safety Warning Video--Happy Independence Day!

Before it gets pulled from the Web by the PC Thought Police, we thought that this scurrilous but creative Dutch TV spot, urging fireworks safety, might be fun to run on our own 4th of July holiday. The terrorists' names have been expunged to protect the innocent.

Have a happy and safe 4th!

In New Zealand, There's Nothing to Hide

The Great Recesssion has dealt a real body blow to airlines worldwide. But those madcap Kiwis down under sure do have a way to catch your attention during their version of the usual, humdrum pre-flight safety video. Watch carefully now. (Hint: check out the uniforms):

Still stumped? The airline staff (apparently volunteers for the video) are wearing only body paint. If you still don't believe me, watch the fadeaway at the very end of the video.

Who says New Zealanders don't have more fun?

MSM Dumbs Down Some More

Luther and I have railed here again and again at the obtuseness and cluelessness of the media in all fields. Either it's wilful politicization (as in carrying water for Obama 24/7). Or it's simple stupidity in pursuit of a good scare headline.

The following quip is excerpted, via TheStreet.com, from its pay-only site, Real Money:

Bloomberg: "White Sugar Drops in London on U.S. Consumer Confidence Slump."

So much nonsense compressed into such a small space! What, is someone sitting in a London bakery going to forgo a biscuit because of a backward-looking survey in the U.S.? Are Belgian beet-growers going to squeeze more sugar out of their crop because of boo-hooing in Baltimore?

This is typical of the kind of scare headline we see in financials these days, breathless negativity with no backup, a stupid story-line based on nothing whatsoever of substance but meant to sustain a negative mood of fear and loathing.

I miss the old days when raw sugar futures traded in the pits of New York. No stop was safe; put it in, and they were going to get it. But at least they manipulated the market the old-fashioned way, good and honest, and didn't enlist the support of wire-service reporters.

As for the writer's conclusion? We could not have done better:

Hey, there's a non-government organization we can start: Instead of Doctors Without Borders, we could start "Reporters Without Clues." Nominations are being accepted.

Russian Solution to Somalian Pirates: Would Ayn Rand Approve?

A Russian luxury yacht company is offering pirate-hunting cruises off the coast of Somalia...passengers can try their hand at repelling raiders with the help of a squad of former troops...(Not available online, NY Post, Weird but True, 6/25/2009)

This, you have to admit, is an unusual approach to the piracy problem. With state actors evidently unable to stop pirates, except in highly publicized executions and raids, a big Russian yacht with some ex-Red Army guys to train passengers in how to use AK-47s, might be watched closely by shipping companies. shipping company owners might then seriously consider arming crews of their ships instead of expecting the much-reduced Navies of the world to pick up the tab.

Luther

Honduras's Deposed President: A White House Favorite?

Hugo Chávez's coalition-building efforts suffered a setback yesterday when the Honduran military sent its president packing for abusing the nation's constitution...It seems that President Mel Zelaya miscalculated when he tried to emulate the success of his good friend Hugo in reshaping the Honduran Constitution to his liking...But Honduras is not out of the Venezuelan woods yet. Yesterday the Central American country was being pressured to restore the authoritarian Mr. Zelaya by the likes of Fidel Castro, Daniel Ortega, Hillary Clinton and, of course, Hugo himself. The Organization of American States, having ignored Mr. Zelaya's abuses, also wants him back in power. It will be a miracle if Honduran patriots can hold their ground...The Supreme Court ruled his referendum unconstitutional, and it instructed the military not to carry out the logistics of the vote as it normally would do....Honduras Defends Its Democracy, Mary Anastasia O'Grady, The Wall Street Journal, 6/29/2009

Read this article instead of paying serious attention to the cries from the White House, Secretary of State Clinton, Fidel Castro and Hugo Chavez about democracy betrayed. President Zelaya refused to heed a Constitutional restriction on changing Honduras's supreme law, which allows only a constituent assembly to carry out this task. Instead, like a familiar in Washington, he simply decreed that his own way of doing it was correct. The military, under instructions of Honduras's Supreme Court, removed him from office, as they were supposed to do to protect constitutional government.

Lies about a coup d'etat, whether from the State Department or Fidel Castro, really shouldn't be listened to. Nor should lies about any president's right to overturn established law on his own be listened to.

Don't be fooled.

Luther

New Haven Firefighters: What's the Real Lesson of the Court's Decision?

In a major reverse-discrimination case, the Supreme Court on Monday ruled that white New Haven, Conn., firefighters were discriminated against when the city threw out a promotion test because not enough minorities did well on it...The 5-4 ruling overturns an appeals court decision by Judge Sonia Sotomayor, President Obama's nominee to replace retiring Supreme Court Justice David H. Souter.... High Court Rules For Connecticut White Firefighters, Stephen Dinan, Washington Times, 6/29/09

As a decision on a specific case where the Court of Appeals decision had blared a terrible message -- your ethnic background matters more than your competence, the ruling by the Supreme Court was a good reversal of a specific wrong, but did not, as Justice Scalia noted in his supporting vote, address the fundamental, Constitutional issue of equal protection under the law.

But an unspoken question was a lot louder to the writer. Why, in a developed country, and in a city where almost two thirds of the citizens are African-American or other minorities, did the public school system in New Haven fail to deliver graduates capable of studying for and passing the test administered to prospective firefighters?

The writer knows a few educators. On the issue of why minorities fail, or do poorly, in public schools these instructors fall into two categories: those who blame the students and their families; and those who criticize the schools. Those who blame students and families are invariably on the political left. Parents, they say, suffering under economic privation, are unable to provide the benefits of middle class living to their children and, thus, the children don't have the background required. The argument is utterly fatuous, and it's suggestive to note that the same rate of failure, especially for boys, occurs in some school districts in Westchester County. A peculiar similarity emerges. Both the poor district schools and the rich district schools operate under a pedagogy that is alien to most children and to boys in particular.

It would be worth studying the pedagogy used as basis to educate the minority applicants to the New Haven fire department. When you teach students that their life's objectives are to get along and feel good, you're not producing graduates, but smiley-faced workers for Mickey D's.

Luther

Money Pot: Latest Update

Now we're all caught up. So what has the Wonk been doing since his last blog hiatus?

Overview: The economy is, in fact, still not quite recovering, but it has flattened and will stop declining shortly. Housing, which in the end is not really national but local, has, surprise, already begun to rebound in the states that led the housing crash: California, Nevada, Arizona, and a little tiny bit in Florida. The rotation will eventually take in all areas, including New York City (which was actually about the last to decline and which is still declining) but maybe never parts of the Rust Belt, a territory whose economy has nearly been obliterated courtesy of the lazy auto industry and public employees' unions who demand wage increases from unemployed taxpayers.

Since the market is a leading indicator, we enjoyed a nice move up, circa mid-March until about 2 weeks ago when the rally stalled. My guess is for sideways motion to somewhat down, particularly when bad second quarter numbers start showing up in July. But then we'll have some fun again this fall as the market plays a lengthy game of catch up.

Using no particular genius except common sense, I gritted my teeth and stayed about 75% invested in stocks during the horrendous days of late February and early March when I realized that the media--wrong as always--was consistently telling us we were all going to die. The media hysteria rose to such a pitch and to such great unanimity that I decided my favorite leading indicator had bottomed. The press had completely freaked out--which is always a buy signal. So I loaded up the rest of my nearly flatlined portfolio and got a hell of a ride for about the next 10 weeks.

My portfolio has now regained about 70% of its considerable losses during that brief period of time, and I've diversified somewhat into bonds, paring back several positions.

Short answer--I'm somewhat out of the woods now, but need to get that 30% back as soon as I can before I stop hawkeyeing my computer.

More later including a few observations on where the bargains might be today.

The Great Recession of 2007-2010

As promised in the previous post, here's a brief synopsis of our Recessionary adventures thus far.

To recap--many individuals lost their shirts last fall and again this spring when they first failed to pay attention to their investments (mostly in mutual funds via 401(k)s) and then refused to look at the carnage afterwards, as if it were going to go away.

My fiscal disaster was a bit different. Having been laid off by my employer last summer (oddly enough, by mutual agreement more or less), I first got my various retirement funds transferred into my own accounts so I could move the funds around into high-yielding investments whose interest and/or dividends promised to give me enough income to undertake a completely freelance writing career while improving my rental home portfolio.

Well, that plan went in the tank when pretty much everything that I or anyone else owned in the way of stocks and bonds went the way of the dodo in two phases. This is nothing I haven't been through before as a former stockbroker myself in the late 1970s and early 1980s. In fact, I distinctly remember the great Hunt Brothers silver crash which took silver from roughly $55 an ounce down to about $10 or less in what seemed like the twinkling of an eye. Paul Volcker's Fed jawboned Federal authorities who simply raised the margin requirements on silver from 10% to 50%. And the brothers who--similar to speculator Curtis Jadwyn in Frank Norris' excellent and mostly forgotten novel "The Pit" had almost cornered the market on silver--were forced to liquidate on margin call but found no buyers at $55. More like $10. Wipe out. (BTW, it mystifies me why some flavor of this wasn't put into force when speculators drove oil up to an unsustainable $147 a barrel last spring.)

Anyhow, back in March 1980, people went nuts, came in off the street to look at our tape (the old Dean Witter Reynolds, no PCs back then) and babble in terror. I myself stared blankly at my console (a green CRT) watching the plunging numbers as the market squealed in terror. I figured I'd be out on the street corner the next day selling apples. I remember breaking into a cold sweat. You had to be there.

Well, it was mainly the Hunt Brothers who got wiped out, actually. The market not only stabilized. It quietly and almost imperceptively began to morph into what eventually became the great Reagan Bull Market as interest rates peaked in the stratosphere and began to decline. Meanwhile, as Reagan's tax cuts took hold business got juiced as well.

Our current financial megadisaster, however, is different from the silver crash, different even from the brief, terrifying 1987 crash, and different from the short, savage "dot bomb" that first hit in the spring of 1999 (during Clinton, not Bush whom revisionist economists prefer to blame for it). The current meltdown--which I first regarded as "Great Depression II" but have now decided to call "The Great Recession of 2007-2010"--is turning out to be far more systemic than 1999 because it actually involved savaging most Americans who worked for a living. It hit their phantom nest eggs (their homes, which plummeted disastrously in value) as well as their own retirement portfolios. Many will never recover because they don't understand what happened or how to fix their portfolios, courtesy largely of a public education system that teaches people about multiculturalism but ignores the simple mechanics of wealth building.

The reason for the current debacle, the massive housing bubble, was in fact a house of cards that actually began to be built in the early 1970s by Democrats in Congress who slowly turned Fannie Mae and Freddie Mac into a free money pot for unqualified homebuyers who eventually sought the American dream on no money down, no documented income, and interest-only payments. The more unqualified people who were given mortgages they couldn't afford, the more pressure built on house prices. And the higher the prices, the more individuals and lenders panicked either to buy housing at any price or to loan money for them without even the most rudimentary kind of financial vetting.

This was, in short, a Ponzi scheme that only accelerated in the Clinton era. Unfortunately, it blew up on Bush's watch, even though he tried to get some sensible legislation through Congress to throttle this runaway train during his second term. It went down to defeat. The American people were next.

The Great Recession was and is the result, in the end, of the greatest credit binge in history, led by a left-leaning Congress that never really had a clue as to what was in store. And to their discredit, even the Repubs who led Congress from roughly 1994 through 2006 climbed on the train rather than putting the brakes on gently before it was too late.

That's where we are now. Lending standards have now tightened to where it's tough to get credit anymore unless you have a pristine record AND a job--a rare combo these days. And, ominously, Congress is scheming to impose ruinously inflationary and business busting nonsense like nationalized healthcare and cap-and-trade (read Luther in this blog). But I'll rant about some of this later. Our next installment is a brief update on how I personally began to climb out of the current economic mess. You can do it, too.

Wonker's Great Recession Update

Since I've been on one of my customary lengthy hiatuses lately (correct plural of that?), I haven't had a chance to give our millions of readers an update on my slow crawl out of last fall's financial disaster--a disaster I have shared, alas, with an awful lot of my fellow citizens. Particularly aging Boomers who've found their 401(k)s rather handily eviscerated by speculators and so-called market pros.

I'm happy to report better news today and will relay it in the next two posts. First a recap of The Great Recession at this point in time. Next, an update on my improving portfolio. Later today or this week, a little unsolicited advice to our investing fans who must keep in mind that while I was once an actual stockbroker, I'm no longer licensed. So take everything I say with a grain of salt. Or how did Mark Twain say it in "Huckleberry Finn?" Anyone finding a moral in this book will be shot. Or something like that.

Cap and Trade: Dollars and Nonsense

Although PETA's poster girl (below) is more pleasant to look at, let's turn to a graphic that gets back to cap-and-trade, the impending socialist disaster that Luther's been writing eloquently about. Via today's Power Line, we've obtained a map which shows you just how much cap-and-trade will cost taxpayers in each state. Red colors the losers, while green, appropriately, indicates the winners which are, not surprisingly, the states that can never tax you enough.

In typical fashion, we see the true meaning here behind cap-and-trade. The right and left coast state politicians have already taxed their own citizens into oblivion. They now want to extract lots of income from flyover country since they can never have enough money to spend on "our" behalf.

Fellow citizens, you wanted "change." Well, you've got it, and "change" is about all you'll have left in your pockets when your agents of "change" are done. How about waking up and defeating this travesty income redistribution plan in the Senate?

Meanwhile, to critics, yeah, this map is put out by an organization with an axe to grind. Just like everything you put out. In this case, our guys are providing a welcome antidote to your baseless propaganda. Their companies will go out of business and along with them will go tens of thousands of jobs, most of 'em in flyover country. The "jobs" you allege that green technologies will create are largely conjectural. We thought those voters whose jobs will be lost in the meantime would like to know about this "inconvenient truth."

(BTW, click on the image for a larger map.)

The PETA Party Resumes

Back again after a long hiatus, and a huge hat tip to Luther for keeping the truth in the forefront on the key issues of our day.

Taking a break from the developing cap-and-trade disaster for the moment, let's briefly focus, lest we forget, on the malign idiotarians over at PETA, who've now found a new poster girl in Che Guevara's granddaughter.

Check out the clever placement of the carrots in this photo. I wonder if they cried out in terror as they were rudely rooted out of their sleeping places below ground. Shall we call for prosecution against vegetable terrorism here?

Meanwhile, I can preach about the Marxism of front organizations like PETA until the cows come home, so to speak. But leave it to the PETA freaks themselves to prove my point with their new poster girl. Gotta love it.