Category Archives: Business

Business, Economics, Media Criticism, Political Commentary

I Like The Rail Option, Myself

2 Comments

Thoughts on how to pay for Obamacare.

Also, Tigerhawk on taxes:

I’ve clipped some inflammatory excerpts for your morning indigestion, but it is worth scrolling through to get a sense for the breadth and nature of the proposal. The short version is that President Obama is pushing absolutely staggering increases through the corporate and business tax systems. Direct taxes on business are, in general, inefficient and economically disruptive, but they are also peerless in their complexity, which means that few voters and essentially no reporters will make the effort to understand what is being done to them.

Trust me on this: something awful is being done to you.

That rail option’s looking better and better. With tar and feathers, of course.

[Update a few minutes later]

Obama Trek: the search for more money.

Boldly going where no American fascist president has gone before.

[Update]

They just keep on spending:

If not treated promptly, FSD, like alcoholism, leads inevitably to complete physical breakdown, loss of homes, jobs, cars, respect, everything. The breakdown is not limited to the sufferer, however. Like the alcoholic who must drink hard liquor every waking moment, massive budget deficits are the key symptom of late-stage FSD. The alcoholic dies, but with FSD, the nation, not the spenders, goes bankrupt. Even today, with Obama just beginning to manage the government, Geithner’s Treasury department must offer higher interest rates on bonds it sells to finance planned deficits because bondholders worry about Washington’s future repayment ability if taxes are not soon hugely increased. But those increases would kill economic growth, sending government revenues spiraling downward and eventually leaving Washington only one choice – repudiation of debt or bankruptcy. Either way, American prosperity will be a distant memory for generations to come. Intervention cannot come too soon.

But at least we’ll all be equal in our poverty. And that’s what’s important, right?

Business, Economics, Media Criticism, Political Commentary, Uncategorized

$1.8T

47 Comments

That’s the size of the current projected budget deficit for this year:

The deficit for the current budget year will rise by $89 billion to above $1.8 trillion — about four times the record set just last year. The unprecedented red ink flows from the deep recession, the Wall Street bailout, the cost of President Barack Obama’s economic stimulus bill, as well as a structural imbalance between what the government spends and what it takes in.

As the economy performs worse than expected, the deficit for the 2010 budget year beginning in October will worsen by $87 billion to $1.3 trillion, the White House says. The deterioration reflects lower tax revenues and higher costs for bank failures, unemployment benefits and food stamps.

For the current year, the government would borrow 46 cents for every dollar it takes to run the government under the administration’s plan. In one of the few positive signs, the actual 2009 deficit is likely to be $250 billion less than predicted because Congress is unlikely to provide another $250 billion in financial bailout money.

So it’s not all bad news.

Obama didn’t inherit most of this deficit. He created it (or rather, let Pelosi and Reid create it) with the insane porkulus bill, which wasn’t about stimulation at all, but paying off Democrat constituencies. So it’s not surprising that it’s not working. And to the degree that it’s not working, and we get less tax revenue from a shrinking economy, that’s his deficit as well.

Just for contrast, consider that 1.8 trillion was the entire federal budget in the year 2000. This is economic madness.

[Late morning update]

Obama fails the fact check:

-His assertion that his proposed budget “will cut the deficit in half by the end of my first term” is an eyeball-roller for many economists, given the uncharted terrain of trillion-dollar deficits the government is negotiating.

-He promised vast savings from increased spending on preventive health care in the face of doubts that such an effort, however laudable it might be for public welfare, can pay for itself, let alone yield huge savings.

-He pitched a remedy for Social Security’s long-term crisis that analysts say won’t fix half the problem.

Glad someone at AP is finally doing their job.

[Mid-afternoon update]

More thoughts:

President Obama continues to distance himself from this “inherited” budget deficit. But the day he was inaugurated, the 2009 deficit was forecast at $1.2 trillion — meaning $600 billion has already been added during his four-month presidency (an amount that, by itself, would exceed all 2001-07 annual budget deficits). And should the president really be allowed to distance himself from the $1.2 trillion “inherited” portion of the deficit, given that as a senator he supported nearly all policies and bailouts that created it?

The president also talks of cutting the deficit in half from this bloated level. But even after the recession ends and the troops return home, he’d still run $1 trillion deficits — compared to President Bush’s $162 billion pre-recession deficit. In other words, the structural budget deficit (which excludes the impacts of booms/recessions) would more than quintuple.

It’s a good point. What did then-Senator Obama do, if anything, to prevent any of this year’s deficit? If he’d been in charge, it would probably been even bigger, and last year’s as well.

Business, Economics, Political Commentary

No One Tell Barack Obama

2 Comments

A Tennessee dry cleaner is offering free services to the unemployed:

Magnolia Cleaners will clean a person’s professional job interview clothes, up to $25 per week, according to The Daily Post-Athenian. That amounts to the equivalent of two men’s or women’s two-piece suits and two dress shirts or two dresses.

With the unemployment rate at 13.8 percent in McMinn County, the company wants to help people facing difficult times by giving them a more confident appearance when they interview for jobs.

During the Depression, Roosevelt’s National Recovery Administration arrested a tailor for charging a nickel too little to press a suit. What will his protege in the White House do when he finds out about this?

Business, Economics, Media Criticism, Political Commentary

The Story That Doesn’t Fit The Narrative

12 Comments

The media doesn’t want to talk about Fannie and Freddie:

Do you know how much we’ve committed to backstopping Fannie and its partner-in-crime Freddie Mac (FRE)? $400 BILLION! Back in February that was doubled from the original $200 billion.

But the news of the quarterly loss is getting hardly any attention. Nothing here at the NYT business section, for example. Nothing at the blogs that were going nuts when AIG was revealed to have paid out bonuses back in March.

The problem is that the Fannie and Freddie disasters don’t fit into any conventional media narrative. At AIG you had Joe Cassano, lurking in the shadows, turning AIGFP into his own personal casino, while taking home gargantuan pay.

Fannie Mae? They help nice families get into homes. Their motto is something about helping the people who help house America. Who could be against that? Plus, the Fannie and Freddy story doesn’t help explain the idea that laissez-faire deregulation is what allowed Wall Street to go crazy. Fannie and Freddy had their own freakin’ regulator, OFHEO. Two companies with one regulator to look into both of them.

And then you have all the Democrats on the inside (Rahm Emanuel, for example) on the outside (Barney Frank), who have ties to the company’s worst years.

Yes, inconvenient, that.

Business, Economics, Space

Virgin Vision

28 Comments

Will Whitehorn talks a good game:

He foresees uses of the spaceship for science experiments, for example as an alternative to visiting the International Space Station or using unmanned flights for pharmaceuticals companies seeking to use microgravity to change particles.

Later, the aircraft could be used to launch small satellites or take other payloads into space, Whitehorn says. “We could put all of our server farms in space quite easily…”

…Eventually, he sees the possibility of transporting passengers to terrestrial destinations in spacecraft outside the atmosphere instead of by plane. He says a journey from Britain to Australia could be done in about 2-1/2 hours.

“That’s a 20-year horizon,” he said.

I’d take that a lot more seriously if he had liquid engines…

And of course, he never misses an opportunity to bad-mouth the competition:

Virgin is not the only non-governmental party trying to develop space travel in the private sphere, but Whitehorn is confident it will be the first to take passengers into space.

SpaceX, led by veteran Silicon Valley entrepreneur Elon Musk, is developing space-launch vehicles but they are not designed to carry passengers.

Well, yes, if you ignore the Dragon…

And of course, XCOR might beat them, though if they don’t get to a hundred klicks, the claim will be that they’re not in space, despite the stars, curvature of the earth, and minutes of weightlessness.