Apparently, so called green firms are looking toward local coercion to grow their businesses now that the global gun to the head fell through.

Businesses that had banked on global greenhouse-gas limits to spur alternative-energy investments now are looking to national and local policies to get more wind turbines turning and nuclear-power plants humming, after the muddled outcome of the Copenhagen climate summit.

The failure of the United Nations gathering to produce an enforceable accord to cut fossil-fuel emissions leaves the U.S., Europe, China, India and other countries to pursue the energy policies they already had.

In many cases, those policies are aimed more at strategic goals, such as economic development or reducing dependence on Mideast oil, than at threats posed by global warming.

via After Summit, ‘Cleantech’ Firms Reset Strategy – WSJ.com.

“Businesses that had banked on global greenhouse-gas limits” should be considered fascist enterprises. No businesses should be looking to force to public into buying their crap in order to grow their businesses, but unfortunately that is how business works now in America. Look at the health insurance companies. They are going to have millions of new customers thanks to government force.

Also, as stated in the last sentence, so called green tech is not economic development. You don’t develop economically by forcing people to buy something that is more expensive, delivers you less energy, to eventually get back what you already had. I’m not more wealthy for trading in my paid for Ford for a new Mercedes with a car payment.

In today’s Wall Street Journal, there is an op-ed by David B. Rivkin Jr. and Lee A. Casey about giving the states the ability to propose constitutional amendments.

For nearly a hundred years, federal power has expanded at the expense of the states—to a point where the even the wages and hours of state employees are subject to federal control. Basic health and safety regulations that were long exercised by states under their “police power” are now dominated by Washington.

The courts have similarly distorted the Constitution by inventing new constitutional rights and failing to limit governmental power as provided for in the document. The aggrandizement of judicial power has been a particularly vexing challenge, since it is inherently incapable of correction through the normal political channels.

There is a way to deter further constitutional mischief from Congress and the federal courts, and restore some semblance of the proper federal-state balance. That is to give to states—and through them the people—a greater role in the constitutional amendment process.

The idea is simple, and is already being mooted in conservative legal circles. Today, only Congress can propose constitutional amendments—and Congress of course has little interest in proposing limits on its own power. Since the mid-19th century, no amendment has actually limited federal authority.

But what if a number of states, acting together, also could propose amendments? That has the potential to reinvigorate the states as a check on federal power. It could also return states to a more central policy-making role.

via David Rivkin and Lee Casey: The States Can Check Washington’s Power – WSJ.com.

While the authors have a good idea and a great point, they completely leave out what happened “nearly a hundred years” ago that allowed federal power to expand. Several things happened, but one thing in particular happened that if it had not happened would given the authors what they are asking for and would have prevented the massive expansion of the federal government. In 1913, the 17th amendment was ratified. That amendment changed Senators from being elected by state legislatures to being elected by the people via the popular vote.

The original point of the Senate was to represent state interests and to keep the Federal government from infringing on states rights. Once that barrier was removed, there was no longer a check on the federal powers. You get what we have now.

Prior to the 17th amendment, states could do exactly what the article is proposing. States could propose amendments via their state’s senators, who were accountable to the state legislators. Now, senators aren’t accountable to state legislators, so all they care about is the popular vote of the people, which is easily manipulated.

Come to think about it, do you think Senators could be as corrupt as they are if they were accountable to state legislators? Could corporations buy off US Senators at the expense of their citizens if they new that the state legislators could kick them out of office? While I’m sure there would still be corruption, I don’t think you would have it on the scale that we do now. I also don’t think you would necessarily have these career politicians and the rotating door between government and lobbying.

As time goes on, the great intellect of our founders avails itself more an more. They put controls in place knowing what would happen without those controls. Unfortunately, we allowed Woodrow Wilson, who was a “progressive” to undermine so much of what the founders put in place. Under Wilson, we got the 17th amendment, ending state rights. We got the federal reserve act, which allows the federal government to spend by printing money, robs the middle class and poor through inflation, and creates boom bust cycles. We got the progressive income tax, which punishes productivity and instigates class warfare. The list of Wilson’s destructive acts could go on with drug laws, antiwar suppression, etc.

If we ever want to take the country back towards more liberty, states without a doubt need to start reasserting themselves. It does seem to be happening underneath the surface. There is a growing 10th amendment movement. There are even discussions on some websites and TVs shows about secession. While I don’t see secession ever happening with everyone being programmed that the south was evil for seceded, I can see states voiding federal laws if the people get loud enough. Ultimately, it comes down to people rising up against these federal laws. The first chance at this will be this enslaving health care bill. The people need to get extremely loud about it and tell their state legislators to ignore the federal law. If states ignored the law, as some have ignored the drug laws, they can in effect void the laws.

Maybe it will happen. More likely it won’t. One can only hope that states reassert themselves. If they do, we have a fighting chance at re-establishing our country. If not, Rome will continue to burn until it is no longer.

Wow, stumbled across this blog post this morning on Mish’s Global Economic Trend Analysis. It’s obvious we are becoming a society dominated by the state. You cannot have government employees making twice as much as the private sector. The incentive becomes working for the government, and not building our economy from the private sector, the sector that actually produces something. Also, with that comes the incentive to grow the state and to defend that state at all costs. When the state comes calling for the highly paid government workers to put down any civil unrest with the general population, the government employees will no doubt try to earn their pay. Anyway, here is a letter to Mish about the absurdity of his salary.

Hello Mish.

I read your article about the salaries of government workers compared with the private sector. I am a police officer. I won’t say where, let’s just say it’s one of the most expensive cities.

I am 29 years old and I make about $130k a year with overtime. Most of the officers make this and some even make $185k a year. A few supervisors in Internal Affairs have made of $200k along with detective sergeants.

To be honest, I think our salaries are totally out of touch with not only the private sector, but with America. It’s absolutely ridiculous. When I became a police officer we were all making way below what private sector employees made. I took the job knowing I will never be rich but knowing I will have a stable job with benefits.

Little did I know my union would secure very good contracts at the expense of pillaging the public. This cannot go on. I have studied and read Robert Prechter’s Conquer The Crash book and how he (and you also) say we will have a deflationary collapse. I agree totally.

I’m just paying off debt while the going is good and have put most of my money in gold (at $800 an ounce). I’ll probably sell that gold soon because it’s getting popular in the media and on the radio. So yes, I just wanted to let you know that these govt/federal/state jobs are ridiculous. I know because I have one. 90% of the workers sit around and work for about 2 hours throughout the day and get paid 6 figure salaries. They have full benefits and pensions, 6 week vacation plans, and sick days galore.

It’s gotten to the point where the private sector cannot compete because these senators keep bringing home the pork for these bloated corporations with unions. The small business man can never compete. This is socialism at its worst that has crept into America over the past quarter century.

via Mish’s Global Economic Trend Analysis: Police Officer Responds To “Six-Figure Federal Salary Gravy Train” Post.

There are only a few ways that all this absurdity is going to end. All of them are bad. Time to prepare for TEOTWAWKI.

Last night I’m watching John Stossel’s new show on Fox Business. His topic was health care. As usual, Stossel was right on blaming health insurance (third party payer) for the rising prices. Of course, the socialists in the audience and in some of the on the street interviews were having none of it. What was to blame? PROFITS! These idiots think that profits drive up the costs. I even debated a socialist on Facebook who said under socialism goods and services would be the cheapest they can be, because there would be no profit. By definition, he thinks removing profit lowers price. His exact words were, “Profit wouldn’t even be considered in a socialist state, so drugs would automatically be at their lowest possible price.”

It’s silly to think that removing profit makes things cheaper. Price is a function of supply and demand, not profit. Socialism always generates more demand while dwindling supply, so there is no reason to think that not having profits would lower price. That is a simple economic fact. The other hazard of removing profit though is lack of innovation. This is where removing profit is deadly.

The biggest profits are generated with the introduction of a new innovation. The innovator has first dibs on the market. They can charge the most to recoup their investment costs. After investment costs are recouped, they generate tons of profit. I know that sounds horrible in the eyes of many socialists, but what happens next is competitors see the huge profits. They then rush in to capture some of the profits for themselves. By jumping on the profit bandwagon, they bring the goods and services to more people. How do they differentiate themselves in order to get a piece of the profits? They either innovate, making the product or service even better, they seek efficiencies, which lowers costs, or they undercut their competitors, seeking less profits in hopes of taking some of the market. This whole process drives down the cost through innovation, efficiencies, and out right price wars.

This competition always drives profit margins down. Anyone who gets in on the early stage of a new technology can tell you “enjoy it while it lasts.” Once the profit margins are driven down so far, you end up with the companies who can deliver the products or services with the best quality and efficiency.

Meanwhile, the innovators are back at it seeking the massive profits that come from new products and services. This is what leads to our ever improving livelihood.

So what does this mean for health care? If we remove the boot of the government, we can have this same process in health care. It does happen inspite of the government now, but there is no doubt that it is hampered and slowed. For instance, moving a drug through the FDA is estimated to cost close to $1 billion dollars and takes 15 years. How many drugs are there that are needed, but can’t produce the profits necessary to overcome the costs imposed by the FDA? How many people die without those drugs?

If you remove profits, you remove innovation. If you remove innovation, people die. New drugs, treatments and cures are not developed.  If you remove profit, you remove competition. It’s competition that brings products and services at ever cheaper prices to the masses. If people can’t get the products and services, people die. While all these socialists scream, “No profits in health care!”, they should be screaming “Let people die, let people die!”

Watch Stossel’s Health Care show here:

http://www.therightscoop.com/watch-%e2%80%98stossel%e2%80%99-from-fox-business-%e2%80%93-december-17-2009/

via Hot Air » Blog Archive » Reason TV: The best Christmas ever?.

Would we be merry without the free market? Kids sure wouldn’t.

Can you imagine what would happen if the government would let the free market address health care?

Ford Motor Co. is working to offer drivers a way to upgrade the electronics in their vehicles, much the same way they can add applications to their iPhones and BlackBerrys.

The car maker hopes to persuade software developers to tap the Internet service, GPS location-finding capability and digital-music setup already found in its Sync entertainment-and-communications system, which it developed with Microsoft Corp.

Such applications, or “apps,” might do such things as give directions to every espresso shop along a highway open after 9 p.m., or allow friends to follow one another to a location through a GPS process called “breadcrumbing.”

via Ford Seeks iPhone-Like Apps for Its Cars – WSJ.com.

While this is not some huge innovation, it’s just another example of the free market improving our lives daily with little improvements. In pursuit of a competitve advantage, Ford is looking at making your life just a little better. GPS has already made driving much better, and this is the next step. Having something similar to the iPhone built into your car will open up your travel to millions of innovators all over the world. That article mentions finding coffee shops opened after 9pm. How about an application that reminds you to pick up flowers for you wife on your way home? How about an app that searches the local area for the best gas price? How about an app that checks your email on the way to the office, so you can filter though the less important emails before work even begins? The possibilities are endless, and this is how the free market makes our lives better. As I’ve said previously, the fastest growing and most innovative areas of our economy are the ones with the least government regulation and involvement. Imagine what would happen if this innovation was allowed to flourish in the health care industry.

This is breaking news on the Wall Street Journal. Hillary Clinton pledges $100 billion per year out of American tax payers’ pockets to hand over to the Mugabes of the world via the “Climate-Aid Fund”.

U.S. Secretary of State Hillary Clinton has announced that the U.S. is prepared to join other rich countries in raising $100 billion in yearly climate financing for poor countries by 2020.

The announcement could give a boost to deadlocked climate talks which have faltered over disputes between rich and poor countries over emissions cuts and climate financing.

Mrs. Clinton said the financing is contingent on world leaders reaching a broader climate pact at the U.N. talks in Copenhagen.

She said the deal must include all major economies, meaningful actions to cut greenhouse gas emissions and a system to ensure all parties’ actions are transparent.

Mrs. Clinton says “$100 billion is a lot. It can have tangible effects.”

via Clinton: U.S. Ready to Join Climate-Aid Fund – WSJ.com.

So, let’s get this straight so I can get back to reading how to survive the coming collapse. We are already borrowing over $1 trillion a year. On top of that, we are going to borrow another $100 billion for this climate change scam. We are going to ask China to lend us money to hand it over to Mugabe. In other words, we are slaves to Mugabe. We are pledging our future and our children’s future labor to give $100 billion now and every year in the future to the Mugabes of the world. Did any of these political pigs want to ask us if we wanted to be enslaved so they could feel good about themselves?

Next time Obama goes back over to China to tell them how bad their leaders are and how they aren’t free, can he take the gun away from our heads first? Without the government gun to our heads, Americans would never fork over $100 billion to hand to tin pot despots.  I believe there was once a revolution over taxation without representation. Maybe it’s time for another one.

The WSJ’s token liberal comments on how to save the news papers.

This is a terrible time for newspapers, but the solutions suggested over the last year by the deep thinkers of the floundering industry give one little hope.

Back in September, the ombudsman of the Washington Post, Andrew Alexander, lamented his paper's failure to keep up with conservative outlets after they described footage showing Acorn employees apparently advising people how to evade the law. The Post's slowness on the story, Mr. Alexander wrote, raised the possibility that the paper didn't “pay sufficient attention to conservative media or viewpoints.”

Continuing the next day on the newspaper's Web site, he decided that the blame for this unhappy situation lay with the newspaper industry's workforce, which is apparently made up of the wrong kind of people. According to “surveys,” Mr. Alexander wrote, “newsrooms . . . are more liberal than the population.” Newspapers might mean well, but they are handicapped by their monocultural politics. The obvious answer is to hire for political diversity.

via Thomas Frank: Newsrooms Don’t Need More Conservatives – WSJ.com.

Sorry, for making you read that piece of the article. It’s completely a completely useless article. He basically said the problem isn’t lack of conservatives, and that having more conservatives wouldn’t have changed anything in regards to the media malpractice with the Iraq war lead up and the mortgage meltdown. He is probably right about that, but what difference does it make.  Newspapers don’t need saved. Here was my comment on the piece.

Who says we need to save the newspapers? If no one wants to buy the newspapers, it’s because the value they offer doesn’t justify their price. Should we talk about how to save heiroglyphics? No, times change, and the way people get their news is changing. The mainstream media has been exposed for it’s corruption, and society is now bypassing them. Why should I read about the economy from someone who majored in journalism, when I can read an economist’s blog? Why should I read about war from someone who majored in journalism or polysci, when I can read the blog of someone who spent years in intelligence and the military? The list goes on and on; health care, finance, sports, etc. Blogs and the internet in general provide better news via direct sources. There is no reason to have your information filtered through journalists, and thus no reason to save the newspapers.

In the Wall Street Journal today, Alan Blinder, talks up the economy and show’s his optimism (naivete) of things to come.

By ALAN S. BLINDER

The U.S. economy is digging itself out of a deep hole. You have probably heard a lot of doom and gloom lately, including talk of a jobless recovery, an L-shaped recovery (which means no recovery at all), or even a W—the feared double-dip recession. The Scrooges have a point: There are serious dangers to the nascent recovery. But you’ve heard all that many times. Let me offer instead, in deliberately one-sided fashion, the case for optimism. It is, after all, the holiday season.

The case begins with the “slingshot effect” I wrote about on this page last summer (“The Economy Has Hit Bottom,” July 24, 2009). When the growth rate of any component of GDP rises, it gives overall GDP growth a boost. And going from sharply negative growth to zero is a notable rise. In July, the slingshot scenario was hypothetical—though likely. In today’s economy, it’s a real phenomenon.

During the first half of this year, the investment component of GDP declined at a stunning 38% annual rate. Since the investment share of GDP was then about 14%, this implosion accounted for minus 5.4 percentage points of GDP growth. But since overall GDP declined “only” 3.6% in those two quarters, the rest of GDP (the 86%) actually rose. It was a small but real reason for optimism in a stormy sea.

Then came the third quarter. Like a woozy prizefighter lifting himself off the canvas, the battered investment component of GDP managed to rise (at an 11% annual rate), which added 1.3 points to GDP growth rather than subtracting 5.4 points. That 6.7 point swing was the start of the slingshot effect, which is not yet over.

Investment has three components: business investment, inventory stocking, and homebuilding. Inventory stocks were still declining at near-record rates in the third quarter; they simply must level off within a few quarters because sales are rising and firms will not want to deplete their stocks indefinitely. Business investment remains 20% below its 2008 peak; its likely course is up, not down, because plants and equipment wear out. And housing? Well, you know. Homebuilding is still in the doldrums—limping along at less than half the level of 1960. The only way to go is up.

This is where Keynesians think they have things right by using their assumptions to prove their assumptions. Blinder says while investment decreased, the other GPD components picked up the slack, so GPD didn’t decline as much as it would have otherwise. The problem is the slack was government spending. This is how they reinforce their own assumptions. They believe the government can boost the economy with stimulus, printing money, etc. Then they create a GDP calculation that includes government spending as one of it’s components. Then to increase GDP, they use that component to minupulate the calculation. The problem is that component does nothing to create wealth for our economy. It does not create real economic value. Gross Domestic Product is about production, but the government produces nothing. If this was the way to economic growth, why don’t we just focus on that component of GDP? Why not just quadruple the government spending? GDP would skyrocket!

Of course, the investment slingshot won’t last forever. Sometime in 2010, consumer spending must take over. And this is where the pessimists go into full throttle. Burdened by huge losses of both wealth and jobs, American households will start saving like mad, we are told. Sounds plausible, but it hasn’t really happened. True, the average personal saving rate has risen to 4.5% of disposable income so far this year from 2.7% in 2008. That’s higher, but a long way from the 8%-10% saving rates the doomsayers have foreseen. A saving rate near 5% is consistent with 3%-4% GDP growth in 2010.

Let’s hope consumers don’t listen to Blinder. Our country is badly in the need for savings. Savings are used for investment, which is what creates real economic growth. Yes, ultimately consumers need to spend, because we need to buy much of what we produce. If we don’t, it won’t be produced. The problem is when that consumption is heavily leveraged as it has been. I’m sure the Fed will eventually trick the public into going more in debt as things start to get back to normal.

The second major source of optimism is the amazing performance of productivity during the recession. To be sure, that performance had a downside: While real GDP was falling 3.7%, payroll employment dropped 5%, devastating many American families. But by definition, that discrepancy means that productivity—output per hour of work—rose substantially during the recession, which is pretty unusual.

The last two quarters were even more extreme: Productivity in the nonfarm business sector grew at a shocking 8.1% annual rate. There are two possible explanations. One: The last two quarters were among the most technologically innovative and entrepreneurial in the history of the United States. Two: Fearful businesses pared payrolls to the bone. If the second is closer to the truth, payrolls are extraordinarily lean right now. Which means that firms will need to hire more workers as their sales and production grow. Which means that employment may start growing sooner than the pessimists think.

I have been pointing this out for months, but until the last employment report, it was a hypothesis supported by no evidence. Not anymore. While payrolls continued to decline in November, it was by only a scant 11,000 jobs; and the job counts for September and October were revised upward. The data now show a clear trend that suggests that net job creation may be only a month or two away. We’ll see.

Here again, the problem is Blinder is counting the government as if all jobs are created equal. Jobs do the economy no good if they aren’t producing value to the economy, and government jobs do not produce value. The latest jobs report showed increases in government jobs and temporary employment. All other jobs, the ones we want, were down. More government jobs, used to distort the jobs report, is not a good thing.

There is more to the case for optimism. For one thing, less than 30% of February’s $787 billion fiscal stimulus has been spent to date; over 70% is still in the pipeline. Pessimists dote on the fact that the rate of increase of stimulus spending has probably peaked and will be lower in 2010. True. But the level of GDP will continue to get support from fiscal policy, and a second job-creation package (“Please don’t call it a stimulus!”) looks to be in the works.

Back to increasing the government component of GDP. See why government spending should be taken out of GDP?

Then there is the Federal Reserve’s stupendously expansionary monetary policy. It is well known that interest rates work on the economy with long lags. But the Fed’s last rate cut came a year ago. So isn’t the monetary policy pipeline empty? The answer is no, for at least three reasons. First, history suggests that the time lag is closer to two years than to one. So even the normal policy lags are not over.

But second, and more important, the lags are likely to be abnormally long this time around. As long as the economy’s credit-granting arteries were blocked, they could not carry the Fed’s lower-interest-rate medicine into the economy’s bloodstream. Sadly, some of these arteries remain blocked today—such as for small business lending. But the Fed, Treasury, FDIC and others have created a bewildering variety of stents and bypasses to get credit flowing again. The credit markets are now healing, though slower than we would like. Hence there is still monetary stimulus in the pipeline.

And third, the Fed continues to inject more medicine. Not by cutting interest rates, of course. Zero is as low as you can go, and the Fed arrived there a year ago. But “quantitative easing” is still in play. One example is the mortgage-backed securities (MBS) purchase program, which is adding MBS to the Fed’s balance sheet and providing vital support to the mortgage market. Yes, the Fed has begun to think about its exit strategy. But that is for the future, not for now.

The Fed’s “stupendously expansionary monetary policy” is what we should fear the most. The author may be right on the lag, and that would be the most devasting blow to the economy. Many are predicting massive inflation as the Fed’s stimulus finally leaves the reserves and enters the economy. I wouldn’t call that a case for optimism. As I highlighted in a previous blog, even the best case inflation scenario is not too comforting. If not severely contracted, we’ll have massive inflation. If severely contracted, we could be looking at a serious contraction in the economy. Pick your poison.

I warned at the outset that I would present a deliberately biased case. So let me admit, once again, that serious downside risks remain. The investment slingshot and the fiscal stimulus will both peter out in 2010. Consumer finances and confidence are shaky. Banks are still failing and commercial real estate is a mess. We cannot count on exports to pull us out of this slump. All true. And all reasons not to expect the kind of exuberant boom that typically follows a deep recession—such as the 7.7% growth spurt in the six quarters following the 1981-82 slump. No one expects that.

So my optimism is guarded. The 3%-4% growth rate that I anticipate for the rest of this year and for 2010 is a lot worse than 7.7%, to be sure. But compared to what we’ve been through, it will feel a whole lot better.

Mr. Blinder, a professor of economics and public affairs at Princeton University and vice chairman of the Promontory Interfinancial Network, is a former vice chairman of the Federal Reserve Board.

via Alan S. Blinder: The Case for Optimism on the Economy – WSJ.com.

Blinder doesn’t even consider the effects of the health care takeover, national debt, etc. Then again why would he? Keynesians think government spending is as valuable as business investment. Why? Because GDP says so.

I keep hearing politicians and pundits saying the US has to be at the forefront of the green revolution. This is the new internet revolution they say, and it will create tons of jobs in the future. That got me thinking about whether this is the case.

To start, what is economic growth, and why does it benefit society? Real economic growth is increased production of society as a whole (unfortunately our GDP focuses on spending). Increased production means that there are more goods and services for the society to consume and to trade with other nations. That is increased wealth.

Now, the internet revolution and the technology revolution drove up productivity, which means you can produce more with less. That is a pretty simple idea, and it’s easy to see how it increased wealth for us as a nation. Also, being the leader in these revolutions helped us get a head start. With these revolutions, even if  you weren’t the leader, you still benefited immensely from them.

So, the question is how is the Green Revolution like the technology/internet revolution? Does it increase productivity? It is hard to see how. Having energy produced by the sun instead of coal doesn’t increase productivity. If it was cheaper, maybe you could say the savings would be reinvested, and that would eventually lead to increased productivity. Unfortunately, it isn’t cheaper, which is why it hasn’t taken place freely, and it requires government force and subsidies.

Think about it like this. Let’s say as a nation, you have $100 in wealth. You need electricity for luxury and commerce.  Now, say it costs $10/kwh when power is produced by coal (I know nothing about electricity, so please don’t laugh). You would be able to get 10kwhs for you $100. Now, let’s say with green energy it costs $20/kwh. I don’t know the ratio, but I know it’s more expensive. With green energy, you can only get 5kwhs for society’s $100. Now, how does that make your society richer? Why are we all racing to be the leaders of the revolution that makes you less wealthy?

If green technology makes you less wealthy, how do you benefit as a society from the “Green Revolution”? The only way I can think of is you are the leader, and you steal the wealth of other nations in a zero sum game. Other countries buy the technology from your country, which would give you that income from that export. Meanwhile, that nation pays out the money for the technology, and then pays out for the increased cost of the power. This sounds like a huge wealth transfer.

As you can see, there is nothing revolutionary with the “Green Revolution”. It is no where close to the internet revolution and the technology revolutions. Those revolutions didn’t need government force to come into existence. They came to be because they drove up productivity, drove down costs, and increased our standard of living. They actually increased our wealth. The green revolution is the exact opposite. It requires government force, increases cost, and decreases our standard of living. Keep this in mind the next time you hear our politicians talking about the US needing to be at the forefront of this revolution. No worth while revolution requires government forcing it upon you.