You can pretty much say goodbye to the days of ever increasing advances with the internet. Everyday there are more and more articles about government involvement. Eventually the debate will switch from should they be involved, to which policy is best. Once that happens, you are back to the “head or gut” question.

WASHINGTON — The Federal Communications Commission began to lay the groundwork for a bigger federal role in the broadband business Wednesday, outlining the hurdles the U.S. needs to overcome to improve the availability of high-speed Internet access.

The FCC identified a number of issues the government should address, including the high cost of laying new broadband lines in rural areas, a lack of airwaves for wireless Web access and ill-informed consumers.

“This focus on broadband is a reflection of a recognition that the U.S. is lagging behind,” FCC Chairman Julius Genachowski said Wednesday at the agency’s monthly meeting.

The FCC is drafting a National Broadband Plan, which will lay out ways the government can improve broadband service in the U.S. The plan is scheduled to come out in February, and it’s uncertain how many of its suggestions will ultimately be adopted. Already, some big cable and telecommunications companies are concerned the agency wants to impose rules that could undermine their business strategies and profitability.

via Bigger U.S. Role in Broadband Is Likely – WSJ.com.

Why is this such a big damn issue? No one in the public is demanding it. The government is going to tell us why we are lacking broadband?

Notice one issue they claim is the cost of laying new line in rural areas. So the rest of us who live in more populated areas have to pay for someone’s internet who decides to live out in the boonies. That’s just great. More of the majority paying for the minority. Besides, satellite already delivers this, but this is the problem when the government looks at a “problem”. It’s not that they don’t have the ability to get internet, it’s that they don’t have it by means of cables under the ground. You always get a misidentification of the problem (in this case there is no problem) when you have central planning. Satellite used to be fast only on download, and it was still dialup for the upload. Now you have it fast in both directions. This is what is called innovation. But you can’t have that. We all need it by wire.

Next is the lack of airwares for wireless. In this case, just as all cases where the government controls something, you have scarcity created by the government. If the airwaves were owned or handled by the private sector, they would be used for their best use. If people were demanding more airwaves for wireless, then it would happen. Instead politics is entering into it (PBS is not happy about it).

Next, the government falls back to it’s default position. The people are just too stupid to know what’s good for them. The people are too dumb to realize they don’t need 100mbs broadband to every house like Japan has. Who cares if Japan has 100mbs to every house. Are they better off than us overall because of it? Are we harmed by only having 20mbs, when we decide that is all we need at the cost that it’s delivered at? My 93 year old grandma shouldn’t have her phone bill raised when she doesn’t even know what the internet is.

We are told we are lagging behind. This is just like the “keep up with the Jones” mentality of the consumer. It’s not that we truly need 100mbs broad band. It’s that someone else has it. It’s not fair. Didn’t we learn our lesson over the past decade with this mentality? Again, I say, why do we think things are so different at a governmental level than they are on a personal level. If keeping up with the Jones is bad personally, it is bad governmentally.

The government is creating an illusion of lack of supply. If there was more demand and not enough supply, prices of broadband would be increasing. As we all know, broadband is constantly decreasing in prices. Thanks to the free market and technological innovation, supply is increasing faster than demand. When that happens, prices go down, as they have. So, why are we even looking at this? We’ve already established we have more supply than demand. Who is benefiting from this? Could it be some of the big businesses that bought and paid for your politicians? Could it be Big Brother? It sure in the hell isn’t you. You aren’t even demanding it.

Well, the scam is up, and the Democrats know it. TARP and stimulus have had no effect on creating jobs. So if government didn’t work the first time, I guess they just didn’t do enough.

The House of Representatives is pushing a bill aimed at boosting employment, a potentially risky move that underscores Democrats’ fears about the economy and jobs — including their own as they head into an election year.

Elements of such a bill could run the gamut from infrastructure spending to small-business lending to extra aid for states and the unemployed, lawmakers said. Democratic leaders haven’t determined any specifics — including the politically dicey question of how to pay for it.

The beauty of the free market is you don’t have to pay for it. Get the government the hell out of the economy, and jobs will be created. Oh, and we won’ t have to pay for it. This one line underscores the idiocy of the government. Infrastructure spending is not going to create long term jobs. It also does nothing but reduce wealth, just as all central planning of the economy does. Ask Russia. Lending to small business isn’t going to create jobs either. If the economy is a disaster thanks to government, why would small businesses borrow money. Who are they producing for? Of course the government’s solution to this disasterous credit bubble is to offer more credit. Lastly, what the hell is extra aid to states going to do for jobs. There was extra aid to states with the last stimulus bill. It did absolutely nothing. It’s just moving money from the Federal government to the state government, both of which are out of control.

Among ideas floated Tuesday by Democratic leaders were using bailout money from the Troubled Asset Relief Program and a tax on Wall Street firms’ financial transactions, such as derivatives trades.

“Hey, trust me.” says the government. We only lied to you about needing the $750 billion by the weekend to bailout Wall Street. Low and behold we have tons of the money still sitting around waiting for us to play God with.

Rep. Chris Van Hollen of Maryland, who runs the House Democrats’ campaign effort, said lawmakers were aiming for a six-year infrastructure bill that also could include energy-related investment.

Energy related investment? You mean a GE payoff? Energy companies will invest themselves if it makes economic sense. If it doesn’t make economic sense, and the government decides to do it, that means we’ve basically had our standard of living reduced. If solar power, for example, doesn’t produce a good ROI, it doesn’t matter who is paying for it. No matter what it’s not a good ROI and in this case, the tax payer is funding this bad investment.

Mr. Van Hollen, a member of the Ways and Means Committee, said lawmakers also might consider a payroll-tax holiday — a short-term break on Social Security and Medicare taxes to boost private-sector hiring. He said that might be an alternative to an employer tax credit for new hires, an idea that critics say is fraught with enforcement problems.

Hahaha. So the solution to creating jobs is a payroll-tax holiday? Social security and medicare are both bankrupt, but taking money from them is a good idea. If it’s such a good idea, and this is what is hampering the job market, let’s ditch it for good. This is just stupid. While I would love to see these taxes go, a temporary holiday isn’t going to trick an intelligent business person into hiring. If that reduction in cost is temporary, so is the position.

The White House didn’t comment on the developments. President Barack Obama announced a jobs summit for early December and the administration is likely to weigh in with its own recommendations.

Please President Obama. Give us your wise recommendations. They have benefited us so much so far.

House Majority Leader Steny Hoyer (D., Md.) said he hoped to bring the bill to the House floor by mid-December, giving rank-and-file lawmakers a chance to vote just before the start of the 2010 election season, when control of Congress will be up for grabs.

“Clearly, 10.2% unemployment is unacceptable and is causing great pain to literally millions of people around the country,” Mr. Hoyer said.

This is so important that we need to wait till the political season begins, so politicians can take complete advantage of the politics of it.

House lawmakers hope the Senate also will act before the end of the year. Senate leaders said late Tuesday, they planned to tackle the issue only after completing the health-care overhaul. Sparring over the jobs legislation could last for many weeks beyond that.

AFL-CIO president Richard Trumka put pressure on Congress to act Tuesday when he rolled out a proposal putting heavy emphasis on government spending on infrastructure, including schools, as well as a new round of aid to states and local governments to forestall layoffs.

Let’s have a guy who never started a business and only loots business owners tell us how to create jobs. The only form of job creation the AFL-CIO knows is pummeling private businesses into the ground until they aren’t competitive, and then costing many jobs.

Rep. John Larson (D., Conn.), the House Democratic caucus chairman, said he believed House Democrats would have to offset the bill’s cost, at least in part, to answer concerns about the soaring federal budget deficit. The government is expected to run a $1.4 trillion deficit in fiscal 2010, which began on Oct. 1. Democrats are likely to delay the effective date of new taxes until the recession is over.

Another possible revenue source is taxes on Internet gaming.

Mr. Larson, who as the House Democratic caucus chairman pays close attention to rank-and-file members’ attitudes, said there was growing momentum for a tax on some Wall Street trading.

There you go. Tax Wall Street trading. That should boost the economy. Let’s tax capital that is used to fund business expansion and creation.

Leading Democrats in both chambers, including Rep. Barney Frank of Massachusetts, have expressed reservations about a tax on financial transactions, out of concern it could drive trading offshore.

Wow, I actually can’t believe Barney Frank said this. So, he understands that this could drive trading offshore, and thus cost the government capital gains taxes, but for some reason he doesn’t see how massive business taxes and regulation drive businesses offshore.

Senate Budget Committee Chairman Kent Conrad (D., N.D.) said he would support legislation that would further extend the jobless benefits program and boost infrastructure spending, including roads and bridges. The senator said such spending would not only create jobs but boost the efficiency of the U.S. economy. “We need to do much more, ” he said.

Hahaha, the government is going to boost the efficiency of the economy. Did I read that correctly? Also, extending jobless benefits even more. Now there is motivation to get off you butt and start working.

Brad Dayspring, a spokesman for House Republican Whip Eric Cantor (R., Va.), said any bill that added to the deficit wouldn’t work. “They tried that approach once and failed,” Mr. Dayspring said.

Among the ideas for unused TARP funds are direct lending to small businesses, and funding of an infrastructure bank that would provide seed money for projects.

via House Leaders Push for Jobs Bill – WSJ.com.

I guess ultimately we get what we deserve. We elect these moronic bums to represent us, so we have no one to blame but ourselves. Who cares if their ideas don’t make sense. Who cares if your family is struggling financially, you wouldn’t believe spending more and borrowing more is the fix. This is the government. It’s different.

The latest mile marker on our road to fascism is the regulation being crafted by the administration and Barney Frank and the alternative being crafted by Chris Dodd. The two people most responsible out of politicians for the mess we are in are now the ones claiming they are going to fix it.

Both bills are intended to cover more than just companies that are engaged in financial activities. Following the administration’s lead, both provide that a company engaged in a financial activity “in whole or in part, directly or indirectly” could be subject to enhanced regulation and supervision.

The Frank bill seems intended to regulate all financial firms as though they are banks. Thus it requires financial activities to be transferred out of operating companies into a separate entity, which would then be regulated like a bank (even in its relations with its parent company).

The Dodd bill is a blunter instrument, proposing to regulate all companies that include financial activities “in whole or in part.” But almost all companies—retailers, manufacturers and service organizations—engage in some financial activities, if only to promote the sale of their products and services. If the administration’s health-care proposal has the potential to nationalize one-sixth of the economy, Messrs. Frank and Dodd are bidding to cover the rest.

“in whole or in part, directly or indirectly” and “in whole or in part” sure sound all encompassing. It would seem to me that every business is “engaged in financial activity” to a point. Add the control of government health care to this equation, and you pretty much have complete control of business.

The administration’s original legislation would give the Federal Reserve authority to regulate and supervise all large nonbank financial institutions and, if they are in danger of failing, take control of them and resolve their problems outside the bankruptcy system. The underlying notion is that the failure of one of these companies—which include bank holding companies, securities firms, insurance companies, finance companies, hedge funds and possibly others—could cause a systemic collapse.

Although the administration likes to give the impression that its proposal is limited to exceptional cases and the largest financial institutions, its draft legislation, and the Frank and Dodd bills, use very broad language to describe the triggering event for either enhanced supervision or a subsequent bailout.

Putting it bluntly, the administration’s proposal, and the House and Senate draft bills, would establish too big to fail as national policy. Whether the companies are regulated by the Fed or by a new agency, they will still have been marked as threats to economic well-being—and thus seen by creditors and investors as specially protected by the government. This will give them the same advantages enjoyed in the mortgage business by Fannie Mae and Freddie Mac, with the same result for competitors and taxpayers.

This sure sounds like welfare for the rich to me. Basically if you are lucky enough to have your business labeled “too big to fail” (I’m sure we’ll see more lobbyist pushing to have their business classified as such), then you basically do not have to worry about your actions. Take your profits while you can and things are good, and when things get bad, don’t worry about it. The American taxpayer will have to eat it. The investors and the executives reap the rewards and have all upside.

The Frank bill would explicitly authorize the Federal Deposit Insurance Corp. (FDIC) to provide financing that would restore a failed company to health. The craftier Dodd bill implies that creditors will take a hit, but then authorizes the FDIC to pay off creditors in full if that would avoid “serious adverse effects to financial stability or the United States economy.”

Moreover, under the Dodd bill, after the government has settled with its creditors, a failed company can have a public offering of its shares and return to the competitive fray. That’s good news in one sense, of course, but not for everyone; under the Dodd plan, the government is authorized to recover what it spent by taxing all financial firms—that is, firms such as bank holding companies and others involved “in whole or in part” in financial activities—with total assets of more than $10 billion.

In effect, the legislation creates moral hazard by transferring the risks and losses of a failing company from its creditors to its competitors. The protection of taxpayers may be a mirage anyway, since the FDIC is authorized to put off these collections indefinitely to avoid an “adverse effect on the financial system or economic conditions.”

via Peter J. Wallison: The Permanent TARP – WSJ.com.

This regulation amounts to “there are no losers here” policies. It’s like all the kids participating in a sporting event getting a trophy, because they are all winners. Meanwhile, they lose their sense of competition and drive. There is no downside for a company once it’s classified as too big to fail. This is a scary proposition. If they have bad management, they don’t have to worry. The government will step in, usher them back to “health” with tax payer money, and then more bad management can come in and make profits until it falls apart again. Talk about wealth distribution. I didn’t know Obama meant this when he was talking to Joe the Plumber. I should have known when he said he was for “Trickle Up Economics” instead of Reagan’s “Trickle Down Economics”. Apparently with trickle up economics, the wealth that the poor and middle class have moves up to the rich that have political connections.

There is something seriously wrong when a communist government is lecturing us on our monetary policy, and they are right. Then again, it seems the communist government of China understand capitalism and it’s benefits more than our President.

BEIJING — China’s top banking regulator issued a sharp critique of U.S. financial management only hours before President Barack Obama commenced his first visit to the Asian giant, highlighting economic and trade tensions that threaten to overshadow the trip.

Liu Mingkang, chairman of the China Banking Regulatory Commission, said that a weak U.S. dollar and low U.S. interest rates had led to “massive speculation” that was inflating asset bubbles around the world. It has created “unavoidable risks for the recovery of the global economy, especially emerging economies,”

via China’s Blunt Talk for Obama – WSJ.com.

Appparently, GE doesn’t believe in growing business by supplying goods and services that the consumer wants. Instead it believes in coersively taking money from the consumer via governments to grow their business. I guess it doesn’t hurt to have helped elect the President with your TV networks. It also doesn’t hurt to fake concern for the favorite causes of the left with “Green weeks” and “Service weeks”. I’m pretty sure on the road to fascism, this is a rest stop.

General Electric Pursues Pot of Government Stimulus Gold

BY ELIZABETH WILLIAMSON AND PAUL GLADER

The financial crisis hasn’t been kind to General Electric Co. Its stock has lost almost half its value, the government has stepped in to prop up its enormous financial arm, and sales have slumped in core industrial businesses.

But Chief Executive Jeffrey Immelt now has his eye on a huge new pool of potential revenue: Uncle Sam’s stimulus dollars. Mr. Immelt, a registered Republican, quips about the shift in thinking in the nation’s corner offices: “We’re all Democrats now.”

GE has high hopes for the strategy. It says that over the next three years or so it could bring in …

via General Electric Pursues Pot of Government Stimulus Gold – WSJ.com.

As part of the health care reform bill, house Democrats put a new surtax into the bill of 5.4%. This is going to increase the effective capital gains rate by 69%. Capital gains is the tax term used by our government to explain investment income. For example, if you buy a stock at $5 and sell it at $10, you have a capital gain of $5. Now, capital gains also counts real estate investments, and Democrats were talking about repealing the owner occuppied housing exeption in the last election. So potentially, this could effect every American if Democrats get their way in the long run. As we know, anytime government wants more money they just seek out profitable sectors of our economy and decide to tax it. If most American’s have their saving sitting in their houses, surely you will see government eventually targeting that for more revenue.

That surtax takes effect on January 1, 2011, or the day the Bush tax rates of 2001 and 2003 expire. Today’s capital gains tax rate of 15% would bounce back to 20% because of the Bush repeal and then to 25.4% with the surtax. That’s a 69% increase, overnight. The last time investors were hit with anything comparable was 1986, when the capital gains rate jumped to 28% from 20%, a 40% increase, as part of the Reagan tax reform that lowered income tax rates.

The 1986 experience was not a happy one. Tax revenues from capital gains surged before the increase took effect in 1987, as investors moved to cash in at the lower rate. Revenues then plummeted. Total realized capital gains didn’t again reach their 1985 level of $172 billion until 1996. By 1992, the federal government was barely getting more in revenue ($29 billion) at the 28% rate than it did in 1985 ($26.5 billion) at the 20% rate.

Rate reductions, as in 2003 when Republicans cut the rate to 15% from 20%, have typically had the opposite effect. Treasury receipts from capital gains climbed to an estimated $117.8 billion in 2006 from $49 billion in 2002.

via Health-Care Surtax Applies to Capital Gains – WSJ.com.

Ok, so how is this going to effect the stock market? It will definitely hinder the stock market growth. If you are buying and selling stocks, your return will be decreased, which means you are less likely to take the risk. If less people are willing to take the risk, there will be less capital to fund businesses. On top of that, businesses, especially small businessses, have capital gains as well. If their capital gains is taxed more, they are less likely to invest in expanding their business because the investments now become more risky. Businesses look at after tax profits. As the article says, capital gains revenue to the government actually went down after increases in the rate. That means there was less investing and less turner of investment. Capital was held up in the system instead of flowing through the system.

Government is  the land of idiocy. They think we live in a static world where they can say, hey look at all that money. Let’s take some, and for some reason people are going to just say “Oh ok George, here you go.” Reality is much different. People’s behavior changes, and the government does harm to all of us. This increase will hinder our economy, and worst yet, it will destroy more jobs.

The Federal Reserve continues to throw gas on the fire claiming it can pull the gas back out if the fire gets out of control. Good luck.

Rand Paul and Peter Schiff respond to the erroneous claim that inflation is not a problem and that we should really be concerned about deflation. Also, Sean Ryan, a liberty activist from Boston, talks about his confrontations with Barney Frank and the president of the Cleveland Federal Reserve Bank.

The Federal Reserve has increased the monetary base to an unprecedented level. If that money works its way through the economy, we will see inflation. Bernanke claims that the Fed can reduce the money supply if necessary, but Rand Paul suspects that if stagflation occurs (high inflation plus a slow economy), the Fed will not be willing to reduce the money supply.

At the root of the problem is the fact that the Federal Reserve claims to control inflation, when it is really the vehicle for inflation.

via Confronting the Myth of Deflation | Wendy Macy’s Blog.

The writing is already on the wall. Government is poised to take over health care. The next logical step in controlling the cost of this “public service” will be controlling your eating habits. While I believe that people should pay for their eating habits via increased insurance premiums, I do not believe the government should be telling people what to eat, trying to change the way people eat, or getting involved in people’s eating habits what-so-ever.

Instead of hoping that individuals can muster the self-discipline on their own to avoid processed foods, fast food and days without physical exercise, the idea is that governments must actively work to change environments and reduce the menu of harmful options available in everyday life.

As a result, hundreds of towns in Europe and elsewhere have adopted a version of this strategy, aimed particularly at preventing children from becoming overweight and obese. They hired dietitians to counsel children and their families in schools, organized walk-to-school days, hired sports educators and built new sporting facilities. The U.S. government, meanwhile, is increasing its funding for cities and towns to pursue so-called community-based obesity prevention, in an effort to gather data about which kinds of tactics work best.

“People are finally acknowledging that the obesity problem is so pervasive that it isn’t just because people are making bad choices,” says Laura Kettel Khan, an obesity expert at the U.S. Centers for Disease Control and Prevention, which makes grants to states for community obesity-prevention programs.

via New Obesity-Fighting Programs Enlist Entire Towns – WSJ.com.

The free market has a way of dealing with obesity via health insurance premiums. It also would deal with it, if the government would stay out of the free market. The government encourages bad eating habits. It does this by promoting the idea that no one should pay increased insurance costs because of pre-existing conditions, obesity or any other higher risk factor. Once government controls health care, there will be no penalty what-so-ever for bad habits.

Also, the government subsidizes corn more than any other crop which is used in most fattening foods to the tune of almost $10 billion a year. Because corn is so cheap, things like high fructose corn sryup have been developed to make food cheaper. Corn is also used to feed most live stock, which makes live stock cheaper as well. This is why fast food is so cheap. If you remove the government subsidies, corn prices will go up. With corn prices, the cost of some of the worst foods will also increase, which would result in less consumption of those foods.

We are watching the same old sitcom. Government side effects cause or contribute to our societal ills, and the government inserts itself to be our saviors willing to take our freedoms in order to fix our problems. Unfortunately, the people are all too willing to take the government solution.

Bob Murphy had a great post,  Free Advice: “The Money That Is Sold Abroad Is You!”, that reiterates my post on selling our kids into slavery. This video is a lot more dramatic though. I’m jealous.

As usual, our government finds it wise to punish good behavior. If you are a small growing business, you better not hire anyone once payroll reaches $499,999. Once you cross over that line, you are in the cross hairs of government regulators who decide how you must treat your employees. If you don’t do what they say, you will pay more taxes.

The House bill mandates that employers with payrolls above $500,000 must contribute — for each full-time employee — 72.5% of the premium cost for single coverage and 65% of the premium cost for family coverage. The penalty for failing to do so is a 2%-to-6% tax on employers with payrolls between $500,000 and $750,000 and an 8% tax for employers with payrolls above $750,000.

via Small Business Crunches Numbers – WSJ.com.

So how does this promote job growth? Business aren’t in the business of charity. If they must spend more on health care or even worse send money to Washington, they are not going to have that money to grow and to create jobs. Those employees will get less pay, because businesses figure out the overall cost of employees. If they budget X for a certain position, the person will get X minus health care, minus taxes, minus social security, minus unemployment insurance, minus workers comp, minus other benefits, and minus any other business cost associated with that employee.

If an employee takes care of themselves and their employer didn’t pay for their health insurance, they would have more money in their pocket. The employer would be able to pay more for the position without the extra costs.  Shopping for themselves, the employee would get better rates and maybe buy a low premium, high deductible insurance plan. This would increase their income substantially. Because businesses are forced into buying health insurance for all regardless to health conditions of each individual, their plans are more expensive and eats more money out of the healthy worker’s pocket. This lowers the standard of living for all workers, and is more punishment for doing the right things.