The Daily Brief

Labor unions are pulling out the stops to get John Kerry elected:

The AFL-CIO and its two largest unions are spending $157 million alone on labor get-out-the-vote efforts. That figure doesn’t include funds from the federation’s other 58 unions or the multiple labor-backed, partisan groups known as 527s because of the tax code section they fall under.

With this looking like, by far, the most costly Presidential election in history, it should be obvious to all that McCain-Feingold is a joke.

Is there any more consummate song than The Ventures’ theme from Hawaii Five-O? The only other contenders I can think of are Wipeout, or Sleepwalk, which is arguably a jazz number.

I thought I caught John Kerry in another lie today, when I heard him claiming that George Bush’s actions in Iraq have added “about $10” to the price of a barrel of oil. On checking my facts, I find Cambridge Energy Research Associates (CERA) estimates the “security premium” to be between $6 and $10 per barrel. Although I have gotten other estimates closer to $5/bl.

However, Kerry has stated in the past that, where he president, he would also have deposed Saddam, just as Bush has. The only difference being that he would illicit more “international support”. What I would like to know is, even if Kerry could have managed to gain the cooperation of France and Russia, how would that have lessened the terrorist threat to oil supplies. Indeed, perhaps Russia’s involvement would put their own oil production capability at greater jeopardy? After all, we must remember that they have a substantial Islamic terrorism problem of their own.

Surely, every politician takes great license with reality when on the campaign trail. But, thus far, I have yet to hear ANYTHING from Kerry that wasn’t totally from through the looking glass.

triskaidekaphobia \tris-ky-dek-uh-FOH-bee-uh\, noun:
a morbid fear of the number 13 or the date Friday the 13th

In this month’s issue of Forbes Steve Forbes takes Alan Greenspan’s management of the Fed to task:

Alas, There’s No Way We’ll Get the Best Way

Alan Greenspan recently declared that the Federal Reserve could raise interest rates rapidly if inflation really heated up; otherwise, rates will rise according to his assessment of the state of the economy. The time has come to ask a fundamental question: Is raising the nominal cost of money truly the best way to fight inflation?

Sadly, the Fed, Fed watchers and economic policy makers won’t even think to raise this question. Too bad. The American and global economies and the financial markets would benefit enormously if the Fed fundamentally changed its modus operandi and adopted an approach that would really give us monetary stability. Instead, we’re going to continue to chart an unsteady course that will keep uncertainties festering, which will, in turn, inhibit us from going full-speed ahead.

Thanks to Milton Friedman, most people now acknowledge that inflation is a monetary phenomenon, i.e., it results from the printing of too much money. Determining the right amount of money for the economy is the trick. The supply of money is only half the equation; the other half is demand. If animal spirits are weak because of excessive taxation or other factors, a low supply of money can still be inflationary because demand could be even weaker. Conversely, a healthy, robust economy will increase the demand for credit, and meeting that demand will not be inflationary.

The way the Fed handles money supply is to the economy what a carburetor is to an automobile: Insufficient gasoline stalls the engine, too much floods it, and the right amount makes the engine purr. At the moment, our central bank uses no reliable fuel gauge. We’re on a Greenspan standard. However the Sun King chairman sees the world is what determines the stance of the Federal Reserve. Rare is the individual who becomes a high Fed official or governor without Alan’s assent. As far as one can fathom, His Majesty still seems to think economic growth determines the rate of inflation. He hasn’t read his Friedman. In Alan’s mind the way to control inflation is to fine-tune economic activity. If the economy grows around 3% a year, all will be well. Thus, raising interest rates makes sense–the higher cost of money will slow down the economy, preventing it from going into overdrive.

But economic activity doesn’t determine inflation–price indexes, yes, but not currency debasement, i.e., inflation. The chairman and too many economists confuse price changes that are triggered by a debasement of the currency with price changes that come about from normal activities in the marketplace. Wal-Mart is always figuring out how to charge less for its products: That’s not deflation, it’s productivity. A more vigorous magazine and newspaper industry may cause paper prices to rise (assuming there’s no additional capacity coming online). But that’s not inflation; it’s the interplay between supply and demand. Price changesare good because they signal what’s dear and what’s excessive.

There’s a simpler, better way for the Fed to conduct its monetary operations. Commodity prices as a whole–gold, in particular–will tell you instantly if the central bank is doing its job right. For a variety of reasons gold is to monetary policy what the North Star is to determining location. Gold’s intrinsic value hardly changes. Its price fluctuation in dollars reflects not a change in the value of gold but a change in the real worth of the greenback. This is absolutely basic.

Understand that, and Mr. Greenspan’s job becomes infinitely simpler, and uncertainties virtually vanish. Take the 10- or 12-year average price of the yellow metal–anywhere from $330 to $340 an ounce–and use that as your benchmark. (For safety’s sake, better use $350 to $360 an ounce.) If gold goes above that range, then the Fed should pull dollars out of the economy through its open-market operations. If gold falls below that range, the Fed should pump more dollars in. Day to day, the Fed should print or extinguish dollars to keep the price of gold steady in dollar terms. If the economy is robust, it will create more dollars; if it is weak, fewer dollars will be created. The dollar should be similar to any fixed measure of value or volume–there are 12 inches in a foot, 60 minutes in an hour, 16 ounces in a pound, and so on.

Short-term interest rates? Under this model the Fed can ignore them. Let ’em float in the marketplace. The discount rate can be tied to T-bills.

There’s not a proverbial snowball’s chance in hell that such a direct, sensible course will be adopted. And though no one would want a commercial airline pilot to fly without instruments, that’s exactly how the Fed is operating. Thus, investors must always keep their seat belts fastened and hope the Fed doesn’t get into an accident–as it has so often in the past and may be doing again.

While I personally think the gold standard is archaic, given today’s technology, the idea that monitary policy should follow the economy, not lead it, is particularly wise.

Let me say here that, while I grant Bill O’Reilly his measure of respect, I am no particular fan of his. But Monday night, he interviews the lying weasel Paul Krugman ; this should be interesting.

During the concurrent visits of President Bush and Senator Kerry to Davenport Iowa, some clever folks perpetrated three bank robberies. Upon learning of this, Kerry’s comment was that he knew both he and the President “have airtight alibis.”

Well, from Jay Leno, this might have been funny. But from the candidate himself: NOT.

Reader Kayse sent me this:

An East Coast Ivy League atheist professor was teaching a university class and he told the class that he was going to prove that there is no God.

He said, “God, if you are real, then I want you to knock me off this platform. I’ll give you 15 minutes!”

Ten minutes went by all the time taunting God, “Here I am, God. I’m still waiting.”

As the last minute approached he smugly smiled. A young US. Marine, just released from active duty and newly registered in the class, walked up to the professor, hit him full force on the chin sending him flying from his platform and crashing to the floor.

The professor struggled up, badly shaken and yelled, “What’s the matter with you? Why did you do that?”

The Marine replied, “God was busy. He sent The Marines.”

Life is good. 🙂

It’s almost amazing to me the sea change in economic thought in my lifetime. In 1969, Richard Nixon said “We are all Keynesians now.” In fact, in 1977, my Econ 101 professor cautioned us that it was the only economic theory he was allowed to teach “but other theories exist.” Today Keynes has been almost totally discredited, at least in academic circles – if not political. His warped theories have been supplanted largely by the “Chicago School” of economic thought, championed by (among others) Fed Chairman Alan Greenspan, and Milton Friedman. And, to a lesser degree, the “Austrian School”, of Ludwig Von Mises and Fredrich Hayek (as well as your author), which differs from the Chicago School principally on matters of monetarism.

The tide was turning in the mid-seventies, just as I was reaching adulthood. Milton Friedman won the Nobel Prize in 1976. Last Saturday, he turned 92. It has been said that no other economist did more to further the cause of liberty in the 20th century. This is certainly so by his acclaim, if not strictly by his body of work. But it is only fitting that he be honored. Pepperdine University Economics Professor Gary M. Galles cites Friedman, in his own words, here:

Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involve the use of coercion…The other is voluntary cooperation of individuals.

The Invisible Hand:

The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system.

The possibility of co-ordination through voluntary co-operation rests on the elementary…proposition that both parties to an economic transaction benefit from it…Exchange can therefore bring about coordination without coercion. A working model of a society organized through voluntary exchange is the free private enterprise exchange economy.

The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to…help one another.

The Visible Hand:

Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens against crimes against themselves or their property.

When government…tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of innovation, and loss of freedom. Government should be a referee, not an active player.

…governmental measures taken with good intentions and for good purposes often, if not typically, go astray and do harm instead of good…There are many causes for the loss of freedom, but surely a major cause has been the growth of government…

The most unresolved problem of the day is precisely the problem that concerned the founders of this nation-how to limit the scope and power of government…Tyranny, restrictions on human freedom, come primarily from governmental restrictions that we ourselves have set up.

Problems with the Visible Hand:

The government solution to a problem is usually as bad as the problem.

Wherever the state undertakes to control in detail the economic activities of its citizens…[they] have little power to control their own destiny.

Most of the energy of political work is devoted to correcting the effects of mismanagement of government.
Many people want the government to protect the consumer. A much more urgent problem is to protect the consumer from the government.

The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

Only government can take perfectly good paper, cover it with perfectly good ink, and make the combination worthless.

If you put the federal government in charge of the Sahara desert, in 5 years there would be a shortage of sand.

On the One Hand; On the Other:

The greatest advances of civilization…have never come from centralized government.

Anything that government can do, private enterprise can do for half the cost.

If you spend your own money on yourself, you are very concerned about how much is spent and how it is spent… However, if you spend someone else’s money on someone else, you are not very concerned about how much is spent, or how it is spent.

The United States has continued to progress…the product of the initiative and drive of individuals co-operating through the free market. Government measures have hampered, not helped, this development. We have been able to afford and surmount these measures only because of the extraordinary fecundity of the market. The invisible hand has been more potent for progress than the visible hand for retrogression.

For all the hype about fuel cells, the reality of the matter is that the ‘hydrogen economy’ is a LONG way off. But hybrids are here now, And, a recent study headed up by The Argonne National Laboratory, as reported on here by Car and Driver’s Patrick Bedard, shows that, it total ‘well-to-road’ cost. diesel-hybrids are the cheapest.

Of course, the soot produced by diesels is pretty nasty. But never fear: ultra-clean synthetic diesel – refined from natural gas, is right on the horizon.

BTW: If anyone can send me a link to that report, I’d love to look at it.

A TLC FJ40, that is. I wonder if one of these motors will fit under the hood?

The Michigan State Supreme Court has made a landmark reform of their state’s eminent domain law:

Reversing more than two decades of land-use law, the Michigan Supreme Court late Friday overturned its own landmark 1981 Poletown decision and sharply restricted governments such as Detroit and Wayne County from seizing private land to give to other private users.

The unanimous decision is a decisive victory for property owners who object to the government seizing their land, only to give it to another private owner to build stadiums, theaters, factories, housing subdivisions and other economic development projects the government deems worthwhile.

Detroit and other municipalities have used the Poletown standard for years to justify land seizures as a way to revitalize.

In the decision, the court rejected Wayne County’s attempt to seize private land south of Metro Airport for its proposed Pinnacle Aeropark high-technology park. The Pinnacle project, announced in 1999, is geared to making Wayne County a hub of international high-tech development linked to the airport.

[…]

In the original Poletown ruling, the court allowed the City of Detroit to seize private homes and businesses on the east side so General Motors Corp. could build an auto factory. The bitterly contested seizures and the court’s ruling in favor of the city had national implications and led to similar rulings elsewhere.

Thousands of homes and dozens of churches and private businesses were bulldozed in Detroit’s former Poletown neighborhood to make way for the GM plant.

Of 1,300 acres needed for Wayne County’s Pinnacle project, property owners representing about 2 percent of the land have refused to sell. They have resisted, in part because much of the project would later be turned over to private developers and other entities.

In Friday’s decision, known as Wayne County v. Hathcock after one of the landowners in the case, the court ruled that the sweeping powers to seize private land granted in the 1981 Poletown case violated the state’s 1963 constitution.

“The county is without constitutional authority to condemn the properties,” the court’s opinion read. All seven justices voted to overturn Poletown, although three dissented over some technical aspects that do not affect the main ruling.

Justice Robert Young, who wrote the lead opinion, called the 1981 case allowing Detroit’s Poletown neighborhood to be cleared for a GM plant a “radical departure from fundamental constitutional principles.”

“We overrule Poletown,” Young wrote, “in order to vindicate our constitution, protect the people’s property rights and preserve the legitimacy of the judicial branch as the expositor, not creator, of fundamental law.”

While this applies only to the state of Michigan, I intend to study it, with the intention of introducing an inititive to stop redevelopment seixures for private use. That has resulted in thousands of poor or lower middle-class homeowners having to wurrender their propery, with less than equitable compensation, only to see it then turned over to wealthy developers at subsidized prices.

hat tip: Instapundit

Tiny electric car builder ZAP will be importing the also tiny, gasoline powered, Smart fortwo to the United States.

Wow, I can hardly believe it’s an election year! I simply can’t see Kerry not trying to make political hay over this in the farm belt:

GENEVA, July 30 – The United States yielded to pressure from developing countries on Friday and agreed to make a 20 percent cut in some of the $19 billion in subsidies it pays to American farmers each year, as members of the World Trade Organization met round the clock here to win approval for a new deal governing world trade.

Now I find we are making them our slaves. 🙂

I’ve been trying to find a video link. Minnie is really quite amazing, with an extensive list of behaviors she can perform, and able to lean new ones in only a couple of hours. We really should reform our exotic pet laws here in California to allow helper monkeys in with less red tape.

Ryan at Tasty Manatees has his nominations up for Worst of the Web:

Welcome to Tasty Manatees’ Worst of the Web, a collection of the absolute worst blogs the Internet has to offer. These blogs were nominated by readers like you through comments and email according to some simple nomination criteria providing points for certain “qualities”:

1. Inanity– For those sites packed with unending and uninteresting personal trivia. Extra points for anyone who talks about their sick cat.

2. Bad Design. If your link list is hidden in your source code and your page title can’t display because your picture of teddy bears and balloons blocks everything but one short post, you may be getting some points under this category. By the way, I thinkte is my nominee.

3. Stupidity. This is a delicate subject, I better be clear. I’m not talking about whether we agree with the content or not, simply whether its posting clearly demonstrates the website owner’s stupidity. For example, though I’m fairly certain that Atrios has the i.q. of a tire iron, the posts on his site are merely indicative of the thoughts on the hard left, not a unique expression of stupidity. No, for stupidity, we’re talking about stuff like this

4. Pretentiousness– For those who get in over their heads and don’t even realize it. Poseur poetry by high school kids gets extra points under this category.

5. Disturbingness– Yes, I’m talking about stuff like this. (I’m pretty sure that one was a joke, but you get the picture).

6. Other– You’ll know it when you see it.

Check out his nominees.

In a development sure to effect the lawsuits against it, a recent Vanderbilt University study has found that American Honda has charged higher auto loan interest rates to blacks. The average overcharge: $410 over the life of the loan.

Now, they’re diving.

Despite his respectable showing in a statewide poll, the California League of Women Voters is still excluding Libertarian Party senatorial candidate James P. Gray from it’s televised debate August 10th.

Update: The CLoWV is claiming that Judge Gray’s poll isn’t valid. For more, go here.

For my money, why not include a firebrand such as Judge Gray? Perhaps we will get some original discourse, and then perhaps people will tune-in? As we have seen with the major network’s large-scale rejection of most of the Democratic National Convention, the people are bored with the same yadda-yadda-yadda.

Organizers of the Democratic National Convention have forced Al-Jazeera to remove their banner:

Americans tuning into television coverage of this week’s Democratic convention will see signs for media outlets like CNN, ABC, NBC and CBS, but not Al-Jazeera after the Arab satellite channel was asked to remove its banner near the podium.

The 24-hour Qatar-based news outlet won over millions of Arab viewers before and during the US-led war on Afghanistan in 2001 after showing exclusive footage of al-Qaeda leader Osama bin Laden.

During this week’s convention in Boston, where Senator John Kerry will be officially nominated to run for the White House, the TV channel had erected a colourful $US30,000 ($A42,411) banner that would have been seen by millions of television viewers as part of the convention backdrop.

But it was ordered to remove the sign by convention organisers, who said the decision was made for aesthetic reasons.

Not mentioned in most reports on Planned Parenthood’s “I had an abortion” T-Shirts is that it says in fine print below “and I’m proud of it.” I ask, is this really something a person should be ‘proud’ of? I mean should dentists be selling t-shirts saying “I had a root canal, and I’m proud of it”?

Verizon will be introducing fiber optic access in Huntington Beach. I wonder when they will get to Westminster?

Note that socialist propagandist Michael Moore will be on Fox News Bill O’Reilly show tomorrow.

On reading many letters to the editor on the subject of ‘gay marriage’, I sometimes think I am transported into some sort of bizarro world.

But then I think back to my many debates with my European friends, who commonly believe that governments are formed among men to create their rights.

This is not our tradition in America. Here, we believe out rights are intrinsic. And we form governments, surrendering to them certain of those rights, in order to secure the others, which are innumerable.

Among those is the right of contract, of which marriage is one. It is simply not the purview of government, as per our American tradition, to define the nature of the marriage contract. It is only the responsibility of government to enforce that contract once it is entered into.

I was amazed at tonight’s episode of The Casino on Fox. First, the owners made moralistic judgements only after some high roller hit it big at the tables (a double-fault; any seasoned gambler knows that, in the end, the house always wins). Second was the other other girl’s questioning of the ‘legal prostitute’ “what will you tell your children? That works on this assumed context we have in this nation that things like prostitution are, unquestionably, bad. An examination of sexual world history will shed great doubt on that assumption.

Some might think that the biggest career boost to come from the Democratic National Convention in Boston this week would be for John Kerry, John Edwards, or perhaps Hillary Clinton. But that blessing may indeed go to Fox News Sunday Power Player of the Week, radio talk show host Howie Carr (free registration required):

There’s a reason Massachusetts keeps electing Republican governors

[…]

University of Massachusetts-Boston political scientist Paul Watanabe offers some conventional reasons for the GOP’s success in governors’ races: The Republicans have fielded much better candidates, and independents are increasingly influential and open to voting for the GOP.

But that doesn’t fully explain why Democrats make up 85 percent of the state legislature but no Democrat can get elected to the top state job. The Howie Carr theory does. Essentially, it holds that while Massachusetts may be passionately liberal, many Massachusettsans realize that hasn’t yielded a state government of principled liberalism. Instead, state lawmakers are more intent on helping key allies – teachers unions, public employees, advocates of gay rights, etc. – than on addressing such basic quality-of-life issues as the economy and crime. A Republican governor means there’s at least one powerful check on this warped liberalism.

Carr, a popular radio-talk show host and local columnist, has made his name hammering on this theme. “Around here, GOP governors aren’t supposed to be CEOs – they’re supposed to be wardens. No one expects anything of the legislature except rampant thievery and nepotism,” he joked during the last gubernatorial campaign.