Put that fire out!

Metaphorical fire, that is.

Harvard economist Martin Feldstein sees the forest for the trees in the housing debacle. In the NYT he states:

I cannot agree with those who say we should just let house prices continue to fall until they stop by themselves. Although some forest fires are allowed to burn out naturally, no one lets those fires continue to burn when they threaten residential neighborhoods. The fall in house prices is not just a decline in wealth but a decline that depresses consumer spending, making the economy weaker and the loss of jobs much greater. We all have a stake in preventing that.

And his prescription? Taxpayers shoring up homeowners bailing on their mortgages. You know, more of the same:

But for political reasons, both the Obama administration and Republican leaders in Congress have resisted the only real solution: permanently reducing the mortgage debt hanging over America. The resistance is understandable. Voters don’t want their tax dollars used to help some homeowners who could afford to pay their mortgages but choose not to because they can default instead, and simply walk away. And voters don’t want to provide any more help to the banks that made loans that have gone sour.

The track record of government intervention in the housing market ain’t so hot. But what do I know, I’m not a Harvard economist. The problem, sir, is the lack of taxpayer money to do this. The money would again be pulled out of the magic Treasury hat and would do us more harm in the long run, shoring up bad money with printed-out-of-thin-air. And as soon as that government program expired, as all government programs do, then the housing market would end up in the same boat. Until boatloads of people who didn’t somehow qualify started claiming to be part of the 99% and demanding their fair share.

Here’s a thought: if the beneficient government program were to never end–everyone would be rescued from their mortgage–then why doesn’t the government just print even more money and buy all the houses across the land? If the government owned it all, no one could be evicted, right? No one would lose a home to foreclosure? And then people could spend freely on their wants rather than needs: Iphone4s, organic salmon. Paradise.

Just sayin’. But what do I know, I’m not a Harvard economist.



Welfare dead-end

In Greece, the sky is falling:

“No one warned us,” she said. “I have no hope, not for myself, not for my children, and I am only 50.” But she said some things still make her laugh. “I can’t get it into my mind that my life is such a mess,” she said. “It’s a joke.”

When you’re raised to believe the government provides everything, it’s disastrous to realize that a government cannot.

Beyond the public-sector wage cuts, in recent months the government has also imposed a “solidarity tax” ranging from 1 to 4 percent of income on all workers and an additional tax on self-employed workers, who make up the bulk of the economy. It has also raised its value-added taxon many goods and services, including food, to 23 percent from 13 percent.

The economy is flagging, and it is not uncommon for even private-sector workers to see pay cuts of 30 percent or more, sometimes in exchange for a reduction in working hours.

The tax hike most bothersome to Greeks is the new property tax.

Most worrisome, the headline in the NYT: Worried Greeks Fear Collapse of Middle Class Welfare State

Don’t liberals get a clue from this? It’s not sustainable. Never has been. Never will be. Mark Steyn:

Greece is reported to be within weeks if not days of default. There are two likely outcomes to this scenario: 1) Greece will default. 2) Germany and the Eurocrats will decide that default would be too embarrassing for the EU’s pretentions and will throw whatever sum of money is necessary into the great sucking maw of toxic ouzo to stave it off a while longer.

But Option Two doesn’t alter the underlying reality — that, if words have any meaning, Greece is insolvent, and given its rapidly aging population (100 grandparents have 42 grandchildren) is unlikely to be non-insolvent under any conceivable scenario, no matter how tightly German taxpayers are squeezed to pay for it. By the same measure, so are many other Western nations

We face the same fate if we cannot cut the size and scope of government and entitlements. Kinda wild, ain’t it, that we could follow Greece down the black hole of welfare? And we thought we weren’t a socialist nation. Guess we’ve spent like one, no?

H/t: Hot Air headlines

Linked by Pundette as a “Recommended Read.” Thanks!

Numbers (or: why the post office needs to close, now)

80, 53, 32: The labor costs as a percentage of expenses at the Post Office, UPS, and FedEx. Can you guess which one isn’t unionized?

The USPS will go under this winter sans a bailout. What no one mentions: it has operated under a taxpayer bailout forever. A private business could never run like this. Why?

the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

$5.5 billion. That’s not the end of the red ink: $9.2 billion for the year.

Can you hear it now? The Post Office is closing! The Post Office is closing! Never let a crisis go to waste! AJ Strata says privatize. I’m inclined to agree, especially after this number: $4.3 million, or the amount which the Post Office pays employees to sit around and do nothing. Government work: somebody’s gotta not do it, right? At least the number shrank, right?

Why hasn’t Saturday delivery been eliminated yet? Why haven’t extraneous post offices been closed? Why are employees paid to do nothing?!

I loathe going to our local Post Office. Wait an eternity to deal with a snarling employee who acts as if he’s doing me a favor. One woman has fingernails so long (the curling kind) that she cannot type. Only a unionized gal could get away with it. I discovered a business–a real one, mind you–a short walk away where I can send packages via regular mail, UPS or FedEx. I’m presented with a cost comparison! There’s a small coloring table for kids while parents wait! All all the addresses to which I’ve sent packages are saved, so if in the event I forget to bring it on a mad dash to mail a birthday present–voila!–no worries. This is the magic of the private sector.


There’s nothing left to say after bumping around in SoCal on terribly patched freeways paid for with some of the highest taxes in the nation. But the unions still get their dues and illegals all have free healthcare or something, so who cares that the endless stretches of bumpy highway remind me of recovering socialist countries in Europe in the 80s. Dude.

Dude: Bachmann overtakes Romney in Iowa polling. No wonder T-Paw’s gettin’ nasty, eh?

Dude: Sarah Palin says she can win. But she’s not the “only” one who can.

Dude: Go hit Stacy’s tip jar. He needs it.

Dude: Boehner actually does have cojones. Hope he keeps ’em.

Dude: the government intentionally sold guns to Mexican drug lords and criminals to further the claim that our 2nd Amendment right to bear arms is the “real problem” on the border. Using stimulus funds.

Dude: Obama owns the War in Afghanistan. How surprising our friends in the mainstream media haven’t reminded us of the fact daily, no?

UPdate: Linked as a Featured Blog by Pundette. Thanks!

Shared burden


U.S. state and local governments will need to raise taxes by $1,398 per household every year for the next 30 years if they are to fully fund their pension systems, a study released on Wednesday said.

The study, co-authored by Joshua Rauh of Northwestern University and Robert Novy-Marx of the University of Rochester, both of whom are finance professors, argues that states will have to cut services or raise taxes to make up funding gaps if promises made to municipal employees are to be honored.

Pension funding in U.S. cities and states has deteriorated in the wake of the 2007-2009 economic recession as investment earnings dropped, and some states, such as New Jersey and Illinois, skipped or reduced required payments.

This is just to fund current retirees. How much more to cover current and future employees? And why should we all be on the hook for states like Illinois, where liberals have squandered money and spent what they don’t have for generations?  Aha:

New Jersey will need to increase its revenue by the largest margin, requiring $2,475 more from each household per year, according to the study.

The contribution requirements may be higher for states that already have a significant amount of debt on their books and “cannot tap municipal bond markets as easily for large contributions,” the report said.

Hello, California. This debt debacle won’t end any time soon, especially with such a dismal employment market or the current administration in office.

Inviting “War through Weakness”

Peter Ferrera examines the whys of the economic anti-recovery and paints a frightening picture of what awaits if Obama isn’t defeated in ’12. It isn’t just economic disaster.

First, reality:

In every other recession since the Great Depression, the overall trajectory of the economy has been dramatically better after two years. But not this time. Since the Great Depression, recessions have lasted an average of 10 months, with the longest previously being 16 months. Yet, in May, 41 monthsafter the recession began, unemployment rose yet again, to 9.1%. America has now suffered the longest period with unemployment that high since the Great Depression.

The depression for African Americans continued, as unemployment among them rose again to 16.2%. Hispanics continued with unemployment at double digit depression levels as well, with unemployment among them also rising again to nearly 12%. For teenagers, the depression level unemployment persisted at 24.2%; for black teenagers, over 40%. The U6 unemployment rate, counting those marginally attached to the labor force who have given up looking in the Obama “recovery,” and those stuck in part time unemployment for economic reasons, continued at nearly 16%.

No wonder Obama needed those Pigford payouts, eh?

What’s ahead if Obama’s course of Bush tax cuts expiration, the advent of the Obamacare taxes and current no-drill-by-regulation collide unchanged? Disaster, and not just economic:

That is bad enough for a puny, insignificant nation like Greece, where riots increasingly leave the government dysfunctional, with the EU likely to take over the country effectively. But what is the effect when that happens to the world’s supposed superpower? America financed World War II by running up our national debt to its all-time record as a percent of GDP (for now). But that won’t be possible when we have already run ourselves into national bankruptcy.

Our potential military enemies will be quite aware of this historic vulnerability of America. Just as Reagan brought us Peace through Strength, Obamanomics will be inviting War through Weakness. With a 2013 American economic collapse that will also disable the entire West, the world’s uncivilized rogues from Russia, to China, to North Korea, to the Middle East Islamists dreaming of renewed world conquest, will all be tempted probably beyond resistance and reason to strike. They don’t need even to attack the homeland to deal America a decisive defeat. They can just decimate our suddenly overwhelmed allies, from Israel to South Korea to Taiwan to our allies in the Middle East, let alone some even in Europe.

Read the rest.

No, we’re not out of touch

From the Denver Post:

After spirited debate Monday, Denver’s City Council voted 10-3 to tentatively approve a 6.6 percent raise for the next sitting council and every other elected official — an increase to be delayed for half of their four-year terms.

The city is facing a $100 million budget shortfall for the 2012 budget and has a structural budget problem that, if not addressed, could balloon into a $500 million deficit by 2030.

Many council members think the meager increase would not affect that problem and that denying a raise would be symbolic rather than practical.

Meager increase, eh?
Much like welfare recipients who will never willingly vote themselves out of free cheese, politicians suffer the same ill: when it’s someone else’s money, it’s so easy to vote yourself a raise!

“All military personnel will continue in normal duty status … [and] will serve without pay until such time as Congress makes appropriated funds available to compensate them for this period of service.”

So explains a Pentagon directive about the potential government shutdown. This is a shift from the last shutdown. Via the Army Times:

When the government was shut down in 1995, military personnel continued to report to work and were paid, but the planning guidance sent to the services and defense agencies says a shutdown this time will be different

What I find spectacular about the way the Army Times–which is just as liberal as the rest of the MSM–frames the argument.  Headline: If government shuts down, so would troop pay. But oh, there’s this:

Troops would miss a payday only if the shutdown continues through April 1.

How exactly would you know you’re working sans pay unless you miss an actual payday?

You wouldn’t.

Will it go on that long? Who knows, but even with the possibility of no paycheck for this household, I pray the Republicans have the cojones to see this through. Make significant and lasting cuts.

Exit question: will legislators receive their paychecks? Will the President? Better yet, will Michelle still have “essential” chefs and stylists at her fingertips while one-income military families struggle to buy food and make house payments should it come to that?

UPDATE: linked by Pundette. Thanks!

A 300-percent increase in foreclosures looming, or, as The Other McCain asks, “How Screwed Are We?”


I saw this last night via Instapundit who asked if this was the hope or the change.   The kicker:

So what will this mean when the last moratorium is lifted, the last show-me-the-note lawsuit gets thrown out of court, and the last loan modification has failed? Well by that time you’ll probably be able to buy property on a planet orbiting some nice warm star in Constellation Cygnus. But there could be roughly three times as many homes on the market as there are now. Lawler points to 1,445,000 completed foreclosures and short sales at the end of 2010, compared with 4,296,01 mortgages that are past due by 90 days or more.

Nothing like a sucker punch, especially if you’re the sucker.  According to the goons at the HuffPo, we’re the suckers if we’re still paying our mortgage:

Nearly 1 in every 4 U.S. homeowners with mortgages owe more on their home than it’s worth. Once a month, those 10.8 million are faced with a question that cuts to the core of the American Dream and offers a confusing collision between a deep-seated sense of personal obligation and a cold, simple business calculation: Should I pay my mortgage?

For decades, there was only one answer for most people: Of course I should keep paying, it’s the right thing to do. Besides, the argument went, a home is a great investment. Today, in the wake of the most seismic housing collapse in the nation’s history, that logic has increasingly been challenged by homeowners despondent about their lack of options.

Although researchersfind that some underwater borrowers who could continue paying their mortgages strategically default anyway, the vast majority continue to pay. Many homeowners, out of a combined sense of fear, shame, courage and morality, resist making what is otherwise a logical financial decision.

Emphasis mine.  So let’s do what we can do eliminate that “morality” so that every underwater dupe just walks away from his mortgage. 

Reminder: 11 percent of homes already sit empty.

What do the liberals socialists want?  Housing as a right

Because that free government apartment has worked out so well.

 Some promised RS McCain wisdom:

Consider, for example, the attempts to cushion the collapse of the housing bubble by trying to halt foreclosures or offer “assistance” to deadbeats who can’t make the payments on houses worth less than the mortgage value. […]

To adapt an old Marxian expression, we have a “reserve army” of unforeclosed deadbeats, who are on one hand a steady drain on the vitality of the financial sector but, on the other hand, a looming threat to the real-estate sector. Either the deadbeats are permitted to fall further and further behind on their mortgages (not good for the banks) or else the banks foreclose and all those homes are dumped onto an already glutted real-estate market.

So to review:

Over four million homes currently in default.

Over 18 million already empty.

One President who will add more government intervention to the fire and an army of minions who want to “Take Back the Land,” apparently from the rest of us.

Screwed, Mr. McCain, ain’t the word for it.

“The stunning decline” of Barry O

Sounds like a tv mini-series, doesn’t it?

UK Telegraph’s Washington correspondent Niles Gardiner gives his top-ten reasons the O Presidency fumbles perilously close to the edge of meltdown.  He notes the arrogance and extravagance on part of the out-of-touch Obami (#1), and the fact that the majority of Americans no longer trust the President to make the right decision for the country’s best interest (nearly 60%) (#2).  My favorite, though:

3. Obama fails to inspire

In contrast to the soaring rhetoric of his 2004 Convention speech in Boston which succeeded in impressing millions of television viewers at the time, America is no longer inspired by Barack Obama’s flat, monotonous and often dull presidential speeches and statements delivered via teleprompter. From his extraordinarily uninspiring Afghanistan speech at West Point to his flat State of the Union address, President Obama has failed to touch the heart of America. Even Jimmy Carter was more moving.

 Painful considering the rock-star-Greek-god-halo-from-on-high, right?

Obama has already inspired a rock-star like devotion that even leaves some Democratic supporters wary - will tonight be his undoing?

Where are the fawning masses now? Oh, unemployed and bitter.

 Cue a former Obama supporter and life-long Democrat who is now willing to “take a chance on something different.”  Hoo-rah, there’s real hope for us yet.

From the WSJ:

ALBION, Mich.—Michelle Rena Jones cheered when candidates Barack Obama and Joe Biden visited south-central Michigan in 2008. She supported Mr. Obama that November along with a slate of Democrats, including Mark Schauer in the 7th congressional district.

Ms. Jones is part of an unmeasured, agitated mass: unemployed Americans who don’t believe the Obama Administration and Congress have done enough to produce jobs. With elections coming up, their unease is especially troublesome for the Democrats, who control both chambers.

Job creation is one of the top issues among voters. In districts with high unemployment, that could spell trouble for a host of Democrats in tight congressional races. WSJ’s Neil Hickey reports.

 Now, the 40-year-old is rethinking her lifelong support for the party. She has been without steady work for two years, lost her home and car and began receiving cash assistance from the state for the first time. This year, she says, “I’m willing to take a chance on something different.” Another possibility, she says, is that she won’t vote at all.

So the Obami strategy–high unemployment creates masses of folks dependent upon government cheese and handouts–has backfired.

Gardiner again:

There is a distinctly Titanic-like feel to the Obama presidency and it’s not hard to see why. The most left-wing president in modern American history has tried to force a highly interventionist, government-driven agenda that runs counter to the principles of free enterprise, individual freedom, and limited government that have made the United States the greatest power in the world, and the freest nation on earth.

Exactly.  Read the rest.

Go watch the interview with Michelle Rena Jones at Hot Air