Category: The Economy

The Venezuelan Implosion

Holy shit:

Venezuela is about to earn another ignominious distinction.
Long home to the world’s highest inflation rate, the country now is set to become the site of the 57th hyperinflation event in modern recorded history, says Steve Hanke, professor of applied economics at Johns Hopkins University. While the feat may be little more than a formality in a country where Hanke calculates annual cost-of-living increases already run at 772 percent, it’s the latest sign a debt default may be closer than traders previously thought.
With Venezuela’s currency losing 32 percent of its value in the past month in the black market, according to dolartoday.com, and falling oil prices throttling the cash-starved nation’s biggest revenue source, the government may run out of money to pay its debts by year-end, according to Societe Generale SA. Derivatives traders have ratcheted up the probability of a default within one year to 63 percent, compared with 33 percent just two months ago.

“They’re very close to hyperinflation,” Hanke, who wrote a book on hyperinflation in Zimbabwe, said by phone from Baltimore. “When you have a domestic currency that is withering on the vine, it becomes more problematic servicing foreign debt.”

The currency fell so fast on Monday that it implied a monthly inflation rate of 53.98 percent. A full month of days on which the implied monthly rate was faster than 50 percent would meet his definition for hyperinflation.

This is in addition to massive shortages of basic goods, soaring crime, rapidly rising unemployment. So much for Chavismo.

Now this is the point where some well-meaning fool will tell me it’s all America’s fault or something. But the thing is, this economic collapse was predicted by everyone who knew what they were talking about. McCardle:

For about a decade, some sectors of the left hoped that Hugo Chavez represented an alternative to the neoliberal consensus on economic policy. Every time I wrote that Chavez was in fact direly mismanaging the economy, diverting investment funds that were needed to maintain oil output into social spending, I knew that I could look forward to receiving angry e-mails and comments accusing me of trying to sabotage his achievements for the benefit of my corporatist paymaster.

The problem was that the money he was using was, essentially, the nation’s seed corn. Venezuelan crude oil is relatively expensive to extract and refine and required a high level of investment just to keep production level. As long as oil prices were booming, this policy wasn’t too costly because the increase offset production losses. But this suffered from the same acceleration problem that we discussed earlier: The more production fell, the more the country needed prices to rise to offset it.

A little over a decade ago, I had a long car ride with a woman who worked in the oil industry. She said basically the same thing: that Venezuela was sitting on a lake of oil but not investing their massive revenue in sustaining or growing production. High oil prices weren’t going to last forever (Peak Oil hysterics not withstanding). Her particular field was using geological data to more accurately find undersea reserves of oil and she knew production was going to come back up and prices would fall. This would doom Venezuela because their production wasn’t going to be able to keep up: they were entirely dependent on high prices. When oil crashed, so would their economy.

Chavez was riding an asset bubble and claiming it proved his genius. Maybe if Venzuela has used their revenues to develop a thriving private sector of the economy, they could have withstood this. But they didn’t and oil was all they had. So we’re finally into the end game for Hugo Chavez’s “nobel experiment”.

I would like to think that people would learn a thing or two from the smoking crater in Caracas. But they never do. In fact, right now they’re wondering why the hell China is imploding as well. After all, Thomas Friedman’s been writing about sixteen columns a week on how superior their system is to ours. People like me have been pointing out that China has huge problems with corruption, an aging population and an economy that, while growing, had picked all the low-hanging fruit. We’ve been pointing out that China’s “explosive growth” was a result of having been dirt poor in the first place (it’s much easier to grow 10% of nothing that 10% of everything). Eventually, that engine was going to run out of steam. But, no: Very Wise People kept insisting that China had a found an alternative to the free market.

Just like Venezuela had.

And just like Japan before that.

And the Soviet Union before that.

And Germany before that.

Boy. These new economic ideas never seem to work out, do they?

The Biggest Corporate Welfare

Scott Walker — supposed conservative — has become just the latest politician to dole out a few hundred million in corporate welfare:

Last year, two New York City hedge fund owners purchased the Milwaukee Bucks, a down-at-the-heels N.B.A. team. The new owners smiled, took a victory lap around this handsome lakeside city and laid down their terms.

We’ll keep the Bucks in Milwaukee, the owners said, if the public foots half the cost of a $500 million arena. (The owners spoke of their “moral obligation” to the city and pledged $100 million toward their arena, with the remainder coming from other private funds.) N.B.A. officials acted as muscle for the owners and warned that if Wisconsin did not cough up this money within a year’s time, the league would move the team to Las Vegas or Seattle.

These opening feints were right out of the professional sports owner handbook. From start to desultory end, Milwaukee offered a case study in all that is wrong with our arena-shakedown age.

Gov. Scott Walker signed a bill Wednesday to subsidize the arena, which could cost the public twice as much as originally projected. Echoing the owners’ arguments, the governor proclaimed that the arena, a practice complex and a promised “entertainment district” would spur a renaissance for downtown Milwaukee and attract tourists. Income taxes paid by the pro athletes, the governor said, would fill local coffers.

The governor is repeating the standard mantra of stadium extortionists everywhere. It is categorical nonsense. Twenty years of economic research has shown that the economic benefits of stadiums are somewhere between non-existent and slightly negative. Sports teams mostly affect how people spend their money, not if. It is true that that taxes paid by the athletes would pay for a stadium … in a century.

The ability of extremely rich men who own extremely successful business to extract hundreds of millions in public welfare from cash-strapped cities and states is baffling. The lack of benefits of stadium building has been known for years, but sports teams, including my Braves, are still able to work this scam to perfection.

In reality, the power should flow the other way. Sports teams benefit from being in big cities way more than the big cities benefit from having sports teams. Do you think the Yankees would be making hundreds of millions of dollars if they moved to Louisville? They still got a billion dollars in subsidies for their stadium. Would the Milwaukee Bucks, sans subsidies, make more money in Vegas or Seattle than they do in Milwaukee? I doubt it. Seattle just gave up a basketball team and Las Vegas has … um … a lot more than a sports team going for it.

The most recent baseball team that moved was the Montreal Expos. That move benefited the Expos way way more than it benefited Washington. They went from an empty stadium and minimal revenue to a full stadium and overflowing coffers. Sports teams should be begging to play in the big markets, not holding them for ransom.

There are two problems that underlay the subsidies to sports. The first is plain ordinary corruption. It’s not just sports stadiums; cities invest tens of millions into “big projects” that are going “stimulate the economy” and “revitalize downtown”. When I was growing up in Atlanta, we heard those same arguments dragged out for Underground Atlanta, World of Coca Cola and the Olympics. Yet, somehow, it didn’t work. The area around the Olympic Stadium (later Turner Field) was still a dump. Sports teams have an advantage in terms of visibility and the ability to give guaranteed luxury seats to powerful politicians. But fundamentally, this shakedown goes on every day. And sports teams have become very skilled in doling out cash to local community groups and working lobbyists so that they can ride that well-greased track.

The problem that is more specific to sports teams is a basic prisoner’s dilemma. Everyone knows that cities would be better off not caving into the demands of sports teams. But the cities and states are afraid of losing their teams to other cities and states that give in. They could say “no” but it only works if everyone else does too. What you would need is for state and city governments to sign onto a compact: no city or state will subsidize a sports stadium … ever.

That won’t happen, of course, because politicians love this. Scott Walker is far, far from the only politician doling out this particular brand of corporate welfare. The political class love it because they get to claim credit for keeping a sports team in town and building a huge stadium. They love it because it sounds good to say your going to stimulate the economy, even if the stimulus never happens (see Obama, Barack). They get wined and dined by rich team owners and corporate sponsors.

It’s a win-win. The only people who lose are the taxpayers and, really, who cares what those plebs think?

How Social Justice systems always play out

Chavez fooled enough people in his country to go along with the usual redistributive nonsense that SJW, capitalizing on the envy and greed of those that for whatever reason feel their existence justifies their needs, peddle to grab power. he’s now dead, and his social experiment, resulting in one failure after another, has come to ,a href=”http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/11754156/Venezuelan-farmers-ordered-to-hand-over-produce-to-state.html” target=”_new”>this:

Venezuela’s embattled government has taken the drastic step of forcing food producers to sell their produce to the state, in a bid to counter the ever-worsening shortages.

Farmers and manufacturers who produce milk, pasta, oil, rice, sugar and flour have been told to supply between 30 per cent and 100 per cent of their products to the state stores. Shortages, rationing and queues outside supermarkets have become a way of life for Venezuelans, as their isolated country battles against rigid currency controls and a shortage of US dollars – making it difficult for Venezuelans to find imported goods.

Pablo Baraybar, president of the Venezuelan Food Industry Chamber, said that the order was illogical, and damaging to Venezuelan consumers.

“Taking products from the supermarkets and shops to hand them over to the state network doesn’t help in any way,” he said. “And problems like speculating will only get worse, because the foods will be concentrated precisely in the areas where the resellers go.

There is power in this approach, Pablo. This move by the Venezuelan government may not make sense to someone that genuinely wants to let the market figure this stuff out, but it makes perfect sense if you look at it from the stand that the government can grandstand and pretend they are doing it to help, but then use it to control people. And collectivism, despite the bullshit you get sold by the SJW, is all about control. The power to punish those that you deem to have violated whatever arbitrary line you have drawn and to keep the others in line out of fear is central to the command economy politics of collectivism.

Be it hard core communism, the state owned socialism of Franco and the Nazi party, the crony-capitalism socialism of the west, or anything in between, the system can’t survive without the state’s ability to control and punish dissent. The end result, when you run out of other people’s money is the rationing of basic necessities – from toilet paper to soap – and the government confiscating the production of labor, like in this case, leading to a drastic decline in productivity across the board. After all, who wants to work hard to get the same reward as the people that do absolutely nothing?

This is what the social revolution will always play out as. Ask the Greeks how close they are to just this.

As if we needed more proof..

The world is experiencing a destructive collapse of the “Print, borrow & tax so we can spend more than we have to buy votes” mentality. This progressive idea that you government can control and drive economies has been destroying economies ranging from Greece – which again gets an extension to a certain doom that can simply not be avoided because eventually even Germany will be out of money – to that of China where the games to make a centrally planned economy look like something that can work, to examples here at home in the US itself. States like Illinois and California, bastions of liberalism and wholly owned democrat entities, are not just collapsing under the weight of their idiotic beliefs that they can simply continue to fleece the productive to buy votes from what amounts to a large portion of people – many of them illegal citizens – that now just vote for a living.

Nowhere is the destructive nation of the progressive way of doing things more evident than at municipal level. Cities like Detroit, Washington D.C, Chicago, Baltimore, and so on, are basically imploding under the weight of stupid ideas and government. The sad thing is that one city that was almost spared that fate, because the voters wizened up and got rid of the democrat cabal that was raping the productive and basically making the place a shithole, is now back on track to implode under the weight of the progressive nature’s stupidity. Yeah, this article deals with minutia, but that’s actually the problem. Its a whole bunch of small things that look like they are not really important that all come together to make a big picture.

And while the democrat controlled city’s representatives are wasting time arguing about if you should be allowed to piss on the streets or not, they are busy wrecking everything else by basically destroying the goose that laid the golden egg. Heinlein had it right when he pointed out that in general assholes will never appreciate the fact that it is a few people that do all the things that make life good and easy for the rest of us. He was also dead on that instead of showing gratitude the masses would actually despise these people that brought them economic progress. As he posited, they will turn on the productive – out of nothing more than envy, jealousy, and greed – and run them out of town. Then as things indubitably collapse, the dickheads that did this will call it bad luck.

We have the most inept and craven political class in my entire lifetime. These credentialed shitbags grew up in a system, imposed on us by the progressive movement that rewarded the behavior they excelled at: talking out of both sides of their mouths while never accomplishing anything of value. It’s the “everyone gets a trophy” generation showing us what we have wrought. That is why these people, once they left the cocoon of the corrupting school system that indoctrinates and rewards these idiotic and destructive beliefs, chose to go into government. It is the only place where massive ineptitude, delusions of one’s own abilities and achievements, and a complete lack of understanding of how economics or human nature make the real world work, constantly rewards failure. It’s where people that wouldn’t amount to anything but store clerks, despite all their supposed education, can steal from the productive and indulge their complexes.

NYC, like too many places in this country, are being run by people that have profited from a system that rewards cronyism and ineptitude, punishing the productive in the process, and growing the number of government tit suckers. It is no surprise that all it took was a couple of progressive mayors to set the place back on a fast track to implosion. Obama promised he would fundamentally change the country, and he is doing the same thing DeBlasio is doing to NYC. And many progressives think this is all a good thing because they despise the very country that has played the role of the producer in Heinlein’s quote for doing so. The wreckers are in charge, and they are doing what they are good at.

My electricity bill is again going to go up due to stupidity

On the last day of June, the SCOTUS struck down the ludicrous mercury regulations the EPA put together and did so because the whole think stunk and provided no information about the cost. Obama, to show them he is the emperor, issued more ridiculously stupid and horribly costly renewable energy fantasy promises. This fucking guy lives in his own stupid reality. At a time where technical people like
Bill Gates explain why everything points to current renewable energy not being viable, Obama doubles down on the stupid. And Gates is not alone to make that argument: Google, a lefty company if ever anything, agreed with him that current renewable energy technology doesn’t cut it. I have made this point myself. Solar, which was too costly and simply too unreliable and inefficient when Jimmy Carter promised to make us use only that in the late 70s has not come much further in the 4 decades since. Wind is an even bigger joke. The cost vs. return for these technologies not only make them prohibitive, but they are ludicrous and stand in the way of viable technologies (like nuclear).

My electrical bill has all but doubled since Obama took office. My consumption has almost been halved. I am almost paying four times as much as I used to per kWh since Obama put his idiotic ideas into motion, and the only people to make like bandits are those connected to the Obama administration that not only receive massive tax payer subsidized funding and breaks, but benefit from stupid shit like this promise by Obama that forces people being squeezed dry but without the knowledge to know they are being hoodwinked, into giving them even more of their money.

Heck, I now even have some new tax that cock gobbler Maloy socked on those of us not sucking at the government’s teat that takes more of my money to help those unable to pay their bill do so. I bet you none of these people I am now “helping” are trying to either reduce their consumption or dependency on this abusive industry that has so enriched collectivists that pretend they are fighting a noble fight against world destroying evil brown energy. Worse yet, unless I do what one of the government approved scams that line the pocket of supporters of these ludicrous and inefficient technologies peddle, I must not only remain on their grid, but accept the ass fucking they send my way every month, and thank them for it too. At this point I am sure I can come up with alternatives that don’t enrich these evil fucks and cost me less. But they will throw my ass in jail for daring to fight their monopoly.

Why are we letting these people run the show, huh? Greece is showing us where this always ends. And China is going to one up them and really fuck up things. There is not enough “Other people’s money” to let the leftists do what they want. No, not make things better, but fleece the productive while throwing scraps to the unproductive for their envious support. The left loves to pretend that the robber barons are in the party they oppose, but reality doesn’t bear that out. I can’t wait for Iran to get the bomb and start WWIII already. Nothing will end the stupidity of liberalism short of a global cataclysm that finally forces mankind to abandon socialism and the other beliefs the left holds dear. We need a mega dose of harsh reality to cure humanity of this mental disorder.

Friday Roundup: Guns, Money and Gag Orders

A few stories to close out your week:

  • Following on Alex’s post on the attempt to squash free speech at Reason, the Best Magazine on the Planet has gotten the gag order lifted and broken their silence. What they relate is appalling. Not only did the USA try to get personal information on Reason’s commenters, they got a gag order to try to prevent Reason from notifying those commenters that the government was seeking their information (Reason had already notified them by the time the order came). It’s a must-read on a government that is determined to shred any semblance of privacy.
  • Earlier this week, Treasury announced that the new $10 bill will have a woman on it, although it’s not clear who that will be or how she will “share” the bill with Alexander Hamilton. As someone who favors a radical overhaul of which faces are on our currency, I’m moderately in favor of this. But I much prefer the idea of putting a woman on the $20 for reasons articulated by Jillian Keenan (namely that Jackson was a racist slaveholding genocidal shredder of the Constitution). Still, there are lots of women we could honor: Harriet Tubman, Harriet Beecher Stowe, Eleanor Roosevelt, Elizabeth Cady Stanton, Susan B. Anthony, Sally Ride, Clara Barton. I would take all of these over Jackson. And I wouldn’t mind if we took all the politicians off our currency.
  • How bad was the security at OPM that led to the huge data breach? Really really bad. And they won’t fix it. Change we can believe in!
  • If you’re having trouble finding delicious barbecue, blame government. They are literally outlawing the kind of slow-cooking methods that make for such deliciousness. And it’s not really clear why other than “because they can”.
  • It will come as no surprise to readers of this blog that Paul Krugman and the Keynesians are full of it again. They are citing Iceland an example of how expansionary fiscal policy can save an economy. The problem? In this thing called reality, Iceland endorsed a severe austerity, with significant spending cuts and tax hikes.
  • The blamestorming for Charleston has already begun. Here is a quick refresher about the media’s desperation to blame horrific acts of violence on the Right Wing.
  • And finally, Reason has a feature on a college student who was busted with pot, turned informant and was murdered. No one is accountable, as usual. I’ll spare you my usual War on Drugs rant, in favor of my other favorite one: when dealing with cops and prosecutors, always get a lawyer. Never negotiate on your own.

Obamacare did that..

Who woulda thunk that there would be rate hikes on health insurance caused by the stupidity of the progressive unicorn fart sniffing crowd that passed Obamacare so we could find what was in it? Well, some of us not only predicted this, but warned others this was the pan from the start:

Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.

In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016. The biggest insurer in Tennessee, BlueCross BlueShield of Tennessee, has requested an average 36.3% increase. In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products.

And on and on. Because this thing wasn’t just flawed, but set up to fail and do exactly this to those of us that actually produce and pay for these things. Since Obamacare was passed, my rates have gone up over 30%. And I was not one of the people directly impacted by the individual mandate because I had an employer sponsored plan for which the marxists behind this debacle kept pushing out the date the rules would kick in for fear of the political damage it would cost. Well, the 2014 elections are done, and the chickens are coming home to roost.

And speaking of employers: my employer has done a lot of talking about how they will not stop offering healthcare because they care about employees. This much bloviating is a red flag to me. Too much effort when they could just not even bother. Someone in the industry will sooner than later drop company provided insurance, that’s because the penalty is cheaper than paying for the insurance, and every single company in the industry will follow suit because their competitiveness is impacted – by design, mind you – to dump everyone on the government rolls.

This thing was designed to destroy the worlds most effective and efficient healthcare system – based on the medical capability and access, and not on the bullshit stats progressives like to push such as who gets care at other people’s expense – so the left could pass a single payer system that would give them even more control over the life of the serfs under them. Of course, people that have already used other branches of the government to punish dissenters, political enemies, and anyone they feel disrespected them – from the IRS to the DOJ, or the EPA – would never decide to use healthcare as a weapon against their enemies when they control it.

The left will always resort to tyranny, because that’s the natural and logical conclusion of what they believe in always leads to. The over 100 million murdered and billions made to live in misery, in the name of social justice of all things, during the last century of progressive power has not served to dissuade low information, brain washed, mushy headed idiots from voting for the people preying on their jealousy and envy.

Don’t you know that we need to break a shit ton of eggs for this giant shit omelet they want to feed us, you evil individualist! Power to the nanny state! Get ready to pay a lot more, for less, and have to wait a long ass time to get whatever mediocre service you can get. And don’t you dare complain that you though they would bleed someone else to give the slackers more free shit in return for their votes. Sad to have to admit it, but the only reason I feel justice is happening is the army of idiots that pushed for this monstrosity and are now going to take it up the ass (not that there is anything wrong with that if you are into that).

Thomas Sowell deconstructs Obama and the left’s bullshit

I love Thomas Sowell. This man gets economics and the way the real world works. So as soon as I heard he had a new article discussing the stupidity of another Obama “You didn’t build that” and “Pay your fair share you evil capitalists” moment, I had to go check it out. As usual, Thomas Sowell cleans the floor with the stupid shit liberals say> Here’s an excerpt:

In a recent panel discussion on poverty at Georgetown University, President Barack Obama gave another demonstration of his mastery of rhetoric — and disregard of reality.

One of the ways of fighting poverty, he proposed, was to “ask from society’s lottery winners” that they make a “modest investment” in government programs to help the poor.

Since free speech is guaranteed to everyone by the First Amendment to the Constitution, there is nothing to prevent anybody from asking anything from anybody else. But the federal government does not just “ask” for money. It takes the money it wants in taxes, usually before the people who have earned it see their paychecks.

Despite pious rhetoric on the left about “asking” the more fortunate for more money, the government does not “ask” anything. It seizes what it wants by force. If you don’t pay up, it can take not only your paycheck, it can seize your bank account, put a lien on your home and/or put you in federal prison.

So please don’t insult our intelligence by talking piously about “asking.”

And please don’t call the government’s pouring trillions of tax dollars down a bottomless pit “investment.” Remember the soaring words from Barack Obama, in his early days in the White House, about “investing in the industries of the future”? After Solyndra and other companies in which he “invested” the taxpayers’ money went bankrupt, we haven’t heard those soaring words so much.

Then there are those who produced the wealth that politicians want to grab. In Obama’s rhetoric, these producers are called “society’s lottery winners.”

Was Bill Gates a lottery winner? Or did he produce and sell a computer operating system that allows billions of people around the world to use computers, without knowing anything about the inner workings of this complex technology?

Was Henry Ford a lottery winner? Or did he revolutionize the production of automobiles, bringing the price down to the point where cars were no longer luxuries of the rich but vehicles that millions of ordinary people could afford, greatly expanding the scope of their lives?

Most people who want to redistribute wealth don’t want to talk about how that wealth was produced in the first place. They just want “the rich” to pay their undefined “fair share” of taxes. This “fair share” must remain undefined because all it really means is “more.”

Once you have defined it — whether at 30 percent, 60 percent or 90 percent — you wouldn’t be able to come back for more.

Obama goes further than other income redistributionists. “You didn’t build that!” he declared to those who did. Why? Because those who created additions to the world’s wealth used government-built roads or other government-provided services to market their products.

And who paid for those roads and other government-provided services if not the taxpayers? Since all other taxpayers, as well as non-taxpayers, also use government facilities, why are those who created private wealth not to use them also, since they are taxpayers as well?

The fact that most of the rhetorical ploys used by Barack Obama and other redistributionists will not stand up under scrutiny means very little politically. After all, how many people who come out of our schools and colleges today are capable of critical scrutiny?

And that’s the point though, isn’t it? You target envious low information voters with a head full of leftist mush for support to give pretense to robbing the productive, all while stealing tons of that money, under the pretense of helping those less well off. Now if we had anything like a honest media, they would point out how much money these class warriors bag while peddling this liberal nonsense, no matter what the medium chosen to gain acceptance of thing sane people would never go with, while selling the snake oil.

What is missing from this revelation?

Yesterday I had a post about how a communication by the NAVY Sec Mabus clearly showed that the military was about to lower standards for access into some of the most demanding and dangerous combat specialties due to the demands from the PC political class. Today we have a revelation form retired Marine Corps Gen. James Mattis about how horrible the current US foreign policy landscape looks.

Because the United States lacks a global strategy, “volatility is going to get to the point that chaos threatens,” a former Central Command (CENTCOM) commander told a Heritage Foundation audience Wednesday.

Speaking in Washington, D.C., retired Marine Corps Gen. James Mattis said, “the perception is we’re pulling back” on America’s commitment to its allies and partners, leaving them adrift in a changing world. “We have strategic atrophy.”

Again the missing item here is what? I am not even gonna bother with a long lead up and just point out that the elephant in the room is that the idiots that were going to stop the rise of the oceans, heal the rift that warmonger devil Boosh caused with his cowboyism between us and every civilized nation on the planet, and show the world that the dog that rolls over and exposes it’s neck and belly to the aggressors would garner their sympathy and get them to stand down.

Yes, this for me is an opportunity to again point out that I told you so. In my wildest nightmares I couldn’t think anyone would do more harm than Carter did, but Team Obama has usurped that title with panache and certainty. People forgot how dismal democrats are at anything that has to do with the real world, and it reflects, not just in the current economic and political climate at home, but in our foreign policy and the disasters of the last 6 years, as well. I wonder if that Nobel Peace Committee has thought about asking Obama to return the prize they gave him to spite Boosh? I am certain that all the other idiots around the globe that rooted for an Obama win – with the exception of the ones in countries such as China, Russia, Iran, North Korea, Cuba, and Venezuela amongst a long list of rogue nations that were salivating at the chops for another weak ass in chief – and the subsequent “maturity” in the new US foreign policy are kicking themselves these days.

Our enemies get treated like a hooker afraid of pissing off her pimp, while our friends get treated like the hooker by her pimp. It’s a shame and a travesty. The world is now a more dangerous place because the supposed adults have been in charge and have done a “reset”. The consequences of having these in charge will be felt for a long time, and we have not yet seen the worst of it.

Yeah, because this worked so well before

As I predicted when the global housing market collapse in 2008 dragged us all into a depression that despite the left and their lackeys in the LSM’s 6+ year campaign to convince us was ended still is going on, we are right back where we started. That collapse, which the left desperately wants to blame on “evil profiteering by Korporashuns”, all while giving the political class that set up this disastrous framework that allowed this crisis to come about a pass, was yet another in a long string of evidence that you ignore the laws of nature, economics, and reality at your own peril. Irresponsible people, be they the homeowners, the money lenders, or the politicians scheming, will keep making irresponsible and bad decisions, and no amount of “law making” will curb that.

When Dodd and Frank, the architects of the framework that precipitated this economic collapse, demanded they be allowed to “fix it”, I pointed out that the left not only learned the wrong lesson from this terrible debacle that burned up trillions of dollars of wealth, cost the US tax payer a few trillion so the government could fulfil it’s side of the Faustian bargain it made with the “Too big to fail” to get them to go along with their idiotic plans, and ravaged the middleclass and the world’s economy, but that it would double down on the stupid that caused it. I pointed out that there would not only not be any real attempts to address and prevent a repeat of the problem, but that sooner than later these idiot leftists would be back to pushing the same idiotic ideas and follow on politics that caused the problem in the first place. And we are there yet again!

For the majority of American homeowners, their house is their single largest asset. Despite the crash in home values in the last decade, that still holds true.

That crash, however, created a much larger share of renters, and these Americans are not enjoying the new wealth that now-rising home prices afford. Ninety percent of metropolitan housing markets have seen a decline in their homeownership rates, while home values are rising and incomes are flat, and that is widening the wealth gap, according to a new study by the National Association of Realtors, which looked at homeownership, home values and income growth from 2000 to 2013

“Homeownership plays a pivotal role in the U.S. economy and has historically been one of the primary sources of wealth accumulation for middle-class families,” said Lawrence Yun, chief economist for the Realtors.

“Unfortunately, due to an underperforming labor market, insufficient housing supply and overly stringent underwriting standards since the recession, homeownership has plunged to a rate not seen in over two decades,” Yun added. “As a result, the country has become more unequal as the number of homeowners has fallen while the number of renters has significantly risen.”

The argument being made, again in a vacuum, is that homeownership helps people build wealth, while renting doesn’t. So the logical conclusion by the people that continue to misinterpret the Constitution’s premise that we should all have “Equality of opportunity” to mean “Equality of outcome”, is to rig the game to make more of that happen. See, this time they will get it right and make rules that not only will encourage lenders to make loans to people that because that have proven to be bad risks, but magically will make those bad risk people and lenders suddenly become good stewards of this undeserved rewards. Somehow they will find a way that doesn’t defy the laws of economics and human nature, and get lenders not to charge higher interests on riskier loans. At the same time they will make people that are prone to bad decisions when they chase instant gratification suddenly stop doing just that and become responsible citizens well aware of the privilege they have had bestowed on them,

Here is the problem that these SJW seem to either be unable to grasp or simply want to ignore: the majority of people, with that number going up every day, looking at a world where some 50 years of progressive social engineering has created a system where perverse incentives actually encourage bad decisions and behavior, simply will never be disciplined enough to own a home. In fact, the argument has successfully been made – by the very crisis we saw in 2008 – that making homeownership easier will actually result in people having less of a reason to buy what they can actually afford and to then when they buy a home, pay it off as well. Wishful thinking will not change that reality.

Homeownership is actually a privilege and reward, earned by those that show the needed discipline to save the money needed for the down payment and setting up the track record of steadfastly adhering to sound economic principles. Sound decision making and savings, especially when done in an economic environment where government has so muddled and undermined these practices with insane and perverse incentives that reward bad behavior and actually levies penalties in the form of taxation on doing the right things, is not something you can ignore in this equation. When you ignore that reality and simply jump to the conclusion that what you need to push is more home ownership to give people an opportunity to build wealth, you basically set us all up for another costly and devastating round of failures.

Lenders, especially those that paid attention to the last cycle, should resist coercion pushing them to make loans that will eventually kill them without building in some mechanism to guarantee their survival. This means that government will again need to allow them to create higher interest vehicles to mitigate the risk and then back that up with promises of tax payer funded bailouts when the inevitable collapse happens. The bulk of the people likely to step up when we start pushing this stuff again will be those that already proved they shouldn’t be put in a position where their irresponsibility and lack of discipline will leave them holding the bag for a financial debt that shouldn’t have ever been placed on them. Games will be played to hide the inevitable cycle of bad loans made (like the bundled Freddie Mac and Fannie Mae subprime CDS) by these lenders to high risk people. And sooner than later we will see a repeat of the collapse as the whole house of cards comes tumbling down.

But they mean well, so the fault is everybody else’s but theirs…