January 31, 2008
"My anxious recollections, my sympathetic feeling, and my best wishes are irresistibly excited whensoever, in any country, I see an oppressed nation unfurl the banners of freedom."
-- George Washington, 1796 - letter to Pierre Auguste Adet
What's wrong with the world?
The Anchoress asks What's Wrong With the World?
Since "not enough prayer" was already taken, I'd like to float my second choice:
Not enough fiber . . .
The current economic pessimism is wrong!
Larry Kudlow points out some very positive 2007 Q4 numbers for durable goods, unfilled orders, and bank credit.
In spite of all the recession talk, the U.S. economy continues chugging along. Just this morning, we received news that new orders for durable goods ended Q4 on a very strong note. We had a 5.2 percent gain. That comes out to 22.6 percent annualized growth over the past three months. Meanwhile, unfilled orders, the leading indicator for sector activity, also showed strength with a 2.5 percent gain for December (20.5 percent over 3 months).
These are not recessionary numbers.
And don’t forget: firms have been able to keep up their capex activities because credit is still flowing; business loans are up 21 percent from a year ago, and bank credit (which includes business, consumer, and real estate loans) is up 11 percent. Remember that firms have filled coffers from some very profitable years.
Even in Q4, earnings outside financials are healthy. The latest tally shows that roughly one-third of non-financial companies in the S&P 500 have reported and market-weighted and share-weighted earnings per share are up about 23 percent from a year ago.
And that is something you can take to the bank!
January 30, 2008
"I am commonly opposed to those who modestly assume the rank of champions of liberty, and make a very patriotic noise about the people. It is the stale artifice which has duped the world a thousand times, and yet, though detected, it is still successful. I love liberty as well as anybody. I am proud of it, as the true title of our people to distinction above others; but...I would guard it by making the laws strong enough to protect it."
-- Fisher Ames (letter to George Richard Minot, 23 June 1789)
Openly lifted from The Captain's Quarters. I couldn't resist . . .
January 29, 2008
"Constitutions of civil government are not to be framed upon a calculation of existing exigencies, but upon a combination of these with the probable exigencies of ages, according to the natural and tried course of human affairs. Nothing, therefore, can be more fallacious than to infer the extent of any power, proper to be lodged in the national government, from an estimate of its immediate necessities."
-- Alexander Hamilton, 1788 - Federalist No. 34
Reality and the economy
Brian Wesbury, chief economist for First Trust Portfolios, L.P., points out that, despite the daily hysterical horse-pucky being thrown at us by the news media and others, the U.S. economy is doing just fine.
The irony is almost too much to take. Yesterday everyone was worried about excessive consumer spending, a lack of saving, exploding debt levels, and federal budget deficits. Today, our government is doing just about everything in its power to help consumers borrow more at low rates, while it is running up the budget deficit to get people to spend more. This is the tyranny of the urgent in an election year and it's the development that investors should really worry about. It reads just like the 1970s.
The good news is that the U.S. financial system is not as fragile as many pundits suggest. Nor is the economy showing anything other than normal signs of stress. Assuming a 1.5% annualized growth rate in the fourth quarter, real GDP will have grown by 2.8% in the year ending in December 2007 and 3.2% in the second half during the height of the so-called credit crunch. Initial unemployment claims, a very consistent canary in the coal mine for recessions, are nowhere near a level of concern.
Because all debt rests on a foundation of real economic activity, and the real economy is still resilient, the current red alert about a crashing house of cards looks like another false alarm. Warren Buffett, Wilbur Ross and Bank of America are buying, and there is still $1.1 trillion in corporate cash on the books. The bench of potential buyers on the sidelines is deep and strong. Dow 15,000 looks much more likely than Dow 10,000.
Go read the whole thing.
January 28, 2008
"Measures which serve to abridge the free competition of foreign Articles, have a tendency to occasion an enhancement of prices."
-- Alexander Hamilton, 1791 - Report on Manufactures
Reality check: Earmarks
It seems that the Democrat-run Congress is no better at reducing earmarks than the Republican-run Congress was. In fact, 2007 had the second-highest number of earmarks in history.
A closer look at the numbers reveals that isn’t exactly true. Liberals are comparing the fiscal 2008 total of 11,043 to the fiscal 2005 total of 13,997. What they don’t tell you is that this year’s number is the second highest on record and it’s a sharp increase from the past two years.
January 27, 2008
"Industry is increased, commodities are multiplied, agriculture and manufacturers flourish: and herein consists the true wealth and prosperity of a state."
-- Alexander Hamilton, 1790 - Report on a National Bank
Finally! A reason to watch the Superbowl.
Photo:Limited Brands provided this screenshot from a Victoria's Secret ad scheduled to run during Super Bowl XLII on Sunday, Feb. 3, 2008. Advertisers are banking more than ever on the Super Bowl as the writers' strike fells hit TV shows. (AP Photo/Limited Brands)
January 26, 2008
"The whole of that Bill [of Rights] is a declaration of the right of the people at large or considered as individuals...[I]t establishes some rights of the individual as unalienable and which consequently, no majority has a right to deprive them of."
-- Albert Gallatin, 1789 - letter to Alexander Addison
January 25, 2008
"As our president bears no resemblance to a king so we shall see the Senate has no similitude to nobles. First, not being hereditary, their collective knowledge, wisdom, and virtue are not precarious. For by these qualities alone are they to obtain their offices, and they will have none of the peculiar qualities and vices of those men who possess power merely because their father held it before them."
-- Tench Coxe, 1787 - An American Citizen, No.2
Larry Kudlow comments on the relative merits of free market economics and asks a question.
According to the front-page of today’s Wall Street Journal, Bill Gates is issuing a clarion call for a kinder capitalism to aid the world’s poor. Mr. Gates says he’s grown impatient with the shortcomings of capitalism. He thinks it’s failing much of the world, and he’s slated to say as much in a speech later today at the World Economic Forum in Davos, Switzerland.
This from a guy worth around $35 billion. (Give or take a billion.)
It appears Gates is ignoring the global spread of free-market capitalism that has successfully lifted hundreds of millions of people up from poverty and into the middle class over the last decade or so. Think China. Think India. Think Eastern Europe (and maybe even France under Sarkozy). Gates wants business leaders to dedicate more time to fighting poverty. But the reality is that economic freedom is the best path to prosperity. Period.
The Heritage/WSJ 2008 Index of Economic Freedom clearly shows that free-market countries are prospering mightily. Per capita GDP is closely related to, and positively correlated with, market economies. The fact is that free-market economics is spreading like wildfire. State socialism is on the decline. Unsurprisingly, the study also shows that the least-free economies are mired in poverty. We’re talking North Korea, Cuba, Zimbabwe, Iran, and others.
Also noteworthy is Venezuela’s plunge into poverty, orchestrated by the neo-socialist Hugo Chavez. His nation is sinking toward Cuba-type poverty as he attempts to adopt Fidel Castro’s failed economic model.
Check out the charts on economist Mark Perry’s Carpe Diem blog site. They show that the U.S. share of world GDP and its world stock market capitalization are shrinking. This is not a bad thing. It does not mean that America is heading downwards. On the contrary, it means that newly freed economies are heading up.
The reality here is that the rising tide of global capitalism is lifting all boats that employ it. It works. It’s a good thing. It’s the key to unlocking a nation’s prosperity.
So I just have to smile when a billionaire like Bill Gates turns a cold shoulder to the blessings capitalism bestows. Or when his buddy, Warren Buffett, broadcasts the importance of hiking tax rates on successful earners and investors. Look fellas, the command-and-control, state-run economics experiment was tried. It was called the Soviet Union. If you hadn’t noticed, it was a miserable failure.
What’s in the drinking water at this place called Davos?
One can only guess . . .
January 24, 2008
"Public affairs go on pretty much as usual: perpetual chicanery and rather more personal abuse than there used to be... Our American Chivalry is the worst in the world. It has no Laws, no bounds, no definitions; it seems to be all a Caprice."
-- John Adams (letter to Thomas Jefferson, 17 April 1826)
January 23, 2008
"The constitution of the United States is to receive a reasonable interpretation of its language, and its powers, keeping in view the objects and purposes, for which those powers were conferred. By a reasonable interpretation, we mean, that in case the words are susceptible of two different senses, the one strict, the other more enlarged, that should be adopted, which is most consonant with the apparent objects and intent of the Constitution."
-- Joseph Story (Commentaries on the Constitution, 1833)
Scarlett supporting our Marines
Scarlett Johansson went to Kuwait with the USO and visited some Marines there on Saturday.
What a wonderful way for her to support our troops!
January 22, 2008
"War is not the best engine for us to resort to; nature has given us one in our commerce, which if properly managed, will be a better instrument for obliging the interested nations of Europe to treat us with justice."
-- Thomas Jefferson (letter to Thomas Pickney, 29 May 1797)
January 21, 2008
"I will venture to assert that no combination of designing men under heaven will be capable of making a government unpopular which is in its principles a wise and good one, and vigorous in its operations."
-- Alexander Hamilton (speech to the New York Ratifying Convention, June 1788)
January 20, 2008
"To grant that there is a supreme intelligence who rules the world and has established laws to regulate the actions of his creatures; and still to assert that man, in a state of nature, may be considered as perfectly free from all restraints of law and government, appears to a common understanding altogether irreconcilable. Good and wise men, in all ages, have embraced a very dissimilar theory. They have supposed that the deity, from the relations we stand in to himself and to each other, has constituted an eternal and immutable law, which is indispensably obligatory upon all mankind, prior to any human institution whatever. This is what is called the law of nature....Upon this law depend the natural rights of mankind."
-- Alexander Hamilton (The Farmer Refuted, 1775)
January 19, 2008
"Wisdom and knowledge, as well as virtue, diffused generally among the body of the people, being necessary for the preservation of their rights and liberties, and as these depend on spreading the opportunities and advantages of education in the various parts of the country, and among the different orders of people, it shall be the duty of legislators and magistrates... to cherish the interest of literature and the sciences, and all seminaries of them."
-- John Adams (Thoughts on Government, 1776)
January 18, 2008
"It should be your care, therefore, and mine, to elevate the minds of our children and exalt their courage; to accelerate and animate their industry and activity; to excite in them an habitual contempt of meanness, abhorrence of injustice and inhumanity, and an ambition to excel in every capacity, faculty, and virtue. If we suffer their minds to grovel and creep in infancy, they will grovel all their lives."
-- John Adams (Dissertation on the Canon and Feudal Law, 1756)
Journalists on the edge
Iowahawk has an alarming report about how violence being perpetrated by journalists is spiraling out of control.
A Denver newspaper columnist is arrested for stalking a story subject. In Cincinnati, a television reporter is arrested on charges of child molestation. A North Carolina newspaper reporter is arrested for harassing a local woman. A drunken Chicago Sun-Times columnist and editorial board member is arrested for wife beating. A Baltimore newspaper editor is arrested for threatening neighbors with a shotgun. In Florida, one TV reporter is arrested for DUI, while another is charged with carrying a gun into a high school. A Philadelphia news anchorwoman goes on a violent drunken rampage, assaulting a police officer. In England, a newspaper columnist is arrested for killing her elderly aunt.
Unrelated incidents, or mounting evidence of that America's newsrooms have become a breeding ground for murderous, drunk, gun-wielding child molesters? Answers are elusive, but the ever-increasing toll of violent crimes committed by journalists has led some experts to warn that without programs for intensive mental health care, the nation faces a potential bloodbath at the hands of psychopathic media vets.
Read the whole thing . . . before it's too late!
January 17, 2008
A lady asked Dr. Franklin, "Well, Doctor, what have we got - a republic or a monarchy?" "A republic," replied the Doctor, "if you can keep it."
-- Benjamin Franklin, Farrand's Records of the Federal Convention of 1787
January 16, 2008
"We lay it down as a fundamental, that laws, to be just, must give a reciprocation of right; that, without this, they are mere arbitrary rules of conduct, founded in force, and not in conscience."
-- Thomas Jefferson (Notes on the state of Virginia, 1782)
January 15, 2008
"He was certainly one of the most learned men of the age. It may be said of him as has been said of others that he was a "walking Library," and what can be said of but few such prodigies, that the Genius of Philosophy ever walked hand in hand with him."
-- James Madison (on Thomas Jefferson in a letter to Samuel Harrison Smith, 4 November 1826)
January 14, 2008
"[W]here there is no law, there is no liberty; and nothing deserves the name of law but that which is certain and universal in its operation upon all the members of the community."
-- Benjamin Rush (letter to David Ramsay, Circa April 1788)
January 13, 2008
"If we resort for a criterion to the different principles on which different forms of government are established, we may define a republic to be, or at least may bestow that name on, a government which derives all its powers directly or indirectly from the great body of the people, and is administered by persons holding their offices during pleasure for a limited period, or during good behavior."
-- James Madison (Federalist No. 39)
January 12, 2008
"The name of American, which belongs to you, in your national capacity, must always exalt the just pride of Patriotism, more than any appellation derived from local discriminations."
-- George Washington, 1796 - Farewell Address
January 11, 2008
It should be the highest ambition of every American to extend his views beyond himself, and to bear in mind that his conduct will not only affect himself, his country, and his immediate posterity; but that its influence may be co-extensive with the world, and stamp political happiness or misery on ages yet unborn.
-- George Washington, 1789 - letter to the Legislature of Pennsylvania
January 10, 2008
Patriotism is as much a virtue as justice, and is as necessary for the support of societies as natural affection is for the support of families.
-- Benjamin Rush, 1773 - letter to His Fellow Contrymen: On Patriotism
And I'm not talking about job cuts. I'm talking about cutting taxes and the Fed's interest rates. Larry Kudlow says it best:
Right now the single best thing President Bush and Congress can do is slash the corporate tax rate for large and small businesses. Bush can reach out to Charlie Rangel and move the corporate tax to 25 percent from 35 percent. Then, instead of taxing successful capitalists as an offset, corporate-tax subsidy loopholes, special provisions, and other corruption-inducing K-Street tax earmarks can be eliminated.
A middle-class tax cut to help families and small businesses would also be welcome. This can be done by collapsing the three middle-income tax brackets of 15 percent ($15,650), 25 percent ($63,700), and 28 percent ($128,500) into one 15 percent bracket. These brackets apply to small-business owners who may be suffering the high costs of energy and raw materials. The biggest weakness in the jobs report is the household survey which is comprised of these owner-operated small businesses. Household job increases have slumped to only 262,000 over the last year, compared to a 1.3 million increase for larger corporations.
Essentially, a major cut in the corporate tax and a simplification of the middle-income tax brackets makes good sense for long-run tax reform. It would help the current softening of the economy and increase America’s long-run potential to grow. This is a good plan for President Bush as well as the GOP candidates on the campaign trail.
I recommend you read the whole post.
Where are the moderate Muslims?
Michael Totten answers that question, and much more in his latest report from Iraq.
I almost thought better of it, but I had to ask: “Have you ever been to Israel, Tom?”
“Yes!” he said, beaming. “It is my country. It is beautiful. I have family there. The first time I went to Israel, after the 1967 war, I was afraid the Jews might eat my flesh. But they were so nice to me in Haifa. They welcomed me into their homes even though I am Palestinian. We hated them, you know, after all that had happened. But I was welcome as a Palestinian. The Jews are good people. Like you.”
For all the hatred in the Middle East, there is also forgiveness, and moderation. Where are the moderate Muslims? ask many Americans. I find the question bizarre. I meet them every day in Iraq, and everywhere else in the Middle East, too. The problem is they have a hard time getting attention in newspapers and magazines that wallow in sensationalism.
Read it all.
January 09, 2008
"Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it."
-- John Adams (Thoughts on Government, 1776)
January 08, 2008
"More permanent and genuine happiness is to be found in the sequestered walks of connubial life than in the giddy rounds of promiscuous pleasure."
-- George Washington (letter to the Marquis de la Rourie, 10 August 1786)
January 07, 2008
"The deliberate union of so great and various a people in such a place, is without all partiality or prejudice, if not the greatest exertion of human understanding, the greatest single effort of national deliberation that the world has ever seen."
-- John Adams (quoted in a letter from Rufus King to Theophilus Parsons, 20 February 1788)
January 06, 2008
"The boisterous sea of liberty is never without a wave."
-- Thomas Jefferson (letter to Richard Rush, 20 October 1820)
January 05, 2008
"Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of government, that alone is a just government which impartially secures to every man whatever is his own."
-- James Madison (Essay on Property, 29 March 1792)
January 04, 2008
"Strangers are welcome because there is room enough for them all, and therefore the old Inhabitants are not jealous of them; the Laws protect them sufficiently so that they have no need of the Patronage of great Men; and every one will enjoy securely the Profits of his Industry. But if he does not bring a Fortune with him, he must work and be industrious to live."
-- Benjamin Franklin (Those Who Would Remove to America, February 1784)
January 03, 2008
"As riches increase and accumulate in few hands, as luxury prevails in society, virtue will be in a greater degree considered as only a graceful appendage of wealth, and the tendency of things will be to depart from the republican standard. This is the real disposition of human nature; it is what neither the honorable member nor myself can correct. It is a common misfortunate that awaits our State constitution, as well as all others."
-- Alexander Hamilton (speech to the New York Ratifying Convention, June 1788)
January 02, 2008
"No government ought to be without censors & where the press is free, no one ever will."
-- Thomas Jefferson (letter to George Washington, 9 September 1792)