With threats of continuing debates over the payroll taxcuts well into the congressional holiday vacation, it seems members of Congress are anxious to reach an agreement soon. Last week, both the Democratic and Republican Senate proposals for how to handle the expiring Social Security payroll tax cuts failed, forcing Congress back to the drawing board. On Tuesday, the U.S. House of Representatives passed another piece of legislation which now requires a vote in the Senate; however, it’s one that has already faced trouble in the upper house.
The measure passed on a virtual party-line vote, 234 to 193, with just 14 Republicans opposing the bill and 10 Democrats supporting it. It “extends payroll tax relief, extends and reforms unemployment insurance and protects Social Security — without job killing tax hikes,” asserts Republican House Speaker John Boehner.
The Blaze reports, "The Social Security payroll tax cuts approved a year ago to help stimulate the economy would be extended through 2012, avoiding a loss of take-home income for wage-earners. An expiring program of unemployment benefits for the long-term jobless would remain in place, although at reduced levels that the administration said would cut off aid for 3.3 million."
The most prevalent theme in President Barack Obama's Dec. 6 Osawatomie, Kan., speech was the need for greater "fairness." In fact, though the president never defined the term fair(ness), he used it 15 times. Explaining his new hero, Teddy Roosevelt, Obama said: "But Roosevelt also knew that the free market has never been a free license to take whatever you can from whomever you can. He understood the free market only works when there are rules of the road that ensure competition is fair and open and honest." What's fair competition is somewhat subjective, but let me suggest a few examples of what's clearly unfair.
Say a person wants to become a taxi owner. He has a driver's license, a car, and accident liability insurance. Is it fair that in New York City, he has to first purchase a taxi license (medallion) that as of October sold for $1 million? Taxi licenses in Chicago go for $56,000. In Boston, they are $285,000, and in Philadelphia, they run $75,000. Is that fair competition?
In some cities, to own a taxi one must obtain a certificate of "public convenience and necessity." At a Public Utility Commission hearing, incumbent taxi owners show up with their attorneys to protest that another taxi company is not needed, and the application is denied. I'd like to have Obama — or anyone else — tell us whether that's fair competition.
Conservative economist Robert Higgs' warnings about the Heritage Foundation’s Index of Dependence on Government were already outdated when they were published on Thursday. The updated statistics from Heritage for 2011, published the next day, showed the situation in the United States to be even worse than Higgs warned.
Higgs noted that the so-called “ruling class” (taken from Angelo Codevilla’s book of the same name) is a tiny percentage of the total population in the country, and has in the past only been able to maintain its legitimacy through vote-buying and mainstream media credibility. The fear of the ruling class has always been that dissatisfaction and distrust would result in their expulsion from the seats of power. But Higgs notes that now there are so many Americans dependent upon the government for their very subsistence that resistance to the tyranny of the ruling class is being increasingly neutralized.
The more dependent the citizens become on their government, the less influence they are likely to have in any substantial downsizing of that government:
As January ushers in a new year, San Francisco will become the first U.S. city to instate a minimum wage rate of more than $10 an hour. Climbing from $9.92 to $10.24, the city’s new labor mandate will hike the city’s minimum wage more than $2 above the California minimum wage and nearly $3 more than the rate set by the federal government.
Many San Francisco workers lauded the move, particularly those residents working multiple jobs and being paid the city’s current minimum wage. "It’s a psychological boost," said David Frias, a 34-year-old movie theater usher and security guard for a crowd control firm. "It means that I’ll have more money in my wallet to pay my bills and money to spend in the city to help the economy."
Still, many city residents and community organizations say the new rate is too modest after factoring in rising inflation, cost of living increases, and San Francisco’s persistently stale economy. While Karl Kramer of the San Francisco Living Wage Coalition is happy to see that the city is raising the minimum wage, he says an adequate wage for a single, childless adult in San Francisco is $15 per hour, and double that when adding at least one child.
A United States of Europe — minus recalcitrant Great Britain — is nearly upon us; thus saith Forbes magazine. “The euro, in its old form, has fallen into crisis and the price European countries have to pay is a large loss of sovereignty,” writes Clem Chambers in the Establishment conservative magazine. Chambers continues:
Nationalists would consider this disastrous. In reality, there are not so many nationalists in Europe these days and many countries, and their populations, consider themselves European and see little problem with further integration.
Chambers is confident that zeal to maintain the eurozone will overwhelm nationalist sentiments. As a result of the current financial crisis, political power in Europe will migrate to Brussels, stripping eurozone members of their remaining economic sovereignty:
What is set to happen is that the European super state will hold the cheque book of euro member countries; or at least be able to snap it shut should any one country wish to run away with its local budget.
Money is power and once ultimate budget power is gone, political power will subsequently be drawn into the federal centre.
Washington gridlock may turn out to be the salvation of the Obama administration. Not only does gridlock allow the president to blame Republicans for not solving the financial crisis that his own runaway spending created, the inability to carry out as much government intervention in the economy as when the Democrats controlled both Houses of Congress means that the market can now recover on its own to some visible extent before the next election.
As reported by Annika Breidthardt for RealClearMarkets.com, the latest European crisis summit that ended last weekend resulted in “a historic agreement to draft a new treaty” which she then characterized as “too little, too late.” Reaction of the equity and currency markets agreed, with substantial losses in American and European stock markets opening the week, and the euro dropping to lows not seen since last February.
The agreement will require EU member states to ante-up $267 billion to the International Monetary Fund which will then turn around and re-lend it to those member states in financial trouble. Exactly how those needing the funds will “ante-up” was left unexplained. The existing bailout fund — the European Financial Stability Fund, or EFSF — will be leveraged, debt upon debt, to give it more ability to lend to those same struggling countries.
But the big news is the moving forward of the date for ratification of the ESM — the European Stability Mechanism — by a full year, to June of 2012. This is the elephant in the living room that few in the media have spent much time reviewing, although a careful analysis is available here. The reason for moving ahead with such a grotesque totalitarian program is obvious: there may not be enough time left to implement it. Investors continue to demand higher and higher risk premiums when lending to Greece and Italy, Standard and Poor’s will be doing another financial review “as soon as possible,” while Moody’s expects to issue its own credit report on European countries and banks early next year. Moody’s took a dim view of the “historic agreement” by noting:
Pushing his agenda for higher taxes on “the rich,” President Obama kicked off his December 6 speech in Kansas by saying his Kansas grandparents “shared the optimism of a nation that triumphed over the Great Depression.”
In fact, the 1929 stock market crash turned into the long-running Great Depression because the counterproductive soak-the-rich policies of the federal government hadn’t “triumphed” in reversing the downturn.
The Federal Reserve has joined an open conspiracy with its other central-banking buddies to steal several trillion dollars from my grandchildren.
The plan is to steal not just from my grandchildren, but from all of us. Each American anywhere who measures the value of his savings, the pay he receives, the stocks he owns and every other possession he has in dollars — the currency that is created and controlled by our central bank — is a target.
Every time the Federal Reserve turns on the printing presses and creates “money” out of thin air (or, more accurately, creates a digital entry on a computer screen), it reduces the value of all the money that is already in circulation.
The equation is simple: The more fiat (unbacked) currency that is created, the less each individual currency unit is worth. The creation of fiat money is the only reason for inflation. Rising prices do not cause inflation, as the powers that be would like you to believe. You see, if you accept that false explanation, you will put the blame for rising prices on businesses — not on government, where it belongs.
Americans are quickly getting poorer as the much-touted economic “recovery” remains elusive. Household wealth plummeted by more than four percent from July to September according to a report released last week by the Federal Reserve, marking the steepest drop since 2008 and the second quarterly decline in a row. That represents an average loss of about $21,000 per household in just three months.
At the end of the third quarter, household wealth plunged by $2.4 trillion, from a total of about $60 trillion down to slightly less than $57.5 trillion. The dramatic drop in net worth — the value of all assets minus total debts and liabilities -—was led by still-declining housing prices and crashing stock values.
Despite wild money printing by the Fed in recent years, home values are not expected to recover any time soon. During the third quarter, American real estate assets lost about $100 billion from the previous quarter. And banks are still sitting on an unknown but huge number of foreclosed properties expected to keep prices depressed for years to come.
Stocks performed terribly last quarter, too, though they have recovered some of those losses so far. The S&P500 Index lost around 14 percent from July to September. And according to the Dow Jones U.S. Total Stock Market Index, equities shed $2.6 trillion for the quarter.