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Thursday, October 27, 2011
Every day I think that I ought to write something witty and insightful about the silliness of the Occupy Wall Street movement(s)... and yet I don't, as these protestors have so little going on upstairs that mocking them would be quite unsporting.
It seems like I'm watching a twist of 'This is Spinal Tap' or an episode of South Park, in which the screenwriters do a masterful job of depicting just how utterly clueless the central characters are. Freeloaders complaining about other freeloaders eating the good food. Protesters who don't like private property rights complaining when someone steals their stuff. Complaining about the police yet complaining when there is a breakdown of order. Anti-corporatists taking handouts from corporations, handouts made possible only because those corporations make profits. Kids who majored in subjects that have no place in the real world finding out that the real world doesn't feel like employing them. Aging hippies calling for communism, yet complaining when they think others aren't putting in the same effort. How can anyone who has more than empty air between their ears not laugh at these people? They're textboook examples of people who know everything and yet nothing. They spout their various slogans without having the slightest bit of comprehension what it is that they're chanting about. And yet as much as I chuckle at them, what I really do is feel sorry for them. Sorry that they're so pathetic. Sorry that their parents indulged them as they did, not clueing them in to the realities of life. Sorry that their teachers let them proceed through years of school without insisting that they learn something that is of use to the real world. Sorry that the schools they went to took their tens of thousands of tuition dollars and didn't give them anything of value in return. Sorry that (liberal) politicians sold them a bill of goods, the line that prosperity is possible if only they could just extract their fair share from the 1%. It's sad. Monday, October 24, 2011
If Obama's goal is to appear as if he's 'doing something' about problems in the housing market, then he'll probably suceed, as there are more than a handful of voters who mistakenly think it is good to 'do something'... even if they have no clue as to what is supposed to be accomplished.
If, however, he hopes to actually accomplish anything substantive, then his reported plan to allow underwater mortgage holders to refinance their mortgages will fall short. Here's why: According to what I've read from the so-called mortgage experts, it is the underwater nature of the mortgage that is creating the problems... and not that these homeowners are paying more than they otherwise would if they were allowed to refinance. According to what I've read, people who have no equity in their homes (and being underwater certainly qualifies as having no equity) are more likely to walk away from their mortgages and to take worse care of their homes while they are in their homes. Lowering their mortgage payments does nothing to change the value/debt ratio... someone who is $100,000 underwater will still be underwater by that amount, it isn't as if the value of the house is going to go up because the underwater homeowner gets to pay somewhat less a month. Perhaps there will be some small number of homeowners who would have walked away but with a smaller payment will decide to stick it out... but this group would be such a small portion of the underwater crowd that any impact on the overall housing market would be tiny. Another claim of the plan's defenders is that homeowners will spend the savings, boosting the economy. But according to Keynesian theory, which these people sure subscribe to, it is the overall amount of spending that is relvant, and these people won't be spending any more money than they are now, they'll just be spending it on different things. So where's the benefit? Nor, as I mentioned above, will it benefit other homeowners. It won't drive home values up. A neighborhood that is under pricing pressure because X% of the homes in that neighborhood are underwater will still have the same percentage of homes underwater. This won't make new buyers any more likely to buy into a neighborhood. As I have said before, the best thing for the housing market would be to acclerate the foreclosure of homes whose homeowners are delinguent. Get the people out who aren't making the payments and sell the houses to people who will put up some serious equity and make the payments. Let the people who lose their houses go buy or rent something they can afford. Once this happens, there won't be an uncertainty discount in housing prices, where buyers refuse to act because of fear that prices in a particular area will drop due to future foreclosures. While one can have sympathy for those who would lose their homes, there are two things to remember: One, they brought this on themselves, buying more home than they could afford (and even if they had 'help' from the local mortgage lender, nobody forced them to accept that help). Two, misguided attempts to help these people has kept the housing problems going on longer than they needed to have been (it's a typical Democratic/liberal approach to problems brought out by individual misbehavior... make the law-abiding, play the rules majority suffer to absolve these people of the problems they brought on themselves). Friday, October 21, 2011
In the category of 'just because you can sing doesn't mean you're smart'...
Singer Jon Bonjovi is opening a restaurant in which patrons will only pay if they want to pay... and only what they want to pay. I'm sure there will be those who for some reason will pay more than what would be deemed a 'fair price' for the meal. But I reckon there will be far more people who pay far less. It's human nature. People flock to things that are free. And any restaurant that gives away a good chunk of their meals is very unlikely to make up the shortfall from the paying patrons. I put the over/under of the restaurant surviving at less than 1 year... and that long only because its owner has deep pockets. Wednesday, October 12, 2011
While a $70,000 federal grant to market syrup is relatively small change compared to Solyndra, conservatives should oppose it for some of the same reasons: if it made economic sense, someone in the private sector would have stepped up to do it themselves.
At best (or worst?), this repays Vermont businesses for an expenditure that they should have been glad to make on their own. Wednesday, October 05, 2011
Why I'm not impressed with or worried about the Occupy Wall Street crowd, even if their numbers are growing...
It takes a critical mass of people to effect change in America... and there's nothing to suggest that, despite their claim to speak for the 99%, they represent anything more than a odd fringe. (Unlike the Tea Party, which had support far beyond the relative few who attended a protest, there's not a lot of support for these protests beyond the people who are already protesting). Nor are these protests going to attract others to their cause... no one who isn't already a member of or supportive of the odd fringe is going to become a supporter. Nor are these protests creating such havoc that they can force the public to cave in to their demands. Sure, some workers can't eat lunch in the park that has been taken over, but other than that, these protests have absolutely no impact on just about anybody else. Tuesday, October 04, 2011
NYT columnist Joe Nocera seems puzzled as to why alternative energy companies can get private financing at the 'good idea' stage but not for the far more expensive process of commercializing the innovation.
Allow me to clear it up for poor Joe. Like the cliche, there are two kinds of innovation, those that work and are profitable and those that don't and aren't... but it isn't always apparent at the very beginning of the process which will work and which won't. There are ideas that are flawed, and so much so that the flaws are visible (to everyone but the guy with the idea) at the very beginning of the process. And there are ideas that don't work out, but the flaws are only discovered once the process gets started. There are ideas that are successful, and so much so that there never was any question that it would be. Interestingly, there aren't ideas that succeed where no one thought they would as, without an advocate, these ideas never get off the ground. As there are - so far - no alternative energy innovations that have been proven to be successful, these innovations fall into one of the first two categories - the losers. There are those that are widely recognized as defective and never attract any investment capital. Nothing gets lost but the inventor's time, ego and reputation. And there are those that appeared to have some commercial potential and thus attract investment capital at the early stages only to have had that funding dry up when the investors learned of the flaws. The latter is what happened with Solyndra. The company had an interesting idea. They attracted some initial funding. But at some point, the private investors soured on what the company was doing. Not because they lost interest in alternative energy, but because they finally figured out that the company couldn't make a profit on its innovation. And that is precisely when the federal government stepped in with a half billion dollars. Nocera claims that private investors won't finance the commercialization of the idea. This is, to put it plainly, a stupid claim. Why would anyone put money into a project without an exit strategy, a way of getting a return on their investment? Nobody invests in the better mousetrap if they don't see a path to selling that mousetrap. It isn't that private investors won't finance the latter stages, it is that haven't yet found one that is worth the money... because every single one so far as been shown to have some fatal flaw. Addressing some other points Nocera tries to make: He argues that banks don't understand the economics of solar power. What a crock. Economics of power are economics of power, it doesn't matter what the source is. Projects make sense when the revenues charged exceed the cost. If the solar facilities Nocera mentions do in fact have the locked in contracts he says they do, a bank would be stupid to not loan money to the project. Since they didn't, my guess is that the contracts aren't as ironclad as Nocera wants to believe. Or perhaps the contracts are solid, but the banks don't believe the company can build the plants as cheaply as they claim they can. Whatever the case, someone whose business it is to make loans looked at this and decided that it was too risky. He also cites Andy Grove in claiming that a great many American innovations get manufactured in China because the Chinese government is financing the commericializaton process. But if that were the driving force, then how does Nocera explain all the other non-alternative energy stuff that gets manufactured in China? Could it be that it costs a whole lot less to build and staff a factory in China than it does in the United States? It doesn't surprise me that Nocera puts out the thin drivel that he does. Maybe once upon a time business journalists adhered to the how, what, when, where and why of a story... but now, they're driven by ideology as their fellow journalists. Nocera believes it is the role of government to spend taxpayer money on things we wouldn't spend money on ourselves... and that comes out in his writing.... even if he has to twist things to make it seem logical. Monday, October 03, 2011
If the GOP had a brain...
They'd have someone following Obama on his visits to GOP swing districts to tout his so-called 'jobs bill'. There's no good reason the GOP should let Obama have the local stage to himself, to let monopolize the local newspapers and evening news programs. They should have someone - anyone - showing up at the same time offering up their rebuttal not only to Obama's bill but also to his tired class warfare rhetoric. Of course, being the GOP, they would rather fire at each other than at the one person they can all agree doesn't belong in the White House.
According to Howard Kurtz, Obama 'tested' with reporters his attacks on the so-called 'corporate high fliers and hedge-fund managers'.
Funny, I thought the job of a reporter was to report on what was happening, not to serve as a sounding board for a particular candidate's campaign strategy.
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