While the global economic meltdown has caused immense problems, it might have dealt a major jump ahead to my plan to have my own island nation:

The Greek state must sell stakes in companies and also assets such as, for example, unpopulated islands,” Frank Schäffler, a member of parliament for the pro-business Free Democrats, told the Bild daily.

Marco Wanderwitz, an MP for Merkel’s own conservative Christian Democrats, said Athens should provide collateral for any money it receives from the European Union to help it out of its debt crisis.

“In this case, certain Greek islands also come into question,” added Wanderwitz.

“We give you cash, you give us Corfu,” the Bild commented.

Greece has around 6,000 islands off its coast, of which only 227 are inhabited, according to the country’s National Tourism Office website.

The Kingdom of Berg, at the corner of the Adriatic and the Med.  Of course, we’d have to import snow, but that’s a small price to pay for being my own potentate.

Now I just have to get someone to pay me a ton of money.

It’s unclear who actually first used the aphorism “Democracy can only survive until the people discover they can vote themselves largesse from the public treasury”.  I’d always thought it was De Tocqueville, but a cursory search shows it could also be anyone from King George III to Jessica Simpson.  I just don’t know.

And, given yesterday’s news that Americans depend more on government than ever before…

Without record levels of welfare, unemployment and other government benefits as well as tax cuts last year, the income of U.S. households would have plunged by an astonishing $723 billion — more than four times the record $167 billion drop reported last month by the Commerce Department.

…and get more in bennies than they pay in taxes…

Moreover, for the first time since the Great Depression, Americans took more aid from the government than they paid in taxes.

…it’s really a lot less important to know who said it, and more important to see if the unnamed sage was correct.

Because we may just find out, here.

Says Alan Greenspan, the “recovery” at the moment is benefitting those who never really needed it in the first place:

Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economic recovery was “extremely unbalanced,” driven largely by high earners benefiting from recovering stock markets and large corporations.

Small businesses and the jobless are still suffering from the aftermath of a credit crunch that was “by far the greatest financial crisis, globally, ever” — including the 1930s Great Depression, said Greenspan in an address to a Credit Union National Association conference.

After a year of “stimuli”, the “recovery” seems to be focused on big businesses and government workers:

“It’s really an extraordinarily unbalanced system because we’re dealing with small businesses who are doing badly, small banks in trouble, and of course there is an extraordinarily large proportion of the unemployed in this country who have been out of work for more than six months and many more than a year,” said Greenspan, who headed the Fed from 1987 to 2006.

With both housing starts and auto sales “dead in the water,” he said he thought it would be difficult to make the case that the economy is poised for a strong rebound.

At best.

Conservatives and Republicans have observed – sometimes jokingly, often not – that Barack Obama shows every sign of becoming the next Jimmy Carter.

What would it take to complete the impression?

Why, stagflation, of course; the unholy union of price inflation (due to rampant spending and the crushing constriction of credit due to out-of-control federal deficits) and high unempoyment.

Is it baaaaack?:

The number of U.S. workers filing new applications for unemployment insurance unexpectedly surged last week, while producer prices increased sharply in January, raising potential hurdles for the economic recovery.

Unemployment up.  Economy stagnant.  Inflation ratcheting up.  Iran throwing its weight around.

I feel like I’m 16 again.

Sales of “Dubya” memorabilia are spiking…:

Demand for the items spiked after a billboard featuring the ex-commander in chief appeared alongside a rural Minnesota highway last week, stirring up buzz.

CafePress spokeswoman Jenna Martin said sales of Bush-related products virtually disappeared after Obama replaced him.

But last week, she said, 10 of the firm’s top-selling 100 designs were “Miss Me Yet?” items, moving to the tune of up to 500 orders a day.

…as sales of Obama items (not to mention Obama-themed stores and Obama radio stations) crater:

“There were no Obama-themed designs on the list – Bush has stolen the political spotlight, just like Sarah Palin did the week before when she re-surfaced with crib notes written in her palm,” she said.

I’m not saying we need to imbue this factoid with any significance at all.

But if it means those wretched “Obama Tells Mothers To Go Back To School” and “Obama Backs Insurance Regulation” get pulled one of these days, I think we can all agree it’s for the greater good.

“An area in the Healthcare debate where Republicans and Democrats agree!”, NPR’s “Marketplace Money” trumpeted last night.

“Only in the most trivial possible way, I’m gonna guess“, I thought, turning the radio up.

Am I ever wrong about these things?

Naturally, the Democrats favor a form of “competition” that has all the “competition” regulated out; essentially, the Tic version of the idea looks more like “privately-administered socialized healthcare”, only marginally less noxious than Obamacare itself.

The Republican plan would allow insurance companies to sell across state lines, more or less the say car, boat and motorcycle insurance works today.

Naturally, it’s sparking debate; conservatives welcome competition…:

Proponents of the idea say that the tangle of state regulation drives up costs, particularly in states with heavy mandates, and that a quick and easy way to reduce prices would be to allow people in states where insurance is expensive, like New York or Massachusetts, to buy policies in low-cost states like Minnesota.

Mr. Shadegg, who sponsored legislation to allow insurance sales across state lines in 2005 and has championed the idea ever since, likes to illustrate the lack of competition by pointing to how different the market is for automobile insurance.

“If you turn on the television station at night,” he said, “you see Allstate and Geico and Progressive and State Farm pounding each other’s heads in. ‘Drop your policy and come get a policy from us, and we’ll do two things — we’ll save you money and give you better service.’ You never see that kind of advertisement for you and I to go out and buy health insurance.”

But Mr. Shadegg adamantly opposes the Democrats’ take on the idea. He dislikes their requirement that states pass laws to create health care “compacts,” and he rejects the Democrats’ efforts to impose tight new federal regulations on insurers. Replacing many knots of state rules with a big knot of federal rules would defeat the purpose, he said.

Democrats: “But if you allow people to choose their own insurance, some of them will choose insurance that costs less and has fewer regulations!”.

No, really:

President Obama and leading Democrats, however, warn that without new regulations, private insurance companies would race to set up shop in states with lax regulation, minimal benefits requirements and the fewest consumer protections.

The nerve of those peasants – picking out the insurance they need and can afford, rather than insurance that’s larded up with all sorts of costly mandated coverage that just might not apply to them.

“If you go to full interstate shopping, you are going to need some consumer protection,” said Senator Ron Wyden, Democrat of Oregon, a supporter of the idea. Still, Mr. Wyden said he believed that compromise with Republicans is possible. “There is a lot to work with here,” he said.

In addition to bringing better, less expensive insurance to more people (even left-leaning “All Things Considered” noted that while Minnesotans might not see much benefit because our insurance is already relatively cheap, over half of the people in New York and New Jersey could find better insurance cheaper under this plan.

Presuming they can do with fewer benefits and less regulation, anyway…

The President’s teleprompter mentioned “jobs” twenty nine times by my count. Unfortunately for the citizens of the United States of America, where “when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach” and blah blah blah, their President thinks creating a public sector job is something other than simply enlarging the government.

…and at the same time, is still hawking the now infamous “Two Million.”

Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed.

Who are these two million people?

200,000 work in construction and clean energy. 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, and first responders. And we are on track to add another one and a half million jobs to this total by the end of the year.

…and the other 1,410,000, sir?

All public employees, sir. With all due respect, we need jobs that “pay the bills,” sir.

The term “Clean Energy” or “Green Jobs” is a euphemism for “Government Subsidy” and “beauracracy”…and “Failure.” Sir.

The Obama administration’s call for green jobs as an economic savior initially sparked hope for economic recovery. But the federal funds have only dribbled into the sector

Among the victims: the plodding light-rail project in St. Paul; the massive layoffs at Suzlon’s wind turbine plant in Pipestone and the deep job cuts at New Flyer’s hybrid bus plant in St. Cloud, the site Vice President Joe Biden visited last year to herald the administration’s green initiatives.

…back to the teleprompter:

Now, the true engine of job creation in this country will always be America’s businesses.

…but not so much while Obama is President.

So tonight, I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.

More TARP? Jolly good idea, Mr. President, because the billions of TARP dollars already out there are getting lent out, right? The TARP that the banks that are lending, that are in good shape, are giving back to you with a “Thanks, but No Thanks”?

I am also proposing a new small business tax credit – one that will go to over one million small businesses who hire new workers or raise wages. While we’re at it, let’s also eliminate all capital gains taxes on small business investment; and provide a tax incentive for all businesses, large and small, to invest in new plants and equipment.

…like the health care reform you proposed? How’d that go?

Next, we can put Americans to work today building the infrastructure of tomorrow.

Read: grow government.

From the first railroads to the interstate highway system, our nation has always been built to compete. There’s no reason Europe or China should have the fastest trains

…ours will be faster because they will be empty!

or the new factories that manufacture clean energy products

…in China.

Tomorrow, I’ll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act.

…because if there is one thing Tampa needs, it’s a high-speed railroad.

There are projects like that all across this country that will create jobs and help our nation move goods, services, and information.

…how do you move a service? Sorry Mr. President, you were saying…

We should put more Americans to work building clean energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean energy jobs.

…like this?

And let’s tell another one million students that when they graduate, they will be required to pay only ten percent of their income on student loans, and all of their debt will be forgiven after twenty years

Why don’t we just give them the money when they’re born like Hillary wanted to?

– and forgiven after ten years if they choose a career in public service.

…or you could tell them to skip all that and just give them the job.

From the day I took office, I have been told that addressing our larger challenges is too ambitious – that such efforts would be too contentious, that our political system is too gridlocked, and that we should just put things on hold for awhile.

For those who make these claims, I have one simple question:

How long should we wait? How long should America put its future on hold?

…apparently about three more years.

Brett Favre’s unretirement offers a career lesson…for the rest of us?

Maybe we should all take a leaf out of Brett Favre’s playbook.

Not the last-minute interception: The delayed retirement.

The veteran 40-year-old quarterback just led the Minnesota Vikings to the conference playoffs–and within a whisker of the Superbowl–at an age when most of his peers have either faded to minor teams or hung up their cleats altogether.

Mr. Favre first toyed with retirement two years ago, before choosing to stay in the game. He’s now halfway through a two-year deal with the Vikings and is reconsidering whether to come back next season, following Sunday’s pounding by the New Orleans Saints when he limped off the field with bruises, cuts and a sprained ankle.

But with Brett Favre, who knows?

As a broken-hearted Minnesota Vikings fan…you decide.

I heard about this from – I kid you not – NPR yesterday.  (Allah also bumped it today.) Insanely entertaining and yet still relevant.

A year and a half ago, pundits speculated that Barack Obama, if elected President, would either work to move the country far to the left in pursuit of a liberal ideology and to satisfy decades of pent-up liberalism or govern from the center in the interest of furthering his personal ambitions and extending the pinnacle of his political career.

The first year of the Obama Presidency ended all speculation. Ideology trumped ambition, and it’s been a disaster for the President and for Democrats.

January 20th marked the beginning of his second year and also served as a demarcation between the pre-Brown and post-Brown era for the Obama Presidency.

This week offers peril and opportunity for the President to elucidate his New New Way Forward, if like many Democrats recently, Obama acknowledges the Coakley defeat as the comeuppance that it was.

Mr. Obama’s campaign-style speech here capped one of the most bruising weeks of his year in office. The President traveled to this swing-state manufacturing town ostensibly to deliver a speech about jobs and the economy, but instead he repeatedly veered off-script to interject pledges to battle his political foes over health care and other issues “so long as I have breath in me.”

Sadly for alert Democrats and in an inconceivable dream scenario for Republicans, instead of shifting gears from health care reform to job-creation; to align Washington with the rest of America, Obama opted this week to cement his station as an ideologue. Without regard for fairness, public sentiment or for that matter, securing a second term, the President declared war on the banking industry, sending the market into a minor (thus far) sell-off, undermining sentiment tied to economic recovery, and positioning himself within a new Democratic sub-minority, of, well, he and Nancy Pelosi. Even Barney Frank has said “Uncle.”

Save for later the discussion of the fact that his edict fails to recognize the corruption and culpability of Fannie Mae and Freddie Mac, both being spared, and the fact that we already have procedures in place such as increasing reserves and FDIC premiums to protect the system and “punish” banks for taking on excess risk. I’ll also forego the well-worn but valid discussion of the of the fact that much of the risk-taking at issue was forced upon them by government policy and that some of the corporations and practices Obama named specifically had nothing to do with the financial crisis.

[Treasury Secretary Timothy] Geithner is concerned that the proposed limits on big banks’ trading and size could impact U.S. firms’ global competitiveness, the sources said, speaking anonymously because Geithner has not spoken publicly about his reservations.

He also has concerns that the limits do not necessarily get at the root of the problems and excesses that fueled the recent financial meltdown, the sources said.

Lawrence White, a professor at New York University’s Stern School of Business and a former regulator, said Obama’s proposals were “a solution to the wrong problem.”

Ironically, these policies may result in the transfer of some pretty good jobs from Wall Street to Europe.

The new rules would ban the use of a bank’s own capital for hedge fund or private equity investment, or for trading unless it was directly connected to client activity.

However, some foreign banks believe they could escape the ban by switching their operations from Wall Street to London or continental Europe.

What Obama’s proclamation does represent is a presidency inexorably out of sync with America; especially the meaty middle, whose voice was heard load and clear in Massachusetts this week. A years’ experience has done little for a man who has never held a real job, owned a business, or exhibited a basic comprehension of the fundamentals of economics or a genuine acknowledgment of the gift that is free enterprise.

Mr. Obama’s display of anger with big financial institutions and insurers may not reassure voters who are dubious about his proposed solutions to the country’s economic problems.

Barack Obama has essentially been out of touch his entire, calculated, and increasingly apocryphal political career and may soon find his presidency floundering having sailed his most avowed mission to reform America’s health care system into a tsunami of taxpayer revolt.

Despite the fact that his policies have been soundly rejected and support within his own party is eroding, Obama’s political capital and popularity aren’t completely exhausted. The opportunity remains to move quickly to realign his presidency with the pressing needs of an American citizenry that haven’t yet completely lost hope in him.

most continue to like and respect the man they gathered around televisions to watch sworn in as president on a cold noon hour a year ago, and most still hold out hope for his presidency. Yet many also worry that, in his quest to mobilize government to solve the nation’s problems, he may have moved too far too fast.

If Obama’s upcoming State of the Union address focuses on restoring full employment, judicicious enhancements to the regulations that govern our financial system, and a renewed confidence in America’s ability to recover, rebuild and prosper once again, Obama’s may find his stock rising again.

“In his State of the Union, Obama has to slim down his ambitions. It should be short and simple and focus on jobs.”

“Obama has to decide whether he wants to be a transformational president, which looks optimistic at this stage, or merely an effective president,” says Bruce Josten, head of government affairs at the US Chamber of Commerce

Odds are, Obama will continue on his latest vector: vilifying banks, demonizing those who would dare seek an honest profit, penalizing employers, mushrooming the federal government and broadening an ongoing orgy of government spending under the guise of economic timulus, which is almost as dirty a word now as health care reform.

In short, Mr Obama’s nightmare January could easily slip into a nightmare February. “Unless and until the president changes the way his White House, works, things are going to continue to go badly for him,” says the head of a Democratic think-tank.

In turn, this will continue to fuel the tea party movement, mobilize the middle, neuter the left and manifest a Jimmy-Carteresque dreamscape only the most opportunistic Republicans could envision before last Tuesday night.

Only Obama’s teleprompter knows which path the President will chose.

Yesterday:

According to Jim Cramer, a victory by Republican Scott Brown in today’s Massachusetts Senate election will spark a market rally on Wednesday.

Today:

Stocks Post Biggest Drop Since October

As a part-time blogger and full-time wealth management advisor, can I give you some free advice?

Jim Cramer is an entertainer.

Nothing more.

You’re welcome.

There are some government regulations that just seem, to people of all political stripes, to just plain make common sense.  Keeping rat hair out of our food supply?  Making sure our medication is actually medication, rather than dog urine in a drop pouch?  Making sure our airline pilots are qualified to fly the planes and, if the situation warrants, ditch them in the Hudson successfully?  No matter how orthodox a free-marketeer one is, it’s hard to argue with these.

And when big, bad, arrogant airlines make victims passengers sit on the tarmac for hours and hours, waiting for takeoff permissions that due to our overcrowded airports and snarled air traffic control system might never come, or at least may be very very tardy, as infants start to squall and toilets back up and flight crews have to change due to (yet more) government regulations?   These incidents – which garner all sorts of news coverage when they happen – are utterly infuriating to hear about; the most hardeded free-marketeer can imagine the smell, the sounds, the claustrophobia, and the sense that one is nothing but a particle in a badly-managed industrial stream.

Well, who could possibly argue with banning the practice?

We’ll come back to that.  But remember: all government actions have unintended consequences.  Often, especially with regulations that seem moderately innocuous on the surface, the unintended consequences are problems that are far worse than the one the regulation was originally intended to deal with.

“Penigma”, blogging at “Penigma”, notes that the Obama Administration is proposing new rules requiring airlines to deplane passengers after a three-hour wait.

This post could be several hundred pages,

[Those of you who know Penigma’s history as a commenter know – he’s not exaggerating. Ed]

but I’ll try to keep it down to about four paragraphs.

[It came to nine – Ed.]

Two days ago, the FAA under the Obama Administration mandated that should anyone be stuck on a plane more than two hours, they must be given food and water, and the lavatories on the plane must be operable and available. If they are stuck more than three hours, that the plane must return to the gate and off-load the passengers. Between Jan 2009 and June 2009, there were 631 incidents of planes sitting on the tarmack [sic] for more than three hours, so any of us who travel often deeply appreciate the change and probably even say, “FINALLY!” to the idea that this was a long-needed redress of an abusive and aggregeious [sic] practice by the airlines.

As someone who gets a little claustrophobic on planes (I’m 6’5, and planes these days are not built to be even remotely comfortable for anyone over a relatively lilliputian 6’0), I’ll testify; waiting on the runway sucks.  And the longest I’ve had to sit was probably 90 minutes, coming back from New York last year. 

But remember that number and the process behind it; last year, the proposed rule would have required 631 planes to return to the terminal and deplane.

Penigma doesn’t mention that this rule is accompanied by big fines.

The reaction from the airlines was typical. One commented that this ran counter to the idea of getting the most flights completed, which was the ‘goal’ the commenter said they were required to meet.

Now, I’m not sure why Penigma opted to put scare quotes around “goal”; flight completion is a pretty vital metric for airlines.  And once an airliner pushes away from the boarding gate, it’s considered to be on its way; returning to the terminal is a complex process that involves a lot more than just marching people off the plane back to the terminal; at busy airports, boarding gates are tightly scheduled; the luggage will need to be taken off the plane and held somewhere, and probably sorted according to whatever plan emerges to get the passengers to their destinations.  It’s a lot of work.  But it’s a huge problem.

Right?

We’ll come back to that shortly.

So here’s the point – Obama acted in my opinion where Bush and the Republicans would not have.

Penigma being a clairvoyant, perhaps he should start predicting stock markets on his blog.

Bush would have made platitudes about letting the market correct the problem and that any ‘regulation’ here was overkill and unnecessary – as he so frequently did on a myriad of issues.

Well, yes. And for good reason.

Because as it happens economist John Lott also commented on the issue.  And yes, Lott is a bit of a free-marketeer:

It seems like such an obvious regulation right? It is important to note first that airlines have a strong incentive to get things right to begin with. If they keep people a long time on the tarmac, people won’t fly their airlines again.

It’s no secret; airlines that develop bad reputations start to shed passengers; I know that on the rare occasions when I fly at all (anything less than a ten-hour drive is actually better spent in the car, unless someone else is paying me to make the flight), I actively eschew airlines with awful reputations (you hear me knocking, NWA?) for leaving planes on the runway.

But since Lott’s an economist, let’s talk numbers:

This year through Oct. 31, there were 864 flights with taxi out times of three hours or more, according to the Bureau of Transportation Statistics. Transportation officials, using 2007 and 2008 data, said there are an average of 1,500 domestic flights a year carrying about 114,000 passengers that are delayed more than three hours. . . .”

That is an annual rate of 1,037 flights this year. For 2007 and 2008, it is an average of 822.5 million passengers and 10.94 million flights. So that is 0.01 percent of passengers were on flights delayed by more than three hours and 0.01 percent of flights.

In other words, one out of 10,000 passengers and flights are ever delayed by three hours or longer.

So what happens (I’ll add emphasis)?

 Given the huge fines per passenger, airlines won’t even put people on planes if there is a chance that the plane won’t take off soon. Zero tolerance rules also make about as much sense here as they do for schools or anything else.

Given the fines involved, it’s entirely likely the airlines will play it “better safe than sorry”, and not only scrub flights that are getting close to the three-hour limit, but flights that have any risk at all of going over the limit.  Weather closing in on O’Hare? Scrub all connecting flights!  Blizzard approaching Denver?  Scrub every flight that will connect through DIA!

Instead of one in 10,000 passengers waiting on tarmacs for three hours or more (as galling as that is), you’ll have many, many times that number stuck in terminals trying to find connections, while the airlines quite sensibly protect themselves from huge fines.

Passengers value getting to their destinations and they also value not being stuck on planes, but who is best to make those decisions? The customers or the government? It is also costly to return passengers to the terminal and remove baggage from the planes before the three hours are up. If airlines make the wrong decisions, what do you think will happen to whether passengers are willing to take their planes. If this is a significant problem, should airlines be competing against each other for passengers based on this issue? The rules will make the airlines more risk averse than passengers want them to be. One clear implication is that this will raise the price of air travel.

But then, in the era of Hope and Change, we must ALL be happy to pay more.

Information, as usual, would make the market work better…:

There are probably a range of responses that different airlines will take on their own. If you are in first class, you probably get served a lot even when you are on the tarmac. Some airlines will serve passengers in coach more than others. Those services cost something and passengers can pick the airlines that they want based upon price and whether they are willing to save a few dollars and take that additional risk. People can bring water bottles on the plane with them if they would rather save a few dollars and do it that way.

Lott also notes that the Feds are framing this to the airlines in the form of “an offer they can’t refuse”..:

What bothered me was a report that the transportation department warned airlines not to appeal the decision.

Fortunately for the travelling public (those that will be able to afford to fly at all), America’s air terminals are places of scenic wonder, where one can meditate.  Think “my flight got scrubbed for the greater good.  My flight got scrubbed for the greater good”.

When the state economy, dragged the the abysmal national economy – got dragged down last year (albeit to a much lesser extent than the rest of the nation, though much much much more than neighboring low-tax, low-“service” North and South Dakota), the local Sorosphere and lefty pundocracy leapt about like poo-flinging monkeys on Red Bull; “It’s Timmy’s recession!  It’s Timmy’s recession!”, they yapped, and there was even evidence that some of them knew what a “recession” was.

So with the news that it wasn’t that bad, and that Minnesota – fresh off Pawlenty’s successful rear-guard action against the DFL’s “Happy To Spend Money Like Crack Whores With Stolen Gold Cards” attempted spending spree last session – is S recovering faster than most of the nation (at least, the parts of the nation that got into trouble  by being high-tax and high “service”in the first place)…:

The state gained 2,000 jobs in November, according to figures released Thursday that also contained a revision of October’s results that showed twice as many jobs were created that month as originally thought.

“Compared to where we have been, this is just really good news. I am not ready to start singing ‘Happy Days Are Here Again,’ but it looks like we are headed in the right direction,” said state economist Tom Stinson.

{{crickets}}

Where do you find crickets in December, anyway?

1977:  Home ownership should be increased via government incentives and if necessary penalties for those that don’t lend money to people that can’t pay it back.

Result:  The Great Recession.

2009: Access to banking services should be increased via government incentives and if necessary penalties for those that don’t offer banking services to people that don’t have any money.

Result:  [insanity]It’ll be different this time folks.[/insanity]

A report from the (coincidentally insolvent) FDIC:

Consider defining a national shared government-industry
goal to lower the number of unbanked and/or underbanked
individuals and households…

There are people that have never been banked?

Do you know anyone that is “underbanked”

“[There is] an imperative for government and industry to expand financial access to the substantial number of households that have never been banked,”

…or “unbanked” (!!!!!!!!!!!)?

A push to extend basic services such as accounts to poorer communities with patchy credit histories would be especially sensitive because of the role of the subprime mortgage crisis in sparking the recent turmoil.

Ya think?

Not having enough money to need an account was the most common reason cited for staying outside the banking system. One third of households that no longer had accounts said they closed them because of the cost of maintaining them, such as minimum balance requirements, service charges and overdrafts.

“As a society, we should make banks cover these people.”

That’ll have a positive outcome.

But wait! We already have a solution here in the Twin Cities…it’s called Twin Cities Federal*. $50 for opening up a free checking account; $25 for referring your friends, open 7 days a week.

The bank for the underbanked…no TARP required, thank you.

*Johnny Roosh does not endorse Twin City Federal and was not paid a fee to mention them. Yet.

Last quarter’s “numbers” confirm that the stimulus didn’t stimulate, clunkers was one, the unemployed are still growing in ranks and the consumer is still cowering at home. Democrats are looking for someone to take the fall when in fact they are all making exactly the wrong moves economically, and soon time will show, politically.

One big difference between Washington and private markets is that politicians think everything they do is free-standing. Markets, however, combine all the potential costs of Washington’s policies and then decide whether to invest, or not. Consider what private decision-makers [read job-creators; employers-JR] see in their future:

A 2,074-page, trillion-dollar health-care bill to redesign 17% of the U.S. economy. A carbon tax—cap and trade—that remains an Obama priority ahead of the Copenhagen climate summit next month. A falling dollar and gyrating commodity prices, with no idea where those prices will go next.

Democratic liberals are talking about an income tax surcharge to pay for any commitment in Afghanistan. Card check, to expand unionization of the private economy, remains a priority. Domestic discretionary spending in fiscal 2010 is set to rise at 12.1%, with inflation near zero.

Nurturing a fragile economic recovery into a durable expansion requires policies that restore public confidence and reassure investors, risk-takers and employers. The Democratic agenda is doing precisely the opposite, which is how you get subpar growth and fewer new jobs. [emph. mine-JR]

High unemployment will progressively weigh more heavily on a Congress and Administration that has shown how ill-equipped and out of touch they have become they have been all along. They remain without a clue as it regards restoring our economy in a way that is meaningful for their constituents: jobs growth.

At the same time, they have failed to capitalize politically on the crisis (they themselves created), revealing how utterly failed and irrelevant their policies and leadership have become. How effectively they have shown once again that they are the wrong party at the wrong time, or at any time.

…and a hole in the ground.

But an investment? …not so sure any more.

Another advisor and I were just talking about this over lunch on Friday: is one’s home an investment or just a place to live?

The former is only true to the extent that paying off the mortgage and residing in a home long-term is at best a forced-savings plan.

Between 1975 and 2008, the price for houses of comparable quality and size appreciated an average of about 1 percent per year after inflation. You would have earned well over 2 percent per year after inflation had you invested in Treasury bills over the same period. And you would have earned even more on riskier investments: After inflation, Moody’s corporate bond index rose an average of 6 percent per year between 1975 and 2008, while the S&P 500 stock index rose an average of 8 percent per year. Most of the return from owning your home comes not in financial gains but in the benefits you enjoy by living there.

One percent – now figure in the new roof every twenty years, interest, property taxes and other maintenance factors and renting starts looking real good about now.

Short term, home values may stabilize but they are unlikely to grow in value, at least in a sustainable fashion, any time soon. Any bump in values may very well be met by house-poor baby-boomers taking the first opportunity to dump homes larger than they need as their progeny jet off to university and their advisors tell them to take the equity and run.

Economists and real estate experts are grasping for any indication of how much “hidden supply” is out there waiting to come to market. First, there are home buyers who would like to sell but are waiting for better market conditions.

Moreover, the government allows a once-every-five-year opportunity to harvest a half million in equity tax free (for married couples; a quarter million for singles) for your primary residence.

Both of these factors will apply downward pressure to home values for the foreseeable future. The message? It’s all about your time horizon.

If you are young and plan to own a home for twenty years or more, owning will probably still make sense. If you are a late fifties executive living in a home better suited to a family of five, three of which are long gone, you’re probably waiting for the market to pop up so you can sell and invest the proceeds for retirement.

…and rent a nice condo from now on. There isn’t enough time to outgrow the opportunity cost of the down payment or transactional friction of  closing a mortgage and real estate commissions on both ends.

It’s true that if you own, you don’t have to write a check to a landlord. However, you have to cover all the costs of maintaining the house. It is the same house with the same operating costs, whether you pay them directly or whether you pay rent to cover them. By covering these costs as the owner-occupier, what you spend (including your mortgage payment) comes very close to what you would have spent if you rented your house.

Many of us own because it is a way to commit to saving by building equity over time, but we should not expect to make large profits. Housing is an expensive durable good, and durable goods are costly to maintain. The main reason to own is because you really like your home, not because you think it makes you money. It doesn’t.

The Great Recession is proof that the government’s (and especially Barney Frank’s) reach exceeds it’s grasp as it regards converting The American Dream of home ownership into The American Entitlement. So if you are in the market for a home for the first time, don’t let Obama’s tax credit sway you.

Just because you got an $8,000 tax credit toward the purchase of a home doesn’t mean that you actually saved $8,000. In areas where there is strong demand for housing and the supply of new housing is limited — including the Washington metro region — tax credits may result in the bidding up of home prices. In other words, the program has probably led to higher prices in these areas than we would be seeing without it. This means that some of the benefit of the tax credit is being passed on from homebuyers to home sellers.

Plus, anyone that jumped on this deal in 2008 has to pay it back.

As a result of ill-advised liberal intervention, a sea change is afoot as homeowners shaken by the economic carnage of late are questioning any and all assumptions they held dear just a short eighteen months ago.

Ironically, the virtue of home ownership may be one of them.

Check this out.

OK. Closer to Zero.

G. Edward DeSeve, who runs the government’s economic recovery program, says the errors are “relatively few” and “don’t change the fundamental conclusions one can draw from the data.”

Correction: The fundamental conclusions The One can draw from the data.

This is how a recession gets fixed…

A crop of potentially groundbreaking companies is emerging from the wreckage of the Great Recession. No question, some will blow up, and others will fail to reach their potential. But the downturn has done little to dampen the entrepreneurial spirit. During the first half of this year, angel investors financed 24,500 new ventures, 6% more than during the same period last year, according to the Center for Venture Research. The overall amount of money going into startups has declined, but the figures suggest that this year will see the birth of roughly 50,000 companies with enough promise that someone is betting money on them. “It may be that this is the best time to start a company,” says Carl Schramm, president of the Kauffman Foundation, an organization that promotes entrepreneurship.

History shows that great companies are often built during bad times. In 1939, at the tail end of the Great Depression, two engineers started Hewlett-Packard (HPQ) in a garage in Northern California. Silicon Valley itself was largely created during the nasty recession of the mid-1970s. During that decade, entrepreneurs laid the groundwork for the boom of the 1980s, building companies that pioneered three new industries: Atari in the video game business, Apple (AAPL) in personal computers, and Genentech in biotechnology. “The only people who venture out in tough times are on a mission, which is what you need,” says Michael Moritz, managing partner of Sequoia Capital, a venture capital firm that invested in Apple back in the ’70s.

The entrepreneur; the capitalist, seeking the American dream of wealth and freedom, has always been the seed of who we are as a nation, our standard of living and what we’ve done for other nations. Despite Michael Moore’s attempts to discredit it, and Barack Obama’s attempts to destroy it, capitalism is still our only hope for recovery.

The silver lining in The Great Recession…you can afford to invite more in-laws over this Thanksgiving.

This year’s survey, released yesterday, put the cost of feeding 10 people at $42.91. The grocery bill fell 3.8 percent, the steepest reduction since its 4.3 percent drop at the start of this decade. The slump was also the first since 2004.

Don’t miss the click-through to a graph of Class 1 Whole Milk prices – fun!

It’s The Unemployment, stupid.

The announcement a week ago of 10.2% unemployment is a significant political event for President Barack Obama. It could well usher in a particularly serious crisis for his political standing, influence and ability to advance his agenda.

Double-digit unemployment drove Ronald Reagan’s disapproval ratings in October 1982 up to a record high 54%. It was only when unemployment dropped to 7.3%, roughly two years later, that he was able to win a landslide victory over Democratic challenger Walter Mondale in the 1984 presidential election.

Alas, Barack Obama will not have the same opportunity that Reagan did – he doesn’t have the tools (the ideology)…or the people.

Barack Obama is all-in already with his “Stimulus Plan” in the sense that

1) He wants us to think that it’s working, and it is not.

2) As such, he doesn’t want us to think that his Stimulus Plan made things worse, which it did.

Had Barack Obama given America the message that they should have had, that they deserve, it would have been something like this:

Dear fellow Americans: You’ve lived beyond your means and so has your government, and now we must all pay the painful price as our economy returns to a more normalized state. We in the federal government will do what we can by extending unemployment benefits and such, but beyond that, as much as you will hear otherwise from those on the far left, stimulus programs and other gargantuan government spending programs will only worsen and extend the inevitable pain we must all go through to right the ship.

Instead, he doubled down on the failed fiscal policies of George Bush and simply dug the hole deeper.

Now the hole is filling with water and Barack Obama can’t get out.

Obama’s only option politically is to lobby for more stimulus spending and sell the American people on the efficacy of the last one. The former will fall on deaf ears as the deficit becomes an issue with the American people; the latter as the din of high unemployment washes over Obama’s Teleprompterings^™.

His dithering on Afghanistan and misappropriated focus on health care “reform” will be transferred to his economic impotence, and so on and and so on.

A look at more detailed data shows why Mr. Obama’s ratings are likely to drop even further.

A CNN poll released Nov. 6 found that 47% of Americans believe the top issue facing the country is the economy, while only 17% say its health care. However, the bulk of the president’s efforts over the past six months have been not on the economy but on health care, an issue in which he continues to draw negative ratings.

In a Rasmussen Reports poll taken after the House of Representatives passed health-care reform by the narrowest of margins last Saturday night, 54% of likely voters say they are opposed to the plan with only 45% in favor. Furthermore, in the all-important category of unaffiliated voters, 58% oppose the bill. That’s one of the reasons why so many moderate Democratic House members opposed it.

The CNN poll also shows that in addition to health care, a majority of Americans disapprove of how Mr. Obama is handling the economy, Afghanistan, Iraq, unemployment, illegal immigration and the federal budget deficit. Put simply, there isn’t a critical problem facing the country on which the president has positive ratings.

The only way the President gets out of this alive is to willfully and publicly abandon the failed liberal approaches to virtually every issue that has presented itself in his short Presidency.

What are the chances?

Mr. President, Mr. Rock.

“Hello, nice to meet you.”

“Likewise, Mr. President.”

Mr. President, Mr. Hard Place.

“Hello, nice to meet you as well.”

“It’s an honor, Mr. President. Thank you for inviting us into your Presidency. Should we get started?”

2012.

Indeed.

Michael Regan thinks a great GOP resurgence may be afoot.

Republicans have dramatically turned around their fortunes with two high-profile gubernatorial victories in Virginia and New Jersey — both by comfortable margins.

Wouldn’t it be swell if this anticipated resurrection were due to the GOP being on point, producing a clear and wide message to voters and not simply because of Che Obama’s blowback?

In almost a year, the Obama administration and congressional liberals have focused their efforts so far left so much faster than anyone envisioned…and at the same time accomplishing nothing. They are making the Gingrich years look productive.

Nancy Pelosi is dancing a jiggly jig having passed a health care bill that has no chance of surviving the Senate in tact while unemployment climbs higher than predicted without the stimulus.

[gulp]

Not that anyone predicted this.

…and Americans are getting pissed.

Imagine the possibilities if the GOP actually gets it’s ducks in a row.

Interesting webtoy from the NYTimes for figuring and visualizing unemployment trends by demography, age, gender and edumacation.

White college educated males (Mitch raises hand) over 45 are around 4.1% so far.  Which is up from somewhere around 2% two years ago.  Rates for women in pretty much every combination seem to be lower than for men, indicating that feminists can quit their whining about the unfairness built into the system.

Black males from 15-25 without high school diplomas are up toward 50%, unfortunately; the rate drops by about half with a high school education, and half again with college; the feminization of poverty would seem to have missed a spot.

Question:  I wonder if anyone’s done crosstabs for people who were home-schooled, charter-schooled, parochial-schooled or alt-schooled versus recent public school graduates?

This past week Keith Ellison issued a breathless, well-worn and blatantly specious (if not utterly ignorant) monologue to justify the further distension of the bowels of the federal government via yet another bloated agency. As I read his drivel, in my ears rang the sultry voice of classic SNL fixture Jane Curtain, warbling on and on and on; aptly blunted by Dan Ackroyd’s signature catchphrase.

the American dream of home ownership, and borrowing generally, washed up on the shores of a financial disaster — the most serious since the Great Depression.

One cause (there were many) was the failure of our system of consumer financial protection. No one was there to review transactions or protect consumers. The proposed Consumer Financial Protection Agency provides the lifeline that consumers need.

Oh, someone was there. Federal regulators were there, telling banks they couldn’t borrow funds at the best rates unless they met certain ratios of mandated risky sub-prime transactions to the prudent and secure deals banks would normally seek.

A free market cannot be held culpable if it is not free.

These so-called predatory lenders Keith, were not only incented to push unqualified home buyers into loans they couldn’t afford, they were strong-armed to do so via quotas and measures put in place during the Carter administration and given teeth during the Clinton administration. Sadly, G.W. Bush failed to preemptively unwind the brewing disaster despite the behest of Senator John McCain, among others.

The government-inflated and guaranteed demand for housing and all the furnishings that go inside created a bubble with all the periphery that usually comes with one. It ended as they usually do – otherwise we’d not know it was a bubble, now would we?

If anyone needed regulatin’ it was the regulators.

The American Dream is just that, Keith. Home ownership, while beneficial to all of us, is not a Government-Given right. With rare exception, when liberals act with politically motivated and self-serving mandates under the auspice of a “lifeline”, disaster follows close behind.

…and that disaster, our Great Recession, is the direct result of exactly the same type of programs Mr. Ellison and his ilk offer as it’s “solution.”

No one around here shall be surprised by the Star Tribune’s confusion of a deliberate expansion of government with the genesis of a sustainable economic recovery.

From new dishwashers for the Albert Lea School District to a new counterterrorism police force to patrol buses and trains, federal stimulus money is pouring in to Minnesota and has directly preserved or created 11,800 jobs so far, state officials reported Monday.

I am sure the dishes at Albert Lea need to be washed and there is no doubt buses and trains need to be kept safe but federal stimulus dollars might just as well be called what they are; broad-based spending of future taxpayer dollars.

Normally called pork but in the heat of a crisis caused by liberal meddling during the watch of another Nobel Prize-winner, the very same wasteful practices that used to give liberals a bad name are now lauded for their “stimulation.”

But of what?

Management and Budget Commissioner Tom Hanson said statistics showed that the stimulus money “puts people to work,” and was having a “snowball effect” by indirectly sparking more job growth. As an example, he said, a highway construction job in Minnesota made possible with federal stimulus money might cause a company to buy a bulldozer from Tennessee that also meant jobs for workers at an out-of-state factory.

…or they might not buy that bulldozer because they might not be stupid enough to think that this economy is coming back any time soon. One project awarded by and funded with government dollars does not a recovery make.

Smart business owners and consumers alike are now finding ways to make the old bulldozer do the work instead of buying a new one simply because the bank will lend them the capital. Easy credit is long gone for the foreseeable future and even if it wasn’t, businesses and consumers will not soon be lured again into the tender trap of “buy today, pay tomorrow.”

The American consumer can no longer drive two thirds of our economy and like their banks, will spend the next several years rebuilding balance sheets by paying off debt, shoring up diminished retirement accounts and accumulating cash reserves to replace buffers formerly consisting of home equity credit lines and credit cards.

As for “Stimulus” spending and it’s true impact, any relief, dubious as it is, will continue only as long as the stimulus dollars keep flowing. Don’t believe that? Just ask your local car dealer how they’re doing now that the Clunkers Cash has dried up.

Government dollars are probably well spent on temporarily extending unemployment and health care benefits until workers claw their way back into the workforce, but continuing to borrow, tax and spend to create temporary relief will cause potentially permanent and devastating damage to our economy, leaving us worse off in the long run.

It is this very prospect, the fallout of our continued fiscal irresponsibility, that is sparking interest in stripping the US dollar of it’s current de facto status as the world’s currency. A national disaster that at best would force us to quickly revert to a low-wage manufacturer nation and at worse result in a catastrophic collapse of the dollar and our economy.

In either case, a catastrophic collapse of the Democratic Party’s reign looms inevitably as the inexorably slow recovery and sustained unemployment will surely outlast the diminishing effects of empty rhetoric, impotent stimulus packages and the patience of unemployed workers.

In the mean time, President Obama and his misguided policies serve only to distract and delay the healing that only the forces of capitalism can effect; the painstaking process of reorienting, realigning, innovating and ultimately forging true and sustainable models for America’s next economic era.