Hurray For Markets

We spent a couple of days at the PGA Championship and were out of touch.  It was great fun.  We ha got to see Rory, Jordan, Zach, Phil, Steve, and many others up close.  Make sure you go on practice days so you can take pictures.  As the Tournament starts they have roving folks tasked with making sure nobody is using camera phones in certain areas.  They have special bibs to identify themselves.  We tried to get the ironic picture but it didn’t wok.  It is a change from the US Open of 2002 when phones were forbidden on the grounds.

When we bought gas on the ride home prices had jumped to $2.75 a gallon, or about 35 cents.  We were confused as we had last heard that gas prices were expected to decrease.  Then we saw, literally saw a friend on TV but we only have a print site, that a refinery had shut down.  We should all be impressed on how quickly the market reacted to the problem and resolved it.  Let’s be amazed by the ability of the market keep this situation from becoming a crisis.  We pay a little more, about 15%, or drive a little less for a few weeks and everything can go back to normal.  We hope that governments will learn from this example to trust markets.

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Facebook Fun

It showed up on Facebook from If You Only News.  The Facebook version says, “GOP Hatred Loses Ground …. Call him Oblamer, Obummer, Obama Bin Laden all you want, Teabaggers.”  That almost broke our irony meter.  The left combats clever, we like Oblama, and less clever word play with slurs and complains about hate on the other side.

Jeb, Ramesh, and Four Percent

Ramesh Ponnuru has come out against Jeb’s goal of four percent growth.  We should remember that Ponnuru’s primary goal is to increase the rewards for raising children when evaluating the discussion.  As everyone recognizes, that policy would not have an impact on growth in the near term.  The first argument is that it will distort policy.  That doesn’t seem likely that the goal will provide the inputs for government computations.

The second is one we should take seriously.  Governments have limited opportunities to have an impact on productive activities and conservatives should be wary of that.  For example, Obama has done everything in his power to stop fracking but has been unsuccessful.  Fracking has helped keep the economy afloat.  Should Obama get credit for that?  There are also decision that have longer-term and shorter-term impact on growth.  As Hillary says, we shouldn’t be fixated on the current quarter’s growth but such a goal might (we are not convinced) make that happen.  On the other hand, we remember when UAW timed its strike of Ford and all but assured that Carter would beat Ford (Gerald – not the car maker) because the last quarter of growth before the election would be lousy.

Count us in for supporting four percent as a goal.  It has some shortcomings but it seems perhaps the best way to put growth as a priority.  We are open to alternative rallying cries but after the disaster of the past six plus years, growth needs to be a priority.  There is a problem that conservatives don’t control the media and failure to make four percent would be a problem.  True.  The government has a limited impact on the economy as Ponnuru says.  True.  What would be a better alternative that would resonate with voters?  We’d be happy with growth is a primary priority but we don’t see it as a winning campaign slogan.

Almost Seriously

There are problems right here in River City!  Currently 37% of Americans think that Hillary is trustworthy and 24% of Republicans support The Donald.  We know that there might be some overlap but we don’t see the Venn Diagrams for those two groups having much intersection.  It looks like over 50% of the electorate have views at odds with reality.  Democracy is doomed.  Well, not quite but it is easy to see the frustration of
The electorate
The candidates
The pundits

NRO has been firing on the Donald with no effect for some time.  We are still hopeful but we did elect Obama in 2012.  Was that a trend or exception?

Social Security at 80

Stephen Ohlemacher discusses the changes needed to save Social Security.  It would be an improvement on the conventional wisdom but it misses much.  We should start by offering brickbats to FDR and his brain trust.  Social Security has been a problem for most of its 80 years because it was poorly designed.

He quotes the acting Commissioner, Carolyn Colvin, on the need for change now,

“The more time that they take, the less acceptable the changes will be because there needs to be adequate time for the public to prepare and to adjust to whatever changes Congress will make,”

Well, that is partially true.  More importantly, the trust fund is a best problematic.  The federal government has borrowed $2.8 trillion from Social Security.  Since it “owns” Social Security, when we consolidate the federal government there is no asset or liability for the consolidated entity.  If you don’t like the accounting perspective, another way to think about it is that the government will need to redeem the bonds held by Social Security.  How will it pay for them?  It will borrow more, spend less on other programs, or tax more.  None of these options, especially given our debt level, are enticing.

Change very soon is imperative for Social Security.  Compare it to Global Warming Climate Change.  Folks have argued it is imperative to act now but the theories, outcomes, and alternative actions are all questionable for Climate Change.  Social Security is just the opposite.  Although Ohlemacher leaves out one obvious option, means testing, the options (higher taxes, increase retirement age, and COLA adjustment) and their outcomes are well known and listed in the article.  Ohlemacher also leaves out his own reporting that Social Security overpaid disabilities by nearly half.  It is a government program so there are are doubts that all the savings can be realized but we might do better.

We would also consider increasing benefits at the low end.  The last part is a challenge to provide support without eliminating incentives.  You cannot consider such action unless you solve the basic problem first.

How do you solve the basic problem?  We support means testing (with the phase-in period starting now), increasing the retirement age, and COLA adjustment.  We do not support increasing taxes because it is a drain on the economy and a bad deal for the individuals.  Developing the means testing system requires some thought.  Social Security involves difficult choices but we know the outcome of the choices.  It should be part of every political debate.  The only unacceptable answer is not provide a solution.

Sundry Accounts

When reviewing accounts from old bookkeeping one of the neat terms we found was sundry liabilities or expenses.  Here sundry accounts are catching up on a few items.  We’ve been on a short excursion to American Players Theatre.

Yesterday’s headline in the local paper (yes, we are old and read it in paper version) was Trump Dominates First GOP Debate.  As we were watching Private Lives (well done by APT) we can only compare what we read.  Here is what Reed Galen said:

Trump: Hard to see how his answers on an independent run and women don’t ultimately doom him with either a primary or a general electorate. He was pure Trump – short, punchy sentences that are a mile wide and an inch deep.

Scott Johnson at Powerline was at least as negative.  The Democrat press just is different.

Speaking of the Democrat press, we were getting our oil changed and HLN was on the ubiquitous flat screen.  First, the anchor shows some video from Jon Stewart insulting Republicans and says something like I wish I could be like that.  Really.

The next item on HLN (seriously, this was a quick oil change) was the SEC requirement that public companies annually publish the ratio of executive pay to median worker pay.  This is a silly albeit, slight, waste of time.  As Kevin Williamson said, the SEC ought to stick to regulating securities and exchanges.   The companies and the auditors are going to be wasting their time computing and reviewing the computations.  The view of HLN was very different.  They had an anchor and an expert discuss it.  They thought it was serious.  They did give some perfunctory cons that came from industry.  They didn’t say that the con ideas was idiotic but they left that impression.

It is easy to see with such behavior abounding that Trump appeals to some folks who want to stop it.

Why Did Obama Slander Republicans?

John Hinderaker at Powerline describes it as Obama’s lowest moment yet.  Included in his comments at American University trying to defend his Iran deal, Obama said:

It’s those hardliners chanting “Death to America” who’ve been most opposed to the deal!  They’re making common cause with the Republican caucus.

Interestingly, the notes say that this was greeted by laughter and applause.  A sad moment for American University.  Why would he say such reprehensible things?  As we have asserted before about Obama, he acts as if he only cares about current politics.  First and foremost, he can get away with it.  Watch and see what the liberal press has to say about his reprehensible comments tomorrow.

Second, it is the day before the first Republican debate.  Obama is hoping to get a bounce from this.  Any Republican who responds at 50% of Obama’s intensity will be drawn and quartered and shown as evidence of Republican hate.  The Republicans have a big challenge tomorrow.  Perhaps they can be presidential.

Update: They all were on this topic and all except Trump were generally.