This doesn’t represent an endorsement by me of Danny Tarkanian nor an endorsement of me by Danny Tarkanian. I invite all candidates to submit a position statement on this issue because I feel it is important. So far, Team Tark is the only campaign that has responded to my invitation. Below is a statement from U.S. Senate candidate Danny Tarkanian:
Congressional spending and Federal Reserve policy have teamed up to lock the U.S. economy into a downward cycle that may lead to catastrophic failure if left unchecked. Both Congress and the Federal Reserve have taken reckless abandon in their recent attempts to insert the federal government as a solution to the country´s economic woes. Rapid response and common sense solutions are required to counteract these irresponsible practices.
With the increase in federal spending, and the latest passage of a debt ceiling increase by Congress and subsequent signing into law by the White House, interest in investing in U.S. Government securities, like treasury bills, has begun to decline. The increase in deficit spending has created a growing loss of confidence in the government´s ability to repay its loans and threats from credit rating agencies of a potential downgrading of the US’s credit rating. As interest in the bond market decreases, interest rates on bonds automatically increase creating a higher cost to the U.S. government to sell its debt.
The Federal Reserve’s loose monetary policy to finance deficits and suppress interest rates indirectly contributes to what is known as the “carry trade” against the U.S. dollar. By borrowing dollars on the assumption that the dollar will decline and then using them to buy commodities, investors reap higher profits when paying back the initially borrowed dollars. With the continued decline in value of the dollar, the incentive to use the carry trade is increased which leads to a growth in speculation that the dollar will continue to be devalued.
Separately, the Federal Reserve is essentially subsidizing financial institutions by setting the benchmark interest rate at 0%. This initially spurred an increase in financial institution investment in treasury bills to shore up their balance sheets – a practice that served as probably the most under the radar bailout packages in federal government history. The ability of financial institutions to take Federal Reserve dollars at 0% interest and invest them in federal treasury notes with a set interest rate, essentially meant that the federal government was simply handing the financial institutions an allowance (or bailout). The Federal Reserve paying interest on bank reserves is not a solution. Not only is borrowing nearly free money from the Fed to then loan funds back to the Fed at a higher rate immoral, this will force up interest rates on treasuries which, ironically, present policy is trying to prevent.
In the case of a 30 year bond, this was 4.7% as of 1/6/09. Whether by design or by accident, this will serve as a creative federal subsidy until, due to a climbing deficit and reduced faith in the government´s credit, these institutions find it too risky to invest in treasury bills and look elsewhere, or the Fed is forced to raise interest rates due to concerns about creating an artificial bubble for the financial industry, or in housing. Either that, or the Federal Reserve will displace the market and become the exclusive buyer of treasuries.
The irresponsible lending practices of the Federal Reserve and the reckless spending levels of Congress will inflict greater damage than the country would have felt had the housing and financial institutions been allowed to find equilibrium on their own in the first place. The involvement of the federal government hasn´t saved the U.S. economy; it has simply prolonged and likely worsened the pain of the eventual economic reset. A structurally sound financial system shouldn’t need bailouts or rescues. Swift and steady action is required to help brace the country for a potentially worse decline.
Federal spending must be checked and reversed, including a plan to permanently eliminate the deficit and restore faith in the U.S. government´s credit, thus re-establishing confidence in the bond market. The Federal Reserve must also seek to raise interest rates to prevent inflation and offset any potential asset bubble bursting created as a result of the recent 0% interest rate. Entitlement spending must be decreased and non-essential programs phased out in order to help lessen the strain on the federal budget. All of these actions are necessary now to help soften, and potentially prevent, a predicted economic decline within the next 10-20 years.
Danny Tarkanian
Republican Candidate for the United States Senate Tark2010.org
If I ever get a job again,
I will never be a snob again;
I’ll live within my means,
Carry a dollar in my jeans,
If I ever get a job again.
If I ever get a break again,
Brother, what I’ll do to stake again!
No turning out the light,
Bidding my appetite good night,
If I ever get a break again.
I’ll get two rooms and a kitchenette,
Furnished comfortably;
With two rooms and a kitchenette,
I’ll get a sweet somebody to move in with me!
If I ever get a job again,
I know that two hearts will throb again,
She told me with her eyes
We’ll be rehearsing lullabyes,
If I ever get a job again.
If I ever get a job again,
I will never be a snob again!
I’m through with stocks and bonds,
I’d rather spend it all on blondes,
If I ever get a job again!
If I ever get my pay again,
I’ll save it for a rainy day again,
But let me tell you, bud,
I’m gonna save up for a flood,
If I ever get my pay again.
I’ll get two suits and an overcoat,
Like a millionaire!
Just two suits and an overcoat,
And then when things get better, I’ll buy underwear!
If I ever get a job again,
With my old friends I’ll hobnob again,
What great fun it will be, saying
“Just have one more on me!”
If I ever get a job again.
The Economist published a very lucid analysis (link) of the recent macroeconomic instability in the Euroarea, following the outbreak of Greek debt crisis (link) and disappointing quarterly data on GDP growth (link):
Barely had the ink dried on a statement by European leaders supporting Greece in its struggle to finance its debts when more bad news emerged from the euro zone. Figures released on Friday February 12th showed that GDP in the 16-country currency zone rose by just 0.1% in the three months to the end of December compared with the previous quarter. That there was any improvement at all was largely down to France, where a burst of consumer spending lifted the economy by 0.6%. In the region’s other big countries, GDP was either flat—as in Germany—or falling, as in Italy and Spain.
When a government spends money, there are only three places that money could have come from:
Taxation — by taking the money away from someone.
Borrowing — by temporarily taking the money away from someone, with a promise of returning it at a higher value.
Inflating — by printing money, which reduces the value of all the other money that people hold.
Of these, the last is the most regressive and pernicious. Not only does it reduce the savings of the middle class, but it also causes people to think they have more money than they really have.
Which one, do you suppose, do politicians choose most often? Right: inflating and borrowing. That’s because taxpayers feel the pain of taxation most directly.
Paul De Grauwe published a very good article (link), discussing the macroeconomic origins of the current debt crisis in Greece.
“The period 1999-2009 has been organised in periods of booms and busts: the boom years were 1999-2001 and 2005-07; the bust years were 2002-04 and 2008-09.
One observes a number of remarkable patterns.
First, private debt increases much more than public debt throughout the whole period (compare the left hand axis with the right hand axis).
Second, during boom years private debt increases spectacularly.
The latest boom period of 2005-07 stands out with yearly additions to private debt amounting on average to 35 percentage points of GDP.
During these boom periods, public debt growth drops to 1 to 2 percentage points of GDP. The opposite occurs during bust years. Private debt growth slows down and public debt growth accelerates.”
This Valentine’s Day is not only the most romantic day of the year, it also hints at budding life for the recovering economy.
For many in the east, life remains buried under several feet of snow, but florists across the country say that this Valentine’s Day may be one of their best ever.
Mary Reynolds, of Frederic’s Flowers in Bedford, VA, says this holiday is shaping up to be one of the best she’s had in 15 years. “We have Friday, where you can deliver to the businesses or the schools, and then you have Saturday and Sunday also to deliver to the homes,” she said.
Other florists have also reported high order volumes:
Calvin Mitchell, who owns Leo Wood Florist, said his business has been “very, very busy.”
At Haddonfield Floral Company in the Philadelphia suburb of Haddonfield, N.J., owner D.W. Janszky said that online and phone orders have been strong — especially on Wednesday when so many people were snowed in.
And the snow didn’t slow the orders. Michael Caruso, vice president of Caruso Florist in Washington DC, said he rented four-wheel-drive vehicles to pick up employees and make deliveries. “We’ve been in business since 1903 and this isn’t the first storm we’ve weathered,” Caruso said, “Our motto is ‘Rain or snow or 6 below, we go.’”
Joan Arthur, owner of Arthur’s Flower Cart, says snow has made deliveries in some VA residential areas difficult, but that “business has been booming. I feel like we’ve been blessed. We are delivering as hard as we can go.”
Anmol Sethy will do a talk on our work on testing, dating and monitoring exchange rate regimes at the R/Rmetrics Singapore Conference 2010, including some recent progress on parallel computation. For background, see this paper, which talks about the ideas, and the open source R package fxregime. This is now fairly mature work: many of the papers at the NIPFP DEA Program website have utilised the ideas and code. The 6th meeting of the NIPFP-DEA Research Program (9 and 10 March) is going to have interesting new work in this field.
Home prices rose in 67 of 151 U.S. metropolitan areas in Q4, said the National Association of Realtors (NAR) on Thursday. Furthermore the association pointed to a “broad stabilization” of values across the country.
The median price for single-family home resales was up from a year earlier in over 44% of the areas included in the trade group’s quarterly survey.
Some of the metro areas showing the biggest gains from a year earlier were Cleveland (25%), Akron, Ohio, (23%) and San Francisco (13%).
The seasonally adjusted annual rate of previously occupied homes sold jumped 13.9% from the third quarter. The national median price rose 2.9%.
Existing-home sales in the West jumped 16.2% in the fourth quarter to an annual rate of 1.38 million and are 18.2% above a year ago. The median existing single-family home price in the West was $227,200 in the fourth quarter, which is 8.9% below the fourth quarter of 2008, but with many areas showing notable gains.
“Markets in the West such as San Francisco, San Jose and Denver are showing double-digit price increases, and other markets like San Diego and Anaheim have begun to firm up,” Lawrence Yun, chief economist for NAR.
“The surge in home sales was driven by buyers responding strongly to the tax credit combined with record-low mortgage interest rates,” said Yun, “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.”
We’ll preserve for our children this, the last best hope of man on earth, or we’ll sentence them to take the last step into a thousand years of darkness.
Thus spoke Ronald Reagan some forty-six years ago. Tragically, today in America it appears the time for choosing may have passed. As each day goes by our debt grows more unsustainable; our security further imperiled; our economy more shackled; our government more tyrannical.
These are symptoms of an America that has chosen the wrong path: the road to serfdom over the road to civilization. This plight is the result of a hundred-plus year campaign by the socialist sophists to slowly but surely undermine the principles that built our nation to its hegemonic place. While the ends of a nation are peace and prosperity, there has always been a difference in opinion as to the means to achieve these ends. This fundamental tension has rested upon the difference between liberty and tyranny.
As Frederic Bastiat argued, “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.” James Madison, perhaps slightly more optimistic shared Bastiat’s concerns, arguing, “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.” Herein lies the problem of government. We grant government its privileges in order to protect our natural rights, yet it is difficult enough for man to govern himself let alone others. Thus, in devising a governmental system, our founders set up a Constitution of diffuse powers, ensuring that the majority of power rested with the states or the people.
As our country grew, slowly but surely the state consumed our rights instead of securing them. Government grew whilst the individual shrunk. Whereas the law was meant to protect against the diminution of the individual, instead it was used as an instrument of plundering him. Bastiat argued, “Legal plunder can be committed in an infinite number of ways; hence, there are an infinite number of plans for organizing it: tariffs, protection, bonuses, subsidies, incentives, the progressive income tax, free education, the right to employment, the right to profit, the right to wages, the right to relief, the right to the tools of production, interest free credit, etc., etc. And it the aggregate of all these plans, in respect to what they have in common, legal plunder, that goes under the name of socialism.”
We allowed for the planting of these seeds of destruction. We have always had the better ideas, but we have failed to adequately defend them. Our ideological counterparts, realizing that they could not win on the basis of substance propagandized through academia and the media, and co-opted the poorest and the richest in their lust to undermine our rights for their personal gain. Anecdotally, we can see a clear difference in the logical ends of the policies the statists espouse. A good example would be in looking at West Germany and East Germany during the Cold War. Similarly, if we compare and contrast the liberal urban areas in America with more conservative suburban ones we see a clear difference in wealth, crime and quality of life. Yet even with the stark differences in results, somehow we have succumbed to the path to barbarism.
The battle lines between our sides are clear, but we have not articulated them well. We have not promulgated the dangers of liberalism, progressivism or socialism, nor the virtues of freedom. We have sacrificed the individual to the state. But if Americans were to examine the following questions, who would support this system? Do Americans believe in private self-reliance or public largess? Do we believe in meritocracy or a thugocracy? Do we reward success or failure? Do we stand upright or bow to the world? Do we wish to return America to fiscal order, or condemn future generations to debt slavery? Do we believe that solutions to our problems come through the ingenuity and toil of the American people, or from faceless bureaucrats in Washington? Do we wish to be the shining beacon of civilization, or a mere footnote in a history book? Do we believe in the individual, innovation, morality and the spontaneous and organic harmony of freedom or the collective, backward, perverted morality and destitution of centrally planned servitude?
The people of this nation know that the progress of man has always come from the individual, free to question, experiment and fail. In fact, it is often out of failure that opportunity arises. Our nation was built on principles derived from the wisdom of founders who had studied the failures of their predecessors. They understood that powerful centralized government could never advance man, but only restrain him. That the sole purpose of government was to protect man from tyranny, and build a foundation on the basis of property rights and the rule of law to allow man to flourish. But generation after generation, we have allowed our government to slowly but surely usurp our freedom — to steal from us the life, liberty and property that make us men. We have allowed politicians to weaken our constitution and dehumanize us.
While our intellectual foes have had over a hundred-year head start on us, we now have a populace galvanized against our largely corrupt stewards. We must capitalize on this time to educate a captive audience on history; on principles; on the ideals that we have allowed to grow decadent. In the meantime in trying to roll back years of ideological subversion that have numbed Americans to truth and morality, we must elect officials who will stop government from expanding. Then, we must go to work in stripping it back to the bare bones explicitly attributable to it by our Constitution. In order to achieve this monumental task, we will need to seek out those candidates who are unafraid of the censorship that is political correctness; who have a clear understanding that the state is always to be subservient to the individual; who are willing to stand for principle even if it means political pain; in other words, we will have to seek out the people that would have in the past avoided government and who do not stand to gain from serving in it.
This battle will take many, many years, and we may not be successful. But difficult as this struggle may be, appeasement and the choosing of the middle path will surely lead to failure. Reagan understood this when it came to the Cold War. He argued, ”every lesson of history tells us that the greater risk lies in appeasement, and this is the specter our well-meaning liberal friends refuse to face—that their policy of accommodation is appeasement, and it gives no choice between peace and war, only between fight or surrender. If we continue to accommodate, continue to back and retreat, eventually we have to face the final demand—the ultimatum.” We must fight this same war but on ideological grounds. For as Reagan further noted, “You and I know and do not believe that life is so dear and peace so sweet as to be purchased at the price of chains and slavery.” We might add that chains and slavery will never lead to a dear life or sweet peace.
We must express to all those who cherish this country that nothing less than our existence rests upon our fight against the tyranny of our democracy. Our state is a Leviathan, hurtling towards fiscal and moral bankruptcy and war. History will either remember us as the generation that twiddled our fingers while Rome burned, or the underdogs who overcame great evil to return this nation to its rightful place as a shining city on a hill. We lie very close to the precipice today. So as Reagan argued, though we may be late we still must still make the proper existential choice. We must choose to fight the fight for civilization or risk dishonoring our founders and men like Reagan, enslaving our children and debauching our once great nation. In a world being consumed by the ideologies of socialism and its ally in Islamism, we still remain the last best hope of man on Earth.
Mega-storms storms paralyze many businesses, but for others ice and snow spells big profits.
“All of our inventory has disappeared faster than concert tickets,” says Jon Hoch, owner of Power Equipment Direct Inc., an online dealer that has seen surging sales. Snow blowers inventory is now such that, “We have this beautiful Web site that in a day or two won’t have anything left to sell.”
For years the cab drivers in DC have taken advantage of snow situations. On Wednesday one traveler heading to Reagan National Airport said a cabbie tried to charge him a “$100 snow fare.”
In Pennsylvania, Jack Frost Big Boulder, Blue Knob, and Camelback ski resorts are all reporting premium skiing conditions. Servicing key markets like Philadelphia, DC and the Poconos — all areas have had record snows — and East coasters are heading for the hills — their wallets in tow.
Michael Cleren of Jack Frost reports, “We are set for record [sales] numbers in the next 10 days.” For most eastern ski resorts business is strong and the snow pack is now in place for healthy March operations and profits.
For grocery stores, these are also profitable times. The snow storms have challenged Wawa, Safeway and Giant retailers to stay open during the inclement weather. Those that can manage to keep their doors open report brisk sales with the public making a run on staples just prior to the storm.
Sal Mattera, Wawa operations chief reports other good news for some Wawa vendors:
the store pays overtime to keep their parking lots plowed and sidewalks clear. During a storm, customers are in a spending mood. If customers can make it to their parking lot, Wawa does everything possible to make sure they make it inside.
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