China, China, China, Why is it always about China.

An article in the New York Times about yesterdays stock tumble (unwittingly) lays out how China's bureaucratic medaling in their economy is going have consequences far beyond Shanghai.

1) Its obvious that the government’s actions caused yesterdays stock drop because when they announced a reversal, the market rebounded. The Communist government originally tinkered with the market, I believe, to stop the spread of capital inflows. The Shanghai market lists mostly companies that the government has a majority stake . If investors are gaining a larger and larger share of "their" companies it can only lead to political liberalization, which prompted them to take action.

“Both mainland Chinese markets rose nearly 4 percent today after state-controlled media reported that the government might allow greater foreign investment in Chinese stocks and would not impose capital gains taxes on stocks soon.”

2) They have manipulated their currency on a massive scale.

“The Chinese government has limited the appreciation of the country’s currency, the yuan, by buying dollars on a massive scale. As a result, it has accumulated more than $1 trillion in foreign exchange reserves.”

3) The currency manipulation has over inflated the market (this makes a bubble burst more painful) and caused the economy to be dependent on exports to the US.

“To pay for the dollars, the Chinese central bank has issued hundreds of billions of yuan. The central bank has been able to absorb some of these extra yuan by selling more government bonds to Chinese banks and the public. But part of the extra cash issued to pay for currency market intervention has made its way into the financial system. This has contributed to steep rises in stock prices — the Shanghai stock market rose 130 percent last year — and in real estate prices. The slump in share prices on Tuesday has raised questions about the long-term sustainability of high prices for Chinese assets.”

“But the region remains dependent on exports, especially to the United States, Mr. Nag said. China is among the most dependent of all, he said, with international trade in goods equal to 65 percent of its economic output last year.”

4) We are now dependent on their money.

“China is now a leading source of global capital, with the money funneled back into global financial markets through Chinese investments in Treasury bonds and other securities. “So when people get anxious that China may turn that tap off, we get market reactions like yesterday,” Mr. Condon said.”

Environmental Debate

“Make no mistake, the issue of environmental conservation sits squarely on the battle line between government and liberty.”

Governor Mark Sanford of South Carolina wrote an opinion piece for the Washington Post that expressed exactly how I feel about the environment issue.

There is no doubt that there is a problem. Human actions have had a measurable effect on the planet. I see no need to continue this debate. Those who deny climate change seem ignorant when confronted with solid scientific facts. The real question: how bad is the problem and what should we do about it?

This is where Al Gore and his minions go off the deep end. Their arguments are equivalent to saying a paper cut will cause death from loss of blood, so therefore the solution must be to cut off the finger.

The Gorites are winning the debate because conservatives have been slow to respond with sensible solutions. Governor Sanford lays out a plan for confronting the barbarians. He argues that conservatives must frame the debate around principles of stewardship and personal responsibility.

Conservation is also compatible with economic growth. Oil companies are, and have been, pursuing alternative energy sources because it is in their best interest. Companies should be encouraged to utilized eco-friendly means of construction and operation. Cutting costs is more than compatible with the goals of corporate America.

The bottom line here is the Gorites want to control your life via the Environment. We must acknowledge that there is a problem and formulate solution compatible with personal freedom.

End the Sanctions!

I would love to hear one good reason why the embargo on Cuba shouldn’t end. Commerce Secretary Carlos Gutierrez thinks that we should continue the embargo to force change in Cuba. How stupid is this? Seriously, how does stopping American companies from selling their products to people who need and want them going to force change?

This scenario is different from North Korea or Iran because the hope is that domestic support for aggressive foreign policy and weapons programs will dry-up when people can’t buy a bag of rice. Sanctions may, or may not work, but at a minimum there is a coherent goal that can logically be achieved. Cuba is in no way a threat to the United States. Their system of government and economics may be backwards but that is not our business.

I do understand that many Cuban immigrants living in Florida hold deep resentment towards Fidel Castro but this is no way to conduct foreign policy. The Senators and Representatives from Florida do have somewhat of a logical reason for supporting the sanctions: they are representing the wishes of the people that they represent. Since Secretary Gutierrez represents the entire nations commercial interests he should logically be for, at least tacitly, promoting commerce.

So why is he such a big supporter of sanctions? It seems that he is promoting a policy based on a personal grudge. It is unfortunate that he had to experience hardship while living in Cuba at a young age but his position requires national interests to come before personal considerations.

Someday this little spat will be rescinded and I will run, not walk, to my travel agent.

Republican Candidates for President

This is a perfect summary of the candidates that will be fighting over the Republican nomination.

"Here are the three leading candidates for president in the Republican party, a party based in the South and in the interior, rural in nature, and backed in large part by social conservatives: the senior senator from Arizona, a congenital maverick with friends in the press and a habit of dissing the base of his party; the former governor of deep-blue Massachusetts, son of a Michigan governor, a Mormon who looks, sounds, and comes across as a city boy; and the former mayor of New York, the Big Apple itself, ethnic and Catholic, pro-choice and pro-gun control, married three times, and a man who--Neil Simon, where are you?--moved in with a gay friend and his partner when he was thrown out of Gracie Mansion by his estranged and enraged second wife."

Ronald Reagan Tribute

This is a good one. Bring your tissues.

Hillary being Hillary

To Corporate America:

"I want those profits"

Hillary Clinton

Regulators need Regulation

The great evil corporate monster of our day: Wal-Mart, has peered their ugly head once again. Their dastardly plan is to charter an Industrial Loan Company (ILC). Essentially they would become a de-facto bank. Since a corporation does not exist to hold deposits and loan money as a bank does, it is not beholden to federal regulators (although it is covered under the FDIC).

The very thought of an unregulated business has scared Barney Frank and his cohorts into hurriedly filling legislation that would revoke the right of a business to loan their money to another individual or business.

It is a good thing that oh-so-wise leaders such as the exalted Barney Frank are there to squash anything that may have even the slightest appearance of freedom. Think of how scary a world it would be if we weren’t forced to bow to godly nobles who obviously know better than us.

I was going to continue satirically but it is making me nauseous.

This is wrong on many different levels. First it is obviously a direct challenge to the free exchange of private property. Secondly, it is a warning that government will not relent in their quest for expanded power. When free people find a way to circumvent the state, they will soon be brought back under the proverbial thumb. Thirdly, and most morally repugnant, politicians are using their power to ensure oligarchs of their protected industry in exchange for campaign contributions.

It is no surprise that the top two industries that contribute to Frank’s coffers are banking and real estate (real estate is considered Fannie Mae and Freddie Mac)

Their purchased protection is either called extortion or racketeering in the “real world”. In the world of politics it is called fairness.

To change this quid pro quo, politicians should look to regulate the regulators who demand extorted funds and not the consumer of their services.