Paul Krugman: Socialism Tastes Good - ala Mode

I usually will skip over the New York Times editorials but this one caught my eye. I wanted to read about why Paul Marx Krugman thinks Obama is the "anti-change candidate" but instead was treated to a warm piece of socialism ala mode.

"Mr. Obama who’s being unrealistic here, believing that the insurance and drug industries — which are, in large part, the cause of our health care problems — will be willing to play a constructive role in health reform. The fact is that there’s no way to reduce the gross wastefulness of our health system without also reducing the profits of the industries that generate the waste."

This is so crazy coming from an "economist". Profits are the problem? Profits cause waste? What economics theory produced such nonsense.

Reduced profits = less research and development

If a reduction in research is what the desired outcome is then using government to take away profits is probably a good idea. I'm going to assume that Krugman doesn't want that to happen. Using that assumption im not sure what he thinks is going to happen. Does he think that companies are going to make large quantities of high quality pills if there is no profit incentive? Interesting. Maybe he knows something that the economics field does not already know.

The real problem is collectivist health care systems around the world. Essentially, American health care consumers subsidize health care costs for the advanced nations. How? Because they cap prices and have collective bargaining schemes to drive down prices. Where do pharmaceutical companies make up the lost revenue? From us. That is one of the fundamental problems and it has no logical solution.

Taking away profits away from pharmaceutical companies will not improve health care quality any more than taking profits away from Intel will improve processor speed.

Currently Being Crushed

The weight of finals etc is heavy.

No postings until next week unless something exceptional happens.

Muhammad Teddy Bear Story Goes from Abnormal to Unbelievable

I usually don't write about stories like the Muhammad teddy bear because it is a better fit for alarmist talk radio, but this is too crazy not to write about.

As you probably already know, an English teacher was sentenced to jail (a lesser punishment considering she escaped 40 lashes) in the Sudan for allowing (encouraging?) her students to name a teddy bear Muhammad.

This story didn't surprise me in any way. That society has decided that they want some form of theocracy. Fine. Let them have it. I don't live there and never will. My knowledge of Sudan's legal system is not up to par, but if they had a clearly stated law against naming animals Muhammad then I don't know what all the fuss is about.

The problem is this. These people are rallying in the streets with clubs and axes demanding that the teacher be executed.

I think I am speechless. Not exactly, but nearly.

Mostly, I think this is a control issue. Muslims feel dominated and disgraced by their lack of economic and military progress in the last 500 years so they show their superiority where they can. I do not think there is any coincidence that the teacher is British. The Islamic state of Sudan was originally created after the original expulsion of the British under the leadership of Muhammad ibn Abdalla. Abdalla fought for the return to a more pure form of Islam; a fight that continues today.

In short: the people rallying are saying we want a return to a pure form of Islam and we don't want to be walked dominated by Western powers. They picked an absurd event to make their statement, but they are Abdalla's hordes.

Pelosi Strikes Again

Common sense? Who needs no stinkin common sense!

This appears to be the motto of Speaker Nancy Pelosi. Why?

She is holding up the $53 billion dollar Commerce, Justice, and Science (CJS) budget because she thinks employers should be allowed to have English only policies in the workplace. Senator Alexander's amendment to the CJS appropriations bill (the source of her angst) strips EEOC funding for lawsuits against English in the work place policies.

Beyond objections from the Hispanic caucus and ACLU types there is no reasonable objection. The employers who were being sued were not impinging on any rights because they did not dictate which language employees spoke on their free time. I could probably make an argument for the employers about efficiency, but what about common sense? If an employer can't dictate how an employee acts at work then what can they dictate? Maybe disgruntled employees should get the EEOC to start suing employers who mandate culturally insensitive uniforms etc.?

I'm not sure how or why the Hispanic caucus in Congress got so powerful, but she must find a backbone. I'm not holding my breath while i wait.

Thanks to John Fund at the Wall St. Journal.

Financial Collapse Continued

I hope this doesn't become a 'cry in your beer blog' but i can't ignore the bad financial news. There is almost literally a story every day about a major financial institution getting the smack down. Here are the latest and greatest.

Freddie Mac- $2 billion dollar loss for the third quarter

H&R Block - Chairman and Chief Executive Mark Ernst resigned today because of subprime exposure through Block's subsidiary Option One Mortgage Company

The Freddie Mac news may be the worse yet because investors may lose confidence in the governments will to bail out financial institutions. I don't think the government should do anything (after all they got us into this mess in the first place) but investors have held somewhat steady because the fed had already opened up the vault to be raided once. With inflation fears growing it is doubtful they will do the same again. Combine that with continued weakness in the overall housing market, retail weakness (Target's weak earnings), and weakened dollar (gold spiked about $20 an ounce today/yesterday), and you have the makings of a recession.

Buckle up.

Tough Primary Decisions

This morning I was swayed to support Mike Huckabee. There is now no choice based on this video.



Then I came to my senses. I am going to be voting for Ike based simply on his ad (via TruthCaucus).

Vote Ike 2008.

Financial Collapse Continued

About a week ago i wrote a post about how the subprime crisis is going to tighten capital markets. I provided a list of real estate failures that painted a stark picture. Little did I know that there would be more evidence in the coming days.

Barclays Capital - Announced write-downs totaling 2.67 billion

HSBC - $1 billion more in write-downs

As I said in the last post about this issue, the danger is not that these companies are going to go under. In fact, Barclays still turned a profit (amazingly). The problem is that capital markets are going to tighten. Lending institutions are going to make it harder to lend money. Less money means less investment. Less investment means less jobs.

Buckle in because its going to get bumpy.