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Is China Screwed?

Thursday, April 14th, 2022

Here are two videos where Peter Zeihan argues that China is screwed for many reasons, not least of which is demographics.

Takeaways:

  • One child per couple means that China is “the fastest aging society in human history, with the largest sex imbalance in human history.”
  • “They’ve run out of people of childbearing age.”
  • They were going shrink in half by 2100. “Then they realized that they had been overcounting people for some time.” Then new data moved the date moved up to 2070. And now they’re saying it will be 2050. “For that to be true, the Chinese would have overcounted the population by 100 million.” And all of those missing people are of childbearing age.
  • Their population actually peaked 15 years ago.
  • “We’ve seen a 12-fold increase in Chinese labor costs since 1991.”
  • “China isn’t getting rich, it’s getting old.” They’re facing demographic collapse within a decade.
  • Xi’s instituted a cult of personality, and silenced anyone capable of independent thought. “He knows that the country’s current economic model has failed. And he knows he can’t guarantee economic growth, and he knows he can’t keep the lights on, and he knows he can’t win a war with the Americans.”
  • Xi’s solution? “Naked, blatant, ultra nationalism. Ethnocentric ultranationalism of the Nazi style.”
  • At the top, they don’t care about keeping the lights on. “A third of the country is facing power rationing.”
  • “These are the sorts of things that you do if you know that the bottom’s falling out and there’s nothing you can do about it, and you have to shift the conversation to remain in power.”
  • “In China, money is a political good. It exists to serve the needs of the CCP.”
  • “All of the economic growth we have seen in China since 2006 is because of debt.”
  • Corporate debt is 350% of GDP, “making China the most indebted country in human history in both absolute and relative terms.” Every country that’s come within half of this has collapsed under the debt load.
  • I’m omitting discussion of how China is screwed on semiconductors (covered enough here), and also the possibility of invading Taiwan (this video was released late last year, before Russia invaded Ukraine).
  • “The Biden administration in bits and pieces is redefining strategic ambiguity, and it’s not clear to me what the endgame is here.” Well, there’s a whole lot that isn’t clear about the Biden Administration…
  • Zeihan thinks Biden might recognize Taiwan for a foreign policy win. Zeihan also thinks that both China and Russia are so weak we can wait them out. (Remember: Pre-Ukraine invasion.)
  • Zeihan dismissive of both Obama and Trump foreign policy.
  • “Joe Biden has been on the wrong side and the right side of every foreign policy decision the U.S. has made in the last 45 years, because he doesn’t have any core beliefs he tacks with the wind.”

    • Now let’s forward to March 24, where Russia’s colossal failure in Ukraine has actually made China even more screwed.

    Takeaways:

  • The biggest damage that we are seeing from the Ukraine war (outside of Ukraine, obviously) is in China. Because in one month the Russians have pulled back the blinders on what has been a 50-year strategic program, the idea that China can come to global power with American sponsorship, with American indifference, that it can take Taiwan, that it can intimidate Japan, that they can dominate all of east Asia and yet not suffer economically at all. It was always ridiculous, but now it’s been shown to just be absolutely stupid.

  • No one can escape the power of global markets because of trade.
  • “The yuan is only traded internally because it’s the most manipulated currency in history. The euro confiscates bank deposits to pay for bailouts.”
  • Russia is the world’s second largest oil exporter, and it can’t export more to China because the pipes that go east don’t interconnect with the ones that go west. “The rail lines are already beyond capacity.”
  • In the west: “One way or another, those pipes aren’t surviving this year.” (Not sure that’s correct, but I’ve long thought that we should be seeing more structure hits inside Russia than we’ve seen thus far.)
  • “The stuff that goes to the Black Sea is in a war zone, so insurance companies will not give the indemnification that is necessary for vessels to operate in that area. So the only way a ship can go and dock it overseas right now is if a country gives its sovereign indemnification and takes all the risk.”
  • Primorsk, on the Baltic, is open. However: “Ship captains for the most part are refusing to go, and European dock workers are refusing to unload the cargo when it arrives. So that is still in use but not nearly as much, maybe a quarter of what it used to be before the war started.”
  • To get more oil to China: “You would have to build a fundamentally new infrastructure from the fields in northwest Siberia to Chinese population centers that is greater than the distance from Miami to Anchorage, most of which is through virgin territory that is very rugged. That’s a 10-year program minimum even with the Chinese building it.”
  • “We’re looking at the single largest removal of crude from the market ever, and in proportional terms it’s going to have a shock somewhat similar to World War II.”

  • We have insurance companies not doing it, shipping companies not doing it, dock workers not doing it and now Halliburton, Baker Hughes and Schlumberger have pulled out, and they do the technical work that makes a lot of this possible. All the super majors are gone, and we even have a couple of major projects out in Sakhalin that are probably just going to die because the Russians can’t make those projects work by themselves. Most of the oil and gas out of that goes to China, so we’re actually looking at an environment where the Chinese see reduced flows rather than increased, as Russia is just melon-scooped out of the market.

  • When the Russians fell under sanctions, everything that the Chinese thought was true about their future was laid bare as, at best, wishful thinking and bad analysis. So they are now looking east to the United States and west to the Russians in a little bit of a panic, because they are being tied indirectly to what’s going on in Ukraine. And they have now found out not only does the west’s and specifically the United States’ financial tools work very well, they now know they would work much better against China than against Russia, because at its core Russia is a commodities exporter, most notably oil, natural gas and food. China imports all those things, so if an equivalent sanctions regime was done against the Chinese, you’d have 500 million dead Chinese in less than a year from starvation.

    Here I think he overstates the case, as there are a lot of emergency avenues a communist government could pursue to stave off starvation. Like invading Mongolia and turning it into emergency farmland. Which is not to so they wouldn’t have some starvation, especially in worse-case scenarios…

  • “The Chinese have always seen themselves as anti-American [well, the commies, anyway -LP], they’ve always seen themselves as anti-Western, anti-democracy and now they’re realizing that the mood of the man in the White House determines whether their country exists.”

  • As tight as the sanctions are, as big as they’re getting, they’re nothing compared to the corporate boycotts. Almost every single company that left Russia was under no legal requirement to do so, they just didn’t want to be associated with the war. And we’re talking about those ESG, social goody two-shoes mammoth companies like Exxon and Halliburton, who are now gone, and everyone else followed. So if that happened to China, you know that’s all of their investment that matters. That’s all of their technology transfers, that’s all of their end markets. This system, if it turned against China, would be far more damning than anything we’ve seen out of Russia so far.

    • I think Zeihan overstates the case a bit, and probably immanizes the timeline of crisis more than warranted, but the demographic and economic challenges China faces are very real.

    Also keep in mind that no one in 1988 expected the Soviet Union to collapse as quickly as it did, either…

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    Posted in Communism, Economics, Foreign Policy, Military | 36 Comments »

    LinkSwarm for October 15, 2021

    Friday, October 15th, 2021

    Biden is bumbling, borders are crumbling, bankers are plotting, and Art is out. Welcome to another Friday LinkSwarm!

  • Stephen Green finds out the real reason behind the supply chain SNAFUs: California Democrats changing the rules because they weren’t getting enough kickbacks and graft from an efficiently functioning transportation system.

    The immediate problem, the one in Los Angeles, has been caused by the state’s vindictively regulatory state government.

    We’ll get to the trucker shortage in just a moment, but California also faces a shortage of trucks for them to drive.

    Twitter user Jerry Oakley reminds us that “Carriers domiciled in California with trucks older than 2011 model, or using engines manufactured before 2010, will need to meet the Board’s new Truck and Bus Regulation beginning in 2020.” Otherwise, “Their vehicles will be blocked from registration with the state’s DMV,” according to California law.

    Snip.

    As a result, trucks aren’t being purchased to replace the ones being regulated out of business.

    But even if there were plenty of trucks in California, there wouldn’t be enough truckers to drive them — and it isn’t because the truckers are too old.

    “Traditionally the ports have been served by Owner Operators,” Oakley says, who are non-union. But under AB-5, “California has now banned Owner Operators.”

    Just like the union longshoremen, union truckers work under a whole host of work rules that simply can’t accommodate crisis conditions like the ones in Los Angeles.

    In fact, those work rules helped create the crisis conditions.

    The exact language of AB-5 was copied and pasted into Presidentish Joe Biden’s $5 trillion (Or: Five Million Million Dollar) “Build Back Better” bill currently stalled in the Senate.

    It’s one thing for Californians to screw themselves over, but AB-5 is hurting the entire country’s economy — and Washington Democrats want to take AB-5 nationwide.

  • Social Justice doesn’t want to win, it wants to destroy you:

    If you’re unaware, [David] Shor was canceled for accurately summarizing the contents of an academic paper. Shor made a point that he felt was important for the messaging of the Democrats. At the time the country was exploding in riots aligned with BlackLivesMatter and driven by anger over the deaths of George Floyd and Breanna Taylor. Shor linked to a paper that argued that riots have bad political consequences for Democrats. This would not seem to be particularly inflammatory; people indiscriminately burning and smashing shit has little obvious utility for the marginalized or anyone else. But Shor lost his job for tweeting that paper and agreeing with its thesis. Similarly, the Intercept’s Lee Fang was absolutely mobbed for the crime of recording an interview with a young Black man who was critical of the riots and the protest movement from which they sprang. He almost lost his job, as well.

    (Here’s a fun tip for you all: if you have the power to get someone fired or otherwise ruin their life you are not a powerless, marginalized Other.)

    Not that they had rebutted a particularly coherent pro-riot argument. There was little in the way of defense of riots in 2020 at all, really. Many attempted to invoke Martin Luther King in that regard, which is hilarious and bizarre concerning a man who among many other critiques of riots said that they “are not revolutionary but reactionary because they invite defeat; they offer an emotional catharsis, but they must be followed by a sense of futility,” and that close to the end of his life. (In their defense, almost no one who invokes MLK has actually read him.) But what Shor and Fang were guilty of was not of breaking with some intellectual mandate within liberalism but with speaking out of turn, with criticizing the wrong people. The difference between Shor and Fang’s criticism of the pro-riot side and the behavior of those who rose against them is that Shor and Fang never tried to destroy anyone, didn’t tweet at anyone’s boss in an attempt to get them fired, didn’t have the inclination or the power to punish those who dared to disagree with them. But those who targeted them were operating in a bizarre liberal discursive culture where, if you dress up what you’re doing in vague language about oppression, you can operate however you’d like without rebuke and attempt to ruin the life of whoever you please.

    Snip.

    The left-of-center is in a profoundly strange and deeply unhealthy place. In the span of a decade or less a bizarre form of linguistically-radical but substantively-conservative identity neoliberalism descended from decaying humanities departments in elite universities and infected social media like Tumblr and Twitter, through which it conquered the media and entertainment industries, the nonprofit industrial complex, and government entities as wide-ranging as the U.S. Department of Education’s Office for Civil Rights and the brass of the Pentagon. That movement now effectively controls the idea-and-story generating power of our society, outside of explicitly conservative media which exists in a large silo but a silo all the same. On any given day the most powerful institutions in the world go to great lengths to mollify the social justice movement, to demonstrate fealty, to avoid its wrath. It’s common now for liberals to deny the influence and power of social justice politics, for inscrutable reasons, but if the current level of control over how people talk publicly is insufficient, I can’t imagine what would placate them. Are most of these institutions false friends? Of course. But that, too, is not much of a defense.

    This tendency to be promiscuous in enthralling elites and powerful institutions should be a clue to the fact that, despite its radical self-branding, the contemporary social justice movement fundamentally serves to empower the status quo. Effective left politics are about convincing various people who are unalike that they have a shared self-interest, that society can do best for them when we do best for others, too. That’s how you build a mass movement, by appealing to people’s sense of self-interest and showing them how they can help their neighbors while they help themselves. But because the social justice movement’s first dictate is to establish a hierarchy of suffering, and to tell those that are purported to suffer less that their problems aren’t problems, no such mass movement is coming. The social justice movement is not just incidentally antagonistic to organizing everyone and recognizing all kinds of people as worthy of our compassion and support. That antagonism is existential. When you ask many people within the movement, “what could we do to convert the white working class to our values?,” they will simply tell you that they don’t want to convert them, that they are not worthy of being a part of their movement. They would rather have targets than converts, to lose as an exclusive moral caste than win as a grubby populist coalition.

    Core to understanding this moment is to realize that the vast majority of people who enforce these politics don’t actually believe in them. They don’t, that is, think that social justice politics as currently composed are healthy or just or likely to result in tangible positive change. There’s a core of true-believers who do, and there’s a group of those who profit directly from the hegemony of social justice politics in elite spaces. (The former two groups have some overlap, but it’s not a perfect circle.) There’s conservative critics, who are both the most natural targets of social justice ire and yet those the social justice movement seem least interested in targeting. There’s an island of misfit toys of left and leftish critics of social justice politics like me. And then there’s the great big mass of people who are just scared.

  • Do global elites have incentives for pushing “Green Energy”/”Climate Change” nonsense? $150 trillion of them.

    Now, in case someone is still confused, none of these institutions, and not a single of the erudite officials running them, give a rat’s ass about the climate, about climate change risks, or about the fate of future generations of Americans (and certainly not about the rising water level sweeping away their massive waterfront mansions): if they did, total US debt and underfunded liabilities wouldn’t be just shy of $160 trillion.

    So what is going on, and why is it that virtually every topic these days has to do with climate change, “net zero”, green energy and ESG?

    The reason – as one would correctly suspect – is money. Some $150 trillion of it.

    Snip.

    How much would this green utopia cost, because if the “net zero”, “ESG”, “green” narrative is pushed so hard 24/7, you know it will cost a lot.

    Turns out it does. A lot, lot.

    Responding rhetorically to the key question, “how much will it cost?”, BofA cuts to the case and writes $150 trillion over 30 years – some $5 trillion in annual investments – amounting to twice current global GDP!

    At this point the report gets good because since it has to be taken seriously, it has to also be at least superficially objective. And here, the details behind the numbers, do we finally learn why the net zero lobby is so intent on pushing this green utopia – simple answer: because it provides an endless stream of taxpayer and debt-funded “investments” which in turn need a just as constant degree of debt monetization by central banks.

    Consider this: the covid pandemic has so far led to roughly $30 trillion in fiscal and monetary stimulus across the developed world. And yet, not even two years later, the effect of this $30 trillion is wearing off, yet despite the Biden’s admin to keep the Covid Crisis at bay, threatening to lock down society at a moment’s notice with the help of the complicit press, the population has made it clear that it will no longer comply with what is clear tyranny of the minority.

    And so, the establishment needs a new perpetual source (and use) of funding, a crisis of sorts, but one wrapped in a virtuous, noble facade. This is where the crusade against climate change comes in.

    Imagine a central banker, destroying your bank account through hyperinflation…forever.
    

  • The Biden Administration has discarded $100 million worth of border wall segments and is paying workers $5 million a day not to build the wall.
  • They’ve also halted worksite immigration enforcement.
  • Controlling (barely) all three branches of government, you wouldn’t expect Democrats to show this much panic.

    he results in 2020 came as a shock to Democrats for several reasons. First, Joe Biden’s official margin of victory, while slightly larger than Obama’s in 2012 at 51.26% to 46.8%, was half the size that polls, such as Nate Silver’s 538, had showed, at 51.8% to 43.4%. But even more concerning for Democrats, the locations of the polling error tended to be not in places where Democrats were strong, but rather either in swing areas where they hoped for gains, or areas where Obama had done well in 2008 and 2012, but Trump had won in 2016. In effect, Democrats won areas they felt were moving in their direction such as Arizona, Pennsylvania, Nevada, and Wisconsin by far less than they expected, and lost states they thought were close such as Iowa, Ohio, and Florida by much larger margins.

    The implications of this in the Presidential race were obscured by the fact that the numbers showed Biden won. But they were keenly felt in the Senate races, where Democrats lost races in Iowa and North Carolina where they believed they were favored, and their candidates did worse than Biden even where he won, such as in Michigan and Maine. The result at the time was to leave the Senate at 50 Republicans and 48 Democrats, a situation transformed by the victory of Democrats Jon Ossoff and Raphael Warnock against a dysfunctional Georgia GOP in January 2021. Nonetheless, it was ominous and it set the tone for Democratic behavior in 2021.

    In light of these results, we can understand that the reason Democrats are now obsessing the filibuster is not because they have a mere 50 seats in the Senate. When Senator Chris Murphy of Connecticut calls out Joe Manchin and Kyrsten Sinema for blocking legislation that 48 Democrats support, he is doing so not because he believes they are likely to be 50 or 52 Senators for it in the future but because he is pretty sure 50 is as good as it is going to get. In 2008, Democrats won 60 Senate seats, and while with hindsight we can see this was a high-water mark, at the time Democrats dreamed bigger. After all, Mitch McConnell had only won 53%-47% in 2008. There were also open seats in states Obama had won in 2008 such as New Hampshire, North Carolina and Florida coming up in 2010, and there was a path to a Democratic supermajority.

    That is not the case after 2020. In 2020, only Susan Collins won reelection in a state won by the Presidential candidate of the opposing party. Democratic challengers, including strong ones such as Montana’s two-term governor, Steve Bullock lost, and lost badly (by 10% in Bullock’s case). This was also not just a 2020 phenomenon. Despite a good year for Democrats overall in 2018, Democratic incumbent Senators lost in Florida, Indiana, and Missouri that year.

    Biden’s underperformance scared Democrats because it indicated a ceiling, rather than a floor for their strength.

    In 2022, Democrats will be defending Senate seats in Arizona, Georgia, Nevada, and New Hampshire, all states that went to Biden, but within margins whereby strong GOP challengers, which exist in all those states, could win. More problematically, the list of Democratic targets includes only Pennsylvania and Wisconsin among states Biden won, and North Carolina and Florida among states Trump won by less than landslide margins. Matching Biden exactly would get the Democrats a gain of two seats; but even in 2020 most Democratic candidates ran behind Biden, and Biden is himself deeply unpopular today.

    The situation in the House is, if anything, worse for the Democrats. Democrats lost 12 House seats in 2020. The impact of redistricting is overblown – Republicans will gain a marginal advantage from the lines, but census results show the areas growing most quickly lean Democrat – yet nonetheless, the Democrat position is so weak that any deterioration in Biden’s position will be fatal to their 2022 hopes.

    In effect, the 2021 Democratic majorities are on a “death watch,” and Democrats’ confused attempts to deal with that realization is determining their current erratic behavior.

    The split in the party is not so much between the moderates and the progressives. It is between progressives and moderates who desire political futures and those who know they have none. Pelosi is able to generally pass left-wing legislation in the House despite her narrow majority because many of her moderates know they are doomed no matter what, and are willing to cast their votes for the progressive agenda. In turn, AOC and the Squad feel free to sabotage any compromises because their own seats are safe and they believe they have time to fight another day, even if it is ten years from now. By contrast, both Sinema and Manchin seem to resent the efforts of other Democrat officials to pressure them to commit political suicide or behave as if they personally are doomed, just because it is true of some of their colleagues. In particular, rhetoric out of the Democrat caucus that Manchin is “probably in his last term anyway” or that Sinema “won’t win reelection” seems predicated on the idea that both should act as if they are finished and behave accordingly.

    But think about the deeper implications of that statement: All moderate Democrats (with the possible exceptions of Manchin and Sinema) are aching to do The Will of the Party and push the most radical, leftmost agenda possible if only it weren’t for the pesky problems of winning elections. Even moderate Democrats are leftwing radicals.

  • Democrats really want to get their hands on all your banking information. Remember how Obama weaponized the IRS? That was just a foretaste. (Hat tip: Director Blue.)
  • Biden: The war against terror is over! Supreme Court: Then why are you still doing all these things that are only legal if a war’s still on? Biden Administration: Yeah, when we said the war against terror was over, we didn’t mean it was over over…
  • You know Merrick Garland’s social justice warrior problem? It gets worse:

    We learned, too, that Merrick Garland’s son-in-law, through his company, Panorama Education, sells CRT materials to public schools. And yesterday, it turned out that Panorama is also spreading material calling Trump and his supporters “white supremacists”

    Alexander “Xan” Tanner, a very White man, is married to Merrick Garland’s daughter. Tanner co-founded Panorama Education, which purports to provide a data platform that delves into students’ psychosocial issues in order to help schools intervene in problems and improve the school climate. In a word, it’s creepy…

    The educational workshop released by Panorama Education, co-founded by Alexander “Xan” Tanner, the group’s president, revolves around “systemic racism” and includes an article as a resource that states the Ku Klux Klan and attendees of Trump’s rallies are both “examples of white supremacy.”

    Garland should be forced to resign.

  • “More Hunter Biden Questions: Art Gallery Repping Him Gets Big Federal COVID Loan.” Try to contain your shock.
  • A husband and wife were arrested for trying to sell U.S. submarine secrets. “Navy nuclear engineer Jonathan Toebe, 42, and wife, Diana, 49, were charged Saturday with selling secret information to an unidentified foreign country.” Bonus! “The woman arrested with her Navy nuclear engineer husband for allegedly selling secret information about nuclear submarines to an undercover FBI agent appears to be vocally in support of Black Lives Matter and ‘resistance’ movements on her social media.” There’s a lot of shocked face in this LinkSwarm…
  • Michigan charges three women with more of that 2020 election fraud that doesn’t exist.

    Investigators determined Trenae Myesha Rainey, 28, a facility employee, did not contact residents as set by procedure and instead filled out the applications and forged the resident’s signature to each application….

    Investigators determined Nancy Juanita Williams, 55, planned to control absentee ballots for legally incapacitated persons under her care by fraudulently submitting 26 absentee ballot applications to nine identified city and township clerks.

  • “Sydney Lockdown Finally Ends After 106 Days.” Now Sydney residents just need to track down the people who ordered it and throttle them…
  • “School district equity chief canned after racist, anti-white videos surface.” That’s a good start, but every “chief equity officer” should be canned. (Hat tip: Instapundit.)
  • It’s FBI informants all the way down.
  • Empty Shelves Joe.
  • Morgan Freeman still isn’t having any of your defund the police lunacy. “I am not in the least bit for defunding the police.”
  • Democratic Virginia gubernatorial candidate and Clinton toady Terry McAuliffe lies again.

    Democratic gubernatorial candidate Terry McAuliffe incorrectly stated on Thursday night that there were 1,142 children in Virginia’s intensive care unit beds, a gross overestimation of the virus’s current impact in the state.

    “We in Virginia today, 1,142 children are in ICU beds,” McAuliffe stated during a roundtable discussion with local reporters. The statistic is a massive overestimation. Virginia Department of Health statistics show that there are a total of 443 people of all ages currently in ICU beds, a fraction of the figure McAuliffe put forth for children.

    The state database shows the number of Virginians in ICU beds infected with COVID-19 has never come close to 1,142 since the first hospitalizations in March 2020—the peak of individuals hospitalized in the ICU with COVID-19 was on Jan. 13, when there were 587 cases. State records show that just 1,094 individuals younger than 19 years old have been hospitalized with COVID-19 since the beginning of the pandemic. Children, who rarely get seriously ill from the virus, have never made up a significant chunk of hospitalized individuals.

    McAuliffe also said during the roundtable Virginia had “8,000 cases on Monday,” another exaggerated statistic. On Monday, Oct. 4, Virginia saw 1,220 “confirmed” cases and 864 “probable” cases, according to the Virginia Department of Health.

    The state has never seen 8,000 confirmed cases in a day. According to the department, Virginia’s 7-day moving case average peaked at 5,904 on Jan. 8, 2021—a number thousands short of McAuliffe’s case assessment.

    (Hat tip: Instapundit.)

  • Oregon county declares “illegal pot emergency.” On the other hand, the “emergency” is that they can’t seem to regulate illegal pot farms.
  • Eight Texas Constitutional questions are on the November 2nd ballot.
  • “Longtime politician Mark Ridley-Thomas and the former dean of the School of Social Work at a university in Southern California were indicted today on federal corruption charges that allege a bribery scheme in which a Ridley-Thomas relative received substantial benefits from the university in exchange for Ridley-Thomas supporting county contracts and lucrative contract amendments with the university while he served on the Los Angeles County Board of Supervisors.” This is the fed indictment notice, so it doesn’t mention that he’s a lifetime Democrat, in addition to being an LA City Councileman and former state rep.
  • Dwight has more details.
  • Art Acevedo out in Miami. Sounds like a mixture of BS and real Acevedo stupidity. And it’s generally not a good idea to compare Miami Cubans to commies…
  • This is why the left feels compelled to crush police unions: “Chicago Police Union to Defy Vaccine Mandate and Dare the City to Enforce It.” (Hat tip: Stephen Green at Instapundit.)
  • “Buy an electric vehicle,” they said. “They’re just as good and you’ll be saving the earth,” they said. Well surprise! “UK Readying New Law Mandating Home EV Chargers Be Shut Down During Peak Hours.” Also: “Beginning May 30, 2022, all chargers that are installed must be ‘smart’ chargers connected to the internet, allowing their functions to be limited between 8am to 11am and 4pm to 10pm.” Big brother in his squad car’s coming near…
  • Communist China demands that Christian pastor denounce himself for daring to preach the gospel in violation of state doctrine. Oh wait, did I say Communist China? I meant “Canada.”
  • Texas House passes Save Girls Sports act to keep them from having to compete against men.
  • UK: “Sir David Amess: Conservative MP stabbed to death. Police said a 25-year-old man was arrested on suspicion of murder after the attack at a church in Leigh-on-Sea.” Police seem awful tight-lipped on details about the murderer…
  • “Wyoming teenager hauled out of high school in handcuffs for refusing to wear a mask.” Every. Knee. Must. Bend.
  • British baker busted for selling cookies with illegal sprinkles.
  • Amy Alkon posts negative review for company trying to game Amazon reviews. result: Amazon deletes the review.
  • Heh:

  • John Deere workers go on strike.
  • Freedom Flu protest outside Southwest Airlines Monday, October 18:

  • “Southwest Airlines Offering Free Flights To All Passengers Who Are Vaccinated And Can Fly A Plane.
  • When the federal government banned sliced bread, supposedly due to helping the war effort in World War II. But nobody would admit who ordered it, or what scarce wartime commodities it was supposed to save, and the ban was lifted after two months. Sound familiar? Well, except for that whole “admitting the mistake and quickly reversing course” part…
  • You may be metal, but are you reach your hand into a shark’s mouth to remove a hook metal?
  • Armadillocon is this weekend.
  • Get hyped!

    • Tags:, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
    Posted in Border Control, Democrats, Economics, Elections, Global Warming, Jihad, Regulation, Social Justice Warriors, Supreme Court, Texas, unions, Waste and Fraud | 1 Comment »

    Dave Barry’s Year End Review for 2020

    Sunday, December 27th, 2020

    It’s that time of the year again, when Dave Barry summarizes the what we all went through in 2020:

    In the past, writing these annual reviews, we have said harsh things about previous years. We owe those years an apology. Compared to 2020, all previous years, even the Disco Era, were the golden age of human existence.

    This was a year of nonstop awfulness, a year when we kept saying it couldn’t possibly get worse, and it always did. This was a year in which our only moments of genuine, unadulterated happiness were when we were able to buy toilet paper.

    Which is fitting, because 2020 was one long, howling, Category Five crapstorm.

    We sincerely don’t want to relive this year. But our job is to review it. If you would prefer to skip this exercise in masochism, we completely understand.

    Snip.

    Back in mid-December, the House of Representatives passed two articles of impeachment, after which Speaker Nancy Pelosi, in accordance with the U.S. Constitution, handed out souvenir signing pens. Everyone expected that Pelosi would then send the articles to the Senate. But as of early January the Senate has not received them. People are wondering if Pelosi, what with her various official duties and hairdresser appointments, simply forgot to send the articles. Or maybe she tried to send them, but because of a bureaucratic snafu they wound up at a different federal entity, such as the Coast Guard.

    Eventually, however, the articles arrive at the Senate, where Majority Leader Mitch “The Undertaker” McConnell promises that the impeachment issue will receive full and fair consideration. He is of course joking, but this is not obvious, because even when Mitch is in a jovial mood he looks like a man passing a kidney stone the size of the Hope Diamond.

    Meanwhile in other political news, all eyes are on Iowa as it prepares for the caucuses, which are closely scrutinized because they are the first opportunity for a tiny group of unrepresentative voters to engage in an incomprehensible and deeply flawed process by which they anoint presidential candidates who traditionally go on to fail. This year, in an effort to modernize the caucuses, the Iowa Democratic party has upgraded from its old-fashioned manual reporting procedures to a modern, state-of-the-art “app” based on the same software used in the Boeing 737 MAX airliner.

    Snip.

    In other political news, Iowa Democratic party officials sense that there may be a problem with their new “app” when it declares that the winner of the state’s caucuses, with 43 million delegates, is Walter Mondale, followed by the Houston Astros (who also win the Super Bowl). This fiasco does not sit well with the other Democratic candidates, who realize they have wasted an entire year trudging around Iowa eating fried objects on sticks and pretending to care about Iowans.

    Things go more smoothly for the Democrats in the New Hampshire primary and Nevada caucuses, with Bernie Sanders emerging as the clear front-runner, which only seems to make him angrier. A new challenger emerges in the form of charisma-impaired billionaire Mike “Mike” Bloomberg, who uses his personal fortune to hire a vast army of consultants to supply him with a powerful arsenal of focus-group-tested policies, retorts, memes, jokes and humanoid personality traits. Nevertheless he struggles in the debates, the low point coming when Elizabeth Warren, during a heated exchange about non-disclosure agreements, pulls the waistband of Bloomberg’s underpants over the top of his head, a debate tactic known as the “atomic wedgie,” first performed by Lincoln on Douglas in 1858.

    Snip.

    And then, unfortunately, comes…
    MARPRIL

    …which starts off calmly enough, as the Democratic party, desperate to find an alternative to 132-year-old white guy Bernie Sanders, settles on 132-year-old white guy Joe Biden, who cruises to a series of primary victories after replacing “No Malarkey” with a bold new campaign slogan: “Somewhat Alert At Times.” Biden is endorsed by most of his Democratic opponents, including “Mike” Bloomberg, who spent more than $500 million on his campaign, which seems like a lot of money until you consider that he won the American Samoa Caucus, narrowly edging out Tulsi Gabbard, who spent $13.50.

    And then, sprinkled in amid all the political coverage, we begin to see reports that this coronavirus thing might be worse than we have been led to believe, although at first the authorities still seem to be saying that it’s basically the flu and there is no reason to panic, but all of a sudden there seems to be no hand sanitizer for sale anywhere, which makes some sense although there is also no toilet paper, as if people are planning to be pooping for weeks on end (ha) and then we learn that Tom Hanks — Tom Hanks! – has the virus and now they’re saying it’s a lot worse than the flu and we need to wash our hands and not touch our faces and maintain a social distance of six feet and use an abundance of caution to flatten the curve (whatever “the curve” is) but they’re also saying we don’t need face masks no scratch that now they’re saying we DO need face masks but nobody HAS any face masks but hey here’s a funny meme about toilet paper but ohmigod look at these statistical disease models WE ARE ALL GOING TO DIE but Trump says maybe this hydroxysomething medicine will work no it won’t work yes it will work no it won’t and now they’re saying there won’t be enough ventilators or hospital beds or PPE and Dr. Fauci and Dr. Birx are saying everybody has to shelter at home or else WE ARE ALL DEFINITELY GOING TO DIE hey here’s another funny toilet-paper meme but seriously what is PPE and is that different from PPP and where will we get the ventilators and there won’t be enough hospital beds and there is still no hand sanitizer and I keep touching my face and they just canceled the NBA can they even DO that wait now they canceled ALL the sports and closed all the schools the colleges the stores the restaurants the bars the theaters the hair salons the parks the Atlantic and Pacific oceans and now they’re saying we need to stay at home for HOW LONG what about the toilet paper I can’t stop touching my damn face are you seriously telling me all this is because somebody ate a freaking bat maybe Amazon has toilet paper ohmigod they’re sold out too WHAT IS THE DEAL WITH THE TOILET PAPER not another Zoom meeting I am so tired of shouting at people in little boxes maybe I should take a shower but what’s the point hey here’s a bunch more funny memes ohmigod look at the Stock Market the price of oil maybe I’ll just take a peek at my 401k oh NOOOOOOOO and WHAT ARE PEOPLE DOING WITH ALL THIS TOILET PAPER and how long do we have to keep being abundantly cautious what did Trump say about the ventilators and what did Dr. Birx and Dr. Fauci say about what Trump said about the ventilators and what did Trump say about what they said about what he said about the ventilators ventilators ventilators LOOK AT THESE MODELS WE ARE STILL GOING TO DIE but do we really want to go on living in a world where there’s no toilet paper and every single TV commercial sounds like “as we navigate these difficult times together, the National Association of Folding Chair Manufacturers wants you to know that we are committed to running these TV commercials with a somber narrator voice telling you how committed we are” and WHY WOULD SOMEBODY EAT A DAMN BAT these memes are getting old hey do you think that Carole Baskin woman actually fed her husband to a tiger maybe we should order pizza tonight wait I think we had pizza last night are you sure it’s Tuesday because it feels more like Thursday no please God not another freaking Zoom meeting stop already with the memes if the tiger ate her husband shouldn’t there be a skeleton somewhere are we flattening the curve yet Dr. Fauci Dr. Birx because we’re in a recession no wait maybe it’s a depression look at the unemployment numbers we are never going to recover from this if the virus doesn’t kill us we will starve to death we need more money from the government we need billions no we need trillions no we need MORE trillions where is this money coming from we have to open the economy up but if we do WE WILL ALL DIE hey I found some toilet paper oh no it’s one-ply which is basically the same as using your bare hand thank God I also found some hand sanitizer and speaking of good news Bernie Sanders is endorsing Joe Biden so apparently they’re both still alive if I see one more meme I am going to puke in my facemask I’m afraid to get on a scale my thighs are basically two armadillo-sized wads of pizza dough hey Dr. Birx Dr. Fauci when will we have a vaccine when will we have herd immunity when can we go outside when can we go back to work what is the “new normal” good lord what did Trump say about disinfectants DON’T INJECT CLOROX YOU IDIOTS what about the food chain what about reinfection what about the second wave hey they’re showing the NFL draft and Georgia is opening the tattoo parlors and holy crap now it’s…

    MAY

    …and we are, as a nation, exhausted. We are literally sick and tired of the pandemic. But amid all the gloom, there is a ray of sunshine: As we go through this harrowing experience — affecting all Americans, in both red states and blue states — we are starting to realize that our common humanity is more important than our political differences.

    Ha ha! Seriously, we hate each other more than ever.

    Snip.

    Meanwhile, in a basement somewhere in Delaware, Joe Biden and his campaign team have managed to procure a “webcam,” which they intend to use to “log on” to the “Internet” so that Joe’s campaign message can go “viral,” just as soon as Joe decides what it is.

    In scandal news, the justice department moves to drop all charges against former Trump National Security Advisor Michael Flynn. Outraged Democrats claim this is a travesty of justice; outraged Republicans claim it is proof that the Deep State tried to stage a coup. And thus we are back to arguing about the 2016 election, which we are going to keep arguing about until everybody involved has been dead for 50 years.

    Snip.

    Here we should at least mention the arrival of the Asian murder hornets. In any other year they would have been a huge story, comparable to famous celebrity pests of the past, such as the killer bees, or the cast of “Jersey Shore.” But in 2020 there is simply too much competition, and the murder hornets end up living in a cheap motel near the Canadian border, their dreams of fame shattered.

    Snip.

    For their part, the Democrats, fed up with the longstanding pattern of systemic racism and police misconduct in major U.S. cities, vow to bring about real reform, just as soon as they can figure out who, exactly, is in charge of these cities. One much-discussed reform proposal is defunding the police, which is clearly defined by its proponents as “taking the funding away from the police” as well as “not taking the funding away from the police.”

    Snip.

    COVID19 cases continue to rise sharply in some southern states, accompanied by what the World Health Organization describes as an “alarming” spike in smugness in some northern states, notably New York, where Gov. Andrew Cuomo unveils a poster, for sale at $11.50, commemorating, in a cartoony manner, New York’s pandemic experience. Really. It is as if the White Star Line sold whimsical souvenirs of the Titanic.

    Snip.

    By far the month’s most disturbing event occurs on July 15 when Twitter, responding to a cyberattack, temporarily suspends many verified blue-check accounts. Within minutes emergency rooms in Washington and New York are overwhelmed by media thought leaders whose brains are literally exploding from the pressure of unreleased insights. Meanwhile in the rest of the nation, non-elite Americans wander the streets aimlessly, with no way to know what they should think. Fortunately this situation lasts only a few hours, but it highlights the urgent need for a federally maintained Blue Check Media Emergency Tweet Reserve, similar to the National Helium Reserve, but more gaseous.

    Snip.

    Meanwhile at home the nation’s mood is increasingly tense and angry as Americans are bombarded all day, every day, with a constant stream of news about protests, boycotts, disruption, despair and rage. And that’s just on SportsCenter.

    California, as it traditionally does at this time of year, bursts into flames. Adding to the citizens’ misery are rolling electrical blackouts, possibly related to the fact that the state legislature has banned all sources of electricity except windmills and 9-volt batteries.

    Snip.

    The federal deficit reaches $3.3 trillion, as the government continues its unchecked descent into horrendous, unsustainable levels of debt, with neither political party even seriously acknowledging the danger, let alone taking meaningful action to prevent future generations of Americans from being permanently screwed.

    Snip.

    The Senate confirms Amy Coney Barrett after she successfully completes the traditional Judiciary Committee hazing ritual, in which she must answer questions for three consecutive days without saying anything.

    Joe Biden enters the final stretch of the campaign with a schedule that sometimes has him doing as many as one appearance per day. Also taking a brutal toll on the former vice president is the fact that he must repeatedly, day after day, deal with the grueling physical strain of not telling reporters what he thinks about packing the Supreme Court. At one appearance, when asked about this, Biden says (this is an actual quote): “the moment I answer that question, the headline in every one of your papers will be on the answer to that question.” While reporters wrestle with the Confucian profundity of this statement, Joe is whisked back to Delaware.

    Snip.

    In social-media news, Twitter blocks a New York Post story about incriminating emails allegedly found on Hunter Biden’s laptop, on the grounds that the story is of questionable origin. This is of course a violation of Twitter’s extremely strict accuracy policy, under which every single tweet that Twitter does allow to be published is 100 percent vetted and legit.

    In sports, the coronavirus causes major disruptions in the fall football schedule, the result being that on a single afternoon the New York Jets wind up losing to both the Kansas City Chiefs and Vassar. On a happier note, the World Series, for the 11th consecutive year, does not in any way involve the New York Yankees.

    Snip.

    The good news is that several drug companies announce that they have developed promising vaccine candidates, while Budweiser reports “significant progress” on a hard seltzer that also can be used as hand sanitizer.

    The bad news is that the number of cases, in what feels like the 37th wave, is spiking once again, and American consumers are once again creating shortages of toilet paper by buying enough rolls per household to wipe every butt in Denmark for a year. Many states impose tough new COVID restrictions, most notably California, which bans “all human activity not personally involving the governor.”

    Read the whole thing.

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    21% Growth In Q3?

    Wednesday, May 27th, 2020

    At least some economists think we’re in for a V-shaped recession. And naturally, Democrats are furious:

    In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking, and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.

    Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.

    “We are about to see the best economic data we’ve seen in the history of this country,” he said.

    The former cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.

    “Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and GDP growth ever.

    Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.

    Snip.

    The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption, and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industry-wide catastrophe like the Gulf of Mexico oil spill.

    Consumption and hiring started to tick up “in gross terms, not in net terms,” Furman said, describing the phenomenon as a “partial rebound.” The bounce back “can be very very fast, because people go back to their original job, they get called back from furlough, you put the lights back on in your business. Given how many people were furloughed and how many businesses were closed you can get a big jump out of that. It will look like a V.”

    Furman’s argument is not that different from the one made by White House economic advisers and Trump, who have predicted an explosive third quarter, and senior adviser Jared Kushner, who said in late April that “the hope is that by July the country’s really rocking again.” White House officials were thrilled to hear that some of their views have been endorsed by prominent Democrats.

    “I totally agree,” Larry Kudlow, the head of the White House National Economic Council, replied in a text message when asked about Furman’s analysis. “Q3 may be the single best GDP quarter since regular data. 2nd half super big growth, transitioning to 4% or more in 2021.” He called Furman, who he said he knows well, “usually a straight shooter. Hats off to him.”

    “I have been saying that on TV as well,” said Kevin Hassett, a top Trump economic adviser, who pointed to a Congressional Budget Office analysis predicting a 21.5 percent annualized growth rate in the third quarter. “If CBO is correct we will see the strongest quarter in history after the weakest in Q2.”

    As a general rule, it’s best not to punch yourself in the nads, but if you do, it’s far better to get up, shake it off and keep walking than it is to lie weeping on the sidewalk. The American economy was going gangbusters before The Great Wuhan Recession, and if Democratic governor’s don’t try to keep obviously futile lockdowns in place in order to tank the economy, there’s no reason* it can’t start to do better again in the summer and fall.

    That, of course, is precisely what Democrats fear.

    The former Obama White House official said, “Even today when we are at over 20 million unemployed Trump gets high marks on the economy, so I can’t imagine what it looks like when things go in the other direction. I don’t think this is a challenge for the Biden campaign. This is the challenge for the Biden campaign. If they can’t figure this out they should all just go home.”

    As Byron York noted, Democrats fear nothing so much as economic growth.

    *OK, there is one reason: A crushing debt load that neither political party seems willing to address. On the other hand, we’ve been fearing the effects of excessive government debt for quite some time now. The Gods of the Copybook Heading can’t be put off forever, but with Treasury 30 year yields under 1.5%, there’s no sign that our government’s bipartisan spending spree has (yet) dulled the world’s appetite for American debt.

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    Posted in Economics, Elections | 1 Comment »

    Debt Limit Deal: Maybe Not Completely Awful?

    Tuesday, September 12th, 2017

    There has been a lot of wailing and gnashing of teeth over the debt deal President Donald Trump made with congressional Democratic leaders that pushes U.S. debt over the $20 trillion mark.

    Is it a bad deal? From my perspective, almost certainly. Debt is an existential threat to the Republic, and I believe that we should reduce spending by eliminating vast swathes of federal government programs (Federal housing sibsidies? End them. Department of Education? Eliminate it. Agribusiness subsides? End them all. Etc.) until the budget is balanced. Then you wouldn’t have to worry about hitting the debt limit at all.

    Sadly, my position seems to be a decidedly minority one in D.C. Since politics is the art of the possible, it’s better to ask: How bad is President Trump’s deal among the constellation of actual debt limit deal possibilities?

    The answer seems to be: Still not great, but maybe not as bad as first impressions.

    It’s possible that President Trump went for the deal because he had no choice, as Republican congressional leadership was woefully unprepared on the issue:

    With much of the Washington Republican establishment still grumbling about President Donald Trump’s decision earlier this week to strike a deal with Democratic leaders Chuck Schumer and Nancy Pelosi, one prominent member of the House Freedom Caucus took to the Sunday Talk Shows to deliver what sounded like the faction’s official response to the week’s events.

    In an appearance on Fox News Sunday, Ohio Rep. Jim Jordan struck a delicate balance: criticizing the consequences of the president’s decision without impugning the man himself.

    Jordan explained that while the Trump-Schumer-Pelosi deal wouldn’t be “good for the American taxpayer” the president can be excused for agreeing to it because Republicans in Congress failed to provide him with a suitable alternative.

    And just like that, a member of the House’s most intransigent, conservative faction – the group that almost singlehandedly crushed the Trump administration’s health-care ambitions – turning the blame for Trump’s debt-ceiling can-kicking, and the powerful leverage that Democrats gained because of it, back on the president’s favorite opponents: Congressional Republicans.

    Here’s Jordan:

    I don’t think this was a good deal for the American taxpayer. We didn’t go anything to address the underlying $20 trillion debt but frankly what options did the president have in front of him? The first time the Republican conference talked about the debt ceiling was Sunday morning. And the Freedom Caucus had called for, nine and a half weeks ago, we said ‘don’t leave town until you have a plan on the debt ceiling’ and instead we went home for the longest August recess in a decade, longer even than in elections years.

    Indeed, the deal House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell wanted was actually worse for conservatives:

    Trump on Wednesday agreed to the proposal of House minority leader Nancy Pelosi (D., Calif.) and Senate minority leader Chuck Schumer (D., N.Y.) to increase the national-debt limit for three months, and attach that to emergency aid for victims of Hurricane Harvey. But just days earlier, conservatives had been wringing their hands in fear that Schumer would turn the debt ceiling into the Democrats’ newest set of brass knuckles.

    If not for the high-profile urgency of, in essence, stapling the debt limit to Harvey assistance, the pressing need to re-charge Uncle Sam’s credit card would have given Schumer a fresh way to beat up Republicans. Absent Harvey, Schumer and his band of toughs would have kidnapped the debt limit in exchange for something else, perhaps “DACA or death!” Instead, the debt-limit increase slid through, behind Harvey’s shield, with no last-minute hostage drama.

    Trump rejected the offer of House speaker Paul Ryan (R., Wisc.) and Senate majority leader Mitch McConnell (R., Ky.) to extend the debt limit for 18 months, past the 2018 mid-term elections. This would have removed federal borrowing from the list of issues on which the GOP could have run next year. Obama hiked the national debt from $10.6 trillion to $19.9 trillion — a staggering 87.8 percent. That mess, and how to escape it, would have been a worthy GOP issue. Ryan and McConnell largely would have obviated that opportunity.

    Ryan and McConnell’s 18-month proposal also would have deprived Republicans of a priceless “must pass” vehicle to which they could append items that Senate Democrats dislike. The GOP similarly handed Obama multiple long-term debt-limit extensions that prevented Republicans from sending him short-term debt-limit measures that he would have had to sign, notwithstanding amendments that rankled him. Republicans should not deploy the debt limit every month, in order to corner Schumer and Senate Democrats. But mothballing this weapon until spring 2019 smacks of unilateral disarmament.

    From all reports, Ryan and McConnell were ready to drop-kick the debt-limit 18 months down the road, in return for . . . nothing. Even worse, as conservatives correctly complain, they did not tie the debt-limit boost to any structural reforms, such as a cap on federal spending as a share of GDP, adoption of the brilliant Penny Plan (which would balance the budget by cutting total spending by 1 percent every year for eight years), a private-sector audit of every federal department and sub-cabinet agency, or even converting Washington’s books from cash-basis to accrual accounting. Ryan and McConnell promised 18 months of borrowing and spending on autopilot. Trump properly rejected such fiscal brain death.

    Now, in three months, fiscal conservatives can and should append reformist language to the next debt-limit increase. Ryan/McConnell would have denied them that opportunity until nearly two Easters hence.

    If Schumer wanted to demand “DACA or death!” I would have seen how he likes death: no debt limit vote, cut spending until the budget is balanced, and let Schumer explain why it was necessary for welfare recipients to lose their checks so Democrats could amnesty more illegal aliens.

    Like I said, mine seems to be a minority viewpoint.

    There are also reports that the deal is written in such a way that McConell might get the last laugh:

    Senate Majority Leader Mitch McConnell (R-Ky.) wrote in some “extraordinary” provisions to the debt ceiling bill that could mean there won’t be another debt ceiling fight in 2017 after all, he revealed on “The New Washington” podcast Monday.

    McConnell insisted, in the face of Democrats’ objections, that the bill be written to preserve the Treasury’s ability to extend federal borrowing power by moving money around within government accounts. In layman’s terms, that means the Republicans can work around the December debt limit deadline and push that issue into 2018.

    All this is just rearranging deck chairs on the Debtanic as long as the driving motivation for current congressional leadership is avoiding bad poll numbers rather than actual conservative governance. But short of a debt deal that includes spine replacement surgery for congressional leadership, there seems precious little chance of congress fulfilling any of the myriad conservative promises they made when Obama occupied the White House.

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    LinkSwarm for September 8, 2017

    Friday, September 8th, 2017

    It would be swell if I could stop leading the LinkSwarm off with hurricane-related news, but Irma is now a class five hurricane headed straight at Florida. If you’re in any evacuation zones, heed authorities, as this does not look like a storm you want to ride out in place unless you have to. Hsoi’s preparedness checklist is also a good thing to go over earlier rather than later.

  • One reason President Donald Trump had to act on DACA: Texas Attorney General Ken Paxton and nine other states were threatening to sue to end Obama unconstitutional backdoor amnesty program.
  • “¯\_(ツ)_/¯ Obama lawyer who worked on DACA admits it’s probably unconstitutional.” And yes, the ASCII Shrugging Emoji is actually in the headline, so it just wouldn’t have felt honest to leave it out…
  • “Trump’s Crackdown on Illegal Aliens is Driving Wage-Growth in US Construction Industry by up to 30%.” In other news: Basic economics have not been repealed by liberal talking points. (Hat tip: Borepatch.)
  • Congress passes hurricane relief bill and debt ceiling hike. Both John Cornyn and Ted Cruz voted in favor of the bill. I haven’t read the bill, but I’m hoping it’s less stuffed with pork than the Sandy bill.
  • J.J. Watt’s Hurricane Harvey flood relief fundraiser hits $29 million.
  • What it takes to keep HEB stores up and running after a hurricane.

    One of my stores, we had 300 employees; 140 of them were displaced by the flooding. So how do you put your store back together quickly? We asked for volunteers in the rest of the company. We brought over 2,000 partners from Austin, San Antonio, the Rio Grande Valley. They hopped into cars and they just drove to Houston. They said, we’re here to help. It’s shitty work. For 18 hours a day, they’re going to help us restock and then they’ll go sleep on the couch at somebody’s house.

  • The bribery trial for New jersey Democratic Senator Robert Menendez gets under way.
  • “It Appears That Out-of-State Voters Changed the Outcome of the New Hampshire U.S. Senate Race.” (Hat tip: Director Blue.)
  • Why Israel had to bomb Syria’s chemical weapons complex. For one thing, it looks like Iran, Assad and Hezbollah will all emerge strengthened from the Syrian civil war…
  • Speaking of Iran, they’re amassing new weaponry. “While all eyes are on North Korea, Iran is advancing its weapons technology. The country recently tested and announced the success of their new Bavar 373 long range, mobile, anti-missile defense system. Everything in the system is manufactured in Iran; it requires no support from outside sources.” However, since Iran has (to my knowledge) no wafer fabrication plants to produce integrated circuits, this statement is almost certainly false, at least as far as electronics goes. (Hat tip: Stephen Green at Instapundit.)
  • “Bulgaria is projected to have the fastest-shrinking population in the world.” I suspect this is a combination of communism (and its aftermath) sucking, of it wrecking disproportionately more damage on backward, mostly rural countries, and of the general trend in Europe toward a modern, unchurched, welfare state society, with its attendant population decline.
  • Betty DeVos vows to dismantle the Obama-era campus kangaroo rape courts. (Hat tip: Ace of Spades HQ.)
  • “Twitter Bans Activist Mommy for Tweeting Her Dislike of Teen Vogue’s Anal Sex Guide.” (Hat tip: Ed Driscoll at Instapundit.)
  • This is disappointing.
  • Texans handled Harvey better than Louisianans handled Katrina because both their governments and societies are more functional.
  • Another day, another fake hate crime. (Hat tip: The Other McCain.)
  • The American Railway union was founded on segregation. “George Pullman famously hired African Americans to work for him. Eugene Debs infamously did not allow African Americans to join his union striking against Pullman’s company.”
  • Al Gore’s new book being outsold by scientist’s book debunking Al Gore.
  • I laughed.

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    Posted in Border Control, Budget, Communism, Crime, Democrats, Elections, Foreign Policy, Military, Republicans, Social Justice Warriors, Texas, unions | No Comments »

    Interview with TPPF’s James Quintero on the Texas Municipal Pension Debt Crisis

    Monday, January 2nd, 2017

    James Quintero, the Director of the Center for Local Governance at the Texas Public Policy Foundation, was kind enough to provide some detailed answers to questions I sent him about the municipal pension crisis in Dallas and other large Texas cities. My questions are in italics.

    The Dallas police/fireman’s pension fund issue is generally described as stemming from the fund manager’s risky real estate speculation. Are there any additional structural problems that helped hasten that fund’s crisis?

    When it comes to Texas’ public retirement systems, one of my greatest concerns is that there are other ticking time-bombs, like the DPFP, out there getting ready to explode. It’s not just Dallas’ pension plan that’s taken on excessive risk to chase high yield in a low-yield environment.

    Setting aside the issue of risk for a moment, the DPFP, like most other public retirement systems around the state, suffers from a fundamental design flaw. That is, it’s based on the defined benefit (DB) system, which guarantees retirees a lifetime of monthly income irrespective of whether the pension fund has the money to make good on its promises or not. This kind of system is akin to an entitlement program, warts and all, and is very much at the heart of pension crises brewing in Texas and across the country.

    One of the biggest problems with DB plans is that they rely on a lot of fuzzy math to make them work, or at least give the appearance of working. Take the issue of investment returns, for example. Many systems assume an overly optimistic rate of return when estimating a fund’s future earnings. Baking in these rosy projections is, among other things, a way to understate a plan’s pension debt. In an October 2016 study that I co-authored with the Mercatus Center’s Marc Joffe, I wrote the following to illustrate this very point:

    For example, the Houston Firefighters’ Relief and Retirement Fund (HFRRF) calculates its pension liability using a long-term expected rate of return on pension plan investments of 8.5%. During fiscal year 2015, the plan’s investments returned just 1.53%. Over a 7- and 10-year period the rates of return were 6.4% and 7.9%, respectively. Not achieving these investment returns year-after-year can have a dramatic fiscal impact.

    Even a small change in the actuarial assumptions can have major consequences for the fiscal health of a pension fund. According the HFRRF’s 2015 Comprehensive Annual Financial Report, a 1% decrease in the current assumed rate of return (8.5%) would almost double the fund’s pension liabilities, from $577.7 million to $989.5 million.

    So while risky real estate deals were certainly a catalyst in the current unraveling of the DPFP, I suspect that its refusal to move away from the defined benefit model and into a more sustainable alternative—much like the private sector has already done—would have ultimately led us to this same point of fiscal crisis.

    To what legal extent (if any) is Dallas police/fireman’s pension fund backstopped by the City of Dallas and/or Dallas County?

    Let me preface this by saying that I’m not a lawyer nor do I ever intend to be one. However, Article XVI, Section 66 of the Texas Constitution plainly states that non-statewide retirement systems, like DPFP, and political subdivisions, like the city of Dallas, “are jointly responsible for ensuring that benefits under this section are not reduced or otherwise impaired” for vested employees. Given that, it’s hard to see how the city of Dallas—or better yet, the Dallas taxpayer—isn’t obligated in some major way when their local retirement system reaches the point of no return, which may be a lot closer than people think given all the lump-sum withdrawals of late.

    Likewise, does the state of Texas have any statutory backstop to the Dallas police/fireman’s pension fund, or any other local pension funds?

    For non-statewide plans, I don’t believe so. Again, I’m not a lawyer, but the Texas Attorney General wrote something fairly interesting recently touching on aspects of this question.

    In September 2016, House Chairman Jim Murphy asked the AG to opine on “whether the State is required to assume liability when a local retirement system created pursuant to title 109 of the Texas Civil Statutes is unable to meet its financial obligations.” Title 109 refers to 13 local retirement systems in 7 major metropolitans that are a small-but-important group of plans that have embedded some of their provisions in state law (i.e. benefits, contribution rates, and composition of their boards) I’ve written a lot about this problem in the past (read more about it here).

    In response to Chairman Murphy’s question, the AG had this to say:

    In no instance does the constitution or the Legislature make the State liable for any shortfalls of a municipal retirement system regarding the system’s financial obligations under title 109. The Texas Constitution would in fact prohibit the State from assuming such liability without express authorization.

    …a court would likely conclude that the State is not required to assume liability when a municipal retirement system created under title 109 is unable to meet its financial obligations.

    So at least in the AG’s opinion, state taxpayers wouldn’t be required by law to bail out this subset of local retirement systems. But of course, the political calculus may be different than what’s required by law.

    Compared to the Dallas situation, how badly off are the Houston, Austin and San Antonio public employee pension funds?

    If you’re a taxpayer or property owner in one of Texas’ major cities, I’d be concerned. Moody’s, one of the largest credit rating agencies in the U.S., recently found that: “Rapid growth in unfunded liabilities over the past 10 years has transformed local governments’ balance sheet burdens to historically high levels,” and that Austin, Dallas, Houston, and San Antonio had a combined $22.6 billion in pension debt—and it’s growing worse!

    Using the Pension Review Board’s latest Actuarial Valuations Report for November 2016, we can parse the systems within each municipality to get a little bit better sense of where the trouble lies. Pension debt for the retirement systems in the big 4 looks like this:

  • Austin Employees’ Retirement System: $1.1 billion, Austin Police Retirement System: $346 M, and Austin Fire Fighters Relief and Retirement Fund: $93 M;
  • Dallas Employees’ Retirement Fund: $809 M, Dallas Police and Fire Pension System—Combined Plan: $3.3 B, and Dallas Police and Fire Pension System—Supplemental: $23 M;
  • Houston Municipal Employees Pension System: $2.2 B, Houston Firefighters’ Relief and Retirement Fund: $467 M, and Houston Police Officer’s Pension System: $1.2 B; and
  • San Antonio Fire and Police Pension Fund: $360 M.

    • Of course, it’s important to keep in mind that the figures use some of the same fuzzy math as described above, so the actual extent of the problem may be worse than the PRB’s latest figures indicate.

    What similarities, if any, are there to current Texas municipal pension issues and those that forced California cities like San Bernardino, Stockton and Vallejo into bankruptcy? What differences?

    The common element in most, if not all, of these systemic failures is the defined benefit pension plan. Because of the political element as well as the inclusion of inaccurate investment assumptions in the DB model, these plans are almost destined to fail, threatening the taxpayers who support it and the retirees who rely on it. And sadly, that’s what we’re witnessing now across the nation.

    As far as the differences go, California’s municipal bankruptcies as well as Detroit’s were preceded by decades of poor fiscal policy and gross mismanagement. I don’t see that same thing here in Texas, but it’s also important that we don’t let it happen too.

    California pensions were notoriously generous (20 years and out, spiking, etc.). Do any Texas state or local pensions strike you as unrealistically generous?

    Any plan that’s making pension promises but has no plan on how to make good on those promises is being unrealistically generous. And unfortunately for taxpayers and retirees alike, a fair number of plans can be categorized as such.

    The Pension Review Board’s Actuarial Valuations Report for November 2016 reveals that of Texas’ 92 state and local retirement system, only 4 of them are fully-funded. At the other extreme, a whopping 19 of the 92 plans have amortization periods of more than 40 years. Six of those 19 plans have infinite amortization periods, which effectively means that they have no plan to keep their promises but are instead planning to fail.

    As far as specific plans go, there’s no question that the Dallas Police and Fire Pension System is the posterchild for the overly generous. The Dallas Morning News recently covered the surreal levels of deferred compensation offered, finding that:

    The lump-sum withdrawals come from the Deferred Retirement Option Plan, known as DROP. The plan allows veteran officers and firefighters to essentially retire in the eyes of the system and stay on the job.

    Their benefit checks then accrue in DROP accounts. For years, the fund guaranteed interest rates of at least 8 percent. DROP made hundreds of retired officers and firefighters millionaires. And once they stopped deferring the money, they received their monthly benefit checks in addition to their DROP balance. [emphasis mine]

    It’s probably fair to say that any public program that makes millionaires out of its participants is probably being too generous with its benefits.

    There seem to be only two recent local government bankruptcies in Texas, neither of which were by cities: Hardeman County Hospital District Bankruptcy and Grimes County MUD #1. Did either of these involve pension debt issues?

    I’m not familiar with those instances, but when it comes to the issue of soaring pension obligations, I can tell you that the system as a whole is moving in bad direction.

    In November 2016, Texas’ 92 state and local retirement systems had racked up over $63 billion dollars of unfunded liabilities, with more than half owed by the Teacher Retirement System. That’s a staggering amount of pension debt that’s not only big but growing fast. And worse yet, that’s in addition to Texas’ already supersized local government debt-load.

    How we’re going to make good on all of these unfunded pension promises is anyone’s guess. But I imagine that it’ll involve some combination of much higher taxes, benefit reductions, and fewer city services.

    What limits or constraints does Texas place on Chapter 9 bankruptcy?

    The Pew Charitable Trusts’ Stateline has some good information on this, at least as far as municipal bankruptcy is concerned. A November 2011 report, Municipal Bankruptcy Explained: What it Means to File for Chapter 9, had this to say about the process:

    Who can file for Chapter 9? Only municipalities — not states — can file for Chapter 9. To be legally eligible, municipalities must be insolvent, have made a good-faith attempt to negotiate a settlement with their creditors and be willing to devise a plan to resolve their debts. 

They also need permission from their state government. Fifteen states have laws granting their municipalities the right to file for Chapter 9 protection on their own, according to James Spiotto, a bankruptcy specialist with the Chicago law firm of Chapman and Cutler. Those states are Alabama, Arizona, Arkansas, California, Idaho, Kentucky, Minnesota, Missouri, Montana, Nebraska, New York, Oklahoma, South Carolina, Texas and Washington. 

    Hopefully this is a process that can be avoided entirely, but given the fiscal condition of the DPFP and potentially a few other systems, I’m not sure that’ll be the case.

    Next to Dallas, which municipal pensions would you say are in the worst shape?

    I’m most concerned about the local retirement systems in Title 109. The reason, again, is that these 13 local retirement systems are effectively locked into state law and there’s little that taxpayers or retirees in those communities can do to affect good government changes without first going to Austin. These systems have basically taken a bad situation and made it worse by fossilizing everything that counts.

    In the Texas Public Policy Foundation’s 2017-18 Legislator’s Guide to the Issues, I cover this issue in a little more detail. In the article (see pgs. 122 – 124), I write of these plans’ fiscal issues which can be seen below, albeit with slightly older data.

    texaspensiondebtchart

    (Funded ratios marked in red denote systems that are below the 80% threshold, signifying a plan that may be considered actuarially unsound. Source: Texas Bond Review Board.)

    The fact that these systems either are in or are headed for fiscal muck is a big reason why the Texas Public Policy Foundation is helping to educate and engage on legislation that would restore local control of these state-governed pension plans. People on the ground-level should have some say over their local plans, and that’s what we’ll be fighting for next session. Encouragingly, a bill’s already been filed in the Senate (see SB 152) and there should be legislation filed shortly in the House to do just that.

    Should Texas government agencies switched over to defined contribution (i.e. 401K) plans over standard pension plan, and if so, how might this realistically be accomplished without endangering existing retirees?

    ABSOLUTELY. Ending the defined benefit model and transitioning new employees into something more sustainable and affordable, like a defined contribution system, is one of the best things that the state legislature can do. This is something I’ve long been an advocate of.

    In fact, in early 2011, I played a very minor role in the publication of some major research spearheaded by Dr. Arthur Laffer, President Ronald Reagan’s chief economist, that advanced this same reform idea (see Reforming Texas’ State & Local Pension Systems for the 21st Century). I’ve also written a lot about the need to make the DC-switch, making the case recently in Forbes that:

    DC-style plans resemble 401(k)s in the private sector and the optional retirement programs (ORP) available for higher education employees in Texas. These DC-style plans put the power of an individual’s future in their own hands instead of depending on the good fortune of government-directed DB-style plans. DC-style plans are portable and sustainable over the long term as they are based on the contributions of retirees and a defined government match.

    With DC-style plans, retirees will finally have the opportunity to determine how much risk they are willing to take. They also reduce the risk that the government will default on their retirement or fund those losses with dollars from taxpayers who never intended to use these pensions. By giving retirees more freedom on how to best provide for their family, they will be in a much better position to prosper.

    Because of their efficiency, simplicity and fully funded nature, the private sector moved primarily to DC-style plans long ago. For the sake of taxpayers and retirees dependent on government pensions, it’s time for all governments to move to these types of plans as well.

    As far as dealing with transition costs, some much smarter people than I have written on this issue and found that it’s not as big of a challenge as it’s made out to be. Dr. Josh McGee, a vice president with the Laura and John Arnold Foundation, a senior fellow with the Manhattan Institute, and Chairman of the Pension Review Board, had this to say about the matter:

    Moving to a new system would have little to no effect on the current system. State and local pensions are pre-funded systems, and unlike Social Security, the contributions of workers today do not subsidize today’s retirees. Future normal cost contributions are used to fund new benefit accruals that workers earn on a go-forward basis and are not used to close funding gaps. Therefore, it matters little whether the normal cost payments are used to fund new benefits under the current system or a new system.

    (Source: The transition cost mirage—false arguments distract from real pension reform debates.)

    Another pension expert, Dr. Andrew Biggs with the American Enterprise Institute, published research that found that:

    In this study, I show that if a pension plan were closed to new hires, over time the duration of liabilities would shorten, and the portfolio used to fund those liabilities would become more conservative. However, the effects of these transition costs are so small as to be barely perceptible.

    (Source: Are there transition costs to closing a public-employee retirement plan?)

    I’m confident that with the right plan in place, Texas’ state and local retirement systems can make the switch to defined contribution and we’ll be all the better for it.

    Thanks to James Quintero for providing such a detailed analysis!

    And since we’re on the topic, here’s a roundup of news on the Dallas Police and Fireman’s pension fund crisis:

  • The Texas Rangers have launched a criminal probe into the shortfall.
  • City Journal offers details on the unreasonable generosity of the Dallas plan (which covers some of the same DROP issues Quintero mentions):

    Dallas created the police and fire plan in 1916. The system’s trustees eventually persuaded the state legislature to allow employees and pensioners to run the plan. Not surprisingly, the members have done so for their own benefit and sent the tab for unfunded promises—now estimated at perhaps $5 billion—to taxpayers. Among the features of the system is an annual, 4 percent cost-of-living adjustment that far exceeds the actual increase in inflation since 1989, when it was instituted. A Dallas employee with a $2,000 monthly pension in 1989 would receive $3,900 today if the system’s annual increases were pegged to the consumer price index. Under the generous Dallas formula, however, that same monthly pension could be worth more than $5,000. No wonder the ship is sinking.

    The system also features a lavish deferment option that lets employees collect pensions even as they continue to work and earn a salary. Moreover, the retirement money gets deposited into an account that earns guaranteed interest. Governments originally began creating these so-called DROP plans as an incentive to encourage experienced employees to keep working past retirement age, which in job categories like public safety can be as young as 50. In Dallas, the pension system gives workers in the DROP plan an 8 percent interest rate on their cash, at a time when yields on ten-year U.S. Treasury notes, a standard for guaranteed returns, are stuck at less than 2 percent. According to the city, some 500 employees working past retirement age have accumulated more than $1 million in these accounts—on top of the pensions that they will receive once they officially stop working.

  • The Dallas Morning News says that there’s plenty of blame to go around:

    Over the years, the Dallas Police and Fire Pension System fund has amassed $2 billion to $5 billion in unfunded liabilities, the result of bad real estate investments and blatant self-enrichment from prior management. Coupled with a possible setback in ongoing litigation over public safety salaries, Dallas is in the most financially precarious position in its history.

    City officials are openly uttering the word bankruptcy, not just of the pension fund but the city itself. As Mayor Mike Rawlings told the Texas Pension Review Board this month, “the city is potentially walking into the fan blades that might look like bankruptcy.”

    The state Legislature created this mess by not giving the city a meaningful voice in the fund’s operation and allowing the former board of the pension fund to unilaterally sweeten its membership’s promised benefits without concern to the overall fiscal damage being done. Now it must help the city clean up the mess.

    Dallas already provides nearly 60 percent of its budget to support public safety services and recently contributed $4.6 million to increase its share of pension contributions to 28.5 percent — the maximum allowed under state statute. However, if Dallas loses the lawsuit over salaries and no changes are made to the pension fund, the city could take an $8 billion hit. That is roughly equal to eight years of the city’s general fund budget.

  • That said, the bond market doesn’t seem to think Dallas is near bankruptcy.
  • And it’s not just Dallas:

    Austin, Dallas, Houston and San Antonio collectively face $22.6 billion worth of pension fund shortfalls, according to a new report from credit rating and financial analysis firm Moody’s. That company analyzed the nation’s most debt-burdened local governments and ranked them based on how big the looming pension shortfalls are compared to the annual revenues on which each entity operates.

    “Rapid growth in unfunded pension liabilities over the past 10 years has transformed local governments’ balance sheet burdens to historically high levels,” the report says.

    Chicago had the most dire ratio on the national list. Dallas came in second. According to the report, the North Texas city has unfunded pension liabilities totaling $7.6 billion. That’s more than five times the size of the city’s 2015 operating revenues.

    Both those cities may turn to the public to partially shore up their shortfalls. Houston Mayor Sylvester Turner wants to use $1 billion in bonds to infuse that city’s funds. Dallas police officer and firefighter pension officials also want $1 billion from City Hall, an amount officials there say is too high.

    Meanwhile, Austin ranked 14th on the Moody’s list with unfunded pension liabilities of $2.7 billion. San Antonio ranked 22nd with a $2.3 billion shortfall.

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    Posted in Austin, Budget, Texas, Waste and Fraud | 11 Comments »

    Puerto Rico Defaults

    Tuesday, August 4th, 2015

    While not unexpected, this certainly isn’t good news for the global economy. “The commonwealth paid a mere $628,000 toward a $58 million debt bill due Monday to creditors of its Public Finance Corporation. This will hurt the island’s residents, not Wall Street. The debt is mostly owned by ordinary Puerto Ricans through credit unions.” That’s like Johnny Boy paying $10 on his $2,000 debt in Mean Streets.

    It doesn’t help that Puerto Rico has the U.S. minimum wage and relatively generous welfare benefits. “Less than half of working age males are employed, [and] 35 percent of the island’s residents are on food stamps.”

    There are plenty of free market solutions to Puerto Rico’s problems, but those are precisely the ones the Obama Administration won’t let be enacted…

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    Posted in Budget, Welfare State | No Comments »

    Not Just Greece

    Wednesday, July 22nd, 2015

    Via ZeroHedge comes renewed information of a point I’ve hit home again and again: Thogh Greece is an extreme outlier on unsustainable welfare state spending in Europe, it’s also the canary in the coal mine, as toxic debt continues to rise all across Europe, with several countries exceeding a debt-to-GDP ratios of over 100%, including “Greece (168.8%), Italy (135.1%) and Portugal (129.6%).” Post-bailout (and bail-in) Cyprus is still over 100% as well, as is Ireland, though Eurostat didn’t have Irish DGP numbers, though supposedly the ratio should be trending down. And Spain and France are hovering just under 100%.

    To my mind the great mystery is how Belgium’s debt-to-GDP ratio now tops 111% with such a fat cushion of Brussels Eurocrats to sit on.

    The problem is not Greece’s only. The problem is that the western liberal welfare state, as currently constituted, is economically and demographically unsustainable.

    I’m sure I’ve driven this point home to regular readers of this blog, but I’ll continue driving it home until our leadership class is actually willing to do something about it…

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    Posted in Welfare State | 1 Comment »

    Animation on the Greek Debt Crisis

    Sunday, June 21st, 2015

    Even though this whiteboard animation is from 2012, it’s still mostly accurate.

    My only quibbles would be:

  • It doesn’t mention how Greece lied about it’s finances to get into the Euro in the first place.
  • It doesn’t discuss what that debt was spent on, i.e., mainly an overly generous and unsustainable welfare state.
  • Because it was made in 2012, it overstates how exposed European banks will be to a Greek default. By now, banks and insiders have managed to offload the vast majority of their default exposure to Greek default onto the European taxpayer (which, of course, was the real primary purpose of the bailout).

    • But it gets the big picture right, namely how out-of-control debt destroys nations…

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    Posted in Budget, video | No Comments »

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