Hello Democratic Party, Welcome to 1991

It is rather amusing to see the Democrats realize what everyone else knew nearly two decades ago. From the WSJ:

It's going to be fascinating to see if Democrats and the press let the Clintons get away with this. Imagine if Mitt Romney had made the Jesse Jackson comparison. Democrats would have immediately denounced the remarks as "racist," or as a part of some Republican "Southern strategy."

This primary contest has been a rolling revelation for many Democrats and the media, as they've been shocked to see the Clinton brand of divisive politics played against one of their own. Liberal columnists who long idolized the Clintons are even writing more-in-sorrow-than-anger pieces asking how Bill and Hillary could descend to such deceptive tactics. Allow us to answer that lament this way: Our readers aren't surprised.

More Mortgage Crisis Fallout?

The issue of economics in on-line games is a rather interesting one. One economist even produced a paper on the economy of Everquest. I don't have the time to play anymore, but I have dabbled in some on-line role playing games, but I can't see how anyone would invest real money in virtual banks. A rather interesting article on this was in the Wall Street Journal this week.

In the real world, banks are reeling from the subprime-mortgage mess. In the online game Second Life, a shutdown of the make-believe banking system is causing real-life havoc for thousands of people.

At BCX Bank, a sign said it was "not currently accepting deposits or paying interest."Yesterday, the San Francisco company that runs the popular fantasy game pulled the plug on about a dozen pretend financial institutions that were funded with actual money from some of the 12 million registered users of Second Life. Linden Lab said the move was triggered by complaints that some of the virtual banks had reneged on promises to pay high returns on customer deposits.

Second Life is an elaborate online world where players create new identities for themselves -- images called avatars. These avatars can own land, run businesses and build homes. And there's a link to the real economy: To buy things, players use credit cards or eBay Inc.'s alternative payment service PayPal to convert actual U.S. currency into "Linden dollars," which can be deposited using pretend ATMs into Second Life's virtual banks.

The banks of Second Life were operated by other players, who enticed deposits by offering interest rates. While some banks paid interest as promised, others used depositors' money for unsuccessful Second Life land and gambling deals. Under its new banking rules, Second Life says only chartered banks will be allowed -- though it isn't clear any real chartered banks will operate in the virtual play world.

One Confused Congresswoman

A bit of humor for finance geeks, a rather confused congresswoman, Marcy Kaptur (D-OH) confuses Ben Barnanke with Hank Paulson. Well, they both are bald...

Stolen Valor

The NY Times tries to smear US soldiers by implying that they are murdering in large numbers, Ralph Peters rightfully rips them a new one.

THE New York Times is trashing our troops again. With no new "atrocities" to report from Iraq for many a month, the limping Gray Lady turned to the home front. Front and center, above the fold, on the front page of Sunday's Times, the week's feature story sought to convince Americans that combat experiences in Iraq and Afghanistan are turning troops into murderers when they come home.

Heart-wringing tales of madness and murder not only made the front page, but filled two entire centerfold pages and spilled onto a fourth. The Times did
get one basic fact right: Returning vets committed or are charged with 121 murders in the United States since our current wars began.

Had the Times' "journalists" and editors bothered to put those figures in context - which they carefully avoided doing - they would've found that the murder rate that leaves them so aghast means that our vets are five times less likely to commit a murder than their demographic peers.

McCain in Michigan

I have not been following the presidential campaing too closely, but especially on the Republican side it is getting interesting. I am rather amused how the media jumps from candidate to candidate declaring them the new frontrunner. Many have accused McCain of being some sort of media darling, with some legitimacy admittedly, but now Romney is in the limelight with much being made of him victory in Michigan. Hell, it is his homestate. The polls even show how much of a factor this was:

Forty-one percent of people who voted in the GOP primary said Romney's Michigan ties were important to them, according to exit polls.

Only 39% actually voted for Romney, so apparently even some of those who thought it was important still did not vote for him.

In the bad news column, Thompson and Giuliani came in at a scant 4 and % respectively, below even fringe candidate Ron Paul. Stick a fork in them.

Looking Quite Spry for a Dead Guy

Despite Christopher Story's insane rants that he had been assassinated, Hank Paulson still managed to give a rather pessimistic speech on the economy today.

Treasury Secretary Hank Paulson also predicted slower growth in a speech on Monday and said that there was no simple solution to the US housing market crisis.

The Bush administration is considering an economic stimulus package that could include tax cuts to prevent the economy from falling into a recession.

Mr Paulson said no decision had been made.

"The administration is focused on what steps might be taken to further strengthen the economy," Mr Paulson said.

Odds that the Leo Wanta nuts will realize how stupid they have been for the last couple of years, zero.

Mr. Krugman Meet Mr. Ricardo

I have mentioned before how Princeton economist Paul Krugman did some respectable work in international trade before he gave up economics entirely and became a pundit for the New York Times. His latest rants pretty much sum this up. I recently purchased the volumnious collection The Real Price of Everything: Rediscovering the Six Classics of Economics edited by Moneyball and Liar's Poker author (and London School of Economics graduate) Michael Lewis. Weighing in at nearly 1500 pages, I have not read it yet, in fact upon seeing it my wife looked at me and asked, "You don't seriously intend to read that, do you?"

In any case the collection of economic classics includes Principles of Political Economy and Taxation by David Ricardo, in which the concept of comparative advantage was first introduced. Apparently Mr. Krugman has forgotten this concept and thrown 200 years of economic thought out the window, because it makes it easier to bash Republicans.

But for American workers the story is much less positive. In fact, it’s hard to avoid the conclusion that growing U.S. trade with third world countries reduces the real wages of many and perhaps most workers in this country. And that reality makes the politics of trade very difficult.

What basic economic concepts will he throw out next? Supply and demand? GDP = C + I + G + (X-M) ?

Why I Hate John Edwards

Although I lean toward McCain, I haven't decided who to support in the presidential race. One thing is clear though, I can't stand John Edwards. His editorial in this morning's Wall Street Journal on "reining in corporations" only reinforces this. He starts on CEO salaries:

In 1960, the average CEO made 41 times what the average worker made. But in 2005, the average CEO made over 400 times the average worker's salary. The share of corporate profits going to CEO pay has doubled since the 1990s. Meanwhile, the value of the minimum wage has plummeted 30% since 1979.

Oh, this is really rich coming from a trial lawyer who is worth more than $50 million from suing doctors for bogus reasons. This is even more hypocritical when you consider that Edwards recently made a base salary of $480,000 in one year for a part-time gig as a consultant for a hedge fund based in the Cayman Islands, more than many CEOs make for a full-time job. Do as I say, not as I do.

Edwards continues later:

As president, I will create a new universal retirement account requiring every business to automatically enroll its workers in at least one plan: a traditional pension, a 401(k) or an IRA. Workers will be able to choose to have their contributions deducted automatically from their paychecks, and they will be able to carry these accounts with them from job to job.

Hello, there already is a universal retirement account that workers can take from job to job, you even mention in this paragraph, it is called a 401(k). The only thing you have changed is making it mandatory for workers to enroll, something many companies do anyway. Leave it up to someone like Edwards to think that it is governments role to micromanage how companies compensate their employees, while he is resting in luxury in his 30,000 square foot mansion in North Carolina

Christopher Story's Violent Fantasies

OK, making up myths about missing trillions is one thing, but fantasizing that they have been shot is just creepy. How long before this idiot goes John Hinckley on us?

U.S. TREASURY SECRETARY PAULSON SHOT IN THE CHEST AT CLOSE RANGE

On or around Friday 28th December 2007, Henry M. Paulson Jr., Secretary of the US Treasury, was shot at close range in the chest. He was reported to be in a critical condition on New Year’s Eve, and was thought unlikely to make it overnight. At about 7.00pm UK time on 1st January 2008, Henry Paulson was still alive, with the bullet lodged in his chest. Sources stated that he was too weak to be operated upon, which implied that he was thought unlikely to survive.

The US Treasury Department’s Public Engagements Schedule, published on the official Treasury website by the Press Department, stated: ‘No events Currently Scheduled from December 22 – January 4’.

CLOSE AIDE OF VICE PRESIDENT CHENEY SHOT DEAD POINT BLANK

On Saturday 29th December 2007, a close aide of Vice President Richard Cheney, in his mid-40s, was shot at close range in the chest, and died.

ACTUAL NUMBER OF U.S. HIT LIST TARGETS IS KNOWN

A list of 127 senior people in the United States alone who have been targeted for assassination, is reported by reliable sources to exist.

Update: Paulson must be made of sturdy stuff indeed, because he is already scheduled to be back on the lecture circuit:

Treasury Secretary Paulson to Deliver Speech on Capital Markets and Economy
Washington, DC -- Treasury Secretary Henry M. Paulson, Jr. will deliver a speech on Monday in New York City at an event hosted by the New York Society of Security Analysts. He will discuss the recent developments in the capital markets and their impact on the economy.
What: Speech on Capital Markets and the Economy
When: 2:00 p.m. (EST) Monday, January 7
Where: New York City - Location TBA
Note: Media interested in attending should RSVP to press@nyssa.org.