Sleepless in Midland

Obama's Truth Teams

1984 is coming. There's an anachronism if there ever was one. It was on a bumper sticker seen long ago warning of a coming to life of George Orwell's "1984," a futuristic story of repression and the propaganda used to manipulate people into submission.

All of this comes to mind as we learn from Bluegrasspundit.com of President Obama's campaign to use websites to manipulate the facts. News.yahoo Tells us all about it.

Let's take one of those website, KeepingHisWord.com. The goal is a laughable attempt to convince his followers that he kept his 2008 promises. Here's a sampling:

Reducing our dependence on foreign oil

“This time we cannot fail.”
—President-elect Barack Obama commits to reducing our dependence on foreign oil, December 16th, 2008.
New research published this week by Bloomberg reports that “the U.S. is the closest it has been in almost 20 years to achieving energy self-sufficiency.”.

That, we are to believe, is Mr. Obama keeping his word. The truth is that any progress toward energy self-sufficiency was made in spite of, not because of, Mr. Obama. Any increases in production came about because of the oil boom in North Dakota, something which Mr. Obama had nothing to do with.

In fact, most of his efforts have been directed at decreasing production. You'll recall that he halted drilling in the Gulf after the BP blowout. That certainly did not help achieve energy self-sufficiency. And closer to home, the Obama administration is trying to use a lizard to handicap oil and gas producers in Texas and New Mexico.

Let's not forget that he vetoed the Keystone XL pipeline which would have brought Canadian oil to Gulf Coast refineries. True, that oil would be imported, but Mr. Obama's veto does nothing to reduce our dependence on foreign oil. And surely all but the most loyal Obama supporter would agree that it would be better to import oil from Canada than from the Middle East.

Let's ignore the newspeak and get right to the point. They're "half-truth teams."

Cheers for Sears

The good news for Sears is that it plans to close a bunch of unprofitable stores, and hopefully that action will help the bottom line enough to allow it to cut prices and compete with Best Buy, Walmart, and online competitors.

But what must really hurt is the highly public announcement that CIT Group Inc. would quit extending credit to Sear's vendors. See Sears Supplier Loans Are Said to Be Halted by CIT Starting Today. Therefore, Sears would have to pay those vendors up front for orders. That sounds bad, but the report says merchandise financed by CIT accounts for only 5% of Sears' inventory. So unless other creditors follow suit, it shouldn't hurt that much.

I've got a soft spot for Sears. I admit it. The stores have always been a reliable place to buy tools, car batteries, tires, and plenty of other stuff. At one time wrenches and other non-electric tools bought at Sears carried a lifetime warranty. But times change, and that was back in the day when a tool would last a lifetime.

Hang in there Sears. Your fans are rooting for you, even those of us who sought out the cheaper prices elsewhere. If the store closures can bring down those prices, then the game is still on.

Making it political

The Sears store closings will inevitably result in employee layoffs and put those people out there looking for new jobs. The political issue of the day is Mitt Romney's work for a restructuring company that took over failing businesses and -- gasp -- laid off employees. So basically Sears is doing on its own what countless other businesses have done. That's the way the market place works. And thankfully no one is asking for a Sears bailout or some other form of government intervention.

Also, there's this nagging question. Lefties have left no doubt how much they hate Walmart. So would they cheer if Walmart was hurting? What about if Walmart decided to close a bunch of stores, would lefties continue to cheer big employee lay off? Just wondering how that all works together.

The 99% consume what the 1% create

They make it look so easy, those dang one percenters that the occupiers are so obsessed with. It's tempting to suggest that the occupiers are really just resentful of the people who have the talent to see possibilities the occupiers can't see.

Jim Powell at Forbes explains it in The Genius of "One Percenters" Is Their Amazing Command of the Obvious. He summarizes a few successes and notes how the people who created popular products and successful businesses were observant enough to discover and then fill a need. Examples include:

Fred Smith who saw the need for overnight delivery and created Fed-Ex.
George de Mestral who took a close look at the burrs that stuck in his pants and invented Velcro.
Ray Kroc who saw the demand for fast food and created McDonalds.
George Crum, whose customers wanted fried potatoes that wouldn't go saggy, invented the potato chip.
Peter Dunn and Albert Wood were looking for drugs that might reduce blood pressure, and they came up with -- boing! -- Viagra.

Many of the examples Mr. Powell cites required a basic knowledge in some field to get to the point where they knew enough to conduct experiments in that field. And in some cases they came up with a product then had to figure out what it was good for. But they thought they could do it, and they did it. Anyone who thinks they can't do it probably can't.

Elizabeth Warren much like FDR's enablers

A couple of weeks ago we talked about Robert Higgs and the regular attacks against historians who come up with new theories that challenge the prevailing wisdom. (He had dared bring to light the theory that FDR had prolonged the Great Depression with misguided measures to "fix" the economy.)

If you haven't yet tired of hearing about Higgs, here he is again.

This time he talks about Elizabeth Warren. It was not too long ago that she expressed her exited contention that anyone who ever got rich did so only with government help because the government paid for the highways, the government paid to educate the workers, and so on.

Higgs almost comes to her defense, if by saying she wasn't as bad as some of her predecessors can be called a defense. We should feel lucky, he says, that the view of many Democrats of earlier times doesn't prevail today. That view was that the government owned everything, and any part of a person's earnings the government didn't take was a gift to the earner.

He cites a book titled FDR Goes to War by Burton and Anita Folsom which tells of the debates that eventually resulted in the law that established income tax withholding. A couple of notable quotes:

Rep. Emanuel Celler (D-N.Y.) -- The government always has a moral if not actual lien on all our income.

Sen. Happy Chandler (D-Ky.) -- ... the government can take everything we have if the government needs it.

Higgs says we are lucky we only have the likes of Elizabeth Warren to contend with. So are you feeling lucky?

Higgs' article: Government Officials Want You to Know that Your Earnings Belong to Them.

Classroom socialism experiment

I was talking to someone the other day who started complaining that the problems of the world could be blamed on capitalism. Um 'k. That's my exit cue.

But here's a cute story about how a professor tried a socialism experiment with the students in a class. Daniel Mitchell tells it. And it's one of those stories that is just too perfect to be true. But one of the secret rules of the bloggers' code is that it's OK to present an unbelievable story so long as there's a good lesson to be learned.

It goes like this. A professor at a local college proposed an experiment in a class of Obama fans whereby all test grades would be averaged and everyone would get the same grade. As they approached the first test some students studied and some coasted. As you can guess, the average test scores started falling as soon as those who studied got tired of carrying the ones who didn't.

There's a lesson the Wall Street occupiers could learn from this. There has to be an incentive to work. Take away the incentive, or make the worker share it with those who don't work, and the worker becomes a non-worker. Eventually there is nothing left to share.

Does Government Spending Stimulate Private Activity?

That's the title and subject of a research paper by Valerie A. Ramey -- Click for PDF -- in which she reports on the results of her study on the effect of government spending on private spending, unemployment, and employment. (Via Econtalk.org.)

It's a timely topic with President Obama having already spent billions of dollars in an attempt to stimulate the economy and apparently believing that the failure so far is due to not having spent enough. The President and his enablers will not be happy with Ms. Ramey's report.

Her conclusion:

For the most part, it appears that a rise in government spending does not stimulate private spending. Increases in government spending do reduce unemployment. For all but one specification, it appears that all of the employment increase is from an increase in government employment, not private employment.

Extrapolating a bit, if everyone works for the government then there would be no unemployment. Given the level of economic competence demonstrated so far by this administration, such a result might actually be in contemplation.