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  • What We Owe the Chinese: A Debt to Equity Conversion?

    The Chinese are worried about the status of the enormous sum the U.S. owes them:

    China’s premier expressed concern Friday about its massive holdings of Treasuries and other U.S. debt, appealing to Washington to safeguard their value, and said Beijing is ready to expand its stimulus if the economy worsens.

    Premier Wen Jiabao noted that Beijing is the biggest foreign creditor to the United States and called on Washington to see that its response to the global slowdown does not damage the value of Chinese holdings.

    “We have made a huge amount of loans to the United States. Of course we are concerned about the safety of our assets. To be honest, I’m a little bit worried,” Wen said at a news conference following the closing of China’s annual legislative session. “I would like to call on the United States to honor its words, stay a credible nation and ensure the safety of Chinese assets.”

    The Chinese have good reason to worry, especially if (or perhaps when) the stimulus turns inflationary and their interest rates’ real return goes negative (as it did for everyone in the 1970’s.)  A simple solution would be a broad based “debt to equity conversion,” where the Chinese took equity interests in corporations, property, etc.  But there would be extensive bawling and squalling about this, as there was when CNOOC tried to buy Chevron.  It would shift control of our economy from Washington to Beijing (looks like that has already shifted from New York to Washington.)

    Given the way our masters in Washington are moving with no regard for basic economics, that might not be the worst thing that could happen…

  • So Where Should the Centre of Christianity Be? In the United States?

    “Well, for openers…where will Christianity be centred?  In the U.S.A.?  Just think!–by the way, you can read this in Position Paper 6–under the title of ‘The USA religiously considered and the American way of life,‘ as they call it.”  He gives a summary of the Paper.  The United States as a socio-political entity was set up more or less as a vast grille or iron network of laws, rights, obligations, checks, and balances.  Anything that did not dissolve and melt into or could not be soldered onto that grille was doomed from the beginning of the American experience to fall through the holes into the kitchen midden of history.

    “Position Paper 6 states that with the passage of American history, formal religion, then any kind of religious morality, has shown that it can not be melted into the grille or soldered onto it.  And so, one by one, any moral or religious principles in the public life of the nation had to drop out of sight and mind into nothingness of that rubbish heap of past things, until all that remains today is a practically unworkable system of legal methods, laws, and constitutional balances, imposed on 220 million people, most of whom are still believers in some religious morality.

    “So the whole thing must come apart at the seams finally.  Or rather that grille will be come too oppressive for the mass of the people.  They will revolt and not know where to turn without destroying that grille–the American system and way of life…”

    Malachi Martin, The Final Conclave (p. 187)

  • Those Difficult Americans Strike Again

    We’re at loggerheads with the rest of the G20 over economic recovery:

    A simmering row about the whole point of the G20 meeting on April 2 burst into the open when Larry Summers, chief economic adviser to President Obama, called on other countries to follow America’s lead in pumping even more money into stimulus plans to revive the world economic system.

    The United States’ stimulus package of $787 billion is equivalent to about 5.5 per cent of its annual economic output, although it is spread over three years, whereas the EU has struggled to reach agreements on a sum that barely reaches 1.5 per cent of its total GDP.

    Mr Summers’ plea was attacked by Jean-Claude Juncker, the Luxembourg Prime Minister, who heads the eurogroup of single currency countries. He declared: “The 16 euro-area ministers agreed that recent American appeals insisting that the Europeans make an additional budgetary effort to combat the effects of the crisis was not to our liking.”

    Mr Juncker suggested that the eurozone countries would rather adopt a wait-and-see approach than rush to incur even more debt.

    In bucking this, the Obama Administration is violating an important Elitist Snob Rule: the Europeans are always smarter than we are.

    That put aside, Mr. Juncker is right.  The stiumulus we’re throwing at this problem, helpful or hurtful, is dwarfed by the value of the “toxic” assets.  Throwing in the additional money is dicey at this stage, especially since we don’t know if Round One will help or not.

    What Obama and his people are being caught up in is emotionalism, an all too common fault of American life and politics.  It got us into trouble during the Cold War.  It’s ironic that people who think of themselves as so logical, educated, intelligent, etc., are allowing themselves to be swept into this mentality.

  • Regulating How Churches Govern Themselves

    The Connecticut legislature, for the moment at least, throws in the towel on trying to restructure Roman Catholicism:

    State legislators have tabled for the rest of the session a controversial bill that would have mandated changes in the corporate structure of parishes and institutions affiliated with the Catholic Church…

    The proposed bill raised by the Judiciary Committee would have required Catholic parishes and other organizations to restructure much of the existing corporate management structure, replacing a system dominated by clergy and church hierarchical officials with boards of directors made up of lay members of their respective congregations. The changes, sought by members of several state parishes that have been rocked by financial scandal in recent years, would have shifted responsibility for financial and administrative management to the boards of directors and away from parish and diocesan officials, who they charge have been inattentive to their calls for reform.

    Such a restructuring, if it passed constitutional muster (and that’s as dependent upon the idea of the judge as much as anything else,) could be applied to any centrally governed church, such as the Episcopal Church or–note this, Pentecostal friends–the Church of God.

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  • The War on Plastic Retail Bags is Stupid

    Even if Apple is waging it:

    AppleInsider’s Prince McLean reported Saturday that Apple’s retail stores are implementing a new “no plastic bags” policy in order to cut back on unnecessary packaging.

    According to the report, customers making more than a comfortable handful of purchases in the store will be offered assistance to their car or the option of leaving their items at the store while they continue shopping, if the Apple Store located in a mall.

    This new policy is another element of Apple’s efforts to enhance its green profile, other recent measures having been reducing the size of its product packaging and emphasizing electronic distribution of music and software.

    But the whole “war” on plastic retail bags is completely idiotic:

    However, I’m not convinced that eliminating plastic bags from retail is really a worthwhile strategy. As with another purportedly “green” solution – biofuels – which can actually result in more carbon release and environmental damage than their equivalent in petroleum fuels would, and production of which is driving food costs into the stratosphere, literally starving people to death in poorer countries, moves to ban or tax complementary disposable shopping bags are largely feel-good gestures that may do more harm than good.

    Disposable plastic retail bags are arguably one of the greatest innovations of the last 50 years.

    Although the article goes on to explain the advantages of these things, to cut to the chase plastic retail bags are a) reusable and b) (generally) recyclable.  As I write this these bags are holding my own curbside recycling items, on the curb, ready to be picked up.  They can put them into their recycling stream.

    This is yet another example of environmentalism forcing a solution that, in reality, doesn’t help the environment.  Or us.

  • Liberal Charities: Avoiding Being Victims of Obama’s Taxes

    They’re screaming bloody murder these days:

    Among those shocked by President Obama’s 2010 budget, the most surprising are the true-blue liberals who run most of America’s nonprofits, universities and charities. How dare he limit tax deductions for charitable giving! They’re afraid they’ll get fewer donations, but they should be more concerned that Mr. Obama’s policies will shove them aside in favor of the New Charity State.

    What did these nonprofit liberals expect, anyway? Mr. Obama is proposing a vast expansion of the entitlement state, and he has to find some way to pay for it. So logically enough, one of his ideas for funding public welfare is to reduce the tax benefit for private charity. His budget proposes to raise the top personal income tax rate to 39.6% in 2011 from 35%, and the 33% rate to 36% while reducing the tax benefit from itemized deductions for the top two brackets to 28% from 35% and 33%, respectively. The White House estimates the deduction reduction will yield $318 billion in revenue over 10 years.

    This is a subject that has interested me for many years, but I haven’t said much about it.  But it’s now or never.

    In Marxist states, it was routine to outlaw private charities (although it’s noteworthy that the People’s Republic of China does have them.)  That’s because part of the theory of Marxism is that, when history reaches its conclusion and the dictatorship of the proletariat be established, there won’t be any further need for private charity.  (I discuss the impact of that relative to a Marxist state in Losing the Church Property, or Why the Romanians Don’t Tithe.)  As the WSJ article goes on to point out, European welfare states have for the most part achieved that goal that Marxism aimed for (European nations getting to the welfare state without Marxism was one of Marx’s greatest fears.)  There is relatively little charity in Europe; the government is expected to take care of such things.

    That being the case–and it also being the case that most liberals these days are committed statists–it would make sense that a liberal administration would want to both raise money and squeeze private charity out by phasing out the deductibility of charitable donations.  Moreover, on the face of it it would be a good way to defund churches, especially Evangelical ones, and that’s always a plus for the liberal agenda.

    But life is complicated.  It’s possible for liberal charities to shift their funding source to the government; same government funds them to some extent already. But even liberal charities like the freedom that comes from raising your own money, and that’s why they are lining up to oppose the reduction in the deductibility of donations for the higher income brackets.  (That’s especially important for liberal charities as they draw their funding more from upper income people.)

    As the article states, liberal charities will show that they have a great deal of clout on this issue.  The Obama administration had better prepare for this, an assault from a normally sympathetic group.  It’s ironic that, in doing so, liberal charities will be in common cause with their conservative counterparts, but I’ve always felt that, if the deduction for charitable donations were eliminated altogether, the liberal charities would be hit the hardest.  Evidently they think so too.

  • Go Ahead. Stuff the Money in the Mattress. Just Like the French Do.

    I think our President is reading my blog:

    In a 35-minute conversation with The New York Times aboard Air Force One on Friday, Mr. Obama reviewed the challenges to his young administration. The president said he could not assure Americans the economy would begin growing again this year. But he pledged that he would “get all the pillars in place for recovery this year” and urged Americans not to “stuff money in their mattresses.”

    This popped up here last week:

    If this were France, we’ve have a populace who would be busy stuffing gold in the mattress, evading taxes and figuring out ways of surviving under a government whose main interest is its own.

    Not a few on the conservative side have equated Barack Obama’s program with an attempt to make the U.S. like France.  He’s all but admitted same; the story of the French filling their mattresses with fungible assets (makes for a lumpy sleep, in the case of coin) is widespread.  But, if he’s going to to reorient the government the way he is, he’s got to expect people to react like those who have lived under this for centuries.

    Ésprit de corps?

  • The Provincial Hillary Clinton

    There’s no other explanation for it:

    Hillary Clinton raised eyebrows on her first visit to Europe as secretary of state when she mispronounced her EU counterparts’ names and claimed U.S. democracy was older than Europe’s…

    A veteran politician, Clinton compared the complex European political environment to that of the two-party U.S. system, before adding:

    “I have never understood multiparty democracy.

    “It is hard enough with two parties to come to any resolution, and I say this very respectfully, because I feel the same way about our own democracy, which has been around a lot longer than European democracy.”

    This country is not the world’s oldest democracy, nor its most democratic, and certainly not first in economic freedom any more.  And we’d be better off with a multi-party system; there’s simply no way that a two-party system can properly represent the kalidescope of political views we have in a country as large as ours.  (I think Hillary’s and Barack Obama’s objective is to turn us into a one-party state, but I digress…maybe that’s why she doesn’t understand multi-party democracy, they can’t handle two.)

    It’s depressing to live in a country where its self-proclaimed Ivy-League educated élites, who crow incessantly about how much more sophisticated they are, how much more they know, how much better they speak the language, etc., go overseas and make us look even more stupid in this fashion.

    And she topped it off with messing up the Russians’ “easy button…” Not only did they screw up the Russian word, they couldn’t even put it into the Cyrillic alphabet.

  • Is Barack Obama William Beveridge Reincarnated?

    One of those things that you run into in religious dialogue is the subject of reincarnation or, to use the fancy term, transmigration of souls.  There were even those who thought that that John the Baptist was Elijah reincarnated:

    “When the Jews sent some Priests and Levites to John from Jerusalem, to ask–“Who are you?”, his statement was this: He confessed and did not deny it, he confessed–“I am not the Christ.” “What then?” they asked. “Are you Elijah?” “No,” he said, “I am not.” “Are you ‘the Prophet’?” He answered, “No.” “Who then are you?” they continued; “tell us, that we may have some answer to give to those who have sent us. What do you say about yourself?” “I,” he answered, “am–‘The voice of one crying aloud in the Wilderness–“straighten the way of the Lord”’, as the Prophet Isaiah said.”” John 1:19-23, TCNT.

    John the Baptist was not Elijah incarnated; he was however moved by the same Spirit and had the same idea.  We’re seeing this play out at another level, this one political.

    For those of us who are familiar with British history, we’re getting a bad case of “déja vu all over again.”  I’ve discussed the similarities between the auto bailout and British Leyland (it will be interesting to see if the Obama Administration heads off a GM Chapter 11.)  But the sweeping changes in the social contract afoot in this country remind one of those which took place at the end of World War II in the UK.  Most people associate those with the Labour government of Clement Atlee, but before Atlee there was William Beveridge and his report.

    Beveridge was a British economist who headed up a commission to chart the course of British social services after World War II.  His core thesis was to attack what he called the five “Great Evils:”

    1. Want
    2. Disease
    3. Ignorance
    4. Squalor
    5. Idleness

    His idea was that, not only would we have a “better” society by establishing an extensive social safety net, but also a more productive one.  His ideas were sweeping, but his report included a statement that could have come from David Axelrod (yes, we know who wrote Obama’s best speeches):

    …(a) revolutionary moment in the world’s history is a time for revolutions, not for patching.

    And this gem also sounds like another of Obama’s pronouncements, although we would say it today in a more gender-inclusive format:

    …(the state) should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”

    Sure enough, Atlee’s government enacted most of his report’s recommendations.  And, sure enough, Britain went into an extended post-war decline, experiencing stagnation until the government of “Sunny Jim” Callaghan was replaced by that of Margaret Thatcher.  (Her coming to 10 Downing Street also took the need for gender-inclusive language to a new level!)

    The core problem is that elitist snobs always underestimate the desire of people to go on the dole when the opportunity presents itself, either full-time or (if they join up with the right trade union) at the workplace.  The snobs on this side of the Atlantic are about to get a rude awakening in that regard but, as Virgil used to say, the descent to Avernus is easy.

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  • Americans Gripe About Bailing Out Mortgage Holders, But Europeans Gripe About…

    …bailing out countries:

    TUMBLING exchange rates, gaping current-account deficits, fearsome foreign-currency borrowings and nasty recessions: these sound like the ingredients of a distant third-world-debt crisis from the 1980s and 1990s. Yet in Europe the mess has been cooked up closer to home, in east European countries, many of them now members of the European Union. One consequence is that older EU countries will find themselves footing the bill for clearing it up.

    Many west Europeans, faced with severe recession at home, will see this as outrageously unfair. The east Europeans have been on a binge fuelled by foreign investment, the desire for western living standards and the hope that most would soon be able to adopt Europe’s single currency, the euro. Critics argue, with some justice, that some east European countries were ill-prepared for EU membership; that they have botched or sidestepped reforms; and that they have wasted their borrowed billions on construction and consumption booms. Surely they should pay the price for their own folly?

    Yet if a country such as Hungary or one of the Baltic three went under, west Europeans would be among the first to suffer (see article). Banks from Austria, Italy and Sweden, which have invested and lent heavily in eastern Europe, would see catastrophic losses if the value of their assets shrivelled. The strain of default, combined with atavistic protectionist instincts coming to the fore all over Europe, could easily unravel the EU’s proudest achievement, its single market.

    It’s hard to take to award the irresponsible, but that’s what’s happening on both sides of the Atlantic.

    American elites traditionally consider Europeans (especially Brits) as their “betters,” but it doesn’t look like this opinion corrresponds to reality.  This came out in an article from San Francisco Chronicle writer Debra Saunders entitled Bad Times Visit Our Betters in Europe.  But, since we’ve elected the Elitist Snob to the White House and he has brought his ilk with him, we’ll never be able to prove them wrong.  At least in the immediate future.

    Note to Debra Saunders: if you want to find your “betters,” go to the Pacific Ocean and look outward.  They’re in that direction.

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