. . that if an asset is worthless (as in this case General Motors) it doesn’t matter who gets it (in this case either the labor unions who helped kill the company or the “foolish” bond holders who lent money to it).

I didn’t agree with this point-of-view, but I don’t think I made a sufficiently convincing argument against it. I believe I have found one.

In 2006 the World Bank set out to quantify of what consisted the Wealth of Nations. The reason for doing so was because natural resources were only a small percentage of it. (When an illegal immigrant crosses the border what makes him instantly more productive isn’t related to oil shale deposits in Colorado.).

So, they set out to figure out what it was.


They found three things accounted for the vast majority of the difference between a nation’s wealth and its natural resources:

1) Education
2) Rule of Law
3) Remittances

(In this I see a concise rebuttal to Jared Diamond’s mistaken apologia, “Guns, Germs, and Steel.”

The relationship between the World Bank study and the seizure of GM, as well as the Obama administration, in general, is that it is eroding the confidence in the Rule of Law.

  • Don’t like GM’s CEO? Fire him without any real Constitution authority to do so.
  • Don’t like what BP has done? Extort $20 billion from them again with no authority to do so.
  • Don’t think you can get Cap and Trade done? Order it by Executive fiat with dubious constitutional authority.
  • Don’t like CEO compensation? Declare you have the authority to set it appropriately through a Compensation Czar.
In fact, set up all sorts of Czars (not a very Democratic term) for all sorts of things.
Want to invest the Executive branch with the power to ration health care? Appoint a guy with those beliefs to head the Health Commission through a recess appointment avoiding any sort of debate on the subject.

These actions are far beyond the normal give and take of Constitutional boundaries among the three branches of government.

The Obama administration is conferring vast powers to the Executive Branch of the government; some just by declaring them so, but the vast majority through Congressional bills that invest the Executive branch with the authority to write the rules within consciously vague guidelines. (This amounts to Congress outsourcing its job to the Executive Branch, which should be judged in itself to be outside the boundaries established by the Constitution). The vested powers are so vast and so complicated that the sheer amount of them will be difficult to be litigated, which is probably the idea.

In such an environment the confidence of rule of law is shaken because what the private sector used to count on is now in play. So, the Wealth of the Nation diminishes, the recovery fizzles, and everyone’s prospects, except those with the power to regulate, darken.

I just saw the end of the remake of the “Day the Earth Stood Still.” I find the film distasteful because it was so clearly a propaganda piece for Obama’s run for the Presidency (The word “change” is used so often in one scene you’d think the actor’s mouths would have gotten stuck on it.)

In the film, John Cleese plays a scientist who observes that societies inevitably get to a precipice that force them to confront reality in a way that could lead toward a better future. Of course, the film’s idea of that better future is environmentalism and socialism.

We disagree there, but I do believe we are at such a precipice, and I haven’t given up hope.




. . . to the finding that nearly 60% of Americans lack faith in him


will be to believe the American people have failed him. He won’t say it, but that’s what he’ll believe.


Bro Shake

July 13, 2010

A note to a friend:

I don’t think I gave you an adequate answer as to why many (including myself) make such a big deal about these little snippets (the bro-shake with Chavez). It comes down to this.

When you don’t sufficiently trust a person says what he’s thinking, one is left to divine intent through actions, no matter how seemingly insignificant. Even, in retrospect I think the bro shake was more indicative of the future course of Obama’s foreign policy than were his policy pronouncements (at that time).

So, I stand by the technique.

Toy Story 3

July 12, 2010

Okay, I just saw Toy Story 3 with my son. It was his first movie theater experience, and it went well.

So, why am I writing? To express my admiration for the writing team. This series never jumped the shark even though it had all the potential to let that happen after the first one.

At the climax of the first film the toys revealed themselves as animate objects to the villain, scaring him straight. Lazy screenwriters would have just ended the sequels in the same manner. This would have made the movies predictable and unsatisfying.

Instead the toys did not reveal themselves as animate objects after the first installment. I suspect the writers realized how this would have ruined the sequels and held back. They went up the ramp at the end of the first movie, then turned back brilliantly.

You know I have to say something political. And I’m not making this up. Just before the credits hit, I realized that the movie was so good I had forgotten Obama was President during most of it.

That was pure bliss.



I think I can safely say you heard it here first.



Sometimes it looks like he’s not even pretending to be serious about his job.


Is it 1938?

July 6, 2010

Fareed Zakaria wrote a column today regarding a subject we dealt with last month. That is, can the tone the President sets have a chilling impact on the economy.

Zakaria and a bunch of CEO’s, the majority of whom unfathomably voted for Obama, say yes.


So, do I.

Obama’s response will probably be to urge a law to get the corporations to spend the $1.8 trillion.


. . .but it makes me admire Churchill all the more.


Allies one month; Enemies in two more. Allies again a few years later.

We all think war is so personal these days, as if one attack is going to change opinions forever.