I needed a good laugh...

[link] Movie rental house Blockbuster has made an unsolicited takeover bid for struggling electronics retailer Circuit City, a move that aims to combine the stores of both companies into "a game-changing retail concept" akin to Apple Inc.'s widely successful international retail operation...

You can just smell the synergy crackling and smoking!

And to really make a man giggle...

...Blockbuster isn't the only technology player looking to replicate the success of Apple's retail business. Last week it was reported the Microsoft is also mulling the prospect of opening a self-branded chain of retail stores to promote its Windows franchise...

"Microsoft" What a concept!

Excellent...

I still have my disagreements with McCain, but this is VERY cool.

And you can bet that Mr elite-white-liberal-writer here has his own retirement bucks in a 401-K, or IRA....or wishes he did. But he hates the thought of the little people getting the same "risky" opportunity.

Oh how I wish I could be a sort of Robin Hood, and take the retirement $ of every one of these lefty frauds and "invest" them in Social Security. And see how they like the returns.

He's 'McSame' on Social Security, Too
By Joe Conason
The most puzzling aspect of John McCain's political persona is his habitual attraction to George W. Bush's bad ideas. Their shared enthusiasm for invading Iraq [and our side's winning--not yours!] and then escalating the war [of course al Qaeda never did any escalating...for leftists, only America is real, only american can "escalate".] is why "McSame" will soon become the new shorthand for the Arizona Republican, replacing "maverick" -- but that isn't the only reason. He doesn't just endorse the disastrous foreign policy initiatives; he loves the failed domestic policy schemes, too.

Specifically, McCain is a longtime supporter of President Bush's Social Security privatization initiative, last seen descending into oblivion only months after its introduction in 2005. He played a cameo role in the promotion of that notion (which never became an actual plan or bill in Congress) when the White House trotted him in for one of the President's staged public "conversations" on the subject. Back then his pleas for everyone to sit down and negotiate the surrender of Social Security to Wall Street were universally ignored, yet that scarcely seems to have discouraged him. [If Wall Street is so bad, I'm sure Mr C puts his own investments in the Cuban market.]

Actually, McCain supported Social Security privatization before it was uncool, when he first ran for president eight years ago. The Wall Street Journal reported recently that a proposal to divert a portion of payroll taxes to finance private accounts, like the Bush scheme, was "a centerpiece of a McCain presidential bid in 2000." Both he and Bush have wanted to dismantle [ie: Make it actually work] Social Security for many years, in fact, and he has indicated that will be an important goal for a McCain presidency....

Notice that, even if you read the whole piece, this lefty does not make a single factual or economic argument against SS reform. It's pure politics, winning or losing, for him. He does not dare argue his case on its merits, nor does he care what's actually the best policy.

And "McSame" won't fly. Not with McCain. Not after the lefty news-media have spent 8 years eagerly pointing out his differences with Bush.

Extraordinary delegation of authority....

Here's a cool piece on how WalMart (and other big-box retailers) performed prodigies of disaster-relief during Katrina...while Federal (and in Democrat areas, local) government did poorly. The secret was pushing authority into the hands of those on the scene.

President Bush missed a big fat opportunity, when things were being changed after 9/11, to strengthen local emergency-response agencies, instead of adding more federal bureaucracy.( I think he was rendered short-sighted from spending too much time in government, despite his successes in the private sector.)

Shortly before Hurricane Katrina made landfall on the U.S. Gulf Coast on the morning of Aug. 29, 2005, the chief executive officer of Wal-Mart, Lee Scott, gathered his subordinates and ordered a memorandum sent to every single regional and store manager in the imperiled area. His words were not especially exalted, but they ought to be mounted and framed on the wall of every chain retailer -- and remembered as American business's answer to the pre-battle oratory of George S. Patton or Henry V.

"A lot of you are going to have to make decisions above your level," was Scott's message to his people. "Make the best decision that you can with the information that's available to you at the time, and above all, do the right thing."

This extraordinary delegation of authority -- essentially promising unlimited support for the decision-making of employees who were earning, in many cases, less than $100,000 a year -- saved countless lives in the ensuing chaos. ...

[....]

...This benevolent improvisation contradicts everything we have been taught about Wal-Mart by labour unions and the "small-is-beautiful" left. We are told that the company thinks of its store management as a collection of cheap, brainwash-able replacement parts; that its homogenizing culture makes it incapable of serving local communities; that a sparrow cannot fall in Wal-Mart parking lot without orders from Arkansas; that the chain puts profits over people. The actual view of the company, verifiable from its disaster-response procedures, is that you can't make profits without people living in healthy communities. And it's not alone: As Horwitz points out, other big-box companies such as Home Depot and Lowe's set aside the short-term balance sheet when Katrina hit and acted to save homes and lives, handing out millions of dollars' worth of inventory for free.

No one who is familiar with economic thought since the Second World War will be surprised at this. Scholars such as F. A. von Hayek, James Buchanan and Gordon Tullock have taught us that it is really nothing more than a terminological error to label governments "public" and corporations "private" when it is the latter that often have the strongest incentives to respond to social needs. A company that alienates a community will soon be forced to retreat from it, but the government is always there. Companies must, to survive, create economic value one way or another; government employees can increase their budgets and their personal power by destroying or wasting wealth, and most may do little else. Companies have price signals to guide their productive efforts; governments obfuscate those signals.

Aside from the public vs. private issue, Horwitz suggests, decentralized disaster relief is likely to be more timely and appropriate than the centralized kind, which explains why the U.S. Coast Guard performed so much better during the disaster than FEMA. The Coast Guard, like all marine forces, necessarily leaves a great deal of authority in the hands of individual commanders, and like Wal-Mart, it benefited during and after the hurricane from having plenty of personnel who were familiar with the Gulf Coast geography and economy.

There is no substitute for local knowledge -- an ancient lesson of which Katrina merely provided the latest reminder....

Standing up to the hoodlums...

Heartening news in the WSJ about the biggest scam in the world, the asbestos litigation quagmire. A judge and a defendant are actually standing up to those vile thieves! Charlene was involved in the litigation when I first met her, so I've learned a lot about that criminal enterprise.

....A building materials company, W.R. Grace was among the firms swept up in a second round of asbestos litigation in the late 1990s. Having chewed their way through asbestos manufacturers, trial lawyers went after companies that had only a marginal asbestos link. By blanketing these firms with an avalanche of claims they recruited, the tort bar pushed at least 30 of these second-tier players into bankruptcy.

Most companies then followed the usual asbestos bankruptcy script. They cut a deal with the plaintiffs attorneys, handing over a big sum to pay current and future claims. Federal bankruptcy judges happily went along, because most view their jobs as getting companies out of bankruptcy quickly and few want the hassle of investigating tens of thousands of individual asbestos claims.

Enter W.R. Grace, and its lead attorney, David Bernick, a veteran of the tobacco and breast-implant wars. Mr. Bernick has taken the unheard-of position that federal rules of evidence apply even in bankruptcy court. He has argued that the only way Judge Judith Fitzgerald can make a legitimate ruling on Grace's liability is for her to decide first how many claims have scientific merit. This is revolutionary stuff.

To her credit, Judge Fitzgerald has allowed Grace to investigate those claims, and present her with its results. The stakes are enormous. At the end of this process, Judge Fitzgerald will make a finding on W.R. Grace's ultimate liability. The plaintiffs claim it is as much as $6 billion, a figure that would make Grace insolvent. The company claims the money necessary to cover legitimate claims is closer to $500 million, a number that would allow it to rejoin the land of the living...

Tax the rich!

Kruse Kronicle has a nice piece, based on Congressional Budget Office data, graphing how the Bush tax cuts resulted in the rich paying more taxes. And the poor paying less.

You probably already knew that, but he's got nice charts, and it is worth saving the link to use in arguments against Bolshies who claim that Bush "cut taxes on the rich."

....The 2005 total effective federal tax rate as a percentage of the 1979 rate:

• Top Quintile = 101.2%
• Fourth Quintile = 85.0%
• Middle Quintile = 76.8%
• Second Quintile = 60.1%
• Bottom Quintile = 14.3%

As I showed in a post last month, the top 1% of taxpayers pay 40% of federal income taxes. The top 25% of taxpayers pay 86% of income taxes.

Finally, keep in mind the New York Times article two weeks a ago that pointed out that while the bottom quintile has $9,974 in income per household a year it spends $18,153. That means non-cash assistance (as well draws on savings in the case of retired or unemployed payers) nearly doubles the actual income of the bottom quintile.

Rather than populist outcry over "tax cuts for the wealthy," maybe we need to look at the whole package of consequences that come from tax policy. Is the final objective really to have all taxes paid by the top 1% of society?

Recession...maybe not

At The Corner, Larry Kudlow has a long post on the economy...

A number of economists on and off Wall Street are ringing the recession bell, as they have so many times in recent years. But the Goldilocks economy has proven to be more durable and resilient than her critics appreciate.

Goldilocks dodged two potentially recessionary bullets this week. While modest gains in retail sales and industrial production suggest temporarily slower growth for the U.S. economy, these indicators are not signaling recession. In particular, Friday’s 0.1 percent production increase — which comes to 2.4 percent at an annual rate over the past 3 months and 2.3 percent over the past 12 months — removes the recession scenario. It’s slow growth, but it’s growth nonetheless.

To get a true recession reading, the production index would have to fall for 4 to 6 months in a row. That’s not happening. Despite some monthly declines over the past half year, the production reading for January was 114.2 — exactly where it was in July and September of last year. Looking inside the January index, there was a 0.3 percent increase for consumer-goods production and a 0.4 percent rise for business equipment. Both are solid numbers.

Meanwhile, the just-released January retail sales report defied the recessionistas with a better-than-expected 0.3 percent gain. Retail sales are climbing at a 2.7 percent annual rate over the past 3 months and a 3.9 percent rate over the past year.

Trade exports also continue strong, with the new December number showing a huge $144 billion gain. Out on the campaign trail, Hill-Bama mutters protectionism at every stop. But export trade has grown by nearly 50 percent — or 9 percent yearly after inflation — for the past four years. The real export sector now accounts for nearly one-third of U.S. gross domestic product, yet more proof that the global economic boom is alive and well.....

(There's more to read.) My guess is that this is about right. Just a guesstimate, of course. Just what my nose tells me. Plus the owner of the garage we use tells me that business is lousy for mechanics all over the area. So, if the economy was really bad, wouldn't people be repairing their old cars rather than buying new ones?

Competitive in the $50-a-barrel range...

Charlene recommends this piece on flex-fuels, by Bob Zubrin (thanks to Glenn)...

...In light of this, a top priority of U.S. national security policy should be to break the oil cartel. This imperative has been apparent since the 1973 oil embargo, but nothing effective has been done. However there is now a way to break OPEC.

What is needed is for the Congress to pass a law requiring that all new cars sold in the United States be flex-fueled - able to run on any combination of alcohol or gasoline fuel. Such cars are existing technology - in fact about 24 different models of flex-fuel cars were produced by the Detroit Big Three in 2007, and they only cost about $100 more than the same car in a gasoline-only version. But, since alcohol fuel pumps (such as E85, a fuel mix that is 85 percent ethanol, 15 percent gasoline) are nearly as rare as unicorns, flex-fuel cars only command about 3 percent of the new-car market.


The reason E85 pumps are so rare is that gas station owners don't want to dedicate one of their pumps to a kind of fuel that only a few percent of the cars can use. If we had a flex-fuel requirement, however, then within three years of enactment there would be 50 million cars on the road capable of running on high-alcohol fuels. Under those conditions, E85 and M50 (a 50 percent methanol, 50 percent gasoline fuel mix; flex-fuel cars can use any alcohol, including methanol) pumps would start appearing everywhere.

But most important, this would not just be happening here. By requiring that all new cars sold in the United States be flex-fueled, we would be forcing all the foreign car manufacturers to switch their lines to flex-fuel as well, effectively making flex-fuel the international standard. So there would be hundreds of millions of cars worldwide capable of running on alcohol, forcing gasoline to compete everywhere against alcohol fuels that can be produced from numerous sources. This would effectively break the vertical monopoly that the oil cartel currently holds on the world's fuel supply and keep prices in the $50-a-barrel range, because that is where alcohol fuels become competitive.....

I'm a bit doubtful, myself. There's no mention of how much energy, perhaps from petroleum, it will take to make the alcohol. And what this might do to food prices. What's the per-barrel price of alcohol now?

Is this the biggest flip-flop since the Hitler/Stalin Pact?

(Hey Democrats, if you didn't receive the new orders, get your tooth-fillings checked.)

From the Wall St Journal...

If our Washington, D.C., readers noticed a cortege of blue suits carrying a casket in front of the Brookings Institution last week, be not mournful. You were merely watching the leading economists of the Democratic Party burying the faith once known as Rubinomics. May it rest in peace.

Rubinomics is the concept of "deficit reduction" as growth policy: Lower the federal budget deficit and, as dawn follows night, interest rates will fall and prosperity will break upon the land. Named for former Treasury Secretary Robert Rubin, and much celebrated in the 1990s, the concept was embraced as gospel by nearly all Democrats as recently as a few weeks ago. But last week it officially expired, as those same Democrats reconverted to Keynesian deficit spending in the name of "economic stimulus."

Mr. Rubin's successor at Treasury, Larry Summers, started the bidding with a $65 billion tax rebate and spending plan. Hillary Clinton saw that and raised, and now wants $40 billion in tax rebates and $70 billion in new spending for unemployment insurance, housing assistance, home heating subsidies and green technologies. Barack Obama joined the fray Sunday, proposing a $75 billion "stimulus" that would have the government send millions of Americans a check for $250, plus another $250 in bonus Social Security payments.

But wait, what about those evil Bush deficits? Only weeks ago, Democrats claimed those were the road to perdition, even if the deficit had shrunk to 1.2% of GDP last year thanks to booming revenue growth. Remember the imperative of "pay as you go" budgeting? Ah, that was all before Iraq faded as a political winner and the economy became their favorite issue for regaining the White House. Now, all of a sudden, their motto is tax cut and spend...

The maddening thing is that you won't get the slightest bit of satisfaction from chiding Dems about their sudden change of policy. They won't even understand what you are saying. Once they pick up the new line, they will think that they've been in favor of tax cuts all along, against the resistance of those "greedy" budget-balancing Republicans.

People are still buying homes

Mike Plaiss e-mails...

John,

Thought you may enjoy these two graphs relating to the second of the “two good stories” you posted.

The first shows the Mortgage Bankers Association "Purchase Index" for the past 18 months. (MBA is the same group referenced in the article.) The second shows the same association's "Refinance Index". The source for all of the data is Bloomberg.

As you can see, people are still buying homes, and at a pace indistinguishable from the recent, pre-mortgage-crisis, past. In my mind the Refi index is just as interesting. The first thing one needs to get a refi done is a bank willing to do the refi. In other words, the bank is getting a second look at the collateral, and the creditworthiness of the borrower. If one is worried about the consumer, then the surge in refi activity is very good news. People pretty much refi for one reason only – to lower their monthly mortgage payment. A successful refinancing truly increases their wealth and helps maintain their buying power.

It should be noted that the index shows applications for a refi, not closed deals. But consumers are not stupid, and would likely not go through the trouble of completing an application unless they had good reason to think they would be successful.

Two positive stories...

(Thanks to Orrin)

Triumphs for Democracy, By MICHAEL BARONE

The world looks safer, friendlier, more hopeful than it did as we approached Christmastime last year.

Then, we were on the defensive, perhaps on the verge of defeat, in Iraq. The Europeans' attempts to persuade Iran to renounce nuclear weapons seemed to have failed. Hugo Chavez was using his near-dictatorial powers and the oil wealth of Venezuela to secure the election of opponents of the American "empire" in Latin America.

Today, things look different. And they suggest, to me at least, that the policies of the Bush administration, pilloried as bankrupt by the Democrats after their victory in congressional elections in November, have served American interests better than most Americans then thought....

and from Donald Lambro, in the Washington Times...

It will probably come as a shock to most people, even to those who follow the economy, that mortgage applications rose last month as a result of declining interest rates.

In the midst of the hysterical media-fed notion that a tidal wave of subprime-loan foreclosures was going to plunge the country into a recession, the fact is that the economy is still growing and Americans are still buying homes.

The torrid pace of recent years has slackened, but homes are being sold, banks are lending money and most Americans — even those saddled with subprime mortgages — are paying their mortgages on time.

Not everybody realizes this, however. The Washington Post, in a story about the administration's mortgage-relief plan, reported last week that, "Lending, which had boomed for years, ground to a halt." That has been the myth reported ad nauseam on the nightly network news shows, and apparently it has been accepted as a God-given fact....

I kind of imagine the people at the Washington Times just relishing any chance to poke a pin in the fraudulent pomposity of the Washington Post. Thank you!

Kindles at Fahrenheit 451

Here's a different view of the Kindle...

Kindle can light up your life November 29, 2007 BY ANDY IHNATKO

So here's what Amazon went and did. Metaphorically, the company invented a humanoid robot capable of autonomous action. Every day at 4 a.m., it gets in your car and drives all over the state, buying fruit, milk, butter, eggs and other staples straight from the farm. By the time you wake up and trudge into the kitchen, there's a steaming plate of waffles waiting for you, made from scratch, and topped with fresh-picked strawberries and whipped cream.

It's one of the most awesome consumer products ever. It might even be a landmark moment in technology. ... and Amazon is promoting it as a $399 waffle maker....

Sounds like it might be cooler than I imagined. Apparently the Kindle includes unlimited free web browsing over Verizon's EVDO network! (Odd. So what do the people who are paying Verizon for data access think about this?)

If, by the way you are thinking of buying one (Or anything else from amazon.com) do click one of my links, such as the link below...So Random Jottings will get a little baksheesh!

 

Good sense...

A friend sent the link to this NYT article by N. Gregory Mankiw , and remarked: "You might want to blog this if it doesn't pick up more circulation. I haven't seen anything yet. He refutes at least 50 Krugman columns on health care in about 5 or 6 hundred words."

STATEMENT 2 Some 47 million Americans do not have health insurance.

This number from the Census Bureau is often cited as evidence that the health system is failing for many American families. Yet by masking tremendous heterogeneity in personal circumstances, the figure exaggerates the magnitude of the problem.

To start with, the 47 million includes about 10 million residents who are not American citizens. Many are illegal immigrants. Even if we had national health insurance, they would probably not be covered.

The number also fails to take full account of Medicaid, the government's health program for the poor. For instance, it counts millions of the poor who are eligible for Medicaid but have not yet applied. These individuals, who are healthier, on average, than those who are enrolled, could always apply if they ever needed significant medical care. They are uninsured in name only.

The 47 million also includes many who could buy insurance but haven't. The Census Bureau reports that 18 million of the uninsured have annual household income of more than $50,000, which puts them in the top half of the income distribution. About a quarter of the uninsured have been offered employer-provided insurance but declined coverage.

Of course, millions of Americans have trouble getting health insurance. But they number far less than 47 million, and they make up only a few percent of the population of 300 million....

Mr Mankiw, I note, is a Romney advisor. I'd call that a good sign....

Unh huh, right, yeah....

Clinton to propose universal 401K plan - First Read - msnbc.com:

From NBC’s Athena Jones
Clinton will lay out a proposal to provide a universal 401K plan for everyone, at a speech today in Webster City, Iowa. Her staff is calling it the second-biggest policy rollout of the campaign in terms of cost and the number of people it would cover.

Under the plan, everyone would have access to a 401K and would be able to get matching funds from the government. It is part of Clinton's effort to increase retirement security by promoting savings and investment. Clinton's policy advisors will explain the plan in detail after the speech...

SO, the ordinary worker is going to put money in 401-K's. To his or her great advantage, obviously. How, may I ask, is this different from what Bush wanted to have them do with some of their Social Security money? Hmm? I'll just sit here and wait while all the 100%-fake liberals who bombarded me with 100%-fake outrage over how Bush was trying to "destroy Social Security" explain the discrepancy...

But this is a good chance to explain the difference between principled and unprincipled politics. Principled = If Hillary were elected president, and were to propose this, and if seemed like a good plan to me (I don't have any opinion yet) I would say that Republicans should support it. Or if she were to revive Bush's Social Security plan, and call it her own, I would be just as much a supporter of the plan as I was in 2005. (In the same way, Congressional Republicans supported Bill Clinton on NAFTA and Welfare Reform.)

Unprincipled = all those prosperous liberals who have their own retirement funds in IRA's or 401-K's, but who, out of pure partisan venom, did everything they could to block a Republican plan that would give that very same advantage to ordinary Americans. To the workers they claim—filthy liars that they are—to care about so much more than greedy capitalist Republicans.

"That's their money..."

RealClearPolitics - Articles - Control Your Own Health Care:

...Five years ago, the Whole Foods grocery chain switched to a high-deductible plan. If an employee has a sore throat or a sprained ankle, he pays. But if he gets cancer or heart disease, his insurance covers it.

Whole Foods puts around $1,500 a year into an account for each employee. It's not charity but part of the employee's compensation. It's money Whole Foods would have otherwise spent on more-expensive insurance. Here's the good part for employees: If they don't spend the money on medical care this year, they keep it, and the company adds more next year.

It's called a health savings account, or HSA.

CEO John Mackey told me that when he went to the new system, "Our costs went way down."

Yet today, some workers have $8,000 in their accounts.

"That's their money," Mackey said. "It builds up over time because the money is compounding for them."

It will cover all sorts of future out-of-pocket expenses.

Most important, since employees control the money, their behavior changed. Whole Foods workers started asking "how much things cost," Mackey said. "They may not want to go to the emergency room if they wake up with a hangnail in the middle of the night. They may schedule an appointment now."

There was no need to ask about costs before because the insurance company seemed to pick up the tab. But that drove up costs for everyone. Now, saving money makes sense to employees because the money belongs to them.

HSA critics ask whether individual accounts will encourage people to save money at the expense of their health.

Mackey has the right response. "The premise in those kinds of questions is that people are stupid. They're not smart enough to make these decisions for themselves. It's sort of an elitist attitude....

Some of my animus towards leftists is personal and practical. If, when I was young, I had been in the position of those Whole Foods workers, I would have built up by now a really big HSA. Because I don't think I ever once went to a doctor during my 20's and hardly ever during my 30's. So my contributions would have grown, tax-free, for decades!

But HSA's have been blocked by Democrats ever since they were proposed in, I think, the late 70's. They hate them because they allow individuals to make their own decisions, instead of bureaucrats both public and private.

SO, thank you, President Bush! All conservatives owe you many debts of gratitude for things like HSA's, though most of them won't admit it. It's too late for me to get the real benefits from my HSA, but the young workers of today will be much better off when they reach my age.

AND, I spit upon the "Democrat" Party with the utmost contempt. Your socialism is worthless and evil, and you cowardly dogs don't even have the guts to admit to it, or defend it in debate.

Actually it was bright all along...

BBC NEWS: US employment outlook brightens:

The US Labor Department said the economy added 110,000 new jobs in September, higher than the 100,000 figure predicted by economists.And rather than shedding 4,000 jobs in August as initially estimated, 89,000 new jobs were actually created...

It was just the statistics that lagged...

And haven't we heard this story a bunch of times over the last few years? And in the Reagan years? Republican President cuts taxes, bad economic stats are savored like fine wine by certain people, and then later the statistics are revised, with little fanfare? I forget the details, but there was some economist who predicted x amount of growth following Reagan's tax cuts. And he was just ridiculed. And the a couple of years later it turns out he was right on the money with his prediction, but somehow nobody noticed or nominated him for any prizes...(Thanks to Orrin)

Just some dry statistics....

Rich Lowry writes on how a strong global economy means there are a shrinking number of poor people in the world. Yes, yes, I know there are still a lot of them, and their plight can be be dire. But it isn't aid programs that are going to help them. Capitalism is the only answer. (Capitalism is not without a drawback or two, but it sure beats starvation!)

GLOBAL capitalism has long lacked for a ringing slogan like "workers of the world unite." It's never too late to find one, and a good candidate - with apologies to the international charity of the same name - might be "save the children."

The United Nations Children's Fund just announced that deaths of young children worldwide hit an all-time low, falling beneath 10 million annually. Better practices to protect against disease and to enhance nutrition - more vaccinations and mosquito nets, more breast-feeding and vitamin A drops - played a role, but the most important factor in this global good-news story is economic growth.

Tt is no coincidence that as UNICEF was reporting the drop in child mortality, the World Bank was reporting global poverty rates had fallen as part of an extraordinary worldwide economic boom. Treasury Secretary Henry Paulson calls it "far and away the strongest global economy I've seen in my business lifetime."

The global economy is growing at a 5 percent clip, higher than the 3 percent of the period from 1960 to 1980 and the 4.7 percent from 1960 to 1980. As U.S. News & World Report points out, "Gross global product is three times as big as it was in 1970 so the global economy is not only growing faster, but there's more to grow.

In a worldwide instance of trickle-down economics, the growth is diminishing the ranks of the poor. According to the World Bank, developing countries have averaged 3.9 percent growth since 2000, contributing "to rapidly falling poverty rates in all developing regions over the past few years." In 1990, 1.25 billion people lived on less than $1 a day. In 2004, less than a billion did, even though world population increased 20 percent in the interim...

Sea roads...

Lost at Sea - New York Times:

THE ultimate strategic effect of the Iraq war has been to hasten the arrival of the Asian Century.

Patrick Thomas
While the American government has been occupied in Mesopotamia, and our European allies continue to starve their defense programs, Asian militaries — in particular those of China, India, Japan and South Korea — have been quietly modernizing and in some cases enlarging. Asian dynamism is now military as well as economic.

The military trend that is hiding in plain sight is the loss of the Pacific Ocean as an American lake after 60 years of near-total dominance. A few years down the road, according to the security analysts at the private policy group Strategic Forecasting, Americans will not to the same extent be the prime deliverers of disaster relief in a place like the Indonesian archipelago, as we were in 2005. Our ships will share the waters (and the prestige) with new “big decks” from Australia, Japan and South Korea.

Then there is China, whose production and acquisition of submarines is now five times that of America’s. Many military analysts feel it is mounting a quantitative advantage in naval technology...

Yeah, well, the Soviets built a lot of ships and subs too, and how did that work? I'm not buying this stuff. I would change the headline to: The ultimate strategic effect of the Global War on Terror has been to hasten the arrival of the Axis of Good. I mean, how crazy is this? All the countries mentioned above except China are our friends and allies. Lefties have all been moaning about how Bush is a unilateralist cowboy, and yet here he is drawing Australia, India, Japan and South Korea into building up their navies and joining us in keeping the world free and the sea lanes open.....and are they happy? No, the NYT complains that we are no longer the only boat in the bathtub! Well, this isn't a problem.

The truth is brutally simple. To build big decks, you gotta have a LOT of shekels. To get them, you gotta swim to the top of the foaming torrent called globalization. To do that, you must become more like the United States of America. That's what globalization is. We are the pattern, we are the model, we are the best at it. There is no other way. Australia, India, Japan and South Korea are following that path, not that they have much choice.

And growth works in stages, and at any one of them countries can stall, unless they change. And the changes always consist of becoming more like nasty ol' USA. SO, the fact that China is growing fast right now does NOT mean that she has solved the problem of growth, or can continue being a commie country with partial economic freedom.

And anyway it does not matter how many subs China builds. They are useless, unless the Axis of Good loses its nerve. Why? Because China's wealth is totally dependent on trade, and we can stop her trade at will. She cannot go to war, because a handful of naval mines will close her ports.

Scam....

by Dean Takahashi
Mercury News [link]

I know that Shu Wong of San Jose hasn't received the $3.50 mail-in rebate for a Vastech computer networking USB hub purchased at a Fry's Electronics in May. Richard Louie of Austin, Olivia Sattaypiwat of Saratoga and Buu Duong of San Jose haven't received their rebates, either.

I know this because they told me so, and because I am staring at more than 1,300 rebate requests sent to Vastech on Bonaventura Drive in San Jose. The envelopes were tossed - unopened - into a garbage dumpster near Vastech. I have two boxes of envelopes that were thrown out without being processed. In all of my years of reporting, I have never encountered such outrageous behavior against consumers.

An employee of nearby Dominion Enterprises found the letters, along with hundreds of others addressed to Vastech, at his company's dumpster. He turned them over to his boss, Joel Schwartz, who gave them to me. All of the letters were addressed to UR-04 Rebate or some variation of the product name at the Vastech address...

(Thanks to Rand Simberg)

Of course the really big scam is that the manufacturers know that most rebates never get sent in at all. People process the low "after rebate" price, buy the product and think they got a good deal, and then lose the form or never find the time and energy to send it in.

decline and undecline...

I liked this piece, The Decline and Fall of Declinism... I've been hearing all my adult life about how America is soon to be outstripped by this or that more organized and efficient (ie: more socialist) alternative. Remember MITI? Remember—this will date me—"We will bury you"? Ha ha.

..Under the heading “The end of a U.S.-centric world?” the PostGlobal section of The Washington Post website recently declared that “U.S. influence is in steep decline.” It was just the latest verse in a growing chorus of declinist doom-saying at home and abroad.

In 2004, Pat Buchanan lamented “the decline and fall of the greatest industrial republic the world had ever seen.” In 2005, The Guardian’s Polly Toynbee concluded that Hurricane Katrina exposed “a hollow superpower.” In 2007, Pierre Hassner of the Paris-based National Foundation for Political Science declared, “It will not be the New American Century.”

And the dirge goes on....

...But the declinists were wrong yesterday. And if their record—and America’s—are any indication, they are just as wrong today.

Any discussion of U.S. power has to begin with its enormous economy. At $13.13 trillion, the U.S. economy represents 20 percent of global output. It’s growing faster than Britain’s, Australia’s, Germany’s, Japan’s, Canada’s, even faster than the vaunted European Union.

In fact, even when Europe cobbles together its 25 economies under the EU banner, it still falls short of U.S. GDP—and will fall further behind as the century wears on. Gerard Baker of the Times of London notes that the U.S. economy will be twice the size of Europe’s by 2021.

On the other side of the world, some see China’s booming economy as a threat to U.S. economic primacy. However, as Baker observes, the U.S. is adding “twice as much in absolute terms to global output” as China. The immense gap in per capita income—$44,244 in the U.S. versus $2,069 in China—adds further perspective to the picture....

All you have to realize about those China-is-the-next-superpower screeds is that these things are not linear. The techniques that will get you from per capita $500 to $2,000 are not the same as those needed to get from $10,000 to $20,000, etc. To keep growing a country must learn a new game at every stage, and each one is harder....and....less amenable to centralized control or stimulation.

There's another thing that we all should be aware of, and that leftists don't want to know about...

...While the declinists routinely remind us that the U.S. spends more on defense than the next 15 countries combined, they seldom note that the current defense budget accounts for barely four percent of GDP—a smaller percentage than the U.S. spent on defense at any time during the Cold War. In fact, defense outlays consumed as much as 10 percent of GDP in the 1950s, and 6 percent in the 1980s.

The diplomats who roam the corridors of the UN and the corporate chiefs who run the EU’s sprawling public-private conglomerates dare not say it aloud, but the American military does the dirty work to keep the global economy going—and growing. “The hidden hand of the market will never work without a hidden fist,” as Thomas Friedman observed in 1999...

Despite the crap you hear to the contrary, America provides by far the biggest and most important slice of the world's "foreign aid." Our 12 Carrier Strike Groups, and all the rest of our peerless military, are what make growth and prosperity possible for China and everybody else.

The world's economy runs on trade, to an extent far beyond that of any other time in history. In the past, foreign trade was, for most countries, just frosting on the cake. 5% or 10%. Not any more. If someone mined China's ports now, their whole economy would go "poof!" and vanish.

We donate the cost of world peace. And world peace is exactly what we have, by the standards of those past time when nations went to war with each other. That doesn't happen any more; the "wars" we have now are internal conflicts and genocides within failed states. And the involvement of the US and her Anglosphere allies is in the nature of cops breaking up gang wars. The "War on Terror" has claimed less than 4,000 American lives. [Insert boiler-plate statement yes-every-death-is-a-tragedy blah blah blah.] In a REAL WAR you can lose that many in a single DAY.

And when (rarely now) nations actually do threaten war, as India and Pakistan were doing a few years ago, we lean on them. In fact, we don't allow them to go to war. We are the grown-ups, they are the teen-agers, and we are teaching them how we expect them to behave.

Thank you, President Bush!

AP, WASHINGTON - The federal deficit this budget year is running sharply lower, driven by record revenues pouring into government coffers.

The Treasury Department reported yesterday that the government produced a deficit of $157.3 billion for the budget year that began Oct. 1. That's a substantial improvement from the red ink of $239.6 billion produced for the corresponding 10-month period last year.

The lower year-to-date deficit was the result of a record $2.12 trillion in revenues. Spending, however, was higher - $2.27 trillion, which also marked an all-time high.

The White House predicts that the deficit this year will drop to $205 billion.

But the nonpartisan Congressional Budget Office predicts that the government will produce even less red ink this year. It recently said the deficit will be "toward the lower end" of a range of $150 billion to $200 billion...

Who did this? The American people, who will always work wonders if only they are allowed to. And the big moment of the current chapter was in the year 2001, when George W Bush was first elected. A contested election, with Democrats controlling the Senate, with the economy heading south in the ruins of the Clinton dot.com bubble...well...I certainly didn't expect much of anything to happen!

And what happened? George Bush said, "I'm the President. And we need tax cuts. Congress, get busy and pass them." Right then, like the first week he was in office. And they did! The poor booby Dems were so unused to someone who believed in something that they just did what they were told. Truly I tell you, that was the peak (politically speaking) moment of my life. And there were more tax cuts to come. And they worked! And now we have one of the best economies in history. with years of steady growth , low unemployment, almost nonexistent inflation....So good that the slime-animals of our press have to stay up late thinking of ways to talk down our prosperity. "The Dow hit new highs today, but some analysts expressed concern that weak demand for pillow feathers means a housing slow-down is on the horizon."

Couldn't happen to a nicer bunch...

One of the maddening, infuriating things about contemporary life is that in most ways this country is majority conservative, and leaning towards majority Republican. And yet liberals sit smugly in many legacy enclaves and act as if their ideas were not only the majority view, but the only sensible and "normal" and "modern" view---so much so that they need never engage in principled debate. (Which they would lose.)

I live in one of those enclaves, which adds to my ire. And another enclave is the "mainstream media," (MSM) which is almost entirely liberal and Democrat, and usually covers conservative or "Red State" or Christian matters like anthropologists visiting the Cannibal Isles. (The emblem of this was the decision at the NYT a couple of years ago to assign a reporter—one reporter—to cover all conservative matters. He was of course a liberal.)

The New York Times is the central spider of the MSM, in a very literal way, since all the local papers and TV news stations key off of the NYT, which gets to frame the stories and often decides what is "news" and what is not. When you watch the TV news (except perhaps Fox) you might imagine that all those glossy people study what is happening in the world and decide what is important. Nuh uh. Mostly the decisions are made by the NYT, and the WaPo and the AP. And none of them will never DEBATE, they just take it as read that they are at the the center of opinion, and have the intrinsic right to decide what we will know.

So it is with the utmost pleasure and pure delight that I read in Michelle Malkin that the NYT's credit rating has been lowered—yet again—and is barely above the level of junk bonds!!! It couldn't happen to a more deserving bunch of pompous frauds. Go boys, lead your whole vile treasonous industry down into the bone yard!

S&P Lowers New York Times Ratings To BBB/A-3; Off Watch 2007-07-11 12:18 (New York)
Rationale
On July 11, 2007, Standard & Poor’s Ratings Services lowered its long-term corporate credit and senior unsecured debt ratings on The New York Times Co., to ‘BBB’ from ‘BBB+’. The short-term corporate credit and commercial paper ratings on the company were also lowered, to ‘A-3′ from ‘A-2′. All ratings were removed from CreditWatch, where they were placed with negative implications on March 23, 2007, following the company’s announced plan to increase its dividend to shareholders. The rating outlook is negative....

Among the many reasons the NYT gang deserves to suffer is that the NYT is a business. With shareholders. The editors of the NYT have decided that their ideology is more important than anything else, including profits, and is worth excluding at least 60% of the population from their potential readership. But they don't OWN the paper! They have a duty, a responsibility to the owners to try to make a profit. They are in effect stealing from their shareholders.

Summer meltdowns...

From a NYT article on airline delays. Very bad. Just stay home.

...As anyone who has flown recently can probably tell you, delays are getting worse this year. The on-time performance of airlines has reached an all-time low, but even the official numbers do not begin to capture the severity of the problem.

That is because these statistics track how late airplanes are, not how late passengers are. The longest delays — those resulting from missed connections and canceled flights — involve sitting around for hours or even days in airports and hotels and do not officially get counted. Researchers and consumer advocates have taken notice and urged more accurate reporting....

..Moreover, in addition to crowded flights, the usual disruptive summer thunderstorms and an overtaxed air traffic control system, travelers could encounter some very grumpy airline employees; after taking big pay cuts and watching airline executives reap some big bonuses, many workers are fed up.

Some other airline delay statistics, meanwhile, are getting a fresh look, as well. After thousands of passengers were stranded for hours on tarmacs in New York and Texas this past winter, consumer advocates began complaining that Transportation Department data does not accurately track such meltdowns.

If a flight taxies out, sits for hours, and then taxies back in and is canceled, the delay is not recorded. Likewise, flights diverted to cities other than their destination are not figured into delay statistics...

Another factor not mentioned is that software now makes it possible to make schedules that use planes much more efficiently. That is, with planes spending less time on the ground. This helps make flying cheaper, but also makes the whole system more "brittle," because there are fewer planes sitting around airports that can be pressed into service if one breaks down.

Useful corrective...

...to the rubbish one hears about the rich getting richer, etc. (That can happen too, but that story is never accompanied by the fact that it is usually a correlative of strong economic growth. And that those happy places with less income disparity usually suffer from economic stagnation.)

The Rise Of the Bottom Fifth, How to Build on the Gains Of Welfare Reform
By Ron Haskins, WaPo

Imagine a line composed of every household with children in the United States, arranged from lowest to highest income. Now, divide the line into five equal parts. Which of the groups do you think enjoyed big increases in income since 1991? If you read the papers, you probably would assume that the bottom fifth did the worst. After all, income inequality in America is increasing, right?

Wrong. According to a Congressional Budget Office (CBO) study released this month, the bottom fifth of families with children, whose average income in 2005 was $16,800, enjoyed a larger percentage increase in income from 1991 to 2005 than all other groups except the top fifth. Despite the recession of 2001, the bottom fifth had a 35 percent increase in income (adjusted for inflation), compared with around 20 percent for the second, third and fourth fifths. (The top fifth had about a 50 percent increase.)

Even more impressive, the CBO found that households in the bottom fifth increased their incomes so much because they worked longer and earned more money in 2005 than in 1991 -- not because they received higher welfare payments. In fact, their earnings increased more in percentage terms than incomes of any of the other groups: The bottom fifth increased its earnings by 80 percent, compared with around 50 percent for the highest-income group and around 20 percent for each of the other three groups...(Thanks to Jimmy).

I don't mean to wave away the difficulties of those people in the bottom fifth. Their lives are very hard. But unlike any time in history before the 20th Century, the poor in places like America are not doomed to poverty. Actually, as has been said before, if you do three things, you won't be poor. Period. Those are: finish high school, delay having children until age 25, and be willing to work.

( Also, one should keep in mind that the statistics are deceiving, since we have a constant influx of new immigrants, and new young people, many of whom start out poor and gradually move up. The statistics might show the "bottom fifth" stuck where it was decades ago, but many of the individuals will have risen into another level.)

As a Christian, I must care about the poor. (And I do, more than most people seem to, although I'm not sure caring for them as a category counts!) But I have to say that I feel somewhat out of step with Christian thinking. To me it looks like we are "fighting the last war." We know how to defeat poverty, and, globally, poverty has been steadily decreasing. There is a bigger problem that's hardly on the radar.

I think that prosperity is killing far more people than poverty, and is creating far worse problems. If you think this is a kooky thing to say, you haven't looked at the demography of Europe, or Japan, or Canada. Or the church-attendance statistics. Prosperity has created two evil "Siamese-twins, the Culture of Death, and an insidious nihilism that seeps into everything. (And no, I am not saying we would be better off poor. Prosperity is our fate, and the only path we can take is straight on through.)

I could go on about all this, but it's time for me to get to work....

Good good good....probably won't happen

This is not only a stunningly good idea, but a fascinating psychological test. I bet you could show this to 100 Bush-haters, and not one of them would say, "Hmmm, maybe I'm a bit off about this guy." And you could show it to a hundred NRO-type conservatives, and none would say, "Hmm. This is a profoundly conservative idea." When it comes to Bush, minds are closed!

[IHT]....It was here in Kansas City, at the 2005 food aid conference, that the Bush administration pushed for a fundamental change that would have diminished profits to domestic agribusiness and shipping companies. It proposed allowing a quarter of the Food for Peace budget to be used to buy food in poor countries near hunger crises, rather than buying only U.S.-grown food that had to be shipped across oceans.

And Secretary of Agriculture Mike Johanns spoke at the conference on Wednesday to make the administration's case for the same idea, contending that such a policy would speed delivery, improve efficiency and save many lives.

Congress in each of the past two years killed the proposal, which was opposed by agribusiness and shipping interests who stood to lose business, even as it won support from liberal Democrats like Representatives Barney Frank of Massachusetts and Earl Blumenauer of Oregon....

Of course a "conservative idea" that appeals to Barney Frank sounds a wee bit paradoxical. That's because the traditional conservative position would be that we should not be giving charity to poor countries or people at all, because it will weaken them and make them dependent. Which is true, and it's likely that one of the reasons Africa needs so much food aid is because it gets so much. [Good read: For God's Sake, Please Stop the Aid! by Kenyan economist James Shikwati.]

BUT, we are not going to stop giving food aid as long as there are horrible famines in the world. It ain't gonna happen. So the next best thing is to buy food in Uganda for the famine in Kenya. That makes agriculture in Uganda more profitable, keeps prices up, which leads to investments that make future famines less likely. It rewards productive farmers, rather than penalizing them by dumping cheap food on the market.

By the way, there is no place in the world that suffers famines because it is overpopulated. That is a lie spread by the Culture of Death. The world has enough arable land to feed far more than its present population. If I had more time it would be fun to find the average output of farmland in the US, and then find out the total acreage of farmland on the planet, and extrapolate how many people the world could feed, at present levels of farming technology. I bet it would be surprisingly large.

As for my own feelings about Bush, I just want to scream because he isn't doing more! Especially, asking the American people to realize that we are in an information war, and that they should be making sacrifices in wartime—not in this case material sacrifices, but the psychological sacrifice of swimming against the current of lefty defeatism, and against the torrent of falsehoods that the news media broadcast. BUT, on the other hand, there is hardly a month goes by that I don't see some story like this one, of transformative things being tried by this administration. Ideas that, if they take hold, will bear fruit over generations.

Which is the real reason that brain-dead lefties and Quakers hate Bush. The tectonic plates are shifting under their feet, and Bush is the symbol of change. They have no beliefs that will give them traction when the floor starts tilting, so they turn their angry bewilderment on a symbol...

Results of experiment are in...

Case Closed: Tax cuts mean growth. By Fred Thompson

...but there is reason to smile this tax season. The results of the experiment that began when Congress passed a series of tax-rate cuts in 2001 and 2003 are in. Supporters of those cuts said they would stimulate the economy. Opponents predicted ever-increasing budget deficits and national bankruptcy unless tax rates were increased, especially on the wealthy.

In fact, Treasury statistics show that tax revenues have soared and the budget deficit has been shrinking faster than even the optimists projected. Since the first tax cuts were passed, when I was in the Senate, the budget deficit has been cut in half.

Remarkably, this has happened despite the financial trauma of 9/11 and the cost of the War on Terror. The deficit, compared to the entire economy, is well below the average for the last 35 years and, at this rate, the budget will be in surplus by 2010.

Perhaps the most fascinating thing about this success story is where the increased revenues are coming from. Critics claimed that across-the-board tax cuts were some sort of gift to the rich but, on the contrary, the wealthy are paying a greater percentage of the national bill than ever before.

The richest 1% of Americans now pays 35% of all income taxes. The top 10% pay more taxes than the bottom 60%....

Tax cuts result in the rich paying a bigger share. And the maddening thing is that it's impossible to 'tell" this to most people. They just can't hear it. Their little brains reject the alien idea.

It was the same thing with the Reagan tax cuts. The percentage of taxes paid by those in the upper brackets increased. But my efforts to communicate this fact to others was hopeless...

Just keeping it for when I need it...

PowerLine had this post on how the "Bush Economy" is doing, and I'm quoting it here partly so I'll have the figures at hand when needed. To use in combat, in the un-ending and almost-hopeless fight against LIES.

The Department of Labor has just announced this month's job figures, and it's more good news. March saw the creation of 180,000 new jobs. This means that since August 2003, more than 7.8 million jobs have been created, with nearly 2 million jobs created over the last 12 months. The economy has now added jobs for 43 straight months, and the unemployment rate remains at 4.4 percent, which is low by historical standards.

The news is also good on the pay and productivity fronts. Specifically:

Real after-tax income per person has risen by 10 percent since President Bush took office.

Real wages rose 1.8 percent over the past 12 months through February, which is substantially faster than the average rate of the late 1990s economy.

The economy has now experienced more than five years of uninterrupted growth, averaging 3.0 Percent a year since 2001.

Since the first quarter of 2001, productivity growth has averaged 2.8 percent, which is well above average productivity growth in the 1990s, 1980s, and 1970s.

What seems to me important here is that this is not just about material prosperity, but about things of the spirit. For instance, Welfare Reform has resulted in millions of people escaping welfare-dependency, and becoming able to hold jobs and provide for themselves. Quite possibly many of them have not actually improved their material condition much, but their psychological situation is vastly different. And this will tend to help their children and grandchildren as well. I could not happen in France.

BUT, it wouldn't work if America didn't have a strong economy that can provide lots of jobs. Basically we have enjoyed strong growth since the Reagan tax cuts. With what seems like a much-needed booster shot from the Bush tax cuts.

Insanity is when you make the same mistake over and over and.....

Surprise, surprise. Yet another pension-fund-gonna-go-bust story. It's a bore; there are so many of them. States, countries, organizations, companies of all sorts and colors.

The INSANITY is that it just goes on and on. Decade after decade. Although many individual organizations have learned better, we don't learn as a a society.

This Jersey thing is a "defined benefit" plan. That is, you define how much the retirement benefits will be, and then try to keep putting enough money in to make that happen. (Sort of like making a New Years resolution about what your weight will be next Christmas, and promising to eat so as to make that happen.) The alternative is a "defined contribution" plan, which says "We will take X dollars each month and put it in your 401-K, and you will have whatever retirement benefits your investments yield."

In 2005, New Jersey put either $551 million, $56 million or nothing into its pension fund for teachers. All three figures appeared in various state documents — though the state now says that the actual amount was zero.

The phantom contribution is just one indication that New Jersey has been diverting billions of dollars from its pension fund for state and local workers into other government purposes over the last 15 years, using a variety of unorthodox transactions authorized by the Legislature and by governors from both political parties.

The state has long acknowledged that it has been putting less money into the pension fund than it should. But an analysis of its records by The New York Times shows that in many cases, New Jersey has overstated even what it has claimed to be contributing, sometimes by hundreds of millions of dollars.

The discrepancies raise questions about how much money is really in the New Jersey pension fund, which industry statistics show to be the ninth largest in the nation’s public sector, with reported assets of $79 billion.

State officials say the fund is in dire shape, with a serious deficit. It has enough to pay retirees for several years, but without big contributions, paid for by cuts elsewhere in the state’s programs, higher taxes or another source, the fund could soon be caught in a downward spiral that could devastate the state’s fiscal health. Under its Constitution, New Jersey cannot reduce earned pension benefits....(Link. Thanks to Orrin)

Just read the story, and THINK a bit. (I'm talking to YOU, Mr Democrat loyalist.)

The big lesson of the 20th Century (besides that one about Revolutions that are going to help the Workers and Peasants) is that defined-benefit plans don't work. But the madness goes on and on. And the biggest insane-rip-off of all is called Social Security. And when President Bush proposed a mere small start at ending the insanity, every brain-dead lefty in the country opposed him, and conservatives gave him only tepid support. (And then they have the nerve to say that Bush is betraying conservatism! When the sums he was trying to get out of the hands of government, and into the control of ordinary people make all our recent budget deficits look like pocket change.)

compassion for the poor.

You guys probably already know this, but I will post it just to feel smug while thinking about the millions of economic illiterates who claimed (and some still do) that the Bush deficits were going to sink us nose-deep in quicksand. Yeah, right. Just like the Reagan deficits did.

From OpinionJournal, Fiscal Revelation, The federal budget deficit just keeps shrinking...

...The news Mr. Conrad won't broadcast is that over the past three years the federal deficit has shrunk by 58%. The Congressional Budget Office--not the White House--is estimating that the current year's deficit (for fiscal 2007) will fall to $172 billion....

....We don't put much stock in future budget forecasts because they depend on so many variables. But even CBO predicts the deficit should remain near or below 1% of GDP for the rest of the Bush Presidency. That's well below the 40-year average of 2.4% of GDP.

This also means that the federal debt burden will continue to fall. Alarmists point to the $1.4 trillion rise in total federal debt from 2003-2006, but that amount is dwarfed by the $14 trillion in new household wealth created over the same period. And for all the international scolding of an allegedly profligate America, U.S. federal debt as a share of GDP is falling again. At 37% in 2006 and heading south, the U.S. figure compares to 52% in Germany, 43% in France, and 79% in Japan. Once again rising total "debt" is a scare word used to justify higher taxes....

As I've explained before, adding debt is good, if you are investing in something that will increase your wealth. Primarily by cutting taxes, which puts money in the hands of those best motivated to make the economy grow---us ordinary Americans. And keeps it out of the hands of those who want to squander it unproductively---politicians. This helps the poor, by creating jobs. The number of jobs has been growing strongly for several years now, although the press does not mention it.

The really painful fact is that the best thing we can do for the poor is give tax cuts to the rich. George W Bush has consistently shown compassion for the poor. The Democrat frauds who want to raise taxes hate the poor. (Or rather, they love them so much they want to keep them the way they are forever.)

C'mon Nancy, repeal those "Tax Cuts for the Rich"

Intl Herald Tribune: U.S. businesses added many more workers to their payrolls last month than economists expected, and workers' pay rose at a healthy clip — further evidence of strength in the job market despite a slowdown in the economy.

The U.S. Labor Department reported Friday that nonfarm employment grew by a seasonally adjusted 167,000 jobs in December, more than enough to absorb natural growth in the number of workers. The figures for October and November were revised upward as well. Wall Street had been expecting a gain of only 100,000 jobs in December.

The U.S. unemployment rate remained unchanged at 4.5 percent. Those who were unemployed in December were out of work for a shorter period of time, on average. And the percentage of the total U.S. population holding jobs rose to 63.4 percent, the highest level in more than five years....

....Tightness in the job market has been driving wages upward, economists say. With unemployment so low — the 4.4 percent reading in October was the lowest in five years — employers have found themselves having to increase pay a bit to fill vacancies

Compared with the December 2005, average hourly wages were up 4.2 percent, the government reported. The figure for November was revised up slightly to the same rate; they are the highest readings since February 2001....(Thanks to Orrin)

The poor are getting poorer, the rich are buying poor babies and sucking out their blood....there's no time to waste implementing the superior economic policies of the EU!

a moonbat among moonbats...

An economist friend has sent me some thoughts on Pinochet, responding to the comment thread here. I'm keenly grateful—thanks!

First of all Greg Palast is a moonbat among moonbats. He used to write for the UK’s Guardian and was a lefty even by their standards. His most recent claim to fame is arguing that Kerry won Ohio because if you count 100% of the Ohio ballots that were disallowed as votes for Kerry, he would have squeaked out a win. ‘Nuf said.

His comments on Pinochet are a combination of omissions, selective dates for comparisons and various other distortions. Notice that one economic term Palast never uses is “inflation.” When Pinochet took power from Allende in 1973 inflation was between 120 and 200 percent per year. The economy was in collapse. He cites the low unemployment rate of 4.3% in 1973 when Pinochet came in compared with 22% 10 years later. First of all it is easy to have low unemployment when everyone works for the government, but beyond that, his comparison date, 1983, was chosen to correspond to an international recession/debt crisis (not unlike the Asian crisis 10 years ago) in which Chile was entangled. No doubt they were excessively vulnerable (too much domestic debt denominated in foreign currencies) and they had to do things differently in the future. But they learned and did do a better job of controlling international debt. As a prime example, they came through that late nineties debt crisis which impacted Brazil and especially nailed Argentina in good shape.

The closest analogy I can think of to a Pinochet following an Allende in Chile was Reagan following Carter in the US. And we have the advantage of an established institution, the Federal Reserve Bank that, if properly run, can do much of the heavy lifting. But even then it was a struggle getting Carter’s 18% inflation down to the middle single digits in 10 years. As you may recall things were pretty ugly here in the early 80s. So imagine what it was like to tackle inflation of 150% plus the rest of a screwed up list of socialist initiatives. Pinochet didn’t get it all right all the time and he certainly broke quite a few eggs to make his omelet, but as Frank Perdue used to say (to mix a metaphor) “it takes a tough man to make a tender chicken.”...

...Meanwhile, back on the chicken farm, Pinochet instituted a land reform package that was enormously successful. Allende had wanted to use the land confiscated earlier from large landowners (about one-half Chile’s arable land) to start a Soviet style large state-farm system. Pinochet used the land to establish family farms and solidify property rights. To me property rights are the bedrock of a market economy.

It’s probably true he moved too fast on banking reform and that led to some of the hot money inflows that contributed to the vulnerability in 1983. But, as I said, he didn’t always get it right the first time, but banking reform had to be tackled sooner or later for Chile to enter the global economy. And indeed it has entered.

Like all dictators Pinochet overstayed his “welcome” and was either kicked out or persuaded to resign (I don’t recall the details). Nevertheless, the subsequent democratically elected governments seem to have kept most of his reforms. If there is a more robust, freer and faster growing country in SA I don’t know what it is. As for the Palast claim that poverty doubled under Pinochet I find that hard to believe. Maybe they did what welfare agencies do in this country when they begin to run low on poor people, just change the definition and create some more of them.

Finally, there has been a debate for years over whether you can have economic freedom without political freedom (think Singapore). Milton Friedman thought it was economic freedom that was the prerequisite and that political freedom would eventually follow. Seems to have worked in Chile. It also seems to be working in Eastern Europe and much of the Former Soviet Union. Palast should have been with me in the mid-nineties when I was in Eastern Europe accompanying a friend working on a library project. The number of books on scientific socialism that were being swept out the doors was amazing. They were stacked high in corridors awaiting disposal – not for doctrinal reasons, but for disinterest and irrelevance.
Greg! It’s never worked. It will never work

A Soviet style large state-farm system! Oh yeah, that's "compassion for the poor" all right...and I well remember the bloodbath it took for Reagan to wring-out inflation. And Thatcher too. You could probably cherry-pick statistics from back then and "prove" that they were disasterous leaders. But in fact the result was superb economic growth, and we are still cruising on the momentum that Reagan started.

Good guys in the machine.....

I really liked this post by Glenn Reynolds...

A GUY WHO WORKS AT PFIZER wrote me about my book -- nothing really relevant here -- but in my reply to him I wrote:

BTW, we love Pfizer in my house because your exotic anti-arrhythmic drug Tikosyn has changed my wife's life. It's genuinely a miracle drug for her.

He emailed back:

I will pass your thanks along to the guys in the lab. You have no idea how much this kind of message matters to them --and to all of us. We KNOW there's a pony in there somewhere but some days it's not easy to remember that.

It's kind of sad that such a small email means so much, but I suppose that these guys get a lot more criticism than praise, despite the miracles they produce. But it occurs to me that -- while so-called "Big Pharma" may not be perfect -- drug companies have done a lot more to make my life better than their critics have. Maybe someone should point that out more often.
UPDATE: Related thoughts from TigerHawk.

How sick I get of leftist hate-mongering, such as the ritualistic portrayal of big oil or pharmaceutical or defense companies as "greedy" and evil and corrupt. That stuff is just stupid shit, and the people who come out with such blather are living in lies. (It is of course possible to make reasoned criticisms, with evidence and logic. But those are few and far between on the Rive Gauche.)

Those companies are all just collections of people, who by and large are trying to do a good job and leave the world a better place. Their profits, averaged over time, are reasonable, and comparable to those of, say, hippie save-the-earth-and-pat-ourselves-on-the-back companies like Ben and Jerry's or your local organic-food supermarket. (Actually, the whole idea of "profits" as the left sees them is a delusion--Peter Drucker explained this long ago. Read and learn.)

Whoops...

I always feel a bit redundant, posting something that Glenn Reynolds has posted. But this is too peasant to pass up. From WSJ:

The Labor Department released its September jobs report on Friday, and some wags are calling it the "whoops" report. The "whoops" is a reference to the upward revision of 810,000 previously undetected jobs that Labor now says were created in the U.S. economy in the 12 months through March 2006.

So instead of 5.8 million new jobs over the past three years, the U.S. economy has created 6.6 million. That's a lot more than a rounding error, more than the number of workers in the entire state of New Hampshire. What's going on here?

Our hypothesis has been that, due to the changing nature of the U.S. economy, the Labor Department's business establishment survey has been undercounting job creation from small businesses and self-employed entrepreneurs. That job growth has been better captured in Labor's companion household survey, which reported 271,000 new jobs in September after 250,000 new jobs in August, and a very healthy total of 2.54 million new jobs in the past year...

...Most of the media has ignored all this and instead focused on the disappointing 51,000 "new jobs" number from the establishment survey for September. But even in that survey, the jobs number for August was revised upward by 62,000 and the U.S. jobs machine continues to roll out an average of about 150,000 additional hires each month. Even the loss of residential construction jobs in September, due to the housing market slowdown, was nearly matched by payroll gains in commercial construction.

This boom in employment started in August of 2003, roughly coincident with the economy's growth acceleration in the wake of the Bush Administration's 2003 tax cuts on dividends, capital gains and in the top marginal income rate on the highest earners. Yet on the same day that the Labor Department discovered 810,000 new jobs, Nancy Pelosi promised that if she becomes Madam Speaker next year, within 100 hours of taking the gavel the House will vote to repeal those tax cuts and raise the minimum wage....

If you love the poor, vote Democrat. They promise to preserve the poor, as a national resource.

Boiling away...

Mike Plaiss sent a link to this article, about emigration from Germany...

..."People say things aren't getting better in Germany, and nothing's going to change any time soon,'' said historian Simone Eick, director of the German Emigration Center in the northern port city of Bremerhaven. Indeed, "some indicators suggest that this may be the start of mass emigration.''

That's reflected by the 630 postings recorded since Aug. 10 on an Internet forum on emigration hosted by Germany's Spiegel magazine. Germany doesn't have much of a future, a 40 year-old German teacher who moved to France said Aug. 26 in a typical posting. The teacher, writing under the alias "Kritischer Leser,'' meaning Critical Reader, said he's working fewer hours and making more money than his sister, a doctor in Germany...

...Other German expatriates cite what they say is the over-regimentation of the labor force. "Life in Germany is totally over-regulated,'' said Christian Kaestner, 38, an attorney who moved from Munich to Cape Town, South Africa, in 1997. "There are hardly any freedoms left, and you keep bumping into regulations and prohibitions.''...

I would agree that "Germany doesn't have much of a future..." Partly because the very people who are likely to demand change are the ones who leave. It's sort of like the way a pot of boiling water stays at 212°. Because every time a molecule gets hotter than that, it turns to gas and emigrates!

This is also a good example of what Tom Friedman pointed out a few years ago, in The Lexis and the Olive Tree, that with globalization countries are becoming like US states have long been. That is, they don't have much freedom to pursue bad economic policies, because it is too easy for money and capital to flee elsewhere, and because bond ratings react very quickly. You can still do it, but you can't insulate yourself from punishment as countries once did.

good debunking...

David R. Henderson takes apart two articles (WaPo, NYT) whose numbers were deliberately selected and crafted to give a false impression of the state of the US economy, to help liberals retain their hate-America worldview against the cold winds of reality. In other words, lying with statistics...

...The basic message Greenhouse and Leonhardt deliver is that "wages and salaries now make up the lowest share of the nation's gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960's." That is literally correct, according to the federal government's measures. But it's also misleading, for two main reasons, in order of importance.

First, as marginal tax rates have increased for most people except the highest-income people, due mainly to rising Medicare and Social Security tax rates over the last 40 years, employers have paid a higher and higher percent of compensation in the form of untaxed benefits. So a more-relevant measure is not wages and salaries but total employee compensation. ...

- - - - - - - -

...The Washington Post's "Devaluing Labor" by Harold Meyerson, credulously quotes the New York Times piece to buttress his case. And what is Meyerson's case? He hearkens back an America from 1947 to 1973 when "More Americans bought homes and new cars and sent their kids to college than ever before" and writes, "That America is as dead as a dodo." He doesn't present data to make his case, which is understandable because the America of today is even in better economic shape than the America of his golden era. Let's take his own criteria -- home ownership, car ownership, and the percent of the population with college degrees. In focusing on these data, I'm assuming that Meyerson cares about whether Americans own homes, own cars, and have college degrees, not whether they bought houses, bought cars, and went to college last year..

Take home ownership. In the first quarter of 1965, the first date I could find quickly, 62.9 percent of American households owned their homes. That was during Meyerson's golden era. In the second quarter of this year, the "dead middle-class era," it was 68.7 percent, an all-time high. Cars? What's relevant, as with homeownership, is the percent of the population that owns cars. And this has boomed. In 1970, presumably near the peak of Meyerson's golden era, there were 108.4 million vehicles registered in the United States; by 2003, this had soared to 231.4 million, an increase of 113.5 percent, while the population had risen by only 42.4 percent.....(Thaks to Orrin)

It is to be hoped that lefties will believe the poppycock in the two articles, and base their election plans on it. How's this for a catchy slogan: "Worst economy since Herbert Hoover!"

Another item.

...So what did happen to corporate profits? They rose, from 7.8 percent of GDP to 12.1 percent of GDP. That is a large increase, and percentage-wise it's huge. So why didn't Greenhouse and Leonhardt report this number? I think it's because they didn't want their readers thinking that only 12 cents out of every GDP dollar went to profits...

There's a much-cherished illusion among leftists and the ignorant that big business rakes in huge profits while the workers get crumbs. If you know anything at all about business you know this is twaddle. For most businesses, employee compensation is by far the biggest cost.

Off the cliff...

Mike Plaiss sent a link to a good Bloomberg editorial, If a Deficit Falls in the Forest, Do You Hear It?, by Amity Shales...

...This year, the new report says, the deficit will be $260 billion, or $111 billion less than the CBO estimated in March. For 2006, the government deficit will be 2 percent of gross domestic product, down from the old baseline prediction for 2006 of 2.6 percent. On Aug. 17, when the more extensive annual Update of the Budget and Economic Outlook appears, that 2 percent figure is likely to show up more definitively. But neither the budgeteers' news nor the prospect of a confirmation of it is generating much discussion.

This is surprising. The Economic Report of the President shows the federal deficit for 2004 was 3.6 percent. A narrowing of more than 1 1/2 percentage points in such a short time is itself a story.

The U.S. deficit is worth comparing, for starters, with the data for European nations. In the Maastricht Treaty of 1992, European leaders set a deficit goal of 3 percent of GDP. EU member countries have had trouble meeting that target since...

Indeed, they have had trouble, and will continue to do so. And the people who claim that Bush's deficits are sending us over a cliff will continue to ignore this. But more importantly, figures like deficits are only meaningful in the context of the economy as a whole. (It's insulting to explain this in baby-talk, but there may be liberals in the audience.) If my debts are increasing, but my assets are growing even more rapidly, I'm probably in good shape, as long as I can service the debt. (And if my assets are increasing because of the investments for which I incurred that debt, I'm probably making some smart moves!)

On the other hand, if my assets are not growing, if my income is not increasing, but my debts are increasing, I may be in bad shape!

Situation one is USA. Situation two is EU. Who goes off cliff?

A disproportionate share of income taxes...

PowerLine has a lot of fun with this NYT article, Surprising Jump in Tax Revenues Is Curbing Deficit, which tries to diminish any foolish tendency people might have to think that that title might be good news.

One thing that caught my eye:

...One reason for the increased volatility may be that, contrary to a popular assumption, a disproportionate share of income taxes is paid by wealthy households, and their incomes are based much more on the swings of the stock market than on wages and salaries. About one-third of all income taxes are paid by households in the top 1 percent of income earners, who make more than about $300,000 a year. Because those households also earn the overwhelming share of taxable investment income and executive bonuses, both their incomes and their tax liabilities swing sharply in bull and bear markets...[My emphasis].

In simple terms: If you cut tax rates, the rich pay more of the taxes. You might define "liberal" as someone whose immune system rejects that fact like an alien infection. I remember trying to tell this to a squashy liberal after Reagan's tax cuts, more than 20 years ago. Without success. I bet the dear girl still thinks the rich are escaping their "fair share," and are paying less and less.

And statistics like this are something one often hears from Rush Limbaugh. To which liberals have no (logical) reply. When you hear that Rush is a "hatemonger," this kind of stuff is what they are really complaining about.

At last!

One of the many loathsome aspects of Hollywood is its eagerness to portray white male businessmen as crooks and killers. And I've long suspected that this is not only trendy leftism, but is also a reflection of the sort of people you encounter if you are in the movie business. They are just telling it like it is, to them...Here's some evidence:

NYT: LOS ANGELES, May 21 — Three months after the indictment of Anthony Pellicano, the private detective who prosecutors say routinely wiretapped enemies of the rich and famous, a fraternity of high-priced lawyers who do Hollywood's business from glass towers in Century City are waking to a grim truth: the government believes they are the problem.

This town has been increasingly consumed by the spectacle of a prosecution that has touched dozens of show business figures since it began to unfold with Mr. Pellicano's indictment in February. So far, an unlikely sheriff — a 43-year-old prosecutor without a single large-scale case under his belt — has studio chiefs, agents, producers and movie stars all waiting to see if they will join those who face criminal charges, be called as witnesses or merely have their ugliest personal and business secrets revealed in court and reported in the newspapers.

But it is only now becoming clear that powerful businesspeople and stars are just collateral damage in a hunt for the real target: what government lawyers see as corruption in a legal system that is suddenly being policed after decades of neglect....

....While some Hollywood people joke that all the good criminal defense lawyers are taken, some top Los Angeles lawyers say that the best ones were avoiding taking clients now, betting that more indictments are coming and will land even bigger fish.

Any further indictments are almost certain to take aim at the lawyers — something Mr. Saunders signaled after announcing charges against Mr. Christensen. The lead partner of one of Century City's biggest law firms, Mr. Christensen, who pleaded not guilty to wiretapping and conspiracy, was caught on tape discussing with Mr. Pellicano wiretapped recordings the private detective had made of Mr. Christensen's legal adversaries talking about their strategy and other sensitive subjects. "No attorney should stoop to such levels to gain a tactical advantage," Mr. Saunders said at the time....

Sweet! Couldn't happen to nicer people. Thanks for the link to Jim Miller, who links to an interesting Guardian article, stuffed with curious celebrity tidbits, including this one:

....Pellicano did work directly with one president: during Bill Clinton's first presidential campaign Pellicano was hired, reportedly by Hillary Clinton, to discredit Gennifer Flowers, the woman who alleged that she had maintained a 12-year affair with the candidate. Six years later, with Clinton into his second term, the White House, according to the New York Post, hired Pellicano, considered a respected forensic audio specialist, to look into Monica Lewinsky's background....

Should have 'fessed up long ago...

From USA Today:

....Mounting research shows employees are cautiously optimistic as salary freezes thaw and companies play tug-of-war over skilled job candidates.

Workers reported high confidence in their job security, with more than 80% predicting little or no chance they could lose their jobs in the coming year, according to a May survey of 1,000 full-time employees by Philadelphia-based Right Management.

That's a big jump from six months ago, when nearly a quarter of employees said they might leave their jobs....

Leftist obfuscators have been amazingly successful in covering up the superb condition of our economy, and the success of the Bush tax cuts. BUT, reality creeps in, and the hilarious thing is that their holding back the truth means that, for many people, the good news will be new and fresh just in time for the 2006 elections!

If they had been honest, the strong economy would be old news by now...

Sweet good news...

Charlene, of course, caught this one:

FoxNews: A federal grand jury has indicted a top class-action law firm in a scheme that paid more than $11 million in illegal kickbacks to get people to take part in shareholder lawsuits.

The charges follow years of investigation into the way New York-based Milberg Weiss, Bershad & Schulman conducts shareholder lawsuits against major corporations.

Click here to view the indictment (FindLaw PDF).

Lawsuits by the firm, the lead plaintiff in more than half the federal shareholder suits settled from 1997 to 2004, generated hundreds of millions of dollars in attorneys' fees, the indictment said.

"The conduct alleged in the indictment is particularly troubling because it represents a pattern of deception that spans 2 1/2 decades," said U.S. Attorney Debra Wong Yang....

Take their cars and houses, and send 'em up the river....

Goals met, bonuses paid...

I saw this in the NYT a few weeks ago:

Raytheon directors punished the chief executive, William H. Swanson, by taking away almost $1 million from his 2006 compensation yesterday because he failed to give credit for material that was in a management book he wrote...

OK, I guess you have to take firm steps to combat the evils of plagiarism. But I don't recall ever hearing of a board taking away part of a CEO's compensation because he failed to keep the business profitable and growing...Whereas (and this may be press bias) you often hear of bosses getting their bonuses even as the company is being downsized, divisions axed, workers laid-off, and the stock heads south...

Hmmm. And speaking of the New York Times....I wonder...

Who are the owners, and what do they think?

I've been wondering why we haven't seen more things like this:

Morgan Stanley Investment Management said Tuesday it withheld votes for the Times' director nominees because it believes the company's board and management have become unaccountable to shareholders.

The firm, which says it owns more than 5% of the Times' Class A stock, called for the elimination of the dual-stock structure that leaves control of the board with minority shareholders led by the founding Sulzberger family. The Times and a number of other big media outfits have left voting control in the hands of founders, under the rationale that long-term owners look after the long-term interests of the business rather than chasing short-term profit. But Morgan Stanley said the company has failed to keep up its end of the bargain..(Thanks to Michelle Malkin).

What was the bargain? The Sulzberger family sold shares of their company to the public. Their duty, as managers, is to act in the interests of those owners. By treating the Times as their own little political toy, they are guilty of fraud..

....Morgan Stanley added that it believes that "other long-term institutional shareholders have also withheld their votes for the company's Class A director nominees." The Times couldn't immediately be reached for comment....

Couldn't be reached for comment? Maybe The Times is out of the office today...How indignant those clowns would be if some Republican "couldn't be reached for comment."

...New York Times Co. stock has dropped 52% since its peak in June 2002, Morgan Stanley says. But "despite significant underperformance, management's total compensation is substantial and has increased considerably over this period," Morgan Stanley says....

I'll bet the NYT has run articles or editorials criticizing various big businesses for giving management fat raises even as profits are falling. I'd also guess the Sulzbergers don't think of themselves as capitalists, but more like caretakers of a shrine or church...

Sukuks

A friend e-mails, concerning the ports controversy:

Anyway, something that's bugged me in Michelle Malkin's posts on this has been her hang-up on the "sukuk." For example, in this post she says, "The supporters of, and retreaters on, the deal are also silent about the unprecedented, Islamic law-compliant funding scheme that allowed state-owned Dubai Ports World to force its more experienced rival to drop its bid for P&O. (The underwriters of Dubai Ports World's $3.5 billion Islamic financing instrument called a "sukuk" --Barclay's and Dubai Islamic Bank--were both cited as probable conduits for bin Laden money.)" Now, regarding Barclay and the Dubai Islamic Bank, I don't know anything - I doubt they're a shady operation devoted to bringing down the global economy and turning the world into an agrarian Caliphate, but I can't say for sure. But she portrays the sukuk as though it's some creeping sharia scheme or some such, which is just nonsense. In fact, I think the financing the best part of the whole deal.

Observant Muslims are not permitted to loan money at interest, and aren't supposed to borrow money at interest either. That can make buying a home problematic. There are different ways to get around this - for instance, in my city there's an Islamic Co-op—you put down a down payment, and the co-op buys the house. Then you pay down the loan interest free—however, you also pay them rent on whatever proportion of that home they own. As you pay down the loan, the less of your monthly payment that goes to rent, and the more that goes to pay down the loan.

Now, I'm sorry, but I think it's just a linguistic game - it's just putting a different name on interest. Which is fine - they see this as rent and as being acceptable, and I certainly don't begrudge them that. It's a solid investment for members of the co-op, returning 5%-7%, helping their community, every borrower is also an investor - it's exactly the kind of help-yourself thing we encourage in America.

But the point is, investment options are hard to find for the diligent Muslim. One person I know works at Fidelity, and he can't invest in any of the products his company sells, because all of the funds and companies are investing money in interest-bearing vehicles somewhere along the line. He's said scholars agree that as long as no more than X% of the returns (5%, 8%, something like that) are from interest, that it's alright, as long as it also avoids liquor, pornography, gambling, etc. There are specific Halal mutual funds, but the options are pretty scarce.

Michelle posts that Dubai has started its own stock exchange, and that this $3.5B sukuk is its crown jewel - here's a Halal investment, backed by this amazingly solid, safe asset - leases on US and other international ports. If you're observant and need to park a couple million dollars in something safe, and bonds are forbidden, and treasury bills and money market funds are out of the question, and suddenly this opportunity comes along - hell, this is a god-send.

So here's $3.5B, which is publicly traded - it's owned by investors large and small all across the Muslim world. I saw someone say that the UAE has 3.5 billion reasons to keep our ports safe and secure. But the larger point is that these 3.5 billion reasons will be shared across the middle and upper classes of the entire Islamic world. The sukuk makes these assets more valuable to a Muslim than they are to anyone else, simply because it now serves a market that it couldn't before.

Sukuk's are apparently becoming an important investment instrument in the world. That's good. We should encourage the Moslem world to buy more of America, and to think of us as an asset! Also, there's no Moslem "Vatican" to make the rules, so opinions on what's halal vary from one place to another. here's a piece on the Dubai sukuk financing the P&O purchase.

Keep in mind that Christianity also used to forbid usury, that is, loaning money to other Christians at interest. And these prohibitions probably arose for good reasons. In earlier eras money lending was often very destructive. In Low-Trust cultures you get very high interest rates and terrible punishments for default, often slavery. It tended to be what we call mafia loan-sharking.

Credit is necessary, and Christians got around the prohibition in various ways, just as Moslems do now. (Having Jews do the lending turned out to be a bad way around the problem, and led to much anti-Semitism.)