Update from the Heartland
No.585
25.2.13 – 3.3.13
Blog version: http://heartlandupdate.blogspot.com/
To all,
ERRATUM:
As noted by a contributor in the Comment section, I erroneously reported the
number of jet product lines up for sale by Beechcraft Corporation; it is four
(4) vice three as originally reported [584]. Thank you for the catch.
An
absolutely fascinating video from NASA-Goddard of what is called coronal rain
on the surface of the Sun:
Enjoy!
This website is my first visit
every morning . . . and understandably so, I do believe.
On Tuesday, the
Senate broke the filibuster with a cloture vote of 71-27-0-2(0) to cut off the
debate on Nomination Number: PN34, and later in the day, the Senate voted
58-41-0-1(0) to confirm Senator Charles Timothy “Chuck” Hagel of Nebraska to be
Secretary of Defense – the closest vote for a SecDef since the creation of the
Cabinet post in 1947. The deed is
done; we move on.
The Senate voted
71-26-0-3(0) on Nomination Number: PN40, to confirm Jacob Joseph “Jack” Lew as
Secretary of the Treasury.
The abdication of
Pope Benedict XVI became effective after Joseph Alois Ratzinger flew by
helicopter to Castel Gandolfo (the papal summer retreat) and set history as the
first pope emeritus. The College
of Cardinals will convene in conclave soon to select a new Pope for the
Catholic Church.
Some thoughts on
sequestration . . . if anyone cares.
The
process finally went into execution phase at 23:59 [R] EST, Friday,
1.March.2013, in accordance with Title IX, Subtitle A, § 901 of the American Taxpayer
Relief Act of 2012 [PL 112-240; 126
Stat. 2313, 2370; 2.January.2013].
The Federal government (USG) has begun the process of reducing its
FY2013 spending by US$85B. We
shall see how the USG implements the spending reductions. For those of us who do business with
the USG, the consequences have been a major topic of discussion and concern
with no plan or guidance.
The
sequence of events in law began with the passage by Congress and the signing by
the President of the Budget Control Act of 2011
(BCA) [PL 112-025; 125 Stat. 240; 2.August.2011], and specifically Title I [125
Stat. 241] of the BCA, intended to force Congress into making the
necessary tax reform and spending reduction to shrink or eliminate the federal deficit
and borrowing demands, as Congress increased the debt limit “one last
time.” We could argue the penchant
for obscene spending by Congress, coupled with the intransigence of the
political parties, began long before the BCA, but that effort might well become
an infinite “Do Loop,” using FORTRAN programming parlance. The Senate made two lame, last minute
attempts to stave off sequestration.
Both attempts failed for one reason or another. I have no confidence Congress will do
what has to be done.
The
difficulty for us mere citizens remains sorting the wheat from the chaff. Both political poles have been rattling
the saber with their fear-mongering, and all sorts of accusations have been
spat upon the public forum. The
Republican House leadership has accused the President of creating the crisis by
suggesting sequestration in the first place, but I find that notion specious,
disingenuous, and otherwise a really foolish, juvenile, “nanny-nanny-poo-poo”
attempt. The source makes no
never-mind. Congress framed the
legislation, passed the bill, and the President signed the BCA into law. However, all that “who shot John”
falderal is peripheral, distracting and otherwise not contributory to finding a
solution. Congress (both parties)
have had multiple opportunities to do the responsible things necessary to
reduce spending.
At
first, I got a bit rankled with the administration’s agents talking about
flight delays, reduced meat inspections, teacher layoffs, releasing illegal
aliens and such. Then, I began to
think through the situation. The
USG spending the Executive has authority to reduce at its discretion is just a
grain of sand on a vast beach.
Congress decides the real hard-spending by specific allocations to
projects and programs they define, and provides blocks of funding for
discretionary-spending by the Executive based on conditions and
circumstances. Here, I call tax
breaks, or as Congress likes to euphemistically called them tax incentives,
hard-spending as they reduce revenue and are defined by law. The Executive
cannot cut spending on those items within the law; Congress must amend the law
to affect those hard-spending expenditures. Thus, the sequester spending
reductions are going to hit employment and related expenditures as the hard
funds for entitlements, tax breaks, brick & mortar and acquisitions are
defined by law. Further, the only
folks who will pay the price for the inability of Congress to do their job will
be ordinary working citizens employed by the USG, and as the shock waves
reverberate across the economy, many of the rest of us common folk. The consequences will certainly not be
felt by the wealthy who become more wealthy by all the congressional largesse
heaped upon them by tax breaks of multiple forms and pet projects paid for by
the public treasury. So, it should
be no surprise that blanket spending reductions will unnecessarily impact
federal employment, i.e., inspectors, agents, analysts and such. I wish the President and others would
have done a better job explaining all that, but that’s life . . . and so it
goes.
Congress
must get serious about tax reform, earmark elimination, and hard spending
reductions. Some short-term
revenue provisions would seem appropriate and warranted to reduce the USG debt
burden and budget deficits. I
believe the USG has far more revenue than it should have, so I am not
particularly interested in permanent tax increases. We simply must wean our representatives and senators from
the corrupting influence of earmarks and other federal spending that is not for
the general welfare of the whole nation.
Spending on bridges to nowhere, knitting needle museums, Podunk
airports, and such nonsense can no longer be tolerated. I am not naïve to the point of thinking
Congress would actually reduce or cut off funding to those individuals and
corporations who make them wealthy.
This cycle of corruption is not likely to be broken until We, the
People, wise-up and force disconnection between our representation in Congress
and the highly corrosive influence of money. I hold little hope of seeing the necessary change in my
lifetime.
News from the economic front:
-- U.S. Federal Reserve Chairman Ben Bernanke moved to
downplay concerns [584] about the
third round of Quantitative Easing, known as QE3, in testimony to Congress that
suggests the Fed will continue to purchase assets. He indicated the costs and risks of QE3 are offset by other
benefits or else the central bank had them under control.
-- The Financial Times
[of London] reported that the People’s Republic of China (PRC) seeks to rein in
its fast-growing shadow banking system by requiring banks to provide extensive
disclosures about the off-balance sheet investment products that they sell to
customers. The report indicated
the shadow banking system has increased fourfold in size since 2008, to about
Rmb20T (US$3.2T), or 40% of the PRC’s GDP, and poses an increasingly serious
risk to Chinese economic stability.
The government is apparently considering the establishment of a hard cap
on the number of investment products that banks can issue as a percentage of
their assets.
Comments
and contributions from Update no.584:
Comment to the Blog:
“I hope this finds you and yours safe from the storms. I
understand how desperately the Great Plains needs water, but this is a rugged
way to receive it. Please take good care of yourself. Your well-being matters
more than your sidewalk or driveway.
“You made a rare-for-you error in this one. “All three
product lines – Premier (390), Beechjet (400), Hawker series (987) and Horizon
(4000) – ceased production . . .” does not add up correctly. I hope the company
and especially its employees prosper.
“General Allen has taken an action appropriate to his
situation. I find it difficult to believe how few politicians foresee the
consequences of their actions.
“Unfortunately, we have no way to gauge the truth or
falsehood of that Mandiant report accusing the Chinese of Internet espionage.
Why would they lie? One easy guess is that some people in DC miss having a
clear opponent/target to replace the Communist Soviets. They prospered more
when they could point at a particular bogey man. See my comment above about
consequences.
“I have read that article about polyamory. The source of
that is Scientific American, and their choosing to publish this particular material
may be another indicator of our national attitudes finally beginning to thaw
after the long winter of Victorianism.
“The Fed, the Eurozone, et al., will take a back seat in
economic news if the Congress continues its insane deadlock. Same comment about
consequences.
“I found your commenter on the Christian churches’ position
on contraception rather difficult to decipher, but I gather than he wants his
moral beliefs to be the law of the land. He would have better luck in a
theocracy such as Iran or Israel. Theocracy is not an American approach.”
My response to the
Blog:
Thanks
for your wishes. I’ve got the
snowblower workin’ finally, so it should be easier to keep up before the snow
gets too deep in the future. The
current forecast storm has yet to materialize, but there will be more.
Re:
error. Excellent catch and my
bad. There are indeed four jet
product lines vice three as erroneously reported. I have good expectations for the company’s future post
Chapter 11.
Re:
General Allen. It is my
inadequately informed opinion that the general’s fundamental right to privacy
was abused, and he was treated very poorly and quite inappropriately.
Re:
Mandiant. Perhaps. The report could also be accurate and
understating the threat.
Re:
national attitudes. I truly hope
you are correct in your assessment.
Re:
economic news. Once again, I
suspect you’ve made another accurate observation.
Re:
contraception. I apologize to both
you and the contributor for my poor editing; I tried to achieve a reasonable
length and preserve the content. I
do not believe the contributor seeks a theocracy but rather voiced the position
of the Catholic Church – for the Church, for its believers, and apparently for
its employees as well. To me, this
debate is a classic organization versus the individual. Whose rights are supreme and under what
context? This debate is a vital
and essential issue for this Grand Republic or any free society.
My very best
wishes to all. Take care of
yourselves and each other.
Cheers,
Cap :-)
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