The Philadelphia Inquirer editorializes that taxpayers should no longer bail out big banks.  Almost all major newspapers have liberal editorials and so it is not surprising that they take whacks at businesses.    But in this case, they are absolutely right.  Banks have special provisions of law that no other business has.  As a group, they are allowed to lend out your deposited money 10 times or more.   That means for each time they receive interest from your money and they do it 10 times.  This explains why banks need bailing out in the first place.  They lend out depositor's money 10 or more times and when the depositor comes back for his or her money, the bank can't supply it since it has loaned it out (without your permission) and not done it just once, but 10 or more times. 

I've written about this a couple times on Caveman.  This ability to loan out your money 10 times is called fractional reserve banking.   It is legal, unfortunately, but highly immoral.   Two Senators are proposing higher reserves.  This is a step in the right direction but still immoral.  This legislation would hurt the profit line of banks, but so what?   They are already earning far more than they should for their invested capital.   They can earn on deposits and never have any invested capital at risk.  Support this move with your local Senator. 

The Japanese market took a 7.3% slide and it is affecting everybody.  Should this be a surprise?  The market is being buoyed by the printing of money, both here and in Japan.   So that means it is quite unstable.   The stock prices are not based on strong economic numbers but instead by all the money being printed by the central banks, both here and in Japan, as well as elsewhere.  That is a very unstable situation and the whole market could come tumbling down. 

Stocks fall on Fed meeting report, weak Chinese manufacturing

Wolf has brought up a very important topic.   America has tried stimulus programs to get the economy rolling again whereas Europe has tried austerity programs.  Neither has worked, he says.  

I have a pretty good answer when it comes to stimulus.  If you look at where stimulus money goes, it largely ends up in the hands of the financial industry.  Liberals talk about how bad trickle-down policy is when it comes to taxes (the extra money of the rich eventually trickles down to the average person), yet the Democrats trickle down policy is to give stimulus to the financial community hoping that it will eventually trickle down to producers and consumers.  It will maybe but it takes a long time.  Why?  Because the financial industry puts this new money into financial instruments, like stocks.   This bids up the price of stocks and is the reason why the stock market has done so well and nothing else has.  Only when the stock market becomes limited will the money flow elsewhere.  It needs to flow to consumers and to producers.  That is why an overall tax rate cut works so well.  Everybody ends up with more money. 

Regarding austerity, common sense would say that government spending never builds things that people need and want.   So getting rid of that would be helpful.   I don't have an answer (yet) as to why austerity hasn't worked.   It might be in Europe that government was such a big part of the economy already that any reductions flowed everywhere.   If that were the case, perhaps it just takes time for the private side to build up.   I don't take this as a very satisfactory answer but more government is obviously not an answer so that austerity should eventually be goodness.  I'll see where this fits into my economic series on Caveman. 

Liberal Media Is Worse Than Having No Media

 

Whelton points out that the media have been huge lap dogs for Obama and any other leading Democrat.  Not only do we get more Democrats elected, but because their decisions are never questioned, we get a lot of bad decisions.  They don't learn from their mistakes because the media is not pointing out the mistakes.  His last paragraph is appropriate:

An independent press is a compass, a vital part of the American system of checks and balances. It can provide the ship of state with mid-course corrections. But a compass that swings any way the helmsman wants is worse than useless. It points the way to disaster.

It is just a part of the Alinski strategy.  All he needs to do is tell the people that it is the establishment that is the cause of the problems and that he is not part of the establishment.  You can see him doing this during the scandals, and it continues.   This story by Kerwick is well-worth reading.  Be scared, be very scared.  
 

Victor Davis Hanson outlines some mysterious things about government.  Is it a matter that it is too big to control or is there a plan to destroy all of our freedoms?   If it is too big for the head politician to keep track of, then it is surely time to reduce its size.  If instead, there is a plan to limit liberty, it is time to arrest the guy in charge.  He has no business swearing on a bible to protect the constitution.  

This from the Associated Press.  And why any hope?   Did the Muslims decide that destroying Israel was no longer a policy?   Or destroying America?  Or destroying infidels?   I don't remember hearing that.   What's different than over the last 50 years or so? 

White House: More than 2,200 Oklahoma victims registered with FEMA for assistance

 

The mail came and no response from the Secretary of Homeland Security.  See this link.