Big Sky Cairn

The Federal Minimum Wage just went up. Doesn’t really matter in Montana since our state minimum wage is already higher then the Federal Minimum, but it did remind me of when I was making the minimum wage at my first job at Wendy’s. Oh, wait. Now that I think about it, as a green high school freshmen with zero work experience, my first job actually paid more than the minimum wage. Turns out, not too many people actually make the minimum wage…

So next time a liberal tells you a sob story about how hard it is to raise a family on the minimum wage, ask him to produce a family that’s trying to survive on the income from a sole breadwinner earning minimum wage.

And while they are looking, I’ll produce hundreds of small business owners who are struggling mightily in a soft economy, pinching pennies everywhere they can just to keep the doors open and the ledger in the black. I’ll show you a small business owner who has to reduce their payroll or postpone hiring new workers. I’ll show you the reasons for increasing unemployment.

And if by some miracle your liberal buddy manages to find someone scraping by on minimum wage, be sure to ask them if they’d prefer a slightly smaller paycheck or no paycheck at all.

We’ve blogged a lot about the near-religious dogma that is catastrophic man-made global climate change. On the left, it’s very rare for someone to even bother arguing the relative merit of climate change since they have unilaterally declared the debate “over.”

A recent Wall Street Journal editorial makes a lot of really good points, including this:

The former vice president has also recently disavowed any intention of returning to politics. This is wise. As America’s leading peddler of both doom and salvation, Mr. Gore has moved beyond the constraints and obligations of reality. His job is to serve as a Prophet of Truth.

People like Al Gore are the ones standing in the way of energy solutions. For them, a crippled economy is not only unimportant, but actually beneficial to their goal of reducing the so-called human environmental footprint. So when Republicans talk about the economic impacts of high energy costs - especially on the most vulnerable - they aren’t speaking the same language as the powerful special interests writing Democrat policy in Washington, DC. A significant economic blood-letting is exactly what they’ve been ordering for decades.

Whether we are currently experiencing a technical recession or not isn’t really the point. The point is, it feels like we are, and when it comes to the economy, feelings are often more important that cold data. Feelings dictate actions and actions determine the economy - not the other way around. The fact of the matter is, the solution to economic downturn is rarely some tax stimulus or grand government plan, but it’s the restoration of confidence (sometimes sparked by a stimulus or government action) which leads to the willingness to spend money which restarts the grinding of economic gears.

Of interest to me, however, is the question over which party, Republican or Democrat, a struggling economy benefits in November. The Helena Independent Record weighs in on this question while reporting “more bad news” on Montana’s economy.

The poor economy, perhaps even more than the record of the current president on the war, the response to Katrina, and so on, may turn the tide to Obama, even in Montana. It surely doesn’t help Republican John McCain to have an important economic advisor — Phil Gramm — who insists the economy is fine and people should just get over it. Now, that is stupid.

But why? Read the rest of this entry »

I won’t rehash what Dave Budge has said while doing a great job of covering the recent market woes.

Today’s move by the SEC to crack down on short selling of stocks has me a little skeptical that our regulators know what they are doing.

Short-selling has long had a bad name because an investor is essentially betting on the market to lose. However, short sellers serve an important role in that they act as a counter overly bullish investments. They were the first to blow the whistle on Enron, the subprime market, and the dotcoms of the late ’90s.

Unfortunately, with the recent economic downturn, the geniuses in Congress and regulatory agencies have chosen to go after boogeymen rather than the underlying economic problems. Whether it be blaming oil companies for colluding or now investors who are short-selling stocks.

Here is a thought, maybe instead of wasting time investigating a legal practice the SEC should go after individuals who leak internal financial data from banks causing them to collapse.

Corn is already expensive - driving up the cost of food - because the government has decided to interfere with the market demand for crops by heavily subsidizing corn production to be used in the production of ethanol.

“The reality is that people are dying already,” said Jacques Diouf, of the UN’s Food and Agriculture Organization (FAO). “Naturally people won’t be sitting dying of starvation, they will react,” he said. The UN says it takes 232kg of corn to fill a 50-litre car tank with ethanol. That is enough to feed a child for a year. Last week, the UN predicted “massacres” unless the biofuel policy is halted. “The world food situation is very serious: we have seen riots in Egypt, Cameroon, Haiti and Burkina Faso,” said Mr Diouf. “There is a risk that this unrest will spread in countries where 50pc to 60pc of income goes to food,” he said.

Corn - now a source of energy - has already been a significant source of food in the United States.

“There are some 45,000 items in the average American supermarket, and more than a quarter of them contain corn,” he reports. Indeed, corn and its array of byproducts have so successfully colonized the U.S. diet — and so dominate the diets of the animals consumed here — that Americans have ripped the title of “the corn people” from Mexico, where corn was originally domesticated and remains a staple.

Iowa - in the heart of the bread-basket - is the nation’s largest producer of corn (pdf). By a long shot.

And now with millions upon millions of Iowa corn fields under water - with a complete loss of crops - supply is about to drop even as demand sky-rockets.

And we all know what happens in those circumstances…

Democrats vote to raise taxes on the evil profiteering farmers.

I wrote a bit about what is going on with the financing problems for Montana’s student loan provider MHESAC here, but after today’s news I thought I would go a bit deeper into what is going on.

The crux of the problem remains that student loan providers are unable to find liquidity, which in turn will affect their ability to finance new loans. The problem over liquidity is not unique to the student loan industry, it is a market-wide problem right now. More after the jump. Read the rest of this entry »

The politics of the financial crisis are going to be messy, but one thing is for sure, Democrats will push for more market regulation under the cloak of helping the free market. This is what I like to call it the FREE, or Federally Regulated Economic Exchange, market philosophy.

The FREE market is a union of free market rhetoric, leftist moralism, and collectivist economics all exercised through a political body. The FREE market relies on the idea that economic freedom equates to personal freedom; however, it adds the thought economic freedom is not possible without the intervention of government. In the FREE market, multi-national corporations are assumed to be bad players in the global marketplace. Thus, the tax and regulatory code must be altered to limit the ability of the free market evolve on its own, independent of the wishes of the political body.

Additionally, in the FREE market, the individual is never to be blamed for poor choices if they make less than $84,000/year. However, if an individual makes more than $200,000 they are assumed to be predators who made their money through the work of others and not because of any effort that individual put forth.

Take the mortgage crisis for example; in the free market, the high rate of foreclosures is due to a convergence of factors including individuals seeking loans for more than their ability to pay and the incorrect belief that home prices will always be on the rise. Under the FREE market, the individual is absolved from all responsibility and the problem arises from a supposed lack of regulations on banks and mortgage lenders.

Hillary Clinton sums up the FREE market school of economic thought pretty well;

I just believe that there’s got to be a healthy tension among all of our institutions in society, and that the market is the driving force behind our prosperity, our freedom in so many respects to make our lives our own but that it cannot be permitted just to run roughshod over people’s lives as well.