Ron Paul, in an interview on Fox News Sunday, continues with his inane foreign policy beliefs when he comments about the US drone attacks on Islamic terrorists in Pakistan. He says these drone attacks are the reason the 'people of Pakistan can't stand our guts'. I suppose the thought never occurred to him that the reason they dislike us so is because they are indoctrinated by their imans that as infidels to Islam, we should be hated and ultimately converted to Islam via jihad?
Another anti-American screed comes from Barack Obama advisor and CNN host Fareed Zakaria who looks at the Eurozone which is teetering on an economic implosion caused by excessive debt brought on by decades long embracing of progressive / socialistic government policies and states 'The American Dream is better in Europe'. It should not come as too much of a surprise that Zakaria is a rabid supporter of President Obama's efforts for America to catch up to Europe's current troubles.
Speaking of our President, and former Constitutional Law professor at the University of Chicago, George Will notes that President Obama has apparently forgotten that in the Constitution there is an institution of the US Government called the Senate....and that it is controlled by a Democrat majority.
Shifting ever so slightly from the policies of the President to the world of finance and economics, we have the latest area of concern for our economy. In this analysis, it appears that the Municipal Bond market is the process of imploding. Credit quality in the municipal bond market is falling at the fastest rate since the collapse of Lehman Brothers in 2008. This comes after a sustained period when muni's were performing better than corporate bonds. The challenge with this is the biggest reason that these were performing better is because of the artificial stimulation states and cities were receiving from the Federal Government under the stimulus programs. These dollars helped the fiscally unstable states and cities - but now these funds are drying up. Without new dollars, states and local governments in fiscal trouble are far bigger credit risks.
Big Government has an excellent post, which includes charts and videos, providing a lesson on the Laffer Curve for Barack Obama and the other progressives who are promoting a class warfare based tax policy. This post demonstrates and reminds us that there is no linear connection between tax rates and tax revenues. If one doubles the tax rate on the highest levels of income, the tax revenues which will be received are not double the previous tax revenues.
Still with the link of politics and economics, there are a number of items discussing California's High Speed Rail initiative. I commented yesterday about the price estimate for the plan increasing from $33 billion to $117 billion (including a 20% contingency for additional cost overruns). Despite this huge increase in costs, and the fact that it will take a decade longer than first projected to complete, the editorial board at the progressive San Francisco Chronicle says, 'High Speed Rail Plan on Right Track'. Their rationale - that this plan is far cheaper and better for the environment than the alternative of adding highway capacity or airport capacity to cover the projected ridership between San Francisco and Los Angeles. They also note that the cost for a ticket between SF and LA would be $81 each way in 2011 dollars. But the real irony in the editorial is the warning that 'none of the rail authority's numbers should be treated as gospel'.
More commonplace are the concerns being raised about this program. In the latest plan offered by the CHSRA, the ridership projections are down. The Authority also is basing their plan on a great deal of wishful thinking. This program will need billions each year from now until 2022 when it projects it will turn a profit in the first year of carrying passengers. By 2035, the Authority is projected to be earning $2 billion in annual profits. But we still have to wonder about the source of the ridership - why will people use the bullet train? The plan says that with the continued increase in the population of California (but didn't the latest census show CA's population at a plateau?), road and air travel congestion will force people to go by rail. They cite that by 2030, more riders will board the bullet train in Merced, CA for the ride to LA than board Amtrak at today's busiest Amtrak station in it's network, Penn Station, New York City.
It's hard to determine which is more of a fantasy - the fact that Merced, CA will board more passengers in a day than Penn Station NYC or that the Federal Government will pony up the expected $55 billion in grants that the CHSRA is counting on or is it the entire financial plan? From the above link:
“There is absolutely no reason to have any confidence that it will only be $98.5 billion,” said Alain Enthoven, an emeritus management professor at Stanford and critic who lives near the train alignment. “It's only an estimate from people who have a lousy record.”
Wrapping up today's Quick Hits is Big Peace's World View for 6 November 2011. Among the items reported is the huge terror attack in Northern Nigeria committed by Boko Haram which killed 150 epople.