A US drone landed in Iran earlier this month.  The Iranians are claiming to have the drone in its entirety.

The Iranians recovered the crashed drone or managed to land it and now the US is asking for our spy plane back.

Hey, we’re spying on you, but would you mind sending us back our multi-million dollar piece of spy equipment?  We need it back so we can spy on you some more and then, eventually, invade you when the timing is better…

Hillary Clinton said “given Iran’s behavior to date, we do not expect them to comply”.

Interesting…

The US has bombed and killed 100k+ CIVILIANS in Iraq.  That might explain Iran’s distrust of the US and reluctance to hand over the drone.

Iran is in possession of a FOREIGN object that landed on their own soil and Hillary Clinton questions their behavior for refusing to give back a drone that was being used against them?

• What would be our reaction if China sent a drone over one of our cities?
• What if it crashed in a major city?  Would we return it?  What would the collective reaction be?
• Is Obama anymore tactful than Bush by asking for a piece of spy equipment back?
• Do Obama supporters really believe he is different on foreign policy than Bush?
• Is the expense of building, flying, crashing unmanned drones worth it?
• Why did Obama win the Nobel Peace Prize?

Free Lunch Program - Detroit

This government funded meal of pizza, cherry pie, fruit bar, lettuce and chocolate milk is supposed to help children whose parents cannot afford to pay for their meals.

Let’s take a closer look at what goes into this government funded meal.

• The iceberg lettuce was most likely grown on a megafarm, assisted with herbicides and pesticides.  Large scale factory farms lobby heavily to push small farms and “unregulated” farmers out of business via burdensome regulations or unnecessary licensing.

• The meat, milk and cheese in the lunch are all likely from dairy cows that are housed in a Concentrated Animal Feeding Operation and fed an unnatural diet of grains to make the animal gain weight as fast as possible.  The cow might potentially be fed with growth hormones.  The hormones, in one fashion or another, pass through the child’s body.

• The packaging, dessert wrapping, and utensils are all likely produced by a factory in China. There is a good chance the factory waste will not be disposed of properly. The revenues from the sale of these goods, in some fashion, support the Communist party, which routinely suppresses free speech, civil liberties and opinions critical of the government. The shipping voyage from China burned through finite resources such as oil and gas before reaching their final destination.

• The corn that produced the high fructose corn syrup in the flavored milk, “fruit bar” and cherry pie most likely came from federally subsidized agribusiness enterprises.  The cycle of farm subsidies, campaign contributions and re-electing those who approve farm subsidies allows the cycle of market distortion to continue.  Government chooses to support certain, favored industries which hurts other producers and industries that do not receive those same subsidies.

• The government worker handing out this meal will potentially collect overtime for summer work and, eventually, a pension, which the city receiving this assistance has probably not fully funded. The employee, most likely a union member, will vote for whichever candidate their union has financially supported with tax dollars from the community. The government employee handing out this meal cannot provide the care, attention, and atmosphere of a loving household.

• The child, eating this meal, begins the slow march towards diabetes, cancer and other ailments from eating a lifetime of nutrient-devoid, heavily processed food. Having a diet so high in sugar at such a young age will likely make them less likely to choose healthier food in the long run.

• The wasted food and packaging will finally head to a landfill where it will rot.  The annual cost to simply dispose of wasted food is around $1bn per year.

• To fund this program, the federal government had to borrow the money, tax its citizens or print the money. All monetary costs will most likely be paid by persons other than the beneficiaries of this program.

The producers of this meal will continue to fund the production of unhealthy, environmentally damaging food. They will continue to reinvest their revenues, in some fashion, to expand their enterprise and keep this cycle going.

The consumers of this meal, poor schoolchildren, will learn that free food is a right, provided for by others and not worth enjoying, savoring or preparing.

The parent, absolved of their most basic responsibilities as an adult human, is shielded from the feedback loop of sacrifice, self-reliance, and caring for their young.  They will not have to approach friends, family, a church, or a charitable organization to deal with their realities of being unwilling or unable to feed their own children.

Every decision has consequences, both explicit and implicit. All that matters in life are our decisions.

The consequences of supporting these priorities are profound. Constructive outcomes are totally avoided and destructive choices are encouraged.

The cycle continues.

Attempting to help “feed poor schoolchildren” is making our world poorer, in every possible sense of the word.

Senate Majority Leader Harry Reid plans to win final passage by Dec. 24 now that he secured the vote of his party’s last holdout, Nebraska Senator Ben Nelson.

He finally struck a deal that satisfied his demand to keep U.S. subsidies from being used for abortion and won an agreement for more aid to help Nebraska provide coverage for the uninsured.

Nelson said the language satisfied him, though it drew criticism from antiabortion groups. The Nebraska lawmaker also won another prize, with additional Medicaid costs to his state being absorbed by the federal government.

The agreement came late on Dec. 18 over a handshake.

“It was a pretty powerful moment,” said Reid, a Nevada Democrat. “That’s what this place is built on, handshakes legalized bribery.” (emphasis Inthon)

Upon closer inspection of its “accomplishments”, we discover our government is a transparent kickback machine; something which is manipulated and used to advance one’s career and line one’s pocket.

Governments disintegrate when citizens and lawmakers reject individual, familial and community responsibility and instead believe in the goodness of “free money” (printed up or borrowed, of course) and citizens and lawmakers feel no sense of self-ownership.

What hope remains for the future when there is no incentive to encourage individual responsibility and self-ownership?

Governments stop functioning and cannibalize themselves when politicians shift from representing an informed group of constituents to becoming professional raiders for their financial backers (unions, other politicians or corporate interests).

Takeaway: Have no faith in national politics or national politicians.  Self-reliance and community reliance are more robust and sustainable.

What I am seeing and hearing on the news — the reappointment of Bernanke — is too hard for me to bear. I cannot believe that we, in the 21st century, can accept living in such a society. I am not blaming Bernanke (he doesn’t even know he doesn’t understand how things work or that the tools he uses are not empirical); it is the Senators appointing him who are totally irresponsible — as if we promoted every doctor who caused malpractice. The world has never, never been as fragile. Economics make homeopath and alternative healers look empirical and scientific.  (emphasis by Inthon)

No news, no press, no Davos, no suit-and-tie fraudsters, no fools. I need to withdraw as immediately as possible into the Platonic quiet of my library, work on my next book, find solace in science and philosophy, and mull the next step. I will also structure trades with my Universa friends to bet on the next mistake by Bernanke, Summers, and Geithner. I will only (briefly) emerge from my hiatus when the publishers force me to do so upon the publication of the paperback edition of The Black Swan.

Bye,
Nassim

Bingo.

I would go one step further; rather than blaming the Senators, blame the voters who elected these Senators (all of whom are ignorant of the dangers of fiat currencies, central planning and central banking).

The U.S. has never been this fragile.  An economy reliant on consumption, cheap energy/commodities, easy credit, entitlements, corporate welfare and social welfare is not durable or sustainable.

The years ahead will require deleveraging on a large scale and small scale.  Those grounded with an awareness of our current unsustainability will be more apt to mentally weather the future slowdown/economic pain.

Takeaway: Borrowing money to spend on entitlements, wars and handouts cannot go on forever.  Prepare yourself for the consequences of our current financial immaturity.

Here are some gems just from the last week alone:

1. Perot Systems FrontRunning – ZeroHedge.
2. Blatant reinflation of housing bubble – Denninger.
3. Corruption at HUD – Karl Denninger.

The SEC was not able to catch a ponzi scheme even after Harry Markopolos delivered it to them on a silver platter. 

Paulson and Bernanke have been incredibly incorrect on their assessment of the health of the US economy.

Choose your sources of information/facts/news very carefully.  Stick with those that are honest enough to state their opinions openly and publish their predictions.

Read what you disagree with before drawing your conclusions.

There is a difference between loyalty and blind loyalty.  Blind loyalty to anything (religion, government, ideology, spouse) is deadly.

Takeaway:  Perpetual reliance on someone else’s seal of approval will rot your brain.  Complacency kills.

Amazing how Mr. Hope and Change is opposed to auditing the Fed and fully supports those who fed us a massive spoonful of corporate welfare.

Takeaway:  Governments are power structures which are abused/manipulated.  Giving up power/money to the government to fix our economy, environment, schools or anything is a mistake.  Audit the Fed.

I was delighted last night to read his speech to schoolchildren and see what a thoughtful, intelligent speech it was.  I encourage you to read it, no matter what your political leanings.

Highlights:

• Here in America, you write your own destiny. You make your own future.
• Maybe you’ll decide to stand up for kids who are being teased or bullied because of who they are or how they look, because you believe, like I do, that all kids deserve a safe environment to study and learn.
• Michael Jordan was cut from his high school basketball team, and he lost hundreds of games and missed thousands of shots during his career. But he once said, “I have failed over and over and over again in my life. And that is why I succeed.”
• Asking for help isn’t a sign of weakness, it’s a sign of strength. It shows you have the courage to admit when you don’t know something, and to learn something new.
• I expect you to put your best effort into everything you do.

It’s rare for a politician to speak of personal responsibility and any effort to broadcast this message, however diluted, should be welcomed.

Obama is a disaster with his economic advisers, but a masterful speech giver and motivator.  He understands the power of making a positive impression.

Neatness and presentation count in all aspects of life.  Be Prepared.

Takeaway:  Successful men aren’t symbols of your inferiority, they’re examples worth engaging.  Learn from everyone around you; even those you hate.

“Every man I meet is my superior in some way. In that, I learn of him.” — Ralph Waldo Emerson

Two “answers” which speak volumes of our leaders:

• At 1:12, Jon Stewart asks “Are we broke?”, Goolsbee replies “No”.

Bizarre.  It seems that a country running trillion dollar deficits and unable to function without borrowing money could be classified as “broke”, but not to our leaders.

• At 4:20, Goolsbee says:  “When you’re looking in the face of the next Great Depression that’s not the time to tighten the belt”

Indeed, when has there *ever* been a time when either party thought it would be a good idea to tighten the belt and stop borrowing?  Heaven forbid we curtail spending on military/”the children”/retirees/politically connected segments of the population.

Takeaway:  Leaders will do what it takes (lie, obfuscate, deceive) to accrue political capital.  It is not in their interest to be honest with us, especially when our borrowing/spending based economy relies on confidence that “everything will be ok”.  A system heading over a cliff due to instability cannot be solved with more of the same pathetic ideas (reliance on debt, policy tweaks) that got us here.

For those “economists” who’ve lately been singing his praises on CNBC, all I have to say is this…

It takes a special kind of system (government) to screw up this badly and still be resoundingly supported by its leader.

In his reappointment speech Obama also pledged support for the continued secrecy independence of the Federal Reserve.

How foolish of citizens to inquire where trillions of dollars are being spent… clearly we should trust the former bankers running the Federal Reserve that regulate the banking system. After all, they obviously know what they’re doing.

Instead of perpetuating the broken system financed by politically embedded financial organizations, Obama could have attempted any of the following:

• Raise awareness of the ghastly unaffordable pension schemes which will inevitably crumble
• Strictly enforce FASB mark to market accounting standards instead of allowing companies to use “judgment” to value their toxic assets
• Clamp down on High-Frequency Trading
• Require the FDIC to close and wind down insolvent banks before the government taxpayer-funded safety net has to be used
• Eliminate alphabet soup bailout programs which are forms of corporate welfare
• Demanded transparency for toxic assets which traveled from insolvent banks to taxpayers
• Slash parts of a budget (military, NASA, HUD, etc.) that are so bloated we must borrow billions from foreigners to stay afloat.

Would that severely correct the housing and stock markets? Yes, probably. Can we continue on our current path? No. Will we eventually face unbearable consequences for our decisions? Yes.

Ironically, neither Bernanke nor Obama nor either political party seem to care about the following message:

It is not the responsibility of the Federal Reserve–nor would it be appropriate–to protect lenders and investors from the consequences of their financial decisions. – Ben Bernanke

So, Obama reappointing the guy who didn’t see any of this coming, who bailed out the irresponsible, who continues to provide cover for banks in the hopes that things will return to normal still makes Obama the “man of the people”? Why aren’t those who voted for Obama clamoring that this Bush appointee is more of the same? Why do horrible decisions not matter when *their* party is in charge?

The reappointment of Bernanke does have a silver lining. All the people that bought into the hope proffered in eloquent speeches that government can provide jobs, clean energy, healthcare, education and other goodies will eventually learn a valuable lesson. The love affair Americans have with celebrity, good looks and good speeches and a lack of discourse/intellectual honesty will finally meet its match against a tidal wave of financial reality.

We are witnessing firsthand government selling Hope while funding Grift.

A generation will learn that our government system, like all systems which redistribute power and wealth, is one that is relentlessly gamed and manipulated for the benefit of those in charge.

Takeaway: Strip away the external validation that media/family/friends give to people and institutions and think for yourself.