Geithner May Leave After Debt Ceiling Passes, Chicago PMI Up, Corn Down, and Now Bachmann Wants to Audit the Fed?

It looks like Geithner is leaving Dodge before things start getting hectic:

(Bloomberg) Treasury Secretary Timothy F. Geithner has signaled to White House officials that he’s considering leaving the administration after President Barack Obama reaches an agreement with Congress to raise the national debt limit, according to three people familiar with the matter.

Geithner would be smart to leave soon.  We are on the fast track to a fiscal crisis in the next few years and he won't wanna be at the helm borrowing printed money and throwing it at federal programs no politician wants to cut.  He will still get his place in history along with Bernanke and Paulson for his role in the crisis.  Zerohedge held a survey for people to choose where they think Geithner may head after he leaves the Treasury:

Goldman Sachs

39% (177 votes)

JP Morgan

13% (57 votes)

Any bank that will have him

7% (30 votes)

Tax Consultancy

2% (11 votes)

McDonald's

6% (28 votes)

Any company that will have him

1% (5 votes)

Ive League Professor

10% (47 votes)

Any non-profit that will have him

2% (7 votes)

Extended Unemployment Claims

2% (10 votes)

Solitary Confinement

8% (36 votes)

Other

10% (44 votes)

Total votes: 452 

Goldman Sachs is probably where he will go, but solitary confinement would be nice to see.  As for my prediction, I think TurboTax will hire him....

QE2 came to an end today, and with it comes some rather strange economic data.  First, is the Chicago Purchasing Managers' Index coming in above expectations at 61.1:

June 30 (Reuters) - The Institute for Supply
Management-Chicago said on Thursday its index of Midwest
business activity rose in June to 61.1 from 56.6 in May.

Economists polled by Reuters had forecast a June figure of
54.0.
(seasonal adj)

June   May    April  March  Feb    Jan
NAPM-Chicago           61.1   56.6   67.6   70.6   71.2   68.8
Production             66.9   56.0   70.0   74.2   78.2   73.7
New Orders*            61.2   53.5   66.3   74.5   75.9   75.7
Order Backlog*         49.3   51.7   62.4   69.6   61.8   60.6
Inventories            46.9   61.6   53.5   60.5   60.2   54.5
Employment*            58.7   60.8   63.7   65.6   59.8   64.1
Supplier Deliveries*   64.8   63.8   68.4   62.7   64.1   59.8
Prices Paid            70.5   78.6   81.8   83.4   81.2   81.7
The * indicates components used to calculate index.

A new report from the USDA has pushed corn futures down rather significantly:

WASHINGTON/CHICAGO, June 30 (Reuters) - The U.S. corn supply is far larger than thought and a bumper crop could be on the way, the Agriculture Department said on Thursday in a report that shocked traders and shoved grain markets sharply lower.

Farmers defied expectations by planting significantly more corn acres despite rain and floods, and sky-high prices curbed demand which left June 1 stockpiles 11 percent larger than traders had predicted.

I spent a lot of the afternoon watching CNBC and all everyone was talking about was QE2's demise and how the commodity bull market is over.  To some extent they are gonna be right, but they fail to take into account the excess reserves which may be entering the system fairly soon.  God knows where we are going from here, but things are about to get interesting.  Jim Rogers sure thinks so, here is the video of him warning on the upcoming farmer shortage:

I also had the pleasure of watching Mr. I Caused the Housing Bubble himself Alan Greenspan actually complain about QE1 and QE2 ineffectiveness.  Here is part of the transcript from the interview:

NOT ONLY QE-2 BUT QE-1 HAS NOT BEEN SPENT. A TRILLION AND A HALF DOLLARS, WHICH IS EXCESS RESERVES HAVE, TO MY ESTIMATION, NOT BEEN SPENT. THE WAY YOU CAN TELL THAT IS THAT THE MONEY MULTIPLIER, A RATIO OF THE EXPANSION OF CREDIT IN THE COMMERCIAL BANKS AND THE MONETARY BASE, WHICH REFLECTS THE EXPANSION OF THE FEDERAL RESERVE BALANCE SHEET, THAT HAS CHANGED NOT AT ALL.

Yes, if only we had more credit expansion, then perhaps we can create another bubble to get us out of stagnation.  Greenspan is pretending as if the housing bubble never happened as usual.  Why this man still shows his face in public is beyond me.

Well here is a nice surprise, Neo-Con Queen Michelle Bachmann is actually in favor of Ron Paul's Fed audit bill.  Well I never!

Too bad she screws up on "QE3" unless she is referring to excess reserves, which I highly doubt.  I almost hit my hit on the table listening to her try and elucidate economic theory to the crowd.  It wasn't exactly bad, just overly simple.  Maybe I am just biased for Ron Paul, but its nice to see her follow in Newt's footsteps.


I will end with a couple of nice Mark J. Perry graphs.  First is for us Pennsylvanians:

Gov. Corbett should be praised for his resistance to taxing such a prosperous industry, even when he faced opposition from his own party.
Next is that horrible, enslaving business known as Wal-Mart that forces its employees to work in dangerous conditions.  Oh wait:

Company	OSHA Enforcement Inspections, 2006-2011	Employees	Inspections per 100,000 Employees
Ford	389	164,000	237.2
Home Depot	406	189,390	214.4
Lowes	247	161,000	153.4
Costco	99	82,000	120.7
Whole Foods	26	45,300	57.4
Target	203	355,000	57.2
McDonald's	69	400,000	17.3
Walmart	215	2,100,000 (1,400,000 U.S. only)	10.2 (or 15.4 U.S. only)

Conclusion: Wal-Mart has a much better safety record than Target, Home Depot, Lowes, McDonald's, Whole Foods, Costco and Ford, when measured by inspections per employee, and therefore gets the Gold Medal for employee safety.

Update: Even after adjusting for Walmart's U.S. employees only (1.4 million), and not adjusting any of the other companies for U.S. employees only, Walmart still comes out ahead with the best safety record per 100,000 employees.

Meredith Whitney Predicting Municipal Defaults After July 1st, Greece Passes Austerity Measures (Again), and Lindsey Lohan Warning on Inflation?

Meredith Whitney is back with more predictions of municipal defaults after July 1st when many state budgets are due:

"What you'll see now is as the states are submitting final budgets, you'll see the real pain at the municipal level start happening July 1. That will intensify and that's where you'll see the fallout."

"When I come up with numbers of the defaults, I can think of dozens of large ones off the top of my head..."

I can think of one right now too, the city I have the pleasure of working in known as Harrisburg, PA. With stimulus money running dry, I guess we will see what happens in a few days as more and more states continue to pass their budgets.

Well, with many states adopting austerity measures amid heightened costs of state workers, services, and falling tax revenue, the trend continues over to Greece today as the parliament there approved the hugely unpopular austerity measures that guarantee them another bailout.  I can literally hear the can being in my head right now.  Of course anyone with a brain knows that the bailout really isn't for the people but for the banks exposed to Greek debt.  So is this kind of reaction really that surprising?

(Reuters) - Greek protesters hurled projectiles at a ruling party lawmaker outside parliament on Wednesday after he backtracked and voted in favour of austerity measures.
A group of around 20 demonstrators threw bottles and a chair at PASOK deputy Alexandros Athanasiadis as he was escorted by five policemen after leaving the parliament building following a vote which approved the unpopular austerity law.

Yesterday, Charles Hugh Smith of Of Two Minds had a great post on Why Greece is Kleptocracy:

Here's the real dynamic in Greece: The Kleptocracy--broadly, the political and financial Elites of the nation--saw a stupendous opportunity to embezzle hundreds of billions of euros from greed-blinded European banks at super-low rates of interest.
Being kleptocrats, they sniffed out the basics of the bezzle right away, and have been playing it ever since: we're not paying any of these loans back, so go get the money from the European Central Bank (ECB) and the German taxpayers, or declare bankruptcy. Your choice.
The Greek kleptocrats knew all along that the German, Dutch, French and Finnish taxpayers were easy marks, just as they knew the European Union Power Elites would fall all over themselves to "save the euro" which was the centerpiece of their "one Europe" strategy of domination.

Today, Smith takes on the America in the The U.S. is a Kleptocracy, Too:

The U.S. is truly a kleptocracy because its political leadership actually has no interest in limiting the banking/financial cartel. When questioned why their "reforms" are so toothless, legislators wring their hands and bleat, "Honest, I wanted to limit the banks but they're too powerful." Spoken like a true kleptocrat.
2. Our stock markets are dominated by insiders. It is estimated that some 70% of all shares traded are exchanged in private "dark pools" operated by the TBTF banks and Wall Street, and the majority of the remaining 30% of publicly traded shares are traded by high-frequency trading machines that hold the shares for a few seconds, or however long is needed to skim the advantages offered by proximity to the exchange and speed.
If that's your idea of an "open market," then you're the ideal citizen for a kleptocracy.

Though I am against the idea of politicians "limiting" the banking and financial cartel, I am certainly not in favor of them being helped out either.  The solution isn't a reimplementation of Glass-Steagal but the abolishment of the banks' biggest welfare supplier, the Federal Reserve.

Looks like Lindsey Lohan of all people agrees in a tweet:

Have you guys seen food and gas prices lately? U.S. $ will soon be worthless if the Fed keeps printing money! http://spn.tw/t1exbE #adless than a minute ago via Sponsored Tweets Favorite Retweet ReplyLindsay Lohan
lindsaylohan

Apparently the National Inflation Association paid Lohan to put this up, which was genius on their part.

I will end with a load of what Barry Ritholtz calls "chart porn:"
First is this awesomely large chart of the 2008 financial crisis and all the key players:

Next up is gasoline taxes by states:

Here is the share of the U.S. population by age:

Looks like the baby boomers will be sucking my generation dry soon enough.  This gives me a bit of hope though:

I guess all that greed and excess of the last century really wasn't so bad after all.  Let's hope the 21st is even better, at least for my generation's sake.

Cool Economic Indicators Dashboard, Head of Afghanistan Central Bank Flees to U.S., and the Average Age of U.S. Farmers is 58?

Not too much economic news today.  A new Case Shiller report is indicating that home prices fell less than expected 3 months ago:

Some may regard this as good news (its really a sign of the times that some regard this as good news), I would say that it shows that Bernanke's efforts are trying desperately to push home prices up but are failing miserably and that prices still need to fall.

Anyway, Russel investments has this cool economic indicator dashboard out this interactive, click below to mess with it.

You can see how much mortgages delinquencies are above the average.  And is it me or does the typical range for Core CPI of 1% to 6.8% seem high?

The head of the Central Bank of Afghanistan has fled to the U.S. the Wall Street Journal is reporting:

KABUL—Afghanistan's central bank governor has left for the U.S. and isn't expected to return because he fears for his safety after investigating fraud allegations at the country's largest lender, according to two Western officials.

Bank Governor Abdul Qadir Fitrat left Kabul for the U.S. about 10 days ago, one of these people said. Last year Mr. Fitrat opened an investigation into Kabul Bank, which nearly collapsed amid public allegations that its owners used it to make favorable loans to themselves and politically connected associates.

Since we are nation building over there, maybe Bernanke could give Fitrat's replacement some tips on how to throw $600 billion at something and get barely nothing in return.  Perhaps our military could give'em some advice on how to waste money over there:

Anderson calculates more than 1,000 troops have died in fuel convoys, which remain prime targets for attack. Free-standing tents equipped with air conditioners in 125-degree heat require a lot of fuel. Anderson says by making those structures more efficient, the military could save lives and dollars.
Still, his $20.2 billion figure raises stark questions about the ongoing war in Afghanistan. In the wake of President Obama's announcement this week that 33,000 American troops will soon return home, how much money does the U.S. stand to save?
Dollars And Cents
The 33,000 troops who will return home by the end of next year match the numbers sent to Afghanistan in 2010, at a cost of about $30 billion. That comes out to about $1 million a soldier.

$20.2 billion for air conditioning?  Are you kidding?  Keep an eye out for some Congressman to invoke the images of dying soldiers fighting for our freedom to throw some more money away over there.  The real solution = bring them all home.

Check out this from investing expert Jim Rogers:

I do not see any major new sources of supply. We know that the known reserves of oil continue to decline worldwide. We know that there are huge shortages of agriculture developing. I don’t know if you knew this, but the average age of farmers in America is 58 years old. In 10 years, they’re going to be 68, if they’re still alive.

Throughout the world, we have serious, maybe even catastrophic developments in agriculture, which is going to hurt us all over the next couple of decades. There will be setbacks and corrections along the way, but we have serious problems facing us in nearly all commodity areas.

Rogers may be right, we could be in for an agricultural crisis and we will see setbacks, but I am confident we can adjust and carry on.  We have done a pretty good job of making food pretty abundant in this country.  More land will have to be dedicated to farming to supply emerging markets, but I don't see this as being impossible and leading to massive famine.  And I am not even gonna touch on unforeseen technological improvements or increased demand for heavy duty farming equipment and vehicles.  The average age of farmers may be going up, but as agricultural continues to be a profitable industry, more people will move into it.  This is especially true as economic malaise continues and many service jobs continue to be outsources or irrelevant.  In fact, one can see an expansion in the agricultural field as a good thing because it hardly requires a college education, maybe not even a high school diploma.  The young won't have to become debt slaves to have a decent job. Americans may not like it at first, but a grumbling stomach may not give them a choice.  John Stewart is wrong, just because the U.S. as a country has progressed economically as a phenomenal rate, that doesn't mean that we somehow have earned the right to never go back.

Marc Faber Likes Keynesianism? Economy Weaking in U.S. (and World), Fed Still Buying Treasuries, and Missing Money in Iraq as High as $18 Billion

Great interview of Marc Faber by Anthony Wile of The Daily Bell came out yesterday.  In it, Faber makes his usual predictions of coming financial calamity through his contrarian and witty style and but actually slightly endorses a not-so important part of Keynesian economic theory:

Daily Bell: Would you say you are an Austrian when it comes to economics?
Marc Faber: Yes, but I think we can't be overly dogmatic in economics because certain things may work for one system and other things may not work in another system and so forth. Economics is a very complex system and is essentially human life and the behavior of humans. So to build one theory around it is probably wrong. Sure I am leaning more to the Austrian school, particularly when it comes to debt cycles. But I have sympathy for the Keynesian approach if, and this is a big question, IF it is implemented properly.
In other words, the business cycles will lead to excursions of prosperity and during these excursions into prosperity the system should build up reserves. Then when the excursion in depressions occurs below the trend line, use these reserves. But the problem with Keynesian economics has been that in the excursions into depression the reserves were always used but were never accumulated in the periods of prosperity, and so you build up larger and larger government debt and print more money; that is the problem. It's the problem of democracy.

Here is Faber on one world government:

Daily Bell: Is there a cartel of wealthy banking families that runs the world? Are they located in the City of London? Do they by any chance seek one world government?
Marc Faber: I don't know. I think there are some very important banking dynasties for sure. People sometimes refer to them as the Rothschilds and that they have benefitted from wars – so I am not sure I would want a one-world government. When I compare my life today to the life I had in the 50s and 60s, we have much less freedom. Everything is regulated as the governments have become like a cancer; they keep expanding and regulating and dictating everything. In my opinion, this creates not a very favorable environment in the Western world.

And of course the mention of hypefinflation:

Daily Bell: You said in 2007 there was going to be a crash, but you also said US equities were only moderately overvalued. Would you tell us more about that?
Marc Faber: The market based on price earnings was not incredibly over valued. What concerned me was the over-valuation in real estate and in financial stocks. The overall market wasn't selling at 80 times earnings, like Japan in '89 or the NASDAQ in March 2000. From that point of view, there wasn't a tremendous over-valuation. What was happening in 2008 was that there was an earnings collapse in the financial sector.
The financial sector accounted at the peak in 2007 for over 40% of S&P earnings and obviously the S&P earnings collapsed. 2008 was not really a financial crisis and we have come out of it. In 2007, there wasn't a huge over-valuation, but there was a concentration of money in the financial sector.
Daily Bell: Do you still expect hyperinflation?
Marc Faber: In my view, the debt level, especially in the US, if we include the unfunded liabilities of Medicare, Medicaid, Social Security and these entitlement programs, is beyond repair. And this will necessitate printing more money. Also, in my view, there is no real political will to address the issues, because who ever would cut entitlements, will not be re-elected. So we have a tyranny of the masses.

The whole interview is worth reading and is highly recommended, much like every interview Marc Faber does.  I would even say that this is the case even if you disagree with him, which I think is difficult considering his track record.

The general consensus around the financial blogosphere is that the U.S. economy is slowing down:

(Bloomberg) Consumer spending unexpectedly stagnated in May as employment prospects dimmed and rising inflation caused Americans to cut back.
Purchases were little changed, the weakest outcome since June 2010, after a revised 0.3 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News called for a 0.1 percent gain. Prices excluding food and energy rose more than forecast.

And from Yahoo! Finance:

Economists note that the slowdown in spending was partly the result of temporary factors.
Auto purchases fell sharply in May. That lowered spending on long-lasting manufactured goods 1.5 percent, the steepest drop since September 2009. Dealers had limited supplies of many cars because of a parts shortage stemming from the crisis in Japan. U.S. factories are expected to begin producing more cars once Japan's factories resume more normal operations.
Gas prices peaked in early May at a national average of nearly $4 per gallon. Since then, they have dropped to a national average of $3.57 per gallon, according to AAA's daily fuel gauge. Cheaper gas will likely allow consumers to spend more freely this summer and fall. That should boost growth in the second half of the year.

Like always, Mish puts the notion that the economy may recover faster in the second half of the year to rest:

Are economists ever pessimistic? The idea that growth will pick up because of falling gasoline prices is complete silliness. Gasoline prices are falling because growth is slowing.

Moreover, in about 2 months you will be able to toss that "auto parts shortage" theory in the ashcan where it belongs. 

Economic growth isn't slowing in just the U.S. though, see Spain and China:

(Bloomberg) Spanish banks have 50 billion euros ($70.7 billion) in unrecognised problematic real estate assets, El Confidencial reported, citing a report by the Boston Consulting Group.
The consulting group estimates that Spanish banks need between 20 billion euros and 30 billion euros in additional capital and that Spain’s bank rescue fund, known as the FROB, could end up taking over 20 percent of the banking industry, El Confidencial added.

Hiding bad real estate assets?  Sound familiar?  China has a similar story:

China’s first audit of local government debt found liabilities of 10.7 trillion yuan ($1.7 trillion) at the end of last year and warned of repayment risks, including a reliance on land sales.
Financing vehicles set up by regional authorities already had more than 8 billion yuan in overdue debt, while more than 5 percent of such companies used new bank borrowing to repay loans, according to the audit, posted on the National Audit Office’s website and submitted to China’s cabinet.

So what's the solution to a slowing economy as QE2 is coming to an end?  Print more money of course!

The Federal Reserve will remain the biggest buyer of Treasuries, even after the second round of quantitative easing ends this week, as the central bank uses its $2.86 trillion balance sheet to keep interest rates low.
While the $600 billion purchase program, known as QE2, winds down, the Fed said June 22 that it will continue to buy Treasuries with proceeds from the maturing debt it currently owns. That could mean purchases of as much as $300 billion of government debt over the next 12 months without adding money to the financial system.

Inflationary expectations continue as Mihir P. Worah from PIMCO jumps in the ring:

• ​We expect commodity prices to be generally rising going forward, though with volatility and differentiation among commodities.
• Emerging markets going through a particularly commodity and energy intensive phase of growth may affect what developed-world consumers pay for commodities.
• Currencies are another factor. If developed-world policymakers attempt to make their economies more competitive via a cheaper currency, that could lead to higher inflation for those that are net importers.

 And how could I talk about the slowing global economy without mentioning Greece?  Finally even some European leaders are starting to doubt the garbage coming out of ECB Prez Jean Claude Trichet:

Greek politicians will vote on a radical €28.4bn (£25.2bn) austerity package in the coming days that they must pass if the country is to receive the vital fifth tranche of a €110bn bail-out agreed last year. The outcome is expected to go down to the wire as the ruling party's slim majority is pushed to the limit by the opposition's refusal to support the deal, a wave of national strikes, and another round of public protests.

Werner Faymann, the Austrian Chancellor, said on Sunday he "can't rule out" a Greek default and Wolfgang Schaeuble, the German finance minister, revealed that Europe is preparing "for the worst".

"We are doing everything we can to prevent a perilous escalation for Europe but must at the same time be prepared for the worst," Mr Schaeuble said. "If things turn out differently than everyone expects that would of course be a major breakdown. But even in 2008, the world was able to take coordinated action agai-nst a global and unpredictable financial market crisis."

As Greece starts trying to pass new austerity measures, here is what the current makeup of their parliament looks like:

Call me naive, but I was seriously surprised at how many members of the "communist" party are in Greece's parliament.  Somehow a degree of the sympathy I had for those protesting the austerity measures has diminished a bit.

Update- Glenn Beck finally praising Ron Paul, still not sure if it's a good thing:

Friedman Almost Makes Sense on Afghanistan, 95 Year Old Woman Forced by TSA to Remove Adult Diaper, China Ready to Lend to Eurozone, and Children on Medicaid Waiting Longer

Once in a blue moon, I find myself in (partial) agreement with Thomas Friedman.  His New York Times column today outlines the lessening influence the U.S. is having in the Middle East and the continuing fruitless endeavor we are waging on nation building:

When did the Middle East make us happiest in the last few decades? That’s easy: 1) when Anwar el-Sadat made his breakthrough visit to Jerusalem; 2) when the Sunni uprising in Iraq against the pro-Al Qaeda forces turned the tide there; 3) when the Taliban regime in Afghanistan was routed in 2001 by Afghan rebels, backed only by U.S. air power and a few hundred U.S. special forces; 4) when Israelis and Palestinians drafted a secret peace accord in Oslo; 5) when the Green Revolution happened in Iran; 6) when the Cedar Revolution erupted in Lebanon; 7) when the democracy uprisings in Tunisia, Libya, Yemen, Syria and Egypt emerged; 8) when Israel unilaterally withdrew from South Lebanon and Gaza.

And what do they all have in common? America had nothing to do with almost all of them. They were self-propelled by the people themselves; we did not see them coming; and most of them didn’t cost us a dime.

As for how the cold war ended, that’s easy. It ended when the two governments — the Soviet Union and Maoist China, which provided the funding and ideology propelling our enemies — collapsed. China had a peaceful internal transformation from Maoist Communism to capitalism, and the Soviet Union had a messy move from Marxism to capitalism. End of cold war.
Since then, we have increasingly found ourselves at war with another global movement: radical jihadist Islam. It is fed by money and ideology coming out of Saudi Arabia, Pakistan and Iran. The attack of 9/11 was basically a joint operation by Saudi and Pakistani nationals. The Marine and American Embassy bombings in Lebanon were believed to have been the work of Iranian agents. Yet we invaded Afghanistan and Iraq, because Saudi Arabia had oil, Pakistan had nukes and Iran was too big. We hoped that this war-by-bank-shot would lead to changes in all three countries. So far, it has not.

Friedman still advocates for partial intervention to direct the Middle East to a society he agrees with, but its great to see him pointing out all the mistakes we have made so far on conducting the War on Terror.

Well it was only a matter of time before everyone's favorite crotch grabbers (the TSA) moved on from 9 years olds to 90 year olds:

A woman has filed a complaint with federal authorities over how her elderly mother was treated at Northwest Florida Regional Airport last weekend.

Jean Weber of Destin filed a complaint with the Department of Homeland Security after her 95-year-old mother was detained and extensively searched last Saturday while trying to board a plane to fly to Michigan to be with family members during the final stages of her battle with leukemia.

Her mother, who was in a wheelchair, was asked to remove an adult diaper in order to complete a pat-down search.

Either searches are really starting to go overboard or one TSA guard gets his rocks off on old women.  I sure hope the TSA has a good background checking procedure.  And yet some wonder why airlines continue to see slagging demand.

So now China has been brought into the idiocy know as lending to the EuroZone:

Jun 26 (Reuters) - Chinese Premier Wen Jiabao said on Sunday he had no intention of pursuing a trade surplus and that he wanted balanced, sustainable trade growth for his country.
He was speaking during a tour of MG Motor's Longbridge factory in Birmingham, central England, during a three-day trade and political mission to Britain.
"China has no intention to pursue a trade surplus. What we want is to have balanced and sustainable growth of trade," he told the BBC through an interpreter.
He also said China would lend European countries experiencing trouble borrowing, just as it announced it would do for Hungary earlier this week.

It's hard to see what China's motivation for doing this is.  I suppose they wanna continue financing EuroZone debt so that they can continue selling cheap goods to those countries much like they have done to the U.S. for the past few decades.

For all the Paul Krugmans out there who continue to call for universal health care and deny the unintended consequence of increased wait time and shortages that develop in countries that have adopted said health care, see this from NYT:

Children with Medicaid are far more likely than those with private insurance to be turned away by medical specialists or be made to wait more than a month for an appointment, even for serious medical problems, a new study finds.

Lower payments by Medicaid, delays in paying and red tape are largely to blame, researchers say.
The study, with findings that match anecdotal reports from other parts of the country, is one of only a few efforts to measure access to health care among people with Medicaid. Nationwide, those patients are caught between states’ threats to cut Medicaid payments and the Obama administration’s plans to use the program to cover more and more people as part of its health care law.

Even though Ron Paul continues to stay strong in the presidential race by beating his fundraising goal of $3 million by the end of June, the mainstream media continues to disregard him and have already crowned Michelle Bachmann and Rick Perry as potential Tea Party favorites while Mitt Romney continues to flash those empty, Wall Street backed smiles.  But get this, Neo-Con Queen Bachmann might actually understand economics:

During an interview on CBS’s “Face the Nation” Bachmann said she is considering elimination of the minimum wage.

Maybe she really does read Mises on the beach.

Sandeep Jaitly on Austrian Economics, Ron Paul on Auditing Gold Reserves, and Rochester NY Police Out of Control.

Check out this awesome Max Keiser interview of Sandeep Jaitly on Austrian economics:

Some excerpts:

"all other forms of economics, classical, neoclassical economics, ascribe value to something else other than the human mind."

"all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being."

One Zerohedge poster was kind enough to point out this fantastic Mises quote:

“Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man’s human existence” – Ludwig von Mises

The interview is seriously great.
More information is coming out on the Congressional hearing Ron Paul chaired Thursday on auditing the Treasury's gold reserves:

WASHINGTON (CNNMoney) -- With the price of gold at record highs, presidential candidate Rep. Ron Paul wants to make sure the U.S. gold bars at Fort Knox are really there.
Paul called a congressional hearing Thursday to grill federal officials about his bill to audit and inventory all of the gold reserves at Fort Knox, Ky., West Point, N.Y., and Denver, even though Treasury officials insist that the gold is audited annually and is all there.
During the hearing, Paul suggested that the Federal Reserve of New York, which has 5% of the U.S. gold reserves, has the ability to secretly sell or swap gold with other countries without anyone knowing.
"The Fed is pretty secret, you know," said Paul, who leans Libertarian. "Congress doesn't have much say on what's going on over there. They do a lot of hiding."

I would like to know if the gold reserves are there too but it may end up costing a lot to do the full audit.  And if the audit were to occur (which it won't), it won't be financed by cutting spending on something else.

It's always entertaining and infuriating to see videos of police corruption, stupidity, and arrests for idiotic laws.  Check out these two from Rochester, New York.  First is arresting a woman for videotaping a traffic stop on her own front yard:

And here is the police handing out fines for people's cars parked further than 12 inches from the curb:

Clearly people who are parked too far away from the curb poses a significant risk to public safety.  You gotta wonder who came up with a law fining people from parking more than a foot from the curb.  It's micromanaging society to the smallest detail.

I will end with some weekend chart porn.  Here is a chart on the world's highest net worth individuals:

This one is great:

Great Interview with Dr. Edwin Vieira, Interactive Map of Job Gains & Losses, Coke Raising Prices, And Cali Lawmakers Smartest in the Country?

Fascinating interview on the constitutionality of the dollar and the coming financial crisis with Dr. Edwin Vieira who holds four degrees from Harvard: A.B. (Harvard College), A.M. and Ph.D. (Harvard Graduate School of Arts and Sciences), and J.D. (Harvard Law School) via the Casey Report.  The interview was originally done in early June and was exclusive to the Casey Report but they thankfully decided to make it public.  One highlight:

DAVID: So it’s hard to draw any other conclusion than that the government is operating in a complete fantasy. That everything is completely off the rails.  Then you look at the judiciary and some of the things they have approved and looked the other way on, and it sure begins to look like fascism to me.
You and I see it, a lot of our readers look at it, but most people are so passive about it. Everybody is so quiet, and there is nobody making any waves – is that because it's too late? Before you answer, I'll give you just a quick anecdote that I think makes the point.
I was at a party not too long ago with a bunch of young people, and we were talking about some topic that was mildly controversial, and one of them said, "I’d love to look up more about that online, but I don’t want it to be part of my permanent search record.” So, the youth of America already have it in their heads that anything they do online is being monitored and will be in their search records forever and accessible to the government.
Back to my question, have we reached that stage where people are quietly huddling behind the doors of their houses, trying to keep a low profile so the government will leave them alone?
EDWIN: Given the current state of things, I'm sure there are a lot of people deliberately deciding to adopt a low profile, politically or socially. A lot of this has to do not so much with politics but what your neighbors or your coworkers will say about you, right? If you tell them something that is actually happening in the world, you will be labeled a conspiracy theorist; they’ll look at you as if you're crazy.
But what about the activists? At a certain stage, the great mass of people will look around for leadership figures. When the economic crisis comes, they’re going to want someone to tell them how to get out of it. They’re not going to know the answers themselves. The question is, will there be activists, leadership figures, proposing the right solutions – and how soon will they come along?
That's why I look at this Tea Party Movement, using that in a generic sense, an indication of the ground swell of discontent that's out there. There's a huge amount of that, but at this point it's not particularly directed. Of course the establishment is trying to co-opt it, with Gingrich and others trying to claim that they’re leadership figures in this movement, and that deflects it from the direction in which it ought to go.
By contrast, you do have the Ron Paul-type movement. I mean, look at Ron Paul as an example. This is not a charismatic figure. He's a very diffident individual, a very shy individual, not someone that you could possibly imagine as a man on a white horse in a political sense. He certainly has had very little real effect in Congress. He's been the gadfly, he's been the critic, but he hasn’t put in any legislation of consequence that has been passed. He's made a lot of noise about the Federal Reserve, but he's constantly being blocked by the real power structure in Congress in terms of getting anything done there. Yet nevertheless a whole political movement has essentially crystallized around him.
I look at him as the surfer on the wave. The surfer is not the important thing, the wave is the important thing. The surfer would be nowhere without the wave. That wave is out there, and it's just waiting for the right surfer. He's the first one that's come along, but there will be others, perhaps some state governor who is actually competent, and he looks at this monetary system and he says, "To hell with this. Here's what we have to do," and they put in that alternative currency statute, the proper one, not the kind of statement that was made in Utah, but a proper functioning one. In which case he will become the next president of the United States, and then we will see what will happen.

Vieira goes into detail on the monetary evolution in the U.S. to the creation of the Fed and cutting of the gold standard by Nixon in 71'.  The whole interview is rather long but is highly recommended.

Mish has part 2 of an interactive map on job sector gains and losses from 2008 to 2011.  Have fun:

Powered by Tableau

Some more charts:

Jobs Gained or Lost Since Dec 31, 2007
Industry	2008	2009	2010	2011
Health Care	461,860	792,679	1,023,907	1,278,794
Finance & Insurance	323,802	629,082	490,384	444,530
Mining & Oil	195,813	345,116	337,917	422,752
Educational Services	121,337	195,899	236,766	295,498
Government	358,591	451,680	398,853	90,393
Arts & Entertainment	92,418	108,263	77,181	65,855
Management	60,985	25,371	16,323	26,615
Utilities	13,019	20,773	13,771	11,275
Professional	203,493	-107,607	-164,853	-39,124
Agriculture & Forestry	-18,909	-26,033	-33,643	-71,928
Other Services	-30,456	-221,109	-246,875	-82,177
Food & Lodging	71,681	-242,538	-273,658	-145,099
Information	-30,863	-203,185	-299,866	-331,269
Real Estate	-76,068	-232,452	-335,391	-359,874
Transportation	-107,538	-501,697	-559,415	-486,346
Admin & Support	-389,951	-1,226,173	-1,097,484	-774,404
Retail & Wholesale	-428,934	-1,759,253	-1,977,146	-1,854,109
Manufacturing	-478,023	-2,072,959	-2,415,322	-2,290,390
Construction	-612,184	-1,955,402	-2,468,184	-2,519,538
Totals	-269,927	-5,979,545	-7,276,735	-6,318,546

Jobs Gained or Lost vs. Year Ago
Industry	2008	2009	2010	2011
Totals	-269,927	-5,709,618	-1,297,190	958,189
Admin & Support	-389,951	-836,222	128,689	323,080
Health Care	461,860	330,819	231,228	254,887
Other Services	-30,456	-190,653	-25,766	164,698
Food & Lodging	71,681	-314,219	-31,120	128,559
Professional	203,493	-311,100	-57,246	125,729
Manufacturing	-478,023	-1,594,936	-342,363	124,932
Retail & Wholesale	-428,934	-1,330,319	-217,893	123,037
Mining & Oil	195,813	149,303	-7,199	84,835
Transportation	-107,538	-394,159	-57,718	73,069
Educational Services	121,337	74,562	40,867	58,732
Management	60,985	-35,614	-9,048	10,292
Utilities	13,019	7,754	-7,002	-2,496
Arts & Entertainment	92,418	15,845	-31,082	-11,326
Real Estate	-76,068	-156,384	-102,939	-24,483
Information	-30,863	-172,322	-96,681	-31,403
Agriculture & Forestry	-18,909	-7,124	-7,610	-38,285
Finance & Insurance	323,802	305,280	-138,698	-45,854
Construction	-612,184	-1,343,218	-512,782	-51,354
Government	358,591	93,089	-52,827	-308,460

Since I am on the topic of interactive graphs, check these links out via Barry Ritholtz at The Big Picture:

 The interactive graphs actually come from the Fed Bank of Minneapolis.  I never noticed this before, but Ritholtz has a hilarious tag-line for commentors:

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

 Bad news for soda lovers next month as Coca-Cola plans on raising prices.  Via Reuters:

(Reuters) - Coca-Cola Co plans to raise prices on its soft drinks by 3 percent to 4 percent in July, in addition to a 2 percent increase taken earlier this year, a company spokesman said on Friday.

When it comes to a college education, most people are under the impression that a Bachelor's Degree is a sign of intelligence.  Well California definitely proves this wrong, via Cal Watchdog:

 California legislators can’t seem to get a balanced budget passed or fix the state government’s ongoing problems. They are known for passing ridiculous legislation and taxing things you didn’t even know existed, so you would assume they aren’t the sharpest tools in the shed.  Well, interestingly enough, they are some of the most educated legislators in the entire United States.
The Chronicle of Higher Education recently conducted a study finding that California has the most educated Legislature with most legislators earning a bachelor’s degree or higher.  If California’s Legislature is so intelligent and educated, why is the Capitol and the state economy in such bad shape?
Ironically, the 15 states that had the “least educated” legislatures consistently trump the top 15 “most educated” legislatures in six different economic metrics. Comparing the top 15 to the bottom 15 in unemployment rates, employment growth rates, economic freedom, fiscal freedom, economic performance and state economic outlook ratings, the “least educated” outperform the ”most educated” group every time.

The data once again proves that holding a bachelor’s degree does not translate into implementation of sound economic policies.  Despite having an “educated” Legislature, only six of the 100 declared majors of those elected to the California Legislature have a degree in Economics.
Finally, this should speak volumes to the collectivists and Progressive era dreamers who believe intellectuals can accurately plan a society.  California has all of these “educated” legislators and yet they are providing one of the the worst economically sound societies in America right now.   As Friedrich Hayek wrote,  “To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge in fact we do not possess, is likely to make us do much harm.”

You mean increased taxation, regulatory hurdles, and constant promotion of "green" industries aren't key to economic growth?  That's what college teaches after all right?  I should also mention that the woman who wrote the post is pretty awesome...I hope she reads this.

Update- Hilarious music video

Living in the Political Age of Ron Paul, American Thinker Article, and Matt Taibbi has Michele Bachmann's Number

After watching this, I truly believe we are living in the age of Ron Paul.  Seriously, who would have thought someone like GOP establishment himself Newt Gingrich would be attacking the Fed as a CAMPAIGN AD!

He doesn't go all out and call for abolishment, but I will take what I can get.  Still, it's a big sign that Ron Paul's influence really is growing.  Here are some more videos of the man:

And the man just doesn't stop.  He chaired this committee meeting today (but no big news from it of course):

Domestic Monetary Policy and Technology Subcommittee Chairman Ron Paul is currently holding a hearing on legislation calling for a full audit of U.S. gold reserves. H.R. 1495, the “Gold Reserve Transparency Act of 2011,” calls for an audit by the Treasury that gives a full and thorough accounting of the U.S. government’s gold reserves, requiring an inventory and assay of the gold reserves. The Treasury’s audit is subject to independent review by the Government Accountability Office, allowing them access to any pertinent records or locations, including Fort Knox. "The Treasury Department has been less than transparent with the results of its gold audits,” Paul stated.  “It is asking the American people to trust that all the gold is there, while not allowing site visits and not publishing all the data it holds on its audits and assays.  Since most of this gold was originally seized from the American people in the 1930s, they deserve more transparency than a handful of financial statements." 

The hearing will discuss recent audits of U.S. gold reserves; challenges to conducting a full audit; and impediments to an accurate assessment of the US gold position, including any leases, swaps or other encumbrances placed upon the gold reserves; and also examine changes to the legislative proposal that will ensure a full and accurate audit, assay, and inventory of U.S. gold reserves.

WITNESS LIST

• The Honorable Eric M. Thorson, Inspector General, Department of the Treasury
• Mr. Gary T. Engel, Director, Financial Management and Assurance, Government Accountability Office

I had an article in the American Thinker today, check it out:

Obama and the Art of Wooing Big Business

By James E. Miller

Back in 2010, President Obama made the unprecedented move of using the State of the Union platform to criticize the Supreme Court's Citizens United v. Federal Election Commission, which struck down any previous limits on political campaign spending by corporations.  

"Last week, the Supreme Court reversed a century of law to open the floodgates for special interests -- including foreign corporations -- to spend without limit in our elections. Well I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities."

According to those on the left and the mainstream media, the Citizens United decision will end up making a mockery out of our electoral system.   Apparently privatizing profits and socializing losses, a.k.a. TARP, wasn't enough to do that initially.  
Bombastic progressive and former MSNBC, now CurrentTV (who?) pundit Keith Olbermann, compared Citizens United to the case of Dred Scott v. Sandford in which the Supreme Court famously decided that imported slaves were not U.S. citizens and therefore unprotected by the Constitution.
Dramatic much?
It's funny how the left takes great pleasure in deriding corporate special interests, yet failed to catch that Obama received his biggest donation during the 2008 campaign from none other than Goldman Sachs.  Hypocrisy goes hand in and hand with politics but it's hard to take a group seriously that demagogues big business while their president appoints the king of tax breaks, GE CEO Jeffery Immelt, to head the Council on Jobs and Competitiveness. 
Still, even as Democrats and President Obama have continued their condemnation of Citizens United, the Obama campaign has recently advised the White House in a memo to give previous top campaign donors a "sense of access" according to the HuffingtonPost.  This memo was in response to CEO of Full Sail University Ed Haddock, who had yet to confirm his financial support for Obama's second run.
Principles always change fast when it comes to big money. 
The Center for Public Integrity has just put out a report revealing that almost 200 of the president's top donors "have landed plum government jobs and advisory posts, won federal contracts worth millions of dollars for their business interests or attended numerous elite White House meetings and social events."  The report came out only three days after the New York Times ran a story on Obama meeting with two dozen Wall Street executives in the White House Blue Room to discuss his reelection.
I guess those fat cat bonuses have to go somewhere. 
Democrats may love the image of championing the cause of the middle and lower class, but the fact is that they have always been just as beholden to wealthy special interests as Republicans.  Just ask Rep. Nancy Pelosi and her 38 waivers for businesses in her own district for the Obamacare mandate. 
As long as governments at all levels continue to dole out benefits, special interests groups will always be there to throw wads of cash at whichever candidate offers the most goodies, and politicians will always be more than happy to oblige.  The art of statesmanship has boiled down to convincing the public that they can give them the moon.  Farmers will get their subsidies, oil companies obtain tax breaks, unions receive protection, seniors get their entitlements, public school teachers are protected from accountability, and large financial institutions are bailed out. 
Famed political philosopher Frederic Bastiat defined government as "the great fiction through which everybody endeavors to live at the expense of everyone else."  The problem is not special interests; it is the belief and practice that an institution with a monopoly on force and coercion exists to provide benefits to one group at the expense of another.  The art of picking winners and losers is best utilized by a market economy, not by the government.
When it comes down to it, President Obama would be dimwitted not to take advantage of the Citizens United decision.  He is, after all, like any other person who acts in his own best interest.  Collectivist rhetoric makes good talking points, but always takes a back seat when it comes to winning reelection.  If he can continue to demagogue wealthy interest groups, simultaneously receive their donations, all the while convincing his base that he represents the working class, he may be a shoe-in for 2012.

Matt Taibbi has an excellent article in Rolling Stone this week on Neo-Con Queen Michele Bachmann.  Check out some excerpts:

In modern American politics, being the right kind of ignorant and entertainingly crazy is like having a big right hand in boxing; you've always got a puncher's chance. And Bachmann is exactly the right kind of completely batshit crazy. Not medically crazy, not talking-to-herself-on-the-subway crazy, but grandiose crazy, late-stage Kim Jong-Il crazy — crazy in the sense that she's living completely inside her own mind, frenetically pacing the hallways of a vast sand castle she's built in there, unable to meaningfully communicate with the human beings on the other side of the moat, who are all presumed to be enemies.

Bachmann was born Michele Amble in Waterloo, Iowa, to a pair of lifelong Democrats, but grew up in tiny Anoka, Minnesota. By her teen years, her parents had divorced; her mother remarried and brought step-siblings into the home, creating a Brady Bunchian group of nine kids. One of Bachmann's step-siblings, Helen LaFave, would later come out as a lesbian, a fact that Michele, who became famous opposing gay marriage, never mentions on the campaign trail. For the most part, though, Bachmann's upbringing seems like pure Americana, a typical Midwestern girl who was "in a couple of beauty pageants" and "not overtly political," according to her stepbrother Michael LaFave. Young Michele found Jesus at age 16, not long before she went away to Winona State University and met a doltish, like-minded believer named Marcus Bachmann. After finishing college, the two committed young Christians moved to Oklahoma, where Michele entered one of the most ridiculous learning institutions in the Western Hemisphere, a sort of highway rest area with legal accreditation called the O.W. Coburn School of Law; Michele was a member of its inaugural class in 1979.

If Bachmann has anything on the other candidates, its her fascinating history.  She certainly has an interesting background compared to the others (it doesn't beat Paul's 30 year bitch fest about everything wrong with the government, but I may be biased), but that doesn't translate into electoral victory.

I can't help it, I gotta post another Paul video, but this one has him on a panel on The Kudlow Report discussing the Fed with characters such as a former Fed governor and Mort Zuckerman:

Do I have to point out the obvious?  Which of the others predicted the financial crisis?  Well, I am not familiar enough with the others to actually know, but I would be surprised if any of them did.  The dude in the top left is great though!  Inflation is discussed, though is basically shrugged off.  Inflation may be slowing down as economic growth slows, but some prices, mainly commodities, are still increasing in price.  See livestock:

Speaking of commodities, Marc Faber is still long on gold and silver, but warns of decreasing prices in the next few months.  Get your checkbooks ready!

The Bernank' Speaks and Gets Vote of No Confidence, Jim Grant and Bill Gross React, Graph on Keynesian Responses to Recessions, and CPI Calculation Changing?

Fed Chairman Bernanke had a kind of press conference today as the Federal Reserve Board put out a new report adjusting its economic forecast.  So what's the consensus?

In an updated forecast, the Fed estimated Wednesday that the economy will grow between 2.7 percent and 2.9 percent this year. That's down from its April estimate of between 3.1 percent and 3.3 percent. The downgraded revision is an acknowledgement that the economy has slowed, in part because consumers have been squeezed by higher gasoline prices.
Growth at the rate the Fed is projecting won't be enough to significantly lower unemployment, now at 9.1 percent. The Fed estimates that unemployment will still be around 8.6 percent to 8.9 percent by the end of the year.

The central bank now sees inflation rising 2.3 percent to 2.5 percent this year, as measured by a price gauge tied to consumer spending. That compares with an April forecast that showed a higher upper range of 2.8 percent.
The Fed estimates that "core" inflation, which excludes energy and food, will increase 1.5 percent to 1.8 percent. That's slightly higher than its April forecast of an increase of 1.3 percent to 1.6 percent. The revised estimate is still within the Fed's comfort zone for inflation.

Bernanke gets one thing right though:

The central bank chief and his lieutenants are expressing concern that Congress’s failure to close what Dallas Fed President Richard Fisher called the nation’s “fiscal sinkhole” puts the economy at risk. At the same time, they say that acting too quickly may choke off a recovery hobbled by an unemployment rate above 9 percent.

Still no mention of QE3, but Bill Gross is making his own prediction:

And the always great Jim Grant weights in:

While Greece's Parliament gave the PM a pass yesterday, according to this CNBC poll, the public isn't being so kind to Bernanke:

And now even Newt Gingrich of all people is starting to question the Fed:

Gingrich: "This economy is going to stay mired in a bad economy until we bring the Fed under control and we repeal the Dodd-Frank bill"

Well well, maybe Ron Paul doesn't look so crazy (I should say sane) compared to the GOP candidates now.

Speaking of crazy, check out this New York Times interactive graphic on Keynesian responses to recessions since J.F.K. took office:

These dudes link every government policy to Keynesian "stimulus."  I always love how tax cuts seem to count as "stimulus."  Such thinking implies that the government is somehow entitled to money, therefore when it allows the public to keep more of its earnings, it is "stimulating" the economy.  If that's the case, why aren't Paul Krugman and Brad Delong sounding the alarm for more tax cuts?  In the end, if tax cuts are financed by deficit spending (such as W. Bush's or Reagan's), then it is seen as "stimulus" rather than cutting the size of government.  Though tax cuts are good, deficit spending to pay for them is bad as well, but not as bad as increased government spending financed by a deficit.  I should also mention that at least Modern Monetary Theorists promote tax cuts as well, though don't seem to regard money as any tangible thing.

So there is a report going around on recent discussions some lawmakers have had on changing the way the CPI is calculated:

WASHINGTON -(Dow Jones)- Lawmakers are considering changing how the Consumer Price Index is calculated, a move that could save perhaps $220 billion and represent significant progress in the ongoing federal debt ceiling and deficit reduction talks.

According to congressional aides familiar with the discussions, the proposal would shift how the Consumer Price Index is calculated to reflect how people tend to change spending patterns when prices increase. For example, consumers tend to drive less when gas prices increase dramatically.

Such a move is widely seen by economists as resulting in a slower rise in inflation. That would impact an array of federal programs that are linked to CPI including the Social Security program and income tax brackets set by the federal government.

The proposal could lower federal spending by around $220 billion over the next decade, based on calculations by last year's White House deficit commission, which recommended the change as part of its final report.

According to two congressional aides familiar with the budget negotiations, the shift is being "seriously discussed" as part of the ongoing talks to strike a budget deal, that would be used to ease the passage of a required increase in the country's debt limit.

Those talks involve Democratic and Republican lawmakers from both chambers and are led by Vice President Joe Biden. The group held its latest meeting Tuesday as they strive to reach the broad outlines of a compromise on federal spending by the end of the month.

In a press conference that took place before the meeting, House Majority Leader Eric Cantor (R., Va.) declined to comment on the specific proposal, other than to say that "a lot of things are on the table." But asked whether the proposal would be interpreted as a tax increase and therefore a non-starter for Republicans, Cantor said it could be seen as both impacting tax rates and benefits paid out by the federal government.

When asked about the idea after the meeting, Rep. Jim Clyburn (D., S.C.) said everything is being discussed.

It is a rare proposal in that it would likely lead to both lower benefits paid to seniors and higher taxes paid by most people who pay federal income tax. As such, it could allow Republicans to argue they are tackling federal entitlement programs such as Social Security, and permit Democrats to say they are increasing taxes as part of any budget deal that is reached.

It could be easier for both parties to agree on than a significant overhaul to the Medicare proposal or an increase of taxes on wealthier Americans.

"It's certainly something that is going to be considered," said James Horney, director of federal fiscal policy at the Center for Budget and Policy Priorities, a liberal think tank. "There are questions whether it would be politically easy."

Several senators that are not party to the Biden-led talks voiced support for the proposal including Budget Committee Chairman Kent Conrad (D., N.D.), while Sen. John Thune (R., S.D.), a member of the Republican leadership team, said it should be looked at as part of the negotiations.

I bet Krugman is jumping for joy over this.  All changing the CPI does to reflect lower inflation is give an excuse for the Fed to print more money, for the government to dole out less benefits to programs that are linked to the CPI, and for lawmakers to continue goring on spending to attract lobbyists who will happily pay for them to gorge on expensive food, drinks, and call-girls.  Meanwhile, Grandma's Social Security payments dwindle, her savings lose value, and McDonald's starts to seem like a high class meal.  Ah, the art of politics.

Update:  Brent Budowsky of The Hill writes another great column on the growing influence of Ron Paul on the GOP:

Now Newt Gingrich and Tim Pawlenty are parroting Rep. Ron Paul (R-Texas) in criticizing the Federal Reserve Board while Mitt Romney and a growing number of congressional Republicans are beginning to sound like traces of Ron Paul regarding Afghanistan.

There is bobbing and weaving among the Republicans about these matters, and there is hemming and hawing compared to Dr. Paul's clarity about these matters. However, make no mistake about the fact that Ron Paul is now exerting a huge degree of influence on the positions of Republican candidates for president and Republicans in Congress on both economic and foreign policy.

Whether I agree with Dr. Paul or not, and whether his supporters agree with my columns or not, I do my best to call them as I see them. When the final books are written about the history of the 2012 campaign, I believe that the gentleman from Texas will be placed somewhere on the list of winners, for reasons stated here.

And the man never stops:

WASHINGTON (MarketWatch) -- Rep. Barney Frank (D-Mass.) and Rep. Ron Paul (R-Tex.) said they will introduce a bill on Thursday to let states legalize, regulate, tax, and control marijuana without federal interference. The legislation would limit the federal government's role in marijuana enforcement to cross-border or inter-state smuggling, allowing people to legally grow, use or sell marijuana in states where it is legal. The legislation is the first bill ever introduced in Congress to end federal marijuana prohibition.

When I was driving to work today, I saw someone with a bumper sticker that said "Don't Blame Me, I Vote for Ron Paul."  Needless to say, it was awesome.