Here is my definition of earmarks:

Earmarks are sometimes payoffs to campaign contributors, and sometimes possibly worthy projects for a Congressperson’s home district, that are inserted into appropriation legislation, without debate or oversight, the number and amounts of which are based on a Congressperson’s seniority and committee assignments.

Here is a definition of earmarks from the Office of Management and Budget:

• Earmarks vs. Unrequested Funding. At the broadest level, unrequested funding is any additional funding provided by the Congress — in either bill or report language — for activities/projects/programs not requested by the Administration. Earmarks are a subset of unrequested funding. The distinction between earmarks and unrequested funding is programmatic control or lack thereof of in the allocation process.
• Earmarks and Programmatic “Control.” If the congressional direction accompanying a project/program/funding in an appropriations bill or report or other communication purports to affect the ability of the Administration to control critical aspects of the awards process for the project/program/funding, this IS an earmark. Note: The definition of “control critical aspects” includes specification of the location or recipient or otherwise circumventing the merit-based or competitive allocation process and may be program specific. However, if the Congress adds funding and the Administration retains control over the awards process for the project/program/funding, it is NOT an earmark; it is unrequested funding.
• Earmarks Include:
• Add-ons. If the Administration asks for $100 million for formula grants, for example, and Congress provides $110 million and places restrictions (such as site-specific locations) on the additional $10 million, the additional $10 million is counted as an earmark.
• Carve-outs. If the Administration asks for $100 million and Congress provides $100 million but places restrictions on some portion of the funding, the restricted portion is counted as an earmark.
• Funding provisions that do not name grantee, but are so specific that only one grantee can qualify for funding.

OMB has used this definition to gather data on earmarks internally. This definition is similar to the definition that the Congress recently developed for disclosing earmarks in spending legislation (H. Res. 6 and the Senate-passed version of S. 1).

Here are some quotes from President Obama on the subject of earmarks, in chronological order:

Before becoming President of the United States:

“We need earmark reform, and when I’m President, I will go line by line to make sure that we are not spending money unwisely.”

“Private companies differ from the public entities that Americans rely on every day – schools, police stations, fire departments – and if they are seeking taxpayer dollars, then they should be evaluated with a higher level of scrutiny.”

After becoming President of the United States:

“I recognize that Congress has the power of the purse, and as a former Senator, I believe that individual members of Congress understand their districts best. They should have the ability to respond to the needs of their communities. But leadership requires setting an example, and the magnitude of the economic crisis we face requires responsibility on all our parts.”

“Done right, earmarks have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts. And that’s why I’ve opposed their outright elimination.”

And then he signed the budget bill for 2009 which contains between 8,000 and 9,000 earmarks, by anyone’s definition.

Here is my interpretation of President Obama’s recent pronouncements on earmarks:

Hey, bribery isn’t a big deal! It’s only 1 or 2% of the budget, fer Christ’s sake!

Besides, sometimes politicians are bribed to do good things!

This is what I’m talking about.

Many governments will be overthrown. Global debt default is coming.

I have no idea what the consequences of global debt default will be, but I believe we are headed there, like it or not.

The world is bankrupt. That’s what happens when you declare bankruptcy. You default on all your debts and start over. It has just never happened before that the entire world became insolvent all at once.

At some point, when everything else has been tried and has failed, we will all, public and private, declare bankruptcy, and the new order will be born. Nobody has any idea what it will look like.

This is basically a free trade screed.

But I think it lays out the situation with quite a bit of clarity. I am an acolyte of the twice a day correctness of Pat Buchanan’s stopped clock. Close the borders, both economic and physical. As bad as it is here in the United States of America, it is much worse everywhere else. Free trade and open borders are in everyone’s interest but ours.

Of course, China will quit buying our debt, but that will happen soon in any case. We are going to have to default on our debt, as is everyone else, one way or another. Let’s just default on all debt owed to anyone outside the United States. One country, one currency, one Volk, one leader.

I am somewhat disengaged from the current debate about the Democrat’s economic fantasies. I don’t think that any of these current budgets or bail-outs or massive entitlements will have any substantial effect one way or another, except at the margins. There is nothing that Barack Obama or John McCain could have done to prevent the coming systemic financial collapse.

Time to hunker down and take care of our own. Thank God for the Atlantic and Pacific oceans. You still have to have a navy to mess with the USA.

I’m beginning to think that Pat Buchanan may be on to something. It might well behoove the United States to put up a wall, quit importing and exporting, and just take care of ourselves. Employ Americans to produce whatever we need, keep our currency to ourselves, and tell the rest of the world to go to Hell. We are one of the few countries who could do that. China is another.

Yes, we will be a little poorer, no more amazingly cheap, stylish stuff at Target, Walmart, and the Old Time Pottery Barn. We’ll have to drill our own oil, and burn coal to make electricity, and drive Chevys, but we’ll get by, and everyone will have a job.

It’s going to be rough. This is a world-changer, like WW II and the collapse of the Soviet Union. I don’t believe anything the pundits or politicians say. I believe George Soros and Rupert Murdoch.

I got a new camera recently, a Canon PowerShot SD770 IS. They’ve been having a deal on them at Amazon for $159. It’s $230 at my local Office Depot. It’s not a pro SLR, but it’s good enough for me. I am totally amazed at what inexpensive digital cameras can do these days. I’m really liking how indoor pics turn out with the flash turned off. Here are some recent pictures taken with it.

When I was young, back in the 60’s, I was in the grip of apocalyptic thinking. I joined, with my wife and children, and lived in for eight years, from the age of 32 to 40, my prime, in an apocalyptic commune in Tennessee called The Farm. Everyone there fully expected Western Civilization to collapse momentarily.

After the Farm collapsed instead, my wife and children and I escaped, in 1984, with nothing but a loan (later forgiven) from my parents, sufficient to purchase a used Chevy stationwagon and enough gas to get to Boise, Idaho. Like dust bowl refugees, Susan and I and our four children loaded up the car with ourselves and the few meagre personal possessions left us by the collective, and headed for unconditional parental, and grandparental, love.

Following the subsequent protracted trauma of re-integration into “square” society, I gradually came to see all of those apocalyptic expectations/hopes, as delusional, going so far as to eventually, post 9/11, become a (shudder) Republican.

I used to say, concerning the risk of owning stock in Apple, that the only way it could lose was if the entire global financial system were to collapse. Well, here we are. Now I’m beginning to think I was right the first time, just a little ahead of the curve, when I dropped out and joined an agrarian collective.

The problem with the Keynesian stimulus idea is that the purpose of the stimulus is to stimulate more lending, borrowing, and spending. That’s it. That’s the whole theory. Nobody is going to do that. Nobody wants to lend, borrow, or spend, and a temporary tax cut, or a job building the high speed rail from Disneyland to Vegas, is not going to make anybody lend, borrow, or spend. We (personally and corporately) are eliminating borrowing, cutting spending, and we’re certainly not going to loan anybody anything. We will continue this behavior until we feel as rich as we used to imagine that we were. This stimulus, and the next stimulus, and the one after that, are not going to change that dynamic. In fact, the specter of Congress creating massive debt, payable by our children and grandchildren, only further exacerbates this mood of economic Puritanism.

As far as the imminent and immanent apocalypse is concerned, I don’t think that it is possible for the governments of the world to sustain enough debt to turn this around. The reason Poulson didn’t use the TARP to buy up toxic assets, and the reason Geithner has not yet come up with a plan, is because the amount of toxic assets is enormous, far beyond the ability of the government to deal with. Eventually default may be the only option, that is, the writing off of all debt, both private and public. It has already happened in Iceland, and will soon be happening in a number of other countries. The current moratorium on mortgage foreclosures is a mild form of defaulting on the debt. When the Obama plan for housing becomes reality, it too will be defaulting on debt. Massive inflation is yet another way of defaulting on debt.

If all debt is defaulted, the result will be that poor and middle class people will become richer, and rich people will become poorer. Congress is made up of rich people, and their campaign contributors are also rich people, so this is not an attractive option for them. But if a majority of the populace is kicked out of their homes, lose their jobs, and their pensions disappear, the government will be overthrown, as it already has been in Iceland. Riots are spontaneously arising all over the world. So that is not an attractive option either.

Congress will default on debt as much as necessary to prevent a revolution, and as little as possible to minimize the suffering of rich people, but that may end up being a lot of defaulting. China will be left holding a bag of U.S. Treasury paper, which is why they are beginning to accumulate gold.

The other result of universal default will be that there will no longer be enough trust to support a financial system. The concept of wampum will be the kind of sophisticated financial instrument to which we can only aspire. Barter will be King.

Doesn’t it seem like there is a lot more corruption on Wall Street and in Washington DC than previously imagined? Of course, now that the Republicans are out of power, they are looking less corrupt than the Democrats, because there is no longer any point in bribing a Republican, but I am rapidly losing faith in the integrity of our elected representatives, regardless of Party, as well as the CEOs of large financial firms. I had no idea it was this bad, and apparently nobody else did either.

The brilliant Ivy League MBA grads making their fortunes on Wall Street, assisted by Congessional banking and financial services committees, and the SEC (McCain called for firing the head of the SEC. Was he wrong?), and emulated by their remoras around the world, have been enriching themselves at everyone else’s expense, as is their wont.

The European banks are sitting on $24 trillion worth of toxic assets. I don’t know what the figure is for U.S. banks, but it is a helluva lot more than the 1 or 2 or 3 trillion dollars that are going to be thrown at the problem, the liberal agenda disguised as “stimulus”.

In addition, pretty much every single municipal and state pension fund is insolvent. This is also true of most private union and corporate pension funds. This dog has not yet barked. The public pension funds are guaranteed. If they go bankrupt, then the taxpayer is legally required to pick up the tab. And apparently we will also be picking up the tab for the private union pension funds as well.

Salaries and benefits for the public sector are now generally superior to the private sector, thanks to public employee unions. This is going to become more the case, thanks to the stimulus. The unions supply the legislators with campaign contributions. The legislators supply the unions with pay raises, and guaranteed health care and pension benefits. Synergy. I understand that the adversary of the UAW is the management of the auto companies. Who is the adversary of the public employee unions? We are. Goodbye California.

President Obama has been getting a lot of heat lately for fear mongering. It’s a bum rap. The President has not even come close to saying how bad it really is. This stimulus bill and TARP bail-out is not going to make any discernible difference, one way or another, except to triple the national debt. We are all still a long way from being prepared to fully take in the enormity of this disaster.

I don’t know what is going to happen. Barack Obama doesn’t know what is going to happen. Timothy Geithner doesn’t know what is going to happen. Larry Summers doesn’t know what is going to happen. Paul Krugman doesn’t know what is going to happen. Larry Kudlow doesn’t know what is going to happen. Everybody is just guessing. My guess is that it will be very, very bad, worse than anyone imagines.

This is not an economic problem. I have a degree in Economics, but I am not so stupid as to believe that Economics is a Science, any more than psychology, sociology, astrology, or climate change. Physics is a science. This is a moral problem. We have sinned, and must be punished, or, to put it in Buddhist terms, we have been blinded by delusion, and have reaped the inevitable Karma. The only “solution” is to take what is coming to us in as enlightened a spirit as we can muster.

I’m beginning to understand how it was that nothing was done about Hitler until it was too late. We are now experiencing, or about to experience, the end of the financial world as we know it. That’s just my opinion. I could be wrong. But, assuming I’m right, there is no respectable pundit, politician, economist, or even blogger, who is willing to say that. Saying it in public, even if it’s true, is a career-killer. It’s an opinion of the fringe, the nuts, which is exactly how Churchill was regarded with his freak out about the German threat. Only when it was obvious to everyone, i.e. too late, did Churchill get any respect.

Everyone is in debt, the federal government, the state governments, municipal governments, auto companies, home owners, credit card holders, pension funds, European governments, all governments in fact, except for maybe Saudi Arabia. We are all debtors. If you add up all of the governmental and personal debt in the U.S., it comes to something like $147,000 per person. We are bankrupt. The rest of the world is even more bankrupt than we are. U.S. Treasury bills are paying 0%, and people are snapping them up because it’s the safest place they can think of to stash their cash, except for burying gold bullion in the back yard.

This is not a sustainable situation. This is not just another recession that will be over a few months from now. This is the collapse of the global financial system. On the other side of this, whenever that comes to pass, the world will be a very different place.

How can everyone be in debt? Who are we in debt to? Money has been a fiction for a long time. Modern money exists as bits in a computer. It is created by borrowing and lending. When I get a $100,000 loan from the bank, the bank makes a bookkeeping entry that says I have $100,000 in my account. That money didn’t come from somewhere else. It was simply created out of nothing. That’s what money is. Theoretically there are some limits. A bank can only lend some multiple of its assets, but lately that multiple, for many financial institutions, has been 30 to 1, and things are called assets that ain’t. Investment banks have been borrowing 30 times their assets, and investing that borrowed money in derivatives that nobody understands. CALPERS, the California pension fund for public employees, borrowed huge amounts of money and invested it in real estate that has now lost most of its value.

Money is debt. The creation of money is the creation of a lender and a borrower, a creditor and a debtor. We are the debtors. The bankers are the creditors. The financial system has become absurd. The banks own everything, and nobody has any money. Of course some people, who aren’t bankers, still have money, and they are so desperate to find a place to put it where it won’t disappear, that they are buying Treasury bills that pay 0%. That rate of return is the same as saying, “Every investment in the world is so risky, we can sell notes that pay nothing because the U.S. government is that much less risky, relatively.”

I don’t know, but it looks to me like the fiction of money is breaking down. If people quit believing in what we call money, then there won’t be any. Some new idea of what money is will have to take its place. Something everyone can believe in. God help us. There are some interesting times a-comin’.

This whole big three Detroit auto company bail-out is really beginning to piss me off. Ford, GM, and Chrysler pay, on average, $78 per hour for labor to manufacture cars, compared to $48 for Toyota, here in the United States. This figure includes pension and health benefits for current retirees, as well as the future costs of retirement benefits for current workers.

A reorganization of these companies makes absolutely no sense unless this $78 figure is reduced to approximate the $48 figure. Otherwise, Detroit is simply not competitive. The only way this can be done is to reduce the benefits of existing retirees and the current and future benefits of existing workers. These health and retirement benefits, it is relevant to add, are vastly superior to what the vast majority of Americans receive, excluding members of Congress.

Will the Democrat-controlled Congress and White House put together a deal that reduces these benefits, even slightly? Of course not. They are not going to cross the United Auto Workers, one of their main campaign contributors. So the $78 figure will not be brought down to the $48 figure. There will be no real, effective, reorganization. The bail-out money will disappear into a black hole.

Those of us who have had our 401K retirement benefits reduced by 50%, 60%, 80%, or more, will be committing our tax dollars, and our grandchildrens’ income and assets, to finance the retirement and health benefits of former and current Detroit auto workers. Why? Because the Democratic Party is beholden to the labor unions.

I understand the reasons for wanting to rescue the indigenous American automobile industry from the current financial meltdown and the mistakes of the past. Millions of jobs are at stake. I have friends who depend for their livelihood on the big three auto companies. But if the root causes of Detroit’s bankrupt condition are not addressed, then the inevitable collapse is only being postponed, at great current and future expense.

I am in favor of a government bail-out of some kind for the American automobile industry, but only if they are rehabbed sufficiently so as to become competitive with Toyota and Nissan and Honda and Hyundai and Volkswagen and Mercedes. If they are not competitive, then the whole exercise is a very expensive waste of time.

In the long run, it will only hurt the U.S. economy, which is to say the economic well-being of the citizens of the United States, including the residents of Michigan.