All about economics

General government and households

2010-03-22T18:53:00.000+02:00

One can conceive of pushing back general government, in fact the whole public sector, into their component households. They would form a vast subset of the set of households. These would be the households fed by government payrolls. As opposed to, say, a household which drew its income from employ in the private sector. So in reality one can in fact reduce the entire task of social accounting to that for a single sector-the household sector.

So that is the top break for the entire spreadsheet. One column per household. Row wise Assets, Liabilities and Net Worth. This would complete the simulacrum of homo economicus.

[Via http://sxray.wordpress.com]

POLITICAL: Reigning in corporate salaries; a modest proposal.

2010-03-22T10:37:00.000+02:00

http://rss.macworld.com/click.phdo?i=24a69419b68dce263a006cdb9675b4a0

AT&T CEO’s pay jumps 35 percent to $20.3 million in 2009

from Macworld by Ann Bednarz

*** begin quote ***

AT&T CEO Randall Stephenson’s stock awards fell 8 percent in 2009, but he earned a cash bonus of $5.85 million that helped increase his total compensation by 35 percent.

*** end quote ***

Corporations are are a gooferment creation. So, needless to say, they are screwed up.

It’s unseemly for ANY corporation employee to have a salary greater than that of the President.

The gooferment’s creation fails to align the interest of the owners and the employees.

The gooferment could correct that error with five year stock options as the manner of executive compensation. Or maybe, a mix of options that vest from 10 to 50 years? With a sliding scale, weighted towards the middle?

That could be done with the stroke of a pen.

If I was “king”, I’d have the “Sheriff of Nottingham” (aka the IRS) audit any company that pays salaries greater than that of the Prez.

How fast could things change?

How many lobbyists and politicians would have their pockets stuffed with cash to kill this?

# # # # #

[Via http://reinkefaceslife.com]

Second Major Vote

2010-03-22T02:49:00.000+02:00

HR 3590 has passed, 219 to 212. Now comes the Motion to Recommit. That’s not expected to derail the process, but might slow it down. And then the vote on the ‘reconciliation’ amendments in HR 4872.

All this should get started fairly quickly.

[Via http://goodcommonsense.wordpress.com]

Phillip Blond and the small, beautiful polity

2010-03-19T18:57:00.000+02:00

Everyone is getting their shot at a Philip Blond point right now: the Brooks column, Deneen and Rod the Bod after the Tocqueville Forum event last night, The Immanent Frame. So, as I frequently ask myself, why not me?

In a moment of many voices, I will say but a few sentences. Blond identifies himself with the Distributists, which is a sometimes obscure reference for Americans, even among some traditional conservatives. And that’s because Distributism is not dealing quite so explicitly with a tradition being lost, so much as an alternative form of development – accepting historical change, but insisting that it must be steered in a certain way. Much as I like Chesterton and Belloc, my thoughts here drift toward E.F. Schumacher, whose Small is Beautiful was a minor milestone in “Third way” thinking.

Schumacher’s focus, and Blond’s, is that the physical community is a spiritual one, and that our spiritual future must be a relational future. This further reminds me of the ideals of Renaissance civic humanism, which took a medieval/classical ideal of a state that is good for its people, and began to think again about what this meant for the causes of virtue within it, eventually drawing deep conclusions about participation in the political process for the everyday man.

The problematic issue with civic humanism, and I think Red Toryism, is defining the point at which the community should no longer be politicized. Most of us think communities can and should be stronger, and if they are going to be politicized – ie organized into self-identifying polity, capable of decision-making - then it seems quite humane to do so in a very local way. Indeed, participatory citizenship, even to a small polity, bestows a sense of ownership as well as an enhanced awareness of the community. Great all around. But the spiritual identity of men is more complex than a mere zoon politikon. To what extent must we be satisfied with apolitical relationships, and when can even local politics overrun natural relations with institutionalized ones? These are questions the Red Tory in all of us should deal with … when it does become more of a reality.

[Via http://humanepursuits.wordpress.com]

Externalities Aspect of Business and Economy

2010-03-19T10:49:00.000+02:00

Externalities (spillover effects) are common in virtually every area of economic activity. Externalities occur when firm or people impose costs or benefits outside the market place. External cost and benefits together are called externalities.

External cost are said to be the negative externalities and external benefits are said to be positive externalities. External cost is the uncompensated cost n individual or the firm imposes on the other; the best example for external cost or negative externalities is the environment cost of the pollution. The external benefits are the benefits the individual or firm gives to others without receiving any compensation in returns, the best example for positive externality or external benefit is the national defense provided to protect the freedom of everyone, even if one wants or not irrespective of whether one is paying for it or not and commodity available from public distribution system. The government should be more concerned about the negative externalities.

The government should be more concerned about the negative externalities. They are defined as third party effects arising from production and or consumption of goods and services for which no appropriate compensation is paid. The study of externalities by economists has been more in the recent years after the link between the economy and environment became strong.

Externalities create divergence between private and social cost, e.g. costs of pollution is not included in the cost of production of the factory, which is creating the pollution; but it is included in the social cost as the community has to bear the cost in some way or the other. Thus the social cost in this case is greater than the private cost.

Social cost = private cost + private cost

A chemical factory throwing out a lot of chemical waste in the nearby river killing the fish and making the water unhealthy for use, refineries pollute the air and paint industry creating bad odour, creating respiratory track infections and other diseases to all the people living in the area around the factories. These negative externalities will increase the social cost as the cost on the clean up and health will increase. External cost due to traffic jams, an individual deciding to go for a drive in the peak hours and increasing the travel time of the other drivers are all negative externalities.

We already have discussed about investment function and capital expenditure in our previous post. Now, the blog will discuss about all aspect of business and economics.

[Via http://mortgageprocess.wordpress.com]

Counting the World's Unbanked

2010-03-19T02:49:00.000+02:00

SIGN OF THE TIMES

Counting the world’s unbanked

McKinsey Quarterly | MARCH 2010

• Alberto Chaia, Tony Goland, and Robert Schiff

Fully 2.5 billion of the world’s adults don’t use banks or microfinance institutions to save or borrow money, but unserved doesn’t mean unservable.

Pointers:

• Fully 2.5 billion of the world’s adults don’t use formal banks or semiformal microfinance institutions to save or borrow money.

• Nearly 2.2 billion of these unserved adults live in Africa, Asia, Latin America, and the Middle East.

• Unserved, however, does not mean unservable.

• The microfinance movement, for example, has long helped expand credit use among the world’s poor—reaching more than 150 million clients in 2008 alone.

• Approximately 1.2 billion adults in Africa, Asia, and the Middle East who use formal or semiformal credit or savings products, about 800 million live on less than $5 a day.

• Large unserved populations represent opportunities for institutions that are able to offer an innovative range of high-quality, affordable financial products and services.

• With the right financial education and support to make good choices, lower-income consumers will benefit from credit, savings, insurance, and payments products that help them invest in economic opportunities, better manage their money, reduce risks, and plan for the future.

[Via http://inspiritedenterprise.wordpress.com]

Advocating Against Self-Interest

2010-03-17T18:37:00.000+02:00

Two areas of endeavor have caught my interest as obvious examples of systems that are broken and in need of fixing. Regarding the first – healthcare — I’ve basically stuck my head in the sand and ignored it, leaving that issue and related debates to others better qualified to coax coherence out of complexity. The second – the recording industry – I’ve blogged about directly and indirectly over time.

As currently practiced in the U.S., the healthcare industry is on a collision course with insolvency. Already, tens of millions of people lack coverage, and those with coverage are either being squeezed by increased premiums accompanied by automatic claim refusals and/or are forced into bankruptcy when a major medical problem arises. The details of healthcare reform change daily, but reform of this particular industry is something that only government can do. Left to their own devices, the inextricably entwined healthcare and insurance industries simply cannot fix themselves while perverse incentives continue to corrupt the services rendered and cause costs to spiral without improvement in outcomes. Yet members of the Tea Party movement advocate against self-interest, seeing in the spectre of government interference an evil worse than, for instance, a total lack of preretirement healthcare benefits. Many of these people are retirees already enjoying the benefits of Medicaid and Medicare. Their intransigence about reform, even if it’s only step 1 in a multistep process, boggles the mind.

In contrast, this article by Miles Raymer in the Chicago Reader is notable for the author’s admission that he has changed his mind about free file sharing, which he now disparagingly calls freeloading. The business model that had served the recording industry for decades, based on intellectual property rights (specificaly, copyright) recognized for centuries, has been wrecked by file sharing made easy by modern technology. “Fine,” thought Raymer (and many others), “we’ll just figure out a different was of making money to support the creative impulse.” Several years into that experiment, he now recognizes new sources of revenue don’t simply spring magically into existence in the wake of the destruction of old ones. Any number of people could have told him that, but I surmise he was only able to learn that lesson the hard way. Until then, he happily advocated against self-interest, willingly giving away the fruits of his labor. Put another way, he embraced the demise of the music industry as the result of file sharing with the rose-hued optimism often called creative destruction.

[Via http://brutus.wordpress.com]

That Progressive Math - Obamanomics!

2010-03-17T10:53:00.000+02:00

I guess it must be that liberal education: Progressives can’t do math. You want to trust them with a $500 Billion dollar tax increase called Obamacare? It will only cost $2.5 Trillion. When liberals do math, we can increase the number of people covered by healthcare insurance, increase benefits and reduce cost. Let’s watch: Obama does math. Our president visited 57 states, 1 left to go.

Nancy Pelosi does math. 500 million Americans lose their job every month.

Joe Biden does math. “Jobs” is a three letter word.

And now, the gift that keeps on giving. Obamacare will reduce your insurance premium by 3000%. If someone is paying the insurance company $10,000 they will send you $300,000 back to get a policy.

How many people are getting insurance through their jobs right now? Raise your hands. All right, well, a lot of those folks, your employer, it’s estimated, would see premiums fall by as much as 3000%, which means they could give you a raise! HAHAHAHAHAhahahaha!!!!! And people called president Bush names… Democrat Dicky Durbin admits… premiums won’t go down.

This seems to be what the Democrats are saying: I’ll tell you anything to get you to like Obamacare. Free health care! Yeah, let’s slam this Obamacare bill through, whatever it is, without a bill out of conference, heck, without the House voting on the Senate bill. Who needs to read the bill anyway, it’s all full of numbers and stuff. We don’t understand that sort of thing. We want to campaign saying we “passed health care for the American People.” Psssst. Don’t tell anyone we are taking over the student loan business and putting all those making student loans out on the street, unemployed. It’s a little baby step to Nationalizing Banking completely. http://wp.me/pFeEj-nk http://www.youtube.com/watch?v=lUd-slJc-GY

[Via http://oldhardhead.wordpress.com]

Manufacturing Discontent

2010-03-17T02:50:00.000+02:00

I was asked to wrtie something up about my book, Manufacturing Discontent. I thought that I would share it with you. Any comments would be be appreciated.

Of all my books, Manufacturing Discontent may seem to have the least links with Marxism. After I published The Invention of Capitalism: Classical Political Economy and the Secret History of Primitive Accumulation, some people argued that the subject was purely historical and had no contemporary relevance. Of course, the seizure of property continues throughout the world, even in the United States, where government can take property through the law of eminent domain and then turn it over to private interests.

Here is the entire commentary.manufacturing

[Via http://michaelperelman.wordpress.com]

A note-of-hand, or a three-ring binder

2010-03-15T18:58:00.000+02:00

What’s the difference between Mister Micawber and the US Treasury?

“…to illustrate the government’s commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form. They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt.” — Social Security to start cashing Uncle Sam’s IOUs

Mister Micawber did finally pay, if I remember.

[Via http://mondayevening.wordpress.com]

Green food

2010-03-15T02:54:00.000+02:00

Saw Food Inc.

Particularly fun: Factory-farmed chickens, bred such that their breast grows too fast for their bones and organs, so they can’t walk more than a few steps at a time and mostly just lie on the ground. Cows and pigs in CAFUs, Confined Animal Feeding Units, standing around caked with their own excrement – happily you can mitigate the salmonella risk by soaking your hamburger meat in chemicals or by irradiating it.

Yum yum, the American fast-food and supermarket diet!

Discovered the Nutrient Density Index. A scale rating food on minerals and vitamins but also “phytochemical” content. The greener the better, in short.

Can I validate the alleged science behind this scale? I cannot. But eating a lot of bok choy – don’t need any further science tests to push me there. Had it in stirfry tonight. Kale and spinach? Sign me up. Lunch these days is often hummus, pita from flax flour, tabouli (made my own tonight!), brown rice, fresh cukes, carrots sauteed with tagine spices. Apples from New England, not New Zealand.

Beats irradiated cow poop and freakshow chicken any day.

[Via http://reassembler.wordpress.com]

Study Finds Median Wealth for Single Black Women at $5

2010-03-12T18:54:00.000+02:00

Study finds median wealth for single black women at $5.

[S]ingle white women in the prime of their working years (ages 36 to 49) have a median wealth of $42,600 (still only 61 percent of their single white male counterparts), the median wealth for single black women is only $5.

For all working-age black women 18 to 64, the financial picture is bleak. Their median household wealth is only $100. Hispanic women in that age group have a median wealth of $120.

As if income disparity weren’t bad enough, these same people don’t even have the safety cushion provided by the accumulation of wealth. Not many people want to be unemployed, but if one end up in this position, it is much easier to take with a bit of a safety net. The United States’ prison-industrial system doesn’t help either. The question is what can we do do help these people?

[Via http://ittecon.wordpress.com]

Banning CDS - a veritable linkfest and stout opinion

2010-03-12T10:42:00.000+02:00

After Wolfie Munchau went off on one about the wickedness of naked CDS’s, the letter pages of the FT have enjoyed a slow-motion explosion of discussion (I love the pre-Internet, it is so civilised. I wish the ‘publish’ button had a one-day delay, the writing would be so much better).

This is not chronological. But the intention is to refute the knee-jerk TUCist view:

“At the ETUC, we’re increasingly concerned that Greece seems to be alone to face a renewed wave of financial market speculation, as heavily leveraged speculators take advantage of Greece’s debt crisis, exacerbating the country’s situation for a heavy profit.”

The TUC’s views are hardcoded into their thinking. But responsible governments ought to think more deeply, and this is why Buttonwood is right to criticize the “axis of feeble reasoning” behind this letter:

“we must prevent speculative actions from causing so much uncertainty on the market that prices no longer provide accurate information and state financing reaches a fundamentally unjustifiable high level”

So speculators cause the problems they are trying to profit from. This may be called ‘reflexivity’ (see this comment on Rajiv Sethi’s page – hattip Alex commenting here). Under certain conditions, speculation can become destabilising, is the view. The other view, as Buttonwood explains, is that the reason Greeks borrow more expensively is, um, their inability to run their affairs properly:

“Greece has a huge budget deficit, a debt-to-GDP ratio of more than 100%, a poor credit rating and a record of restating its accounts for the worse. A yield of 6% doesn’t seem too unjustifiable in the circumstances*”

And there are real problems with banning CDS. On to the letters. In this one:

“To ban CDS altogether would virtually remove a bank’s ability to manage credit risk; to ban naked shorts would completely remove the ability to find proxy hedges for the huge array of credit risk that cannot be sold or directly hedged . . . The CDS debate will continue as long as there is a failure to distinguish between market manipulation, speculation and risk management. Blunt limits or bans will affect all three”

Now this one:

“A liquid market needs lots of buyers and sellers, and an observable price. If a buyer knows that there is a market in credit default swap protection, they can buy with the knowledge that even if they can’t sell their bonds, they can protect themselves from losses. Hedging would be more expensive and less liquid if naked shorts were banned, which would make investors demand a bigger premium for liquidity, making funds more expensive . . . Naked CDS do not reduce liquidity; it is not a zero sum game. Underlying the arguments is often an ethical disdain for speculation. But the very distinction between “good” investing and “bad” speculating is spurious.”

And this one argues that Speculators Force countries to Mend their Ways:

“Speculation performs a vital task in the economy – that is, punishing those borrowers who have difficulty putting their house in order, Greece being a prime example. It was hardly unexpected that the Maastricht criteria would be conveniently ignored by politicians when all or most of the eurozone countries fail to abide by their own holy rules . . . Speculators then perform the role that politicians find difficult or impossible – namely to force countries to mend their ways. Indeed, had speculation been even more prevalent, the current situation might not have arisen, since interest rate spreads would have increased sooner, forcing countries to react.”

Finally, the FT itself has offered its own stout opinion:

“Proposals by European leaders to crack down on sovereign credit default swaps serve an important purpose: to deflect attention from the fact that their inability to deal with the Greek debt crisis is a trap of their own making . . . “Naked” CDS, where the buyer does not own the underlying bond, are often likened to insuring one’s neighbour’s house against fire. But while arson is easy, no speculator has deep enough pockets to bring down Greece at will . . . A ban, if it could be enforced, would also confine hedging to a world of barter, requiring one to find those with the opposite hedging needs of one’s own without intermediates”

That is my view, too. An ethical distaste for speculation is hoping to find a Divinely Convenient Coincidence: “What I find abhorrent is also bad for the world”. In this case, it doesn’t work out that way. People betting on the failure of some activity or entity may not seem like an honourable way of making money. But prices being too high or implying too great a chance of success are also a massive con; they force investors to pay more than they should for something. In the credit crunch, HBOS railed against ’shorters’ causing their bank share price to fall. But wanting their share price to be high when their balance sheet and future profits were f***ed was a grossly dishonest aspiration; it was hoping that countless pensioners would be suckered into paying too much for near-worthless equity.

So too with Greek bonds. They don’t deserve a high price. And insisting that ricketty, balsa-wood shacks be granted the right to fire insurance with miniscule premia is daft.

[Via http://freethinkingeconomist.com]

Kratos reports 4Q profit

2010-03-12T02:57:00.000+02:00

SAN FRANCISCO – Defense contractor Kratos Defense & Security Solutions Inc. reported a fourth-quarter profit Thursday.

Kratos shares fell 86 cents, or 6 percent, to $13.35. In the past year, they have traded between $6.01 and $14.56.

For the quarter that ended Dec. 27, Kratos earned $400,000, or 2 cents per share. In the same period a year earlier, it recorded a loss of $109.8 million, or $10.36 per share, including a $105.8 million charge reflecting a drop in value of its intangible assets paperless payday loans.

Kratos’ revenue rose 3 percent to $75.2 million, with government solutions revenue rising 5 percent to $67.7 million.

For the full year, Kratos reported a loss of $41.5 million, or $2.99 per share, compared with a loss of $111.1 million, or $11.95 per share, in 2008.

Full-year revenue rose 17 percent in 2009 to $334.5 million.

Kratos reports 4Q profit

[Via http://djonbri.wordpress.com]

AZ Republic conflicted: Who to detest most in AZ Senate race?

2010-03-10T18:22:00.000+02:00

Today’s lead editorial, Posturing over taxes doesn’t help Arizona, is a sight to behold. Bonded as the editorialists are to supporting the sales tax hike, it is comical to read they find McCain’s “posturing” as a new convert to holding the line on taxes, reprehensible. So culpable is he, in fact, that wet hen editorialist Kathleen Ingley shook her sopping tail feathers not only at popular McCain challenger, J.D. Hayworth, but splattered the sainted Jon Kyl as well as the newly opinionated McCain. The senior senator recently admitted he “hadn‘t given much attention” to the issue and was “unsure how he would vote” on the tax increase.

In fact, the editorial takes the same position Seeing Red AZ took yesterday — but for different reasons. Referring to McCain’s joint anti-tax statement with Jon Kyl, Ingley impugns McCain’s coordination with Kyl as “posturing,” implying that Kyl was the puppeteer moving McCain’s strings after being cornered by Hayworth. She mockingly uses the word “circus,” concluding “there is much to hate about Arizona’s Republican primary for U.S. Senate, where cynicism fills the center ring.”

It’s clear for this ‘unbiased’ journalist, Democrat politics hold greater appeal.

Since the taste of intra-party politics is so bitter (even being viewed by an outsider), we expect the newspaper will finally forgo its increasingly ignored pre-election endorsements and stick to honing the skill of factual reporting.

Fat chance!

[Via http://seeingredaz.wordpress.com]

Billionaires and Mega-Corporations Behind Immense Land Grab in Africa

2010-03-10T10:45:00.000+02:00

20+ African countries are selling or leasing land for intensive agriculture on a shocking scale in what may be the greatest change of ownership since the colonial era.

Billionaires and Mega-Corporations Behind Immense Land Grab in Africa

John Vidal, Mail & Guardian

Wed, 10 Mar 2010 08:00:01 GMT

Judging from the way that the wealthy throughout the entire world are behaving like a bunch of filthy lying stupid bastards. Why is this surprising?

The economic communities around the world and in the United States are going to get exactly what they deserve. They have predicated and based their entire economic system here in the United States and around the world on nothing but filthy lies. And graft and corruption. And so as a result, they will get exactly what they deserve. I know that I’m right regarding economic analysis and financial analysis. Because I have been right all along. Just like those people who have been reading my Journal will see that I accurately predicted the $800 trillion of market loss that took place during the third business quarter of 2009. Just like I have been correct about every single thing I did to economically and financially in the ever since I’ve been doing financial. So I don’t have anything to prove to anyone.

The fact of the matter is, the world does have something to prove to himself. And that is that it can in fact be more interested in surviving and helping the market to survive. Rather than to behave like a bunch of filthy lying stupid bastard cockroaches climbing around on a pile of garbage. Because that’s exactly what the world is becoming. We are no longer being concerned with acting like human beings. We are no longer being concerned with trying to help the market to survive. We are becoming much more concerned with how much we can grab and steal then trying to help the market to survive. And this of course is exactly why the markets of ailing. And furthermore, it is exactly why there is a second market crashed coming that will actually take place within the next 10 to 15 business quarter’s.

Of course, I don’t expect anyone to believe that. And that’s basically because most of the world has become nothing but a bunch of stupid self-serving egotistical bastards who don’t give a damn whatsoever about learning anything new. The world is much more concerned with taking everything maintain the status quo. And if anyone dares to come forward with any kind of new information. The world would rather kill that person than to actually investigate the new information.

It’s not a problem as I’ve been saying all this morning. I’m not doing this Journal for any human being here in this world and doing this Journal as an American citizen, to fulfill my obligation and my duty to serve and protect the Constitution and to protect the United States. And I’m doing this Journal as my responsibility to the creator my creator. So that I can to fill my responsibility to the creator before I die. The fact that people are involved in what I’m writing about is merely a result of happenstance of my being a human being. I would much rather write about things that don’t concern humans at all. Because humans in my way of thinking of it nothing but a huge this one to me all I life. That doesn’t mean that I don’t like what the creator has in fact created here on Earth. It just means I have a tremendous hatred for the way that humans have chosen to demonstrate their own behavior. Collectively and individually, whereby as a result. Humanity now resembles nothing but a bunch of maggots, climbing around on a pile of dead meat.

And if that’s the best of you humans can do and still try to call yourselves humanity, than you really truly do deserve exactly what you’re getting.

Economic Fact Sheet (Current as of March, 2010)

The United States currently has a national debt in excess of $12.5 trillion.
The interest on the national debt is now in excess of $11 trillion.
The operating budget for the United States government is now in excess of $43 trillion.
The members of the United States Congress stole $200 million from the Medicare fund, which was going to go for cost-of-living increases to Medicare recipients, so that the members of Congress could have their paper medical records converted to computerized medical records. The attitude by the members of Congress was that they didn’t care if they murdered American citizens as long as they get the medical protection they wanted.
The Christian conservatives and the Republican Party are taking the stand that they do not want American citizens to have any kind of healthcare the of healthcare is extended to anyone that the Christian conservatives or the Republican Party does not like. And this is based not on constitutional law or the Christian conservatives and the Republican Party being patriots. It’s based upon the Christian conservatives Republican Party demanding that the American government understand that no Christian conservative or Republican Party member will in any way ever support the US Constitution above their Christian religion and above their Christian Bible. And so as a result, their Christian Bible and Christian religion says that healthcare should not go to Hispanic Americans or black Americans or Jews or Muslims or gay Americans or Native Americans or anyone who is an immigrant that the Christian conservatives Republican Party just doesn’t happen to like.
And so as a result, the Christian conservatives Republican Party members are trying to commit mass murder in United States by denying health care to millions of American citizens who are in desperate need of medical attention. But the Christian conservatives Republican Party doesn’t really care about that because as far as they’re concerned if they have to walk through rivers of blood to make sure that their Christian religion and their Christian faith is supported more than the Constitution of these United States and the Christian conservatives will do just that.
The current level of unemployment in the United States is now over 9.7%.
The current cost for liquidating the national debt is now in excess of $40,000 per person, which means that every man woman and child in the United States would have to pay at least $40,000 to be able to liquidate the national debt.
When you look at the history of United States from the American Civil War until present day you find that the Republican Party and Christian conservatives were in total and complete control of the United States government every single time there was a financial crisis from the American Civil War to present day. And that basically means that all the policy decisions that were being made by the American government during these times when these financial catastrophes were taking place were being made strictly by Christian conservatives and the Republican Party . And of course that’s all public record.
As my financial analysis of the global economic system , in my see also section below, clearly shows, it was the Republican Party and the Christian conservatives under President Bush who gave the American banking industry $400 billion of taxpayer money and simply told the banking industry to use the money anyway they wanted to. And the banking industry did just that they use the money to pay for expensive gifts and presents and take vacations. To date, the banking industry has only paid back $30 billion out of the over $500 billion that was given to them by the American taxpayers.
The issues of profitability indexing, pursuant to profit margins and per unit costs and customer bases as they relate to compensation packages throughout the entire corporate sector have not been resolved. That basically means that most businesses are being held hostage by upper level management and executive employees in their own companies who are demanding more and more for their compensation packages. As a result of this most companies are having to readjust their per unit costs for their goods and services in such a way so that what they are doing is pricing their services and their products. So that mostly the upper class and the wealthy will be able to afford them. And this is being done so these companies and corporations can get as much money into their company as possible.
But they are in fact forgetting one of the major factors which is that while most of the money that any company gets comes from the wealthy are customers most of their day-to-day cash flow actually comes from the middle and lower income customers. This is true regardless of where that company exists. So as a result of this most of the companies in the corporate sector are operating on what is known as a cash poor basis. And this basically means that since they are pricing their goods and services in order to get the most money possible they are foregoing pricing their goods and services so they will be more affordable to the middle and lower income customers, which actually provide these companies with their day-to-day cash flow. And so as a result, these companies don’t have enough money to pay for employees or many of the other day-to-day costs that come up.
This factor has not been dealt with in any country in the world at this time. Furthermore, these companies are refusing to be honest about their financial reporting. They are constantly using and accounting,/statistical variance, which is .5%. And .5% variance is such a large variance pursuant to statistical and financial analysis that you can basically drive a moving van through the space. That is allocated for plus or minus error correction in the statistical analyses and financial analyses that are in fact done with .5% variance. This is why I have never used that level of variance statistically or financially. I’ve always used .05% variance because it is such a small variance that the statistical analysis of the profitability analysis cannot be falsified. It is true that using .05% variance does require an additional 100,000 to 200,000 calculations in order to be able to complete the analysis. But when you consider that the final product is incredibly more honest and reliable. It’s worth it.
The banking industry has turned cruel. For example here in Cleveland Ohio Keycorp is taking a lot of pride and threatening senior citizens and kicking them out of their homes so that they can foreclose on the property. This is happening all over Cleveland Ohio and KeyCorp actually is one of the most hated banks in the entire state of Ohio. But KeyCorp is not the only one who’s doing this practice. Because was really happening is that banks all over the United States are basically threatening senior citizens with foreclosure to the point where suicides are now escalating and accelerating at an alarming rate. So badly that the medical community is swamped by the number of suicide calls they are getting. And this is all happening because KeyCorp and other banks like KeyCorp are basically taking the attitude that they don’t care how many men and women and children they have to murder. They just want their money.
When you consider these kinds of factors are going on in the banking industry you realized that the other thing that’s happening is that senior citizens and homeowners are becoming incredibly sick. Do becoming physically ill as a result of the horrible attitude that KeyCorp in other banks like KeyCorp are pushing on the citizens. And there is no help for this at all.
Additionally, the medical community is helping with this because we have a hospital here in Cleveland Ohio called MetroHealth that basically is working hard. Just like KeyCorp to threaten senior citizens and have them thrown out of their homes. So that they can foreclose on the property. And basically kill the individuals. I have been personally threatened by KeyBank and MetroHealth and have recorded conversations proving that.
So MetroHealth does all these commercials where they’re talking about how good a hospital they are and yet they have been sued a number of times for Medicare fraud. They have also been sued by their own employees for unfair business practices. And they have lost doctors so badly because they don’t treat their doctors very well either. Nobody likes MetroHealth.
And for the record, it needs to be understood that my grandfather’s brother, Dr. ally Maschke, was the director of medicine at mount Sinai medical center here in Cleveland Ohio until his death. And my cousin, Dr. Victor Vertese, was also the director of medicine at mount Sinai medical center until his death. Additionally, my grandfather, Maurice Maschke, and his business partner, Mark Hanna, who founded the Hana mining company, which became the 3M company, basically built mount Sinai medical center in Cleveland. And in addition to that, my father, Maurice Maschke Junior, was on the Board of Trustees at Case Western Reserve University, University hospitals of Cleveland, Cleveland clinic, and mount Sinai medical center until his death. And in addition to that, my father, Maurice Maschke Junior, and I., were partners and co-owners of pioneer linen supply company of Cleveland Ohio for 25 years until 1975 when we sold the company.
So given all of the foregoing as actual facts. The only reason that the accelerated growth has taken place is because certain industries in the United States have in fact been making money. Only because their industries are addressing sections of the population who are otherwise disenfranchised by most of the business sector. For example Tyco International is a business that specializes and fire prevention and warning systems and security systems. And of course they’ve done a really good job because people are scared to death and living in their homes and there are so many foreclosures going on that people are having to protect their homes because in most cities the number of police has dropped so badly because most cities are in a huge budget crisis. In Cleveland, Ohio, for example, the city went from 1,500,000 people down to approximately 400,000 people in only a matter of months. And conditions are so bad in Cleveland that Cleveland is now charging nine dollars a month just pick up our garbage.
So given those facts Tyco International for one example is making a lot of money because people are having to protect their homes because they can’t really, the police that much because the number of police has dropped so the greatly because of the budget crisis going on throughout the world and throughout the United States.
Additionally, when you look at a company like Microsoft, who reported a huge profit. This is because Microsoft isn’t doing really well. Because they’re not the only reason Microsoft made this huge profit was because their previous product, Microsoft Windows Vista was actually one of the worst programs and products Microsoft ever created. And so since it did so terribly in the market naturally Microsoft’s increased now is looking fantastic, which is not because if you analyze the overall productivity and effectiveness of Microsoft you will see that they are basically floundering under Steve Ballmer’s direction.
So again, it’s really easy for people to talk about how well the market is doing that the foregoing represents the actual facts of what’s going on in business. And as I said before, I have been studying the stock market since I was six years old. At age 6 I started studied the stock market at Prescott ball and turban here in Cleveland Ohio. With one of the partner broker’s, Bernie Towell, who was a personal friend of mine. And so every day for four hours every day and age 6 until age 16 I studied the stock market and learned economics and financial analysis . At age 16, while working and being a partner and co-owner of pioneer linen spy company in Cleveland, I did my first financial analysis and profitability analysis . It was done on the linen supply company’s of Cleveland Ohio. The analysis was so good that the results were used to program some computers at the time. And in 42 years and having been a financial analyst I’ve never once been wrong in any financial projection I’ve ever done. Not once. Just like I’m not wrong now.
In my financial analysis of the global economic system in my see also section below, I clearly show that the American market system was going to lose $800 trillion of market value in the third business quarter of 2009. I further substantiated this claim last January in January of 2009. When I explained that the American market system was going to take a huge hit in the third quarter and that it would come out to about $800 trillion of market loss. And that this was in fact in line with the Kondratieff wave . And in fact that’s exactly what did happen. Which means the analysts were wrong. And I was right.
So again, if you go ahead and look at all these factors without looking at all of the peripheral details than you are going to be responding to the information in a very symptomatic, or symptomatically oriented manner whereby you will behave to the information in an extremely reactionary way. By the like term, if you look at all of the information regarding economics throughout the entire global economic system in a problematically oriented manner you will be looking at the financial information in a more anticipatory manner. And much more pervasive rather than in a stereotypical or linear manner. And as a result, you will begin to understand that all of these different factors that I have brought forth in this article right now. Actually do justify what I’m saying that the American market system is on the verge of collapse. And that the economic system for Greece is about to go under. And that unemployment in Spain and France and England is running at almost 30%.
These do not make things look like they’re going good in the United States is basically doing nothing but lying about the economic they I went to school with most of the people who run a lot of these companies in the United States and who are working on Wall Street either went to school with them at Case Western Reserve why went to school with them at Fort Lewis college board went to school with them at southern Arizona school in Tucson Arizona. Or, I did business with them throughout my life.
So again, this is a reality check. And all I can say is, if you don’t believe what I’m saying that’s not a problem. Because you haven’t believe me, for 40 years, what I’ve been talking about all of these issues facing the economic system in the United States and the global economic system. So why would you believe me now?
But the fact is that just because you may not believe what I’m saying doesn’t mean that what I’m saying is not true. Simply means you are refusing or are not able to see the veracity in what I’m saying and that’s all it means.

Redrado is Right: Fernandez’ Actions Will Do Lasting Damage

2010-03-10T02:48:00.000+02:00

On December 14, 2009, President Cristina Fernandez de Kirchner of Argentina issued a presidential decree of necessity and urgency to establish a bicentennial fund for debt service, which would be stocked with $6.569 billion of the central bank’s foreign currency reserves. Martin Redrado, the president of the central bank challenged the decree and refused to transfer his bank’s reserves into the bicentennial fund. After Redrado refused to resign, President Fernandez issued a second decree ordering the removal of Redrado. A political scandal ensued, the judiciary stepped in and ruled that the Senate must approve of President Fernandez’ proposed use of the reserves. Feeling he had sufficiently stood up for his economic principles, Mr. Redrado agreed to resign in late January.

Mr. Redrado defended two fundamental economic principles concerning the central bank. The first was that a central bank must remain independent; the second that reserves should be used strictly to ensure monetary and financial stability. He was right to do this and it is unfortunate he lost his job. President Fernandez’ attempted seizure of the central bank’s reserves will likely produce grave consequences for Argentina’s economy. President Fernandez has substantially weakened the central bank’s balance sheet. She has established two harmful institutional precedents: compromising the central banks’ independence and encouraging fiscal irresponsibility. President Fernandez’ ultimate goal of repaying government debt is commendable, however her means for achieving that goal are illegitimate. Rather than slashing spending before looming elections, the President has chosen to indulge her political base, and reject sound economic policies. Mr. Redrado did the right thing.

One of the key principles that Martin Redrado defended was the importance of maintaining an independent central bank. This principle is founded on the economic axiom that in the short-term there is a trade-off between inflation and growth. If politicians control monetary policy, they will likely pursue an expansionary monetary policy, particularly in the run up to elections; typically in a politically sensitive time, governments prefer more employment over less inflation. If non-politicized figures control monetary policy over the long-term, this trade-off need not occur. For this reason Mr. Redrado and most other economists believe a central bank’s independence to be sacrosanct. President Fernandez has breached this inviolable divide.

The second belief that Mr. Redrado upheld was that central bank reserves should be used strictly to ensure monetary and financial stability. Mr. Redrado believes that central banks should serve as an independent institution striving to manage inflationary pressures, maintain a stable currency, and promote a healthy economic environment. Mr. Redrado believes that without these reserves, the central bank’s ability to defend its currency is considerably handicapped. A corollary to this argument is that government debts must instead be paid through instruments within the government’s prerogative such as solid fiscal surpluses.

President Fernandez’ attempt to gain access to Argentina’s foreign currency reserves in order to retire government debt presents severe problems in both the short- and long-term. Most immediately, Fernandez’ actions significantly weaken the central bank’s balance sheet. In exchange for its international currency reserves, which are liquid and high-quality assets, the bank will receive a highly illiquid asset (a non-transferable government bond) and it must absorb a considerable loss to its reserves. As Mr. Redrado has stated, this weakens the central bank’s ability to defend its currency.

The central bank of Argentina currently has $47.8 billion in foreign currency reserves; so the $6.6 billion the President is taking is 14% of the bank’s reserves (Benson, 2009). President Fernandez argues that the reserves she will acquire are “excess” reserves, because the central bank currently holds more reserves than the monetary base. This is the same argument Hugo Chavez used to take more than $20 billion from the central bank of Venezuela since 2005. Economists disagree over the necessary amount of reserves. Many, like Redrado, believe that in a highly dollarized emerging economy like Argentina’s, it is important to have an abundance of U.S. Treasury bonds.

The correct level of “excess” reserves is debatable, but larger, more serious, concerns trump this issue. More significantly, the precedents President Fernandez’ actions set, the likely degradation of Argentina’s financial and governmental institutions, and the illegitimate manner President Fernandez attempted to seize the bank’s currency reserves will be long lasting.

In addition to weakening the bank’s balance sheet, President Fernandez’ actions cause other, more serious long-term problems for Argentina’s political economy. First, President Fernandez has set a precedent which compromises the central bank’s independence from the government. President Fernandez has made clear that the executive branch can remove a central banker who opposes the government’s wishes. “The bank’s independence has disappeared,” Abel Viglione, an economist with the Foundation for Latin American Economic Research (FIEL), told BusinessWeek (Raszewski, 2010). In the future, the President of the central bank will understand this precedent and may consider the political and personal implications of monetary policy (i.e. losing one’s job, as Redrado did). A central banker that weighs political ramifications in his or her decision-making process is less likely to produce sound monetary policy. Or, on the flip side, a president who directly influences the central bank’s monetary policy is less likely to attract international investments.

Second, President Fernandez has weakened the incentive for future fiscal responsibility. Anytime a government is in a budgetary bind, it will now be easier for that government to dip into the central bank to stay afloat. This possibility will lead governments to put off tough decisions like cutting expensive, but politically popular programs. Indeed, the postponement of politically thorny decisions is one reason many analysts believe President Fernandez has made this decision. In this way, President Fernandez can pay back maturing bonds, while maintaining her unsustainable spending and indulging her political base.

Third, the manner in which President Fernandez has attempted to seize the central bank’s reserves is dubious and arguably unconstitutional. The central bank’s charter stipulates that if the President wishes to remove a central bank chief, he or she must ask lawmakers for a prior, non-binding recommendation. Ms. Fernandez ignored this specification, and instead tried to fire Mr. Redrado by decree of necessity and urgency. Not only did President Fernandez disregard the central bank’s charter, but also it is unclear if this moment truly merits a decree of necessity and urgency. In fact, Judge María José Sarmiento, the initial appeals judge to hear the dispute, determined in her ruling that it was neither necessary nor urgent to create the Bicentennial Fund with central bank reserves. Moreover, some opposition parties have filed injunctions requesting the courts to rule that President Fernandez’ actions were unconstitutional (Haskel, 2010). To say the least, the legitimacy of President Fernandez’ two decrees are in serious question. While her ostensible goal of paying back bond debts is laudable, her methods are dubious. The end does not justify the means.

Veto player theory applies to President Fernandez’ recent actions as well. Veto player theory argues, “a higher number of veto players lowers the likelihood of change” (Scartascini, 2008). In the case of Argentina’s central bank dispute, Mr. Redrado acted as a veto player: his consent was necessary in order for the government to access the central bank’s reserves. Now that the main veto player, Mr. Redrado, has been removed, it is significantly more likely President Fernandez will be able to use the central bank’s reserves to pay down its debt to bondholders. Congress, consisting of some veto players itself, must still approve President Fernandez’ proposal in a debate next month.

With a key veto player in Mr. Redrado eliminated, President Fernandez has named Mercedes Marcó del Ponte to be his replacement. She is a staunch supporter of the Kirchners, and certainly would not act as a veto player on this issue. As a lawmaker in 2007, Ms. Marcó del Ponte sponsored a bill to change the central bank’s charter. Though her bill failed, the proposed changes would have expanded the central bank’s prerogative to help facilitate growth and job creation (Weber, 2010). This philosophy indicates that Ms. Marcó del Ponte would likely acquiesce to further incursions into the central bank’s reserves. The elimination of veto players regarding monetary policy makes those policies less resolute. This change sends bad signals to investors looking for a stable financial climate.

It appears that President Fernandez has chosen to sacrifice sound economic policy for political gain. It is quite possible that President Fernandez has established control over the central bank in order to monetize her budget deficits, and fund a spending spree before presidential elections in 2011 (Weber, 2010). Luis María Corsiglia, a former director at the central bank of Argentina, also speculated that President Fernandez wants to use the reserves for current spending (Weber, 2010). The problems with this policy are profound; it will weaken the central bank, weaken the Argentine peso, and lead to a spike in inflation. In fact, official inflation in January reached a 22-month high of 1.1%; however private estimates believe the real number is 2% (Brandimarte, 2010). According to the Financial Times, many economists expect inflation to reach 20% this year (Weber, 2010). With the new central bank president a loyal political ally, it seems unlikely that the central bank will raise interest rates in order to combat inflation. This all will have severely detrimental effects on the economy.

Mr. Redrado rightly defended the importance of an independent central bank. He also championed the idea that central bank reserves should be used strictly for maintaining monetary and financial stability. President Fernandez’ actions weaken the central bank’s balance sheet, decreasing its ability to defend its currency. In the long-term, the independence of Argentina’s central bank has been reduced, and will remain a concern for investors. President Fernandez’ actions also weaken the incentive for her and her successors to maintain a balanced budget; the reserves will be there to bail them out. The method which President Fernandez has pursued to repay debt and regain access to international capital markets will likely backfire. Investors’ anxiety will likely continue due to three factors: improvident spending, a compromised central bank, and high inflation. President Fernandez would be more likely to gain investors’ confidence (as well as voters) if she were to restore the bank’s independence, respect Argentine institutions, and repay debt through fiscal surpluses.

[Via http://infinitesymposium.wordpress.com]

More on Sterling

2010-03-08T17:39:00.000+02:00

Given there is no sign at all that the Conservative’s disastrous 2010 campaign is likely to improve, this question of the economy’s performance with a minority governmetn will continue.

A note from CitiGroup puts the case for the prosecution:

There is no consensus across the parties on fiscal policy, while Lib Dem voters disagree with the Conservatives on fiscal policy and prefer Labour’s policies on most other key political issues. Lib Dem voters would rather go into coalition with Labour than the Conservatives. We suspect that a hung parliament would only be able to implement and sustain major fiscal consolidation if boxed in by a market crisis. Gilts and sterling remain vulnerable.

The author acknowledges Nick Clegg’s recent vow ‘not to take any risk with UK plc’, and suspects that they LibDems will not cooperate unless given the Holy Grail of electoral reform in return. Which the Conservatives will never grant.

Clegg is getting annoyed:

“David Cameron and George Osborne are stoking up fears in the markets, actively trying to destabilise the pound and reduce the government’s ability to borrow. It’s like a protection racket: vote for us or our friends in the City will lay waste to your economy, your savings and your job.”

Too right. Chris Cook in the (you guessed it) FT has a more nuanced summary of how things might pan out:

the threat of the LibDems pulling the plug on a government is overstated. The third party would, very quickly, be seen as co-culprits for the administration’s programme. So the LibDems would be stuck with them. If they then caused the fall of the government, they would be blamed for the chaos that follows … So the path of short-term naked self interest – the most powerful force in politics – would almost always be for the LibDems to back the administration.

The Lib Dems have the most to gain and the most to lose from the hung parliament situation. Their incentives are unambigiously in the direction of fiscal responsibility. No-ones goes around thinking “I can’t vote Lib Dem – they are too serious about the deficit”. A period where the LibDems hold the sensible middle of the debate: between diehard romantic deniers on the Labour benches, and blinkered trapped-in-the-1980s CutNowCutHarders on the other side, could gain them real credibility with a public worried about the difficult, um, balancing act that needs to be performed.

Then I would say that, wouldn’t I?

Jackie Ashley’s column praises Nick’s round-the-country efforts and also holds sensible advice:

They should boldly say they will back whichever party produces an economic plan closest to their own, and will allow that party to produce a budget and essential legislation. But they will not go into coalition. They will keep their integrity, vote on issues according to their principles, and be ready to fight a following election on that record.

This doesn’t mean the choices will be easy. Hey, just look at the horrible alternatives for cutting – which of these seem attractive in a recession? Well, maybe that VAT on finance and the carbon tax …

[Via http://freethinkingeconomist.com]

Salceda has to see RP economy, right side up

2010-03-08T10:48:00.000+02:00

Commentary:

Salceda has to see RP economy, right side up

Carl Ala, a political economist from the University of the Philippines-Manila

The admission of presidential economic adviser and concurrent Albay Gov. Joey Sarte that more Filipinos got poorer since Gloria Macapagal-Arroyo came to power in 2001, must have been a punch on the gut of the current occupant in Malacanang and highlights the rift between the two neo-liberal economists.

Though from the stand point of political economy I agree with Salceda in his contention that the rich got richer while the ranks of the poor swelled during the last 9 years, I completely disagree when he said that there were 34 consecutive quarters of progress in the country. Salceda’s point that despite deregulation, privatization and liberalization there are still poor people and that more neo-liberal policies should be done to solve poverty is also way off.

On the contrary, it is these neo-liberal policies themselves that he and Gloria Macapagal-Arroyo pushed are among the biggest reasons why many Filipinos now are wallowing in poverty. He should see the Philippine economy the right side up.Data from the National Statistical Coordination Board, which showed that the number of poor Filipinos – five-member families living on barely over P1,200 a month — hit 27.6 million in 2006 from 25.472 million in 2001. Hunger incidence nearly doubled from 11.4 percent in 2000 to 20.3 percent in 2009.

These also are the same policies and laws that big foreign and local businesses used to bleed the economy dry. Salceda even said that profits of the country’s top 1,000 corporations jumped by 21 percent per year while the return on their equity or investments increased by 15 percent per year since the President took power.

“Their total earnings amounted to P3.1 trillion of which P2.1 trillion were pocketed as dividends or earnings of the stockholders and only P1 trillion were re-invested,’’ he added.

So the solution here is obvious, instead of further expanding such neo-liberal policies, these should be scrapped. The next administration should also seriously consider implementing genuine agrarian reform and nationalist industrialization to solve the glaring disparity between the rich and the poor in this country.

The basic problems of Philippine society especially giving land to farmers and secure jobs and wages for workers should be addressed first to uplift the lives of at least 90% of our population. Basic and social services like education and health should be rendered free or at affordable prices so that most Filipinos will benefit from it. Then the next administration should seriously consider formulating a true national economic plan with the primary goal of satisfying the ever-increasing needs of the Filipino people, so that our level of material and cultural life will be raised.

Of course, economists who caused and justified the problems we are encountering now should also be held accountable. In this light I think that Gov. Salceda is also liable, especially with the recent government data saying that Bicol is the “tambay” capital of the country with 37% of its labor force being under-employed and the prices of food, light and water in the region are at its all time high. As the chair of the Regional Development Council (RDC), these falls squarely on Salceda’s lap and now being the top economic adviser no wonder we are in this deep a trouble. # # #

[Via http://carlcala.wordpress.com]

Consent of the governed - and the lack thereof

2010-03-08T02:17:00.000+02:00

Glenn Harlan Reynolds: By: Glenn Harlan Reynolds

Sunday Reflections Contributor

March 7, 2010 Wash Examiner

Our Declaration of Independence observes:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”

“Deriving their just powers from the consent of the governed.” This is boilerplate American history, and something that Americans — and, in particular, America’s political class — have long taken for granted.

But now things are looking a bit dicey. According to a recent Rasmussen Poll , only 21 percent of American voters believe that the federal government enjoys the consent of the governed. On the other hand, Rasmussen notes, a full 63 percent of the “political class” believe that the government enjoys the consent of the governed.

It’s tempting to stress the disconnect here, and that disconnect is certainly huge. Unsurprisingly, the political class — which talks mostly to itself — thinks that it is far more popular, and legitimate, in the eyes of the country than is in fact the case. In this, as in so many things, America’s political class is out of touch with reality.

But forget the views of America — where, it seems likely, more people believe in alien abductions than in the legitimacy of our rulers — and look just at the more cheerful view of the political class.

Even among the rulers, only 63 percent — triple the fraction of the general populace but still less than two-thirds of the political class — regard the federal government as legitimate by the standards of America’s founding document. The remainder, presumably, are comfortable being tyrants.

These numbers should raise deep worries about the future of our republic. A nation whose government does not rest on the consent of the governed is a nation whose government holds sway only by inertia, or by force.

It is a nation vulnerable to political shocks, usurpation, or perhaps even political collapse or civil war. It is a body politic suffering from a serious illness. Those who care about America should be very worried.

But we’ve had enough political drama in recent years, so I’ll go for a more prosaic comparison: The once-heady brew of American freedom has become watery and unsatisfying.

In fact, when I think of the federal government’s brand now, I think of Schlitz beer. Schlitz was once a top national brew. But, in search of short-term gains, it began gradually reducing its quality in tiny increments to save money, substituting cheaper malt, fewer hops and “accelerated” brewing for its traditional approach.

Each incremental decline was imperceptible to consumers, but after a few years, people suddenly noticed that the beer was no good anymore. Sales collapsed, and a “Taste My Schlitz” campaign designed to lure beer drinkers back failed when the “improved” brew turned out not to be any better. A brand image that had been accumulated over decades was lost in a few years, and it has never recovered.

The federal government, alas, finds itself in much the same position. The political class sold its legitimacy off in drips and drabs. As “smart politics” has come over the past decades to mean not persuasion but the practice of legerdemain, the use of political deals, cover from a friendly press apparat and taking advantage of voters’ rational ignorance, the governing classes have managed to achieve things that would surely have failed had the people known what was going on.

But though each little trick may have slipped by the voters, the voters have nonetheless noticed that the ultimate product isn’t what it used to be. The end result, as with Schlitz, is a tarnished brand. And rescuing tarnished brands is hard.

It gets worse. Not long ago, the federal government enjoyed a stellar reputation for honesty and competence. Now, according to a recent CNN poll, three-quarters of Americans think federal officials aren’t honest . (There’s no separate survey here on what the “political class” thinks, but I suspect that its numbers would be sunnier, but still appalling, as above). So what do we do with a federal government that many voters think is illegitimate and dishonest?

Well, the Declaration of Independence allows for the prospect of altering or abolishing the government we have in order to get a government that’s closer to what we want. That needn’t involve anything as violent as the American Revolution or the Civil War, but the need for change — real, structural change as opposed to campaign-slogan “change” — is becoming more obvious.

In the past, America has managed to reinvent itself without transformations as wrenching as the Civil War or the Revolution. As the legitimacy of our current arrangements becomes increasingly threadbare, it is perhaps worth thinking about how this might be accomplished again. Because when a great beer dies, it’s sad. But when a great nation dies, it’s tragic.

Examiner contributor Glenn Harlan Reynolds is a law professor at the University of Tennessee. He hosts “Instavision” at PJTV.com, and blogs at Instapundit.com.

These are the key data

Surveys of 1,000 Likely Voters

February 27-March 2, 2010

Issue Democrats Republicans Economy 41% 46% National Security 37% 47% Iraq 38% 42% Health Care 42% 45% Education 41% 38% Immigration 34% 39% Social Security 39% 42% Taxes 37% 48% Government Ethics 35% 28% Abortion 38% 42%

Voters now trust Republicans more than Democrats on eight out of 10 key issues regularly tracked by Rasmussen Reports, but the gap between the two parties has grown narrower on several of them.

Although the issue of health care continues to be at the forefront of the national political debate, voters rate health care as number five on the list of 10 important issues. The economy remains the top issue of voter concern as it has been for over two years. The only exception being last September when voters put government ethics and corruption at the top of the list.

Republicans lead Democrats 46% to 41% in terms of voter trust on the economy. In early January 2009, just before President Obama took office, Democrats held a nine-point lead on this issue. More voters who make under $20,000 annually trust Democrats on this issue, but voters in higher income ranges favor Republicans.

Voters trust Democrats more on government ethics and corruption, 35% to 28%. But 27% are not sure who to trust.

[Via http://cliftonchadwick.wordpress.com]

Filed Under: It’s Obviously Bush’s Fault!

2010-03-05T18:38:00.000+02:00

(Headline –NYTimes) Rash of Scandals Tests Democrats at Sensitive Time

The NY Times is reporting on a “rash of scandals” – but Chris Matthews last night was all over Rev . Al Sharpton for the Democratic Party problems in NY.

One Democrat Governor (Spitzer) has resigned (prostitute), leaving Paterson, the Lt. Gov. to rise to Governor – but Patterson is under huge pressure to resign (multiple issues – corruption, lying to the FBI, and interference in a criminal matter).

Of course, that is not the whole of it.

There is Democrat Charlie Rangel who has stepped down (temporarily?) over an ethics “admonition” while there is an investigation of not one but TWO unreported bank accounts of $500,000 EACH, use of FOUR rent-controlled apartments simultaneously, failing to report rent for properties in the Caribbean etc. etc.

Then there was the failed appointment of an inarticulate Kennedy to a Senate seat by Patterson, followed by an actual appointment of a replacement who is polling 21%…

It’s starting to unravel on the East Coast.

http://www.nytimes.com/2010/03/05/us/politics/05memo.html

That is a surprise, considering OUR Democratic Party problems — which we would hear more of if we had a press corps in Sacramento that was not fully compromised.

Have you read anything about State Senator Pat Wiggins in the press, except for my post yesterday?

Didn’t think so.

The California press is not corrupt — they are lazy and fully accomplished in “go along and get along.”

[Via http://usna1957.wordpress.com]

The "Uh-oh" moment

2010-03-05T10:53:00.000+02:00

A strong and relevant article I’ve been mulling over these days:

Oligopoly meets oligopsony: The case of permits

Abstract

This paper derives market equilibria (in demand functions and in bidding strategies) between oligopolists and oligopsonists in a market with intermediates and no competition in final markets. To the best of my knowledge, this theme has not been explored, despite two observations: Firstly, the commonly applied framework of non-competitive and competitive fringe firms has implausible properties for the limit of purely strategic players. Secondly, real world cases correspond at least potentially to such strategic interactions, e.g., non-competitive players selling and buying permits (CO2 and SO2). The major implications are that these non-competitive markets are characterized by a kind of double marginalization (on the demand and the supply side) resulting in too little trade and wrong price signals.

Article available here.

What the author demonstrates mathematically is that markets for ecosystem services, because they are characterized by a very small number of very large players, don’t comply with the competitive market hypothesis – meaning the traded volumes are too small and the prices achieved can either be too low (meaning too much pollution will be emitted) or too high (meaning a sub-optimal level of pollution).

This problem is ever more important when we consider markets, such as biodiversity offsets, where the benefits are not fungible, that is, they are mostly felt on the spot or close by. If the efficiency conditions are not respected, the results are suboptimal – why would we have markets then?

Punchline: markets can work, but what are the appropriate market designs, players and regulations?

[Via http://enviroecon.wordpress.com]

DST

2010-03-05T02:43:00.000+02:00

Okay, DST will soon be upon us. In case you have been living under a rock for the last 20 years, DST means “Daylight Shifting Time”. This is the twice-yearly folly of changing the time displayed on our clocks in order to provide the illusion that we are actually doing something.

In all honesty, Daylight Saving Time is meant to force people to use less energy. By putting more daylight between the time when people come home from work and sunset, it essentially forces less time between sunset and bedtime, when most people turn off energy-using devices. Thus, energy should be saved.

Except that it’s offset by more lights used in the mornings. And it’s also offset by the extra “things” that we drive to in the summer because there’s more light to do them, like going shopping or driving over to a park so we can exercise. I heard a radio piece (I know, fantastic journalism there, Steve, providing made-up facts without any kind of reference at all…) a couple of years ago talking about the change to extend DST by a month a year. Evidently this was intended to save even more energy than we were saving before. The Federal Government was so sure that this was going to work, the earmarked $100,000,000 to study the effects of this change. Just think – for that amount of money, we could either:

Provide 500,000 laptops to kids in poverty.

Partner with Food for the Hungry and give something like 5,300,000,000 pounds of food to people who need it (that’s 5 pounds a day for 10 years for 290,411 people).

Provide 25,000,000 Bibles through the Bible League.

Give 20,000,000 mosquito nets to protect against disease in Kenya through ProjectMosquitoNet.org.

Support 3,333,333 missionary months with Gospel for Asia. That works out to be 27,778 missionaries for 10 years.

Or, we could study an effect of changing our clocks.

Personally, I think we got ripped off. I want my $0.33 back.

See these sites for more information:

Study on DST

One Laptop Per Child

Project Mosquito Net

Food for the Hungry

Bible League

Gospel for Asia

[Via http://thtevie.wordpress.com]

Sat Phones for Chile - Hillary Clinton's Very Odd Trip to South America

2010-03-03T18:36:00.000+02:00

The day after causing a diplomatic crisis with the United Kingdom, Hillary Clinton was in Chile meeting with President Michelle Bachelet. Chile is only now finding out the true extent of the damage from Friday’s 8.8 earthquake, and it is incredible.

Chile is an unusual country by any measure. It is over 2,700 miles long and on average 110 miles wide. There is one major highway down the length of most of the country. To get to much of Patagonia, you have to go through Argentina. Now, that highway has massive craters and rifts that will take months if not years to fix. The infrastructure that the movement of aid is dependent upon has been critically disrupted. Whole towns have been washed away in a series of tidal waves. Cities and towns are cut off and the only access to much of the coast is helicopters.

And our Secretary of State in answer to this crisis brought with her as a sign of the United States commitment and friendship 25 satellite phones. Does this seem just a little bit odd? I think I could have done better running down to the local Best Buy.

Chile has not asked for much. They are a resource rich and proud country that is the envy of much of South America. The rule of law prevails and the trains run on time. But under the circumstances and with such devastation, even the wealthiest of countries can use a helping hand. Heavy lift capacity, water purification, spare parts, and heavy equipment don’t grow on trees and are needed fast. People are sleeping in the open and need shelter and food. Rebuilding will take decades, but there are immediate areas where we can help.

With a diplomatic debacle in Argentina the day before, Ms. Clinton and her boss have gambled on a no win scenario where we have damaged our relationship with our closest ally. The paucity of her gesture to Chile is stunning in comparison. Argentina is a resource rich country that has been mismanaged its economy into the ground repeatedly for over 100 years. The country only became an ally a few months before the end of World War II when the Allied victory was inevitable and then became a haven afterward for Nazi war criminals under the Peron dictatorship. The Peronists still rule there. Chile has only ever asked for free trade.

How can we rationalize these contradictory responses? It doesn’t make sense. There is a cognitive dissonance between the current administration and common sense, it would seem. We are rewarding grifters and ignoring the people who follow the rules and work hard once again. But then, that theme also seems to be running through this administration.

[Via http://oceanaris.wordpress.com]

AppStore revenues - is Morgan Stanely wrong?

2010-03-03T10:31:00.000+02:00

I estimated the revenues generated by the AppStore (considering 30% commission, an avg. price per paid app of US$ 2,89 and 3,37 apps downloaded per month per device – including iPhones, iPod touch and iPad and establishing the 1,9 bn. downloads at September 2009).

To estimate the number of paid apps downloaded I used a figure from AdMob stating 16,3% of downloaded apps are paid by customers.

The results: US$ 103 million in revenues for Apple in the past quarter (vs. US$ 17 million estimated by Morgan Stanely, representing 16,5% of my estimates)

Using Morgan Stanley estimates only 0,8% of total apps downloaded are paid apps…seems bit low to me!

Find attached excel model: AppStore revenues model

[Via http://aconsideration.com]

Economic Scene: In Tracking Recovery, Jagged Lines

2010-03-03T02:51:00.000+02:00

Could the economy be at risk of a double dip?

Skip to next paragraph Enlarge This Image David Kidwell/Pocono Record, via Associated Press

Job losses are expected to have accelerated in February, mainly because of snowstorms.

We’re now in the midst of the worst run of economic news in almost a year. Home sales have dropped. So has consumer confidence. Stocks peaked on Jan. 19.

This Friday may well bring the darkest piece of news yet, at least on the surface. Forecasters are predicting that the Labor Department will report that job losses accelerated in February, perhaps back above 100,000. The main reason will be the temporary hit from the big snowstorms last month. Yet there is reason to wonder if the economy also has bigger problems.

The weekly data on jobless benefits are narrower and less consistent than the monthly jobs report, but they have the advantage of being more current. From early January to late February, the number of workers filing new claims for jobless benefits rose 15 percent. Over the previous nine months, this number was generally falling.

Economies rarely move in a straight line, and — as the better-than-expected numbers on Tuesday on vehicle sales suggested — the recent run of bad data is probably overstating the troubles. But whatever you thought at the start of the year about the recovery — strong, moderate, fragile — you probably need to be more pessimistic today.

“The strength of data we saw at the end of last year exaggerated the strength of the underlying economy,” Richard Berner of Morgan Stanley, says. “And now we’re seeing some pullback.”

This is especially troubling because the economy is still such a long way from being healthy. Lawrence Katz, the Harvard labor economist, estimates that 10.6 million jobs would need to materialize immediately to return the job market to its condition when the Great Recession began. For it to get there four years from now, the economy would have to add 316,000 jobs a month. That pace would be faster than in any four-year stretch of the 1990s boom.

•

The economy’s biggest problem has not changed. When bubbles pop, they wreak enormous, lasting damage. Credit stays hard to get for years because banks need to rebuild their balance sheets. Families and businesses, whose net worth isn’t what they thought it was, have debts to pay off.

Over the last two years, households have been paying down their debts at a fairly good pace. But they aren’t yet close to being finished.

The average household still has debt — mortgages, credit cards, car loans and the like — that requires payments equal to roughly 17.5 percent of its disposable income. That’s down from a peak of 18.9 percent in 2008. It is still above the 1980-95 average of about 16.6 percent, according to the Federal Reserve. So debt payments will continue to hold down spending in the months ahead.

The economy did so well late last year in large part because companies began building up inventories they had whittled when they cut production during the recession. What worries some forecasters is that this buildup won’t last. Consumer spending, they say, will remain too weak to get companies to keep increasing production and to begin adding workers. “Not too long from now,” says Joshua Shapiro of MFR, a research firm in New York, “you’re going to need other demand to kick in.”

The second problem is that the stimulus program and the Fed’s emergency programs are in the early stages of slowing down.

These programs have done tremendous good, as I’ve written before. The bubbles in housing and stocks over the last decade were far larger than an average bubble, and yet the resulting bust is on pace to be shorter and less severe than the typical one in the wake of a financial crisis no fax payday loans. That’s not an accident. It’s a result of an incredibly aggressive response by the Fed, Congress, the Bush administration and the Obama administration.

Just consider home sales. The stimulus bill last year included a tax credit for first-time home buyers that originally expired on Dec. 1. Like clockwork, home sales fell 16 percent in December. From March to November, sales rose 36 percent.

The credit has since been extended, but if you combine the other fading parts of the stimulus with household debt burdens, you can see why some economists are concerned. Mr. Shapiro predicts monthly job growth will be only 50,000 to 75,000 by the end of this year. To keep up with population growth — to keep unemployment from rising — the economy needs to add more than 100,000 jobs a month.

Recent events in Congress, however, have offered some cause for optimism. Last week, the Senate passed a small-bore $15 billion jobs bill, focused on road building and employer tax credits. But on Monday, Democratic leaders announced a proposal that would do more: a $150 billion bill to extend jobless benefits, Medicaid payments to states and some tax cuts.

Some of the extensions last through the end of the year, rather than for just a few months, as is typical. Senator Jack Reed, Democrat of Rhode Island, told me the bill was meant to prevent what he called the “Perils of Pauline” problem — referring to the silent movie serial that placed its heroine in repeated danger.

The most recent extension of jobless benefits expired on Sunday, and Senator Jim Bunning, Republican of Kentucky, has blocked a further 30-day extension. Senator Susan Collins, Republican of Maine, has joined Democrats in trying to pass the temporary measure.

If Congress passed the longer-term extension and possibly added some measures — like more aid to struggling states, maybe the single most effective form of stimulus — it could offset the winding down of other government programs. (Yes, these efforts to prop up the economy will have to end sometime soon, and debt reduction will have to begin. But the main historical lesson of financial crises is that governments are too timid and too quick to step back.)

It’s also possible that Mr. Shapiro and his fellow pessimists are being a bit too dire about the private sector. Inventories are still quite lean, and some restocking is likely to continue. Banks are becoming more willing to lend, Fed surveys show. Strong growth in China and other emerging markets will help American exporters like General Motors and Cargill. To my mind, these forces make a true double dip unlikely.

Still, the jobs number on Friday will be ugly. Macroeconomic Advisers, a research firm, estimates that the snow kept 150,000 to 220,000 people off a payroll when the government conducted its jobs survey in early February. But most of those jobs will reappear in March — the month when many economists think job growth will, at long last, resume.

Here’s the thing, though. Even the optimists are not very optimistic. Morgan Stanley expects average monthly job growth of just 110,000 this year. The great jobs deficit — 10.6 million and counting — will be with us for years.

So no matter when the recent run of bad news comes to an end, the economy is still going to need help.

E-mail: leonhardt@nytimes.com

Economic Scene: In Tracking Recovery, Jagged Lines

[Via http://srconor.wordpress.com]

Thousands Of Federal Workers Are Furloughed Without Pay Today Because Of GOP Obstructionism

2010-03-01T18:50:00.000+02:00

This post was originally published on Think Progress. Over the weekend, approximately 400,000 laid-off workers may have lost their unemployment benefits, COBRA subsidies to help defray health care costs expired, and loans for small businesses ran out of time — all because of Sen. Jim Bunning (R-KY). Last week, the House passed an extension of these benefits. Bunning, however, blocked [...]

Thousands Of Federal Workers Are Furloughed Without Pay Today Because Of GOP Obstructionism

Mon, 01 Mar 2010 17:27:00 GMT

As I’ve said before, the one thing that you can count on the Christian conservatives to do always is to break as many laws as possible because they don’t really care about the Constitution. And we know that’s true, because I’ve said many times, the battle of Washington took place in 1932 and the battle of Washington was an attempt by the Christian conservatives of these United States to destroy the Constitution and to murder president Hoover. Because the Christian conservatives had gotten the help of some Republicans to ring about insurrection against these United States.

Know my grandfather, Maurice Maschke, was actually one Republicans who was called to Washington in an emergency secret meeting to broker a deal between the Christian conservatives and the majority of the Republican Party and other members of the American government to prevent the political coup and insurrection of the United States that was being orchestrated by Christian conservatives that resulted in the battle of Washington. And of course at the battle of Washington, Douglas MacArthur ended up going on trial because he was seen shooting and killing American veterans and murdering their wives and killing their children and shooting them to death and setting fire to American veterans with flamethrowers.

So when the Republican Party want to talk about how good and patriotic they are the fact is, they are not good and they are not patriotic they are the biggest bunch of liars and some of the worst bloodthirsty killers in the history of these United States. They have never been patriotic girl only been certain members of the Republican Party or certain sections of the Republican Party that have been patriotic. But in actuality the Republican Party began to have problems during the Civil War. It was on the evening prior to the signing of the Emancipation Proclamation. That is when everything really began to fall part in the Republican Party. The evening before the Emancipation Proclamation was to be signed, a large faction of the Republican Party met in Chicago Illinois with the head of the Christian conservative movement. And an agreement was reached between the two groups. This was done because the Christian conservatives did not want the Emancipation Proclamation to be signed they did not under any circumstances want to give up their right to own black Americans and to treat them is not American citizens but as pieces of property. This of course was a carryover from the signing of the Declaration of Independence when the representative named Rutledge from South Carolina took it upon himself to declare to John Adams and Thomas Jefferson that North and South Carolina made up primarily of fundamentalist white Christians would never under any circumstances looked upon black people as black Americans or even people. Because as far as they were concerned they were nothing but property.

So the upshot of the entire meeting was that in the Republican Party broke into two distinct sections. And the largest majority of the Republican Party basically became subject to the control of the Christian conservative movement. That meeting in Chicago did not stop the signing of the Emancipation Proclamation. But what happened was that the register but as and the Republican Party then surreptitiously enlisted the help of other parties, who then presented. John Wilkes booth to Ford’s theater, where Lincoln was murdered. And so it was the Christian conservatives and Republican Party who actually got on Wilkes booth to do that through other groups pursuant to the entire event at Ford’s theater and the reason why that happened was because it wasn’t just how history ports it. Because history ports it like John Wilkes booth with disgruntled and all these other factors will that’s not the whole story. The real story is that Abraham Lincoln was murdered at Ford’s theater. Just 48 hours before he was to sign another legal document. And that is the document that the Christian conservatives and the Republican Party to this very day. Will refuse to ever acknowledge or even to have to be discussed hardly at all in Congress is known as the order of reparation. And the order of reparation was an Executive Order that was going to pay back to let Americans for the despicable treatment that they had suffered as slaves of the white fundamentalist Christians. But because the white fundamentalist Christians and the large section of the Republican Party become so racist. They made sure that order was never signed.

And I know this is true, because as I said before, the Maschke family goes all the way back to the battle of independence and was actually friends with George Washington. In addition to Moses Cleaveland and the Maschke family was actually one of the founding families of the city of Cleveland. And I am one of only three survivors of the original four brothers, who were the children of the ancestor Maschke was friends with general George Washington. So when I talk about American history regarding the Civil War it’s important to understand that I do know what I’m talking about because my grandfather. Not only ran the entire Republican Party for all northeastern Ohio, but was the U.S. Customs inspector for the entire United States under president Harding and his wife my grandmother was born in 1866. And as I was growing up she told me an awful lot about what happened in American history. She told me the real stories not the ones that the Republicans and everyone else is trying to whitewash to revisionism.

And of course, I have documents to certify what I’m talking about, which I’m going to show one of those documents now.

Let this Journal entry show very clearly that Minnie Rice became Minnie Rice Maschke. And of course , Minnie Rice Maschke was the wife of Maurice Maschke was the political boss and Republican Party leader for all northeastern Ohio. And of course the actual Republican who worked with others to stop the battle of Washington and stop the insurrection against United States government by the Christian conservatives.

Let this Journal entry also show that this is a political pass that was given to my grandfather Maurice Maschke, who was the Republican leader for all of the entire Republican Party for all northeastern Ohio, where he was actually the doorkeeper or one of the doorkeepers at the Republican national convention of 1908.

When I talk about what is going on in this country and about the Republican Party Republican Party doesn’t really want to tell all the secrets I know because if I did they would be no Republican Party. I know more about what they have done in history than they ever want me to tell. The fact of the matter is Republican Party has never been patriotic of this country. They been everything but patriotic, and they know what. And I’m serving notice on them, because I am a patriot of these United States and to my dying breath, I will in fact defend the Constitution. I will be a patriot and at the Republican Party doesn’t like me an American Jew from the family of American Jews who go all the way back to the battle of independence. If the Republican Party doesn’t like me being a patriot and defending the Constitution against their act of insurrection and their racism and their bigotry and their supported slavery. The options very simple all Republican Party is to do it on to Cleveland Ohio and kill me. As far as I’m concerned the only way I will allow the Republican Party to destroy the United States with your theocratic fascism is over my dead body and if this stupid bastards of the Republican Party really think they are to destroy this country and if they don’t like the fact that family of Jews was actually part of the founding fathers of this country. Then my message to the Republican Party is very clear. Bring it on.

And this of course is more substantiation while I said. My grandfather was actually everything I am saying. And as I’ve said before, these are the very last years I’m going to live in the world. And I am going to die defending the Constitution of these United States. I am going to die defending women’s rights. I’m going to die, being a patriot of these United States. Just like my father before me was like his father my grandfather was before him. So again, if the Christian conservatives and the Republican Party don’t want me to be a patriot. And they want to continue lying about their patriotism, every time they speak out and try to lie to the people of this country about their patriotism. They are can to find me. And I am a patriot of these United States, and I’m prepared to die for every word I’m writing right now. I’m prepared to die at any given moment in defense of these United States and the Constitution. Unlike the Christian conservatives or the Republican Party. They are prepared to die for this country because they don’t really care about this country older trying to do is destroy this country. Just like they did the battle of Washington, or tried to.

As I said do just above. I’m only getting started Republicans in Christian conservatives I’m only getting started. And it’s just going to get more detail from here and more hot your days at destroying this country and trying to promote your ideology of theocratic fascism is just run into a very large obstacle me and the only way you will stop me to come to Cleveland and kill me and if you Christian conservatives and Republican are the people in Washington anywhere in the country want to come to Cleveland and murder an American Jew who has declared that they are patriot of these United States and whose family goes all the way back to the battle of independence, be my guest. I have a lot of friends who would like to see the headlines the next day. As your Christian conservative movement and Republican Party are shown murdering an American Jew who is declared their patriotism for the Constitution. Because when you do that. You won’t have a political party and you won’t have a religious movement. Because you be shown for exactly the traitors you have always been. And if I have to die in order to make sure that you are shown of the conspirators of treason that you have been all through the history of this country. No problem. Like I’ve said, bring it on.

Economic Fact Sheet (Current as of Jan. 2010)

1. The United States currently has a national debt in excess of $12 trillion.

2. The interest on the national debt is now in excess of $11 trillion.

3. The operating budget for the United States government is now in excess of $43 trillion.

4. The members of the United States Congress stole $200 million from the Medicare fund, which was going to go for cost-of-living increases to Medicare recipients, so that the members of Congress could have their paper medical records converted to computerized medical records. The attitude by the members of Congress was that they didn’t care if they murdered American citizens as long as they get the medical protection they wanted.

5. The Christian conservatives and the Republican Party are taking the stand that they do not want American citizens to have any kind of healthcare the of healthcare is extended to anyone that the Christian conservatives or the Republican Party does not like. And this is based not on constitutional law or the Christian conservatives and the Republican Party being patriots. It’s based upon the Christian conservatives Republican Party demanding that the American government understand that no Christian conservative or Republican Party member will in any way ever support the US Constitution above their Christian religion and above their Christian Bible. And so as a result, their Christian Bible and Christian religion says that healthcare should not go to Hispanic Americans or black Americans or Jews or Muslims or gay Americans or Native Americans or anyone who is an immigrant that the Christian conservatives Republican Party just doesn’t happen to like.

And so as a result, the Christian conservatives Republican Party members are trying to commit mass murder in United States by denying health care to millions of American citizens who are in desperate need of medical attention. But the Christian conservatives Republican Party doesn’t really care about that because as far as they’re concerned if they have to walk through rivers of blood to make sure that their Christian religion and their Christian faith is supported more than the Constitution of these United States and the Christian conservatives will do just that.

6. The current level of unemployment in the United States is now over 10%.

7. The current cost for liquidating the national debt is now in excess of $39,000 per person, which means that every man woman and child in the United States would have to pay at least $39,000 to be able to liquidate the national debt.

8. When you look at the history of United States from the American Civil War until present day you find that the Republican Party and Christian conservatives were in total and complete control of the United States government every single time there was a financial crisis from the American Civil War to present day. And that basically means that all the policy decisions that were being made by the American government during these times when these financial catastrophes were taking place were being made strictly by Christian conservatives and the Republican Party . And of course that’s all public record. And if the Christian conservatives or the Republican party say that these financial catastrophes were not their fault, That would mean that all the public statements that the Christian conservatives and the Republican party, were making during the times when all these financial disasters were taking place, to the news media and the general public were lies. On the other hand if they say that they were not lying then, that means that they are lying now. But either way you look at, the Christian conservatives and the Republican party are being found out for the liars that they have always been, and that they still are today.

9. As my financial analysis of the global economic system , in my see also section below, clearly shows, it was the Republican Party and the Christian conservatives under President Bush who gave the American banking industry $400 billion of taxpayer money and simply told the banking industry to use the money anyway they wanted to. And the banking industry did just that they use the money to pay for expensive gifts and presents and take vacations.

10. To date, the banking industry has only paid back $30 billion out of the over $500 billion that was given to them by the American taxpayers.

11. The issues of profitability indexing, pursuant to profit margins and per unit costs and customer bases as they relate to compensation packages throughout the entire corporate sector have not been resolved. That basically means that most businesses are being held hostage by upper level management and executive employees in their own companies who are demanding more and more for their compensation packages. As a result of this most companies are having to readjust their per unit costs for their goods and services in such a way so that what they are doing is pricing their services and their products. So that mostly the upper class and the wealthy will be able to afford them. And this is being done so these companies and corporations can get as much money into their company as possible.

But they are in fact forgetting one of the major factors which is that while most of the money that any company gets comes from the wealthy are customers most of their day-to-day cash flow actually comes from the middle and lower income customers. This is true regardless of where that company exists. So as a result of this most of the companies in the corporate sector are operating on what is known as a cash poor basis. And this basically means that since they are pricing their goods and services in order to get the most money possible they are foregoing pricing their goods and services so they will be more affordable to the middle and lower income customers, which actually provide these companies with their day-to-day cash flow. And so as a result, these companies don’t have enough money to pay for employees or many of the other day-to-day costs that come up.

This factor has not been dealt with in any country in the world at this time. Furthermore, these companies are refusing to be honest about their financial reporting. They are constantly using and accounting,/statistical variance, which is .5%. And .5% variance is such a large variance pursuant to statistical and financial analysis that you can basically drive a moving van through the space. That is allocated for plus or minus error correction in the statistical analyses and financial analyses that are in fact done with .5% variance. This is why I have never used that level of variance statistically or financially. I’ve always used .05% variance because it is such a small variance that the statistical analysis of the profitability analysis cannot be falsified. It is true that using .05% variance does require an additional 100,000 to 200,000 calculations in order to be able to complete the analysis. But when you consider that the final product is incredibly more honest and reliable. It’s worth it.

12. The banking industry has turned cruel. For example here in Cleveland Ohio Keycorp is taking a lot of pride and threatening senior citizens and kicking them out of their homes so that they can foreclose on the property. This is happening all over Cleveland Ohio and KeyCorp actually is one of the most hated banks in the entire state of Ohio. But KeyCorp is not the only one who’s doing this practice. Because was really happening is that banks all over the United States are basically threatening senior citizens with foreclosure to the point where suicides are now escalating and accelerating at an alarming rate. So badly that the medical community is swamped by the number of suicide calls they are getting. And this is all happening because KeyCorp and other banks like KeyCorp are basically taking the attitude that they don’t care how many men and women and children they have to murder. They just want their money.

When you consider these kinds of factors are going on in the banking industry you realized that the other thing that’s happening is that senior citizens and homeowners are becoming incredibly sick. Do becoming physically ill as a result of the horrible attitude that KeyCorp in other banks like KeyCorp are pushing on the citizens. And there is no help for this at all.

13. Additionally, the medical community is helping with this because we have a hospital here in Cleveland Ohio called MetroHealth that basically is working hard. Just like KeyCorp to threaten senior citizens and have them thrown out of their homes. So that they can foreclose on the property. And basically kill the individuals. I have been personally threatened by KeyBank and MetroHealth and have recorded conversations proving that.

So MetroHealth does all these commercials where they’re talking about how good a hospital they are and yet they have been sued a number of times for Medicare fraud. They have also been sued by their own employees for unfair business practices. And they have lost doctors so badly because they don’t treat their doctors very well either. Nobody likes MetroHealth.

And for the record, it needs to be understood that my grandfather’s brother, Dr. ally Maschke, was the director of medicine at mount Sinai medical center here in Cleveland Ohio until his death. And my cousin, Dr. Victor Vertese, was also the director of medicine at mount Sinai medical center until his death. Additionally, my grandfather, Maurice Maschke, and his business partner, Mark Hanna, who founded the Hana mining company, which became the 3M company, basically built mount Sinai medical center in Cleveland. And in addition to that, my father, Maurice Maschke Junior, was on the Board of Trustees at Case Western Reserve University, University hospitals of Cleveland, Cleveland clinic, and mount Sinai medical center until his death. And in addition to that, my father, Maurice Maschke Junior, and I., were partners and co-owners of pioneer linen supply company of Cleveland Ohio for 25 years until 1975 when we sold the company.

14. So given all of the foregoing as actual facts. The only reason that the accelerated growth has taken place is because certain industries in the United States have in fact been making money. Only because their industries are addressing sections of the population who are otherwise disenfranchised by most of the business sector. For example Tyco International is a business that specializes and fire prevention and warning systems and security systems. And of course they’ve done a really good job because people are scared to death and living in their homes and there are so many foreclosures going on that people are having to protect their homes because in most cities the number of police has dropped so badly because most cities are in a huge budget crisis. In Cleveland, Ohio, for example, the city went from 1,500,000 people down to approximately 400,000 people in only a matter of months. And conditions are so bad in Cleveland that Cleveland is now charging nine dollars a month just pick up our garbage.

15. Furthermore, as I predicted on May 21, 2009, the American market system had already lost approximately $500 trillion of market value. And, in my journal entry (see my LiveJournal entry of May 21 2009). Then on May 22, 2009, I accurately predicted that the American market system would lose approximately $800 trillion of market value. (see LiveJournal entries of May 22, 2009, entry #1, entry #2, and entry #3, ). And the market did lose that much money. So, I was right. As I have always said. In 42 years of being a financial analyst, I have never been wrong on any financial projection I have ever done. Just like I was not wrong in 2009, with the above projections, I am, by the like term, not wrong now.

So again, it’s really easy for people to talk about how well the market is doing that the foregoing represents the actual facts of what’s going on in business.

And as I said before, I have been studying the stock market since I was six years old. At age 6 I started studied the stock market at Prescott ball and turban here in Cleveland Ohio. With one of the partner broker’s, Bernie Towell, who was a personal friend of mine. And so every day for four hours every day and age 6 until age 16 I studied the stock market and learned economics and financial analysis . At age 16, while working and being a partner and co-owner of pioneer linen spy company in Cleveland, I did my first financial analysis and profitability analysis . It was done on the linen supply company’s of Cleveland Ohio. The analysis was so good that the results were used to program some computers at the time. And in 42 years and having been a financial analyst I’ve never once been wrong in any financial projection I’ve ever done. Not once. Just like I’m not wrong now.

In my financial analysis of the global economic system in my see also section below, I clearly show that the American market system was going to lose $800 trillion of market value in the third business quarter of 2009. I further substantiated this claim last January in January of 2009. When I explained that the American market system was going to take a huge hit in the third quarter and that it would come out to about $800 trillion of market loss. And that this was in fact in line with the Kondratieff wave . And in fact that’s exactly what did happen. Which means the analysts were wrong. And I was right.

Now, it’s important to remember that anyone can say anything about the market that they want. But being able to back up what they say takes an expert. And someone who understands the science of financial analysis. And that’s something I have been doing for 42 years.

Therefore, if you go ahead and look at all these factors without looking at all of the peripheral details than you are going to be responding to the information in a very symptomatic, or symptomatically oriented manner whereby you will behave to the information in an extremely reactionary way. By the like term, if you look at all of the information regarding economics throughout the entire global economic system in a problematically oriented manner you will be looking at the financial information in a more anticipatory manner. And much more pervasive rather than in a stereotypical or linear manner. And as a result, you will begin to understand that all of these different factors that I have brought forth in this article right now. Actually do justify what I’m saying that the American market system is on the verge of collapse. And that the economic system for Greece is about to go under. And that unemployment in Spain and France and England is running at almost 30%.

These do not make things look like they’re going good in the United States is basically doing nothing but lying about the economic they I went to school with most of the people who run a lot of these companies in the United States and who are working on Wall Street either went to school with them at Case Western Reserve why went to school with them at Fort Lewis college board went to school with them at southern Arizona school in Tucson Arizona. Or, I did business with them throughout my life.

So again, this is a reality check. And all I can say is, if you don’t believe what I’m saying that’s not a problem. Because you haven’t believe me, for 40 years, what I’ve been talking about all of these issues facing the economic system in the United States and the global economic system. So why would you believe me now?

But the fact is that just because you may not believe what I’m saying doesn’t mean that what I’m saying is not true. Simply means you are refusing or are not able to see the veracity in what I’m saying and that’s all it means.

Annotations Regarding Non-Pro-Life Activities Of The Republican Party And The Christian Conservatives And The Catholics Of The United States:

The Christian conservatives and the Catholics don’t ever want to be responsible for the fact that since 78% of the United States is pro-life Christian that basically means that 78% of all the women and children murdered in the United States are killed by pro-life Christians and Catholics. It also means that Christians in United States are demanding that the world understand that to them being pro-life means killing, because while the Christian conservatives and Catholics are demanding that everyone understand they are pro-life. They are with their own actions, supporting a number of forms of killing.

78% of all the women murdered in the United States are killed by pro-life Christians and Catholics.
78% of all the children abused in the United States are abused by pro-life Christians and Catholics.
78% of all the children murdered in the United States are murdered by pro-life Christians and Catholics.
78% of all the murders that take place in the United States are committed by pro-life Christians and Catholics.
78% of all the soldiers in the United States, who go out and kill are pro-life Christians and Catholics.
78% of the membership of the National Rifle Association (The NRA ), which support GUNS THAT KILL are pro-life Christians and Catholics.
Every single white supremacist group in the history of United States has always been white fundamentalist pro-life Christian. And these white supremacist groups are dedicated to killing anyone who is not white and Christian.
The Army of God is a white fundamentalist Christian group who is dedicated to murdering and killing every single nonwhite Christian in the United States.
78% of all the people who favor and support the death penalty meaning killing people for committing crimes are pro-life Christians and Catholics.
78% of all the ministers in the United States who carry firearms to church and are threatening to kill anyone who comes near the church was not white and Christian are pro-life Christians and Catholics.
78% of all the crimes against gay people in the United States are done by pro-life Christians and Catholics.
Every month between one and two transgendered females are murdered and every single one of these killings is done by pro-life Christian.
White fundamentalist Christians were the ones who demand the right to own black Americans and to kill them whenever they wanted to during the signing of the The Declaration of Independence.
White fundamentalist Christians were the ones who took over the Republican Party during the battle of Washington and try to overthrow the United States government under president Hoover at the battle of Washington in 1932.
White fundamentalist Christians were the ones who took over the Republican Party on the evening before the signing of the Emancipation Proclamation during the American Civil War. And who then used the Republican Party to hire John Wilkes Booth to murder President Abraham Lincoln.

When you have all these forms of killing being supported by pro-life Christians and Catholics it’s easy to understand that the pro-life Christians and Catholics are demanding that everyone else be responsible for their own actions. But the white fundamentalist Christians and Catholics under no circumstances want to be responsible for anything they do because they are demanding that the entire world understand that to them being pro-life means killing, because that’s what they support killing. That’s why that those who claim to be pro-life are now becoming known as nothing more than, “Killers For Christ”. And of course it the white fundamentalist Christians and Catholics don’t like what I’m saying or want to take exception to what I’m saying they need to disprove everything that follows, and every single item in my see also section below.

Rights, Necessities and Privileges

2010-02-26T18:01:00.000+02:00

The presidential champion of the progressive movement in America at the turn of the last century, Theodore Roosevelt, had rhetoricized about health care. The original debate to drive home a political point in an America that was very divided among the very wealthy and the rest in an era of tycoons from Vanderbilt to Henry Ford and Thomas Edison, who were building industrial America was that health care was a right and not a privilege. And it appears that that byline uttered by the most famous last president to grace Rushmore is driving President Obama’s agenda on health care reform.

If the Bill of Rights were enacted into law along with the Constitution, why was not health care? The doctors could argue the Democrats to argue that medicine was not as developed then. Even George Washington was bled before he died in because of pneumonia in 1799. But given the level of medical knowledge at every point in medical history since Hippocrates, administering medicine to cure, as all physicians aver before they graduate with their medical degrees, cannot be denied if the patient cannot pay because health care is a duty of the supplier and a necessity of the consumer, not a right of either and the privilege of none.

The rising cost of health care in the United States is because of the Hippocratic oath that governs the practice of medicine. Doctors who need to get paid for their services still provide those services to those who cannot pay themselves, only to be paid by someone else by redistribution through the rising insurance premia, whether that be the safety net of Medicare and Medicaid through taxes and national debt or privately provided health care.

In the modern economic analysis of pure public goods, even if health care is made a legal right, it would first be redundant given the obligations involved in medical education and second, horses even if given the legal rights, can be taken to the pond to drink, but may not choose to do so. The existence of rights does not automatically imply their use and in the case of health care, the mitigation of its use if diseases can be prevented through better behaviors or preventive medical interventions. And therefore, the case for the government provisioning health care on the grounds that it is a right is even flimsier. Health care is a pure public good only in the event of a contagion, which, in and of itself, in the emerging world of genetic treatments and drugs, can be eminently preventable.

From the consumer perspective, because health care is a necessity for every man, woman and child from conception to death ― a very highly inelastic demand curve ― similar to clean air, clean water and nutritious food, the role of health care policy becomes one of ensuring equal access to all people, citizens and non-citizens on U.S soil, to health care that meets certain minimal quality standards at an affordable price. Similar to food stamps, those who fall below a certain percentage of the poverty line must be provided direct government assistance through the social safety net. The goal of health care reform must be health stamps.

The only privilege granted to the human condition is to work. And the United States must work to rebuild itself and in the process fix health care.

[Via http://ctamirisa.wordpress.com]

The Krugman Blues, song by Loudon Wainwright III

2010-02-26T10:36:00.000+02:00

This week in the magazine, Larissa MacFarquhar profiles the New York Times columnist Paul Krugman. In this video, Loudon Wainwright III performs “The Krugman Blues,” a song he wrote about the Nobel Prize-winning economist. Wainwright sings, “Sometimes when he’s on the TV, in the background you can spot his school logo. Paul teaches at Princeton U, so Krugman ought to know.” “The Krugman Blues” is on Wainwright’s new album, “10 Songs for the New Depression,” which is available for sale on his Web site. Watch the full performance below.

Read more: http://www.newyorker.com/online/blogs/tny/2010/02/the-krugman-blues.html#ixzz0gdYPz5we

[Via http://thecriticalangle.wordpress.com]

Traiberman-Li Blog

2010-02-26T02:53:00.000+02:00

Two of my former high school debate friends, Sharon Traiberman and Jimmy Li, have graduated college and have started a blog. I highly recommend it for people interested in good analytical arguments, particularly with regard to economics and ethics.

On an aside, Sharon Traiberman remains one of the people I felt were truly treated unfairly by the the politics of Missouri high school debate. He has always been a brilliant thinker and unfortunately innovation outside of the narrow political box of Missouri high school debate has never been consistently rewarded.

[Via http://ducksandeconomics.wordpress.com]

2nd Annual Meeting of the Society for Environmental Law and Economics

2010-02-24T18:56:00.000+02:00

Date(s) of Conference:

Friday-Saturday, March 26-27, 2010

Location:

Emory University School of Law

Atlanta, GA

Description:

The meeting will build a community of environmental scholars interested in working in the intersection of law, economics, and environmental or natural resource issues.

Contact information:

Jonathan Nash, jonathan.nash@emory.edu

[Via http://lawconf.wordpress.com]

BA Death Wish

2010-02-24T10:49:00.000+02:00

For more than a decade BA has been struggling to compete against the likes of Virgin, Ryanair and EasyJet who pay their cabin crew much less, operate with far lower costs, and have far greater flexibility. The fact that it has managed to survived is due to its hugely profitable trans-Atlantic routes, and the high fares traditionally paid by business travellers. Since the credit crunch, that side of the business has been devastated and chief executive Willie Walsh simply has no choice but to cut costs. Yesterday, the fantasists at Unite claimed that the cabin crew strike was essential if BA remained a “premier airline”. Actually, premier airlines put their customers first and try not to cause havoc to the plans of hundreds of thousands of holidaymakers and business travellers.

[Via http://jucameron.wordpress.com]

Disappointments Galore

2010-02-24T02:53:00.000+02:00

Well the calm at the beginning of the week did not last very long. Although the overnight price action can hardly be labelled as panic given both FX and equity volatility remain relatively well behaved, there is no doubt that worries are creeping back into the market psyche. It seems that markets are once again trading on each piece of news and for the most part the news is not encouraging.

A plethora of disappointments will set a negative tone for markets today. Risk has come off the table in the wake of the worse than expected February German IFO business confidence survey and US Conference Board consumer confidence. Cautious comments by Bank of England Governor King in which he kept the door open to further quantitative easing and a ratings downgrade of four of the largest Greek banks has added to the damage.

The German IFO was likely dealt a temporary blow by severe weather conditions. The 10.5 point fall in US consumer confidence from an already relatively low level had no mitigating factors however, and revealed a deterioration in job market conditions, which combined with renewed weakness in jobless claims, does not bode well for next week’s US payrolls report, pointing to a decline of around 40k in February payrolls.

Overall, the market mood has darkened and there is little to turn sentiment around in the near term. In prospect of likely weak reading for US payrolls next week and continuing worries about European fiscal/debt problems any improvement in risk appetite is likely to be limited. This will help bond markets, the USD and JPY but most risk trades will face pressure.

It is still worth being selective in FX markets. The EUR remains the weak link and is set to struggle to make any headway, with upside likely to be restricted to resistance around 1.3747. Similarly GBP is set to struggle in the wake of King’s comments as well as ongoing economic and deficit concerns, with GBP/USD vulnerable to a drop to around 1.5293. In contrast, Asian currencies and commodity currencies look far more resilient.

[Via http://econometer.org]

Catchy Titles, The Goose That Laid The Golden Egg - and The Long Road Back

2010-02-22T18:51:00.000+02:00

I was advised a bit ago that I needed to make great opening paragraphs, something to catch the attention of those who visit here). I assume that means headlines, too. It was good and sound advice. Thanks, Lloyd.

When the message is grim, what constitutes an attention-grabber, though?. . .

I am not into alarmism, so I won’t go around yelling “The Sky Is Falling!” Even if it is, what good would yelling do? Better to just share thoughts and perhaps some of us will find common ground and a way forward. My two sons are having to try to find work in this economy, and so far it is not pretty. I am free-lancing in mechanical engineering, and as closely as engineering is tied to manufacturing, that is not a nice place to be, not early in the year 2010.

So, on with the post. . .

…This morning I found Who Broke America’s Job Machine? by Barry C. Lynn and Phillip Longman – at Washington Monthly, one of the Progressive sources I like, even though they go overboard a bit on slamming all things Republican or conservative.

The job machine is broken? No Duh. Go figure.

If it took this long for a non-MSM to figure this out, we are in bigger trouble than even the authors think.

But, more important, there is more to it than the top-down activity the two authors point to. That, of course, would be the Progressive slant on things: Big is evil. Bigger is more evil. Really big is heinous. I am here to tell the readers/visitors here that it happened at all levels of our manufacturing economy. The big boys get noticed, but – with 90% of new jobs always being created by small businesses and over 50% of our overall economy being small businesses – the real meat and potatoes of The Great Job Killing was on Main Street, not Wall Street.

Yes, as they point out, many companies were bought up. I know. I was working with companies who got bought up. The buyers I was affected by, though, don’t show up among those the authors list: ITW and Triangle Industries. Most people have never heard of them.

America’s job machine being broken – that is something that is off the map, as far as the authors are concerned, though, in my own experience and from my own observations, its seeds were planted long ago. It didn’t start in the robber baron days of Rockefeller and Morgan. There have been iterations then that separate the present from them. The only continuity from that time is the mentality (that the authors did note) of the powerful wanting to be even more powerful. No, the beginning was of its own making, after the war, and it had to do with the rise of the accountants.

Jobs had always been an outgrowth of any economy, yet were a feedback mechanism that – through a form of resonance or chain reaction – had the capacity to take an economy and turn it into a self-sustaining engine. But the self-sustaining part of that engine was not a given; it could be killed off. That is what happened, and it wasn’t the actions of a few at the top – although the GOP economic philosophy has certainly contributed to it.

The Beginning of the End

All this was obvious more than 15 years ago. The direction things were headed then, if not halted, had to end up here, sooner or later.

The arbitragers of the 1980s started it (with groundwork laid by the accountants of the 1970s), thanks to REAGAN and the message he brought. THAT part the authors got right. And trickle down was never going to reach down to Main Street; it was all a scam, part of killing the unions, the real engine of the middle class. It took another 10 years to pretty much have run its course, but it didn’t get noticed until the tech bubble burst. Overlooked by Lynn and Longman is how important an engine is the American consumer, and the part that the higher union wages played in driving the most prosperous economy the world had ever seen.

Products are only made when there is a market. A market doesn’t exist unless there is money in the hands of some number of buyers. One could even arrive at a rule of thumb: The more buyers, the bigger the market. The tricky part of that rule is the term “buyers.” There were essentially the same number of people in 1950 as there were in 1938, yet the number of buyers had increased immensely. Buyers are people with money, looking to spend it. When there are buyers (money in the hands of people wanting to spend), there is a market. Buyers seek out sellers, and sellers seek out buyers; where they collide, that is a marketplace. And America was a marketplace like none, ever. The world was in awe of America, because of that marketplace where everything could be bought, where everyone seemed to have money to spend. (Yet it was also a time when a great deal of saving was going on. Buying and saving – it was an almost perfect blend. But not forever…)

The Role of the Unions – Perhaps the Worst PR People in History? One Wonders. . .

One of the things overlooked in all the economic histories of the 20th century is how important a role was played by unions, in terms of putting more money into the hands of more people. The free-marketeers look at everything from the perspective of the oligarchs and the wealthy. Their perspective always read into it that unions were (yes, pretty much past tense, now) parasites – takers who gave back as little as possible (hence all the nightmare anecdotes about union workers in plants who wouldn’t lift a screwdriver/hammer/wrench/screw because it was against union rules).

But the real truth of it is that the height of the unions was also the height of American prosperity. The mean per capita income in 1968 has been in decline ever since.) Much of that prosperity overflowed into the coffers of the corporate moguls than any time in their lives, including the boom times of the 1920s. More people having more money meant more sales, and the corporations were expanding hand over fist. The American consumer was the Goose That Laid The Golden Egg. The good times were rolling. But that wasn’t good enough for the oligarchs. They looked at the wages being paid and saw it as money stolen from them at the point of a government gun. Beginning in the early 1970s efforts were undertaken to reverse all that, and over the course of the next 40 years those efforts pretty much succeeded. Number one on their list targets was unions. Unions drove other wages up, so even non-union plants were paying more and putting more money into the hands of workers. All of that was good for the overall economy, but the oligarchs couldn’t see that some of that money was coming back around to themselves. All they could see was the wage differential, which they saw as money they had never had to pay out before. They wanted that money back in their own pockets, not the pockets of their workers.

One of the other outflows they didn’t like was in benefits packages – primarily in retirement funds. That will be dealt with farther on in this post. .

The Road to Oblivion

So, how did we get from 1968 to now? How did we go from American consumers being the engine that drove the world economy to the present, in which the job economy is broken?

The programming was step-by-step. First they had to get us to buy what we hadn’t earned enough to pay for. Then they had to get rid of the credit limits on cards and loans. Then they had to have the MSM convince us that union workers were a bunch of parasites. Then they had to get us to believe that our kids shouldn’t be working with our hands was dirty. Underlying it all was the “American Dream” of “everybody should own their own house.

“The Bean Counters are Going to Be the Ruin of us All”

In business, it all began – certainly by the 1970s – with the idea that accountants could make more money for manufacturing plant owners by manipulating funds, that taking the long view was pretty stupid. Many a person in that decade declared that bean counters were going to be the death of us all. Every one of them was right. Engineers, who had built the American manufacturing juggernaut, were increasingly excluded from the inner circle, because what did engineers have to do with moving money here or there?

All the consolidation talked about in the article was a later-comer to the picnic. First it had to be beaten into the American manufacturer that the quick buck was better than the slow grind of actually making their product. The move in retirement plans from profit sharing and other entitlements (necessary in the 1950s and 1960s just to entice workers, who at that time were the engines of profit) brought on an increased knowledge among owners of the power of large sums of money – the money that was just sitting there, waiting for workers to get old. Those large entitlements were also money out of the pockets of the owners, so devices had to be invented and popularized, with which the owners could get out of the cradle-to-grave business on behalf of their workers. And the accountants were exactly the people to do it, to show them how it could be done. Retirement plans by the late 1970s and early 1980s were replaced by IRAs, and later on, 401Ks. And the onus of running those fell not on the businessmen, whose accountants could maximize ROI, but on the individuals, who had no sophistication or knowledge of how to do anything but what their parents had done: Put money away in something “blue chip” and let it do its thing. And the “smart” thing to do was to diversify. But since individuals had no expertise in even picking one stock, placing hedge bets was way over their heads; they all needed help.

Enter the money market managers, who found themselves with billions and billions of dollars to play with. These were more accountants, the ones who really drove the race to the bottom, while stuffing their pockets to bursting.

The excess money that had been sitting in corporate coffers was now freed up to chase whatever higher stock was hot for the moment. The days of money manipulation began in earnest. The idea of getting something for nothing (as oppose to producing something people wanted and going through the gymnastics of connecting buyers and product) began to take off.

How the Stock Market Distorts Business – and not in a nice way…

And no one was more affected by that dynamo than business CEOs. Once money started chasing short-term gain, with a vengeance, corporate boards began to hold CEOs accountable for each quarterly report being rosier than the last. Once that kicked in, CEOs couldn’t take the long view, even if they wanted to, even if it was better for the company in the long term. Considerations for the workers and the community went right out the window. The power shifted to stock owners, and they enforced it with a vengeance.

But who were the stock owners? With money market funds, owners were anonymous, and were anything but Mom and Pop plopping down savings in blue chips. Blue chips had to contend with start-ups and their rocketing short-term profits, so blue chips became passé. When money market managers used their increasingly sophisticated programs to decide what to buy and when – and (most important to the process of killing the American juggernaut) when to sell.

American business power passed from manufacturing owners to CEOs to accountants to money market managers to stock trading programs.

The programs are not people. Like the recent SCOTUS decision, people have long been declared to be superfluous. That decision is actually behind the times. Effective ownership of all publicly-traded companies is now in the hands of computer programs. Trigger points have been set – originally by humans, but certainly by now it is now in the hands of the programs themselves, to make decisions on what stocks to buy and sell, but what are the buy-and-sell points. Humans take little part in the process, other than to take credit.

Those trigger points decide where money flows, and where money flows, CEOs are happy – because “stock owners” are happy. And money market managers are happy because their creations are making money for their “customers” – supposedly Moms and Pops all across our great land.

But, as Elizabeth Warren has shown us, savings in America is essentially zero percent (down from 11% in about 1970). So, who owns those stocks then? Corporations do. Anyone and any THING (sorry, SCOTUS, but I still insist on calling corporations “things”) can buy into money market funds.

So now we have a situation where corporations are investing in each other, in order to grab quick profits and then get out. They have cannibalized each other, and they continue to, to this day.

Jobs? We don’t need no stinkin’ jobs!

The American worker – excess and unwanted baggage (even though our buying was the true engine that drove it all) – is now the bum in the back alley, with skills that aren’t really wanted, skills for jobs that the corporations only begrudgingly offered in the first place. Jobs are the first things to go, when the money flow heads elsewhere. “Trimming the fat,” it is called.

Who needs workers, when the salaries and wages can be better spent “investing” in some other sucker company that still hires people. And since there are so MANY “other companies” in the world, why not invest in those where labor is cheapest, where profits are highest, and things like OSHA and EPA don’t apply (and don’t cut into profits)?

The only thing really understood here is that it will be a long, long time before things are ever really good again. One could argue that America’s time has come and gone. One would certainly hope not. There will be islands of prosperity, in fluff industries mostly, still selling American elan or playing off the American idea of strong individualism with slick ads and hot chicks.

We are still on the road to the bottom. We will not know when we have gotten there, not until some time after we are on the way back up.

But the way back up? That is for another post. I DO actually have thoughts on that, and I see others out there getting a glimmer of what it will take. . .

Steve

[Via http://feet2thefire.wordpress.com]

Backyard Poultry Flock - Spring 2010

2010-02-22T10:41:00.000+02:00

Brown Leghorn Rooster

Egg Producing Chickens

Breeds Available

Two types of chickens are used for egg-production purposes in small flocks: the dual purpose and the egg producing breeds.

Egg producing chickens have been bred for maximum egg production rather than meat yield, and can produce up to 300 eggs per year. They have a mature body weight of 1.8-2.0 kg (4-5 lb). These chickens are usually of the White or Brown Leghorn type. They lay white eggs.

Dual purpose chickens are often raised in small flocks for both meat and egg production. They are smaller than commercial broilers, but reach a mature body weight of approximately 2.5 kg (5.5 lb) for females and 3.0 kg (6.5 lb) for males. The hens will produce 200-250 eggs per year. Common breeds include Rhode Island Red crossed with Barred Rock, Columbian Rock, or Light Sussex. These hens are brown egg layers.

Brooding and Rearing

If pullets are purchased just prior to laying, it is important to obtain information on the management procedures used. This includes lighting program, feeding program, vaccination program and any disease exposure. This history will aid in planning flock management and assist in determining causes of any production problems. Pullets should weigh approximately 1.3-1.55 kg at the start of egg production.

Lighting

Proper light management is important when raising pullets in order to obtain maximum egg production. Lighting will stimulate egg production and help to synchronize the pullets so that they start to lay at approximately the same time.

If pullets are raised in a windowless barn which is light-tight, the daylengths should be controlled with a time-clock. During the brooding and rearing period (1-20 weeks), the daylength can be held at 8-10 hours of light or gradually reduced from 12-13 hours of light per day to 8-10 hours by 6 weeks of age. To bring the pullets into production, the light should be increased abruptly to 12 hours/day. It can then be gradually increased to 16 hours. Once egg production has been stimulated with increased lighting, the day lengths should not be reduced, or the hens will lay fewer eggs.

Often with smaller flocks, pullets are raised in barns with windows or are outside during the day and are subject to natural daylengths. They are also usually hatched in the spring. In this situation, by the time they reach 19-20 weeks of age, the natural daylengths are decreasing. Increasing the daylength with supplementary lighting will help bring them into peak production, and synchronize the flock into similar egg production cycles.

Light intensity should be held at 5 lux (.5 foot candles) in the barn, if possible. At this intensity it is still possible to read a newspaper, but with some difficulty.

Hours of Light to Provide by Age of Chicks

0 to 7 days—– Lights should be on 24 hours/day
1 to 6 weeks—–Lighting can be: a) 8-10 hours/day or b) 12-13 hours/day, gradually reducing to 8-10 hours
6 to 19-20 weeks—–Lighting should be held at 8-10 hours/day
19 to 20 weeks—–Lighting should be increased to 12 hours/day (egg production stimulated)
20 weeks—–Gradually increase from 12 to 16 hours/day

Nests and Perches

If hens are to be kept in litter (straw) pens, or outside during the laying period, nest boxes should be provided. One nest (30 cm x 30 cm), should be provided for every 5 hens. They should be placed approximately 60 cm off of the floor, with perches to help hens reach the entrance. Nesting material, such as straw, should be placed inside the nests and replaced regularly.

Hens will sit on perches if they are provided, especially at night. If perches are provided, hens will also be less likely to stay in the nests at night. This will help to keep the nests clean.

Perches made of a hardwood are easier to clean and disinfect than those made with a softwood. They should be approximately 33 mm wide at the top. If perches are too wide, they can cause breast bone deformities. The perches should be deep enough so that the hens cannot puncture their own footpads by curling toenails around the bottom. Rounded edges at the top are also recommended. It is recommended that 12 to 15 cm of perch length be provided for each bird.

Temperature

A temperature range from 12-26 °C is suitable for hens during egg production. Hotter temperatures may decrease feed intake and therefore reduce egg production. Hens will increase feed intake in temperatures colder than 12 °C in order to meet energy requirements. Colder temperatures may decrease egg production, and in extreme cases freeze combs and feet. Temperatures should never go below freezing.

Nutrition

Nutrient recommendations for egg-laying chickens are illustrated below.

Approximate Ages (weeks) Approximate Weights at End Crude protein % Calcium % Phosphorus % Starter 0 – 6 weeks 0.62 – 0.75 18 0.9 0.45 Grower 6 – 17 weeks 1.3 – 1.45 16 0.8 0.45 Pre-layer 17 – 19 weeks 1.2 – 1.55 17 2.0 0.45 Laying > 19 1.5 – 2.5 17 – 19 3.8 – 4.0 0.45

Feed Consumption

Laying hens should always have ready access to feed. They will eat from 100 to 120 grams of feed each day. Feed consumption is affected by temperature, age of bird, and water availability (should be constantly accessible).

Calcium

Calcium intake is very important for laying birds, because the egg shell contains a great deal of calcium. It is also important in the pre-lay period (2 weeks prior to egg production), because this is the time period in which the pullets build up their medullary bone to enable them to manufacture egg shells. A deficiency in calcium can lead to skeletal problems, reduced egg production and thin egg shells. The main calcium source for laying hens is limestone and/or oystershell in the feed.

Yolk Color

Preference for yolk color varies. Some people like the pale yellow color, while others prefer dark gold yolks. Yolk color is influenced by pigment content in the feed. Essentially, if the hens have access to greenfeed, alfalfa or corn, the yolks will be darker.

Egg Handling

Eggs should be collected regularly and nesting material kept clean in order to avoid bacterial contamination. Eggs should be allowed to cool gradually prior to refrigeration to avoid sweating (which could also lead to contamination). Eggs are normally stored for 3-4 days at temperatures of 10-13 °C before marketing. Albumen (egg white) quality will decrease as the length of storage increases.

If eggs require cleaning, they can be brushed off with sand-paper or washed. If washing, a water temperature at least 12 °C higher than the eggs themselves should be used. A sanitizer should also be used in the water (not dishwashing liquid). Water with a high iron content should not be used. Eggs should be rinsed and then completely dried prior to storage.

White Leghorn Rooster

Poor Egg Production

A problem often encountered with smaller flocks is poor egg production or sudden drops in production. There are many possible causes for low egg production, and often it is a combination of a few different factors. These factors may also influence egg size and shell quality. The items discussed below should be examined and corrected if necessary.

Feed which is poor in quality, with nutrient deficiencies and imbalances, can lead to reduced egg production. Protein, energy, and calcium are the more common culprits. An extra calcium source, such as oystershell or limestone, is usually required with diets made up of poultry supplement and grain. Also, if hens run out of feed or water, a drop in production could result. Toxins contained in the feed may also cause a drop in egg production.

Lighting programs which are not appropriate may cause problems. Low production may result if the pullets are reared with daylengths that are too long, or there is no proper increase in daylength to bring them into production. Daylengths which are too long may result from sunlight coming into barn windows. Hens may stop laying eggs if daylengths are decreased at anytime during the production period.

Sudden changes in temperature can affect egg production. Hot temperatures may cause a reduction in feed consumption, leaving the hen with insufficient nutrient intake to produce eggs. Both sudden increases and decreases in temperature will stress hens, and could adversely affect production.

Poor ventilation may cause a build-up of gases which might cause a drop in egg production. High stocking densities will also adversely affect egg production.

The age of the birds will also affect how many eggs they produce. Commercial pullets begin laying eggs at 19-20 weeks of age, and peak production occurs around 24-26 weeks. The hens in smaller flocks may not start until later. Production begins to drop slowly after the peak and by 72 weeks of age is down to 70% of the hens laying in a given day. The hens will eventually cease to produce and go into a moult (lose and replace feathers). Following moulting, hens will lay eggs for at least a second year. Egg production after a moult will be approximately 10-15% lower than the first year.

Various diseases will cause a drop in egg production. These include infectious bronchitis, mycoplasma gallisepticum (MG) and avian encephalomyelitis. Parasite infections such as coccidiosis and mites can also cause a reduction in production. If a disease is suspected to be present, a veterinarian should be consulted.

Disease

Nutrient deficiencies, cannibalism, parasites and cage-layer fatigue are specific diseases affecting laying birds.

Cage-layer Fatigue (osteoporosis)

Cage-layer fatigue, as the name implies, is typically found only in hens housed in cages. Inadequate dietary calcium, phosphorus and/or vitamin D can, however, can lead to the disease in hens housed on litter floors.

High levels calcium are put into each eggshell, and this calcium is removed daily from bones. Normally the bone is replaced, but in situations of nutrient deficiency (calcium, phosphorus, and/or vitamin D), the hen is unable to do so. Poor skeletal development and lack of exercise (especially in cages) are also causative factors.

Hens with cage-layer fatigue have lost a significant amount of bone and will go out of production. Other signs of the disease include paralysis, fragile and deformed bones, fractures, and weak egg shells. In extreme cases, hens will die.

Treatment by removing hens from the cages and placing on the floor with easy access to feed and water may be effective. However, prevention of the disease is much more important.

Good nutrition during the rearing and pre-lay periods is essential for good skeletal development. Proper levels of calcium, phosphorus and vitamin D are important during the laying period. In small flocks it is common to supplement the diets with a calcium source (oystershell, limestone) that the hens can obtain free-choice.

Why is common Sense so Uncommon?

[Via http://survivalfarm.wordpress.com]

America at the Crossroads: Optimism

2010-02-22T02:41:00.000+02:00

This post continues the discussion of America’s philosophical decisions about our future as a nation – the “inner life” – with a focus on the need for conservatives to recognize the essential optimism of our ideas, and why that’s a valid and advantageous perspective. For my previous posts on optimistic conservatism, see here and here.

As America faces her great historic crossroads, one of the most important advantages conservatism brings to the table is its inherent optimism. I think even Churchill, who famously said conservatives are pessimists, would agree with me on this. Because the optimism of conservatives isn’t about what government-enforced collective projects can achieve – it’s about the inherent benefits, and the predictably superior outcomes, of liberty.

Churchill’s characterization accepted the definition of moral and political optimism that was pervasive in the West of his time: an optimism that was about great corporate enterprises for human improvement, based on universalist abstractions that ignored big chunks of human reality. Redesigning mankind, managing him through bureaucracy and technology better than he could manage himself: these were the parameters of “optimism” against which Churchill opposed the greater realism of conservatives.

But while I agree that it is inherent in conservatism to be realistic, I disagree that realism is inevitably pessimistic. The context in which I make this judgment is precisely the one that matters to the main dispute between conservatives and leftists in America today: that is, the dispute over the size and proper scope of government. In this dispute, conservatives are by far the more optimistic faction regarding the features and prospects of human life.

Conservatives don’t get up in the morning thinking, “If only the government were punishing X, subsidizing Y, and regulating Z, I might have a chance today. But since government hasn’t gotten on the stick about that, I’m screwed.” Conservatives don’t think in terms of the deck being stacked against them or others – as an inevitable condition of existence – unless the state is intervening in various activist ways to restack it. Conservatives, in short, have a whole dense, varied, and meaningful concept of “life” that doesn’t depend on institutionalized coercion of others as a bulwark against scary monsters hiding under the bed of human existence.

The basic idea of life in the mind of the conservative is an optimistic one. It is optimism that says all you need is opportunity, and if you work hard you can have as much as you, personally, want. It’s optimism that says it matters if you exercise discipline and self-control, because you can set yourself up for good things later, instead of bad things. It’s optimism that says we hold the means of happiness in our own hands; that no condition of poverty or lowly position is or must be permanent; that the successes of others are not losses for us, and indeed may often enhance our own prospects for success. It’s optimism to recognize that human existence is not a zero-sum game, in which we start out with a finite “pie” and are fated merely to spend eternity refining our rules for carving it up.

Understanding that the pie is constantly enlarged, refreshed, assembled and baked anew by the sum total of lives being lived around us – that’s optimism, and it is integral to the conservative mindset.

The progressivist left, by contrast, is profoundly pessimistic about human life, at least to the extent it is lived without the intervention of state-imposed collectivist rules. The left takes every snapshot in time as an enduring and changeless reality that will do nothing but fester if it is not addressed by centralized state action.

It sees, for example, young adults starting life with low incomes, little or no savings, no credit history, and very little in valuable property, and it is horrified that people have to live that way. In fact, this reaction is emblematic of the abstract obtuseness of the left, because very often its public voices excoriate “poverty” without realizing that most people in it are in a transient state, and are already progressing out of it without help from the “government.”

I venture to suspect that just about everyone reading this post has been a young adult before, squeezing every penny from a tiny paycheck, living on ramen noodles, doughnuts, and overripe fruit from the break room at work, and hoping the car isn’t going to break down somewhere today. Many have been young parents whose income would afford a much more comfortable lifestyle if they weren’t raising children. Some have been through divorces in which their incomes and lifestyles suffered major setbacks in mid-life. Others deliberately chose to seek professional qualifications requiring years of low income and accumulating debt. Still others lived with amazing frugality on unimpressive incomes in order to be able to start businesses of their own and work for themselves. And others still decided at some point that their calling in life involved volunteer or missionary work, perhaps going overseas to serve the world’s poorest, or joining the clergy in places where they make little money but are happy and fulfilled.

People in all these conditions could fall under the US government’s official poverty line – without any of them being in a grinding, systemic poverty that justifies either them rethinking their priorities from top to bottom, or mankind rethinking his social organization from stem to stern. The people actually in each situation see – have a vision for – their goals, their opportunities, and their prospects. They see their present state as a waypoint, not an end-state, and see their lives as their lives, and not as a social or political problem to be solved.

It is characteristic of conservative realism to understand that. Indeed, focusing on the trajectory of the typical American life over time is a good way to reveal the deepest chasm between conservatives’ realistic optimism and the deep, abstract pessimism of the left. The conservative doesn’t assume that everyone is either victimizing others or being a victim, that the deck is permanently stacked against whoever hasn’t bustled his way to the head of the line at a given point in time, or that whatever we can see before us on 21 February, 2010 (Happy Birthday, Sis!) is all there is and all there ever will be.

It’s in the conservative mindset to suppose that discovery and invention will continue, for example. So far they have never ceased, nor has man ever hit the brick wall he so regularly predicts in the earth’s ability to support an expanding human population. Every month brings a new discovery, a new understanding of our physical universe, and new recognition that something we thought before was wrong. We have never yet known enough to be correct about humankind outgrowing the earth; assuming that we now have reached that remarkable state is an attitude with no empirical justification – it can only be an article of faith.

History suggests we will adapt to new conditions with ingenuity and optimism. There is absolutely nothing in human history that would validate the pessimistic view of the left: that the glass is half empty, and now is the time to seize control of the glass, and start rationing the water and picking winners and losers by force. Similarly, in the matters of prosperity and poverty, history is on the side of optimism. Humans improve their lot, both individually and collectively, without being directed to that end by central governments. To be pessimistic about non-centrally-directed human outcomes is to ignore the evidence of our past.

When Churchill spoke about conservatism and pessimism, the lives of his era encompassed two world wars and the Great Depression, the onset of radical progressivism and the rise of ideological dictators. What that age had not yet seen was the immense difference between the economic and political power of the United States and that of all the other nations of the earth. It had not, in short, yet seen the true measure of the fulfillment of the promise of liberty. While Churchill was in many ways more aware than others of that promise, and of how it was being fulfilled through the life of England’s one-time colony, the sense of “American liberty” being no longer an experiment but a standard had yet to become widespread. Churchill was an Englishman, and the trajectory of his own life dovetailed so well with the demise of the British Empire that his philosophical thought was always oriented on, and even bounded by, that phenomenon of chronology.

The political expression of Western conservative optimism had to wait for another of the last century’s unique political leaders. I’m not sure we today understand the extent to which Ronald Reagan endowed us with that perspective. In a historical sense, I think whoever was going to do it had to come to public leadership after WWII and our recovery from the Depression: before those developments, America was still hanging on the edge of global power, and was not the center of global finance and commerce that we became after them. But Reagan was unique among even the big-name conservatives of the movement that paved his way.

William F. Buckley, Jr., for example, founded National Review explicitly to stand athwart history yelling “Stop!” Barry Goldwater rightly insisted that government was getting way too big, and that the Soviets had to be stood up to. But what Reagan made his name for was believing in the power of liberty: the inherent ability of a free people to do well – to outperform all other standards – on their own. He didn’t just want to roll back the weight of government, or decry the onset of a culture of dependency: he was after the increase in liberty because of the good increased liberty does for us, individually and collectively.

Where others issued warnings, Reagan pointed out incentives. By the time he was campaigning for president in 1980, he had gotten to where he spoke mainly of the positive consequences of the people being free. He could get lightly over the ground of criticizing big government – talking about its negative consequences – through one-liners and gentle jokes. Anyone who studies his earlier rhetoric from the 1960s, and his radio talks from the 1970s, will see that he spent a great deal of time explicating the intellectual case against big government during those periods. There was nothing shallow about his understanding of the relevant propositions. But his great power as a persuasive leader lay in his uniquely positive outlook about what the people, acting in their private, individual capacity, can accomplish. No one else of a similar stature in the last century made that his signature emphasis.

Conservatives should never lose sight of the fact that when we want liberty for the people – liberty from government intervention, government regulation, government direction, government taxation – we want it for a good purpose. We are not merely worried that entitlement dependency produces public debt and private sloth: we are concerned that it actively discourages the better consequences people create for themselves – historically, empirically, observably – when they have more liberty. The consequences of liberty are the good things people want.

We need never fear that by promoting liberty and opposing enlarged government, we are proposing a discouraging and difficult road for the people, one that’s all about withholding something good from them in the interest of an abstraction. What the left accuses us of wanting to withhold is no one’s to “give” or withhold anyway – it can only be produced and earned by individuals. The amazing truth is that if they have liberty, the people will produce and earn.

That is the optimistic perspective we have to keep in mind. Being pessimistic about government’s ability to transform mankind through coercion is simply evidence of sanity; it’s not a basis for hope or a positive outlook on the future. But we do have such a basis. The key is that our hope doesn’t lie in government, which has repeatedly proven it cannot make our lives better. It lies in the awesome power of political, religious, and economic liberty, which have proven that they can.

[Via http://theoptimisticconservative.wordpress.com]

Good As Gold?

2010-02-19T18:46:00.000+02:00

Has it occurred to anyone gold is fully vulnerable to market manipulations, just as with any other “money”?

Let’s start at the beginning. Humans have basic needs: water, food, clothing, shelter, etc. For now, the first on that list is not a global problem. But we have to find something we can eat, then we need something to cover us against the climate and conditions, then we need a safe place we can sleep. It’s altogether possible each of us could find a way to provide with our own hands sufficient to get by. But if any one of us becomes particularly talented at one thing or another, we are in a position to trade with others who may have a different talent. We end up both having a little bit more. What matters is the stuff we use, not how we get it.

With more people, we gain a more complex menu of things we can trade. Distribute the various tasks of producing between a larger group and we can get much greater output for the same amount of effort, which equals more stuff distributed between the same number of folks. Add transportation and we extend the size of our trade base. But when direct exchange becomes too complicated and time consuming, we all agree upon some item of exchange. At some point in human history, we adopted gold for that, but just about anything will do if we can convince everyone else to use it.

But before you take it any farther, the point is not the means of exchange, but the stuff we all want and need. We’ve been using paper money and coins which have no intrinsic value, and it has come under a lot of attention as the source of trouble. So we have endless advertisements, sometimes disguised as article, about buying gold, silver and other precious items. But you can’t eat gold. You may believe the historic value of gold, jewels and other high-value durable items will protect from total loss of your accumulations in the coming economic troubles, but the same folks behind the manipulation of the markets and debt can manipulate gold. You’ll still have it, and your immediate neighbors may be willing to accept it at the high value, but only as long as everyone has stuff to exchange. If everyone is scratching for the same small pile of necessities, your gold will lose its value. And if the manipulators suddenly dump a bunch of gold onto the same market, you really will be hurting.

It’s a trap. Gold bugs, knowingly or not, are trying to sucker you into sinking your accumulated wealth into yet one more manipulable medium of exchange. If you are going to buy something compact and high-value, how about arms and ammunition? They at least have a use.

So do tools and various types of hardware and supplies for building, farming, fixing, etc. The most valuable thing you could possess is some skill which can be used as a survival advantage when things are really tough. Writing computer code, analyzing stock trades and writing ad copy won’t be worth much in a world where most people are scratching to eat. Skills first, then the means to employ them, are more valuable than gold.

[Via http://jehurst.wordpress.com]

Importance of Economy to investors

2010-02-19T10:51:00.000+02:00

-> Price changes

- inflation – rise of price of goods. rising prices reduce value of future interest and divident payments together with the real value of investment.

-disinflation – decrease in rate of inflation/during recession

-deflation – opposite of inflation

Inflation Measures

Retail Price Index (RPI)

Consumer Price Index (CPI)

Like the RPI, the CPI measures the average change from month to month in the prices of consumer goods and services bought by consumers within the UK, but it differs from the RPI in respect of the households it represents, the range of goods and services included and the way in which the index is constructed.

The RPI is still published alongside the CPI, and continues to be used for increases in pensions, state benefits and index-linked gilts.

The CPI does not necessarily measure the actual inflation rate experienced by individuals. People whose incomes are fixed in money terms suffer most from inflation, as a given sum of money will buy less than it used to if prices have risen.

Business Cycles

-Recession

-Recovery Expansion (output growth accelerates and company profits rise while inflation and IR is low)

-Boom (economy is growing above average output. inflation rises and IR increase by regulators)

-Contraction (output growth slows, infation is high, regulators hesitate to cut IR. level of GDP falls compared to previous quarter, contracting economy)

-Recession (output growth is sluggish and company profits are weak and inflation and IR is falling. 2 successive quarters of declining GDP occurs)

Short term Interest Rates

These are set by relevant country regulators and is used by them as form of control over the economy in order the meet the govt’s inflation target which is aimed at maintainiing low in flation rates. long term interest rates are influenced by investor’s expectations of inflations in the long run

PNSCR

A vital component of GDP is govt spending on both current and capital expenditure. The difference is between govts expenditure and revenues is known as public sector net cash requirement(PSNCR) as per uk. This indicates the extent to which the public sector needs to borrow from other sectors of the economy and from overseas.

[Via http://purple786.wordpress.com]

California Scheming

2010-02-19T02:30:00.000+02:00

The Obama administration is dangling $4.3 BILLION in education money (Race to the Top), and California hopes to get $700 million of that – but first it must reform certain education practices – including linking teacher evaluation to student scores.

Many large school districts are refusing to sign on, including state’s second largest, the San Diego Unified, and, naturally all of the teachers unions.

The last thing in any ‘educators” mind(sic) is the word “accountability.”

The head of the California Teachers Association (340,000 members — and that number alone should make you think “Greece”) sent an e-mail to local unions urging them not to sign onto the Obama plan.

[Via http://usna1957.wordpress.com]

The Stimulus Worked. We Need More.

2010-02-17T18:52:00.000+02:00

This morning’s headline over at Huffpo: “It Worked, Every Major Economic Research Firm Says Stimulus Added at Least 1.6 Million Jobs.” Right now It links to a N.Y. Times story that say 2.5 million jobs were added.

No Kidding. Of course it worked. When 800 billion dollars are spent on a wide range of projects it is going to create work. It does not matter who spends it.

When faced with the real numbers repub/cons will claim that those 2.5 million jobs are not “real jobs”. The will spout dogma that goes like this: “Government jobs are not real jobs because once the government money runs out the jobs are gone.” Put an other way impermanent jobs are not real jobs. According to this “logic”any job is not a real job, not just government jobs. But it would be especially true of nonstandard jobs. Construction workers don’t really have jobs because once the construction project is done their job is gone. In fact according to The Iowa Policy Project, a nonpartisan think tank, 26 percent of the U.S. workforce had jobs in 2005 that were in one way or another “nonstandard.” and impermanent. That includes independent contractors, temps, part-timers, and freelancers. (pdf here) According to Republican math, that totals about 36 million jobs that are not “real” jobs.

The sister repub/con dogmatic denial of reality slogan is “Government has never created one job”. This is favorite slogan of Republican politicians, Senators, Governors, and House reps, who receive a government pay check. (Just once I would like to see one of the media’s talking heads ask a repub pol if his job is a real job.) The government employs over 4 million teachers in “fake” jobs. The post office employs 650,000 people in “imaginary” government jobs. On top of those the Feds employ 2 million more people and State and local governments cut pay checks for 8.3 million more. In all the government directly provides at least 15 million jobs, that according to Republicans can not exist. Add this 15 million to the other 36 million jobs that Republicans say can not exist and we get 51 million impossible jobs!

So now you understand the some of the “thinking” behind why repub/cons do not believe government spending creates jobs. And why despite what the numbers tell us, and despite what any reputable economist says, the government can not create real jobs. And 2+2=5.

Now if we could just get the “liberal” Media to stop repeating that 2+2= 5 we just might start getting more of the jobs spending we need.

Because even though the stimulus spending worked it was not enough, Unemployment is still at 10%, and it is running out.

[Via http://outerpartypress.wordpress.com]

Times of Change

2010-02-17T10:24:00.000+02:00

I was reading a short interview with economist and author Jeremy Rifkin in new scientist which focused around the thesis of his new book “The Empathic Civilisation” (amazon) and it reminded me of my own thoughts about the future. Rifkin talks of modern civilization being near it’s “endgame” and suggests we are going towards a new industrial revolution. He suggests that the communications revolution on the internet is beginning to converge with distributed renewable energy and when this happens this will bring us together, increasing empathy without further increasing entropy.

Whilst I find what is said by Rifkin very interesting and do agree that communication and computing technology, particularly centralised cloud computing facilities, are converging with renewable energy I don’t know if I completely agree with him. I have felt for some time that we (western industrial society) are pursuing a totally unsustainable economic model and that sooner or later it will collapse, possibly slowly , possibly quickly and messily. The big ideas encompassed in environmental degradation, overpopulation, economic growth (capitalism), climate change and non-renewable energy use (oil particularly) are all linked and affecting what is going on today and I do feel we are in times of change. Unfortunately for us, in my lifetime I do expect to see extremely difficult change occurring to our civilisation that will include real hardships. Westerners are used to observing others around the world suffering though natural disasters, war etc. , but we will be facing very real hardships before long. Many of us probably believe our wealth, technology and scientific knowledge will help cushion us and that may be true to some extent, but given our wealth is founded on paper and electronic transactions that often have no basis in the real world I think we are in for a shock.

I don’t like to be a doom and gloom monger, and I do see positive changes all around, but is it too little too late?

[Via http://infonexus.wordpress.com]

The Property Rights Debate Behind the Pittsburgh Parking Chair

2010-02-17T02:47:00.000+02:00

In Pittsburgh (and in Baltimore, and Philadelphia, and Boston, just to name a few), it works something like this. First, you spend the an hour or so shoveling the freshly fallen snow (if you’re lucky) or the hardened, impossibly heavy slush (if you’re not so lucky) to carve out a parking space for your car. Then, when you need to leave the spot, you take an item– perhaps a chair, but trashcans, traffic cones (I’m still puzzled as to how so many of my neighbors just have these lying around at their homes), and even ladders will suffice– to place in the spot as a way of claiming it while you are away. When you return, your spot is (generally) still there.

This logo (via wearpittsburgh) captures the sentiment nicely, and in a tasteful black and gold, might I add.

How and why, exactly, does it work this way? You don’t have to be a lawyer or a property law scholar to know that a street parking space is public property and cannot be converted into private property through the strategic placement of a lawn chair. But, legal niceties notwithstanding, the custom of recognizing “claimed” parking spots is alive in well in a number of Northeastern cities. There’s even a Wikipedia entry on the “Parking Chair.”

But there’s debate to be had. Prof. Michael Madison has a nice summation of both sides of the debate (“pro-chair” and “anti-chair“). The pro-chair argument basically tracks the argument for the traditional labor theory of value, famously articulated by John Locke. This argument says “I shoveled the spot; now it’s mine.” Adding to that argument, you could argue that without the resulting property right people wouldn’t have an incentive to shovel out parking spaces. The anti-chair argument basically says that people are going to shovel out parking spots no matter what, so there is no need to provide an incentive to do so. Prof. Madison focuses on the nasty self-help remedies (e.g., keying someone’s car or heaping snow on top of it when they “steal” a parking spot that was previously claimed) as one factor that favors the anti-chair camp.

So who’s right? Boston has attempted a compromise somewhere in the middle, which I think makes sense, at least in theory. The rule in Boston is that you can keep a spot once you shovel it out and mark it, but you only get to keep it for 48 hours. The Boston Rule agrees with the pro-chair camp’s basic point– people won’t shovel out spots (or at least as thoroughly) if you don’t give them some sort of expectation that the spot will be there when they come back. But the Boston Rule (again, at least in theory, because no one in Boston seems to be following it, according to the article) also recognizes that, unless people have to give up their spaces at some point, the city will remain filled with mounds of snow where decent parking spots used to exist. This is a great argument from an economic efficiency standpoint– and it’s probably the best argument for the anti-chair camp.

In any event, the parable of the parking chair offers a couple of important lessons. First, property rights matter. No matter how you shape them in terms of breadth and scope, property rights at some basic level are essential to getting things done, be it the creation of a parking space or the development of intellectual property. Second, custom is sometimes more powerful than law. Many of us will take a calculated risk when the risk that’s being taken is only a parking ticket. But how many of us in, in Pittsburgh or in Boston, really want to take the risk of moving some guy’s carefully-placed lawn chair?

[Via http://pittsburghtrademarklawyer.wordpress.com]

Stossel has it right

2010-02-15T18:12:00.000+02:00

John Stossel’s article today is fantastic, and required reading. An excerpt:

Of course income is down lately, but it’s up sharply over the long run. The chart actually understates the gains because it doesn’t count benefits from new technology. A Kindle may replace a hundred books, but such gains aren’t visible in the government’s data.

As economist Don Boudreaux points out: “the government’s data also underestimates the middle-class’s increasing prosperity, for it ignores the shrinking size of households. In 1967, the average household contained 3.14 persons; in 2006 it contained 2.57 persons. This fact means that the real income for each member of the average household grew.”

Read it. Think about all the advances in technology that improve the quality of your life, and how the cost of that technology has dropped in the last 10 years.

[Via http://paulstagg.com]

Politics, adverse selection, and moral hazard

2010-02-15T10:51:00.000+02:00

It’s hard to choose from all those presidentiables. You’re never sure what they have in mind. You ask yourself, “Why is she running? Why is he running? Why are they running?” It’s because he wants to help alleviate poverty (yes, he can, like I can kiss my own ass). It’s because his mother died. And he does not steal. It’s because he’s a pilot and the Philippines is ready for take-off. It’s because he is for the poor (yeah, and I’m for aliens!). It’s because of all this and all that.

All for good stuff, huh? But how are we really sure that they intend to do all those? Maybe they do. But they’re all talk. How will they do those? I mean, alleviate poverty, for instance. How? Give them jobs? Give them sari-sari stores? Suppose you gave each and every single poor person a sari-sari store so they could have their own livelihood. Then who friggin’ buys from them? Who buys from Tindahan ni Manang? Definitely not Aling Nena, because she has her own Tindahan ni Aling Nena. No, duh!

Anyway, that’s not what I’m here to discuss.

Aren’t you a little bit suspicious? You’re being given this information, on what he plans to do when he wins. But is it really just that? Or is he keeping something else from you? Surely, there’s asymmetric information!

To simplify, let me give you an example. Suppose I have $300. Berto needs $300, because he’s going to a casino. He badgers me to lend him my money. But he does not tell me he’s going to gamble. Instead, he tells me he will use the money to help his ill dog. Which, we shall say, is true. But what Berto really intends to do first is gamble. Then take his ill dog to the vet using his winnings. And then pay me back. And then still have money! Now let me introduce you to Chiz E. Chiz E needs a photocopying machine worth $300 so he could start his own photocopying service. But he is so conservative in borrowing, he only borrows when he is sure he’ll generate income! So who borrows? BERTO! And who gets the money? BERTO! Because I am such a kind-hearted soul, I lend him $300. Adverse selection!

Now, suppose Dodong came along and borrowed the $3oo first so he could start his own friggin’ business. Once he receives the $300, he passes by a casino, and thinks, hey, I could actually turn this measly $300 into a bazillion, then I’d have more! Moral hazard!

So think about it. Are these presidentiables really running for the greater good? Or is there more to them than meet(s?) the posters and songs? Are they pursuing the presidential seat because they are so sure that their personal gains are high as well? Are they thinking really of the country?

So maybe they are. But what happens when they win? Will they get blinded by money?

Will this all lead to the principal-agent problem, will our next president pursue his own interests at the risk of the Filipino people?

God help our presidential candidates.

[Via http://sabuhaynimay.wordpress.com]

Barack Obama’s job was to sell a health care reform plan to American voters. He failed

2010-02-15T02:49:00.000+02:00

Bad Salesman, Rotten Product

Jennifer Rubin – 02.14.2010 – 8:57 AM

Mickey Kaus, who has been rooting for ObamaCare to pass, writes:

Lots of intellectual effort now seems to be going into explaining Obama’s (possible/likely/impending) health care failure as the inevitable product of larger historic and constitutional forces. There’s something to this of course–the Framers went overboard in making it hard for the government to act, for example. But in this case there’s a simpler explanation: Barack Obama’s job was to sell a health care reform plan to American voters. He failed. He didn’t fail because 55% of Americans can never be convinced of anything. Happens all the time. He just failed. He tried to sell expanding coverage as a deficit reducer. Voters didn’t believe him and worried that they would pay the bill in some unadvertised way (through Medicare reductions or future tax increases, mainly). That’s not constitutional paralysis or Web-enabled mob rule. It’s just bad salesmanship.

There really is a lot to that.

Kaus, unlike those still snared in the Obama thrall, isn’t afraid to come out and say just how horribly inept Obama has been in persuading Americans of the merits of the bill. There were the lame press conferences (the red-pill/blue-pill inanity was a classic), the redundant speeches, and the media stunts (recall ABC flacking for ObamaCare for a day at the White House?) Part of the reason he was so bad at selling his bill is that he was unwilling to recognize the real concerns of critics and hence to address them head on. He never explained how he was going to cut Medicare by $500B while not impacting care. He didn’t offer a rationale for why young, healthy twenty-and-thirty-something year-old Americans couldn’t be allowed to have low cost, high deductible insurance plans but instead should be forced to purchase really expensive, ObamaCare-approved ones.

Now if Obama did not adequately rebut the criticisms of the bill because there weren’t good answers to the critics’ charges, well, that goes beyond salesmanship to the product’s defectiveness. Couldn’t it have been that voters stubbornly resisted a large tax-and-spend plan that was going to disrupt a flawed, but basically satisfactory system for the vast majority of voters who already have insurance? It seems as though Obama wasn’t all that candid about what was in the bill and what it was going to do because at some level the bill’s proponents understood just how unpopular much of it was.

In short, it’s like saying the problem with the stimulus bill was that Obama didn’t sell it well enough. No, the problem with the stimulus bill is that it was a bust and no amount of salesmanship was going to convince the voters otherwise.

The difference with ObamaCare is that widespread revulsion, Scott Brown’s election, and belated cold feet by Democrats prevented (so far) the bad bill from being passed. And for that we can be thankful.

[Via http://cliftonchadwick.wordpress.com]

GOP: Shameless Cowardly Flip Floppers.

2010-02-12T18:50:00.000+02:00

Republicans, Doubleplusgoodhypocrites! 2+2 = 5 style.

Paul Krugman in his latest New York Times op ed “Republicans and Medicare”, eviscerates the GOP for their stunning use of doublethink surrounding medicare cuts. He points out that during the healthcare debate Repubs fear-mongered that the Democrats were going to kill granny by cutting 500 billion from the program.* Now that they have kicked health care reform to the edge of the grave, the GOP is proposing Medicare cuts of 650 billion. And they are back to proposing killing Medicare altogether. Grannies are trembling under their shawls across America.

Will the “liberal media” dwell on this the way they did when it was dems who wanted to cut medicare? Will the press brand the GOP as Grannie killers?….. No.

*( The real number was 400 billion and the money did not come from cutting services, but from ending the government give away to insurance companies set up in the Bush era medicare D legislation.)

GOP: Transparency is a Trap !

In another masterful display of doublethink, The Repubs are calling the televised health care meeting between Obama and the Repubs a trap. It is a meeting that GOP demanded ! Jon Stewart is not pleased. Watch Jon Stewart do what he does so well. It is classic.

Doublethink is a Newspeak term defined in George Orwell’s Book, 1984

“Doublethink: To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which canceled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself…”

[Via http://outerpartypress.wordpress.com]

Charlottesville/Albemarle Retail Sales Exodus Continues

2010-02-12T10:09:00.000+02:00

By. Neil Williamson

The Charlottesville Regional Chamber of Commerce today (2/11) released their compiled sales tax data report showing Charlottesville, Albemarle and Augusta have declining retail sales while retail sales have grown in Greene Louisa and Waynesboro.

From the Chamber’s media release:

Virginia Department of Taxation sales tax data compiled from the University of Virginia’s Weldon Cooper Center showed that retail sales during 2009 (January through December) compared to the full 2008 year were down in Albemarle County -9%; in Charlottesville -7.82%; in Augusta County -19.54%; while retail sales in 2009 rose in Greene County, +14.47%; Louisa County, +11.99%; and, Waynesboro, +1.11%.

Albemarle and Charlottesville, the region’s retail hub, accounted for $2.08 billion in total retail sales over the full course of 2009 – down by $190 million from 2008 and lower by $233 million (10%) from 2006 levels. (The Chamber started tracking area retail sales tax data in 2006.) In addition to the loss in retail associated jobs and private investment, the decline in retail sales equates to a 2009 local tax revenue loss of more than $1.14 million for Albemarle and a loss of more than $782,000 for Charlottesville. Meanwhile the retail sales gains in Greene County represented a 2009 local tax revenue growth of $149,000 while retail sales gains in Louisa County represented a 2009 local tax revenue increase of $231,000.

In reading the report, The Free Enterprise Forum was interested how important the retail sector is to our economy nationally. According to the the National Retail Federation:

The National Retail Federation (NRF) is the world’s largest retail trade association … represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2008 sales of $4.6 trillion.

One has to wonder if consumer confidence is critical to our national economy and retail sales are slipping in Charlottesville and Albemarle but growing in other neighboring communities, how will this shift in local consumer spending impact our overall economic health? Can the trend be changed? Should it be?

Once again we find more questions than answers.

—————————————————————

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna and Nelson County. For more information visit the website www.freeenterpriseforum.org

[Via http://freeenterpriseforum.wordpress.com]

Tarnishing The Euro (Part 2)

2010-02-12T02:28:00.000+02:00

Will Europe come to the rescue of one its own? The markets are still not entirely convinced. Although EU officials spurred on by France and Germany agreed that some form of support was needed the lack of detail came as a disappointment. Differences in opinion on how help should be provided meant that markets had nothing concrete to digest aside from a general agreement to provide assistance if needed.

The EU validated Greece’s plans to cut its budget deficit by 4% this year but clearly backed away from committing taxpayers’ money to the country given the potential public backlash that supporting a country widely believed to have fudged its way into the EMU, would involve. The end result was a further sell-off in the EUR although equity markets showed a bit more resilience which prevented a sharper fall in EUR/USD.

Risk currencies generally are putting in firmer performances, with the AUD helped in part by the shockingly strong employment report and higher commodity prices. The AUD and to a lesser extent the NZD are likely to continue to bask in the warm glow of these factors, with AUD/USD setting its sights on technical resistance around 0.8944. EUR/USD is the weakest link and continues to trend lower, with strong technical support seen around 1.3583.

[Via http://econometer.org]

Dolphins, dogs and love

2010-02-10T18:53:00.000+02:00

I remember years ago, when the six year old Cuban boy Elian Gonzalez, the sole survivor of a tragic attempt to reach the shores of America, supposedly claimed that the dolphins had kept him safe through the ordeal. Elian’s mother died in the journey.

The story of the dolphins touched me and I can see no reason not to believe it.

Every now and then an act of another life form performing an unselfish deed comes to light, for no reason other that the animal felt it was necessary to do so. The motivation may be love or compassion.

I have been observing our dogs and I note that they too have principles and compassion in a dog kind of way.

When I was a child we had a big black Labrador named Blackie. Friendliest mutt you ever saw and a lousy watch dog.

One day a man came over and was speaking to my mom. I don’t remember what was said. I remember the man touching my mother’s arm and Blackie turned into another life form. The deep throated growls were enough to scare the daylights out of the pope.

I wonder why animals would risk their lives for humans.

Why do animals show love and compassion?

I do not think this was taught to them, but is built into them.

Like us. We are created with the ability to discern the difference between right or wrong and love and compassion from vanity and hate.

Whether we kill that within us is up to us as individuals, is it not?

[Via http://plainview.wordpress.com]

The myth of the spending splurge

2010-02-10T10:43:00.000+02:00

This post is aimed very specifically at a particular characterisation of how government spending has ‘splurged’ since 2007. It is sufficiently influential that it must have a profound effect upon the fiscal debate going forward – and it is superficially very appealing. It goes like this:

“Before the recession, in 2005/6, government spending was already 41% of GDP. Then, the crisis hit. The Labour government lost all common sense and resurrected Keynesianism. This meant a spending splurge – as their own figures show (tables B13 and B14), spending leapt from 43% to 48 or 49% over the crisis. Cash spending went up from £627bn to £706bn in two years. If that ain’t a splurge, what is? So, the government used the cover of a crisis to relaunch defunct economic policies and takeover the economy, to the detriment of our long term prosperity. “

If you attended as many events with right-leaning speakers as I do, you would have to listen to this sort of narrative a lot. And it is difficult to refute. Cash spending has risen. The government spend is a higher ratio of GDP. It is true.

But at the same time it uses a methodology that is incredibly misleading, in terms of the stimulative effect presumed, and the extent to which fresh government spending happened. Bear in mind several facts:

Businesses and households plan forwards. And they do so in terms of nominal cash. When a large business makes investment decisions, it shoves out many spreadsheets, all of which try to anticipate how much cash spending there will be for its products and savings. Similarly, you and I, when planning whether to, say, buy a car or house or holiday, make estimations of our future cash income, and what it can buy. We may compare it to our assets and our debts – so if our house price is falling, and our mortgage debt steady, we may pull in our horns. So too for businesses.
But what we do not do is make our plans based on what proportion of GDP our spending is. If GDP expectations fall massively from £1.5trn to £1.2trn, , so that my £1500 holiday has leapt from being 1 billionth of GDP to 1.25 billionths, I do not think I am spending more.
More to the point, if a business is expecting to get paid £150 million for a piece of work, and GDP expectations fall as above, the business does not go around thinking “Great! I was going to be paid one ten-thousandth of GDP for this, now I will get 1.25 ten-thousandths of GDP! Party ON!
More to the point again: if one set of people – say, 10,000 teachers – were expecting to be paid £300m, and were basing their consumption decisions around that, the fall in GDP would not make them think they were getting more money, just because it represented a bigger chunk of GDP.
People’s current expectations of what their future incomes will be – the sum total being the economy’s expectations of forward Nominal GDP – play a dominating role in determining CURRENT spending. About a million hat-tips: Scott Sumner. It is funny how easily the Right recognises this fact when trying to use Ricardian equivalence to disprove the ability of government to achieve anything with changes in its stance.
In 2007, the government was forecasting spending in 2010-11 of £678bn. Table B11. So the latest forecast spend is £30bn higher. About £12bn is in higher debt interest; about £15bn in tax credits and social security. There has been no remarkable increase in actual public works. The ‘stimulus’ for what it is worth was on the revenue side: failing to tax spending as much as before, for 13 months.

So putting these all together, what do we get?

The boost in spending/GDP almost entirely reflects future GDP falling. This does not stimulate ANYONE! In particular, none of the sudden increase in that ratio would have fed into some businesses and people revising upwards their previous expectations of income derived from the government – or indirectly from it.
The cash increase that DID happen was hardly stimulatory. Out of work people got more benefits than expected, and our creditors got paid interest.
Attempting NOT to do these spending increases would have immediately lowered expectations of future GDP, which as they had stood would have anticipated the increase from 2007-8 of £589bn to £678bn in 2010-11 in their CURRENT plans. (This ~4.8% p.a increase was originally expected to match the rise in NGDP, incidentally)
Since the financial sector was ****ed, the lower expectations of government-derived income would not have been substituted with expectations of other incomes derived from private sources
As a result, businesses and households that were expecting incomes of a certain size (whether directly or indirectly from the government) would have had to drastically lowered their expectations of future NGDP, which would have lowered their current nominal spending plans, which would have lowered current GDP.

This is blindingly obvious: if the government had (madly) targeted the level of spending as a proportion of GDP during a nominal GDP slump, then all it would have done is made GDP slump even more. Even if it had done this at the same time as cutting taxes, because tax cuts would have gone towards groups with a lower marginal propensity to consume, particularly given the collapsing asset markets, than the recipients of government benefits and incomes.

Don’t be fooled by ratios. Yes, we need to get spending down as a ratio of GDP. yes, Brown spent too much, relying on mirage revenues. But what happened over 2007-10 is not the splurge, and using spending as a ratio of GDP is, for such situations, a lousy metric for understanding macroeconomic relationships.

[Via http://freethinkingeconomist.com]

The New Mate-riarchy

2010-02-10T02:55:00.000+02:00

Women who seek to be equals with men lack ambition.

Timothy Leary got that right. As the flurries of Valentine’s Day posts accumulate around the blogosphere like the snow in Washington, DC, and you find yourself knee-deep in bloviation on the lost art of romance, remembering that “we ain’t nothing but mammals” (unlike the subjects of the upcoming Vanlentine’s Day documentary Tyrannosaurus Sex) might ease some of that existential pain. Or it might not.

Ironically enough, the sexual paradigm I grew up with has already begun to reverse itself. The conventional image of Valentine’s Day used to be that single women would drown their sorrows of bachelorettehood in a pint of Ben & Jerry’s while their male counterparts haplessly scoured every available avenue for a potential mate who was just as forlornly unattached as they were. This whole scheme seemed to work in accordance with genetic programming and evolutionary sense; in all other mammalian communities, the females have their pick of the male litter. Males competed amongst one another to be chosen by the females, and the alpha attempts to quash all potential usurpers to his genetic throne, the females’ choices thereby effecting sexual selection. Of course, for most of the history of Western civilization, this model worked in reverse; females were forced to compete for the males’ favor and attention, the men getting their choice of mate. Feminism, then, seemed to bring the dynamic back to the equilibrium that had existed in nature, with women taking their pick of the male pack. No more.

Sexual equality and demographic shifts have begun to undermine the market for sexual partners for women amongst college-educated women in America, given that such women are now competing on relatively more levels against relatively more women.

Women have represented about 57 percent of enrollments at American colleges since at least 2000.

…

Needless to say, this puts guys in a position to play the field, and tends to mean that even the ones willing to make a commitment come with storied romantic histories.

…

Thanks to simple laws of supply and demand, it is often the women who must assert themselves romantically or be left alone on Valentine’s Day, staring down a George Clooney movie over a half-empty pizza box.

Since college enrollments have shifted away from male domination, if a college education translates to greater economic participation and general desirability in females, society is poised to revert back to a sexual dynamic requiring that females compete for the relatively less available male partners. For some, this shift means that the male counterparts may correspondingly revert to a less feminist approach to winning females’ favor.

Welcome to the New Paleolithic, where tens of thousands of years of human mating practices have swirled into oblivion like shampoo down the shower drain and Cro-Magnons once again drag women by the hair into their caves—and the women love every minute of it. Louts who might as well be clad in bearskins and wielding spears trample over every nicety developed over millennia to mark out a ritual of courtship as a prelude to sex: Not just marriage (that went years ago with the sexual revolution and the mass-marketing of the birth-control pill) or formal dating (the hookup culture finished that)—but amorous preliminaries and other civilities once regarded as elementary, at least among the college-educated classes.

When the supply and demand are so skewed, the synthesis of feminism and sexual selection suggests that more objectively favorable characteristics will be demanded of women, while available males may abuse their relatively increased market power by simply advertising their genetics rather than merit. Such females will be forced to choose between forgoing lifelong partners in favor of a career or “settling” for males that do not meet the lofty ideals that the historical standards of chivalry may have instilled.

Feminism gave women this sense of entitlement that we deserve someone who’s perfect. And then we meet the so-called perfect guy and he’s out of our league and has no interest in us and we tell our girlfriends, ‘He must be secretly gay’ when in fact he’s just really not that into us.

Of course, there is still the possibility that the market might simply take a bit more time and correct itself once again due to some unforeseeable turn in our evolutionary path. We are just mammals, after all.

[Via http://newprint.wordpress.com]

Regulation of the Day 112: Importing Pork Rinds

2010-02-08T18:15:00.000+02:00

The federal government is loosening its restrictions on importing pork rinds from Brazil. Rudolph Foods, Inc., an Ohio company, owns a factory in Brazil, and stands to benefit from the ruling.

Competitors are up in arms. Citing exotic illnesses like foot-and-mouth disease, one competitor told The Wall Street Journal, “It just takes one pig” that is infected to spread a disease… “The risk is low, but the consequences are really high.”

If that is his strongest argument, then the case against liberalization is as weak as it gets. Instead of using the power of government to hobble its rivals, this company should go out and improve its product. Make its pork rind recipe even tastier. And cheaper. Use the import liberalization to its own advantage if possible.

[Via http://inertiawins.com]

The Time for Give and Take

2010-02-08T10:22:00.000+02:00

1. “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” (John 3:16).

2. In Luke 6:38, Jesus issued this command, “Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give into your bosom. For with what measure that ye mete withal it shall be measured to you again.”

3. So, yes, God not only intends, but demands that we give unto others who have need.

4. Thessalonians 4:11 says, “And that ye study to be quiet, and to do your own business, and to work with your own hands, as we commanded you.”

5. The Bible teaches us to provide for those in our own families who are incapable of providing for themselves.

6. The Bible teaches that the church is to provide for those in its own field of ministry who cannot provide for themselves, and who have no family to provide for them.

Hey, Hey Paula and Hi Randy, How much did your presently dying Mega-Church provide financial aid for your congregation? There are many people who are poor and less fortunate. Did you help, did you help–did ya…?

However! Is Government established as God’s own agent to carry out His assigned duties of executing justice among the people or executing the people? Wars and Control–Control and Control!

Finally! Government governs by adding more power to control people and their property. All forms of Government must adhere to its Biblically defined role. If it is not confined, people will suffer persecution and abuse at its hands. This abuse and persecution is in the past, in the present and in the Future.

So, rise-up and allow the New World Revolution to…

And let us understand and protect: Respect and Understanding and Peace and Love…Amen

[Via http://pmespeak.com]

It’s official-update 15

2010-02-05T18:54:00.000+02:00

According to today’s Observer, the University of Notre Dame student government has decided the dissolution of the Department of Economics and Policy Studies is one of the “issues of most pressing concern” to students, and communicated just that to a committee of the Board of Trustees.

Here are excerpts from the article:

Students are concerned by College of Arts and Letters Dean John McGreevy’s lack of transparency as he moves to dissolve the Department of Economics and Policy Studies, student government chief of staff Ryan Brellenthin said.

“The decisions were made without student input and the process was not revealed to the student body,” Brellenthin said.

“It was almost as if they were hoping students weren’t paying attention,” he said.

Students are concerned that closing the department will narrow the economics education at Notre Dame, Brellenthin said. They are also concerned that this decision sets a precedent that students will be excluded from future academic decisions.

“Very little attention has been focused on the 400 students who are economics majors,” Brellenthin said. “No efforts have been made to engage student opinion on the topic.”

Schmidt said he is an economics major, but he first heard about the plans to dissolve the department from The Observer.

“We weren’t told about it,” Schmidt said.

The dissolution of Economics and Policy Studies will be voted on at the next meeting of the Academic Council, Brellenthin, who is one of the four students who serve on the academic council, said. “We can make statements against the dissolution, and we certainly will, but it has been on the agenda to dissolve before we could put it on the agenda to discuss,” he said.

Brellenthin said faculty members are also concerned about the dissolution of the department.

“They are asking what will happen if professors who teach something that isn’t the mainstream theory are pushed out,” he said.

“The fear is that the academic council is just going to be a rubber stamp” on McGreevy’s decision to dissolve the department, Schmidt said.

One trustee expressed her surprise after Weber ranked the dissolution of the department as the second most critical issue for students, but the issue is about students’ wanting to be respected, according to Brellenthin.

Brellenthin cited reports that McGreevy described the dissolution of the department as “too sensitive an issue for debate.”

“We respect the administration and the professors as top-tier educators, but we want to be respected as top-tier students,” Brellenthin said.

[Via http://anticap.wordpress.com]

A Blueprint for a Safer Planet, by Nicholas Stern

2010-02-05T10:54:00.000+02:00

The Stern Review, as you may have gathered, is a highly influential document on the economics of climate change. It came out in 2006 and was a real game changer, showing that the cost of action to prevent climate change would be less harmful to the economy than the consequences of inaction. It’s a complicated and ethically compromised piece of economics, but it made Lord Stern a key figure in the climate debate.

More recently, Stern has turned his attention to the need for a global deal on climate change, and A Blueprint for a Safer Planet: How we can save the world and create prosperity is his attempt at outlining the kind of deal we need. I should start by pointing out that post Copenhagen, the book needs reviewing. It was released this year, but it would be a much better book if the publishers had delayed the paperback edition by a few weeks and brought it up to date. It was written in autumn 2008, and a lot has changed. It was written before Obama was elected, and talks non-specifically about ‘America’s new president’, for example. No doubt a second edition will emerge sooner or later, and if you’re thinking of reading this book I’d hold on for a bit.

For me, the subtitle was the main reason I wanted to read this. Stern is a cheerleader for economic growth, and sees climate change as an opportunity for more of it. “I offer a blueprint of how to build a safer planet” he writes, “or how to manage climate change while creating a new era of growth and prosperity.” Others maintain that this is a fantasy and that growth is impossible in the face of climate change. It’s an important debate – in fact it may be the key debate in the whole climate change problem.

So what’s the blueprint? Well, it’s based on the idea that climate change is a market failure, “the biggest market failure the world has ever seen” in fact. The damage that CO2 causes isn’t factored into the price of emitting it. Price it in through carbon trading, and the market will correct itself, although there’s more to do as well. Halting deforestation is a priority, along with every possible energy efficiency, an upscaling of renewable energy, and serious investment in promising technology, including carbon capture and storage. All of this should work together to keep atmospheric concentrations below 500ppm, which is Stern’s baseline.

There’s a lot of detail here about how individuals and companies would fit into the picture, and even more on the structure of a global deal – who gives what to whom, and how. It’s a maze, quite frankly. I admire Stern for tackling it and getting his head around it. I also understand much more clearly why world leaders didn’t secure a deal at Copenhagen. The whole thing is fiendishly complicated and full of pitfalls, potential inequities, or opportunities for gaming the system. It’s obvious that a global climate deal is possible, but getting there is going to require a whole new approach to diplomacy.

There’s no doubt that Stern has thought this all out very carefully. However, I have a couple of problems with his starting assumptions. After all his careful reasoning, the growth question is still the elephant in the room. “It is neither economically necessary nor ethically responsible to stop or drastically slow growth to manage climate change” he asserts, because “without strong growth it will be impossible for the poor people to lift themselves out of poverty.” I don’t doubt Stern’s commitment to the poor. He co-authored the Commission for Africa report and knows his stuff, but growth is not the best way to solve poverty. As nef have proved, growth is so unequally shared that if you wanted to lift everyone living on less than $2 a day to just $3 a day, you would need 15 planets worth of resources to do it.

The failure here is to distinguish between necessary and unnecessary growth. I agree that African economies need to grow, but why should American or European economies continue to grow? Stern even recognises that growth can’t go on forever: “a picture of indefinite expansion is an implausible story of the future” he writes, but he doesn’t go on to say when ‘enough’ would be. If everyone lived like Americans, we’d need five planets. So when is enough? Six planets, seven? It’s ridiculous to see growth in Africa growth in the West as equally good. A dollar of growth in a poor country is worth far more than growth in a rich country.

What’s worse is that Stern uses this very logic to justify ‘discounting’ the needs of future generations. We know that a unit of extra wealth means less to a richer person than to a poorer person. We also know, according to Stern’s growth assumptions, that growth will continue and future generations will therefore be richer than we are. That means that a unit of growth will mean more to us than to them. Conveniently, this means we can put our needs first. It’s economically logical, and neatly circumvents the golden rule of sustainability that requires us to meet “the needs of the present without compromising the ability of future generations to meet their needs.” It also shows why you should never put an economist in charge of anything that involves real people.

Interestingly, Stern hints at another way in passing. “Short of creating an immediate, major and prolonged world economic decline, it is impossible to big and sustained reductions in emissions starting immediately” he says, acknowledging that de-growth is the only immediate solution to climate change while dismissing it at the same time.

Lord Stern is obviously a highly intelligent and influential man. What if he were to able to entertain that heresy for a bit, to explore the idea that ending growth might actually be the best way to fix the climate? He could have written a book detailing how to ‘ration’ growth to countries that need it most, how to slow an economy without destabilising it, how to maintain employment, how to create new money for mortgages and pensions without the growth imperative of interest. In a world of peak oil, climate change and population growth, the notion that the future must inevitably be richer than the present strikes me as a rather rash assumption. Because of it, the message of A Blueprint for a Safer Planet is music to the ears of politicians and businessmen alike, but it is ultimately built on sand.

[Via http://makewealthhistory.org]

Thoughts

2010-02-05T02:44:00.000+02:00

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[Via http://omewmacy.wordpress.com]

Krugman and the Canada canard

2010-02-03T18:43:00.000+02:00

For exiled Canucks – and even the non-exiled – it’s always pulse-quickening to encounter a reference to Canada in a non-Canadian newspaper, let alone a whole column by liberal economist and bien-pensant Paul Krugman singing our praises in The New York Times! (Hey, what do you want? We’re a dominated people clinging to the border of Manifest Destiny.) Unfortunately, Krugman’s column is ho-hum at best, and wrong, in an important way, about both Canada and the U.S.

The point of Krugman’s column is to ask: why did Canada’s banks weather the recent (chronicle of a) financial crisis (foretold) so much better than their American counterparts? The answer he offers is stricter regulation. This is fine as far as it goes, yet given the striking disparity between the Canadian and American experiences both the question and answer have been asked and answered before. Moreover, Krugman neglects to point out the successful opposition to bank mergers in the late 1990s. Not only would such mergers have created even bigger banks too big too fail, but they also might have paved the way for foreign buyouts of Canadian banks (imagine how Canadian banks might have emerged from the financial crisis if they’d been bought by, say, Citigroup). Indeed, the opposition was a rare instance of public outcry defeating a plan cherished by the country’s political and financial elite and, given the present American context it was a missed opportunity for Krugman not to highlight it. (For more of such social-democratic Canuck analysis see these thoughts from Mel Watkins – full disclaimer: he may be related.)

But all this great lake carping aside, the real problem with Krugman’s analysis lies in this claim:

I’ve always considered Canada fascinating, precisely because it’s similar to the United States in many but not all ways. The point is that when Canadian and U.S. experience diverge, it’s a very good bet that policy differences, rather than differences in culture or economic structure, are responsible for that divergence.

Actually, if the scorched-earth experience of the Bush years had any salutary effects, one of them was to underscore the fact that Canada and the US are in many respects starkly different, differences that, when it comes to influencing daily life and government direction, easily outweigh the similarities. And these differences are about policy, certainly, but that policy, pace Krugman, is generally the result of profound cultural differences. By which I mean, the chief cultural difference separating – the image of an abyss comes to mind – Canadians and Americans is the respective attitudes to government. Yes, after a few years of our own scorched-earth débâcle, the belief in Canada is reeling somewhat, but in the main, Canadians do see a necessary and beneficial role for government to play. We do not reflexively mistrust regulation or imagine government to be so inherently inefficient and corrupt everything possible should be left up to the private sector. It was precisely this belief – a deep-seated cultural presupposition – that helped defeat bank mergers, and created the culture of regulation praised by Krugman.

Indeed, in the American context, it was precisely the flip-side of this belief – that government is the problem, not the solution, to quote the unlamented Gipper, or that government should “get out of the way” to cite, with a heavy heart, the darkly risible ex-governor of Alaska – that Obama’s election seemed briefly to point a way past. At least, that’s how I read the reception of the “Yes We Can” bumper sticker. That is, yes we can solve our problems, and yes that’s going to involve some collective action. It’s deeply distressing, then, to see how this moment has been so utterly squandered by the Obama best and brightest. Indeed, so much so, one wonders whether they ever had any intention of trying to capitalize on it… but that’s the subject of another column. Maybe I’ll suggest it to Paul.

[Via http://threews.wordpress.com]

Blogging the Green Budget

2010-02-03T10:47:00.000+02:00

Missing the IFS Green Budget for economy nerds must be like living near Woodstock in the 1960s & missing out on Hendrix. Is Robert Chote Hendrix ?

R Chote: Current government plans are ALREADY front-loaded. No more cutting in 2010.

But parties should not use unavoidable uncertainty as an excuse for inaction.

First presentation is about Aggregate supply – how much has been permanently lost to potential GDP? Answer – amazingly pessimistic – 7% of output & slower growth by 0.5. If this is so, we will get inflation MUCH earlier, and need a massive hit to living standards which will be a political nightmare. The work comes from Barclays + is theoretically sound, based on solid IMF & OECD historical work. Am a bit depressed

Let me be clear. If this is right & we have had such a massive hit to Aggregate Supply, then three quarters of my normative suggestions have been wrong. We would need sustained austerity to reaquire balance – and trying to boost demand will only produce inflation. We are in Spectator World.

Carl Emerson has just pointed out that the sharpest fiscat tightening is between now & 2011. Yet the Conservatives want to go deeper & sooner!

[Via http://freethinkingeconomist.com]

Now the Fun Begins

2010-02-03T02:33:00.000+02:00

So now that I am in the graduate program there are many things that must be done before summer gets here. The first being the TExES exam.

I have less than a month to prepare for my diagnostics exam. Many of you may be wondering what is considered “history” when it comes to this exam. Well–

Ancient World History – anything before 476 A.D.

World history- anything after 476 A.D.

Geography

U.S. History

Economics

Behavioral and Social Sciences

Government

All must be remembered- lets hope all my classes pay off.

[Via http://southernbellestyle.wordpress.com]

Deficit to Hit an All-Time High

2010-02-01T18:34:00.000+02:00

Cue the chorus of Sweet Charity’s “Hey Big Spender.”

On the heels of the promised spending freeze:

President Barack Obama will propose on Monday a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700 billion, or 4% of the gross domestic product, by 2013, according to congressional aides. –WSJ

President Obama sent Congress on Monday a proposed budget of $3.8 trillion for the fiscal year 2011, saying that his plan would produce a decade-long reduction in the deficit from $1.6 trillion this year, a shortfall swollen by $100 billion in additional tax cuts and public works spending that he is seeking right away.

[...]

“We won’t be able to bring down this deficit overnight,” Mr. Obama told reporters, saying that his budget includes investments in education and other areas that are critical to the country’s future. “We will continue to do what it takes to create jobs.” –NYT

It would take a promise of no new taxes, a promise to stop creating regulations by which to manipulate the private sector when not subsidizing it by force. It’s ironic: a government that demonstrates time and time again that it has more faith in its own excesses than it its citizenry or the driving force of the free and unhindered market expects that same bloc to manifest jobs under burdensome weight of big government. It’s like the administration is setting up the free market to fail.

More immediately, the grim numbers are a chickens-come-home-to-roost moment for both the White House and Democratic Congress, which skipped past any real deficit debate last year in their eagerness to get onto healthcare reform.

The goal then was to act quickly — before the deficits hit home — and institute major changes which proponents argue will serve the long-term fiscal health of the country. Instead, a year of wrangling and refusal to consider more incremental steps have brought Obama and Democrats to this juncture, where the waves of red ink threaten to overwhelm their boat.

The deficit picture now is much worse than a year ago, with 2010 threatening to top $1.55 trillion. Revenues continue to lag, and Obama has had to commit much more than he had hoped for wars in Iraq and Afghanistan. — Politico

But administration officials argued that Obama inherited a deficit that was already topping $1 trillion when he took office and given the severity of the downturn, the president had to spend billions of dollars stabilizing the financial system and jump-starting growth. — AP

Instapundit has a great reaction to the above:

You see this kind of thing pop up in comments a lot, and sometimes even out of the mouth of the less-honest variety of pundit. Which means, of course, that once again it’s time to roll out this graphic:

Notice anything? Like maybe how Bush’s deficits are dwarfed by Obama’s? And maybe how the deficit was falling throughout Bush’s second term? Until the very end, when TARP — hardly popular with the Tea Party crowd — rolled out. The “Bush was as big a spender as Obama” line is just a flat-out lie, which the apologists for the powers that be hope you’ll buy because . . . well, because a lie is pretty much all they’ve got at this point.

[Via http://thedanashow.wordpress.com]

So if she weighs the same as a duck…

2010-02-01T10:49:00.000+02:00

From yesterday’s Boston Globe, here’s an article by economist Peter Leeson arguing that medieval trial by ordeal was really not so bad. The article is notable for its complete lack of anything resembling evidence, but there is a little—very little, but more than none—in Leeson’s academic paper here. I think the most interesting bit of that is the contention that men and women were treated differently: men, typically with lower body fat and hence more likely to sink when tossed in a pond, were more likely than women to be given an ordeal by cold water, in which sinking was interpreted innocence.

The basic theory (tarted up with equations in the paper) is that (i) people who actually believed in the efficacy of ordeals would submit to them only if they were indeed innocent, confessing or settling or running away if they were guilty, and that (ii) the priests who ran the ordeal process would rig the results in favor of the innocent accused. I’m not sure the first point would apply to capital cases, much more common then than now, given that a guilty person, presumably already condemned in God’s eyes, would have little reason not take his chances on the ordeal. And as for the second point, well, I am not convinced that medieval priests were universally known even then for their honesty and incorruptibility.

A couple of years ago Leeson wrote a book about economics and pirate democracy that I keep meaning to read. I hope it’s a bit more convincing than this…

[Via http://mrlauer.wordpress.com]

An Agenda in Shambles: The ‘New Foundation’ collapses.

2010-02-01T02:37:00.000+02:00

An Agenda in Shambles The ‘New Foundation’ collapses. BY Matthew Continetti

February 8, 2010, Vol. 15, No. 20

Popular Tags

–>In April 2009, President Obama laid out his domestic agenda in a speech at Georgetown University. This was no ordinary chat; Obama envisioned nothing less than a reorientation of the American system. He sought to shift the economy from the rough and tumble cowboy capitalism of the past to a less risky, pricier, and perhaps slightly more comfortable European future. “We must lay a new foundation for growth and prosperity,” Obama said.

Less than a year later, this agenda is in shambles. The president’s “new foundation” is just another part of America’s crumbling infrastructure. Its pillars are strewn across the congressional landscape. Democrats are afraid to touch them—and for good reason. They are radioactive.

To read Obama’s Georgetown speech today is to see a president at the height of his power. The ambition was huge. The language was bold. The theme was clear: The financial crisis had repudiated unregulated markets and a small social safety net; hence the need to reform the financial sector and provide for the uninsured and unemployed. In the president’s view, the crises he inherited proved that the Reaganite model of governance—low taxes, a budget favoring defense over social spending, limited regulation—had outlived its usefulness. It was time to replace it.

Obama had five goals: reform the banks, spend more on education, create a “green economy” through cap and trade and government subsidy, pass universal health insurance, and shift the focus of discretionary spending from defense to social programs. Strip away the spending initiatives, and you see that none of Obama’s goals has been achieved.

The bank bill awaits action in the Senate. Cap and trade and health care died in the Massachusetts snow. That leaves education, which is a bipartisan issue and an area of domestic policy where Obama is probably doing more good than harm. It’s small fry, moreover, to a president who billed himself as FDR’s heir.

What brought Obama down to earth? Economic stagnation and public opposition. Democrats blame the president’s troubles solely on unemployment—get more people working, they say, and his agenda would pass. What the Democrats miss is the president’s own role in creating a hostile economic environment. They should try rereading his Georgetown speech.

“We’ve had no choice,” the president told his audience, “but to attack all fronts of our economic crisis at once.” Next came a reference to the $787 billion stimulus bill, the signature economic policy of the Obama administration and the most important mistake of his young presidency.

The stimulus has done nothing to promote private sector employment, and it seriously damaged the president’s credibility. In selling the plan, the White House said the stimulus would hold unemployment to 8 percent. Unemployment is holding at 10 percent. The administration can argue, with some justification, that things might have been worse without the stimulus. But voters are seldom swayed by this sort of “you-don’t-know-how-good-you-got-it” argument.

The stimulus had two other important effects. It united a dispirited Republican party, and it lulled the White House into a false sense of security. Well, the economy’s taken care of, they must have thought. Now we can start turning America into a really, really big version of Liechtenstein.

It is remarkable just how out of step the White House became. Health care reform, the bailouts, and cap and trade are not only unpopular. The public sees them as unimportant. Last week the Pew Research Center released a list of the public’s priorities. Number one is the economy. Health care is eighth. Financial regulation is fifteenth. Global warming? Dead last at twenty-one.

Which brings us to Obama’s other big mistake. Throughout 2009 the White House cavalierly dismissed its critics. It picked high-profile fights with Rush Limbaugh and Fox News. It dismissed all objections to health care reform as lies. It said the public’s “anger” and “frustration” was completely disassociated from the substance of the Obama agenda. It ascribed Republican victories in Virginia and New Jersey solely to weak candidates and local issues.

// Progressive confidence devolved into progressive hubris—a hubris that blinded Obama to changing political reality. Before he knew it, Massachusetts voted to replace Edward Kennedy with a Republican truck driver from Wrentham whose mother had been on welfare and who campaigned explicitly on opposition to the president’s health care bill.

Obama’s response? In his State of the Union address last week, the president blamed these setbacks on Senate rules, Republican obstruction, and a failure to communicate effectively. In other words, the message was not received.

It takes time for an administration to change course; maybe Obama will drop his big government agenda and move to the center over the coming year. He doesn’t, however, seem to want to. So Republicans have every reason to be cheerful. Obama persists in laying the foundation for a house nobody wants to buy.

Matthew Continetti is associate editor of The Weekly Standard and the author, most recently, of The Persecution of Sarah Palin (Sentinel Books).

–>

[Via http://cliftonchadwick.wordpress.com]

Dik Durun

2010-01-29T18:39:00.000+02:00

Şu hatunlar gibi dik durun hayatınızda; peki nasıl sürekli dik durursunuz bunlara değinelim. İlk olarak kendinize güveniniz olsun yoksa mıy mıy bir tip olursunuz. Yanı sıra kısa olarak bahsetmek gerekirse Kürek kemiklerinizi arkaya doğru tutun ama bunu sürekli yapın bir süre sonra vücut alışacaktır. Yanı sıra başınızı omuzlarınızla aynı hizada tutarsanız daha iyi olur.

[Via http://trgy.wordpress.com]

The my schools website

2010-01-29T10:46:00.000+02:00

The SMH has published a league table of all schools in NSW, derived from the myschool site, ranking them by their Year 5 and Year 9 average results. They’ve called it an “alphabetized list” (because league tables are illegal), which is rubbish, because each school has a ranking (calculated on the average year 5 and year 9 results).

There are all sorts of problems with the ranking (it ignores year 3 and year 7, it doesn’t show the raw material the school started with, which is why the selective schools dominate the list, just to name two), but the bigger problem, for me, is the intrinsic assumption made both by the website that it is OK for children from low socio economic groups to get worse results. The Index of Community Socio-Educational Advantage (ICSEA) is used to decide which schools are ranked against which. So the thinking behind the MySchool website is that it is perfectly fine for children from a school like John Warby Public School to be significantly worse than the state average, because if we compare their results with similar poor children, they mostly do a lot better. I’m sure that means that the effort the teachers, parents and children of that school make is well directed. But imagine what more they could do for their children if they had the resources of this school.

It’s not acceptable that this site implies that John Warby Public School students are getting a good outcome from our school system. That implies that it is fine for children from poor backgrounds to get a worse education than average. This information should be being used to take resources away from the schools which are beating the state’s unadjusted average, particularly if they are private schools, and give more resources to schools that have a NAPLAN average below the average.

[Via http://penguinunearthed.wordpress.com]

Tax Increases Out the Wazoo‏

2010-01-29T02:47:00.000+02:00

Thanks to Lakewood activist Natalie Menten for alerting us about these debilitating tax increases to be heard very soon… “On Wednesday, January 27, multiple bills raising taxes (through eliminating tax exemptions) will be heard in the House Finance committee. I’ve listed the worst bills below. Click on the bill number to read the text.

These bills are being fast tracked and would become effective almost immediately. Please e-mail or phone the committee members to voice opposition to these tax increases. This is the BEST opportunity we have to kill these bills before they go to the House floor.

Alternaitvely, you can attend the committee meeting to voice opposition. The Finance committee will meet at 1:30 pm, in the Legislative Service Building at 14th & Sherman, room LSB-A, across the street from the capitol (Note that the “House Calendar” incorrectly reflects different meeting information).

HB 10-1189

Elimates Sales Tax Exemption on Direct Mail

HB 10-1190

Temporarily eliminates the sales tax exemption on storage, use or consumption of electricity, fuel and other energy products.

HB 10-1191

Eliminates the sales tax exemption on candy and pop. By the definition included in this bill, even honey roasted nuts are candy.

HB 10-1192

Eliminates sales tax exemption on some software products.

HB 10-1193

Requires out of state retailers to collect sales tax on Coloradan’s purchases.

HB 10-1194

Eliminates sales tax exemption on non-essential items such as plastic ware, condiments, napkins, bags and other items.

HB 10-1195

Suspends sales tax exemption on products used to care for livestock and crops.

HB 10-1198

Suspends the Alternative Minimum Tax credit.

HB 10-1199

Reduces net operating loss carryover to $250,000 for businesses.

To contact the House Finance Committee, e-mail them using the e-mail address strings I’ve provided below. Just copy them into your e-mail address box:

repjoeljudd@joeljudd.com,debbie@debbiebenefield.org,

kjerryfrangas@earthlink.net,cheri.gerou@gmail.com,

repkagan@gmail.com,john.kefalas.house@state.co.us,

replabuda@yahoo.com,ellen.roberts.house@state.co.us,

ken.summers.house@state.co.us,spencer.swalm.house@state.co.us,

brian@briandelgrosso.com

Alternatively, you can call the committee members:

Rep. Joel Judd (D) 303-866-2925

Rep. Debbie Benefield (D) 303-866-2950

Rep. Jerry Frangas (D) 303-866-2954

Rep. Cheri Gerou (R) 303-866-2582

Rep. Daniel Kagan (D) 303-866-2921

Rep. John Kefalas (D) 303-866-4569

Rep. Jeanne Labuda (D) 303-866-2966

Rep. Ellen Roberts (R) 303-866-2914

Rep. Ken Summers (R) 303-866-2927

Rep. Spencer Swalm (R) 303-866-5510

Rep. Brian Delgrosso (R) 303-866-2947″

Please contact the members of the House Finance Committee and express your concern over these crippling tax increases. Even John Hickenlooper said raising taxes during a recession “counter-intuitive.” I on the other hand, would call it plain DUMB. Thanks for listening, Justin Longo Legislative Director, Libertarian Party of Colorado “Whoever wishes peace among peoples must fight statism.” -Mises ============================================== Please forward this e-mail to friends and family who are concerned about defending our freedoms! Urge others to sign up to receive these free alerts at: http://lpcolorado.org/lpcolibertyalerts.aspx You can read past “LPCO Liberty Alerts” at: http://lpcolorado.org/lpcolibalertarchive.aspx Sign-up to receive free e-mails from the National Libertarian Party at: https://www.lp.org/signup Support the Libertarian Party of Colorado by joining the 1776 Club: http://lpcolorado.org/donate.aspx My contact information: Justin Longo Legislative Director, LPCO Phone: (703) 994-7104

LegislativeDirector@LPColorado.org

[Via http://patricksperry.wordpress.com]

Vegan on the Road... The Entertainment of Geithner

2010-01-27T18:47:00.000+02:00

I’m sitting in the Cafe at the Common Market store in Frederick, MD, where I shop on Wednesdays for the discount to buyers over 60. This is the best organic/vegan food source near our home in Shepherdstown and I have a great time shopping here.

On the way down, I listened on C-Span Radio to Geithner and the House Committee that he was testifying before duke it out over the TARP funding and why AIG got 100% monies while other sufferers got 3% or 5% monies… stuff like that. There also seems to be a large contingent on both sides of the aisle working on Geithner’s connections to Goldman Sachs which apparently made out like bandits on the federal funding deal and didn’t do anything to change their approach to the market. Of course it doesn’t help that Geihtner and Bernanke and a lot of the other “federal” folks involved were ex-Goldman Sachs employees. It sure looks like a stinky setup.

Lunch here at the Cafe, with free Wifi (albeit really slow) let’s me check in on e-mail and such and it looks like a lot of my friends are not buying Geithner’s babble. Can’t wait to see if he’s still going as I head back home. The Vegan Tofurkey Reuben was great, too.

[Via http://underthelobsterscope.wordpress.com]

Econ: Consumption I

2010-01-27T10:54:00.000+02:00

All of us consume. Everyday we buy many things like food, school supplies, clothes, books, or medicine. We avail ourselves of non-material things like cellphone load, education, haircut or recreation. Since birth, especially in a capitalist economy, all of us are consumers – consumption is necessary if a new and productive person is to be reproduced.

Too bad that despite of the importance of consumption to our lives, most of us are poor judges of what we buy. Some people, especially those with much money, are even sick of a psychological condition named compulsive shopping, characterized by the inability to control buy things, which are often unnecessary.

WHAT IS CONSUMPTION?

Consumption is the process of buying goods and services for the satisfaction of one’s needs and wants. A person who consumes is a consumer.

WHAT ARE THE PROBLEMS OF A CONSUMER?

The biggest problem of any consumer is the allocation of her/his limited money to a bewildering number of things to buy. How can a person get the best out of his money? Remember, economics is not just the study of work or the allocation of scarce resources… it is first, and foremost, the practical study of how one can get the most with the least.

Confusion due to a variety of goods

The multiplicity of articles in the market makes it difficult for a consumer to choose an article which suits her/his particular need or want. There are practically endless lists of flavors of ice cream, kinds of edible fishes, brands of laundry soaps, etc. Now, not all of the items offered have the same price nor can they give the same satisfaction. As a consumer you want the least expensive yet most effective or most satisfying product.

Lack of standardization

Even though many products are now mass-produced by machines and undergo quality tests, there is still a lack of standardization among the consumer items in the market. A particular brand’s shade of red is not necessarily the same as another’s. A manufacturer offers its shampoo in sachets in grams, another one offers bottles in ounces. There are square biscuits, round biscuits, star-shaped biscuits, and biscuits in all imaginable shapes. Lucky are those who are able to buy the thing they actually wanted or needed; most of us just buy the available article closest to what we have in mind.

Purchases bring different kinds of satisfaction

A peso spent on a pizza is not the same as a peso spent on pan de sal. Some people will be happier with just one slice of pizza while others would rather gorge on heaps of pan de sal. Some people will go on hunger strike to save money for a book, a new dress, or cellphone load, while others never save because they are slave to their stomach’s desires. The happiness or contentment one gets from a haircut is not as permanent as the happiness from a beautiful book or painting. Since not all of us have all the money to buy the things that will make us happy, we need to be smart enough to buy the things that will give us the most satisfaction for our money.

WHAT FACTORS AFFECT A CONSUMER’S BEHAVIOR WHEN MAKING A PURCHASE?

There are several factors consumers have to face every time they shop. These are the following:

Price – We, as buyers, like everyone else in a rational world, want the most satisfaction for the least cost. We scan the shelves for the cheapest product, watch the news to monitor price levels, haggle with sellers, shop during sales, or shop in bargain stores (like ukay-ukays.)
Quality and appearance of goods – Consumers must not only check the quantity of the product they are buying, they must also assess its quality. Many goods are cheap because their qualities are compromised. Of course, for a person on a tight budget, it is a risk that must be taken. But for those with the money, and thus the choice, to risk their satisfaction, health or future for a bargain is unnecessary and foolish.
Brands – We are influenced by the brand of the good we intend to buy. In a world of asymmetric information, brands are assurances. We prefer a particular brand because of its quality, popularity or attractiveness.
Advertisement – An advertisement is the offering of a product in the mass media. Advertisements aim to attract the consumer’s attention and sway them into buying the product. Advertisers use a number of ways to persuade people into buying the product. Other attractors that fall under the same category as advertisements include jingles, bonuses, or raffles.
Buying capacity – The choice of goods depends partly on the buyer’s buying capacity or purchasing power. People with little purchasing power are effectively barred from availing high-end products, while people with greater purchasing power have more freedom with regards to their choices.

[Via http://socscistudent.wordpress.com]

Obama vs Bush...

2010-01-27T02:54:00.000+02:00

Gotta love this one.

Obama Versus Bush on Spending

Very little is safe for Democrats this fall.

By KARL ROVE

‘If Massachusetts puts Brown in, it’s a message of ‘that’s enough.’ Let’s stop the giveaways and let’s get jobs going.”

Marlene Connolly is a 73-year-old Massachusetts Democrat who cast her first vote for a Republican in supporting Scott Brown. Her quote and story comes to us via the New York Times, but she stands out for this reason: She shows us that those who actually cast ballots in the Bay State did so because they are frustrated with the administration’s unrestrained federal spending and failed economic recovery policies.

And here’s what Washington needs to keep in mind as it debates the meaning of Massachusetts. Ramming health care through now won’t insulate Democrats from voter ire in November. It will feed a fire over spending that is already blistering them.

[Via http://1idvet.com]

World Wonders How to Rebuild Haiti

2010-01-25T18:52:00.000+02:00

“What we are speaking about is re-launching our country on a path of development. It is not a question of going back to the status quo,” Bellerive told an international meeting Canada is hosting to assist Haiti’s reconstruction…

This is where the greatest opportunity to recognize Our collective capacity to make change can be fully realized. It is not so much in providing the initial emergency relief efforts, but rebuilding a country that can continue to prosper after the catastrophe.

In the article, Haitian PM Bellerive announced the need for alternate energy sources like wind generators to reduce the need for fossil fuels. He also spoke of rebuilding the city with Our latest technology that could sustain future earthquakes.

Of course, all of this reconstruction will be very costly and Bellerive is asking the international community to continue to provide support while the country rebuilds. This places an incredible demand on the international community and also subjects Haiti to financial control by corporations that may seek to capitalize on Haiti’s financial need, offering long term support and construction projects that are more focused on future profits than the best interest of the Haitian economy. As corporations bid for rebuilding contracts, the Haitian government will become increasingly indebted to corporations and the deficit created will become the burden of Haitian taxpayers, not the government.

But still there is the opportunity for greatness. Haiti is an opportunity to put Our greatest human achievements to the test, to see how great Our reconstruction efforts can be, perhaps even setting an example for other industrialized cities and paving the way to a new, progressive humanity.

“We have to do more with less,” Bellerive said.

The best part is, We can do more with less. Every day technology and science allow Us to know new levels of efficiency, continually allowing Us to do more with less. Unfortunately, an economic social system does not support doing more with less. Technology and money are on a collision course with each other. If We do more with less, then there are less jobs. Population, even with disasters like what We have just experienced in Haiti, is continually increasing. Doing more with less means having less jobs for more people and this is exactly why We haven’t been utilizing much of the technology We already have in Our own cities. Its ‘better’ for the economy if We continue to be waste Our resources so We can create scarcity so that things can continue to have value, so people can continue to have jobs.

Its ironic, really. Most people in the world would love to work less. Technology and science allow Us to do more with less, yet less jobs between more people is a bad thing in an economic society. You would think that people would celebrate every opportunity to reduce the labor pool. Less jobs divided amongst more people means less work and more free time – yet Our current social system will never allow Us to know or enjoy the greatest of Our scientific and technological achievements. We would rather destroy the world and Our environment than entertain the idea of having less jobs and more free time… A little ironic for a society that seems to continually complain about how much We need to work.

Money always stands to corrupt Our most noble intentions. Check out My Fantasy Fund, a proposal for peace that would systematically remove corruption from Our social system.

[Via http://vondehnvisuals.wordpress.com]

What Is China Doing Right?

2010-01-25T09:57:00.000+02:00

By now the entire world is reeling from the recession that has effected everyone, in one way or another….economic growth has been dismal and recovery has been slow…..but yet there is a bright spot….China….

the UK’s Guardian is reporting:

The Chinese economy returned to double digit growth in the fourth quarter, with a jump of 10.7% year-on-year, but inflation is creeping up again amid fears of overheating.

Although the fourth quarter GDP figure was slightly below analysts’ expectations, it was the fastest for two years and a marked increase on the previous quarter’s 9.1%. It took 2009’s growth to 8.7%, outstripping the official growth target of 8%, the level some believe essential to create enough jobs to match growth in the labour force.

“China has become the first, on the whole, to achieve recovery and stabilization in its economy,” Ma Jiantang, commissioner of the National Bureau of Statistics, told a press conference in Beijing. But he said China would avoid major adjustments to economic policy given the “uncertainties” it still faces and a weak global outlook.

So, what is China doing right? In the sense that they are showing a steady growth in their economy…..

[Via http://lobotero.wordpress.com]

End the Fed: Book Summary (Chapters 1-3)

2010-01-25T02:41:00.000+02:00

End the Fed By: Ron Paul More Chapters to come. Quotes Chapter One: Why you should care

“Ending the Fed would be the single greatest step we could take to restoring American prosperity and freedom and guaranteeing that they both have a future.”

Page 5

“The fact the Fed can create trillions of dollars and distribute them to its cronies without congressional oversight should shock us all.”

Page 10

“I’ve written this book to explain hy I think the system of the Fed domination myst come to an end.”

Page 4

Any discussion of our economy world be ineffective without a serious discussion about money policy and the Fed’s role in manipulating our money and economy. The Fed claims o stabilize the business cycle, control inflation, maintain a solvent banking system and regulate the financial system. I disagree on each point.

The past meltdown was due in part to ‘illusory wealth” in the words of Barack Obama, an illusion the Fed is helping create. Nations rise and fall on the quality of their currency. Everyone should be interested in their money, it is necessary for survival and a free society. Ending the Fed may be seen as radical, but it is in fact deeply rooted in our history, with patriots like Thomas Jefferson leading the charge against the Feds predecessor.

Ending the fed would remove the money monopoly from the government, forcing them to live within their means. It would prevent them from financial trickery, waging wars they can’t afford, and passing the costs on to future generations. Our very freedom is at stake.

More Information Review / Critique Ron Paul

B-Note | Posts | Wiki

Democrats

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This was a good first chapter. Lots of doom and gloom, which is a great start to a book calling for an end to the Central banking America has used for decades. Hell, he even calls for an end to paper money. He addresses the radical nature of the proposal a bit, and he defends himself well. The tone of the chapter isn’t really conversational, for some reason I can almost see him reading from this book as a campaign speech, or perhaps more aptly, a post-victory political speech. Not sure if I like the tone yet. Overall, a good start.

Quotes Chapter Two: The Origin and Nature of the Fed

In this way, fractional reserves create new money, pyramiding it on top o f a fraction of old deposits. Page 16

The Fed [was] “the most tragic blunder ever committed by Congress the day it was passed, old America died and a new era began. Page 23

That phony money creates a false boom is not an unknown fact in history. Page 30

Some may imagine that the Fed has always been around. This is not the case. It was established only in 1913, and since it’s founding secrecy has been its method of operation. At the time, banks were upset about not having a lender of last resort, but for our economy, the risk of failure is an important regulator of decision making.

Fractional reserves allows banks to loan money that is currently being spent as cash or deposited in another bank. This system is inherently unstable, it’s a sinking boat and our entire modern history of banking reform has been an attempt to patch up this leaky ship.

The story of the Fed starts in 1775 when American first created the Continental, a failure that lead to generations insisting on a gold standard. America flirted with centralized banking several times, first in 1811 and the closing of the Second Bank in 1836. By 1906 people were again trying to bring about a Central Bank. The panic of 1907 solidified in many peoples minds the idea of a depositor of last resort, though it was in actuality the act of fractional reserves that was to blame. The bill, written in 1910 promised to end make the panics seen in the past mathematically impossible. In reality, the US dollar has fallen in value to only 5% what it was worth when the Fed was established, with Fed having effectively stolen 95% of each dollar we have.

In a free market system, interest rates wouldn’t lower until there was an excess in deposits, signaling that enough short term sacrifice has been made to invite future investment. By the Fed decreasing the interest on a whim, it creates the illusion that there in an excess of deposited cash. This is an illusion, an illusion that gives way to bust and boom cycles. The Fed hasn’t given us stability, it has given us instability.

More Information Review / Critique

A (long) series of (very good) videos explaining our banking system.

Part 1

Part 2

Part 3

Part 4

Part 5

The Fed (Wiki)

Ron Paul Music Video (Awesome? Totally!)

This was a very good chapter. The author, after setting up the problem in the first chapter, jumps right into the meat in this one. There are several charts and figures that might be tedious to some readers, but which I find interesting and well used. The chart showing the falling value of the US dollar was particularly impressive. Additionally, the way the author throws around dates shows he’s done his research. More importantly, the way he breaks down really complicated monetary policy concepts shows he’s more than qualified to write a book on the subject.

It’s clear the man knows what he’s talking about. Don’t read that as an endorsement for ending the Fed, it’s only chapter 2 and I’m not sold. But it’s clear from the way he write about such “boring” subject matter as practical reserves and interest rates that the guy is talking about what he knows and is beginning to build (I think) a solid foundation for later arguments.

Quotes Chapter Three: My Intellectual Influences

I have no problem with those who say education is the most important thing, but eventually a theoretical philosophy has to be translated into political actions. Page 56

Transfer of wealth through government force is self-limited. The appearance of wealth through borrowing and inflation always leads to heartache and suffering. Page 57

I was… convinced that a philosophy that embraced personal liberty, private property, and sound money was the only political philosophy worth championing. Page 62

His childhood taught him the tough lessons of saving and hard work. His father taught him the value of money and theft of dilution. His grandmother taught him the fears of hyper inflation.

As an adult he began reading books on economics and monetary policy. He studied both modern and older economists, both American and foreign, finding many impressive economic theories originating from Austria. America rejected much of the economic theories Ron Paul embraced. Rather than remaining with the gold standard, America borrowed and devalued our cash vastly below the value of gold. Roosevelt went so far as to confiscate all gold in 1933, attaching a $400,000(inflation adjusted)/10-year penalty to the crime. Much harm has ensued.

It is the anti-gold theory that has lead us to our current economic turmoil, and if we get out of this one, it will lead us to the next. Socialism, welfare, and government intrusion are easier theories to sell, but ultimately, when people realize those are only short term fixes, they will become more open to the suggestion that freedom offers more.

More Information Review / Critique

Taxes (Posts)

The Economy (Posts)

Like books about monetary policy? Try this one! (The End of Prosperity)

This chapter was a bit odd in that in kinda mixed with the previous chapter. It starts with his family, and at several points along the way goes back to his family life and people he knew personally and books he personally read, but interspaced throughout he also argues for the gold standard and against the government attempts to both devalue money and keep down the price of gold. The argument, that government intervention is an affront to personal freedom is throughout. There’s a lot of information, but the organization isn’t as good as the previous one. Still, a solid chapter.

The information about how Roosevelt outlawed owning gold and no president after him fixed that (clearly) tyrannical act I found particularly compelling. That that action was just the first of many actions the US government took to control gold all while allowing the dollar to collapse in value is of particular interest.

[Via http://politicalbooks.us]

Quotes

2010-01-22T18:01:00.000+02:00

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[Via http://uleltuxi.wordpress.com]

No FT, no rubbish on your breakfast tray

2010-01-22T10:11:00.000+02:00

The Financial Times greets Obama’s promise to restore something akin to Glass-Steagall with the worst, most I’m-17-and-went-to-boarding-school, most congenitally spineless and brainless editorial (you may need a subscription to read this drivel…) that I can remember on its pink pages.

It starts with a tabloid headline – ‘Obama in declaration of war on Wall Street’ – and goes quickly downhill. The first four words of the first sentence are ‘Markets nosedived on Thursday…’ This refers to falls of 1.9% in the S&P 500 and 1.6% in the FTSE 100. They didn’t write ‘spiralled out of control’ when the same markets went up by not much less a couple of days before.

But it is the non-attempt to critique what Obama is saying that riles. The president should not try, the paper says, to prevent deposit-taking banks from trading on their own account because: ‘Boundaries between bank functions will be hard to draw.’ It is that old chestnut of the gormless right: this sounds new and unusual and a little bit difficult, so let’s do nothing.

Instead, The FT recommends an immediate return to the failed approach of the past 40 years: ‘The government’s key policy lever should be to make sure that institutions hold enough capital to reflect the risks that they run and the threats that they pose to the rest of the financial system.’ There have been endless efforts to regulate banks through their capital rather than their structures and they have failed for a very simple reason. It is that you cannot make rules about capital adequacy that are valid through the economic cycle.

In other words, the amount of capital that it is appropriate for a bank to hold when no one wants to invest (like now) is completely different to the amount of capital a bank should be made to hold when the world thinks that property prices will never fall again (a la pre-crisis). This is why economists refer to banks as pro-cyclical: they make economic cycles worse by mirroring the greed and fear of society at large.

Management by capital alone could only be effective if it was run by some kind of omnisicient, globally-empowered committee. This would tell the banking industry how much capital it should have at different points in the economic cycle. Banks would be instructed by the world’s cleverest men and women when to calm down and when to lend against their will.

Think about this for a moment. You will now have realised that the proposal is completely impracticable. There could never be a Pareto-efficient agreement about who should be on this committee any more than there is about who should be on the UN Security Council. And such a system almost certainly would not work anyway, because the chances of finding omniscient people are extremely small.

So you do what works. That means separating the utility and speculative functions of financial institutions in a way similar to what was done by the 1933 Glass-Steagall Act. People who want to play with the savings of the ordinary, conservative public must run one kind of bank, whose activities are narrowly circumscribed; people who want to leverage up 30 or 40 times must operate a different kind of financial business in which the capital at risk really will be lost when things go pear-shaped.

Why is this so difficult to agree on? The FT completely fails to point out that Paul Volcker, who has been brought in to consult on the reforms, is a highly orthodox former federal reserve governor who was reappointed to that position by Ronald Reagan. He is not some kind of hippy. What Volcker has, and what Obama’s current economics and fed team palpably lacks, is the intellectual reach and self-confidence to figure out and push through simple, effective changes which the US establishment will not like.

More…

The FT editorial is also completely at odds with what its own chief business commentator writes

The Economist is hurt by its Thursday publication day, having produced a two-page briefing on bank regulation prior to Obama’s ‘Glass-Steagall’ remarks. A reaction to the latest news is posted to The Economist site.

[Via http://joestudwell.com]

Marilyn Gang on the victory for food freedom and access to raw milk

2010-01-22T02:50:00.000+02:00

This is from an email communique sent out to Toronto Dowsers members by Marilyn Gang. Marilyn and the dowsers have been strong suppporters of the raw milk cause since the raid on Michael’s farm in 2006.

Michael Schmidt, the Durham Dairy Desperado was acquitted on all 19 charges against him, which stemmed from the pre dawn raid on his dairy farm November 21, 2006.

The judge announced his decision, and the reasoning behind it today at the Ontario Court of Justice in Newmarket.

Court was scheduled for 9:00 a.m. today. I was unable to get there until 11 and thought the verdict would have been handed down by that time. It was not. About 150 of us were in the hallways, waiting, until 12:05 when Michael exited the courtroom and told us the verdict — to a roar of applause, cheers, whistles and glasses of real milk raised in a toast, to Michael and to all of us.

During that almost 3 hours in the courtroom, apparently the judge was reading his 40? page decision.

Michael greatly appreciated the work of this judge. He said that the judge explained how he arrived at his decision from the very beginning and that “this case law can be applied to many segments. The court actually preserves and opens up a niche that we are all longing for … What Canada should be. … We pried open the door for individual rights in this country.”

“Stay out of our bedrooms, our stomachs and our refrigerators.”

Michael complimented the work of the judge several times, telling us that his decision, and the way he worded it, opened things up for individual rights regarding food choice.

As he exited the courtroom, about 8 heavy duty news cameras were pointed at him.

About 200 people showed up at the rally in the senior center across the street. One of the speakers had an egg farm, he had been raided. A representative of the landowners association spoke about the Canadian armed forces major — whose home was raided because this man, who has a University of Guelph degree in biomedical toxicology, had slaughtered a pig, to use the meat for his own family.

What shall be interesting, from this point forward, is how government and industry will react.

The text of the decision ought to appear within the next few days at: http://www.foodrightsalliance.ca/

Toronto Dowsers website

[Via http://thebovine.wordpress.com]

rs4680 helps me tonically ponder the Burger King menu and phasically choose the least healthy items

2010-01-20T18:43:00.000+02:00

Image by nffcnnr via Flickr

One of the complexities in beginning to understand how genetic variation relates to cognitive function and behavior is that – unfortunately – there is no gene for “personality”, “anxiety”, “memory” or any other type of “this” or “that” trait. Most genes are expressed rather broadly across the entire brain’s cortical layers and subcortical systems. So, just as there is no single brain region for “personality”, “anxiety”, “memory” or any other type of “this” or “that” trait, there can be no such gene. In order for us to begin to understand how to interpret our genetic make-up, we must learn how to interpret genetic variation via its effects on cells and synapses – that go on to function in circuits and networks. Easier said than done? Yes, but perhaps not so intractable.

Here’s an example. One of the most well studied circuits/networks/systems in the field of cognitive science are so-called basal-ganglia-thalamcortical loops. These loops have been implicated in a great many forms of cognitive function involving the regulation of everything from movement, emotion and memory to reasoning ability. Not surprisingly, neuroimaging studies on cognitive function almost always find activations in this circuitry. In many cases, the data from neuroimaging and other methodologies suggests that one portion of this circuitry – the frontal cortex – plays a role in the representation of such aspects as task rules, relationships between task variables and associations between possible choices and outcomes. This would be sort of like the “thinking” part of our mental life where we ruminate on all the possible choices we have and the ins and outs of what each choice has to offer. Have you ever gone into a Burger King and – even though you’ve known for 20 years what’s on the menu – you freeze up and become lost in thought just as its your turn to place your order? Your frontal cortex is at work!

The other aspect of this circuitry is the subcortical basla ganglia, which seems to play the downstream role of processing all that ruminating activity going on in the frontal cortex and filtering it down into a single action. This is a simple fact of life – that we can be thinking about dozens of things at a time, but we can only DO 1 thing at a time. Alas, we must choose something at Burger King and place our order. Indeed, one of the hallmarks of mental illness seems to be that this circuitry functions poorly – which may be why individuals have difficulty in keeping their thoughts and actions straight – the thinking clearly and acting clearly aspect of healthy mental life. Certainly, in neurological disorders such as Parkinson’s Disease and Huntington’s Disease, where this circuitry is damaged, the ability to think and move one’s body in a coordinated fashion is disrupted.

Thus, there are at least 2 main components to a complex system/circuits/networks that are involved in many aspects of learning and decision making in everyday life. Therefore, if we wanted to understand how a gene – that is expressed in both portions of this circuitry – inflenced our mental life, we would have to interpret its function in relation to each specific portion of the circuitry. In otherwords, the gene might effect the prefrontal (thinking) circuitry in one way and the basla-ganglia (action-selection) circuitry in a different way. Since we’re all familiar with the experience of walking in to a Burger King and seeing folks perplexed and frozen as they stare at the menu, perhaps its not too difficult to imagine that a gene might differentially influence the ruminating process (hmm, what shall I have today?) and the action selection (I’ll take the #3 combo) aspect of this eveyday occurrance (for me, usually 2 times per week).

Nice idea you say, but does the idea flow from solid science? Well, check out the recent paper from Cindy M. de Frias and colleagues “Influence of COMT Gene Polymorphism on fMRI-assessed Sustained and Transient Activity during a Working Memory Task.” [PMID: 19642882]. In this paper, the authors probed the function of a single genetic variant (rs4680 is the Methionine/Valine variant of the dopamine metabolizing COMT gene) on cognitive functions that preferentially rely on the prefronal cortex as well as mental operations that rely heavily on the basal-ganglia. As an added bonus, the team also probed the function of the hippocampus – yet a different set of circuits/networks that are important for healthy mental function. OK, here is 1 gene who is functioning within 3 separable (yet connected) neural networks!

The team focused on a well-studied methionine/valine variant of the dopamine metabolizing COMT gene which is broadly expessed across the pre-frontal (thinking) part of the circuitry and the basal-ganglia part of the circuitry (action-selection) as well as the hippocampus. The team performed a neuroimaging study wherein participants (11 Met/Met and 11 Val/Val) subjects had to view a series of words presented one-at-a-time and respond if they recalled that a word was a match to the word presented 2-trials beforehand – a so-called “n-back task”. In this task, each of the 3 networks/circuits (frontal cortex, basal-ganglia and hippocampus) are doing somewhat different computations – and have different needs for dopamine (hence COMT may be doing different things in each network). In the prefrontal cortex, according to a theory proposed by Robert Bilder and colleagues [doi:10.1038/sj.npp.1300542] the need is for long temporal windows of sustained neuronal firing – known as tonic firing (neuronal correlate with trying to “keep in mind” all the different words that you are seeing). The authors predicted that under conditions of tonic activity in the frontal cortex, dopamine release promotes extended tonic firing and that Met/Met individuals should produce enhanced tonic activity. Indeed, when the authors looked at their data and asked, “where in the brain do we see COMT gene associations with extended firing? they found such associations in the frontal cortex (frontal gyrus and cingulate cortex)!

Down below, in the subcortical networks, a differerent type of cognitive operation is taking place. Here the cells/circuits are involved in the action selection (press a button) of whether the word is a match and in the working memory updating of each new word. Instead of prolonged, sustained “tonic” neuronal firing, the cells rely on fast, transient “phasic” bursts of activity. Here, the modulatory role of dopamine is expected to be different and the Bilder et al. theory predicts that COMT Val/Val individuals would be more efficient at modulating the fast, transient form of cell firing required here. Similarly, when the research team explored their genotype and brain activity data and asked, “where in the brain do we see COMT gene associations with transient firing? they found such associations in the right hippocampus.

Thus, what can someone who carries the Met/Met genotype at rs4680 say to their fellow Va/Val lunch-mate next time they visit a Burger King? “I have the gene for obesity? or impulsivity? or “this” or “that”? Perhaps not. The gene influences different parts of each person’s neural networks in different ways. The Met/Met having the advantage in pondering (perhaps more prone to annoyingly gaze at the menu forever) whist the Val/Val has the advantage in the action selecting (perhaps ordering promptly but not getting the best burger and fries combo).

[Via http://genes2brains2mind2me.com]

A Simple Climate Policy Proposal: Spending Climate Scrip by Scope

2010-01-20T10:43:00.000+02:00

Introduction

In the city of Monterey, California, water is scarce, as it is elsewhere in California. In Monterey, the local regulatory environment is innovative and unique. Homes and businesses are required to “find” water whenever they develop an additional need for it. If I want to build a new house in Monterey where none exists, I must find the water. This might mean reaching out to other home owners and actually paying for the purchase and installation of low flow toilets in their homes, until the community collectively “finds” enough water to replace one household’s useage.

Let’s do the same for climate and add incentives. If Corporate America must go it alone because Congress can’t pass Cap and Trade without 60 Democrats, this could be a valid strategy, but to work, this must be a calibrated compulsory regulatory regime with environmentally assertive pricing. A voluntary or self-regulated system likely won’t be environmentally effective at all, but we may get desperate enough to try. Here’s the proposal.

Level Emissions from New Development. If I build or create a new home or business entity, I must “find” the Greenhouse Gases from other businesses and homes in the community, by investing in their low-carbon practices and technologies. To make this cap more effective, encourage local investments. Allow businesses and households to pay it forward by banking these community investments if they can for future quarters of development. Put a significant interest rate on temporary failures to keep up and punish long term non-compliance with the cap as heavily as possible, and refuse to permit such development. Note that the transient emissions impact of the building process itself is accounted for in the following paragraphs.

Make Profit the Engine of Emissions Reductions. For every dollar in profit that I earn as a corporation, make me spend a dollar in carbon scrip and set a tiered exchange rate by Scope. If I earn a quarterly profit of $1 million dollars, I am on the hook for that monetary value in physical Greenhouse Gas emissions reductions as scrip, and I can achieve them almost however I want, as long as they can be physically or financially verified according to rigorous regulatory standards. To use a pricing example that leads to big reductions, if Greenhouse Gas emissions reductions are worth $10 in profit scrip per ton, then I must reduce 100,000 tons of Greenhouse Gas in that quarter to make up my $1 million in actual quarterly profit, or face a punitive tax or fine on my actual emissions that is expensive enough to hurt me significantly, making me want to avoid it. I can “find” those emissions by investing in my local community if needed. Let the profit incentive itself be the engine of Greenhouse Gas emissions reductions.

Create a Tiered System. Create a tiered pricing structure that can be controlled by an objective economic authority such as the Federal Reserve and assign regulators to make sure that no more than one economic entity is claiming credit for a given reduction in emissions. Don’t allow companies to cheat by using outsourcing or other financial or structural sleights of hand to move emissions from tier to tier. The following allowances are conceptual illustrations, not actual policy suggestions, and they represent fictional money, not real trades or actual financial prices on carbon. That’s reserved for markets.

Reduce Scope 1, the operational emissions for which a corporation is directly responsible: my fleet fuel usage; the VOCs that my paints emit in the factory; my backup diesel generator emissions; the coal that my power plant burns; and my use of biomass combustion are all examples. Put the highest price on any reductions that I can achieve in Scope 1 to make it well worth my trouble, both to design new behaviors and engineering processes, and to document them to auditable standards using an environmental record. Sniff my smokestack if necessary or allow me to do it myself if I am combusting fuels or releasing fumes from a factory. For Scope 1 emissions, allow $1,000 profit per ton of emissions reduced. If can reduce my Scope 1 emissions by 100 tons of Greenhouse Gas in a quarter at $1,000 profit per ton, then I’m 10% there.

Reduce Scope 2, which is largely my electricity, heat, and steam usage by allowing $75 profit per ton equivalent. If I need to spend another $300,000 in Scope 2 scrip to meet my obligations, then I’ve reduced another 4,000 tons in emissions that quarter over the previous quarter of operations and investment.

Reduce Scope 3 at $50 profit per ton if I turn to my Value Chain to meet more of my obligations. Employee commute emissions reductions may also be priced as Scope 3 emissions reductions. The actual metabolism of my sector or industry or even my business is not as important as the incentive, and regulators can dial up a more assertive pricing structure as companies get leaner.

Reduce Scope 4, my corporation’s downstream product use emissions, by designing for efficiency, conservation, and lifecycle benefits at a price that regulators choose for policy effectiveness. Since these emissions reductions in Scope 4 are highly desirable, they need not necessarily be cheap.

Beyond scopes, if I invest in the surrounding community in order to achieve the reductions I need instead of taking ownership myself, let that price be much cheaper at say $5 profit per ton. And lastly, if I resort to commodity trading on the open market to get the reductions I need, let me account for that carbon at $1 profit per ton, so that I must reduce 1,000,000 tons per quarter at the real market price if this is my only strategy. Keep in mind that if the U.S. commodity markets are actually moving at $4 real per ton, I’m paying $4,000,000 in real money for the reductions that I didn’t invest in using carbon scrip, but I only made $1,000,000 in profits. Perhaps this should be my punitive fine for a failure to reduce my real emissions at the exchange rates that regulators have set between scrip and real money, by Scope. For this business, if the quarterly $1,000,000 is representative of long-term performance, then $4,000,000 alone represents a year of earnings. That’s a significant return-period loss event that threatens the viability of my business, just because I traded rather than reducing or investing in community or ecosystem emissions reductions. That shell game gets expensive.

Segregate the Commodity Markets. If the commodity markets absolutely must be the primary mechanism of reduction, then create tiered or pooled commodity markets, with separate pools for each tier or Scope. Don’t allow entities to trade emissions they don’t own for a premium, but rather ensure that it be done cheaply. Emissions that trade at the highest premium must be transactions between Scope 1 owners and Scope 1 owners, to ensure that such traders maintain adequate skin in the climate trading game rather than a dangerous climate trading bubble that would fuel a sustainability melt-down. Make these electronic transactions rather than OTC transactions to ensure transparency, but insist on ownership as well.

As I see it, the proposal is effective and free of negative incentives or moral hazard. The complexity and the cost of measuring, proving, documenting, or auditing emissions reductions are incented by the high premium placed on those emissions reductions as Scope 1 reductions. The easier and cheaper the proof, the more worthless the climate scrip that I must use, the more sheer tonnage of emissions reductions I must create in order to to make up for that.

Prediction and control are clearly going to be perceived as an issue here. Policy makers want reliability, but in my opinion they’re unlikely to find it under any regime. Cap and Trade alone might get us 5% over time or 10% at best in my opinion. To achieve 20% in the current political climate in Washington is just impossible, and Congress’ efforts are likely to be incompetent to the extent that they are watered down in the Senate. So while Cap and Trade seems to give us a reliable emissions target so that we know what we’re achieving, it’s not going to work that way. A Carbon Tax will also be difficult to calibrate to a specific emissions target, at least at first, before we know how the economy will respond. In contract, this proposal guarantees carbon neutral development and guarantees a bend in the emissions curve that is constructively encouraged by the profit motive. No, the policy doesn’t tell us how steep the bend would be or what target would be achieved and when, but it reliably and aggressively reduces emissions in a way that aligns with economic performance. It’s a worthy proposal.

[Via http://theresakrebs.wordpress.com]

Massachusetts: A Lunger in the Collectivist's Eye

2010-01-20T02:36:00.000+02:00

Tonight, the Libertarian Spirit in America has delivered a good lungerful right into the eye of the Collectivists. Those who spat on the lives of millions of Americans, as if their pronunciamentos would have no effect on those on whom they were imposed, are finding the lungerful is coming right back at them. They thought they could force millions of Americans to pay tribute to their almighty corporate interests to the tune of several hundred dollars a month for life, and that none of them would protest, and all would collaborate in their own destruction like sheep. All those millions who didn’t bother to vote, or voted for the Dems, never dreaming it would cost them their food money and higher income taxes, suddenly realized that voting Democratic, — or not voting at all — could cost them very dearly indeed; a sure cure for political indifference. Then the Tea Parties erupted, in large part because they were first initiated by Congressman Ron Paul, who had educated a large segment of the electorate so well during his campaign for the Presidency, that they knew exactly what was being done to them. This was the original impetus behind the Tea Parties and their anger, although Ron Paul certainly wouldn’t approve of interrupting or talking over someone trying to make a statement. The fact that the moribundi of the Republican Party tried to hijack those Ron Paul Tea Parties as their own was inevitable, but it should not detract from their originator. And even if the hijackers are mainstream Republicans, we should not shun their alliance if we see eye to eye on these issues.

The Democratic politicians, living in their ivory towers with their vast Congressional and outside incomes, completely divorced from the misery which their inflationary policies are creating for the average American, have been given a rude awakening, although they are the sort that are constantly and eternally in denial, because to deny the validity of their political ideology would be to deny the validity of their lives, and all they have been engaged in for the last thirty years. They can’t handle that reality, that trying to ram Fascism down the throats of Individualist Libertarians will always fail in America, and that is why they will find yet another excuse as to why they lost in Massachusetts. The fact that they lost because they are Fascists and bullies, who want to stick their noses deep within the lives of every member of the community, exactly as religious Fascists want to, will never be admitted to. But reality will sink in when there is mass defeat, and an alienation of voters that will last for many years.

The prospects for a Libertarian Party, or political wave, have increased greatly in the last few hours. After two and a half years of hell, since the first risings of the Obama-Clinton Fiasco during the campaign, America has been on a downhill trajectory. Now the ground is leveling out, and Silverwolf believes the trajectory for Individual Liberty may be up, for the first time in perhaps two and a half centuries.

One-tw0-zero-two-zero-one-zero. A mystical combination of the most basic numbers; the essence of the digital revolution. Is it also the date of the initiation of the Libertarian Revolution, first in America, then in the rest of the world? We hope so, and it is certain something most devoutly to be howled for.

Hoooooooooooooooooooooooowwwwwwww! — Silverwolf

[Via http://lobobreed.wordpress.com]

Finland to ban smoking

2010-01-18T18:34:00.000+02:00

In Canada and the United States, most drug related stories have been buried by the excitement regarding the recent rulings in favour of keeping Insite open, and having the FDA butt out of regulating the importation of electronic cigarettes.

That being said, one very important global news story almost slipped past our radar: Finland is trying to eliminate smoking within the next 30 years (full article here).

While most comments on this news story indicate that people are frustrated by these paternalistic laws, and quite frankly are sick of living in a “nanny state”, the government expects the legislation to pass without much objection. Conversely, I am, with regards to this proposal, of two minds.

On the one hand, the Finnish government is equivocating on the risks associated with different methods of tobacco delivery, thereby limiting smokers’ options to choose lower risk alternatives. They intend to do this by putting tobacco products behind the counter. We’ve indicated here and elsewhere the dangers of conflating a spectrum of risk to two categories: “risky” and “not risky” – so I won’t go into much detail aside from pointing out that this is bad. Very bad.

On the other hand, there are people who will quit using tobacco in Finland just because it is illegal. This is good. These people would probably be able to have quit, anyway, but this legislation may represent a good catalyst. Smoking is bad, and quitting is best, so that’s one potentially positive outcome. Moreover, while vilifying, and embarrassing smokers by forcing them to become outlaws should they continue smoking is inherently bad, smokers may, in the end, benefit.

In Canada, contraband cigarettes make up between 20 and 50% of all tobacco sales. The government indicates this creates “unfair competition for an honest business”. Certainly this is true, but when tobacco use becomes completely illegal, a black market will be the only source for people who believe they are truly addicted to find cigarettes. With enough competition, cigarettes will be more affordable in these markets.

Further to this, the government will be at a loss when it comes to leveraging astronomical sin taxes against smokers, many of whom are already economically disadvantaged. That can be the continuing smokers’ final F-U; a satisfying feeling of smoking cheaper cigarettes with no proceeds going toward the entity which seemed bent on incrementally depriving them of their small pleasure.

In Canada the government is losing almost 1 billion dollars annually on contraband cigarettes, while collecting approximately 1.8 billion on legal sales. Finland is closing the doors on millions and millions of tax dollars, while enacting an inherently bad law that is impossible to enforce behind closed doors. So, good luck to Finland and best of luck to those who will use this legislation as the impetus to quit. Finally, further luck still to those who will continue to smoke and refused to feel shamed by this paternalistic legislation.

-CEH

[Via http://smokles.wordpress.com]

The Most Interesting Story on Earth

2010-01-18T02:27:00.000+02:00

John Lanchester, author of, among other books, The Debt to Pleasure (he was on to debt early), says in his newest book:

I’ve been following the economic crisis for more than two years now. I began working on the subject as part of the background to a novel, and soon realized that I had stumbled across the most intersting story I’ve ever found…. It is an absolutely amazing story, full of human interest and drama, one whose byways of mathematics, economics, and psychology are both central to the story of the last decades and mysteriously unknown to the general public.

Lanchester has writerly talents that allow him to tell this amazing story in an illuminating way, with at least one conclusion that runs counter to those (e.g., Jamie Dimon) who see the financial crisis as merely a brief example of capitalism having fallen off the wagon of profit. Lanchester asserts that the lessen of the fall of 2008 ought to be a realization that more individualism and the singular pursuit of economic happiness via shopping and endless purchasing will not be the answer. The answer lies not in individual getting and spending and indulgence but in collective rationality. The short version is: we are all in this together.

For reasons that I am unable to discern, the American title of Lanchester’s book is I.O.U., while the U.K. version is called Whoops. While many people in the U.S. will know Lanchester from his literary works, I.O.U. has been sent on to the business section of your bookstore. This categorizing for shelving purposes might not help sales, so be sure to direct any Lanchester fans you know to the business aisle of the local bookstore.

[Via http://brucekrajewski.wordpress.com]

Not Yours to Give...

2010-01-15T18:50:00.000+02:00

It is high time that people realize that acts of evil most often come clothed in the robe of good intentions. The devastation that has been wreaked upon the people of Haiti over the last few days is terrible beyond all words. Those people need help–and lots of it. Any decent human being should feel sympathy toward their plight and, I would argue, an urge to assist them in the same way that we would want assistance if it had happened to us. With that being said, we also have to realize that instances of misfortune and even tragedy are not a free pass for our government to abandon the principles upon which it was founded.

President Obama has pledged $100 million to help the people of Haiti. Who could possibly be against such a good-hearted gesture? Me. And you–if you believe in the tennets of the Constitution and the freedom which the our nation is supposed to stand for. Foreign aid–whether it be to Haiti for earthquake relief or to Israel for defense or to Ethiopia for famine relief–is forced charity. The money the government “pledges” comes from the tax dollars of every single American. It is donated without our consent or our input. It is allocated without the slightest consideration for the values or preferences of those whose pocket it has come from. Simply put, we should be telling our legislators and our President that the money is Not Yours to Give.

I capitalized those words because they comprise the title of an excellent story about Davy Crockett during his days in Congress. The story is a bit too lengthy for reproduction here, so I will simply include this link.

http://www.juntosociety.com/patriotism/inytg.html

In short, the story simply teaches the lesson that charity is a personal choice. It should come from the hearts and minds of those individuals who truly care enough about a cause to open their wallets and purses to do something about it. I urge every American to give–and give deeply–to those causes which stir in them a passion to help. Surely, Haiti qualifies. Then again, maybe it doesn’t. You should, however, have the freedom to make that decision for yourself.

[Via http://gaultsgulch.wordpress.com]

Religion: should good Muslims take a stand ?

2010-01-15T10:24:00.000+02:00

Since 911 I have heard very little Muslim opposition to Muslim extremism. It seems that if Muslims were to publicly oppose the actions of Muslim extremists that a lot of good could come out of it.

What would happen if a terrorist group proclaimed that they were acting on behalf of Jesus or Buddha?

As we begin more reactionary efforts to prevent terrorism ( full body scans are a reaction to packets of powder in underwear ) I think that prevention would be best served by public opposition by the Muslims themselves.

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[Via http://goodflagbetsy.wordpress.com]

Going Broke For Your Family-Fantasia,Keyshia Cole, and Me?!?

2010-01-15T02:25:00.000+02:00

I’m a huge Fantasia fan, and like a good fan, I had to watch her new reality show on VH1. As I was reading over the episode description I immediately got excited.

The first episode is entitled “No More Freebies”. I assumed that the premise of this episode was going to be examining the money exchanges between fantasia and her family since she has become a celebrity. And generally that’s what it was about. But I had higher expectations in that I thought that the show was going to adequately and intelligently discuss a common, but also overlooked issued affecting many poor and impoverished African-Americans; the desire/impulse to provide for one’s family to the detriment of one’s own life.

Growing up in poverty has fundamentally left it’s mark on how I view money, family ties, and family financial exchanges. My family has always given in a cyclical fashion: when one person has it they pass it on to the next. To add to that, the person with more money was also expected to give more because they had more to give. This cyclical dissemination of funds reinforced our family ties, and in my head, made us closer because we realized that we couldn’t make it on our own. But at which point does it become a burden? At what point do you say i’m not going to give you xyz anymore in order to preserve myself?!?!?

I must admit that i’ve been going through it lately because of this. I feel such a way about my mom and her current financial situation that it makes me emotional. I don’t want my mother to go without, but damn sometimes she makes stupid financial choices and i’m left to help fix. I feel indebted to her because 1. she is my mom, and 2. she raised me and my sister solo on an income of 25k or less for so many years. Kudos to her and i’m very grateful that she made it stretch.

I think what the Fantasia show tried to capture was that deep connection that poor african-americans have in regards to finances and family. Not to say that all people are about family, but when you have sensitive and grateful people like myself who recognize that I never would have made it without my mom, than you also see this deep, sometimes dysfunctional, financial relationship that can develop…which I think is a direct result of poverty. Because i’ve been expected to provide financially ever since I was young, the normative script of parent taking care of child is absent and something else manifests. The principle at the end of the day is great…take care of the family, but because of poverty and structural violence i.e. poor school systems, the pressure may force people into unhealthy behavioral patterns i.e. either giving all they’ve got or hustling to provide for the family. Neither of those are conducive; the “i’m gonna do anything for my family script” needs to be addressed, redressed, and put back into a healthy context or else we will continue to see things like Keyshia Cole saying…”I had to leave my family alone.”

Well after watching the show, I realized that I clearly over analyzed the title of the first episode and what I thought vh1 was going caused I thought the first episode suck major balls and was more reality tv tomfoolery.

Peace.

p.s. have people recognize this to be true?

Drop Knowledge, Spread Love, & Do You!

[Via http://ayotunde4real.wordpress.com]

United Airlines Raises Its Checked-bag Fees

2010-01-13T18:45:00.000+02:00

NEW YORK — United Airlines on Wednesday said it will raise its check-on baggage fees to match those at US Airways , Delta Air Lines and Continental Airlines . A unit of UAL Corp. , United will raised the fee for the first check-on bag to $25 from $20, and $35 from $30 for the second bag. The new fee applies to tickets purchased on or after Thursday for travel on or after Jan. 21. Delta and Continental raised their fees last week, matching US Airways. American Airlines has yet to raise its checked-on luggage fees.

United Airlines Raises Its Checked-bag Fees

[Via http://emmanews.wordpress.com]

Schafersman's testimony on social studies standards, to Texas SBOE

2010-01-13T10:51:00.000+02:00

Dr. Steve Schafersman will testify on proposed new standards for social studies in Texas public schools, at a hearing before the Texas State Board of Education (SBOE) scheduled for today, January 13, 2009.

Schafersman is president of Texas Citizens for Science and its driving force. He’ll also live blog much of the hearing at his blog, Evo-Sphere. You should probably watch TFN Insider, the blog of the Texas Freedom Network, too.

Schafersman’s testimony was released in advance, and reprinted below.

Public Testimony of

Steven D. Schafersman

Texas State Board of Education Public Hearing

Austin, Texas; Wednesday, 2009 January 13

I am grateful for the opportunity to address you about Social Studies standards for which I am testifying as a private citizen. Tomorrow you will begin your work to adopt the new Social Studies TEKS. I closely read and evaluated the proposed Grade 8 Social Studies, High School U. S. History, U. S. Government, World History, and World Geography standards and found them to be quite satisfactory. The standards were extremely comprehensive, balanced, fair-minded, and honest. The members of the panels who wrote them did an outstanding job and I was very impressed by their knowledge and professionalism. I urge that you adopt these Social Studies standards without change.

My experience with this Board leads me to suspect that some of you don’t want to adopt these excellent standards–written by social studies curriculum experts and teachers–without change. After all, these standards were written by experts and some of you feel obliged to stand up to the experts. Some of you may want to change some of the standards to correspond to your own political and religious beliefs, such as the mistaken notions that the United States is a Christian nation, that we do not have a secular government, or that separation of church and state is a myth. Some of you may want to add more unnecessary information about Christian documents or Christian history in America. If some of you do wish to make such changes, I request that you restrain yourselves. Please resist the temptation to engage in the same behavior some of you exhibited last year when you perverted the Science standards and embarrassed the citizens of Texas by engaging in pseudoscientific anti-intellectual behavior. While the Texas State Board of Education has a long and proud history of anti-intellectualism, the economic conditions today demand that we stop that practice and return to professionalism and respect for academic achievement so that our children have a future in which they will use their minds to make a living in intellectual pursuits and not their limbs in a service economy.

During the adoption of the science standards, some Board members amended the Biology and Earth and Space Science standards by engaging in fast talking, omitting pertinent information about what was being changed, offering bogus “compromises” that were not really fair compromises, and referring to “experts” who were in fact pseudoscientists and not real experts at all. I hope to not witness the same behavior tomorrow but I am pessimistic. Two pseudo-historians, David Barton and Peter Marshall, were appointed as “experts” and there is plenty of evidence available that demonstrates that these two gentlemen are preachers and polemicists for their radical agendas, not legitimate history experts.

I urge the rational and conservative Board members–whom I hope still make up a majority of this Board–to resist proposed radical amendments that attempt to insert bogus histories of American exceptionalism, America’s presumed Christian heritage as the source of our liberties and Constitutional principles, and other historical myths perpetrated by the American Religious Right. I urge you to vote No to such radical amendments, not Abstain or your radical opponents will gain the same advantage that they enjoyed during the amendment process for the Science standards, where they were delighted when some of you abstained or did not vote since that made it easier for them to obtain majorities which allowed them to win several amendments that made changes detrimental to science education. Unlike last year, when you were prevented from consulting your legitimate Science experts during debate, please consult your genuine Social Studies experts, Texas Professors Kracht, Hodges, and de la Teja. Please try to avoid the same mistakes with the Social Studies adoption process that occurred with the Science standards adoption, so no one will be able to accuse you of being anti-intellectual.

[Via http://timpanogos.wordpress.com]

too many lawyers?

2010-01-13T02:48:00.000+02:00

Matt Yglesias says that there are too few jobs for lawyers.

The problem is that he ignores the very likely possibility that lawyers are able to induce demand for their services. Of course, there are not unlimited legal positions available, but more lawyers often means more legal work and not less. This is because when times get tough, lawyers can cook up more business by trying to convince clients to sue. In other words, the legal profession can absorb a surprising amount of new entrants.

So, Matt says that more lawyers means less costs for consumers, but this is either not completely true or completely false. More lawyers might mean more money spent on legal battles, depending on the amount of demand inducement (and if lawyers live up to their reputations, there might be a massive amount). But further, if the price of a lawyer goes down, then the price of lawyers goes down for everyone. This means that if I can defend myself with less money, you can also sue me for a lower cost. The prohibitive cost of lawyers is one things that induces two parties to settle, greatly reducing administrative costs, rather than create an expensive legal battle. Thus, higher prices for lawyers might be better for “consumers” or at least society in general.

[Via http://questionbeggar.wordpress.com]

2010 -- Last Exit Before the Obamaland Socialist Utopia

2010-01-11T18:53:00.000+02:00

My fellow Boomers will remember the family road trips we took as kids. Those of us who grew up in urban areas and the suburbs remember marveling at how spread-out things were, Out There.

Before the Griswolds were even an idea, billboards on deserted stretches of pre-Interstate US highways warned, “Last Gas Next 150 Miles,” or words to that effect. Dad glanced at the gas gauge, and Mom took an informal poll of passengers as to how far we could tolerate going before our next bathroom break.

These days, we wonder if we will survive the grand social experiment that is the Obama era. Is there an exit from this nightmare before our freedom is gone? Are we stuck in the fast lane to a haven for foreigners who hate us and our way of life? Will our country grovel before the oil-producing dictatorships around the world, while we freeze in our homes, and other countries develop our domestic energy and sell it to us?

What will those of us collecting or about to collect Social Security do, when the money runs out? If our medical problems rise above a certain level of expense, will we be invited to visit the local suicide clinic? Will the Department of the Interior decide our retirement homes are a danger to the habitat of the Rocky Mountain Spotted Tick, and put us in the street, or will the local government decide, as in Kelo v. New London, that our homes need to be bulldozed so a pharmaceutical plant can be built there?

It may be too late already, if the aging radicals who currently run things have their way. Every illegal alien, convict, corpse and cartoon character in the world will get the right to vote in the 2010 election, if these aging hippies and Mao-worshipers get their wish. All of those new voters will automatically vote absentee as Democrats, since the Democrats will promise to give them the income, homes and cars of all those people who earned them.

Out of completely unfounded optimism, I will assume for a moment that this last step in the takeover will run into problems. Fictional characters, and residents of Cuba, Venezuela, the Gaza Strip and Iran will not get to vote in this year’s American elections. Real people who can read and write English, understand the Constitution and do not agree that it is obsolete and irrelevant, will get to vote.

I know, it’s crazy talk, but let’s brainstorm. This applies to the Eighth Congressional District of Tennessee, (where I happen to live, but there is a similar situation near you. Find it, and deal with it).

My district has been “represented” in the US House by a self-described Blue Dog Democrat (in fact, he is credited with helping to found the Blue Dogs), John Tanner. I wrote on Center of Mass about a “Telephone Town Meeting” Tanner had last August, which I sort-of attended, if you could call sitting at home, listening to the meeting go by, attending.

I waited through the meeting to hear Tanner address my questions, which had been submitted at the beginning of the meeting, but, of course, they weren’t answered. As he invited us to, I wrote up my questions, and emailed them to his office. I got not even an acknowledgment of receipt, and certainly no answers.

Tanner claimed to be a conservative, but it’s hard to tell from here how often he voted for the Constitutional way, and how often he caved to Comrade Pelosi when the blinds were drawn and roll call votes were not required.

Did he, like a couple of nominal Republicans in the senate, vote for the procedural steps that allowed leftist bills to advance, and then vote against them when Pelosi had secured enough votes from other Dems to be sure of passage? That way, he could come home to our district and claim, honestly, that he had “opposed” this or that anti-Constitutional power grab, or this or that confiscatory tax or regulation.

Nice arrangement, if that’s what he did. However, and this may be “damning with faint praise,” Tanner is seen by the political establishment as one of the most conservative Democrats in the House. Regardless, it’s all irrelevant.

It’s irrelevant because Tanner announced on December 1st that he has decided not to run again.

The vacuum is being filled, of course. Two Republican candidates for the primary have surfaced, with an interesting move being made by one of them. Stephen Fincher, a farmer and gospel singer from (no kidding) Frog Jump, which is a not-necessarily-officially-incorporated community in Crockett County.

Copied directly from his “On the Issues” page is this list of bullet pointed, somewhat vague list of Fincher’s positions:

STEPHEN FINCHER ON THE ISSUES

Stephen stands strong with Tennesseans on the issues:

Stop runaway spending in Washington that is bankrupting America’s children and grandchildren

Never vote to raise taxes, and I will fight to end forever the death tax and marriage penalty

Stop any health care plan that fails to protect America’s seniors, families and our right to make our own medical decisions

Protect Medicare and Social Security, and all the promises we’ve made to our seniors

Recruit jobs and businesses that will thrive in rural and small town Tennessee

Develop a comprehensive energy policy to reduce our dependence on foreign oil and grow markets for our farmers

Honor our veterans and keep the promises we’ve made to those who serve our country

Defend traditional marriage, the Right-to-Life and the Second Amendment

Keep America strong, safe, free and secure

I sent an email to Mr. Fincher’s contact address on January 8th, asking for some details to flesh out the bullet points, and to see if he identifies with any of my bullet points:

I was glad to see that a Tennessee businessman with real, private sector experience is thinking of running for the seat to be left vacant by John Tanner’s resignation.

However, after visiting the “Issues” page, I still don’t know where Mr. Fincher stands on some issues of importance to me.

Some examples:

Constitutionality tests for new legislation: Will Mr. Fincher commit to vote against legislation that violates the United States Constitution?

Regulation without Representation: Will Mr. Fincher commit to supporting and voting for legislation that removes funding for federal agencies, such as (but certainly not limited to) the EPA, the BATFE or the FCC, when their regulations violate the Constitution?

Term Limits: Will Mr. Fincher commit to serving no more than two terms in the House of Representatives in a row, and will he support and vote for legislation that sets term limits?

Taxes: Will Mr. Fincher commit to supporting and voting for legislation that abolishes the IRS and the progressive income tax, and to the adoption of the Fair Tax?

That is just a start, but it is a good one. Please let me know where I can find more information about Mr. Fincher’s position on these issues.

Thanks,

Thomas D. Cox

[etc.]

Will somebody from the Fincher campaign reply, with enough specificity to convince me that Fincher is not just another plug-in Republican, but also a committed follower of the Constitution?

I’m standing by.

I’d also love to know what Mr. Fincher to say about a speech given by the namesake of his home county, Colonel David Crockett, regarding the confiscation of one man’s wealth by government, to be given as “charity” to another?

Here is a small excerpt, but the entire speech is required reading for anyone who wants to see the most common-sense argument ever made against the “redistribution of wealth”:

I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money.

What does Mr. Fincher think about the simple but profound truth expressed in Colonel Crockett’s speech?

Stephen Fincher is not the only Tennessean to step up and state he wants this Congressional seat.

Donn Janes, another West Tennessean, navy veteran and networking engineer, has also stepped forward. Janes declared his intentions in June.

The big news about Donn Janes is that he just announced that he was separating himself from the national Republican apparatus and running as a Tea Party candidate. The text of his press release, which I received as an email, is reproduced below in its entirety:

FOR IMMEDIATE RELEASE: January 11, 2009Contact 901-482-6705Donn Janes announces he will run as a Tea Party Candidate; pulls out of Republican Party primary.

BRIGHTON, TN – This past Saturday, Donn Janes, a candidate for the U.S. House of Representatives in Tennessee’s 8th District spoke in Paris, TN, to an estimated 300 Tea Party activists from the West Tennessee area. There he announced, “As of today, I am no longer going to run for the U.S. House of Representatives as a Republican. …we need to change the way we elect our representatives. We continue to rely on the two-party system to provide us with different choices; but thanks to this corrupt system, there is little difference between the two of them. Both parties voted to increase the size of our government; both parties voted to trade your freedoms for security; and both parties are responsible for our monstrous debt, our failing economy and the exporting of our jobs overseas. I will be running as an independent Tea Party Candidate, a candidate who doesn’t answer to or work for party leadership, but a candidate who will work for the people of West Tennessee.”

When asked about what led to this decision, Mr. Janes stated that the National Republican Party continues to aggressively support candidates who lack depth on issues and conservative values, but instead focus on candidates who are able to self fund or raise large sums of money.

During the extended question and answer portion following his speech, Mr. Janes was asked if he thought his running as an independent would split the vote. “I intend to. I will be asking for votes from both Democrats and Republicans, many who are fed up with their party’s refusal to adhere to their respective party platforms. Over the course of my traveling within the 8th District, I believe there are enough conservative Democrats and right-minded Republicans who will enable me to win.”

Janes was asked about the Proposed “Contract From America”. He replied, “We’ve had a ‘Contract From America’ for over 200 years. It’s called the Constitution of the United States. That’s the only contract we need.”

Donn first attended a TEA Party event in Memphis, TN, on April 15, 2009. He later challenged the views of ACORN founder, Wade Rafke, at a University of Memphis Lecture. Janes participated in a “Pink Slip” TEA Party event in Nashville on November 7, 2009, to protest the currently proposed health care legislation. Last month he attended the FCC meeting in Memphis to challenge the expansion of its responsibilities.

Donn Janes is a candidate for the United States House of Representatives for Tennessee’s 8th Congressional District. A Navy veteran and businessman, Janes is an outspoken critic of how both Republicans and Democrats have continued to ignore any calls for fiscal responsibility, causing the United States to plunge deeper into debt.

[end of release]

I just revisited Donn Janes’s Issues page, and there is a lot more meat there than one finds so far on Fincher’s site. From browsing the whole site, I get the impression that Janes is positioning himself as more of a Constitutionalist than the average Republican, and certainly much moreso than the average Democrat, Blue Dogs included.

I haven’t spoken or corresponded with either candidate, but as of now, having seen all I could find on the positions of both on Constitutional issues, I am inclined to vote for Janes in the primary and general elections.

The Republican establishment needs to understand that we will no longer settle for Republican candidates and officeholders who are indistinguishable from Democrats when it comes to their actions, as well as their public stances.

###

About Donn Janes:

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[Via http://tomcox.wordpress.com]

Could The Answer Be Term Limits?

2010-01-11T10:23:00.000+02:00

We have all heard of the dissatisfaction of the people with the representatives in Washington….polls show that it is an accurate assumption and yet the people do not seem to be willing to do anything about it……they bitch about the influence money has and that is the biggest bitch of all……

But what causes the influence of money? Some say the longevity of the representatives is the cause……incumbents are re-elected about 90% of the time……and to be re-elected it takes money and then that brings us back to the influence of money…..corporations and industries and sectors donate millions if not billions to candidates that can be useful in the corporations business dealings…….

There has been a move to term limits for the representatives…..that is to set a limit on the number of years that they could be in the US Congress as a representative of the people…..but what of term limits?

According to open congress:

Many argue that career politicians have negative implications for democracy. Some cite the fact that since the end of World War II, incumbents have been reelected a very high percentage of the time. In the House, for instance, the re-election rate for incumbents was 93 percent from 1952-2000.[1] It was only marginally lower in the Senate, as it averaged 74 percent from 1946-64, 76% between 1966-1984 and 87.4% from 1986-1998.[1] The cause for this, according to some, is that while incumbents must always be reelected, they enjoy certain advantages over challengers. For example, they typically have greater name recognition and better opportunities to raise large amounts of campaign money.[1] These advantages, some argue, deter potential candidates from challenging incumbents, leading to elections that do not truly feature high quality choices for the electorate. Term limits, therefore, help ensure that citizens will frequently have new choices when selecting their leaders.[1]

This idea became popular in the 1990’s, but lost some of its luster, but now is the time for a resurrection of the idea….Congress is at an all time low approval rating…..back in 1994/95 there was a growing move toward term limits…..but there is a catch to term limits……

On May 22, 1995, the Supreme Court ruled 5-4 in U.S. Term Limits v. Thorton that states could not adopt term limits for federal legislators (22 states had done so by this point). Doing so would require a Constitutional Amendment.[1] Given that the amendment had already failed by a wide margin, and that the newly-elected Congress had several other initiatives for which it intended to pursue, the idea of term-limits soon faded.

There is the catch……thanx to Federalism term limits cannot be handled on the state level it can only be through a constitutional amendment and there is the rub……which of the representatives that is benefiting through the lack of term limits will step up and offer it up as an amendment?

We can bitch as much as we want…but as it stands now….we can do NOTHING but bitch….we are stuck with this system of allowing cash to run the country while the people stand by as the spectator…..

There are organizations out there that are facing this issue…the problem is they are on the fringe and few people really care at this point….this is a problem that can be solved……but it takes a village to want to change things…..and unfortunately, Americans are NOT there yet….for it will take participation and the people are happy to vote once and then be a spectator……

[Via http://revolutionaryindependent.wordpress.com]

does the economics of religion just miss the point?

2010-01-11T02:43:00.000+02:00

I’ve often heard scholars assert that culture and social structure are really secondary to economics (e.g., see Fukuyama’s discusison of culture in his Trust book). When I hear such arguments, I think: “what about religion?” Religion is present in almost every society. It is a set of ideas that people are willing to do die for. And religious affiliations affect who we marry, how we work, how we vote, and how we live. Yet, it’s hard to chalk religion up to purely instrumental motives. It appears to be a purely cultural, and hugely important, aspect of human culture.

Of course, it doesn’t mean that people haven’t tried. There is the theory of religion as a club good, pushed by Innaconne and others, which asserts that religious behavior (e.g., church affiliation and attendance) is driven by the desire to belong to exclusive groups. In an nutshell, it’s a rehash of Weber’s theory of status groups. Read Innaconne’s summary JEL article here, which explains his approach and many other topics in the economics of religion. It would be crazy to dispute the key insight of the club good theory. Lots of people do join churches because of the social benefits and many denominations are set up to provide social and tangible goods to members. Coleman’s famous article on social capital relied on that crucial observation.

At the same time, the club good theory misses the most important thing about religion: it’s religious!! There is nothing in the theory that explains why groups based on spiritual beliefs should be more common, more successful, or more durable than non-religious groups. If religion is primarily a club good, why not just make a big fraternity and dicth God? And of course, secular fraternities to do exist but they don’t seem to be a serious competitor to religion. In fact, some groups, such as Middle Eastern populations, have chosen to become *more* religious in the face of secular Western social organization. God is not impressed with club goods. At this point, I think it would be sensible to appeal to social or psychological explanations of religion. Then one might use the club good theory to explain how social or pyschologically created demand leads to “market structure” (attendence, # of churches, etc). Very econ soc, not very neo-classical.

[Via http://orgtheory.wordpress.com]

Ghetto Finance Fri 1/08/10: Good gig if you can get it

2010-01-08T18:48:00.000+02:00

http://www.huffingtonpost.com/2010/01/08/goldman-sachs-shareholder_n_415986.html

Goldman’s 2008 financial performance (via Andrew Cuomo’s report):

Goldman earned $2.3 billion, paid out $4.8 billion in bonuses and received $10 billion in TARP funding.

Me: Looks like the pissed off lawsuits are coming, and I can’t say I sympathize with Goldman. That’s not pay for performance, that’s pay as a psychological addiction.

[Via http://thecrosspollinator.wordpress.com]

Icelandic dilemma

2010-01-08T10:46:00.000+02:00

Iceland is being asked to repay a loan to the UK and the Netherlands. This loan covers payments that those two large countries made to depositors in Icelandic banks that would otherwise not have got their money back – at least, in the short term.

First, the figures

Iceland has a labour force of 181,500, and a GDP of $12bn. So the debt of E3.9bn is about 50% of GDP. Am I right? So why does this article in the FT describe it as 250% of GDP? Also, as Paul Myners writes in today, ‘in the period up to 2016 a substantial proportion of the loan is expected to be recovered through the disposal of the assets of the failed bank Landsbanki’. In which case, what is the estimated NET payment that Iceland is expected to bear? Someone help me out.

Another issue: I understand that depositors were repaid IN FULL. This is extraordinarily generous treatment given their foolishness. How much would Iceland have been strictly liable for if it had only honoured commitments up to a limit? Tim Worstall asks this question. I am not sure what the actual answer is. But I do believe that larger depositors, getting years of generous interest rates, deserved some of the hit.

As do the UK and Dutch governments whose regulators bear some of the responsibility for allowing banks with liabilities of 11 times their country’s GDP to operate here. The terms on the loan seem relatively sensitive: repayments capped at 4% of GDP, and starting in 6 years’ time. And the costs of not repaying ought to be fairly clear: becoming an international Pariah, as Lex argues.

Should simple fishermen, aluminium smelter workers and other Icelanders pay for this? Well, for years they presumeably had the sort of high living standards that Daniel Hannan so embarrassingly extolled (well done LeftFootForward on this). They may not have realised it, but some of their prosperity was based on the success of the banks. But, yes, it is unfair to the individuals personally, and as the FT article above points out, repaying a foreign loan requires a steady export surplus, which is limited by the available haddock, in Iceland’s case.

The whole question of sovereign debt repayment throws up enough issues of democratic autonomy, justice, and coldblooded cost-benefit thinking that a simple answer is difficult to give. Countries are not companies. People can move (and many would happily take educated Icelanders). On the other hand ThoughCowardsFlinch seemed outraged that the cost of our future debt may determine the next election, but why should the rights of lenders count for nothing? Anyone who has read about the post WWI reparations fiasco (see Lords of Finance) understands the lunacy of demanding that a population pays what it can’t pay: hence the FT’s analogy with a debtor’s prison.

Robert Peston points out that most Icelanders were not consulted about the risks they were insuring. Advocacy international deplores what they see as big country bullying.

On the other side, with Paul Myners, Jeremy Warner thinks a refusal would be disgraceful.

The comments under Martin Wolf’s provocative piece seem evenly split. The first is excellent: the problem with being a pariah is sticking out. Wait for Greece, Spain, Italy – then Iceland will look small bee.

So I have no verdict except: the debt is probably smaller than we think, and larger than it should be if more of the other foolish parties, in particular the savers getting great rates for years, took their just portion of the pain.

[Via http://freethinkingeconomist.com]

Specters of Marx

2010-01-08T02:39:00.000+02:00

Apparently [ht: ke, since I am no longer a member], the latest calendar published by the American Economic Association, in celebration of its 125th anniversary, features 18 deceased economists (for 2010 plus the first six months of 2011): Edgeworth, Veblen, Marshall, von Neumann, (Richard) Ely, Smith, Fisher, Schumpeter, von Hayek, Ricardo, Walras, Malthus, Mill, Stigler, Marx, Keynes, (Joan) Robinson, and Friedman.

The May 2010 entry for Marx is followed by 4 quotations from his work, including the following:

This is the abolition of the capitalist mode of production within capitalist production itself, a self-destructive contradiction, which represents on its face a mere phase of transition to a new form of production. It manifests its contradictory nature by its effects. It establishes a monopoly in certain spheres and thereby challenges the interference of the state. It reproduces a new aristocracy of finance, a new sort of parasites in the shape of promoters, speculators and merely nominal directors; a whole system of swindling and cheating by means of corporation juggling, stock jobbing, and stock speculation. It is private production without the control of private property. (Capital, volume 3)

[Via http://anticap.wordpress.com]

Economists, Asteroids and Dinosaurs

2010-01-06T18:43:00.000+02:00

Per se: adv. By or in itself, themselves, or (now rarely) himself or herself; without reference to anything (or anyone) else; intrinsically.

Oxford English Dictionary

The gathering of the members of the American Economic Association (AEA) at the academically most interesting time in their profession, even though saying so could be both heartless and ironical because it would be similar to watching the earth blow up from a distant planet in a solar super nova to analyze its physics, appears to have motivated the profession to reflect more openly for the first time in recent memory on the validity of the application of their dismal ideas. On the one hand, they seem to be lamenting the asteroids they are hurling at the economy to resolve its problems, and on the other hand, they are anxious about saving the dinosaurs from extinction. The opportunity cost could be extinction: the murder of Abel the homo sapien by Cain, the homo economicus.

The trouble the AEA is in is one every engineer is taught as a matter of basic training, especially those who have studied thermodynamics: boundary conditions. What may be valid within a pre-defined set of system constraints may not perform as expected once the boundary conditions change. What may be valid per se, may not be valid in its larger context. This is also the problem with monetary policy or any policy for that matter.

The star attraction of the red carpet club in Atlanta, Georgia was their executor-in-chief, Ben Bernanke, who, as any economist-turned Fed Chairman or Secretary of the Treasury is, also the object of subliminal envy: in a crisis, economists would both want and not want his job, at the same time, similar to quantum quirkiness. It is the landscape of monetary policy as Alan Greenspan, his predecessor had pointed out also to a gathering of economists at another esteemed conference: at Jackson Hole, Wyoming, the annual ritual conclave of conservative central bankers.

This landscape, however, is not one of uncertainty, which has a specific meaning in economics. It is not always random walk. It is often the very measurable and quantifiable risk whose oversight or supervision by government (the Fed and its legislative overseers and the White House) and self-regulation by the risk takers ― the markets ― matters, as Bernanke had concluded in his paper to the AEA. It defines the impact of the monopoly interest rate setting capacity of the Fed both per se and in the larger context of the economy and the financial markets. Bernanke (as was Alan Greenspan) is both wrong and (would have been) right, at the same time, that interest rates don’t matter per se, and do matter (which he had not said) for bubbles, housing or otherwise. Bernanke’s troubles though lay in the fact that they do.

The Federal Open Market Committee (FOMC) sets interest rates based on mostly real variables, taking into consideration the impact of the financial markets on the real variables within the Fed’s forecast horizon of 3 years. The macroeconomic trade-off is indeed, as Bernanke had pointed out, between output and inflation as encapsulated by the Taylor Rule.

Per se the federal funds rate and money supply, are indeed weak and blunt instruments to determine the paths that money would take once its leaves the doors of the central bank without monetary policy also engaging in industrial policy as the Fed Chairman himself had pointed out once before in the context of his stated reluctance to doing so. In the larger context, however, especially in a crisis of both the economy and employment, saving the financial industry in downtown Manhattan is also a form of industrial policy. The same extraordinary circumstances that made him bend the Federal Reserve Act (FRA) to save the financiers on Wall Street also permit him under the same law to save the other industries in the economy to which the financiers are supposed to provide that money for the purpose of economic recovery. In fact, this was the intent of the amendments to the FRA after 1929.

The trouble with the AEA since the new Keynesian government-markets synthesis, Bernanke being no different from his ilk (confession: the author of this article, me, also being a dues paying member of the AEA) is that the repair of the financial markets is seen as being sufficient from the perch of Keynesian macroeconomic fundamentalism that has pervaded the profession since the publication of Keynes’ General Theory. Anything else is seen as firm-level microeconomic interference, even if it means following the money down to the balance sheets of the individual banks receiving it from the Fed, even though doing so is the Fed’s legal responsibility and even if the Fed is to be forgiven for that part of the financial markets over which both the Fed and the rest of the government have no purview at the present time.

This is exactly where the Fed stands today: to clean up the financial markets bank by bank, as is in fact permissible current law, or to let the money it is providing percolate on its own time for the financial markets to allocate it as they see fit, no matter how inefficient or time consuming that process may be, focused once again on the macroeconomics of the Taylor Rule. Moreover, what stands in the way of making more rational decisions is the intellectual investment of the economists themselves: the very tomes they have written that have propelled them to prominence in their profession may have to be overwritten by their own actions when applying economic science in practice. Akin to asking politicians to reform campaign finance laws. Incurring such an opportunity cost could mean continued survival.

Supervision and oversight do not necessarily also have to mean telling banks what to do with the money they receive. Sometimes, the government paying close attention is sufficient to induce responsible behaviors when complemented by other macroeconomic policies such as fiscal policy and trade policy.

It is high time both politicians and economists said that they are wrong to do the right thing, because the general welfare of the United States trumps personal achievements. And that is a very explicitly Keynesian idea and an implicitly classical idea. Doing so could in fact be a bigger personal achievement for policymakers. Fixing the markets will indeed fix the economy, provided the financial markets are fixed instead of expecting them to fix themselves by throwing money (or more technically, money supply and interest rates) at the problem.

[Via http://ctamirisa.wordpress.com]