economics blog

Pro-single-payer doctors: Health bill leaves 23 million uninsured

2010-03-23T05:55:00.000+02:00

A false promise of reform

For Immediate Release

March 22, 2010 PNHP

Contact:

Oliver Fein, M.D.

Steffie Woolhandler, M.D., M.P.H.

David Himmelstein, M.D.

Margaret Flowers, M.D.

Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

The following statement was released today by leaders of Physicians for a National Health Program, www.pnhp.org. Their signatures appear below.

As much as we would like to join the celebration of the House’s passage of the health bill last night, in good conscience we cannot. We take no comfort in seeing aspirin dispensed for the treatment of cancer.

Instead of eliminating the root of the problem – the profit-driven, private health insurance industry – this costly new legislation will enrich and further entrench these firms. The bill would require millions of Americans to buy private insurers’ defective products, and turn over to them vast amounts of public money.

The hype surrounding the new health bill is belied by the facts:

About 23 million people will remain uninsured nine years out. That figure translates into an estimated 23,000 unnecessary deaths annually and an incalculable toll of suffering.
Millions of middle-income people will be pressured to buy commercial health insurance policies costing up to 9.5 percent of their income but covering an average of only 70 percent of their medical expenses, potentially leaving them vulnerable to financial ruin if they become seriously ill. Many will find such policies too expensive to afford or, if they do buy them, too expensive to use because of the high co-pays and deductibles.
Insurance firms will be handed at least $447 billion in taxpayer money to subsidize the purchase of their shoddy products. This money will enhance their financial and political power, and with it their ability to block future reform.
The bill will drain about $40 billion from Medicare payments to safety-net hospitals, threatening the care of the tens of millions who will remain uninsured.
People with employer-based coverage will be locked into their plan’s limited network of providers, face ever-rising costs and erosion of their health benefits. Many, even most, will eventually face steep taxes on their benefits as the cost of insurance grows.
Health care costs will continue to skyrocket, as the experience with the Massachusetts plan (after which this bill is patterned) amply demonstrates.
The much-vaunted insurance regulations – e.g. ending denials on the basis of pre-existing conditions – are riddled with loopholes, thanks to the central role that insurers played in crafting the legislation. Older people can be charged up to three times more than their younger counterparts, and large companies with a predominantly female workforce can be charged higher gender-based rates at least until 2017.
Women’s reproductive rights will be further eroded, thanks to the burdensome segregation of insurance funds for abortion and for all other medical services.

It didn’t have to be like this. Whatever salutary measures are contained in this bill, e.g. additional funding for community health centers, could have been enacted on a stand-alone basis.

Similarly, the expansion of Medicaid – a woefully underfunded program that provides substandard care for the poor – could have been done separately, along with an increase in federal appropriations to upgrade its quality.

But instead the Congress and the Obama administration have saddled Americans with an expensive package of onerous individual mandates, new taxes on workers’ health plans, countless sweetheart deals with the insurers and Big Pharma, and a perpetuation of the fragmented, dysfunctional, and unsustainable system that is taking such a heavy toll on our health and economy today.

This bill’s passage reflects political considerations, not sound health policy. As physicians, we cannot accept this inversion of priorities. We seek evidence-based remedies that will truly help our patients, not placebos.

A genuine remedy is in plain sight. Sooner rather than later, our nation will have to adopt a single-payer national health insurance program, an improved Medicare for all. Only a single-payer plan can assure truly universal, comprehensive and affordable care to all.

By replacing the private insurers with a streamlined system of public financing, our nation could save $400 billion annually in unnecessary, wasteful administrative costs. That’s enough to cover all the uninsured and to upgrade everyone else’s coverage without having to increase overall U.S. health spending by one penny.

Moreover, only a single-payer system offers effective tools for cost control like bulk purchasing, negotiated fees, global hospital budgeting and capital planning.

Polls show nearly two-thirds of the public supports such an approach, and a recent survey shows 59 percent of U.S. physicians support government action to establish national health insurance. All that is required to achieve it is the political will.

The major provisions of the present bill do not go into effect until 2014. Although we will be counseled to “wait and see” how this reform plays out, we cannot wait, nor can our patients. The stakes are too high.

We pledge to continue our work for the only equitable, financially responsible and humane remedy for our health care mess: single-payer national health insurance, an expanded and improved Medicare for All.

Oliver Fein, M.D.

President

Garrett Adams, M.D.

President-elect

Claudia Fegan, M.D.

Past President

Margaret Flowers, M.D.

Congressional Fellow

David Himmelstein, M.D.

Co-founder

Steffie Woolhandler, M.D.

Co-founder

Quentin Young, M.D.

National Coordinator

Don McCanne, M.D.

Senior Health Policy Fellow

******

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who support single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

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

Rounding up the 216 votes on Fed-Med: It’s not ABOUT abortion, it IS an abortion

2010-03-21T21:39:00.000+02:00

Earlier today, House Democrat leaders predicted passage of the massive government takeover of the American health-care system, as they worked feverishly to nail down the 216 votes needed to approve the measure this evening. This afternoon they picked up the support of one lawmaker concerned about the abortion issue and another who had voted against last November’s health care measure, while losing the vote of Democrat Rep. Zack Space, a second-term lawmaker from a swing district in eastern Ohio, said he would vote “no” Sunday, a switch from his vote for health care in November.

The pro-life faction of Democrats led by Rep. Bart Stupak (D-MI) has been in talks with the White House, with reports a deal had been reached on language that they had previously said amounted to taxpayer funding of abortion.

Imagine the naiveté exhibited by these elected officials who would take the desperate and lifelong abortion supporter Obama at his word that federal money would not be used to fund abortions?

The Washington Post displays a chart showing how members voted on health-care legislation Nov. 7, where they stand now and who is still undecided. Previously 39 Democrats broke with their party.

If this monstrosity passes, every American would be required to obtain coverage or face a penalty of at least $695 a year. Employers would be under a government mandate to offer coverage or face penalties of $2,000 per worker. The fraud being perpetrated is that this mega-plan would reduce costs, something that is beyond rational thinking. It will limit care by rationing, of that you can be sure.

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

Reconsidering "Choice"

2010-03-21T13:45:00.000+02:00

I just read an interesting review of a new behavioral psychology book, “Addiction: A Disorder of Choice,” by Gene Heyman. As the review states, the key theme of the book is “that the idea [of] addiction [as] a disease has been based on a limited view of voluntary behavior.” As a remedy to this limited view, the author draws out the distinction between addiction and diseases such as Alzheimer’s or multiple sclerosis, the course of which cannot be altered by voluntary behavior. In contrast, he argues that the success of treatment programs which provide reinforcement for sobriety demonstrates that a key element of addiction is choice- if it were not, incentives just wouldn’t work. Of course, this suggests that the move toward viewing addiction as a disease rather than a choice is problematic in light of what we normally mean by “disease.” But, what’s far more interesting to me is the implication that the “disease of choice” thesis has for our concept of ”choice.” This is the issue I will explore further.

The person snorting her first line of coke or dabbing a little bit of heroin does not want to become a hopeless crackwhore or junkie anymore than the person diagnosed with Alzheimer’s wants to lose her memory. In this way addiction resembles a disease more than a choice. Most rational people don’t want to destroy themselves, and most addicts start out as rational people who want to feel better. Addiction is the sum of incremental choices made on an ever-sliding scale of rewards and negative consequences. It feels good and doesn’t seem that bad the first time, it might seem worse the next time, but it feels even better, and so on and so forth until it is a serious, life-swallowing problem that you just can’t resist. Except of course, you can resist it, and if and when you do resist it, the negative symptoms of addiction get better. The same can’t be said of Alzheimer’s.

The possibility of resisting addictive behaviors is what makes addiction a “choice,” but no addict manages to resist indulging unless he has stronger incentives to refrain than to continue. Of course, as anyone who has studied the philosophy of David Hume can tell you, this isn’t just the way choice works with addicts. A choice is always determined by competing desires. This is as true of the martyr debating whether a vow of silence is more important than a cry for help as it is for a junkie debating between one more hit and passing his court-appointed drug test. We are all slaves to our desires, some of us just have crueler masters.

The fact that actions are determined by desires, and desires themselves are, on some basic level, unchosen, raises a serious question about ultimate moral responsibility. I’m not going to offer an opinion on that question, but I mention it because this is clearly the issue that motivates the move toward viewing addiction as a disease rather than a choice. If addiction is a choice and addicts do terrible things, then they are morally responsible for those terrible things. If addiction is a disease, then addicts shouldn’t be blamed for the “symptoms” of their disease. Intuitively, I think most of us want to carve out some sort of middle position in between these two extremes. What’s troubling about addiction is not the content of the desire. Wanting a line of coke is not like wanting to rape a child. The problem is the overwhelming force of the desire: Addicts privilege their fix over all other competing desires, including the desire to fulfill moral obligations to other people. So, to preserve the intuition that addicts can be responsible for bad things but not be bad people, we are intentionally opaque in the use of terms like “disease”- which addiction really isn’t- and “choice” -which addiction really is, but which implies a level of freedom and self-determination that nobody really has.

I think Heynman is right to characterize addiction as a “choice,” but the word needs to be trimmed of its metaethical weight. Addicts have a choice because their behavior is determined by one desire, and that behavior could be altered if competing desires become more powerful. Treatment programs are designed to strengthen the motivational force of these competing desires by focusing the addict’s attention on all of the things that they can keep or get by staying sober and all of the things which they stand to lose if they don’t. These programs also offer incentives that tip the balance of competing desires by making some desire-fulfillment much easier than other desire fulfillment. All of this suggests that addiction- both the active problem, and the process of recovery- is not a singular, moral choice. Choice is never-ending sequence of battles between competing desires. The fact that treatment programs work by reinforcing certain desires and disincentivizing others should not suggest to us that addicts have much in the way of power or freedom to change on their own. It simply means that, given the right support and opportunities, they can change. Of course, the same description of choice is equally applied to non-addicts as well.

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

A+ Tutorial: Economics- Technology

2010-03-21T05:09:00.000+02:00

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1. How does technology affect an organization’s productivity and costs? How has your organization used technology? What was the effect on productivity and costs? How do technical and economically efficient concepts shape the long-run average total-cost curve (thinks generally, and drill down to specifics if possible)?

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

Lady Liberty's Last Days

2010-03-20T13:51:00.000+02:00

Lady Liberty, that beacon of light and hope, has a potentially terminal disease, called Liberalism.

Tomorrow, likely, the Democrats will vote to end the Constitutional Republic that America has been since 1776.

But it’s for your own good.

The Government knows better.

Last Thursday, the California Occupational Safety and Health Standards Board voted to set up a committee to examine whether condoms should be required on all pornographic film shoots.

California has run out of money, but it hasn’t yet run out of things to regulate. (IBD)

A bill introduced this week by Brooklyn Assemblyman Felix Ortiz would ban use of salt in every dish, in every drink, on every plate, in every restaurant, in every single part of New York State.

“No owner or operator of a restaurant in this state shall use salt in any form in the preparation of any food for consumption by customers of such restaurant, including food prepared to be consumed on the premises of such restaurant or off of such premises,” the bill, A. 10129 , states in part.”

Violators would be hit with a $1,000 fine for each salty dish.

Ortiz says the ban is designed to save lives, and would save billions of dollars in health care costs.

And I just saw this guy on “America Live” yesterday on FOX and when the host joked about cutting, fat and cholesterol and other unhealthy things, he agreed that should happen to and this was just the start for him.

The government should regulate what you eat, because you’re not to be trusted.

And it’s for your own good.

Sony Pictures Entertainment Chief Executive Michael Lynton called on the nation’s biggest circuits to think about the waist lines of their customers, not just their own bottom lines.(LA Times)

He’s advocating doing away with Butter on popcorn.

The salt ban prompted my to post this on a message board:

Since the Liberals are so intent on the Government saving everyone from themselves I think

Obama needs to takeover the Grocery Stores and close all Convenience Stores and Fast Food.

They are after all, sell things that are bad for you.

Think of it, the government can make sure you eat healthy and nothing but healthy.

They could issue you a card that has all your “best for you” foods on it and then you won’t be allowed to buy anything that is bad for you.

Think what it could do for ObamaCare and Health Care costs.

The government will decide what’s good for you and you have to eat it.

Also, the government programs like Food Stamps can be expanded so no one goes hungry ever again.

They can make it Mandatory.

Then they take over the Restaurants because you can’t be trusted.

And Fast Food will have to be outlawed because they are pure evil.

Utopia awaits.

And you’ll never have to think again about your health, the government has you covered.

Cooking Shows will have to be government controlled.

And We’ll have the Food Police to arrest black marketers selling products and to make sure all government regulations are enforced.

Embrace the Freedom from thought and stress.

Then after I write it I wonder about government subsidized Gym memberships, for all those unhealthy people who can’t afford it.

That’s unfair too. (in the Liberal world).

You have a right to be healthy and those evil corporate bastards are making you fat and unhappy. It’s just wrong….

And with the Government eliminating every Student Loan in the country that is in Private hands and giving it all over to the Bank of North Dakota, a College Education as a right can’t be far off.

It’s for your own good.

We’ll have a “healthy”, “well-educated”, well-cared for, populace.

What could be wrong with that?

How about Freedom.

Overrated in the Liberal world.

You’re not smart enough to be free.

The government must protect you from yourself.

You will have the freedom to agree with them, or else.

And with Cap and Trade, Census gerrymandering, and Amnesty they will try and control everything and everyone else.

But it will be for your own good.

You can’t be trusted.

Meanwhile, ObamaCare will result in the creation of at least 16,500 new jobs. Doctors? Nurses? Ha! Dream on, suckers. That’s 16,500 new IRS agents, who’ll be needed to check whether you — yes, you, Mr. and Mrs. Hopendope of 27 Hopeychangey Gardens — comply with the 15 tax increases and dozens of new federal mandates about to be “deemed” into existence.

This will be the biggest expansion of the IRS since World War Two — and that’s change you can believe in. This is what “health” “care” “reform” boils down to: fewer doctors, longer wait times, but more bureaucrats.

So can the IRS Health Care Enforcement Division be far from reality?

The Food Police.

The Energy Police.

The Internet Police.

The TV police.

The Education Police.

Welcome to the new America of your God (and President for life when Liberal repeal the Constitutional Amendment on Term Limits) Barack Hussein Obama.

It’s not like Liberals take the Constitution or the Consent of The Governed seriously.

That’s how dire it really is folks.

The Second American Revolution has to begin.

You have no choice.

Unless, you want to prostrate and kiss the Emperor’s ring.

Mark Steyn: Obama is government, and government is Obama. That’s all he knows and all he’s ever known. You elected to the highest office in the land a man who’s never run a business or created wealth or made a payroll, and for his entire adult life has hung out with guys who’ve demonized such grubby activities. Obama’s Cabinet has less experience of private business than any in the last century. What it knows is government, and government’s default mode is to grow, and grow.

Look around you, take it all in. From now on, it gets worse. If you have kids, they’ll live in smaller homes, drive smaller cars, live smaller lives. If you don’t have kids, you better hope your neighbors do, because someone needs to spawn a working population large enough to pay for the unsustainable entitlements the Obama party has suckered you into thinking you’re entitled to.

The unfunded liabilities of current entitlements are $100 trillion. Try typing that onto your pocket calculator. You can’t. There isn’t enough room for all the zeroes.

$100,000,000,000,000

Obama and Pelosi are strong-arming swing-state congressmen into taking one for the deem. It’s appropriate that it should take banana-republic maneuvers to ram this through, because it’s about government so powerful it can make up the rules as it goes along. Maybe regulators should roll a giant condom over the Capitol before it fatally infects the rest of us.

“No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and Virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders.”– Samuel Adams

“It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people’s minds.”–Samuel Adams

“For in reason, all government without the consent of the governed is the very definition of slavery“.–Jonathan Swift

“2010 is not just a choice between Republicans and Democrats. 2010 is not just a choice between liberals and conservatives. 2010 is a referendum on the very identity of our nation.” –Florida Gubernatorial Candidate (and Tea Party Activist)

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.”–

Thomas Jefferson

“They who can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.“

Benjamin Franklin

“When men yield up the privilege of thinking, the last shadow of liberty quits the horizon.”

Thomas Paine

“The hate of men will pass, and dictators die, and the power they took from the people will return to the people. And so long as men die, liberty will never perish.”

Charlie Chaplin

So let us all hold the flame of liberty, so that one day it will live again.

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

An Alternative Statistical Look at the U.S. Economy

2010-03-20T05:42:00.000+02:00

I’ve come across Shadow Government Statistics before but I was recently reminded of them again. The proprietor of the site, Walter J. “John” Williams provides this background:

Walter J. “John” Williams was born in 1949. He received an A.B. in Economics, cum laude, from Dartmouth College in 1971, and was awarded a M.B.A. from Dartmouth’s Amos Tuck School of Business Administration in 1972, where he was named an Edward Tuck Scholar. During his career as a consulting economist, John has worked with individuals as well as Fortune 500 companies.

Formally known as Walter J. Williams, my friends call me John. For more than 25 years, I have been a private consulting economist and, out of necessity, had to become a specialist in government economic reporting.

One of my early clients was a large manufacturer of commercial airplanes, who had developed an econometric model for predicting revenue passenger miles. The level of revenue passenger miles was their primary sales forecasting tool, and the model was heavily dependent on the GNP (now GDP) as reported by the Department of Commerce. Suddenly, their model stopped working, and they asked me if I could fix it. I realized the GNP numbers were faulty, corrected them for my client (official reporting was similarly revised a couple of years later) and the model worked again, at least for a while, until GNP methodological changes eventually made the underlying data worthless.

That began a lengthy process of exploring the history and nature of economic reporting and in interviewing key people involved in the process from the early days of government reporting through the present. For a number of years I conducted surveys among business economists as to the quality of government statistics (the vast majority thought it was pretty bad), and my results led to front page stories in the New York Times and Investors Business Daily, considerable coverage in the broadcast media and a joint meeting with representatives of all the government’s statistical agencies. Despite minor changes to the system, government reporting has deteriorated sharply in the last decade or so. — John Williams

Manipulating numbers is a very easy thing. The U.S. Government’s numbers may have as much plausibility as China’s GDP numbers. How correct John Williams statistics are I cannot testify. I doubt most economists can tell either seeing how well they’ve covered their profession in glory the past two years. Many economists were perhaps shocked temporarily out of their narrative in the immediate aftermath of the Global Financial Crisis but most have comfortably settled back into their existing worldview.

I present the Shadow Government Stats here as food for thought:

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

What's Wrong With This Brochure?

2010-03-18T21:47:00.000+02:00

What’s wrong with this brochure? The front advertises the CrediAMIGO microfinance program run by the Banco do Nordeste, a Brazilian, state-run, development bank. CrediAMIGO is the largest microfinance program in South America in terms of numbers of clients. “Those who want to grow should remember one name: CrediAMIGO.”

The flip side of the brochure gives the details of the program and the interest rate charged on loans.

The fine print shrewdly explains that the incredibly low 1.32% monthly rate advertised will, when calculated on Effective Interest Rate terms (roughly equivalent to APR rates used in the US), result in annualized interest charges of between 33% and 62% (not taking into account fees charged for opening accounts not mentioned here but only on the CrediAMIGO website “Products Page”).

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

Will the Jobs Bill Create Any Jobs?

2010-03-18T13:56:00.000+02:00

Over at the American Spectator, I explain why it won’t, but a deregulatory stimulus would. Main points:

-Anything that Washington giveth, it must first taketh away from somewhere else. The jobs bill is a zero-sum game.

-When government borrows more, less investment capital is left over for the productive sector.

-Taxes will have to be raised later to pay for today’s increased borrowing.

-Deregulation is a better approach. The biggest obstacles to job creation and economic growth are all in Washington.

[Via http://inertiawins.com]

A Green, Hi-Tech Manitoba: Budget 2010

2010-03-18T05:27:00.000+02:00

As part of the Manitoba Modern Economics, Technology and the Environment project, I have come out with a 2010 budget wish list for the provincial budget. The budget, which comes out March 23, 2010, faces one of the greatest challenges in a while. For the first time in recent memory, Manitoba forecasts a deficit, in the range of $555 million. One can account that their were many problems that happened in 2009, namely the H1N1 flu, 2009 spring flood, and the global economic crisis. All of these dried out the coffers of the government as the cost of the H1N1 and spring flood cost Manitoba $146 million. Add to that Manitoba Hydro’s revenue declined by $136 million, and Manitoba is in the red.

Despite the deficit, Manitoba has many challenges ahead. This includes, poverty reduction, building an environmentally sustainable province, and a very high-tech economy with new exciting high-tech industries that can compete with the rest of the world.

In Manitoba Budget 2010: Recommendations to the Province of Manitoba, I as the creator of Manitoba Modern Economics, Technology have laid out what the province can do in tough times like these to bring in the deficit, while decreasing poverty, greening our environment and building a high-tech province.

This includes:

- Increasing the higher income tax bracket in 2011 for a temporary measure, along with creating a sur tax for the highest income earners until 2013.

- Decreases the lower-income tax bracket.

- Claw back MLA salaries and pensions by 5%

- Freeze public service sector employees salaries for two years.

- Creation of the Social Entrepreneurship tax credit to encourage social entrepreneurship.

- New credit for worker owned and micro businesses.

- Environmental community entrepreneurship tax credit of 5% for local green enterprises.

- Start a round table discussion for a carbon tax within the Province for 2012.

- Increase green technology research & development by 5% and 10% if a carbon tax system is in place by 2012.

- Creating a green jobs training program.

- Allowing consumer co-operatives and small-scale private businesses to offer alternative energy.

- Expand the Interactive media tax credit’s maximum 40% limit from $500,000 to $1,000,000.

Even if the province implemented some of these ideas, the province would be well on its way to reducing the deficit, while efficiently using their resources to work on the things society cares about, which are eliminating poverty, a clean environment and new job creation.

For more information contact Adam Johnston at: moderneconomicstechenviro@gmail.com

Budget 2010

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

Google's Failure in China.

2010-03-16T21:34:00.000+02:00

The recent blog by David Drummond, chief legal officer at Google, proves that the company’s leadership learned little from their move to China in 2006.

China is a complicated market, more so with the media industry. The Communist Central Party (CCP) retains far more control over media, the press, and the internet than any other economy at a similarly-developed level. Internet companies must carefully consider how to enter China so they do not get forced into releasing personal account information.

Google took a long, hard look at the plight of Yahoo! in China. When it entered the country, Google kept its gmail and gchat services off of servers located in China. Because personal account information was stored on servers outside of China, Google was safe from being forced to turn over sensitive information.

Google made two broad errors since entering China: failing to assess its target consumer and reacting with ultimatums to the recent hacker attack.

When it entered China in 2006, Google tried to fight the CCP at every step, announcing that it was fighting for the rights of the common Chinese consumer. When taken from a western perspective these actions are honorable. But the Chinese are just as nationalistic and proud of their country as the US. They are not inclined to demand their rights from the government entity that brought them out of the Cultural Revolution and provided them with over 9.3% GDP growth for 15 years.

China comes from a cultural base that is collective, Confucian, and non-rebellious. Its perspective on freedom of speech and freedom of property varies from ours in that it assigns to these issues a lower level of importance. Google went into China espousing American values that did not translate well. As Kai-Fu Lee, former head of Google China, was quoted as saying, “The Chinese internet is different from the US and European internet. If you don’t listen humbly to your customers and pay close attention to the subtle differences you will fail…That is why, generally, US internet companies have, with the exception of Google, failed in China” (Neate, 2010). While Kai-Fu Lee seems to feel Google has listened to the consumer’s needs, I feel that Kai-Fu Lee’s departure from Google shows in part that it did not.

Additionally, Google’s ultimatum blog posting represents a major failure to grasp opportunity. Had it understood Chinese history, it would know to play the victim in this case. Take the Chinese classic “The Three Kingdoms” for example. Every Chinese businessperson reads this novel as a strategic guide to business. In it, a master strategist named Zhuge Liang finds his army stuck on a river bank awaiting an attack the next morning. They know they don’t have enough arrows to repel the enemy that will cross the river in the morning. So Zhuge Liang has his army build and dress straw mannequins and place them in boats. They then float the boats across the river with ropes and swimming soldiers. The enemy, fearing a pre-emptive attack, fires arrows that stick in the mannequins. The boats are pulled back and the next day Zhuge’s army uses the enemy’s own arrows to repel their attack, decimating the enemy in the process.

Stories like these are what Google should have read to gain an understanding of Chinese culture and history. Had it approached this situation with a more humble form of outrage, Google would have gained negotiating leverage and respect in a country where the government is not known to give it. It could have used the arrows from the ineffective attack as ammunition to fire back at the CCP.

Cited Works:

Neate, Rupert. “The former Google boss creating China’s answer to Silicon Valley”. The Daily Telegraph. London (UK). Mar. 12, 2010. Pg. 4.

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

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2010-03-16T13:55:00.000+02:00

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I like Hayek too

2010-03-16T05:52:00.000+02:00

OK, I have to admit, I am one of those who read “The Road to Serfdom” and totally loved it. Hayek was spot on about the folly of planned economies. The markets are not perfect. But having imperfect markets beats planned economies on any day. We just have to provide a reasonable amount of regulation and provide social safety nets that take care of those who end up taking one for the team because of the dynamics of the free market.

And that is why I thought this post by Easterly was kind of neat.

PS: forgive the terse posts lately. Blame it on this being the last week of winter quarter.

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

Our Political 'Teams'

2010-03-14T21:51:00.000+02:00

And the Bankers Manifesto of 1892

It is amazing to watch how much of the population in the United States has developed such intense team loyalty. To listen to Ohio State University and Michigan State fans before or during their annual game, you would think the guys on the field were locked in a mortal winner-takes-all battle. And fans have been known to cry or get depressed if their ‘team’ looses.

The team loyalty ‘religion’ is also an integral part of the divide and conquer strategy being used on the population of the U.S. by the global gangster/bankers. Some people actually admit they are Democrats or Republicans for no other reason than that’s what their parents were. Currently Team Republican seems to prefer O’Reilly and FOX news and Team Democrat are fans of Olberman and MSNBC. This is NOT an accident that the media (controlled by a few huge corporations) constantly beats the Democrat versus the Republican (or vice versa) drums. It is orchestrated to keep us divided and prevent us from noticing what is going on behind the curtain. If we woke up and realized that Washington DC is now a replication of the movie The Godfather and Ben Bernake’s testimony to Congress was exactly like Michael Corleons, we’d recognize why our economy is in on the brink of collapse and who is REALLY responsible.

In the early 1900’s US Congressman Charles A. Lindbergh, Sr. from Minnesota revealed The Bankers Manifesto of 1892 before the US Congress sometime during his term of office between the years of 1907 and 1917 – to warn the citizens.

Perhaps the gangster/banksters got the idea of promoting a rivalry (as a smokescreen) from the Hatfields and McCoys which took place from 1878-1891? The Hatfield-McCoy feud (1878 – 1891) is an account of American folklore that has become a metaphor for bitterly feuding rival parties in general.

The Bankers Manifesto of 1892

“We (the bankers) must proceed with caution and guard every move made, for the lower order of people are already showing signs of restless commotion. Prudence will therefore show a policy of apparently yielding to the popular will until our plans are so far consummated that we can declare our designs without fear of any organized resistance. The Farmers Alliance and Knights of Labor organizations in the United States should be carefully watched by our trusted men, and we must take immediate steps to control these organizations in our interest or disrupt them.

At the coming Omaha Convention to be held July 4th (1892), our men must attend and direct its movement, or else there will be set on foot such antagonism to our designs as may require force to overcome. This at the present time would be premature. We are not yet ready for such a crisis. Capital must protect itself in every possible manner through combination ( conspiracy) and legislation.

The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.

When through the process of the law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders.

History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.

The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.

By thus dividing voters, we can get them to expand their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discreet action, we can secure all that has been so generously planned and successfully accomplished.

“THE BANKERS’ MANIFESTO OF 1934

Capital must protect itself in every way, through combination and through legislation. Debts must be collected and loans and mortgages foreclosed as soon as possible. When through a process of law, the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of wealth, under control of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an IMPERIALISM of capital to govern the world.

By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd. Thus by discreet action we can secure for ourselves what has been generally planned and successfully accomplished.

_______________________________________________________________________________________

So what is it that both Team Republican and Team Democrat have in common that the gangster/banksters don’t want us to come together on? Here are just a few very likely possibilities:

job losses
pension losses
pollution of our air (chemtrails) and water
privatization of our public services and resources
crumbling infrastructure that there doesn’t seem to be enough money to fix
a devastating deficit that grows larger each year as the politicians refuse to stop waging endless wars
poor quality education for all of our children
unreliable voting system that can be manipulated electronically
a regimented computerized health care system that is now being forced upon us
unsafe drugs and vaccines are being overprescribed to us due to the conflict of interest and corruption at the CDC, the FDA, and the WHO
corporatized medicine (Medicine, INC.) that is now a ‘for profit industry’ placing safety and patient care far behind corporate earnings
imported unsafe food (80% of all seafood is now imported and very likely not safe to eat)

Finally, every time I ask ANYONE if they feel like we are drowning in corruption they respond with an emphatic YES!

We need a real awakening and we need to recognize who our common enemy is:

The entire centralized global banking cartel (the gangster/banksters aka The MoneyMasters) and their ‘pals’ such as: the Bank Of International Settlements (BIS), International Monetary Fund (IMF), Club Of Rome, The Committee Of 300, the Central ‘Intelligence’ Agency (CIA), the Council On Foreign Relations, The Tri-Lateral Commission, The Bilderberg Groups, the ‘Federal’ Reserve System, the Internal Revenue Service(s), Goldman Sachs, Israel and the Israeli lobby, the Vatican, the City of London, Brussels, the United Nations, the Israeli Mossad, and the primary chosen mouthpiece of the beast, the Associated Press (AP).” For more info about their ‘agenda’, read The ‘City’ World Conquest

Ellen Brown of Web of Debt is promoting an end to the Central Bankers control of our economy and a restoration of sound monetary policy: Campaigning for State Owned Banks

Footnote:

My very first awakening into ”reality’ regarding globalization was watching TheMoneyMasters. It took me several days to digest a) the magnitude of lies and deception that was ongoing and b) the serious implications the corrupt central banking system represents to our country and our families. But, I recovered.

[Via http://anticorruptionsociety.com]

The Economics of Butch Cassidy and the Sundance Kid

2010-03-14T13:50:00.000+02:00

Last night I saw the excellent Butch Cassidy and the Sundance Kid for the first time. There’s a lot of economics in that movie.

For instance, when Butch Cassidy finds out the expensive lengths the train company is going to in order to stop he and Sundance from robbing them, he identifies and laments a pareto improving road not taking.:

“A set-up like that costs more than we ever took…If he’d just pay me what he’s spending to make me stop robbing him, I’d stop robbing him.”

This is a lesson in the limitations of the Coase theorem, especially when one party has shows a willingness to break the law. Reputation and trust matter for effective contracts.

Later Butch wants, and in fact tries, to make a bargain with the government, offering to fight in the Spanish-American war and stop his criminal ways if all their past crimes will be forgiven. Again, the reputation and the commitment problem prevent a pareto improving outcome.

[Via http://modeledbehavior.com]

A+ Tutorial: Labor Supply and Demand- Airline Industry

2010-03-14T05:52:00.000+02:00

A+ Tutorial: Labor Supply and Demand- Airline Industry

Price: $2.99

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Please click to download tutorial to Labor Supply and Demand- Airline Industry. Ace your paper with the help of My Little Tutor!

Write a scenario that would cause a shift in labor supply and demand. The following

areas have had high job growth rates and can be used for your scenario: transportation,

insurance, technology, and health care industries.

· Post a 200- to 300–word response that focuses on the following:

o What is the area of employment?

o Why has this shift occurred?

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

Gannett sale of Honolulu newspaper results in 600 layoffs

2010-03-13T21:30:00.000+02:00

Six hundred workers will lose their jobs when owner Gannett Co. sells the The Honolulu Advertiser newspaper and related assets to Oahu Publications Inc., owner of the Honolulu Star-Bulletin.

Gannett is the parent company of the Arizona Republic. The Honolulu Advertiser was founded in 1856. Gannett purchased the paper in 1993.

The majority owner of the Star-Bulletin, David Black, has put his newspaper up for sale. However, he has said if a buyer isn’t found, the two newspapers will merge and layoffs will occur, according to an AP report in Editor & Publisher.

It is not known how many Advertiser employees would be rehired under a merged operation.

The Honolulu Advertiser reported the sale on February 25.

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

A Well-oiled War...

2010-03-13T13:57:00.000+02:00

In another year of the 21st Century AD, the great oil wars began. It was called many names. The Great Empire called it a terrorist war, fraught with weapons of mass destruction and the beginning of democracy in the Mid-east. The warriors of Islam called it Jihad. Many acts of horror (actually war) were committed on both sides against ideals and reasons for war. “This our World…War is wrong…because there is Life here…bleep,bleep and bleep.”

The oil wars began as Iran used flying weapons to sink and destroy shipping lanes out of the Middle East. Israel, already involved with an on again, off again proxy war with Lebanon and Palestine, the Great Empire’s proxy warriors attacked Syria and Iran. The war against Terrorism already causing direct engagement by The Empire’s Combine in Iraq and Afghanistan broadens into Iran. (From the Persian Gulf through the Straits of Hormuz into the Gulf of Oman and into the Indian Ocean). 90% of the world’s oil exported from the Mid-east passes through the Straits of Hormuz.

Before the Iranian warriors were stopped, many great oil tankers were destroyed. Their remains jammed the ports across the Strait of Hormuz: Iran was destroyed, and no Rachel it does not take atomics to destroy a country. Destruction requires the correct amount of death, destruction and purpose. Black crude always justifies the correct mix of everything to destroy a country.

Check this: In history, where has Iran under any name been involved with territorial wars, wars of conquest, etc? Persia was Iran and the UAE before the Colonialist of Oil came into an uneasy power.

Note: Once upon a time brought life, or “the miracle of life” to earth or a new Earth along with other powers beyond Eden on Earth or on another world dying, decaying or alive and vibrant like Eden or Mars or somewhere over another rainbow. Earth maybe? The collision of powers beyond life or of life or of war and death and runaway cycles of birth, life and death in a endless variation of sorrow, fear, happiness, fear and other wonderful expressions of life or death or… Hearing these confusions and in silence, war begins another ending. Just before another cycle?

Splendid thoughts of shapes of other shapes and other things and sounds and people and scenes within scenes with scenic folk, both together and alone. I drive into city, my city by a bay, in a whirl of lights and wheels and stop and going, until I park. They watch water, wet leaves and wet trees swaying in the warm wind and breeze and the rustling of passing cars.

Did the story of Moses and the Pharaohs actually take place in ancient Egypt or was it on another world prior to the end of that planet’s life cycle? Readings of earth’s history provides a collision of fact, time, events, places so mixed up and…

[Via http://pmespeak.com]

Hawks eyeing wrong prey

2010-03-13T05:32:00.000+02:00

Boston Globe

By Robert Kuttner March 12, 2010

PRESIDENT OBAMA has bowed to pressure from deficit hawks in Congress and on Wall Street by agreeing to their longtime pet project, a commission charged with reining in the federal budget.

The concept behind the creation of the National Commission on Fiscal Responsibility and Reform was invented on Wall Street. For more than two decades, private-equity billionaire Peter G. Peterson and an array of Peterson-affiliated groups such as the Concord Coalition and the Committee for a Responsible Federal Budget have been warning that deficits and “unfunded liabilities’’ would crash the economy. Funny thing, though, when the actual crash came it had nothing to do with projected public deficits and everything to do with excesses in private financial markets.

According to Peterson’s billion-dollar foundation, “Washington is broken,’’ and it will take an extra-legislative commission to provide the fiscal discipline that Congress has failed to achieve. In fact, however, the Clinton administration put the budget into surplus. It wasn’t “Washington’’ that pushed it back into deficit, but the Bush tax cuts and two off-budget wars.

Obama’s large deficits are mostly the result of the legacy of the Bush tax cuts and the depleted revenues resulting from recession, not the stimulus program. Before Obama took office, the projected deficit for 2009 was already in excess of 8 percent of GDP.

Since Republicans have made clear that they will oppose tax increases, the general assumption is that the 18-member commission, with six presidential appointees and the remaining 12 to be appointed by Congress, will recommend mainly cuts in Social Security and Medicare. This is quite a message to the American people:

Abuses in private financial markets whacked the value of your home, your retirement savings, and your job. Now, in order to pay for the costs of bailing out the banks, we will also have to cut back the two public benefits you can count on that were not tainted by private-sector excesses: your Social Security and your Medicare.

The commission’s members are mostly part of the club that supports deep cuts in social insurance. Five out of the six members appointed by Obama are basically deficit hawks. Peter Orszag, Obama’s budget director, is a longtime supporter of the commission and helped sell it to Obama.

The Republican co-chair appointed by Obama, former Senator Alan Simpson of Wyoming, was a longtime crusader for Social Security privatization. Only one of Obama’s six appointees, Andy Stern of the Service Employees International Union, is a strong Social Security defender. Just one of the Senate appointees, Senator Dick Durbin of Illinois, is opposed to cuts in entitlements.

House Speaker Nancy Pelosi has yet to name her three appointees, but at least one is likely to be a deficit hawk. So the deck is pretty well stacked before the commission even begins.

But, wait, aren’t deficits a real problem? Well, the Congressional Budget Office projects that the deficit will plateau at about 3 percent of GDP late in this decade. That’s about a point too high — if the deficit were 2 percent of GDP, the debt ratio would subside. A temporary spike in deficits is no reason to cap or privatize Medicare and Social Security, which is the real agenda of many of the deficit hawks. With unemployment projected to stay above 7 percent until 2014, it’s premature to obsess about deficits. If anything, we need bigger deficits and more public investment in the short run to bring about a stronger recovery. With more people employed and paying taxes and a higher growth rate, revenues would increase and we would not need such heroic measures to cut the deficit.

And if we restore progressive taxation, we can have both a responsible fiscal policy and the increased social investments that America needs without taking it out of Social Security or Medicare. That conclusion, alas, will be the minority report of Obama’s fiscal commission. It should be the majority report.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His forthcoming book is “A Presidency in Peril.’’

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

Foreign Investment.

2010-03-11T21:52:00.000+02:00

The following paragraph, taken from my international business law textbook, sums it up perfectly:

“No greater decision can face a firm engaged in international business than the decision to make foreign investments, particularly in the case of active commercial investment (establishment of operations), but equally so in passive portfolio investment (buying securities issued abroad). The firm must decide whether to commit itself to the foreign market in a manner that involves the highest degree of capital investment and the longest commitment to goal achievement, in a situation often difficult to unravel. This all takes place in an environment that may be susceptible to radical change, with the firm’s reduced capability of understanding and adapting to cultural differences. As a result, the commercial potential of such an opportunity should be clear on its face, or capable of explanation in sound and tight commercial terms. If the commercial realities of foreign investment are not well founded, the venture will, at all times, be at serious risk, and no amount of legal creativity will be able to change the situation.”

When choosing to enter a new market, especially one as complicated and culturally different from ours as China, it is important to do homework. There is no worse reason to go to a foreign country to trade, manufacture or sell than “the competition went in, we have to go in too.” How do we know the competition did their homework? By staying out could we gain advantage and market share as they struggle to keep their foreign business operational and profitable?

Entering a foreign market is about research and reporting. Data collection is key. Get as much information as possible and figure out what it says. Look at the history of growth and the various markets. Get all the numbers together and then perform a statistical analysis of that information to gain at least an educated guess of the chances of success or failure. What are the chances, how great is the swing? Standard deviations for ROI opportunities have to be taken into account.

What is the political environment like? Are you expanding domestically? If so, are you ready for different challenges in each new local government? What will the country look like in five years? Are the state-owned banks going to start lending to local entrepreneurs, and if so, what’s going to happen to your product when suddenly an influx of available cash for small businesses creates a market saturated with competition? If you’re entering China with a consumer good like fried chicken, what do the cultural differences suggest? People from Sichuan province are going to want spicy chicken, people from Beijing will not.

When entering a foreign market, no matter where it might be, all possible risks must be assessed and re-assessed. As the company goes in and starts work, at least once per quarter, and probably once per month, someone in upper management should re-review that report and take a hard look at where the business stands. What are we looking like in reality compared to what we saw on paper? If there are issues, how do we address them? Are we missing something from a cultural perspective that is dragging down morale and making our business less profitable? How do we stay on track? How do we keep the lines of communication open? How do we affect real dialogue with our Chinese counterparts and employees? How, in effect, do we succeed?

The answer to that last question is easy: Homework.

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

Cut Back!

2010-03-11T13:49:00.000+02:00

If an individual is spending more money than they make, they must either make more money or spend less. If they decide to spend less, they will maintain the essentials and trim back on the non-essentials.

The same is true in the business world. If you are not making a profit, then you need to remove non-essentials from your operating costs. This can sometimes involve painful decisions. It is important to make the right cuts.

The same is true with our government. It is time to recognize what is necessary, and what is non-essential. It is high time to reduce spending in non-essential areas. It is not a time to be spending more money. It is time to be spending less.

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

Today We Learn About: Water Privatization in Argentina

2010-03-11T04:33:00.000+02:00

Access to drinking water and sanitation facilities is a primary human development goal for all nations that wish to improve the lives of its citizens. Drinking water is hard to come by in nature on the scale that it is used in any country. Currently all developed nations have infrastructures such that it is relatively easy for individuals throughout the inhabited areas to access clean drinking water and human waste removal. In Argentina, the utilities that service drinking water and sanitation have had poor performance for several decades before the government decided to privatize roughly thirty percent of the municipalities. While water and sanitations are public goods, when governments fail to provide adequate service, privatization may have positive externalities during a short transition period (given accountability and contract length) until the political environment is stable enough to maintain utilities to optimize for human development.

The next section will deliver a brief description of common/ public goods in a neoclassical framework as well as information on global development goals. The following section will explain the state of sanitation and drinking water before privatization. Third there will be a detailed explanation of water privatization in Argentina. The essay will end by discussing the past versus the present and the optimal state of drinking water access followed by conclusions.

In order to increase human development water availability must be seen as a public good, one that is non-excludable and non-rivalruos. Neoclassical economics classifies goods by the ability to control who has the right to use a good and whether one person using a good prevents consumption by another. Water delivery and sanitation are both excludable because in order to have access a home must be hooked up and the home must pay for the water used. Drinking water is rivalrous because there is a limited supply of natural drinking water; a utility service needs to provide for waste disposal and water cleansing and delivery. However for increased development, governments need to treat access to drinking water as a public good. In order to improve the well being of citizens water should be non-excludable in the access, homes should be able to be hooked up even if they are of low income. Water and sanitation facilities should also be plentiful enough to supply the population and therefore non-rivalrous. Drinking “water is not just a commodity but a common public good” (Szollosi-Nagy, 2002) that every nation needs to strive to deliver.

The UN Millennium Declaration made eight years ago set forth eight goals for global development and six of them relate directly to access to clean drinking water. Water can be argued as the most important molecule needed to sustain life and limited access to it renders drastic affects such as hunger, disease, child mortality, maternal health and environmental sustainability (UNESCO). All of the problems previously mentioned are still issues in Argentina that can be addressed rather simply by improving the infrastructure and supplying city peripheries and rural areas with water and sanitation. While privatization has improved these factors over the previous management, more needs to be done in order to done in order to be on par with the rest of the developed world.

In the 1970s and 1980s Argentina was following an Import substitution model that required a lot of investment by federal and local governments. After the budget for investment in manufactured goods there were little funds left to invest in water and sanitation development or maintenance, or most other utilities for that matter. The pipes that carried water and sewage were degrading and becoming hazardous, while people on the outskirts of cities in newly settled areas could not get hooked up to receive water or send waste. No new treatment plants were built and the older facilities were not able to handle the increase in demand. “After this long period of negative net investments, huge capital inflows were needed to improve both the quality and access” to water utilities (Galiani, 2002). Devaluation of the Argentine peso and feeing foreign investment made it impossible for the state to fund such encompassing investments. The public sector was not able to make the reforms needed for development in times of economic and political turmoil. In order to eliminate debt the IMF and World Bank required that the government privatize state operates services, the money was all funneled towards servicing debt rather than assist citizens. The private sector was able to access foreign investment in various multiple credit markets given that they offered a positive return to investment. The step towards privatization was on one hand forced but given the scenario it was the only option to increase investments in water utilities.

The state reform law under President Menem in 1989 (Olleta, 2007) started federal privatization of social industries, yet water and sanitation sectors (except for Buenos Ares) were “controlled at the local level, and therefore, the decision to privatize is a local one.” (Galiani, 2002). This independence from federal privatization shows that local governments recognized the need for capitol investment was such that they would act against the cultural norms to pursue alternate funding. Several concerns emerge when goods that people need to live become controlled by the private sector. First is that the private sector may supply sub optimal service quality given that firms take into account profitability rather than health externalities. Second is that privatization would hurt the poor if firms only invest in high-income areas; people who need improved service the most would be denied.

Research on child mortality, coverage area and water quality has shown that private water utilities have produced a series of coverage expansions and have kept up with the quality of water mandated in contracts (Galiani, 2002). The private sector increased the efficiency of the water utilities and used that decrease in excess spending to increase coverage and quality. The private sector was able to decrease child mortality by five to seven percent (Galiani, 2002) in a short amount of time, the rate of water borne disease also decreased with improved quality. Lower income citizens close enough to new pipelines had the opportunity to get connected and pay for the connection over time. Efficient business strategy also helped determine which technologies to import and decide where to implement facility updates in order to handle increased demands.

Concerns over privatization are valid but it must be realized that firms need to operate within the bounds of the contracts and as long as local governments have available monitoring and an established legislature for enforcement. Privatized water utilities in Argentina operated efficiently enough and increased their market enough to make a profit and continue capitol investment. But that is not to say that the private sector is the best way to achieve social goals, it is an efficient way to build a foundation or blue print to success. The private sector did not achieve optimal quality and complete coverage, what they did was out performing a failing public sector business model.

Shortfalls in the private sector were mainly due to the limits on profitable investments, signifying a key contradiction in private sector ability and social demand. Private sector goals do not meet social development ones, including increasing per capita GDP in the middle class. Efficient business models save money for the firm and allow for investment in newer technology but cut over 7200 jobs (Olleta, 2007) in the process. Profit maximization also limited privatization to take root in metropolitan areas, where small investments can effect a lot of people. This left roughly forty percent of the population of Argentina who live in smaller communities too far to run pipeline cheaply and too small for individual treatment plants out of luck for foreign capitol. Without the possibility for a large return on investment those in most need were denied what they need to sustain their lives given the pollution from both ISI plants and more modern plants under private enterprise.

Considering the municipalities under private water and sanitation utilities, the improvements made have surpassed the previous public utilities in all measures but they have fallen short of optimal social benefit. Prior to privatization the prices for service was raised by sixty-two percent (Olleta, 2007), an inflated price that represented corruption and excess spending, but private firms failed to lower prices to a level that represented the real value before the inflated price. The firms lowered it enough to keep people out of the streets protesting and still make a large profit. Pricing was brought to the forefront in 2001 when the supplier for Buenos Ares “Aguas Argentina had been fined US$ 600,000 for overcharging consumers” (Hall, 2002). Prices were steadily increased in increments ranging from eight to twenty five percent (Hall, 2002) from the early to late 90s in order to attract investors. Another issue with pricing was that while the poor were given the opportunity to get connected to water and sewage, “new users were unable to pay on time the connection charges introduced in 1994” (Olleta, 2007). Moral hazard urged poor folks to order connection even though they could not afford in the long run because its better to have water now and be punished later rather than to get sick and die. By the mid 90s the increase in prices by a quarter caused poor areas to spend about nine percent of income on water and sewage (Olleta, 2007), increasing the poverty rate.

Pricing is not the only area that private utilities failed to create optimal social benefit; the building of new treatment facilities that were assumed in original contracts were delayed and re-proposed in many areas. One proposal was for a pre-treatment plant that would actually increase pollution rather than building a two stage series of treatment facilities that would cost more. The most troubling facility problem was the delaying of construction of contractually obligated sites in order to increase future profit (Olleta, 2007). By delaying construction and having demand rise, the total value of the plant opening in the future was reported to be greater than the profit if it was opened on time.

The private sector was successful in some areas but failed to meet the social development goals that Argentina needs. Private investment surpassed the ability of the previous public sector by increasing the area of infrastructure as well as meeting required water quality and lowering disease/ child mortality rates. Technology introduced increased efficiency drastically and the education given to employees to both run and manage the utility was indispensable to future efficiency. The business models used also provided the groundwork for the utility to run with less corruption and more accountability within the firm’s day to day operation. The private sector was not optimal when it came to decreasing poverty and increasing per capita GDP. Foreign capitol is mainly uninterested in human development and does not want to use money for anything other than making more money. Prices were raised and service, while better than in the previous regime, were not optimal.

Private water and sanitation utilities ended up being better for the people than the previous model but only in the short run. The investments made by the private sector were steps that the public sector in Argentina could not accomplish. By allowing those who required efficiency to make money Argentina opened themselves up to the capitol investment that they needed and the education in efficiency that could be used for a long time to come. Now what needs to take place is for the private firms to be transferred to the public sector, and using the lessons learned in the last twenty years the public sector can act similarly and strive to have zero profit.

While it is “essential to recover the costs of providing people with water in order to manage the demand,” water and sanitation can be delivered at a price that would be equal to the cost; including the cost of future investments. Small towns could receive the clean water needed to fight negative externalities such as pollution from other industry and the poor would be more likely to afford water if overall profit was a non-issue. The public utility should have little or no problems receiving funds if they can continue to operate efficiently and keep status as safe borrowers. Argentina is an excellent example of how private sectors can succeed to some extent when the governments or other co-op public sectors fail, but only in the short run. Long term social development needs to stipulate clear contracts that are just long enough for private investors to recoup costs (they can see it as a safe investment that does not require high payoff since if is low risk). The contracts must also stipulate clear methods for accountability throughout the firm and have methods to enforce the contracts. After the benefits of privatization have been utilized then the public should reclaim the common good and increase investment that has high social benefit and decrease profit to zero.

Galiani, Sebastian, Paul Gertler, and Ernesto Schargrodsky. Water for Life: The Impact of the Privatization of Water Services on Child Mortality. 31 Aug. 2002. Universidad de San Andres, University of California at Berkeley, NBER, Universidad Torcuato Di Tella. 24 Nov. 2008.

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

Regime Uncertainty in British Steel

2010-03-09T21:57:00.000+02:00

I hate to write another post based off Monica Prasad’s book, but the damn thing is just so full of insights that I can’t help. Fabio can have his Skocpol Zone, I’ll take Prasad any day of the week! This one stems from her discussion of the French and British steel industries in the 1950s and 1960s. The private American system was the most productive, the state-run French industry was almost as productive, and the British industry was least productive. Why was this? According to the studies cited by Prasad, much of it had to do with the history of nationalization in Britain. The steel industry was nationalized in 1951, denationalized in 1953, and then renationalized in 1967! By this point, the lag in productivity was huge. According to Alasdair Blair:

This can be attributed to the uncertainty of the individual company managers and owners as to whether their firm would be nationalized again. And with this feeling of uncertainty, there was an unwillingness to adopt the new techniques, as they rightly assumed that the industry would return to government control and that they would not be rewarded for their expenditure by the public purse.

Prasad points out that sometimes either private or public ownership is a better policy than flip-flopping between the two of them. Most libertarian writers put an emphasis on both liberty and the rule of law as requisites for development and growth, but I wonder if they put too much emphasis on the former while neglecting the latter.

Josh McCabe

[Via http://thesociologicalimagination.com]

Paying the rent is just one way of taking care of your spouse

2010-03-09T13:45:00.000+02:00

Much fuss was made over the January release of a Pew Research Center study showing women’s incomes had grown much faster than men’s from 1970 to 2007.

Women increasingly have more education and make more money than their husbands, the headlines shouted.

Can V-Day survive shifting roles?

For some women who earn more than their husbands, more money means more marital problems

Women approaching equality in their careers,  literally and figuratively

That’s the case in our marriage: I have a master’s degree while John has a bachelor’s, and I earn the lion’s share of our household income.

I am friends with enough smart, ambitious women that this arrangement doesn’t seem odd to me. It does break with some deeply held stereotypes. I’m not waiting for John in pearls and heels when he drops his briefcase by the door after a hard day at the office.

I know it does seem strange to some. It must, or we wouldn’t see so many “man bites dog” stories out of this research.

When John and I got engaged, my dad asked me, “Don’t you want to be with someone who can take care of you?” This so deeply offended me that we didn’t speak for weeks, maybe months.

I wasn’t offended by the implied dig at John’s earning potential as much as by the affront to me and my priorities. My father, a man of old-fashioned values, seemed to be implying that my job was just filling time until I could find a breadwinner mate.

I’d put myself through school and worked hard to build my career precisely because no, I did not want to be dependent on a man to provide for me.

I can bring home the (soy) bacon, fry it up in a pan ... in case the embedded video doesn't work for you, click here for a dose of '80s nostalgia from Enjoli

In the decade that’s passed, both my dad and I have come to realize that, in fact, I really do like having married someone who can take care of me, just not in the way he meant it.

John is my number one cheerleader. He also balances the checkbook, goes to the dry cleaner, coordinates with our accountant to get our taxes prepared – all the household details that I happen to be terrible at. He nags me to make my doctor’s appointments and take my vitamins, because I probably wouldn’t do either without him checking up on me.

In some ways, we’ve traded traditional marital roles, with me as the breadwinner and him tending to many of the details of running our home. But I love to cook, he’s building his art business and he retains the important guy duty of dispatching creepy crawly critters while I squeal. So it’s more a redefinition of roles than a direct trade.

Mostly it seems to work for us, though John is itching to find a day job outside the home and I sometimes long to have more time to pursue my creativity. Maybe someday we’ll make that switch, too.

I think the key to our arrangement – and hopefully the other couples studied by Pew – is communication. Regardless of who’s doing what in a marriage, it’s essential to be clear about what your needs are, for yourself and from your mate. John and I have gotten better about this with each year of marriage.

Are you in a couple where the wife earns more or has more education? How do you navigate what that means for traditional gender roles?

—–

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

It's Not What You Don't know. It's What You Are Certain of That Is Not So That Kills Youo

2010-03-09T05:50:00.000+02:00

One of the problems of the AGW group is that their dire warnings simply do not turn out to be tr

Here is a “prediction” by a qualified scientist made in the year 2000, and the actuality as I researched last night.

“However, the warming is so far manifesting itself more in winters which are less cold than in much hotter summers. According to Dr David Viner, a senior research scientist at the climatic research unit (CRU) of the University of East Anglia,within a few years winter snowfall will become “a very rare and exciting event”.

“Children just aren’t going to know what snow is,” he said.

http://www.independent.co.uk/environment/snowfalls-are-now-just-a-thing-of-the-past-724017.html

Heavy snow due to continue all week (2009)

LIVE coverage: England wakes up to snow chaos

In pictures: Snow in England

Heavy snowfalls and icy weather conditions are likely to continue throughout the week, bringing further chaos to the roads and public transport system, the Met Office said today.

http://www.guardian.co.uk/uk/2009/feb/02/snow-london-travel-chaos

CBC News – World – Britain blasted by heavy snow (2010)

Jan 6, 2010 … Heavy snowfall pounding Britain has forced the closure of thousands of schools, disrupted travel and prompted officials to mobilize the army

www.cbc.ca/world/story/2010/01/06/britain-snow-storm.html

Hundreds Rescued As Heavy Snow Slams Britain : NPR(2010)

Jan 6, 2010 … 5, 2010. With up to 4ins (10 cms) of snow due to fall in parts of the … heavy snowfall across large areas of the country, as Britain’s …

www.npr.org/templates/story/story.php?storyId=122270907

So, there is zero correlation between the prediction and 10 years experience.

The British call credit the “never-never” – perhaps the climate predictions need to be termed the “never-never” in this new world.

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

Continuation of last post and what I discovered about the US economic picture - plus students in California demand that oil companies be required to pay taxes to resolve education budget cuts and tuition hikes

2010-03-07T21:32:00.000+02:00

“In February, the civilian labor force participation rate (64.8 percent) and the employment-population ratio (58.5 percent) were little changed. (See table A-1.)”

From –

Last Modified Date: March 05, 2010

http://www.bls.gov/news.release/empsit.nr0.htm

My Note –

Those numbers mean that the real unemployment level in the United States is 35.2% and that doesn’t include the illegal immigrants, students in college who need to have jobs, people who are retired and having to come out of retirement because they lost money in the stock market based pension plans, and people in jail, people in institutions, people who are employed part-time that need to be employed full time to live, etc.)

- Cricketdiane

So, where are economists and financial experts getting their information that leads them to believe we are on a growth curve and recovery now?

***

In the information found about the Federal Reserve’s use of the Beige Book of Economic Numbers – this seems telling -

“The Fed directors and their staffs will use their very long proverbial arms to obtain an economic pulse that can’t be found in any other indicator’s report. They will interview business leaders, bank presidents, members of other Fed boards and hundreds of other informal networks before writing the reports that will be compiled in the Beige Book.”

(from)

http://www.investopedia.com/university/releases/beigebook.asp

***

My Note -

Does that mean these are the written opinions and elicited opinions of people who have every reason to indicate anything but the truth? Could that be possible? It seems pretty evident that is a possibility. I would like to see the Beige Book of Economic Numbers and Federal Reserve papers from 2007 and 2008 because obviously they didn’t know what was presenting itself at that time which now everyone knows are the facts . . .

- cricketdiane

The other thing I’ve noticed is that the process by which businesses reacted to the “downturn” were measures intended and created for a 6-month downturn, maybe workable during a 9-month long recession on the outside. The corporations literally had been taught to raise bonuses, raise profit-forecasts whether there was indication of it or not, raise dividend payouts, raise salaries to corporate executives and to layoff employees as a way to arbitrarily increase profit numbers on the balance sheet when revenues were not actually coming in the door. That only works for a short period of time and doesn’t accurately reflect the liabilities of the corporation which may be undermining the available assets to go forward. When a downturn lasts longer than 6-months, there becomes no way to hide these facts that sales are not occurring, revenues are not coming in, payments on liabilities are going out in striking measures against resources, and that there are no employee skill sets to conduct the business because they were laid off. After a time, those intellectual losses, skill sets lost, and employee loyalty that was lost comes back to haunt the business and the lacking manpower facilities to get the job done in order to make real profits and revenues. It is just a matter of time.

Apparently, the business schools and previous business experiences, expertise, workshops, continuing education, reading, researching, talking, interacting with other business leaders and organizations, and attending large international business leadership conferences did not prepare business executives with a more practical understanding of what to do in the event of a protracted downturn of any kind. They obviously didn’t know what to do beyond this short term process solutions that they used of making the business temporarily look profitable when they were not. Now what? Have new solutions been generated or are they continuing to do what Professor Mitroff suggested in the book he co-authored, “Dirty Rotten Strategies” that he was discussing on CSPAN which is to manage the mess rather than to create solutions? Would anyone be willing to try new solutions or solution combinations that have not been taught to them by a respected business school or used in the three short recessions they have experienced within their lifetimes? Would they be able to construct new solutions that could work or are they just treading water hoping the economic disaster will all be gone tomorrow morning when they wake up?

I think it would be worthwhile to look up something else while I think about it . . .

There was something else I heard on the news yesterday that I thought was very interesting about the student protests about the raises in tuition and education budget cuts – there was a mention by a woman about the fact that California’s crude oil being pumped out of the ground without any return taxes from those oil companies operating in the state. Is that possible? Do these oil companies not pay taxes into the California economy? And how much are they paying for the leases and royalties on the natural resources of California (and the United States) for what they are pumping out of the ground? There was a story earlier last year about the oil companies and the Department of Interior making deals on royalties and leases for drilling which had in previous years, not been done in cash – but rather by “in kind” trades. How was that changed with the Obama administration’s demand that it be changed? Was it changed? How are the drilling, mining and crude oil drilling, in particular – being done in California to return a fair market value for those resources and economic opportunities? How much is being paid for the oil companies by the state and by the Federal government? Is it possible that the money to restore education and universal tuition-free university education for all the adults in California exist in simple changes to how the oil companies do get taxed rather than not at all in that state while taking the national resources that belong to us all? That would be interesting to know, I’ll look it up while thinking about the macroeconomic statistics I found, (listed on the post before this one and at the top of this post.)

- cricketdiane

***

(I’ll have to look up the CNN transcript from yesterday with the students talking about the oil companies paying taxes in the state of California as a solution to the education budget cuts and tuition hikes at California Universities and California state colleges.)

***

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

Thinking like an economist ....

2010-03-07T13:49:00.000+02:00

One way from Greg Mankiw.

In fact, being an economist gets in the way of seeing things normally. Last night I was treated to a visit to the Olivier to see an 1841 farce called National Assurance. Richard Briers, Fiona Shaw and above all Simon Russell Beale were excellent, and the play surprisingly feisty for a period I had always thought was more staid and conventional. The air of sexual licence in particular was more what I would have expected 60 years later, at least*. Or 60 years before

But as an amateur economist and historian I could not help seeing the play through different eyes. It had many of the classic ingredients of comedy from that century. Aging squires, inheritance issues, a monstrous class structure, marriage and the capricious Will as the only way fossilised property ever moved. And all I could think about was the industrial revolution and seething social change going on beyond the walls of the Play and seeping into many of its plot structures.

For example, the indebtedness of both father and son – with clamouring Jewish money lenders outside the doors – for me signified the long march towards insolvency of this landed class, no longer able to produce goods of sufficient value to maintain the same position. Industrialisation must have driven wages up and up; that aristocratic playboy leisure-seeking needs a lot of servants, and their wages are being bid higher and higher by ever better alternatives. The commodities sold by the country are being undercut by a growing global market in grain. Urbanisation is racing ahead – Britain at the forefront for over a century by 1841.

Soon the wide-eyed wonder and contempt of the city types at rural life would seems even more contrived, because it would become just a train ride away.

I loved the moment at the end when Dazzle, the dissolute companion of the heir, is asked who he is – having claimed all through a distant relationship with everyone (Adam and Eve, he winks). He replies that he has no earthly clue – like half the world. Having inveigled his way through life by faking a chummy acquaintance with the landed and noble, he has no shame in admitting this.

I thoroughly recommend it – for economic history nerds or just those wanting a laugh. But I suspect it is sold out for the entire run. What recession, eh

*then I am no expert

[Via http://freethinkingeconomist.com]

Colour of Money

2010-03-06T21:48:00.000+02:00

Americans gripe that Canadian money looked like “Monopoly money” and now Canadians are on record that plastic bills like the kind Australia uses, look like “Monopoly money”. Is currency snootiness universal?

The Bank of Canada is looking at changing Canada’s paper currency to flimsy plastic bills instead. They’ll last longer, and still work even if accidentally dried with clothes. They are also harder to counterfeit, for the time being. I’ve seen Australian money, and I welcome the change. I’d also welcome them dropping our penny from circulation. We’d teach Canadians how to round up, and that inflation has made the penny pretty much valueless unless you’re dealing with dozens of them at a time.

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

IT and Management

2010-03-06T13:32:00.000+02:00

(written by: Willy Yanto Wijaya)

The lecture about IT and Management was given by Prof. Jiro Kokuryo from the Graduate School of Media and Governance, Keio University. There are several interesting points and ideas which can be extracted from this lecture, which highlighted the title “Understanding the Information Society”.

The business dynamics of the Information Technology world had begun in 1970’s with the development of dynamic improvement in processor capability. In 1972, microprocessor had the capability only about 8 bit and 200 kHz. In about three decades later (2007), it has achieved 64 bit and 2 GHz. This is really a big leap. On the other hand, the software development at that time was just progressing very slowly. So, there’s a big gap between the hardware and software development. Then, what does this mean?

If this kind of bottle-neck happens, then software is the key determinant of the information system design and development. This gap also means a business potential and market segment that could be cultivated further. Moreover, since the construction of Open Architecture, which means the possibility of developing software or application for various platform and hardware, the economics of software will become more challenging and dynamics.

What are essential points in Software Economics? There are two main features that have become common characteristics in software economics. Firstly is the increasing higher fixed cost of development. To develop a new software, the initial capital is usually quite big; this is why we call it higher fixed cost of development. However, this feature should not discourage us; we still have the second feature i.e. low marginal cost of delivery, especially after the emerging of the internet (World Wide Web). What does this second feature imply? It implies that after you reach the Break Even Point (your sale revenue has covered your fixed or total cost), substantially you will never get any more losses; the profit of the software sale keeps going on while your variable cost is almost zero or insignificant. It was this very important characteristic of software economics that made Bill Gates become the richest man in the world.

From the Fig.1, we can see that if we have higher Fixed Cost (FC’), then we have higher Total Cost (TC’) and the Break Even Point (BEP) move further to the right-side. This means that higher Fixed Cost will pose higher risk (longer BEP). While in the Fig.2, we can see that higher Variable Cost (VC’) will also cause higher Total Cost (TC’), which also result a little movement of BEP to the right-side. Besides, as we can see in Fig.2, there’s also a gradient change of the TC’ which means that after the break-point (BEP), the potential profit that could be gained become less. This is substantially a disadvantage of higher Variable Cost.

Most of the software businesses possess the characteristics of Fig.1: higher fixed cost but less and almost insignificant variable cost (the gradient of the VC is almost zero). Therefore, whenever the software business reaches the BEP, very high profit could be achieved.

Then, how to run the software business or marketing? Currently, we can see there are several business models that address the software economics. They are:

Unbundled Software (made to order)
Package Software (license)
Subscription Model
Pay per Use (service model)
Advertisement Model (free for end users)

Each model has its strong and weak points. Feasibility study and analysis should be made before choosing the models. For example, if your products have a very small (limited) market segment, then certainly the advertisement model will not be suitable for you.

Another feature which becomes very interesting in the information business and society is the network externality effects (more users, greater value). This is almost similar to the economy of scale (quantity). An interesting example is to say, the land-line telecommunication company (NTT).

We can see here that if only one customer exist, the market has no value (for the telecommunication company). When there are two customers, we have one line (one value). Three customers will yield three lines; four customers mean six lines (six values). The value of the market will increase exponentially along with the linier increase in the number of customers. This is what we call the ‘network externality’. Bigger size of the market will produce incredible value, just like the Snow Balling effect.

One evident example of this effect in the information society is Wikipedia. How the interactions among many elements as well as the self-organizing interactions can lead to unexpected outcome.

In my opinion, these unique characteristics of information society and features should be addressed properly, for it will give significant influences in our life in the future. These influences might mean “business potential” for us; however, it could mean “a threat” as well.

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

New Media, New Habits: Play To Win

2010-03-06T05:38:00.000+02:00

The media market is in a transition stage and this stage that will not be brief. In this transition the media market (Movies, Books, Newspapers, Magazines) is migrating from the business of “physical” to the business of “content”. A key factor that media companies tend to ignore is that the shift from “physical” to “content” is demand-led, that is, consumer and their consumption habits are pushing the industry to adapt. Unfortunately, the media industry has been fighting this market trend and has had trouble adapting. As in any other industry, fighting a trend is the worst business strategy. Instead, the media industry should play to win in the new market context.

For perspective, today, most newspapers keep their printed publication, additionally have an online version, most likely with less quality content that the printed version. Today, most of their distribution efforts are still behind the printed version. This strategy is totally against the market trend, and it is usually driven by the fear of cannibalizing print with online. Obviously, newspapers stakeholders don’t what their current cash-cow, print, to die.

The big challenge comes when the business’ cash-cow is not longer relevant for the market. Then, new strategies should arise. Media companies need to think of new bold strategies. Playing in the middle ground is not efficient, the organization has not focus on where to play, cost structure is not efficient, consumers start disengaging, etc. At the end, as in any economic model, inefficient players are eventually kicked out of the market.

The strategy is simple: Listen, listen, listen… to the market trends and play to win with the trend.

This article is inspired by Kathy Gill’s blog post “The Case for Digital Subscriptions”

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

House Preparing to Push Through Economic Incentives Bill on Friday Vote?

2010-03-04T21:48:00.000+02:00

The House’s omnibus economic incentives bill, H 4478, passed on second reading today. By a vote of 105 to 9. This should come as no surprise given that the measure has 108 cosponsors. It also speaks to the need to constantly be watching what is going on down here in Columbia.

… which is apparently what lawmakers are hoping we are not doing. By all accounts, the House is going to meet tomorrow to push the bill through on third reading. Yet Fridays at the Legislature are usually reserved for local matters.

But if this bill is such a great idea, why push it through under a dubious Friday vote? What we need is more – not less transparency – when it comes to economic incentives. Stay tuned for more updates. We’ll be there bright and early – watching and recording – tomorrow morning.

[Via http://palmettoinsider.com]

Weak open seen for stocks

2010-03-04T13:26:00.000+02:00

U.S. stocks were expected to open lower Thursday as investors brace for key employment data.

Weak open seen for stocks

Thu, 04 Mar 2010 12:21:11 GMT

If literally amazing to me that every single day more and more news is being presented. That confirms everything I have been saying for 40 years. And at the same time, every single day the major players in the American economic system. And around the world are demonstrating that they would rather murder their own children and kill them dead in the streets than ever to admit that someone like myself might actually know what I’m talking about. Not a problem. As my economic fact sheet below, clearly shows, it was in May of 2009 that accurately predicted that the American market system would lose $800 trillion of market value. And it did.

So again, it doesn’t really matter if the financial community wants to behave like a bunch of stupid bastards, because that’s what they’re good at. The fact of the matter is that as I’ve already explained. No one can take away from me that I have owned four businesses. And I’ve been doing financial analysis for 42 years. Just like no one can take away from me that I was co-owner with my father of pioneer linen supply company here in Cleveland. And that basically means that I do know what I’m talking about when it comes to financial analysis. And again, these companies are in fact exercising inflationary spending practices pursuant to their compensation levels with their upper-level management and their executives. And these compensation levels are in fact causing financial disparity inside the company because of how low the hourly and lower level management personnel are paid as compared to these upper-level management and executive employees. And so as a result, as I’ve are explained this is causing the market to be much more volatile and fragile.

Now doesn’t matter. I understand that most of the Internet doesn’t like me or the Maschke family, because most of the Internet doesn’t like Jews and most of the Internet doesn’t like the fact that a Jewish family was actually one of the founding families of the United States and doesn’t like the fact that a Jewish family was actually one of the founding families of Cleveland Ohio, but that’s not my fault. We were.

Just like it’s not my fault that the economic community in United States is made up of nothing but a bunch of filthy lying bastards who don’t have any God damn honesty in their souls whatsoever. That’s not my fault either. So if you want to go ahead and continue to ruin the system. And that’s exactly what to get because that is exactly what you are doing.

In so again, we will see market do exactly what I have said it is going to do. Because I have never once been wrong in any financial projection I’ve ever done in 42 years. And a matter what anyone else wants to say in the economic community throughout the United States or the world. What I’m saying is in fact, I have never once been wrong in any financial projection I’ve ever done. That doesn’t mean I’m better than anyone it just means I’m very good at what I do, which is financial analysis.

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.

Cardoza on Civics: Understanding What's Going On In America and Why

2010-03-04T05:50:00.000+02:00

Understanding the Relationship Between Politics and Economics

Politics: To have a society, people must live together. When people live together in relative harmony, it is called a “civilization.” For civilization to exist, it must be civil (or you have barbarism). Civility is based on mutual understandings and boundaries of well-being (“civil order”). “Order” (Civil Society) becomes a reality when compulsory expectations are expected OF everyone and enforced ON everyone—and this is what we call “Law.” The need for “Law” is what creates Politics. Politics is designed to establish order and preserve justice and equity. Government is the collective body or bodies that oversee the political system to ensure civilization.

Economics: When people live together in society, they can either live in a meager, primitive, and simple existence (usually agrarian or nomadic societies) OR they can seek to live in a more sophisticated society where the standard of living (options, choices, comforts, entertainment, etc.) is higher and comfort is increased. **Because increased comfort and a higher standard of living creates greater civil stability and well-being, governments seek to enable this higher standard of living in order to avoid chaos and the breakdown of civilization and government (anarchy). A higher standard of living is accomplished to a large degree through economics. Economics, therefore, is the production, distribution, and consumption of goods and services that creates the opportunity for a higher standard of living just described. IN THESE WAYS, politics and economics are intertwined. And it is government that regulates economics THROUGH politics to help ensure people’s well-being and a higher standard of living in order to build the best society possible.

Understanding Economic Theory and Political Theory

So for government to exist, politics and economics must exist. But there’s not only “one way” to think about politics and economics. So different “political theories” (often called Political Science) and different “economic theories” exist. And it happens that, usually, certain political theories’ goals are best accomplished by corresponding economic theories because they are built on common ideals or goals.

That’s why—as a rule—that Representative Democracy (a “Republic” like the US) generally uses Free-Market Capitalism as its economic theory (since it values entrepreneurism as the way to help raise people’s standard of living). Capitalism places responsibility on individuals, as does Democracy. That’s because Democratic Government and Capitalism believes the individual should be motivated to take personal responsibility for their own well-being and that of their family and fellow man. And when each person with the ability does the same, that creates a surplus—which meets the needs of those who genuinely cannot help themselves. But those who refuse to work and do not take responsibility—even though they are able—are allowed to do without. Only those who genuinely need the help are able to get it in this type of society.

Socialism, on the other hand, de-emphasizes the responsibility of individuals and places that responsibility for the welfare of the individual on the government to produce that higher standard of living for the people. In this way, the government must provide money for the resources needed by the people. It does so by compelling people to provide the government with the money to do this—and government receives money through taxes. Those taxes are paid to the central government in order to hire people to maintain and oversee programs that provide for people. And in a Socialist government, as Karl Marx said, each person gives “according to his ability” and each person receives “according to his need.” WHAT THAT MEANS is that those “with more” are compelled to give more to people who need more—so that those who do not have all they want or need will have it.

The Point?

In summary, Capitalists and Marxists disagree on HOW to maintain a civilization and provide for its peoples’ standard of living. And Democratic-Republic Governments disagree with Socialists on the way to build that society—through compelling people to give to the government so everyone will have ‘about the same’ OR through expecting people to take responsibility (if they are able) for themselves… or to do without.

That is why Democracy-Capitalism is about personal responsibility, low taxes, and small government. And that’s why Socialism-Marxism is about government responsibility, bigger government, and higher taxes. They are simply two ways of doing things.

The Choice

These completely opposite approaches on the role of government, politics and economics are what is causing the radical disagreements in the United States right now. The question is “Do we create a ‘Nanny State’ where people are taken care of by the government, even though corruption, waste, and excessively spending tax-payers’ money occurs OR do we create a ‘Responsibility State’ where people who are able to do so are required to take care of themselves and the fruit of their labor takes care of those who cannot take care of themselves until they are able or indefinitely?”

The Fundamental Problem

The major problem that exists in our nation’s politics today is that Democrats are being driven by the extreme left wing of their political party—and that party (led by the U.S. President) is driven by hard left ideologues who are more SOCIALIST as I have described above. Prior to this time in history, Democrats and Republicans have disagreed “to a degree” but could compromise BECAUSE THEIR POSITIONS WERE RELATIVELY CLOSE TOGETHER. Now, because “Progressives” in the Democratic Party are more Socialist in their perspective, we have a culture war—and the MEANS and the ENDS are so radically opposite that there is no middle ground.

Summary

That is why this is such a fierce battle. And this entire discussion explains why I feel so deeply about these issues: Because the American way of life is being threatened by changes in these political and economic theories. And if America practices the political and economic theories of Socialism and Marxism, the outcome will be what it has been in EVERY other such civilization: decline and death of those civilizations.

Note: While America has flourished into the greatest civilization the world has ever known in only 200 years under Capitalism and a Republic, since Marxism/Socialism was introduced in the 1800s, no genuinely Marxist economy in history has survived more than 70 years (Soviet Union). But today’s Progressives want to ‘progress’ past Capitalism to a doomed system. There is on earth NO NATION under even a Socialist approach whose society is superior to the United States—and that is why I am so forceful in my opposition to it—because I do not want my children and their children to live in a society in decline or hardship after my sacrifice and the sacrifice of all Americans in the last 200 years.

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

Stocks cling to gains

2010-03-02T21:52:00.000+02:00

Stocks ended slightly higher Tuesday, but gave up earlier gains, following February auto sales, some upbeat company news and amid bets that Greece won’t default on its debt.

Stocks cling to gains

Tue, 02 Mar 2010 21:14:58 GMT

Well, I’m not good at denying that the stocks actually held on for dear life, to try and maintain some degree of gain for the day. Because actually that’s what we saw. We noticed that the stock market in the US ended up about two points up. But the problem is, again, that the corporate sector in the United States is not doing anything to resolve the problems of inflationary spending pursuant to the upper-level management and executive compensation packages. And until those issues are dealt with no real economic recovery is going to take place. Because the internal dynamics of these companies are being based on inflationary spending practices within their own companies. And that coupled with the fact that these companies don’t feel they have to stay in the United States in order to be able to offer employment to the people in the United States, pretty much precludes people in the United States from being able to work at most of these companies thereby being able to afford to pay for some of the products these companies are selling.

So consequently, it’s just a really difficult issue because nobody wants to take the bull by the horns and force these corporations to behave more responsibly. And yet they have to if we as an economic entity here in these United States are going to survive.

In the American market isn’t the only one that’s having trouble. If one market throughout the major global economic system has a kind of cascade capitulation or a failure. You are talking about specie reallocation and if that happens in one of the global markets. That’s going to affect other global markets, meaning it could affect the United States and the United States market is already on very tenuous ground. So again, it falls upon the government of the United States. And it falls on these business owners who are running these corporations to take a more responsible attitude and stop trying to steal as much money from their companies and from the people of these United States as possible.

But again, it’s very difficult because the people in the corporate sector of the United States are not really the most honest people. And they don’t really care very much about what happens to anyone as long as they get the money they want.

So again, we are back to exactly where we were before. And as I said, my economic fact sheet, which is just below this dictation is correct as of February 2010. And between that and my financial analysis of the global economic system. I’m trying to provide enough information to help people to ask better questions of each other and themselves and those who they interact with so that we can as an American population and the global market system throughout the world begin to realize that if we as a human species Your Honor don’t work out better ways to be able to do business with each other. We are not going to have an economic system to be able to do business with. Because the system will in fact fail. And at the system fails we’re through.

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.

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

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.

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.

Latest US GDP Figures

2010-03-02T05:46:00.000+02:00

Growth in final GDP hides disturbing weaknesses in economy

The U.S. GDP grew at an annual rate of 5.9% in the last quarter of 2009 which may look good at first glance, but when we dig a little deeper, we find some concerns about the implications for sustainable growth. A large fraction of this reported growth came from businesses selling off accumulated inventories, which has more to say about past production than current. Exports were also a significant source of fourth quarter growth, driven in large part by a weak dollar.

Weak dollar both helps and hurts the economy

Of course, a weak dollar is a very mixed blessing for the economy, and is hardly a sign of a strong or recovering economy.

Real residential fixed investment increased 5.0 percent, helped along by the extension of the home purchase tax credits from the federal government.

New housing helps spur growth in GDP

Real nonresidential fixed investment increased 6.5 percent. This figure nets out nonresidential structures, which decreased at a troubling rate of 13.9 percent, and equipment and software, which increased 18.2 percent. Investment in equipment and software consists of capital account purchases of new machinery, equipment, furniture, vehicles, and computer software; dealers’ margins on sales of used equipment; and net purchases of used equipment from government agencies, persons, and the rest of the world. Own-account production of computer software is also included, which is production performed by a businesses or government for its own use.

Again, the underlying figures show that those variables most associated with building a sustainable productive capital base for the economy – nonresidential fixed investment –are declining at an alarming rate. This, combined with a 9.7% unemployment rate and the specter of rising debt levels, energy prices, and taxes, paints a picture of a slow to non-existent recovery to a robust economy any time in the next year.

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

[Via http://learningfromdogs.com]

Smart meters meet political utilities

2010-02-28T05:42:00.000+02:00

Last week, the WSJ ran a nice piece on “smart meters” and energy utilities (“What Utilities Have Learned from Smart-Meter Tests … and Why They Aren’t Putting Those Lessons to Use“). Some interesting stuff. First, a distinction between (information about) quantity and (information conveyed by) price is worth bearing in mind.

By making variable pricing plans possible, smart meters are expected to play a big role in getting customers to reduce their peak-hour energy consumption, a key goal of utility executives and policy makers. Electricity grids are sized to meet the maximum electricity need, so a drop in peak demand would let utilities operate with fewer expensive power plants, meaning they could provide electricity at a lower cost and with less pollution.

In some ways, this is what it’s all about, eh? Bringing down usage and production costs, not so much about smarter consumers.

Utilities have run dozens of pilot tests of digital meters and found that people cut power consumption the most when faced with higher peak-hour rates. But utility executives and regulators have been reluctant to implement rate plans that penalize people for too much energy use, fearing that if customers associate smart meters with higher bills, they will stall the technology’s advance just as it is gaining traction. Only about 5% of U.S. electric meters are “smart” today, according to the U.S. Department of Energy, but that figure is expected to grow to about one-third in the next five years.

Pretty straightforward politics, that is. But it is an odd conflation to mix smart metering with peak-load pricing.

So, many utilities are trying an approach that is less controversial, but also less effective: offering rebates to customers who conserve energy in key periods of the day. By doing things like turning off clothes dryers and adjusting air conditioners on hot summer afternoons, customers earn credits that can reduce their electricity bills.

This example is also pretty intriguing, begging a citation or two, as it’s curious to think a price rebate for nonuse isn’t equivalent to a price hike for use … unless there’s a substantial income effect or some more psychological factors. The old ‘baby Varian’ textbook has an interesting example that’s like this, if I remember correctly. “Less effective” isn’t what comes to mind. Less costly for consumers, perhaps…

Now here’s a funny story about bad planning rather than bad timing:

Pacific Gas & Electric Co., a unit of PG&E Corp., got a taste of the public-relations risk last summer when it installed smart meters in Bakersfield, Calif., as part of a broad upgrade in its Northern California service territory. When customers—who weren’t participating in any sort of experimental rate plan—received dramatically higher bills shortly afterward, they blamed the meters for what they assumed was faulty billing. The San Francisco utility investigated and concluded that the meters were functioning properly. It found that the higher bills were simply a case of unfortunate timing: An increase in conventional rates had taken effect just ahead of unseasonably hot temperatures.

The seasons are fairly predictable, although temperatures might not be. Sounds to me like heading into the summer season is just a bad plan.

PG&E now has a voluntary program in which customers agree to pay higher peak rates of 60 cents a kilowatt-hour for no more than 15 days a year, in exchange for a discount of three cents a kilowatt-hour for electricity used at other times. So far some 26,000 customers have signed up.

Sounds like the textbook approach. Why is this so tough to figure out?…

Pepco Holdings Inc. recently did a pilot test in Washington, D.C., of three rate plans designed to gauge how customers respond to different price signals. One plan pegged the price, which ranged from a penny to 37 cents a kilowatt-hour, to the wholesale cost of electricity. One charged a “critical peak price” of 75 cents a kilowatt-hour during certain hours on a handful of days, and 11 cents per kwh at other times. The final plan gave customers 75 cents for each kilowatt-hour of energy saved and charged 11 cents per kwh for power used.

Results showed that people responded most when threatened with the 75-cent-per-kwh peak pricing. Those customers cut their overall energy consumption between 22% and 34%, depending on whether they also had programmable thermostats that could automatically change temperature settings. Customers offered rebates reduced their usage 9% to 15%—again, with the deeper cuts among those who had smart thermostats.

OK. Time to calculate some elasticities. Supposing that the $0.75 was double the peak scarcity price of $0.37, and a 100% increase in price got you a 22-34% reduction in quantity consumed, we’re looking at a short-run price elasticity of demand of mere -0.22 to -0.34. Not out of line with the literature, and not terribly surprising. Except that my back-of-the-envelope math is wildly simplifying and like waaay off. Prices only doubled for the group for a few hours on a few days. Thus, their overall price didn’t really double, but only doubled for a short spell. Yet, despite that only momentary price spike, their overall consumption still fell by ~30%. This looks like demand is much, much more elastic than -0.3!

Many experts feel that not enough research has been done to protect those who aren’t able to change their electricity usage.

Sure. Personally, in this context, I’m also concerned about those who are able to change their usage. Some people may be choosing to cut back on things that we don’t want them to (e.g., A/C during heat waves, TV during the DailyShow).

Last summer, Connecticut Light & Power Co., a subsidiary of Northeast Utilities Service Co., gave new meters to 3,000 residential and business customers, testing three types of rates. Like other utilities, it found that homes facing the highest peak-hour pricing—$1.60 per kwh at certain times—responded the most, cutting peak use 16% to 23%, depending on whether they had other aids like smart thermostats. Commercial customers, in a similar test, cut their demand far less, only 7%.

Ah, good. Different users have different elasticities — and apparently commercial customers had more inelastic demands. I suspect that’s not too surprising, especially if peak times are during regular business hours and considerable residential usage can be flexibly reallocated during the day.

But the utility also concluded that it wouldn’t be fair to really crank up peak pricing until homeowners have greater access to automation tools such as smart appliances and controllers. In the future, devices will contain computer chips and software so they can go into energy-saving mode in response to a signal sent from the utility or another energy manager that higher prices are kicking in.

I’m thinking “where my iPhone app for this?”….

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

Saturday LVIII: 27 February 2010

2010-02-27T21:55:00.000+02:00

I hope that I can still count my resolution of watching a movie every weekend complete. I can’t watch mine this week because my sister took it to college a whole state away. I think that’s a good enough reason. I was supposed to watch The Purple Rose of Cairo, but, alas, I cannot.

I did, however, listen to my album – Jim Croce’s debut album (which I didn’t know when I bought it) – Facets. It’s good. It’s a bit more raw-sounding than his later work, but still good nonetheless. It’s a bit echo-y, but I think it benefits from that. It’s gives it a more esoteric quality. Whatever “esoteric” means. “Special, rare, or unusual interest” Thank you, Noah Webster.

I’m starting to think that perhaps this deal of listening to a different album every week (not to mention listening to all 6,000+ songs on my Zune before 2010 is over) is starting to have an adverse effect on me. I’m starting to think that I actually have musical skill. My basic prerogative is just to write a few stupid songs and have some fun with it. That’s it. Maybe though, my stupid little songs are better than what’s out there now. I don’t know. Again, I’m just entertaining stupid dreams that I have.

In other news, I have only one day left of my current classes. Monday the last day for AP English and German. Well, except for the two study sessions and AP test. I can take that though. I’ve had most of my finals. I have only physics to do on Monday. Then I get new classes:

Psychology 2
Economics
Expository Writing
French II 2
Physics 2

I had to decide on the way I’m pronouncing economics. There are two pronunciations, and I’ve used them interchangeably thus far. However, I’m choosing one over the other now. I pronounce it so that it sounds like “Eek! A nomix!” That’s the whole reasoning for the pronounciation – so that it would also sound like I’m scared of some terrible monster – a nomix. I tried to illustrate what a nomix would look like on the back of my psychology notes I think back in January, but it didn’t turn out too well. I’ll have to try again.

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

Climate, EU Commission President Barroso calls on Europe leaders for more actions

2010-02-27T13:24:00.000+02:00

President Barroso has written to EU Heads of State and Government informing them of the next steps in the EU Commission’s work on climate action. in his letter, Mr. Barroso underlines that the international process needs to continue, building on what could be agreed in Copenhagen and finding new ways to instil trust back into the process. He states that an important element in the strategy is the implementation of the fast start financing for developing countries agreed in December.

The core goal must be to bring all partners closer to the EU’s ambitions and commitment to a multilateral agreement. President Barroso has therefore asked Commissioner Hedegaard to undertake a consultation of key international partners to find new ways to reinvigorate the international process. President Barroso will feed this first assessment into the Spring European Council and then in full into the Ministerial level negotiations and the June European Council.

President Barroso will discuss with President of the European Council, Herman Van Rompuy on how best to prepare the discussions in the European Council and how to ensure a powerful and unified EU voice on these critical issues for the future.

“Working together to maintain our ambitions on climate change will remain one of our most important challenges for this year. Since we did not have time to discuss this at our meeting last week I would like to share some thoughts on the work going on in the Commission as I believe we should prepare well the important decisions ahead of us.

In fact if the European Union does not take the initiative we may end up driven by the initiatives of others.

Most of us were in Copenhagen, and I think none of us were satisfied with the outcome. However, Copenhagen was a reality check. We had hoped that leading by example, and our commitment to step up our efforts to 30%, would be enough to bring others on board. This did not happen. But this is not the time for the EU to start doubting its commitments. This would be a mistake.

We need to show that we have not given up on our ambitions, even if many of our partners found it easier to limit themselves to the lowest common denominator. We should rather show our commitment to press ahead with delivery – implementing our climate and energy package showing how tackling climate change is a dynamic element in a strategy for growth by creating jobs and boosting energy security under the Europe 2020 approach that I presented and we discussed last week.

Besides the internal dimension of our work, the international front is as important as ever to tackling the threat of climate change. We need the international process to continue, building on what we could agree in the Copenhagen Accord and finding new ways to instil trust back into the process.

An important element in this strategy should be the implementation of the fast start financing we have committed to last December. We should not forget that those who were working more closely with us in Copenhagen were the developing countries, particularly the poorest and most vulnerable.

But our core goal must be to bring all partners closer to our own ambitions and to our commitment to a multilateral agreement. Copenhagen showed us just how tough it will be. Hence if we are to progress, we have to rethink our approach to these partners.

I have therefore asked Connie Hedegaard, the Commissioner for Climate Action, to undertake a consultation of key international partners to find ways to reinvigorate the international process. I would hope to have some first thoughts by the Spring European Council, and then to feed the results in full into the Ministerial level negotiations announced by Chancellor Merkel and the June European Council. I would of course hope that this process can also benefit from your own reflections on the direction of partners’ thinking.

The work we are already doing to tackle climate change can act as a powerful lever for others to follow – but it must be seen as a genuinely collective approach. I will be discussing with Herman Van Rompuy the best way to address these elements in March as well as how we can ensure a powerful and unified EU voice on these critical issues for the future.”

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

Summary Box: Live Nation 4Q losses shrink

2010-02-27T05:33:00.000+02:00

LOSSES SHRINK: Higher ticket fees and the lack of large impairment charges helped fourth-quarter losses shrink at Live Nation Entertainment Inc. Live Nation’s operating losses fell to $64 million from $323 million, while merger partner Ticketmaster turned a $35 million operating profit, reversing a $1.07 billion loss.

REGULATORY HEADWINDS: Merger conditions costing $20 million this year will mean adjusted operating profits will be flat to down in 2010 personal humidifier.

FUTURE OPPORTUNITIES: The combined concert company hopes to benefit from paperless ticketing, dynamic pricing where consumers can pick the seat they want, and selling music and merchandise with tickets.

Summary Box: Live Nation 4Q losses shrink

Hot News:

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

Senate Pushes Sembler Corporate Welfare Bill to Early Vote

2010-02-25T21:55:00.000+02:00

Today the Senate took action to fast-track legislation giving more than $100 million in taxpayer funded incentives to The Sembler Co., a Florida-based developer, for a planned shopping mall in Jasper County. The Senate voted to place the bill on “Special Order,” which means that the legislation is now in a top priority position to be taken up by the Senate. All bills voted on under Special Order must be recorded votes.

Costs of the incentive package for the new development continue to be unclear: ranging from a low of $22.5 million to as much as $174.5 million in tax breaks over 15 years. If Sembler is anything like the Boeing package legislators approved in October, the cost to taxpayers is probably being underestimated. (Read here for why future incentives deals should be capped so the costs are known upfront.)

Lawmakers who support the incentive package for Sembler are pushing for the quick vote in spite of vocal opposition to the taxpayer-funded giveaway:

The Policy Council and the S.C. Coastal Conservation League issued a joint statement raising economic and environmental concerns.
A series of reports in The Nerve raised questions about the development, and the developer.
The Beaufort County Council (which shares part of the land sited for the project) voted against the deal.
An analysis by College of Charleston economist Peter Calcagno projected that the Sembler tax incentives are unlikely to benefit South Carolina’s economy, or create new jobs.
Even the state of South Carolina itself—by way of a report by the state’s chief economist, William Gillespie—concluded that the megamall is unlikely to increase overall sales, but would instead shift sales from existing retailers

A decade of failed experimentation in government-driven economic development, or the fact that taxpayers are being asked to subsidize their competition, ought to be enough to dissuade lawmakers—but the real issue with Sembler is less about economics and more about corporate lobbying and political connections.

[Via http://palmettoinsider.com]

Comments on Dan's article

2010-02-25T13:33:00.000+02:00

I just posted this in the comments section of Dan’s article to which Travis just referred:

========================

1. Caps on interest rates will cause credit rationing – meaning limiting access to credit. This means that for all of the examples of people stuck with high interest credit card debt, you need the alternate scenario to be what their situation would have been if they had no way to get a credit card at all. The alternate scenario is not a credit card at 10%. For some, this is a feature, not a bug (i.e. living beyond their means) but for others (just trying to pay their bills) this is a personal tragedy involving eviction, loss of utilities, etc. Is that better or worse than what we have now?

2. Usury can only exist in the presence of market power or collusion. If many banks across the country are charging about the same rate to the same people, I’m more inclined to call that a market rate, otherwise one of these banks could lower it from 21% to 19%, advertise and get all of the ‘profitable’ customers. Those who claim a high interest rate is usury need to explain why this isn’t happening. Are the big banks colluding? If a high risk borrower with a lot of debt and a 21% interest rate is so profitable, why doesn’t a small local bank then offer 19% to steal them away and make the profit? There are, literally, thousands of banks in the US, so I have difficulty believing that market power exists in setting interest rates, thus I have difficulty calling it usury.

3. The reason why I am opposed to the actual setting of an interest rate cap is that I think we will take the most marginalized and move them from a high market interest rate to a true situation of usury. When someone cannot go to the market to get a loan, and they need money to pay their bills, they go to more, ahem, ‘creative’ means – i.e. illegal. *Then* you have market power and usury. Tony Soprano can charge whatever interest rate he likes and he doesn’t use actuarial tables. This happens because we limit the interest rates banks can legally charge, then the highest risk people are denied credit altogether. Those who are truly in need either don’t pay their bills and are evicted, or they go to payday lenders and loan sharks. I’d rather have the status quo.

Now, I have no problem in raising awareness about interest rates and the concept of usury. Re-introducing it to our vocabulary is a good idea in my opinion. Actually setting caps on interest rates is a bad idea.

What do I propose instead?

1. Let business be business and charity be charity. We, the church, should steal their customers. People living beyond their means need financial counseling and the act of discipline and contrition in paying off the debt they got themselves into is probably a good thing. People truly in need the church needs to help pay their bills without debt – as a previous commenter noted, this isn’t sustainable for them anyway.

2. We need to advocate for education and jobs. People with a steady income are generally lower credit risk and get lower rates for short term borrowing.

3. Address the materialism and other idols we know exist in our communities. Many Americans do live beyond their means on cheap credit. Even for those with manageable interest rates, this is not good for their soul.

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

Filed Under: I Guess This Settles THAT!

2010-02-25T05:34:00.000+02:00

“WASHINGTON (Reuters) – President Barack Obama launched a vigorous defense of his economic agenda on Wednesday, rejecting critics who say it amounts to “socialism” and insisting his policies would boost U.S. competitiveness.

“Contrary to the claims of some of my critics, I am an ardent believer in the free market,” Obama said in prepared remarks to the Business Roundtable, a group of top corporate executives.” (Unquote)

The President’s concept of “Free Market” differs vastly from mine.

In a “free market” would government own Chrysler? (I think not!)

In a “free market” would government own GM? (I think not!)

In a “free market” would government own AIG? (I think not!)

In a “free market” would government own Fannie Mae? (I think not!)

In a “free market” would government own Freddie Mac? (I think not!)

(List is incomplete…but you get the idea.)

All of these, and more were seized in the last year!

Now it is possible that blow-back is causing the President to slow the progress of Chavez-like seizures, but it would not be too far from reality to refer to the President as President Hugo Obama.

Now I understand that the uber-leftists will say that the economy needed a strong hand, and it further needs stronger regulation – but this is not “regulation” – it is, literally SEIZURE!

Unless, of course you want to end torture of terrorists and commence torture of the English language – but that is exactly what lawyers do.

Congenitally.

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

Job market in distress

2010-02-23T21:55:00.000+02:00

Tossing my resume into the job search recently has shown me just how strange the job market has become. While I’m normally a technology advocate, you can’t solve social problems with technology. I used to be disgusted at the idea of “resume padding”. As it turns out, it seems those people are the ones rewarded. Deserved or not, the resume padders are the winners these days. With the hiring manager taking less and less role in the search process, the job is often left to computerized searches and HR professionals who don’t know the difference between a qualified candidate and one who simply puts keywords on his resume.

Add to this the job qualification inflation, where managers place any possible skill they can think of as required, and you get jobs requirements that no one person can possibly match. In come the resume padders who litter the resume with any technology they have ever brushed against and the only ones who match are those who often have the least experience where you really need it. This of course, encourages more people to pad resumes and more managers to inflate requirements.

Of course resume padding isn’t the only reason managers inflate requirements. I have seen more than a few managers create an impossible mix of skills simply so they can claim there are no qualified Americans that can fill it. This allows them to use a visa to hire a foreign worker at half the rate.

All of these factors make it very bleak for those who simply want to find the right job.

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

Health care crisis: Made in the USA

2010-02-23T13:48:00.000+02:00

The following examines briefly only a part of how the government made the health care crisis it now proposes to solve.

When I was young our neighbors worked at places like:

Ball Corporation (Muncie)

Borg-Warner (Muncie)

Chrysler Foundry (Kokomo)

Chrysler Transmission (Kokomo)

Delco Electronics (GM)

Delco-Remy (GM)

Ex-Cell-O Corporation (Elwood)

Firestone (Noblesville)

Fisher Body (Marion)

Ford Motor Co. (Indianapolis)

Guide Lamp (GM)

TRW (Noblesville)

Western Electric (AT&T Indianapolis)

These jobs paid $25/hour or more typically (in 1970’s dollars, perhaps equivalent to $35/hour or more more today)–often quite a bit more–and that’s just the list of local jobs. It doesn’t include more distant but still Hoosier domiciled outfits like Bendix (South Bend), International Harvester (Fort Wayne), Whirlpool (Evansville), Ford (Connersville), Dana Corporation (Churubusco and Richmond), numerous Gary, and numerous northwest Indiana steel mills. And these are just the outfits that readily jump to mind.

What I left out were the hundreds of manufacturing suppliers that formed up to supply components to these operations.

These corporations paid the kind of wages that allowed mom to stay at home, they paid for fabulous health coverage (often given in lieu of heavily taxed pay raises thanks to a progressive tax system that created its own dramatic cost-of-living increase and which Obama will restore in 2011), provided generous paid vacations, sick days and retirement. They made it possible to own a piece of the American Dream for those unable or for whatever reason unwilling to attend college. These manufacturers came about largely as a result of the mobilization of America’s manufacturing needs emanating from World War 2 and were one of an endless series of examples of American exceptionalism that became the envy of the world and the dream for emigrants from nations of lesser prosperity worldwide.

For over 200 years no one gave even a second thought to a need for national health care.

But today we are debating a need for government health care in large measure because though the radical implementation of free trade in which from 1983 to today the government destroyed all of this. In other words, the very problem the government proposes to solve today is a crisis which, together with greedy unions and moronic managements, it manufactured itself.

Because free trade destroyed these jobs, this legacy and this heirloom the government became both arsonist and fire department and the Obama demographic and the neocons lack both historical knowledge and experience of having lived not only through the era of US prosperity, but also its dismantling.

You cannot easily quantify this destructive revolution but you can go through the list and see that almost everyone of the manufacturing operations listed above no longer exist on US shores, let alone Indiana.

These manufacturers didn’t employ a few dozen as at McDonalds, or a few hundred as with a Wal-Mart, but each plant employed 2,000 or more people. And how important was it to Indiana? Even with the wanton destruction of this legacy with nothing to replace it, Indiana still has the highest percentage of workers employed in manufacturing of any US state.

Need further evidence of what was lost? Consider the last time you went job hunting. How many apps did you put in at the local foundry versus the number of apps you put in at the local Burger Doodle?

Health Care Deceit by Paul Craig Roberts

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

Justice Beyond Copenhagen

2010-02-23T05:33:00.000+02:00

Last Tuesday DC was lucky enough to host an all-star panel of global justice activists in a panel discussion called “Evaluating Copenhagen: What it Means for Ecology, Economy, and Equity“, convened by leading movement organizations and moderated by Ray Suarez of PBS.

Among the panelists were leaders and experts of the global justice movement like Martin Khor from the South Centre, Maude Barlow from the Council of Canadians, Victor Menotti of the International Forum on Globalization, Chair of the UN Permanent Forum on Indigenous Issues Victoria Tauli-Corpuz, and Gopal Dayaneni from Movement Generation. You can view the full event online here, or by clicking the image below. I’ll discuss some highlights and possible movement-building lessons.

Movement-Melding in Copenhagen

The experts left very little doubt that the fight to avert climate catastrophe is the fight for the direction of the global economy.

Climate justice + development justice + trade justice = true global justice.

If, as panelists noted, the climate negotiations will eventually lead to the rewriting of the global economy then global institutions like the WTO and other unfair institutions of trade and development will have to change dramatically. For decades, social movements have resisted the globalization agenda of the international corporate elite. With the threat of climate change, the world has been forced to pursue fundamental economic transformation. That transformation presents tremendous opportunity, and so comprises the silver lining on the dark, looming clouds of possible climate catastrophe.

Problem is that too few of us in the global north are connecting the dots between the struggles of the global justice movement with the current fight for a fair climate deal.

Before I say more, here are some highlights from a few leaders and thinkers who are:

- Early on Maude Barlow makes the explicit connection between the unfair and anti-democratic process that played out in Copenhagen as parallel to what we see at the World Trade Organization (WTO) in Geneva. Rich countries ganging up and bullying poorer countries, divide and conquer tactics, and ‘green room’ -esque VIP meetings where the ‘real’ decision are made, without voices of poorer countries or marginalized peoples (min 7:00).

- Martin Khor makes clear that by proposing to cap emissions, that leaders are “negotiating not only the future of humanity and the earth, we are also negotiating the distribution of the future GNP of the world” [emphasis mine]. Because the five major issues areas in the working groups “are no longer about climate science” only, shifting the global economic and development paradigm is explicitly required to avert catastrophic climate change. He then criticizes the exclusive and anti-democratic process, reminiscent of the WTO process, that produced the controversial Copenhagen Accord (beginning around min 11:30).

- Victoria Tauli-Corpuz points out the importance of the historic first inclusion of language regarding human rights and land rights of indigenous and local peoples in the climate negotiation document. Also, like the movement for global economic justice at the WTO, she emphasized the wisdom of using an inside-outside strategy to influence the negotiations inside AND support the social movement mobilizations outside the convention center (min 31:00).

- Victor Menotti notes how the each of the food, finance and climate crises has been caused by neoliberal economic orthodoxy that privileges corporate power over democratic governments, and by capture of global institutions like the WTO by corporate interests (min 38:00).

A spirited discussion followed, delving into a wide array of issues:

- Gopal Dayaneni insisting that a real solution will require indigenous and local peoples winning back rights over their land, ecologies and development paths (min 44:00).

- Maude Barlow pointing out the hypocrisy of countries negotiating new trade deals that further enshrine corporate economic development paradigm that relies on over-consumption and over-extraction, while purporting to green themselves in the climate negotiations (min 51:00).

- Victoria Tauli-Corpuz takes on the question of climate debt, and how indigenous peoples have led the fight to solve the problem by opposing fighting corporate extraction projects and with them the “dominant economic development paradigm” that facilitate it (min 1:06).

- Victor Menotti relates how lessons from fighting the WTO teach that we need to call out corporate power and spotlight who wins and who loses under proposed climate solutions and their corollary economic underpinnings. If we recognize that its not a poor country vs. rich country dynamic, but a fight of corporate elites vs. the rest of us (min 1:13).

The overall upshot of the panel was that the proper venue for solving the climate crisis is the U.N. Indubitably. Just solutions will not emerge from a more exclusive and corporate-captured venues like the G-20 or WTO.

Global Justice Movement at the Millenium

The lesson here for movement builders and campaigners is another. These experts, all steeped in peoples’ movements for a more just and sustainable world, call us to act now for justice beyond Copenhagen, and beyond the next climate summit in Mexico. To answer their call we must fundamentally challenge what Victoria Tauli-Corpuz calls the “dominant economic development paradigm” – one that not only causes global warming emissions but one that sews the very injustices and inequities that Gopal Dayaneni points out are what enable over-consumption and over-extraction.

Thus a good climate agreement is not, as Martin Khor mentions, just a matter of climate science or emissions targets. It never really was. There are those within the alter-globalization movement that highlight the need to turnaround failed trade policy in order to actually stave off climate change, and the youth climate movement does as good a job as anyone linking the struggles of people in the global south with those in the global north.

But to create sufficient pressure behind real solutions we’ve still got a long way to go. We need to find common strategies for building a revitalized movement for global justice – a progressively more holistic and vibrant one that bridges all the gaps that have divided us. That means organizing to confront every single global institution that promotes the “dominant economic development paradigm” like the WTO, the World Bank, the International Monetary Fund (and other development banks), and fight back against corporate control of our governments, especially the G-20 governments key to governance of each of these institutions.

The global justice and climate movements, then, are inextricably linked. In fact they are one in the same. and we must seize the moment and unite. Tuesday night’s visionary voices from the global south, and others representing marginalized people in the global north, proclaimed the need for just this sort of solidarity. We must continue to push the climate fight beyond the science and into the realm of global social, economic, and ecological justice for regular working people across the globe.

We in the global north need to step it up while the planet still hangs in the balance. You can almost feel the forces aligning, and hear the ranks forming. If we continue to grow together, an unprecedentedly vibrant movement awaits us.

(Originally posted at EyesOnTrade.Org)

[Via http://itsgettinghotinhere.org]

Ron Paul & Life After Empire

2010-02-21T21:56:00.000+02:00

I have been arguing for a while that there is a strange bedfellows coalition forming between progressives and libertarians around ending America’s Imperial adventures and beginning Life After Empire. Yesterday Ron Paul gave an extraordinary speech calling for the end of empire in front of the Conservative Political Action Committee’s annual convention. When the speech was over the 10,000 delegates voted in a straw poll for their 2012 Presidential candidate. Ron Paul won easily beating Mitt Romney by 9 points. Paul’s platform is built on two points: end our military adventures and close down the Federal Reserve. The first is built on a different idea of conservatism, citing Eisenhower as a model and the notions about the Fed are based around the idea that Private interests (the New York Banks) should not be in charge of how much money we print. Neither of these seem like very controversial stances to me, but the announcement of Paul’s straw poll victory brought a chorus of boos from the Republican establishment at CPAC. I don’t agree with a lot of what Paul says, but if you watch this section of Paul’s speech you can see an opening for a progressive candidate who was anti-Imperialist and anti-Wall Street and willing to revert to the Democratic principles of Jeffersonian Democratic Federalism.

[Via http://jontaplin.com]

Calvin Coolidge's Tax Cuts

2010-02-21T13:38:00.000+02:00

Calvin Coolidge cut federal income tax rates in 1924, 1926, and 1928. At the same time he cut spending by Congress and was able to pay off one-fourth of the national debt. By the time of the second tax cut, which not only cut rates but eliminated taxes for lower-income people, only the richest 2% of people were paying any income tax at all. While I think it is intrinsically unfair for only 2% of the citizens of the country to pay income tax, I think it is great that it provided enough to run the government. Some of the credit for the success of this apporach goest to Andrew Mellon, Secretary of the Treasury at that time.

He is a president that I really admire. He said:

“Collecting more taxes than is absolutely necessary is legalized robbery.”

“Don’t expect to pull up the weak by pulling down the strong.”

“Duty is not collective; it is personal.”

“Ultimately property rights and personal rights are the same thing.”

We could certainly use his wisdom in our day.

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

Wall Street’s Bailout Hustle

2010-02-20T21:50:00.000+02:00

MATT TAIBBI

Rolling Stone

February 19, 2010

On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis.

The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly commensurate with what they received during the bubble years. Still, the troops were worried: There were rumors that Dr. Ballsachs, bowing to political pressure, might be forced to scale the number back. After all, the country was broke, 14.8 million Americans were stranded on the unemployment line, and Barack Obama and the Democrats were trying to recover the populist high ground after their bitch-whipping in Massachusetts by calling for a “bailout tax” on banks. Maybe this wasn’t the right time for Goldman to be throwing its annual Roman bonus orgy.

Not to worry, Blankfein reassured employees. “In a year that proved to have no shortage of story lines,” he said, “I believe very strongly that performance is the ultimate narrative.”

Translation: We made a shitload of money last year because we’re so amazing at our jobs, so fuck all those people who want us to reduce our bonuses.

Goldman wasn’t alone. The nation’s six largest banks — all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry — set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007. In a gesture of self-sacrifice, Blankfein himself took a humiliatingly low bonus of $9 million, less than the 2009 pay of elephantine New York Knicks washout Eddy Curry. But in reality, not much had changed. “What is the state of our moral being when Lloyd Blankfein taking a $9 million bonus is viewed as this great act of contrition, when every penny of it was a direct transfer from the taxpayer?” asks Eliot Spitzer, who tried to hold Wall Street accountable during his own ill-fated stint as governor of New York.

Beyond a few such bleats of outrage, however, the huge payout was met, by and large, with a collective sigh of resignation. Because beneath America’s populist veneer, on a more subtle strata of the national psyche, there remains a strong temptation to not really give a shit. The rich, after all, have always made way too much money; what’s the difference if some fat cat in New York pockets $20 million instead of $10 million?

The only reason such apathy exists, however, is because there’s still a widespread misunderstanding of how exactly Wall Street “earns” its money, with emphasis on the quotation marks around “earns.” The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street’s eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its “performance” was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.

The bottom line is that banks like Goldman have learned absolutely nothing from the global economic meltdown. In fact, they’re back conniving and playing speculative long shots in force — only this time with the full financial support of the U.S. government. In the process, they’re rapidly re-creating the conditions for another crash, with the same actors once again playing the same crazy games of financial chicken with the same toxic assets as before.

That’s why this bonus business isn’t merely a matter of getting upset about whether or not Lloyd Blankfein buys himself one tropical island or two on his next birthday. The reality is that the post-bailout era in which Goldman thrived has turned out to be a chaotic frenzy of high-stakes con-artistry, with taxpayers and clients bilked out of billions using a dizzying array of old-school hustles that, but for their ponderous complexity, would have fit well in slick grifter movies like The Sting and Matchstick Men. There’s even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn’t call the cops is known as the “Cool Off.”

To appreciate how all of these (sometimes brilliant) schemes work is to understand the difference between earning money and taking scores, and to realize that the profits these banks are posting don’t so much represent national growth and recovery, but something closer to the losses one would report after a theft or a car crash. Many Americans instinctively understand this to be true — but, much like when your wife does it with your 300-pound plumber in the kids’ playroom, knowing it and actually watching the whole scene from start to finish are two very different things. In that spirit, a brief history of the best 18 months of grifting this country has ever seen:

CON #1 THE SWOOP AND SQUAT

By now, most people who have followed the financial crisis know that the bailout of AIG was actually a bailout of AIG’s “counterparties” — the big banks like Goldman to whom the insurance giant owed billions when it went belly up.

What is less understood is that the bailout of AIG counter-parties like Goldman and Société Générale, a French bank, actually began before the collapse of AIG, before the Federal Reserve paid them so much as a dollar. Nor is it understood that these counterparties actually accelerated the wreck of AIG in what was, ironically, something very like the old insurance scam known as “Swoop and Squat,” in which a target car is trapped between two perpetrator vehicles and wrecked, with the mark in the game being the target’s insurance company — in this case, the government.

This may sound far-fetched, but the financial crisis of 2008 was very much caused by a perverse series of legal incentives that often made failed investments worth more than thriving ones. Our economy was like a town where everyone has juicy insurance policies on their neighbors’ cars and houses. In such a town, the driving will be suspiciously bad, and there will be a lot of fires.

AIG was the ultimate example of this dynamic. At the height of the housing boom, Goldman was selling billions in bundled mortgage-backed securities — often toxic crap of the no-money-down, no-identification-needed variety of home loan — to various institutional suckers like pensions and insurance companies, who frequently thought they were buying investment-grade instruments. At the same time, in a glaring example of the perverse incentives that existed and still exist, Goldman was also betting against those same sorts of securities — a practice that one government investigator compared to “selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars.”

Goldman often “insured” some of this garbage with AIG, using a virtually unregulated form of pseudo-insurance called credit-default swaps. Thanks in large part to deregulation pushed by Bob Rubin, former chairman of Goldman, and Treasury secretary under Bill Clinton, AIG wasn’t required to actually have the capital to pay off the deals. As a result, banks like Goldman bought more than $440 billion worth of this bogus insurance from AIG, a huge blind bet that the taxpayer ended up having to eat.

Thus, when the housing bubble went crazy, Goldman made money coming and going. They made money selling the crap mortgages, and they made money by collecting on the bogus insurance from AIG when the crap mortgages flopped.

Still, the trick for Goldman was: how to collect the insurance money. As AIG headed into a tailspin that fateful summer of 2008, it looked like the beleaguered firm wasn’t going to have the money to pay off the bogus insurance. So Goldman and other banks began demanding that AIG provide them with cash collateral. In the 15 months leading up to the collapse of AIG, Goldman received $5.9 billion in collateral. Société Générale, a bank holding lots of mortgage-backed crap originally underwritten by Goldman, received $5.5 billion. These collateral demands squeezing AIG from two sides were the “Swoop and Squat” that ultimately crashed the firm. “It put the company into a liquidity crisis,” says Eric Dinallo, who was intimately involved in the AIG bailout as head of the New York State Insurance Department.

It was a brilliant move. When a company like AIG is about to die, it isn’t supposed to hand over big hunks of assets to a single creditor like Goldman; it’s supposed to equitably distribute whatever assets it has left among all its creditors. Had AIG gone bankrupt, Goldman would have likely lost much of the $5.9 billion that it pocketed as collateral. “Any bankruptcy court that saw those collateral payments would have declined that transaction as a fraudulent conveyance,” says Barry Ritholtz, the author of Bailout Nation. Instead, Goldman and the other counterparties got their money out in advance — putting a torch to what was left of AIG. Fans of the movie Goodfellas will recall Henry Hill and Tommy DeVito taking the same approach to the Bamboo Lounge nightclub they’d been gouging. Roll the Ray Liotta narration: “Finally, when there’s nothing left, when you can’t borrow another buck . . . you bust the joint out. You light a match.”

And why not? After all, according to the terms of the bailout deal struck when AIG was taken over by the state in September 2008, Goldman was paid 100 cents on the dollar on an additional $12.9 billion it was owed by AIG — again, money it almost certainly would not have seen a fraction of had AIG proceeded to a normal bankruptcy. Along with the collateral it pocketed, that’s $19 billion in pure cash that Goldman would not have “earned” without massive state intervention. How’s that $13.4 billion in 2009 profits looking now? And that doesn’t even include the direct bailouts of Goldman Sachs and other big banks, which began in earnest after the collapse of AIG.

CON #2 THE DOLLAR STORE

In the usual “DollarStore” or “Big Store” scam — popularized in movies like The Sting — a huge cast of con artists is hired to create a whole fake environment into which the unsuspecting mark walks and gets robbed over and over again. A warehouse is converted into a makeshift casino or off-track betting parlor, the fool walks in with money, leaves without it.

The two key elements to the Dollar Store scam are the whiz-bang theatrical redecorating job and the fact that everyone is in on it except the mark. In this case, a pair of investment banks were dressed up to look like commercial banks overnight, and it was the taxpayer who walked in and lost his shirt, confused by the appearance of what looked like real Federal Reserve officials minding the store.

Less than a week after the AIG bailout, Goldman and another investment bank, Morgan Stanley, applied for, and received, federal permission to become bank holding companies — a move that would make them eligible for much greater federal support. The stock prices of both firms were cratering, and there was talk that either or both might go the way of Lehman Brothers, another once-mighty investment bank that just a week earlier had disappeared from the face of the earth under the weight of its toxic assets. By law, a five-day waiting period was required for such a conversion — but the two banks got them overnight, with final approval actually coming only five days after the AIG bailout.

Why did they need those federal bank charters? This question is the key to understanding the entire bailout era — because this Dollar Store scam was the big one. Institutions that were, in reality, high-risk gambling houses were allowed to masquerade as conservative commercial banks. As a result of this new designation, they were given access to a virtually endless tap of “free money” by unsuspecting taxpayers. The $10 billion that Goldman received under the better-known TARP bailout was chump change in comparison to the smorgasbord of direct and indirect aid it qualified for as a commercial bank.

When Goldman Sachs and Morgan Stanley got their federal bank charters, they joined Bank of America, Citigroup, J.P. Morgan Chase and the other banking titans who could go to the Fed and borrow massive amounts of money at interest rates that, thanks to the aggressive rate-cutting policies of Fed chief Ben Bernanke during the crisis, soon sank to zero percent. The ability to go to the Fed and borrow big at next to no interest was what saved Goldman, Morgan Stanley and other banks from death in the fall of 2008. “They had no other way to raise capital at that moment, meaning they were on the brink of insolvency,” says Nomi Prins, a former managing director at Goldman Sachs. “The Fed was the only shot.”

In fact, the Fed became not just a source of emergency borrowing that enabled Goldman and Morgan Stanley to stave off disaster — it became a source of long-term guaranteed income. Borrowing at zero percent interest, banks like Goldman now had virtually infinite ways to make money. In one of the most common maneuvers, they simply took the money they borrowed from the government at zero percent and lent it back to the government by buying Treasury bills that paid interest of three or four percent. It was basically a license to print money — no different than attaching an ATM to the side of the Federal Reserve.

“You’re borrowing at zero, putting it out there at two or three percent, with hundreds of billions of dollars — man, you can make a lot of money that way,” says the manager of one prominent hedge fund. “It’s free money.” Which goes a long way to explaining Goldman’s enormous profits last year. But all that free money was amplified by another scam:

CON #3 THE PIG IN THE POKE

At one point or another, pretty much everyone who takes drugs has been burned by this one, also known as the “Rocks in the Box” scam or, in its more elaborate variations, the “Jamaican Switch.” Someone sells you what looks like an eightball of coke in a baggie, you get home and, you dumbass, it’s baby powder.

The scam’s name comes from the Middle Ages, when some fool would be sold a bound and gagged pig that he would see being put into a bag; he’d miss the switch, then get home and find a tied-up cat in there instead. Hence the expression “Don’t let the cat out of the bag.”

The “Pig in the Poke” scam is another key to the entire bailout era. After the crash of the housing bubble — the largest asset bubble in history — the economy was suddenly flooded with securities backed by failing or near-failing home loans. In the cleanup phase after that bubble burst, the whole game was to get taxpayers, clients and shareholders to buy these worthless cats, but at pig prices.

One of the first times we saw the scam appear was in September 2008, right around the time that AIG was imploding. That was when the Fed changed some of its collateral rules, meaning banks that could once borrow only against sound collateral, like Treasury bills or AAA-rated corporate bonds, could now borrow against pretty much anything — including some of the mortgage-backed sewage that got us into this mess in the first place. In other words, banks that once had to show a real pig to borrow from the Fed could now show up with a cat and get pig money. “All of a sudden, banks were allowed to post absolute shit to the Fed’s balance sheet,” says the manager of the prominent hedge fund.

The Fed spelled it out on September 14th, 2008, when it changed the collateral rules for one of its first bailout facilities — the Primary Dealer Credit Facility, or PDCF. The Fed’s own write-up described the changes: “With the Fed’s action, all the kinds of collateral then in use . . . including non-investment-grade securities and equities . . . became eligible for pledge in the PDCF.”

Translation: We now accept cats.

The Pig in the Poke also came into play in April of last year, when Congress pushed a little-known agency called the Financial Accounting Standards Board, or FASB, to change the so-called “mark-to-market” accounting rules. Until this rule change, banks had to assign a real-market price to all of their assets. If they had a balance sheet full of securities they had bought at $3 that were now only worth $1, they had to figure their year-end accounting using that $1 value. In other words, if you were the dope who bought a cat instead of a pig, you couldn’t invite your shareholders to a slate of pork dinners come year-end accounting time.

But last April, FASB changed all that. From now on, it announced, banks could avoid reporting losses on some of their crappy cat investments simply by declaring that they would “more likely than not” hold on to them until they recovered their pig value. In short, the banks didn’t even have to actually hold on to the toxic shit they owned — they just had tosort of promise to hold on to it.

That’s why the “profit” numbers of a lot of these banks are really a joke. In many cases, we have absolutely no idea how many cats are in their proverbial bag. What they call “profits” might really be profits, only minus undeclared millions or billions in losses.

“They’re hiding all this stuff from their shareholders,” says Ritholtz, who was disgusted that the banks lobbied for the rule changes. “Now, suddenly banks that were happy to mark to market on the way up don’t have to mark to market on the way down.”

CON #4 THE RUMANIAN BOX

One of the great innovations of Victor Lustig, the legendary Depression-era con man who wrote the famous “Ten Commandments for Con Men,” was a thing called the “Rumanian Box.” This was a little machine that a mark would put a blank piece of paper into, only to see real currency come out the other side. The brilliant Lustig sold this Rumanian Box over and over again for vast sums — but he’s been outdone by the modern barons of Wall Street, who managed to get themselves a real Rumanian Box.

How they accomplished this is a story that by itself highlights the challenge of placing this era in any kind of historical context of known financial crime. What the banks did was something that was never — and never could have been — thought of before. They took so much money from the government, and then did so little with it, that the state was forced to start printing new cash to throw at them. Even the great Lustig in his wildest, horniest dreams could never have dreamed up this one.

The setup: By early 2009, the banks had already replenished themselves with billions if not trillions in bailout money. It wasn’t just the $700 billion in TARP cash, the free money provided by the Fed, and the untold losses obscured by accounting tricks. Another new rule allowed banks to collect interest on the cash they were required by law to keep in reserve accounts at the Fed — meaning the state was now compensating the banks simply for guaranteeing their own solvency. And a new federal operation called the Temporary Liquidity Guarantee Program let insolvent and near-insolvent banks dispense with their deservedly ruined credit profiles and borrow on a clean slate, with FDIC backing. Goldman borrowed $29 billion on the government’s good name, J.P. Morgan Chase $38 billion, and Bank of America $44 billion. “TLGP,” says Prins, the former Goldman manager, “was a big one.”

Collectively, all this largesse was worth trillions. The idea behind the flood of money, from the government’s standpoint, was to spark a national recovery: We refill the banks’ balance sheets, and they, in turn, start to lend money again, recharging the economy and producing jobs. “The banks were fast approaching insolvency,” says Rep. Paul Kanjorski, a vocal critic of Wall Street who nevertheless defends the initial decision to bail out the banks. “It was vitally important that we recapitalize these institutions.”

But here’s the thing. Despite all these trillions in government rescues, despite the Fed slashing interest rates down to nothing and showering the banks with mountains of guarantees, Goldman and its friends had still not jump-started lending again by the first quarter of 2009. That’s where those nuclear-powered balls of Lloyd Blankfein came into play, as Goldman and other banks basically threatened to pick up their bailout billions and go home if the government didn’t fork over more cash — a lot more. “Even if the Fed could make interest rates negative, that wouldn’t necessarily help,” warned Goldman’s chief domestic economist, Jan Hatzius. “We’re in a deep recession mainly because the private sector, for a variety of reasons, has decided to save a lot more.”

Translation: You can lower interest rates all you want, but we’re still not fucking lending the bailout money to anyone in this economy. Until the government agreed to hand over even more goodies, the banks opted to join the rest of the “private sector” and “save” the taxpayer aid they had received — in the form of bonuses and compensation.

The ploy worked. In March of last year, the Fed sharply expanded a radical new program called quantitative easing, which effectively operated as a real-live Rumanian Box. The government put stacks of paper in one side, and out came $1.2 trillion “real” dollars.

The government used some of that freshly printed money to prop itself up by purchasing Treasury bonds — a desperation move, since Washington’s demand for cash was so great post-Clusterfuck ‘08 that even the Chinese couldn’t buy U.S. debt fast enough to keep America afloat. But the Fed used most of the new cash to buy mortgage-backed securities in an effort to spur home lending — instantly creating a massive market for major banks.

And what did the banks do with the proceeds? Among other things, they bought Treasury bonds, essentially lending the money back to the government, at interest. The money that came out of the magic Rumanian Box went from the government back to the government, with Wall Street stepping into the circle just long enough to get paid. And once quantitative easing ends, as it is scheduled to do in March, the flow of money for home loans will once again grind to a halt. The Mortgage Bankers Association expects the number of new residential mortgages to plunge by 40 percent this year.

CON #5 THE BIG MITT

All of that Rumanian box paper was made even more valuable by running it through the next stage of the grift. Michael Masters, one of the country’s leading experts on commodities trading, compares this part of the scam to the poker game in the Bill Murray comedy Stripes. “It’s like that scene where John Candy leans over to the guy who’s new at poker and says, ‘Let me see your cards,’ then starts giving him advice,” Masters says. “He looks at the hand, and the guy has bad cards, and he’s like, ‘Bluff me, come on! If it were me, I’d bet everything!’ That’s what it’s like. It’s like they’re looking at your cards as they give you advice.”

In more ways than one can count, the economy in the bailout era turned into a “Big Mitt,” the con man’s name for a rigged poker game. Everybody was indeed looking at everyone else’s cards, in many cases with state sanction. Only taxpayers and clients were left out of the loop.

At the same time the Fed and the Treasury were making massive, earthshaking moves like quantitative easing and TARP, they were also consulting regularly with private advisory boards that include every major player on Wall Street. The Treasury Borrowing Advisory Committee has a J.P. Morgan executive as its chairman and a Goldman executive as its vice chairman, while the board advising the Fed includes bankers from Capital One and Bank of New York Mellon. That means that, in addition to getting great gobs of free money, the banks were also getting clear signals about when they were getting that money, making it possible to position themselves to make the appropriate investments.

One of the best examples of the banks blatantly gambling, and winning, on government moves was the Public-Private Investment Program, or PPIP. In this bizarre scheme cooked up by goofball-geek Treasury Secretary Tim Geithner, the government loaned money to hedge funds and other private investors to buy up the absolutely most toxic horseshit on the market — the same kind of high-risk, high-yield mortgages that were most responsible for triggering the financial chain reaction in the fall of 2008. These satanic deals were the basic currency of the bubble: Jobless dope fiends bought houses with no money down, and the big banks wrapped those mortgages into securities and then sold them off to pensions and other suckers as investment-grade deals. The whole point of the PPIP was to get private investors to relieve the banks of these dangerous assets before they hurt any more innocent bystanders.

But what did the banks do instead, once they got wind of the PPIP? They started buying that worthless crap again, presumably to sell back to the government at inflated prices! In the third quarter of last year, Goldman, Morgan Stanley, Citigroup and Bank of America combined to add $3.36 billion of exactly this horseshit to their balance sheets.

This brazen decision to gouge the taxpayer startled even hardened market observers. According to Michael Schlachter of the investment firm Wilshire Associates, it was “absolutely ridiculous” that the banks that were supposed to be reducing their exposure to these volatile instruments were instead loading up on them in order to make a quick buck. “Some of them created this mess,” he said, “and they are making a killing undoing it.”

CON #6 THE WIRE

Here’s the thing about our current economy. When Goldman and Morgan Stanley transformed overnight from investment banks into commercial banks, we were told this would mean a new era of “significantly tighter regulations and much closer supervision by bank examiners,” as The New York Times put it the very next day. In reality, however, the conversion of Goldman and Morgan Stanley simply completed the dangerous concentration of power and wealth that began in 1999, when Congress repealed the Glass-Steagall Act — the Depression-era law that had prevented the merger of insurance firms, commercial banks and investment houses. Wall Street and the government became one giant dope house, where a few major players share valuable information between conflicted departments the way junkies share needles.

One of the most common practices is a thing called front-running, which is really no different from the old “Wire” con, another scam popularized in The Sting. But instead of intercepting a telegraph wire in order to bet on racetrack results ahead of the crowd, what Wall Street does is make bets ahead of valuable information they obtain in the course of everyday business.

Say you’re working for the commodities desk of a big investment bank, and a major client — a pension fund, perhaps — calls you up and asks you to buy a billion dollars of oil futures for them. Once you place that huge order, the price of those futures is almost guaranteed to go up. If the guy in charge of asset management a few desks down from you somehow finds out about that, he can make a fortune for the bank by betting ahead of that client of yours. The deal would be instantaneous and undetectable, and it would offer huge profits. Your own client would lose money, of course — he’d end up paying a higher price for the oil futures he ordered, because you would have driven up the price. But that doesn’t keep banks from screwing their own customers in this very way.

The scam is so blatant that Goldman Sachs actually warns its clients that something along these lines might happen to them. In the disclosure section at the back of a research paper the bank issued on January 15th, Goldman advises clients to buy some dubious high-yield bonds while admitting that the bank itself may bet against those same shitty bonds. “Our salespeople, traders and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research,” the disclosure reads. “Our asset-management area, our proprietary-trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this research.”

Banks like Goldman admit this stuff openly, despite the fact that there are securities laws that require banks to engage in “fair dealing with customers” and prohibit analysts from issuing opinions that are at odds with what they really think. And yet here they are, saying flat-out that they may be issuing an opinion at odds with what they really think.

To help them screw their own clients, the major investment banks employ high-speed computer programs that can glimpse orders from investors before the deals are processed and then make trades on behalf of the banks at speeds of fractions of a second. None of them will admit it, but everybody knows what this computerized trading — known as “flash trading” — really is. “Flash trading is nothing more than computerized front-running,” says the prominent hedge-fund manager. The SEC voted to ban flash trading in September, but five months later it has yet to issue a regulation to put a stop to the practice.

Over the summer, Goldman suffered an embarrassment on that score when one of its employees, a Russian named Sergey Aleynikov, allegedly stole the bank’s computerized trading code. In a court proceeding after Aleynikov’s arrest, Assistant U.S. Attorney Joseph Facciponti reported that “the bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

Six months after a federal prosecutor admitted in open court that the Goldman trading program could be used to unfairly manipulate markets, the bank released its annual numbers. Among the notable details was the fact that a staggering 76 percent of its revenue came from trading, both for its clients and for its own account. “That is much, much higher than any other bank,” says Prins, the former Goldman managing director. “If I were a client and I saw that they were making this much money from trading, I would question how badly I was getting screwed.”

Why big institutional investors like pension funds continually come to Wall Street to get raped is the million-dollar question that many experienced observers puzzle over. Goldman’s own explanation for this phenomenon is comedy of the highest order. In testimony before a government panel in January, Blankfein was confronted about his firm’s practice of betting against the same sorts of investments it sells to clients. His response: “These are the professional investors who want this exposure.”

In other words, our clients are big boys, so screw ‘em if they’re dumb enough to take the sucker bets I’m offering.

CON #7 THE RELOAD

Not many con men are good enough or brazen enough to con the same victim twice in a row, but the few who try have a name for this excellent sport: reloading. The usual way to reload on a repeat victim (called an “addict” in grifter parlance) is to rope him into trying to get back the money he just lost. This is exactly what started to happen late last year.

It’s important to remember that the housing bubble itself was a classic confidence game — the Ponzi scheme. The Ponzi scheme is any scam in which old investors must be continually paid off with money from new investors to keep up what appear to be high rates of investment return. Residential housing was never as valuable as it seemed during the bubble; the soaring home values were instead a reflection of a continual upward rush of new investors in mortgage-backed securities, a rush that finally collapsed in 2008.

But by the end of 2009, the unimaginable was happening: The bubble was re-inflating. A bailout policy that was designed to help us get out from under the bursting of the largest asset bubble in history inadvertently produced exactly the opposite result, as all that government-fueled capital suddenly began flowing into the most dangerous and destructive investments all over again. Wall Street was going for the reload.

A lot of this was the government’s own fault, of course. By slashing interest rates to zero and flooding the market with money, the Fed was replicating the historic mistake that Alan Greenspan had made not once, but twice, before the tech bubble in the early 1990s and before the housing bubble in the early 2000s. By making sure that traditionally safe investments like CDs and savings accounts earned basically nothing, thanks to rock-bottom interest rates, investors were forced to go elsewhere to search for moneymaking opportunities.

Now we’re in the same situation all over again, only far worse. Wall Street is flooded with government money, and interest rates that are not just low but flat are pushing investors to seek out more “creative” opportunities. (It’s “Greenspan times 10,” jokes one hedge-fund trader.) Some of that money could be put to use on Main Street, of course, backing the efforts of investment-worthy entrepreneurs. But that’s not what our modern Wall Street is built to do. “They don’t seem to want to lend to small and medium-sized business,” says Rep. Brad Sherman, who serves on the House Financial Services Committee. “What they want to invest in is marketable securities. And the definition of small and medium-sized businesses, for the most part, is that they don’t have marketable securities. They have bank loans.”

In other words, unless you’re dealing with the stock of a major, publicly traded company, or a giant pile of home mortgages, or the bonds of a large corporation, or a foreign currency, or oil futures, or some country’s debt, or anything else that can be rapidly traded back and forth in huge numbers, factory-style, by big banks, you’re not really on Wall Street’s radar.

So with small business out of the picture, and the safe stuff not worth looking at thanks to the Fed’s low interest rates, where did Wall Street go? Right back into the shit that got us here.

One trader, who asked not to be identified, recounts a story of what happened with his hedge fund this past fall. His firm wanted to short — that is, bet against — all the crap toxic bonds that were suddenly in vogue again. The fund’s analysts had examined the fundamentals of these instruments and concluded that they were absolutely not good investments.

So they took a short position. One month passed, and they lost money. Another month passed — same thing. Finally, the trader just shrugged and decided to change course and buy.

“I said, ‘Fuck it, let’s make some money,’” he recalls. “I absolutely did not believe in the fundamentals of any of this stuff. However, I can get on the bandwagon, just so long as I know when to jump out of the car before it goes off the damn cliff!”

This is the very definition of bubble economics — betting on crowd behavior instead of on fundamentals. It’s old investors betting on the arrival of new ones, with the value of the underlying thing itself being irrelevant. And this behavior is being driven, no surprise, by the biggest firms on Wall Street.

The research report published by Goldman Sachs on January 15th underlines this sort of thinking. Goldman issued a strong recommendation to buy exactly the sort of high-yield toxic crap our hedge-fund guy was, by then, driving rapidly toward the cliff. “Summarizing our views,” the bank wrote, “we expect robust flows . . . to dominate fundamentals.” In other words: This stuff is crap, but everyone’s buying it in an awfully robust way, so you should too. Just like tech stocks in 1999, and mortgage-backed securities in 2006.

To sum up, this is what Lloyd Blankfein meant by “performance”: Take massive sums of money from the government, sit on it until the government starts printing trillions of dollars in a desperate attempt to restart the economy, buy even more toxic assets to sell back to the government at inflated prices — and then, when all else fails, start driving us all toward the cliff again with a frank and open endorsement of bubble economics. I mean, shit — who wouldn’t deserve billions in bonuses for doing all that?

Con artists have a word for the inability of their victims to accept that they’ve been scammed. They call it the “True Believer Syndrome.” That’s sort of where we are, in a state of nagging disbelief about the real problem on Wall Street. It isn’t so much that we have inadequate rules or incompetent regulators, although both of these things are certainly true. The real problem is that it doesn’t matter what regulations are in place if the people running the economy are rip-off artists. The system assumes a certain minimum level of ethical behavior and civic instinct over and above what is spelled out by the regulations. If those ethics are absent — well, this thing isn’t going to work, no matter what we do. Sure, mugging old ladies is against the law, but it’s also easy. To prevent it, we depend, for the most part, not on cops but on people making the conscious decision not to do it.

That’s why the biggest gift the bankers got in the bailout was not fiscal but psychological. “The most valuable part of the bailout,” says Rep. Sherman, “was the implicit guarantee that they’re Too Big to Fail.” Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures. And what should really freak everyone out is the fact that Wall Street immediately started skimming off its own rescue money. If the bailouts validated anew the crooked psychology of the bubble, the recent profit and bonus numbers show that the same psychology is back, thriving, and looking for new disasters to create. “It’s evidence,” says Rep. Kanjorski, “that they still don’t get it.”

More to the point, the fact that we haven’t done much of anything to change the rules and behavior of Wall Street shows that we still don’t get it. Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back. Ask yourself how well that ever works out. And then get ready for the reload.

[From Issue 1099 — March 4, 2010]

[Via http://truth11.com]

Wishlist Ubuntu

2010-02-20T13:41:00.000+02:00

I was on the Ubuntu forums yesterday checking out a couple of threads and it struck me that we still haven’t managed to get out of a weird feeling that the amorphous developer community surrounding Ubuntu somehow owes the users who post wishlist threads a free ride.

For instance in one thread there is a general complaint that developers are not doing enough new things for lucid, or not enough testing, or enough stabilisation. When in fact the developers are doing exactly the right amount of development and exactly the right amount of work, based upon what their own needs and feelings are.

Of course this part is hard to understand for users that have been told that Ubuntu is a free lunch. Developers are under no obligation to do anything unless paid to do so. It doesn’t matter how many wishlist threads there are, no developer is ever going to read it and sometimes I wonder if it’s just to make the posters feel better about their lack of ability. I’m reminded of this phraise:

“Too many Chiefs and not enough Indians”

Yes FOSS gives you the power to be your own Chief, to say what you like and don’t like, to use what you find useful and to dismiss anything you don’t. But along with that it gives you the responsibility to be your own Indian too. You have to work at what you need and it’s only useful to complain when your hoping to strike up a decent and productive discussion.

Perhaps this is why the Opportunistic Developer project is important, to try and convince more Chiefs to get down and do some of the grunt work in solving their problems. I just wish there was an Opportunistic Payment project that allows people who can’t contribute time, to at least be able to push development forward with good old fashioned money.

Thoughts?

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

Economists can't agree on UK outlook

2010-02-20T05:53:00.000+02:00

I think I’ve posted on this before .At the moment 30 economists have written to the Times with one outlook and 60 others have written with another outlook , supposedly in opposition to the previous economists.Cue jokes about economists who can’t agree over anything.

( BBC joke …If you lined all the economists end to end in a line , you would still not reach a conclusion .

my favourite is …three economists go hunting deer…one aims…misses to the right ..next aims …misses to the left…the third …exclaims…”we got IT!”…)

Actually …markets are unknowable because knowledge itself alters the market.Therefore widely desseminated knowledge would widely alter the market..hence there can not be a consensus.If there is…it will fail to come exactly right.

If we all knew exactly how economic indicators were going to behave , we would all go out and purchase financial instruments to take advantage of that and that itself would alter the result.

[Via http://littlebangtheories.com]

Wage change in NL

2010-02-18T13:55:00.000+02:00

I post news here.

1. Dutch salaries increase faster than inflation

Salaries in the Netherlands increased by an average 3.3 percent last year according to figures from Statistics Netherlands.

AMSTERDAM -

This means salaries increased faster than inflation at 2.5 percent.

People working in the entertainment and service sectors benefited most with pay rises of 4 percent. The lowest pay rises were in the catering sector, with employees only gaining 2.3 percent more money. Government pay packages saw increases of 3.3 percent, partly due to end of year bonuses.

Pay rises do not necessarily lead to higher purchasing power, primarily because part of the pay package is withheld in premiums for pensions and social security, say Statistics Netherlands.

Every spring in the Netherlands, discussions are held on pay and conditions between the social partners (employers’ organisations and unions), in the hope of preventing wage conflicts and strikes.

2. Wider income gap between single mothers and mothers with partners

http://www.cbs.nl/en-GB/menu/themas/inkomen-bestedingen/publicaties/artikelen/archief/2010/2010-2992-wm.htm

The disposable income of single mothers is considerably lower than that of cohabiting or married mothers. The average disposable income of single mothers was 15 thousand euro in 2008, as against nearly 25 thousand euro for mothers living with partners. The gap has widened since 2003.

Income gap wider

The average standardised disposable income of single mothers in 2003 was 68 percent of that of cohabiting or married mothers, as opposed to 62 percent in 2008. The predominant reason is that the participation rate on the labour market of single mothers, which is lower anyway, has grown more slowly than the participation rate of cohabiting or married mothers.

Differences in income from labour reduced

The share of women working on a full-time basis has dropped faster among single mothers than among their cohabiting or married counterparts. On average, mothers living with partners also work longer hours each week than single mothers.

These developments have rapidly reduced the gap in income from labour between mothers living with and without partners. In 2003, the average single mother earned 116 percent of the income of a cohabiting or married mother. In 2008, the share had dropped to 101 percent.

Single mothers earn higher incomes from labour because those who participate on the labour market on average work longer hours than working mothers with partners.

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

GED TEST SECTIONS

2010-02-18T05:54:00.000+02:00

GED TEST SECTIONS

INTRODUCTION

GED means General Education Development. It is made for those people who have not been complete their higher education due to some personal circumstances. General Education Development (GED) tests are administered internationally through authorized test centers. GED test developed in 1942.

SECTIONS OF GED TEST

The GED test made up for 5 sections. They are:

Language arts: writing

Language arts: reading

Social studies

Science

Mathematics

LANGUAGE ARTS: WRITING

The language arts writing test consists of two parts. Part 1 consists of 50 multiple choice questions that involve students to amend and modify. There are total of 50 questions that completed within 75 minutes. Part 1 consists of 30% of the questions on sentence structure. It involves correcting sentence fragments, run on sentences, comma splices, misplaced modifiers, and lack of parallel structure. Another 30% part of this questions deal with usage, i.e. correction of errors in subject verbs and verb tenses. And the 25% of questions related to mechanics. Students require correcting the errors in punctuation, capitalization and spellings. The next 15% of the questions are organizations, which involves, restructure of paragraphs or ideas within paragraphs.

The part 2 evaluates the capability of a student to write an essay on a well known topic. The essay must be required 200- 250 words. It is the test of student’s ideas, point of view, logic and reasoning, vocabulary and its usage. The time of essay completion must be 45 minutes. The scores earned on the both parts are summed up and reported as a single score.

SOCIAL STUDIES

This section consists of 50 multiple choice questions that needed to complete within 70 minutes. This section covers the following topics.

25% national history

20% economics

25% civics and governments

15% World history

15% Geography

The material provided could be from a paragraph, graph, cartoon or figure, map, table, chart, photograph. The method of answering the question in social studies test is through understanding the questions and then applying, analyze, the information that provided.

SCIENCE

This section consists of 50 multiple choice questions that needed to complete within 80 minutes. This section covers the following areas.

45% life science

20% earth and space

35% physics and chemistry

These questions involve the students understanding about the chart, table, graph, or figure to use their knowledge through his experience in life and work.

LANGUAGE ARTS: READING

This section consists of 40 multiple choice questions that needed to complete within 65 minutes. Candidates are required to interpret written prose and poetry passages and answer the questions based on them. This section covers the following areas.

75% literacy test

25% nonfiction prose

The literacy test 75% area comprise it those sections.

Poetry
Drama
Prose fiction before 1920
Prose fiction between 1920 and 1960
Prose fiction after 1960

Non fiction prose 25% area comprises:

Reading section are about 200 to 400 words in length and poetry parts about 8 to 25 lines each. Each of the passage or poetry has about four to eight questions.

MATHEMATICS

This section consists of 50 multiple choice questions that needed to complete within 90 minutes. This section is the test of student’s mathematical concepts and ability to use these concepts in the real life. The concepts cover under this section.

25% numbers: number sense and operations

25% measurement and geometry

25% data statistics and probability

25% algebra functions and patterns

Only 80% of mathematical questions are based on multiple choices and other 20% questions call for the student’s to make up their own questions.

SCORES

The candidates should score more than 40% of the graduating high school seniors. The candidate should score about 410 in the GED exam to clear it and get the diploma.

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

US to loan money to build nuclear power plants.

2010-02-16T21:52:00.000+02:00

BBC:

President Barack Obama has announced more than $8bn (£5bn) of federal loan guarantees to help build the first US nuclear power stations for 30 years.

While I’m happy to hear that we will build some nuclear power plants, I’m not happy that federal loans will be used to fund such a program. It would have been better to curb the restrictions against building such facilities and allowed the market to determine the future of energy production in the United States.

[Via http://csburks.com]

Economist Debate: China in Africa-Good, Bad & ASEAN Implications?

2010-02-16T13:35:00.000+02:00

Is this the Economist that got into trouble in Siam?

Blog Note: There is a major debate going on at the Economist.com on China in Africa.

While what China does in Africa, may first appear very distance from Thailand. But in fact there are some very important implications, such as China’s contract farming to grow rice in Africa. If that still sounds far away, in fact, China’s offer to Laos, right here close to Thailand, on contract farming-just got a Thai company contract with Laos kicked-out. The big news in Thailand is that China says it will invest about US$1 billion in Thailand in the short-to-medium term. But the amount that is going to Africa is about 7-10 times, Thailand figure.

The debate going on at the Economist.com, have some policy implications-namely the Economist does a wrap up of these debates into semi-research paper that are published and most of the European press follows these Economist semi-research papers. Obviously, the government and policy makers notices.

The following is one opinion from the Economist.com

JEAN-NOEL wrote:

Dear Sir,

I disagree with the thinking of this house. As French, though I am belonging to the wrong country to write about colonialism as well as neo-colonialism, I will try to demonstrate why I believe that China, as a country and a state, is behaving worse than any other colonialist countries in the past.

To show it, I will use the history of China.

The Chinese Empire has been built as a country located in the centre of its influence zone. The character describing “Mainland China” is itself describing the centre of the World. The Chinese Empire has during all its history successfully succeeded in maintaining countries around under control through unfair relationship. These relationships were based on the fact that the state of China will help against any kind of external aggression and in return for this protection the State will receive regular payments. This system was the key for establishing a system which lasted until the XX century. The system had far more disadvantages than advantages. And some of these disadvantages are still influencing the state of development of these countries in Asia, and will do with Africa.

The largest disadvantage has been that such countries as the Mekong countries where maintained in an underdeveloped state. They had an organization of state fitting exactly to the Chinese one. Their Kings or establishment should be agreed by the Chinese State.

Now looking to what is happening in African countries where the PRC is “investing”, I can see that the ones wanting to receive these investments there is the same trend.

An aspect which is not enough considered today is that the so called investments are not made by “private” Chinese companies. They are made by the Chinese state companies. And as a measure of return on investment the political influence on how the country behaves is the most important one for these companies, rather than the profit.

The countries around China had to live with the fact that that the resources they could supply could not be controlled by them. They had to deal with plenty of Chinese civil servants, armed men and Chinese Mafiosi. Reading the articles from The Economist, I can see that there are plenty of examples of the same behavior of the Chinese state in Africa.

The Chinese state knows very well that Africans can be their best Ambassadors in their own country, so as done in the past, they receive today some students or future leaders in China and educate them, sending them back with gifts of importance locally but not for China.

Do the people of this house remember the fact that African students had been thrown through windows in the University of Beijing in the 90’s? Have the student’s organization in China changed so much that they now welcome African students?

Is it possible for African students to stay in China and go up the social Chinese power system? No! African students continue to be treated as “inferior people” in China. The general idea is that if the Chinese state wants to survive as it is, it needs influence wherever it is possible, and African people educated in China will help the actual Chinese state to be maintained onto power directly like by talking at UN through their “African pupils” or indirectly by acting in their own country in favor of their “educators”.

The business made between the countries under Chinese rules and China is made only to serve the business of China. This disadvantage is often related with plenty of stories about “wrong scales” used to measure weight of rice at boarders or inside the ruled countries by Chinese merchants.

In Africa now the stories of contracts made under “unclear rules” or contracts giving not only the largest share to the Chinese state companies, but also allowing these state companies to come with their own personnel replacing the Africans are now established.

The fact that Chinese do not only deal but replace the locals is a sign that they not only like to win, they also like to establish their own system of measure inside countries which they do not consider “civilized”. The last disadvantage I see, which is so difficult, to establish because it is one which is so much uncertain, is related to tyranny versus democracy.

The Chinese Empire has never been seen as democratic.

Did democracy appear easily in China? Did it stay long? No. And today as Taiwan maintains its democratic stance, the Chinese state does whatever it can to reduce the differences between Taiwan ROC and PRC to a geographical question. With such a history of difficulties related to human rights, to power of law, how can one believe that what has not emerged yet in the Chinese state could be helped by the same Chinese state to be brought to life in Africa?

Africans have better to deal with South America or India for the sub-Saharan countries and with Europe and Turkey or other democracies of the Middle East Region than with the Chinese state for what regards process of democracy to be reinforced or implemented.

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

Health economics and statistics

2010-02-16T05:45:00.000+02:00

In the context of responding to an article in The Atlantic by Megan McArdle, J. Michael McWilliams does a good job of laying out some of the statistical problems that underlie attempts to measure things such as the effectiveness of insurance in health outcomes. For example:

From the quasi-experimental literature, McArdle cites evidence of a lack of immediate survival gains with near-universal Medicare coverage after age 65 in the general population (Card et al. 2004; Levy, and Meltzer 2008). From a clinical perspective, however, we should not expect immediate survival gains for most previously uninsured adults because mortality is such a distal outcome. Survival gains may not manifest for years after improved chronic disease control and cancer screening are established, suggesting much more complex improvements in mortality trends are likely to evolve after age 65 in response to universal coverage. Quasi-experiments that rely on abrupt discontinuities occurring with age are not well suited to capturing these complex but potentially large effects. Consequently, the absence of evidence suggested by these studies is not evidence of absence. In contrast to the general population, immediate mortality effects might be expected for acutely ill patients for whom coverage may improve access to life-saving procedures and therapies.

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

Filed Under: Rattled

2010-02-14T21:48:00.000+02:00

On the Hill

The Rattled State of Democrats

Published: February 13, 2010

“WASHINGTON — It was a telling glimpse into the state of mind of rattled Senate Democrats.

Worried that they were going to be skewered for pushing a jobs bill that was stuffed with business tax breaks and pork, Senator Harry Reid, the majority leader, pulled the plug Thursday on a rare bipartisan proposal, gambling both with the party’s best chance of posting a needed legislative win as well as with President Obama’s new push for cross-party cooperation.

The surprise move by Mr. Reid, partly in response to fears from lawmakers that they were going to take a pummeling on cable news, has put the future of the jobs legislation in question and showed how the criticism heaped on their health care plan and the loss of the Massachusetts Senate seat have put Democrats in a protective crouch.”

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

American Air And JAL Apply For Antitrust Immunity

2010-02-14T13:21:00.000+02:00

SAN FRANCISCO — American Airlines and Japan Airlines filed an application with the Department of Transportation for antitrust immunity as part of their effort to forge closer business ties, the airlines said late Friday. “An immunized JBA will benefit the public, offer new competition in the fast-growing Asian aviation marketplace and strengthen the relationship between American and Japan Airlines, which will support JAL’s successful restructuring,” said American’s Chairman and Chief Executive Gerard Arpey payday loan lenders.

American Air And JAL Apply For Antitrust Immunity

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

The Depression You Haven't Heard Of

2010-02-13T21:47:00.000+02:00

I was watching Glenn Beck the other day, and he mentioned something that I hadn’t heard of before: the depression of 1921. Admittedly, my studies of history have mostly focused on the ancient world or post-WWII America, so I wasn’t up on the ’20s too much, but I was kind of surprised about this. Weren’t the ’20s known as the “roaring twenties” because of the massive prosperity of the time? I thought that the economy was great until the Great Depression – so what was this about a big depression during this time?

Woodrow Wilson was the first major socialist leader of the 20th Century. His employment of progressive government policies left a mark on the US economy, leaving it in shambles. President Harding took office supporting capitalism and free market president, and this is the primary reason that we don’t hear about the depression that he fought – it ended quickly because the free market was allowed to correct itself.

The Oregon Catalyst has an essay explaining the situation:

It’s a few years after the war and things are dire indeed. US farm export sales crashed as European farms returned to production after WW1. The beginning of depression was extraordinarily sharp: the U.S. price level declined by over 40% in 6 months and 56% for the year. The highest decline ever in the whole history of the United States. The gross national product plunged 24 percent.

As the depression grew the President began to dismantle the huge federal bureaucracies built up during WW1. The Presidents slogan was “less government in business” as he opposed excessive governmental interference in the private sector of the economy and worked to control $25 billion of Federal debt. After taking office the President had said that government ought to “strike the shackles from industry .. We need vastly more freedom than we do regulation.”

The 1921 loss of half the value and price of all goods was horrendous. For comparison the loss of housing value in the last year is around 18%, lower in many areas and a bit higher in others. Even though it was worse than 1930 we don’t remember the 1920 depression because the President didn’t tinker with the economy and built the groundwork to allow quick recovery without wide spread damage.

That President? That was Warren G Harding. Harding “embraced the advice of Treasury Secretary Andrew Mellon and called for tax cuts in his first message to Congress on April 12, 1921. The highest taxes, on corporate revenues and “excess” profits, were to be cut. Personal income taxes were to be left as is, with a top rate of 8 percent of incomes above $4,000. Harding recognized the crucial importance of encouraging the investment that is essential for growth and jobs, something that FDR never did.”

Under Harding, GNP rebounded to $74.1 billion in 1922. The number of unemployed fell to 2.8 million, s reported 6.7 percent in 1922. Then fell again in 1923. So, just a year and a half after Harding became president, the Roaring Twenties were underway.

The Secretary of Commerce? That was Herbert Hoover who wanted government intervention in the economy … which as president he was to pursue a decade later when he transformed the second Great Depression into the beginning of a disaster.

Jim Powell at the Cato Institute also presents a history of this depression, and how it was corrected:

Harding’s Secretary of Commerce Herbert Hoover wanted government intervention in the economy— which as president he was to pursue when he faced the Great Depression a decade later— but Harding would have none of it. He insisted that relief measures were a local responsibility.

Federal spending was cut from $6.3 billion in 1920 to $5 billion in 1921 and $3.2 billion in 1922. Federal taxes fell from $6.6 billion in 1920 to $5.5 billion in 1921 and $4 billion in 1922. Harding’s policies started a trend. The low point for federal taxes was reached in 1924; for federal spending, in1925. The federal government paid off debt, which had been $24.2 billion in 1920, and it continued to decline until 1930.

Conspicuously absent was the business-bashing that became a hallmark of FDR’s speeches. Absent, too, were New Deal-type big government programs to make it more expensive for employers to hire people, to force prices above market levels, or to promote cartels and monopolies.

With Harding’s tax and spending cuts and relatively non-interventionist economic policy, GNP rebounded to $74.1 billion in 1922. The number of unemployed fell to 2.8 million— a reported 6.7 percent of the labor force— in 1922. So, just a year and a half after Harding became president, the Roaring Twenties were underway. The unemployment rate continued to decline, reaching an extraordinary low of 1.8 percent in 1926. Since then, the unemployment rate has been lower only once in wartime (1944), and never in peacetime.

The Roaring Twenties were a time of unprecedented prosperity. GNP expanded year after year without inflation. Productivity improved, and real wages increased. The stock market tripled. There was a dramatic expansion of the middle class. The Great Migration occurred during the 1920s, with some 7 million African-Americans moving north for better schools and job opportunities. Women had the vote. Millions of Americans began to buy cars, originally a luxury of the rich. People bought radios that enabled ordinary people to hear the finest entertainers in their own homes. Movies became popular. Frozen food made possible a more varied diet year-round. Doctors developed new medicines to fight deadly diseases like diphtheria and tuberculosis.

While Harding can hardly be considered a champion of laissez-faire economics (he supported tariffs, after all), the pro-growth policies he implemented are directly responsible for the astonishingly rapid growth in prosperity— and widely shared prosperity— America enjoyed throughout the Roaring 20s.

I was told in school that the progressive New Deal policies of FDR saved America from teh Great Depression, and the Left has touted this advice for us in the wake of our current economic downturn. Of course, history clearly shows that not only did the New Deal not end the Great Depression, it probably prolonged it.

I can’t understand how anyone can sit with a straight face and tell us that the best way to come out of a recession is to increase taxes, government spending, and debt. The Left had been crying out for government regulation of the economy to “fix” it, despite the fact that the imposition of socialist controls on the housing and lending markets are what caused the housing bubble to begin with. It seems very apparent to me that Socialism in general propigates itself by creating the very problems it calism to offer a solution to, like a vacuum salesman who dumps dirt on your carpet.

Let the American people excell, already. Leave us the hell alone, and we’ll do what we need to do to get back on track. It has worked before, and it can work again, if you let it.

And for your viewing pleasure, a vidoe discussing the Great Depression and responses to it:

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

Movie Review: What’s the Matter with Kansas

2010-02-13T13:48:00.000+02:00

Background and Context

I am a big fan of Thomas Frank’s book, What’s the Matter with Kansas: How Conservatives Won the Heart of America which I reviewed in 2007. The book was an exploration of why many working class Americans seem to vote against their economic interests and consistently and reliably vote Republican. Frank’s answer, in a nutshell, is that the Democratic Party since the 1990s has abandoned its populist roots to become the other party of corporate interests and Big Business. With both major parties in collusion with Wall Street and big business and no significant difference between Democrats and Republicans on economic issues, working-class voters really have no choice or platform to vote for or against in a two-party system except so-called “values” issues such as gay marriage, abortion, gun ownership, prayer in schools, etc. And in this arena, Republicans have the Democrats beat as they have honed their appeal to social conservatives.

Frank’s book became very influential the past decade and was hotly debated in political circles on the liberal end of the political spectrum. It became a lightning rod for discussion on the policy thrust and direction of the Democratic Party and where it is going to go in terms of its appeal to working class voters in the future.

In late 2009 I heard that a documentary came out based on Thomas Frank’s book. I was highly excited about the film, being a huge fan of the book and having followed the discussions which centered on the question of the Democratic Party appealing to and actually representing the interests of working class and middle class voters. I was curious how the arguments that Frank made will translate to the film medium and what type of angle the film will take. I was especially curious how the film would hold up illuminating issues in the post-Obama era of American right-wing politics: the rise of conservative populism of the Tea Parties; the popularity of right-wing talk TV and radio personalities Glenn Beck and Rush Limbaugh; the rise of Sarah Palin and her impact among working and middle class voters, etc. I wanted to see if the film shed new insights to Thomas Frank’s basic question of why the right wing and the Republican Party are so popular among people who are being steamrolled and whose interests are being gutted by the policies of politicians who subscribe to conservative ideology and who belong to that political party. What angle does the film take, if any, in regards to this question?

The Film

The filmmakers of What’s the Matter With Kansas created a documentary that presents the characters and ordinary people who inhabit the political universe of Kansas in 2006 and 2007 largely as they are without making any judgments on their characters or their political affiliations. The filmmakers do not explicitly indicate if they intend for the economically depressed Kansas in the mid- 2000s and the Republican conservatives that have made a political stronghold in that state to serve as a microcosm of American society in general. That point is largely inferred based on the book that the film was based on. The film largely lets the characters tell their stories in their own words, without providing narration, voiceovers, and with background factual information largely absent. The viewer is largely left to see the characters as they are and to come to their own conclusions.

What’s the Matter With Kansas, thus, functions and is best understood on the level of metaphor rather than as a straight-up, political documentary in the style of Michael Moore. In fact, the movie seems to be the antithesis of the brash, in-your-face style of Moore who takes a position on an issue and runs with it, each scene designed to support his argument and rebut his critics. What’s the Matter with Kansas flows organically from vignette to vignette and character to character each narrating their view of the world, politics, Kansas, economic issues in their community, religion, abortion, homosexuality, politics, activism, etc.

Without giving too much away of the documentary, the film culminates in some conservative followers of a politically-active, evangelical pastor losing hundreds of thousands of dollars they have invested and/or donated to a local amusement park (which has been serving as the headquarters for the church after the pastor was expelled from the main church for his Republican political activism) when the owner of the park filed for Chapter 11 bankruptcy. The well-meaning investors, all friends of the owner and devout followers of the pastor, are devastated and even raise the question of amusement park owner as a crook and a swindler.

I saw these events as a metaphor for the Republican Party (or the Democratic Party, for that matter) who, the film shows, supported and passed economic policies like NAFTA which has resulted in economic devastation in the American heartland. Could the two major parties be likened to crooks who have swindled ordinary Americans into supporting and believing in policies that, in the end, have been to their detriment?

The film also devotes a good amount of time to the history of Kansas as a hotbed of radical political activity in the 19th century. Female suffragists, Socialists, Populists and political radicals gravitated to Kansas and at one point in history, Kansas had Populist senators, governors and members in Congress. It was publishing a Socialist newspaper that rivaled the New York Times in circulation.

The book’s author, Thomas Frank makes a cameo and visits the radical cemetery where many of the figures from Kansas’ radical past are buried and a museum devoted to preserving artifacts from this era. He asks “what happened to Kansas?” to the archivist who says that in recent years, these facts and history have been largely forgotten.

What’s the Matter with Kansas Part II?

Since filming was done in 2006 and 2007, it is missing significant upheavals in American political and popular culture in recent years after Barack Obama’s election as President. The film largely focuses on the ideological battles between pro- and anti-abortion activists and the issue of homosexuality and gay marriage.

Fast forward to 2010 where conservative activism is explicitly angrier, economically populist and increasingly organized as in the rise of the Tea Party movement. I go back to my original question: does the film shed new insights to Thomas Frank’s basic question of why the right wing and the Republican Party are so popular among people who are being steamrolled and whose interests are being gutted by the policies of politicians who subscribe to conservative ideology and who belong to that political party?

I think a What’s the Matter with Kansas Part II is crying to be made in light of the events I described above. Yes, the film is relevant to presenting the values voter and the sway Republican Party and conservative ideology continues to have for a significant numbers of working and middle class Americans. In the post-Obama era in the wake of the economic collapse of Wall Street in 2007, bailouts and widespread populist anger, conservatism and the Republican Party, rather than be weakened and get marginalized to irrelevance, has experienced a resurgence with a vengeance.

These developments are counter-intuitive to me who sees conservative economic polices and the political party that largely advocated those policies as having been completely discredited by the economic collapse. Yet here we are in 2010 with Sarah Palin becoming a major player in national politics, the grassroots, anti-establishment energy of the Tea Party movement has become mainstream and co-opted by the Republican Party, right wing TV and radio as popular as ever. 2010 is about economic policy and how conservatism and the Republican Party continues to hold sway over a significant part of the population. What does this mean in terms of the American voter, the political choices that we have and the prospects of a radical uprising in the manner of the 19th century Kansas radicalism? If there ever were a time for 19th-century style Populist resurgence, it would be now. Yet the Right, inexplicably, seems to have the advantage on that end. Why?

The Liberal Arts Dude gives What’s the Matter with Kansas four out of five stars. Go see the movie when it comes to your area.

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

Why the big discounts?

2010-02-13T05:43:00.000+02:00

Being a book loving family, we get the weekly Borders’ discount vouchers sent to us, and from time to time we even go and use them. This week’s discount was a goody – 30% off one full-priced children’s book, one voucher per customer. So I promised the strangelings a Saturday morning trip to Borders, where they could spend their pocket money on a book each. They get 1/2 their age in pocket money, so the Misses Eight get $4 each, and Ms Eleven gets $5.50, totted up in a running total in a notebook. They have sizable balances at present, so it seems like a good idea to spend some of it on books, especially when such a big discount is offered.

When we got there, we found an even bigger discount on offer. It was a time based discount offered in store – 15% off one full priced book, or 25% off two, or 35% off three or more full priced books, on books purchased between 12pm and 3pm that day. We got six.

The sales clerk told me that she didn’t know anything about the discount until this morning, when the signs went up in the shop. It wasn’t a one-off; the same discount had been offered yesterday.

So why is Borders trying to get people to buy more books, right now. It’s not stocktake season, ‘though perhaps they are still trying to move stock they purchased for Christmas. If so, that might indicate that they are having some cashflow difficulties, trying to pay for Christmas stock without having enough cash coming in from customers, in which case watch for more discounts coming up. Or maybe they are trying to convert the large numbers of bookstore browsers into book buyers, again, as a way of getting more cash.

Are Borders stores elsewhere in Australia and New Zealand offering the same sort of discounts? And does this show some kind of trouble?

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

Dear Lord, Send Us Another SnowNami...and Save Our Economy

2010-02-11T20:56:00.000+02:00

Let it Snow--Keep the Feds at Home

Economic experts have concluded that the DC SnowNami blizzard has resulted in $300mm in “lost productivity”. My view is a little different. I think we’ve saved BILLIONS, because during the past three days, federal government workers haven’t been able to impose any more bonehead rules on the rest of us regular folk.

If it only costs $100mm per day to keep these people at home, I propose that we insist on paying them a year’s worth of salary to STAY AT HOME where they can cause only a limited amount of trouble.

The enormous savings in treasure and trouble will pay off the deficit in record time.

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

What is growth? What is capital? What is economics? Power.

2010-02-11T13:44:00.000+02:00

The Great Recession proved, once again, that economic experts understand no more about the world than any of the rest of us. Yet, despite repeated wayward forecasts, their subject – economics – remains, ideologically at least, the most powerful lens through which to see the world. When we and the politicians we (barely) elect, talk about spending cuts, pay rises, the cost of war and an infinite number of other issues, we frequently rely on economics and all the assumptions that underpin it.

Lifting the veil on the subject reveals a mess of tangled ideas about how the world works, one of the most important of which is the concept of ‘capital’. It’s a strangely slippery idea.

Mainstream economists, the ones who populate newspapers, think-tanks and banks, talk about two things when they talk about capital. The money in your bank account – ‘financial capital’ – and, at the same time, the machines (like a printing press) that help make the things we buy, what they call ‘capital goods’.

To make these two different things into one, important questions need answering. Firstly, are ‘capital goods’ actually productive – does a machine, in itself, produce the goods we need?

Mainstream economists insist they are. This is what makes the second part of capital – financial capital – valuable. Why? If machines print the books we need, and money can by the machines to print the books, then money is a valuable thing to have.

Money gives you the ability to purchase the means of making something. So, if the economy grows, and people are making more profit, what do they gain? The ability to buy more capital goods which will produce the things we want. Financial capital is the ownership of future production.

Assuming that is true (gulp), the second question is how does the productivity of the capital good (the printing press, in our example) affect the value of ‘financial capital’? i.e how do the two parts of capital – machines and money – relate?

Mainstream economists say the value of the money capital – profit, saving etc – depends on how productive the capital goods are. How much it can produce compared with how much it costs – what economists call the ‘rate of return of capital’. If the printing press machine makes £1m worth of books and cost £0.5m to buy – it is clearly valuable. But wait, I hear you cry! A problem! To find the exact value of capital, mainstream economists need to know the… value of capital. It’s an irrevocable circle that destroys mainstream economic theory.

This slightly disconcerting observation* came out in the 1960s (check out the Cambridge controversy) and despite mainstream economists becoming ever-more revered since, there has been no resolution. Instead it is simply glossed over.

Fortunately, there are some economists, now driven to the margins, that have a different story to tell. Economic Marxists thought ‘capital’ was nothing more than hard work. A ‘capital good’ – machine, or what have you – is simply the culmination of hours of human labour. So the printer that makes the books we buy was at some point made by someone. When a company produces books and sells for a profit, what they end up with is a figure, say £50, that can buy a chunk of ’socially necessary’ human labour time. Its ‘value’ is the number of ‘socially defined hours’ (ie, given the external conditions and ‘average skill’ of all workers), it can buy. To economic Marxists, value is made by labour. Profit, (or ’surplus capital’ as they like to call it) comes from paying workers less than the value of what they produce.

Yet this doesn’t quite work out.

Imagine a number book printers, all equally productive, and competing with one another for customers. They have to lower prices in order to sell more than their competitor, and, if they all had similar technology the only way to produce more (and drive price below your competitor) is to extend the working day from 10 to 14 hours.

But if they all did, no one would any extra profit. Indeed they would lose profit, because everyone would have lowered prices equally, and so wouldn’t have gained any more customers. The value of the finance capital they produced (profit) is less, despite the dramatic increase in the working day. So labour hours go up, but capital earned at the end goes down.

The value of capital is apparently neither a quantity of labour hours (as the economic Marxists say) or the ‘productivity of capital goods’ (as the mainstream suggest), instead it comes from the ability for one producer to differentiate their costs from another. Why? Profit comes from selling something for more than it cost you to make it. But the price you can charge depends on your competitor. If it costs her £20 to make a book, she can sell it for £21 and make a profit. If it costs you £18, you can sell it for £20 and make double the profit.

So what is the profit you’re making? Because economics likes to think of itself as a science, it tries to reduce the world to numbers. But the numbers are not an ‘objective’ quantity (like hours of labour or productivity of a machine), they are social quality: the ability to beat your competitor – the power to stop them being as productive as you.

It may not sound revolutionary, but if economists viewed the world through an understanding that capital is power – a social category, rather than productivity – a scientific ‘fact’ – they would be much better placed to understand how it grows for some and shrinks for others.

*Note, the wibble is simplified, to the point of inaccuracy probably, from a load of equations I don’t understand.

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

Interesting speaker series...

2010-02-11T05:39:00.000+02:00

The Chester Ronning Centre for the Study of Religion & Public Life - Philosopher’s Café Series: Thinking Our Way in a Time of Crisis No registration/fee required to attend these events. For more information: www.augustana.ualberta.ca/ronning This series hosted at Steeps, The Urban Tea House, 11116 – Whyte (82nd) Avenue, Edmonton 1) Is the Natural World a “Resource”? Animated by Glen Hvenegaard (Professor of Environmental Studies and Geography, Augustana Campus, University of Alberta. Saturday, 13 Feb. 1:00–3:30 p.m. 2) Is Economic Growth Always Good? Animated by Gordon Laxer (Professor of Sociology, University of Alberta) Saturday, 27 Feb. 1:00–3:30 p.m. 3) Changing Our Ideas About Progress Animated by Dittmar Mündel (Professor, Religious Studies and Philosophy, Augustana Campus, University of Alberta) Saturday, 13 Mar 1:00–3:30 p.m. 4) Is the Good Life the Pursuit of Happiness? Animated by Archbishop Lazar (Abbot, All Saints of North America Monastery, Dewdney, BC) Saturday, 27 Mar 1:00–3:30 p.m. 5) How Should We Rethink the Purpose of a Liberal Arts Education? Animated by Roger Epp (Dean, Augustana Campus, University of Alberta Saturday, 10 Apr., 1:00–3:30 p.m. 6) Is it Possible to Find a Comfortable Place for Death in Our Approach to Life? Animated by David J. Goa (Director, Chester Ronning Centre) Saturday, 24 Apr., 1:00–3:30 p.m.

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

A global structure of society and economics! I use the United States and Somalia!

2010-02-09T21:13:00.000+02:00

There are many types of societies in this world and since the beginning of time more have developed. Society is a grouping of individuals characterized by common interests may have distinctive culture and institutions. Social scientists have identified five types of societies based on various levels of subsistence technology: hunting and gathering, horticultural and pastoral, agrarian, industrial and postindustrial societies (Kendall 141). - Jamboree

If we are to compare our own society with another elsewhere in the world, lets look at the our own country. We live in the United States which can have many types of societies, my particular society I believe is a combination of an industrial and a postindustrial society. An industrial society is one that is based on technology that mechanizes production (Kendall 145). For example, we still produce things in factories like cars, computers, electric lights, telephones, and most of what we see would not exist if not for industrialization. Most of what we own is a product of an industrial society. On the other hand, a post industrial society is a society in which economic transition has occurred from a manufacturing based economy to a service based economy. This economic transition spurs a restructuring in society as a whole (Ritzer 1). In a postindustrial society banking, law and the travel industries are examples of forms of employment, whereas producing steel or atutomobiles is representative of employment in industrial societies, all of these things are happening here in the United States.

Economy depends largely on the type of society you have and the type of society you have can be dependant on the economy. The economy here in the United States has been the talk of many people lately, on the news, in newspapers and magazines and in the the current presidential debates. The economy of the United States is the worlds largest national economy. It is a mixed economy and private firms make the majority of microeconomic decisions, while being regulated by the government (Wikipedia). We are fortunate enough to be an industrialized nation that is able to produce many things for export and sale also

Based on research Somalia is a mix of a horticultural and pastoral society. The somali nation relies heavily on farming and domestication of animals as a food source. Horticultural societies are based on technology that supports the cultivation of plants to provide food, and a pastoral society is based on technology that supports the domestication of large animals to provide food (Kendall 142). The horticultual society is able to grow their own food with hand tools and things of that sort for a steady source of food. When inadequate moisture in an area makes planting crops impossible, pastoralism-the domesticaion of large animals to provide food-developes(340). In Somalia the average ranfall is less than 20″ per year which is not enough rainfall for most plants to grow.

Somalias economy is divided between pasoralism and trade and is consitered a free market economy. Most Somali make their living by hearding camels cattle and sheep. Camels provide transport, milk and meat, and also serve as trade goods. They are exhanged with marrage agreements, and used to settle disputes. A small portion of the population inhabitsthe riverbanks in the souteast, where they cultivate irrigated plots of bananas, sorghum, sesame, maise and vegtables(Lands 303). The modern Somali economy consists of a small export sector with the biggest commercial crop being bananas(New Book 225). They also export exotic products such as frankincense and myrrh collected from local trees (Lands 303). Although Somalia has several small industries most economic activity has been severyly disrupted by the collaps of government in 1976. There has been no effective national government in Somalia since 1991(Wikipedia). Income by Somalis who work in foreign countries such as the U.S. has become essential to the economy, as has financial assistance from other nations(New Book 225). Since the mid 1990’s, most aid has been provided by Islamic organizations in the Persian Gulf region. In late 2001, severe hardship occurred when the country’s leading financial institutions was shut down because of alleged links to the terrorist network responsible for the 9/11 attacks on the U.S. (Lands 303).

Economic progress in Somalia is decidedly mixed. As of January 2007, Somalia is still a fragile state with hundreds of thousands of refugees due to massive floods and the latest fighting of the civil war. However Somalia boasts lower rates of extremem poverty and, in some cases, better infrastructure than richer countries in Africa. However with a GDP of $600 per capita the country is still extremely poor (Wikipedia).

Society and economics are important subjects concerning our global structure today. There has been much concern here in the U.S. with the current standing of our economy and what the future has in store, many worry that a recession is inevitable. While many think that our economy is in jeopardy and not looking good, we should take a step back and look at economies in other countries. Some other nations don’t really have too much in place as far as an economy, so to them our economic structure may look wonderful. In this paper I will compare the society and economic structure of the Unites States with that of the Somali nation.

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

Welcome to the Cynical World of Market Research

2010-02-09T13:52:00.000+02:00

Guest post by The Pied Typer.

Working in market research can be described as being many positive things; intriguing, interesting, insightful and last but not least; a job which pays (not to be scoffed at, the way things are).

However, it can also be frustratingly cynical and it is this aspect of the industry which I wanted to relate to you, readers of Left Outside. When I began my employment, I optimistically thought I would become a part of an important business process; finding out what consumers want, and how best to serve them (admittedly to increase sales and boost profits).

This sadly, is rarely how I spend my day. Instead I often find my clients are PR companies looking for a stat or two which they can throw at whoever they need to, to convince them that their client’s service or product is exactly what they want or need.

For the purposes of an example; imagine that a car manufacturer has designed an engine which is impressively economical in its petrol consumption but the rest of the car, is well, unimpressive.

That manufacturer may become the client of a PR company to help them sell it, who will commission market researchers to survey consumers and produce results which will enhance the marketing of the car.

The survey will not be genuinely concerned by the preferences of car consumers, but instead it will be concerned only by how their purchasing decisions are influenced by a car’s fuel economy, so that the PR company can say how “xx% of consumers want a car which is …..”

Specifically, how do I do this? And how do I get frustrated by the cynicism of it?

Let’s explore my hypothetical client of a car manufacturer a little closer.

The PR company may want to ask the question:

Which of these factors influence your car purchasing decisions? (Please select all answers which you feel apply to you)

Cost
Reliability
Speed
Appearance
Comfort
Size
Fuel economy

A cursory glance of this question may leave you thinking that there isn’t much to be cynical about. However, take a closer look at this question, try to answer it yourself and you’ll find that you would probably select every one of these answers (or at least I would).

Put it this way, I wouldn’t buy a car that:

I couldn’t afford,
I knew to break down often,
Couldn’t go above 30mph,
Looked like it had been made by a five year old with a new found love for pentagons
Had cactus leaves for seats
Was so small that only a contortionist could get into it
Could only travel 5 miles on a £50 tank of petrol

Ok, perhaps a slightly extreme look at that question, but I feel my point is made – ask that question and it is likely that almost everyone answering the survey would select fuel economy.

Instead, in an attempt to ask the questions we are supposed to, but do so with intentions bordering on honest well meaning research, I would like for people to only be allowed to pick three answers or even one answer and pick the one which is most influential.

But that would make less people pick the answer our client wants, and reduce that almighty percentage they want to shove down your throats in their marketing.

Who cares about good intentions, honesty or integrity? They’re paying us aren’t they.

After all, if surveys tell us 99% of Market Research companies do it, it must be okay! I think that’s enough of an introduction to the world of market research for now, more on the cynicism (and maybe occasional insight or intrigue) I encounter for another time.

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

Technology

2010-02-09T05:55:00.000+02:00

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

We don't really care what you do to them

2010-02-07T21:55:00.000+02:00

If you’re a ruthless, amoral corporation looking to make a fairly easy buck off other people’s suffering, you can’t go past running prisons.

The recipients of the services you provide – prisoners – are the most hated and least sympathetic characters in society, so very few really care how badly you treat them. Okay, when you kill them through negligence there’ll be some adverse findings that’ll be embarrassing for your company, but the decision-makers won’t really care. Their masters, the public, choose to believe the absurd lie that you’re treating prisoners to some kind of luxurious holiday accommodation (at taxpayers’ expense!!11!), despite the fact that makes no sense on any level.

Okay, so the skeptical might ask – how are you meant to make a profit out of running prisons? Surely the state was already spending the bare minimum it could get away with to keep prisoners alive and not have UN inspectors investigating the joint? How can you bid less and carve out a profit margin? Well, firstly, “efficiencies”, which obviously mean crappier conditions for prison employees than the state offers. (Don’t worry, they won’t get too angry with you – they’ve got prisoners to take their frustrations out on.) Secondly, you can make conditions much worse for prisoners than the government could get away with. Your whole value to the minister is a blame-shifting device – when things go horribly wrong, responsibility can be diluted and outrage disippated between the two of you.

Check out what G4S has been able to get away with and still be the “preferred tender” for the Melbourne Custody Centre:

“The private security firm was last year named in a damning West Australian Coroner’s report, which found it had contributed to the ”wholly unnecessary and avoidable death” of a 46-year-old Aboriginal man in its custody in January 2008.”
“contributed to the 2005 death of Ian Westcott, who died of an asthma attack in the G4S-run Port Phillip prison. A note found near his body read: ‘Asthma attack. buzzed for help. no response.’”
“the company had failed to provide a safe environment at Port Phillip when four men hanged themselves in 1997.”
“A 2006 report by the Victorian Ombudsman and the Office of Police Integrity found inadequacies in the way prisoners were transported, with insufficient attention paid to their conditions, including ”basic amenities for long trips””

I mean, don’t go insane. Minimise the problems as best as you’re able, within the primary goal of cutting costs – but you can get away pretty much with murder. Nobody will care. Particularly when your chief competitor is even worse.

The only people who will object are human rights advocates. And who listens to those?

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

The Story of Stuff

2010-02-07T13:18:00.000+02:00

In my post “Living, Driving and Flying the Talk?”, I mentioned that “It’s important to note that much of India and China’s industrial CO2e/y is emitted due to their manufacture of products for Americans and Europeans.”

To shed more light on this problem I will turn you over to Annie Leonard and let her tell you “The Story of Stuff” which will increase your awareness of the implications of stuff and likely change the way you live and work.

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

Australian Government to end wholesale guarantee of banks.

2010-02-07T05:24:00.000+02:00

The Treasurer, Mr Swan, has announced that the Australian Government will withdraw the Guarantee Scheme that has underpinned wholesale funding of authorised deposit-taking institutions. Fixed term instruments already secured by the scheme will continue to be covered until maturity. Redemption of “at call” deposits will be assured up to October 2015. The Government will also close its guarantee of State government bond issuances. Read the Treasurer’s announcement …

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

The Wheels Continue to Wobble

2010-02-06T21:53:00.000+02:00

Director of Greenpeace U.K., John Sauven has called for the author of the IPCC Report on Climate Change, Rajendra Pachauri, to step down because he did not report the flaw in the Himalayan glaciers – even though he knew about the flaw two months before the failed Copenhagen Conference.

(You know, the Global Whatever conference that Madam Pelosi et al spent more than $1 million attending, and she paid $2,200 night for her hotel room?)

It is the British, previous leaders in Global Wahtever, whose people and press are so embarrassed by the East Anglia e-mail fiasco that they are digging into the subject with some relish.

So, now ABC News quotes the Times of London about still ANOTHER “mistake” – publishing ANOTHER non-peer reviewed study – this time by the World Wildlife Fund:

“Now an article in London’s Sunday Times carries the headline “UN climate panel shamed by bogus rainforest claim”.

The article questions the IPCC’s decision to cite a WWF report to support its claim that 40 per cent of Amazonian forests could disappear as a response to declining rainfall and even be replaced by tropical savannah.

WWF Australia chief executive Greg Bourne says that is not what the WWF report said and he wants to know where the IPCC conclusion came from. “

http://www.abc.net.au/news/stories/2010/02/01/2807122.htm?section=world

Of course none of this says that Global Whatever is not true, but it does say that “science” is not always science.

Remember it was just a few days ago that the Lancet withdrew a 10 year old study that linked vaccinations with autism.

Bad science is bad science

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

Virginia Seeks Additional 5% Auxiliary Cut from State Colleges & Universities

2010-02-06T13:24:00.000+02:00

To help close the state’s $4 billion budget hole, Virginia lawmakers may force each of the state’s higher-learning institutions to redirect 5% of their auxiliary funds to the state’s general fund. Auxiliary funds pay for things not directly related to a university’s academic mission, such as athletics, housing, and parking. By law, taxpayer money cannot be used to fund auxiliary accounts.

The proposal buried deep in former Gov. Timothy M. Kaine’s two-year budget plan would require each public higher education institution to shave off 5 percent from its auxiliary operations account and redirect the cash to the state’s general fund. The move is part of an effort to close a projected state revenue shortfall that will almost certainly exceed $4 billion.

The universities, however, object to the idea. The entities being targeted by Kaine’s budget knife receive no money from state taxpayers by law, they point out. Seizing cash from such self-supported entities, they say, would inevitably lead to higher student fees for housing, parking and much more.

Every school would be forced to pay out 5% of its available money in auxiliary accounts, but UVa, James Madison University, George Mason University and Radford University have such large balances that their contribution to the state would exceed all the other schools combined.

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

Weapons for Taiwan, middle finger for China

2010-02-06T05:11:00.000+02:00

The US and Taiwan have good relations. Though the US does not officially recognise Taiwan as independent from China, like the rest of the world it treats Taiwan as what it is: a de facto independent state. And now it is apparently time for a new arms deal between the US and Taiwan. The US sells arms to just about everyone, so why not to a little island in the Pacific? What could China possibly be angry about?

If you answered “a lot”, you not alone. Since the government of China considers Taiwan a renegade province which will, inevitably, one day be reunited with its true owners, and since a huge number of people in China fervently agree, American arms sales to Taiwan are a kind of provocation. If the Chinese government sold weapons to al Qaeda, Americans would feel approximately the same as the Chinese do at present.

I believe that any group of people that wishes to be independent should be, regardless of what some militant nationalists say. Therefore, I am all in favour of Taiwan’s continued independence from China. However, there is no reason to provoke China by selling Taiwan another $6.4b in arms. As I said, I support independence, and the US government has already made it clear that it does too. It established the Taiwan Relations Act in 1979 and updated it with the Taiwan Security Enhancement Act in 2000. The Acts both authorise arms sales but the central clauses state in clear terms that the United States guarantees Taiwan’s security and independence. Why antagonise China further?

The United States needs China. Its government, in particular, through decades (or at least one decade) of myopic policies, is financially dependent on China like a teenager with a credit card is dependent on his father to bail him out. The two countries are, of course, economically interdependent; witness the Chinese government’s understandable threat of sanctions on American arms manufacturers. They should be cooperating more on political and military levels–in the Security Council; on East and Central Asian security matters, where their interests coincide; on Iran, which for some reason Barack has a desire to punish but which China is wisely declining to rush into a decision on; the list continues. Neither has an interest in war with the other.

The problem is, at root, one of ego. China and the US both see themselves, at a cultural level, as the rightful superpowers of the world. Each needs to be the best in the world, the biggest, the richest, the fastest, the strongest. Over the next generation, we will see this playground need for supremacy play out everywhere from the oceans to the Olympics. But why do we need to be number one? Surely, we should be working to be better than our former selves, not better than others. But instead of setting our own goals and working with others to achieve them, we treat others as competitors and train to beat them, even cheating or holding them down if necessary.

Only through recognising their common interests and cooperating on them will the US and China avoid violent collision. Billions of dollars in arms sales to Taiwan is not the way to build a partnership that affects the entire world.

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

McCain feeling the AZ heat in February

2010-02-04T21:52:00.000+02:00

The Wall Street Journal reports on John McCain’s increasing disconnect with Arizona’s GOP voters.

The issues that divide him from the Republican base are numerous, but McCain’s 2008 vote for the $700 billion bank bailout and his opposition to President George W. Bush’s tax cuts never played well with conservatives. Nor did his opposition to drilling in the Arctic National Wildlife Refuge (ANWR), his sponsorship of the restrictive (now declared unconstitutional) McCain-Feingold “campaign finance reform.”

McCain’s Mavericky teaming up with the Senate’s most liberal members and pushing for amnesty for the millions of foreign nationals who have entered the U.S. illegally has alienated many grassroots Republicans. His proposal to close Guantanamo Naval Base and try terrorists in U. S. Courts won him no fans – a position he is now veering away from.

A Rasmussen Reports statewide poll found that 61% of Arizona Republicans think McCain has lost touch with those in his own party. That’s the good news. The bad new for him is that’s up eleven points from 50% four months earlier.

Arizonan’s now have a conservative option. Former Congressman J.D. Hayworth, who has filed to run for the U.S. Senate is sending shock waves through the McCain camp. While Hayworth’s campaign event to make a formal announcement will not occur until February 15, he is already in full stride — much to the chagrin of John McCain.

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

Enforcing Flawed Trade Deals

2010-02-04T13:45:00.000+02:00

http://www.reuters.com/article/idUSTRE6131YM20100204

No sooner do I announce plans to scale back on posting articles when along comes something I can’t resist. The above-linked Reuters article reports on an announcement by Commerce Secretary Gary Locke of plans to boost enforcement of trade deals in an effort to achieve Obama’s promised doubling of exports in five years. There are a couple of key points that need to be made here.

First of all, I have spent virtually my whole adult life listening to presidents, Commerce secretaries and U.S. Trade Representatives vowing to get tough on trade deal enforcement. This effort will turn out no differently. If anything, exporting nations are relieved to have the focus drawn away from the import side of the equation.

Secondly, the following passage from the article can’t pass without comment:

“While the U.S. is a major exporter, we are underperforming,” Locke said in the excerpts given to reporters. “U.S. exports as a percentage of GDP are still well below nearly all of our major economic competitors.”

The competitors Locke speaks of are primarily China, Japan and Germany. Back in early November, Obama challenged his economic team with the question, “If Germany can build an economy on exports, why can’t we?” (See Obama on Trade: “If Germany can do it, why can’t we?”.) America is not “underperforming.” It’s not about “competing.” The problem is that the field of economics doesn’t yet recognize or understand the role of population density disparities in driving global trade imbalances. Boosting our exports means that nations like China, Japan and Germany have to boost their imports – their domestic consumption. If they were capable of such domestic consumption, they wouldn’t have the need to export so much in the first place, nor would they have the excess production capacity to do so.

I don’t doubt the president’s sincerity. Every president for the past 30 years has understood the need to restore a balance of trade. But Obama is the first post-global economic collapse president and, as such, the first to have an added sense of urgency brought on by a realization of the ultimate consequences of sustained trade imbalances. Unfortunately, he’s fallen back on the same worn out approach of enforcing trade deals when it’s the deals themselves, lacking population density-leveling mechanicsms, that are the problem.

But this time, time is not on his side. The era of sweeping trade imbalances and their consequences under the rug has ended. The U.S. is economically boxed in on all sides by high unemployment, global demands to rein in our budget deficit and a Federal Reserve with an empty tool box. So the only question is how soon the president will run out of patience with the export-focused approach and turn his attention to imports.

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

Brian Arthur, "The Nature of Technology" (MP3 audio), Tech Nation, IT Conversations, 2009/08/25

2010-02-04T05:06:00.000+02:00

Advances in technology are considered in economics, but the introduction of complexity science changes the perspective.

Moira Gunn speaks with Brian Arthur, author of The Nature of Technology.

The former Stanford professor discusses his theory of technology’s origins and evolution.

IT Conversations | Tech Nation | Brian Arthur

[MP3 audio]

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

monday stories for 2/2/10

2010-02-02T21:55:00.000+02:00

I’ve got a lot of projects in the works as of late, so my blogging might get a bit sparse the next few days. But here are some good reads for Monday:

1. Older and younger workers compete for part-time hourly jobs

Well good gods, no wonder it’s been such a bitch to find work. With an unemployment rate of 18% among those 18-24, what is this going to do to this generation? This is a very unsettling statistic because angry, intelligent and bored young people can do some dangerous things. See: Russian Revolution of 1917 and the entire decade of the 1960s.

2. Terror trials opinions:

Two good columns today about where to hold trials of 9/11 conspirators and other terrorists. Watch them face off!

If not NYC, where else could Obama’s administration possibly try the Guantanamo Bay prisoners? vs. Keep terror trials on American soil

3. Spray-on liquid glass is about to revolutionize almost everything

Now this is just cool. Check it out.

“Spray-on liquid glass is transparent, non-toxic, and can protect virtually any surface against almost any damage from hazards such as water, UV radiation, dirt, heat, and bacterial infections. The coating is also flexible and breathable, which makes it suitable for use on an enormous array of products.”

And since it is caucus day today, here’s a concise set of principles for all you conservatives to keep in mind while you discuss and propose and poll tonight:

You cannot bring about prosperity by discouraging thrift.
You cannot strengthen the weak by weakening the strong.
You cannot help little men by tearing down big men.
You cannot lift the wage earner by pulling down the wage payer.
You cannot help the poor by destroying the rich.
You cannot establish sound security on borrowed money.
You cannot further the brotherhood of man by inciting class hatred.
You cannot keep out of trouble by spending more than you earn.
You cannot build character and courage by destroying men’s initiative and independence.
And you cannot help men permanently by doing for them what they can and should do for themselves.

—William John Henry Boetcker (1873–1962)

(thanks to On caucus day, ten truths for conservative candidates)

Have it good,

-Mike

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

The Dukes of Moral Hazzard

2010-02-02T13:52:00.000+02:00

I know it’s hard for most to read a rant about such a heady topic from somebody who:

1- Can hardly spell

2- Spends his free time killing brain cells with beer

3- Still idolizes Luke Skywalker

4- Is unable to add or subtract without a calculator

5- Collects nazi things.

Let me start by saying that by no means do I believe that our President or Govt or Ben Bernanke is intentionally harming the country or have hatched a diabolical plot with Socialist designs. I do feel that Bernanke is an arrogant twat who thinks he can use the current crisis as a means or an excuse to change the rules to suit his needs and entirely change the roll of the Fed. Obama is just a limp dick. People don’t understand what the Fed is sposed to do in normal times much less how egregious their actions have been of late. Even Paul Volker has mentioned the Fed’s actions have been borderline illegal. Removing private risk and placing it onto the shoulders of the tax payers is unacceptable. The man should be arrested.

“Treason doth never prosper; what’s the reason? For if it prosper, none dare call it treason.”

Sir John Harrington, 1600 (circa)

Unprecedented fiscal and monetary stimulus programs have “come at the cost of significant increase of risk to sovereign balance sheets and a consequent increase in sovereign debt burdens that raise risks for financial stability in the future, We have transformed the banking crisis into kind of a sovereign solvency crisis by buying up a lot of private securities and auto companies and so forth,” We’ve dealt with the consequences of vaporizing $3 trillion of private demand in the U.S. by providing a lot of public demand.” -IMF

My pal Joe got me thinking on Sunday when discussing the Fed. He said something like “what would we do if we didnt have the ability to print money?”

This has been debated since our forefathers and long before central banks. Central banking was brought in only after it was decided that it was easier to finance things, such as wars, by printing money instead of taxation. What people still to this day fail to see is that printing money is just as good as increasing taxes. Instead of taking money out of your wallet, the Govt simply makes the money in your wallet worth less through inflation or the lack of de-flation.

IMHO If we didnt print money we would certainly have less booms and therefore less busts. Printing money is bad. Not good. Inflation is bad. If you dont believe me go back to Germany 1923. If Germany doesn’t suffer inflation we dont have the 3rd reich. No Hitler! No cool tunics or Camo helmets. (ok, maybe inflation has some pros)

But honest, inflation is very very very bad. But you may have noticed we are not experiencing inflation now and the Fed is just printed truck loads of cash. What gives? I will discuss deflation later, but first —- BUBBLES

Printing money causes assets prices to inflate (assets such as investments/real estate are not included in the inflation/CPI figure)

BUBBLE BUTT BUBBLE BUT …

So, what the fuck is wrong with higher asset prices? For those of you who slept through recent crisis allow me to present exibit A – the real estate bubble. (I cant go into detail, but prices went up, (the bubble) prices went down, people lost jobs, the Fed saves the banks yada yada ydada…

Lets discuss the current asset bubbles – the equity and MBS (mortgage-backed securities)

Its important that you understand that Investments are a zero sum game (nobody pays DIV anymore). If Google made 133 Billion this quarter the stock would not move unless more people bought it than sold it. Simple.

The MBS market works the same way and we will spend the next 5 minutes (depending on how fast you can read) talking about MBS.

The MBS market has catapulted to nose bleed levels this past year. The reason for this? The obvious reduction in home foreclosures? the vast amounts of unemployed finding high paying jobs right?

Fuck no.

More people purchased mortgage-backed securities than sold them.

(Well, just one person purchased them – Ben “fuck face” Bernanke)

See, about a year ago the fed sent a note to banks and other large investment houses (see PIMCO / Blackrock etc..) which said:

“Guys, the boys and I have decided to buy a fuck load of MBS paper so you may want to wait and unload your smelly paper on us. Sheet, even buy some in anticipation. Yours truly – BBFF”

The shit face banks and PIMCO etc agreed to buy treasuries with the proceeds of their MBS sales.

Bill Gross coined this agreement “shaking hands with the Govt”

SO, the fed printed a shit load of money and purchased MBS (and other crap, but we wont go there). Banks used the proceeds to invest in treasuries and the stock market and everything went up, crisis over and everything is totally fucking awesome … and NO INFLATION! Whats the big deal?

Not so fast honey fart. The Federal Reserve Bank, like any other bank, has a balance sheet – assets and liabilities, profits and losses (profits/losses are handed over to the US Treasury).

Assets:

MBS

Treasuries

Other (lost of speculation on what “other” means)

Liabilities

Interest on bank cash reserves. (No interest on the printed money. Sweet.)

In normal times the Fed holds almost exclusively treasuries and takes the coupon payments and hands over the cash to the Treasury.

(So the Treasury pays itself its own coupons/interest. Mull that the fuck over.)

Recently the Fed handed over $50 billion. Nice job guys! Purchasing MBS paper made the value of their existing paper go up.

(BTW the Fed is only supposed to purchase securities for a short period – i.e. not hold them to maturity.)

So when will the Fed sell their MBS? Will they be able to find a buyer for the 1,320,000,000 in MBS it has purchased … Hmmmm.

Now, listen up, the Fed said last year it will buy MBS until March this year. What is going to happen when they stop buying?

Its called massive fucking losses handed over to the Treasury. Add this to the massive losses handed over by Freddie and Fannie Mac and you can conceivably have a trillion+ in losses. Losses mean higher taxes or more printing. Printing will not be an option due to inflation so higher taxes and a lower standard of living is in our future.

But hey, better the govt shoulder the losses than private institutions right?

When private institutions over-leverage and default that institution suffers. When the govt over-leverages and defaults we are all fucked. Game over. Printing money. Bad.

But the Fed wont let the ponzi game end. They will announce soon enough that it will indeed not end the MBS purchases. Sure as my middle name is Glenn they, the ass fuck heads they are, will keep buying and buying and knitting and knitting and knitting … Also, When the Govt is all of a sudden the biggest swingin cock in the investment land there will undoubtadly be conflicts of interest … Example: If the Fed raises rates that will tank the value of their MBS book. So the Fed has come up with the idea of increasing the rate of interest on bank reserves instead. More free money for the banks and further entries onto the liability side of the ledger for tax payers. Also, raising rates will increase the debt service of the treasury, i.e. higher interest expense for those treasuries they need to roll over. It behooves the Govt to keep reates low for their own necks..

Yes, I mean what I am about to write (somewhat). The public anger directed at the banks is somewhat misplaced. Thats right, I said it. The banks are not to blame (entirely) for all that ails us. They came to the party, did some dancing and got a bit too drunk off the punch – but the party was thrown by our Govt and they spiked the punch bowl. (God, thats a corny metaphor.)

The Govt is just being gamed by the banks. Political “fat cats” have been attempting to sway public opinion against the banks in a pathetic attempt to deflect blame for their own incompetence. They orchestrated the housing bubble. They are now trying to reflate the asset bubble. The Govt is the problem. Just take a look what the Govt did directly after the last housing bubble burst – THE S&L CRISIS …

DID THE GOVT CREATE THE HOUSING BUBBLE ???

This is what the dopes did after the bank S&L crisis almost destroyed the economy.

The HUD Reform Act of 1989: To provide for refinancing of mortgages, loans, and advances of credit under the lower income homeownership program of section 235 of the National Housing Act.

The Federal Housing Administration, generally known as “FHA”, is the largest government insurer of mortgages in the world.

The Homebuyers and Renters Relief Act of 1989: To increase the affordability of homeownership for first-time homebuyers and promote the development of low-income rental housing.

The Housing Opportunity Zones Act of 1990: To remove legislative and administrative barriers to the production of new and substantially rehabilitated housing that is affordable to lower-, moderate-, and middle-income families.

The Department of Housing and Urban Development Accountability Act of 1989: To prevent abuses of the process for selection for housing assistance under programs administered by the Secretary of Housing and Urban Development.

The Community Housing Investment Partnership Act.

The Recycling of Existing Assets for Cost-Effective Housing Act of 1989: To authorize the Secretary of Housing and Urban Development to make grants to States to establish revolving funds to assist low- and moderate-income homebuyers and renters.

The Low-Income Housing Credit Act of 1989: To amend the Internal Revenue Code of 1986 to improve the effectiveness of the low-income housing credit.

The Low Income Housing Preservation Act of 1989.

The Housing Affordability Act.

Homeownership and Opportunity for People Everywhere Act of 1990 (The “HOPE” Act). “There are authorized to be appropriated for grants under this title $96,000,000 for fiscal year 1991, $260,000,000 for fiscal year 1992, and $400,000,000 for fiscal year 1993. Sums appropriated pursuant to this subsection shall remain available until expended.”

Fair Lending Enforcement Act of 1990: To amend the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act.

The Housing and Community Development Act of 1989.

The Housing and Community Development Act of 1990.

The Community Housing Investment Partnership Act.

The Homeownership Assistance Act of 1989: To authorize the insurance of certain mortgages for first-time homebuyers, and for other purposes.

The Home Mortgage Overcharge Prevention Act of 1989: To amend the National Housing Act to limit the amount of interest paid by a homebuyer upon the prepayment of a mortgage insured under the Department of Housing and Urban Development single-family mortgage insurance program.

The Neighborhood Mortgage Lenders Accountability Act: If any examination of an approved mortgagee by the Secretary (including an examination under subsection (d)) discloses that the mortgagee has failed, in the determination of the Secretary, to meet the lending needs of the community served by the mortgage (as determined by the Secretary under subsection (a)(1)) with respect to residential housing lending, the Secretary may, in the discretion of the Secretary, require that the mortgagee, for continued status as an approved mortgagee for purposes of this Act, develop and submit a plan for remedying such deficiencies.

The First-Time Homebuyers Assistance Act of 1989: To authorize the Secretary of Housing and Urban Development to establish a demonstration program to insure mortgages with no downpayment for moderate-income first-time homebuying families.

The Homeownership Through Sweat Equity Act of 1989: To authorize the Secretary of Housing and Urban Development to carry out a demonstration program of providing grants to housing development agencies to acquire abandoned and vacant housing for rehabilitation and rehabitation by homeless and low-income families.

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

"Deficit Peacock" Mike Crapo

2010-02-02T05:33:00.000+02:00

Who would co-sponsor a bill and then vote against it? Six Republican Senators including Idaho’s “Deficit Peacock”, Mike Crapo, that is who.*

Until Obama’s State of the Union speech, Crapo proudly proclaimed that he was a co-sponsor of the bipartisan Conrad-Gregg “Fiscal Task Force.” The Task Force would create an 18 member commission who, after review, would create a deficit reduction blueprint after the November elections that would be voted on before the new Congress convenes next year.

Republicans claimed the Fiscal Task Force as their own. It gave them a great way to attack the “tax and spend” Obama administration. Here, for example is what Senate Minority leader, Mitch McConnell , said last May:

We must address the issue of entitlement spending now before it is too late. As I have said many times before, the best way to address the crisis is the Conrad-Gregg proposal, which would provide an expedited pathway for fixing these profound long-term challenges. This plan would force us to get debt and spending under control. It deserves support from both sides of the aisle.

Always on the lookout for a way to increase his fiscal hawk cred, Crapo became an enthusiastic co-sponsor of the bill. So what caused the about face? President Obama endorsed the task force in his State of the Union.

Well, Crapo and his fellow Republican co-sponsors couldn’t find themselves in the position of supporting anything Obama favored, so, just prior to the SOTU, they withdrew their support. Commenting on McConnell’s vote against the legislation in an editorial in the Washington Post, Fred Hiatt said “No single vote could embody the full cynicism and cowardice of our political elite at its worst”. The same can be said about the cowardly seven co-sponsors.

Of course, after withdrawing their support, the seven Republican lemmings, including Crapo, voted against the bill. PolitiFact.com summarizes:

…on Jan. 26, 2010, when the Conrad-Gregg bill, originally introduced as S. 2853, came for a vote in the Senate, it fell seven votes shy of the Senate’s 60-vote threshold for passage, garnering 53 yeas and 46 nays, with one senator not voting.

The measure would have passed with 60 votes if only seven additional Republicans who had co-sponsored S. 2853 voted for it. Instead, those seven — Robert Bennett of Utah, Sam Brownback of Kansas, Mike Crapo of Idaho, John Ensign of Nevada, Kay Bailey Hutchison of Texas, James Inhofe of Oklahoma and John McCain of Arizona — withdrew their co-sponsorship in the days before the vote and then voted against it on the floor.

While McConnell and McCain have caught a bit of flak from the national media, Crapo flies under the radar as usual. Let me know if any local media point out the hypocracy. I won’t hold my breath.

* Paul Krugman calls anyone who claims to be a deficit “hawk” simply for political gain a deficit “peacock” and no one fits that description better than Crapo.

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

California Dreaming To Destruction

2010-01-31T19:04:00.000+02:00

1970 Los Angeles Airport Promo Video

Sarah, Maid of Albion

[...]

…..California in 1970 was booming, it, as a single state was to become the world’s eighth largest economy, it was the home of the Beach Boys, Silicone Valley and the Dream factories, it was where people went to become successful and the successful went to become more so.

Its’ cities were places people wanted to be. Los Angeles, the City of Angels, had only glimpsed the first hint of the escalating homicide, and wider crime, rate which over the following decades would turn it into the crime ridden realm of gangsters it has become.

[...]

But that was 1970, and how things have changed.

In the time it took a girl to grow to womanhood and raise a child to his teens, California changed from a land of dreams to a place which is starting to resemble a nightmare.

In [40] years non-Hispanic whites went from 80% of the population to just 43%, in percentage terms they have been cut all but by half.

Meanwhile, the once golden economy has all but collapsed, it has billions of dollars of debt and the state has now started paying its bills, including some wage bills in IOU’s, which it has very little idea when, or if, it will honour. It is said that, were California a company, it would be declared bankrupt, and even some Left wing papers such as The Guardian have begun to speculate as to whether California will become the first failed US state

So how did this happen? What brought about this total reversal in fortune? How did the state which had everything come to this? Was it a failure of Capitalism? A symptom of excess, or just more evidence of what our friends at the Guardian like to see, and greet with delight, as the inevitable decline of Western civilisation? Or does the answer lie in the first sentence of the paragraph above. Is the answer that a successful 80% white state has become a 57% NON-white basket case because of that staggering demographic change.

2010 GOOD BYE California

Immigration into California, both legal and illegal, has gone out of control over the past four decades. The amazing fact is that of the 100.7 million members of ethnic minorities living in the USA, 21% of them live in California.

Didn’t someone tell us that immigrants were supposed to be good for the economy?

…Full Article

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

Looks like the government did create a second depression

2010-01-31T13:15:00.000+02:00

Watchdog: Bailouts created more risk in system

January 31, 2010 by Daniel Wagner and Alan Zibel

WASHINGTON—The government’s response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

“Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” Barofsky wrote.

US economic rescue failing to meet key goals:auditor

January 31, 2010 by AFP

The 700-billion-dollar US government effort to rescue the financial system has failed to meet key goals such as sparking lending and curbing risky activities by banks, a special auditor said Sunday.

The special inspector general for the Troubled Asset Relief Program said in a report to Congress that it is too soon to measure the overall success of the program passed at the height of the financial crisis in October 2008.

The quarterly report said that because of TARP, “there are clear signs that aspects of the financial system are far more stable than they were at the height of the crisis in the fall of 2008.”

But the report also stated that “many of TARP’s stated goals… have simply not been met” and that the potential for a new crisis looms without major reforms.

…

Despite the explicit goal to increase financing to US businesses and consumers, “lending continues to decrease,” said the report from inspector general Neil Barofsky.

It also noted that TARP has failed to live up to the “explicit purpose” stated by Congress of “preserving homeownership and promoting jobs.

“The TARP foreclosure prevention program has only permanently modified a small fraction of eligible mortgages, and unemployment is the highest it has been in a generation,” it said.

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

Downsizing and The Dollar Store

2010-01-31T05:31:00.000+02:00

The dollar store is a good example of that creature commonly termed a phenomenon, something of apparent and great import which cries out for explanation. In every city they are popping-up almost like roadside weeds, taking advantage of meagre soil. You may pass them by without regard, but take a careful look and you’ll discover a good deal about the niche they exploit as well as their own remarkable qualities.

I can’t go into a dollar store without being impressed by the sheer productive capacity of industrialism. It’s impossible to overstate the ability of machines to make stuff, stuff of very low price and astonishing variety. Not only this, but there is almost an effortlessness implicit in the cheapness and abundance. Whereas scarcity of goods is the classical economic problem, here there appears to be a casual glut. The goods roll out by the millions in hundreds of factories and are shipped to thousands upon thousands of dollar stores. The numbers! And yet this feat occurs unremarked. The Socialist of an earlier era wrote hymns of praise to the awesome power of machines, but today we are supposed to forget about this power and instead dwell upon the ancient fact of scarcity: not enough jobs for workers, not enough money for social programs, not enough labour productivity to justify wage increases, not enough food to feed the children, etc. Austerity, based on diminishing expectations, is the order of the day. In contrast, the dollar store reminds us that at some point in our history (when?) we attained a technological level sufficient to solve the basic human problem of scarcity. It became possible, for the first time, to lift all people out of a condition of deprivation. There was no longer a technical reason for people to live without food, clothing, and shelter. Utopia, defined as a generalized state of physical well-being, was at this point not only thinkable but practical. There is so much wealth about, in fact, that it’s possible now to dedicate considerable resources to the manufacture of baubles. That, in a sentence, explains the phenomenon of the dollar store.

We’ve established then what a marvellous and unparalleled thing industrial-based capitalism is, so far as productive power is concerned. It’s fashionable to lament the destructive effects of the machine, but really, would you prefer to return to the simple days before penicillin and electricity? Neither would I. There is too much to give up to make giving up a viable option, and anyway we should admit also that we enjoy our mass-produced trinkets as much as the essentials, if not more. Even the notion of essentials has been changed by mass-production. You could hardly extricate yourself from the industrial system, but suppose you could. Historical evidence suggests you’d enjoy pollution-free food and drink – and die at 42, as a result of complications from a common cold. Industrialism, we should remember, was compelling because it emerged amidst the conditions of near-universal poverty and misery.

Needless to say poverty and misery are widespread even today. I’ve praised industrial capitalism’s quantity of production, but what about the quality of distribution? For instance, most of the goods come from China, a low-wage country. William Greider has coined the phrase “job arbitrage,” which means moving jobs from a high wage market to a low wage market, not to eradicate global poverty but indeed to take advantage of it. In the dollar-store universe, North America is significant only as a point of consumption, which is another feature of distribution. We’re told the market arrives at the best of all possible conditions, so don’t worry. But look at those conditions: the market has shuffled things with the result that the North American worker is becoming obsolete and the impoverished ‘developing-nation’ worker is exploited. That much has long been known and discussed, but what about the North American consumer? Will the market render this creature obsolete also? The dollar store is only representative of a universal trend – exportation of capital, goods, jobs, and indeed every other domestic function. Consumption is the only job we’re given in many industries. And you’re replaceable, you know. When the Chinese market is more fully developed, it may turn out to be cheaper and more profitable to sell the goods there as well. If workers can compete so too can consumers. The dollar store at least lowers the standard to the point at which the game becomes possible.

Is the dollar store, then, the cutting edge of an unintended consumer-force downsizing? Surely it trivializes the social roles which attend industrialism. Put the 99-cent Virgin Mary nightlights beside the Utopian-Socialist conception of human potential and you’ve got something which approaches contempt. The dollar store implies you aren’t really worth very much, even as a consumer. ‘Just spend your damn loonie and get out already’: this is what these places convey to me. You’re so close to being not worth the bother, 50-or-so cents away from lumpenprole. One suspects secretly that the store is a diversion to keep us from noticing the entire economy has at last been shipped-off somewhere else. All that remains are the beads and trinkets which have always attended such dealings. [-June 1998.]

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

A Personal Case Study. What Innovation really is.

2010-01-30T21:48:00.000+02:00

We Germans are a nation, which mastered recycling (“Less than one per cent of the remaining waste ends up as landfill.”) and others ask for advice. And we certainly export that success as well. Hence, it might not be far fetched to say, that I like to re-use leftovers from our consumer society. And this might be because of the place, the time and how I grew up.

I just used Foursquare today, to show, that I am reading the new print edition of The Economist. Recycling (using) a service for my purpose because I can, and the flexibility given by Foursquare’s design. And I am not aware about any other service that lets me tell ‘I am reading the new print edition of The Economist with a good cup of tea.’ Newspapers and print magazines are at the end of their life-cycle anyway, who would want to develop a service for a scarce activity anyway? Twitter is asking me ‘What’s happening?’ (in 140 characters) or Facebook, but that routine lost already its cool I think. Yes, it has its multipurpose as (intentional) simple platform, but I can’t collect badges, have statistics and so forth.

What I wanted to reinforce with this post, that I used Foursquare for something different, is the thought about innovation. Innovations (and economic growth) are, in reality, many small steps towards the optimization of a current situation. A current business. A current technology. A current idea or theory. There is nothing like the big bang of innovation and something new. Before the modern Internet, there was dial-up. Before the telephone, there was the telegraph. Before nuclear energy (early 1950s), there was the atomic bomb (WWII). There was already some primitive form there (a use case), and somebody or many had the eureka effect or the need to do it differently or knew somehow how to do it better (a new use case/need). For the business case example; todays Google wasn’t the same Google it was 10 years ago. Todays Microsoft wasn’t the same Microsoft it was 20 years ago. Apple, now the embodiment for mobile devices, design and usability. Tomorrows marijuana might not be used primarily to have a Rausch, but it is already used in some places to help patients cope with chronic pain. Examples extended to politics as well, where California’s direct democracy system (state’s initiative process) will be adopted by the EU through the Lisbon treaty (Sub req).

So, how long do I have to wait for the vertical of Foursquare that asks me ‘What are you doing?’ (Hello Twitter) to collect points, badges, ranks and making a game out of it? Or will Foursquare and Gowalla make a small step forward towards my need and adopt general activities like reading a book or magazine, sport, cycling to work, playing chess or a video game? Redesigning it towards a platform for activities in general (with or without geo-location).

Speaking of convergence and the shortening life-cycle of introduction, adoption, mass-use, and the dying of a service or product which would make an interesting new topic. Or the question whether the current form of democracy in America has reached the point of ineffectiveness or not, and small steps of optimization are necessary unintentional. Two things, technology/SAAS and politics/society, which have a vastly different life-cycle time.

PS: I have not blogged throughout January for some reasons, but I will do my best to find topics for more than 50 words and or just thoughts, links, and illustrations (see my tumblr). Because this here is a very joyous, rich and far reaching exercise for my mind.

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

You Really Want To Worry?

2010-01-30T13:10:00.000+02:00

Of course you do……living conditions for most Americans leads to worry…..

There is much that we have to worry about….most important is employment…..we always get the “good” news from the tube but sorry to say, there are a few things that need to be pondered.

While surfing I came across an article written by Dan Froomkin of the Huffington Post and he outlined some things that, if you must worry, then these should be the most important:

No. 1: The middle class may never be the same again

The full effects of the crash of 2007-2008 on the lives of regular Americans has yet to be fully appreciated. For most members of the middle class, their sense of financial well-being was largely based on the size of their 401(k)s and their equity as homeowners. After the collapse of stock prices and with the steep drop in home prices, many may never feel the same way again, or spend their money as confidently.

No. 2: The recovery could take a really long time

Even assuming that we are at the beginning of an enduring recovery, there are many signs that it will be a slow one, and that it could be as long as a decade until most American families return to the standard of living they enjoyed before the crash.

Most notably, unemployment is widely expected to be astronomically high for at least another year or two — remaining around 10 percent through 2010.

No. 3: The recovery could only be temporary

For the past decade or so, the growth of the U.S. economy was primarily fueled by the credit and housing bubbles — which now turn out to have been illusory. So what will spur growth this time? Especially with so many Americans out of work? Where’s the demand going to come from?

Citing, among other things, the likelihood that the U.S. savings rate could go markedly higher in the coming years, Nobel laureate economist Joseph Stiglitz warns that “we are not seeing a recovery of sustained consumption,”and says there is a “significant chance” of a double-dip recesssion for that reason.

No. 4: This time, we don’t have the tools to get out of a recession

The recognized way of dealing with a recession is to lower interest rates in order to stimulate the economy. But the Federal Reserve can’t lower the rate to below zero, so that’s out.

The government can pour vast amounts of money into the economy, either through a stimulus or a massive bailout — or, as the case may be, both.

But next time around, that money might not be there. Not only could the political will be lacking, but there is an upper limit to just how much money the country can borrow and spend at one time without it doing more harm than good.

No. 5: The ‘very serious’ people in Washington are still obsessed about the deficit

In Washington salons and newsrooms, you are not considered a serious person unless you are very, very worried about the deficit. The principle that reducing the deficit is of the greatest urgency (and must come at the cost of entitlements) is for some reason firmly lodged in the halls of power in Washington. An example of just how uncontroversial deficit hawkery is among Washington’s elite was provided by The Washington Post earlier this month when it apparently didn’t think twice about turning over its news columns to an organization funded by Peter G. Peterson, the billionaire investment banker on a crusade to reduce the deficit by looting Social Security.

But deficit hawkery right now is not just ludicrous, it’s dangerous. As New York Times columnist Paul Krugman noted recently, “the calls we’re already hearing for an end to stimulus, for reversing the steps the government and the Federal Reserve took to prop up the economy, will grow even louder.”

No. 6: Whatever is making the stock market go up could go away

The giddiness over the recovering stock market makes it easy to overlook some key questions about its rise. But what exactly has sent the Dow up almost 70 percent since March? Could it be another bubble? And could it burst?

No. 7: The hugely irresponsible financial sector remains unchastened

But the big banks, with their enormous political clout, appear to be managing to duck the re-regulation that seemed inevitable a year ago — and they are now in fact more powerful than ever. The ultimate litmus test is that the banks that are “too big to fail,” rather than being broken up, are now making huge profits — and paying astronomical bonuses — based on the implicit guarantee that the government will pay their debts if they ever face bankruptcy. Indeed, that government backstop gives them every reason to place riskier bets than ever. Even Obama’s latest, much more assertive and populist proposal to limit bank activities does not break up those banks — and faces an uncertain future in our nearly paralyzed legislative branch.

A helluva list and I would agree with him on most of them….there are a wealth of issues to worry about…let the high paid pundits lie to you….IT IS THE ECONOMY. STUPID!

Main Street America does NOT care about all the posturing for political gain…..they want work!

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

STYLE de los BRIMPOS CANDIDOS...the STORM is sayin': BUTTFRANKLIN TIDES on the SHORE, SARRRR!!

2010-01-30T05:12:00.000+02:00

1.) Mighty Mondalo…I tell them to stay on ISLAND and they say…CANNOT, CANNOT! WE KNOW OF THE BRIMPMAN’S ISLAND LEGEND! So i hoist all these INCOMPLETE stories on down a few levels to BRIMP-STORAGE, and compile “BUTTFRANKLIN’S LIST OF ANNOYANCES, GRIEVANCES, FREELANCE MEDITATIONAL ALTITUDE STORAGE, COMPILER OF definitive, slowly moving, glacial INFORMATION TRANS-HOIST in the BUTTFRANKLIN AEON GLOW ROOM.

2.) Smart style…BUTTFRANKLIN knew what he was getting into with this quality MATCHING SILVERWARE AND SUIT-JACKET SET! Marvel as TUBE BOUNCE DYNAMICS come into play, then you are set on “BRIMP-BROIL”!

3.) You jackass. BRIMPMAN isn’t a snack food. BRIMP de SHRIMP is a new dish at the BRIMPMAN BUTTFRANKLIN HOUSE OF LOBSTER with FREE MEAL FOR PEOPLE with ARMS! One only, storewide, no duplicates available. If you are second in line, then (BRIMP)TOUGH!

4.) Paramecial BRIMPMAN will stutter to ya, if not, send $1 for a BRIMPMAN BUTTFRANKLIN CATALOGUE de BUTTFRANKLINESE. INSIDE you will find amazing things, such as BRIMPMAN MOTIVATIONAL CASSETTES(limited quantity), BRIMPMAN BUTTFRANKLIN ZINES with information regarding BRIMPMAN’S TRANSFORMATION de BRIMP! **FOR ANY INTERESTED IN THE BRIMP-MERCHANDISE, PLEASE CONTACT BRIMPMAN AT: CASA DE BRIMP.

5.) STORM into the new age of digital technology with your very own BRIMP-FORMATIVE world of KNOWLEDGE! SEE new things related to the DREAM of COUCHES, STACKS of raddishes and INFORMATION PACKETS, veritable WALLS of some-of-a-kind BRIMPMAN CASSETTES and CD-RS, and of course HANDWRITTEN LETTERS ABOUT HATS AND SHRIMP, written by none other than BRIMPMAN BUTTFRANKLIN.

6.) Feast your eyes on the latest gear…BY SHUTTING UP! BRIMP-STYLE!

7.) You must be aware that BRIMPMAN’S LEATHER COUCH of MYSTERY has ever existed, instead, there has been the GOOFY 70’s SHAG CARPET COUCH complete with TED N*GENT ERA STAINS! THE “COUCHFRANKLIN” model comes complete with extra thumbtacks to hold on the extremely worn upholstery. BRIMP-DE-GOON, YOU GONNA SWOON! NOW IN HD with BRIMPMAN VIDEO CD’S! MARVEL as BRIMPMAN LOOKS AT THE CAMERA, and dares you to think…”THIS IS BORING! BUT COOL!”

8.) SALADE’ DE’ CAPISTRANO, A’LA BRIMPY BRIMP BRIMPFRANKLIN BUTTMAN.

9.) BRIMPMAN’S FINANCIAL ENDEAVHOR’DOUEVERES. BRIMPMAN will salute anyone on camera, BY NAME. FOR ONLY a fee of $5(SHIPPING INCLUDED ON ALL OFFERS), A HAND-MADE VIDEO CD(compatible with computer-dores or hyper-regular DVD PLAYR’S, THIS DISK will not only shock you AS BRIMPMAN takes a defiant turn by kicking a cat toy and then ACTUALLY DOING SOMETHING like kicking the sidewalk OR even doing something like talking maniacally to the camera, then belching INTO THE MICROPHONE! EACH ONE IS DIFFERENT, CONTAINS COOL STUFF ABOUT BRAINS, and absolutely is guaranteed to be 100% BRIMP-TASTIC! AVERAGE VIDEO LENGTH: 56 MINUTES! OF BRIMPMAN BUTTFRANKLINESQUE ART-BRUT POOT-STRACTACULAR ESCAPADES de BRIMP! YOU…MAY…ASK…QUESTION!

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

Senate to Curb Deficit Spending

2010-01-28T21:21:00.000+02:00

Lowering it from a buttload to a crapload. Note the party line vote. Way to go, GOP — could you at least try to match your actions to your small government words? Yes, it’s a ploy to stop tax cuts by the Democrats, but you could wield it against them for increased spending. Not that you guys would.

Anyone else past believing these guys have a shred of honesty. Or dignity, for that matter…

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

economics blog

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US to loan money to build nuclear power plants.

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