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Links: This Will Take All Weekend to Get Through…

Published by Colin October 16, 2009 in Current Events. 11 Comments

The Economy
BofA, execs owe “billions” in lawsuit, Ohio says:

“NEW YORK (Reuters) - Investors in a class-action lawsuit against Bank of America Corp (NYSE:BAC - News) over the Merrill Lynch & Co takeover are trying to collect “billions of dollars” in damages, Ohio’s attorney general said on Monday.
….
Investors also want to recover from Bank of America Chief Executive Kenneth Lewis, Chief Financial Officer Joe Price, Chief Accounting Officer Neil Cotty, the bank’s board of directors, and former Merrill chief executive John Thain.”

Judge rejects SEC settlement allowing Bank of America executives to pay a $33 million while admitting no fault for having misled their stockholders. To summarize: Corporate executives lied to their employer (stockholders). The SEC indicated that lying to an employer is illegal. The executives offered to pay $33 million of their employers money for a no fault settlement. The SEC thought this made sense, and had to be shot down by a judge.
Healthcare
Healthcare reform finds a new twist as States contemplate forcing a showdown between State and federal law.

While the Senate is hiding behind closed doors ‘wheeling and dealing’ (read ‘blackmailing and paying off’) what their version of healthcare reform should look like, here’s a short chart highlighting some of the key differences between the two proposals.

A public option, in which the government would basically offer an insurance plan to compete with private insurers, would likely reimburse doctors at the same rate as Medicaid and Medicare. In many cases, both government policies pay rates well below a doctor’s cost of doing business.

Other Politics
Fear of Fascism, ‘Gay Agenda’ Dominates Conservative Kickoff for Midterm Elections

The Real Cost of Agricultural Subsidies

Who is the American Police Force

Secrecy causes panic and rumors in small MT town

Senate candidate Rand Paul raises $1 million

Obama Supports Extending Patriot Act Provisions

Dogs sniff out wrong suspect

Conservative Bible

Krugman: The Politics of Spite

Misc.
Group Plans Bible-burning for Halloween

The porn industry has more in common with the church than some might realize.

Raising Dorks: You can fast forward childhood, but you can’t rewind it.

The Easy Way to Fix Unemployment

Published by Colin June 18, 2009 in Politics and Current Events. 37 Comments

I wasn’t surprised to see that Oregon’s unemployment numbers have steadily risen over the past five years. I’m even less surprised that it has reached a whopping 12.4% and is second in the country.

A lot of people will point to the recession as the chief culprit for high unemployment - not merely in Oregon, but around the world. And while it is true that businesses closing puts immediate pressure on unemployment figures, it doesn’t tell the whole story.

The state of Oregon, for example, decided to tie the minimum wage to rising prices in 2004. This was put to the voters as a way to “lift all boats” in a rising tide of wage-increase and general prosperity. It was argued that the poorest would benefit as employers were forced to pay them more and that the increased wages would stimulate the economy.

Oregon now has the second highest minimum wage and the second highest unemployment rate (behind Michigan). These two statistics are directly correlated. The minimum wage is not a rising tide that lifts all boats - rather it is a barrier over which one has to jump to get a job. Raising the minimum wage does not force employers to pay their employees more - rather, it forces them to fire anyone who is not productive enough to earn for them at least their worth in the new minimum wage. Any employer who continues to employ a worker who earns them less than the minimum wage will eventually go out of business (or at least he will have to subsidise this worker by taking from other employees, investments or profits).

If the federal and state governments want to see employment numbers go back up, they should abolish the minimum wage.

Of course the first fear is that existing workers would suddenly have their wages dropped drastically. But this is fundamentally false - as these employees are currently demonstrating that they can produce at greater than the minimum wage (otherwise they would not be employed). What would happen is that companies, even individuals, would suddenly be able to afford more help. This would increase their efficiency, their profits and money moving into the least productive members of society.

But governments have an interest as well - they would see their revenues rise as more employment and more income means more revenue.

At the very least, it would put downward pressure on unemployment - working against the increase that are being facilitated by the recession.

Please feel free to read my full analysis of the minimum wage:
The Minimum Wage I: Economic Analysis
The Minimum Wage II: Social Analysis

Links: Busted Laptop Monday Edition

Published by Colin April 20, 2009 in Current Events. 5 Comments

Economy and Politics
China Slows Purchases of U.S. and Other Bonds

U.S. sovereignty for sale?

The King of America

When dealerships run away, Ford is left with the taxes.

22 year-old sperm still works!

The US’s latest attempt at catching up to Europe’s rail network.

Bleep Tha Police
Royal Canadian Mounted Police killed a man with a taser at the Vancouver airport and then lied about what happened - until a cell phone video of the incident showed up.

Pirate Bay people found guilty of aiding piracy.

Women fight back (politically) in AfghanistanDHS warns of right-wing extremism.

Boston College Campus Police: “Using Prompt Commands” May Be a Sign of Criminal Activity

Here’s an argument against vigilante justice. You know Melissa Huckaby, the 28-year-old California Sunday school teacher who is a mother of a five-year-old, and who is accused of raping and murdering an eight-year-old girl? Well, there is another Melissa Huckaby who is also 28, has a five-year-old daughter, and teaches Sunday school. She lives a few miles from the accused Melissa Huckaby but has nothing to do with her. The Melissa Huckaby who isn’t accused has been receiving death threats, and she fears for her safety.

More Links
The internet is forever

Justice Clarence Thomas wrote:

“Today there is much focus on our rights.. Indeed, I think there is a proliferation of rights.” “I am often surprised by the virtual nobility that seems to be accorded those with grievances,” he said. “Shouldn’t there at least be equal time for our Bill of Obligations and our Bill of Responsibilities? …Or how can you not reminisce about a childhood where you began each day with the Pledge of Allegiance as little kids lined up in the schoolyard and then marched in two by two with a flag and a crucifix in each classroom?”

Our Broken American Dream

Published by Colin April 8, 2009 in General and Essays. 12 Comments

At least part of our recent economic turbulence can be blamed on what has become known as “The American Dream” - but which is, in fact, a gross distortion of this term’s former definition.

The current lifestyle goals of many Americans are to own their own home, own a couple new/newer cars and have children grow up to attend a university. For men, this often includes a white collar job (or at least a job with sufficient status - preferably “managing”, “supervisory” or “executive” something or other in the title) and for women, this also tends to mean a career in addition to motherhood. These two incomes keep enough money in the bank to stay a month ahead of the mortgage, bills and other debt payments.

Contrast this with the ideals that used to encompass this term: “The American Dream.” Originally, the associated with immigrants - who left places where they were less free to pursue their own goals in life and for their family. The American Dream first requires freedom. The primary mechanism of the modern American Dream, however, is unsecured debt, which is a contracted suspension of freedom. It is the modern equivalent of bond-service and, especially with consumer and lower-order goods, the very definition of short-termism.

Let me be clear that I am not speaking poorly of debt - especially debt that is wisely and responsibly used as a prudent financial tool. I am, however, asking how it is that values which were so fundamental to the growth of this country (especially from the 1860’s through the 1930’s) have been replaced by the trappings of a middle-class lifestyle without actual “lifestyle-capital” to back it up? Going into debt to get a house is not wrong (though it can be unwise), nor is debt for school or a small auto loan or something similar. But going into debt solely to obtain something now without regard for future returns or losses is not wise.

The original dreamers had to embrace practical realities in order to sustain and build towards their goals - which often took several generations to achieve. Namely: thrift, savings, ethics, closeness of family, hard work with little initial rewards and a vision to create and produce.

In many ways this is the exact opposite of the kind of virtues which are now embraced under the same term: excess, spending, expediency, broken families, rewards before work and an emphasis on recognition before achievement. Today’s American Dreamers want the dream first - no, they expect it first - and are content to push forward the creative efforts that make that dream to some obscure point in the future.

This has led to lifestyles that are exposed to even minor market corrections and poor investment decisions. Those who actually built their American Dreams rather than simply inherited them or presumed them, know that they can do so again. They have done it. But this modern Dream expects results to come first - and when they don’t come, are delayed in coming or are taken away due to a lack of capital - the modern American Dreamer finds himself dependent on others. In many cases, the Dreamer becomes a ward of the state or foreign producers.

This is why the New Deal, among many other reasons, was a so destructive. It taught people to depend on the hand of the state to secure their economic livelihood - rather than on those God and nature has ordained: ourselves, our family, our church. When we lose the understanding that wealth comes from work (and not from the benevolence of the state), then production no longer becomes valued - and hence, the society becomes poorer.

While there are, of course, many Americans who have gone through the required toil to achieve their goals - there are also many who, along with their possessions, own a mountain of debt (with interest). There are also some who are consuming the dream that their parents or grandparents worked for via an inheritance, gifts or just place financial dependency. But the American Dream was about producing something - adding to the material and spiritual wealth of one’s self, family and community (in that order).

In that sense, the American Dream is really about attitude. What are we pursuing and why are we going after it? Are we chasing vanity - material posessions or status for their own sake? Or are we utilising God’s great gift of freedom to wisely better our lives and the opportunities of our progeny.

The American Dream is not an entitlement we all have because we are born in a certain geography. The American Dream is a character trait which, when nurtured and allowed room to grow, brings out the best in each of us and articulates our future potential.

A Must-See Lecture on the Economy

Published by Colin March 18, 2009 in Current Events. 0 Comments

http://www.youtube.com/watch?v=EgMclXX5msc

Here Peter Schiff lays out his last decade or so as an economic doomsday prophet. It’s full of hilarious stories, practical wisdom and also a thorough discussion of what happened and what is going to happen with the economy. It should be friendly for non-experts, but also meaty enough for people who know a thing or two about how economics operates.

This was given just the other day at the Austrian Scholars Conference. Enjoy!

Obama: Stop Short Term Economic Thinking (But Here is a Quick Fix!)

Published by Colin February 25, 2009 in Current Events. 4 Comments

Obama’s speech was remarkable last night. Aside from Mike Huckabee, there is no other politician who is such an expert at saying absolutely nothing, with so much charm, eloquence and conviction. Obama plays the role as the morally righteous reformer and problem solver, while proving in his speaking and actions that he is a classic embodiment of reckless and irresponsible government intervention for the sake of posturing.

Obama:

…we still managed to spend more money and pile up more debt, both as individuals and through our government, than ever before. In other words, we have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election.

Correct. Both individuals and government have been spending like mad. You can tell our spending culture is out of control when reductions in state budget increases are called “cuts.” But does Obama plan to stop spending, stop going into debt or stop supporting short-term interventions?

I asked this Congress to send me a recovery plan by President’s Day that would put people back to work and put money in their pockets. Not because I believe in bigger government — I don’t. Not because I’m not mindful of the massive debt we’ve inherited — I am. I called for action because the failure to do so would have cost more jobs and caused more hardships. In fact, a failure to act would have worsened our long-term deficit by assuring weak economic growth for years. That’s why I pushed for quick action.

Of course! The best way to stop a culture of short-term debt-spending and reckless tossing of shovelfuls of money into near-sighted government projects is by… wait for it… engaging in short-term debt-spending and reckless tossing of shovelfuls of money into near-sighted government projects. Obama says we need to stop shovelling out money to important electoral groups, and then, without batting an eye, starts talking about how it is somehow good for the long-term economy that teachers, health-care workers and police (huge electoral groups) have job security. He cites 57 police in Minneapolis keeping their jobs today as though this is an indicator (or, even worse, a creator) of long-term growth for the whole country.

Obama continues talking out of both sides of his mouth. Remember how earlier, he cited piles of public and private debt as a cause of the crisis? Less then ten minutes later:

The concern is that if we do not re-start lending in this country, our recovery will be choked off before it even begins. You see, the flow of credit is the lifeblood of our economy.

So we are going to fix the problem caused by too much debt with… wait for it… more debt!

Obama then declares that this is important to “…finance the purchase of… a home to a car to a college education.” But of course, Obama just said that part of the crisis was that: “People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway.”

Of course, Obama is just the spokesperson for the generally useless politicians in Washington. The whole chamber started clapping when he declared:

First, we are creating a new lending fund that represents the largest effort ever to help provide auto loans, college loans, and small business loans to the consumers and entrepreneurs who keep this economy running.

The way out of the financial crisis is not for people to make better decisions, invest in wiser business or incentivise higher quality products through the market - it is to buy, buy, BUY!Buy more houses, more cars and invest in even more risky businesses.

There was a lot more to complain about in Obama’s agenda, but if he doesn’t even understand economics - then he is going to have trouble working out healthcare, the military or education.

The Economy is Recovering In Spite of Bailouts

Published by Colin February 4, 2009 in General. 10 Comments

The New York Times published an article the other day, and the AP has followed, declaring that consumers are now beginning to save more and spend less. Finally, after years and years of unsustainable debt-spending and other atrocious family budgeting practices, Americans are biting the bullet in the short-term and are doing what’s best for them. Of course, the NYT and AP see it completely different:

Putting away money and paying down debt may be good for one family’s kitchen-table economics, but the broader economy suffers in the short term when millions of families do it… A dollar saved does not circulate through the economy and higher savings rates translate into fewer sales and lower revenue for struggling businesses. As Congress considers an $800 billion package of tax cuts and spending plans, policy makers said that the most effective stimulus was money that would be spent quickly.

The solution to our economic problems is staring everyone in the face, even beginning to happen, and yet officials and bureaucrats feel the need to subvert it by artificially low interest rates, easy money and interventions to increase debt - the exact reckless policies that got us here. The solution is an increase in capital to liquidate debt and reinvest in profitable, sustainable industries - which comes from, what? Savings.

Short-term bursts of new money, funded by debt, invested in industries and sectors of the economy that have proven themselves to be worthless is suicide. The media, of course, is completely ignorant of basic economic principles and instead relies on pundits and politicians to tell them what to write:

The Federal Reserve cut interest rates to stimulate growth, and Americans took advantage of easy credit to finance trips to the mall, remodeling projects and new cars. Consumer spending accounts for about 70 percent of growth.

Good idea! We can pretend that we aren’t tens of thousands of dollars in debt per person and take a quick trip to the mall. Going shopping always makes us feel good! The prevailing wisdom is that we should all act like those irresponsible people we all know with three maxed-out credit cards, a high mortgage and two cars who still will go buy overpriced retail goods at the mall. See, this is just “kitchen table” thinking - we need the experts to tell us that really we should continue to spend money we have no way to pay back - for our own good.

The problem here is that mainstream economics teaches that the laws that govern economics on the individual level are completely different on a larger scale. We all know that families who increase their debt-spending while raking in less money will go broke very quickly. But somehow governments can engage in the same behaviour, by increasing spending and lowering taxes, and it will be good for all of us? Incredible!

The fact is that industries and investments which never should have happened are being wiped out. This is a good thing! We don’t want any more resources being wasted on stuff no one wants to buy. The economy needs to shift and invest in new technologies, goods and services that are more reliable, cheaper, faster, more productive and so on. This, by definition, has to be done responsibly from the beginning - with real capital: savings. An increased rate of savings is the first sign of rebuilding. Real capital with real wealth that has been earned and saved provides incentives to invest wisely and patiently in sectors of the economy that have more reliable returns.

Quite frankly, I’m shocked. I did not expect American to rise to the occasion. I figured they would keep buying cars, boats and consumer crap even while their houses were getting repossessed and their creditors harassing them. If the politicians will get out of the way for a moment and stop trying to “help”- maybe we can make it out of this one.

Links: This is the libertarians fault!!!!

Published by Colin October 24, 2008 in Current Events. 4 Comments

A Slate.com article blames US “libertarian” policies for the current failing market, arguing for more intervention and stating that the current crisis proves libertarians are wrong. This Reason.com article is offered as a rebuttal.

Iraq Inches Closer to Security Pact With U.S.

The draft also includes provisions on another knotty issue — whether American soldiers would have immunity from Iraqi law. Senior Iraqi officials said the draft language would give Americans immunity from Iraqi law when they were on military operations but would not apply if they were off duty….

Many Iraqi members of Parliament say that the proposed immunity provisions, which the United States supports, are too broad, and that they want American troops to be subject to Iraqi law for all their actions. The Americans say that their troops must have immunity when on military missions….

“The heart of the matter is the jurisdiction over the searching of all cargos that are shipped to Iraq or from Iraq,” said Ali Adeeb, a close ally of Prime Minister Nuri Kamal al-Maliki. “There is the possibility that the cargo contains weapons that may hurt Iraq, although the American side committed that no weapons of mass destruction would be sent to Iraq.”….

Adding to the volatility, attacks against Christians have increased in the past two weeks and nearly 1,900 Christian families have fled their homes in fear, said Abdul Qadir al-Obaidi, the Iraqi minister of defense.

Palin is the mom in Bobby’s World?

A few weeks ago, the truth was revealed that artificial inflation of certain stocks would eventually hurt the market….and the conspiracy to hide this on Wikipedia.

Bloomberg gets the rule changes to stay in power, voters aren’t happy.

Thirty years of warmer temperatures go poof

Gap narrows between rich and poor, but the UK is still bad. And, oddly enough, if you look at the Gini coefficient scores, the US is worse.

Vote al Qaeda, Vote McCain

Cocktail of Crises

Published by Colin September 22, 2008 in General, Essays, Politics, Current Events and Philosophy. 4 Comments

I also thought about titling this post; “At least part of the reason I have chosen to leave the US and obtain other citizenship.” I do not want to rush, like many libertarians and apocalyptic Christians to hasty conclusions that the sky is falling. I don’t think we’re even near that in the civilised world. In fact, I would even argue that the whole thing is being exaggerated and perpetuated mostly by the media, politicians and business which seek to profit of people behaving like chickens with their heads cut off and reloading CNN every two minutes, asking for more government handouts/power and looking for sales in guns, oil, water, food, gas, metal, gold, silver and so on to go up.

However, having said that, I suspect that most people are missing the real crisis - the wider crisis. In the determination to focus on something like gas prices or civil liberties in detail, perhaps how these elements combine and mix in the current climate reveals the nature of the “crisis machine” that is being built. In other words, the bail-outs aren’t really a catastrophic problem in and of themselves, but combine them with say, inflation, lost civil liberties and foreign policy - and now you’ve got a little cocktail being mixed that might do some damage.

The essence of this comes from one of my few favourite quotations by one of my favourite men, Henry Hazlitt:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.

So, while various plans drawn up to solve one particular problem might stem the specific leak, these will weaken other-areas in a greater and greater ways. If we continue to pay more than what we are getting on the whole, if we borrow more from ourselves than we gain back in any given solution, then we are gaining momentum on the path to bankruptcy.

I don’t think that any one crisis would really damage the United States, but if crises are continually paid-forward with short term fixes at the expense of the aggregate, we’ll have a huge queue of multi-industrial, multi-dimensional problems bursting the seams of law and order that tie them down.

So I want to look at how some of the following areas have or may, in the future, combine to compound a larger crisis for the US:

Foreign Policy
The Domestic Economy
Immigration
Civil Liberties
Free Speech
Nationalism/Patriotism
Religion

I’m going to do my best now not to try and lose you.

Foreign Policy
Regardless of one’s view on the wars in Iraq and Afghanistan, it is clear that we are less liked in the Muslim world today than we were on Sept 10, 2001. Terrorist groups (including non-Islamic ones) have seen their numbers swell. America, regardless of why, has a lot of enemies.

Even if we had the perfect military, intelligence and every move we have made and will make to combat this reality were perfect, the cost would be enormous - probably greater than any military effort that was ever unleashed. To stem everything from active terrorism and resistance in the middle east, to peacekeeping for US interest and allies in numerous other places, to protecting resources and trade partners, to preserving and install US-friendly regimes in places like South America and Eastern Europe would make the kind of scarcity, rationing and planning not seen since the forties.

Again, I am presuming that there is no waste, no bad intelligence, no blow-back and other bugling. Just this effort alone, in one area, might be doable if we had the savings and capital to pay for it.

However, we clearly have no capital and savings. America has been in the red for sometime. What is going to happen when all of these troops, assets and protections are pulled back from the fragile order which they are supporting? Those who have supported a planned, orderly decrease in military intervention for the past few years (heck, even the past decades) have been laughed at in favour of the idea that the current level of empire is a linear, sustainable stronghold. But as Ron Paul said as early as 2003, we will be pulling our empire back - either by planned, orderly and strategic organisation or as a reckless reaction to the bottom line that we no longer can afford it:

Policing the world and nation-building issues are popular campaign targets, yet they are now standard operating procedures. There’s no sign that these programs will be slowed or reversed until either we are stopped by force overseas (which won’t be soon) or we go broke and can no longer afford these grandiose plans for a world empire (which will probably come sooner than later.)

It should now be clear that we are facing this reality. Even those of us who are staunchly anti-war will not deny the fact that there are people out there being held at bay by the military who would otherwise seek to kill Americans. When the military is forced to downsize, we will have left the gates open for these people to come in and sack our country.

The reactionary answer by conservatives (and many democrats) is to rely on the same old argument to beef up the military. But what if there is physically no money to pay for it? We are going to have an increase in terrorism at home and abroad and the accompanying cries by the population for safety in the form of increased government power in exchange for freedom and civil liberties.

Next time: discussion on what the current economic situation reveals, along with the combined problem of immigration and civil liberty erosion.

The Foolishness of Confronting Russia

Published by Colin August 12, 2008 in Current Events. 89 Comments

While I was racing around frantically last night to try and arrange the last minute details of my move to England, I was shocked to hear whatever conservative talk show host that was on the radio calling for the president to send US troops into Georgia to fight Russia. The host went on a long tirade about “protecting our national security interests” and how these missions must be handled delicately because of the gravity of the international relationships at stake.

It boggles my mind, when the economy is tanking and the currency is being debased to pay for our military expenditures, that some would be so quick to commit more blood and treasure to yet another conflict in some far-away land to fight some other global threat.

Is this what conservative foreign policy has been reduced to – sending troops at the bat of an eye on the basis of a vague ideal such as “national security interests?” This is recklessness.

Believe me, if I ever believed that the security of my family or my property were at risk, I would be the first to show up at the recruitment office with my guns in hand. I would gladly defend my home and even my neighbours from an imminent threat. But the idea of sending US troops over to start a war with in Georgia against Russia would definitely be the blow that absolutely cripples this country.

I presume that most conservatives do not share the views of the radio personality I heard last night. John McCain is arguing for a US military surrogate (NATO) to do the dirty work. McCain suggests using diplomacy “force Russia to withdraw from Georgia.” Last time I checked, diplomacy was about giving and taking, negotiating and making voluntary proposals. “Force” however, ultimately means threats and coercion which must be backed by aggression. McCain is clearly engaging in double-speak.

Yet another war would be disastrous for the US. Our economy is swirling around the toilet and our important relations around the world are dissolving. We need to wake up and start plugging holes or this ship is going to sink.

Zeal For Truth