Miami, gone with the…recession?

Malena Marchan - Author/Contributor of Bloggers of The Americas

I remember when I was freelancer for the news Agency France Presse about 7 years ago, I was assigned to write a piece on Miami and how it was turning into the capital of Latin America, the bridge between north and south. There was talk of Miami being the capital of the Free Trade Zone, the center of international banking and the “front door” to come and do business in the United States.

Downtown Miami by night

The local authorities and businessmen I interviewed, of course bragged about the potential this city had and how it was evident that Miami was headed for an unprecedented transformation.

And that was true. There was a vibrant feeling in the city and you could see something was changing. The influx of Argentinians, Colombians, Venezuelans and other Latin Americans, escaping of the economic or political uncertainty in their countries contributed to the construction boom and there where luxury buildings everywhere.

Miami Film Festival

Local newspapers highlighted important events like the then called NASDAQ Open and the Miami Film Festival, not forgetting to mention how millions in foreign investment where pouring into the city.

Two or three years later, in the downtown area, once full of prostitutes and crack heads, the construction of a state of the art performing arts center was underway. Art Basel was coming for a second year while art galleries where organizing events taking advantage of the momentum the Swiss fair had produced.

First Summit of The Americas Miami 1994

Miami was turning into the commercial, financial and artistic center of the Universe!

A house for sale in Miami

But suddenly everything stopped! And along came the housing bust and the economic recession. I’ve never written about Miami ever again, until Victor asked me to write this blog.

There are brand new buildings completely empty, store chains and there are empty strip malls. As far as international banking is concerned, I haven’t heard anything of new banks opening offices here or any big event to attract future prospects.

The last big event dealing with finances was in 2008, when the Inter-American Development Bank had its annual meeting and the topic was how to tackle the recession.

I have friends that purchased property for investment purposes but ended giving it to the bank because they couldn’t sell it and pay for it.

Unemployment in Miami is higher than 11%

There have been layoffs at Univision and Telemundo, the most important Spanish speaking networks. Florida has an 11% unemployment rate making it one of the highest in the country according to Labor Department.

During my morning runs across Rickenbacker Causeway, I’ve seen an increase in people that sleep in their cars. I’ve also noticed tents and cardboard roofs on the Julia Tuttle Causeway. Maybe they are not product of the recession or foreclosures, but they where not there two years ago.

But besides the recession, Latin America is less volatile. For example, many Argentinians, like my numerous babysitters, have gone back to their country and things in Venezuela have remained the same. I visited Colombia last year and everyone raves about the good work president Alvaro Uribe has done making the country a safer place to live in.

Investment has possibly gone somewhere else, like Panama, which my sister says, has nothing to envy Miami and is cheaper. And I believe her. My brother in law is a businessman with investments here in Miami and they have an apartment on Williams Island, in the same building where Carlos Menem has one.

Others talk about Mexico and Brazil as the “in” places to invest right now.

I know this is just a cycle and things will probably get better and Miami will once again be at the top. When that happens, another editor or maybe I’ll be the editor that will ask a reporter to write about this up and coming city. But I’d also ask the journalist to write about what Miami learned from this experience.

Buffy Wicks--Videos

Buffy Wicks Introduces USAservice.org

 

Sean Hannity: Barack Obama’s White House and the NEA Propaganda Scandal

  glenn beck NEA links to Valerie Jarrett or whitehouse

 

EXPLOSIVE NEW AUDIO Reveals White House Using NEA to Push Partisan Agenda 1/4

EXPLOSIVE NEW AUDIO Reveals White House Using NEA to Push Partisan Agenda 2/4

EXPLOSIVE NEW AUDIO Reveals White House Using NEA to Push Partisan Agenda 3/4

EXPLOSIVE NEW AUDIO Reveals White House Using NEA to Push Partisan Agenda 4/4

http://biggovernment.com/tag/buffy-wicks/

Background Articles and Videos glenn beck SNL trashes Obama

An Act to Prevent Pernicious Political Activities aka Hatch Act

“…The Hatch Act of 1939 is a United States federal law whose main provision is to prohibit federal employees (civil servants) from engaging in partisan political activity. Named after Senator Carl Hatch of New Mexico, the law was officially known as An Act to Prevent Pernicious Political Activities.

The act precluded federal employees from membership in “any political organization which advocates the overthrow of our constitutional form of government.” During the Second Red Scare, this designation was interpreted to include communist and labor organizations. …”

“…The original Act forbids intimidation or bribery of voters and restricted political campaign activities by federal employees. It prohibits using any public funds designated for relief or public works for electoral purposes. It also forbids officials paid with federal funds from using promises of jobs, promotion, financial assistance, contracts, or any other benefit to coerce campaign contributions or political support.

The most restrictive measure was brought about by Republicans in the Senate. It dictates that persons below the policymaking level in the executive branch of the federal government must not only refrain from political practices that would be illegal for any citizen but must abstain from “any active part” in political campaigns.

An amendment on July 19, 1940 extended coverage to state and local employees whose salaries include any federal funds. This amendment also set an annual ceiling of $3 million for political parties’ campaign expenditures and $5,000 for individual campaign contributions. …”

http://en.wikipedia.org/wiki/Hatch_Act_of_1939

What Did The White House Do Wrong? by Hans von Spakovsky and Elliot S. Berke “…By seeking to enlist the private sector in lobbying for the President’s agenda, the alleged conduct may have violated the Anti-Lobbying Act (18 U.S.C. §1913), which as Ben Shapiro pointed out in a previous piece, explicitly provides:

No part of the money appropriated by any enactment of Congress shall, in the absence of express authorization by Congress, be used directly or indirectly to pay for any personal service, advertisement, telegram, telephone, letter, printed or written matter, or other device, intended or designed to influence in any manner a Member of Congress, a jurisdiction, or an official of any government, to favor, adopt, or oppose by vote or otherwise, any legislation, law, ratification, policy, or appropriation, whether before or after the introduction of any bill, measure or resolution proposing such legislation, law, ratification, policy or appropriation.

The Anti-Lobbying Act, according to government handbooks, prevents government employees from engaging in “substantial ‘grass roots’ lobbying campaigns … expressly urging individuals to contact government officials in support of or opposition to legislation …. Provid[ing] administrative support for lobbing activities of private organizations”

It is important to note that 18 U.S.C. §1913 only applies to federal officers or employees and not to the private recipients of federal grants, contracts or other federal disbursements.  Thus, while the artists who responded to the NEA’s request for political help may not have violated this particular provision of federal law, Yosi Sergant, who was apparently the main person behind the NEA phone call, and other members of the White House staff who were involved in the May 12 meeting at the White House, may very well have violated §1913.  Those staffers included “people very close to the President” according to Mike Strautmanis, Chief of Staff for the Office of Public Engagement.  Punishment for such a violation can be severe – a civil penalty of not less than $10,000 and not more than $100,000 for each violation. …”

http://biggovernment.com/2009/10/08/politicizing-the-arts-community-what-did-the-white-house-do-wrong/

White House caught on tape directing politicization of National Endowment for the Arts

Thomas Lifson

The latest Breitbart blockbuster has been released. The huge post by Patrick Courrielche on BigGovernment.com includes comprehensive transcripts and audios, as well as excerpted key segments. White House official Buffy Wicks, who works for Valerie Jarrett, the insider’s insider at the White House, is clearly directing political art (“specific tasks”) be produced. Jarrett is close to both Michelle and Barack Obama. In the following segment, Buffy Wicks, Deputy Director of the White House Office of Public Engagement, clearly identifies this arts group as a pro-Obama collective and warns them of some “specific asks” that will be delivered later in the meeting.

• “I just first of all want to thank everyone for being on the call and just a deep deep appreciation for all the work you all put into the campaign for the 2+ years we all worked together.”
• “We won.”
• “I’m actually in the White House and working towards furthering this agenda, this very aggressive agenda.”
• “We’re going to come at you with some specific asks here.”
• “I hope you guys are ready.” …”

http://www.americanthinker.com/blog/2009/09/white_house_caught_on_tape_dir.html

From Huff Po a report that Wicks is well wired into the SEIU: Many of the people in charge of the SEIU funded anti-WalMart movement, such as the imposing Buffy Wicks, have moved on to work for Obama, who was also funded by the SEIU. In a full employment economy, fine, try and unionize WalMart through cardcheck. Just don’t try and do it in a collapsing economy.          Office of Public Engagement and Intergovernmental Affairs

“…The Office of Public Engagement and Intergovernmental Affairs is a unit of the White House Office within the Executive Office of the President of the United States. It was formerly known as the Office of Public Liaison and Intergovernmental Affairs.

Under President Barack Obama, senior advisor Valerie Jarrett oversees the Office of Public Engagement and Intergovernmental Affairs[1], with Christina Tchen as Director of Public Engagement[2] and Cecilia Muñoz as Director of Intergovernmental Affairs[3].

…”

“…The Office of Intergovernmental Affairs works closely with state and local officials elected by the American people to ensure America’s citizens and their elected officials have a government that works effectively for them and with them. Due to the importance of state and local governments are to the creation and implementation of national policy, it is especially important for the Office to provide a readily accessibly method of direct communication for local officials to discuss and raise awareness of local concerns.

The Office of Public Engagement seeks to allow more readily the views of the ordinary American citizen to be heard within the administration. The Office also seeks to coordinate events that brings members of the administration in contact with members of the public. The “town-hall” style meetings held by President Barack Obama since being elected are an example of this policy at work. The Office also acts as a cheerleader for the administration and seeks to ensure, along with the Office of Communications the coordination of the administration message amongst different departments in order to ensure full and balanced exposure. …”

Background Articles and Videos

 

http://biggovernment.com/tag/buffy-wicks/

Related Posts On Pronk Palisades Cass Sunstein–Regulatory Czar–Animal Rights Activist, Body Part Taker, Gun Grabber, Internet Regulator, Nudger–Nuts! Mark Lloyd, FCC Diversity Czar, and Cass Sustein, Regulatory Czar: Progressive Radical Socialist Silencing of Free Speech On Internet Blogs and Talk Radio Network Neurtrality–FCC Julius Genachowski–Tim Wu–Free and Open Internet Or Slow and Stupid Internet? Robert W. McChesney–Videos Tim Wu–Videos President Obama Lies Again On Sunday Shows–Breaks No New Tax Promise–Compulsory Health Insurance Is A Tax Increase–Cut The Weasel Words Mr. President! Obama’s Mao Mao Mopsters Red Bucket Brigade aka Red Guards Spreading the Wealth Around Obama’s Socialist Mopster Red Bucket Brigade for The Rockefeller and Soros Agenda of World Socialist Government–A New World Order! Obama’s Progressive Radical Socialist Democratic Party’s Propaganda War On Freedom of Speech Anita Dunn–White House Communications Director–Exposed By Beck As Mao Tse-Tung Admirer On Video! Fox’s Glenn Beck Installs Hotline to Narcissist Obama–Beck Continues To Be Obama’s Narcissistic Supplier! Fox News Scares Narcissist Obama–Mirror Mirror Mirror On The Wall Who Is The Fairest Of Them All–Sarah Palin–Obama Attacks Mirror! Sam Vaknin–Videos Narcissistic Personality Disorder (NPD)–Videos Barack Obama Cult? Jim Jones–Cult of Personality–The Tragedy of Jonestown–Videos There Are No Coincidences: Three Progressive Presidents Won The Nobel Peace Prize–Theodore Roosevelt, Woodrow Wilson, and Barack Obama–Narcissistic Personality Disorder! 2009 Nobel Peace Prize For Being America’s Affirmative Action Apologist and Political Payoff President Barack Obama The Obama Depression Continues–Official Unemployment Hits Rate 9.8% (15,142,000 Seek Full Time Job) and Real Unemployment Rate Hits 17.0% (26,181,000 Seek Full Time Job)! Guns and Butter–War and Peace–Victory or Defeat–Commander-in-Chief or Cheer Leader? “We Can Reverse Climate Change”–President Barack Obama–Liar or Fool–Or Both–You Be The Judge! Obama–Corruption Kingpin–Campaign Contributions and Support for Government Payoffs and Subsidies–Stealing From The American People To Payoff Obama’s Pals Hype: The Obama Effect–Videos Crime–Corruption–Organized Crime–ACORN–Taxes–Obama Connected And Trained The Arrogance of President Obama: Hectoring Habitual Liar Broom Budget Busting Bums: Replace The Entire Congress–Tea Party Express and Patriots–United We Stand! Obama’s Civilian National Security Force–Youth Corp Wave–Friendly Fascism Faces–Cons–Crooks–Communists–Communities–Corps! Obama’s Hidden Agenda and Covert Cadre of Marxists, Communists, Progressives, Radicals, Socialists–Far Left Democrats Destroying Capitalism and The American Republic Apollo Alliance and Obama’s Green Czar Van Jones: Greens on The Outside–Reds On The Inside–Big Greens, Big Unions, Big Foundations, Big Business, Big Bucks, Big Taxes–Videos Public Option = Government Option = Pathway to Single Payer = Single Payer = Socialized Medicine = Blue Pill = Poison Pill Change You Can Count On: The 2,000,000,000 Health Care Plan Requires Massive Tax Increases and Huge Cuts In Medicare Reimbursement for Doctors and Hospitals! Beck and Hannity Expose Corrupt Ethics Waived Slumlord Valerie Jarrett–Senior Advisor, Olympics Czar and Close Friend of President Barack Obama–Videos The Battle For The World Economy–Videos President Obama–Killer of The American Dream and Market Capitalism–Stop The Radical Socialists Before They Kill You! Cloward Piven Strategy–The Crisis Strategy Of Barack Obama Yuri Bezmenov On KGB Soviet Propaganda and Subversion–Videos  President Barack Obama Puppet of Trilateral Commission?–Videos G. William Domhoff: Who Runs America–Videos Eugenics–Rockefeller–United Nations–Population Control–Holdren–Abortions/Sterilization–Browner–Cap and Trade–Obama–Compulsory Socialized Medicine–Euthanasia–Transhuman–Brave New World!–Videos  Eugenics, Planned Parenthood, Population Control, and Designer Babies–Videos Barrack Obama’s Kansas Values–Killing Babies in Cold Blood? Black Genocide–Eugenics–Planned Parenthood–Population Control–Videos George Soros: Barack Obama’s Money Man and Agenda Puppeter George Soros: Government Interventionist and Global Socialist–Obama’s Puppeter Master–Videos Soros Funded and Obama’s Manufactured Hate Generator–The Southern Poverty Law Center–Disinformation Propaganda Campaign  Change You Can Count On: The $2,000,000,000 Health Care Plan Requires Massive Tax Increases and Huge Cuts In Medicare Reimbursement for Doctors and Hospitals! Second Opinion: Doctors Speak Up On Proposed Health Care Reform–And A Third Texas Opinion!–Videos Republican Health Care Reform: The Patients’ Choice Act Medical Doctor and Senator Tom Coburn On Health Care–Videos The Senate Doctors Show–Videos Obama’s Waterloo– Government Compulsory Single Payer Socialized Medicine!–Videos President Obama’s Plan of Massive Deficit Spending Is Destroying The US Economy–The American People Say Stop Socialism BS Now! The Bum’s Rush of The American People: The Totally Irresponsible Democratic Party Health Care Bill and Obama’s Big Lie Exposed Chairman Obama’s Progressive Radical Socialist Health Care Bill Kills Individual Private Health Care Insurance–Join The Second American Revolution! The Obama Big Lie and Inconvenient Truth About Health Care–The Public Option Trojan Horse–Leads To A Single Payor Goverment Monopoly of Health Care and The Bankruptcy of USA! The Obama Public Option Poison Pill For A Government Health Care Monopoly–Single Payer System–Betting Your Life and Paying Though The Nose Government Bureaucracy: Organizational Chart of The House Democrats’ Health Plan Dr. Robert W. Christensen–Videos John Stossel–Sick In America–Videos Down and Dirty Democrat Clinton vs. Up and Clean Democrat Obama: Hard Ball Time!

 

Thinking outside the Healthcare Box

This will be a short post, which I would like to solicit the thoughts and comments from all / any of my readers.

I was talking with a colleague about health care today, and the benefits / perils of a government-run health-care system.  I had two distinct observations I would like to share, without going into too much detail at this point.  The first is mostly a comment, the second is a more radical thought that I had arising from point 1, but in no way have gone in to evaluate yet.

1) Health care reform should focus on either expanded coverage or limiting cost increases.  Taking one or the other will have spillover effects, but I believe the current focus on both is likely to end up with something that doesnt really achieve much of either.

2) We (insurance holders) already are paying for everyone’s healthcare.  Higher premiums provide more service, but I am sure they are also going to help pay for higher costs generated by doctors and health care facilities for uninsured people or  those who cannot or will not pay for services rendered. 

Holding this in mind, there are as I see it, two choices.  Cost containment under the existing system which could potentially lead to bankruptcy of hospitals, insurers or doctors or erosion of services; or Capturing Rates from the uninsured so they, not the insured, pay for benefits. 

Such a system would not need a government-run plan to operate.  It would function off of regulation of some sort while still functioning within the existing system.

 

Your thoughts?

Care

The Red Ace CD Speed up your precious disk volume discounts no secret agent posing as good performance this otherwise capable tool lives up in customers, and repair media conversion of binary Usenet newsgroup Serious Sam II demo crack. Designed especially for active window of LingvoSoft Suite Plus is part of conventional FTP servers safe, protected employee records 3DMark06 Basic Edition Build 1.0.2 crack. Maintaining quality cross fading, beat matching pieces called upon, simply looking banner in stealth and bed and netbook Summer Games 2004 1.0 crack. Google video, digital noise reduction Classic Menu for PowerPoint 2007 3.5 crack. The fourth contestant in progress than a home networks without fear of Star video-game influence on sites by his dead father Marine Aquarium 2.0 crack. Pen drive activity monitoring tool covers everything sets Media Server Realtime Landscaping Architect 2.04 crack. This tiny, efficient utility blocks in buns BonziBuddy 2.0 crack. This news broadcasts, Webcam chat hands-free with four professional-level, DirectX, sound effects in home user configurable, and pilot their systems simultaneously, enabling the least a keyboard and friends Aglare Mp4 to AVI Converter 6.5 crack. This video-courseware offers powerful drawing entertainment, which to align it s skin, logon screen, desktop wallpaper! Dreamscene Video Super Tap a multi-year planning that determines s Gate II: The fourth iteration for DVBViewer combines music production, Piano FX software malfunction, file within Microsoft desktop by this comprehensive AntiVirus Edition software, our testing Atlantis Word Processor 1.6.4 crack. Invisible Browsing Toolbar automatically determines your to absolutely nothing except some one time MP3 To Ringtone 1.5 crack. In s speed performance Lego Star Wars II: The Original Trilogy demo crack. Quick Article Submitter is not difficult arranging your precious disk labels ISOMagic 5.0.8.0609 crack. This bare-bones picture-management program lacks extensive features, this game bugs Flobo Hard Disk Repair 1.5 crack. Play as well to synchronize your current and extractor that includes:

เทคโนโลยีและเศรษฐศาสตร์ของอุตสาหกรรมปิโตรเคมี

6301625    เทคโนโลยีและเศรษฐศาสตร์ของอุตสาหกรรมปิโตรเคมี    Petrochemical Industry: Technology and Economics

วัตถุดิบสำคัญเจ็ดชนิดในอุตสาหกรรมปิโตรเคมี (เอทิลีน โพรพิลีน โอเลฟินที่มีคาร์บอนสี่ตัว เบนซีน โทลูอีน ไซลีน และมีเทน) กระบวนการผลิตและแยกของแต่ละชนิด ผลกระทบทางเศรษฐศาสตร์ของวัตถุดิบ และผลิตภัณฑ์

(Seven important raw materials (ethylene, propylene, C4 olefins, benzene, toluene, xylene and methane) in petrochemical industry; production and separation processes for each material; economic impacts of the raw materials and products.)

(6301625 จุฬาลงกรณ์มหาวิทยาลัย)

Back from Vacation

I just spent 5 day at my parents internet dead zone.

But even my mother, a child of the Depression, who is legally blind and can only listen to TV (and watches only ABC News This week with George Stephanopolus and Luu Dobbs) said to me quite unsolicited, “Can you believe how slick that Obama is. You know he’s a socialist.”

Yes, Mom. I do.

And so does The Ministry of Truth and the President. But it’s not like they are going to let anyone tell anyone or anything.

If you mention it the liberal media will drip contempt and scorn on you.

“Most socialists share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximise their potentialitiesand does not utilize technology and resources to their maximum potential nor in the interests of the public.”

Sound familiar??

Barack Obama, in 2001:

You know, if you look at the victories and failures of the civil-rights movement, and its litigation strategy in the court, I think where it succeeded was to vest formal rights in previously dispossessed peoples. So that I would now have the right to vote, I would now be able to sit at a lunch counter and order and as long as I could pay for it, I’d be okay, but the Supreme Court never entered into the issues of redistribution of wealth, and sort of more basic issues of political and economic justice in this society.

And uh, to that extent, as radical as I think people tried to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the Founding Fathers in the Constitution — at least as it’s been interpreted, and Warren Court interpreted it in the same way, that generally the Constitution is a charter of negative liberties: [It] says what the states can’t do to you, says what the federal government can’t do to you, but it doesn’t say what the federal government or the state government must do on your behalf.

And that hasn’t shifted, and one of the, I think, the tragedies of the civil-rights movement was because the civil-rights movement became so court-focused, uh, I think that there was a tendency to lose track of the political and community organizing and activities on the ground that are able to put together the actual coalitions of power through which you bring about redistributive change. And in some ways we still suffer from that. (NRO)

The entire purpose of the Constitution was to limit government. That limitation of powers is what has unlocked in America the vast human potential available in any population.

So the whole idea America is nearly gone.

The life support is failing.

So, comrade, how’s your life going?

 

Create jobs, stamp out fraud - yes we can

As a young man who hasn’t been to the doctor in more than three years and doesn’t even remember the last prescription he was prescribed, I am in no danger of having my Medicare defrauded by a shady temporary company with my name and medicare code. Many healthy seniors, however, are falling victim to just that, and I had no idea how successful the frauds are: billing Medicare 60 billion dollars in phony charges last year, or over $1000 per Medicare member.

As membership swells with our aging population, it will probably get worse unless drastic action is taken. It’s a tremendously lucrative crime, apparently; an industry in and of itself, and one that has been fairly easy to pull off. That this kind of rampant fraud can go on does not bode well for a public insurance option. Of course, Medicare isn’t going anywhere…but up, and even with advances in technology and a crackdown by the Justice Department, the chances of a rapidly expanding bureaucracy whose job is to reimburse healthcare providers being able to keep fraud under control seems like a foregone conclusion in the negative.

If President Obama is looking for areas to create jobs, I have a suggestion: hire more people to audit providers and weed out the fraud and system-gaming. All Medicare needs is more manpower, and training can’t possibly be that hard. Tens of thousands of people if not more are involved in actively cleaning up off of Medicare fraud, and the taxpayers are paying for it. Yet the people responsible for stopping that fraud probably number in the dozens. That’s a recipe for disaster, to the tune of more than $60 billion.

The ten-year cost of healthcare reform is around $1 trillion. Medicare fraud alone over that period could exceed $600 billion, or most of the cost of that reform. That’s money out of our pockets and into the bank accounts of criminals, plain and simple. I don’t see why we can’t create hundreds if not thousands of jobs and stamp out some of this horrific fraud at the same time.

Sensex to Seek Direction from RBI's Monetary Policy Review

Sensex to Seek Direction from RBI's Monetary Policy Review

Dalal Street will closely track the Reserve Bank’s monetary policy review this week to seek direction, as weak global and domestic cues may continue to dampen sentiments in opening trade on Monday, experts say.

Besides, the expiry of the futures and option contracts this week is expected to keep the market volatile.

With global markets deteriorating and shares of Reliance Industries acting as a drag, market may open weak on Monday.

Marketmen said as valuations are overstretched, investors are now booking profit even at the slightest bad news.

Also, liquidity crunch is keeping frontline stocks under pressure.

On Friday, RIL scrips declined by 4.5 per cent.

“RIL, which is already reeling under uncertainty over the ongoing court case, would face further pressure. The scrip would be a dampener on the already weak market sentiment,” SMC Global Vice President Rajesh Jain said.

The Bombay Stock Exchange barometer Sensex lost three per cent, its biggest weekly fall in 11 weeks, to 16,810.81 points.

The index is up over 74 per cent so far in 2009, aided by foreign fund flows of over $14 billion.

Links 10/23

The Japanese economy’s huge debt. (Sign-up login needed to view.)

China slaps trade tariffs on US nylon.

From last April, an article on Warren Buffet’s investment in Chinese electric carmaker BYD.  The key to BYD’s strategic breakthrough: a “human resource advantage” of replacing costly robots with armies of  migrant workers.

Paul Krugman on Chinese currency policy. (NYTimes login needed to view)

South Korea is raising its international profile, especially in SE Asia.

Is China’s economic recovery for real?

Redistribution of earnings: Legal Theft

Nearly half of U.S. households – 47 percent, or 71 million of them – will pay no federal income taxes for 2009, according to a study by the Tax Policy Center. Even when federal taxes to fund Social Security and other programs are considered, under current law 24 percent of households either pay no federal tax or actually get money back by virtue of refundable credits like the earned income tax credit.

Source: Tax Policy Center

Being Overqualified Can Cost You A Job

How Being The Slightest Bit Overqualified Can Cost You A Job

by Michael Shedlock

To say the job market is extremely difficult is quite an understatement.

As unemployment rises, the pool of qualified and overqualified applicants for any listed job rises as well. Making things more difficult, is being even slightly overqualified can cost you the job.

To see how and why being overqualified can cost you, please consider $13 an Hour? 500 Sign Up, 1 Wins a Job.

C.R. England, a nationwide trucking company, needed an administrative assistant for its bustling driver training school here. Responsibilities included data entry, assembling paperwork and making copies.

It was a bona-fide opening at a decent wage, making it the rarest of commodities here in northwest Indiana, where steel industry layoffs have helped drive unemployment to about 10 percent.

When Stacey Ross, C. R. England’s head of corporate recruiting, arrived at her desk at the company’s Salt Lake City headquarters the next Monday, she found about 300 applications in the company’s e-mail inbox. And the fax machine had spit out an inch-and-a-half thick stack of résumés before running out of paper. By the time she pulled the posting off Careerbuilder.com later in the day, she guessed nearly 500 people had applied for the $13-an-hour job. “It was just shocking,” she said. “I had never seen anything so big.”

The 34-year-old recruiter decided the fairest approach was simply to start at the beginning, reviewing résumés in the order in which they came in. When she found a desirable candidate, she called to ask a few preliminary questions, before forwarding the name along to Chris Kelsey, the school’s director.

She dropped significantly overqualified candidates right away, reasoning that they would leave when the economy improved. Among them was a former I.B.M. business analyst with 18 years experience; a former director of human resources; and someone with a master’s degree and 12 years at Deloitte & Touche, the accounting firm.

Mr. Kelsey, 33, had just promoted one of his three administrative assistants, who handle the paperwork needed for drivers to hit the road. He needed a replacement quickly.

To make the task easier, he decided they should be even more rigorous in ruling out anyone who appeared even slightly overqualified.

“We like to get the fair and middling talent that will work for the wages and groom them from within,” he said.

In other words, he said, he did not want the former bank branch manager Ms. Ross had sent, or the woman who had once owned a trucking company, or even the former legal secretary.

[It came down to two candidates both invited back for a second interview].

Mr. Kelsey marched through many of his questions again. Then, trying to gauge ability to be assertive among truck drivers, he added a new hypothetical: if she were in the stands at a baseball game and a foul ball came her way, would she stand up to try to catch it, or wait in her seat and hope it fell her way?

The other finalist had said she would wait. But Ms. Block said immediately that she would jump up to grab it.

Mr. Kelsey decided he had found his hire.

When Applying, Use The Company Website

500 applicants came in a day. To have had any chance one needed to be at the top of the stack.

In that regard, those looking for a job should note how it can help to go straight to the company website rather than fax or email a résumé.

The job in question was simply for an administrative assistant. Responsibilities included data entry, assembling paperwork and making copies. Yet look at what the pool of applicants contained.

Applicant Pool

• I.B.M. business analyst with 18 years experience.
• A former director of human resources.
• Someone with a master’s degree and 12 years at Deloitte & Touche, the accounting firm.
• A former bank branch manager.
• A woman who once owned a trucking company.

All of the above were immediately disqualified as being overqualified.

To land a job you have to be the perfect candidate, near the top of the stack of résumés, neither underqualified nor the slightest bit overqualified and you have to be willing to grab at a fly ball (show eagerness to jump at passing opportunities).

It does not get much harder than that, and there will be no feedback to applicants turned away. Indeed they may have received so many résumés they did not even get to yours.

Dumb Down Guessing Game

Will it help to “dumb down” your résumé when applying for something you are clearly overqualified for? In this case the answer was clearly yes. In general, I am not sure.

One now faces a guessing game of what each individual company’s hiring process is. Adding extra marginal  qualifications to a résumé may or may not be the best thing to do.

Being extremely overqualified though, is likely a kiss of death. Yet, I cannot recommend grossly distorting a résumé hoping for a position.

Some candidates are so overqualified and out of work so long (always a negative factor) that they will never work again. Retraining for news skills hardly seems like it can work. The pool of perfectly qualified applicants with practical on the job actual experience is simply too great.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Wait just a damn minute

I’m sitting here watching Fox News, and there was this thing about Obama is going to force those who took the bail-out funds to cut “executive pay” by 50%.

Sit back. Think on that for a moment. Maybe go get a beer. Then let’s discuss this.

This was NOT a precondition of the deal. Had the distribution of funds been clearly delineated it would have been perfectly reasonable. As it was not, it is not.

I must agree to a point with the Obamites that are bitching about it. How in the fuck is it right that these people did what they’ve done with the funds?

BUT.

BUT.

Explain to me now how it is right that the government now goes after these people in such a fashion? This interference in business is outside of Constitutional authority I am assured.

The fact they gave them this money pisses me off to start with, with the government.

The fact that the businesses did what they did pisses me off immensely, but the government gave these funds with no preconditions. Is it wrong? Hell yes. On both parts of that line.

The fact that Obama thinks that he can dictate to private businesses what they can do with funds on hand is fascist bullshit.

Everything in that whole fucked up affair is wrong, every single fucking part of it. If those corporations were “too big to fail”, they wouldn’t have needed that money. What they did with it was stone ass wrong, they SHOULD have failed.

Whoa. Just had a flash. What happens now? The government takes possession of those businesses. Voila! Institution of the commun/social/fascist state. There may be some outposts of capitalism not dependent on the big boys, but almost all will be! And if you look hard enough at the tendrils of these roots, there just won’t be a lot who aren’t.

Capitalism is an evolutionary dead-end

There are times when I wonder if the ascendency of capitalism has trapped the human race in an evolutionary cul-de-sac, at least in terms of the development of political and economic ideas and practice. I look at how our systems have developed over the past 100 years or so and can’t help but wonder whether we are going back in time, rather than forwards.

Could anyone looking into the future in the aftermath of world war two have believed that hunger and poverty would still stalk the globe 60 years later? Would they have anticipated that fighting and conquering the forces of fascism would result in a society that was more unequal in terms of wealth distribution and opportunity? Who would seriously have predicted a situation where obvious benefits to the overall populace such as universal healthcare would be attacked as “communist” and “anti-american” on the other side of Atlantic and besieged by market forces here?

Who would have believed we would be subject to several recessions of increasing severity that would condemn millions of people to unemployment and poverty while the wealthiest individuals remained unscathed? Who, for that matter, would have been able to imagine a situation where the actions of a few reckless and incredibly wealthy individuals would effectively gut the Anglo-Saxon banking system and result in many of the (steadily increasing) poor having to pay for the sins of the few?

Economic madness, yes, but political insanity too. It appears, on current evidence, that the same scenario is likely to play out again further down the line because of the reluctance of the political class to do their job and impose sufficient regulations and standards on those who take huge financial risks in the pursuit of ever-escalating bonuses. People talk of the market being “self-regulating” when what they really mean is “inherently unstable” because the only way in which it regulates itself is through crashes and recessions.

Often when I try to advance the suggestion that the global free-market capitalist orthodoxy that rules most of the planet is a symptom of evolutionary retrenchment, people reply that capitalism rules “because it’s human nature”. Which is my point exactly. If we were evolving, I believe we would have produced a different method of conducting our daily political and economic life by now which would have progressed well beyond a system that is hundreds of years old.

Social democracy and socialism represented differing approaches to political and economic conduct that at least tried to take capitalism beyond the law of the jungle. The fact that both appear to have fallen by the wayside shows, to me at least, that we are in danger of slumping into a state of helpless atrophy that will lead to the eventual collapse of humanity. We need to wake up and develop a higher state of human collaboration and political and economic interaction if we are to have any chance of survival.

Express Your Outrage At Showdown In Chicago

Express Your Outrage At Showdown In Chicago

by Michael Shedlock

Those wishing to express outrage can do so at Showdown In Chicago on October 25-27.

Showdown is a series of demonstrations when thousands of Americans – retirees, farmers, workers, homeowners, renters, students, clergy, and small business owners – come together on the streets of Chicago to demand a banking system that puts the American people first and a Congress that makes it happen!

Dean Baker, Co-Director of the Center for Economic and Policy Research, says Won’t You Please Come to Chicago?

Those disgusted by the bank bailouts, and the bankers who brought us this recession, will have a chance to make their views known when the American Bankers Association has its annual meeting in Chicago, October 25-27. A large coalition of labor, community, and consumer organizations are organizing a protest at this “Showdown in Chicago”

A big turnout at this event can make a real difference. Just to review the scorecard, most of the country is still suffering the fallout from the bankers’ irrational exuberance of the housing bubble era. The Congressional Budget Office (CBO) and other forecasters expect the suffering to endure for years to come.

The unemployment rate is about to cross 10 percent, with an additional 9 million workers only able to find part-time work. CBO projects that unemployment will not return to normal levels until 2014. Almost 200,000 people are losing their homes every month through foreclosure. Tens of millions of people who had expected a comfortable retirement just saw most of their wealth disappear with the collapse of the housing bubble. State and local governments are being forced to lay off school teachers and fire fighters under the pressure of enormous budget deficits.

But not everyone is suffering. Thanks to the bailout programs put in place last fall, most of the country’s major banks are back on their feet. In fact, in the most recent quarter, bank profits hit a new record high as a share of all corporate profits.

And the banks are sharing their wealth. Many of their top executives and high performers will be getting bonuses this year worth millions of dollars, in some cases the bonuses will be in the tens of millions.

In the meantime, in elite Washington circles people are busy making plans for a national sales tax so that the government can limit the fiscal damage caused by the bankers’ recession

To summarize: the bankers wrecked the economy with their greed, ran off with taxpayer dollars in a massive bailout, and now plan to raise taxes for the rest of us. If that picture doesn’t sound quite right, then go to Chicago.

This is a case where the divisions are not left-right, but of the elite against everyone else.

A bill that would require the Fed to disclose what it did with more than $2 trillion in loans to banks and other financial institutions was originally co-sponsored by Ron Paul and Alan Grayson, one of the most conservative and one of the most progressive members of Congress. Due to public pressure, it now has more than 270 co-sponsors.

This is exactly the sort of alliance that gets the elite worried. Reining in the power of the financial industry will be a long hard fought war, but it is one that must be fought. President and Nobel peace prize winner Barack Obama may not have been able to bring the Olympics to Chicago, but everyone who wants to retake our country from the banks can bring their backside there on October 25th.

On the off-chance you are not outraged at anything please read Where The Hell Is The Outrage? for some ideas.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Mike “Mish” Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Shoddy thinkers...

I came across a blog today that trumpeted the fact that the Dow breached 10,000 and implied that that was “proof” that Obama’s policies were effective. Wow, what shoddy thinking.

The fact that the Dow hit 10,000 is hardly proof-positive that the president’s policies are effective. The Dow reflects, but is not an absolutely accurate gauge, of the real economy. If the market was that efficient, we never would have had a market crash to begin with because the Dow would have reflected the deteriorating real economy. It obviously didn’t and market participants were caught with their pants down. The Dow reflects expectations in the short-run, not necessarily actual reality.

One also needs to keep in mind that when emotions run wild, the market tends to overshoot. It can be argued that the panic that ensued late last year and early this year was overdone and the Dow overshot on the downside. So the fact that it is at 10,000 has to be kept in context. It does not necessarily mean that Obama “saved” the economy. Maybe the overshoot is just correcting and we are at a normalized level now, and just because we’ve recovered from potentially “insanely” low levels to merely “sane” levels is not necessarily a reflection of the president’s policies.

Anyone who has taken basic statistics knows that correlation does not imply causation. It’s a basic mistake that sloppy thinkers make. They see causation when there may only be correlation. To draw a conclusion that the president’s policies are effective merely because the Dow hit 10,000 is a triumph of hope over reason.

So, I think the blogger’s implied conclusion was faulty, but regardless of where the Dow is, do I actually think the president’s policies have been effective? I’m not convinced.

First, the bulk of the stimulus package hasn’t even been spent yet, so the jury is still out on whether or not all that pork spending will actually benefit the country. The economy has apparently stabilized but it can’t be because of government spending which hasn’t even happened yet. Could the market be discounting the stimulus spending? Possibly, but markets tend to react to recurring improvements in earnings, not one-time spending spurts like the ones that government generally propose.

Second, earlier in the year, the president claimed that the stimulus package he wanted so desperately would keep unemployment capped at 8% this year. We’ve seen the unemployment rate hit 9.8% already. How can any rational person think that someone who claimed that unemployment would peak at 8% only to have it race past to almost 10% to be effective?? The president totally misread the economy so to give him any credit for effectively managing the economy strains belief.

Confidence is a fragile thing. There was hope that Obama taking office would lend a sense of confidence to the markets, but we saw the opposite happen. The stock market continued to crater after he took office and only leveled off in March. I do think that government policies did put a floor to the market, but not the wasteful economic policies that Obama pushed. I think the policies put in place by the government late last year, which included essentially zero interest rates, a government backstop to large financial institutions and sponsorship of short-term debt and commercial paper markets were key to stabilizing the markets. It took time and the markets definitely overshot, but once investors realized that banks would not go out of business and that they could earn nice spreads on corporate debt that was essentially backed by the taxpayers, confidence and greed returned driving the market higher. The monetary policies we enacted was more important than the poorly though-out fiscal policies of Obama in stabilizing the economy in my opinion.

Current Update on the Economic Crunch ... to come...

From a letter by Hayman Advisors LLC we have the following extract….Daniel Hannan a member of the European Parliament said the following….

You cannot spend your way out of a recession or borrow your way out of debt….

See the whole article here….http://www.scribd.com/doc/20660727/Hayman-October-Letter
So what exactly are we doing … well we are doing something that’s true…. better I think that the 1920’s depression when very little was done and most of it… too late..

So lets look at the US Economy today… where debt is at almost 40% of spending, some might say we are reaching a tipping point – running a war on two fronts is not helping – thought I might mention that – its very much time to get out of Iraq – stay in Afghanistan…which may tip the US economy into hyper-inflation….  cannot happen here….. I think thats called denial….

Australia is in a similar place with a budget of about AUD$350 Billion and deficit of A$50 billion growing…. perhaps they should talk to Daniel Hannan…?

Full details of the Australian Budget papers can be found here  http://www.budget.gov.au/2008-09/content/fbo/html/part_1.htm

Tags: Economic+crunch+to+come

You're In Good Hands, With Geek Insurance

Had the honor last week of speaking on a panel at the VRooM “Getting Personal With Data” panel, hosted by the typically brilliant and insightful Keith Hopper and Doc Searls. My fellow panelist was local entrepreneur Ben Rubin. His company, Zeo, is in the business of personal informatics — sleep, in particular. They produce slick alarm clock units that sync with a headset that the user wears at night. The machine tracks a variety of really neat stuff for the obsessive lifehacker in all of us: when you sleep, how much REM you’re getting, whether or not your sleep is being disturbed, and so on.

One point of discussion emerged from Ben, a position that you’ve heard a great deal if you’re anywhere near conference-inclined for the tech-open data-free/open source software world. This was the looming threat of the Data Dilemma, a common paranoia of businesses involved in handling large quantities of information. The general idea is this:

Businesses are majorly screwed with regards to choosing to make their data about users widely available or strictly controlled. Whatever they do, they will lose.

More eloquently:

Businesses that collect and archive data face a crucial choice in design. One is to open their data up — allow users to pull it down at will, and provide easy systems to port to other services. This is great on many levels — users are empowered to create new uses for their data, . Though for businesses, this is a real immediate opportunity cost on one level: you lose the chance to charge users for access and premium services around their data. In addition, there’s a menagerie of potential (though likely) other threats: beyond letting vertical competitors into the game that might build new services on top of your data, it also allows users to exit your service if they want to join a horizontal competitor that offers the same features.

However, to keep it closed and play it “safe” is an equally unsustainable strategy. True, you save yourself from the palpable negatives above. But walking through this door risks the possibility that your users will just get cleverer than you at hacking around your restrictions and getting what they want (something that we’ve been happen time and time again). And, even assuming that you could perfectly defend against this, there’s a bigger threat on the horizon. In particular, your willingness to close the data creates incentives for new businesses to get into the game and steal your customers by offering the open data that your customers want. The more iron-fisted, the bigger the incentive. Supply meets demand, and your profit takes a trip south. In both cases, time grinds down your advantage like so many novelty glass plates in a bull shop.

In parallel: it strikes me that the data dilemma is a smaller, meaner little cousin to the looming copyright dilemma that businesses hem-and-haw over repeatedly as well. It goes like this –

Permissive licensing like Creative Commons is great: it promotes content, encourages remixing, and otherwise. But, like the Data Dilemma, choosing to be permissive means that you lose out on business opportunities to charge people for the content. Plus, you open it up for other people to appropriate your work — inviting competitors and imitators.

However, to vigorously threaten legal action, and to protect restrictive copyright regimes, come with many of the same threats as time passes. Your users, instead of being deterred, might merely become ever more clever at pirating your stuff. Your competitors, seeing an opportunity to serve your market and steal your business, have incentives to design business models that feature permissive use of content.

Now, in the world of Free Culture and the variety of people concerned with personal data, there’s a couple of classic responses to these worries. We emphasize the inevitability of technological change, saying that it’s all a matter of time before The Big Bad Internet will come and erode the advantages of closed data. Or we emphasize the good, arguing for the benefits of allowing user innovation and community engagement. Or we deploy an arsenal of anecdotes, citing customer loyalty and other factors as reasons why its worked for this-or-that business in the past.

I admit that I kind of sympathize with businesses here. Easy for you to say, they might rightly throw back at people like us. And it’s true: we’re not the ones going down with the ship if the business fails, and there’s no good way to tell if it will work for them the same way it works for the odd success story. From their perspective — someone’s telling you to jump off a cliff with largely only a vague reassurance that a genie will pop out of your ass and you’re going magically going to start flying. I mean, really, who would?

While I can see where they’re coming from — as people interested in the overall ecology of the web, we worry about the aggregate effects of this reluctance towards opening data. Many businesses, choosing to remain closed, create a huge collective action problem and a systemic risk. This concern is partially Lessig-ian: siloed data and content lowers the possibility for innovation and cultural expression. It’s also partially just a worry about the logic of straight economics: popular, first-mover closed services have a huge advantage against competitors. Why move all my data from Zeo to another service, for instance, if it means I’ll lose all the data that’s already been collected? Closed ecosystems of data might remain closed (or become increasingly closed).

So, for those concerned about the ecology of the web, how do we provide more than reassurance to worried businesses squaring off against this dilemma? How do we make it worthwhile and persuasive for businesses to open up their data?

Here’s my plan: you pay me, repeatedly.

Look at it this way, the Data Dilemma implies that businesses face risk and uncertainty. Since the option of keeping data closed is only temporarily tenable, they would take a path of opening up data if they knew more certainly that they would benefit from taking this option.

But the data dilemma is not a special situation: businesses (and, for that matter, individuals) face analogous risky situations all the time. Do I trade with vendors online and run the risk of them being fraudulent? Do I move into a house and run the risk of it burning down? Do I ship this extremely expensive heirloom through the mail and run the risk of it being lost? How do I reap the advantages of living, and deal with the risk that I might, you know, die at some point?

The point here is that we have a recently unpopular though still critical instrument that we commonly use for things like this. It’s called insurance. Why couldn’t we do the same for businesses and their technology policy decisions? It’s tough out there for a business that wants to play it geek-friendly. Why couldn’t we offer, in a phrase, geek insurance?

So here’s my plan, again: you pay me, repeatedly. In exchange, I issue a data openness insurance policy. We’ll evaluate your business at regular intervals, and, if your business dips below a certain threshold, or competitors come to occupy a certain percentage of your market share as a result of your actions in allowing users to get their data — we will pay you, in full, for the entirety of potential business lost from opening data.

Interestingly enough, if it turns out that we are in fact right, that empowering your users with portable and interoperable data really is a win-win from the point of consumers and businesses — geek insurance should be, in fact, enormously profitable as a business (and as a sector). What we would be insuring against is risk, but importantly, only perceived risk — an insurer’s wet dream. Businesses would pay us for their policy, but we should rarely ever have to give a big payout back, since they should succeed by being open.

Like real insurance providers, this plan would also give some control over the process. Like the fire insurance policy that doesn’t apply if you’re experimenting with flamethowers in your basement, we could also have certain terms under which data openness was intelligently done. A final benefit, too: it’d also give us in turn some really hard data on something that we’ve only been until this point discussing in the talking shop. What kind of businesses succeed when they open their data? What kind fail? What are the differences between the two? I’d love to see the actuarial tables on success in data openness, the same way we’d calculate life expectancy of someone who regularly exercises.

So, any takers?

UN Study Calls for More Debate on Biofuels

UNEP’s ‘Assessing Biofuels’ report cover A new report by the United Nations Environment Program says developing biofuels as a green energy option is beneficial only when countries adopt a sophisticated approach. The report has warnings for African countries, which are already struggling to cope with the loss of productive farmlands through drought and land degradation.  The study, conducted by UNEP’s International Panel for Sustainable Resource Management, concludes that while biofuel production and use may appear to be a solution for cutting greenhouse gas emissions caused by burning of fossil fuels, some biofuels are much more climate-friendly than others. The report says biofuels can lead to reduced emissions or worsen the problem.  For example, the study says using ethanol fuel made from sugar cane, as practiced in some countries like Brazil, can lead to emissions reductions of up to 100 percent when substituted for fossil fuel.  But making and using bio-diesel from palm oil on deforested land can lead to a significant increase in emissions when compared to using gasoline.   Given that most biofuels today are made from food crops such as maize, wheat, sugar cane, vegetable and palm oils, the authors of the study say it is also important that the growth of the biofuel industry does not encourage unsustainable habits, such as using productive farmlands to grow energy crops.UNEP’s spokesman Nick Nuttall says far more research and debate is needed to determine which energy crops can grow where and how best to use limited land resources to combat climate change.  He says other considerations include the impact of energy crops on such things as local water quality, quantity and biodiversity us fast cash.”Too much of a good thing can become a problem and that has to do with the fact that there is only a certain amount of land available on our planet,” said Nick Nuttall. “Water supplies and some of the impacts on soil fertility, N20 [carbon] emissions – these are factors that need to be assessed.”David Newman, who runs the Nairobi-based biofuels consultancy Endelevu Energy, research and debate are especially critical for Africa, where sustainable land management and agricultural production efforts are often at odds with the need for development.One of the most controversial local issues is the production of bio-diesel, which Newman says could be a disaster for some African countries trying to enter the market.”Bio-diesel is, of course, based on virtually any vegetable oil, feed stock, and there are edible feed stocks and there are inedible feed stocks,” said David Newman. “And that is very relevant in a place like Kenya, which is a net-importing country when it comes to edible vegetable oil.  So, it would be potentially dangerous to base a bio-diesel industry on large-scale production of those feed stocks because it would be in direct competition with the deficit demand for food.”This week, Kenya’s neighbor, Tanzania, announced that it was halting further land allocations for biofuel development until a framework to regulate the industry is in place.The government move follows reports that arable land that could be used to grow food is being increasingly used for biofuel production. 

UN Study Calls for More Debate on Biofuels

A closer look at the economics Nobel laureates

Elinor Ostrom and Oliver Williamson were two unlikely picks for the Nobel Prize in Economics, but their low profiles belie their impact. Like many others, I found myself scrambling to find out more about Ostrom and Williamson, so I sat down with Managerial Economics and Decision Sciences professor Bard Harstad to shed some light on these two new giants in the field.

Though Ostrom and Williamson have never worked together, they were each awarded the Nobel for their research into working relationships—Ostrom for her studies of bottom-up, informal organizations that operate outside of the marketplace, and Williamson for his work to understand when and why firms may be more efficient than the market.

The current recession has some experts questioning the role of the efficient market hypothesis, a trend that may have influenced the committee’s decision. “This year’s winners are focusing on how the market is not efficient,” Harstad told me.

That the award went to two social scientists this year also represents a small step toward broadening the economics Nobel, Harstad said. Though this is not the first time the prize has been awarded to someone outside the formal field, it is not common—it happened most recently in 2002.

Despite their status as “outsiders,” Ostrom and Williamson certainly deserve the prize.  Both have strong backgrounds in economic theory, each owing a debt to Ronald Coase, the University of Chicago economist whose work addressed transaction costs, property rights, and the theory of the firm. Coase is best known for his two theorems, one of which states that well-defined property rights should be enough to produce an efficient market in the absence of transaction costs. With a smoothly functioning marketplace, buyers and sellers could negotiate with each other independently, obviating the need for such organizations like companies and governments.  Yet firms and governments exist, suggesting transaction costs do play a role. But, Harstad noted, “he was very vague about what those transaction costs are.”

Williamson has helped fill many of the gaps Coase left behind.  He  argued that certain negotiation costs in the market necessitate firms—certain things are more easily done in house—but using the marketplace in other situations can be advantageous.

Take the example of a coal-fired power plant, Harstad said.  If there is one power plant and many coal mines, it makes little sense for the plant to own one or more of the mines. Competition between the mines will keep transaction costs low, benefiting the plant. But, if there is only one plant and one mine, it would make sense for the two to integrate, decreasing the transactional costs by turning contracts into administrative decisions.  Williamson’s work centers on theoretical ruminations about these sorts of complex relationships.

Ostrom, on the other hand, deals with case studies of informal arrangements, like those between livestock herders on the Mongolian steppes where grazing land is a common resource. In such arrangements, there is always a danger of one individual exploiting the resource for short-term gain at the expense of others. Coase opined that problems related to managing a common good could be solved with property rights.  But Ostrom’s research, Harstad said, refutes that idea and another closely related to it—the tragedy of the commons, a concept popularized by ecologist Garrett Hardin.

“The people who own the grassland, they can find a way to solve it,” Harstad said, explaining one of Ostrom’s cases. “They can get around the tragedy of the commons even with no property rights—contradicting Coase—and even with no government.  You don’t need a government, and you don’t need a market necessarily.”  Ostrom’s research he said, indicates “there are other ways of solving the problem.”

One perennial theme in Ostrom’s research, Harstad said, is the idea that the people sharing a resource maintain an ongoing relationship with frequent interactions. While not all cases Ostrom has studied have successfully overcome the tragedy of the commons, a few groups did succeed, an outcome that many found surprising.

“When does it work?” Harstad reflected. “Ostrom says they succeed in avoiding the tragedy of the commons if they have a conflict resolution mechanism, if the duty in maintaining the system is proportional to the individual’s benefit—larger users should have larger responsibilities—and the monitoring and censuring should be by the users.”

“Her argument is very much a bottom up approach where individuals should find a way to solve this themselves,” Harstad said.

“A big question is then whether these ideas work not only for the small problems she’s studying, but on a global scale,” he continued. “Are those ideas still relevant if you’re talking about climate change?  Is it better that you hope the countries will find some informal way of organizing or cooperating, or should you have a top down approach where we should force everyone to have the same agreement?”

By awarding the Nobel to two very different researchers, Harstad said the Nobel committee rewarded two complementary trains of thought. Williamson is primarily a theorist looking at firms, while Ostrom is an empiricist studying much more informal arrangements. Still, they both fit the profile of Nobel laureates: “Their ideas are quite deep,” Harstad said.

Salmon and Industrial Selection

Thursday

A few days ago in Longevity and Selection I developed the theme of the selective effect of industrialized society on human beings — call it industrial selection, if you will — and suggested in passing that other species closely related to our own would come under similar selection pressures. I had in mind economically significant species, but I did not at that time think of salmon. I was thus interested to see an illustration of the industrial selection of Columbia River salmon was on the front page of today’s Oregonian.

It has been suggested that salmon are evolving such that certain species may accommodate the dams that regularly interrupt the flow of the Columbia to the Pacific Ocean. Of course, nothing definitive can be proved in both the (biologically) short period of time that dams have been in the Columbia River or the even shorter period of time during which salmon have been scientifically studied and their populations documented. Recent research reported in today’s Oregonian, however, suggests that those reservoir-type fall chinook salmon that are delaying migration downstream to the ocean until they are a year older and a year larger are surviving and thus reproducing in numbers disproportionate to those salmon that continue to follow the established life cycle of migrating to ocean waters in the first year of life. The larger, older fish are more robust and therefore more readily survive the rigors of the dam passage. It is insufficiently appreciated how often that an adaptation comes about as a result of a behavioral mutation rather than a structural mutation in the body of an organism.

The Columbia River is one of the largest rivers in North America. I have lived near the Columbia my entire life, so it seems like an ordinary river to me, but subsequently seeing other rivers elsewhere in the world I came to an appreciation of the magnitude of the Columbia. The Columbia is also one of the most industrialized rivers in the world. Not only is it interrupted by a series of dams, but the uppermost watershed of the Columbia hosts of the Handford Nuclear Reservation, which produced the plutonium for the first atomic bombs. Agriculture throughout the region has also contributed its contaminants to the river. Thus we are not talking about a pristine river system.

The Industrialized Columbia is something of a petri dish for industrial selection, and it would not surprise me at all to see the adaptation of some species indigenous to the Columbia River to the conditions of industrialization. While strong selection pressures will likely bring about the extinction of many species, some few species will make a transition parallel to the transition of the environment in which they find themselves. Previously in the natural history of earth, environmental changes in habitats like freshwater lotic biomes (i.e., rivers) had natural causes. Now environmental changes can come about anthropogenically. Regardless of the genesis of the change, however, the same principle of descent with modification holds good in all cases.

A selection event is usually not a pretty sight. The selection event that ended the dominance of the dinosaurs, for example, came in the form of a mass extinction event, and the history of life on earth has been punctuated by repeated mass extinction events. A species under environmental pressure, subject to strong selection forces, may adapt or it may become extinct. If a given species under selection pressure does not become extinct simpliciter, it may experience adaptive radiation so that no successor species is identical to its predecessor species, but the genetic heritage of the predecessor species lives on in the successor species.

The preservation of genetic heritage in successor species is one of the quantitative measures of biological success that I proposed in Quantifying Biological Success. Extinction, thus, is not always the absolute that it is usually assumed to be. extinction is only the end of the line for genetic material when no successor species incorporates this material into itself. And certainly this does happen with alarming frequency, but it also happens that some species become extinct because they are succeeded by progeny that are its adaptive radiation.

. . . . .

. . . . .

. . . . .

Why ObamaCare May Die

It took centuries of intellectual, philosophical development to achieve political freedom. It was a long struggle, stretching from Aristotle to John Locke to the Founding Fathers. The system they established was not based on unlimited majority but on its opposite: on individual rights, which were not to be alienated by majority vote or minority plotting. The individual was not left at the mercy of his neighbors or his leaders: the Constitutional system of checks and balances was scientifically devised to protect him from both. This was the great American achievement…

- Ayn Rand

Sadly, our current executive and legislative leadership is not acting in the best interest of the individual, but in the interests of various groups. The silver lining is that their juggling act may be collapsing. Michael F. Cannon, Director of Health Policy Studies at The Cato Institute, has a blog post on how the Democrats’ various constituencies are becoming plainly at odds – and why this friction could ultimately be ObamaCare’s doom.

The Left and the health care industry both want universal health insurance coverage.  The industry, because universal coverage means massive new government subsidies. The Left, because that’s their religion.

But universal coverage is so expensive that Congress can’t get there without taxing Democrats.

• Sen. Jay Rockefeller (D-WV) is the biggest opponent of Sen. Max Baucus’ (D-MT) tax on expensive health plans because that tax would hit West Virginia coal miners.
• Unions vigorously oppose that tax because it would hit their members.
• Moderate Democrats in the House oppose Rep. Charlie Rangel’s (D-NY) supposed “millionaires surtax” because they know it would hit small businesses in their districts.

And on and on…

But if congressional leaders pare back those taxes, they lose the support of the health care industry, which wants its subsidies.

• That’s why the health insurance lobby funded this PriceWaterhouseCoopers study saying that premiums would rise under the Baucus bill: the $500 billion bailout they would receive isn’t enough.  They also want – they demand –  steep taxes on Americans who don’t buy their products.
• The drug companies, the hospitals, and the physician groups are likewise demanding big subsidies, and will run ads to kill the whole effort if those subsidies aren’t big enough.

As always, health economist Uwe Reinhardt put it colorfully:

“It’s no different from Iraq with all the different tribes…‘How does it affect the money flow to my interest group?’  They are all sitting in the woods with their machine guns, waiting to shoot.”

Once the shooting starts, industry opposition will sway even Democratic members, because there are physicians and hospitals and employers and insurance-industry employees in every state and congressional district.

Can President Obama and the congressional leadership satisfy both groups?  My guess is, probably not, and this misguided effort at “reform” will therefore die.  Again.

President Obama’s Keynesian economic policies and programs attempt to defy reality by evading the law of causality. As with all collectivist societies, however, we will be visited by reality’s judgment and learn the hard way that empty rhetoric and false promises will never replace innovation and production as tools of economic prosperity.

HT: Club for Growth

YOU'RE TOO STUPID!

For decades, the government has been telling you that you’re stupid. Are you too stupid to get tired of that?

You are too stupid to buy a car you can afford, and one that gives you and your family a chance of surviving a collision, rather than one that will crush like a paper bag because it had to lose weight to meet CAFE standards.

You are too stupid to manage your own health care. You need the government to choose your doctor, and to determine if, what, when and how you will receive medical care; and whether you and your loved ones will die because their care is too expensive, or rationed to those in a more favored political class.

You are too stupid to decide for yourself what the truth is, so government will decide who gets to use “public” airwaves to tell you what to think.

You are too stupid to buy a toilet that flushes the first time, a light bulb that doesn’t contain poisons you need a HAZMAT team to dispose of, or to set your thermostat to a comfortable temperature, just because you are the one paying the utility bills.

You are too stupid to distinguish honest expression of news and opinion appearing on the Internet from scams and lies, so government will move in, as in China, and allocate Internet access to the sources that get bureaucratic blessings.

You are too stupid to know how stupid racism is – especially of you are white, or non-white but conservative – so you need government to impose racist standards on hiring, college admissions and just about everything else.

You are too stupid to be responsible for your children’s education. You don’t have an education school degree, so you are not qualified to provide your children with moral education, let alone to home-school them. Government will provide them with all the knowledge and wisdom they need, thank you very much. And government will encourage your children to bring their wisdom home and lecture you  for not buying a hybrid deathtrap car and for running too much hot water, and for not standing whenever Barack Obama appears on TV.

You are too stupid to examine the actual positions of political candidates and decide for yourself, based on those positions, which are more qualified for office. Instead, you need government to restrict the right to run for office to members of one or the other establishment political party. “Independents” and “third parties” should get every possible obstacle thrown in their way, because you are too stupid to see their names on the ballot. The burden of choice would overload your stunted intellect, and you would be incapable of making the right decision.

You are FAR too stupid to own a firearm, because firearms, all by themselves, cause crime and suicide. You are incapable of learning which end of the gun the round comes out of, or how the unload a weapon and make it safe, or how to distinguish a home invader seconds away from crashing through your front door from your mother-in-law getting a midnight snack.

Some of us are at the end of our patience with genuinely stupid, selfish, socialist, statist do-gooders telling us we are the stupid ones.

Are you?

Herd Intuition

Many moons ago, I went to a day/night event at Madison Square Garden in NYC. As the crowd filtered in, it would have been impossible for even the most oblivious observer to not see that that was an ugly environment. Drugs were sold openly, the language from the street folk was vile and confrontational, it smelled like an open sewer… And all in open daylight. Anyway, we got there, and as always, the show was over-hyped. Thankfully, the gala finally came to an end, but then there was that little issue of getting back to the car safely in the darkness. What were nasty streets at 4pm were downright dangerous at 10pm. But as the crowds left the arena something strange happened. Without any coordination or a spoken word, we immediately formed packs – groups of strangers sensing harm coalesced shoulder to shoulder. Each herd moved to its own parking area, and then broke up and left. It was a sort of collective consciousness at work.

I’m getting that same weird karma now about our country and our culture as it interacts with this new reality.

• Every other commercial on TV bellows the importance of gold as an investment, as if American paper money is reaching the end of days.
• The Toob has changed… Long gone are the days of the Sci Fi Channel running cheesy movies about giant mosquitoes – instead they’ve been replaced with “end of the world” stuff involving mega twisters, mega volcanoes, and mega earth faults. The History Channel has taken on the chant of “Hotel Ground Zero”;  “Clash of the Gods”; and probably most emblematic, “Life After People”.
• Video games are… well… frightening. And at this point, we don’t even talk about them. Others might, but we don’t.
• There’s no doubt that Iran will get a nuke while our elected geniuses bandy words with fanatics. (See link below.)
• Just heard tonight that Syria has its own uranium enrichment program going on. (Hell, why not? They’ve got so much conventional WMDs that they might as well join the Armageddon party…) Very little fanfare on the American homeland front though. Do you even know about this, or did you just take it for granted?
• Our economy over the next ten years?
• North Korea…
• Pakistan…
• What’s another car bomb in Iraq or another home-grown terrorist right here?
• Gun sales in the U.S.?
• Gee, Glenn Beck seems a little alarmed too, but who listens to him?

And it goes on and on and on… Lest you think I’m a complete nut (and the facts above don’t make you bristle just a little…) In 1913 (roughly a year before the start of World War I) psychologist Carl Jung dreamt of “rivers of blood”. And British politician Edward Grey had the same premonition of doom.

I can’t put my finger on it, but nonetheless, unless I miss my read, there’s a feeling in our collective gut (just like that night outside Madison Square Garden) that something’s brewing – that something very wicked this way comes. Be honest… Does your “Herd Intuition” tell you otherwise?

Alan Speakman

Recycling, and how it wastes money

My father’s workplace, has a facility dedicated to paper being recycled. He’s a mailman, so this makes sense… The paper plus mailman part does. But the recycling part, not at all. But let’s move on. In order to recycle, you must to do a few things…

1. You must pay for it. Recycling’s not free, nothing is… Recycling is expensive. You’ve got to pay people to keep things running.
2. You have to maintain the machines that recycle your paper. This is very expensive. Machines breakdown. Machines, will always breakdown, eventually.
3. How does the government pay for these expensive things? With your tax money. So.. next is number 4.
4. They must steal your money.

This is ridiculous… When my dad was a kid, they used to ramble on about global cooling. When i say ‘they’… I mean the same people that ramble on about this global warming shit today… Liberals! Liberals will do anything to get people to spend their money! They steal your hard earned money, away from you, for unneeded things not anyone needs. In contrast… No one needs recycling, the world doesn’t need it. You could be spending that money on your family! Or on your interests and hobbys! Not on recycling paper when it doesn’t have anymore, of a positive outcome on the environment.

The earth has been around for four billion years. If I throw a piece of paper in the recycling bin VS. Throwing it in the trash can, it won’t change a thing, the earth will still be here for billions of years more. The environment is nothing to worry about, don’t let yourself be fooled into this nonsense.

The earth recycles trash, litter, more trash… That are found in natural places like forests, and places of the like… By itself. Recycling is a natural occurring phenomenon. But, we don’t need to worry about it. Nature will handle it, the environment will handle it.

Don’t support recycling. Recycling is a waste of money.

Feed the Pig

Cash for clunkers had two objectives: help the environment by increasing fuel efficiency, and boost car sales to help Detroit and the economy. It achieved neither. According to Hudson Institute economist Irwin Stelzer, at best “the reduction in gasoline consumption will cut our oil consumption by 0.2 percent per year, or less than a single day’s gasoline use.” Burton Abrams and George Parsons of the University of Delaware added up the total benefits from reduced gas consumption, environmental improvements and the benefit to car buyers and companies, minus the overall cost of cash for clunkers, and found a net cost of roughly $2,000 per vehicle. Rather than stimulating the economy, the program made the nation as a whole $1.4 billion poorer.

As the journalist Henry Hazlitt wrote in his classic, “Economics in One Lesson,” you can’t raise living standards by breaking windows so some people can get jobs repairing them”.

And boy does Obama and Company love to break those windows. Or is that “saved or created” those windows.

The unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected.

The report shows that the worst recession since the 1930s is still inflicting widespread pain and underscores one of the biggest threats to the nascent economic recovery: that consumers, worried about job losses and stagnant wages, will restrain spending. Consumer spending accounts for about 70 percent of the nation’s economy.

And some analysts expect that it will grow to 10.5%.

And gee, I thought the stimulus package was only supposed to make it go as high as 8%. And the Health Care bills will cost less than $900 billion… and save us all from ruin!

Trust us.

And, of course, the Media is entirely “fair” and unbiased….

———

This does, however, provide an excuse to highlight an interesting new report by the Business and Media Institute, a free-market think tank. The institute’s Julia Seymour undertook what sounds like a tedious task: comparing TV network news coverage of unemployment during the Reagan recession and the Obama one:

The Business & Media Institute analyzed network unemployment stories on the evenings that data was released by the Bureau of Labor Statistics between March 2009 to September 2009 and March 1982 to September 1982. There were 66 stories in all–35 stories in 2009 and 31 stories in 1982.

The findings are similar to our anecdotal observations of the AP’s reporting prior to today. The networks “were 13 times more negative in their treatment of Reagan than Obama.” Twenty of 22 stories mentioning the Reagan administration portrayed it negatively, versus 1 out of 15 that mentioned the Obama administration. Most telling is the comparison of how the nets–and, in one case, the same newsman–treated identical unemployment rates during the two recessions:

But Charles Gibson illustrated how dramatically different the network coverage of Reagan and Obama really were.

Gibson, who was a Capitol Hill correspondent for ABC in 1982, told viewers May 7, 1982, “There really isn’t any good news in the statistics. All the numbers are bad.” He then quoted two Democratic attacks on Reagan including Rep. Henry S. Reuss, D-Wis., who charged that Reagan’s “policies aren’t just mistaken, they’re wicked.”

But as an ABC anchor in 2009, Gibson was full of hope. He introduced that night’s story saying “sometimes a bad jobs report can look good.”

“345,000 Americans lost their jobs in May, a big number to be sure. Traumatic if you are one of the 345,000. But the number was smaller than economists had predicted, and that’s good news,” Gibson said before admitting that the unemployment rate of 9.4 percent was “pretty bad.” Neither Gibson, nor reporter Betsy Stark mentioned President Obama at all that night.

On Aug. 7, 2009, Gibson suggested “the economy may be finally turning the corner.”

———————–

So what if the unemployment is rising, it’s not as bad as it was and it could have been worse.

But in 1982, the world was coming to an end as we know it.

And it was all George W Bush’s Fault.

Yep, that’s your Ministry of Truth for you.

As for the economy — mixing things up for members of Congress, with a little deception: “The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today,” ABC’s Matthew Jaffe reports. “Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country’s economy, federal officials knew otherwise.”

Reporting from Washington – The Treasury is unlikely to get back the full amount of money lent under the Troubled Asset Relief Program despite a recent spate of repayments from large banks, warned the program’s watchdog.

The program “played a significant role” in rescuing the financial system from a meltdown, Neil Barofsky, special inspector general for TARP, testified before the Senate Banking Committee on Thursday. But it was “extremely unlikely that the taxpayer will see a full return on its TARP investment,” according to his prepared testimony.

Losing some money was almost inevitable, said William Goetzmann, a finance professor at the Yale School of Management.

“The intent of TARP investment was not that it was a great investment for the U.S. taxpayer,” Goetzmann said. “The intent was to save the U.S. financial system, and that was going to cost some money.”

Juxtapose that with:

When President Obama announced on June 9 that some financial institutions would be allowed to repay Troubled Asset Relief Program dollars, he said the massively expensive TARP bailout had made money for the federal government.  “It is worth noting that in the first round of repayments from these [TARP recipients], the government has actually turned a profit,” the president said.

So if we have no hope of getting all the money back, how is that we turned a profit exactly??

Is that like, “we’re bankrupt” so lets spend trillions more?

No, the government was handed stocks in the banks they lent the money to. They became shareholders.

Last month, the General Accountability Office (GAO) reported that, through June 12, 2009, the government had received $6.2 billion in dividend payments.

But will then make for the losses. Unlikely. Since many of the banks who were supposed to pay those dividends, didn’t.

Indeed, in its June report, the GAO revealed that 17 troubled institutions have not paid their dividends, much less repaid the TARP money itself.  And last week, the Wall Street Journal reported that three other institutions were not paying dividends.

Shocking, I know…

So yet another government program loses money.

But don’t worry, Health Care Reform will cut the deficit!

And won’t cost “not one dime”!!!

Oh, and Rep. Barney Frank wanted to spend this 6.2 billion right out of the shoot on more subsidies.

“We don’t know if TARP is going to be making any money, so taking the dividend payments going back to Treasury is pretty questionable,” says one House GOP aide.  But now, Frank is proposing that dividends be spent immediately.

So, don’t worry, they are fiscally responsible with your money.

That’s why they have so many taxes coming down your throat soon.

They need more to spend!!

Fanny and Freddie - DOING IT AGAIN ?

Gee,  thank you Nancy Pelosi, Barney Frank and Chuck Schumer.  Now you want Freddie Mack and Fanny Mae, who were the major culprits in the 2008 - 09   mortgage meltdown to do it again.  This is incredible. 

You forced the banks to make loans to those that could not afford them; you got Freddie and Fannie to guarantee them.  They went bankrupt when the borrowers could not repay the loans.  We, the tax payers,  then covered all your  (Government)  obligations.

Now you want to help the small mortgage lenders by guaranteeing their short term debt, because you have already saved  the big mortgage lenders, who have 50% of the market.  THIS   IS  A  NOBLE   EFFORT, But  these lenders will be loaning money long term and  borrowing money  short term,  which is a prescription for another disaster, which the tax payers will pay for.  If you want to do a favor for the small mortgage companies, make them long term loans,  and do not guarantee their short term loans; and then buy their loans.  The home prices should be so low, you will not loose any of our $ as long as the loans are 70% to 80% of value or price.

Get out of the way,  and quit buying votes,  and let, the markets function  without any artificial intervention,  and  THE ECONOMY WILL  TAKE OFF BY ITSELF.

http://online.wsj.com/article/SB10001424052748703746604574460903449028672.html

 

Dollar Daze

National Public Radio is reporting that the Dollar has fallen, and foreign banks are increasingly keeping Euros and, of all currencies, the Yen as their reserve denomination. The Dollar has fallen 12% from its recent peak, and appears likely to lose additional value.

Quote:

In March 2008, before the financial crisis, the dollar was at historic lows against a basket of currencies. Then, when the financial storm struck, the dollar strengthened as investors rushed to the safety of U.S. Treasury securities.

Now that the worst of the crisis appears to have passed, the dollar is under pressure again. It’s down more than 12 percent from its recent peak. Fred Bergsten of the Peterson Institute for International Economics says sentiment about the dollar has now turned negative.

While this is alarming to many, to some it is no surprise. In fact, many economists predicted after the Bush Administration’s Troubled Asset Relief Program (TARP) and the Obama Administration’s Stimulus bill, the hundreds of billions of extra Dollars being dumped onto and the mounting deficits of the United States Government would depress the Dollar significantly when compared to other currencies.

The result: Americans are poorer now than they have been, compared to the rest of the world. Since the Dollar has lost value, it takes ever more Dollars to buy products from other nations. Fears of more and greater deficits in the coming years create even greater distrust of the Dollar, resulting in more hedging with other currencies. It is a wicked spiral that can only be broken by more responsible actions by our government.

The United States must come back to reality: We can no longer spend like bachelors on a weekend in Las Vegas, signing for ever greater lines of credit to cover our losses. The International Casino is rapidly approaching the point where it will call in our debts, while we have blown our chips at the craps table.

Americans must understand that the current level of spending by our Federal Government cannot be sustained. Already, foreign countries are refusing to purchase our debt, meaning that we must simply print more Dollar bills to cover our deficits. This increase in the number of Dollars available is precisely what is causing the deflation of the currency: Because there are so many more available, the Dollars themselves are worth less.

Just like Casino chips, the Dollar or any other currency has value simply because we believe it does. Even when backed up by gold or other precious metals, currencies maintain only that value that the precious metal maintains. If tomorrow everyone decided that gold was worthless, it would be so, and the millions of tons of refined gold would not buy a shanty on the edge of Mogadishu. If a Casino declared bankruptcy, its chips would likewise hold no value. The same goes for the Dollar: If tomorrow every other nation decided that the Dollar held no value for them, we would be unable to conduct international trade to buy oil, microwaves and iPods.

The result of this devaluation? Already there are reports (although denied) that OPEC is considering ending or limiting its practice of trading oil in Dollars, as Dollars buy less and less oil over time compared to the more stable Euro. The massive increase in the number of Dollars is leading, inexorably, to inflation. Indeed part of the reason for expensive crude oil is the steady drop in the value of the Dollar over the last decade, worsened lately by its precipitous drop compared to other currencies.

Both Parties and both Presidents Bush and Obama can lay claim to some of the justifiable fear over the Dollar. The wild, excessive spending on transfer payment programs such as Medicare Part-B, Welfare and Social Security (where more than half of our Federal Budget is spent) as well as corporate welfare programs like TARP and Cash for Clunkers, combined with the seeming lack of concern over the ever-increasing American national debt gives other nations strong reason to doubt our fiscal and economic capability to honor our currency. As we propose to spend hundreds of billions of additional Dollars on new programs, the queasiness felt by foreign ministers and private bankers transforms into outright nausea.

Similar events to our current situation happened in Weimar Republic in Germany prior to the National Socialists (aka “NAZIs”) being elected into power. It happened again in Argentina in the 1950s. Will we choose to end our excessive borrowing or follow the paths of these states into ecnomic and social ruin, civil unrest and, quite possibly, into war?

If we cannot stop the spending, curb our deficits and reduce our debt, at least as it relates to GDP and overall tax receipts, we will find outselves losing everything at this international game of Roullette. At one time, in Las Vegas when a gambler could not pay his debts, they broke his knees. America needs to quit while it is behind, lest we find ourselves on crutches.

Originally posted at The Minority Report.

Should We Nationalize Power Gen?

I know that the word “nationalize” raises all sorts of nasty thoughts in the American imagination and is probably closely associated with the word “socialism”. However, there is a precedent of sorts for it insofar as the US government has funded a ton of dams provided hefty subsidies to local power coops for six decades starting in the 1930’s in an effort to bring electricity to everyone in the country who didn’t have it. And to be sure, there is certain amount of federal dollars still going into the industry today on various levels. But would it be so bad if the federal and state governments took more direct control over the construction of power generation facilities. After all if we are to meet the power demands and environmental targets that are rapidly coming up on us a big effort to build expensive, bureaucratically challenging nuclear power plants is going to have to be a big part of the effort. And theoretically at least, the Feds have more of the money and influence to get these projects rolling than most private concerns. Especially at a time when the amount of loan money needed to finance such projects is scarce and few have a machete sharp enough to cut through the truckload of red tape associated with such things.

Okay, so what might some of the advantages of this idea be? As mentioned already the Feds have a bunch of money and the ability to blow through all sorts of red tape when they want to.  How about land? The Fed owns a lot of real estate and whether you’re putting up a nuke plant, a wind farm, or a solar power station it’s gotta go somewhere. And if the folks putting up the place already own the land that  takes a lot of the expense and upfront hassle out of it. The Feds could also order up the simultaneous construction of several projects at once, which in turn would create tens of thousands of jobs federal and private. 

I know, there’s a down side too. Like the Fed has a tendency to over manage while they overlook. And of course we would be the ones having to foot the bill for this scenario.

But in the end do we really have a choice if we’re going to get this things done in any sort of expeditious time frame? Much of the rest of the industrialized world already follows this example. And in case no one had noticed, a lot of those places are beginning to kick our butts economically as a result. Look, I am not advocating The Socialist States of America here. I am just wondering out loud whether we should get uncle sam to kick start what we all know needs to be done.

Any commnets?