Hmmm…a scientifically tracked and computer predicted event that turns out not to happen at the appointed time, and certainly not to the predicted degree.
Much huffing, puffing, trauma, wall-t-wall TV coverage and then…
Nothing?
Or, at least nothing much.
Where have I heard this before?
And we are thinking, thinking….
The Hawaii Inundation Warning and tsunami alerts have been canceled.
Hilo, which was scientifically predicted to be as much as seven feet was considerably less than that “computer predicted’ number. We will await the actual MEASUREMENT.
I have previously stated that MEASURMENTS are science – computer predictions are Ouija Boards.
Case closed.
(My friends are aware of my background as a machine language programmer, head of R&D in computers at the Naval Electronics Center, Core Adjunct Prof. of Computer Science — 14 years, etc)
Yoram Bauman (PhD), “the world’s first and only stand-up economist,” will be in Minnesota next week.
His Schedule:
* Mar 02: University of South Dakota. At 8pm at the Business School Auditorium at USD. Free and open to the public!
* Mar 03: St Olaf College. At 8pm in Holland Hall room 501. Open to folks at St Olaf College and neighbor Carleton College.
* Mar 04: St. Cloud State University. Part of the Winter Institute. I’ll be speaking at 7:15pm, after dinner.
* Mar 05, 2pm: St. Croix Preparatory Academy (Stillwater MN). Open only to folks at this public charter school, and congrats to Rebecca Wahl and students for getting this gig via my free show Google map!
* Mar 05: Macalester College. I believe this is at 4:30pm in the JBD lecture hall, but check google as the date approaches for confirmation. Macalester folks only, sorry.
The retailer notified the state of Ohio that it would be terminating 314 employees as part of the closings.
Kmart to close five more Ohio stores Thu, 18 Feb 2010 16:36:00 GMT
Well here’s a bad mood waiting to happen. I live in one of the toughest a sections of Cleveland, which is actually the poorest section of the entire city, and is called, the stockyards. So, when I see that Kmart is basically going to lay off most of its work force that depend on Kmart to survive, like I said, here is a bad mood just waiting to happen. I’ll say it again. Cleveland needs some sort of brokerage personality. Cleveland needs the kind of personality that can sit across the table from someone who has 30 or $40 billion and be able to schmooze that person into investing perhaps 20 or $30 million in Cleveland. Unfortunately, Cleveland doesn’t have a personality like that. I mean, there’s nobody that I know of that has that kind of moxie in Cleveland. And until Cleveland can actually draw people here to want to invest in the city, Cleveland is just not going to grow.
The reality is, which most people don’t realize is that the Maschke family and their friends, meaning, the Hana’s, and the other families who were friends of the Maschke’s, actually built most of what Cleveland was. But as generations what on and Cleveland lost a lot of its brokerage talent, Cleveland also lost personalities who could actually schmooze or represent the city of Cleveland in such a positive way as to be able to draw businesses to Cleveland.
And so for those who don’t know, Cleveland Ohio in the space of approximately 6 months saw the population drop from 1,500,000 people down to just 400,000 people. So now Cleveland is basically struggling economically so badly that it is hard for people to realize how Cleveland is suffering. For example, the residents of Cleveland have been informed that as of January 1, 2010, the city of Cleveland will begin charging approximately 9 dollars per month just to pick up our trash.
That’s how bad it’s getting.
Now, the reality also is something that someone urged me to share. When I say that Cleveland is in my blood, it’s the truth. In 1968, when I was being operated on at University hospitals of Cleveland, I began to bleed to death shortly after I was opened up on the operating table. The blood loss was so huge that I basically went through all the blood in University hospital within a matter of minutes. As a result, my family and the station manager of Channel 3, then with the call letters of KYW TV, in Cleveland, went on the air and begged people to please come to University Hospitals to rescue me and to save my life. My father was in tears as he pleaded on the air for his fellow Clevelanders, to please come and save the life of his son. The plea was broadcast over three counties.
According to my family and other people who were there at the time, the brave and wonderful people of Cleveland, rushed to the hospital. And when all was said and done, 5000 people, 5000 of my fellow Clevelanders, from 3 counties, had come to rescue me and to save my life, by giving blood so that the doctors could continue their life saving surgery on my spine, that. was taking place on September 1, 1968. And so the reality is that when I say that I have Cleveland in my blood, I’m really telling a true story of a single moment in time, from so long ago, when I literally was in the cross hairs of death, and my fellow Clevelanders, with their courageous and compassionate effort said, with their actions… NOT ON MY WATCH!
I could not love any city more than I love Cleveland Ohio. All my life I have struggled with so many different issues, both physical and psychological, that I have worked as hard as I could to try to always do something positive with m life, because I always felt that I was a burden to society as a result of my physical disabilities and then subsequently my mental disabilities. So as a result of my being in the position where I am moving towards 60 years old, and basically dealing with some rather serious and not very pleasant physical terminal disabilities, I am always prepared, at almost every given second to give up my life, in defense of various issues I have supported all through my life. Like I am prepared to die in defense of the Constitution or in defense of women’s rights or children’s rights or gay rights or equal rights for all Americans and people throughout the world. But I’m also prepared to die in any given second to help my beloved Cleveland, If I could, I would give my life to help people around the world to realize the courage and the bravery of the people who live here in Cleveland Ohio. For having lived here for over 59 years, I can tell you that not only is Cleveland, we Clevelanders love to say, , the best location in the nation, but I have always looked upon Cleveland as being what I have always called it, which is in fact, a diamond on a sea of glass.
The Terminal Tower Of Cleveland, Ohio – taken in the 1960’s from the top of the Erieview Plaza building
Now, I took this picture when Vernon Stouffer, the founder and owner of Stouffer foods, requested me to take a picture of the terminal tower for his personal office. The picture was taken in the 1960s when I was running a professional darkroom. And this is simply the proof of that picture. Meaning it was a proof shot. And a proof shot is a picture of what you are going to do for your clients. But that is taken with not the camera that you’re actually going to do the shooting with but is in fact taken by another camera simply to get your perspective to make sure that your position and other things are correct, for when you actually take the shot.
I kept this picture all these years. And like I said, it’s easy for people to discount Cleveland and to make fun of our city, But that’s because most people don’t really understand the huge courage and the unlimited kindness that are literally the hallmarks of our great city, Cleveland, Ohio. So, I must admit that I DO love the phrase, the best location in the nation. But due to a single moment in time, when I had no idea that there were any friends about, and yet they came by the thousands, for just one purpose. To save the life of an unknown fellow Clevelander, a young boy of just 17 years of age, who lay dying on an operating table, and who desperately needed their help. And as I said, their courage has lived in my heart all these years. So, on that account, in my heart, Cleveland has always truly been, for me, … a diamond on a sea of glass.
Economic Fact Sheet (Current as of Jan. 2010)
1. The United States currently has a national debt in excess of $12 trillion.
2. The interest on the national debt is now in excess of $11 trillion.
3. The operating budget for the United States government is now in excess of $43 trillion.
4. The members of the United States Congress stole $200 million from the Medicare fund, which was going to go for cost-of-living increases to Medicare recipients, so that the members of Congress could have their paper medical records converted to computerized medical records. The attitude by the members of Congress was that they didn’t care if they murdered American citizens as long as they get the medical protection they wanted.
5. The Christian conservatives and the Republican Party are taking the stand that they do not want American citizens to have any kind of healthcare the of healthcare is extended to anyone that the Christian conservatives or the Republican Party does not like. And this is based not on constitutional law or the Christian conservatives and the Republican Party being patriots. It’s based upon the Christian conservatives Republican Party demanding that the American government understand that no Christian conservative or Republican Party member will in any way ever support the US Constitution above their Christian religion and above their Christian Bible. And so as a result, their Christian Bible and Christian religion says that healthcare should not go to Hispanic Americans or black Americans or Jews or Muslims or gay Americans or Native Americans or anyone who is an immigrant that the Christian conservatives Republican Party just doesn’t happen to like.
And so as a result, the Christian conservatives Republican Party members are trying to commit mass murder in United States by denying health care to millions of American citizens who are in desperate need of medical attention. But the Christian conservatives Republican Party doesn’t really care about that because as far as they’re concerned if they have to walk through rivers of blood to make sure that their Christian religion and their Christian faith is supported more than the Constitution of these United States and the Christian conservatives will do just that.
6. The current level of unemployment in the United States is now over 10%.
7. The current cost for liquidating the national debt is now in excess of $39,000 per person, which means that every man woman and child in the United States would have to pay at least $39,000 to be able to liquidate the national debt.
8. When you look at the history of United States from the American Civil War until present day you find that the Republican Party and Christian conservatives were in total and complete control of the United States government every single time there was a financial crisis from the American Civil War to present day. And that basically means that all the policy decisions that were being made by the American government during these times when these financial catastrophes were taking place were being made strictly by Christian conservatives and the Republican Party . And of course that’s all public record.
9. As my financial analysis of the global economic system , in my see also section below, clearly shows, it was the Republican Party and the Christian conservatives under President Bush who gave the American banking industry $400 billion of taxpayer money and simply told the banking industry to use the money anyway they wanted to. And the banking industry did just that they use the money to pay for expensive gifts and presents and take vacations.
10. To date, the banking industry has only paid back $30 billion out of the over $500 billion that was given to them by the American taxpayers.
11. The issues of profitability indexing, pursuant to profit margins and per unit costs and customer bases as they relate to compensation packages throughout the entire corporate sector have not been resolved. That basically means that most businesses are being held hostage by upper level management and executive employees in their own companies who are demanding more and more for their compensation packages. As a result of this most companies are having to readjust their per unit costs for their goods and services in such a way so that what they are doing is pricing their services and their products. So that mostly the upper class and the wealthy will be able to afford them. And this is being done so these companies and corporations can get as much money into their company as possible.
But they are in fact forgetting one of the major factors which is that while most of the money that any company gets comes from the wealthy are customers most of their day-to-day cash flow actually comes from the middle and lower income customers. This is true regardless of where that company exists. So as a result of this most of the companies in the corporate sector are operating on what is known as a cash poor basis. And this basically means that since they are pricing their goods and services in order to get the most money possible they are foregoing pricing their goods and services so they will be more affordable to the middle and lower income customers, which actually provide these companies with their day-to-day cash flow. And so as a result, these companies don’t have enough money to pay for employees or many of the other day-to-day costs that come up.
This factor has not been dealt with in any country in the world at this time. Furthermore, these companies are refusing to be honest about their financial reporting. They are constantly using and accounting,/statistical variance, which is .5%. And .5% variance is such a large variance pursuant to statistical and financial analysis that you can basically drive a moving van through the space. That is allocated for plus or minus error correction in the statistical analyses and financial analyses that are in fact done with .5% variance. This is why I have never used that level of variance statistically or financially. I’ve always used .05% variance because it is such a small variance that the statistical analysis of the profitability analysis cannot be falsified. It is true that using .05% variance does require an additional 100,000 to 200,000 calculations in order to be able to complete the analysis. But when you consider that the final product is incredibly more honest and reliable. It’s worth it.
12. The banking industry has turned cruel. For example here in Cleveland Ohio Keycorp is taking a lot of pride and threatening senior citizens and kicking them out of their homes so that they can foreclose on the property. This is happening all over Cleveland Ohio and KeyCorp actually is one of the most hated banks in the entire state of Ohio. But KeyCorp is not the only one who’s doing this practice. Because was really happening is that banks all over the United States are basically threatening senior citizens with foreclosure to the point where suicides are now escalating and accelerating at an alarming rate. So badly that the medical community is swamped by the number of suicide calls they are getting. And this is all happening because KeyCorp and other banks like KeyCorp are basically taking the attitude that they don’t care how many men and women and children they have to murder. They just want their money.
When you consider these kinds of factors are going on in the banking industry you realized that the other thing that’s happening is that senior citizens and homeowners are becoming incredibly sick. Do becoming physically ill as a result of the horrible attitude that KeyCorp in other banks like KeyCorp are pushing on the citizens. And there is no help for this at all.
13. Additionally, the medical community is helping with this because we have a hospital here in Cleveland Ohio called MetroHealth that basically is working hard. Just like KeyCorp to threaten senior citizens and have them thrown out of their homes. So that they can foreclose on the property. And basically kill the individuals. I have been personally threatened by KeyBank and MetroHealth and have recorded conversations proving that.
So MetroHealth does all these commercials where they’re talking about how good a hospital they are and yet they have been sued a number of times for Medicare fraud. They have also been sued by their own employees for unfair business practices. And they have lost doctors so badly because they don’t treat their doctors very well either. Nobody likes MetroHealth.
And for the record, it needs to be understood that my grandfather’s brother, Dr. ally Maschke, was the director of medicine at mount Sinai medical center here in Cleveland Ohio until his death. And my cousin, Dr. Victor Vertese, was also the director of medicine at mount Sinai medical center until his death. Additionally, my grandfather, Maurice Maschke, and his business partner, Mark Hanna, who founded the Hana mining company, which became the 3M company, basically built mount Sinai medical center in Cleveland. And in addition to that, my father, Maurice Maschke Junior, was on the Board of Trustees at Case Western Reserve University, University hospitals of Cleveland, Cleveland clinic, and mount Sinai medical center until his death. And in addition to that, my father, Maurice Maschke Junior, and I., were partners and co-owners of pioneer linen supply company of Cleveland Ohio for 25 years until 1975 when we sold the company.
14. So given all of the foregoing as actual facts. The only reason that the accelerated growth has taken place is because certain industries in the United States have in fact been making money. Only because their industries are addressing sections of the population who are otherwise disenfranchised by most of the business sector. For example Tyco International is a business that specializes and fire prevention and warning systems and security systems. And of course they’ve done a really good job because people are scared to death and living in their homes and there are so many foreclosures going on that people are having to protect their homes because in most cities the number of police has dropped so badly because most cities are in a huge budget crisis. In Cleveland, Ohio, for example, the city went from 1,500,000 people down to approximately 400,000 people in only a matter of months. And conditions are so bad in Cleveland that Cleveland is now charging nine dollars a month just pick up our garbage.
So given those facts Tyco International for one example is making a lot of money because people are having to protect their homes because they can’t really, the police that much because the number of police has dropped so the greatly because of the budget crisis going on throughout the world and throughout the United States.
15. Additionally, when you look at a company like Microsoft, who reported a huge profit. This is because Microsoft isn’t doing really well. Because they’re not the only reason Microsoft made this huge profit was because their previous product, Microsoft Windows Vista was actually one of the worst programs and products Microsoft ever created. And so since it did so terribly in the market naturally Microsoft’s increased now is looking fantastic, which is not because if you analyze the overall productivity and effectiveness of Microsoft you will see that they are basically floundering under Steve Ballmer’s direction.
So again, it’s really easy for people to talk about how well the market is doing that the foregoing represents the actual facts of what’s going on in business.
And as I said before, I have been studying the stock market since I was six years old. At age 6 I started studied the stock market at Prescott ball and turban here in Cleveland Ohio. With one of the partner broker’s, Bernie Towell, who was a personal friend of mine. And so every day for four hours every day and age 6 until age 16 I studied the stock market and learned economics and financial analysis . At age 16, while working and being a partner and co-owner of pioneer linen spy company in Cleveland, I did my first financial analysis and profitability analysis . It was done on the linen supply company’s of Cleveland Ohio. The analysis was so good that the results were used to program some computers at the time. And in 42 years and having been a financial analyst I’ve never once been wrong in any financial projection I’ve ever done. Not once. Just like I’m not wrong now.
In my financial analysis of the global economic system in my see also section below, I clearly show that the American market system was going to lose $800 trillion of market value in the third business quarter of 2009. I further substantiated this claim last January in January of 2009. When I explained that the American market system was going to take a huge hit in the third quarter and that it would come out to about $800 trillion of market loss. And that this was in fact in line with the Kondratieff wave . And in fact that’s exactly what did happen. Which means the analysts were wrong. And I was right.
So again, if you go ahead and look at all these factors without looking at all of the peripheral details than you are going to be responding to the information in a very symptomatic, or symptomatically oriented manner whereby you will behave to the information in an extremely reactionary way. By the like term, if you look at all of the information regarding economics throughout the entire global economic system in a problematically oriented manner you will be looking at the financial information in a more anticipatory manner. And much more pervasive rather than in a stereotypical or linear manner. And as a result, you will begin to understand that all of these different factors that I have brought forth in this article right now. Actually do justify what I’m saying that the American market system is on the verge of collapse. And that the economic system for Greece is about to go under. And that unemployment in Spain and France and England is running at almost 30%.
These do not make things look like they’re going good in the United States is basically doing nothing but lying about the economic they I went to school with most of the people who run a lot of these companies in the United States and who are working on Wall Street either went to school with them at Case Western Reserve why went to school with them at Fort Lewis college board went to school with them at southern Arizona school in Tucson Arizona. Or, I did business with them throughout my life.
So again, this is a reality check. And all I can say is, if you don’t believe what I’m saying that’s not a problem. Because you haven’t believe me, for 40 years, what I’ve been talking about all of these issues facing the economic system in the United States and the global economic system. So why would you believe me now?
But the fact is that just because you may not believe what I’m saying doesn’t mean that what I’m saying is not true. Simply means you are refusing or are not able to see the veracity in what I’m saying and that’s all it means.
See Also:
The American Civil War
Slavery
The Emancipation Proclamation
Abraham Lincoln
John Wilkes Booth
The Christian Conservatives
World War I
Prohibition
The Great Depression
The Battle of Washington
World War II
The Korean War
The Vietnam War
Richard Nixon
Oliver North
The Iran-Contra Affair
The Gulf War
The Savings-And-Loan Crisis
Bill Clinton
The Balanced Budget Amendment
The Iraq War
The Kondratieff Wave
Profitability Analysis
Financial Analysis
Vance Packard
Laissez-Faire
Better Business Bureau
Department Of Justice
DirecTV
Wal-Mart
KeyCorp
Dell Computers
Lawsuits Against Dell
Capital Punishment
Homophobia
Xenophobia
Racism
Prejudice
Bigotry
Fascism
Eugenics
White Supremacy
Mein Kampf
Adolf Hitler
The Ku Klux Klan
The Army of God
US Domestic Violence Statistics
US Child Abuse Statistics
US Child Mortality Statistics
US Religious Demographic Statistics
US Obesity Statistics
US Caesarean Statistics
US Uninsured Americans Statistics
Insurers Overcharge Medicare
Medicare Ponzi Scheme
US Food Recall Statistics
US Suicide Statistics
Medical Malpractice
Medical Mistakes
Gay-Rights
Transgenderism
Women’s Rights
Children’s Rights
Human Rights
Pro-Choice
NRA
Oliver Wendell Holmes
The US Constitution
The Bill Of Rights
Recording Telephone Conversations
Treason
Sedition
How The Republicans Use The Constitution To Lie (article 1, section 6, subsection b) of The US Constitution
For the record, I pro-life. I do not support violence against, or the killing of any human being under any circumstances! And the only way that I ever deviate from that stand is that I do not believe that the Almighty, and/or God has ever given any human the right to dictate to any woman how she is to arbitrate her life with the Almighty, and/or God . Therefore, I am also pro-choice, in that I believe that all women deserve the right to choose for themselves the fate of their souls, and their own bodies, pursuant to their relationship with the Almighty, and/or God . For an expanded explanation please see my article entitled, “Second Gear “
BERLIN – Germany’s Deutsche Telekom reported Thursday that its fourth quarter loss narrowed to euro3 million ($4.1 million) on improved revenue in its domestic market but said the financial crisis in Greece had cost its operations there euro500 million.
The German provider of high-speed Internet access and home and cell phone service said the quarterly loss compared with a euro730 million loss a year earlier, when the global credit crunch was most intense.
Revenue was up more than half a percent in the final three months of 2009 to euro16.2 billion, a sign of improvement in its critical home market. The figure compared with euro16.1 billion a year earlier.
The company was hurt, however, by the ongoing financial turbulence in Greece through its acquisition of Hellenic Telecommunications Organization SA, or OTE, in 2008.
For the year, the company earned euro353 million in net profit, down 76 percent from nearly euro1.5 billion in 2008 business card. Revenue, however, managed to rise nearly 5 percent to euro64.6 billion compared with euro61.6 billion the year before.
“After a bumpy start, we rounded 2009 off with good results,” said Chief Executive Rene Obermann. “Cost discipline was key to getting through economically challenging times. However, we did not save at the expense of the future, but continued to invest heavily.”
Late Wednesday, the company committed itself to paying dividends from this year through 2012, and proposed a dividend of 78 euro cents a share for 2009. From this year to 2012 it said it planned to pay at least a 70 euro cent per share dividend and pledged to buy back shares, a move that it said was worth around euro3.4 billion.
___
On the Net:
http://www.deutschetelekom.com
Deutsche Telekom loss narrows despite Greek costs
Hot News: Deal Seen for Stake in China Investment Bank
“According to the US Census Bureau, the US population in 2000 was 281,421,906. Of that, 194,552,774 (69.1%) were white; 33,947,837 (12.1%) were black; and 35,305,818 (12.5%) were of Hispanic origin. Additionally, 2,068,883 (0.7%) were Native American, and 10,123,169 (3.8%) were Asian.”
Source: US Census Bureau, Department of Commerce, Census 2000 Redistricting Data (P.L. 94-171) Summary File for states, Population by Race and Hispanic or Latino Origin for the United States: 2000 (PHC-T-a) Table 1.http://www.census.gov/population/cen2000/phc-t1/tab01.txt
“Most drug offenders are white. Five times as many whites use drugs as blacks. Yet blacks comprise the great majority of drug offenders sent to prison. The solution to this racial inequity is not to incarcerate more whites, but to reduce the use of prison for low-level drug offenders and to increase the availability of substance abuse treatment.”
Source: Human Rights Watch, “Racial Disparities in the War on Drugs” (Washington, DC: Human Rights Watch, 2000), from their website at http://www.hrw.org/campaigns/drugs/war/key-facts.htm
—
“Because of their extraordinary rate of incarceration, one in every 20 black men over the age of 18 is in a state or federal prison, compared to one in every 180 whites.” In five states, between one in 13 and one in 14 black men are in prison.
Source: Human Rights Watch, “Racial Disparities in the War on Drugs” (Washington, DC: Human Rights Watch, 2000). http://www.hrw.org/legacy/reports/2000/usa/Rcedrg00-01.htm#P149_24292
—
“When incarceration rates by State (excluding Federal inmates) are estimated separately by gender, race, and Hispanic origin, male rates are found to be 10 times higher than female rates; black rates 5-1/2 times higher than white rates; and Hispanic rates nearly 2 times higher than white rates.” Source: Harrison, Paige M., & Beck, Allen J., PhD, Bureau of Justice Statistics, Prison and Jail Inmates at Midyear 2005 (Washington, DC: US Dept. of Justice, May 2006) (NCJ213133), p. 10.
(2005) Of the 253,300 state prison inmates serving time for drug offenses at yearend 2005, 113,500 (44.8%) were black, 51,100 (20.2%) were Hispanic, and 72,300 (28.5%) were white.
Source: Sabol, William J., PhD, and West, Heather C., Bureau of Justice Statistics, Prisoners in 2007 (Washington, DC: US Department of Justice, December 2008), NCJ224280, p. 21, Appendix Table 10.http://www.ojp.gov/bjs/pub/pdf/p07.pdf
—
“At the start of the 1990s, the U.S. had more Black men (between the ages of 20 and 29) under the control of the nation’s criminal justice system than the total number in college. This and other factors have led some scholars to conclude that, “crime control policies are a major contributor to the disruption of the family, the prevalence of single parent families, and children raised without a father in the ghetto, and the ‘inability of people to get the jobs still available.’”
Source: Craig Haney, Ph.D., and Philip Zimbardo, Ph.D., “The Past and Future of U.S. Prison Policy: Twenty-five Years After the Stanford Prison Experiment,” American Psychologist, Vol. 53, No. 7 (July 1998), p. 716.http://www.csdp.org/research/haney_apa.pdf
—
“The racially disproportionate nature of the war on drugs is not just devastating to black Americans. It contradicts faith in the principles of justice and equal protection of the laws that should be the bedrock of any constitutional democracy; it exposes and deepens the racial fault lines that continue to weaken the country and belies its promise as a land of equal opportunity; and it undermines faith among all races in the fairness and efficacy of the criminal justice system. Urgent action is needed, at both the state and federal level, to address this crisis for the American nation.”
Source: Summary and Recommendations from “Punishment and Prejudice: Racial Disparities in the War on Drugs” (Washington, DC: Human Rights Watch, June 2000)
“In 2001, the chances of going to prison were highest among black males (32.2%) and Hispanic males (17.2%) and lowest among white males (5.9%). The lifetime chances of going to prison among black females (5.6%) were nearly as high as for white males. Hispanic females (2.2%) and white females (0.9%) had much lower chances of going to prison.”
Source: Bonczar, Thomas P., US Department of Justice, Bureau of Justice Statistics, “Prevalence of Imprisonment in the US Population, 1974-2001,” NCJ197976 (Washington DC: US Department of Justice, August 2003), p. 8.
—
“Due to harsh new sentencing guidelines, such as ‘three-strikes, you’re out,’ “a disproportionate number of young Black and Hispanic men are likely to be imprisoned for life under scenarios in which they are guilty of little more than a history of untreated addiction and several prior drug-related offenses… States will absorb the staggering cost of not only constructing additional prisons to accommodate increasing numbers of prisoners who will never be released but also warehousing them into old age.”
Source: Craig Haney, Ph.D., and Philip Zimbardo, Ph.D., “The Past and Future of U.S. Prison Policy: Twenty-five Years After the Stanford Prison Experiment,” American Psychologist, Vol. 53, No. 7 (July 1998), p. 718.
February 17, 2010 marked the anniversary of the American Recovery and Reinvestment Act (ARRA) implemented by the Obama administration to boost employment and lead us out of the economic recession of 2008 and 2009. RESI, also, held an important event on this day, our Annual Economic Outlook Conference. Ok, maybe, I exaggerate when I compare a national event to our event but it was still important to us. During the conference, three panelists provided us with some excellent opinions on the effects of ARRA on the economy. In particular, two Towson University economists, Dr. Dorn and Dr. Rhoads, were especially knowledgeable and gave us two differing opinions.
Dr. Dorn and Dr. Rhoads
Professor Dorn opinioned that ARRA has not been an efficient policy and American taxpayers will have to pay the bill through higher taxes in the following years. In his view, the government sector is not as efficient as the private sector and increasing public sector spending does not provide as many jobs as the private sector. He also questioned the assertion by some people that the US had many “shovel ready” projects that needed investment from the federal government. Few of the allotted dollars have been spent on public infrastructure projects so far and maybe there were not as many “shovel ready” projects as portrayed. In his opinion, the problem was the supply side of the economy. Instead, the Federal government should have given more tax breaks to businesses and eliminated corporate taxes for example. Also, the ARRA money would have been more efficient if the government would have given it to the private sector to spend and manage public infrastructures.
Professor Rhoads had a different take on the efficiency of ARRA. He reminded us that in extremely difficult times, the government needs to provide short term economic relief and has a legal obligation to create policies leading to full employment. In his opinion, the private sector does not have the ability to lead us out of one of the most difficult economic times facing the US economy. Many economists participated in the craft of ARRA and found this policy necessary. According to Dr. Rhoads, another positive aspect of ARRA was that the government made sure that it did not put all its eggs in the same basket. Seemingly, the government had learned from past policy mistakes. Therefore, spending for ARRA was rightly divided in several different areas; tax breaks to businesses, extended financial support to unemployed people or people in dire economic situations, and investment in public infrastructures. In addition, the use of monetary policy could have not been as successful. The federal interest rate has been kept at almost zero percent since 2000, which meant that it was not as effective as before.
These two distinguished experts made some excellent arguments regarding the efficiency of ARRA. And I left with so many questions of my own.
Was the policy crafted efficiently?
Will American taxpayers pay higher rates of tax in the future?
Should the Obama administration have implemented more tax breaks for the private sector?
Will more tax breaks on businesses create more jobs?
Etc… All in all the RESI conference displayed TU’s expertise at providing varied solutions to complex problems while also giving the audience food for thought going forward.
Where “are” stereotypes? We all recognize certain stereotypes as real stereotypes (perhaps African-Americans’ love of fried chicken or the poor driving skills of Asians) and reject others as simply made up (such as African-Americans’ fear of ceiling fans or the fact that every Asian man can do like a thousand push-ups) — even though we simultaneously believe that stereotypes are themselves untrue.
What’s more, very few people will admit to holding a stereotype, though they recognize them when they hear them. Indeed, when pressed even people who seem to be hardened racists will most often admit that of course not all black people are like that, etc. — calling into question whether racists, as stereotype-believers par excellence, really “believe” in stereotypes in some straightforward way. And even if we imagine that some people believe certain stereotypes to be at least grounded in truth — and indeed, it may be difficult to tell a stereotype from a genuine cultural difference — it is difficult to imagine that there is anyone out there who believes all of them, especially since they are so often contradictory (such as stereotypes of Mexicans as both lazy and absolutely desperate to work).
If no one (or almost no one, or no one who counts) believe in stereotypes, if they aren’t beliefs in a critical mass of heads, then where are they? Some might claim that they are in those heads, but as unconscious beliefs — but where else does the unconscious manifest itself but in what we do? That, I suggest, is where stereotypes abide, or at least the broader images that the stereotypes point toward.
For instance, one might say that the idea that black people like fried chicken — a food that surely every meat-eater enjoys, just as I know very few people of any race who don’t like watermelon — points toward the idea that black people just naturally enjoy cheaper food (not beef, but chicken; not fruit juice, but Kool-Aid) and therefore that the dominance of fast food outlets and convenience stores (rather than good restaurants and grocery stores) in black neighborhoods simply reflects the way black people are and is therefore “okay” — and so you don’t see the mayor of Chicago trying to get more grocery stores into black neighborhoods, for instance.
The dominance of cheap, unhealthy food in black neighborhoods is where all the stereotypes about black food and drink preferences “are.” And one could perform this exercise for all kinds of stereotypes that of course no one “believes” — we don’t have to believe them, because the very physical terrain of our society believes them for us. Where we go and what we do every day believes them for us.
Arizona’s three state universities presidents are proposing steep increases in tuition this fall, saying they are necessary to make up for cuts in state funding.
University of Arizona is proposing the steepest hike with a $2,130 jump in tuition and fees for undergraduate students, raising the cost by 31 percent, to $8,972 a year.
Arizona State University where President Michael Crow and his wife Sybil Francis are paid phenomenal salaries (as of last report back in 2007), is recommending a $1,286-a-year increase for new students, or 19 percent, bringing annual tuition and fees to $8,126. The daily reports that under the proposal, current ASU students costs would not increase quite as much but could still face hikes of nearly 14 percent, or $770 to $871 more a year, depending on when they started.
Incoming students at Northern Arizona University would pay $1,040 more a year, or 16 percent. The new charges would bring tuition and fees to $7,667 annually. NAU said Friday that new students’ tuition would be frozen at that level for the next eight semesters, though they could pay more in future years via fee increases.
The stunning proposals need the approval of the 12-member Arizona Board of Regents, which oversees the three state universities. Individual contact information is here. Let your voice be heard. In this toughest of economic times, these steep increases will keep many students out of the education loop.
The Arizona Constitution Article 11, Section 6 requires that “the university and all other state educational institutions shall be open to students of both sexes, and the instruction furnished shall be as nearly free as possible.”
Apparently ASU.’s President Michael Crow, U of A’s President Robert Sheldon, and NAU’s President John Haeger haven’t gotten the message.
In a corollary to the Laffer Curve, the Californian economist Kurt Hauser pointed out that no matter what the tax rates had been in postwar America, tax revenues had remained at around 20% of GDP. This remained the situation whether the top individual rate was 90% as in the 1950s or 30% in the late 1980s. The best way to raise tax revenues is to increase GDP, not simply to increase top tax rates since such an action simply reduces the GDP. If any of the New Labour grandees had ever held a job or had any experience of the workplace, they would realise that higher taxes reduce the incentives to work, produce, invest, and save, thereby dampening overall economic activity, and job creation. A large number rich are likely to choose to live off their capital until tax rates come down to a level they view as fair or move to another country where the tax rates are more welcoming. Capital migrates away from regimes in which it is treated harshly and toward regimes in which it is free to be invested profitably and safely. In this regard, the capital controlled by our richest citizens is especially tax intolerant.
I’ve often detailed on this blog the tough economic times that are ahead for many people –some are already there. Since I’ve defined the problem, it would be good to look at how it affects the basic group unit above the individual level and provide some possible strategies for weathering the storm ahead. Many authors have addressed basic survival of the family unit in the sense of stockpiling food and maintaining a secure home. Charles Hugh Smith took families to the next level in his book Survival+ in the sense of placing them in small communities with a common supportive philosophy.
In Operation SERF I used many families (one in particular) scattered across the USA and placed them in a fictional scenario of a long economic collapse followed by a civil war. The families ranged from the anonymous poor to the well-connected and powerful. This was based on my years of experience as both a health care provider serving America’s urban and rural areas for many years and as a former soldier who served in Iraq. Through this experience I had the chance to see the effects of different things that can happen in life at both the individual and family levels and how larger factors far beyond the control of those families can affect their larger communities and a nation as a whole.
With all those things in mind, I would like to begin posting some of my current thoughts on the topic of Family Survival in Tough Times beginning on Monday, Feb 22, 2010. I might do this for one day or an entire week –it just depends where the topic takes me. Please stay tuned for more. Thank you.
In case you’re not getting enough laughs on a daily basis… enjoy!
BBC Cartoon video about Drugs
And now seriously folks, the Eurasian Harm Reduction Network has produced On the Road to Activism, an excellent 76 page report on drug user activism (with a special focus on Eastern European countries). Download your copy here – it’s worth it just for the fantastic photos of junky graffiti.
And on an equally serious note, check out The Budgetary Implications of Drug Prohibition (2008) by Harvard University Department of Economics Professor Jeffrey Miron. Although focused on U.S. stats regarding the wastefulness of prohibition, it addresses the potential for Tax Revenue from Drug Legalization which is the sort of exploration that is critical when arguing for realistic alternatives to the dismal status quo.
In yesterday’s Financial Times columnist Michael Skapinker wrote an interesting piece — Business has not yet found its Copernicus — in which he discusses the impact that Thomas Kuhn’s famous work on the philosophy of science, The Structure of Scientific Revolutions, had on his own intellectual development.
Skapinker makes the interesting point that while Kuhnian paradigm shifts might not apply to areas outside science, in the socio-political realm economics has come the closest to establishing itself as a science. (Not only is economics a science, after a fashion, but like the “hard” sciences such as particle physics it is a mathematical science, on which cf. E. Roy Weintraubs’ How Economics Became a Mathematical Science.)
Skapinker suggests that the recent financial crisis might have been the opportunity for a paradigm shift in economics, except that no other paradigm was available to take the place of the “normal science” represented by contemporary economics. I agree with this, and Skapinker’s observations suggest a couple of points about revolutions, scientific and otherwise:
1. The exact mechanism of theory change within a Kuhnian model has been the occasion of much debate. We have all heard that nothing can stop the progress of an idea whose time has come. The converse of this is that nothing can advance the prospects of an idea whose time has not yet arrived. A paradigm, whether scientific or social, might suffer repeated crises and remain an accepted paradigm because no alternative has emerged that can serve the same function. History provides many examples of this — e.g., revolutions during the Middle Ages, when no political paradigm other than aristocratic feudalism existed. Thus: a crisis, in and of itself, and no matter how severe, is a necessary but not a sufficient condition for a paradigm shift.
2. We should view scientific revolutions, including revolutions in the “soft” sciences like sociology and psychology, as a matter of degree. No revolution is total. Not all epistemic paradigms come crashing down in a single catastrophic collapse. Anomalies can emerge within one portion of a theoretical paradigm, and even mount to the point of forcing changes, while other portions of the same paradigm can remain untouched. Perhaps the Kuhnian model applies most clearly and directly to scientific revolutions, but still applies, perhaps a little hazily, outside science, to revolutions generally.
I‘ll look forward to more asides on the philosophy of science in the pages of the Financial Times, and when the economic paradigm shift does emerge from some future crisis, I suspect the FT will be there to tell the story.
From the moment Brown stood up to give his infamous Robert Maxwell Memorial Budget in 1997, most people with experience in finance feared that the New Labour experiment could end in tears. His stealth tax on pension funds was the first marker on the road to disaster. He then sold off our gold reserves having first told the world and creating a final bottom to a decade of stagnation. His system of financial regulation dividing powers between the Treasury, the Bank of England and the FSA was absolutely loony. Eddie George knew this, threatened to resign, and unforgivably did not carry through on his threat. His next cunning plan was tax credits which predictably proved to be a complete disaster zone. Then there was his infamous corporation tax threshold, introduced the teeth of all expert advice, which encouraged every Jack the Lad to engage in outrageous tax avoidance. Underscoring his reputation as a fantasist, he claimed to have ended boom and bust while steering the property market to a spectacular bust. His abolition of the 10p tax rate hilariously left 2 million low paid workers paying an effective tax rate of up to 70%. Finally his public-sector net borrowing hit £28 billion last month, the highest on record, marking him out as the worst ever Chancellor of the Exchequer.
John Mauldin at Seeking Alpha has an excellent piece up on the Greek financial crisis entitled “Sovereign Default: stuck between dire and disastrous”. Today, the Greek Finance Minister, George Papaconstantinou, set the crash in motion by refusing to agree to fiscal cuts necessary to move any agreement with other EU countries forward just prior to this week’s meeting with other European finance ministers. he also compared their economy to the Titanic. Not the best of analogies.
Already in Greece, public sector unions have been protesting nonstop and the situation is threatening to careen out of control. There is no will at any level in the country to reign in the excesses and corruption which have gotten them into the current mess. So far, the government has only offered fig leaves, trying to delay a plan into March or April. One way or the other, it is likely the current government will fall as the situation degrades. The choices, as Mauldin points out, are dire or disastrous.
But it gets worse. The Greek government knowingly and aggressively went to Wall Street with a cooked set of books to borrow even more. Working with Goldman Sachs and other firms, they then issued derivatives that were kept off the books by the government . The full extent of the mess is still not known. So far they are up to somewhere north of 250 Billion Euros in debt with an immediate need to refinance 64 Billion this year. What they are doing is rolling over the interest on the debt. Greece, to put it bluntly, is using payday loans to keep disaster from the door while they cover their ears and eyes to try and ignore the problem. Bernie Madoff ’s got nothing on this scam.
In addition to this, Dubai World has floated a tentative offer to pay back their debt ($50 Billion+) at 60 cents on the dollar, sticking their investors for up to $20 Billion. The Chinese government is also rumored to be considering allowing the RMB Yuan to float more freely in order to brake the economic bubble in that country. This would increase costs of Chinese goods in export markets which, coupled with inflationary pressures to devalue currencies such as the Euro might set off a stagflation.
The fireworks will begin this week as hedge funds and traders digest the news and act. While many Asian investors are celebrating the Year of the Tiger, money never sleeps. Right now, it’s like Wile E. Coyote trying to tiptoe away from the box of Acme explosives tied to his tail.
It would appear that we have reached the limits of what it is possible to achieve with computer technology, although one should be careful with such statements, as they tend to sound pretty silly in five years.
-John von Neumann, 1949
- Don Peck sees a grim future for the American economy. Persistent joblessness and relatively high employment will most likely continue to reign for at least the next decade. And the current generation of recent graduates? Yeah, we’re pretty much screwed. Get ready for depression, heavy drinking, and lifetime of mental scarring (via Sullivan).
- Are you an eccentric billionaire? If so, maybe you too can buy a former closed Soviet city in Latvia. And how much might this set you back? Only $3.1 million. Man, has the housing bubble burst (via Disinformation).
- The New York Times has a must-read piece about the battle between Christianity and secularism on the Texas School Board. It’s argued that “we’re a Christian nation,” etcetera etcetera. Religious lunatics are everywhere these days.
- Israel’s legitimacy is under attack everywhere (especially Britain). But even for those who support and defend Israel, and don’t question its right to exist, arguing on its behalf can be troublesome:
Anti-Semites will never be appeased and are not worth engaging on Israel. But to those people who simply care about basic human values, how do you answer “Why does Israel keep expanding its settlements into areas it knows it would have to evacuate in any peace deal?” How can any reasonable person see “Sudan has killed hundreds of thousands of people” or accusations of anti-Semitism against any critic of Israel as anything more than a feeble deflection. It is true that no matter what Israel does, some people will vilify it. Israel should not make movements towards peace to mollify them or anyone. It should do so because it is both the moral thing to do and a strategic necessity for Israel’s long-term survival.
- Change blindness: the more you see it, the more you don’t (via Isegoria).
- David Aaronovitch (new book just released) talks about the appeal of conspiracy theories, even for smart people. And don’t forget the one about IDF theft of organs in Haiti. At least Jenny Tonge got sacked.
- Tonge forgot that blood libel has a long and storied history. That general historical ignorance may soon be on the rise, as Britain’s historians – last of the outward-looking – face an inward, parochial turn.
…and we in the good ole USA don’t, encountering stories like the one about artist Tom Fowler that Cary Tennis tells in Salon make us regret the corrupt political/commercial alliances that have given us our current situation.
A clip:
Tom had died. He had gotten a toothache. He had gotten a toothache but had not gone to the dentist because he didn’t have health insurance to pay for the dentist. He lived with it. Then he got sick but thought he was OK. Then he collapsed and the emergency medical people came and they told him he should go right into the hospital. But after reviving he said he’d be OK and he went home and made himself some soup. He lasted a couple of more days like that. Then he got really, really sick and they put him in the hospital but by that point the infection that had begun in a tooth had spread massively throughout his body and despite the doctors’ best efforts Tom could not be saved.
He died because he didn’t go to the dentist and didn’t go to the doctor because he was trying to be an artist and didn’t have health insurance and didn’t think it would kill him.
The stupidity of our system is so obvious, yet we are unable to move in the direction that would cure our ills and save our society. We are herded into our corrals by Big Pharma and Monster Insurance Companies and other Corporate Entities which are, by the grace of the Supreme Court, participating citizens in our government… and by politicians whose major goals are 1.) get reelected, 2.) bow to your big donors, and 3.) pretend that you will fix things…soon. Decades go by and the attempts by the few naive and well intentioned amateurs to bring us up to the Rest Of The World Standard in Health Care that appear from time to time get chewed up and spit out and (as Republicans say) we’d better slow down… we’re moving to fast. What’s the Rush?
It has given us a season of distrust. We elected a man on the assumption that things would change. We gave a Congress the majority it needed to make that change. We heard promises and patter designed to keep us believing that something would happen. But, in the long run, all we have been is screwed.
And my wife asks me if I didn’t wish we lived in Canada.
End the Fed
By: Ron Paul
Index
Quotes
Chapter Ten: Why End the Fed?
The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty. Its destructive nature makes it a tool of tyrannical government.. Page 141Money does not equal wealth, gold alone is not wealth. Page 147
One must wonder what our Federal Reserve notes will be worth when discovered in some hideaway a hundred, fifty, or even a year from now. Page 144
The Fed needs to be abolished because it is all bad and no good. For thousands of years gold has been used as a money supply. It’s used because it is rare, easy to work with and desired. Nations, such as the Byzantine empire, successfully used gold for hundreds of years. The Byzantine empire was a mighty and powerful empire, right until it diluted the gold in its coins to fund a war with Turks, their demise was a financial tragedy.The Federal Reserve exists only to dillute the money supply so that a tyrannical government can fund wars and projects it otherwise couldn’t. Our trade imbalance exists because of the Federal Reserve. The illusory wealth created by inflation and low interest rates created a housing boom, providing the appearance of false wealth that fooled the Fed. The cause of the current economic slump is the Federal Reserve’s poor monetary policy. A free people need a money that has value.
More Information
Review / Critique
Ron Paul
B-Note | Posts | Wiki
Democrats
B-Note| Posts | Wiki
Republicans
B-Note| Posts | Wiki
Damn! The opening paragraph was bad ass! (Well, as bad ass as a conversation about monetary policy can ever really be…) I quoted the whole thing up there, page 141. Damn! Smack that! The whole book right there in one paragraph. Ron Paul just grabbed that chicken by the neck and shook the hell out of it! Thems are fighting words!Kidding aside, it was a very good chapter. The book’s revving up towards the end and he’s making his sales pitch. It covers a lot of ground, and covers most of it pretty well. Plus the little bit of history on the Byzantine history was cool (can get a woot from everyone in the crowd who loves reading about the Byzantine empire?)
Quotes
Chapter Eleven: The Philosophical Case
The entire operation of the Fed is based on an immoral principle. Page 150Big government breeds corruption. If government has nothing to sell, bribery is useless. Page 152
To put it simply, the system is morally corrupt. Page 153
The tragedy is only recognized when the fraud of an immoral unsustainable monetary inflation comes to an end. Page 154
Very simply, there can‘t be a more immoral system of money than one based on a banking monopoly that can counterfeit money in secret with no oversight… Page 156
The entire purpose of the Fed, inflating money and devaluing our money and debt is immoral and theft. It is immoral to devalue your money supply. It is immoral to transfer wealth through inflation. Providing the power to fund programs the government otherwise couldn’t afford breeds corruption. The power of congressman to borrow and spend allows for legal bribes called donations.The moral weakness is shared by all. The people allow the immorality to continue because they expect the government to everything, and not to tax them. Congressman benefit by sending home the pork to their constituents. Businesses embrace the immorality as a way to privatize their profits and socialize their losses. Some embrace the immoral Fed in a distorted attempt to achieve fairness and equality.
Meanwhile, those who fight back against this immorality are labeled ideologues, as if the immoral act of pragmatically stealing money right out of people’s hands is morally superior. Then, afterwards, when the immoral actions returns home bringing economic turmoil, it’s the free market that is blamed, and more immoral laws are considered to more properly take away freedoms and more fairly distribute wealth. The moral argument should be enough to do away with the Fed.
More Information
Review / Critique
The Fed (wiki)Criticism of The Fed (wiki)
Ron Paul Forums
End the Fed (Facebook group)
The Greater Good (post)
Are inalienable Rights really So? (post)
Well, this is by far the best chapter so far. This is his emotionally, moral and philosophical argument. This is ethics. This is his heart and soul, and it damned impressive reading. I didn’t even know what to quote. Every line was quotable. Every paragraph. The book is worth it for this chapter alone.I found the chapter extremely compelling, well thought and blunt. His argument was equally compelling and very convincing. It is an impassioned plea meant to strike at the core beliefs in all of us that stealing is wrong.
To the left I included two links to posts I wrote that deal with completely different topics, but relate heavily to morality in making decisions. I think they’re fairly relevent.
Quotes
Chapter Twelve: The Constitutional Case
The gross distortion and undermining of the Constitution by McCulloch v. Maryland has done great harm throughout our history and explains how we‘ve ended up with the size of government we have today. Page 167-168Noble reasons are always used to justify the inflation, but the real reasons are far more sinister. Page 171
I believe the conditions are more conductive today for achieving some real success in getting an audit than at any time since the establishment of the Federal Reserve System. Page 178
Article I section 10 states clearly and simply that states can only use gold or silver as legal tender. Article I section 8 explains all the things the congress can do. Paper money is not listed, nor is a central bank. The Tenth Amendment then says that Congress can’t do anything other than what they’ve been told to do. Right there, as simply as possible, is the constitutional argument for why fiat money and a central bank are unconstitutional.The beginning of the growth of the federal government was McCulloch v. Maryland, in which case the Supreme Court ruled that the Congress could pass any law they wanted, regardless of the Constitution specifically prohibiting such an interpretation. This decision led directly to the first national banks and then to the Federal Reserve. This fight, between federalist and anti-federalists, Jefferson and Hamilton, was won by Hamilton and the Federal government has grown ever since.
The power of the Fed is only dwarfed by its secrecy. At first, the secrecy was a result of no law specifically forcing them to report to Congress. When a law was passed, it was watered down to a point that their reports have no value. I, and many others, have been trying to audit the fed for years. The powers that the Fed possess are comparable to that of Congress and the White House, if not superior. Congress has a constitutional requirement of oversight, oversight we do not exorcise due to legal restraints we’ve placed on ourselves. I hope that after a full audit reveals all the mischief performed by the Fed, people will reevaluate its value.
More Information
Review / Critique
US ConstitutionArticle I Section 10
(Only Gold or Silver can be used as gold)
Article I Section 8
(Things Congress can do)
The 10th Amendment
(Can’t do anything else)
Freedom to Listen (post)
Free Speech Abridged. (post)
Impeach Chief Justice Roberts. (post)
This was a much drier chapter than the previous one. It’s very well put, but the subject is of law and history and the constitution which just tends towards dryness. Still, he presents the material well and argues his case pretty good.The simple fact is, America has never really followed the constitution in its entirety. The 10th Amendment is uniformly ignored. The Commerce Clause is abused and the coinage issue is ignored. But we also ignore the fact we can’t technically have an Air Force. To the left I put some links to posts I’ve done on the first Amendment and Freedom of Speech. It’s not directly related to the Fed, but it does focus on how the Courts have interpreted the First Amendment.
One of the biggest problems for those of us who understand the need to pursue sustainability is to know what to do. There is far too little information available about how to conserve energy, minimize one’s carbon footprint, and make a positive move towards living sustainably. Just when you think using paper bags is more ecologically responsible than plastic bags, someone figures out that the energy required to make the paper created more pollution than the processes that produced the plastic bag. Then, some time later, someone else tells you that the paper comes from renewable trees while the plastic is made from non-renewable oil, and paper is therefore more responsible. There are so many pieces of conflicting information flying around in the media that it is daunting, and a lot of people give up trying. Perhaps I can throw a very tiny bit of light on this topic with a simple idea, the common electrical outlet strip, backed by some simple calculations.
When population is great, small, widely-observed practices can make a big difference. The media has long told us that wall chargers use power whenever plugged in, and not just when the device they power is turned on or charging. Such devices have even been nicknamed “vampires” because they “suck” small amounts of power when not in use, taking a “bite” out of your electrical budget and necessitating more highly-polluting power plants. If you touch a wall charger or power supply when it is not powering anything it will feel warm; a sure sign of wasted energy. While it may only take a few watts to warm the case, consider how many of chargers are drawing power in your house. Then consider the energy required to power the devices of more than 300 million Americans, and you start to get a sense of the scale of this problem. At a conservative 2 watts each, the wall chargers of Americans use the energy output of a medium-sized coal-fired power plant, more than 250 megawatts.
Electricity “vampires” are everywhere. Devices such as TVs and stereos, and most devices that have remotes or any features called “instant on”, also draw power continuously and have a power switch that is really a standby switch. Some may have a main power switch hidden somewhere, but what looks like a power switch is quite often only a standby switch. While today many wall and table clocks are battery powered, any appliance with a clock has to power the clock circuitry or mechanism and probably draws electrical power to do so. Anything with a remote has to keep a receiver powered on in order for the remote to work. Some devices require large power supplies that draw proportionally more power than a cell phone charger. Basically, anything that feels warm when it is turned off is probably drawing power continuously.
Some devices have to be vampires. Before you start unplugging everything, think on this: a great many electrical devices we use today (2010) were designed to stay partially on (on standby) all the time, and turning them off may impair their effectiveness or create inconvenience for you. Hopefully that will change as the need to save power becomes more prominent, but for now it may be necessary to let some vampires suck power. Is a furnace or refrigerator a vampire since its controls require continuous power?
A curious case in which data bandwidth is a factor. My cable TV tuner is always hot to the touch and has a lot of vents in the top – sure signs of a “power hog”. If I unplug the tuner when I’m not watching TV, when I turn it on again it won’t be able to display programming information until it reloads that data from the cable TV network, and the listings gradually appear over a period of 45 minutes or so. Apparently the data bandwidth in the cable TV network is too small to load the programming information very quickly. Perhaps someday that will be improved, but for now it discourages me from disconnecting the power to the cable box, even though it wastes a lot of energy.
The simple solution: a switchable outlet strip. Devices that don’t need to be on all the time can be plugged into a control of some sort, the cheapest of which is probably a multiple-outlet power strip with a switch. If you plug your cellphone chargers and similar electrical devices into a switchable outlet strip it is easy to control them and be sure when they are on and when they are truly off. While a decent outlet strip can be had for $5 or less, it is possible to spend considerably more. Whether the extra cost is worthwhile is questionable.
The payback period for an outlet strip can be fairly short. I have an outlet strip next to my bedside into which I plug the chargers for two cellphones, my laptop computer, and my CPAP machine (used to treat my sleep apnea). If each of the cellphone chargers draws 2 Watts when not in use and the other two devices draw 4 watts each, all I have to do is turn off the outlet strip when I leave in the morning and turn it on when I come home, and I am saving 12 watts continuously for 12 hours per day. In that fashion I save 12 x 12 or 144 watt hours per day. Since I pay an average of 13.7 cents for each kilowatt hour, I am saving (144/1000)*.137 dollars per day, or $0.005328 per day. Since an inexpensive outlet strip can be found for perhaps $5, if you remember to turn it off most of the time, perhaps 250 days per year, you will save $1.33 per year, and the outlet strip will pay for itself in 3.75 years, which is not bad for a device that can last decades. That payback period will be shorter if rates go higher, too.
There is power in numbers. You also save the power company having to generate 12 watts for most of each day, and if 10 million people do that in the United States, it can save a lot more. Due to inefficiencies in the power grid and the need to handle peak demand, generation capacity must be maintained at a level that is around ten times the actual power demanded. That means that 12 watts of electricity demand must be supplied by a capacity of 120 watts. The same 10 million people, by putting their chargers on an outlet strip and turning it off when not in use, avoid the need for 1,200 megawatts, which is the capacity of a large nuclear power plant or up to five coal or gas-fired power plants. Personally, I have no problem investing $5 to avoid the need for another giant power plant with all it will cost to build and all the pollution it will produce.
Surge protection, an outlet strip extra, is not worth the expense in many cases. One of the most popular extras among outlet strips is surge protection. I have had many outlet strips that advertised “surge protection”, and have even paid extra for strips that had the added capability. I have also installed surge and transient protection in an outlet strip, adding appropriate capacitors and metal oxide varistors (MOVs) inside the outlet strip. More recently, however, I have read how relatively cheap MOV’s can explode or burst into flames when hit by a major power surge, such as when lightning strikes nearby. For this reason I rarely use a surge protection-type outlet strip unless there is no other protection and I am using a power source with a higher than normal risk of surges and spikes, such as that from my portable generator or in an area where power is often interrupted. Since I own my own home, I had an electrician install a proper commercial surge protection unit in the circuit breaker panel (cost is usually under $500 for the surge protector and labor combined). With this protection in place I don’t worry about damage from surges and spikes, nor do I ever need surge protection in my outlet strips.
The path to a sustainable civilization will be built on many small changes such as using outlet strips to conserve electricity. As you can see, if only 10 million individuals in the United States used an outlet strip to stop electricity being wasted by “vampire” devices, it could avoid the need for an entire nuclear power plant costing perhaps a billion dollars. In the future more of our electrical devices will be built to be more efficient, and those that require standby power will make more efficient use of it, but today there are many power-sucking devices in our homes that are just wasting energy. Every bit of energy we can save today moves us closer to sustainability and buys more time to get our population growth and pollution under control, and an outlet strip can be a sound investment in the future with a very reasonable payback period.
As always, I welcome your comments. Thanks for reading this. – Tim
The Irish government has set up a truly independent body to recommend how shrinking public resources can best be deployed to maintain key priorities. Last July it Ireland’s proposed a 5.3 billion euro package of cuts, a 5% reduction in social welfare programmes and the loss of 17,300 public sector jobs. Scotland could also do with a truly independent review of public expenditure. Of course, unlike Ireland, Scotland was fortunate the UK government was able to take responsibility for its banking collapse. As Ireland painfully discovered, being a sovereign and independent nation is great fun up to a point, but if your bankers make a complete horlicks of their operations it is nice to have nurse on hand to clean up. Ireland is awash with books agonizing over its experience of the crash, led by the redoubtable Fintan O’Toole’s ‘Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger’. Others have chronicled how bankers, builders and property developers and their cosy links with the political elite in Dublin helped bring that the country to its knees. Such national soul-searching is yet to be seen in Scotland even though our First Minister was cheerleader-in-chief as his old employer, the Royal Bank, as it set out on its disastrous bid to conquer global markets. Had Scotland been an independent country by the millennium, the SNP have done nothing to curb the expansionist ambitions of Scotland’s two leading banks. Had Scotland been independent when they finally tottered towards insolvency in late 2008 and had to be rescued, an SNP government in Edinburgh would have been presented with a similar bail-out bill as Dublin and Reykjavik. Of course, as taxpayers and UK citizens, we Scots are sharing with our English, Welsh and Northern Irish neighbours, the costs of bailing out our banks and the consequences of the deep recession that followed. We will be paying that price in higher taxes, lost jobs and constrained public services for years to come. And we should also confront, as the Irish are doing, our own collective role in this disaster.
California, struggling with budget deficits, growing debt, and possible bankruptcy, has been seriously considering legalizing their $14 billion per year cash crop, marijuana.
A bill in the state’s Assembly would impose a $50 per ounce fee on legal sales, bringing in “nearly $1 billion a year” depending on which expert’s opinion gets quoted in which newspaper.
In Colorado, candy and soft drinks are legal but they’re exempt from the state sales tax.
The Centennial State, having already closed a $2.1 billion budget gap, faces a billion dollar shortfall in next year’s budget. The state’s politicians see a 2.9-percent “Twinkie Tax” on sweets as a way to sweeten the public pot. A bill to do just that passed the House Monday and, if approved by the Senate, is expected to raise “3.58 million this year and $17.9 in 2011.
In January, New York Governor David Paterson, staring a $7.4 billion deficit in the face, went looking for $1 billion in new taxes and fees even after carving out nearly $800 million from New York City and slashing other taxes.
A $1 tax hike is proposed for that old favorite of politicians everywhere, cigarettes, which will raise a pack to $3.75. Other proposals include a 1-cent per ounce soda tax, legalizing and taxing cage fighting, collecting more revenue from wine by allowing sales in grocery stores, and introducing 50 new speed cameras to catch and fine motorists as much as $100 (thereby belying the claim that speed cameras are justified purely as a “safety” concern.)
Commentary…
So what will happen if California and Colorado and New York and every other state with fiscal afflictions get the increases they want? History tells us that in a year or so they will each spend 150% of their new taxes, face yet another fiscal emergency, and go looking for more things to tax.
They could tax everything in the country with a pulse and never have enough money.
(Or, as libertarian columnist, editor, and author Vin Suprynowicz recently put it, “If you pay taxes, you’re ‘rich,’ so you should expect more taxes.”)
Anyone who believes that politicians and taxes can ever solve any problem anywhere is in greater need of rehab than the tax-addicted politicians or the alcoholics they mimic.
I wasn’t going to read this, but a friend saw it on my LibraryThing profile, and asked to borrow it. She promptly returned it, and informed me that it was actually a good read. So I had it sitting next to me at work for a few weeks, and every couple of days, while waiting for Stata to do its thing, I read a few pages.
The book is about a hundred columns from the London Financial Times Dear Economist agony aunt column. Overall, some entertaining material – but by the end I was sick of the repetitive formulaic responses… One column in particular caught my eye:
Dear Undercover Economist
I am often offered the chance to have an unauthorised copy of a current film downloaded from the web. As family circumstances presently preclude cinema trips, these offers peresent my only chance to see some films promptly.
I do not believe in enjoying the fruits of other people’s labours for free. So is there any way in which I can make financial reparation for watching an unauthorised copy?
I live very close to a cinema so one option is to buy a ticket for a screening even though I won’t actually be there. Or I could buy a copy of the DVD when it comes out, even though I don’t really want to own it.
If I cannot put this right in economic terms, my conscience tells me not to watch!
– Yvonne, London
And Tim Harford’s response:
Dear Yvonne,
You should certianly watch since there is a positive benefit to you and zero marginal cost to the studio. Yet I believe you’re right to feel uneasy about free-riding on someone else’s time and talent. It is not only unfair but contributes to the wrong incentives for future filmmaking; in fact one suspects that the reason so many Hollywood blockbusters are childish is that the studios know adults don’t have time to go to the cinema any more.
But your proposal to buy cinema tickets or DVDs doesn’t seem right either. It sends a misleading signal that cinemas and DVDs are what you want. You might try alternating your patronage of cinemas and DVDs, while downloading pirated copies many more times than you actually need to. If the studios are paying attention they might start to realise what it is you really want.
All this assumes that your need for an immediate copy is genuine.
I would question that. Do you shoplift when you’re in a hurry?
I would question Tim’s answer on two fronts. First, his assertion that downloading ‘unauthorised’ copies of Hollywood movies “contributes to the wrong incentives for future filmmaking” is contradicted by his advice in the second paragraph (infact, even the advice in the second paragraph is wrong; alternating between cinemas and DVDs while downloading many unauthorised copies sends a confusing signal, if anything!).
Second, the suggestion that shoplifting if you’re in a hurry is the same as downloading a unauthorised copy because you don’t want to wait for the DVD implicitly assumes that watching a film on a DVD is the same as downloading a film – and obviously there are a number of differences. Not least to mention that, depending on where you live, it wouldn’t matter how long you wait – you could never download certain films.
Anyway, this book would be a good present for someone who likes faux novelty, formulaic comedy and one page chapters.
John Taylor, the Stanford University economics professor and former Undersecretary of Treasury for International Affairs, wrote what has become a landmark paper since 1993, the year former president Bill Clinton took office. It was called “Discretion versus policy rules in practice.” The essence of the subject of the paper was a technical discussion of how to fit the data of Federal Reserve policy over time to a curve: to a regression equation. The paper had done such an extraordinary job of tracking Fed policy and explaining it, that it became a benchmark to both expect Fed policy and to judge it in the subsequent years. It had become a rule by which monetary policy can be reasonably expected to be made by any central bank as if to say: you made it this way all along, so follow my rule and make it the same way in the future and the world will be alright.
Without getting into the mathematical details of the Taylor Rule, it would suffice to say that the variables in the equation are the interest rate that the Federal Reserve sets based on the current inflation, the interest rate the economy really experiences, the inflation the Fed likes and its deviation from the current inflation, the deviation of the current economic growth rate from the growth rate that is tolerable by the economy without raising prices for the same goods and services because businesses have to spend more to invest to meet the higher demand and because the ensuing higher demand for the inputs into production can raise their prices and eventually consumer prices if production technologies and processes are not more efficient. Many variants of the Taylor Rule have proliferated in the literature since 1993.
Before John Taylor, two well-known American economists, Irving Fisher and Milton Friedman, had more parsimoniously dealt with the same problem. Fisher had lived and done most of his work before the Great Depression and during the period of industrial ferment in America in the late 19th and the first half of the 20th centuries. He was among the earliest economists of the American Economic Association (AEA) after it was founded in 1885. And he had given considerable thought to interest rates and prices and formulated his findings in a simple mathematical relationship that bears his name to quantitatively describe the relationship between the interest rate everybody knows (nominal interest rate), inflation (the deterioration of the purchasing power of money) and the interest rate they actually experience because of inflation (real interest rate).
The Fisher equation simply says that if you subtract inflation from the nominal interest rate, you get the real interest rate. Meaning, because some depreciation of the value of money is always the case and is unavoidable because of scarcity, people really do not pay as much in interest as they think they do. More simply put, the higher the inflation, the cheaper are the loans that people take out. When prices do not change and inflation is zero, they pay in interest really as much they think they are paying. When prices fall, as was the case during the Great Depression that came close to Fisher’s death, inflation is negative and therefore adds to the interest rate people are quoted, making their loans more expensive. The Fisher equation, as is, is the first part of the Taylor Rule.
Milton Friedman, the founding modern monetary economist, had later respecified the Quantity Theory of Money (QTM), which has its roots in classical philosophy. QTM, like the Fisher equation, another simple mathematical relationship which equates the product of the quantity of money supplied and the rate at which that money changes hands and the product of the overall price level in an economy and the rate of growth of the economy, as it is computed being since World War II.
Beyond the academic interest surrounding that equation, its meaning is profound: it says that the amount of money supplied produces both inflation and economic growth. The challenge is to minimize inflation while increasing growth, because both more growth and less growth can cause inflation. More growth causes inflation because the prices of resources will rise with scarcity and less growth will cause it because without making more and diverse real things, the same things that are made by the economy will cost more causing inflation if money growth is not reduced when the economy is not innovating to produce more. And economics has no way to make an economy innovate, at least not as yet (Joseph Schumpeter provides a compelling explanation of the innovation dynamics in a free market economy under limited government, but does not provide a mechanism to modulate innovation).
Often, as Friedman himself did, the focus had always been on the relationship between money supply and its causation of inflation. He did not want, along the lines of classical thinking that goes back 2 centuries before the quantity theory was picked up by American economists, more money chasing the same goods causing money to become cheaper because the same goods cost more. Still, from Friedman’s restatement of QTM in 1956 to determine the optimal money supply, mathematically relates the change in the price level in the original quantity theory which is the macroeconomic definition of inflation to the quantity of money and national output or income.
But all of this is pure monetary theory even if the purpose of theoretically trying to determine optimum money supply is to make monetary policy. The classical philosophers and economists did not particularly care about modulating money supply to control the economy. They saw the relationship between money and economic growth as fairly linear with economic cycles being caused by other factors in a free society.
This view is surprisingly correct, on average. The growth of national output is indeed a linear, straight line sloping upward. Milton Friedman himself had subscribed to this view, but his attempt to determine the optimal money supply was more about trying to determine the fixed extent to which the monetary hose must be left open by the government, year after year for the economy to take care of itself, not to either shrink it or expand it based on the economic circumstances, meddling with it without understanding it, contributing to the causation of business cycles even if the intent is business cycle stabilization. If politics are factored in, to sympathize with the time consistency motivation behind John Taylor’s seminal paper, business cycle stabilization could fast turn into a cover for the political manipulation of the economy, even if the capacity to do so is inadequate.
That was indeed the world in which Irving Fisher had lived as the United States evolved from the railroads to the automobiles at a feverish pace over a period of about 75 years, with a few ups and downs until the Federal Reserve founded in 1913 tried to fine tune money supply after 1929 by reducing its supply, not once but twice in 1933 and 1936, to prevent more money chasing the same stocks, thinking that that could have caused the asset prices to appreciate. The economy would perhaps have been better off had it done nothing, opening the monetary spigot at a fixed rate of money growth and leaving the rest to the economy.
Still, the temptation to produce prosperity by raising money growth is justifiable if the money is used to produce more food, more machinery, more innovation and more support to both agriculture and the industry through the related services. This temptation is the addition made by John Taylor to the Fisher equation to come up with his rule. The threat of targeting the rate of change of prices, the Taylor Rule implicitly assumes, can make the economy produce more by using money more efficiently.
John Taylor hopes with his equation to raise the utility of money through the stick of an inflation target. The tighter the target, the more pressure on the producers to use the money they have been supplied more efficiently to raise the economy’s speed limit. However, he does not say if the economy can indeed do so because economics has no mechanism to ensure that that can happen to the best of the ability of the various economic actors and in good faith. After all, they could seek short term profits and increase inflation to the Fed’s target level and keep doing so until the circumstances force them to work hard, with each cycle of the rise and fall of the Fed’s interest rate depressing the rate of growth of the national output over time until that can no longer be possible without causing economic decline. This behavior is verifiable in economic data since Paul Volcker began targeting inflation in 1979: the U.S economy doubled under Reagan and Bush, grew by about 75 per cent under Clinton and around 30 per cent under Bush and is in stagnation thus far under Obama, if the trend of growth rate is measured in decade-long intervals since 1979, albeit the intermediate short-term fluctuations both up and down.
Taylor’s addition to the Fisher equation will be zeroed out when inflation and output are at target, leaving behind the Fisher equation. Because inflation target is the central bank’s choice, the economy will end up determining its speed limit and John Taylor did not contribute anything new to economic knowledge, either in theory or in practice, beyond what has already existed for about 75 years.
The Taylor Rule may track Fed policy well with either an implicit inflation target (which the Fed has) or an explicit inflation target (which the Fed does not yet have), but the rule itself does not help grow the economy until the old-fashioned money-for-real investment values return to the economic culture to see derivative financial assets such as stocks and bonds and all else as subordinate to real assets. The prices of financial assets and real earnings of the firms upon whose performance those assets are predicated must be in balance for an economy to be on a balanced growth path.
The only purpose of money supply by fiat is to grow the real economy as efficiently as it can while providing a quality life for the workers. Targeting inflation alone will not do that job.
Between work and writing Book 2 of Operation SERF this weekend, I will not have any free time left for a lengthy political socioeconomic analysis today. If you’re a regular reader of this blog, I would encourage you to purchase a copy of Operation SERF Book 1 since it contains a synthesis of many viewpoints which I have placed within a hypothetical relatively near-future scenario.
My apologies again for forgoing the usual high protein juicy meat post on this blog today as I leave you with this dried out beef jerky link to a character from Greek mythology named Sisyphus. Although the name sounds wimpy, the story is actually quite good. If you chew on it for a while, you’ll get a taste for how it may be applied to empires, politics, and economics.
End the Fed
By: Ron Paul
Index
Quotes
Chapter Seven: Conversations with Bernanke
We have a savings rate which is negative. If we had true capitalism, this would be very, very serious we’d have no savings and no capital to invest…We can create credit and money out of thin air and it acts as capital by stealing value from the existing currency. Page 101
They don’t say inflate the currency, they don’t say debase the currency, they don’t say devalue the currency, they don’t say cheat the people. They say lower the interest rates. . Page 104
[Politicians] first create the problems and then they are delighted with all the activity in expanding government and solving the very problem they created. Page 110
In his role as House Member, Ron Paul questioned Ben Bernanke several times. He used these occasions to challenge Mr. Bernanke on the concepts of sound monetary policy. He challenged Bernanke on the idea that growth is the cause of inflation, that inflation is good, that inflation is confiscation, on the decrease in real wages, the wisdom of a weak dollar and the idea of moving away from the fiat dollar. Bernanke’s answers are decent, but also evasive.
Bernanke’s ascertains that the economy is sound only months before the financial collapse shows the failings at the Fed. The problem if an expanding money supply is ignored when the country is in good times, and the solution to bad times is to continue expanding the money supply. The only way to avoid this cycle of boom and bust is to take the power to create money out of thin air away from the government.
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B-Note | Posts | Wiki
Democrats
B-Note| Posts | Wiki
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This was a good chapter, but a bit of a copy of previous chapters. Essentially, Ron Paul is making the same argument he made in the first several chapters to Ben Bernanke and writing down the answers. So it was a good chapter, and I suppose it has value in the sense that we know that Bernanke was told these things and dismissed them.
Frankly, Bernanke doesn’t come across as bad as perhaps Ron Paul had intended. His answers are pretty good really, except that they disagree with Ron Paul of course. As Bernanke pointed out, the reason the Fed was created was because of the financial panics in 1903 and 1914, which are excellent points.
As I read his book I find myself agreeing with a lot of his points, but keep coming back to a key question, do we really want the money supplied left completely on its own? The Federal insurance on deposits has worked wonderfully to protect people from bank runs and panics. Does Ron Paul make a good case that the Fed has too much power and interferes too much? Yeah. But Bernanke hit the point on the head, the cycle of boom and bust existed before the Fed.
Quotes
Chapter Eight: Congress’s Interest in Monetary Policy
“…in all seriousness, a member asked me in private whether the dollar was “backed” by gold, having up until then assumed that it was.” Page 114
“This ignorance is what allows conservative and librals alike to spend, borrow, tax, and inflate to finance their various programs, both foreign and domestic.” Page 115
“Authoritarianism, supporting statism on moral grounds for whatever reason, is the real threat.” Page 121
Congress’s Interest in monetary policy can be explained as non-existent. Congress doesn’t know what the Fed does, how it does or why it does it. Without a proper understanding of the Fed or Monetary policy, Congress can’t perform proper oversight. What the Fed does, is provide enough money for the politicians to have both their guns and butter. There is no need for fiscal constraint when you can print money,
The Fed has also been used for undue political benefit. The interest rates tend to drop before elections and nominations, where as economic slumps between elections are fought less fiercely. Allowing an institution to play with our nation’s money supply for base political motives hurts all of us.
Some accuse Congress and the Fed of constituting a conspiracy to control the money, that assigns more intent than is really there. There isn’t any secret conspiracy working to hurt the economy for imagined political gains. Rather, the system is broken and flawed, and Congress is an incapable bastion of oversight. Even if Congressmen understood monetary policy, the system is inherently flawed in that it attempts to control the free market, something more powerful than any of us.
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Ron Paul Forums
Why the Flat Tax would be better (post. Slightly off topic, but it’s about how congress uses taxes for political gain and how that is bad for America.)
Congress’s Interest in monetary policy can be explained as non-existent. Congress doesn’t know what the Fed does, how it does or why it does it. Without a proper understanding of the Fed or Monetary policy, Congress can’t perform proper oversight. What the Fed does, is provide enough money for the politicians to have both their guns and butter. There is no need for fiscal constraint when you can print money,
The Fed has also been used for undue political benefit. The interest rates tend to drop before elections and nominations, where as economic slumps between elections are fought less fiercely. Allowing an institution to play with our nation’s money supply for base political motives hurts all of us.
Some accuse Congress and the Fed of constituting a conspiracy to control the money, that assigns more intent than is really there. There isn’t any secret conspiracy working to hurt the economy for imagined political gains. Rather, the system is broken and flawed, and Congress is an incapable bastion of oversight. Even if Congressmen understood monetary policy, the system is inherently flawed in that it attempts to control the free market, something more powerful than any of us.
Quotes
Chapter Nine: The Current Mess
“Artificially low interest rates are achieved by inflating the money supply, and they penalize the thrifty and cheat those who save.” – Page 133
“With the collapse of the imbalances created by the dream of easy wealth, the poor, deceived into believing politicians could deliver the moon, are now unemployed and without a home.” Page 137
“[The stimulus] will only stimulate sectors of the economy that are failing. This is like trying to rid the world of gravity by throwing things up in the air. It addresses the symptoms, not causes.” Page 139
The seeds of the current mess were laid by Greenspan after 9/11. There was a national desire not to let the terrorists win by hurting out economy. He dropped the interest rate from 6.5% down to 1% and held it there for a full year. This delivered the desired result, it gave the appearance of a strong economy. It created wealth, but that wealth was, in the words of Barack Obama, illusory. When the interest rates returned to 5.5%, the bubble popped and the housing and financial markets collapsed.
A slew of governments agencies and departments are involved in intervening in the natural workings of the free market. These agencies though are the cause of the problem are not the cure. They work together to take risk out of the system. Any system that allows for profit without risk through creates a moral hazard, a risk that is born by ‘someone else‘. That leads to risky economic decisions that leads to eventual economic disaster.
After intervening in the housing market with a 1% interest rate, and experiencing the result, we are now intervening in propping up the financial markets and car industry, with the government now responsible for hiring and firing CEO’s. As bad a job as the government did picking winners in 2001, we’re likely to do equally bad picking winners with the stimulus bill. The only result will be more fake money creating more illusory wealth.
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Alan Greenspan (wiki)
Economy (Posts)
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48% of Houses underwater (Post)
Paul Krugman: Why markets can’t cure healthcare (Post)
More about the aftermath of 9/11 The Great Story Ever Sold (book)
This was perhaps the most relevant chapter so far. He’s beginning to bring all of his previous arguments together and demonstrating how previous actions lead to the current crisis, and how current actions are setting us up for the next one.
His explanation of how 9/11 shaped our money policy isn’t surprising, but it does put a new light on those decisions. He makes a point of not attaching any kind of partisan or untoward intentions. America had been hit hard, and those in power didn’t want to let the terrorists hurt us further by inflicting us with a bad recession, so they fought that recession as hard as they could. As Ron Paul says, Greenspan tried to shoot the terrorists in the head, instead he shot the economy in the foot. I think that story is perhaps the most important part of the book so far. We did this to ourselves. There were no ill intentions behind any of this, but out of a sense of fear that we’d look weak or suffer through a bad year, we fought to push off the inevitable and when we finally got the bill, the bill was the Great Recession. The current mess. Very good chapter.
End the Fed
By: Ron Paul
Index
Quotes
Chapter Ten: Why End the Fed?
The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty. Its destructive nature makes it a tool of tyrannical government.. Page 141Money does not equal wealth, gold alone is not wealth. Page 147
One must wonder what our Federal Reserve notes will be worth when discovered in some hideaway a hundred, fifty, or even a year from now. Page 144
The Fed needs to be abolished because it is all bad and no good. For thousands of years gold has been used as a money supply. It’s used because it is rare, easy to work with and desired. Nations, such as the Byzantine empire, successfully used gold for hundreds of years. The Byzantine empire was a mighty and powerful empire, right until it diluted the gold in its coins to fund a war with Turks, their demise was a financial tragedy.The Federal Reserve exists only to dillute the money supply so that a tyrannical government can fund wars and projects it otherwise couldn’t. Our trade imbalance exists because of the Federal Reserve. The illusory wealth created by inflation and low interest rates created a housing boom, providing the appearance of false wealth that fooled the Fed. The cause of the current economic slump is the Federal Reserve’s poor monetary policy. A free people need a money that has value.
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A bill in the state’s Assembly would impose a $50 per ounce fee on legal sales, bringing in “nearly $1 billion a year” depending on which expert’s opinion gets quoted in which newspaper.
In January, New York Governor David Paterson, staring a $7.4 billion deficit in the face, went looking for $1 billion in new taxes and fees even after carving out nearly $800 million from New York City and slashing other taxes.
I wasn’t going to read this, but a friend saw it on my LibraryThing profile, and asked to borrow it. She promptly returned it, and informed me that it was actually a good read. So I had it sitting next to me at work for a few weeks, and every couple of days, while waiting for Stata to do its thing, I read a few pages.