Articles from July 2009



The Government, The Economy, & Their Predictions

A mere 10 days ago, we were told by our President, that his recovery act has diverted a disaster (here):

Good evening.  Before I take your questions, I want to talk for a few minutes about the progress we’re making on health insurance reform and where it fits into our broader economic strategy.

Six months ago, I took office amid the worst recession in half a century.  We were losing an average of 700,000 jobs per month and our financial system was on the verge of collapse.

As a result of the action we took in those first weeks, we have been able to pull our economy back from the brink. We took steps to stabilize our financial institutions and our housing market. And we….

passed a Recovery Act that has already saved jobs and created new ones; delivered billions in tax relief to families and small businesses; and extended unemployment insurance and health insurance to those who have been laid off.

Of course, we still have a long way to go. And the Recovery Act will continue to save and create more jobs over the next two years – just like it was designed to do. I realize this is little comfort to those Americans who are currently out of work, and I’ll be honest with you – new hiring is always one of the last things to bounce back after a recession.

As I wrote previously, I’m not sure what a “saved” job is or how one goes about calculating a figure, but we do know the unemployment rate is 2% higher than predicted.  Additionally, when one is contemplating whether this or any other President is truthful, we should ask if any of their other projections were correct in the first place.

From Bloomberg:

July 31 (Bloomberg) — The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

& for comparison, something we also know.  When Senator Kerry, then Senator Obama, and many other people, liberals and independents all, were dismayed by President Bush’s tax cuts during a recession and a war:

The revisions showed that the 2001 recession was less severe than originally estimated, reflecting a smaller decline in business investment. The economy actually grew 0.1 percent from the fourth quarter of 2000 to the third quarter of 2001, erasing the 0.2 percent drop previously reported.

Of course Bush started us down our current road with the first stimulus bill, because something just had to be done… which I guess presupposes that allowing 300 million people to work to bring back the economy is “nothing”…

Either way – lastly, and most importantly, we know that this has been tried before.  It took several decades to move beyond the blindness people had due to FDR’s almost cult-like status to revise the books written at the time, but the New Deal did in fact lead to a longer Great Depression that was necessary (here):

The New Deal is widely perceived to have ended the Great Depression, and this has led many to support a “new” New Deal to address the current crisis. But the facts do not support the perception that FDR’s policies shortened the Depression, or that similar policies will pull our nation out of its current economic downturn.

The goal of the New Deal was to get Americans back to work. But the New Deal didn’t restore employment. In fact, there was even less work on average during the New Deal than before FDR took office. Total hours worked per adult, including government employees, were 18% below their 1929 level between 1930-32, but were 23% lower on average during the New Deal (1933-39). Private hours worked were even lower after FDR took office, averaging 27% below their 1929 level, compared to 18% lower between in 1930-32…

No worries though – I’m sure the government is telling the complete truth about how much health care will cost, what it will do to the current system (good & bad), and all the rest of it.  We just have to believe!

…Some other articles on this as well here @ Reason.com, article on economist research @ UCLA here, & detailed research paper here @ Cato.org.

Utopian Legislation

As I’ve noticed a seemingly increase in the number of bills being passed in the US system verging on or over 1000 pages, I started questioning whether this seems logical.

We know the tax code is so complex it now takes up 50K pages, which seems irrationally high & complex.

From a design or research point of view, the usual goal is to minimize everything to it’s simplest possible form without sacrificing the project itself.  As the saying goes, make it as simple as possible, but no more.

With that in mind, what if a law ere passed which tried to help prevent the overly complex legal system we currently have?  Allowing the average person to know if they are breaking a law and to be able to better participate in government decision making.

What if we tried to move the legal system where not one single CPA will agree with another CPA on the tax code, into a more simple system that the average person can be involved with?

I humbly propose this (though it’s not a fully formed idea):

First – all bills should use common language and structure so the average individual can understand.  If I have to make a flow chart diagram out of all the “if this, then that, else this” crap like they have in contracts these days, it gets dumped instantly. This is tough because defining common language isn’t easy.  So maybe this wouldn’t work.

Second though, as this can actually be measured, every bill has to be made available to the public for a length of time which allows the average person to be able to read and therefore opine on said bill. The numbers below are taken from several sources, though more research would be needed as I’m sure averages can be gathered about bills themselves.

Having said that, assuming an average person can red 200 words per minute, with about 30 minutes a night to read, and 1 hour over the weekend.  So they have 3 & ½ hours.

Therefore the average voter can read (200 * [60 * 3.5]) or 63,000 words a week.

Assume average words per page is around 400, allowing (63K / 400) or 157.5 pages a week.

So the current health care bill would need to be open to the public for at least (1000 / 157.5) or 6.4 weeks.

And this assume that the bill is completely self contained – if the bill has information that states something like

In US Code 34-20, page 87, paragraph 2, subsection 5, change the third word from “or” to “and”

Then you add the additional US Code pages to the calculation.  If US Code 34-20 is 1000 pages, the bill has to be available for an additional 6.4 weeks.

& lastly, executive summaries do not count.  The entire bill has to be available to the public for debate prior to passing new laws.

As most politicians act as if they don’t honestly think their constituents are smart enough to have an opinion on legislation, it will likely never happen…. But one can dream!

Our President & Race

This has been written about all over the place and discussed ad infinitum, most of it conjecture based on prior opinions or potential political gain/loss.

& of course, since most humans seem to have this weird thing where our focus can move from the important to the seemingly mundane, we’re not discussing the SCOTUS nominee committee vote,  the pending health care bill, Iraq, Afghanistan, Russian’s & Germany’s resurgence in Europe, or any of the other things that should weigh on our thoughts.

Nope – the number one story seems to be about President Obama and the Gates situation.

Nothing can tell us more about race relations in the US than our own President injecting race along side a Harvard professor, Jesse Jackson, and others.

As most have figured out, it was a mistake for Mr. Obama to disucss a situation with which he was obviously unfamiliar.  The only exceptions of course, from those who believe Mr. Obama can do no wrong (here, here, etc, etc)  & those who use race to judge most other things (see confirmation bias).

What do we know?

Gates has said he returned from an overseas trip, found the door jammed, and that he and his driver attempted to force it open. Gates went through the back door and was inside the house on the phone with the property’s management company when police arrived.

Police said he flew into a verbal rage after Sgt. James Crowley, who is white, asked him to show identification to prove he should be in the home. Police say Gates accused Crowley of racial bias, refused to calm down and was arrested. The charge was dropped Tuesday, but Gates has demanded an apology, calling his arrest a case of racial profiling.

Gates, 58, maintains he turned over identification when asked to do so by the police. He said Crowley arrested him after the professor followed him to the porch, repeatedly demanding the sergeant’s name and badge number because he was unhappy over his treatment.

Crowley has refused to apologize, saying he followed protocol.

As is clear through the discrepancy of stories, either the police are colluding to lie, or Mr. Gates is lying.

Depending upon several factors in your personal life, most people will likely lean towards a “belief” decision on who’s lying (not a rational one). This decision will be based on our experiences with both race and police, as well as our current world view.

If one expects cops to act in racist ways because they believe in institutional racism, they will see this as further proof they are correct.

If one has had direct negative type contact with police, they will likely be more than willing to believe the cops are lying.

The question we must ask ourselves if what is the most likely answer (Occam’s Razor)?

Is it more likely that officer Crowley, a decorated officer who trains others in racial profiling:

Cambridge police Sgt. James Crowley, the cop at the center of a firestorm over the arrest of Harvard professor Henry Louis Gates Jr., has taught a racial profiling class at the Lowell Police Academy for five years….

Who enjoys the benefit of having an eye witness, a fellow cop to be sure, but since race apparently matters:

A black police officer who was at Henry Louis Gates Jr.’s home when the black Harvard scholar was arrested says he fully supports how his white fellow officer handled the situation.

Sgt. Leon Lashley says Gates was probably tired and surprised when Sgt. James Crowley demanded identification from him as officers investigated a report of a burglary. Lashley says Gates’ reaction to Crowley was “a little bit stranger than it should have been.”

Asked if Gates should have been arrested, Lashley said supported Crowley “100 percent.”…

Or, one other person, the Harvard professor Mr. Gates.

It seems logical to give two people’s story more weight than that of one person without additional evidence to prove otherwise, but most people will decide based upon miscellaneous factors described above.

Another non-event blow-up due to our irrational racial biases.

Health Care Reform Versus Freedom

Of the myriad of reasons why government run health care should be avoided at all costs, freedom should rank much higher in the conversation than it does today.

Thanks to President Obama’s health care press conference snafu on the Gates situation, people have seemingly moved from believing in our President’s ability to produce national health care, to being more skeptical about his plans for health care.

I wish to submit that any focus on Mr. Obama, his administration, the current makeup of Congress, or any other time sensitive facts, misses the basic point that going down this road is fraught with more corruption and less freedoms.

What we know now – the government currently believes it has the right to tell parents whether they can smoke around their children, tell businesses whether they can allow smoking, and ban certain food ingredients they don’t like (see transfats via NY). They push these laws with the consistent refrain that allowing these things to continue can/will raise health care costs for all.

& this is under the current government system which doesn’t yet fund health care for roughly 1/6th of the population.

When we add these millions of individuals to government run health care roles, we are putting ourselves in a delicate position where economic reasons can be used to control any behavior the government deems “bad” for you.

This can include things such as eating the wrong foods, not getting enough exercise, drinking too much soda… anything which can be shown to have a negative impact on the cost of health care for all citizens becomes the purview of the federal government.  Therefore the government will become more likely to take decisions away from citizens that we enjoy today.

Some might say this is irrational blathering of a libertarian lunatic (& they might be right), but we’re seeing, even with pending legislation, the federal government discussing how to make decisions that most of the country would say belongs to them and them alone.

From the CEI:

Washington, DC, July 24, 2009—White House health care policy advisor Ezekiel Emanuel favors allocating fewer health care resources to senior citizens in order to save money, the Competitive Enterprise Institute discovered today.  In a medical journal article published earlier this year, Emanuel justified rationing health care services based on the controversial “senior death discount.”  …

The parallel to this process is increased corruption.

As the government expands its reach and power into more and more of our daily lives, citizens and corporations will naturally want to have some say in these new policies.  This is because the government will be in charge of spending additional trillions and people will always want to have a say in how that money is allocated.  Enter stage left – tons more lobbyists and tons more campaign contributions.

Lastly, this “right” to health care presupposes that it is indeed a “right”.

As the saying goes, the right to wave your arms, stops at the edge of the next man’s nose.  IE – once any right you decide to take advantage of, reduces the rights of others, it should rationally cease to be termed a “right”.

Therefore, once the state begins down this road, it will inevitably lead to federal rationing of health care for all as the end-of-life discussions going on now show us.  In order to ensure some semblance of equality, the government will need to write laws which will control doctor’s actions.

This will include things such as, what procedures they can/must do and under what circumstances.  Following the logic, this “right” any individual might have to health care has just forced changes on the “rights” doctors have on choosing how to practice medicine.

Of course once society as a whole decided they like smoke free environments more, so it should become law, they already demonstrated by their votes their lack of caring when their “rights” interfere with others.

Surely Ye Jest Mr. President

Mr. President, are you kidding?

I listened intently to your entire speech and for a gifted speaker, all I heard were disjointed platitudes, class warfare rhetoric, and a little political bashing just for good measure.

Let’s start at the top (all quotes are paraphrased, not direct quotes):

Obama:  As a result of the actions taken in the first weeks of  my administration, we stabilized the housing market, saved jobs – created new ones, and gave tax relief to millions.

Wow!  I wasn’t aware the government was this powerful.  Maybe unicorns really do exist?

Seriously though, first, the housing market is still declining.  It is not stabilized yet and in some parts of the country is still losing quite a bit of value.

Second, I’m not sure what a “saved” job is or how one would go about calculating it, but what we do know is that on net, jobs continue to be lost.  So growing jobs is absolutely incorrect and saving jobs is a feel good phrase that would be impossible to prove (or disprove).

But who cares about little things like facts when you’re trying to take credit.  By the way, who’s really to blame?

Obama: Through the last few decades of unprecedented growth, only a small minority of wealthy people actually saw their incomes grow, while the economy was not making good paying jobs or green jobs like it should’ve.

Oh, ok.  So it’s the rich’s fault?  They should have to pay!

Come on Mr. President, this is class warfare and theoretically beneath someone who promised to usher in “Hope & Change” and a new kind of politics.  Just to clarify for you Mr. President, class warfare has existed for centuries.  It’s not new and it’s not built on a foundation of “Hope & Change”.

But why do we need this Mr. President?

Obama:  Because middle class families have been struggling due to the constant rise in health care costs.  They have had wage increases, but due to increasing health care costs, the wage increases were offset.  This is also causing employers to not be able to afford health insurance anymore either.

So, the government medaling in health care through medicaid, medicare, FDA, and the myriad of laws that cover things such as, what qualifies a surgeon, what kind of needle can I use to draw blood, what drugs have to be based on prescription, and ever other intrustion they’ve made have pushed costs higher and  higher.

Additionally,

Obama:  I’m confident that when people look to see the costs of doing nothing at all, the people will support me.

Mr. President, if you’re not aware of the current level of intrusion into the current health care system, then it’s possible GWB might have a lead in the IQ race.

We’ve tried.  & time and time again, health care has become harder to deal with and more expensive.  Each time the government does something like this, it costs more than they thought it would, usually by multiples of at least 10, and the savings they say they’ll get never materialize.  But this time will be different.  Why?  Cause I’m Barak!

How will we do it?

Obama:  First, the government will not get in between you and your doctor.  What we will do is pass a bunch of laws that change the way insurance decisions are made, work towards decisions on “end-of-life” care, put limits on the amount of money a person will pay out of pocket, and many other laws.

But this is definitely NOT government interference.

Mr. President, congrats.  I have to applaud you as I couldn’t have said all that with a straight face.  You deserve an Oscar for logic twists needed for this.

What will it cost?

Obama:  Nothing of course.  We will save billions by fixing existing inefficencies and taxing the top 1% just a little bit.

So, we get everything we want and it costs hardly anything?  Someone once told me about things too good to be true, but I’m so enamored now by his speaking ability that I forgot.  But basically he seems to believe that to fix government intrusion into health care, more government intrusion is needed.

He seems to believe that while every time the government has gotten into health care or retirement funds or any other social spending they’ve always gotten the numbers wrong.  But this time is different.

What’s stopping you?

Obama:  I heard a Republican strategist state that it’s better to go for the kill against Obama than pass meaningful reform.  I heard a Republican Senator state, we want him to fail.

So… you have the executive branch, the House by a good majority and a filibuster proof majority in the Senate.  But the Republicans are causing problems?

Obama Speaks, People…

As I’m sure everyone is aware, Obama is going to speak tonight on his health care plan and the current economic crisis.

I’m not sure about the public at large, but in the span of less than a year in office, I’m starting to feel the number of prime time Presidential addresses to the country has gone overboard.

However, the strategic decision that’s being made by Obama and his staff is completely understandable.

When you have a President that is such a gifted communicator, then you want nothing more for him to be in his natural habitat.  They just need to understand that in their arrogance of belief in the leader they continue to push, there will be a saturation point when he is out there too much.

Just like the Soities paradox, we don’t know which grain of sand will make a heap; we also don’t know when/if Obama will become over saturated.  What history does indicate, is that if his handlers don’t become more humble about their leader, over saturation will happen.

Having said that, the really nauseating piece of this so far was aleak about the speech itself.  From the UPI:

White House Chief of Staff Rahm Emanuel told The New York Times Obama intends to use the news conference as a “six-month report card,” to talk about “how we rescued the economy from the worst recession” and the legislative agenda moving forward, including health care and energy legislation.

The arrogance it takes to announce publicly that the TARP money positively impacted the economy is breath taking. To state they rescued the economy from the worst recession ever is simply a lie.

As written here earlier,  the administration announced loudly and proudly that without acting right now and passing more stimulus, we are in deep trouble.

Using charts and graphs, they warned – without stimulus money, the unemployment rate might go as high as 10%, but with it, will stay below 8%.

Of course, with hindsight, we know the current unemployment rate is verging on 10%, specifically 9.4% today with the additional billions spent.

They warned us that allowing GM to declare bankruptcy would be disastrous.  Now we are almost two full months from that exact thing happening and yet, somehow, the sky has managed to not fall.

So based on historical evidence, in just the very beginning of this presidency, every time they’ve spoken about economic issues, they’ve turned out to be wrong.

Yet, they will go ahead, full force this evening, and loudly proclaim something they can’t possibly prove.  That is that the country is better off than had they not spent future generations’ money.

They can’t prove it, just as I can’t prove them wrong.  Logically, neither I nor the most intelligent economist in the world can prove what might have happened under a different hypothetical situation.

However, people should be smart enough to see that those telling you they did the right thing, have been more wrong than right.

The Aid That Wasn’t

I’ve been asked by some friends and colleagues to attend the upcoming Farm Aid concert here in St. Louis, MO.  I generally like smaller venues, but the announced line-up is unbelievable.  With bands such as Wilco, Willie Nelson, John Cougar, Neil Young, Dave Matthews, and others, I don’t doubt it will be an amazing experience for those who attend.

Having said that, I’m still not sure I’m going. I’ve been trying to express the idea of why I don’t wish to give money to Farm Aid and have thus far been unsuccessful.

To better help explain my thoughts, I went and pull information directly from the Farm Aid website. I confess, it didn’t take much time at all to find the reasons why this “charity” is honestly anything but.

First, their attacks on Genetically Modified Foods.  They start with a nice fact that contradicts most of the rest of their information:

Nearly 60% of processed foods contain genetically engineered ingredients.

& move to complete lies such as:

Common crops, such as soybeans, have been engineered to contain pesticides in every cell of the plant. As a result, these crops are not registered as food – they are actually considered pesticides.

Are they aware vaccines contain small amounts of the actual virus?  Are would they say, taking the flu vaccine with the strains of flu viruses contained within means it’s actually just a virus…

They continue:

Farmers buy GE crops based on promises of lower costs and higher yields, but they often find additional costs in veterinary bills, medications, unstable markets and extra pesticides. In short, farmers often encounter higher costs and lower yields with GE crops.

So 60% of processed foods contain GM ingredients, yet it lowers yield?  It certainly seems odd that something that would lower yields so drastically, would have such a high percentage of the overall food market.

But what do I know, maybe the founders of Farm Aid, such as Willie Nelson, know farming better than the farmers currently using the crops they are against.

Going further, the site reads:

While the Food and Drug Administration claims GE products on the market are totally safe, there has been no thorough analysis of their long-term implications.

Due to the extremely unpredictable nature of genetic experimentation, new food toxins, allergens or diseases can and have resulted from genetic engineering.

Not only are these beliefs wrong, but they’re basically simply anti-science, faith based beliefs, around “feel good” ideas that some how “man-made” plants are inherently different from natural plants.  As if there are no natural substances that won’t kill you…

Either way, we’ve been consuming GM food since the late 50s. This is not new and if every soybean that had pesticides in every molecule would kill a bunch of people, we, and most other western countries, would already know due to radically changing death tolls. Instead, man’s life span continues to increase every generation.

Secondarily, man had been modifying crops for centuries.  We obviously didn’t have the technology 300 years ago to specifically splice genes in plants, but we certainly spliced plants themselves to change the traits of what was found in nature.

Let’s start with an easy example – bananas are not the yellow things we eat at the stores, but instead have been breed over years to come to that point. Actual wild bananas are much tougher to eat and look like this:

Wild Bannanas

Without “engineering” this crop, we would lose a very valuable fruit and a great source of potassium.

Of course, lots of bands I watch believe in things I think are stupid, why is this one different?

I submit that what makes Farm Aid different from other bands discussing things other than music, is that the money they spend to promote this stupid and irrational fear of GM crops, can and will kill millions worldwide.

Farm Aid, like other environmental & anti-globalization (& Farm Aid) groups pushing this irrational fear, have helped pass laws in most of Africa to outlaw GM crops. This is a disastrous outcome that is hurting the world’s poor.

Millions of Africans die each year of starvation due to limited crops, limited arable land, and limited growing seasons. GM crops would help both the overall yield of the plants as well as keep most of the nutrients in the soil allowing for constant growing of similar crops (this is a huge issue, where crops remove nutrients form the soil, therefore crop rotation is required – but of course some climates can only grow certain crops, making crop rotation difficult – GM crops have reduced this problem).  Additionally, GM crops have been made to not only resist crop destroying insects, but some have been made more drought resistant.  All of these things are good things.

The idea that man can overcome the limitations of organic/subsistence farming to grow a planet to 6 billion and growing, is a positive for anyone willing to look critically at the issue.

The idea that we shouldn’t use technology to attempt to grow food for a continuing increased population because we’re scared, is both dangerous and deadly.

So I guess to those who want go, you should certainly attend Farm Aid.  It should be a great concert.  I just might think about giving to some other charity to compensate for the idiotics actions of the non-profit group your tickets will go to support.

The Fallacy of “Temporary” Government

While browsing the world wide inter-tubes, I noticed a fair number of people making an argument along the lines of – "Why not institute a new temporary tax on businesses to pay for TARP?"

First – I do get the point that we should make the companies pay the money back.  It makes perfect sense to say, we bailed you out, now it’s your turn to pay up.  In my perfect world the money would have never been given, but my world doesn’t exist.

Having said that, the idea itself assumes that an increase in taxes/power is in fact temporary. Historically, governments, and agencies around them, have proven this naive view inaccurate.  We have seen that they are indeed very unlikely, without massive political pressure, to ever remove taxes and/or laws and/or new agencies and/or new czars once instituted.

For example, among other "temporary" taxes, the US taxpayer is still paying taxes that were instituted to pay for the Civil War & WWII.

But this is all to be expected.  The laws of rationality say these agencies will continue to grow as they continue to want to survive and so will naturally rationalize their reason for existence. IE – it’s a crisis if we don’t solve X! Newt/Hillary/Rush/Franken/"whatever the picture of evil being used by each side is" – will be in charge if you don’t act now!

For an NGO assignment, look no further than Greenpeace.  This organization did great works from the 1970′s to the 1990′s, but one can juxtapose those excellent moves into conservation with the radical agendas being proposed today. Even one of the founders, Bob Hunter, of Greenpeace refused to deal with them due to their divergence from rational environmental policies.

Why would Greenpeace and others become radical?

Because once the air & water were cleaner, parks were nicer, wildlife that was endangered started being removed from the endangered list… once they made a lot of gains in the areas they wanted, they start losing their reason for existence.   So they naturally moved to a more radical view to continue their existence.

It takes a special breed of politician or lobbyist to stop seeking more power for their respective groups.  Therefore, in our system of government, it should be up to the people to constrain governmental power due to this natural creep.

Too bad current candidates running for office only allows me to vote for either the conservative party for big government or the liberal party for big government.

Now there’s a choice!