In a stunning example of truthfulness, AFL-CIO President Richard Trumka gives the perfect reasoning to why government is inherently inefficient.  While discussing the President’s recent pledge to review business regulations for balance (here), Mr. Trumpka said (here via The Hill):

…the White House’s planned government-wide review of regulations could end up being a “distraction” for agencies already dealing with scarce resources.

“To the extent that analysis draws them away from enforcing the regulations and protecting the health and safety of workers, we think it’s a distraction,” Trumka said. “We think we would have rather not seen it.”

And there you have it – since the incentives to pass and sustain business regulations for the AFL-CIO are political and not about the workers, business regulation becomes and end in itself; with the means already justified.

Short sighted of course, as getting rid of regulations which work to stall economic growth (regardless of  the regulations’ initial intentions) would help more people get hired.

Additionally, the reduction in the number of regulations could in fact realign the scarce resources dealing with these issues towards the most important regulations instead of being bogged down with the more political regulations.

But when the incentives are more about political power than worker protection, this is the end result.  Just as Mr. Tumpka stated,   even working towards improving the balance between economic growth and worker protections, is by itself, by definition, wrong.

Infinite Monkey Theorems

Things worth reading…   

or at least pondering and forgetting quickly… 

So… how good is China’s new stealth fighter?  Not sure, but I’d start by asking this guy(here via MSNBC): 

HONOLULU — A former B-2 stealth bomber engineer was sentenced to 32 years in prison Monday for selling military secrets to China in the latest of several high-profile cases of Chinese espionage in the U.S.

US economics…

Businesses have not yet started hiring as UE claims are up.  Some of it is due to delays due to weather were people who would’ve claimed last week didn’t, but still not a good sign (here via BizTimes.com):

New applications for U.S. jobless benefits jumped by 51,000 to 454,000 last week, the U.S. Labor Department reported today, up from 403,000 during the previous week….

The four-week average of new claims, climbed 15,750 to 428,750, the highest level in two months, the Labor Department said. 

Additionally, the CBO reported this week, what all politicians have known for decades, but have consistently ignored…. social security is a looming and ever-growing problem (here via EpochTimes): 

In its Budget and Economic Outlook report for fiscal years 2011 to 2021, the CBO anticipates that the Social Security program will run a $45 billion deficit for 2011, and will be in the red for at least the next ten years. 

And…

According to the Associated Press, if present Social Security spending and funding levels are sustained and adjusted for the coming influx of Baby Boomers applying for and collecting Social Security checks, the program’s trust fund could be emptied by about 2037.

President Obama’s thoughts about this re: State of the union speech… no problems at all… full remarks here:

Starting in 2011, we are prepared to freeze government spending for three years.  (Applause.)  Spending related to our national security, Medicare, Medicaid, and Social Security will not be affected.

Not “affected’?  I guess that doesn’t discount it from affecting us…. but why worry about that when we can spend more money on things we don’t need (speech cont’d):

Next, we can put Americans to work today building the infrastructure of tomorrow.  From the first railroads to the Interstate Highway System, our nation has always been built to compete.  There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.

Tomorrow, I’ll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act.

That’s some vision there; to ignore the looming crisis and instead deflect to a new boondoggle.  & not just a boondoggle, but it seems this is the answer to so many of life’s troubles… the environment, traffic congestion, sprawl…. yes, this magical elixir that is so incredibly great, that it can’t possibly survive without federal government to operate.

But wait… it will create jobs!  (speech cont’d):

There are projects like that all across this country that will create jobs and help move our nation’s goods, services, and information. 

Of course if it’s a “jobs’ program” and not a new transportation program (look over here – shiny stuff)… well, let’s let Milton Friedman discuss jobs’ programs (here):

Milton recalled traveling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: ‘You don’t understand. This is a jobs program.’ To which Milton replied: ‘Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.’

Either way, here is a good response to the State of the Union from Cato.

Lastly, more great stuff from the Economist.  This time an Ideas Arena

As business leaders, politicians and journalists meet at the World Economic Forum’s annual summit in Davos to discuss the year ahead, The Economist will be inviting readers and guests to participate in a series of online debates questioning the future of global leadership. From now until February 18th, we’ll be examining the rapid emergence of a single global elite whose decisions, and opinions, affect us all.

Infinite Monkey Theorems

Headlines 

Worth Reading 

….or at least pondering and forgetting….. 

From the First Amendment Center, the new Alabama governor displays amazing religious intolerance and arrogance.  I thought this was 2011….. (whole thing here): 

BIRMINGHAM, Ala. — Alabama Gov. Robert Bentley told a church crowd just moments into his new administration that those who have not accepted Jesus as their savior are not his brothers and sisters, shocking some critics who questioned yesterday whether he could be fair to non-Christians. 

“Anybody here today who has not accepted Jesus Christ as their savior, I’m telling you, you’re not my brother and you’re not my sister, and I want to be your brother,” Bentley said Jan. 17, his inauguration day, according to The Birmingham News. 

From the Obama Administration: Remember Obamacare?  Which was going to add 39 million previously uninsured people to the status of insured (here via CBO)?  

Well, here we are in 2011 – a time when Obamacare is *not* implemented and the provisions that have gone into effect only went into affect on January 1, 2011. 

Apparently that’s a very long time though….. as according to the WhiteHouse via the Department of Health and Human Services, repealing Obamacare will put 129 million insured at risk (here via HealthCare.gov). 

Seriously?  I wonder if DHHS is still accepting information on those (here via DA) dealing in misinformation with regards to Obamacare? 

From Wired, a meaningless, and based upon presented evidence, a false headline [emphasis added] Supreme Court Upholds Intrusive Government Background Checks.   

The actual article?  

The Supreme Court ruled that private contractors working for the government cannot be shielded from background investigations based upon a right to privacy.  That government contractors can in fact, by virtue that they are basically government employees, be treated just as any other federal employee. 

Maybe it’s just me, but subjecting yourself to a background check that resembles the exact same background check of others you work with doesn’t seem to be intrusive.  

Which is irregardless for Wired anyway, as even *if* this decision could be argued logically as intrusion, the article doesn’t even attempt to offer proof of such an assertion. 

From eScience News, US Office of Naval Research announces big news on the “Cool Things That Kill” front (here): 

Scientists at Los Alamos National Lab, N.M., have achieved a remarkable breakthrough with the Office of Naval Research’s Free Electron Laser (FEL) program, demonstrating an injector capable of producing the electrons needed to generate megawatt-class laser beams for the Navy’s next-generation weapon system. 

Artist's Rendering "PHALANX WITH LASER CANNON" Source: Raytheon

To put a little context into what megawatt means (1,000 kilowatts), Scientific American reports in July 2010 (here): 

In a grainy, black-and-white video that looks like a home movie of a UFO attack a sleek aircraft streaks through the sky one minute, only to burst into flames the next and plummet into the sea…. 

Using a 32-kilowatt laser (article cont’d): 

The defense contractor says it depicts part of a test conducted in May during which the U.S. Navy used a solid-state laser to shoot down unmanned aerial vehicles over the Pacific Ocean…. 

& Lastly – ESO’s Hidden Treasure Contest reveals winner (here): 

M78 for ESO Processing contest. WFI camera on 2.2m telescope

Hidden Treasures gave amateur astronomers the opportunity to search ESO’s vast archives of astronomical data for a well-hidden cosmic gem. Astronomy enthusiast Igor Chekalin from Russia won the first prize in this difficult but rewarding challenge…. 

More amazing astronomical artwork here: Top 100 from ESO

President Obama is planning to sign an executive order to review business regulations (via LA Times here):

WASHINGTON (AP) — Taking another step toward mending his relationship with the business community, President Barack Obama will order a review of federal regulations with an eye toward getting rid of those that stifle job creation and hurt economic growth.

Upon hearing this news, I was immediately reminded of the Simpsons’ episode.  The episode is about NASA, who having problems with funding, decides to put an average man in space for marketing purposes.  The press conference (here):

Scientist: Ladies and gentlemen and members of the press.  I’d like to
           present the new generation of NASA astronauts: the average
           American.
            [Curtain rises to show Homer wearing a "Hail to the Chef"
           apron and Barney dressed as a golfer]
Reporter: Jim Wallace, Associated Press.  [clears throat] Is this a
           joke?
Scientist: [cheery] Far from it, Jim.  One of these men will prove space
           travel is within the reach of the common man.
Reporter: Toby Hunter, Minneapolis Star.  No really, is this a joke?
Scientist: No, Toby, and no more questions about whether this is a joke.
            [Everyone lowers their hand, dejected]

Please don’t misunderstand – I’m hoping, like a lot of people, that the President is serious about this.  However, almost every single action taken by this administration shows an absolute love of controlling by regulations, even when no obvious reason for doing so exists.

This is after all the same President who gave us an executive order which prevented anyone from drilling for oil offshore due to one oil spill on a platform owned by BP (DA post here). 

This was all prior to the government report released late last year, which held BP accountable, but even after blaming BP for the entirety of the incident, they announced a month later continued blanket regulations against an all of the industry.

Even the President’s own fact finding commission is wondering what many others questioned before – what is this continued ban is supposed to fix?  They plan to press the administration on the issue soon.

And that’s just regulations for a small part of the energy industry.  This is also the same administration who pushed for financial reform.  Financial reform which as pushed before they had anyone had any idea what took place.  The reform which included controls on market segments which are known to have little to no impact on the financial crisis like hedge funds, derivatives, executive compensation and more (here & here).  (more…)

As depicted in the movie Blood Diamond, many diamond deposits around the world only function through government/militia oppression, slavery, violence, children soldiers, and really some of the worst actions on behalf of humans anywhere.

Enter the Kimberly Process Certification Scheme; which is an international process which is designed to certify the origins of raw diamonds as conflict free diamonds.   & they’ve been doing so well with this process, that UN member states have voted, less than a month ago, to extend their power in order to give them a better ability to halt non-certified diamonds.

Which all in all seems like a good thing.  It’s certainly a noble effort to try to prevent oppressors from making money off of violence and slavery.

Today’s announcement by the Kimberly Process however, should give reasonable people reason to question whether they are truly acting towards their stated goal (article here):

…The Kimberley Process has granted Zimbabwe permission to continue conducting supervised sales of diamonds….

With of course two sides to the story (article con’t):

…The issue of Zimbabwe selling the Marange diamonds has divided the KP along political lines with Western countries led by the United States, Germany and Australia as well as civil society groups that are members of the organisation calling for banning of the gems…

But African and other countries, including Russia, have opposed the calls to ban the diamonds, appearing to buy Harare’s claims that calls for banning of the Marange stones are driven more by the West’s dislike of President Robert Mugabe than by concern for human rights….

Theoretically two sides… assuming you ignore Zimbabwe’s constant chaos and conflict at the hands of their leader for more than 30 years Robert Mugabe.   He has taken a country and almost completely destroyed it all while singing songs of revolution and owed dues from those responsible for Apartheid.

(more…)

Bjorn Lomborg, author of the book “The Skeptical Environmentalist” (Reason review here), now has his own movie, “Cool It”:

The movie’s specific goal (here):

Amidst the strong and polarized opinions within the global warming debate, Cool It follows Lomborg on his mission to bring the smartest solutions to climate change, environmental pollution, and other major problems in the world.

& Considering the only other major films such as “Inconvenient Truth” are nothing more than fear inducing propaganda, Mr. Lomborg’s rational style and willingness to deal with the reality should make for a good film.

DA Posts on Bjorn Lomborg & The Copenhagen Consensus here & here

FAILURE When your best just isn't good enough.

It’s not a complete measure of how effective terrorists are as a whole, but when they start taking credit for massive failures, it’s something to note (here):

A Yemen-based al Qaeda group is claiming responsibility for the international mail bomb plot uncovered late last week….

& in this case, not only are they taking credit for failures, but Al Qaeda has even taken credit for a bombing they didn’t do (here):

WASHINGTON: Al-Qaeda’s affiliate in Yemen was not behind the Sept. 3 crash of a UPS cargo plane in Dubai and falsely took responsibility for the incident, according to the FBI and Department of Homeland Security….

& to add insult to injury, one of their own provided the intelligence needed to prevent the plot (here):

Yemen has revealed that a former Guantánamo Bay detainee who fled to the country from Saudi Arabia after his release by the US tipped off authorities about the plot to send bombs on cargo planes….

Of course it’s hard to take credit for successes when none exist, but it’s interesting to note that their power has been reduced to such an extent, that failures are the only things for which credit can be taken.

& for some, looking at a terrorist group as you would any other political organization, might be unseemly,  but it is instructive nonetheless.  Recall just 9 short years ago, how everyone was certain we would be hit again. How we were warned about continuing policies.  How we were being pulled into quagmires in Afghanistan and Iraq just like they wanted.

& now – admission of failures and fake admissions of success.  How time changes things.

Disclaimer:  None of this is intended to signal that I think vigilance isn’t necessary for our security successes to continue.

For good news – we have more research helping to confirm what true free trade advocates have always believed.  We don’t see a decrease in wages or living standards by trading with developing countries.  Via NBER here:

Concerns that (1) growth in developing countries could worsen the US terms of trade and (2) that increased US trade with developing countries will increase US wage inequality both implicitly reflect the assumption that goods produced in the United States and developing countries are close substitutes and that specialization is incomplete. In this paper we show on the contrary that there are distinctive patterns of international specialization and that developed and developing countries export fundamentally different products, especially those classified as high tech….

Which translated means, the US, one of their main agents in their research, has an economic dynamism (here & here)which results in the US never directly competing with other countries’ lower paid labor:

…Judged by export shares, the United States and developing countries specialize in quite different product
categories that, for the most part, do not overlap. Moreover, even when exports are classified in the
same category, there are large and systematic differences in unit values that suggest the products made
by developed and developing countries are not very close substitutes—developed country products
are far more sophisticated….

& this of course isn’t the only research making such conclusions (here & here).

But that’s not all.  We’ve seen historically that creating obstacles to free trade can hurt us severely (here):

One of the major causes of the Depression was Congress’s passage of the Smoot-Hawley Tariff, which was signed into law on June 17, 1930. Smoot-Hawley placed tariffs on more than 20,000 imported goods. It halted the recovery from the 1929 downturn and resulted in retaliatory tariffs from U.S. trading partners and a decline in U.S. imports and exports of more than 50 percent….

Though not all would say cause (here):

“The best estimates are that the multiplier is roughly 2. In that case, real GDP would have declined by about 3.4% between 1929 and 1931 as a result of the decline in real exports. Real GDP actually declined by about 16.5% between 1929 and 1931, so the decline in real exports can account for only about 21% of the total decline in real GDP.”

Irregardless, the research and economist communities agree on the benefits of free trade (here):

A 1990 survey of economists employed in the United States found that more than 90 percent generally agreed with the proposition that the use of tariffs and import quotas reduced the average standard of living….

Congress’ answer to all of this? A trade war with China (here):

The Democrat-backed bill passed by 348 to 79, and targets countries that hold down the value of their currencies, as many accuse China of doing….

The Senate’s answer?  A trade war with China (here): 

The chairman of the Senate Finance Committee said Wednesday that the upper chamber is “poised” to legislation meant to hammer China for its currency policies…

To paraphrase an axiom:  With economic heavy weights like this as friends, who need enemies… but I’m sure there’s no way they’ll screw up health care, right?

The President? A trade war with China…. sort of no.  While he’s pushing China just as other presidents have (here):

The Obama Administration believes that China needs to take steps on rectifying its currency value, White House Press Secretary Robert Gibbs said….

He hasn’t stated he would sign anything and other administration officials are pushing different views (here):

Treasury Department Secretary Timothy Geithner said there was “no risk” of a global currency war during a wide ranging interview with Charlie Rose Tuesday evening….

Intelligently, he’s keeping his options open in this very way.  Though I’m not sure I want to bet that he continues down the road of economics considering his approval ratings., but a smart move overall.