Detailed Abstractions

That giant economic think-tank known as Google just announced their 3Q numbers.  Not only were the results good, but they had wonder news for all those worrying:  the recession has bottomed out:

SAN FRANCISCO, California — Google on Thursday declared the worst of the recession over and paved the way for a return to heavy spending on expansion as it reported a surprisingly strong 8 per cent jump in net revenues in its latest quarter….

Fear not friends – they aren’t basing this just on themselves, but all that economic data they have:

The optimism reflected what the company said was an across-the-board recovery in online advertising, with even the struggling financial services sector showing a return to growth….

Apparently though, Google forgot to tell Bank of America about its wonderful news (BoA 3Q):

CHARLOTTE, North Carolina (Reuters) – Bank of America Corp posted a $1 billion third-quarter loss as consumer credit woes eclipsed investment banking earnings, underlining why the bank remains on a government respirator….

I’m sure they just missed that… wonder what a really big blue chip company might be doing?  GE?:

General Electric’s third-quarter results showed just how fragile the U.S. economy remains, as its troubled financial unit dragged down earnings 44 percent, despite gains in divisions that make wind turbines, household appliances and broadcast television shows….

Not only are GE, BoA, and the 9.8% unemployed unaware of this great news, but even Google insiders don’t seem to know.  Looking at the public record, Google Insiders Sales, shows recent transactions for all senior officers dropping approximately 5% of their current Google holdings just last month.

Call me a raving skeptic if you will, but I’m thinking that you need to evaluate your decision making skills if you take your economic news directly from Google press releases.

Don’t get me wrong here, they make a great product and innovate better than almost anyone.   They are and will continue to be a force in computing for sometime to come because of their agile nature combined with some of the best minds in the world.  & I remember webcrawler… wow things are sooooo much better.

Regardless of their product however, it seems their investments into economic modeling & research in respect to business cycles is limited to zero.  I would add that if you’re an investor, that’s a good thing.  Better to let them do what they do best.

Why the press release then?  The only ones who know are those who drafted the press release and those with editing decisions prior to its release.  Without any information directly from one or more of these people, then reasoning is simply impossible to prove.

We can however ask some questions to try to find the likely answer.

(To be fair) The first possibility is simple honesty & stupidity.  Someone might have intended the “recession worst over” as a marketing technique to further enhance their aim to be seen as a very smart company.  All without realizing that overly simplistic analysis, based mainly upon very recent stock market activity and their profits do not make for effective proof.  Really, it’s just another anecdote that Google’s employees share.

Another, far more concerning possibility is their politics and desire to wish to see the President do well.  For years they have given most of their political donations to one particular party.  In 2008, Democratic candidates received 5 times more money than their Republican counterparts from Google.  Their employees, including top executives, gave 10 times more money to Democrats the Republicans.

Additionally, their search site has self-imposed constraints for arbitrary reasons.  For instance, Google refuses to allow gun dealers to advertise.   As a little experiment, slip over there real quick and run a quick search on swords or strippers.  Take note of the small advertisements to the right side of your search results.  Now do the same for guns and see what ads show up… I’ll wait.

They state their policy is to not allow advertising of weapons, but I think swords should qualify.

That could be an outlier, so let’s move forward assuming their ban on gun adverts is a true policy against weapons in general.

Then why did they also restrict advertising by Pro-life groups until forced by a judge to change their policy:

After a legal conflict between Google and The Christian Institute, filed when one the of religious foundation’s ads were rejected from the Google Adwords system, Google has changed their religious advertising policy to allow pro-life advertising to appear along with their secular and pro-choice advertising…

They did change their policy, but only after being sued.  Even giving them some credit for reversing their decision, their originally stated policy reeks of political and personal opinions:

The decision changes the former Google policy which excluded any ad containing a combination of “abortion and religion-related content“…. [emphasis added mine]

Putting all of this together, it’s hard not to reach the conclusion that Google is using its outstanding press relations due to their history as a vibrant and smart company to help those with which they agree.

Which is completely and totally their right.  It’s their right to put their money where they wish, to make internal policies as they see fit, and to accept contracts for advertising from those they want for any reason they want.  None of this freedom for me, but not for thee crap.  Let them do as they will I say.

Just make sure your informed and know who you’re doing business with as well.

PS:  If you’re not doing anything on a Saturday night and there’s positively nothing on TV including uninteresting infomercials about idiots unable to use blankets, then you can check out some pretty heavy economic think tanks.  First and foremost, the recognized economic powerhouse, generally recognized as the institution who makes the call on things like, when is it a recession?  When did it start?  When did it end?

NBER, or the National Bureau of Economic Research, has long been the a standard bearer in economic research in all kinds of aspects of life ranging from health care to labor studies.  They are the largest non-profit economic research organization in the US and boasts about the great minds working there.  In fact, 16 of the 31 American winners of the Nobel Prize in Economics, have been associates NBER, including one of my heroes: Milton Friedman.

PSS:  They could turn out to be right.  The luck of life sometimes means you can do the wrong thing and end with the correct result and vice versa – you can do the right thing and end with the wrong result.  Therefore, to correctly analyze thought patterns over time, any one result isn’t necessarily a deterministic factor.

In what has to be a of the sign of the coming apocalypse, Juan Williams is now defending Rush Limbaugh (video).

While debating Warren Ballentine on the O’Reilly Factor, Juan Williams defended Rush Limbaugh against the constant attacks since the public caught wind of his potential investment in the St. Louis Rams.

Apparently a combination of the celebrity culture that is today’s professional sports and the proclaimed self-righteousness of the NFL, their players’ union and professional race “leaders” can actually lead to a temporary peace deal between  Rush & Juan.

That’s only part of the story – the rest of the story should be the blatant hypocrisy of an organization which demonstrates regularly that it could care less about real criminal acts, much less controversial statements from within their ranks.

The easiest example for analyzing the league’s value system based upon their actions is Michael Vick.  Giving this guy a job after he was convicted of torturing animals to death for their unwillingness or inability to fight very well was a calculated decision about money.  But that’s really just the start of the NFL’s long tradition of tolerating and enabling criminals.

It seems we can’t go more than a couple weeks without a players getting arrested for drinking and driving.  For example, the St. Louis Rams are still allowing Leonard Little to play football, even after killing someone in a drunk driving incident which he followed up with another DWI (here) arrest.

Even more recently the Rams have shown a complete disregard for the community by their willingness to take a firm stand on behalf of players killing innocent citizens.  Ignoring their past problems, they thought it might be a good idea to bring on a new player with prior DUIs.

No worries to the citizens of St. Louis though, according to the Ram’s GM, he passed the “character” test during background investigations.   I’m sure the friends and family of the deceased are glad to know this player received the all important, “I looked into his eye and saw his character” test.

Of course it’s not just the Rams.  Let’s not forget Dante Stallworth recently entered into the “NFL players who  killed innocent people” club as well.

& as NFL traditions go, drinking and driving is just one of the time honored ones.  Another tradition  is using their strength to assault others.   Domestic violence seems to be the most popular  form of this tradition (here, here, & here), including the amazing amount of courage it takes to beat your babys’ momma with an aluminum mop handle while the kids watch (here).

As bad as all that is by itself, this information truly is a very small percentage of the NFL’s actions as it relates to criminal behavior within their ranks.   The endless stream of examples includes all types of crime including assaulting cops, assaulting security guards, shootings, drug rings, weapon’s charges,  probation violations, coaches assaulting other coaches, and even just plain ole indecent exposure – which in some cases can result in a being forced to register as  sex offender.  There are literally so many available examples of NFL players’ crimes, it’s challenging to pick and choose enough examples to be convincing, while ensuring this post doesn’t end up longer than the health care bill.

Indeed, so much information exists that at least one website is dedicated to tracking it (NFL Crimes News Blog).   A while back they even promised to take down their entire site if they could go 60 days without seeing an arrest posted on ProFootballTalk police blotter.  The closest they’ve gotten is 29 days.

The basic point?  For an organization with such a demonstrable history of ignoring and enabling real crime, their attempt to come off as self-righteous based on someone’s past comments is another perfect example of style over substance.  It would almost be amusing if it didn’t show how shallow our celebrity obsessed culture can be.

Standard Libertarian Disclaimer:  As a private business the NFL can pick and chose its investors at will.  I really don’t care all that much that the NFL pulled Rush’s bid nor would I ever want to take away their rights to do so.

Of course as a corollary to their freedom to chose their investors, we all have the freedom to point out the hypocrisy of such a decision.  When the NFL, the players, and the players’ union collectively run around throwing matches at people while they know full well they are standing in a house full of gun powder & explosives, they deserve nothing more than ridicule.

For more than 20 years now, with legislation leading back almost 40 years, the United States government has been pushing the idea that every citizen should have a home.

Based upon several studies showing high correlations with positive societal behavior for homeowners, politicians, leaders, non-profits, lots of people pushed for easier access to affordable housing.  In a Federal Reserve report published in 1999, they state:

A number of recent studies attempt to measure whether there are nontraditional benefits to homeownership, such as increases in the success of children (Green and White [5]), citizenship (DiPasquale and Glaeser [3]), and a variety of family outcomes and attitudes (Rossi and Weber [11])….

This is only 1/2 the story of course.  What these studies, our politicians, our leaders, & the rest of them  can’t conclude from this data is whether home ownership actually affects any of these additional traits.  The study itself hints at this:

…Because of the preferential tax treatment accorded homeowners, particularly low-income homeowners, and the large degree of wealth accumulated in housing, these authors argue that it is important to know the full range of homeownership benefits and costs. However, given the difficulty of credibly assigning causality to housing externalities, it is not surprising that such factors have been previously ignored.

In one such paper, Green and White [5] find a strong statistical correlation between homeownership and the likelihood of dropping out of school or becoming pregnant. Yet a reasonable interpretation of their result is that of omitted variable bias. Clearly, homeowners are different from renters along a variety of dimensions. As a result, those factors that are latent in their work, such as parental skills, interest in the educational process, wealth, and family stability, potentially bias upward any homeownership effect….

In other studies, they show correlations between home ownership & wealth accumulation, to help give more force to the “everyone needs a home” meme (study dated 2004):

For many years the federal government has promoted homeownership as an important goal for low-income families. A primary motivation of this policy goal is the concept that owner-occupied housing can be an important means of wealth accumulation, particularly for those lower-income and minority families that are able to purchase homes….

They as well admit the difficulty with this assessment:

…However, very little has been done in the housing literature to determine the importance of housing and non-housing sources of wealth accumulation. This determination has been difficult to address for three reasons. First, detailed wealth information on families is seldom available on a consistent basis. Second, such information on wealth is even less likely to be available over time so that changes in wealth can be observed. Third, the process of housing wealth accumulation is dynamic. Housing wealth accumulation depends critically on how soon a family that is renting becomes a homeowner, whether or not the family graduates to more highly valued owned units over time, or becomes a renter again and never regains homeownership….

With the current practice of press & political standards however, you might be hard pressed to find any evidence that assigning non-traditional benefits to home ownership is anything but an unqualified good.  The majority of reports dealing with low income housing stimulus are positive  (here & here).

In some cases, overly emotional logic is used (here):

After business dried up in May, Jodi Morris’ employer, an insurance agent, stopped sending paychecks.

Since then, the 43-year-old single mother has had to sell almost all of her furniture – her kitchen table and chairs, bed frames, dresser and armoire, and living room set – to pay the bills.  Morris and her 7-year-old daughter, Karly, now sleep on mattresses on the floor of their two-bedroom Ahwatukee apartment. And with no table, the two eat dinner on their cream-colored couch.

An eviction notice that arrived this month threatened to put Morris and Karly out on the street.  But Morris could be the first Phoenix resident to receive a lifeline from the federal government that seeks to rescue those on the verge of homelessness….

& without exception, our government is not immune.  The US government is right now, before the housing crisis even fully contracts (I wrote about it here), spending money to help low income families purchase homes.

Even before the housing crisis though, economists, experts, non-profits, were asking whether home ownership should be considered an unqualified good.  Unfortunately, reports questioning these basic assumptions are a very low percentage compared to the constant noise.

In some cases, even questioning the wisdom of subsidizing low income home ownership has resulted in kill the messenger attacks from non-profit groups, community leads, and even Democratic leadership, by leveling charges of racism.  With a simple misdirection trick, questioning the basic assumptions is anti-low income & since low-income households are generally minorities, questioning these assumptions must be due to institutional racism.   Politicians and leaders everywhere have a grand ole time setting up straw men in a fields of hay while standing by with gasoline and matches, but we should expect more.  We should expect to be able to ask all relevant questions we can and to get answers to as many questions as possible.  Lastly, we should let the data lead to its natural conclusion.

Assuming we truly want the best answers we can get and the best progress we can have, we must be willing to ask tough questions and live with the answers reality presents.

Anything less is little better than just allowing random superficial rhetoric to control policy.  It’s almost like we never moved away from the world Richard Feynman spoke about in 1974:

…But even today I meet lots of people who sooner or later get me into a conversation about UFOS, or astrology, or some form of mysticism, expanded consciousness, new types of awareness, ESP, and so forth. And I’ve concluded that it’s not a scientific world.

Over time I’ve come to the conclusion that where news entities fail miserably is in their analysis with international politics.  Most pundits, writers, journalists, etc, seem to be able to semi-grasp domestic policies, albeit still in the usual, overly simplistic, fits-to-the-narrative type of way, but lose all rationality with respect to international affairs.

Interestingly enough, I think their failures in both domestic & international analysis stem from the same basic cause, oversimplification.  But it would seem that the degree to which it effects each type of analysis differs due to the lack of incentives private interests have in resolving inaccurate reports on international issues.

Thinking about the counter thought to international policy, domestic policy, we see incentives existing to resolve press inaccuracies.  For instance, if the press pushes inaccurate opinions and analysis which oversimplifies a given topic, a special interest group or two, plus at least one political party, and finally non-profits everywhere will try to enlighten by showing the fallacy of the common narrative.

This is because people rightfully see domestic issues as more directly impacting their lives.  The corollary is that our politicians, our leaders, our special interests, and our non-profits tend to focus where we as a society focus.

The problem that can stem from this seems intuitive – inaccurate press on international issues should be held as highly suspect, but get printed without much serious disagreement.   Since very little counters popular wisdom, this gives the press a power to change opinions and as well as spread myths.

This leads to all kinds of odd conclusions, with large swaths of people all over the planet prone to believe in things without substantial proof nor any degree of rational logic.

For instance believing that western countries are somehow to blame for poor countries with constant internal strife and corrupt governments which inefficiencies and lack of resources.  Or said another way, people all over believe in a zero sum game.  This is true not only in the international sense, but also when dealing with immigration and free trade issues.

Mistaken assumptions such as zero-sum games also lead to beliefs about what one thinks a President can actually do, versus what reality tends to dictate what will actually be done.  This leads to politicians making believable, yet highly impossible claims about given international situations.  This has been done to all recent Presidents, including President Obama when pulling a missile defense shield out of Poland & Czechoslovakia was made to appear as a rash decision amounting to abandoning our allies, when in fact it wasn’t a bad decision when concluding what options were open and what were the greatest threats to our security and security in the region (wrote about it here, though Mr. Obama went and said it had nothing to do with Russia… which was just amazing… wrote about that here).

It leads to pundits everywhere snidely remarking how this action wasn’t “tough” or that action was going to anger others because it was “unilateral”.  With little recourse, journalists  print all sorts of things without taking into any account the actual framework through which any given action action was taken, under what circumstances, with what available options, or really they just leave out anything resembling actual analysis.

Unfortunately, it seems no organization is immune.  A recent piece published in the Economist titled  Even greater expectations discussing the idiotic Nobel Prize Committee decision, is a far cry from the analysis for which the Economist is known.

They rightfully begin with the question the world was asking, “Is it premature to give Barack Obama the Nobel peace prize, less than a year into his presidency?”, but delve quickly into non-international events dressed up to seem as if change had already happened:

…Most broadly, he has sought to engage with opponents, saying that America would “extend a hand, if you unclench your fist”, for example to those who were earlier dismissed as an “axis of evil”. Somewhat to the discomfort of Iran’s president, Mahmoud Ahmadinejad, who had bolstered his domestic support by vilifying America as an aggressor, Mr Obama has proposed holding talks about nuclear affairs, removing a precondition that Iran first abandon enrichment of uranium. Mr Obama made withdrawal of American forces from Iraq one of the main pledges of his election campaign and has since overseen a slightly quicker run down of troops than was envisaged by Mr Bush. Towards North Korea, too, Mr Obama has dangled the prospect of bilateral talks and closer engagement.

Regarding Russia Mr Obama has developed a policy of notably warmer ties, dubbed “hitting the reset button”. Relations had become especially frosty towards the end of Mr Bush’s presidency when war broke out between Georgia, an ally of America, and Russia…

Continuing with this as reasoning:

…Yet Mr Obama’s main achievement is a change of tone in foreign policy. A speech given in Egypt in June was an eloquent call for a new understanding between America and Islam. It was designed both to assure Muslims, now thought to number 1.6 billion around the world, that America is not set on a crusade. Similarly it was intended to convey to any Americans (and others) who believe in the notion of a “clash of civilisations” that friendly ties between religions is eminently possible.

Similarly, American policy towards small and repressive regimes, ranging from Myanmar to Cuba, has shifted in mood, if not yet substance, by offering the prospect of engagement if governments demonstrate progress towards democracy…

Which to date has not only done absolutely nothing to help international cooperation, but has made our interests tougher to protect.  In nearly every UN Conference on whatever, for instance the G-20 dealing with the economic crisis, the US asks for a lot of cooperation and everyone goes their separate ways.

In some ways this is to be completely understood.  American solutions for economic issues will differ from that of Germany or the UK.  Even though the same basic problem afflicts most countries during the global recession,  their banking industries are setup with much different regulations, making the solutions for one country not necessarily compare to another country.  The separate policies might even be attempting the exact same “type” of solution, for instance increasing capital requirements, but under different systems any one specific solutions will affect different countries differently.

When it comes to reaching our hand out to those regimes, we see that North Korea, Russia, and Iran have been openly hostile to any US intents.  Iran’s deadline of October the 1st to fess up or face sanctions has come and gone, even while it was precipitated by Iran admitting to an additional enrichment facility.

And all this, including that all important warming of US-Russian relations, Russia has stated publicly the will continue to trade with Iran, meaning they will back them, if the UN, lead by the US impose stricter sanctions against Iran.

Now these situations are fluid to some extent, especially between cautious friends such as US-Russia and most of the controversial moves taken by Iran & North Korea would likely have happened to test any new US President’s resolve.

The issue is that by glossing over the realities we end up believing in myths.  Think about all that talk about “unilateral” action as if it’s a huge negative due to the controversy surrounding the last semi-unilateral decision to be made, without understanding that this is exactly as we should expect it.

No country should do something the US requests if they know in the end the analysis states otherwise.  On the international stage, Europeans, Cechs, Persians, Africians, indeed every person deserves the same representation we deserve – for their representatives to look out for their interests.

Now this can and does lead to all kinds of international policies from all different governments that appear wrong or unseemly when in truth it’s a playing field for which no one actor controls the rules which leads to countries making decisions that seem antithetical to their stated morals or goals.

It also allows one country to look at another as particularly egregious, regardless of their country’s current international policies.   It should be obvious that while beating up on your own politicians on domestic policy makes sense, doing so on the international stage is just beating yourself up.  Even if well-deserved, it’s easier to beat up on other country’s policies than it is to self reflect.

In some ways, national feeling probably affects this as well.  When most countries populations have enough information to dislike a number of other countries, going against that grain can be seen as being unpatriotic.  You certainly wouldn’t see a major political figure like Tony Blair coming to the US to air Britain’s dirty laundry or Putin to do the same in the US against Russia.

It also allows for journalists to paint country X with any brush they choose.  This helps some countries as the press will like some allies, but can obviously hurts or diminish countries for which popular sentiment doesn’t exist.

In the end, what it does is allow for a type of international superiority by enhancing nationalistic feelings.  When only reviewing other countries’ by hand picking policies, self-selecting cultural attributes, last recent controversy, crazy politicians, one can get the opinion of their general greatness over all those “other” people.

Lastly, and in my opinion, the most unfortunate consequence of this misinformation, is our inability to actually analyze international issues.  In between these simplistic news stories real trade-offs on the international stage are being made and constantly simplified.  From a high-level view the policy might appear to be utterly wrong, but in reality  might not be so.  It might simply be the least bad of all the bad options.  & it might really be the policy itself which is wrong.

For real analysis however, historical context, actions taken versus realistic options available, trends, and a number of other data points are required.  Without honest sourced information cost/benefit analysis simply isn’t possible.

Since the Cap & Trade bill is getting hammered from quite a few angles throughout the halls of Congress, recent news has started pushing the much fated plan for Health Care.

They do this, by first admitting the need to increase the insured, the move to hyping the number of uninsured individuals, and finally discuss plans on how to insure them.

For serious thought – Cato and others have noted that the system itself is creating our current problems and by expanding the current system, we will only expand those problems(here):

A free-market approach would move away from employer-provided insurance and increase competition among both insurers and health providers.

Going further of course, they try to give some reasons the system operates as it does:

There are two key components to any free-market healthcare reform. First, we need to move away from a system dominated by employer-provided health insurance and instead make health insurance personal and portable, controlled by the individual rather than government or an employer.

Employment-based insurance hides much of the true cost of healthcare to consumers, thereby encouraging overconsumption. It also limits consumer choice, because employers get the final say in what type of insurance a worker will receive. It means that people who don’t receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured.

Changing from employer-provided to individually purchased insurance requires changing the tax treatment of health insurance. The current system excludes the value of employer-provided insurance from a worker’s taxable income. However, a worker purchasing health insurance on his own must do so with after-tax dollars. This provides a significant financial reward for those who have employer-provided insurance. That should be reversed….

Not to be locked out, John Stossel just wrote a piece over at Reason giving the reader very colorful examples of how the current insurance system has actually done more harm to having efficient and cost effective medical care than any other piece of legislation on health care (here)

…Insurance, whether private or a government Ponzi scheme like Medicare, means third parties pay the bills. When someone else pays, costs always go up.

Imagine if you had grocery insurance. You wouldn’t care how much food cost. Why shop around? If someone else were paying 80 percent, you’d buy the most expensive cuts of meat. Prices would skyrocket.

That’s what health insurance does to medical care. Patients rarely even ask what anything costs. Doctors often don’t know. Often nobody even gives a damn. Patients rarely ask, “Is that MRI really necessary? Is there a cheaper place?” We consume without thinking.

By contrast, in areas of medicine where most patients pay their own way, service gets better, while prices fall.

Take plastic surgery and Lasik eye surgery: Because patients shop around and compare prices, doctors work hard to win their business. They often give customers their cell-phone numbers. Service keeps increasing, but prices don’t. “In every other field of medicine, the price is going up faster than consumer prices in general,” says John Goodman of the National Center for Policy Analysis. “But the price of Lasik surgery, on average, has gone down by 30 percent.”

And honestly, I encourage everyone to read what they can, because this is the very beginning.  Through an extensive societal system, we limit the number of doctors graduating each year.  We, by law, force doctors to do certain procedures lesser trained individuals might be able to do for my less money.  If you recall, 10 years ago, a fully registered nurse (RN) had to draw blood.  Now, it’s a 6 week course and they’re called phlebotomy techs.

So yes, Mr. Obama: I and millions think our health care is pretty good, but could use some changes.  We just don’t think the government has proven to be more inefficient in any endeavor when compared to a private company has in that same endeavor (excluding government allowed monopolies).

The only real question – is why are we looking for several trillion dollars, which will be pushed into all these different feel good remedies, most of which will show no measurable improvement?

And therein lies the selectorate theory, which basically reads that heads of states and other major players got to their positions of power through a winning coalition of others and those are the people they will be the first to covet.

As for those people that didn’t vote for Mr. Obama, and are therefore not in the winning coalition, well, they’ll get hurt.  It’s just too bad that my daughter someday will feel the pain from not being apart of that winning coalition, even though she was completely unable to vote.

In Florida, we apparently have a normal, well adjusted, dog-loving teenager with a distaste for all things cat.

As reported in the Miami Hearld:

The teenager accused of mutilating more than a dozen cats in South Miami-Dade was not the reserved yet rabid killer some expected. He was a dog-loving class clown, a swim class instructor, an 18-year-old who grew up before the eyes of the four-legged victims’ families.

He appeared to be appalled by the horrific killings, and joined the Facebook group “Catch the Cat Killer!”…

I wonder what PETA will have to say about this?

There’s an article well worth reading at the Economist discussing the Obama’s administration flagrant dismissal of current bankruptcy laws (here).

…Bankruptcies involve dividing a shrunken pie. But not all claims are equal: some lenders provide cheaper funds to firms in return for a more secure claim over the assets should things go wrong. They rank above other stakeholders, including shareholders and employees. This principle is now being trashed…

..The Treasury has also put a gun to the heads of GM’s lenders. Unsecured creditors owed about $27 billion are being asked to accept a recovery rate of 5 cents, says Barclays Capital, whereas the health-care trust, which ranks equal to them, gets 50 cents as well as a big stake in the restructured firm. If creditors refuse to co-operate, the government will probably seek to squash them using the same fast-track legal process…

Since Obama, and his proponents, call him a Constitutional scholar I assume it would be nothing new to him to understand how in our history bankruptcy laws came to be.

During the time of the founding fathers, they left an oppressive country to find freedom.  One of the key pieces of oppression they wanted to stamp out in the New World was debtor’s prison and debt inheritance; where one bad decision could affect generations of family members.

They learned by the errors of the Old Country, that not only did the old way overly favor the creditors, but it also slowed down investment and innovation.

It’s pretty easy and intuitive to understand why this would be.  Anyone taking a loan today to start a new business knows the worst possible result will be bad credit for a limited time and potential seizure of assets to pay back creditors.  This is obviously a lot less intimidating for entrepreneurs than the potential consequences in the Old Country freeing up more people to push for more success.

Creditors also know how to manage their risk based upon the current laws.  For instance, secured creditors get first shot at monetary recover, lowering their risk, while unsecured creditors have a higher risk and are further down the line.

& all of this worked.  The brilliance is not only in how & why the laws were fashioned over time, but also the consistency to which these laws were implemented.

In our own history, many success stories of pioneers in this or that industry had all been bankrupt at one time or another.  Thomas Edison, Henry Ford, Benjamin Franklin, and many others, whose innovations we might have never have seen under old bankruptcy standards.

The founding fathers even found it so important, they codified the ability to enact uniform bankruptcy laws in  Article One, Section Eight of the United States Constitution.  While they did still hold to debtor’s prison for a little while, it was stamped out completely in mid 1800′s. (though today for various debts you can still be jailed, such as debts acquired through fraud or failing to pay child support)

Now we have POTUS playing politics with the rule of law.  Ensuring money goes to unions before secured creditors, the same unions who are using that money to buy up assets of the companies they helped to bankrupt.

As has been a constant refrain of mine in this blog over the past few weeks (or is it 100 days?), when the ends justify the means, where does one stop.

In an effort at thought control, many organizations these days use speech codes to cloak their true ambitions and the world of US Colleges is no different.

As reported by FIRE (articles here, here, and here), colleges everywhere & the NCAA believe without question they are entitled to police not only campus speech, but student speech on Facebook and in other public venues as well.

According to the actions of several universities, the mere act of one student placing text someplace that might offend another student, is grounds for disciplinary action.  & apparently, this is also regardless of any potential facts.

@ The University of Chicago:

…On January 19, 2009, University of Chicago student Andrew Thompson posted a photograph “album” on his personal Facebook page. The title of the album was “[Name of ex-girlfriend] cheated on me, and you’re next!” Some of the photographs in the album were of Thompson’s ex-girlfriend, and dozens of the photographs were not. On January 19 and 20, a number of people other than Thompson posted comments about the allegation of cheating. One person wrote, “Seriously though, what a f***ing whore” (language redacted).

On January 20 at about 9:00 a.m., Thompson’s ex-girlfriend sent Susan Art, Dean of Students in the College, an e-mail claiming that the album’s title and the third-party comments on the title constituted “libel.” The woman stated that Thompson had refused to change the title of the album upon her request and asked Art “if this could be removed quietly and quickly from the internet.”

At 2:00 p.m., Art e-mailed Thompson, revealing the entire content of the ex-girlfriend’s e-mail, and demanded the censorship of Thompson’s album:

[Name of ex-girlfriend] has brought to my attention that you have posted her name on [F]acebook and that this has drawn some critical comments from others.  I am writing to ask you to remove her name and remove the pictures you have posted of her.  We have an expectation that members of the University community treat each other “with dignity and respect.”  This kind of post is disrespectful.  I know you think it is a joke, but it is very upsetting to her.

Can you let me know when her name and her pictures are removed from your [F]acebook page?

I expect this to happen right away.

Very shortly afterward, Thompson complied with Art’s censorship demands, but he resisted the idea that a University of Chicago dean could censor his protected speech. On January 21, he asked her by e-mail, “Can the university really regulate internet speech?  I did not say anything subjective or false, so I don’t see how I can be forced to do this…”

In a very troubling response e-mailed to Thompson later that day, Art essentially declared that the university’s Student Manual [of] University Policies and Regulations permits censorship of “disrespectful” speech:

Every member of the University – student, faculty, and staff – makes a commitment to strive for personal and academic integrity; to treat others with dignity and respect; to honor the rights and property of others; to take responsibility for individual and group behavior; and to act as a responsible citizen in a free academic community and in the larger society. Any student conduct, on or off campus, of individuals or groups, that threatens or violates this commitment may become a matter for action within the University’s system of student discipline….

& this is not an isolated incident.  Colleges and universities all over have speech codes to regulate hurtful or offensive speech, as if kind and benevolent speech was in need of protection in the first place.

Even the beloved Professor Noam Chomsky said, “If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all.”

I think that sums up current academia policies and actions well – they don’t believe in freedom of anything, only in the control of everything.