Monday, July 30, 2012

Economic Systems

In America, we believe strongly in 'Capitalism'.  Note the quotes.  There are several versions of capitalism, and we don't discuss which one,'we' believe in.  Some of us worship a laissez faire version.  Some of us demonize 'socialism' (both real socialism, and Obama's ethical regulated capitalism),  but otherwise pretty much ignore other economic systems.

Well, let's talk a bit about the other options, and what makes them different.  Note I am not using official terms correctly here, just using simple names to make discussing the categories easier - what I call Mercantilism is not the official definition.

In general, the most common difference between economic systems that Americans discuss is government power.  Ranked from lowest to highest they would be:

  1. Anarchy.   Effectively, that's what you get with no government - or with a government that can't actually pass and enforce laws/regulations.   People can outright lie about anything - No, there's no asbestos in the house I'm selling, and the hot water boiler works great!  People only care about profi.
  2. Laissez-faire capitalism - some basic rules, but with only minimal enforcement preventing outright lies, but allowing 'sins of omission'.   If I don't tell you about the asbestos in the ceiling or that the house's boiler acts up, it's your fault for not asking.  If you ask, I can avoid answering the question and if you buy it anyway, you are out of luck.  There are a few minor concerns about ethics, but profits almost always over-ride it.
  3. Regulated capitalism.  This is pretty much what the US uses now.   Here, you have to act in good faith.  You don't have to point out the hot water boiler, but you have to mention the asbestos. Profit is still the highest motive, but ethics actually matter here.
  4. Mercantilism.  Here the government makes a lot of rules and regulations.  This will probably stifle some innovation, but prevent most ethical abuses and protecting national security (i.e. don't sell high end cryptographic software out of the country).  In effect, the government doesn't control the businesses - but permission has to be granted to do anything new.  Usually the profit motive is still there, but both ethics and national security are a close second and sometimes over-ride profit.
  5. Socialism.  Here the government doesn't just grant permission, it actively directs what many  businesses can or should.   But they don't have total control, and people can start new businesses, as long as they don't directly interfere with certain key ones the government runs and accepts profit for.   While profit still exists, it takes a back seat to issues of ethics and national importance tend to over-ride it.
  6. Communism.  Here the government acts as the business owner for all businesses.   There are no new businesses that are not controlled by the government.  Here, profit is generally not considered that important.

First, a nod to the socialized healthcare debate.  Requiring people to buy insurance is not running a business.  It isn't socialism.   It is at worst mercantilism, but most likely regulated capitalism.  See point two below.

For our purposes, the economy refers only to businesses designed to make a profit, it does not include non-profits, charities, or similar activities.   ALL governments run a certain, limited number of activities that are deemed in the national interest, without concern for profit.   The military is a prime example of this - and is probably the largest organization in the US that is run by the government.  If you work in the military, you basically live in a socialist country.  The government provides clothing, food, housing, healthcare, etc.

So when a government runs an organization to make a profit for the government, that's sociailsm.  The key word there is PROFIT.  If the government is not trying to make a profit, then it's not socialism.   Medicare, Medicare and Social Security, are therefore not socialism.   Truly Communist organizations are designed to make a profit.  They may talk about other things, but if all activities are non-profit, that each transaction loses value, and you very quickly end up with nothing.   By very quickly I mean ithin one year.   When Communism at least tries to make a profit, it can last for decades.   Note, it usually FAILS - because communism is so bad at making profits.  But it can succeed at very small scales (anything less than 1,000 people or so), for centuries - particularly if it doesn't have much competition.

Note, all of these are on a scale of how much the government controls the economy.  It's on a scale from zero government control to total government control.   But that is NOT the only difference between economic systems.    There are all sorts of weird economic theories that have been tried.   Citizens have no economic power, but corporations have them.  You could take away the bankruptcy protection offered by incorporation.    You could make rulings that each corporation must pick one of several religions and abide by it's teaching.

But we don't talk about any of these strange ideas, because none of them are worth discussing.   They simply don't work very well.  They tend to create less profit, less ethics, and less national secuirty over-all.  Any minute gains in one area end up costing a huge amount in the other two.

There are really just three potential goals for any economy.   Profit, ethics, and national security.  (Ethics and national security can be considered two sides of the same coin, but governments can also act unethically to enforce national security.)  Most of what Americans talk about is where on the power scale the government acts,  because that is the most powerful, proven tool to address those three goals.

In anarchy, they are in business, with no government control, and that means they are competing with other businessmen.   Even if they themselves are ethical and patriotic, they are competing with people that are not.  With very few exceptions (monopolies) , they will be driven out of business if they try to maintain ethics and patriotism.   As such, at level 1 of government interest, profit quickly ends up as the only goal, while ethics and national security are almost entirely ignored.

Similarly, with Communism, national security becomes the all abiding goal, and both profit and ethics end up being ignored almost entirely (although some corrupt government employees start focusing on profit to the exclusion of national security and ethics).  Even minute issues of national security - such as the popularity of the leader and/or economic system over-ride interests of huge profitability or ethics.

Regulated capitalism and Mercantilism both are where ethics rule.  In the middle, with government not powerful enough to stomp on minor issues of national pride, it is still strong enough to stop the big ethical problems - which include any issues of real national security.   Mercantilism has slightly less unethical actions, but also slightly less profits.   Here, government has enough control to stop almost all egregious bad actions - including both activities that impair national security and those that effectively cheat citizens.     Regulated capitalism has higher profits, but runs certain national security risks (greater import/export can lose key businesses to foreign corporations, as well as industrial secrets), and makes it a bit easier to cheat citizens.

Socialism has significantly less profits, about the same ethics as Mercantilism (less evil actions caused by the desire for profit, but more motivated by governmental interests).  Laissez-faire capitalism has significantly less ethics, but has huge profitability gains.  Mainly because most people, even unpatriotic ones, don't want to mess with national security.  But it is a lot easier to make a significant profit if you don't care about cheating people.  Which means the most successful businessmen all end up being unethical in a true laissez-faire system.  In a regulated capitalism, it is possible (but not guaranteed) for ethical businessmen to triumph over their less ethical ones.

Why does this happen?   It's not just that people that go into government care more about national security and ethics than people that go into business.  Another major factor is SCALE and risk taking.

Government only has a certain number of employees.  As population doubles, the number of employees goes up by less than a doubling, for several reasons   A city has one mayor, no matter how many citizens, for example.  Also, in the less government economies, the government wants to encourage more business, so pretty much ANYONE can start a corporation.    Moreover, if the government employees fails badly enough, he get's fired (or loses some power).  If the businessman fails, he starts over.  Several very successful businessmen failed in their first attempts.  They kept trying, sometimes declaring bankruptcy multiple times, until they got it right.

In addition, the government is fairly hierarchical, and therefore slow to respond.  Small businesses usually start with a flat hierarchy, and can try to stay that way as they grow.

Net result, businesses can try 1,000 ideas during the same time that government tries three.   Two thirds of both will fail.  That leaves 333 successful business and one successful government program, one cancelled program, and one limping along.   Of course, some of those 333 will be unethical, and perhaps even traitorous.

Private industry has the advantage of numbers, as well as a clearer goal (profit).

The trick is to find a level of government regulation that has a good trade off of national security, ethics, and profit.  We saw what happened under Clinton - no recession, no major business ethics scandals.  Instead the GOP mainly talked about sex.  Obama has not had a great recovery - but it is a recovery rather than a deepening of the recession.    It may be a job-less recovery, but it is a recovery.

Compare with the Republican record.  Huge scandals about business ethics.  Enron.   Housing market disaster.  The liberals are willing to sacrifice some profits to ensure that that kind of crap doesn't happen.  The fact that it DOES happen is pretty good proof they have not gone too far.

Thursday, July 26, 2012

Here's your explanation.

A conservative has asked people to explain why over 40% of Americans still believe in Obama.

You can read her blog here.

I feel she deserves an answer.  I will strive to be polite as I can.

1) She wants to understand why he speaks in short phrases  First of all, I understand why you cringe - it sounds like he is trying to talk to fools.   He talks in short phrases because because that's what all political advisers say to do.  Conservatives, Republicans, and other liberals do it to - he just does it better.

It's a technique to deal with the media so all politicians do it.  You have perhaps heard the phrase "Drill Baby, Drill."   Also "Read my lips, no new taxes." and  "Tear down this wall." On the liberal side, there was "I feel your pain."  The idea is not that you are too dumb to understand - but to explain something quickly enough to get broadcast by the news media.  They want sound bites and can't put up long, intelligent answers.

All politicians do it, including Romney and all the other failed Republican nominees - remember "Nine Nine nine?"

But he doesn't truly speak like that all the time.  Not among his friends, and not even in most politial speeches.  His state of the Union was full of many long sentences.  But you probably don't listen to his full speeches.  All you catch are the short sound bites on the news, and have foolishly believed you know what he sounds like.  If you do listen to his speeches, then you simply ignore the parts you don't agree with and only remember the short, pithy phrases.   It's a common problem - everyone tends to either forget or ignore good points made by their opponents, but remember the bad ones.

2) You are correct (and every single person in the US agrees with you) that his skin color would not end bigotry.  Liberals totally agree with that statement.   We never disagreed with that. There are still bigots in the world.  They still exist - and that means they still talk.  And their words are inflammatory - so it gets on the news.  Can you name one?  I'll give you a hint- because they hate black men, they don't like Obama.   So they say bad things about him.   If you can't name a single bigot that has said bad things about Obama that doesn't mean you haven't heard them - it means you failed to recognize that they are bigots.  You've heard their words and accepted them as an ally.   It is real easy to recognize a bigot if he is saying things you disagree with, but it is much harder to recognize him if he is agreeing with you.

Liberals like Obama's skin color in part because it proves to ourselves we are not bigots.   It's not why we vote for him - we would never vote for Cain.  But we are proud of electing the first black president.  We also recognize that there are some people in the world that will never vote for a black president - not Obama, not Herman Cain. Those people do exist and ARE participating in the election, working to help Romney defeat Obama.  They are your allies.  If you don't know who they are, well, perhaps you need to take another look at your allies.

3)  Liberals don't think being a Christian man with a deep faith in God matters when we pick our president.  This country has freedom of religion. There is no requirement, expectation or even a benefit that the President be Christian.   Just as a black man is allowed to be President, so is a Jewish man.  We even believe that an ATHIEST can be a good president.    But that really doesn't matter because...

Obama went to church for most of his life.  He had to leave a chuch because his pastor cared more about politics than religion.  You clearly have fallen for the lies that say he is a Muslim - or at least not a good christian.  We consider this to be outright political lies told by conservatives.   Most Liberals believe  President Obama is a good christian with a deep faith in god.   Yes, his father was muslim.  His mother was christian.  You do know that Jesus himself had a jewish mother?  We believe there is no real evidence whatsoever that Obama is anything but a good christian.

Maybe we are wrong.  Did you personally see or hear him say otherwise?  Have you seen or heard him break any of the ten commandments?  Or are you believing rumors spread by other people?  Keep in mind that even excluding the bigots, politicians spread lies about each other. I've heard liberals say that false things about Romney, and you need to recognize that conservatives have spread false things about Obama.  Making up lies about religion is easy to do.  But if some liar says you only prayed EVERY SINGLE WEEKEND as part of a con job, then there's not much you can do to disprove something that ridiculous. 

4)  Why do we still approve of this president?  Because we compare him to the last one.  Compared to George W Bush, Obama is fantastic.   Bush destroyed Bill Clinton's phenomenal economy and got us into two very expensive long drawn out wars, failed to win either of the wars, cut taxes while trying pay for those expensive wars.  

In that same time, Obama has given us healthcare - yes, based on a republican health care plan - but no other president since Nixon has done that.  Then he killed Osama Bin Laden.   He did a whole bunch of other good stuff - all of which you refuse to give him credit for or believe they are bad  when we think they are good.  Yes Obama may have finished off jobs that Bush started - but Bush had 8 years to finish and failed to do that.  We like the direction Obama has been leading us - better healthcare, less wars. No he's not perfect, but he's doing a reasonably good job - mainly because he is doing the things we want him to do.  You may dislike them, but elections have consequences and WE WON the last one.

5)   We don't demand document on Obama's life prior to 2008 because he has already supplied it to us.  We have seen the evidence - from birth certificates to books he wrote, to senate records, to his history as a college professor.   Yes, I understand you disbelieve our evidence and have your own stuff.  We look at yours and think "this stuff is junk'.   It's exactly the kind of thing that partisan politicians would spread - even if none of them are bigots.

We don't want ten years of Obama's tax records because he never told the SEC that he was doing one thing, while claiming to us that he wasn't.  He never 'retroactively retired'.  When we catch someone trying to pull obviously false claims, we demand proof.  Romeny is a man that constantly flip-flops (check his abortion record), so when he makes a claim, we demand he prove it.

6)  As for golf, campaigning, and photo ops we don't think they take priority on the president's agenda.  At least not more than any other presidential campaign.  We remember George Bush standing behind a "Mission Accomplished" banner.  We know what is unusual activity and none of the junk you talk about is different than any other president.  Every single president in history has gone golfing, campaigned, taken photo ops.  Obama has not done that more than other presidents. 

7)   You have never been so angry in your life - that's mainly because your side has lost.    I have news for you:  The anger that you feel now?   It is exactly the same way most liberals felt when George Bush was in power.   We could not believe the lies and outright evil actions he got away with.  Members of his government committed treason and exposed CIA agents (at least Libby went to jail for that - oh wait, President Bush commuted his sentence so the traitor did not spend a day in prison despite being convicted of perjury). Members of his government illegally hired and fired DOJ lawyers based on political beliefs (Monica Goodling received immunity in exchange for testifying).

Feeling so angry is not a symptom of the country 'going the wrong way', but a symptom of you personally disagreeing with how the majority of Americans think.  I know it hurts to find out that so many people think you are wrong.  We felt the same way while you do when you were getting your way and trampling on our constitutional rights.

8) How did a small minority of gays convince the president to accept gay marriage?   Very simply - those gays went out and told their stories.  People heard them and said "HOLY CRAP! are we really being so evil?"  They told stories of how gays were forbidden from adopting children.  How gays were forbidden from being at the bedside of their loved ones when they were dying of cancer.   How their long term companions of ten years were kicked out of the country because they weren't married.   How they were kicked out of the military.  How their loved ones died because their employer would not give them health insurance.  How they were willing to pay MORE in taxes (marriage penalty), to get these rights but were rejected.

The gays convinced us that they are good people being mistreated by prejudiced.  That's how 5% of gays convinced all the liberals to demand the president grant them marriage rights.  They told us a tale, we looked into it and found it to be true.  In response, the conservatives responded with references to the bible (not relevant for politics), and unsubstantiated lies about how evil the gays were.

9)  You think the liberal population of NYC cancels out all the conservative votes.  Well that's not true.   We don't.  The liberals of the entire country cancelled out the conservatives.   Obama won in 2008 because of:  Hawaii, Washington State, Oregon, California, Nevada, Colorado, New Mexico, Florida, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan, Ohio, North Carolina, Virgina, Pennsylvania, New York, Maine, Vermont, New Hampshire, Massachusets, Connecticut, Rhode Island, New Jersey, Delaware, Maryland, and Washington DC.  Or, if you prefer, 28 out of 50 states - plus he got half of Nebraska's proportional votes. 28 1/2 vs 21 and 1/2 states.

He didn't just get NYC he got the majority of voting American citizens.    Specifically, he got the entire west coast, the entire north east, the entire great lakes area.  Plus Florida, Colorado, New Mexico, and Iowa.  He got 69.5 million votes as compared to a 59.9 million votes, that's about 54% - or a ration of almost 7 of us to 6 of you.

That is a majority - in both the population votes and the electoral college.  

 More importantly, most states were not blow outs.  That is - even in a solid Republican state like Texas where Obama lost in 2008, Obama still got 43.6% of the vote.

We are not all in New York, we are spread out all over the country.  We live right next to you.  Your neighbors voted for us. The checkout guy at your grocery store?  He voted for us.   Your own children?  They voted for us.
The majority of this country thinks you are outright wrong.  Not about just a few things, but about most political idea you have.   More importantly, we not only disagree with your conclusions and facts, but we find the facts you think are important are relatively worthless.  We think you are picking a car based on how flashy it is, rather than horsepower and price.

Tuesday, July 24, 2012

Sometimes government gets it wrong.

I love to talk about how the federal government is more competent and less corrupt than state governments.  But they are not perfect.  Right now there is a very interesting legal case.

An artist by the name of Robert Raushenberg created a piece of art entitled "Canyon", that includes a stuffed bald eagle.  It is therefore a felony to try and sell it (bald eagle feathers,  The art dealer that owned the piece died, and it was inherited by her children.   The only reason they can hold it is because of an agreement with the United States Fish and Wild Life Service, and as a condition it states the piece must be on long term loan to the Metropolitan Museum of Art - which does ensure it (but that value is 'confidential')

Keep in mind that while the heirs technically 'own' it, that is just a technicality.  They can't sell it, keep it in their home, or even MOVE it to a different museum.

Since it can't be sold, (and they can't keep it or even move it)  their accountant valued it as $0  (three different appraisers did that).  The IRS said it is worth $65 million and is demanding $29.2 million taxers.  Note that this is in addition to the $471 million in estate taxes they already paid.  The $29.2 million includes penalty tax rates.  In addition, they will owe an extra $11.7 million in penalties, for a total tax of $40.9 million dollars.

Given the fact that the MET ensures it, you would think it would be possible to price.   However, the IRS has been incompetent - they originally valued it at $15 million, but upped the price.

The $15 million value was based "solely on artistic value', without reference to the laws, despite the fact that the IRS's official policy is to take account of the laws, which should of course LOWER the price - as it makes it harder to sell.   For example, some machine guns are legal to buy in the US without expensive permits and licenses because they were grandfathered in, before the ban on machine guns.   They sell for FAR more than similar guns that are illegal to buy without said permits.

The  IRS however got the $65 million figure by assuming the item would be sold on the black market.

Both sides have acted in bad faith - the IRS is being just as stupid as the heirs.

The really stupid thing is the eagle can easily be separated from the rest of the artwork.
This is how I what I would do.

First, state I am judge and the law is all about technicalities, not justice.  If I declare something is not a sale, then it's not a sale - even if it looks like a sale.  Then give both parties an ultimatum.  Have the IRS state an amount of money that they think it is worth.   Then give the heirs a choice.
  1. Pay taxes on that value - without penalties of any kind (don't punish them for making a fairly reasonable decision, especially when the IRS is being a moron.)
  2. Donate the eagle and only the eagle to the IRS, and accept the IRS's offer (the same one the IRS wanted them to pay taxes on) as a legal sale of the rest of the artwork to the IRS.  Subtract out the tax bill for that value.   As a judge, he can declare that it is not a sale of the eagle, even if it looks like a sale.   Declare it to be a sale of the non-eagle bits, and the eagle is being donated with a states valued of $100.  If the IRS chooses to keep their two separate pieces of property together, as per the original art, that's their business.
  3. If the IRS refuses to pay the money,  then the judge declares the bird the property of the Smithsonian, on condition that the Smithosian loan it out to any museum that purchases the rest of the art.  Declare the eagle worth $100, while the heirs keep the rest of the art and put it up for bid.  Also, throw the IRS representatives that priced it but refused to buy it (excuse me, refused to buy the non-eagle portion of the art) at that price in jail for contempt of court.
It's a relatively simple, fair, technically legal way to end the issue.   Note it's not the only one.

The judge could tell the heirs that if they want to donate it to a museum of their choice, that he would be willing to declare it worth $100, and have them pay taxes on that money.  If the judge is being a smartaleck, he could even have them pay the penalty tax rates on that $100.

Usually it makes far more sense to settle an issue out of court.  With the right judge, and a bit of creative thinking, you can solve most issues - as long as both parties are willing to negotiate IN GOOD FAITH.

Monday, July 23, 2012

How to Make a Loss Look Like a Win.

This is a very simple technique.   It has two specific requirements:

  1. A range of opinions for both your own side and your opponent side.
  2. The loss can't be 100% loss - you need to have at least a minor win.

You then just ignore your own side's radical opinions, claim your side just wanted the minimum win.   Of course, you make the opposite claim for your opponent - they all wanted the most radical of goals.

For example, supposed on one side you have a bunch of Neo-Nazi fascists, the most radical ones want to kill all Jews, most simply want to deport all Jews, but all of them don't want the Jews to take over their country.    On the other side, are a bunch of Liberals that, all of whom despise the Neo Nazi murderous and deportative beliefs, who want to accept Jews into this country, but do have a small, radical group the want the country to set aside a few congressional seats just for Jews, to ensure they get some representation.

There is some kind of contest - a court case, or a legislative battle, it doesn't really matter.  The liberals mostly win, and the law is declared to prevent the murder or deportation of Jews, and even allowing Jewish immigration, but do lose the congressional seats set aside just for Jews.

Here is how you Pretend you Won.

  1. Ignore your own extremists.  Pretend that no serious person wanted to kill the Jews or deport them.  Why those were just a few extremists radicals, it's not like anyone important felt that way.  (as all your friends cry and complain in the back ground about not being able to kill or deport Jews).
  2. As you ignore your own side's extremists, pretend that the majority of your opponent was in the extremist camp and that it was their main point.   Look, all those Liberals wanted the congressional seats set aside for Jews and we stopped them.
  3. Declare Victory and convince everyone that the moderate view that won was your side's real agenda.

Now, this technique has a secret - it is a great way to tell if you yourself have chosen the wrong side.    How to tell when you are in fact the bad guys, despite thinking you are the good guys.

See, not everyone that does this technique is an evil mastermind.  There are in fact always people that were blind about their own extremists and never realized that they were only paying attention to their opponent's extremists.  In Nazi Germany most people were SHOCKED to find out that the Nazi's were killing Jews.   Once they saw the evidence they realized their mistake.   Yeah, they had heard a few extremists, but they thought the extremists were either making jokes (aka Rush Limbaugh) or not in control.

But you see, you don't need to wait for the concentration camps to be uncovered.  If you think you won a victory, and are shocked at how all your associates think it is a loss, you need to understand something:  that means your associates do NOT have the same beliefs that you do.   In fact, they were simply pretending to be moderates, when in fact they were the extremists.

If you are a conservative that thinks the Supreme Court Ruling on Obamacare is a win, it means you despise the GOP's opinion on healthcare.

Yes there are quite a few conservatives claiming that the John Roberts ruling was a conservative win. They say things like "we now have a popular up-swell of support" and "we beat the commerce clause", and "we made it a tax",  "we struck down the punitive rules", and my personal favorite "got the liberals to like Justice Roberts".

Then they wonder why other conservatives are so happy.  The reason is simple.  This was never about those things, it was about destroying a President's legacy, and it has failed.  Most conservatives, despite CLAIMING they want those things, never really did.  They were against Obamacare for one reason and one reason only - it was an effective new liberal program that people are going to fall in love with once they see it working (just like we fell in love with Social Security and Medicare).   The GOP's only chance to stop it was to lie about what it did, and then convince people to kill it before it gets implemented as the lie gets revealed.

The truth is that 'active support' has never really been a problem for the GOP, the commerce clause was NEVER a key part of the liberal ideology (despite conservatives pretending it was), the tax argument is meaningless.  Liberals never talked about it, conservatives did.  The punitive rules is a minor loss, but we can recover from it.   As for 'getting the liberals to like Justice Roberts", we already did.   He has been moderating the radicals (Scalia) ever since he got in power.   As compared to other conservative judges he is a far more intelligent and wiser judge.   If he continues as he has been doing before, we will continue to like him.  If he becomes more Scalia like, we will abandon him.  Frankly, our likes and dislikes about Supreme Court Judges are not important.   If you think getting liberals to like a conservative judge is a goal, then go ahead, spend money on it.   It won't gain you anything - anymore than getting Liberals to like Kennedy did.

So once again - if you are wondering why your party is not celebrating what you thought was a win, it means your party doesn't believe what you believe.   You are allying yourselves with a bunch of extremists that want do things that horrify you.

Friday, July 20, 2012

Left states vs Right States

Every once in a while, people like to compare the left states with the right states.   The problem is that most states, are not very partisan.  Even California, which the far right likes to make fun of, has large pockets of conservatives.

I don't like those comparisons for two reasons.  First, most states are not really Republican or Democrat.   Most are in the middle.  Even states that are 'in the bag' for one party, has a strong loyal opposition that affects local government.   Second, they tend to confuse correlation with cause.  Often what they think is the cause is actually the effect.

But lets try to avoid those problems.   So, which states are the most extreme?

Here are a list of 5 states that McCain won by at least 60% and also have two Republican Senators (data from 2008 election,Medium Household Income by state Unemployment numbers, Forbes Debt Ratings)

  • Alabama :  $40,489 Medium Household Income, unemployment 7.4%, 3 star debt rating
  • Idaho :   $44,926 Medium Household Income, unemployment 7.8%,  3 star debt rating
  • Oklahoma:  $41,664 Medium Household Income, unemployment 4.8%, 2 star debt rating
  • Utah: $55,117 Medium Household Income, unemployment 6.0%, 4 star debt rating
  • Wyoming  $52,664 Medium Household Income, unemployment 5.2%, 3 star debt rating

They represent what an actual far right America would be like.

The comparative lists of 6 states that Obama won by at least 60% and also had two Democrat Senators is:

  • Delaware: $56,860 Medium Household Income, unemployment 6.8%, 2 star debt rating
  • Hawaii: $64,098 Medium Household Income, unemployment 6.3%, 2 star debt rating
  • Illinois: $54,966 Medium Household Income, unemployment 8.6%, 1 star debt rating
  • Maryland: $69,272 Medium Household Income, unemployment 6.8%, 3 star debt rating
  • Massachusetts: $64,081 Medium Household Income,unemployment 6%, 1 star debt rating
  • New York: unemployment  $54,659 Medium Household Income, 8.6%, 1 star debt rating

They represent what an actual far left America would be like.   The differences are fairly obvious.  Much higher personal income, slightly more unemployment, but the states are (currently) in significanlty worse financial shape.  But keep in mind we are are still recovering from a particularly bad recession.  

Note that with possible exception of Utah, the conservative states make less money.  The conservatives states have some advantage in unemployment, but that is not as clear (no, you can't just average the numbers, at least not without weighting for population).  Similarly, the liberal states are in worse position when it comes to state debt (with the exception of Oklahoma that has bad debt AND low income, although they have managed to keep unemployment down).  But remember, don't confuse correlation with causation - it could very well be the opposite of what you think.

By that I mean it is just as likely that the politics is a result of the situation as it is that the politics caused the situation.    For example, liberal governments might incur great debt while creating a business friendly environment that makes some people very wealthy and others out of work.  But it is JUST as likely that if you live in a state with lots of wealth, lots of poor people, and lots of state debt,  you start electing liberals to government.   Honestly, it's probably a bit of both  (aka a self-supporting cycle).

I think what's going is is rather simple. Conservatives play it safe.  They don't take chances.   That's the heart of what the word conservative means.   As a result, they end up with lower profits and lower salaries, but in a recession are less likely to lose their jobs.   They start safe businesses, and don't hire people unless their business is already suffering from not enough workers - which of course holds back their business growth.

In government, they don't invest as much money in social programs.  Which means in good times they don't create centers of commerce (with highly educated, healthy citizens - with good roads, public utilities, etc.) where business can easily flourish, but they also don't rack up the debt.  When times are good, they get along OK, but when times are bad, they don't have to deal with excessive debt.

I personally would prefer to be a risk taker.  I believe in capitalism, and can deal with higher debt, higher unemployment, as long as we reap the rewards of investing in our population.  In other words, I am a liberal.

Wednesday, July 18, 2012

Real socialism

Conservatives love to name call.  Most recently they are using the word socialism as an insult.  The problem is they have no idea what real socialism is.

To be honest, I don't have the best feel for what real socialism is like.   You see, I have never lived under the soul-searing, random-acts-of-evil, dictatorial, system called socialism - and neither have most conservatives.

But I can listen to people that do.  People like Milks Forman, who lived under Czechoslovakia's iron boot ( (article).   People like Ayn Rand, whose book Atlas Shrugged gives a pretty good description of a real socialist country (but it has no knowledge whatsoever about what a real capitalistic country looks like) 

And none of them are moronic enough to think Obama, the Democrats, or any liberal politician (with the possible exception of Senator Bernie Sanders of Vermont) is a socialist.

Hallmarks of socialism are:

  1. Government forcing people to buy/use SPECIFIC products, not general classes of product. (That is, requiring people to buy this particular brand of food, car, etc.)
  2. Government using reasons besides health to require the purchase of a general class of product.  (All governments require people to buy brakes on their car, wear hard hats in dangerous places, etc. etc. - and yes, etc. includes health insurance).
  3. Government preventing people from doing harmless, safe work without restrictive license.  Examples include limited number of taxi licenses, any license for cosmetic/hairdressing jobs, any license for massage, etc.   (Note, many local governments - particularly republican ones - do this even in part of capitalism.   They generally don't know they are being socialist when they do so - but they are.)
  4. People are afraid of talking poorly about the government.  If you aren't afraid to talk about how horrible the government is, then you are not in a socialist country.  If anyone can go on even local TV or local radio and badmouth a sitting president, it's not a socialist country. 
Real socialism doesn't work, anymore than fascism works.   The problem is we beat fascism 70 years ago, so people have forgotten how bad the far right fascists government are.   Socialism/far left governments are less violent, so their failures tend to stick around.  (Note less violent does not mean non-violent.)

Friday, July 13, 2012

Local Vs. Federal, Licensing vs. Regulation

In past posts, I have discussed two core talking points of the GOP:  Regulations vs. Jobs and Federal vs Local.

Specifically, one post talked about Regulations costing us jobs (Regulations-vs-jobs) and two posts discussed why the the local government causes problems while the federal government solves them (We-as-liberals-need-to-eliminate-lot-of regulations and Yes-government-is-too-big ).

I recently read a great article by one of the smartest conservatives, David Frum.   Click here to read his article

Note several things about what he wrote.

  1. He talks about local regulations, not nation wide regulations.   Paris, for example has ridiculous limits on the number of taxi drivers.  That's just a city, not even a state.  Europe is for all effective purposes a single nation now, with local 'state' governments called France, Germany, etc.   None of the laws he mentions are Europe wide, and most aren't even state wide.
  2. He talks about what a REAL socialism looks like - and it is very, very different from America or anything Democrats want.   Things like direct rules on how late stores stay open.  The Democrats, including Obama have nothing at all close to that rule (but the GOP does - in the form of bible belt laws restricting the sale of alcohol).
  3. The rules he disparage are all what I called "people limiting" licensing regulations.   Limiting  the number of taxi drivers, preventing people from opening new stores without a license from the government. Limits on firing, which make you think twice about hiring.  As he said, "These are not macroeconomic issues."  They are LOCAL issues.

My point is as always: It is the local governments that screw things up  not the federal government and while some regulations are bad, most are pretty good, particularly federal level regulations.

P.S.  The solution to the Paris Taxi Driver is to give each existing driver Taxi Paris a second free license to run a taxi. They can sell the additional license or hire an employee. This solves the problem of not enough taxis in Paris and keeps the existing taxi drivers happy, instead of irritating them and make them strike.

In french:

La solution au problème de Paris Taxi Driver est de donner à chaque pilote existant Taxi Paris une deuxième licence libre de courir un taxi. Ils peuvent vendre la licence supplémentaire ou embaucher un employé. Cela résout le problème de ne pas suffisamment de taxis à Paris et garde les chauffeurs de taxi existants heureux, au lieu de les irriter et de les rendre en grève.

Wednesday, July 11, 2012

An examination of conservative thought process

Dan Mitchell, a top conservative fiscal expert, likes to use a beer tab explanation of why conservatives want to tax the poor and let the rich off scott free.  I find his explanation very misleading, to the point of fraud, but it is helpful in revealing his thought process.   (You can find his incredibly poorly thought out analogy here.)

A quick summary: ten men go to a bar, they have a $100 bar tab, and they split it up in a way similar to the current tax bill.   They get a discount 'because they are such good customers'.  Then they argue about how the discount was divided.  Eventually they beat up the rich guy, who paid over 60% of the original bill because he got about 50% of the discount.  Next time they go the bar, the rich guy doesn't show up, and they can't pay their bill.

This analogy is amazing poor for our current tax system.  It's only true importance is in describing the mindset of a conservative.  For purposes of this piece, I will pretend all conservatives think the way Dan Mitchell does.  Yes, I know that is a bit of a stretch, but in my experience his core beliefs are rather typical.

Conservatives thinks governments are a luxury, not a necessity.  Bars are luxuries, you don't need them.   Governments are a necessity, more akin to a grocery store.  That's why we have them.  No one LIKES government - not liberals or conservatives, we need it.  We do argue about what it needs to do.

Conservatives thinks that country is owned/controlled just by the conservatives, as opposed to all Americans, ignoring the liberals and the moderates.  He had the bar tender willing offer a a discount - but tax cuts are a Republican 'solution' looking for a problem.  It is NOT something Democrats are known for.   To correct the analogy, it it should be the customers demanding a discount, claiming that if they get a discount, they can buy more stuff and it will all even out.  (aka - the core GOP belief that  lower taxes rates grow the economy - higher tax income).

Conservatives refuses to admit that the wealthy are the ones in control, as opposed to the poor.   In the analogy, the rich guy isn't demanding the discount, but in real life, he is.   The top 1% don't sit back and accept what everyone else offers.  Congressmen are almost all wealthy, they give access to the wealthy and most of the money in politics comes from the wealthy.   Ignoring this fact is ridiculous.
Conservatives ignore the fact that while they are giving things to the wealthy, they are also taking from the poor.   Because the GOP doesn't just insist on tax cuts, they also want to cut services to the poor.    A better analogy would be if our wealthier patrons insist that the grocers store stop giving away water to thirsty people, claiming it is just a waste of money and they want to get all the money back in discounts, not in free sample.  Suddenly, having the wealthy guy get beat up at the end of the story makes a lot more sense if he was cutting off free water to thirsty people, just to lower his bill.    

Conservatives insists that everyone else is picking on him, during the exact same time that he is throwing punches.  Jon Stewart makes a career of throwing exact hypocritical quotes from Fox back at the people that spew filth out.  Anyone that watches the news or politics hears far more comments protecting the wealthy than the rich guy.  There is not a single comment on Fox news about how bad the wealthy people are - unless they are wealthy Democrats.   Even CNN is more likely to talk about 'job creators' than about 'robber barons'.   In reality, we aren't beating up a poor defenseless wealthy guy -  at the very least it is a fair fight, and many of us think he gets in far more low blows than we get in.

Conservatives love to 'focus the discussion', not acknowledging the counterpoint.   Effectively, it's like saying look how you don't need to spend more on your house because you just had the roof done, even though the foundation is rotten.   If his analogy was fair, the business should have a flat entree fee just to get in the door that everyone has to pay - and it's about the same amount - rich or poor.  In real life, in addition to Federal income taxes, which does tax the wealthy slightly more than the poor,  (except for the very wealthy who pay less tax than the middle class), there are a ton of state and federal taxes that affect the poor far far more than the wealthy - from FICA, sales tax, state income tax, etc.etc. etc.   Our tax system is set up to have the wealthy pay federal income tax and not much else, while the poor pay the majority of other taxes.

(Side note - You shouldn't be fixing the federal income tax first.  A prime example of this is sales tax.  High sales tax directly affects business sales.   When you have a tax holiday, sales go up.   The same can NOT be said about income tax.  Salaries are higher in states with high state income taxes, lower in states with low state income taxes.  Top 5 states with highest income per person are Connecticut, Massachusetts, New Jersey, Maryland, New York.  (average income by state)  The top 6 states with the highest income tax are: California, Hawaii, Iowa, New Jersey, New York, Rhode Island.  (income tax by state).  Note, the low end gets weird because states try to attract retirees and they don't have salaries (Florida most famously.), and we are talking about income tax affecting salaries.)

Conservatives want to kow-tow to the rich to keep them happy.   The 'moral' of his story is that if we keep unfairly requiring the rich to pay an equal share of their wealth as taxes,  then they will pick up and leave.   To that I say, FINE.  As long as we tax their wealth on the way out, I am totally OK with wealthy people deciding they don't want to be Americans.   If they go, that just will create more opportunities for new wealthy people to rise in America.

We are not a cold war communist country with a Berlin wall.  We don't need to keep people in.  If you don't like this country, leave.   If you'd rather live in a third world hell hole where the poor get no services just so that you don't have to pay taxes, then GO THERE, and leave America as it is.   Because we will be just fine without you.   But we will tax your money on the way out - you earned it here, you need to pay your fair share of taxes.   Also, don't come crying to us when the poor people overthrow your government and take your wealth.

Real Americans are Americans not because of greed or wealth, but because we believe in:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Note the total absence of reverence for money.    If you value money above and beyond Life, Liberty and the pursuit of Happiness, then we don't need you.

I would pay double taxes to stay in this country - as long as everyone else has to do the same thing.   That's a very important thing - because while that single sentence I quoted above makes no mention of money, it does state that all men are created EQUAL.

This is of course the most revealing of all - certain conservatives think money is the single most important thing in the world and the only reason anyone would ever select a country to live in.  They would give up their rights, freedoms, all to get money.  Which quite obviously demonstrates their value system.

Tuesday, July 3, 2012

My Rights vs Your Rights.

If a single person has the right to do anything they want, it's called Dictatorship.

If everybody has the right to do anything they want, it's called Anarchy.  And while in theory you have the rights, in actuality you don't, as right to do anything includes the right to take other people's rights.

The reason is simple.  The right to "do anything they want" includes the right to murder, rape, etc.

When people talk about rights, they are really talking about limits on what OTHER people's rights are.  I have the right to free speech means other people do NOT have the right to kill, imprison, banish, or punish me for saying something.  My right to privacy means other people don't have the right to find out anything they want to know about me.  My right to an attorney means other people don't have the right to try me in a court without someone that knows what to do.  My right to marry means other people don't have the right to stop me from marrying.

Once you understand this basic fact about rights, it creates a simple tests to see if someone is trying to get a reasonable right, or an unreasonable right - the test of reversal.  If the situation is reversed, would you  think it's a bad idea, or would you think it's EVIL (capitals intended.)

Once Southern racists use an 'intelligence' test, designed by whites, to prevent black voting.  It tested knowledge that most white people had but most black people did not.   If you reversed that and let black people design a test for whites, the racists would have screamed "HELL NO".

Similarly, people that don't think gays should have the right marry people of the same gender - if you asked them if marriage could be restricted to ONLY people of the same gender they would say "HELL NO".  That "HELL NO" is proof of the discrimination.  It's not "Well, we could do that, but it's a bad idea."

At heart it indicates the people demanding unfair limits on other people rights and the people demanding reasonable limits on other people's rights.

Which brings us to the elephant in the room.   Affirmative action clearly fails the test.   People should not base admission on race.  Yes, it's an easy way to identify a ton of problems.  Yes, it's a good way to fix long standing discrimination, but it philosophically no better than any other form of racism.    Be honest, liberals - do you think Herman Cain's children, or Malia Obama or Sasha Obama need or deserve any help getting into college?

We have not fixed racism, but the problem is a lot weaker than it used to be.   Few places actively reject applicants based on color.   Instead they reject them because they don't measure up to an artificial, culturally biased test.  We've can't fix the test, but we can acknowledge the problem.

The problem is not the race, it is long standing poverty - but monetary and cultural.  By cultural poverty I mean an absence of opportunities that are more commonly found in better neighborhoods.   It's not just the money.   This poverty takes perfectly capable of people and leaves them unprepared for the kinds of tests we use to bureaucratically categorize people.   We can adjust those metrics based on poverty.

I think we need to replace affirmative action with "Poverty Uplift."  That is, give people benefits not based on their race, but instead based on poverty.  Switch out 'race' for tax brackets.   If your custodial parents are in the 10% tax rate (making $17,400/year  if married, or $8,700 if single) then you get the benefit.  Give partial credit for 15% tax bracket.   If your parents are in the 25% or higher tax bracket, then you don't get the extra credit.

Be sure to look at the past five years, as opposed to the current one, to prevent inappropriate benefits.

Among other advantages, the children of black millionaires, will not get a bonus for being black.  Similarly the children of dirt poor white folk will get the same advantage.

Next question - will my idea actively counter racial bias?  Well, that's a bit hard to analyze, because the IRS does not ask for your race.

But, as 19999, the middle fifth of mean income for whites was $50,350, as compared with $14,650.    (source).

That looks to me like most of the people that benefit will be black, with a few poor, deserving white folk as well.  Yes, a bunch of middle class black people will cease to benefit - but they really don't need it as much as the few poor white folk do.

Oh, just to add some extra diversity, you could throw in a location based benefit as well.  Something along the lines of "first person from this county/country" gets a benefit as well.