Friday, April 29, 2011

"Man Will Not Merely Endure; He Will Prevail"

Faulkner's words echo strong today, as we begin to truly see the aftermath of the weather destruction in the South.

As a son of the south, my heart goes out to all those who have lost, especially those who have lost all.  The South has endured so much disaster in recent years, from flooding (Nashville), hurricanes, and now wildfires in Texas.  Yet one thing I know for sure: Southerners don't just endure; they prevail.

Give help if you can.  Even if it's small stones.

"The man who removes a mountain begins by carrying away small stones." - William Faulkner

Thursday, April 28, 2011

The Economic Way Forward...Rap Style

I think I've seen everything now.

These guys make economics look very cool.  I mean, 2 minutes into this, I forgot how much of a nerd I was for watching.

In any case, watch this.  It's 10 minutes well spent.


The first video. Just as good.

Tuesday, April 26, 2011

A Lesson on Redistribution

A link from the EconLog sent me to a blog "OvercomingBias".

Great concept found here.  A guy goes around with a petition to "redistribute" GPA scores from the "top 10%" to those who are having trouble with enough credits to graduate.  As you can see, a natural link between this and our tax structure begins to take form.

From the blog:
"Most people believe that redistributing money within a nation is good, but that redistributing GPA within a school is bad, and if asked why these should be treated differently, have little to say."

My favorite comment from a non-supporter of the GPA redistribution is "but I earned it."


And how is this different than the income you earn?  As a grad student, I do treasure my GPA, but in no way does it even come close to how important my income is.  Supporting the family is way more important than what scores I get on tests.  I would assume most rational people would think the same.

If this were true, people should value their money more....but in our learning "institutions", it seems people are more willing of redistributing their money than their grades.

Ooops.  Did I say their money?  Ah yes, I mean OTHER PEOPLE'S MONEY.

And that's the bottom line.  People who either have no dog in the fight, or are talking of redistributing something they do not own are "all for it".  But, once they have earned that unit of value, they don't want to let it go.  You know, they "earned it".  That's what our system is built on...or rather, should be built on.

As economists would say, "people respond to incentives".  And that means negative incentives, too.  If we keep punishing the people who fund our government, they will be "incentivized" to take their "units of value" elsewhere.

And then your precious GPA won't mean a thing...there won't be any jobs when you graduate.

Saturday, April 23, 2011

"Cause I'm the Taxman"

"If you drive a car, I'll tax the street,
if you try and sit, I'll tax your seat,
if you get too cold, I'll tax the heat,
if you take a walk, I'll tax your feet..."

...and, if you live in Washington State...
"if you drive an electric car, I'll tax you anyway..."

Sorry, I'm not that good at finding a rhyme.  Hot Air says it the best, so I'll use their quote.  Link here.

"Somewhere in this tale, a lesson awaits to be learned--by legislators about the laws of unintended consequences, and by taxpayers about government interventions.  The state of Washington, which has pushed its citizens to buy electric vehicles through tax breaks and public-relations efforts, not to mention a tax on gasoline that is among the highest in the country, may slap owners of electric cars with an annual fee.

'Electric vehicles put just as much wear and tear on our roads as gas vehicles,' said Democratic state Sen. Mary Margaret Haugen, the bill's lead sponsor. 'This simply ensures that they contribute their fair share to the upkeep of our roads.'

Ah, their fair share.  Perhaps that would have been less had the state legislature not set up tax breaks for people to buy those cars in the first place, nor spent money on PR campaigns to do so....

...Now taxpayers in Washington who bought the government's line about electric cars being a better deal will have to pay the state a unique penalty for complying."

Yup, the government has lost its ability to generate any new ideas other than to create new taxes.  When government intervenes, it usually does so with a very short vision.  Long term consequences are generally not thought of, and if they are, they are often disregarded for political expediency.

There are so many examples of this that the post would be too long.  But what is important to understand is this:

Government is failing to reduce spending.  It only knows how to tax, not reduce.  Secondary and tertiary effects from economic and social programs are very rarely discussed and almost never compensated for.

What should the voter do?  Do not use rational ignorance as an excuse anymore.

Thursday, April 21, 2011

Triumph of Hope Over Experience

Let's be frank.

Our economic conditions in this country are not good.  Recently, Standard and Poor (one of the three main agencies that rate the ability of companies and sovereign nations to repay their debts) lowered its outlook for America's long-term credit rating to "negative" from "stable".  The White House tried to intervene to try and sway S&P, but they were not impressed.  Later, the White House said that it was no big deal.  If it was no big deal, why try to change their mind?

What has caused this?  Well, lots.  Generally, though, when you find yourself in deep debt, it doesn't take an economist to realize that your spending has outpaced your income.

Instead of cutting back spending, the only thing that seems to come out of Washington is "let's tax more".  And who are we to tax?  Well, if you believe liberals, then we should tax the rich.  You know, the people that innovate, work hard to produce, and succeed in the market.  But here are the facts:

- The top 1% (those who make over $380,354) pay 38% of federal income tax.
- The top 5% (those who make over $159,619) pay 58% of federal income tax.
- The top 10% (those who make over $113,799) pay 70% of federal income tax.
- The top 50% (those who make over $33,048) pay 97.3 % of federal income tax
- The bottom 50% pay 2.7%.
(2008 tax year data)

So, does it look like we're not taxing the wealthy enough?  Looks to me like those who make wealth are carrying the load...completely.

People who don't pay taxes, or pay almost nothing at all, don't "have a dog in the fight".  Of course people who don't pay taxes want....more...more....MORE!  If you're not paying for it, you'd like a lot of it.  In essence, we have created a "commons" out of tax money.  Those who pay the most get the same as those who don't pay at all.  It's a miracle and testimony to how great this country is to live in that the wealthy put up with this in the first place.

So, looking at the above data, how much is enough?  30% tax rate, 40, about 100% tax on the wealthy?  If they are the bad guys, and they "deserve to pay more", then why not take it all?  Of course, this is absurd, but how much is enough?  What is fair?  I don't know about you, but if everyone paid the same tax rate, that would be very fair to me.  But punishing those who succeed?  That's what we want America to become?

The Wall Street Journal did a great piece on taxing the wealthy.  Basically, tax all you's not enough.  We have to start taxing the "not wealthy" at huge rates just to pay for the things Washington has promised.  And here, lies the problem.

But, no one wants to give up what they have.  Basic human instinct.  Yet, we must overcome this instinct if we want to survive economically.  Here's what happens whey you even propose a plan...not implement, just propose...that attempts to fix the real problem...spending.  And spending on redistribution of wealth.

As you may know, this clip is being "celebrated" by the left.  They see it as people telling the bad man how bad he is.  I see it as selfish, ignorant, and well...un-American.  There.

And the left is not alone.  Here is a link to a story of a Christian (theologian) contributor to the Washington Post/Newsweek.  She says that if you like Rep. Paul Ryan's ideas of fiscal conservation, then you should repent your sin this Easter.  "...this radical conservatism is unholy and unstable."

We need some adults in this conversation.  And the one that is standing out the most is Rep. Ryan.  I'm not saying his word is the gospel (sorry for the pun), but I am saying we need more people who can come up with logical, sound, and reasonable ideas that can be debated and decided on.

Otherwise...we're screwed.  That's a technical economic term.

Yes, experience doesn't seem to matter much in this debate.  The "hope" that everything is fine is not something I apply to.  And if it means anything to you, not many people who study this for a living think "everything is fine."  The status quo is not sustainable.  And if you don't believe me...well, you haven't bought gas recently.

Saturday, April 16, 2011

EPA: "Jobs Are Not Part of Economics"

When I first saw this over at Hot Air, I thought this was an Onion clip.  But IT'S REAL!!

It's always fun to watch something that is as funny as equally painful to watch.  Too bad it's real.  Too bad this is a real administrator at the EPA.  Too bad the policies are real...and they don't take into account secondary and tertiary effects.  Which, in economics, are the most important.

Otherwise, anyone could do these jobs.  Seriously, anyone.  Just watch the video and you'll understand why.

But, of course, this could be one of the "just political" things that are "not in the best interests of the country."

Thursday, April 14, 2011

A Tale of Responsibility

You see, only until you reach the pinnacle of your career do you actually "do things that matter".  Everything else, well, just a sideshow.

You see, the ends justify the means.  Even though your actions are inconsistent with your past, well, that's the past.  That was then, this is now.

You see, while being a US Senator is well, important, you don't actually have to be right.  You don't even have to vote correctly.  Just do what is expedient.  Bigger things on the horizon, and all.

I had to watch this clip a couple times to even believe what I was hearing.  I'm not even sure what to say, other than "wow".

I guess, "I'm very disappointed" is another.  What other votes "were just political"?

"...making what is a political vote as opposed to doing what was important for the country..."


Wednesday, April 13, 2011


In military operations, an "endpoint" is described in the planning for that operation.  That endpoint is, or should, be strategic in nature.  You might think of this endpoint as, after having arrived, you have "won" the war.  From that endpoint, there will necessarily be "objectives" which are met on the operational and tactical levels.  Operations are planned to produce effects which enable the attainment of those specific objectives.  It is important to define this endpoint well, as it will drive your entire planning and conduct of the war.  Shifting the endpoint strategically should be done carefully and without regard to "how well you are doing".  In other words, if you are not winning your battles, that doesn't mean to change the reason for the war.  It just means your effects and objectives are not in line with your strategic endpoint.

Well, it's a brave new world.  When is the endpoint reached?  Apparently, when we're out of money...or would rather spend it on people who vote for you after you sedate them with money.

So much for what I learned at War College.  I need a drink.  A strong one.

One Size Fits All

That is, according to the TSA.

Like all Americans, especially after 9/11, I too want to travel safely on airlines.  But I'm beginning to doubt the effectiveness of the TSA.  While I can not doubt the desire of the employees of the TSA to do their job effectively, I do doubt the rules than govern their behavior.

Case in point...the recent "pat down" of a 6 year old by a TSA agent.  As a people, and thus, as an institution (the TSA), we attempt to balance security with profiling, I think we're fail.  And why are we trying to balance the two again?  To prevent lawsuits?  So we're more worried about being sued than actually being effective in providing security?

Rhetorical question, of course.  I know the reality.  It's just sad that it's reality.

What's the next stop to get off the crazy train?  I'm tired of riding it.

Friday, April 8, 2011

Civility Returns To Congress

Just kidding.

Seriously, are they sober?  If they are sober, with Representatives like this, it's no wonder our government is such a mess.  As mentioned in the last post, where are the adult conversations?  Is it impossible to have a debate without saying the other side are the equivalent of war criminals and Nazis?

Some call it hyperbole.  I call it unprofessional and bordering on dereliction.  We elected you to do the people's work.  Please put down the megaphone and do it.

Via HotAir...

Thursday, April 7, 2011

An Expensive Way to Save Money

So, the impending government shutdown is taking all the headlines.  And so it should.

But not for the "one-liners" and political jabs that it's used for.  Or for the catchy news program with shock-music to go along with a neat graphic to display on the tube.

You see, I think the real story of the government shutdown is how expensive it's going to be.  That's right.  I think it's going to cost more to shut down than it would to keep it going.

First, unemployment.  Reported here, in the event of a government shutdown, federal employees who are furloughed due to the shutdown may collect unemployment insurance.  That's 800,000 people.  Let's just say that the typical payment per week is $400 for unemployment.  That's $320,000,000 per week.  Just for relativity's sake, a monthly unemployment check for all government employees would be $1.2 billion dollars.  On top of this, while some might not term government employment high-value employment (thinking of Doc Henderson), it is of some value.  That value is lost for the public at large.

According to the Bureau of Labor, there are about 2 million civilian employees, excluding the Postal Service.  That's a weekly $800 million and a $3.2 billion unemployment paycheck, respectively.  Makes the 800,000 seem conservative.

Second, the work doesn't stop.  While the workers might, the work continues to accrue.  So, either one of two things happen (or maybe both).  Either the work never gets done due to a lack of time, or the work accrued during the shutdown has to be accomplished during overtime.  If this is the case, then the public will actually pay more for the same work and get nothing better in return.  Awesome.

Third, the federal government is the Nation's largest employer.  How do you think spending habits will change?  Assume you lost your job.  Would you spend the same or would you live on as little as possible?  My guess is that, being the Nation's largest employer, the shutdown will have a negative impact on an already fragile economy.  The shorter the shutdown the better, but if this goes long, I think we're in trouble.

To give Doc Henderson his due, there might be some benefit to the shutdown.  If some of those government employees see the government as an unstable employer (just live in fantasy land for just a moment), then they might leave government service and find work elsewhere in a higher-value job.  Thus, society is better off.

But don't count on it.

Tuesday, April 5, 2011

Social Security and Other Things We Can't Fix

So, if you overspend your budget for a couple of years, end up in massive debt, and then realize you will not have any money to send your kids to college, what do you do?  Most would tighten the belt, reduce their expenditures, and start saving for school.

Well, grown-ups / adults would.  But, apparently, we don't necessarily send adults to Congress.

So, first up, a "conversation" between the prospective DNC chair, Congresswoman Debbie Wasserman-Schultz, and Congressman Paul Ryan.  Please don't get too depressed watching it.

Second, a more adult conversation.  Congresswoman, please tell me again why I'm not adult enough to invest my own money?  Ah, that's right.  It's not my's not an's a tax.

Sunday, April 3, 2011

I'm Not an Attorney...

...but I did stay at a Holiday Inn last night.

Maybe Senator Graham should, also.

Remember, he was on the short list for Attorney General.  At what point do the politicians decide that they truly are the Founding Fathers incarnate?  Gee, that First Amendment is a real bummer, eh Senator?

"Free speech is a great idea, but we're in a war."  Skip to minute 2.

While easier to discard when things get difficult, that is when the Constitution is most important.