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BJ Feng
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There are many other phones than the Iphone, I use Samsung and one of my more creative friends prefers the Blackberry phone. I guess I'm just not cool enough to be an Iphone person. All property rights are "government created" just as are intellectual property rights. It's been shown that clear and definitive rights of ownership are one of the primary factors for the outperformance of societies over another. Morally, the right to the fruits of one's labor can't be argued.
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There needs to be a competitive marketplace for "the market" to police. Competition is the mechanism by which markets self-correct. Free market capitalism cannot function without competition and so all attempts must be made to ensure that there is enough competition for the marketplace to work. "2. It took the position that the marketplace, not government regulators or courts, provides the ideal check on anticompetitive business practices." I don't understand the logic used by the Bush Administration. How can a marketplace without competition provide a check on anticompetitive business practices? Where would competitive behavior come from in a monopolistic marketplace? Can a monopoly compete with itself? There is a good reason for believing that the marketplace will provide the best solution, but that assumes it is a competitive market. The importance of competition cannot be stressed enough, any government claiming adherence to free market principles MUST have a functioning competitive market as their top priority. There can be no free markets without competition!
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The next great global industry is already here, it's called information technology and America is dominating, all without the government attention given to clean energy. In the Netherlands, government is planning to reduce carbon emissions and energy usage by an ungodly amount. By replacing all their street and public lights with LEDs, energy consumption will be reduced by 95%. They will also design buildings to trap sunlight, that with better insulation will also reduce energy consumption and carbon emissions. The LED lighting is very expensive, but there are savings thanks to the huge reduction in energy usage. Probably not enough to make up for the upfront cost, but this is something the United States government should be doing if there is a need to spend money and we want to be more green. Why wasn't anything like this put into the first stimulus package? Sounds like a perfect way to both spend money, as we could buy American made LEDs or florescent bulbs and we would have to hire people to install them in millions upon millions of lamp posts all across the country. The nation would then be able to reap the rewards of this investment immediately through lower energy consumption. Sounds like a decent way to get benefits if you absolutely have to waste money. Instead, we get a whole bunch of useless pork and increased subsidies to agriculture along with new buildings for government agencies. The problem with the left and the environmentalists is that they refuse to look at efficiency or best bang for the buck. It's all or nothing for most, or they demand a sexy "Manhattan Project" type solution that isn't practical or possible right now. Better would be to simply change out our lights for ones that use less energy but that isn't even being mentioned here. And liberals need to support conservative ideas if they result in achieving what liberals want. There should be a huge outcry for nuclear energy, with all the doomsday talk, you'd think that liberals would be fully on board. After all, WE'RE HEADING FOR CATASTROPHE RIGHT? But I guess AGW won't be catastrophic enough to support nuclear power. See, this is why it is so hard to take the left seriously. If the situation is as dire as they claim, then they should be agreeing to anything that will reduce greenhouse output, there is no time to wait for a perfect solution. But of course they don't and I have to ask why? Is it because they don't really believe what they're preaching? That they know the evidence is inconclusive? Their behavior is totally inconsistent with a belief of global disaster. This is a red flag to murder detectives and law enforcement, when a suspect's behavior doesn't match his story. Something is up.
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Yes Johnson, we've had clean energy alternatives for years now, but the conspiracy isn't with megacorporations, its with ordinary people like you who refuse to pay the high cost of clean energy. Let me ask you if you are running your home off of solar power? You could do it and others have, all it would cost is around $20,000-$30,000 to install solar panels and get a battery. In case you haven't figured it out, I was being sarcastic. Clean energy is expensive and so it is not viable today. As the costs are reduced, it will become viable, but there is no need to worry about adoption or technology. Look at all the investment in alternatives when oil hit $100 a barrel. Once solar or wind become the cheapest form of energy, adoption rates will suddenly jump through the roof. Even I will use 100% green energy without needing any persuasion. Johnson, I suggest you ask yourself why you aren't adopting clean alternatives today, I suspect the reasons have nothing to do with any conspiracy, but with your refusal to pay higher prices. Assume most Americans are like you and you have your answer.
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To compound things further, the Waxman version of Cap and Trade is a travesty that would give government the right to issue credits to favored industries for free. This amounts to giving legislators the power to hand out money to whomever they want in a devious, sneaky way. Does anyone believe that government will be able to give up this power? When has government readily given up any of its powers once gained? Come on, you all know what will happen. Congress will have lots of fun tweaking and modifying the handouts to reward those in favor (did you make your campaign contribution today?) and the giveaways will never end. Just look at the farm subsidies, it's been 70 years and we still can't get rid of them even though the majority of Americans are against it. All one has to do is look at Europe where they gave away so many credits that the cap became meaningless and credits became nearly worthless on the market. And this is Europe with all its tough talk on environmental protection and fighting global warming. Any tax on emissions, direct or otherwise, must not allow legislators to give away the store in the process. This bill is ridiculously bad.
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It is important to tie in Cap and Trade with the reasons to restrict greenhouse emissions in the first place. Global warming proponents state that global emissions must be reduced by a certain amount to avoid catastrophe. It then has to be asked if Cap and Trade will be effective in reducing global emissions to a point where global warming can be stopped. The answer is no, Cap and Trade does not meet the recommendations set by advocates. Overall global emissions will continue to rise and thus Cap and Trade will not stop global warming or advert catastrophe. It will only add to our misery by creating a new catastrophe in the economic sphere. Since Cap and Trade cannot possibly achieve the goals that justify its existence in the first place, it is a bad piece of legislation that should be scrapped immediately. It's like giving a cancer patient a quarter of the necessary drugs needed to stop the growth of cancer. The drugs will still make the patient sick, but will not provide any benefit. There is no reason for the patient to continue taking this medication unless dosage can be increased to a point where it becomes effective, otherwise he's punishing himself for no gain.
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Thanks Kthomas, power does corrupt and that's an argument that should resonate with liberals. Even in this country, we have corruption and it's not confined to any one party, rather it seems to be correlated with who is in power. The Chinese example should give pro-government advocates pause, the Chinese government lost trillions of yuan in bad loans to favored government enterprises when banks were state run. This didn't get a lot of attention and the exact amount of losses and recapitalization was never revealed, but it shows that government is not good at running banks. There is no reason to believe that the recent takeovers of private industries by our government will end in anything less than failure and catastrophe as it has in countless other nations. Notice the problems with state run oil companies in Mexico and Venezuela. Production has dropped off a cliff in both countries because profits are being used to fund social services instead of going back into investment. not to mention the usual corruption and bad management practices. When profits are not the main motivator, expenses can quickly balloon and overwhelm the company. Layoffs give a company a method to cut the fat and get rid of underperforming employees. Some say that incompetent managers remain, but it's better that a least some bad employees are gotten rid of. Under government, layoffs are just not politically possible and so these employees remain, taking up resources but producing little.
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Thanks Kthomas, power does corrupt and that's an argument that should resonate with liberals. Even in this country, we have corruption and it's not confined to any one party, rather it seems to be correlated with who is in power. The Chinese example should give pro-government advocates pause, the Chinese government lost trillions of yuan in bad loans to favored government enterprises when banks were state run. This didn't get a lot of attention and the exact amount of losses and recapitalization was never revealed, but it shows that government is not good at running banks. There is no reason to believe that the recent takeovers of private industries by our government will end in anything less than failure and catastrophe as it has in countless other nations. Notice the problems with state run oil companies in Mexico and Venezuela. Production has dropped off a cliff in both countries because profits are being used to fund social services instead of going back into investment. not to mention the usual corruption and bad management practices. When profits are not the main motivator, expenses can quickly balloon and overwhelm the company. Layoffs give a company a method to cut the fat and get rid of underperforming employees. Some say that incompetent managers remain, but it's better that a least some bad employees are gotten rid of. Under government, layoffs are just not politically possible and so these employees remain, taking up resources but producing little.
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Interesting how so many praise the Chinese system when the only thing that has changed is the fact that they've moved more to a market oriented economy versus state planning. It's the latter that has caused the growth, which stagnated for decades under state controlled planning. China's learned that top down planning of the overall economy doesn't work, that's why state run industries are being shut down or privatized, all state run companies have been told to either make a profit or shut down. The economic miracle going on there isn't due to wise government officials dictating what needs to be produced. If anything this shows the superiority of market oriented reforms as the path to prosperity. Other governments that wish to follow suit should take care to examine what is going on, which is LESS state involvement, not more. Government is reduced to doing the things it does best, like infrastructure. The one party, total government control over politics makes it much easier for China to build infrastructure and push through projects. Could the Three Gorges Dam ever be built here? Environmentalists were told to shut up after the initial debate stage and the plans went ahead, displacing 2 million households for the betterment of the nation. The state can move people at will, that's the advantage of a top down government. The disadvantages are rampant corruption which is hard to stop when a few people have so much power to do whatever they want. You can only hope that those in power will be ethical and do what is best for the country instead of themselves, but often that's not the case.
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Gee, the market correcting itself and healing without government intervention? And I thought that only happened in theory. The word on the street is that PPIP never got the participation expected because the private investors were scared of government changing the rules after the fact or PPIP acting as a Trojan horse for government to take control over operations. Yes Obama and Geithner repeatedly promised not to alter the rules, but from what I've heard, the actual language in the contracts allowed government to change the terms. Furthermore it was a lose-lose proposition. Lose money and Congress will be furious and blame the firms for incompetence. Make money and they'll be demonized and the entire program will be categorized as some sort of giveaway. Most felt that the benefit of getting free leverage wasn't worth the potential problems. Oh how the notion of unintended consequences seem to dog the best laid plans of government officials!
Toggle Commented Jul 1, 2009 on "The Treasury View" at Economist's View
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Sure why not just ban everything, never mind that the low mortgage rates Americans enjoy, and not just on Fannie conventional loans, are due in part to innovation. Derivatives and securitization are tools, they can be used in a manner that benefits us all, or they can be used to harm. Just because OJ killed 2 people with a knife doesn't mean that all knives should be banned. A huge amount of the funding for mortgages comes from ordinary investors investing in mutual funds like you and me. Nowadays, we don't like keeping a large balance that pays us nothing in a traditional bank account, we rather get a higher yield through a bond fund or money market fund. Well these are new innovations and they buy securitized mortgages or other debt. There's simply no way banks have enough money to fund all the mortgages that are being funded through the securitization process. And how can anyone say that this system benefits the banks? Under the old system, we place our savings in bank accounts, get next to nothing in interest, and the banks invest that money in mortgages. Under this system, we skip the middle man and get a better yield minus fees and servicing costs that amount to a few tenths of a percent. What was crazy was that bond buyers were willing to lend their money to subprime borrowers at only a marginal spread over US Treasuries, today, they demand a more reasonable yield. The only people who should be prosecuted are people like Angelo Mozilo who knew about the risks and the declining loan standards, but didn't try to put the breaks on until he was forced to by "market forces". Basically he was cut off from funds because people refused to lend Countrywide money. AIG's executives who increased their subprime CDS exposure well into 2007 when everyone else knew that subprime was troubled also deserve to go to jail for gross negligence and fraud to shareholders. "There is a reason 1/3 of Texas executions are of those innocent of the crime's sentenced to." Really? I thought facts show the opposite, there has yet to be a case where a person executed was later shown to be innocent. There have been people on Death Row who were exonerated, but as far as I know, never a case where it can be proven that a person was wrongly executed. My point is that the above statement is totally false and ridiculous.
Toggle Commented Jul 1, 2009 on Bankslaughter? at Economist's View
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This assumes that regulators can tell if there is a bubble or not. Bubbles are obvious after the fact, but not so much when they're going on. I speculated that there was a bubble in bonds, but that has turned out to be incorrect so far. Similarly, the commodities "bubble" hypothesis is in trouble with oil at over $70 and commodities at relatively high prices compared with just a few years ago, despite the worst global recession since the Great Depression. In my opinion, it is unreasonable to assume that regulators can identify bubbles, what they can do is identify risks to the financial system. For the tech bubble, the risk to the financial system was relatively minor, had banks started to speculate in tech stocks, the story would have been different. The author makes a great point. A system that allows for bubbles and innovation through less regulation could be better overall than a system where regulators try to squash every bubble or imagined bubble they see. As far as I know, Cuba was unaffected by the global financial crisis (other than being hurt by lower tourism and lower global spending) because their regulations prevented their banks from participating in the global financial system. However this avoidance has been negative with regards to overall wealth, perhaps a bad example but you get my point. There is no evidence to show that financial crises can be avoided without chocking off growth through draconian regulations reminiscent of communism. Crises have occurred since at least Roman times over 2000 years ago. We have to ask if we are seeing these crises in the right manner. Perhaps they should just be accepted like hurricanes on the Gulf Coast and Earthquakes in California. Prohibiting people from living in California due to a fear of a catastrophic earthquake, which we know will occur sometime, would be a net negative for the country. The risk of a devastating earthquake is simply accepted and weighed against the positives, with the positives winning out. Once a 8.0 earthquake hits California, shills will scream about why there wasn't more regulation to prevent people from living in high hazard areas. These people should be chastised and ridiculed, yes regulations would be able to prevent the loss of thousands of lives, but the cost of the regulation would far outweigh the gain. Again, I ask you to consider this point when looking at financial regulation. Not all regulation is bad, but the Obama administration is overreaching with all the new agencies that will be created.
Toggle Commented Jun 30, 2009 on Should We Pop Bubbles? at Economist's View
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Bruce Bartlett, you unfortunately used the wrong examples. The debate over the amount of taxation and government involvement we want in our lives will never go away and can never be "stale". This country has been concerned over the level of taxation since its inception, there's no reason to believe that this issue is transitory in nature. As for people like Michael Cain, I suggest he state what his definition of an adequate floor is, and then do some research to see if those conditions have been met. If his floor means a middle class lifestyle, then that essentially means eliminating poverty which is impossible since poverty is RELATIVE. I will once again point out that our poor are considered upper middle class relative to the world using UN income numbers based on PPP. The mean household income for our poorest fifth was $11,352 in 2006 according to the Census bureau. Go and check how that compares and where that ranks our poor relative to the rest of humanity. http://www.census.gov/hhes/www/income/histinc/h03ar.html Concentration of power is absolutely a problem. When government receives more power, it rarely can be forced to give it up. And power, as pointed out above, can be used for unscrupulous ends and to consolidate even more power. We can't always elect honest politicians, yet those of you who complain about defense sector corruption don't seem to care when it comes to graft and waste elsewhere.
Toggle Commented May 23, 2009 on The Party of Stale Ideas at Economist's View
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As much as I dislike the policies of FDR, he is also indisputably in the top 10. In fact, FDR is the only challenger to Reagan for the greatest president of the 20th century. When Reagan took over office, the United States was in a period of crisis with high inflation and high unemployment. It's international status had been badly tarnished thanks to the oil embargoes, and the Iranian Revolution. Many people thought that the golden age of America can come and gone, a gradual decline was all that could be hoped for instead of a total collapse. Reagan, like FDR in the past and Obama today, instilled a sense of hope and belief in the country. When he left office, America was the undisputed lone superpower in the world. Its former enemies would collapse within months, and then begin a transformation adopting the American ideas of Democracy and capitalism that they had so long fought against. America's battered economy had also retooled and was comfortably the largest in the world. With the Japanese in the throes of a depression that continues to this day, no contender in sight could be found. America would soon enjoy the peace dividends that would mark the 1990's as a time of unprecedented uninterrupted growth and prosperity. Reagan left the United States without any challengers politically, economically, ideologically, or militarily. All the former Communist countries had either started to adopt the American system, or were quietly fading into oblivion like Cuba and North Korea. Western values were spreading all across the world, its culture being adopted in faraway places like Turkey and South Korea. The American hegemony had begun, one would have to go back to ancient Rome or China during the Yuan and Ming Dynasties to find a country that was similarly dominant in world affairs. How future presidents would handle what Reagan established would bear watching, but there is no doubt that Reagan left the United States at the height of its strength, at no time in its history had the United States enjoyed a better position in the world or was more influential. The above was a non-normative statement of what happened, it does not make value judgments as to if American hegemony is good or bad. Rather it only states the establishment of a hegemony (dominance in all human affairs) and credits Reagan who took over the United States at a time of decline when hegemony was thought impossible. No matter how you define greatness, there's no way Reagan can be left out of the top 10. That's an unbiased opinion as any I've made, nor can I say that FDR doesn't belong on the same list, no matter how his policies still haunt us to this day. Should his New Deal policies lead to the eventual destruction of this country, then his status can be re-evaluated. How will the coming generation respond to the demands of SS, Medicare, and the trillions of spending that they will have to pay for? We need another great leader to guide the United States for the coming crisis.
Toggle Commented May 23, 2009 on "Anatomy of Thatcherism" at Economist's View
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Anne, because of the convexity problem faced by mortgage backed securities, the current duration does not accurately reflect the risk to those holding GNMA or any MBS. In other words, duration will rise along with interest rates giving the holder a double-whammy. On the Vanguard Diehards forum, a great forum with professionals and novices alike, it's been estimated that the largest possible loss to Vanguard's GNMA fund is around -15% on NAV. With the fund yielding around 4.15%, that means a total max loss of -11.8% per year, but that's only for year one. The losses could continue on, though it would be unlikely that an investor would lose another 11% the next year. Don is right, there is no way to avoid a real capital loss even with TIPS. The investor would still take a hit from unanticipated inflation due to real yields moving higher in the case of TIPS, of course his capital would be returned to him at maturity, but should he have to sell at that point, he would experience a capital loss. By the way, if I'm wrong and real yields move lower with a rise in unanticipated inflation, then the investor would have a gain.
Toggle Commented May 22, 2009 on Paul Krugman: Blue Double Cross at Economist's View
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This is more babble by those who have no clue and are out of touch with reality. The author contradicts himself when he says that the Republicans were pretty much like the Democrats in the 1970's, just as they are today. A new idea had to be advanced, and Reagan did that with the smaller government ideology, thus the Republicans were able to distinguish themselves from the Democrats. Fast forward to today where Republicans once again look like Democrats, with even some Republicans moving over. You would think the author would recommend the same strategy that Reagan used, that is advocate and explain the reasons for a smaller government, but no, he instead suggests another path, one that he curiously fails to describe or elaborate on other than to say it's new. This is the sort of mindless crap we've all come used to. Yes, it's so easy to preach for a "new path", a "new beginning", and a "new way of doing things". Just don't ask me what it is, that requires too much thought and actual analysis so I'll do the lazy thing and state the same old tired phrases..."we must work together", "we must move forward", "we can't live in the past, we can only prepare for the future". All very nice sounding but meaningless to all but the truly clueless. One thing that will never change is the debate on how much government we want. Now the battleground can change, from taxes to Medicare to government pork "stimulus" spending, but the main fight is fundamental and so there can't be a deviation from that primary conflict. There is no third way or "new idea", the only differences are to the degree that you want either more or less government. That is why Republicans will never deviate from wanting less government, because if they do, then the party will be rendered truly obsolete and be destroyed, replaced by another that will. Same for the Democrats, they will never stop advocating for more government involvement, lest they be destroyed and replaced. This fight is an ageless one and to talk about another path is ridiculous. I can't believe the stuff that gets published today.
Toggle Commented May 22, 2009 on The Party of Stale Ideas at Economist's View
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I was under the impression that US oil production has been falling since we hit peak production in the 1970's. If so, then the Alaskan North Slope only slowed the rate of decline. If money supply as no effect on inflation, and money supply can't be controlled by the State, then I don't understand how any of Thatcher's policies regarding the money supply could have caused misery. Especially since inflation decreased. But then again, I don't try to put a negative spin on great and prosperous points in history either. Thatcher's legacy is pretty much set as one of Britain's greatest Prime Ministers. Reagan is one of the top 5 greatest presidents ever, not even detractors can place him below top 10. Go ahead with the negatives, real people in the real world aren't perfect, not even Washington or Lincoln can live up to perfection, but that's not what a normal, rational person measures greatness by.
Toggle Commented May 22, 2009 on "Anatomy of Thatcherism" at Economist's View
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Yes, Dubai is not a good example. The problem with Romer's idea is that it requires governments, the leftist ones, to give up power and control and to allow people and capital to make their own decisions without government interference. The rightist governments who already allow people and capital to allocate resources don't need a Hong Kong, in fact Romer makes them the ones who provide Hong Kongs to leftist governments. It's too much of a stretch to think that these leftist governments who want total control over people's lives and the economy will readily relinquish power. And even if they do, what is to prevent them from reneging on their agreement? The military power of Great Britain made sure that China could not destroy Hong Kong. It was fortunate that the Chinese government itself changed to the point that they no longer wanted to take economic control of Hong Kong. Had the policies of the 1970's still been in place, Hong Kong would have already been destroyed by now. Any country not already prosperous can create their own Hong Kong. All they need to do is to allow the free movement of capital, strong property rights, low taxes, and an ample stream of trade. However some governments cannot bear to relinquish power, or see some people get rich. Basically Romer is advocating special economic zones free from leftist policies, but leftist governments will not allow such zones to take hold, otherwise they wouldn't be leftist in the first place. Oh well.
Toggle Commented May 21, 2009 on "Paul Romer's Many Hong Kongs" at Economist's View
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If anything, public sector unions have the advantage in power structure to the point where it is unfair to society. Look at what is happening in California. We face a deficit in the tens-of-billions, taxes have already been raised and are the highest in the nation (income taxes are 2nd now thanks to Hawaii's recent tax hike). State public sector workers were asked to take ONE unpaid day off a month, and they absolutely went nuts! Despite all the talks about layoffs, not a single State worker has been laid off. There are only proposed layoffs and notices of future layoffs, but bad media reporting and outright deception by the unions make it seem like hundreds of thousands of State workers are going to be laid off. If only that were the case! Total layoffs will amount to a few thousand, most will come from attrition, people retiring who will not be replaced. We have the worst recession in a generation and the unions still want their raises and protections. Politicians are just not good stewards of public money, this is why public sector unions are unfair and have enormous power. They will use their dues money for political purposes to defeat any politician that dares to stand up to them. There isn't much of a reason for politicians to refuse union demands. They know they will get a lot of negative publicity should they do the right thing for the public and refuse more wage increases and hiring. On the other hand, if they go along, they can be praised by the union, receive union contributions to their campaign, and then just raise taxes later on. Of course the taxes will be sold as the only option. Look at LAUSD, they are trying to organize a strike, even though it is not permitted in their contract. Why? Because there's been talk about laying off teachers aids and other support staff. Just talk, no teachers or aids have actually been laid off yet (won't be until next school year in Sept. if at all). Politicians just aren't equipped to negotiate with the unions on equal terms. The public always gets shafted, the power structure is totally skewed in favor of public sector unions. I believe public sector unions should be made illegal. There's a reason why cities have to declare bankruptcy because of all the pension and retirement obligations going to the unions. AND YET THEY ASK FOR MORE! A smart union organizer would realize that they already have a sweet deal and understand that wages and employment cannot grow more than the GDP in the long term or else there will have to be a crisis and a confrontation. This is exactly what is happening in California, and the voters have made it clear that the politicians have to make tough cuts and fight the union. It takes a rare hero like Reagan or Thatcher to stand up to the public sector unions who can cause havoc by striking. Few politicians have the stomach to fire all the strikers and replace them with people who will gladly accept the already generous wages and benefits.
Toggle Commented May 21, 2009 on "Anatomy of Thatcherism" at Economist's View
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The stimulus will certainly hurt us in the future, we have only so much ammo left to fire and wasting a huge volley on things like new buildings for government (example Fish and Wildlife, many agencies will be getting new buildings) and increased subsidies for agriculture along with the establishment of more commissions to study topics like affordable broadband. I don't think any of the stimulus has actually gotten out yet, the last I heard, the fastest moving parts are still in the bidding process. So whatever recovery we see right now has nothing to do with the "stimulus". What's sad is that we know the economy will begin to recover and slowly build up momentum. Of course the "stimulus" will gradually make its way to the pig trough and be consumed. However the timing is such that it could seem like the "stimulus" is related to the recovery. I have no doubt that the above will be claimed on this very board. I also predict Krugman will come out with another baseless op-ed pining on how successful fiscal spending can be. Hopefully, government will show its usual incompetence and the spending will be delayed further until Q4 2010, by that time signs of recovery should be evident and the danger of being fooled by the "stimulus" will have passed.
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Perhaps it's easy for a man to be happy. Sex, food, beer and other intoxicants, and a good sports game on TV are all it takes. "Things like peace, a decent society, kindness, low levels of violence are goals both share." SS, interesting that freedom and liberty are not one of the top goals you bother to list. Not too surprising
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"But researchers who have looked at time-use data say the second-shift theory misses an important detail. Women are not actually working more than they were 30 or 40 years ago. They are instead doing different kinds of work. They’re spending more time on paid work and less on cleaning and cooking. What has changed — and what seems to be the most likely explanation for the happiness trends — is that women now have a much longer to-do list than they once did (including helping their aging parents). They can’t possibly get it all done, and many end up feeling as if they are somehow falling short." Certain things are mutually exclusive. As women entered the workplace, they also started to define success by their ability to climb the corporate ladder. Make VP and you're a successful businesswoman, one to be admired. But stay as a junior level middle manager and you've failed, you feel ashamed at gatherings with your female friends, some of whom are executives, doctors, or doing some important job. The "Rat Race" as it's known, used to be exclusive to men. But now women are also joining the race, and not everyone can win. The Rat Race is further complicated by the biological clock. It is nearly impossible to participate in the Rat Race and be a good parent at the same time. Climbing the corporate ladder requires devotion and 50 hour weeks at least. Raising a baby also requires devotion and even more time. Hiring a "nanny" to take care of your baby no doubt causes feelings of guilt and inadequacy. With good reason. How many people complain that they barely knew their father because he was busy working all the time? Well at least they had their mother around, but now, you have children being raised from birth by strangers. First it's the nanny, then they get placed into pre-school and after-school programs. Then they enter K-12 where teachers are shocked at the behavior of some children. Well someone still has to teach morality and common sense, that isn't taught at schools and nannies don't have the authority or stature to teach them what should be important and what they should be doing. Teachers complain that they have to teach what acceptable social behavior is, something unheard of a generation ago.
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Under a fiat currency system, no country can save in their own currency. How would they do it? Let's say they run a budget surplus and decide to keep their own currency, Yuan, in the Central Bank. That would reduce the money supply right? And eventually they would run out of Yuan to take from the populace if the surplus continued. Now if they purchase their own bonds to keep money supply stable, that requires prior deficit spending as bonds are nothing more than debt. Eventually they'll run out of that too. They could purchase land and assets, but those are investments, what will government do with factories and land? See the problem, if the Chinese or any central bank wants to increase the money supply, they have to purchase something from the public. Surpluses drain money, it can also reduce the government's debt outstanding and keep the money supply constant by using the surplus to buy bonds. But there has to be debt in teh first place to buy. Without prior debt, how does a country save in its own currency? I believe it's impossible. Now if you buy someone else's debt, then they are responsible for generating the future income. You have shifted potential consumption to the future, which is what savings represent. By the way, this is exactly the same reason why nothing has been saved under the SS Trust fund. A country cannot save by buying and holding its own bonds, it does not increase future consumption. SS Trust fund could have had real savings if they purchased foreign bonds, but that would have increased the deficits the government was running. Unless I'm missing something, it's just not possible for a government to save in its own currency under the modern fiat system.
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The fiat currency system we have today means that someone must go into debt if someone else wants to save. In the past, savings could come from storing more gold or silver and were independent of other nations saving or borrowing. But now, savings is linked to debt and can't be separated. Perhaps I'm not looking at this in the right way. China could purchase US assets like stocks and save that way, but they would have to have US dollars in the first place, and each dollar represents Federal Reserve or US Govt. debt. Am I overlooking something here?
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One interesting topic almost never discussed is that the reserve currency, the dollar, represents a store of wealth (savings) to those who hold it, but it is also debt issued by the United States. Remember when we were on the path to eliminating the entire national de3bt and Greenspan warned Congress that doing so would have unpredictable consequences? That's because without debt, we wouldn't have to issue US Treasuries. Without US Treasuries, how could other nations save? How could we know what the risk-free rate is? There is a huge problem that today's financial model presents, how do other nations save? How can China save, other than to buy the DEBT of other countries? But that means other countries MUST go into debt or else there can be no savings. Yes, China can buy gold and silver, but doing so in quantity would drastically raise the price, all the gold in the entire world can be purchased for under a trillion at current prices. So there is no mechanism for nations to save, this is also somewhat relevant to the SS Trust Funds, there isn't a way for the US Govt. to save. And no, the US Govt. cannot save by buying its own bonds, but China can save by buying US bonds. What if the United States didn't go into debt? Since the dollar is the world reserve currency, monetary expansion depends upon the US to issue more US Dollars, which are nothing more than debt obligations. Each "dollar" is just a Federal Reserve Note, a note is a promise to pay in the future, it is debt. I think people have failed to explore this path, since US debt IS MONEY, the US must go into further debt in order for global money supply to increase. Without more debt, there can't be more money. And that would choke off growth. So the United States goes further into debt because it has to under this new system that was implemented only in the 1970's. Before that, the dollar was linked notionally to gold, but now it is linked to nothing but still valued as "money", a store of wealth.
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