So I haven't been anywhere in Cyberspace for well over a month... I barely had time and energy to make that little quip about Cheney.
Reason why: I have completed the first draft and first edit of a two hundred (or so) page book on Macro Economics.
The book is meant to be readable and modestly entertaining, but in fact is an exposition in Philosophical thought on economics which allows the reader to follow an argument I have been thinking for over twenty years now, but had allowed myself to be convinced by the "trickle-downers" that theirs was a system that worked.
Well that horse has left the barn, and the fly in the ointment is a obvious as the emperors new clothes. Sorry, had to puke out a couple of over used cliches, which I tried to avoid in the book, with the exception of two, for which I directly apologize to the reader having (in less than one months writing) only come up with those relatively apt descriptions to hasten the readability.
I would have loved to spend ten years instead writing some needlessly complex book which makes obscure and practical example of the thought so espoused in this work, but morally I felt the compuncture to instead make an effort to shift the dialogue we are presently trapped in with our current economic state of affairs.
All that said, I am hanging in there, wish you all the best, and hope to publish the book as a final draft by March.
Showing posts with label Budgetary Managment. Show all posts
Showing posts with label Budgetary Managment. Show all posts
Sunday, February 15, 2009
Wednesday, December 31, 2008
Why the Republicans are "Communists"
Lets start off by defining communism via copying from Wikipedia;
"Communism is a socioeconomic structure and political ideology that promotes the establishment of an egalitarian, classless, stateless society based on common ownership and control of the means of production and property in general."
That very good sentence is not what I mean by referring to the "W" administration as Communist.
Lets shade things in a little:
When I was growing up you were a Pinko, Commie, or as Wally George would say, "Looney Liberal" if you disagreed with trickle down economics.
Aside from Appeal to the Masses approach of name calling, why would I conclude that the label of Communist, as the many Republicanistas I have known over the many decades, would call someone, group, or argument which believed in any hint of the socialist concept of nationalization of wealth, be an appropriate adjective for the Republicans?
Lets construct the argument from the Republicans and their Administration.
(1) Paulson hands in a three page proposal to solicit $750BB by using an Appeal to Fear.
(2) The congress, after some questioning, submits to this request without examining the construct of mechanisms of oversight, re-regulation, or sufficient scientific or public input by certifying the Appeal to Fear and also using an Appeal to Consequences.
(3) Paulson in turn has "bailed out" only the richest and most influential corporations without any calculation towards restoring the credit markets. In doing this he acting as proxy for the "W" Administration has nationalized more dollar for dollar (adjusted) private wealth than did Lenin in the 1917 Russian Revolution.
The main difference between the almost 90 years and two continents? Lenin nationalized means of production, and Paulson/Bush have nationalized private failures.
As sickening as that statement is alone, it in my opinion gets worse.
(4) Now it also turns out that the execs and other elite do not have to take any pay cut for their failures.
The primary argument from all the trickle downers was that through facilitating the elites, you create more jobs, and thus have a social hierarchy which is a form of meritocracy. Often the arguments from those same trickle downers was that to have a state mechanism which takes care of less fortunate, say war veterans or people with disabilities, would reward failure, incompetence, or lacksadaisy. Can you see where I am going on this one?
The beneficiaries of the decades of pro-corporation, deregulatory, and trickle down thinking has been turned on its head by those very same people who would have argued (in the face of say a $700BB package to allow individuals who earn less than $50K per annum to write down their losses [not pay taxes], be reimbursed for incompetence, and be availed of debts incurred from their poor decisions by the US government) against such a blatant avoidance of capitalist consequences.
Those who would argue that somehow the Clinton years were not in this bag of hammers are dead wrong. Clinton worked with the Knut Gingrich congress to get those lazy welfare mothers back to work, for instance. Only Jimmy Carter tried to oppose the Nixonian economic dismantling of the Great Society and the New Deal-- and he was absolutely punished (for not doing a very good job of trying to swim against the current).
So, was Paulson's appeal true or false? Probably a little of both. Yes, the sky was falling, but not in the way anyone could comprehend-- or at least anyone who truly comprehended this did not say. (On a separate note, how convenient is it of the anti-government Republicans to not only have built the largest American bureaucracy in history, but to have also spared us poor innocent citizens from the awful and complex truth involved in the facts {thus a defacto Nanny State mentality, to boot}?)
So, was Congress reasonable or irrational to take such drastic action? Probably a bit of both. On the one hand to it was fairly unpopular (especially at first blush), but to have gone into lame duck session without action could have been political poison for reelection.
So will the companies chosen to be bailed out be a good or poor move by the collective US Government? Probably a bit of both, again: On the one hand if we are truly getting preferred stock interest, corporate bonds, and other repayment guarantees, then there is a real probability (say 30 ~ 55% chance) that the US government (and hence the taxpayer) will come out ahead in dollar for dollar inflation adjusted numbers at the end of two or three decades. On the other hand it is in my estimation also a fair probability that dollar for dollar we could come out behind.
Effectively the US Government will have to now manage a portfolio. On the other hand, it will control certain of these groups (like Fannie-Freddie). All the while being the regulator for these corporations! This is a Corporatist Socialism model which in large part has been the fantasy of many of the Pro-Business "Libertarians" I have read.
They showed Soylent Green on TV yesterday, and that is taking the overreach and complicit conspiracy between corporation and government to a natural and far reaching (if not simplistic) conclusion.
My recommendations for the new administration:
(a) Re-enforce various merit based pay systems/anti-golden parachute provisions for these loans, or they will become due. The Republicans (and many Dems) are fond these days of talking about mortgages and other legal devices as if these are mutable documents. The basis of law is the immutable nature of such binding agreements in writing and witnessed. If there is going to be any flexibility in interpreting legal agreements lets start with the fact that the intention of the parties was NO GOLDEN PARACHUTES!
(b) Envigorate and expand regulatory mechanisms. Further this by making public oversight commissions to review this triangle between the US Government as Stock/Bond holder, US Government as regulator and enforcer of laws, and as shepherd of tax dollars thus invested. (Think Customer, Regulator, and Broker-- of which US Govt is now all three.)
(c) Create new rules for this new use of tax dollars to further discourage cronyism, quid pro quo, and other unsavory action which could clearly emerge over time from this unholy trinity by creating trust fund and anti-collusion rules for the US Government as Broker.
(d) Create timelines (not in terms of time, rather in terms of event mile markers) which delineate the divestment of these holdings (as Customer).
(e) Enforce the bloody rules that are on the books! And simplify them so that even the company Receptionist could theoretically blow the whistle upon detecting malfeasance or felonious behaviour!!
So now I am going back in time, to 1987, Reagan is President, and I am going to visit Wally George and be on the lame-ass Hot Seat show to say, "We need to infuse business with $700BB in order to allow them to avoid losses, keep their jobs, and 'stimulate the economy.' I believe the government should become three times bigger than it is today. I think it will be good for us to avoid confusing our consumers, I mean citizens, with any real information or data germane to the decision making processes, because politicians know best. And then I believe as regulator, primary stock holder, and investor the US Government shouldn't be burdened by little details like accounting for how those funds are used by the corporations we deign to be worthy of state investments!"
Commie!
"Communism is a socioeconomic structure and political ideology that promotes the establishment of an egalitarian, classless, stateless society based on common ownership and control of the means of production and property in general."
That very good sentence is not what I mean by referring to the "W" administration as Communist.
Lets shade things in a little:
When I was growing up you were a Pinko, Commie, or as Wally George would say, "Looney Liberal" if you disagreed with trickle down economics.
Aside from Appeal to the Masses approach of name calling, why would I conclude that the label of Communist, as the many Republicanistas I have known over the many decades, would call someone, group, or argument which believed in any hint of the socialist concept of nationalization of wealth, be an appropriate adjective for the Republicans?
Lets construct the argument from the Republicans and their Administration.
(1) Paulson hands in a three page proposal to solicit $750BB by using an Appeal to Fear.
(2) The congress, after some questioning, submits to this request without examining the construct of mechanisms of oversight, re-regulation, or sufficient scientific or public input by certifying the Appeal to Fear and also using an Appeal to Consequences.
(3) Paulson in turn has "bailed out" only the richest and most influential corporations without any calculation towards restoring the credit markets. In doing this he acting as proxy for the "W" Administration has nationalized more dollar for dollar (adjusted) private wealth than did Lenin in the 1917 Russian Revolution.
The main difference between the almost 90 years and two continents? Lenin nationalized means of production, and Paulson/Bush have nationalized private failures.
As sickening as that statement is alone, it in my opinion gets worse.
(4) Now it also turns out that the execs and other elite do not have to take any pay cut for their failures.
The primary argument from all the trickle downers was that through facilitating the elites, you create more jobs, and thus have a social hierarchy which is a form of meritocracy. Often the arguments from those same trickle downers was that to have a state mechanism which takes care of less fortunate, say war veterans or people with disabilities, would reward failure, incompetence, or lacksadaisy. Can you see where I am going on this one?
The beneficiaries of the decades of pro-corporation, deregulatory, and trickle down thinking has been turned on its head by those very same people who would have argued (in the face of say a $700BB package to allow individuals who earn less than $50K per annum to write down their losses [not pay taxes], be reimbursed for incompetence, and be availed of debts incurred from their poor decisions by the US government) against such a blatant avoidance of capitalist consequences.
Those who would argue that somehow the Clinton years were not in this bag of hammers are dead wrong. Clinton worked with the Knut Gingrich congress to get those lazy welfare mothers back to work, for instance. Only Jimmy Carter tried to oppose the Nixonian economic dismantling of the Great Society and the New Deal-- and he was absolutely punished (for not doing a very good job of trying to swim against the current).
So, was Paulson's appeal true or false? Probably a little of both. Yes, the sky was falling, but not in the way anyone could comprehend-- or at least anyone who truly comprehended this did not say. (On a separate note, how convenient is it of the anti-government Republicans to not only have built the largest American bureaucracy in history, but to have also spared us poor innocent citizens from the awful and complex truth involved in the facts {thus a defacto Nanny State mentality, to boot}?)
So, was Congress reasonable or irrational to take such drastic action? Probably a bit of both. On the one hand to it was fairly unpopular (especially at first blush), but to have gone into lame duck session without action could have been political poison for reelection.
So will the companies chosen to be bailed out be a good or poor move by the collective US Government? Probably a bit of both, again: On the one hand if we are truly getting preferred stock interest, corporate bonds, and other repayment guarantees, then there is a real probability (say 30 ~ 55% chance) that the US government (and hence the taxpayer) will come out ahead in dollar for dollar inflation adjusted numbers at the end of two or three decades. On the other hand it is in my estimation also a fair probability that dollar for dollar we could come out behind.
Effectively the US Government will have to now manage a portfolio. On the other hand, it will control certain of these groups (like Fannie-Freddie). All the while being the regulator for these corporations! This is a Corporatist Socialism model which in large part has been the fantasy of many of the Pro-Business "Libertarians" I have read.
They showed Soylent Green on TV yesterday, and that is taking the overreach and complicit conspiracy between corporation and government to a natural and far reaching (if not simplistic) conclusion.
My recommendations for the new administration:
(a) Re-enforce various merit based pay systems/anti-golden parachute provisions for these loans, or they will become due. The Republicans (and many Dems) are fond these days of talking about mortgages and other legal devices as if these are mutable documents. The basis of law is the immutable nature of such binding agreements in writing and witnessed. If there is going to be any flexibility in interpreting legal agreements lets start with the fact that the intention of the parties was NO GOLDEN PARACHUTES!
(b) Envigorate and expand regulatory mechanisms. Further this by making public oversight commissions to review this triangle between the US Government as Stock/Bond holder, US Government as regulator and enforcer of laws, and as shepherd of tax dollars thus invested. (Think Customer, Regulator, and Broker-- of which US Govt is now all three.)
(c) Create new rules for this new use of tax dollars to further discourage cronyism, quid pro quo, and other unsavory action which could clearly emerge over time from this unholy trinity by creating trust fund and anti-collusion rules for the US Government as Broker.
(d) Create timelines (not in terms of time, rather in terms of event mile markers) which delineate the divestment of these holdings (as Customer).
(e) Enforce the bloody rules that are on the books! And simplify them so that even the company Receptionist could theoretically blow the whistle upon detecting malfeasance or felonious behaviour!!
So now I am going back in time, to 1987, Reagan is President, and I am going to visit Wally George and be on the lame-ass Hot Seat show to say, "We need to infuse business with $700BB in order to allow them to avoid losses, keep their jobs, and 'stimulate the economy.' I believe the government should become three times bigger than it is today. I think it will be good for us to avoid confusing our consumers, I mean citizens, with any real information or data germane to the decision making processes, because politicians know best. And then I believe as regulator, primary stock holder, and investor the US Government shouldn't be burdened by little details like accounting for how those funds are used by the corporations we deign to be worthy of state investments!"
Commie!
Wednesday, November 19, 2008
Bretton Woods 3 and #44
Great article in the New Republic which breaks down the global financial mess in plain speak.
Most of my whinging has been about our Domestic Policy: Reduce the IRS to a minor agency by simplifying tax code; Return the Fed to its role as a clearinghouse between banks, and close the "window" to the big businesses who keep talking "poor mouth;" and modify laws to being Plain English so that there can exist bright lines that enable transparency, enforcement, and whistle-blowing (self-regulation).
What of Foreign Policy?
Well, sir, as Isolationist as my instinct are, the reality is that the actual value of the average fiat currency dollar in your pocket whizzes around the world once a day or more.
Therefore it begs definition that there really are no "Isolationists," anymore, and further no major power in the post-industrial economy could afford to be.
As in the article great minds, and Gordon Brown (who I admire, has a great mind, but is the Prime Minister-- so you have to have a cup of salt around for anything he will say, in spite of the fact that he was after all the Chancellor {Finance Minister} for Blair), are calling for a new Unification of the monetary system-- they refer to it as Bretton-Woods III.
I mentioned before that there needs to be a swords to plowshares mentality in the world for there to be avoided some great depression, and the penchant to harmonize and unify is a deep instinct among we human beings. That said, let us examine that there really hasn't been a "Free Market" in currency in modern times.
One good reason is that if you look at the aftermath of The Great War (WWI), The German Mark was deeply punished by the victors and was only brought out of depression by making ready for WWII-- Bretton Woods "I" aside. Currency and collusion between allies against a smaller nation can be a form of War.
On the other hand creating a Universal Fiat would essentially strip many powers of nations to regulate their economic and financial policy decisions... which is the consequence of losing a War, so is essentially a non-starter.
Therefore, as I mentioned before, Trade Zones and the trading parties should have the ability to create Defensive alliances (as in the creation of "Greece"), and conversely current Defensive Alliances (NATO, et. al.) should have the ability to create currency agreements in order to buy and sell at discount, prop up weaker economies in the alliance, and "attack" other economies.
If you remove the warfare from currency, then you will create a greater warfare (most probably, goes my thinking), so you must allow for regulated and controlled violence of the market that can be appropriately contained.
Simultaneous to these exceptions (for instance if NATO agrees it is a dollar denominated Alliance, then all decisions are made in dollars by that Alliance, even though some of those allies might rule in Euros, Pounds, etc.) should be bright line rules of the game for a semi-free form currency market which allows for nations to set policy (such a false rate of Yuan or Yen) towards their own betterment, yet somehow hold them to account. If for instance the Chinese insist in undervaluing their currency to increase exports, the deficits can not enjoy a knock on by the false values. This doesnt mean the Importing nation can not enjoy the discount on goods or services, but it does mean that the reconciliation of Real-versus-Declared value would suffer. (Hence those NATO Allies in that theoretical dollar denominated Defense would still be subjected to the Real Weight of the Dollar according to the rules, and thus affect the larger Commercial Economy.)
I threw out a lot of complex ideas which may not entirely make sense to even studied economists, because I am using my knowledge-- and a lot of it I didnt just get from reading books.
As for what a new Administration can do, well like others, I await the breath of fresh air (as did the G-20 last weekend).
Most of my whinging has been about our Domestic Policy: Reduce the IRS to a minor agency by simplifying tax code; Return the Fed to its role as a clearinghouse between banks, and close the "window" to the big businesses who keep talking "poor mouth;" and modify laws to being Plain English so that there can exist bright lines that enable transparency, enforcement, and whistle-blowing (self-regulation).
What of Foreign Policy?
Well, sir, as Isolationist as my instinct are, the reality is that the actual value of the average fiat currency dollar in your pocket whizzes around the world once a day or more.
Therefore it begs definition that there really are no "Isolationists," anymore, and further no major power in the post-industrial economy could afford to be.
As in the article great minds, and Gordon Brown (who I admire, has a great mind, but is the Prime Minister-- so you have to have a cup of salt around for anything he will say, in spite of the fact that he was after all the Chancellor {Finance Minister} for Blair), are calling for a new Unification of the monetary system-- they refer to it as Bretton-Woods III.
I mentioned before that there needs to be a swords to plowshares mentality in the world for there to be avoided some great depression, and the penchant to harmonize and unify is a deep instinct among we human beings. That said, let us examine that there really hasn't been a "Free Market" in currency in modern times.
One good reason is that if you look at the aftermath of The Great War (WWI), The German Mark was deeply punished by the victors and was only brought out of depression by making ready for WWII-- Bretton Woods "I" aside. Currency and collusion between allies against a smaller nation can be a form of War.
On the other hand creating a Universal Fiat would essentially strip many powers of nations to regulate their economic and financial policy decisions... which is the consequence of losing a War, so is essentially a non-starter.
Therefore, as I mentioned before, Trade Zones and the trading parties should have the ability to create Defensive alliances (as in the creation of "Greece"), and conversely current Defensive Alliances (NATO, et. al.) should have the ability to create currency agreements in order to buy and sell at discount, prop up weaker economies in the alliance, and "attack" other economies.
If you remove the warfare from currency, then you will create a greater warfare (most probably, goes my thinking), so you must allow for regulated and controlled violence of the market that can be appropriately contained.
Simultaneous to these exceptions (for instance if NATO agrees it is a dollar denominated Alliance, then all decisions are made in dollars by that Alliance, even though some of those allies might rule in Euros, Pounds, etc.) should be bright line rules of the game for a semi-free form currency market which allows for nations to set policy (such a false rate of Yuan or Yen) towards their own betterment, yet somehow hold them to account. If for instance the Chinese insist in undervaluing their currency to increase exports, the deficits can not enjoy a knock on by the false values. This doesnt mean the Importing nation can not enjoy the discount on goods or services, but it does mean that the reconciliation of Real-versus-Declared value would suffer. (Hence those NATO Allies in that theoretical dollar denominated Defense would still be subjected to the Real Weight of the Dollar according to the rules, and thus affect the larger Commercial Economy.)
I threw out a lot of complex ideas which may not entirely make sense to even studied economists, because I am using my knowledge-- and a lot of it I didnt just get from reading books.
As for what a new Administration can do, well like others, I await the breath of fresh air (as did the G-20 last weekend).
Friday, November 7, 2008
Memo from the Peanut Gallery to President Elect Obama's Economic Team
There are a multitude of complex issues to grapple with which separate and as a whole are unprecedented.
Great minds and scholars have been hard pressed for solid answers amidst the crisis.
So the few relevant words from a man who has barely cobbled a career from giving advice on real estate, mortgages, and finance is probably pretty low on any priority list, let alone item on the agenda.
Yet here in my own fantasy world known as my blog, I first have to point out this item from June 26th, which clearly defines some of the precipitous issues as it relates to market speculation and its forthcoming consequences as warned in other articles.
Next I would like to point out this article/commentary from 2007 which illustrates clearly the point of view of a humble and honest broker well before the Fannie-Freddy debacle.
And as this is my first commentary on economics and policy since the events of September 15th (a day which will live in infamy), please let me first make plain my assessment of the outgoing W administration, and secondarily the up shot of the Republican's as leadership:
1. The Soviet Union was founded upon less of a Nationalization of private wealth than as what has occurred in the "bailout" package.
2. Unlike the Soviets overtaking means for Production, this is similar to the mulligan that Enron took (Bankruptcy protection) after siphoning off billions of dollars from consumers and state purchasers (notably California).
3. If I was to make the argument that the solution(s) posited by the W administration's Paulson to Republican/Conservative people any time in my life starting in 1970 through to the "Bail out package," I would be considered a 'Commie,' 'Pinko,' or at best 'Looney Liberal.' Luckily I dont believe this is the best solution, although a necessary minimum of confidence was restored to the capital markets.
4. Although anti-free marketers are quick to assert this is proof that its a failure of free market concepts, unfortunately its not quite that simple. True free market principles would then suggest that we allow Wall Street to shatter into a million pieces, and allow the Phoenix of the Invisible Hand to rise from those ashes. The risk of Anarchy, Revolution, and War should not be a hinderance to those stoutest in defense of these principlea.
Rather what has happened is that the curtain has been unveiled upon the Wizard of Oz. Or more accurately Wizards: Power Elite; Ultra Rich; Super Rich; and their operatives... and as Gomer Pyle would say, "Sooprize sooprize," the W administration fits neatly into that last category (if not others).
The doctrine known as "free market," and, often as not, ascribed to as "trickle down," has been a fallacy waiting to happen since I took Economics in 1986 from my perspective. The fallacy is that the pitch (or soccer field to define the metaphor more readily) is absolutely not level (a lack of transparency of markets, trades, and companies-- let alone parity amongst status of trading parties), everyone knows this, but the referees (power elite) assure us that indeed the market is trading at a free clip, and they are doing their best to weed out the inept and destructive government (singular as in government is bad) in order to get back to those players to whom that unfair pitch advantage works against.
It is, like many convincing fallacies, a perfect ecosystem of utter nonsense.
What was revealed when the Wizard came out from behind the curtain?
The rules of the road were designed to insulate power elites from those market forces that every small business owner (not suckling directly from the teat of one or more of the power elite) faces yearly, monthly, daily, hourly, and even at a moment by moment level, wherein one bad decision can have the whole house of cards tumble down on them, their employees, and their families.
Perfect capitalism for 96% of the business owners in America, and pure communism for the ~4% that retain ~92% of the wealth and direction of capital.
The main difference here? That fallacy of "perfect" and "free" markets has been unmasked. For me it doenst make me less of a Keynesian or Miltonian (of which I am only some part in either case), rather confirms the sound logic of truth found within the mathematical models.
For all practical reasons, it wasnt the theories that were flawed, rather the implementation of those theories. You dont go golfing with Tiger Woods, and on holes 3, 7, and 12 receive a "0" on your score (an impossibility), then go on to say you bested Tiger Woods at Augusta for the Championship!
For lack of a simpler explanation that is what Corporate America has been doing for decades!
My Miltonian Tax suggestion of reducing tax paperwork to the size of a postcard, is premised on the fact that massive corporations with armies of lawyers can end up getting paid by the government, whereas the business owner will typically pay between 12 and 44% of GROSS EARNINGS in a profitable year to the Government!
LEVEL THE PLAYING FIELD, PLEASE!!!
So, what are my suggestions?
A. Simple, Fair, and Flat Tax for individuals, businesses, and everyone and everything in between. I think if you make annually inflation adjusted exemption provisions for the first $22K individually, $38K jointly, $6K per child, and $40K for business plus $6K per employee, then a 13% flat across the board on first moneys and profits tax should suffice to amply maintain the Federal treasury. Double tax only counts in certain specific cases, but honestly the concept of a "double tax" is in itself a product of the Labyrinthine tax laws themselves. Simple, plain, and honest: You earn money, invest it and make more... you are taxed on the money you earn. So called "death" tax is a myth, and any exemption should be put onto a matrix which allows for inflation and number of legatees, but otherwise massive fortunes do need to have the same 13% (a lowering of current complex statues) flat tax after expemptions upon transfer of estate.
B. All regulation needs to be put into Plain English. There needs to be a rule book for all people that everyone who speaks a 7th grade level of English can understand, but moreover, each field of employ and oversight needs a smaller and comprehensive annual rule book for the relevant profession(s). If you are a Stock Broker, for instance, the SEC needs to publish a Plain English Guide to all relevant laws (including definitions of crime and punishment) which is the basis for testing and licensure. How do we expect companies to follow laws their people couldnt understand without a law degree? This will facilitate whistleblowing, self governance, and enforcement. (On that note free markets if given clear straight, and bright lines do have the ability to self govern.)
C. International Harmonization. Its well time to beat our swords into plowshares. NATO can also be an economic body which assists in (a la Bretton-Woods) harmonizing economic functions. Why limit it to NATO? Trade Areas can work, and do work. However, just as we need to (for lack of a better word) admit that NATO is also an economic force, we also need to create Fair Standards in order to proceed honestly with our Trading Partners-- applying that standard basket of goods (environment, civil rights, and labor standards) as a preset disposition for negotiations. If any free trading regions partners can all agree to certain basic workers rights, then there is no price advantage to using slave or child labor in order to queer the productivity quotients and balances. This esoteric set of ideas (which I have simply called Fair Standards) is the nutshell of why we have lost so many jobs over seas-- not just "tax advantages" as certain groups would have you believe.
D. Mortgage Relief. I will be writing a more defined explanation of this soon, but here it is in the nutshell version. There are many of the steps necessary to implement a comprehensive relief in place under the current "bailout" plans passed, but my addition would be EVERYONE NEEDS TO FEEL SOME OF THE PAIN. Borrowers should still be on the hook for the full amount of the mortgage when enjoying payment reduction, Lenders should be on the hook to not get their money back in time, and all the middlemen, servicing agencies, and investors need to accept such bi-lateral intervention (as negotiated in mathematical formulation by the FFT [Fannie-Freddy-Treasury] guidelines and agents) regardless of how much money they stand to lose-- BECAUSE THEY ARE JUST MIDDLEMEN! Investors, sorry, but tough turkeys, you put money on those bets, were told the money was at risk, otherwise the SEC and FBI can arrest the brokers for non-disclosure... that said I think most licensees put investment disclosures on their business cards (a financial industry joke). The Government should tread very lightly in using its power to "renegotiate" existing agreements, and that said it is the Lenders right to refuse a renegotiation and foreclose... otherwise we strip Rule of Law (and contracts).
E. Stimulus. See my article on what we can do with the money we save by ending the War. more... more....
Just my two cents.... you can pay me later.
Great minds and scholars have been hard pressed for solid answers amidst the crisis.
So the few relevant words from a man who has barely cobbled a career from giving advice on real estate, mortgages, and finance is probably pretty low on any priority list, let alone item on the agenda.
Yet here in my own fantasy world known as my blog, I first have to point out this item from June 26th, which clearly defines some of the precipitous issues as it relates to market speculation and its forthcoming consequences as warned in other articles.
Next I would like to point out this article/commentary from 2007 which illustrates clearly the point of view of a humble and honest broker well before the Fannie-Freddy debacle.
And as this is my first commentary on economics and policy since the events of September 15th (a day which will live in infamy), please let me first make plain my assessment of the outgoing W administration, and secondarily the up shot of the Republican's as leadership:
1. The Soviet Union was founded upon less of a Nationalization of private wealth than as what has occurred in the "bailout" package.
2. Unlike the Soviets overtaking means for Production, this is similar to the mulligan that Enron took (Bankruptcy protection) after siphoning off billions of dollars from consumers and state purchasers (notably California).
3. If I was to make the argument that the solution(s) posited by the W administration's Paulson to Republican/Conservative people any time in my life starting in 1970 through to the "Bail out package," I would be considered a 'Commie,' 'Pinko,' or at best 'Looney Liberal.' Luckily I dont believe this is the best solution, although a necessary minimum of confidence was restored to the capital markets.
4. Although anti-free marketers are quick to assert this is proof that its a failure of free market concepts, unfortunately its not quite that simple. True free market principles would then suggest that we allow Wall Street to shatter into a million pieces, and allow the Phoenix of the Invisible Hand to rise from those ashes. The risk of Anarchy, Revolution, and War should not be a hinderance to those stoutest in defense of these principlea.
Rather what has happened is that the curtain has been unveiled upon the Wizard of Oz. Or more accurately Wizards: Power Elite; Ultra Rich; Super Rich; and their operatives... and as Gomer Pyle would say, "Sooprize sooprize," the W administration fits neatly into that last category (if not others).
The doctrine known as "free market," and, often as not, ascribed to as "trickle down," has been a fallacy waiting to happen since I took Economics in 1986 from my perspective. The fallacy is that the pitch (or soccer field to define the metaphor more readily) is absolutely not level (a lack of transparency of markets, trades, and companies-- let alone parity amongst status of trading parties), everyone knows this, but the referees (power elite) assure us that indeed the market is trading at a free clip, and they are doing their best to weed out the inept and destructive government (singular as in government is bad) in order to get back to those players to whom that unfair pitch advantage works against.
It is, like many convincing fallacies, a perfect ecosystem of utter nonsense.
What was revealed when the Wizard came out from behind the curtain?
The rules of the road were designed to insulate power elites from those market forces that every small business owner (not suckling directly from the teat of one or more of the power elite) faces yearly, monthly, daily, hourly, and even at a moment by moment level, wherein one bad decision can have the whole house of cards tumble down on them, their employees, and their families.
Perfect capitalism for 96% of the business owners in America, and pure communism for the ~4% that retain ~92% of the wealth and direction of capital.
The main difference here? That fallacy of "perfect" and "free" markets has been unmasked. For me it doenst make me less of a Keynesian or Miltonian (of which I am only some part in either case), rather confirms the sound logic of truth found within the mathematical models.
For all practical reasons, it wasnt the theories that were flawed, rather the implementation of those theories. You dont go golfing with Tiger Woods, and on holes 3, 7, and 12 receive a "0" on your score (an impossibility), then go on to say you bested Tiger Woods at Augusta for the Championship!
For lack of a simpler explanation that is what Corporate America has been doing for decades!
My Miltonian Tax suggestion of reducing tax paperwork to the size of a postcard, is premised on the fact that massive corporations with armies of lawyers can end up getting paid by the government, whereas the business owner will typically pay between 12 and 44% of GROSS EARNINGS in a profitable year to the Government!
LEVEL THE PLAYING FIELD, PLEASE!!!
So, what are my suggestions?
A. Simple, Fair, and Flat Tax for individuals, businesses, and everyone and everything in between. I think if you make annually inflation adjusted exemption provisions for the first $22K individually, $38K jointly, $6K per child, and $40K for business plus $6K per employee, then a 13% flat across the board on first moneys and profits tax should suffice to amply maintain the Federal treasury. Double tax only counts in certain specific cases, but honestly the concept of a "double tax" is in itself a product of the Labyrinthine tax laws themselves. Simple, plain, and honest: You earn money, invest it and make more... you are taxed on the money you earn. So called "death" tax is a myth, and any exemption should be put onto a matrix which allows for inflation and number of legatees, but otherwise massive fortunes do need to have the same 13% (a lowering of current complex statues) flat tax after expemptions upon transfer of estate.
B. All regulation needs to be put into Plain English. There needs to be a rule book for all people that everyone who speaks a 7th grade level of English can understand, but moreover, each field of employ and oversight needs a smaller and comprehensive annual rule book for the relevant profession(s). If you are a Stock Broker, for instance, the SEC needs to publish a Plain English Guide to all relevant laws (including definitions of crime and punishment) which is the basis for testing and licensure. How do we expect companies to follow laws their people couldnt understand without a law degree? This will facilitate whistleblowing, self governance, and enforcement. (On that note free markets if given clear straight, and bright lines do have the ability to self govern.)
C. International Harmonization. Its well time to beat our swords into plowshares. NATO can also be an economic body which assists in (a la Bretton-Woods) harmonizing economic functions. Why limit it to NATO? Trade Areas can work, and do work. However, just as we need to (for lack of a better word) admit that NATO is also an economic force, we also need to create Fair Standards in order to proceed honestly with our Trading Partners-- applying that standard basket of goods (environment, civil rights, and labor standards) as a preset disposition for negotiations. If any free trading regions partners can all agree to certain basic workers rights, then there is no price advantage to using slave or child labor in order to queer the productivity quotients and balances. This esoteric set of ideas (which I have simply called Fair Standards) is the nutshell of why we have lost so many jobs over seas-- not just "tax advantages" as certain groups would have you believe.
D. Mortgage Relief. I will be writing a more defined explanation of this soon, but here it is in the nutshell version. There are many of the steps necessary to implement a comprehensive relief in place under the current "bailout" plans passed, but my addition would be EVERYONE NEEDS TO FEEL SOME OF THE PAIN. Borrowers should still be on the hook for the full amount of the mortgage when enjoying payment reduction, Lenders should be on the hook to not get their money back in time, and all the middlemen, servicing agencies, and investors need to accept such bi-lateral intervention (as negotiated in mathematical formulation by the FFT [Fannie-Freddy-Treasury] guidelines and agents) regardless of how much money they stand to lose-- BECAUSE THEY ARE JUST MIDDLEMEN! Investors, sorry, but tough turkeys, you put money on those bets, were told the money was at risk, otherwise the SEC and FBI can arrest the brokers for non-disclosure... that said I think most licensees put investment disclosures on their business cards (a financial industry joke). The Government should tread very lightly in using its power to "renegotiate" existing agreements, and that said it is the Lenders right to refuse a renegotiation and foreclose... otherwise we strip Rule of Law (and contracts).
E. Stimulus. See my article on what we can do with the money we save by ending the War. more... more....
Just my two cents.... you can pay me later.
Thursday, June 19, 2008
Learning From Floods
I was heartened to see an article which clearly spelled out the point of view long held by many environmentalists and Native Americans regarding the management of lands along the Mississippi; click
Settlers well documented their efforts to drain the swamps of Iowa, and other places along the great river. click
Is it time to take a clear approach to land management, yet?
When it is the consensus view that land management is a National issue, I and how many others I am unsure are here and ready for that correction of vision and consensus, as it relates to our connection and stewardship of this planet.
When we are truly ready to step up to the plate in a comprehensive manner, we would have to address the issue of using, storing, transporting, and disposing of toxins in sensitive wetland, watershed, and high water table areas.
Floods in Louisiana, and now recent flooding has provided a real, serious, and accurate depiction of the problem. This is another opportunity for our people and its government to learn from its mistakes. click
The industrial agricultural techniques, which rely on chemicals that are in concentration, or combination harmful to water need to be eliminated from sensitive water table zones, and reduced in general for the sake of our hydrosphere click
The industrial farm techniques, which concentrate animal wastes, also considered a major source of global warming “greenhouse” gases, rather than effectively manage the waste stream must also be reconsidered. More so, such masses of effluent should be better contained in general, and not stored on or near water sources and water table (or Phreatic) zones.
Although it may take the better part of what is left in this century to totally create a non-toxic consumer culture, the toxic sludge created in flood zones is arguably an excellent negative example of how the things we store in our garage to make our lives, houses, and vehicle go need to be utilizing non-toxic and biodegradable substances (see IV.D. but the rest is fascinating click )
Even recent studies on flame-retardants in our furniture demonstrate the highly toxic nature and transferability of such toxins, and this is the same stuff that seeps into waters that flood houses. click
Building materials contain hazardous substances that when combined with water are harmful to the environment.
And modern automobiles, aside from their fuel-inefficiencies, and other inefficiencies, are also a hodgepodge of chemical substances in terms of construction and required fluids. click
So, when you dunk this toxic tea bag of a typical American farm, suburb, or city into 4, 8, 12, or more feet of water for a period of hours, days, and even weeks at the end of the day you get a toxic sludge which can only be absorbed by the environment in three direction— water, air, or land.
We drink the water, we breathe the air, and we eat food from the ground. Talk from farmers struck by these floods is phenomenal in its ignorance, as in ignoring science, when they mention replanting these same fields with food crops. Those crops will absorb some parts of the pollution, and that goes into the food system. Therefore, faulty levees are a food security issue, but its not the levees fault entirely.
These toxins are dangerous to our health, and therefore the rebuilding along major waterways, water sources, and water table zones becomes a matter of not just public health and safety but National Security.
In every crisis there is an opportunity. We need to carefully consider rebuilding along areas that have been flooded, and take this as a major opportunity for long-term planning, coordinated efforts to create a less (if not entirely non-) toxic building standards, and clearly permit what can and can’t be done on these flood plains.
Farming, Families, and Cities can co-exist in harmony with the Great River. She has taken care of us, and now it is our turn to seriously consider how we are treating her.
Settlers well documented their efforts to drain the swamps of Iowa, and other places along the great river. click
Is it time to take a clear approach to land management, yet?
When it is the consensus view that land management is a National issue, I and how many others I am unsure are here and ready for that correction of vision and consensus, as it relates to our connection and stewardship of this planet.
When we are truly ready to step up to the plate in a comprehensive manner, we would have to address the issue of using, storing, transporting, and disposing of toxins in sensitive wetland, watershed, and high water table areas.
Floods in Louisiana, and now recent flooding has provided a real, serious, and accurate depiction of the problem. This is another opportunity for our people and its government to learn from its mistakes. click
The industrial agricultural techniques, which rely on chemicals that are in concentration, or combination harmful to water need to be eliminated from sensitive water table zones, and reduced in general for the sake of our hydrosphere click
The industrial farm techniques, which concentrate animal wastes, also considered a major source of global warming “greenhouse” gases, rather than effectively manage the waste stream must also be reconsidered. More so, such masses of effluent should be better contained in general, and not stored on or near water sources and water table (or Phreatic) zones.
Although it may take the better part of what is left in this century to totally create a non-toxic consumer culture, the toxic sludge created in flood zones is arguably an excellent negative example of how the things we store in our garage to make our lives, houses, and vehicle go need to be utilizing non-toxic and biodegradable substances (see IV.D. but the rest is fascinating click )
Even recent studies on flame-retardants in our furniture demonstrate the highly toxic nature and transferability of such toxins, and this is the same stuff that seeps into waters that flood houses. click
Building materials contain hazardous substances that when combined with water are harmful to the environment.
And modern automobiles, aside from their fuel-inefficiencies, and other inefficiencies, are also a hodgepodge of chemical substances in terms of construction and required fluids. click
So, when you dunk this toxic tea bag of a typical American farm, suburb, or city into 4, 8, 12, or more feet of water for a period of hours, days, and even weeks at the end of the day you get a toxic sludge which can only be absorbed by the environment in three direction— water, air, or land.
We drink the water, we breathe the air, and we eat food from the ground. Talk from farmers struck by these floods is phenomenal in its ignorance, as in ignoring science, when they mention replanting these same fields with food crops. Those crops will absorb some parts of the pollution, and that goes into the food system. Therefore, faulty levees are a food security issue, but its not the levees fault entirely.
These toxins are dangerous to our health, and therefore the rebuilding along major waterways, water sources, and water table zones becomes a matter of not just public health and safety but National Security.
In every crisis there is an opportunity. We need to carefully consider rebuilding along areas that have been flooded, and take this as a major opportunity for long-term planning, coordinated efforts to create a less (if not entirely non-) toxic building standards, and clearly permit what can and can’t be done on these flood plains.
Farming, Families, and Cities can co-exist in harmony with the Great River. She has taken care of us, and now it is our turn to seriously consider how we are treating her.
Thursday, June 5, 2008
How does The Rattlesnake Party expect to pay for so many Major Projects at the same time?
First, by ending our failed Imperialist experiment in Iraq. Here’s the math:
Manhattan Project Cost in 2008 dollars = $30BB over 5 years or $6BB per year
Apollo Program Cost in 2008 dollars = $150BB over 13 years or $12BB per year
Average Cost of Major Program is estimated at roughly $9BB per year
Cost of the Iraq War in 2008 dollars = $125BB per year or
The capacity for 10 Major Programs, Infrastructure Improvements, Health Care, and an additional $10 ~ 15BB into the General Fund—or reduction in net tax revenues!
Next, by streamlining tax codes (see Fair and Simple Tax) to close all loopholes, taxes would be effectively lowered for most businesses and citizens, yet some of the largest corporations would be required to pay their fair share and/or repatriate their dollars. In conjunction with reduction of waste and corruption in Federal Government, this would most probably result in a net gain in revenues. Let us assume, however, no change, in tax revenues collected, and no boost to the economy at large by freeing up millions of man-hours currently burdened by tax calculations every year.
Part of the streamlining efforts would also be to better organize and coordinate CURRENT AGENCIES to improve government functions. Parallel to that complex process, the Federal Government could work with CURRENT BENEFICIARIES of government grants, funds, and assistance to coordinate their efforts.
An example of this would be Food (number 6 on our top ten list). The relevant agencies would be reorganizing their budgets according to the list of National Priorities, which the Major Projects represent. So technically Food Security needs to be a relatively High Priority for Homeland Security; Nutrition and Content moreso the FDA; Production means and methods even moreso the Dept. of Agriculture; and so on.
We don’t want to continue the current deficit spending, so even with the War Savings, Budget Reprioritization and Optimization, and the Intra-Departmental task efficiencies lets assume that for each Major Project and it’s priorities only 85% of the budget is actually already there.
We would suggest under current ostensible Department configurations the budget is actually already there albeit currently balkanized and politicized with no harmonious or unifying vision throughout the agencies and their spending habits extant.
Any short falls could be made up by venturing with private companies currently spending private moneys in Research and Development, but more importantly removing some of the redundancies by efficient coordination and sharing of data within a secure study group setting.
Further efficiencies could be found in cross-mission coordination and “pollination” for Major Projects. For instance, Project #2 Pollution Abatement would rely on coordination with and information from Projects #’s 9, 5, and 1 (Vehicles, Energy Independence, and Global Warming). By allowing non-classified, and restricted information to securely pass between the Projects, redundancies are reduced offering greater purchase power for the Government and Joint Venture Partners. This suggests a controlled system, or a massive Government-seeded Intellectual Incubator System.
One could argue this could slip into a communist or socialist state model, except there is no compulsory component for any companies or citizens to participate, as such. However, it would be up to the Project Coordinators in conjunction with OBM to carefully budget to incentivize Private Partnerships.
For example, in Curing Cancer (number 3), lets assume Big Pharma Company #1 continues current practices of hording research data and drug planning, and Big Pharma Company #2, a direct competitor, elects to join the Major Project Group searching for Cancer cures and interacts in a transparent manner to coordinate all its results with that of other companies participating in the larger goal(s).
Both companies will be subject to the same market forces. We believe that FDA testing must be reorganized towards a scientific, rather than political, polarity; We believe that the government, medical organizations, and individual citizens should be allowed to purchase drugs made in a regulated, verifiable, and safe manner from anywhere that has the lowest price (fair and free market values); and we can see a precipitous momentum towards some version of state sponsored (so-called Single Payer) health care (sooner or later… and although quasi-socialist at best, it would create competitive equity between the current advantage over 75% of the Industrialized world holds over America in terms of their corporate subsidy, a virtual reverse tariff, from some version of Single Payer extant in those same states). Therefore, both companies will have to really spend a lot of money over time to develop the next phase of Cancer treatment, while continuing to earn fewer and fewer dollars on current drugs they created, as market forces intervene to reduce profits.
Company #2, participating in this continued example with the Major Project in some well defined and standard Joint Venture Process, may simultaneously accelerate its results by obtaining confidential data sets from others in its study and data groups, expect some additional assistance financially, cost reductions through efficiencies of scale, and discover joint cause products (an improvement on current processes or products) with other JV companies participating within the Major Project Group.
That distinct advantage costs them no less of their R&D budget than Company #1, but it stretches their dollar and purchase power out in such a way that even at a minimum the benefits to their company is a reasonable trade off when looking at the BCA. Moreover, it would probably allow them tax credit opportunities in certain cases, and open up the possibility to additional joint venture partnerships and product cross-pollination.
The downside to this private-public model for Major Projects is that any and every company, which is expending capital into any Venture, must relinquish the scarcity mentality.
Like the “Manhattan Project” and “Apollo Project” before, it is possible to imagine a reasonable level of internal confidentiality and National Security via compartmentalization, management, and coordination. That said, by making open in a controlled and restricted environment their data sets, some propriety is lost in exchange for more chances at additional propriety, product innovation, and most importantly SERVICE TO THE HIGHER GOOD.
Manhattan Project Cost in 2008 dollars = $30BB over 5 years or $6BB per year
Apollo Program Cost in 2008 dollars = $150BB over 13 years or $12BB per year
Average Cost of Major Program is estimated at roughly $9BB per year
Cost of the Iraq War in 2008 dollars = $125BB per year or
The capacity for 10 Major Programs, Infrastructure Improvements, Health Care, and an additional $10 ~ 15BB into the General Fund—or reduction in net tax revenues!
Next, by streamlining tax codes (see Fair and Simple Tax) to close all loopholes, taxes would be effectively lowered for most businesses and citizens, yet some of the largest corporations would be required to pay their fair share and/or repatriate their dollars. In conjunction with reduction of waste and corruption in Federal Government, this would most probably result in a net gain in revenues. Let us assume, however, no change, in tax revenues collected, and no boost to the economy at large by freeing up millions of man-hours currently burdened by tax calculations every year.
Part of the streamlining efforts would also be to better organize and coordinate CURRENT AGENCIES to improve government functions. Parallel to that complex process, the Federal Government could work with CURRENT BENEFICIARIES of government grants, funds, and assistance to coordinate their efforts.
An example of this would be Food (number 6 on our top ten list). The relevant agencies would be reorganizing their budgets according to the list of National Priorities, which the Major Projects represent. So technically Food Security needs to be a relatively High Priority for Homeland Security; Nutrition and Content moreso the FDA; Production means and methods even moreso the Dept. of Agriculture; and so on.
We don’t want to continue the current deficit spending, so even with the War Savings, Budget Reprioritization and Optimization, and the Intra-Departmental task efficiencies lets assume that for each Major Project and it’s priorities only 85% of the budget is actually already there.
We would suggest under current ostensible Department configurations the budget is actually already there albeit currently balkanized and politicized with no harmonious or unifying vision throughout the agencies and their spending habits extant.
Any short falls could be made up by venturing with private companies currently spending private moneys in Research and Development, but more importantly removing some of the redundancies by efficient coordination and sharing of data within a secure study group setting.
Further efficiencies could be found in cross-mission coordination and “pollination” for Major Projects. For instance, Project #2 Pollution Abatement would rely on coordination with and information from Projects #’s 9, 5, and 1 (Vehicles, Energy Independence, and Global Warming). By allowing non-classified, and restricted information to securely pass between the Projects, redundancies are reduced offering greater purchase power for the Government and Joint Venture Partners. This suggests a controlled system, or a massive Government-seeded Intellectual Incubator System.
One could argue this could slip into a communist or socialist state model, except there is no compulsory component for any companies or citizens to participate, as such. However, it would be up to the Project Coordinators in conjunction with OBM to carefully budget to incentivize Private Partnerships.
For example, in Curing Cancer (number 3), lets assume Big Pharma Company #1 continues current practices of hording research data and drug planning, and Big Pharma Company #2, a direct competitor, elects to join the Major Project Group searching for Cancer cures and interacts in a transparent manner to coordinate all its results with that of other companies participating in the larger goal(s).
Both companies will be subject to the same market forces. We believe that FDA testing must be reorganized towards a scientific, rather than political, polarity; We believe that the government, medical organizations, and individual citizens should be allowed to purchase drugs made in a regulated, verifiable, and safe manner from anywhere that has the lowest price (fair and free market values); and we can see a precipitous momentum towards some version of state sponsored (so-called Single Payer) health care (sooner or later… and although quasi-socialist at best, it would create competitive equity between the current advantage over 75% of the Industrialized world holds over America in terms of their corporate subsidy, a virtual reverse tariff, from some version of Single Payer extant in those same states). Therefore, both companies will have to really spend a lot of money over time to develop the next phase of Cancer treatment, while continuing to earn fewer and fewer dollars on current drugs they created, as market forces intervene to reduce profits.
Company #2, participating in this continued example with the Major Project in some well defined and standard Joint Venture Process, may simultaneously accelerate its results by obtaining confidential data sets from others in its study and data groups, expect some additional assistance financially, cost reductions through efficiencies of scale, and discover joint cause products (an improvement on current processes or products) with other JV companies participating within the Major Project Group.
That distinct advantage costs them no less of their R&D budget than Company #1, but it stretches their dollar and purchase power out in such a way that even at a minimum the benefits to their company is a reasonable trade off when looking at the BCA. Moreover, it would probably allow them tax credit opportunities in certain cases, and open up the possibility to additional joint venture partnerships and product cross-pollination.
The downside to this private-public model for Major Projects is that any and every company, which is expending capital into any Venture, must relinquish the scarcity mentality.
Like the “Manhattan Project” and “Apollo Project” before, it is possible to imagine a reasonable level of internal confidentiality and National Security via compartmentalization, management, and coordination. That said, by making open in a controlled and restricted environment their data sets, some propriety is lost in exchange for more chances at additional propriety, product innovation, and most importantly SERVICE TO THE HIGHER GOOD.
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