Disqus - Latest Comments for Bill

Re: Intellectual Perspective

Bill — Tue, 03 Nov 2009 20:45:02 -0000

None, Vid. That's the problem.

Anyone who thinks this is a free country has obviously never received a jury duty summons where the state has the ability under penalty of prison to yank you from your life - regardless of what's going on - and force you to serve the state as the state pleases. The system is corrupt and I think it's too far gone. Our only hope is to slow the slide into tyranny.

That's my cheery take on it.

Re: Reader Question: Should I Have a Roth IRA?

Bill — Sat, 07 Jul 2007 09:50:32 -0000

The other alternative is the Roth 401(k), which many companies will be instituting in the next year. It allows people to put money into a Roth account without hitting the income limits.

Re: A decentralized Twitter? (Scripting News)

Bill — Thu, 17 Jan 2008 17:44:35 -0000

Would a decentralized twitter be pretty much the same as IRC?

Re: The Harvard Crimson :: Sports :: Ivies Lose Without Post-Season Play

Bill — Sat, 15 Mar 2008 17:07:36 -0000

I will grand the writer this much: a coin flip is a horrible way to determine playoff matchups. At least the league should go by overall record, which coincidentally would not change this year's result: Cornell (19-8) gets the winner of Harvard (18-10) v. Dartmouth (14-14). Fair enough. But this is not justification for a tournament.

The Ivy League plays a full round-robin schedule. That gives every team an equal opportunity to win. If the NCAA tournament bid is about "rewarding players and fans for a good season," what exactly is the problem with giving it to the team who wins the most games against the other teams? What has Brown done to deserve a third shot at Cornell? They lost to the Red twice. Your argument that if Cornell is really that good they would win the tournament anyway is asinine. Cornell was two whistles away from losing to Penn at the Palestra and it is not much of a stretch to think they could lose to the Quakers in a theoretical 1-4 semifinal matchup in some godforsaken gym in central Connecticut where this thing would probably be played. So Penn (13-18) ends up playing Yale (13-15) for the NCAA bid. Explain to me now who is exactly being rewarded for having a good season here?

That Penn and Princeton have historically dominated and Cornell won this year is not a result of the "system" but rather because other programs have not fielded good enough teams to compete. Cornell figured this out. They didn't complain about the system, they got good players and built a very good team. That Harvard has never won a championship in men's basketball is no one's fault but Harvard's. Just win the games. It's really that simple. And you really don't need to commit NCAA violations to do that.

Re: A Word from Me

Bill — Mon, 08 Dec 2008 04:25:39 -0000

Streeter,

Has it occurred to you that perhaps this site has devolved because it is somewhat insulting and not all that funny? The more appropriate subtitle to this site would be "A new rich person complaint every day of the week," although of course "Rich Whine" doesn't have quite the same ring to it. But at least then it would be demographically accurate. What I'm trying to say is, you make a fundamental error assuming that it is specifically white folks who are "spoiled" and love those expensive things; whereas in actuality it is the mid-to-upper classes, which easily includes some Asian-American and African-American populations as well.

Not all white people can afford iphones, yoga classes, five course restaurant meals, massages, beach houses, etc, etc. I certainly can't, and it irks me to no end when non-Caucasian individuals look at me and assume that I'm some spoiled rich person due to the color of my skin. They don't like people judging them based on their skin color; well, I don't either. Websites like yours obviously don't help these white person stereotypes. In reality, I grew up below the poverty line, but of course since I'm white it's "impossible" that I grew up poor, huh? Go figure. Let's just conveniently ignore all those poor white folks in the trailer parks. If we don't approve of African-American stereotypes, or Jewish stereotypes, etc., then I'd like to know what makes Caucasian stereotypes okay in your book.

Anyhow, I think your presumptions here may be a contributing factor to the general disrespect this site seems to have garnered.

Sincerely,

Non-Wealthy White Person

Re: Freddie Mac spent early and often to avoid regulation

Bill — Mon, 08 Dec 2008 07:39:09 -0000

Weren't angry-white-woman Susan Molinari and Newtie among the leading Rethug talking heads who put out the demonizing of Freddie Mac as the scary lenders to black people?

Shouldn't there be an online record of the way they took this money and then threw their former clients under the bus in the election campaign?

Re: Who cares about Rick Warren?

Bill — Fri, 26 Dec 2008 12:28:23 -0000

Oh for fucking fuck's sake.

No fucking way am I going to act like Pelosi and Reid, and stand there while every goddam wrong thing goes on and assure everyone we'll REALLY take the fight to them next time.

This time. Tomorrow is promised to no one. Tomorrow we will be fighting the re-criminalization of homosexuality if we do not fight the re-banning of gay marriage today.

How do I know? Because we are fighting the permanent burial of Cheney's crimes today because the nice docile Pelosi and Reid took Bush's crimes off the table last year.

What the fucking fuck?

Re: PlaySpan, run 12-year-old founder, gets $6.5M in venture capital

Bill — Wed, 26 Sep 2007 17:28:41 -0000

Rumor has it that the key to their success in raising VC has been having the "right look".
http://smartstartup.typepad.com/my_weblog/2007/...

Re: Has Bigfoot Been Found?

Bill — Wed, 13 Aug 2008 23:19:07 -0000

I like the part where they keep the location where they found the "creature" hushed to protect it!!! LOL! You think the "creature" went this long with out being captured/ spotted/ confirmed to exist. When you look at their web site it just screams scam!!! They are just giving everyone a nibble so everyone will bite when they ask for money here real soon. I would like this to be real just for the coolness factor, but we all know if they did in fact find one, it will be the beginning of the end for Big Foot. This will push people to fund expeditions all over the place to actually capture a living one so we can pay a nickel to throw some popcorn at it.

Re: The Answer To Gaming Piracy Was Perfected Over a Decade Ago

Bill — Mon, 15 Sep 2008 01:27:56 -0000

Blizzard rocks, even if the $15/month for WoW is still way too much. Good thing there's plenty of other (legally free) online games available!

Re: OhGizmo! » Archive » Haier WasH2O Cleans Clothes Without Detergent

Bill — Thu, 02 Aug 2007 10:32:16 -0000

Yeah, this washer works so well that it has TWO detergent drawers!

Re: Ragamuffin Soul » Only 40% Left!!!

Bill — Fri, 01 Aug 2008 00:01:45 -0000

Firefox 2 on my iMac. Works great. Firefox 3 on my work machine (Power Mac) is even snappier.

Re: Ragamuffin Soul » Caption Please - French Edition

Bill — Wed, 13 Aug 2008 14:19:36 -0000

"I promise this is last time you'll have to wear the speedo suit. I KNOW it's crushing your boys down below...don't cry...we're in this together."

Re: Liverpool FC News | Official KopTalk | LFC News

Bill — Sat, 29 Aug 2009 04:19:38 -0000

No wonder Babel didn't get the call!

Re: Bad COPP No Netflix

Bill — Tue, 08 Jan 2008 00:46:01 -0000

I have used a few DRM services.. all of them that I know of like iTunes.. keep a record of what you buy, which is more than block buster does if something gets damaged.

Confirm that if you reset the DRM you can then re-download the content and keep going.

Some one said hey itunes won't do this.. how many vendors does Apple license it DRM to? O ZERO.. as long as you only want to do business with Apple its a great system.

Re: SEC Seeking Public Feedback On Short Sale Price Test And Circuit Breaker Restrictions

Bill — Wed, 13 May 2009 23:02:10 -0000

"Now would be the perfect time to reinstate the uptick rule. Most of the rally is over so if the uptick rule is in place when the correction comes, it would end the debate once and for all."

That's very funny. the tech bubble crash, the 1970's market run ups and crashes and the 1987 crash all happened while the uptick rule was in place. Did that end the debate? No amount of logic will wipe the stupid from retail traders and that suits the market makers just fine as it creates rents for them - particularly in low to medium liquidity stocks. So, while I agree with your implication that the uptick rule is BS, we're outnumbered.

Re: SEC Seeking Public Feedback On Short Sale Price Test And Circuit Breaker Restrictions

Bill — Thu, 14 May 2009 10:22:04 -0000

Head,

Yes, creating your own uptick is one of the ways to get around the utpick rule. There are plenty of other ways as well. Let's just skip to the chase - The only people the uptick rule ever inconvenienced was Joe Blow retail guy. With the uptick rule as an excuse, his orders for low to medium liquidity stocks were routinely subject to the worst execution imaginable. The pros collected the rents Joe Blow was forced to pay. Yet, it's Joe who wants the uptick rule back. Go figure.

Re: Shorting These Stocks Is Now Verboten

Bill — Thu, 14 May 2009 18:04:54 -0000

They can only manipulate in the short term at the expense of the dummies the longs will be selling to. In the long run, the uncertainty about the real value of the shares will increase discount rates, increasing the cost of capital, decreasing economic activity and trading volume, increasing price volatility and driving listing and trading to less rigged exchanges.
And you know, what? I can see all of that happening. Viva la Banana Republic!

Re: The "Special Servicing" Problem

Bill — Thu, 14 May 2009 18:08:20 -0000

Don't worry. Obama announced today that he has a PLAN. Presumably, this plan is the real plan. The other plans were just practice.

That'll show the SRS who's boss.

Re: Mark Patterson: "It's A Sham. The Banks Are Insolvent"

Bill — Thu, 14 May 2009 22:13:24 -0000

WHAT?! Dim Geithner lied to us? I'm shocked. He looks so honest when he explains things while peering sideways at us at us from beneath his eyebrows.

This guy is brave. I expect he will have every imaginable financial regulator logged up his....fund for the rest of his life.

Re: Mark Patterson: "It's A Sham. The Banks Are Insolvent"

Bill — Thu, 14 May 2009 22:15:33 -0000

except that Bush moved much slower and his ideas weren't as totalitarian as Obama's. Other than that, there's really not much difference. Change I can believe in! Yippeeee.

Re: CT Attorney General: "It's Time To Shatter The Old Boys Club Of Rating Agencies"

Bill — Thu, 14 May 2009 22:21:32 -0000

The whole idea of creating a NRSROS oligopoly is polluted. It should be scrapped. Obviously, the reduction in competition this barrier to entry has not lead to better ratings and the SEC can't provide the oversight necessary to ensure better ratings.

Blumenthal is on the right side, but this guy too is a politically motivated disaster. He will do anything to get his name in the papers to further his political career. Let's not kid ourselves.

Re: Mark Patterson: "It's A Sham. The Banks Are Insolvent"

Bill — Thu, 14 May 2009 22:29:12 -0000

Never listen to a trader who has ever had a losing trade. Gotcha. Great plan.

Re: Daily Telegraph Removes Mark Patterson Interview

Bill — Fri, 15 May 2009 14:26:44 -0000

Wow. That confession looks like it was taken right out of Stalin's playbook.

This is predictable and scary.

Re: Time To Make The Federal Reserve Accountable For Its Actions

Bill — Thu, 21 May 2009 11:37:03 -0000

Agreed. This is the worst idea yet.

Making the Fed accountable to congress is NOT the same thing as making the Fed accountable to the people of the United States.

All of the problems the Fed creates stems from its central control of the currency. That problem won't be fixed by making it either transparent or answerable to congress. The American people won't understand what they're looking at and congress will understand even less.

Re: Soundview wading pool won’t open this summer

Bill — Wed, 20 May 2009 04:10:32 -0000

According to the Phinneywood blog, it will be closed all summer as well.

Re: Working on a Saturday?

Bill — Thu, 14 Jun 2007 23:47:15 -0000

This owl dude appears to spend all his time posting negative comments about Ferriss across the Net. Get a life, dude or dudette,

Re: TRL Day 1 Videos

Bill — Tue, 05 Aug 2008 17:11:10 -0000

The quality is much better than the usual cam videos. Thanks and congrats! But I'm guessing your original rip is even better. Would you mind uploading the original HQ version to a sharing site (like sendspace, megaupload etc.)? The flash versions on youtube won't survive this week anyway.

Re: tr.im to December 31, 2009

Bill — Mon, 10 Aug 2009 20:17:54 -0000

It's a shame your entire business model was predicated on twitter choosing your service over another. Were you simply assuming they'd switch from tinyurl to you based on your charming personality? Or by the fact that your Nambu client (which I use) pretends there are no other shortening services.

Please consider an open solution in the future. It will probably work out better.

Re: Thread

Bill — Sat, 01 Nov 2003 19:46:00 -0000

This Ginaforte guy must have read www.antiventurecapital.com. Excellent article. He gets it.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

The 3% who think their taxes are too low fascinate me. I wonder if they give the government extra when they pay their taxes. I bet not. Warren Buffet and Bill Gates don't.

I can't wait to see this graph again when they are all on 6 month waiting lists to see their physician about that lump they found and their taxes are hiked up to pay for all that free health care they have a right to. There aren't enough people making >$1MM who are dumb enough not to shelter the vast majority of that income or to just work less to avoid the 10% tax hike (bush cuts + surcharge) to pay for for their promised all-you-can-eat medical buffet.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

but I wouldn't be surprised at all if a lot of the "too low" category is your Warren Buffett types - exactly the kind of people that we're talking about raising taxes for.

No, that's not what you're talking about. The schmuck in New York City making $350K per year is in the same tax bracket as Buffet. The guy making $1MM per year is also not in the Billionaire's bracket. But you're looking to raise taxes on all of them. And who's this "we"? Are you finally giving up the charade and throwing yourself in with the socialists or did that just accidentally slip out from behind your mask?

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

So, Danny, it seems that all your claims of being misunderstood were really hollow after all. We all saw right through your back-peddling and sidestepping to your molten socialist core.

You are a would-be social engineer who will decide what other people's utility curve is and where their optimal return to money and impose it on them by confiscating anything above what YOU consider an adequate amount. You also believe that I somehow care or should care as much about you as I care about my family because you imagine in your overactive fantasy life that we have some common goal. I assure you that you mean nothing not only to me but to anyone on this blog either. And let me assure you in no uncertain terms that I don't have a single common goal with a socialist like you.

What I want to know is if you actually swallow your own bullshit or if you just peddle out to others in the hope they will. You sure have a butt-load of it.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Dan,

Who the heck are you to decide how much anyone gets to keep and who should pay more and who should pay less? What gives you that right - besides your amazing hubris?

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Danny,

If you don't want people inserting themselves into your conversations, have them privately.

But I'm fairly comfortable saying that everybody's utility curve is concave, and if that's true than a tax policy that equalizes marginal disutility across society has to be somewhat progressive.

Across society. So, the individual doesn't get to decide his own curve? He also doesn't get to decide how to disgorge his own wealth - it must be confiscated by the State because he is not an individual but a cog in the wheel of "society.

The ONLY thing I have to assume for that to be true is that you have a diminishing marginal utility for money.

No, the only thing you have to assume for that to be true is that the State ultimately owns every individual and can do with it what it pleases. To make that statement, you must hold that view.

I can't fathom why that's so offensive to you.

That's the problem.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

This is the last time I'm going to engage you on this if this is how you're going to approach the discussion.

I shaking in my boots. So far, you make a claim and then claim that not what you said. Maybe you should only talk to people who think you're brilliant

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Be very careful, John Dewey. Such misunderstanding of Danny's position may result in a good old fashioned shunning.

Did Danny say he had a socialist agenda? No. He only said that the rich perhaps need progressive taxes (because that's totally different from a surtax on high earners). See, somebody (with no agenda, obviously) decided we all have one optimal utility curve. Thus, since he has determined the money has negative value to you above that point, it only makes sense that Obama and Nancy Pelosi take it from you.

Sure, you could just start a charity with it or give it to a charity that you want to support and that might have some utility to you, but where's the government waste in that?

The important thing is that Danny is pretty sure that this is maybe his position but he doesn't really want to commit just in case he's misunderstood to be a socialist.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Moral? Why, crusader....how could it possibly be considered so immoral to relieve people of money you've (sorry "we") determined provides such scary bad disutlity? Why, taking it is a downright public service. The high earner wins and your social welfare thingie wins. It's all win/win and ponies.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

If socialism were right, practical, or moral I suppose I wouldn't have a problem with it.

You don't. You have a problem reconciling your socialist beliefs with socialism's failures.

What is an "optimal" utility curve? That makes no sense. A utility curve isn't optimal or non-optimal. It just is what it is. And who said we all have one curve?

"Optimal utility curve” is sarcasm. I would have thought a card-carrying economist who just implied that he knows where to start confiscating more income through taxation would have gotten that. I will explain what I mean in my dumbed-down non-economist way.

If I put forth the time, effort and risk to make $3MM per year, what right have you to assume that my marginal utility begins to decline at any level below $3MM and that it’s fine to assume that my marginal utility begins to decline at $100K, making it okay to progressively tax away anything above that income level?

I assure you that I know exactly where my marginal utility begins to decline and I will adjust my work/leisure ratio to reflect that without the help of the “we” you’re so fond of. I can also assure you that every other human being knows what their utility curve looks like with respect to income and will adjust without the help of social engineer wannabes. Even muirpid.

Re: How we feel about our taxes

Bill — Tue, 30 Nov 1999 02:00:00 -0000

BTW, Marx gave "from each according to his ability to each according to his need" a bad name because he advocated the use of coercion.

Judging by your earlier statement on the subject, the difference that neither you nor Marx see is that families and other communities adhere to this dictum voluntarily. Marx and other socialists favour the use of coercive force and the imposition of a single end to thrust unwilling strangers into this less than cozy relationship.

I challenge you to find a single regular commenter on this blog who is opposed to such a voluntary relationship.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

BamBam's plan will will absolutely cut costs. He just told us to "embrace hospices as a legitimate option".

In reality, at some point, we will all have to "embrace hospice as a legitimate option", but in the government health care meat grinder, it'll be the government deciding when that will be instead of you and your family.

But, it's better, faster, cheaper!!!

This guy really thinks Americans are his Lordship's serfs.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Unlike Krugman, you do not see the wisdom of the Magnificent One.

Obamacare (which Obama wants passed, but has yet to read - just as the MA police acted stupidly, although he is not familiar with the details of what happened because he was too busy donning verbal black-face to speak to his "homies" at the NAACP) is, in fact, better, faster, cheaper and allows more access than the system we have now.

How can this be?

Well, according to Obama's glorious speechifying, MILLIONS of Americans are rolling around in the gutters and dying like mangy dogs in the streets for lack of basic healthcare and millions more are forced to make heavy sacrifices of beer, pizza and 52-inch plasmas to scrape together the money to buy health insurance coverage which never covers anything because the first time you need a cast for Timmy's broken arm, the insurance company drops you like a hot potato.

He will fix all that by allowing everyone to die waiting for healthcare in or around the hospital as they wait to get referrals from their overloaded primary care physicians. So, you do get access to the hospital, it's better than dying in the gutter and it's cheaper than actually treating you. Or at least, he thinks that's probably in the bill but will confirm when he finally gets around to reading it - hopefully around 3-6 months after it's rammed through congress and passed into law.

If the solution is unappealing to you, don't worry. If you can afford it, Cuba is just a short plane ride from Florida and I'm sure Doctors Without Borders will eventually commence operations In the USSA - that is, if they don't close the borders to stop desperate, overtaxed and unemployed people fleeing this great land of ours to find jobs in Mexico.

Think it can't happen here?

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

4 mayors, and people you would expect to be untainted by corruption were arrested yesterday for corruption.

Did you miss the part where they were in New Jersey? How can you expect anything in New Jersey to be free from corruption?

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

The most important datapoint, it would seem to me, would be the difference in cost growth of private vs. public plan, and yet that's the very datapoint the Cato analysis omits. It does make you wonder why they omitted it

I think it's because the claim was that this would make health care in Massachusetts Better, Faster, Cheaper!(TM) and Cato's point is that it's not.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

But all this reinforces the underlying point - look closely at what's going on in the states and what they get right and what they get wrong before doing anything drastic.

Not just states, but also places like Singapore - which gets the same healthcare outcomes for 4.5% of GDP and more choice for consumers. Government is heavily involved, but in a smarter way than in Europe and Canada. I completely agree with you on this - go slowly. This ramming through the legislative process full-force nationalization of health care to achieve presidential political ends is...um... UNWISE.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Daniel,

it's not my field either, but I had a lot of health problems which started at the age of two. So, I've had a personal sampling of Soviet, Western European and American health care. Also, half my family are surgeons and physicians and epidemiologists here, in Europe, Russia and with the WHO. Since they're all obsessed with their professions, I have no choice but to receive a lot of information about the medical field. Don't worry though, I get them back with heavy doses of highly technical explanations of financial markets and instruments.

I know that the left generally has a very romantic view of Europe - mostly because their sole experience with Europe is eating croissants on the Champs-Elysee and backpacking through the Alps. It all seems so much better when you're on vacation.

One cost savings in Europe is that they are not Obese. 12% of the French are obese compared to over 30% of Americans. The incidence of chronic, expensive and life-shortening diseases is very high among the obese. This cannot be overstated. They choose a better lifestyle and lifestyle has a very profound effect on your health - an effect that, at some point, cannot be offset with additional medical attention.

Beyond that, Europe doesn't trounce us in cost because it's an apples to oranges comparison. If you've had the unfortunate experience of needing complicated procedures in both places, you will know instantly that the availability of more advanced (and more expensive) medical technology and pharmaceuticals is very limited as compared to the U.S. The quality of care is also worse.

According to the Organization for Economic Cooperation and Development, health care spending accounted for 10.9% of GDP in Switzerland, 10.7% in Germany,

# Health care spending accounted for 10.9 percent of the GDP in Switzerland, 10.7 9.7% in Canada and 9.5% in France.

The U.S. spent 15% for the same time period.

But, we also get a lot of optional procedures and are eager to provide our loved ones with the latest medical technology has to offer. Expensive infertility treatments are covered by insurance in the U.S. but are not covered at all in European countries. Same for medication like Viagra (although, I expect France does cover it - love is important and smoking is hell on the vascular system). If I lose a leg, I'm getting the newest, most expensive prosthetic there available and will allow me to continue running - and I'm willing to pay to get it. In France, the wooden stump whittled by a sixth generation stump craftsman on the Normandy coast is all that's available to me. Are we getting what we pay for? I think so. We get so much more.

According to the CBO, about half of the increase in healthcare spending in the U.S. over the past few decades is associated with changes in medical care made possible by advances in medical technology.

The real problem is that Americans see the new technology and want it, but don't want to pay for it and assume that Europeans are getting it "for free". Most of it, the Europeans are not getting at all or in very limited amounts.

Then, there are the claims of "excessive growth" in America's healthcare costs. According to a study conducted by Andrew Biggs, if "excessive growth" is defined as the growth rate the growth rate of GDP, America's growth excessive growth since 1990 is not that different from the 23 OECD countries. 1.62% for the OECD vs. 1.66% for the U.S. In fact, the U.S. excessive growth rate ranks 9th of the 23.

Is Europe better, faster, cheaper? Hardly.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Wow, that was some crack editing I did in the above post. moving on...

Links for information about Singapore's health system:

http://econlog.econlib.org/archives/2008/01/singapores_heal.html

http://en.wikipedia.org/wiki/Health_care_in_Singapore

http://www.ordinary-gentlemen.com/2009/07/singapores-health-care-system/

That should give you a good start.

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Thanks, guys. Sorry about the bad editing.

Look what I found posted on a message board just now:

23 July 2009

Editor, The New York Times

620 Eighth Avenue

New York, NY 10018

To the Editor:

If an armed man breaks into your house, confiscates money from your wallet,

insists that he and his goons are blessed with a grand vision of how you and

your family should be provided with health care, and commands you to do as

he orders, would you believe his promise to keep armed intruders "out of

health care decisions"? ("Text: Obama's Remarks on Health Care," July 22).

Of course not.

So why isn't the entire country furious at being insulted by Pres. Obama's

patently absurd claim that his efforts to give government a greater role in

paying for health care will "keep government out of health care decisions"?

Sincerely,

Donald J. Boudreaux

Chairman, Department of Economics

George Mason University

Fairfax, VA 22030

Re: Will Pres. Obama’s Health-Care ‘Reform’ Control Costs or Not?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Eric,

Early death is not a cause of increased health care spending. In fact, early death is a savings and this is relevant since I was addressing health care spending.

Obesity is expensive because it increases the probability of cardio-vascular disease and diabetes and some cancers. Those diseases, in turn are life shortening - more for some populations than others.

You have to also consider genetics. For example, it appears that an American diet is much worse for the Okinawans than it is for Americans of European descent. Hispanics and blacks have a higher predisposition to heart disease and diabetes than other gene pools and we have more of both in the United States than in Canada. They also tend to have shorter life-spans than Americans of European descent. We can't necessarily conclude that the Canadian findings applies to the American population. Although, I am against pouring money down anti-obesity campaign sink-holes.

It's possible that Obesity doesn't doesn't shorten lief in any way that would be statistically significant, but I don't think that the additional spending on associated health issues can be disputed.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

The war on poverty is a war on the poor.

This works out great because - to paraphrase a commenter on Megan's blog - being poor means that someone else makes your decisions for you. Politicians may not have been bright enough to figure that out in the beginning, but it hasn't escaped their notice now. If they can only impoverish the entire nation, their power would be immense.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

I don't think Dr. Williams was being fair. His ideas about "good intentions" clearly are coming from Milton Friedman, who's ideas have been undercut by recent reality.

I find that one thing that doesn't work very well in this comment section is simply asserting something. It makes your argument rather unconvincing - seeing as it's not an argument. How have these ideas been undercut by recently reality? Which specific ideas and specifically how were these ideas undercut?

"Voluntary cooperative action" through markets is what has caused the current economic crisis and worsened the conditions of the black urban underclass.

When you can explain to me how keeping an interest rate at historic lows and government mandates for tax-subsidized GSEs to lend to people who will never ever pay back the loan can be mistaken for "voluntary cooperative action", I'll entertain your assertion.

Meanwhile, the only parts of Harlem that have gotten better are the parts where residents took it upon themselves to clean out the crack houses and refurbish the neighbourhood. THAT is voluntary cooperative action at work, my friend.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

By your thinking there was no poverty until the Guvmint intervened and then poverty was rife. - Gil

No, that kind of scrambled BS can only flow forth from you. Sam explains it. I'm going back to not wasting time on your posts.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Either way, arguments over history are endless,

Yes, especially when people are ignorant of history except for the mangled garbage thrown at them in public school. The only thing that history teaches us is that history teaches us nothing.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

I love it, Dave.

We're ruled by a posse of Czars and we're constantly at war. Somebody should tell OBamBam that this is the kind of activity that has historically been known to encourage revolutions that didn't work out so well for the Czars.

Re: Walter Williams on the ‘War on Poverty’

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Maybe we can have a war on war.

Mmmm...sorry that one's already been done (and by "been" I mean it's ongoing).

The whole idea behind the bloated bureaucracy of the UN is ending wars. This one seems to be as successful as the war on poverty, terrorism and obesity.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Whutevah! All I want to know is where my free medicine be at! I voted for Obama and I'm still waiting for my free sh** that he promised me for being the victim of not having a job and ten kids.

I don't think the electorate really grasps such subtleties. There is, in fact, a system because there is nothing that resembles a free market in health care. Doctors are either in network or not. Everything is regulated to within an inch of its life such that we already have a top down, planned system. Thus, everyone already thinks of it as a single system. Saying that we're going to scrap this system without replacing it with another system makes people feel very nervous because there is no plan and we've now trained generations of Americans to depend on and expect others to make plans for them instead of planning and thinking for themselves. No wonder the American Nomenklatura treats Americans like serfs. They think like serfs.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Dan,

the network comment re-enforces the system perception among consumers. The regulations in healthcare make it a top down,system.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

"the network comment re-enforces the system perception among consumers."

Clear as mud.

Should have said "the network re-enforces the perception of a top down system among consumers."

That perception is re-enforced when people realize that the number and type of provider networks as well as the type and cost of insurance is is regulated entirely by the state. Even if they don't realize it's controlled by the state, they see insurance companies denying them the product they want as a conspiracy against them. Some understand that the state of Virginia just made pregnancy riders illegal to write, but regardless of who they think is doing the planning, they view it as a planned system.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Dan,

Thanks for another post where you go completely off topic, laser focus on a microscopic, irrelevant spec in an effort to blow it completely out of proportion and divert the entire comment section into a long and pointless debate about systems within systems and systems within free markets, ad nauseum. I think everyone understands that every company, even if unregulated has certain rules and a specific plan it offers its customers and everyone understands that this is a "system" and a "plan" without reading 48 lengthy posts on the subject. I don't have the energy for picking that much lint from every crevice of my naval today. Sorry.

Yes they're regulated, but you can imagine a theoretical unregulated HMO that also has a provider network and is also a "system"

Yep. Missed my point. Go back and try again.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Good point, Sam.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

In this case, I completely agree that the U.S. health care market is not a free market. But your next sentence bothers me a bit.

Well, John, if you're confused, then I might owe an apology to DK. The fault seems to be mine.

To be clear, I have no problem with any plan offered by a private company and entered into without coercion by the participants in the plan whether that plan includes a network of doctors or not. I don't even have a problem with publicly funded basic health care for the indigent.

What I means is that the use of the word "system" with regard to healthcare seems natural to people in some part (how much is debatable) because words related to systems like "plan" and "network" psychologically effect the way healthcare provisioning is viewed. I really did not mean for that one comment to be the central focus nor did I mean my comment to be a criticism of provider networks.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Dan,

Thanks, but we are not at war, so no peace offerings required. Plus, the more I think about it the less intriguing that particular point seems to me. In fact, I'm starting to think it's not very intriguing at all.

But that hierarchy and bureaucracy still emerged spontaneously out of a private market that demanded insurance as a form of compensation and also exhibited steadily growing demand for health care in general, especially at the end of life.

Not quite.

Private health insurance emerged spontaneously hundreds of years agot, but its present form and bureaucracy bears the pawprint of the heavy had of government.

As far back as at least 1929, some health insurance was subsidized. In response to government imposed wage controls, employers began offering health insurance as an added compensation (as it did not count as a "wage" - government is so stupid). In order to encourage this behaviour, government offered tax breaks on the provision of health insurance. In 1965 came medicare and medicaid. Along the way, regulators shaped and meddled with the product. To call the current system "spontaneous order" is a little more than inaccurate.

Re: Men of System Systematically Misunderstand Spontaneous Orders

Bill — Tue, 30 Nov 1999 02:00:00 -0000

John Dewey,

Blue Cross Blue Shield was offering group insurance before the war and employers also offered health insurance to employees before the war without government direction, but I think there was some intervention. I believe insurance regulation existed at the time.

We cannot know whether employees would have taken advantage of the group buying power of their employers had this benefit not been shielded from taxation.

Why not? Group health insurance was growing in popularity before the tax exemption. Plus, group buying power made health insurance cheaper. Why wouldn't they take advantage?

Also, why are employers the only possible group? Without the tax exemption, other groups could have formed and negotiated insurance terms for their members. It's illogical to me to think that employment and health insurance are somehow more natural than a 10,000 sole proprietors grouped together.

Re: Perspective on Living Standards

Bill — Tue, 30 Nov 1999 02:00:00 -0000

My grandmother was a time traveler of sorts.

Almost two decades after we arrived here from Moscow, my grandmother finally got permission to travel to America to visit us.

she got lost in my parents' middle class house and wanted to know how many families lived in it. Every gadget in the kitchen terrified her as her implements were not unfamiliar to a 19th century kitchen (the microwave in particular totally flipped her out). The clothes and hair dryers fascinated her. Riding in cars that weren't made out of the paper mache Ladas are carefully crafted from was unbelievable to her. The abundance of fresh fruit and vegetables and how inexpensive and NOT rotten they were astounded her daily. Upon her return to Moscow, she fell into a long and deep depression.

Somehow her lifelong contribution to a Great Society and workers' paradise didn't cheer her up and make her forget about the daily deficits of items even the very poorest Americans take for granted. Cue dg Lesvic about income redistribution and inequality.

Re: When to let a bank fail

Bill — Tue, 30 Nov 1999 02:00:00 -0000

The answer is to accept for now that these are essentially government enterprises, and strive for regulatory reform that will lead toward full privatization.

And the way to do that is remove the monopoly laws and open up the market to a parallel clearly-identified free banking system.

Vikingvista,

As usual, good stuff. The chance of this happening is slimmer than than the chance that I will be able to successfully travel in time tomorrow. Somehow, I think you already know that.

Once regulators are charged with an industry, the goal is to expand their power. Full privatization will make them redundant.

Plus, the public inexplicably has enormous faith in government and no faith at all in private enterprise. I think I've finally figured out why - at least in part. Regulation creates distortions and reduces competition. Protected from competition, the regulated companies no longer have to serve the customer to survive and they actively lobby the regulator to write regulation that raise costs, limit choice and generally create a horrible situation for the customer and more revenue for themselves. Since it is the company and not the regulator or the regulation that is most visible to the customer, the nominally private company and "profit motive" is blamed for their eroded position. Of course, it's true that profit motive drives the companies in a regulated industry to capture the regulator and this capture creates the problem for the customer, but the customer rarely understands this not so subtle subtlety and begs for more regulation which then erodes the customer's position further, which he then blames on the evil companies, which leads to begging for more regulation...and so on.

I give up.

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

That's right, Danny. He's compassionately all for keeping people in poverty. But, compassionately.

What's important is how the lefties label things. That's the key.

If I label rat poison "Coca Cola", would you drink it?

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

I'm just not sure what the point is in questioning whether he cares about them or whether there's any evidence that he doesn't.

What is the difference between caring about the poor and actively hurting them and not caring about them? You can't eat caring, Danny.

Thus, if he doesn't understand that he's keeping people in poverty, he's a moron. If he publicly advocates for a course of action that will hurt the poor, then he's a dangerous moron and deserves to be identified as such.

If he purposely proposes to keep some poor in favour of others, then he's not...um...as compassionate as he claims to be. Since the left is all about "feelings" and passion, I think it's pretty relevant.

So, he's either a lying asshole or a moron. Take your pick, but he's one or the other.

You don't understand the point of questioning caring and feelings? Are you serious? Have you never ever listened to a political speech? Politicians - particularly leftists - trade in feelings. If you don't see the point of what Don said, who really cares?

There are other areas - outside of trade policy - where I would probably think your conclusions end up hurting the poor

When you can name one, then we can talk. Otherwise, it's just your fantasies playing in your head.

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Meyerson is a journalist, not a politician.

And Al Franken is a comedian. What's your point?

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Is this really how you approach people that disagree with you?

No. This is how I approach asshole. Just because you don't consider Meyerson one doesn't mean I don't. Just to clarify, I consider anyone who advocates stomping on other people's liberty to further his own agenda an asshole. Anyone who merely disagrees with me is not automatically one. BTW, I don't care how much you like or don't like Meyerson and I apologize to the professors for using trading floor language, but sometimes you just have to cut to the chase. I've made my point, so I'll not do it again.

Right... and their feelings are equally irrelevant.

That point just sailed right over your head, didn't it? Politicians and their water boys (Meyerson) convince us that they feel the pain of others so deeply that we are to trust them to change the world into a better place. Kumbaya. I don't give a crap if Bush hates black people or not, he still signed a minimum wage increase that will hurt predominantly young black men and that MAKES him less compassionate than he claims. I don't care if Meyerson is generally a warm and fuzzy guy who likes bunnies and is kind to his wife. The fact that he is advocating keeping people in poverty MAKES him less compassionate while he CLAIMS to care so much. He clearly doesn't and since he's CLAIMING to care, then whether he does or not is absolutely relevant.

Either way - Meyerson demonstrates no ill will towards the poor.

You're kidding, right? He wants to keep impoverished non-Americans in poverty to "protect" Americans. That's not showing ill will toward the poor like Stalin and Lenin showed no ill-will toward the peasants. They didn't hate them. They were just pushing an agenda for the betterment of the common good and some of those folks were in the way. I'm sure that although you are completely ignorant of the history I cited, you will assure me that the two have ABSOLUTELY nothing in common. You leftist think everyone but you is retarded.

My you're argumentative today!

Because today, just for giggles, I decided to get into one of your inane arguments about something completely secondary to the point. The last time was when you were repeatedly assuring all of us that it's not at all completely insane for adult Michael Jackson mourners to flail around like lunatics when that wasn't even Don's point. You kids today.

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

I'm starting to really understand why Vidyohs and ds Lesvic can be so grouchy.

Re: Caring About the World’s Poor

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Ackerman,

Before we export we have to produce something. Before we decide to make the effort and investment to produce something, we need decide the incentive to produce exists. Nobody is going to work harder and take greater risks if a larger portion of the return is taxed away. So, we need lower tax rates for the politically unpopular group that provides most of the capital but is also slated to be tapped to pay for everything - the evil rich. Of course, to truly lower taxes, the government has to also reduce spending. When you think those two things will happen, be sure to give me a shout.

Of course, punishing our trading partners for subsidizing our purchases will likely mean that they will retaliate and make it more difficult for U.S. exporters.

You're basically saying you want more economic activity and lower trade barriers, what you're getting instead is more distortion and government waste. We're becoming like France only with badly dressed fat people and disgusting food. merde.

Re: Who’s Powerful?

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Lee Kelly, poignant as always.

Re: Barack Obama, Supply-Sider

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Yet another Dave, I vote for both profoundly stupid and evil. The two are not mutually exclusive and describe most of congress as well.

Don,

That 39% is on top of the cost of exceptionally stupid regulatory compliance which serves only to destroy choice and raise prices for consumers and wasting otherwise productive individuals' time.

Re: Gregg Easterbrook on the GM Bailout

Bill — Tue, 30 Nov 1999 02:00:00 -0000

I love the photos of Pelosi with her mental peers. Thanks for the laugh on a Friday afternoon. It was badly needed.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

"selling oil short when its price is rising adds supply to the market today"

Could somebody explain this?

One sells oil short by selling a futures contract (a promise to deliver a certain amount of the commodity at a certain price on a certain date). Thus, selling a futures contract is a supply promise.

We can get into more detail if you want, but that's the basic gist.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

they're concerned about the impact of fluctuating prices on consumers that don't hedge or by futures - they just buy the gas.

If that were true, they would be encouraging more speculation. "They" are either disingenuous or stupid.

I wonder if Muirgeo gets his medical information from "Rolling Stone."

Judging by his spew here, he's getting it from "Hilights".

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

If it costs me five dollars to produce something, and someone else is willing to pay a hundred dollars for it, is it worth five dollars or a hundred dollars?

I think that blew the village idiot's last remaining brain cell.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

That doesn't necessarily guarantee stability, though. Why should it???

Because it increases liquidity. Increased liquidity makes prices more stable than they otherwise would be. This is why the standard deviation of price in thinly traded securities is greater than in more liquid securities and why the price moves are sharper and deviations from fair value happen more frequently and are more pronounced.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

It's quite possible many have thought this about you in the past, but were gentlemanly enough not to voice the opinion.

I care what you think about this because...?

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Daniel,

As usual, you are deeply misunderstood on this site. Lots of things play a role in the creation of bubbles - notably, the inability or difficulty to short. Also, difficulty in assessing the future and illiquidity. Yes, a lack of liquidity does not quell speculation, it merely makes the price moves more vicious. The internet bubble was difficult to assess because nobody knew if we were looking at a technology that deserved a multiple similar to what we retrospectively know should have been assigned to computers and TVs in the early days or if the multiples should have been much lower. In other words, where we have fat tailed distributions, bubbles are more likely to form.

Speculation may play a role in bubbles, but the more speculators and the more unimpeded they are, the smaller the bubble is and the faster it pops. Note how quickly the oil price came down last year when it became clear that the fundamentals weren't there to support such a high price. Since the market is liquid you were able to sell out of your oil position at $145, 144,143,142, 141, etc. instead of selling a bit at $144 with the next bid at $135 and then at $125. That's the difference between a liquid market and an illiquid one and liquidity is dependent on the number of participants.

Danny, one more thing...when I need advice about behaviour from a boy half my age, you'll be the first to know. I know that in your 25 years you believe that you've become filled with what you think is great wisdom, but others may not always agree. Stick to the economics, dear.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Vikingvista,

I completely agree. The market is more rigged now than I have ever seen it in my career. Insiders (market makers) are, of course, exempt from the restrictive rules because they are required to provide a two sided market at all times. Thus, the only thing regulation does is determine who can sell and when and thus, who wins and who loses. This has obvious price implications for price and volatility as fewer people can sell than can buy and is most pronounced in medium to low liquidity securities.

However, regulation doesn't always trend toward more restrictions. In the last three years, regulations that tilt the playing field toward insiders at the expense of customers have been removed. For instance, portfolio margin was introduced in early 2007 and allows 6 to 1 leverage as opposed to 2 to 1 Reg -T leverage for accounts over $100K. The price test for shorting was removed in July 2007, driving down spreads and improving liquidity and reducing volatility in low to medium liquidity stocks. Exchanges that didn't allow customers to post both a bid and an offer have closed (notably, the tragic AMEX). All of this improved the environment for non-market makers while squeezing market making profits through increased competition. Of course the regulatory trajectory changed when the bubble burst.

It's telling how many hedge funds and former customer firms have become broker dealers/market makers since the SEC has made it clear that rents will be created for insiders at the expense of customers.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Yeah right... because the price and value of financial derivatives based on oil futures traded opaquely is obvious to all

Well, looky here. It did blow out his last brain cell.

Futures ARE derivatives. Oil futures are heavily regulated, traded on exchanges, very liquid and extremely transparent.

Good to see that you come to your decisions based on not even the most slippery grasp of facts. You have earned the title "Village Idiot". Take a bow.

Re: A Win-Win

Bill — Tue, 30 Nov 1999 02:00:00 -0000

LCJ, you are too funny.

S. Andrews, I had to stop reading after

"Messianic philosopher of the unknown,...". Nothing good could come from a reporter whose opening line is that stupid. I read Taleb years ago and I basically didn't disagree with him often. Until recently. This little hiccup has catapulted him to a status he does not deserve. He's not a great trader and he foresaw nothing. He bled his hedge fund dry, closed it, and then took enormous credit for the ho hum returns his protege scraped up last year buying teeny options. Many traders delivered high returns with low volatility in all kinds of markets for years. Last year alone, several equity options firms returned over 100% after years of 30% and 40% returns. Unlike Taleb, they won't take investment from the public and have no need to be publicity hogs, pushing their own central planning agenda. Taleb is dying to be just like his man-crush, George Soros.

Re: Treason Against Reason

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Krugman is treason against humanity.

Re: I Don’t Want Those People to Have a Say in How I Live My Life

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Billy Mays had more impact on my life than M.J., that OxiClean stuff really works!

LOL! I was just about to bring up Billy Mays as one of the many people who died and whose story the oxygen and attention was sucked from. And what about Farrah?! She died first that day!

It's rare that I don't agree with Don completely, but here I don't. I still haven't quite recovered from Milton Friedman's death - mostly because I always wonder what he would have to say about what's going on now. Although I never met him, he actually had a fairly direct impact on my life through a professional relationship someone who is very important to my husband and me both personally and professionally. Michael Jackson's music provided a soundtrack to some memorable moments in my life and I can't help recalling them now that he's dead. As a teenager, my friends and I woke up at some ungodly hour to watch Princess Diana get married. I was unnerved by her death because I'd never had anyone close to me die, she was close to my age and even though this woman couldn't be more of a stranger to me (and I wouldn't have stepped two feet out of my way to change that), her death for some reason brought home how fleeting life is and how quickly it can all end. I guess you get accustomed to these people providing the background music (for lack of a better word) for your life and when they go, you mark the change. Time passes. We're all marching to our death. It makes you stop and think when young people die so suddenly (and, yeah, I'm at that age where a 50 year old is just a pup). Stuff like this just makes me feel old and so I'm mourning that.

I can't help but think that Don's point goes beyond MJ's death. Many people blur the line between reality and fantasy long before their idols die. They believe those people are magical and that they are somehow personally involved with them. I wouldn't want people so given to brain dead fantasies controlling my life either. Actually, I don't want anyone controlling my life.

Re: I Don’t Want Those People to Have a Say in How I Live My Life

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Dan,

Certainly many of the reactions are 1.) hysterical, (2.) childish, (3.) self-indulgent, and (4.) flamboyant. There's a big difference between a simple meaningful emotional reaction and some of the hysteria some mourners are exhibiting.

Re: I Don’t Want Those People to Have a Say in How I Live My Life

Bill — Tue, 30 Nov 1999 02:00:00 -0000

Daniel,

And yet...it is Don's OPINION that the mourners are hysterical and he is as entitled to his opinion of their behaviour as they are entitled to behave in this way.

His point is pretty simple - he doesn't want these people to be able to have a say in how he lives his life. A powerful government allows them that say.

You don't think he has a right to his opinion?

Although, I think he's wrong to single out Americans. Mass hysteria is a human phenomenon.

Re: I Don’t Want Those People to Have a Say in How I Live My Life

Bill — Tue, 30 Nov 1999 02:00:00 -0000

And I have a right to say he's unfairly maligned the MJ mourners. Keep in mind I haven't called Don childish, hysterical, self-indulgent, or flamboyant. I've simply said the mourners shouldn't have these labels applied to them.

So, your opinion about the mourners should trump Don's opinion? Why is that?

Keep in mind, I never said you called Don childish, hysterical or self-indulgent. So, I'm confused by your defensiveness.

I also don't understand is why you think you're the ultimate judge of who deserves those labels and who doesn't.

I don't see why he needs the prop of people who are genuinely saddened by the passing of MJ to make a political point.

Don said nothing of people who are merely "genuinely saddened". He was specifically referring to the histrionics.

Re: Who's Irresponsible?

Bill — Thu, 29 Mar 2007 09:04:50 -0000

Nice. Personally, I've never tried drugs. Not because they are illegal or too expensive but because I don't want to. So, I've not been deterred one bit by legislation - and neither was anyone around me who has done drugs when they wanted to. There's an example of laws working as intended, eh?

Your letter was excellent.

Re: Efficiencies Are a Service to People

Bill — Wed, 04 Apr 2007 06:48:11 -0000

Adam,

Who cares if the employees are "loyal"? Employment is at will. If the laid off employees feel bitter toward CC, then they can find another job. we all look out for our best interest and no employee will stay with a company solely because they are "loyal" to it.

You are loyal to your spouse, your children and your country, not to your employer. If someone offers an employee a better working arrangement, that employee will leave. We don't call that "disloyal", we call that smart!

Your assertion that "that's not right" has an air of ethical objection. There's nothing wrong with what CC did. It offered an arrangement that the employees are free to accept or reject. If you are questioning the wisdom of CC's management decision and its impact on company productivity, that's one thing. If you're questioning the ethics of that offer, then I don't think you have a leg to stand on.

Re: People before profits

Bill — Wed, 04 Apr 2007 07:59:06 -0000

Hey now! I don't know how the Cuban and Soviet Russian "free health care" compares.

However, I CAN attest the fact that the Soviet health care was absolutely free...of any actual health care! I was hospitalized in Soviet Russia off an on for several years and barely escaped with my life. The psychological effect of torture chambers passing as hospitals was so profound, I still need a valium every time I enter a hospital - and I've lived in the US since the 70's!

It's the kind of free health care that I would gladly pay my life savings to avoid.

There's your discussion :)

Re: Efficiencies Are a Service to People

Bill — Wed, 04 Apr 2007 08:27:18 -0000

“RECALLED HIM FROM VACATION to tell him he was fired. Sure they were entitled to do it, but for God's sake what was the point of being pricks by cutting his vacation short? Would anything have changed if they'd told him when he got back?”

Yes, if it was paid vacation. No, if it wasn’t. It’s not a nice thing to do, but maybe the guy was caught embezzling while on vacation. More importantly, what’s the loyalty lesson here?

“..Several people told me that I could always accept the first one and if the other came through, jump ship after a couple of weeks. Would I have been entitled to do it? Sure. Would I have been a jerk? Yes, unless the first job turned out to be completely different from what they led me to expect.”

Well, the bigger problem is that you’ll be burning bridges. Still, all this proves is that you’re not a jerk and that you don’t want to burn bridges. It has nothing to do with loyalty to your employer. What are you loyal to – other than your personal ethical code – in this example?

Adam, I think you're still mixing up ethics and devotion. In general, employment is a contract between two parties which does not require either party to be devoted to each other at ll costs. The employee is not obligated to continue to work for the employer, despite better opportunities and the employer is not required to employ the worker at all cost. There's no loyalty issue here.

From a business perspective, I understand what you're saying. But I'm not sure you and I are in a position to adequately pass judgment on the effects on morale at Circuit City. Incidentally, I used to work for CC (which makes me no expert). I seem to remember that the sales staff is on a commission and there are few are career sales people. Most are transient workers, as I was, trying to earn money for college and the like. Our commissions were pretty good, though. I could make enough money to pay a full year’s college tuition working summers and holidays. Just my anecdote. As for the abrupt nature of the lay-offs – that’s why your mother always told you to save for a rainy day. Your personal welfare is your business – not your employers.

Cheers.

Re: Efficiencies Are a Service to People

Bill — Wed, 04 Apr 2007 10:29:54 -0000

Well, Adam, if you ever run your own company, you can institute whatever policy you want regarding firing employees. Come to think of it, I’m not sure that these CC people were fired abruptly.

I think you're overstating the "upheaval". Plus, and I think you’ll agree, that your normative statements aren’t really grounded in iron-clad business logic so much as they are gentle feelings toward the employees. That’s cool, as long as you don’t try to impose your feelings in the form of a change in the law.

Re: Efficiencies Are a Service to People

Bill — Thu, 05 Apr 2007 04:49:30 -0000

Martin,

I refused to continue the discussion on Marginal Revolution with you because of your circular logic and your incoherence. You neither understood a word I wrote nor could you cobble together an argument for whatever position you were trying to take.

My mother always taught me never to argue with idiots. Passersby will have trouble distinguishing which is which.

Re: Efficiencies Are a Service to People

Bill — Thu, 05 Apr 2007 08:11:49 -0000

Lee, good point. I wouldn't disagree with that. And, yes, I do realize that's what Adam is saying. He made himself very clear in his last post.

Re: Efficiencies Are a Service to People

Bill — Thu, 05 Apr 2007 13:27:33 -0000

"The more corporations are seen to mistreat employees, the more regulation of the employer-employee relationship we'll see."

Now you've gone too far. The employees were not "mistreated". They were laid off. If you equate cutting costs to increase profit in a corporation with mistreatment, then you're pushing a communist ideal.

If you think that companies have a greater duty to their employees than their shareholders, then you are pushing a communist ideal.

Out of curiosity, if you don't like what Circuit City did, what would you have done if you were the decision maker in this situation?

Re: Efficiencies Are a Service to People

Bill — Thu, 05 Apr 2007 17:23:51 -0000

"A hiring freeze or wage freeze, if not already in place, would probably help, I think."

But the hiring freeze would do nothing for the profit margin, since they clearly have all the sales people they want now and are not afraid of losing some of the ones they already have.

The wage freeze would would not lower the current cost. It would keep the current cost the same, so how does that help profit margin?

Aside from not fixing the profit margin issue for Circuit City, don't you think that a wage freeze would also have a major impact on employee morale - a condition you were trying to avoid? A worker may not be so motivated to become more productive if he doesn't think his pay will reflect additional productivity. And couldn't a wage freeze be read as mistreatment?

How would either of these two suggestions increase competitiveness for Circuit City (which is getting its butt kicked by Best Buy, btw). Remembering, of course, that if it can't compete ALL of the Circuit City employees will abruptly lose their jobs.

Re: Efficiencies Are a Service to People

Bill — Fri, 06 Apr 2007 09:46:02 -0000

Circuit City is getting its butt kicked by Best Buy right and internet shopping now - not in the medium term. So, the action is urgent. In fact, part of the problem with Circuit City is that the company didn't adjust its business model to the changing competitive landscape. That's why they're in trouble. Costs have to be cut now, not in the medium term. So, we have to talk about the given situation, not a hypothetical situation.

You gave it good try but neither of your solutions address the given problem. In addition, they actually reduce employee morale. What Circuit City did put the choice in the employees hands. They have two choices: 1.) if they still want to work for Circuit City and are willing to earn less per sale (keeping in mind that sales people are on commission), or they can or 2.) They can find a situation with another firm which is better suited to them. This is a fair, honest and upfront way to deal with people. It lays the cards on the tabel and gives them choice. I've found that there's nothing employees hate more than to be strung along "in their best interest". each employee rightly assumes that he or she can make better decisions for him or herself than the employer can for them and resents patronizing by the company. Employees aren't so dumb that they don't realize that a wage freeze is a back door wage cut.

Also, I don't think we'll have more regulation of emplioyee/employer relationship without a large adverse effect on overall unemployment. Look to the giant giant unemployment rate of the under 25 set for effects on employment regulation. In France, it is almost impossible to fire someone once hired. So, employers just don't bother taking the risk of hiring younger, less skilled labour at all. Changing the "at will" employment law in the United States would have a similar impact (depending on the extent of the law). But you already know this as evidenced by this earlier exchange:

me:"...That’s cool, as long as you don’t try to impose your feelings in the form of a change in the law."

Adam: "I do agree, and I wouldn't dream of doing so (it would be intrusive and counter-productive)."

I think the lesson here is that change is hard but we all have to go through it! Life is not always easy but masking reality with onerous labour laws and price controls (voluntary or involuntary) only makes the inevitable adjustment worse. Your statement above shows that you know this to be true, no?

Re: Efficiencies Are a Service to People

Bill — Mon, 09 Apr 2007 09:08:33 -0000

"Nadia: price and wage freezes screw up signals when imposed by the state, it's a whole other story when you're talking about a business doing it internally."

It's not, Adam. It's exactly the same - only on a micro instead of a macro scale. Just think it through for a minute, you'll see that it's the same.

"How can you compare the income of people in Knoxville with those in New York City or San Francisco?"

EXACTLY! In NYC, the top income tax rate is near 50% (Fed, state, local), the average crappy apartment costs over $1 Million and an average, nothing special 650 square foot apartment rents for $3,000 - $5,000 per month. If you should decide to own a car, parking it will cost upwards of $4,000 per year. A comfortable income in Knoxville buys you a lower middle class lifestyle in New York. I know. I made the move!

Re: How Different is Now?

Bill — Wed, 11 Apr 2007 07:40:30 -0000

Well, I for one, think that Blinder didn’t go far enough! I’m against any change at all, ever. All change means that somebody has to lose their job. I mean, did Ford really do us any favours by inventing the car? NO! All he did was displace millions of buggy makers around the world and cause an impending ice age in the 70’s and global warming today! And what of those buggy makers? What if the weren’t CAPABLE of adjusting to the world around them? Sure, some of them just found other jobs or didn’t’ seek other employment and decided to become entrepreneurs, started their own businesses, perhaps even meeting new demands resulting directly from this new and evil invention of cars. And maybe that even led to more overall employment and more entrepreneurial opportunities in whole new fields. But anyone who points to that is just missing the point!!!

The point, change is bad. It’s uncomfortable and we’re all born entitled to constant comfort. Economics is not a science of natural human beings making trade-offs to maximize individual utility (what half-wit would think that?!). Economics is a man-made construct and exists purely to facilitate entitlement to a certain lifestyle. Who pays for this lifestyle? Who cares? As long as it’s not me. I’m entitled, not responsible.

Re: How Different is Now?

Bill — Wed, 11 Apr 2007 07:43:32 -0000

Well, I for one, think that Blinder didn’t go far enough! I’m against any change at all, ever. All change means that somebody has to lose their job. I mean, did Ford really do us any favours by inventing the car? NO! All he did was displace millions of buggy makers around the world and cause an impending ice age in the 70’s and global warming today! And what of those buggy makers? What if the weren’t CAPABLE of adjusting to the world around them? Sure, some of them just found other jobs or didn’t’ seek other employment and decided to become entrepreneurs, started their own businesses, perhaps even meeting new demands resulting directly from this new and evil invention of cars. And maybe that even led to more overall employment and more entrepreneurial opportunities in whole new markets. But anyone who points to that is just missing the point!!!

Re: How Different is Now?

Bill — Wed, 11 Apr 2007 07:44:58 -0000

why did that post twice? Sorry. I must have messed up.

Re: Vonnegut on "Equality"

Bill — Fri, 13 Apr 2007 11:04:42 -0000

Equality is not the same as equality. There are democratic forms of equality. Strict forms. Moderate forms. And so on.

And there is strict inequality and strict injustice - which make real liberalism impossible.

So - the truth is in the middle.

Re: Taxing the Rich

Bill — Mon, 16 Apr 2007 18:18:39 -0000

"More importantly - is in the Republic's interest that anyone be able to amass such sums of money?

Yes. That money is a direct reflection of creation of wealth and the creation of wealth usually involves huge amounts of risk - risk that will not be taken if the reward is taxed away. If that risk is not taken, the wealth will also not be created and there will be none to redistribute to even the most destitute. No wealth creation is the current economic model of Africa.

"Are we better off that one almost has to be a multi-millionaire to have a chance to succeed at the national level?"

Pure hyperbole (plus, what the heck is "national level" supposed to mean?). Most American millionaires are self-made. Of course, I also wonder what you mean by "succeed". The average American family lives in a 2,500 square foot house, owns at least two cars and takes several fairly luxurious vacations per year. I fail to see the lack of success for these non-multimillionaires.

Of course we could always kill the incentive for wealth creation of any kind and hand all the power to the government. Then the only people who are able to succeed are the politically well connected. Nobody will even have a chance to get ahead through hard work. The resulting nomenclature would be less than 1% of the population (traditionally) and even they would have less material wealth than the average American does today.

Re: Taxing the Rich

Bill — Mon, 16 Apr 2007 18:26:44 -0000

"Are we saying then that the government has no role to play in helping the unfortunate or those who through no fault of their own have fallen on hard times?"

No, we are not. Incidentally, those who fall on hard times "through no fault of their own" are a very very small percentage of people. If the government really wanted to help them, it would institute a negative income tax or otherwise just give them cash instead of idiotic and wasteful payments in kind. That would require a small fraction of the welfare state we actually have.

There's also a big difference between 90% of people taxing themselves to help the bottom 10% and the middle 80% taxing the top 90% to help the bottom 10% - and taking a large chunk for itself in the process. In this country, the affluent have figured out how to force the rich to subsidize them.

You have to take into consideration that people who make more than $43,200 pay 99.1% of all taxes. Almost half the country doesn't pay taxes at all. Look around you. Is half the country living below the poverty level?

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 04:45:51 -0000

Let's be clear when we talk about "tax cuts". What we're cutting is the tax RATE. When the tax rate is reduced, tax receipts increase in large part because tax avoidance becomes less attractive. So, the tax "cuts" were not paid for by FICA but pay for themselves (now, if we could only get government to stop spending like Paris Hilton).

When the marginal tax rate is high, the propensity to invest in risky and taxable ventures declines. The propensity to invest in tax exempt securities, such as tax exempt municipal bonds, increases. Investing in muni bonds doesn't create wealth but investing in riskier business ventures does. When the tax rate is reduced, muni bonds become less attractive and the wealthy are more willing to invest in business ventures which create value. This means that people with ideas but no cash get funded more easily, the economy grows, and more taxable wealth is created. Also, everyone becomes more wealthy - even if that occurs at a slower rate for the less productive.

Thus, an interesting thing happens when the marginal tax rate is reduced - the wealthy end up paying a larger portion of all tax receipts and the total amount of tax receipts increases.

Those people who claim to want a better and overall wealthier society (instead of beating an ideology to death) should bear these little facts in mind.

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 05:00:13 -0000

David White,

I don't think taxation is theft per se. Taxation is necessary to create a standing military, emergency operations (like 911), to fund a court system, public education and to provide for the truly destitute. Without those things the economy is less efficient and people are distracted from their core business.

The problem is the unlimited power of taxation our government abuses. If the opponents of the 16th amendment had their way, the tax rate would be capped at 10% and it would be significantly more difficult to change.

I would agree that most of the redistribution our government engages in is tantamount to theft.

Do you not make the same distinction I do?

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 05:52:32 -0000

"Right. Since FICA revenues are being used for general expenditures someone making less than $90k has a marginal tax rate higher than someone making a million."

Math, please.

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 10:44:22 -0000

Ray:

"Marginal rate $336,500 and above ($1million?) is 35%. Marginal rate for $74- 154 is 28%. 28% plus 15%FICA is 43%. I believe 43% is greater than 35%."

Bad math, Ray.

Total FICA is 15.3% this year. However, wage earners pay only half of the social security portion of the FICA, 6.2% up to $94,200 for 2006, plus 1.45% on an unlimited amount of income for Medicare. The other half (6.2% + 1.45%) is paid by the employer. I don’t know for sure what the various tax brackets are or the corresponding rate (except for the top rate), so, I’ll use your numbers. We’ll also exclude deductions for ease of calculation.

Using your tax brackets and including FICA, a person making $94,200 has federal tax rate of 28%+6.2%+1.45% = 35.65%. Not 43%. A wage earner making a million dollars per year will pay 35%, plus the unlimited 1.45% Medicare tax and the 6.2% on the first $94,200. The total tax rate is 37% for the $1 million wage earner.

But people with incomes of a million dollars per year are rarely wage earners. They’re most likely self employed (business owners). The self-employed are responsible for the ENTIRE 15.3% FICA. So, if a sole proprietor clears a million dollars this year (after all business expenses), his tax liability will be 39.1%.

Including FICA and before deductions, the high income earners pay a larger portion of their income in taxes.

But we all know that’s not the whole story

The redistribution of FICA is also highly progressive – the largest portion goes to those with the lowest income. High income earners are denied full participation in the social security program and are denied any participation in the Medicare program – despite paying in more than any other group. It’s a redistribution, plain and simple. It would be more accurate to look at lifetime income and include social security and Medicare benefits received as part of income.

We should also look at the effects of deductions on the tax rate. Deductions disappear as you enter the top tax bracket. Charitable donations, school loans, child credit, mortgage interest, and educational expenses are just some of the deductions that disappear or are not fully deductible in the top tax bracket. All of these deductions are available to those in lower tax brackets. This has the effect of lowering the tax rate further for the lower tax brackets while keeping the tax rate high for the top tax bracket. Let’s also not forget that the standard deduction – which is the same regardless of the amount of income earned - has a larger percentage impact on lower wage earners with the effect of leaving less of their income subject to the income tax, effectively decreasing the tax rate much more for lower wage earners than for higher income earners.

So, even including FICA AND deductions, the rich pay more.

Re: Find the error

Bill — Tue, 17 Apr 2007 11:02:27 -0000

Isn't another problem with that sentence that "income" doesn't include any redistribution or the growth in non-money income such as health benefits? So, while real money wages may have declined a bit, if all benefits were included, real wages are actually higher. I believe Thomas Sowell made that point not that long ago.

Re: Find the error

Bill — Tue, 17 Apr 2007 11:30:05 -0000

Well, the supply of labour may be largely inelastic. However, the willingness of that labour to supply capital for risky ventures is highly elastic.

But Frank is an idiot in other ways. Socialized medicine is more expensive and of lower quality. I was a "victim" of socialized medicine in Europe for four years. Demand regularly outstrips supply and the supply is of much lower quality than in the United States. Death from cancer is higher and rarely are extra measures taken to save a life. Waiting months or years for non-elective surgery is common and the facilities are only marginally better than Soviet Russia. The only way to get anything resembling standard care in the United States is to be very very wealthy or very well politically connected. Socialized medicine truly only favours the very rich.

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 11:36:53 -0000

"A self-employed carpenter pays both sides of FICA."

What did I tell you about the self-employed?

"Your math - my math? "What you see depends on where you stand."

Uh...no. Math is math. Yours doesn't even begin to add up. "everyone is entitled to their own opinion but nobody is entitled to their own facts".

Re: Taxing the Rich

Bill — Tue, 17 Apr 2007 13:39:17 -0000

"Let's recognize that the rich are doing nearly all of the country's saving."

And by saving you also mean "investing" and, by extension, creating wealth and economic growth. in the meantime, the middle class seems to have mastered whining and begging.

"Under Socialism, the most highly rewarded talent is the ability to demonstrate need. The second most highly rewarded talent is the ability to hide means."

Don't know to whom I should attribute the quote but I like it.

Re: Find the error

Bill — Tue, 17 Apr 2007 16:24:20 -0000

"It stems from the old socialist theme that if one person gets money it takes away from another or, "the rich get richer..." nonsense."

aahhh. The lump of wealth fallacy. My favourite. I'm endlessly amused by the number of (sort of) Economists - like Krugman - who commit it vigorously and constantly.

Re: Find the error

Bill — Wed, 18 Apr 2007 05:23:20 -0000

"Trickle down theory is a strawman."

The New York Times is a straw man factory.

Re: Find the error

Bill — Wed, 18 Apr 2007 05:27:20 -0000

"How the HELL does it follow that you should tax the rich to give people in the middle something that they would *prefer not to have*, given the cost?"

It follows for people who believe in slavery and don't understand incentives - socialists.

Re: The Natural Response

Bill — Wed, 18 Apr 2007 10:24:31 -0000

"A better approach would be to do what Adam suggested, and compare the violent crime rates between countries that allow people to carry guns and countries that do not allow people to carry guns."

Ignoring for a moment that a ban on guns is unconstitutional, any conclusions drawn from a study of the results of the UK’s gun ban would be inapplicable in the United States. The UK is a relatively small island and its borders are much more easily controlled. The United States is huge with relatively unguarded borders. We have been able to stem neither the tide of illegal immigrants nor drugs across our borders despite the trillions spent on those efforts over the years. We’ve not been able to prevent the already illegal semi-automatic weapons from falling into the hands of gangsters. We have, however, successfully prevented those weapons from falling into the hands of law-abiding citizens.

What’s realistic for a small country of 60 million people is rarely realistic for a diverse population of 300 million living in a huge country.

If a killer obtains a gun, illegally (criminals tend to disregard any gun bans) or legally, and enters a “gun free zone”, he is fairly secure in the knowledge that he is safe from being shot himself. If there’s no “gun free zone”, then he may decide against the attempt, knowing that there is a higher probability that he will be shot down himself. The probability of his would-be victims being armed would acts as a deterrent. If this probability does not act as a deterrent, there’s a good chance that the killer may be shot down by one of his armed would-be victims, thus minimizing the total number killed. In fact, there seems to be pretty good evidence that this is, in fact, what happens.

http://online.wsj.com/article/SB117686668935873725-search.html?KEYWORDS=gun+free+zone&COLLECTION=wsjie/6month

I’m not advocating the arming of students and I’m not saying that we shouldn’t require advanced fire-arms training and other safety measures to enable people to carry guns in what are currently “gun free zones”. But we should notice that the lunatic Cho killed himself ONLY when he realized the police – ARMED police – were moments from shooting him.

Re: The Natural Response

Bill — Wed, 18 Apr 2007 10:29:50 -0000

"The solution, however, is not to relax the laws, but to identify and target the preconditions that the laws have failed to address."

At what cost? Where has this ever proven successful?

Re: The Natural Response

Bill — Wed, 18 Apr 2007 14:40:48 -0000

Jonathan: I appreciate your perspective. I also take no issue with the use of tax dollars to fund programs for disturbed people. I just have problems with your assertions.

You give full credit to your program for successfully talking people out of homicidal plans. But how many of your clients would have acted out on their plans without you? What are the stats? It’s not that uncommon for abused people, for example, to have homicidal thoughts and even plans against their abuser but few actually act on them. To prove your program’s success you would have to have a control group of people (or a proxy) with homicidal ideations that didn’t receive your help.

Then, there’s the issue of the people who are put in these programs and aren’t helped. The VT shooter was an example of someone who received counseling, medication and was even institutionalized. I think most mental health professionals will agree that the very disturbed are almost never helped by counseling, sometimes not even medication. The people you’re counseling are showing up to counseling because they understand that their thoughts and behaviours are not exactly normal. Socio-paths don’t make that distinction and won’t be knocking on your door. They are, however, incredibly resourceful in finding weapons.

Even if you can prove that your program is successful, you would have to also prove that it was worth what tax payers paid for it.

Outlawing guns is horribly expensive and has a miserable track record. However, when the would-be victims are also armed, the result is usually more favourable to the would-be victims. Sorry, Jonathan, but I’d rather arm myself than rely on mental health professionals talking socio-paths out of massacres.

Re: The Natural Response

Bill — Thu, 19 Apr 2007 04:25:49 -0000

"a sociopath (not an accepted mental health diagnosis)"

That’s only because personality disorders are considered “incurable” and psychologists hate giving that diagnosis as a result - At least according to my abnormal psych book and my friend who is a mental health professional dealing with troubled teens.

"What concerns the therapist most is when the homicidal ideation does not fit this profile."

As well the should be concerned! What percentage of these people actually commit murder and how many commit mass murder?

"Your argument that severely disturbed people are almost never helped by counseling, sometimes not even by medication, and that most mental health professionals would agree to this statement, begs the same statistical validation that you asked of me."

Well, I'm asking you because I'm not a mental health professional. I figured you would have the statistics since you deal with this issue daily.

"Also, you should be aware that mental health professionals are routinely called upon to assess involuntary clients in multiple settings from schools to emergency rooms. The client doesn't have to knock on your door. Based on a clinical risk assessment, usually in tandem with other professionals, the clinician may then violate confidentiality to warn others of harm, or arrange involuntary hospitalization with a police escort."

I know that. However, isn't it also true that clinicians face an uphill legal battle if the person is an adult? It's my understanding that it's very difficult to keep an adult institutionalized. Judges are reticent to step on civil liberties to keep a person institutionalized against his will. Also, isn't it true that someone has to actually DO something or threaten someone before the police can act?

"I would imagine that at least one such assessment and hospitalization is occurring every minute of the day somewhere in our country, and that numerous acts of violence have been prevented in this way."

I would imagine you're right.

"My suggestion is not to outlaw guns as a single stroke solution. It's to regulate them better as part of a broader program of reforms."

That last sentence is too broad, I think. As you are not advocating outlawing guns, I'm not advocating unrestricted access. Mandatory gun safety classes and an ability to demonstrate knowledge of safety skills are not onerous requirements and would save lives. Outlawing guns simply hasn't worked and is unlikely to work - especially in a huge country with porous borders.

"...to see how variables in multiple systems are increasing negative outcomes across numerous social dimensions."

What makes you think negative outcomes are increasing? Violent crime rates are down across the country. Did I misunderstand you?

"..but the next time we need to figure out what to do with the homicidal client in our local ER, I'll put my faith in the police and in a mental health professional..."

Okay. I'm willing to pay for that too. I'm not willing to pay to wage a "war on guns" similar to the "war on drugs".

But what if the homicidal maniac doesn't stop by your ER before he commits homicide?

You're also over-focused on guns. Homicide rates can remain the same and the weapon of choice changes to knives. What then? A ban on pointy things?

Mass murder can be achieved without a gun. Guns are outlawed in Britain but the 7/7 bombers had no problem finding ways to blow up public transport. In fact, you could make the argument that if a homicidal maniac bent on mass murder is using a gun, he's more easily stopped by another armed person and the number of dead would be lower than if he couldn't obtain a gun and was forced to use a bomb instead. Bombs are very easy to make out of a lot of mundane household items. The FAA is currently treating my mascara and lip gloss as deadly weapons!

So, Jonathan, I think we can spend infinitely more money and add infinite layers of security and we still won't be able to stop the truly determined. Would that it were that is easy.

Re: Taxing the Rich

Bill — Thu, 19 Apr 2007 06:11:45 -0000

"...every worker pays the "FULL" 15+% as we were taught in business school, just because half of it is withheld in the name of the employee and half in the name of the employer means zip, in fact any employer will tell you that if they did not have to pay in that "half" they would have it available to increase wages, which implies that they would increase wages, that is that that amount is coming out of MY wages."

This is absolutely true - unless you're an American leftist and you're trying to justify higher taxes on "the rich", then employees pay only half of the tax. But even by that math higher earners pay a larger percentage of their income in taxes than lower income earners. Justifying that with the "each according to his ability to each according to his need" fantasy of Karl Marx is not justification.

"..and yet the gap between rich and middle and poor has grown into a gulf unparalleled even during the Golden Age,"

And yet the gap between the rich, the middle and the poor, which is severely overstated by you, pales in comparison to the gap which exists in socialism. Moreover, socialist countries (or countries with socialist tendencies) are less wealthy overall. So, the poor and the middle class are poorer in socialist countries than they are in the "evil" USA.

"In the post industrial modern America 90% of the people are in effect serfs to the wealthy.."

I nearly spit out my corn flakes reading that!! Markus, do you know what a “serf” is? I had NO idea that our economy is predominantly agrarian, worked by slaves whose ownership is transferred with the land. And here I thought we got rid of all that in the 1860’s! If we are indeed a country of oppressed serfs, then you have a lot of explaining to do! First, explain the flood of immigrants risking life and limb to escape their egalitarian socialist paradises. Then explain how the average ipod listening, big mac munching, car owning serf lives in a 2,400 square foot house, takes several vacations per year and is free to come and go and make personal choices as he pleases. This is very unusual for serfs.

"...and I assure you they will use this power, to simply TAKE assets, or burn them to the ground in their anger."

Have you actually talked to these angry, Reagan-loving serfs or are you just assuming this is true because your communist college professor told you this? Property ownership is very high among American serfs and I'm betting they're quite unwilling to burn down either their property or the property of the employer who enables them to pay the mortgage on their property.

"...Why would you think we are immune to what has happened to all other unfair and oppressive social entities through history?"

Well, for a start, the reason that immigrants like me come crawling to America is because the US is, in fact, not unfair or oppressive. When the Bolsheviks seized the assets in my country of origin, they forced “equality” on us. We all had the pleasure of being equally impoverished and we were all equally oppressed and randomly murdered by a small minority of people who were in charge of “redistribution”. We had no liberty at all. If we refused to work under the “egalitarian” conditions imposed on us by force, we were conscripted. We were forced, against our will, into servitude for the state which promised to “take care of us”. And it did – it killed us by the tens of millions. THAT is always the end result of your revolutionary fantasies. And THAT is what servitude really is.

I also happen to have ties to Egypt. You know - the perfectly good country Gamal A. Nasser turned into a socialist "utopia". One of the largest Egyptian exports is labour. Why? Well, as it turns out (and Marx noted), socialism doesn't create wealth and no wealth creation means no job creation. The politically well-connected elite are ridiculously wealthy, on the other hand. Turns out, rent seeking pays big in socialist countries. Do you know what the Egyptians are obsessed with? The revolution that is sure to come from "the poor people".

Re: The Natural Response

Bill — Thu, 19 Apr 2007 07:37:48 -0000

"But if you believe that mandatory classes and the ability to demonstrate knowledge of safety skills would save lives, why aren't you in favor of better control laws?"

Because I don't know what you mean by "better control laws". The devil is in the details. I also should have been clearer: I don't have a well thought out position on whether these classes should be mandatory for the larger population. I do think those laws are a great idea as a conceal carry requirement for places like college campuses. I do NOT support any "gun-free zones".

"But Maine doesn't have laws requiring the basic measures you outlined above. So let's get them on the books."

That's between you and the people of Maine. I live in New York.

"On the one hand, you seem pretty confident in a textbook and a friend that tell you sociopathy is a personality disorder and that clinicians are reluctant to diagnose personality disorders because these disorders are incurable. On the other hand, you plead ignorance and ask me, the mental health professional, to throw some stats your way. Interesting."

So what you're telling me is that your word as a mental health professional should be taken as the unvarnished truth but my mental health professional friend is utterly useless as a source. Fine. There’s no such thing a sociopath. I concede that I'm in no position to diagnose anybody (the reason for getting rid of my DSM-IV). But that's not the point of this thread is it? Looks like you're just distracting from the fact that you don't actually have the stats to throw my way.

"Is the rate of mass shootings on school and college campuses and in workplaces down?"

Would the rate of mass murder (shooting and non-shooting) decline if we took guns out the hands of law-abiding citizens? Would it even decline if we were somehow magically able to prevent killers from obtaining guns?

"I'm not over-focused on guns. If this was a different thread I'd be talking about something else."

You are over-focused on guns. You're making an assumption that if people had less access to guns that mass murder rates would decline. Neither the 7/7 bombers, the 9/11 terrorists nor Timothy McVeigh used guns to commit their massacres. They also happened to have killed more people than the average gun massacre - especially where the gunman faced armed would-be victims. This is the second time I bring this up. Why are you side-stepping this issue? In fact, you pretty much side-step most of my questions.

"We can spend billions of dollars and thousands of American lives on a far-flung campaign to eliminate weapons of mass destruction in Iraq, but we can't have a debate about spending a fraction of the cost to reduce gun violence in our own country?"

Violent crime is already down, what makes you think that any further reduction would not produce diminishing returns? Why focus violence reduction on "gun violence"? What makes you think that if we are even able to reduce gun violence, that knife violence or bomb violence wouldn’t replace it? What makes you think fighting gun violence will cost a fraction of the war on Iraq?

Gee…Do you really want to drag Iraq into this? OK. How many lives and how much money did the US spend fighting Hitler and then communism? Was it worth it? Why fight anything at all? Conversely, why not fight absolutely everything at any cost? Did you really mean to open the Iraq can of worms or did your politics accidentally slip out in an unguarded moment?

Re: The Natural Response

Bill — Thu, 19 Apr 2007 09:03:40 -0000

Thank your for the firearms statistics, ME.

"Clearly countries with more gun control have lower firearm homicide rates."

But do they have lower overall homicide rates? I believe that through anti-gun legislation we seek to lower overall homicide rates not change the method by which homicide is committed. So don't we need to compare homicide rates not the rate per method?

Which should else explain the following question from my earlier post:

"Why focus violence reduction on 'gun violence'?" - Methinks

I also want to be clear. If I'm not mistaken (and hopefully Jonathan can comment on this), the psychology behind mass murder and murders of individuals is different. So, we are discussing separate issues: 1.) the overall murder rate and 2.) Mass murder rate in particular. I just don't see how gun control will prevent another Virginia Tech massacre.

"I am sympathetc to the argument that gun control would take away current liberties, but life is the greatest liberty that can be taken from someone, and therefore it must be protected."

I agree with you completely. I'm just not seeing evidence that disarming the general public will provide this protection.

Re: The Natural Response

Bill — Thu, 19 Apr 2007 10:06:54 -0000

Jon,

You're so busy deflecting from the issue with who is competent to diagnose mental abnormality and who isn't that you're not getting around to answering the question of how many people you clinicians are successful in locking away from the general public once you qualified folk determine that they are a danger to society. Wasn't that one of the variables in your multi-variete approach? How well is it working?

"I said nothing of sort - again, a simple matter of record. I think it is quite clear that I referenced mass shootings. You're making an assumption about my position on the relationship between gun violence and other forms of violence in our society."

Well, when you're finished clearing up the record, maybe you can finally get around to answering the relevant question. Why focus on guns as a method of MASS murder when guns have proven to be the less efficient method? Wouldn't mass murderers just find another - more deadly - method? And – before you repeat yourself – how do we stop these people if they don’t happen to pay a visit to your ER first?

"Which is why we agree, at least to some extent, on better regulation, not a complete ban, on firearms."

No, we don't necessarily agree. I don't know if I agree with you because you refuse to define "better regulation".

"We've been talking about whether or not to change our laws about guns, which has made this a political discussion from the start."

Hmmm.. that was never my perspective on the issue. I thought this conversation was about the trade-offs involved in public safety issues. I haven’t gotten to politics yet. I didn’t realize you were already there.

"And I wouldn't call it a can of worms - unless that's how you like to think of our federal budget. I guess I just think a discussion of trade-offs in federal budget expenditures is reasonably relevant to any discussion of regulatory costs involved in better gun control legislation."

Well, as a matter of fact, I do see our federal budget as a "can of worms", LOL. I particularly want a satisfactory answer for our tax dollars are used to build bridges to nowhere, farm subsidies, peanut storage, and assorted other useless pork. Claims of outrageous defense spending is a persistent canard. In fact, our defense budget has increased to only 4.3% of GDP in 2006. But the total budget is at least 6 times that amount. Since I believe that one of the very few functions the government should perform is defense, I don’t see this as a large number (particularly in light of the fact that part of that budget is used to subsidize NATO). So, yeah, I think it's pretty much a can of worms best not opened on this particular thread, IMO.

http://www.heritage.org/research/features/issues/issuearea/Defense.cfm

Re: Find the error

Bill — Thu, 19 Apr 2007 10:09:22 -0000

"Lawyers doctors professionals etc will draw a stead check year in year out. risk takers will not, maybe a few big scores and then likely a drop off."

Good point. What's the latest failure rate for star-ups? The last number I saw was 80%.

Re: Taxing the Rich

Bill — Thu, 19 Apr 2007 10:15:12 -0000

"there is a positive--though obviously not perfect--correlation between what one pays today and what one receives in benefits upon retirement."

Does this hold for the highest earners or does the correlation increase the further down the income ladder you go?

Re: Taxing the Rich

Bill — Thu, 19 Apr 2007 13:35:34 -0000

"The Korean dude that shot up Virginia Tech the other day, did you check out his motives? It was his disgust with inequality of wealth as a major motive.."

So, according to you, Cho wasn't motivated by his insanity. He was motivated by income inequality. To you, Cho Seung-Hui's actions make makes perfect sense? That's just disturbing.

Re: The Natural Response

Bill — Thu, 19 Apr 2007 14:25:47 -0000

Jon:

First, 2 psychology questions:

I understand that you can't really "diagnose" Cho Seung-Hui, but if you had to just issue an armchair diagnosis, what could would it be?

Also, is there a difference in the psychology of mass killers and murderers of individuals? If so, what - generally?

I'm just interested. Thanks.

Re: The Natural Response

Bill — Thu, 19 Apr 2007 15:06:26 -0000

"It's just that none of the arguments I have yet heard on this thread help me understand why rational, responsible gun owners and a rational, responsible gun industry are opposed to gun control laws of this type."

Rational, responsible gun owners will submit to whatever they have to. However, rational responsible gun owners are not the problem, are they? The hell-bent crazies are unlikely to submit to all that.

Incidentally, while I haven't owned a gun in 15 years, that legislation you proposed sounds a whole lot like the legislation we already have on the books. It doesn’t seem to be yielding the intended results.

"I would add significant sanctions for those who violate the law."

Those people who violate the law in meaningful ways are already heavily sanctioned - they are usually tried for murder, attempted murder, or commit suicide. Heavy sanctions for people who inadvertently violate some technicality of the law will just scare normal citizens from buying guns in the first place.

"Will it somehow miraculously create a utopian culture free from homicides and mass murders?"

Nobody is calling for utopia. A reasonable argument in support of your assertions that your proposed gun control will reduce the murder rate will suffice. We already have proxies in countries where guns are completely illegal and the murder rates are higher. So, it's difficult to find evidence in support your suggestion. Perhaps you can produce such a source.

"But what I am suggesting is that better gun control legislation would have created a time gap, a window. And in that window, mental health services, the police, criminal justice, the schools, or some other system that interfaced with these youth might have been able to prevent the tragedy."

Assuming mental health services, the police, and the criminal justice system is alerted in the first place. We both know that a person who has no record and no obvious red flags to the lay folk can just suddenly go postal. He will have no red flags to prevent him buying a gun. On the other hand, Cho Seung-Hui went through the entire system with nary a red flag to prevent him purchasing a gun. His window was almost two years. How big a window do you guys need to work your magic?

Plus, there’s that pesky undefined “better gun control” legislation. Your previous suggestion seems like an attempt at such a definition but it’s remarkably similar to the current gun control legislation. For your proposed gun control legislation to be better it must be somehow different from the current legislation and it must also actually BE better.

"I really do wish to understand the other side on this one."

I don't think you do, Jon. If you did, you would stop asserting that things would be so much better if only things were better and side-stepping the difficult questions.

Re: The Natural Response

Bill — Fri, 20 Apr 2007 05:20:41 -0000

Mikie V.,

Yes, of course I agree with you!

Jon,

OK. We seek the same outcome (fewer homicides). Any restrictive action we take infringes on our liberty. To compensate for lost liberty, the action must result in the intended outcome. Further, it must not cause a worse unintended consequence. I can't think of an action that fits this criterion. If you do, please post it.

Re: What's the Relevance of Rodrik's Point?

Bill — Tue, 01 May 2007 07:43:15 -0000

David,

The real median income does not reflect the rising value of non-money payments like health and dental benefits. Certainly healthcare benefits are part of compensation and when they are included as such, the real median income is no longer stagnant. You also have to remember that people don’t tend to have the same income throughout their lifetime. So, those people who were earning the median income several years ago are likely not the same people as those who earn it today. I believe that point has been made ad nauseam on this very blog.

Humans always pay the price for change - and they always ultimately reap the ultimate benefits. Change is stressful and painful but without change, and its associated ills, we also have no progress. Necessity is the mother of invention.

Re: What's the Relevance of Rodrik's Point?

Bill — Wed, 02 May 2007 04:23:58 -0000

Good point, Sam. Too much Keynes and not enough Friedman?

It is also a puzzle to me why we believe that private citizens will inevitably take advantage of and abuse the less powerful but government (run by largely the same people) will not - despite overwhelming empirical evidence to the contrary.

Re: Satel's Kidney

Bill — Wed, 02 May 2007 12:39:57 -0000

Kebko,

OMG!! I was so stunned reading your post that I actually stopped breathing for a moment. I am left uncharacteristically speechless. Thanks for posting it.

Re: Satel's Kidney

Bill — Wed, 02 May 2007 13:00:45 -0000

I don’t have a well thought out opinion on the subject of organ sales. In principle, I agree with the idea.

Although, I question whether selling an organ would not provide incentives for murder and thins like maybe turning off life support just a tad earlier than you otherwise would. Could abused wives be coerced to give up organs for cash by their abusive husbands?

I don’t know how valid my concerns are.

Re: Satel's Kidney

Bill — Thu, 03 May 2007 07:58:38 -0000

Geoffrey,

You make very strong points (as do the other commentors) and I cannot disagree with you.

I have once again benefitted from the intelligent arguments of the people on this blog.

Re: Satel's Kidney

Bill — Thu, 03 May 2007 13:55:36 -0000

Thanks, Lisa. Got it.

Here's some random thoughts I had...

The bio-ethicist assumes that if kidneys can be sold, none would ever be donated as charity (we could make the value of a donated kidney tax deductible). Yet, charity is the sole system now.

…If they were allowed to sell their kidneys, why, they might accidentally sell both!

If a person is dumb enough to do that, maybe it’s not such a bad thing that he’s removed from the gene pool!

Re: Blinder on Offshoring

Bill — Mon, 07 May 2007 12:51:19 -0000

Another fantastic letter, Dr. Boudreaux. Bravo.

I also loved Dr. Mankiw's remarks.

It seems that Alan Blinder doesn't want protectionist policies. He said so when he "came out" with his views in the WSJ, he said so in a video interview with the WSJ and he said so at the post-debate dinner.

However, if I interpret Dr. Blinder's comments correctly, what he does want is more income redistribution to “soften” the impact of offshoring for those directly impacted.

But doesn't that just set up another entitlement? And doesn't that do what all entitlements do - destroy the individual's need to change, to innovate and ultimately to create wealth? Doesn't that also create another reason for politicians to tax us to death to establish these entitlements, providing further disincentive to create wealth and making our economic slide inevitable? Or am I missing something here?

Re: Blinder on Offshoring

Bill — Tue, 08 May 2007 04:46:05 -0000

GREAT example, Ray.

I worked several jobs to get through school, got "displaced" a few times and went into business for myself eventually. Lots of people I know just moaned until someone hired them and then moaned if they were hired at a lower compensation rate than they were used to. Why I should be held responsible for the welfare of smart and educated but lazy professionals is beyond me.

If you can't compete with labour in the third world, what makes you entitled to a lifestyle any different from theirs?

Re: Job Creation

Bill — Tue, 08 May 2007 14:14:41 -0000

I dunno. Seems to me that the current system of licensing doctors and the AMA does more "herd culling" than health insurance.

A truly free market system would mean getting rid of the AMA. I come from a family of doctors (mostly surgeons) and they don't seem to believe that the AMA does anything to reduce incompetence but does plenty to keep people out of the profession.

Re: Kling on Medical Care; Or, How Americans are Screwing Themselves

Bill — Wed, 16 May 2007 09:11:57 -0000

What? I shouldn't reach around my back to scratch my nose? Perish the thought!

Great article.

Re: They care so much about me

Bill — Wed, 16 May 2007 12:47:00 -0000

Bret,

This bill tramples on everybody’s rights without actually protecting anyone in any meaningful way.

It doesn’t simply mandate that restaurants list hydrogenated fat and the amount used in a dish or in a specified serving so that you may be informed when choosing your meal (a cheaper and simpler alternative). Instead, it outlaws trans fat except under special circumstances. Under no condition does a restaurant have to tell you that you’re consuming trans fat (or any added saturated fat, for that matter). Obviously, if you consume several dishes (or servings) cooked with 0.5 grams of trans fat, you could consume several grams of trans fat without ever knowing it! Since the 0.5 grams is within the law, the fact that trans fat was used does not have to be revealed to you. Moreover, since trans fat has roughly the same effect as saturated fat, as Russell pointed out, you may be consuming palm oil instead and you’re no better off. This bill is a way to terrorize businesses without actually helping you get the information to make your own healthy decisions.

This is entirely different from smoking. When you smoke, there is a neighbourhood effect. That is, you’re not the only one forced to inhale your chosen toxin in an enclosed space. When you eat trans fat, you’re the only one directly effected.

Re: Kling on Medical Care; Or, How Americans are Screwing Themselves

Bill — Wed, 16 May 2007 12:50:31 -0000

Marc,

The DSM-IV begs to differ - with the "sex" part, maybe not so much the "casual" bit.

Re: They care so much about me

Bill — Wed, 16 May 2007 14:51:02 -0000

Bret,

I never eat trans fats and I've seen eateries proudly advertise on menus that they don't cook with hydrogenated fats at all. And this without a mandate! I've found hydrogenated fats fairly easy to avoid by educating myself about which foods are most likely to have them and which aren't.

At the end of the day, you don't have to eat anything you suspect has hydro fats in it and you are not compeled to eat out at all. When in doubt, order a salad with olive oil and vinager. Otherwise, cook it yourself.

Re: They care so much about me

Bill — Thu, 17 May 2007 04:49:38 -0000

Isaac beat me to it.

Bret's argument makes the gulags, concentration camps and seizure of private property A-okay because the government sanctioned them.

and before you go down that road, Bret, Hitler and Chavez were "duly" elected. Soviet leaders were also "elected" (if you buy in to the Jimmy Carter definition of an election).

Re: They care so much about me

Bill — Thu, 17 May 2007 07:40:46 -0000

"So how far am I willing to impose the tyranny of government for certain issues? Oh, about as far as banning trans-fats and smoking in restaurants, and not much further."

Too bad you live in a country of precedent law. Now that you've opened the door, what is to prevent government from flinging it wide open? It's already busy seizing private property under "eminent domain" laws ala Hugo Chavez. Do you think you'll be asked for special permission if we were to, say, send the Japanese to "special" camps for any reason? In thinking about public policy, it behooves you to think beyond stage one.

Of course, you want to reform the world in your liberal reformist way and you want everyone to share in the costs – regardless of how large - of your personal decisions, as all good leftists do. Personal responsibility for eating habits is completely foreign to modern day leftists.

Re: They care so much about me

Bill — Thu, 17 May 2007 09:46:14 -0000

"Legislation has no such restrictions."

Indeed. That's how the 16th amendment went from effecting only the super-rich to the tune of no more than 10% of their income to a complex and multi-layered system which consumes a huge portion of the fruits of people's labour.

Why stop at trans fat in an effort to spare your life? Driving is much more dangerous than trans fat. Let's ban driving. People of Middle Eastern decent have proven to be very dangerous, let's ban them too. Alcohol and cigarettes are bad for you. Let's ban them. Pregnancy is unspeakably dangerous for women (even with modern medicine), let's ban or regulate pregnancy.

C'mon, Bret, instead of you taking responsibility for what you eat, let's just make everyone else's life not worth living. Why not? They won't be poisoned.

Re: Will on gouging

Bill — Fri, 18 May 2007 05:30:36 -0000

Politicians must read a lot of Oskar Lange - a "free market" but more "efficient" because the [redundant] central planning board will magically make it so. It worked so well for Russia! I know because John Kenneth Galbraith told me so in a 1984 New Yorker article and I'm fully willing to suspend my own memories of waiting in a queue for an hour to get my ration of two potatoes in Moscow.

Anti-gouging laws are price controls, pure and simple. These laws will ensure that people who are in desperate need of supplies will not be able to get them – at any price. I hope everyone enjoyed Jimmy Carter’s gas lines in the 70’s. Nancy Pelosi thinks we need a return to those golden days

Re: Will on gouging

Bill — Fri, 18 May 2007 11:26:23 -0000

"I agree, but how big do you really think that is? The government doesn't have to do all the stuff the oil companies do"

Yeah, like take the massive risks that oil companies take to find and extract oil from the ground. Then there's the expense oil companies incur to extract, refine, transport, etc.

None of these risks and costs are incurred by the government. The government just comes along, like the mafia, and demands its cut. The oil companies are accountable to investors. Has anyone ever been successful in holding the government accountable for the money it forces out of our hands? Considering that the government routinely collects $100 in taxes to do a $1 job, I doubt it.

Like all good racketeering operations, the government threatens the oil companies with more robbery in the form of a "windfall profit tax" when oil prices are high and the oil companies make a profit. The oil companies are then obliged to fork over their investor's money as "political contributions" the the threatening politicians so that the politicians back down - until the next session. Funny, when I was covering the oil industry in the mid-90's and the oil price touched $10/bbl, I never heard a peep out of congress about providing subsidies to keep the struggling oil companies afloat (not that I would have supported that, mind).

That's our government hard at work to "protect" us. From prosperity.

Re: Malum in se; malum prohibitum

Bill — Wed, 23 May 2007 10:07:54 -0000

Well, I'm one of those lottery winners that M. Hodak speaks of. My spouse is from an entirely different part of the world and just became a citizen in the last couple of months (hooray!). Foreswearing welfare is a legal precondition to the green card which you must receive years in advance of applying for citizenship. Foreswearing welfare is not, of course, a precondition of citizenship.

I would rather not slam the door on anybody but immigrating here legally was expensive and nerve-wracking for both of us. We want people to come to this country to work and have a better life but we want no responsibility for the entitlements government extends and for which we pay. The welfare state distorts the issue.

A poster on this thread asked if we (America) are now an exclusive club with membership privileges not wanting anyone crashing the party. We are indeed, because that's what socialism creates. We are especially against impoverished, low-skilled individuals who are more likely to end up living on our dime. This is understandable and yet another example of how the welfare state is an albatross around our necks. Sadly, even Milton Friedman said that a welfare state and unfettered immigration are incompatible.

The United States had unfettered immigration before the welfare state came into existence and it worked very well. I would like to see a return of unfettered immigration coupled with a massive reduction in the welfare state.

Re: The Answer Is In the Margin

Bill — Mon, 04 Jun 2007 11:18:44 -0000

Rufus,

I realize this is a dead thread at this point but I just got back from vacation.

Oil is NOT finite. That is a misconception held by people who don't understand oil economics. Oil at a given price is finite. If you dig up a pail of earth from your back yard, you can get hydrocarbons which can be refined into fuel. It's just going to be very very expensive. We can always find more oil, as long as you're willing to pay for it.

Re: The Big Deal

Bill — Mon, 04 Jun 2007 14:55:07 -0000

Another post to remind me why I've become addicted to this blog, Russell.

Michael: "But I think it’s unrealistic for me or anyone else to have to determine on my own what MAKES a car safe or food healthy—engineers and doctors should tell me that."

I don't know what the governmet thinks of my car but I do know what Consumer Reports thinks of my car. In fact, every time I've had to buy a car, I first chose the make and model by looking up the best rated car in my price range in Consumer Reports and then went looking for it in the paper or at the dealer. I've never been sorry. I demand the safest and most reliable car in my price range. All of the cars sold in the market meet the government's standards but those standards vary widely and Consumer Reports helps me find the highest standard for the price I'm willing to pay.

I've chosen practically every piece of technology and appliance using Cnet and Consumer Reports. I've educated myself about nutrition using readily available private sources. I haven't bought a packaged cookie or a locally baked good which has had trans fat as an ingredient for years. And there are ever more cookie makers and local bakers responding to demand by consumers like me.

I realize this is anecdotal evidence. But from where I stand, I can see little useful government intervention and less need for it - especially in light of the liberty lost. The market responds much quicker and with better information than the government ever can.

Re: The Big Deal

Bill — Tue, 05 Jun 2007 04:53:38 -0000

Michael,

Consumer Reports also does its own testing. The point is - and you and I are clearly examples - that there is demand for third-party testing. As long as there are people who are willing to pay for it, there will be incentive to provide it and it will be provided.

Incidentally, what I said in my post is that for the cars to come to market they have to meet basic government regulations, not that Consumer Reports relies solely on government crash tests. In fact, government crash tests aren't even all that great since they don't test for some of the most common accidents. Nor does the government test for things like handling - important if you want to avoid crashing in the first place. Private companies do because there is demand.

Re: The Reality Reflected by Prices

Bill — Tue, 05 Jun 2007 07:17:05 -0000

Dug,

You haven't dug far enough. I've never been to more polluted hell-holes than socialist and communist countries. Monopoly production and government control insures that there is nobody to sue, no responsibility to the population and no alternative for the consumer. They are by far THE most polluted places on earth.

Keep digging on Erin Brokovich too. The junk science she and Masry used to win the case doesn't mean that PG&E's dumping actually caused ANY of the ailments she claimed it did. The movie is a true story but the story of how lacking the suit was in actual scientific evidence somehow didn't make it into the movie. Here's a link to but ONE article about the junk science in her lawsuits - including the one that made her famous: http://tinyurl.com/2w3lh7</p>

Pollution exists because it is the natural outcome of doing anything. The worst pollution is perpetuated by government . No accountability, you see.

Re: Imperfect markets, imperfect government

Bill — Wed, 06 Jun 2007 08:10:56 -0000

As a person who escaped communist Russia, this kind of talk always makes my blood run cold. I remember the outcomes of the thinking of these “smart” people armed with “toolkits” all too well. Also, thanks for a reminding me why I don't read Delong's blog.

Delong wants to put himself in the position of deciding what is helpful and what is hurtful. HE seeks to make that qualitative decision for me, I am but a pawn in his game of economic chess. Well, I have a proposition. Brad Delong is enormously fat. This is obviously hurtful to him and hurtful to the wallets of those who happen to be in his healthcare plan. As a benevolent ruler with a nice economic toolkit, I seek to make things better for him by forcing one hour of running on him and limiting his calories and food choices on pain of imprisonment and heavy fines. Surely, that will improve both his health and the wealth of the nation. Let’s call him up and see what he thinks of my little plan.

BTW, I'll let you know when I find a "reality-based leftie". If a leftie thinks that a single entity can know that which is unknowable to it and act on that unknowable information better than the individual who actually possess the information, then I would say that he's fairly detached from reality. I would predict that his next statement is that he has X-ray vision and can leap tall buildings in a single bound. Too bad Brad Delong thinks this is reality-based.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Wed, 06 Jun 2007 08:38:23 -0000

Paul Craig Roberts recently dove, head first, into 9/11 conspiracy theory land. About three decades before he did that, he wrote a book called "Alienation and the Soviet Economy" where he painstakingly outlined exactly why Oskar Lange’s “planned market economy” is stupid (a better job, I think, than Hayek of Mises did). Basically, to be better than the market, the central planning committee must have more information than all the participants of the market. This is, of course, impossible. So, at best, the CPB tries to take the place of the market by setting prices through trial and error, making it redundant to the market.

It’s interesting that people have throughout history fought to free themselves of bondage only to ask for bondage again in a different form. If people fought to free themselves from the oppressive and arbitrary rule of kings, why would they ask for the same oppressive and arbitrary rule from another government? This has always puzzled me.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Wed, 06 Jun 2007 10:07:06 -0000

I like that explanation, Sam. It's still puzzling that some people can't figure it out faced with so much evidence.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Wed, 06 Jun 2007 10:52:38 -0000

Sean,

Markets neither produce nor promise utopia. A market economy is just the better alternative among available alternatives. Those things that people call "market failures" rarely are, though.

Let's take your example of child labour. First, child labour does not result from a market economy but rather from poverty. Second, it's only an unfavourable outcome if the child has a better alternative and is prevented from it. The kind of extreme poverty that leads to child labour implies that the child's opportunity cost is low indeed. If the alternative is not school and playtime but starvation, suddenly child labour isn't so bad. This is, in fact, the case for many children in impoverished countries. Once a country's economy develops, its labour becomes productive and its wealth grows enough to enable children to go to school rather than work, that is exactly what happens. No sustainable economic model is able to achieve this with the speed of a free market economy. Incidentally, child labour still exists and has always existed - especially on farms - it's called "chores". We need to keep perspective.

Starving old people are also not a natural outcome of a market economy. In what way does a market economy produce starving old people and, if so, in what number? Were Americans starving in large numbers before welfare? On the contrary, collectivism produces more starving people, more materialism and more greed than any other economic system I've encountered. When people have less of everything, they are far less willing to share and they become obssessed with what they don't have - material wealth. Worse, people don't even have the ability to save for the future and become completely dependent on others to feed them in their old age. Who will you feed first from your meeger earnings, your child or an aged neighbour? A free market impedes neither wealth creation nor saving for future consumption. Thus, it doesn't make sense that starving old people are a natural outcome of free markets.

I think we say "let the market take care of it" precisely because we understand that we don't understand the power of spontaneous order. Those who seek to interfere with spontaneous order are implicitly claiming that they not only understand it but that they have all the answers necessary to produce a consistently better outcome.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Wed, 06 Jun 2007 10:55:16 -0000

ooops. Sam beat me to it.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Thu, 07 Jun 2007 04:27:32 -0000

Daniel,

Meanwhile, on the collective, people regularly die on waiting lists to get onto other waiting lists for a third waiting list to even see a doctor. The laws of supply and demand are tricky that way. The cost happens naturally while the price is set artificially low, so the quantity and quality of the supply declines and rationing ensues (welcome to the waiting list). In socialist Europe, people regularly die in greater number from cancer while waiting for government agencies to negotiate down the price of medicine - meenwhile, the medicine is not available to them at any price. Complicated life-saving surgeries are also not available - too expensive. For those, the super wealthy come to the United States and the not so wealthy just die. I'm sure you noticed that the guy who was diagnosed with drug resistent TB went out of his way to leave socialist Europe to come to the United States because he was sure he would die in Europe. To get what is considered STANDARD medical care in the UK, people are forced to pay out of pocket. THOSE things are just a sample of the outcome of a socialist system. While some people may die because they can't afford to extend their lives with very expensive medical care in a free market, they die in larger numbers in countries where that medical care is simply not available because of the welfare state.

On a related note, I don't know why people think medical care is different from any other consumption. If you want medical care, you must pay for it. If you aren't willing to pay the amount that it costs plus some normal profit to the provider, the provider won't provide it. Simple. What's better - available at a high price or not available at all?

Re: The Deep Substance of An 'Empty Slogan'

Bill — Thu, 07 Jun 2007 07:55:31 -0000

"They're appealing to our desire for certainty, a desire to escape the inherent limitations of the human condition."

It's interesting that you see it that way. I read it entirely differently. I always read the enthusiasm for free markets as a kind of wonderment of the power of human ability to solve problems. I mean, just look at all the innovation we take for granted - all courtesy not of some government direction but springing from the ingenuity of free human beings.

I've often said that the United States will be difficult to bring down as a super power because it's power is derived from the aggreggate of all the individual power of free human beings innovating for themselves, not for the state, increasing the wealth and power of the entire country in the process. It is the opposite of the soviet union and the opposite of the nanny states of Europe. There, people are not empowered and the pathetic rent seeking that ensues is truly heartbreaking when you consider the productive activity these people could be engaged in instead.

"People are out there who will present the market as a kind of panacea."

Human beings are relative creatures. Compared to the alternative, the market is a RELATIVE panacea. The market is a marvel but it won't solve all our problems. Unlike government, though, it won't stop us from trying either.

Re: The Deep Substance of An 'Empty Slogan'

Bill — Thu, 07 Jun 2007 12:22:11 -0000

Interesting, Sean. Of course a single plan does not work because human beings are different. In fact, all social engineering fails because people have different wants, needs and preferences and – perhaps even more importantly – free will. However, I find the people who want to foist their particular vision on the rest of humanity incredibly arrogant andeven if they are not mean. They seek to enslave people to their vision and I find that more unforgivable and more dangerous than meanness.

You seem to imply that we don’t understand how markets work. I don’t agree with that. We know very well how markets work. We understand that markets are zillions of individual voluntary transactions between individuals. What we can’t do is predict the outcome of zillions of these transactions and the decisions that go into these transactions are also unknowable to us. We can’t because to predict with accuracy we would have to be privy to all the little bits and pieces of information that is in the possession of billions of people. These interactions are made more complex as information is almost always asymmetric and people’s decisions change when new information relevant to their decisions presents itself. When I say that I don’t understand this spontaneous order, I mean that I can never have enough information to know what’s going to happen next nor do I necessarily understand why people have chosen to behave the way they did in a particular instance. When would-be social engineers say that they don’t understand the market, they literally just don’t understand transactions – not that they know that they lack the information to understand zillions of decisions. And these people are arrogant enough to believe that their ignorance constitutes are reason for messing with this mechanism.

As for “favourable” results…as you say, “favourable” is subjective. I think it’s favourable that markets allow people to fail because failure is a good teacher. Further, we now have a lot of empirical evidence of both socialist and relatively free market economies. What we can conclude from this evidence is that markets are capable of producing favourable results and socialism isn’t. As I’m sure you have observed, for all its egalitarian instincts and utopia-building, France is a mess. Free markets, on the other hand, allow people to continue to work toward a better outcome. Government intervention ensures that your search will always be hampered.

It is, in fact, socialism which promises certainty, not free markets. Unfortunately, the only certainty produced is the certainty that things will never be better because people are prevented from the interactions necessary to find and test solutions. Life produces bad outcomes, not the markets. The markets can’t prevent a bad outcome but they are the best place to look for a solution. Socialism can’t prevent bad outcomes either but it can and does prevent solutions. Relative to what’s available, markets are a panacea (keyword: relative). They provide no certainty but they provide you the best chance for a solution. Can we really hope for anything more?

The politicians of whom you speak have nothing to do with markets. They speak of free markets to get votes and they vote for tariffs to get votes. The politician who has been the most consistent in his view of free markets is Ronald Reagan.

Incidentally, I should confess that I am a trader by profession (staying in econ would have meant teaching or government - yuck). I make my living in volatile financial markets. I can never be certain of what the market will do next (and I don’t try) but I know that I can always manage my risk with either insurance or by simply staying out of highly volatile assets. In markets, people can manage their own risk according to their preferences, in the alternate system, someone else decides how much risk you may or may not take. I’ll take the uncertainty of the markets over the certainty of being trapped in someone else’s vision any day.

Re: Wages in China

Bill — Fri, 08 Jun 2007 08:38:26 -0000

St. Wendeler, you mean the unions seek to create a labour monopoly? Of course the do!

And for all the reasons you stated and his previous experience with labour unions in the Soviet Union, my father refused to join one when he came to the United States. He is the only non-union worker in his organization.

Re: Merit-based immigration

Bill — Fri, 08 Jun 2007 10:37:03 -0000

The visa issue and the immigration issue are two different things, in my view. Visas do not confer the benefits of either citizenship or permanent residency. Once the visa expires, you have to go home. In addition, you must prove that you are very high skilled labour to even be elligible for an H1-B. Even a fully trained nanny from a British nanny school is not considered "skilled" and is not elligible for an H1-B, for example.

There aren't enough H1-B visas for all the highly skilled foreign workers required by American business. Why they won't allow an unlimited number is truly a puzzle to me. It's true that with an H1-B a foreigner can eventually apply for a greencard if his employer wishes to sponsor him, but by that time, we WANT that person to immigrate. These are the people who are the largest net benefit to the economy! If they can't get the visa issue straightened out, I have little hope for the whole of the immigration issue. I still think our robust welfare state will be a stumbling block for meaningful immigration reform.

Re: Merit-based immigration

Bill — Mon, 11 Jun 2007 07:53:19 -0000

Chris,

Not true. Americans aren't majoring in science and math and that's a problem. Most of the H1-B holders on Wall Street (the area with which I'm most familiar) have such specialized skills that most Americans can't do them. Heck, most people on the planet can't do those jobs. You can't just train French Lit majors to trade options, for example. Unless, of course, you want to soon be out of business. While there is a very small pool of highly qualified candidates who CAN do the job and the pool of those who CAN and WANT to do it is smaller still. You may say that the company just needs to up the price they're willing to pay but then you run into the problem of the task becoming unprofitable and not worth doing at all.

Something else to consider is that fewer H1-B visas means a higher propensity to offshore jobs. So, would you rather attract these people, the economic activity they will generate and the taxes they will pay to America or not? That's really the bottom line question. I think we should - at least that's an offset to the flood of illegals, a large number of whom end up a net cost and whom we cannot stop crossing the border.

Re: Thou Shalt Not Prosper

Bill — Wed, 13 Jun 2007 06:26:50 -0000

Keith,

It's worse than that. They aren't happy unless OTHER people give time and money to their cause. Somehow, just believing in the cause is enough to absolve them of responsibility. It's sort of like Soviet Russia or Animal Farm - some people are more equal than others because I said so.

I have two examples from my own life. They aren’t the only two but these are the first to jump to mind.

An avowed socialist/communist university history professor (Russian history, no less!) whom I know is on the city council for his small town. The town wanted to increase funding for a social program the professor supported. To fund it, the council voted to raise taxes on the highest earners in the county. The professor became enraged when he found out his taxes would increase and carried on about how “the rich” should bear the cost. The professor’s compensation puts him in the top 5% of earners in the United States. The professor also doesn’t “believe” in “making money” and, unfortunately passed this “ideal” on to his children who are both well educated and bone idle.

I have another friend who is an environmentalist. Although she is very well educated and has an above normal IQ, she’s pretty radical in her beliefs and doesn’t understand the true expense of the trade-offs she wants people to make. She’s all for restrictive and expensive government regulations that will prevent drilling, emissions, mining, logging, etc. Some “population control” to ease the pressure on Mother Earth is okay with her. She herself has had a couple of kids, drives a gas-guzzler and uses disposable diapers. A more “environmentally friendly” car was considered but she wanted to have the ability to seat more kids than that car would allow. Her opportunity cost is incredibly small but she doesn’t want the inconvenience of the life of drudgery she would impose on others in the name of the environment.

What I’ve learned is that “environmentalist” and “socialist” are usually code words for “dictatorial hypocrite”.

Re: Thou Shalt Not Prosper

Bill — Wed, 13 Jun 2007 12:57:33 -0000

Freemarket, since when have we subsidized gasoline and on what basis are you asserting that development outside of densely populated cities is unsustainable?

Re: Thou Shalt Not Prosper

Bill — Wed, 13 Jun 2007 13:06:26 -0000

"Of course, 30 years ago, they told us that we were in for a new killer ice age and global overpopulation."

I vaguely remember that. The over-population issue was especially funny. Part of the claim was that we would not be able to grow enough food to feed the "exploding" population. Of course, if there's not enough food in the world, reproduction will suffer and the population will decline naturally to a sustainable level without mass starvation. And that's assuming that no new agriculture technology increases crop yields.

One of the new ice age suggestions was to drop stuff onto polar ice caps (or glaciers? - don't remember exactly) to melt them. Now they're melting naturally and nobody is happy. I think these people just don't like things to happen without their specific intervention. Engineering at any cost.

Re: More on Smoot-Hawley

Bill — Mon, 18 Jun 2007 11:15:13 -0000

People who love tariffs - and government meddling in general - strike me as people who cannot think beyond stage one.

If you asked these same braniacs to write a diet book, the process would go something like this: food causes weight gain, food is the problem, eliminate food. Externalities? What externalities?

Actually, given an editorial in the WSJ this morning, that example isn't so far from reality.

Re: Illegal Immigrants

Bill — Mon, 18 Jun 2007 11:35:05 -0000

Mexican immigrants tend to bring their culture of dependency with them. Unfortunately, our welfare state nurtures that culture (just as it nurtures the black redneck culture of the ghetto). If it didn't, they would change and become more productive with successive generations. Mesa Econoguy's post points out that there is no such change in successive generations.

It is always forgotten that these people usually work for minimum wage or below and can't receive hand-outs (barring healthcare) until they are citizens. So, of course they work. They don't have a choice. As soon as they do have a choice, they stop working and get on the dole in large numbers.

We get more nationalistic because our growing welfare state makes us protective of our culture and our wealth and whom we have to share it with. What probably turns Mike's stomach is that an individualist doesn't much care about borders and Mike is an individualist. A classical liberal. But when we are forced to "spread the wealth" in a collecitivist fashion, we become very much more protective of it and don't wish to share it with the world. Didn't Hayek point that out?

A poster above said that we should make illegal immigrants legal and tax them. The top 40% of earners pay 99.1% of all income taxes. How much do you think low-skilled illegals will contribute to tax revenue compared to how much they will take out via the welfare system?

Re: Illegal Immigrants

Bill — Tue, 19 Jun 2007 09:48:22 -0000

According to the Wall Street Journal, 1/3 of illegal immigrants pay taxes.

Did the article also mention how much illegal immigrants are cost the economy?

Re: Illegal Immigrants

Bill — Wed, 20 Jun 2007 08:14:17 -0000

Adam,

The problem is that we have the "safety net" in the first place. If we didn't have one they couldn't use it and the largest problem would be solved. Also, would that it were a safety net only. That would be okay. But it's blown up into a full fledged, all-services, entitlement program. The fact that they use it is secondary, but for those paying into the system, you can see why adding more members is not in their interest.

Illegal immigrants are not elligable for the dole. So, you won't find them sitting on it. Once they are made legal, however, they are elligable.

They do avail themselves of things like healthcare and public education and those are shared costs. Worse, they complicate both systems.

The Heritage Institute did a study to find out how much low-skilled labour costs the economy (the study is available at Heritage.org). Low-skilled workers are a net cost to the economy because of the $%#@ welfare state. In addition, several other posters here have posted links to studies that show that these immigrants tend to vote for more entitlement programs and a large percentage of their offspring end up on welfare. Again, the existence of the welfare state and the ability of people to vote to compel others to pay for their lunch is the problem, not the low-skilled immigrants per se.

I'm not saying that these are bad people who came here to live on the dole instead of working. But I bet you didn't find education and progressing to higher skilled jobs part of the general culture. That would be okay, if there were no all-encompassing welfare state to subsidize those personal choices. Instead, the second generation grows up to be just as low-skilled, infused with a sense of entitlement and much more likely to end up on the dole.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 05:14:26 -0000

Good point, CRC. Also missing from that calculation of "falling real incomes" is incentive compensation like bonuses and tips (which have become an increasing portion of total compensation) and fringe benefits like healthcar and flex time.

Even if it were true that your income is falling, you do care if the price of goods is falling faster than your income. It would mean that you are relatively wealthier.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 08:56:37 -0000

"Relative wealth, however, is a zero-sum game where some win and some lose, relative to the rest of society."

That's not a zero-sum game. In a zero-sum game, one party has to lose exactly the amount the other party gains.

The less productive you are and the less risk you take relative to someone else, the less wealth you will build. That has nothing to do with zero-sum games.

I think we can agree that the creation of Microsoft did not result in a loss for those people not directly associated with it - especially not a loss equivalent to the gain made by Bill Gates. In fact, if it didn't add value to the lives of people not directly associated with the technology, Microsoft would have failed and Bill Gates would be a working stiff for a company that did add value.

Those taking the risk to create the wealth will have more of it in the end. Otherwise, they wouldn't take the risk and they wouldn't forego the leisure to make their innovations available to everyone else. 80% of all start-ups fail within a few years, btw. However, all of us gain by the value of the things they create and that raises our wealth. Because we took no risk to create products and services that enhance other people's lives, we will benefit less than those who did. But our wealth still increases.

A large gain plus a smaller gain is not zero-sum.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 10:31:15 -0000

JN,

That's an interesting thought experiment. We ask interviewees a similar question:

Which scenario would you prefer? You make $500,0000 but the guy sitting beside you makes $1,000,000. You make $150,000 but the guy sitting beside you makes $100,000.

MOST people choose the second scenario. They would forego significantly more compensation just to know that they are making slightly more than their neighbour. It boggles my mind.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 13:58:26 -0000

"who would be happy with their BMWs if they know a Ferrari is lurking around the corner, right?"

ME!!! I would.

You're absolutely correct, of course. But it's also an absolutely stupid way to think. At $500k, you're making more money than almost every other person in the country. So, compared to everyone else, you're very wealthy (if we measure wealth by income). You're just less wealthy than some other miniscule minority of people - in this case, the guy you're sitting beside is in that minority! At $150K, you're a lot less wealthy compared to the rest of the population but you make slightly more than the guy directly to your right.

Preferring scenario B is like saying that you prefer to live poorly as long as Donald trump lives more poorly than I. It's like cutting off your nose to spite your face.

Let's put it another way: would you prefer to be the junior trader making $500K in a firm of very smart traders who will always make more than you will because they're smarter than you or would you prefer to make $150K in a 7th tier firm of people who make less than you because they're all dumber than you are.

A 70% paycut is a pretty high price to pay to feel smarter than you are.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 14:29:57 -0000

Rolf,

Doctors in the United States are paid more than in the UK. That's true. In fact, healthcare here is more expensive than it is in the U.K., as you point out.

This is because healthcare here is much better than healthcare in the United Kingdom. The U.K. doesn't actually reduce the cost of healthcare. The NHS keeps the price of healthcare down via price controls. Price and cost are not the same. When you cap the price of a good or service, the quantity and quality decline. Hence, the NHS is substandard. 45% of Britons pay for additional insurance to get access to anything approaching standard care in the United States. The difference is that in the U.S. we have the option to buy health insurance or not and in the U.K. you pay for the NHS whether you want to or not.

One of the things that raises the cost of healthcare in the United States is malpractice suits. I'm conflicted about this. On the one hand, most malpractice suits are not won by the plaintiff but cost a lot to litigate. On the other hand, do I really want a doctor to be that much more careless with my liver or kidneys because he knows he will not be liable - or there's a limit to his personal liability? There's no limit to my personal suffering if he removes the wrong kidney!

The price of medication in the United States is also higher than in Europe. This is partly because developing drugs and complying with the FDA's endless testing is expensive and partly because American drug companies (which produce most of the medication in the world) sell the pharmaceuticals to socialist healthcare programs (like the NHS) in Europe at a reduced price. They have to make up for the lost revenue somewhere and that somewhere is the U.S. market. So, if Europe would kindly stop freeriding, we could reduce the price of our meds here a little bit.

However, there is no economic crises brewing in the United States over healthcare - no matter how politically popular it is to wax apopleptic about it. If people want the same relatively crappy level of healthcare available in Europe, they can opt for that already by opting out of life saving measure and stuff like in-vitro fertilization. What people here get indignant about is the cost of heroic measures they expect to be performed on their behalf - measures that would be unavailable to them in Europe. They want viagra, in-vitro, saving 400 gram preemies and brain-dead people and they want someone else to pay for it. They also want the ability to sue the doctors for malpractice but don't want to pony up for the additional cost.

So, we don't have a healthcare driven economic crises brewing here. What we have is a stupidity crises brewing. People living cushy lives who have become so accustomed to advancements most of the world only dreams about that they feel entitled to them.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 16:03:08 -0000

Well said, Lee. There are behaviours that lead to success and those that lead to failure. "Redistribution" rewards behaviours that lead to failure. And that is the road to poverty for all.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 16:56:35 -0000

"Yes, it pretty much is. With a constant population, it *is* constant. If you go from position N to position N-1, what happens to the person at position N-1?"

Nope. In your example, one person's loss is not another person's gain. That would be the condition for a zero-sum game.

Unless you can show that the person at -1 actually lost that 1 directly to another person who gained 1, then you don't have a zero-sum game. I'll just leave it to you to come up with real world example of such a thing happening.

Of course, then you'll have to explain how aggregate wealth grows when we're playing a zero-sum game.

I'm afraid you've committed the "lump of wealth" fallacy.

Re: A New Deal for Globalization?

Bill — Thu, 21 Jun 2007 17:03:57 -0000

Henri,

Don't twist yourself into a pretzel about the nearly infinite iterations of the different scenarios. The questions is asked in the context of the world as it stands at this moment. Besides, how is it even reasonable for you to have have different purchasing power from the guy sitting next to you?

Re: A New Deal for Globalization?

Bill — Fri, 22 Jun 2007 06:34:09 -0000

"people are failing to take care of themselves because of a safety net."

Rolf, I see what you mean and I couldn't agree with you more! IMO, we're misusing the concept of insurance to mean that we should make all healthcare costs collective. Personal responsibility has fallen by the wayside.

Re: A New Deal for Globalization?

Bill — Fri, 22 Jun 2007 06:56:07 -0000

Henri,

"If somebody surpasses Bill Gates in wealth, would Gates still be the wealthiest person? You seem to suggest that two people can simultaneously be the wealthiest."

I've suggested no such thing. What I suggest is that the person surpassing Bill Gates in wealth is not confiscating any of Bill Gates' wealth to do so. That person would have to create more wealth than Bill Gates to surpass him. Creating more wealth than someone else is not a zero-sum game.

I'm still waiting for you to explain how aggregate wealth can grow when we're playing a zero-sum gain.

"I was trying to suggest is that the people responding to your scenarios may simply read them differently."

That's true. They often do and they ask me questions about the circumstances. I'm as interested in the questions that they ask as I am in the answer that they give. I want to see their thought process.

"To be honest with you, if I was the interviewee, I'm not sure how I would respond."

Well, refusing to answer an interview question you don't like is pretty much going to mean that you don't have a chance in hell of getting the job. Since every firm on Wall Street plus management consulting companies ask these kinds of questions for analytical positions, you're toast. I won't hire a trader or an analyst who can't deal with questions unless they are presented in his preferred way. The real world is not that accomodating.

Re: A New Deal for Globalization?

Bill — Fri, 22 Jun 2007 07:40:06 -0000

Mesa,

I have to agree with LC Joe. I understand why you would think that any single trade is zero-sum but that's not a great way to think about it. You're just thinking about it too narrowly.

For a simple example: If I think I might have edge in a long position in security A, I might hedge my beta exposure by shorting security B. I'm happy to lose money on my short position because I'm just trying to reduce the volatility while capturing alpha in my long position. The ability to hedge against beta moves also means that I can take a larger position in security A. So even though I might lose on my short because the market moves up, I win on the trade because I realize my theoretical edge - and in larger quantity because I was able to hedge the vol. The person long security B gained exactly the amount I lost, that's zero sum. But because the short in security B was only one leg of my two leg trade, I didn't lose. I got more alpha with reduced volatility and he won on his his beta bet. It's a win win.

Here's a more abstract way to think about it: If you don't hedge but take lots of smaller positions (long or short) in securities in which you have theoretical edge, you will win more than the calculated edge on some and lose on others. But, if you only trade when you have theoritical edge, you will make that theoretical edge in the long run - over thousands of trades. However, if you refuse to take the chance of getting unlucky on some trades, you will never be in the position to realize that theoretical edge in the first place. In essence, all of your trades are part of a larger trade - the alpha capture. Stat arb in a nutshell. We used to say "if you never lose money, you're not doing enough trades" (i.e. "you're leaving money on the table").

Re: A New Deal for Globalization?

Bill — Fri, 22 Jun 2007 12:16:29 -0000

"people interpret the outcomes in binary winner/loser scenarios."

Tell me about it! That's how we end up with yahoos in Washington screeching about "income distribution."

My husband is an options trader. When friends in completely unrelated professions would ask him to explain his work, he would dumb it down for them. Invariably they would exclaim "OH! I get it! So you're an insurance salesman???!!" That's when I learned about the dark side of dumbing things down! LOL.

Re: Anti-Antitrust

Bill — Tue, 26 Jun 2007 20:17:45 -0000

Dirty Mac --

True. I'm not particularly concerned that Whole Foods will succeed -- the idea that the grocery market is somehow uncompetitive seems ludicrous. There just aren't any real barriers to entry which would allow that strategy to work and a lot of existing competitors.

Nevertheless, I don't have much sympathy for Whole Foods -- they brought it on themselves. Anytime you go around saying "We want to do this because it will give us a monopoly," the FTC, at minimum, has to check it out.

Re: Anti-Antitrust

Bill — Wed, 27 Jun 2007 17:38:17 -0000

python --

I agree with your statements. Please recognize that I don't think the Feds are right on the merger -- I was just pointing out why the FCC regulates this.

Raja r --

I agree that there are alternatives to Windows--it's not a perfect monopoly--and that Windows has been a net benefit for consumers. But, MS does have something like 93% of the desktop OS market, which is close enough to exert monopoly power, if there are barriers to entry. I suggest that network effects are that barrier. (If you want that discussion, let me know...)

The issue was that MS was using that monopoly in operating systems (which they acquired legally) to try to take over a different market -- the market for web browsers. And, that's a detriment to consumers.

The "rock-bottom" prices argument is a red herring, because you're comparing them to the prices of mainframe OSs, not to what they would have been in a competitive market.

(The Dr. Dos debacle is another example of consumer harm.)

Re: An Anecdote on Health Care

Bill — Thu, 28 Jun 2007 05:23:53 -0000

I have plenty of bad anecdotes from my own experience as a patient in socialized medicine. Anecdotes prove nothing. But when you look at the statistics, the picture gets only more grim. Survival rates for cancer patients are lower than in the US, people die on wait lists, hospital conditions are disgusting, bureaucrats decide what medical care won't even be made available (at any price) and what will.

Just this morning, the Wall Street Journal ran this OpEd about Socialized medicine this morning.

Waiting lists for non-elective, life-saving care are the norm. As the article and the Supreme Court of Canada say, "access to wait lists is not access to care." Whatever people's complaints about the the private insurance system, they at least have the option to opt out. You lose that option in socialized medicine and you STILL have to purchase private insurance or be rich enough to pay out of pocket to actually get care.

Personally, I don't think socialized medicine has anything to do with providing access for the 20 million or so citizens (plenty of whom have simply opted out). It has a lot more to do with centralizing and growing the power of government. As with public schools, politicians will force those too poor to buy private insurance to die on wait lists but they will not be sending their kids for care in universal healthcare facilities.

This is a website which has links to articles about socialized medicine from countries which have socialized medicine. See what they really think of it.

Re: An Anecdote on Health Care

Bill — Thu, 28 Jun 2007 12:26:27 -0000

"I say I want democracy and you tell me I'm asking for communism."

Well, the problem is that what you call democracy is actually closer to how Karl Marx described communism.

In Karl Marx's communism, the collective was supposed to CHOOSE its own leaders who were to properly plan the economy and construct a "defnite social plan" (Marx, "Capital", Vol.I, p.52)

Marx and Engels proposed collective control of the means of production and distribution of the output of production via a central body, chosen by the collective.

But it's not necessary to take direct control of the means of production. Government is the agent of "society". It’s not necessary to take physical possession of the means of production. Regulation of industry works just as well as a way to control the means of production. Regulations decide who does business in what industry and under what circumstances - the difference between indirect control and control is minimal. What you propose is using our democracy to seize the output of our production via taxes and to spend it according to a plan which decides who gets what (e.g. housing, food, healthcare, etc.). In other words, as you put it, "a properly planned economy" where everyone gets what they need and the people who make more money pay more. Marx put it this way: "from each according to his ability to each according to his need".

You want to use our democracy to give central planners in government the ability to arbitrarily decide the "to each" and "from each" part of the "from each according to his ability to each according to his need." and then force people to comply with the plan.

That's pretty much Marxian communism/socialism.

Re: An Anecdote on Health Care

Bill — Thu, 28 Jun 2007 12:33:06 -0000

"Make no mistake I want democracy. But please what do you want? I'm really curious."

I want a democracy where liberty is protected by taking away government's ability to coerce people into following its central plan.

I want the right to refuse to pay for a program I don't believe in. If the majority wants it, it should be well funded because the majority should also want to pay for it. If the majority votes to erect a program and at the same time, votes to have a minority pay for it, that's theft.

You want tyranny of the majority. But our founding fathers obviously saw you coming from a mile away because they devised he electoral college to defend against that very outcome.

Re: An Anecdote on Health Care

Bill — Thu, 28 Jun 2007 13:19:44 -0000

"There really is no significant difference in health care outcomes between us and the other 30 developed nations who have national health care plans with regards to outcomes anecdotal horror stories not withstanding."

Quite a claim there, Comrade Muirgeo. Yet not a shred of data to back that up. Here you start the day parading around your statistics and suddenly we're just supposed to accept your sweeping statements as facts.

Well documented wait lists and the higher death rates associated with specific diseases and illnesses are not anecdotes. I don't know if they taught you that in med school.

“The main difference is that in those other countries employers often our relieved of providing coverage and thus have an advantage over US employers.”

Well that’s where your ignorance of economics leads to an erroneous conclusion. The main difference is poorer access than our poor and uninsured have to healthcare, higher hospital infection rates, and higher death rates from diseases. But just out of curiosity – if their system is so much better, why are they all moving toward a private model?

“Likewise they spend about 8% of their GDP on health care while we spend 15% and rising.”

Good. Price caps reduce expenditure and they’re great if you’ve got breast cancer and don’t mind the 12 month wait for chemo. Just out of curiosity, does that number include the private insurance nearly half the British purchase to get access to what we consider “standard care”? Also, how do we adjust that number to include the fact that 45% of dialysis centers in Britain refuse to provide dialysis to people over aged 65+? It’s rationed, you see, to keep the costs down and they choose to save it for the younger folk.

“Most of the difference goes to CEO's and administrators who are experts at figuring out how to deny care and add nothing to the quality of US health care”

Prove it.

“For the life of me I can't figure out what form of government you people want.”

The kind that doesn’t impose price and wage controls that cost lives.

“Democracy works best if everyone is well educated and has equal oppurtunity under the law.”

What the hell does “equal opportunity” under the law mean? It’s ironic that you should mention education when you are clearly poorly informed about your own profession.

“You all want social Darwinism…”

What is being forced to deny dialysis to the elderly to keep the young alive? What is being forced to choose which patient’s life you save and which you can’t because of a lack of supplies, staff and facilities?

It seems that you’re the one calling for social Darwinism, not me.

There are plenty of free market solutions to bring down both the cost of insurance and care for the people who want it more cheaply. But a the existence of a free market solution didn’t even occur to you – you went straight for socialism or the hybrid crap we’re in now.

Here’s the sad reality for you, comrade doctor….

With price controls come wage controls. Educating yourself to become a doctor was expensive, I’m sure. Plus, it’s tiring and emotional work. When the wage controls come, you’ll have to decide to accept lower pay to bring home to your own kids or to opt out of the national healthcare system, accept only private payments and have more money to care for your own family at the cost of one less doctor to treat the people who are too poor to pay you out of pocket. I wonder What will your egalitarian instincts lead to choose.

Re: Anti-Antitrust

Bill — Thu, 28 Jun 2007 20:51:38 -0000

Raja --

We're getting far off the original anti-trust point, so this will be my last post.

As a consumer, you do not have a God-given right to purchase whatever your mind wishes for.

You asked what the harm was. In general, a competitive market will give consumers what they want. Dell, and others, were willing to provide that. The harm was that Microsoft used its monopoly power to stop that. (If there had been a competitive market in OSs, Dell would have been able to say "Fine. We'll go with XXX instead of you.")

So what you are saying is that using Windows makes your life easier and hence you are using it. I was under the impression that MS somehow forced you at gun point to use their wares.

No. I only pointed that out to show where Microsoft's monopoly power comes from. Sure, nobody's forcing me. But, so what? Nobody's forcing me to buy electricity; does that mean that the electric company should be able to force me to only buy their appliances? If I live in a subdivision with private roads, should the homeowners' association be able to dictate what car I drive? After all, nobody's forcing me to buy electricity or drive.

Re: Where Externalities Lie

Bill — Tue, 03 Jul 2007 14:51:57 -0000

Well, of course, JP. Didn't Brad DeLong tell us that economics gave him a "tool box" (wonder if that's like Gore's "lock box") with which he could foretell externalities and slay them before they reared their ugly little heads? Surely in the right (left) economist's hands, the economy will be so smoothly planned that there will be no externalities or market failures!

Re: Unclean Politics Means Unclean Energy

Bill — Fri, 06 Jul 2007 04:12:35 -0000

skh,

The United States hit peak oil production in 1972 (see: Hubbert's Peak). Since then, oil production has been declining. However, you're right that we're not ever going to run out of oil. You can go to your back yard, dig up some dirt and extract hydrocarbons from it.

We run out of oil at a given price, and even then the cost of finding and lifting it can be reduced by advances in technology which can make previously uneconomic oil economic at the same price. You don't even need to consider abiotic oil to consider that we have as many hydrocarbons in the ground as there is ground. Tar sands are economic at current prices but weren't even close at $20/bbl. There's more oil in the shale of the Rocky Mountains than there is in Saudi Arabia - but it costs $40/bbl to lift (10 years ago - it may cost less now), so it wasn't economic until recently.

Most of the "research" and scare books I've seen are written by people who may be scientists but have no knowledge of oil economics. In fact, they seem to be completely ignorant of the basic facts of the industry. They assert that because we have a limited amount in reserves now and we are not finding it as fast that we must be running out. They completely ignore price and technology!

Re: Unclean Politics Means Unclean Energy

Bill — Fri, 06 Jul 2007 07:50:18 -0000

Thank you, Albatross. That's an amazing! I think you also described very well the reason that most American petroleum companies are looking abroad for E&P opportunities.

Re: What the founders understood

Bill — Tue, 10 Jul 2007 10:08:33 -0000

"Muirgeo will be in Italy for a while."

hopefully, sampling some of that fine socialist health care that the WHO so proudly ranks as #2 in the world. I only hope he/she/it managed to get on the list before he/she/it left for Italy, otherwise the visa will expire before Muirgeo gets to see the doctor.

Re: What the founders understood

Bill — Tue, 10 Jul 2007 20:11:47 -0000

Raja_r:

I think computers are a special case -- the computer industry has been able to handle deflation because computers go rapidly obsolete. This is not true of most products.

Consider an example: It will cost $500 to fix my car this year; if I do so, I will get another one year out of my car. Or, I can buy a new car. Under inflation, if the price of cars increases by $1000 per year, I will buy this year, because waiting will cost me $1500. Under deflation, though, if the price of cars decreases by $1000 per year, I will wait to buy the car, since waiting pays me $500 -- the money I spend in repairs is more than made up for in the lower purchase price.

Re: Up Is Down

Bill — Sat, 04 Aug 2007 19:02:40 -0000

Krugman is a hack. Somebody needs to hand him some anti-depressants and a clue.

The cause of the recent market tumble is the expansion of credit spreads (a phenomenon not seen for over a decade) and a new reluctance to extend generous leverage terms by brokers. Recently, stock prices have benefited from the private equity boom. As credit tightens, fewer deals will be done, decreasing demand for stocks. One observation I made over the past few weeks is that companies identified as potential buy-outs tank on days when credit spreads expand and rise on days when the credit spreads tighten or, at least, don't expand further. Brokerage firms have demanded more margin than before, forcing funds to sell assets to meet margin calls. This has a snowball effect as selling puts further downward pressure on stock prices, triggering more margin calls. The self-perpetuating cycle stops when brokerage clients have been delevered enough.

Some have been calling this a "repricing of risk". That's probably true. As the world has become wealthier, the demand for investment vehicles has increased as well. In search of yield, investors have driven up prices of debt instruments such as high yield debt so much that a friend lamented (two weeks before spreads exploded) that junk bonds were being floated with yields similar to "A" rated debt.

What finally caused the reversal in the stock market? I'm not certain. However, CDOS and CLOs, for which no liquid market exists, were being marked to model because the lack of a liquid market made risk assessment difficult. The model assumed a certain risk and the hope was that this shot in the dark hit the target. Everything was fine as long as the world didn't change much. When mortgage defaults began to increase as floating rate mortgages began to reset, the world changed. Suddenly, nobody was willing to take the same risk for the historically paltry payoff, credit spreads exploded and heretofore uncalculated risk suddenly came under intense scrutiny.

Another thing to keep in mind - if the firm has both liquid assets (like stocks) and illiquid assets (like CDOs), the firm will sell the liquid assets to meet the margin calls. That's but one way the credit market - not global economic growth - drives down the stock market.

Next thing Krugman will be telling us is that economic growth leads to inflation and that productivity gains lead to unemployment. He needs to be checked for dementia.

Re: Up Is Down

Bill — Tue, 07 Aug 2007 04:25:02 -0000

Ok fine, you can judge the relative "value" of stocks using PE if you wish, although doing so across industries and different periods of time is mostly meaningless.

Nor is P/E particularly useful for companies with negative earnings. And are we talking about "scrubbed" P/E or the crap that most companies put out which is rife with non-economic accounting nonsense? Even scrubbed, P/E is a poor measure of anything unless it's a stable, mature, cash cow company. But even then, as Snguyan said, it can't be compared across industries and time. Not very useful.

Re: The virtues of scalping

Bill — Sat, 11 Aug 2007 05:31:38 -0000

Sam --

Maybe if I had used the word "Rabid fan," it would have been better.

Going back to my Dave Matthews example, it may be that Dave is trying to attract a younger crowd (the "Rabid fans") who could not afford to see the show at the market price, which is heavily influenced by the ability of older, more affluent, fans to buy tickets. Heck, some of those more affluent people might not even be fans -- maybe it's a company buying tickets to use as an incentive or give-away to clients.

The problem here is the bizarre model where some customers are more valuable to the producer than others, even if the more valuable customers can't pay as much as the others.

Now, the bigger question is whether its a good idea to pass laws that allow some types of producers to enforce those preferences.

Re: The virtues of scalping

Bill — Sat, 11 Aug 2007 18:48:20 -0000

Sam --

I think it's more than just a personal wealth thing. Ten million poor teenagers can probably support a musician better than one million adults. But, if your concerts are prices out of the reach of teenagers, they're much less likely to buy your music.

In general, though, I agree with you -- I don't really want my government saying what I can do with a concert ticket.

Re: The virtues of scalping

Bill — Sun, 12 Aug 2007 14:48:30 -0000

Sam --

Excellent. Thank you -- you have succinctly stated why anti-scalping laws are unnecessary, at least for musical performances. For things such as, say, the all-star game, that approach is probably not going to work well. Of course, my hypothetical model breaks down there as well....

Re: My Brand of Economics

Bill — Tue, 14 Aug 2007 19:27:45 -0000

CRC --

Hindsight is always 20/20, so perhaps it's a bit unfair for me to criticize Mattel for what it did not do. However, a normal part of project planning is risk management -- the process of getting all the stakeholders into a room looking at a situation, deciding what could go wrong, and then deciding what to do, if anything, to either reduce the risk or mitigate the damage. (And then meeting periodically thereafter to re-evaluate.)

At some point, Mattel decided to out-source to this Chinese company. I find it hard to believe that the quality-control person in the room didn't ask "how are we going to do quality control?" In fact, I suspect that the question was asked, and Mattel chose a mitigation strategy (recalls) instead of a risk-reduction strategy (stronger oversight of the Chinese manufacturer).

If I am correct, then that tells us something about what Mattel viewed as the various costs -- a recall strategy, even though it damaged the brand, was preferable to a monitoring strategy, which didn't. And, that choice indicates a low value placed on the Mattel (and Thomas-the-Tank-Engine) brand.

Re: Hot Heads

Bill — Sun, 19 Aug 2007 20:35:41 -0000

Per --

If I understand your question as limited to greenhouse gases, ignoring possible other problems (whether or not environmental), I am typing this with my left hand, as my right is in the air.

All --

Re: Gore. I am reminded of Hillary Clinton's claim that she was named after Sir Edmund Hillary, despite the fact that she was born 6 years before Sir Edmund climbed Mt. Everest. Holding politicians accountable for what they say is like holding birds responsible for pooping on statutes. You'd like them to stop, but it'll never happen.

Re: A Grab Bag with Munger

Bill — Thu, 27 Sep 2007 18:46:55 -0000

Ditto to Carl.

If you're going to do another grab bag, I would love to know the economics behind Ronald McDonald houses collecting pop-can tops. I thought it was an urban legend, but it's true.

Re: Conflicting Survey Results

Bill — Sun, 30 Sep 2007 16:01:53 -0000

muirgeo --

I care far more about how much better off I'm doing when compared to my Dad than how much better my CEO is when compared to his. There are so few large company CEOs in the world that it just doesn't make much sense to worry about it. Unless, that is, you happen to hold stock in a company with an over-paid CEO.

Now, I don't subscribe to the theory that they are all paid appropriately -- Boards of Directors are often composed of other CEOs, and you effectively end up with an old-boy network. But, that's something for the stockholders to worry about, not the employees, who are almost certainly being paid market rate.

Re: Reality Is Not Optional

Bill — Tue, 09 Oct 2007 06:11:37 -0000

muirgeo --

You may be right that most people are satisfied in universal health care plans in those countries that have them. But, that's actually a weakness of such plans -- as long as most people are satisfied, the plans will continue and the administrators of the plans will continue to be employed.

I suggest that the opinions of a subset of those people is really more important. I'm talking about the people who have serious life-threatening conditions. How do they feel about the national systems? If you need Orthopedic Surgery in Canada, you'll wait, on average, 41 weeks. A wait for Coronary Bypass is, on average, 12 weeks. In the U.K., the average wait for surgery (across all varieties) is over a year. This subgroup is not happy.

Entrepreneurs in Detroit, Buffalo and other US cities on the Canadian border have set up MRI, CT and Ultrasound clinics for Canadians whose own national healthcare system prevents them from getting those services in a timely manner. They have a lot of business because Canada's health care system is failing those who need it the most.

In fact, if you look around in Canada, you'll find that the system is slowly losing public support.

I recognize that anecdotes are far from proof, but here's an example of what I'm talking about: http://www.liberty-page.com/issues/healthcare/c...>

Re: Frank Talk

Bill — Mon, 15 Oct 2007 10:14:22 -0000

I remember that tax, Sam.

It was proposed in part by a senator from Maine whose name escapes me now in 1991. It wasn't just on yachts. It was a general luxury tax on everything that only The Rich consume - like furs, yachts and assorted other luxury goods.

Proponents of the bill were salivating. This is AWESOME! We can raise taxes on The Evil Rich and it'll only be paid by them. It won't be paid by The Middle Class or The Poor. How clever, how clever!

A year later that same senator, now looking haggard and worn out, pleaded on the senate floor to repeal the tax. Seems that shipbuilding is (or was then) a very large part of the Main economy and the demand for yachts is pretty elastic. The tax destroyed the ship building industry in Maine. And whaddaya know, it's not The Evil Rich who rely on building yachts to eat, it's The Poor and The Middle Class. The Evil Rich simply made do with their old yachts and the former yacht builders made do with food stamps.

The tax was repealed.

Last I heard, the Maine shipbuilding industry never recovered.

No market failure could possibly hold a candle to government failure.

Re: The Backlash

Bill — Wed, 17 Oct 2007 05:11:17 -0000

Clearly, this guy is worse than a Holocaust denier.

*dripping sarcasm*

Anyone not completely submitting themselves wholly to the religion of Climate Change Hysteria will be burned alive as a heretic by the high priest, the Al Goracle.

Re: The Backlash

Bill — Wed, 17 Oct 2007 14:37:43 -0000

Oh, only the "Peace" prize, Dr. Troy. They hand those things out like candy to any Tom Dick or Harry would-be dictator.

Re: The Dirtiest of Dirty Jobs

Bill — Wed, 24 Oct 2007 05:01:27 -0000

Don,

A masterpiece.

Re: A Dearth of Taxes?

Bill — Wed, 24 Oct 2007 05:08:33 -0000

Marc Hodak,

It's not just economic illiteracy. It's a miracle that the products of the American public school system are literate at all. The only fluency students achieve in public schools is socialist drivel. Socialist concepts were pounded into us on a daily basis - often at the expense of real subjects. Most of the public school system's products turn out like Muirgeo.

Re: Progress

Bill — Fri, 26 Oct 2007 06:43:01 -0000

Inner city blacks have a 50% high school graduation rate, a 70% illegitimacy rate, arising suicide rate, quadruple the average teen pregnancy rate, 5 times the average rate for drug abuse, 100 times the rate for being murdered and 20 times the odds of being incarcerated....but yeah buddy they have AC!!!!!!

So, the bad behaviours of these people lead to failure and they don't actually earn a/c's but they get them anyway thanks to productive members of society who engage in behaviours that lead to success. What are you bitching about?

Oh, I forgot...you don't know what you're bitching about because thinking is not your strong point.

So, I don't actually expect you to understand this about the cycle of poverty: The welfare programs themselves trap people in poverty. In part this is due to the fact that government corrals welfare dependents into public housing where bad behaviours are concentrated. The government proceeds to treat welfare recipients like dependent children with payments in kind. Because of this, the poor are unable to make basic decisions for themselves and are often overcome by a sense of helplessness. If we adopted a negative tax system, huge portions of government can just be eradicated and the poor would just get cash to spend instead of being led around by the nose by the half-wits who work in government. The standard response to such an idea is that the poor might somehow misspend the money (and government never does). The implication is that these snobby twats think they are far more competent at deciding for poor people than they are and they would like control over their lives. Actually helping the poor get out of poverty is simply not on the agenda.

The people who have the most disdain for the poor are those in government who rely on promises to pick the pockets of the successful on behalf of those whom they define as unable to live without their beneficence to win elections. Poverty is a government created industry.

disdain for the so-called welfare mom's

Nice to see that a self-proclaimed "pediatrician" cant differentiate between possessive and plural. Nor do you seem to know the difference between "weather" and "whether". How does someone who is barely literate pass the MCAT? Admit it, you're a hospital orderly.

Re: Progress

Bill — Tue, 30 Oct 2007 12:22:18 -0000

I'm not sure I agree totally. Modern liberals I've talked with seem to genuinely believe they are helping poor people. John Dewey

John, I mostly agree with you. However, once pressed, these same people admit that most government programs don't actually work and - worse - make life harder for the poor. Despite this realization, they continue to support the very same program (usually, only as long as someone else pays for them) and are completely against ideas like a negative income tax. When pressed, they always go to the "poor will misspend" excuse. In the end, one realizes that it's really about enslaving those whom they consider inferior to themselves. As far as I can tell (and I spent a long time in "liberal" college towns), they find practically everyone inferior to themselves. You would think that someone who truly wants to make things better for others would just try to do what works. But no.

Re: Progress

Bill — Wed, 31 Oct 2007 13:36:47 -0000

Yes, John, I think we're talking about two different kinds of liberal. The liberals I'm talking about have multiple degrees and cling to their beliefs like religious zealots. The liberals you're talking about are a much easier lot to talk to and have far less invested in a particular ideology. They will actually change their minds when you point out to them that these government programs are counterproductive.

Re: Cut those costs!

Bill — Tue, 06 Nov 2007 07:42:18 -0000

If today’s bleeding-heart advocates do not swallow this pill, then they are effectively deluding themselves into believing that incentives do not matter. - LCJ

Joe, yesterday's bleeding hearts deluded themselves in this way, why would you expect anything different from today's? This makes them unreasonable. Unfortunately, one of the mistakes reasonable people make is believing they can reason with the unreasonable.

Re: Cut those costs!

Bill — Tue, 06 Nov 2007 11:53:29 -0000

We live in a democracy (yeah yeah, representative republic...same thing)

yeah, yeah...no, it's not.

Re: Sowell on 'giving back'

Bill — Tue, 06 Nov 2007 18:25:11 -0000

Gil, you reminded me of Bob Geldof's BandAid in 1984. The food got to Ethiopia and then rotted on the docks or was stolen by the dictator to feed his army. In other words, it was a giant waste. But I'm sure Bob feels like he really "gave something back". I'm sure he thinks he really did something.

Re: Sowell on 'giving back'

Bill — Wed, 07 Nov 2007 06:11:53 -0000

exploiter-exploited zero-sum relationship

Thank you, Karl Marx. No matter how discredited that theory is, it's still embraced warmly by the left.

Re: His fault

Bill — Fri, 09 Nov 2007 06:40:25 -0000

Slocum,

The pool of money is for the purpose of wealth transfer. You don't expect poor shmoes who make only $87K per year with boat loads of debt to finance their BMW's, 4,500 sqaure foot homes and breast implants to pay for their own healthcare, do you? No. those people are clearly exploited by the Evil Rich and, thus, the Evil Rich have to pay. Makes perfect sense.

Re: His fault

Bill — Fri, 09 Nov 2007 07:39:59 -0000

Clinton governed well only because the Republican congress prevented him from exercising his socialist agenda. Remember the first two years of his presidency?

Re: His fault

Bill — Fri, 09 Nov 2007 11:25:40 -0000

yes, please. Let's hear all about peak oil and - yet again - an extended, incoherent diatribe about things you don't understand but which will be liberally peppered with how Bush and Reagan are satin. That will be completely relevant to the topic at hand and not a waste of space at all.

Re: His fault

Bill — Fri, 09 Nov 2007 12:37:00 -0000

No, you quack, explaining anything to you has proven to be an enormous waste of time.

Instead, why don't you tell us which part of the post-FDR economy was your favourite. Was it the gas lines? Stagflation? High unemployment rates?

On second thought, don't bother. I've got to get back to Money Ruling and I'm sure nobody else cares.

Re: His fault

Bill — Fri, 09 Nov 2007 20:35:17 -0000

Hi, Mesa. How's the Money Ruling going? Have you been enjoying the week-long Asset Fire Sale? Exhausting. So, I'm listening to "comfortably numb" (Pink Floyd is a favourite in our house).

Of course, despite my best efforts, I can only dream of Hillary Ethics Clinton's futures trading returns and bottomless credit. Margin calls are for the little people, not Madame. Same for ethics and truth.

But I'm sure we can totally trust her....

Re: His fault

Bill — Sat, 10 Nov 2007 09:39:05 -0000

Mesa (totally OT),

Always delta neutral. Spread risk I just have to deal with.

Niederhoffer's new funds just blew up. The flagship, Matador, was gored by the bull I guess (pardon, couldn't help myself).

There's a very long and detailed article about him in a recent New Yorker magazine. Last I checked, it's still on their website. Very interesting. Such a brilliant man. Such a horrible trader. WHY???

Re: His fault

Bill — Sat, 10 Nov 2007 09:51:48 -0000

Oh yeah. Nothin' but blue skies ahead back in 1970.

What? You didn't enjoy staring at the sky waiting in line for gas? We need to bring those back. I know! Let's start with an anti-gouging law.

Re: Friedman on "Greed," Markets, and Politics

Bill — Mon, 12 Nov 2007 07:42:24 -0000

Furthermore, the worst of the GD is certainly better than the worst that alternative economic systems deliver.

As and escapee of an alternative economic system (soviet communism), I would argue that the worst of the GD is the best that this alternative economic system had to offer. Poverty is bad. But knowing that there is no alternative to it, there never will be and constantly worrying about yourself and your family being randomly picked up and either shot or sent to a gulag is, IMO, worse than the worst of the Great Depression.

To the person who wrote that communism "takes care of the people" in return for taking their liberty, he's correct. Communism "takes care" of people much the same way exterminators "take care" of a pest problem.

Re: David Henderson on Robert Frank

Bill — Fri, 23 Nov 2007 05:38:05 -0000

They are fighting, he argues, over a fixed pie and,

The only way the pie is fixed is if no new companies are created. Keep increasing taxes and the distortion to the risk/reward they create, and that'll become a reality. Then, we'll all be poor together. Oh joy.

Re: David Henderson on Robert Frank

Bill — Fri, 23 Nov 2007 05:46:50 -0000

This reminds me of a absolute vs. relative income interview question I ask all the time.

Which scenario would you prefer? You make $500K and the guy next to you makes $1 Million. You make $150K and the guy next to you makes $100K. The world is the same in both scenarios (no difference in price levels, inflation, etc.)

The number of people who choose the second scenario is disappointing. But it sure narrows my field of candidates.

Re: Economic Mobility is Real

Bill — Wed, 28 Nov 2007 14:13:57 -0000

How hard is that to see when you see the raping of people from their homes funneling money upwards to Hedge fund managers who pay 15% tax on their incomes while middle class working PRODUCTIVE people pay 30% or more and the AMT to boot.

Is it just me or is this one of those ditties one comes up with when one doesn't actually know what one is talking about but has heard certain vocabulary words slithering out of politicians like Barney Frank? It doesn't even begin to make sense.

Most hedge funds don't have long term capital gains and if they have them, they are not a significant. I fail to see how losing one's property by making the stupid decision to buy more home than one can afford with a zero down-payment and an adjustable rate is equivalent to rape. these people were renters before, they lost nothing, they are renters again. The lender, however, is screwed. Anyone who has actually done the math (i.e., compared NPV's) knows that there is no financial advantage in owning a house vs. renting it.

How all this raping is somehow funnels gobs of money to hedge funds (which lost by buying the loans of these losers) is a mystery to anyone with the ability to think logically. Of course, we could use the force of government, as Muirduck would undoubtedly prefer, to make these hedgies disappear in favour of more "productive" workers. Of course, hedge funds are just pools of money for investment purposes and provide significant liquidity in the market. Without liquidity, the risk premium would be much higher and fewer deals will be done which means less work for "productive" people.

Which brings to mind two other issues. It's because there was so many hedge funds (and other investors) looking to deploy capital that risk premiums were squashed and a lot more people could suddenly afford houses. In early July, a high yield fund manager was telling me that high yield paper was coming to market pricing about the same as AAA paper.

The other thing is Muirnonsense's claim that productive people pay more than 30% in taxes. At the same time he/she/it continually screeches about the growing income inequality and how useless and userious and small the top 20% (the group that actually pays the 30+% rate) is. Now, it seems that either everybody is rich enough to pay 30% in taxes or the only productive members of society are in the top 20% of earners. I'd ask which it is, but past experience has taught me that the answer from this particular poster will be even more incoherent, for this is the way of the left.

Rust_belt,

What you say about tax avoidance may be true for some in the top income bracket (mostly those who own businesses), but I assure you that you're absolutely wrong about everyone in that bracket.

Re: Economic Mobility is Real

Bill — Wed, 28 Nov 2007 14:15:15 -0000

A lends B money.

B turns out to be a worse credit risk than though and doesn't pay money back.

A loses $Billions.

Moral of the story (obviously):

B is a helpless victim of A's excessive greed.

Yes, diz, this is clearly the left's new definition of "predator".

Re: Economic Mobility is Real

Bill — Wed, 28 Nov 2007 18:29:45 -0000

Loaned to financial institutions where investors and depositors who are paying their mortgages risk losing their savings. Those institutions are not protected from defaults, as I understand it; they are simply more liquid as a result, and will still lose billions, even though they will pay back the infusion that has occurred at the lower rate.

Those institutions are kind of protected from default - if they're large enough. The institutions lent far too much money to far too many people with poor credit, at risk premiums that were also far too low and asked no questions and required no down payment. There was just no risk control - not at the banks nor at the hedge funds that loaded up on crappy Z-tranche CDO paper and then levered it 10 to 1. The Fed has made it clear that it is willing to bail out the lenders (read: degenerate gamblers) regardless of inflation, a falling dollar and moral hazard. Just this morning, a Fed governor said that he's not going to let fears of moral hazard stand in the way of growth. Today, while equities partied like speedballing hippies in response to the higher expectations of a bigger Fed rate cut, Eurodollar futures implied higher future interest rates.

The homeowners, on the other hand, will just go back to renting. No down payment means that they didn't lose anything except points off their credit - point deductions they've well earned.

The only people who are really getting screwed, as you point out, are those who are responsible savers. Ultimately, it is they who will pay the piper.

not that this has anything to do with the original topic, but switching topics is a favourite debating strategy of Muirgeo and his/her/its ilk.

Re: Economic Mobility is Real

Bill — Thu, 29 Nov 2007 04:11:30 -0000

By the way, why are the financial institutions continuing to report multi billion dollar losses on the write down of CDO's if the Fed actions represented a bailout? - Bruce

I know that question wasn't meant for me but if the Fed had not bailed these lenders and borrowers out, their situation would be worse. Some large institutions may go into bankruptcy and more people who had no business buying a 6,000 square foot home will default on their mortgages. The Fed has been squashing interest rates until recently. The market has been squashing the risk premium. Now, instead of allowing the market to correct itself and allowing some of the biggest risk takers in the market to pay the price of taking such giant risks (and learn a lesson), the Fed has exhibited a willingness to do whatever it takes to bail them out of bankruptcy - consequences be damned. The lenders will still have losses but those losses won't be equal to the risks that they took.

Re: Pigs Still Don't Fly

Bill — Thu, 06 Dec 2007 07:59:40 -0000

Have price controls ever had the intended effect?

The implications of this plan reach far beyond moral hazard. If prices are artificially lowered for product, we get less of that product.

In this case, the product is money. The price of money is the interest rate. I think that we'll have fewer lenders willing to lend. The price of other loans will go up. higher loan prices raise the cost of capital, so fewer projects will be undertaken. Fewer projects means less economic growth. Conclusion: we all pay.

This whole thing reminds me of the scheme WorldCom came up with to weather the downturn in its business cycle. I think we all know how well that worked and I can't imagine that this scheme will work better.

Re: Incentives vs. preaching

Bill — Thu, 06 Dec 2007 09:15:39 -0000

Because they aren't finished building yet, Albatross! What you don't see in the poster is the "instant aging" to which the lower cells are already subject.

My bet is they'll never finish the hive anyway. The soviets paid bonuses based on the number of square feet under construction. There was no incentive to finish construction and when there was, you wouldn't want to move into that construction. Central planning at its best.

Re: Pigs Still Don't Fly

Bill — Sun, 09 Dec 2007 08:14:25 -0000

Great analysis, True_Liberal. I would only add that homeowners were at least as ecstatic and at least as eager to buy as the home builders were to sell. Here's one story of a subprime borrower - a not uncommon one: an ARM with a $1,000 downpayment on a $1.2MM home with monthly payments below $2K/mo. The home appreciated to an appraised value of $1.5M. The home owner took out a $300K home equity loan. Now, the interest rate has gone up, the borrower can't pay either loan.

There is a misguided belief that owning a home is somehow a financial benefit. Under traditional mortgage standards, it's not. If you do the math properly, the NPV of owning a home and renting one is exactly the same. The two things that skew the math is the valuation of the option to move quickly which renters are long and owners are short and the ability to make changes to the property and assorted fuzzy things that go along with owning something. However, even among some (less intelligent) finance folk, there is a belief that renters are "throwing money away" on rent as though having a place to live has no value.

Of course, the zero-downpayment and teaser rate ARMS changed that. The borrower essentially gets paid to own a call option on the housing market (via mortgage payments at teaser rates which reduce monthly payments to below monthly rental rates). As long as property values continue to rise, the borrower continues to make payments. If they decline, the borrower walks away from the mortgage, losing nothing except a few points from his FICO score. Why are we using government might subsidize this free roll?

The sooner the housing prices are permitted to collapse due to demand shrinkage and the degenerate gamblers among lenders allowed to fail, the sooner the market will clear and we can close the casino.

The hope of the government central planners is that housing prices are going to rise while the ARMS are fixed at stupendously low levels for five years. The thing I'm trying to work out is this: Even assuming that the teaser rates will be frozen and that the borrower can afford the teaser in the first place (lots can't), what is the catalyst to make the price of houses rise? There are already and will continue to be much stricter lending standards. Stricter lending standards, all else held constant, reduces the demand for homes. So, it seems that either the central planners (including Bernanke) think that we can inflate our way out of a housing recession by continually lowering the discount rate (reducing lenders' opportunity cost) and keeping the prices of current mortgages frozen or that a chronic problem with long lasting side effects in the housing market is better than an acute one.

For its part the Fed has been rather too generous to lenders. Usually, if a bank comes to the Fed's discount windows, it has to open its books to the Fed. No longer. The Fed has started handing out unlimited amounts of cash to any beggar, lest he should go bankrupt. But what would happen if some banks fail? Stronger, more financially sound banks would pick up their assets at deep discounts, the market would clear, reckless stupidity would be punished, prudence would be rewarded and we can move forward. Why prevent this outcome?

Re: Storms are more like Super Bowl Sunday and less like Valentine's Day

Bill — Wed, 12 Dec 2007 03:35:27 -0000

...or maybe they don't. They were predicting an ice age in the 70's and suggesting we go melt ice caps. Yeah, we have better and more powerful computers now than in the 70's. But in the 70's we had better and more powerful computers than we did in the 50's and God only knows what the better and more powerful computers of the 2020's will tell us.

Re: Storms are more like Super Bowl Sunday and less like Valentine's Day

Bill — Thu, 13 Dec 2007 04:27:15 -0000

....the perfectly competitive analysis of supply and demand curves does not apply.

Spencer, you seriously misunderstand the the supply/demand curve. The curve is as basic as economics gets and is generally covered on the first day of Econ 101, right after the class goes over the syllabus for the semester. The fact that you don't understand this elementary concept reflects poorly on the CIA and even more poorly on the investment management industry.

Supply/demand says nothing about competition and it is not an "analysis" of a competitive system. The supply/demand curve simply makes the observation that consumers will demand more of a good at lower prices than higher prices and that suppliers are willing to provide more of a good at higher prices than at lower prices. This is true regardless of how competitive the market is. You can layer more complexity for an individual good by measuring the elasticity of demand, but that doesn't change the basic concept.

the traditional supply-demand curve analysis no longer applies. It is a misapplication of theory.

So, what you're saying here is that consumers are not willing to buy more of a good at lower prices and vice versa and that producers aren't willing to supply more at higher prices and vice versa. In other words, price doesn't matter. Upon reflection, does that make sense to you? If I offered you oranges at $5/orange how many would you buy? How about if I offered you oranges at $0.25/orange?

Actually, I'm saying the private capitalist system does a better job then the one you describe. But it is not the simple perfectly competitive model that modern economics insist on applying to everything.

Frankly, Spencer, as a former analyst, I'm surprised that this comment comes from somebody who was also an analyst - particularly one who covered retail. But not too surprised. Ignoring any sundry government regulations that may apply for a moment, a retailer like WMT is a price taker and operates in a perfectly competitive environment. What you describe as "imperfect competition" is known as "competitive advantage". One of WMT's competitive advantages is its size - it's such a large buyer that it can negotiate lower prices for wholesale purchases, pass the savings on to the its customers and undercut its competitors. Another advantage is its distribution system. If it can get more product to areas expected to experience a sudden demand surge (due to storms, etc.), it will have more product to sell. There are two ways for a retailer to maximize profit: higher margins, which are possible only on differentiated goods and selling more units of undifferentiated goods. WMT's distribution system allows it to more quickly redirect its inventory of goods to areas with higher demand, selling more units and maximizing its profit that way (since it sells undifferentiated goods). The extra supply of goods in high demand areas means that prices don't rise. If, for some reason, WMT and other retailers aren't able to get the the additional goods to the stores to meet the additional demand, prices for the goods will spike in that region. That's not "gouging". That's just "the way it is". If I have an extra gallon of water that I may need for myself later, I am willing to part with it only for a very high price because I may not be able to replace it any time soon. In other words, I'm taking a risk of running out of fresh water by selling it to you. If you're buying that water from me, you're going to have to compensate me for the additional risk.

Although you insist that Russ Roberts is wrong, I don't actually see where you disagree with him.

Russ Roberts is saying that better storm predictions give retailers a heads up about where demand will spike, allowing them to better supply those areas and keep prices from spiking. You're saying that WMT redirects inventory flow from lower demand to higher demand areas. Better weather forecasting allows WMT to do that more efficiently. You're basically saying the same thing. Aside from your general hatred of anyone who actually understands basic economics, what is your problem with Dr. Roberts' post?

Re: My Stimulus Plan

Bill — Thu, 24 Jan 2008 07:37:31 -0000

Bill Gates Issues Call For Kinder Capitalism

Gates just loves to wear his ignorance on his sleeve.

According to the parts of the article I managed to get throught before my blood pressure reached dangerous heights, Gates doesn't want to change capitalism but thinks that government should hand out money as an incentive for companies to dedicate their top people to to serving the poor and assorted other central planning. OK. I have an idea - let companies hire them legally so they can work for their lunch and stop incentivizing being poor by rewarding laziness and underachievement with welfare.

From the article: "Mr. Gates isn't abandoning his belief in capitalism as the best economic system....Among the fixes he plans to call for: Companies should create businesses that focus on building products and services for the poor. "Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces,"

So, it's not that Bill Gates wants to change capitalism, he just doesn't have a clue how it works. Since he doesn't know how it works, it definitely needs to be changed. Makes perfect sense.

A while ago, Gates attended a conference where someone pointed out that despite pouring gobs of money into Africa, the continent's GDP has not grown. Frustrated, Gates snapped back "You can't eat GDP".

'nuff said.

Re: The point about minimum wages

Bill — Thu, 24 Jan 2008 08:03:06 -0000

Not that I support it, but I wonder how many of these people take in less than the so-called "living wage" - David Peterson

As soon as someone can clearly define what a living wage is. During her trip around with world, Rose D. Friedman observed that there's practically no level of poverty below which humans cannot find a way to live. What many consider a "living wage" here is considered "very wealthy" in Egypt.

Re: Stimulie, II

Bill — Thu, 24 Jan 2008 09:28:51 -0000

Jon,

you ask But what spending depends on our wealth?

Good question. I think the answer is in your question - our wealth. the wealthier we become, the more energized politicians and the likes of Gates and Buffet in "fixing" something that isn't a problem in the first place and cannot be eliminated by definition - relative poverty.

Re: The point about minimum wages

Bill — Thu, 24 Jan 2008 09:44:00 -0000

Yes, David, it's relevant. I was merely pointing out that it's a stupid concept to begin with as a tangent. I'm willing to bet that $12/hour won't go that far in NYC and since everyone I know (including me) pay housekeepers more than twice that amount, I doubt many people in NYC make less than $12/hour already. And all without a "living wage" law. I'm sure it comes as a shock to all those advocates that knuckle-dragging, mouth-breathing maids (which I assume is how they see them, given the contemptuous and patronizing way activist treat the subject of their activism) can induce their employers to pay them well above the "living wage" without intervention by holier than thou advocates.

Re: Unintended Consequences

Bill — Thu, 24 Jan 2008 10:12:38 -0000

Bravo, Lee Kelly.

I always love your eloquent posts.

Re: My Stimulus Plan

Bill — Fri, 25 Jan 2008 10:55:41 -0000

Henri,

The central planning part and the part about changing something you don't understand in the first place. The part where Gates doesn't get that it's always profitable to serve needs and we don't need Gates or the government to point businessmen to those opportunities. Oh, and the part where Bill Gates rose from relative poverty (he was a broke college student) to the richest man in the world, proving that capitalism already works best for those who aren't already rich.

I thought this was pretty obvious from my original post, but I'm happy to spell it out for you.

Re: The vanishing middle class

Bill — Wed, 06 Feb 2008 08:43:36 -0000

apologies if someone already brought this up (didn't have time to carefully read every post)

"stagnating" wages don't include benefits and incentive compensation. Strange, because those two components are growing as a percentage of total comp. And, of course, people in all classes change over time. One year they may be classified as above average, another below and another average income. Thus, it seems meaningless to talk about "the middle class" as if they are some unchanging lump of humanity.

The best thing about the United States is that people are more free here to change the circumstances of their life than in any other country I've very lived.

As for the military empire....the amount we spend on military pales in comparison to the amount we're spending on entitlement programs. This notion that we can somehow pull back within our borders and ignore the rest of the world is fantasy, but making people pay for their lunch seems much more do-able to me.

Re: Silly Stats

Bill — Thu, 14 Feb 2008 17:32:58 -0000

John S., your lottery example is not really the same thing. What you're describing is competition for gambling dollars, not a trade deficit.

Re: Silly Stats

Bill — Thu, 14 Feb 2008 17:39:47 -0000

Way to completely miss Kevin's point by 100 miles and jump straight to your usual psychotic hyperbole, Muirgeo.

Maybe we should have the communist take charge of our country.

Don't worry, there are two running neck-in-neck right now. Your dream is not far from realization.

Re: Low Standards

Bill — Wed, 20 Feb 2008 12:56:38 -0000

Sam,

I normally agree with you but you are off base when you talk about military bases on foreign soil - especially the Arabian Peninsula. You're just missing facts.

The US planted military bases there because the US struck a "military defense for oil" deal with the Saudis after King Abdul Azziz united the warring tribes of most of the Arabian Peninsula in the 1930's into a single country now known as Saudi Arabia ("Saudi" is the possessive form in Arabic and literally means "Arabia belonging to the Al Saud"). The deal basically was and still is "we defend you and train what pathetic military you have and you give us deals on oil and the development of oil". The US didn't just go and plunk bases in the Arabian desert.

It is well known that the Arabian peninsula was subjected to foreign rule by the old European Empires

England, France, and Spain, all of which have had problems with Islamist attacks.

Spain never ruled the Arabian Peninsula and by and large neither did France. Spain was ruled by the Muslims of North Africa (that's why Eiman El-Zawahri periodically demands Spain as "Muslim land" he wants back). So, by your logic, the Spaniards ought to be bombing Morocco. In fact, the most notable, longest ruling and influential colonial rulers of the Arabian Peninsula where the Ottomans. Thus, I think you're going to have a hard time pinning Islamist attacks in Spain and France on colonial activity in the Arabian Peninsula. Since there haven't been attacks on Turkey, I think you're going to have a hard time drawing such a neat conclusion at all.

considered the Arab mantra 'The enemy of my enemy is my friend'.

In all my time in the Middle East, I've never heard that mantra. Although, I've heard it everywhere else in the world. Here's the mantra I've heard more commonly in Arab countries "Me against my brother. My brother and I against our cousin. My brother, my cousin and I against my neighbour....etc." The point is, there's always somebody to fight. This should not be surprising because the Arab Bedouin tribes would raid each other nightly. It's a raid or be raided culture. It still is.

Now I suspect that our great leaders are aware of the advice of Niccolò Machiavelli as given in The Prince that an effective means of subduing a populace to one's rule is to provide them with an external enemy.

Now, THAT is the core of Arab thinking. They have backwards beliefs that keep them in poverty and misery and since those beliefs are religious and sacred and totalitarian, they must find a scapegoat to blame their misery on. I'm generalizing, but you have to when talking about an entire population.

Sam, I think you've swallowed Ron Paul's fantasy. He seems to think that other people around the world are not independent actors and don't act out of their own motivations and perceived self-interest. Their every action is a reaction to something we (our government) does. The solution is similarly simplistic and wrong: If only we change our actions, they'll leave us alone. This is mighty sloppy thinking for a libertarian, IMO.

The fact is that they don't use the number of dead or the bases or the involvement in Iraq as a recruiting tool. Those are the soundbites they give you because they know what cords to strike in Western media. What they use to actually recruit terrorists from among their countrymen is the opposite of what they claim in the media - America's inaction. Its lack of response to the USS Cole, the embassy bombings, the skedaddling out of Somalia after the Black Hawk incident. That's what is used to recruit new terrorists and energize those already signed up. The promise is that America won't stand and fight because its liberal thinking has lead to less conviction in God and the righteous path and that it's ripe for a Muslim takeover. "God is with us as he has weakened our enemy so that he can't even fight". The promise is that once this conquest happens, all the misery and poverty of will be wiped away and peace and Islamic happiness will rule the earth.

How exactly do we respond to this bull? If I knew, I'd be famous. However, retreating has the opposite effect of the one you're hoping for.

Re: Anchovy ice cream

Bill — Wed, 20 Feb 2008 18:21:13 -0000

I guess it's the same reason we believe in God as and a saviour. The world is chaotic and the human mind is disquieted by chaos. We search for order and predictability and the hope that order might actually exist right around the corner in the form of that one key person or policy is in itself comforting. The promise of predictability without the fulfillment may serve as a psychological salve. Bernanke can spare us from recession and from the devaluation of our houses. The right president can make sure we'll get really expensive medical care for five bucks. Either our believe in miracles or our willful ignorance has a placebo effect in soothing our fears of randomness.

Or we're just stupid.

Re: Laffer Curve: The Evidence

Bill — Mon, 25 Feb 2008 14:05:23 -0000

We only consume what we produce. Entitling wealthy lords exclusively to consume private castles, large yachts and airliners organizes capital to produce what only wealthy lords produce.

In a world with no credit. But we live in a world with tons of credit. Seems that every unskilled labourer was using credit to obtain private castles for which the wealthy Lords are now paying.

Even then, Martin, the wealthy Lords become wealthy only by producing what the Plebes want to buy. The fact that the plebes are willing to part with their consumption credits for the production of the wealthy Lords means that what the wealthy Lords produce adds value to the lives of the plebes. Because in free market economy the wealthy Lord can only gain wealth by pleasing his fellow man (or inherit wealth created by a Lord who pleased his fellow man), then by what right do you take away their entitlements to the comforts which they have earned?

Further, in a free country, there's no stopping a mere Plebe from becoming a wealthy Lord.

Taxes distort economies because they effect incentives. The larger the tax, the bigger the distortion. Seems to me that the luxury tax is the most ill-conceived idea going. The thing about "luxuries" is that they are not "necessities". So, the demand for them is pretty elastic. Outside of jacking up the tax on less elastic luxuries like beer and cigarettes, how would your luxury tax avoid the pitfalls of the 1991 luxury tax?

Re: Spare Me from Collectivism

Bill — Mon, 25 Feb 2008 14:15:50 -0000

Sam there was a time when everything was held in private account. A few people owned all the land and everyone else was an indentured servant.

That's right, Sam. Muirduck would like to go back to a version of that which is the same but waaaay better. This time the government will directly or indirectly own everything and we'll all be indentured serfs of the state. That will be totally different and better.

Sam....been there done that it doesn't work. There was a reason they called it the Dark Ages.

And now we find out Muirduck has been with us since the Dark Ages. That may explain the convoluted posts - they're written in Ye Olde English.

Re: Laffer Curve: The Evidence

Bill — Mon, 25 Feb 2008 16:05:07 -0000

You obviously have no clue what I advocate, yet you go on and on as though you do.

No, I had no clue what you were advocating - I got distracted by your colourful diatribe about Lords and entitlement - but it's pretty easy to see that you have a giant chip on your shoulder. Try removing the chip as it's not conducive to conversation. Relax.

I'm in support of a consumption tax myself. However, your paragraph about Lords and Adam Smith's luxury tax gave a very different impression of what you favoured.

Re: Laffer Curve: The Evidence

Bill — Mon, 25 Feb 2008 16:12:15 -0000

I'm extremely skeptical of this simple formula

As well you should be. Taxes raise the hurdle rate for investment. The only way to lower the hurdle rate is to give favourable tax treatment for certain investments. That's how tax loopholes are created and that's why in Capitalism and Freedom Milton Friedman had an exhibit which showed that the actual tax paid was about flat at 23% (if memory serves) despite a highly progressive tax rate to 90%.

and I can only hope that the Feds don't start believing it

And you think they don't believe that now?

Re: Laffer Curve: The Evidence

Bill — Mon, 25 Feb 2008 18:06:06 -0000

Above, you're talking about unskilled workers buying castles on the lords' tab, and now you've discovered a chip on my shoulder. Consider the mote in your eye.

You must be a real joy at dinner parties. Do you actually sniff after after drawing parallels between two entirely unrelated things?

To counter your anecdote I have one of an illegal unskilled labourer who earned a pittance able to obtain a mortgage on a $650K house. I don't know how you define "castle" but clearly this is one castle he couldn't afford. Now the "Lords" are being forced to bail him out. Of course, I agree with you that lenders who lent to this guy shouldn't be bailed out but bailing out one bails out the other.

I don't want them ordering my children to build their castles. I thought we had outgrown this divine right.

What are you talking about? I have a feeling the definition of "Lords" has suddenly shifted.

That's just a political stunt designed to set up Bulldawg's argument.

Except for the fact that it was a real tax that really did not do what it was supposed to do and backfired rather badly. Mitchell was illustrating the point. Or do you think that all illustrations are stunts?

*sniff*

Re: Laffer Curve: The Evidence

Bill — Tue, 26 Feb 2008 07:07:34 -0000

Your incredible talk of unskilled laborers buying castles reveals some "welfare state" chip you carry.

I don't give a crap if the guy buys a "castle" or a dump. I don't want to be on the hook for a bailout for a guy who made irresponsible choices. the government's bailouts force me to back his loan with taxes collected from me. In effect, he gambled with my money without my permission. Gee, why should I be anything but delighted by that? In retrospect, my mistake was not taking out a mortgage I couldn't afford. Silly me.

no one should prevent the lender from repossessing the property in my way of thinking.

Yeah, but they are, aren't they? And that's my point. That's exactly the kind of legislation they're busy pushing through congress - the "alleged bailout".

A "lord" is a governor, someone exercising authority.

A "private castle" in my way of thinking is a residence consumed exclusively by one or a few persons but requiring the resources of many people to build and maintain.

See, it would have been easier to respond to you if you had provided a key with the dungeons and dragons parallel universe you've created. With the key it's hard enough to understand what you're going on about. Without it, you run the risk of being accused of "...obviously have no clue what I advocate, yet you go on and on as though you do." Gee, how could anyone NOT understand exactly what you mean by Lords and castles and dragons and pots of gold and what have you. All I a want to is: are the Lords a-leaping and are the Ladies dancing?

You're actually quite funny, Martin.

Re: Laffer Curve: The Evidence

Bill — Tue, 26 Feb 2008 07:10:39 -0000

"All I a want to is" = "all I want to know is"

Gotta stop popping on this blog while working!

Re: Laffer Curve: The Evidence

Bill — Tue, 26 Feb 2008 09:50:44 -0000

You're clearly bent out of shape over some bailout you imagine

I'm relieved that things are so clear for you. No, my grievance has nothing to do with you or your Leaping Lord universe or your ability to to twist everything into a personal slight. It's all about you, Martin. As I said, you must be just a delight in person.

Re: Laffer Curve: The Evidence

Bill — Tue, 26 Feb 2008 10:47:14 -0000

"Yours aren't special."

Coming from you, you can only imagine how much that means.

It seems that pretty much everyone here is at least capable of civil discussion except for you and maybe one other poster. Your treatment of everyone as a mortal enemy makes you very difficult to "talk" to and it distracts from you ideas. Thus, I will remove my non-special little self from this attempt at conversation with one who clearly believes himself to be superior to everyone on the blog - you.

Please feel free to have the last word to once and for all prove my inferiority to you.

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 07:24:29 -0000

"Between 1989 and 2004, Americans accumulated more wealth. They decided to use some of that wealth for increased consumption today."

Therein lies the problem, according to leftists. They believe that it is the government's job to decide how much wealth should be used for consumption and how much for investment, not individual Americans. Individuals acting in their own self-interest - and worse, deciding for themselves what that self interest is - creates a "problem" which can only be "fixed" with government central planning.

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 09:35:25 -0000

Freedomlover:One could argue that most people are doing WORSE off because they've taken on more debts then ever before.

Only if the return on the their assets is lower than the interest they're paying on their debt. Since net worth is growing, I'm inclined to believe this isn't the case. So, they are better off taking on more debt.

For example, even though I had the cash to buy my car, I chose to finance the car and invest the cash in my business because the interest rate I pay on the car is much lower than the return on my business. I have more debt, but I'm better off.

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 10:26:00 -0000

Randy,

True, you're not earning a return on the SUV. But if you're choosing to invest the cash and finance the purchase because the spread between the return on the invested cash and the interest rate you're paying on the purchase is positive, then financing the purchase is effectively leverage.

If people are simply financing purchases because they don't have the cash, then their net worth will be negative. But the graph clearly shows that this is not the case.

I'm oversimplifying - if you finance a car because you needed one to get to work and couldn't work at all or couldn't earn as much if you didn't have one, there's an implied return on the vehicle which a calculation like this wouldn't account for.

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 11:06:34 -0000

This psychology is precisely how easy credit becomes a bubble.

This is basic Finance 101.

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 11:20:34 -0000

That won't work for the average person who doesn't have high-return investments.

Well, they don't have to have a "high-return". The return on investmentjust has to be higher than the interest they're paying on debt. It's a basic cost/benefit analysis. But I think you're missing my point.

There will always be knuckle-heads who think that if they can make the monthly credit card payment on their shiny new Ducati motorcycle, they can afford it. However, since the average household's net worth is positive and growing, can you really conclude that the average American is making the Ducati knuckle-head decision?

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 11:39:05 -0000

Randy,

I wonder how much of that net worth is real estate which is teetering on either a price cliff or long slope. Incidentally, I worked full time and went through school and took as little debt as possible (although, I was very tired). I paid off the debt in two years. But doesn't education - especially bachelors and masters degrees - have a very high return, making it worth the debt?

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 11:41:18 -0000

"and went through school" = "all through school"

Re: Half Full or Half Empty?

Bill — Thu, 28 Feb 2008 11:41:29 -0000

"and went through school" = "all through school"

Re: Worse than I thought

Bill — Fri, 29 Feb 2008 11:16:43 -0000

No one is compelled to read my posts, and I only beat horses that are still living.

Beating living horses is not nice. Not safe, either. They tend to have a nasty kick.

Re: Worse than I thought

Bill — Sat, 01 Mar 2008 14:52:02 -0000

As to whether I am right in my interpretation of her "thesis" we can let her make that judgment since she has indicated she is aware.

I'm assuming we're talking about that lovely exchange, complete with leaping lords, serfs forced to build castles for Lords, dragons, ladies sighing, etc.

Yes, Vidyohs, no surprise - you understood exactly what my "thesis" was. I had not read any of Martin's posts before and didn't know that my response to his post would mean immediate, gestapo-style cross examination. It appears to me that Martin has a talent for shifting the discussion to accusing one of accusing him of things he does not "advocate" ("let the record show"). What Martin does and does not advocate is supposed to be magically known in advance. God forbid one misunderstands what Martin advocates! The obscure references full of Lords forcing his children to build them castles come fast and hard.

Re: Worse than I thought

Bill — Sun, 02 Mar 2008 15:26:45 -0000

I didn't even realize that you guys were talking about Martin's response to that post. I didn't read the reply because I didn't think that post deserved a reply - it was meant as a bit of humour (and we know humour sails right over Martin's head). Every post is a death match to Martin. I thought you guys were referring to our exchange on the Laffer Curve thread.

In the end, Martin. You missed the point once again. My post had nothing to do with whether the appreciation in household wealth was inflation or real appreciation in the price of the asset. It most definitely had nothing at all to do with which side was claiming inflation. It had to do with opinions on who decides gets to control wealth. The reason I didn't assert that this growth in household net worth is inflation or real is because I don't have enough data. First of all, I have no idea how much of this household net worth is a home, how much is retirement, and how many other assets the family might own - like a sole proprietorship. Secondly, even for home values, I don't know how much is real appreciation and how much is inflation. Even if I had the data on home prices, I could only venture a wild guess. Paucity data, lack of robust price data and meaningful comps is the problem in fragmented, illiquid markets. In fact, later in the thread, I wondered about that.

This I thought was funny, though:

ME: Only if the return on the their assets is lower than the interest they're paying on their debt. Since net worth is growing, I'm inclined to believe this isn't the case. So, they are better off taking on more debt.

Martin:This psychology is precisely how easy credit becomes a bubble. More to the point, the borrowing we've seen recently seems to fuel consumption. If it's fueling the consumption of nondurable goods, that's very different than borrowing to buy productive means.

If it was not obvious already, my shiny new SUV was not "productive means". I just had a hankering for a shiny new SUV and I bought it on credit instead of cash. Yet, I'm much better off than if I had spent cash. Martin obviously couldn't work it out the first time but managed to assert that this very bad thinking. Let's see if he has another go. Because this "psychology" is a very basic cost benefit analysis.

Re: Worse than I thought

Bill — Sun, 02 Mar 2008 15:29:29 -0000

There's some really poor editing in the above post, for which I apologize. I was interrupted a few times.

Re: Ohio and NAFTA

Bill — Mon, 03 Mar 2008 08:11:52 -0000

Freedomlover,

Hopefully, Haris will come back and clarify himself butI don't think that's what he meant. The way I read it, Haris just made the observation that one can't conclude that a lower unemployment rate alone indicates that that individuals are necessarily better off. But there are always winners and losers in a competitive environment and I don't think he said that if your skill set is equivalent to a factory worker in Thailand, you are deserving of more pay than he is.

Re: Ohio and NAFTA

Bill — Mon, 03 Mar 2008 08:50:04 -0000

Even if we assume the unemployment numbers are accurate, the numbers do not measure the quality of the jobs.

NO, but the quality of the jobs are probably now much more aligned with the quality of the employees performing them.

The damage was done by unions which falsely convinced their membership that it needn't acquire better skills because that they can continue to force consumers to overpay for goods produced by the members of labour unions.

Oops.

Re: Ohio and NAFTA

Bill — Mon, 03 Mar 2008 15:39:41 -0000

Well, certaiCareful Methinks, they have gulags for people who speak plainly.

That's why I'm nervous about the return of a Clinton to the White House, Vidyohs. She's already driven me and my company out of the state of NY. Well, she and the other socialists.

...and just to tie this back into the topic at hand....NY did this by taxing the living crap out of productive folks as the state lost revenue due to the lovely anti-business, pro-union, anti-trade policies she would now like to foist on the rest of the country.

Re: Ohio and NAFTA

Bill — Mon, 03 Mar 2008 18:59:27 -0000

Brian,

I have never been a union member and I will never be a union member. So, I have not walked in those moccasins. However, both my parents were forced to join unions in the past, so they have walked in those moccasins. My father has come to despise unions so much that for the past nearly three decades he is the only employee in his organization who refuses to join the union. Fortunately, he is very highly skilled and a bit unique, so the union has been unable to force him to join.

first the work of union members is not analogous to working behind the counter at starbucks, they are skilled craftsmen.

While some union members are highly skilled (like my dad), the unionized cashiers and baggers in the grocery store aren't.

Second the union is as political a machine as is politics itself and we cannot blame the people working for the actions of their self interested organization.

Why shouldn't an organization which justifies its existence by claiming to represent its members be held accountable for its actions by said members? And why shouldn't others hold the members accountable for an organization they elected to speak in their name? This is the problem with collectivism. The leaders of the collective will do what they desire and the collective will be...well, collectively held responsible.

Besides that, unions are simply labour monopolies which ultimately hurt labour. What about the guy who doesn't get membership? What about the unemployed? Since the unemployed aren't paying union dues, the union leaders couldn't care less about them. So what if higher wages for the union members lead to less overall employment? At least the union leaders get more income from which to extract dues.

to be clear I mean the mission statement of union work was to produce better quality goods and have a superior workforce due to the incentive of higher wages and the organization as a whole able to train and produce highly skilled workers.

The mission statement laughable. The incentive of higher wages exists without unions - and is usually killed by unions. There is heavy competition among employers for highly skilled labour and they will bid up the price for the most desirable in the labour pool. Workers don't need labour unions to develop skills. They will develop skills in response to the incentive of higher compensation for the development of those skills. And they can do all that without paying juicy dues to union bosses.

Brian, you seem like an open and honest guy and I don't mean to attack you or labour in general. but you said it yourself: "let us not disregard union labor altogether, people will pay a premium if the product is far superior." The workers in the union may have superior skills and people will pay a premium for a superior product. However, unions prevent people from paying a premium for superior skills, talent and work ethic and force a premium for mediocrity.

Re: Ohio and NAFTA

Bill — Mon, 03 Mar 2008 19:05:25 -0000

Vidyohs,

LOL, God help me, but you see it, and it is BS, isn't it?

Yes, but then I go to another country where I'm exposed to an even greater, previously unimaginable level of BS. My life has become all about BS minimization.

Re: Ohio and NAFTA

Bill — Tue, 04 Mar 2008 06:15:04 -0000

Freedomlover,

I am a woman. And I do. LOL.

Re: Ikenson on Obama

Bill — Tue, 04 Mar 2008 11:26:37 -0000

Good point, Martin. Sweet B.J. Clinton, eh?

Re: Ikenson on Obama

Bill — Wed, 05 Mar 2008 06:07:08 -0000

tariffs are a big reason for international price differences. Poor, dear Obama wants more of them to facilitate hope and change and change and hope. A $20K car costs $40K in Egypt because the tariff on cars is 100%.

Re: Ikenson on Obama

Bill — Wed, 05 Mar 2008 06:09:09 -0000

Python, I love your posts. You speak fluent sarcasm.

Re: Ikenson on Obama

Bill — Thu, 06 Mar 2008 05:28:46 -0000

and Wall Street benefits when real wages are depressed and jobs are offshored.

Instead of repeating headlines written by extraordinarily ignorant journalists why don't you do something useful:

1.)Define "Wall Street"

2.)explain how this "Wall Street" benefits if the entire economy doesn't

My bet is that, like muirduck, you won't step up to the challenge but I'm hoping you prove me wrong.

Re: Ikenson on Obama

Bill — Thu, 06 Mar 2008 10:29:06 -0000

Freedomlover,

If that's his definition of "Wall Street", then he's bathing in the same sea of ignorance as the journalists. I won't jump to that conclusion and await a response.

Re: The Practicality of Free Trade

Bill — Fri, 07 Mar 2008 06:25:38 -0000

So far, all rustbelt and muirgeo seem to be capable of is spew. In rustbelt's words - all talk no game.

I'm still waiting for rustbelt's definition of "wall street" and how it benefits if the rest of the economy doesn't. I suspect that I'll be waiting as long as Python will wait for muirduck to explain the one meter per person claim - an eternity.

Re: The Practicality of Free Trade

Bill — Fri, 07 Mar 2008 08:58:44 -0000

If the purpose of society is to maximally benefit its members

"If", muirduck. But you're operating under a false premise - society has no pre-specified purpose. You are certainly not qualified to define the purpose of society for me or anyone else. You seem to be pretty ill-equipped to define it for yourself, in fact. Incidentally, the only way to "maximally benefit" the "members" of a society is to let them individually decide what what benefits them and what doesn't and to have the freedom to act in their own best interest. that's the optimal "social contract".

My guess is that while you claim to have a vast interest in the poor, you actually have no interest in anything but massaging your own ego. If you truly had a deep interest in the poor, you would be volunteering to teach inner-city kids skills with which they can become more successful without your pathetic handouts. Of course, your interest in the poor ends with insisting on robbing productive members of society on behalf of the "poor" while taking a hefty chunk for yourself - just like the rest of your ilk. Theft is the socialist definition of "empathy".

You're now free descend into your usual incoherent rants about Bush, Oligarchies, Laissez-faire, and claiming that you're not a communist because you don't know what a communist is.

Re: The Practicality of Free Trade

Bill — Fri, 07 Mar 2008 09:04:33 -0000

Could one of you classic liberals tell me how this 1,000+ page document defines "Free trade". What is the definition of free trade?

Yes, I'm sure someone could. But you would never in a million years understand the answer. So, why bother?

Why don't you explain one of the million questions you've been asked and which you've completely ignored?

Re: Ikenson on Obama

Bill — Fri, 07 Mar 2008 11:21:57 -0000

Shawn,

First of all, this is Freedomlover's guess of what Rustbelt thinks. I hesitate to attribute this sloppy thinking to Freedomlover himself.

1.)Nothing in Freedomlover's statement had anything to do with Wall Street.

2.)Wall Street represents just a few large corporations

Wall Street does not represent anything of the sort.

...whose short-term profits can go up via off shoring and overall reduced labor costs which means increased dividends for shareholders.

This is truly meaningless. Since companies are valued on a going concern basis, short term, unsustainable pops in profits are heavily discounted. Not all companies pay dividends and large profits do not translate into higher dividends even for companies that do pay dividends. Especially in the case of companies which are still young and growing, it is far better to retain profits and invest in high return opportunities.

the notion that a company could profit by depressing wages and offshoring to cheaper locales also seems to fit.

While it is generally true that, all else held constant, if a company can reduce its labour costs, it can increase its profit, it is wrong to assume that a company has any control over wages. So, a company cannot "profit by depressing wages" because an employer is a price-taker in the labour market - it can depress nothing. In fact, it is the very fact that employers are price takers that drives them out of expensive labour markets and into cheaper ones.

In any case, none of this has anything to do with Wall Street. Nor is cost saving behaviour restricted to large corporations.

Further, if a company can save on labour costs and become more profitable that way, it is a net positive to the economy - including the labour market. Making a larger profit means that a company has more money to either return to its shareholders to invest or to invest in new ventures. New ventures require more employees. Employment, wages and investment are inexorably linked.

In any case, none of this has anything to do with "Wall Street".

Re: Ikenson on Obama

Bill — Fri, 07 Mar 2008 14:38:40 -0000

Freedomlover,

I think liberals are concerned that anybody 1.) makes a profit at all, 2.) makes it without their permission 3.) makes a profit and happens to be guilty of being a white male 4.) does or thinks anything at all without their approval

For example...liberals can't stand a white racists, but if a black person is racist then it's "understandable" or not racist at all because the definition of "racist" changes depending on the colour of your skin. So if you are a black racist paying a visit to "hymie town", that's okay. But if you are white and don't happen to be an Oprah Winfrey fan, then that's just intolerable.

Re: Ikenson on Obama

Bill — Fri, 07 Mar 2008 14:50:31 -0000

Shawn,

I'm glad you liked that.

Basically, Wall Street firms like Morgan Stanley and Goldman Sachs provide a variety of services for all kinds of companies all over the world. Thus, Wall Street firms benefits when there is a lot of economic activity. However, WS firms have no control over the strategic decisions of the companies we trade, underwrite, etc.

I remember when WorldCom's accounting fraud was discovered, the papers labeled it "another Wall Street scandal". I was on Wall Street at the time and I was an analyst covering WorldCom for a Wall Street instituion. Scott Sullivan of WorldCom spent a great deal of time lying to my face and suspiciously never being able to come up with the numbers that would reconcile my model WorldCom's releases. The scandal happened at WorldCom. Wall Street had nothing to do with it.

If it's corporate welfare Rustbelt is talking about, then let's call it what it is. But we have to remember that politicians sell themselves to Wall Street, Main Street and Welfare Avenue. They create the rents, it would be irrational for people not to seek them.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 14:03:19 -0000

Spitzer went after anything that moved. He threatened to break people's kneecaps if they didn't pay up so that he could look like a white knight. Not a single case, save Dick Grasso's, went to trial and common legal opinion is that Spitzer wouldn't have won any of them. Only Grasso stood up to Spitzer. Now, it's Cuomo's job to prosecute the Grasso case and, predictably, the state is losing its case.

You'll forgive me if I delight in the downfall of a man who forcibly extracted Billions in "protection" money from shareholders. And I do delight in that sleazy bastard's downfall.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 15:30:06 -0000

Russ Nelson,

That is hysterical.

freedomlover,

judging by Muirgeo's first post, he doesn't even understand the topic.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 15:35:16 -0000

Mesa,

I was wondering the same thing. Not whether or not anyone was tailing him but how many!

This isn't the first time he's been in trouble since he became governor either. He continued to use his mafia tactics once he got to Albany but they didn't go over as well there and he got a lot of bad press when the story of his coercion broke.

His double standards are truly amazing. If a company aggressively markets a product, that's a felony. If he threatens to break people's kneecaps, that's God's work.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 15:39:23 -0000

He did a lot of good as AG and evoked remarkable clarity in everything he said.

What good things did he do?

He prosecuted the behaviors of illegal businesses

Since when did investment banking, insurance and music become illegal?

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 17:09:27 -0000

Steve H,

Spitzer doesn't have any prosecutorial achievements. There was almost no evidence for most of his accusations. Knowing this, he would call his victims and threaten to ruin them in the court of public opinion. They caved. A former Goldman Sachs partner once publicly stated that he thought Spitzer was overstepping his boundaries. He got a call from Spitzer threatening to destroy him. Cowing people is his only achievement.

As a New Yorker, I watched as he went after my colleagues and competitors. There are definitely practices that I thought should have changed on Wall Street and people that I knew played fast and loose with ethics. We all watched as Grubman and the shareholders of Citigroup took the fall for Sandy Weill, who personally contributed to Spitzer's campaign but who also personally ordered Grubman to work out the unethical deals with WorldCom and AT&T. None of the "offenders" went to prison or even lost their jobs. The rules enforced by the SEC in the aftermath caused nothing but the need for more compliance staff. Nothing got better but shareholders got poorer.

Grasso was the CEO of a private organization which privately decided to pay him an enormous amount of money. Apparently, it's okay for Eliot Spitzer to inherit his billion dollars but it's not okay for Grasso to earn his hundreds of millions. Spitzer tried hard to cow Grasso, but if you've ever been in the company of old-school floor traders, you know those guys don't go down easy. So, Grasso fought back and he's winning in court because - as it turns out - a private organization can pay its officers as they see fit. Who knew? Ugh.

I realize you're not defending this serpent, but I don't know how any of this can be called prosecutorial success and I don't know how you can claim that he did so much good as AG.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 17:18:00 -0000

I stand in my opinion that Spitzer's "crusades" were legitimate prosecutions of illegal activities and in the public interest.

Again, he rarely prosecuted anything. He persecuted a lot but rarely prosecuted. What proof was there that these businesses were actually engaged in illegal activity?

Spitzer mostly publicly alleged all manner of BS and filed lawsuits. The businesses settled and paid fines instead of going to the expense of fighting him in court. Mind, if there were actual ILLEGAL activity, the AG would have been OBLIGATED to file criminal charges. How many criminal charges were filed? Exceptionally few because he rarely had evidence for his accusations. What makes you so sure he was actually prosecuting illegal activity and that his actions were in anyone's interest except his own?

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 18:45:51 -0000

True, Spitzer didn't go for convictions, instead preferring to lean on corporate bad boys with tools that prior AGs never thought to use.

Colourful use of language. It's probably true that other AGs didn't think to use mafia style extortion. Define "bad boys".

And as a well-heeled investor himself, there's no doubting his keen sophistication on the workings of the investment industry.

Inheriting money doesn't make you a sophisticated investor.

Perhaps some find it unfair that he would leverage his knowledge and the visibility of the office in the ways he did.

Uh, no. What we find unfair is that he used the power of his office to threaten and extort.

I'm sure there were a few victims, scapegoats, and vendettas as Methinks describes.

What drivel. The point of the AG's office is to aid in the maintaining rule of law to prevent victims and prosecute criminals, not to CREATE victims and pursue vendettas.

Frankly, I'm less worried about them then the small powerless 401k investor getting snaked by Merrill or Janus.

Perfect. So, justice should not be blind. Every man should not be equal under the law. If the man is in one position, then it's okay to victimize him. If he is in another, then it's not okay to victimize him. I'll bet you think it's not okay to treat black suspects worse than white ones, right? But if we are not equal in the eyes of the law, then why would that be wrong?

Also, what do you mean by poor, helpless 401K holders getting "snaked" by Merrill?

Regardless of what you think about him, it took balls to go after New York finance in New York...

Where have you been? Ever heard of Giuliani and Michael Milken? This has been going on for a long time. The main difference between Spitzer and his predecessors is that Spitzer really took extortion to new heights.

(to say nothing of going after the Gambinis in NYC...

Who do you think runs prostitution rings? Nuns?

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 18:48:16 -0000

Damn why do you guys root for the Mr. Potters of the world over George Baileys? Seriously when you watch It's A Wonderful Life do you guys actually walk away thinking what a good guy Mr. Potter is???

No. Our understanding of the banking industry goes deeper than a Jimmy Stewart movie. Remember, the round peg goes in the round hole and the square peg goes in the square hole.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 18:55:24 -0000

Hold on with the valuations, mcwop. Muirgeo is still working out which peg goes into which hole.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 19:25:42 -0000

Well, Ken, I suppose that any response to drivel would be called vitriol by the author of the drivel. It's a cute way to sidestep when you have issues with basic logic.

many of us believe that the scoundrels in the executive suite are worse than the scoundrels in the AG's office.

Brilliant. It's better to have corrupt officers of the law with the full coercive power of the state behind them than it is to have corrupt businessmen.

Re: The Spitzer Matter: It IS Private

Bill — Mon, 10 Mar 2008 19:30:00 -0000

Mesa, I believe Ken has just told us he's okay with false accusations and victimizing innocent people as long as they belonged to a certain group. 'nuff said.

G'night.

Re: Markets and Community

Bill — Tue, 11 Mar 2008 18:24:00 -0000

Let's just get the oligarchy to enact the right laws to prevent the oligarchy from exercising power over us. That's the ticket.

Sam,

It's the same crap written in the same ebonics in every single post. I don't think Muirdiot is a doctor. I think he's a patient.

Re: Markets and Community

Bill — Tue, 11 Mar 2008 19:15:53 -0000

even though I have never read "The Road to Serfdom" is that muirgeo and all liberals get Hayek exactly backwards in their everyday life

The irony is that this is one of the things that Hayek says in "The Road to Serfdom". He draws attention to the fact that socialists take the language of liberty and render it meaningless by using the words to describe the antonyms of the words. The Soviets were experts at that.

Re: Markets and Community

Bill — Wed, 12 Mar 2008 06:24:43 -0000

You guys can't do anything but name call. - Muirdiot

That's all that's left when all civil methods have been exhausted. If you don't like it, you can find another blog to pollute. I know idiots rarely realize this, but you are here of your own free will.

How many times do I have to cram this down your throat.

Why am I not surprised that your only method of persuasion is cramming bullshit down people's throats.

Muirdiot, you continue to claim that you're here to learn. Here's a lesson for you that's more your speed: The right shoe goes on the right foot and the left shoe goes on the left foot. You can have your mother mark them "L" for left and "R" for right if you can't tell the difference yourself.

Re: Markets and Community

Bill — Wed, 12 Mar 2008 12:31:15 -0000

Sam,

You have the patience of Jobe. After all this time you can't possibly believe that he even understands any of your well-written, extremely clear explanations. It's one thing to disagree with you and completely another to lack the capacity to understand what you say in the first place.

Re: If I Were A Shill for Industry….

Bill — Thu, 13 Mar 2008 08:29:06 -0000

John Dewey,

I think Scott makes an important point. The government creates economic rent which businessmen would be stupid not to seek. In light of the growing government intervention in the economy, it's hard to believe that that rent-seeking behaviour isn't common and won't become even more widespread.

Re: If I Were A Shill for Industry….

Bill — Thu, 13 Mar 2008 12:18:46 -0000

John Dewey,

I did read your 10:44 post. We agree on the cause. I only meant that I think that once politics warps the environment and changes incentives, the way people think about business in general also changes. In addition to politics, I think human nature also leads us to believe that our business is somehow unique and deserves special treatment. Failures are blamed not on poor execution or pure dumb luck but on some "flaw" in the competitive system which only government can fix. This thinking is then passed on to the next generation of business "leaders".

Incidentally, I have run several of my own businesses, most in highly regulated environments, and I would love to sink or swim without the interference of government. However, in my experience, this attitude seems to be the exception rather than the norm. Then again, our different observations may be due to the fact that I'm in the Soviet Socialist Republic of New York and you're in Texas :)

Re: If I Were A Shill for Industry….

Bill — Thu, 13 Mar 2008 13:20:00 -0000

My impressions of Texan's attitudes compated to New Yorkers' were formed in the days when I had to visit a lot during my oil days. I never lived there. So, my impressions may not totally reflect reality .

I don't know about the permits, Freedomlover. My current regulating body is Federal, so I would be equally effected everywhere in the country. My point is that attitudes here are so favourable to regulation than the seem to be in Texas.

Re: If I Were A Shill for Industry….

Bill — Thu, 13 Mar 2008 15:25:39 -0000

Freedomlover, we're bright red over here with Hillary painting a hammer and sickle on the state seal. It's all relative.

Re: How Dare She

Bill — Sun, 23 Mar 2008 12:30:22 -0000

OH come on, 99% of the people want the nanny state. The 1% of us who don't should just assume the position. - Freedomlover

How about this: 99% of the people want the nanny state to control everybody else's choices while maintaining their right to decide for themselves. The result? 100% of us will assume the position.

Re: How Dare She

Bill — Sun, 23 Mar 2008 12:55:17 -0000

However 99% are hypocrites. I maintain that I'm not a hypocrite.

Yeah, well you're only 1%, so you don't count. "We the people" decided you need to bend over, spread 'em and stop complaining. That's the society we live in and society has decided. You're not afraid of The People, are ya', Freedomlover?

Love,

Muirgeo

Re: How Dare She

Bill — Sun, 23 Mar 2008 14:29:51 -0000

methinks - I know ducky doesn't mind the societal screwjob but I do.

Never mind, Freedomlover. If you think think this is a societal screwjob, just wait until you realize that the next bank that will need to be bailed out is the Federal Reserve, after it drives itself to insolvency by getting stuck with all that crud it's taking as "collateral" these days and the only ones who will do that is you and me - taxpayers who didn't take out mortgages that we couldn't pay back and didn't lend to people with no income and no credit score. (one long sentence, eh?)

Best,

Methinks

Well, then. We The People will have to break your kneecaps and send you for re-education so that you can finally get through your thick skull the greatness of our Glorious Cause.

Love,

Muirgeo

Re: How Dare She

Bill — Sun, 23 Mar 2008 14:31:02 -0000

Dr. Boudreaux, although we may have many friends in life, we only have one mother. I'm very sorry for your loss.

Re: How Dare She

Bill — Sun, 23 Mar 2008 14:32:38 -0000

No, I don't. I've heard the name but I don't really know who he is.

Re: How Dare She

Bill — Sun, 23 Mar 2008 15:01:37 -0000

stuffing everyone into some high-rise apartment tower

And by "everyone" you mean everyone and by "high-rise" tower, you mean ONE high rise tower.

That'll get us used to that one person-per-square-meter that's just around the corner

Brotio,

There was a law on the books in the Soviet Union that no FAMILY had the RIGHT to more than NINE SQUARE METERS of living space - regardless of the family's size. I'm sure the knowledge of the precedent for this sort of thing will make you sleep easy tonight [dripping sarcasm].

Re: How Dare She

Bill — Mon, 24 Mar 2008 04:57:09 -0000

Didn't take too long before the Soviet-conspiracies came out of the woodwork did it?

There are no soviet conspiracies. Are you so brain-dead that you don't know the difference between conspiracy and law?

Re: How Dare She

Bill — Mon, 24 Mar 2008 06:20:07 -0000

go look up "conspiracy" in the dictionary, Gil. Then, go look up "law". Try to work it out on your own, if you can.

Re: How Dare She

Bill — Mon, 24 Mar 2008 06:53:23 -0000

gappy, the problem is that wearing a seatbelt is not a big behavioural change while changing eating habits is. How much money has been spent to "educate" the public about healthy eating? Yet, we're still getting fatter. The problem is that even if a government program doesn't work, the government never cuts funding to it. In fact, it's likely the government will throw more money into it. Consider D.A.R.E. - the anti-drug program. The program has done nothing to stem drug use among school-aged children, yet it's still funded because it's "popular" among bureaucrats. Music and sports programs, on the other hand, have been shown to reduce drug use among participating kids (mainly by distracting them and building self-esteem). Those programs have been cut. I just don't think that government can spend money wisely on anything - even information programs.

Re: How Dare She

Bill — Mon, 24 Mar 2008 13:27:07 -0000

Kevin & FL, I agree with both of you.

Python, don't you mean that Hillary will charge healthy citizens $10.2K and fatties $10K because the healthy citizens owe the fatties? They are rich with health, after all and more able to work. It's important to redistribute wealth to keep things even.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 12:48:38 -0000

It's hard to agree with Arnold that Bear's assets would have been sold below market value. Nobody is trading them at all right now and institutions are increasingly less willing to accept them as collateral for repos. Without trading, there is no reliable price for the debt. BTW, does anybody know if that $30 Billion in MBS's and CDO's the Fed is essentially taking on its books, the notional or the best guess at the Market value? I'll bet it's the not MV because there is no MV.

There's already a massive bailout of lenders and borrowers underway.

The cap on the size of mortgages that Fanny can buy has already been lifted in order to reduce the mortgage rate for a larger number of mortgages. The Fed is doing its bit by hacking away at the Fed Funds rate in an effort to drive mortgage rates down and making borrowing cheaper for banks by lowering the discount rate to maintain the fiction of their solvency. Meanwhile, Paulson (otherwise known as "the other one"), is busy publicly begging borrowers to not walk away from their mortgages and encouraging them to refinance arms with fixed mortgages. It's pretty clear that the Fed and Treasury are giving the same bad borrowers a window in which they can refinance to fixed mortgages while the Fed inflates the housing market by stoking inflation in general. The only problem with stoking inflation, of course, is that if you don't stoke it "just right", expectations of future inflation change and that second derivative will kick you in the head like an angry mule.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 13:00:06 -0000

Marcus,

The Fed has been lending to member banks and accepting CDOs as collateral. The fear is that the loans are based on the notional value of the collateral and that the borrowing bank will become insolvent and not be able to repay the loan. If this happens enough times and the Fed is stuck with enough of this near-worthless paper, the Fed itself may need a bail-out. Suddenly, we'll find ourselves watching congress using tax dollars to put together a bailout package and maybe even taking over the Fed.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 13:10:36 -0000

REW, this is largely the market's fault, not the Fed's. Credit spreads were at historically tight levels at the beginning of July 2007. That's not the Fed's fault.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 13:18:19 -0000

Well done, Muirgeo. You finally found the appropriate thread for that article.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 18:45:34 -0000

Jim Rogers is not pleased by neither I-banks' behaviour not by the Fed's. Although, he exaggerates about the 29-year old bankers with Maseratis and seven figure bonuses, he makes some good points.

Re: Bear Stearns debacle

Bill — Wed, 26 Mar 2008 18:47:17 -0000

as always, sorry for the typos resulting in grammatical errors.

Re: Bear Stearns debacle

Bill — Thu, 27 Mar 2008 07:48:59 -0000

Would you elaborate on that?

Sure, Marcus.

First of all, we are in complete agreement about government intervention.

I'll explain what I meant: The interest rate at which lenders lend is determined by the risk free rate (for which treasuries is usually the proxy) plus a credit spread. Obviously, the riskier the borrower, the larger the credit spread.

Over the last ten years, credit spreads have been tightening, which amounts to lenders accepting a lower return for a given level of risk. While there may have been some government interference with subprime mortgages (some have argued that red-lining laws forced lenders to accept a lower return for high risk borrowers), there is no question that credit spreads tightened across the board as lenders competed with each other to make loans.

While credit spreads tightened, leverage increased. Leverage increases risk. For example: if a portfolio is levered 10 to 1, then a 5% decrease in the price of the assets held in the portfolio translates into a 50% reduction in the value of the portfolio. In addition to increased leverage and lower returns for a given level of risk, portfolio risk management became quit lax - at least, in my opinion. BTW, lower credit spreads, more leverage and laxer risk management are all related.

The Wall Street Journal's editorial page loves to blame Greenspan for lowering the Fed Funds rate to around 1% after 9/11 and, certainly, that did make money very cheap. However, the FED is not responsible for the decision to increase leverage, tighten the credit spread or reduce risk controls.

Government is also not responsible for borrowers making poor decisions, lying and outright fraud.

As you point out, nobody was complaining and seeking to regulate anything when everyone was making money in the housing market. Now that there are losses, participants are screaming that they should not be the only ones to bear them. We must share the losses with those who did not participate in these imprudent decisions. A perfect example of privatized profits and socialized losses.

The risk was taken by participants in the housing market - both borrowers and lenders - and the losses are rightfully borne by those same participants. The argument that government must step in because this "crisis" will hurt everyone is, in the words of Penn & Teller, Bullshit.

Re: Bear Stearns debacle

Bill — Thu, 27 Mar 2008 08:18:17 -0000

Colson,

While it's true that government lowered "standards", that only means that it removed some regulation.

Market participants were not forced to lower their standards.

The lending institutions, not the loan brokers, repackeged the loans. ABS (asset backed securities) have been around for decades. They are not a problem. The question is: why would a buyer of a CDO not insist on knowing the assets underlying it? And if he doesn't know the underlying assets, then what gives him the comfort to leverage the portfolio of CDOs 10 to 1? Most importantly, why should anyone but the participants involved in this deal bear the risk?

Thanks to the government's socialist policies in response to this "crisis" (it's not a crisis but the government will make it one), bankers are walking away with quite a different message: We can do what we like, taxpayers will ultimately bear the risk and we will receive any gains. That's a pretty powerful incentive for a repeat of very same behaviours that got us into this pickle in the first place.

Incidentally,

If I were a bank owner, I would walk away with a very valuable lesson - is it better to offer a mortgage at a fixed rate of return or run the risk of interest rate increases and an increase in foreclosures? Neither is better and it's not a game theory question. It's a practical risk question answered by banks every day. There are many derivative products available to hedge interest rate risk. Banks generally borrow at the short end of the curve, which by definition, means they borrow floating. They tend to lend at a fixed rate at the long end of the curve. So, not only do they have a fixed/floating mis-match but they also have a duration mis-match. To capture the spread (profit) on that loan while reducing interest rate and curve risk, banks enter into swap and forward agreements and may also use use caps, floors and swaptions to hedge these two risks.

Re: Bear Stearns debacle

Bill — Thu, 27 Mar 2008 09:01:57 -0000

I still want to know how the most intelligent investors and CEO's could have been so blind and utterly incompetent.

Hey, what's with the "intelligent people" all of the sudden? Weren't you calling these same people "Wall Street paper pushers" on every thread before this one? Which is it, muirdiot?

Here's the question keeping me up at night:

How is it that you couldn't get into vet school but managed to be accepted to medical school and are now licensed to practice on children? That seems like kind of a screwed up system to me. Why would we let people not smart enough to worm dogs graduate med school?

Re: The Dark Art

Bill — Thu, 27 Mar 2008 14:41:21 -0000

whining because the fruit of their labor has been stolen by the financial wizadry of wall street paper pushing assholes making pyramid schemes and calling them fancy names like derivatives. That's not free market economics it's common thievery and it's the end result of allowing unfettered greed run our markets and assuming beyond all reason that the invisible hand will slap these bad boys when they get out of line.

Seriously, How the &^#@ did you get into college?

Re: Bear Stearns debacle

Bill — Fri, 28 Mar 2008 06:17:47 -0000

More regulation will mean that large sections of the population simply won't have access to credit. This group will include the young, the lower income brackets and anyone without an exceptionally high FICO score.

We've already tried that.

Re: Bear Stearns debacle

Bill — Fri, 28 Mar 2008 06:20:49 -0000

Couldn't I use the same felonious argument to say why have police? Sure police can be corrupt too but better to have them then not. - Muirdiot

Before we answer any more of your stupid questions about the financial industry's "wizardry", I want to see you answer my question:

Go on. Let's see an explanation, "doctor".

Re: The Dark Art

Bill — Fri, 28 Mar 2008 09:42:53 -0000

...own well founded rebuttal is less then impressive. But what can one expect from a 5th grader. - Muirdiot

The complete inability to EVER punctuate sentences correctly. The inability distinguish between "then and "than". The inability to distinguish between possessive and plural. Of course the complete absence of logic is also a a factor - but not of fifth graders. This is true of complete morons and muirdiots.

Re: Bear Stearns debacle

Bill — Fri, 28 Mar 2008 12:45:25 -0000

Which country has the most innovative approach and successful production of new pharmaceuticals?

Prove that this results from the existence of the FDA and not from the lack of price controls that exist in Europe.

Re: Bear Stearns debacle

Bill — Fri, 28 Mar 2008 14:23:43 -0000

Tell us how the FDA was responsible for the successful development of aspirin.

Not a good example. Aspirin preceded the FDA.

Let's see how if Muirdiot will even attempt to provide proof that the existence of the FDA results in more pharmaceutical innovation. And let's see if this proof is anything more than the usual convoluted bullshit. Somehow, I doubt it.

Re: "Earth Hour" and the Dark Ages

Bill — Sat, 29 Mar 2008 08:58:51 -0000

Mesa,

My plan for earth hour is to turn on every light, TV and any other electronic piece of equipment to full capacity at home and as well as on the trading floor (we have some unresolved tech issues scheduled for this weekend anyway). I plan to produce such glow that my @#&% house will be visible from space. Aliens will think it's a supernova.

Incentives are bitch.

Re: "Earth Hour" and the Dark Ages

Bill — Sat, 29 Mar 2008 11:03:54 -0000

William,

Because once the socialists were unable to claim that socialism is superior due to the collapse of the Soviet Union, they needed to find another excuse to inflict socialism. Since the environmentalists wish to impose their agenda on the unwilling, the match between socialists and environmentalists comes naturally. They were made for each other.

I'm naturally antagonistic toward anyone wishing to impose their will on me. However, I have solar powered outdoor lights, all my flashlights are hand-crank, my lights are on dimmers, I'm a stickler for turning off lights, I keep my thermostat high in summer and low in winter, I prefer to walk instead of drive whenever I can and I don't run my washing machine unless I have a full load. I plan to incorporate skylights to the house I'm building to reduce my use of electricity and collect rain water to water my plants. I do this not to save mother earth but because I like natural light and I'm cheap.

Re: "Earth Hour" and the Dark Ages

Bill — Sun, 30 Mar 2008 06:28:43 -0000

Shucks, mnm & Mes...you make me blush...right back atcha.

That is a broad generalization. Many environmentalists prefer to use persuasion. - John Dewey

Yes, it is a broad generalization, John. But I spout off enough on this blog and sometimes I just have to pick a stopping point. I know a few environmentalists personally and their goal is to make "environmentally friendly" alternatives more economic so that people will choose them rather than be forced to buy in. The groups they associate themselves with are of a similar mindset. But they aren't aggressive and don't seek to pass legislation or pull idiotic stunts and the enviro-terrorists and Algore are and do. They are after all, the ones who came up with the "bright" idea of forcing people to recycle paper which creates a bigger environmental hazard than making paper from scratch. It seems that half of what they do - including pushing organic farming (which requires more land and more deforestation than "conventional" methods) - is actually detrimental to the environment.

Socialism is not the only reason to want a clean environment. I don't want to wade through trash and breathe crud every day.

Methinks, if plastic bags are cheaper than biodegradable paper ones, would you prefer the former?

PLASTIC BAGS? Who the hell uses plastic bags anymore? I've been using the same canvas bags for 10 years. Plus, you don't have to wonder what to do with that giant growing ball of plastic grocery bags which in Manhattan turn into nasty, filthy kites on windy days. Canvas. Really, people, it'll change your life!

Re: "Earth Hour" and the Dark Ages

Bill — Sun, 30 Mar 2008 07:27:30 -0000

I didn't specifically respect the Earth hour.... - Muirpid

What! You didn't turn off life support machines and the incubators in the NICU for an hour? Was that planned hypocrisy?

Re: "Earth Hour" and the Dark Ages

Bill — Sun, 30 Mar 2008 07:44:50 -0000

Sorry for the open tag. how embarrassing.

Re: "Earth Hour" and the Dark Ages

Bill — Sun, 30 Mar 2008 10:00:14 -0000

The one thing they could not plan for is change - Sam

Once that book arrives, you'll be in possession of a hysterical illustration of the fact that not only could the soviets not plan for change, but they couldn't even plan for the plan.

Re: Making Americans Poorer

Bill — Wed, 02 Apr 2008 08:21:28 -0000

Mcwop,

Her plan is to subsidize unproductive industries because she thinks that will create job growth. And by "create job growth" I mean get her elected. In politics, destroying three jobs in the pursuit of the appearance of the creation of each new job is just good economics.

Re: McCloskey on capitalism and the virtues

Bill — Wed, 02 Apr 2008 08:39:21 -0000

Muirdiot,

I sincerely hope that when you are next in desperate need of a loan to start your own practice, buy a home, or pay for your kid's education, no banker will prey on you and victimize you by extending you the credit you desire.

Re: McCloskey on capitalism and the virtues

Bill — Wed, 02 Apr 2008 13:14:30 -0000

"Muireo consistently ignores the incentives created..."

Can be more accurately written:

"Muirdiot does not understand what an incentive is and is incapable of learning. Muirdiot, doesn't seem to quite grasp that we live in a republic, not a pure democracy and can never seem to read past "we the people" in the preamble to the constitution. In other words, muirdiot is not playing with a full deck.

Re: McCloskey on capitalism and the virtues

Bill — Wed, 02 Apr 2008 13:54:05 -0000

Right, Muirpid

Of course, all medical professionals used to think that bleeding people cured them of illness and that not washing their hands before surgery caused no ill effects. I guess since the majority of doctors believed those things, they must be true. Muirpidity at its finest.

BTW, it's useless to taunt me with the Libertarian party. I'm not a Libertarian.

Re: Making Americans Poorer

Bill — Wed, 02 Apr 2008 18:16:20 -0000

But since we're already kinda doing that, with the actual digging replaced by pushing papers around, I'm thinking she's looking for a new approach. - muirpid

Fascinating. Since you know what I - in your words, a paper pushing asshole jerk cocaine-addicted monkey - do on Wall Street, perhaps you can explain it to the rest of the class. To date, you've claimed expertise on the simplest of loans but have not yet been able to explain how one works. You've claimed that derivatives are theft and, yet, you don't know what a derivative is. You've accused Victor Niederhoffer of being a "money changer" (as in the biblical money changers - Jesus got rid of them, they work with money, these WS guys work with money, ergo WS people are bad), yet you don't know what a money changer is either. When someone so ignorant has such strong opinions and is completely incapable of even the feeblest of defenses for his positions, we call that person a moron. A Muiron, if you will.

Re: Making Americans Poorer

Bill — Wed, 02 Apr 2008 18:17:59 -0000

OK. This is the last time I allow someone else's teenager on my computer. The above is my post.

Re: Making Americans Poorer

Bill — Wed, 02 Apr 2008 19:30:12 -0000

Mesa,

Ya' gotta love a kid with a sense of humour. A teenager who can see through populist BS. Rare.

Re: Making Americans Poorer

Bill — Wed, 02 Apr 2008 19:36:40 -0000

Raker, mnm,

Muirpid repeatedly uses the term "real workers" in the same way that Hillarity Clinton used the term "real people" when addressing those who died in the twin towers on 9/11. As in "...and many of those who died were not just Wall Street employees but real people like secretaries and maintenance workers."

This is not unlike the term "working families" when talking about taxes. "Working families" work for their wages but high wage earners don't work and get paid the big bucks to...uh...well...pay taxes.

Re: McCloskey on capitalism and the virtues

Bill — Thu, 03 Apr 2008 09:57:01 -0000

I'm only here to suggest the classic liberal economist is still using leeches and not washing their hands before surgery. - Muirpid

You really are too stupid for words.

when you defend your position by saying idiotic crap like "I'm not the only one who thinks this way" and "most Americans think just like me", you are suggesting that you are correct because the rest of the herd of lemmings is of a like "mind"-set. In no way does this pathetic excuse of an argument suggest that you believe that economists (whom you have proven you are not competent to judge) are mistaken based on merit rather than on the lemming herd mentality to which you subscribe. Why do I have to teach you basic logic at your age, Dr. Death?

Re: McCloskey on capitalism and the virtues

Bill — Thu, 03 Apr 2008 13:09:56 -0000

Sam, this paper pushing Wall Street asshole, jerk, cocaine addicted monkey noticed that Muirdiot never even attempted being "above it all". He's got the same double standard for himself as he has for the market and the government and he always has. He's just pissed off that people here have his number and he's hoping he'll magically convince us that insanity is better.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 07:29:36 -0000

Marcus,

You make a good point. However, I agree with Grant as well. If a home buyer is already upside down in his mortgage, what incentive does he have to continue to pay the mortgage at all? If he bought a home with zero down just a couple of years ago, he really doesn't have any equity in the house. Even if he's not moving for a new job, there is no incentive to stay in the home and continue to pay the mortgage. The incentive to simply walk away from the mortgage seems high with or without alternative employment opportunities.

Of course, as you point out, the situation is different for people who have significant equity in their homes. However, selling the house is not the only option. One can rent out the existing home and either buy or rent a home in the new location.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 07:43:09 -0000

Actually, Marcus, having thought about it some more and rereading the scenario you describe in your initial post....

The scenario you illustrate is one where people are upside down in their mortgage and have no or very little equity in the house. These people would simply walk away from their mortgage rather than try to sell the house. Since renting is always an option, they don't need to come up with a downpayment. So, I don't think I can agree with your argument. Even if the home owner has some equity in the house, the loss has already occurred whether the homeowner chooses to realize the loss or not. Foregoing a better job opportunity to further gamble in real estate by staying in a home which has depreciated in value solely because you're anchored to a particular price is just a stupid decision.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 07:45:27 -0000

Consider the possibility that 1) they cannot sell at any price, or 2) cannot get close to clearing the mortgage in a fire sale situation, or 3) the house at the other end is much higher in price.

1.) There is always a price

2.) They walk away from the mortgage and don't even try selling (this is happening)

3.) They rent the house in the new location.

Re: Good Sense on the Housing Market

Bill — Fri, 04 Apr 2008 08:35:58 -0000

This is a pet peeve of mine. Glaeser calls home buyers "owners". This is the wrong label. An individual who has little or no equity in his home is not an "owner". He is a borrower and the owner of the property is the entity that paid for it - the lender.

He basically thinks that people who bought homes they can longer afford should be subsidized by taxpayers. So, even if taxpayer Joe would never ever lend someone that much money on such loose terms, the government will act as Joe's agent and loan Joe's money on his behalf, against Joe's will. If the borrower manages to pay off the mortgage, the borrower gets the entire benefit of owning the asset and Taxpayer Joe doesn't get adequately compensated for his risk. If the borrower stops paying the mortgage, Taxpayer Joe eats the loss. Anyone see a pattern here?

If Glaeser thinks negative expectancy bets are such a great idea, why doesn't he get a bunch of like-minded folks to form a private consortium which buys these mortgages instead of forcing Taxpayer Joe?

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 08:45:19 -0000

Marcus, I agree with you on the credit rating point. I think that it depends on how underwater they are. Their credit rating may be worth $10,000 to them but it may not be worth $200,000. The fact that bad credit rolls off after 7 years also mutes the cost of the black mark.

It'll be interesting to see the rate of abandonment relative to the differential between home value and the mortgage amount. I think that may be a pretty good indicator of how much people are willing to pay for their credit score.

Re: Good Sense on the Housing Market

Bill — Fri, 04 Apr 2008 09:55:35 -0000

Robert Samuelson makes a good argument against Barney Frank's proposal.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 12:11:54 -0000

Ptk,

You're still probably better off moving for the new job. The $200K loss in the value of your house has occurred whether you sell it or not. If you stay in the house and forgo the job opportunity, you are not guaranteed to recoup that $200K - especially not in real dollars. The cost of taking that additional real estate gamble is all the forgone benefits associated with the new job.

It may not feel like you're better off right now, but it really does look like you made the better decision. Having said that, I realize the loss in the value of your house is not exactly an enjoyable outcome for you and I hope you and your family find comfort and success in your new location.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 12:13:21 -0000

I'm sorry, the above post should have been addressed to Transplant.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 12:42:05 -0000

PTK,

Ah! The mobility option. Home buyers are short the option and renters are long the option.

Until recently, 20% down was standard. Given that model, the NPV of buying and renting is the same. The only things that skewed the equation was the lifestyle choice and the valuation of the mobility option. Zero-down mortgages made buying more attractive than renting in part because there was no need to account for the opportunity cost of the down payment. This also meant lending standards became so lax that the buyer received a free call option and a very cheap put option. If real estate prices went up, the buyer benefited. If prices went down, the zero-down buyer had nothing to lose by walking away. He can simply put the house to the lender at the relatively small cost of some reduction in his credit rating. I think that the more this happens, the cheaper that put option becomes. Mpkomara's post on the subject of relative credit scores makes sense to me. Given this, I don't think that zero-down buyers actually sold the mobility option when they purchased their houses. If that's true, then the housing effect on the mobility of labour should be more muted than one would otherwise expect. In fact, a bailout may decrease mobility. No?

Re: Unintended Lesson

Bill — Fri, 04 Apr 2008 13:08:01 -0000

This is the same Hillary Clinton who wants to create a cabinet-level "poverty czar" position? Presumably a person in such a position would have no incentive to "cure" poverty as that would cause him to be unemployed. Good thing then that relative poverty (which is what we have in the USA) is incurable by definition. That Hillary sure has a firm grip on incentives.

Re: Falling Housing Prices and Labor Mobility

Bill — Fri, 04 Apr 2008 18:15:16 -0000

Marcus, I fully accept that "walking away" may not always be as easy as I assumed. In fact, until I read your latest post, I had no idea that there were anti-deficiency laws. Thanks for the link.

I agree that it would be interesting to see if there is any correlation between anti-deficiency laws and housing bubble - particularly the effects of the bursting of the bubble.

Just thinking about it....I suppose most people are unaware of such laws when they take out a mortgage and become aware of them only when they find themselves unable to pay their mortgage, so it wouldn't effect their decision to take a mortgage. Once they discover the law, I wonder how much it effects their decision to "walk away". It would be interesting to know if the rate of people handing in their keys to the lender is lower in states without anti-deficiency laws. I expect that would depend on how often the lenders exercise their option to pursue borrowers for the deficiency. If that rate is low, then we would probably see no significant differences in the rates of "walk-aways" and vice versa. I suspect that the rate of deficiency recovery is probably low because even if the lender wins a judgment, it may not be able to collect it (these are not the most prudent and responsible borrowers after all). Thus, I suspect that the expected value of pursuing recovery of the deficiency is negative and lenders rarely, if ever, seriously try to recover deficiencies. Obviously, I could be very wrong.

Besides differences in walk-away rates, the differences in credit spreads would also tell us if the lack of anti-deficiency law has a deterrent effect. However, the differences would have to be normalized for a few effects - the unique characteristics of the housing market in each state and other laws and restriction that would impact walk-away rates and credit spreads, for instance.

Somebody must be doing this research somewhere.

Re: Unintended Lesson

Bill — Fri, 04 Apr 2008 18:22:43 -0000

Sam,

In light of your proven culinary skills, I think you are just the person to invent a recipe for "Productivity Pie". When you do, please send some to mnm and me as he would enjoy it and I'm sick to death of the shit on a brick that passes for "pie" on Wall Street.

Have fun at the muirpid circus. G'night.

Re: The Pessimistic Bias

Bill — Mon, 07 Apr 2008 07:50:43 -0000

Well done (as usual), LCJ. Muirdiot is stricken with impenetrable stupidity and insists on polluting this blog. At first I didn't think he tried to understand what others on the blog wrote (not agree, mind, just understand) but I've come to the conclusion that it's not a matter of trying. It's a matter of ability. He just can't understand. It's all beyond him. He's a moron. I do notice that he doesn't similarly pollute Rodrik's blog.

Re: Striking out

Bill — Tue, 08 Apr 2008 07:42:26 -0000

These guys need to be introduced to the word "spurious" and forced to pay back the federal grant they undoubtedly received to engage in this nonsense.

Re: Striking out

Bill — Tue, 08 Apr 2008 08:55:49 -0000

Don't be put off by your small sample size, Avatar!

These great researchers certainly wouldn't let a thing like that stand in their way!

Re: Striking out

Bill — Tue, 08 Apr 2008 09:52:26 -0000

My question is, how in the heck did anyone even think to ask such an asinine question?

Two words:

Grant money

Re: The Strange World of Harold Meyerson

Bill — Thu, 10 Apr 2008 07:32:51 -0000

In short both parents working, greater debt, less saving, greater expenses for transportation, housing, health care , day care...

Women want to work. They spent the whole of the 60's burning their bras and screeching about it. The "transportation" is more expensive because people want to live further away from cities and drive in to their city jobs in a Mercedes. The houses of today average 2,400 square feet, compared to 900 square feet in the 1950's. Day care is necessary because women decided they'd rather be paid >$0 for the thankless housework and diaper changing they were doing in the '50's. Since large houses, mercedes, daycare and health insurance stuffed full of mandates is expensive, the savings rate suffers.

If you want to live on one income, do what your parents did: live in a small house, close to your job in the city, own one modest car and lobby your state legislators to get rid of insurance mandates.

Otherwise, enjoy your mansion and your beemer and stop bitching.

Just saw 3 more houses with large yellow Orwellian Auction signs on their garages.

Pray tell, what makes a yellow sign Orwellian? In fact, what is Orwellian about an auction?

Re: The Strange World of Harold Meyerson

Bill — Thu, 10 Apr 2008 08:13:31 -0000

mmmm....I think that was tongue-in-cheek, Deryl.

Re: The Strange World of Harold Meyerson

Bill — Thu, 10 Apr 2008 08:14:47 -0000

oh. zo zorry.

Re: The Strange World of Harold Meyerson

Bill — Thu, 10 Apr 2008 09:33:42 -0000

David White,

You may act like the rest of the world doesn't exists but the rest of the world is not likely to act as thought you don't exist. And that doesn't even scratch the surface of all that is wrong with our suggestion.

Re: The Strange World of Harold Meyerson

Bill — Thu, 10 Apr 2008 10:47:26 -0000

you know, Muirgeo, a list of words and phrases separated by dots doesn't an argument make.

People took on a bigger mortgage than they could afford. Now, they have to find a house they can afford. What is Orwellian about a sign announcing an upcoming even? Do you even know who Orwell was?

Re: The Market, Not Nature, Is Bountiful

Bill — Fri, 11 Apr 2008 19:12:44 -0000

What, haven't you ever filled your children's stomachs and kept the house warm with beautiful scenery?

Yeah...we ate all the berries off the trees and then burned them in the fireplace for warmth. It was cozy.

Re: Optimal Population?

Bill — Sun, 13 Apr 2008 17:32:54 -0000

I'm so sorry if this was mentioned above and what I'm going to say is redundant as I only skimmed the comments section.

There seems to be a resurrection of the panics of my childhood. Running out of oil (oil is infinite, but not at a given price), overpopulation and the destruction of the environment (although, the air is cleaner than it was in my childhood).

The earth can't become overpopulated. Full Stop. In addition to the professor's points, here are some thoughts.

Starvation doesn't happen overnight. A billion people aren't born overnight. If we can't grow enough to feed ourselves, women will drop to a weight too low to either get pregnant or will not get enough to eat to maintain a pregnancy. Birth rates will drop to a sustainable level. The mass famine scenario is BS because it assumes a.) no world food market and b.) that the population boom happens overnight and the food and water runs out suddenly. Total BS. But these are sort of old population controls that happen in underdeveloped countries.

Prosperity seems to be a natural population control. Prosperity raises the opportunity cost of bearing children. Prosperity is correlated with lower birth rates, much smaller families, consequently slower population growth.

Developed countries are characterized by smaller families and long lives while underdeveloped countries are characterized by large families and short lives.

Higher population does not equal more wealth. Higher productivity equals more wealth, but, it seems to have the side effect of slowing population growth and creating better technology to sustain that population.

Re: Optimal Population?

Bill — Sun, 13 Apr 2008 17:46:10 -0000

One more point. These bastards who claim to want a smaller population on earth continue to reproduce. Then, they encourage their "cancer of the earth" children to give them grandchildren. Um....what? Lead by example and stop sowing your seed, for chrissake!

Re: Optimal Population?

Bill — Mon, 14 Apr 2008 05:41:01 -0000

But I'm certainly on the sceptical side that more people equals more wealh. - Gil

Gil,

You seem to suffer from the muirpid syndrome - an inability to process information and an inability to write in English (despite being a native speaker). concentrate for a minute.

One more time:

More people does not equal more wealth. If that were true, India and China would have the largest economies on earth. Productivity equals more wealth ("productivity" is not synonymous with "population"). And don't point to Marcus' post as as proof that someone here is arguing that more population equals more wealth. Marcus' post argues that more population equals more wealth only if that population is more productive ("....the contributions exceed the consumption...").

Further, while there may be non-manmade food shortages on a regional basis, the ability to transport food from one country to another will solve that problem. Mass worldwide starvation is the stated fear of the overpopulation alarmists. That can't happen, barring a catastrophic worldwide event. But then, starvation won't be due to overpopulation but due to the catastrophic worldwide event.

Re: No Cause for Pessimism

Bill — Mon, 14 Apr 2008 06:30:43 -0000

Paleo,

Yet, all journalists crave an utopic stationary state in which everyone has health insurance, a good job, a new car and has sex on weekends.

Oh, surely not! In a career based on bitching and moaning, certainly utopia can never be utopian enough.

Re: Optimal Population?

Bill — Mon, 14 Apr 2008 06:38:32 -0000

Marcus,

We are in complete agreement. In the case of the Chinese, "their people were hardly free to innovate" could be changed to "their people were not free in any way - full stop." It's just amazing what happens when you free the slaves from the shackles of such "smart" central planners, isn't it?

Re: Optimal Population?

Bill — Mon, 14 Apr 2008 07:59:17 -0000

"Socialist strawmen slavers"

Do you mean "socialist straw man slayers,/i>"?

But the undercurrent I keep getting is that people here like more and more people.

Gil, that is an undercurrent in your own mind. The point people here are trying to make (and I will be swiftly corrected if I'm wrong) is that nobody can determine the optimum earth population size, since nature has some natural and non-catastrophic population controls of her own, we're all for letting people decide the size of their families without outside interference.

Re: Optimal Population?

Bill — Mon, 14 Apr 2008 08:05:47 -0000

turning off italics

Re: Manufacturing and Employment

Bill — Wed, 16 Apr 2008 06:46:37 -0000

Even with all those poor immigrants skewing the numbers.

...and benefits becoming a larger portion of total comp.

Re: Shughart on Bailouts

Bill — Wed, 16 Apr 2008 08:45:58 -0000

Interesting discussion. Is it possible that concepts of "Rule of Law" and "regulation" are conflated?

Re: People Harmed by Capitalism or by "Green" Policies?

Bill — Thu, 17 Apr 2008 05:58:45 -0000

Marcus,

Government caused the problem in the first place. These "green" policies are anything but. There may be opportunity, as you point out - but to rent seek, as all of this stuff is subsidize. All this opportunity causes more harm to the environment. Expanding "renewable" fuels means more deforestation to clear the farm land necessary to grow "renewable" energy. But what else can we expect from government subsidized inefficiency?

Re: Dangerous Expansion of the Fed's Power

Bill — Thu, 17 Apr 2008 07:01:21 -0000

Marcus,

Since that time, investment banks have become a significant cornerstone of our financial system. To not provide them with the liquidity they need to survive such runs seems rather naive to me and certainly ignores the lessons Milton Friedman taught us.

You're propagating the fiction the government is using as justification to expand its power. Investment banks are basically doing the same thing they've always done. They are not depository institutions and grandma and grandpa aren't about to launch a run on them. Their creditors may push them into bankruptcy, but so what? The market might suffer for it but since when has the U.S. economy been defined as "the stock market"?

The Fed's new mandate ensure "stable markets" can only be accomplished by restricting growth, innovation and flexibility. Is this really a winning formula?

The only way for the Fed to try to stabilize the market is through price floors and caps. However, price caps will not prevent bubbles - if a price cap is set too high, there's still room for a bubble. Setting it too low will create shortages. If price controls worked, Europe and the USSR would have surpassed the U.S. in economic growth. In essence, market stability is not that much different from a fully planned economy, only through indirect means.

Incidentally, I think it's a mistake and an abuse of the Fed's power to allow investment banks to belly up to the discount window.

Re: People Harmed by Capitalism or by "Green" Policies?

Bill — Thu, 17 Apr 2008 08:00:46 -0000

When I wrote about opportunity I was referring to the higher fuel prices truckers are paying, not the food costs.

Thanks for the clarification. I thought you were talking about the not so green "green" alternatives. However, in terms of petroleum too, government has a hand in driving up pices. Note the onerous regulations and prohibitions on drilling imposed on oil companies which serves to reduce supply.

Re: Dangerous Expansion of the Fed's Power

Bill — Thu, 17 Apr 2008 12:05:56 -0000

Marcus,

I started writing a response but I don't think I can respond properly until you qualify somethings. I don't actually agree that cheap money is the root of all evil nor does the Fed control the interest rate (if that's what you're getting at).

Please define "cheap money" (this is a relative term) and what you think causes cheap money. Because, there's more than one way to get to cheap money and the only remedy for some cheap money is more regulation.

Re: Dangerous Expansion of the Fed's Power

Bill — Thu, 17 Apr 2008 13:28:28 -0000

John V,

Who are you going to regulate?

Not "who" but "what". The answer: spreads. The interest rate at which money is borrowed is the risk free rate plus a spread. Regulators can set floors and caps on those spreads. Price controls on money. That's what I meant.

The Fed drives cheap money with the low rates it charges to banks to keep the good times looking like there still going. There's no need to control anything other than the interest rates which drive lending. Banks respond to the bait.

John, you focus on low rates but the rate at which the Fed lends to member banks is only one tool to manipulate the interest rate (you call it price controls, and I call it market manipulation - either way, it's central planning). There is absolutely a way to allow the market to set the rates on its own - don't allow a central bank to centrally plan interest rates. It's too obvious for a Nobel Prize (although the Goracle got one for utter BS, so who knows). People are perfectly capable of deciding how much they're willing to borrow and lend, for what period of time and at what interest rate without Big Brother Bernanke dictating to them.

We can go round and round with the Fed thing all day. The fact is, the very existence of the Fed changes behaviour - as does the government and its past bailouts. so, it's difficult to determine how much of any outcome is attributable to any one factor, including the Fed. The real problem is the central planning of the central bank.

One surprising thing about recent events is that the recent Fed actions haven't had their historical effect. Coincidentally, I stumbled on this article by Robert P. Murphy just today. It's an interesting read and very topical.

Re: People Harmed by Capitalism or by "Green" Policies?

Bill — Thu, 17 Apr 2008 13:35:24 -0000

you can't even speak up in public for fear of total social ostracism.

Fear? I welcome ostracism by these asshats. I was once treated to a morning of glaring when it became known that I was an evil non-Marxist. I glared back - that put an end to it. They can dish it out, but they can't take it.

Re: Dangerous Expansion of the Fed's Power

Bill — Thu, 17 Apr 2008 18:05:03 -0000

I figured we were probably on different parts of the same page, John.

Sam,

I'm not sure what you mean by: "I think 'cheap money' refers to any monies created, by the government obviously, as a substitute for raising taxes such that the money loses value." would you mind clarifying that?

Re: Dangerous Expansion of the Fed's Power

Bill — Fri, 18 Apr 2008 08:40:24 -0000

Marcus, thank you for that clarification. I rather enjoy "talking" to you. I always learn something or I'm forced to think about a subject in a different way.

I understand the Fed does not directly control interest rates. But that is rather moot as the Fed certainly has the power to influence rates to be where they want. - Marcus

Certainly. If banks don't lend to each other at the target rate, the Fed can engage in open market operations and term it facilities auctions. If that doesn't work, it can launch a public campaign to reduce the stigma of borrowing directly from the Fed. If a private party were engaged in this kind of market manipulation, it would be completely illegal, but the Fed manipulating the market is A-okay. It's disgusting. I agree with you.

I think I understand what you mean by root problem now: 1.) we have a Fed and 2.) the Fed's specific mandate - by any other name - is to manipulate markets. Am I correct?

I also agree that if the Fed drives down the short term rate to below inflation, people are forced into higher risk, higher return investments - whether it's longer maturity bonds or stocks.

However, the Fed is not the whole interest rate story either. The Fed (to Greenspan's endless annoyance) could not control long term rates. In addition, credit spreads were tightening across maturities and across credit quality before the Fed lowered rates in 2002. There was a willingness among market participants to discount risk to (what I think are) ridiculous levels and accept much less compensation for risk than they traditionally have. That would be, as you put it, "another private party offering up their hard earned capital for less".

Thus, I can't completely agree that what's happening is not, at least in part, people just offering up their own capital at a lower price. It's not all Fed driven.

Of course, there might be an argument that the Fed's lowering of interest rates encourages more borrowing in general and forces lenders into unnaturally fierce competition. That wouldn't necessarily explain the tightening of credit spreads before the Fed lowered rates in the early 2000's, though. So, that component of cheap money was market driven.

Re: Dangerous Expansion of the Fed's Power

Bill — Fri, 18 Apr 2008 09:14:21 -0000

Martin,

I completely agree with your list of fallacies (especially fallacy #1). I also agree that a lot of people on Wall Street are not worth what they're paid. But, I'm not the one paying them and it's not my business to dictate to the private individuals who are.

You're over focused on investment bankers and you assign to them a job they don't have on Wall Street (although, Shughart makes the same mistake). You both may just be talking about investment banks in general but it's worth taking a look at the various incentives on Wall street. Investment bankers are not paid to shoot craps. Some but not all Traders are. As far as I can tell, investment bankers are paid to convince not so bright company management to do mostly wealth destructive deals for a fee. Their individual compensation is loosely based on how well the bank does as a whole, how many good deals they can take credit for, how many bad deals they can blame on their subordinates and how well they can identify the right ass to kiss and how subtly they can kiss it. But they do all this in really pretty suits.

Traders in investment banks are loosely paid based on how well the bank does as well as their own P&L. Depending on how big their team is, they may be able to play the same political games as investment bankers at comp time.

Proprietary trading concerns on Wall Street eat what they kill. Hedge funds also, but to a lesser extent as they're able to soak their investors for fees.

There is a lot of incentive to take massive beta risk (unhedged long or short positions) and hope for the best. If you blow up, it's not your money and if you win, you get a huge cut. But good traders and portfolio managers hedge their beta risk and actually generate alpha (there aren't a lot of those). No matter how smart you are, you cannot know the future. The only think you really have control over is the amount of risk that you take. Smart investment banks, investors in hedge funds and prop shops ask a smart question: why should I pay more for a higher return if the risk taken to get that return is also proportionately higher? A smart investor looks at risk adjusted returns. There aren't a lot of smart investors (if there were, there would be a lot fewer hedge funds).

Re: Dangerous Expansion of the Fed's Power

Bill — Fri, 18 Apr 2008 13:13:22 -0000

Do you have data to support that? The Fed began lowering rates in 2000 and by the end of 2001 the Federal Fund rate was at 1.75%.

Marcus, I'm sure really good data is available somewhere. I just don't know where as fixed income research is not my primary occupation. I think it would be quite a big project as spread tightening was a worldwide phenomenon.

That said, these are some pretty good graphs. Unfortunately, it would be nice to have data from before 1999 to at least 2007, but this will have to do for now.

Fed Funds Rate graph

Note that credit spreads were very low in 1999 (when the Fed Funds rate was around 5.00-5.75%). They widened in response to the bursting of the dot com bubble and 9/11 (as the Fed cut the Fed Funds rate from above 6% to below 2%, although they were still pretty low). Credit spreads began to tighten again in the beginning of '03. The graph ends in '04 but spreads continued to tighten, reaching historically low levels in mid-2007 - roughly three years after the Fed began to increase short term interest rates again.

I don't disagree that the curve trade you describe in your hypothesis at least partially explains what happened - especially since that curve trade is the basic business model of a bank. I disagree that the Fed was entirely responsible for what happened. BTW, I hope you appreciate that you've hit upon a very deep and complex issue here. My only hope is to add to the discussion, not to figure out what happened - they might be forced to give me the Nobel Prize if I figure it out :)

There are some things to note in thinking about this. Historically, the supply of short term lenders has outstripped demand for short term borrowing and continued to do so until the default rate at the long end increased and short term creditors cut off the spigot. Did the fed's lowering of interest rate have an effect on demand for short term credit? It must have. Did the Fed's subsequent increase of the short term rates have an effect on default rates at the long end of the curve? I'm not sure it did because the Fed can't control long term maturities (as Greenspan so often lamented). The more likely explanation is that looser lending standards (particularly lending to people without checking to see if they actually had a job) lead to higher default rates.

So, historically, there has always been an almost unlimited supply of short term creditors - much more supply of ST credit than demand for it. The curve trade is a money making proposition as long as the short rates are lower than the long rates. A Fed rate cut would steepen the curve, all else held constant. This would make the curve trade that much more attractive. We know that the spreads at the short end tightened much less than the spreads at the long end, flattening the curve. This could very well be because, institutions took advantage of the enormous supply of ST credit to lend long. A jump in supply of long maturity lenders, drove down the credit spreads for those maturities. In their competition for borrowers, they not only decreased the rate at which they were willing to lend but also who they were willing to lend to. You see the obvious problem with this. Suddenly, they were lending to people who had no chance of paying them back and defaults rose (remember that people whose interest rate had not yet adjusted began defaulting because they were given a mortgage they couldn't handle at any interest rate). As defaults rose, short term lenders became worried that the collateral they were lending against wasn't very good and they cut off the credit spigot. They demanded higher credit spreads and the curve flattened further, so the trade became less profitable. How much did the Fed effect that? The Fed did not flatten the curve by lending at the long end of the curve to anything that had a pulse. The Fed is not responsible for the almost endless supply of short term creditors. I completely agree that the Fed always exacerbates the problem by interfering in the market. The Fed definitely contributed to further curve flattening toward the end by driving up ST interest rates. But I can't agree that it solely responsible for what happened, as you imply in your hypothesis. I specifically disagree with the part of your hypothesis that attributes mortgage defaults to the increase in the Fed Funds rate.

Here's what I wonder: given that short term credit was always so available, why the sudden interest in the carry trade? I suspect that part of the answer is that so much wealth was created worldwide in the 1990's, that it was difficult to find investments - especially after the dot com bubble burst. The sudden jump in demand for the curve trade may be a result of capital looking for an investment.

Re: Dangerous Expansion of the Fed's Power

Bill — Fri, 18 Apr 2008 19:10:24 -0000

Gracias, Marcus. As usual, you raise difficult questions - just in case you decide to check back here some time this weekend and I don't have time to post later:

Yet, it begs the question. If there was so much money looking for a home then why did the Fed have to lower the Federal Funds rate so much?

You're asking for a reason and all the Fed can ever offer you is an excuse for its behaviour! Dropping the short term rates suddenly steepens the curve and makes the carry trade more profitable and the reason the Fed does that is to bail out monkeys who got in too deep and took on too much risk. There's what I think is the reason. The horrible shock to the economy caused by the dot com bubble bursting, a "low" (read: fictitious) inflation rate, and the attacks of 9/11 were the excuses the Fed used to drop short term rates. Who knows? Maybe the Fed didn't want to seem as if it were doing nothing as people "reeled" from these "crisis". My answer to your excellent question is: the didn't have to lower the Fed Funds rate that much at all. Just my opinion.

But again, if we take a step back I think we'll see that the mortgage companies were simply responding to demand. Demand for MBS.

Right - keeping in mind that what I call supply of lenders you're calling demand for MBS.

So while some of what they did may have been unscrupulous, I don't see how we can pin them as the source of the problem.

I'm not sure I would necessarily call it "unscrupulous", I prefer to call it "stupid". To the extent that they decided to compete in this market as the risk increased relative to return, I think mortgage companies can be blamed for that decision. But, obviously, I agree that they are not solely responsible for the free for all. Also, I'm not sure that there is one source for this problem and I'm not sure if we'll ever be able to identify all the sources. But you and I have given it a good try here.

Still, speculation only works when the cost of money is less than the anticipated return on assets...

Ah! But that's what we've been talking about, isn't it? The returns were positive (the curve was not completely flat) - the risk they were taking to get those returns was way out of proportion to the actual realized returns. And I assure you, they DID anticipate positive returns on the assets. That's why they lent (bought the loans). You rightly call it speculation. However, they didn't think it was speculation. They thought it was (and I quote more than one hedge fund manager here) "like cash" (I kid you not). They completely under-priced risk. Actually, I think the credit spread link I provided was to an analyst report and, upon skimming it, you'll find that the thinking was that risk was fairly priced - as spreads were tanking. That was pretty common thinking back then.

I'm not blaming the Fed for defaults on mortgages any more than I'd blame a person who's holding on to a money market which underneath has purchased some holding of mortgage back securities.

I didn't mean "blame" in that sense. I meant that I didn't agree that the Fed raising interest rates lead to defaults (which is what I assumed you meant by "people left holding the bag).

Also, while I'm sure that some people were pushed out of short maturity lending because of interest rates that came close to historical lows, that effect was probably insignificant. This is because the supply of short maturities has always been so huge and it didn't diminish to any noticeable extent as rates dropped. Perhaps some private individuals sought a higher interest rate, but private individuals are a drop in the bucket. The overwhelming majority of demand for short term paper comes from institutions that need to park money for a very short period of time. A mutual fund's cash reserves, a hedge fund's cash reserves, an investment bank's short term cash reserves, for instance. The money may be deployed (either returned to investors or used to purchase assets) in 30 days, so liquidity is essential, but the company still wants to earn interest.

The demand for MBS was also not directly driven by individual investors. That demand came from institutions that did the carry trade we've been discussing. Of course, some investors were invested in funds engaged in this sort of thing, so there was indirect demand.

One of the questions we will never be able to answer but is interesting to think about is: If the Fed had not dropped the interest rate, would risk seeking behaviour have spiked anyway? I think it probably would have because the collapse of the stock market bubble lowered returns sharply but expectations of future returns were slower to adjust. In response, money managers took greater risks to augment returns. That's my guess.

I've had a great time talking to you about this. Than you. I'm going to be working all weekend but I do hope we get a chance to talk about this again at some point in the future. I'll check back later in case you decide to write a response to this post after all. Have a great weekend.

Re: Unreasonable Reasonableness

Bill — Thu, 08 May 2008 16:35:15 -0000

We seem to have forgotten that those who had lost their jobs making things like wheelchairs had other good paying alternatives. Where are those kinds of jobs today?

Not true.

If the people making wheelchairs had better alternatives, they wouldn't have been making wheelchairs. Therefore, the elimination of those wheelchair making jobs meant that they had to accept less desirable jobs. Yet, somehow, they and their offspring survived to bask in the glory days of the 1950's & 60's.

Of course, it's very telling that you find these to be the glory days. You are not a woman and you are not black. Did it ever occur to you that not all women were so enamoured of the economic opportunities they were presented with (read: none)? That is, not all women delighted in the changing of crappy diapers and serving you single-earners your meet and potatoes night after endless night. And, of course, it's difficult to compete for jobs if you can't even drink out of th same water fountain as whites. Ah yes, the glory days of yore. Something tells me that your life today is filled with so much more material wealth than it was in the days of your fictionalized youth. We all get sentimental in our old age. Just don't let it cloud your perception of reality - both then and now.

Re: Sweatshops

Bill — Fri, 06 Jun 2008 13:32:59 -0000

I was lucky enough to attend a talk Ben Powell gave on the subject of immigration in NYC about three months ago. He's a credit to the GMU economics department.

...can continue to espouse a moribund theory about child labor. Those kids lives are being wasted; they should be in school getting an education;...

Children work when the alternative isn't an education but starvation. If these kids didn't have sweatshops to work in, they would be sold into slavery or prostitution or just starve to death. It's all well and good for people like you to indulge outrage and moral indignation with a full belly from the comfort of your computer, but if your choice is work, slavery, prostitution or death, you'd choose work. And the point is, these people CHOOSE to work. Nobody is forcing them.

...you lazy poor slobs with addled Hayekian fascist brains.

I guess it's too much to expect you to understand that the real fascist is the one who would forcefully impose his singular vision on everyone else without regard to the cost. In other words, Trumpit, the real fascist is you.

Re: On Women and Assets

Bill — Fri, 06 Jun 2008 13:52:02 -0000

I offer a different reason: women are more decent than men....

women are less willing than men to perform the countless asinine stunts and soul-shriveling pandering necessary to win political office.

HA! BS, Professor. Obviously, as a man, you're not in the inner circle of women.

Women (if you'll pardon my generalizing, I'll pardon yours) are all about politics. I've rarely met a woman who says what she means and means what she says. They are masters of soul-shriveling pandering and asinine [political] stunts. I've never been in more treacherous waters than sitting in a circle of women. Women are mean girls.

This is why I prefer to work in with men in a male dominated industry. Men are aggressive but straight forward and I would trust my husband, my male friends and colleagues before almost any of the women that I know. And I am as rare a woman as a woman in politics - I am a female trader.

Please don't make sweeping asinine generalizations about the purity of women's souls. For one thing, women are individuals. Some of us are decent and some are b*tches. The reason more women don't go into trading, politics and other aggressive, male dominated professions are varied. The biggest reason is that these careers demand so much time and energy that they are not conducive to pregnancy (bearing children is physically difficult and dangerous). Often, women choose family over career if the career interferes too much. So, they tend to either drop or stay away from careers that are too demanding not because of decency but for practical reasons. Make no mistake, though, women are masters of politics. If they weren't master manipulators, how would you explain your impression that us (or is it "we"?) girls are all sweetness and decency?

Re: The Tragedy of Elian

Bill — Mon, 16 Jun 2008 17:03:28 -0000

A number of pundits at the time of Elian's return to Cuba talked about how he was lucky not to grow up in such a materialist society as America's.

Let's make some key observations about said pundits:

1.) People, including Elian's mother, routinely risk their lives to escape to this materialistic nightmare we call the U.S.

2.) People do not risk life and limb to float a leaky inner tube to Cuba.

3.) Note that the Pundits' @sses are firmly planted in this materialistic horror with no plans to escape to Chavezland or Cuba.

Telling. No?

As a refuge from the Soviet Union and as a person who has lived in a communist utopia (and who is still close to the family that remains there) and this materialistic nightmare, let me assure you: Elian would have been happier here. If part of human yearning is to live without constant fear, then he would have been happier here. If it is to have hope, he would have been happier here. In Russia, even those who had no basis of comparison were not happy because you don't have to experience freedom from oppression and fear to want it. That's why so many with no knowledge of the outside world risked their lives to escape.

As for the horror of materialism, there is no more materialistic place on earth than a place where people are forcibly denied material wealth. In the Soviet Union people inflicted unimaginable horrors on their fellow man to obtain some extra butter, a loaf of bread or a room in a communal apartment with a couple more square feet than the one their family was already assigned to. People killed each other, accused their neighbours and even family to the KGB and NKVD of "crimes against the people" just for a bit of material comfort at which most American welfare recipients would turn up their nose.

Only the completely ignorant, hopelessly idealistic and completely blind and stupid could possibly justify Elian's return to his Cuban hellhole. Living in a country like Cuba is worse than death. And that is exactly what the countless dissidents and refuges from China, Cuba, the Soviet Bloc are telling you when they risk their lives to leave.

Oh, and in case anyone thinks we were poor peasants. My family was of a "privilaged" circle in Russia - making our lives both materially easier in the Soviet Union and our request to leave more dangerous. My parents told me many years after our immigration that they honestly put the probability of being arrested and shot at 70% once we became dissidents. They decided that it would have been better for us to die (although, that was obviously not the outcome they hoped for) than to continue to live in the Soviet Union. Having observed what happened to the family that remained, I agree.

Re: The Real Life of Low Carbon-Footprint Locovores

Bill — Mon, 16 Jun 2008 17:39:12 -0000

"we must do something about our 'carbon footprint' before the oceans rise twenty feet and we all live in a horrible Kevin Costner movie!" - Brotio

I am no carbon footprint fanatic, but there is no price I'm unwilling to pay to avoid a Kevin Costner movie!

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 08:22:38 -0000

"Far better to live in a land where the slave collar is light and the leash is long than in one where the collar is thick raw iron and the leash is a logging chain." - Vidyohs

Exactly, Vidyohs. And if people don't understand that by observing the risks people too and take to escape scenic Cuba, the glorious East Germany and blessed Mother Russia, then there's nothing we can do about it. If they're blinded by stupidity, they're beyond help.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 08:27:36 -0000

I'm not sure if this has been brought up - I haven't read some of the posts.

We don't actually know what Elian's father wanted. We don't know what kind of gun Castro was holding to his back and to the backs of his father's family. So, let's not jump to conclusions that his daddy got anything near what he wanted for Elian. As I remember, his father held some high up job, making him more susceptible to coercion and more important for his son to return to the craphole that is Cuba. And...it's a F#cking craphole. Don't kid yourself. My dad spent a lot of time there.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 09:51:35 -0000

Your dad spent time there before coming to the U.S.? My own government forbids my travel to Cuba,

Bully for you (not really, I'm not for that restriction on the travel of American citizens). If you read my posts, you would know that my family and I hail from the Glorious Communist Union of Soviet Socialist Republics. Cuba was the USSR's ally and my father spent a lot of time there while on business before we escaped from the Soviet Union. His conclusion: very pretty. Nice weather. Otherwise, same craphole as Russia. I'm thinking my father is more qualified than you to make a comparison.

I know EXACTLY the guns that communist countries hold to the backs of the their citizens - particularly in embarrassing cases like these. Of the two of us, Martin, I think I have a much better idea of how those countries operate and you're just shooting in the dark.

The rest of your post is a standard defense presented by "useful idiots" upon whom the communist party relied to perpetuate its murderous kleptocracy. Congratulations. You know I don't think you've been shortchanged in the IQ department, Martin, but if you're going to behave like a useful idiot, I'm going to call you out on it.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 11:02:08 -0000

Why oh why do you insist on playing the role of useful idiot, Martin?

I'm not denying it. I think Elian's father is more qualified to decide Elian's fate than you are.

In a country where one is free to speak freely, we can make a reasonable assumption that what the man says is what the man thinks. In a country where one cannot speak freely, we cannot make that assumption. You have no proof that he wasn't coerced. I'm merely pointing out that, knowing what I know about communist countries, we don't know if his stated feelings are his true feelings and if this decision was entirely his to make.

Which brings me to another point. You said: He's a waiter in a restaurant. He's also a member of the Cuban National Assembly now, but he wasn't then.

I've seen people sell out their children, their mothers, their siblings for far less than a seat on the National Assembly. Favours from a dictator are pretty powerful incentives for a person living in a country where one can get ahead in no other way than to step on people to curry favour with a dictator. I don't think you understand exactly what life is like for these people and the trade-offs they make in their daily lives.

So, you may be right. Elian's daddy may have been promised all manor of material incentives to bring the child home. They stood to personally benefit from this international win for Castro. Thus, his father's stated feelings are his real feelings. In that case, I don't think he was better qualified than I to decide where Elian lives because the very last thing he thought of is his child's welfare. If you use your child as a pawn to get more goodies, you are not a qualified parent, IMO. I realize and I'm happy to know that most people in the West have a hard time imagining a parent behaving that way. But, I also know that selling your children into prostitution and modern day versions of slavery is not unheard of in my home country. Neither is taping newborns' mouths so that nurses don't hear them crying. When people are treated like beasts, they turn into beasts.

I know you said that children are property to be disposed of as the parent wishes, so we may just have to disagree on that point. I believe that it is our responsibility to protect the freedom of those who are powerless and unable to take care of themselves - children and crazy people.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 14:51:25 -0000

I don't believe it was. I believe that Juan Gonzalez wanted his son back in Cuba with his two grandmothers after the boy nearly drowned in the Atlantic along with his mother.

Who cares what you believe, Martin? Every one of your posts can be summed up thusly: "it doesn't matter what you believe, without iron-clad proof all you say is so much irrelevant bullshit." If our beliefs about what happened are irrelevant BS, so are yours.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 14:58:51 -0000

Your concern is exclusively political.n. - Martin

Again, don't be a useful idiot, Martin. Put that copious IQ to work. It's not about my politics. It's about protecting a human being's right to freedom versus condemning him to a lifetime of slavery to the state. Just because that human being hasn't reached the age of majority doesn't mean he is free to be condemned to slavery.

I haven't suggested that he was promised anything.

No, you didn't. I did.

He became a member of the national assembly several years after the event as a matter of fact.

Um...exactly my point.

Re: True Progressivism

Bill — Tue, 17 Jun 2008 15:09:40 -0000

"I'm a big believer in evidence. I'm a big believer in fact...."

Oh, good Lord! When I read that I thought it was a parody taken right off peoplescube.com! Did Barack actually say all that with a straight face.

In his book, The Audacity of Hope, Obama writes that workers have been receiving a decreasing share of profits.

Nice, eh? Karl Marx repackaged for the 21st century.

This guy is a disaster. I just hope that if he gets elected and he gets a dumbocrat congress too that they screw things up so badly that we get a massive backlash. And in this one endeavor, I have every confidence that the Obama and the dumbocrats are fully capable.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 15:16:02 -0000

I don't pretend to know all that you must pretend to know about Elian's life in Cuba.

No, Martin, you BELIEVE and we all know that's much better than KNOWING.

No, parents have rights that yield only to very persuasive and powerful evidence of harm to their children. The burden of proof is yours.

Life as a slave to the state sucks worse than a life of freedom. Slavery is harmful. A parent who chooses slavery over freedom for his child is harmful. The choice his father made was harmful.

I have no similar burden.

Yeah. I notice you like to exempt yourself from burdens that you claim others should shoulder. Must be nice.

I'm having a hard time taking you seriously right now, Martin.

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 15:26:22 -0000

Of course, it's about your politics.

Well, if you say so. Because who would know more about me than you?

ME: It's about protecting a human being's right ...

You: What's his middle name? How tall is he? What's his favorite food? Is he allergic to anything?

If I knew his middle name and that he had a crooked toenail on his middle toe on his left foot, then I could fight to protect his right to live in freedom. If, on the other hand, I don't know any of those things but know his case, then I have no right to stand in Castro's way as he comes to collect his property. Gotcha. If you are unjustly imprisoned, I would have no right to ask for your release because I don't know what kind of cookies you eat as a snack and I don't know anything about your allergies - except your allergy to logic (but I don't think you'll find that enough). Makes total sense.

Let's see. His father doesn't want your protection, and neither of his grandmothers want your protection, and he's now fourteen and doesn't want your protect...

Let's see. How do you know all that? That smells an awful lot like pretending to know all about the "real Elian" and all about his glorious life in Cuba to me, Martin. Pray tell, how do you happen to know all this?

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 15:30:30 -0000

Martin,

It has been hilarious as usual. V.I. Lenin, Stalin, Castro, Chavez, etc. all relied on folks like you to survive. Of course, folks like you never understood that they were useful idiots who shilled for the state without realizing they were shilling for the state. If they did realize, they would cease to be useful idiots. That happened, so I have hope for you yet. Unfortunately, I'm deeply disappointed with you right now, Martin. I must now go and work off that deep disappointment at the gym. Ciao!

Re: The Tragedy of Elian

Bill — Tue, 17 Jun 2008 16:15:22 -0000

...If I don't, I owe you $10,000. If I do, you repay me for both tickets. Deal?

Okay, first of all, I don't roll out of bed for less than $500,000. Second, it'll take a lot more get me to both roll out of bed and take a trip to Cuba.

It's what they say. Their own testimony is my evidence.

If I put a gun to your head and forced you to say that you believed you were the prettiest ballerina in the world, then we should all believe that you think that because you said it. How do we know that there's a gun to the family's and Elian's head? We don't. But we have tons and tons of evidence that these regimes do just that. The probability is high. So, because you don't know what these people really think and you're only going off what they stated publicly, your evidence is suspect and not worth very much. Before you go off the deep end again, I don't know for sure either (you'll ignore this bit in your response, I'm sure) but I'm not willing to accept your evidence on its face because it would require me to ignore a mountain of evidence that families are routinely coerced in these situations.

but Elian himself declares allegiance to it for the moment..... "Slavery" is your hysterical description of a condition that Elian himself expressly accepts.

A.) how do you know that he accepts what he says he accepts?

B.) you just made a giant case for children not being allowed to make their own decisions until they reach the age of majority. Did Clinton ask Elian what he wanted before he sent him back?

When Elian reaches the age of majority and ceases to accept his life in Cuba and may not leave the country, you let me know.

What? Now we're back to the age of majority? Okay. Of course, like all the other Cubans boarding rafts in the dead of night to float to Miami, he'll totally just be able to leave if he wanted. You have no clue what it is to become a dissident in a country like Cuba. Morons used to come to the Soviet Union, observe select locations under close observation and come back to the U.S. extolling the virtues of communism because they didn't see any of the horror that refuges described. They even called us refuges "disgruntled". You remind me of these people, Martin. Sadly. Very sadly.

I'm going to rename this thread "The Tragedy of Martin" in honour of you. Imagine sad music playing in the background as I type this in my gym clothes. I will now have to work out an extra hour to build up enough endorphins to offset my disappointment in you. Thanks a lot.

Re: True Progressivism

Bill — Wed, 18 Jun 2008 08:40:11 -0000

And, just try to immigrate there. The Norwegians are too smart to let the rest of us in.

Indeed. Zero-sum societies really can't afford immigration.

Semischolastic,

That's a very nice quote and you happened to cherry pick a portion of a speech in which Obama does what politicians do best: Talk a lot and say absolutely nothing. The devil's in the details. HOW is he going to embrace the future? WHAT does he mean by "progress"? Etc. When you see quotes that are specific - like the ones you claim were cherry picked - the picture changes.

This reminds me of Bush constantly yapping about smaller, less intrusive government while never meeting a government spending bill or a bill that constrains freedom he didn't like.

I think our best bet is to split the kids up. One party gets the legislative branch and the other gets the executive. Seems to yield the best result.

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 06:53:23 -0000

Be worried, Don. A recent poll of the too young to remember the 1970's and the cold war but old enough to vote crowd yielded disturbing results. The majority (don't remember the percentage but do remember being disturbed by the high number) believe oil should be nationalized. Many, having never been to Europe, believe Europeans are wealthier. I'm expecting the worst (from both Obama and McPain) but hoping for a massive Reagan-era type backlash to follow.

Re: Silly Proposal

Bill — Tue, 24 Jun 2008 08:53:50 -0000

Great. Our choice this year is a Republican idiot or a Democrat idiot.

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 09:12:46 -0000

I think it is a bit unfair to talk about the foolishness of Americans in supporting Obama without mentioning what their alternative is.

True. The alternative this time around even less palatable than usual.

the alternative is McCain, heir to the Bush administration....If the Bush administration doesn't qualify [as really bad ruler], what does?

I can't say I prefer Bush either. But Obama is heir not to the Clinton administration (constrained by a Republican congress) but to the socialism of the Carter administration (unconstrained by a democrat congress). As someone who lived through that once, I don't wish to do so again. Personally, I don't love McCain either but splitting the legislative and executive branch between the two parties seems to yield the best results. For these reasons, I prefer McCain.

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 10:37:11 -0000

Matt, I understand your feelings about repudiating the last eight years. However, repudiating them by turning to something worse isn't going to make things better.

Please don't even get me started on Nixon (price caps) and Burns (cheap money! Come and get it!)! Carter came up with some "brilliance" of his own - the gas lines of the 70's were pure Jimmy Carter price controls, for example. Let's not forget his windfall profits tax which led to more dependence on foreign oil either. Not to mention, we have Jimmy to thank for the current state of Iran. Iran and the Shah of Iran were American allies. The Shah's regime was dictatorial and unpalatable, no question. But Jimmy couldn't differentiate between a bad dictator and an even worse one. So, now we have Iranians living in a situation worse than they were in under the Shah and the world is worse off too. I could go on, but you get my point.

All presidents inherit the good and bad policies of the preceding administrations. Thus, it would be a mistake to credit the peace dividend and a strong economy solely (or even mostly) to Clinton. Just as it would be a mistake to blame Bush (although it pains me not to blame him entirely) entirely for poor intelligence and things coming to a head in 9/11 and the frenzied response. After the cold war, Clinton decided that the world will live magically in peace for eternity and proceeded to hack and slash military and intelligence spending to the point that there were virtually no speakers of Arabic in the intelligence department. He also completely ignored the Osama bin Laden issue. Certainly, Jimmy inherited the same good and bad as other presidents. But, if you're not willing to cut Bush any slack, why would you cut Jimmy any?

Jimmy and Barack have the same socialist ideals and the same economic policy ideas to deal with oil companies and the evil rich and turn the same blind eye to threats to American security. I know you don't want to be in perpetual war (who does?), but ignoring someone who is coming after you is not really the best solution. That's usually the thing that leads to all out war.

You already said that ideally, you would split the branches between the parties. If that is ideal, why not vote that way? Is your repudiation of the Bush administration really worth doing something that you admit is suboptimal.

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 11:13:04 -0000

Hey, Sam! Nice to see you at the Cafe again. I don't think Clinton was cutting Arab related intelligence specifically. I think those departments just got hacked and slashed as a result of general cuts.

Last time I was at the Cafe, you were in the midst of "Meltdown". What did you think?

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 14:09:07 -0000

I haven't been around (work!) but I've had a patch of time lately.

Thanks for the feedback on the book. I was wondering if you found it funny. We read it aloud to each other around here. My husband's family is Egyptian and most of them still live there. As you may know, Egypt has a lot of the same economic problems as the Soviet Union because Nasser modeled the regime on the USSR. We were dying laughing reading the book to each other. I'm curious if you thought it was funny or if it's only funny to us because it hits so close to home.

It is sad how much is still unknown about that system - even though it's out in the open now. Sadder still is how much of what's being proposed today has already been tried and failed so miserably (which ties it right back to this thread). It seems that every new generation has to learn by making the same mistakes. The only difference is that they are no longer willing to call the ideas Socialist or Marxist. The idea is the same but the name has changed. A bit scary.

Re: Silly Proposal

Bill — Tue, 24 Jun 2008 14:14:15 -0000

Hey! If the winner of the election takes the loser as the VP (which is how it was done in the earliest elections in this country), we could have President Dumb and Vice President Dumber. The only thing you have to watch out for is that you don't elect Dumber for president. Not only does it not roll off the tongue as easily but it's hard to tell which one's which in this election.

I'm sorry professor. I just couldn't help myself. Is it me or are the candidates getting ever more ridiculous with every election?

Re: Political Seduction, In Two Hemispheres

Bill — Tue, 24 Jun 2008 17:57:15 -0000

...that freedom from regulations in the US allowed the independent Fed to reduce interest rates to the point where thousands of (temporarily) low-interest mortgages could be taken out by people who could never have afforded a mortgage at normal interest rates.

The Fed rate cuts were a very small portion of that. Also, when are we finally going to get past the fiction of an independent Fed? It's one thing for those in government to always say it, it's quite another for a thinking person to believe it.

friendly and trustworthy country in Asia, rather than by those villainous Europeans.

The Europeans aren't villains. They're freeloaders. There's a difference.

Thanks for playing!

Re: Political Seduction, In Two Hemispheres

Bill — Wed, 25 Jun 2008 08:57:37 -0000

Exactly, Brotio. I'm sure the freeloaders really despised Reagan and the democrat congress (lest you forget that bit). But the rest of us somehow suffered through the low tax rates, falling unemployment and rising prosperity. It was tough, but we somehow managed.

Re: Waste Point

Bill — Wed, 25 Jun 2008 14:12:18 -0000

The French already have this in ENA. No one would say it has been a stunning success,

Took the words right out of my mouth, Don. All it teaches them is how to use connections to get favours paid for by the taxpayers.

Re: Waste Point

Bill — Wed, 25 Jun 2008 14:13:59 -0000

Fabio, thanks for sharing that. Terrifying.

Re: Political Seduction, In Two Hemispheres

Bill — Wed, 25 Jun 2008 19:01:43 -0000

Seth, I agree with you about the candidates. Lame and lamer and dumb and dumber are not the choices I want.

I come from a country (the Soviet Union) where all workers were required to join unions. After immigrating, my father joined a company where all the labour was part of a union. He refused to join the union and has for over 30 years been the only non-union member (the circumstances allowed it). That's how much we hate unions.

Unions are nothing more than parasites which serve only the union bosses. They certainly hurt workers. They amount to a labour monopoly, keeping out non-members and contribute to general unemployment. They deny the individual employee the right to negotiate his own compensation and to compete with other workers. Because most labour unions negotiate compensation based on seniority rather than merit and for all workers as if all human beings are the same and interchangeable, workers are have incentive to do only the bare minimum. For this pleasure, the workers pay a substantial fee to their Union overlords. Like parasites, they suck the life out of companies and labour alike and when the company sputters under the weight of the union and becomes less competitive, the union members lose their jobs. If, as socialists (who now hate being called socialists but who are just the same) had their way, labour unions would represent all labour. So what of the workers who lost their jobs because of union enforced inefficiency? Why, they remain unemployed. It's not the union's problem. If they aren't employed, they aren't members of the union anymore and aren't the union's problem. If you don't believe me, take a look at Europe.

So, if you want to talk about unintended consequences, the unintended consequences of unions for labour are far worse than any real or imagined unintended consequences of busting the unions. If that were not true, then union membership wouldn't be in a persistent decline. Now, for the marginal worker with no motivation (what employers like myself call "dead weight" and fire), the demise of unions is a bad thing. But then, if you can't motivate yourself to actually perform the job for which you were hired, then you don't deserve to keep the job. There are other workers who are more willing, more competent and more deserving. Personally, I've worked in union shops before and I would rather eat my own head than join a union and everyone I have met in my lifetime who has been faced with that question has changed jobs, if necessary, rather than join. Few institutions are as dehumanizing, humiliating, self-serving and deserving of a gutting as unions.

Re: Smith, Hayek, and Will on Society's Complexity

Bill — Thu, 26 Jun 2008 18:19:58 -0000

As usual, Sam, you use 17 words to speak volumes.

Re: Summer Reading

Bill — Tue, 01 Jul 2008 18:59:58 -0000

I read FBR when it was first published and I couldn't agree more with M. Hodak. In fact, everyone I know who has read FBR agrees. I can't bring myself to read Black Swan either.

Re: Nuts

Bill — Mon, 14 Jul 2008 08:40:48 -0000

I agree with Hammer. I've read a lot of Sowell - including his autobiography - and I find absolutely nothing in common between the two except the colour of their skin.

And Vidyohs has a point as well. I recently read a story about black Republicans thinking about voting for Obama solely because of the colour of his skin. I can't think of a more racist reason. What happened to Martin Luther Kings dream that one day his children will be judged by the content of their character, not the colour of their skin? The truth is that racism is not the exclusive domain of whites but is a human condition and minorities have been given a license by white liberals to be extremely racist by arbitrarily deciding that minorities can't be racist by virtue of their minority status. Is it any wonder that race hustlers like Jesse Jackson and rev. Wright see no need to hold their tongues?

Re: Nuts

Bill — Tue, 15 Jul 2008 03:47:54 -0000

"But, woe-be-tide McCain if he goofs."

that's what he gets for being a "white M...erF..ker".

"Honkey" was one of the very first English words I learned when I first came to this country. I didn't know what it meant but it was being hurled at me regularly by the black students. you know...in that non-racist way....

Thank God they didn't know I was half Hymie too!

Re: Times Aren't '70s-Bad

Bill — Thu, 17 Jul 2008 08:44:56 -0000

No price controls, you say?

In a panicked move to mollify the masses, the SEC just restricted short selling in 19 financial stocks in an attempt to reduce the number of possible sellers so that these stocks trade at artificially high prices. This may not be an explicit price control but it is effectively a price control by way of controlling liquidity. As with price controls, prices lose their information carrying role. They become untrustworthy and meaningless. What's the effective difference? There is talk in the SEC of extending this rule to all US traded stocks.

The Fed has been doing everything in its power to keep the housing market from reaching its real, lower prices by hacking at the interest rate and fanning inflation.

Congress wants to reduce trading in oil futures in order to reduce the price (how they will explain the recent drop in oil price in light of all those speculators still running around is beyond me). Of course, this will have the opposite effect but it's still a price control. Again, price controls through liquidity restrictions.

And, if you watched the two days of testimony by Paulson, Bernanke and Cox earlier this week, you may have noticed for the pressure to do more of the same.

Things may not be as bad as the 70's, but we're headed in that direction.

Incidentally, so quick and panicked was the SEC's new rule on short selling that the brokerages only found out when they heard Cox announce it during his testimony on the Hill. And I'm not talking about small brokerage houses. This piece of information was relayed to me by the stock locate desk in one of the biggest prime brokerages on the street. The confusion that ensued between market makers, locate desks, etc. on the street is mind-boggling. Nobody had any idea what any of this meant and were afraid to short any of the 19 stocks at all - including usually exempt market makers. Look what happened to the stock prices of those companies. The SEC has had to delay implementation of the rule until Monday to work out who can and can't do what.

I don't see any of this as positive news for the future.