Tuesday, January 05, 2010

A sad, below-Zero Day

Daron Acemoglu and Arnold Kling might need to understand more about the Mexican/American border. I often had finished an extended Lunch across the border in Palomas, NM, about the time the School buses pulled up; the three from the local American Grade Schools, and the Five from the local American High Schools. The rush of kids at the border crossing really amazed, until you understood the climate of the area. This was the same border crossing which Mexican police had rushed, when a Mexican Drug gang had decided to go to war with the Mexican police over a bribery issue. The standard price to be released without arrest by the individual American Border Patrolperson was $3000, drug mule or not. The average American Patrolman retired after 8-10 years; some 8% taking an extended Vacation in a federal prison before Retirement. Some would claim the system works, some don’t. Few Patrolmen eat below the Border, though Mexico has by far the better Restaurants, and Patrollers are specifically not expected to burn more than one tank of fuel in their SUVs per night; not saying anything, but Illegals know that there is no one out there past 2 am. It also is getting a little harder to enforce the law on both Sides of the Border, as outright Murder gangs are seeping into and throughout the border.

Everyone tries to make a Living off Consumers; Everyone at least, except for maybe the Consumers themselves. Economists have long known there are Ways to compete by raising Prices–it only requires middleman venders of valued Product. The average Consumer only carries 3 Cards in his or her Wallet, and at least One is specific to a Name brand set of Stores. Some 30% of Card Users utilize their Cards in budgetary manner; either buying from one Card until a financial limit is reached before switching to another card, or restricting the type of expenditures to different Cards. This is where Card companies begin to resemble Mexican Drug gangs, with the old Standby: Make a healthy Profit from the Bribes, or Lose everything! It is only the tenor of the language which alters, not the content.

Ben may be Right, though I doubt it. The housing bubbles have more to do with the shortage of adequate housing, and the Construction charge levels of such housing. The federal government made it a primary issue to get everyone into their own home, creating that artificial housing shortage so desired by business interests; Construction and Furnishings made a fortune simply because the federal government said everyone should have their own house, and provided the risk mortgages to pay for them. The whole debacle is not the problem today; the problem now consists of housing which is still too expensive, mortgage-holders who are paying too much for the residual value of their homes, and a continuation of mortgages which should have long been written off. The low Interest rates fed by the Fed keeps the Trash moving sluggishly, which is the real cause for the continued deterioration of the economy. Were low Interest rates the panacea for the economy orginally–debatable! Do they function now as anything but a drag on economic stability–No! lgl

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