Ricardo Hausmann presents a good, general article claiming that Biofuel Production can match Oil Production. The large-scale biofuel production would require a huge volume at current Consumption rates, and there are many problems associated with production of such volume, over and beyond the Food issue. The first Statement must be that Corn (maize to Those stupid enough to live elsewhere than the Midwest) could never provide the biofuel source at Production Costs low enough to act as alternative. Sugar Beets are the best bet on cultivated Crops, producing excellent quantities of Sugars at volumes comparable to Corn; it enjoys the advantage of more successful Solid fertilizers (non-petroleum Products), and is cultivable in any terrain acceptable to Corn. The trouble with both sources resides in the fact that neither are perennial Plants, and require an unenviable amount of tillage. Switchgrass has the volume and is perennial, but may not contain sufficient levels of Sugars. Genetics should bend it's gaze on Sugar Beets, as We really need perennial plants. My favorite, though, is Garbage and Sewage; God knows We create enough of Both, and We stay in the arena of petrochemicals, which still contain the Best Bang for the Buck.
A younger one of those astute Types asked me to define the basis for Speculation. I thought the Answer would be simple, right off the top of my head. I suddenly understood that I would have to establish an ideological definition for Speculation, which brought Visions of being hung; remember no one ever uses the effigy bit when it comes to me. Speculators utilize two facts to create Monopoly pricing to their benefit. The first fact is that there is an limited supply of anything, when placed in a critical Timeframe. The second fact consists of the knowledge there will be a consistent Demand level for the Product within that critical Timeframe, based upon actual Production need or extreme desire. Speculators also possess the knowledge that anywhere from about 14% to about 55% of the Buyers of such Products will not recognize their need for such Products until their entrance into the critical Timeframe. Speculators buy up excess Production of Product before the start of the critical Timeframe, and hold the Product until the pressures of Demand develop a Monopoly price which they will accept.
Study of this basic mechanism brings secondary considerations. The first is Product suppliers witness the higher, extorted Product prices, and think to capitalize on the Profits-taking, and hold onto the Monopoly prices previously utilized, for a creation of a new base Price for the Product. The second element consists of the knowledge that Speculators must revolve through a series of Products, as they need to buy at the standardized base Price, in order to profit from the creation of a Monopoly price for the Product. Speculation quickly establishes a general round of overall Product prices not grounded on Production Costs, but generating a vast increase in those selfsame Production Costs. Speculation is very bad for economic performance, and the more funds which are devoted to Speculation, the faster economic activity will be exhausted of both financial and physical resources. lgl
Thursday, November 08, 2007
No New Taxes!!!--Well?
Can the Genie be put back in the bottle? This is the suggestion of the Indian Petroleum Secretary, or so Nymex executives claim. Well, maybe! One can eliminate the Speculators from the markets to a great degree, and in a manner which the marginal traders will understand instantly. It would also help most Governments in the World, who have been suffering a real degrade in financial solvency.
A simple tax on traded Commodities of 2% destroys all Speculation models, demanding an excessive Margin rise to gain a Profit in Speculative trading. Regulation or limitation measures in the Markets will cause more damage than benefit to the markets, but a simple, straightforward tax might cancel the impact of the Speculators. Commodity Buyers remain relatively unaffected by such a Tax; it being a simple increase in Commodity Price–treated like a Production Cost charge. Sellers find an easily understood necessary Price floor, while Markets face only an induced Trading Cost in their Commission brokerage fee. Governments discover a real source of Tax revenues which structurally aids their balance sheet. Margin Traders, on the other hand, have to functionally double their Profits ratio.
Now is the real timeframe to introduce such a Tax as well, as the current Administration is going to Sunset; George W. Bush cannot run again, and Campaign promises are best noted for being violated. The rest of the World will gratefully follow the United States, due to the real share of the financial markets enjoyed by this Country. Congressional members can blame the current Presidency for the new Taxation, and George W. can finally achieve his economic legacy. The real gain will come in the form of Tax revenues of major note, a process where Tax magnitudes rise as Commodity prices rise, and will reduce Commodity prices as Speculators realize model Trading will require much more Market swing than can be generated. The real trouble will be down-the-road difficulty with convincing greedy legislators to leave the financial markets alone. Application to all the markets would reintroduce Speculation to the Commodities markets again, and induce the much greater market swings found necessary by the Speculators. lgl
A simple tax on traded Commodities of 2% destroys all Speculation models, demanding an excessive Margin rise to gain a Profit in Speculative trading. Regulation or limitation measures in the Markets will cause more damage than benefit to the markets, but a simple, straightforward tax might cancel the impact of the Speculators. Commodity Buyers remain relatively unaffected by such a Tax; it being a simple increase in Commodity Price–treated like a Production Cost charge. Sellers find an easily understood necessary Price floor, while Markets face only an induced Trading Cost in their Commission brokerage fee. Governments discover a real source of Tax revenues which structurally aids their balance sheet. Margin Traders, on the other hand, have to functionally double their Profits ratio.
Now is the real timeframe to introduce such a Tax as well, as the current Administration is going to Sunset; George W. Bush cannot run again, and Campaign promises are best noted for being violated. The rest of the World will gratefully follow the United States, due to the real share of the financial markets enjoyed by this Country. Congressional members can blame the current Presidency for the new Taxation, and George W. can finally achieve his economic legacy. The real gain will come in the form of Tax revenues of major note, a process where Tax magnitudes rise as Commodity prices rise, and will reduce Commodity prices as Speculators realize model Trading will require much more Market swing than can be generated. The real trouble will be down-the-road difficulty with convincing greedy legislators to leave the financial markets alone. Application to all the markets would reintroduce Speculation to the Commodities markets again, and induce the much greater market swings found necessary by the Speculators. lgl
Wednesday, November 07, 2007
My Favorite Topic: Statistics
Why don’t I like this Report(pdf)? Could it be that Unit labor Costs has increased 4.4% through the 4 Quarters since the 3rd Quarter of 2006. Understand that the Wage levels of the lower 60% of Incomes have not risen substantially, Unit labor Costs being basically generated from the high-End, through health care Costs increases and advanced Executive salaries and bonuses. The BLS comment that these were the highest 4 Quarters since the same Period in 2000 did not help my sense of calm, especially because the gain in those 4 Quarters also mainly came from the same Profits-Taking venues. Untrained Readers may not understand that revenues going to these elements do not provide Gain to the Consumption function. One could even be refuted (Economists dislike uncomfortable Signs of adverse impact) for saying it might be considered a Predictor of Recessionary events to witness a rapid increase in such efforts.
I will not state that the Current Employment Statistics (CES) program needs fine-tuning, but I seriously imagine it is not capturing a routed downturn of labor hours worked; Management often having to work longer hours to plan a Layoff or Downsizing, maybe it is the double-counting of People employed in two or more Jobs. I can only suggest uniform Rules of data collection be used throughout the data collection process, at a 11-12% likely collection Cost increase, but a 30% greater security on the validity of the information. The BLS should attempt to get the information in a format which is trustworthy and comparable.
What I most clearly would desire is a separation of Wages from employers’ compensation for social insurance and private benefit plans. The later should be placed under its own separate Heading with combination with Bonuses, Stock Option and Grants, and interim year Wage increases. Some Economists would argue that such clarity would limit the Employment demand for their profession, but I think the reorganization of data would aid even them. lgl
I will not state that the Current Employment Statistics (CES) program needs fine-tuning, but I seriously imagine it is not capturing a routed downturn of labor hours worked; Management often having to work longer hours to plan a Layoff or Downsizing, maybe it is the double-counting of People employed in two or more Jobs. I can only suggest uniform Rules of data collection be used throughout the data collection process, at a 11-12% likely collection Cost increase, but a 30% greater security on the validity of the information. The BLS should attempt to get the information in a format which is trustworthy and comparable.
What I most clearly would desire is a separation of Wages from employers’ compensation for social insurance and private benefit plans. The later should be placed under its own separate Heading with combination with Bonuses, Stock Option and Grants, and interim year Wage increases. Some Economists would argue that such clarity would limit the Employment demand for their profession, but I think the reorganization of data would aid even them. lgl
The Approach to Problems
Why do Economists and ordinary people think that Booms or Recessions can be manufactured? The real Variable in all circumstances of the Economy is unintended consequences. It is not just Public and Investor reaction to Government or Business policy, but also Individual decisions made in multitude. Economists account Economic Participants to be rational, though I possess many doubts about this Extreme. Can One be Rational confronted by a multiplex of inputs, without a definite outcome assigned to any one of them? The most I would define is that Economic Participants are highly reactant, quickly shifting their positions in response to Public activity defined by Markets. The later announce the nature of the Public activity, and is the reason that even Communist nations could not abandon the Market Concept totally. Anyway, Booms and Recessions are only major expressions of that Public activity, which is itself defined by that multitude of individual decisions. Booms and Recessions can only be directed when One can control that mass of decisions of Economic Participants, and the varying degree of Participation and Investiture of each Participant modifies his behavior negates compliant uniformity.
Simple combinations of current economic operations to obtain greater overall performance has always been one of my treasured goals. My next idea will make People laugh, until they potentially consider the Gain which might be attained by their use. This idea is to utilize Road Traffic to generate Electrical Power. It would require rolled out Mats containing Friction Generators, or Roller poles with End electrical generators designed like the Disc Brakes of automobiles. These Mats would only have to possess easy Plug connections to Power lines, and be laid out by truck drum. The Mats would present only minimal effect on fuel use of vehicles, and the same with the traction of the vehicle with proper Spacing integral to the Mat design. Proper construction of Road surface could allow for rapid and easy Spread of the Mats, and the variable utilization of the Mats could potentially handle the large variation of Electrical consumption during Peak periods, and thereby cancel the current necessary over-construction to meet Peak electrical demand. Do I sound like a Nutcase again? lgl
Simple combinations of current economic operations to obtain greater overall performance has always been one of my treasured goals. My next idea will make People laugh, until they potentially consider the Gain which might be attained by their use. This idea is to utilize Road Traffic to generate Electrical Power. It would require rolled out Mats containing Friction Generators, or Roller poles with End electrical generators designed like the Disc Brakes of automobiles. These Mats would only have to possess easy Plug connections to Power lines, and be laid out by truck drum. The Mats would present only minimal effect on fuel use of vehicles, and the same with the traction of the vehicle with proper Spacing integral to the Mat design. Proper construction of Road surface could allow for rapid and easy Spread of the Mats, and the variable utilization of the Mats could potentially handle the large variation of Electrical consumption during Peak periods, and thereby cancel the current necessary over-construction to meet Peak electrical demand. Do I sound like a Nutcase again? lgl
Tuesday, November 06, 2007
The Health Challenge
Arnold Kling again pinpoints the real source of the health care crisis. His remedy, though, must be considered at fault; utilizing unfettered Markets will not settle anything when over half of the American population cannot pay free market Pricing for health care. Incomes of less than $60k per year simply cannot pay for full-care insurance now exceeding $6000 per year. Such Income levels cannot even repay Emergency Room charges once billed. There was real reason why foreign health care system do not rise above 8% of GDP; that reason being the great mass of Patients cannot afford any form of Payment for that health care. Conservatives who would champion a free market assessment of health care know they are insisting on cutting the majority of the Population off from adequate health care. It is also why the Conservatives will lose operational majorities at all levels of Government soon, if not the next Election.
The American People need a Single-Payer system, and One which is uniform throughout the Nation, and easy to understand. Allowing health care Providers to charge whatever they want, whenever they want, cannot finance universal health care, or even individual health care over the long-run. One method would be to pass a universal (Federal) law stating no medical service, medical equipment, or medical Drug can increase in Price higher than the lowest Inflation rate per Private Sector in the economy; simply put, the health care industry will come in last place every time in the Price wars. I would also be draconian, and insist that the Inflation adjustment start in the Period prior to the passage of Medicare. New medical procedures, equipment, and medical Drugs must be introduced in a Price no greater than its intended Replacement at time of introduction. The new Law would put a Cap on the health care industry.
My next proposed Act would declare that all Citizens are to be covered with an expanded Medicare, financed by a 4% increase in Social Security taxes–half paid by Employer, half paid by Employee. All Patients must pay $50 per Doctor’s visit, $75 per Clinic visit (which must include the Doctor’s fee of $50; actual Pay to Doctors will be negotiated between Doctor and Clinic), and $125 per Hospitalized Day. Medicaid will be directed to pay for all accepted Patients only the hospitalized Day Costs, and half of the Doctors’ fees and Clinic fees. Private Insurers will be restricted to paying the above fees, and further restricted in that premiums for such Insurance cannot exceed the Total Cost plus a 14% Profit on those Total Costs where administrative Costs allowed to be defrayed limited to $2 per forwarded bill. Medicare must insist on pre-approval before any medical procedure or medical equipment use exceeding $20k per Patient, and approve only those medical procedures and medical equipment which will provide sustained long-term Recovery of the Patient.
Further legal treatment must be introduced paying for Medical Student (and medical Technicians of lower caste) Loan Costs, upon successful navigation of an internship. Additional legislation must create a Research Fund which will loan Drug companies the funds for Research, where upon completion of Research, the Government will determine a dismissal level depending upon the success of the resultant Product–its intrinsic value. The major Challenge for both Conservative and Liberal in the health care system correction is to understand that the health care industry cannot develop haphazardly, with Research elements being funded on personal initiative and allowed to Charge whatever they would claim. lgl
The American People need a Single-Payer system, and One which is uniform throughout the Nation, and easy to understand. Allowing health care Providers to charge whatever they want, whenever they want, cannot finance universal health care, or even individual health care over the long-run. One method would be to pass a universal (Federal) law stating no medical service, medical equipment, or medical Drug can increase in Price higher than the lowest Inflation rate per Private Sector in the economy; simply put, the health care industry will come in last place every time in the Price wars. I would also be draconian, and insist that the Inflation adjustment start in the Period prior to the passage of Medicare. New medical procedures, equipment, and medical Drugs must be introduced in a Price no greater than its intended Replacement at time of introduction. The new Law would put a Cap on the health care industry.
My next proposed Act would declare that all Citizens are to be covered with an expanded Medicare, financed by a 4% increase in Social Security taxes–half paid by Employer, half paid by Employee. All Patients must pay $50 per Doctor’s visit, $75 per Clinic visit (which must include the Doctor’s fee of $50; actual Pay to Doctors will be negotiated between Doctor and Clinic), and $125 per Hospitalized Day. Medicaid will be directed to pay for all accepted Patients only the hospitalized Day Costs, and half of the Doctors’ fees and Clinic fees. Private Insurers will be restricted to paying the above fees, and further restricted in that premiums for such Insurance cannot exceed the Total Cost plus a 14% Profit on those Total Costs where administrative Costs allowed to be defrayed limited to $2 per forwarded bill. Medicare must insist on pre-approval before any medical procedure or medical equipment use exceeding $20k per Patient, and approve only those medical procedures and medical equipment which will provide sustained long-term Recovery of the Patient.
Further legal treatment must be introduced paying for Medical Student (and medical Technicians of lower caste) Loan Costs, upon successful navigation of an internship. Additional legislation must create a Research Fund which will loan Drug companies the funds for Research, where upon completion of Research, the Government will determine a dismissal level depending upon the success of the resultant Product–its intrinsic value. The major Challenge for both Conservative and Liberal in the health care system correction is to understand that the health care industry cannot develop haphazardly, with Research elements being funded on personal initiative and allowed to Charge whatever they would claim. lgl
Neurotic to the Core
James Hamilton presents a balanced apprisal of Oil pricing, but he stands far too sanguine for my own Taste. He ignores the impact of the Oil increases on the World economy. What exactly happens to the American economy in Chinese Imports rise a projected 16% in Price? A switch to India or Central America seems doubtful, though Chavas may provide Central America with cheaper Oil–He adopting the Saddam neurosis of buying friends with cheap Oil. Of course, American purchase practices have already destroyed Central American Production capacity. Am I being extreme in claiming a 16% Price rise for Chinese Imports because of Oil–I doubt it, but who knows. This is all Third-Generation stuff, and will not show up until Chinese Production has to engage in productivity with the higher raw materials–do you think the Chinese have ever heard of arbritage? It is known that if the American Consumer stops buying Chinese products, the Chinese central banks will stop buying Treasuries. James is complacent, and I am happy for him. I myself suffer from various neuroses, many accumulated since Graduate School days.
Mark Perry also fails to spot Recessionary pressures, because he presently sees no increase in college-educated unemployment. This may be true, but I would be more comfortable if this assessment was not based on documentary evidence from one specialized Recession incited by the Tech Balloon. Every Recession remembered and studied had distinct causation, often quite different from other experienced Recessions, and some engendered by remedial actions taken to forestall occurrence of previous-style Recessions. What exactly happens to the Economy when the Income levels of half the Labor force cannot face the sharp rise in Consumption Pricing?
Tim Haab wonders if immigrants actually lower the Wages of native Workers, and provide a link to a Paper which disputes this contention. I do believe, like George Borjas, that immigrants will suppress the Wages of low-skilled labor, suggesting that a real pattern of gumbo-increase in base Wage for half of the Working Population since 1980 comes from rapid Immigration. This might not give fair evaluation to the Paper. There is still a further Problem, though, in the fact that the Paper’s data was drawn from 1990 onward; years of economic growth outnumbered numbers of contraction years, and the years of growth has rates of expansion much higher than the rates of Contraction in Recession years. It is here where I would find a Problem: Recession years have high levels of Unemployment with corresponding higher Costs of Social Welfare; can We withstand several years of high Unemployment with a equal high level of immigration? lgl
Mark Perry also fails to spot Recessionary pressures, because he presently sees no increase in college-educated unemployment. This may be true, but I would be more comfortable if this assessment was not based on documentary evidence from one specialized Recession incited by the Tech Balloon. Every Recession remembered and studied had distinct causation, often quite different from other experienced Recessions, and some engendered by remedial actions taken to forestall occurrence of previous-style Recessions. What exactly happens to the Economy when the Income levels of half the Labor force cannot face the sharp rise in Consumption Pricing?
Tim Haab wonders if immigrants actually lower the Wages of native Workers, and provide a link to a Paper which disputes this contention. I do believe, like George Borjas, that immigrants will suppress the Wages of low-skilled labor, suggesting that a real pattern of gumbo-increase in base Wage for half of the Working Population since 1980 comes from rapid Immigration. This might not give fair evaluation to the Paper. There is still a further Problem, though, in the fact that the Paper’s data was drawn from 1990 onward; years of economic growth outnumbered numbers of contraction years, and the years of growth has rates of expansion much higher than the rates of Contraction in Recession years. It is here where I would find a Problem: Recession years have high levels of Unemployment with corresponding higher Costs of Social Welfare; can We withstand several years of high Unemployment with a equal high level of immigration? lgl
Monday, November 05, 2007
Economic Counterpoint
Dean Baker is a very smart Economist, but he is wrong on this one. The high value of the Dollar under the second Clinton administration was from what exact Dollar-Prop policy? Conservatives spout all sorts of verbiage, but it all culminates down to the fact the Federal Government was running a Surplus, cutting the National Debt. Were the Clinton Tax policies so inherently wrong? They didn’t seem to retard significant economic growth through the two Clinton administrations, and even if the Recession started during the last year of the Clinton administration–which I have always doubted, it was only noted for the deflation of the Tech Boom; remember significant rise in Unemployment did not become reality until after the Bush Tax Cuts, claimed to save Jobs though all Business personnel knew they were going to continue their Downsizing and Layoff policies. The Recovery from the last Recession also was the slowest of the last four Recessions, and the excess funds from the Bush Tax Cuts simply enabled American Corporations to finance Overseas Production.
The Bush Tax Cuts did produce a massive Increase in the National Debt, and a Spending which did not significantly help overall economic health. Dean’s fourth Paragraph is only too true; but it does not mention the level of Federal Government purchases of foreign Goods to supply it own Overseas commitments, or does it reflect the huge Sale of Federal Debt to foreign banks. It can be stated some $200 bn of foreign purchases reside with Federal Government Procurement, and that the excess Dollars overseas comes mainly from Federal search for Debt underwriting.
One does know that Clinton Taxes at least controlled a rapidly accelerating economy, even if One refuses to admit that those Taxes actually provided propellent for that economic Growth. The Bush Tax Cuts did not provide the propellent level existent in the economy under Clinton–from whatever source, and did guarantee a vastly increased National Debt; especially as the Republican years did not even think to limit Government Spending in any meaningful way. lgl
The Bush Tax Cuts did produce a massive Increase in the National Debt, and a Spending which did not significantly help overall economic health. Dean’s fourth Paragraph is only too true; but it does not mention the level of Federal Government purchases of foreign Goods to supply it own Overseas commitments, or does it reflect the huge Sale of Federal Debt to foreign banks. It can be stated some $200 bn of foreign purchases reside with Federal Government Procurement, and that the excess Dollars overseas comes mainly from Federal search for Debt underwriting.
One does know that Clinton Taxes at least controlled a rapidly accelerating economy, even if One refuses to admit that those Taxes actually provided propellent for that economic Growth. The Bush Tax Cuts did not provide the propellent level existent in the economy under Clinton–from whatever source, and did guarantee a vastly increased National Debt; especially as the Republican years did not even think to limit Government Spending in any meaningful way. lgl
Where Do We Take It from Here?
Knzn brought up an argument I have been touting for a long while, though from a different viewpoint. We believe that high-end Tax Progressivity actually encourages Incentive effects increasing Productivity. Knzn makes a good attempt at presenting an ideological basis for this encouragement, while I have always relates the argument to statistical measures–the length of time which Business Executives and Management actually worked, the degree of Planning which went into Production efforts, the amount of Management time devoted to reducing Production Costs, along with the increased Wage rates granted to Skilled Labor. One of the great restrictions to Productivity today reside in the wastage in Time by Executive personnel in expenditure of their over-just Rewards.
Here(skip the listed Download) is another indication that the Rewards system for Business Incentive may be structurally large, with the extremely rapid increase in Millionaire Households in China; remembering that China has an extremely high confiscatory Tax system. It goes to prove the vital point that high Taxes provide Incentive to Those committed to Wealth Accumulation as a Social Attainment. I would also suggest without Evaluation that it is likely that Employees within the Businesses generating this great Wealth worked under higher-Incentive Pay, than do equally-skilled Labor in less Profitable comparable industries in China. The higher Tax Progressivity will both generate intense Incentive and greater uniformity of Wage differentials, and still bring rapid growth.
Paul Krugman worries that Democrats might be wobbled by Wealth. The Danger is very real, but unity among Congressmen, Senators, and President could eliminate the threat. One Party need not even hold all three institutions, or even more than one. The unity they need is to Vote as a block on Issues, not based upon a doctrinaire platform, simply by Voting their Conscience on Issues. Special Interests and Lobbyists could not abandon these Individuals, else they would lose all influence. The perfect Timing would be immediately after the next Presidential Election, when all three institutions are bound to have a new Leadership–whether replaced or weathered incumbent, still revitalized. This grants Time for Special Interests to lose residual angers before Reelections. The real need is for both Parties to define a sound program of action before the Election, for implementation after the Election. Legislators must themselves learn Risk-bearing attitudes. lgl
Here(skip the listed Download) is another indication that the Rewards system for Business Incentive may be structurally large, with the extremely rapid increase in Millionaire Households in China; remembering that China has an extremely high confiscatory Tax system. It goes to prove the vital point that high Taxes provide Incentive to Those committed to Wealth Accumulation as a Social Attainment. I would also suggest without Evaluation that it is likely that Employees within the Businesses generating this great Wealth worked under higher-Incentive Pay, than do equally-skilled Labor in less Profitable comparable industries in China. The higher Tax Progressivity will both generate intense Incentive and greater uniformity of Wage differentials, and still bring rapid growth.
Paul Krugman worries that Democrats might be wobbled by Wealth. The Danger is very real, but unity among Congressmen, Senators, and President could eliminate the threat. One Party need not even hold all three institutions, or even more than one. The unity they need is to Vote as a block on Issues, not based upon a doctrinaire platform, simply by Voting their Conscience on Issues. Special Interests and Lobbyists could not abandon these Individuals, else they would lose all influence. The perfect Timing would be immediately after the next Presidential Election, when all three institutions are bound to have a new Leadership–whether replaced or weathered incumbent, still revitalized. This grants Time for Special Interests to lose residual angers before Reelections. The real need is for both Parties to define a sound program of action before the Election, for implementation after the Election. Legislators must themselves learn Risk-bearing attitudes. lgl
Sunday, November 04, 2007
Regulation of Pension Funds
The Pension Fund management system is seriously flawed, and it is costing Pensioners a great deal of money; as this article by Gretchen Morgenson attests. The GAO found that Pension Funds using what are considered to be deviant practices by their Consultants show annual investment returns 1.3% lower than properly-run Funds. The GAO also found that a 1% difference in fees could generate a 17% difference in a retirement account after 20 years. I personally believe that the entire system of financial arrangements as currently developed generates the necessary heavy-swing Markets for Hedge Funds, etc., to produces the major Profits necessary; and that these practices damage the real performance of the Markets.
Problem Solutions remain my forte, it generating my low rate of Pay; most of the Money non-trusting of any risk to their own Money. This essential fact contributes to my belief that Fund managers get too large a piece of the Pie; maybe, simply because the Fund managers have a better Sales pitch. Still, I ask myself how can the system be altered to forestall excessive Wealth transfers by an out-of-control financial management system. My mind churns feverishly, and I finally decide that Simple is Best; the Wild West atmosphere can best be canceled by clarity of performance incentives.
The actual Nuts and Bolts of my program is a controlled system of compensation, where Salary assumes it rightful place in reward of Labor. A Federal law should be passed which prohibits all but a set Incentive for good performance. Salaries will still be negotiated freely, so that Fund managers and their Employees can evaluate their equivalent worth in the Funds. Incentives, though, would be restricted to a double the Inflation rate Increase of Salary for each Year of performance, and by law granted only if the personal Fund generated an 8% rate of Return or greater. We suddenly find Ourselves in a World where Everyone understands the methodology of Gain for all Participants, pressure for swing-Markets is reduced, and long-term performance is desired by All. Will it Work? I doubt if Anything else will! lgl
Problem Solutions remain my forte, it generating my low rate of Pay; most of the Money non-trusting of any risk to their own Money. This essential fact contributes to my belief that Fund managers get too large a piece of the Pie; maybe, simply because the Fund managers have a better Sales pitch. Still, I ask myself how can the system be altered to forestall excessive Wealth transfers by an out-of-control financial management system. My mind churns feverishly, and I finally decide that Simple is Best; the Wild West atmosphere can best be canceled by clarity of performance incentives.
The actual Nuts and Bolts of my program is a controlled system of compensation, where Salary assumes it rightful place in reward of Labor. A Federal law should be passed which prohibits all but a set Incentive for good performance. Salaries will still be negotiated freely, so that Fund managers and their Employees can evaluate their equivalent worth in the Funds. Incentives, though, would be restricted to a double the Inflation rate Increase of Salary for each Year of performance, and by law granted only if the personal Fund generated an 8% rate of Return or greater. We suddenly find Ourselves in a World where Everyone understands the methodology of Gain for all Participants, pressure for swing-Markets is reduced, and long-term performance is desired by All. Will it Work? I doubt if Anything else will! lgl
Saturday, November 03, 2007
Recessions and Taxes
Here is where One can find the real threat to World Recession. Can China maintain the rate of growth under the impact of higher Oil? The Answer is No! The lack of fuel at the controlled Prices lead to Work Stoppages defeating Productivity, while letting the Market set Prices will destroy Chinese Trade advantage; mainly based upon Chinese fuel use inefficiency (the article states that China uses 3.4 times the energy per unit of economic output as does the World average). What the article does not state is that Oil at $85-87/barrel eliminates the Wage advantage enjoyed by China and India (this is my estimate, based upon gross sketching). It is hard to estimate accurately, as it is based upon native Wages in China and India, Wages in the advanced nations (think Minimum Wage rates), amounts of energy used in China and India, and amounts of Energy utilized in the advanced nations. The Whole then has to be scaled for Factor Costs of Production transfer. The later element, though, is a question of Time in which Energy inputs remain as expensive. High Energy Cost is Bad News, and my Guess is probably as good as any.
This article expresses the real constraint of the Oil Price surge. The Price of Oil gained about 40% since August, and Chevron 3rd Quarter Profits slid 26%. This covered a average Cost of $60-70/barrel. Crude rose over $96/barrel on Friday. The major Refineries will be cutting Production in the near future, both to cut high Production Costs under full production conditions, but of greater moment, to generate high Pump prices. Government intervention might seek to curtail this process, something basically futile in the face of sustained high Oil Costs; the effort cancelled by a downshift in Maintenance Costs, which Refiners probably are already engaged. Readers should understand that the Oil industry has already slowed Production because of the disappearance of Profits, and the automotive industry is already suffering from the high Pump prices; the price of Oil must come down, or there will be Recession.
Tim Worstall came up with this Gem. I don’t agree with the Concept of eliminating Corporate taxation, but what he wrote was all very true. I will make a Counterproposal: Abolish Income Taxes, and make Business taxes pay for it all. My Reasoning: Individual Taxpayers still pay the extra Pound of flesh in payment to the Accountants and Tax Preparers. Business must pay the Accountants anyway, are most effective in minimizing tax payments as a Class, currently possess a political lobbying network which could be turned to elimination of excess Government Spending, and they pass Tax Costs onto the Consumers anyway. Individual Taxpayers could not complain about their Taxes which do not exist–except through hidden tax forms, Business would have a new weapon in the fight to suppress Wages, and Businessmen could howl about high Taxes, which they do anyhow. Of course, I would want a rock-solid 28% Capital Gains Tax without escape mechanisms, just so Everyone could feel victimized. lgl
This article expresses the real constraint of the Oil Price surge. The Price of Oil gained about 40% since August, and Chevron 3rd Quarter Profits slid 26%. This covered a average Cost of $60-70/barrel. Crude rose over $96/barrel on Friday. The major Refineries will be cutting Production in the near future, both to cut high Production Costs under full production conditions, but of greater moment, to generate high Pump prices. Government intervention might seek to curtail this process, something basically futile in the face of sustained high Oil Costs; the effort cancelled by a downshift in Maintenance Costs, which Refiners probably are already engaged. Readers should understand that the Oil industry has already slowed Production because of the disappearance of Profits, and the automotive industry is already suffering from the high Pump prices; the price of Oil must come down, or there will be Recession.
Tim Worstall came up with this Gem. I don’t agree with the Concept of eliminating Corporate taxation, but what he wrote was all very true. I will make a Counterproposal: Abolish Income Taxes, and make Business taxes pay for it all. My Reasoning: Individual Taxpayers still pay the extra Pound of flesh in payment to the Accountants and Tax Preparers. Business must pay the Accountants anyway, are most effective in minimizing tax payments as a Class, currently possess a political lobbying network which could be turned to elimination of excess Government Spending, and they pass Tax Costs onto the Consumers anyway. Individual Taxpayers could not complain about their Taxes which do not exist–except through hidden tax forms, Business would have a new weapon in the fight to suppress Wages, and Businessmen could howl about high Taxes, which they do anyhow. Of course, I would want a rock-solid 28% Capital Gains Tax without escape mechanisms, just so Everyone could feel victimized. lgl
Friday, November 02, 2007
Fairy Tales
Seems rosy, doesn’t it? Well, maybe! Revision of the Jobs data has become more erratic over the years, and First Numbers here sound more wistful than real. The GDP Reading for the 3rd Quarter probably could not suffer a Core Reading like Inflation, because volatile Purchases of extreme value must have made up a great share of the Increase. The same ideation could also express extreme duress for Wages, if the high Salaries and Benefits were cut from the calculation. Business Investment is growing at 6% rate, of course, though real care should be utilized here; Prices for such Products are highly reflective of Demand, and there could have actually been a decline in Demand for physical Product. Exports also reflect the cheaper Dollar, and can vary widely greatly from Quarter to Quarter. It is a nice Show, though.
Spencer at Angry Bear provides a Graph which might explain the Problem with our Economy far better than any amount of discussion. There has most definitely been widespread inflation since January of 1989. There exists a definite tendency to suppress Average Hourly Wage rates. There has definitely been a reduction of higher-level Wage rates in Hourly Wages with transfer of such Labor to foreign sources, and an increase in Employment at the Minimum Wage levels which includes a concave reduction in Wages in many Occupations. The major Problem here consists of the fact that the percentage of Population dependent on the Hourly Wage economy lacks documentation by myself, but I do not believe there has been much alteration. Inflation, under these circumstances, becomes a direct decrease in Living Standards.
This Post simply proves that One should read far more carefully before writing anything for the Internet (I read this after having written the two previous paragraphs). I was lucky in that none of the evaluations directly conflicted with my own personal beliefs, though I could have utilized some of the material for quotable reference. I would advise the Reader to note Drew Matus and Morgan Stanley Research–both of which relate to my statements about the use of low Wage rates. Like High Frequency, I believe a loss of 5000 Jobs in the Construction sector is an outright Lie. lgl
Spencer at Angry Bear provides a Graph which might explain the Problem with our Economy far better than any amount of discussion. There has most definitely been widespread inflation since January of 1989. There exists a definite tendency to suppress Average Hourly Wage rates. There has definitely been a reduction of higher-level Wage rates in Hourly Wages with transfer of such Labor to foreign sources, and an increase in Employment at the Minimum Wage levels which includes a concave reduction in Wages in many Occupations. The major Problem here consists of the fact that the percentage of Population dependent on the Hourly Wage economy lacks documentation by myself, but I do not believe there has been much alteration. Inflation, under these circumstances, becomes a direct decrease in Living Standards.
This Post simply proves that One should read far more carefully before writing anything for the Internet (I read this after having written the two previous paragraphs). I was lucky in that none of the evaluations directly conflicted with my own personal beliefs, though I could have utilized some of the material for quotable reference. I would advise the Reader to note Drew Matus and Morgan Stanley Research–both of which relate to my statements about the use of low Wage rates. Like High Frequency, I believe a loss of 5000 Jobs in the Construction sector is an outright Lie. lgl
Thursday, November 01, 2007
The Good, The Bad, and the Ugly
Some Indexes are down, and the Housing industry seems bleak, and Economists are sounding Notes of Caution. I study the News and Reports, and don’t feel it. Consumers have not yet made the transition to a harsh outlook. I remember the original movie ‘Fun with Dick and Jane’. Appearance is still more important with Consumers than is paying their Bills. I expect that GDP will continue to expand into the Spring, when We will have a hard landing. It is all a Question as to whether Households insist on one more good Christmas before reorganization–I really believe they will. I have been wrong before, especially when making Predictions, but Consumers are ignoring the acceleration of financial charges.
The price of Oil can only impact viciously in the long-term, as Faith Birol states in this article. The fact is that at $93/barrel, it will double-whammy both Consumers and Producers. The Fed dropping discount rates will only be fueling the Inflation, as I expect an 8% increase in Production Costs within 36 months, and the equivalent impact to Consumers of a Dollar/gallon Gas Tax without the revenue. The humor of the Situation is an equal belief that We will witness $40/gallon Gas within 48 months, because Speculators will destroy the propellent of the Consumers of the industrialized nations, the growth of China and India will not endure loss of Customers, and there will be a Worldwide glut of Oil–which is over-capitalized inside Recession-style Oil Demand. This article brings the entire argument into Prospective, as One asks what happens if Oil Demand drops by 35% Worldwide.
I refer you to James Joyner rather than N. Thomas Connally, because James has already scaled down for the economically relevant. Primary Care physicians have been cut in half in the last decade, though the Population continues to expand. Primary Care makes too little money, have too many Patients, and Doctors have to work too many hours. Joyner mentions the real danger of the current cap on Medical School slots, and refers in passing to the excessive Training demanded by all Graduates. Primary Care physicians must undergo 90% of the Training demanded of Specialists, without opportunity to score 90% of the Pay. People wonder why overall Medical Care is hard to find. lgl
The price of Oil can only impact viciously in the long-term, as Faith Birol states in this article. The fact is that at $93/barrel, it will double-whammy both Consumers and Producers. The Fed dropping discount rates will only be fueling the Inflation, as I expect an 8% increase in Production Costs within 36 months, and the equivalent impact to Consumers of a Dollar/gallon Gas Tax without the revenue. The humor of the Situation is an equal belief that We will witness $40/gallon Gas within 48 months, because Speculators will destroy the propellent of the Consumers of the industrialized nations, the growth of China and India will not endure loss of Customers, and there will be a Worldwide glut of Oil–which is over-capitalized inside Recession-style Oil Demand. This article brings the entire argument into Prospective, as One asks what happens if Oil Demand drops by 35% Worldwide.
I refer you to James Joyner rather than N. Thomas Connally, because James has already scaled down for the economically relevant. Primary Care physicians have been cut in half in the last decade, though the Population continues to expand. Primary Care makes too little money, have too many Patients, and Doctors have to work too many hours. Joyner mentions the real danger of the current cap on Medical School slots, and refers in passing to the excessive Training demanded by all Graduates. Primary Care physicians must undergo 90% of the Training demanded of Specialists, without opportunity to score 90% of the Pay. People wonder why overall Medical Care is hard to find. lgl
Sunday, October 28, 2007
Off-Line
I will be off-line until at least Thursday, as I am involved in another Residence change. It is not my Wish, but the desire of Time-Warner, who I utilize for access. It is still better than the pre-Argument date of 11/06. lgl
Wealth Transition
Tyler Cowen presents a powerful argument describing the renewed Government use of Private Contractors for military purposes. Tyler cites the greater experience of employees of Private Contractors, though he does not mention that Private Contractors procure the proper weaponry for the military situation; military organizations, in contrast, restricted to a hidebound weapons complement which in the final analysis must be assigned by Congress. This later Event questionable in the Decision process, as it is deeply affected by lobbyist efforts of both a Rent-seeking industry and a positional leadership of the military. I am a personal advocate of Private Contractors for a much different reason, though; believing the political process could benefit by treating Private Contractor labor availability as a source material to judge the Value of any incursion; Private Contractors quickly adjusting in Price and Employment Recruitment based on the dangers involved, and Employee estimates of the degree of success to be expected. Private Contractor Employees are not young kids with basic optimistic attitude, and they avoid what they consider to be poor career choices, unless the Pay is extremely high. Congress, if it wants Hearings, should sharply question the Employees who cover the ground, not the PR segment of the industry.
Paul Lim takes a studied view of the impact of Inflation, and notes the unrest of many Economists and Fund managers on the question of Inflation. Core Inflation Readings are basically skewed through multi-year usage of the practice, itself skewed by the Price advantage of economies of scale in the production of Core Products. Only adjustment to account the percentage volume of the volatile Products in the economy can give proper prospective; translated in Reader-available terms: Two-Thirds of the economy is enduring 3% Inflation, One-Third of the economy suffers from a 6-9% Inflation rate. The Scenario sounds even worse, understanding than the lower half of all Incomes spend almost twice the percentage of their Income in the more Inflationary segment of the economy than do the upper half of all Incomes, and almost all Utilities base their rates on the Inflationary segment of the economy. The final horror resides in the fact that lower Income Wages must rely on foreign Inflation to provide a Wage increase, while the upper half of Incomes make a great share of their Income in Purchase practices which suppress foreign Inflation.
All Parents and Grandparents should read this article, simply to get a handle on the scope of future Wealth transference to Children. One elderly friend of mine, who is quite well off (a banker back in the Days when it paid to be a banker), took the careful route–setting up Trust funds for his children, and limiting their access to the fund until they were in their own Fifties; indeed, I think one of the prime reasons he is still Living lies in the fact that his children have all reached their own Fifties. I hope the Incentive propels him another half-Century. The real Problem consists for all Parents etc. lies in the fact none of the children have developed the expertise their Parents acquired over a half-Century of hard work to make the fortunes initially. I am doing my heirs a favor by leaving them basically little. lgl
Paul Lim takes a studied view of the impact of Inflation, and notes the unrest of many Economists and Fund managers on the question of Inflation. Core Inflation Readings are basically skewed through multi-year usage of the practice, itself skewed by the Price advantage of economies of scale in the production of Core Products. Only adjustment to account the percentage volume of the volatile Products in the economy can give proper prospective; translated in Reader-available terms: Two-Thirds of the economy is enduring 3% Inflation, One-Third of the economy suffers from a 6-9% Inflation rate. The Scenario sounds even worse, understanding than the lower half of all Incomes spend almost twice the percentage of their Income in the more Inflationary segment of the economy than do the upper half of all Incomes, and almost all Utilities base their rates on the Inflationary segment of the economy. The final horror resides in the fact that lower Income Wages must rely on foreign Inflation to provide a Wage increase, while the upper half of Incomes make a great share of their Income in Purchase practices which suppress foreign Inflation.
All Parents and Grandparents should read this article, simply to get a handle on the scope of future Wealth transference to Children. One elderly friend of mine, who is quite well off (a banker back in the Days when it paid to be a banker), took the careful route–setting up Trust funds for his children, and limiting their access to the fund until they were in their own Fifties; indeed, I think one of the prime reasons he is still Living lies in the fact that his children have all reached their own Fifties. I hope the Incentive propels him another half-Century. The real Problem consists for all Parents etc. lies in the fact none of the children have developed the expertise their Parents acquired over a half-Century of hard work to make the fortunes initially. I am doing my heirs a favor by leaving them basically little. lgl
Saturday, October 27, 2007
Corporate Three-Card Monte
This article tends to worry me somewhat, as it should worry any historian of the 1923 German Panic. Traders and Investors seem desperate to cover their positions, and willing to create false Intel rumors in order to generate the Run-ups. Market Insiders are transferring Risk from themselves to the small Investors operating through Investment Funds. They are doing this not only to protect themselves, but to pressure the Fed to effectively increase the Money Supply through lower discount rates. The Fed should make a clear Statement that rates will remain at their current level until the current Market losses are accounted. The Question remains if Bernanke and the Fed Board have the experience to understand this high Inflation impetus.
I read this Post after I had read and written the previous paragraph. I feel more comfortable knowing that Others understand the basic Problem. There are major Losses all over the financial world and Markets, and Market forces are trying to transfer these Losses elsewhere, saving their positions at the expense of uninformed small Investors; most of Whom are elements of Labor who expect their Hedge and Fund managers to protect their interests, rather than the Fund managers own personal interests. The Trouble resides in the fact that the poor performance will be shunted from the actual commission of the poor performance, to Those who trust the poor performers; a practice sure to initiate heavy inflationary pressure.
Greg Mankiw provides this good Description of the current raging Tax Debate in Congress. I have long been of advocate of elimination of Tax preferences, while lowering Tax rates. The dissonant element in both the Rangel Bill, and the alternate Republican proposals, lay in their refusal to force the Corporate world to accept the elimination of Tax preferences Cold Turkey. The advantage of this route would cut the greatest Cost of Accounting procedures, stop the Windfall Gains of the major Corporate entities, and engender almost no Tax impact difference to small Corporations–even without any reduction of Tax rates. This relates to the Above paragraphs, where the major Players tie themselves to the small Players to gain Windfall advantage. lgl
I read this Post after I had read and written the previous paragraph. I feel more comfortable knowing that Others understand the basic Problem. There are major Losses all over the financial world and Markets, and Market forces are trying to transfer these Losses elsewhere, saving their positions at the expense of uninformed small Investors; most of Whom are elements of Labor who expect their Hedge and Fund managers to protect their interests, rather than the Fund managers own personal interests. The Trouble resides in the fact that the poor performance will be shunted from the actual commission of the poor performance, to Those who trust the poor performers; a practice sure to initiate heavy inflationary pressure.
Greg Mankiw provides this good Description of the current raging Tax Debate in Congress. I have long been of advocate of elimination of Tax preferences, while lowering Tax rates. The dissonant element in both the Rangel Bill, and the alternate Republican proposals, lay in their refusal to force the Corporate world to accept the elimination of Tax preferences Cold Turkey. The advantage of this route would cut the greatest Cost of Accounting procedures, stop the Windfall Gains of the major Corporate entities, and engender almost no Tax impact difference to small Corporations–even without any reduction of Tax rates. This relates to the Above paragraphs, where the major Players tie themselves to the small Players to gain Windfall advantage. lgl
Friday, October 26, 2007
The Approach is Everything
David Oppedahl writes a good Piece about the Fed conference on Agricultural R&D, which basically examined the direction of Agricultural R&D, both Past and Future, since WWII. My trouble with the entire Issue lay in the fact that total factor productivity (TFP), while high, has not been sufficiently increased, R&D has been slight in development of natural Fertilizers concerning total devotion of Capital to Fertilization, and R&D has not been devoted to Gene-splicing to develop perennial, Soil-building Crops (I can envision a perennial Corn plant with an attached Misquite root system). Billions are currently being spent, but on short-sighted venues which will become unsustainable after a short Fad Period.
My Mind can expand to the almost grotesque in consideration of avenues which should be explored. We now Spray Herbicide and Insecticide, as well as Cultivate; where it the short-blade grass which forms a lawn mat preventing the growth of Weeds, the congregation of Insects, which happens to be Nitrogen-fixating, transfering Water through it’s root system to the Soil–mat preventing Soil erosion, preventing Winter erosion through Soil cover, and serving as good Fertilizer when plowed into the Soil in Spring? I can understand Seed companies being hesitant in introduction of such types of Grasses, but what is wrong with Government R&D?
I still am trying to interest Someone in the Concept of a Plant form which can be planted in dried Sewage or ground Garbage, which will establish a tight mat of retention of both the Sewage and rainwater, by the growth of deep roots into the underlying desert ground. Impossible? Remember I am a Nebraska Farm kid, who grew up within a Time and history of making Things work, even if One had to get a little inventive. Often R&D has only the limit of lack of imagination by Program managers. lgl
My Mind can expand to the almost grotesque in consideration of avenues which should be explored. We now Spray Herbicide and Insecticide, as well as Cultivate; where it the short-blade grass which forms a lawn mat preventing the growth of Weeds, the congregation of Insects, which happens to be Nitrogen-fixating, transfering Water through it’s root system to the Soil–mat preventing Soil erosion, preventing Winter erosion through Soil cover, and serving as good Fertilizer when plowed into the Soil in Spring? I can understand Seed companies being hesitant in introduction of such types of Grasses, but what is wrong with Government R&D?
I still am trying to interest Someone in the Concept of a Plant form which can be planted in dried Sewage or ground Garbage, which will establish a tight mat of retention of both the Sewage and rainwater, by the growth of deep roots into the underlying desert ground. Impossible? Remember I am a Nebraska Farm kid, who grew up within a Time and history of making Things work, even if One had to get a little inventive. Often R&D has only the limit of lack of imagination by Program managers. lgl
Thursday, October 25, 2007
Irresponsible Leadership
I agree with this U.N. Report, but with serious reservations; the most basic being the assumption that the human race should not impact the ecology. Every Species of animal on this World has had some impact on the ecology, and the rate of extinction of Species is rapid in comparison with post-Ice Age Periods–remember the Dinosaurs, or not! It is true that the human race is outrunning our Food sources, true in the fact that medical advances shortens the life expectancy of the race by increasing the life expectancy of its elements, and true that We burn too much Carbon creating too many Greenhouse gases. Where the Report errs lies in the hysteria underlying it; California fires have produced more Greenhouse gases, than has been saved in improved Carbon use since the passage of Koyoto. Reality states human activity in the United States creates no more Greenhouse gases than would two active volcanos on the North American continent. China, a worse Coal offender, produces no more Greenhouse gases than would three active volcanos in their Country. The Temperatures of the World can be little affected by human action, and Calls for expensive remedial action will be defeated by the World itself. Cooler Air temperatures may allow for larger glacier formations, but also make for more brittle volcanic domes subject to increased rate of breakage; volcanic domes can manage about 48 inches of expansion now, ten Degrees cooler would limit such expansion to maybe only 12-14 inches. Humanity still has not grasped the notion that tinkering with the ecology can be bad, either way One goes.
Risk evaluation firms already seek to minimize the total Cost to Insurers of the California fires, hoping to steady a shaken Market. It is true that much of the Household capital was under-insured, and will not get anything approaching full replacement value. The Costs to the Households, though, will be immense, and Insurers are already establishing a Position to short them of the value Homeowners sought for protection. I do not understand why Market personnel would believe this activity aided the economy, when Insurers will raise Premium rates to pay for legal Costs endured by the attempted Shorts, and the Federal Government stands liable to pay all Shortfalls by venue of Taxation or Borrowing.
I truly liked this Post from Free Exchange. It clearly outlines the limits of corporate responsibility, and because of that limitation, the rationale for limiting Corporate involvement in Politics. Others will say that Corporate involvement is no more than other Special Interests issues, and should be allowed. The trouble with this assessment revolves around the fact that it stands within corporate activity under the process of maximizing Shareholder value to actually buy legislative votes through whatever Means are available; corporations easily possessing the liquidity to fund this Process. lgl
Risk evaluation firms already seek to minimize the total Cost to Insurers of the California fires, hoping to steady a shaken Market. It is true that much of the Household capital was under-insured, and will not get anything approaching full replacement value. The Costs to the Households, though, will be immense, and Insurers are already establishing a Position to short them of the value Homeowners sought for protection. I do not understand why Market personnel would believe this activity aided the economy, when Insurers will raise Premium rates to pay for legal Costs endured by the attempted Shorts, and the Federal Government stands liable to pay all Shortfalls by venue of Taxation or Borrowing.
I truly liked this Post from Free Exchange. It clearly outlines the limits of corporate responsibility, and because of that limitation, the rationale for limiting Corporate involvement in Politics. Others will say that Corporate involvement is no more than other Special Interests issues, and should be allowed. The trouble with this assessment revolves around the fact that it stands within corporate activity under the process of maximizing Shareholder value to actually buy legislative votes through whatever Means are available; corporations easily possessing the liquidity to fund this Process. lgl
Wednesday, October 24, 2007
How It Is
Sometimes Economists fail to make quick assessments of current events, but the California fires and the Georgia drought will bring a major shift in Population centers within the Country; this being a prolonged rather than immediate impact. One cannot be certain of any popular reaction, though it would seem at least 14% of the Displaced Homeowners will resettle elsewhere, and the movement will be towards more environmental-friendly locales. Another hurricane or two, and We may not have a Home Sale crisis. New Orleans may even finally be rebuilt!
Tyler Cowen, and Arnold Kling from which I got the Pointer, fail to observe one aspect of the rapid rise in College tuition, and one which I feel is the relevant issue: this being the saturation levels for college graduate level employment. Colleges, even Harvard, understand the structural equation which states that larger Graduating classes generate higher levels of Unemployment among Graduates; restriction of Class size propels a Prestige of real economic value–much higher Average Income levels for Graduates. Here resides the real incentive propelling Tuition increases, heightened Consumer desire coupled with limited Class size. Institutions of Higher Learning, even Those which are principally Publicly funded, have learned that high-Cost Tuition rates provide a restriction to qualified Students far more effectively than even Grade assignments; under economic constraints of education for higher average Income.
Arnold’s idea of utilizing the same construct on health care will fail, as some level of health care must be available to All, and accreditation rules could only apply to the front-end, cheapest level of medical provision. The idea which must be brought across to Americans remains that only Primary Care can be publicly subsidized. Extreme Expense health care must be Privately-funded, or not provided. Americans must grasp that We can provide each other with basic health care, and grant a comfortable death; what We cannot provide is health care levels per Patient equal in Cost to the average Life earnings of an American, for each and every American. We cannot afford for Anyone, actually, except Those foolish enough to expend their own funds. There are Those who keep a 60-year-old Car in prime working condition, and there will be Those who want to keep an 80-year-old human body in perfect working order; but this is not a goal to be underwritten by Government. lgl
Tyler Cowen, and Arnold Kling from which I got the Pointer, fail to observe one aspect of the rapid rise in College tuition, and one which I feel is the relevant issue: this being the saturation levels for college graduate level employment. Colleges, even Harvard, understand the structural equation which states that larger Graduating classes generate higher levels of Unemployment among Graduates; restriction of Class size propels a Prestige of real economic value–much higher Average Income levels for Graduates. Here resides the real incentive propelling Tuition increases, heightened Consumer desire coupled with limited Class size. Institutions of Higher Learning, even Those which are principally Publicly funded, have learned that high-Cost Tuition rates provide a restriction to qualified Students far more effectively than even Grade assignments; under economic constraints of education for higher average Income.
Arnold’s idea of utilizing the same construct on health care will fail, as some level of health care must be available to All, and accreditation rules could only apply to the front-end, cheapest level of medical provision. The idea which must be brought across to Americans remains that only Primary Care can be publicly subsidized. Extreme Expense health care must be Privately-funded, or not provided. Americans must grasp that We can provide each other with basic health care, and grant a comfortable death; what We cannot provide is health care levels per Patient equal in Cost to the average Life earnings of an American, for each and every American. We cannot afford for Anyone, actually, except Those foolish enough to expend their own funds. There are Those who keep a 60-year-old Car in prime working condition, and there will be Those who want to keep an 80-year-old human body in perfect working order; but this is not a goal to be underwritten by Government. lgl
Tuesday, October 23, 2007
Work, Work, Work!
Some of my Readership may think this article is a type of Joke, but it may well be one of the most serious elements in Today’s Paper. It is my Estimate that the Economy will need almost 45% of the Retired population to fill necessary economy positions by 2015 in order for the Economy to function at full employment. Almost 75% of this working Retired population will need the added Income by that time, and the exploitation of their Skills could increase Productivity by an excess over 20%. I am currently exploring the Concept of a Retiree outreach program where Retirees would work 25 hrs/Week, where Retirees would draw Minimum Wage, but would be covered by the Employers under their Medical Health coverage; total Wage Cost to Employers hopefully kept below $15/hour.
I tend to disagree with the Energy Experts cited in this article, especially on their call to move against the use of wood and dung for Heating and Cooking. Both fuels classify as Deposit trash, and their usage as fuel eliminates an adverse ecological buildup, while it is the consumption of surface carbon; while any switch to another Energy source is basically burning additional subsurface Carbon deposits. The odorous burning of such fuels destroys incentive to consume more than what is necessary, and the pollutants emitted are natural and easily biodegradable. Their dedication to rapid sequestration of Carbon is laudable, though I believe this sequestration must be tied to an alternative fuel source itself, so that the Economy makes a major shift to reliance on surface Carbon for fuel.
Greg Mankiw led me to this list, myself finding it fascinating that there is Now a Feminist Economics. Here I thought it was just People buying, selling, and trading. I do not want to sound too cynical, because the Piece does raise some good points on the structure of the economy. The Feminists score an important point by reference to the Power relationships innate to economic roles, though I would suggest this applies more widely than the position of women in the Workforce. The Quote written by Folbre may introduce some fallacy to their approach, because altruism has always been noted for its rapid half-life; most noted in the arena of Government intervention in the economy. The stance of the Piece may fail as a Critique of Greg Mankiw, because every Author must move through a wealth of material to granulate a Text which is readable; side issues must shine in the Footnotes or bibliography. lgl
I tend to disagree with the Energy Experts cited in this article, especially on their call to move against the use of wood and dung for Heating and Cooking. Both fuels classify as Deposit trash, and their usage as fuel eliminates an adverse ecological buildup, while it is the consumption of surface carbon; while any switch to another Energy source is basically burning additional subsurface Carbon deposits. The odorous burning of such fuels destroys incentive to consume more than what is necessary, and the pollutants emitted are natural and easily biodegradable. Their dedication to rapid sequestration of Carbon is laudable, though I believe this sequestration must be tied to an alternative fuel source itself, so that the Economy makes a major shift to reliance on surface Carbon for fuel.
Greg Mankiw led me to this list, myself finding it fascinating that there is Now a Feminist Economics. Here I thought it was just People buying, selling, and trading. I do not want to sound too cynical, because the Piece does raise some good points on the structure of the economy. The Feminists score an important point by reference to the Power relationships innate to economic roles, though I would suggest this applies more widely than the position of women in the Workforce. The Quote written by Folbre may introduce some fallacy to their approach, because altruism has always been noted for its rapid half-life; most noted in the arena of Government intervention in the economy. The stance of the Piece may fail as a Critique of Greg Mankiw, because every Author must move through a wealth of material to granulate a Text which is readable; side issues must shine in the Footnotes or bibliography. lgl
Monday, October 22, 2007
A New Religion
Greg Mankiw comes up with an excellent Post on the non-applicable blame being placed on international competitiveness. The first clear Statement to be drawn must state that all economies–domestic and foreign–suffer from the same impact from Taxes. The Second claims the supply of Government services is either cheaper in foreign Countries, or the more likely element, such Revenues are misspent in this Country. I would be the first to assent to the fact of excess Rent-seeking within the provision of American Government services, but I expect that the funds allocation process stands as the major culprit behind both the lack of Government services and the greater inefficiency of the American system.
The American political process generates the mis-allocation of Tax revenues. Medicare was probably the last actually uniform Government Service program; a great Share of American Taxpayers were not even born at the time of its authorization, and Add-On elements and Spread requires a new funding system on which no one will agree. Other Government Services were added in ad-hoc manner with a variety of funding forms, leading to a multiplicity of budget creations without adequate Overview, and completely splintered allocation forms. There has never been a standardized Priority format created for Revenue allocation, or an Evaluation system established to rationally compare elements of Government services for the degree of effectiveness. Those who would actually desire to limit Government excess spending have no vehicle to set parameters for Government spending.
I am unlike Greg in the fact I believe that the American people are under-taxed in the lower brackets by about 4%, and the higher Tax brackets by about 8% of total Income. I do not want Anyone to think I am advocating Tax reduction, but I do want to stipulate this assessment is based upon total Taxes–Federal, State, and Local. A real Overhaul of Government will require introduction of an effective Tax system, though one without change in nominal Tax rates; just elimination of Tax loophole Politics. The whole Argument, though, becomes simply academic without a uniform Government Rating system for the effectiveness of Government expenditures. lgl
The American political process generates the mis-allocation of Tax revenues. Medicare was probably the last actually uniform Government Service program; a great Share of American Taxpayers were not even born at the time of its authorization, and Add-On elements and Spread requires a new funding system on which no one will agree. Other Government Services were added in ad-hoc manner with a variety of funding forms, leading to a multiplicity of budget creations without adequate Overview, and completely splintered allocation forms. There has never been a standardized Priority format created for Revenue allocation, or an Evaluation system established to rationally compare elements of Government services for the degree of effectiveness. Those who would actually desire to limit Government excess spending have no vehicle to set parameters for Government spending.
I am unlike Greg in the fact I believe that the American people are under-taxed in the lower brackets by about 4%, and the higher Tax brackets by about 8% of total Income. I do not want Anyone to think I am advocating Tax reduction, but I do want to stipulate this assessment is based upon total Taxes–Federal, State, and Local. A real Overhaul of Government will require introduction of an effective Tax system, though one without change in nominal Tax rates; just elimination of Tax loophole Politics. The whole Argument, though, becomes simply academic without a uniform Government Rating system for the effectiveness of Government expenditures. lgl
Sunday, October 21, 2007
As the World Turns
The Chinese Communist Party Congress closed, and for Those involved in international politics, it is a sign of real Change coming to China. The ideological aims of Hu Jintao has finally defeated the corrupt faction of his predecessor Jiang Zemin, replacing the Defense Minister, the International Trade Minister, the Law Enforcement Minister, and the internal corruption watchdog Minister. The elected Congress and Central Discipline Committee will support Hu’s plans to develop the internal markets of China, instead of reliance on foreign trade to enrich the Party and their Dependents. Hu has a 5-Year mandate which will likely bring real change to the internal Chinese economy, bringing markets to the countryside.
I disagree with this article on expectation of higher prices for Energy, as I previously disagreed with the IMF assessment that the Dollar was still overvalued. The Price of Oil is going to decline as Hedge Funds come to realize there is not the same profitability in Oil Trading with the price at $90/barrel as was there when Oil was $60/barrel; it all being a question of buy-in Costs and Sale Costs when One is in a marginal Profit business. The second element to the Oil question is American driving practices; Retail Fuel outlets are recording a continuing slide in total Fuel Sales, even though the gap between Pump-Price and Oil Price has widened. Even the younger Generation is not taking the SUVs out as often, or driving that far, new Housing is more Energy conservative as the old Heating Oil Housing units are being torn down, and Manufacturing is shipping Oil-intensive Plant Overseas. Alternative Energy Sourcing has been slow in development and use, but reluctantly coming online. It is the basic reason why I feel that the Dollar will gain in value from this point, as Europe and Japan have already integrated their major Gains from Energy conservation, and the rest of the World will be massively impacted by any Energy Cost increases.
Here is a Post where I agree with the basic sentiment of the Viewpoints expressed. A major factor which must be factored into the Equation, is Consumer boredom with the new IT additions. The Kids are becoming bored with the new Toys, which are more Cosmetic than operational. Marketing has to push harder, and Spend more, to get the same Consumer response; the rising Cost of Product is definitely no help in the effort. Retailers are all listing a shift in Consumption to the Staples, an effect which will be far more pronounced in foreign Sales. The basic American advantage comes in the inability of the World to reduce American Exports drastically, as what the World buys from the U.S. remains necessary to their economies. The American disadvantage is that American Consumption Products find little market avenues for expansion; something deeply affected by higher Energy Pricing. lgl
I disagree with this article on expectation of higher prices for Energy, as I previously disagreed with the IMF assessment that the Dollar was still overvalued. The Price of Oil is going to decline as Hedge Funds come to realize there is not the same profitability in Oil Trading with the price at $90/barrel as was there when Oil was $60/barrel; it all being a question of buy-in Costs and Sale Costs when One is in a marginal Profit business. The second element to the Oil question is American driving practices; Retail Fuel outlets are recording a continuing slide in total Fuel Sales, even though the gap between Pump-Price and Oil Price has widened. Even the younger Generation is not taking the SUVs out as often, or driving that far, new Housing is more Energy conservative as the old Heating Oil Housing units are being torn down, and Manufacturing is shipping Oil-intensive Plant Overseas. Alternative Energy Sourcing has been slow in development and use, but reluctantly coming online. It is the basic reason why I feel that the Dollar will gain in value from this point, as Europe and Japan have already integrated their major Gains from Energy conservation, and the rest of the World will be massively impacted by any Energy Cost increases.
Here is a Post where I agree with the basic sentiment of the Viewpoints expressed. A major factor which must be factored into the Equation, is Consumer boredom with the new IT additions. The Kids are becoming bored with the new Toys, which are more Cosmetic than operational. Marketing has to push harder, and Spend more, to get the same Consumer response; the rising Cost of Product is definitely no help in the effort. Retailers are all listing a shift in Consumption to the Staples, an effect which will be far more pronounced in foreign Sales. The basic American advantage comes in the inability of the World to reduce American Exports drastically, as what the World buys from the U.S. remains necessary to their economies. The American disadvantage is that American Consumption Products find little market avenues for expansion; something deeply affected by higher Energy Pricing. lgl
Saturday, October 20, 2007
New Tax Package
Readers need to integrate this article because it describes the basic malaise of the American economy. Economic gains are not widely shared by the Population; the actual distribution of benefits is actually very narrow with probably less than 10 million Americans gaining from the new additions to Wealth. This would not be a Problem, except Product Pricing resets in reflection to the total aggregation of Wealth, whether there has actually been a expanded gain in aggregate Purchasing Power. Translation states that Static Incomes under such a Scenario holds loss of both Income and Purchasing Power. People can go broke simply working as hard as they did before. This brings on a multi-layered crisis where Work Incentives are lost, Living Standards are lost, and Households fail.
One method for handling the Decay in Place process comes in the form of artificial Government decrees–Prices Freezes, Minimum Wage limits, and Welfare assistance. Any Economist will tell of the hazards of such an approach: Price Freezes do not forestall Inflationary pressures, they simply destroy the Incentive of Retail to sell Product, and disturb the gradual Price adjustment process. Minimum Wage limits only affect the lowest spectrum of Labor, doing nothing for the equally affected static, higher-Income Labor, who also lose Purchasing Power without the present power of maintaining the Shelf Wage Scales. Welfare assistance becomes too expensive as the ranks of Enrollees grow under the programs, while such programs themselves propel inflationary Pricing.
The theoretical Problem facing this Country today can be stated as a Need to alter the economic incentives currently impacting different industries in the economy; most industries still hooked to the old economic incentives founded before the new Growth, and the growth industries possessing extremely high incentives based upon the rapid Gains in these industries. I personally feel any alteration in the Incentives granted across the spectrum of the economy can only be affected by sharper impact in real graduated Tax levels; this means that the Rich have to suffer a much deeper bite from the Tax. Higher Tax rates, though, stand as a real economic depressive force–destroying real Incentives to economic effort. I have not found the same retardation in the loss of Tax exemptions and breaks.
My real Proposal would place Income level limits on all Tax deductions, exemptions, Retirement Tax delays, etc. Personal Deductions would only apply if total Income was less than $100,000. Delayed Tax Payments would only apply if total Income was less than $200,000 per year, with half of effective Tax being due for all Incomes over $50,000 per year. Mortgage Tax deductibility will only apply to Housing of Value of less than $400,000. Individual Businesses, Partnerships, and Corporations must pay at least half of the face-value Tax, if their Income exceeds $2 million per year; no matter what concurrent Tax loopholes exist. The Goal of my Tax Package would be to place a higher premium on persistent, steady Income, with much less advantage to rapid expansion practices. lgl
One method for handling the Decay in Place process comes in the form of artificial Government decrees–Prices Freezes, Minimum Wage limits, and Welfare assistance. Any Economist will tell of the hazards of such an approach: Price Freezes do not forestall Inflationary pressures, they simply destroy the Incentive of Retail to sell Product, and disturb the gradual Price adjustment process. Minimum Wage limits only affect the lowest spectrum of Labor, doing nothing for the equally affected static, higher-Income Labor, who also lose Purchasing Power without the present power of maintaining the Shelf Wage Scales. Welfare assistance becomes too expensive as the ranks of Enrollees grow under the programs, while such programs themselves propel inflationary Pricing.
The theoretical Problem facing this Country today can be stated as a Need to alter the economic incentives currently impacting different industries in the economy; most industries still hooked to the old economic incentives founded before the new Growth, and the growth industries possessing extremely high incentives based upon the rapid Gains in these industries. I personally feel any alteration in the Incentives granted across the spectrum of the economy can only be affected by sharper impact in real graduated Tax levels; this means that the Rich have to suffer a much deeper bite from the Tax. Higher Tax rates, though, stand as a real economic depressive force–destroying real Incentives to economic effort. I have not found the same retardation in the loss of Tax exemptions and breaks.
My real Proposal would place Income level limits on all Tax deductions, exemptions, Retirement Tax delays, etc. Personal Deductions would only apply if total Income was less than $100,000. Delayed Tax Payments would only apply if total Income was less than $200,000 per year, with half of effective Tax being due for all Incomes over $50,000 per year. Mortgage Tax deductibility will only apply to Housing of Value of less than $400,000. Individual Businesses, Partnerships, and Corporations must pay at least half of the face-value Tax, if their Income exceeds $2 million per year; no matter what concurrent Tax loopholes exist. The Goal of my Tax Package would be to place a higher premium on persistent, steady Income, with much less advantage to rapid expansion practices. lgl
Friday, October 19, 2007
Medical Debate
Tyler Cowen has a successful number of Points on the microfacts of the health care system. Tyler and I are on opposite sides of the fence concerning health care, I being a single-payer advocate; still, Anyone not conversant with these facts should not be discussing health care. I will here supply an alternate list of Talking Points.
1) American health care outcomes admittedly are better than the Numbers would suggest, but that neither American or other national outcomes are terribly great. A great source of outcome gain at all levels would be some nutritional restrictions on Restaurants and Food-Providers, over and above Sanitary restrictions. These Restrictions could limit Calorie content per meal unit, restriction of overweight Customers to a Diet Menu, and Advertising concentration of factors other than high Meat content.
2) A single-payer system should utilize intelligent spread of Costs. The total Health Care Cost of this Country should be spread over the total number of Doctor, Clinic, and Hospital visitations, and each Occurrence should carry identical payment Charge. The Poor can thereafter be easily determined, and the total welfare benefit Cost designed for adequate payment. Health Insurance could not claim non-underwriting item declarations, and premium Costs easily determined.
3) Much of American medical innovation is Cosmetic, of a nature simple in design, for the express purpose of attaining Patent royalties. An independent Board of Medical Examiners should be established to approve all Patent applications, based solely on Evidence of genuine benefit; lack of relevant approval will be denial of Patent. Approved Patents should then go to a Board of Medical Economists to determine how much the Patent should be worth per Unit of application; Corporations forbidden to charge more as royalty, and other Companies allowed to itself produce such Products with payment of the stated royalty Fee.
4) Doctors, Clinics, and Hospitals should be limited in the number of Patients for which they may provide health services. Limited? Yes–greed itself should not generate a lack of qualified Time and Care provided. This has the added benefit of propelling sufficient medical facilities being capitalized to serve Patient levels.
5) Cosmetic surgery and medical procedures should be carefully separated from normal health care, and unpaid unless Patients get a specific Waiver from the joint Boards of Medical and Medical Economists established for determination of Medical Patents. This joint Committee must also underwrite all Research Trials conducted under subsidized condition.
The above Considerations would go far to improve American health care. I sketch out an overall Patient loss of 12 lb. apiece due to imposition of Nutritional limitations in reduction of Public meal size. This is all Kentucky Windage here, but this would likely translate into a 18% gain in overall health. The absolute spread of Medical Cost would accurately define true, or real Costs of medical provision, while removing most of the inequities from health care Insurance provision. Medical Patents will become cheaper and more realistic, and the Vain will have to subsidize their own medical treatments. lgl
1) American health care outcomes admittedly are better than the Numbers would suggest, but that neither American or other national outcomes are terribly great. A great source of outcome gain at all levels would be some nutritional restrictions on Restaurants and Food-Providers, over and above Sanitary restrictions. These Restrictions could limit Calorie content per meal unit, restriction of overweight Customers to a Diet Menu, and Advertising concentration of factors other than high Meat content.
2) A single-payer system should utilize intelligent spread of Costs. The total Health Care Cost of this Country should be spread over the total number of Doctor, Clinic, and Hospital visitations, and each Occurrence should carry identical payment Charge. The Poor can thereafter be easily determined, and the total welfare benefit Cost designed for adequate payment. Health Insurance could not claim non-underwriting item declarations, and premium Costs easily determined.
3) Much of American medical innovation is Cosmetic, of a nature simple in design, for the express purpose of attaining Patent royalties. An independent Board of Medical Examiners should be established to approve all Patent applications, based solely on Evidence of genuine benefit; lack of relevant approval will be denial of Patent. Approved Patents should then go to a Board of Medical Economists to determine how much the Patent should be worth per Unit of application; Corporations forbidden to charge more as royalty, and other Companies allowed to itself produce such Products with payment of the stated royalty Fee.
4) Doctors, Clinics, and Hospitals should be limited in the number of Patients for which they may provide health services. Limited? Yes–greed itself should not generate a lack of qualified Time and Care provided. This has the added benefit of propelling sufficient medical facilities being capitalized to serve Patient levels.
5) Cosmetic surgery and medical procedures should be carefully separated from normal health care, and unpaid unless Patients get a specific Waiver from the joint Boards of Medical and Medical Economists established for determination of Medical Patents. This joint Committee must also underwrite all Research Trials conducted under subsidized condition.
The above Considerations would go far to improve American health care. I sketch out an overall Patient loss of 12 lb. apiece due to imposition of Nutritional limitations in reduction of Public meal size. This is all Kentucky Windage here, but this would likely translate into a 18% gain in overall health. The absolute spread of Medical Cost would accurately define true, or real Costs of medical provision, while removing most of the inequities from health care Insurance provision. Medical Patents will become cheaper and more realistic, and the Vain will have to subsidize their own medical treatments. lgl
Thursday, October 18, 2007
How Soon is Soon?
Here is a perfectly sensible article, where I will start to reach into the Ozone in explanation of it. The first item is that one measure states the 30 Industrialized Countries averaged 36.2% of GDP going to taxes–including the United States. Is the measure correct? No–but the Error is on the low side with the actual Average closer to 40%.The second probability states that Government Spending has produced at least 50% of the increase in worldwide Corporate Profits since 2000. The third high probability states approximately 70% of the Cost increase in Health Care since 1965 have come from Government personal welfare programs; the real Cost of Drugs and Medical Equipment is no higher than the Norm in the Chemical and Technology industries. The fourth Protocol statement says the Bush Tax Cuts were a big Lie, simply altering and hiding the increased impact of Taxation. The last on-the-ground evaluation is that Profits-Taking absorb at least 30% of all Government expenditures, and in-house provision of Government Services probably costs only half at much as Outsourcing Government Services through Private Sector agencies. Everyone in the Corporate world will claim I have no proof, and well, the Proof resides in internal Corporate records.
The article states that the Cost of Government has risen over 20% since 1975, a Statement which might not check all the Expenditures of Government; the adjustment for Inflation will only go so far, and all elements of Government Spending are up substantially. One must remember that provision of Government services have increased every year through the Period, Enrollees on each Government program have increased every year of the Period, the charges of Service Providers has increased every year of the Period, and Pork Barrel has become an Art form. Taxpayers need to forget the high Taxes, and roust the Government officials who have brought the excess expenditures.
The Comments of C. Eugene Steurele should be studied in the article. The Income inequality which initially propelled Tax revenue increases will fail under increasing Inflation. Government expenditures fueled the Profitability which paid the increased Tax revenues, but only with a Government commitment to provision of Services, which cannot be supplied under Inflationary conditions without raising Tax rates. The Bush administration is currently supplying this overall provision of Services by Debt accumulation, but this process will fail in the immediate future; foreign Buyers of American Debt will disappear under a declining Dollar. We are in an evolving Crisis, which will reach a climax in the near future. lgl
The article states that the Cost of Government has risen over 20% since 1975, a Statement which might not check all the Expenditures of Government; the adjustment for Inflation will only go so far, and all elements of Government Spending are up substantially. One must remember that provision of Government services have increased every year through the Period, Enrollees on each Government program have increased every year of the Period, the charges of Service Providers has increased every year of the Period, and Pork Barrel has become an Art form. Taxpayers need to forget the high Taxes, and roust the Government officials who have brought the excess expenditures.
The Comments of C. Eugene Steurele should be studied in the article. The Income inequality which initially propelled Tax revenue increases will fail under increasing Inflation. Government expenditures fueled the Profitability which paid the increased Tax revenues, but only with a Government commitment to provision of Services, which cannot be supplied under Inflationary conditions without raising Tax rates. The Bush administration is currently supplying this overall provision of Services by Debt accumulation, but this process will fail in the immediate future; foreign Buyers of American Debt will disappear under a declining Dollar. We are in an evolving Crisis, which will reach a climax in the near future. lgl
Wednesday, October 17, 2007
The slightly gray White Knights
Arnold Kling again comes in with a easy-to-Read article on Masonomics; the Word itself an aggrandizement of a group who are mighty in their own minds, and may just be. George Mason does sure enough have a Powerhouse Econ Dept. There is so much to agree with in Arnold’s descriptions, and also much to disagree with under study. Masonomics, MIT, and I agree that perfect markets are a ‘bad approximation’ of reality. I would go further and state that perfect markets will create a static condition where Profits reduce to minimalize Production Costs, with loss of Incentive to capitalize new Investment because simple Purchase is the Risk-avoidance cheaper route. It is the imperfection of markets which generate the Investment advantage.
Masonomics possesses the regretful failing of a detestation of Government, refusing to grant it a rightful position in the economic spectrum. The basic underpinning for this lies in the inefficiency of Government in all but one area: Taxation. They hold the traditional Conservative hatred of usurpation of another’s money, discounting the legality of the Government’s activity; conscious they are the Prey, not the Predator. They discard the advantages of full employment theory, labor economics, and protective regulation, all because they contain real threats of taxation. Their dedication to Free Trade resides on the real desire to strip taxation from the economy by venue of purchase of foreign Goods. This Attitude prevents their appellation as the Vanguard of economics.
Masonomics worry about Government failure rests in this misapprehension that Government taxation and action are unnatural economic events. Government will always be the largest Customer that the economy will have, and the least-caring Customer in terms of the Prices charged, and the Profits derived. The expenditure patterns of Government are uniform, and thereby naturally regulating; the worst defect of Government being the elimination of deviant Consumption patterns by itself. I truly agree with Robert Hanson about excess medical care provision, and have established for myself that Government regulation causes the excess expenditure, generating the massive Windfall Profits of the health industry. Masonomics, though, would strangle the Baby, because of the existence of the dirty diaper. lgl
Masonomics possesses the regretful failing of a detestation of Government, refusing to grant it a rightful position in the economic spectrum. The basic underpinning for this lies in the inefficiency of Government in all but one area: Taxation. They hold the traditional Conservative hatred of usurpation of another’s money, discounting the legality of the Government’s activity; conscious they are the Prey, not the Predator. They discard the advantages of full employment theory, labor economics, and protective regulation, all because they contain real threats of taxation. Their dedication to Free Trade resides on the real desire to strip taxation from the economy by venue of purchase of foreign Goods. This Attitude prevents their appellation as the Vanguard of economics.
Masonomics worry about Government failure rests in this misapprehension that Government taxation and action are unnatural economic events. Government will always be the largest Customer that the economy will have, and the least-caring Customer in terms of the Prices charged, and the Profits derived. The expenditure patterns of Government are uniform, and thereby naturally regulating; the worst defect of Government being the elimination of deviant Consumption patterns by itself. I truly agree with Robert Hanson about excess medical care provision, and have established for myself that Government regulation causes the excess expenditure, generating the massive Windfall Profits of the health industry. Masonomics, though, would strangle the Baby, because of the existence of the dirty diaper. lgl
Tuesday, October 16, 2007
What Year is This?
I will start by straight out telling Readers that I agree with this viewpoint, and then I go on to mention that increased Water pricing easily can be the worst Taxing mode in existence. Deep-Pocket heavy Users get cheap rates based on bulk usage, content within their threats to reduce employment if the Water rates apply to themselves. Homeowners can do little to alter their Water consumption, once they have shut off their Dishwashers, stopped washing their Cars, and watch their lawns turn yellow; increased Water rates become a simple Tax upon existence. Retailers of all stripes find their Public facilities becoming bathhouses to their detriment. Increased Water rates incurred to fund expansion of Water resource capitalization may benefit, but any punitive effort to punish Water Consumers for overuse always impacts the wrong elements in the wrong manner.
I must be suffering from Memory lapse: it sounds like South Vietnam, Republic of. We do not have enough Troops to hold the Villes, every element of the Government in on the Take, the Black Market is more powerful than normal Commerce, Insurgents simply transplant themselves to unpatrolled areas and start up again, and the Civilian populations are as terrified of American entrance as they are of Insurgents. High Command is living in their own self-developed Disneyland, coming out only to go Home. Journalists are dismissed and condemned because they record the reactions of the Civilian population. Are you sure We are on Iraq now?
Matthew E. Kahn notes the savage practices private Insurers are beginning to adopt to insuring homes along the Coasts. He points out that Governments become the Insurers of last resort when private Insurers prove unwilling to underwrite the Costs, and that it effectively becomes an subsidy granted Coastal areas by the Interior; one that will become increasingly more expensive under climate change conditions, and will become effectively more resisted by Interior Representatives. It is indeed a Problem, but I would point out a Need to set limits to private Insurer profitability and Labor Costs. Private Insurance of all types has become a Cash Cow for Participants, and a industry leader is Labor Costs in comparison to Capital, Bonuses to Executives, and Profits to Stockholders; a situation where the actual practice of underwriting Risk has diminished in importance. lgl
I must be suffering from Memory lapse: it sounds like South Vietnam, Republic of. We do not have enough Troops to hold the Villes, every element of the Government in on the Take, the Black Market is more powerful than normal Commerce, Insurgents simply transplant themselves to unpatrolled areas and start up again, and the Civilian populations are as terrified of American entrance as they are of Insurgents. High Command is living in their own self-developed Disneyland, coming out only to go Home. Journalists are dismissed and condemned because they record the reactions of the Civilian population. Are you sure We are on Iraq now?
Matthew E. Kahn notes the savage practices private Insurers are beginning to adopt to insuring homes along the Coasts. He points out that Governments become the Insurers of last resort when private Insurers prove unwilling to underwrite the Costs, and that it effectively becomes an subsidy granted Coastal areas by the Interior; one that will become increasingly more expensive under climate change conditions, and will become effectively more resisted by Interior Representatives. It is indeed a Problem, but I would point out a Need to set limits to private Insurer profitability and Labor Costs. Private Insurance of all types has become a Cash Cow for Participants, and a industry leader is Labor Costs in comparison to Capital, Bonuses to Executives, and Profits to Stockholders; a situation where the actual practice of underwriting Risk has diminished in importance. lgl
Monday, October 15, 2007
The MDT
I will be perfectly honest; I am sure I have heard of the Names Hurwicz, Myerson, and Miskin, but can’t remember where, except possibly a Golf Tournament. I did once read a couple things written by Miskin, though where, what, or how come totally escapes me. MDT, or mechanism design theory, reminds me of what my Mechanic tells me about vehicle maintenance. I suspect I may have listened to Hurwicz once at UNL, if he did once Guest lecture there; though undoubtedly I must have slept through the performance. This Post by Alex Tabarrock introduces me to my first cognitive awareness of MDT. I come well-prepared to honor the new Nobel-ity.
The outline of MDT, as gifted to myself by Alex, leaves me perplexed and needing more study. The entire theory seems to revolve around Hayek’s imperfect information. It also poses the ethical problem of conditioning Response to provide the Seller with information, while presenting the potential Buyers with increased imperfect information. The participation constraint seems devoid of capture, as all potential Buyers have the imagery of successful bidding; where they devote labor in documentation and evaluation under the expectation of success, under the illusion that the Seller will entertain their bid. Only one potential bidder will find his effort worthwhile, and he will have to pay more for his extended participation, so the incentive compatibility constraint cannot be truly induced. The Seller locates a higher Price, but only by the creation of Market restraints which hides the true value of the Product.
I am sure I also missed some true value in the MDT, but I feel some degree of moral revulsion at the use of imperfect information to mask true Market values, while organizing the Market structure to deceive the potential Buyers. It is again using institutional practice to freeze out potential individual profit, which is otherwise guaranteed under free market structure. There is also great danger in masking true market values, leading to overpriced Product propelling hazardous levels of Inflation. I am sure Hurwicz, Meyerson, and Miskin are quite honorable, hard-working Economists who deserve their reward; I just wish this blessing was based on something other than MDT. lgl
The outline of MDT, as gifted to myself by Alex, leaves me perplexed and needing more study. The entire theory seems to revolve around Hayek’s imperfect information. It also poses the ethical problem of conditioning Response to provide the Seller with information, while presenting the potential Buyers with increased imperfect information. The participation constraint seems devoid of capture, as all potential Buyers have the imagery of successful bidding; where they devote labor in documentation and evaluation under the expectation of success, under the illusion that the Seller will entertain their bid. Only one potential bidder will find his effort worthwhile, and he will have to pay more for his extended participation, so the incentive compatibility constraint cannot be truly induced. The Seller locates a higher Price, but only by the creation of Market restraints which hides the true value of the Product.
I am sure I also missed some true value in the MDT, but I feel some degree of moral revulsion at the use of imperfect information to mask true Market values, while organizing the Market structure to deceive the potential Buyers. It is again using institutional practice to freeze out potential individual profit, which is otherwise guaranteed under free market structure. There is also great danger in masking true market values, leading to overpriced Product propelling hazardous levels of Inflation. I am sure Hurwicz, Meyerson, and Miskin are quite honorable, hard-working Economists who deserve their reward; I just wish this blessing was based on something other than MDT. lgl
Sunday, October 14, 2007
Second-Best Camp
Gretchen Morgenson attempts to explain the S.E.C. rule changes to limit the power granted to Investors from the 2006 Court of Appeals decision against American International Group. The essence of the S.E.C. rules is again to make it functionally impossible for Investor groups to challenge current Management Boards, and even worse, their ongoing policy for the Corporations. Lack of proxy access prevents effective nomination of a competitive Board alignment, and stops Investor-sponsored policy changes from being voted upon under the proxy system. Injured Investors should appeal for another Court decision which would insist all policy initiatives and Board Electees must be on the proxy without Management supporting or disparaging any policy or Electee, if Investor signatures of 1000 can be accumulated prior to the proxy printing process.
The previous argument ties in well with this article by Joe Nocera. The Question revolves around exactly when is a market created in the realm of C.E.O. Pay Packages. A unitary slate of Candidates on a proxy cannot possibly lead to the development of a market for Pay Packages, where Management sets the Candidates, who approve all the Pay Packages–including Those for themselves; it is a real retention here to remember that Management has current total control of the issuances of the proxy system. Still, there is a market for Pay Packages, if one checks the extortion practices exercised by fellow Corporate Managements. It reminds of a set of Bank thieves in a Bank Vault, trying to estimate how much they should steal by the weight they must carry.
I was meandering through the Internet landscape, and came across this Post by Dani Rodrik. He talks about the market imperfections which cause him, and others of the Second-Best camp, to doubt the efficacy of economic models to perfectly predict economic results. I belong to the Second-Best camp myself, though unlike the others, I find the real imperfection derives from moral corruption of Managers, rather than from hidden Market deterrents to classic performance. It is the pursuit of cheap, illicit Profits which brings on almost every imperfection in the Market system when examined. I also, though, belong to the Third Camp, which finds Government probably the worst vehicle for economic success ever devised. lgl
The previous argument ties in well with this article by Joe Nocera. The Question revolves around exactly when is a market created in the realm of C.E.O. Pay Packages. A unitary slate of Candidates on a proxy cannot possibly lead to the development of a market for Pay Packages, where Management sets the Candidates, who approve all the Pay Packages–including Those for themselves; it is a real retention here to remember that Management has current total control of the issuances of the proxy system. Still, there is a market for Pay Packages, if one checks the extortion practices exercised by fellow Corporate Managements. It reminds of a set of Bank thieves in a Bank Vault, trying to estimate how much they should steal by the weight they must carry.
I was meandering through the Internet landscape, and came across this Post by Dani Rodrik. He talks about the market imperfections which cause him, and others of the Second-Best camp, to doubt the efficacy of economic models to perfectly predict economic results. I belong to the Second-Best camp myself, though unlike the others, I find the real imperfection derives from moral corruption of Managers, rather than from hidden Market deterrents to classic performance. It is the pursuit of cheap, illicit Profits which brings on almost every imperfection in the Market system when examined. I also, though, belong to the Third Camp, which finds Government probably the worst vehicle for economic success ever devised. lgl
Saturday, October 13, 2007
Honest Venality
Somewhere in this Tyler Cowen montague rests the suggestion, I believe, that social insurance may already be overrated, and that progressive taxation, while quite kosher, seems to fall too heavily on the higher Incomes. I might feel the same as Tyler, if one of a number of conditions were existent. The first and most paramount consists of enjoying the Income parameters which would leave myself affected by the chicanery. The second condition would alter my belief that persons enjoying higher Income actually don’t work much harder than their unfortunate lower Income brethren; the later Group often working less because they cannot find or fund the additional Work–or is that the Third condition. It may or may not be a potential Fourth condition that higher Incomes produce a much higher Pollution rate, basically based upon their retention of the greatest majority of that Income; this being simply a disgruntled anger at flagrant expression of Wealth, elicited from Those who ‘Work Hard for the Money’. There is always the final condition which states that a Tax Code littered with Tax loopholes cannot be considered a progressive taxation.
Greg Mankiw finds Us a Chart from Chris Edwards, who contends that the Bush Tax Cuts simply reversed the Clinton Tax increases for the top two groups, while giving all Tax Groups a massive Cut in Taxes. I sincerely wish brilliant young Economists would include Tax rate data from the 1970s and Reagan Era as well, which could outline the direction of Tax rates in this Country with perhaps greater understanding for All. It also might be more edifying to actually chart the Tax Revenue flows from these Income Groups for the entire Periods involved as well; I have always liked charts that flow upwards to the Right. It also amazes me that Taxpayers cannot seem to even pay their monthly Electric bill from the great Tax Cuts, until One hits the top 5% of Income Earners. Anyway, the Bush Tax Cuts were supposed to have brought great Prosperity.
Paul Krugman is analyzed by Mark Karlin, which I thought to provide for the heightened awareness of my Readers, though I admittedly read very little of it; the basic rationale being my clinging to my own cherished bias for and against Paul Krugman. It is still worth Reading for comprehension of a renowned Commentator and Economist. Paul may not understand that the chief Conservative bias against helping other People, comes from their basic desire to earn Money off the existence of those People, not to support such existence. I personally lack great desire to help these People as well, but this disincentive does not derive from a personal desire to save Money. lgl
Greg Mankiw finds Us a Chart from Chris Edwards, who contends that the Bush Tax Cuts simply reversed the Clinton Tax increases for the top two groups, while giving all Tax Groups a massive Cut in Taxes. I sincerely wish brilliant young Economists would include Tax rate data from the 1970s and Reagan Era as well, which could outline the direction of Tax rates in this Country with perhaps greater understanding for All. It also might be more edifying to actually chart the Tax Revenue flows from these Income Groups for the entire Periods involved as well; I have always liked charts that flow upwards to the Right. It also amazes me that Taxpayers cannot seem to even pay their monthly Electric bill from the great Tax Cuts, until One hits the top 5% of Income Earners. Anyway, the Bush Tax Cuts were supposed to have brought great Prosperity.
Paul Krugman is analyzed by Mark Karlin, which I thought to provide for the heightened awareness of my Readers, though I admittedly read very little of it; the basic rationale being my clinging to my own cherished bias for and against Paul Krugman. It is still worth Reading for comprehension of a renowned Commentator and Economist. Paul may not understand that the chief Conservative bias against helping other People, comes from their basic desire to earn Money off the existence of those People, not to support such existence. I personally lack great desire to help these People as well, but this disincentive does not derive from a personal desire to save Money. lgl
Friday, October 12, 2007
Income Accounting
Sanders and Hambrick have written a Paper on risk preference among Corporate Executives, finding a greater likelihood of risk-taking under Conditions of heavy Stock Options usage, but that the risk-taking is far more precarious; and accounting fraud far more likely to result upon business failure. I have always been a relative opponent of Stock Options, thinking such practice allows for another level of Power shifts at the Corporate Board level, further deteriorating Stockholder representation in the Decision process. Like all things I consider, I study on the problem, and have developed my own system of Executive compensation I feel would operate better; basically leading to a unity of Executive and Stockholder interests.
My basic idea starts with elimination of the Windfall mentality which currently infects the Corporate structure. The first Step is to establish a permanent Bonus system for Executives, based upon set levels of Net Profits; when the later decreases, so does the amount of Bonus, and vice versa. The next Step is to forbid immediate execution of the awards; stipulating that all Bonuses will only activate upon Retirement from the organization. Bonuses cannot exceed Twenty in number, paid only from future revenues, but based upon the Profits record from the Executive’s years of employment where Accounting fraud is verified not to have been used. Corporate Executives immediately desire high performance, under their own reign, and under the management of their Successors. The only Problem with this system of compensation remains the necessary backbone expressed by Stockholders, in order to push through this compensation system.
The Bush Tax Cuts gets a fair Profile from this article, which indicates the basic inequity of the Tax Cuts in the first place. Some 95% of all Taxpayers reported reduced Income in Inflation-adjusted terms in 2005 from their Income in 2000. Take-home Pay was stated to have increased, but in terms so small as to be ludicrous; you had to make in excess of $62k to make more than $52 more per month, even the One Percenters only saved $5400 per month on Incomes averaging $1.2 million per year. I seriously wonder why Bush’s own Supporters don’t turn against him. The Tax Cuts were financed by a vast increase in National Debt, and if this Debt were Accounted like a Mortgage, the loss of Income would seem monumental. lgl
My basic idea starts with elimination of the Windfall mentality which currently infects the Corporate structure. The first Step is to establish a permanent Bonus system for Executives, based upon set levels of Net Profits; when the later decreases, so does the amount of Bonus, and vice versa. The next Step is to forbid immediate execution of the awards; stipulating that all Bonuses will only activate upon Retirement from the organization. Bonuses cannot exceed Twenty in number, paid only from future revenues, but based upon the Profits record from the Executive’s years of employment where Accounting fraud is verified not to have been used. Corporate Executives immediately desire high performance, under their own reign, and under the management of their Successors. The only Problem with this system of compensation remains the necessary backbone expressed by Stockholders, in order to push through this compensation system.
The Bush Tax Cuts gets a fair Profile from this article, which indicates the basic inequity of the Tax Cuts in the first place. Some 95% of all Taxpayers reported reduced Income in Inflation-adjusted terms in 2005 from their Income in 2000. Take-home Pay was stated to have increased, but in terms so small as to be ludicrous; you had to make in excess of $62k to make more than $52 more per month, even the One Percenters only saved $5400 per month on Incomes averaging $1.2 million per year. I seriously wonder why Bush’s own Supporters don’t turn against him. The Tax Cuts were financed by a vast increase in National Debt, and if this Debt were Accounted like a Mortgage, the loss of Income would seem monumental. lgl
Thursday, October 11, 2007
Marines and Deflation
The Marines want to move on Afghanistan, and leave Iraq to the Army; a genuine Troop shift for obvious Purpose. Concentration on Afghanistan would allow the Marines to bring their own equipment to the Country, maximize their effort, and minimize their potential Casualties. The first benefit for the Marines is the separation of Marine and Army performance, highlighting the fact that Marine performance has been superior to that of the Army; the Army lacking the orientation to military virtues, even the Reserve and National Guard elements have been showing better military factor Readings. Marines are winning their war in Iraq, against a more determined force than faced by the Army. The Marines expect they will face less disciplinary problems in Afghanistan, where they will patrol traditional terrain of Operations, unlike the urbanized setting they face in Iraq. Combined Operations in Afghanistan will give them an Edge, one which is lost in the chaos of Iraq where multi-factions join with splintered Command to defeat coordinated effort. It would be a very good Move for the Marine Corps, if the U.S. Army can be convinced to accept responsibility for Iraq, where the Army has shown the same disorientation as once expressed by itself in Vietnam.
Tim Harford asks a question which I have asked for years: Why not eradicate Inflation? I take it even further, Why not engineer a Period of Deflation? The most obvious answer consists of the increased effort necessary to pay off Debt. No one likes the Thought that their Debt load will be higher, and take more effort to pay off. Most Economists stop at this Point, not desirous of explanation of any benefits to Deflation. They are present, though, and should be explored. The paramount benefit is an actual smaller Debt load level, and lower Interest rates servicing that Debt; this due to the greater Supply of funds for Debt provision. Most Business Costs would be paid before actual Price reductions, eliminating an obvious element of overall Business Cost. Debt Service Costs would decrease faster than the Deflation rate itself. Government would enjoy higher Taxes in relationship to Expenses, without raising Tax rates. Government economic policy would be cheaper to finance. Business would pay less in Performance Raises to Salaried personnel, a Situation without disadvantage to Employees, but advantageous to Consumers. The Economic bias against Deflation holds less water than always claimed.
One may ask how an Economy can incite Deflation in the first place, only Japan giving a good example of modern Deflation; Everyone still avoiding definition of its exact causation. The Answer to Deflation provision is simple, though almost all Economists would disagree with this Estimate. Japan has its Deflation because it has not taken the Marginal Tax rate route of Western economists. Economists will all claim that Japan has widely engaged in deficit spending at all levels, so this cannot be the Answer. The fact remains, though, that Japan has did almost nothing to alter the basic Tax package demanded of Japanese Taxpayers, and their individual Debt levels and Savings rates have remained relatively stable. Japanese Production schedules are still based upon Japanese Purchase patterns, and Japanese Business basically transfers their inflationary pressures into their Exports. Economics will eventually catch up with economic practice. lgl
Tim Harford asks a question which I have asked for years: Why not eradicate Inflation? I take it even further, Why not engineer a Period of Deflation? The most obvious answer consists of the increased effort necessary to pay off Debt. No one likes the Thought that their Debt load will be higher, and take more effort to pay off. Most Economists stop at this Point, not desirous of explanation of any benefits to Deflation. They are present, though, and should be explored. The paramount benefit is an actual smaller Debt load level, and lower Interest rates servicing that Debt; this due to the greater Supply of funds for Debt provision. Most Business Costs would be paid before actual Price reductions, eliminating an obvious element of overall Business Cost. Debt Service Costs would decrease faster than the Deflation rate itself. Government would enjoy higher Taxes in relationship to Expenses, without raising Tax rates. Government economic policy would be cheaper to finance. Business would pay less in Performance Raises to Salaried personnel, a Situation without disadvantage to Employees, but advantageous to Consumers. The Economic bias against Deflation holds less water than always claimed.
One may ask how an Economy can incite Deflation in the first place, only Japan giving a good example of modern Deflation; Everyone still avoiding definition of its exact causation. The Answer to Deflation provision is simple, though almost all Economists would disagree with this Estimate. Japan has its Deflation because it has not taken the Marginal Tax rate route of Western economists. Economists will all claim that Japan has widely engaged in deficit spending at all levels, so this cannot be the Answer. The fact remains, though, that Japan has did almost nothing to alter the basic Tax package demanded of Japanese Taxpayers, and their individual Debt levels and Savings rates have remained relatively stable. Japanese Production schedules are still based upon Japanese Purchase patterns, and Japanese Business basically transfers their inflationary pressures into their Exports. Economics will eventually catch up with economic practice. lgl
Wednesday, October 10, 2007
Pests, Bugs, and Pestilence
This Post by knzn adequately explains both contango and backwardation, though he sounds as if he is somewhat mystified by it. The Keynesian definition of both term relationships has always left a little to be desired, as it is at heart speculation driven as to future Demand for a Product. No risk-free investment could ever be realized, as movement in the market to meet risk-free contango conditions would automatically raise the Spot price. Backwardation is basically future Price-locks to ensure a base Price for immutable Demand–that Demand which is structurally Constant, as contretemps mutable Demand–which alters given then-current Market conditions. The current Spot Price in any Product reflects two factors in the market: the level of mutable Demand, and the amount of speculation funds in the Market; either of which can impact Spot Prices. The key feature here, as unexplained by knzn or James Hamilton, is that future prices basically set Production Schedules with guaranteed Underwriting of those Schedules, while mutable Demand is fulfilled by those Production Schedules, while Spot prices only indicate Profits-taking and excess speculation funding.
John Quiggin turns a less than straightforward Point of Discussion into something somewhere off the Deep End. Greg Mankiw says that Economists cannot understand Tipping, Matt Yglesias thinks it should be based on utility theory, while John attempts to change the Whole into expression of preferences and rational choice. No one has yet adopted the simple formulation that Tipping is simply Custom, exercised as peer pressure to perform a lesser charity to laborers on your behalf. Maybe there is a need for more Sociology, and less Economics.
Here is Arnold Kling’s review of Shannon Brownlee’s book Overtreated. I enjoy Arnold so much because I don’t really disagree with him, but I always can’t really agree with him either; he reminds me of my Doctor. Don’t imagine that I agree with Shannon Brownlee; maybe I just don’t agree with Anyone. I tend to agree with Paul Krugman’s Single Payer Health Care system, though I know I could not agree with him on its structure. I think Doctor’s compensation should be determined by his total Patient load’s good Health Days, say a Dollar per day when a Patient didn’t have to see the Doctor, pop an extraordinary amount of moderative Pills, or call his Boss to claim ill health. I do know that We should establish a Bonus program to Doctors who provide adequate treatment to Patients at under $30 per day of Treatment. Is Everyone laughing? lgl
John Quiggin turns a less than straightforward Point of Discussion into something somewhere off the Deep End. Greg Mankiw says that Economists cannot understand Tipping, Matt Yglesias thinks it should be based on utility theory, while John attempts to change the Whole into expression of preferences and rational choice. No one has yet adopted the simple formulation that Tipping is simply Custom, exercised as peer pressure to perform a lesser charity to laborers on your behalf. Maybe there is a need for more Sociology, and less Economics.
Here is Arnold Kling’s review of Shannon Brownlee’s book Overtreated. I enjoy Arnold so much because I don’t really disagree with him, but I always can’t really agree with him either; he reminds me of my Doctor. Don’t imagine that I agree with Shannon Brownlee; maybe I just don’t agree with Anyone. I tend to agree with Paul Krugman’s Single Payer Health Care system, though I know I could not agree with him on its structure. I think Doctor’s compensation should be determined by his total Patient load’s good Health Days, say a Dollar per day when a Patient didn’t have to see the Doctor, pop an extraordinary amount of moderative Pills, or call his Boss to claim ill health. I do know that We should establish a Bonus program to Doctors who provide adequate treatment to Patients at under $30 per day of Treatment. Is Everyone laughing? lgl
Tuesday, October 09, 2007
Bias, Farmland, and Trade Advantage
Rob at Business Pundit perhaps slights the world of bloggers, but then again, he is right. Read and study his outline for the search for cognitive bias. He uses the word ‘Disconfirm’; something which is really hard to realize and act upon without the creation of an alternative model. Nature despises a vacuum, and if the replacement model is not as well-thought out as the original, then again you are in hazard. Here is the proper vindication of blogs, a matrix where a several themes can be explored concurrently, without real bias attributed to the work based upon position, wealth, or Public Relations funding (fancy term for financed propaganda). The downside to blogs lie in their proliferation inciting confusion by saturation, with the suppression of dissent by countervailing mass. One suggestion is choice of Liberal and Conservative bloggers for comparison, and for presentation of the greatest number of views on any issue.
Here is a long article which explains the current attempt to exempt farmland in total from Estate taxes. It might seem a Joke to Those long associated with other forms of labor, but the threat reported by the article is real. I myself go to a Dentist who came to town some 40 years ago, possessing not one acre of land, and today is one of the largest landowners in town; the rationale being land is a good appreciating asset alongside the already great Estate tax grants to landownership. There is great differential in land prices throughout the Country, due to climate and soil compositions, and therefore much variation in land prices; still, I would estimate that liberal Estate tax law for farmland would already have raised the price of farmland anywhere from $200-400 per acre by sketch estimate. Complete annulment of Estate taxes for farmland could raise that Cost by up to $500 per acre.
Dani Rodrik has a good discussion of the potentiality for both Good and Bad outcomes from the external discipline of Trade treaties. Consistent Readers of this blog know I almost universally oppose multi-national treaties, seeing them as basic instruments to discount real Trade advantages in the first place, by forbidding the horse-trading of bilateral Trade agreements. The later are renegotiable Contract agreements where both Parties can play to their Strengths, and away from their Weaknesses in Trade advantages. The demand for multi-national provision strips them of their ability to maneuver judicious allotments. Multinational Trade agreements also rob Trade partners of the very ability which Dani discusses, where future Governments can alter Trade policy to conform to future Trade advantages from altered economic conditions. There are Those who suggest this later released freedom of movement would be a basic disadvantage to poorer Trading partners, but I would challenge Anyone to prove that on-going Trade ever hampered either Trading partner. lgl
Here is a long article which explains the current attempt to exempt farmland in total from Estate taxes. It might seem a Joke to Those long associated with other forms of labor, but the threat reported by the article is real. I myself go to a Dentist who came to town some 40 years ago, possessing not one acre of land, and today is one of the largest landowners in town; the rationale being land is a good appreciating asset alongside the already great Estate tax grants to landownership. There is great differential in land prices throughout the Country, due to climate and soil compositions, and therefore much variation in land prices; still, I would estimate that liberal Estate tax law for farmland would already have raised the price of farmland anywhere from $200-400 per acre by sketch estimate. Complete annulment of Estate taxes for farmland could raise that Cost by up to $500 per acre.
Dani Rodrik has a good discussion of the potentiality for both Good and Bad outcomes from the external discipline of Trade treaties. Consistent Readers of this blog know I almost universally oppose multi-national treaties, seeing them as basic instruments to discount real Trade advantages in the first place, by forbidding the horse-trading of bilateral Trade agreements. The later are renegotiable Contract agreements where both Parties can play to their Strengths, and away from their Weaknesses in Trade advantages. The demand for multi-national provision strips them of their ability to maneuver judicious allotments. Multinational Trade agreements also rob Trade partners of the very ability which Dani discusses, where future Governments can alter Trade policy to conform to future Trade advantages from altered economic conditions. There are Those who suggest this later released freedom of movement would be a basic disadvantage to poorer Trading partners, but I would challenge Anyone to prove that on-going Trade ever hampered either Trading partner. lgl
Monday, October 08, 2007
The New Hassle of American Life
Life used to be simple in my youth, at a time where the only Concern was to make a living. One needed only marketable skills and Money, thereafter obtaining almost anything you wanted not outside what was defined as legal. Today, the complexion has most definitely altered. Xerox machines seem destined to photocopy every Driver's License and Social Security Card some Thousands of times. The complusion to copy has infected Everyone--your Doctor, your Banker, your Doctor, your Dentist, your landlord, and coming soon, your favorite bartender. I cannot wait until they start doing Security Checks to buy Concert Tickets.
The misery of the above state of being resides in conscious fear on the part of Everyone in any position, of failure to provide sufficient documentation. I know I could make a fortune simply by investing in File Cabinet construction. I shudder for the square miles of scenic forest already cannabalized for Paper pulp. It might only be envy that my paperwork gets photographed more often than myself, even though it is far less handsome.
I am only angry because I am again attempting to Move to a new Apartment. Those who have read Me for awhile know that I had a Heart blockage two years ago; one of the results was the Sale of my residence, and my movement back to Apartment living. I have now once again decided I should move once more into an Apartment closer to what I required, both in access and benefit. Imagine my amazement when I heard that the new Management desired a copy of the old Sale and Mortgage Agreement still in progress from my old owned Property. I thought to refuse such a Request, but realized it would only hamper my movement into a new facility, and possibly get me placed on a Homeland Security Watchlist. I can only ask when will it ever end. lgl
The misery of the above state of being resides in conscious fear on the part of Everyone in any position, of failure to provide sufficient documentation. I know I could make a fortune simply by investing in File Cabinet construction. I shudder for the square miles of scenic forest already cannabalized for Paper pulp. It might only be envy that my paperwork gets photographed more often than myself, even though it is far less handsome.
I am only angry because I am again attempting to Move to a new Apartment. Those who have read Me for awhile know that I had a Heart blockage two years ago; one of the results was the Sale of my residence, and my movement back to Apartment living. I have now once again decided I should move once more into an Apartment closer to what I required, both in access and benefit. Imagine my amazement when I heard that the new Management desired a copy of the old Sale and Mortgage Agreement still in progress from my old owned Property. I thought to refuse such a Request, but realized it would only hamper my movement into a new facility, and possibly get me placed on a Homeland Security Watchlist. I can only ask when will it ever end. lgl
Sunday, October 07, 2007
Cutting the Power of the Purse
Tom Redburn has identified the Problem which We all know stand athwart all desires to control both Taxes and fiscal responsibility. It constitutes the greatest Issue of Issue Politics, and is understandably the most politically funded of the lobbied Interests. No one expects that this engine of destruction, organized along lines adopted by Boss Tweed in New York, can be defied. A basic reason for this image of invulnerability comes from allowing this political agenda to set the language and rules of the debate. We must learn to attack towards our Opponents’ weakness, if We are ever to hope to rein in the exploding Debt, and the Rule by earmarked federal spending.
The central theme We will have to adopt is a Concept of Tax Remissions limitations. This consists of a law which would limit any Tax Remission to a specific maximum value; I would set this amount at $25,000 per Individual, and $75,000 per Business organization of any type. This would separate the Sheep from the Goats, in that Those who need Tax relief would get it, but Those who want only Tax Avoidance cannot achieve it. Those who cannot understand allegory will be told that the Rich will be separated from the Needy for Tax purposes, and Those committed to fiscal responsibility will possess the rallying cry of Fair Tax Impact.
The next Step along the Road to clear the federal dead load will be the legally-imposed limit of Taxpayer ability to utilize more than Three Tax remission deductions in any Tax Filing; Those unable to do the Math can be told no Individual can claim more than $75,000, and business organizations no more than $225,000, in special Tax remissions other than certified Business Costs. The two Steps, together, will drive the fatal wedge between suffering Taxpayers, and Those who pay the political campaign contributions and Lobbyists. The vast majority of Taxpayers will come to understand We can attain Tax Relief, without surrendering to Those who would use Our efforts to avoid their own Tax burden. It is the necessary first achievement, before We can begin to rein in Our spendthrift elected officials. lgl
The central theme We will have to adopt is a Concept of Tax Remissions limitations. This consists of a law which would limit any Tax Remission to a specific maximum value; I would set this amount at $25,000 per Individual, and $75,000 per Business organization of any type. This would separate the Sheep from the Goats, in that Those who need Tax relief would get it, but Those who want only Tax Avoidance cannot achieve it. Those who cannot understand allegory will be told that the Rich will be separated from the Needy for Tax purposes, and Those committed to fiscal responsibility will possess the rallying cry of Fair Tax Impact.
The next Step along the Road to clear the federal dead load will be the legally-imposed limit of Taxpayer ability to utilize more than Three Tax remission deductions in any Tax Filing; Those unable to do the Math can be told no Individual can claim more than $75,000, and business organizations no more than $225,000, in special Tax remissions other than certified Business Costs. The two Steps, together, will drive the fatal wedge between suffering Taxpayers, and Those who pay the political campaign contributions and Lobbyists. The vast majority of Taxpayers will come to understand We can attain Tax Relief, without surrendering to Those who would use Our efforts to avoid their own Tax burden. It is the necessary first achievement, before We can begin to rein in Our spendthrift elected officials. lgl
Saturday, October 06, 2007
Modest Retrenchments
Consumer credit rose by $12.2 billion in August, a rise of 5.9%, the article discussing the loss of home equity credit as the leading push. This remains the actual problem, as home equity credit will be slow to recover as a Purchase factor within the next few years. Measurement of actual lack of Consumer funds is difficult, but Wage factors are not expected to increase, and Consumer credit may charge in excess of 3% more for Credit; so that the shortage of Consumer liquidity will probably remain. Here lies additional hazard, whereby Consumer Credit agencies will become wary is the current expansion rates continue.
The world of Electronics is being upset by Legislative action. The lead in solder prevents whiskers, or slivers of metal, from springing from the fused material; but lead is being banned by Countries throughout the world. The whiskers are shorting out electronic equipment, and industry is scrambling to find a cheap Substitute. One of the major culprits may actually be industry philosophy with its dedication to Micro technology. Slightly larger connections would allow for a plastic coating of connections to prevent whiskers. I am not talking about the huge Boards of Old, but film-coating Soldering.
I should first say that I disagree with this article, but it must be Read under the principle of knowing your Opponent, and this is as well-written as Most. The Thomas Palley argument presents serious qualifications to the Free Exchange position, and it is extremely hard to deny the downward equalization of Income. The freed Corporate structure may be the most extreme to defend, as Corporations typically rely on nothing but Profits to determine policy. I perhaps remain the lonely element who perceives Tariff policy as the proper inducement to incite social consciousness in the Corporate community. lgl
The world of Electronics is being upset by Legislative action. The lead in solder prevents whiskers, or slivers of metal, from springing from the fused material; but lead is being banned by Countries throughout the world. The whiskers are shorting out electronic equipment, and industry is scrambling to find a cheap Substitute. One of the major culprits may actually be industry philosophy with its dedication to Micro technology. Slightly larger connections would allow for a plastic coating of connections to prevent whiskers. I am not talking about the huge Boards of Old, but film-coating Soldering.
I should first say that I disagree with this article, but it must be Read under the principle of knowing your Opponent, and this is as well-written as Most. The Thomas Palley argument presents serious qualifications to the Free Exchange position, and it is extremely hard to deny the downward equalization of Income. The freed Corporate structure may be the most extreme to defend, as Corporations typically rely on nothing but Profits to determine policy. I perhaps remain the lonely element who perceives Tariff policy as the proper inducement to incite social consciousness in the Corporate community. lgl
Friday, October 05, 2007
Woe to the Heretic!
Congress again sets about the task of destroying the economics behind hiring private Contractors, instead of using Government employees or military personnel. American law, as interpreted by the American Courts, insists that prior attack must be instigated, before Security personnel can responds with violent methods. The Secret Service conducts its protective details using the principle of area saturation, something prohibitively expensive and unworkable in the protection of lower level Personnel below a President or Cabinet officer; foreign nations resent a battalion of armed personnel arriving with every diplomat. Current Employment schedules will not protect Our personnel with the added burden of Congressional regulation. We also lose the flexibility of hiring already-trained personnel for Security duties; the Congressional legislation in action will require extensive Training programs for these Security personnel, who will probably be rubbing shoulders with FBI Trainees at Quantico. There will be few to train, though, as Security personnel learn that they cannot put down Suppression fire, even though they lack adequate backup. A better Course would be to make a polite apology to Iraq, and express hope that it will never happen again.
I read Robert Lawson’s Post, then Dani Rodrik’s Post, which first left me with no desire to read the Report cited, and feeling that the evidence was far more telling than Dani would allow it. I have always personally felt economic growth was based more on down-sloped Education than on economic freedom; where having Everyone with the equivalent of a Grades school education was more vital than Expertise, Economic freedom, or available Capitalization. Economic growth continues to expand as the universality of Education expands to a High School education, but thereafter economic growth depends more on Trades school education spread than great numbers of higher Academics. The real fact I am trying to define is that excess numbers of Collegiate Graduates to total labor elements will lead to excess Capitalization debt retarding economic growth by Middleman Costs. I just know my colleagues in the Blogs will burn me for this one!
Dani Rodrik also penned another Post which Everyone should read. I would first comment that the Conflict discussed is a ‘Tempest in a Teapot’, only important in the arena of collegiate faculty representation. I belong to the Second School and believe that Free Trade and Free Markets are not the source of success. No nation which arose to high development status has acquired their status from Free Markets or Free Trade. History records that the most primary organs of development were the creation of enlightened Oligarchies for Capital concentration. I say ‘enlightened’ because All were quick to innovate, and mostly steal, new technologies from elsewhere in the World. It is why I believe Patent and Copyright protection will always be a futile effort, and why I believe an intelligent, universal system of national Tariffs produces more Gains than Losses in economic growth. Boy, am I heterodox today! lgl
I read Robert Lawson’s Post, then Dani Rodrik’s Post, which first left me with no desire to read the Report cited, and feeling that the evidence was far more telling than Dani would allow it. I have always personally felt economic growth was based more on down-sloped Education than on economic freedom; where having Everyone with the equivalent of a Grades school education was more vital than Expertise, Economic freedom, or available Capitalization. Economic growth continues to expand as the universality of Education expands to a High School education, but thereafter economic growth depends more on Trades school education spread than great numbers of higher Academics. The real fact I am trying to define is that excess numbers of Collegiate Graduates to total labor elements will lead to excess Capitalization debt retarding economic growth by Middleman Costs. I just know my colleagues in the Blogs will burn me for this one!
Dani Rodrik also penned another Post which Everyone should read. I would first comment that the Conflict discussed is a ‘Tempest in a Teapot’, only important in the arena of collegiate faculty representation. I belong to the Second School and believe that Free Trade and Free Markets are not the source of success. No nation which arose to high development status has acquired their status from Free Markets or Free Trade. History records that the most primary organs of development were the creation of enlightened Oligarchies for Capital concentration. I say ‘enlightened’ because All were quick to innovate, and mostly steal, new technologies from elsewhere in the World. It is why I believe Patent and Copyright protection will always be a futile effort, and why I believe an intelligent, universal system of national Tariffs produces more Gains than Losses in economic growth. Boy, am I heterodox today! lgl
Thursday, October 04, 2007
School Days-School Days. . .
I gave Daron Acemoglu the respect today of reading the Table of Contents to his Work in progress, Introduction to Modern Economic Growth. Now you, he, and I realize I should read the entirety of it; only I know the relative probability of that occurrence, the book reminding me of my undergraduate Calculus text. Still, the Six pages of the Table of Contents introduces a wealth of information and Models, some of which the energetic author might have had some difficulty in establishing integrating relationship betwixt them. I hope Daron has planned at least a 3-Semester program for its use as a Text. I will leave it to my Readers to decide how much of the material is necessary for their own achievement.
Dani Rodrik takes on Austan Goolsbee for sloppy reasoning about the effect of globalization on Income. Dani is correct about the Margin call, but I find greater error in Austan’s reasoning. Goolsbee suggests 60-70% of the domestic of the economy faces no international competition. He discusses basically filled Labor categories, and ignores the downsizing of the Manufacturing sector, which is the traditional labor-intensive sector employing unfit Candidates for the aforementioned labor categories under press of full employment in these sectors. Goolsbee doesn’t understand that Living Standards cannot rise significantly without expansion of these labor-intensive Trades.
George Will Op-Ed should be read by All, before considering the totality of Goolsbee’s position. My position states that vastly increased Education Funding stands as irrelevant under the compression of full employment in the labor sectors supplied by Education. Simple supply of Educational attainment to labor elements will not grant higher Incomes; One had to live through the labor markets of the late 1970s and early 1980s. Allowing Production advantage to flow Overseas simply to feed the higher Incomes in the fully-employed sectors will not advance the Living Standards of the total Labor market. lgl
Dani Rodrik takes on Austan Goolsbee for sloppy reasoning about the effect of globalization on Income. Dani is correct about the Margin call, but I find greater error in Austan’s reasoning. Goolsbee suggests 60-70% of the domestic of the economy faces no international competition. He discusses basically filled Labor categories, and ignores the downsizing of the Manufacturing sector, which is the traditional labor-intensive sector employing unfit Candidates for the aforementioned labor categories under press of full employment in these sectors. Goolsbee doesn’t understand that Living Standards cannot rise significantly without expansion of these labor-intensive Trades.
George Will Op-Ed should be read by All, before considering the totality of Goolsbee’s position. My position states that vastly increased Education Funding stands as irrelevant under the compression of full employment in the labor sectors supplied by Education. Simple supply of Educational attainment to labor elements will not grant higher Incomes; One had to live through the labor markets of the late 1970s and early 1980s. Allowing Production advantage to flow Overseas simply to feed the higher Incomes in the fully-employed sectors will not advance the Living Standards of the total Labor market. lgl
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