Dangerous Dan Thoughts and musings on the world

7/14/2009

More Things I Think I Think Right Now

Filed under: General,Politics,Society — Dangerous Dan @ 9:06 pm

As we prepare to pass a massive health care entitlement program that will destroy the quality of the current system and exponentially increase the size of the federal budget, the federal debt, and the power of the federal government in our lives, let's consider a few things.

1. Name me a successful (or, as most actually are, seemingly successul) socialist program or system that is not parasitic on the private sector. On health care, for example, many people hold up Medicare as being great template for a quality government-run system, even though it about to go bust. If you can find a doctor who wants more Medicare patients or an all-Medicare practice, then it is highly likely you will next find a unicorn ridden by a leprechaun. Doctors and hospitals tolerate Medicare and the loss they take on the system because they are still able to make a profit from private insurers. Private insurance subsidizes Medicare. Should you take away the private insurance so that you only have a universal Medicare-type plan, what will subsidize it?

The great socialized medical systems of other countries are also parasitic on the U.S. The newest wonder drugs and most medical innovations come out of the U.S. because companies can make a profit here, but not elsewhere. And yet the other countries still benefit from innovations that come from the U.S. The massive socialized welfare systems of western Europe are the result of half a century of U.S. military protecction of the continent. They had the luxury of drawing down their militaries and building up their welfare states. They currently hardly have the ability to even defend themselves, let alone project any significant power abroad. If the leaders of western Europe had any sense, they would persuade the U.S. NOT to join the socialist democratic fold. If the European pattern were to hold here so that military spending will be replaced with welfare spending, we will no longer have ability to militarily secure Europe and the Europeans will suddenly be responsible for themselves without an assured back-up plan in the U.S.

1b. I also marvel at how people are so willing to allow the federal government to so intrude in their lives that they will allow it to dictate to them something as fundamental as their own health care and how they use it. I've always been baffled at how people complain about insurance companies and HMO's and then their solution is to create one enormous monopolistic HMO run by the federal government, that paragon of efficiency, meritocracy, and friendly reliable customer service. When Obama talks of lowering costs, hwo do they really think that will be done? When the supply of available medical care remains static, but demand skyrockets and there's no longer any price mechanism to ration the supply, how do they think the rationing will be done? How do they think new medical innovations will come about or new drugs created when there's no longer any profit to be made in them for companies? How do they think the government will distribute money and resources through the system? By need? By merit? By consumer demand? By voter appeasement? By political influence? When Obama talks about "evidence-based" medicine and decisions, what evidence, chosen by whom, to effect decisions for what goals? What motivation will aspiring talented sudents have for going into the medical field when they can no longer make their own medical decisions, when they can no longer act on their own judgment and training, when they become bureaucrats executing options on a flow chart, when they cannot produce a meaningful income to reflect their education, training, and service provided, and when patients see them not as talented professionals from whom they are receiving a valuable service made valuable by what it costs the patient, but as an extension of the government system as surely as a glassy-eyed dullard sitting at a DMV window? Why go through that pain when instead they can become, say, lawyers with less investment of time, talent, and money and greater reward on the other end? Why contribute to the medical field when there are oh so many ways to become parasitic on it?

2. The role of proper government should be to preserve and protect individual freedoms and let individuals define and pursue their own versions of happiness and the good life (within bounds, of course, e.g. not allowing joyful murderers to exercise their hobby). The more instrusive the government becomes, however, through taxation, regulation, mandatory services, etc., the more individual freedoms are eroded and persons are forced to comform to the versions of happiness and good life decided on by the government as being best and proper. It doesn't matter if my versions are different, I will be forced through either lack of choice and options or through coercion to comply. On health care, I may prefer a certain doctor or have a certain procedure done or make some other conscious choice that I think best, but under a government system, I will be constrained to doing what the bureaucratic rules say I can do.

2b. I would dearly love if some politician out there would articulate the case for economic freedom being general freedom, which I think is one of the best cases to be made against increasingly excessive taxation. The more of your own money you keep, the more you can pursue your own aforementioned versions of happiness and the good life. You can donate to charities, tithe, take educational courses, buy a ski boat, travel, play XBOX, contribute to political candidates or political causes you support, etc., etc. Whatever your version is, money allows you to pursue it. The more of that money that is taxed, however, the more your ability to pursue it is restricted. and is necessarily an infringement of what is supposed to be an unalienable right, the pursuit of happiness Again, erosion of individual freedoms.

3. I sometimes wonder if, though we are a common law society, we are becoming more civil law in tone and structure. Rules and laws are becoming exceptionally complex in their layout. Older real estate agents can tell you housing contracts are much longer than they used to be. Older profesoors will tell you how syllabi were once a page or two and now universities require they have sections on disability, discrimination, tardy policies, grading policies, reading schedules, et al, until a syllabus constitutes a packet. In all things, all bases must be covered and no loopholes left open.

The problem with all this is that rules replace judgment. People become afraid to make judgment calls because they fear they'll leave themselves exposed to litigation or discipline if they choose wrongly. If there's a rule they can follow, however, then they can do whatever it says and not bother using judgment, no matter how illogical, inconvenient, inefficient, immoral, or nonsensical it may be in a given situation. They are absolved of all personal responsibility. No matter the outcome or incomprehensible the decision, they are justified so long as they conformed to the rule. And then responsibility has been to displaced to whom? To the rule? Where is the accountability in the system? Suddenly, no one is accountable and no one is responsible so long as every one followed their own respective rules. The buck stops nowhere because it never started going anywhere at the start.

We've replaced minds with rules. Whatever happened to producing people with good judgment and good character who can choose wisely instead of merely stamping out drones who can do little more than offensively exploit loopholes and defensively cover their asses? We don't want men of thinking, we want men of process.

4. Last, I was ruminating this morning on the rather contradictory positions of those who support higher taxes. On the one hand, they support higher taxation of those in the higher income brackets in order to generate revenue for various government spending. They do so on the supposition that those who are wealthy will continue working at the same pace as before and work with the same effort to increase income, productivity, etc., and also that they will not leave the jurisdiciton of the taxing entity. That is, they expect the higher tax to generate more revenue while having little to no adverse effect on the behavior of those being taxed.

On the other hand, these same people will turn around and purposely use taxation as a tool for behavior modification. They argue, for example, that gas taxes should be higher so people will push for and buy more fuel efficient vehicles. They push through higher taxes on cigarettes saying that doing so will make the cost of smoking prohibitively expensive and smokers will quit.

So, which is it? Does higher taxation change behavior or does it not? You can't have it both ways. I haven't decided if the attempt to do so is the result of naivity, convenience, or straight-out lying.

And that's about all I think I think right now.

Various Things I Think

Filed under: General,Politics,Society — Dangerous Dan @ 9:03 pm

Any one of these deserves greater attention, but the real world is currently demanding a great deal of my time.  But here a couple of things I think I think.

1. Obama is turning out to be exactly who I thought he would be and yet I dislike him even more than I thought I would.  His efforts at various reforms of the society are wrong-headed and perilous.  He is also abusing the executive branch and has concentrated power in the presidency to a degree that I'm not sure has precidence.  Currently, a man with one year of experience in the business world (as a financial advisor) is the effective uber-CEO of the world's largest budget, two major automotive manufacturers, large national banks and investment firms (and a number of smaller ones), and is also trying to become the head of a nationwide HMO.  I don't know why people aren't more worried about this than they are.

2. What depresses me is that I'm not convinced that if McCain were president and/or if the Republicans were still the majority in Congress, they wouldn't be doing many of same boneheaded things Obama and the Dems are.

3. Regarding the auto companies, we're witnessing what happens when the government takes over a business: it screws it up.  Anytime the government meddles in a market, it disrupts how that market operates.  A free market should be a meritocracy where only the best succeed and the good survive.  Politics, though, is an aristocracy of influence where the best connected succeed and the well connected survive.  I greatly fear that GM and Chrysler are going to become like Amtrak.  The companies will continue to operate inefficiently and will lose money (all the more so now that the unions have such a big stake in them) and they'll just continue extorting Congress for more money.  After as much taxpayer money as has been invested in the companies, no politician wants them to completely fail on his/her watch and so they'll just keep pumping more money while always claiming the automakers will become solvent, profitable, and independent tomorrow.  Would anybody like to buy a Trabant?

NG Explorer on Executions

Filed under: General,Politics,Society — Dangerous Dan @ 8:47 pm

I'm currently watching National Geographic Explorer's episode on executions, with a (understandable) focus on the Texas death row in Huntsville.  I've always like the Explorer series and they tend to play it pretty straight without taking sides (or at least without being too overt about it).  One gets a vague feeling of disapproval.  In times like this, though, I like to note the crimes for which these were executed.

Johnny Ray Johnson: Johnson confessed that he offered to give Leah Smith some of his crack cocaine in exchange for sex. After Smith smoked the crack, she refused to have sex with Johnson. He became angry and grabbed her, ripped her clothes off, and threw her to the ground. When she fought back with a wooden board, Johnson repeatedly struck her head against the cement curb until she stopped fighting, and then raped her. During the punishment phase of his trial, the State introduced evidence, including Johnson’s oral and written confessions, revealing that Johnson raped and/or murdered numerous other women on several occasions in much the same manner.

Willie Earl Pondexter: Pondexter and accomplices Ricky Bell, Deon Williams, and James Henderson met together and discussed robbing Martha Lennox, a wealthy 84-year-old woman in Clarksville. They parked a few blocks away. On their first attempt to enter the house, they saw a patrolling police car. The men ran back to their car, but later returned to Lennox's house. After Pondexter kicked in the front door, all four of them went inside and went upstairs to Lennox's bedroom. The victim was there, sitting on her bed. Williams then took $7 from the victim's coin purse. Lennox was then shot twice in the head with a 9 mm pistol. The intruders then fled in the victim's car. Pondexter and his companions drove Lennox's car to Dallas, using the money they stole to buy gas. The day after the murder, they were arrested after attempting to rob a man on the street. At Pondexter's trial, Deon Williams testified that Henderson shot Lennox in the head first, then handed the gun to Pondexter. Pondexter then shot Lennox in the head and said, "that's how you smoke a bitch." James Lee Henderson was also convicted of capital murder and sentenced to death. He remains on death row.

David Martinez: Martinez lived with his firlfriend, Carolina Prado and her two children, 14 year old Erik and 10 year old Belinda. On July 10, 1994, Martinez beat Carolina to death with a baseball bat in her bed, and used the same bat on Erik in the living room. Belinda was left tied up but unharmed and had seen her brother beaten to death by Martinez. She escaped and returned with her Grandmother who discovered the bodies. Upon arrest, Martinez confessed to the murders, bragging that he had killed them like cockroaches. No apparent motive for the murders was revealed.

I've always had a rather unsophisticated argument for the death penalty and it goes like this: Some people just deserve to die.  That's pretty much it.  No nuance about justice, costs, etc.  These guys commit horrific crimes and their lives become forfeit.  They simply deserve to die.

3/20/2009

The Environmental Threat to Liberty

Filed under: General — Dangerous Dan @ 12:52 pm

Periodically, proposals are raised for some kind of international taxes that are supposed to be justified by threats to the environment and by mythical global warming concerns.  Several years ago, for example, ideas were floated for imposing special taxes on international flights, the revenue of which would go to saving nature.  The very latest idea is levying a tax on oil, which will raise $740 billion that will go to… yes… saving nature.  In tune with the current fetishizing of FDR, it's being called a Green New Deal.

So, the problems:  This is to be done somehow through the UN.  The article was skimpy on details for just how this tax is to be imposed, collected, and under whose authority, but I take it it's through the UN.  The United Nations is not a taxing authority and it has neither the legal authority to do so nor the political justification.  A sovereign people would be fools to allow a tax to be put on them by some extralegal entity over which they have no control.  My political representation in the UN is tangential at best and the bulk of the members and the bulk of bureaucracy do not have my nation's interests at heart.  Any kind of international tax like this sets a precedent by which the UN can slowly exert greater powers while not being answerable to any population.  It would be the creation of a sovereign without even the benefit of a social contract.  What's galling – and frightening – is that there exist people who see no problems with such plans and actually think them good.  Throw into this mix the UN's proficiency at corruption, e.g. Oil for Food, and there's no telling where or in whose pockets much of this money would wind up being depositied.

As if these international technocrats weren't bad enough, we have our own in the U.S.  NASA's James Hansen recently complained that the democratic process just isn't working for him.

The democratic process doesn't quite seem to be working.  … The first action that people should take is to use the democratic process. What is frustrating people, me included, is that democratic action affects elections but what we get then from political leaders is greenwash.  The democratic process is supposed to be one person one vote, but it turns out that money is talking louder than the votes. So, I'm not surprised that people are getting frustrated. I think that peaceful demonstration is not out of order, because we're running out of time.

Absolutely amazing.  The implication here, even if Hansen is coy about drawing it out, is that sticking to democracy is likely to doom the world.  Presumably, the solution is ditching democracy, at least temporarily, in order to fix the environment (like China and its environmental successes, I suppose).  This illustrates the threat of crises that so many don't want to waste in order to further their own agendas.  The White House wants to exploit the economic crisis to institute sweeping liberal policies and many of the green lobbies are determined to exploit a non-existent crisis in order to increase their own power and those of fellow technocrats.  The rest of us will be forced to be free and to go along with what our more intelligent superiors dictate.  And our liberties will be sacrificed in the process.

Threats to Liberty

Filed under: General — Dangerous Dan @ 12:15 pm

Our liberties are always under constant threat from someone or some group or another.  I've been somewhat surprised at the number of threats that have been jumping recently and I'm near quaking at the possibilities that any of them could succeed.  I'll go down the list in the subsequent posts.

Going Galt

Filed under: General — Dangerous Dan @ 1:06 am

I've finally started reading Atlas Shrugged.  It's been on my reading list for one or two years now, but, with all the Ayn Rand talk recently, I decided to get to it.  I'm only 200 pages in, which leaves me 800 more to go.  I find the prose to be a little overbaked at times, and the book is probably longer than it needs to be.  The characters are also odd and anything to do with sexuality is downright… strange – as if it's begging for Freudian analysis.  But all of that doesn't bother me much.  Though I'm not to it yet, I know the general idea of what the society's producers wind up doing and who John Galt is supposed to be.  This has given rise to the going Galt call among many in our current economic and political climate, advising people to scale back and contribute as little as possible to a looting society.

Wandering around the blogosphere, I've seen interesting comments about Rand and going Galt.  Many criticize her writing and characters or call her books the equivalent of pulp sci-fi.  They mean this last one derogatorily, but I don't see the problem with it.  Science fiction isn't meant to be real or even necessarily realistic; it's an often allegorical story exploring social issues.  I certainly don't think there's going to be a free-wheeling Captain Kirk out exploring the galaxy someday who has to broker a peace between two alien races whose only difference is which half of their bodies is white and which is black.  But that wasn't the frickin' point now, was it?  The point was the racial issue the story was addressing.  Similarly, it's seems silly to dismiss all of Rand's points just because the characters are too ubermenschish or unrealistic or some such or that what the producers do wouldn't really happen.  Well, that's not the frickin' point now, is it?  She's using a story to illustrate an overall point, philosophy, and argument.  That requires intellectual honesty in taking her position at its strongest and examining that.

As for the going Galt, many criticize it that it will make no difference and trolls love to dare people to actually go Galt and see what it does for them or the effect it will have on society.  That dare is usually accompanied with some kind of insult, epithet, or abbreviations standing in for laughter.  But I don't think the criticism being offered here is fair either.  Below is what I wrote about the topic for the comment section of this Denver Post article.  If you look at the comments (the later comments), you can see the back and forth between me and several other people.  I eventually stopped replying because I had other things to do and it seemed to get to the point where nothing new was going to be added by either side, which makes the debate tiresomely repetitive.  Though I do hate leaving a debate like that because it gives the appearance of surrender, something I don't do lightly (or much at all).

Anyway, the comment:

I keep seeing a rather curious misunderstanding of the going Galt phenomenon. While the book posits it as captains and titans of industry punishing the looter society by removing from it their own productivity, the real life version is more subtle. It's not that people will purposely remove themselves or drastically scale back in order to punish "looters." They will merely scale back in smaller ways due to simple incentives. If there is no incentive to excel or produce more, then why should anyone do so? If there is actually a disincentive to produce more and if success even seems to be punished, then why excel?

Let's say a dentist makes $300,000 a year, but realizes that after federal, state, local, and social security taxes, he'll get to keep only 40-50% of the last $50K he makes. He's likely to reason it's better to scale back his business. He'll have more time to himself, work less, but not lose much financially if he cuts back to, say, $250-275K. Sure, he may miss out on $20-$25K, but he'll figure that's better than putting in $50K worth of work and still lose as much. So he'll scale back. But by doing so, he'll hire fewer employees, cut back on hours for current employees (or even lay off a few), contribute less in taxes, and provide less of a service to his community. He's not consciously going Galt and he may not even care about politics at all. He's merely pursuing his own financial interests, which are affected by society's incentive structure.

Now imagine many, many more people like this dentist doing the same thing with all sorts of producers and employers merely following financial self-interest and scaling back. This is the going Galt problem that exists and the effects will cascade throughout the economy and government. People need to have an incentive to work harder and produce more and that incentive is that doing so will earn them more money. Take that away and their behavior will change.

In the Communist countries, it was "We pretend to work and they pretend to pay us," only because the government forced them to work certain jobs. Here, it will simply be, "We work less because we can't get paid more."

3/18/2009

Kim Jong Il – A God Among Men

Filed under: General — Dangerous Dan @ 8:53 pm

For whatever reason, I wandered onto the site for the People's Democratic Republic of Korea, aka North Korea.  I started reading the biography for Kim Jong Il and it's… interesting.  Some excerpts:

From his early years Comrade Kim Jong Il possessed the power of keen observation, the power of clear analysis and extraordinary perspicacity with regard to things and phenomena.  he had a faculty for creative thinking, regarding every problem with an innovative eye.

Courageous and ambitious, Comrade Kim John Il did everything in a big way; he had a strong and daring character which enabled him to carry any difficult task to completion with his own efforts, once he started it.

Possessed of warm human love and broadmindedness, he was always generous, unceremonius and warm-hearted among people.

His unusual natural disposition was nurtured, so developing the traits and quality of a future revolutionary and leader, thanks to the exceptional education he received from his parents.

It then talks about his education, which was wide and "profound."  Most of it deals with how he studied everything possible and how he advanced the party and the revolution.  I did like this part:

During his practice at the Pyongyang Textile machinery Factory he aroused the workers of the factory to launch a movement for  model machines in maintenance and operation, personally handling lathe No. 26.  This movement became the inception of the "model machine movement of loyalty for emulating lathe No. 26″, which is now conducted as a mass movement.

"Dude, what movement are you part of?"   "The model machine movement of loyalty for emulating lathe No. 26.  It's totally sweet."

He's a great author too:

In his treatise On Reexamining the Question of the Unification of the Three Kingdoms, Comrade Kim John Il comprehensively analysed and criticised the "Theory of the Unification of the Three Kingdoms by Silla", and the "Theory of Sila's Orthodoxy", and put forward his view on the need of newly systematizing from a Juche-orientated stand the Korean history which had been distorted by flunkey historians.  As it turned out, this was a great scientific discovery.

I didn't bother reading beyond that.  I can only take so much comedy and so many lies at once.

12/25/2008

Merry Christmas!

Filed under: General — Dangerous Dan @ 12:01 pm

Like the title says.

The Economy and Ignorant Uses of Labels

Filed under: General,Media,Politics,Society — Tags: — Dangerous Dan @ 12:04 am

Ariana Huffington is someone whose naked ambition is impressive but her intellect is not.  I can't say I've ever read anything by her when I thought the woman was sharp.  This isn't just because I almost universally disagree with her politically and ideologically, but also due to her constant intellectual vapidity and sloppiness.

The latest example of this is her piece at Real Clear Politics.  In it, she claims that the current economic crisis is proof-positive evidence of the death of laissez-faire capitalism.  Indeed, she equates its failure and death with the failure and death of Marxism.

The collapse of Communism as a political system sounded the death knell for Marxism as an ideology. But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls, the ideology is still alive and kicking.

The only place you can find an American Marxist these days is teaching a college linguistic theory class. But you can find all manner of free market fundamentalists still on the Senate floor or in Governor's mansions or showing up on TV trying to peddle the deregulation snake oil.

A few points.  First, people in Cuba, Nepal, China, Venezuela, Bolivia, Vietnam, Sri Lanka, and various other places would probably be quite surprised to discover that Marxism is a dead political ideology given its impressive vitality in those locations.

Second, it's bizarre to assert that the crisis proves the failure of laissez-faire capitalism considering that laissez-faire capitalism doesn't exist in the U.S. or virtually anywhere else in the world and hasn't for some time (if it ever truly existed at all).  It's a bit hard to argue a policy has failed when that policy was never in effect.

Huffington is actually being extremely lazy with labels.  She refers to "free market fundamentalists" as laissez-faire capitalists and then goes on to name several such individuals on the right.  In actuality, however, you will find very few real laissez-faire supporters who believe the government should be completely hands-off on the economy.  The vast majority of free-marketeers believe in some kind of government regulation, but that lighter regulation is better while heavy regulation is harmful to individual businesses and the economy in general.  Calling free market folks laissez-faire proponents is a bit like when know-nothings call libertarians anarchists.  Anarchists believe in the complete abolition of government while libertarians argue for the fundamental necessity of government, though its scope should be limited and its powers restricted.  Conflating the two is laziness or foolishness and so is conflating modern supporters of the free market and those of laissez-faire capitalism.  The conflation, however, serves her rhetorical purposes and so she uses it.

I'd like to give Huffington the benefit of the doubt and say she's merely talking about people whose ideology is closer to laissez-faire and so they're discredited by ideological proximity.  She nowhere makes such a subtle distinction, though.  Instead, she asserts the laissez-faire line rather forcefully.

It's time to drive the final nail into the coffin of laissez-faire capitalism by treating it like the discredited ideology it inarguably is. If not, the Dr. Frankensteins of the right will surely try to revive the monster and send it marauding through our economy once again.

Even if she wants to push the subtlety, it only damages her since the point can easily be turned around to argue that she and statist heavy regulatory supporters are also discredited since they're much closer to the failed Marxists she already mentioned.

Also, while Huffington repeatedly claims that laissez-faire capitalists (or, though she doesn't deserve it, we'll be generous and say laissez-faire 'attitudes') caused the crisis, she never draws the causal link between the two.  It is an assertion that is no more than asserted and is accepted as fact.  Without making the case, she cannot use the crisis as proof of anything's failure.

If the crisis occurred in a laissez-faire environment, she might have something.  Given that it occurred in a regulated environment, the only question is about the degree and efficacy of regulation.  Sadly, the tendency among liberals when something like this happens is to automatically assume that a dearth of regulation is the culprit, while hardly ever examined (or at least too little examined) are the effectiveness of current regulations, the effectiveness of the regulatory agencies, and the effects of current regulations on the markets.  If, for example, current regulations could have stopped a crisis but didn't, then the implementation of those regulations need to evaluated and there's no need for new regulations.  If the effectiveness of regulatory agencies is to blame, then this needs attention and there's no need for new regulations.  If current regulations are to blame, then they need to be revamped.

The latter can happen due to the law of unintended consequences.  Very rarely do laws or regulations do only what is intended.  They also often have unintended and undesirable side-effects.  Regulations such as requiring banks to lend money to certain localized minority groups and to the poor (actuarial demographics that are poor credit risks) was an obvious cause of our current situation in that it altered business practices (the NY Times piece Huffington approvingly references says as much, though it incorrectly lays the blame on Bush, and as confusingly as Huffington, argues for both too much and too little government interference).  Indeed, the left often does not seem to understand how laws and regulations affect business and individual behaviors, even though liberals often use laws for the purpose.  At any rate, it is not at all clear that the crisis results from a lack of regulation since I've mentioned at least three other possibilities and I'd hazard there are more I haven't thought of.  To jump to the conclusion that more regulations or a heavier regulatory environment is needed is foolhardy.

Personally, I argue for a combination of the above factors.  First, the government interference.  There is the aforementioned government sticks compelling banks to approve loans and mortgages to people they ordinarily would shun.  This is the root cause of the mess and the sheer amount of bad paper being issued due to the federal government's compulsion was going to be disastrous regardless of what happened afterwards.

Aside from this, there was also the Fed's interference in interest rates.  When Greenspan dropped the interbank loan rate following 9/11, it also dropped the interest rate on many secure investments, like Treasury bills.  It got so low that capital naturally started trying to find secure investments elsewhere that offered higher yields.  This is when consolidated mortgage packages started looking so good.  And in the beginning, they were good since it was mostly good paper and mortgages, being backed by the collateral of houses, would rarely fail terribly.  As the various brokers realized the gold mine there, more and more money started shifting into them and to supply the demand, CDO's composed of worse and worse paper were sold throughout the financial system.  This is where the Wall Street greed part comes in as enormous commissions were quite appealing.  And for many mortgage brokers, approving bad paper was low risk since the mortgage, and therefore the high risk of the bad paper, was sold to somebody else, making it no longer the mortgage broker's problem.

There was some lack of regulation in that it is very low over the investment banks.  Even if those regulations were there, it's not assured that the regulatory agencies like the SEC could have caught it.  Many smart people work for the SEC, but they're still government employees who are usually not as smart as the high-paid Wall Street folks or who are but don't stick around at the agency long enough since they go on to be a high-paid Wall Street person.  This makes it difficult to spot and handle extremely complex dangerous phenomena like the mortgage mess.  The regulators either don't know what to make of it all, don't have the expertise to put all the pieces together, or they lack employee continuity for the effort.

Frankly, this mess is far too complicated to pin on any one cause and Huffington and those like her are being every bit as overly simplistic as those she vilifies.  We need to proceed slowly and carefully, two things politicians are terrible at doing in a time of crisis, no matter how real or imagined.  Things are definitely going to get worse and I fear measures are going to be implemented that will hinder a long term recovery, not help it.

12/21/2008

They Conquered the Poor. Now to Enslave the Middle Class.

Filed under: General,Society — Dangerous Dan @ 10:50 pm

One of the devious things about government welfare is that it tends to enslave those receiving it.  This is so for individuals as well as for companies (which is one of my worries about the bailout nonsense, but at least the financial clout of companies better enables them to control politicians as opposed to the converse).  During the Great Depression, Franklin Roosevelt embarked on a massive expansion of the federal government that included instituting numerous work programs, welfare, taxes, anti-business measures, etc., all in the name of protecting the little guy.  We now realize that the New Deal programs actually prolonged and deepened the Depression (that FDR is the one who made it "Great") and thus they did nothing to actually help the little guy.  But the actual result is irrelevant.  The point of it all is that it seemed to be helping, that Roosevelt and the Democrats seemed to be looking out for the interests of the lower class, that the government seemed to be taking actions on their behalf.  In the game of politics, reality plays second fiddle to appearances.

While Roosevelt spoke nobly about assisting those in need, one of the insidious purposes behind his measures was creating a dependent voting bloc.  He and his advisers were keenly aware that by doling out government assistance to the lower class, the lower class would in turn become dependent on the government and, more specifically, on the political party that had bestowed the favors on them, kept the favors coming, and promised ever more in the future.  Roosevelt and the Democratic party created a group of voters whose votes were dependable because those voters were dependent on the Democrats.  In short, the Democrats enslaved them, not with sticks, but with carrots.  And since the 1930's, the Dems have defended all manner of failing, inefficient, and/or destructive programs in the name of giving assistance to the lower class – assistance they claim is necessary if the poor are to have any hope of surviving or of mere subsistence, let alone have hope of any kind of success.  Despite the falsity of such a notion and despite that the programs far more often do more harm than good to those whom the programs ostensibly aim to help, the programs persist.  Not because they actually help, but because they appear to help, and it seems like the Democrats are looking out for the interests of the lower class by supporting them.

As time goes on, the liberals and so-called progressives need do even less for the poor.  They must only concentrate on appearances.  The lower class has become a dependable enough voting bloc that the Democrats have to do very little for them in order to keep their votes; they just have to make enough noise about helping them to keep them favoring the left.  The Republicans on the other hand, have trouble capturing their votes on anything other than values since it's damn difficult to convince people that receiving less of what they already get for nothing is actually in their best interests.  Increasingly, Republicans have become less conservative and less Reaganite and have sought to shower gifts from the government larder on the lower class and Bush even dubbed it compassionate conservatism.  Other than this being wrongheaded for the above reasons, it was also a politically losing proposition as the Democrats created and own this game and can easily outplay the Republicans at it on reputation alone.

Having conquered the lower class, though, it seems the liberals are finally now ready to move on to their next victims: the middle class.  To be fair, volleys have been fired at this class for awhile, but the full assault looks to be in the offing.  Obama has appointed Joe Biden to be a "working families czar" who will head the White House Task Force on Working Families.  The Task Force (c'mon, 'task force'?) is… ummm… tasked with "raising the living standards of middle-class, working families in America."  First, this is a classic example of political terminology that is practically focus group-driven.  'Working families' sounds nice.  Everybody likes working families.  Though if we apply a few moments of thought to it, the term is empty since ANY family with a working member could be termed a working family and so it's uselessly broad.  At any rate, the middle class will now find itself under assault with carrots (I believe Jonah Goldberg would refer to this as 'smiley-face fascism').  The odd thing about this is that the middle class typically doesn't need help nor want it.  This is a class that has achieved and earned where it is, seeks to do better, and would just as well be left alone.  This is a class that has also traditionally been a hindrance to centralized government in any society.  Historically, in most places, the upper class is wealthy enough to resist threats put to it by the government, is in thrall to state beneficence, or is the same as the power structure.  The lower class in these places is too weak, too uneducated, and/or too disconnected to resist.  The middle class, though, is wealthy enough, smart enough, and important enough to resist too much restrictive government encroachment.  Not being part of the power structure, it also has little interest in preserving it for its own sake.  Thus, in the U.S. at least, it must be conquered in such a way it doesn't realize it's happening.

How?

Obama has set up several key goals for the task force, including expanding education and training; improving work and family balance; a focus on labor standards, including workplace safety; and protecting working-family incomes and retirement security.

These sound like nice goals, but that's the problem.  These aren't government responsibilities and the measures instituted are likely to be ineffective, inefficient, and/or destructive (most will certainly be anti-business and, like most pro-employee measures, anti-employee as a consequence).  But again, reality is beside the point.  All that matters is that the programs seem to work, that they seem to be helping, that the Democrats seem to care about middle class families.  It's the appearances that matter.  Soon, many of these middle class families will become dependent on the measures and unwilling to go without them.  They will also vote for the party which grants them the favors of the state, will keep them coming, and which promises more in the future.  The middle class will be have been conquered and enslaved as a captive voting bloc of the Democratic party, just as the lower class was before it.  The upper class will be irrelevant by this point.

It's hard to resist policies that sound good.  Conservatives and libertarians, though, need to make the case that sounding good is all these policies amount to.  When the cost is assessed, most Americans can and should be repelled by the assault on the middle class.  Nothing comes free and what Obama seeks will cost money, jobs, power, and freedoms.  In future posts (assuming I'll have time), I'll argue this is so for the various middle class "benefits" here being proposed.

11/12/2008

Bailout Feeding Frenzy

Filed under: General — Dangerous Dan @ 12:23 pm

As noted a couple of days ago, the federal bailout is becoming a ridiculous satire as all sorts of companies jockey for federal money.  The intent of the bailout was to shore up the major banks and investment firms that were hit hard by the sub-prime crisis.  Not surprisingly, any companies that can claim a business slowdown that was somewhat, kind sorta, tangentially, barely related to the overall economic problems resulting from the subprime crisis are also making a play for bailouts.

The congressional bailout law gave the Treasury broad authority to decide how to spend the $700 billion. Under the terms of the $250 billion capital purchase program announced last month, cash infusions are available to "qualifying U.S. banks, savings associations, and certain bank and savings and loan holding companies, engaged only in financial activities."

That definition has grown to include private banks and insurers like Allstate and MetLife, which own savings and loans. It may also encompass industrial lenders like GE Capital and GMAC, the financing arm of General Motors, provided they win approval to reclassify themselves as a bank or savings and loan holding company.

American Express is officially requesting $3.5 billion.  Its business is slowing down generally, but it's also having trouble selling its securitized credit card debt.

GM, of course, still wants some, but as CNBC says:

Many economists are against the idea, saying an auto maker bailout would open the door to a taxpayer rescue of virtually any major company with cash problems.

"Where do you stop?" says Bill Isaac, former chairman of the Federal Deposit Insurance Corp and now managing director at the LECG global consulting firm in Vienna, Va. "Circuit City's going down. Do we help them? What do you do if Starbucks gets in trouble? Do you help them?"

The notion of bailing out Starbucks seems pretty absurd, but it's not that far away:

As the automakers have pushed for U.S. government help, the trade groups for car dealerships and even boat dealerships are pressing their own cases. They argue that showrooms are feeling a squeeze between higher borrowing costs to finance their inventory and slowing consumer sales to move it out the door.

"We have been encouraged by reports that Secretary Paulson is looking to broaden the program," said Mathew Dunn, head of government relations for the National Marine Manufacturers Association.

On Friday, the automobile dealers sent Paulson a letter urging him to keep them in mind.

"A well-capitalized, financially sound dealer network is essential to the success of every automobile manufacturer," wrote Annette Sykora, a car dealer in Slaton, Texas, and the chairwoman of the National Automobile Dealers Association. "Any government intervention should include provisions to preserve the viability of dealers."

Ah, yes, we better keep those boat dealers' showrooms stocked with boats.  I recall that being somewhere in the Constitution's second article.  You even have people going after contracts that are indirectly related to the bailout:

The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists. That last group wants the Treasury to hire its members as contractors to take care of houses that the government may end up owning through buying distressed mortgages.

This is becoming a farce and will do long term damage to the economy and the free market, while merely possibly avoiding short term problems.  As I said, once it was made permissible for the government to start using federal funds to bail out private companies, there was no longer any good reason for many companies not to be bailed out.  All they have to do is convince the right people.  The toothpaste is out of the tube and it goin' back in.  Way to screw things up Congress.

11/10/2008

Bailouts

Filed under: General,Politics — Tags: — Dangerous Dan @ 11:04 pm

Dear God, where will this bailout mess end?  When the government was given a mess of cash to start bailing out companies, it was like opening a Pandora's box of lobbying, posturing, and damned corruption.  Direct government meddling in the economy generally, in individual industries, or in the markets never turns out well.  It only disrupts the market and keeps it from operating correctly.  It was government interference in the mortgage markets that helped create the current crisis and the solution is now to have more meddling get us out.  It won't.  If the market fouls up, even when due to outside influence and not itself, it will self-correct when left largely alone.  This chance was dashed.  Once the government crossed the line and started giving out massive loans, bailing out banks, and then got a huge money wad to use at will, all companies had to do was petition the Treasury and congressional talking heads for some of the money and try to prove themselves so valuable they had to have it, i.e. that they are too big to fail.  This incentivizes companies to increase the size and scope of their operations, while no longer having the proper fear of failure a corporation should have so that they streamline, are efficient, and serve customers effectively.  This is corporate welfare of the first order.

The latest entrant to this game is sickly General Motors.  GM is an important American company and nobody wants to see it go under, but there is no reason it should be immune to bankruptcy.  Indeed, eliminating the risk of failure or of bankruptcy prevents GM from taking the much needed measures to improve its business, such as eliminating brands and renegotiating stifling union contracts as Stephen Bainbridge argues here.

It looks like American Express is also entering the bailout game.

This is only going to get worse.  Many companies will survive that should fail.  Worse yet, which get bailed out and which don't will increasingly be determined by political, as opposed to economic, considerations.  Those companies that spread money around to the right legislators will have powerful representatives arguing on their behalf.  Also expect Congressional backscratching as representatives and senators trade political favors in backing one another's favored companies receiving federal help.  Disgusting.

11/9/2008

Obama and the Fulfillment of History?

Filed under: General,Politics,Society — Tags: , — Dangerous Dan @ 9:56 pm

I've decided I'm the last person in the country who doesn't really care all that much that Barack Obama is the first black man elected president.  Sure, it's a decidedly positive development in America, but I'm annoyed by all the adulation for several reasons.

Obama's election is not exactly a fulfillment of King's Dream, part of which was that people be judged by the content of their character, not the color of their skin.  Too many people, however, disregarded the content of Obama's character due to the color of his skin.  Much attention was given to the overt and possible covert racism among the electorate's whites.  There was little talk or concern, though, about people who used Obama's race as a major qualification for voting for Obama.  This is judging him by his skin color and not by the content of his character and is itself racist.  Too many times, though, I saw people accusing McCain supporters of being racist because these pro-Obama folks imagined no other reason could exist for not voting for their candidate.  I have friends who have a pronounced ignorance of politics and anything substantive to do with Obama and yet they were seduced by the Obama narrative that made no small use of the historic angle of his nomination.  I ignored his color and couldn't give one whit if he was even one of the denizens of the Star Wars cantina.  I paid attention to his character, his biography, and his policy proposals and found all not only to be wanting, but to be dangerous in a man desiring to be to be president.

I also have a great irritation for race politics in America.  Though so many point fingers at the right, it is the left that plays this game.  They've invested too much in identity politics and while they often talk about being post-racial and Obama being a post-racial candidate/president, it will be impossible for them to ever move beyond race.  Since to them a person's race is irrevocably a primary and immutable part of a person's identity, they cannot understand how to interpret who an individual is without using race as a guideline.  The problem, though, is how to identify what ideology belongs to a race.  Race and ideology are inherently separate; there is no natural connection between the two and any connection must be artificial and created.  If race is then identity and an ideology is attached to it, there is the challenge of deciding what this ideology is to be.  The associated problem this creates is that only those of the race who hold the ideology can be considered authentic members of the race.  These race politics dictate who is authentically black.  By most objective indicators, Obama is far from being authentically American black.  He is half white with a Kenyan father, who was born in Hawaii, raised both there and in Indonesia, and went to Columbia and Harvard Law.  Then you take a man like Clarence Thomas who was descended from slaves, born in a one room shack, and was raised in Georgia during its time of deep racism.  By most standards, Thomas has had the more authentically black American experience, but race authenticity is not based on experience or even objectivity, it is based on subjective ideology.  Obama holds the correct ideology and is willing to play the liberal race-games they have set up.  Thomas, however, refused to play these games and his ideology is, to the left, heretical.  Thus, though their respective experiences would indicate the opposite, Obama is authentically black and Thomas is not.  Obama gets held up as an example for all of America's blacks with young men marching in lockstep and saying what Obama has made possible for them, people weeping, and endless barrels of ink spilled on how history has been fulfilled.  Seventeen years ago, Clarance Thomas became one of the most powerful people in America and there was no such reaction.  No, Thomas's nomination to the Supreme Court was actually opposed by the NAACP and the Urban League.  Black elites like Manning Marble called him a race traitor and Emerge magazine put him on the cover as a lawn jockey and called him Uncle Thomas.  The authentic blacks used every racial attack on him that had ever been inflicted on blacks by racist whites.  It was despicable, but it was allowed because Thomas was not truly one of them.  You need only to choose a conservative black in politics to see similar treatment: Condi Rice, Michael Steele, Ward Connerly, Colin Powell (at least before he decided to support Obama), and more.

The irony here is that despite accusations towards conservatives, it is liberals who cannot get beyond race.  They do not how and too many of their ideas make it impossible for them to do so.  It is also they who practice the toxic politics also practiced by racist tyrannical regimes.  So, no I do not much care that Obama is the first black man to become president.  I judge him not by his color and see only an exceptionally poor candidate who is about to become the leader of my country.  And I give no credence to those who see themselves in him.  They do not know the man who has much less in common with them than they think, but believe him to be like them because they have been suckered into buying into an ideology-based racial authenticity to which Obama has adhered and in which he fits.  Tragically, the only consolation I take in Obama's victory is that I won't have to listen to people spending the next four years stupidly talking about how America is still racist, not ready for a black president, etc.

Picture Time

Filed under: General,Pics — Tags: , , — Dangerous Dan @ 1:39 am

You're screwed

President-elect Obama smiles big, 'cause he knows something you don't:  You're screwed.

You're next, buddy!

John McCain made sure to take notes during Bob Dole's 1996 concession speech.  You know… just in case.

Whew!

Jesse Jackson reflects on how he's glad he didn't cut Obama's nuts off.

Red Star and Obama, just right

A red star and Obama… they just seem to go together.

Prop 8 protest Prop 8 Protest

People protesting the passage of Prop 8 in California, which effectively banned gay marriage.

'Cause, ya know, the best way to get folks to support you is to scare the straight people

(On a sidenote, I'd be willing to bet that many mainstream homosexuals get rather annoyed with the weirdos among them who get this sort of attention; they don't exactly help their causes.  This reminds of a story in The Onion.)

Obama Already Failing on Foreign Policy

Filed under: General,Politics,World — Tags: , , — Dangerous Dan @ 12:56 am

During the campaign, Joe Biden infamously observed that now President-elect Obama would be intentionally challenged with a foreign policy crisis within the administration's first six months, a statement he then followed up by stating that it won't be initially apparent that they're right (no word on whether they'd subsequently appear right either).

"Mark my words.  It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don't remember anything else I said. Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy.

"I can give you at least four or five scenarios from where it might originate.  And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you – not financially to help him – we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right."

Obama is certainly setting things up nicely for that test.  Despite contrary assertions from Polish President Lech Kaczynski, Obama's people have said the following concerning the President-elect's commitment to the missile shield in Poland and eastern Europe:

President Kaczynski raised missile defense, but President-elect Obama made no commitment on it. His position is as it was throughout the campaign: that he supports deploying a missile defense system when the technology is proved to be workable.

That's real inspiring talk for our allies.  Unfortunately, it really does inspire the Russians, whom the statement is meant to placate.  Russia, under the tender leadership of Vladimir Putin, has been gradually re-Sovietizing and flexing its military and international muscle.  The U.S. has already been soft on this power that is openly challenging it.  We keep politically couching the terms under which the missile shield is being positioned as being for protecting those countries from rogue regimes like Iran.  We may as well be honest about the shield's role in largely opposing Russian aggression, especially as exemplified and proven in the invasion of Georgia.  Russia for its part isn't fooled in the least and has deployed missiles explicitly to counter the shield as well as issued thinly veiled threats that missiles in Poland would make a natural target in case of a conflict (as if it wasn't already a target).

Obama, though, is stepping the vacillation up a notch by declaring 'no commitment' to the shield (apparently a variation on voting 'present').  Obama and his supporters may perceive this as nuance or not wanting to unnecessarily agitate a powerful state.  Russia, however, doesn't need reasons to be agitated nor does it need excuses.  It only wants them and when they're not presented, it will merely create them.  Where Obama sees nuance, Putin sees weakness.  Weakness to be exploited.  A fundamental mistake in the west is to believe tyrants are reasonable men who, like themselves, can be reasoned with.  Tyrants rule by force and see the world as one in which enemies must be crushed if possible or exploited and fooled if not.  The reasonableness of reasonable men is only something to be turned against them to the tyrant's advantage.  Saddam tried to keep the international community dithering in 2003 so that an invasion would not occur.  Iran has succeeded in keeping the world dithering for the past five years, making the chance of any kind of substantive action against it negligible.  North Korea has nearly perfected the art of rattling sabres, appearing to back down, rattling again for concessions, and appealing to other countries' charity for the suffering of its people, a suffering it created.

Russia, of course, is a much bigger, more powerful nation than these, and Putin is a master in manipulative statecraft.  Few politicians can match his cunning and raw will.  After eight years of dealing with him, Bush still isn't in his league.  Obama, with no international experience, protestations of international cooperation resulting from American abdication to the right of unilateralism, waffling on steadfast American posturing and support for allies, and coming into office when Putin is already at full stride… well, Obama is at best a triple-AAA player compared to Putin's MVP major leaguer.

As if Obama's no commitment position wasn't bad enough, his spokesman threw in the stipulation that the technology will be deployed when workable.  Considering missile interceptors have already proven their workability, though not perfection, in several tests, it's not clear what more Obama wants until it gets his stamp of approval.  Unfortunately, the missile interceptor has long been a target of liberals, who ostensibly opposed it because of expense and initial poor tests.  This means it's likely to be cut in an Obama administration.  The problem here is that no technology is perfect, good, or even necessarily reliable when it's first introduced.  It requires investment, testing, and improvement.  Many on the left, though, have shown little patience with any of this and use initial failure as an excuse for cancellation of projects.  Many of the same also believe that investment in military technology is unnecessary due to America's already clear technological advantage among the world's militaries.  Aside from the silliness of this position and how it ignores that it was only previous investment that got us here, it's not entirely true.  China has already demonstrated its intentions of directly targeting our technological edge by shooting down a satellite and continually probing our computer security.  Both Russia and China have begun deeply investing in their militaries and are trying to modernize them closer to U.S. abilities or at least to counteract our strengths.  While we are now focusing more attention on asymmetric warfare against enemies such as Iraqi insurgents, this is no time to be idyll when it comes to conventional warfare.  Major threats against the U.S., its allies, and its interests still exist in the world.

Biden made an interesting comparison to JFK.  Kennedy may have faced an intentional international test in the Cuban Missile Crisis, but interestingly, he helped invite it.  His actions in the Bay of Pigs were interpreted as weakness by the Soviets.  At least when the big test came, he passed it.  I'm not so confident Obama would do the same.  Kennedy was one of the last prominent Democratic hawks before the absorption of the New Liberal peace lobbies in the 60's and 70's eviscerated the party's guts.  Obama on the other hand is a product of that evisceration and he hasn't the will the party once had in Roosevelt, Truman, and Kennedy.  His one other response to international crisis, Russia's Georgia adventure, certainly does not make one think of Jack Kennedy.  It makes one think of a Eurocrat.

At least one former president we can be sure Obama is not is Ronald Reagan.  In the 80's, Reagan took technology that didn't work and pretended it did when he supported the Strategic Defense Initiative (SDI, aka Star Wars).  His bluff fooled the USSR and they invested resources they didn't have in their attempt to counter it.  Obama is using the opposite tactic by taking technology that works and pretending it doesn't.  Reagan's action helped destroy the Soviet Union.  What shall we suppose will be the result of Obama's decision?

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