Why not go into Syria?

Now for something completely different...

The thought struck me as I was listening to the President tonight that maybe the answer isn't to extend the Bush Tax Cuts, or to extend them for the Middle class while raising taxes on the "Rich", or raising it for everyone, or eliminating the IRS... maybe the answer isn't something that the Democrats, Republicans, Libertarians, or even the Tea Party have been pitching...

The Bush tax cuts were created in a different time, the economy was burning through the value it had created during the Dotcom expansion using the home equity bubble as a lever. We needed people to return the money they had extracted from their homes and businesses into the goods and services to keep the economy running at red line for a while longer. The Bush tax policies were perfect for keeping people spending.

Today is a different time, like a teenager with a trust fund, we've spent most of the value we have created over the past 20 years and have a terrible hangover (our's is from Debt this time). So do we need the same tax policy as the one designed to keep a red hot economy red hot? Maybe not...

I'm thinking what we need is to restructure the tax cuts for the wealthy, giving them bigger incentives for each person they hire. Hire more people, get more tax breaks, we bribe them to get off the fence and back into the economy. To offset the bill, we need to boost taxes slightly on the middle class. The combination of these two approaches would result in more middle class people paying slightly more taxes (and less unemployed suckling from the public tit). The increased number of middle class working people would pay much of the cost of Government. If you want a balanced budget, you need to address entitlements, but that's a different discussion.

The punch line is that as more people produce value into the economy (work), the economy would start to grow, businesses would start to grow, the rich would get richer (sorry, I know it's popular to dislike the rich folk these days), the middle class would get bigger, and the unemployed would have the opportunities for work.

If anyone is still reading this please shoot me your comments...

The Dead Weather - Blue Blood Blues (Live from Third Man Records)

Sometimes you just can't get a base riff out of your head.

Political Crack

The first might have been to much, the second was way too much and now congress is talking about a third stimulus package!

Unbelievable

Transparency in Government IT

I've been looking around the Federal IT Dashboard, with some familiarity of a few of the programs addressed at the site. The site seemed to give a reasonable evaluation of the programs. By clicking on the various bars this web site allows anyone to drill into the programs that make up that portion of the portfolio. You can see the cost and schedule evaluation of each program as well as an evaluation of the program's risk.

I imagine that after the Christmas Terrorist attempt things will be changing on these charts for the Department of Homeland Security. Especially in the TSA's secure flight initiative which is currently rated green on the main page and yellow on the details.  The information supporting the previous statement has been taken off line, so here's a view of the IT dashboard for your reading pleasure.

And then what?

After a day at the beach a man was on his way back to his car when he passed a beggar sitting quietly on boardwalk. Concerned for the beggars well being, the man said “Sir, let me teach you to fish”

The beggar said “And then what?”

The man said “ Then you can have fish for dinner.”

The beggar said “And then what?”

The man said “Then you can continue to fish, maybe catch a fish to eat and one to sell so you can have some money.”

The beggar said “And then what?”

The man said “If you have a skill that you can use to make money, then you can have a job. With a job you can buy things like a car and a house.”

The beggar said “And then what?”

The man said “You can eventually retire, and spend your days relaxing on the beach”

The beggar finally said “I spend my days relaxing on the beach now, so why would I want to learn to fish!”

The man walked away.

Terrorist Trials in New York

Not so much a post, but rather a question...

Image via Wikipedia

In U.S. Courts a suspect is presumed innocent until proven guilty. All of the our investigative procedures (evidence collection...), arrest procedures (Miranda... ), and court procedures are focused on preserving this legal perspective. How can a war criminal be seized outside of our boarders, by people who are not trained in the intricacies of our legal system (non-law enforcement types) put together a case that will hold up in a U.S. criminal court?

How will the 9/11 bombers get a fair trial in New York? Who will be on the Jury? Do these criminals have peers in New York (I hope not)? If the U.S. puts these individuals on trial with a pre-determined outcome as is being indicated by Mr Holder, will this be a legitimate court or a kangaroo court?

Google Wave

Alright all of you bloggers, emailers, instant messengers, facebookers, writers, photographers, and the like, prepare to be integrated by Google...

This video takes about an hour and a half but it's worth it...

Ra Ra Ree... Kick em in the Knee...

Just a quick post following the State of the Union Speech tonight. All things considered I thought President Obama gave a great speech. He hit a lot of points that were both positive and bipartisan, making it easy to entice the applause out of the Republicans. While not being specific on most of his points (the devil is always in the details), he did mention a couple of issues that I think he will get in trouble for, protectionism being one of them.

But Enough of the serious stuff, my favorite parts were when he made Joe Biden blush like a school girl after his "Nobody messes with Joe" comment. The Vice President looked like a chameleon attempting to blend into the red stripes of the flag behind him.

The my other favorite part was watching Nancy Pelosi literally jump up and cheer like she was a cheerleader at a high school football game. She was so exuberant during the first part of the speech that someone must have said something to her because she toned it down as time passed. For a few minutes it was almost more entertaining watching her gush than it was watching the President.

Oh, the title of this post isn't meant to be mean spirited, it's the only cheer that I remember from high school...

Genomics and expanding economic value

Where will the next big value bump come from to excavate the world economy from its current pit. In a previous post, I attempted to draw a linkage to between our economic state and the value of the economy (I need to spend more time on this idea). That is the easy part, the hard part is to determine what the next major value contributor will be to the economy. This Simpsons short from Hulu.com serves may give us a clue.

or not... I just liked the clip.


Back in 2003 Juan Enriquez presented this talk on the future with genomics, a field with its roots dating all the way back to the 1970's. But there has always been something keeping the future of genomics from completely unfolding...at times our computers were to slow, other times the National policies were too hesitant, but today the primary obstacle is the the health of the economy (we have fast computers and a pro-science administration). So over the next few years, I would expect to see the field expand like it never has before.

There are a few companies that seem to agree that genomics may be the way forward. Invitrogen's purchase of Applied Biosciences combines the sale of gene sequencing equipment with genomic services. Can you imagine if you were able to upload your genome to Google Health and have Google send you alert you when treatments or cures were available for your genetic dysfunction... Now that's value!

Are you smarter that George Bush? Bill Clinton? Hillary?

The Kids IQ Center is an interesting site... It turns out that George W. Bush has an above average IQ (123), and is within seven points of President Obama (130-148, a range that I'm sure will be refined as his presedency proceeds). And Bill Clinton (137), while above average, isn't as smart as his wife, Hillary (140).



I dare anyone to take an IQ test and post their score on this blog, see how you stack up...

Very Interesting

Is Macro Economics real?

I was reading a friend's blog over at the Scratching post when I came across a very interesting sub-post by MISH on FIV. Mish compared the economics theories that have dominated macro-economic practice since 1930 to the common sense approach most eighth grade graduates would take... Very humorous and he brings up a good point... has the field of Macro Economics missed the mark? Our recent recession would indicate that the combined efforts of Keyns, Friedman, and even Hayek can not predict how and why a economy grows or fails.

But I think that MISH over-simplifies, implying that the world economy is a fixed size making balancing spending with saving as the only way to success. But that argument is countered simply by looking at the last 100 years, it is clear that the the economy is expanding but how fast? and why?

I like to combine basic physics with economics... applying the conservation of energy law to monetary policy. The applicable interpretation goes something like this; the economy is the total sum of energy created by a the people in the economy. The economy grows when the people work more to add value, but it shrinks when the population takes more than they contribute. Value is fluid across the economy much like currency (or mass and velocity in the analogy), making it easy for the economy to aggregate total value but very difficult to decompose and analyze.

So the bottom line, is that Monitarists and Keynesian theories work better if the population is adding more value through work than they are extracting through consumption. What does that mean for governments? That means that successful governments will incentivize people to add more value than they extract, making the economic pie bigger. If a nation's economic pie is bigger than the population needs, everyone is comparatively richer than they were when the economy was smaller.

Unfortunately this concept eventually runs up against entropy, or the tendency of all energy to seek it's lowest form. In economic terms the lowest energy state is the hunter and gather, or subsistence state. The implication to policy makers is that no matter how great the stimulus for increased productivity, there is always a tendency for a population to slip into less productive habits.

Which brings us back to today's problems... We built a big economy, with lots of potential, but policy makers became lazy and didn't continue to incentiveize the economy to grow honestly. Additionally we allowed our accounting practices to become clouded, impairing our ability to track real value generation. Policy makers allowed corruption to infiltrate the economy, stealing value from the core of our economy until it was a hollow shell of what it appeared to be, a real potemkin village.

It seems to me that in the future, Government should proceed on two tracks, first create a very transparent financial system that allows the true value of an economy to be exposed. Second, it should incentivize value creation at the core of the economy; creating an innovative, efficient environment for companies to succeed or fail on their own merit.

Sounds simple, right?

I want mine...

There is a new trend... in the news, around the house, even over dinner with friends... with massive amounts of federal money flowing in the name of the economic bail out, everyone is wondering about how they get their share? In some circles this may have always been a topic of conversation, but not so much in the circles I run in. This is new!

It might help if I described my friends and family; they are hard working - no excuse types of people. They pay their taxes, they manage their money, they don't whine (much), they are democrats and republicans, all sexes and orientations, and of many races... in other words I mingle with a healthy cross section of the U.S. population. I believe the people I associate with are a good representation of the hard working core of middle class America.

In our conversations we talk about the rich fat cats that are getting bailed out, we talk about the misinformed consumer (very gentle moniker) who overestimated their ability to pay for homes that were much too expensive, and we talk about the greedy middle men who set these deals up. But we have also talked about people who were relocated to an expensive area to keep a job, or entrepreneurs who took a risk in this greed fueled feeding frenzy to make a business work, and how their loss is our loss.

There is never a consensus about what steps Governments (lets bring our global partners into this, they are equally responsible) or individuals should take in the coming years, the economic crisis has put the personal interests of the very people who make the Government work at odds with the Government itself.

At the end of the conversation, one thing is always clear... we hate the idea that this crisis is going to be resolved at the expense of the people who were careful to make good choices and manage their lives according to their means. We don't like the idea that many greedy, irresponsible people are going to wind up with our tax dollars in their pockets. I just pray that we all have temperance to guide us in the coming years, because what ever happens we are not going to like the end result.

There is no "fair solution"; this crisis was brought about by greedy people taking advantage of ill informed people and the Government not enforcing the regulations. And as for my friends, we are not blameless, we sat and watched while our the cocoons we fought to build for ourselves were hijacked by greed and sloth.

Quote

"If you want to make an apple pie from scratch, 
you must first create the universe." -Carl Sagan

The campaign is over... Finally...

Even though we all must get used to having to watch regular television, drive the streets without campaign slogans, and in general re-engaging with our loved ones, none have it worse than the hard core Obama fans.  Check out this video from "the Onion"


Obama Win Causes Obsessive Supporters To Realize How Empty Their Lives Are

Lorne Michaels ... a Sarah Palin fan?

For all you Palin Nay sayers out there, check out this quote from Lorne Michaels of Saturday Night Live after she appeared on SNL...

"What do you think Palin gained from her appearance?
I think Palin will continue to be underestimated for a while. I watched the way she connected with people, and she's powerful. Her politics aren't my politics. But you can see that she's a very powerful, very disciplined, incredibly gracious woman. This was her first time out and she's had a huge impact. People connect to her." (EW.com from entertainment weeky)

This isn't what you hear most of the liberal media saying... Check it out...

The current financial Meltdown is Jimmy Carter's fault!

while listening to Rick Roberts on the way into work this Morning, I caught his summary of an Article in the "News BLAZE," going over the history of our current financial Meltdown meltdown. Its very interesting that both Bill Clinton & George W. Bush tried to correct the situation but were thwarted by liberals in congress.

P. Diddy Examines John McCain, Proclaims Him “Buggin’ the F**k Out”

P. Diddy Examines John McCain, Proclaims Him “Buggin’ the F**k Out”

I feel much better about Obama now that I've watched this...

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Its a small world... economically speaking.

While sweating on the elliptical trainer, I had the opportunity to listen Thomas Mayer, chief European economist talk about the Macro Economic situation in Europe. Well it appears that Despite the strong Euro, the Europeans are having problems of their own. Dr Mayer laments the fact that the grand European experiment is hitting some rough spots. It appears that Europe's schizophrenic approach to separating fiscal and monetary policy has caused inflation in many parts of Europe and recession fears in other areas. In other words without control of the fiscal policies of the member countries, the ECB can't take any action right now without hurting some of it's members.

Even though the ECB has maintained interests rates at a higher level than the U.S. Central bank, the European's recent growth, like the U.S., has been fueled by highly leveraging credit. The result is that the Europeans are looking at the same credit crunch as the U.S. but without having benefited from a period of sustained low interest rates.

Most folks reading this are well aware of the situation the U.S. finds itself in... with a slowing economy and a bursting credit bubble, we've got a long way to go before we are back to boom times.

And China is no better off, being the owner of much of the Debt generated in the U.S. and Europe over the last decade, they can't even spend the money they have in reserve for fear it will cause either the U.S. economy of the European economy to take a dive. And what good is money if you can't spend it?

A new strategy for McCain?

While the recent events in the presidential race have been slow lately I think McCain has stumbled on a winning strategy.

Just shut up!

It seams that when McCain is quiet and Obama does all of the talking, McCain narrows the gap. If you look at Real clear politics polls you can pick out the periods when McCain is out in front stumping his brains out and the periods where the media is ignoring him because he does better when the media is completely focused on Obama (like his trip to the Middle East)

Check it out



If you look at the far right edge of the above snapshot, you'll notice how successful the Britney and Paris adds were