the biggest threat to the US Economy is the Congress." That is the best quote I have seen in a long time and it was said by Senator Joe Manchin.
I am also struck this morning how none of the Tea Party people believe they represent the constituents who did not vote for them and would support policies of compromise. Of course, this also applies to Bernie Sanders who would need to acknowledge some of RedStateVT's views should be accommodated in compromise.
If Congress just behaved in a manner that focused on solutions that move us forward rather than trying to unwind the policies of the other side, we would make progress. And Congress would not be the biggest threat to the U.S. Economy.
Monday, December 31, 2012
Sunday, December 30, 2012
A Broken Record
This is what I feel about the political debate including what I write about it. Mr. Romney's Economic Advisor writes today in the New York Times about the need to raise taxes on the Middle Class if you are going to solve the long term fiscal deficit. He says this is so because the income tax revenue picture is already progressive and he discusses the need for solutions to the critical issues driving the future Medicare picture.
However, while reading it, I was struck by his failure to acknowledge that we have borrowed 100% of the cost of the War on Terror and no Republican will admit this and state that we should pay for it with increased revenues. I will also add that we should probably raise some revenues to pay for the unfunded Medicare Pharmacy Benefit that the Bush II administration created.
Once we have a structure for paying for the War on Terror (and that might well include some tax increases below the top 20% to help pay for the Medicare Pharmacy Benefit), then Democrats would be forced to deal with the unaffordable issue on some expenditure categories, and, hopefully, there would be a true negotiation between the GOP and the Democrats for a balanced solution to our fiscal deficit.
But when the GOP does not acknowledge the need to repay the debt that has financed the War on Terror with increased revenues, they provide cover to the Democrats to not deal with the cost of other categories. To reduce the cost of other categories to repay the debt incurred by the War on Terror is inherently unfair and unpopular with the majority of voters.
As an aside while writing the above, I am stuck yet again by how irresponsible the Bush II administration was. Unfunded wars, unfunded improved entitlements, weakening of financial regulation that allowed Ponzi Schemes and systemic economic risk to form, and in general, no regard for using facts and reality to manage the government. Just a slavish adherence to Supply Side Economics solves everything. Supply Side Economics needs a sound economy to provide benefits to the fiscal situation. Bush II destroyed a sound economy created by Reagan, Bush I and Clinton. Bush II might well be the worst President in history.
However, while reading it, I was struck by his failure to acknowledge that we have borrowed 100% of the cost of the War on Terror and no Republican will admit this and state that we should pay for it with increased revenues. I will also add that we should probably raise some revenues to pay for the unfunded Medicare Pharmacy Benefit that the Bush II administration created.
Once we have a structure for paying for the War on Terror (and that might well include some tax increases below the top 20% to help pay for the Medicare Pharmacy Benefit), then Democrats would be forced to deal with the unaffordable issue on some expenditure categories, and, hopefully, there would be a true negotiation between the GOP and the Democrats for a balanced solution to our fiscal deficit.
But when the GOP does not acknowledge the need to repay the debt that has financed the War on Terror with increased revenues, they provide cover to the Democrats to not deal with the cost of other categories. To reduce the cost of other categories to repay the debt incurred by the War on Terror is inherently unfair and unpopular with the majority of voters.
As an aside while writing the above, I am stuck yet again by how irresponsible the Bush II administration was. Unfunded wars, unfunded improved entitlements, weakening of financial regulation that allowed Ponzi Schemes and systemic economic risk to form, and in general, no regard for using facts and reality to manage the government. Just a slavish adherence to Supply Side Economics solves everything. Supply Side Economics needs a sound economy to provide benefits to the fiscal situation. Bush II destroyed a sound economy created by Reagan, Bush I and Clinton. Bush II might well be the worst President in history.
Thursday, December 27, 2012
Education Matters
Catching up on some magazines that came in over the holiday, I read a spirited defense of teachers and the role of education in society. This did not deal with teacher unions but rather the good that teachers have done for so many students and what that education is meant to accomplish.
What prompted the article was the focus on home schooling and the book advocating that everyone forego college and become a computer programmer entrepreneur. I had noticed the book but not given it much thought.
I have been concerned about home schooling because I don't understand the quality control process. However, statistics show that parents who take this on generally do OK because the kids do as well or better than the graduates of organized schools in college.
However, I know I benefited from college and not just in a monetary sense. The teachers I had in high school and college taught me to think independently, to research facts and derive a sense of how to achieve what I want given those facts. The course work taught me how to understand the complexity of this world and its societies and to appreciate the value that different experts can bring to a discussion of issues.
Just focusing on the monetary reward of education oversimplifies the role that each of us needs to play in society as a responsible citizen.
I think the origin of this lack of respect for teachers has three sources. One, teacher unions are resented for protecting underperforming teachers and creating an environment where managers have limited control over performance management processes. Two, a significant percentage of schools are not doing a good job, have not done a good job for many years, and this frustrates people who want the best for their child. Three, U.S. culture has been completely focused on the monetary reward of work for a long time (rightfully so) without reflection on the value that informed opinions being to the country.
Thus, we have a substantial number of people who believe the earth was created 6,000 years ago, doubt the scientific base that says CO2 causes the atmosphere to heat, don't understand fiscal or monetary policy and do not understand the need for gradualism in changing policies. And I cannot forget the retired NYC police officer who said to me that the government should stay out of his retirement benefits because to do otherwise was socialism. This of course is a variant on the theme that many retired people believe Medicare is not a government program and therefore should not be part of any budget solution. Ignorance is dangerous to political process.
What prompted the article was the focus on home schooling and the book advocating that everyone forego college and become a computer programmer entrepreneur. I had noticed the book but not given it much thought.
I have been concerned about home schooling because I don't understand the quality control process. However, statistics show that parents who take this on generally do OK because the kids do as well or better than the graduates of organized schools in college.
However, I know I benefited from college and not just in a monetary sense. The teachers I had in high school and college taught me to think independently, to research facts and derive a sense of how to achieve what I want given those facts. The course work taught me how to understand the complexity of this world and its societies and to appreciate the value that different experts can bring to a discussion of issues.
Just focusing on the monetary reward of education oversimplifies the role that each of us needs to play in society as a responsible citizen.
I think the origin of this lack of respect for teachers has three sources. One, teacher unions are resented for protecting underperforming teachers and creating an environment where managers have limited control over performance management processes. Two, a significant percentage of schools are not doing a good job, have not done a good job for many years, and this frustrates people who want the best for their child. Three, U.S. culture has been completely focused on the monetary reward of work for a long time (rightfully so) without reflection on the value that informed opinions being to the country.
Thus, we have a substantial number of people who believe the earth was created 6,000 years ago, doubt the scientific base that says CO2 causes the atmosphere to heat, don't understand fiscal or monetary policy and do not understand the need for gradualism in changing policies. And I cannot forget the retired NYC police officer who said to me that the government should stay out of his retirement benefits because to do otherwise was socialism. This of course is a variant on the theme that many retired people believe Medicare is not a government program and therefore should not be part of any budget solution. Ignorance is dangerous to political process.
And Back to Health Care We Go
E.J. Dionne nails the GOP inconsistency on the head with some points I have been making. Health Insurance Exchanges at the State level were a GOP idea and we do not have an entitlement problem, we have a cost of health care problem and solving it is complicated. Compassionate end of life care must contribute to control of costs.
Link
Link
Monday, December 24, 2012
Parallels Between 1933 Nazi's & the House GOP
I know that is a provocative title, but I just learned a fact about the 1933 election that brought Hitler to power.
The National Socialist's Party led by Hitler only got 44% of the vote but because there were so many other parties running in the election, Hitler got to form the government. After he was in office, he cancelled elections thereafter. So WWII and the holocaust arose despite 56% of the voters in the country voting for something else.
Now we have the House GOP, which nationwide had 1 million fewer votes in the 2012 House of Representative elections but 25 more seats because of gerrymandering, refusing to govern by compromising and keeping the country running in a prudent fashion. Is it any wonder that Obama beat Romney by getting more votes? Is it any wonder that in the Senate races more Democrats won than Republicans?
Republicans are in the minority and have an obligation to present their point of view, but also have an obligation to keep the government running. Stopping the government from working is the equivalent of canceling elections and starting a war as a minority party.
Is this why there is such support within the GOP for no regulation of semi-automatic weapons or gun magazines? So Lindsay Graham, who I thought was a reasonable person, can march into war with his Bushmaster or AK47 that he keeps in his home. I suspect he lives in a safe neighborhood so he doesn't need it to defend his property from riff faff invading his home. So, perhaps, the GOP is getting itself into military fighting shape when they only get 44% of the vote.
I know there are statistics out there that show murders happen everywhere in the U.S. no matter what the regulation. But should Fireman have to wait for police escorts before they respond to a fire? Should children have to be protected by armed guards just in case a madman walks into their school? What kind of country does the NRA want to live in?
The murder rate in the U.S. is 4x that of Britain and 6x that of Germany. And more and more of US murders are wanton killings of randomly available targets, not gang warfare. I don't believe video games are causing this, but they could be toned down. I don't believe a national database will capture every mildly insane person, but a licensing procedure with interviews (and an ATF person with the guts to deny a person a license if they are thought to be unstable) might. But so would limiting access to the weapons. No one needs semi-automatic weapons with huge magazines. Cities should be able to try and get handguns off the streets and license those who do have them. We need a dog license and a drivers license, why not a gun license? I know it is in the Constitution but we don't want anyone to be able to buy a bazooka or shoulder fired missile, so why are semi-automatic weapons legal?
The GOP is a rural dominated party. So is the Egyptian Brotherhood. The Egyptian constitution that will install Sharia influenced processes will pass, but Cairo residents voted 57% against it. More parallels between the modern GOP and other potentially autocratic regimes.
This is depressing, I am going to our XMAS eve traditional night out now.
Merry Christmas. I hope we get some sanity in D.C. in our collective stocking.
The National Socialist's Party led by Hitler only got 44% of the vote but because there were so many other parties running in the election, Hitler got to form the government. After he was in office, he cancelled elections thereafter. So WWII and the holocaust arose despite 56% of the voters in the country voting for something else.
Now we have the House GOP, which nationwide had 1 million fewer votes in the 2012 House of Representative elections but 25 more seats because of gerrymandering, refusing to govern by compromising and keeping the country running in a prudent fashion. Is it any wonder that Obama beat Romney by getting more votes? Is it any wonder that in the Senate races more Democrats won than Republicans?
Republicans are in the minority and have an obligation to present their point of view, but also have an obligation to keep the government running. Stopping the government from working is the equivalent of canceling elections and starting a war as a minority party.
Is this why there is such support within the GOP for no regulation of semi-automatic weapons or gun magazines? So Lindsay Graham, who I thought was a reasonable person, can march into war with his Bushmaster or AK47 that he keeps in his home. I suspect he lives in a safe neighborhood so he doesn't need it to defend his property from riff faff invading his home. So, perhaps, the GOP is getting itself into military fighting shape when they only get 44% of the vote.
I know there are statistics out there that show murders happen everywhere in the U.S. no matter what the regulation. But should Fireman have to wait for police escorts before they respond to a fire? Should children have to be protected by armed guards just in case a madman walks into their school? What kind of country does the NRA want to live in?
The murder rate in the U.S. is 4x that of Britain and 6x that of Germany. And more and more of US murders are wanton killings of randomly available targets, not gang warfare. I don't believe video games are causing this, but they could be toned down. I don't believe a national database will capture every mildly insane person, but a licensing procedure with interviews (and an ATF person with the guts to deny a person a license if they are thought to be unstable) might. But so would limiting access to the weapons. No one needs semi-automatic weapons with huge magazines. Cities should be able to try and get handguns off the streets and license those who do have them. We need a dog license and a drivers license, why not a gun license? I know it is in the Constitution but we don't want anyone to be able to buy a bazooka or shoulder fired missile, so why are semi-automatic weapons legal?
The GOP is a rural dominated party. So is the Egyptian Brotherhood. The Egyptian constitution that will install Sharia influenced processes will pass, but Cairo residents voted 57% against it. More parallels between the modern GOP and other potentially autocratic regimes.
This is depressing, I am going to our XMAS eve traditional night out now.
Merry Christmas. I hope we get some sanity in D.C. in our collective stocking.
Sunday, December 23, 2012
Pre-XMAS Musing in this Political Year
One view on gun control and it has a constitutional basis in the 2nd Amendment.
Click to see
Thomas Friedman's observation on the GOP.
"It can’t win with a base that is at war with math, physics, human biology, economics and common-sense gun laws all at the same time."
No wonder they can't govern the House with a sense of how to fit in the world that the rest of us live in.
And Ross Douthat calls Michael Bloomberg a center-left policitican. I guess he is from a Republican view point but not from a Democratic view. He would be a center right person by most people's definition because he supports Wall Street and Big Business and doesn't expect any support from unions.
But meanwhile, Mr. Douthat must be really depressed by the GOP performance in D.C. stating:
"The right-wing view is embittered, paranoid and confused. It opposes anything the establishment supports but doesn’t know what it wants to do instead. (Defund government or protect Medicare? Break up the banks or deregulate them? Send more troops to Libya or don’t get involved? Protect our liberties or put our schools on lockdown?) Sometimes the right’s “just say no” approach holds the establishment at bay — as on climate change and immigration, to date. But sometimes, as the House Republicans are demonstrating in the budget showdown, it makes the eventual defeat that much more sweeping."
Click to see
Thomas Friedman's observation on the GOP.
"It can’t win with a base that is at war with math, physics, human biology, economics and common-sense gun laws all at the same time."
No wonder they can't govern the House with a sense of how to fit in the world that the rest of us live in.
And Ross Douthat calls Michael Bloomberg a center-left policitican. I guess he is from a Republican view point but not from a Democratic view. He would be a center right person by most people's definition because he supports Wall Street and Big Business and doesn't expect any support from unions.
But meanwhile, Mr. Douthat must be really depressed by the GOP performance in D.C. stating:
"The right-wing view is embittered, paranoid and confused. It opposes anything the establishment supports but doesn’t know what it wants to do instead. (Defund government or protect Medicare? Break up the banks or deregulate them? Send more troops to Libya or don’t get involved? Protect our liberties or put our schools on lockdown?) Sometimes the right’s “just say no” approach holds the establishment at bay — as on climate change and immigration, to date. But sometimes, as the House Republicans are demonstrating in the budget showdown, it makes the eventual defeat that much more sweeping."
I am not sure why Mr. Douthat doesn't support climate change policies (it now appears that the ocean's absorption of CO2 is causing its acidity to increase potentially killing all all shell fish) or immigration reform (we need the 11mm workers to prevent the GDP contracting along with a 5% decline in the labor force), but at least he is acknowledging the reality that people want politicians to govern by working with the other side when they are in the minority and in the majority.
Saturday, December 22, 2012
National Databases for the Mentally Impaired?
This is what the NRA is proposing to reduce the risk of the mentally ill getting guns with which to shoot up innocent people.
Isn't a national database of individual abilities what the book 1984 was all about? Isn't keeping the government out of individual lives what every American wants to prevent? How does a person who somehow overcomes their mental illness supposed to get their name off the list so they can get a job? Would such a specific law targeting a specific group even be constitutional?
The 1st group I would imagine suing to prevent the law from being implemented is the NRA.
All we need to do is get automatic weapons off the street and out of circulation. If the Congress had let the law continue in 2004, there wouldn't be very many automatic weapons in circulation. Now it will take 100 years for them to wear out and not be useful, although you might be able to do it faster by limiting ammunition sales.
I support hunters, but this focus on allowing anyone to own any gun is beyond my comprehension. Why not let everyone own a bazooka and a shoulder fired anti-aircraft missile? After all, they are simply forms of guns and something any self-respecting terrorist would love to have. Then we would need for the good guys to have the same weapons so they could take out the terrorists. This is the world the NRA wants us to live in?
Isn't a national database of individual abilities what the book 1984 was all about? Isn't keeping the government out of individual lives what every American wants to prevent? How does a person who somehow overcomes their mental illness supposed to get their name off the list so they can get a job? Would such a specific law targeting a specific group even be constitutional?
The 1st group I would imagine suing to prevent the law from being implemented is the NRA.
All we need to do is get automatic weapons off the street and out of circulation. If the Congress had let the law continue in 2004, there wouldn't be very many automatic weapons in circulation. Now it will take 100 years for them to wear out and not be useful, although you might be able to do it faster by limiting ammunition sales.
I support hunters, but this focus on allowing anyone to own any gun is beyond my comprehension. Why not let everyone own a bazooka and a shoulder fired anti-aircraft missile? After all, they are simply forms of guns and something any self-respecting terrorist would love to have. Then we would need for the good guys to have the same weapons so they could take out the terrorists. This is the world the NRA wants us to live in?
Friday, December 21, 2012
Has the GOP Lost Their Mind?
On the Fiscal Cliff, if you just say no and don't participate in a solution, how can you expect to influence the solution? No wonder most voters blame the GOP for the calamity we are possibly going to enter.
As for the NRA, my estimate is that it would cost $10 bn a year to put an armed guard in every school. I estimated, with the help of my colleagues at work where we split 50/50 politically, that there are 150,000 schools and each guard would cost $70,000 a year with benefits. How are school systems that are under financial pressure going to pay for these guards? Once again, the GOP sticks their head in the sand and says no to everything. I think the GOP supports mass murderers.
As for the NRA, my estimate is that it would cost $10 bn a year to put an armed guard in every school. I estimated, with the help of my colleagues at work where we split 50/50 politically, that there are 150,000 schools and each guard would cost $70,000 a year with benefits. How are school systems that are under financial pressure going to pay for these guards? Once again, the GOP sticks their head in the sand and says no to everything. I think the GOP supports mass murderers.
Tuesday, December 11, 2012
If you care about the cost & quality of college
I wrote this last week, but no one has read it and anyone who is interested in what universities are doing and what it costs should know this.
Last week's Economist article on the problems with higher education has some shocking data.
The cost of a university education has risen by 5x the rate of inflation since 1983. The cost of a university education in 2010 requires 38% of median income up from 23% in the year 2001. And the standards for such degrees have been reduced to the point where I am not sure how to gauge what academic results really mean. 43% of all grades at 4 year universities are "A's". GPA's in 2006 averaged 3.11 up from 2.52 in the 1950's. AND a third of students to not take any courses requiring more than 40 pages of reading over an entire term.
This is appalling and I welcome reader input as to what can be done to change this. I don't think the Federal Government has any role in any of this and I don't think that for-profit education is an answer for this either.
Maybe, business should insist on 2 year degrees and hire those people before they hire 4 year people for whom they have no idea what standards they have been educated to. I hate to say that because I know I benefited from a liberal arts education, but then I had to read 40 pages a WEEK in almost every course.
Sunday, December 9, 2012
Sunday 12/9 Musings
I think we are going over the fiscal cliff because many in the Government want to reform the overall tax code and you cannot accomplish that in the time we have left before we go over the cliff. And if we go over the cliff, you are then changing tax rates from higher levels so it is easier to accomplish. One stalking horse from the GOP Senate is a design to broaden the tax base. The only thing left is a VAT or national sales tax, which while it is regressive, is probably a good thing from an incentive stand point as a nation we do need to raise our savings rate. Thank you Tom Coburn (R) of Oklahoma for revealing that.
Both the Economist and Thomas Friedman highlight the idiocy of Israel's new settlement plans on the West Bank and the Economist most pointedly says Israel should either get going on a 2 State negotiation or realize that if they do not, Jews will be a minority in an Arab country and the implications of how Jews would remain in control are horrifying. I fear Israel is reaching a point of no return of going over their own version of a morality cliff and that saddens me deeply. More deeply than continuing to live with a need for a strong military and an iron fist on terrorism which I completely support.
Ross Douthat identified what it would take for the GOP to open my mind on voting for them.
"The conservatism of 2011 and 2012 had a lot to say about the long-term liabilities of the American Government but far too little to say about the most immediate anxieties of American citizens, from rising health care costs to stagnating wages to the socioeconomic malaise spreading across the country's working class. Neither the Reagan legacy nor the current conservative catechism holds the solutions to these problems: they require Republicans to apply their principles more creatively, and think about policy anew."
And before quoting Maureen Dowd on what the GOP Presidential process produced in a candidate and doomed whomever to lose, I must say to organizations like Move-On and AARP who are against all entitlement reforms, GET REALISTIC. The country cannot afford what is promised and must find ways to stabilize entitlements. Yes, we need to control health care costs, so help develop policies that will do that without creating death panels. They exist in small pockets around the country and need to expanded through advocacy.
What the GOP Primary Process forgot about the country and what must change if I am to vote for the GOP again. Progress is made in the middle by being respectful of all views on all issues. Adhere to principles but respect that the either side's principles are deserving of respect. That is the nation we have and what we must work with.
"Who would have ever thought blacks would get and support the first black president? Who would have ever thought women would shy away from the party of transvaginal probes? Who would ever have thought gays would work against a party that treated them as immoral and subhuman? Who would have ever thought young people would desert a party that ignored science and hectored them on social issues? Who would have ever thought Latinos would scorn a party that expected them to finish up their chores and self-deport?"
Both the Economist and Thomas Friedman highlight the idiocy of Israel's new settlement plans on the West Bank and the Economist most pointedly says Israel should either get going on a 2 State negotiation or realize that if they do not, Jews will be a minority in an Arab country and the implications of how Jews would remain in control are horrifying. I fear Israel is reaching a point of no return of going over their own version of a morality cliff and that saddens me deeply. More deeply than continuing to live with a need for a strong military and an iron fist on terrorism which I completely support.
Ross Douthat identified what it would take for the GOP to open my mind on voting for them.
"The conservatism of 2011 and 2012 had a lot to say about the long-term liabilities of the American Government but far too little to say about the most immediate anxieties of American citizens, from rising health care costs to stagnating wages to the socioeconomic malaise spreading across the country's working class. Neither the Reagan legacy nor the current conservative catechism holds the solutions to these problems: they require Republicans to apply their principles more creatively, and think about policy anew."
And before quoting Maureen Dowd on what the GOP Presidential process produced in a candidate and doomed whomever to lose, I must say to organizations like Move-On and AARP who are against all entitlement reforms, GET REALISTIC. The country cannot afford what is promised and must find ways to stabilize entitlements. Yes, we need to control health care costs, so help develop policies that will do that without creating death panels. They exist in small pockets around the country and need to expanded through advocacy.
What the GOP Primary Process forgot about the country and what must change if I am to vote for the GOP again. Progress is made in the middle by being respectful of all views on all issues. Adhere to principles but respect that the either side's principles are deserving of respect. That is the nation we have and what we must work with.
"Who would have ever thought blacks would get and support the first black president? Who would have ever thought women would shy away from the party of transvaginal probes? Who would ever have thought gays would work against a party that treated them as immoral and subhuman? Who would have ever thought young people would desert a party that ignored science and hectored them on social issues? Who would have ever thought Latinos would scorn a party that expected them to finish up their chores and self-deport?"
Saturday, December 8, 2012
Conservative Musings
It is good every once in a while to read something that reminds you that conservative positions can have a highly principled basis. The country needs conservative principles if it is to prosper. Today's WSJ had several well written articles reminding me of that.
An interview with the outgoing Head of the Heritage Foundation highlighted 37 years of what the think tank has been trying to accomplish. The 1st thing is that the Heritage Foundation always starts one of its papers with the facts. I repeat, THE FACTS. Good policy must be based upon facts and principles. You can debate the propriety of where do draw the line between competing principles but policies must be based upon and address the facts. That is the 1st premise of what the Heritage Foundation has tried to accomplish. We can only hope Mr. DeMint believes in this.
These sound thinking Conservatives developed Romney Care with the requirement that all people must be in the Health Insurance System because without them being there they become freeloaders on the system when they receive care they cannot pay for. I also believe (but cannot quote chapter and verse) that they had a solution for controlling health care costs within the existing framework for Heath Insurance, not vouchers that push that off on the Insurance Companies that have so far not figured out a way to control health care costs.
Mr. Feulner, the outgoing head of the foundation, recalls when conservatives liked to work with Democrats to have government policy solve problems, not simply oppose any government policy. He cites Jack Kemp working with Democrats to create urban enterprise zones to reduce poverty in inner cities.
Mr. Feulner also recalls his free trade argument with Roger Milliken, a big financial supporter of the foundation. Mr. Millikan wanted the foundation to support a textile quota system. I am a free trade supporter and I quote Mr. Feulner's response to Mr. Milliken.
"Sorry Roger, you know we are free traders. When you had me down there to your plant, I asked why should you be able to buy a German spinning mill and a Japanese loom, but my wife can't buy a Malaysian short for our kids at Wal-Mart? It doesn't make any sense. And he ripped up his contribution check in front of me."
That is principled conservatism. Not what we see in the Congress where GOP legislators refuse to tackle tax subsidies for energy and other industrial companies and farmers (Democrats have a problem with that one also).
I hope Mr. DeMint does not destroy the Heritage Foundations commitment to laying out the facts.
There was also an article on the SEC sending a Wells Notice to Netflix for allegedly releasing material information on Facebook and that being illegal.
I have mixed emotions about the SEC. They certainly have an important role to play as witness what happens when they are not effective: Bernie Madoff (and how many others like him?), insufficient investor disclosure of risk management (Lehman, Bear, Merrill, AIG, Citi, JPM, Countrywide), and inadequate policing of processes laid out in prospectuses (how many untruths were there in RMBS securities before the Great Recession). However, they can be overzealous as well. A friend of a friend sits in jail half way through a 10 year sentence because he signed financial statement 3 months after becoming CFO and then the following month found and disclosed an accounting fraud in an Asian subsidiary. He acted with the best knowledge that he possessed at each step of the way but because he signed financials before he uncovered the fraud, he was prosecuted, despite the fact that he corrected the financial statements as soon as he knew the truth. This is hardly justice.
Now, the news the head of Netflix released on Facebook was not directly tied to anything in the financial statements and he has 200,000 Facebook friends. More people saw this bit of information this way than they would have through a Press Release on the Investor Relations page. Now such a Press Release should have probably been released in conjunction with the Facebook post, but is this really material enough to warrant a Wells Notice. The SEC has tendency to run amok and I think the reason is that they are all lawyers. They need financial analysts who understand materiality and proper process and can look at the world in a practical manner to protect investors. Instead they just keep hiring lawyers who think law suits are the only measure of productivity.
By the way, I fail to see how fining companies for bad past behavior against shareholders helps shareholders. This method of changing behavior only harms shareholders because the money paid in fines could otherwise have been used in one manner or another to help shareholder returns. This SEC policy makes me livid.
I also detest the double taxation of dividends but that cow is so far out of the barn, it is not worthy of any further elucidation.
An interview with the outgoing Head of the Heritage Foundation highlighted 37 years of what the think tank has been trying to accomplish. The 1st thing is that the Heritage Foundation always starts one of its papers with the facts. I repeat, THE FACTS. Good policy must be based upon facts and principles. You can debate the propriety of where do draw the line between competing principles but policies must be based upon and address the facts. That is the 1st premise of what the Heritage Foundation has tried to accomplish. We can only hope Mr. DeMint believes in this.
These sound thinking Conservatives developed Romney Care with the requirement that all people must be in the Health Insurance System because without them being there they become freeloaders on the system when they receive care they cannot pay for. I also believe (but cannot quote chapter and verse) that they had a solution for controlling health care costs within the existing framework for Heath Insurance, not vouchers that push that off on the Insurance Companies that have so far not figured out a way to control health care costs.
Mr. Feulner, the outgoing head of the foundation, recalls when conservatives liked to work with Democrats to have government policy solve problems, not simply oppose any government policy. He cites Jack Kemp working with Democrats to create urban enterprise zones to reduce poverty in inner cities.
Mr. Feulner also recalls his free trade argument with Roger Milliken, a big financial supporter of the foundation. Mr. Millikan wanted the foundation to support a textile quota system. I am a free trade supporter and I quote Mr. Feulner's response to Mr. Milliken.
"Sorry Roger, you know we are free traders. When you had me down there to your plant, I asked why should you be able to buy a German spinning mill and a Japanese loom, but my wife can't buy a Malaysian short for our kids at Wal-Mart? It doesn't make any sense. And he ripped up his contribution check in front of me."
That is principled conservatism. Not what we see in the Congress where GOP legislators refuse to tackle tax subsidies for energy and other industrial companies and farmers (Democrats have a problem with that one also).
I hope Mr. DeMint does not destroy the Heritage Foundations commitment to laying out the facts.
There was also an article on the SEC sending a Wells Notice to Netflix for allegedly releasing material information on Facebook and that being illegal.
I have mixed emotions about the SEC. They certainly have an important role to play as witness what happens when they are not effective: Bernie Madoff (and how many others like him?), insufficient investor disclosure of risk management (Lehman, Bear, Merrill, AIG, Citi, JPM, Countrywide), and inadequate policing of processes laid out in prospectuses (how many untruths were there in RMBS securities before the Great Recession). However, they can be overzealous as well. A friend of a friend sits in jail half way through a 10 year sentence because he signed financial statement 3 months after becoming CFO and then the following month found and disclosed an accounting fraud in an Asian subsidiary. He acted with the best knowledge that he possessed at each step of the way but because he signed financials before he uncovered the fraud, he was prosecuted, despite the fact that he corrected the financial statements as soon as he knew the truth. This is hardly justice.
Now, the news the head of Netflix released on Facebook was not directly tied to anything in the financial statements and he has 200,000 Facebook friends. More people saw this bit of information this way than they would have through a Press Release on the Investor Relations page. Now such a Press Release should have probably been released in conjunction with the Facebook post, but is this really material enough to warrant a Wells Notice. The SEC has tendency to run amok and I think the reason is that they are all lawyers. They need financial analysts who understand materiality and proper process and can look at the world in a practical manner to protect investors. Instead they just keep hiring lawyers who think law suits are the only measure of productivity.
By the way, I fail to see how fining companies for bad past behavior against shareholders helps shareholders. This method of changing behavior only harms shareholders because the money paid in fines could otherwise have been used in one manner or another to help shareholder returns. This SEC policy makes me livid.
I also detest the double taxation of dividends but that cow is so far out of the barn, it is not worthy of any further elucidation.
Friday, December 7, 2012
And I forgot, the U.S. is against International Cripples
The Senate GOP voted down a treaty based upon our own laws regarding people with disabilities because of threats to individual liberty that are simply false. Not even Robert Dole could shame these GOP Senators into voting Yes.
CO2 is Acidic and it is destroying Shell Fish Beds
I am pretty sure that among my regular readers, only RedStateVT is a nonbeliever in Global Warming. He is just not convinced that the measured warming is the result of human activity. However, I do not think he denies the fact that human activity is causing the world to emit more CO2.
Advocates that nothing needs to change like to point out that the oceans absorb CO2. Now comes a report on the reality that acidic ocean water is destroying shell fish beds and shell fish farming. For now, the farming can offset the acid with alkalizers, but they do not believe they will be able to do so forever.
What this means is, that if you enjoy shell fish (Oysters, Clams, Scallops, Lobsters, Shrimp) you should be concerned about reducing the CO2 emission into the atmosphere because the shell fish in the ocean cannot stand any more CO2 being absorbed into the oceans. There is nothing any nation in the world can do to stop this tomorrow. All we can do is make slow progress aimed at improving this situation. That means attacking CO2 emissions to save the Shell Fish.
and I would add, who knows what the acid in the ocean will do to any other living thing that swims in it.
What a win! Reduce CO2 to lower acid in the oceans and have the side effect of working to slow Global Warming.
Advocates that nothing needs to change like to point out that the oceans absorb CO2. Now comes a report on the reality that acidic ocean water is destroying shell fish beds and shell fish farming. For now, the farming can offset the acid with alkalizers, but they do not believe they will be able to do so forever.
What this means is, that if you enjoy shell fish (Oysters, Clams, Scallops, Lobsters, Shrimp) you should be concerned about reducing the CO2 emission into the atmosphere because the shell fish in the ocean cannot stand any more CO2 being absorbed into the oceans. There is nothing any nation in the world can do to stop this tomorrow. All we can do is make slow progress aimed at improving this situation. That means attacking CO2 emissions to save the Shell Fish.
and I would add, who knows what the acid in the ocean will do to any other living thing that swims in it.
What a win! Reduce CO2 to lower acid in the oceans and have the side effect of working to slow Global Warming.
The Labor Stat's are correct, Jack Welch is wrong
I read an article this week by two economists about the need for policy makers to manage policy with recognition that the baby boomers are retiring. While that should be self evident, it is not as seen in policy proposals by both parties.
1st, the headline. 200,000 baby boomers are now retiring every month. Yes, RedStateVT, you are in that number a couple of years ago. That means, the economy only needs to generate 100,000 incremental jobs a month to absorb new entrants to the workforce. Since the economy has been averaging @150,000 jobs a month for the last 2 years, the labor statistics are correct and Jack Welch's snide Tweet was factually wrong. He should apologize to the professionals who assemble this data.
2nd, the GOP was correct in rejecting President Obama's fiscal stimulus proposal aimed at improving the rate of improvement in the labor rate. We should spend more money on infrastructure repair, but at the same time we have to improve the fiscal balance. Now is the time to start that process. We should pay for infrastructure by reducing tax subsidies to industry.
3rd, the GOP really blew it in under Bush II. We needed those budget surpluses to pay for the baby boomers legitimate claims on entitlements starting now. Those claims are going to be worth 3% to 4% of GDP for the next 30 years and we are going to pay for them somehow. It would have been great to be saving for them by paying down the outstanding debt by not having the Bush Tax Cuts for the last 10 years and pay for the War on Terror from current cash flow.
4th, Simpson Bowles is the only path to managing the increasing claims on entitlements and fostering economic growth to pay for them. If only the Politicians would lead and not pander to the extreme right and left.
1st, the headline. 200,000 baby boomers are now retiring every month. Yes, RedStateVT, you are in that number a couple of years ago. That means, the economy only needs to generate 100,000 incremental jobs a month to absorb new entrants to the workforce. Since the economy has been averaging @150,000 jobs a month for the last 2 years, the labor statistics are correct and Jack Welch's snide Tweet was factually wrong. He should apologize to the professionals who assemble this data.
2nd, the GOP was correct in rejecting President Obama's fiscal stimulus proposal aimed at improving the rate of improvement in the labor rate. We should spend more money on infrastructure repair, but at the same time we have to improve the fiscal balance. Now is the time to start that process. We should pay for infrastructure by reducing tax subsidies to industry.
3rd, the GOP really blew it in under Bush II. We needed those budget surpluses to pay for the baby boomers legitimate claims on entitlements starting now. Those claims are going to be worth 3% to 4% of GDP for the next 30 years and we are going to pay for them somehow. It would have been great to be saving for them by paying down the outstanding debt by not having the Bush Tax Cuts for the last 10 years and pay for the War on Terror from current cash flow.
4th, Simpson Bowles is the only path to managing the increasing claims on entitlements and fostering economic growth to pay for them. If only the Politicians would lead and not pander to the extreme right and left.
Thursday, December 6, 2012
Jim DeMint Heads off to Head the Heritage Foundations
I am not sure what to make of this. I have had respect for the Heritage Foundation's point of view as they designed RomneyCare, and by implication, ObamaCare. I not also that Utah, a state where the GOP dominates, has Health Insurance Exchanges so individuals have access to group rates.
Does this mean Jim DeMint believes in that approach to solving our heathcare woes or does he intend to whip the Foundation into shape so it never does something like that again?
Does this mean Jim DeMint believes in that approach to solving our heathcare woes or does he intend to whip the Foundation into shape so it never does something like that again?
College Education Issues
This week's Economist article on the problems with higher education has some shocking data.
The cost of a university education has risen by 5x the rate of inflation since 1983. The cost of a university education in 2010 requires 38% of median income up from 23% in the year 2001. And the standards for such degrees have been reduced to the point where I am not sure how to gauge what academic results really mean. 43% of all grades at 4 year universities are "A's". GPA's in 2006 averaged 3.11 up from 2.52 in the 1950's. AND a third of students to not take any courses requiring more than 40 pages of reading over an entire term.
This is appalling and I welcome reader input as to what can be done to change this. I don't think the Federal Government has any role in any of this and I don't think that for-profit education is an answer for this either.
Maybe, business should insist on 2 year degrees and hire those people before they hire 4 year people for whom they have no idea what standards they have been educated to. I hate to say that because I know I benefited from a liberal arts education, but then I had to read 40 pages a WEEK in almost every course.
Wednesday, December 5, 2012
Governor Romney Gets a Cushy Job
The internet world was making much about Governor Romney accepting his appointment to the Board of Directors of Marriott Corporation. These articles were basically saying that he was a working man again.
There is no cushier job than being a member of a big company's board of directors. Yes, you have real responsibilities and, yes, you do have to do some work, but you get to do a lot of that work at home.
So for somewhere between $150,000 and $300,000 a year, Governor Romney's buddies have asked him to attend 10 meetings a year and do 1 to 2 days of work before each meeting. So he will be paid somewhere between $5,000 and $10,000 a day for 30 days of work a year. And he will get company paid health insurance as well.
Nice work if you can get it. I would roll over and go figurative heaven if that were to happen to me.
There is no cushier job than being a member of a big company's board of directors. Yes, you have real responsibilities and, yes, you do have to do some work, but you get to do a lot of that work at home.
So for somewhere between $150,000 and $300,000 a year, Governor Romney's buddies have asked him to attend 10 meetings a year and do 1 to 2 days of work before each meeting. So he will be paid somewhere between $5,000 and $10,000 a day for 30 days of work a year. And he will get company paid health insurance as well.
Nice work if you can get it. I would roll over and go figurative heaven if that were to happen to me.
Tuesday, December 4, 2012
Whoops, I forgot about the Conservatives who don't face voters
They are coming out of the wood work to oppose any compromise, saying that the President did not win a mandate. So when 70+% of the voters blame the Republicans for sending us over the cliff and possibly into recession, know that I will be in agreement with them.
I hope you have enough cash to weather the recession because your investments will be in sewer if this comes to pass without compromise.
Here are some quotes assembled from a Yahoo story.
I hope you have enough cash to weather the recession because your investments will be in sewer if this comes to pass without compromise.
Here are some quotes assembled from a Yahoo story.
"Heritage's response echoed the sentiment of many conservatives in Washington who are urging House Republicans to avoid cutting a deal with the president if it means raising taxes.
In an open letter signed by more than 100 prominent conservative activists and organized by the advocacy group Let Freedom Ring, House Republicans were warned that they would not receive support in the future if they "cave" during negotiations.
"In the House, the nation elected in 2012 one of the largest Republican majorities in the past 100 years. You have a mandate to fight for conservative principles that is arguably much broader than the one that narrowly reelected President Barack Obama claims to have for his leftist agenda," the letter read. It was signed by Republican activists like Richard Viguerie, Leadership Institute founder Morton Blackwell, Eagle Forum founder Phyllis Schlafly, Media Research Center President Brent Bozell and Republican donor Foster Friess."
Monday, December 3, 2012
While Politicians are Not Being Serious,
I will not have much to say. We all know we need a total of $4.0 trillion and that will mean 1/3 from revenue and 2/3 from spending. The President asked for $1.6 bn of revenue which is 40%, and showed some spending cuts, but the Republicans are still focused on making the revenue number lower without putting up any spending cut ideas of their own. The President should not negotiate with himself.
The real reason to write tonight is The Economist article on the problems with higher education. There was some shocking data in this article.
The cost of a university education has risen by 5x the rate of inflation since 1983. The cost of a university education in 2010 requires 38% of median income up from 23% in the year 2001. And the standards for such degrees have been reduced to the point where I am not sure how to gauge what academic results really mean. 43% of all grades at 4 year universities are "A's". GPA's in 2006 averaged 3.11 up from 2.52 in the 1950's. AND a third of students to not take any courses requiring more than 40 pages of reading over an entire term.
This is appalling and I welcome reader input as to what can be done to change this. I don't think the Federal Government has any role in any of this and I don't think that for-profit education is an answer for this either.
Maybe, business should insist on 2 year degrees and hire those people before they hire 4 year people for whom they have no idea what standards they have been educated to. I hate to say that because I know I benefited from a liberal arts education, but then I had to read 40 pages a WEEK in almost every course.
The real reason to write tonight is The Economist article on the problems with higher education. There was some shocking data in this article.
The cost of a university education has risen by 5x the rate of inflation since 1983. The cost of a university education in 2010 requires 38% of median income up from 23% in the year 2001. And the standards for such degrees have been reduced to the point where I am not sure how to gauge what academic results really mean. 43% of all grades at 4 year universities are "A's". GPA's in 2006 averaged 3.11 up from 2.52 in the 1950's. AND a third of students to not take any courses requiring more than 40 pages of reading over an entire term.
This is appalling and I welcome reader input as to what can be done to change this. I don't think the Federal Government has any role in any of this and I don't think that for-profit education is an answer for this either.
Maybe, business should insist on 2 year degrees and hire those people before they hire 4 year people for whom they have no idea what standards they have been educated to. I hate to say that because I know I benefited from a liberal arts education, but then I had to read 40 pages a WEEK in almost every course.
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