Blood and Irony

Stimulative Effects of Consumer Protectionzzzzzzzzzzzzzz

2011-11-05T11:32:00.002-04:00

The general perception of consumer protections (at best) is that they are a necessary burdens, regulations that must be implemented in order to protect purchasers from predatory lending or ingesting toxic materials. The more negative view is that they often create sub-optimal results. In the case of predatory lending, lenders will argue that loans to higher risk borrowers require higher rates of return, and these high risk borrowers are better off being able to borrow money at higher interest rates than not being able to receive loans at all.

In any case, few see consumer protections as a direct benefit to economic growth, and I'm not sure that's right. When people are spending more money on things like bank and credit card fees and interest rates, it obviously impacts their disposable income. This means they have less money to spend on restaurants, clothes, food, and other direct services. The question then becomes whether the economy generates more wealth through banks taking their fees and returns and reinvesting it into the economy in the form of loans, or letting consumers keep that money and letting them buy stuff.

This can also be applied to consumer protection in terms of ingesting toxic products, where the economic benefits are even more clear cut. Instead of having to waste money on medical treatments, which have the side effects of raising insurance rates, burdening government subsidized healthcare programs, eating into a company's employee healthcare expenditures, (not to mention legal and and reputation costs) that money could almost certainly be put to more productive use on practically anything else.

Consumer protection has traditionally been advocated on moral and philosophical grounds, but I believe there's a economic benefit as well.

Let's All Give into Nihlism, the Pretzelwaggon Way, Or, What the Fuck is the Point of Anything?

2011-08-11T21:12:00.004-04:00

Current deteriorating conditions lead me to believe that the United States will only face more and more unemployment as time goes on, until we violently enter a Utopian paradise where there is no employment at all.

Here's my thinking:

Because of technological progress, we simply don't have enough jobs to support the population anymore. The idea that we are undereducated is a myth. Even PhDs find have a hard time finding work these days, and often they are considered overqualified. We are entering an age when one relatively advanced computer/robot/the Internet can more cheaply and efficiently do the work of several human beings. Even in a low wage country like China, it has become more economically feasible to have a million robots assemble ipads rather than hire fragile, suicidal, humon workers to do it. Obviously every time a robot does the work of a human being, it puts a lot of human beings out of work. When the recession happened, millions were laid off. Amazon creates huge efficiencies over big box stores, but driving companies like Borders out of business creates huge job losses. Job losses that I don't really believe companies like Amazon will ever be able to replace through their own relatively human capital unintensive growth.

In my mind recovery will look like this: corporations, having cut human workers in the recession, will never bother to rehire even if the economy gets better. Definitely they will not hire at their old levels. What they can have a machine do, they will. This efficiency will create record profits, which everyone who is deemed irreplaceable by a machine gets to partake in. Everyone else is out of work. This will keep happening until a corporation is comprised of one CEO pocketing all the profits, supervising millions of machines. I am skipping the demand side of this equation a little (who's the corporation going to sell to if everyone is out of work? My guess is that all corporations will eventually just make luxury goods for CEOs, which only CEOs will be able to afford.)

My point is that is seems that the catch-all phrase "efficiency" is not doing what it used to do in the old days, which is to create wealth all around. Efficiency continues to seem to create massive wealth, which is only captured by the people at the top. That leads me to ask "what the fuck is the point of all this anymore?" Why do we have this capitalist intense/welfare poor economic system when it doesn't seem to serve most Americans anymore? We have a per capita GDP of about 45,000. Obviously this means that most people make significantly lower than this, and the a few make billions and billions, which fucks up the whole curve. Is it going to kill us to distribute this in a way so that the range is more narrow towards the $45,000, without such extreme end points?

Is there a time when Americans will wake up and realize all that all these libertarian beliefs that get more en vogue every year are completely self serving to a very small number of people and will keep most of America poor and struggling and a few rich?

Imperfect Information in Politics

2011-01-14T07:30:00.007-05:00

I want to explore the role of excessive rhetoric in society. For the record, I do not believe that the shooting in Tuscon had anything to do with political rhetoric, which is in line with what the majority of the American population believes. I cannot say that inflamed rhetoric that invokes violent imagery will never lead to violence, but I not overly concerned by it. Our country is strong enough to absorb or prevent random acts of individual violence, and even coordinated attacks by groups. I am not concerned over the idea that excessive rhetoric makes us less civil to one another, though like violence, that may be a problem. I am much more concerned that, as Palin suggested, people are "taking up arms" by going to the ballot box, and making very important decisions based on this rhetoric.

In markets, correct information is valuable. Market inefficiencies come from people having "imperfect information." Making decisions based on that imperfect information, for example, by investing in Enron in 2001 based on the assumption that it was earning $101 billion in revenues, or mortgage backed securities based on the assumption that they less risky than they actually were, could lead to huge financial loss for the decision maker, not to mention the entire market if millions of people are using this false information. Of course imperfect information is inevitable, but people who want to make good decisions for themselves have to learn to as much correct information as they can.

The political system acts the same way. People voting for politicians who make false claims that their government has become socialist, or that health care reform is going to kill their grandmothers, will lead to policy based on imperfect information, and this will lead to huge problems that will affect our country much more than isolated shootings or lack of civility. Democracy does not work without an informed citizenry, and the problem with the excessive rhetoric I've seen and read about is that it misinforms the public, and they are vulnerable to making very poor decisions.

I do not want liberals to be bogged down having to explain how excessive rhetoric led to Tuscon, or that it makes the country less civil. I want it to be denounced based on the idea that it is much more harmful to our political system and our country than any random shooting.

Palin and Giffords

2011-01-10T17:32:00.005-05:00

Sarah Palin does not have any direct culpability for the shooting, as far as we can tell. But her rhetoric has always been over the top, tasteless, and irresponsible from the beginning. That should have been obvious way before people were shot. And it looks bad on her, the same way it looks bad when you tell someone to get cancer, and later they find a tumor. You may not have given them cancer, but you are still a huge asshole. If you don't want people to attack you about being an asshole, then don't be one in the first place. A lot of politicians get by without invoking images of violence against their political rivals.

Of course, she is now trying to spin it so they weren't target signs on that campaign poster, but "surveying symbols." But clearly violence was part of her rhetoric. And if you want to use that kind of rhetoric, you should be prepared for the consequences when it goes bad. Unlike her "don't retreat, reload," tweet though, which was written in response to people who were telling her to cool it with the gun imagery, she's clearly retreating, and that galls me. If she were true to her image, she wouldn't be trying to pretend they weren't bulleyes or targets or what have you, she'd be doubling down and admitting it proudly.

There are two things she could have done that I couldn't blame her for. One, she could have said that her violent imagery had nothing to do with a mentally ill person going on a homicidal rampage. Or two, she could have said that, whether it lead to the massacre or not (though obviously she will never admit it did) she was incredibly insensitive during the campaign. But she did neither of these things. She's trying to whitewash over the fact that she even invoked violence in the first place. Doesn't that imply that if she did invoke violence, then she should be on the hook for the massacre? In any case, she's just shown that once again, all her bluster is just that, because instead of reloading, she's retreating as fast as she possibly can. Also, she can kiss any chance she once entertained of running for the presidency goodbye.

Tragedy of the Commons in Fast Food Eating

2010-11-06T18:42:00.001-04:00

San Francisco recently banned selling toys with meals at restaurants unless these meals met a minimum standard of nutrition. Essentially, they've banned Happy Meals. There are many valid reasons that this law may be a bad idea, along with reasons it may be a good idea. However, one argument that detractors make is flawed.

The argument is that individuals making choices such as diet, whether they are good for them or otherwise, are not hurting anyone else. In reality, however, many others will be involuntarily affected by an individual's choice.

If a person eats unhealthily, it will increase her risk of various obesity related diseases. If the person has private insurance, the costs of her medical treatments will be assessed on her insurance pool. Everyone in the pool will have to bear some of her burden through higher insurance premiums. If she has Medicare, her treatment will create a greater tax burden on taxpayers (contributing to the budget deficit). People's bad eating choices are theirs to make, but it's incorrect to say that they don't affect others.

In Retrospect, America Should Not Have Given Up on Manufacturing

2010-09-25T21:53:00.001-04:00

When I was younger and more naive, I always assumed that America was over manufacturing. In the same way that America's agrarian past gave way to industrialization and manufacturing, I expected that manufacturing would be a bone thrown to developing countries, while America makes the real money in services (Of course, America still is a major exporter or both agricultural and manufactured goods, but in employment, the service sector dominates.)

Germany's recent recovery has been the envy of all the other developed countries. While America's economy is stuck in recovery that is so slow that it is barely perceptible, Germany recently posted very favorable gains. There are, of course, many reasons that the German economy is (at least for now) faring much better than America's. One aspect that some economists have pointed out is that laying off workers is harder in Germany, and they prefer reducing worker hours over firing. The cost of simply ramping up worker hours when the economy improves may be less costly than firing and rehiring. At the same time, keeping employees employed will still give them paychecks to spend and slow the drop of consumer spending.

However, I believe a key aspect in Germany's fast recovery (which is aided hugely by exports) is its governments active desire to keep its manufacturing sector alive. While 20 percent of the US workforce is involved in manufacturing (a figure that continues to decline) German manufacturing employees a stable 30 percent of its workforce. These workers are generally involved in high-tech, value added manufacturing that the developing countries do not have the technical expertise to compete with, and bring home decent paychecks.

The service industry has no decent jobs for American workers who do not have higher education. Either a service worker is employed in a low wage job like McDonald's, or a better job that at least requires an undergraduate degree. But, there are still large portions of the America population who lack the necessary education to get a higher level service job, and cannot sustain a family on lower end service jobs. Manufacturing used to absorb these workers and pay them decent middle class wages. These jobs are increasingly rare.

I see two possible solutions to this problem:

First, the government could take a more active approach to retaining good manufacturing jobs.

Second, the government could overhaul our education system so that it takes its rightful place as the best amongst the OECD countries, instead of one of the worst. That would make more Americans actually qualified for the middle and high wage service sectors that would make up giving up our steel, automobile, and shipbuilding industries to Asia.

I hope to discuss the fascinating topic of Education Reform in a future blog.

Farm Subsidies: A Bad Idea All Around

2010-08-16T11:56:00.004-04:00

I have what may be called a irrational hatred for farm subsidies. Though their actual impact may be a small part of the entire economy, they strike me as something that are so ill conceived, with so little actual benefit to anyone, that its incredible to me that there's any support for them at all, let alone the kind of widespread support it enjoys from Congress.

1. It's a tax. Why are people are are normally very anti-deficit not supporting a tax cut that will save us 100 billion dollars a year? That would be a nice chunk towards deficit reduction. Supporters of the subsidies sometimes argue that the cost of food would increase, but that would be offset by having to pay less taxes for most of us. The biggest victims of this would be the poorest Americans, who do make enough of an income to pay taxes, but would still have to deal with increases in food prices. However, we could still set aside some of the extra tax revenue to more directly aid low income families with food purchases, and there would still be greater economic efficiency in the marketplace.

2. It's regressive taxation. The way the subsidies are set up actually help the wealthiest farm owners (many of them corporations) much more than the poorer ones who actually could use the help. At the very least, the delivery of subsidizes should be changed go towards small and independent farmers more.

3. They are corporate subsidies. Most of our tax subsidies do not go to Old McDonald. They go to multinational, highly profitable agribusinesses like ADM and Dupont who would still be highly profitable without the tax break coming from taxpayer's wallets, and would become more efficient through better market competition.

4. It's unhealthy for our diets. The particular foods we subsidize are mainly grains, fats and oils, and meat (by feeding animals subsidized grain)with almost none towards fruits or vegetables. This is why a cheeseburger often costs less than a salad, despite all the value added processing the cheeseburger undergoes. This especially hurts the poorest Americans, since they must be more conscious about the cost of food, and often must choose highly unhealthy, artificially cheaper processed food over more expensive healthier alternatives.

5. It hurts our relationship with the developing world. Only a tiny fraction of our workforce is engaged in agriculture, as opposed to manufacturing and services. On the other hand, in most developing countries, agriculture by far is the main source of employment. But because our exports of grains such as corn and soybeans are artificially low, we out-compete countries that have much lower labor costs than the US. This leads to huge problems in other countries' still developing economies, and weakens their vitally important agricultural infrastructure. Furthermore, it degrades our ability to export our more important manufactured goods and services, since developing countries do not want to lower their goods and services tariffs and trade barriers as long as we continue to export artificially cheap agricultural goods. The farm subsidies were originally created to ensure our own food security. They were never intended to hurt countries' security.

To me, farm subsidy elimination seems like a non-partisan issue that would fit the ideology of both conservatives and progressives. It is a shame that there is so much bipartisan support for their continuation in the House and Senate Agricultural committees.

A Bill I Can Get Behind

2010-07-27T10:02:00.002-04:00

By Mr. HIMES (for himself, Mr. PETERS, and Mr. WELCH):

H.R. 5779. A bill to reduce deficits and government spending through the elimination of wasteful agriculture subsidies and programs; to the Committee on Agriculture.

No more Bread and Circus

2010-07-14T10:33:00.001-04:00

Governments should save during good times while everyone else is spending, so that they can spend in bad times, when everyone else is saving. We have done the exact opposite. During the relatively good years of the early and middle Bush administration, government, abetted by a Republican congress, spent like a drunken sailors and created record deficits. Going two years into a severe recession, they've decided to suddenly close the purse strings just when we need them open the most.

There are four general ways to grow an economy, which is how we measure GDP; Investment, Consumption, Government Spending, and Exports. During recessions, businesses are too scared to invest, consumers are too scared to consume, and the US is importing much more than it exports, and will for some time. The only option we really have to make up for all the declines in these other areas is to increase government spending, not indiscriminately, but, for example, to help the unemployed weather this recession.

1.4 million US workers have been unemployed for at least 99 weeks, and that number is rising. These people have reached the limit of emergency unemployment insurance benefits, and it will be harder and harder for congress, with a united Republican opposition, to extend them. The Democrats are not blameless for the current situation. The bottom line though, is that there is a very large likelihood of 2 million Americans suddenly losing their last lifeline.

To a lot of Republicans, this is a great thing. They believe the only thing stopping them from going out and getting jobs is their laziness, and their dependence on overly generous government aid.

The fact is, there simply are not enough jobs for the amount of unemployed in this country.

I wonder what would happen if Republican opposition worked, and 2 million people simultaneously lost their unemployment insurance. Hearing Republicans call them lazy, combined with a being forced to have lot of free time on their hands, how large a group would that be compared to the tea party movement?

Mad Men Season 4

2010-07-07T23:46:00.003-04:00

I am looking forward to the next season but I'm getting more and more confused about how its supposed to tie in as the prequel to That 70s Show.

Soda Tax, more like Soda Tax Cut

2010-07-07T22:32:00.006-04:00

There have been new talks on the blogospheres about the idea of a soda tax. The idea is that an increase in the cost of soda brought on by a tax would make people adverse to buying soda, and would help people make more conscientious health decisions. The debate currently focuses on issues such as how effective the tax would be and whether the government should be involved in making these kinds of choices. I think there needs to more focus on an issue that's left completely undiscussed in the current debate: farm subsidies (something I will probably discuss about all too often in the future).

Soda is already taxed in this country, in the form of a subsidy. Money is taken from taxpayers by the government and given to extremely profitable agricultural companies that produce corn, which is processed into high fructose corn syrup, which is then used to sweeten sodas. The true cost of soda would be its market price, plus what a person pays in taxes to support farm subsidies. A soda tax would actually be a form of double taxation, with the corn producer getting all the breaks and consumer getting all the burdens.

The best way to resolve the problem is the eliminate the corn subsidy altogether. The price of soda would naturally increase relative to other goods to better reflect its real cost. The consumer would have a smaller tax burden. The producer would have to be more competitive and innovative. There would also be more competitiveness of healthier, once more expensive, alternatives. At the very least, it would make resubstituting cane sugar for corn syrup relatively cheaper.

So when people oppose the soda tax in favor of the status quo, they are in favor of a form of government intervention that hurts consumer's wallets as well as their waistlines.

Recitations of the Declaration of Independence should stop after preamble

2010-07-02T15:55:00.002-04:00

On the radio today they decided read the entire Declaration. They got to the parts about the complaints against King George. I was like, "Yeah, screw you for not letting us make our own laws! And impressing sailors!"

Then it got to this part:

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

The Liberal Case for the Founding Fathers

2010-07-01T11:02:00.002-04:00

Here’s a list of attributes for a certain group of people:

• An obsession with all things French.
• A willingness to promote a man drummed out of a foreign military due to accusations of being gay to the rank of major general and chief of staff to the commander in chief.
• A disdain for authority, which they complained about allthe time, until the Man periodically came in and broke it up.
• A love of rationality and science.
• A belief that Higher Powers left man to his own devices.
• A fear of the degeneracy brought along by mob mentality and populism
• A willingness to make sure that the enemy combatants were treated fairly in the courts.
• Most important of all, a willingness to question traditional institutions, customs, values, and morals.

No, I’m not describing a bunch of Ivy League humanities professors. I’m talking the founding fathers! There have been increasing number far right conservatives (particularly from the tea party movement) invoking the founding fathers to advance their agendas. By contrast, liberals very rarely try to frame their agenda as something that the founding fathers would have approved, for various reasons. But if liberals aren’t the more natural heirs of the founding fathers, they can at least claim them as their own with as much right as conservatives.

By the simplest, most basic definitions, a conservative is someone who wants to retain the status quo and tradition. A liberal is someone who is tolerant or accepting of change. What was the status quo in the eighteenth century? First, it was then accepted that God willed monarchs to rule over other men by Divine Right. Second, the status quo was that the original colonies were subjects of the British Crown.

What were the liberal theories at the time? One was that all men had rights. Whether these rights were bestowed by God, or inherent through the Laws of Nature, they were inalienable. The founding fathers believed this. They were self described liberals. They rebelled against the status quo. They wanted radical change (they believed in).

Is it really safe to assume that the founding fathers, a group of intellectuals who embraced the most prominent intellectual and scientific theories of their day, wouldn’t adapt to new social theories and scientific laws that didn’t exist in their time, such as evolution and Keynesian economics?

Libertarians like to claim that if the founding fathers were alive today they would be libertarians. First, even the current libertarian views differ from what the founding fathers believed in their time. For example, the idea of a corporation having the same rights as human beings would probably seem perverse to them. More importantly, libertarians are actually traditionalists to the extreme, worshiping a group of people who were in their prime over two hundred and thirty years ago. This does not strike me as something the founding fathers would do.

Having said all this, should liberals do more to invoke the founding fathers in their arguments? I actually think the answer is no. Another major difference between liberals and conservatives is that liberals cannot overlook the flaws of the founding fathers. For instance, they did not resolve the issues of America’s original sin. It took another century and great bloodshed before the institution of slavery was abolished.

Second, the founding fathers were not prophets or oracles. There are issues we face today that are radically different from what they had to deal with, and trying to guess what they would do in our place is an exercise in futility. We would risk incorrectly projecting our own beliefs onto them. And we still would not produce the desired results even if knew exactly what they would do and followed it to the letter.

On the other hand, there needs to be a push back to these ridiculous and inaccurate invocations of the founding fathers from conservatives.