I spent the last three days visiting and inspecting a few of my "places" in Georgia. I flew and had to suffer Hartsfield International Airport, a sprawling monstrosity of endless walking and intra-terminal trains. The flight from Boston took about 2.5 hours, but it took me 45 minutes to get out of the airport. That's paramount structural inefficiency. Sandwich prices in the airport are stunning - I paid over $10 for a very sub-par sandwich and coke worth only $5. Security with their million dollar scanners still rely on hand pat-downs. One bright side - the people were quite efficient and friendly.
Driving around Atlanta brought to my mind one vision: America's structural dependence on the gasoline engine is stunning. Atlanta is quintessential urban sprawl. Nothing is designed for walking as a backup. Even when one drives to be close to one's destination, there is almost no way to safely walk to stores nearby. Why? The decline and disregard for simple practices of local connectivity that an old town center - aka Main Street - had. City rules require parking - yup, parking for every store. And stores jealously guard their parking, threatening towing if customers of other stores park on their lot.
Atlanta has some buses and some kind of local train (MARTA). But it's completely inadequate; it has to be - the structure of the urban layout does not work for alternative transportation.
Obviously the Ruling Classes fail here again. The US has no rational energy policy and no long term transportation policy.
Why does much of Europe do much better on these matters? Unemployment in Germany drops to a multiyear low this week. Germany is heavily unionized. Its workers - and people - have excellent benefits. Obviously we could learn something from the Germans.
One difference: pay at the top in Germany is held down by taxes and social pressure and pressure from true outside representation on their Supervisory Boards.
Germany doesn't seem to give financial Vikings a free rein to raid and loot companies, either.
The US Ruling Classes have the wrong culture and values to lead America to a new era of greatness. The professional and technocrat classes ruling from DC - aka hogs - simply want to get snouts in the trough while there is food remaining. Their attitude fits a memorable line from that great movie, "Hud", made by the lead character, Hud, a man with no principles: "Let's stick our biscuit in that gravy while it's still hot."
That's the motto of the DC Ruling Classes.
This coming Tuesday, the voters need to pull that gravy bowl away and send the Ruling Class - all of them - back to the countryside for some honest labor.
Word of the Day
"Rambunctious" - adjective [$10] N. American colloq., 19th century origin unknown.
Rambunctious means 1. uncontrollably exuberant; 2. unruly.
Sentence: My new puppy, Lucky Star, is rambunctious to the max!
Friday, October 29, 2010
Monday, October 25, 2010
Traveling
I am traveling to Georgia until Friday to inspect a few of my "places", hence the next post wil be Friday.
Fraternal Libertarianism Must Rule!!!
Fraternal Libertarianism Must Rule!!!
Monday Morning Ramblings
I wonder if executive pay will cut at those banks that have been caught making fundamental management errors. Many banks are paid very large sums every year to service mortgage loans. Yet they have been exposed to have lied and filed false statements in foreclosures. Their internal management systems have been geared to cost cutting and minimal "service", contrary to their legal obligations. Some bank management has lied about its procedures when first asked [e. g. Bank of America].
When management fails in its duties, its pay should be cut. Or they should be fired. Obviously high level management is at fault - trying to wring out excessive profits, they have caused the organization to fail in its duties. Top management at all those banks should see serious cuts in bonuses; perhaps even pay cuts. Running the company properly is their jobs. When they fail, why give them a bonus at all?
Social Revolution
I wonder if worldwide social revolution will get a spark? Certainly the pile of tinder, kindling and dry fuel grows daily. The ruling classes of the rich and powerful and their overpaid, cossetted public employee bureaucracies seem to be getting serious pushback as they try to impose the costs of financial and governmental restructuring on the common man & woman. This is not simply a US issue.
Billionaires the worldwide are using looted wealth to obtain more power and status. Here's a quote from a column in the weekend FT: "On the opening day of Frieze [the Pavilion of Art and Design covering Berkeley Square in London], when I could only spare an hour to scout, I spotted a couple of Russian oligarchs, three North American billionaires, Tom Ford, a sprinkling of other celebrities and a lot of runners, all circling the big-hitters. The money is guarded fiercely by a wall of advisers-as-human-shields, while the amount of hot air that ricochets around the art scene is staggering. It is everything to do with names and status and nothing to do with love of art, or so it seems. There’s a palpable desire to acquire the latest wunderkinder – although how these wunderkinder are determined is a curious process and seems to have little to do with artistic merit. I wonder whether the oligarchs even care where the “wunders” will be next year? There’s so much money swilling about that while the “clever art” (that which doubles in value) may remain on the wall, the majority can be consigned to a Moscow basement. The increasing global disparity of wealth is disconcerting to witness."
Aristotle and Pericles would spit.
And people wonder why I am well-prepared to civil strife and armageddon.
Word of the Day
"Despond" - verb, intransitive [$10] archaic alt.: dispond [$1000]
Despond means to become discouraged.
Sentence: The middle class private sector desponds under their grossly unfair treatment by the ruling classes and their bureacracies. Without a loyal middle class, modern society can collapse. How far can they be pushed?
When management fails in its duties, its pay should be cut. Or they should be fired. Obviously high level management is at fault - trying to wring out excessive profits, they have caused the organization to fail in its duties. Top management at all those banks should see serious cuts in bonuses; perhaps even pay cuts. Running the company properly is their jobs. When they fail, why give them a bonus at all?
Social Revolution
I wonder if worldwide social revolution will get a spark? Certainly the pile of tinder, kindling and dry fuel grows daily. The ruling classes of the rich and powerful and their overpaid, cossetted public employee bureaucracies seem to be getting serious pushback as they try to impose the costs of financial and governmental restructuring on the common man & woman. This is not simply a US issue.
Billionaires the worldwide are using looted wealth to obtain more power and status. Here's a quote from a column in the weekend FT: "On the opening day of Frieze [the Pavilion of Art and Design covering Berkeley Square in London], when I could only spare an hour to scout, I spotted a couple of Russian oligarchs, three North American billionaires, Tom Ford, a sprinkling of other celebrities and a lot of runners, all circling the big-hitters. The money is guarded fiercely by a wall of advisers-as-human-shields, while the amount of hot air that ricochets around the art scene is staggering. It is everything to do with names and status and nothing to do with love of art, or so it seems. There’s a palpable desire to acquire the latest wunderkinder – although how these wunderkinder are determined is a curious process and seems to have little to do with artistic merit. I wonder whether the oligarchs even care where the “wunders” will be next year? There’s so much money swilling about that while the “clever art” (that which doubles in value) may remain on the wall, the majority can be consigned to a Moscow basement. The increasing global disparity of wealth is disconcerting to witness."
Aristotle and Pericles would spit.
And people wonder why I am well-prepared to civil strife and armageddon.
Word of the Day
"Despond" - verb, intransitive [$10] archaic alt.: dispond [$1000]
Despond means to become discouraged.
Sentence: The middle class private sector desponds under their grossly unfair treatment by the ruling classes and their bureacracies. Without a loyal middle class, modern society can collapse. How far can they be pushed?
Friday, October 22, 2010
TGIF ... and a some thoughts
Attention Billionaires!
Shut up!
Sure, you're rich. And some of you made that money by building up a company. Or by running a hedge fund. Or by investing.
But that does NOT make you either an expert or even knowledgeable about anything beyond your own personal experience and work. You open your mouths with ga-ga eyes to the press, loving their adoration and attention, and bloviate about all sorts of subjects. Barry calls you and asks for advice, as he did Steve Jobs yesterday. He acts like he listens. The press glow - after all, you give them cachet.
But in reality you know zippo, zero, nothing about almost everything you blather about. A first line manager knows more. A ground level worker knows more. A sole proprietor knows more. You've been cossetted for years by a cadre of aides doing your bidding. Do you even write your own checks? Fill out your tax return? Take you car to be serviced? Know a friend having a run of bad luck? Personally know anyone who has suffered in this recession (caused by the Street and hedge funds)?
Nope.
You know nothing. And you make that obvious with your advice that you proffer too readily.
Socrates said, paraphrasing, that if you don't know what you don't know, you are ignorant.
Someone else said, it's better to be quiet than open your mouth and let people know you're a fool.
Billionaires: Shut Up!
We don't care about you're stupid, foolish ideas or beliefs. Go do something and help the poor directly, or hire some people for useful work, or send some kids to college without huge loan debts. Act, don't talk.
Word of the Day
"Disyllable" - noun [$10] also 'dissyllable', Prosody
Disyllable means a word or metrical foot of two syllables.
Sentence: "Shut Up" is a written and spoken disyllable, being written as two one-syllable words, spoken for emphasis with word distinction as "Shut ... up!", or shot out with force as the two syllable utterance - "shuddup"! In all three usages, it applies to all billionaires all the time.
Shut up!
Sure, you're rich. And some of you made that money by building up a company. Or by running a hedge fund. Or by investing.
But that does NOT make you either an expert or even knowledgeable about anything beyond your own personal experience and work. You open your mouths with ga-ga eyes to the press, loving their adoration and attention, and bloviate about all sorts of subjects. Barry calls you and asks for advice, as he did Steve Jobs yesterday. He acts like he listens. The press glow - after all, you give them cachet.
But in reality you know zippo, zero, nothing about almost everything you blather about. A first line manager knows more. A ground level worker knows more. A sole proprietor knows more. You've been cossetted for years by a cadre of aides doing your bidding. Do you even write your own checks? Fill out your tax return? Take you car to be serviced? Know a friend having a run of bad luck? Personally know anyone who has suffered in this recession (caused by the Street and hedge funds)?
Nope.
You know nothing. And you make that obvious with your advice that you proffer too readily.
Socrates said, paraphrasing, that if you don't know what you don't know, you are ignorant.
Someone else said, it's better to be quiet than open your mouth and let people know you're a fool.
Billionaires: Shut Up!
We don't care about you're stupid, foolish ideas or beliefs. Go do something and help the poor directly, or hire some people for useful work, or send some kids to college without huge loan debts. Act, don't talk.
Word of the Day
"Disyllable" - noun [$10] also 'dissyllable', Prosody
Disyllable means a word or metrical foot of two syllables.
Sentence: "Shut Up" is a written and spoken disyllable, being written as two one-syllable words, spoken for emphasis with word distinction as "Shut ... up!", or shot out with force as the two syllable utterance - "shuddup"! In all three usages, it applies to all billionaires all the time.
Thursday, October 21, 2010
Make Them Pay
The most ridiculous idea I've seen recently is the one floating around to give the corporations a tax holiday on their accumulated overseas earnings. Here's the main facts: A company creates an overseas subsidiary to do business in other countries. It makes money and pays taxes wherever it operates, such as in Europe or Asia. The company also takes an accounting charge to US earnings for the taxes due to the US, but the actual payment is deferred until the cash is brought back to the US. The company receives a credit on its US taxes for the foreign taxes paid on that income - thus NO double taxation.
Now they want to get out of this tax liability - one already booked and owed. The overseas countries got their taxes, but the US - the home country which provides them existence - would not. That is utterly ridiculous.
Example: Cisco Systems with its CEO, John ("JohnBoy") Chambers. He co-authored an op-ed in the WSJ yesterday asking for this tax break. His co-author was president of Oracle. Both of them make millions of $ a year, but want more.
"One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.
"But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here."
This article and the entire argument is first class sophistry. The companies have ALREADY booked the taxes they OWE to the US. There is no "penalty" - the tax is owed.
In the first place, the only money the company cannot reinvest is the money they OWE to the US government. The rest of the money - up to 65% - can be reinvested. Second, they already OWE that money and have reported that liability to their shareholders. Third, nothing makes them actually invest that money - they can use it for executive salaries or dividends or whatever. Claiming this is a job issue is a total LIE. US interest rates are extremely low. The companies can easily finance new investment for jobs with long term bonds. They are simply lying when they say this tax break is needed.
All JohnBoy and his clique want is another free ride to get more executive pay via stock options and other massive pay packages.
Here's a better idea: tax the entire worldwide earnings NOW. Let's collect this long overdue debt. Close this overseas earnings loophole forever.
Use the money to pay down US debt.
Word of the Day
"Coxcomb" - noun [$10]
Coxcomb means an ostentatiously conceited man, a dandy.
Sentence: Corporate coxcombs seem to think the world revolves around them, that they are Dukes or Princes. It's time to bring them down to learn about the common man & woman. Make them pay.
Now they want to get out of this tax liability - one already booked and owed. The overseas countries got their taxes, but the US - the home country which provides them existence - would not. That is utterly ridiculous.
Example: Cisco Systems with its CEO, John ("JohnBoy") Chambers. He co-authored an op-ed in the WSJ yesterday asking for this tax break. His co-author was president of Oracle. Both of them make millions of $ a year, but want more.
"One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations—and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more.
"But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world—except here."
This article and the entire argument is first class sophistry. The companies have ALREADY booked the taxes they OWE to the US. There is no "penalty" - the tax is owed.
In the first place, the only money the company cannot reinvest is the money they OWE to the US government. The rest of the money - up to 65% - can be reinvested. Second, they already OWE that money and have reported that liability to their shareholders. Third, nothing makes them actually invest that money - they can use it for executive salaries or dividends or whatever. Claiming this is a job issue is a total LIE. US interest rates are extremely low. The companies can easily finance new investment for jobs with long term bonds. They are simply lying when they say this tax break is needed.
All JohnBoy and his clique want is another free ride to get more executive pay via stock options and other massive pay packages.
Here's a better idea: tax the entire worldwide earnings NOW. Let's collect this long overdue debt. Close this overseas earnings loophole forever.
Use the money to pay down US debt.
Word of the Day
"Coxcomb" - noun [$10]
Coxcomb means an ostentatiously conceited man, a dandy.
Sentence: Corporate coxcombs seem to think the world revolves around them, that they are Dukes or Princes. It's time to bring them down to learn about the common man & woman. Make them pay.
Wednesday, October 20, 2010
Flaws of Pure Libertarianism. III.
Libertarians and the Right love to point out the historical failures of Socialism. And they are correct in doing so. Socialism and its pure form, Communism [aka Marxism], are connected to many of the worst genocides and crimes of the 20th century. The analysis of Friedrich Hayek showed that this was a great risk of those ideologies: the ruthless take over and ... do ruthless acts. But should we blame the ideology for the acts of its corruptors?
Marxist apologists say no, the system was never tried properly and people like Stalin, Hitler, Mussolini and Mao were independent evil leaders. They say the ideology is not responsible.
What is an ideology? Alvin Gouldner in his masterly work, The Dialectic of Ideology and Technology [a very hard read - I'm about 1/3 way thru], shows that ideologies arose from the ashes of the old regimes as respect for traditions of religion and aristocracy collapsed. Assessing "ideology" from a sociological perspective, he shows that an ideology is a rational system that connects the ideas to the world and gives people a basis for collective action. An ideology is a social glue to help them stick together to "change the world".
Without the ideology, the collective action cannot occur; the movement will quickly collapse as its participants squabble over details. The worldview of the ideology is crucial. Seen this way, there is no other conclusion but that the ideology of Marxism IS partly responsible for the evil crimes of its implementors. The ideology of Marxism - and Socialism in its pure form - is simply wrong and unstable. The ideology must bear this burden of guilt.
Let's look now at the common form of pure libertarianism. Where do its proponents proudly point to its successful implementation?
Chile. The Chicago School loves to say how its libertarian economics saved that nation and created its prosperity. Other nations in the southern part of South America also implemented the Chicago School's system in the decades of the 1970s and early 1980s.
Murders of thousands of persons followed. This is rather well documented. Ruthless leaders did those killings. Yet those leader groups [Pinochet, etc.] were using the libertarian ideology to help hold their followers together - they followed the Chicago School's economics. Thus the same standard and analysis that correctly condemns Marxism must also condemn libertarianism. It's a flawed ideology. Ruthless persons take over - or implement it - and do ... ruthless actions.
How can a libertarian argue with this? Friedrich Hayek would be his hero - his idol. Yet the Hayek analysis and the facts confirm that Libertarianism is unstable and can lead to great harm to people. It doesn't work, it's flawed and should be rejected as a political economic system. It should join Marxism on the dustbin of history.
Aristotle would see the beauty of this symmetry [ref.: Nichomachean Ethics]. He saw systems, concepts and values as having a continuum between two extremes, both of which were sub-optimal or bad. A middle ground was an optimum - that's where true virtue lay. In this case, that optimum is Fraternal Libertarianism, which lies midway between socialism and libertarianism.
Word of the Day
"Ferity" - noun [$1000] used in the essay, "Walking" by Thoreau.
Ferity means 1.a. the state or quality of being wild or savage, brutishness, wildness; hence ferocitt; b. Of a plant, etc.: wildness, uncultivated condition; 2. savage or barbarous condition, a form of this; 3. barbarity, barbarous or savage cruelty or inhumanity.
Sentence: Both Marxism and Libertarianism can unleash frightful ferity; the ruthless can achieve power and a free rein in both. Both ideologies are deeply flawed.
Marxist apologists say no, the system was never tried properly and people like Stalin, Hitler, Mussolini and Mao were independent evil leaders. They say the ideology is not responsible.
What is an ideology? Alvin Gouldner in his masterly work, The Dialectic of Ideology and Technology [a very hard read - I'm about 1/3 way thru], shows that ideologies arose from the ashes of the old regimes as respect for traditions of religion and aristocracy collapsed. Assessing "ideology" from a sociological perspective, he shows that an ideology is a rational system that connects the ideas to the world and gives people a basis for collective action. An ideology is a social glue to help them stick together to "change the world".
Without the ideology, the collective action cannot occur; the movement will quickly collapse as its participants squabble over details. The worldview of the ideology is crucial. Seen this way, there is no other conclusion but that the ideology of Marxism IS partly responsible for the evil crimes of its implementors. The ideology of Marxism - and Socialism in its pure form - is simply wrong and unstable. The ideology must bear this burden of guilt.
Let's look now at the common form of pure libertarianism. Where do its proponents proudly point to its successful implementation?
Chile. The Chicago School loves to say how its libertarian economics saved that nation and created its prosperity. Other nations in the southern part of South America also implemented the Chicago School's system in the decades of the 1970s and early 1980s.
Murders of thousands of persons followed. This is rather well documented. Ruthless leaders did those killings. Yet those leader groups [Pinochet, etc.] were using the libertarian ideology to help hold their followers together - they followed the Chicago School's economics. Thus the same standard and analysis that correctly condemns Marxism must also condemn libertarianism. It's a flawed ideology. Ruthless persons take over - or implement it - and do ... ruthless actions.
How can a libertarian argue with this? Friedrich Hayek would be his hero - his idol. Yet the Hayek analysis and the facts confirm that Libertarianism is unstable and can lead to great harm to people. It doesn't work, it's flawed and should be rejected as a political economic system. It should join Marxism on the dustbin of history.
Aristotle would see the beauty of this symmetry [ref.: Nichomachean Ethics]. He saw systems, concepts and values as having a continuum between two extremes, both of which were sub-optimal or bad. A middle ground was an optimum - that's where true virtue lay. In this case, that optimum is Fraternal Libertarianism, which lies midway between socialism and libertarianism.
Word of the Day
"Ferity" - noun [$1000] used in the essay, "Walking" by Thoreau.
Ferity means 1.a. the state or quality of being wild or savage, brutishness, wildness; hence ferocitt; b. Of a plant, etc.: wildness, uncultivated condition; 2. savage or barbarous condition, a form of this; 3. barbarity, barbarous or savage cruelty or inhumanity.
Sentence: Both Marxism and Libertarianism can unleash frightful ferity; the ruthless can achieve power and a free rein in both. Both ideologies are deeply flawed.
Tuesday, October 19, 2010
Flaws of Pure Libertarianism. II.
A crucial test of any theory is whether it is stable under small perturbations - changes. A stable theory will have forces that cause the system to return to equilibrium after being perturbed. An unstable theory will blow up.
Is pure libertarianism stable as a theory of the economy of a closed system? Let's analyze it.
What would cause a perturbation? This is easy - there are two sources. First, the world contains a population with a broad distribution over many, many dimensions: skills, strength, knowledge, geography, etc. second, there is luck. The luck of unknowingly happening to grow up onto top of a huge oil reserve, the luck of being a few days earlier in an invention and thus obtain the patent, the luck of being borne to royalty or wealth, the luck of being picked from a pool of dozens of seemingly and objectively equal applicants for a good job or school, on and on ...
Assume a person - or small group - has a economic advantage over others and implements that advantage to gain wealth: more resources, etc. That person can then use that, invest it and get more. And more. And more. And on and one infinitely. Barring bad "luck" or stupidity in investing, that person or group can accumulate such wealth as to become a force in the political sector. Then that person/group can use the governmental sector to lock in its wealth and power, eliminate competitors and protect its wealth from outsiders.
Don't say this does not or cannot happen. The examples of persons of great wealth buying seats in the US Senate are legion. [John Heinz, Rockefeller from WV, Maria Cantwell, etc.). The US Robber Barons bought entire state legislatures.
What forces exist in pure libertarianism to help prevent this - the creation of a new aristocracy and Ruling Class? The libertarian might say, "competition". Hmmm ...
Does that work?
It could ... BUT the government prevents hardball competition.
For example, an inventor creates a new product and gets a patent. A competitor could copy that idea-invention and sell it for less, but the GOVERNMENT protects the inventor-patentholder by punishing the copycat. Same for copyright protection (which protects computer software), same for natural resources. Who do you think protects that gold mine from others coming in to mine the gold? The government's police force. Government creates "property" and protects PROPERTY RIGHTS from squatters, from nonviolent thieves, from copycats, etc. Notice that none of this "competition" involves violence.
And theories of Pure Libertarianism seem to justify government only to prevent violence. [Cf. Nozick, in Anarchy, State and Utopia] But property rights and contract rights are a creation of GOVERNMENT and are protected by GOVERNMENT.
A truly Pure Libertarianism would have no governmentally protected property rights; such a system would have forces to prevent a new aristocracy - true, pure competition by substitution, copying or simple squatting & nonviolence takings. After all, unless you yourself protect something, it's not yours in a Pure Libertarian world, is it?
Thus we see that while truly pure - ultra, capital "P" - Pure Libertarianism does have forces to make that system stable, the type of small "p", "pure libertarianism" contemplated by almost all economic theorists (including the vaunted Chicago School) requires a powerful government to create and protect property. And enforce contracts. This government nullifies the forces of competition that would make such a system stable. The common system of pure libertarianism is unstable and in a self-contradictory manner uses governmental power to create fertile grounds for powerful, wealthy Ruling Classes and new aristocracies.
QED.
19th century America is an obvious example. Russia in the 1990s is another. And the creation of feudalism in Europe around the 9th century is another.
Notice the examples are the same as I used in yesterday's analysis of pure libertarianism under the Hayek criticism. This is no accident. Today provided a microscopic, small scale analysis; the Hayek criticism is a broad, macroscopic formulation of the same forces.
Also note that Fraternal Libertarianism does NOT fail under perturbation: the regulations of the wealthy and powerful prevent them from becoming a new Ruling Class and aristocracy with hard wall limits on their wealth and power.
Fraternal Libertarianism is stable and a viable political-economic system. Libertarianism is not.
Actions
Krypto wants me to sell some US stocks. This is a weak signal, but since the S&P 500 is nearing my target for the year end (1200), I will comply.
Word of the Day
"Soporific" - adjective & noun [$10]
Soporific means (adjective) tending to produce sleep; (noun) a soporific drug or influence.
Sentence: A Philistine or member of the Booboise might think today's post is soporific, but the rise of the Tea Parties in US political battles makes understanding the ideology of libertarianism crucially important to see how they might evolve ... or devolve.
Is pure libertarianism stable as a theory of the economy of a closed system? Let's analyze it.
What would cause a perturbation? This is easy - there are two sources. First, the world contains a population with a broad distribution over many, many dimensions: skills, strength, knowledge, geography, etc. second, there is luck. The luck of unknowingly happening to grow up onto top of a huge oil reserve, the luck of being a few days earlier in an invention and thus obtain the patent, the luck of being borne to royalty or wealth, the luck of being picked from a pool of dozens of seemingly and objectively equal applicants for a good job or school, on and on ...
Assume a person - or small group - has a economic advantage over others and implements that advantage to gain wealth: more resources, etc. That person can then use that, invest it and get more. And more. And more. And on and one infinitely. Barring bad "luck" or stupidity in investing, that person or group can accumulate such wealth as to become a force in the political sector. Then that person/group can use the governmental sector to lock in its wealth and power, eliminate competitors and protect its wealth from outsiders.
Don't say this does not or cannot happen. The examples of persons of great wealth buying seats in the US Senate are legion. [John Heinz, Rockefeller from WV, Maria Cantwell, etc.). The US Robber Barons bought entire state legislatures.
What forces exist in pure libertarianism to help prevent this - the creation of a new aristocracy and Ruling Class? The libertarian might say, "competition". Hmmm ...
Does that work?
It could ... BUT the government prevents hardball competition.
For example, an inventor creates a new product and gets a patent. A competitor could copy that idea-invention and sell it for less, but the GOVERNMENT protects the inventor-patentholder by punishing the copycat. Same for copyright protection (which protects computer software), same for natural resources. Who do you think protects that gold mine from others coming in to mine the gold? The government's police force. Government creates "property" and protects PROPERTY RIGHTS from squatters, from nonviolent thieves, from copycats, etc. Notice that none of this "competition" involves violence.
And theories of Pure Libertarianism seem to justify government only to prevent violence. [Cf. Nozick, in Anarchy, State and Utopia] But property rights and contract rights are a creation of GOVERNMENT and are protected by GOVERNMENT.
A truly Pure Libertarianism would have no governmentally protected property rights; such a system would have forces to prevent a new aristocracy - true, pure competition by substitution, copying or simple squatting & nonviolence takings. After all, unless you yourself protect something, it's not yours in a Pure Libertarian world, is it?
Thus we see that while truly pure - ultra, capital "P" - Pure Libertarianism does have forces to make that system stable, the type of small "p", "pure libertarianism" contemplated by almost all economic theorists (including the vaunted Chicago School) requires a powerful government to create and protect property. And enforce contracts. This government nullifies the forces of competition that would make such a system stable. The common system of pure libertarianism is unstable and in a self-contradictory manner uses governmental power to create fertile grounds for powerful, wealthy Ruling Classes and new aristocracies.
QED.
19th century America is an obvious example. Russia in the 1990s is another. And the creation of feudalism in Europe around the 9th century is another.
Notice the examples are the same as I used in yesterday's analysis of pure libertarianism under the Hayek criticism. This is no accident. Today provided a microscopic, small scale analysis; the Hayek criticism is a broad, macroscopic formulation of the same forces.
Also note that Fraternal Libertarianism does NOT fail under perturbation: the regulations of the wealthy and powerful prevent them from becoming a new Ruling Class and aristocracy with hard wall limits on their wealth and power.
Fraternal Libertarianism is stable and a viable political-economic system. Libertarianism is not.
Actions
Krypto wants me to sell some US stocks. This is a weak signal, but since the S&P 500 is nearing my target for the year end (1200), I will comply.
Word of the Day
"Soporific" - adjective & noun [$10]
Soporific means (adjective) tending to produce sleep; (noun) a soporific drug or influence.
Sentence: A Philistine or member of the Booboise might think today's post is soporific, but the rise of the Tea Parties in US political battles makes understanding the ideology of libertarianism crucially important to see how they might evolve ... or devolve.
Monday, October 18, 2010
Flaws of Pure Libertarianism. I.
Over the past few years I've written many times about world events that show flaws in the ideology of pure libertarianism. The recent series on the Good and Bad of Socialism and Capitalism brought out parts of this thinking, too. Recent discussions with a friend of mine and some reading produced new thinking - Bunkerman never stops thinking - that I will post in new series here this week on The Flaws of Pure Libertarianism. Note the "Pure" - nothing that I will post contradicts or impairs my recent proof and belief that the optimal political system is Fraternal Libertarianism. The coming US election and the froth in the Tea Parties, however, makes this a good time to re-examine Libertarianism at its core.
The first flaw is critical. Libertarian revere Friedrich Hayek, whose superb book, The Road to Serfdom, exposes a fundamental flaw in Socialism, which is an important ideological competitor to Libertarianism. Here's the gist: socialism concentrates economic power in the government. Ruthless, unprincipled people will gain power in the government through that ruthlessness and thence be able to control the lives of everyone. Hence leading all people down the "Road to Serfdom". Fine. It's true and has happened. Soviet Russia is the text book example.
Let's think about Libertarianism. Its unfettered economic freedom will lead to great concentrations of wealth as many local variables will give some persons advantages over others: innovation, luck, etc. Simple innovation gives much concentrated power - being first. That contains some good - innovation is rewarded. The 19th century is littered with example of inventions leading to great wealth via the sheer usefulness of that invention. That is fine. Luck also helps. Bill Gates' firm was selected by IBM to provide the operating system for its PC that set the model for almost all PCs for decades. His father had connections to IBM. His operating system sucked, but he got the order. Luck.
Wealth is Power. Massive wealth can be used to gain political and legal power, that in turn leads to more and more wealth, and to protect that wealth. A Ruling Class is formed by connections between (A) the concentrations of Wealth that naturally arise from Libertarianism and the (B) the desire for wealth by the legal and lobbying courtiers clustered around the centers of governmental power. [Remember, government does exist in Pure Libertarianism, if simply for protection from violence. Robert Nozick proved this in his great work, Anarchy, State and Utopia.]
And that Ruling Class then makes laws and rules to entrench and increase the wealth and power of the Ruling Class. Over time they enserf the common man.
QED: Pure Libertarianism leads to Serfdom for the common man. Libertarianism fails to withstand the analysis of Hayek. This is fatal to Pure Libertarianism.
Examples are the 9th century in Europe, the 19th century in America and the 1990s in Russia.
Tomorrow I will examine the stability of the Libertarian system. Will it inevitably lead to the failure outlined above?
Fraternal Libertarianism does NOT succumb to the Hayek criticism. Its inherent hard controls on the Ruling Classes prevent them from gaining sufficient power to enserf the common man.
Word of the Day
"Supernal" - adjective [$10] esp. poetic
Supernal means 1. heavenly, divine; 2. of or concerning the sky; 3. lofty (of more than earthly or human excellence, powers, etc.)
Sentence: Devotees to pure Libertarianism wax eloquently about the goodness and benefits of that ideology, ascribing it near supernal powers. But on examination, that systems has fatal flaws that Bunkerman will expose this week.
The first flaw is critical. Libertarian revere Friedrich Hayek, whose superb book, The Road to Serfdom, exposes a fundamental flaw in Socialism, which is an important ideological competitor to Libertarianism. Here's the gist: socialism concentrates economic power in the government. Ruthless, unprincipled people will gain power in the government through that ruthlessness and thence be able to control the lives of everyone. Hence leading all people down the "Road to Serfdom". Fine. It's true and has happened. Soviet Russia is the text book example.
Let's think about Libertarianism. Its unfettered economic freedom will lead to great concentrations of wealth as many local variables will give some persons advantages over others: innovation, luck, etc. Simple innovation gives much concentrated power - being first. That contains some good - innovation is rewarded. The 19th century is littered with example of inventions leading to great wealth via the sheer usefulness of that invention. That is fine. Luck also helps. Bill Gates' firm was selected by IBM to provide the operating system for its PC that set the model for almost all PCs for decades. His father had connections to IBM. His operating system sucked, but he got the order. Luck.
Wealth is Power. Massive wealth can be used to gain political and legal power, that in turn leads to more and more wealth, and to protect that wealth. A Ruling Class is formed by connections between (A) the concentrations of Wealth that naturally arise from Libertarianism and the (B) the desire for wealth by the legal and lobbying courtiers clustered around the centers of governmental power. [Remember, government does exist in Pure Libertarianism, if simply for protection from violence. Robert Nozick proved this in his great work, Anarchy, State and Utopia.]
And that Ruling Class then makes laws and rules to entrench and increase the wealth and power of the Ruling Class. Over time they enserf the common man.
QED: Pure Libertarianism leads to Serfdom for the common man. Libertarianism fails to withstand the analysis of Hayek. This is fatal to Pure Libertarianism.
Examples are the 9th century in Europe, the 19th century in America and the 1990s in Russia.
Tomorrow I will examine the stability of the Libertarian system. Will it inevitably lead to the failure outlined above?
Fraternal Libertarianism does NOT succumb to the Hayek criticism. Its inherent hard controls on the Ruling Classes prevent them from gaining sufficient power to enserf the common man.
Word of the Day
"Supernal" - adjective [$10] esp. poetic
Supernal means 1. heavenly, divine; 2. of or concerning the sky; 3. lofty (of more than earthly or human excellence, powers, etc.)
Sentence: Devotees to pure Libertarianism wax eloquently about the goodness and benefits of that ideology, ascribing it near supernal powers. But on examination, that systems has fatal flaws that Bunkerman will expose this week.
Friday, October 15, 2010
The Dollar
Let it fall.
Emerging markets in South America and Asia have been parasites on the backs of America since World War II. Those governments have also impoverished their own people by keeping their purchasing power low. These countries want the US consumer to buy their stuff and their governments don't want their people to buy our stuff.
One can see photos and TV of cities in Brazil and South Korea and China and it's rather obvious the standard of living is not far from the US. Yet travelers to those places can see costs far below costs in major US cities. Why? Those currencies are intentionally undervalued.
Now that capital flows are putting pressure on the US dollar, they whine.
I say tough &^%$. Let it fall.
I'd like to see a broad-based purchasing power parity study ["PPP"]. Nations where they keep currencies low, but a PPP study shows prices there are very low compared to the US - set an automatic tariff. The test would have a wide band - say 25% - for fluctuations; inside that band, no tariff would be set. But when one goes to China and sees prices 50% less than in the US, yet they peg the Chinese yuan at low levels, it's obvious that China using the US and US consumer as a tool for its own internal development. And US jobs are being hurt on that account.
This might seem to be a radical solution, but the entire world [and the rest of Asia which has free-floating currencies] is being hurt by China's use of its currency as a self-serving tool. The tariff would only apply to nations that peg their currency to the dollar.
The principal problem with economic theory is that it relies on static, equilibrium assumptions, and ignores the dynamics of the market. China uses the dynamics of business to drive US & other manufacturers out of business, and then capture that business themselves. An automatic tariff based on FACTS such as a thorough, regularly updated PPP model would be a rational means to prevent dynamic trade tactics that China is using to help itself at the expense of US workers.
Word of the Day
"Tergiversate" - verb, intransitive [$10]
Tergiversate means 1. be apostate, change one's party or principals; 2. equivocate, make conflicting statements; 3. turn one's back on something.
Sentence: Readers might be surprised by today's post by Bunkerman, thinking he is tergiversating on free trade, but his PPP-based tariff system is simply a modification - an improved version of free trade - as Fraternal Libertarianism is a more workable, better version of libertarianism.
Emerging markets in South America and Asia have been parasites on the backs of America since World War II. Those governments have also impoverished their own people by keeping their purchasing power low. These countries want the US consumer to buy their stuff and their governments don't want their people to buy our stuff.
One can see photos and TV of cities in Brazil and South Korea and China and it's rather obvious the standard of living is not far from the US. Yet travelers to those places can see costs far below costs in major US cities. Why? Those currencies are intentionally undervalued.
Now that capital flows are putting pressure on the US dollar, they whine.
I say tough &^%$. Let it fall.
I'd like to see a broad-based purchasing power parity study ["PPP"]. Nations where they keep currencies low, but a PPP study shows prices there are very low compared to the US - set an automatic tariff. The test would have a wide band - say 25% - for fluctuations; inside that band, no tariff would be set. But when one goes to China and sees prices 50% less than in the US, yet they peg the Chinese yuan at low levels, it's obvious that China using the US and US consumer as a tool for its own internal development. And US jobs are being hurt on that account.
This might seem to be a radical solution, but the entire world [and the rest of Asia which has free-floating currencies] is being hurt by China's use of its currency as a self-serving tool. The tariff would only apply to nations that peg their currency to the dollar.
The principal problem with economic theory is that it relies on static, equilibrium assumptions, and ignores the dynamics of the market. China uses the dynamics of business to drive US & other manufacturers out of business, and then capture that business themselves. An automatic tariff based on FACTS such as a thorough, regularly updated PPP model would be a rational means to prevent dynamic trade tactics that China is using to help itself at the expense of US workers.
Word of the Day
"Tergiversate" - verb, intransitive [$10]
Tergiversate means 1. be apostate, change one's party or principals; 2. equivocate, make conflicting statements; 3. turn one's back on something.
Sentence: Readers might be surprised by today's post by Bunkerman, thinking he is tergiversating on free trade, but his PPP-based tariff system is simply a modification - an improved version of free trade - as Fraternal Libertarianism is a more workable, better version of libertarianism.
Thursday, October 14, 2010
Survey Scams
Corporations and businesses are now using phone surveys as scams to obtain marketing material and information on consumers. Corruption is simply going too far. Businesses hire a not-for-profit firm to conduct "market research"; they use a not-for-profit because those are exempt from "Do Not Call" rules. The firm calls you and perhaps you feel that you'd like to help them out, so agree to respond.
The questions are innocent at first - perhaps they want your opinion about types of hospitals, etc., or about or health care industry. Then they want to ask personal information and "guarantee" this will be used for statistics only. They ask about income, zip code and then ask you for your street. Huh ? How could that be used for statistics. Obviously they are lying. Since you probably don't remember what their name is, you can't even complain.
Yesterday after I refused to reply the the "Street name" question, the questioner ask my street number! They simply wanted my address - probably to give to the marketing firm who hired them. I had agreed to the survey since they had called several times and thought I'd help them out on a "survey" about health care.
All this is a scam - a lie. Don't fall for it! From now on, I will stop responding to ANY poll or survey.
I'm really tired of lying and dishonesty in business; the use of euphemisms to cover up dishonest practices. Excuses.
Today's online WSJ writes about a law firm in FL that routinely lied on foreclosure papers, forging notarizations, backdating documents and even lying about serving them. This guy should disbarred and put into jail.
Actions
I checked the Krypto Fund today for asset allocations: none.
Word of the Day
"Dissentient" - noun & adjective [$10]
Dissentient means (adjective) disagreeing with the majority or official view; (noun) a person who dissents.
Sentence: Be a dissentient! ... or is it Be dissentient! Same thing. Think for your self - avoid the crowd (Vitate turbam!) ... Do not care what others think or think about your ideas!
The questions are innocent at first - perhaps they want your opinion about types of hospitals, etc., or about or health care industry. Then they want to ask personal information and "guarantee" this will be used for statistics only. They ask about income, zip code and then ask you for your street. Huh ? How could that be used for statistics. Obviously they are lying. Since you probably don't remember what their name is, you can't even complain.
Yesterday after I refused to reply the the "Street name" question, the questioner ask my street number! They simply wanted my address - probably to give to the marketing firm who hired them. I had agreed to the survey since they had called several times and thought I'd help them out on a "survey" about health care.
All this is a scam - a lie. Don't fall for it! From now on, I will stop responding to ANY poll or survey.
I'm really tired of lying and dishonesty in business; the use of euphemisms to cover up dishonest practices. Excuses.
Today's online WSJ writes about a law firm in FL that routinely lied on foreclosure papers, forging notarizations, backdating documents and even lying about serving them. This guy should disbarred and put into jail.
Actions
I checked the Krypto Fund today for asset allocations: none.
Word of the Day
"Dissentient" - noun & adjective [$10]
Dissentient means (adjective) disagreeing with the majority or official view; (noun) a person who dissents.
Sentence: Be a dissentient! ... or is it Be dissentient! Same thing. Think for your self - avoid the crowd (Vitate turbam!) ... Do not care what others think or think about your ideas!
Wednesday, October 13, 2010
Foreclosure Follies
How ludicrous is this whining by banks about courts requiring them to do foreclosures properly!
These banks collect billions in servicing fees, yet want to make more and more money so they cut corners and they refuse to hire more people to process the loans. They hire law firms to specialize in the foreclosure process, but all that means is the lawyers lie for them, too. Fannie Mae and Freddie Mac are among the worst offenders. All this is just outrageous. Now they go on TV and get shills to say how all this correct procedure is somehow hurting the real estate recovery.
That's more Boob Bait for the Booboise - talking points for their lackeys in the media and financial industry.
Yet making simply loan modifications and approving short sales quickly - real actions that would save them money - are not done.
In my opinion, any state that permits non-judicial foreclosures should immediately change to requiring judicial foreclosures. The financial industry has proven that it is incompetent, utterly ruthless and selfish.
Make them do it right. That's why they are being paid.
Word of the Day
"Subserve" - verb, transitive [$10]
Subserve means 1. to serve as an instrument or means of; 2. to promote the welfare or purposes of.
Sentence: Courts should be a forum of impartial justice adn correct, fair procedure; they should NOT subserve bank profits.
Banks have been caught lying on court papers and not properly serving borrowers that a foreclosure sale date is set. They lose notes and cannot prove they actually own the loan, yet they want to foreclose faster.
These banks collect billions in servicing fees, yet want to make more and more money so they cut corners and they refuse to hire more people to process the loans. They hire law firms to specialize in the foreclosure process, but all that means is the lawyers lie for them, too. Fannie Mae and Freddie Mac are among the worst offenders. All this is just outrageous. Now they go on TV and get shills to say how all this correct procedure is somehow hurting the real estate recovery.
That's more Boob Bait for the Booboise - talking points for their lackeys in the media and financial industry.
Yet making simply loan modifications and approving short sales quickly - real actions that would save them money - are not done.
In my opinion, any state that permits non-judicial foreclosures should immediately change to requiring judicial foreclosures. The financial industry has proven that it is incompetent, utterly ruthless and selfish.
Make them do it right. That's why they are being paid.
Word of the Day
"Subserve" - verb, transitive [$10]
Subserve means 1. to serve as an instrument or means of; 2. to promote the welfare or purposes of.
Sentence: Courts should be a forum of impartial justice adn correct, fair procedure; they should NOT subserve bank profits.
Tuesday, October 12, 2010
Lucky Star Pins the Bear
Clearly Lucky Star wants to be in the markets as a Bull. In this photo she is pinning the Bear with a vicious leg hold.
My thinking is the US markets are trading the November elections. The defeat of many incumbents would end the anti-business, anti-freedom power of the P-O-R clique; Perhaps real spending cuts could begin, and a power shift to the common man and woman could begin.
The Ruling Classes have not suffered real spending cuts for many, many decades. The lawyers, lobbyists and rich and powerful have grabbed more and more income and wealth using the monopoly powers of big government, big corporations and big unions to seize it. Joe & Jane in the middle have gotten pay cuts, layoffs, pension cuts, benefit cuts, and regulations on their lives to the extent of mandating certain types of toilets.
If the "Tea Parties" do anything, perhaps they can START a power shift. With a good start, perhaps some intellectual leadership can deflect their forces towards Fraternal Libertarianism, where the Ruling Classes are regulated heavily and the poor are helped, while Joe & Jane in the middle have more freedom.
The time when a DC Ruling Class congressman can take taxpayer money, send a bit back to his district as a payoff to supporters and claim to be "helping" it must end. All that money should never leave the district.
Government bureaucrats are acting more like scalphunters: they grab business records and look for red-tape 'violations' of phony, inane rules everywhere, while letting the Street and hedge funds loot the public. The SEC even aids and abets them, shaping markets to let them make more and more vig every day.
Voters: Gut the Ruling Classes! Eviscerate them! Kick them all out!
Actions
I sold the last of my TIPs yesterday. The real returns on those are now less than 1.5% for 20-30 years. Why lock in a losing investment? Krypto will be a small seller of stocks higher, but be a big buyer lower. I figure the US big caps are cheap; in a pullback to 1100 S&P I will likely raise their allocation.
Word of the Day
"Regnant" - adjective [$10]
Regnant means 1. reigning (Queen regnant); 2. (of things, qualities, etc.) predominant, prevalent.
Sentence: Voters should sweep out the entire regnant class in Dc and most state capitals.
Monday, October 11, 2010
Lucky Star is Here
After a long flight from Australia (with a comfort stopover in LA), our new puppy, Lucky Star, arrived Friday evening. Here's a photo of her contemplating the sheepskin that she's lying on.
Of course the trip was not without "adventure". Is there a reason airlines simply must torment their customers? Airline management must be brain-dead. Or are ex-Soviet bureaucrats.
I had the flight info and airbill number, but where at the airport to pick up Lucky? She was arriving on a regular flight, but was "cargo". The airline (United) had lots of information on how well they treat animals (and they did), but no info on where to pick them up. There wasn't even information on where United cargo could be picked up (Boston airport has two cargo terminals).
Figuring to cover all angles, I arrived early and went to the regular "baggage service" office. The polite lady informed me I was at the wrong place, but at least she told me where the United cargo location was and how to drive there (not easy in the circuitous airport road system). Arriving at the cargo area, I was confronts with my "Authorized parking Only" signs, threatening towing. No visitor or pickup parking. Hmmm. I asked a fellow where United was and he pointed "over there, to the right."
I saw a fellow pull out of one of the forbidden parking spots, and figuring he was leaving from work (it was just after 5PM), I took his spot. I walked to the United office and eventually a fellow appeared. He said the puppy would arrive at the cargo terminal in about 20 minutes as the flight had just landed. Asking about parking, he said I could park in the handicapped spot in front of the office so long as I did not leave the car. Thinking that made no sense, as to get Lucky I would, of course, have to leave the car, I just stayed put.
Twenty minutes later, I saw Lucky's crate at a cargo bay door. I went inside again. The fellow said I'd have to pay a $35 "terminal fee" (check or cash - exact change). Hmmm. That was never mentioned anywhere or by anyone. The fellow thought the computer response to the airbill number was odd. He called a person in the office. The office person said that meant the $35 was prepaid. The guy then went to the rear and came back saying the "supervisor" said I had to pay. I had the cash - exact change - and said I wanted a receipt. He said he had no cash receipts. Hmmm. I said to write me one somewhere and he wrote on on the airbill form that I had to sign for the pickup. I further told him that I thought the fee was prepaid and I was going to make United pay me back, and that the animal transport service (a "premium" service) would have told me if I had to pay $35 on pickup, having charged me multiple thousand $ for the overall transport of Lucky.
Time will tell, but my guess is the terminal station supervisor was an ex-Soviet bureaucrat wanting to push the common man around. At least it was me doing the pickup - I always have cash and in small bills (a holdover from paying NYC taxi fairs). Mrs. B would have had no cash or checks - she pays by credit card for everything, even a $5 McDonald's tab.
[By the way, when I post a photo, the blogger seems to strip out my extra lines that I used to make this post more readable.]
Actions
I will update the model this AM to see if Krypto has any sell orders.
Word of the Day
"Diffident" - noun [$10]
Diffident means 1. lacking confidence, timid; 2. reserved, unassertive.
Sentence: The other dogs are maintaining a diffident attitude towards the puppy.
Friday, October 8, 2010
Zzzzzzzzzzzz ...
I overslept. No post today.
Word of the Day
"Eclat" - noun [$10] seen in Emerson's famous essay, "Self-Reliance"; [French from éclater 'burst out']
Eclat means 1. brilliant display, dazzling effect; 2. social distinction, conspicous success, universal approbation (with great éclat).
Sentence: The initial éclat of Obama has dimmed as he has done nothing good for the common man or woman.
Word of the Day
"Eclat" - noun [$10] seen in Emerson's famous essay, "Self-Reliance"; [French from éclater 'burst out']
Eclat means 1. brilliant display, dazzling effect; 2. social distinction, conspicous success, universal approbation (with great éclat).
Sentence: The initial éclat of Obama has dimmed as he has done nothing good for the common man or woman.
Thursday, October 7, 2010
The Corrupt SEC
The SEC's report on the flash crash of May publicly reveals its deep level of corruption and that it now longer serves the PUBLIC in its regulation of the stock exchanges. The report clearly shows that the fragmented electronic markets that the SEC has imposed simply do not work under stress. The SEC turned the stocks markets over to nameless, faceless computers, instead of people with clear responsibility and capital at risk.
The report documents that a huge trade made by a huge mutual fund [Waddell & Reed], that in fact operated like a hedge fund, cracked open the seams of the markets like the iceberg hitting the Titanic. And the markets sank, despite all those promises of better liquidity and public service the SEC promised when it forced the NYSE specialist system out of its former critical role.
In a market dominated by HUMANS, that huge order by Waddell & Reed would have been exposed to the markets and that fund would have gotten a low price and borne the cost of its lust for speed itself. Instead, the the SEC's market, they were able to secretly flood the markets with thousands of small electronic orders simultaneously, like a virus infects a being. And that wave of orders killed the market as other computer traders copied the move.
The SEC could easily stop this practice. Bring back the specialist system. Impose it on all stocks. Impose it on ETFs. Require large orders on stock futures to go to people in the pit. Then those hogs will have to pay for their greed as the counterparties price the speed & size into lower bids. Ban ALL electronic trading whenever the market is down 2% or for a stock when it is down 5%. Ban coordinated electronic waves of orders. Coordinated electronic orders are obviously market manipulation - get rid of them. Expose the large order to the market at once to attract offers, using the NYSE specialist to advertise the stock available and attract bids. That's how large orders were formerly done and that worked OK for decades.
Will the SEC do any of this? Nope. They are corrupt and in the pocket of the Street & hedge funds & their law firms. The SEC employees want high paying jobs when they leave the agency, and a sure way to get those is to do the bidding of those people while working for the SEC.
Sighhh. The Ruling Classes in DC are so corrupt. Vote them all out this November.
Word of the Day
"Entelechy" - noun [$10] Philosophical
Entelechy means 1. realization of potential; 2. the supposed essential nature or guiding principal of a living thing.
Sentence: The SEC and its employees has lost all connection with the entelechy of the agency, which is, as it is for ALL government agencies, to serve the People and the Common Man and Woman.
The report documents that a huge trade made by a huge mutual fund [Waddell & Reed], that in fact operated like a hedge fund, cracked open the seams of the markets like the iceberg hitting the Titanic. And the markets sank, despite all those promises of better liquidity and public service the SEC promised when it forced the NYSE specialist system out of its former critical role.
In a market dominated by HUMANS, that huge order by Waddell & Reed would have been exposed to the markets and that fund would have gotten a low price and borne the cost of its lust for speed itself. Instead, the the SEC's market, they were able to secretly flood the markets with thousands of small electronic orders simultaneously, like a virus infects a being. And that wave of orders killed the market as other computer traders copied the move.
The SEC could easily stop this practice. Bring back the specialist system. Impose it on all stocks. Impose it on ETFs. Require large orders on stock futures to go to people in the pit. Then those hogs will have to pay for their greed as the counterparties price the speed & size into lower bids. Ban ALL electronic trading whenever the market is down 2% or for a stock when it is down 5%. Ban coordinated electronic waves of orders. Coordinated electronic orders are obviously market manipulation - get rid of them. Expose the large order to the market at once to attract offers, using the NYSE specialist to advertise the stock available and attract bids. That's how large orders were formerly done and that worked OK for decades.
Will the SEC do any of this? Nope. They are corrupt and in the pocket of the Street & hedge funds & their law firms. The SEC employees want high paying jobs when they leave the agency, and a sure way to get those is to do the bidding of those people while working for the SEC.
Sighhh. The Ruling Classes in DC are so corrupt. Vote them all out this November.
Word of the Day
"Entelechy" - noun [$10] Philosophical
Entelechy means 1. realization of potential; 2. the supposed essential nature or guiding principal of a living thing.
Sentence: The SEC and its employees has lost all connection with the entelechy of the agency, which is, as it is for ALL government agencies, to serve the People and the Common Man and Woman.
Wednesday, October 6, 2010
A Poem about P-O-R
Yesterday I beat up on modern poets. Today I publish one that I wrote for a lark yesterday; it's sort of a retort to imagined comments from poets angry with me, saying, "you're so smart, Bman, can you write a poem that meets some of your criteria for a true poem". I did it as you'll see below, expanding a metaphor that I've thought fits the attitude of modern liberals for decades.
The P-O-R Three, the Man and the Cow
O Nancy of pearls and wine and brie,
O’bama of wind and blath’r and scowl,
O Ried of des’rt and city of glee,
When you see Man of prosper’ty,
We know your mind’s eye does see
A cow dropping to its knee.
You will tax and tax,
To the max and max,
As a leech does a bleed,
As the vampire does feed,
You fix leechs more and more
To those men as cow’s herd of your,
To feed the hogs of your trough,
Until the cows all fall to rough.
Then with feigned grace all you three
Will scrape some leaches from backs
‘til said cows - Men - stand and be,
Slaves again to feed you tax.
***End of Poem***
Actions
Waiting. Still riding that Brontosaurus, looking for the next water hole. I think the model will give some sell orders if the S&P 500 nears 1200. Krypto is far outperforming the S&P 500 and most beefers managers. Good doggie ... here's a bonus biscuit.
Word of the Day
"Fie" - interjection [$10] archaic
Fie expresses 1. disgust, shame or a pretense of outraged propriety; 2. distaste or shock.
A Poem about P-O-R
Fie!
You lie!
The P-O-R Three, the Man and the Cow
O Nancy of pearls and wine and brie,
O’bama of wind and blath’r and scowl,
O Ried of des’rt and city of glee,
When you see Man of prosper’ty,
We know your mind’s eye does see
A cow dropping to its knee.
You will tax and tax,
To the max and max,
As a leech does a bleed,
As the vampire does feed,
You fix leechs more and more
To those men as cow’s herd of your,
To feed the hogs of your trough,
Until the cows all fall to rough.
Then with feigned grace all you three
Will scrape some leaches from backs
‘til said cows - Men - stand and be,
Slaves again to feed you tax.
***End of Poem***
Actions
Waiting. Still riding that Brontosaurus, looking for the next water hole. I think the model will give some sell orders if the S&P 500 nears 1200. Krypto is far outperforming the S&P 500 and most beefers managers. Good doggie ... here's a bonus biscuit.
Word of the Day
"Fie" - interjection [$10] archaic
Fie expresses 1. disgust, shame or a pretense of outraged propriety; 2. distaste or shock.
A Poem about P-O-R
Fie!
You lie!
Tuesday, October 5, 2010
Problems in Poetry
Modern poetry has lost its bearings. One can't even call many published poems poetry anymore. They read more like prose arranged to fit a visual pattern, and perhaps are more like a form of word art now. They lack any rhyme or meter or internal poetic structures such as alliteration, assonance or consonance. The verses and stanzas seems unconnected to their clause or sentence structures, as visual word patterns govern.
Here's an example from a poem in this quarter's Paris Review: I quote the last line and first line of two stanzas.
From stanzas #1 to #2 -
...
against a stranger. Looming
looming up through
...
From stanzas #2 to #3 -
...
the Thames, at once
murky and aflame, I watched
...
Now why is the stanza broken there - intra sentence? Normally one would pause reading in such a break. But from the words and thoughts, there is no reason or rational or even emotion to cause a pause. My last clause [bold, italics] was more poetic that than the poem, having both alliteration and rhyme. Much modern poetry seems to be just prose arranged in a visual pattern, like crappy modern art.
Poetry should be the best words in the best places. Poetry is anchored by how it sounds when read or spoken, not how the words look on a page. Thus much "modern" poetry is not poetry at all.
An original modern poem like T. S. Eliot's The Waste Land contains much intricate rhyming and is littered with poetic devices, as well as meanings and allusions. Prose can have meanings via metaphors or allegory and make allusions for emphasis, but it's still prose until structured with poetic devices to sound good when read.
Calling a bunch of words of prose arranged on a page, a "poem", does not make it a poem. Poets: learn some prosody and read your poems aloud. If it sounds like a poem, it's a poem. If not, you're just writing visually artistic prose.
Word of the Day
"Caesura" - noun (plural caesuras) [$10] Prosody
Caesura means 1. (in Greek or Latin verse) a break between words within a metrical foot; 2. (in modern verse) a pause near the middle of the line. [shown on a page as the second part of the line being dropped down to the next line]
Here's an example from Wordsworth's famous poem, Tintern Abbey (I put in underlines to fill the space as the blog editor automatically strips out spaces beginning a line):
...
The guide, the guardian of my heart, and soul
Of all my moral being.
___________________Nor perhance
If I were not thus taught, should I the more
Suffer my genial spirits to decay:
...
There's a reason for that break: the prior thought/sentence ends and a new one begins midline. It's a real pause in the reading, not simply a visual construct.
Sentence: Too many modern poets use caesura for visual reasons when the construct should be confined to aural purposes.
Here's an example from a poem in this quarter's Paris Review: I quote the last line and first line of two stanzas.
From stanzas #1 to #2 -
...
against a stranger. Looming
looming up through
...
From stanzas #2 to #3 -
...
the Thames, at once
murky and aflame, I watched
...
Now why is the stanza broken there - intra sentence? Normally one would pause reading in such a break. But from the words and thoughts, there is no reason or rational or even emotion to cause a pause. My last clause [bold, italics] was more poetic that than the poem, having both alliteration and rhyme. Much modern poetry seems to be just prose arranged in a visual pattern, like crappy modern art.
Poetry should be the best words in the best places. Poetry is anchored by how it sounds when read or spoken, not how the words look on a page. Thus much "modern" poetry is not poetry at all.
An original modern poem like T. S. Eliot's The Waste Land contains much intricate rhyming and is littered with poetic devices, as well as meanings and allusions. Prose can have meanings via metaphors or allegory and make allusions for emphasis, but it's still prose until structured with poetic devices to sound good when read.
Calling a bunch of words of prose arranged on a page, a "poem", does not make it a poem. Poets: learn some prosody and read your poems aloud. If it sounds like a poem, it's a poem. If not, you're just writing visually artistic prose.
Word of the Day
"Caesura" - noun (plural caesuras) [$10] Prosody
Caesura means 1. (in Greek or Latin verse) a break between words within a metrical foot; 2. (in modern verse) a pause near the middle of the line. [shown on a page as the second part of the line being dropped down to the next line]
Here's an example from Wordsworth's famous poem, Tintern Abbey (I put in underlines to fill the space as the blog editor automatically strips out spaces beginning a line):
...
The guide, the guardian of my heart, and soul
Of all my moral being.
___________________Nor perhance
If I were not thus taught, should I the more
Suffer my genial spirits to decay:
...
There's a reason for that break: the prior thought/sentence ends and a new one begins midline. It's a real pause in the reading, not simply a visual construct.
Sentence: Too many modern poets use caesura for visual reasons when the construct should be confined to aural purposes.
Monday, October 4, 2010
Debt
Debt is neither good nor bad - it has no inherent morality. It's not a temptation. And it's not a free lunch. The crucial quality determining the goodness - or badness - of debt is simply on what you spend the money.
First the basics. It has been proven mathematically that under widely accepted assumptions about human behavior and values that the existence of debt INCREASES the total happiness of humanity. Debt is an intertemporal exchange of value. Debt permits people who need money to buy something useful they want or need to buy it now and pay for that item over time - perhaps the time they use the item. EXAMPLE: a car. You need a car to go to work & shop, etc. With a car LOAN, you get the car now and then use it to get work. The work generates income and you use a portion of that income to pay off the car loan. Voilà! The income and expense are matched over time.
The same applies to business loans, to home mortgages, to student loans, etc. Debt to raise money to spend productively is GOOD for the borrower.
And it's good for the lender. The lender has money and needs income over time. And wants his money back, too. The loan with interest gives him that income and he gets paid back IF he has made a correct decision that the borrower can repay. Often that becomes a exercise in probability - debt does involves unknown risks. That's why the lender charges an interest rate higher than a risk-free rate (such as on US Treasury bills or bonds - the government can print the money to pay its loans back ... and does every week of the year).
Debt is not riskless for the lender and it's not riskless for the borrower. Maybe the borrower has a medical problem or loses a job (such as through outsourcing). The borrower did nothing wrong - nothing bad. This can just be bad luck. The debt is a senior claim on his income, though. The lender can foreclose on the collateral, or put liens on the borrower's bank account. And the borrower can go bankrupt. That's his constitutional right - yes, bankruptcy is part of the US Constitution; Congress has explicit powers to write bankruptcy laws and has done it. The US has no debtor's prisons.
Barring stupid decisions on spending money from debt, you can now see that debt is a good, useful instrument to increase human happiness ... overall.
BUT debt can cause problems - big problems - IF the borrower wastes the money. Borrowering and using your home as collateral to go to Vegas or take your girlfriend on a cruise is stupid and wasteful. Ditto to maintain an extravagant lifestyle. Ditto to spend the money to dig holes and fill them up. Ditto to pay people not to work. These last few examples are why the US Federal government, the States and municipalities now have debt problems: decades of stupid, unproductive SPENDING.
The question is not the debt: IT'S THE SPENDING, STUPID SPENDING.
Question all spending. Politicians are wasting your money on stupid spending policies. They lie and use sophistry to obscure how they waste billions. Vote against politicians who don't value your tax money and spend it wisely.
Actions
The Krypto Fund model wants me to sell some gold-silver & emerging market stocks. I will comply and put the money into cash. The model wants me to buy bonds, but until I can find some with good value (i. e., low prices), I will wait.
Word of the Day
"Finitude" - noun [$100]
Finitude means a finite state or quality.
Sentence: One must limit borrowings that rely on refinancing to repay a loan; finitude exists in lenders' willingness to extend credit.
First the basics. It has been proven mathematically that under widely accepted assumptions about human behavior and values that the existence of debt INCREASES the total happiness of humanity. Debt is an intertemporal exchange of value. Debt permits people who need money to buy something useful they want or need to buy it now and pay for that item over time - perhaps the time they use the item. EXAMPLE: a car. You need a car to go to work & shop, etc. With a car LOAN, you get the car now and then use it to get work. The work generates income and you use a portion of that income to pay off the car loan. Voilà! The income and expense are matched over time.
The same applies to business loans, to home mortgages, to student loans, etc. Debt to raise money to spend productively is GOOD for the borrower.
And it's good for the lender. The lender has money and needs income over time. And wants his money back, too. The loan with interest gives him that income and he gets paid back IF he has made a correct decision that the borrower can repay. Often that becomes a exercise in probability - debt does involves unknown risks. That's why the lender charges an interest rate higher than a risk-free rate (such as on US Treasury bills or bonds - the government can print the money to pay its loans back ... and does every week of the year).
Debt is not riskless for the lender and it's not riskless for the borrower. Maybe the borrower has a medical problem or loses a job (such as through outsourcing). The borrower did nothing wrong - nothing bad. This can just be bad luck. The debt is a senior claim on his income, though. The lender can foreclose on the collateral, or put liens on the borrower's bank account. And the borrower can go bankrupt. That's his constitutional right - yes, bankruptcy is part of the US Constitution; Congress has explicit powers to write bankruptcy laws and has done it. The US has no debtor's prisons.
Barring stupid decisions on spending money from debt, you can now see that debt is a good, useful instrument to increase human happiness ... overall.
BUT debt can cause problems - big problems - IF the borrower wastes the money. Borrowering and using your home as collateral to go to Vegas or take your girlfriend on a cruise is stupid and wasteful. Ditto to maintain an extravagant lifestyle. Ditto to spend the money to dig holes and fill them up. Ditto to pay people not to work. These last few examples are why the US Federal government, the States and municipalities now have debt problems: decades of stupid, unproductive SPENDING.
The question is not the debt: IT'S THE SPENDING, STUPID SPENDING.
Question all spending. Politicians are wasting your money on stupid spending policies. They lie and use sophistry to obscure how they waste billions. Vote against politicians who don't value your tax money and spend it wisely.
Actions
The Krypto Fund model wants me to sell some gold-silver & emerging market stocks. I will comply and put the money into cash. The model wants me to buy bonds, but until I can find some with good value (i. e., low prices), I will wait.
Word of the Day
"Finitude" - noun [$100]
Finitude means a finite state or quality.
Sentence: One must limit borrowings that rely on refinancing to repay a loan; finitude exists in lenders' willingness to extend credit.
Friday, October 1, 2010
Rough Edges
Yes, that's me bringing some wood to the campfire; my tomahawk is carried on my belt. Having a pioneer mentality, being a male with a Ph. D. in a hard physical science makes my having many, many "rough edges" no surprise. In the domain of culture, I admit freely to having none until recent years. The only bit that I had was due to a course requirement in the humanities at Harvard College. I fulfilled that one by taking a famous course [Humanities 3] in Greek literature by Prof. John Finley. That distribution requirement did work, though, as it exposed me to a crack of light from a universe of culture that I would have otherwise never recognized existed. War.
How does a guy smooth out his rough edges? Read. Learn. How?
Courses in the humanities by the Teaching Company help: see http://www.teach12.com/. My current course is "Classics of British Literature". There are plenty of good courses on music, art, philosophy and literature available from them.
Read BOOKS. The Internet is a culture wasteland - you don't know what you are seeing unless from a reliable source. Classic books provide reliable places to learn culture, places that have endured decades, centuries or millenia.
Read good literary magazines. I expanded my magazine universe over the past two years and can recommend two: Lapham's Quarterly and The Paris Review. The former provides great writing from classical and even recent authors on gathered on particular subjects - the current issue is titled, "The City". The Paris Review offers good selections of current fiction and poetry. You need someone to select good material for you, or you will waste huge amounts of time with junk. The editors of these two quarterly journals do a good job, in my "humble" opinion ;)
Learn a foreign language - at least to be "literate" in it. Fluency is very, very hard to achieve as an adult, but literacy is doable and gives you the cultural exposure you need. I suggest Italian or French or both. Both have much great original literature in the language and are often used in English writing in snippets.
If you devote an hour a day to this program, in a couple years you'll have enough culture to not seem to be a troglodyte or a barbarian.
Word of the Day
"Belletristic" - adjective [$1000]; "Belletrist" - noun [$1000] and "belles-lettres" - substantive, plural [$10]
Belles-lettres means elegant or polite literature or literary studies.
Belletristic means of or pertaining to belles-lettres.
Belletrist means one devoted to belles-lettres.Sentence: Being a wee bit literate in Italian or French helps one read belletristic English language writings, as quite often quotes or epigrams in those languages appea
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