Monday, February 28, 2011

Call Me Curmudgeon

Time to cause more trouble.

Modern music and "literature" in the American and English speaking world stinks. Not everything, but most of it - enough to use that general statement as a working model. To paraphrase Virginia Woolf, on or about a certain day in 1954, American and English song and writing changed. For the worse, much worse: they died.

À Propos Music: Four years ago your writer proved (using abduction*) that no "good" recording for a song has been made since a certain day in 1954; two years ago he posted an update of that proof. See the link following ->

Exceptions are recordings by Julie Andrews, Judy Garland and a few others. Sure, a song might strike an emotional chord with you, it might please you, but most likely, it is be technically deficient - no better than a "C" on any absolute scale of quality. If you disagree, read my proof and expose the errors in my logic. Or provide me a counterexample of a broad class of "good" recorded songs.

*Btw, "abduction" is a $100 Word of the Day from February 10, 2011. See below for its reprise as Word of the Day.

À Propos Writing:

Proposition: No good literature has been written in the American or English language since that same day in 1954. This is also an abductive proof.

1. I like almost nothing written since that day in 1954.
2. Most of the writing of T. S. Eliot and all of the works of W. B.Yeats, H. L. Mencken and Sinclair Lewis occurred prior thereto.
3. Churchill won the Nobel prize in Literature in 1953, Hemingway in 1954. Steinbeck won in 1962, but for works written decades earlier. Beckett won in 1969, but for a work written in 1953. Golding won the Nobel Prize for Literature in 1983, but for a work published in 1954. For works written after 1954 - thin gruel indeed.

Little poetry has been written in American or English since WW II. A few novelists won the prize, but their novels seem to lack qualities for greatness. To Kill a Mockingbird was nominated by a friend, but to me, it lacks greatness for this reason: it was written in 1960 when the civil rights issue was already national, unlike Uncle Tom's Cabin, being written before the slavery issue went nuclear, and which is recognized to have caused national recognition of slavery's cruel and inhuman nature. A few other novels might claim greatness, but those of more recent Nobel laureates seem quite forgettable, unlike those of Sinclair Lewis or Mark Twain. The much lauded John Updike mostly adapted ideas of Sinclair Lewis.

No columnist matches up to H. L. Mencken, except possibly Walter Lippmann who retired in the 1960s. William F. Buckley was good, but not great; he was not in the class of H. L. Mencken.

Great nonfiction? None.

Possible counterexamples: most are translations of writing originally done in other languages: Solzhenitsyn, Pasternak, Milosz.

For now, I'll consider the proposition proven abductively.

Please post examples of whatever you think is great writing in American or English.


I own too much silver vis a vis gold, especially silver bullion. It's heavy and has little survival value in 100 oz. bars. My gold-silver ration dropped below 1:1 recently - too low; 3:2 or 2:1 is more appropriate for the long term. I'll sell 1/3 of my bullion in the next few days, and buy gold via GLD to keep the asset class appropriately sized.

Gosh, it's good I moved it to the bank vault a few years ago - the ground is frozen and covered with several feet of icy snow; digging would be impossible.

Word of the Day (a reprise today)

"Abduction" - noun [$100] Logic
Abduction means a syllogism whose major premise is certain but whose minor premise is probably.
Sentence: Much reasoning in life (investing, detective work, historical analysis, policy analysis) is neither deduction nor induction, but is abduction, where one starts with facts and creates a probable scenario / narrative that fits the facts to use in actions. Sherlock Holmes used abduction.

Friday, February 25, 2011

A Hodge-Podge Day

When I was a boy & my parents were going out to dinner with friends or or to the horse races in Wheeling, West Virginia, they would declare a "hodge-podge" night, meaning that my brothers & I could make whatever we wanted for our dinner (usually my grandmother would provide a bit of adult supervision). That often meant peanut butter sandwiches with chocolate instant pudding for dessert, or something tasty like that.

"Hodge-podge" - noun [$2] - means a mixture of diverse ingredients.

Today is a hodge-podge blog day.

More on Public Employee Unions

A public employee union "bargaining" for anything represents Taxation without Representation and the stripping of power of the legislature. How can a bargain be struck that deprives the people of the power to legislate spending and taxation ? That's what a backroom bargain over wages or pensions or anything means. The union bosses and their cronies in the executive get together to put the State or City into a binding contract. What role does the people have ? Nothing. The government gets bound into a contract requiring it to PAY. And from where does that money come? Taxes.

When the contract is executed, the legislature finds itself having to vote taxes to fund it or be violating the contract and subject to various judicial confiscations. This is inherently taxation without representation. People getting no benefits have thus been forced to pay for endless retirement and health benefits of long retired state workers who might no longer even live in the state. This is involuntary servitude - a form of serfdom.

No legislature can bind another - no people can bind another - without their own legislature having FINAL say. That mean NO COLLECTIVE BARGAINING RIGHTS for public employee unions. Those are a violation of democracy and the principles of the nation and a republican form of government as mandated by the Constitution.

A Thought on Libertarianism

Here's a fine quote I read yesterday in an essay by T. S. Eliot on the writings of the philosopher, Francis Herbert Bradley [in this case comparing his thoughts to Matthew Arnold]: "For Utilitarianism was, as every reader of Arnold knows, a great temple in Philistia", meaning that if all value to humanity is measured by "utility", then where do moral or social or fraternal values fit? All becomes decadence, hedonism, the "values" of the Philistine rule. And what is almost synonymous with Utilitarianism? Libertarianism. Thus to modernize the thought:

Libertarianism is a great temple in Philistia.

Tea party adherents, beware. You are going down a path of darkness.

An Intensive Course on Literature

Simultaneously read multiple works of the following:

T. S. Eliot, W. B. Yeats, H. L. Mencken, and Sinclair Lewis.

Those are three Novel laureates writers in the English and American languages and a hugely influential, entertaining and literate newspaper columnist. All wrote in the period roughly from 1890 to 1940, a period that created the foundation of the modern world. The first three have wonderful vocabularies; Lewis provides crucial societal scenes of America we can still recognize today.

Those writers cover poetry, essays, plays, critical prose, polemical prose, imaginative novels, etc. As one reads more and more, your ability to understand them grows. They complement each other.

Post World War II writing is thin gruel compared to their works. Why bother with it at all?

Word of the Day

"Miasma" - noun [$10] hmmm a card from high school days.
Miasma means a pervasive influence or atmosphere that tends to deplete or corrupt.
Sentence: The multi-decadal miasma brought by State Boards of Education to American schools has infected secondary education in science and literature with gangrenous tissue causing the whole limbs of the body of student knowledge to rot.

Thursday, February 24, 2011

Word Thoughts Arising from Cucumbers

Mrs. B and I watched the fine movie, Animal House, last Friday evening. The show is chock full of humorous innuendos, and hilarious skits and scenes.

[Otter and Mrs. Wormer are in the supermarket vegetable section]
Eric 'Otter' Stratton: Mine's bigger.
[Marion looks questioningly at him]
Eric 'Otter' Stratton: My cucumber. It's bigger. I think vegetables can be very sensuous, don't you?
Marion Wormer: No, vegetables are sensual. People are sensuous.
Eric 'Otter' Stratton: Right. Sensual. That's what I meant. My name's Eric Stratton. People call me Otter.
Marion Wormer: My name's Marion. People call me Mrs. Wormer.
Eric 'Otter' Stratton: Oh, we have a Dean Wormer at Faber.
Marion Wormer: How interesting. I have a husband named Dean Wormer at Faber. Still want to show me your cucumber?

Has that line, "No, vegetables are sensual. People are sensuous" ever struck you ? Now Bunkerman's mind was not in the gutter watching the show (some of the time), he was wondering about that line and why those two words have different usages and meanings. Why ?

Bunkerman turned to the dictionary, in this case the Oxford English Dictionary, and online academic book passages to research adjective formation by the suffixes -ous and -al. How does their meaning and usage differ?

-OUS creates an adjective with the meaning, "full of, characterized by, of the nature of". The adjectives have a sense of 'abounding in'. More: -OUS is used to form gradable adjectives, having a sense of a continuous variation [mountainous, poisonous].

-AL creates an adjective with the meaning, "of a kind or pertaining to". -AL imposes restriction on its nominal or verbal input. [annual, primal]. -AL forms adjectives with a subcategorization feature [parental, musical, traditional] from nouns. -AL adjectives seem to have a binary nature; one is either in the category or not; they are not normally gradable.

"Sensuous" - adjective [$2]
Sensuous means 1. of, relating to or arising from the senses; 2. appealing to the senses; 3. greatly appreciative of the pleasures of sensation.

"Sensual" - adjective [$2]
Sensual means 1. relating to or affecting a sense or a sense organ; 2. a. relating to or preoccupied with a gratification of physical appetites esp. the sexual appetite; b. suggesting sexuality, voluptuous; c. not spiritual or intellectual: physical; d, having no moral or spiritual interests: worldly.

Sentence: Vegetables are sensual. People are sensuous. The first usage carries meaning #2b of sensual - in shape, a cucumber resembles a male sex organ; the second usage carries meaning #2 of sensuous - a handsome young man could be appealing to the senses of a woman.

Question: What figure in Animal House best fits your personality ?

For Bunkerman, the answer is D-Day. The scene where he lights up his torch to cut the car into disposable bits always strikes a chord with me. And in the final scene, he's listed as "whereabouts unknown". Rammming Speed !!! Mrs. B agrees.

Word of the Day

Already provided today - see above for two $2 words and a $1000 analysis.

Wednesday, February 23, 2011

Public Employee Unions ?

Should they exist ?

The obvious answer is no.

Do taxpayers have a union ? Nope.

Can taxpayers go on strike ? Nope.

Federal labor laws do not apply to States and localities. Why ? Read the 10th amendment and the rest of the Constitution. There is no Federal power to force the States to do anything (except obey the Constitution and have a Republican form of government).

Public employee unions are inherently corrupt. The union gives campaign donations of member in-kind support and money; in turn, the beholden legislator or governor gives them more pay and benefits. Where is the taxpayer ? The taxpayer is entangled in a web of corruption and self-dealing, paying and paying for ... nothing of value.

Civil service laws, service boards and other protections can and should prevent governmental corruption from harming worker groups or individual workers. Cronyism is rampant in government - it's likely an inherent nature of the beast. The balance, however, is not to put taxpayers at the mercy of more crony tactics. Why create another beast of prey to suck the blood of taxpayers ?

Taxpayers have no choice in whether to pay or not. It's pay or go to jail or be killed resisting arrest. In the private sector, a consumer can buy another product or do without. One can buy a car made in Alabama by a non-union plant. A taxpayer in Wisconsin has no choice, but to pay ... and pay ... and pay.

All powers of public employee unions should be eliminated. If public employees want to join an organization to lobby or whatever, fine. But DO NOT give that entity any powers whatsoever.

Public employee unions - no way, no how, no where. They have no place in a fair society.


None. All is in balance after yesterday's sale of some gold & silver. Budding sell signals for some stocks are now dormant. Krypto is still waiting for QE2 to end to get better prices on taxable bonds and TIPs.


Tomorrow's blog post will be R rated.

Word of the Day

"Gallous" - adjective [$10 ? or $1,000 ? unclear]; formed from the noun, "gall" [$10] but not listed in dictionaries of any value.
Gall means (usage #1) 1. impudence; 2. asperity, rancor; 3. bitterness, anything bitter.
Gallous means having a bitter, rancorous, or impudent quality.
Sentence: Gallous actions of public employees unions in extracting money from taxpayers and exercising power must be challenged and defeated. Nearly insolvent state and city governments show that their power must be eviscerated.

"Gallous" was used in the famous play by J. M. Synge, Playboy of the Western World (written in 1907 and first performed in Dublin, causing riots). The character, Pegeen Mike, says, "There's a great gap between a gallous story and a dirty deed." I read that line in a chapter in the Cambridge Companion to W. B. Yeats, page 123, as Yeats' influence on Synge was described. The title of the play is now a cliché, but the drift in meanings of words in time and space since 1907 in Ireland has caused its usage to have almost no relation to the play.

Tuesday, February 22, 2011

Washington's Birthday

Today IS the birthday of George Washington, born 279 years ago.

Tolstoy and Marxist philosophers believed that classes and masses of people determine the path of changes of a society, not people. George Washington is a counterexample.

Without this singular man, the American colonies would likely have lost their War of Independence.

Without this singular man, the independent American States would likely have split into a cacophonous mess after winning the war.

Without this singular man, the new American republic would likely have failed in its first decade of existence.

After the end of the war, even his "opposing number", King George III of England, recognized his greatness.

George Washington changed history. Without his existence, the world would be very different now. Would the United States even exist? Without the United States, would Europe be a German Empire? A Nazi Empire? A Communist Empire? Likely something of that sort would indeed exist.

The unwavering moral compass that George Washington possessed guided him. Perhaps it was connected to his dignitas - his drive to be a good, respected person. The man himself, however, gave full credit to "Providence" and / or the "Creator" and / or "Almighty God" in many letter and speeches and words in both his private and public life. His faith both motivated him, helped him endure adversity and hardship and kept him from the clutches of hubris.

Let's celebrate this great man, not by worshipping or adulating him, but by learning about him. That's how we can honor him, by learning about his values and virtues and beliefs, to use them as a model in conduct of our lives.

One wishes that the current nest of knaves in the Dark City in the Swamp (aka DC) would do this. But I suppose they will not even recognize this day for what is actually is. We need new leaders who measure up to George Washington to lead this nation into the 21st century. Just a few, maybe one, will do.


Washington's God, by Michael and Jana Novak, researches many original sources to examine the nature of Washington's God. To quote a review, "This important book brings to light sorely neglected dimensions of George Washington's life and thought. Readers will better understand our country by understanding the deepest convictions of its founding father." I'll second that.

The answer: George Washington was not a deist. He was a practicing Anglican (aka Episcopalian) in the common 18th century latitudinarian manner, without any particular doctrine or needs for the surface practices of any sect beyond belief, prayer and faith. Washington's God was the God of the Hebrew, Christian and Muslim faiths. He saw the hand of Providence actively as guiding and helping him, his men in the army and the nation to become what it has become. He prayed often to Almighty God.

But read the book and form your own opinion. The book contains the facts from letters, speeches, and from his stepgrandchildren who knew him from family life.


This morning's action will definitely cause Krypto to give stronger sell signal for gold and silver. I'll sell some (about 10% of holdings) at the open, via GLD and SLV to re-balance the Krypto Fund. Proceeds to cash for now.

Word of the Day

"Intercalcate" - verb, intransitive [$10] and "intercalcating" - participle.
Intercalcate means 1. insert (an intercalary day or month); 2. interpose (something out of the ordinary course); 3. (as 'intercalcated' adjective) (of strata, etc.) interposed.
Sentence: On the day that George Washington was born, the date was February 11, 1732, but since 11 days were intercalcated in 1752 (see below), the date in our modern calendar is February 22, 1732.

From the Internet [ ]: "Although Queen Elizabeth I initially expressed some interest in changing the calendar in 1582, the Church of England effectively tabled the idea, which was not taken up again for nearly 170 years. By that time, passions had sufficiently cooled that when the idea was introduced as an act of Parliament in 1752, it passed with hardly a murmur. The English colonies in America changed at the same time. By that time, 11 days now had to be added, which the English did by skipping from September 2 to September 14, 1752."

Friday, February 18, 2011

G-20 Garbage

Why does anyone pay attention to these G-20 meetings? They are simply utter garbage, boob bait for the world's bubbas, a form of circuses for the news junkies and policy knaves and dopes who want to think their governments care about or are doing anything to help the world's common people.

They are not.

G-20 meetings are simply press propaganda events for governmental leaders filled with phony photo ops and vacuous communiqués. Forget them. Ignore them. Don't feed the beast. Give it the derision it deserves. The public should give the G-20 the five fingered wave of good-bye.


Silver reaches a multi-year high. I'll check the Krypto Fund to see if any actions are warranted.

PS: None yet, getting closer.

Word of the Day

"Unctuous" - adjective [$10]; alternate spelling 'unctious'.
Unctuous means 1. having the quality or characteristics o foil or ointment; greasy; 2. unpleasantly flattering, oily (of behavior or speech.
Sentence: Why or why does our "press" behave like unctuous courtiers at G-20 meetings and Davos? Are they simply bending over to get ratings and interviews? Or is it more? Are they apart of the problem as allies of the hegemonic classes (aka Rich & Powerful) and their blood-sucking bureaucratic allies? I think yes.

Thursday, February 17, 2011

The Center and the Fringes

The Center

The common man and woman is the center: 2/3 or more of the American people simply want to lead their lives with fairness, hope and some security. They want the government out of their bank accounts and bedrooms. They do not want to be pushed around by bureaucrats or billionaires. They are a sleeping tiger.

The Fringes

The fringes are represented by talk radio and NPR.

The Right

The billionaires on the right and their propaganda machines want to keep the people vulnerable and divided. "They" want no government so "they" can loot and pillage the people and get more wealth and power. They want to enserf the people with economic pressure.

The Left

The left wants to turn everyone into a government employee whom "they" can control with all sorts of regulations and restrictions on freedom. They despise Joe Sixpack; they think the common man and woman is stupid and unruly and needs to be "led" forcefully, like a herd of sheep, to live the life of a ... serf.

Both Fringes often team up in that Dark City in the swamp, aka Washington DC. Hmmm DC = Dark City, or maybe City of Darkness ? Certainly it's not a City of Light or that Shining City on a Hill, and definitely not St. Augustine's City of God.

The People

The principle problem the people not have is that they are being distracted and herded by the baying of the wolves on either side. They have no leader or leadership group - no vanguard party (to borrow Lenin's concept). They are pushed hither and thither, but going nowhere. Both sides are picking them off a few at a time, enserfing more and more people.

Politically, the door is wide open for a new Party of the Center; the barn door is wide open; one could drive a Mack truck thru ... if there was a driver.

The ideology would be Free Fraternalism (or something like it), but there's no driver - no leader.

Let's keep scanning the horizon for a leader, a big fellow on a white horse, an honest man (or woman) to support. Maybe one will appear.


None yet. Krypto still has a weak sell signal on some gold, but we usually wait for a strong signal in that volatile asset class. TIPs are not yet at favorable prices; those need QE2 to end to get Treasury bond prices down for less than 10 year maturities.

Word of the Day

"Revenant" - noun [$10]
Revenant means a person who has returned, especially supposedly from teh dead.
Sentence: Newt Gingrich wants to be a political revenant, but he has little support among the common man and woman.

Wednesday, February 16, 2011

Word of the Day

The Word of the Day in this blog is a selection from my card file of words that I have come across reading books, which at the time, I either did not know the meaning or, even if I had a slight notion of the meaning, I could not reasonably articulate that meaning. My card file dates back to high school circa 1970, when I was trying to improve my vocabulary. Yes, I had to take the SAT and various Achievement tests to apply to places like Harvard. Those tests were required to help those schools could measure the knowledge of a person from a small town in Ohio to students from the well-known prep schools of the East coast and famous schools of NYC. Doing well meant a chance at admission.

Being a per person who works hard and tries to improve oneself, I turned to keeping a card file of new words. And that file still exists. I occasionally find cards written in my old handwriting - cards that I created in high school for words like "mendacious".

I write about this so you'll know I'm not using some Internet word list, or words from the word of the day of, or any other artificially created list. These words are words used by writers of books that I am or have read at some time in my life, or from articles in a good magazine such as National Review.

A word list works for me; over time many of those words have moved into my oral or written vocabularies.

Word of the Day

"Metastory" - noun [$1000]: made from the Greek combining form, "meta" combined with the common word, "story".
Meta: a Greek combining form conveying the principle notion of sharing; action in common; pursuit or quest; and especially change (of place, order, condition or nature).
Sentence: [from "Washington's God" by Michael and Jana Novak, page 140, referring to changes circa the beginning of the French & Indian War] "A new sort of metastory began to take shape to explain what the colonists were experiencing ..."

Tuesday, February 15, 2011


Yes, for the hegemonic classes (aka rich & powerful) and their bureaucratic and media allies (aka co-conspirators).

No, for the common man and woman. They are still bleeding and running harder on the treadmill, getting nowhere. When they falter, they get tossed into the pit.

Barry is providing no leadership. Why should we be surprised? He was never a leader for anything anywhere. He's reverted to form, playing an inside game with his Beltway buddies on the budget. Engage the people? No way for Barry - he despises the common man & woman.

Private equity scam artists are back, milking the tax deduction for interest expense for debt capital. That deduction should be gutted except for loans directly tied to business activity such as inventory loans.

The financial media spends half their air time buttkissing the billionaires and CEOs who lay off the common man to get a bigger bonus. They should be kicking their butts, as I do as often as possible.

Has anyone noticed that January provided many record low temperatures for many places worldwide? Uh ... under the global warming claims of the "scientists" for the past 20+ years, that should not be happening. The billions handed to them for "research" has been wasted.

Re investments, I am still riding the bull elephant; no waterhole in sight yet. My strategy is still to sell high, buy low, OR buy low, sell high, for each asset class.

Here's a tax strategy I am implementing a bit over time. If one is an AMT taxpayer, the effective Federal rate is 28%, which is as low a rate as I've seen in my lifetime, harkening back to the Reagan tax reform rates of 1986. Barring a massive tax reform (which I support), rates are going up. Why not accelerate income to now, pay taxes that low rate, and invest money in municipal bonds? In some ways this is the Roth conversion strategy, but without the Roth IRA and its restrictions.

Example: draw $10,000 from a retirement account (if no tax penalty rate), pay 28% tax, buy municipal bonds at 5%. One receives $360/year tax free. If one leaves the money in the retirement account, investing at 5% and withdrawing the income, the result is the same $360 aftertax income. BUT by doing it NOW, one diversifies against the risk of higher taxes in the future.

If one's investments are heavily weighted to retirement accounts AND one can withdraw money without a 10% penalty tax, it make sense to do a little bit of that every year to balance one's investments and lock in today's low tax rates nd high tax free bond rates.

Word of the Day

"Louche" - adjective [$10] pronounded 'loosh', with the 'oo' long as in boot. [from French word meaning 'squinting']
Louche means disreputable, shifty.
Sentence: Are not most DC politicians louche douches?

Monday, February 14, 2011

Engage the People

The People are the ultimate power in the United States, and they are often a sleeping giant. Today, important decisions must be made to choose the path of the United States for the next century. The old path has become wrecked, littered with trash from past mistakes and barriers created over at least the past 40 years. We need a new path to a better nation and a happier people.

A Great Debate must begin and that Great Debate must involve the people in their towns and homes. Arguments must engage them and draw on their beliefs and ideas. We must stop thinking that the Ruling Classes and their media and bureaucratic allies will find solutions. They don't even know the questions and they certainly don't know where the people want to go. Most of them have no connection with the common man and woman for their entire lives.

Ronald Reagan wanted to lead America to be a shining city on the hill. He had a visions and could explain his ideas; America understood and followed. But America left the path upon which he started us.

The Crucial Question now is not, "What is to be Done?", but it is "Where to we want to Go?" What kind of society do we want to be in 40 years?

Without a national consensus on the goal - the endpoint - we cannot choose a path. That's how the world works. We know (or learn) where we are know and we must decide where we want to go, and then, and only then, choose an optimal path to get there.

The People must be involved in that decision. They must accept the goal. And by not just a majority, but by a super majority. The center mass of the people - the middle two thirds, need to be engaged in The Great Debate to reach a consensus on where we want to be as a people in 40 years. The fringe 1/6 on either side are simply left aside. The center 2/3 - the center of mass of the nation - will control its trajectory.

We reject "solutions" imposed by DC, its hegemonic class and their bureaucratic and media allies (such as the DC-centric "Deficit Commission"). The People meet to become involved in debates across the nation; the people should communicate with new media in thoughtful ways. Don't let the screeches by the fringes control the debate. Ignore them.

Where do we want to Go?

Let the Great Debate begin.

Word of the Day

"Vatic" - adjective [$10] formal
Vatic means prophetic, inspired.
Sentence: We need a national consensus for where we want to go, where we want to be in 40 years, whether it's created from vatic leadership or from gritty debates in our homes and towns.

Friday, February 11, 2011

Pay Policies

In my recent post, The Job Solution, some of the panoply of policies to increase demand for people were a few to increase equity in pay. Currently a cabal / clique / camarilla of the CEO club and their friends on Board Compensation committees control executive level pay and, of course, those hogs slurp down most of the food in the trough for themselves, elbowing out the common man and woman.

Today I highlight practical polices to shift more PAY towards the common man and woman. Some are repeats that I add a bit of detail to make their operation clear. Our goal: increase demand in the economy for people. We do this by obvious means: reduce the cost of hiring people, increase the cost of hogs, and make high level pay open and more under the control of shareholders.

I. No tax deductions for ANY compensation amounts over the US President's salary. Companies can pay the hogs, but no tax benefits. Effect: hiring a new person for $100,000 is cheaper than laying off people to replace with machines and increasing pay of the boss.

II. Any corporate pay (executive or otherwise) contacts providing for pay over $1 million must be approved in advance by the shareholders in a mandatory, binding vote by secret ballot. This will limit the number of votes and highlight the pay of the hogs.

III. For any negative vote, the Compensation Committee is fired and replaced by all new people, required to be shareholders of at least 1,000 shares and who must certify they have NO relations with the CEO and other Board members.

IV. All corporate pay over the US President's salary has clawback provisions, making THEM bears the costs of all those "non-recurring losses" they now like to put onto shareholders and lower level employee pay. Nowadays, they keep the pay and layoff people to "restructure" the company, in effect rewarding themselves for their mistakes. Stop this invidious practice.

All these policies maintain corporate freedom to reward performance, but shine the light of day onto that pay and make its determination truly independent and under control of the shareholders. Let's do this now.

Word of the Day

"Mistery" - noun [$1000] T. S. Eliot usage (among others); from usage of "Mister" obsolete, archaic and dialect.
Mistery means a general reference to 1. occupation, service, etc.; 2. office, duty, business, function; 3. employment, occupation, practice; 4. skill or cunning in a profession; 5. other similar definitions.
Sentence: We need more miserly pay for mistery in the executive suite.

Thursday, February 10, 2011

Back in the Saddle

I survived The Beast aka Manhattan, NYC. To this causal observer, business in the Beast must be good. The Grill Room at the Harvard Club was full at lunch, and the Tap Room at the Athletic Club was full for dinner even though the minimum period was over. People were spending money.

Men's fashions are a bit dour, still. A few colorful ties were spotted, but most men wore boring, drab neckwear. Few wore pinstriped suits either. Again, sadly, your writer was the best dressed man in the room. As usual, beautiful women admired my ties. When are the men of NYC going to start dressing a bit better?


Krypto wants me to buy some emerging market stocks. It's a decent signal, and on these down moves I hit the first signal and then wait. Down moves can be vicious; swinging at ever pitch can be painful. But the first one gets a swing and I will obey, likely via ETFs at the open.

There's a weak sell signal for gold+silver, too. I'll wait for a strong signal there.

Word of the Day

"Abduction" - noun [$100] Logic
Abduction means a syllogism whose major premise is certain but whose minor premise is probably.
Sentence: Much reasoning in life (investing, detective work, historical analysis, policy analysis) is neither deduction nor induction, but is abduction, where one starts with facts and creates a probable scenario / narrative that fits the facts to use in actions. Sherlock Holmes used abduction.

Monday, February 7, 2011

The New American System

"Things fall apart, the center cannot hold."

That quotation is from W. B. Yeats's poem, "The Second Coming". Modern American society is tending that direction, which would likely be a disaster for the nation. Society is bifurcating and has been for about 40 years. Recent posts here have documented the shifts in economic growth from the middle class to top; the middle class has obtained almost nothing from 40 years of "growth". The Great Recession has increased the bleeding, causing huge job and savings losses for people who have little hope of recovery, viz. the baby boomers approaching retirement. The billionaires, executive classes, their bureaucratic allies and entertainment figures have taken it all. While all that was happening, government grew enormously. It's part of the problem.

We need a New American System: a simpler, fairer system with more freedom and less government for the common man and woman.

Recent posts have outlined a new tax system, a health care system, a energy solution, a transportation solution, a debt solution, a jobs solution. This post focuses on government which connects to the other solutions..

The Federal government needs to be massively streamlined to focus on what's important to the people. Keep and expand what's important and get rid of the rest.

What is important? The five items below command huge public support.

1. Social Security as a core retirement program.
2. Health care (Medicare, medicaid AND health care for all).
3. National defense (very strong without bloat and corruption).
4. Social Safety Net: no one goes to destitution for bad luck or bad genes.
5. Debt for productive investments only.

Get rid of the rest of the Federal government, except simple information gathering programs for public distribution. We need to understand the nation and its parts and trends. Get rid of all the regulations and bureaucracy. Free people and business to create new growth in areas people want, not what is selected or dictated by the hogs at the trough.

I. Increase Social Security about 50% to provide about 1/2 of a reasonable retirement. This will be part of the Social Safety Net and support the happiness of the American people as they need not fear destitution in old age. People must save the rest.

II. Provide the National Health Shared Benefit that I've written often about here. This system provides good basic health care, not everything. People are free to spend more if they wish, but no one dies in the streets. The link between employment and health care is broken. Services are provided by competitive bids.

III. National defense must be strong to protect the nation. Our current military is very strong - superior to all others. It has a weakness, though. Too many military support functions are contracted out. The military needs internal support systems (supply, transportation, etc.) that can be expanded for longer wars, which DO happen, witness Iraq. Contractors will run when the shelling starts. Dedicated service people will not.

IV. The Social Safety Net must be strong so that people feel free to take risks to start new businesses, etc. We don't want them inhibited by a splat into destitution. That now prevents millions from being more entrepreneurial. "Benefits" are really shackles. Food stamps should be expanded in value and available to anyone at low income (no limitation to people with children) , but limited to the simple foods. People should not have to worry about starvation, but doing a bit of work in cooking should be expected. Some kind of housing must be available, too. The current housing glut can supply it. Create homestead programs to give the poor an incentive to take over abandoned housing and fix it up. The National Health Shared Benefit provides the health care. This system is a strong safety net.

V. Borrow with long term bonds to build out the nation's energy, transportation and communication grid-networks completely with structures consistent with the long term Energy and Transportation systems I've written out. This system will provide a strong skeleton for new national growth.

The tax reform solutions I've written about will both pay for this and help provide the shift in jobs and income growth towards the middle class.

We need to move towards this New American System now. I'll do my part in publicizing these solutions. I will soon collect these core posts into an indexed place where you can find them easily. Later I intend to publish these ideas in a printed pamphlet for sending out ... everywhere.

I'll be traveling to NYC Tuesday and Wednesday; no new post until Thursday.

Word of the Day

"Phthisis" noun [$10]; "Phthisic" - adjective [$10]; a T. S. Eliot word.
Phthisis means any progressive wasting disease esp. pulmonary tuberculosis.
Sentence: American society suffers from a social and economic phthisis grinding down the middle class and dangerously bifurcating society. We need to start the cure now.

Friday, February 4, 2011

The Deficit Solution

The Federal and State budget deficits are closely related to the prior three major problems, especially the Jobs problem. How many of you know that the Federal budget deficit is about 10% of GDP now (a huge increase over its "normal" level)? Putting 15% of the 20% of the workforce (3/4ths) who are unemployed and underemployed to productive work would likely solve that Federal and State deficit problem.

The Federal government wastes huge sums on agriculture subsidies, on education spending and on its payroll. Almost all federal programs could be eliminated and no one would notice.

I. Agricultural subsidies. Why do they exist? Get rid of the whole department except information gathering systems.
II. Education spending. Education was better in the 1950s and 1960s when the Federal government spent nothing on education. Keep only a student loan program.
III. Payroll. Pay and benefits of Federal employees is far too high. Those levels should be cut until the demand for such work falls.
IV. Military Retirement. Early military retirements should be limited to those serving in combat regiments - the people risking their lives. Supply another units would be eligible IF they are exposed to combat, proof being the respective combat badges. Otherwise, collection of retirement pay should begin at age 65.
V. Poverty programs should be consolidated into a simple Social Safety Net. Get rid of all those government social workers. The private sector does that better.
VI. The National Shared Health Benefit will eliminate most of the "Health" half of the Health & Human services Department. Item#V got rid of the other half.
VII. Apply the rules for military retirements in item IV to FBI and all other federal police forces.
VIII. Commerce department. You guessed it. Get rid of all of it except for the information gathering. Ditto the Labor Department.
IX. Stop defending the rest of the world. They now have the capability to defend themselves. Cut back to maintain effective alliances. Keep a smaller, but very effective military. Let Europe fight & pay for its own defense. Ditto Japan and Korea. Let all those places who want missile defense pay for its cost. Keep a strong Navy, Air Force, Army and Marine Corps, though. Keep technological superiority: spending on less than superior weapons is a waste.
X. Eliminate all foreign aid except disaster relief; its not much, but why isn't it zero?

Using debt is GOOD, though, for true investments: fair student loan programs; investment in superior military equipment; investments in parks and historic sites pay off with tourist dollars; investments needed for the Energy and Transportation Solutions. All those are necessary investments for our long term prosperity. DEBT IS GOOD if used for productive, important investments. US greatness was created by investments FUNDED BY DEBT. Alexander Hamilton proved that in the year of the founding of the nation. The US Constitution was created to help solve a pressing need for cooperative investments by states in water projects. The US highway system, the rail network, and the early canal systems were created by investments funded by DEBT.

Reagan's investments, funded by DEBT, in a superior military won the cold war and gave us all, and the whole world, incalculable benefits. Those planes, aircraft carriers, tanks, soldier training programs and missile defense research did it. The US had a budget deficit then, but it paid off.

Visceral rejection of debt is IDIOTIC. Focus on the spending and sell the long term bonds to fund good, long term investments.

All the cuts above combined the tax reform I have already written earlier will reduce Federal Debt to a rock solid, productive level.

What do we keep? What do we Increase?

That's for next week.

Word of the Day

None today; I overslept due to excesive snow shoveling work.

Thursday, February 3, 2011

The Job Solution

Unemployment and underemployment in the US is between 15% and 20% of the workforce. I favor the higher number because I suspect many, many people who could be productive and want to work simply believe that no meaningful work exists that can cover the costs of working. This problem took a catastrophic leap upward in the recent Great Recession

The Great Recession was caused by the Panic of 2008 which was in turn caused by the financial vikings on the Street and in the hedge funds; the hedge funds were funded by the wealthy wanting more money without making productive investments. But the causes are not part of the solution; they are mostly irrelevant.

The solution is ... a combination of policies, of course. No silver bullet.

The Job Solution

I. Stop taxing jobs, completely. That means no more taxes paid on employment income for Social Security, Medicare, unemployment benefits or any other direct or indirect tax on jobs. This will make the cost of hiring people much lower.
II. Eliminate the connection between health care and jobs. That bond prevents people from changing jobs to move on to either better jobs or starting their own businesses. It also increases the cost of employment enormously.
III. Social Security, Medicare AND a new National Shared Heath Care Benefit will be funded by a new Value-added or Sales tax on goods (especially imported goods) and many services (especially imported services). Consumers of imported goods and services now get a free ride - they are freeloaders. Make them pay a fair share to support the American System.
IV. Eliminate all tax subsidies for equipment and machinery (accelerated depreciation, etc.). Eliminate the overseas income tax loopholes. Eliminate tax loopholes for hedge fund managers.
V. Eliminate tax deductions for any compensation above the salary of the President. This will lower the costs of employing many people at middle income wages/salaries vs. the executive suite.
VI. Require compensation committees of corporations to have a majority of true outsiders nominated and drawn from the ranks of INDIVIDUAL shareholders. Require all corporate votes to be secret ballots.
VII. Require any incentive executive pay to have clawback provisions and to included the effects of ANY so-called nonrecurring losses. Require mandatory stockholder votes to approve ANY incentive plans offering pay in excess of the President's salary. These votes are binding. For any plan that loses, the compensation committee is fired and a new committee is formed.
VIII. Require any corporation wishing to bring in immigrants for so-called "hard to fill" jobs first offer the job broadly at a 10% pay increase AND offer job training for any special requirements; provide an arbitration board to protect against unfair or excessively tailored job descriptions.
IX. Eliminate all Federal & State regulations that kick in at some number of jobs, like 50. Those hold down the number of jobs and encourage using high paid employees supported by machines, vs. simple jobs for more people.
X. Eliminate the R&D tax credit and replace it with a Job Training credit.

All these policies will lower the cost of hiring people and increase the demand for people vs. machines. that's what we want. And it frees the entrepreneurial energy of millions of people stuck in dead end jobs with "benefits". The Job Solution will permanently lower the unemployment and underemployment rates. Entrepreneurs will be more free to hire people as hiring becomes simple and direct, with no red tape. The cost of replacing people with machines goes up. By equating the W-2 worker with the 1099 worker, employers will want to hire more people to lock in their services; there will be NO benefit to keeping people on 1099 contracts.

Education is part of the job problem. It's also part of the transportation problem. I will address those matters next week.


Any global warming Kool-Aid crowd: check this out ->

A data stake into the heart of AlGore's propaganda machine.

Word of the Day

"Mimetic" - adjective [$10]
Mimetic means relating to or habitually practicing imitation or mimicry; 2. (Biol.) of or relating to mimicry.
Sentence: The American "leaders" must stop acting as being mimetic is not patriot; stop the "not-invented-here" syndrome. We have a lot to learn from GERMAN employment and education practices. GERMAN unemployment fell to a record low not seen since reunification in 1990. Let's analyze GERMAN policies to see which can help here.

Wednesday, February 2, 2011

The Transportation Solution

Yesterday's Energy Solution goes a long way towards solving transportation problems by providing a good source for transportation's energy requirements. But congestion is another dimension of transportation's problems.

The skies are getting full. The highways around major cities are jammed messes many hours of the day. Going in and out of major airports now takes a half hour or longer, and adding security delays, one can easily waste two hours or more on the ground waiting, walking, etc.

Truck traffic on major intercity highways can be extremely dense. Delivery trucks in major cities can fill the roads at permitted times of the day.

Exurbia - the sprawl - around major cities causes more delays and travel as major and minor shopping areas are scattered everywhere, making little chance for trip management. The linear connections (point to point trips) in a growing urban area grows at least quadratically or more, causing more travel time to balloon. Travel time is a waste.

Have you ever heard the comment, that "one would have to drive halfway across the county to find something"? I grew up in a mostly rural county in Ohio - a very typical county - that was 30 miles across the wider dimension. Halfway across is 15 miles. Yet that's how far people living in Exurbia have to travel often simply to get some bread or gasoline or post a letter or go to a bank.

The whole system of urban sprawl and our transportation system is reaching a brick wall of waste from inefficiency, travel costs and congestion. We need a national policy in transportation and communication to relieve the pressure. Yes, communication, too, since simple electronic, Internet communication can eliminate some travel.

The solution to the short term problem of congestion must be consistent with the long term Energy Solution provided yesterday, we we are simply digging a deeper hole.

The solution is, of course a combination of several methods.

I. Reserve air travel for longer trips when ground travel time would be too long.
II. Move more heavy truck traffic to trains. Require freight train systems to adapt to multi-modal systems to allow more smaller truck operators to access trains for long haul freight. If necessary, fund station improvements to make access easier and more timely. Require major train corporations to improve service and make more timely deliveries and provide more access to rail cars.
III. Use powers of eminent domain to assist train systems to become more efficient. Override environmental objections by sending them to national arbitration boards and get that mess out of the courts.
IV. Fund national access to fiber optic Internet service: anywhere connected to a US or State highway or even a county road gets access either by hard wire or shorter range Wi-Fi or Wi-Max.
V. Require cell phone companies owning digital spectrum to provide services withing ten years withing a few miles of such places as listed in item IV. No more use of public airwaves for limited private systems. Make providing a national system a condition of the licenses. Item IV and this item V will help unify the nation as did the rural electrification program of the FDR years. Use existing road or rail rights of way to build the system.
VI. Create regional passenger rail networks in logical regions with enough major cities. Piggyback on the existing rail network and if necessary, use eminent domain to expand it logically, along existing rights of way. If you lay a nation like Germany, England or France onto a map of the US, you will immediately see this will work and remove a huge amount of demand from the highways and airports. Rail works. Europe proves it. China is proving it. Just build the system out by expanding the existing system and OVERRIDE environmental objections by logical arbitration boards.
VII. Fund all this by sale of Federal and State transportation long term bonds. Rates are cheap. This spending - on rail and Internet and cell systems - is a TRUE investment in America, on investments that will pay off hugely. But it need Federal and State powers to override all those petty local and environmental objections. Solve those problems with community boards that are both empowered and required to make decisions in reasonable times.
VIII. Stop urban sprawl. Communities need to grow internally, providing nearby shopping areas in concentrated places like ... Main Street. Then people will be able to shop and obtain entertainment and service with those cheap, short range electric vehicles that I wrote about yesterday.
IX. Start electrifying the rail systems: at first the system will be multi-fuel. Over the next 40-80 years, those trains will need to be run by electricity [See yesterday's post on the Energy Solution]. We know that works - it already exists in the Boston-NYC-Washington Corridor.
X. Rural areas around major cities should be agriculture and recreation zones; large and small farms growing fresh fruits and vegetable with organic technology will supply the people in the major cities. Buying co-ops could provide a secure market for these products. Why are these products grown in California or Mexico and expensively shipped to NYC or Chicago or Boston. That's nuts.
XI. With a better transportation and communication system, small town & small city economics improves. Factories there will have the public systems of support by highways, rail, Internet and cell services. Main Streets and nearby shopping areas work better for the nation than regional Wal-Marts. Those places are so dependent on cheap oil and gasoline that is going away in a few generations. Stop them. Put resources towards concentrating people (voluntarily) in central cities and small town and cities, and improving connections between them End sprawl now!
XII. Stop building new highways except for short connections between existing highways and between nearby cities where only a few miles of road improvements would improve the transportation grid.

My recent trip to Atlanta brought to my eyes how dependent and fragile the current sprawling urban cities are in America. Without cheap gasoline, they could collapse economically. The European rail system DO work. The rail systems around NYC do work. Millions of people use them daily. I've used them. Rail communities move thousands of people safely and quickly along dedicated corridors. Rail is superior for moving people among nearby major cities. I do it - it works and is better.

Anyone looking at a map of the MidWest can see that a regional passenger rail & piggyback truck network connecting Chicago-Detroit-Cleveland-Pittsburgh-Columbus and Indianapolis makes sense. That area is smaller the Germany. All we have to do is COPY the GERMANS and do it, overriding the greenie nuts. Similar regional systems are obvious in Texas, the core South from New Orleans to Miami to Atlanta, California (San Diego to LA to SF to Sacramento), the Mississippi areas of Missouri, Kansas and the southern east cost. The build out will be along existing rail lines and stations. We fund it with long term bonds. [More on this in future posts.]

I could write more, but the general parts of this plan would solve our national transposition problems and provide us with the infrastructure and living areas that lead to happier lives in true communities. We can do this, provided we keep the viking hogs and greenie nuts from bollixing it up for their own agendas.

The above solution mix will solve both the short term and long term Transportation problems for America in a manner consistent with the Energy Solution provided yesterday. Those two together are real solution, not an imaginary one similar to those of the DC bloviators..

Word of the Day

"Apprehend" - verb, transitive [$10]
Apprehend means 1. understand, perceive; 2. seize, arrest; 3. anticipate with uneasiness or fear.
Sentence: Any thinking person driving around a city like Atlanta or Columbus can not apprehend that without cheap gasoline, the city's economy would collapse.

Tuesday, February 1, 2011

The Energy Solution

The most important long term problem facing America and the entire world is energy - low cost energy. Forty years ago the problem began to be noticed, and the screechers and crypto-fascists screamed about running out of oil and natural gas. We are still not running out of either, BUT world annual demand IS bumping strongly against available annual supply availability. There is no slack capacity to keep costs down long term and prevent huge spikes short term.

For oil, the huge old oil fields are running out and production is declining for them. Higher cost sources are making that up, but where is the supply to replace them? The world is nearly fully explored; very high cost sources in the deep water field on the continental shelf are now being drawn. In forty years, they will, too, have weakening production.

Natural gas supplies are now very large as new technology made shale gas available at low cost. But those fields run out fast, requiring more and more fracturing. LNG brings much "orphan" natural gas to market. But demand is growing fast; where will all these be in forty years?

Forty years is the useful life of a well-made building. That's the proper horizon for governmental planners - those RESPONSIBLE for an energy policy. Of course, they are now doing nothing.

Peak oil theory was misnamed; the correct name is "the oil plateau". Annual production simply stops growing fast, not as fast as demand at a price. Hence, prices rise and spike with short term demand (such as from crowds of speculators, as in summer 2008). Those short term spikes cause havoc on people and national economies. That is the short term problem.

We need an energy policy that solves the short term and long term problems and is fair to the common man and woman.

Some facts (from memory):

1. Over the next 40 years, oil & gas production will plateau. Demand will rise as third world nations' demand grows.
2. Prices will slowly rise, with many spikes upward.
3. Higher prices will bring more difficult sources of hydrocarbons into production, such as oil shale. Already, tar sands are economical if natural gas prices are low enough (natural gas is needed to heat the tar to extract the oil).
4. The plateau can be stretched to perhaps 80 years. That means one lifetime. Remember, 80 years ago was 1930, certainly in our collective historical memories.
5. Coal can supply energy for electrical production for hundreds of years.
6. Nuclear power can supply energy to thousands of years, IF proven breeder reactor technology is used. By the way, France uses this technology. The nuclear waste is reprocessed and "burnt" in the breeder reactors.
7. A breeder reactor makes more fuel that it consumes. The reactor burns uranium 235 in a manner that also convert plentiful uranium 238 to plutonium 239, which IS a nuclear fuel, too. Breeder reactors can also convert even more plentiful thorium to usable forms of uranium; China just announced it is contractuing such reactors. From memory, energy from such reactors can make energy for tens of thousands of years. That is a long term solution.
8. We need transportable energy for transportation. Electrical power can be used in low power cars for short haul transportation. Electrical power can make hydrogen for use in fuel cells: fuels cells combine hydrogen with oxygen to make electrical energy.
9. For many decades, people will need a personal transportation vehicle. The structure of current urban sprawl mandates this. But we don't need or want more sprawl.

The Solution

Don't even think on one solution. The world does not work that way. Policy types and demagogues bloviate about their own "silver bullet" solution, but they are often just pushing their own private gravy train. The world works by combined solutions at all levels from the atomic level to the national economic level (see post of October 27, 2009).

We use a combination of the above in a changing mix to solve both the long term problem and the short term problem.

I. Begin building breeder reactors. They are the long term solution. Use the electricity for base power initially.
II. Continue using coal for base power.
III. The above keeps base electric power costs steady and low, with electric supply reliable.
IV. Use now-plentiful natural gas for peak electrical power demand spikes - those hot summer days.
V. Start shifting new building codes to promote electric heating in New England and other areas that use fuel oil now. Use electricity for cooling. Over time, do similar conversions is areas heated by natural gas.
VI. Start promoting small electric vehicles for short term trips: shopping in town, nearby malls, errands, trips to the post office, or beer store. Change zoning rules to promote charging stations. Use nuclear and coal power to keep base-load power cost low - this keeps recharging costs low. Over a generation, the two car family becomes one regular car (likely an SUV) and one or more smaller electric cars.
VII. Over time, use that cheap base load power to make hydrogen. A regular SUV running hydrogen fuel cells can have the power and range for a normal family car. This transition will take 20-40 years. But over time it can be done. By the way, the transition from horse power to gasoline power took 40 years, too.
VIII. Use coal to make kerosene to power planes and heavy trucks. I suspect electrical power has problems providing enough controllable energy with sufficient density to power airplanes and trucks (we need trucks for local deliveries). Perhaps rockets can be adapted for subsonic flight, but I don't know. Such rocket planes might not be economical due to the weight of the fuel carried ompared to the payload. Rocket trucks? Forget about it. I do know one can make kerosene from coal; the Germans did it in WW II. That proven technology will work for hundreds of years. Also, use coal and natural gas to make the plastics and petrochemicals the world economy needs.
IX. Use zoning to reduce urban sprawl slowly. Bring back small towns and communities where those small, electric vehicles are very, very useful. This also cuts the costs of delivery of products bought online and all other deliveries to stores, etc.
X. Over 40-80 years, America becomes an electrical nation, not a gasoline or natural gas powered nation. Much electrical production will go the make hydrogen from fresh water and sea water. Coal will continue to make kerosene for planes and heavy trucks and petrochemicals for centuries. Eventually, they will use hydrogen, too. Energy will remain cheap and plentiful and living standards can be high for thousands of years. The transition period will pull enough demand off oil to keep its cost from excessive peaking. Pollution falls as clean nuclear power replaces most of oil use.

The above ten points are a solution to the energy problems facing America and the world on both the short term and long term. We simply need a coherent, integrated policies adopted to bring all the parts into the solution. And we need to keep the greenie nuts and viking hogs OUT.

Word of the Day

"Nigh" - adjective [$10]
Nigh means being near in time, place or relationship; close.
Sentence: Catastrophic energy shortages are more nigh than most think. Without policies using now-proven technologies, the next couple decades is almost certain to bring economic disaster.