What's wrong with this picture?

Another thing ... what is this about having to do something, anything before Congress goes on vacation? What's wrong with their staying in session until they get it right this time ... like the rest of have to when a crisis hits us.

This whole scenario is so absurd ... we are facing the equivalent of an economic Pearl Harbor -- according to a number of credible authorities -- and the US Senate passes a pork laden Paulson-Bernanke bailout plan so they can go home as early as possible?

What's wrong with this picture?!

On reversing the meltdown ...

There is only one strategy that will reverse the meltdown ... in my opinion ... and the sooner we get there, the better.

It is following Ireland's lead (as I understand it anecdotally) and put the full faith and credit of the United States behind our banks and their issuing of debt -- at least home mortgages. Something like the way the FDIC works ... with adequate regulation ... and having ENOUGH fees to pay for any losses ... AND an experience rating system so banks that make faulty loans are charged higher fees.

Our home mortgages are the strength of our communities, hence an underlying pillar of our nation. And the combined economic strength is more than enough to recover from the greed of Wall Street ... without paying those criminals one more penny in bailout money.

Now the caveats/disclaimers: I do not think it will be as simple as that ... but I am writing in the bloggosphere trying to provoke thought ... to encourage tossing anything related to Secretary Paulson's bailout plan on the dung heap and then working something out around the Ireland plan.

I will be emailing my Congressperson, the Honorable Donald Payne, and asking him to vote "NO" on this bailout bill, noting that I have strong opinions on it.

It is un-American to cave with a gun to our heads.

Let's see if we have the grit to get this right.

A Napolean-like retreat out of the Middle East?

It is becoming obvious that the problem with the economic meltdown is the foreign investors who were told their investments in these instruments were safe because they were backed up by credit default swaps types of debt insurance ... which is now a huge "oops!"

If there is a run on that stuff ... by those people ...

Whew! Americans would have to start growing their own vegetables, darning their socks, walking to the store ...

We would not be able to drive to the mall and go shopping like before!

That might be seen as funny ... but a collapse of our economy might also leave our military forces stranded in the Middle East ... anybody remember reading about Napoleon's retreat out of Russia?

No wonder Secretary Paulson went on bended knee in front of House Speaker Pelosi ...

The $700 Billion bailout - Part II

I don't think we know yet whether this is a bailout or a blip on the slide into banana republicanism ... there is a lot more we should be finding out ... like ...

According to Time Magazine the world economy is annualized around $54 Trillion ...

According to Bloomberg News the credit default swap (CDS) industry is around $62 Trillion ...

And the way I am beginning to understand is that a CDS is what allows a financial institution to carry a questionable instrument of debt -- such as subprime mortgages and bundled credit card debt -- on its books at full asset value ... (even when that instrument of debt is about to go in the tank ... because the CDS is supposed to pay off on default)

So ... if CDS's start going south ... as in what happened to AIG ... then the world has to revalue the instruments of debt they carry on their books as assets ...

So ... the perfect example is Lehman Bros. ... as I understand it ... it was leveraged at 35 times its capital ... see, assets = liabilities + capital ... so say you have $36 Billion in assets then you have $35 Billion in liabilities (what you have borrowed -- from creditors -- to combine with you put in as capital to buy the assets) plus the $1 Billion in capital -- your own money -- (this is an example, of course, the amounts are representative)

So ... the value of the assets goes south by 5% or .5 X $36 Billion = $1.8 Billion ... this means you now owe your creditors $ 800 Million ... which is a manageable amount in terms of getting new capital ...

But what if the assets start going south by 10-20-25% ... or like what is happening now: 50-75-100%? and everybody's assets are going south at the same time?

And what if this then also triggers a collapse of the CDS industry?

Don't we have to have some idea of what the CDS industry is insuring if we are going to figure out whether the $700 Billion is a bailout or a blip?

These geniuses keep saying these are "derivatives" that are too complicated to understand ... I don't think so, IF they are forms of insurance for questionable instruments of debt.

I think the gurus don't want to explain them to us because it would scare the bejabbers out of the rest of us and they wouldn't have a snowball's chance in hell of getting the money they think they need to escape the collapse.

But I could be wrong ...

Upon reflection ...

Let me tell you when I realized the size of the $62 Trillion credit default swap industry relative to the $54 Trillion annualized world economy ... I took a deep breath.

I believe Secretary Paulson and Chairman Bernanke are playing Col. Jessup: "You can't handle the truth!"

We need a whole lot more honest information.

The $700 billion bailout ... are they kidding us?

With this proposal, Paulson has abandoned hope of holding financial-sector players responsible for their mortgage disaster and is instead intent on distributing those losses to taxpayers. The problem is, it's not clear what the government is buying or what the ultimate price tag will be. -JRacioppi, NJVoices

Right on target, Joe!

And not only that ... we have yet to find out what is hidden in the $62 Trillion credit default swaps (amount per Bloomberg news today) ... up from $900 Billion in 2001 (can you BELIEVE it?!)

Repeating myself, you have hit the nail on the head ... this is a scheme for taxpayers to bail out the global financial sector players who got us into this mess ... and I would add: apparently before the $62 Trillion credit default swaps debacle hits the skids ...

Listening to Paulson and Bernanke this morning ... I could feel a chill creep over me. These two are dissembling (the kindest thing I can say) ... and to me it seems obvious.

I sent the following email to the Senator Dodd's Senate Banking (...) Committee:

Two things:

1. It seems to me that Secretary Paulson and Chairman Bernanke are using people's fears over their retirement funds and mortgages to hide the problems in the $62 Trillion credit default swap industry (amount per Bloomberg news today).

2. I couldn't believe my ears when I heard Chairman Bernanke say we couldn't limit executive pay because they then might not participate in the bailout, letting their companies fail instead.

These two are the problem ... looking to them for a solution is leting the fox guard the hen house.

Let me see if I understand these credit default swaps (CDS) ...

They are a form of insurance ... highly profitable to the issuers up to now ... depending how the rate of default ... which was calculated as relatively manageable ... up to now ... when the sub-prime mortgages went in the tank ... meaning that sub-prime default's could bring down the whole $62 Trillion CDS thing ...

See ... the brilliant global financial sector mathematicians calculated the default risk as manageable with big payouts to the "insurance" salespersons ... so they took their fees upfront ...

oops!

So ... the REAL problem seems to be that if the mortgages go south ... they exceed the CDS inndustry rate of default and the $62 Trillion CDS industry goes south right behind it ... now THAT is going to be exciting!

Will the $700 Billion stem the southward flow? I don't think anyone knows for sure.

Anyhow that's how I would look at it ...

What's more ...

It seems obvious that the reason that Secretary Paulson and Chairman Bernanke want unrestricted flexibility in the use of the $700 Billion is that they do not KNOW where the money needs to go to stave off the collapse of the $62 Trillion CDS industry ...

Now THAT would explain their urgency and fear ...

The problem then becomes of their not being up front with us or Congress ... apparently because "they know what is best for us" and "we can't handle the truth."

And without transparency we don't know if this will work.

So what they are really telling us -- in my opinion -- is that if the plan is not approved, the $62 Trilllion CDS industry will in all likelihood fail ... and if it is approved, we don't know whether it will fail or not.

And Paulson and Bernanke want us to trust them?!

OK, that being said ... let's take another look at the credit default swaps (CDS) ... because from my pov, unless we get a handle on the risk involved in these things we don't know whether the the $700 Billion bailout will work or not ...

See, apparently CDS's were sold as insurance without the "experience" analyses of rates of disability, morbidity, mortality, fertility and other contingencies as in the forms of insurance with which we are more familiar. The actuaries (specialized mathematicians) used SOMETHING to calculate the rates for selling CDS's. The Senate banking committee looking into this mess should be asking for the THAT information ... to determine just how big a scam has been perped by the global financial sector gurus.

I would suggest that they based the rates on a guess with an eye toward how much they could generate in fees and bonuses, and NOT on anything real ... and if that can be proved, isn't it fraud? or shouldn't it be?

I mean, if you paid life insurance to an insurance company only to find out the company was going bankrupt because it had not set aside enough to pay off your policy ... but had paid its salespersons and executives high salaries, fees, and bonuses ... and then asked your heirs to take out a loan to pay off your policy?

And somebody actually thought this was a good idea? ANY kind of idea except bad?!

I hear America singing ...

Once again the elites controlling the two parties as factions of one political system have found issues that divide we the people ... and these issues divide us BECAUSE they are major issues ... life and death issues ... what could be more major than that?

In the meantime our elite ruling class -- the global financial services sector gurus -- ship our labor enriching jobs offshore and offer us instruments of debt on inflating assets in return.

When are we going to wake up? We're being suckered in a Three Shell Monte game of distraction ...

Think of it ... China's architects, engineers, ironworkers, tool and die machinists, operating engineers, welders, mechanics, maintenance mechanics, etc., etc. etc. are building their experience ... raising their foundation of skills ... while ours atrophy.

The global financial services sector gurus are so far removed from experiencing the existential fact of earning one's living by the sweat of one's brow ... in both physical and mental labor ... that they cannot value its worth ... and have given our storehouse of labor wealth away as if it was worth nothing ... a storehouse stocked with experience and skills acquired in the industrialization of WWII in defense of our nation and the '50's under Eisenhower and his federal highway program ...

Take one example ... creating a workforce able to creatively handle work with exotic metals ... necessary to build with them ... requires a long, active apprenticeship with those metals. We've GIVEN those jobs away.

Our global financial services sector gurus are really "brilliant idiots" on the economy ... but they have mastered Karl Rove politics to keep themselves in power, enriching themselves ... by dividing us.

By the way, Senator (Common Man) Joe Biden is in the pocket of the Delaware credit and banking corporations -- in my opinion. But I wouldn't vote for McCain and an extension of Bush world if my life depended on it.

I Hear America Singing
Walt Whitman (1819–1892). Leaves of Grass. 1900.

I HEAR America singing, the varied carols I hear;
Those of mechanics—each one singing his, as it should be, blithe and strong;

The carpenter singing his, as he measures his plank or beam,
The mason singing his, as he makes ready for work, or leaves off work;
The boatman singing what belongs to him in his boat—the deckhand singing on the steamboat deck;
The shoemaker singing as he sits on his bench—the hatter singing as he stands;
The wood-cutter’s song—the ploughboy’s, on his way in the morning, or at the noon intermission, or at sundown;
The delicious singing of the mother—or of the young wife at work—or of the girl sewing or washing—Each singing what belongs to her, and to none else;
The day what belongs to the day—At night, the party of young fellows, robust, friendly,
Singing, with open mouths, their strong melodious songs.


http://www.bartleby.com/142/91.html

Y'know ... a few months from now ...

Y'know ... a few months from now (not even years, let alone decades or centuries) the new wizards will be 'splaining to us how "we" allowed "that" bunch of brilliant idiots (the global financial services sector) to transfer our productive wealth (which is the real source of modern wealth -- the historical sources being property, natural resources, and SLAVE labor) to China ... and thereby giving their workers the opportunity to learn the skills our workers perfected in establishing our extraordinary manufacturing base in WWII and the Eisenhower years ... while our workforce was allowed to atrophy.

I have nothing against Chinese workers becoming skilled, but not by the direct transfer of the production capability that our workforce had as much a hand in creating as anyone else including the financial gurus ... without so much as a fare-thee-well to our workforce.

(Doesn't anyone stop and think about what the free workforce and citizen military of these United States accomplished in WWII? ... that our current leadership is pi$$ing away?!!! Turning us into a banana republic.)

I think it's this obsession with money as if "money" were a commodity.

For the middle and working classes our strength has never been "money". It is skill in the production or distribution of goods and services that have value (others want in exchange for what they have to offer us) in the marketplace ... a marketplace that has sensible rules, by the way, like standard weights and measures.

If government -- as one of its legitimate functions -- safeguards an orderly market for its citizens, free citizens will do the rest. (Like, why are so many businesses and citizens leaving New Jersey, Governor Corzine?)

We are selling (giving away?) the seed corn ... labor skills that are a huge part of what makes ordinary people free ... because they are valuable to employ. Of course, we need a nation that protects the rights of free labor as much as it protects the rights of property ... which does NOT necessarily mean unions (or what unions have become, rather).

The current crop of brilliant idiots ... 3rd and 4th generation removed from labor ... have no appreciation of the stored wealth in labor's skills ... so they blithely give it away. They are so dumb I would laugh, but they are so weakening our nation by their ignorance that it makes me want to cry.

Housing, housing, housing ... wages, wages, wages

Housing, housing, housing ... wages, wages, wages

And with the middle class no longer earning enough to pay the mortgage ... or the heating bill ... or the fuel cost of the commute ... the handwriting is on the wall ... banks and GSE's (government sponsored enterprises such as Fannie Mae and Freddie Mac) involved in mortgages are going to continue failing until the economy adjusts to what people CAN afford.

Which is a whole lot less than before because the chickens are coming home to roost in high oil prices exchanged for shipping our jobs offshore.

While the cost of everything has been escalating, the wages paid labor are stagnant or falling. We the people can no longer afford our previous lifestyle. And we don't know yet how low we are going to sink in this recession/depression.

And because there is no end in sight (or even imagined) to the real decline in wages ... this IS GOING TO GET UGLY before it is over.

We are not getting out of this one by printing more greenbacks or extending credit ... creating more instruments of debt aka instruments of death to an economy overburdened with them.

We need the production of goods and services having real value in global trade ... out of which labor earns a fair share to pay for a middle class life.

Anything else is smoke and mirrors.

The fact is that many new homebuyers have lost whatever equity they had even if they made reasonable downpayments with what were at the time reasonable terms ... and then have just been laid off by General Motors or whatever. The chaos being caused by the loss of the purchasing power of home equity PLUS the drop in wages -- both in the aggregate (to say nothing of the pain for the individual family) -- is a double-whammy body blow to the US economy.

And what is so disheartening to me at least, is that our fearless leaders have not yet begun to talk about solutions that come close to doing the job of turning the situation around. They are still acting as if all we have to do is take a deep breath, print more money, and issue more instruments of debt to the very enterprises that created this mess ... and the US economy will correct itself on its own ... after they gutted it totally in their globalization schemes.

Kevin Phillips has been giving us chapter and verse on what's been going on ... so we can't say we weren't warned.

We've been squanderng our kids future

Kevin Phillips has a new book out titled Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. Kind of punctuates the greedy insanity of our global financial sector brilliant idiots.

How in heaven's name (anyone else's?) did we get sold a bill of goods that if borrowed to buy stuff we would be building a strong economy? Essentially that we could borrow our way to prosperity. It's nuts.

And on top of that we are participating in one of the greatest transfers of wealth in the history of the human race ... due to the speculative frenzy in oil futures ... which in turn is due to the FACT that the globe is awash in US dollars that have to find a "hedge" against inflation ... which in turn is due to the fact that the government cronies (Treasury Department, Federal Reserve Board, ... U.S. Senate ... ) of our global financial services sector wizards are "printing" money faster than we ever thought possible ... because the whole house of cards they are trying to hold up is too big to allow to fail ... even though we all know it is going to.

And when you think of where our dollars are going for the petroleum products we use ... such as Saudi Arabia, Iran, Russia, Venezuela ... even if not directly ... and their sovereign accounts which can then be used to buy up our national assets ... this is not only crazy, it is traitorous -- in my opinion ( ... which is why I agree with blarneyboy about hanging our speculators from streetlights.)

We are being lied to on so many fronts ... the Consumer Price Index (inflation) has been "adjusted" ... the rate of unemployment is not a true measure of the unemployed ... and talk about our federal deficit:

What's the real federal deficit?
By Dennis Cauchon, USA TODAY,Updated 8/4/2006 9:55 AM ET

The federal government keeps two sets of books.

The set the government promotes to the public has a healthier bottom line: a $318 billion deficit in 2005.

The set the government doesn't talk about is the audited financial statement produced by the government's accountants following standard accounting rules. It reports a more ominous financial picture: a $760 billion deficit for 2005. If Social Security and Medicare were included -- as the board that sets accounting rules is considering -- the federal deficit would have been $3.5 trillion.

http://www.usatoday.com/news/washington/2006-08-02-deficit-usat_x.htm

Our kids are already shaking their heads at how shortsighted we've been ... squandering their future ... selling our birthright of liberty for another shopping trip to the mall ... and now money we spend on the gas we use to get to the mall goes to sovereign accounts so they can buy the malls where we shop ... brilliant!

It's time to lay the Grand Old Party to rest

It's pretty damn obvious that the Republican Party has knowingly participated in the deliberate shredding of our Constitution.

The president swears to the following oath "in accordance with Article II, Section I of the U.S. Constitution:"

"I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

http://memory.loc.gov/ammem/pihtml/pioaths.html

We all know there has been a deliberate attempt by the Bush 43 adminsitration to subvert the Constitution of the United States ... and those in the Republican Party who were not leading in the subversion, were acquiescing ... except for a few like Senator Chuck Hagel.

If we could get the Libertarian Party to focus more on those things we hold in common — like a functional government we can afford — and less on the peripheries — like legalizing marijuana — I think we could properly bury the GOP.

Save Bear Stearns and starve the world's poor

When Bernanke (the Federal Reserve Chairman) decreed that we would no longer be getting figures on the M3 money supply as he opened the floodgates on money ... where did we expect all the dollars to go when we weren't watching?

Is there any wonder why the price of oil, rice, etc. is going through the roof?

"Bernake's" money has found a home in commodities futures ... dah!

The Federal Reserve has "saved" Bear Stearns and given the U.S. economy a brief respite ... but at what cost to the world's poor?

Time to End "Bernanke Panky?"
By Kevin Phillips
Posted June 2, 2008 | 05:24 PM (EST)
The Huffington Post
http://www.huffingtonpost.com/kevin-phillips/time-to-end-bernanke-pank_b_104769.html

Republicans have a lot to answer for ...

So how did the Republican Party leadership allow George W. to call himself a conservative and then ...

• Entangle us in the occupation of Iraq for five long years with no end in sight

• Run up the national debt by not even trying to balance the budget with no end in sight

• Continue the selling of America to foreigners with no end in sight

and so on and so forth ...

Let me put it to you straight ... if you vote for a Republican then you need to have your head examined.

If you don't like the Democrat ... then get involved with another political party. But Republicans? You're kidding, right?

Scott McClellan's epiphany ... is What Happened

Scott McClellan is the alter boy who finally realizes he's been sexually abused by his beloved priest.

He is the person raised as a true believer who discovers his guru was lying to him all along ... and using him ... and then mocking him.

He's the kid in junior high who gets suckered by the smart kids into carrying their water and then made fun of ... the humiliation is deep and lasting.

Scott was dumb enough to believe in George W. Bush ... well past the time when there was enough evidence to discredit the president ... but rose colored glasses are not easily removed from someone like Scott. It took a brutal act of betrayal ... on the part of people Scott looked up to and trusted ... Rove, Libby, and Cheney.

It takes time to assimilate this profound betrayal within one's psyche. Then there is the act of catharsis ... Scott wrote a book. Others go out and shoot somebody.

There is nothing puzzling about this. It fits the facts on the ground.

We need a new word for somethings we call taxes

"Tax" covers a lot of mischief, but it also is supposed to work when we talk about sharing in a common endeavor. It actually has too much negative baggage (rightfully so) to cover that wide a spectrum of meaning. But we have to use the word, whether it carries unintended connotations in our minds or not. For now, let's try to think past the negatives.

A gas tax to cover the cost of maintaining the streets and roads we the people drive on makes sense. If we drive a lot we'll need to keep up the streets and roads more than if we drive less. It also makes sense when it becomes obvious that we have to wean ourselves from petroleum-based vehicular energy. (Peak oil, anyone?) Do we prepare for the future or forget about it?

Again, a carbon "tax" carries the negative connotations of the "tax" word. My view is that we should think about the carbon tax as a reasonable attempt by reasonable people (anyone else been reading The Age of Reason by Thomas Paine?) to assign a cost to an externality (look it up) when the so-called "free" market is not very good at recovering the costs of externalities ... which is why they are called externalities, because the free market doesn't pay for them ... which is why we joke that the free market is great a capitalizing profits and socializing costs.

Just to dismiss a concept out of hand because it carries the omni-negativeness of the "tax" word ... well, it's not too smart. We have to move into the future ... and figure out how to pay for it ... as well as the wreckage of our past. We can't immigrate to another planet ... at least not yet.

Maybe we should come up with a new word for those taxes that actually work by paying the costs of a better life.

If we are being lied to ...

Does anyone not believe we are being lied to by our leaders public and private?

The Consumer Price Index as "the"inflation measure has been "adjusted". Unemployment stats are so far off the mark as to be laughable.

Our political candidates openly pander to us.

And maybe the worst lie of all is that all we have to do to turn the economy around is buy more stuff. Go shopping!

Is that crazy or what? How are we going to pay for it?

Oh right, the global financial wizards/gurus will invent new instruments of debt so we can borrow what we need to be able to buy what we want.

Need I tell you, this is crazy.

Acquittal!?

"A Queens judge on Friday acquitted three detectives charged in the shooting of Sean Bell, who died on his wedding day in a hail of 50 police bullets."

http://www.nytimes.com/2008/04/26/nyregion/26bell.html

Sean Bell is shot to death
in New York City
outside a strip bar
at four A M.

By the police
firing fifty shots

Sean Bell wasn't the one
the police thought had the gun.

Only the police had guns.

Fifty shots!

One police officer emptying, reloading, emptying ...

blam
blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam
reload
blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam-blam

Thirty-0ne shots among fifty shots!

Only the police had guns.

Sean Bell wasn't even the one
they thought had the gun.

Acquittal?!

Are you kidding me?

Note: I will research the testimony on the sequencing of the 31 shots by the police officer who emptied his gun then reloaded to be able to keep firing. It is the dramatic heart of this poem ... -hgl

An Easter Update: Thoughts on religion

Religion is our encoding of our tribal identity in ritual, liturgy, and dress allowing us to recognize friend from foe, particularly among strangers. A particular religion involves both the concept of perfection — or God — and the concepts of how best to meet the challenges we have identified as replicable in the human experience of existence, as well as what they mean and why they occur.

Note: I am most familiar with the Christian religion, and I have been reading in Buddhism off and on for most of my adult life. (But I am certainly no authority on Buddhism, and merely claiming personal -- rather than scholarly -- familiarity with the Protestant Baptist version of Christianity.)

The leading "thinkers" in human history have realized that there is a "standard instruction set" encoded in our biochemical processes that guide the organization of our perceptions and thoughts as well as the responses to them. Religious thinkers identify this "standard instruction set" as ordained/given by God.

For example, we have learned that we treat those we recognize as friends different than we treat those we recognize as foes, and that we automatically are wary of a stranger until we determine the stranger's status, and we know from experience that a tactic of an enemy is to get their foe to let their guard down by considering the enemy a benevolent party to the engagement ... a la the Trojan Horse.

What I find most appealing about theoretical Christianity is that it invites all human beings to explore friendship through a commitment to the concept of Jesus as perfection. And I find the concept of Jesus as perfection to be an ideal that offers the most hope for humanity to live in peace. The traditions of the Judaic-Christian religion heritage provide the admonition to progress from our "isness" to our "oughtness", ever mindful of the dynamic tension in the struggle. Although I must say, the evolving interpretation of Christianity by many politically dominant religious leaders has not proven to provide the best path toward peace, nor was King David of the Old Testament a particularly peaceful leader. (Note: I do not believe that a "God" exists in the meaning of "God" expressed in the Christian Bible.)

I accept the challenge of the struggle to become what I believe I ought to be. And that it is my commitment to my concept of human perfection, to my "God" ... which in itself is dynamic ... that identifies me as a "religious" person, and my "religion" is the path I have identified to follow in my commitment.

This all melds back into my understanding that my existence -- coming out of the evolution of human existence -- preceded my awareness of my existence, and that -- therefor -- my awareness is organized by my existence folding back upon itself ... so that I am capable of choice ... which is an essential characteristic of the an intelligent life-form. I can, in fact, choose to learn how to choose based on reason.

I would even suggest as worth examining, the idea that it is the concept of an ideal of human perfection in the form of God that initiates choice because as reality unfolds/evolves, whatever God was defined to be carries with it the limitations of past experience, never able to anticipate all that we will learn about ourselves and our world in the cosmos. The cosmos continues to surprise us. Even adding "omni" to our God's attributes does not drown out the call to our renewal of choice in the face of new experience, as Joshua challenged the Israelites in the Old Testament, "Choose you this day whom ye will serve." - Joshua 24:15, KJV Blue Letter Bible. 1996-2008. 24 Mar 2008. http://www.blueletterbible.org/kjv/Jos/Jos024.html#15

Confronted with the dialect of "isness" vs. "oughtness" -- individually within each of us -- we are thrust out on the unfathomable (we do not know were we go with any certainty) depths of the awareness of our individual existence to choose, and through our actions express our faith in a path ahead. Even choosing to do nothing is a choice.

For example, I can decide whether a stranger is a friend or foe or nothing of note ... and then what to do about it, or not. I can decide to learn how to make friends of foes, or not, and then decide to go about doing that, or not.

And because I can imagine a better world, I can choose to try to bring that better world into existence, or not.

I believe the most fundamental choice is whether I act to benefit myself irrespective of the effect on my community/tribe, or I act to benefit my community/tribe irrespective of the effect upon myself.

Christianity teaches that the first option, or greed, is the root of all evil, and that the second option, or the giving up of one's own life for others, is the greatest love we can have. And in framing our options it circumscribes our choices as Christians.

The vaunted MBA mantra that acting to benefit myself provides the greatest benefit to my community goes tilt upon any reflection beyond the statement on the surface.

Christianity also proposes that all humans God's children, are destined to become friends.

That addresses my Christianity, my existentialism, and my atheism. What is left is to consider my transcendentalism ... which to me is simply that my awareness transcends my concept of God ... because God is the product of my past awareness and present reality unfolds in the present into the future as a dynamic process of adaptation based on the past correctly anticipating possibility emerging in the present but never "knowing" exactly what is in store.

Ah yes, deregulation ...

"Deregulation" was the buzz-word ... the group identifying slogan aka tribal dress of the moment ... right up until the sub-prime mortgages started falling apart. We are now re-examining the meaning and worth of "regulation" ... surprising how many times we can re-invent the wheel, don't you think?

What is "regulation"?

As the noun "regulation":

1. a law, rule, or other order prescribed by authority, esp. to regulate conduct.
2. the act of regulating or the state of being regulated.

"regulation." Dictionary.com Unabridged (v 1.1). Random House, Inc. 14 Mar. 2008.

As the verb "to regulate":

1. to control or direct by a rule, principle, method, etc.: to regulate household expenses.
2. to adjust to some standard or requirement, as amount, degree, etc.: to regulate the temperature.
3. to adjust so as to ensure accuracy of operation: to regulate a watch.
4. to put in good order: to regulate the digestion.

"regulate." Dictionary.com Unabridged (v 1.1). Random House, Inc. 14 Mar. 2008.

Starting with the basics, we regulate weights and measures, minimum-maximum limits such as highway speed, minimum qualifications such as education plus experience plus licensing exams. These forms of regulations most of us would recognize as positive "influences" on the our communities, and we quickly can imagine negative outcomes if they were removed.

The common denominator for positive regulatory outcomes is that each can trust the other to perform as expected in a given transaction ... which dramatically increases the efficiency of transactions, thereby adding measurable to the value of the regulation. If one can process a thousand transactions in the time it would otherwise take to -- let's say -- process ten, the savings per transaction is huge ... adding tremendous value to the use of the regulation.

Take for instance if we now have to examine every child's toy coming into the USA from China for lead, the increase in cost for those toys will become staggeringly high.

When the customer doesn't have to bring their own measuring cups and tapes to the store to assure the accuracy of the amount of goods being purchased; when the driver doesn't have to play bumper cars on the freeway in order to travel; ... and when the borrower doesn't have to wonder if the lender is disclosing the real terms of the loan to the borrower's level of understanding -- in other words, can once again trust his/her local banker without the help of a lawyer.

Yes, the more complex the transaction, then it is conceivable that the regulations should reflect the level of impact the failure of trust will have on the community. It is one thing to have a three shells and a pea game of chance to be taking place in a back alley, and quite another for homes to bought and sold based on a similar shell game.

However, regulations can also interfere with the efficiency of transactions. Some of the most egregious of these negative impacts stem from politically based bureaucracies imposing fees and restrictions with the clear intent to reward a political party/entity ... especially the party/entity that historically benefits most from an increase in government employees, paid for by the increase in fees.

The speed traps along highways that interrupt the smooth flow of traffic to generate the local town's revenue through tickets to non-local drivers.

Here in New Jersey we recently defeated a strong effort by the Governor to pay the costs of a State government engorged with new employees beholden to the Democratic Party with a turnpike asset monetization scheme euphemistically titled "Governor Corzine's Financial Restructuring and Debt Reduction" plan.

One more thought ... for the deregulation tribe ... the most efficient safeguards of the public interest are the rights of the whistleblower to be protected in his/her job combined with an actively vigilant and independent press.

Note: This post was written in response to a discussion I had yesterday evening with a brilliant young college student over free market concepts. I continue to think about the relevancy of the cogent arguments she made. I respect her point of view enough to explain my own in response.

The day the debt came due

Joseph Racioppi posted this in a column of his titled Subprime mortgage mess just a symptom of what ails us on NJ Voices yesterday, Monday, January 21 — Martin Luther King Jr. Day — when Wall Street was closed:

Our entire economy is debt based. The Federal Government is in debt $10 trillion. New Jersey is in debt billions and billions and many Americans are "maxed out" on credit cards. Rather than addressing the problem of a debt based economy, our leaders try to find more ways of continuing the spending that runs the economy. When our leaders, after September 11th, tell us to "go shopping", that says a lot.

This was my response for today, Tuesday, January 22:

How prescient of you, Joe. This may be the day the debt comes due.

The above the fold main story on the front page of the NY Times this morning was headlined: Awaiting Wall Street's Open, Asia Market Plunge.

The lead paragraph read:

"Stock markets across Asia plummeted again on Tuesday, and European markets saw volatile trading, as anxious sellers worried about the global ramifications of a slowdown in the United States."

Here's the link: http://www.nytimes.com/2008/01/22/business/worldbusiness/23cnd-asiastox.html

It's going to be an "interesting" day: "The Day the Debt Came Due"?

Do you think we the people will finally get it ... as Pogo told us: "We have met the enemy and he is us" ... or will we in more typical fashion start looking for scapegoats?

Personally? I'm rereading Thomas Paine's Common Sense ... and it is making a lot of sense.

Need I add, "Duh!"?

Hoo boy!

The New Jersey Star-Ledger poses this Q&A in its editorial, Foreign money to the rescue, January 19:

"Is foreign investment a bad thing? It is not."

This was my comment in response:

That's like asking if drinking water is a bad thing. Depends on how much you drink. Too much water and you upset your electrolytic balance, the brain swells, and you die ... or something like that.

Let's start with some economic basics that the common person can understand. (I have to do that because I am not an economist and I have never read one who has ever gotten economics right over time outside of tightly controlled models ... which is kind of like pouring sand through a funnel into neat little cone-shaped mounds on a beach on a windless, sunny day below the high-tide mark and thinking they are going to last ... but I digress.)

First, if you don't produce something of real value, you are not creating wealth. Money has no "real" value, it has "virtual" value relative to its ability to help exchange things of real value between strangers ... close and far. Money has value if the two parties to a transaction using money BELIEVE the pieces of paper they are using has the exchange value (translatable into real things of real use value -- like food that actually keeps us from starving to death) printed on it ... or something like that.

Now if you take something of real value and you auction it off to people who want it (think it desirable and worthwhile to own, like a house -- hint, hint) with an excess of money to spend (either their own or what they can borrow ... 'cuz that's the job of the Fed to insure we have enough liquidity to get the things we want 'cuz we're a nation of consumers), they will in all likelihood pay more for it than they would have otherwise. If they then turn around and get even MORE money for it than what they paid because others in turn bid higher with the extra money they have or can get ... well, the PRICE of that something will go up. Do I have to say, "DUH!"?

Let's not get too complicated here ... if a nation reduces the amount of real things of value that it produces ... and starts a bidding war on the things of value it does produce ... while the Fed keeps printing money so we can all bid as high as we want for something ('cuz -- you guessed it -- we're consumers now!) what do you think the outcome will be?

And you have economists with mathematical models who tell us this imbalance of real production to virtual wealth is what is real? and can continue indefinitely? and folks fall all over themselves BELIEVING it when they see with their own eyes that the real wealth of our nation has been deteriorating ... while the dollar amount (virtual wealth) of the money supply has been growing?

And now that our money has been siphoned off to the oil producing nations and the goods producing nations because our vaunted economic leaders thought it better to pass along windfall profits in a "free" market rather than "tax" ourselves for our own rational benefit ... you say there is nothing wrong here because this is the way the "free" market is supposed to work?

And I'm not supposed be laughing until I start crying?

From my notes about Milton Friedman and the so-called "free" market:

Milton Friedman, the guru of profoundly influential monetarist and laissez-faire ideas of the past few decades has pulled the plug on free markets ... maybe without realizing it.

From NPQ, the New Perspectives Quarterly:

Free Markets and the End of History

Friedman | ... "Free markets" is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. But that isn't the fact. The fact is that, most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. There are some good economists like Gary Becker and Bob Lucas who are working on these issues. This reality ensures that the end of history will never come.

Intrepretation: Because transactions using the medium of money ALWAYS affect a third party, there is no such thing as a "free" or "unfettered" market in terms of the customary definition of the economic term. The reason for this is the clear fact that all costs incurred in the production and distribution of goods and services are not paid for out of the monetary selling price of the goods and services ... only the reimbursement of "ownership" costs ... so what is "free" about free markets is their being free of the costs they incur to others than the legally defined owners of the goods and services for sale--sellers and buyers.

http://www.digitalnpq.org/archive/2006_winter/friedman.html

Read that again: Because transactions using the medium of money ALWAYS affect a third party, there is no such thing as a "free" or "unfettered" market in terms of the customary definition of the economic term.

Need I add, "Duh!"?

Y'know, if something is too complicated for us common folks to understand ... when it affects our daily lives ... then we probably should figure something else out ... because the brilliant idiots are gonna screw things up trying to get more than their fair share of the real wealth ... which as the Good Book laid out: greed ... aka the love of money ... is the root of all evil.

All us working folks are asking is to give us the opportunity to go to work and create real wealth, and then be paid our fair share of what we have helped create. That's pretty darn simple. You'd think these geniuses could figure that out. Or ... could have figured out how not to screw it up.

Got a lot of "Duhs!" in this piece.*wink*