Monday, November 29, 2010

David Brooks vs The Liberal Technicians; i.e. Paul Krugman is Wrong

In his recent Op-Ed piece, The Two Cultures, David Brooks takes a look at a new economic study of stimuluses’, which comes to the conclusion that they work best with countries that have low debt, fixed exchange rates and closed economies and not countries “like the U.S. with high debt and floating exchange rates.” Unlike Germany, the United States economy is intimately tied to it’s trading partners by overseas manufacturing of US products. Therefore while an $800 billion stimulus might seem to leave a “large footprint” considering the US $14 trillion GDP, “it is hard to find in a $70 trillion global economy.

Another observation by Brooks parrots my article The Immaturity of Obamanomics. Here Brooks points out the futility of trying to scientifically quantify human behavior and spending habits, “The liberal technicians have an impressive certainty about them. They have amputated those things that can’t be contained in models, like emotional contagions, cultural particularities and webs of relationships. As a result, everything is explainable and predictable. They can stand on the platform of science and dismiss the poor souls down below.” The issue of course is adhering to Keynesian dogma, such as “liberal technician” Paul Krugman. Keynesian models and projections are simply speculative fairy tales, but the likes of Paul Krugman refuses to take his head out of the ground to look around at the real world. Brooks writes, “If the government borrows trillions of dollars, this will increase public anxiety and uncertainty, the conservatives worry. The liberal technicians brush aside this soft-headed mush. These psychological concerns are mythological, they say. That’s gaseous blathering from those who lack quantitative rigor;” this statements pretty much defines every Paul Krugman article I have ever read, or I’m sure he has ever written.

So what is the answer? Well it’s pretty much the opposite of anything Paul Krugman espouses. In the real world you don’t borrow money to reduce the debt. Only in the fantasy of Keynesian macroeconomics, is this considered “a brilliant and aggressive stimulus (model).” It’s what you think it should be. Government cannot create jobs nor will it ever make a profit. In order for the government to receive higher tax revenues, it needs to promote job creation, not raise taxes. This means drastically cutting government expenses and leaving as much capital in the private sector as possible. If there is one area that government can improve is to rein in the naked derivatives market. Since the repeal of Glass-Steagle, the money that was traditionally used to buy stocks and bonds has been invested in these made up instruments, leaving American business grossly under funded; in Germany they have already been outlawed; “When you look around the world at the countries that have come through the recession best, it’s not the countries with the brilliant and aggressive stimulus models. It’s the ones like Germany that had the best economic fundamentals beforehand.

On might remember that it was Paul Krugman who loudly denounced Germany’s conservative stimulus and austerity, which subsequently boosted their economy to the most robust in all of Europe, contrary to Krugman’s statement, “The key point is that while the advocates of austerity pose as hardheaded realists, doing what has to be done, they can’t and won’t justify their stance with actual numbers — because the numbers do not, in fact, support their position (the numbers Krugman talks about are made up Keynesian numbers).” As I said in Germany Proves the Keynesians Wrong, they were indeed right and Krugman was indeed wrong, just as he is always wrong.

In the final analysis we are left with the obvious, that as much as it was been advertised, you can’t reduce human behavior to a Newtonian equation; human reaction is much closer to Chaos Theory, which produces a pattern but is not necessary predictable. Brooks observed that liberal technicians view “psychological factors like uncertainty and anxiety really are a mirage. The first time a business leader tells you she is holding off on investing because she is scared about the future, you dismiss it as anecdote. But over the past few years, I’ve had hundreds of such conversations.”

As I have said so many times before, Keynesian theory is accepted by those who view government as the answer to society’s problems. Rather than accept the fact, that limited government with reasonable regulations allows the free market to find it’s own level and prosper, Keynesians want constant government influence, unwilling to accept that the economy would work better without it’s interference. Brooks ends with this; “It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don’t have to be a genius to come up with an economic policy like that.” It’s like the law of supply and demand; as with gravity, it would exist whether you recognized it or not and is not so easily manipulated.

Friday, November 26, 2010

TSA and the German Corn Field

The following article was posted in the “As you see it” portion of the Santa Cruz Sentential, with follow-up remarks on Newspaper’s blog.

The Transportation Security Administration is making flying much more dangerous, not safer. The reason is obvious: If they are forced to search 100 percent of the passengers, they will certainly become careless if for no other reason than the monotony and fatigue . They are searching uniformed soldiers, small children, grandmothers, pilots, stewardesses, flight attendants and frequent fliers who they know are not terrorists, which will not only make them complacent, but they end up viewing their job more of a preventive measure, than actually believing they will find a terrorists (if they accidentally found a terrorists they would probably urinate all over themselves). All that is necessary is to identify all these fliers plus 90 percent of most domestic passengers through tickets sales and several times again prior to entering the secure part of the terminal. Add to that behavior profiling, such as what's done in Israel, and the TSA could render air transportation truly safe and concentrate on the 1 percent of fliers whose behavior or background truly makes them suspect. Instead of searching the haystack one piece at a time to find a needle, use a magnet.

Poster: Well for starters, Israel has ONE primary international airport - I'm sure we could do a great job too if we could concentrate on ONE airport...

Response: There is no reason if something works well at one airport it could not be done at 100 airports. This does not mean the US would want to use the Israeli model unchanged, but since the US model prior to the full body scanners and enhanced pat downs worked for 10 years without a hitch, we could add some of the Israeli techniques to improve security without relinquishing our rights to privacy just so Rapidscan can sell billions of dollars of scanners; ex-Homeland Security Secretary Michael Chertoff was pushing the use of full body scanners starting in 2005, then shortly after he retired in 2009, Rapiscan became a client of his consulting Chertoff Group; both are making huge profits from this sweetheart deal. Once again all you have to do is follow the money

Poster: Israel successfully uses racial profiling; this wouldn't work in America because people are more concerned about their civil rights being violated than they are about their own physical safety.

Response: If Americans cared more about their civil rights than safety, they would not allow TSA's enhanced searches without probable cause, violating their 4th Amendment rights. The concept of racial profiling by Israel is also false; over 20% of Israel’s population is Arab, and they certainly do not view 1/5 of the passengers as threats. Yes the fact that a person is a Muslim male in their 20's is a factor on their threat scale, but their behavioral profiling (not racial) and background checks are the brunt of their screening processes. The idea is to look for terrorists not devices. Racial profiling is a red herring thrown out by an overreaching Homeland Security that has made a bogeyman out of al Qaeda. The only changes that have made anyone safer since 911 have been securing the pilot's cabin and the knowledge that passengers will no longer let terrorists take control of an airliner. The so called justification for the naked body scanners is the Underwear Christmas bomber, who it turns out was allowed to board the airliner and circumvent the security measures in Amsterdam by what was later admitted by the US State Department as their screw-up, which means no one has been able to breech US Airline security since the first Christmas bomber, Richard Reed Dec 21, 2001. So it's been 10 years since a suicide bomber has smuggled a bomb onto a plane and without the use of enhanced pat downs and naked body scanners. What has become obvious is al Qaeda has run out of suicide bombers who have the sophistication to board an airline with a bomb; if this were not true, they surely would have done so by now. We know have to worry about body cavity searches, and mobile body scanners with TSA "viper teams" to be used at train and bus stations, and perhaps mall near you.

(added here for reference is an article from TSA Searches; are Trains and Subways next? )

From TSA head John Pistole, “Given the list of threats on subways and rails over the last six years going on seven years, we know that some terrorist groups see rail and subways as being more vulnerable because there’s not the type of screening that you find in aviation,” Pistole said. “From my perspective, that is an equally important threat area.

Added by the article's author Kurt Nimmo, "It may not be long before you are forced through a naked body scanner or obliged to have your genitals groped in order to visit the local market to buy food and necessities. Considering the trajectory the TSA and the government are on, you may have to submit to a body cavity search at the local mall.

(continuing with my response)
From, "They Thought They Were Free", about the rise of Nazi control in Germany"

"To live in this process is absolutely not to be able to notice it—please try to believe me—unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must some day lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head."

Thursday, November 18, 2010

Airline Security; Isreal Gets it Right, TSA Doesn't Get It

All the rhetoric we have been hearing from Homeland Security and their minions are more concerned with maintaining an obviously flawed, but financially lucrative direction. The inherent flaw in the America airport security system is it creates a false sense of security by relying on a narrowly focused (and imperfect) technology, that has limited human input and is always one step behind the terrorists. The only reasonable way to stop terrorists is to screen out the vast majority of obvious non-threat passengers, using background checks, so searches become threat based. You still screen 100% of the passengers, but only a small percentage actually get searched. There is perhaps nothing more absurd than the concept of random searches, which have no logical bases and is definitive of an incompetent government bureaucracy that has lost the trust of the people. Here you have bureaucrats that are so rigid and unyielding that they actually required pilots to be searched. Is there anyone that has forgotten that in the 911 attacks the weapons were the airliners themselves? What were the pilots going to do, take themselves hostage with a smuggled penknife? It is interesting to note, that in Israel the citizenry do not take these freedoms for granted as we do in the United States and still demand their government treat them with dignity and even intelligence.

50 years ago the Israelis faced the same safety issues America has been facing since 9/11. The first salvo was much the same as ours, but the reaction was much different. In his article, "The Israelification of Airports; High Security, Little Brother,” Cathal Kelly discusses the Israeli approach to airport security with Rafi Sela, the president of AR Challenges, a global transportation security consultancy. "Israelis, unlike Canadians and Americans, don't take s--- from anybody. When the security agency in Israel (the ISA) started to tighten security and we had to wait in line for — not for hours — but 30 or 40 minutes, all hell broke loose here. We said, 'We're not going to do this. You're going to find a way that will take care of security without touching the efficiency of the airport."

What Israel devised was a 6-layer system that is hands down the world standard for safety. As you enter the parking lot, Israeli security agents contact you in your vehicle and simply ask each person two questions, “How are you? Where are you coming from?” But the security agents are not just being friendly; they are paying very close attention to your answer. If there is anything wrong with the way you answer you are detained and separated from your luggage. Further military service in Israel is compulsory, so every security person you talk with is not only highly trained in airport security, but also a veteran soldier. When any Israeli agent converses with you, they are looking you straight in the eye; something that while being bit unnerving, leaves no doubt that they are paying attention to everything you say and do.

Next you are directed to the airport building where there are armed guards at the entrance. These guards, as those in the parking lot are behavioural profiling. They look for someone in distress, someone who does not look right, someone that is displaying any one of a laundry list of behaviors they have been trained to watch out for. “At this point, some travelers will be randomly taken aside, and their person and their luggage run through a magnometer. ‘This is to see that you don't have heavy metals on you or something that looks suspicious,’ said Sela.”Once you are inside you go to the check-in counter. Passengers are staggered so they don’t bunch up (one of the biggest complaints of the current American system by security experts is the damage that could be done by a luggage bomb detonated amongst the hundreds of passengers that are often waiting in roped off blocks in the check-in lines). Here you asked a series of questions, “Who packed your luggage? Has it left your side?” Your luggage is moved to a specially deigned baggage area where it is scanned. “The screening area is surrounded by contoured, blast-proof glass that can contain the detonation of up to 100 kilos of plastic explosive.”

The last check is for passengers and carry-on. But there are no conveyor belts, no body scanners, no enhanced pat downs. Just security officers watching you and scrutinizing your mood and behavior, "’… there's almost no line. That's because they're not looking for liquids, they're not looking at your shoes. They're not looking for everything they look for in North America. They just look at you,’ said Sela. ‘Even today with the heightened security in North America, they will check your items to death. But they will never look at you, or how you behave. They will never look into your eyes ... and that's how you figure out the bad guys from the good guys.’”

Once in the airport lounge it looks no different than any other airport. But there is a difference. Every employee from the Starbucks girl to the janitor are also trained in some form of behavioural profiling. If they see anything that doesn’t look right they are encouraged to report it; any one in the lounge, employee, passenger or security can lock down the airport; and unlike anywhere else, they are encouraged to do so. If anyone sees something that doesn’t looks right and they hit the shut down button, they are always praised, never degraded for being too paranoid.

So yes there is a better way to secure an airport than treat the passengers as if their Constitutional rights are suspended every time you get near an airplane. But there is another issue that is rarely addressed and that is competence. I have watched TSA workers go about their job and most are what you could call “professional” but none really appear competent. If anything occurs out of the ordinary (and I use the term loosely), it usually results in having to call a supervisor and then an administrator. In a recent incident made famous on YouTube a passenger, John Tyner opted out of the scanner and took exception to the enhanced pat down (who could have guessed that would ever happen?). The result was organizational idiocy were the police were called, one supervisor told him to leave the area, then an administrator was called who told Tyner he broke civil law for leaving and would be fined (Since TSA is not a law enforcement agency, all their actions are controlled through civil authority. Apparently there is a civil law that once a person has opted out of the full body scan, they must not leave the screening area without being screened in some manner. Since they have no law enforcement authority the TSA agents can’t detain or arrest anyone, all they can do is fine. The idea is to stop a terrorist from leaving the screening area for fear he will be discovered, but one has to wonder about the logic that an al Qaeda terrorist would actually stop for fear of being fined).

Michael J. Aguilar, chief of the TSA office in San Diego, later called a press conference to emphasize that Tyner was in a lot of trouble and assured everyone his actions would lead to prosecution and “civil penalties” of up to $11000. The next day however the head of the TSA John Pistole said John Tyner would not be fined, saying the agency is "trying to be sensitive to individuals issues and concerns," but added, "the bottom line is, everybody who gets on that flight has been properly screened." Unfortunately Pistole notion of "properly screened" is defined narrowly by his boss Janet Napolitano, who seems to have been bought and paid for by political corruption and conflict of interest that includes ex-Homeland Security Secretary Michael Chertoff pushing the use of full body scanners in 2005 while the manufacturer Rapiscan became a client of his consulting Chertoff Group shortly after he retired in 2009.

The Israelis have shown us, and the world that safety can be achieved while preserving personal freedom and privacy. As I said before, the end result in America has been a complete lack of trust that our politicians are competent or has our best interest at heart; or even worst, that our government has become a separate entity, independent from the will of the people, who is either incapable of keeping up safe, or refuses to do so without us trading away some of our most basic human rights. Seal seemed to sum it up when he said, "Do you know why Israelis are so calm? We have brutal terror attacks on our civilians and still, life in Israel is pretty good. The reason is that people trust their defense forces, their police, their response teams and the security agencies. They know they're doing a good job. You can't say the same thing about Americans and Canadians. They don't trust anybody.”

Monday, November 15, 2010

Stephen Hawking's God Like Fine-tuned Universe

When one looks into the discussions of creationism vs evolution, there is always the contingent that wants to show that science can somehow be used to prove creationism. This is not a belief of mine and I think it is a general waste of time. My view of the scientific method is after one constructs a hypothesis, the rest of the process is primarily aimed at disproving it (all scientific theories will be eventually disproved). But what is learned disproving theories is what moves science forward. Therefore, if a person like myself does believe in creationism, then they know that science will likely never really catch up with such a complex issue; meaning the two are not in conflict, but science as we know it is just too limited. However, there are some aspects of Stephen Hawking “Fine-tuned Universe” that seems to fall far short of his self-described atheists views and it’s similarities to the creationists and Intelligent Design.

One of the major overlaps between Intelligent Design and Fine-tuned Universe is that rather than our planet being fragile and in of careful need of stewardship even to the point of trying to protect the climate from over warming, Earth is a robust planet, fine tuned for life, and rather than being easily thrown off kilter, it is intensely self correcting, always re-balancing to abundantly support life. In his new book “The Grand Design”, Hawking seems to go out of way to prove this point.

*“The discovery recently of the extreme fine-tuning of so many laws of nature could lead some to the idea that this grand design has a Grand Designer…True, the laws of the universe seem tailor made for humans.”

*“Many improbable occurrences conspire to create Earth’s human friendly design… We need liquid water to exist, and if the earth were too close (to the sun) it would all but boil off; if it is too far it would freeze…(or) even a small disturbance in gravity…would send the planet off it’s orbit and cause it to spiral into or away from the sun.”

*“It is not only the peculiar characteristics of our solar system that seems oddly conducive to the development of human life, but also the characteristics of our entire universe-and its laws. They appear to have a design that is both tailor made to support us and if we are to exist, leaves little room for alteration…The forces of nature had to be such that heavier elements- especially carbon could be produced and remain stable…Even that is not enough: The dynamics of the stars had to be such that some would eventually explode, precisely in a way that could disperse the heavier elements through space.”

*“(At the atomic level) if protons were just 0.2% heavier, they would decay into neutrons, destabilizing atoms, again of course making all life impossible…(So) most of the…laws of nature appear fine tuned in the sense that if they were altered by only modest amount, the universe would be…unsuitable for the development of life…The laws of nature form a system that is extremely fine tuned.”

The proponents of Intelligent Design has used these exact arguments to prove that it would be mathematically impossible for all this fine-tuning to exist were there not a “Grand Designer” and interestingly enough Hawking’s agrees. But this is where he ventures far beyond Acom’s razor. Where Hawking goes with this is the theoretical physics M theory. Without going into is parent String theory, Hawkins explains that there was not just one Big Bang, there was an infinite number of big bangs, each one creating a separate universe. So in order to explain the complexity of the universe and the fine-tuning toward life, Hawking’s has reconstructed the quote that if you gave a million monkeys typewriters and set them to work, they’d eventually come up with the entire works of William Shakespeare, or out of an infinite number of Universes, one would be fine-tuned for life. You also have the Big Bang Theory, which interestingly enough has also been embraced by Intelligent Design due to its commonality with God suddenly creating something out of nothing. What I find most interesting about Hawking is he really doesn’t dispel the belief in a God, as long as God does not violate the laws of physics. And while I don’t claim the intelligence to truly dispel Hawking’s , one is still left with the bigger question as David Misialowski asks,“Why is there something rather than nothing?”

*Thanks to Rene Schlaepfer of Twin Lakes Church for the Hawking's quotes.

Saturday, November 13, 2010

Has TSA Finally Crossed The Line With Enhanced Punitive Pat Downs?

Arrogance and and the over reaching of an ever increasing police state, may soon be the undoing of the TSA and Homeland Security. Once again Americans are faced with the issue referred to by Benjamin Franklin when he said "people willing to trade their freedom for temporary security deserve neither and will lose both." Here the issue is also about privacy, a right so intrinsic to freedom, that absent privacy, freedom can not really exist. The most frequently quoted statement by a Supreme Court justice on the subject of privacy comes in Justice Brandeis's dissent in Olmstead v. U. S. (1928):
"The makers of our Constitution understood the need to secure conditions favorable to the pursuit of happiness, and the protections guaranteed by this are much broader in scope, and include the right to life and an inviolate personality -- the right to be left alone -- the most comprehensive of rights and the right most valued by civilized men. The principle underlying the Fourth and Fifth Amendments is protection against invasions of the sanctities of a man's home and privacies of life. This is a recognition of the significance of man's spiritual nature, his feelings, and his intellect." There is a price to living

What has become obvious to most Americans, is that the TSA and the Federal Government has crossed the line in the American psyche the separates need for security and right to freedom. While the supposed rational behind the Full Body (or Naked Body) scanners is to protect flyers from terrorists, it has becoming more common knowledge that the likelihood of terrorists using a plane for terrorism has diminished greatly as a result of 911. In a 2008 article Jeffery Goldberg quoted security expert Bruce Schneier, “Transportation Security Administration, which is meant to protect American aviation from al Qaeda, represents an egregious waste of tax dollars, dollars that could otherwise be used to catch terrorists before they arrive at the Minneapolis–St. Paul International Airport, by which time it is, generally speaking, too late…. Counter terrorism in the airport is a show designed to make people feel better,” he said. “Only two things have made flying safer: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.” This assumes, of course, that al Qaeda will target airplanes for hijacking, or target aviation at all. “We defend against what the terrorists did last week,” Schneider said. He believes that the country would be just as safe as it is today if airport security were rolled back to pre-9/11 levels. “Spend the rest of your money on intelligence, investigations, and emergency response.”

Interestingly this over stepping of our 4th Amendment right to be free from governmental unreasonable search and seizure is a result of political correctness and a rather casual reading of the 14th Amendments equal protection under the law clause. In other words, the government would rather violate the right to privacy of the vast majority of non-Muslim Americans, than hurt the feelings of a minority of Muslims . While profiling Muslims may sound patently unconstitutional, one must remember so are full body scans and “enhanced pat downs” searches without probable cause. Profiling is only unconstitutional if it is arbitrary. The difference is the Federal Government has decided that the emergency circumstances that allow the violation of our Constitution rights, are better served against the majority of Americans then the minority of Muslims (be they be American citizens or not). The TSA already has what they call threat-based screening for those from a country of interest such as Afghanistan, Algeria, Iraq, Lebanon, Libya, Nigeria, Pakistan, Saudi Arabia, Somalia and Yemen, and four countries the US regards as state sponsors of terrorism: Cuba, Iran, Sudan and Syria. But as a result the absurd thought process of the TSA, these screenings are considered controversial, and the frequency of these threat-based screenings are determined by world intelligence threat assessments. After 911, Israel offered to assist the United States in these form of threat based screenings that have been 100% successful. But the US refused, preferring to individually screen every flyer; this is lunacy.

Americans are actually rather prudish people. Not only are their proxemics, or zone of personal safety larger than most other societal norms, they don’t liked to be touched by strangers and they like to pick and choose who gets to see them naked. If there is a defining action by the TSA it is their enhanced pat-downs. And it’s not they are more intrusive, which they are, but it’s their stated purpose. The TSA has let it be known that the enhanced pat downs are not for enhanced security, the pat downs have been enhanced to make the passenger that has “opted-out” of the full body scanner feel so violated that they dare not opt out again; in essence the TSA has become one of the most oppressive arms of the federal government our country has ever known and is now punishing Americans for not wanting to do things their way. On cannot name one other Federal Government agency that is so draconian that it is trying to enforce its policies with physical pain and psychological trauma.The TSA has already stated that the next stage is portable full body scanners for shopping malls and schools; this of course would be the end of liberty and freedom in our country. It needs to stop. Will we be opting-out some security? Yes. Will there be a greater chance of a terrorist’s successful attack? This of course is unknown, but some of the best anti-terrorists say no. The reason is simple, we now no more about al Qaeda than they know about themselves. America has the technology to stop terrorism short of stripping everyone naked as the Nazi’s did. Let me repeat Benjamin Franklin one more time, "people willing to trade their freedom for temporary security deserve neither and will lose both." There at two ways airline security and within this country are likely to go; the United States can continue on this path toward greater tyranny by assuming every person is equally suspect, or it can move toward the Israeli model that believes the 99% are innocent and spend your resources fretting out the minority that is the true threat. One thing is for sure, the very nature of government is to control the governed and what ever freedom you give up for a questionable promise of safety will not be given back without a fight. Further the fight to retain a freedom will always be easier than the fight to win back a freedom.

edited 11/16/10. After writing this OpEd it was brought to my attention that Janet Napolitano has repeatedly stated that the enhanced pat downs are not done for punishment. While it has been documented that Napolitano is continually at odds with the truth, I will include this article by Charlie Leocha from Consumer Traveler. The article, TSA Admits to Punishing Travelers (one of many from different sources) was written back in August and is self explanatory.

The Democrats Lost the House Because They Gave Us Two More Years Of Bush

The Democrats did not loose the House because they managed to get the car out of the ditch, it was because they sat there spinning the wheels, burying the car to the wheel wells and then claimed we were out of the ditch; well were not out of the ditch. Here is what you missed, the Republicans under Bush 43 where a fiscal disaster, but the Democrats did nothing to reverse the trend. Obama has ramped up the war in Afghanistan for nothing more than political expedience. Bush seemed oblivious to Katrina and Obama seemed oblivious to the Gulf Oil Spill. What is rarely mentioned is the TARP money Bush loaned to the banks has been repaid with interest, but Obama, rather then returning the money, showed the repayment as income, in a sense paying for his stimulus with repaid TARP money; just more fiscal irresponsibility. The Democrats claimed to fix the cause of the economic melt down with there Financial reform, but did nothing to rein on Fannie Mae, Freddie Mac or the derivative market that caused it all.

Next, the American people have finally had enough with the big lie of the Keynesian stimulus; sorry Joe, but were not buying your,‘we have to borrow money to pay down the debt.’ Stimuluses don’t work and only balloon the debt by trillions of dollars. Next you have Healthcare reform; no different than the unfounded Medicare drug benefit, but on steroids. After all the promises that Obamacare would not increase the debt, the reality, which everybody already knew, is it is going to drive up the price of healthcare and add trillions of dollars to the debt over the next 10-20 years. Finally, you cannot legislate technology. While it will always be the necessity to protect the environment, environmental protection will not result in reducing our dependence on foreign oil, it will increase it, at least in the foreseeable future; that is irrefutable. Fossil fuel is what drives the world’s economies. There is nothing else even close and nothing dawning on the horizon to replace it. If the US does not get its oil in-country, it will need to buy it from foreign countries (many of whom don’t like us very much). The United States has the cleanest processing plants and factories in the world, with the possible exception of Japan. Your Cap and Trade will force industry out of the US with its clean technologies, to China and India who have little regard for environment. And until a miracle happens (i.e. some technological leap), Cap and Trade will result in hundreds of billions of dollars in new taxes, much of which will used to subsidize green jobs that increase unemployment by 2 to1 and some of which will be sent to other countries.

The Democrats lost the House because, rather than "Hope and Change" they offered "More of the Same". After all the rhetoric about the public not wanting 4 more years of Bush, they have so far given two more years of Bush regardless. The American voter has no real faith in the Republicans, but it also has no faith in the Democrats. The party of “no” has simply become the party of “stop!” Stop the spending.“In this present crisis, government is not the solution to our problem; government is the problem.”

Tuesday, November 2, 2010

The Immaturity of Obamanomics

Obama’s economic plan is doomed to failure because it ignores human motivation. It is the same reason socialism doesn’t work and communism results in genocide. When John Maynard Keynes (Keynesian Economics) helped structure the British wartime economy, he was impressed how the British (and Americans) pulled together in a controlled economy and was surprising successful in extremely difficult times. Keynes theorized that if a similar economic structure could be constructed in peacetime, than capitalism, which appeared to be on it's last legs after the last depression, could not only be saved but would thrive. What Keynes later realized was it was not the structure of the economy and government planning that resulted in the economic stability at the time, it was the motivation of the workers. The President is making the same mistake now as he attempts to stimulate the economy by injecting large amounts of borrowed money into the economy, while necessarily increasing the national debt. The Keynesian theory that recessions are the result of a lack of spending does not go far enough. Obviously people spend less during a recession, but just handing out additional money to spend is not going to address the underlying cause, which is a lack of confidence and stability. The mindless belief in Keynesian theory is the result of the progressive worldview, that the government elite by it's very nature is superior in it's decision making, so these elitists have embraced this overreaching theory that espouses influence over the collective to manipulate their spending, making the issue less an economic problem and more a government control issue; but both concepts are horribly flawed.

If citizens are to enjoy their god given rights of life, liberty and the pursuit of happiness, then free market capitalism is the only viable economic plan known to man. Any other plan requires strict control of human behavior because only capitalism recognizes the inherent or inalienable individual rights and human dignity. This is why all forms of socialism always require some form of draconian re-education. When General Eisenhower warned the Nazis to "Beware the fury of an aroused democracy." this was not a warning based on a war time economy, but the realization that when free citizens band together to fight for their freedom, there is little that can stand in their way. In a controlled economy, such as national socialism, austerity and sacrifice are forced; in a Democracy austerity is volunteered. It is a simple matter of fact that enthusiastically volunteered sacrifice will have a more robust result and delayed gratification than forced sacrifice. Further, only in a democracy does delayed gratification have any real meaning, for only with self governess is the individual allowed to succeed or fail based on his own actions and self reliance. The result is the ultimate delayed gratification best personified by Christ's sacrifice, "Greater love has no man than this, that a man gives up his life for his friends."

The Keynesian's belief is that delayed gratification of the masses is very short sighted and can be easily overcome. As I said before, while there is no argument that one of the symptoms of a recession is a lack of spending by the citizenry, Keynesian theory views this is as the primary cause and this is where Keynesian theory goes horribly wrong. The Keynesian believe that all that is necessary is to “prime the pump” by putting cash in the hands of the citizenry and that this will motivate them to spend and end the recession. But the United States has a very mature citizenry and before they increase their discretionary spending they will be looking for a stable income, not a one time "stimulus". The reason stimulus' fail, is that by their very existence it means the economy is in trouble and the mature citizenry knows that spending a one time windfall, rather than saving until the economy stabilizes would be irresponsible. This shows the inherent economic immaturity that exists in government, where spending never seems to be associated with the debt it causes. Probably the height of government elitism and arrogance is Nancy Pelosi and her belief that unemployment insurance. “.. is one of the biggest stimuluses to our economy. Economists will tell you this money is spent quickly. It injects demand into the economy, and is job creating. It creates jobs faster than almost any other initiative you can name because, again, it is money that is needed for families to survive, and it is spent.” Certainly unemployment insurance is a safety net, but the idea that it is a stimulus and is job creating is the blind worldview of the out of touch elite. It is almost absurd that one has to explain that then unemployment insurance is less, usually about 60%, of a person’s wages and the result of unemployment is a sharp reduction in expenditures and the slow leaching of employees qualifications for future employment.

The employed in a recession will not be motivated to spend government stimulus because they are not short sighted and business will not spend or hire because of government stimulus or short term credits because they are not short sighted; in both cases the reasoning is economic maturity. Not only does government not have to balance a budget or make a profit, it is totally ignorant of either concept. The Obama administration has latched onto Keynesian economics theory, not because it has a proven track record, but because it espouses government control and planning. And as much as Neo-Keynesian economics becomes market oppressive, the concepts of a free market and supply and demand have created the greatest prosperity known to man. The reason is self-evident, the free market rewards initiative and delayed gratification and is to date the only economic theory that does not have to be forced on a populace; and like no other forced economic method, it promotes human dignity.

The use of Keynesian economic theory for the purpose of government planning is being rationalized to supposedly free Americans from economic worries. F.A. Hayek warned about this in his book, “The Road to Serfdom”, “It is often said that political freedom is meaningless without economic freedom. This is true, but in a sense almost opposite from that in which was used by our planners*. The economic freedom which is the prerequisite of any other freedom can not be the freedom from economic care which the socialists promise us and which can be obtained only by relieving the individual at the same time of the necessity and the power of choice; it must be the freedom of our economic activity which, with the right of choice, inevitably also carries the risk and responsibility of that right.”

*”planners”, meaning those who would free us by making our economic choices for us. Since “The Road to Serfdom” (1944) was written before Orwell’s 1984 (1949) and the concept of “doublespeak”, Hayek becomes one of the first pre-Orwell to comment on what Hayek called the perversion of language.This was best personified when Christ stated, "Greater love has no man than this, that a man gives up his life for his friends