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Reasoning?

What Reasoning?

Have we forgotten how to reason? Or has what we take for reasoning actually become a form of marketing?

That’s the question that came to mind this morning as I thought about the whole debate about tax policy and the rich. At hand is the decision whether or not to extend the Bush tax cuts for the rich or pare them back. 

Those who want to retain those tax breaks -- those who get them -- employ the following reasoning to support their position: 

If we tax the rich we are taking away money from the very people who invest in business enterprises, startups and, thereby create jobs, they'll stop doing so. Why take money away from those job creating machines just to give it to the government, which doesn’t create private sector jobs? And at this moment, when we so desperately need job creation?

That’s their story and they’re sticking to it. But there you are, that’s their “reasoning,” and they want us to accept it at face value.

But it’s nonsensical on its face. I mean, we gave the rich $1.6 trillion in extra dough over the past decade and what did they do with it? Rather than create jobs the companies they owned, the ones they purchased  with their extra money, and the ones they started up, boosted profits by shipping existing US jobs to cheap offshore venues. And with the dough left over, they provided fuel for the Wall Street derivatives bubble that later cost additional millions of  their workers their jobs and ordinary investors got to watch their meager nest eggs become significantly more meager.

Oh, and while the American worker was down, out of work, and their labor unions neutered, those companies owned by these rich "job creators" took the opportunity to renege on pensions their workers had been paying into for their retirements. The "reasoning" then will sound familiar: if these companies were saddled  with all those pension obligations they would not be able to compete in the a globalized economy. Then they'd go bankrupt and all those workers would lose their jobs. So, welching on those pensions was, by their "reasoning," a way to save jobs. Making them pay would be a way to “destroy jobs.”

You know, the old One move and the sheriff gets it.” ploysherrif

Now it’s not that the reasoning in an of itself was faulty. Not at all. It worked perfectly, for them. Not so much for the other 98% of us. 

The wealth of the top 2% jumped more than 10% since the Bush tax cuts went into effect.

A 2009 report by University of California, Berkeley economics professor Emmanuel Saez concludes that income inequality in the United States is at an all-time high, surpassing even levels seen during the Great Depression. The paper, which covers data through 2007, points to a staggering, unprecedented disparity in American incomes. On his blog, Nobel prize-winning economist and New York Times columnist Paul Krugman called the numbers "truly amazing."

The report shows that:

  • Income inequality is worse than it has been since at least 1917.
  • The top 1 percent incomes captured half of the overall economic growth over the period 1993-2007
  • In the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.
  • The average wage of Americans, adjusting for inflation, is lower than it was in the 1970s.
  • The minimum wage, adjusting for inflation, is lower than it was in the 1950s.
  • On the other hand, billionaires have never had it better.

So, as I said, their “reasoning” was spot on  -- for them. Now let's look at how giving them that extra $1.6 trillion in tax cuts worked for the rest of us. This from the US Census Bureau:

“The U.S. Census Bureau announced today that real median household income in the United States fell 3.6 percent between 2007 and 2008, from $52,163 to $50,303. This breaks a string of three years of annual income increases.... The nation's official poverty rate in 2008 was 13.2 percent, up from 12.5 percent in 2007. There were 39.8 million people in poverty in 2008, up from 37.3 million in 2007.

Meanwhile, the number of people without health insurance coverage rose from 45.7 million in 2007 to 46.3 million in 2008, while the percentage remained unchanged at 15.4 percent.


And about all that job creation we were supposed to get for our money? Well, the official unemployment rate is 9.6%. But the real rate, the real human suffering, is more like 17%, and growing.

Even those in Congress, the rich got richer thanks to the Bush tax cuts they voted into law.


Sen. John Kerry, (D-Mass) saw his net worth jump $20 million last year.

Rep. Jane Harman saw her family fortune jump by $40 million in just the last year.

Rep. Michael McCaul, (R-Tx) saw his piggy bank fatten by $25 million this year.

Even House Speaker, Rep. Nancy Pelosi, (D-Ca.) saw here net worth jump a healthy $9 million last year.

(The full list of the top 50 richest members of Congress)


No wonder the Bush tax cuts are (yes, I said “are”, not might) going to be extended before they expire in January. It has nothing to do with jobs. It has everything to do with the simple fact that people smart enough to get to Congress or smart enough to get to the top in business, are not about to vote against their own interests. (Unlike the small army of morons they've whipped up – read Tea Party – to do exactly that... agitate and vote against their own and their children and grand children's best interests. They're like a bunch of chickens taking up a collection for a monument to Col. Sanders.)

So, ladies and germs, as you listen to all the "reasoning" behind extending the Bush tax cuts, remember all this. There's nothing you can do about it. All that democracy stuff doesn't apply here. But at least feel insulted that they'd think you are dumb enough to actually believe – after all that's happened over the last decade – that continuing to under -tax the rich is just the medicine America needs to revitalize our working and middle classes.

I mean, who you gonna believe -- them or your lying eyes?

toon



Can We Talk?


News For Real, Saturaday Aug. 7

 I don’t Tweet and I only use Facebook to post things I think will make people I dislike cringe with envy. So this is the only place I can get rid of stuff that piles up in my head over week’s time. So, got a minute?  (Oh, BTW, be forewarned: if you’re looking for depth of analysis, you won’t find it below.)

 1) First to all of you who replied to my email of Friday; yes dears, I do know the difference in usage between “they’re” and “theirs.” Thanks for letting me know I screwed up again. I am a  careless writer. Daily I do violence to the english language.  So arrest me.

 2) Jesus H. Christ, what the hell is wrong with the Obama’s? I am speaking of Michelle and No. 1 daughter’s vacationing for a week at a posh Spanish resort at a cost to American taxpayers of upwards of a couple of million bucks. (It costs $11,500 AN HOUR to fly Air Force II, then there are the SEVEN bullet-proof SUVs that had to be shipped over there for this trip, and the 70 Secret Service agents.. all paid for by us. Talk about being tone deaf. Michelle’s White House flacks were quick to reply that she is paying her own personal expenses, like hotel rooms and meals. But this only made matters more annoying. She is staying at a palace of a hotel where suites go for up to $6500 A NIGHT and where she and hers booked 30 ROOMS. Holy stupid, Batman! With millions of working class Americans living hand to mouth, millions losing the very roofs over their heads to the banks their tax dollars bailed out, and the Gulf Coast begging tourists to return, Michelle trots off to Spain for a high-end vacation! She deserves all the misery she’s going to get for this trip. And the same goes for hubby who seems to had have no objection to it. He will. (I’m sure the folks in hard-hit New Orleans or other Gulf Coast resorts would have loved a piece of that action.)

 3) Hey, look at this! Drought stricken Russia is on fire and Pakistan has become Water World due to record monsoon rains. The commodities world is all atwitter with talk of wheat shortages. Welcome to the opening chapter of mankind’s next chapter: Living with Climate Change -- If We Can. To those who still believe global warming is a liberal plot, go tell it to the Russians and Paks.

 4) American men and women are dying in increasing numbers in Afghanistan, not to protect that artificial democracy, but a guy running that place who is so corrupt he must be channeling John Gotti. Read all about it. Seriously Barack, how long are you going to play the sap to this guy? Or, to paraphrase a young John Kerry: “What would you tell the last GI to die for this crook?”

 5) Even Alan Greenspan believes congress should simply let all the Bush tax cuts expire on schedule. But alas, when such a pot of money is up for grabs, forget good public policy, there’s politics to be played. Republicans are trying to keep their rich donors happy with the lie that raising the marginal tax rate on the rich by just four percentage points will cause them to shut off the trickle-down machine -- which of course never trickled to begin with. The Dems are equally craven liars as they are pretending that letting middle class tax cuts expire will burden the already burdened. But those who are employed are just damn lucky to be employed, and are likely still employed because of the money the government borrowed to stimulate the economy in the first place. So they can and should pay a bit more in appreciation. As for those who are still unemployed, well they could care less what their tax rate is because they’ve got no income to be taxed. So, come on you duplicitous, lying, malingering, triangulating little bastards up there -- just let the damn tax cuts expire. After all, in case you haven’t noticed, we  have a $14 TRILLION credit card bill that due.

6) Sarah Palin: Ugh. Just writing about that woman causes brain damage. So, nuf said on that.

7) Michael Steele: May he live long and give more public speeches, like the one in which he said Hillary Clinton should ride “in the back of the bus.” Is Michael a DNC mole? Nah. The DNC isn’t that organized. Steele is just either a freebie or evidence that God is a democrat.

8) Gay marriage: Can’t everyone just mind their own freakin’ business? Really! Recently some guy in Japan married a robot. Who cares. (And if any of you answered, “Well I care,” I suggest you stop worrying what other people are doing with their lives and get one of your own.)

 9) Google and Verison: Get your grimy, money grubbing hands little off our bandwidth. If you’re running short of bandwidth, built it and we will come. But don’t turn the Internet into just another Comcast where you can divvy up bandwidth on the basis who will pay the most for it. Oh, and Google… remember your own goddamn company slogan: Do No Evil. Undermining net neutrality is about as evil as it gets in the digital age. Got it? Geeezzzzz. Of all people, Google. And I thought Obama was a disappointment!

 10) Finally this: I am absolutely certain that the copy above is chuck full of syntax, punctuation and spelling errors. So, to you english majors and frustrated hall monitors out there, keep it to yourself.

 Thanks for letting me get all that off my chest. Have a nice weekend my friends. Steve


Secrets Kill Too
Part Two

"If any question why we died,
Tell them, because our fathers lied."
Kipling

Much has been said this week about the wisdom, or lack thereof, of the WikiLeaks Af/Pak war secret document dump.

Critics claim the exposure will cost lives. Supporters – count me one – believe that history argues far more convincingly that millions of lives have been lost because of secrets, that should never have been kept secret in the first, because they were flawed, wrong or just plain false. Keeping such secrets meant no one could vet them, no one could compare them to the facts on the ground guaranteeing that even the most transparent lies remained unassailable.


So, for those whining about WikiLeaks spilling the beans on the Af/Pak war fiasco I say, go ahead, show proof of all the dead informants you have, And we'll produce historical records proving our contention that some secrets are more deadly -- FAR more deadly. .

Oh look -- we win.

On your side you have the "possibility" that WikiLeaks might get -- what? -- a few dozen informants killed? On our side we have – oh gawd, were to begin....Pick a date... pick a war. Here's a complete list. Knock yourself out.


Among those wars on that list where false secrets played a key role in getting all kinds of people killed --  unnecessarily – count the 1898 “sinking” of the US battleship, Maine, in Havana Harbor and the so-called Gulf of Tonkin “attacks” that gave President Lyndon Johnson justification for ramping up the Vietnam War and, more recently, the Bush administration's BS WMD.

The 1971 leak of some 5000-pages that came to be known as the Pentagon Papers. The leak revealed the utter bankruptcy of logic, morality and truth underlying the prosecution of that war.

Among the documents leaked was a memo from the Defense Department under Johnson listing the REAL  motivation behind the war:

  • 70% - To avoid a humiliating U.S. defeat.
  • 20% - To keep South Vietnam (and the adjacent) territory from Chinese hands.
  • 10% - To permit the people of South Vietnam to enjoy a better, freer way of life
  • ALSO - To emerge from the crisis without unacceptable taint from methods used.
Anyway, ya'll know this stuff already. I only mention this because the WikiLeaks document dump has finally kicked open the doors for an intelligent and, for the first time, INFORMED debate on the wisdom, or lack thereof, of continuing this madness again. And that debate has begun.

Here is some must-study materials that build on what we learned this week, the lies, the deception of us and the willful self-deception of those who deceive us.

Have a nice weekend.
Steve
__________________

First a bit of history, just to give you that deja vu feeling as you read the current stuff. Does any of this sound even remotely familiar? Over 170 years and nothing …. NOTHING... has changed except the faces:

By October 1841 disaffected Afghan tribes were flocking to the support of Dost Mohammad's son, Muhammad Akbar, in Bamian. Barnes was murdered in November 1841, and a few days later the commissariat fell into the hands of the Afghans. Macnaghten, having tried first to bribe and then to negotiate with the tribal leaders, was killed at a meeting with the tribal chiefs in December. On January 1, 1842, the British in Kabul and a number of Afghan chiefs reached an agreement that provided for the safe exodus of the entire British garrison and its dependents from Afghanistan. Unfortunately, the British would not wait for an Afghan escort to be assembled, and theGhilzai and allied tribes had not been among the 18 chiefs who had signed the agreement. On January 6 the precipitate retreat by some 4,500 British and Indian troops with 12,000 camp followers began and, as they struggled through the snowbound passes, the British were attacked by Ghilzai warriors. Although a Dr. W. Brydon is usually cited as the only survivor of the march to Jalalabad (out of more than 15,000 who undertook the retreat), in fact a few more survived as prisoners and hostages. Shuja remained in power only a few months and was assassinated in April 1842.

The destruction of the British garrison prompted brutal retaliation by the British against the Afghans and touched off yet another power struggle among potential rulers of Afghanistan. In the fall of 1842 British forces from Qandahar and Peshawar entered Kabul long enough to rescue the British prisoners and burn the great bazaar. All that remained of the British occupation of Afghanistan was a ruined market and thousands of dead (one estimate puts the total killed at 20,000). Although the foreign invasion did give the Afghan tribes a temporary sense of unity they had lacked before, the accompanying loss of life (one estimate puts the total killed at 25,000) and property was followed by a bitterness and resentment of foreign influence that lasted well into the twentieth century and may have accounted for much of the backlash against the modernization attempts of later Afghan monarchs. 

Source: http://www.afghanan.net/afghanistan/angloafghan1.htm

____________

The huge scale of Pakistan's complicity
The Globe and Mail, July 30, 2010

(Thanks to WikiLeaks, the involvement of Inter-Services Intelligence in the Afghan conflict is now obvious, argues Chris Alexander, Canada's former ambassador to Afghanistan. )

Both Afghanistan and Pakistan are now in the grip of a single escalating conflict, punching eastward from Khyber Pakhtunwa (the former Northwest Frontier Province) into Punjab's heartland, as well as westward toward Kabul, Kandahar and Kunduz. .. As a direct consequence, reconciliation has failed to get off the ground: the Pakistan-based Islamic Emirate of Afghanistan – the official name for the Taliban and its allies – clearly prefer to fight.  (Full Article)

_____________

Special Report
'The Sun in the Sky: the relationship between Pakistan's ISI and Afghan insurgents'

June 2010 --"Taliban commanders and a wider group of Afghans close to the insurgency believe that the highest levels of Pakistan's government are actively involved in protecting and sustaining the insurgency presents a great challenge to senior Pakistani civilian and military officials to demonstrate their commitment to reaching a peace settlement." (Full Report)

When you're wounded and left on Afghanistan's plains,
And the women come out to cut up what remains,
Jest roll to your rifle and blow out your brains
An' go to your Gawd like a soldier.
Go, go, go like a soldier,
Go, go, go like a soldier,
Go, go, go like a soldier,
So-oldier _of_ the Queen!
-- Rudyard Kipling



Too Many Disturbances
in the Force

A couple of years ago I was chatting with a couple of Realtor acquaintances. I understand the real estate sales business well, having been a real estate broker myself back in the late 1970s. Realtor are natural-born optimists. They can find  silver linings in even the darkest economic clouds. When prices soar they warn would be buyers not to “miss the boat.” When prices plunge they warn would-be buyers … well, not to “miss the boat.”

So anyway, I was singing my usual fiscal Chicken Little ditties to these two real estate agents, and they were clearly not buying any of it.

“I had my best year ever, last year,” one announced while pointing out her “Top Agent of the Year” award hanging on the wall behind her. The other chimed in that "real estate does well if no matter what the stock market does because, as the saying goes, 'they're not making the stuff anymore.'”

As I said, having been there once myself, I understood where these two “what me worry?” sales people were coming from. I knew that I was not only wasting my breath.

So I just shook my head and asked them if they'd seen the old Star Wars movies, and they had. “Well then, I said, let me just say this. I understand that real estate has weathered a lot of economic ups and downs over the past decades. But this time is different. This time the world's economies are not going to be just struggling against one 'disturbance in the Force,' but many disturbances in the Force.. too many at once. This one is different."

And so it came to pass. Or has it? Or has it just begun?

While everyone is consumed with the media's disaster obsession dejur – the ecological holocaust in the Gulf of Mexico, or the two can't-win-can't-leave wars in the Middle East --  the world financial systems continue undergoing what can only be described as a slow-motion train wreck of breathtakingly historic proportions.

All that's left now is to wait until this massive pile up exhausts itself. Then, once the dust settles, things will get really interesting. Something similar happened in 1917 in Russia, though on a far smaller scale. This time it will be the entire developed world looking for a new, more equitable, more sustainable economic model.

I have no idea what form it will take. But most of us alive today will find out. My guess is it will be a blend of free and government managed and regulated market economies. There will be a lot of socialism, a smattering of communism and a Renaissance for small and owner-operated businesses. Local needs, products and growth will be more important than national or international. Public transportation will supersede private. In short, if Tea Baggers hate the current system what will replace it is gonna drive them even nuttier -- if that's possible.

But that's just a guess. Between now and then all we can do as individuals is to stay informed and remain nimble of foot.

Here's more on the same theme.

Steve


Gold’s 30% Surge Puzzles Bernanke, But Not This Guy

Commentary by William Pesek

June 14 (Bloomberg) -- Alan Greenspan had his conundrum. Now, Ben Bernanke has his enigma.

The behavior of long-term interest rates had the former Federal Reserve chairman scratching his head. It’s gold that puzzles the current Fed chief. Damned if Bernanke and his fellow central bankers can explain the surge by a metal John Maynard Keynes once dismissed as a “barbaric relic.”

“I don’t fully understand movements in the gold price,” Bernanke said on Capitol Hill last week.

That shocks gold bulls like Johann Santer, managing director at Superfund Financial in Tokyo. And it may be awful news for the global economy that some investors are surer than ever that the gold rally is just getting started.

It’s hard to decide what’s more frightening: that investors are losing confidence in paper money or that the shepherds of the world’s major currencies don’t get what’s going on. Gold’s climb of almost 30 percent in a year reflects fear, not just market concern over inflation or deflation risks. People have lost trust in the global financial system.

As Lehman Brothers Holdings Inc. was crashing in September 2008, Superfund was loading up on gold. At the time, Santer got his share of giggles and rolled eyeballs for predicting gold would rise to $1,500 an ounce over the next two or three years. With gold around $1,230 an ounce, no one’s laughing anymore.

‘Black Swans’

There are many reasons why gold is back in vogue, yet two in particular are worth considering. One is fear about “black swans,” unexpected events that have great impact. The second reflects how little gold many central banks in Asia and elsewhere hold on their balance sheets.

A year ago, the idea of gold hoarding struck me as odd. It was hard not to view fans of the precious metal as akin to people standing on street corners with megaphones predicting apocalypse. The world economy seemed to be on the mend, a sense of order was returning to markets and doomsayers like Nouriel Roubini were getting fewer headlines.

Greece’s unraveling was a sobering reality check. It wasn’t that a fiscally irresponsible economy smaller than Iran’s was stumbling. It was how, as in the case of Iceland before it, Greece was cast in the role of canary in the financial coalmine. European banking shares suggest a Greek debt default may be just a matter of time.

Contagion’s Return

It was suddenly clear that the contagion that emanated from the U.S. in 2008 had never really gone away. Greece’s troubles cast a huge shadow over far more important economies, like Spain’s. The idea that the 10th biggest economy, one bigger than Canada’s, might someday renege on debt put an end to hopes for a smooth 2010.

Perhaps the best explanation of these all-too-tangible risks comes from Anthony Crescenzi, a strategist at Pacific Investment Management Co., the world’s largest bond-fund manager. The question is this: As the U.S. is aggressively backing its financial system, who is backing the U.S.?

Thinking back to the darkest days of 2008, few will quibble with government efforts to stave off Armageddon. The promise was that if investors tolerated a surge in debt issuance, capitalism and prosperity would be saved. As fear is returning to the global economy, the worry is that industrialized nations are out of ammunition.


‘Keynesian Endpoint’

Have nations reached a “Keynesian endpoint” as exhausted balance sheets leave policy makers with few options to bolster growth? We’ve known for years that the Group of Seven nations were losing their ability to guide markets. Now, they’re losing hope of shielding economies from them.

As all hell threatens to break lose anew, are you going to buy stocks? Probably not. Bonds at a time when no one trusts credit ratings? Doubtful. Euro? Nope. Yen? Risky. Dollar? For many, the U.S. currency is the least ugly contestant in this financial beauty contest.

A question here is what central banks do. Many are sitting on too many dollars for comfort and upping gold reserves may be the diversification move of choice.

“I believe the biggest customer base will be Asia,” says Santer. “And if Ben Bernanke doesn’t see why then we have even more reason to worry about the global economy.”

Gold Grab

South Korea, for example, is the 15th biggest economy and gold accounts for just 0.2 percent of its total reserves. If markets remain volatile and the dollar gyrates, it may be among the Asian nations that move to buy more of the metal.

In November, India surprised markets with a $6.7 billion purchase from the International Monetary Fund’s bullion stash. India’s gold grab was the vanguard of central banks more aggressively diversifying reserves away from U.S. Assets.

It’s not what the Greenspans of the world envisioned 15 years ago. Back then, warehousing gold bars seemed a bit retrograde. Central banks had gotten so good at whipping inflation that paper money was just fine. Fort Knox was no longer needed.

The post-Lehman world is dispelling such notions and we may be on the cusp of history’s greatest gold rush.

Bernanke and his peers would be wise to contemplate why.



Lie-Of-Month

Well, there she went again:


Palin Claims Obama Would Ban Guns
AP - Former Alaska Gov. Sarah Palin warned NRA members Friday that President Barack Obama wants to gut the Second Amendment:

"Don't doubt for a minute that, if they thought they could get away with it, they would ban guns and ban ammunition and gut the Second Amendment," said Palin, a lifelong NRA member who once had a baby shower at a local gun range in Alaska.

Before the reader assumes I'm a shill for anti-gun forces, let me assure, that's not the case. As a former US Marine I have fired, and even admired, deadly hardware ranging from handguns to 106 mm recoilless cannons. And I own firearms – plural. And, I don't believe the “guvment” should be allowed to summarily show up at my door to “pry them from my cold, dead hand."

Now that that's out of the way let me say that little Ms. Shoots-Small-Animals-from-Helicopter's claims that Obama would “ban guns and ammunition,” is pure, steaming caribou crap. It's another page from the Right's Scare-the-Sheep handbook.

What Obama, and any thinking person, would do is  treat guns the same way we treat other potentially dangerous objects in our modern world.

carHow about cars? Do cars kill people? Or is it drivers who kill people? Who cares. The fact of the matter is that cars and those who drive them are regulated by "guvment," otherwise there'd be a helluva lot more road-kill out there. Drivers are required to get driver's licenses, showing they know how to drive. And the cars themselves are regulated, both for safety and ownership records are kept.

Is all that a set up for the day when the “guvment” decides that owning a personal vehicle affords too much personal freedom and "they" come to “pry our car keys from our cold dead fingers?” Or is it just good government and good sense?

How about airplanes? I'm in the process of getting a recreational pilot's license, and the “guvment” is making me jump through more regulatory hurdles than anything I've done in life. Good. Very good. Otherwise any Tom, Dick or Harriet would be able to climb into a cockpit and fly over my house -- or yours.

Aircraft and pilot license regulations are an even more relevant example than auto registration and driver's licenses. After all, while terrorists use cars as car bombs, they're usually parked at the time. After 9/11 planes can be considered as deadly projectiles, bullets with brains, if you would.planes

I'm new to the world of flying but I can tell you this, you will not find anywhere on this planet a more freedom loving bunch than pilots. It's the reason they fly – to be free, to be above it all, to be -- for a short period of time out of reach of “guvment”--  and for that matter, everyone else on the planet. But you won't find many pilots who'd want the Federal Aviation Administration to lighten up. Not even a bit.

Both autos and planes are useful as hell, and dangerous as well. Both are machines, and therefore prone to imperfections, breakdowns, design and engineering mistakes (just ask Toyota.) And don't even get me started on inherent shortcomings of the humans who operate cars and planes.  Which is why while cars,  planes and their operators are allowed -- even encouraged by government -- they are also regulated by government.

But when it comes to firearms, this solid, time-proven logic is rejected by gun freaks and the right wing demagogues who, every election cycle return to tickle gun freaks paranoia G-spots.

Okay, fine, I get it. So let's see if we can break this cycle once and for. What if those of us on the Left cut a deal with the Right on all this personal freedoms and  banning stuff business. Here's my deal:

-We on the Left guarantee we will never propose any laws banning guns or ammo or making either guns or ammo burdensomely unavailable.

And, in return,

-Those on the Right promise to never again propose banning a woman's right to choose an abortion or make such a choice burdensomely unavailable.

What? Oh get outta here. Whatya mean they're different? Just how are they different? The Right claims abortion is murder of the unborn. Why not the same concern for the already born?

The last year I could find for statistics on this was 2004. According to the Centers for Desease Control, that year 29,569 full-term humans were victims of very later-term “abortions” by gunfire – that's 81 a day, everyday, for 365 days. Another 64,389 were wounded by guns that same year or, 179 a day. (Full report)

Don't get me wrong. I'm not just blowing off those gun deaths, any more than I just blow off the 35,000 or so folks who die behind the wheel of car every year, year in and year out. But life is inherently risky business, always has been, always will be. Risks, even deadly risks, can never be eliminated, only mitigated.

And mitigation is another word for regulation. Good regulation. Smart regulation. Be it for cars, planes, guns or … dare I say, offshore drilling rigs.

oil



Curse of the  Flat Learning Curve

The most depressing thing about getting older is loss of innocence. I can no longer find comfort in the belief that “those in-charge” must be smarter than the average bear.

Not true. Not even close.

Where's my proof? Where's isn't it, is more to the point. But let me point out just one example.

Smart people learn from their mistakes and the mistakes of others. Now read the two paragraphs that follow. One is from the past and one is from the present. I have deleted identifiers from each:

Quote No. 1

“The condominiums stretched as far as the camera could see, in two and three floor clusters, maybe 15 units per building. They were separated by stretches of arid, fiat land. Many were only half-finished shells. Most were abandoned, left to the ravages of the hot sun. ... the camera zoomed in on building materials stacked rotting in the desert dust. Loose wiring and shreds of insulation swayed in the warm, dead, quiet air. Siding had warped, concrete cracked, windows broken. In many cases only the concrete slab foundations remained – dubbed by locals, “Martian landing pads.”


Quote No. 2

“Hundreds of miles inland from the booming real estate markets of ….... and …. an unlikely property fever is gripping this middling industrial outpost...Rows of half-completed apartment buildings rise over former farmland, each crowned with yellow construction cranes that seem to outnumber trees in parts of this dusty city of 5 million residents.”


Give up? The first quote is from a book I co-authored a quarter century ago – Inside Job: The Looting of America's Savings and Loans. The quote describes hundreds of Texas condominium units built with easy S&L money, most of which was never repaid, fueled by Reagan-era thrift deregulation. That money spawned America's first real housing bubble. Many of the condo's described were later simply bulldozed as there never was any real demand for them. That was – until now – the biggest US banking bust, housing bust since the Great Depression.

Not to beat a dead horse, but clearly American leaders who went on to create the housing bust of 2008 learned nothing from the 1980's S&L debacle.

But wait. You might be thinking that the second quote is about that – America's current housing bust. No. I wish it were that simple.

The second quote is from today's Los Angeles Times describing China's now-overheated housing market.

“Taxi drivers (in China) boast of owning multiple flats for investment. Billboards hawk developments with names such as Villa Glorious and Rich Country. Frenzied crowds pack sales events with bags of cash, buying units that exist only on blueprints. Average home values in Hefei soared 50% last year...China's real estate rush, once confined to a handful of leading cities, has spilled into the hinterlands with a ferocity reminiscent of American expansion into exurbs like the Inland Empire.

In a country that economists say is treading dangerously close to a full-blown property bubble, Hefei represents more evidence of China's headlong embrace of housing to power economic growth."Everyone in Hefei lives with the real estate industry," said Guo Hongbing, a marketing consultant for several developers. "You can't escape it."

"The situation in Hefei is a symbol of the craziness in China's real estate market," said Cao Jianhai, a professor of economics at the Chinese Academy of Social Sciences, a government think tank. "Prices in second- and third-tier cities are increasing more dramatically than in the first tier. It's very dangerous, and it puts local banks at risk."


Well! So much for the whole myth of thoughtful, sage-like Mandarin wisdom. And there's nothing “inscrutable” about any of this either. The Chinese failed – or just refused – to learn from our two disastrous easy-lending bubbles. Instead they did exactly what Reagan and Bush Jr. did – throw open the lending window to any Tom, Dick and Hoo clutching a roll of blueprints. Like the first dose of crack cocaine, the rush all that easy money created – in the form of business activity and jobs – encouraged officials to keep that window wide open in the hope the rush would go on and on and on forever. 

Not to beat an analogy to death, but easy money, like easy crack, never creates the hoped-for sustainable “rush.” It only creates dependence on more – more lending, and more debt. rich

It also eventually results in a death spiral. Easy lending contains the seed of its own destruction, because it creates surpluses. Surplus housing inevitably, drives prices lower, and lower. As developers find it hard to sell existing units at a profit their lenders, now on the hook for millions in loans, are forced to prop up their loan-addicts with increasingly larger doses of dough. Over time those developers have to devote larger and larger portions of those new loans to service earlier loans on projects developers can't sell because of excess supply -- even as they create more supply.

We know how it ends. And, one would think the once capitalism-shy Chinese would know how it ends too by now. How else to explain such self-destructive policies than to conclude that leaders.. ours, theirs, the ones in Greece and elsewhere, are not smarter than the average bears. All that separates them from the rest of us is that they decided running countries would be fun – oh, and almost always profitable, at least for them personally, at some point either then or later.

They come and they go – our fearless leaders. And when they go they always... not sometimes, but always... leave messes behind the rest of us have to clean up. Sometimes the clean up requires we open our wallets. Sometimes it means washing crude oil off dying sea birds. In Ukraine it's a few thousand square miles of uninhabitable land, farms and cities that for the next few thousand years will glow in the dark.

I call it the flat learning curve. And someday it could be the death of us all.



English Majors: Watch where you step
 


Stephen P. Pizzo
http://www.stephen.pizzo.com
Email me at: stephen(at)pizzo.com


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