Archive for March, 2010

Economy hits the tax haul

Tax revenue collections have dropped by nearly 14% in California this year, despite massive increases on tax rates and fee amounts:

The state collected just over $101 billion in 2009, down $16.4 billion, even though the legislature and governor approved the largest tax increase in state history including hikes in sales, motor vehicle and income taxes.

Fears of a deflationary spiral may not be unfounded or hyperbolic after all.

Federal policy makers have been walking a fine line between allowing the nominal value of assets to deflate while trying to keep the entire economy running on borrowed cash and easy money policies.  If all of these interventions are unable to kick-start “business as usual,” the next temptation for the Federal Reserve may simply be to literally print up the money needed to pay down debts and create new jobs.  Unfortunately, the down side effects of that could include unintended levels of inflation, a drop in international confidence regarding the U.S. economy, and even the potential of widespread civil unrest as wages are unable to keep up with the price of food and other basic necessities.

Conservative violence undermines legit healthcare criticisms

I’m not a particular fan of this health insurance reform legislation. Don’t get me wrong, I think we need serious health care reform in America, but I’m not particularly excited about guaranteeing millions of new customers for a broken system. I’m not looking forward to supporting this system when the mandates kick in – even if my own out of pocket contribution is just a small fraction of what the government pays on my behalf, I’ll feel ripped off.

But any legitimate concerns about the legislation will be drowned out in a growing chorus of violence and threatening rhetoric. Already, politicians and their families have faced death threats and attempts at sabotage, and the discussion on right-wing echo chambers is increasingly radicalized.

There are legitimate reasons to dislike this bill, but the rational arguments are more likely to be considered “further left” in relation to the American political debate. Real reform will have to go far beyond private insurance and toward a goal of basic universal coverage in a low-overhead non-profit environment.

Money is an Illusion, so why Pretend?

Bernanke is practically fessing up to the biggest fraud of all time: the fraud of modern money. These colorful pieces of paper aren’t backed by any specific goods or services, and their daily value fluctuates as the financial gatekeepers arbitrarily decide to inflate and contract the available supplies of cash. There really is no limit to the amount of money we can create in a virtually instant period of time, so why keep pretending that there could ever possibly be a shortage in the banking system?

So, this is the tortured logic that leads us to Bernanke’s conclusion: eliminate banking reserves outright.

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Since the banks can head straight to the Federal Reserve for cheap money any time they need it, and since the system is blatantly rigged to provide them profits in the long run, there really is no need for a financial panic! We can just print more money! Heck, even if we ran out of paper and ink we could still transfer digital credits into the bank’s account and that would be just as valuable as those greenbacks you worked so hard for.

So the next time you’re sitting at work and staring at the clock, as yourself why any of us should have to keep bank reserves to pay off our bills and debts – its all just imaginary money, right?

The rotten political center

In my short lifespan, I’ve heard a lot of talk and celebration for this concept of bipartisanship. With the possible exception of Fox News, most media outlets will applaud a so-called “moderate” politician for ignoring their platforms or the wishes of their constituents in the name of compromise.

So who are the idols of the “independent center?” We hear a lot of talk about people like McCain and Lieberman when it comes to this myth of bipartisan moderation – but check out this bill they are currently trying to sneak through Congress:

Whenever within the United States, its territories, and possessions, or outside the territorial limits of the United States, an individual is captured or otherwise comes into the custody or under the effective control of the United States who is suspected of engaging in hostilities against the United States or its coalition partners through an act of terrorism, or by other means in violation of the laws of war, or of purposely and materially supporting such hostilities, and who may be an unprivileged enemy belligerent, the individual shall be placed in military custody for purposes of initial interrogation and determination of status in accordance with the provisions of this Act.


An individual, including a citizen of the United States, determined to be an unprivileged enemy belligerent under section 3(c)(2) in a manner which satisfies Article 5 of the Geneva Convention Relative to the Treatment of Prisoners of War may be detained without criminal charges and without trial for the duration of hostilities against the United States or its coalition partners in which the individual has engaged, or which the individual has purposely and materially supported, consistent with the law of war and any authorization for the use of military force provided by Congress pertaining to such hostilities.

We’ve come a long way in this country, when the center of our political debate is owned by people like these – people who don’t believe in the fundamental values of our nation or the rules of the constitution that they have sworn to uphold.

If this is the middle then, I am proud to be in the fringe element: left or right, wherever there are people who believe in freedom and justice, I will be there.

Judge Jim Gray: The War on Drugs Must End

A conservative judge explains his conversion from drug warrior to social reformer and champion of liberty:

Basically, he nails the problem with the war on drugs by explaining exactly who benefits from the laws and who pays for the negative consequences of our outdated policies.

Prohibition has always failed and always will – it is contrary to the very spirit of American liberity. Until these issues are fixed though, we can expect lots of money flowing in to the gangs and prisons and police departments. Luckily, its a shortage of cash that might have us evaluate the moral wrongs being carried out in the name of zero tolerance and drug-free dreaming.

Liberating education in the debt society

Students around the country – not just in California – are protesting in unity against the state of affairs that turns our brightest students and most ambitious academics into debt slaves of the modern banking system.

As the price of education has risen at a pace matched only by medicine and the military, it is the very young adults who are trying to improve themselves and their communities who are being left with big bills that will take decades to pay off completely once the interest is added in.  While some federal loans allow students to avoid most of the predatory rates, these legislatively set funds can only cover a small part of the total cost at today’s university tuition schedules.

The inefficiency of our educational funding is a wide-ranging issue that does not stop at the local university – these financial problems follow our young professionals throughout their productive lives.  As an example, most medical doctors are graduating with a total debt load of around $250,000 – and that cost is going to primarily benefit the banks who lent the money at the expense of those who need the doctor’s services.  So while defenders of the status quo will often point to the relatively high incomes of our doctors, they do not seem to notice how we have fewer doctors per capita or that they report a lower job satisfaction and general happiness with the work they do.

Maybe if they weren’t constantly worried about paying off debts?  Maybe if they could work as free human beings with a passion for doing good, and not as a slave who must labor just to be fed?

Free education will benefit everyone in the long run.  Its not just about the students, its about the jobs they will create and the problems an educated population can solve.  Perhaps most importantly of all, its about the freedom of those who chose to pursue knowledge to then seek whatever goals they feel compelled to tackle as opposed to the ones that currently pay enough to satisfy some bank’s balance sheet.  We really don’t need another generation of MBAs right now…