Thursday, April 15, 2010

Latest news

"When asked what presents a bigger risk over the next year, 23 economists said accelerating inflation and 23 said slowing inflation. That mirrors a divide inside the Federal Reserve. At their March policy meeting, some officials argued the downturn in house prices is causing key measures to understate prices increases; others focused on the decline in inflation measures that exclude food and energy."
Wall Street Journal 4/15/2010

Their fear of economic slowing will lead them to take actions that will cause substantial inflation, per our previous discussion.

Monday, January 25, 2010

Politics, Government and other false dichotomies you can share with friends

So we have had a good discussion about the present economic status quo, but, lest ye get bored, I thought maybe it was time for us to change the subject of our conversation.

Something has been bothering me of late, a little political something. It seems that we have a few matters of fundamental political philosophy in this country that trouble my mind.

It is a central tenet of our modern theory that we live in a capitalist democracy, the economic implications of the which are clear enough but there is also the matter of certain political feelings espoused by the powers that be. The troublesome one of late being the belief that we should elect those representatives who will act in our best interest.

Now, there is a history behind this. You see it is important to remember that the fundamental principle of our government is a belief that we are a government of the people, that we as sovereign individuals federate a portion of our collective rights, freedoms and powers to a government (or as the case may be a state and a nation) and in so doing gain greater power/freedom etc by our collective strength.

To manage our collective affairs we appoint representatives in (and we shall simplify again to a national perspective only, my apologies) three distinct forms. Legislative, Executive and Judicial. Now, are we not feeling like we are back in grade school.

In any event those representatives then are free agents restrained only by the supposed notion that if they are not acting in our best interests we will find them out and unseat them. Not likely. But a good theory nonetheless. The question then for todays discussion becomes who is this "we" and what is "our" best interest.

You see the trouble is another fundamental principle of our democracy, the notion that we are a state where the majority enacts rules to the betterment of all. And I think if we all sat down and had a nice straight vote for something there might be a good discourse about what is the "right" thing to do, instead of just what is best for me.

Now I say"I" think, and I am sure that reader out there may disagree. You see I believe in a moral or right human-kind. Whereas all of you college educated cynics are sure to say that man is a self-serving and selfish creature that is only capable of acting in their own best interest. What a strange idea. Where did that come from.

Well, you see, you are a self-serving and selfish creature and so you feel it is o.k. to say that everyone is. Makes you feel better doesn't it. Easy to understand how such a wicked and wrong philosophy could spread from school to school, university to university throughout the land so easily. Everybody's evil, so I should be too. (Scary thing, I've been looking around, and I am starting to wonder just how many people are evil, nother story).

In any event so these self-centered people argue that the best way to be is self-centered and that they should elect only politicians that are equally self-centered. Blind leaders of the blind.

And that is where we are today, a bunch of politicians that are only interested in serving the people who paid the money to get them into office, which money was paid expressly to buy the requisite votes for a particular political agenda. Sad thing is, they all just sit and bicker and lead us to destruction, no one is actually getting what they wanted and why they sent a self-centered person in the first place, whose got the last laugh?

What was it supposed to be like? Well, you see, they have it close. As they often do. You were supposed to elect the person that you thought would do "the right thing for all of the people." Not the best thing for you. The whole idea was that we as a collective people could choose good men and women who would represent what is in all of our best interest.

Yeah, like thats gonna happen. Because we seem to prefer to act only in our own interests, rather than in the interests of the whole. But wait, do we really? What creature is man, are we truly lost to wickedness and sorrow?

Tune in later on this channel for:
-Progressive Taxation and you, what happens when socialism and capitalism have a baby.
-Science and Science Fiction, light, sound and other natural phenomenon for which I don't charge
and -War and Warriors, how you too can conquer the world for less than $20

Saturday, January 16, 2010

The Macarena, Buying things, selling things, and having lots of babies, an overview of the world economic system

I think I promised a few posts ago that you could:

(tune in next time for a discussion of purchasing power and intergenerational equity)

I have been remiss, and I dislike remissishnishishniss or something like that, as I said before, non-academic and anonymous, a safe place to play.

So what is this about? Well, have you ever heard of the baby boomers? What must have followed after then should have been baby not-boomers by comparison. I don't think anyone would disagree that the United States and the rest of our euro-white super allies are not having enough children. Worried about overpopulation were you? Shouldn't have been, this world will never be overpopulated, we have not even begun to fill it yet, our problems are social, economic, and political, not size oriented. Go drive in eastern Oregon and see if there is space to put the people, (or just fly across the country and look for any room where more people could possibly live, and dont even get me started on not enough food. Seriously don't go there, I think Ill go buy three more quarter pounders and throw out one and a half because I'm not hungry anymore after eating the fries and a zillion ounce drink.

So we didn't have enough children, what do you mean. Lets do some basic arithmetic. If X people buy land, age thirty years and then try to sell all the land to Y children, what is the price of the land after 30 years? Do you have an answer yet?

Ok so it depends. (as most things do). Is X or Y bigger. You see if our population grows because we have lots of kids than Y is large than X and the price of land will increase assuming there is a finite supply. If however, X is large than why than unless we can decrease the supply of land (come on California earthquake). Then the overall price of land must go down.

Something we are experiencing related to this is stock market prices. It seemed like a great idea that stocks are the ideal places to put your wealth your whole life and watch it grow. But if the X people buy stocks for the first 30 years and then the next 30 years they want to slowly sell their stocks and get cash and there are not X new people but rather Y children behind them to buy said stocks... DANGER WILL ROBINSON DANGER.

So are you telling me that the people who spent the last 30 years buying stocks are now going to be trying to sell them when no one wants to buy them? Well... not exactly. I want stocks, but you see I can't afford them. Ill buy them though, for the right price. Walka, Walka, Walka. What it means is that literally as we discussed in our first story, that those who thought they had great wealth preserved in the stock market in fact have very little saved up. Tear. This is because they thought they were storing something that people would want and there is no one around to trade them for it. I am belaboring the point, let me illustrate.

You have money, that is good, you worked for thirty years to save up this wealth, and now you want 40-50 years worth of "man hours of production" in exchange for all your work. But you had no children with whom you could exchange your wealth for production. There are not enough "men" who are young and want wealth, to exchange "man hours" with you.

It gets worse, you see there are able workers out there, but not enough of them, by having insufficient children we created a labor shortage, and now we are unwilling to sell our 30 years of work for the 20 years of work it will get us in a labor short market. (THAT IS WHAT WE ARE EXPERIENCING ECONOMICALLY RIGHT NOW, AND SOMETHING HAS TO GIVE) This shortage is further exacerbated by the laziness of the video game playing, movie watching, work life balance only generation, who do not want to work.


Because guess who will exchange with us, guess who has plenty of labor, guess who has plenty of children. Do the Macarena baby! Latino's to the rescue. Did you ever wonder why they just keep coming. Because market equilibrium demands it. So there is hope after all for the future. A future full of Latinos. (and chinese etc. on the international marketplace). Now allot of people have a beef with that. I don't care, I say let them come, and in fact lets get them enfranchised and no more of this illegal immigrant stuff. Why?

Well have you ever heard of artificial interference in markets. It usually ends badly. And that is what we are seeing with the illegal labor pool. It makes market exchange difficult and when exchange is difficult it decrease and you see recessions, now that we are at the time that mass redistribution must occur, we need exchange in the market like, yesterday ya know? Just make them part of the country and allot of our intergenerational equity problems go away, not to mention some crime because they are and feel like part of a society
(they become not so poor and we know who and where they live, drivers liscenses anyone?), not to mention financial problems since they start paying taxes that can be used to subsidize the health care and other services they are receiving.

Its in their best interest, they want to be part of our country, its in our best interest we want and need them to be part of our future. It just makes sense.