Not the way it works....

Today's New York Times Editorial:

He should make clear that the overarching objectives are to create a profitable company that makes cars that people want to buy, and that are more fuel-efficient.

Listen NYT, your economic skills have never been stellar. So it's not like you let me down. But I'm telling you, you can EITHER make cars that people want to buy and hope they are more fuel-efficient OR you can make cars more fuel-efficient and hope people want to buy them. But you can't dictate doing both. You may get lucky and both happen, but you cannot dictate it so. This GM situation is a complete debacle and is only going to get worse. I've put off blogging about it because the possibilities for terribleness taking place are endless. Protectionism? Unwillingness to close politically favored dealerships? Unwillingness to close plants for political implications? Ford having to compete with the government?

The NYT's needs to realize: to create a profitable company, make cars that people want to buy at prices they want to pay. GM specialized in this for decades, they became terrible at it and have failed. Now you think you can step in and do a better job simply because it can't be that difficult to manage a car company. You're right. It couldn't possibly be difficult to analyze consumer wants, coordinate purchasing with manufacturing with distribution with sales with service, decide pay structure, designate R&D projects and advertise...while staying politically neutral. You're experience as government bureaucrats have given you all the skills sets necessary to successfully run an automotive behemoth.

We're screwed.

Schooling the Public

New York Times. Column on education. A few of my thoughts:

Between 2004 and last year, scores for young minority students increased, but so did those of white students, leaving the achievement gap stubbornly wide (emphasis mine)

I'd like to see the 'but' changed to an 'and'. Is that not what we want as a society? Minorities scores increased? Great! White kids (majorities??) scores increased? Equally great. Why is it a bad thing that the white kids had improved scores as did the minority students? Had the minority students' scores improved and the white kids' scores worsened, would the NY Times be celebrating this fact? I find the connotations of this sentence troubling. I know the point of No Child Left Behind is to close the gap, but I don't think we want that gap to be closed at the expense of one group versus the other.

The results point to the long-term crisis in many of the nation’s high schools, and could lead to proposals for more federal attention to them in the rewrite of the No Child law

Let me get this straight. The results of a federal public schooling program have been lackluster and disappointing, so the answer is for proposals to do more? I personally would love to see more responsibility to be delegated to the states and cities. I'm also of the flavor that advocates giving vouchers to parents and letting them decide where to send their kids. I think this is the most disgusting position the Democrats maintain. If we were serious about helping improve the prospects of general elementary education, we be open to radical reformation of the system. Innovative, entrepreneurial and varied. Hopefully Obama is as brilliant of a politician as some claim him to be. I'm praying that he's keeping the Teachers Union on his side to get re-elected in '12, then saying 'Screw You and your monopolization of the system and abject failure under that monopoly; I'm going to truly help our school system by doing some crazy shit with Arne Duncan'.

I've rambled and gotten off topic. I'm done.

Yeah, It's Tax Day

Whether or not you're going to a tea party today (I am not, but I like the idea), taxes are due today. I just finished reading a bevy of tax-related articles and the more I read, the angrier I became. Articles penned by people of all sorts of different political bases continued to stoke the fire burning inside.

1) Federal taxation makes me sick. Why the heck is it so high? Part of this logic is based upon one's ideal government structure. Those of us that believe a top-down mentality is best and that Wizards of Oz can pull levers and push buttons to manipulate society into achieving the most ideal society yearn for taxation to be centralized. Think of it as government's form of economies of scale. Funnel all the money into the central entity, and that central entity is best able to delegate where and to whom that money goes. Put the smartest people together and they can make magic happen. On the other hand, those of us that believe a ground-up mentality is best and that some sort of Hayekian spontaneity is the best path yearn for taxation to be decentralized. Think of this path as one that promotes experimentation among different communities. Some communities might fall behind at first; some communities may thrive at first. But innovated government is made possible and it opens up the feedback loops desperately lagging in big government.

I'm in favor of the latter, the Hayekian spontaneity. I'd much prefer to see local taxation at 35% and federal taxation at 7%, meaning local communities and governments can control delegation of spending. Not only does dispersal of tax money let locals have more say in the appropriate allocation of said money, but it weakens the leviathan located in DC. In fact, this was one of the main intentions of the Framers of this great nation. Jefferson was well aware that a  large government monopoly poses a direct threat to individual liberty:

"The natural progress of things is for liberty to yeild, and government to gain ground."

The intrigue presented by pooling our money in a central location is understandable at first glance. But allowing that much monetary power to be placed in so few hands is dangerous. In the best case scenario, those in power are benevolent angels that truly have the public's interest at heart. But even then, if those angels make a mistake, it's an expensive mistake. No small group of technocrats can effectively dole out billions and trillions of funds as planned. The human brain is incapable of accomplishing this mighty task. But what if at the foci of government, instead of angels, we have humans, prone to the whims and desires and manipulation of others. Favors? Corruption? Where would it end?

These individual tea-parties taking place around the country will no doubt draw some attention from federal legislators. Republicans will surely use these tea parties as an tool to promote an agenda they failingly adhered to for the last ten years. Democrats will use them as a impetus for investing in long-term investments like health-care technology or something similarly silly. But thousands of people acting in collaboration around the US will likely have little direct impact on the federal government. If, however, power was localized, these tea parties would have much more impact on the spending patterns of government. And herein lies the catch, the Federal government has been set up to insulate itself from nation-wide criticism. Local politicians are held accountable for their actions much more so than those elected to go to Washington. The people of Connecticut may be fed up with Chris Dodd's nincompoopery, but the fact that he is such a prominent Senator with legitimate power, means that by voting him out, the people of Connecticut will lose a powerful voice in the Senate.

I can be convinced into pooling money for military spending, but education? farm subsidies? healthcare? creating green jobs? Let those decisions be made by the communities of America. If you don't like your community, it's a lot easier to move states than it is to move countries. It's a lot easier to disown New York than it is to disown the United States. In general, I think people are proud of their home states. I know New Mexicans are surprisingly stout defenders of the Land of Enchantment. But I think (for the most part) people are tremendously more proud to be from America than any one particular state. We can all live under the umbrella of legal statutes and awesomeness that is America, but let's give the states more power to spend their constituents money.

2) Ok, that first part turned out way longer than I anticipated. Let's chalk that one up to just how feverish the articles made me. I also want to talk about BHO's charity tax. Before hearing the details of the adjustment, I was a little worries. But then I listened to him address the issue at the inaugural White House Press Conference and I became a fan of the logic behind the change. Right now, the top brackets of income earners wishing to make a contribution to charity are able to deduct 35% of the donation from their taxes. Lower brackets are able to deduct only 28%. Quoting the Washington Post:

Obama said the change would help equalize the tax break for those donating to charity. "When I give $100, I'd get the same amount of deduction as when some -- a bus driver who's making $50,000 a year, or $40,000 a year -- give that same $100," he said, adding that the provision would affect about 1 percent of Americans.

The part that frustrates me is that Obama proposes lowering the tax break for that highest bracket. I know Obama is making this adjustment to increase federal revenues, but if you really want to make things more "fair" or "equalized" by changing this discrepancy, then why not give a bigger tax break to the other 99%? Move the tax deduction for all Americans to 35%. Now that's change I can believe in.

And we're back....

My hiatus was restful. I hope you were able to survive without me. I hope you are prepared for a slew of posts. Let's start with this one:

So, I'm reading this article today and it's pretty anti-Obama, but that's not really the part I want to blog about. Let's focus on this segment:

In reality, of course, all of these choices are hard choices. Do we choose the warm feeling of a low-growth, government-managed economy over the dynamism and creativity of capitalism? Do we choose to destroy potential human beings in order to potentially save human beings? Do we stop law enforcement measures to preserve civil liberties or do we fight the threat of terrorism with every tool at our disposal? Do we choose green living over the continued expansion of our economy?

I do agree with Obama that fundamentally 99% of all Americans want the same thing. Heck, 99.9% of all the world wants the same thing. What is that thing? It's a combination of peace, love, prosperity, fairness, spirituality and a host of other abstract concepts all rolled into one. A small group of people aspire to murder, pillage, and destroy; and I believe that even most of those people are doing so because they want to think it will bring about the aforementioned goals of peace, love, prosperity....

I try not to see the political spectrum in a 2-D linear fashion so much as in a 3-D (or even mind-blowing 4-D or 5-D!!) dynamic fashion. At the core of this dynamic structure is that amalgamation of abstraction (peace, love, prosperity...). All progressives occupy the same latitudinal line in this symbiotic  structure. All conservatives occupy their own same latitudinal line as well; all libertarians occupy their own latitudinal line; all fascists/fundamentalists, etc. occupy their own distinct lines. I call this latitudinal line, the 'classifiable latitudinal line' (i.e. the 'class' of basic ideology to which they ascribe). Next, each individual fits somewhere upon that 'classification latitudinal line' depending upon the extent to which they believe in that particular credo. In my opinion, almost everyone in the world fits somewhere amidst this structure, all equidistant from the core goals at the middle. I try to avoid 'left-wing'-'right wing' dichotomies. Too limiting.

Ok, enough abstraction and back to the selected quote from above. Some Americans have priors that lead them to believe that universal healthcare for all is an unalienable right metaphorically guaranteed by the Constitution. Others believe that the right to bear arms means you have the right to carry a bazooka in the trunk of your Toyota Tacoma. As Americans, we are at a time crucial to the path of our nation. Do we want the "warm feeling of a low-growth, government-managed economy" or do we prefer the "dynamism and creativity of capitalism"? I think the former is flawed and here is why: it discredits possibility. Read Julian Simon's "The Ultimate Resource". Humans are ingenious. If there is a problem, humans will fix it. The majority of that fixing takes place in America because it has an environment friendly to fixing. 

Obama wants GM to produce energy efficient cars, but the reason GM hasn't produced them yet is because today's technology isn't sufficient to justify the costs of production. Granted, GM had (has?) lots of other problems, but the fact that NOBODY is successfully marketing the utopian "energy efficient" car is a sign that it's not feasible yet. Do we have the technology? Yes, in a way. If you sat a bunch of scientists down in a room and told them to make a battery-run car that can clear 80 MPH and needs only 2 hours to charge fully, I'll bet the scientists and engineers could find a solution. Scientifically it's possible, but economically? No. Lesson One in Economics: Life is about trade-offs. This battery could be produced but one of these batteries would cost millions. And who's going to buy a million dollar car? Believe me, companies and entrepreneurs and people tinkering in their garages are trying to solve this problem. And when they do find a solution, they will be handsomely rewarded. Remember when John McCain idiotically campaigned on the notion to offer a government prize/reward to anyone who can create a battery that fits a certain qualification? The free market would do that anyways Johnny!!!! And that prize would be a lot more than a measly million bucks (or whatever the number was).

Anyways, that's why I'm pro-growth/dynamism/creativity of capitalism. No other system we have encountered has allowed prosperity to multiply so. Despite all the attacks upon capitalism, and all the regulatory misshaping of capitalism, it still thrives. Capitalism is persistent, it is resilient, and it is the best way to help solve the problems of energy efficiency and healthcare and whatever else it is you care about. Most importantly, in my opinion, it is the best way to reach that abstract nucleus that I mentioned earlier.

The Flower in the Shit

Market-wise, things look bad, but maybe this is just some giant ploy by 奥巴马. The majority of the wealth destroyed so far has belonged to upper-class rich folk. Their portfolios have been more or less decimated. So, if I'm looking for the silver lining, here is it:

Obama wants to crush the stock market; have it reach all time lows; issue a tax-rebate/stimulus checks to the lowest 25%; have them invest those rebates/checks in the newly depressed stock market; reap the benefits of stock price appreciation as 奥巴马 reverses course and sets up on the path to prosperity that he promised.

It would help "spread it [wealth] around" (as he said to Joe the Plumber) and it would be educational to all the people buying stocks for the first time.

I am really trying to see the bright side in all of this mess.