QE and the Promise of 2012

As the conjunction of 2012 heralds the ending of one baktun, a mathematical observation replicable in visible space a change is predicted.  The previous baktun of 394.26 years encompassed the glory of the Americas and the ascendency of man to the beginning of the space age.  The next baktun must continue the exploration of our visible universe and the Earth population must be stabilized at a size compatible with usable resources while preserving quality of life and employment.  If War burgeons, a descent into barbarism will be deserved and will occur.  We must plan for the future, not just let it happen to us. 

As the new Baktun approaches in December 2012 there are choices to be made.  September 2012 has brought to the world an outbreak of anger and the possibility of war on so many fronts the world would be devastated if they all occurred. 

Rioting Muslims blame the USA for the ugly production by a Coptic Christian Egyptian immigrant criminal who abuses our trust in freedom of speech.  He yelled 'FIRE' in a crowded theater and people have been trampled to death.  I think he should be deported to his native Egypt.  We don't need criminals like that here.  Netanyahu and Ahminjad are trading threats again.  Riots bloom in Lisbon over austerity measures 'needed' to address debt payments.  China and Japan disputing islands.  Hassles all over the world amid rising food prices again.

It is time to choose.

The cause of many of these disputes are historical of long time standing.  The insistence of Muslims that everyone abide by their code of conduct does not have the fresh breath of freedom.  Are they so insecure in their beliefs that they cannot weather criticism or even ridicule?  Are they afraid that an alternative world view will have credence?  If their beliefs are so strong then no alternative opinion would be noticed as a credible threat.  Instead, every possible infraction of their own code of conduct by outsiders, is responded to as if it were a mortal wound.  Muslims should have so much strength of belief that they are steadfast, no matter what is said.  They cannot control the world.  Nothing will allow Muslims to control the world and force all populations to say what they decree.  I would hope the peoples of the world are free of such barbarism.  That is the meaning of freedom of speech is that you will hear what you do not like but you must respect the right for it to be said above all else, lest you lose your freedom of speech also.

Controlling responses to ridicule and cultural differences is necessary in a civilized society that respects freedom of speech.  So if somebody makes a video you disagree with, make your own answering video.  Ridicule the religion of the maker, if you must.  That is how conflict is resolved.   I don't want the world to flame out over such intolerance and avarice fueled disagreements.

The shallowness of 'leaders' never fails to amaze.  QE will now be extended in an attempt to return the economy to bubble betting on real estate, which is falling flat due to actual lending standards in place, the paucity of jobs and a wariness on the part of investors.  Tech is the new moneymaker but our leaders cannot cut back on union construction worker demands.  Construction can no longer rule the economy.  The retreading of construction workers should be encouraged through the use of cut rate tuition.  The excess of workers in the construction industry must be recognized.     

Encouraging the trading of equities before any new businesses  upon which equities are based are created is even more bubble talk.  I think Dr. Bernanke is making a mistake in that he does not know that the economic succession must begin with the creation of a usable object, the trade or sale of the object, the investing profits back into the business to improve it, and the paying of an affordable wage for workers.  That is the process by which real equities in businesses that produce jobs are created.  No other way will suffice.  Anything else is bubble talk.  Think Apple!

In today's economy, the production of a very real IPhone is producing jobs.  The trading of derivatives produces no tangible object and produces no jobs but creates huge income for a few while tying up money.  In today's economy innovation of a new object will create jobs.  I think the mortgage backed securities should be banned, along with all the derivatives.  At least give them status in Vegas, where that kind of betting is encouraged. 

As for the government, why not fund innovation?  I remember the fifties, when the Russians orbited above us and suddenly the schools went all scientific and government backed research and development because of the cold war and the threat of attack from outer space.  We were the first to the moon and the space program created many jobs over decades.  I like the current meld of government and private enterprise development of off planet resources.  I believe that tangible assets are to be had in the form of mineral resources off planet.  We are like humans wading across the straits and looking towards Alaska and all to the South.   They did not turn back and nor should we.  This is an opportunity for investment in the future that would pay off for our descendents and the younger ones among us.  We must consider the future if there is to be one.       

                                                                       

Housing Hypocrisy

 

 

I don't understand why economists automatically assume that housing must always be escalating in value or the economy is not doing well.  They have chosen the largest big ticket item and decided that people should always be paying more and more for it as a system to base their economies on endless growth. 

Their economy is based on escalating real estate costs and the benefit to the people is that they can then borrow money against this sudden unearned equity in their property.  They assumed that this possibility is a short term good because it circulates money but it takes a lot longer to pay it back than it does to spend it.  That's called a recession, one caused by excessive credit or by another name the future was mortgaged and the payback time is the recession. 

Late night TV suggests that rents are now being raised and there will be a big rental squeeze in order to charge sky high rents.  So now the foreclosed upon will be faced with high rents, no credit and no way to provide for their families.  Sounds like a recipe for civil unrest to me. 

How about an alternative scenario where housing remains more or less static in price?  What would that do to the economy?  Perhaps the sliding scale interest on mortgages is a bad idea because it causes uncertainty for the homeowner.   Whatever happened to fixed rate mortgages?  Perhaps the types of mortgages should be limited to those that promote the long term health of the economy.  

If property remained static in price and the mortgage payments were on a constant amount, perhaps more personal financial planning could occur that is not based on property equities, like more savings, more predictable discretionary spending and maybe even more education as an investment.  Having to plan for constant inflation destroys equilibrium.  Mr. Bernanke plans for 2% inflation, which means savings is worth 2% less every year and items purchased cost 2% more.  Why do they say this is beneficial?

Swift Justice is Needed

I remember stories of the wild west in the nineteenth century, when the code of the west lived in the hearts of many.   Justice was quick.  Killers were hung after declared guilty during a trial.  If the killing had been witnessed by credible citizens, the execution was quick. 

Remember McVeigh?  His trial was quick and his execution quickly followed.  The lawyers did not milk the case for years and years while the murderer was coddled with psychiatrists and consultants and the lawyers ran up the bills.  Hell, these days a mass murderer is good for lawyer income for decades.

Look at Loughner, the mass murderer and maimer.  This guy is obviously guilty of the crimes.  There is no question that he did it.  He cannot be rehabilitated and released.  He does not deserve to live.  Why must the taxpayers pay for plane trips, psychiatrists, tests, lawyers and all the expensive trappings that will never change the fact that Loughner is a criminal?  Our society does not have money to waste on this kind of expensive exploitation of a tragedy. 

Now this latest creep in Colorado who ambushes innocent people is being set up for years and years of lawyers, tests, psychiatrists and all the tax money he can possibly spend defending himself against the indefensible.  People saw him do the killings.  I don't care if some expensive psychiatrist intones that this killer is insane.  Killers like this need swift justice.  The lawyers and all those who make their livings in the court system should not be allowed to exploit these tragedies for personal gain. 

Whatever happened to common sense?  The delay of justice dishonors the families of the victims and the victims themselves.   These killers should have a speedy trial and swift justice meted out.  If an appeal is made, then it will be done quickly and if denied, justice will prevail quickly.  The massive slowness and complexity of these trial 'preparations' and the lengthy appeal process actually encourages crime, in that justice will not be swift. 

As long as murderers get away with it by cruising through the system paying lawyers with tax money, the murders will continue.  If potential murderers knew a convicted murderer was rapidly executed, possibly that would be a deterrent.  I think going to prison is worth it to these killers.  Let's give them a surprise.   

Fast and Furious

Fast and Furious Update: 

This is a short history of events leading up to President Obama citing Executive Privilege over data acquisition requests by Rep. Darrel Issa (R-California), chair of the House Oversight and Government Reform Committee. 

House Speaker John Boehner asked, "So what is the Obama administration hiding in Fast and Furious?" (Washington Times, June 22,2012)  Sen. Chuck Grassley of Iowa is the ranking Republican on the Senate Judiciary Committee.  He wants to know how Fast and Furious operated and the identities of those responsible.

The House Oversight Committee asked for documentation on these and other issues:

·         A letter containing false information concerning Fast and Furious was released to Congress under the aegis of the Attorney General's office.  This letter dated Feb. 4, 2011 was addressed to Sen. Chuck Grassley.  It was signed by Assistant Attorney General Ronald Weich.  Later Attorney General Eric Holder defended Mr. Weich by saying he had received false information about the gunrunning program, and then retracted the Feb. letter in Dec. 2012.  Mr. Weich resigned in mid June, 2012.  In March 2012, Mr. Weich disregarded a supoena from the Committee for further information on Fast and Furious.

·         Whistleblower persecution within the ATF concerning Fast and Furious is ongoing.  I heard one of those whistleblowers speak at a rally in Oro Valley.  Public safety was the main concern of the whistleblower I heard.  I know the Fast and Furious debacle endangered the lives of all law enforcement in the southwestern states.  One border Sheriff said he was never informed of the program.  We need to know the chain of command that led to a repeat of the previous ATF  gunrunning.  The Committee wants these documents.

·         If wiretaps were used during Fast and Furious, the Committee wants information concerning what senior official reviewed the program and who issued the wiretap order.

The Oversight Committee, chaired by Rep. Issa, voted to cite Attorney General Holder for Contempt of Congress for refusing to turn over the information needed by the Committee to obtain actual oversight of the entire Fast and Furious program.  A full vote of the house is expected the week of June 27, 2012.

President Obama's press secretary dismissed the importance of Fast and Furious, calling the information requests a political stunt.  President Obama asserted Executive Privilege in order to prevent delivery of the relevant documents, which action is protecting somebody within the Justice Department from scrutiny by the House Oversight Committee.

Attorney General Eric Holder has now been voted in Contempt of Congress for his refusal to deliver the requested data, including the chain of command leading up the Fast and Furious tragedy.  I thank Sen. Grassley and Rep. Issa for their continued interest in this program that allowed the Feds to set up an illegal operation in Arizona without the knowledge of local law enforcement. 

Eclipse of Sun 2012 Tucson

Unintended Consequences in Government

                                                Night blooming cerus Tucson Arizona USA 

As I grew older my understanding of long term consequences of social engineering, regulations, tax policies, R&D priorities and other phenomena has grown.  A course of action that is beneficial in the short term might not be so beneficial down the road.  An example of that is a recent celebration that consumer debt had risen and thus helped the economy.  As this debt comes due, less spending will be the result, which will negatively impact the economy for as long as it takes to pay the debt.  Interest goes to the moneylenders, who sock it away to gamble on derivatives, shorts and other nonproductive 'investments'.  Investments like these used to be called a 'stake' in gambler's lingo.  Maybe this short term gambling leads to long term malaise of the economy. 

The betting on whether a country will default or not should be confined to Las Vegas and other gambling centers.  Huge sums bet on national default in today's world will result in activity that brings default about, in order to cash in on insurance purchased.  It's like buying life insurance on your neighbor, then setting him up so you can collect.   Who is investigating if this is happening?

Student debt is of much discussion and a huge debate whether to raise student debt interest rates or not has not produced a solution to the problem that graduates don't have jobs waiting for them.  As a student, I remember knowing that degrees in the arts might not be able to get a job after graduation.  Students choose their major and apparently the student loan people do not limit the debt to people who are specializing where the jobs are. 

Why have the costs of education versus income changed so much?  The Arizona constitution guarantees an education at reasonable cost.  Is student debt a reasonable cost?  For how long is this debt reasonable or is it reasonable to demand a long term lien on future earnings in order to go to school at all?  Has it become so that the average student MUST assume debt in order to access school?  That is not a reasonable cost.

 When I entered the University of Arizona in 1963, tuition was about $424 a year plus about $160 more for books.  Working at $3.00 an hour, it took about 5 weeks to earn that money by working at a service job.  Now, in state tuition at the UofA is $9,286 a year, which would require about 1,160 hours of work at $8.00 an hour, slightly over minimum wage.   Now a student would have to work 29 weeks to earn the tuition, while in 1963 a student would work just 5 weeks to earn the tuition.   

Economic problems result from little planning and the student loan problem is a good example of what EZ Loans can do to a society, as future productivity is harnessed for the present, resulting in future economic slowdowns based on the debt service.  This harms the consumer market because the debt prevents spending on widgets and the few moneylenders who are amassing the money can only use so many widgets. 

Unintended consequences from policies and thoughtless legislation have resulted in detrimental effects towards perpetuating the long term culture.  The formation of unions when workers were little more than slaves was appropriate for the time but the politically powerful unions have now lobbied their advantage throughout the nation.  The unplanned long term consequence of requiring union membership is seen in rising costs and fewer jobs.

 Another phenomena is that of the government assisting the unions in control of workers by forcing the deletion of union dues from workers' paychecks instead of the unions collecting their own dues.  It appears that some of these organizations are so good at getting their workers such high wages and benefits that the widgets they make can be made for much less elsewhere, and shipped here for sale at a profit.  The short term planning is always higher wages and more benefits, not whether their demands will bankrupt the business in the long term.  Forcing workers to finance organizations like these is not going to result in economic recovery.     

The union stalemate creates very few high paying jobs and expensive products that cannot even compete locally in the global economy.  The laws forcing union membership  are actually preventing access to a willing and able workforce who would work for less, which would allow the production of a lower priced product.  Some unions are essential, but membership should be voluntary, with a secret ballot.  Competitive hiring would allow for more workers to be hired, at a lower rate than union scale.  The issue of 'benefits' must be addressed next.  

The long term consequences of requiring employers to buy health insurance for their workers is affecting our economy today.  Workers in hazardous jobs like mining and police work should receive coverage of job related health care costs, which was the original intent of activists who saw workers suffering from job related maladies who were then replaced without regard for compensation for injuries.  Such is the moral basis of capitalism, that businesses must legally be bound to take care of workers injured on the job but the unions have ballooned 'benefits' into total coverage for every wart for the worker and his family, even after they retire.  And the insurance companies responded to the mandatory insurance requirement by raising their prices.  Some businesses are not hiring workers due to the unpredictable escalating costs of providing insurance.

I say go back to the free enterprise system and cancel all the mandatory insurance requirements.  If an individual wants 'coverage', then that individual can find their own insurance plan and pay for it.  Employers will then be relieved of paying and arranging for insurance for employees and employees will be free to spend their money however they like.  There is already a low cost health care option in the form of the urgent care outlets and drug store nurses, who can serve the locals' minor needs quickly and inexpensively.  Individuals should not be required to buy health insurance.  Let the market determine health care costs, not the insurance companies.  The populace and employers should not see an ever increasing percentage of their income go to insurance. 

The government should not be in the business of requiring purchase of anything.  Taxes are already a burden.  The long term consequences of mandatory insurance in the workplace has been inflation in health care and insurance costs.  The insurance brokers and  health care suppliers continually raise prices, while the populace has no say but must pay ever higher costs. 

Short term thinking has resulted in problems for our nation.  The EZ loan caused housing bubble and the sale of worthless derivatives based on the subprime loans caused politicians to vote to bailout the institutions that insured those loans, rather than the original investors who were defrauded.  The long term consequences for this bailout remain to be seen, but the recent J.P. Morgan financial losses point to more of the same behavior that caused the financial crisis. 

Repeal of the Glass Steagall Act was a prime example of short term thinking that had negative long term consequences.  I disrespect anyone who had anything to do with that, including President Clinton, who signed it.

                                              Reaching For Rain  

Qualifications for Senator and Representative

The New Arizona Senator

In Arizona this latest election is particularly important, due to the open Senate seat the voters will be filling for the new term. 

What does Arizona need from our new Senator and our Representatives?  A summary of situations in Arizona will reveal what is needed.

As of March 2012, Arizona has:

·         high foreclosure rate per capita

·         high dropout rate from public schools

·         drug smuggling problem

·         lack of excess water

·         many illegal immigrants

·         significant debt on governmental levels

·         abundant labor force and housing

·         open space and cheap land

·         high unemployment

·         Some valuable mineral resources

·         national parks and recreational areas

·         huge Indian reservations

·         a long border with Mexico

·         military bases and aerospace industries

A new Senator should have an intimate knowledge of these issues and others.  A senator should also be cognizant of international issues also, particularly since Arizona shares a long international border with Mexico.  A good Senator will work for their home state and for the greater good of the union of states called the United States of America.   Notice that I did not say that our new Senator should be responsible to donors, contributors, PACs, campaign workers or churches.  We don't need any Senators that are bought and paid for by some special interest.  We don't need any Senators who cater to lobbyists desires rather than representing the needs of the constituents. 

The first thing that should be on a Senator's mind is the revision of the General Mining Act of 1872.  Arizona has been heavily exploited by mining interests and has little to show for that exploitation.  Temporary jobs are now gone and the decimation of the landscape remains in the form of pits and dumps and poisonous runoff.  This 1872 law was enacted to facilitate the mineral resources of a developing nation, but is now used by foreign mining interests to exploit the mineral resources of Arizona for profit and jobs in foreign nations.  Responsible representatives of Arizona on all levels should call for revision of the old 1872 law before any more huge mines are permitted, in order to obtain state and federal  revenue and ease the tax burden on citizens.  Arizona is running out of resources and what remains must be protected against exploitation as a national security concern.  Any new Senator or Representatives must recognize that stripping all of our nonrenewable mineral reserves and allowing them to be taken out of the country is poor long term planning.  As world supplies dwindle, the price will go up to repurchase those reserves. 

A Senator must have a commitment to fiscal responsibility.  Even the Federal Reserve has stated that the future will be unsustainable if spending and borrowing is not limited.  It is obvious that sometime the deficit problems will be similar to Greece, where the income of the nation will sustain the nation but not the nation and the payments being demanded by creditors.  Wars have been fought over less. 

I wonder if a legal challenge about taxpayers being forced to pay for debts incurred beyond the elected officials' term of office would be in order.  Why should a politician be allowed to run up debt, without regard to the ability to pay it back or without regard for the people who are paying for it?  What was achieved by the borrowing and is it worth the interest and payments for a long period?  Sovereign long term borrowing should be strictly prohibited in all constitutions unless voted upon by the taxpayers.  A debt limit is supposed to protect taxpayers.   No more off budget non-declared wars.  The taxpayers need protection from this debt load.   Senators and Representatives should be ready for this gigantic hassle.

As for Arizona, Tourism, Recreation and Retirement Communities are important sources of renewable income along with the military bases and aerospace industries.  Arizona Senators and Representatives should be ready to support that which benefits the state.  The earmark controversy should end with a ban but for now I would expect our Senators and Representatives to obtain earmarks for our state.  It's foolish not to. 

Arizona has a high foreclosure rate and the economy was damaged by the boom and bust.  An Arizona Senator should be well versed in the facts concerning the recession, the bailouts and their results, current litigation concerning the housing bust, the enabling legislation that precipitated the crisis, the unregulated trading in oil futures and other issues.  We cannot afford to send an unread individual to Washington to represent us.  We cannot afford to send an individual to Washington to represent us who will depend on lobbyists to brief them on pending legislation.  If a candidate doesn't want to read the legislation they are voting on, they shouldn't run.  This decadence must be corrected.

I think lobbying and fundraising should be banned from Washington while  in session in an effort to curb dereliction of duty and corruption. 

Illegal immigration has slowed because there are few jobs but is still an issue due to the lawlessness of illegal immigration and the related drug smuggling.  Thus, an ideal Senator will sponsor legislation to revise immigration policies, a process that should be led by border state Representatives and Senators.  It appears that the federal government has not sent grants to Arizona hospitals and other institutions that are serving resident illegal immigrants at state and charity expense.  Money from Washington to help out those institutions would be a benefit to Arizona.  Our new Senator should work for those goals.

Considering the state of the real estate and related industries in Arizona, the retention of federal land as open space and national parks for recreation and ranching brings in tourists and college students, which benefits the local economies.  More land on the market will only erode land value further, due to the housing glut caused by overbuilding and foreclosures.  It is suggested that empty housing and commercial units be heavily taxed, like Israel is now doing in an attempt to lower rents.  If there is any tax break taken for foreclosures by the lien holders , it should be cancelled.  A tax  on foreclosing and on holding the unit empty should be instituted instead, which will discourage foreclosures.   Understanding complex tax issues is necessary for a Senator or Representative.   They must be able to vote for a bill that displeases a big donor, because the good of the country is more important than any donor.  Even a donor will ultimately know this. 

Arizona's water problems are not going away.  As the drought continues, water supplies are dwindling.  The declaration of drought on the Colorado River complex will cut supplies to Tucson and other areas, which will impact economic development and devalue land.  It is obvious that heavy water users in industry are not feasible in Arizona, with a falling supply and rising rates.  Arizona needs renewable businesses in aerospace, astronomy, medical research, defense, assembly lines, the educational institutions, and other businesses that do not require much water to operate.   There has been some talk of an international distribution center to be located near Tucson, related to the new Guaymas, Mexico deep water port.  It is important that our Senators and Representatives understand the business need to cooperate with Mexico.  Water resources are critical in the border states and a dialogue with Mexico is needed.   International trade is a huge business and Arizona is a part of that.   Arizona's border with Mexico is an economic advantage for our state and more could be made out of it.

Smuggling is rampant where ever a government attempts to control the free flow of goods, illegal or not.  Many Latin American countries, including Mexico under President Calderon, want to decriminalize drugs in order to stop the crime wave, rather like the ending of Prohibition of alcohol in the USA ended an organized crime wave.  The emissary to a recent meeting where this was discussed was Vice President Biden.  This issue is not going away.  The lucrative nature of this smuggling has caused vicious turf battles but the participants are able to halt the violence for a visit by the Pope, which shows  power.  This phenomena will not vanish and practical ideas to cope with the situation are needed. 

The responsibility inherent in the Senate and the House to cooperate and produce compromise in order to solve fiscal problems cannot be ignored.  The foolishness of signing a pledge to never raise taxes crushes a valuable tool to control social damage from the private sector, such as the subprime scam.  None of the perpetrators should have had a tax break on any of the failed  investments or foreclosures brought on by the housing bust.   There are proposals to rewrite the tax code and our Senators and Representatives must be knowledgeable in that area.

Another area of expertise needed by Senators and Representatives is that of the  bureaucratic focus of organizations, which will determine policy wherever possible.  A thorough investigation of the mortgage lenders FANNIE and FREDDIE and a comparison of their stated goals and their actual goals must be made and steps taken to change the business culture that led to a nonproductive focus.  They wrote policy to make money on creating mortgage securities rather than on financing affordable housing for the population qualified to take out a loan.  The question of mortgage derivatives, the involvement of Fannie and  Freddie and the financial adventurism that has led to questionable investments must be understood. 

In conclusion, any candidate for office must be able to understand that long term planning is crucial to our survival as a nation.  Dedication to short term planning is foolish, like forgetting to gas up before you hit the interstate.  A lobbyist is not AAA for a politician out of gas.  The voters need politicians who will read the documents, research the material and make choices on the basis of long term planning with prorated short term goals that benefit the people represented. 

HIGH ENERGY PRICES

The recent runup in gasoline prices to $3.15 wholesale as of 24 February 2012 and the ongoing predictions of further price hikes do not bode well for this feeble economic 'recovery'. If the price of fuel continues to rise, recovery will metamorphose into recession or depression, depending on how strict the definition used.


It appears that warmongering against Iran has a price for United States consumers, as the price hike in fuel is attributed to the hassle. The WMD idea has reared its head again as an excuse for attacking Iran, because they have claimed the right to nuclear energy as a source of electricity for the population. I am in no position to claim that Iran is building a bomb or not, as I am not privy to classified information. Common sense will say that if someone is threatened, then they will take action in defense. One way threatening privileges is not a realistic goal, however.

So the sanctions against Iran went into effect and the world now pays more for fuel as a result. Warmongers on both sides have created another economic crisis for the world as this price hike will also raise food prices and production and delivery costs for everything, as the poor of the world pay for saber rattling and punishing. I actually heard a pundit rejoicing that the Iranian people are suffering due to the economic embargo, like they deserved to be punished for the actions of their leaders who refuse to back down over the nuclear issue. Insensitivity is where hate comes from on both sides. I heard the average Iranian makes $400 a month.

I even heard on TV that the Greek 'crisis' must be paid for with higher energy prices for all, since major oil producers contributed to the bailout fund and they expect to be paid back. Why is Goldman Sachs so into the Greek financial thing? Why not tap the USA for that money just in time for Memorial Day and the summer vacation season?

So is the warmongering worth it? Has anything been accomplished? Is the drain on the USA economy due to higher fuel prices worth what has been gained? Do the people of the USA really want the common people in Iran to suffer? I don't think so. This media manufactured crisis is demanding war when serious diplomacy is always the answer. I'm tired of the press and foreign nations choosing diplomatic issues for our government. I'm tired of the expense of war. This verbal war over nuclear energy in Iran is costing every citizen money every time they fill their gas tank.

It's not worth it. Settle the hassle some other way.