An OWS Protester and a Communist Walk Into a Bar

I've commented a little on some of my thoughts about the Occupy Wall Street movement. As someone who values personal freedom and liberty, I'm at odds with many of the OWS ideas, natch. Still I can empathize on many of their complaints and desires to make our nation better. However recently someone made the statement to me that to describe OWS as class warfare was laughable. I don't think that was a very intelligent statement. Sure many Republican pundits like to use the term class warfare way too much, but that doesn't mean the term is always invalid.

So is class warfare applicable to OWS? Well let's imagine a hypothetical OWS protester and a hypothetical modern Marxist. Why a Marxist? Because class struggle is a key component to Marxism. What would a Marxist think of statements like "We are the 99%" and "we are getting nothing while the 1% is getting everything"? I think the Marxist would agree with these statements. Once the Marxist realized that proletariat was an outdated term with a lot of negative connotations, I think he would be quick to switch over to saying "the 99%" instead. Who would be more likely to say "capitalism has failed democracy", the OWS protester or the Marxist? Seems like both. Who would encourage participation in general strikes? Who would be more likely to say "Join the global revolution?" Ok maybe that's too easy and meaningless. Who would favor using the force of the government to take from one group (the 1%) to give to the other group (the 99%)? Now don't get too angry about that statement. I'm not saying that this should or should not be done, just that it is a statement that I think both an OWS protester and a Marxist would agree upon.

My point is that on many issues, it is impossible to distinguish between an OWS protester and a Marxist. Does that mean that OWS protesters favor class warfare? No, it does not. However it does suggest that there is plenty of room for a reasonable person to think that OWS does indeed favor class warfare. Of course OWS is notorious for its fractured message, but I've tried to pull all of the above from its main websites and events. It seems to me that everything I've quoted would be things that the majority of OWS protesters would agree with. Those just happen to be the same things that a Marxist would agree with.

Occupy Wall Street and The Tea Party

The Occupy Wall Street movement is an interesting one to me. I have a lot of empathy for the people involved in the movement. They make a lot of great points. They are correct that the wealthiest 1% have an incredible amount of influence with our government. This is particularly true of corporations in the top percentile. The amount of influence (control) wielded is obviously disproportionate and flies in the face of a country that has a republic style of government.

The Tea Party movement is also interesting to me. I have a lot of empathy for the people in the movement. They make a lot of great points. They are correct that the government is too powerful and in so many cases does much more harm than good. The amount of power wielded by the US government flies in the face of a limited government as described by The Constitution.

Both of these groups are outraged by the status quo and for good reason. However these two groups seem to be at opposite ends of the political spectrum. Most consider OWS to a be "radically progressive." I've heard some people call them communists or anarchists. On the other hand, the Tea Party is considered to be "radically conservative." I've also heard people call them anarchists.

As you've probably guessed by now, I think both groups have way more in common than they would care to admit. Now demographically they are probably quite different, but that doesn't have to matter. However we have seen the Tea Party get eaten up by the Republican Party. Similarly we are already seeing the Democratic Party eat up the OWS group. President Obama wasted no time getting in on this, just as an incumbent President coming up on an election year should.

So in the end these two groups will be consumed by the very powers that be that they oppose. This is part of how the two party system works. In the end both of these groups just become instruments of the divisive, "rally the base" politics that have been the norm for decades.

I'd love to see an alliance between the two groups, which would be a nightmare for both the Republican and Democratic Parties. Of course there is a fundamental difference between the two groups. As I see it, the OWS folks think that government can be fixed and can "do the right thing." They seem to want to use the very instrument of their misery as its own remedy. The Tea Party philosophy is that the government cannot be fixed, so the only way to lessen the damage that it inflicts is to limit its powers. One could say that the OWS folks are optimistic and the Tea Party folks are pessimistic.

Personally I don't totally agree with either group (surprise surprise!) My philosophy certainly leans toward the Tea Party. I think that in a republic or representative democracy, those with the most wealth will yield more influence. I don't think this can be prevented without either undermining democracy, freedom of speech, or freedom of the press. So you are best off by limiting that power. Further, I think that if you make the power of government less attractive (eliminate corporate taxes, subsidies, tariffs etc.), you will also decrease the corruption. It's sort of a chain reaction. Government is corrupt, so make it less powerful. A less powerful government in turn attracts less corruption. It doesn't solve the problem because this problem can't be solved.

However I don't prescribe to the "no new taxes" mantra of the Tea Party either. I do think that taxes are too high, and no I don't care that taxes were once higher or that taxes are higher in other countries. Both of those argument are logical fallacies. However we have built up a huge debt. If we don't pay down that debt, then our children will have to. We splurged, it's our debt. We should pay it down. And please don't tell me that I can pay extra taxes if I choose to. That's a classic prisoner's dilemma, only on a much larger scale.

Why I Won't be Voting for President Obama in 2012

I voted for President Obama in 2008. My reasons were a little different than most. Given that and one look at this chart, it should be no surprise that he won't be getting my vote in 2012.

Seriously, if McCain had won do you really think this chart would look a lot different? The withdrawal of US troops from Iraq was widely hailed, but it has been made up for by increasing troops in Afghanistan and using more private military companies (mercenaries) in both Iraq and Afghanistan. Fool me once, shame on you; fool me twice...

Day of Infamy

Last week I wrote about a day of infamy, but did not get around to talking about this. I was too happy about President Obama following through on his pledge to get our military forces out of Iraq. On that same day, the government did something that was not so good. The Fed essentially took control of Citibank.

But wait, we've heard Secretary Geithner and Chairman Bernake both say that they oppose nationalization of our banks, and assure us that what we are doing at Citibank is not nationalization. This is a classic case of mincing words. The Fed has not only assumed a commanding position of ownership, but they have already begun dictating the company's policies. They have remade the board of directors and mandated policies on employee compensation and lending standards. This is de facto control. It's like in The Sopranos when Uncle Junior was the nominal leader of the Jersey mafia, but everybody knew that Tony was calling the shots. This is what has happened with the US and Citibank. The US is Tony and Citibank is the Jersey mafia. The actual executives might as well be old, senile, and in jail.

Now the government has taken control of banks before, most notably in the S&L runs back in the 80's. This was always done to liquidate the assets of the bank. Maybe that is what is going on with Citibank, and the government is misleading the public because ... well who knows.

I do not think so. The government wants banks to loan money. They want businesses to borrow and hire workers. They want consumers to borrow and spend. This is not happening, for many very good reasons. If you are a bank, you need to clean up your balance sheet by increasing your cash and reducing your risky investments. If you are a consumer, you need to increase your savings and reduce your debt. But if the government has control over large banks, they can make the bank forget about increasing cash and reducing risk. They can offer up loan to any and everybody. They can make it really hard on consumers to resist the temptation of free money. Imagine getting a letter in the mail everyday saying that you have been pre-approved for a new credit card with a 0% interest rate and a $100,000 limit! It's the modern day version of the chicken in every pot.

And so it is that I think February 27 will be a day of infamy in American history. It may be the beginning of an era where the government is an essential part of all economic activity in America. Want to buy a house? Ask the government. Want to buy a car? Ask the government. Want to send your kids to college? Oh wait, nevermind on that one. Want to plan for retirement? Umm ...

A Great Day ... and A Day of Infamy

Today is a great day for America, and a day of infamy. Do you want the good news or the bad news first?

The good news is that today is the beginning of the end of the Iraq War. This war has been going on for so long, and has mostly faded into the back of people's minds. This is especially true these days as people are more concerned with the economy than anything else. But let's not forget how this war started.

The Iraq War became a certainty on 9/11/2001. On that day, just hours after terrorists from Saudi Arabia killed 2,974 Americans, the US government began preparing to attack Iraq. There was only one problem. Iraq was not involved in 9/11. The US is an ally of Saudi Arabia, where the terrorists has come from, so nothing could be done there. All that could be done was to go after the leader of the al-Qaeda, Osama bin Laden, and he was in Afghanistan. Luckily plans for attacking Afghanistan had been drawn up before 9/11. Those plans did not involve any US troops, just air support and special forces. It only took a few months to topple the Afghani government, and install drug traffickers to run Afghanistan. Given such a plan, it was not surprising that bin Laden was not found in Afghanistan.

With that little detail out of the way, it was time to move on to Iraq. But how to justify the war? We all got to learn a new term: Weapons of Mass Destructions or, in militaryspeak: WMDs. The US government produced all kinds of propaganda about Iraq and WMDs. Everything from yellowcake uranium to aluminum tubes were used to convince Americans that Iraq had The Bomb and was going to give it to terrorists who would use it on America.

And Americans believed it. Why? Are we all that stupid? Was the propaganda that good? Well maybe, but the real reason is that we wanted to believe it. We had malice in our hearts and wanted vengeance. The "victory" in Afghanistan had not satisfied this bloodlust. Maybe if we had caught bin Laden and let the NYPD beat him to death with nightsticks on primetime television (tape delayed for the west coast of course) then we would have been satiated and a little more likely to call BS when the "facts" about Iraq were presented. Who knows.

So the war began... It was definitely a more satisfying war for television views. We got Shock and Awe. We got to see huge numbers of troops marching through the desert. We got to see the statue of Saddam Hussein toppled and the American flag raised. We got to see our leader declare victory on an aircraft carrier. Good stuff. Great television.

Meanwhile there were massive casualties, but they were not the kind we cared about. They were not American casualties. They were not even Iraqi military casualties. No, the Iraqi military was virtually non-existent after years of economic sanctions against Iraq. The casualties were Iraqi civilians. Most agree that were tens of thousands, with some estimating hundreds of thousands of Iraqi citizens killed as a result of the war. It does not matter what the exact number is. It could have been millions of Iraqis killed, and it was still not newsworthy in the US.

However, not too long after victory was declared, the US started suffering casualties. There was a civil war going on, created by the vacuum of power left behind when the US overthrew the Iraqi government. US troops were prime targets, as Iraqi militants knew that the best way to get the US to leave their country was to kill US troops.Soldiers being killed by road side bombs is newsworthy in the US as it turns out.

The situation only got worse in Iraq, until finally in February of 2007, the US increased troop levels to support policing of Iraqi streets. Many folks, including John McCain, had been saying this was needed and should have been done before victory had been declared. After more than six months of this, the violence had only increased. In August of 2007, religious bloodshed caused the leader of one of the chief combatants, Mugtada al-Sadr, to call for a cease fire. In September of 2007, the US government claimed that violence was down by 50% and took full credit for this.

In 2008, as part of his campaign for President,Barack Obama promised to withdraw from Iraq. This was viewed as a weakness in his campaign. During debates analysts would claim that Obama was a little weak on foreign policy, but strong on the economy. The economy won out, and Obama is President. Today he announced a plan to withdraw the bulk of US forces by 2010. This is pragmatically about as fast as is possible. It's not easy to move 100,000+ troops and all of their supporting infrastructure and equipment.

This post ran long, so you'll have to wait for the bad news...

Wall Street Deserves Its Bonuses

All of America is upset about Wall Streets bonuses. Even The President is pissed. Guess what. All of America, including President Obama, is wrong. It's easy to say oh these already-super-rich CEOs are just lining their own pockets with taxpayer money, but that's a knee jerk reaction with no thought behind it. All of those billions in bonuses did not just go to CEOs. They went to tens hundreds of thousands of American workers. They went to traders and portfolio manager and secretaries and HR people. It was money that was promised to those workers as part of their compensation. It was money that many probably used to pay for their kids college tuition or pay off their credit card bill from Christmas or maybe just for the basic staples of life. Maybe they used it to pay their mortgages. If you just think a little, then maybe you won't be so outraged. Maybe you'll realize that it shouldn't even be any of your business.

But of course it is everyone's business because of the government bailouts of the banks. Worse we have all been brainwashed into blaming things on the greed of Wall Street. That is the great red herring of this depression. Politicians want you to think that all of our problems are the result of the greed of Wall Street. If you have a scapegoat to blame things on, then you do not have to take any responsibility.

So if it's not Wall Street's fault, then whose fault is it? There is an easy and a hard part to that. The easy part is that it is the government's fault. It is the fault of the Federal Reserve for using its unconstitutional power to amplify business cycles. The Fed created a climate of malinvestment by fixing interest rates at unsustainably low levels. And guess what, they continue to do this. The seeds of the next recession are already being sown today.

That's the easy answer. The harder answer is that its your fault. Its the fault of every American who bought houses they could not afford. Its the fault of every American who constantly refinanced their house to "cash out" their equity. This carpe diem approach has lead to historically low savings in America, historically high debt, and historically high rates of loan default and foreclosures. Those are the real reasons why any bank would be a fool to loan out money right now. No matter how much money the government gives them, it will never make any sense to loan it out. The people who would borrow are not likely to be able to pay it back.

Back to reality. Nobody is going to accept personal responsibility. It's the government's job to saves us from ourselves, right? I actually thought for awhile that maybe people would (rightfully) blame the government, but that has not happened either. The politicians have cleverly manipuated the masses to put the blame on banks and Wall Street greed. Now we are pissed that those banks are paying the salaries of their employees instead of lending money. It's obvious what is next. We take over those banks and force them to lend money to everybody. Then we will get what we deserve.

How To Fix The Economy

I like to fix things. This should be no surprise, as I am an engineer. Of course some engineers prefer to only build new things, and do not like to fix existing things, but not me. Sometimes this works against me. Whenever I encounter a problem, my first reaction is to try to figure out how to fix it. Sometimes that is not appropriate, and sometimes the problem just cannot be fixed. That is a tough thing to admit: that a problem cannot be solved. Even tougher is to spot such problems without first repeatedly failing to solve it.

What does this have to do with the economy? The economy is a problem that cannot be fixed. There is no one thing or series of things that can fix this problem. Giving money to banks has already proved to be ineffective, as has eliminating interest rates. Now some folks want to take even more drastic measures. But it is not going to work.

We like to think that we are so smart that we can understand anything, and thus solve any problem. But we are not that smart, not even close. Some things are too complex and macroeconomics are too complex. If it was possible to understand macroeconomics enough to control it, then the Soviet Union would still be running along smoothly. The Great Depression would have only lasted a few years. You get the idea.

Not convinced? Look at the causes of the Great Depression. The Fed was established the Federal Reserve Act in 1913. It really got to work after the end of World War I. Starting in 1921, The Fed used a variety of "levers" to increase the total money supply by more than 60%. The Fed made the "boom" part of the business cycle extra "boomier", but the result was an even bigger bust. Banks were incentivized to make malinvestments. When they could not cover the malinvestments that failed, a "run on banks" ensued.

Does this sound familiar? The Fed did the exact same thing in this past decade. There was no "run on banks" this time because of FDIC (more on that in a minute.) Instead there was a run on other investment instruments, and the result was equivalent : insolvent financial institutes. Only things are worse this time. Why? FDIC.

Smart people back in the 40's thought that the Depression was caused by the run on banks, not recognizing that as symptom of the sickness, not the cause. So they tried to prevent bank runs by enacting FDIC. If the government insures your deposit, then you should not freak out and pull your money out of the bank, right? Of course this creates a moral hazard because it removes some of the risk of investment. So what do we do? Regulate.

What happens? The regulation becomes dated as new types of investments are invented that are not subject to the regulation. One could argue that the reason for these new investment was to avoid paying the tax of regulation and thus give a higher return. However, the moral hazard is even worse. Even though these instruments are not insured by the government, the precedence has been set. Investment banks know that the risk will be absorbed by the government. Meanwhile the Fed once again inflates the money supply, as the government needs a big "boom" to help pay for wars, and like clockwork, we get another dramatic bust.

Do we admit that FDIC didn't work? Nope. Instead we think that the problem was that we didn't regulate those pesky new investment instruments! This is coming from a Nobel Prize winner, so it has to be The Truth, right? While the specter of government force looms as the ultimate "fix."

So am I just proposing that we roll over and do nothing? Well ideally this would be an opportunity to do things that are generally good for the economy: reduce taxes, reduce regulation, increase trade. However when most of the experts propose well-meaning solutions that would often do just the opposite, maybe the status quo is all we can hope for?

Does this mean that banks fail, businesses fail, and people lose their jobs? Yes, it does. Everyone wishes there was some magic button to push that would prevent these awful things from happening, but there is not. None of the dramatic (and unconstitutional) actions of The New Deal succeeded in fixing that mess. Maybe they prevented things from getting worse in some cases, but they also drastically prolonged The Depression and laid some of the seeds for today's problems.

Of course FDR was re-elected three times and that is all that matters to politicians. So get ready for a lot of fixes, and get ready for a long depression. Let's just hope that this economics meltdown doesn't end like the last one.

Vote by Mail

This year I voted by mail. It was very convenient. The state of California even sent me a nice little "I voted" sticker. So how did I vote? Most things will probably not be a surprise if you read my blog on a regular basis. There were a lot of things to vote on, so here is a quick summary.

President -- Barack Obama. I am no fan of his proposed economic policies, but the war remains the most important issue to me. Besides, most of McCain's proposed policies are so similar to Obama's. It is very sad.

Congress -- I voted against my congressman, Mike Honda. I wrote him about the bank bailout, but he still voted for it. Gotta vote against him for that.

Propositions -- These are the fun stuff here in California. The most debated is Proposition 8. This was a no brainer to me, I voted against it. Terry put together a nice post about Prop 8. I was surprised to find myself voting for Prop 2...

Keynes vs. Hayek, The Final Round

This is it. Much of the last century has been a showcase of two divergent schools of thought in economics: Keynes and Hayek. Keynes ruled up until the late 70's. The Hayek school found believers in Thatcher and Reagan, but they were both compromised. At best a compromise was struck, with attempts at "supply side" economics that was close to Hayek's Austrian school, along with more Keynesian monetary policy.

Now we have the kind of financial implosion that Austrians have all said was an inevitable consequence of Keynesian monetary policy conducted by central banks. Governments have responded with extreme measures -- extreme Keynesian measures. Austrians aren't willing to say that this won't work, but do say it is only delaying an even worse fate.

The Austrians are smart folks, but they don't like to be measured and tested. They denounce any kind of objective, scientific measurement of their ideas. But they cannot avoid this one. This is it. If you are a follower of Hayek, then you must agree that we will see economic hardship on a grand scale within the next ten years or so. How grand? Again the Austrians will never give you numbers, but you gotta figure we're talking Great Depression kind scale. That would be 25% unemployment, western governments collapsing, democracy giving way to totalitarianism. If we don't have something like that in the next decade, just a run of the mill recession, then the Keynesians (and most of civilization) win.

Feed of Shame

What do you do when you are on Facebook and notice this in your feed?

Palin? Really? I can understand people supporting McCain. If you are pro-war, then you should be pro-McCain. If you are in a very high tax bracket, then it is in your best interest to vote for McCain. There are other rational reasons as well, and of course there is the old standby "he's not as bad as the alternative."

But what would make you support Palin? Are there women who she appeals to, despite her extreme anti-abortion stance? Maybe you like her views, that is reasonable. But then to have as a spokesperson for your views is ... embarrassing to say the least:

The Great Bailout

"OMG! The _____ is in trouble! What are we going to do!!!?!"

When government people say things like this, it is always a precursor to the government proposing itself as the solution to the problem. The problem is so dire, that only the government can solve it. Of course they will need more money and more power to solve the problem. Oh, and if you don't think this is all true, then you are too dumb to understand the problem or you are just un-American because you don't care about all of the Americans who could be hurt by this grave danger.

Mr. Dave Winer makes the point that the current administration has used this argument before. Only then it was Colin Powell making the case for war in Iraq. Now it is Henry Paulson doing the same thing but with regards to the banking meltdown. Dave is right on all of this. He then goes out of his mind by suggesting that Bush/Cheney should resign, Nancy Pelosi be made President, and Paulson's plan to move right ahead. The problem is not just Bush/Cheney, and Pelosi is definitely not the solution. The problem is Paulson's request for power and money. It's like saying it would have been ok to listen to Colin Powell and attack Iraq, but only if Al Gore would have been president. It didn't matter who was President, attacking Iraq was wrong in every possible way. 

Of course Ron Paul has some interesting things to say about the bailout. His opinions are largely grounded in the Austrian economic theory that the government makes business cycles more extreme (bigger booms and bigger busts) by causing malinvestments, like buying subprime mortgages for example. Like all things in Austrian economics, it is a matter of "belief" as these are statements that are purposely impossible to scientifically verify. However, it is hard to dispute that the U.S. government has encouraged high risk loands for the purpose of buying real estate, and that the very financial institutions who did this most are now the ones that are going bankrupt.

The point is that our government does not have a good track record here. Maybe it has been the main source of the problem, as Paul suggests, or maybe not, but it certainly has been part of the problem. Now it wants unprecedented (in this country at least) power and money to solve the problem that it has been at least complicit in. Given that, how can we support this idea?

Oh, but what is the alternative? I don't know, and I don't think the government knows either. Yes, there will be banks that go under. Does that mean that we'll all be out of money? No, of course not. Anyone's savings are already guaranteed by FDIC. Not to mention that even in the case of bankruptcy, creditors (that would be people that bank borrowed money from, i.e. depositors) have first priority. Nobody is going to lose their savings. 

But surely there will be other disasters, right? If so many go out of business, how will we get loans for houses, cars, or new businesses? Well perhaps not all of the banks will go out of business. Certainly there are those that have been buying up these insolvent banks. Or maybe other companies will take the opportunity to expand into the banking vacuum created by the insolvent banks. I'm not sure, but I'm not willing to let FUD from the government convince me to give the government the kind of virtually unlimited power that they are asking fo.

Distractions

Distractions are everywhere. Some people say that Ron Paul is a distraction. Is Sarah Palin a distraction? Or maybe it was Hurricane Gustav. I say that the economy is a distraction.

The focus of the election has become the economy. The economy is important, right? For two years in college, I actually double-majored in economics. If I wouldn't have been so lazy during my senior year, I would have a degree in it. However, it is not the most important issue in this election year, at least not to me. That distinction is still the war.

Sometimes other libertarian leaning people question me for voting for Democrats. I always say that I would rather have my economic freedoms violated than personal freedoms. In one case I am broke, in the other I am in jail. I don't want to be broke, but I really don't want to go to jail. There are worse things than jail, namely death. U.S. foreign policy has been dealing out death in a big way over the last eight years. War is worse than any economic or personal freedom violations. Of course war actually cause these violations as well.

Look at the Patriot Act. Clearly a war-time measure that is one of the most egregious violations of personal freedom in the checkered history of the United States. Look at our budget deficit and how much money we are spending on wars. Go beyond that and look at the weakness of the dollar and the problems that is causing.

If you keep looking, you'll soon notice the price you pay for gasoline. How much did gasoline cost before we started waging war in Iraq? I know better than most that correlation does not imply causality, but what do you think the price of gasoline would be today if the United States never invaded Iraq?

If we gasoline was in the $2/gallon range, the deficit was a fraction of what it is currently, and the dollar was stronger, do you think the economy would be much of an issue at all?

There is a price to pay for war. We have tried to push all of that cost to our children in the form of budget deficits, but it has not worked. We are paying it at the pump. We are paying it at the grocery store. We are paying it when we buy "cheap" goods at Wal-Mart.

War is the most important issue. The only hope for less war is to vote for Obama. I wish Obama would pull all of our troops out of Iraq and not even leave behind any bases. I am frightened that he will expand military activities in Afghanistan and maybe Pakistan. He is not a perfect choice, by far. But in the interest of Country First, he is the only responsible choice that I can make.

Government Interference

Gilly had some fun making this Friedman video:

Party Unity

Yesterday the Democratic Party decided to "settle" the issue of what to do about the Florida and Michigan primaries. Their decision was obviously intended to appease Hillary Clinton to some degree, while still assuring that Barack Obama clinches the Party's nomination. I support Obama over Clinton, but I am not pleased with this decision. Here is why.

First, by cutting the number of delegates in half, the Party has essentially said that a Floridian's vote is worth half as much as say a Californian's. Second, the Party decided to give 40% of the votes of Michigan to Obama. This was a practical matter, because Obama was not on the ballot in Michigan. If he would have been, he would have probably done much better than that, but it is still wrong for the Party to decide how people voted, instead of letting people actually vote.

The other thing that I object to is all of this business about party unity. I hate that term, because I hate party unity. Party unity is the key to the two-party system that forces us all into picking the lesser of two evils. Let's take a look at the current Democratic contest. Obama does not do well with union workers, and what is wrong with that? Why does he have to do well with union workers? Oh, because if he doesn't get the support of union workers, minorities, women, etc. then he can't beat the Republicans' coalition of religious groups, nationalists, upper middle class, etc.

Personally I would love to see the Democratic Party break apart. I would also love to see the Republican Party break apart. I think it would be great to see coalitions formed on more of an issue-by-issue basis. Is there any doubt that we would already be out of Iraq if that was the case? I think most Republicans know it is a mistake to be there, but party unity subverts democracy. If we didn't have party unity, we could probably agree on some kind of pollution credit system to protect the environment.

Party unity is the key to the success of divisive politics. You can use such issues only when you are assured it will not cause you to lose votes from your own party -- i.e. only when you have party unity. Do you think Republicans would bring up things like abortion, immigration, and stem cell research if they thought that they might lose some of the upper middle class voters they count on? No way. But when you know that your own constintuency will still vote for you even when you bring up issues they disagree with you on, then you are free to be evil.

Yes to Bitterness

A lot of folks think that Barack Obama has really shot himself with his comments about "bitter" Americans:

"It's not surprising, then, they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

That's the quote that everybody cites. It incited Obamafan Dave Winer to take umbrage at Obama's quote and state that "To equate geography with intellect is as wrong as to equate it with race, ethnicity, gender or age." That quote is taken from a blog post by Winer titled Is my candidate too elite?

Before I state my opinion on the matter, let's get a few things out of the way. A lot of people would say that I am the worst kind of elitist: a libertarian. I think Republicans are stupid for wanting to tell people what is right and wrong and how to live their lives. I think Democrats are stupid for thinking they are smart enough to fix everyone's lives and treating people like children. In other words, I think everyone is an idiot. I am a supporter of Obama, but only after Ron Paul fell out of things and Obama became my best bet to ending the ongoing atrocity that is the War and Occupation of Iraq.

That being said, I also consider myself to have a very scientific mind. Thus Obama's quote must be examined in context. Taking quotes out of context is the worst kind of yellow journalism (and perhaps the most common as well.) Obama was explaining why he was having a hard time winning over white working class. He used the bitterness bit as a counter to the notion that it is just because he is black.

You might be wondering what my point is. This is the kind of argument that always annoys my wife. The semantics of the statement are what is important. Obama was not talking about how certain people (white working class in the midwest) are, but why they are skeptical of him as a leader. Look at the recent history of presidential campaigns. The Republican Party has done an exemplary job of using divisive issues to win elections. What are some of those issues? Things like religion and moral values (abortion), immigration, and gun control. These are the exact things brought up by Obama.

So was Obama saying that midwest white working class people are gun toting, racist, religious zealots? I don't think so. I think he was simply stating the fact that certain issues have been effective in deciding the votes of those people. That is not a stereotype or generalization, that is a statistical fact. In the past those people have been swayed by divisive issues by the Republican Party. Now we are seeing them swayed by divisive issues by Hillary Clinton. Obama is just relating these as the facts that answer the question posed to him.

Finally, my propensity for scientific thought forces me to denounce the hypocrisy of the outrage. It is publicly acceptable to call the people on the East and West coast elitists. Everyone else says that the "liberals" think everyone else are dumb. In other words stereotypes of people in "blue states" is ok, but stereotypes of people in "red states" are not. Why is this? Because there are more red states than blue. Might makes right. This is the reason why divisive issues have worked for the GOP. They can play all of the stereotypical, prejudiced cards they want because the people who will be offended are outnumbered. Well outnumbered from an Electoral College perspective at least...

Super Tuesday

Obviously I'm voting for Ron Paul. I really thought that the Republican race would still be clouded. Oh well, I was wrong. It does mean I will get to vote against McCain twice this year! More on that in another blog... Let's talk about the more interesting stuff on the ballot in California tomorrow: The Propositions!

Prop 91 -- Places restrictions on tax money earmarked for transportation infrastructure. Definitely a yes.

Prop 92 -- The key here is that this freezes community college fees. Wait, so I "own" (pay taxes) a business (state government) that produces a product (community college education) and I want to fix what my business charges for that product, even if I have to pay more (pay professors more, etc.) for it? That is stupid. It will only cause community college education to suffer just like all other forms of public education... No.

Prop 93 -- Reduce term limits from 14 to 12 years ... I am against term limits. Let people vote for who they want to, so No.

Props 94-97 -- Ah, the new Indian gaming "compacts". First off, Indian casinos are state backed monopolies. They get special privileges from the state, and in turn pay the state a percentage of profits. Personally I have nothing against Indian tribes having casinos, I just have something against laws that prevent non-Indian tribes from having casinos. So I have to vote against these measures. No.

Blogging for Obama

Barack Obama certainly had an impressive victory yesterday in South Carolina. I am definitely rooting for him over Hillary Clinton. Now I voted for Bill Clinton twice. I turned 18 and in 1992 and so it was the first time I could vote. However, I cannot support Hillary because she voted for the war. Obama correctly says that many Democrats supported the war initially because they were afraid to look weak. Is that really a quality you want in a president? Of course the alternative is that she really agreed with the President or that she was stupid enough to be fooled. Whatever, so soup for Hillary. I don't care who your husband is.

And speaking of her husband, what the heck is going on with their campaign against Obama? Bills saying that Obama winning South Carolina was not a big deal because Jesse Jackson won South Carolina 20 yeas ago is an obviously racist statement. It's saying "any black candidate can win South Carolina." It makes me ashamed that I once voted for Bill Clinton.

The Economics of Dr. Paul

My biggest reason for supporting Ron Paul is because I am sure he will get us out of Iraq. The war in Iraq is the most important issue of the day. It is the first time in America's history that we have attacked another country without provocation, conquered the country, and the installed a government there backed by our military. Everything else pales in comparison to Iraq.

However, Dr. Paul is also well known for his economic principles. I don't always agree with all of these, so I thought I would dissect his new plan for economic revitalization.

Also, I would like to openly challenge my "collectivist" friend to give his own thoughts on Dr. Paul's plans.

Tax Reform -- This is the biggest part of his plan, clearly. Now several of his tax cuts sound a lot like typical Republican "Reaganomics". For example, eliminate taxes on dividends and savings, eliminate capital gains tax, accelerate depreciation on investment, repeal the estate tax. All of these would benefit wealthy individuals and corporations much more than middle class Americans. The idea is that they would encourage economic growth.
In principle, I favor the first two issues. Taxes on dividends, savings and capital gains are all cases of double taxation. You pay taxes on your income. You take some of that income and invest it, and then get taxed again on that investment. Yes, this will favor the rich, but so what? Do we support something that is logically unfair just because the unfairness is concentrated on a minority group (rich folks) ?
I am more neutral on the other two issues. Reducing corporate tax rates seems like a more direct way to encourage growth, but I would probably put much lower priority on this. The estate tax is "unfair" in the sense that it only taxes estates worth over $2M. It is also a case of double taxation. Again, this would benefit the rich (folks with estates worth over $2M) more than anybody else, but so what? Also, hard coded numbers like $2M are always dubious. You could live where I live and have an estate worth over $2M without being very rich at all.
Spending Reform -- I definitely favor reducing overseas commitments. Well in particular, just get us out of Iraq and stop spending $800M/day there. Freezing non-defense and non-entitlement seems a little too cut n' dry. I would favor freezing or cutting many of those things, but maybe not all. It's hard to know, and hence my reservation from using a simplistic qualifier like "non-defense and non-entitlement."
Monetary Policy Reform -- Yes please! People should know what the heck is going with the Fed (or any other powerful agency.) How can you oppose this? As for allowing precious metals to be used as money ... it would be an interesting experiment to say the least.

Regulatory Reform -- I definitely favor repealing Sarbanes/Oxley. I can tell you first hand that this has a hugely negative effect on companies big and small. It was a classic case of knee-jerk legislation. Now for "Remove Costly and Unnecessary Federal Regulations"... sounds good on paper! More details should be given. I do favor HR 1869, though.

Iowa and New Hampshire

It's a new year, and an election year. So time for some politics.

The Iowa Caucus and New Hampshire Primary were both mildly interesting. Iowa was interesting because of Mike Huckabee. It's amazing to think about just how diverse the Republican Party is. In many ways it is much more diverse than the Democratic Party (of which I am a registered member of.) I don't think anyone really thinks Huckabee could be win the Republican Party nomination, yet he won pretty easily in Iowa. And he won because of "evangelical/born again" vote. Will future generations look back and marvel at how the religious right and big business were allied together to dominate politics in America. And face it folks, the Republican Party has dominated for a long time now. One could argue that if it wasn't for the divisiveness of Ross Perot, the Republican Party would now be in its 28th consecutive year in the White House.

Anyways, the New Hampshire Primary was interesting because of Hillary Clinton. You have to wonder if her "moment of vulnerability" was simply a brilliant political move. It certainly seemed to give her a victory, and one could argue that a victory for Barack Obama in New Hampshire would have given him an unsurmountable advantage.

Finally, both elections were interesting because of Rudy Giuliani. He may prove to be a brilliant strategist by just punting on the early races and betting that there will be no clear front runner. This only works if he can win Florida and many of the Super Tuesday states. The whole thing reminds me of some kind of game theory problem I had to solve in college. Speaking of which, I once wrote a paper on the absurdity of Iowa and New Hampshire playing such important roles in American politics. If Giuliani winds up being the Republican candidate, he will make my position paper obsolete.

One last thing to note ... Ron Paul. As an understated supporter of Dr. Paul, I was sad to see him only register around 10% in both Iowa and New Hampshire. You would think that such fervent supporters and the money they have raised for him would be able to turn into enough publicity to get his word out, and in turn gain some votes. He actually did quite well among younger Republicans in New Hampshire, but this just once again proves that the "young vote" is irrelevant. It's hard for me to see Paul endorsing another candidate and thus using his followers to give somebody else a decisive advantage, so in the end all of the electronic buoyed hyped of Ron Paul could be for naught. That's too bad.

Remembering

I was watching a clip of Move.On's Eli Parser defending their ad against General Petraeus. He made the analogy that he wished he could have attacked then Secretary of State, General Colin Powell after Powell presented the "facts" about Iraq's WMD program to the UN just before the Iraq War started. The brought back memories of the beginning of the war.

Where Were You When?

I'll never forget where I was when the war started. I was on a JetBlue plane going to Las Vegas. I was meeting up with all my old college buddies for the opening weekend of March Madness. JetBlue was DirecTV onboard, so I got to watch CNN showing live coverage of "Shock and Awe." It was a moment that really showed what generation I belong to: flying on a plane, watching satellite television of the beginning of a war in the Middle East. 

Obligatory "I told you so" Rant

Later on that evening in Vegas, I was sitting in the coffee shop of the Monte Carlo, where we were all staying. I was talking to two of my friends about what was going on in Iraq. My stance then was simple: Give the public the real reasons for the war and maybe it is justified, but don't give false reasons. We live in a democracy, and we can't undertake the ultimate act of a nation-state, war, without honest reasons for it. My father was the veteran of three wars, and he taught me that war is the most horrible thing in the world, but sometimes it is necessary. Was Iraq necessary? There's no way to answer that question without the real reasons.

Alan Greenspan

Which brings me to Alan Greenspan. You gotta figure this guy is feeling some heat with the housing bubble (that he certainly helped create) busting all around. Talk about terrible timing, too: he just released his memoirs. Can't imagine too many of those foreclosure "victims" will be buying that. It did contain one nugget that has turned into controversy. Greenspan claimed that the "Iraq war is largely about oil." 

Wait a minute, didn't I see people in the streets of San Francisco four years ago claiming this? Of course Greenspan has changed his story, I mean clarified his statement. But it brings up an interesting what-if.

Any Reason Will Do

What if the President was honest and had said in 2003 "we need to invade Iraq to secure strategic resources vital to our economy." I'm not saying that would have been honest, though maybe Greenspan thinks it would. Would people have gone along with it? There might have been a typical red-blue divide on it, much more of a divide than we saw back in 2003, but so what? 

There was a lot of blood lust in the air because of 9/11, and that was the biggest reason why people were willing for us to go to war. Not lies from the President. Not fear of WMDs. Not thirst for oil. Nope, it was a thirst for payback that Afghanistan did not quench. Any Arabic target with any reason might have done just fine. There was probably no need for Colin Powell to lie to the UN.

The Blood on Our Hands

That's what nobody wants to admit. You can't just blame Bush, Cheney, and Rumsfeld. We're all to blame. Look at all those Democrats who voted for the war, and who even now are reluctant to take real steps to bring it to an end. The American people would love to wash their hands of it now, but unfortunately it's not so easy. We're going to pay for this sin for a long time.