Its amazing to me that they are saying maybe this latest stimulus wont be enough. Enough for what? Enough for whom? We live in a world that is constantly achieving new balance points….. There is very simple economic data that tells us this. The market evolves, and when the internal combustion engine develops, the people who make carriages are screwed…..Clear ideas are guideposts that can help us know how it all works. But even if we do know how it works, there is still the matter of how it is actually gonna work.”

The video below is an interview with Thomas Friedman on MSNBC. I think the only thing that Thomas can’t point out is that just as the President has to keep Republican’s voting with him, he has to keep Democrats voting with him. I do believe that there will come a time when some of the spending in the current budget will be rolled back. But if Obama didn’t do that now, Democrats would object that he was being run by the Republicans.

The economy that George Bush allowed to slide away is what Obama inherited. Oddly enough, in order to take the long-term steps to fix things, there have to be some steps ‘in the wrong direction’. Friedman is terribly smart… I enjoy listening to him keep our eyes on the ball.

“Rodriguez was one of 104 positive tests in the first wave of testing back in spring training of 2003, but keep in mind that before 2004, mandatory testing in Major League Baseball did not exist. Steroids were against the rules, but were not tested for. The idea that Rodriguez is the poster child for all that was wrong with baseball from 1990-2004 is just wrong.”

I couldn’t disagree with Levine more – Rodriguez is the poster child for a system that doesn’t protect gifted individuals who don’t cheat, from those who do.

The people exposed on the front pages are not marginally gifted. Most are extraordinarily gifted, without the cheating. But whether we’re talking about Marion Jones, Mark Maguire, Barry Bonds, or Alex Rodriguez — they are people who have polluted the top of the mountain. Writing on his blog in November of 2007, Rodriguez wrote:

“Winning my third Most Valuable Player award today is something that holds special significance to me. There are so many gifted players in this game, and I don’t for a moment take this achievement for granted. I shouldn’t need to remind anyone of the MVP-caliber seasons that Magglio Ordonez, Vladimir Guerrero, Jorge Posada, David Ortiz and several other AL players put together.”

Alex Rodriguez has admitted doping from 2001 – 2003.

Perhaps the biggest problem with cheating isn’t the ill-gotten gains, but the denial of success to the truly worthy. The all-star ball-players who never get that mvp, the ace investors who never get the biggest accounts.

The prevalence of certain forms of white collar cheating highlights the dynamic balance between regulation and personal freedom. That balance will never be perfect. In the United States no prosecution can exist if the act wasn’t a crime – as in Rodriguez’s admitted doping. However, if the benefits of a crime extend to family-members and teams, why do our punishments stop with the individual?

Bernard Madoff recently admitted to a massive financial fraud that robbed thousands of individuals and organizations of their investments, left numerous charities reeling, and crushed investor confidence.

In the instances of both Rodriguez and Madoff, the cheaters have tried to insulate their family and friends from any impact. Clearly they were not insulated from the benefits. Should they pay?

If so, how far should the punishments reach? Madoff’s wife has been filing briefs to insulate her assets from her husbands. Wikipedia shows that the wife of one of Madoff’s two sons filed for divorce the day before the scheme was publicly disclosed. Was this done to insulate his/her assets? How far from a star’s mistake should the light of justice shine?

Every time that I see another story of contrition and sadness, I am reminded that we know these people from seeing them in their success. Who are the people we should have known? The people we should have feted? The ones who would have had the highest returns, the most home runs? What should be done to protect them? Others are out there now fighting for stronger regulation, and I appreciate that fight. The integrity of our financial and social systems demand it, not just to prevent fraud, but to prevent the perversion of real success.

Re-reading what I wrote last night I am reminded that a) I sometimes sound like a total nutter, and b) sooner or later we sit down to a banquet of consequences. (That phrase isn’t mine, but I can’t remember whose it is.)

We benefited from being on the forefront of globalization for some time. Now the whole globe is catching up to the reality that efficiency only does so much. Global trade has fueled investment/development, and U.S. manufacturing has suffered. There is no silver bullet for this. We’ve won, and lost, at the same time. And it’s not just us. I saw on the news last night that Nissan is cutting several thousand jobs. This is not just about us.

I suggested in the last post that when the internal combustion engine comes around, the people who make carriages are gonna go down. I think there is a parallel there. Just that we’re the ones who got people into the engines, and now they – not just ‘we‘- are making em. Sooner or later we all sit down to a banquet of consequences.

I just found the quote, by the way: it’s Robert Louis Stevenson. And it would seem I am not the only one to find it applies to people eventually being tagged for the stupid things they do.

Suggested usage: press play, wait 30 seconds, read the post.

George W. Bush: U.S. President (2001 – 2009)

Employment and Earnings, 1998 – 2008 Reported by U.S. Dept of Labor Statistics

U.S. Unemployment, 1998 – 2008 Reported by U.S. Dept of Labor Statistics

Bump visible in both graphs is the war expenditure economic bump.

U.S. Intelligence Gathering Policy – reported on ABCnews.

Karl: And on KSM, one of those tactics, of course, widely reported was waterboarding. And that seems to be a tactic we no longer use. Even that you think was appropriate?

Cheney: I do.

US Casualties – Iraq War (2003-present) reported on wikipedia

Combat: 3,681
Total: 4,221
Wounded: 43,993

Death of the Kyoto Protocol, reported on About.com

First article

George Bush made campaign promises in 2000 to regulate carbon dioxide as a pollutant. However, in 2001, George Bush pulled the US out of the Kyoto accords as one of the first acts of his presidency. Bush dismissed Kyoto Protocol as too costly, describing it as “an unrealistic and ever-tightening straitjacket.”

Second article

Under its own provisions, the Kyoto Protocol cannot take effect unless and until it gains ratification by those industrialized countries responsible for at least 55 percent of the world’s total annual production of greenhouse gasses.

Russia puts out 17 percent of those emissions; the United States 36 percent, and the United States has already withdrawn former President Clinton’s provisional ratification of the Protocol.

Income Distribution - reported on wikipedia (an old problem, worse. better since the hedge fund dive, but worse.)

and on, and on, and on…..

Turns out I know at least one person in the new administration… Best of luck to all of the Obamanauts: we’re with you, and we’re counting on you.

Sometimes it seems to me that there are really only two economies: the bitter economy, and the generous economy.

The Bitter Economy – deserves everything that is gets and sees everyone as competition

The Generous Economy – sees itself as part of a community and its goods/services as one of many deserving options

I’ve been thinking and reading about the economy lately. How can we help our economy? Congress is looking at spending a whole bunch of money to help the economy… why is that?

The Federal Government really has very few options to influence the economy. Interest rates, and taxes/spending. If you never studied economics, I’d suggest skipping down to below the seond graph. If you have, please excuse some of the shorthand conclusions that I’m drawing toward my point.

Given that the country is already living with massive debt, and a large trade deficit, we have to be very careful to avoid inflation. When inflation gets out of control market actors end up in a spiral running after credit. Here’s a little image of the US CPI (Consumer Price Index.) You can see from this, or extrapolate, that our low unemployment and stable growth correlates to a stable CPI (controlled inflation rates.) Sorry the numbers are so small.

We’re looking at a global situation, and we have very few levers to push to influence things immediately. Interest rates are not a tools for us because of the potential to create inflation. We have to use taxes/spending. But we already have a massive deficit (which undermines the efficiency of the economy.) Any increase in spending will also increase the deficit.

We are not starting from moment one.  Over the last hundred years we have been using more and more efficient/complex means to help our economy.  We were employing all of these means as we descended into the current morass. It’s not like now we suddenly have new tools.  Our use of the ‘spending will help’ tool is has (helped) create our problems.

Looking at graphs of rising debt is like looking at graphs of rising green house gasses. It’s really easy to sort of say, ‘hey, that doesn’t matter’. But it really does. Deficit spending is like running up your credit card. At some point you end up having to make more and more money just to pay off the minimum. Deficits have to be controlled so that they don’t undermine the value of investment. If investment is less attractive, no matter where our currency and interest rates sit, our economy slows.

The government is looking at sector by sector investment, because everyone knows the debt is a threat to our economic health. Everyone knows that adding debt is unlikely to increase our economic health. But we ‘need to do something’.

The government can’t say, “Money for all my friends!!!”. So it is now in the process of prioritizing. Money for banks? Money for auto-makers? Money for green economy? Money for arts? The Institute for Policy Studies has suggested that one percent be spent on the arts. This would be an investment in human capital and communities.

We need to help our economy, but we also need to spend as little as possible helping our economy. The arts are an incredibly efficient investment. You get more bang for your buck with arts spending. It’s actually a little off-topic, but consider the following, which I pulled from Artslynx:

The three failed launches of satellites from Titan IV rockets in the 8.5 months before June 1999 totaled $3,000,000,000 in losses, an amount that could have funded the NEA for nearly ONE THIRD OF A CENTURY (AP & Denver Post 5/5/1999)

The $40,000,000 settlement made to the Italian victims of the ski gondola killed by US flier’s jockeying could have funded the NEA for more than HALF A YEAR (NPR Morning Edition 3/24/99)

On March 20,1999, The AP (read in the Denver Post) reported that The US Senate had voted to grant hog farmers an added $250,000,000 in aid to help them weather a free-market drop in prices. Such a subsidy could have matched our annulal NEA appropriation for TWO AND A HALF YEARS.

The arts are a very efficient economic investment, bearing many fruit. But like foreign aid, it is politically very bad. All government spending bears political risk. Arts funding is scary because when you give enough artists money you’re liable to end up with a piss-christ, and some flower penis, in addition to a mountain of bad poetry.

We need to encourage our politicians to fund the arts, and we must let them know that creative expression – even when it offends or bores – is part of what makes our country great. Politicians now need our vocal support to take risks, or, just like artists, we’ll only get more of the same.

What are our economic priorities? Innovation? Stability? Creativity?
How can the bailout be used for both short term good and to reinforce long-term priorities?

Arts sector investment makes sense as an efficient economic tool. In making immediate spending decisions arts spending must be considered a part of the generous economy, and must be defended from the interests of bitter economy actors.

Footnote:

Here’s a graph showing spending withing the US budget. Very simply: note that arts spending does not even register as a category.