Principles and Consequences

Let’s talk about something that doesn’t have anything to do with politics.  Let’s talk about principles.

A principle is a rule to inform one’s behavior, particularly when the consequences of that behavior aren’t predictable or consistent.  However, when followed, individual and societal consequences generally work out better than when they are ignored.

So, “don’t stick your finger in the electric socket” isn’t a principle under this definition, it’s simply common sense.  (Or for those of us with authority issues, “operate conditioning.”)

“Don’t accede to blackmail,” with its less predictable outcome for any specific case, would be a principle.  For instance, although it seemed reasonable to avoid economic costs and violence by paying ransoms and not arming ship crews, this policy in the shipping industry virtually created the booming Somali piracy industry.

Closer to home, years ago we observed insurance companies routinely paying up to several thousand dollars on questionable workers comp claims, on the pragmatic grounds that it was less expensive than contesting them.  Again, although this seemed to make sense in the immediate term, this substitution of spreadsheet analysis for principle resulted in a flood of nuisance claims that were much more costly in the end.

So, by ignoring a fairly common, straightforward principle because of a shortsighted focus on near term results, a completely avoidable crisis was created.

You may have correctly sensed an impending return to politics.

From the CWLP (City Water, Light and Power) website:

“Of the 628,359 MWH purchased by CWLP in 2011, 359,825 MWH was in the form of wind energy … CWLP paid $17,440,716 … for the wind energy and sold it for $5,409,741 … for a net cost to the utility of $12,030,975″

This resulted from the contracts our city leaders signed after caving into the Sierra Club’s greenmail, and will continue at least until these bogus contracts reach their expiration in the latter part of this decade.

Oddly enough, that twelve large a year probably would’ve prevented CWLP from going into technical default on their loans and we wouldn’t have been stampeded into the latest large rate increase by Mayor Houston.

That’s the thing about principles.  Unlike that electric socket, they don’t give you a sudden jolt at the moment you violate one.

Perhaps it’s too much to expect politicians to act on principle.  But maybe they could at least show some common sense, like “don’t pay someone else over twice your production cost for your core service when you’re already producing a surplus,  then sell it for a third of what you paid for it.”

I think this would be considered straightforward enough to the average citizen.  For elected officials, maybe they could make it a stretch goal.

 

 

 

Posted in Economics & Politics, Energy & Environment | Leave a comment

I don’t mean to brag, but….

This past weekend The Wife and I attended the annual Illinois VFW banquet for the Voice of Democracy awards.  The reason we were there was because The Youngest Son had submitted an essay (which also had to be submitted as a recorded speech) on the subject of “Is there honor in serving in the military?” for this annual contest, and had won at the local and regional levels.  The eighteen kids who won at the regional levels, out of the over 4,000 original entrants, got an expenses paid weekend at the Crown Plaza, a tour of the Abraham Lincoln Presidential Museum, attended a ceremony at Lincoln’s tomb, and culminated in the banquet where the winners were announced.

We, along with the outstanding folks from the local and regional VFW, were on pins and needles as they announced how the kids placed, and very happy when Kenny was awarded second place (being completely objective and unbiased, I think he should’ve got first place.)

All the people from the state and national VFW organizations were just terrific to the kids, and also very generous.  All eighteen received monetary awards to be applied towards college expenses.  The first place winner received $3,000 and is being sent to the national event in Washington, D.C., where the national winner will receive $30,000.  Turns out the VFW isn’t just that little club down on the corner were vets can have a few beers and a walleye dinner.

I did think it was a shame that time constraints of the program meant only the first place winner, an outstanding young lady from Chicago, delivered their speech, especially since most of the nearly 500 in attendance were either vets or spouses who can’t be thanked enough for their service.  When Kenny gave his speech at the local and regional events, I thought it was moving, but it really seemed to resonate with those folks who’ve actually “walked the walk.”

The Wife has sent it to a number of friends and family who wanted see it, and I decided I’d like to share it with anyone who stops by here occasionally.  Hope you like it, too.  And remember that you don’t have to wait until Veteran’s Day or the Fourth of July to tell a vet “thank you.”

Here’s Kenny’s speech:

Is There Pride in Serving in Our Military?

For every day the sun rises above the Atlantic to shine down on a waving American flag, a soldier has fought and died to keep that flag flying. Every newborn patriot has been brought into the greatest country in the world only through the sacrifices made by our service men and women. From the beaches of Normandy, to the deserts of Afghanistan, our soldiers should feel proud to be an American as they stake everything to preserve our way of life.

When I was young, I had the opportunity to ask my great grandfather about serving in the military in World War II before he died. I remember the way he leaned back in his chair and the far off look he had while he thought about his time overseas. He told me the story of the first battle he was ever in, an assignment to capture a hilltop the enemy was also trying to take over. “It was about the scariest thing a man can ever do, shootin’ at another human,” he told me. When I asked him more detailed questions, he couldn’t remember where the hill was or even what nation of soldiers they were fighting. But what he did remember was the fear he felt before charging the hill and as he looked at the young men around him, seeing that same fear in their eyes. But every single soldier was there to push each other forward, up the hill, and on to victory.

This is what pride in the military is all about. It doesn’t come from getting their name on the news or getting attention. They do what they are told until the job is finished, no matter how hard it gets. Once the bullets start flying and the bombs explode, it doesn’t matter whether a soldier is black, white, Asian, or Hispanic. The only thing that matters is brothers and sisters serving alongside each other to protect this great nation from every threat.

On a cold day in February 2007, a group of servicemen stood at attention behind a wall of trees in Fort Benning, Georgia. Less than a quarter of a mile away from them my family sat in the stands, waiting to catch a glimpse of our own hero, my brother. The ceremony kicked off with two tactical armored vehicles skidding across the asphalt as smoke bombs released a thick screen. An elite squad of rangers in ghillie suits exited the vehicles with stunning precision and got into position before the smoke had even cleared. But as it cleared, we all looked past this impressive display to see our soldiers marching in formation, graduated members of the United States National Guard. The speaker for the ceremony finished and the stands emptied immediately as we ran to our soldiers. Every soldier broke ranks and hugged and kissed and held their families they had waited so long to see.

But among these soldiers were those who stood their ground, staring dead ahead. These soldiers didn’t have a mother to kiss, or a brother to hug, or a father to tell him how proud he is of him. They spend their holidays in a barracks without a family to send them gifts or cards or just call them on the phone to talk about their day. What these soldiers have is the man to their left and the man to their right and that may well be the best family they could ever have. At the end of the day, they should feel the most pride of all. It takes courage and honor to fight for loved ones, but these soldiers fight for all Americans, regardless of whether they have someone waiting for them when they get home or not.

So when you get the chance, show them why they should feel proud. When you see soldiers in uniform, shake their hand and thank them for serving this country and preserving our safety. Take the opportunity to ask a veteran about their service. If you hear people criticizing the military, defend our troops who are defending you. These are all small things we can do to inspire soldiers to see how great they truly are.

When soldiers hear songs like “America the Beautiful”, they should feel proud in knowing that as the notes echo across each amber wave of grain and resound through purple mountain majesties, their sacrifice is remembered. Whether by the dawn’s early light or at the twilight’s last gleaming, the sights of this beautiful country are here because they have given everything up to preserve it. And when Old Glory flies overhead, every red stripe has been paid in full by the blood of our troops, and the stars on that flag will never dim as long as they continue to fight for us on the front lines.

Kenny Naughton

Posted in Random Thoughts | 5 Comments

New threat — Global Diet Warming

One of the commentors on my last post concerning Paula Deen’s new status as punching bag for the anti-fat hysterics took me to task for my condensed description of metabolic syndrome and diabetes.  I’ve never had any prior correspondence with him, but he stated that he’s a 20 year insulin dependent diabetic.  Based on his statements concerning fat, I guess him to be motivated and very well-read on the topic.  Unfortunately, he seems, like many other folks, to be in the wrong library.

His screen name and email indicated he’s a political candidate.  A trip to his site and a little Googling showed him billed as a conservative (Republican) small business owner.  His site seemed to show a good grasp of the issues of the day, with some concrete ideas on what to do about them.  In other words, he’s probably unelectable.

He challenged me on my science, and I think I acquitted myself satisfactorily.  I occasionally hold forth on nutritional topics here, but am not generally interested in an all-out nutrition science debate in this forum.  I’ll do it, but I have to keep looking  up references and fact-checking and it’s just a slow process for me.  Not in my wheelhouse.  I’d prefer to just send them over to the Younger Brother’s site and then tell them — as the Younger Sister did to me once with the biggest, meanest kid on the block — “let’s you two fight!” (forty years on and my ribs still hurt if I turn just right.)

Anyway, the more I thought about it, the more I thought I could make a convincing case to this young man based on some common ground.

Here goes:

Dear Mark,

I appreciate your weighing in on my post, especially as we seem to disagree.  Keeps things more interesting.  I’d like to make an appeal for you to reevaluate your current understanding of this particular topic based on a political argument, as your email and website seem to imply this is an area of common ground for us.

Unless you’re a Newt Gingrich-style “consistent conservative,” I assume we’re on the same page on global warming (I’m actually libertarian, but we should see eye-to-eye here).

What do we agree on regarding this issue?  Here’s some premises…

*  Global Warming (previously “Global Cooling,” currently morphed into just plain old “Climate Change”) got its start with a group of what you would call “true believers” with an agenda who jumped to some very fast conclusions based on what was then sketchy but plausible evidence.  Since it supported their preconceived notions, they were more rigorous about defending their conclusions than preserving scientific integrity.

*  The initial alarms having rung, governments were delighted to jump in with grants and other support, because it’s obvious on its face that the answer to every problem this line of inquiry raises is — “more government!”  This resulted in an immediate, entrenched, politically and financially vested special interest group.

*  Criticism pointing out the flaws in the initial and all subsequent models were/are delayed until well after the initial conclusions are spoon-fed to a generally unquestioning media.

*  Every model designed to “prove” Global Whatever has been shown to be either flawed or hasn’t supported the desired conclusion.  The result is always then described as “inconclusive.”  In more honest science, this outcome is called “failed to support the hypothesis.”  And in real science, the goal is to  devise experiments that would actually disprove the hypothesis.  Then if the experiment finds results not in accordance with predicted results, the correct conclusion is “the hypothesis was disproved.”

*  Even when these models fail, as they all do, the “researchers” still insist that we should behave as if the hypothesis had been proved — “just in case” — because everyone knows they’re probably right, they just haven’t been able to prove it yet.

*  The researchers cherry-pick their data sets with the goal of supporting the conclusion they’ve already decided they’re going to publish, and ignore contrary data sets.

*  The summaries published by the researchers say their hypotheses have been supported, even when analysis of the actual data refutes their conclusions.

*  Casual observations that correspond to the chosen models, like a few years of record warm weather, are trumpeted as further evidence, while contrary observations, like unpredicted lowering trends, are explained away as irrelevant or “paradoxes.”

*  When questioned, supporters insist that their work is above reproach because it’s been peer-reviewed.  As Climate-Gate exposed beyond question, the peer-review process is completely controlled by the same group pushing the preordained conclusions.  In other words, a favorable peer review will only result from getting the “correct” answer, and real challenges won’t be accepted by the “peers.”

* Supporters rely heavily on various “appeals to authority” arguments.  The biggest whopper is the “there’s a consensus!” argument, citing x number of scientists who agree.  Besides simply refusing to acknowledge highly qualified people who don’t agree, the idea that scientific fact is somehow subject to some quorum is ludicrous on its face.  “I’m sorry Mr. Newton, but you’re two votes shy of the two-thirds majority defined in our bylaws, so the whole gravity thing is now false.”  Oh yeah, and don’t bother looking again because — “the debate is over!”

Let’s keep in mind, however, that all of this research is done by very smart, usually sincere people in lab coats with advanced degrees and lots of initials after their names.  They’re published, highly regarded in their fields, and head whole departments at some of the most prestigious institutions in the world.  Keep in mind also, once they’ve bought in to the orthodoxy, they have a lot at stake.

…Okay, what’s this got to do with your health?  Everything.  See, the global warming folks didn’t invent all of this.  They just cobbed the playbook from the “Lipid Hypothesis” crowd.  Every one of the points above was preceded by years in the diet/nutriton field, from Ancel Keyes’ cherry-picking of flawed data from six out of twenty-two countries (because the others didn’t support his “fat causes heart disease” conclusion), to the original diet guidelines cooked up by a George McGovern staffer over the objections of scientists, to the hearthealthywholegrains cheerleading and funding of the USDA and it’s “buy more commodities” food pyramid, to the massive funding expended by the government (and Big Pharma) on studies to “prove” the fat=cholesterol=heart disease connection (so $tatin$=low cholesterol=better heart), to the complete failure of those efforts, and the subsequent hearlding of the “proof” even in the face of the actual results.

So as a conservative, do you really think that this was the one area where the government was going to be intelligent, objective, efficient, honest, and immune to politics and literally billions of dollars of profits and influence?

But I don’t want you to listen to me — I’ve got an Accounting degree, for crying out loud.  I’m just suggesting that you apply the same level of honest inquiry and intellectual rigor to a topic that will directly affect your life, health and hapiness as you would any other topic where very interested, very vested parties are saying “trust us.”

As I stated before – -you’ve been lied to.

Cheers,

JN

Posted in Diet & Nutrition, Economics & Politics | 8 Comments

No Paula, say it ain’t dough!

So, Paula Deen has been outed, with palpable glee and sanctimonious delight among the media and food police, as a Type 2 diabetic.

Not to say it couldn’t be an instructive moment.  Unfortunately, that would require people knowing what they’re talking about.  If that was happening, here are some things you’d hear…

*Type 2 Diabetes is a “burning out” of the pancreas’ ability to produce insulin, the powerful hormone that keeps the body’s blood sugar in a very narrow range — so you don’t die.

*Insulin works by forcing your muscles to burn blood sugar first while pushing other nutrients into your fat cells until the sugar is dealt with.

*If you continuously bombard your system with sugar, your muscles can eventually become “resistant” to insulin’s signals and will not uptake the sugar.

*At that point your body will convert the sugar to fat and store that in your fats cells, too, because insulin’s immediate concern is keeping you from sugar-stroking, not how you’ll look in a swimsuit this summer.

*Since insulin is still present, your fat cells won’t release fat for your body to burn as energy.  So you’ll tend to eat more while remaining hungry and tired because you’re starving at the cellular level.

*Carbohydrates are sugar.  Even the hearthealthywholegrain kind (yeah, it’s pretty much officially one word now).

*Fat does not affect blood sugar.

…So, when America’s comfort food guru comes up diabetic, are we cautioned about the pastas, flour, sugar, potatoes, or breads at the foundations of many of her dishes — every one of which is dumping sugar into her now compromised system?

Nope.  The experts say it was the butter, cream, and mayo that did it. So cut those fats!, eat healthy grains!, cook with industrial vegetable oils!  Oh, and take your $500 a month drugs.

It’s your choice.  As for me, hold the bagel and pass the bacon.

Posted in Diet & Nutrition | 37 Comments

“Insider of the Year” nominations are in! And the prestigious “Sleazie” statue goes to…

This may be a bit risky with nearly two months left in the year, but if there’s some kind of “taxpayers’ friend” award for 2011, I’d like to go ahead and nominate Solyndra.  That’s the insider-connected green company that got half a billion dollars in government loan guarantees, then jumped insider payoffs in front of those taxpayer-backed loans, gave themselves some bonuses, went bankrupt, and laid off all of its workers– in less than a year!

That kind of efficiency is just too rare when it comes to government programs.

Think of how much better off we’d be if Amtrak had just politely collapsed after a couple of years, instead of continuous billion dollar annual losses over its forty plus year existence.  That’s not counting the billions of “high-speed fail” money.  Amtrak will keep bleeding us far into the future; but Solyndra jumped in, crashed spectacularly, and is done and out.

Or think of what we could’ve done with the billions of dollars spent every year pretending that it’s a good idea to grow food, expend more energy than it produces to make ethanol, then burning it.  Instead of leeching us for decades, Solyndra proved quickly and definitively that “lowest cost solar panel producer” still means first place economic disaster.

Then there’s FutureGen, which after years of painstaking analysis, the feds decided to site in Mattoon, IL.  Then not.  Kill it?  Of course not.  After minutes of intense reflection, they decided they really meant to build a pipeline from a defunct power plant, then spend years pumping billions of dollars into a black hole.  Along with some CO2.  You know — the stuff that comes out of our mouths every time we breath.

So, if you understand that our government’s primary activities these days involve wasting money, distorting markets, and suppressing real entrepreneurship, you have to agree that Solyndra was a total bargain for taxpayers.

As a bonus for my green friends, since Solyndra stopped burning taxpayer money, that should count as reducing our carbon footprint.

Everybody wins.

Posted in Economics & Politics, Energy & Environment | 1 Comment

Things you’ll never be able to explain to a WS Occupier…

Just saw another reference in today’s local paper as to how the catalyst for our continuing financial meltdown was due to “lack of financial regulation.”

Which is really the problem with just about everything in America, isn’t it?  From swimming pools, to banks, to unregistered house cats, to insurance, to keeping wild animals, to school lunches, to where municipal employees live, to pig farms to — well, just about everything — we just need some more rules.

And — they don’t even have a rule about millionaire baseball players chewing tobacco.  How’d that get by?

At least in the financial arena, we don’t have to worry about anything ever going wrong again as we now have the Mother of All Financial Regulatory Laws — the Dodd-Frank bill.

Cynics may point out that if people paid any attention, former Senator Dodd and Representative Frank would be known as “co-conspirators” instead of “cosponsors.”

Be that as it may, Dodd-Frank is a regulatory masterpiece with enough new rules, regulations, bureaucracies, czars, and apparatchiks to make “Compliance Specialist” the hottest new job in any industry that has anything to do with money.  So we’re all safe.

Or not.

Bank of America, with the blessing of the Federal Reserve,  just shifted several trillions (yes, with a “t”) of dollars of derivative risk from its struggling Merrill Lynch operation to its struggling bank operation.  Why bother?

Well, when those bets go bad, if they were still on the Merrill side, the stockholders and bondholders would take the hit.  By moving them to the bank side, they’re now backed up by the FDIC and its completely inadequate $3.9 billion (yes, with a “b”) fund balance.  So who’s backing up the FDIC?  Do you really need to ask?  Naturally, after the next bailout, people will demand even more government and regulations.

Remember, you heard it here first — the situation is hopeless, but not serious.

Posted in Economics & Politics | 4 Comments

Come on in — the water’s fi-aaaiiiiiiiieeeeee!!!!

You’d have to be a pretty cold-hearted SOB to take a horrible tragedy and use it as a lesson in economics and government stupidity.

At your service.

The local YMCA just avoided having its pool closed by committing to install $20-30,000 of equipment to comply with the “Virginia Graeme Baker Pool and Spa Safety Act.”  It’s named after a seven-year-old who was trapped and drowned in the suction from a spa drain.

Unfortunately, Virginia was the granddaughter of Secretary of State James Baker III.  So instead of just a cautionary tale for parents, we got a law that misses the mark while adding thousands of dollars of costs to outfits like the YMCA.  Which doesn’t even have the type of drain that creates this hazard.

As reported, this regulation affects around 500 public pools in Illinois.  If the other 499 public pools in Illinois had to spend similar amounts, that’s over $10 million for Illinois.  Rough that out over 50 states, and you’re nearing half a billion dollars.

I know — heartless.  After all, how many lives will be saved because of our beneficent federal officials looking out for us?

Fair question.  Maybe someone should’ve asked.

According to the Consumer Product Safety Commission, from 1999-2010, twelve people died in this kind of accident.  However, only four were in public pools.  Private facilities — like the one Virginia Graeme Baker drowned in — aren’t covered by the bill.

Is it really a good idea to allocate half a billion dollars to maybe prevent one death every three or four years?  What if we spent $5 each on warning signs, and the rest on guardrails or mammograms instead?

Resources are finite.  Since they insist on deciding how they’ll be used instead of us, perhaps we should start holding the politicians accountable for them for a change.

Do it for your grandchildren.

 

Posted in Economics & Politics | 2 Comments

A trillion euros? How much is that in gyros?

In a recent letter to the editor in my hometown paper (Springfield Journal-Register), a writer helpfully offered to clarify the European financial situation for us economic rubes.

He used a parable of a banker named Angela Merckel (coincidentally, the same name as the German Chancellor) who heartlessly imposes strict conditions on a hapless but well-meaning borrower who’s hit one of life’s rough patches.  Let’s assume our victim — who apparently lost her job and then filled out a loan application instead of a job application — is Greek.  As things go from bad to worse for this poor wraith, the banker continues to arbitrarily add stricter and stricter conditions to the loan.

The writer then proposes a “radical idea for loans. How about only requiring, as a condition for loans, that they be paid back on time? Isn’t that the way it’s supposed to be?”

Sigh.

I only occasionally write responses to argue with “experts” like this.  Firstly, they’re just so wrong on so many levels that it’s cumbersome to mount a rational argument in anything smaller than a novel.

For starts, banks don’t loan money to people who aren’t working, unless the government tells them otherwise.  They can’t add stipulations to a loan after it’s made; they can if you go back for MORE loans to make the payments on your first loan and keep spending money you can’t pay back.  But they wouldn’t increase the loans on an already bad loan — unless the government told them otherwise.  And banks have always pretty much only cared, as a condition of making a loan, that you can pay it back on time.  Unless the government tells them otherwise.  So these days his idea isn’t radical — it’s quaint.

Secondly, in the back of my mind there’s always that old saw about arguing with this type of expert, where the risk is they’ll “drag you down to their level and then beat you with experience.”  Oh wait, that wasn’t arguing with “experts.”  I think it was “idiots.”

Well like I said, I was going to just let that one slide by, but I serendipitously just happened to get a copy of a delightful new book on the European debt debacle titled “Boomerang.”  It’s written by a fellow named Michael Lewis.  If you’re not an armchair economic nerd who finds well-written tales of economic disaster hilariously entertaining, you may have heard of another little tome he wrote under the title “Moneyball.”  Apparently, it has something to do with baseball and they even made it into a movie with some Brad Pitt guy.

“Boomerang” is a great read even if you’re not one of the aforementioned economic nerds (although I’m not sure why you’re still reading this if you’re not).  He covers several of the main countries involved in the ongoing global financial meltdown, easily ranging back and forth from global macro-economics to man-on-the-street insights from both major and minor players.  He has interviews with Ministers of Finance on one hand, and another with an Englishman who went to a stockholders’ meeting solely to throw rotten eggs at a bank CEO.  It’s fun to read, fairly short, very contemporary (some of the stories are literally from just a few months ago), and if you read it you’ll know more about world finance than 94% of the general population, 98% of economists and other experts, and 100% of politicians.

At any rate, Greece — our unfairly put-upon damsel in distress in the previous story and the “G” in the PIIGS acronym of economic dead countries walking– gets a complete chapter.  Turns out there’s a few twists the SJ-R perfesser didn’t cover.  Let’s put on a dark suit and power tie so we can play international banker, then take a look at how it looks from the lender’s side of the desk. ..

(Note that some of the money numbers I’m listing — the ones without dollar signs –are actually in euros instead of dollars — a euro works out to about $1.35 as I write this.)

Greece has a population of a bit over 11 million people.  While we’re talking about a hopelessly bankrupt sovereign entity with a morally corrupt and intellectually inept government, it’s instrumental to note that the population of Illinois is maybe a million or so over that number.

Greece has already recently been loaned an additional $145 billion.  This loan was made primarily so they could pretend to make some payments on their previous loans and also make a few payrolls for its monstrous government workforce and even more monstrous retirement benefits (kind of like charging your credit card payment to another card, and also buying a round for the house).

How monstrous?  Reference Illinois again for comparison — our bureaucrats admit to unfunded pension liabilities of over $80 billion.  Of course, it’s really much more.  We’ve also got, depending on who you ask, $8-12 billion of unpaid bills and “structural deficits.”  That’s because you can’t call state borrowing you’ll never pay back “national debt.”  We’re beyond broke, and honestly pretty much beyond bankrupt.

Greece, roughly comparable in population, has unfunded pension liabilities of over $800 billion.  That is in addition to the over $400 billion of national debt it’s eagerly piled up.  That comes out to over $100,000 per citizen — over a quarter of a million apiece if you want to spread it out over the minority who actually work.  Of course, it’s really much more.

How do you get that bankrupt?  Well, as an example, they’ve got a national railroad system that takes in 100 million a year.  Unfortunately, the rail system’s annual payroll cost is over 400 million (plus 300 million of other operating expenses).  It’s easy to run up that kind of payroll because they employ way too many workers and then pay them an average of 65,000 a year. They never run on time, even when they’re not on strike.

You may have read about the riots when our poor heroine was forced by the evil “bankers” to raise the retirement age for government pensioners from 58 to 60 years as part of this new, severe austerity.  The horror.  You probably didn’t know that the retirement age is even lower — 55 for men and 50 for women — for “arduous” occupations.   You may be thinking “ok — cop?, firefighter?”, but you’d be missing several of the hundreds of others given this designation.  Radio announcers, for instance.  And hairdressers.  And waiters.

So here in our loan department this maybe not-so-innocent applicant is asking for another loan, to be used to make a payment on the last loan you made to her, and to also make payroll for all of her friends in her sundry businesses that all have expenses several times what their revenues are.

Did I mention that when she got the first monster “loan” it was only after making solemn promises that she was only spending 3 or 4% more than she was making (numbers provided and vouched for by her close friends at Goldman Sachs)?  But then the day after she got the money — and spent it all — and the bank finally received copies of her credit card statements, it turned out she was already spending 12-15% more instead?

There’s absolutely no hope that she’ll ever be able (or intends) to scrape together an honest payment.  And when you asked why she couldn’t maybe ask some of her friends and relatives  why they couldn’t perhaps pitch in a bit to help — like her cousin the doctor, for example, who lives in the million euro house — she explained that they where all poor and in fact none of them not on the government payroll ever make more than 12,000 a year.  At least that’s what they all claim on their taxes.  All of them.

Knowing a bit more about the reality of the situation, then, are you going to loan even more ungodly sums of money to this poor down and out hard luck case?

HA!  Trick question again.  You keep falling for that one over and over!

Huge chunks of that money are loans from the International Monetary Fund (IMF), and the U.S. is obligated to fund 17% of IMF loans.  They’re loading up to step in with even more as you read this.  The U.S. ante will probably be around $100 billion for this next hand.  (BTW, nearly half of the money in U.S. money market funds are in paper from the European banks that are holding those worthless Greek loans — so much for your “safe money” you thought was on the sidelines.)

Everyone “in the know” knows she’s never going to pay you back.  But you see, you already did make the loan, and you’re going to make the next loan, too.

How’s that for radical?

 

 

Posted in Economics & Politics | 2 Comments

Dodging a Billion Dollar Disaster

To help understand how Congress really feels about Americans, maybe they could have town hall meetings where we could be personally slapped in the face while they call us morons.  It’s a little harsh, but it might help some people finally figure it out. Especially the morons.  Just a thought.

Well, maybe not for everyone.  As a screening test, we could only include anyone who thought the entire government was going to shut down last week unless the Republicans caved in and added an extra billion dollars to the FEMA budget to make it through the last three days of the federal budget year.

Not that the “conservative” side of the duopoly was refusing to add the dollars in — they just wanted to cut it from somewhere else.  This startling turn of events, where Republicans insisted on doing what everyone agreed to do way back a couple of months ago, naturally brought outraged accusations of “being a bunch of meanies” from the usual suspects.  Even more startling, the Republicans didn’t panic — they just left town.

Faced with a sudden outbreak of fiscal reality, FEMA apparently went around all of their offices and checked under seat cushions, the backs of desk drawers, and maybe recycled some of their soda cans.  Amazingly, they were somehow able to “find” an extra $40 million.  As it turns out, using this kind of inspired penny-pinching, FEMA has actually come up with an extra $180 million for the month of September, and $2 billion for the fiscal year.  Adding the final 40 mil put their fund balance at $175 million, meaning they could finish the week.

This raises several questions among people who don’t need to attend those town hall meetings:

If FEMA spends, as press articles pointed out, $30-$40 million dollars a day, why exactly did Democrats insist that they needed an extra billion dollars to make it through three days?  Even a member of Congress should be able to handle that math.  (Answer: it was going to be a slush fund)

Even if they ran dead out of cash, why couldn’t they just take, say, Friday off and go back to shoveling money out the door to their favorite contractors on Monday?  After all, that was the start of the new fiscal year.

There were ominous references to what might happen if there was another major disaster during the remaining week of the fiscal year.  Who would take care of the victims in case of some unforeseen calamity?

Oh, I dunno — how about the Red Cross, churches, police, neighbors, firefighters, fraternal organizations, and just plain old American (or not) citizens.  You know — the ones who always show up first whenever there’s a disaster and start pitching in and helping while the government spends those first few weeks making speeches and pulling its head out of its budget.

Hopeless.  But not serious.

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Balanced budget debate — “Next man makes a move, the [sheriff] gets it!”

Remember that scene from Blazing Saddles? (Yes, I know he didn’t say “sheriff.”  I’m not up for a PC death match over a stupid word.)  The townsfolk, enraged that their new sheriff is “of color,” form a lynch mob and things are looking inescapably grim for the hero (Bart — hilariously played by Cleavon Little).

Without a second to spare, he pulls his gun out and points it at his head and declares “Hold it! Next man makes a move, the [sheriff] gets it!”

In the face of this ruse, the ignorant sod-busters immediately forget their original intentions…

“Isn’t anybody going to help that poor man? ”
“Hush, Harriet! That’s a sure way to get him killed!”

It’s make-your-sides-hurt funny, because it’s so preposterous.  I thought.

But in the here and now, the townsfolk were fed up, enraged over the mind-boggling debt tsunami and about to hold the elected aristocracy responsible for the first time, reckoning day threatening to dawn on the entire welfare state, and what does Sheriff Boehner and his deputies pull out of their collective trillion gallon hat and hold to their head?  The Balanced Budget Amendment.

In other words, instead of actually spending the same or less revenue than the government takes in, which is the one thing they’re supposed to do, they’re going to promise to hold a gun to their own heads and threaten to shoot themselves if they don’t spend the same or less revenue than the government  takes in.

And the rubes fall for it.  Again.  It’s cry-your-eyes-out sad, because it’s so preposterous.

Here’s how this would work if it really happened…

It would take years to pass through the states.  In the meantime, they’ll be spending money like drunken politicians because “sure, the debt’s exploding, but we don’t have to worry about it because the BBA will fix it. ”

The gang that will be holding that gun to their own heads will be writing the language of the amendment.  They’ll understand the need to allow for exceptions in extreme circumstances.  Like if we go to war, or there’s a nuclear meltdown, or the Big One hits California, etc., etc.  No one can imagine all of the possibilities, so it will say something about if everyone agrees it’s an emergency, they won’t have to pull the trigger.

Day one.  The bill, after making the state circuit, finally becomes law.  There is much rejoicing and self-congratulation and photo ops of the historical event where the government will now force itself to do what it never had the integrity or intention to do before — by holding a gun to its own head.

Day two.

Treasury Secretary: “Mr. President, members of Congress, we won’t be able to pay the debt, send out Social Security checks, and meet our other obligations unless we immediately make massive and painful spending cuts, end subsidies, close entire federal departments, and completely redefine our entitlement programs, including abolishing many of them.  ”

President and Congress: “IT’S AN EMERGENCY!!”

Day three: A few Tea Party folks file a suit insisting that this is not an emergency as contemplated by the amendment, but in fact the exact business-as-usual that the amendment was intended to address.

It will take at least a couple of years to work its way up to the Supreme Court.  In the meantime, they’ll be spending money like drunken politicians because “sure, the debt’s exploding, but we don’t have to worry about it because the court will fix it. ”

Two years later, the Supreme Court, having added a liberal due to the Democrats sweeping back in after the backlash over the Chinese foreclosing on the Grand Canyon, rule that Congress must raise income tax rates to 75% on anyone making over $250,000 a year and pass a 90% tax on any estates over $10,000,000 and also a one time “Investment in America” tax of 45% on any IRA or 401k plan balances.

That’s bad, because — even though the minimum wage is now $50 an hour and median household income is $187,000 — gold is at $17,000 and ounce, cigarettes are $100 a pack, and 63% of Americans are still on unemployment since eligibility was extended to a maximum of 1, 099 months due to the recovery still being a little flat.  There’s a bit of offset for the pain, however, as the intention to finally address the debt leads Moody’s to upgrade the rating for U.S. debt to CCC+, causing mortgage rates to ease down to 39%.

Americans are finally enraged and dumbfounded enough to start asking how they can possibly do that, but the politicians sadly shake their heads and explain that it’s not their fault and they don’t really want to do it but they have to — it’s in the Constitution.

So you’re standing there looking into the bluest eyes God ever created, thinking about what her world could’ve been if the dollar hadn’t been so badly inflated that its value is now measured in the BTUs it can produce burning it, and she asks:

“Why couldn’t they just have pulled the trigger, Paw Paw?”

“It’s what they do, Baby.  It’s what they do.”

Default, you useless dumbasses.  It’s our only hope.

 

 

 

Posted in Economics & Politics | 10 Comments