Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

07 February 2009

Morning Coffee (151)

Where to begin? Certainly, there are dozens of places to begin, right? Dozens of places about which to lament and criticize; to wonder why. It's really amazing. If you watch or read the news, the world seems to be crumbling around our heads, doesn't it? So much so that even stories that would normally leave us aghast, seem but a blip on the radar screen. Perhaps they even seem like a welcome respite from the bludgeoning news of our shattered economy; the shattered American dream; the shattered facade of American global domination. I'll lead in with one such story (and it's not even political - well, maybe it is).

Czech This:
The Czech Republic surgically castrates convicted sex offenders, if these offenders request the procedure, according to a 1966 law. At first glance, this seems rather reasonable. But it always goes deeper. Investigators from the Council of Europe have found that many of those castrated were pressured into the procedure under fear of long-term incarceration. Offenders are being told that castration is the only option available, and that refusal could result in their detention for life. Even first-time, non-violent offenders are being castrated, and investigators found that those castrated in at least five instances were mentally handicapped. Investigators also state that offenders received information too technical for them to understand or no information at all about the procedure.

The Czech government insists that it is a voluntary procedure, with proven results in reducing repeat offenses, and performed on men who "cannot manage their sexual instincts and are sexually aggressive." The Council of Europe, however, debates castration's reduction in recidivism, pointing to three instances in which castrated offenders had committed serial rapes and other crimes.

The Czech government states that the Council of Europe failed to convince the country to cease castration.

In principle, I have no problem with convicted sex offenders opting to be castrated, so long as they're able to make an informed decision that they believe will help them live a more normal life (i.e. not rape or molest people). Clearly, there is no guarantee that the procedure works in the manner it is intended to, but the option should be there. However, a punishment should not be optional if authorities coerce criminals into it by threats of life in prison. Further, it isn't clear whether or not those who are mentally handicapped can make an informed decision. It isn't even clear if those who weren't mentally disabled were able to make informed decisions. For first-time offenders of a non-violent nature, such as exhibitionists, I do not think that castration is a viable punishment.

There are, I think, various degrees of sex offenses, and some are more vile than others. For example, in the US, an 18 year old male or female could be a convicted as sex offender for having consensual sex with a 16 year old female or male. Some will argue that the 16 year old cannot give consent legally, and this would be true. But is this 18 year old in the same class as a serial rapist or a pedophile? In many cases, legally he or she is. The law often has no categories, as it does with murder, and that 18 year old will forever have to register as a sex offender and be shamed forever.

But the issue here is castration. To make it clear, I am not against castration as a punishment, provided that it is viable for rehabilitating some offenders, but against the application of castration in the Czech Republic as described above. Some might wonder if I would be a proponent of forced castration. I would say no. Being as though there is no guarantee that castration would work as intended, I could not be for forced castration. We as a species generally hold reproductive rights in very high regard. To suggest that someone is so capable of heinous crime that he must be forcibly castrated is saying a great deal. And since castration, forced or otherwise, does not guarantee that the individual will not commit another crime, I posit that the individual must be incarcerated for life without the possibility of parole or release. Further, since we require sex offenders to register wherever they go, it seems that we view sexual crimes as more offensive than even murder, and reasonably so. With that being the case, I have no problem with the death penalty being applied to cases in which the offender shows a propensity for violent sexual crime and no potential for rehabilitation.

Cher = Absurd:
With a mom and a dad like mine, both audiophiles, I grew up listening to a lot of different music. My mom was always a big fan of the female singer Cher, who allegedly retired in 2005, but has since announced that she's working on her 26th studio album and is presently performing in Las Vegas. I usually liked the songs she sang, and was awestruck by her 1989 video for the song "Turn Back Time" in which she cavorted semi-nude around the battleship USS Missouri. While the whole album, Heart of Stone, was pretty good, I was a boy of 9 at that time, and was far more taken by the massive 16 inch guns of the Mighty-Mo than I was of Cher's fishnets. I suppose my point here is that even though Cher made some good music and forever imprinted in the mind of a young boy the image of one of the most impressive pieces of military gear in history set to music, it does not mean she's not an idiot. (Sorry Ma.)

Example: "Republicans almost killed me." She wasn't specific in how exactly Republicans killed her. As far as I can tell, she did pretty well for herself the past eight or so years. Having a deal to perform 200 shows over three years in Vegas doesn't usually mean that you're being slowly killed by the political party in power at the time. Perhaps she was being dramatic. Still, it makes her an sort of dumb. Especially when, after asked to explain her comment that Republicans almost killed her, she says,

"You know what? I have so - I try to be charitable and there are some really good Republicans, but I just don't understand how anyone would want to be a Republican. I just can't figure it. I don't understand. If you're poor, if you're any kind of minority - gay, black, latino, anything. If you're not a rich - I don't know. If you're not a rich born-again-Christian, I don't get it."

Look, I'm not a Republican or a Democrat, but I'm not entirely sure Cher is a leading expert on what a Republican is. She probably doesn't even know what makes up Liberal ideology, presumably her political bent, let alone the ideology of the party she clearly despises. I wonder how many "Republicans" she knows...It's almost like a racist saying, "I'm not racist, there are good black people; I have black friends." Good try, Cher. Stick to singing and rolling around in your massive treasure trove of cash...provided to you by many a Republican, to be sure. Some not even born-again-Christians.

The Issue You've All Been Waiting For:
The Economic Stimulus. It appears that our elected officials in the Senate, in their supreme wisdom and 19% approval rating, have come to an agreement on the stimulus package and are set to vote on it early next week. For all the uproar from them that this is a national emergency, which is the crux of their argument that this bill needs to be passed RIGHT NOW without going through all the normal procedures, it seems odd to me that the vote on the bill would be put off until early next week, whenever that might be. Presumably Monday through Wednesday sometime. Regardless, Democratic leaders hope to push the bill to Obama by the end of next week. The fact that these officials have been telling us for weeks that this is an emergency, but are willing to wait to vote shows the hypocrisy and ineptitude of that elected body. How so many members of a political body sporting a collective approval rating of below 20% by some polls got reelected I do not know. Perhaps this best illustrates the ineptitude of the American voter.

Certainly, my fellow Americans and loyal Coffee drinkers, you realize that it's best to rush through the passing of a bill worth $780-819 billion. Do I need to tell you why? Easy, because then emotions take over, and the majority can batter down any opposition before that opposition might begin to make sense to some of the more easily swayed members of the body. Also, less oversight. When you want to push through a bunch of frivolous spending that has nothing to do with stimulus, the faster you do things, the better.

Much has been written about this stimulus bill, and by better qualified people than I, so I won't go into a whole lot of detail. But there are a few things that perplex a mind as simple as mine. Other than the comments made by many regarding the amount of money actually going to stimulus (12 cents for every dollar) and how wasteful the bill is, one thing that sticks out to me as evidence of a fraud being committed by our elected officials is the comments by the Congressional Budget Office (CBO) regarding how much of this stimulus will be spent and when. In addition to saying that this stimulus bill is harmful over the long haul, CBO states that only 15% of the funding will be spent in 2009. Only 64% will be used during the next 19 months. This is contrary to Obama's proclamation that 75% will be doled out in the next 19 months. For something that allegedly needs to be done immediately, with limited discussion, it seems strange that much of the "stimulus" will not take place until at least 2010. And we're told daily that Americans are struggling and need relief now. And for all the good it will allegedly do, like create three to four million jobs at the cost of $275,000 per, the CBO projects that it will actually lower the national gross domestic product (GDP) over the next ten years.

But Obama says, "But broadly speaking, the package is the right size, it is the right scope, and it has the right priorities to create 3 to 4 million jobs, and do it in a way that lays the groundwork for long-term growth." I love how Obama uses a variation of hendiatris, a rule of three, to sell this to the public. "Right this, right that, and right the other thing." But that's not the point. The point is, this is somewhat contrary information than that presented by the CBO. A lower GDP does not indicate growth. Perhaps he's talking really long-term, as in 40 or 50 years. I don't know. He goes on to say, "These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work. Now is the time for Congress to act." Let me clarify for those who those who don't speak Politician: "Get bogged down" = closely scrutinize. "Distraction, delay" = have public discussions. "Politics as usual" = anything contrary to my own wishes.

I should point out that Obama ran a successful campaign largely on the premise of Hope, while denouncing the use of fear and "politics as usual." But fear is a useful tool, and I don't see how anyone can deny that he is using it in order to get this stimulus passed quickly. He said, "A failure to act, and act now, will turn crisis into a catastrophe." This isn't hope. This is fear. He is telling you that if this bill isn't passed right now, then your life is going to be worse in the future. This from a man who told us that "we have chosen hope over fear." Maybe hope only belongs on the campaign trail. If so, you've been bamboozled yet again by buying into his rhetoric. (For a fun side trip, check out the Truth-o-Meter from PolitiFact.com. You can see how much horse sheisse our politicians are selling you. Some of them actually tell the truth.)

Remember, Obama also recently said that his administration will "save or create" some-odd million jobs. Well, technically, as a candidate Obama was all about creating jobs, and now he's largely content with just saving them. Saving jobs. Ignoring the fact that the US will lose 500 million jobs a month, according to Nancy Pelosi, how can anyone say with any degree of seriousness in their voice that they've saved any number of jobs? One would think that, at the end of the day, everyone who has a job at that point - job saved! If you thought that the market created and/or saved jobs, you were wrong. It's Obama and his team of government that does that now. Obama is saving my job right now! Yours too, if you have one. If you don't, well, stand by for the creation of four or five or six million of the little buggers! They'll be yours for the taking. (Brewer Comment: In July 2008, the US population was estimated at 303.8 million people. Thus, every man, woman, and child in America has, if Pelosi's facts are straight, at LEAST four or five jobs at any given time.)

See Charles Krauthammer's article in the Washington Post for more on Obama's urgency. Also, see Read The Stimulus so you can, well, read the stimulus.

I Forgot to Pay my Taxes:
For those looking for me to comment on the inability of some of Obama's appointees to pay or remember to pay their taxes, I will point you to my friend and fellow blogger Publius' recent article about that very issue. We both agree on this one. I think that all members of Congress, the Cabinet, and Directors and senior staff of government agencies should be audited, just to make sure they're in compliance.

And thus ends another Cup of Joe. Tomorrow, the Logician will present to us part one of his "Barney-style" explanation of the current economic environment. Look forward to it and give him some feedback.

Word of the Day: Denigrate (verb): To attack the character or reputation of; defame. Our faithful public servants have denigrated Common Sense to the point of our abandoning it.

On This Day in History: The 11th Amendment of the US Constitution is ratified (1795). Charles Dickens was born (1812). Laura Ingalls Wilder was born (1867). The last heavyweight bare-knuckle fight takes place in Mississippi City (1882). The Mud March, the first large march organized by the National Union of Women's Suffrage Societies (NUWSS) took place (1907). The US bans all Cuban imports and exports (1962). The Beatles arrive in the US for their first tour (1964). The Central Committee of the Soviet Communist Party agrees to give up its monopoly on power (1990).

30 September 2008

Guest Writer - The Logician on the Economic Meltdown

Good morning Coffee Drinkers. I am most pleased to present to you the first ever Morning Coffee guest writer, the Logician. I've been trying to get guest writers for a long time now (yes, this is a guilt trip), but the MC doesn't pay, nor is it as prestigious as even the National Enquirer, although our journalistic integrity far exceeds that rag. Anyway, the Logician is a longtime reader and and has frequently commented on various posts. Since he has a mind for such issues, I asked him to write, in layman's terms, a bit about the economic issues that our country faces. So, please, enjoy what he hath Brewed for thee.

[Publisher's Comment: I'm not sure how the naming conventions for guest writers should work, having never had one, so mayhap this format will change.]

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Good morn to you good folk of the world, you who rise with dread when the sun rises, long week after long week, with a wish for the fragrant comforts of the percolator. Heartiest salutations to you all, and contempt and curses to the rest of you! And a hex on Pyrrhic verse, and all those who force the practice on suffering young. Read on, grow wise.


Leaving behind failed poetic greetings, let me launch into the topic of the day. The current economic crisis, with increasing foreclosures, failed banks, toppled securities firms, lost investments, and a staggering economy present an ugly picture. Many are objecting to helping incompetent and failing big businesses, as witnessed by the massive public rejection of a bailout.

The Morning Coffee's reader has no doubt heard the rhetoric: regulators failed, greed caused it, the market was overpriced, predatory lenders preyed on unsavvy customers, irrational panic in the stock market, tax cuts for the wealthy, greedy investors, people overspent. There's truth to many of these charges. There's lots of blame to go around, and varying degrees of culpability. Some have intentionally gouged customers, some have been willfully negligent, others stupid, most foolishly optimistic. It's a big problem with many sides to it. Hopefully the following survey of the landscape will present a clearer picture. I hope to explain the start of the problem here. The second stage of the problem will be in a subsequent essay.

The easiest problem to understand is that people are losing homes. Who's responsible? Ultimately, the customer accepted the mortgage. In most cases, sixth grade math should have told them they wouldn't be able to pay in the long run. Mental laziness, lack of wherewithal, indifference toward personal honor and responsibility provided the stimulus to enter into a loan that the borrower could not sustain over the long haul. Mortgage brokers and lenders acted as enablers by making it easy for people to get these loans. The scale of the problem inflated when pushy real estate agents withheld business from appraisers if they failed to inflate the value of the property sufficiently.

The other side of this problem is that lenders are losing money. In many cases this threatens their ability to survive and to continue lending us the money we need for our day-to-day needs and desires. The more that banks and thrifts go under, the harder it gets to receive a loan. Under current conditions, no one wants to give a loan to anyone but those with the highest credit ratings. It's becoming more common for lenders to insist on 30% of a loan as a down payment. As noted above, lenders were frequently responsible for their own downfall because of their shortsighted focus. By failing to require a sufficient down payment, failing to verify the borrower's financial claims, and failing to even crosscheck their own records and do a proper risk assessment, they set themselves up for a big fall. Why would anyone set themselves up this way? Greed and lack of personal loyalty to their institution played a big role, from the bottom up. The mortgage officer was glad to push through a crappy mortgage; if he didn't, there was no commission. The president of the company could point to increased sales and project ballooning revenues for the next year. One needn't be concerned with the fact that these mortgages are 30 year mortgages I suppose, so long as the killer yearly bonuses keep coming.

Lenders' negligence doesn't explain all their losses. Organized criminal gangs (white collar, usually) gouged billions of dollars from lenders and stole houses outright from the owners. These types of fraud are very cost intensive to uncover in many cases. To prevent these, the level of scrutiny for loan applicants would need to increase dramatically. This measure would delay loan approvals significantly, and require substantial additional costs passed onto the borrower. Lenders have typically made business decisions that help them define an acceptable level of risk. (No one – I emphasize this point - has made a serious attempt to quantify how much fraud is involved in this mess. Nor do federal agencies appear inclined to tackle that project. It would make many agencies, fairly or not, appear grossly negligent. Even if the criticism is unjustified, it would be a brutal rhetorical blow to many. On a political note, John McCain is the only political figure that has ever pushed for a systematic investigation on the extent of mortgage fraud. Specifically, he intends to create a "9-11 Commission style" body to investigate various aspects of the mortgage crisis, including the degree of damage caused by mortgage fraud.)

Another variable causing losses for lenders is that borrowers simply stop paying. If a borrower has a $250,000 loan on a house that devalues – as in many current markets – to say, $125,000, many borrowers decide that it's foolish to keep paying and simply stop doing so. The lender may recover some of the lost money, but they can only get $125,000 from the house, minus processing fees. It might not be worth while going after the assets of a welcher who probably lives from paycheck to paycheck anyhow. People from all classes of society have done the calculations, chucked personal responsibility out the window and walked away from the mortgages.

The lending institution fails because it took out BIG loans to allow it to make the "small" loans. Now they have to pay principal on those same big loans but don't have money coming in from the small loans. The lender also gets money from the sale of business securities. But investors see the problems in the mortgages and pull their money out. Now they lender doesn't have this money either.

That's the first part of the problem. The indirect affect on the rest of the economy is the bigger issue, but this will require a follow-up essay.

24 January 2008

Morning Coffee (97)

Remember those old Public Service Announcement commercials during the 1980s and 1990s that said, “It’s 10 o’clock, do you know where your children are?” I was just sitting here trying to come up with a pithy intro to our MC and was looking at the clock. And as the minute hand kept creeping past 0800, I was thinking of some commercial popping up on your TV or computer screen saying, “It’s 8 o’clock, do you know where your Coffee is?” Sometimes the Pot is broken and creeps along at a snails pace despite having plenty of grounds.

Finally, Dude, I’m Getting a Dell!:

I’m not a smart man when it comes to certain things. For example, I do not understand cricket. And higher math gives me fits. I’m comfortable enough in my faux genius to admit these things. Another thing I don’t get, a big thing, is economics. Listen, I’ve taken macroeconomics in college, and it’s helped me not at all (I had to flush it to make room for other things; my hard drive’s only so big). I know what GDP is. I know that our government ought to at least attempt to operate within the same basic economic principles that us peons are expected to live by. You know, not spending more than you earn or can pay on within a reasonable period, that sort of foolishness. But I don’t get “economics.”

We’re apparently in an economic downturn. Interesting phrase. Better than collapse or implosion, I suppose. But I don’t know how or why. Well, perhaps it’s because people spend more money than they can afford to spend on houses. But I’m sure it’s deeper than that. I just don’t get it. I know that, “it’s the economy, stupid!” but I’m dumb. Side note: You ever notice that anyone with a bachelor’s degree in economics or business is somehow an expert on all things “national economy?” I have. If they were so expert, we’d never have a recession or “downturn”, right? Forget the Smith and his invisible hand, these people would physically guide and shape the economy to their will. I think they’re more foolish about these things than I even with their degrees.

Okay, back to the downturn. The solution to this downturn is…tax rebates, or as our leaders call it, an economic-stimulus package. Eight-hundred dollars per person (who pays income tax) and up to $1,600 per family. The idea is that us peasants will rejoice in The Man’s throwing money at us and will go out and do what we do best: blow it. Infuse the economy with dollars. This seems weird to me for a number of reason. What if everyone simply saves the rebate? Okay, this probably won’t happen, but recent data suggests that people are spending less. Maybe they’ll all decide it would be better to squirrel the cash away. What are they (we) going to spend this money on? I think the idea is to buy American to, you know, stimulate the economy. Since most of the stuff we buy anymore is imported, won’t this actually stimulate foreign economies? Again, I don’t know. Just a thought. The final thought I have is, does this indicate the need for lowering taxes or something? The idea is to give people more money to spend out in the economy, yet we tax them a lot. But then, we give it back because, well, they didn’t have enough money to spend out in the economy. I don’t know. I got nothing on this economy business. But hey, I might finally be able to afford a new computer (all parts made in China), so, I guess, thanks Uncle Sam!

You’ll be please and comforted to know, however, that our government is working hard, late even, to get this package ready to go (there area few…sticking points…) before House Republicans head out of town this weekend on a legislative retreat. And if they can’t get it done then, they’ll try to get it finished and passed by the House and Senate by mid-February. They’re very concerned that our economy will fall to pieces, so they’re trying to get this out the door before President’s Day in February. If they don’t get it done by then, well, the economy will just have to wait until after their holiday. Priorities my friends. Priorities.

Some critics think that this could increase the federal debt. The Congressional Budget Office estimates that, because of the economy, our deficit would increase to $250 billion, not including any spending attributed to the stimulus package. Who cares? It’s just play money, right? Numbers this big are hard to comprehend, and it generally matters little to our political leadership anyway. Spend, spend, spend! Throw money at it! Make the problems go away until after the election cycle! This is what REALLY matters; that you will be comforted, falsely or otherwise, and cowed into putting them back into power.

Beckham’s Big Foot(print) Bends It:

Yes, that was a play on Beckham’s signature soccer kick and the 2002 movie “Bend it Like Beckham”, which featured a soccer playing Keira Knightly. Yes, it my attempt was poor. But what isn’t poor is David Beckham. He’s got some cash to spend, and he probably won’t feel much of a pinch from our economic down turn. To prove it to you, he went ahead and shattered all possible comprehension of a large “carbon footprint” last year. The British environmental group Carbon Trust estimates that Beckham is responsible for 163 tons of carbon dioxide a year. It doesn’t sound like much, but when compared to the average Englishman’s output (9.4 tons), the figure is staggeringly huge. How did he do it? Easy, he logged 250,000 miles flying back and forth between the US and England for soccer commitments in each country. He also flew 50,000 miles to meet endorsement commitments. He also owns 15 cars.

Carbon Trust thinks that he should spend some of his money educating people or buying greener vehicles, but I don’t really think so. I also think that Carbon Trust’s estimates are bunk and its language overly grand (Beckham’s footprint might be “the largest in human history”). For one, he can’t drive all 15 cars at the same time. Is that taken into consideration? Who knows? The Fox Sports article mentions that he travels for Galaxy (his US team) commitments, but does he travel with the team or separately? Again, I don’t know. I don’t like those carbon footprint estimates because they’re too easily skewed upwards. Flying a private jet while the rest of your team flies commercial is surely worse for your footprint, but if he flies commercial along with his team, then I don’t see how his footprint gets that much bigger. The plane would have made that journey with or without him. Does he really put out 17 times as much carbon as any other Briton? Your guess is as good as mine. I wonder though, what the carbon footprint for the Office of the President is. What about the collective footprint of our 2008 Presidential campaign? I’ll bet both are huge. Nevertheless, Beckham’s got some big feet, both on and off the pitch.

A Note on the Coffee’s Political Coverage:

I haven’t spent much time critiquing the Democratic candidates for the Presidency. I don’t critique because I generally feel that it’s easier for the average person (me included) to see through their BS that it is to do so for the Republicans. And there isn’t much to critique, since they basically run on the same messages every time. If I am wrong in my assessments, let me know. I critique the Republicans because their shenanigans are more interesting and more subtle; the Democrats’ shenanigans are just the same. Besides, we know that we’re either going to get Obama or Clinton. No surprises there. Clinton’s well known, and Obama’s pretty well known since he was thrust in our faces in the early 2000 (billed by Democrats as a possible President even then). But the Republican nomination is still very much up for grabs. It could be any of the three “frontrunners.” In any case, I already know that I don’t care for either of the potential Democratic nominee. I still don’t know what to think about the Republicans’ candidates. Vile, yes, but do I actually not like them yet? No. I’ve covered Huckabee and Romney a fair amount, mostly through the lens of religion, but I’ve not done much with McCain. For the longest time, everyone thought his campaign was dead, but here he is, the sort-of frontrunner. So now I should cover him. I will bathe him in the discerning light that is the Morning Coffee very soon. Perhaps some readers will assist.

I just wanted to make clear that my coverage or lack of should not be read as tacit approval for any candidate or any party. The Coffee strives to be objective. Not always possible, but always the goal.

Word of the Day: Nolens volens (phrase): Whether unwilling or willing. Neat phrase.

On This Day in History: Gaius Caesar (Caligula) is assassinated by his unhappy Praetorian Guards (41 CE). King Charles II of England disbands Parliament (1679). The first day of the Sementivae, a Roman festival in honor of Ceres and Terra.

“After I’m dead I’d rather have people ask why I have no monument than why I have one.” – Marcus Porcius Cato, “Cato the Elder”.