2/23/2009

Games Wall Street Plays

My favorite quotes of the month are all about how "the best and the brightest" are being put upon by terrible ideas like limits on CEO salary and talk about cranking up the upper bracket income tax rate.

The best and the brightest? Maybe, it's sad to say.

It's actually possible that this country has directed its best and brightest into do-nothing mobster occupations like tax accounting, finance, MBA-style management, marketing, law, and similar unproductive manipulative skills. Many so-called "top schools" have refocused their output into accounting, law, and MBA programs, moving out of the much more capital intensive science and engineering disciplines. Americans are rarely found in the engineering and science departments of our own universities. The money is found elsewhere and that's where the hot students have gone.

The money is the only motivation for the legal crowd. Where the money isn't is in government service. Under a constant barrage of Republican and faux-Republican (Clinton's "Eisenhower Republican" administration) executive branch bureaucrats for nearly 30 years, the federal government's talent level has fallen to 1929 levels. Reagan and the Bushies stuffed the legal system with hundreds, if not thousands, of untalented neocon fruitcakes and it will take decades, if we cared to do the work, to purge that collection of morons from the judicial system. Cinton packed the regulatory agencies with pro-corporate yes-men. Dedicated talent fled civil service after Reagan made it clear that talent was the last thing he wanted in government. For the last 8 years, Bush actually actively chased down talented civil servants and tossed them out.
If the United States wants to make a comeback, we are going to have to reverse all of this foolishness. The federal government is, once again, going to have to find a way to staff itself with scientific, industrial, economic, diplomatic, legislative, and white collar criminal investigative talent. Our universities and K-12 education system is going to have to relearn how to educated itself, then its students, in disciplines that are based in science and technology, not tax-evading money laundering games. We have to figure out how to, once again, attract the best and the brightest to government service.

Wall Street is the last place we want to waste that kind of talent. As anyone who follows history knows, Reagan's "miracle of the markets" is based on the squalor of criminal behavior. Markets, when allowed to run wild, are nothing more than a collection of gangsters in suits wallowing in greed, corruption, and collusion. Mathematic's game theory has long proven that the basic capitalist theory was a misreading of human nature. Libertarian theory is so far from reality that it appears to be as reality-based as Creationism. Humans are both greedy and lazy. The greediest and laziest are often best suited to take advantage of a system that is not based on laws that regulate those tendencies. Executives are not the cream of any crop and haven't been since the first generation of any industry. Once the founders are gone, the politicians move in and sharks begin to feed on the business culture, turning it from productive to vicious. Keeping the best and brightest from finding homes on Wall Street should be a prime directive of the education system, the legal system, and the rest of us.

For now, we are stuck with a generation or two of our best and brightest who are unsuited for any productive work. The American X, Y, and Z Generations have rarely been engineers, scientists, doctors, technicians, or even schooled in any reality-based discipline. Our society and our education system has wasted 20 years of bright young talent and there will be a terrible cost to the world because of that misuse.

A solid description of the flaw in our economic and education system is presented in "The Ascent of Money," a British documentary about how money has been disconnected from reality. The introduction to this documentary demonstrates the scale at which money has outstripped reality. The fact that derivitives have valued themselves more than 10x the total assets of the world is mind-boggling. Bankers have actually invented an alternative universe of money that argues against the existence of the real world. This is not only insane, but it is an example of how poorly our education system has prepared the average person to govern himself.

Obviously, the cure is in our tax system. It should be clear that a tax system is designed to encourage or discourage activity. We tax the stuff we don't want to happen and we don't tax the stuff we want to encourage. Currently, our tax system is designed by exactly the people our culture ought to be discouraging.

There is no upside to fantastic inherited wealth, which is the reason for inheritance taxes. G.W. Bush is the posterboy for why wealth and power should not be inherited. The people who campaign actively against "the death tax" are exactly the people who benifit from the lack of a rational tax system, which would actively prevent those people from inheriting the power to launch a meaningful campaign for anything.

There is no advantage provided to businesses or the culture for excessive executive salaries; it's not like these morons could go somewhere else and make money. We should stop providing corporate tax breaks for executive income expenses.

We need alternative energy research and development. We need a working education system. We need manufacturing, infrastructure, and technology. We don't need more lawyers, tax accountants, or MBAs. The fix is to tax to death the things we don't want and to reward the activities we desperately need.

Above all, the nation needs to develop and encourage leaders. However, leadership is top-down. When the top of our corporate structure is incompetent, uneducated, and corrupt, you can expect the economic levels below them to follow. For the last 30 years, from the President to CEOs, our "leadership" has been drawn from the worst of the worst. We have to fix that. We need to find a way to discourage our best and brightest from wasting their abilities on Wall Street.

2/22/2009

Conservative Crazy Man

You should read this article to get the whole gist of the concept: "Steele: GOP needs 'hip-hop' makeover." The article is about the new Republican National Committee Chairman, Michael S. Steele, and his plans to modernize the Republican Party. Steele wants "to attract younger voters, especially blacks and Hispanics, by applying the party's principles to 'urban-suburban hip-hop settings.'"

Sounds like more of that mafia gibberish about con games and dope dealing being "jus' bidness." Actually, that's probably not far from the truth. Steele is "the former lieutenant governor of Maryland and former state Republican Party chairman." Maryland, the home of Chevy Chase Bank and a variety of other credit card mobsters, isn't exactly a place you would go to find state-of-the-art anything. However, if you wanted to stage a movie about the mob, with lots of realistic and readily available stand-ins, Maryland would be a great place to visit.

Steele offered a lot of gibberish about how he was going to add bling to the Republican Party's image, but my favorite quote was, “I don't do 'cutting-edge.' That's what Democrats are doing. We're going beyond cutting-edge.” Beyond cutting-edge, state-of-the-art, current technology and into science fiction technology? Really, Mr. Steele? Republicans are going to use technology that doesn't yet exist? You clowns can't even cope with the internet, unless it's packaged in retarded apps like Flicker. The part of the backyard smear, crowd-mentality chanting is going to invent something? I don't think so. The last original idea generated by a Republican appeared in Teddy Rosevelt's Presidency and nothing even interesting has come from that crowd since.

2/18/2009

Paying for the Best

Summing up a Washington Post editorial, Harold Meyerson asked, "Is this any way to treat our best and our brightest? The guys who shuttered our industrial base, indebted us to Communist China, hooked us on plastic and subprime mortgages, bought our politicians, eluded our regulations, wiped out our retirement plans -- and then turned to us for help when their house of debt collapsed? Damn straight it is. Bring on the pillories." This comment was in regard to the banking CEOs' whining about being pay-limited to $500k if their failed companies took the bailout corporate welfare. Meyerson's entire analysis is worth reading and I've linked it to this paragraph. "The best and the brightest" is a label often applied to insanely corrupt and incompetent elites, from Greek times to today.

For greed and arrogance, it's hard to top the characters pretending to be wounded today, though. CEOs in every industry have been providing the nation with short-term thinking and bookie quality accounting systems since Reagan and the Republicans' "Contract on America." That collection of gangsters and conmen put a hit on the nation that it will take decades, again, to repair. Most likely, though, we'll do the usual American thing and give up on the repair job about 1/4 of the way through the work.

For some whacked reason, we appear to be unable to break our connection to royalty and religion. Americans, inheritors of Washington and Jefferson's "great experiment" in democracy, seem to crave queens, kings, princes, and princesses instead of equality, justice, fairness, and rational thought. We tossed off a reasonably competent Jimmy Carter for the royally incompetent Ronny Rayguns and his band of buffoons and criminals. A dozen years of stagnant economy and regressive taxation and corporate welfare, the country was broke and headed down the trash chute. So, the royalists relented and allowed a competent poor boy, Billy Clinton and his academics, to straighten out the financial and social mess crazy Ronny had left. Eight years of competence was clearly too much to stand, though. The country hunted down one of the least literate princes of the elite and assigned him and Ronny's leftover bozos the task of wrecking the nation's financial system and downgrading the talent in our federal government to something similar to the old Soviet Union’s.

The purpose in all of this idiocy is hard to determine. Maybe there isn’t one. It’s possible that, like all failed societies, we are committing suicide because we’ve had enough of success and democracy.

Listening to the wingers babble about “creeping socialism” and the terrible sacrifices being made by “talented executives” (probably the rarest species of human on the planet) has made me suspect that we might be the most gullible voting public in history.

First, let’s examine the “talent” being sacrificed. If these executives were so talented, they wouldn’t need federal handouts to fix the problems their brilliant leadership created for their businesses. In my experience (in two Fortune 100 companies and a variety of smaller enterprises), what appears to float to the top of the bowl is rarely cream. As in academic institutions, corporate bureaucracies are mostly “led” by men and women who have avoided the blame for catastrophes and who have taken credit for successes that had nothing to do with their own activity. In other words, politicians of the worst sort.

Even the dullest Apple Kool-Aid-sipper has to be smart enough to know that Steve Jobs is as far from being a designer, engineer, and product guru as Bill Gates is from an motivational speaker. Even the dumbest car guy knows that William Clay Ford, Jr. couldn’t design, repair, market, or drive a Ford car if his life depended on it. The collection of fools and criminals that misled AIG, Citigroup, Bank of America, JPMorgan Chase, Morgan Stanley, Goldman Sachs, PNC Financial, and US Bancorp couldn’t balance a check book with Quicken and a literate assistant. Many of these CEOs are not smart people, but they are clever people. AIG’s Ed Liddy, for example, couldn’t manage a hotdog stand, but he can probably sell ice cubes to Eskimos.

Obama is finding it difficult to staff his cabinet with intelligent, experienced, reasonably uncorrupted people. In our current social and economic environment, it’s hard to find anyone who has become prominent in any area who isn’t one of these sharks. We, as a nation, are so wrapped up in wanting “anointed leaders” to follow that the people who are doing leading are left behind doing the actual work while the mindless figureheads take the credit. It takes time and energy to accomplish anything. It doesn’t take much of either to take the credit. When taking the credit becomes more rewarding than doing the work, you end up with the kind of system that we are seeing crumble before our eyes.

2/15/2009

More of the Same

The picture at right is of David Santistevan in his 5th year of incarceration in the grossly misnamed Idaho Correctional Facility. For a man looking at 40 more years in prison, he's in exceptionally good humor.

David, an old friend of mine, screwed up five years ago. We may never know how badly he screwed up, since he didn't receive anything even resembling a fair trial in the redneck, hillbilly, skin-head, KKK-worshiping state of Idaho, but he definitely screwed up. According to the joke Idaho passes off for a court system; David Santistevan committed attempted murder with a handgun. David claimed that he justifiably acted in self-defense. Where David screwed up was when he panicked and ran from the scene of the crime(s). He kept screwing up and hid the weapon after dismantling it. He's a poster child for my rule, "every panic reaction you will ever have will be wrong."

Where David screwed up was when he bought a gun for self-protection in an avowed gun-rights state with conflicting feelings about gun rights. Where David screwed up was when he decided to defend himself, western-style, instead of running away, rational-being-style, when he had the opportunity. Idaho's perverted sense of justice gets completely bent out of shape when a man of color (David is Hispanic) protects himself from white men.

If those white men happen to be "teens," even if they are six-foot, 220 pound teens, Idaho falls all over itself in vengeance. In David's case, even though the teens recovered from their injuries and were not charged with any crime, he received a 45-year attempted murder conviction from the all-white jury and court system. The court consistently refused to admit evidence that pointed to the victims' past activities which might have "prejudiced" the jury toward leniency. In the trial, a good bit of evidence was presented that demonstrated that David was so overwhelmed by fear that his response to being attacked was psychological unbalanced. The posing-for-election prosecutor called that “psychobabble” and it was obvious from the local barely-literate hick newspaper reporting that the prevailing attitude was “hang the Mexican bastard.”

I have a couple of problems with Idaho's gun laws. First, I don't believe that the 2nd Amendment was intended to arm the general public, so an individual's "right to bear arms" isn't something that I think deserves defense by the state; any state. Second, when a state goes as far overboard as has Idaho, Nevada, Texas, Minnesota, and other loony conceal-and-carry states to allow citizens to arm themselves for everyday war, adding special penalties for using guns in crimes is disingenuous. Either people have the right to use guns as conveniently and often as sharpened pencils, or they don’t. Get your psychobabble gun-bearing laws to line up; or quit babbling. Either it is dangerous for ordinary citizens to be armed like bandits in the grocery store or it isn't. If it isn't, tacking weird fixed sentencing guidlines to crimes committed with guns is irrationa. If it is, drop the hammer on gun-toting citizens everywhere.

The local press worked the pages hard to demonize David with all sorts of near-racist descriptions. David, however, is normally a harmless, decent, incredibly talented musician. This is a picture of David with my grandson a couple of years before he went to jail. He's teaching Wolf to sing the blues, something that David did well before going to prison and is probably incredibly talented at now. I'd sent a copy of this picture along with a letter of reference to the court to be read at his sentencing, but the court decided to ignore my experience with my friend. It didn't fit their preconceived notions of his viciousness and they probably worried that actual knowledge of David might moderate the jury's desire for revenge and punishment.

So, David is giving guitar lessons in prison, writing a guitar instruction book, and becoming a jailhouse lawyer. The state of Idaho is wasting taxpayer money keeping this guy behind bars, while Idaho politicians regularly commit crimes that make David's worst moment look benign. The US is the First World's champion prison state. In "the land of the free," one in 100 citizens is behind bars. Last year, we blew $55 billion dollars on state and federal prison costs. With the crashing economy in front of us, we can expect to add a few tens of billions to that in the next few years. 2.3 million citizens in prison puts us well ahead of China; and that totalitarian state has four times our population.

Like most criminal activities in the US, prisons are a "business." There is money to be made in canning every 100th citizen behind bars and it's a business with political clout. Every incompetent bozo lawyer can find a home in a prosecutor's office and a little time spent as a bureaucrat appears to be a pass into higher political office.

Adam Gelb, director of the Center's Public Safety Performance Project, said "There are large numbers of people behind bars who could be supervised in the community safely and effectively at a much lower cost -- while also paying taxes, paying restitution to their victims and paying child support."

Not much profit in that. The corporations who mismange most state's prison systems would fight that kind of logic with millions of political dollars and lobbying. Idaho, for example, is looking at $1 billion in prison construction and in 2008 the Idaho prison budget was $2.82 billion. If the state's economic forecast was half as optimistic as the prison population forecast, Idaho would be an island of prosperity amidst a nation in severe depression.

Idaho, however, is an economic catestrophe state with property values falling like bricks from the sky. Even Idaho's gungho media admits that as of December, "1 out of every 479 houses in Idaho has been foreclosed on." Idaho's Unemployment Insurance fund is expected to be completely broke by early 2010. Unemployment is heading toward a national high. Wood and paper product sales, Idaho's prime industy, have dropped more than 10%. Tech has all but abandoned Idaho, mostly due to the poor K-12 education system and lack of higher education technical capacity.

It seems to me that a more rational legal system would be something worth looking at, but that's going to be a fight because the vested interests have fear on their side. Fear, as we've seen for the past 8 years, outweighs rational thought by at least 10:1.

2/06/2009

The Word is "Depression"

The media and other talking heads are doing everything they can to avoid the word "depression." They use phrases like "unemployment hasn't been this high since 1931," "the worst downturn since the Great Depression," and "economic growth has slowed to post-1929 levels," but they don't call it a depression.

A depression is supposedly "is a severe economic downturn that lasts several years." The quacks who like to refer to themselves as "economists" have latched on to a phoney statistic misnamed the GNP as the defining number for economic direction. In the last 25 years, the GNP has been an indicator of how well the top 1% is doing, but it doesn't say anything about the rest of us. As a backup, these mathematically-dishonest academics spew babble about the unemployment rate, which has been a fudged number since Jimmy Carter decided to define military personnel in the employed category. The real unemployment figure in the United States as of this month is about to creep past 20% (counting recently unemployed, "discouraged" workers, and "under-employed"). Add the military to that and you have unemployment near the 1930s numbers.

The "several years" portion of the depression definition is pretty bogus, too. The employment figures have been angling downward since a few months before the 2000 election. I think that's because many intelligent people began to suspect that Bush would win that Presidential election and the country would go to hell with another regressive Republican in the White House. Whatever the cause, real economic growth stalled and has been sinking ever since. Republicans are consistently bad for the economy while being good for corporate mobsters and other bottom feeders.

Like Reagan and his daddy, Bush II has left the country broke and broken. The more times we experiment with this foolishness, the more likely it becomes that we won't make a comeback. Americans are resilient, but they are not infinitely flexible. Like another elastic material, glass, if you bend the fabric of the culture and economy far enough, it will break. Of course, the elites who power the Republican Party would love to break the democracy because their short-sighted view of the world has them in the driver’s seat and the national car planted firmly in the middle of the road. They aren’t bright enough to realize that traffic is moving both directions and the occasional curve will toss their incapable asses into the same vacuum the rest of us will suffer. The word “stupid” was invented to describe neocon elites. Look it up, there is a picture of the two gay neocon princes, Donnie Rumsfeld and Paul Wolfowitz, beside the definition.

We are in a depression. We have been in one for several years. We will be in one for several more. It might get much worse before it gets better. It might not get better, ever. Cultures die. Nations fail. The United States of America could fail and die. Twenty years from now, this continent could be littered with a Baltic-style collection of disorganized states. It could happen. Many want it to happen.

I have my own definition of an economic depression and, for that matter, a recession. When hard-working, marginally skilled citizens can not find a job that pays a living wage, the country is in a recession. When skilled professionals can’t find work, the country is in a depression. We’ve been in a recession since 2000 and we’re entering a depression right now.

2/01/2009

Partisan?

A while back, a reader described my outlook as "partisan." He seemed pretty convinced that is a terrible perspective on politics. Partisan is a word that I only find used in fairly low-brow environments, so I wasn't familiar enough with the definition to be able to defend myself. So, I ignored the comment. But, like popcorn and other objectionable things that stick in your teeth, that word stuck in my mind. So, I looked it up.

Webster's defines the word as follows:
1: a firm adherent to a party, faction, cause, or person ; especially : one exhibiting blind, prejudiced, and unreasoning allegiance2 a: a member of a body of detached light troops making forays and harassing an enemy b: a member of a guerrilla band operating within enemy lines.

Huh?

Me?

I couldn't be less of an "adherent to a party, faction, cause, or person." I know that my constant ranting and general repulsion of everything Republican might seem like an endorsement of their opponents. That is a logical fallacy. I have never been a fan of the theory "the enemy of my enemy is my friend."

First, it's true that the most positive emotion I can give to any Republican is pity. I pity working class people who think that the Republican Party gives a flying damn about any aspect of their life. That's the best I can offer. Many of the folks I know who fancy Republican candidates are solely interested in preserving their anticipated (or already received) inheritance. To those folks, the best I can offer is my disgust. You simpering, worthless, underserving . . . you get the picture? I'd be hard pressed to think of a reason not to jetison the inherited wealthy into the oceans. Thow them all into a giant clown cannon and shoot them into the seas.

Now for the rank and file of the Republican Party. They are all, everyone of them, crooks. I wouldn't trust a Republican candidate with a butter knife. For 28 years, they have raped and pillaged the nation of everything worth admiring. Their whole reason for being is to steal as many of the nation's assets as possible. They are, simply, traitors.

Now, for the opposition; mostly Democrats. They are a pitiful excuse for democrats. They are better than Republicans, but not as good as the Green, Independence Party, Labor Party, American Reform Party, and, occasionally, Libertarian politicians. Whenever the Democrats give me a marginal option, I opt to vote for any of the alternative parties. If that's your definition of "partisan," you need to adopt English as a Second Language. In fact, I'd guess you are a moron.