Monday, April 14, 2014

SWEET this Week

Our meeting will be held at it's regularly scheduled time of Wednesday at 5. The last and final meeting will be on the 23 and we will be taking pictures once more so dress nice. The party will be held on Thursday at Sherri's house and we will be having dinner at Silver Gulch on Friday. Contact me for information at 907-250-2182 or for more information or details on rides.

Tuesday, March 25, 2014

Red Tape

The reduction and inevitable abolishment of the federal gas tax sounds like an excellent idea, it would accomplish several things: 1) this would remove absurd laws passed down by the federal government, 2) states would be free to set their own taxes and 3) there is likely to be a great reduction in the wasted funds from such taxes.
All these are good things, the only foreseeable problems may come in the form of each state having to set up their own form of DOT. There may be mild boarder issues when it comes down to maintenance but such trivialities are of little concern. It is mildly saddening that this will likely not pass, but then again few to no economical based logic ever survives the legal system.
Such things as the “Buy America” provisions code however are enough to make anyone who understands them cry. Stated differently this code can be phrased: “buy poorer quality merchandise at a higher cause. It’s your patriotic duty.”
At least one congressman has been able to “Man up” (for lack of better wording) and try and push this one forward. All the more power to you Mr. Graves.

Monday, March 24, 2014

Is this really the best decision?

Overall, I oppose abolishing the Federal Gas Tax and believe that the reasons to abolish the tax have a strong bias and even appear as Republican rhetoric. Alaska's "Bridge to Nowhere" was mentioned and I have seen very many articles in which it was mentioned, so it largely seems to me that wasteful projects are not the standard when one small project (relative to the national scale) is mentioned by many articles that cannot seem to find many other substantial projects that were wasteful. This entire article seems like a ploy to further tax cuts that increase budget deficits, and I also believe that 18.4 cents per gallon of a tax very reasonable considering that the price of gas is about twenty times greater than that. Furthermore, I do not believe that abolishing the tax cuts will enable all the states to create their own taxes that would replace the lost revenues from the federal budget because it is highly likely that the taxes would not be enforced at a level that would replace that lost revenue. Also, the redistribution of wealth and taxes is not necessarily as bad as many portray it because it enabled the wealthier to share their wealth with those that do not have as much, which is what many in the right-wing strongly oppose. It appears the article strongly favors abolishing unions to lower workers' wages and lowering standards for safety regulations, which I strongly oppose for many reasons that I will not discuss because it would make my response too long, but am willing to elaborate during a meeting if there is a need. My greatest fear that the article does not address is if there were to be fewer regulations, as the article asserts, transportation projects would become cheaper, but this would likely cause many more lives to get lost in traffic accidents. I would rather pay higher taxes than drive on unsafe roads and jeopardize my and others' well-being. Can we really trust a few politicians mentioned in the article that do not necessarily have the best expertise that can be present in larger groups such as the Department of Transportation with our roads or infrastructure that affect over three hundred million residents? Because I, obviously, do not.

Pain to the Federal Gas Tax

The title "Death to the Federal Gas Tax" is slightly misleading. The tax wouldn't entirely be abolished, just reduced to 4 cents a gallon, rather than 18 cents per gallon right now. If gutting the tax in such a way is such a good thing, in that it will reduce bureaucratic waste and redundancy, why not be rid of it entirely? The goal here is to allow the states the levy their own taxes, which will reduce those inefficiencies, but we might eliminate them entirely if the states are allowed complete control over their own taxes.

I'm afraid that these half-measures, while they're good in the short term by reducing costs on the whole, will have negative effects int he long term. A 4 cent tax on gas isn't nearly as much of a burden as an 18 cent tax is, but that also means that it's less likely to be noticed. But enough 4 cent taxes add up eventually to be much more burdensome, only no one knows where to look for reducing that burden because these taxes are too small to be notices.

It's wishful thinking to assume that any politician might want to support that notion. At least I can't complain that they're raising taxes.

Tuesday, March 11, 2014

Hello Keyneian ideals.

After reading this article my blood pressure was a little high, I suspect that this is due to a combination of Keynesian economics, western culture, and specialized philosophers who cannot tie their shoes.  
How did these people get into this field in the first place? (Please someone answer me this)
Limiting my rant to two topics in particular, one, spending is not the key, two printing money is not the key. These solutions, though they can be put to use to “stimulate” the economy are in my opinion some to the worst possible tools to use.
When one is trying to cool down or speed up the economy, one must consider human nature. If the economy is in a recession and jobs are tight, the rational individual will be drawn to spend less and save more, (This is a simple concept that goes over most economists heads) that is Human Nature. If the economy is speeding up and there are many opportunities to make money, people will become freer with their purchases, and investments.
This Human Nature relationship with the economy can be the cause of bubbles and recessions. However the Rules of The Game also play a significant role in determining the boom and bust cycle of the economy. The point I want to make here is that the economy (nationally) is partially driven by human nature, and partially by the environment that the economy creates. But which leads to which, is this the cause or the effect?
Isolation and verification on this scale is currently beyond our technological ability. So the point is moot.
With this in mind, Economist and those in power, are generally to detached and operating on limited information; as a result these individuals or groups are making decisions that often go against these two basic Human Nature assumptions I have put forth. This results in an economic train wreck and the people in power scratching their heads wondering why their plan did not work.
Both Keynes and Hayek made some valid economic points, Hayek more so than Keynes in my opinion. That said, I feel that both economists failed to take into account two important factors: People and environment.
Silvio Gesell, following Keynes path is looking at a WAR TIME ECONMOY. This is fine, so long as you intend your country to remain in a state of war perpetually. Otherwise the information used to sculpt his theories is flawed. Even the article goes to mention that Gesell had a “Hysterical rhetoric” in his writing. This alone should result in his work being thrown out on grounds of un-empirical. If one has to get emotional to make a point, it is likely that Normative in base.
Lastly, trying to free the land of rent, and money of interest is nothing short of madness. 

Monday, March 10, 2014

Who would trust an economist?

             The idea of accelerated money exhibited in Worgl has its upsides and downsides. The system of accelerated money is designed to discourage hoarding and encourage growth in the economy which many of us agree is beneficial to the free market system. On the downside it discourages saving and encourages risky behavior.
             While this system itself is not necessarily the best way for an economy to be run why isn't it that idea for markets are tested in contained environments like the ones described. I believe through the use of the scientific method we could find better ways to regulate and control the economy or perhaps we'd learn to let it be free. Economists speak from a theoretical standpoint that is only becomes reality after hard truths are met. Why shouldn't we make those mistakes happen in a controlled environment where the negative effects can be dealt with more effectively?

Global Socialism

I believe accelerating money circulation is generally a positive development, but it's inherent there must be negative consequences are resultant. However, freeing money from interest seems somewhat radical and it's very difficult for me to support that without a great level of independent investigation. Still, there may be some benefit to freeing money from interest during certain situation, but those situations can be hard to define. Even such a broad topic such as recessions are arbitrarily defined. Why aren't recessions defined with negative economic growth that last only one day or a year rather than the current definition? Thus, speculative measures can result to manipulate certain outcomes that can benefit interested parties because arbitrary definition may, in fact, not reflect reality. Reality is not static and can be changed very significantly to create a new reality when there is a need. I do agree with many ideas that were presented such as creating a global economic system, and I very strongly support integration between the world's countries. Why do I support such a notion? This is because the autarky of the Soviet Union was an economic disaster, so I do not believe socialistic systems are as bad as often portrayed because it seems to be working in China and even in the U.S. as social security that is quite successful and extremely popular. They are certainly not effective without a mixed economy because capitalism is an integral component of prosperity. The effect of accelerated money circulation may actually benefit capitalism very significantly, but socialism in a mixed economy must still be maintained without it taking up too much power over the economy. I am wary that getting rid of interest may even give a socialist system too much power over its capitalism counterpart. As a result, I do understand why Keynes inherently supported such a monetary system that does not have interest during recessions because it would strengthen global socialism. Still, I may be wrong because I am not Keynes himself and the consequences of global socialism are not very clear.

Wednesday, March 5, 2014

If he was your best...

Piketty’s argument sounded good, up until the second page with the imposing of a global tax on wealth. At this point the article goes downhill from there. I would like to bluntly throw out there that taxing the wealthy is not the solution, in fact it is one of the worst ways of dealing with the problem of inequality. This is because it destroys motivation. Stated differently, Piketty’s argument is: we need to decentivize people from becoming rich, then everyone will be paid equally, does this sound a lot like communism to anyone else?
I am happy that someone is finally beginning to catch on to the copyright problem, but saddened that this only got a single sentence, I strongly believe that this is a leading contributor to the problem.
Peketty and those who follow his example are stuck in the old paradigm of having the milk man deliver milk to your door. This. Must. Stop. As one once quoted to me: “Be grateful for the difficulty of your job, for if you did not have them robots would replace you.” , going back to antiquated technology and systems is a backwards effort. Trying to prevent inequality, is just as backwards, it is a side effect of “The Whole” and is on such a force of nature as to be the equivalent of trying to stop the sun rising each day.

Monday, March 3, 2014

I would like to respectfully disagree with the article. The free market is not wrong. There have been many examples in the past where a nonfree market was unsuccessful. I believe that ultimately many of the problems associated with any unequal wealth come down to moral standards. The fact is many people, regardless of how comfortable their personal life is, become unsatisfied if there's somebody with more wealth than them in the vicinity. Therefore I propose that the income gap is not in fact a bad thing, rather proof that capitalism is creating a bigger pie, With bigger slices, and smaller slices.

Capitalism vs Democracy

Capitalism and Democracy are two incongruent ideologies. One contends that a decision reached by a majority should be the law, while the other holds that laws should be based around protecting the property (or capital) of people.

The issues that Piketty raises are not the result of capitalism, they are the result of democracy. The problem with democracy is that a person is very unlikely to be interested in an issue which will be to their detriment in some small fashion, while they will be very invested in ideas that will benefit them a great deal. That is, I am unwilling to spend an hour educating myself to save 19 cents a year in taxes, but I will unwaveringly push for laws that will tax others at 19 cents a year to pay myself $5 million each year.

The problem of wealth inequality arises when a few dedicated individuals make it their goal to see to it that a great deal of money is paid their way, at another's expense. In a free market without taxation, this becomes an impossibility while the laws protect individuals from such theft. In a democracy, it is inevitable that it should happen because the laws will be created only to benefit a few at the expense of others.

The rising inequality is a non-issue, given that real purchasing power has risen across the board regardless. To suggest that reducing real purchasing power across the board, in the name of equality, is a sound economic endeavor is naive.

War and Peace?

Well, this week I decided not to necessarily write about the article, but there can be some correlation. I want to rather write about the ongoing crises in Ukraine. It's well-known that Russia has effectively taken over the Crimea and it's possible it can do the same with other southern and eastern regions of Ukraine. This turn of events was not anticipated, and even the U.S. spies were surprised by the sudden turn of events when Russia's Vladimir Putin was given permission to use military force. Also, the fact that they have about half of the world's nuclear arsenal means there is almost no chance any country other than Ukraine may get involved in a possible military conflict. This leaves Ukraine by itself against Russia and there is absolutely no chance Ukraine can resist the Russian military if Putin decides to use the power given to him this weekend. The only remaining options for the U.S. and E.U. are diplomacy and sanctions, but the U.S. has little economic leverage over Russia where the only effective measure would likely be placing sanctions on Russian banks and freezing Russian assets, but this is a very risky move because it can push Putin to be aggressive in Ukraine. There is financial turmoil on the Russian markets and that is caused by the E.U. having great turnover and economic contact with Russia, but them isolating Russia economically can have very grave consequences for Europe. Isolating Russia will push the country into the Chinese sphere of influence, and that process already been taking place over the past several years. In other words, Obama's and Europe's policy towards Russia are isolating it and the effects of that isolation can last decades if the current situation escalates. Furthermore, since I can speak Russian and often watch television from Russia I often see a sense of apprehension towards the West in the country because of the Soviet collapse and encroachment of the West towards the Russia's borders. Putin even publicly denounces the West for our poor demographics, secularism, and overall departure from traditional values. It seems as if he effectively decided that the country must remain isolated from the West and open to the East, which has many economic consequences such as Russia having negative economic growth this year. I believe the best way to get out of the current situation is to have a different leadership in Kiev that would not cause Russia to be aggressive because the West has effectively taken Ukraine out of Russia's sphere of influence very recently and this left Putin with few alternatives. Furthermore, a good way to prevent Russia from suffering much economic fallout from the Ukraine crises would be to de-escalate the situation and try to engage in trilateral talks that the many in the West vehemently oppose. Also, another possible way to prevent such disasters in the future is by including Russia in the European Union under terms that are favorable to both sides because the current conditions that would theoretically be imposed would destroy entire sectors of the Russian economy. I believe an economic solution to the situation is possible because Ukraine must remain a partner to both Russian and E.U., and not just the E.U. as currently advocated. All the trashing of Russia over Ukraine, the Olympics, an anti-gay law, Syria, Iran, etc. do not help the matter and likely increase the propensity of escalation. I believe the crises in Ukraine has economic roots and an economic solution, but the political implications seems to overshadow that fact. The E.U. wants Ukraine as a member, while Putin hopes to include it in a future Eurasian Union should replace the current customs union, so that conflict of interest has tremendous consequences and our administration publicly states the Eurasian Union should not even exist for political reasons, and it's likely to fail without Ukraine as a member. It's important to note that Putin has publicly stated that Ukraine is not even a nation and that the collapse of the U.S.S.R. was the greatest geopolitical catastrophe of the 20th century, so is he in another world as Germany's Angela Merkel stated or is he correct? I believe many do not understand Russia and its people and prefer to insult them for being different, which is what Russia's Federation Council addressed when granting Putin the rights to use military force after there were insults towards Russia from Obama. The U.S. says Russia is violating international law by sending troops to Ukraine and John Kerry said the U.S. is ready to "isolate Russia economically" and is "prepared to put sanctions in place".  According to Reuters, the ruble is already falling and Russian companies lost nearly $60 billion on Monday when the Moscow bourse slumped 11 percent, but this is hypocrisy when the U.S. didn't face sanctions and sent troops to countries such as Vietnam, Iraq, Afghanistan, Libya, Serbia, and Syria. According to Simon Mandel, Vice President of Emerging Europe at Auerbach Grayson & Co, the fact that "Russia has a natural hedge against geopolitical risk in the region" means there will be limited losses because "Russia-specific risk does rise, but it is hedged on the basis of higher oil and gas prices and the benefit that Russia will reap from that," when Russia is the world's largest energy exporter.

Idiots in Fancier Clothing

Global inequality is just another excuse people like Piketty tout so they can toss around their touchy-feely "redistribution" policies. It didn't work in communist Russia, or in Italy, or Greece; their the same old ideas by the same old idiots wearing nicer suits. They think since their good enough and smart enough that they won't make the same mistakes of the foolish policy-makers that came before them, which is exactly the mistake all those other people made.

First of all, I'm really confused as to why income inequality is even an issue. I understand the politicians' need to play it up for votes, but I have yet to hear an intelligent argument backed by data and/or economic theory which explains why income inequality is a bad sign even when everybody's real income is increasing. But maybe I'm just closed-minded.

Second, the article doesn't even mention how a "progressive global tax on wealth", of the sort Piketty would pursue in an ideal world, will incentivize unskilled labor and kill most innovation not backed by governments, which are notorious for innovating in the most inefficient way conceivable (only to be expected when the "innovators" aren't responsible for funding their own work).

There are also a number of issues that I could raise about the graph he posted (comparing world economic growth and the rate of return on capital) but most of my questions would be answered if I had a better understanding of where he got his data.

Bottom line, if I read his book, it will only be so I can have a good laugh and then complain about how the world's going to hell in a hand-basket.