Wednesday, September 16, 2015

Go Back 100 Years?

It was quite interesting to see how Illinois has more government jobs than manufacturing jobs. Maybe that is because Illinois is the state with the most total local governments with 54 local governments per 100,000 residents. Looking into it I found that some people had more than a dozen governments where they resided. Having this much government is very extreme. However, manufacturing has become a lot more automated than in the past, and it is plausible to suggest that even many services can be automated such as accounting. For the other article, the short periods that appeared to be selectively chosen to show average annual spending growth with the change of deficit or government as fraction of GDP, which means that data could have been rigged. Still, what the article showed appeared to be common sense because, obviously, debt decreased with lower annual spending growth. I do agree that the debt problem should be figured out, and that the government has grown very large. I do not necessarily agree that the government should be the same size it was a hundred years ago because society has changed very significantly since then. I do not think that we could spend the same that was spent when there were fewer roads, bridges, colleges, and other social spending programs that we take for granted. 

Tuesday, April 28, 2015

Lant Pritchett: ignorantly self-righteous

Lant built this article on a cracked foundation. He alluded to a perceived irony that on one document posted in the work place that the employer will not discriminate on the person's national origin and yet he saw America acting in a protectorate roll to ensure immigrants cannot work without proper documentation. I would argue that the employer has every right to discriminate based upon legal mandates that ensure a person can work in the United states: people must be documented and accounted for within the tax base. Therefore, the employer cannot discriminate based upon your national origin once you're legally allowed to work here. Further, he references U.N. Documents which are idealistic at best to demonstrate the world should be without boarders in regards to employment. He brings to the forefront that we have a broken immigration system but truthfully john Oliver did a much better job.

Personally, I think the time frame to become legal to work in the United states is at best a day and at worst 5 days with the required documentation being little. A possible solution would be a world wide finger print data base.

Economically, I think immigration is great for our economy. The immigrants should be able to work what ever job they see fit and is worth their time. However work should be necessary and he immigrant should not be a burden nor have any benefits thanks to the American tax payer until after a designated amount of time. You need to serve 4 years active duty to receive 100% of your gi bill. Why shouldn't an immigrant's benefits be scaled as well?


It is evident Lance Pritchett has no understanding of the benefits of stable borders and functioning immigration policy in regards to economic stability. He also deliberately mars the line between an employer's non-discrimination policy between that countries' citizens and illegal aliens. He points out that ppl are poor based on where they are from, but fails to acknowledge that the economic state of both a country and its populace are a direct result of the policies endorsed by those same ppl. This is clearly shown in countries that have different levels of prosperity; yet they share borders and have similar resources/economic means for revenue.
  In his accolades of the unrealistic goals set by the UN, the author promotes his agenda and beliefs of how the world should function while disregarding all evidence of how it functions in reality. Notice that the wealthiest nations on earth are not a part of the UN (China, USA, Russia), perhaps because UN policy would not help all nations in the long run, after the eradication of borders and the redistribution of wealth is carried out at some point in the future. Like so much political rhetoric, the guidelines of the UN garnish the approval of a majority, while the agenda of the UN is the accumulation of power. The goals of peoples and countries are repeated over time, while the means of persuasion and compliance adjust to current technologies and events.

Monday, April 27, 2015


Especially interesting to note is that when we define a person's place of birth, we do so by the state they were born in rather than a geographic region. For example, a "South African" is from South Africa the country, not South Africa the geographic region. We can know about a person's economic power by knowing their country of origin. Knowing this, we can know that those states most totalitarian are the ones with the poorest quality of life.

Sunday, April 26, 2015

What's the Equilibrium?

The article presented many interesting points, but the consequences of what was discussed are very significant. It’s one thing to make general claims, but it’s another thing to prove them. One of points that I really disagree with is that the article claimed that if someone moved into the U.S. they would make a few times more than they would in their country of birth, but that assumes there is no mass movement of people in the U.S. in the levels the article suggests. The number and gravity of assumptions made by the author is outstanding, so until the claims about how everyone would get paid more are supported I would just simply think these are nothing more than ideas. I do agree that barriers for working somewhere should be removed, but at the same time it would obstacles that nobody really knows. There are many security issues with completely opening all borders, so who knows how it would work out. Another issue is whether all countries will open up their borders because even if half the world does there would still be great discrimination. Another issue many countries would not like to give up their sovereignty. The world would be like one large country or state with no borders, but this is where geopolitics can get messy with sides arguing about how wealthier countries are getting crowded while poorer countries would lose population. Some countries would get flooded and then, I believe, living standards will fall in those wealthier countries until some sort of equilibrium is reached. The point where equilibrium is reached is very important, and that equilibrium may result in consequences that are hard to imagine. The economic aftermath would be very significant, but I am not sure if such a shock would be good or bad. Gradually moving towards opening borders seems more appropriate than doing it instantly. I am an opponent of doing great reforms without really knowing what the benefits and costs are. The article did not present those consequences, and rather spoke about discrimination. Obviously, discrimination is bad, but it doesn’t mean discrimination would end with what the author proposed. 

Tuesday, April 21, 2015

Too big to fail

If an industry is too big to fail then their security should be resoundingly clear based upon their size. However, it doesn't seem like any industry is too big to fail if they aren't conpetitive. The medallion market seems to be an industry that is coming to a close solely because uber drivers see the opportunity cost of their time and expenditures as less than what a standard taxi will charge. There are some draw backs with uber, such as, the direct contact a person may have with the clients bank account. However, this can be quickly remedied by installing a card swiper with a secured tablet in the back seat and having an account with transact, a program that enables one to transfer funds from one account to another. UAF uses this program in the bursar's office. I'm not quite where this elitist evgeni comes off thinking he needs a bail out because the protectionist measures set up by NY for his taxi company are failing. Maybe he should instead of begging the government for money he should placate those who use his service. Possibly he could set a higher standard or have newer vehicles with fewer smells. Or possibly, he could drive the price so low that the uber price would no longer be an attractive alternative since uber doesn't stabdardiE vehicles and varies operator to operator. Overall it seems like uber found the way to set the price back to equilibrium and the good guys finally win

Monday, April 20, 2015

Tranportation Regulation

1. Bailouts are never good. ever, even when there would be "catastrophic effects" on the economy. It's like setting a broken bone: it's going to hurt, but if you want it to heal right it needs to be done.

2. The entire taxi vs uber thing is a clusterfuck that is derived from the existence of taxi medallions in the first place. If we didn't have taxi medallions, then there would be no problem in the taxi domain.

3. This bailout requires medallions. Without medallions this bailout is meaningless. Not only is it a bailout, which is already bad, but its bailing out taxis in the worst way. Even if NYC decides that taxis are a crucial part of the culture and must be saved at all costs, there are other ways of making that happen than strengthening the medallion requirement.

If I were supreme ruler of NYC, I'd revoke the rules regarding taxi medallions and watch this whole mess fix itself.

Saturday, April 18, 2015

Risk and Return

I believe, bailing out the taxi medallion moguls such as Evgeny Freidman is ridiculous. The first thing that I noticed was his Russian name, so looking at his biography showed he in fact was. That was not surprising at all considering that this is background helped him rise in business, but it means he is lucky at being able to rip off his drivers rather than good at business. He even paid $1.2 million in fines and restitution for ripping off his drivers. Now, it almost appears like he is trying to extort money from New York City taxpayers because he took too much of a risk investing so much into taxi medallions. He does know a bit about the taxi business, but a YouTube video of his shows his business strategy was based upon overpaying for medallions to outbid everyone. He would then lower his monthly payments by extending the length of the financing terms. He was able to pay for the loans with the large revenues he was generating and he didn’t even pay for claims insurance for three years to defer the payments until later by being self-insured. Payment deferrals helped him rise and even his gas hoarding that helped him during Hurricane Irene allowed him to price gauge during that time, and that was another way he was lucky. I do think it was a great idea for him to bring hybrids into the taxi business in New York City, but his luck appears to have run out. With the medallions dropping in value he should look for ways to diversify to lower his diversifiable risk on his assets. I don’t know how much he understands about finance, but he did mention in the video how many were losing on the financial bubbles when he was making money without realizing that the taxi medallions may have been a bubble. He even said his business is recession-proof because he does better during recessions, but my problem with that statement is not that he may be doing better during recessions but rather him saying that the business he is in is recession-proof. That statement shows that he fails to understand finance fundamentals because there is no such thing when his returns are so high. One of the most important concepts in finance is the relationship between risk and return because it's an axiom that flows through finance, but he fails to understand that his business has risks with statements that claim his business is recession-proof. That is essentially him claiming that he can get great returns and not bear the risk. That is absolutely nonsense. If you wish the get the great returns you must bear the risk. You cannot just bear the risk, and then demand the taxpayers bail you oil when the business begins to go down under. I would recommend him to look towards diversifying to reduce his risk because right now he would likely need capital preservation rather than growth unless he wants to risk everything to possibly make huge returns. I can continue about this much longer explaining all the fallacies, but rather I’ll just say that he should absolutely not be bailed out under any circumstances. If you wish to get the great returns you must bear the great risk that comes with it and that is what finance is about, so hearing his attempts to extort the taxpayers shows just how much of a desperate state he is now. Maybe just sell the medallions while they’ll still worth something or risk losing everything. That risk is something he is unwilling to bear, but that’s his problem. If he gets bailed out that will be crony capitalism at its finest.

Monday, April 13, 2015

The Daily Grind

I think this evidence (the article for the week) for Americans working longer hours is accurate: and theorize that the driving cause is twofold- culture, and basic economics.

Firstly culture. I like Davids' article on cultural motives at play here. In America, advertising has become incessant, blatant, and boring with its overt advances on the consumer in attempts to raise product appeal. Many ppl/families are buying into the ideal of having an expensive mortgage, high car payments, college debt, as well as many other forms of debt. The avg American spends many hours laboring simply to pay the bills one is pressured into believing are necessary. Working to have these 'things' is the ideal and it shows in the hours we work, but the vicious cycle of work following debt is continuous with such a lifestyle.
  1. The average American household with at least one credit card has nearly $15,950 in credit-card debt (in 2012), according to, and the average interest rate runs in the mid- to high teens at any given time.
  2. Avg student debt is a bit over $30k end of 2014
Not saying that debt/materialism is a sole factor, but it certainly seems to be a factor

Now for some basic economic theory.

Notice that even by general standards, German, Italian, and French tax burden is currently much higher than the US. These are some of the major countries studied in the article. I also referenced govt spending against GDP. Governments have so many sources of revenue from which they bleed an economy of profit that I like to look at the aggregate of spending by said govt.
 The bulk of taxation in many advanced countries with a large government is actually wasted economic profit and a stifling of opportunity.
Since the drain of the govt collective on overall economic profit is higher, as well as regulation of the variety and means to profit, the incentive to work would follow to be lower, as reported in the article. 

Lastly, I like how the author of the article includes an in depth look at ways to correct our social security program at at the end of the article(8,9,10,11). His suggested methods are realistic, and better than what we currently have. Though granted, with the massive problems our current system is facing, that is not difficult to do.

Sunday, April 12, 2015

Live to Work or Work to Live

I would say that Americans work more than Europeans because of economic and cultural reasons. I believe that Europeans place more value on enjoying their time than Americans, and that might be tied to the work ethic. The paper clearly shows that workers in the U.S. are more productive than in Europe. Maybe there are many in America that want to achieve the American Dream, while in Europe leisure might be the European alternative to maximize utility. I personally prefer the European way of work because who in their sane mind would want to work more? It’s possible that the U.S. tax structure creates more incentive to work longer hours than in Europe, while in Europe the higher taxation may mean there is less reason for an individual to work. Working long hours does not seem to make much sense to me because there are so many other things that can be done in life. When I hear people say they work like 6 days a week with 10 or 12 hours shifts, to me, those people seem crazy. Why would someone want that life? Yes, they make money, but money is not the most important thing in life. Maybe it’s greed or maybe even the workaholic work ethic (if that’s even a thing), but working long seems absolutely ridiculous. I don’t understand how someone would want to spend their entire life making their boss rich. If you have a business then working longer hours makes sense, but doing that for someone else just seems ridiculous unless that person has a very large household to support. There is someone that told me about how she worked very long hours in the Soviet Union and had like four hours of sleep because of that for many years. She did make significantly more money than nearly everyone else, but she today she talks about how it ruined her health and how it wasn’t really worth it. It took many years to realize that, and what really made the point across to her when Ukraine denied her of all pensions she worked many years for. Maybe it’s my European mentality (my family is from there), but working your entire life does not sound like something I would want to do because for me working is to live not living is to work.

Saturday, April 11, 2015

Why work so hard?

In fact, why work at all? The reality is that productivity is necessary for survival; if no one produced, no one would live. If we produce a little extra past what is necessary for survival, then we can save it and ensure we will always have something to live on. Working hard is just a means of saving more for the future. There is no scenario in which people become less productive and have a better capacity to provide for their futures. Working hard just makes good economic sense.

Tuesday, April 7, 2015

Who has a 'free' market?

   I find it revealing that the development of Chidamide in China, even with ''China’s cumbersome rules for drug approval'' was estimated to be 10 times cheaper than to develop in the US, according to Dr Lu. The article brought up this point on multiple occasions. If the US has major problems in regards to the expense of healthcare, perhaps multiple solutions could be evaluated by Congress, instead of recent developments?
   I find the research on cancer and biomedicine to be fascinating, and there are multiple recent trail blazing developments in the field in regards to curing cancer by 'highlighting' so the immune system can fight and easily subsume cancer cells.