Could someone please tell me exactly when following the constitution became optional? In the last week I have heard Senators openly call on the president to violate a citizen’s rights. Some prominent figures have demanded that the government act like following the Bill of Rights is optional and can be decided on a case by case basis. It is my humble opinion that every American citizen has certain unalienable rights that cannot be taken away without due process. I never thought that would be a controversial opinion to hold in the United States, but apparently it is now.
I think we have all been horrified by the Boston Marathon bombing. Made even worse by the high profile manhunt that resulted in shootout and dead police officers. Because of the heinous nature of the crimes and the high profile, Senators and media figures are calling to throw away the constitution when dealing with the American citizen that did these awful things. I’m going to type that again, because it is an important point. Dzhokhar Tsarnaev is an American citizen. And that (should!) guarantees him the right to due process – no matter how terrible his crimes.
Yet, we have yahoos lie Senator Lindsey Graham calling for him to have his citizenship revoked and treated lie an ‘Enemy combatant‘ so that there doesn’t have to be a trial. John McCain and others has called for not giving an American citizen his Miranda rights. For McCain, this is not the first time he has done so. Sean Hannity wants to torture an American citizen and do so without a trial. So much for the 4th, 5th, 6th, and 8th amendments in the Bill of Rights… (try to walk past the Ann Coulter Statement in that last link where she wants an American citizen arrested for what they wear – that absurdity is WAY beyond the scope of this post)
To be clear, I think that the Boston Marathon bombers are horrible people that deserve whatever they get. Thanks to the high profile of the case, I can be reasonably certain that Dzhokhar Tsarnaev is one of those bombers. I shouldn’t have to say this, but I have to, to keep people from accusing me of being a “terrorist lover” or “America hater”. I will not get emotionally upset if bad things happen to him. It is the next person, the less high profile case, that I’m concerned about.
Our rights don’t exist to protect guilty parties such as Tsarnaev, they exist to protect the innocent and falsely accused. If the government has the power to take away certain rights from the guilty – without trial – what prevents it from doing the same to the innocent and falsely accused? We cannot let the government say that since somebody is a horrible person they don’t deserve his constitutionally guaranteed rights. Why? because without a trial how do we know he is guilty? That is my concern and is the thing that everyone should be concerned about.
If the president has the power to declare a guilty person can declared an “enemy combatant” and swooped off to a secret prison to be tortured – all without a trial -, he also has the power to do it to an innocent person. If we give the president that power, that means we are only one sociopath getting elected president away from a dictatorship. If the president can declare ANYBODY an “enemy combatant” what is to stop him from doing that to his political enemies?
I am not an expert in liberty, constitutional law, or history, but these are very basic arguments. These are foundational principles of our country. These arguments can be grasped by any middle schooler in a basic government class. These are the things that concerned our founding fathers and lead them to create the Bill of Rights. It scares me that they aren’t grasped by prominent members of the media and long time U.S. Senators. An even scarier thought is the possibility that they do know them and are purposely ignoring them.
Dzhokhar Tsarnaev must have his full rights as a U.S. citizen(because he IS a U.S. citizen) protected because it is the only way to guarantee that the rest of us will have them. Any arguments about denying Tsarnaev his rights because he’s a bad person or a public danger is, at best, an extremely short-sighted view. At worst it is emotional manipulation by a future dictator.
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Are you kidding me? The TSA is now going to be allowing some small pocket knives on airplanes. Meanwhile I still can’t take a decent tube of toothpaste through(and lord help you if you caught with a sealed bottle of water or pop!). Coming from someone who has lost a 20oz bottle of pop, a full tube of toothpaste, was “detained” for a 3 inch philips-head screwdriver, and who won a random “full baggage search” in front of everyone, I feel much safer now. I might be stuck with overpriced soda from airport shops, off brand toothpaste, and limited hardware, but at least the guy sitting next to me on the airplane can stab me in the eye (with his 2 inch blade) when I tell him about all of America’s “freedoms”.
This also doesn’t mean any other security will be loosened. If you want to ride on a plane in this country, You’ll still have to decide between either someone taking naked pictures of you, or a full body pat down. (If you’re really lucky, you’ll be among the few who have to endure both!) If you’re among the 99% of americans who like to both ride an airplane and thinks their “right to privacy” extends to their body, there is some good, slightly less publicized news. There is a small pilot(pun intended) program for those to have “expedited” screenings by going through a voluntary “pre-screening”. Of course, the program is currently only for frequent flyers and other “preferred” airline customers. You’ll be contacted shortly if you are eligible. (Apparently when it comes to getting government permission to retain ones dignity at the airport, Jet-setting millionaires, corporate execs, and traveling sales people get to be in the front of the line)
One last piece of good news, the nude photo scanners might be going away. Well, not entirely. They’re staying, but being changed(those that can) to display a cartoon like drawing of the person’s body – golly I feel better already. Now all I have to do is endure the (likely) cancer causing radiation.
Despite being a liberty-minded person, I think could tolerate all of these things, or at the very least forgive those who impose it upon us, if I thought that it actually kept me and my family safer at the airport and on airplanes. But, I really don’t believe that. I think others have described it best when they call all of these procedures security theater. They aren’t designed to make us safer so much as make us FEEL safer.
The system is easy to game. One can’t have 12oz of shampoo because the shampoo might have been replaced with explosive liquid. Assuming for a moment that one needs 12oz of this liquid, all you’ve changed is that to pull of an operation you need 4 guys with a 3oz bottle instead of 1 guy with a 12oz bottle. We can have small knives as long as the handle isn’t grooved nor locked in place? No problem, I’ll just put my blade in one handle when I go through security, but put it in a different handle once I’m on the plane and want to use it. Those are just ways to get dangerous items on board without breaking TSA rules. There is a good chance that whatever you need will make it through TSA screening thanks to all of it’s mistakes.
All of these scanners and screenings seem like they are putting faith in technology instead of people. There might be an incentive for that considering that the last Homeland Security secretary had ties to the company that sell the naked scanners. Instead, TSA they may want to spend time concentrating on finding terrorists. I understand there is a pilot program to try out the “Israeli” method which is to (horror upon horrer) TALK to people. And if they act suspicious, then they go through additional security screening. Of course, this is being floated as additional security on top of the useless measures used now, and not a replacement of it(facepalm!).
Now I understand that in Israel if you don’t pass the first screening, things get hardcore fast. We don’t necessarily have to adopt the ENTIRE system, but talking to a guy and telling him your name, where you’re going, and who you’re traveling with seems less intrusive then losing my entire toiletres bad and getting a full body pat down. We’re pretty much already asked those questions by 2 or 3 different TSA agents at some point or another.
Even if the “talk to people” method wasn’t implemented. I’d still advocate for getting rid of most of these other measures. No sense in making everyone “feel” safer when they’re not. I don’t believe in a false sense of security.
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Brace yourselves, The effects of the so-called “Budget Sequestration” are about to hit. The two parties aren’t going to compromise so the automatic budget cuts are going to hit and hurt the economy. The media will probably ultimately blame the two political parties for not coming together to fix something that EVERYONE knows is going to be bad for the economy.
The actual economic damage is compounded by the other deficit-reduction measures that have already slowed growth, including a 2 percent payroll tax increase. All told, economists expect the sequestration plus last month’s fiscal-cliff deal to slow the pace of GDP growth by 1.5 percentage points. That’s no small change for an economy growing about 2 percent a year, particularly one that appears to have lost steam in the fourth quarter of 2012.
The reality is that they are equally at fault: Both sides accepted the across-the-board cuts if they couldn’t agree to more sensible ones.
I don’t blame the two parties for this mess. I blame bad economics. John T. Harvey has a good write-up of why this is going to be bad and why it’s all unnecessary in his article Suicide by Sequestration.
As suggested above, many others have already gone into detail on where cuts will hit and how bad it will be. But, the overwhelming majority of this has been written based on the assumption that we do, in fact, need to cut the debt and deficit, just not this way. I therefore want to do what I’ve done so many times before in this blog: explain why this is a false and terribly dangerous premise. ANY reductions in the deficit are a mistake, not just those forced by sequestration. Below, I attack a number of the fallacies on which these contrary opinions are based (many of these have appeared before in this column–I’ll keep repeating it until President Obama listens!):
For God’s sake, we have so many difficult problems facing us today. Why add to that by shooting ourselves in the foot–no, the head–by purposely reducing economic activity even more? To see how well this brilliant economic-recovery strategy works, just look at Greece, Spain, and the UK. Better yet, look at the US in fourth quarter of 2012. That negative growth, correlated as it was with a big drop in government spending, is a precursor of things to come.
I highly recommend reading the rest. John explains better than I could so I won’t repeat his points. Instead, I’ll try to answer his question of Why do we keep trying to do this to ourselves?.
The economists that our leaders listen to keep telling them that budget deficits are always bad. It’s always bad to have debt for a household or business, so in theory, it should be bad for a national government. It’s a very powerful and emotionally convincing theory backed up by the metaphor of a household or business budget. The people who keep pointing out that The Federal Budget is not Like Your Budget keep getting drowned out.
How powerful is this theory? It’s so powerful it drowns out common sense. Let’s take a different situation. Let’s say someone at the pet store tells you your fish tank should have no more than 3 snails for every 5 fish. But your fish tank has 4 snails and 5 fish. So you take away one snail. But you notice that a week later your fish starting looking sickly and the water gets dirty. You add back a snail and everything starts slowly recovering. When you tell this to the pet store owner, he assures you “no no, you gotta take that snail away. Your tank will get ‘too clean’. The 3 snails will eventually learn to clean more.”. So you go home and take the snail away again, but sure enough your tank gets dirty and the fish sickly. How many times would you keep trying to take a snail away before you conclude that the pet store owner doesn’t know what the hell he’s talking about? Well, if you’re a congressman, at least more than 5 years!
We have experienced nearly 5 years of a trillion plus dollar budget deficit. The entire time our economy has been slowly recovering. The only times it has faltered is when congress has another budget or debt ceiling fight to cut the budget. How long can this go one until more people start realizing that the economy is recovering and falters when we prematurely try to balance the budget? If we were scientists and observed this many countervailing examples of our theory, we’d throw it out in a heartbeat.
But, we don’t throw out the theory that “Budget Deficits are always bad”. Why? Because the metaphor of the federal budget being like a household budget is just too strong. We’ll just keep telling ourselves that we “cut the ‘wrong’ things”. Apparently, they’ll never conclude that it’s the cutting itself that is ‘wrong’.
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LiveScience has an article describing the source of funding for climate change denying think tanks. One source is the use of a special type of trust by gas\oil giants such as the Koch brothers. They send money to this special type of trust and get a tax break since it’s a “charity”. That “charity” then sends the money to think tanks that specialize in climate change denier propaganda. 500 million just from one person.
The website for Donors Trust provides some clues to their interests: “The current environment on university campuses values Diversitas over Veritas — but cultural diversity is a poor substitute for truth, which must be the prevailing aim of the university. And discovering truth is impossible without a commitment to freedom of inquiry and the broadest possible range of viewpoints — what we call intellectual pluralism.
“Typically, we provide top-notch professors with substantial seed capital, spread over three years. After these professors have demonstrated progress with their ‘centers,’ we assist them in identifying other funding sources — alumni, institutional or foundations — to sustain their efforts.”
I find this claim particularly rich because an often used argument of climate change deniers is that scientists are fudging data just so they can “get rich” off of government grants. For example see here,
perpetuated by those with political agendas and those who grow rich from government grants
Those who survive and thrive on government grants to investigate global warming are always going to tell us that the situation requires further analysis.
Global warming, which was mostly a scam invented by researchers looking for government grants
Well, with the revelations above, it appears that these groups might be projecting their own sins onto others.
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For several decades the U.S. dollar was on some type of gold or silver standard. Doing so anchored the dollar’s value to something of value. But why has it always been anchored to gold or some other precious metal? Is there any reason why it has to be gold or precious metals? It seems fairly arbitrary. Maybe it’s because it’s rare and valuable? In reality it though, the dollar – or any currency – could be tied to almost anything. It could be precious metals, agricultural goods, or even consumer goods. So why not set the value of the dollar to unskilled labor? I think you’ll find that we have all the advantages of price stability that gold provides, but also eliminate and reduce several other social problems.
Before describing how to implement a dollar that’s on a “Labor Standard”, let’s review how governments maintained a gold standard. First, they would have a reserve of gold. Then they would declare that every so many dollars could be exchanged for so many ounces of gold. For instance, 8 dollars for an ounce of gold. At that point, the government must then constantly buy and sell gold to maintain it’s value.
For instance, if the market determines that an ounce of gold is worth more than 8 dollars, people are going to trade in their dollars for gold. This will remove dollars from circulation and add gold to the market. As that happens, the supply of gold on the market will increase and thus it’s value will decrease. The opposite happens to the dollar. As dollars are traded in, less will be in circulation which means the remaining dollars are worth more. These two trends will continue until the 8 dollars for an ounce of gold is achieved.
If an ounce of gold is worth less than 8 dollars then the government must buy gold until it’s value is back to 8 dollars. As the government buys more gold it’s value goes up. At the same time, the market is flooded with dollars which makes the value of dollars go down. The government must continue to buy gold until the value of a dollar is back to 8 dollars for an ounce of gold.
The thing to take away is that to maintain the value of it’s currency in a gold standard, the government sets the price first. Then, once it’s price is set, it let’s the quantity of gold it buys and sells float according to the open market. It’s important to understand how this is different from most government spending. Most government spending first sets how much it’s going to buy (say number of cars for the FBI) it then let’s the market determine how much it’s going to pay(whatever the market price for a black SUV is).
Instead of anchoring the value of the dollar to the price of gold, Modern Monetary Theory(MMT) economists propose that we set the value of the dollar to the price of unskilled labor. For sake of argument, let’s say 8$ an hour for 1 hour of labor. Just like in a gold standard where the government makes a permanent market offer of 8$ for an ounce of gold, in a labor standard the government would make a permanent job offer of 8$ for one hour of work.
With the dollar set to the labor standard, the government would set how much it’s willing to pay any American citizen for an hour of work. The open market would then set how much labor would accept the job offer. If 3 million people are unemployed and are willing to work for 8$ an hour, then the government would hire 3 million people and find work for them to do. If the private economy improves, and offers people more money to work for private firms, the amount of workers hired will go down. If the economy declines, the number of people hired will go up as the private sector lays people off. Inflation and budgets are automatically controlled as people move between government 8$ pay and private sector pay.
Doing this would provide the same advantage that a gold standard has which provides long-term price stability. Deflation would always hit a floor, because as the labor market slacks, the government would pump money into the economy as it hires all the freshly laid off laborers. Inflation could only get out of control in one unlikely scenario: The private sector hires virtually all the labor on the market and still demands more. I call this scenario unlikely because it’s never been achieved in the united states with only the exception of World War II. Even in that case, it required the government to spend massive amounts of money by buying items at the market rate.
In addition to long-term price stability, a labor standard provides the added benefit of giving work to people who are unemployed. Another way that a labor standard is superior is that instead of unemployed people being idle, they can provide a benefit to society in whatever form the government desires such as in-class teacher assistants, librarian assistants, visiting the elderly and infirm, being part of a neighborhood watch, cleaning up streets, litter, and graffiti, etc.
Another thing that makes the labor standard superior to a gold standard is that labor cannot be stored. Unlike gold, for every hour that a worker isn’t working, value is lost that can never be regained. So why would we “fully employ” gold that always maintains intrinsic value, but let labor stay idle? If the private sector leaves labor idle, any value the public sector can get out of it can only benefit society overall.
Finally, the last thing that makes a labor standard superior is that it eliminates most unemployment and all the social ills that accompany unemployment. Any unemployed workers that the private sector doesn’t want, the government would hire if they are ready, willing, and able to work.
Of course, this diary is just using an alternate description of the Job Guarantee. For more information on how that works, please see my diary: Job Guarantee: Zero Unemployment Without Causing Inflation. (I encourage you to read it before attacking the program. Especially if you’re going to use the tired, “zOMG! Socialism!” attack) When talking about the Job Guarantee, most people get caught up in the social safety net aspect. However, for those who worry about inflation, currency devaluation, etc, I wanted to write this alternative way of thinking about the same thing. The dominant economic thought believes that inflation and unemployment must be balanced, but as I’ve tried to show here, Modern Monetary Theory shows that price stability can be achieved through full employment.
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Most every single miss fire by Microsoft has been of their own doing. Very little(if any) has to do with the largely unsuccessful anti-trust suit filed by the FTC in 1998. But Not according to Preston Gralla. In his article for computer world called, Will Google go the Way of Microsoft? Ask the FTC? he blames the anti-trust suit for much of Microsoft’s failures and warns that the same could happen to Google. As this is the perfect intersection of all my interests (technology, politics, and economics) I couldn’t let his ridiculous premise stand.
Gralla makes this claim in his article:
These suits, no matter the eventual legal outcome, could cripple Google’s ability to innovate and expand. To see why, you only need look back at what happened to Microsoft when the federal Department of Justice launched an antitrust suit against it in 1998. The core of the issue back then was similar to what Google faces now. The issue wasn’t whether Windows was a monopoly (it was); it was whether Microsoft used its monopoly power to harm its competitors and dominate new markets such as browsers.
Eventually, Microsoft wasn’t given much more than a slap on the wrist, but by the time that happened in 2004, the company had been embroiled in the suit for six years. During that period, it spent an immense amount of time and resources fighting the suit, and it wasn’t sure which newly contemplated business actions might be deemed illegal.
It’s no coincidence that during those lost years, while Microsoft was distracted, Google locked up the search market and Apple sewed up the digital music market with the iPod. During that time, Microsoft was also unable to capitalize on Windows Mobile, a smartphone platform it had developed years before Apple’s iOS. Before the suit, Microsoft practically owned the tech industry. Ever since, it’s been playing catch-up in every important growth area.
So the premise here is that the anti-trust lawsuit kept Microsoft from innovating between the years 1998 and 2004. For this premise to hold up, we would have to see evidence that Microsoft was standing still during those years, and, once released from their lawsuit hell, unleashed their innovation again starting in late 2004\early 2005. So how does the premise hold up on the time line? Not very well…
First of all, Microsoft did a LOT of things between 1998 and 2004. Their most successful foray into a new market started. They started and launched the xBox during this time. That turned out to be a major success for them and is now a staple of their profits.
Microsoft also made lots of strategic planning during these so-called “lost years”. They layed out their entire .NET framework strategy in 2000 – in the middle of their anti-trust lawsuit. They even managed to get beta release out that year. The .NET framework is now one of the most widely used programming platforms. Also, Microsoft dominated PC gaming with their DirectX gaming engine. They made good, credible updates to that before, during, and after the lawsuit.
Microsoft also tried lots of things with varying degrees of success during these so-called “lost years”. Windows Media Center for instance was their attempt to turn windowsXP machines into entertainment hubs. While it didn’t catch on it also wasn’t universally panned. Microsoft also had innovation failures like, Project Mira. Never heard of it? There’s a reason why, it was useless as designed.
If the reason Microsoft couldn’t innovate was FTC strangulation, then it must have been successful both before and after those “lost years”. But as we will see that just isn’t true. Even before the lawsuit Microsoft had big, public failures like Microsoft BOB.
Even after coming out of the lawsuit Microsoft has still had failure after failure. Project Origami was Microsoft trying to improve tablet PCs. It was a bloody disaster in the consumer market.
Now let’s look at the 3 things Mr Gralla blames the government for Microsoft not being at the top. First up, the ipod and digital music. Microsoft was caught empty handed. No one foresaw Apple’s giant success with digital music. But, could Microsoft have succeeded if it hadn’t been for the FTC? Well, evidence points to no. Microsoft got into the digital music market with the Zune, they poored millions of dollars into it. for 4 years they struggled. All of them long after they settled the lawsuit. They never made any headway or found a way to innovate on top of Apple’s success.
Now let’s look at phones. Was Microsoft crippled by the FTC? Hell no! They’re inability to break ground in the smart phone market was not for a lack of trying. They had an entire product line of Windows CE devices for things like smart phones going back to the mid nineties. They launched in 2003(again, middle of their “lost years” Windows Mobile. They released several version after that trying to get their O.S. onto cell phones. It never caught on and they abandoned it in 2010 and created “Windows Phone” that was an imitator of the iPhone.
Finally, let’s look at search. No doubt Google dominates the market. But they didn’t steal the entire market from Microsoft. When Google first came around, yahoo was the biggest search engine. Google and Microsoft did become the big competitors for a while, but Google just won. They did it better than Microsoft, and it was never for a lack of trying. Microsoft is still trying. Microsoft launched ANOTHER search engine(their third, by my count) called “Bing” in 2009. This is well after their supposed FTC induced innovation coma. That search engine has never taken more than 5% Marketshare. In fact it only went over 4% for a few brief months. If Microsoft lost the “search” wars because of their anti-trust lawsuit, they should’ve made a more credible attempt afterwards. They didn’t and haven’t.
Another argument is that the anti-monopoly lawsuit distracted Microsoft and lawyers sucked up resources that could have gone to innovation. If Microsoft’s legal bills were a problem, it was their own doing, not the government’s. Microsoft was ridiculously over zealous with protecting their trade marks and violated other company’s intellectual property.
Microsoft sued a company named “Lindows” because it sounded too much like “Windows”. (The company was trying to get Windows to run on Linux: hence – Lindows). Microsoft eventually paid the company millions of dollars to change their name. Microsoft also sued a 17 year old canadian named “Mike Rowe” for registering the domain name “MikeRoweSoft” for his business.
As if things like that weren’t enough for their legal department, the company spent a hell of a lot more time defending itself against private lawsuits brought by other companies. Note that that link is not an all-inclusive list of lawsuits.
So why did Microsoft lose their innovation? I would argue that it wasn’t the anti-monopoly lawsuit that slowly brought them down a few pegs, I would argue that it was the fact that they were a monopoly. They got lazy and spent more time trying to protect their monopoly than innovating. They let Firefox creep on on their Internet Explorer Market. Gmail took away their Webmail market. Linux became the cheaper alternative for netbooks and phones. I might be wrong on why they ultimately were dethroned, but I can safely say that it had nothing to do with the FTC.
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If you haven’t heard of the wacky antics in the Michigan 11th congressional district, you’re in for a sweet story. Our story starts just over a decade ago. It starts in 2001 with a little known Michigan state Representative named Thaddeus McCotter. It was just after the 2000 census which means it was time to draw new congressional districts. Thaddeus, who was involved with creating the districts, drew the 11th district to be a nice, safe district for any Republican Congressman. And, as luck would have it, he LIVED in this new district. He ran for congress and won in 2002. That was the end of our story for about 9 years.
In 2011, an older and wiser Thaddeus McCotter decided to run for President. If you didn’t know that, don’t feel bad. Neither did anybody else. He didn’t get into any of the debates and he dropped out of the race before a single vote was cast. He returned to his district. The 11th district had been trending slightly Democractic. Well, after the 2010 censuse, it was redrawn to be safe again forever for Thaddeus. The Democrats put up a token candidate that most knew didn’t stand a chance. All that Thaddeus McCotter had to do was just coast to another uneventful victory. Then, something strange happened…
There was something strange about the nominating ballots for McCotter’s campaign. You see, in Michigan, to get your name on the ballot, one must put up a small fee and collect several thousand signatures from supporters to prove your “seriousness” as a candidate. Normally, this is an easy, and routine procedure for a campaign. For whatever reason, McCotter’s staff went the even EASIER route of photocopying last election’s ballots and changing the dates. As misfortune would have it, this is quite illegal and is taken very serious by Michigan’s Attorney General.
At first McCotter denied everything and blamed a partisan witch hunt. But when you’re a republican congressman being investigated by a Republican Attorney General, that’s a hard argument to make(I guess one could say the Attorney General was trying to make a name for himself). After the scandal kept growing and his campaign staff started getting arrested, McCotter not only announced that he wouldn’t run for re-election, but he immediately resigned from congress.
In some ways, the timing of McCotter’s resignation was a giant F.U. to both Michigan and the Republican party. By the time he retired, it was too late to change the voting ballots for the August primary elections. This meant two things. One, Michigan couldn’t add a “special” election to the August primary election. So there had to be a costly stand-alone special primary election to fill his seat. This was his giant F.U. to the state of Michigan. More on this “special” election in another post.
The timing of his announcement he wouldn’t run for re-election was a giant F.U. to Republicans too. Since he waited until a couple days after the deadline to get on the primary ballot, it meant that no new Republican could easily jump into the primary. This left only those who had already filed with the intent of challenging McCotter. The only person crazy enough to do this was a completely unknown novice, with limited tea party backing, named Kerry Bentivolio.
The Republican establishment freaked. They started worrying about their “safe” district. Fortunately, for the establishment, they still had time to run a write-in candidate. They picked Nancy Cassis who was a little more seasoned and had establishment backing. Unfortunately, for the establishment, this created a bit of a backlash and Bentivolio easily won the primary.
Meanwhile, our bumbling establishment democrats decided not to get involved and stuck with the original token candidate so they wouldn’t risk the same backlash in a still long shot election. Bentivolio’s democratic opponent wasn’t necessarily that bad. It’s just that Taj had the same inexperience and unknown problem as Bentivolio. So the 11th district came down to a fight between two completely unknown and inexperienced candidates. In the end, the safe republican map carried Bentivolio to victory. Despite some of the crazier allegations that came out against Bentivolio(more on those in another post, as well). And that’s how a reindeer farmer gets to congress.
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Since the end of the presidential election last week, I’ve been seeing a lot of tweets and blog posts that will say something like “takers outvoted the makers”(see here, here, and here for examples). I find the “makers and takers” narrative fascinating. I’ve found few other narratives that so quickly and easily divides Americans and get us to hate each other. I wanted to take a closer look at the supposed logic behind it.
“Makers and Takers” is a right-wing meme. The basic story is thus: The economy is make up of people who make stuff and people who take stuff. The takers take from the makers – usually using the power of government. The story comes from Ayn Rand’s Atlas Shrugged. But she called them producers and looters.
Unfortunately, as often as conservatives will refer to “takers” as the problem, they rarely define or identify who these nasty people we’re supposed to hate are. Mostly, it seems to be based entirely on whether or not you pay federal income tax(payroll and other federal taxes don’t count). That is the impression I get from Mitt Romney, Paul Ryan, and other random conservatives. The conservative commentator, Mary Matalin, helps clarify a little more. Old people and veterans don’t count, only people who use any anti-poverty program.
So, let’s look at two different people. Let’s take a single parent with two children. The parent works 2 jobs. 28 hours a week at Walmart, and another job at Home Depot working another 28 hours(give or take since schedules in retail shops tend to fluctuate). At each job this person works hard and therefore earns above minimum wage… about $8.50. Neither job pays benefits. This translates to just under $2,000 a month(before payroll taxes and state income taxes). That makes him qualified for a small amount of food stamps and for their kids to get Medicaid. In right-wing language, this 56 hours a week worker is a “taker” and a “moocher” and a “looter”.
Let’s take another person. Say, a former presidential candidate who made 14 million dollars last year by doing nothing. He pays about a 15% tax rate in income taxes. He didn’t do anything except give his money to a banker. But since he paid income taxes, In right-wing language, that makes him a “maker” and a “producer”.
In this scenario, I question the right-wing framing of maker and taker. Who is truly the maker, and who is the taker? Are the minimum wage (or just above minimum wage) workers really taking? Is that work of packing your groceries and loading the shelves that meaningless? Is the work of giving someone else your money so important that it is the equivalent of MAKING something?
I would be tempted to reverse it and call the rich guy the “takers” and the workers (who are actually WORKING) the “makers”. But I find this whole narrative odious and would rather see it die than co-opted. We’re all in this together and we all have something to contribute to society. If we think individuals are taking advantage of the system let’s deal with that. Let’s not deal with it by demonizing the most vulnerable people in our society.
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This Chapter introduces the Keynesian concept of “effective demand”. He does so in the most confusing way possible. I’ll try to simplify as much as I can.
In section I, all Keynes does in this section is define “effective demand”. Here’s the theory from Keynes’s own words.
The amount of employment… depends on the amount of the proceeds which the entrepreneurs expect to receive from the corresponding output. For Entrepreneurs will endeavor to fix the amount of employment at the level which they expect to maximize the excess of the proceeds over the factor cost.
In other words, Employers will guess what the most profitable level of employment will be, and that is how many people will be hired. If entrepreneurs don’t believe hiring more people will be profitable, they won’t hire them. The point where the cost of employment meets the expected increase in revenue is the point of “effective demand”.
Keynes contrasts this with the classical theory(The belief that supply creates it’s own demand). For that belief to be true, any increase in the number of employed people must mean that the cost of hiring will always be less than or equal to the expected profits . If that were the case, then entrepreneur’s would constantly be hiring people until there was no one left and employment really would be determined by the Marginal Disutility of Labor.
Obviously, Keynes doesn’t believe the above paragraph is true. He will lay out his explanation and theory of why in Chapter 3, section II.
Hopefully, my non-math and non-statistical explanation of his definition of “effective demand” will help you understand Keynes’s math heavy explanation in Section I.
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Did you know that 355,000 people were laid-off last week because Obama was re-elected? Or, at least, that’s what many Conservative activists would have you believe. Apparently, there is this growing meme going around the internet that companies are laying people off because Obama and “Obamacare” is here to stay. This is all likely to be typical partisan bull-crap. I never thought I’d have to explain the inner-workings of the Free Enterprise System to the party that claims to love capitalism. But… here we go. We’ll start with basic concepts and then move on to “the math”. By the end of this post, you’ll know why this meme is likely to be crap, the numbers backing up that assertion, and when (and how) we’ll have the numbers to prove it.
First of all, this is a huge country with a huge economy. Large numbers of people are being hired and fired, laid-off and brought back every single day. Additionally, large numbers of business are being started and bankrupted, growing and shrinking, every single day. The beauty of free enterprise is that nothing ever stands still. Things are moving and changing all the time which causes other things to move and change and so on. This is the reason it is so hard to study macro-economies. There are so many micro-economic things going on you can never be 100 percent certain of which event caused another event.
The best anyone can do to understand how an event affects the economy is to gather economic numbers(like jobs and sales data) and compare trends to certain events. Unfortunately, even for the professionals, that is not an easy task. Nor, can many things be definitively proven. That’s because, as any scientist will tell you, “CORRELATION DOES NOT IMPLY CAUSATION“!. That phrase should be tattooed on the wrists of every economist so they have to stare at that phrase while typing up papers and reports that make that very claim.
In the beginning of the post I claimed 355,000 people lost their jobs last week because of the election. That of course was a half-truth. In an economy as big as ours we have 100s of thousands of people losing their jobs every. single. week. Even in a healthy and growing economy. The fact is, we have even more people being hired every week to offset that. But, the right-wing aren’t using employment numbers to make their current claim(we won’t actually know those numbers until Thursday).
The right-wing is pointing to companies that are announcing massive lay-offs as proof, PROOF! that Obama and “Obamacare” are killing jobs. So let’s look at those numbers. Fortunately, the department of labor keeps statistics on how many companies have a “mass layoff event”. Their definition of a mass layoff event is when at least 50 initial claims are filed against an establishment during a consecutive 5-week period. Fortunately, they have the entire archive of their past data posted online.
As it turns out, there are a lot of mass layoff events every month. For the last year there are usually over 1,000 mass layoff events every month (not seasonally adjusted). I add that “not seasonally adjusted” because mass layoff events tend to fluctuate depending on the time of year. For instance, post Christmas time will have a lot of lay offs as stores get rid of their extra holiday help. Therefore, instead of comparing month-to-month numbers, it is sometime better to compare this months number to this month of last year. That is what we’re going to do.
November 2011 had 1393 mass layoff events. Last I looked at a calendar there were 30 days in November. So that means, on average, there would be at least 46 mass layoffs every single calendar day during a Normal November. This is assuming mass layoffs happen on weekends as well. If we assume mass layoff events only happen during the week the average would be even higher. But since I want to give the right-wing the best chance to prove their crazy theories, I’ll stick with the lower number.
Let’s compare that number to right-wing doomsday claims. If there are mass layoffs we should be seeing an increase over the average rate of 46 a day. We should be seeing 50, 60, or 70 a day to register an increase in layoffs. If there was a massive movement I would expect to see double of the average(like happened in 2008 when the Bush economy was spiraling downwards).
Exhibit A: The article I linked to earlier has a scary-sounding tweet that claimed that “45 companies announce layoffs in last 48 hours[after Obama’s re-election”. In a 48 hour period, we should see an average of 94 mass layoff events. That means their scary claim would be less than HALF the pace of mass layoffs during a typical November. If their claim is true, that would be a low number and something to be celebrated.
Exhibit B: The Blaze, home of Right-Wing Glenn Beck, has a B.S. article listing 37 layoffs and “closure” announcements in a 48 hour period. Even smaller than the claim in exhibit A. Additionally, they cheat by listing EVERY layoff announcements, even ones that are less than 50(my 46 number counts only those over 50). They are still very VERY far short of an increase, let alone a doubling.
Exhibit C: These right-wing bloggers have now setup a website to try and document supposed mass layoffs. Here are their numbers since the Wednesday after Obama was elected(combining layoffs and store\plant closures): Wedenseday was 25, Thursday was 23, Friday 17, Saturday 25, Sunday 1. I don’t know if this site cheats like the Blaze and lists layoffs that are less than 50 – I’ll let somebody else click and read each announcement.
As you can see these listing are far short of even reaching the typical November rate and therefore offer absolutely ZERO proof of mass “revenge” or “Obamacare” layoffs. I suspect that not all mass layoff events are reported. I’m guessing the real number is higher than these articles report, but they are also likely at a typical November rate.
Unfortunately, the mass layoff event data isn’t printed quickly. It takes time for the department of labor to compile the statistics and interview companies about their layoffs. For instance, September’s numbers weren’t reported until October 23rd. Which means we won’t get November’s number until around December 23rd. (November 23rds report will be of October, before Obama’s reelection).
When the report does come up, I recommend looking at seasonally adjusted numbers, to see how much different the number is from October. The seasonally-adjusted numbers averages out seasonal affects. As long as that number is near October’s it will mean there was no mass “revenge” or “Obamacare” layoffs. Additionally, you can check the raw numbers and compare them to the previous November numbers. Unless that number is twice it was last year, it’ll mean no mass layoffs happened above and beyond normal economic activity.
My educated guess is that these layoffs would’ve happened anyways. For those claiming they are laying off because of Obama, I think some business people are making political claims to serve a personal agenda.
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