Wednesday, November 30, 2011

Wait, Huh?

Most right wingers I know these days are frothing at the mouth about Europe. It makes sense if you stop and think about it for a moment as it flies on the face of the basic foundation of their "enlightened self interest" ideology. Countries banding together and creating a single currency? Sheesh...might as well start stocking up on the canned goods. If only the markets were allowed to work on their own and government would stay well out of the way, they foam.

Yet, a closer examination of the current woes in Europe reveal a far more complex situation. What a shock. First of all, there's this.

World stock markets, glimpsing hope that Europe might finally be shocked into stronger action, staged a big rally. The Dow Jones industrial average in New York rose almost 300 points. In France, stocks rose 5 percent, the most in a month.

Wait, STRONGER action? I thought markets only responded favorably when governments were laisez faire and shit. So what sort of "stronger action" are we talking about?

One proposal gaining prominence would have countries cede some control over their budgets to a central European authority. In a measure of how rapidly the peril has grown, that idea would have been unthinkable even three months ago.

Allowing a central European authority to have some control over the budgets of sovereign nations would create a fiscal union in Europe in addition to the monetary union of the 17 countries that share the euro currency.

HOLY SHEE-IT!! A central European authority? JAY-SUS H. JOHNSON!!! Time to add a fuck load of guns and ammo to the bunker. There is no doubt in my mind that we're going to start hearing an uptick in paranoid shrieking from this side of the pond about the "Amero."

And I'm still wondering why the free market wants stronger government action.

The problem in Europe has always been that they have a monetary union but not a fiscal one. Certainly, this monetary union has added strength to the idea that economic cooperation prevents military confrontation-something the continent sadly knows all too well. But having a monetary union isn't enough. A fiscal union (as we have here between our states) is also important. If you're going to have one, you have to have the other and that's been the mistake all along.

Now, it's no problem to debate whether it's in their best interests to even have both. On the one had, the EU's combined GDP is greater than ours. On the other, however, decades old squabbles and ancient tax policies seemingly make working together impossible. And there are a myriad of issues in between that warrant serious thought.

Where I draw the line, however, is the paranoia about control. Honestly, it's not even warranted. If there's one thing that this entire crisis has proved, ineptitude, not totalitarianism, is usually what prevails these days when it comes to interstate unification. I mean, we're still working out the kinks on ours out, right?

Tuesday, November 29, 2011

Hermanizer, Hermanizer, You're a Hermanizer

Political campaigns often adopt popular songs as their anthems. Earlier this year Michele Bachmann played "American Girl" at rallies until Tom Petty got his panties in a bunch. Petty also went after George W. Bush for playing "I Won't Back Down." Bush backed down and stopped playing the song.

In 2008 John McCain angered John Mellencamp, Van Halen and Jackson Browne for playing their songs at rallies, in part because the McCain campaign wasn't paying ASCAP fees to the artists.

Not long ago Jimmy Fallon raised a ruckus for playing the song "Lyin' Ass Bitch" when Michele Bachmann appeared on his show. NBC forced Fallon to apologize, but if you look at Michele Bachmann's long, long record of outrageously incorrect statements of fact, it's obvious that Fallon's choice was dead on.

Herman Cain got into the act by playing the song "I Am America" at his rallies. Cain, however, got permission from the singer, Krista Branch. The song is as jingoistic as you'd expect from the title, but also has some very creepy lines: "I've got some news; we're taking names, We're waiting now for the judgment day."

Cain, who loved to call himself the Hermanator before he became enamored with Black Walnut and being the flavor of the month, is now "reassessing" his campaign, according to an article in the National Review.

Why? A woman named Ginger White says that she carried on a thirteen-year affair with Cain, that he paid for her to fly to cities around the country, lent her money, and called her frequently for years. As proof of the affair she showed reporters her phone bills, which showed that he called and texted her frequently. She even gave reporters Cain's number, and Cain himself called them back.

Cain says he's just friends with White, but -- and Cain has admitted this -- how many men give money to other women without telling their wives about it? Unless they're having an affair? At this point, it seems more and more likely that Herman Cain really has done all the things the things the half-dozen woman have claimed he has. Since White claims that Cain bought her many plane tickets to cities coinciding with his appearances, a thorough investigation of his credit card and travel records will reveal the truth in short order.

So, I think it would be fitting for Herman Cain to adopt a new theme song to play at his appearances for the remaining few days of his campaign. One would be tempted to just take Britney Spears' "Womanizer" and use it as is.

But that's not the Hermanator way. The Black Walnut should hire Weird Al Yankovic to write a parody of "Womanizer" called "Hermanizer," and adopt Hermanizer as his new nickname. Don't deny it. Revel in it!

But really, this is just the last nail in the coffin for Cain. Over the last few weeks we've seen how truly weak a presidential candidate he was. And it had nothing to do with his womanizing, and everything to do with him not having a clue on Libya, or the president of Ooz-becky-becky (Uzbekistan, you nitwit!), or what health care options are best for the country, or his pizza-priced tax plan.

Cain was never a serious presidential contender. It was all about his ego, getting his name out there, and selling his book. Just like Trump, and Palin, and Bachmann, it was only ever all about self-promotion. These four "candidates" have absolutely no intention of ever actually becoming president. They were just running to cash in.

Monday, November 28, 2011

Paying for Not Playing

Illinois coach Ron Zook was fired Sunday after winning the first six games of the season and then losing the next six games. The last game was an embarrassing loss to Minnesota. The price of his failure? A whopping $2.6 million. Paid to him!
Zook was 34-51 in seven seasons with the Illini. He will be paid $2.6 million in a buyout, according to his contract.
This wasn't the first time Zook was fired for poor performance, only to walk away with a boatload of money. In 2004 the University of Florida fired Zook after only two years. He was paid $450,000 for each remaining year on the contract. That's almost 10 times the average American's salary, for having done a terrible coaching job.

Zook is not the only coach to get a contract like this. Jerry Kill recently signed a contract with the University of Minnesota for $1.1 million a year, with a $600,000 payout for each "unfulfilled season" (that's doublespeak for getting canned). In late October, when the contract was signed, the U of M had so far won only a single game under his leadership. The Gophers are currently 3-9 overall. One of Kill's three wins came Sunday over Zook's Illini, the game that was the last straw for Zook.

These are public taxpayer-financed institutions paying inflated wages for dismal failure. Supporters argue that the coaches deserve outrageously high pay because the football programs are such moneymakers. But most programs don't actually make a profit, though they do bring in TV money and alumni donations are often driven by football.

Paying football coaches high salaries might be a reasonable argument if salaries were based on success. But coaches like Kill will still get millions of dollars if they're fired after one season. Kill's contract guarantees that he will make between $4.2 and $7.7 million over the next seven years.

Salaries are supposed to provide an incentive for performance. Coaches like Zook have shown that money simply doesn't work as an incentive. Yet universities continue to pay these outrageous salaries because wealthy alumni in the good old boys club demand these men be hired at these exorbitant rates.

This myth of entitlement pervades American society at the highest levels. When men like these reach the lofty pinnacle of head football coach or CEO of a corporation, they and their adulators think they deserve to paid handsomely regardless of how poorly they actually do their jobs. They get golden parachutes and non-fulfillment clauses that guarantee they'll never have to work another day in their life. So how can money be any kind of motivating factor for them?

The average Division I-A football coach earns more than a million dollars a year, when you include bonuses, benefits, housing allowances and the lavish perks. By comparison the president of the United States makes $400,000 annually.

College football coaches should be paid $150-200K a year, which would be in line with the highest paid university professors. But a million bucks a year for a football coach at a public university is ridiculous. A million bucks a year for a losing football coach is obscene.

What's truly disgusting is that the players these men coach are amateurs who are prohibited from receiving any kind of monetary compensation. Yes, some of the players will go on to play professional football and make millions. But the majority will never make a nickel off the game after four years in the college football meatgrinder. Ten percent of college football players will suffer brain injuries, while thousands every year suffer serious knee, back, neck and head injuries that will hamper them the rest of their lives.

Sunday, November 27, 2011

Saturday, November 26, 2011

Saturday Potpourri

Here's a piece by Ruth Marcus from right before the election last year that I never got around to linking. This line made me laugh out loud.

The difference between the British conservative leaders and the ones we're stuck with in the United States is the difference between rational conservatism and magic-wand conservatism.

And then there were these...

[British] Conservatives call for shared sacrifice, starting in a place Republicans seem never to look -- at the top. "It's fair that those with broader shoulders should bear a greater load," Cameron said.

[British] Conservatives do not embrace the Tea Party vision of government as malevolent force. "I don't believe in laissez-faire," Cameron said. "Government has a role not just to fire up ambition, but to help give it flight."

Remember, it was our government that developed the internet which led to massive amounts of innovation in the private sector (sorry, Ms. Rand, but your predictions of apocalypse were wrong).


When studies like this come out, I always have to we didn't know any of this stuff anyway!!

The surprise here is the sexual exclusivity issue in men. As a man with a very high IQ who is liberal (but not atheist), I can say that I desire only one mate. The idea of multiple partners was fun when I was younger but as I have aged, the romantic inside of me has firmly taken hold and pretty much vanquished the Hef side of me. Ah well....


Apparently, I still have far too much work to do...groan.... Who are these people's parents and what the hell did they do with them for 18+ years?

Friday, November 25, 2011

My First Christmas Present

Today is Black Friday and thousands of Americans have descended (and likely still are) on department stores and shops around the country. Someone out there got me an early gift and I feel like there is some justice in the world. Actually, it was several someones. Remember the law firm of Steven J. Baum and Associates?

Say buh-bye!!

Apparently all the recent press hasn't been good for his business and now they are through. Normally, I wouldn't do an end zone celebration dance for people going out of business but this whole company deserved exactly what they got, especially Mr. Baum. Have they learned their lesson? Based on the letter Mr. Baum sent to Joe Nocera, the New York Times columnist who published the photos of the company Halloween party in which people dressed up like the people they robo-foreclosed, it appears they have not.

Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices. Mr. Nocera — You have destroyed everything and everyone related to Steven J. Baum PC. It took 40 years to build this firm and three weeks to tear down.

So, it's Nocera's fault that Baum was a duplicitous foreclosure mill and had the Halloween Party? I love Joe's reply.

I think that’s what they call shooting the messenger.

I hope this whole affair will make some people in the financial sector think twice about how they do business. This is what happens when you go to far.

Thursday, November 24, 2011

Today, I Am Thankful For...

...the rest of America starting to wake up...

...the support that the Occupy movement is giving to local businesses...

...Elizabeth Warren, current running for Senate against Scott Brown in Massachusetts.

....and our nation's 26th president for stating something so eloquently that is sadly still true today.

Mr. President, you and I are on the exact same page, sir!

Wednesday, November 23, 2011

Reality Meets Fantasy

This Thanksgiving, Jerry Danford doesn't have a lot to be thankful for and it's due to Alabama's new immigration policy.

“People are not informed about what it takes to do these special crops. Now a lot of people aren’t interested. The lawmakers that passed this law, they didn't come out here and interview people. If they had done their homework, they would have realized,” he says.

Spoken like a true socialist who wants to the skirt the law and not have to deal with the consequences. Except....

Danford is a lifelong Republican. He admits he did once vote for a Democrat for governor. But in every other race, at every level, he’s always been for the GOP. When I ask if he’s ever voted a Democrat into the White House he scoffs, making a face that says “you have to be kidding.” He voted for Alabama’s current governor, Robert Bentley, a Republican. But he now says he regrets that decision.

“It was an honest mistake,” Danford says, “but, you know, I feel bad over it.”

Danford, like many folks in business in Alabama, are now seeing what happens when lawmakers don't think about immigration and simply act with dogmatic impunity: it hurts the economy. Of course, Republican lawmakers in the state say it will actually help the state's unemployment record. So far, it's having the opposite effect.

“The people that you could get locally, they wouldn't -- regardless of what you offered them, within reason -- they wouldn't put in the long hours. It'd take probably three (of them) to do what two of the immigrant workers do,” he says.“They'd want to be on break all the time, going to the bathroom, going to get a drink, or, you know, something. They just don't have the initiative to work, just plain and simple,” Danford says.

That's a pretty sad statement considering I thought that folks from this part of the country, being the fine and upstanding conservatives that they are, knew how to pull themselves up by their bootstraps and get to work. Ah, these must be the small portion of stinkin' liberals who leech off the government. So what does Danford want?

“I would like for these lawmakers to go out and get me a pool of labor,” he says.

Millions of dollars are on the line, not just for the farmers but for everyone in the supply chain. When Danford planted watermelons last year, he estimates he paid a trucking company close to $10 million to transport them. A new forecast from the University of Alabama estimates the law will cost the state economy at least $40 million in lost revenue overall.

This whole debacle is a great example of how reality has smacked fantasy in the face hard with a shovel. The people who take a hard line position on this have to realize that thumping your chest and screaming, "It's illegal so fuck 'em" solves absolutely nothing. We have to look at this from the point of view that human capital means a better economy. Danford needs a pool of labor which means we need to embrace the people that are already here, legalize their status and make it easier for talent at all levels to immigrate to this country.

In other words, have some fucking common sense. I used to think that money would trump theology at all times on the right. Now, with the party moving more to the right, it's simply not the case. Meanwhile, our sole superpower status continues to erode...keep it up, folks. Your dreams of "less" government may soon come true!

Tuesday, November 22, 2011

Nothing Is Fine By Me

Many folks our there are deriding Congress for failing to act on the deficit. Yet by not acting, here's what happens

Sure, there would be painful cuts in both social programs and defense spending. But the Bush tax cuts would expire as well. In other words, we'd do what we have to do to reduce the deficit and, ultimately, the debt. Maybe a "Do-Nothing" Congress is just what we need!

Why We Have Elections

Yesterday, the poorly name "Super Committee" failed to reach a deal to cut spending and raise revenue before the self imposed deadline. This is not a shock to most folks and it's certainly not to me.

What does perplex me is that the main sticking point was the taxes on the wealthy. This was the GOP's line in the sand and it amazes me that they are sticking to their guns. According to the latest poll, 67 percent of Americans believe that taxes should be raised wealthy Americans AND on businesses. Add this in with the numbers from the same poll that show that 77 percent of respondents disapprove of the way Republicans handle their job.

This tells me that the election next year isn't going to be kind to Republicans at all. If they had made some compromises and not played the shell game with taxes, they would have likely held strong in the House, taken the Senate, and made the election painfully close with the president very possibly losing to likely nominee Mitt Romney. As it stands now, however, they have abandoned the independents (see: the ones who actually decided elections) and I think they are going to lose seats in the House (although still hold on to it), the Democrats will hold onto the Senate (possibly gaining a seat or two) and the president looks to be the likely winner.

Of course, we are still a little less than a year out and a lot could change between now and then but one thing I know that won't change is conservative intransigence. They are not going to back down and all the polling shows that's a terrible idea. This Congress has the lowest approval ratings in the history of Congress (between 9 and 13 percent). You thought the 111th Congress was bad? The 112th has now been called the worst ever.

This is why we have elections. The Tea Party brought a bunch of hard right folks into office and the American people can plainly see how they govern. They don't. Many of these folks have said they don't care if they lose next year's election and are in office for only one term. They just want to do the "right" thing.

Well, they aren't. And they will.

Monday, November 21, 2011

Film is Dead, or Why the Cloud is Evil

Movies are doomed. At least, movies on 35mm film are doomed. According to a report from IHS Screen Digest Cinema Intelligence Service (via Scientific American):

A report from the IHS Screen Digest Cinema Intelligence Service said that 35 mm film, which has been the dominant projection format in movie theaters for more than 120 years, is nearing the end of its life, as the majority of cinema screens in the U.S. are expected to go digital in 2012. 
In fact, IHS expects 35 mm will be replaced by digital technology globally by 2015, the report said. By the end of 2012, 35 mm film in movie theaters is expected to decline to 37 percent on a global scale, which is a dramatic decline from 68 percent of global cinema screens in 2010.
A lot of people don't think this is a big deal. But I'm not so sanguine about losing these analog formats. Old technology, such as books, newspapers, sheet music, piano rolls, photographs, slides, 35mm movies, phonograph records, and even AM radio broadcasts are extremely simple to read and interpret. With a little bit of observation and ingenuity, anyone can simply look at them, run some experiments and figure out how to view or listen to them. But our new technology is not quite so simple.

Back in the 1950s 8mm cameras became cheap and popular, and anyone could afford to make home movies. This tiny, soundless movies were far cry from the glory of 35mm films with stereo sound, but they were the first step toward ubiquitous audiovisual entertainment industry. In the 60s Super 8 was developed, adding a magnetic strip to 8mm film. In the 1970s two competing home video recorder standards were introduced, Betamax and VHS. Ultimately VHS won out. LaserDiscs were introduced in the late 70s, and film aficionados loved them. But when DVDs were introduced they died off. As high definition TV was being developed DVDs just didn't have enough capacity, so two competing formats were (again) developed, and eventually Blu-Ray won out.

A similar thing occurred with phonograph records. Originally wax cylinders were used, but 10" 78 rpm records soon became the standard. They were two-sided and could hold several minutes of music. As technology improved, the size and rotation rate were reduced and 45 rpm records were introduced, and then 12" 33 rpm albums came out that could hold a dozen songs. The introduction of stereo culminated in what some people still think the ultimate in audio perfection: the vinyl stereo record. As LPs reached their pinnacle audio cassettes were introduced (and later, 8-track tapes which were used almost exclusively in cars), but tapes were never able to reach the same high level of quality that records achieved. After briefly flirting with quad, vinyl LPs gave way to CDs in the early 80s, though in some quarters LPs are still preferred. Now MP3 audio files are replacing CDs.

Proponents view this constant progression of ever-obsolescent formats as the natural advance of technology. Skeptics consider it a marketing ploy to get you to buy the same thing over and over. You only ever need to buy one copy of Philip K. Dick's book, Do Androids Dream of Electric Sheep?. But you could buy Bladerunner, the movie based on the book, on VHS. Then you could buy it on LaserDisc. Then you could buy the Criterion collection edition on LaserDisc. Then you could buy the director's cut on LaserDisc. Then you could buy the theatrical release on DVD. Then the director's cut again on DVD, with an alternate ending. Then you could buy the whole sequence again on Blu-Ray.

The same thing happened with records. You could buy an album on vinyl, then on cassette, then on 8 track, then on CD, then as an MP3 download, and then again as part of a subscription to an online music service.

And I'm certain to have missed dozens of formats that shone briefly, only to be found decades later in people's basements, causing them to wonder what possessed them to waste so much money on something that so obviously had no future.

In parallel with audio and video technology, computers were becoming more sophisticated, and now they've been recruited to replace all other forms of media: records, film, video, books, and newspapers.

When I was a kid in junior high people used teletypes and yellow paper tape punched with holes to store data. When I was in college we used punched cards to write programs in FORTRAN for big mainframes, or used CRT terminals to dial in to those mainframes. Personal computers started appearing in the late 70s. With computers like the TRS-80 programs were stored on cassette tape. Then 8" floppies came into vogue, to be quickly supplanted by 5.25" floppies with the Apple ][ and the IBM PC, then the 3.5" floppy with the Macintosh.

In the early 80s personal computers started getting hard disks, first 5MB, then 10MB, then 20MB. At the same time the CD started to supplant vinyl records, and later CDs were used to store computer data. A profusion of different types of double-sided, high-density floppies, Bernoulli boxes, and myriad digital tape formats came and went.

To save disk space, many operating systems began to compress data in files. Compressed data is essentially encrypted, and the more sophisticated the compression algorithm, the more difficult it is to read.

Like most people, I wound up getting a new computer every few years. With each upgrade I would copy important data from the floppies and hard disks on to the new computer. I would keep the old disks around for a decade, but then, when I no longer had a computer that could read the format, I'd ultimately toss them all out. The 8" floppies went in the 90s in the first big media purge. The 5.25" floppies went in the early 2000s. The 3.5" floppies got tossed a couple of years ago.

In the 2000s computers started having DVDs, and fortunately the drives that read them can still read CD and CDROM formats from 20 and 30 years ago. Now Blu-Ray discs are becoming common.

Digital cameras and cellphone cameras started supplanting film cameras ten years ago, and now most people store pictures on their hard disks in JPEG format, which is a compressed "lossy" format. Because the pictures are so big and people take so many, most people never back them up or print them out. Most families' picture albums will therefore be lost the next time their hard disk crashes.

The once ubiquitous book is disappearing. Millions of people now read books solely on e-readers, tablets and cellphones.

And now even the upstart CD format is becoming obsolete. People aren't buying CDs anymore, they get MP3 downloads and put them on MP3 players or phones, or they're subscribing to music services and don't actually own their own music.

The latest thing that Apple and Amazon and other companies are pushing is "The Cloud." The idea is that you don't even have your own data: they keep it all on their servers. This supposedly solves the disk crash problem because your family picture album and home videos will be in the cloud. But what are the odds Apple and Amazon will still be in business in 40 years? Forty years ago the big names in computers were IBM, Univac, Control Data, Burroughs and DEC. IBM is no longer in the computer business, having sold its line of PCs to the Chinese company Lenovo several years ago, and all those other companies are long gone. So what are the odds your grandkids will be able to find pictures of their grandparents, the way my mom could find sepia-toned images of her nineteenth-century ancestors?

And instead of having billions of books and photos and videos and records in every house in every country, we'll have only a few hundreds of single points of failure, all run by companies that will probably not last for more than a few decades. If even they don't go under, how long are people going to pay subscription fees to house ancient data that they never look at on server farms in the cloud? Despite what YouTube and PhotoBucket might have you think, they can't store that stuff for free forever.

Now consider how much power it will take to keep those hard disks spinning at these mammoth server farms day and night for decades, on the off chance that you'll want to look at the video of the kids horsing around in the pool. Already it's estimated that the Internet consumes 1% of all electricity generated in the world. Archiving infrequently used data on spinning hard disks is a ridiculously outrageous waste of energy. At some point it will simply become unsustainable.

The point of this litany is: formats are fleeting, but information should be forever. That was true with paper books, newspapers, vinyl records and 35mm film, as long as you took care of them. Those media can literally last for centuries, perhaps even thousands of years if properly preserved.

Floppies and computer tape are notoriously fragile. Tape starts to stick to itself after decades of sitting on the shelf. Magnetic domains on tape and floppies start to wander. Mylar becomes brittle with age and trying to read these media can destroy them. That's if you can find a compatible tape drive or floppy disk drive, which would be doubtful in five years and impossible in 50 or 500. Someone finding an old floppy could easily erase it by exposing it to electric and magnetic fields during their analysis.

The e-books on the Kindle and Nook are stored in non-volatile ("flash") memory, which stores data as puddles of electrons in floating gate transistors. These electrons will simply leak out after a few years. By comparison, there are still copies of the Gutenberg Bible that are more than 500 years old, and hand-written scrolls that have survived for millennia.

Newspapers have documented world history in tremendous detail for the last three centuries. But papers are being slowly strangled by the Internet. The problem is, the web is a notoriously poor historical record: websites come and go by the minute, and data in computer files is completely mutable. Finding an article in a century-year-old newspaper at the library might be time consuming, but finding a day-old web page can be impossible: it may simply no longer exist anywhere.

CDROMs, DVDs and Blu-Ray discs may last longer than magnetic media, perhaps several decades, but they are compressed or  intentionally encrypted to prevent theft. Since they're optical, future generations will find them easier to read than magnetic media just by examining them with powerful microscopes, as long as they don't degrade too much.

But future archaeologists may still be hard pressed to read what few surviving discs and tapes they might find in few hundred years. If they can cobble together the hardware to read this stuff, they'll still have to figure out the compression and the encryption.

But the problem isn't just future historians not being able to decipher our long-lost culture. If we store our data in the cloud, it doesn't belong to us anymore. It belongs to some big company. If they go out of business, or they get shut down by their networking provider in a lawsuit over networking tariffs, or their data center gets hit by a hurricane, or hackers infect it with viruses, we stand to lose everything. (And no, I don't think 40-year-old backups will be readable.)

Because our systems are so complex and interconnected they will not fail gracefully. The United States would be very vulnerable to persistent power failures. These could be brought on by underinvestment in power grid infrastructure, or failure to develop alternative sources of energy before fossil fuels run out, or outages caused by increasingly severe weather accompanying climate change, or intentional sabotage by foreign powers, or an EMP pulse detonated in the atmosphere above the central US. American businesses that depend on the cloud for day-to-day operations would all fail, and they would fail hard.

Worse, nearly all the technology we depend on for accessing this data is built in Asia, much of it in China. If for some reason the supply is disrupted it would have dire consequences. Already we're getting a taste of this: all disk drive manufacturers locate their factories in Thailand, which is now being inundated by a huge flood. The supply of disk drives will be severely affected, which affects American computer manufacturers and everyone who buys computers. A particularly ominous fact: the American military now depends on computers and components produced by companies owned by the Chinese Red Army.

I'm no Luddite. I like high-def TV, listen to MP3s on my phone, watch DVDs, and read e-books and stream movies on my tablet. But these technologies are extremely fragile. This is the information age, but all this information is so fleeting. A tremendous amount of technological infrastructure is needed to retrieve the data. If any part of the very long supply chain is broken, our capability to access our information is destroyed.

If we persist in storing our information in ever tinier and more fragile containers, and we persist in destroying the easily readable hard copies such as books, photos and newspapers, then even the slightest disruption in our highly technological society could bring everything crashing down. And since we would have no way of getting at any of the information without that technology, getting back up again may well be impossible.

It is thought that the greatest collection of knowledge in the ancient world was lost when Christians burned the Royal Library at Alexandria and presaged the dark ages. If we're not careful, we may suffer the same fate by placing all our knowledge in objects that we will one day be incapable of getting it out of.

Sunday, November 20, 2011

The New Church

Today is Sunday and many conservatives around the country will be making their way to church to worship Jesus Christ. But Christianity isn't the only religion that many of these folks practice.

At first glance, this new religion seems completely at odds with our savior. It is a system of morality "not based on faith" or emotion, "but on reason." In fact, the leader of this new religion has stated on many occasions that Christianity (and all religions in general) are parasitic weaknesses. "Man's highest moral purpose is the achievement of his own happiness," the leader of this new church has said.

What is this new religion? It's the Cult of Ayn Rand. And this recent story illustrates just how far her catechisms have permeated our government.

When I told my wife that my post about her reading of Atlas Shrugged had received 71 comments, she chuckled. "Made some people uncomfortable, eh?" We've had a few conversations about the book over the last week since she has completed reading it and both of us are still completely befuddled that the over the top characters in the book are equated with reality. "People just aren't that stupid as Rand portrays them in the book," my wife commented yesterday. "They're just so unbelievable I can't understand why anyone would fall for it." If your entire ideology is based around anger, hate, and fear, well...

What I can't understand is how one can claim to be a Christian on one hand and a Randian on the other. The two are honestly mutually exclusive. Rand talks of enlightened self interest and Jesus directs us to be as selfless as possible. Somehow, the conservative brain has melded these basic principles together to mean that the government is forcing us to do things, taking away our liberties and destroying capitalism. It makes no sense to me whatsoever.

The one thing that does make sense, however, is the shared belief between Randians and those folks who believe in Republican Jesus that the world is constantly ending (see: Mike Lofgren's Apocalyptic Cult).

I feel that it is terrible that you see destruction all around you, and that you are moving toward disaster until and unless all those welfare state conceptions have been reversed and rejected.

That's Rand in 1959. 50+ years later and...we're still here. In fact, we've accomplished quite a bit over the last 52 years and have remained the leading innovator in the world despite Rand's cries of a boiling pit of sewage coming "soon." Yet guys like Paul Ryan, a prominent GOP leader and current fave of the Tea Party, insist upon perpetuating the lie that innovators (as in the book) are on strike. It's not just him.

"Every time you submit to a regulation, it diminishes your liberty," says Republican Rep. Steve King of Iowa, speaking just off the House floor a few weeks ago. King says he loves Rand.

"If you start to demonize a certain segment of your society that are the producers, eventually they'll stop," says Allen West, a Tea Party favorite.

Freshman Rep. Mick Mulvaney, a South Carolina Republican, has read Rand's novels six or eight times each."It's almost frightening how accurate a prediction of the future the book was," Mulvaney says.

Accurate? Really? I guess Mark Zuckerberg, Steve Chen, Chad Hurley, Jawed Karim, Bill Gates, Sergey Brin, Larry Page and Steve Jobs (just to name a few) didn't get that memo on the demonization and the apocalypse.

It truly is a bizarre world they live in and when folks like King and Mulvaney proclaim to also be Christian, I have to wonder if they were kicked in the head a few times as youths.Or, perhaps they skipped over the parts in the Bible where Jesus said things.

Actually, I wonder sometimes if I've been kicked in the head as soon as recently in comments when I'm told that it's simply "less" government they want (but can't really seem to define what that means specifically), not "no" government but then embrace this view from Rand, who said, in a question about taxes, "That's right. I am opposed to all forms of control. I am for an absolute, laissez-faire, free, unregulated economy."

So which is it?

In looking at all of this, there's much more delusion going on and it's much deeper than I originally thought. Leading members of the GOP think that our country is constantly being destroyed and that the last 50 years of astronomical innovation never happened. They also think that one can be a Christian and also be a Randian. And, as always, if you don't believe any of this, then you are a Marxist.

As Gandhi said, "The enemy is fear. We think it is hate; but, it is fear."

Saturday, November 19, 2011

Let Them Eat Cake

I wonder if these three ass hats have ever studied 18th century French History.

Saturday Potpourri

Starting today, I'm going to use Saturdays to clear out my "Ideas For Posts" links folder. I have so many and, sadly, most get thrown out or forgotten. Rather than write an entire post around each one (very time consuming), I'm going to highlight a point or two from each link and then hope that readers here at Markadelphia will take it upon themselves to read the rest of the post off site.

First up is a look at how the Bush Tax Cuts have affected our economy using quite a bit of data. The conclusion?

This is economic madness. It is policy divorced from empirical evidence. It is insanity because the policies are illusory and delusional. The evidence is in, and it shows beyond a shadow of a reasonable doubt that the 2001 and 2003 tax cuts failed to achieve the promised goals.

How much more evidence do we need that we made terrible and costly mistakes in 2001 and 2003?

Well, the answer sadly is that there is no amount of evidence to convince them because they don't live in reality.

Speaking of that bizarro reality, here's a piece from a while back on patriotism.

How did Americans arrive at the obscene point where people routinely say, “If you don’t agree with me you aren’t a real Christian” or a “real American,” or a “genuine patriot”? By what measure of chutzpah did the Republican right challenge the patriotism of those who disagreed with their Iraq policy during the Bush years? That’s not American democracy. Rather it smacks of Europe’s bellicose totalitarian regimes of the past century.

The Tea Party and its supporters need a history lesson because this is how it starts.

How did waterboarding return to national attention? Apparently, GOP contender Michele Bachmann is a staunch supporter of it but, of course, would not want to undergo the process herself calling it "uncomfortable" but not torture.


Friday, November 18, 2011

81 year old Dorli Rainey after being pepper sprayed by police at Occupy Seattle.

I wonder who she raped and what drugs she did?

So Much for States Rights

Republicans claim to be in favor of local control and states rights, but you wouldn't realize it from their ham-handed efforts to use the federal government to prevent states from controlling their own destinies.

Wednesday the House of Representatives passed the "National Right-to-Carry Reciprocity Act," a bill that would force all states to recognize the concealed gun permits that other states issue. This law is controversial because some states allow just about anyone to carry guns, including former felons.

Republicans are also behind efforts to override state laws that prevent out-of-state insurance companies from offering insurance to citizens in states where the company has no real presence (and hence no real ability to provide the services the customer is paying for).

Republicans in the Bush administration were also responsible for the No Child Left Behind law, which was perhaps one of the most intrusive federal mandates into local control of education since federally mandated busing to end school segregation.

They've also been trying for years to pass a constitutional amendment to outlaw gay marriage, forcing federal control over state marriage laws.

Republicans want to force state reciprocity for concealed weapons, but forbid it for openly gay marriages.

Allowing any clown to carry a loaded gun on their person anywhere they go is simply a dumb idea. Remember Plaxico Burress, the football player who shot himself in the thigh when the Glock tucked in the waistband of his sweatpants started sliding down his leg?

If this bill becomes law there won't be a plague of deaths across the land. And neither will those concealed weapons stop any significant number of crimes. But it's just unwise. Even Tombstone, Arizona in Wyatt Earp's day had stricter gun laws than they do today. If this law passes, some number of Americans, maybe 20, 50 or 100 per year, will be shot or killed because some nitwit brought a gun into a place where he shouldn't have. It's just a needless waste of blood and money and time.

The most galling thing about this is how Republicans so shamelessly forget their states rights mantra every time it comes to them forcing what they want on the rest of the country. To be sure, Democrats have variously backed local control for some things and federal mandates for others. But they've never claimed to have a rigidly simplistic and pure ideological stance proclaiming states rights are so completely inalienable that guys like Rick Perry think Texas should be able to secede from the Union if their tender sensibilities are offended.

Democrats have always contended that issues can be complicated, and some things are handled better locally while others are handled nationally. And they also acknowledge that, as technology and society change, the balance changes, things get more complicated or simplified and the way we do things may need to change.

The simple fact is, different people in different places and different situations need different things. A rancher in snake-infested Arizona near the Mexican border has very good reasons to carry a loaded weapon. A football player going into a New York City club -- most likely ferried door-to-door via limo from his posh lodgings -- has no business carrying a gun into a place filled with drunks.

Untrained amateurs carrying loaded weapons in crowded places are a demonstrably greater danger to themselves and the innocent people around them than they are a deterrent to any would-be assailants. Hand guns fired in haste are notoriously inaccurate, and bystanders are very likely to be hit instead of the target. Anyone gunning for Plaxico in that club would shoot him first, in the back, from cover, and then disappear into the crowd very possibly without anyone even seeing them in the mass confusion. Liberal concealed carry laws make the assassin's job that much easier.

People should be able to have guns to hunt, for target shooting, for collections, and to protect their homes (though, honestly, you're much more likely to have it stolen, shoot a family member or commit suicide with it than deter an intruder). If you live in the middle of nowhere it's no big deal carrying a gun in your glove compartment to fend off the coyotes dogging your sheep. But cities like Washington, New York and Chicago should be able to regulate gun usage as they see fit, within reason, just as Cochise County should be able to.

Forcing New York to abide by Cochise County's gun laws makes as much sense as forcing Cochise County to abide by New York's parking laws.

Under this law, would a church or women's shelter have no right to prevent an abusive spouse from out of state from entering their building with a loaded weapon?

Why stop at gun laws? Why not make all states recognize lawyers who've passed the bar in other states? If I live in Texas  If prostitution is legal in Nevada, why can't Nevada prostitutes ply their trade in Omaha? If California decriminalized marijuana use, Californians should be able to smoke weed on the steps of the Mormon Tabernacle in Salt Lake City, right?

One of the basic institutions of our legal system is that everyone is treated the same. With this law would that be the case? Could someone from Texas go into a bar with a gun, while someone from New York could be arrested the instant they set foot in the very same joint?

When someone comes into your home, they have to play by your rules. Isn't that the conservative way? Why should people with guns have more rights than the rest of us?

Thursday, November 17, 2011

Temporarily Inconvenienced Millionaires

Yesterday, the Patriotic Millionaires, a growing group of wealthy individuals who are demanding that Congress raise their taxes, went to Congress and pestered the offices of Senators John Kyl, R-AZ, and Pat Toomey, R-Pa., Reps. Nancy Pelosi, D-Calif., minority leader, Xavier Becerra, D-Calif., and Jim Clyburn, D-S.C., assistant democratic leader.

They were led by entrepreneur and former AOL exec Charlie Fink who apparently didn't get the memo that innovators and the wealthy are under attack by vicious government regulators and idiotic moochers all bent on taking the fruits of their hard earned labor with the butt of a gun. Shit, man, didn't this Fink guy see what happened to Steve Jobs and Apple? The US federal government destroyed him.

Fink, who lives in Washington, D.C., said if the Bush tax cuts do not expire, the country "is digging itself a big hole by foregoing revenue." "Without revenue, we will never solve the problem by giving tax cuts to the wealthy while supporting two foreign wars," he said.

Patriotic Millionaire Robert Johnson, former chief economist of the U.S Senate banking committee, said that the current economic system is not broken, but it is "working on behalf of those who designed it in their favor."

"America is no longer based on markets and capitalism, instead our economy is designed as 'socialism for the rich' – it is designed to ensure that the wealthiest people take all of the gains, while regular Americans cover any losses," he said at a press conference this afternoon in Washington, D.C.

"It's a Las Vegas economy where regular Americans put their money on the table and the richest 1 percent own the house," he said. "And if the 1 percent happen to lose money, the 99 percent bails them out – covers their losses and then stands by watching while the house does it all over again."

Amen, brother.

Of course, the response to these simple facts usually consists of any or all of four of the following. First, the wealthy pay more than half of the total taxes. Second, their portion or responsibility of total revenue has doubled over the last 30 years. Third, half of Americans pay no taxes. Fourth, the wealthy pay a higher ratio of taxes paid to income earned than any other country.

All of their points are true but, as is usually the case, they leave out information and don't tell the whole story. A recent article in The Christian Science Monitor explains all of this in a very balanced way. Here are four graphics that take a serious and critical look at the whole picture.

In looking at all of this information, it's obvious that the various cheerleaders for the wealthy (or at least only some of them now that Buffet and the PMs are out lobbying to have their taxes raised) are not being honest. No one is denying that the half of the story they are telling is true. It's the other half that brings out the technicolor and shows us that we have some very serious problems with the way our country is being run by both public and private leaders. As Mr. Johnson said above, it's "socialism for the rich" and no longer capitalism. But why is it this way? How can people (and I'm speaking specifically of a few my regular commenters here in addition to the 40 percent of this country who votes GOP) who aren't wealthy continue to support Bizarro Capitalism? Sadly, the answer is simple.

Because they view themselves as temporarily inconvenienced millionaires.

Wednesday, November 16, 2011

No Shit


We had a few elections last week that produced some interesting results.

First up was Ohio's rejection of Proposition 2 which would have limited collective bargaining rights. 61% of the voters rejected it so that's more than a simple majority.

In Mississippi, over 55 percent of voters rejected that a fertilized egg is a person in voting against the so called "Personhood" amendment.

And in Arizona, Russell Pearce, the man who wrote SB 1070, became the first ever Arizona legislator to be recalled by a vote of 53 to 45 percent.

Now, I've been told by several of my readers that elections send clear messages. What do these three elections mean?

Tuesday, November 15, 2011

A Bankrupt Bankruptcy System

Mitt Romney talks a lot about being a "job creator," but he's destroyed a lot of jobs in his career as a private equity capitalist. A recent article in the New York Times details his adventures with Dade International, a Florida medical company.

Bain Capital bought Dade International  in 1994 with mostly borrowed money. They then bought two competitors, including a German company, and laid off more than 1700 American employees.

After mucking around with Dade for five years, closing plants, relocating workers to other plants and then closing those, eliminating the pension plan, and so on, Bain decided to cash out:
Bain settled on a common tactic in private equity: In April 1999, it pushed Dade to borrow hundreds of millions of dollars to buy half of Bain’s shares in the company — and half of those of its investment partners. 
Bain pocketed the $242 million. Goldman received $121 million. Top Dade executives got $55 million, records show. The total payout to shareholders reached $420 million — nearly as much as the purchase price for Dade.
Romney and Bain essentially milked Dade for hundreds of millions of dollars, saddling Dade with billions in debt. Then interest rates rose, the euro's value slid, and Dade got into trouble.
Creditors, unsettled by deteriorating finances and high debts, began to pounce. More layoffs followed. And in August of 2002, Dade filed for bankruptcy protection.
The creditors threatened litigation against Bain and its investment partners, accusing them of “professional negligence” and “unjust enrichment,” according to bankruptcy documents. 
Bain and the other investors argued that the claims were baseless, but agreed to forgo about $68 million owed to them by Dade. And seven years after buying the company, Bain forfeited its remaining ownership stake. 
Dade emerged from bankruptcy two months later and the stock soon began trading publicly.
Over the next four years, its revenues and share price surged, and in 2007, Siemens, the German conglomerate, paid $7 billion to buy Dade Behring. The Dade name disappeared, but the company survived.
Romney and Bain drove Dade into bankruptcy. They essentially stole money from Dade's creditors, laundering it through Dade and the bankruptcy court. (Romney had already ditched Bain to work on the Olympic Games when Dade went belly up, but he profited handsomely from the deal.)

In 2005 the Republican Congress passed a new bankruptcy law making it much harder for consumers to declare bankruptcy. This was supposed to reduce interest rates because creditors would have fewer losses. That didn't pan out, but credit card company profits have soared. More money is flowing to fewer people.

On the one hand wealthy people like Romney and Bain are able to use the bankruptcy system to make big scores by forcing acquired companies to fail. On the other hand, when regular folks got into trouble, giant credit card companies snapped their fingers and George Bush and the Republican Congress did their bidding to make it harder for the little people to get out of financial hardship.

When corporations go bankrupt there are really no consequences for the guys who are at fault. The entire purpose of a corporation is to remove any kind of personal liability for their actions. Unless they commit actual crimes, they don't have to pay for their mistakes. None of their personal property is at risk, and all the cash they ripped off -- excuse me, their lavish salaries and profits from stock sold before the company nosedived -- is untouchable. If they use borrowed money, like Romney and Bain did with Dade, there are almost no financial consequences for them. But the people who loaned them the money, for example, pension funds or 401K funds, lose everything.

When regular folks go bankrupt they are completely hosed. They lose their house, car, life savings, child's college funds, stereo, TV. Everything that can be sold off for cash is lost. And one of the most common causes of bankruptcy is medical costs, which means these people are often sick and can't work, so it's impossible to get back on their feet and get medical insurance again.

In the worst case, takeover artists who've bankrupted a company like Dade themselves have to declare bankruptcy. But then they can incorporate under a new name, buy up another company, force production into foreign countries, trash the American subsidiary, then milk the company for all it's worth and bail, leaving another few thousand Americans out of work.

This double standard of rich vs. poor in the bankruptcy system is yet another example of class warfare being waged on the poor and middle class.

Monday, November 14, 2011

They Really Said That?

If we re-elect Barack Obama, Iran will get a nuclear weapon. If we elect Mitt Romney, Iran will not.---------GOP Contender Mitt Romney.

The ‘Great Society’ has not worked and it’s put us into the modern welfare state. If you look at China, they don’t have food stamps. If you look at China, they’re in a very different situation. They save for their own retirement security…They don’t have the modern welfare state and China’s growing. And so what I would do is look at the programs that LBJ gave us with the Great Society and they’d be gone.-------GOP Contender Michele Bachmann

Regarding the first quote, I'm please to see that Mitt is not resorting to fear mongering.

Regarding the second quote, I...well...there's nothing else I could add to it really, right?

Sunday, November 13, 2011


Once in a while, I'll read something that humbles me to the point of bowing my head in shame. The recent piece in the Washington Post by Thomas Day, an Iraq War veteran, Penn State Graduate and product of the Second Mile Foundation (the organization started by accused child molester Jerry Sandusky) has done that at a level I didn't think possible.

His voice perfectly summarizes the last decade in this country and how all of us that are older have failed him. Sure, he points the finger at a few very specific people but it's really the elders as a whole that have destroyed his faith. Even though I don't know Thomas Day, as an educator of the next generation, I'm still responsible. His words are damning, as well they should be, and we must heed them.

Saturday, November 12, 2011

Why Can't More Americans Be Like These Folks?

All of the debate about the role of government would be null and void if more Americans were like this guy. And these folks.

Truly amazing stories and great examples of how the little guy does actually have some power if they dedicate some time and patience to this stuff. But this brings up a larger issue.

Certainly, the right wing media industrial complex would applaud these individuals for assuming responsibility for themselves and their circumstances and getting the job done. I'm wondering why they aren't that way with the Occupy Wall Street Movement? Up to this point, the right has largely painted the OWS folks as socialist hippies who want the government to run everything. Yet, this movement has essentially been saying the same thing as the Tea Party and, like Patrick Rodgers, Wayne Nyerges, and Maureen Collier have taken it upon themselves to work outside of the government and stick it to the banks.

In the past month, 650,000 people have transferred their money from the big banks that the OWS movement are protesting to smaller banks and credit unions. Part of this is due to the new fees that banks have been adding but the other part is due to the OWS movement. Early estimates indicate that the banks have taken a couple of billion dollar hit from this change. This isn't a large amount when you consider all their transactions but it's not chump change either.

So, I'm wondering...what's the problem? Pastor Ed and Doctor Sean were absolutely apoplectic about the OWS movement calling for people to transfer their money. "Our economy will collapse!!!" they both screamed at me last weekend at the gum. I don't get it. The government wasn't forcing anyone to do anything. This is simply a movement of people exercising free will and participating in a free market choice.

Why Can't More Americans Be Like These Folks?

Friday, November 11, 2011

Thursday, November 10, 2011

So Long, Joe

Yesteday Penn State fired Joe Paterno. Last night Penn State students rioted. They damaged public and private property and assaulted police.

The most common sentiment was that Joe "didn't do anything." On the contrary: he participated in a coverup of the rape of a child. This conspiracy of silence allowed the perpetrator to escape detection and go on to assault other children.

I can understand why some nobody, like the assistant who actually found Sandusky in flagrante delicto with the kid in the shower, would report the incident to higher-ups and let them deal with the police. But Paterno was Sandusky's boss and the symbol of the football program. He was the one with the moral authority -- he always claimed morality and ethics were an integral part of his program -- to make sure that Penn State football wasn't sullied by the actions of one scumbag. But he just kicked the report up the chain and buttoned his lip.

Joe Paterno doesn't deny any of the facts. He helped a felon escape justice. By his own moral and ethical compass, he knew he had to go. That's why he announced he would retire after this season. But the board knew that wasn't good enough and made Joe play by his own rules.

Had this incident occurred at some no-name Division III track program there would be absolutely no question that the parties involved would be fired, and that everyone would agree it was the right decision. But because this is football and Joe Paterno is the figurehead of an iconic institution, a lot of angry students think he should get a pass.

What the angry mob doesn't understand is that their idolizing of Parterno and Penn State football caused this. Putting people and institutions on pedestals fills them with hubris and lets them think that they are above the law. They come to think of themselves and their program as more important than the rights of individuals, and if some little people are hurt to preserve the image of the leader and the program it's justified because the leader and the program are so moral and ethical. Which, when you think of it that way, makes it seem even more corrupt and self-serving than it already does.

If you still think Paterno was wronged, try replacing "Joe Paterno" with "archbishop" and "Penn State" with "Catholic Church." I mean, some people do claim Penn State football as their religion but this is carrying a little too far.

Wednesday, November 09, 2011

Let Them Eat Cake

I've been talking for quite awhile on here about the one percent of this country and how they really seem to be tone deaf when it comes to the other 99 percent. Worse are the folks who scream about socialist revolutions and yet shit all over the people (the president, many Democrats in Congress) trying to prevent such an uprising.

But I never thought that the wealthy of this country would stoop to a level as low as this. Take a look at these photos.

These images are from a Halloween Party last year at the law firm of Steven J. Baum in New York. Party goers dressed up like people who have had their homes foreclosed amid a "tent city" that was set up in the office for people to go flap to flap and trick or treat. Baum represents banks and mortgage servicers in their foreclosure proceedings. It is the largest firm in New York and represents Citigroup, JPMorgan Chase, Bank of America and Wells Fargo.

At first, I simply couldn't believe that people would be this heartless. Then I realized that this these modern day Marie Antoinettes are really that fucking awful. And clueless. Who the fuck do they think caused all of this to begin with? THEIR clients. If anything, they should be dressing up as bankers and financial sector "whizes" who busted our country out like the mafia.

I guess the capacity to blame the victim is infinite.

Tuesday, November 08, 2011

Open Season on the Poor

Every time anyone talks about raising taxes on the rich, people like Rush Limbaugh and Ann Coulter start screaming "class warfare" at the top of their lungs. The thing is, the rich have been waging class warfare on the poor for years. Here's the latest example of the trend, which has the distinct possibility of blowing up like the housing bubble.

A recent story in the LA Times reports on a chain of used car dealerships called "Buy Here Pay Here." They specialize in selling junker cars to poor people at exorbitant interest rates. Until recently, responsible investors wouldn't touch these outfits with a ten-foot pole: a quarter of the loans go into default. But in May the private equity firm Altamount Capital Partners in Palo Alto bought the J. D. Byrider chain of used car dealerships for $50 million.

Private equity firms in California used to invest in computer companies, bio-tech firms, Internet startups and other high-tech ventures that would create completely new industries and more jobs. But they've moved on to greener pastures. From the LA Times article:
The dealerships make an average profit of 38% on each sale, according to the National Alliance of Buy Here Pay Here Dealers. That's more than double the profit margin of conventional retail car chains like AutoNation Inc. 
"The amount of return from these loans you can't get on Wall Street. You can't get it anywhere," said Michael Diaz, national sales manager for Small Dealers Assistance Inc. in Atlanta, which buys loans originated by Buy Here Pay Here dealers. "It's the gift that keeps giving."
Although they're backed mainly by installment contracts signed by people who can't even qualify for a credit card, most of these bonds have been rated investment grade. Many have received the highest rating: AAA.

That's because rating firms believe that with tens of thousands of loans lumped together, the securities are safe even if some of the loans prove worthless.
Where have we heard this scam before?
Buy Here Pay Here is also being boosted by one of the sophisticated financial strategies that drove the nation's recent housing boom and bust: securitization. Loans on decade-old clunkers are being bundled into securities, just as subprime mortgages were a few years ago. In the last two years, investors have bought more than $15 billion in subprime auto securities.
So, just like at the beginning of the housing bubble, we have big banks and investors figuring out a new way to take money away from people who don't have any and then passing the bad loans on to someone else. But this scam is even worse, because the interest rates on these loans can be just about anything. For example, one Buy Here Pay Here dealership charges 14.9% interest.

Now, that's a really high interest rate. You can generally get home mortgages -- if you can qualify -- for 2.5 to 4%. For comparison, if you get a certificate of deposit from a bank a typical return is currently 1% for one-year CD to 2.5% for a five-year CD. But Buy Here Pay Car Lots doesn't shrink from the fact that they're screwing you. They brag about it:
So, are interest rates high at buy here pay here car lots? Well, what do you call high? We charge 14.9%. That’s more than you’ll pay on your mortgage–if you can still get one. It’s very likely what you’ll pay on a credit card balance–with one huge difference. The card issuer would love to see you stretch out payments forever. Any buy here pay here dealer that I know wants you to pay off in a couple of years at most. What’s that mean? Well, compare the following two loans. 
 $5,000 credit card balance at 14.9% over 10 years. 
Payment = $80.36 a month, but total interest paid over the life of the loan is $4,643.39. 
$5,000 car loan at 14.9% over 2 years. 
Payment = $242.20 a month, but total interest paid over the life of the loan is $812.70.
Seriously. Who is really milking the consumer here, you[r] local car dealer, or Citibank?
Of course they can't stretch the loan out over 10 years. The junkers they sell don't last 10 years, so they have to pry the money out of your hands right now or they'll wind up repoing a useless heap when it breaks down and you stop repaying them.

What these Buy Here Pay Here companies don't tell you is that if your credit rating is good enough to get the right kind of credit card, you can pay off your balance in two years or one year, or six months, or one month, with no penalty and even no interest. But they neglect to mention that their car loan contracts usually have prepayment penalties.

Their rationale for charging high interest rates is essentially: "The big banks are screwing you, so we're going to screw you too. We're just screwing you faster: instead of a long, leisurely weekend dalliance, we give you quickie in the backseat of your car."

You can just see how this will play out when this house of cards collapses and some big bank goes bust when these "AAA" securities fail. Limbaugh and Coulter will blame those worthless scumbags and leeches for taking out loans that they can't pay, and the rest of us have to suffer for it. But the real leeches are the loan sharks making loans to poor people that they fully expect will default on the loan?

In the olden days the local used car dealer or loan shark profited from your misery. Now that these BHPH dealerships are being bought up as by venture capitalists and their loans are being repackaged as Wall Street investment instruments, Citibank or some other giant out-of-state investment firm is getting your money. That raises another issue: out-of-state banks don't have to abide by state interest rate limits.

Many states used to have limits on interest rates (in Minnesota's case it was 12%). Marquette National Bank of Minneapolis sued First National of Omaha when FNO started offering cards in Minnesota at a higher interest rate. In 1978 the Supreme Court decided against Marquette, preventing states from imposing interest rate limits on national banks. Which is why so many banks moved their credit card operations to North Dakota, and interest rates have often been as high as 18 and 21%.

What about states' rights? Local control? Christians should be outraged by this: usury is condemned by the Bible as immoral. The First Council of Nicaea and subsequent ecumenical councils forbade usury and charging interest greater than 1% per month. If we want our state to abide by Christian precepts dating back to the founding of the Church, the big bad federal government steps in and stops us.

This is just one more example where more and more money is flowing into fewer and fewer hands, most notably the hands of Wall Street bankers. The people who can least afford it wind up paying more for everything: from cashing their paychecks, to buying groceries, to car loans, to furniture, the poor wind up paying more money for less value in every instance. They can't even put their money into a bank because of the fees.

This is why the poor can't pull themselves up by their bootstraps. The ways rich or middle-class people save money are unavailable to the poor. As the old saw goes, it takes money to make money. How much money can you save if your life consists of working three part-time minimum wage jobs 60 hours a week for $25K a year, driving a BHPH-financed junker that keeps breaking down, living in an overpriced and underheated roach-infested apartment, getting your kids' beds and the living room couch and the TV from the RentaCenter down the street for three times their actual value, buying the kids Fruit Loops at the the local convenience store for twice what the Publix in the suburbs charges, having to pay a couple hundred bucks out of pocket (because you've got no health insurance) every time your kids start puking their guts out or screaming bloody murder because of an ear infection?

If the poor were getting hammered by just one of these problems they might be able to find a way out. But every way they turn they're getting nickeled and dimed to death by people who make a lot more money than they do. What's worse, more and more middle class people are losing their jobs, and they're being pushed down the same hole that the working poor have been living in for decades. And the guys at the top keep raking more and more money in, concentrating it in fewer and fewer hands.

Nope, Limbaugh and Coulter are right when they say they aren't engaging in class warfare. Warfare implies some kind of roughly symmetrical conflict. The wealthy have simply declared open season the poor.

Monday, November 07, 2011

Her Ignorance Is As Good As My Knowledge

The most horrifying part of this video is when she talks about brainwashing. Heaven help us...

Sunday, November 06, 2011

My Wife Shrugs

My wife just finished reading Atlas Shrugged by Ayn Rand. It was given to her by my brother-in-law who considers it "his Bible." I asked her what she thought about it and this was our conversation.

"Are there actually people out there that think these characters are real?" she asked me.
"Which characters"
"The ones that make up most of society in this book...Rand's users and the mooches who take advantage of all the creative innovators."
"You mean that's how people who post on your site view people who collect Social Security?"
"Good Lord..."

The expression on her face made me realize how truly deluded the perception is of far too many people in this country. They actually think that people who are participate in government programs are dragging down our society. It also helped me to understand why blue collar folks are conservative. They are all under the horribly mistaken impression that our government is driving away innovators when, in fact, the exact opposite is true.

Just ask Bill Gates, Steve Jobs, and Mark Zuckerberg.

Saturday, November 05, 2011

Remember This?

A 500 percent tax? Oh, I see...yet another bullshit lie.

But I do love how the owner of the gun shop kept using the word "scared" over and over again. Ah, the free market at work:)

Any of you folks who rushed out to buy guns feel foolish right now? We're almost three years into Obama's presidency and he's allowed states to do what they want. In addition, he's actually increased gun owner's rights by signing the credit card protection bill which contained a clause in it to allow people to carry loaded guns into national parks and wildlife refuges. So, all that fret and worry was for absolutely nothing.

I wonder if some of the other things they froth at the mouth about will also amount to one gigantic nothing like this did. Hmmm....

They Don't Have Any

We saw some good economic news this week as GDP grew 2.5 percent in the third quarter of 2011 and around 100,000 jobs were added bringing the unemployment rate down to 9.0 percent. Certainly, neither number is thrilling. The reason?

Ideally, those trends could signal stronger growth, followed by more hiring. Yet until consumers consistently spend more, businesses are unlikely to hire enough to drive down unemployment.

What's that again, you say?

Many employers are hesitant to step up hiring until they see steady demand from consumers.

So it's not some phantom uncertainty that's being caused by President Obama's policies but the simple fact that consumer spending (70 percent of our economy) isn't where it should be for any real improvement. Why aren't they spending money?

They don't have any.

Friday, November 04, 2011

The Empire Strikes Out

Bank of America has struck out with its controversial plan to charge debit card customers $5 a month just to use their money. When customers complained and started to cancel their BoA accounts, many in favor of local credit unions, Bank of America dropped the plan.

Bank of America had to do this, they insisted, because of a law Congress passed that limits "swipe fees," the fees the banks charge retailers when you use your debit card. The regulation limits the swipe fee to 21 cents; swipe fees had averaged 44 cents before the regulation went into effect last month. (The original proposal was a 12-cent swipe fee, but regulators were convinced that was too low.)

I can remember a time when banks actually paid me to keep my money there. These days interest rates are essentially zero and the banks have fees for every imaginable thing -- depositing money, withdrawing money, talking to a teller, using ATMs, having a checking account, and on and on. (Banks are charging more fees because they're not making money the way they used to, by making loans.) Most of these fees can be avoided by maintaining minimum balances that can range up to tens of thousands of dollars. But that means people who don't have a lot of money wind up spending a lot of money just to have access to a bank account.

People who can't afford a bank account often have to pay companies just to cash their paychecks. These outfits frequently charge a lot for the privilege, and often make shady pay-day loans at exorbitant interest rates. For all the bad things Wal-Mart has done, this is one area where they may well have helped people out: they charge just $3.00 for cashing payroll checks.

Fortunately, most local not-for-profit credit unions have some form of a free checking account. Credit unions are basically customer-owned banks. They're often formed for employees of big corporations, union members, or government employees, but many allow anyone to join.

Some critics of the Dodd-Frank bill, whose provisions resulted in the swipe fee regulation, are trumpeting BoA's backtracking on the debit card fee as a victory for the free market. It is, no doubt about it. But this free market win is a direct result of the swipe fee regulation -- without that law, the big banks would have continued to silently charge retailers more than twice as much as they're charging now. That's money that we wind up paying in higher prices at the grocery store, gas station and shopping mall. Money that goes not to the retailer, but to some big bank.

The free market can work very well, but only when customers are aware of what's really going on. When banks make their profits in ways that aren't apparent to their customers, their customers can't make informed decisions about which bank provides the best service for the lowest price. The high swipe fees were essentially an extortion racket that allowed the big banks to use their monopoly position to gouge local merchants for providing a convenience option to their customers. This caused invisible price hikes on everything you buy with your debit card. (People who pay cash get socked the worst, but that's a separate issue.)

BoA figured it was their right to maintain their current profit margin by charging their customers directly for something that they had been making money on through transactions hidden from their customers. Their customers disagreed.

In the short run we probably won't see any price cuts at the checkout counter. But in the long haul the cost of doing business will be lower for merchants and that will ultimately result in more money staying local, resulting in healthier local businesses and more local hiring. Which seems better than sending all that extra money off to the banks so that they can give their execs more outrageous bonuses.

Thursday, November 03, 2011


The Turning Tide

I saw this recently and just about fell out of my chair.

A new survey from Spectrem Group found that 68% of millionaires (those with investments of $1 million or more) support raising taxes on those with $1 million or more in income. Fully 61% of those with net worths of $5 million or more support the tax on million-plus earners.

Holy Shee-aht! My initial shock was that it was even published at all in the Wall Street Journal. After that wore off, I was pleasantly surprised to see that two thirds of the wealthy now think that raising taxes is a good thing. But why do they support this?

Explains George Walper of Spectrem: “What this tells us is that there are a number of wealthy folks who said: ‘Gee, we need to increase taxes to stimulate the economy. No one likes to be taxed more, but the reality is maybe it has to be done.’ ”


Here are some of the comments from the supporters of this increase.

“When you have someone who made four and a half billion pay fifteen percent, and because it’s a hedge fund, I have a problem with that.”

“Quite frankly if Warren Buffett gets taxed an extra fifty thousand dollars or your typical investor of two hundred and fifty [thousand] or larger has to pay an extra thousand dollars in tax; It’s not gonna change his lifestyle. Whatever he or she was gonna buy, he or she is gonna buy.”

I have to say that I am fairly elated that wealthy people in this country are saying things like this. The tide is turning, folks, and it honestly can't happen too soon.