Thursday, July 26, 2012

Global Warning of Global Warming

News has come out today that Greenland is seeing its ice melt at an unprecedented and alarming speed right now. The ice is getting thinner, and the only place it can go is the ocean. We need to start moving off of fossil fuels as a planet right now and we have no time to spare. It is time to start listening to scientists. I am currently working on my associates on my way to getting my Doctorate in Microbiology and have colleagues at my college who work in environmental science, so while I am not an expert par se I do know a lot about the issue and find it to be as critical as the antibiotic resistance crisis, my calling. The webpage I manage is and I will start running experiments in a few years.

We need to transition to a hydrogen economy as fast as we can. We need government action to create massive incentives in the private sector to produce enough hydrogen to quickly convert the American transportation infrastructure to a hydrogen economy. It is renewable, non-polluting, competitive, less expensive, and the best option for the United States of America. It also works and is currently being implemented in Iceland. Learn more:

Now, there is another aspect to this story. It is true that ice cores have shown that once every 150 years Greenland has a mass freak melt, but the difference now is that it is coupled with the global warming and higher CO2 emissions so it will be a few years at this point until we know if this is part of the pattern or something more. This is not just my opinion, Lora Koening a Goddard geologist agrees with me.

The United States can do this. We must do this. Our government must convene an emergency session of the Organization of American States to discuss this issue and start shifting as a continent. President Obama also needs to make it clear to the other nations that the relationship that we are going to have with the other nations, especially Canada, who has a higher GDP per capita and a much lower HDI, and Mexico, Brazil, Chile, and Argentina who have an increasing amount of wealth that we want to work with them as partners and not as we have in the past. He can do this. He must do this. He needs to work with them to formulate a treaty that we will make a continental effort to shift to hydrogen. By doing this we will solve two issues, the issue of our money being sent to the hands of the very few, and the environmental crisis which is so apparent today.

Do it for my generation please!

If Laissez-faire is so great, why doesn't Wal-Mart follow it?

I was just musing as I cook dinner about companies profits and business models, and the economic models of the candidates they support.

Businesses run a more or less Keynesian model, running a deficit mode in times of depression, running a surplus at all other times of the year. When the economy is bad, most successful businesses will stop growing, but won't cut back. Right now the terrible drought/heat wave across the country is hurting farmers, and in order to keep themselves in business many are taking a loss this year to keep their livestock alive, so that when the drought is over they can more than recover their loss. Every successful business does this. They run a deficit in the bad years to stay in business so that when the economy is good they can recuperate their relatively small loss. These are the winners of a capitalist system. (or, frankly, Democratic Socialist systems like Europe, Japan, Australia, and Canada) 

However, many companies that follow this model and their leaders support politicians who run a laissez-faire economic policy. Instead of holding on or investing during the down times, they support cutting streams of revenue (taxation), cutting spending, and shrinking the size and scope in order to balance the budget. I want these businesses that support these policies to put their money where their mouth is and adopt this policy for their businesses. First of all, when they see their expenses exceed their revenue (like many farmers are currently seeing) they should cut their streams of revenue which are also their largest expenditure. They should close store fronts and they should fire employees in massive numbers. These are the largest expenditures to almost any company. They should put on sales to clear their stores or overstock their warehouses. By cutting their employees (wages) and storefronts (management costs) laissez faire would predict that this should balance their budget. Then why don't they? Because the world doesn't work like that. They are cutting the future revenue streams when their industries recover in a few years at the maximum.

In fact, no Fortune 500 company does this. The only times they do this is when they are in Chapter 7 Bankruptcy, like when Borders closed last year after their foolish mistake to give Amazon control of their website (idiots). But if Laissez-faire was so great, and they obviously believe in these policies they should put their money where their mouth is and stop practicing the Keynesian model they follow (or close corporate equivalent) and practice the laissez-faire model they preach (or close corporate equivalent).

They also should end their double standard when it comes to movement of goods across the world when goods can travel across borders for little to no charge at gigantic volumes without prearranging the crossing but people need to spend months setting up visas and paying taxes for practically the same thing across the same borders. I do not oppose free trade, but if we are going to allow the free movement of goods we need to allow free movement of people to stop our hypocrisy. Before people start saying that it is to protect us, then why do we import and export so many dangerous items at little to no charge (depending on the border) where average people can't travel freely through most of the world. The European Union did it right, they said something like "sure, you can move your goods freely between the borders large corporations, but people need to move freely also." Because of this, Sarkozy is no longer President of France after those terrible things he said about Poles and Gypsies. Racism has had a massive hit. On top of that, if I hadn't set enough nails into laissez-faire's coffin I want to point out that the current practice of laissez-faire in Greece and Spain and Italy are collapsing their governments' revenues, rapidly increasing their unemployment, and cutting all sources of revenue. Just what Thatcher, Reagan, and other crooks want! Despite what they claim their governments are only getting less revenue through their absolutely perfect practice of laissez-faire which most Americans call REAGANOMICS!

Just sayin'

Sunday, July 22, 2012

The motives behind politics

I am currently taking a sociology course at my local community college. One of the most important parts of sociology is the two major theories behind it. The first is structural functionalism, that every decision has costs and benefits to society, and the second is conflict theory, that society is in constant battles for resources. I want to look at the major issues of today to look and see where the Democrats and Republicans get their motivations from.

My sources are: for the votes. for the lobbying, and news organizations, predominately NPR, BBC, Al Jazeera, and most importantly, PBS. I have chosen these four because I have observed they usually don't benefit just one side but give more balanced viewpoints and wider coverage than any other source.

First. The money. The motivation. According to the largest financers of political campaigns in order are Finance/Insurance/Real Estate, Health care, communication/electronics, energy (oil), labor, construction, agriculture, transportation, and military. Looking at where the money comes from I will look at what they will get out of the major political debates.

Finance/Insurance/Real Estate have a mix of interests. The real estate industry benefits from subsidies for housing (Fannie Mae and Freddie Mac) and tax breaks for mortgages to encourage people to buy houses, not rent. Insurance has an interest in requiring people to get health insurance from them with no public option, and oppose all forms of universal health care which will shrink their business. Instead people are required to have insurance (which given the situation of money and media I think is the best available option for Americans. We spend far too much in the hospitals as a country for what we get.) Finance would be like banks and stock brockerages who do not want regulations and have collapsed the economy through their lack of responsability. They then get bailed out (what else are we going to do? Pay them unemployment and pay deposit insurance to all their depositors?) when they collapse the economy after lobbying to end government regulations and ruining the finances of real people.

The second would be health care. The largest are manufacturers of medicine, lobbying to get their drugs through the FDA before others. The American Medical Association is not included in the list on opensecrets.  This helps explain why universal health care has so few advocates in our government.

The third is Communications/Electronics. These are the people who support things like SOPA, PIPA, and other terrible things. They monopolize their respective markets and get the government to buy their goods. Others want to impact what regulations are passed that effect their business.

The fourth is energy. This is dominated by oil corporations fighting renewable energy and environmental regulations to protect their businesses at the cost of the country's economic dependence on foreign oil and a vicious cartel. They are almost entirely Republican financiers.

The fifth is composed of unions. These people fight for social programs, schools, or whatever else their industry is interested in. They are almost entirely Democratic financiers. An important note here is how unions are different from corporations, instead of being led by their leaders who are CEOs (like the rest of the lists here) the decisions are made by their members and their leaders are elected by the union members.

The sixth is made of construction, especially people who construct homes. These people donate across the board and are interested in keeping Fannie Mae and Freddie Mac how they are.

The seventh is agribusiness, and these people are interested in keeping their subsidies from the Department of Agriculture and having input on what regulations are put on their businesses. They also oppose legal work visas for Mexicans to work on their farms because they would have to pay them minimum wage and work them no more than 40 hours per week.

The eighth is Transportation. These people are diverse. The people who run rail lines (Berkshire Hathaway, CSX, and others) are interested in keeping AMTRAK on their lines only, keeping the other smaller lines without AMTRAK trains. The autodealers are interested in keeping funding mass transit at bay, so that they can continue to sell far more cars than are needed. (Notice the clash between Berkshire Hathaway and National Autodealers Association) Others include Courier Services who have an interest in keeping their ability to ship packages and stay unregulated. Also some airlines who are interested in keeping the environmental regulations (which cost money) at an absolute minimum. American Trucking Associations is another one that is heavily interested in keeping freight trains at a bare minimum.

The ninth is Defense. These people are interested in the government buying their goods and expanding our military. It is already the largest military budget in the world and the companies want us to buy more of their goods. It makes them rich and takes up a quarter of total government expenditure (half of all discretionary spending). Our government has two types of spending, Mandatory (social security and medicare are the largest amounts here) and discretionary (almost everything else) and the department of defense takes up more than all other mandatory and our annual interest on our debt combined! Also, assuming that it would cost the Federal Government $80,000 to send one American to college for four years ($20,000 per year), if we took half the defense budget out we would still have the largest military budget in the world and could provide free college tuition to 35 million Americans with only half of our military budget. That includes tuition, books, fees, room and board, the whole college everything. We would then make far more in taxes because people would not be deducting their student loans from their income tax, which would more than balance out in the end.

Part 2: The Policies

The Republicans and Democrats agree on a number of issues, the housing market, transportation (although a growing number of Democrats favor mass transit), agriculture subsidies, bailing banks, and Israel. Pro-Israel PACs (according to opensecrets) give 2/3 of their money to Democrats and 1/3 of their money to Republicans, and bth parties support continuing to give them money every year for their military. Perhaps they don't need to give as much to the Republicans because of their evangelical wing? Most of these are not usually brought up. Looking at the policies, we can see how they benefit the big donaters to political campaigns, but the American people often do not benefit as much.

How do the American people benefit from deregulating banks that then collapse? How do the American people benefit from exporting weapons to Israel? How do the American people benefit from the housing market collapsing? How do the American people benefit from having education cut to make way for military? How do the American people benefit from the highest rates for health care in the world with quality that is not significantly better than our European peers, but in many measures is worse (according to the CIA World Factbook)? How do the American people benefit from Monsanto getting government subsidies by less competition? How do the American people benefit from oil companies getting fewer regulations and renewable energy getting stalled, now for over 30 years? How do the American people benefit from AT&T monitoring what we do on-line?

The answer to all of these questions is, no, we lose massively. Very few politicians speak out against these massive corporate powers. Someone to speak out on the issue would be to say "America is going to get renewable energy." (hurting the oil lobby, dropping energy prices for 310 million Americans) "We are going to increase food production to bring down food prices by ending government subsidies to agriculture and scaling back the Department of Agriculture." (hurting Monsanto and United Fruit, now known as Chiquita, dropping food prices for 310 million Americans) "We are going to protect the access to all websites in America and reject pay per view for different websites as proposed in SOPA." (not giving Comcast more money, protecting access to the full internet for 310 million Americans) "We are going to outlaw dangerous lending practices." (Ending short-term gains for large banking institutions and stabilizing the economy for 310 million Americans) "We are going to have universal health care." (Hurting the never ending flow of cash to the insurance industry and decreasing health care costs for 310 million Americans) Behind all of this Americans don't get enough opportunities through education through lack of funding (despite having mostly excellent teachers) and don't cover issues like economics and politics that means Americans don't realize where the corruption actually is.

If someone said this, that person would be hated by those companies. Those people are President Barack Obama, Future Senator Elizabeth Warren, Senator Barney Frank, Senator Al Franken, Representative Dennis Kucinich, and these are the people who get the most hatred from right-wing media. We have not had a President who is so absolutely against these corporate interests since President Carter left the White House and he has received more than his fair share of hatred from the right wing. That is why FOX News and Romney's company Bain Capital's asset Clear Channel (which broadcasts Rush Limbaugh and other far-right pundits) are attacking President Obama. He is a threat to the massive lobbyists who control our government through campaign spending. He is the 99%, he just needs to say it. He was born to a mother from a poor (yet educated) farming family from Kansas and an immigrant father, what origin could be more humble than that? Because he is a threat to these massive lobbyists (especially the insurance industry) they have stepped up their spending, and their media doesn't represent what he really says because if the majority of people in the Deep South realized just how much they would benefit from his policies, he would win 40-50 states come November. This is why they are making voter ID which the NAACP, ACLU, SPLC, and other defenders of our freedom oppose. He is shaking up the status quo as much as he can, and he needs our help to help us. We need a Democratic Congress to pass a Constitutional Amendment to outlaw bribery (aka lobbying) and laws to make it punished severely. The Constitutional Amendment is needed so the Courts can't overturn the regulations again. If Mitt Romney is elected this will not happen, if Obama is kept there is a chance that we could see a massive decrease in corruption if he has a Congress that will work with him and pass these reforms!

They claim that he wants to end the American way of life, and there is some truth for this because he wants to change the system where everything our freedom is supposedly based on is a good that is provided by one of the major lobbying industries (namely own a house and own a car per person, look at the list of lobbyists and there is a clear correlation) and put less restrictions on what we can do, say, or protest, and provide every American with health care, college, and well funded public schools but he can't do that because Congress opposes everything he says, even routine legislation! He wants to change our country the same way Scandinavia's governments did when they became first-world democracies! On top of this most Americans don't hear what the President actually says and this is the big problem because what they think of him is what they are told by the media which is owned by the people who corrupt our system. Why else are there Exxon Mobil commercials on the evening news? If he is reelected and Congress is a Democratic majority than we could see universal health care, affordable college, and a growing economy with less corruption in Congress. If Mitt Romney wins, well, that's not possible because he changes everything he says on a frequent basis, whatever the lobbyists want him to say. If the American people vote for Obama and support him with a Democratic-controlled Congress (which is possible if people in the South start to vote) than there will be big changes, just like our greatest generation did and our standard of living will improve. I would love for the American way of life to be less dependent on the products of the same people who lobby our government.

This is why I am voting OBAMA 2012.

An Issue we can all agree on

A common theme in politics across the world is how governments get behind sports programs building arenas. Here in America, Major League Baseball, Major League Soccer, the NFL, NBA, and WNBA build stadiums across the world often with taxpayer dollars. There is a feeling that orbits across this country that if the city doesn't fund it than another city will fund and get the sports team, thinking it will help them make money. Well, NPR's Planet Money which I listen to regularly.

In it they talk about how it wouldn't be worth it for Indianapolis to host the Super Bowl by the government building a stadium for the NFL, and they would lose money building it. What has been happening is that there enough cities that are willing the money to build a sports arena to get a sports team that they don't have to spend any money. If one city won't another city will. It would take the mayors of America to come together at their annual conference and decide that they were going to work to not fund the private sports-leagues as a group to change this. I have a counter-proposal, they should fund their sports arenas themselves. They can afford it and cities almost never make back the money they spend. This or the MLB becomes a government agency (like that will ever happen!)! This will not end sports in America and here is why:
1. The sports leagues are multi-million dollar businesses. They can afford to build their own stadiums when cities should be paying for schools.
2. People love sports! People will continue to watch the games and buy the merchandise which will not hurt their revenues. Actually, there are people who get upset at this and would be more likely to watch more sports if they were self-supporting.

I think that would be a better system.

Saturday, July 21, 2012

Religious tests rated

I am trying a few religious tests (and getting my expected results) on-line and here they are by rank:

1. is an amazing test and everyone should try it, especially the most religious. If you want to do just one, do this one. If you don't want to give them your e-mail, it is duplicated at: with the same questions and results.

2. Try on different religions you don't know a lot about (or belong to) and see if they truly do fit your beliefs. is pretty simple, and I'd do the other ones. It doesn't have a lot of responses and I felt it was limited.

I feel that those two tests are probably all you will need to make the right decision to be honest.

Wednesday, July 18, 2012

Political tests

Here is a list of political tests I have tried on-line, and their advantages along with disadvantages. is better than the Political Compass in my opinion, I feel like it has a little more accuracy for the social spectrum (at least for the way I filled it out) but also includes a scale for opinions in foreign policy and government/cultural cooperation. It is extremely accurate. If you want to do just one quiz, I would say this is the one to do of the ones I have done. is a very well designed quiz. I like how it has third parties included in the list. This is the second-best quiz and the questions are well written making it very accurate. Combined with gotoquiz this is an extremely powerful combination.

The Political Compass a real internet classic is still really great. An oldie but a goodie. It isn't accurate as the preceding two but still is useful to see where you stand with great political figures. is a good representation and the advantage is you can see your results in the end (which I like so I can look for inconsistencies), one thing I don't like is it labels progressivism as liberalism (which liberalism? Liberal is a very bland term in political philosophy without consensus in the definition) but more importantly labels authoritarianism as populism (which are two completely different things). is good, and I like the display at the end. It is very representative of reality on how those five different political issues are different and you can be and economic socialist and a libertarian (Sweden for example) or an economic libertarian and a social fascist (Soviet Union) or any mixture of the five measures. It could use a few more questions to be more accurate.

If you don't want a long quiz but want a quick way to check your alignment, the World's Smallest Political Quiz is a fun tool, though not as accurate because it has so few questions. It does however cover the major issues.

Saturday, July 14, 2012

The "End The Fed" People

For the past few years there has been a lot of talk about ending the Federal Reserve and going to a system where the government doesn't print the American dollars. People make a lot of outrageous claims, and most of this is spearheaded by Ron Paul's constant tirade against the government's involvement in anything but abortion and marriage. He has a lot of support from Occupiers, many of which don't know his true votes. on you can see where he has voted. I recommend looking at his votes HR 359, HR 2, HR 4437, HR 2745, and most importantly H J Res 64, and H J Res 58, to see how they match up on his rhetoric. He has a mixed record. I included this because he is the patron saint of the private currency movement.

The following arguments people in favor of ending the Federal Reserve say include the following:
1. It is a fiat currency and they want it to be backed up by gold, claiming this would be better.
2. After the Great Depression and now they are claiming it creates depressions.
3. They think that a private bank, which probably would end up being Bank of America or Goldman Sachs, would do a better job. That is who did it the last time we had a private currency! Government contractors, mostly banks.
4. The Federal Reserve is the sole cause of inflation (The Case Against the Fed by Murray Rothbard)

Milton Friedman, Ron Paul, the Tea Party, and the Austrian school of economics are the people who are most famous in criticizing the Federal Reserve. Currently, it would take 9.5 billion grams of gold to back up the American GDP, Fort Knox holds a mere 147 million grams, meaning to back up every American dollar we would need 90 times the current amount of bullion the American government has. Currently Fort Knox holds 2% of the world's known gold, that would mean we would need 180% of the proven gold reserves, which is impossible. Remember, Milton Friedman (who hated the Federal Reserve) proposed that the Federal Reserve should increase the amount of money in the economy by a certain predetermined amount every year regardless of how the economy is doing. This is known as his k-percent rule. If he wanted to prevent inflation, according to a monetarist approach this is the exact opposite of what their other beliefs would predict (To be transparent, I am Keynesian). Perhaps the most important part to the whole argument is that if the government didn't print money, someone else would have to. The answer would be who it was before, private banks, Bank of America, Chase, Goldman Sachs, and Citigroup would be the most likely contenders and there would be no Congressional oversight.

The argument that the Federal Reserve is the sole cause of inflation leaves out the influence of the energy industry. Everything in the economy requires energy to run and this is oil for transportation. With the vast majority of the world's oil controlled by a handful of corporations, they have formed a cartel, known as OPEC, since they have formed a cartel they can negotiate what the price is going to be among themselves and squash any competition. If the price of shipping increases, everything else increases because everything needs to be shipped to get to where it will be sold, whether it is across town or across an ocean. If the price of oil is highjacked (which of course has never happened, sarcasm) than naturally the cost of shipping will rise and the cost of everything that is shipped (which is everything) will follow. At this point, putting more money in the economy to increase the amount of money regular people have won't stop the price inflation from the cartel. The Federal Reserve hasn't caused this, and there is very little they can do to stop it short of the Federal Government investing into renewable energy to give competition to this powerful cartel. President Carter tried to do that, but then we elected Ronald Reagan and the movement for energy independence went to the background of our political sphere. (Cold but true.) In fact, over the past 100 years (since the Federal Reserve was founded, 1912) the times with the highest inflation were in the 1970s and the 2000s. What immediately preceded both of them was a massive increase in the oil price. No action from the Fed here!

So, that leaves the only other part is what they leave out. Many people look at it and say they cause inflation by randomly increasing the money supply without bounds, in fact, no. There is no basis to that in real life. The Federal Reserve also destroys old bills to counterbalance the printing of new bills, which means the impact on inflation is negligible with this system in place. This is usually not reported when the media talks about the federal reserve and when I talk to critics they usually don't know about this and think I am lying, which I am not.

So, I have defeated all four arguments that are usually used against the Federal Reserve. Now, I wish to bring the points I have on why the Federal Reserve is a necessity for economic stability.
1. With only one printer of money there can be control in a steady monetary economy. With private contractors no such mechanism can exist.
2. The rate of severe recessions is currently 1 per 50 years, between the closing of the second national bank and opening of the Federal Reserve it was 1 per 7 years, there were two recessions in 1896 alone!
3. If you use gold as a basis for currency than that becomes a basis and if the value of gold rapidly decreases the value of your money will follow.
4. There is simply not enough gold in the world to back up the dollar's value. There is currently a proven reserve of about 8 billion ounces of gold available in the world (calculated by the amount held by the Federal Reserve 161 million which is 2% of the known reserves), and if we used a two metal system as was proposed by Bryan in the 1890s we could have, assuming that we had all the world's gold (literally) in Fort Knox it would equal $12.7 trillion at current exchange rates which would fall short of our GDP by over $3 trillion meaning we would need at least a bimetallic system if we were going to back the American dollar up with a precious metal. $3 trillion is the equivalent of 110 billion ounces of silver. It just isn't possible to use a gold standard, or bimetallic standard. It is not going to work. The gold just doesn't exist.

If we were going to take a lot of money out of the economy, well, that would mean deflation. That would mean increasing everybody's taxes and taking the money out of the economy instead of spending it on government programs and putting it back in the economy. This probably would not be done equitably given our recent political history. Prices would have to drop immediately or our standard of living would rapidly decrease. Personally, I would move all my money to other currencies to protect my wealth, and other people will do the same. Divestment from America, divestment from Greece isn't looking there. (See my previous post) There you go, the American dollar just got the amount of money it needs to switch to the gold standard! Unfortunately the American economy  just shaunk by $3 trillion dollars and our GDP per capita by over $10,000. By decreasing the supply of money, the opposite of a rapid increase of money should happen, and since increasing the supply curve will decrease the value of the dollar and prices will increase, by decreasing the supply curve prices will increase the value of the dollar and prices should decrease. I say should because I am not completely convinced it will. If some major corporation (oh, I don't know, let's say OPEC) that has a major influence on the economy decided to not decrease their prices, the prices will not decrease. Given the leverage the oil companies have on the economy I highly doubt that they would decrease their prices so rapidly across the country if they had no interest, and I can't see any reason why they would. This would mean prices for other goods will not come down because of the cost of shipping as much as they would need to if this was actually done, but I highly doubt this is likely. It would require every business to decrease their prices in order for this to happen, and because of market forces I predict individuals wanting to get ahead will prevent such a decrease in prices. So this means less money in people's pockets, and similar prices. I believe we call this situation a depression. It would take a long time for the prices to balance out and I don't see that happening in a timely manner. After that point private corporations (namely big banks) will have complete control over the money supply and probably not just one company but several, and the thing that supply-side economists tend to support, a privatization of the money system, will prove how an oversupply of money can hurt an economy by destroying the value of the dollar. That is not an option for the United States or the rest of the world. Currently, the times our country has seen rapid inflation is correlated not to actions by the Federal Reserve, but by actions by the oil industry, and only the oil industry. I don't think the risks are worth the proposed benefits that they claim, and the history of when we privatized our currency leads me to believe that there won't be benefits, but we will see issues in the overproduction of money to increase the value of the private banks that will print our money. Without caring about the long-term implications to their decisions.

This is why I support the Federal Reserve.

This is also one reason why I am voting OBAMA 2012.

Friday, July 6, 2012

Unemployment reports

I finished my statistics course three weeks ago and got a B+ in my class and learned how reports can be skewed and how to make a good analysis of data. I am reading a lot about unemployment today because June's numbers came out, I want to make a few points on how their analysis is invalid.
The unemployment report every month is merely a first draft. It takes three months to get the full picture as the forms that people sign for employment continue to come in. Assuming the economy is failing when you see the unemployment rate stays the same is just false. You need to see the historical trends when you look at the data, and a few things become clear on how irresponsible people are being.

1. Look at the trends for that month. There is one large trend in unemployment that people always leave out, according to the Bureau of Labor Statistics, unemployment increases and decreases twice every year except for one year in the past 20 years this has been the case, that year was 2008 when our housing market went belly up and the stock market crashed. The peaks are reliably in June and January, right before summer hiring and right after Christmas shopping. The low points are reliably October and April. We are still seeing this. gives you the raw information.

2. Skew is common in reports. People will look at the short-term, and show charts of just Obama's presidency. When you spread the graph out it makes our job growth look more flat, and you have no comparison with previous downturns, like the one that lasted across the majority of Ronald Reagan's first term. If you look at the long-term trends you can compare the slope with previous downturns which helps understand if this is unusual.

3. Without long-term trends you can't see the comparative slope difference between different downturns. Once you have this perspective you can see that using seasonally adjusted data to make it easier to find the low and high points that this recovery is going faster than the recession at the beginning of George W. Bush's presidency. It took 29 months (2 years, 5 months) for unemployment to drop 2% in these past two years, however, during the recession that followed the 2000 bust it took 72 months (3 years, 4 months) for unemployment to drop 2%. The 1992 bust took 16 months (1 year, 4 months) to drop 2%. The Reagan bust of 1982 took 10 months to drop 2% which was correlated with crashing oil prices. So, looking at this we can see this is an average recession in terms of recovery, and there is nothing to really panic about as long as we don't get the easy access to credit that brought the housing bubble. The thing that is truly slowing the economy down is that no one is focusing on how to get unemployment to drop and immediately start panicking. The media is saying it is our "new normal" with no evidence to back it up, but a lot of evidence on the unemployment graph to support that this is just a normal recession because they do not compare it to previous recessions, because that creates hope.

When people see these reports people get frustrated and people spend and hire less, there is a gigantic mood over the American public right now, and the blame has to go to the media. The brokers on the stock market start selling everything when the report isn't as good as they want and this doesn't help the economy. We have seen no major improvement in infrastructure (aka job growth) because the stimulus bill was weak, and people just are not hiring right now at the desired rate, but at the historical rate in the past.

Those are the current statistical errors that the media has been committing over and over again over the past few years.

Wednesday, July 4, 2012

Greece, the majority's story and the real story

I was reading the news and saw this article:

The part that stuck out to me was "Greeks don't like being told what to do." which gives the false impression that Germany is forcing the post-Lisbon Treaty rules down Greece's throat like some sort of new Roman Empire, only now based in Brussels. Nothing could be further from the truth. First, for something like the Lisbon Treaty to come into effect, every member nation needs to affirm it through a national referendum. Greece did this with an overwhelming majority affirming their support to the European Union and a system closer to the Nationalist US Constitution than the pitifully Federalist Articles of Confederation which failed in our own history. That is myth number 1.

So, there is absolutely no doubt in any intelligent person's mind that Greece's economy is collapsing. Here is a report I wrote for myself based on real-world statistics to cover the scope of this problem, and the rest of my conclusions based on the evidence.

The “Debt Crisis”
Statistical overview
Part 1
The Statistics
Current claims of Greece that are widespread on global media are “Their debt is killing their economy”, “The Euro is killing Greece”, among others. The same is being said about Ireland, Spain, Portugal, and Italy. Let’s see if the facts fit this theory.

Statistic 1
The highest indebted nations in the world, Public debt as a percent of GDP are the following: (IMF, 2011 via Google data) (all countries with >100% GDP in debt plus one)

  • Japan (229.77%)
  • Greece (160.81%)
  • Saint Kitts and Nevis (153.41%)
  • Jamaica (138.98%)
  • Lebanon (136.22%)
  • Eritrea (133.82%)
  • Italy (120.11%)
  • Barbados (117.25%)
  • Portugal (106.79%)
  • Ireland (104.95%)
  • United States (102.94%)
  • Singapore (100.79%)
  • Iceland (99.79%)

For comparison, Libya has no debt.
Statistic 2
The real GDP growth of the preceding 13 countries. (CIA, World Factbook 2011)
  • Eritrea 8.2% (#11)
  • Singapore 5.3% (#62)
  • Iceland 2.4% (#127)
  • Barbados 1.8% (#142)
  • Saint Kitts and Nevis 1.5% (#151)
  • Jamaica 1.5% (#151)
  • Lebanon 1.5% (#151)
  • United States 1.5% (#151)
  • Ireland 1.1% (#162)
  • Italy 0.6% (#172)
  • Japan -0.5%
  • Portugal -2.2% (#182)
  • Greece -6%

Libya has a GDP growth rate of 10.6%. (International Monetary Fund, 2010) Not far ahead of Eritrea.

The 10 fastest growing economies in the world (CIA, World Factbook 2011)

  1. Qatar
  2. Ghana
  3. Mongolia
  4. Turkmenistan
  5. Iraq
  6. China
  7. Papua New Guinea
  8. Argentina
  9. Turkey
  10. Sri Lanka

Libya is not included in this, but would be ahead of Sri Lanka in 2010, in 2011 its growth shrunk considerably. ( )

Statistic 3
Unemployment of the 13 most indebted nations if available, along with their trend. (IMF and Eurostat 2012, from Google data)

  1. Spain (24.3%)
  2. Greece (19.37%) at the peak, expected to decrease
  3. Ireland (14.45%) at the peak, expected to decrease
  4. Portugal (14.43%) at the peak, expected to decrease
  5. Jamaica (13%) steady
  6. Barbados (11%) just past the peak, expected to decrease
  7. Italy (9.5%) Expected to peak in 2014 at 9.82%, then decrease
  8. United States (8.16%) peaked in 2010, decreasing
  9. Iceland (6.3%) Peaked in 2010, decreasing
  10. Japan (4.5%) steady
  11. Singapore (2.14%) steady

Libya had an unemployment rate of 30% in 2004, along with an extremely tiny debt by any measure. (CIA World Factbook)

Statistic 4
European nations by size of surplus or deficit (CIA, 2011, USD) Euro nations underlined, EU members italicized.

  1. United Kingdom (-$202 billion)
  2. France (-$149 billion)
  3. Spain (-$130 billion)
  4. Italy (-$97 billion)
  5. Netherlands (-$39.1 billion)
  6. Germany (-$37 billion)
  7. Greece (-$30 billion)
  8. Belgium (-$22.3 billion)
  9. Ireland (-$22 billion)
  10. Austria (-$14 billion)
  11. Turkey (-10.4 billion)
  12. Poland (-$8.3 billion)
  13. Czech Republic (-$8.1 billion)
  14. Romania (-$7.8 billion)
  15. Ukraine (-$6.4 billion)
  16. Slovakia (-$5.8 billion)
  17. Slovenia (-$2.2 billion)
  18. Lithuania (-$2.11 billion)
  19. Serbia (-$2 billion)
  20. Cyprus (-$1.62 billion)
  21. Latvia (-$1.1 billion)
  22. Finland (-$800 million)
  23. Georgia (-$660 million)
  24. Albania (-$465 million)
  25. Kosovo (-$320 million) unofficial user
  26. Montenegro (-$200 million) unofficial user
  27. San Marino (-$58.3 million)
  28. Luxembourg (-$39 million)
  29. Monaco (-$3 milllion)
  30. Vatican City ($13 million)
  31. Andorra ($14 million)
  32. Moldova ($24 million)
  33. Liechtenstein ($83 million)
  34. Bosnia and Herzegovina ($549 million)
  35. Belarus ($1 billion)
  36. Croatia ($2.4 billion)
  37. Switzerland ($3.4 billion)
  38. Russia ($6.6 billion)
  39. Norway ($71 billion)

Libya ($0) (IMF via Google Data)

Statistic 5
Populations and deficit per capita. (Wikipedia which is from each nation’s census data)

  • Ireland $4794.85
  • United States $4,350
  • United Kingdom $3,244.35
  • Spain $2754.79
  • Greece $2,727.27
  • Netherlands $2320.89
  • France $2,280.03
  • San Marino $1828.33
  • Austria $1663.77
  • Italy $1598.51
  • Cyprus $1473.61
  • Slovenia $1073.07
  • Slovakia $1065.13
  • Czech Republic $766.88
  • Lithuania $662.30
  • Latvia $496.15
  • Germany $451.22
  • Romania $409.60
  • Montenegro $319.86
  • Serbia $280.87
  • Poland $217.35
  • Kosovo $184.56
  • Albania $164.21
  • Finland $147.87
  • Georgia $147.68
  • Ukraine $139.47
  • Turkey $139.18
  • Monaco $83.37
  • Luxembourg $76.61

Libya $0 (IMF via Google Data)


This shows a striking difference from what we will see in the media. Greece is always talked about having such a large deficit, yet they have 1/20th that of the prosperous United Kingdom. This is undisputed among reliable sources. How then does Greece have such a large debt? My hypothesis the marvel of compound interest. If Greece borrows $30 billion a year over fifteen years, and owe 10% on those accounts, then it adds up to $495 billion, and their GDP is about $300 billion, which fits. 160% of $300 billion is $480 billion. The UK on the other hand, has a debt worth 82.5% of their GDP, with a $2.5 trillion GDP is a $2.06 trillion dollar debt, 4.3 times the size of Greece’s debt.

Perhaps all the European Union needs to do is change their rules on the maximum size of public debt and further distress can be diverted. It is in the hands of Merkel and Sarkozy.

It is also hypocrytical for them to talk about Greece when in reality, being such a small country compared to the countries in Europe, their deficit is far smaller than those other nations. The amount the average Greek would add to their taxes to balance the budget is ⅔ that of what every Briton would have to add to their taxes to balance their own budget, but people don’t talk about it. The media doesn’t mention it. Their debt burden is far below Japan, which is really not much higher than it was before the earthquake, the debt burden then was 160% of their GDP, what Greece is now, and their economy despite having a deficit over twice the value of their economy is still relatively strong. Other factors are at play.

If you look at Greece what you see is consumer confidence with Greek banks is in the toilet, while they are not with Germany. This mindset has gone viral across the world, and we are currently seeing a bank run. More than this, it is from people abroad, in other words, divestment. With little to no equity and the government running out of funds due to the bank run, there is no one to bail out these banks and give them equity so that their depositors can continue to receive their interest and lending can continue from the banks. With no equity, this becomes impossible, and this has happened before in the United States. This is the same reason why people looking for a solution to the Israeli-Palestinian conflict speak of divesting from Israel, because that strategy in Greece is killing their economy. With less lending power, small businesses are unable to begin (which are one of the major drivers of economic growth in every economy) due to lack of credit, and unemployment rises to almost 20% due to lack of jobs due to lack of credit due to the bank run.

This has happened before in the United States. The bank runs of the pre-Federal Reserve era when the American government contracted the printing of currency to banks saw many bank runs as people were (rightfully) never confident in banks and our domestic economy was weak for over 30 years from the end of Reconstruction to the beginning of the Federal Reserve. If we (America) wanted to see our number one trading partner in terms of gross value of goods stay up, we would use our influence to work with brokering a solution between the Europeans and find an answer. If Europe goes, the rest of the world goes. If the European Union were a nation they would have the largest GDP in the world, and have trade with practically (if not literally) every nation in the world. They must not fall.

The solution needs to include breaking a deal that Europe will reanalyze their banking system and merge their banking deposit insurance mechanisms on a union level to prevent future problems. The Greeks need to pay slightly more in taxes, to decrease the amount they will soon need to pay to the people who bought Greek bonds around the world, and then they can spend more on education and health care, or pay less in taxes. Nevertheless, confidence in Greece must be restored. There is no option in this.

The current path they are following is austerity, to put as many government employees as they can on unemployment insurance (how much money will this really save?) and cut back on services. Through this policy of unemploying people Greece is seeing an unemployment of over 20% and growing. Before austerity began in 2009 their unemployment was on par with the average of the European Union. In fact, before austerity, Greece’s unemployment had been below Germany for four years! (Google Data) Austerity changed all that by firing government workers. Once the government workers are all fired, they don’t have as much purchasing power and the private sector loses revenue. The current neoconservatives in Europe and the United States use the same policy with deficits. Here is the question to show why this policy has never worked (The recession in the beginning of the Reagan years was due to skyrocketing oil prices that shocked the economy):

  1. You are running a business and are running a deficit. What do you do?
    1. Cut revenue.
    2. Find ways to increase revenue.
    3. Cut spending.
    4. Find better marketing strategies.
  2. You are running a government and are running a deficit due to a bad economy. What do you do?
    1. Cut revenue.
    2. Find ways to increase revenue.
    3. Cut spending.
    4. Use your power to increase the amount of money in the economy to prevent a bank run. Increase employment by hiring temporary government workers to upgrade aging infrastructure.

The answers to the questions:
  1. You are running a business and are running a deficit. What do you do?
    1. By cutting revenue your net profit will continue to shrink. You will need to close store fronts and you will lose potential revenue when your market is in better days, at that point you will be beaten by the competition.
    2. You will get more money and bring your business afloat.
    3. Your business will shrink. By closing store fronts you will lose potential revenue for when your market turns around.
    4. By marketing better more people will know about your business and you can get more customers.
  2. You are running a government and are running a deficit. What do you do?
    1. By cutting revenue your deficit will expand. You will owe whatever you don’t make now (+ interest) later and need to make extra revenue anywhere from 6 months to 30 years from now.
    2. By increasing revenue your deficit will shrink.
    3. By cutting spending you will probably fire a lot of employees who will then move on to unemployment which as the government you will have to pay. Their loss of purchasing power will expand to the private sector through less revenue for businesses. See: Great Depression.
    4. By decreasing unemployment more people will keep their houses, have purchasing power, and be able to continue to live their lives regularly. With the money continuing to flowing steady, you have the definition of a healthy economy. Businesses will not shrink and employees will have the means to start their own business if they wish. By hedging the bank’s equity they will continue to have money to pay their depositers interest which will mean that the chance of a bank run is diminished greatly.

Notice the similarity of these two questions, they are the same question, all I changed was which sector is getting less workers. Every good businessman will have the same answer to question 1, (there are two correct answers which together can bring a company to the Fortune 500 list) increase revenue or improve marketing, however, while Democrats will continue those answers in Question 2, b and d, Republicans will answer with a and c which are the wrong answers to the first question. Since the questions are practically the same, the answers shouldn’t change. If we look at Greece we see this is the case. Austerity in business and austerity in Government have the same reaction. Higher unemployment, more uncertainty, and collapsing profits for businesses. Just like how the Great Depression began.

If Merkel really wanted to improve the situation in Europe she would convene an emergency session of parliament to discuss solutions with the other nations of the European Union and be bold and fix these current issues. She will do the strategy a businessman would do, to increase revenue and stop laying off workers. It has never worked before, and it isn’t working now. They would switch to a Keynesian model to increase employment to increase government revenue to cover the deficits, increase confidence in investors, rein in the deficit, and keep their economies running. (I wrote this in May, a month before she started moving, basically, I was right.)

The only difference in the root cause of the crisis between Greece and Germany is the level of austerity. That is what the statistics tell us.