TV Censorship and the FCC

I was watching the Big Bang Theory and the way they talk about sex is not using any old word but a new one "coitus" which means the same thing, everyone knows what it means and it doesn't stop them from talking about anything.

This is the lovely thing about censorship. The more walls you put up against different words, the more ways people will find to get around it. Every time a governmental agency has tried to censor people from talking about something people have always found a way around it, it may be harder, but it can always be done.

So, although Eric Idle might say Fuck the FCC, I might say something even more offensive which is ha ha sucker, you tried to clean our mouths and you gave us even more swear words to censor!

Because that is just the truth of censorship. Whether you are the Kremlin, Fuehrer, Dear Leader, or FCC, censorship of speech just doesn't work in the long run.

A mistake Washington voters made last November

Congratulations Washington voters... you have decided to lower our credit rating in the easiest possible way by lowering the limit the State can borrow. Higher interest rates, here we come!

For your sanity, you might want to review this:

http://www.myfico.com/CreditEducation/Amounts-Owed.aspx

By lowering our credit limit we have made it so we will have a higher percentage of our State's available credit. This means that we will have a lower credit rating and probably higher interest rates in the near future.

Public announcement:
On a personal finance level, make sure that you have the highest credit score you can be approved for for your existing credit card. This will make you cover a lower percentage of your available credit which will mean your credit score will be higher.

Hopefully we can reverse this legislation ASAP.

State Legislatures

First, a summary of how state legislatures do elections because it is detailed. 49 out of 50 states in the United States have a bicameral legislature currently (all but Nebraska). The way that these chambers are run differs state to state, but there are big similarities across state lines. There are three systems currently in use in state legislatures. 39 states (except Arizona, Idaho, Maryland, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Vermont, Washington, West Virginia) have a simple yet ineffective system of having one representative per district, and two sets of districts, one for their upper house and one for the lower house. Every state has one representative per district in their upper (smaller) house. However, 11 states break this trend. I haven't done the analysis yet on the efficacy of each election and how many are accurate to the statewide voter choice, but hopefully I will someday. 5 states (Arizona, Idaho, New Jersey, North Dakota, and Washington) have one representative per district for their upper house (as normal) but two representatives per district for their lower house. How they vote for them varies, some are block voting (where people vote for as many candidates as there are seats and the two candidates with the most votes win) and some have separate elections for the two seats.

Before I describe the other districts, both methods present a problem. If you have the same population voting for these candidates and they can't rank their choices, you run into the spoiler effect and wasted votes. What ends up happening is you don't have a representation proportional to the choices of the district and you have usually one party win all the seats in a single district. Except for an example (Vermont) most states have only Democrats and Republicans in their state legislatures. The districts are regularly redrawn and you run into the problem of Gerrymandering.

South Dakota and Vermont residents could have either one or two representatives in their district. This doesn't solve the spoiler effect. They are all proportional in population per representative, but has all the problems of first past the post.

The remaining three states (Maryland, New Hampshire, Virginia, and West Virginia) have block voting, which is when you have a list of your candidates and you vote for as many candidates as there are seats, but what makes them different is that there is a large range between how many representatives you might vote on. You could represented by as few as one, or for some people in New Hampshire could have as many as 11 representatives. The population per representative(s) is all proportional, but since it is block voting, it doesn't increase the chance of third parties being represented and doesn't solve the spoiler effect, which means votes are wasted. They are on the right track, but block voting is not good enough to have a truly fair election system.

One question I have struggled with is why we have two state houses in all but one state. The disadvantages I can see is it takes legislation longer to get through government,  and the upper house always has the spoiler effect because it is a one representative per district. This is a historical leftover. In New York, the two houses were similar to Parliament and (at the time) our Congress in that the Senate was elected by owners of land, and the House of Representatives represented everybody. In Washington State the House was elected every two years and the Senate every four. So, depending on when the different states entered the Union changes the reason why all but one has two houses.

I see no particular advantage today in maintaining having two houses, and see a few disadvantages  It takes legislation longer to get through (which takes money, because they get paid to be there, and many states have time limits as to how many days they may be in session) and this can put good legislation on the back burner in order to pass a budget or some other duty that is routine and forgettable. If the representatives really represented the opinions of their constituents than there is no reason why it should take longer than reasonable to pass legislation that the people want to be passed.

The history of bicameralism goes back to the history of the Parliament of the United Kingdom. England's Parliament was established on 15 June 1215, and consisted of lords only as described by the Magna Carta which seriously limited the King's power. They evolved out of the Feudal system as members of the higher levels yet below nobility desired to have more power, and councils were formed which gave them more power. Parliament's main power was to levy taxes, among other powers. King Edward I was trying to unite the British Isles and parliament's power grew considerably. The House of Commons became an independent house from the House of Lords in 1341 under King Edward III. As the United Kingdom took over the British Isles over the next hundred years Parliament grew as an institution and bicameralism took shape. I will do another post on this someday... it's complicated.

Then when we get to the United States founding we have the famous Grand Compromise which created our form of bicameralism, with a Senate which was originally voted on by State Legislatures, and the House of Representatives was voted into power by whoever the State Legislature deems fit to vote (and still is). The New York example demonstrates how the two houses were set up similar to Congress and Parliament. Each state has a different story, so to generalize would be inaccurate. But what is important is that all but one state today has a state legislature.

Should we move to unicameral legislatures? From the point of view of making sure that all views are represented it would make sense to have only one chamber and have the members be elected using the Single Transferable Vote method which is the most accurate way to set up a legislature. Having only one representative per district for the upper house has no advantage in terms of the majority criterion of elections and hurts the possibility that a third party could be represented. This would be easily remedied by having both houses be elected using Single Transferable Vote, but then what would the point of having two houses be? Arizona, Washington and other states that have two representatives per district in one house and one in the other house don't see an increase in representation of minorities and see the same two parties again and again. With only two seats it is difficult to get more than two parties represented, and having one seat makes it practically impossible in most cases.  It would make sense to have multiple representatives for each district and have them be elected by Single Transferable Vote which is the best way to guarantee that they will represent the people.

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The real cost of the Cold War's nuclear weapons

The United States currently has the largest nuclear arsenal in the world. It has been estimated that if we used them all we could destroy the world multiple times over. Annually we spend $35 billion maintaining our nuclear weapons supply. We currently maintain 5113 nuclear warheads, enough for 26 nukes per country (imagine 26 nukes descending on Monaco, 26 nukes descending on Canada, etc.) or one per 1.4 million people. If we (hypothetically) descended one nuke on the world's cities over 2,000,000 people we would have over 4800 nukes left. That would decrease the world's population by roughly 20%, and would kill roughly 1,400,000,000 people. Since there are 234 cities larger than 2 million people, this is a kill rate of about 6,000,000 people per nuke. (Based off of Wikipedia's list of urban areas by population) To kill everyone in the world, each American nuke would have to kill 1,400,000 people. I would say this is doable.

How is it worth spending $35 billion on an arsenal that is large enough to kill over 20% of the global population? I always compare government spending by how many people could be sent through college for one year with the same amount of money, and assuming $20,000 per person, we could send 1,750,000 students to college tuition and fees free. If we only paid tuition (assume $6000 per person, a state school) that would pay for tuition for about 5,833,333 students, or 2% of the population of the United States. For comparison, there were 4,136,000 births in 2009.

The message of this post is, next time you hear the Republicans speak about how much we spend on education and health care and how wasteful it is, ask how it is so wasteful to teach people how to be doctors, programmers, businessmen, teachers, any profession you an think of, yet it is a good use of funds to spend $30 billion on nuclear weapons, more than is required to kill every person on earth.

Changing to a Parliamentary System won't change enough.

One Law Professor made an interesting paper that claims that in order to solve our political disfunction we should move to a Parliamentary System. You can read a summary here. His three major points are that 1) our government is currently disfunctional, 2) our system could be fixed by moving to a parliamentary system aka a system where the executive is selected by the legislature, and 3) no other proposed change will fix the disfunction of not having a parliamentary system.

There are a few major problems with this paper however.

If we take the United Kingdom as our archetypal Parliamentary system wee need to analyze how well it works. the UK's House of Commons right now is 303 Conservatives, 57 Liberal Democrats, and 255 Labour, among other smaller parties. There are 650 members of the House of Commons total, which leaves 35 members of smaller parties. If the last election was proportional you would expect that the Conservatives had won 47% of the vote, the Liberal Democrats 9% of the vote and Labour 39% of the vote.

This is just plain not the case. In the last election the Conservatives won 36% of the vote (overrepresented by 11%), Liberal Democrats won 23% of the vote (underrepresented by 14%), and Labour won 29% of the vote (underrepresented by 10%).  The largest problem of the current American House of Representatives, a ruling minority, is also present under the British system. Last year we saw the results of gerrymandering where the Republicans lost the vote but won the seats, and looking at the key swing states of Ohio, Pennsylvania, Michigan, and especially Florida, we see that there was clear gerrymandering going on that gave the Republicans a large advantage. Looking at the riding by riding results in the last UK election you find that Labour and the Liberal Democrats stole votes from each other which gave the Conservatives a majority (despite winning 52% of the votes nationwide together). This problem is very clear when one looks at the results.

Rick Hasen doesn't solve this major problem.

His third proposal is also wildly off base. By allowing people to use ranked voting and vote for third parties without wasting votes it will fix the disfunction of having a government with only two parties and no opposition on the left to the Democrats consistent pandering to Republican demands to move further and further right. a Parliamentary system alone won't fix this problem, ranked voting will. Just turning our President into a Prime Minister won't fix disfunction if the House can still be gerrymandered and the Senate still exists. No problem is really fixed with this solution.

Parliamentary or Presidential systems are both good, I see no major advantage that they have for each other, but ranked voting systems have a very clear advantage over First Past the Post, and when you compare the results of Australia's elections (where they use IRV) with Britain's elections (where they use First Past the Post) you find an enormous difference in how accurately the makeup of Parliament represents the national vote, and comparing Britain's elections with America's elections shows only a difference in how the head of government is selected, but no real difference in how the government represents the people. Also, I must say that comparing party list methods (like Germany) resemble the inaccuracies of Britain and America more than the more proportional representation of Australia.

Changing our election system won't be as difficult as many believe

One argument I have heard from people about how moving to a ranked voting system won't work is because they think it will take a constitutional amendment. They are right that the Presidential elections will take a constitutional amendment, but the House and Senate won't.

All the Constitution says about the election of Representatives is that the electors must have the same qualifications as for the most numerous branch of the State Legislature. That's it, nothing more.

For the Senate, it gives the same requirements to vote, and says that they must be elected so that roughly 1/3 of the Senate is elected every two years and each State elects its senators in different years.

All other laws governing elections of the House and Senate are mostly in the United State Code. These only take a passage of a normal bill to change. The rules for the House of Representatives is codified in United States Code Title 2 Chapter 1 Section 2c.

In each State entitled in the Ninety-first Congress or in any subsequent Congress thereafter to more than one Representative under an apportionment made pursuant to the provisions of section 2a (a) of this title, there shall be established by law a number of districts equal to the number of Representatives to which such State is so entitled, and Representatives shall be elected only from districts so established, no district to elect more than one Representative (except that a State which is entitled to more than one Representative and which has in all previous elections elected its Representatives at Large may elect its Representatives at Large to the Ninety-first Congress).

The rules determining the law for the Senate is codified in United States Code Title 2 Chapter 1 Section 1 and it makes absolutely no mention as to how Senators are to be elected, or what system must be used beyond what is specified in the Constitution.

So, in order to change the laws regarding the election of Representatives in the United States all we have to do is change the law to something like this:

In each State no less than 5 and more than 7 Representatives will be elected from each district. The Representatives will be voted on in a ranked voting manner so that every Elector can rank all candidates in order. The candidates with the fewest votes will have their ballots be redistributed to their Electors next choice until the number of candidates standing is equal to the number of seats available. States with less than 5 representatives must form an interstate compact with neighboring states so that each Elector will have between 5 and 7 seats to vote on.

If we replaced Section 2c with that we will make all the changes necessary to insure a more accurate election system and give third parties a chance to get elected. It doesn't violate the 10th amendment any more than Obamacare, laws against child labor, or laws against segregated schools. In fact, according to Article 1 Section 4 of the Constitution the House and Senate have every right to change the laws for electing people to their chambers. This is 100% constitutional and only requires a regular bill.

Washington State used to have at large members of the House from 1889 to 1909, so having an at large district has been done before. If Congress receives enough pressure from their constituents, this can change. In terms of the Senate, all we have to do is pass a law requiring Senators to be elected using Instant Runoff Voting, which will be as easy as the last bill to pass.

How to solve income inequality

A very fascinating video about monkeys and income inequality: http://www.upworthy.com/2-monkeys-were-paid-unequally-see-what-happens-next

When he says it is the wall street protest he is absolutely right. When people are taken advantage of, they are going to revolt. This type of attitude was exactly what made our country independent in the first place. The 13 colonies were being treated unfairly by King George III before we became independent and we knew it. We then revolted, just as this monkey does throwing back the cucumber, because he wants a grape.

When you look at Occupy Wall Street you see people who have been working just as hard getting paid less and less and don't have the resources available to start their own businesses because they have to support themselves. This is why we called for ending the corruption in our government by overturning FEC vs. Citizens United.

When you look at the Arab Spring we see how they were being treated horribly by their governments and looked across the Mediterranean and saw how Europeans live. There is no reason they can't live like that, so they are in a revolution and I know that in the end the progressives will win, even though there are times when it doesn't seem like it.

No rational person would be content with being mistreated when the person right next to them is getting paid far more for the same work. This is a real source of income inequality in the world, compare state worker salaries and private worker salaries who work for corporations of a similar size and the comparison holds to my last two.

How do we solve it? First of all, we need to form cross-corporation unions. We need to say that we are going to set our prices at a point where we can make enough to live. This is one step towards making our economy more sustainable, but it isn't enough.

We then need to look at how much money we spend on gasoline, communications, and electricity and recognize that we can pay less if we set up corporations which won't be so greedy and treat their customers with respect. When it comes to gasoline we can move towards more competitive alternatives, like fuel cells, which will be a very important change in how our economy works. This will create competition as long as we allow competition to exist and don't allow monopolies to form on such a critical part of our economic infrastructure. When it comes to communications we need to have reasonable regulations to prevent corporations like Comcast and AT&T from forming cartels and keeping prices high. With no one else to turn to once these companies control the economy we need to make certain that there are regulations preventing price gauging which hurts economic growth.

Another important aspect to the economy is the stock market. When you look at the stock market you will find how banks and investment institutions own large shares in many different corporations. I have found Yahoo to be the most intuitive for finding which companies own large shares in other corporations. This presents the largest hurdle, because when a collection of banks own large shares of all publicly traded companies in a sector, they really do control the whole market. The easiest way to fight this is refuse to deal with companies that own these other corporations and end your bank accounts with them. Concentrated power is never a good thing, and that is why keeping your bank accounts with small locally owned credit unions helps prevent monopolies and limit the resources that big banks can get. With the major players in a market not competing to keep prices low, and paying people as little as they can, there is very little that local businesses can do to reverse the trend of how the purchasing power of the middle class has shrunk.
This is main reason that the major corporate media outlets don't push certain issues, they are all owned by the same people who have no incentive in talking about ranked voting, income inequality, or other major issues, but instead fill the time with cute 10 year old baseball teams, pundits who don't know the facts, and Justin Bieber (currently). It keeps them from talking about major issues and most international catastrophes (namely human rights abuses in North Korea, Darfur, and the Congo Wars among others). This is a serious threat to the political health of our country and other countries seeing similar concentrations of poew.The next step is for many different people to own stocks in their own name, and if enough progressive decide that instead of boycotting WalMart, Exxon, etc. they will buy the stock and vote in better people, followed by taking their earnings and investing in local companies, it will help limit the concentration of power that is so dangerous for both our economic and political cultures. It is a large shift but I think this is the way.

There will be anarchists and communists who say their way is better. The problem with the anarchists is removing the government from influencing the economy won't solve any problems in the long run. It is dangerously close to the hands off approach in the Guilded Age which saw massive monopolies, impoverished people, and if it weren't for the unions and the anti-trust legislation the Guilded Age would still be here. The communists who say that the government needs to control the economy leave the government with complete control of the economy which leads to the inefficiencies of planning boards which plagued every communist country. It also leads to a new ruling class similar to the old based on who is the leader of the party which means nothing has really changed for most people.

I favor a center approach. When it comes to competitive goods I see no reason for price controls, or anything more than a minimum wage and the right to organize to insure people will be able to be paid enough to live. When it comes to monopolistic or oligopolistic goods, I see the government needs a role in insuring that the monopoly or oligopoly that forms will not raise their prices to the point where they control everything and individuals have no power, or just control the monopolistic good (mainly oil, electricity, telecommunications) which is successfully done in many highly developed countries. This is a way to help the economy grow by circumventing the choking power that these companies have when they have no competition and no one can enter the market to create new competition. This helps people get better products for a lower price and gives people different places to work so that if unemployment gets low it will be the corporation that is competing for the most skilled workers, not the workers competing for the best jobs. This will make prices rise which will cause the aggregate demand to increase, which will reduce prices and increase GDP. Aggregate Demand on Khan Academy

Online sales tax is a good thing

I just found some good news for everyone who lives in the five states that have no income taxes but sales taxes instead. The Federal government is going to allow states to charge sales taxes on online purchases.

I am not being sarcastic, it really is a good thing. According to The Olympian Washington State would raise over $20 billion from such a tax, which would mean the current deficit would go away. This would mean more money for schools, roads, less layoffs, state workers wouldn't need to get pay cuts as just happened in Washington State, and our economy will be better. I'll just say it, I live in Washington State, and over the past few years schools of all levels have taken a massive hit in the amount of money available. College tuition is rising rapidly from the deficit and taking a large hit, and K-12 schools are losing a lot of resources. What Washington has been forced to do the past few years is going to hurt our economic growth 5 and 10 years down the road. There is a reason we have one of hte l

By doing this, we will find that our students are better prepared, our young adults have less college debt, and there will be money available for students who don't eat breakfast, and up to date textbooks and computers in schools. (education is in many ways the family business for me, so I know a lot about it) The state government will be able to step in and create incentives for job creators with tax breaks to decrease our unemployment rate and be a model to the world. We can do this, and this bill will allow it.

One concern I heard was that it will become very complicated to follow local tax laws. However, this is not a problem for a business that uses a program that has all the tax rates loaded into it. In one of my jobs we did things on the road and we had a table for all of customers so we always charged them the correct tax rate. It really isn't a problem, and the local variations of sales tax are usually no more specific than the city level. All in all, this is a good thing for everyone.

The Real Social Security Crisis

I just figured out why Social Security is in a crisis. There is a crisis, but it is not a governmental crisis, a senior crisis, or any of the other things that would concern the average American. Whether there is a crisis depends on your point of view. The crisis is that Social Security reduces the interest rate that the US Government pays on bonds.

When you look at who owns the national debt, Social Security is the second largest owner at just over $2.7 trillion, or about 1/8 of all debt the government owes. The second largest holder is the Federal Reserve at $1.66 trillion currently. Social Security has run a surplus for over 30 years now, and that surplus is reinvested in government bonds which over a long time has added up to a large surplus.

By providing the government easy money to cover the deficit we have run since the Bush tax cuts in 2001 (before which we had 4 years of a growing surplus) it diminishes the interest rate. Here is a chart I made demonstrating a constant demand rate, but a diminished supply, the simplest of economics graphs:

Basically, by having social security run a surplus year after year, which I have already blogged about, the US government pays less on the debt which means that we have easy access to a large amount of credit annually. This is good for the tax-paying American.

However, there are some people who don't benefit from such an arrangement, which is every Amrican who borrows more in bonds than he/she pays in taxes. Mostly finance people who work at banks who get easy money from the US government by selling bonds, at almost no risk. The money that they get from the government comes from taxes and future bonds. If the government was to run a surplus the government would not need to sell bonds and the interest rate would collapse because the supply would be 0, which would force banks to invest in other ways. Since the government routinely runs a deficit, there is always a need for bonds to be sold in order to cover expenses, so bonds will pay people money so the government can continue providing services that Americans rely on. If the government was to balance the budget or run a surplus this easy money would be gone.

By eliminating social security, as some Republicans want to do, or by reducing the tax rate and payments little by little until nothing is left, the government will lose this revenue that diminishes interest rates and income taxes beyond the level they would be otherwise. If Social Security was eliminated we would see that the interest rate the government pays on bonds would rise because they would need to sell more bonds to the private market in order to raise enough revenue, and the banks that buy large amounts of bonds will make more easy money.

If we eliminated the Federal Reserve as some Libertarians want to do, the government would lose the other major holder of American debt which further decreases interest rates. A lot of Tea Party Republicans claim how it is "monetizing the debt" which they say is a bad thing. While I agree that debt shouldn't be used in all times I recognize as a Keynesian that during recessions it is worth taking on debt to get the demand curve up to where it was to end the recession. But I do understand that if too much money is printed beyond the demand for it you could create runaway inflation which looking at a number of countries where inflation is out of hand is clearly bad for the economy. The people who would have the most to gain out of eliminating the Federal Reserve would be the people who would benefit from controlling monetary policy directly. I don't usually read CNBC, but they wrote a really good article on how creating a central bank under the executive or legislative branches would create endless problems of politics here that I don't feel like I need to duplicate. The system we have now is the best we are going to have in terms of monetary policy. Their leaders are appointed by Congress and are able to make quick decisions without needing constant political debate within their mandate. In other words, between the money it provides to reduce interest rates on American bonds and stabilization, ending the Federal Reserve would be a very bad idea.

Source on who owns the debt: http://useconomy.about.com/od/monetarypolicy/f/Who-Owns-US-National-Debt.htm

Social Security Surplus by Year

The House passes CISPA

Today the House, including 96 Democrats, did the shameful act of passing the Cyber Intelligence Sharing and Protection Act. This is a completely unconstitutional act. If passed it will allow the government and internet providers to access your browser data for any reason without a warrant, and there is no way you will legally be able to protect yourself. They will be able to share it with the government at any time for any reason. This is bad enough to say it is completely unnecessary and unconstitutional, but it also says that the military, for god's sake, the military can access your information without a warrant. So, let's say that you go to court because you don't like how a company was stealing your information and giving it to the military or some other agency like the FBI (think J. Edgar Hoover, I know he's dead but he built the agency) and there is now absolutely no legal path you have to keep your privacy.

I try not to be a radical who thinks everything should be completely private, and I realize that there are times where information should be shared. I have a private investigation agency which I am building and this issue is central to my chosen career. But when the government for any reason can tap into your records which are not sensitive and can make large profiles on you that have no criminal value, than we have taken a massive step in the wrong direction. We had a fourth amendment for a reason, but since the PATRIOT ACT was passed and now that it looks like CISPA is going to be passed, the constitution is basically dead. Now, Obama may have said he was going to veto it, but with his recent announcement to cut social security benefits and raise student loan interest rates I have absolutely no faith that he will veto it, because those two things he said he wouldn't do, but he did anyway.

To my representative Denny Heck I want to send this message:

Why did you vote for CISPA? I thought you were different. I campaigned for your campaign for hours because I thought you were progressive. I thought putting a Greener into the House of Representatives would bring reason and good policy that didn't infringe on the first and fourth amendments of our constitution. I was wrong. You have lost my vote for reelection.

The future of Apps

Today on Apple's App Store and Google's App Store, once you buy an app or song, you can never sell it again. This is completely different from CDs and older forms of media where once you bought it, you could sell it back if you didn't want it anymore. Here is a proposal for a way that app stores could still make a profit but customers could sell their things back (for a depreciation in value) to get apps or music they want.

1. You buy an app, let's say, for $5.00. You pay the app store and they take your money. You enjoy the app.
2. Several months later, you no longer use the app and are unlikely to ever use it again. It takes up space and there are other things you want. You sell the app back for $2.50 and get that onto your store credit. At that point you purchase a different app that you do want. That app is now for sale at $2.50 so the next person who buys it gets a nice discount. Apple and Google still make money, and customers are happy because they get a nice discount.
1. This is a compromise between trading and getting all of your money back and being unable to recover your money once you are done with the app you were using the time before. A compromise that everyone will be happy with.
2. By giving discounts when people buy back an app Apple and Google will be able to increase the volume of expensive apps sold, and it won't always be that price, so people might have to wait, and by advertising 50% off, or 75% off, the sale will be over quickly. When the people who bought at a discount sell the app, and they want to sell it when they are done they once again will sell it at 50% off the cost they paid, and Apple or Google will make a net profit once again. By giving people this store credit they will be more likely to buy more expensive apps, because they know they will get half of their money back when they sell it back to the store. I personally would be more likely to trade in an expensive app than an app that is only a dollar, and would be more likely to purchase an app for $5 or $10 on occasion knowing I can get half back if it is something I don't want. I also don't think the prices will necessarily double because Apple and Google will still make a profit off people who sell them back, so there won't be any incentive in doubling the price because they won't be losing income. Since they won't be perpetually on sale then the really good apps people pay for and keep will stay at their current level because the amount of people that trade them in will be so low. Only apps that have a short shelf life until they are exhausted or apps that aren't very good will be traded in, and those types of apps won't sell at higher prices because their quality isn't very good. By offering them occasionally at a discount Apple and Google will increase their volume and number of reviews which will created an incentive for app developers to make their apps stay useful for a longer time to prevent poor reviews from the people who buy them at a discount.

I am not the first person to think of this, and this was inspired by a post by NPR's Planet Money.

Obama's Social Security proposal's flaws, with myths

In light of President Obama's announcement that he will use a "chained-CPI" for social security benefits means he is using the same sort of scare tactics the Republicans have used for the past 30 years, and puts him to the right of Ronald Reagan in economics, from the Keynesian camp to the voodoo laissez-faire Chicago School of Psuedoeconomics.

First of all, there are multiple consumer price indexes. Wikipedia lists 4 different indexes, one of which Social Security uses. Social Security uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to calculate the cost of living adjustment for social security benefits. The CPI-W is a very good measure, and it is defined here:

Obama's Chained CPI is a real measure, and Investopedia shows how it is a wildly different measure which assumes that people will use less expensive products all the time, which presents a few problems. First of all, since Medicare doesn't pay for all Senior health expenses (like nursing homes) they have a lot of medical expenses that they cannot get cheaper for a different price, and comes out of their paycheck. They cannot get a cheaper product and the Chained-CPI is a bad measure for determining that group's cost of living. Second, it is a real dilution and not very useful, because it is never an accurate adjustment because people don't always buy the least expensive thing, either for moral reasons (like how I never shop at Wal-Mart given a choice) or personal choice. (something made by Apple as opposed to another product) Third, it purposefully dilutes the consumer price index by not accurately representing the increase of price of the items in question, which shows how it should be abandoned. CPI-W is a good measurement which calculates inflation based on over 8,000 items, which makes an accurate measure which doesn't allow any one item to throw off the COLA for Social Security which insures that social security payments will be adjusted accurately.

There is no reason to change the payments that Social Security makes every year, it continues to run a surplus and if Obama's plan passes seniors will find that their payments will drop considerably, which will hurt the economy.

More gay marriage predictions

I have already blogged about the American front for gay rights, but what about internationally?

Today New Zealand has taken a gigantic step for equality and approved gay marriage, which means gay marriage is now legal in 12 countries and in parts of three others. 243,000,000 people (rounded to the nearest million) live in countries where gay marriage is legal currently, or 3 percent of the world's population. The most populous country to have gay rights is South Africa at 52,000,000 people, and the least populous is Iceland at just over 300,000. Mexico is larger than South Africa, but gay marriage can only be performed in certain jurisdictions, so it isn't equal to the others. Since 2010 began 5 more countries have approved gay marriage. I expect the next few year swill see a few more countries legalize gay marriage, most likely some of the following:

1. Andorra has proposed gay marriage/
2. Cambodia has allowed a few gay couples to legally marry, whether this will turn into legislation is unknown.
3. Chile has pending legislation to legalize gay marriage.
4. Colombia's court has ordered that gay marriage must be legalized soon.
5. Finland's government has immense pressure from the people to legalize gay marriage, and I expect they will legalize it in the next few years.
6. France will almost certainly have gay marriage in the next few months.
7. Germany will legalize gay marriage if not this year than after Merkel's government is hopefully defeated.
8. Ireland will legalize gay marriage soon.
9. Luxembourg intends to leglalize gay marriage
10. Nepal will likely approve gay marriage in the near future but is currently stalled.
11. The United Kingdom will legalize gay marriage soon.
12. Uruguay will almost certainly legalize gay marriage this year with a promised signature from the President.
13. The United States Supreme Court will probably require states to recognize gay marriages soon, if they follow previous decisions.
14. Vietnam is moving towards gay marriage, albeit slowly.

A few other countries are likely to approve gay marriage in the near future based off of their other freedoms.

1. Austria has potential.
2. Czech Republic
3. Estonia has proposed civil unions.
4. Liechtenstein
5. Philippines
6. Switzerland

If the countries I outline above approve gay marriage, than 1.3 billion people will live in countries where gay marriage is legal or performed or recognized. The future is bright for gay marriage.

Presidential rankings and what-ifs

I have made a list of the Presidents of the United States where I rank every President who served for over a year based solely off of what they did and attempted during their time as the President and campaigning to become President. Here is my list:

1. George Washington - for his formation of treaties and respect of Native Americans
2. Abraham Lincoln - for his effort in keeping the United States together and the Emancipation Proclamation
3. Franklin Delano Roosevelt - For his efforts and success in setting a strong foundation for the 20th century economy, he would be our best if it weren't for the Japanese Internment camps
4. John Fitzgerald Kennedy - For his efforts towards science and combating poverty
5. Dwight David Eisenhower - For his diplomacy, protection of the economy, and prophetic farewell speech.
6. Thomas Jefferson - For his exploration of the American west, preserving trade in the Mediterranean, and diplomacy
7. James Earl Carter - for his strong efforts towards peace around the world, and attempts to gain energy independence for America, he worked towards ending nuclear proliferation, 
8. John Quincy Adams - For his economic wisdom, respect of Native Americans,
9. Harry Truman - For his continuation of building the foundation for the 20th century his predecessor built. He is ranked lower for his dropping of the bombs.
10. Theodore Roosevelt - For his valiant efforts in preserving America’s treasures and national parks, he is ranked lower for his intervention in Latin America.
11. Lyndon Baines Johnson - For his efforts on combating poverty and his overall human rights record. He ranks lower for his intervention in Vietnam.
12. Ulysses S. Grant - For his continuation of Reconstruction
13. Benjamin Harrison - For his advocacy of civil rights, reformation of the civil service
14. Warren G. Harding - for supporting the 8 hour work day, child labor laws, opposition to lynching, and good neighbor policy
15. William McKinley - For his advocacy of civil rights at home and abroad
16. Woodrow Wilson - For his breaking his promise on World War I, anti-German sentiment, his support of the League of Nations keeps him from falling farther.
17. Martin Van Buren - his cowardice in face of anti-Mormonism which he opposed demotes him, he kept peace with Mexico, advocated free trade, and opposed slavery
18. Richard Nixon - EPA, improved relations with China, set up AMTRAK
19. Gerald Ford - environmental regulations, strengthened AMTRAK
20. James Madison - he opposed the national bank which hurt our economy, he started the War of 1812, and protected Native Americans.
21. Zachary Taylor - For his attempts to set up the Western states as free states
22. James Monroe - He started the Seminole Wars, did the Missouri compromise meaning each slave state had to be matched with a free state, his expansionist Monroe doctrine which paved the way for future abuses of Latin America,
23. Chester Alan Arthur - For his signing of the Pendleton Act which put rules against favors, he opposed Mormon polygamy (bad), opposed racism against the Chinese (good), and favored better relations with Native Americans.
24. John Adams - His largest accomplishment was the Alien and Sedition Acts
25. Bill Clinton - he signed Gramm-Leach-Bliley, DOMA, DADT, and failed to pass meaningful health care reform. But he balanced the budget and didn’t hurt Medicare, which prevents him from falling further.
26. Barack Obama - For his efforts towards universal health care, ending the Iraq war, and standing up to warmongerers, and his attack on Social Security, and constant giving in to Republican demands when his party controlled both houses of Congress
27. James K. Polk - He was extremely expansionist,
28. Grover Cleveland - For racism, opposition to labor, and imperialism
29. Herbert Hoover - For his obsession with the deficit, protectionist policies, and limited response to the great depression.
30. Calvin Coolidge - His small government rhetoric and lack of leadership made his Presidency unsuccessful albeit popular
31. Franklin Pierce - For his unsuccessful compromise the Kansas-Nebraska Act
32. William Howard Taft - for his attacks on President Roosevelt’s environmental policy
33. Rutherford B. Hayes - For ending Reconstruction
34. John Tyler - For his refusal to form a national bank in the face of an economic collapse
35. Millard Fillmore - For passing the Fugitive Slave Act
36. Andrew Johnson - For his opposition to Reconstruction
37. Andrew Jackson - For his deportation of Native Americans
38. James Buchanan - For his unwillingness to use his power to keep the Union together
39. Ronald Reagan - For negotiating with terrorists to hold Americans hostage until he was President, selling arms to Nicaraguan terrorists, attack on Grenada, and deregulation of the financial sector.
40. George H.W. Bush - For vetoing every good bill that came his way and using the United States military to his benefit (an oilman used the US military to defend a major oil exporter with dreadful human rights, I’m sure there is no conflict of interest.)
41. George W. Bush - For attacking Iraq, destabilizing the financial markets, the PATRIOT ACT, No Child Left Behind Act,

As a reader will tell, I am very progressive and focused heavily on not just outcomes but the meaning behind the act. I am a HUGE Washington fan. People can be great people in terrible circumstances, and that can test their character strongly, like the top three on my list. People can be trapped in situations where they can't get out, like Herbert Hoover was where he tried to pass a lot of legislation but as President he was caught by Congress. A President that doesn't try will not get high on this list (Coolidge), a President who does the wrong thing will get demoted (the Bushes), and a President who in the face of insurmountable odds perseveres for the right thing will get very high on this list (Washington, Roosevelt, Carter, and especially Lincoln).

A graph of Presidents by their time and ranking on this list has some outcomes of order. The longest time a top 10% President was in office was President Roosevelt's term. (no two Presidents of the top five served next to each other) The longest time that the top 10% were in office was from 1933-1963. Johnson almost makes the cut, but no cigar. Depending on how future Presidents perform he might someday be in the top 10%. The longest time the top 50% were in office sequentially was from 1933-1981 from Roosevelt to Carter. The longest time the bottom 10% and bottom 25% were on this list was 1981-1993. The longest time the bottom 50% were on this list in light of Obama's decision to target college funding and Social Security means we are currently breaking this record (nice going Obama).

A few notes of what could have happened if history was different for certain Presidents, and my defense for my decision.

• President Obama would rank higher, and until last week he did (I have been working on this for a few years) but after his proposals last week he sunk about 10 places from where he was before. His decision is not compromise, it is a surrender. His largest failure of what I look for in a great leader is perseverance for good, standing for a needed change for a long time.
• President Carter is ranked especially highly because he chose to do what was right over what was easy throughout his term. No other President comes close to his attempts to foster peace between nations and attempts to make America energy independent. I would propose that what makes Carter usually decided to be an undistinguished President are the forces that he was pushing against from foreign oil and when he proposed the best solution to solve an energy embargo against the economy of the United States he was blockaded by Congress which had turned against him in the midterms. While his accomplishments while in office didn't come close to what was needed, he did what he could to do what had to happen to strengthen our economy and bring peace as President. No other President has seen as much pushback as President Carter, and by my criterion of persevering for the right thing whatever the odds Carter gets big marks from me that pushed him to the top 10. Our country needs leaders who are willing to stand against our enemies, foreign or domestic, people or ideas. He earned his Nobel Prize.
• President Lyndon Johnson would be our greatest President on this list if it weren't for Vietnam which was like every war an ultimately unnecessary war. I know support was started by President Eisenhower but the decision to set up the war lies with Johnson sadly. He was the last Democrat to push through major legislation with major compromises (read surrenders) with the Republicans and to effectively wield the power of the Presidency for good (Although Carter certainly tried, he was fighting a force obviously too powerful). I highly recommend the biographies that Robert Caro has put on and am only 2% into the volume he wrote on his time as President and I am absolutely fascinated by how he lived his life to the fullest.
• President Wilson would rank higher if it weren't for his racism and anti-woman views.
• President Theodore Roosevelt would be much higher if he wasn't so expansionist.
• If President McKinley had served longer he would probably be a greater President on the accomplishment front, but was unable to complete his second term which probably would have allowed him to pass some human rights legislation. His greatness lives in his successor, President Theodore Roosevelt.

I am a big fan of the policies of the top 13 Presidents after which my enthusiasm wanes.

So, those are a few of the opinions I have developed after looking at the successes and failures of every American President who served for over one year, which would be William Henry Harrison and James Abram Garfield.

I hope to post in the near future of what a future President would have to do to climb to the top 5 of this list, which is as possible today as it was in 1961, and given our current challenges, maybe more for my criterion of perseverance over large odds.

(Yet) another way to cut the deficit

I was reading about Russ Feingold yesterday and saw that he opposed Medicare Part D. I was interested, why would he oppose a social program? As I read the Wikipedia article for how it works, there is a very important difference between how it works and the DVA, and that is they are not allowed to negotiate for lower drug prices. In Joseph E. Stiglitz's book "The Price of Inequality he quotes Dean Baker that we could save over $50 billion dollars a year, potentially as much as $100 billion per year on health care if they were allowed to negotiate with drug companies on prices.

As I ask with many of my posts, who wins when these decisions are made? The average American who pays taxes and lives an ordinary life loses, but the people who win are the drug companies. As I have said in many blog posts here, there is a clear conflict of interest involved from our politicians in how this decision has been made. By keeping the cost of Medicare high by forbidding it to negotiate with the drug companies to get a better deal we are wasting billions of dollars a year, and this must stop.

The little deficit that couldn't

Paul Krugman recently posted about how people have been moving away from the deficit as an argument tactic.

I feel like I have already said this.

This is a filler post because I wasn't sure what else to write about today, and it is Sunday, and I just like pointing out when the data points toward what I said a month ago, before Krugman caught on. A little bragging never hurts!

Living within our means along with running government like a business

I just finished the Khan Academy course on finance which covered the basics of how companies are run. I highly recommend it for anyone who invests, which should be everyone. While it is called "stocks and bonds" which everyone should understand and isn't that difficult it includes the background of how businesses work and how they start which is very important.

Today I was reading a news article about Washington State's new budget where the Republican Senator who drafted the budget announced that we were "living within our means" which made me immediately think of their claim to want to "run government like a business" which immediately made me think after watching those educational videos "what a bunch of liars".

When people start a business they usually won't have the capital required start a business, so they will take a loan to get their business running to the point where they are self-sustaining. While taking this course and writing notes I looked at companies' balance sheets to get practice and basically every company I looked at had some sort of liability in the form of debt. Beyond that, the reason companies initially go public is to get cash in return for selling part of the company to continue to grow with the promise to pay back the stock if someone sells it back.

The root of the message is, the government can choose to do one of two things, run like a business by making an initial investment that will then pay off, (as we did in the 1930s) or live within their means and only investing what they already have in hand with a religious fervor against taxes which usually means cutting social spending. (which Greece is doing right now) One cannot do both. One would think that Mitt Romney would have understood this given how he was in Bain Capital all these years, but he apparently decided to campaign to the lowest common denominator who doesn't understand how to run a business because they think it is "boring" or "too complicated". But the root of it is, all the Republicans who preach both policies are liars or fools (by talking about something they clearly don't understand) and should be removed from office.

Given a choice, I would much rather see a government with a willingness to invest in its people than a government with a religious belief that they need to cut taxes, which is usually followed by cutting funds to schools and health care which is usually followed by a recession.

Another way to cut the deficit

This is one of the best graphs I have ever seen, and I used to have it on my wall in my room as motivation to get the best education possible.

This graph has a few political implications, and if we assume our goal is to decrease the deficit it tells us to invest in education so that the median wage and tax revenue can increase. If our goal is to decrease unemployment it tells us the same message, invest in education so more people can be working. If our goal is to have the most advanced economy in the world and be the most ingenuitive,  than making it possible for people to specialize and understand their fields at a deep level where they can contribute is the best possible plan.

Basically the right course of action is the exact opposite of what Republicans, and now Democrats, are proposing to do. Regardless of the deficit.

An Open Letter to Joss Whedon

Dear Joss Whedon,

Today I was thinking about Firefly, and like many browncoats felt sad and angry at Fox for ending it so early. I am also perplexed that you chose to bring Dollhouse to people through the same people who killed Firefly, News corporation (aka Fox). I have an idea for how you should bring your next great idea to people around the world.

Youtube. Youtube now offers movies to people I found out today, and their ads can make substantial revenue if it gets enough views. Having your name on something will get many views for certain. By allowing people to watch your shows whenever they want as much as they want they will have to sit through the ads (if the show is 40 minutes long, 4 ads, one at the beginning and 3 placed at cliffhangers) which while it will be a little annoying will make sure that you and the actors who make the show will get paid well. Today people can just download it to their TIVO and while that is a great invention, you get paid only once. By making the show a pay per view many people don't want to pay a frequently obscene price (over $100 for a season of Doctor Who on DVD for example) once will have no incentive to go find it pirated somewhere else, because it will always be available. Movie studios and writers/directors like yourself lose a large amount of money to piracy every year and this is due to the very extreme prices that many fans of the shows can't afford to pay, and it is made so inconvenient to get access to the show that it isn't worth attempting to get legal access and to risk incarceration (because the odds are that the individuals who pirate a show here and there won't be caught). Right now the incentive to pirate is very high. This will eliminate that drain on revenues.

I think this is a real win-win for studios and creators around the world. I am certain I am not the first person to say it, but by taking the power away from corporations like News Corp. to deny content to people creators will be rewarded, everyone will be happier.

First you attack the seniors, then you attack the students, and nobody screams

I just read a summary from CPB on the President's budget for education, and he is going to set student interest rates to the market rate. This is bad for several reasons:

1. Sallie Mae is government corporation, and whatever money they make is extra. They don't need higher interest, and making lower interest is a good idea.
2. Tuition has risen so much at state schools over the past few years that college is becoming increasingly unaffordable. The least the government can do is decrease the interest rate which will save middle class families millions of dollars, but putting the rate at such a risk is a terrible idea.
3. The only motivation I can see to tying Sallie Mae interest rates to the market rate is that it will now be easier for large banks to steal a significantly larger share of the student loan market, by offering "discounts" which people will flock to. If everyone uses private banks than it will make it easy for Republicans (or as seems more and more likely, Democrats) to attack and dismantle Sallie Mae.
4. Eliminating Sallie Mae (which currently gives decent interest rates) and forcing people to go to banks which might then raise their rates for students will give a lot of free money to the big banks that practically own our government.

The Democrats ran last year on a platform to defend the middle class, it was practically the theme of their national convention. "Trust us, we are the defenders of social security, the givers of Medicare and affordable education" yet the past week has seen the Democrats leading the attacks on both education and Social Security.

If there ever was an appropriate time for a third party that represents the interests of average Americans to appear, the time is now.

BEDA 2013 post number 10!

Social Security, the imaginary crisis.

I am offended that President Obama is attempting to cut Social Security benefits by changing the way that inflation is calculated. I volunteered for my local representative's campaign (Democrat), supported my new governor (another Democrat), and have followed the President like every other political junkie. He got my vote last year, and right now I think I should have voted for the Green Party.

The numbers for Social Security don't match the rhetoric of the Republicans, or now the Democrats. Social Security has run a surplus every year that it has been in place and if the cap for social security income was raised and we made it a national priority to get more Americans to work (the percentage of Americans actually working is now less than at any point since the 1940s) which will strengthen our economy, social security, shrink the deficit, and many other things that need to happen. The Democrats are falling into the corporatists trap now. Thinking back over my knowledge of American history, the last time the Democrats passed a massive bill that created real reform that made our country better was in 1968, when my parents weren't even in school yet, which was the Civil Rights Act. Every bill the Democrats have pushed for since then has been weakened before it hits the floor hoping that the Republicans will vote for it "as is" (haha) after which the Republicans dilute the bill even more, slash taxes, slash spending (except our massive corporate income tax breaks for large corporations) and our country is the worse for it.

I have a real historical example for why governments need to boost employment in recessions. When President Franklin Roosevelt was President the economy improved from 1933 to 1937, when the economy shrank, and than increased after his second New Deal came into place. In 1937 the President and Democrats decided to focus on the deficit, after which the economy took a short tumble, until President Roosevelt got his second New Deal in place which helped the economy grow until it became a war economy. Once the changes in his reforms took hold which took some time, unemployment dropped before World War II even began. Source

Obama should not attack social security by trying to fix what isn't broken, he is doing what President Franklin Roosevelt did right now by abandoning his base in 1937 afterwhich the economy will suffer if we take that money out of senior's pockets and increase Social Security's surplus  which is bad because that money won't be in the economy helping people. When and if social security runs a deficit, the first thing is it has over $2 trillion worth of treasury bonds to cash out, so if it ran a small deficit it wouldn't be a problem for a long time.

If the government chooses to increase revenue as opposed to tap into the vast reserve of cash that has accumulated over 70+ years that is reserved for Social Security it could last for a while without changing anything (it is a complicated analysis because it is dependent on state of unemployment, wages, distribution of wealth, etc.) which wouldn't mean immediate doom, and there have been times in past where Social Security ran a deficit from 1975-1981 and nothing terrible happened. The easiest way to increase the amount of money Social Security makes would be to increase the cap that taxes are paid on, which could cover the deficit given our current distribution of income for a very long time. The alternative is to present more incentives for businesses to hire people which would reduce unemployment payments from the government and increase social security payments to the government. Given our unemployment crisis right now as a country this is my preferred approach, and that it would be sustainable assuming nothing drastic changes (like a stock market run which creates layoffs followed by a depressed economy like happened in 1929 and 2008).

Blog Every Day April 2013 post number 9

BEDA 8: A historic day for the Senate

Today, April 8 2013, was a historic day for all Americans. On this day in 1913 the 17th amendment to the Constitution was passed which made it so that Senators were elected directly by the people they serve, as they are today. Before this date Senators were elected by the state legislature of their state, and it set a system where it didn't represent the people but the moneyed interests.

I am glad that the Senate is elected by the population albeit its problems with unproportional representation by the people which overrepresents Wyoming and underrepresents California by their population, and with only two senators elected in that way it will never be possible to get a serious third party voice into the Senate, and that with only two senators any vote for our two dominant  parties between 25% and 74.9% means that the Senate of that state should proportionally be 1 Democrat and 1 Republican to represent such a large population equally, which if implemented would cause never ending deadlock. An imperfect institution by any measure based on these major problems.

But given the choice between a state legislature voting on senators or the people voting directly, this system is preferable.

Blog Every Day April Post number 8

Study your history

Seriously though, most of the mistakes we are doing today are repetitions of mistakes our ancestors have made. There are a lot of huge similarities between today and the Great Depression, and our leaders don't seem to understand that in their religious zealotry for Milton Friedman. They are repeating the same mistakes that historical figures have made, namely Andrew Mellon (head of the Federal Reserve from 1921-1932), Herbert Hoover (US President, 1929-1933), and Heinrich Bruning (Last Chancellor of the Weimar Republic 1930-1932). Besides being contemporaneous, these three fine gentlemen (at least they would be if Friedman's guesses were correct, you need some evidence to make a theory, so I will call his writings guesses) followed the assumptions of Milton Friedman while they were in power, before they were replaced by Keynesians in the United States and Nazis in Germany. They desired a limited role for their governments and central banks to play in stimulating their economy, firing of public workers and decreasing wages, and cut government spending. If Milton Friedman was correct, the great depression would have never happened or would have finished before 1933 under their policies, because they did exactly what he and similar guessers would have them do. I hope I don't have to mention that did not happen.

Unfortuntately for the libertarian/Republican/CDU/pseudo-economics etc. movement, this didn't happen. The policies of Mellon, Hoover, Bruning and others with the same mentality led to the worst economic crisis in history. GDPs fell, wages fell, unemployment rates rose, everything that Milton Friedman says wouldn't happen given the situation did. Why do we want to emulate these three crooks?

President Obama, Chancellor Angela Merkel, Prime Minister Stephen Harper, Prime Minister David Cameron, Chairman Ben Bernanke, President Jens Weidmann, President Mario Draghi, Governor Mervyn King, Secretary Jacob Lew, General Director Christine Lagarde, and Speaker John Boehner, if you people value your legacies, please choose the right path, proven economics over unproven speculated pseudo-economics. Every single one of you has been choosing to emulate the three people I mention above, and you are all doing close to what Milton Friedman would tell you to do, either through austerity or not fighting hard enough for proven economics. Fortunately you aren't doing the last major part of the policies of 1929-1932 which was the shutting down of the global market through tariffs, which created economies that approached that of modern North Korea which is the only country to currently pursue self-sufficiency, but you have managed to do every other important policy that set the great depression in motion and kept it going those four horrible years!

I don't consider the monetarist theories valid economics because they have absolutely no proof for their claims and every single time their ideas have been done the countries that try them have been worse off in the end with higher unemployment, lower GDPs, and other major failures of the global economic system. Please switch to scientifically proven Keynesian economics as soon as you can, because the people of the world need to have a system that works, and we don't have the time or patience to disprove Milton Friedman yet again. Nobody wins with your system in the end, not even the banking crackpots who tell you to do this. We need a system that works now!

Our unemployment is at a 30 year low right now in America, don't make it go any lower!

This post was inspired by Gerald Silverberg, an economist who is willing to do the legwork and prove things before he says them. If only Milton Friedman did the same the world would be a much better place.

BEDA post #7

United States v. Windsor

US v. Windsor will be finished at the end of today, and before it is done I want to present my prediction.

The Supreme court will approve gay marriage across the United States and strike down discriminatory laws for the same reasons they struck down the bullshit Jim Crow Laws back in the 1960s and passed Lawrence v. Texas in 2003. It will be a 7-2 decision, the people who will support the decision will be Kennedy, Ginsburg, Breyer, Roberts (he has argued in favor of gay rights before), Alito (who was an advocate for legalizing sodomy and argued against employment discrimination), Sotomayer and Kagan, and those who are opposed will be Scalia and Thomas. I base this on their histories of voting and their personal philosophies, being mostly libertarian, this outcome is likely. Given the jurisprudence and history of the Supreme Court cases given gay rights and human rights at large this is likely.

They will overturn Section 3 of DOMA and they will give rights to all married couples in the United States for the same reason that they overturned Jim Crow Laws in Brown v. Board among other very important decisions that overturned local laws because they were counter to the United States Constitution.

One place where the decision they will make is not completely clear to me is whether the State Constitution amendments which say that gay marriage is illegal is unconstitutional under the 14th amendment 2nd section's equal protection clause. I could understand the argument stating that is illegal, and if that isn't illegal than how could the state rights that were curtailed under Brown v. Board be considered valid? The only valid decision regarding these state laws based on jurisprudence would be to invalidate these laws because they run counter to the 14th amendment 2nd section, or throw out that crucial part of our constitution. Whether the states must perform gay marriage should be done under the same jurisprudence which was done in the 1960s with interracial marriage.

On this issue I feel optimistic that the Supreme Court will make the right choice to recognize gay marriage at the Federal level, looking at the history of each Justice's opinions over the years.

This month I am doing one blogpost every day, BEDA, Blog Every Day April, as inspired by Hank Green of the Vlogbrothers. DFTBA!

Venezuela-American relations

America's relationship with Venezuela is... complicated. Venezuela currently holds the largest depository of proven oil in the world, and their government doesn't want our oil companies taking their oil, but want to use it for their own national development. This causes tensions, as America's politicians who routinely receive large donations (read bribes) from the oil companies that want to tap the largest proven oil reserve in the world. Venezuela is in a unique position that their late leader Hugo Chavez was a populist, with the goal of protecting Venezuela's natural resources for Venezuelan companies. This caused massive tensions between the government of the United States and Venezuela. Since President Theodore Roosevelt, the United States has mostly pursued an expansionist foreign policy not of military ends, but of economic. When we controlled Cuba under their pre-Castro dictators (let me be clear I am no fan of Castro, he was a dictator by any measure) we had access to large plats of land that we farmed, and controlled our economic interest mostly through military means. Venezuela and the United States have a similar interest in one another, and from the discovery of oil in 1908, which developed strong relations between Venezuela and American oil companies (represented by our government) which for 90 years was a very important source of revenue for our government. In 1943 they set up a 50/50 split with American oil companies which gave immense wealth to both American oil companies and the Venezuelan government.

2001 was a crucial year for the disintegration of Venezuelan-American relations because President Chavez declared all oil in Venezuela property of the state, as in not property of American companies. This means that the American companies that formerly owned and operated oil in Venezuela can't anymore. Oil companies have immense influence in several important ways, first of all they regular give campaign donations to our elected and appointed government officials. (which is often referred to as lobbying, which I personally refer to as bribery) President Bush of course made his fortune in the oil industry, which means that his company and the companies fellow oilmen in his cabinet lead/led (Condoleeza Rice was on the executive board for Chevron, among other high-profile connections) lost billions of dollars in assets in Venezuela with the Venezuelans seeking control over their own economy. This is what turned our relations sour. The second way that oil companies greatly influence our country is through popular perception, and I would bet that they have connections at some level. Corporate America is a very complicated mixture of companies and looking at who is on the boards of directors of different companies I find a lot of people will be on different boards. I didn't find any clear connection between the large companies that own American media (which are News Corporation, Disney, Comcast, and National Amusements) but I did find many connections between them and people on the boards of large financial institutions. Here the skeptical investigator reaches a question... is this enough evidence to become convinced there is a clear conflict of interest between the four large channels and reporting on Venezuela given its complicated connections to the oil industry? Oil is one of the most profitable industries in the world, and if a bank wanted a great industry to make a killing in, a large market would be oil. Looking at the list of people who are on the boards of directors of companies that are available, it is easy to see that many people who lead these massive companies are members of multiple boards, and many investment banks are represented. Looking at large corporations, here is a very small sample of the fortunes of oil in Fortune 500 companies:

1. Berkshire Hathaway has an interest in cheap oil through their subsidiary Lubrizol
2. Chase bank played a big role in financing Enron
3. One needs to look no further than the list of major holders of Exxon Mobil where one can see a number of large banking institutions.

With all of this evidence, it is hard to not be convinced that there is a major conflict of interest between the major news broadcasters regardless of their political alignment and their desire for the largest proven oil reserve in the world... It is quite damning in my opinion. This is enough information for me to conclude that there is enough evidence showing a clear conflict of interest in the foreign reporting of all major corporate American broadcasters.

No wonder American-Venezuelan relations are so poor.

Predictions for the next 2 years in gay rights

OK, now to go off on a limb.

As of today, 51 senators approve gay marriage. That number is only going to go up for two reasons: people know that gay marriage is going to happen, and I expect the Republicans are going to lose seats in 2014 and 2016 (by which point it hopefully won't matter).

Right now as I write this Wikipedia lists 177 representatives who support gay marriage. There are currently 24 Democrats who haven't announced their support of gay marriage. Assuming the Democrats get on board and the President uses his bully pulpit like President L Johnson that number goes to 201. That means to get legislation passed before 2015 we need to get 16 more Republicans to get on board with gay marriage, a hard task. It might happen but I seriously doubt it will. If the Democrats win the election next year there is no turning back, gay marriage will pass both houses.

There are a few states I expect that will change their laws over the next two years before Congress acts. I anticipate Hawaii, Oregon, California, New Mexico, Colorado, Iowa, Minnesota, Wisconsin, Illinois, Michigan, Ohio, Pennsylvania, Delaware, New Jersey, and Rhode Island have the potential move closer to marriage equality. If I am right in half of these states the number of states with marriage equality will exist in 16 states.

Gay rights will be a major issue in next year's elections which are extremely important. If the Democrats pick up only 16 seats, which in a previous post I argue is likely, than I will be very surprised if gay marriage is not respected nationwide by 2016. It may not be popular in many states, particularly the south, but neither was the Civil Rights Act! I am extremely optimistic that gay marriage will have equal footing nationwide very soon.

How the Democrats will win

We have another year until the next election for Congress kicks off, so now is the time for the Democratic party to build an honorable track record to defeat the Republicans next year. The Democrats need to pick up 17 seats and lose none in order to win. They need to play strong defense and specific offense in districts that are at risk with people who have good strong legislative track records at the state level to beat the Republicans.

The following seats and Congresspeople are at risk, according to the election rankings and Cook PVI (Any PVI Republican of 5 or less, or any Democratic PVI that has a Republican representative):

1. Arizona's 1st district
2. Arizona's 2nd district
3. California's 7th district
4. California's 10th district
5. California's 21st district
6. California's 25th district
7. California's 31st district
8. California's 36th district
9. California's 49th district
10. Colorado's 3rd district
11. Colorado's 6th district
12. Florida's 2nd district
13. Florida's 7th district
14. Florida's 10th district
15. Florida's 13th district
16. Illinois' 6th district
17. Illinois' 13th district
18. Illinois' 16th district
19. Indiana's 2nd district
20. Iowa's 3rd district
21. Kansas' 3rd district
22. Kentucky's 6th district
23. Michigan's 1st district
24. Michigan's 3rd district
25. Michigan's 4th district
26. Michigan's 6th district
27. Michigan's 7th district
28. Michigan's 8th district
29. Michigan's 10th district
30. Michigan's 11th district
31. Minnesota's 1st district
32. Minnesota's 2nd district
33. Minnesota's 3rd district
34. Minnesota's 6th district
35. Nevada's 2nd district
36. Nevada's 3rd district
37. New Jersey's 2nd district
38. New Jersey's 3rd district
39. New Jersey's 5th district
40. New Jersey's 11th district
41. New York's 2nd district
42. New York's 11th district
43. New York's 19th district
44. New York's 21st district
45. New York's 22nd district
46. New York's 23rd district
47. New York's 27th district
48. Ohio's 10th district
49. Ohio's 14th district
50. Ohio's 16th district
51. Pennsylvania's 3rd district
52. Pennsylvania's 6th district
53. Pennsylvania's 7th district
54. Pennsylvania's 8th district
55. Pennsylvania's 15th district
56. Virginia's 2nd district
57. Virginia's 10th district
58. Washington's 3rd district
59. Washington's 8th district
60. Wisconsin's 1st district
61. Wisconsin's 6th district
62. Wisconsin's 7th district
63. Wisconsin's 8th district

The following seats are potentially at risk for the Democrats assuming that third parties don't run because of our voting system, these are seats where Democrats won but got less than 52% of the vote:

1. Arizona 1
2. Arizona 2
3. Arizona 9
4. California 7
5. California 36
6. California 52
7. Connecticut 5
8. Florida 18
9. Illinois 10
10. Massachusetts 6
11. Nebraska 2
12. Nevada 4
13. New Hampshire 1
14. New Hampshire 2
15. New York 18
16. New York 21
17. North Carolina 7
18. Pennsylvania 12
19. Utah 4

Basically, the next election looks really good for Democrats. If both parties lose their close seats, than the Democrats will be up 44 seats. This is due to a lot of very close districts for the Republicans. Given that the Republicans follow Democrats in most polls, it is likely that the next election could be very good for Democrats, Hispanics, and gays.

Electricity, cars, and mass transit

I am looking at the cost of energy today and thinking of how to bring down the cost of energy so that America can attain energy security at a low cost. I am looking for domestic use, business use, automobile use, and mass transit use are the four major uses of energy I am concerned about. I have found some interesting information on this.

The root of energy is how do we produce electricity and how do we bring down the cost? I found this information which gives the cost of electricity per state in 2010: http://www.electricchoice.com/electricity-prices-by-state.php

The first thing that caught my eye is it looks like a population map. States with high populations and high population densities (like Rhode Island) have more expensive electricity than states, with only a few exceptions. No correlation between geography or political stance is apparent at a glance. This implies that demand has a large impact on the cost of electricity, score 1 for Keynes, score 0 for monetarists. The first that caught my eye is Nevada. Nevada has one of the highest rates in the nation looking at this map yet is one of the smallest states. I found that more than 2/3 of their electricity comes from natural gas. One must wonder whose energy problems will be solved through natural gas, surely not the average American! I look at Washington, Oregon, Idaho which are three of the cheapest states and see that they have very low rates, and we get most of our electricity from hydroelectric dams which follows research that shows that hydroelectric is not just sustainable but inexpensive. Texas is not as high as one would expect, an it looks like they have a diverse portfolio with most natural gas and coal according to http://www.texastribune.org/texas-energy/electric-reliability-council-texas/why-texas-is-using-more-coal-wind-and-less-gas/ which could explain why they pay more than their neighbors. New York pays more than any other state in the nation except Connecticut. I am having some trouble finding reliable information on where their electricity comes from, but this might explain why, they are completely deregulated. You are never going to have a lot of electricity providers in one area, and without government regulation it is apparently harder to get accurate information. Also, there will never be a perfectly competitive market for electricity unless if everyone started putting solar panels on their roof, which is unlikely given misinformation and lack of marketing of next-generation solar panels. Illinois is another state I am looking at and I found that Illinois is completely unregulated which follows a trend I am seeing. In the county I live in we pay far more than the county next to us. Why is this? We both get our electricity from Bonneville, we are only a half hour drive away from each other, but the county I live in gets its electricity from a private company based in Australia and my neighboring county has a public utility that maintains their electricity. Their service is just as good (if not better) and their rates are far lower. The graph I shared shows I am starting to see a clear correlation that the most important part is controlling monopolies that provide a public good that people need to live in civilization without seeing rising costs above the rate of inflation. This probably explains why West Virginia paid 6.63 cents per megawatt while neighboring Maryland pays 11.77 cents per megawatt in 2010. One reason I suspect Washington pays less than Oregon is we have regulations on private utilities for their rates while Oregon does not. http://www.publicpower.org/aboutpublic/staterestructurlist.cfm is an excellent resource. West Virginia pays the lowest rate in the nation, and have price controls.

Phew, so that's the information I can find on why we pay so much for electricity in some places but not in others, which reinforces my opinion that we need to have public power with regulation to prevent private monopolies from jacking up the price of electricity, which they can when there is no regulation as we see in New York, Illinois etc. After dropping the price of electricity we need to look at producing energy for mass transit and energy for private cars etc. as a national security concern. Experts are looking at producing hydrogen at lower costs, and the DOE is looking into decreasing the cost to make our transportation fuels domestically available. Once the technology to cheaply produce hydrogen is available, which I expect and hope for in the next 7 years, then it will make sense to move over to hydrogen for our fuel of choice. We need to make it domestically producible at the station that will dispense which will cut the cost and create economic growth for all Americans by decreasing costs. I don't see a system where hydrogen will be trucked into stations, but I do see a system where the station will produce it on site eventually, which will further decrease costs by making stations compete with each other driving the cost down. This will be good for the American economy. Some people who drive mostly short distances may choose to get an electric car with a limited range, and having a plug-in electric/hydrogen hybrid makes a lot of sense to conserve hydrogen so people don't have to refuel as much (I frequently drive a Prius and it doesn't have to be refilled as often as any other car I have been in.) which is good for everybody. As these cars become older and more available the prices have dropped substantially which I expect they will continue to do.

Then it comes to mass transit. First, it makes sense from an efficiency standpoint to heavily invest in AMTRAK and local light rail, according to the DOE. By decreasing the cost of electricity the cost of mass transit that runs on electricity will drop. I see no reason why we couldn't adapt a fuel cell on a train once we have decreased the costs of attaining hydrogen in a useful form which then would decrease the cost of running a train, and there is no reason they would be limited to 55 MPH which most AMTRAK trains currently go at, but could go fast enough to be competitive with the freeway. By making railways public we would decrease costs for AMTRAK and allow freight train companies to compete with each other which will bring down the cost of freight, reward companies for being ingenuitive (which they have little reason to now given how trains are the least expensive method of transportation when done right) and make our economy better. It would allow smaller freight companies to enter the market (like the trucking market) which would be good for the American economy, and allow each company to go anywhere they want to. They would be regulated like trucking companies in that they can go wherever they want, they just have to be licensed for a reasonable fee per car so that the railways can be maintained by AMTRAK which will absorb that duty. The licensing fee will go directly to AMTRAK operations. If another train company formed to compete with AMTRAK for passengers than that would be legal, albeit unlikely because AMTRAK will hopefully be maintained in such a way so that they won't be able to get a substantial market share because AMTRAK will be well maintained. AMTRAK releases a report every year reporting on different aspects of their business, and it runs a deficit every year. Good news is that ridership for AMTRAK increases every year, so it is possible that in the future AMTRAK might be able to make a surplus with good management in the near future. None of the expenses I see seem to be extraneous. I have a few ideas on how this can be fixed. AMTRAK ran a deficit of $1.342 billion in 2011. In 2012 it ran a deficit of $1.239 billion.

1. My first and second points of this article will decrease the costs of running trains and decrease AMTRAK's vulnerability to rising fuel costs as they report in their 2011 report.
2. Due to the politics of this country, we need to move towards a system where AMTRAK can operate without additional government funding, and ideally towards a surplus that can be reinvested to improve AMTRAK service. Making faster trains that get people to places faster than driving will be key to increasing revenue so that people will decide to take AMTRAK for longer trips (like Seattle-Portland, San Francisco-Los Angeles, Dallas-Houston etc.) that will increase revenue through ridership.
3. Make the regulations on AMTRAK reasonable so that there are no extraneous costs that hurt the country.
4. In 2011 they had 30.2 million passengers, who paid AMTRAK $2.15 billion which equates to an average payment of approximately $71 per passenger. It would take an increase of 22 million passengers paying this average for AMTRAK to break even, or an increase of 60,000 passengers per day to break even. An average of 82,000 passengers rode AMTRAK every day in 2011, so this means an increase of 73% is needed to make AMTRAK profitable. The easiest way to do this would be to make services more efficient and faster to increase ridership.
5. Looking over a four year period, 2008 through 2011, a few things become clear, the deficit has risen by $200 million.
1. Passenger related revenues are at an all time high and it reasonable to expect them to grow, rising by 10% over the past 4 years (2.4% annually). This will close the gap eventually if the trend continues.
2. Commuter revenues are steadily increasing.
3. Interest expenses are decreasing, this will help decrease the gap.
4. Salaries, wages, and benefits are most of the increase at $322 million, but if AMTRAK lays people off it won't be able to function, so this is not the answer to their problem.
5. Fuel, power, and Utilities dipped during the recession but are rising again, this is one big risk to AMTRAK.
6. Material costs rose by $9 million or 4.5% of the increase in the deficit.
7. Facilities dipped in 2011 after a three year rise, or 15% of the increase in the deficit.
8. Advertising has increased as an expense, but it is not clear how much this has helped ridership, and contributes to 10% of the increase in the deficit.
9. Casualties decrease as a cost every year.
10. Depreciation has increased by $100 million or 50% of the increase in cost. If AMTRAK is going to grow depreciation has to increase, so this also isn't the answer to the problem.
6. Buying new trains and periodic replacements will decrease depreciation costs. http://www.amtrak.com/ccurl/778/373/Amtrak-Covers-88-Percent-of-Operating-Costs-ATK-13-022.pdf
7. The services with the highest operating loss mostly serve the Western part of the United States. Investment is needed to ensure that a large number of western trains can decrease their lost revenue in order to improve their profits. This can be done by investing in new trains which although that will take a lot of money in the beginning, running faster trains on the long western routes will probably increase ridership which will be good for both environmental and economic reasons for this country.
8. 2012 saw a massive change in the amount of revenue AMTRAK was able to cover. In fiscal year 2011 AMTRAK made $2,152,020,000 from passengers, but in 2012 AMTRAK made $2,269,167,000 which is a substantial increase. 2012 also saw AMTRAK's deficit decrease by over $100,000,000 which is substantial. Things are looking good. Hopefully this change from operating in a larger deficit every year but a diminishing deficit not be a blip but a new trend for AMTRAK towards an eventual surplus that will allow them to not require other federal funds to operate, which could be cut at any time by the federal government.

An important point in the necessity of AMTRAK is that access to intercity buses has diminished rapidly in a large number of states over the past decade. This gives AMTRAK new areas where it can move in and make revenue. Their Five year plan doesn't agree with this, but it is possible that they could with some reasonable investment get the increase in ridership they need. I feel confident that by continuing to increase in new trains to increase speed AMTRAK will increase ridership which will turn the deficit into a surplus.

Source for Amtrak data, along with Audited Consolidated Financial Statements

This is being done right now. The future is bright.

After making AMTRAK sustainable and more convenient (for I don't think there is a choice between the two) we will need to increase investment in local mass transit systems. This will have two major effects on this country. First, there will be less traffic congestion in major cities which is a major drag on our economy. Second, people will be able to do entire trips using self-sustaining mass transit which will increase the options for tourists in this country whether they are citizens or foreign tourists. This is good for America.