Wednesday, October 30, 2013

The early 1980s recession, a non-apologetic summary

I'm working on another post when I started looking at the 1980s recession. My primary reading is Wikipedia which is pulling from the CBO (since I don't want to spend hours doing this project).

The recession began in January 1980 by GDP growth which was quickly reversed by an expansionary economic policy by President Carter and the Federal Reserve which moved the economy back to above-average economic growth. When President Reagan got into office the unemployment rate had stabilized and the economy was growing until August 1981 when the Reagan administration arrived and the interest rate jumped to record highs. The economy entered recession until late 1982 with this policy unemployment hit its highest post-World War II levels peaking at 10.8% (0.8% higher than October 2009, the peak of the last recession). The short way to put this is they did exactly what Keynes would say not to do and the response was exactly what Keynes said would happen. They then reduced the interest rates and raised taxes in 1982 during the worst point of the recession. and the unemployment rate collapsed and growth was restored, exactly as Keynes predicted.

Shame on the Keynesians who didn't point this out and boast in the early 1980s, but if we are to blame anyone we need to blame the Democrats for not making this failure of policy which really disproved laissez faire and proved the efficacy of Keynesianism in the most effective way (trying both solutions and finding normal results) a major tenant of the 1984 election which both the economists and politicians of the day failed to do.

The 1980s should be seen as the triumph of Keynesianism, but since there were clearly no great economists in that era a golden opportunity to make some amazing papers on what types of policies should be practiced in different times. This needs to be public knowledge, and the policy that Reagan did that really brought the economy to recovery was Keynesian policies. It is unbelievable we took this recession as proof that neoliberal policies work because we should take the exact opposite meaning out of it.

Reagan's tax policies of the era:

Sunday, October 27, 2013

Where do we go from here? October 2013

Right now the United States is potentially in a major shift of political power that will change the future considerably. If the President plays his cards right he can make the Republicans' opposition to Obamacare doom their party from ever being favorable to a majority of Americans outside of some backwards welfare filled trailer counties, mostly in the South.

Obamacare is rising in approval and could potentially see its approval rating be positive (more positive than negative) if the Obama administration implements the law well. source Ideally the Obama administration can fix the problems seen over the past few weeks and show how having a public marketplace to compare rates can save people money. This will bring people closer to Obama when they see how it works once the bugs of are fixed. Next time we will hopefully use public employees next time. Why are we employing contractors from health insurance companies to design a site whose purpose is to lower the cost of health insurance?2 It seems like a conflict of interest for the company.

We can move towards a more stable economy with more progress than any other nation in the world if we play our cards right right now, and I think President Obama has the responsibility to push our country in that direction. If President Johnson could push the Civil Rights Act through Congress with practically half the country opposing it, than Obama (as one of only 17 presidents to win an average popular vote of over 50%, 21 presidents who were elected did not win such an impressive margin. The last president to win an average above 50% was Ronald Reagan.) can push through more legislation like Obamacare. It was a major issue in 2012 and over 50% of Americans said yes.

If I were the President I would make large moves to push the following through:
  1. Make more moves to make immigration laws humane and expand opportunities to work visas for farm workers. Obama could build a coalition with farmers on this issue so they won't have to hire illegal immigrants to get enough workers for their farms, which could change the composition of the House and Senate in next year's elections and change the governorships for some more conservative states potentially if he makes it a major issue. If Obama and the rest of the Democrats make moves so farmers would be able to fill their work positions with legal workers from Mexico it will make a significant difference for our economy. As their representatives fight against this the Democratic Party can offer an alternative that is good for small farmers. This should be along with the Dream Act, which is supported by 70% of Americans. This alone will make a huge difference in how people vote in future elections. This issue will help cement voters in Texas which could be a major game changer for the political landscape of America.
  2. An overwhelmingly majority of Americans support background checks for guns. This can be a major wedge issue the Democrats will win on.
  3. He should stump for a lot of Democratic candidates in Texas in the next house election because this could change the entire political landscape of America. source
  4. Make sure the continuing rollout of Obamacare is as good as possible as soon as possible. This will help people get better health coverage and debunk the self-proclaimed major tenant of the Republican platform as it demonstrates itself to be better than predicted by FOX News.
  5. Push for more student aid as opposed to loans, which will help everyone who is in college, and make it so parents of students could change their decisions on how they vote as the Republicans push against help for students as they try to give larger bonuses to the banks that bankroll them. When the Republicans push against it it will help get college students voting by giving them an issue that will help motivate college student to vote Democrat. Hopefully a good number of grandparents will think about who is serving their interests.
  6. He can cement support in cities by pushing for more mass transit and making it a major policy initiative of the Department of Transportation if the Republicans win. This will help local economies by improving opportunities for commuting. This will further cement support of people in large cities and help them see the parties as being diametrically different on these issues.
  7. The major issue that the Democrats have not addressed so far is the drone strikes in Yemen and Pakistan that more and more have been demonstrated to hurt civilians more than terrorists, which is absolutely immoral and a war crime. If Obama ends the drone strikes he will gain back the respect of left-wing Democrats and help improve turnout in the next election by cementing the support of his base. He needs to do this soon. It will help our image abroad considerably too, which is something that always helps our influence abroad and needs significant help after a long time with diplomacy being on the back burner and some major failures abroad.
Of course, if the Democratic Party makes these seven issues even more important tenants of their platform they will need to follow through in 2015, If they win the election and don't keep pushing for what they fought for in the election they will contribute to people's apathy towards politics and belief that both parties are identical, but if they actually make movements to improve the country they will be the dominant party and we could surpass Europe in standard of living which would be amazing.

There is a lot at stake here too, here are just a few reasons why I think the Democrats are better for America's future:
  1. There are disturbing racist undertones and overtones to the Republican fight against immigration.
  2. The Republican opposition to gay marriage is immoral.
  3. Republicans over the past two years have put everything into fighting Obamacare and the status quo for American medicine has given worse results at higher costs for Americans than other nations. We deserve better.
  4. Mass transit is critical for our economy to grow and the Republicans have damaged our national infrastructure. If I wanted to kill a country's economy, my first target would be infrastructure.
One last thought is that when I look back in 20 years I expect that most people will see the Republican Party's demise as a self-inflicted wound.

Saturday, October 26, 2013

Real statistics on cell phones and driving compared to other issues

The percentages used in this paper are the probability of a single individual being involved in one of these scenarios, so the number of incidents/American population (310,000,000 with two significant digits).

385 people (1.2x10^-4% of Americans) die every year from accidents involving cell phones (not necessarily being caused by cell phones). 21,000 people (6.8x10^-3% of Americans) were injured in accidents involving cell phones (again, regardless of whether they were the actual cause). 660,000 people (0.2% of Americans) use a cell phone at any point in the day.

So, 385/(660,000*365) is an incidence rate of 1.6x10^-4% chance of being involved in a cell phone related death while using a cell phone while the chance of being struck by lightning is 1.4x10^-4%. The probability of being in an accident where the driver is using a cell phone is 8.7x10^-3%, . But since that first number is far higher than the real probability of being caught in an accident since it is not a daily rate but any point in the day. It is probably closer to that number divided by 16 (assuming we sleep for 8 hours in a day) yields a more likely rate of being caught at 1x10^-5% which means you are more likely to be struck by lightning than to have your use of a cell phone lead to a fatality. The chance of an accident is 5.4x10^-4%, only 5 times more likely than being struck by lightning.

These numbers are not very significant when compared to other problems. 40,000 people or 1.3x10^-2% of Americans die from antibiotic resistant bacteria every year, over 10 times the probability of being injured, and over 100 times the probability of being killed in an accident involving (but I must stress not necessarily being cause by) a cell phone. 11,078 people were killed by firearms in homicide in 2010, 3.6x10^-3% of Americans, 30 times the number of people killed in accidents involving a cell phone. 17,500 people died from from AIDS in America, 5.6x10^-3% of Americans. 38,285 people died from suicide in 2011, a rate of 0.012%, 1000x the probability of dying from an accident involving a cell phone. Kidney disease killed 45,731 people in 2011, 0.015% of Americans. There are 8 more causes higher than Kidney disease. The number one killer was heart disease with roughly 600,000 deaths in 2011, or 0.19% of Americans, over 10,000x the probability of dying with a cell phone.

We love to think cell phones are dangerous, that they kill people with cancer, accidents, and probably Big Foot, and that by just purchasing and using a bluetooth our rate of being in trouble diminishes. However, it just doesn't stack up to other causes of death and the rate of injury doesn't come close to the large killers. There has been a lot of press attention and nothing else is really notable. If we really wanted to make an impact to our death rate we would work on making guns harder to acquire, increase funding to research to reduce the deaths from illness, and cell phones don't even make the radar compared to other causes. I would predict the incidence rate of driving while talking on a cell phone and getting into an accident is not significantly higher with other car activities such as talking with a passenger, listening to the radio, adjusting the thermostat, or other things that you do while you are driving, which means this does not pass the placebo test and the issue should be discarded as a witch hunt.

I don't join witch hunts, and this fear of cell phones is a witch hunt based off of exaggerated data. I just can't get excited on this issue after seeing the data.

Also remember that there is a lot of money to be made with Bluetooths.


Friday, October 25, 2013

Brilliant picture

This picture is from the page "I Fucking Love Science" on Facebook.

The author of this picture is very perceptive, and I can think of so many issues that this applies to. Here are only 2.

  1. Oil
    1. First we think that oil will never run out.
    2. Then we say that it is too expensive and too large for the United States to switch to another source of energy.
    3. We then say we can't focus on it because we are working on defeating communism, terrorism, drugs, or some other war.
    4. We then state that global warming isn't happening, pull out unreviewed papers on "global cooling" and other rubbish trying to excuse the fact that a lot of people are making a lot of money off of oil.
    5. We then find out in 50 years that we have run out of oil and we haven't done the work to preserve our economy in the long-run. I plan on living past 2070, so I will live in a world with no oil. So we will more to natural gas and repeat this cycle when we run out of natural gas (hopefully not).
  2.  Concentration of wealth
    1. We first state that it is inevitable that we will have such an unequal distribution of wealth (The United States has the 5th most unequal distribution of wealth in the world, only Denmark, Switzerland, Namibia and Swaziland have a more unequal distribution. The next developed country with an unequal distribution is Chile.
    2. This problem most likely will have the 2nd through 4th stages at once, claiming there is nothing we can do about it, claiming it is actually good for us, and many other excuses.
    3. In the end it turns out the distribution of wealth has made so many people poor that when they say they want equal opportunities to education etc. it turns society upside down and many large changes need to be made to prevent people from revolting.
I could think of more examples if I really though about it, but these seem to be good enough, and there are more things I want to write about.

Hong Kong as a model of supply-side economics

Hong Kong has long been regarded as an example of the successes of the economics policies of Milton Friedman. As a review, Milton Friedman's laissez-faire school usually has the following points:

  1. Very low taxes, usually as a flat tax.
  2. Little to no regulation on businesses and very low taxation.
  3. In the most pure forms as are being advocated for by the modern Republican Party in America, Conservative Party in the UK, and CDU in Germany (in their European policies) most things should be privatized.
  4. No minimum wage

When I read about Hong Kong however, I find the following:
  1. A Progressive Salaries Tax, along with other Keynesian style taxes, with the one notable exception of no capital gains tax.
  2. Regulations on their stock market
  3. Public health care and public schools
  4. A minimum wage
This is looking very Keynesian too me. They have no corporate income tax but most economists would agree this is a good thing (which is unusual for economists). The reason they are ranked as the most liberal economy is not because of the normal things Friedman proposes but the ability to form a business is the second easiest in the world, and wages in Hong Kong are really high compared to the rest of China (except Macau and Shanghai) which means people have expendable income and there is demand for new businesses. They have a lot of trade going through their port which is a major boost to their economy, and having a large free market is admirable (which both Keynesians and neo-liberals can agree on). But to go so far as to claim that Hong Kong is neo-liberal based on their tax code (which is regressive in the way that it lacks a Capital Gains tax) ignores all the other things the government does.

In one way, Hong Kong is actually the most socialist state in the free world because all land is publicly held. This isn't capitalist to any stretch of the imagination. This is why I think labeling Hong Kong as a neo-liberal example demonstrates a lakc of understanding of how Hong Kong actually works.

If anything, Hong Kong is a great example of how Keynesian economics work very well, as well as Australia, the only developed nation to avoid the 2008 recession.

Sources: Dissent and Wikipedia

Wednesday, October 23, 2013

One simple change

Most of the deadlocks in America's government can be brought back to the rules of how our legislators work at the state and federal level. The one we hear about is the filibuster, but Rand Paul filibustered the bill to do surveillance on Americans but nothing changed.

A lot larger than this is the big doozie of a rule which gives the speaker and heads of committees the power to stop bills from even being voted on. This is why the original budget didn't pass the house last month, John Boehner didn't even let the bill com to a vote, even though it would have passed. This normal rule has blocked so many other bills that people support. The solution is to make it so that bills must be brought to a vote and the leaders of legislatures and committees must let all members vote on passage before moving to the next bills unless a majority votes to table the bill. This will make our government far more efficient.

Electric cars are coming

There is a new technology that has recently been developed to store electricity and it is made of carbon. Carbon fiber batteries are now being made for small appliances and the Swedish manufacturer Volvo has developed an electric car where the sides are carbon fiber batteries.

This is a major solution to two of the largest problems with infrastructure and economics in the developed world and solves the major hurdle to making electric cars a convenient option. The first is how do we reduce and eventually eliminate our excessive greenhouse gas emissions that cause global warming, and this car is carbon neutral. The second is how do we do this in a way so we don't give a handful of countries or companies immense power over the world economy. This solves both major problems and will be the ticket to energy independence that is not dependent on a limited supply of fuel, because it is dependent on electricity which can be produced in many different ways, and unless the sun runs out, the wind stops blowing, the waves stop crashing, or the Earth cools down there will always be a way to get electricity without using coal, natural gas, oil, or another limited resource.

Until now, I have disregarded electric cars as unrealistic given their limited range and long charging times makes old fashioned electric cars a method that people will not choose because they were too inconvenient. Carbon fiber batteries don't have the long charging time problem that old lithium-ion and nickel-cadmium batteries had, which means using electric cars will be as convenient as internal-combustion engine cars in terms of charging. This also means that charging all electronic devices will be better as we move all of our batteries to this new technology. The first phone company that makes a battery out of carbon fiber, besides being more environmentally friendly, will be able to advertise a short charging time.

This is why last night when asked which time period I want to live in my answer was the future, which is going to be awesome.

Wednesday, October 16, 2013

The Temp Economy, why America lost

Every once in a while I see friends talking about working two or three jobs, and over 40 hours a week to make their ends meet. Some people will say this is showing that they are strong and will do anything they have to, and that it is a good thing.

I disagree. A developed country shouldn't require someone working a job that doesn't deal with living organisms like microbiology or agriculture to pull hours that are irregular or over 40 hours a week. Microbiology and agriculture are different because bacteria don't wait for your shift to be at the point you need to do the infection, and no agricultural society works in the middle of the day, they take a break from 11 to 3 because it is too hot to work, and instead work from 7-11 in the morning and 3-7 at night because it is far more efficient and you won't exhaust yourself. If you are working in customer service in any developed society you should be able to work 40 hours a week and have enough to live and a little left over. This means you will be more efficient, you will have enough to spend on non-essentials, and some to save for rainy day and retirement. You will be more valuable to the economy as a consumer than as a wage slave. When people who have the potential to be professionals are forced by their situation to take jobs below their possibility their overall value added to the national economy is diminished, and at a large scale I predict this is having a large toll on Ameica's GDP growth.

Assume ten million people are working under capacity at an average of $50,000 a year and this is a $500 billion decrease to our GDP every year, or Nobody wins.

Hopefully we will transition back to a job where people will have real careers and our economy can improve.

Monday, October 14, 2013

Interesting ad

I just saw an interesting ad on Obamacare from the far-right Heritage Foundation claiming how Obamacare is going to create long waiting lines and lower quality care.

However, this is not true because Obamacare is modeled after the German system (an individual mandate with a public option which was killed by the Dixiecrats) and the German system sees lower waiting times than the United States currently does. They are basing this off of Canada's system but Obamacare is not Medicare by a long shot. We also find with the OECD data that the wait times in the UK (which they are probably also basing their information off dropped by 52% from 2008 to 2010 with the NHS, meaning that the correlation between public health care and long wait times is fallacious.

Also remember that Canadian physicians are mostly private like the in the United States and Germany. Blaming it on having public or private health care is irresponsible.

I really wish organizations wouldn't make claims that are so completely wrong so frequently.

This took me less than 5 minutes to debunk the commercial's central complaint I haven't already addressed with the extremist's biggest fear, numbers.


Canada is working towards making progress like the UK.

Sunday, October 6, 2013

Mass Transit, a followup

In my previous post I started talking about the costs of different modes of transportation, and here I want to elaborate on the type of necessary economic analysis that is needed when making such crucial decisions.

Let's assume we are talking about a city where there are 1 million potential riders in a city and each rider rides an average of 35 miles a day and they will do this 300 days a year. This yields 10.3 million passenger miles. This is the input information and everything changes from here.

Option 1 is to have each person drive themselves. Let's say the average miles per gallon is 30 which is more or less standard for sedans. Some cars will be Priuses, some cars will be SUVs, and it will average out in this example to 30 MPG. The cost per gallon is $3 per gallon (to be generous) and parking is $10 for the whole day (to be extraordinarily generous, I should probably say something over $50 but it isn't necessary for this example). The average person is going to use 1.12 gallon and spend $3.36 on gasoline, for a total cost of $13.36 to get to and from work every day. The total cost to society is $4,008 a year per person and $4,008,000,000 for society. (1,000,000 people * 300 days * $13.36)

Option 2 is to have buses which go as fast as cars. Each bus gets 20 MPG at $3.00/gallon and pays the driver $25 per hour. The bus gets caught in traffic so it takes one hour to go the 35 miles (which is pretty normal for buses). Each bus carries 50 people so you will need 20,000 bus routes per day. Each bus will use 1.75 gallons of gas per route, at a cost of $5.25 per route, which means each route will cost $30.25 for every route. The total cost for this is $181,500,000 million for society, or $181.50 per person. This is a $3,826,500,000 stimulus to the local economy over the course of a year compared to everyone driving. Imagine if you got an extra $3,826.50 in your pocket every year because that is what converting a million commuters to buses does.

Option 3 is to use light rail to cover these distances. The average train costs 20 cents per passenger mile and goes 35 miles per passenger 300 days out of the year for 1 million passengers. This costs (1,000,000 passengers * 35 * $0.20 * 300) $2.1 billion a year in maintenance. The driver of the train earns $25 per hour (to be consistent). The train will go 80 MPH (which is reasonable for such a route) which means it will take 26.25 minutes to do the distance, which means it will cost $10.94 per route for the driver. Each train will carry 100 people which means you will need 10,000 routes per day. This yields a cost of $2,032,820,000 for society which seems like a lot of money because it is. This is why accounting methods are inaccurate. However, this is going to save people roughly 45 minutes per day which means if the average person is worth $20 per hour that saves $4.5 billion for the economy (1 million passengers per day * $20 per hour * .75 hours * 300 days = $4,500,000,000 saved). If you take this time savings into account rail turns from the least affordable to option into a $2.467 billion stimulus without taking into the dollar account for the other options, which in reality is a $6.475 billion stimulus for a local economy. Who wants $6,457 in savings and extra income per year? Opportunity cost makes the difference between being in debt and being rich. If we did this in our hundred largest cities the increase in efficiency will be large enough to significantly raise our GDP.

What makes a mass transit system great?

I've been looking at how different mass transit systems run and downloaded maps to my computer, some of which I will use here to demonstrate my points.
When you look online, you will find lists of "America's greatest cities for mass transit". Some lists have some really good information, and Wikipedia has a list of which cities have the highest levels of ridership.

First, here are the biggest reasons I can think of as a Millennial for why we want to have great mass transit systems:
  1. On the user end, you can do more on a bus or train than you can if you are driving. I can read a book, read the news on my phone, get work done, almost any quiet activity I want. With a car I have to be focused on the road. As long as I am not carrying anything large it really makes no sense to drive.
  2. The user can save a lot money on parking. Parking in New York tonight can range from $10 for an evening to $50 for an evening.[1] As long as it costs less than $5 for me to take the Subway into New York it is less expensive than driving, not including gas.
  3. Parking in cities is a hassle and expensive. If you find the $10 parking lot, it will almost certainly be full because the lower price creates a much higher demand for that parking lot. During big events such parking prices just don't exist. It might be a long way from where you want to be, and all of this means you spend more time and money. Driving in traffic is also frustrating and no fun. Putting 50 commuters on a bus saves a lot of space on the road compared to 50 different cars in the middle of a big city. Everyone wins when there is good mass transit.
  4. Light rail is faster than driving when they are available. If you take a light rail train and run it between two major cities in a metropolis (let's take Los Angeles at 3 million and Anaheim at 300,000 people) and put in an affordable light rail system you can bypass the traffic jam and get people to the center of the city. You can run them frequently, let's say every 15 minutes to start, and routinely fill them. As people find they are saving time and money it will become more popular. Running a train at 80 MPH (140 KM/H) can done while running a bus at 75 MPH (110 KM/H) in the center of a metropolis is impossible.
  5. Light rail is inherently faster than buses. If you run a bus from point A to point B along the freeway and you have stops between A and B, you will probably need to leave the freeway and get back on the freeway which becomes real time lost for a commuter. A train can stop for a short period of time along the track and then start back up on the commuter routes from the suburbs and doesn't have to reenter the freeway. For longer routes, like Dale City to Washington or Fort Worth to Dallas, it makes far more sense to use light rail than a bus.
  6. It reduces pollution which makes the environment more healthy and more pleasant.
  7. More money stays in the local economy as opposed to going to the oil industry, acting as a local stimulus.
  8. It creates local jobs that cannot be outsourced with the people who maintain the fleet of trains and buses, and drivers etc.
  9. Bus rapid transit is an oxymoron. Buses running at rush hours get caught up in the same mess as every other commuter, meaning you save no time and end up with a mass transit system that is doomed because the buses won't run on time and people will choose to drive, meaning that the city will have wasted all of that money on new buses only to find themselves in the same place. Widening freeways will be shared with cars, which will make trips marginally faster, but if people then just go on the wider freeway (because if you take the narrower freeways people use them less even when they are going the same direction) you find yourself netting nothing in the end. If you find that demand is high (if the system is designed well it will be) you need to put on another bus on instead of just putting another car on the train, which is really simple, and the only way to make bus rapid transit to work is to make special roads for buses which don't stop between places and need to be regularly repaved, or just put in a track which doesn't have to be repaved every few years. If the buses are never on time, people with options won't ride them and the system will need constant funding to be poured in or close down. The other problem with Bus Rapid Transit is speed. Running a bus at 150 km/h (90 mph) is really difficult and inefficient. Running a train at 150 km/h however is quite normal for longer distances, and relatively efficient.
  10. A smart system doesn't stop at every house for the long-distance trains. A smart system will have multiple layers, long-distance trains that can pass the congested carpool lanes connecting Washington and Baltimore for example with minimal stops in between, and shorter distance buses connecting stations with businesses and houses.
  11. If the mass transit is faster than driving, people who have more money than time will have incentives to use it.
Those are the best reasons I can come up with, and there are certainly more. The other piece to the puzzle is how you set up the system. If you look at Munich, Cologne (Köln), Berlin, Paris, London, Shanghai, among other global cities you find that they are designed to get people from the outer towns into the center of the city and there are routes carrying people directly in a reasonable amount of time that beats driving in time, and the maps they have are designed to do it. Most of all, the most important routes are few in number, Munich has only 8 major trains, and 8 minor trains serving a metropolitan area of 2.6 million people. The schedules are predictable and go where the people are, so people use them. If they had less frequent service or ran the same 16 trains along routes people didn't live, it wouldn't be nearly as successful. Here are the most important points and a few examples:
  1. The routes must be frequent and the local government must be willing to expand service when needed. Very busy people with more money than time who have cars and can afford to park are not going to rearrange their schedule around a schedule that doesn't fit their needs. Work schedules tend to be very predictable, people go to work around 8 in the morning, and leave around 5 in the evening. People want to get from home to work in as little time as possible for as little money as possible. The routes than must be efficient. If the routes run out before people get off work or are very infrequent around the time, people have no flexibility and will not use it. In Seattle, the Sounder between Tacoma and Seattle only runs at peak times, and not overly frequently either, you then have to take the bus which leaves out other suburbs, which takes the same amount time and serves fewer people.
  2. Don't run buses or trains back to the station with no passengers. If you look at the Sounder schedule from Seattle-Tacoma it only goes at certain times and then goes up empty from Lakewood (south of Tacoma) to Seattle. This is ridiculous and wastes money. Always let the circuit run through the whole distance picking up passengers.
  3. Look at the costs. People frequently look at the upfront costs of installing track (which most cities really don't need when starting) as a way of arguing against light rail. I found real numbers in an easy to read fashion here: which shows as I expected (given Japan, Korea, Taiwan, and all of Western Europe have chosen this) that the real cost of buses when calculated is not as low as people think in many examples and we need to take in all pieces when deciding which is right, beyond the costs of congestion.
The biggest issue is comparing the costs of rail vs. other methods, and this becomes very complicated. I have found good hard numbers that have been researched at the NY TimesAPTA, and this advocacy site. One good source analyzing Britain's spending found that the privatized British Rail is costing far more than roads, but this is in fact due to privatization and costs between 1.5x and 2x that of other European nations. America's costs are close to that of Britain, and we also have private infrastructure. It seems like public goods that are not competitive should be public. The New York Times has pointed out while acknowledging his bias that it is hard to make AMTRAK profitable. The best way to get around this would probably to make the railroads public, because they are public in most of Contintental Europe and they are much less expensive to run The University of Leeds produced an amazing paper analyzing the costs of Finnish and Swedish railways, which like most of economics found the variability was huge and there are ways to make tracks less expensive by upgrading, and I recommend it to people who have time to read a very thorough statistics paper, because some of the ideas could help reduce the costs of transportation here in America, like upgrading the tracks so they don't have to be repaired as often.

The biggest question when designing a mass transit system is whether it will make sense for the community. If it costs 20 cents per passenger mile and there are 10.3 billion passenger miles (1 million passengers travelling an average of 35 miles round-trip 300 days a year) in one year the cost would be around $2 billion to maintain the track. (which is of course extremely rough) When deciding whether to build we need to figure out if the community will receive over $2 billion in benefits to the local economy. If those 1 million people were going to pay over $6.67 for parking for one day ($2 billion divided by 1 million divided by 300), than that alone will be saving the difference for the economy in savings and every passenger will be saving personal money. Another way to calculate is if this saved those 1 million people an average of 30 minutes a day 300 days a year and the average workers is worth $20 per hour than one would be saving $3 billion in opportunity cost right there. Both of these ways of calculating savings can then go to the economy in a better way, without the savings of gas, congestion, worker's time, and emergency services! Looking at the opportunity cost of a situation frequently gives a much different picture than first appears, and it is always more accurate. I am certain this is why European and Chinese cities have done massive investment in their mass transit, because they look beyond the immediate cost when investing in their economy. Because of this, I am not too worried about the costs of mass transit in cities if they are done correctly and people know they exist.

This is a very complicated issue the more I look at it and it is very easy to stop early before bringing all data, shows that the difference between rail costs goes between $451 in Dallas to $124 in Salt Lake City, so making the decision of which is better is highly variable and has to be done on a case-by-case basis. Basically, by playing our cards right we can get the advantages of high speed mass transit in our larger cities which is synonymous with light rail, but only if we choose to.

If we can get the benefits for riders along with the cost savings, there is no reason we shouldn't do it, and this is why we need to have economists who are able to publish excellent studies on this issue where people can find them. If we can save money and lives by reducing congestion, accidents, than we have to. There is a lot of work to be done.

Friday, October 4, 2013

An open letter to the Democratic Party from Rudyard Kipling


A.D. 980-1016
It is always a temptation to an armed and agile nation
  To call upon a neighbour and to say: --
"We invaded you last night--we are quite prepared to fight,
  Unless you pay us cash to go away."

And that is called asking for Dane-geld,
  And the people who ask it explain
That you've only to pay 'em the Dane-geld
  And then  you'll get rid of the Dane!

It is always a temptation for a rich and lazy nation,
  To puff and look important and to say: --
"Though we know we should defeat you, we have not the time to meet you.
  We will therefore pay you cash to go away."

And that is called paying the Dane-geld;
  But we've  proved it again and  again,
That if once you have paid him the Dane-geld
  You never get rid of the Dane.

It is wrong to put temptation in the path of any nation,
  For fear they should succumb and go astray;
So when you are requested to pay up or be molested,
  You will find it better policy to say: --

"We never pay any-one Dane-geld,
  No matter how trifling the cost;
For the end of that game is oppression and shame,
  And the nation that pays it is lost!"

The Democrats have been paying Dane-geld to the Republicans for the past four years now, first with health care, and now multiple times with the debt ceiling. The Democrats need to be adults as a party and call the Republicans out on their extortion and as soon as they stop paying them Dane-geld the Republicans will lose their leverage over the Democrats. As long as the Democrats keep compromising by paying Dane-Geld the Republicans will be in power regardless of how many seats in Congress they hold. The Republicans are getting what they want as opposed to what the majority of Americans chose in the last election, and this is a betrayal of the American people.

Man up, be willing to debate the Republicans and call them out! (With the one exception of Elizabeth Warren who has been willing to speak truth to power in a way that is commanding and non-compromising.) Compromise is weakness.

Thursday, October 3, 2013

Cuts will only lead to more cuts.

The right wing today likes to argue that we just need to cut $900 billion of spending (though many seriously believe the deficit is still $1.5 trillion, a sort of Earth is round Earth is flat pissing contest, pardon my language) and that this will solve our budget woes. This is forgetting that Economists have said our deficit is not our biggest woe, and Paul Krugman has made some excellent points on this which I don't need to repeat, and that the economists that are arguing about the "unsustainability of our deficit" are routinely wrong on their major claims. Let's just look at the promised reductions to Greece's debt following austerity which just simply isn't happening and is undebateable. The deficit is 0, but unemployment has gone from 8% to 27.9% and their GDP growth went from positive to negative territory after austerity began. Even though austerians claim to care so much about inflation, austerity hasn't helped with that either. Clearly, austerity has not helped the Europeans. If the laissez-faire school of thought was correct none of this would have happened. It is similar to other times their plan has been tried, such as in the US and Germany simultaneously between 1929 and 1933 which didn't work either. When someone has been so very wrong about so very much so frequently there comes a point where the point of view needs to be treated like arguing for a flat Earth. Historically speaking, cutting government spending doesn't simply lead to a lower deficit, economics is more complex than that. There is no data to support it.

The next popular thing is saying the Republicans are fiscally responsible. Correct me if I'm wrong but in 2001 we had a Republican government which started with a surplus for the government which is good following the beliefs of Ronald Reagan. The deficit went from a surplus to a $400 billion deficit overnight upon George W. Bush signing the budget. I don't believe the Republicans when they say they want a balanced budget, because historically they have stopped caring as soon as they get into office. I also don't believe their policies will create economic growth because the Bush tax cuts went mostly to the rich and were succeeded by a stock market crash and mild recession.

All of this right-wing rhetoric has to do with one thing and one thing only, tearing apart the welfare state and going back to the Guilded Age of cheap labor and less opportunity. The major part of this plan was in 1981 and 2001 turning surpluses into large deficits and then blaming Medicare. If you look at the estimates from the GAO entitlement spending will rise to 60% of GDP by 2080, but when you look at the pieces you find that half of this is not going to the entitlements at all but interest on government bonds to cover entitlement spending today with such low taxes and actual entitlement spending won't even hit 20% of GDP 70 years down the line. By raising these massive deficits and saying they come from the DHHS and other social programs (but not from our $600 billion military budget, larger than the next 10 largest military budgets combined, and the 9th largest as percent of GDP) they claim the deficits from the Bush tax cuts belong to social programs and they put these two unrelated numbers together. To be completely honest, our military budget is not limited to the Department of Defense and is actually closer to a trillion dollar when you look at all departments, which adds up to a quarter of all government spending, but that's an issue for another post. This interest is from the government budgets and by borrowing money to cover their debts and having compound interest working against the government in perpetuity. Given how President Clinton went from a roughly $300 billion deficit he inherited from George HW Bush and ended up with a $128 billion surplus when he left which George W Bush promptly signed into a $157 billion deficit within 12 months, it is hard for me to give the Republicans credit at being what they would call fiscally responsible on the evening pundit shows. History does not support their claim.

If we cut our way out of debt we could end up like Greece today or the USA in 1932 eventually with a less vibrant economy and repeat the same mistakes that were made in the early 1930s. This would be from the massive reduction in spending the government and employees bring as we are seeing with this government shutdown.

The solution then is to look at our tax code and make it a progressive tax rate again because as long as we tax capital gains separately at a low rate (20% on potentially a billion dollars of income? Seems regressive to me) we will find that we will have to keep borrowing money or see seniors starve and go without health care unless if their families give up on spending money for their children's education and the future of their family. If we change our tax code by taxing capital gains as regular income we can close the budget deficit and we will find that the big red bars on the GAO graph will not happen because we will have compound interest working in our favour by investing for the future instead of spending interest on people who are already dead from the weapons we ship abroad. If we do this and make our population more productive and enginuitive we will have a more vibrant economy, which will create a higher GDP. By having a higher GDP and a more efficient economy the percent of government spending as percent of GDP will drop or stay the same in the long run which means that this whole scenario doesn't have to happen. But this will only happen if we choose to make our country great. If we choose the easy path of being small we won't keep up with other nations and will mimic the failed policies of Merkel in Europe which has literally destroyed the economies of Southern Europe, which will take decades to fully recover from at this point. I choose growth and opportunity.

Source for budgets and deficits:

Wednesday, October 2, 2013

Free Trade in exchange for Human/Worker's Rights

Globalization is inevitable. As travel around the world is inexpensive now and communicating across the continents is instantaneous and free with email, nothing is going to change it. Instead of fighting globalization, we should make an attempt to make free trade and travel improve people's livelihoods across the world. The United States should foster this growth because it helps people’s well-being in other nations and creates middle classes and stability in former dictatorships. Granting free access to our 16 trillion dollar economy, limiting access through tariffs, or denying entry fir the world's worst nations would be a gigantic incentive for foreign governments to improve their human rights records.

One excellent example on how such a policy would improve the world is China. We should support free trade with developed nations with comprehensive labor laws to protect those people’s workers because workers' rights are human rights. If a country which currently lacks in human and/or labor rights laws received a huge tariff for transactions with the United States they would be forced to change. The goal of such an action is to improve the lives of people across the planet without having money fall right into the hands of those who abuse the people.

We should also give free trade to any country that protects workers’ rights as long as other human rights are not being broken. We could pressure on developing economies to develop trade union laws by putting a 30% tariff on imports from countries that we do not have free trade with, but once fair labor laws are established along with basic human rights laws the United States should allow free trade. This will improve the status of other countries and provide markets for goods and improving everyone's quality of life. Countries that infringe on the human rights of their citizens or long-term residents (the State Department will be instructed to treat both equally and with no distinction) would have their free trade removed, and tariffs appropriate to their international crimes.

Fighting free trade like the AFL-CIO has been doing is a losing battle with globalization and the internet. No progress has been made for 20 years, it clearly isn't working. Global corporations are here and with that comes immense pressure for free trade. Many on the left have tried to prevent free trade and have fought globalization but with the increase in communication and trade around the world would mean ending globalization at this point is impossible. By doing this they have left the table and have had no input because they are so extreme.So, we need to make sure all of our free trade agreements are based on equal terms to fight exploitation, which will benefit people not just in America by preventing the exporting of jobs for cheaper wages by global corporations, but prevent the exploitation of poor people across the world who work for far less than America.

One last step would be tying it with visa-free travel for American citizens which will increase people-to-people communication and help undermine foreign tyrannies.

This would be a better world with these types of laws, but just opposing free trade and being an ideological purist won't make a meaningful difference. It never has.

Warren/Feingold 2016

The next Presidential election is 3 years away, but I have been thinking about who I want our 45th President to be and my decision is Elizabeth Warren.

Elizabeth Warren has been one of the most vocal senators in this first year of her time in the Senate, and is willing to speak the truth that can always be backed up with big samples of data. She is a vocal supporter of the middle class and working poor of this country and I respect her more than any other politician currently in office for being so vocal and eloquent on these issues. We need a President who will stand for her positions and not cave into the demands of the people we didn't elect, which I am certain Elizabeth Warren will do. She will be 67 when she is elected President which will make her the third oldest President in history, but I think it should work the more I hear her speak. Over the past year she has had only one major slip of the tongue where she said she wasn't someone who had a vast array of stock portfolios which the entire mainstream media twisted into her saying she wasn't wealthy. The only other one was when she put down multiracial for having some Native American genealogy when she was in her early twenties, hardly something to worry about 40 years later. There really isn't anything else besides her platform people can attack which means she will be a very strong candidate who won't cave into the demands of the people we don't elect unlike most other Democrats.

Then there is the Vice President, and I would like to see Russ Feingold be our Vice President. He is a brave and fiery man, and was the only man who voted against the PATRIOT ACT. This is enough to make him someone fit for the Presidency. As a current envoy to the Great Lakes region of Africa he is getting great diplomatic experience and if he could take what he learns while he is there to the Executive Branch we could help the world's poorest region get on its feet which will seriously help our image abroad and the people of Africa. Feingold has lived a good live free of scandals and I can't find any slips of the tongue which means he will be an excellent Vice President or President.

There is a lot of talk about Hillary Clinton becoming President but I have one very good reason to oppose her: she voted for the PATRIOT ACT and didn't keep her head cool in 2001. That is enough for me to come to the conclusion that she is not fit to be President because like her husband she doesn't always stick to her platform. Elizabeth Warren and Russ Feingold are levelheaded and reliable, unlike the Clintons. The President needs to be levelheaded and stable in a crisis and both Warren and Feingold meet the bill, Clinton doesn't. We should hold our leaders to a higher standard. I might actually abstain or vote for a third party if she ran for office, I don't think she will stick to her platform, I think she will be like Obama and her husband and cave in to the Republicans as soon as she gets into office. In short, she is not Presidential material and I wish that the media would stop speculating on her running.

They are the right age to be President, they don't make a lot of missteps and neither has ever fell into the traps of the lobby money that is offered. Two other potential candidates are Bernie Sanders and Heidi Heitkamp. Most Senators are too easily swayed by the massive amount of money they receive and makes me think they aren't very presidential. It is time for a President who will stick by his/her platform and not be distracted by lobbyists to stick to their platform and speak their mind. The most effective Presidents in history used their bully pulpit, the best examples being LBJ and the Roosevelts who were three of our greatest presidents. The Warren/Feingold ticket will make this happen and I believe Elizabeth Warren has the potential to become our greatest president in American history. We need her.

The last thing that is important is whether the Warren/Feingold ticket can win. Assuming they don't win any states Romney won last year and retain all the non-swing states Obama won they will have 272 electoral college votes. I count Virginia, Florida, Ohio, and North Carolina as our only real swing states given how they had less than 5% margin in 2008 and 2012, and all four voted for George W. Bush. The Republican Party's hopes of retaining the Presidency hinges on getting Pennsylvania from the Democrats in 2016 which would be difficult. Even if Chris Christie was nominated, I don't think it would be a guarantee victory for them to win because they would have to take every single swing state, which is possible. By reaching out to people who don't usually vote they can retain the Presidency, and the polls for Hillary Clinton show her defeating Christie handily, which makes me think the Democrats should have no problem running Elizabeth Warren who I trust a lot more than I trust Clinton.

Samples of Warren's speeches:

Tuesday, October 1, 2013

We are not a Parliamentary Democracy, we are a Presidential Democracy.

I was reading an interesting article (at the bottom of this one) talking about how Obama is an ineffective President because Congress can't get anything done and how he is going to Congress for being involved in Syria, along with pretty much anything else he is doing.

The problem with these articles is they misunderstand how our system works. The United States of America is a Presidential Democracy (or Republic, take your pick) which means we have a separation of power between the executive branch and legislative branch. Sometimes this means our President is of a different party than our legislature. This is what has happened for the past four years. The President does not lead Congress, and this seems to be what a lot of pundits seem to think. The people who say Obama is skirting authority, not using his power etc. have never learned or since forgotten the difference between a Presidential and Parliamentary Republic/Democracy. In a Parliamentary Democracy (like Canada) it would be completely appropriate to blame the Prime Minister for failing to get things done, because in the Westminster System which Canada uses the Prime Minister is the leader of the largest party in one house of their legislature. The Speaker of the House here functions similarly to a Prime Minister in that respect, albeit with limited powers. The most important distinction is that in our country the President enforces the law, by organizing his cabinet, signing executive orders to clarify the law, and other tools, and the Congress makes the law. In Canada the Prime Minister functions as both the leader of Parliament and the de facto head of government like our President.

When reading someone, make sure they understand this difference because it is a crucial one and is one way to tell how intelligent a writer is. I do stop reading people who fail to make that distinction in their writing.

What I am concerned about:

An example of a well-written article: