Free Bazaar Blog

Measure 66/67 effects that can be seen will be small and invisible in short term. Nobody will leave tomorrow. Govt. union employees who pushed for this will keep their jobs for the short term and will be happy. It will look like jobs have been saved.
Effects that cannot be seen: Companies and educated people who will decide not to come to Oregon. New companies that will not be formed. Companies which are on the edge of bankruptcy that will close with tax on Gross revenue rather than profit. People looking for change in career deciding to move outside of state. etc. etc.
Imagine mice on a ship of cheese eating through the cheese. Who wins???

Excellent article for those who believe that subprime crisis was a regulation failure. If that was so then why is it that 3/4th of the subprime losses will be at Freddie and Fannie?

The further into this crisis we go, the greater the share of subprime loans and mortgage losses are turning out to be located at Freddie and Fannie. Even one year ago, if you had asked me, I would have told you to expect at least 2/3 of the losses to be at companies like Citi and Bear, with less than 1/3 at Freddie and Fannie. It now looks quite different. Conservatively, 3/4 of taxpayers losses will be at Freddie and Fannie. Perhaps as much as 90 percent of taxpayer losses will be there.

Given the large role of Freddie and Fannie, it makes sense for politicians to create as large a diversion as possible. Hence, the brouhaha over bonuses at bailed-out banks.

Incidentally, the debate over the "public option" in health reform also can be viewed as an exercise in symbolic politics and diversion. The point is to divert attention away from the bankruptcy of Medicare.

Interesting blog post showing that stimulus was worse than useless
National Accounts Show Stimulus Did Not Fuel GDP Growth
Along with the news that real GDP growth improved from -0.7 percent in the second quarter to 3.5 percent in the third quarter, the Bureau of Economic Analysis (BEA) released detailed National Income and Product Account tables yesterday, which received little comment in the press today. These tables make it very clear that the $787 billion stimulus package had virtually nothing to do with the improvement. Of the 4.2 percent improvement, more than half (2.36 percentage points) was due to firms cutting inventories at a less rapid pace, which has nothing to do with the stimulus. (For the details look at BEA’s Table 2 which shows that the contribution of inventory investment increased from -1.42 to .94 which equals 2.36.)

Marc faber things that there is dome fake upside to the short term due to excessive money printing by the government, but long term we are toast. See this video.

This dilbert cartoon captures my thoughts exactly on what would happen if lobbying was made illegal.

Two things become clear from this:
1) If a politician has some power that is useful to a businessman, he will find ways to bribe the politician.
2) If a politician is willing to be bribed, the politician will find ways to get that money.

We know that politicians will always be willing to be bribed unless of course they belong your favorite party or are angels. Also, I don't think there is any doubt that as long as the politician has power that can help the businessman, no. 1 will be done.

So, the only realistic way of reducing (you can never eliminate) bribes and lobbying to me seems to be to reduce the power of the politician in areas that can benefit a businessman. In other words take the power of economy away from the government and the bribes and lobbying will all but disappear.

Are you even surprised?
http://alcourtwatch.blogspot.com/2009/09/drug-dealing-alabama-judges-son...

Good Time magazine interview of Ron Paul. Best Quote "Anti-war Left has left"... which is disappointing.

why do we let politicians increase power on us based only on claimed intentions/promises?

"Concentrated power is not rendered harmless by the good intentions of those who create it." – M. Friedman

"Good intentions will always be pleaded for every assumption of authority... There are men in all ages who mean to govern well... They promise to be good masters, but they mean to be masters. "– D. Webster

Warren Buffet article. Thanks Ishdeep. "government expenditures now running 185 percent of receipts," and we are thinking about huge new programs to add to this debt? As somebody said "Eventually you run out of other people’s money"
http://www.nytimes.com/2009/08/19/opinion/19buffett.html?_r=2&pagewanted...

Update: The stuff below seems like science fiction, but see the references at the end to research which shows that this already starting to become real.
I have been reading a couple of books that got me thinking about a very interesting idea. One of them is the sovereign individual by James Dale Davidson and Lord Williams and the other is out-of-control by Kevin Kelly. Both of the books talk about how information revolution is reshaping our future Both of them seem to imply that as the cyberspace and the Internet gain more traction, the individuals will have more control over their lives. To understand what they mean by that imagine the following world in future:

3-D printers have become cheap enough and powerful enough to almost manufacturer anything that you wish. Printable electronic circuitry and home silicon integrated circuit fabrication have made it possible to print your own computer at home with the designs downloaded from the Internet. It is now possible to even print your own car or TV refrigerator for that matter. Nanotechnology has also advanced far enough that you can now create your own food out of basic ingredients carbon hydrogen and oxygen available in in the atmosphere, soil etc. Power generation has become distributed and homes generate their own power from solar, geothermal or other means.

You wake up in the morning and suddenly you feel like driving a new BMW. But, you do not have the car parked in your garage. So, what do you do? You download that design for the BMW from the Internet. You set up your printer to print all the parts needed to manufacture a BMW car. The parts are manufactured out of different forms of plastic. The plastic is made out of the basic organic ingredients. These could come from your own backyard or even your own basement which has a Nano-organic factory continually churning raw material out of soil, sunlight and air or by recycling your old stuff that you no longer want to use. Once the parts are all manufactured, your household Robots work together to build the car.

Since you made all of this in your home, using the ingredients that you already own, using the designs that you downloaded from the Internet, how can any entity like the government try to get a cut of the transaction? In other words how would you charge income tax or sales tax on transactions that are only bits? It is an impossible task. People will always find a way to transact bits without the government knowing anything about it. The whole field of cryptography will aid the individual to do so.

To look at it another way, the Internet and cryptography is going to level the playing field in asymmetric relationship between the government and the individual today. I think this is unstoppable. And as James says in his book, this is similar to how feudalism evolved into today's nation-state when the industrial revolution happened. In a similar manner the information revolution will create a new form of governments and organization. Since the government will lose its ability to tax, it will slowly lose all its power, though not without a fight. Expect Draconian tax laws and severe punishments for not paying you "Data Transaction Taxes" in future.

I know it sounds very far-fetched today. But I am talking about 20-25 or maybe even 50 years from now and the way the technology is advancing all this is definitely possible.
Update:
References to research that shows why this future may be here soon.
Wikipedia on 3D printing
Buy 3d printers here
Nanotechnology manufacturing
Nanotechnology for unlimited and free food manufacturing
Self replicating machines for manufacturing

How much do you think the President of the united states make in a typical year? You will be surprised... For comparison CEO of Exxon made about $8million including stock exercise in 2008
This is a very interesting analysis at the dealbreaker website

Cash Compensation:
Salary: $400,000
Cash Subtotal: $400,000
Room and Board:
55,000 square foot mansion, in historic Washington, D.C.: @ $100/sqft: $5,500,000/yr
Personal Chef / Kitchen Staff: $300,000 / year
Other Servants / Attendants: $500,000 / year
Subtotal: $6,300,000
Discretionary Use Of Private Aircraft:
(One of 2 Boeing 747-200Bs "Air Force One"):
Annual Costs: 120 hours @ $65,000/hr: $7,800,000
Annual Costs: 700 hours @ $65,000/hr: $45,500,000
Helicopter Fleet:
Annual Costs: 50 hours @ $5200/hr: $260,000
Aircraft Subtotal: $8,060,000
Aircraft Subtotal: $45,760,000
Other Personnel:
Personal Driver On Retainer (Defensive Tactical Driving Trained) @ $300/day $109,500
Personal Body Guards 35 @ $500/day $6,387,500
Use Of Personal Car 60 days @ $2000/day $120,000
Personnel Subtotal: $6,617,000
Annual Benefits Total: $59,077,000
Four Years of Same: $236,308,000
Pension And Related Benefits:
Present value of Pension Benefits ($200,000 per year): $2,251,556
Total Benefits: $238,559,556
Average Annual Benefits: $59,639,889
Also, think we need to strongly consider "pay for performance" here. This is a lot of compensation and I think clawbacks if the executive fails to pull us out of this recession are called for. I propose we institute a temporary "efficiency in government court" empowered to enforce pay for performance in the executive branch. The time to reward these employees for non-performance is over. Some accountability needs to be put in place. We won't have them kicking sand in the face of taxpayers any longer.

And, by the way this is underestimation, since a lot benefits like retirement benefits, vacation benefits, use of other expensive items etc. are not included here. So, CEO of Exxon makes $8 million in compensation, while the president makes $59 million. and, he wants to cap CEO excess? He should first cap his own...

Lot of folks like to demonize corporate and business world, while assuming that the government and no-profit sector does not suffer from greediness etc. This lady convincingly talks about why both have their share of greedy and good people and really as I keep on saying neither should be blindly trusted. Some quotes:

[People] fail to differentiate between business leaders and dismiss the whole sector as greedy, uncaring, and destructive. Yet, even with much evidence of greed and wrongdoing in the public and social sectors, that same categorical condemnation is not present.

In fact, you can make a vital contribution in any of the three [public, private, social] sectors, because all three are needed for a society to function well. (If just one sector is weak or absent, the result is usually a failed state. Think of the former communist states that tried doing away with private business, or the chaotic warlord states without effective government.)

Mother Teresa became a symbol of charity ... If we asked the question, "Where does goodness lie?" it was in the heart of Mother Teresa,

Julius Walls, Jr.? Mr. Walls is CEO of Greyston Bakery, a $6.5 million for-profit enterprise in Yonkers, New York. Greyston bakes gourmet pastries for the New York City market and supplies brownie bits and other baked items for Ben & Jerry's ice cream worldwide. Greyston delivers high-quality goods while maintaining its policy of hiring and promoting the very people who have the hardest time finding good work. Nearly the whole workforce, including supervisors, consists of men and women who once were either in prison, addicted to drugs, on public assistance, or homeless. Some even go on to start their own businesses with help from Greyston, which also has a foundation for community development in Yonkers. The goodness here lies in Mr. Walls and in his colleagues. They work in the private sector.

This headline in the San Francisco Chronicle on May 13, 2007, demonstrates this point: "The Teachers Who Cheat: Some help students during standards test—or fix answers later—and California's safeguards may leave more breaches unreported." There have been similar stories around the country. The St. Petersburg Times wrote: "A former United Way executive pleaded guilty Thursday to stealing nearly $1.9 million to buy expensive show horses in what is believed to be the biggest embezzlement case in the agency's history." Sadly, it is all too easy to cite examples of corruption in the public sector as well, such as the recent Jack Abramoff lobbying scandal. All three sectors are equally open to corruption or virtue.

Morality, ethics, and the ability to make the world a better place are not the domain of any one sector. It is individuals, and how they conduct themselves in the world, that matter. As you complete your college work, I hope you will take at least one course in entrepreneurship to learn how to translate your creative ideas into enterprises that create value for society. I hope you remember the many young people around the world who seek the opportunities afforded by entrepreneurship. And, I hope your story is told one day as an example of how you placed opportunity and choice in the hands of others. I hope people know through your actions that you used your unit of potential for good—whether in the private, public, or social sector.