Only in America...

Mammon demands sacrifice I guess... no more commentary necessary

http://www.liveleak.com/view?i=696_1300116168

Article - Is Wealth Gap Widening Under Obamananke? (yes!)

Article is sorta fluffy, but it conveniently sums up many of the arguments against the policies we are currently engaged in...

Consumer sentiment among families with income above $75,000 jumped to 88.2 in early February, the highest since under President Bush in 2007, according to the Reuters/University of Michigan's latest survey. 

But sentiment among lower-income households dropped to 67.7 from 72.1 in January, trapped in a range it's been stuck in since just after Obama's 2009 inauguration. 

The president helped widen this gap by compromising on the Bush tax cuts with the Republicans in Congress, agreeing at the end of last year to extend them on all incomes for two years, investors said. 

Meanwhile, Fed Chairman Ben Bernanke has set upon a large quantitative easing program that has boosted the stock market by increasing liquidity, but also raised the costs of basic goods that hit the poor the very hardest.

Poverty 1 - Middle Class 0

'Better late than never' - that's what I suspect the motto of mainstream media is.  Oh well.  Here's today's soundbite...

Are you better off than your parents? 

Probably not if you're in the middle class. 

Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed. 

In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data. 

Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots 

And public policy of the past few decades has only encouraged the trend. 

The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts. 

A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed. 

In 2000, President Bush also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector. 

Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest. 

And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth. 

"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009. 

But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression. 

With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts. 

"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.

(emphasis added)

America's Myth of Social (Im)mobility

At the risk of being a jerk, this post is not for the graph-reading-challenged... (I'm too lazy to explain it)

Exhibit A - Belief of Social Mobility (America)

Exhibit B - Actual Social Mobility (America)

Buffett Giving Pledge - Capitalism & Distorted Results

Continuing from Speech by Warren Buffett on Charity...

My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious.

The ultimate lucky winners of our current system are capital allocators.  Those who can efficiently make decisions may be rewarded with vast riches.  Unfortunately, doing what is efficient is not always doing what best serves our neighbor.  After all, saving the lives of others and teaching future generations must certainly be at least as beneficial to society as being able to pick stocks... (if you doubt this, imagine a society without heroes/teachers and then another society without stockpickers... which would you rather live in?)

Statistical Democracy

From Greek Mythology...

Athena was the goddess of civilization, wisdom, justice, freedom, democracy, among other things.  She sprang forth from the head of her father, Zeus... from there we have, according to the Greeks, the roots of human civilized society.  From this spectacular mythology, the democratic Greek city-states, beginning with non-other than Athens herself, have changed the course of human society.

To American Society...

Today, no nation better personifies the democratic spirit than the United States of America.  Having taken up the mantle left by the Greeks, the U.S. has been the bastion of democratic rights since its founding roughly 200 years ago (democracy took a 'brief' interlude following the collapse of Greco-Roman civilization).

However, many observers (present company included) have remarked upon the continuing decay of the integrity of the American democracy.  This is a contentious point, and could serve as the purpose of great discussion on any occasion.  However, let us presume that, left to its own devices, democracy as it existed (back in the days of the Founding Fathers) may cease to exist (if it has not done so already).  Let us also dare to presume that any alternative form of society is not preferable to that which is the cerebral offspring of Zeus, and was made famous in 1776 - therefore, democracy is worth saving...

Note: When I refer to the democracy of the Founding Fathers, I refer to the spirit of the democracy, which is admittedly a vague idea.  I do not necessarily refer to the exact process of democracy, which should in my opinion change from generation to generation, as new (and better) methodologies present themselves...

Presenting, Statistical Democracy!

"Convinced that the people are the only safe depositories of their own liberty, and that they are not safe unless enlightened to a certain degree, I have looked on our present state of liberty as a short-lived possession unless the mass of the people could be informed to a certain degree." -Thomas Jefferson

Though no king of the Greek gods, an interesting idea birthed from my own cranium while riding home with my roommate.  I hold the opinion borrowed from that of Jefferson that the entropy of our current democracy stems directly from the citizenry.  I have often bemoaned the lack of understanding that current voters possess (present company included).  Without the requisite knowledge, we're left to vote on such outward (inconsequential) characteristics as what party they represent, what race they are, or what they promise (woe is us who believe!)

But then, what could we possibly do?  It seems too much to expect every member of society to become fully-versed in all the various matters (or at least most essential) that go into running a country... is there a feasible solution to this impossible predicament?

Here, we must turn to a field that is utilized in every field, except the political vote: statistics.  Wonderful was the day that this finer science was discovered!  I say that it is (long past) good time that we applied statistics to save the foundation of this fine nation, as well as democracies everywhere (at least everywhere with a sizable population)!

Disclaimer: The devil is in the details, and I do not mean to gloss over the sordid details of such a radical proposal.  However, the idea is interesting enough that I wanted to put it on paper in theory...

General Theory...

• Voting would no longer be open to the general populace
• insert "gasp!"
• Voters would be randomly selected 1-2 years prior to each election
• Approximately 1000 voters would probably be enough
• I think it is better that the voters remain anonymous
• Voters would be removed from their occupation, on paid leave
• They could be handsomely compensated (this is tricky...)
• Spend the next 1-2 year rigorously studying all issues
• Work independently to form opinions
• 40-60 hr work weeks at minimum
• Research staff available to provide info... not opinions
• If identity of any voter is compromised, they are replaced
• All compensation would be returned
• Harsher punishments may be appropriate
• (I realize family would prob know, but I'll throw that under 'Detail' for now)

In effect, the idea is that the voters would now consist of a sample of 1,000 which would represent the general population of the U.S.  However, after this selection, they will no longer simply be regular citizens, but through learning they will become 'super voting citizens'... essentially they will be armed with knowledge to make educated votes for the rest of the majority.

We can't possibly educated the masses, but we can try to educate a select few, and have them vote in place of the masses...

"That's insane!"

There's two major precedences for this that I can recall...

1. Military service - voting in this case would be akin to the draft... those who are drafted who perform their civic duty to the country by studying like crazy to become a super-voter...
2. Jury duty - speaking of civic duty, this is essentially the way portions of our legal system currently works.  Think of it as selecting the President through a jury of peers.  The functions would be very similar... the super-voters act as jurors who would become extremely educated on the merits of the candidates... and they would ultimately decide the outcome of the election...

*puts on flame-deterrent suit*

Pedagogy of the Oppressed - Chapter 4

The (truly) revolutionary leader is someone who believes that by living in communion with each other, we liberate each other.  He must believe that there is nothing more important than to live and work with the oppressed, with the 'rejects of life', with the 'wretched of the earth'...

Conquest vs Cooperation... shall we subject others to our will (whether forcefully or paternalistically), or shall we work together with others in order to better understand the world around us?

Fragmentation vs Unity... oppressors shift the focus to focalized views of problems, rather than dimensions of a disfunction on a grande scale... ie today's hot-topics of immigration, abortion, stem-cell research, etc

Manipulation vs Organization... oppressors manipulate the oppressed to inoculate individuals with the bourgeois appetite for personal success...

Cultural invasion vs cultural synthesis... instead of teaching people to critically view their surroundings, instead we invade their cultures and alienate them from the spirit of their own cultures... then we teach them to dress like us, walk like us, and talk like us...

American (Pipe) Dream? - Young Adults

New York Times gives an excellent read (American Dream is Elusive for New Generation) about the struggles of today's young adult generation.  I've got alot of friends in similar situations, and the general environment can definitely be summed up as downbeat-yet-hopeful.

Some quick thoughts:

Hanover Insurance Group in nearby Worcester offered to hire him as an associate claims adjuster, at $40,000 a year. But even before the formal offer, Mr. Nicholson had decided not to take the job.

Rather than waste early years in dead-end work, he reasoned, he would hold out for a corporate position that would draw on his college training and put him, as he sees it, on the bottom rungs of a career ladder.

OK guys... I understand that everyone wants to work at a job they love (or otherwise worthy of the prestigious college diploma).  But, if you graduated in 2008 (2 yrs ago), and still haven't found a job, maybe it's time to reconsider your options?  And really, does anyone not 'waste early years in dead-end work?'

(His grandfather) watched what he described as America’s once mighty economic engine losing its pre-eminence in a global economy. The grandfather has encouraged his unemployed grandson to go abroad — to “Go West,” so to speak.

Pretty decent advice imo... I've talked about this possibility with my parents.  But, we need to understand that, from their perspective, America represents the epitome of success.  However, as seen here, the generation prior to our parents seems to have the view that, all things are transient... what was once successful may not always be so... something to keep in mind for our futures...

...growing wealthy on real estate investments made years ago

...the 'rising tide that lifts all ships'

“If you talk to 20 people,” Scott said, “you’ll find only one in manufacturing and everyone else in finance or something else.”

Misallocation of human resources created by twisted incentive structures.  Finance creates no real goods, just erroneous fees (parasitic).  This bizarro-capitalism system resembles the failed communism system, when one worker carried the workload of his twenty lazy (parasitic) comrades.

Scott moved into the empty bedroom, with his parents paying Scott’s share of the $2,000-a-month rent

Back when I was in school (haha, I just wanted to feel old by saying that), I lived in a two-bedroom with up to six other roommates.  Learn to be responsible with how you spend... even if your parents could pay for... it...

Humanity as a Cancer of the Earth

Before reading further, I suggest you do some research on Alan Gregg, renowned doctor and philanthropist.  His life was devoted to others, through his medical practice and research, as well as his charitable donations as VP of the Rockefeller Foundation.  As he neared retirement age, Gregg asked some hard questions of his organization's philanthropic policies.  Hopefully, we will think twice before we vilify him for his thoughts.

Alan Gregg: Humanity as a Cancer of the Earth

I propose to offer only one idea regarding the population problem... It is... the view of one who has had a medical training - a single idea around which subordinate reflections of a rather general sort present themselves...

New growths of any kind... involve an increase in the number of some one kind of cell and, hence, a corresponding increase in the size of the organ or tissue involved... In all but one instance, organs and tissues in their growth seem to 'know' when to stop.  The exception, of course, is... cancer...

What are some of the characteristics of new growths?  One of the simplest is that they commonly exert pressure on adjacent structures and, hence, displace them.  New growth within closed cavities, like the skull, exert pressures that kill, because any considerable displacement is impossible.  Pressure develops, usually destroying first the function and later the substance of the normal cells thus pressed upon.  For a comparison with a closed cavity, think of an island sheltering a unique form of animal life that is hunted to extinction by man.  The limited space of the island resembles the cranial cavity whose normal contents cannot escape the murderous invader.  Border warfare, mass migrations, and those wars that are described as being the result of population pressures resemble the pressures exerted by new growths.  We actually borrow not only the word pressure but also the word invasion to describe the way in which new growths by direct extension preempt the space occupied by other cells or types of life.  The destruction of forests, the annihilation or near extinction of various animals, and the soil erosion consequent to overgrazing illustrate the cancerlike effect that man - in mounting numbers and heedless arrogance - has had on other forms of life on what we call 'our' planet.

Metastasis is the word used to describe another phenomenon of malignant growth in which detached neoplastic cells carried by the lymphatics or the blood vessels lodge at a distance from the primary focus or point of origin and proceed to multiply without direct contact with the tissue or organ from which they came.  It is actually difficult to avoid using the word colony in describing this thing physicians call metastasis.  Conversely, to what degree can colonization of the Western Hemisphere be though of as metastasis of the white race?

Cancerous growths demand food; but so far as I know, they have never been cured by getting it.  Furthermore, although their blood supply is commonly so disordered that persistent bleeding from any body orifice suggests that a new growth is its cause, the organism as a whole often experiences a loss of weight and strength that suggests either poisoning or the existence of an inordinate nutritional demand by neoplastic cells - perhaps both.  The analogies can be found in 'our plundered planet' - in man's effect on other forms of life.  These hardly need elaboration - certainly the ecologists would be prepared to supply examples in plenty of man's inroads upon other forms of life.  Our rivers run silt - although we could better think of them as running the telltale blood of cancer.

At the center of a new growth, and apparently partly as a result of its inadequate circulation, necrosis often sets in - the death and liquidation of the cells that have, as it were, dispensed with order and self-control in their passion to reproduce out of all proportion to their usual number in the organism.  How nearly the slums of our great cities resemble the necrosis of tumors raises the whimsical query: Which is the more offensive to decency and beauty, the slums or the fetid detritus of a growing tumor?

http://www.sciencemag.org/cgi/content/citation/121/3150/681

Living Within Limits - Intro (Tragedy of the Commons)

Author: Garrett Hardin

"I teach only two things: the cause of human sorrow and the way to become free of it" -The Buddha

If you are like me, you do not know who Garrett Hardin is.  However, like me, you may have heard of his most famous work: Tragedy of the Commons (1968)

For those unfamiliar with the reference, this was an ecology article, the heart of which can be summed up by a parable.  In the story, there was a piece of pasture land shared among many herdsman, but owned by none.  Each herdsman is free to use as much of the pasture to raise as many animals as his heart so desired.  Hardin then described the 'tragedy' to follow: 

It is to be expected that each herdsman will try to keep as many cattle as possible on the commons. Such an arrangement may work reasonably satisfactorily for centuries because tribal wars, poaching, and disease keep the numbers of both man and beast well below the carrying capacity of the land. Finally, however, comes the day of reckoning, that is, the day when the long-desired goal of social stability becomes a reality. At this point, the inherent logic of the commons remorselessly generates tragedy. 

As a rational being, each herdsman seeks to maximize his gain. Explicitly or implicitly, more or less consciously, he asks, "What is the utility to me of adding one more animal to my herd?" This utility has one negative and one positive component.

• Negative: the pasture is slightly degraded by each additional animal. - accrued evenly to all herdsman (importantly, the man in question would only accrue a small fraction of actual costs)
• Positive: the herder receives all of the proceeds from each additional animal

[T]he rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another . . . . But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit -- in a world that is limited.

This conclusion has been played out not only in agriculture, but some non-environmental areas of study as well.  Consider the following example.

FDIC Insurance was created as a result of bank-runs during the Depression.  The U.S. government (rightly) surmised that by giving an explicit Federal-Guarantee on the funds of depositors at banks, the probability of bank panic would decrease.

This theory played out for a long time, exactly as the federal government believed.  However, some criticized the creation of the FDIC because it essentially created a 'common pasture' for the banks and depositors.  The depositors no longer had an incentive to analyze the credit-worthiness of their local credit unions, thrifts, and banks - all deposits became identical (backed by the FDIC).  The banks no longer had to worry about depositors withdrawing money if the bank was being 'too risky' - so indeed they began buying up riskier assets and giving out riskier loans.  Quite likely, the FDIC played a large role in creating the 'Too Big to Fail' problem we now face, because there essentially could not be a failure - when banks succeed, more profits; when they fail, FDIC pays... Tragedy

(Tragedy did ensue... some believe the S&L crisis was caused by FDIC insurance, and perhaps even the current recession, which originated from excessive bank lending/risk-taknig)

But I digress.  Living Within Limits carries on the discussion began in Tragedy of the Commons, and Hardin makes one more plea to the rest of us for constraint (for our own sakes).  In the tradition of thermodynamics, here is something to leave you with in this introduction/rant:

Hardin's Second Law of Human Ecology:
There's no away to throw to.