Nancy Pelosi Hugo Chavez
Speaker of the House
Nancy Pelosi
Venezuelan President & Dictator
Hugo Chavez

 

Yesterday, Nancy Pelosi, Speaker of the House, refused to allow an up-down vote on the passage of the Columbian Free-Trade Agreement (HR 5724) as authorized under the Presidential Fast Track Authority. Speaker Pelosi has instead modified House rules, ex post facto, so that the vote required by the fast-track provisions can be circumvented.

This despite the fact that the House Democrats have repeatedly, through more than 250 consultations with Columbia, insisted on and won additional language in the trade agreement forcing Columbia to provide more protection for trade unionists in the country — in the past it has been open season on organizers, though through no fault of Alvaro Uribe, the President of Columbia. Thank FARC. President Uribe has, in fact, worked to reduce this violence and has delivered impressive initial results, reducing violence by more than 80% since 2002. This is also an agreement which Charles Rangel, Chairman of the House Ways and Means, and Bill Clinton support, as does President Bush. It is good for the United States and good for Columbia. Even Hillary Clinton’s staffer Mark Penn is^H^H was working towards this bill’s passage.

The standard media drivel is that this is the work of the labor unions in the United States, but, as with all things political, the phrase ‘cui bono’ comes to mind. 90% of Columbian goods arriving in the United States are duty free and the balance are subjected to very minimum tariff. US goods in Columbia are assessed a 35% tariff, which would be eliminated as part of the Trade Agreement. This means that companies producing goods for Columbia would be more price competitive, be able to sell more goods (in what apparently is a pending recession), and would be able to hire more union labor to produce the goods. In other words, this trade agreement is a good thing for the labor unions. The unions do, however, make a good smoke screen. What is going on under the smoke should give any American a case of the chills.

Nancy Pelosi, acting in her persona as Secretary of State, visited Damascus last year and presented the House position on national policy. It was argued at the time that this was technically treason and in fact has been previously prosecuted as such under the Logan Act of 1798. Clearly, Speaker Pelosi feels that it is in the interest of the House to establish foreign policy.

In light of the evidence of other Democrats (Kennedy D-MA) making arrangements with Hugo Chavez, perhaps more is going on here than meets the eye. Could it be that the real reason for dumping the Columbia Trade Agreement is that Pelosi has made a deal with Chavez to attempt to weaken Columbian President Uribe. It’s no secret, since a suitcase full of money and computer files revealed that Chavez is bankrolling and providing strategic intelligence to FARC.

Should all this be suprising? No. The anti-war left did it to Cambodia, stiffing our Cambodian allies after we pulled out of Vietnam, at a cost of about 1.7 million deaths at the hands of the Khmer Rouge. They are seeking to do the same in Iraq when we know Iran is actively seeking to destabilize the Iraqi government. What consequence is Columbia against sad examples of this magnitude?

Not supporting Columbia, especially when President Uribe has compromised so much at the request of the Democrats in the House, is as shameful an act as been seen in a decade.

Sometimes it takes somebody to step back from the tactical morass of the pending primaries and presidential elections and take a look at the significant issues. I am referring to actual decision trees that must be traversed to establish policies that affect the United States, as opposed to emotional and class-divisive issues that are used for political short-term electoral positions.

Now political pundits will say that there is nothing other than the tactical political position — after all, the goal is to get elected and you can’t resolve real issues if you aren’t in a position of power or authority. But candidates mired in the short term tactical issues — addressing irrelevancies for a point here or there against their opponents — can become intellectually bankrupt of vision. Then, even if elected, they cannot address the real issues, or perhaps have compromised their political capital to the extent they are totally ineffective.

By and large, I want to address issues that can be managed in some concrete fashion, not issues that parties believe should be managed. Party issues that are litmus test issues, such as abortion, cannot have a resolution in the current political system. 40% of people oppose abortion, 40% are “pro-choice”, and the rest either don’t care or have mixed positions. Given this distribution, any executive is not going to be able to generate a policy that has an immediate impact on the United States. One might be able to create an environment where one position or another might be enabled in a future act, but such environments are very fragile. The issue of stem cells is a case in point — for all the posturing, the issue became irrelevant when Japanese scientists persuaded ordinary skin cells to transform back into undifferentiated stem cells (and with the added benefit that they were donor specific.)

So enumerated below are some issues and my tags:

AbortionAbortion — (easy since I’ve already addressed it in brief) Doesn’t matter. Can’t be resolved in the current system. Trying to make this a plank is a waste of time. Yes, there are moral and ethical issues on both sides and the current treatment is inconsistent and there are deep feelings on both sides. Doesn’t matter. Irrelevant.

ImmigrationImmigration — The United States needs to get its act together here. We have two contradictory processes at work that need to be reconciled. Our food supply is dependent on manual labor imported from outside. To increase the pay scale to the point compatible with a job an American Union Worker would take will increase the cost of food. Economically we are chained to cheap imported labor. The presence of people in the country who exist outside the legal system creates massive economic costs, yet it still somewhat to our benefit to educate and care for a certain number of these people — the cost of not doing so may be greater still.

Further, much of America’s growth is due to legal immigration, its innovation due to contributions from immigrants. From the technological and innovative point of view, why would be want to train and educate students from other countries, and rather than employ them here with a H1B, send them back to India, or China, or Pakistan where they can use what we have taught them to develop competing businesses.

The current set of immigration policies are horrible with no consistent underlying vision or plan. We need to restore the United States to that land of opportunity that calls people from all walks of life to participate in achieving their dreams, and makes them want to be legal participating citizens in the American democratic process.

The Plank: Recognize that America is built on immigration and adjust policies to reflect this fact. Increase or eliminate H1B visa limitations. Devise a guest worker program as a means to satisfy our current economic dependency while at the same time requiring such workers to exist within our legal framework (i.e., valid driver licenses, auto insurance, immunizations, etc.). Finally, enforce the subsequent laws.

BusinessBusiness Investment — The current governmental bureaucracies (both State and Federal) have created an environment where investment is going elsewhere: London, China, Russia. Our policies and laws like Sarbanes-Oxley have made the hurdle of listing in the United States financially onerous. The FDA has made developing new drugs near-impossible with the result that corporations are being fined millions of dollars for reporting their research protocols to doctors (off-label touting is a crime); deciding drugs need not be approved because existing drugs are already available (competition anyone?); and generally making the process so complex and lengthy that the evil pharmaceutical companies have to charge an arm and a leg to break even of the research and development. The Justice department obtains some of its own budget from the fines levied in actions. (oops)

These, and many more government bureaucracies have to be checked, reduced or eliminated. The government can and should regulate commerce so that the playing field is level, but by and large, issues such as who can compete should be left to the market to decide.

The sub-prime/securitization/derivatives financial liquidity crisis is providing another opening for government to over-regulate. The market is already sorting out (in the British SAS sense of the phrase) the people who were stupid. Banks are moving assets back to their balance sheets. Hedge funds are unwinding and assets are being marked to real market value. Government interference here is what created the mess. Let’s not multiply the problems.

The plank: The Government’s role should be to provide transparency. Hold hearings, investigate processes and systems but without moralizing and demonizing the industries. And then do nothing while the system, now aware of the problems, corrects itself.

In general, any law passed by Congress establishing a regulatory or oversight mission (and its associated bureaucracy) needs a sunset provision and a requirement for periodic review to determine whether its still needed. Establish a goal to cut by 10% annually both the budget and employee count of every major department. (The Jack Walsh method.)

TaxA Rational Tax Policy — The current situation is not sustainable. The class-based tax warfare must stop. Now we have the situation where the top 1% of the country’s earners pay 39% of the Federal income tax; and that 60% of the people pay less than 1%, if any. And what do we hear from Congress: “Taxes need to be more progressive.” and “We can’t have executives making $30 million dollars.” and (of course) “We have to ensure that the rich pay their fair share.” So what occurs when 0.1% of the earning population pays 99% of the income tax? What happens if they get pissed off and leave? (oops!)

Also, it is unconscionable that a PhD in accounting and mathematics, let alone a typical citizen can’t read their tax return instructions. The entire system (and the IRS) needs to be abolished and replaced with a simplified taxation system that requires no more than one page to fill out. And keep Congress out of it. Their attempts to “fix” things got us into this mess. Remember the AMT, supposedly legislated to insure that 140 people who paid no tax forty years ago, never ever got a free pass again? And now 30 million Americans have to figure their taxes twice and pay because they are now “rich”!

The Plank: Set up a commission to oversee the collection of taxes — ten members max — like the Fed. Make any revision to the code require a supermajority of 80% Congress. Make it flat or at most two tiered with no exclusions. Most people would pay a higher rate just to not fill out the forms ( or pay their tax accountants to do it for them — they would save money.) Dump the AMT, eliminate capital gains tax or any reinvestment double taxation. Simplify — forbid social reform and manipulation via taxation.

WarThe War in Iraq — Doesn’t matter. We are there, we can’t leave until its stable. Why beat a dead horse. We kill more teenagers on the highways than in the armed forces. Fix foreign policy and this will go away. Irrelevant

Foreign PolicyForeign Policy — Which one? The White House, The State Department, The Trade Office, the CIA?

The Plank: Downsize the bureaucracies and reduce the competing agendas. Let’s get some consistency in the message America sends to the rest of the world. Like Patrick Swayce in Roadhouse: Be nice, be nice, be nice until it’s time to stop being nice. Let’s treat Russia and China and other countries with respect and some understanding that they have legitimate concerns. America, for better or worse, is a superpower and is likely to remain so.

Castle RomeoNuclear Proliferation — Doesn’t matter. The first world knows this through detente. The third world has to learn. And it’s not as if we can really do anything about it — any physics grad with some practical engineering experience can do it.

Few alive today have an understanding of the effects of these weapons. If a state uses one against another state, that state is toast. Self-correcting problem. Irrelevant.

JudicialThe Judiciary — At first I was going to assign this a ‘doesn’t matter’ but I rapidly came to the conclusion that it does in the long term. Two things:

Any president should have the right to select and should have the expectation that his selection be confirmed unless there are really significant problems with the choice. By problems, I mean competency, legal and qualification problems, not fundamental philosophical differences. When the people select a president through an election, they are (hopefully) voting for a vision and a philosophy and they expect that that vision will have its day in the sun. Selecting like-minded people is an executive’s prerogative. This includes judges and attorneys-general. This is part of the implementation of the vision (and philosophy). Using the confirmation process as a weapon deprives the People of the United States of their choice of a vision. Conflicting visions each deserve a chance so confirmation should be competency-driven instead of philosophically-driven.

Since certain judicial positions are life positions, judicial appointments establish long-term trends and enable conditions for follow-on legislation by establishing the interpretative environment for that legislation. When the judicial system is strictly constructionalist, this does not matter, but whenever judges use their authority to bypass legislative strictures, and have become ‘activists’, different concerns arise. For those who believe that certain positions are warranted and have an intrinsic value independent of that determined by the will of the people (as expressed by a majority of the legislative body), judical activism is a key component in achieving these positions. Consequently, judicial appointments become critical in preserving this channel of change, and this is reflected in the acrimonious confirmation process of today.

I note in passing that a conservative position of strict construction with regard the the US Constitution is not inherently an adverse position. At most it is a neutral position with respect to ‘active change’. At most, supporters of changes currently enabled via judicial activism have only to assure that their laws pass Constitutional muster. Of course, the entire reason for judicial activism is not for reviewing laws, but for circumventing the legislative process in the first place. If they could get their laws passed, there would be no need for judicial activism. This activism is also not the exclusive province of the left. In the early 20th century, laissez-faire courts blocked Federal regulation of interstate commerce on the basis of the ‘santity of private commerce’, an appeal beyond any reasonable Constitutional interpretation.

The Plank: Confirm presidential appointments on the basis of competency and not philosophy. Develop policy to prevent and avoid judicial activism. Let the process work by confirming presidential selections, and let Democracy work by reducing judicial activism.

[Many thanks to AOC for his erudite analysis and review.]

This article is the second in a 52 part weekly series on the United States of America. It’s a chance to celebrate the diversity of our nation, and to educate ourselves about the members of our union, both the States and the Territories. We encourage you to comment and share you thoughts on the States, and hope you learn something new about each of the valuable members of our wonderful Union.
- The Staff of The 12 Angry Men


Last time, we covered Indiana, a state that does just about everything right, but doesn’t quite clean up enough for a fancy party. This week my cross hairs are lined up on Florida a state that does just about everything wrong that is imaginable, but the weather.

Quick Facts about Florida
NameFlorida
Admission to UnionMar 3rd, 1845
Population18,089,888(4th)
Population Density309/sq mi (8th)
Area65,795 sq mi (22nd)
Gross State Product$713 billion (4th)
Tax Burden+0.02




Florida, a nice place to visit, but like so many nice places to visit, you wouldn’t want to live there. First visited by the Spanish in 1513 who, in a well thought out plan, decided it would be just peachy to build some settlements in the path of every major hurricane. Florida was ceded to the United States by the Spanish in 1819 for $5 million dollars, and the promise that the US would renounce all claims to Texas (yeah… like that was going to happen). Unfortunately we accepted, and from that day forward Florida was known as “America’s Wang”.

Throughout most of its history (until the middle of the 1900′s), Florida was the least populous state in The South. Following the advent of air conditioning, Florida experienced a massive population boom, peaking in the 60′s with growth rates of nearly 80%. Now you would certainly think that such massive population growth, and the influx of all of the tourist dollars would result in a healthy sustainable economy. Yep, you would certainly think that, but no, you’d be dead wrong. Despite having a GDP on par with Australia’s, Florida manages the horrible sin of being a tax burden on the rest of the country (for every $1.00 Floridians pay in taxes, the Government hands them back their whole dollar, and then chips in an extra $0.02 of the rest of our money). Hey Florida, maybe you should start collecting an income tax, before you start asking the rest of us for handouts!

What Florida does right: Well… um… they have nice weather! Except when Hurricanes are obliterating their major cities, that is. Well they do have Disney World, and everybody likes going to Disney World! Yeah, sadly, that’s all I’ve got. Florida has a decent education system, but it’s nothing to write home about. They don’t have an income tax, which is nice if you’re greedy and want the rest of us to foot the bill (and if you don’t mind the fact that the state rolls your estate for money when you die). You would think, as one of the most populous state they’d have more going for them than just being “The Pretty One”, but as we’re about to see, this “Pretty One” has been riding the short bus for a long, long time…

What Florida does wrong: Just about everything. Let’s face it. The state has it’s own Fark tag. For those of you who don’t know, Fark.com is a website which lists various interesting, amusing, and downright stupid news stories everyday. They have tags like “Interesting”, “Cool”, and “Hero” for stories which are impressive and good. For those which outline human stupidity they have tags like “Asinine”, “Stupid”, and “Dumbass”. The site founder, however, noticed that most of the really and truly bizarre news, usually involving people acting dumber than bricks, came from Florida. Thus, there is also a tag on Fark called “Florida”. That’s right, Florida is the only state which is so dumb, that news stories about it need special labeling.

It’s not hard to see why either. Despite having been given one of the largest government installations (Kennedy Space Center), theme parks out the wazoo, and the lion’s share of the citrus industry, it still manages to draw more coins out of the Federal purse than it puts in. Are you seriously telling me that with the fourth largest population in the Union, and the fourth largest economy in the Union, you still need the rest of us to help you pay the bills?!?! BAD FLORIDA!, no cookie for you! The people of Florida need to go sit in the corner, in timeout, and think about how the rest of the top five states manage to pay their bills. Florida gets a D for economy, and that’s being generous! You guys are lucky that I’m saving the F for Arkansas and Mississippi!

Look Florida, you need to realize that you didn’t mature as fast as your population boom would seem to indicate. You’ve got the population, and the income, but like a teenager with her first credit card, you’re living beyond your means, and not properly investing in your future. It’s time to grow up, get a better education, and stop living in our basement.

-Angry Midwesterner


Home ownership has been elevated to a quintessential American right. Having a home (and a mortgage) is proof of your worthiness as a person and as a citizen of the United States. This belief is driving much of the legislation directed at mortgage companies and lenders, and in fact has fueled the Alt-A and sub-prime mortgage explosion. But how reasonable are these expectations?

The National Association of Realtors puts the current ownership (without factoring in foreclosures) at 68.9%. This is confirmed by US Census data. An earlier report of the US Census Bureau data established the home ownership rate at between 64 and 65% up to 1995. Some economists have suggested that the sustainable level of home ownership is around 60%. This means that 40% of the population of the United States should not own a home. At least some local governments appear to understand this. It is illustrative to consider the composition of this 40%.

There are valid life choices that mitigate against home ownership. A young and very mobile population are not good candidates for the commitment that owning a house requires. The real-estate taxes I pay on my house alone would rent a nice apartment for a year. Then there is maintenance, lawn care, etc. Your mobility is restricted if you own a home by the market conditions. Many homeowners are saddled with dual homes and payments when they relocate to change employment until the market improves or the price is reduced to sell. For highly mobile members of the workforce, homeownership is not warranted.

There are also what I classify as two types of mental deficiency: functional and dysfunctional. The functional type includes people who are otherwise normal appearing who can participate in society yet are incapable of planning and making the long term strategies and commitments required to own a home. (Britney Spears comes to mind). They have no awareness of the consequences of their actions in the long term. These people are better served by the rental market.

As for for those with dysfunctional mental deficiencies, state institutions existed in the United States up through the 1950′s to house people with behaviors which were deemed problematic in a free society. These problems could be related to alcoholism, pharmacological dependency, or pathological conditions such as Downs. A lot of these facilities were of the “out of sight, out of mind” class and were bastions of repression and intolerance. (Nursing homes enjoy the same status today.) Coinciding with new liberal thought and an era of enlightened psychological analysis, many of these facilities were shuttered and razed. The result, as should be unsurprising, is that many of the former occupants reverted to their inclinations and live on the streets of our cities — the homeless.

Since they are no longer out of sight, and indeed far too visible, many well-intentioned efforts to provide for them have been initiated. Care for the homeless has been a hue and cry of the liberal left for the last twenty years, interesting in that the ‘problem’ was created by their meddling in the state institutions in the first place. The cynic in me questions why they even bothered since the majority don’t vote anyway. Nonetheless, they are homeless, and well-intentioned people are tasking our legislatures to provide for them. Providing a means for these people to obtain a mortgage is idiocy.

Seattle Hobo
Seattle near Pike’s Place Market, August 30th 2007

Finally there are the homeless by choice. These are the people who would prefer not to appear on the tax rolls and registries of governmental units for whatever reason. To some, it is enduring freedom to do whatever they want, and to do it whenever they please. These have been around for a long time probably commencing with the Revolutionary War — certainly since the Civil War and demonstratively so after the Great Depression. They constitute the tramps, hobos, and sadly, even the bindlestiffs (hobos who robbed the bindles of other hobos).


From these observations, it should be apparent that many citizens are homeless by choice and that no government policy is going to change this. Trying to increase home ownership over a demonstratively sustainable level has accomplished nothing except contributing to the current subprime mess.

President Bush’s new (and DOA at the House) $3.1 trillion dollar budget projects that, by September 30, 2008 — the end of the current Federal fiscal year — the shortfall over revenues will be $410 billion. The House majority party is salivating over the choice chops of political fodder this provides in an election year, while at the same time patting themselves on the back for delivering a $150 billion stimulus package to the economy, which does nothing to stimulate the economy. Because this stimulus spending is short term, the package outlay translates dollar for dollar directly to the deficit. (To be fair, the President has signed off on this package also in the spirit of true bipartisanship — lookout taxpayer!)

I consider myself somewhat prudent in that while I have a mortgage, the P&I seldom exceeds $1000 a month (it’s an ARM and thus varies with LIBOR); I don’t have any outstanding credit card debt — I am a transactor rather than a revolver; and I have some investments and savings.

The Federal Reserve has reduced interest rates in the last few months by almost 2 points. This is to bolster the economy (as perceived through the lens of the equities and bond markets). The markets have rallied, and then sunk as the impact is absorbed and evaluated. Democrats in Congress are talking about not being able to ‘afford extending the Bush tax cuts‘ and not being able to ‘afford the revocation of the AMT‘. They are also talking about expanding many programs.

What does this all mean to me?

My ARM resets every February based on the preceding six months LIBOR so the reduction of the Fed rate is likely to have little impact on my P&I. Additionally, since the LIBOR has lately decoupled from the Fed rate there is no guarantee that any Fed action will lower LIBOR. Credit card issuers adjust their loan rates monthly, usually based on 10-12% over the Fed rate, so that they can maintain a good net interest margin. However, since I am prudent and have no revolving card debt, I obtain no benefit from this. Since the rate goes down, so does the interest accrued to my meager savings and money market accounts. Current savings rates are less than the CPI so in terms of dollar denominated spending power, the value of my savings actually decreases.

One effect of the cuts manifests in the dollar’s value compared with other currencies. The dollar has achieved new lows. As a result, dollar denominated commodities such as oil and grain, have increased in terms of price. The value of a barrel of oil is the same or slightly rising (due to demand) but the value of the dollar is falling meaning that you need more of them to buy that barrel. Consequently, gasoline is hovering near $3.00 per gallon and can only rise as demand picks up again. Consequence to me: I have to pay more to get to work and back to buy fuel. I have to spend more of my pay to keep my house heated in the winter and to pay for electricity.

Policy decisions in Congress, particularly with the ethanol alternative fuel initiative, have also had their effect. These efforts are a derivative effect to mitigate the higher oil prices. Subsidies to ethanol producers — again an expense supported by taxes — have driven corn prices higher. Basic grain products have increased in price, cattle feed and thus meat has increased in price, and since corn syrup is used in about everything, most other processed foods have increased in price. Consequences to me: inflation.

One of the reasons that is used to support the package is that the liquidity of the financial markets is being reduced. The reason for that is simple — bankers don’t have a good feel anymore for what an asset is worth, and consequently are reluctant to lend money against that asset. Multiple levels of risk diversification haven’t quite worked out as planned. While I am a fan of and support securitization, the packaging of asset and mortgage backed securities with credit enhancements and credit default swaps constituted building a house of cards. Young financial engineers with little experience in the downside of things spun up an edifice of risk that is still in the process of toppling. But the Fed has already provided an answer to the liquidity problem through its discount window where banks are assured of obtaining the capital they need. The stimulus package doesn’t affect this. By viewing the economy entirely through the lens of the financial market, rate cuts only reinforces risky behavior. The Fed action is predicated on the premise (unsubstantiated) that whatever affects the markets eventually affects the general economy.

Finally, it seems as if Congress doesn’t learn anything. If anything was clearly demonstrated by the Bush tax cuts, it was Laffer’s theorem that there is an optimum taxation rate to provide maximum revenue. Since the stimulus package will increase the deficit, the inevitable result will be a call for an increase in taxes. The result of that will be a slowdown of the economy, a decrease in tax revenue, which will result is still higher deficits. Plus, the effect will flow down to the States and their revenue streams. All of the ‘good’ and ‘beneficial’ programs will be strained and States and Cities will attempt to make up the shortfall. Consequence to me: My take-home pay decreases as my fed taxes increase. My property tax component which is now slightly less than my P&I amount will exceed it and I will absorb more of the burden of government.

The reason that the market has blipped higher and then reset is that investors collectively know these things. This non-stimulus stimulus package offers no long term market or economic benefit. This package and the rate cut itself is a profligate renunciation of fiscal prudence. The current set of policies rewards the behavior the current Congress rails about: the lack of savings of US citizens; an excessive burden of credit card debt; highly leveraged mortgages; overreliance on oil.

Here is my table of consequences:

Result/Effect Prudent Man Profligate Consumer
Gasoline Prices Screwed Screwed
Leveraged Mortgage Not Applicable Bailout
Savings Reduced Value Say What?
Food Prices Higher Higher
Credit Card Payments No Effect Lower
Risky Financial Behavior No Effect Rewarded
Income Taxes Increased Likely Exempt
Property Taxes Increased Dude! I rent.

So!

Never one to bitch without offering a solution, here is what we need to do:

  • Actually limit federal and state spending. Cut agency staff and eliminate costly programs which do not perform. Insure each agency has a performance metric upon which future funding is based.
  • Stop adding new entitlement classes to existing entitlements of Medicare and Social Security. Take a close look at the implementation to insure that the program is not driving UP the cost of health care.
  • Eliminate tax deductions on corporate contributions for employee health care.
  • Increase the Fed Rate by 3 full points. The market will take a dive. So the next day …
  • Announce the elimination of the AMT (and follow through) and make a permanent tax rate of 10% ($20,000 < Income < $250,000) and 22% (Income > $250,000).
  • Completely eliminate capital gains tax.
  • Eliminate corporate income tax. (This is just another tax on the consumer , since it’s passed through).

Basically, fix the tax problem and all other problems will fall into line. There is a reason why formerly Communist countries have gone to flat taxes and low rates.

The taste of succulent albacore with a hint of wasabi and soy sauce… Eel perfectly laid out over rice… A tasty roll of crab, expertly wrapped in fresh seaweed. For many, sushi is a tasty way to break free from the tyranny of bland, generic American cuisine. But wait just a minute Ms. Sashimi! Before you have another bite, realize this: When you dine on sushi, you dine with the Reverend Moon!

That’s right, that tasty bit of fish puts you in league with the Unification Church, and it’s leader the enigmatic Rev. Sun Myung Moon. But what do you mean, Angry New Mexican? I don’t believe in mass weddings, the insufficiency of Christ’s sacrifice courtesy of John the Baptist’s failings or a literal kingdom of God on earth. I mean, I don’t even read the Washington Times, a redoubt of the Moonies since its founding. How can I possibly be in league with the Moonies?

My dear sushi-eating readers, you are in league with Rev. Moon, and I’m about to explain why. To start off with, none of this is “new.” The Chicago Tribune and the East Bay Express pointed this out several years ago. But time and time again, I’ve found the American people woefully unaware of their role in the New World Order [Moonie Edition]. You see, Rev. Moon’s route to your California roll was revealed to the world in 1980 with his speech the Way of Tuna. In it Rev. Moon outlines his plan to build the Kingdom of Heaven on earth starting first with the oceans, hence the Way of Tuna. The means is simple — build a Korean chaebol, of the likes of Samsung or Hyundai (whose yes-men seem to alternate control of South Korea’s government), but build this chaebol in fish. The building of ships, fishing and distribution network in the US and Korea will all exist in one big happy (Moonie) family, under the guise True World Foods.

Rev. Moon started assembling his empire in the late 70′s, buying key companies and slowly taking over the town of Gloucester, MA. The Moonie fisherman have since also moved into Bayou La Batre, AL and Kodiak, AK. Gloucester does much of the processing and their 22 distribution centers are located in places like Elizabeth, NJ and Elk Grove Village, IL. According to The Trib, TWF brings in $250 million dollars a year in revenues. While not a monopoly, TWF does have a substantial market share, and taking direction from Rev. Moon, has played a key role in the sushi explosion in the US in the last 30 years. On the TWF site, I found a choice quote, I felt our readers would enjoy:

“What we believe makes True World Foods LLC unique in the marketplace is our corporate culture. Its underlying principles are that we look to live our lives for the sake of others, believe in the philosophy of oneness and instill the idea of teamwork to all our employees.”

Oneness indeed… how wonderfully Moonie. So before you have that next yummy California roll, just remember: The Reverend Moon thanks you for your investment.

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Aside: You may notice the “Hates America” tag. I have decided, following the Mildly Piqued Academician (in homage to Angry Midwesterner), to tag all my rants with “Hates America” from here on out. I give it a fig leaf of justification by noting that readers of the Washington Times are part of the Grand Neoconservative Conspiracy (TM), and therefore must hate America.

Occasionally on The 12 Angry Men, we will post rants from invited guests. In lieu of our normally scheduled segment, today we feature an invited rant, from an Angry Guest Woman. You may remember our current guest from her previous appearence when she ranted about poor service, and tipping. - The Staff of The 12 Angry Men

My company, like many others, decided a few years ago to outsource all IT-related work in an effort to “save money” and have more “effective” business practices by limiting the people who worked on our IT systems to “specialists.” Of course, in reality, we ended up with the opposite situation.

Sure, there were the comical incidents associated with initial setup. Like the time I ordered my first Linux box through the new IT contract. It arrived, carried by a teen-aged-looking guy with slicked-back hair, wearing chains, presumably required to keep his pants covering the bottom half of his boxer shorts, whose cologne I started to smell about 10 minutes before he entered my building. He had a set of Linux CD’s in his hands and absolutely no clue how to use them. I ended up giving him a lesson on how to install Linux. (He had never done this before whereas I had trouble remembering how many Linux boxes I had installed.) He insisted on driving the entire time because he was the “specialist” and I was not. Incidentally, upon completion of my setup, several key settings needed to be fixed. Yet I was not allowed to have the root password or su power on my box so I had to keep calling the teenager and his associates to do things like set the correct date on my box. Each time he had to call me to ask how to do this; or just give me the password and then change it again when I was done. Apparently setting the date and time is not intuitive to some IT professionals.

Since then, I have taken the company’s system administration certification exam, applied to administer my own box, and have had relatively few problems, except having to re-negotiate my status every time someone new sees I’m defying the system. But, my boxes have consistently worked, no thanks to our IT contractors.

Well — until the *only* thing of mine over which IT has control, my email, stopped working yesterday. I kept getting weird server errors whenever my email program attempted to connect to the server to send/receive messages. After we went through the normal process of me calling; getting someone who has never heard of email but promises to have someone else call me back; and 5 different people calling me back with different reasons why it didn’t work AFTER insisting that clearly their server errors must be caused by the fact that I’m running Linux and my telling them they’re full of it because server errors occur *on* the server, we have the problem solved. Despite the fact that I was told that IT did not know they were going to start expiring passwords, apparently my email password had expired. But they couldn’t tell this had happened and they couldn’t notify me of the status of my email account because… get this… (this is my favorite IT excuse EVER) they didn’t have my email address!!!!! I should win an Oscar for making it through two phone calls this morning without bursting into laughter while two different men explained to me in very serious voices that my email address was not in their system (the system of the people who CREATED and ASSIGNED my email address and who RUN the email servers!) and that they needed to enter it. The first guy called to inform me of this epiphany. The second one called to check that they had entered my email address correctly. I presume both of them found my phone number in our company directory. (Incidentally, my copy of the company directory also lists email addresses.)

My sides hurt now.

When I stopped laughing, I was still unable to change my password because the web interface, which is the only way to do this from Linux, was broken. In response, IT has just released a statement saying that all of their problems are being caused by people running non-standard desktops and has issued a ruling that everyone must now use the same standard Windows desktop, with a few exceptions for Mac. I have been ordered to give up all of my boxes and replace them with one Windows box, which will have exactly the same installation as every other box at the company, including the machines running specialized equipment in the research labs and the box they give to our secretary. Did I mention that my job is to do research? I write experimental software for a living. On a machine with no compilers (because why does the secretary across the hall need a compiler?), this should be very interesting. Then there’s the issue that a lot of the software is written for operating systems that are not Windows… I complained to the decision-making head of IT about this change and he didn’t see a problem. Why am I not surprised? Probably because the person I spoke to didn’t know what a compiler was.

I’m off to fight again for the right to have a computer I can use to do work on. Please, if you’re a manager out there, think long and hard before outsourcing your IT department to another company. Each year or three we change IT contract companies, but they’re all the same: they charge you too much; pay their employees so little that none of them stay to complete the “training” process; and waste your employees time while contributing to your IT problems instead of solving them. Then they fill out their own “customer reviews” instead of sending them to the employees, like they’re supposed to, so they insure they will keep the contract. I’ll hold out as long as I can in an effort to be able to effectively do my job. Each time our entire building is taken down by a computer virus and my Linux box is one of the few machines left standing, I’ll take the time to smile and feel vindicated.

- Angry East Coast Guest Woman

If you read Slashdot frequently, you’ll find that in the midst of the Windows bashing and Me > You flame fests, the name of Ron Paul is often mentioned in hushed tones as the Republican Libertarian messiah who will rescue Amerika America from The Great Satan (aka George W. Bush). From reading the comments of the barely literate masses, you’d think that Ron Paul inspires more interest than Natalie Portman, naked and petrified. His die-had partisans wet themselves off the fact that he raised $4 million off the internet. Combining that with the $4 million he raised in “meatspace,” that puts him on par with Joe Biden, and behind Chris Dodd and Bill Richardson in the fund raising race. Real impressive, Ron… you’re running neck-a-neck with three candidates who combine for less than 10% of likely primary voters. I’m impressed… NOT!

If I may for a moment piggy-back on the elitist sentiments often displayed by my colleagues, the “masses,” much like Mr. Paul’s partisans, who are rumored to groan “Brains!” during campaign rallies, are dead wrong. Ron Paul, though he has some attractive viewpoints, like being against the war in Iraq (though this is because he’s a rank isolationist, excuse me, noninterventionist) and pro-life (because even children in the womb have a right to property), Ron Paul firmly falls in to the ranks of the bat-shit insane. For those who’ve drunk the libertarian Kool-Aid, I’d like to convict Mr. Paul, not on so-called libertarian positions as espoused by the crazies, but on his own words and positions. “Real Libertarians” might not believe X, Y or Z, but Mr. Paul does, and a just condemnation will be his.

The Environment
Libertarianism, as a philosophy stands behind the oppression of the weak by the strong in the name of private property. The classic libertarian position on the environment falls along the lines — “It’s my f#@*ing property and I’ll do with it as I please.” Mr. Paul states his opposition to any sort of environmental protection law such as when he proposed a bill to repeal the clean water act. But Mr. Paul, unlike many of his libertarian counterparts, has left the pre-Sumerian age, and realized that what I do with my property can cause environmental harm to someone else’s. Thus, Mr. Paul, inherently distrustful of the evils of Big Government[TM] proposes his solution, which I quote: “If your property is being damaged, you have every right to sue the polluter.” That’s right, the answer to evil Big Government[TM] environmental law is lawyers, lots and lots of lawyers. Forget our elected representatives in Congress, the correct people to decide on the cost of the damage you cause to me by your polluting ways are the unelected judges in the judiciary. Mr. Paul’s stinging critiques of the UN and NAFTA for being “unelected” start to ring hollow. Imagine the look in the eyes of John Edwards’ trial lawyer buddies should this bit of Ron Paul insanity to come to pass — they’ll be seeing big, big, big bucks from all the litigation. Forget an honest day’s work, in Mr. Paul’s America, being an ambulance-chasing lawyer is the way to make it big… and you can help the environment too.

The Gold Standard
Mr. Paul’s long-standing dislike of the federal reserve is well noted in his diatribe on the gold standard. Mr. Paul rants about the evils of so-called “fiat currency” and sees the only solution in the gold standard. Unfortunately for Mr. Paul, all of his fancy education has left him educated stupid on the issue. There are two fundamental problems with Mr. Paul’s logic: a fundamental misunderstanding of currency exchange and a fundamental misunderstanding of the value of gold.

First, we must understand that money is subject to the same laws of economics as anything else, from soup to nuts. This means that if more people want to sell dollars than want to buy dollars, the price of dollars go down. This is why the current account balance is one of the two major contributors to the underlying value of a currency. The United States has a large negative current account balance, aka we import much more than we export. The importers want to sell dollars, to buy the local currencies where they produce goods, while exporters want to buy dollars and get rid of the local currencies where they sell goods. Since there’s more importing and exporting, more people want to sell dollars than buy them. This means that the price of the US dollar decreases. This problem is (in the long term) self-correcting (imports cost more and exports cost less) but that doesn’t mean a negative current-account balance won’t wreck havoc in the short term.

The second major contributor to the underlying value of a currency is the money supply. The more money there is, the less it’s worth in a certain sense. This “cheapening” of money can be crudely approximated using the inflation rate (more sophisticated measures, like M1 are available, but for our purposes today, inflation suffices). If the money supply is being printed to the point of worthlessness (like Robert Mugabe‘s Zimbabwe), inflation number should be high. In the US inflation numbers are low (and have been in the 1-5% range since the early 1980′s). This means that the money supply, about the Fed’s control of which Mr. Paul complains constantly, isn’t the cause of the weakness of the US Dollar. The cause is the current account balance, which the Fed has no control over.

Second, Mr. Paul’s understanding of gold is fundamentally flawed. Unlike wheat (which is edible), gold has almost no inherent value to a human person. Barring a few uses in high-end electronics, gold is exclusively used in jewelry. Translation: We don’t really need gold, we want it because it is pretty. It has a high value because the demand for pretty exceeds the supply of it. If I could perform alchemy and turn lead into gold, gold would be worthless. This means that the big difference between gold and a “fiat currency” like the dollar is in supply. Neither has any (meaningful) intrinsic value. The scarier problem with gold is who control’s the supply. Unlike the Fed, which is part of the US gov’t, the supply of gold is controlled by mining companies, like Anglo-American, historically the gold arm of the DeBeers cartel. In Mr. Paul’s opinion, allowing a foreign cartel to control America’s money supply is the superior choice for America. This seems to clash mightily with Mr. Paul’s isolationist non-interventionist tendencies. But Mr. Paul doesn’t need to double-think this one, because he hasn’t bothered to think things through in the first place. History is pretty damning. If you look at the 1850′s the gold rush in America (which then had a gold/silver standard) caused a 30% increase in wholesale prices in five years. A switch to a strict gold standard in the “Crime of 1873″ lead to a depression so great its like would not be seen again until 1932. But Mr. Paul’s short-sighted version of history neglects both of these calamities.

Conclusions
I could go on and on about Mr. Paul being a few cards short of 52, if you catch my drift, but these sites have done the job pretty well. My favorite gems from Mr. Paul’s legislative record include trying to ban flag burning (what a libertarian proposal!) and abolishing basically every form of federal tax (which would allow us to pay for our military, how exactly?). All told, Mr. Paul is the latest example of the sorry mental state of America’s Libertarian movement. It’s a shame they have to take civil liberties down with them.

This article is the first in a 52 part weekly series on the United States of America. It’s a chance to celebrate the diversity of our nation, and to educate ourselves about the members of our union, both the States and the Territories. We encourage you to comment and share you thoughts on the States, and hope you learn something new about each of the valuable members of our wonderful Union.
- The Staff of The 12 Angry Men


I’ve been planning this series of articles for a while now, and have been trying to decide which state to lead it off with. I could have gone alphabetically, but I thought it would be better to choose an order than meant something to me. I’ve chosen to lead with Indiana, as of all states in the Union, Indiana is the one which seems the most like home to me, even though I’ve never actually lived there. I’ve got a lot of family in Indiana, and spent a good deal of my summers in the state. Even though, in many ways, Indiana is the oddball of the Midwest, it’s still some place I always feel welcomed, and a place I think of fondly. As such, it seemed a natural state to introduce first.

Quick Facts about Indiana
NameIndiana
Admission to UnionDec 11th, 1816
Population6,313,520(15th)
Population Density169.5/sq mi (16th)
Area36,418 sq mi (38th)
Gross State Product$248 billion (16th)
Tax Burden-$0.03




Indiana was the 19th state admitted to the Union, and is solidly in the Midwest, which of course makes it one of my favorites. It resembles the other core Midwestern states culturally, and economically, having a population which is based in a few large cities, surrounded by little sprawl or suburban regions, and vast nearly flat country side. Due to the extremely fertile soil, almost every inch of the state is farmed. Like most of the Midwest, it industrialized early, and throughout most of the 20th century relied on manufacturing and other industrial jobs.

While many short sighted individuals have used the term “Rust Belt” to refer to parts of the North which suffered economically after the loss of American industry, the term really doesn’t apply to Indiana. As one of the few states to carry a tax burden (for every $1.00 paid in taxes in Indiana, only $0.97 are returned by the Federal Government), Indianans help the other states in this category to carry the slack from most of the USA. Their high Gross State Product puts them on par with such nations as South Africa, and Denmark, and actually higher than Argentina, Iran, or Ireland. Not bad for a bunch of rednecks, huh?

What Indiana does right: Quite a lot actually. Between a diversified economy which leads the nation in biofuels, and comes in second in pharmaceuticals, and a stellar education program which leads the nation in foreign applicants, Indiana is doing a lot to ensure their future success. They get an A+ for economy both for their booming economic sectors, their commitment to education, and more importantly because they don’t shoulder the rest of the Union with any economic burden. They’ve also managed to strike a nice balance between progress and the environment. The beaches at Indiana Dunes National Lakeshore rival those of the Mediterranean, with azure blue waters, and soft white sand. Parks and natural areas are spread in healthy measure across the state, and even in a city as big as Indianapolis it is easy to find a park in which the city itself seems to disappear. On the other hand, the state is home to Indianapolis, one of the largest and most dynamic cities in America, which features a rich cultural scene, museums, and a breathtaking canal district which features fountains, gondola rides, and numerous hanging gardens.

What Indiana does wrong: Let’s face it. People from Indiana are Hill Billies . That’s right, I said it, Hoosiers (a term which folks from Indiana don’t even understand) are good old fashioned, rednecked Hicks. In fact, given the absence of hills, they’re not even hill billies. Better just call them Hick Billies and be done with it. When it really comes down to brass tacks, no matter how well they compare to the rest of America, in the Midwest they’re the red headed stepchild. They’re low on population, and despite their great education program (maybe they’re lacking enough iodine…) they’re a little low in other categories as well. Out of all the Midwestern states they are the single solitary one to speak with an accent. Thick, twangy, drawling accents, all of them. We love you Indiana, we really do, but you need to learn that there isn’t a single “R” in Washington, that “think” and “thank” do not sound the same, and that stream running through your back yard is a creek, not a crick. When it comes down to it, no matter how successful you are as a state, you just don’t clean up well. That’s why your neighbors Illinois, Michigan, and Ohio will never invite you to any fancy parties, so you always get stuck drinking whiskey with Kentucky, while you shoot cans off the broken down car you’ve got jacked up on cinder blocks in your front lawn.

Seriously Indiana, you’re so close to being a really high class state. You’ve got everything, education, beautiful vacation spots, a roaring economy, and one of the nicest, cleanest cities in the world. Just do us one favor. Leave the overalls at home?

-Angry Midwesterner


This article is the second in an ongoing series about the currency of the USA. For the first article please see Penny Lover, by Mildly Piqued Academician.


“The penny is falling, the nickel is falling!” comes the cry of Chicken Little. Chicken Little is not alone in his fear that disaster is looming for the Penny and Nickel, the long time base of US currency. In addition to inflation causing the value of pennies to decrease as discussed by my fellow writer, the rising costs of copper, zinc and nickel have worked in tandem to bring about a situation where the metal in a penny or nickel is now worth more than the face value of the coin itself (though it isn’t clear the prices will remain high). The real kicker came this year when the US Treasury announced that it would be placing limits on the number of these coins that travelers could remove from the nation, and that it was making it illegal to melt the coins down to extract their base metals.

The concern stems from the fact that the metal contained in a penny is now worth around $0.0173, and the metal in a nickel is worth around $0.0834[1]. While it is still possible that the US government is making money from minting pennies and nickels (due to the long life span of a coin amortizing the cost of minting and materials), it has created a damaging black market for the coins themselves. Obviously something must be done to fix this problem beyond toothless legislation. While some call for the elimination of the penny and the nickel, I see a far better answer. Currency debasement.

Debasement of currency occurs when the metal content of a coin is altered such that the total cost of the materials is below the value of the coin itself. As an example, the US penny was debased in 1982 when the Mint switched from pure copper to copper plated zinc. The result was higher profits for the mint per coin struck, and an extended life span for the penny. The penny was debased by an even more dramatic level in 1943 when the US mint struck steel pennies due to the large wartime copper needs. Given that we haven’t been on a gold or silver standard in a long time, but rather a system of fiat currency where value is determined by the faith and credit of our government and not the value of materials, this change is an easy one. Simply begin minting the pennies and nickels out of another compound which is less valuable and our problem is solved.

So why keep the penny around? Some have posited that nuking the penny wouldn’t result in appreciable financial loss for Americans, though it is hard to see why. Even if we take such arguments at face value, they begin to look shakey when one realizes the sheer number of transactions which would be affected by eliminating the penny. Many stores would end up rounding the familiar prices which end in 99 cents to the next highest dollar, resulting in a price bump for consumers. Given the sheer number of consumer transactions each year (7-11 alone reports 2.19 billion transactions at its US stores each year) even a small increase means a big hit to the American consumer as a whole. The total cost of this “rounding tax” to consumers has been estimated at $2 billion in just five years. Given that these figures only take into account the elimination of the penny, and not the nickel, it quickly becomes obvious that we can’t just do away with the coins altogether without paying a steep price (a fact Canada, the EU, and Japan have also realized).

The haters will of course argue long and hard against this scheme, especially the internet crack pots who try and equate fiat currency with theft, but in the long run this sort of plan will be good for our economy, and help to preserve the finer level of resolution the penny and nickel provide to us, saving American consumers quite a bit of money, and helping the Mint continue to profit off of pennies and nickels.

-Angry Midwesterner



[1]Arbitrage, the Washington way…. CNN Money, 2007.

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