The Giant Pool of Money

I was reading the Manteca Bulletin this morning and there was a letter to the editor that talked about which political party was responsible for the "economic meltdown" and the "mortgage crisis." It reminded me of an entertaining and informative radio program I listened to earlier this year on NPR's "This American Life" called "The Giant Pool of Money" (produced by Chicago Public Radio, originally aired May 9, 2008, #355).

This program is a fascinating report on how the global economy was driving mortgage lending in the US and how "the global pool of money" that exists drives the world's economies. It illustrates how intertwined our money is with the rest of the world's. It also illustrates how greed and basic incompetence in interpreting financial data on the probability of foreclosures fueled the housing market collapse.

You can access the program for listening or read the transcript (I recommend listening) at http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1242

Thanksgiving in Manteca

 
Man, Manteca, Calif. Nov 2009.

The trick to “hide the decline.”

I thought this was an interesting development.  Some “hackers” (or more likely some insider) exposed the files and emails from some preeminent scientific institution being funded to “find evidence of Global Warming®.”

I wonder if the whole thing could be the greatest scandal of modern science. 

I note that in a Manteca city council meeting the state forced us to comply with some sort of measures in our “housing element” that would “reduce greenhouse gases.”  Whatever they are.

But you know, the great minds in the State of California often want to be “the first” – to lead the world.  And in the process they tell us what kind of houses we can build and where and what sort of roads to have and were the bus routes should go.  No matter what this does to our economy. 

So while the rest of the world cancels the Copenhagen summit and is glad they didn’t fall for this Global Warming® thing, we in California rushed to saddle ourselves with regulation that will help make us poor poorer and won’t do a thing for “the earth.”  But we’re leading the way!

Climategate: the final nail in the coffin of ‘Anthropogenic Global Warming’? – Telegraph Blogs

Schools are bad for your kids…

I thought this was an interesting (if thorough) read into the problems of the government schools.

How Did We Get Into This Mess? by James Ostrowski

Idiocy in Lodi

What’s wrong with these two stories?

Redevelopment to top Lodi agenda in June

Lodi moves to cap lunch wagons

It seems to me that on the one hand, they are saying the city is poor and blighted and they need to borrow tons of money to “re-develop” the city.  And in the 2nd story, they are “cracking down” on hard working people who are making jobs for themselves, providing a service, feeding their families with their own initiative, etc.

Do you need any better illustration of what’s wrong with the central valley and the People’s Republic of California?

Signs

I wonder what this sign means.  Did the Manteca Bulletin say something about downtown businesses not being supportive enough?

And what exactly does it mean to “support” the efforts of the police dept?  I thought the job of the police dept was to protect the businesses, not the other way around.  hmmm

There were a few of these signs on Yosemite Avenue in the windows of more than one establishment.

Ooops: Fixed name of street.

US embraces communist health care plan as rest of world celebrates the 20th anniversary of the end of communism

Yesterday marked the 20th anniversary of the day the Berlin wall was torn down. Symbolically and idealogically it was the end of Communism. Freedom had prevailed. Evil had been conquered. As a child of the 50s, I was taught that the Communists and the Soviet Union were our enemies, they wanted to kill us, to "bury" us. If you are too young to remember air raid drills and "duck and cover" in school, then you probably don't fear communism the way I do. "The Cold War" was real then and we lived with the shadow of nuclear war every day.

Two years before the fall of the wall, President Ronald Reagan stood before the Brandenburg Gate on the 750th anniversary of Berlin and uttered those famous words, "Mr. Gorbachev, tear down this wall!" That marked the beginning of the end of the Berlin Wall and our mortal enemy, the Soviet Union. Ronald Reagan's role in ending the Cold War is often diminished by revisionist historians as if the events "just happened." Time has an article that at least acknowledges the efforts of Reagan and Gorbachev (leader of the USSR) to actively pursue the end of the war and bring freedom to the Eastern Bloc.

The Soviet Union lasted almost 70 years under communist dictatorship and had the second largest economy in the world after the United States. Even so, the US economy eclipsed the USSR's. A failed war with Afghanistan and a failed economy eventually led to the collapse of the communist government. 20 years after the victory of freedom over tyranny, the United States is rushing headlong towards communism at an alarming pace. A failing economy? A war with Afghanistan? What's the answer? Communism!

Manteca Bulletin - Free car wash for veterans Wednesday

As far as I’m concerned, Quicki-Kleen can keep their free car wash for veterans. I see no reason to participate in any public relations stunt that brings credit to the people who orchestrated the bullying of a fellow citizen who wanted to open up a competing car wash.

The owner of Quicki-Kleen was listed among those who led the “cause” of blocking a new car wash from opening in the 300 block of Yosemite Ave a few months ago.

What does this have to do with veterans you ask?

Well what veterans fought for was freedom. That means the freedom to do business back at home. Anyone who would try to block a competitor using socialistic arguments and questionable “petitions drives” is nothing more than a freedom hating bully. All the free car washes in the world won’t make up for that.

Manteca Bulletin - Free car wash for veterans Wednesday

More on cable customers taxed

Two other things I forgot.

Regarding the cable TV tax, the editor claims “There is little doubt the revenue is needed.” Little doubt? “Needed” by whom? For what? There are a lot of us who don’t believe the tremendous growth of government over the years has been a good or “needed” thing.

Next, he says “No one in Manteca at this time should have the stomach to push for new taxes. In time, though, the need will come.”

Why will the need come to raise new taxes? What is going to happen that will cause such a need?

Let me dispel two myths of why people think “new taxes” are “needed.” What about growth of the population? Does that cause the need for “new taxes?” NO! If there are more people, more houses, more businesses, then the government collects more taxes from the new people, houses, etc., in exactly the proportion of the growth.

If the population of Manteca goes from 60,000 to 120,000 there will theoretically be no need for “new taxes!” Why? Because there are twice as many people using government “services” and there will be twice as much tax collected. It all evens out.

Of course this never stops the government propaganda machine from telling us a new tax “is needed” because of “the growth in the population,” but that’s just the way it is.

The other excuse sometimes used is “inflation.” We need to raise taxes because “inflation” has made everything cost more. Sounds half-logical until you think about it. If a loaf of bread costs $1 today they collect x taxes. If the price of a loaf of bread goes to $2, then they collect 2x taxes. In other words, if the cost of everything doubles, then the taxes collected doubles. Once again, everything “evens out.”

No, the real question was raised by the author of A Monetary History of the United States; namely, why were taxes more or less stable at about 7 percent of GDP for the first 150 years of the nation, and then suddenly started skyrocketing in the later part of the 20th century. What was so “needed?” And why is the growth in the cost of government so “inevitable?”

Manteca Bulletin - Cable customers ‘taxed’ by Manteca, satellite users aren’t

Manteca Bulletin - Cable customers ‘taxed’ by Manteca, satellite users aren’t

A couple of comments in this editorial caught my eye.

Nothing illustrates how we underestimate the huge burden of taxation and regulation than the example of the cable TV provider in town (Comcast) and the proliferation of satellite TV.

Sure, the tax is just a few dollars per person. But it adds up when there are thousands of customers! And what about the regulation? We don’t usually think about regulation costing anything, but it’s not cheap to get city permits, to be authorized as the franchise, comply with all the rules and such.

I don’t have to list the costs. The reason is evident: The taxes and regulations are so burdensome that it was less costly to launch a complex scientific device into geo-stationary orbit above the Earth than to pay the taxes and deal with the regulatory hurdles governments put between them and their customers! Not to mention the costs of the receivers in each home capable of decoding signals from outer space.

And the editor bemoans how “unfair” it is that the genius innovators at the satellite TV company “don’t have to pay the cable tax.” Duh! They invented a way to distribute their content without cables. No cables, no tax.

Manteca Bulletin - Cable customers ‘taxed’ by Manteca, satellite users aren’t

p.s. The first person who suggests that the taxation was good because it spurred on innovation will get 20 lashes with the Milton Friedman noodle.

EconTalk | Library of Economics and Liberty

I hope you’ve all been keeping up with your economics education!  Tonight’s podcast on “The Financial Crisis” is almost an hour and a half!  I hope it’s good.  I haven’t listened to it yet.

EconTalk | Library of Economics and Liberty