The Security and Exchange Commission was created after Great Depression 1.0 with a mission to regulate the stock market and prevent Great Depression 2.0. Remember that Great Depression 1.0 was triggered by the stock market crash of 1929. The Roosevelt administration wanted a watchdog agency to prevent practices like margin selling that had toppled the market in 1929.
Same agency is still in business, with a $1 billion dollar budget. They failed to prevent Great Depression 2.0. Clearly they are a waste of money. Let's shut them down and apply that $1 billion to deficit reduction.
Monday, February 15, 2010
Sunday, February 14, 2010
Gaming Gambling focus group
At the invitation of a friend, I went out to the Littleton Area Learning Center, actually the old Littleton Coin Co building, out Union St past LaHoute's. There were maybe 25 people, including a number of political folk of my acquaintance. Under the guidance of facilitators, we discussed increasing legal gambling in NH. There is some legal betting at the racetrack, the discussion was about increasing it, opening Vegas style casinos, and allowing slot machines. After a whole day of gently facilitated discussion, the sense of the meeting was this. The downside of legal gambling, such as changing the tone of NH to a Las Vegas tone, facilitating compulsive gamblers into ruining themselves, the tacky nature of casinos, casino people and casino customers, far outweighed the possibility of increased public revenue from casino taxes. The projected revenue wasn't very big, and we assumed the projections were optimistic. Real world revenue will likely be less than projected.
Under the gentle facilitation, we never quite wrote all this down. Presumably the facilitators will write things up to suit themselves afterward. The whole thing was done by UNH people with state funding, maybe $30K of funding. They bought coffee and donuts and a sandwich lunch. It was an interesting day, but as a method of determining public policy it's kinda flaky. The UNH people have a free hand interpreting what was said, the people attending were by no means a representative group of citizens, we were all political people with various agenda's. Many of us started the session with a fairly neutral viewpoint and by the end of the session we had a much more negative viewpoint about legalizing more gambling.
Interesting euphemisms turned up. It's "gaming" not "gambling". It's "video gaming terminal" rather than slot machine. It's "racino" rather than race track.
For those more interested, Senate Bill 489 (SB498) is before the NH senate right now and can be seen online with a bit of googling.
Under the gentle facilitation, we never quite wrote all this down. Presumably the facilitators will write things up to suit themselves afterward. The whole thing was done by UNH people with state funding, maybe $30K of funding. They bought coffee and donuts and a sandwich lunch. It was an interesting day, but as a method of determining public policy it's kinda flaky. The UNH people have a free hand interpreting what was said, the people attending were by no means a representative group of citizens, we were all political people with various agenda's. Many of us started the session with a fairly neutral viewpoint and by the end of the session we had a much more negative viewpoint about legalizing more gambling.
Interesting euphemisms turned up. It's "gaming" not "gambling". It's "video gaming terminal" rather than slot machine. It's "racino" rather than race track.
For those more interested, Senate Bill 489 (SB498) is before the NH senate right now and can be seen online with a bit of googling.
Thursday, February 11, 2010
What's the difference between Tea Party and Republican Party?
Simple. The Tea Party doesn't talk about "social" issues (aka wedge issues). I haven't heard a peep about gay rights, gay marriage, abortion, and drugs out of the Tea Party. Tea Party is about taxes, spending, and deficits.
The Republicans should take lessons.
The Republicans should take lessons.
Whither NASA?
The Space Shuttle is coming to end-of-life. NASA plans to stop operating it this year. This decision had two drivers,
1. The Shuttle is dangerous to fly.
2. The Shuttle is very expensive, even when it doesn't fly.
NASA originally planned to replace the shuttle with a step backwards, to expendable boosters and capsules that re entered by parachute. splashed down and got picked up by the Navy. To this end, NASA started development of a rocket, Ares I, and a big five man capsule (Orion). Ares I got as far as a test launch last October. Last week the money ran out, Obama decided to cut NASA funding.
NASA could have saved all the Ares I rocket development money by simply purchasing off-the-shelf Delta V rockets from Boeing. Delta V is in production, development and testing is complete and paid for, and it launches commercial satellites on a weekly basis. Delta is just as powerful as Aries I and can fly any mission Aries I could.
NASA argued that the Delta V wasn't "man rated". "Man-rated" means the builder has done a lot of extra paperwork showing how safe the rocket is. Then NASA argued that the Aries (never flown) would be safer than Delta V (been flying for years). This arguement is unconvincing to anyone with actual flightline experience, like me.
In actual fact, the satellites launched by Delta cost billions of dollars and a launch failure is a company wrecking catastrophe. Every thing that can be done to insure a successful launch has been done, Delta is as safe a rocket as can be built. It benefits from years of flight experience that allows the engineers to improve weak points. It's a mature design with all the bugs worked out. Ares was a dirty sheet of paper design (it reused Shuttle engines) with countless bugs yet to be discovered and fixed.
In real life, the NASA people wanted the challenge, the fun, and the funding, of a new hardware design. So they didn't do the economical and conservative thing, buy off the shelf, they started up a new rocket program and hoped the funding would appear. Well, the finding didn't appear and US astronauts will be riding Russian capsules to the International Space Station for years, perhaps forever.
A Russian ticket to the ISS costs $50 million dollars. I wonder what a Delta V launch, with a 5 man Orion capsule would cost.
1. The Shuttle is dangerous to fly.
2. The Shuttle is very expensive, even when it doesn't fly.
NASA originally planned to replace the shuttle with a step backwards, to expendable boosters and capsules that re entered by parachute. splashed down and got picked up by the Navy. To this end, NASA started development of a rocket, Ares I, and a big five man capsule (Orion). Ares I got as far as a test launch last October. Last week the money ran out, Obama decided to cut NASA funding.
NASA could have saved all the Ares I rocket development money by simply purchasing off-the-shelf Delta V rockets from Boeing. Delta V is in production, development and testing is complete and paid for, and it launches commercial satellites on a weekly basis. Delta is just as powerful as Aries I and can fly any mission Aries I could.
NASA argued that the Delta V wasn't "man rated". "Man-rated" means the builder has done a lot of extra paperwork showing how safe the rocket is. Then NASA argued that the Aries (never flown) would be safer than Delta V (been flying for years). This arguement is unconvincing to anyone with actual flightline experience, like me.
In actual fact, the satellites launched by Delta cost billions of dollars and a launch failure is a company wrecking catastrophe. Every thing that can be done to insure a successful launch has been done, Delta is as safe a rocket as can be built. It benefits from years of flight experience that allows the engineers to improve weak points. It's a mature design with all the bugs worked out. Ares was a dirty sheet of paper design (it reused Shuttle engines) with countless bugs yet to be discovered and fixed.
In real life, the NASA people wanted the challenge, the fun, and the funding, of a new hardware design. So they didn't do the economical and conservative thing, buy off the shelf, they started up a new rocket program and hoped the funding would appear. Well, the finding didn't appear and US astronauts will be riding Russian capsules to the International Space Station for years, perhaps forever.
A Russian ticket to the ISS costs $50 million dollars. I wonder what a Delta V launch, with a 5 man Orion capsule would cost.
Tuesday, February 9, 2010
Cut spending to avoid deficit disaster
The Obama budget with $2 trillion dollar deficits isn't going to work. Obama has jacked federal spending up to 25% of GNP. That's way way up from the historical average of 19% going back to WWII. And it's way way short of tax revenues which have sunk to 14% of GNP due to Great Depression 2.0. The deficit (difference between spending and tax revenues) come out to 11% of GNP.
The only way to survive is to cut the spending. Not freeze it, cut it back to 19% of GNP, or farther. This is hard, 'cause those receiving our tax money will fight like tigers to keep receiving it. The general taxpayers don't get as motivated as the feeders from the federal trough do. Perhaps the Tea Party can help out here.
What to cut? Answer, anything you can.
Start with farm subsidies. There aren't very many farmers in the country, we ought to be able to out vote them.
Turn off the federal highway program. We built the Interstate system in the '60's and 70's. It's finished, done. we have superb highways to every corner of the nation. Let the states do the maintainance and stop rebuilding them.
Close down EPA. They were created to clean up smog over the cities. That's done, air over Boston, NYC, DC and Philly is clear and blue, not the yellow muckiness we had in 1970.
Close down OSHA. The real work of safety inspection is done by the insurance companies. Every business carries insurance, and those insurance companies hate paying out for injured workers. So they inspect, and tell management to make safety improvements or loose their insurance. OSHA just gets in the way.
All of the above is to show that we are serious. The real budget busters are Medicare, Medicaid and Social Security. They are taking up 75% of federal outlays, and to cut spending, we have to cut these sacred cows.
For Medicare/caid we have to reduce the costs. Start with malpractice reform. Allow interstate sale of health insurance, that's competition and competition always lowers costs. Allow duty free import of drugs from any first world country (Canada!) to bring the price of drugs down out of the stratosphere. Getting these three simple changes thru would make a big improvement. There is a lot more that can be done, but lets make a start.
Social Security is harder. We have paid in all our working life and planned our retirement on the basis of social security income. About all that can be done is raise the retirement age. When Social Security was started, the retirement age was set at 65, and the life expectancy was only 65. In 2010 the retirement age is still 65 but life expectancy has soared up into the 80's. Surely we could arrange to move increase the retirement age, slowly, up to 68 or 70.
The only way to survive is to cut the spending. Not freeze it, cut it back to 19% of GNP, or farther. This is hard, 'cause those receiving our tax money will fight like tigers to keep receiving it. The general taxpayers don't get as motivated as the feeders from the federal trough do. Perhaps the Tea Party can help out here.
What to cut? Answer, anything you can.
Start with farm subsidies. There aren't very many farmers in the country, we ought to be able to out vote them.
Turn off the federal highway program. We built the Interstate system in the '60's and 70's. It's finished, done. we have superb highways to every corner of the nation. Let the states do the maintainance and stop rebuilding them.
Close down EPA. They were created to clean up smog over the cities. That's done, air over Boston, NYC, DC and Philly is clear and blue, not the yellow muckiness we had in 1970.
Close down OSHA. The real work of safety inspection is done by the insurance companies. Every business carries insurance, and those insurance companies hate paying out for injured workers. So they inspect, and tell management to make safety improvements or loose their insurance. OSHA just gets in the way.
All of the above is to show that we are serious. The real budget busters are Medicare, Medicaid and Social Security. They are taking up 75% of federal outlays, and to cut spending, we have to cut these sacred cows.
For Medicare/caid we have to reduce the costs. Start with malpractice reform. Allow interstate sale of health insurance, that's competition and competition always lowers costs. Allow duty free import of drugs from any first world country (Canada!) to bring the price of drugs down out of the stratosphere. Getting these three simple changes thru would make a big improvement. There is a lot more that can be done, but lets make a start.
Social Security is harder. We have paid in all our working life and planned our retirement on the basis of social security income. About all that can be done is raise the retirement age. When Social Security was started, the retirement age was set at 65, and the life expectancy was only 65. In 2010 the retirement age is still 65 but life expectancy has soared up into the 80's. Surely we could arrange to move increase the retirement age, slowly, up to 68 or 70.
Monday, February 8, 2010
The passing game
Super Bowl puts on one helova show. Both sides played a passing game. The quarterbacks were incredibly accurate, it seems like every pass connected, every receiver was covered, the quarterback was always protected. Each pass gained ten yards and first down. Possession of the ball was retained, the teams marched down the field and touchdown.
The passing didn't used to work so well. Used to be a running game, where fast and powerful ball carriers attempted to jam themselves and the ball right thru the defensive line. Not last night, it was all airborne work.
Halftime was spectacular as usual, the singers (the Who) kept their clothes on. The Who is one of my favorites, and were in fine voice last night. Although I did wonder why a band that old was the best pick for Superbowl halftime. Aren't there any newer bands that people like?
The passing didn't used to work so well. Used to be a running game, where fast and powerful ball carriers attempted to jam themselves and the ball right thru the defensive line. Not last night, it was all airborne work.
Halftime was spectacular as usual, the singers (the Who) kept their clothes on. The Who is one of my favorites, and were in fine voice last night. Although I did wonder why a band that old was the best pick for Superbowl halftime. Aren't there any newer bands that people like?
Sunday, February 7, 2010
Financial regulation, need there fore
Great Depression 2.0 was caused in part by Wall St bank high stakes gambling. We ought to cool the market down by regulating the things that banks are allowed to invest/speculate in. Real banks take deposits and have taxpayer backed FDIC insurance. If the government guarantees the bank's deposits, then the government had the right to limit the kind of risks the bank can run. In my view banks should not invest/speculate in common stocks, secondary mortgages, mortgage backed securities, credit default swaps, and commodities, including gold. These things are very risky, and do nothing to finance real economic growth or jobs. The purpose of banks is to finance real estate and loan to business and individuals. We ought to write a bank regulation law to forbid bank speculation in risky and unproductive things.
There are a lot of other things out there that look like banks, talk like banks, but don't have deposits and FDIC insurance. They are fake banks. They can speculate to their heart's content, but the government should make absolutely clear that it will never bail them out.
In fact, we should require display of a fake bank sign on the offices of fake banks. Something like "Deposits are NOT insured"
There are a lot of other things out there that look like banks, talk like banks, but don't have deposits and FDIC insurance. They are fake banks. They can speculate to their heart's content, but the government should make absolutely clear that it will never bail them out.
In fact, we should require display of a fake bank sign on the offices of fake banks. Something like "Deposits are NOT insured"
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