The G20 has a theme song ... it's the end of the world as we know it

If you are wondering about my title, my reference is not related to CNN.com's apocalyptic insinuation that the U.S. is somehow falling behind other nations economically ... which they then promptly demonstrate is not happening at all, ipso facto, this neat graph: http://money.cnn.com/news/economy/g20/interactive/

What I am referring to is the creation of a G20 pop theme song. Do we really need to dumb everything down so much now so as to invent interest for important events?

This website gives a pretty good explanation:

http://www.allkpop.com/2010/09/20-idol-singers-unite-to-sing-the-g20-seoul-summit-theme-song

This website gives the music video (or 'making of' video...):

http://www.metacafe.com/watch/5388128/2010_g20_seoul_summit_theme_song_lets_go/

I vaguely feel like that old woman who hit Adlai Stevenson after a speech with a sign, and when he asked her why, she said something along the lines of "If you don't know already, then I can't help you."

Fin Reg, fin

Financial Regulatory Reform is now law. President Barack Obama signed the bill into law Wednesday, and what a reception. You would think that reforming the big financial institutions would be really popular with the average American. I mean most Americans think the bailouts were a bad idea according to a recent rassmussen poll.

http://www.rasmussenreports.com/public_content/business/federal_bailout/july_2010/voters_still_think_bailouts_were_a_bad_idea

But only 46% of americans serveyed wanted stricter controls of large banks and financial institutions. While the mention of Wall Street incread the number to 50% that favor stronger controls.

http://thehill.com/blogs/on-the-money/banking-financial-institutions/93433-a-majority-of-americans-support-financial-regulatory-reform-poll-says

But with that being said I am surprised that the number is not higher. I mean every american knows how bad the economy is. Many are out of work and even more know someone who is looking. Yet only half of the country wants these problems to be fixed.

Maybe it is the distrust of government that has pushed the numbers down. Maybe its the fact that the bill is just about 2400 pages and god only knows whats in it. After reading the 17 pages of detailed summary I made it to the last couple of paragraphs and I may have found a reason why people are correct to be concerned about this reform. Now, I do not expect that many people have read the detailed summary. Even among the media I would be shocked if many have read this summary because if I were in the media I would have reported on the last piece of the bill. So what is in the last section of the bill? It is about the Democratic Republic of the Congo's mineral rights. I was an economics major in college and I took a couple of finance classes but we never covered the impact of Congo's minerals on our financial system. Just put the congo section into another bill and pass that. I am on board with almost this entire bill but adress the causes of the financial collapse like the housing market. Congo should have no part in this law. Unless, If only I hadent built my house of Blood Diamonds we never would have had that financial Crisis.

Congo Conflict Minerials:

Manufacturers Disclosure: Requires those who file with the SEC and use minerals originating in the Democratic Republic of Congo in manufacturing to disclose measures taken to exercise due diligence on the source and chain of custody of the materials and the products manufactured.

Illicit Minerals Trade Strategy: Requires the State Department to submit a strategy to address the illicit minerals trade in the region and a map to address links between conflict minerals and armed groups and establish a baseline against which to judge effectiveness.

I found this section in a 17 page summary. Imagine whats in 2400.

Why the US Credit Rating is Safe

With the ever increasing debt of the United States, people have begun questioning the ability of the government to pay it back. Some even suggesting that ratings agency's like Moody's and S&P will down grade our credit rating. The credit rating is important for a couple of different reasons. First, a downgrade will shape the rest of the worlds outlook on our economy and our debt. Second, It will make it more difficult for banks to hold as much of our debt on their balance sheets due to the net capital requirements provisions in the securities and exchange act of 1934. This provision says that banks do not need to hold as much collateral on their books if the ratings agency's rate the debt as AAA. The overall outcome of our credit rating being decreased would be that it will cost us more to borrow. In essence we will be on our way to becoming like Greece. Greece's main problem is their debt is so large that their is no way of paying it back without either defaulting or restructuring their debt. The other alternative in Greece would be to inflate away their debt but since they are part of the Euro the Germans will never allow that to happen since it would mean inflation there as well.

Here is why Moody's and S&P will not down grade the US before after it is too late. Moody's and S&P are Nationally recognized Statistical Ratings Agencies. The United States currently recognizes 7 of them along with Fitch and 4 others. The US also has the power to delist ratings agencies from this list. And Since all new debt issues need to be rated by a Nationally recognized ratings agency any threat to that would be a huge threat to a ratings agencies profitability. This is a risk that the ratings agencies should not take lightly. Now if it were up to me I would get rid of these perverse incentives but since we have the leverage if I were president I would make sure that the ratings agencies knew my position. We have the power, we might as well use it.

If I Were Rich...

Wouldn't it be great to be rich? You wouldn't need to worry about paying the bills or worry where your next meal was going to come from. You could afford your prescription drugs and any other medical treatment. I'm not talking millionaire rich, I am talking hundred millionaire rich. And in many ways money frees people from worry. It also frees them from the need of insurance, since whatever happens they will have enough money just to pay for it out of pocket. Now, it normally makes sense to buy insurance to protect what you have whether it be your home or your health, your life or long term care costs. But none of these are required to be purchased through third parties. Well Except for health insurance in 2014.

Now there has been a lot of discussion about the freedoms we are loosing as part of the health care bill but to me the best illustration of the treachery is the example that follows. There is a rich man who has well over 100 Million Dollars. He is 62 and the year is 2013, he has just learned that he has cancer. The man does not have insurance but since he is rich he can afford to pay for all the services and procedures he needs out of pocket. After a year of treatments he beats the cancer at a cost of 3 Million dollars. He saw the best doctors in the best hospitals. The year is now 2014 and he is required to buy health insurance even though his fortune has grown to 125 million. If he fails to buy something which in this case he doesn't need, since he can afford any medical cost, he can be fined by the IRS up to three percent. So three percent of the 25 million that he made in the past year is 750k. He refuses to pay it since he does not need the insurance so he is thrown in jail for not complying with the IRS law. This most certainly could happen if you had a ballsy rich guy. I wish I had the money because this is something I would personally like to do. Except for the cancer part. This example exposes the tyranny of this legislation for what it really is. Tyranny.

Cut Healthcare Costs

Soooo, Healthcare. It is finally law. And whatever you think about the outcome I keep coming back to the fact that the primary effect of this legislation does not focus on cutting costs. Obama has said that the primary purpose of this legislation is to bend the cost curve. If this was the true focus they could have bent the curve far more effectivly. I never really heard anyone break down what the costs of healthcare actually are. The main costs that are nessassary to deliver any health care are salarys, offices, equipment and administration. You need Dr.s and nurses. You need a hospital or an office. You need bandages and scales. Stethascopes and more. And finally insurance administration which helps reduce fraud in the system and ensures people can afford very expensive procedures. This can be through private insurance companies or through the government. Obama thinks that the problems lie in the administrative side of the equation. The insurance companies are the only part of the process that try to control costs.

Maybe a better way to adress the problem of costs is to look at the actuall delivery of health care. I believe that the single largest problem with the healthcare system today is that the shortage of doctors is driving up salarys. The average hospitalist MD makes 256k per year. Average. Some make more. And they only work one week on one week off. So for 6 months of work they get this type of salary. This is a salaryed job. I understand that the education required is intense but I refuse to believe that this is the natural market price. The real problem is that we dont have enough medical schools to meet the needs of the baby boomer generation. And guess who controls to Medical School accredidation process. Doctors. Through the 17 member Liason Committee on Medical education made up of doctors and medical educators who have a vested interest in keeping supply of doctors low. Since they will make more in the future. Increase the number of medical schools. If the AMA does not want to comply the government has the obligation to ensure that manipulation of the system is not possible. The AMA along with the AAMA are robing the american people. Making huge houses for themselves. Buying boats. Its just way to much money. Their is a market failure which comes out of the fact the federal government allows the AMA to do basically whatever it wants. It is like letting FINRA run the financial industry rather then the SEC. Lets fix this problem which in part is related to the monopoly the AMA holds. I am not advocating breaking up the AMA but it does not more effective oversite. I will try to find more ways to save money in the future but if you dont think more doctors would reduce the cost of health care let me know.

China's Dangerous Equation

In terms of foreign relations there are few basic assumptions that assume the mantle of an article of faith in the goings on of the world. One of these is the notion that China (the PRC not the ROC) is a growing force in the world. Its export-driven economy has weathered the economic downturn probably the most undamaged of any major nation, its productivity and currency holdings are growing, it buys quite a bit of our debt, and its centrally controlled economy has chugged along at roughly a 10 percent growth rate annually since 1978, when some semblance of sanity came to its style of government. It also has over a billion citizens, who are ruled over by a dictatorial government that has long displayed little concern for their well-being or fundamental rights (ignoring even the basic elements of the social compact that justifies a Communist government, which their party claims to be)--this in recent years has been managed by offering a greater standard of living and opportunities at a consumer society- ironic of course in a government that recently celebrated the 60th anniversary of its founding under a Gigantic Poster of Mao. Now whether Mao's Poster would react to the utter abandonment of its principles of creating a nightmarish landscape of deprivation, terror, state-supported mass murder, and misguided attempts at smelting iron/steel in backyard forges... in favor of a nearly corporatist state is not the point of this touching upon-- nor is it meant to be a several pages long hell-stomping of the Chinese people's good name while I extoll American virtue and values (though I yield to no man under 30 in my distrust of and distain for the Chinese government)

What I'm going to mention is that with China's rise, there seems to be a mixture of over-confidence and outright insecurity in their actions towards other countries--this is a nation that after all is presently leading the world in producing wind-turbines (often selling them to western companies and nations)---while also continuing to basically destroy its own environment as the world's largest polluter-- This week two occurences highlighted this-- the Obama Administration's going through with a six-billion dollar arm sale to Taiwan (which Bejing considers to be a break-away province, and has made part of official policy...seriously, their legislature passed a bill stating it legally... that if Taiwan -- known as the Republic of China-- were to actually proclaim de jure independence, as opposed to the de facto of the last 60 years, it would attempt to invade and conquer the island nation) in line with the 1979 Taiwan Relations Act-- in response to which, though they were informed well in advance-- the Chinese government threatened to sanction American companies such as Boeing, involved in the sale, and to increase its oppostion to sanctions against Iran. Chinese prickliness about interference in its own affairs aside--the Chinese government has no scruples about selling weapons to Somali militias, or to African dictators and rebels to ensure access to oil resources-- to say nothing of Kim Jong Il and his gangster nation-state/lunatic asylum in North Korea. Moreover, China continues to receive international development funds (such as in cleaner energy) and excemptions from a number of accords as a developing nation, while it engages in nationalistic economic policies of a distinctly unfriendly nature towards many Western and other Asian nations. The other major powers, both military and economic in East Asia- Japan and South Korea have a level of contempt for the Chinese government's actions. If the Chinese wish to engage in a trade confrontation, their position economically is not as strong as it appears when considering its habit of poking every other major economic power in the eye on political issues-- its view of the Dali Lama as an agitator and its willingness to punish those that meet with him doesn't help their case either.

China's reliance on foreign investment and markets I believe off-sets its advantage in holding debt and currency (ours for example). The fact that they seem to be eager to engage in a tit-for-tat trade conflict over Taiwan and the Dali Lama that can only harm their own interests and reputation (to say nothing of trying to hack Google to get the accounts of dissidents) indicates an insecurity their government has over recent internal instability and the flaws in their system-- when economic growth is their justification for denying basic rights to their citizens, while also tolerating an increasingly sharp divide in the country itself-- what happens when the growth doesn't reach every area or begins to slow? That those in rural regions in China make 3 and a half times less than their urban dwelling countrymen, and that any workers in an industrial setting work in often dangerous--even lethal conditions-- that is a system that, if the country continues to grow more wealthy, will need to be addressed. The over-half of the population that resides in these rural areas will demand some form of benefit or compensation for their conditions, even perhaps an entitlement program-- that provides some form of basic safety-net for seven hundred MILLION people in these areas of poverty, which would also require some form of the same for the more prosperous urban areas. The environmental disaster that is much of that country (the Bejing Olympics showed us some elements of this for certain) will also have to be addressed. Otherwise, the Chinese government (ever willing to crack down on ethnic instabilities and riots in the countryside, and protests in the cities) ignores their own population at their peril, god help them if the economic/job growth slows below 7 or 8 percent and unemployment becomes a problem.

In short: the Chinese need to be more willing to play fair ball in international politics and trade, otherwise they may find their economic and political arrangement is not nearly as robust as it appears. As they rise to become a major force in world politics, their rate of growth and increase in prestige cannot continue as it has---their citizens will demand their compensation as well. After all isn't that what getting rid of the Imperial regimes was all about--the citizens?

What is Money?

There are lots of things that come to mind when I ask what is money. Some may answer its the piece of paper or coin. The greenback or the euro are examples. Money is a medium of exchange. It makes commerce easier. Money is essentially the value of what you produce or have. It eliminates the barter system which would be necessary without the advent of money as idea of people. some may answer that money is property. You own money like you own your house or your food. So maybe its property. Ohh no.

Not according to the Supreme Court. Money is speech. didnt you know that? I have heard that money talks but this is completely insane. And the best part is they don't even try to rationalize it anymore, they simply point to starie decisis when its convenient. They list precedent and thats it. This courts decision assumes you will read the THOUSANDS OF PAGES in 30 court decision from the past 230 years. And if Clarence Thomas is writing the decision its more like back to 1215. Why are company's granted rights? People make company's so it cant be about their creators. Its a perverse reading of history.

And for my last rant. The supreme court drew this insane decision from a point that wasn't even brought before it. That isn't even judicial review. They just do what they want and get away with it because of their robes. The decision said, "Our practice ‘permit[s] review of an issue not pressed [below] so long as it has been passed upon . . . .’" In this decision they do what they want and the American people have to deal with it. This activist conservative court should be stopped.

Really what should happen is that the congress and the president agree to simply disregard this decision. That's right, Jefferson and Jackson did it. I would say that's starie decisis enough. Just ignore this blatantly unconstitutional interpretation.

And Justice Alito, we will see if this court opinion will open the flood gates. You simply mouthing something at the state of the union devoid of facts of the effects of policy really makes a lot of sense.

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