Visualizing Obama's budget cuts.

Socialists are running the country!

Representative Spencer Bachus (R- Alabama) is saving America. Bachus has been working on a secret(!) list of the socialists in the House of Representatives, and he has come up with 17 names! Hmmm...somehow this seems so familiar. Ah, yes, this is the second coming of the (crazy) right-winger Sen. Joseph McCarthy and the (in)famous House Committee on Un-American Activities (HCUA)! [note: McCarthy was in the Senate and thus was not involved with the HCUA.] Let's hope Bachus is a little less successful than McCarthy and the HCUA.

Dreams From My Campaign

God I'm tired of this crap. I was hoping for some change. Maybe next time we could get this guy to run for president:

Supreme Court Ruling Causes Violent Double Take

I nearly hit a car yesterday while driving home. OK, that's not quite true, but I certainly lost my full mental capacities for a moment while listening to NPR report on a recent Supreme Court ruling.

Let's say you are John Smith of Washington County. The cops pull you over for speeding, run your license, and see that you have an arrest warrant out in Washington County. Let's further speculate that the arrest warrant isn't for you, it's for a different John Smith, but was attributed to you by clerical error.

Now we'll have some real fun. Let's say there's something illegal in your car, which of course the cops found during the arrest/search process. Of course, eventually it will be discovered that the warrant was in error and your arrest will be cleared ...

However, due to yesterday's Supreme Court ruling, the evidence that the state had no right to search for or seize from you in the first place is now totally admissable for use in a subsequent prosecution.

I mean, that's just such a blatant abuse of governmental power. It's unfortunate that throwing that evidence out would let guilty people walk, but it's certainly not worth the encroachment on the rights of citizens. I could go on but I'll just stop.

BONUS: While searching for this article I found an article about frequent-atheist-lawsuit-bringer Michael Newdow trying to get religious references pulled from next week's inaugural address. He'll surely fail so why does he keep trying? According to these two articles the answer is simple: atheists have so much narcissim and hubris, there's no other way to release it.

Is China Going to Call in our Debts?

(So, I wrote nearly this whole post before completely undermining it at the very end.  But I didn't really feel like throwing it away, so even if I'm basically an idiot here, at least it could bring about some discussion.  But keep in mind that, somewhat ironically, I no longer stand by some of what I've written here.)

With the economy tanking one of those comments you hear from time-to-time is that China, whose holdings of US debts amount to $585 billion, or over 4% of our entire economy, will suddenly call in our debt, crushing our economy.

Is this scenario plausible?  Might China actually do this?  I can't say it more strongly: no.

Unless I'm missing something, I can base this conclusion on two three things.  For one, "China" is not one entity.  There's about 1.5 billion people there right?  Now sure, the debt is likely to be pretty consolidated among more powerful actors, but it's not like there's one guy in the government who sits in front of two buttons all day that say "hold" and "call," just waiting for the moment to trash the economy.  So for "China" to call in our debt, that would mean that some circumstance would have to change that would result in the many different Chinese debtholders simulateneously wanting to call in that debt.

OK, I'm going to kind of gloss over number two because I did not follow this in my intermediate macro class, but I'm pretty sure this issue of debt is tied into trade deficits.  So for China to call in the debt would mean that China would also not be able to continue selling us more than we sell them.  And I don't think they want to do that.  (If anyone can correct me on this one, please do)

But the third one is also pretty key.  Let me add here that Japan holds almost the same amount of debt that China does, and combined they hold about 9% of our debt, or $1.15 trillion.  So, I was going to assume that the treasury rate was about 4% returns on this debt.  Unfortuantely, I just looked it up and realized it's closer to 0.4%.  This really kills my argument, but I'll keep going anyway.  So, 4% of $1.15 trillion means a return of $46 billion per year on this investment.  By contrast - think about how much fuss there was over the $25 billion for the automakers.  Even at today's rate of 0.46%, this results in annual interest of $5.29 billion.  And that's not a bad take.  OK, you're right it kind of is.  Dammit.

Well, that didn't take long

As much as I hate to borrow from idiot Republican mouthpieces, we've got Bill Richardson, Chris Dodd, Charlie Rangel, Rod Blagojevich, Eliot Spitzer, Bill Jefferson, Eric Holder ... throw in less offensive but still hateable figures like Rahm Emanuel, Bill Clinton, Joe Biden (annointing his son), Harry Reid, Nancy Pelosi, and possibly Caroline Kennedy, and even I've got to ask if the Democrats will use their power any more nobly than the Republicans did. Because they haven't even taken office yet, and it ain't lookin' good.

(Let me just add, since I'm begging the question above and I've been knocking it around in my head for a while: the role of Chris Dodd's political contributions from Fannie and Freddie in this economic crisis has been horribly overlooked. And I think it's Barney Frank who's playing the same role in the House, but I'm not as sure about that.)

NY budget

So I know very, very little about NY State politics, so I could be way off-base here, but Governor Paterson's plan to balance the budget sounds like bullshit to me. Higher sales taxes, higher fees in state parks, higher tuition to CUNY and SUNY, cuts in government aid to education, Medicaid, and public employees' benefits...and no income tax increase on the highest income bracket.

I have no idea whether there was a better way or or his hands are tied, but it doesn't feel good...

Corruption in Government: What to Do?

Why did this all happen? In my opinion, the answer is simple.

As governor of a state like Illinois, I'm sure you frequently meet with some of the most powerful people in the country. And some of the richest. And you probably help a lot of those rich people become richer (not necessarily in corrupt ways). Yet the governor of Illinois makes a salary of $150,000, more or less. And what was he trying to get? In real terms, not very much: a position with a salary of $300,000 (and other stuff, sure, but really not that much - not a $120M no-bid contract anyway).

In one of my econ classes we studied Singapore or Hong Kong or somewhere like that, wherein government employees were given huge salary increases. The result? There was more competition for government jobs so better individuals ended up getting the positions. Also, since salaries were already high, the temptation for corruption was less because (1) it took more money to even be worth it and (2) the fear of losing one's job made it even less likely the person would want to engage in corrupt activites.

So my counter-intuitive solution is to pay these guys more. Because if one of the most powerful people in the state is only making $150,000, what else should we expect to happen?

Also, by the way, Blagojevich is under no legal pressure to resign his seat, and could even appoint a senate replacement today, should he desire.

Why do we have the USPS?

(Wiki - USPS)

Excuse me if my thoughts are disorganized.

OK, so according to Wiki, USPS is the 3rd-largest employer in the United States (I thought it was first). While there are of course costs to the sender of a regular piece of first-class mail, the essential mission of the USPS is to provide daily delivery of mail to every U.S. citizen for free.

This doesn't make any sense.

Let me put it another way. If you had to pay the actual cost to receive your mail every day, would you? For most people, three times a week would probably be plenty.

And then there's another issue. Let's imagine Mike in Montana who lives five miles from his nearest neighbor, and Nick from New York City who lives in a 50-story high rise. Let's assume that every American in the country receives daily mail service except these two. What is the cost facing the postal service to start delivering to Mike? To Nick? It's clearly ludicrous that these two have the same access to mail delivery for the same price.

Now, I'll be honest - a lot of my frustration has come from the fact that clearly taxpayers are paying a huge price for this service to which many are probably indifferent (at least in terms of getting mail 1-3 times a week instead of six). The Wiki article, however, seems to imply that it operates independently of the government, although this was also true of Fannie and Freddie, in that no taxpayer money went directly into the company, but that taxpayers implicitly held responsibilities if their liabilities got out of hand, which is exactly what happened. So I don't know to what extent it is the case that we all have to subsidize this service, but what I do know is that it is by government mandate that USPS, no matter how private or public it is, must deliver mail every day, and that from a cost-benefit perspective, this is clearly ludicrous.

I hope this ended up cohesive, albeit rambly and lacking a conclusion.

PS - I understand, and am not opposed to, government-guaranteed mail service for the 19th century and even parts of the 20th. Also, I guess in the back of my mind when I think about this stuff is "for what reason is it better to have USPS do Task X than to have FedEx or UPS do it?"

I Finally Agree with Matt Drudge

... in that I find this scary. (See also - Posse Comitatus Act)