This small matrix shows the most likely outcomes from the two major issues this year.

The Economy and the Election

Three of the four possible outcomes are acceptable.  I’m expecting to have a good year regardless and I hope I can take the advise of Jay Albert Nock.  In his book the State of the Union he advises to stay out of retail politics since it is dirty and everybody’s mind is pretty much made up anyway.

“The reason why a bachelors degree on its own no longer conveys intelligence and capability is that the government decided that as many people as possible should have bachelors degrees.

There is something of a pattern here.  The government decided to try to increase the middle class by subsidizing thing that middle class people have: If middle class people go to college and own homes, then surely if more people go to college and own homes, we’ll have more middle class people.  But homeownership and college aren’t causes of middle class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let your enter and stay in the middle class.

Subsidizing the markers doesn’t produce the traits; if anything it undermines them.  One might as well try to promote basketball skills by distributing expensive sneakers.”

the quote is from Glenn Reynolds who blogs on instapundit.

Well Said.  

• Cut the pay and benefits of all federal employees about 10%.
• This would save the federal govt. about 200 billion a year. (see the math below the fold)
• It would also signal that we are serious about cutting the size of government.
• The cut could be progressive.  About 25% for the best paid and 5% for the lowest paid federal workers.

Government workers are by all accounts better paid than those in the the private sector and have higher benefits and much higher job security.  This change would have the effect of getting their pay back in line with the private sector and would solve a substantial part of the deficit issue.

How popular would this idea be with the voters? the media?  Could it be a strategy for winning the presidency?

How I did my admittedly very rough math:

• The Federal budget is about 3 trillion dollars.
• Most of it is transfer payments (grants to states, Social Security, Medicare etc.) or salaries of employees.
• I’m assuming that 2/3′s is salaries of employees and contractors.
• Ten percent of 2 trillion is 200 billion.
• Yes I’m including the military.
• Yes I’m including direct and indirect contractors.
• Yes I know this would take a lot of money out of the economy.

http://xkcd.com/980/huge/#x=-4832&y=-2560&z=2

Be careful it is addictive.

It turns out that from about 1909 to about 1930 New York State did charge brokers a stock transfer tax.  There was also one in the 1960′s and for some of that period the Federal Government also had a transfer tax.

I’m not sure what the rates were in the past but there is no question that if you make something more expensive by taxing it you will have less of it.  Financial transactions would move to where they were treated better, maybe Singapore or Belgrade.  Is this the result we want? Here is a link to an article that strongly opposes the transaction tax.  And another one on the pro side.  I’ll have to think about this one some more.

“Do you know why we Arabs have lost all of our wars with Israel?  Because Israel is democratic, and we are undemocratic.  So in one of our states, the worst general becomes army chief of staff, because he is no threat to carry out a coup d’etat.  Loyalty to the strongman is all that matters.  Democracy, on the other hand, is a competitive mechanism- and that is why Israel wins.”

Saif Qaddafi

Davos 2005

as quoted in National Review

Last I heard Saif was in hiding negotiating with the world court to cop a plea and save his and the remainder of his families lives.

On Monday October 31 Dr Oscar Arias visited the School of Trans Border Studies at ASU and I had the honor of giving him a tour of the Changing Boundaries Map Exhibit.  Arias won the Nobel Peace Prize for his work to end the fighting in Central America in the 1980′s while he was President of Costa Rica the first time.  Before the tour he gave a short talk about his attempt to get the Central American Free Trade Agreement (CAFTA) passed by the US Senate.  During the talk he told a story about US politics that I am paraphrasing here:

” In the 1980’s Senators Ted Kennedy and George Mitchell and other Democrats supported my Central American Peace Plan but then in 2006 the same Democrats opposed CAFTA (the Central American Free Trade Agreement).

I was puzzled by this until I figured out that they weren’t trying to do the right thing.  They supported my peace plan because President Reagan a Republican opposed it and years later they opposed the trade agreement because President Bush another Republican supported it.  It was all about politics not about what was best for the US or for the world.”

A depressing story from someone who has seen politics from the inside.

You can read what he said about immigration here.

Dr Arias used his Nobel award money to start a peace foundation.

The analogy explained:  Since the 1950′s the Germans have worked really hard.  Like Ants.  While the Greeks have borrowed money they didn’t have and played around, taken extended vacations, padded the public payrolls and generally had a fun time.  Like Aesop’s Grasshoppers.  Now it is time to pay the bills and the Grasshoppers (Greeks) have come to the Ants (Germans) door asking to have their debt forgiven so they can keep on playing. The last remaining question is what will the ants say this time?

This was explained to me by my extremely perceptive brother Tom who lives in England and works in Austria.  I supplied the picture.

Click here to view the embedded video.

From the WSJ 10/10/11

And infrastructure.