So President Obama released his much anticipated budget today and I took a couple of minutes to analyze the numbers to find the winners and losers. The results will surprise those on the right and left alike (See Figure Below).

The big winners are:

1. the Natural Resource Conservation Service with respective 2011-2012 and 2010-2012 budget increases of 123% and 167%.

2. the Department of Energy with a 2010-2012 increase of 134%.

3. the Department of Transportation with 2011-2012 and 2010-2012 increases of 113% and 115%

4. a recipient near and dear to natural/environmental scientists hearts the National Science Foundation (NSF) with a 2010-2012 of 118%.

True many of these recipients could be considered liberal or dare I say the word “scientific” causes, but the fact is that there are many progressive recipients on The Big Losers list below.

The Big Losers:

1. Well we have to start with the undisputed biggest loser of them all and one you would think would be in the previous category given how often Obama, Democrats, and Republicans talk about the importance of small-business creation. The Small Business Administration is going to be 20% of what it was in 2010 in the following 2 years if Obama gets his way. This will be an interesting pivot point around which we will see whether conservatives who say Obama is anti-business fight him OR whether the small businesses of America call Obama’s bluff and the Republicans if they jump in bed with him on this one invoking his recent placating speech at Tom Donahue’s Chamber of Commerce. This country is clearly decoupling both at home and in the workplace with Too Big To Fail Military contractors, Banks, and Agribusiness clearly in the driver seat not just with Republicans but with Democrats as well. What a shame.

2. OH and then there is military family housing, which one would assume everyone would want to increase with the patriotic rheotirc booming out of MSNBC and Fox News equally. I thought we valued our warriors and their sacrifice? Guess not because military family housing is set to shrink by 25% 2010-2012.

3. Education and who – like military family housing – could argue with education? Apparently an Obama administration that has found it’s Reaganomics Religion all of a sudden. Education will be slashed by 11% and 24% between 2011-2012 and 2010-2012, respectively.

4. Finally, the Bureau of Ocean Energy Management will be slashed by 31% between 2010-2012.

SO WHAT IS THE POINT OF THIS BLOG? The point is that Obama has shown he is hardly a socialist, fascist, liberal/progressive populist and that with respect to the SBA we will see whether all those jokers on Capitol Hill really do care about small businesses because if the Obama administration gets it’s way the SBA will be hacked to a fifth of it’s size today.

NOW if only we could get the Pentagon to incur more than the 2011-2012 4% decline only to rise like a Phoenix the following year giving it a 2010-2012 6% increase.

If we don’t address the retirement age, tort reform, the military industrial complex leviathan, and things like Bureau of Land Management gifts to the coal/natural gas industry via infinitesimal land rents we are not being serious. Hacking away as the Republicans and Democrats are at discretionary spending, which depending on the year ranges from 10-12% of the federal budget means that honesty is in short supply in DC and that faith is winning out over rationality. What a sham I mean shame!

OK

So in the past here and elsewhere I have commented on the general lack of relevance to real world prosperity reflected in the classic

GDP = C+I+G+(Exp-Imp)

For so many important reasons GDP sucks not the least being its unwillingness or inability to account for the monetary value of raising children or for that matter ecosystem services. One estimate that does a far better job of addressing not these issues but inequality is the Gini Index. A while back I discussed the bottom-left to upper-right trajectory of this index here in the US at a rapid and disturbing pace. The higher the number the more inequality exists. Simply put it is a number between 0-1 and at absolute Zero it means perfect equality and 1 means that all wealth is perfectly aggregated at the top among the types of elites that attend the Davos World Economic Forum, or TED, or whatever gathering you want to name including the Koch brothers recent get-together in Palm Springs, which was by invite only and the only requirement was that you be worth 1 Billlllllllion dollars!

Anyway tangents aside. I was originally disturbed by the slope of the Gini Index here in the US AND NOW……….I am even more so. I just got my hands on the index back to 1913 courtesy of an obscure paper by Eugene Smolensky and Robert Plotnick at UCal Berkeley (Yeah I know liberal haven but the data don’t lie folks!!!). Take a look and keep in mind the trendline just demonstrates the clip at which inequality is increasing annually, which at this point is about 0.47% per year. Soon we’ll be in Robert Mugabe and Myanmar territory….NO SERIOUSLY WE WILL!!

Wealth inequality has not done wonders for Zimbabwe, Myanmar, North Korea, etc., what makes us think it is a good thing for Ground Zero of Laissez-Faire capitalism? American Exceptionalism will turn the corner and run into reality at some point.

The following is an excerpt from a book I am working on geared towards Generation X and the prevention of The Great Decoupling,

According to the FDIC you Mr. Big Banker (i.e., 109 banks with more than $10 billion in assets) have no qualms with giving depositors a measly 0.8% annually, while the country’s 7,651 local/smaller banks paid 1.29% vs. values of 0.49% and 0.69% in 2009 [184], respectively, even though it was you not them that we the taxpayer bailed out and we Generation X will continue to feel the austerity backlash of for years to come. It doesn’t take a rocket scientist or a fifth-grader for that matter much in the way of mental exertion to understand how easy it is to mint huge profits when you borrow money from The Fed or investors for the aforementioned paltry rates and lend it to private citizens or the Tim Geithner led Treasury at 3-4%, however, in doing so you Mr. Banker are failing to do what you most likely state in your charters “furnishing money to firms and funding capital investments.” [185] We need our banks to act as utilities not casinos. Banks must stop making in the words of the Bank of England’s Andrew Haldane mirages look like miracles and just do your boring but admittedly useful service to society absent extraordinarily leverage and quarterly bonuses. If they refuse Generation X must by any means necessary make them stop because their reckless gallivanting is only hurting the long-term viability of this country and in a more circuitous way this planet and possibly even the true principles of democracy. This will involve Generation X when we get the reins of power putting serious constraints on capitalism and more specifically the financial sector including the ten steps listed below: Read the rest of this entry »

So I haven’t been posting in a while as I am looking for a job and working on a book. Anyway I have been playing around with what I am calling a “War Games Tax” that I describe below and it is one that if anyone reads this post I would love for you to pass it on to your congressional delegation. After reading it you are welcome to comment and I would be happy to share my data with anyone interested in this idea that I don’t think to many people could argue with. Cheers and I hope you enjoy the read!

I have been working some calculations trying to get at how much general education revenue could be conceivably generated if we taxed what I will broadly call “war games”, which include at this point “Call of Duty: Black Ops (PS3 & X360)”, “Halo: Reach (X360)”, and “God of War III/God of War Collection (PS3). All of these are top sellers for Activision (Call of Duty), Microsoft (Halo), and Sony Computers (God of War). Their average annual revenues are in toto $1.23 billion with “Halo” at $686 million leading the way and “God of War Collection” bringing up the rear at $29 million annually (Fig. 1).

Not a bad profit margin don’t you think? More importantly I was thinking that if there are so many people with the bravado to fight wars via their video consoles they wouldn’t have a problem paying a heavy tax on those games, which could be used to fund educational programs throughout the country. So I went about trying to gather up as much high-quality data as I could get on dollar sales, weekly units, and in order to come up with a progressive “War Games Tax” I used iCasualties data on a per 100,000 person basis across all fifty states+Washington, DC (no US territories due to high concentration of troops stationed there). I then used the per capita data – with Vermont being the highest (2.568) and Utah the lowest (0.486 per 100,000) – summed those values and converted them into percentages. I then multiplied the $1.23 billion figure across tax rates of 35%, 25%, 10%, and 5%, with the per 100,000 percentage conversions used to multiply across tax rate scenarios. If you do that the numbers are pretty staggering.
Lets just focus on Vermont for a second as a teaser for what we could extract from this pseudo-war profiteering that doesn’t get nearly the coverage that the explicit profiteers do. Vermont would be able to rely on an annual tax revenue of (Fig. 2):
1. 22.4 million at 35%, 14.9% of FY 2011 budget deficit
2. 16.0 million at 20%, 10.7% of FY 2011 budget deficit
3. 6.4 million at 10%, 4.3% of FY 2011 budget deficit
Or
4. 3.2 million at 5%, 2.1% of FY 2011 budget deficit

While none of these numbers is eye watering they are not trivial either, with the top rate accounting for nearly 15% of the FY 2011 budget deficit. This is not a progressive or regressive tax idea, rather it is an anti-predatory tax idea with the folks that so flippantly turn on their video consoles to play the latest virtual War On Terror paying the heaviest price. What is wrong with that? New England alone would generate:
1. 55.3 million at 35%, average of 3.5% of FY 2011 budget deficit
2. 39.5 million at 20%
3. 15.8 million at 10%
Or
4. 7.9 million at 5%

So as you can see this is not a panacea but is a step in the right direction AND unlike the much maligned soda-tax proposed by Mayor Bloomberg and Governor Paterson in NY I would argue that there should be less resistance to a tax that takes money from people that like to play video games about war but wouldn’t be caught dead signing up to go to Iraq, Afghanistan, Pakistan, Iran, etc etc and puts that money in to the educational infrastructure of this country. I would like to see someone rail against this idea in public with the lights and cameras on.

Below I have pasted an amazing quote from this article in The Times about a wind farm receiving resistance from a couple of bad apples in the name of some pretty amazing and disingenuous concerns. I have included it as my comments were #1 among all reader comments and I think capture a couple of angles that pervade the Limousine Liberal community and are eating away at the environmental movement from the inside and from the top down. Why in God’s name or anyone else for that matter would Red States and ultra-conservatives take us seriously or work with us as liberals/environmentalists if we aren’t willing to put our money and sacrifice where our mouth is? Read the rest of this entry »

Anyone want to? Wanna really pay the price for war(s)? Nope!

How much would you pay for the life of one of this country’s active duty men or women? Below I discuss what our government has decided their worth (Hint: Its less than the cost of two movie tickets!). Read the rest of this entry »

This is something I wrote in response to an article by Dr. Jagdish Bhagwati and Arvind Panagariya at Project Syndicate. I love this site and really the thinkers and practitioners run the ideological gradient. Read the rest of this entry »

Below I have plotted the average annual income here in the US back to 1815 for the US Senate and 1967 for us little people. I mean that in all seriousness, because if ever there was a graph that said it all it is this one. The inset simply shows the same data for the period between 1967 and 2009, which is the timeframe where data is available for all percentiles. You will note the inset also has a number followed by the letter x, which if you remember back to any statistics or math courses you may have taken is simply the slope of a given trend (i.e., in this case it is a linear regression). The # that proceeds each x corresponds to the annual increase in each percentile’s average annual income. There are two extremely disquieting trends in this data: 1) the “haves” (i.e, Top 5^th percentile) and “have nots” spread is widening at an ever great clip, with annual income increases for the former 2.3 to 22× that of the latter percentiles and 2) the DC fat cats are gaining on this nation’s net-worth “elite” at a pace that one would hope would cause them a mild case of opprobrium. Fat Cat Fat Chance!

Maybe those Tea-Partiers are on to something if you strip away their bigoted, xenophobic, and often hypocritical bluster. The gentlemen and women that occupy the The Dirksen Senate Office Building have seen their wallets explode “George Costanza” style, however, only poor George who’s wallet was stuffed with junk our esteemed senators have jammed their wallets, pocketbooks, or man-purses full of Cold Hard Cash. Yet, in an effort to to not appear crooked – like Mr. Costanza did when he stuffed his other pocket with napkins – these folks shower us with patronage in the form of huge defense contracts, agricultural subsidies, and a static retirement age even though life expectancy in this country has risen to 148% of what it was at the turn of the 20^th century.

To those on the right that preach against Obama’s predilection for industrial policy I would challenge them not to avert their eyes when the next defense or farm bill comes their way, because if they don’t they will see plenty of industrial policy in these two massive pieces of legislation. The fact is that when we hear senators and their little brothers and sisters in the House talk about putting a freeze on non-discretionary spending they appear to be including their own salaries in the non-discretionary portion of the ledger. It seems to me that one of the reasons The Capitol Hill Gang doesn’t really attack everyone from Lloyd Blankfein and Rex Tillerson to their buddies Warren Buffett and Monsanto CEO Hugh Grant because they know that the only way they can maintain their excessive $3,676 annual salary increase is if they cajole the club they are set to surpass within the next ten years.

If you will humor I would like to return briefly to the George Costanza analogy vis à vis DC Motley Crue in order to put a bow on this portion of the story. As this particular episode of Seinfeld came to an end Mr. Costanza’s wallet suffered a tragic end at the hands of its greedy owner who decided to stuff a guitar lesson advertisement in it. This was the last item placed in the poor wallet as it exploded due to an excess of everything from hard candy and coupons to the requisite cash and receipts. Unfortunately the only people in this country willing to expose congress for its glutinous ways, both personal and as it relates to the aforementioned ill-apportioned largesse, are the Tea Partiers on the right and the folks I have marched proudly with at The UN, The Capitol, The RNC in St. Paul, etc. Both sides have heroes and when you scrape away the veneer each makes valid points. However, they (we) couch our arguments in so much irrational exuberance and non sequitur attacks that the message and the facts that directly – or indirectly – back them up are easily marginalized or out-and-out mocked by the media and the lawmakers alike.

There really is no need to say any more as the title says it all.

U.S. Identifies Vast Mineral Riches in Afghanistan

I wonder if Big (What a..) Dick Cheney knew about this one! He couldn’t have otherwise he would have insisted on a more concerted and muscular presence in Afghanistan throughout the War On Terror. Oh well chalk one up to good ol’ fashion Mullah Omar misdirection. Something tells me you will be hearing that Freeport-McMoRan (FCX)out of New Orleans will be getting their grubby nefarious hands involved in this operation given their robust play in the global copper market. Okay you heard it hear folks with FCX’s near monopoly on the global copper market and a large presence in gold we will absolutely see a strong push by them into this nascent opportunity. Just for the record FCX shares are currently trading at $65.26 on the NYSE, traded as high as $87 on January 8th, 11, and April 5th of this year, BUT are far below highs of $114 and 122 on October 10, 2007 and May 19, 2008, respectively. These two dates and the general peak in copper prices happened to coincide with a commercial and residential housing construction boom in China and lead some to believe that we had reached Peak Copper, although the latter has yet to be proven, but it stands to reason we will reach some sort of peak given the finite nature of copper availability, the world’s insatiable appetite for it, and the fact that last I checked creating it out of thin air ain’t an option! I will keep a keen eye on this and I suggest anyone reading this do the same as I demonstrated with an earlier posting on Roche and it’s share skyrocket in the weeks leading up to and after The Great H1N1 scare.

I would just say to the Pashtuns of Southern Afghanistan caveat emptor with Exhibit A being FCX’s Grasberg copper and gold mine in Indonesia, where the natives are restless and growing more so by the day. FCX is determined to see this mine to it’s complete exploitation given that it accounts for $4 Billion of FCX’s $6.5 Billion operating profit (i.e., Nearly 2/3). Some have even decided that peaceful protest is no longer helpful resorting instead to primitive but effective methods of “Message Delivery”. However, when the Indonesian government equips the mine bosses with a security force of 3,000 troops and police the odds are stacked against the indigenous peoples of Papua and Papua New Guinea (See Map courtesy of The Economist).

Thanks to a great article by Nelson D. Schwartz in The New York Times. Can you believe this?

Of course we have been doing the same here in the US since September of 2008 when Lehman Brothers collapsed. This type of mixing and matching would make even the most devious street hustler blush given the trickle down, up, left, and right of a group of greedy bankers and profligate sovereign governments. The idea that this type of thing couldn’t have been stopped is nonsense and to go one step further the Greenspanian idea that you don’t prick a bubble is pure hubris mixed with a large dose of Cigarette Smoking Man “After all, villains don’t think they are villains”.

What was it that John Maynard Keynes said about capitalism run wild. Oh yeah…“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.“

Well say what you want about Lord Keynes politics and the bastardization of his work and theories by the left and the right, but the fact remains we have never seen a paradigm proved so faulty, so often, in so many disparate economies, and with so many casualties than we have with Capitalism. Don’t even think I am espousing Socialism across the board I am not and would never, but a reexamination of the facts when they change should lead us to change our minds about Capitalism as it’s universal application is clearly misguided and when you wipe away the muck and bombast very dangerous for lots of folks.