“Sleeping around, to continue our metaphor, can actually be useful for large derivatives dealers because it assures them government aid if trouble hits. In other words, only companies having problems that can infect the entire neighborhood – I won’t mention names – are certain to become a concern of the state (an outcome, I’m sad to say, that is proper). From this irritating reality comes The First Law of Corporate Survival for ambitious CEOs who pile on leverage and run large and unfathomable derivatives books: Modest incompetence simply won’t do; it’s mindboggling screw-ups that are required.”
In outline form because I don’t have a lot of time today:
1) Let Obama’s Deficit Reduction Task force do its thing and suggest tax increases.
2) Let the Democrat Majority (and a token RINO) pass the tax hikes
3) Let people get really pissed off
4) Then the GOP can come back into power with a mandate for real spending cuts: going after Medicare and/or Social Security.
This plan presumes that the GOP does not take back the Congress (or significantly increase its majorities) in 2010. Frankly I’m not sure I want the GOP to make a comeback. They’ve not yet spend enough time in the wilderness to learn from their mistakes.
Feel free to read Bruce Bartlett’s take of Paul Ryan’s deficit reduction plan, which as Bartlett points out, is politically untenable.
@lance (an ATDC startup guy) pointed me to a pretty good Op/Ed from Thomas Friedman in the New York Times.
Let me say that of all the NYT people, I respect Friedman the most. His Lexus and the Olive Tree sits up there with Mystery of Capital as one of the best economics books of recent years. It also sits up there with The Pentagon’s New Map as one of the best national-security books of recent times.
His Op/Ed today was that Obama should shift his focus away from health care reform, regulation and stimulus and more towards “stimulation”, ie the creation of a start-up culture among America’s youth.
Obama should make the centerpiece of his presidency mobilizing a million new start-up companies that won’t just give us temporary highway jobs, but lasting good jobs that keep America on the cutting edge. The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things. Without inventing more new products and services that make people more productive, healthier or entertained — that we can sell around the world — we’ll never be able to afford the health care our people need, let alone pay off our debts.
I couldn’t agree more. If you look at most transformative technologies that weren’t created for military purposes, they’re all done by the small businesses. DARPA created the internet, but AOL and Mindspring put it in every American household. Xerox created the GUI, but Steve Jobs and Bill Gates put it on every PC. Bell Labs created Unix, but geeks in Berkley and Finland created the versions that run most of the Internet.
There is very little Government can do to create stimulation that doesn’t involve getting the f— out of the way. And getting the government out of the way doesn’t suit the politicians of either party.
Starting your own business involves risk. The current left-of-center administration is about eliminating risk. Everyone must have Health Insurance. Everyone must have retirement insurance. With the Unions, everyone (who is a member) must have job security. You can’t take risks when the Government prevents you from doing so.
Not that the typical right-of-center politicians are much better. They are beholden to the large companies who fear transformative change. They fear it because all large organizations, be it Fortune 500 or Government are dysfunctional. They can’t innovate like the small guys. What they can do it hire lobbyists to make it harder on the small guys.
Friedman also illustrates he doesn’t get the “Tea Party” backlash. The Tea Party Movement isn’t all about stopping things. It’s about the ability for people to make their own choices. It’s about stopping the one-size-fits-all equal-outcome-for-all mentality of the far left. The Tea Party Movement is about letting the individual succeed or fail based on their own merits, not on the whim of government bureaucrats. In short, it’s about freedom. Something that has been missing off the agenda’s of the last several Presidential Administrations.
If Barack Obama wants to create an Innovation Movement here are my suggestions:
o Drop Health Care Reform. People can’t quit their W2 jobs and strike out on their own when they have no idea of they’ll be hit with a massive financial penalty for not carrying bloated all-you-can-eat healthcare insurance. Encourage catastrophic plans, and medical savings accounts.
o Commit to a repeal of the death tax, or at worst no more than 10%. Small Businesses can’t survive if at the time of the owner’s death his/her heirs have to pony up 50% of the value of the business to the IRS.
o Reform S-Corp taxes so that money re-invested into growing the business doesn’t appear as taxable on the individual’s 1040 form.
o Grant capital-gains tax relief for people who sell assets to re-invest them in small businesses. If an Angel Investor wants to sell the Apple stock they bought in 1984 into the next big thing, let them do so without penalty. Set the basis at the 1984 purchase price.
o Fire anyone in your administration who suggests the idea of raiding people’s 401ks.
George Mason University Economist Tyler Cowen:
TO put it bluntly, if the United States takes one step back and the rest of the world takes two steps forward, even in purely selfish terms we should consider accepting the trade-off, if only for the longer run. Most of us gain from the wealth and creativity of other countries, even if we can’t always feel like the top dog.
via Economic View – For Much of the World, a Good Financial Decade – NYTimes.com.
Seems as good a rebuttal to Pat Buchannan’s whining as any. I’m willing to take a hit to my national pride to see the other 5 billion people on the planet not die of starvation.
Now this is what we should be spending our R&D money on.
Liquid Fluoride Thorium Reactor
- Fuel Thorium and uranium fluoride solution
- Fuel input per gigawatt output 1 ton raw thorium
- Annual fuel cost for 1-GW reactor $10,000 (estimated)
- Coolant Self-regulating
- Proliferation potential None
- Footprint 2,000-3,000 square feet, with no need for a buffer zone
via Uranium Is So Last Century — Enter Thorium, the New Green Nuke | Magazine.
What Xenophobic ass-hats like Pat Buchanan don’t say is that millions of people – who would otherwise have nothing better to do than hate America and start wars with us – are now able to feed their families, educate and vaccinate their children, and possibly even retire before laying on their death-bed.
To describe world GDP in percentages is to assume that economic development is a zero-sum-game and for others to win the US must lose.
According to the International Monetary Fund, the United States began the century producing 32 percent of the world’s gross domestic product. We ended the decade producing 24 percent. No nation in modern history, save for the late Soviet Union, has seen so precipitous a decline in relative power in a single decade.
From IowaHawk
The US State Department agent asked to see my passport, and the concierge explained that I was a Somali refugee. So she looks at her computer screen and says, “um, I’m afraid there’s a problem, this passenger’s name is on a watch list.” Oh, great. Looks like my dad is playing Mr. Buzzkill again, just because I took that semester off from Oxford to go backpacking in Yemen. So I showed her my official State Department visa.
So I’m like, “honey, do I look like I’m a US military veteran?”
“No.”
“Do I look like I’m some sort of right wing anti-tax teabagger?”
“No.”
“Do I look like anybody else on the DHS terrorism danger list?”
“No, but…”
“Then I suggest that unless you want a nasty anti-discrimination lawsuit on your hands, you’d best give me an aisle seat. With extended legroom.”
I think one of the reasons we have such shit-tastic representatives in Atlanta and Washington is the fact that sane, moral, upright people who don’t want to fuck-over large swaths of the American people do not want to be associated with the likes of Richardson, Cagle, Harbin, Sanford, Burkhalter, Foley, Gingrich, etc.
They don’t want their wives wondering if they are really out late at a committee meeting, or boinking their staffer in their Capitol office. They don’t want their families wondering if that young lobbyist is a professional or professional slut.
Power Corrupts. Absolute Power Corrupts Absolutely. Political Power corrupts your ability to keep your fly zipped.
Fuck resignations. I want to see indictments.
I suspect this might be of interest to my political geek friends:
How to Make a US County Thematic Map Using Free Tools | FlowingData.
By keeping our scores mostly flat, we can greatly increase the amount of spending per student.
HT: Jason Pye
