Trade

On this day:

1994
The Church of England ordains its first female priests.
2009
Financier Bernard Madoff plead guilty in New York to scamming $18 billion, the largest in Wall Street history.
2011
A reactor at the Fukushima Daiichi Nuclear Power Plant melts and explodes and releases radioactivity into the atmosphere a day after Japan’s earthquake.

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"If Patrick Henry thought that taxation without representation was bad, he should see how bad it is with representation."--The Old Farmer's Almanac

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Shumer says the Voter ID is actually an ICE conspiracy!

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Whole Foods in New York has a 'holding pen' for wealthy shoplifters, according to a funny article in NR. 'For some, a little thieving is their way to “protest” corporate America. For others, it’s an expression of the economic anxiety that accompanies living in “an unaffordable city.” DeLigter deemed it “a form of collective nihilism.”'...'The biggest revelation here is that Whole Foods’ security guards seem to evince “glee” while doing their jobs. Who wouldn’t? The opportunity to impose consequences on people who appear to have avoided them deep into adulthood isn’t an opportunity that comes around every day.'

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Trump says the Iran "excursion" will keep us out of war.

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David Bossie was exposed for allegedly raking in $18.5 million for an unauthorized group called the Presidential Coalition, which reportedly fooled senior citizens into thinking they were helping Trump-aligned candidates.
A large chunk of the funds went to buy books he co-authored with Lewandowski, though the former campaign manager was not directly implicated.

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The Brits are getting rid of non-royals on their banknotes in favor of animals.
The monarch has appeared on Bank of England notes since 1960, and will continue to do so in the future. Images of historical characters, starting with William Shakespeare, were first seen on the reverse side a decade later.
The current crop on circulating notes, in ascending order of note value, are Sir Winston Churchill, Jane Austen, JMW Turner and Alan Turing.
The Bank found itself mired in controversy owing to the absence of any women, apart from Queen Elizabeth II on notes in 2013. There has never been a historical figure who is black or from an ethnic minority background on the Bank's notes.

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Trade

Trade is equal exchange. Both parties give up something they do not want as badly as what they receive. Trade is an agreement that makes both parties happy, not a "negotiation" where on party is at a disadvantage. Trade is a tie petween wqual partners.

Trade is not just about exchanging value; it's about building relationships and trust. Trust is earned and developed over time through agreed-upon rules and market access. Therefore, it goes beyond simple transactions, creating an environment of civil order—benign, dependable relationships. It's a social atmosphere of well-intended order—a symphony of quality and cooperation.

What can upset the order? First, government intervention. The violinist is the vice-president's niece and should have a larger role. How about a drum solo? The rules change; the discussion distorts. Patronage and favors intrude. And imagine the bribery! The trust and stable trading field developed and nurtured over the years will slowly dissolve.

And what if the trade is twisted to exploit some national preconception, some state advantage? So trade was just a bargaining chip? That would overturn the table of careful trade-building and fairness.

Tariffs.

 

Carbon Wars

President Obama wants to reduce greenhouse gas emissions by 17% by 2020. This involves a significant shift in resources and in philosophy. The legislature has consistently voted against such proposals; even the super-majority in Obama's first two years voted the cap-and-trade plan down. Consequently these current plans are being carried out with executive and bureaucratic fiat, that is, bypassing the legislative process. 

There are new efficiency standards for home appliances, heavy-duty trucks and, in particular, the electric industry. Electricity relies on coal-fired power and coal-fire plants account for about 33% of American greenhouse gases. Daniel Shrag of Harvard, an Obama science adviser, told the New York Times that "Politically, the White House is hesitant to say they're having a war on coal. On the other hand, a war on coal is exactly what's needed."

There is a lot at stake. The U.S. has become an attractive option for manufacturing because our coal and gas is plentiful and thus cheap. There is a noticeable uptick in foreign business activity. But a good way to stop that would be for the administration to declare war on the carbon that makes such business development attractive. Of course, the purpose of such a war is to do exactly that. And there is an effect on the existing economy as well. It is estimated that every $1 billion spent complying with an EPA rule threatens 16,000 jobs and cuts GDP by $1.2 billion.

Fortunately complex problems are always made clear in the minds of the righteous.

Dead Souls, Dead Minds

In Czarist Russia, one of the taxes applied to estates was a head tax on the number of serfs on the estate. This number was determined by a census and periodically was revised depending upon the addition or subtraction of the number of serfs over time. But the census was infrequent so if a serf died, the estate still had to pay for him until the census eventually corrected the numbers. Enter Chichikov, the main character of Gogol's novel "Dead Souls."

Chichikov, a delightful con man, has a plan. He goes to the owners of the estates and offers to buy their dead serfs. He says he will pay the taxes on them. He then plans to go to the bank with his list of serfs, borrow money from the bank using the serfs as collateral to buy a farm.

Is this first cap-and-trade?

Tiglons and Ligers, Oh My!

"The evidence is overwhelming that manufacturers are creating excess HFC-23 simply to destroy it and earn carbon credits," said Mark Roberts of the Environmental Investigation Agency, a research and advocacy group. "This is the biggest environmental scandal in history and makes an absolute mockery of international efforts to combat climate change."

This appeared as part of an article in the Huffington Post. HFC-23 is a particularly dirty carbon producer and the implication is that the production of carbon--even if that production is peripheral or has no relation to the industry in question at all--has become a separate pursuit of companies so they can be paid not to produce it.

The question is why is anyone surprised? A distortion in the market, a tilt of the playing field, has been created to reward some and not others, to benefit specific behavior that has only an accounting advantage, like depreciating steel plants but not investing to produce steel. People will rush in to take advantage of the bias. These Rube Goldberg economics probably work sometimes but rarely. Raise the minimum wage to benefit minimum wage workers: Decrease the number of minimum wage jobs. Subsidize ethanol to decrease the use of petroleum: Petroleum use increases to produce the ethanol. Balance the earnings between big earners like the Yankees and lesser teams: Pittsburgh Pirates. Decrease the spreads in the stock market trades to stabilize the market: Flash crash. In this instance, businesses will be paid not to produce something, ergo, they will produce as much of it as they can first. This will produce more of the offending substance and eventually leech more money out of the payback system and make it less effective.

Notice that a system, once interfered with--even with the best of intentions-- changes into something else. A minimum wage job changes a valuable employee into an economic burden on his employer. An energy producer produces fertilizer and proportionally less petroleum for energy. The efficient farmer becomes a part-time food producer and a grossly inefficient energy producer. Several good baseball teams create and underwrite a new strange game the Pittsburgh Pirates play. Decreasing the profit in stock trades by market maker intermediaries creates a market where only high volume computer trading is profitable. It is reminiscent of hybridization. A mule is neither a horse nor a donkey. It is new.

But it is close. Close. And that is the point. No chef would substitute salt for sugar because it was close in appearence; he knows there is more to it than that. But somehow intellegent people feel thay can mix-and-match economic and political components without fear. Administrators and legislators create programs in reaction to problems and it is like adding a unique, foreign piece to a puzzle. Everything changes. Now, with the new piece, nothing fits and the puzzle becomes something else, neither the problem nor the solution but something else. A mule that can not run like a horse, a tiglon very distinct from its parents and from a liger.

It's not "close enough for government work"; it's a new explanation, a new excuse. It's the excuse Heisenberg has cursed us with that justifies our compromises: The imprecision of our times.

But we have to do something, don't we?

"Irony is Overrated" (Claudia Black, Speaking for all Women)

Illness in the United States is showing a pattern: Chronic illnesses are rising. Diabetes, cancer, coronary artery disease, hospital acquired infections, mental illness, childhood obesity and autism--all are increasing in the population. These changes are occurring in a culture that seems to be genuinely concerned about its health, a culture that diets, works out and whose insurance industry and government actively promotes healthy lifestyles. What possible explanation is there for this increase in disease despite sincere and advanced efforts to prevent it? Perhaps it is those very advances themselves. Parallel to this rise in disease is the rise in construction and technology, a growth in our industrial and living complexes unparalleled in history. More, these chronic illnesses seem to be exclusive to these growth areas throughout the world. The social and economic burdens of these illness trends may soon overwhelm the society's ability to respond. Clearly something must be done.

Civilization has been know to be a detriment to man in the West ever since Rousseau. The relationship we have with our environment, how our new world relates to our old world, can no longer be ignored. The interactions within these worlds would be denied only by the most uneducated. From psychology to entangled particles we have demonstrated our integration. Yet some of the more established Eastern societies have recognized this interdependence for centuries and we should call on their wisdom. I am speaking, of course, of the ancient Chinese Feng Shei.

Feng Shei (literally wind-water) is a Chinese belief founded in Taoist thinking and refined for 3000 years. It recognizes the interactivity of creation seen in the relationships among the five elements of fire, water, earth, metal and wood. The various combinations and mingling of these elements also interact with the surroundings and contribute to the health and well being of communities and individuals. Who hasn't walked into a room and felt welcomed by its structure --or not? Why are some towns charming and some not? Feng Shei takes these subjective feelings further so that structure, color, architecture and placement of all man's interventions work with, not against, the energy of nature. Man's energy and work would thus conform to the harmony of nature, not oppose it. Feng Shei is time honored and proven effective in countless experiences over eons.

This country has been built and developed without respect to nature for too long. Clearly our inharmonious relationship with the world is beginning to bear poisonous fruit in our health, our happiness, our lives and our international relations. And certainly things are getting worse. A serious crisis demands a serious response. My solution is Feng Shei credits. This would apply from suburbs to operating rooms. Communities developing without respect to Feng Shei would pay a tariff that would be redistributed to communities that observe Feng Shei techniques. Corporations and companies would do the same. Such an approach would favor developing nations which do not have existing inharmonious infrastructures and penalize those richer countries with existing offending infrastructures who can better afford the penalties for past failures and the overhead to update them. Feng Shei experts could act as administrators and, in the capitalistic tradition, a public market for Feng Shei credits could emerge.


The discomfort of the nation is palpable. We are at the tipping point. Undoubtedly there will be skeptics, conservatives content with what we have called "progress", fearful of change. And there will be many who will oppose these changes because they have something to lose, something personal to put before the whole. But we are in grave danger. Who can deny a malaise is abroad in the land? A renowned and revered culture offers us the solution, a culture so large it is, in itself, a consensus. Only reactionaries and xenophobes can disagree. We must act, and now.