The Will of the People

 

The Will of the People

Kamala's campaign has received an astonishing $200 million since her coronation. So it has been with money in politics and so it will always be. Do people think this kind of money is put in as a sort of detergent, trying to clean up what it can? Or is it what it appears, a powerful influence that can overturn the results of months of a voting primary in a day.

As an unsuccessful candidate for her party’s nomination in 2008, and accepting her party’s nomination in 2016, Hillary Clinton wanted to “get money out of politics.” But also in 2016 she overcame her aversion to money and outspent Trump 3 to 1. The progressive aspiration is to remove private money from politics.

This would extend government’s domination of society to politics — to the debate about the composition of government. The maximum progressive aim is to remove voluntary political contributions from politics and restrict candidates to spending money that government extracts from voters by taxation. The overwhelming majority of voters — this we know — will not voluntarily pay for politics.

Every year, Americans can check a box on their tax returns, thereby giving $3 (without increasing their tax liabilities) to fund the presidential campaigns of nominees who agree not to accept other money. In 2023, only 3.35 percent of tax filers checked the box.

Mexico Surprise

Scottish Rural Affairs Secretary Mairi Gougeon said that since 2000, 15.7 million trees have been felled on land managed by Forestry and Land Scotland to make way for wind farms. She said that represents about 7,858 hectares (19,417 acres) of trees. The government is looking to more than double the amount of electricity generated by wind in Scotland, and it is looking at legislation that would further weaken protection for wild lands and allow larger wind turbines of up to 850 feet tall.

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In the 1980s, Fabio Lanzoni started to model for romance novel covers. Lanzoni has since appeared on at least 460 romance novels, with some believing the actual total is closer to 1,000.

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…we estimate the odds that Asian American applicants were admitted to at least one of the schools we consider were 28% lower than the odds for white students with similar test scores, grade-point averages, and extracurricular activities. The gap was particularly pronounced for students of South Asian descent (49% lower odds). We trace this pattern in part to two factors. First, many selective colleges openly give preference to the children of alumni, and we find that white applicants were substantially more likely to have such legacy status than Asian applicants, especially South Asian applicants. Second, after adjusting for observed student characteristics, the institutions we consider appear less likely to admit students from geographic regions with relatively high shares of applicants who are Asian.--NBER paper

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WOD

Vulcan

MEANING:

noun: 1. A blacksmith or a metalworker.
2. A miner.
3. A person whose leg is broken or deformed.
4. A cuckold: a man whose wife is unfaithful.
5. One who is extremely logical and lacks emotions, humor, etc.
adj.: Extremely logical, unemotional, etc.

ETYMOLOGY:
For noun 1-4: After Vulcan, the god of fire and metalworking in Roman mythology. Vulcan’s mother Juno wanted a beautiful child and hurled the plain-looking baby Vulcan off Mount Olympus. His leg broke when he hit the water. Vulcan may have been ugly but he married Venus. On the other hand, Venus was unfaithful to him. Earliest documented use: c. 450 CE.

For noun 5 & adj.: After Vulcans, a humanoid species from the planet Vulcan in the Star Trek TV series and movies. Vulcans are extremely logical and show little emotion. Earliest documented use: 1966.

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Mexico Surprise

The peso is the top-performing major currency this year, according to Bloomberg, and has more than recovered from its coronavirus pandemic weakness. This year, it has risen 8.5 percent to trade above 18 to the dollar…

Foreign direct investment in Mexico hit $35.3bn last year, the highest level since 2015, according to economy ministry data. Transport manufacturing accounted for 12 percent of that.

Another source of foreign income has been resilient remittances from Mexican migrants in the US. The transfers from abroad now make up 4 percent of the country’s gross domestic product. Even after growing to record levels last year, in January remittances were 12.5 percent higher than the same month a year earlier, according to Bank of Mexico figures.

SEC

 

                                                               SEC

 Nasdaq is calling for all its listed companies to appoint within the next four years no fewer than two “diverse” directors: at least one woman, and one person from an underrepresented racial or ethnic group, or someone who identifies as LGBTQ. Any company failing this requirement would be obligated to explain why. This new standard now faces approval from the Securities and Exchange Commission. 

The SEC's decision should be fascinating because the SEC is tasked with safeguarding the investor. There may be other, peripheral factors in their decisions but the investor is their primary responsibility. Including a social engineering component to their job complicates their job tremendously--if they take it seriously.

Men and Women and Soccer Money

You have to love a nation that celebrates its independence every July 4, not with a parade of guns, tanks, and soldiers who file by the White House in a show of strength and muscle, but with family picnics. -Erma Bombeck, author

I joined an on-line writing course and, so far, have been really disappointed. 
Chris, in a post-op enthusiastic haze, played softball last night and got run over--but not hurt. There was some excitement, though.
On Monday, Barr told reporters that he had recused himself from the case involving billionaire pedophile Jeffrey Epstein, who was arrested over the weekend on charges of sex-trafficking minors, according to the Washington Times. Barr says that he used to work for one of the law firms representing Epstein "long ago," though he did not name the firm. 

Coal has historically been the largest energy source for America’s electricity generation, and provided more than 40% of the nation’s electric power in every year between 1949 and 2011, and more than 50% in 43 of those 59 years. During the last full year (2018) natural gas provided 35.5% of electric power versus 27.7% for coal, its lowest share in the history of this data.

But any proposal by economists or others to cut tax rates, including reducing the tax rates on higher incomes or on capital gains, can lead to accusations that those making such proposals must believe that benefits should be given to the wealthy in general or to business in particular, in order that these benefits will eventually “trickle down” to the masses of ordinary people. But no recognized economist of any school of thought has ever had any such theory or made any such proposal. It is a straw man. It cannot be found in even the most voluminous and learned histories of economic theories.--Sowell on the mysterious "trickle down" effect thesis

As Walt Disney, AT&T’s WarnerMedia and Apple prepare to enter the crowded streaming-entertainment market, they are racing to stand out with eye-catching shows that cost as much for a season as a big-budget movie. An episode of ‘The Mandalorian’ costs Disney nearly $15 million, according to people familiar with the matter.

Lucy Jones on earthquake "magnitude:" "'Well it was a magnitude 7.1 in Ridgecrest, what is it here?' You can't actually answer it, it's a 7.1 everywhere, 7.1 doesn't have a location type. That is the number representing the total amount of energy released by the earthquake.

It's like saying, I can see that house across the street. It's 20 feet tall over there. How tall is it over here? It has a certain size and it is what it is.

What you feel is a different quantity called seismic intensity, and the intensity depends on location. The Japanese maybe do this in a better way, when they talk to the public they only talk about intensity. It was intensity VII over here and intensity V in Tokyo, for example. In this one, we would say it had a maximum intensity of IX and in Los Angeles it was a III.....If I could start things over, I would wipe out magnitude and only use intensity and just do it this way."

In a 1973 Gallup poll, just 4 percent of whites and 9 percent of blacks chose busing from among a variety of means of achieving integration.

From a published article on the need for stronger hands on America's reins written, I suppose, by a grownup: "Given the stakes—famine, war, extinction—nothing less than a complete reorganization of society is required at this point. Most of what we in the techno-industrial world are doing now must be drastically curtailed or eliminated: the military, consumption-based economics, debt, animal agriculture, baby making, just to name a few..... So how do we implement change on such a level? Won’t it require centralized decision-making and top-down implementation? And not just a regulatory authority—à la the UN with teeth—but a “benevolent dictatorship,” to invoke a well-worn phrase? Don’t humans need to be forced to do the right thing, at literal gun point if need be? Some people think so.....
So yeah, maybe we need a dictatorship—we here in the US—but if so, it’s not up to us to install it. If it’s time for us to take orders, it’s got to be from people who aren’t saddled with our shit. People who aren’t US Americans."
We have moved from dictatorships to fulfill idealistic fantasies to dictatorships to fend off horrible fantasies. Evolution. And the propaganda of stupidity.

On this day in 1925, in Dayton, Tennessee, the so-called Scopes Monkey Trial began with John Thomas Scopes, a young high school science teacher, accused of teaching evolution in violation of a Tennessee state law. William Jennings Bryan, the three-time Democratic presidential candidate and a fundamentalist hero, volunteered to assist the prosecution. Soon after, the great attorney Clarence Darrow agreed to join the ACLU in the defense, and the stage was set for one of the most famous trials in U.S. history.

 
           Men and Women and Soccer Money

There is a lot of talk about a perceived gap in pay between Women’s World Cup competitors and their male counterparts. In absolute numbers, that is true. In relative numbers, when one looks at the pay in comparison to the revenues earned by the respective tournaments, women are overpaid.

For example, the winning team of 2014 World Cup, Germany, received $35 million, while the American women’s team which won in the final was given 17.5 times less, $2 million.

But, on average, 53,592 attended Brazilian stadiums for the men in 2014 and while the women attracted an average gate of 26,029 in Canada. For only five games, 
And the 2014 men's World Cup earned $4.8 billion. Billion. The women's side earned a fraction of that.

In 2011 the Women’s World Cup hosted in Germany had earnings of $72,818,500. The South Africa men's World Cup in 2010, had sales of $3.7 billion. That is 50 times greater.

When comparing the pay of the players relative to the event’s revenue, one sees the discrepancy, that women players gain a higher percentage of the event’s earnings than men. In 2011, the payout for women’s event was $10 million. This would mean the players earn 13 percent of total revenues.

In 2010 the total men’s prize money was $348 million, that is nine percent of that tournament’s earnings. It was even worse for men in 2014 when they received seven percent of the revenue.

So the Women's World Cup brought in almost $73 million, of which the players got 13%. The 2010 men's World Cup in South Africa made almost $4 billion, of which 9% went to the players.

This hasn't changed. The men's World Cup in Russia generated over $6 billion (Billion!) in revenue, with the participating teams sharing $400 million, less than 7% of revenue. Meanwhile, the Women's World Cup is expected to earn $131 million for the full four-year cycle 2019-22 and dole out $30 million to the participating teams.

There is an interesting bias here: The idea that participation deserves compensation regardless of production. It is reminiscent of the old Marxian idea that value is created by the producer and not assigned by the consumer, that something is of value regardless of whether or not its value is appreciated. So women's soccer is valued even though no one watches it. Even though the men's game is vastly more popular, somehow they should have similar "value."

But it is unlikely that there is any longing for Nineteenth Century revolutions here. This is a simple preoccupation with the fear of distinction, the separation of results on the basis of some un-agreed upon criteria--like preference or quality. These are dangerous ideas and concepts to undeveloped minds. Homogeneity is crucial when managing a herd.

Bill Gross' New Letter‏

Bill Gross periodically issues a letter on his views of the economy--and sometime a lot more. This is from his recent letter:

Some politicians like Paul Ryan who argue for balanced fiscal budgets are intelligent sounding but relatively clueless. “Austerity – if not now, then when?” he would argue in Reaganesque twitter. “Let’s slow down or even stop the inexorable clicking of the debt clock: 16 trillion, 17 trillion, 18 trillion”…he would add. Well yes, every little bit helps, Mr. Ryan, but the fact of the matter is (a great political phrase, is it not?) that reducing the growth rate of current government debt does little to help what in essence is a demographic not a financial problem: too few Millennials to take care of too many Boomers. Social Security “lock boxes” or Medicare/Medicaid “trust funds” which in essence represent “pre-funded” liability systems, cannot correct this demographic imbalance, because financial assets represent a “call” on future production. If that production could possibly be saved like squirrels ferreting away nuts for a long winter, then Treasury bonds or purchasing corporate stocks might make some sense. But they can’t. Future healthcare for Boomer seniors can only be provided by today’s Millennials and even doctors yet to be born. We cannot store their energy today for some future rainy day. Nor can we save food, transportation or entertainment for anything more than a few years forward. Each of those must be provided by a future generation of workers for the use of retired Boomers. And as Chart 1 points out, the ratio of retirees to workers – the dependency ratio – soars from 25 retirees for every worker to 35 over the next 10 years or so.

There’s your problem, and neither privatization nor any goodly number of government bonds deposited in the Social Security “lock box” can solve it. While these paper assets may “pay” for goods and services, their value will be market adjusted in future years to exactly match the quantity of things we buy, and that quantity will be substantially a function of the available workforce and the price they command for their services. This is another way of saying that the value of Treasury bonds and even private pension held stocks will be marked down in price as they are sold to pay for future goods and services, and that the price of these goods and services will be marked up (inflation) to justify their reduced demographic supply. Productivity gains are often advanced as a solution but productivity gains have been shrinking in recent years, and even so, employed workers cannot be expected to hand over future advances to retirees without a fight. Having more babies would also turn the trick, but at the moment, making fewer seems to be the going trend.

Student Loans

In 2010, Obama signed a law federalizing the student loan program, claiming that the banks were needless middlemen and that the government could just lend the money directly and save truckloads of money. Critics said that the Education Department is ill-equipped to identify risks when making loans. Easy terms and high default rates forced the Congressional Budget Office recently to increase the program's cost by 7 billion — a 30% jump. The New York Fed reports that 11.5% of student loan debt was more than three months past due in Q2 of this year, which was up from Q1. By comparison, the 90-day delinquency rate on credit card debt is just 8.4%. The Department of Education that 6.9 million people haven't made a student loan payment in more than 360 days, which is up 6% from the year before.
Enrollment in income-based loan programs — which base monthly payments on current income and forgive any remaining debt after 20 years — exploded 56% in just the past year. The amount of direct federal student loan debt has climbed more than 600%. The Department of Education now manages a loan portfolio bigger than the entire loan business of JPMorgan Chase.

Letter to My Kids About Money

Dear Kids,

What you should do is start developing a philosophy for investing. Mine is that all intermediaries are thieves, that people make more money brokering money flow than investing it and that safety is primary. The history is that stocks, generally, do better than any other investment as the economy has consistently grown. However, there are some debates: U.S. vs. International, Small vs. Large Caps etc..
What is beyond debate is saving, i.e. spending less than you earn, works.
Certainly some investments do better than others but rarely will one adviser or group of advisers consistently do better than others. Long Term Capital Management was run by two Nobel Prize winners and went broke. Twice. This has led to the notion of "diversity" where people invest in everything and pretend it is a philosophy.
Beating anyone to the punch in the market means finding an investment before someone can sell it. That is rare. I know a broker in Chicago who said their firm sold only the products the brokers did not want.
This is the one thing to remember: The single biggest problem with investing is the common--and entirely erroneous--idea that logic, intelligence and common sense can give an investor an advantage. The basic rule of investing is that the market can be stupid and illogical longer than you can remain solvent.
There are some real debates in the market. I think you should invest in mutual funds that have very low costs and those funds should be broad based. Of those, I think the equal weight funds make the most sense--Rydex S&P 500 Equal Weight ETF (RSP) is one-- and the Joel Greenblatt Formula Funds are intriguing, but really expensive.
So do a little reading and see what you think. I like debating this stuff.
The basic problem:
http://steeleydock.blogspot.com/2009/07/upheaval-and-investment.html and the link:
http://www.ritholtz.com/blog/2014/02/the-best-investment-advice-youll-never-get-2/

This is a bit young but worth it:

http://www.getrichslowly.org/blog/2014/07/24/why-you-must-teach-your-children-about-money/
The first investment to make:
Vanguard Short-Term Investment-Grade Fund Investor Shares (VFSTX)
Love, Dad

America, at last, Forgives its Weallthy

The Clinton financials are not as amazing as the efforts to obscure them. Hillary has had a net worth of between 10 and 50 million dollars reported over the period from 2008 to 2010 but nothing specific other than one account has ever been declared. (Remember Harry Reed's outrageous claim on the Senate floor--where he could not be sued for libel--claiming Romney paid no taxes.)
The Clintons' combined confirmed income between 2001 and 2012 was at least $136.5 million. When looking for some idea of the Clinton money, the Clinton Foundation rarely comes up as reporters act as if it is something separate and sacred. It is worth over $2 Billion. Billion.


A recent smokescreen appeared in an article pretending to show the great wealth of historical presidents in today’s dollars, adjusted for inflation--a tremendous distortion caused by land inflation. If you owned a cobbler shop in Washington in 1800 you would be a zillionaire now.
According to 24/7 Wall Street:
John F. Kennedy, had he lived, would have inherited a fortune from his father estimated at $1 billion.
Older presidents have their worth skewered by increases in current land prices: George Washington worth some $525 million, Thomas Jefferson’s net worth about $212 million, Theodore Roosevelt ($125M), Andrew Jackson ($119M) and James Madison ($101M).
Carly Fiorina, the former Hewlett-Packard CEO, is worth around $80 million, Texas Senator Ted Cruz is worth just over $3 million, while Rand Paul has some $1.3 million.
Florida Senator Marco Rubio has an estimated net worth of $443,000, while Bernie Sanders, the socialist Senator from Vermont, has $330,507.

From The New Yorker "Borowitz Report"

WASHINGTON ( The Borowitz Report)—Congressional seats are on pace to fetch a whopping four billion dollars on Tuesday night, a record-smashing sales figure that has exceeded the expectations of even the most optimistic insiders.
The seats, which include four hundred and thirty-five in the House of Representatives and thirty-six in the Senate, have attracted buyers from a broad spectrum of industries, including investment banking, energy, pharmaceutical, and gun.

“With all of the uncertainty in the world today, the United States Congress is considered a very safe place for the rich to invest their money,” said Charles Michollot, of the auction house Sotheby’s. “Congressional seats are like Manhattan real estate—they aren’t making any more of them.”
But Anton Pickardin, of the rival auction house Christie’s, sounds more skeptical. “I hate to be a wet blanket, but these sales figures lack rhyme and reason,” Pickardin said. “When someone is willing to pay millions of dollars for a pre-owned Mitch McConnell, you know that people have lost their minds.”
But Sotheby’s Michollot remains confident that, even at these hefty prices, congressional seats are a wise investment. “When these seats go up for sale again, in 2016, four billion dollars is going to look like a bargain,” he said.

A Third Rail

A recent article in Vanity Fair focuses on Karl Rove and his efforts to organize pro-Romney financial support through PACs. Hopefully this is not the real intent of the article; hopefully the real purpose is to show how a sizable third stream of influence is emerging in American politics. In this particular instance the money is raised outside the Republican Party infrastructure and being organized by the villain, Rove. But money is just a thing. Like a gun, it must be aimed. These organizations are pro-Romney today but, tomorrow may not be. Indeed, tomorrow they might be pro-Obama. Or pro-coal. Or pro-China.

In 2008, Obama outspent John McCain by around two to one. This year Super-PACs supportive of President Obama have spent twice as much on anti-Romney ads as conservative PACs have spent on anti-Obama ads. The NYT reports some analysts believe that Obama, after raising and spending $750 million in 2008, will come close to raising $1 billion this year.

$1 billion. Each dollar with its own string attached. From who knows who and with what motive.

Meanwhile, in Tampa, social activists are protesting something at the Republican convention dressed as vaginas.

A Bigger View of the Elephant

In a country where the main political debate centers on 1% of the population, an overall view of the country and the world might seem too much to digest. After all, don't we have our hands full with this 1% argument?

The following contains a number of snippets from the Simon Hunt November/December Economic Report made available by the Mauldin Report. It contains some nice observations about the world economy, its direction and some predictions. Some are quite shocking, like the vulnerability of the Chinese economy and the low likelihood of inflation. There is also the suggestion, not included, that businesses will try to move closer to their homes to manage costs better. As always there is a buyer for every seller, a seller for every buyer and, in general, at least two sides of any argument. These guys may be completely wrong, or half wrong. But it is a concise presentation (perhaps ineptly summarized) and worth the consideration.



The monetary assumption that what was appropriate for Germany in the EU would be appropriate for all of the other members. Herein lay the fault lines. The weak members were able to get a German credit rating which meant that they could borrow to consume goods and finance industry and infrastructure that otherwise would not have been possible. Banks, too, were happy to lend to the governments of these countries because they could take the loans to the ECB and use them as collateral for even more borrowing. A credit frenzy followed which has resulted in today's debt crisis.

The world will suffer from rolling recessions starting either next year or in 2013 lasting to about 2018. Global industrial production should fall by an average of 0.25% a year during this period.
• By then the process of deleveraging should have run its course. The world beyond 2018 will be a different place. World industrial production should average around 3% a year to 2030 compared with an average of 3.3% in the period 1990-2010. Monetary policy will also be quite different; global money supply will match global GDP, not the massive increase experienced since 2008.
• Asset inflation will be virtually non-existent

Each of the three principal pillars of the world economy, the USA, Europe and China, has their own problems, but they boil down to two simple ingredients: debt and demographics
The choice before Germany is then simple but harsh. Either to throw caution to the winds and hope that by printing money the Euro Zone can be saved and stability created or to accept the painful truth that "the Euro is an incoherent nonsense which, in its current form, is doing far more harm than good", as Liam Halligan wrote on Sunday.

The financial fate of Europe's banks and its governments are inextricably linked: because the banks are the primary source of funding for government deficits, government debt represents a large proportion of the asset base of most eurozone banks. Insolvency of one therefore threatens the insolvency of the other
In the end, the only way out is to increase saving." This is part of the process of deleveraging which is likely to take until around 2018 to run its course. These years will be characterized by rolling recessions and deflating asset prices interspaced by short periods of recovery.

Debt is bad for growth. "In the end, the only way out is to increase saving." This is part of the process of deleveraging which is likely to take until around 2018 to run its course. These years will be characterized by rolling recessions and deflating asset prices inter-spaced by short periods of recovery. So, as public debt rises and populations age, growth will fall. As growth falls, debt rises even more, reinforcing the downward impact on an already low growth rate.

"Aging will cause growth in household financial wealth to slow by more than two-thirds across countries we studied (USA, Japan, and W Europe), from 4.5% historically to 1.2% going forward. The slowing growth will cause the level of household financial wealth in 2024 to fall some 36% or by $31 trillion, below what it would have been had the higher historical growth rates persisted."

A surprising development is that the demographic profile of the USA is so much better than that of China. Once the USA puts its financial house in better order, which it will if not willingly, its growth expectations will be better than China's. As we say in Yorkshire, "Think on". For China, based on simple fundamentals, growth has peaked.

Too Evil to Live

Everyone should watch "Too Big to Fail" on HBO, the movie version of The Time's writer Andrew Sorkin's book. Then everyone should read "The Big Short" by Michael Lewis. In both, grotesque, self-centered, destructive but good hearted politicians confront grotesque, self-centered, destructive and rapacious money changers. If there are any two books that are more discouraging about the future of western liberalism, they must have been burned by politico-economic censors.

In "Too Big to Fail" a compelling Henry Paulson walks through the carnage created by these politico-economic vandals like a stricken benumbed survivor of some huge natural disaster. But it is not natural. No natural force is as evil and dismissive of its damage as the combined effort of a superficial, posturing politician and a percentage-hungry financial predator. In "The Big Short" petty, stupid well educated people in both government and finance make error after error to aggrandize or enrich themselves at the expense of every possible innocent they can find. These two works are as profound an argument for benign dictatorship as has been made. It is astonishing that the financiers and politicians from New York to Malibu are not hanging from lampposts from sea to shining sea.

Paulson won an extraordinary victory against overwhelming self-interest but the battle is still is an early round. If the politicians and their incestuous financiers have anything to say about it, this battle will have no time limit.

Strangely we, the noncombatants, will be the eventual knockout victim.

financial triage

This topic is crucial to every one's life: what to spend in the year. These stats are from the government and are quite extensive. Interestingly--and disingenuously--they do not include taxes which should be on every one's mind. But these are the numbers the average family spends after taxes and they are instructive. They are broken down in nice detail. If you believe as I do that the country will not grow much in the near future but there might be some financial distortions, for example energy costs might go up but inflation will not because credit and debt will shrink and thus contract the money available, then what increases in the chart in the future must be shifted from the chart. I.E. the chart will not grow: if one thing cost more it must be paid for by a shift in expense from something else. These are interesting to ponder.

http://www.visualeconomics.com/how-the-average-us-consumer-spends-their-paycheck/