Everything wrong with economics today.

"For an ambitious economist like Peter Orszag, going to work for Citigroup represented a choice. As a young staffer working in the Clinton White House, he saw laid before him two different paths: Stiglitzism and Rubinism. There were both intellectual and career-arc components to these. While both are liberal Democrats, Rubin was the consummate insider, whose philosophy was that the free markets, balanced budgets, and limited regulation would create a rising tide that would lift all boats (or at least make Wall Street not complain too much about Clinton’s social programs). Stiglitz, the public intellectual, is as concerned with the boats as with the tide. Orszag certainly had a lot in common with Stiglitz’s academic mien, having grown up in an intensely intellectual family in Lexington, Massachusetts, outside Boston. His father is a celebrated Yale math professor. But Orszag possessed an ambition that would take him beyond the ivory tower. He ultimately chose Rubinism. It makes perfect sense that Orszag would have been drawn toward Rubin. It must have been incredibly seductive seeing this world, watching the Rubin wing of the Democratic Party move so easily from government to Wall Street boardrooms to the table with Charlie Rose."

It is increasingly exasperating to see some of the best and brightest have to veer away from solving world issues in order to complete careers that might be counter-productive to that goal. 

"The Dominoes Fall"

 http://www.youtube.com/watch?v=SZGNFmugLS4

"In the second half of 1997, Indonesia became the country hardest hit by the Asian economic crisis."
"Shots rang out. Four Indonesian students were killed."
"On the 13 and 14 May rioting across Jakarta destroyed many commercial centres in Jakarta and over 1,000 died."
"Suharto reads his address of resignation"
"Bill Clinton: I should have better regulated derivatives"
"In 2009, the derivatives market stood at $615 trillion, several times the global GDP of $74 trillion."
"AIG was on one side of these trades only: They sold credit-default swaps. They never bought. Once bonds started defaulting, they had to pay out and nobody was paying them."
"Credit-default swaps for Italy and Spain are surging"
"43% of Spain's youth, overall, are unemployed; higher than both Egypt and Tunisia"
"Austerity Might Not Work for Spain and Italy"
"For the international banking system, potential losses for French, German and US banks (+insurers) could easily lead to a new liquidity crisis in the interbank market, aka a new Lehman."
"Frank-Dodd never systematically address "too-big-to-fail". In fact, American investment banks are now even more consolidated then they were that fateful day Lehman Brothers fell."

Moving on Change---Ending the War on Drugs.

http://www.change.org/petitions/president-barack-obama-end-the-war-on-drugs

Recent evidence has suggested that decriminalization may be a viable alternative not only to deal with suppliers, but with users as well.

In Portugal, after a 2001 law that removed all criminal penalties associated with all drugs and referred all drug users to a panel of psychologists and social workers, severe drug abusers were halved, HIV infections were stymied, and Portugal had the lowest amount of lifetime use of marijuana in people above 15 in the EU at 10%. A comparable statistic of people above 12 suggests that the same statistic applies to nearly 40% of the American population.

Prison is the most expansive way to "treat" an addiction. It is an unfair burden upon the taxpayers, who in the United States, have to shoulder the highest recorded incarceration rate in the world. Drug crimes often destroy the lives of those charged with it as well, as they are stuck in a recessionary environment that sees convicted criminals as not worthy of any gainful employment, and therefore, they are left to their own devices, to the detriment of themselves and of society itself. The Supreme Court has ruled that this situation is unsustainable. "California could be forced to release tens of thousands of felons early after the Supreme Court ordered it Monday to reduce overcrowding, in a warning to states that efforts to get tough on crime must be accompanied by adequate prison funding. In a 52-page opinion illustrated with photos of teeming prison facilities and cages where mentally ill inmates are held, Justice Anthony Kennedy cited lower-court findings that preventable suicide and medical neglect "needlessly" cause the death of at least one inmate a week in California's prisons. The state system was designed for 80,000 inmates but holds nearly twice that many." The only people who gain from this situation are those that run the private-prison industry, criminals who profit from the risky nature of illegal enterprise, and to a limited degree, banks like Wachovia that have been to known to launder drug money. This is a very narrow set of interests, but American policy has often been hijacked by those with singular and short-sighted goals in mind.

Economists have calculated that merely legalizing marijuana in the United States would "save $7.7 billion per year in state and federal expenditures on prohibition enforcement and produce tax revenues of at least $2.4 billion annually if marijuana were taxed like most consumer goods. If, however, marijuana were taxed similarly to alcohol or tobacco, it might generate as much as $6.2 billion annually. "

Legalizing drugs does not mean condoning their usage. It is merely recognizing the inefficiency of using government force and the threat of prison to achieve this goal, just as the politicians who ended Prohibition realized. Legalizing drugs would allow for regulation that could severely reduce the health effects of improperly using them (sharing infected syringes or smoking marijuana when that is the unhealthiest way of consuming the latter). It would put the hands of the enterprise of drugs in the hands of corporations bound by laws and rules, rather than to psychotic criminals who use violence to achieve their goals.

Secretary of State Hillary Clinton says there is "no alternative" to confronting the cartels, even as she admits the current strategy is flawed. This is patently false. There is a choice we can make...and it is a choice that our tax dollars, the lives of drug users and the lives of innocent Mexicans depend upon. Sign this petition if you realize that insanity is doing the same thing over and over again, and expecting different results. Sign this petition if you want there to be meaningful change on a topic that has been stuck in irrational static for much too long.

The State of New York legalizes same-sex marriages.

http://www.nytimes.com/2011/06/25/ny...e.html?_r=1&hp

ALBANY — Lawmakers voted late Friday to legalize same-sex marriage, making New York the largest state where gay and lesbian couples will be able to wed, and giving the national gay-rights movement new momentum from the state where it was born. 

"You get to the point where you evolve in your life where everything isn't black and white, good and bad, and you try to do the right thing. You might not like that. You might be very cynical about that. Well, **** it, I don't care what you think. I'm trying to do the right thing. I'm tired of Republican-Democrat politics... I'm trying to do the right thing, and that's where I'm going with this."

-Roy McDonald, NY state Senator, Republican, who voted yea on same sex marriage bill.

What if education funding were like prison funding? What would happen if schools were treated like prisons?

Well, they'd be treated a lot better, fiscally anyhow.

"Consider the life of a Michigan prisoner. They get three square meals a day. Access to free health care. Internet. Cable television. Access to a library. A weight room. Computer lab. They can earn a degree. A roof over their heads. Clothing. Everything we just listed we DO NOT provide to our school children.

This is why I’m proposing to make my school a prison. The State of Michigan spends annually somewhere between $30,000 and $40,000 per prisoner, yet we are struggling to provide schools with $7,000 per student."

Irony: Wiretaps and Goldman

Combining my two most favorite subjects lately...

"The successful prosecution of Raj Rajaratnam suggests the difficulty prosecutors would have against Goldman Sachs. At this point, the big question for prosecutors is less about what they know to be true and more about what they can prove. And "to make a criminal case out of the mortgage activities, prosecutors would need at least one credible witness from inside the firm to point the finger at Goldman and its executives to show the company's culpability, proving that it was more than just a sharp operator."

Investigators do not have that one credible witness from the inside, and it's doubtful it will find one. Omerta will likely hold.  Unfortunately, investigators do not have wiretap evidence--something that would prove superior to a bunch of suggestive but not definitive emails."

The Obama Administration seems hellbent on renewing PATRIOT and violating the rights of average Americans even more than the Bush Adminstration.

Now there's a scenario this constant surveillance might have actually been very useful, and we've hit a wall. Instead of trying to catch a bunch of lunatics who leave other very obvious intelligence signs, we could have been wiretapping the banks, and getting enough evidence to stop what amounted to something terrorists have always aimed to do---bringing the American economy down with clandestine activities.

I guess that's irony, folks. 

Terrorist or freedom fighter?

A historical precedent: a robot signs PATRIOT Act extension into law.

With President Obama in Europe, an "autopen" has been assigned the dubious task of continuing the legacy of constitutional excesses of law, and civil rights violations.

While most of the provisions of the PATRIOT Act are permanent law (a sad fact indeed), the most controversial facets, and the ones most vulnerable to abuse and violation of the Constitution, are subject to periodic review. This includes the following three provisions: roving wiretaps that follow targets within US borders and may pick up civilian information, searches of business records, and conducting surveillance on "lone wolves"; individuals suspected of terrorist-related activities but not officially affiliated with any extremist group.  

All three provisions have been re-approved by the autopen. 

This appears to be the first time that a robot has been used to sign a law into application, and it appears to set a precedent that is still in a legal gray zone.

I for one do not welcome our new civil-rights, warrentless wiretapping overlords.