I Feel Kind of Dirty

I just endorsed Dan Burton.

I had to go back to the candidate list from the Secretary of State of Indiana to make sure I wasn't missing a third candidate. No luck. I went back to the Libertarian Party of Indiana's website to double-check too. No luck.

Look. I know some of you are thinking, "why don't you just not vote for either candidate?" Well, that goes against my philosophy. I think we have an obligation to vote for the best candidate on the ticket. And I don't think that write-in votes are effective at all. So, if Burton is the better candidate, then he gets my (reluctant) vote.

This just adds more fuel to my personal fire that something needs to be done. There must be a better option in the 5th district in 2010.

Election Time! IN 5th District

U.S. Congress - Indiana's 5th District

Incumbent: Dan Burton (R)
Challenger: Mary Etta Ruley (D)

The 5th district is my home district. It used to be the 6th district and it's been home for Dan Burton since 1982. I moved to the south side of Indianapolis in the summer of 1982. Dan Burton has been "my" congressman for most of my life (I lived in NJ for 18 months). The district includes most of the south side of Indy, the east suburbs, booming Hamilton County and meanders its way north and east to include the outskirts of the Fort Wayne area. It is another nice piece of gerrymandering by the state of Indiana.

Ah... Dan Burton... First off, I have to say that Danny has one of the better websites that I've seen thus far. It is interesting that he has a special section devoted to debunking the myths of Dan Burton. Kind of funny. While it seems clear to me that Dan does not write on his own blog, it is at least kept up-to-date. He voted against the bailout. His stance on the issues is not too different the other incumbent Republicans we viewed. I do give him trying to drive additional accountability in government spending. However, he is hawkish on defense and the "War on Terror". The "War on Drugs" also holds a special place in his heart.

Mary Etta Ruley is also no stranger to Washington. She has worked alongside members of Congress and the Executive Branch. On the plus side, she means well and she's not Dan Burton. However, she supports many of the Democratic policies that I just can't get along with. On one side, she wants to bring manufacturing jobs back to America which have been lost; but, on the other side, she wants to increase minimum wage and promote union membership. These are contradictory goals. It just does not work. She has a degree in economics and wants to promote math and science education, yet she supports the "windfall profits tax" and states clearly that health care is a "Right!" (her emphasis).

Oh boy... I can't believe I'm going to do this...

Endorsement: Burton
Prediction: Burton

Election Time! IN 4th District

U.S. Congress - Indiana's 4th District

Incumbent: Steve Buyer (R)
Challenger: Nels Ackerson (D)

The 4th district is an interesting slice of western/central Indiana. It includes Lafayette, Purdue University, the west suburbs of Indianapolis, and moves south past Bloomington (but it does not contain Bloomington). Small parts of south and west Indianapolis are also included; as is Greenwood, the largest south suburb of Indy.

Steve Buyer is a pretty straightforward, Indiana-style Republican. He places a good deal of emphasis on helping veterans and is a Colonel in the Army Reserves. While I wouldn't describe him as "hawkish" (based on my limited research - I didn't read old speeches), his standing in the Reserves, service in the Gulf War and statements about making America safe raise a red flag to me. He did vote against the bailout.

Buyer is running against Nels Ackerson, a farmer cum lawyer who had an unsuccessful bid for Congress in 1980. He has an impressive resume featuring a J.D. from Harvard, where he also served as editor of the Harvard Law Review, and substantial international law experience. He talks a big game on cleaning up Washington (which is very good) and comes across as a fiscal conservative. He also dedicates space on his site to discuss property rights and the role of the Constitution. There are no over-the-top spending programs which he advocates, yet I'm skeptical that this is accurate. On almost every issue on his site, he mentions how he's consulted with relevant professionals - yet, there is not much detail as to how these consultations have led to a developed policy.

This is a close one...

Endorsement: Ackerson
Prediction: Ackerson (judged by the number of yard signs I've seen for him vs. Buyer!)

Loose Ends... Vol. XIV

Henry Waxman (D-CA) was a busy man this week holding hearings with the credit ratings agencies and federal regulators. The documents pertaining to the ratings agencies hearings can be found here. The more I learn about what these companies do (actually, what they don't do!), the more I realize reform is needed. The big three (Moody's, S&P, and Fitch) dominate the U.S. market with over $6BB in revenue in 2007. Moody's margin is over 50%. This industry needs an overhaul with increased competition and accountability. If you are going to pick one file to read from the hearing, read the memo to Moody's board of directors.

Then Alan Greenspan, Christopher Cox, and John Snow were grilled by the committee. I didn't watch as much of this as I had wanted, but did get the vibe that Greenspan denied having any fault in the crises. He place the blame on the high demand for subprime mortgages which, due to low default rates as home prices grew, were easily packaged and sold to eager investors with the credit rating agencies happily following in tow with favorable ratings. Hmm... was there any other catalyst for the amount of money which was being thrown around? Could monetary expansion due to low interest rates and the resultant easy credit have anything to do with this spike in demand? I sure think so. I guess Alan doesn't. Or, if he does, he perjured himself.

This chart shows how the massive increase in home prices followed the sharp decrease in the Federal funds rate. Easy money from the Fed led to the expansion of credit, thus increasing demand for homes.

***

Also this week, Ralph Nader and Chuck Baldwin received airtime on C-SPAN as they were able to reschedule the presidential debate of the third-party candidates. Bob Barr and Cynthia McKinney were invited, but did not show up due to scheduling conflicts. I thought Baldwin did a fine job. Bob Barr's campaign has been as bad as John McCain's (or worse if that's possible), and this was a good opportunity for Baldwin to gain some support. I'm holding firm to Barr. But, that's due in large part now to Baldwin's absence on Indiana's ballot.

***

Finally, I laughed out load this morning at an exchange between Tom Brokaw and John McCain this morning on Meet the Press. It's pretty sad, actually: McCain is looking older by the day, he is losing ground on Obama by the day, and Tom Brokaw didn't even push the issue that McCain didn't even answer the question.

Election Time! IN 3rd District

U.S. Congress - Indiana's 3rd District

Incumbent: Mark Souder (R)
Challengers: Mike Montagano (D), William Larsen (L)

Indiana's 3rd district is pretty straightforward. It's biggest constituency resides in Fort Wayne.

Mark Souder was elected to the House in 1994 (originally in Indiana's 4th district, but now the 3rd after redistricting in 2002). He votes with a traditional conservative ideology. His stance on health care is appealing, and his comments on trade are relevant given the concentration of manufacturing jobs in his district. That said, his positions in the past against online gambling and the "war" on drugs are not the business of the federal government. His support of the federal government in Gonzales v. Raich shows that he is for big government as long as it's the big government that he wants.

Mike Montagano has never held elected office and has received support from the Democratic Congressional Campaign Committee. This could make the race interesting. Mike looks to be another Blue Dog, like Donnelly, as he is pro-life and pro-guns. This should play well in northeast Indiana. His website has relatively rich multimedia content, but it is thin on the issues.

That leaves us with William Larsen. Ugh. I hate to put so much importance on something so seemingly minor as the candidates website, but... geez. There is so much text it makes you dizzy. There are a few charts and graphs, but no pictures or anything remotely personal. This is politics after all. You have to be able to connect to your constituents and colleagues. Anyhow, he has a ton of information about why Social Security is broken and even some ideas on how to fix it. It would take me three years to read everything that he has on his "campaign" site, let alone his blog.

Endorsement: Montagano (reluctantly)
Prediction: hmm... toss-up... Montagano?

Election Time! IN 2nd District

U.S. Congress - Indiana's 2nd District

Incumbent: Joe Donnelly (D)
Challengers: Luke Puckett (R), Mark Vogel (L)

Indiana's 2nd congressional district covers north-central Indiana. South Bend and Notre Dame University are the most prominent fixtures in the district along with Kokomo due to a nice bit of gerrymandering.

Joe Donnelly was elected to the House in the 2006 elections and has aligned himself as a conservative, "Blue Dog" Democrat. He is pro-life and pro-gun rights. While he calls for fiscal responsibility, he did vote for the recent $700B bailout. He explains his vote here - remarking that it was needed to protect Americans' savings and that Wall Street will "get theirs".

Luke Puckett has no political experience to speak of, but won his primary handily earlier this year. He is a small businessman. Puckett's discussion of the issues paints him as a run-of-the-mill Republican. He calls for lower taxes, energy independence, pork reform, national security, immigration reform... nothing too surprising or inspiring.

Mark Vogel is the Libertarian Party's candidate. His website offers a good volume of content on his positions which echo the Ron Paul wing of the party. You can probably imagine how I feel about that, so I won't go into too much additional detail.

(One thing that strikes me in my research today on the first and second district is that the websites of the candidates are quite stale. There is hardly any discussion on the recent financial issues. It seems as if many of them haven't updated their websites for several weeks if not months. On the whole, they are poorly designed with inconsistent branding and navigation.)

Endorsement: Vogel
Prediction: Donnelly

Election Time! IN 1st District

Ok... this begins my series on the various races leading up to the election on the 4th. The goal is to get through Indiana's nine congressional districts and the gubernatorial race. If I am able to get to anything more in the next ten days, then that will be gravy!

U.S. Congress - Indiana's 1st District

Incumbent: Pete Visclosky (D)
Challengers: Mark Leyva (R), Jeff Duensing (L)

Indiana's 1st district covers northwestern Indiana - affectionately referred to as "the region". It is the home of Gary, Merrillville, Valparaiso University, Chicago's east suburbs, and more. A Democrat has been the district's representative since 1930.

Pete Visclosky was elected to Congress in 1984. He's been there since then. (Strike one!) His platform is typically Democratic. His campaign emphasis is placed on his call to scale down in Iraq, the benefits (pork) he brings back to his district, and unfair trade practices (particularly with China) which place a burden on his constituents. He is Chairman of the Congressional Steel Caucus.

This will be Mark Leyva's fourth attempt to unseat Visclosky. Leyva is an advocate of the Fair Tax as his website devotes several paragraphs to this topic. He also addresses the steel industry and U.S. trade practices which clearly have impacted the district. While he applauds Visclosky for his stance against NAFTA, he criticizes him on his support of GATT and the WTO.

Duensing does not have a website, and after some quick research, I couldn't find much of anything about him. Pathetic.

Endorsement: Leyva
Prediction: Visclosky

A Lesson from Bunnytown

This morning I was watching a little Bunnytown with my daughter. If you are not familiar, I would recommend a view. I was scared at first, but find the "Bunnytown Hop" to be quite the jam. At one point in the episode this morning, one of the bunnies was creating a large bubble. It kept getting bigger and bigger. In fact, it was so big that it was almost the size of earth!

Then, the bubble burst. It made a huge mess.

Sound familiar? Yes, if you create a large bubble, it will make a huge mess when it pops. If the bubble is big enough, it can impact the whole world. The scientist bunny on the show quipped, "all bubbles eventually pop".

Perhaps Congress, the Bush and Clinton administrations, Alan Greenspan, Ben Bernanke, and Wall Street executives should have watched this episode.

Political Puppet Theater

It becomes apparent that you have no life when you watch so much political coverage on TV (or read about it online) that you experience an overwhelming sense of deja-vu with every speech, every interview, etc. Naturally, this becomes even more exaggerated as an election approaches as candidates go from town to town, interview to interview--different audience, but same speech. This, of course, makes perfect sense from a campaign point of view (at least in today's political climate here in the U.S.) but I can't help but yearn for something "different."

It seems that this "oratorical uniformity" isn't completely lost on today's political analysts--watch just one hour of CNN, MSNBC, Fox, etc. and you'll likely see someone critiquing one of the candidates or campaigns for "harping" on a particular issue and saying the same things over and over (such as recently with the McCain's repeated efforts to associate Obama with William Ayers). That's fine...but what I certainly don't think there's enough of (I may be going a bit too far to say any of) is any mention of repetition or similarities between the two "major" candidates/two "major" political parties (after all, the candidates are just Democrat and Republican figureheads).

Yes, of course, there are differences in how to carry out various specific policies...differences in opinions on social issues, minutiae, etc. But when it really comes down to it, at the most basic level, both candidates/parties seem to espouse the same philosophy (regardless of what they call it) on the purpose of "government" at the most basic level...and it's not a philosophy that I feel leads us in a good direction. So, you're likely asking what is it that I mean by this?

It is rather unnecessary to list quotes from Democratic presidential candidate Barack Obama or to produce a lengthy analysis of his policy positions to say that fundamentally he believes in parity (in many respects--health care, jobs, etc.) for everyone and that this can best be accomplished by increasing taxes (or repealing tax cuts) for the "rich"--people making over $250,000. Fine...my goal here is not to analyze political philosophy or to launch into a diatribe on why I don't believe in socialism. No, my goal is merely to highlight what I feel to be Obama's philosophy on the function of government which certainly affects every policy decision/platform thereafter. I wouldn't go nearly so far as to call Obama a socialist, but I do certainly think that many of his ideas have that sort of "aura" and point in that direction.

I have no desire to vilify socialists or socialism myself, but many in the Republican party have no such qualms. In the past few weeks, both Republican presidential candidate John McCain and his running mate Sarah Palin have flatly accused Obama of being a socialist numerous times. What I find especially interesting is the vitriol that drips from their words when they make this accusation. "Socialist" has become something of a "naughty word" in the U.S., an accusation I dare say rather akin to being called an "anti-Semite"...an accusation which produces an immediate gut reaction of recoil. As an aside, I think this in particular has a great deal to do with the public education system in the U.S., which inculcates us from a very young age to revile such words as "socialism," "fascism," "Soviet," etc. as a simple matter of fact (with hardly any admission from anyone as to highly subjective, interpretative nature of "history") . This is a significant problem that perhaps can be dealt with in a future post.

In any case, it is clear that the Republicans (at least those in the campaign and currently in the "spotlight") would like us to believe that Socialism is a horrible thing, Obama is a Socialist and that McCain/the Republican party provides an alternative. While I have for a long time now held the view that both major political parties and those involved directly in our government are really all the same and deep down believe the in same thing--over-arching governmental control in many or all facets of our lives--it is somewhat more difficult to find clearly telling statements to this effect on the Republican side. I was then delighted (and at the same time dismayed, although not surprised) while watching John McCain give an interview with Chris Wallace on FOX News Sunday this past Sunday morning, where I heard him say the following:

But the point is that, of course, when a -- when a --that's the reason why we have governments, to help those who need help, who can't help themselves, and when time of crisis to step in and do what's necessary to preserve the lives and futures of innocent people.

Now at first this may seem somewhat innocuous, but I would urge you to re-read it. The fundamental "reason why we have government" presented by McCain here is really not much different than that of Mr. Socialist, Obama. While their means (and rhetoric) may seem vastly in opposition, they are really both advocating the same thing--large-scale government intervention in our lives.

So, in the end it really doesn't matter which of the two you vote for--you're really voting for the same thing either way...but (to use a recently coined cliche) it's not "more of the same" we really need. We need something radically different, someone radically different. Someone who understands that it's not our government's job to intervene in our lives and to take away from some citizens and give to others. To this end, I would insist that everyone read Bastiat's "The Law" which I believe my husband has mentioned in a previous post.

Where does this leave us? Where are we headed if most people blindly continue to follow the two-party system and don't wake up to the fact that they're both the same? Alas, that is the subject for another post! I would though like to leave you with a particularly pertinent quote from one of my absolute favorite comedians, the late Bill Hicks (quoting it in writing doesn't do it justice, so I'd highly recommend his CDs, if you've not offended by extreme vulgarity)--

I'll show you politics in America. Here it is, right here. "I think the puppet on the right shares my beliefs." "I think the puppet on the left is more to my liking." "Hey, wait a minute, there's one guy holding out both puppets!" "Shut up! Go back to bed, America. Your government is in control. Here's Love Connection. Watch this and get fat and stupid. By the way, keep drinking beer, you f***ing morons. (From the album Rant in E Minor)

Loose Ends... Vol. XIII

The big election was this week. In case you missed it, our neighbors to the north held their parliamentary elections. Stephen Harper of the Conservative Party maintained his position as Prime Minister with his party winning 143 seats - still 12 seats short of a majority. I wished I had been following this more closely - didn't even know it was going on. I stumbled across coverage on C-SPAN Tuesday night as the results rolled in... pretty cool, eh?

The thing I liked the most, on the surface, about this election was that four parties won a significant number of seats. Finishing with the second most seats was the Liberal Party with 76 seats. The Bloc Québécois won 50 seats (all in Quebec) and the New Democratic Party won 37 seats. Additionally, two seats went to independents and the Green Party managed 6.8% of the popular vote nationally.

The Liberals had the worst showing since 1984 when Mulroney's conservative coalition won in a landslide. This is after they ran the government from 1993-2006. The NDP won its most seats since taking 43 in 1988. The BC maintained its consistent showing as the powerhouse in Quebec since the introduction of the party in 1993 after the Conservatives failed to hold up their end of the bargain in promoting provincial sovereignty for Quebec.

I also think that it is pretty cool that five party leaders participated in the debates (despite some protests of the inclusion of the Greens). I think we could learn some things from our neighbors to the north.



The third party candidates here in the U.S. were supposed to have a debate tonight. In typical third-party dysfunction, it became disorganized and was canceled. Looks like there is hope for later this week.


Tuesday night also saw the third Indiana gubernatorial debate between incumbent Republican Mitch Daniels, Democrat Jill Long Thompson, and Libertarian Andy Horning. We'll be reviewing this race in close detail soon!


Oh yeah... McCain and Obama debated again too. It was the best of the three. Nothing new. McCain was grumpy.

Fannie & Freddie - Parts III-IV

Ok - so this is going to be a bit of a cop out. But, I wanted to at least get this out here as I had promised. Part III is supposed to discuss the connections between key Fannie and Freddie executives and board members with Congressional leaders and/or members of the Executive Branch. Part IV is supposed to allow me to rant and rave on the whole issue.

Well, a lot of time and bailouts have happened since this all started. We've been discussing related issues on this blog a lot lately, and I need to get on to reviewing (most) all the races here in Indiana. That will take some time. So, I want to get the Fannie/Freddie situation out of the way.

So, in terms of connections... you've probably heard about all the money that flows from Fannie and Freddie employees to Congressional candidates. I'm taking some shortcuts tonight, so please read the following links at your discretion. I received these in one of my updates from OpenSecrets.org during the week of the bailout.

Contributions
Investments
From July
Dems Lead
Freddie Summary

In looking at some of the data available with a little bit more detail, it doesn't appear that any particular member of Congress truly depended on Fannie and Freddie to fund their campaign. While Obama has received a lot of money from them, you have to remember two things. First, Obama has received a lot of money from a lot of people. Second, the contributions are from any employee at the company - not just the executives.

That all being said, there are some other things that, if I had all the time in the world, I'd try to research further. I'd want to review the current and former board members of the companies and look for precarious relationships. I searched quite a bit a week or two ago for a comprehensive list of former board members to no avail. However, two names of particular interest have made their way into my ears: Rahm Emanuel (D-IL) and Harold Ickes. I finally stumbled upon this article which summarizes the connections quite well. Wow.

So, what do I think about all of this? Well, that's probably pretty easy to surmise. The entangled web of politics and greed is disturbing. This messy web in particular has, in some form, contributed to a major economic meltdown across the entire "civilized" world.

I'll concentrate my next several (or more) posts toward the elections on November 4. I may try to put some other stuff on the page like a survey or something. Keep coming back... keep posting comments... let me know what else you'd like to see on the blog. (P.S. - we got our laptop back!)

The Road Ahead

I continue to maintain that the U.S. Constitution is a brilliant document. My research to date as well as my own common sense leads me to a very originalist interpretation. In the spirit of full disclosure, I have not read the Federalist Papers or other important contemporaneous documents. But again, the spirit of the law is clear to me. Unfortunately, it is also clear to me that step-by-step, it has been either been grossly misinterpreted or grossly abused.

Now, I don't want to spend a whole lot of time on this post talking about why the Constitution is so great. Nor do I want to point out the flaws which I perceive it to have. It is important to discuss two things.

First, its brilliance is, at its core, the boundaries upon which it placed the power of government. The checks and balances, separation of powers, and the vesting of (generally) unprecedented authority to the legislative branch show a stroke of genius from men who learned from history. Placing power in the legislative branch is so critical in that this is the branch of government which was best positioned - better yet, entirely designed - to serve as the voice of the people.

Second, its greatest failure, in my opinion, is to place limited ability to keep the powers in check. There are only two mechanisms: either the branches need to keep each other in line, or voters have to replace those in power. Over the years, these checks have proven to be insufficient in protecting the spirit of the original intent which, as I've asserted, is brilliant at its core.

This is ever so apparent today. We have repeatedly extended government power beyond its original intent. This week, we have, via Paulson's $700BB plan, entered into a deal to purchase equity in private banks through preferred stock. My point is not to argue whether this is a good thing or a bad thing (I do happen to think it's a bad thing), but to point out that it is grossly unconstitutional. This is a fact that has hardly been whispered.

Our Constitution is dead. We have entered into a more conservative form of social democracy. This is a popular form of government embraced in many places around the world. We look to the Constitution when it is convenient. However, the power given to our government officials, bestowed upon them via democratic elections, reigns supreme. Ultimately, the only check on power left is to the voting booth. The use of traditional checks and balances is used only as a tool for political gain. And our laws have been manipulated to better guarantee a duopolistic power structure amongst two ever-converging political ideologies.

In this system, our government can do whatever it wants - because they were elected by the people.

The road ahead is scary. But, it is justified by the vote of confidence which we'll collectively reinforce on November 4.

Loose Ends... Vol. XII

It was a wild ride across the world in the equity markets. It was hard to miss the news of the crash in the U.S. this week, but we were not alone. The chart below summarizes the week that was for the major stock indices of countries around the world. (Compiled using Yahoo! Finance.)

This results in severe losses for those who participate in the markets. This includes your 401(k), pension plans, and the small investments of people across the country (and world). But, it also includes major institutional investors, investment bankers and speculators. It really doesn't matter who are the biggest losers. It signals significant problems with the fundamentals of economies around the world.

Why would we see such a fall? Let's go back to the basics for a second. Owning a stock is owning a share of the company. The price of the stock is essentially an attempt at pricing the value of the company. The price of the stock multiplied by the number of shares outstanding places a price or value on the entire company (this is called the market capitalization). So, a decreasing stock price indicates a decrease in the overall value of the company. This can be caused by numerous factors. Two important factors are determined by the two key financial statements of a company: the balance sheet and the income statement (or P&L). The balance sheet looks at a company's assets and liabilities (debts). The income statement summarizes the profits for a company. If a company is overwhelmed with debt (as many are experiencing) or is expected to have a reduction in profits (perhaps due to a recession), the valuation should decrease.

This is clearly an oversimplification of the way the markets work, and, as such, an oversimplification of what happened last week. But, the increased risk of debt and the fear of an overall economic slowdown are the two basic reasons (in my opinion) that we had the crash.

As a result, the world's economic leaders met in Washington to work on solutions to the problems. The joint press release from the G7 leaders with their action plan can be read here. Henry Paulson's statement following the meeting can be found here.

This week I hope to get around to the next installment on the Fannie and Freddie rescue. I've also been continuing my reading of Ludwig von Mises. Our laptop is back - it seems to be working - but we are going to install a new operating system. So, once that's taken care of, I hope to increase the frequency of new posts. Until then...

"King Henry" indeed

It's hard for me to describe exactly what it is I've felt in response to the events of the past few weeks, I suppose mostly because it's been so many things--disgust, exasperation, disappointment, anger. I'd like to hope that I'm not anywhere close to the only one who shares these sentiments and I would strongly encourage ANYONE who is also outraged to not "suffer in silence." DO SOMETHING!! ANYTHING!! (well, "anything" within reason...I'd not like to be accused of encouraging lawlessness) Nothing will change until enough of the people realize that they can channel their outrage, frustration, or even apathy, into something more productive. Ok, enough sermonizing...

In my own outrage over the events of the past few weeks, I've found it rather difficult to form anything relatively coherent enough to post so I've been rather silent. One thing that that has struck me in particular is the emergence of "King Henry" Paulson, as Rep. Jim McDermott (D-WA) has cleverly named him. I readily admit that I've never liked Paulson since the first time I heard him speak, at a Congressional hearing I happened to catch on C-SPAN about a year or so ago. I believe it was a hearing before the House about Bush's budget proposal. Prior to that, I'd never really paid much attention to him--admittedly, I didn't pay much attention to politics in general prior to that. As I watched, I remember thinking that he seemed very "slippery" and was doing quite well at not answering anything he was asked; this has continued into every appearance I've seen him in since. I recently watched a video on YouTube of Paulson, which is from that same hearing (although I don't recall seeing it "live") that demonstrates this quite well. Paulson is also prone to stuttering when answering questions, which doesn't do much for his credibility, in my opinion. (As far as I know, Paulson doesn't have an actual medical "stuttering" problem, but I apologize if I'm mistaken.) I'm also just naturally distrustful of anyone who has served as a CEO for an investment bank, insurance company, etc. and receives a multi-million dollar salary for such a position, unless they are the founder/owner.

Apart from the fact that I have serious issues with the fairly established trend of appointing former CEO's and the like to the position of Secretary of the Treasury (I also feel like there's something not quite right about the appointment of all these cabinet positions where the people have absolutely no say, but I haven't really formed much of an argument about this particular issue yet), the recent bill that our Congress passed does indeed seem to give this un-elected official nearly unlimited, unchecked "king-like" powers. When I started to read the "bailout" bill, I was dismayed after the first few pages at how much everything in it revolved around the "Secretary." In fact, in the final passed version of the bill, in only Section 1 (the section that really lays out the TARP) the word "Secretary" (referring to the Secretary of the Treasury only; it appears in other contexts but I haven't counted those) 159 times. Let me say that again--159 TIMES!!! How is this in the least bit appropriate? This bill isn't about protecting taxpayers or helping out "Main Street" (if I hear one more politician prattle on about how they're concerned about "Main Street," I'm going to punch someone)...it's really about Secretary Paulson.

In some vague way, I'm sure most average people can understand that such an unprecedented "gift" of powers to one individual is probably not a good thing. Consider some of the language in the bill--"on such terms and conditions as are determined by the Secretary" and "the Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following." Under the "following" are a number of authorities given to the Secretary that are defined in a manner so vague as to essentially allow him to do anything he chooses. Anyone can recognize that this is simply begging to be abused.

What I find even scarier is the huge, glaring conflict of interest here--as former CEO of Goldman Sachs, I believe it's simply not possible for Paulson to NOT have a conflict of interest in regards to the position he's been put into. The first two "General Principles" listed in Part A of the "Standards of Ethical Conduct for Employees of the Executive Branch" are as follows:

(1) Public service is a public trust, requiring employees to place loyalty to the Constitution, the laws and ethical principles above private gain.
AND
(2) Employees shall not hold financial interests that conflict with the conscientious performance of duty.

There are many more, but I think Paulson "fails the test" so-to-speak on both of these counts; it's just not possible for him to put aside his previous work experience and connections at Goldman Sachs so they don't "conflict with the conscientious performance of duty." I'm far from an expert at such things but don't many CEOs, executives, etc. get a large part of their compensation not in salary but in things like plain old company stock and restricted stock units (RSUs)? While I'm sure that Paulson sold all his "stocks" of Goldman when he accepted the appointment as Secretary, if he did hold any RSUs (I'm not sure if he did/does) he may very well still have them if the conditions for their "pay-out" haven't yet been met. This definitely wouldn't jive with the ethics conditions listed above. Of course, I could be way off base on how this works (RSUs, etc.) and, if so, would welcome someone more versed to correct me.

What troubles me more is not the usual "Paulson wants to help his cronies," etc. but that it doesn't seem to bother anyone that either Paulson will continue on as Secretary of the Treasury into the next Presidency (it's not an automatic that he'll be out, as some seem to suggest) with the same unrestricted authorities OR he'll resign. If he does resign, does it seem likely that he'll simply go away and retire? I certainly don't think so...no, he'll be looking for a job and what sort of job is he likely to get? Well, another as CEO of a financial institution certainly seems like a good candidate. This surely is the basis for another grave conflict of interest, as Paulson is sure to be careful that he helps out those companies who he might be working for, and getting multi-million dollar salaries from, after he is no longer Secretary. There's no way he wouldn't be thinking about that on some level...he's not that stupid.

Now, I'm not saying that I think Paulson is evil or is even a bad guy but I think he should have known better than to get himself into this position. When there is so much potential for a conflict of interest, no matter how much you'd like to "pretend" that you've washed your hands of your previous committments, people simply don't work that way...the brain doesn't work that way. This is most dangerous, I feel, when it manifests itself in high-level, appointed positions such as Paulson's...and if Paulson didn't know better, there should have been someone there who did to stop him.

I feel that I've rambled quite a bit now and fear that I've written something terribly incoherent, so I'll stop now but I'll leave you with a photo that struck me quite a bit when I saw it yesterday...creepy.

Case for Wiki

As you may have noticed, I like to provide a lot of links in my posts. More often than not, I link to Wikipedia pages. The reason I like to use links is twofold. First, I want to provide references for my facts where applicable. Second, I like to provide you, the reader, with additional opportunities for education. Remember, one of our primary missions here is to educate. Once educated, you will be prepared to stop taking the soma!

But, why Wikipedia? And, what does that have to do anything in these crazy times?

The concept of the encyclopedia has been around for a long, long time. I was tempted to do more thorough research and tell you all about it. But, instead, you can read the Wikipedia link here. The basic evolution of the encyclopedia makes sense. Early works were compiled and edited by primarily one person. This led to a system of more contributors with a system of bureaucracy for the purposes of editing, quality control, etc. This became more and more advanced until the forerunners of today's Wikipedia came along. This evolution led to a system of authorship and editing from many authors with little or no bureaucratic oversight.

Encyclopedia Britannica is arguably the best in class from the more traditional standpoint. But, Wikipedia blows it away in terms of online use. In fact, my quick research using Alexa leads me to the conclusion that Wikipedia is used close to ten times more frequently than all other online encyclopedias combined. Wikipedia has had an average reach (percentage of online users who visit the site) of over 8.5% over the last three months. Britannica averages about 0.5% for reach. Microsoft's Encarta makes up approximately 1% of all visits to msn.com, which gives it (at best) an average reach of 0.2% by my estimates. Additionally, the average visitor to Wikipedia views 4.8 pages which is far more than the 1.3 pages per visit for Britannica.

However, there are still some people out there who like the traditional encyclopedia better. They don't trust Wikipedia because of its lack of oversight and regulation. The prefer the comfort of knowing that Britannica and other encyclopedias have expert contributors and a system of review and editing to ensure the articles are the best that they can be.

For me, I choose Wikipedia. Hundreds of thousands of people contribute to Wikipedia. It is self-policed, self-managed, and self-regulated. There is far more content available on Wikipedia than any other encyclopedia in terms of the number of articles, and the average article has a similar number of words as most other competitors. I have also found the articles to be more balanced and rich in references and links.

If you agree with me on these points, then I'd like you to consider the following... don't you wish your system of government and society were more like Wikipedia? Wikipedia is proof that the free market works. It is an example where the contributions of the many perform a better service than the authority of the few. There are a few bad apples to be sure. However, one bad apple at the top of the Britannica bureaucracy could bias and ruin the entire volume of work. The next time your told that the free market can't work or that the people need the government to step in and solve the problem, think about Wikipedia. Did I mention that you don't get paid to contribute to Wikipedia?

Of course, if you don't agree with me on my preference for Wikipedia, then we should argue some more!

A quagmire of green (greed?)

The doo-doo seems to have hit the fan, and it's splattering everywhere.

It's so hard to make sense of the chaos of current events without turning into a pundit. Nevertheless, it's also hard to turn a blind eye to the calamity in the U.S. economy right now; especially given the degree to which H.R. 1424 seems to have done for Paulson what the Iraq Resolution did for Bush (well, Cheney, probably). And we all know how well that went, don't we?

I'm generally a fan of government intervention when it's apparent that problems won't fix themselves; that's, after all, why we agree to pay taxes. However, I'm distraught at what appears to be the greatest deliberate pillage of average U.S. citizens in a very long time (if not ever).

In defense of fat cats, reckless debt habits on everyone's part (personal and industrial) have gotten us here, for certain. I'd also wager that equally reckless ignorance and apathy by common folks is another major factor. After all, if most people had been educated enough to look behind the curtain of fear, reactionism, and propaganda during the better part of the last decade, there would have been no mandate to approve our ridiculous excursion into Iraq – undoubtedly one of the stupidest maneuvers this country has ever performed, and no doubt something that will affect our economic and world standing for at least an entire generation.

By the way, I don't think that's hyperbole. These things cause ripples, and it's been frustrating to no end for the last seven years to bear witness to.

But chief on my list of concerns at the moment is how the trouble with the U.S. economy will now affect the global markets. It already is. Part of me says this is a good thing, and that it will weed out the thieves and scumbags from the equation and cause people to be much smarter and judicious investors.

Still, this will take time. A long time. And we're not out of the woods yet. Hold on to your bootstraps...if you've got any boots left.

Loose Ends... Vol. XI

Well, so much for the courage that our House of Representatives displayed on Monday. The "rescue plan" sailed through the Senate on Wednesday as an amendment to a bill which had already passed the House. It can back to the House, complete with extra pork, for debate and concurrence on Friday. It passed.

This week has made me think more and more about what I can or should do about this. I believe that our country is on a serious collision course for peril. I hope it is only economic peril, but I fear greater consequences. It is a long time in the making... and I plan on researching, analyzing and informing you as my discovery expands. In the meantime, I'll keep posting and keep reading. I'm not sure what else to do at this point.

Speaking of reading... this week I read The Law by Frédéric Bastiat. In a word it is brilliant. Bastiat lived in France in the first half of the nineteenth century. His political and economic philosophy serves as a fundamental backbone of libertarian ideals. It is a short read, and I recommend it highly to everyone (it is available online here).

Bastiat elegantly argues that everyone is entitled to life, liberty and property. Everyone is entitled to protect these from the plunder of others. I will spare you any more details because you should read it yourself!

This essay is of particular relevance this week as we see the government steal more money from taxpayers (no, this is not a patriotic act) to invest in risky financial derivatives in the hopes of "protecting Main Street"... how arrogant! The government got us into this mess and they will not get us out of this mess - it will get worse.

My next reading adventure (and this is a long one) is The Theory of Money and Credit by Ludwig von Mises. I feel I need to get more acquainted with economic theory, and I believe that my instincts align most closely with those of the Austrian School.

I leave you tonight with a quote from another work by Bastiat entitled Government:

"Government is the great fiction through which everybody endeavors to live at the expense of everybody else."

Who's throwing away their vote?

I have not yet posted here and probably won't often, but I'd like to get this out there.

I live in Chicago and pretty much all my social circles are filled with democrats who support Obama. Some are die hard supporters who have worked on campaigns others are less enthusiastic. When political discussions arise and I mention that I will not be voting for Obama, most people are initially appalled. When I tell them that I will also not be voting for McCain they are less appalled. Then comes the ubiquitous response that a vote against the two party system is a 'thrown away vote.' Most people express their mutual disgust with the political machine and that they, like me, wish it wasn't like that. Many people feel this is too important of an election to take a stand at this time. I'd like to ask the question "Do you think Obama has a chance of losing the state of Illinois in the upcoming election?" Here is an article discussing how Obama is winning big in polls in Illinois, which I'm sure everyone would find as no surprise. So I am suggesting that this IS the year for people who wish they could vote independent and not feel like they are going to 'throw away their vote' to do so. I would hope everyone would do this, but particularly people who live in states that are not considered to be swing states. Make a statement and vote for a third party. I would argue that voting for the two party system in a state that is considered a 'lock' is more likely 'throwing away your vote' than if you vote for a third party.

Tonight's Letter to Lugar

Senator Lugar,

I write to you alone tonight because I expected more from you. I must say I am deeply saddened and disappointed with your vote this evening. I empathize with your fears that we face economic hardship. I recognize that Congress feels it must act. It is painful to see the government abdicate its constitutional duties yet again in the name of the greater good. Our founding fathers were wise to place limits on government. As a nation, we have increasingly neglected the wisdom and prudence of great minds such as Jefferson, Madison, Franklin and Henry. I feel like I have now officially lost my liberty as the government will truly do anything they deem necessary. Once this sentiment is entrenched, as I had already feared it had, the only thing I can look forward to is a new government which respects all of its citizens - not just the ones it feels need special attention in a given moment. America is still strong. The people are still strong. We can endure hardship. Search your feelings... I hope you realize that you have made the impending economic failure that much worse tonight.

Respectfully,
Matt Wittlief