It’s for this reason that I have been very concerned about the state of American foreign-policy which seems to favor appeasement and a slavish devotion to some sort of international equilibrium, no matter how distasteful.

If the moderately maniacal rantings of Iran’s president were not sufficient proof that adequate force or at least the threat of force needs to be available, then the recent bellicose hijinks of North Korea’s brain addled dictator concerning the recent torpedo attack on a South Korean vessel should end the argument.

North Koreans have a long history of attention-getting behavior that borders on the adolescent, they also have just as long a history of extreme poverty which they have repeatedly attempted to alleviate not by improving their economy but by threatening the Western world with, at first war and now Thermo nuclear war if the rest of us don’t give them money or food or both. While this is the geopolitical equivalent of taking yourself hostage, so long as it continues to succeed and continues to meet softer and softer resistance from the West and the Obama administration, there doesn’t seem to be any reason for them to stop.

Most outside observers cannot help but conclude that Mr. Obama is quick to discipline and rebuke his constituents or as he apparently imagines them — subjects; he is much more circumspect with those he does not have power over with the stroke of a pen. While comparisons to Neville Chamberlain are in danger of becoming trite it seems fair to say that Mr. Obama has a rod for his people and a bowler hat and bumbershoot for the rest of the world. Bullies push until they’re pushed back which is something you would think the president would understand and if they’re not pushed back they will eventually beat you up anyway.

I know how to deal with bullies… puny bullies make me so mad… very very mad… HULK SMASH!

It’s one thing to indulge oneself to the absurdity of the noble savage and the sweet pastures untouched by the hand of post-Bronze Age man and quite another to use that fanciful thinking to twist scientific inquiry to turn the clock back on thehuman condition to a time that rational thinkers understand to never have existed. We simply have to insist that scientific inquiry be divorced from the desirability of its results vis-à-vis the political whims of the time, realizing that this can never be fully accomplished- one can at least drive to eliminate the taint of politics and social tinkering from discovering the inner workings of reality.

Do not do so is to trap humanity forever in clumsy political/social/religious zoo and stop the upward mobility of the human condition.. which is of course wrong… and make Hulk.. MAD…..HULK SMASH!

I was extremely pleased to be was asked to make a weekly contribution on the political and economic topics of the day and although I am often kept quite busy with various crime-fighting duties, as well as the occasional necessity to save the planet from marauding aliens or super villains, I feel that this is an important opportunity.

For my first topic I think I would like to address the bailout of the country of Greece by the European Union and ultimately the American taxpayer through lending by the Federal Reserve.

I find this a dangerous precedent in general and specifically when it comes from a country in such serious danger of hyperinflation from its own debt and absurd spending as our own. It seems that as citizens, we should demand someaccounting for not just the source of these funds (borrowed or printed?) but also a realistic projection of whether it is to be paid back; as it is my understanding this is a nonrecourse loan.

I suspect this action by our government is simply another symptom of a broader problem of our present administration’s fascination with statist solutions to easily understood economic problems. I believe this loan will ultimately end in being simply a gift to prop up a rapidly disintegrating socialist structure, in the form of the European Union, with its weakest member manifesting the symptoms first.

My feeling is that this should serve as a cautionary tale for our own policies not as an opportunity to worsen them. Ultimately this make Hulk mad!…. HULK SMASH!

The answer comes in first year business school. When we think about what we need in life to be happy, the most scientific model we have is Maslow’s Hierarchy of Needs. It tells us that people have, in order, physiological, safety, love, esteem and self-actualization needs that must be met to allow the next to address. The dumbed down version is you need food and water before you need a safe house to sleep in, and you need that before you need a mate or family, and you need that before you can really worry about mental image, and so on. This theory has been rammed down the throat of everyone who’s gone to school for business or psychology for the last 70 years, but it’s still irrefutably true. We all have very simple needs, and they need addressing before you can worry about anyone but yourself. So what shifted that lets people dwell on the least important issues, if not completely ignore the things that have the most impact on them?

I think the ticker was the start. And we’re all complacent in this. When I go to work (I work in a bar), I stare off into the television during sports games I have no interest in, and watch the scores other games I have no interest in. I do the same thing when watching business news (watching the values of stocks I don’t invest in). Now why is it that I don’t spend a fraction of that same time going all Descartes and thinking about the world around me in a meaningful way? Don’t get me wrong, I try, but I might spend half as much time thinking about how to really change health care as I do thinking about “Lost” or watching Nostalgia Chick again.

So then I get depressed thinking on this. Ratings for network news shows are sky high, but the viewers consistently show that they have no idea why pundit x is saying what they’re saying. The barrage of news flow leads to being reactionary as opposed to delegated in our response. We’re so well off that we feel free to sit back on our laurels and let someone else think for us. This is not a good sign for where people are headed as technology allows for even easier access to media, and as we become more Boolean in our thinking. A generation of “if/then” thinkers probably won’t have the attention span to balance a budget, unless it can be dropped into excel.

So how do you fix this? Really, it’s such a positive statement about the quality of life in America that is almost sounds silly to try and adjust it. But if we aren’t willing to think hard on the big problems, they’re going to get a whole hell of a lot worse, and complacency will just become another issue to fret about. So, if you’re reading this (and you aren’t my mother checking in to see what I’m all worked up about this week), you seem to have the free time, or possibly the headline news drive that I’m trying to address. When you’re done, turn off your computer, and go read something more then five pages long. Hell, this essay is less then two. If we ever hope to fix anything, knowing more about why it’s a problem seems like a good first step.

Levi Starbird is a retired punk rocker living under the guise of a college student in western Colorado. He is a chain smoking, often overdressed twenty-something of an ogre-ish persuasion. He is just as confused as you are as to how he got this job.

The Fed is to blame for every bubble and every bust. Manipulating interest rates feeds this cycle; keeping them artificially low for long periods of time floods the system with “cheap money,” which leads to over inflated asset bubbles, which invariably burst. Inflated government “fiscal stimulus” on top of this only adds fuel to the fire.  All of this in the interest of reducing or avoiding economic pain.

Well, I have news for you. Pain is good. It teaches us. It makes us stronger. Children who touch hot stoves only do it once. The pain tells them that “it isn’t good to touch hot stoves.” Now imagine if they never learned that lesson, the pain having been removed by the application of a topical anesthetic. That kid is going to burn his hand off and never know it.

This is the exact thing that is happening in front of our own eyes, except we are going one step further. We are actually rewarding the kid for touching the stove, and encouraging him to do it again!

There is no pain felt by AIG for a lack of due diligence in investigating the likelihood of default on mortgages backed by credit default swaps. They are paying their people $100 million in previously negotiated bonuses, thanks to the Government putting taxpayer money on the line to bail them out.

There is no pain felt by Banks who were allowed to write bad loans to mortgage brokers and then turnaround to unload significant portions of their bad assets onto the Federal Government, Fanny and Freddie.

There is no pain felt by the mortgage brokers who told poor Americans that they could afford houses they had no business buying in the first place. They got their commissions and ran.

And the above 3 examples only cover the mortgage bubble/bust that most recently threw the global economy into a tailspin. Nevermind the telecom bubble and bust of the late 1990’s and early 2000’s – also brought to you by the federal government in the form of low interest rates and the Telecommunications Act of 1996. Nevermind the S&L bubble and bust of the late 80’s – thank you Mr. Greenspan for your great policy of cheap money (read – sarcasm).

I suppose the point I am trying to make is that markets are efficient at “turning the faucet on and off.” Government is not. Why? Because it is easy to get greedy. If some fiscal stimulus is good to get us out of the rough patch, surely more is better (read – sarcasm)!

If markets set interest rates, not the Fed, then rates would automatically go up before too many people use the cheap money to inflate the market. Economic growth, if charted, would look like a steady climb up and to the right as technology, education, standard of living, and population factors all have net positive effects on economic output.

I dare anyone to look at a chart of the Dow Jones and tell me it looks like what I described above. Keep in mind both the time scale and the logarithmic scale of this chart. Vast fortunes were wiped out in these seemingly minuscule pull-backs.

http://stockcharts.com/charts/historical/djia1900.html

What is in store for us in the future is hard to say, but for the NOW we are certainly paying for the excesses of the past. The solution is not more fiscal stimulus gasoline on the fire, but less (and a balanced budget to boot). The solution is not rewarding “too big to fail” companies for poor decision making, but to let them fail. The solution is not to keep interest rates so low that we inflate another asset class to bubble proportions, but to get rid of the Fed and their “experts” that got us into this mess.

The solution is a little bit of pain.

He smiled as he chastised the American people for their anxieties and the Republicans for their opposition, even as he tried to claim Scott Brown’s victory for his own.  His calling out of the Supreme Court was unseemly and unpresidential, and representative of the entire speech.  His manner was careless to the point of callous, an attitude the American people are getting sick of.

The Bulls Run analogy was especially clever, and conveniently buried in the lead.  In case you missed it, it’s in paragraph three: “It’s tempting to look back on these moments and assume that our progress was inevitable – that America was always destined to succeed. But when the Union was turned back at Bull Run and the Allies first landed at Omaha Beach, victory was very much in doubt.” So the President moving forward with an agenda the republic doesn’t want is comparable to the Union under Lincoln and the Allies on D-Day.  Which makes his opponents what?  Confederate Nazis? Disgusting.

Aside from his usual cheerleaders at MSDNC and Time Magazine, the speech impressed no one.  It wasn’t even as lyrical or pseudo-uplifting as his other trope.  This was a bitter address by a man who is unused to personal and professional setbacks, a man who is lashing out in anger at the civil society that has rejected his agenda. 

Amongst all of the lies and obfuscation, President Obama has managed to keep one campaign promise, and for that I salute him.  He pledged to unite the red and blue states, until we were once again a United States, and as the good people of Massachusetts demonstrated, he has done exactly that.  United against his agenda, certainly, but united just the same.

I say bring on 2010.  Let this election be a clear choice between the progressive statist agenda and the enlightenment values of classic liberalism. Obama and his party will lose such an open contest handily.

I’m sorry, but as a conservative I’m just not used to this many political victories in a year, much less a week.  I think I need to lie down for a spell.

“Change.”  A plurality of American voters asked for it last Fall, and that is exactly what we are now all being forcibly fed by the Obama Administration.  While there is a significant amount of media coverage these days on the “Major Changes” Obama is enacting (Healthcare, Financial Regulation, the Afghan War), not much attention has been placed on the myriad of smaller topics on his fast-paced agenda that, when summed, have major implications to the daily lives of all Americans.

One such topic is using the FCC to intervene in the free market for Broadband Services in hopes that further regulation of this market will yield greater broadband coverage at more affordable prices.  Fundamentals and historical evidence (to be discussed below) prove that free market action, not government intervention, drives the growth and competition that raise service levels and lower prices for the consumer.  Government simply lacks the foresight and responsiveness required to react to the rapidly changing market for communication technology.

The FCC is contemplating 3 possible actions:  (1) Double the $7 billion dollar phone subsidy “Universal Service Fund.”  (2) Revive open access rules, applying the 1996 Telecommunications Act to Broadband.  (3) Broadening internet access through the easing of regulation of “white space” in unused analog TV frequencies.⁽²⁾

The first option would extend taxation to broadband internet service providers, who would then pass along that taxation to the current consumers of broadband.  The real driving force behind this tax increase is the fact that the tax base for the fund has been drying up ever since its inception in 1997, despite adding VoIP to the tax rolls in 2006⁽³⁾.  In addition to the recent cost reduction in telecommunication itself, the taxation of established technologies discourages further investment in them, in lieu of newer technologies not yet taxed by the government.  Since government is always 2 steps behind the free market, this fund will never generate the expected revenues, and hence will never achieve the mission of truly “universal service” to every American.

As this fund is a subsidy to rural areas, government has effectively unbalanced the already unbalanced telecom market.  In Iowa’s (712) area code, for example, the Incumbent Local Exchange Carriers (ILECs) can offer free international calling, while maintaining healthy profit margins due to the government subsidy⁽⁴⁾.  Empowering this fund with additional tax revenues will lead to further corruption.

Proponents for applying the open access rules of the Telecommunications Act of 1996 need to re-examine the effect this strategy had on the telecom market of the time.  Since the divestiture of the Bell System (the old AT&T) in 1982⁽⁵⁾, the market was comprised of Incumbent Local Exchange Carriers (ILECs)⁽⁶⁾ and a new group, the Competitive Local Exchange Carrier (CLEC)⁽⁷⁾.  CLECs were responsible for laying much of the fiber optic networks (brand new technology) at the time.  CLECs in the decade from 1985 to 1995 had developed much of the infrastructure they needed to be profitable in the free market.  When the Telecommunications Act of 1996⁽⁸⁾ was passed and open access was allowed, a host of CLECs sprang up without any infrastructure investment.  This was made possible through IPOs and private investment by equipment vendors.  As history proved, the number of CLECs in competition post 1996 was more than the market could handle, and the telecom bubble of the late 90’s was born.  This bubble led to the telecom bust of 2001-2, where the entire industry went through an enormous correction. 

The lesson learned here is not that the free market failed.  Instead, the government intervention to produce competition caused a disaster when the new entrants had little or no investment in infrastructure to lose.  The CLECs that had made investments in infrastructure largely survived the correction.  Those with none ceased to exist.  This open access strategy not only failed to create universal service, it set the entire industry back decades. 

A fundamental rule of economics is that where there is demand, there will be supply.  If it is unprofitable to bring broadband to certain areas with current technology, then it should not be forcibly accomplished via subsidies.  Instead, the free market will develop new solutions that are economically viable for both the provider and consumer.  And perhaps the free market has already done so in utilizing “white spaces.”

White Spaces⁽⁹⁾ refer to frequencies in the broadcast spectrum that are not utilized by local broadcasting stations.  Recently an incredible amount of open bandwidth has been created with the switch from analog to digital television broadcasting.  The White Spaces Coalition was formed to develop and deliver high speed broadband internet access in these white spaces beginning in 2009.  The group is comprised of Microsoft, Google, Dell, HP, Intel, Philips, EarthLink, and Samsung Electro-Mechanics.  Despite successful demonstrations of the technology and approval from the FCC, this initiative is currently mired in the court system by lawsuits filed by the National Association of Broadcasters (NAB) and the Association for Maximum Service Television, Inc. (MSTV).  White space broadband represents the free market ingenuity to apply new technology to an existing infrastructure with the goal of universal access.  Of the 3 contemplated by the current FCC, it is this option that stands the best chance to expand broadband access to all with fair market pricing for both investors of the infrastructure and consumers. 

This industry has been shaped by mergers, anti-trust suits, and ever-changing government regulation.  The only constant has been the advancement in newer technologies that challenge and overtake the old.  This force, developed through imagination and free market ingenuity, has driven broadband to more people than could possibly be achieved via government mandate or manipulation.  This issue is larger than expanding access, limiting consumer cost, and regulating provider profits.  The question is how to achieve all three simultaneously.  The answer to this question is the free market.

References 

(1)     Digital divide. (n.d.) Retrieved November 29, 2009 from Wikipedia:  http://en.wikipedia.org/wiki/Digital_Divide

(2)     Schatz, A.(2009, November 18). Feds Mull Rules, Fees to Spur Net Access. The Wall Street Journal.  Retrieved from: http://online.wsj.com/article/SB125850641299752981.html

(3)     Universal Service Fund (n.d.) Retrieved November 29, 2009 from Wikipedia:  http://en.wikipedia.org/wiki/Universal_Service_Fund

(4)     Saunders, A. (2006, October 11). What’s With the 712 Area Code? Saunderslog.com.  Retrieved from: http://saunderslog.com/2006/10/11/whats-with-the-712-area-code/

(5)     Bell System divestiture. (n.d.) Retrieved November 29, 2009 from Wikipedia:  http://en.wikipedia.org/wiki/Bell_System_divestiture

(6)     Incumbent local exchange carrier. (n.d.) Retrieved November 29, 2009 from Wikipedia: http://en.wikipedia.org/wiki/ILEC

(7)     Competitive local exchange carrier. (n.d.) Retrieved November 29, 2009 from Wikipedia:  http://en.wikipedia.org/wiki/Competitive_local_exchange_carrier

(8)     Telecommunications Act of 1996. (n.d.) Retrieved November 29, 2009 from Wikipedia:  http://en.wikipedia.org/wiki/Telecommunications_Act_of_1996

(9)     White spaces (radio). (n.d.) Retrieved November 29, 2009 from Wikipedia: http://en.wikipedia.org/wiki/White_Space_(coalition)

-Common Sense

For the last year we’ve heard no end of justification for health care reform on the left. Whether it’s life expectancy, cost, or quality of living, comparisons to other countries are flying as much as possible, and I’ve recently come to a conclusion; the Democrats who are trying to pass the current bill really seem to enjoy the fact that America is not on top. We don’t live the longest, we aren’t the happiest, we aren’t the best educated. If anything, the Democrats use this logic on everything form education to mass transit. That’s all well and good as far as research on a topic goes, but it seems to be missing a key issue; we aren’t France. We aren’t Iceland, or Denmark, or any of the other treasure troves of long and happy life in northern Europe. The reason this bothers me is again, not that I have some grudge against looking at different models for reform, but it’s that it deliberately leaves out fundamental parts of the equation. Why do people in Japan live longer? Well, they don’t have a fraction of the obesity or our crime rates.  You could use international data to defend almost any major talking point on the current left. For example, Jamaica has the worlds highest murder rate, and is only 88th in life expectancy. There’s an argument for gun legislation.
But even all that is skipping the root of the problem. The Democrats lost because of cherry picked data and a strong desire to make it someone else’s problem.  There may be a correlation between the genetic predisposition to heart disease in Sweden and the American tax code, which would have to be modified for any large changes to health care, but if it’s there, it’s not a one to one, simply stating that they live longer, hence they have a better system. To have meaningful reform, we need to look into the basics of what we’re trying to change. Is reform necessary for fiscal reasons, or do we believe that all Americans have a right to health care? On the other side, are Republicans opposing the bill purely because the Democrats wrote it? Do they have a better plan? If blocking any and all reform is the game plan of the current “party of no”, then it’s a good one, because it’s looking like there’s no real will on the left to fight hard enough to get it done. If the bill fails, it was the Republicans fault. If is succeeds and doesn’t do what it was supposed to, it was the centrist Democrats who insisted on abortion language changes.

The way I see it, for the Democrats to get back on track, the better place to look for comparisons on health care would be Massachusetts. Ushered in with the help of a Republican governor, it’s a health care platform that was passed and exists in America, pre-existing conditions and all. But past that, the Democrats are going to have to start fighting. The point of winning a majority is to use it. Well, in roughly 20 days, it’s gone. And not much got done. This is the second article in as many months where I’ve suggested the left start moving, start working like it’s always an election year, start caring about more then that great youtube clip of Al Franken getting some one liners on the senate floor. We just lost Massachusetts. I know Scott Brown propelled himself into celebrity by saying “it’s not Ted Kennedy’s seat, it’s the peoples seat”, but really. We just lost Ted Kennedys seat. Other then possibly Nancy Pelosi, can you name another Democrat who could have a seat as comfortable? Seriously. It’s time to get back to work. The issues at hand are massive, world changing and pressing. Skimming the top for talking points (which I will openly admit, I’m just as guilty of) needs to be a thing of the past. If we’re going to have working models of anything in the near future, our party, if not the movement as a whole, is going to have to hold ourselves to a higher level. The goal of virtually every issue discussed by the senate or house should be to make America better, not project us as second-class citizens and guilt trip opposition into change. Maybe a few of us have forgotten that.

Levi Starbird is a retired punk rocker living under the guise of a college student in western Colorado. He is a chain smoking, often overdressed twenty-something of an ogre-ish persuasion. He is just as confused as you are as to how he got this job.