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Thu Jan 22, 2015 at 06:31 AM PST

Socialize the Costs

by bondibox

This should be an obvious truth:

ANY change at all to the tax structure is "redistributing the wealth". You just have to decide which direction it is being redistributed. When many people chip in to cover the tax burden of the rich, they call that "sound economic theory"; when the rich are asked to shoulder a larger portion of the taxes they call that "Robin Hood" and "moochers" looking for "free stuff."

Why do recipients appear less deserving when they have less to start with? How can the people who see things this way be OK with increasing the disparity?

Socialize the costs. Both sides do it. When Obama proposed a free 2 year college plan, that's socializing the costs. When Republicans propose that the US government build an oil pipeline to be used by private business, that too is socializing the costs.

A few more examples of cost socialization by Democrats: Health Care, Education, Retirement, National Weather Service, Veterans services, Personal Bankruptcy.

Typical cost socialization by Republicans: Fossil Fuel extraction & exploration, Cleanup of Industrial aftermath, Banking Derivatives Failures, Corporate Bankruptcy.

There is a glaring difference between the two parties. Republican cost socialization goes to benefit a few, while Democratic cost socialization goes toward benefitting the many.

Discuss

Tue Oct 21, 2014 at 07:37 AM PDT

The Climate Change Hypocrisy Act

by bondibox

Not long ago I tweeted something that I consider an obvious truth:

You've probably heard of the "Son of Sam" law. Named after the infamous serial killer of the 1970's, it says that a criminal may not profit from their notoriety. For example, they may not write books about their crimes.

Now follow that thought: In general, we can all see the intrinsic wrongness of profiting from a mess that you've created.  But what about the tire store owner who goes on a tire-slashing rampage? The plate glass business owner who goes around shooting out windows? Or the arsonist who works for the fire department?  As far as I know, there are no additional laws for these felons beyond the initial crimes they've committed.  Nothing bars the tire store owner from selling tires for the cars which he vandalized.

Now what if the mess you've helped create is Global Warming, and your name is Koch Industries?  Have you ever stopped to wonder if Global Warming is thought of as a feature for these polluters? Fossil fuel's days may be numbered, but it will be replaced by a bigger, more urgent effort to reverse the damage. And the longer they continue to produce fossil fuels, the longer and more profitable becomes the clean up effort.

So logically my next thought was this:

Immediately after presenting this idea I met criticism that accused me of forcing pledges upon the fossil fuel producers.  But that's not the gist of the idea.  I'm upset because I can predict this train wreck a long, long way off. They are going to have it both ways.  They are actively denying Global Warming, not just so that they can continue to profit from fossil fuels, but also because they are creating job security for the time when they decide to do an about face.

It's the most despicable act of the modern era.

Our government has many regulations and restrictions that dictate which companies are allowed to obtain government contracts.  Anything from safety and ethics violations to doing trade with the wrong country can disqualify a company from government contracts. And of course the old conflict of interest is a big no-no.

So it seems to me that it is well within the powers of Congress to declare that any company who denies the problem of Climate Change today shall be prevented from obtaining government contracts which seek to alleviate the problem of Climate Change in the future.

Call it the Climate Change Hypocrisy Act.

And then we'll see just how quickly the dialogue changes.

*N.B. "Climate Change" and "Global Warming" have been used interchangeably in this diary. Please don't nit-pick.

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Recently there have been reports that a record amount of SNAP benefits were spent at military commissaries - $103.6 Million in FY 2013.

This is true, however it might lead some to misinterpret the data as reflecting the amount received by all military personnel.

There are 5,000 active military members receiving SNAP benefits, and 900,000 veterans on SNAP.  One might be inclined to add those numbers together, and then divide it into the dollar amount spent in order to calculate the average benefit per military member. But that math doesn't work.

In my bad-math example, 905,000 people spent $103.6 Million, for an average of $114 per year, per person, or a little less than $10 per month, per military member.  It should be noted that that person is the head of household, often with dependents relying on the same SNAP benefit.

The average SNAP benefit is closer to $125 per month, per person, so a family of four would receive 4x the average, or $500 a month.

The problem with this math is it only applies to what's been spent at military commissaries, and there are almost 20x 200x more veterans receiving SNAP than active members.  Not many military retirees live close enough to the base to shop at the commissary, so that $103.6 Million dollar number really only reflects the amount spent by active military members who live on base.

The take-away here is that $100 Million only scratches the surface of the amount that our service members receive in SNAP.

Discuss

Sat Jan 18, 2014 at 07:54 AM PST

Thoughts on H.R. 2084

by bondibox

Rep. John Delaney (D-Md) has introduced H.R. 2084: Partnership to Build America Act of 2013 to fund infrastructure improvements.  The house version of this bill has wide bipartisan support, and the Senate version was just introduced by Michael Bennet of Colorado and Republican Roy Blunt of Missouri.

In lauding the bill, the Frederick News-Post actually called attention to my concerns.

“U.S. Rep. John Delaney deserves major credit for two things: for proposing financial legislation that has bipartisan support, and for crafting a bill that would help pay for a fast-deteriorating national transportation infrastructure without increasing the nation’s debt or raising taxes.”
The substance of the bill deals with the financial aspects of paying for the improvements, but offers a paucity of information as to what improvements are to be done.  Rep Delaney is soliciting opinions about what should be done, but they are all broad-brush suggestions that everyone ought to agree with.  I wanted to tell him that my infrastructure priority is a high voltage DC energy grid but he doesn't seem interested in specifics.

Slightly troubling is the nature of the financing. This bill would establish the American Infrastructure Fund, or AIF, which would

provide bond guarantees and make loans to States, local governments, and non-profit infrastructure providers for investments in certain infrastructure projects, and to provide equity investments in such projects, and for other purposes
The reason why Republicans are on board is because the bond offering provides private funding for the infrastructure projects. It seems that it's designed to front load the money that states and municipalities would have otherwise had pay over the next 50 years for these projects, and let them slowly pay that money back from their tax revenues. It's also assumed that inflation will outpace the 1% bond yield and save the borrowers money over that 50 year timespan.

It says the AIF will make loans to non-profit infrastructure projects, and for other purposes.  That last bit of wiggle room smacks of privatization to me, especially given the fact that it creates an AIF board of directors who are then compensated.

Though it doesn't say so, the borrowers must not be getting those loans at zero percent, because the compensation to the board of directors must come from somewhere.

And so here we have the classic private vs. public dilemma. Instead of "burdening" existing government employees with the oversight of these projects (i.e. Departments of education, transportation, public works, etc.), it creates a new entity, with 11 new people to be compensated.

I can't say at this point whether H.R. 2084 and the AIF is a good idea or a bad idea, other than it revisits the well-trodden argument as to whether privatization can do things cheaper and more efficiently than the government can. But most troubling to me is the focus on the money first, with no plan for how it is to be spent. To me, that's a recipe for corruption.  What I do know is that during his freshman term, Rep. Delaney has not been on the side of progressives, notably voting "yea" on H.R. 2374, The Retail Investor Protection Act.  He is the 6th wealthiest member of congress, whose background is in taking two companies public. I'm reluctant to slam this bill out of the gate, but Rep. Delaney appears to be more of a friend to the banks than he is to us.

Discuss

Wed Dec 18, 2013 at 08:29 AM PST

Hello Orange Juice!!

by bondibox

On Saturday, November 30, I finally got the call I've been waiting for.

I was at the top of the list for a kidney transplant. It was a perfect match, and CMV negative. The donor was a little bit older than me, and died of a stroke. I myself was not in perfect health that day, as I had thrown up that morning. Weighing all the pros and cons, I said "hell, yes!"

Well the transplant surgery was more or less a success: The new kidney is doing a little bit of everything that it should, but not a whole lot. The doctors say it has to "wake up" still (the recipient of the other kidney had a full recovery around day 10).

The doctors and staff at Washington Hospital Center are really top notch, although the building and equipment are aging. On the day I received my new organ, they did 5 kidney transplants. I spent nearly 2 weeks in a private room which was just 10 feet from the nurses' station. It was nice getting such high priority, but the constant intrusions, beeping and alarms were really starting to take their toll - sensory overload. I wasn't getting any rest, and the food started to really disagree with me.  After a while, being in the hospital was more of a hinderance than a help.

It did not go without complications. On day 3 I had a lot of internal bleeding and bruising from a hematoma on the new organ which required a second surgery and general anesthesia. They tell me that post-op my heart stopped and my lungs started to fill with fluid and I had to be re-intubated, spent 24 hours in ICU after that.  

One of the things they do to try to wake up the new kidney is keep my blood pressure higher than normal, between 140 and 160 on the systolic, to force more blood through the new organ. They also wanted to keep me "wet," which meant an extra 15 LITERS of fluid. Even though the kidney wasn't doing all it should, they were very reluctant to give me dialysis, for fear that my BP would drop and the kidney would go back to sleep, permanently.

It wasn't until day 12 that my B.U.N. levels started to come down which was the last benchmark they were looking for, so I was discharged Friday evening with the onset of some severe edema (swelling).  Well it was only a matter of hours before I became short of breath, and my progress started to reverse. At 4:00 a.m. Sunday morning I got up to use the bathroom but couldn't catch my breath. Panting and wheezing I called 911 and took an ambulance to Suburban Hospital in Bethesda where I was treated for pneumonia due to "volume overload."  They gave me dialysis 3 times in 3 days, taking off a total of 10 Kg (10 liters), and that was no picnic.

I'm back home and I think I'm at a happy medium right now.  I've still got swollen piggy feet but my stomach isn't distended anymore (it was so bad I had to cut the elastic waistband on my PJ's).  My metabolism and appetite have returned, and while my kidney output is down a little, the quality seems to be really good.  For the past 4 years I've been forbidden from drinking orange juice or eating foods high in potassium, and now I'm actually potassium deficient, so I'm enjoying a long-awaited glass of OJ and counting my blessings.

Discuss

What do trickle down economics, offshoring jobs, union busting, ending the minimum wage, raising the social security retirement age, opposition to Obamacare, cutting Pell grants and raising the interest rates on student loans and destruction of the public education system all have in common?

They are all Republican proposals and goals.  And they all put downward pressure on wages.

Most people think that offshoring jobs increases a company's bottom line by lowering its cost of production. But there's a side effect which is just as desirable in the eyes of the plutocrats: It increases domestic unemployment. In the supply and demand world of human labor, more unemployed people vying for fewer jobs is great if you're the one paying wages.

When a multi-billion dollar retailer transitions from "Made in America" to cheap Chinese crap what they have done is put thousands of American workers out of a job. Oftentimes a union job that paid well. Those same workers are then available desperate to work for the retailer as cashiers, warehouse workers and restockers. They aren't just making less than they were at their old job, they might be making less than people used to earn at their current job.  

When insanely profitable corporations and the wealthy get tax breaks, it transfers the burden of paying taxes onto the middle class. This is what I call Corporate Socialism, where the costs of production are shared by the general population. Republicans frame "supply side" a.k.a. "trickle down" economic policy as purely beneficial, that higher corporate profits will result in more employees, and that lowering the taxes of billionaires will result in more aggressive and riskier investment and that will also translate into more jobs.  It's utter poppycock.  A billionaire will always seek to increase his wealth with the best investments he can find, regardless of whether he's paying 45%, 33%, 20%, 13% or zero taxes.

Trickle down is the myth that spawns the rest of Republican folklore - what's good for the 1% is good for the rest of us - but the economy is a closed system. If you increase one person's slice of the pie, you're decreasing someone else's. You can't just "make the pie higher."

Raising the Social Security retirement age would increase the number of people looking for work. Ironically, one proposed solution to high unemployment is to lower the retirement age, which would skim a few percent of the workforce and create openings for younger, would-be workers.

Opposing Obamacare doesn't actually put downward pressure on wages, but it does keep workers locked into their jobs. Crap insurance is better than no insurance at all.  One strategy that corporate America has getting away with is to slowly scale back benefits and delay salary increases. This is only possible in an atmosphere where job mobility is low and people are reluctant to change employers.  But Obamacare unlocks one of the shackles holding people back from finding another job or starting their own business.

Dumbing down the public school system and making it harder for students to get a secondary education also puts downward pressure on wages, as workers don't possess the skills necessary to rise up through the ranks or land a better job. Even though factories are being eliminated, there seems to be a push to groom the next generation of workers for vocational jobs.  There is a glut at the bottom of the workforce with less chance that the children of manual laborers will be able to go to college. Higher education is becoming something exclusively available to the wealthy.

I started working in the mid-80's and I made minimum wage bagging groceries at $3.13 per hour.  Since then, the cost of a dozen eggs has tripled; the cost of a gallon of gas has quadrupled. But the minimum wage? It's barely doubled, and up until 2007 it had only risen 65%. Plutocrats advocate for the elimination of the minimum wage based on the specious argument that a worker will earn what he or she is worth. There is a grain of truth to this, but unemployment throws a spanner in the works by forcing people to take jobs they are overqualified for.  When there is too much competition for scare jobs which puts downward pressure on wages, the minimum wage is a stop-gap that prevents us from falling into slave labor.

The GOP has been very successful at marketing themselves as the patriotic party, and by extension, the party who cares the most about America.  But the shine has come off that penny.  Recently there was a poll which showed a vast majority of Americans don't believe the Republican party is looking out for the public interest. Their policies have trumped the rhetoric and people are waking up to the fact that everything the GOP does is geared to screw the little people and benefit the plutocrats.

Discuss

Here's an idea that ought to catch on.

In 2008 a man named Dmitry Alexeev (not his real surname) received a credit card solicitation in the mail, just like the ones probably clogging your mailbox right now. Enclosed in the solicitation was an agreement contract / application which he signed and returned. Shortly thereafter he received a credit card, along with a copy of the agreement, certified by the bank and signed by one of its officers.

But Dmitry had changed the small print of the agreement before signing it.

He opted in for a 0% APR and no fees, and added that the customer "is not obliged to pay any fees and charges imposed by bank tariffs." He also changed the URL of the site where the terms and conditions were published from www.tcsbank.ru to tcsbank.at.ua. Additionally, he added a special clause that would protect him should the bank break the agreement in a unilateral manner. For each unilateral change in the terms provided in the agreement, the bank would be asked to pay the customer (Alexeev) 3 million rubles (about $91,000), or a cancellation fee of 6 million rubles ($182,000).
After a couple of years the bank cancelled his account with a remaining balance of $575 plus an additional $788 in fees.  The bank sued, and lost when the court decided that the agreement signed by both parties was valid. Dmitry was only responsible for the outstanding balance.

But Dmitry took his victory as an indication that the entire contract was valid, maintaining that the bank had broken 8 of the contract's clauses, for a total penalty of 24 million rubles ($727,000).

The next court date is in September.

Discuss

* This article should not be construed as offering financial or trading advice. It is an opinion piece which uses real time data to illustrate a philosophy.

Over the years I have developed a respect for technical analysis (charts) and a great disdain for the talking heads on TV.

There are two main schools when it comes to analyzing the stock market. First, there's fundamental analysis where a stock's price is calculated based on Earnings Per Share and other factors.  This is a very consistent and accurate method when it comes to determining a ballpark value for individual stocks.  Technical analysis is a method of predicting a stock's movements based on the chart of its past performance.  

As a rule of thumb, fundamental analysis drives technical analysis. Over the course of decades, the market can reliably be expected to yield approximately 5% annual growth, as justified by the fundamentals.  You could almost look at a chart and predict that the market will continue this growth into the next decade and beyond.

But many people confuse the multi-year picture with the daily one, and treat the market as a whole like they would an individual stock. The problem here is that the market is not rational - it doesn't always go up on "good" news or down on "bad" news (I used scare quotes to show that good and bad are a matter of opinion). You can not always justify its price with fundamental analysis.  

It was just a matter of time before this current market receded from the newly minted highs (DOW 15,500). The technical pressures are enormous. Now that it's happening, the pundits are all scrambling to explain it with recent news.  But the news doesn't matter.

The conventional wisdom says that news events move the market. Funny, though, when the news breaks, the pundits cover themselves by saying "there's no way to know how the market will react to this."  No, they wait to see how things will shake out, and then they boldly try to explain it all.  The market does what the market is going to do, and as much as the pundits like to apply hindsight to their explanations, they are merely retrofitting the narrative onto the facts.  In my opinion, it's all bullshit.

The intense navel gazing among pundits reminds me of the fallacy, ‪Post Hoc, Ergo Propter Hoc‬ (after this, therefore because of this).  

[There's more below the divider-doodle]

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I finally received a reply from my congressman regarding marijuana's status as a schedule 1 drug.

It didn't take long for my two senators to draft their replies.  Mikulski's position was clear - she is not in favor of across the board legalization, but says that doctors should not be prevented from using marijuana as an effective treatment for some diseases.

Senator Cardin was less than helpful.  Responding to my concerns that marijuana was a schedule 1 drug, he informed me that marijuana is a schedule 1 drug.  Spoken like someone who had just been reelected to a 6 year term.

But the biggest surprise was when Rep. John Delaney finally got around to his response. It was a new one to me:

At the same time, however, while federal, state, and local laws pertaining to marijuana do lead to criminal justice costs, there is also a risk that decriminalization or legalization might further exacerbate these costs.
Because there were 2.7 million alcohol related arrests in 2008, compared to 3/4 of a million arrests for marijuana possession, they say marijuana legalization would undoubtedly increase the crime rate.  Taken to the level of hyperbole, It's the same mindset that claims legalization would increase the demand on the black market.

My congressman seems to believe that marijuana legalization would result in a widespread societal breakdown into lawlessness. I can only imagine the scenarios he's concocted in his head, much like the hysterical (definition: irrational from fear or emotion) TV commercials where a carload of stoners run over a kid at a fast food drive-through.

Really, John? REALLY?  Legalization might exacerbate the costs to society?  There are approximately 40,000 prisoners incarcerated on marijuana related charges, at an average annual cost of $25,000 to $50,000 depending on the state.  That's $1 billion to $2 billion a year.

If you add up the economic benefits of a boom industry, and the criminal justice costs which also include money spent on lawyers and time lost from work, the total economic benefit of marijuana legalization has been estimated to be $43 billion annually.

But the naysayers, like the President, point to alcohol and tobacco as costing more to society than the revenue they generate.  I think that's the definition of a red herring.  No one has ever died from marijuana overdose or from chronic use. Marijuana is not addictive, and it is not a carcinogen - in fact it has been shown to be an effective treatment for cancer. The comparisons to alcohol and tobacco aren't just erroneous, they are spurious.

Discuss

Last month The U.S. Court of Appeals for the District of Columbia Circuit ruled against plaintiffs seeking a rescheduling of marijuana on the list of controlled substances.

The suit has been building since 2002, when The Coalition for Researching Cannabis filed a petition with the DEA to reschedule the drug.  The petition was denied by the DEA in 2011. In denying the petition, the DEA reaffirmed that marijuana met the criteria for Schedule I.  Those criteria are:

• a high potential for abuse;
• no currently accepted medical use in treatment;
• a lack of accepted safety for the use of the drug.

In its 2011 denial of petitioners’ rescheduling request, DEA Administrator Michele Leonhart alleged that cannabis possesses all three criteria, claiming: “[T]here are no adequate and well-controlled studies proving (marijuana’s) efficacy; the drug is not accepted by qualified experts. … At this time, the known risks of marijuana use have not been shown to be outweighed by specific benefits in well-controlled clinical trials that scientifically evaluate safety and efficacy.”
The appeals court ruled that the plaintiffs had not proved the DEA's classification of marijuana as a schedule I drug was "arbitrary and capricious."

In 1991, the DEA developed a 5 prong test for determining whether a drug has a valid medical use.

They have to have “a known and reproducible drug chemistry, adequate safety studies, adequate and well-controlled studies demonstrating efficacy, acceptance of the drug by qualified experts, and widely available scientific evidence.”
Since marijuana contains more than 480 known compounds, it does not have a "known and reproducible drug chemistry."  

Kris Hermes, speaking on behalf of one of the plaintiffs, Americans for Safe Access, described this threshold as “applying a standard that’s impossible to meet.”

There are, however, marijuana derivative drugs and patents.  Marinol is a synthetic THC sold by Abbott Pharmaceuticals. Sativex, a cannabis extract, is in clinical trials.  And the United States Department of Health and Human Services was awarded US Patent #6630507, for the use of cannabinoids as antioxidants and neuroprotectants.  

This is more than a simple catch-22.  It is a double-loop of endless contradiction. Our government appears willing to allow the individual components of marijuana to be extracted and sold as medicine, but it denies that marijuana itself could be medicine.

The next step for the plaintiffs is to get the case heard by the full DC Circuit.

Discuss

Tue Jan 01, 2013 at 11:24 AM PST

The Paradox of Marijuana

by bondibox

The following diary is a personal reflection on my experience with Marijuana. Your mileage may vary.

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When most of us think of an "assault rifle" we think of the fully automatic Tommy guns used by Al Capone's henchmen during prohibition.  Did you know those guns have been restricted since FDR?

There seems to be a lot of intentional ambiguity about the difference between fully-automatic and semi-automatic assault weapons.  Bill Clinton's assault weapons ban only applied to the latter group, and that's because there is already a ban on the sale of new fully automatic assault weapons to citizens.

Yes, they still make fully automatic weapons, for sale to law enforcement. And yes, a gun collector can still procure a used fully automatic weapon - with restrictions.  You need a special ATF license which requires a background check, and then you have to pay a $200 ATF tax, and you must also designate a licensed gun dealer who will take possession of the weapon in the event of your death.  And since you, as a citizen, may not purchase a new machine gun, the price of used weapons is 10 - 20 times more than the retail cost.  

In 1995 there were over 240,000 machine guns registered with the ATF.
Approximately half of those are owned by law enforcement, and the other half are owned by private citizens.

In the United States, there are 1,000 times more regular guns than there are machine guns. But legally registered machine guns only account for a miniscule number of deaths.

Since 1934, there appear to have been at least two homicides committed with legally owned automatic weapons.
Yes, you read that right. In the last 80 years, legally registered machine guns have accounted for TWO deaths.  Illegal, or non-registered machine guns account for a fair number of killings - in 1980, 1% of Miami homicides were committed with machine guns. It's nearly impossible to start drawing statistical comparisons when talking about illegal gun ownership, since there are no records of these guns and they are owned exclusively by criminals (they are illegal guns, after all).

But one thing is clear - the restrictions placed on machine guns has absolutely worked to decrease the number of deaths caused by these guns.

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