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	<title>The Allegator &#187; Big Brother</title>
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	<link>http://www.theallegator.com</link>
	<description>&#34;I do not deny the allegation, I deny the allegator.&#34; – Jesse Jackson</description>
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		<title>Last Place Aversion</title>
		<link>http://www.theallegator.com/big-brother/place-aversion/</link>
		<comments>http://www.theallegator.com/big-brother/place-aversion/#comments</comments>
		<pubDate>Tue, 06 Sep 2011 00:11:16 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<category><![CDATA[Politics]]></category>
		<category><![CDATA[Affirmative Action]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=604</guid>
		<description><![CDATA[The poor often vote against their own interests. The conventional wisdom on this has been that they one day aspire to be rich, and they are empathizing with their future selves&#8217; wish to have low taxes more than their present situation. A new study by the national bureau of economic research shows evidence of a much [...]]]></description>
			<content:encoded><![CDATA[<p>The poor often vote against their own interests. The conventional wisdom on this has been that they one day aspire to be rich, and they are empathizing with their future selves&#8217; wish to have low taxes more than their present situation.</p>
<p>A new study by the national bureau of economic research shows evidence of a much more plausible explanation. Participants were given various sums of money, and an income distribution chart that showed where they stood in relation to the field of other participants. They were then given the choice between giving their money to those below them in the income distribution, or to those above them. Which did they choose?</p>
<p>It varied, but for those who were right above the bottom, they tended to give the money to people above them on the chart. Had they given the moeny to the person below them, then they would have ceded their position and fallen to the bottom themselves.</p>
<p>This theory of <a target="_blank" href="http://www.nber.org/papers/w17234">last place aversion</a> will make sense to you if you&#8217;ve worked a low income job in the years when minimum wage increases have been mandated. Let&#8217;s say minimum wage was five dollars an hour. You toiled away at the company for a year and got a fifty cent raise. Now along comes a dollar increase in the minimum wage. After a year of training and experience, you find yourself making the same wage as those who are newly hired. Sure, the company could just raise everyone by a dollar, but that&#8217;s a huge expense, and if you&#8217;ve been there, you know it doesn&#8217;t tend to happen, and that there is plenty of grumbling in the ranks, even when they got a bit of a raise themselves.</p>
<p>Why can&#8217;t we just be happy for those who got a wage boost? Why must we look to everyone else to determine our own self worth? If you give one of your pets a bigger treat than the other, you will see that we don&#8217;t have a monopoly on the concept of fairness. It&#8217;s a survival skill. It drives us to stay ahead of the pack, even if it means keeping the rest of the pack down.</p>
<p>Those who complain one day that the rich are too rich, may the next day complain that the person below them got a bigger raise than them. Handouts to specific groups who are seen as lower on the social totem pole can cause enough resentment to more than cancel out their benefits. Fairness is not a universal construct. Where you stand depends on where you sit.</p>
<pre><span style="color: #800080;"><em>"When I give food to the poor they call me a saint. </em></span></pre>
<pre><span style="color: #800080;"><em>When I ask why the poor have no food they call me a communist." Camara, Helder</em></span></pre>
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		<title>Why Has Going to College Gotten so Expensive?</title>
		<link>http://www.theallegator.com/free-market/college-expensive/</link>
		<comments>http://www.theallegator.com/free-market/college-expensive/#comments</comments>
		<pubDate>Mon, 05 Sep 2011 22:57:47 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<category><![CDATA[Economy]]></category>
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		<category><![CDATA[Education]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=601</guid>
		<description><![CDATA[If you went to college before the turn of the millennium and you are now trying to convince your kids to go to college, it may be worth more careful deliberation. There was a time when college was the path to a wealthy future. Back then it was one of the only ways to get [...]]]></description>
			<content:encoded><![CDATA[<p>If you went to college before the turn of the millennium and you are now trying to convince your kids to go to college, it may be worth more careful deliberation. There was a time when college was the path to a wealthy future. Back then it was one of the only ways to get a decent education.</p>
<p>With the advent of the internet, knowledge in many fields is at your fingertips. Unless you want to be a doctor or something similarly carefully regulated, chances are you can learn most of what you need online and at your own pace, and nearly free.</p>
<p>Contrast that with the current college system. Colleges are putting professors on furlough and reducing the amount of education they produce each semester. Meanwhile tuition is going up far faster than the rate of inflation. <a target="_blank" href="http://www.theatlantic.com/business/archive/2011/08/chart-of-the-day-student-loans-have-grown-511-since-1999/243821/" target="_blank">College loans have increased over 500% since 1999</a>.</p>
<p>Why? What is it in the system that is justifying tuition going up while quality of education is dropping? In this case I believe it is actually a self-defeating government subsidy. Credit is tight right now. If you want a loan for most things, you have to first prove that you don&#8217;t need it. This credit crunch has hit every sector but education, in which government loans are still easily available and low interest. Combine this with the lack of work, and people are going back to school and living off loans. The natural result of this is that colleges raise tuition, since the students can afford it.</p>
<p>Looking back a decade,<a href="http://www.theallegator.com/law/booms-busts-government-stimulated-demand/" target="_blank"> government-sponsored enterprises gave out adjustable rate mortgages to the poor</a>, and once they had them on the hook, raised the rates. What they didn&#8217;t take into account is what would happen when they took it too far and people just defaulted and walked away. This time around, they are ensuring that it doesn&#8217;t happen again. Federal student loans follow you till you die. Bankruptcy doesn&#8217;t help. What will happen when all of this debt comes due? Will people spend the rest of their lives trying to get above water? Will the government forgive the debt on the backs of the taxpayer? Will the next credit bubble use your children as collateral? When will they stop trying to hide the debt and start working to correct it?</p>
<p>What still doesn&#8217;t make sense is the furloughs. If tuition is up, and <a target="_blank" href="http://nces.ed.gov/fastfacts/display.asp?id=98" target="_blank">full time attendance is up</a>, and <a target="_blank" href="http://www.universityofcalifornia.edu/accountability/2009/index/7.7" target="_blank">professor salaries aren&#8217;t skyrocketing</a>, then why the furloughs? It&#8217;s because we are becoming a nation of administrators. Less than a third of your tuition goes into educating you, and the<a target="_blank" href="http://www.aei.org/outlook/100924" target="_blank"> percentage of funds going to college  administrative costs</a> is going up at a truly unreasonable rate. I&#8217;m not even saying anyone is getting fat here, just that as a society, we are spending far more on administrating producers than we are on actually producing anything.</p>
<p>What we need now is some transparency. Unfortunately, creating the Office of  Administrative Overview Regulation or some such won&#8217;t help. What we need is simple disclosure. Let the resulting outrage do the rest.</p>
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		<title>For Everyone Else, There&#8217;s WikiLeaks</title>
		<link>http://www.theallegator.com/law/wikileaks/</link>
		<comments>http://www.theallegator.com/law/wikileaks/#comments</comments>
		<pubDate>Sun, 03 Jul 2011 20:11:20 +0000</pubDate>
		<dc:creator>admin</dc:creator>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=562</guid>
		<description><![CDATA[I haven&#8217;t spoken much about WikiLeaks, but I&#8217;m glad that such organizations exist to shine some sunlight on the back-room dealing of those in power. It&#8217;s a sad day when the truth is a crime. Our secrets are a weakness, not our power. Who can be blackmailed, if they have no secrets? Who embezzles money in the [...]]]></description>
			<content:encoded><![CDATA[<p><object style="height: 390px; width: 550px;" width="550" height="390"><param name="movie" value="http://www.youtube.com/v/jzMN2c24Y1s?version=3" /><param name="allowFullScreen" value="true" /><param name="allowScriptAccess" value="always" /><embed type="application/x-shockwave-flash" width="550" height="390" src="http://www.youtube.com/v/jzMN2c24Y1s?version=3" allowscriptaccess="always" allowfullscreen="true"></embed></object></p>
<p>I haven&#8217;t spoken much about WikiLeaks, but I&#8217;m glad that such organizations exist to shine some sunlight on the back-room dealing of those in power. It&#8217;s a sad day when the truth is a crime.</p>
<p>Our secrets are a weakness, not our power. Who can be blackmailed, if they have no secrets? Who embezzles money in the light of day? If torture is humane and effective, then why don&#8217;t we do it publicly? What investor invests in a market they know is overvalued?</p>
<p>If the state of our Union is strong, don&#8217;t tell us it is strong, show us it is strong. Open the books. Knowing that the data they see is the truth will brink confidence in our Dollar and our nation, not chase it away. Besides, if you don&#8217;t open the books, Assange will do it for you.</p>
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		<title>California Affiliate Tax</title>
		<link>http://www.theallegator.com/law/california-amazon-tax/</link>
		<comments>http://www.theallegator.com/law/california-amazon-tax/#comments</comments>
		<pubDate>Thu, 30 Jun 2011 04:57:32 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=553</guid>
		<description><![CDATA[California&#8217;s latest budget deal continues their now-familiar trend of chasing small business out of the state. In a desperate and unconstitutional powergrab, they are saying that any business that is even affiliated with anyone in California has to pay sales tax on everything sent to customers in the state. I&#8217;m most often complaining about Congress overstepping their [...]]]></description>
			<content:encoded><![CDATA[<p style="text-align: center;"><img class="aligncenter size-full wp-image-560" title="The state's idea of a helping hand" src="http://www.theallegator.com/wp-content/uploads/2011/06/The-states-idea-of-a-helping-hand.jpg" alt="The helping hand of the law." width="550" height="586" /></p>
<p>California&#8217;s latest budget deal continues their now-familiar trend of chasing small business out of the state. In a desperate and unconstitutional powergrab, they are saying that any business that is even affiliated with anyone in California has to pay sales tax on everything sent to customers in the state.</p>
<p>I&#8217;m most often complaining about Congress overstepping their bounds in controlling the states, but this is a rare case (Like Arizona&#8217;s recent immigration laws) where the opposite is true. Interstate commerce is squarely under the jurisdiction of Congress. Let&#8217;s say that a product is manufactured in Texas, sent to Colorado to an Amazon distributor, and then shipped to a customer in California; what&#8217;s to stop Texas from saying they can charge sales tax on the item because they made it? Or Colorado to charge it because they are where the sale was shipped from, or every state in between because it passed on through? The Federal government is there primarily for two purposes, foreign policy, and making sure states don&#8217;t enact anti-competitive laws that interfere with the commerce between the states, thus, states were only allowed to regulate transactions from those companies which they have jurisdiction over because of a physical presence in the state.</p>
<p>California is now claiming that I, along with ten thousand others are &#8216;sister companies&#8217; of Amazon, because we are paid to advertise for them. I&#8217;m nobody&#8217;s &#8216;sister company&#8217;. I have no Obligations to Amazon, they don&#8217;t tell me what to do, we don&#8217;t have any claim over each other&#8217;s assets, I just post a link to Amazon on my page, and Amazon reimburses me for doing so when paying customers arrive there through my sites. I&#8217;m no more connected with Amazon than television networks who advertise for them, UPS who carries their products, or Visa, who handles their transactions.</p>
<p>Living in an extremely liberal town, I hear a lot of people cheering this bill as somehow sticking it to the evil corporations and finally making them pay their fair share, but that isn&#8217;t what is going to happen out of this. Amazon has already announced that they will end their business dealings with everyone in California, which means not only are ten thousand more Californians now very suddenly out of work, but California won&#8217;t see a cent of it, since the companies won&#8217;t actually be taxed after cutting ties, and California will be out the revenue from those people and quite possibly paying to add them to its welfare rolls. Also, it isn&#8217;t legally Amazon&#8217;s responsibility to pay sales tax on your purchases, it&#8217;s yours, so if you aren&#8217;t paying taxes on your online purchases, then point the finger at yourself first.</p>
<p>I wish I&#8217;d seen that this ship was sinking before I bought a home here. If it were any easier to leave, I would.</p>
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		<title>Keynesian Fail</title>
		<link>http://www.theallegator.com/free-market/keynesian-fail/</link>
		<comments>http://www.theallegator.com/free-market/keynesian-fail/#comments</comments>
		<pubDate>Sat, 30 Oct 2010 21:07:21 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=517</guid>
		<description><![CDATA[This was our Nobel for Economics winner of 2008. More proof that our economic situation wan&#8217;t an accident, wasn&#8217;t the result of insufficient regulation, but was engineered by those very regulators. &#8220;To fight the recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do [...]]]></description>
			<content:encoded><![CDATA[<p><img class="aligncenter size-full wp-image-518" title="keynesians-fail" src="http://www.theallegator.com/wp-content/uploads/2010/10/keynesians-fail.png" alt="Keynesian Fail Demotivational Poster" width="550" height="421" /></p>
<p>This was our Nobel for Economics winner of 2008. More proof that our economic situation wan&#8217;t an accident, wasn&#8217;t the result of insufficient regulation, but <a title="Economic crash was deliberate" href="http://www.theallegator.com/free-market/grab-your-tinfoil-hats-conspiracy-theory-coming-up/">was engineered by those very regulators</a>.</p>
<p><span style="color: #800080;"><span style="color: #993366;">&#8220;To fight the recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley or Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.</span>&#8221; </span><a target="_blank" href="http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html" target="_blank">-Paul Krugman, 2002</a></p>
<p>(via <a target="_blank" href="http://falkenblog.blogspot.com/2010/10/krugman-demotivator.html" target="_blank">FalkenBlog</a>)</p>
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		<title>Our Two Choices</title>
		<link>http://www.theallegator.com/big-brother/choices-2/</link>
		<comments>http://www.theallegator.com/big-brother/choices-2/#comments</comments>
		<pubDate>Wed, 27 Oct 2010 05:16:24 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=514</guid>
		<description><![CDATA[Today I noticed a poll question on the front page of CNN.com: &#8220;Is it time to break out of the two-party system?” Much to my surprise, the results: 84% – yes 16% – no Why, why, why do they torment me like this? Rarely a week goes by without me discussing the two party system [...]]]></description>
			<content:encoded><![CDATA[<p>Today I noticed a poll question on the front page of  CNN.com: &#8220;Is it time to break out of the two-party system?”<br />
Much to my surprise, the results:</p>
<ul>
<li><span style="color: #008000;">84% – yes</span></li>
<li><span style="color: #993366;">16% – no</span></li>
</ul>
<p>Why, why, why do they torment me like this? Rarely a week goes by without me discussing the two party system with someone. The story is always the same. They feel betrayed by their public officials. They&#8217;re tired of the partisan bickering, they&#8217;re tired of the big money in politics, they&#8217;ve lost faith in their party&#8217;s ability to effect positive change, yet, when it comes time to go into the booth, there is only ever one thought on their mind: I&#8217;ve got to keep the opposition party from getting that crazy so and so into office.</p>
<p>The two party system has become nothing more than a con man with two puppets, each trying to scare you into voting for the other.<br />
In the end, most of the big donors are contributing to both campaigns.<br />
In the end, you are voting-in the same special interests either way.</p>
<p>The party leadership is making the real decisions. They hold the keys to reelection. Their decisions can be the difference between getting big donors and not, an endorsement from a former president, or that endorsement going to a competitor in the primary. If a politician wants to stay in the game, they have to play by the party rules. This is most clearly visible in the GOP votes in Congress. They aren&#8217;t all voting together out of ideology, they&#8217;re following their marching orders.</p>
<p>The Tea Party thus far hasn&#8217;t impressed me, with their candidates who would have trouble debating fifth graders, but they present an unusual opportunity. They have managed to collect a significant portion of random individuals of various ideologies. This seems at first like a weakness, since they will clearly fall apart the moment they try to put together a unified platform, but this is perhaps their greatest strength. The American people are hungry for a change from our current election system, but won&#8217;t anything that replaces it fall victim to the same puppetry?</p>
<p>What we need is a party without a centralized leadership. The American people want to elect an individual, not a party. The poll numbers above reflect this loud and clear. All the people need is the confidence to realize that the majority is with them, and they won&#8217;t be alone. Whatever your party of choice, spread the word.<br />
CNN has gotten the ball rolling for us.</p>
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		<title>Booms, Busts, and Government Stimulated Demand</title>
		<link>http://www.theallegator.com/law/booms-busts-government-stimulated-demand/</link>
		<comments>http://www.theallegator.com/law/booms-busts-government-stimulated-demand/#comments</comments>
		<pubDate>Mon, 16 Nov 2009 03:50:18 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=277</guid>
		<description><![CDATA[Those who look busy in politics enjoy short term success. After Sept. 11, the majority were thirsty for blood and supported the Patriot Act and the invasion of two foreign nations. Now they are demanding that something be done by government to fix the economy. In the latter case as well as the former, those [...]]]></description>
			<content:encoded><![CDATA[<p>Those who look busy in politics enjoy short term success. After Sept. 11, the majority were thirsty for blood and supported the Patriot Act and the invasion of two foreign nations. Now they are demanding that something be done by government to fix the economy. In the latter case as well as the former, those who came out against the madness will reap the political rewards of their investment of opposition in 4 years time.</p>
<p>It could be argued that politicians talked up the economy. It isn&#8217;t so much that they talked it up or down, but that they did them backwards. If they had tightened lending during the boom, we never would have been in the position to bust. Talking up the bust and down the boom makes me wonder if they wanted us to crash in order to boost U.S. manufacturing (<a title="Unilateral inflation attempt" href="http://www.theallegator.com/free-market/grab-your-tinfoil-hats-conspiracy-theory-coming-up/">see my conspiracy theory post</a>), or if it was just straight corruption at the point where regulators choose who gets the money.</p>
<p>Our government is comprised almost entirely of investor-class elected officials. When times are good, they want to use their power to fuel growth and for their own profits and popularity. When times are bad, they feel the ire of the populace threatening their re-election and seek someone to blame in order to appear to be cracking down on the problem. We can see an example of this in the housing market boom and subsequent crash:</p>
<ul>
<li>In 1977 Jimmy Carter signed the<a target="_blank" href="http://en.wikipedia.org/wiki/Community_Reinvestment_Act"> Community Reinvestment Act</a>, which went a long way towards giving government the right to force the banking system to lend to high risk borrowers.</li>
<li>In 1982, Congress (with a Democratic majority) passed the Alternative Mortgage Transactions Parity Act, which allowed non-federally chartered housing creditors to write adjustable-rate mortgages.</li>
<li>Clinton put pressure on &#8220;Government Sponsored Entity&#8221; Fannie May to relax credit requirements in order to try to boost lending to low income buyers. HUD wanted them to keep 50% of their portfolios in loans to low income people.</li>
<li> Clinton threatened to essentially audit lenders and air their dirty laundry if they didn&#8217;t comply. Here is what realtytimes was saying back in the beginning of &#8217;03: <span style="color: #800080;"><em>&#8220;Government policies encouraged riskier lending. They did this &#8216;encouraging&#8217; with threats to step in with GSE reform legislation in response to accounting scandals, and other such methods.&#8221;</em> <span style="color: #000000;">There is clear evidence of both carrots and sticks being used by the government.</span></span></li>
<li>Bush continued and expanded these policies. In 2008, Government Sponsored Entities had extended over five trillion in loans, with a mere hundred million in total assets. They were able to do this via Fractional Reserve Lending, which is an outdated concept from back when banks didn&#8217;t want to have to hold on to large amounts of gold, and more recently is used as a way for central banks to regulate the money supply.</li>
<li>Investors would flee if they saw the banks making such high risk loans, so the banks started bundling risky loans and selling them at bargain prices in order to keep profits up for investors.</li>
<li>People saw great profit in real estate and started taking out as much debt as they could, figuring they could always just sell some if things got tight.</li>
<li>A hiccup in the housing prices started a cascade. Housing prices began to drop, and people started to default on homes that were no longer worth as much as the loan.</li>
<li>As the problem gained media attention, the politicians deflected the blame, blaming the banks for the government-pushed subprime loans. They assured us that they would fix the problem by regulating these wicked banks and doing away with their subprime lending.</li>
<li>The inability of people to get loans or refinance demolished the housing market, making it even harder for those in trouble to sell, even at a loss. Foreclosures cascaded further. This tanked the housing prices and caused the very foreclosures they were intended to prevent. People who would have gladly sold their homes or refinanced were foreclosed on instead. The banks were nothing but a Ponzi scheme.</li>
<li>Bush realized his legacy was threatened, and that the collapse of the American banking system would be put at his feet. He abandoned any pretense of free market and crafted the largest corporate bailouts in history.</li>
</ul>
<p>To unravel the above mess, you have to realize that government financial regulation is an illusion. It creates waste and assures that the booms and busts are larger, last longer, and affect everyone. The bottom line is that we had people borrowing fake money from the central bank, money which was backed up by the government, which is backed up by the people &#8211; people borrowed fake money from themselves to buy houses they couldn&#8217;t afford, and subsequently lost them. The free market won out and balanced itself, despite the government meddling, but with a loss of productivity caused by the waste of effort. Without government regulation, fractional reserve lending wouldn&#8217;t exist on a national scale, nor would subprime loans, and neither would the problem.</p>
<p>From the <a target="_blank" href="http://en.wikipedia.org/wiki/Fractional-reserve_banking" target="_blank">wiki</a>: <span style="color: #800080;"><em>&#8220;fractional reserve banking benefits the economy by providing regulators with powerful tools for manipulating the money supply, interest rates, and government debt creation. From a Keynesian point of view this debt creation provides governments with much greater latitude to stimulate the economy through government spending.&#8221;</em></span></p>
<p>On the Federal Reserve: According to the <a target="_blank" href="http://en.wikipedia.org/wiki/Federal_reserve_system" target="_blank">wiki</a>,  <span style="color: #800080;"><em>&#8220;The Federal Reserve System is subject to the Administrative Procedure Act. It is not &#8220;owned&#8221; by anyone and is &#8220;not a private, profit-making institution&#8221;. It describes itself as &#8220;an independent entity within the government, having both public purposes and private aspects&#8221;". </em></span>The Federal Reserve was created in 1913, by a Democratic Congress and approved by Woodrow Wilson. The Chairman and Vice Chairman of the Federal Reserve are both appointed by the U.S. President.</p>
<p>The very creation of the Federal Reserve gave regulators both the power and the inclination to lengthen booms and then plunder private sector savings (monetize) to &#8216;stimulate&#8217; our way out of the ensuing and ever larger busts.</p>
<p>Lack of oversight? There is a difference between no oversight and bad oversight. The government controls everything from taxes, to laws, trade treaties, tariffs, lending practices. If the regulators were pushing subprimes and Fractional Reserve Lending, then how would additional regulating been helpful? The only idea I&#8217;ve heard out of Washington lately is that we should borrow money to make a product we don&#8217;t want and then go buy it. We have a sinking boat with one party wanting to bail water out of the front of the boat into the back, and the other party wanting to bail water from the back of the boat into the front. It doesn&#8217;t help to shuffle the money around if you don&#8217;t make it in the first place.</p>
<p>It isn&#8217;t so much the fault of the market or government, but at the point at which the two meld, where government decisions affect the flow of large amounts of money in the private sector, here corruption is inevitable. The banking sector is a tough issue. The way I see it there are three main ways we can deal with this:</p>
<ol>
<li>We can nationalize the banks. It wouldn’t be the first time. Obviously, the government has its own problems with inefficiency and corruption, and this essentially gives a competitive advantage to those banks which are subsidized by the government (as does our current meddling in which we have seen bailed out failures buy up successful competitors).</li>
<li>We can do nothing. This is high risk in the sense that if the banks fail, the government is obligated to pay for most of what the banks lose (FDIC guarantee of 250k per account), so if they fall, we pay anyway. As for if they will fail; deflation causes defaults, which causes bank failure; inflation higher than interest rates makes the banks lose money on all of their loans. Due to fractional reserve lending, this means they will fail if the economy is at all unstable. Seeing how we just doubled our money supply last year, this is pretty much going to happen. A failure of the banking industry impacts lending, which is central to the Ponzi schemes that are most modern businesses, and to the housing market. If everyone has to buy their houses with cash, the price is either going to fall a lot farther, or they are going to be bought by China.</li>
<li>We can do what we are doing now, which is leave them private and give them money, which they will abuse, both due to human nature and greed, and due to it being in the bank&#8217;s best interest to hold the money as long as the dollar is gaining value (which it has been until very recently), because using it causes inflation (if the dollar drops much longer, expect dramatic inflationary action by banks trying to drop dollars which are losing value). This is just meddling, and isn’t healthy for anyone.</li>
</ol>
<p>The problem is that we are so deep in this Keynesian lunacy, that switching systems guarantees a crash. What are we to do?</p>
<p>I think this highlights a serious flaw in human nature. People have this unshakable feeling that there is a benevolent deity looking out for them, that everything will turn out fine in the end, and that there is a good solution to every problem, that when life gives you lemons, you get lemonade.</p>
<p>Sometimes every solution comes with pain and sacrifice. Sometimes the government can&#8217;t fix it, people die, wars are lost, retreat is the best you can do. Sometimes you just have to eat your damn lemons.</p>
<p>The longer you fight the tough decision, the worse the consequences get. We need to deal with the core issue, which is that every day we pay more regulators more money to regulate a shrinking industrial base. It&#8217;s time we let go of the micromanaging and let our good citizens keep the fruits of their labor so that they might afford to keep doing it.</p>
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		<title>The Cost of Criminalization</title>
		<link>http://www.theallegator.com/law/cost-criminalization/</link>
		<comments>http://www.theallegator.com/law/cost-criminalization/#comments</comments>
		<pubDate>Tue, 10 Nov 2009 02:25:45 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Law]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=450</guid>
		<description><![CDATA[Mark Kleiman was guest blogging recently over at the Volokh Consipiracy. I&#8217;ve been very interested in his posts, which deal less with individual laws than with the philosophy of the justice system. As with most such discussions I find myself agreeing with his goals while taking issue with his proposed methods. His goal? To achieve [...]]]></description>
			<content:encoded><![CDATA[<p><a target="_blank" title="All his posts on the VC" href="http://volokh.com/author/markkleiman/" target="_self">Mark Kleiman was guest blogging recently over at the Volokh Consipiracy</a>. I&#8217;ve been very interested in his posts, which deal less with individual laws than with the philosophy of the justice system. As with most such discussions I find myself agreeing with his goals while taking issue with his proposed methods. His goal? To achieve &#8220;half and half&#8221;: Half as much crime and half as many people behind bars in a decade. A most worthy goal.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;For three decades, in the face of the great crime wave that started in the early 1960s, we have been trying to solve our crime problem with brute force:  building more and more prisons and jails. We now keep 2.4 million of our fellow human beings under lock and key at any one time, and that number has continued to grow despite the spectacular drop in crime between 1994 and 2004, which took crime rates to 50% of their peak levels.</span></em></p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">Imprisonment at five times the historical level in the United States, and at five times the level of any of the countries with which we would like to compare ourselves, has not been sufficient to fully reverse the growth in crime; current crime rates are still at 2.5 times the level of the late 1950s and early 1960s.&#8221;</span></em></p>
<p style="text-align: justify;"><span style="color: #800080;"><span style="color: #000000;">He goes on to promote the idea of removing the vengeance from justice and attempting to reduce it to a cost/benefit analysis between the cost of enforcement and the public benefit received. He estimates the cost of crime in America (excluding white collar crime) to be around ten percent of GDP.</span></span></p>
<p style="text-align: justify;"><span style="color: #800080;"><span style="color: #000000;">He believes punishment should be swift and certain rather than severe, and he reminds us that punishment is always a cost, not a benefit.</span></span></p>
<p style="text-align: justify;"><span style="color: #800080;"><span style="color: #000000;">Kleiman proposes starting and ending the school day later to lessen the after school time adolescents have to commit crimes. </span></span></p>
<p style="text-align: justify; padding-left: 30px;"><span style="color: #800080;">&#8220;imagine a classroom full of unruly children.  When Johnnie throws a spitball at Suzie, Ms. Jones is too distracted by the need to break up the fight between Dick and Fred to have time to rebuke Johnnie, let alone the six others who are acting out at the same time.  Johnnie and the others learn that they can get away with almost anything in Ms. Jones’s class.&#8221;</span></p>
<p style="text-align: justify; padding-left: 30px;"><span style="color: #800080;">&#8220;Thus both the well-behaved and the ill-behaved classroom are self-sustaining situations.  Indeed, they can be two equilibria of the same system:  the very same children with the very same teacher may wind up either well-behaved or ill-behaved as the result of random accidents at the beginning of the period.&#8221;</span></p>
<p style="text-align: justify;">He proposes a surge in local enforcement to break the criminal mindset and freeing up resources to do it again elsewhere. This goes back to the old theory that if we only had enough cops, there would be no criminals. I have several issues with this.</p>
<p style="text-align: justify;">Our laws are essentially made by politicians. If you look at the creation of legislation, it often seems to revolve less around seeking efficient solutions than trying to appear to have taken strong action. The politician who raises rehabilitation rates by 12% is always going to lose to the one who took another 300 &#8216;criminals off our streets&#8217; and put them &#8216;safely behind bars&#8217;.</p>
<p style="text-align: justify;">On the enforcement side of things, the police can only enforce the laws they are given, which are usually both too broad in their scope (imprisoning productive members of society who have some bad habits) and very limiting (police can&#8217;t simply do door to door searches in each town they hit). I expect what we would see with his proposal is large enforcement squads being shipped out of their home town to raid problem areas. Criminals would simply lay low, knowing they can wait it out. The policing forces would know they are expected to show some arrests, which leads to all sorts of problems, from false or trumped up charges to constitutional violations.</p>
<p style="text-align: justify;">I don&#8217;t dispute the theory that strong enforcement can break the criminal mindset, we&#8217;ve seen that happen with traffic cameras. People knowing that the machine never sleeps makes them less likely to break traffic laws. We have also seen the results: districts cutting yellow lights short, shutting off the enforcement periodically to try and get people back into a gambling mode and breaking laws in order to increase ticket revenue, additional laws invented in order to create new sources of revenue, etc. Increasing enforcement won&#8217;t help until we make crime less profitable for legislators and law enforcement. These are people who know they will be out of a job if there is less crime.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;Much crime-avoidance behavior is wasteful from a social perspective, but not from an individual perspective.  If my putting a burglar-alarm sticker on my front door simply leads a burglar to break into my neighbor’s home instead, the victimization loss is shifted rather than avoided, and in effect I incur a real resource cost to make sure that someone else suffered the cost of being burglarized.  But that fact makes putting up the sticker no less rational for me as an individual.&#8221;</span></em></p>
<p style="text-align: justify;">This brings up a point about the scope of our legislation. The above example works on a city or state scale as well. Very localized legislation may only serve to chase problems to the proverbial neighbor. This is one reason why banishment is no longer a common practice. On the other hand, one of the greatest aspects of These United States is the way the autonomy of the states can serve as testing grounds for new ideas, a market for them to succeed or fail and thus serve as an example. and a way of allowing like minded communities to enact legislations that suit their nature.</p>
<p style="text-align: justify;">An interesting side note on vengeance as a motive for justice, I just noticed the following quote in a file from the department of justice:</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;State prisoners had a 19% lower death rate than the adult U.S. resident population; among blacks, the mortality rate was 57% lower among prisoners.&#8221;</span></em></p>
<p style="text-align: justify;">I guess universal health care does work (universal for them anyway). Back to Kleiman:</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;The current total budget for law enforcement and criminal justice, adding together all levels of government, comes to about $200 billion a year.  If a 1% reduction in crime is worth $15 billion, even modestly successful crime-control efforts can easily justify their budgets.&#8221;</span></em></p>
<p style="text-align: justify;">By this reasoning, the best way of both increasing relative enforcement and decreasing costs would be to pick our battles and reduce our total legislation. Around a quarter of US inmates are in there for drug offenses. By the above statistics, halting the war on drugs would save us something on the order of half a trillion dollars every year, and that&#8217;s not counting the positive effect on GDP of having them back in the work force. The key here is figuring out how much it costs society to put someone away as compared to letting them go or to finding them a new opportunity. People who see themselves as having opportunities and who see their path to a good future don&#8217;t want to screw it up. A large portion of crime is committed out of desperation.</p>
<p style="text-align: justify;">One of the things I love about Kleiman&#8217;s writing on the subject is that he sees crime as something that people commit against others, that crime is something suffered, and arrests are a cost. This brings home the need to reduce both the crime and the need for justice, and also brings up some interesting points about race and class.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;even adjusting for overall lower incomes, African-Americans suffer much more crime than do members of other ethnic categories. Homicide provides the most dramatic example; representing less than 15% of the population, blacks suffer more than 50% of the murders.&#8221;</span></em></p>
<p style="text-align: justify;">Both the poor and racial minorities tend to be segregated into areas that, due to the lesser opportunities have a much higher crime rate. Even their crimes are segregated (white collar and blue collar). Blue collar crimes tend to be punished more harshly, but who is more morally bankrupt, the criminal who burgles homes in order maintain their basic needs, or the banker who embezzles millions in order to maintain a lavish lifestyle? If the burglar were to be given a good paying job with a future, do you think they would still burgle? Some might, but again I think this may owe more to their upbringing surrounded by crime.</p>
<p style="text-align: justify;">A few excerpts from Kleiman&#8217;s crime reduction checklist:</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;Identify and target high-rate serious offenders, with the goal of incapacitating them by incarceration.  Don’t neglect domestic violence in this analysis.&#8221;</span></em></p>
<p style="text-align: justify;">I admit that the whole concept of incarceration is beyond me. I don&#8217;t like vengeance as a motive for justice either. What is the purpose of incarceration?</p>
<p style="text-align: justify;">As a punishment, it is a failure because it merely gives the incarcerated a concentrated group of criminals as peers and role models. When you let them out they are worse than before you put them in, not only because of the above, but also because they likely now have no home, no non-criminal friends outside, fewer family ties and job prospects, etc.</p>
<p style="text-align: justify;">If we aren&#8217;t seeking vengeance, and prison isn&#8217;t a good form of rehabilitation, then why do we have prisons? The only thing that I can think of is just trying to keep people out of society. I say if they have a strong potential for rehabilitation, then focus on it in a way that works. If they have little hope of ever being decent members of society, then why let them out, or keep them alive at all? Severe mental illness is often behind crime, and falls under the same test as far as I&#8217;m concerned.</p>
<p style="text-align: justify;">I think we should offer sterilization as an option for the reducing of sentence. It&#8217;s the oldest and most tested technique our species has for ensuring that the next generation doesn&#8217;t share our failures. Any genetic traits that would lead to criminal activity would be reduced, and we wouldn&#8217;t be subjected to the results of their poor parenting skills.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;Move toward “community prosecution” programs where policies are allowed to vary by neighborhood and are made after active consultation with both police and community leaders.&#8221;</span></em></p>
<p style="text-align: justify;">I&#8217;d be very interested to see this tried. There is plenty of potential for problems, but there is also a lot we could learn. The problems are temporary, the knowledge is forever.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">&#8220;Offer every prisoner a tightly-disciplined therapeutic community as an alternative to a conventional cellblock.&#8221;</span></em></p>
<p style="text-align: justify;">Another idea with potential.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">Since skills such as literacy are portable across the boundary between prison and the community, stress skill acquisition rather than attempts at behavior change such as drug treatment.  Put a computer in each cell.</span></em></p>
<p style="text-align: justify;">I like this one a lot. Internet access should be limited of course, but skill acquisition might just be the top choice for fixing crime related to class.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">Make recidivism a key performance measure for prison managers.</span></em></p>
<p style="text-align: justify;">This one is also great, and if it could be extended to police and politicians, we might have a real solution to the systemic problems.</p>
<p style="text-align: justify; padding-left: 30px;"><em><span style="color: #800080;">Abolish the minimum drinking age.</span></em></p>
<p style="text-align: justify;">I was a little surprised to see this one. I agree. It isn&#8217;t helping create responsible drinkers and is increasing the cost of enforcement. I definitely think the drinking age should be lower than the driving age. Let them get it out of their system before they get keys.</p>
<p style="text-align: justify; padding-left: 30px;"><strong><span style="font-weight: normal;"><em><span style="color: #800080;">&#8220;Allow concealed carry by anyone who passes a gun-safety course, and require every state to recognize concealed-carry permits from other states.&#8221;</span></em></span></strong></p>
<p style="text-align: justify;"><strong><span style="font-weight: normal;">I like this. I don&#8217;t remember anything in the constitution about concealed weapons. I do remember the part about &#8220;shall not be infringed&#8221;.</span></strong></p>
<p style="text-align: justify;"><strong><span style="font-weight: normal;">From his final post:</span></strong></p>
<p style="text-align: justify; padding-left: 30px;"><strong><span style="font-weight: normal;"><span style="color: #800080;"><em>&#8220;If people who call themselves fiscal conservatives understood that a sentence of life without parole imposed on an 18-year-old represented a present-value expenditure of $1 million, the enthusiasm for “throwing away the key” might be diminished.&#8221;</em></span></span></strong></p>
<p style="text-align: justify;">Too many of the things we do in the name of safety are really the government infringing on the rights of the innocent on the theory that they may become guilty.</p>
<p style="text-align: justify;">If you would like to hear more from Mark Kleiman, check out his book:</p>
<p style="text-align: center;"><a target="_blank" href="http://www.amazon.com/gp/product/0691142084" target="_blank">When Brute Force Fails: How to Have Less Crime and Less Punishment</a><img style="border: none !important; margin: 0px !important;" src="http://www.assoc-amazon.com/e/ir?t=theallegator-20&amp;l=as2&amp;o=1&amp;a=0691142084" alt="" width="1" height="1" border="0" /></p>
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		<title>Tax Comedy</title>
		<link>http://www.theallegator.com/big-brother/tax-comedy/</link>
		<comments>http://www.theallegator.com/big-brother/tax-comedy/#comments</comments>
		<pubDate>Sun, 10 May 2009 07:02:20 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=387</guid>
		<description><![CDATA[This is only tax comedy in the sense that it is presented as such. I found the below video via Left Coast Rebel, and thought I&#8217;d pass it on. Taxation has become pervasive. When you earn a dollar, it is taxed, when you spend it, it is taxed again. At the same time as you [...]]]></description>
			<content:encoded><![CDATA[<p>This is only tax comedy in the sense that it is presented as such. I found the below video via <a target="_blank" title="Libertarian, anti-Obamanation" href="http://www.leftcoastrebel.com/" target="_blank">Left Coast Rebel</a>, and thought I&#8217;d pass it on.</p>
<p style="text-align: center;">
<object width="425" height="344" data="http://www.youtube.com/v/ekKk4SkiC-w&amp;color1=0xb1b1b1&amp;color2=0xcfcfcf&amp;hl=en&amp;feature=player_embedded&amp;fs=1" type="application/x-shockwave-flash"><param name="allowFullScreen" value="true" /><param name="src" value="http://www.youtube.com/v/ekKk4SkiC-w&amp;color1=0xb1b1b1&amp;color2=0xcfcfcf&amp;hl=en&amp;feature=player_embedded&amp;fs=1" /><param name="allowfullscreen" value="true" /></object></p>
<p>Taxation has become pervasive. When you earn a dollar, it is taxed, when you spend it, it is taxed again. At the same time as you are being taxed for spending it, someone else is being taxed for earning it. These taxes are increasing, and not just by total value, but by percentage, which is unaffected by inflation and thus unjustifiable in a digital age which should be lowering the cost of governing.</p>
<p>When you think of the nature of income and sales taxes, it becomes clear that the government makes a lot of money, not on the saving and responsible use of money, but on its momentum. The next time you hear someone in power speaking of the need to get consumers consuming again, think of what their true motive might be.</p>
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		<title>Mob Mentality</title>
		<link>http://www.theallegator.com/free-market/mob-mentality/</link>
		<comments>http://www.theallegator.com/free-market/mob-mentality/#comments</comments>
		<pubDate>Sun, 12 Apr 2009 20:08:06 +0000</pubDate>
		<dc:creator>Steel Phoenix</dc:creator>
				<category><![CDATA[Big Brother]]></category>
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		<guid isPermaLink="false">http://www.theallegator.com/?p=351</guid>
		<description><![CDATA[◄Dave► has an excellent post up on Thoughts Aloud about thought and emotion as they relate to politics. On thinkers he says, &#8220;thinkers tend to prefer to rely on their own wits, live an independent existence, take entrepreneurial risks, and accept responsibility for the consequences of their failures. They tend not to seek or rely [...]]]></description>
			<content:encoded><![CDATA[<p>◄Dave► has an excellent post up on Thoughts Aloud about <a target="_blank" href="http://www.thoughtsaloud.com/2009/04/11/thinkers-vs-feelers/" target="_blank">thought and emotion as they relate to politics</a>.</p>
<ul>
<li>On thinkers he says, <em>&#8220;thinkers tend to prefer to rely on their own wits, live an independent existence, take entrepreneurial risks, and accept responsibility for the consequences of their failures. They tend not to seek or rely on leaders for direction, and do not generally find causes or identity politics compelling.&#8221;</em></li>
<li>On feelers, <em>&#8220;Feelers are more sociable, prefer the security of groups of simpatico friends, and readily follow the direction of group leaders. Their need to belong makes them vulnerable to groupthink, and susceptible to the notion that the group is more important than any individual.</em>&#8220;</li>
</ul>
<p>I&#8217;m not a big fan of this terminology, but the points are valid. I&#8217;m going to switch the terminology towards individualists and followers, since I think there are far too many groupthink intellectuals out there (socialists), and thoughtless individuals (couch potatoes). </p>
<p>Both of these would appear to be valid ways of going through life, but at some point the followers run into a problem of scale. The very strength in numbers that gives them power also robs them of their free choice. Once a group gets to a sufficient size, it takes on an identity of its own. It becomes simple minded and self serving, bloated and corrupt. Those followers that make up its members find themselves in the position of opposing many of the policies of the collective; but having the choice of being with it or against it, left out on their own, they continue their support.</p>
<p>Individualists have been blamed for many of the problems of society, from the destruction of family values, to corporate greed, to the collapse of the economy. I would argue that we are a relatively tiny portion of society, and that we have been vilified by the collectives as a way of passing blame to those who are not organized enough to defend themselves.</p>
<ul>
<li>&#8220;Family values&#8221; is just a code phrase of conformity. Having grown up in several different family units and situations, I can say with confidence that it was enlightening, and that there is no single right way to raise a family.</li>
<li>Corporate greed is a problem of the collective. We should mistrust those in power and those organizations that have grown too large. When they stop serving us, we should stop serving them.  <em>&#8220;The difference between corporations and governments is governments have a monopoly on force. It&#8217;s a lot easier to vote with your feet or your wallet than it is to change a government with your vote.&#8221; -P.J. O&#8217;Rourke</em></li>
<li>The collapse of the economy can be blamed on a great many things, but to claim that the government was powerless to stop it and lacked the ability to regulate it is ludicrous. They control the tax rates, the interest rates, the laws, the tariffs, the subsidies, minimum wage, and the printing of money, and we are expected to believe that they were powerless?</li>
</ul>
<p>At the feet of those disciples who sacrifice free thought for membership, we can clearly lay a great deal of the worlds problems, from partisanship, to war, to oppression, to censorship. These are not the tools of individuals.</p>
<p>Too many run the daily news through a filter of religion and partisanship before they form their opinions, and even more these days have become too lazy even to do that, instead relying on tailored media to save them the effort of forming their own opinions, and offering them false outrage on a platter. If you only listen to the news sources that match your politics because all of the others are biased against you and make you angry, then you are a part of the problem, not the solution. Form your own opinions. Emotional response has been shown to physiologically inhibit rational thought when watching politics. Don&#8217;t get angry at the other guy, seek deeper understanding and push solutions.</p>
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