on Immigration

Why do we restrict immigration? From what I understand the answer is that we want to protect American jobs. I think thats hogwash and there is evidence to back me up. If smart and wealthy people want into the club that is America they should be given the opportunity to do so. Those individuals will come here and spend, work, innovate and hire other Americans. In short they will help grow America and help bring down costs for us all. Anyone who says otherwise is either prejudiced or just plain scared.

on Afghanistan

As it has been in the news quite a bit the past few days, the accidental burning of Korans has been on my mind as of late. While I understand that the burning of religious texts can be seen as an affront to ones religion and it being done by people who seem to share very little in common with the average Afghan can can not help but make it worse, I find it perplexing that the outrage is so strong. It was an accident after all, for which the President of the United States apologized for in an election year. It was an accident unlike the death squads, the torture, the corruption, the desecration of corpses and the 10 year occupation that can and is associated with American forces in Afghanistan.

But it's the Korans they are mad about. Something has gone terribly terribly awry in that country, and I don't think we know who exactly is to blame.

on The Command

As you may or may not know, I enjoy reading Marc Ambinder. So it should not surprise anyone that when his short e-book on JSOC, titled The Command, was released, I devoured it in a weekend. If you are at all interested in America's Special Forces then I highly recommend the book. Ambinder and Grady really hit this one out of the park, go buy it.

What most fascinated me was the swift and extremely effective change that occurred right before the surge in Iraq in the way JSOC gathers, disseminates and acts open intelligence throughout the US military and Federal bureaucracy. I used to think what we see in the Bourne movies was pure fantasy, but now I'm starting to think it reflects reality fairly well:

Here is how a colleague of General Flynn’s described the change in procedures on the ground: “What would normally happen is: the shooters would kick down a door and snatch everyone and drag them to the front room, and then take everything with them, and put it in a trash bag. The bad guys would be taken to a detention facility and the pocket litter would come back to [the intelligence analysts]. Flynn thought this was stupid. Instead, he gave the shooters—think of this—the Delta guys, mini cameras, and schooled them in some basic detective techniques. When you capture someone, take a picture of them exactly where you captured them. Take detailed notes of who was doing what with what. Don’t merge all the pocket litter.”  

He continued, “Then, the shooters were supposed to e-mail back an image of the person they captured to Balad [JSOC’s intelligence headquarters], where analysts would run it through every facial recognition database we have, or fingerprints or names, or what have you. We’d get hits immediately. And so our intel guys would radio back to the team in the field, ‘Hey, you’ve got Abu-so-and-so, or someone who looks like them. See if he knows where Abu–other-person is.’”

And that’s what the shooters would do. They’d tell their captured insurgents that for a price, they could help them. A senior JSOC intelligence commander said, “They’d say, ‘I know you, you’re so-and-so. And if you want us to help you, you need to tell us where this other person is.’ And it would work. And then, when we got a new address, sometimes within twenty minutes of the first boot on the door, we’d have another team of shooters going to another location.” Follow-up interrogations were plotted out like dense crime dramas, with dozens of participants, including some by video teleconference.  

Instead of three operations every two weeks, JSOC was able to increase its operations tempo (or “optempo”) significantly, sometimes raiding five or six places a night. This completely bewildered insurgents and al-Qaeda sympathizers, who had no idea what was going on. In April 2004, according to classified unit histories, JSOC participated in fewer than a dozen operations in Iraq. By July 2006, its teams were exceeding 250 a month. McChrystal’s operations center was open for fifteen hours a day, regardless of where he was. There is a strong correlation between the pace of JSOC operations, the death rate of Iraqi insurgents and terrorists, and the overall decline in violence that lasted long enough for U.S. troops to surge into the country and “hold” areas that used to be incredibly dangerous.

They went from under 12 operations a month to over 250 a month! That's just insane! Ambinder & Grady don't mention it explicitly here but what I really think is the revolutionary thing is not the change in tactics per se but the trust and decision making placed in the hands of the "shooters". By empowering them to do the on the ground investigation and analysis it enabled the intelligence to be acted upon much earlier and more than likely put the enemy on their heals. A lot like when an offense goes no huddle in football and as a result of the defense not being prepared the entire momentum of the game shifts.

on Health Jobs

I'm starting to think that while growth in the healthcare sector is good for the economy in the current jobs crisis over the long run it is not ideal. Here is Ryan Avent in his book The Gated City:

(People are) moving to places where job growth is heavily concentrated in non-export industries with very low productivity growth: largely health care and education.

It is less likely to innovate and as Sarah Kliff points out, with 1 in 5 people moving into the profession we are less likely to stem the debilitating cost growth in the health care sector. What I am personally worried about is that this going to draw highly intelligent, productive members of our society away from densely populated, highly productive regions of the country (New York, San Francisco, DC & Boston) to less desirable, sprawl ridden areas of the country. Drawn away to fill jobs, while very much needed and admirable, that will give little in the way of innovation and economic growth. These individuals would be better suited working in a densely packed metropolis with a multitude of biotech, pharmaceutical and health research firms to feed off of and innovate. Not parts of the countries whose greatest claim to fame is the availability of cheap land.

on Farming and Manufacturing in the South

You  can thank/blame better farming equipment for the conditions that led to "Right to Work" laws in the South:

Agricultural productivity pushed millions of farm workers off their land and created a large pool of poor, jobless workers. Finding employment for those workers became a high priority for southern politicians, many of which underwent a dramatic political transformation -- from a focus on protecting southern culture from the federal government, to aggressively recruiting new enterprises from the industrial portions of the country. State leaders began to wave generous incentive packages at northern firms, including tax breaks and right-to-work laws, in order to attract production facilities. And many were successful; industrial employment rose sharply across the south, turning the southern Piedmont into the country's second industrial heartland. 

That is from Ryan Avent's book The Gated City.


All of this makes sense; a large pool of labor puts pressure on politicians who, to save their own jobs, bend over backwards to entice business to their states. Which in turn hurts labors position in said states. A sacrifice locals don't mind because having a low paying non-union job is better than not having a job at all, but to workers in the midwest it was a death sentence. A well played game by management.

on The Big Short

I used to feel bad when I thought of layoffs on Wall Street, no one should go wanting for work, least of all those trained for a particular trade. Then I read Michael Lewis's narrative of the financial crisis and came to a much different mindset; Wall Street attracts the ambitious and that ambition is promptly wasted. Innovation is directed at ways to better fuck over one's counterparts through convoluted and hard to understand financial vehicles. So it is my opinion that the less attractive the finance industry appears to be then the the fewer talented individuals will be lured away; which in turn leads to fewer morons (Germans in this case) being fucked over.

While I was aghast at the over all ruthlessness of the industry, Mr Lewis is more focused on how the lack of responsibility and accountability has led to a culture in which fees and personal enrichment purvey rather than loyalty and good faith in regards to ones clients. A likely outcome when the utter destruction of a clients portfolio at worst leads to an early, yet cushy, retirement from finance.

To me what is most striking about the book is the lack of mention of the authorities. This is not a testament to the reporting, on the contrary, the characters reported on in the story approached the authorities only to be rebuffed (more like stared at with confused looks). It's shocking to think that such pervasive fraud and deception went on with the authorities having little to no knowledge of it. Those with the responsibility protect the markets should never have to rely on the market players themselves to do the right thing. We should be spending vast sums of money to employ individuals to understand the markets and their potential weaknesses. The cost is a fraction of the lost productivity that occurs after a financial crisis and in my opinion is money well spent.

In closing I find it rather humorous that Martha Stewart received more jail time than any individual that was complicit in the largest financial disaster since the Great Depression. We could do better.

Including Taxes in the Posted Price

In Colin Grey's video Death to Pennies he mentions how it is absurd that we do not include tax in posted prices at stores. As a result of this oversight individuals are unable to efficiently use their change to pay for items. My problem is with inefficiency of the whole affair; calculating the tax one time when marking the price on the shelf as well as the price being constantly priced and repriced in the heads of the customers and then recalculated again at the register. While the register does that instantaneously we humans tend to struggle even with the most basic of math. The result must be lost time, more stress and I would assume lost sales.

I think the excuse that if we include the tax in the prices people will be dismayed by the higher prices. I is exaggerated. Individuals take tax into account when making a purchase so why would they not switch from expecting tax to expecting higher prices?

Some Thoughts on Dollar Coins

The US government is ending the dollar coin program because they have 1.4 billion of them all ready in storage. Matt Yglesias jokingly (at least I think it's a joke) says we should pick 1,400 random people and give each of them a million of them. I certainly would love to receive that many dollar coins as would many 5 year olds but I can't say the same for the rest of society. I would assume they would for the most part end up back at the Federal Reserve.


Instead I think we should do away with the dollar bill all together and force people to use the coins. If coins are indeed more cost effective to use then we should be pushing individuals to use them not simply giving them the option. 


While we're at it how about we do away with the penny and add a 50 cent piece and a $2 coin to reduce the amount of coinage out there. I can't find a GAO report on that but I would expect that reducing the amount of currency by increasing denominations would save money. 


And for those of you who will complain about having to carry around pockets full of coins I would like to point out that with implementing $1 $2 & 50¢ coins and the elimination of the penny (also if you use them efficiently) you should never have more than 6 coins in your pocket at any given time. Think about it.

Some Thoughts on America's Multi-Party System

From time to time political commentators and political novices (all mostly of the left variety) lament that if only America had a multi-party system like Europe does then we would all be ok. I think that's hogwash. America does have a multi-party system (I would argue at least 8), what is missing is the election day free for all and post election horse trading of European Politics. Which from political theater stand point is awesome and as a political junkie I would love to experience it. From a practical standpoint, not so much.

Instead of the chaos America gets that out of the way in the primary stage, narrowing the many factions down to two major choices with the malcontents of the two parties (usually the far ends and the center) occasionally posting third party candidates. Both styles result in the same thing the majority of the time, a right of center or left of center government (there are of course notable exceptions but you will be hard pressed to find many of them).

The key difference between the two forms is that one is good at hiding differences as well as co-opting them in the name of coalition stability (America), whereas the other (Europe) is good at highlighting these differences in order to promote individual factions and their respective hot button issues. Regardless each system has more or less the following 8 divisions:

Far-Left
Left
Center-Left
Center
Center-Right
Right
Far-Right
Politically Agnostic

In Europe they are given party names, in America they run in the Republican or the Democratic primaries. In America in a way it's like Communist party politics; all the factions fighting it out behind closed doors but in the end they all belong to the same party which has the power. The American system preserves stability for a set period of time while many European systems, because of their fractious parties, reflect more of the mood of the people and can be more volatile  (snap elections, government's falling after a crisis, etc).

Of course I am not advocating one or the other. I myself would prefer an open primary with a top two candidate runoff as my election model of choice. I think that would be fairer to states that tilt one way or the other of center (think Texas or Massachusetts). What I mean to say with this post is that most Americans don't choose to exercise their right to influence the coalitions that are the Democratic and Republican parties for whatever reason. Yet, in my opinion, even if they did the end result would more than likely be a centerish government such as American democracy, and democracy as a whole, has always put forth.

More Thoughts on Banking

To clarify my post from yesterday a little I would like to say that my thinking does not stem from any feeling that free banking should be a human right. My mindset comes more from that if it were free it would make the world more efficient and remove impediments to doing business.

I think Republicans are misguided in their "over-regulation" crusade and should focus more on regulations that give the edge to specific actors in the market, government sponsored monopolies is what I'm thinking of. I for one would love to see more players in the bank seen, especially players that have a history of driving down costs for consumers.

Some Thoughts on Banking

I don't necessarily know where this post is coming from in terms of what spurred it but take it for what you will.

My thinking is starting to drift towards splitting the financial sector in two; one side being heavily driven by profit and investment, with the other being centered on basic banking services. I think the first needs profit in order to operate at peek efficiency, why else would you lend someone money who you dont know unless it was to make a return on your investment? The second however is should be more centered around defraying costs, not making money.

Think of the alternatives to bank accounts and the costs that it would incur if we did not have them (or people were priced out of having them). As a result people would have to carry and store more cash (possibly in a shoe box or under their mattress). One would assume that they would not carry their thousands of monies on their person for fear of losing it or it being stolen, and if that were the case they would probably be less likely to make large purchases as well as to make impulse decisions. If debit cards do anything they make it easier for someone to spend money (as well as for retailers to take money) so why would someone who is looking to turn a profit want to take that tool out of a consumers hand? By instituting fees and pricing out the "un-banked" you are inhibiting consumer spending.

I see two alternatives to our current system of banks leaching off of consumers.

1) Governments get into the game in order to lower the use of cash as well as spur spending, while I think this would be a great idea I don't foresee this being something that will ever happen, maybe in small wealthy nations but even then I assume currency is used very infrequently to begin with (rich people use rewards based Credit Cards).

2) Major retailers (like WalMart) get into the game and offer money losing accounts simply to get you in their stores or lower their operational costs (I can see Amazon getting in to this or Apple). You all ready see this with specific banking institutions who offer free basic services on the chance that you may use their other services For instance Charles Schwab offers a great banking service for free on the condition that you open a free investor account with them, they don't force you to use it but if you want to it is there.

I haven't quite wrapped my head around my exact feelings on this matter but I'm getting there. To me it makes sense in the same way that Google does everything in it's power to get you to look at more pages on the internet. The more pages you look at the more ads they can put up, the easier it is for you to manage and spend your money the more you are going to spend it. Banks are in this scheme just middle men, they are a barrier between the consumer and the retailer, and I don't think they are going to be in the way much longer. 

Some Thoughts on the TPP FTA

First off why is this article in this weeks Economist the first time I have ever heard of the Trans-Pacific Strategic Economic Partnership? There is a chance that it might become a big deal this month with an APEC meeting taking place, and it would be an even bigger deal if Japan were to enter into negotiations. Without Japan it does not look like it would be all that interesting due to the fact that most of the countries involved have a standing free trade agreement with the US, the notable exception of course being Vietnam and New Zealand. Opening up to another English speaking country would obviously be worth more to New Zealand and the US than a non-English speaking country of the same standing. Vietnam I would assume would benefit greatly from becoming even cheaper than it is to US firms in regards to China (which may force the US and China to finally work out their problems).

The big fish though, is Japan. Tying the 1st and 3rd largest economies together would be nothing short of fantastic and may entice China to join the club or at least play a bit more fairly.

I don't claim to know anything about FTA or trade in general but I really want to learn more about trade deals.

Some Thoughts on Social Security

In this weeks Businessweek there is a short interview that Tom Keene Had with former Reagan OMB Director David Stockman. There is really nothing knew in it; he advocates means testing and outright stripping of benefits for the rich. It's just that it hit me; how is treating Social Security like the large part of the budget it is (and not the so called trust fund it is perceived to be) and eliminating its payouts to high earners not a political win for both sides? It would preserve the benefits for those that need it while "taxing" the rich (both Dem talking points). While at the same time it "reigns in entitlement spending" for Conservatives. Throw in slightly lower taxes for the rich (not as much as this change would save) or an increase in the retirement age by a year and I don't see how this could not look good for both sides.

It's the creative ideas and true compromises that will win the day. This isn't a benefits cut that Democrats would hate (you could sell it as a revenue creator) and this isn't a tax increase (hell you could sell it as a spending cut paired with a tax cut if you were so inclined). I really hope this is something the super committee takes a look at.

Thoughts on Latin Alternatives to China

This weeks economist saw two articles in regards to good news for Latin American economies (Panama and China). And for those of you China haters and doom/gloom lovers this should be where you should be focusing your misguided worry. Free trade agreements and better relations with Latin American countries would likely help diversify our trade towards more Latin American goods not to mention help the environment, halt the influx of illegal immigrants and just be all around great for the world economy.

Though if you are looking for continued cheap all inclusive vacations to suspect countries in Central America then maybe you should ignore this.

Some Thoughts on Who the Voters Will Blame in 2012

Not really all that relevant to the story but Is Rick Scott's zeal/ineptitude going to effect the 2012 election in Florida even though he is not on the ballot? His approval rating as of the end of March was 29% and if memory serves me correctly even his party turned on him over his rejection of high speed rail money. A lot has been made of what swing states with high unemployment (Florida's is over 10%) will do when it comes to the Presidential elections but nothing seems to have been made of who is to blame in these swing states. May Barack Obama get a pass because Floridians blame Rick Scott for their woes? In WI I'm sure Mr. Obama could get a pass on a lot of things simply because Scott Walker, the most visible Republican in the state, is not well liked either, not to mention what a certain Representative from WI has done to single handedly diminish GOP 2012 chances. . Of course this is all subject to change and I could be completely wrong but I think this is something that is going under reported and would love to see some polling on it.

Some Thoughts On Abolishing the Senate

To start off it should be known that I am not delusional enough to think that this is even remotely possible, you aren't going to see 66 votes in the US Senate nor the 38 State legislature approval needed for the Constitutional Amendment but that doesn't stop me from speculating!

Ezra Klein had a short post recently illustrating how ridiculous a notion the makeup of the Senate is, best expressed by how a Senate vote in Wyoming is worth 68 times more than it is in California. Not exactly fair but it was a necessary compromise needed to bring the smaller states (such as Rhode Island & Delaware) into the Union with larger, more populous states (such as Virginia and Massachusetts) who favored the model used in the house (proportional representation). With that said the 3/5 Compromise was stripped out of the Constitution quite some time ago, though it should be noted however it took a costly Civil War to right that injustice.

In a world molded by my hands I would see the Senate abolished and 100 seats added to the US House of Representatives bringing our avg district population down to 484,000 which would move us from 2nd worst representative to only the 3rd worst. I would prefer to see the US add even more seats but an 1:1 consolidation of the two chambers sounds better. The consolidation would obviously have to revolve around the completion of a census year to bring into the fold the proper proportion of House seats per state.

As for the duties of the Senate (treaty approval, judicial & executive nominations, etc.) either the House would assume all of them or the House could nominate per 2-year session a committee, chaired by the Speaker, that's sole duty was to pass or fail these. I think I would prefer to still give the House the full up or down vote for this partially because the more representative of the US population the better. But mostly because I don't think adding these duties would be all that much of a burden to the House, especially if we were to limit the amount of executive positions that need confirmation which are at about 1,400 (and this would be a great excuse to do so).

Some great side effects of this "merger" would be the elimination of the Senate Pro Tempore from the line of succession as well as the annihilation of all Senate rules such as cloture and secret holds. And who knows maybe we would do away with that pesky Electoral College while we are at it?

The main goal here, as I stated above, would be to make elections fairer. But the obvious side effect from this would be the elevation of the Speaker of the House to near the level of the President, if not above the President. I think it would be a good thing, possibly stop, or at least be a great check on the Imperial Presidency and shift the power back in the direction that the founders assumed it would be.

But again, this will never happen.

Some Thoughts on Federalism and Europe

This hit me when I read the article about the Scottish Elections but it reflects news coming out of Europe over the past couple of months. Despite the opposing viewpoints of a push for more unity among Europe and the same time a push within countries for more local governance they reflect the same need and want for federalism among Europe. But they also expose problems with the way forward:

• As long as each a country's culture is so drastically different from the next (think Greece vs Germany) problems are always going to persist. You can not allow a difference of retirement age by 6 years and expect there not to be serious consequences. Going forward, in order to stop these problems, economic & fiscal policy as well as social welfare goals need to be further alligned. The goals must be identical across the Union and member state's must be held accountable by a central government with teeth. But like in the US each individual states should be allowed leeway in how to implement those goals due to the cultural differences that occur.
• On the other end of the spectrum you see the splintering of states (Scotland, Belgium and distantly the Basque region of Spain). While I applaud the dissolution of powers to local constituencies and governments (something Great Britain has long needed) the assumption of diplomatic and defense responsibilities by such localities would not be advisable. Though if a credible EU diplomatic corp and defense force where to emerge then I would support more drastic dissolution to localities (something on the line of county and big city autonomy in the US) .

Some Thoughts On The Economist May 14th - 20th 2011

Really good Afghan coverage this week, paired with this news, I think my thoughts from earlier in the week are looking better.

Did someone say bubble?
I do think some of these companies are overvalued considering in the end all they hold are pageviews which navigate to the coolest new trends but with that said the market and technology are not the same as a decade ago. Then again I know only what I read online and hear from Planet Money.

Microsoft did not buy Skype to make money, because this market will never make money, especially with Google and Apple all ready in the game and I'm sure Facebook will jump in at some point as well. They must have bought it to integrate it into a future OS and enhance current products. Personally I would like to see, and I think we will some day, an integration of video chatting into the phone system as a whole, regardless of what operator you use.

List the World Cup on Ebay?
Would eliminate board corruption, would reward teams who are looking to spend money on the sport and would set the drama to zero? I'm cool with it.

Security State? You must be white.
Caveat: I'm a middle class, white, male.
I find it interesting that the majority of this country found it ok that people could be stopped at random, searched, roughed up and jailed on a bogus charge but to be inconvenienced at the airport is an outrage.

Once Again......
I would like to stress that if China and India do not start importing females soon then they are in for a whole lot of social upheaval in the next few decades. If China doesn't end its one child policy soon it is going to need to really liberalize on immigration to deal with the huge increase in retirees going forward. In other words China's ascendancy is in for a rocky furture

Consolation Prize
It appears that although we have seen our retirement funds wither away, debt pile up and had to deal with job insecurity all of that was a rouse win back our jobs from the Chinese!

To limit or not to limit?
I think its moronic that we kid ourself into thinking that putting limits on our debt but not our spending will keep us from appropriating too many funds. With that said I like that it requires us to think about our debt obligations and reassess if it is the right thing to do, regardless of how stupid the debate becomes.

Some Thoughts On Newt's Announcement

You may or may not have heard, but former Speaker of the House Newt Gingrich announced that he will in fact run for President of the United States.  This was an announcement that was widely expected for months now. It is also widely expected that Newt will not win the nomination. Why is that known you might ask? It has something to do with his love life and how it plays with this, his thoughts about the seating arrangements on Air Force One, and the fact that Bill Clinton stole his lunch. But of course the news networks will cover him and his run like he matters. Again, your 4th Estate at work!

Some More Thoughts On Bin Laden

Apparently the US and Afghan governments have been holding super secret talks (though if it is appearing on this blog I doubt it is all that secret) with various factions of the Taliban in order to bring them into the government fold. It also appears that the death of Osama bin Laden does not complicate those talks, if anything it makes them easier. According to Ahmed Rashid who spoke on NPR's Fresh Air the death of OBL may negate the personal debt that Taliban leader Mohammed Omar has to Al Qaeda (in particular OBL).

Setting aside the fact that the Taliban peacefully integrating back into Afghan society would be nothing short of amazing, let us contemplate what this would do to US domestic politics. I'm no expert (though I do have a degree in Political Science) but would the Afghan and Iraq* wars ending on Mr. Obama's watch not castrate the national security issue in respect to GOP politics? Not to mention it might give Mr. Obama enough political capital to cut the defense budget significantly.

The point of this brief post really is that if you are thinking of donating to Barack Obama's reelection campaign you may be better off investing in a high end disputes lawyer and buying him a ticket to Kabul.

*George W Bush deserves credit for implementing "The Surge" as well as overseeing "The Awakening" movement among Sunni's in Iraq. Without those policies we may well have seen a much less stable Iraq at this time.