Archive for the ‘corruption’ Category

The video guy.

Wednesday, September 14th, 2016

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Now there is a guy I would not sell life insurance to.

Reading the tea leaves.

Monday, September 5th, 2016

Once again, Richard Fernandez finds the essential point.

Russia isn’t governed well. But people don’t rise to power in Russia according to their skill at solving public policy issues. They climb a ladder by how well they can grip the rungs of guns, bribery and deceit. Putin’s “political socialization took place as vice mayor of St. Petersburg in the 1990s, where … one of his key roles was acting as a liaison between the political and criminal authorities. It was the Wild Wild East, a world where duplicity was the norm, rules are for sissies, and only might makes right. It was a world where informal networks ruled and you controlled people by corrupting them.”

Such jungles tend to evolve very capable predators.

Putin, in my opinion, has done a fairly good job with Russia given the serious problems they have as a nation.

Madison tried to warn us about the risk of corruption, or as he called it, “Faction.”

Complaints are everywhere heard from our most considerate and virtuous citizens, equally the friends of public and private faith, and of public and personal liberty, that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.

We now are at serious risk of electing the corrupt member of a cabal of self interested manipulators of the public interest for private gain.

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What are George Soros motives?

Tuesday, August 23rd, 2016

George Soros is a Hungarian born billionaire who seems to be funding a lot of malicious mischief around the world. Why ?

Soros was born in Hungary in 1930.

That Wiki article is very favorable to Soros and does not mention a few things.

There is considerable discussion of Soros’ role under the Nazis.

It has been alleged that he was a collaborator. Apparently, he did admit doing some things that could be criticized although the role of a 14 year old is pretty weak.

It was a tremendous threat of evil. I mean, it was a — a very personal experience of evil.

KROFT: My understanding is that you went out with this [Christian] protector of yours who swore that you were his adopted godson.

Mr. SOROS: Yes. Yes.

KROFT: Went out, in fact, and helped in the confiscation of property from the Jews.

Mr. SOROS: Yes. That’s right. Yes.

KROFT: I mean, that’s — that sounds like an experience that would send lots of people to the psychiatric couch for many, many years. Was it difficult?

Mr. SOROS: Not — not at all. Not at all. Maybe as a child you don’t — you don’t see the connection. But it was — it created no — no problem at all.

KROFT: No feeling of guilt?

Mr. SOROS: No.

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Interesting comment on Hillary’s career.

Friday, July 29th, 2016

This was posted on facebook as a comment to a WSJ piece on her campaign strategy.

Dick Morris, former political adviser to President Bill Clinton: If you happen to see the Bill Clinton five-minute TV ad for Hillary in which he introduces the commercial by saying he wants to share some things we may not know about Hillary’s background, beware as I was there for most of their presidency and know them better than just about anyone. I offer a few corrections:
Bill says: “In law school Hillary worked on legal services for the poor.”
Facts are: Hillary’s main extra-curricular activity in ‘Law School’ was helping the Black Panthers, on trial in Connecticut for torturing and killing a ‘Federal Agent.’ She went to Court every day as part of a Law student monitoring committee trying to spot civil rights violations and develop grounds for appeal.

Was this true ? Snopes has a sort of rebuttal.

Hillary Rodham (as she was known then) wasn’t a lawyer then, either: She was a Yale law student, and like many of her politically-minded fellow law students who saw the latest “trial of the century” taking place just outside the main gate of their school, she took advantage of an opportunity to be involved in the case in a minor, peripheral way by organizing other students to help the American Civil Liberties Union monitor the trials for civil rights violations. Her tangential participation in the trial in no way helped “free” Black Panthers tried for the murder of Alex Rackley

So the description credited to Morris is correct.

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What the Hell is going on ?

Thursday, July 7th, 2016

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I have been ruminating about the Hillary case since the Bill and Loretta meeting at the Phoenix Airport last weekend.

What is going on ?

The meeting was a big secret and no reporters were supposed to be there. However, a local TV station was at the airport.

The temperature was 115 degrees. Bill Clinton was alleged to be playing golf but HE DID NOT DO SO. He was meeting with a donor.

Former President Clinton was visiting the Phoenix area and arrived to Sky Harbor Monday evening to depart.

Sources tell ABC15 Clinton was notified Lynch would be arriving at the airport soon and waited for her arrival.

Lynch was arriving in Phoenix for a planned visit as part of her national tour to promote community policing.

ABC15 asked Lynch about the meeting during her news conference at the Phoenix Police Department.

I did see President Clinton at the Phoenix airport as he was leaving and spoke to myself and my husband on the plane,” said Lynch.

She made some risible remark about discussing golf and grandchildren. She had no children, let alone grandchildren.

This story stinks to high heaven.

Then Comey had his short announcement. CNN, of course, loved it.

Comey last navigated politics this turbulent in 2004, when he was deputy attorney general and he was at the center of a dramatic showdown with the White House over a surveillance program ordered by President George W. Bush. Comey and other Justice Department and FBI officials threatened to resign in the dispute, and Comey, a Republican, emerged a hero to the political left.

This is a lie. Comey was hip deep in the controversies of the Bush Administration and not in an impartial way.

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What happened to Venezuela?

Saturday, May 21st, 2016

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Venezuela is in the news as the country cannot even buy paper to print money.

This all goes back to 1998 when Chavez was elected by the people.

He was an army officer and had previously attempted to overthrow the government, a coup that failed.

in the early 1980s. Chávez led the MBR-200 in an unsuccessful coup d’état against the Democratic Action government of President Carlos Andrés Pérez in 1992, for which he was imprisoned. Released from prison after two years, he founded a political party known as the Fifth Republic Movement and was elected president of Venezuela in 1998.

Venezuela is an example of The Curse of Natural Resources.

The idea that resources might be more of an economic curse than a blessing began to emerge in debates in the 1950s and 1960s about the economic problems of low and middle-income countries.[3] The term resource curse was first used by Richard Auty in 1993 to describe how countries rich in mineral resources were unable to use that wealth to boost their economies and how, counter-intuitively, these countries had lower economic growth than countries without an abundance of natural resources. An influential study by Jeffrey Sachs and Andrew Warner found a strong correlation between natural resource abundance and poor economic growth.

Venezuela is only the latest and worst example. The history is depressingly familiar.

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Government: the things we do together.

Wednesday, April 6th, 2016

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Barack Obama is fond of describing government this way.

As President Obama said the other day, those who start businesses succeed because of their individual initiative – their drive, hard work, and creativity. But there are critical actions we must take to support businesses and encourage new ones – that means we need the best infrastructure, a good education system, and affordable, domestic sources of clean energy. Those are investments we make not as individuals, but as Americans, and our nation benefits from them.

That was a reaction to Romney’s criticism of his silly comment.

I prefer the quote attributed to Washington.

“Government is not reason, it is not eloquence,—it is force! Like fire, it is a dangerous servant, and a fearful master; never for a moment should it be left to irresponsible action.”

Now, we see a new imposition.

The Department of Labor says its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts. Middle-income investors may be forced to look elsewhere for financial advice even as Team Obama is enabling a raft of new government-run competitors for retirement savings. This is no coincidence.

Labor’s new rule will start biting in January as the President is leaving office. Under the rule, financial firms advising workers moving money out of company 401(k) plans into Individual Retirement Accounts will have to follow the new higher standards. But Labor has already proposed waivers from the federal Erisa law so new state-run retirement plans don’t have the same regulatory burden as private employers do.

State run retirement plans. What could go wrong ? Well, we saw one version in Cyprus in 2013.

European leaders reached an agreement with Cyprus early on Monday morning that closes down the island’s second-largest bank and inflicts huge losses on wealthy savers.

Those with deposits of less than €100,000 (£85,000) will be spared, but those with more than €100,000 – many of them Russian – will lose billions of euros under draconian terms aimed at preventing the Mediterranean tax haven becoming the first country forced out of the single currency.

The deal is expected to wreak lasting damage on the Cypriot economy, which has grown reliant on offshore banking and Russian money. Analysts said Cyprus could see its economy contract by 10% or more in the years ahead.

Well, those Russian oligarchs deserved it. Maybe American companies attempting “inversion” deserve it too.

CEOs have learned to keep mum in the Obama era, lest their companies be punished like J.P. Morgan after Jamie Dimon criticized some parts of Dodd-Frank. So it’s worth noting the candid reaction after a new Treasury rule scuttled the merger between Pfizer Inc. and Allergan PLC.

The companies ended their $150 billion tie-up after Treasury Secretary Jack Lew issued new rules that made it harder for companies like Pfizer to move to Ireland to legally lower their taxes. Pfizer will have to pay Allergan a breakup fee of $150 million, though Allergan shares are still down more than $10 billion since the Treasury ambush.

I am not a slavish advocate of corporate tax avoidance but we are in an era of confiscation.

“If the rules can be changed arbitrarily and applied retroactively, how can any U.S. company engage in the long-term investment planning necessary to compete,” Mr. Read writes. “The new ‘rules’ show that there are no set rules. Political dogma is the only rule.”

He’s right, as every CEO we know will admit privately. This politicization has spread across most of the economy during the Obama years, as regulators rewrite longstanding interpretations of longstanding laws in order to achieve the policy goals they can’t or won’t negotiate with Congress. Telecoms, consumer finance, for-profit education, carbon energy, auto lending, auto-fuel economy, truck emissions, home mortgages, health care and so much more.

Now, they want everypne to “invest” in state run “retirement programs.” CalPERS has not distinguished itself, except perhaps in corruption.

After spending years dogged by unpaid debts, California labor leader Charles Valdes filed for bankruptcy in the 1990s—twice. At the same time, he held one of the most influential positions in the American financial system: chair of the investment committee for the California Public Employees’ Retirement System, or CalPERS, the nation’s largest pension fund for government workers. Valdes left the board in 2010 and now faces scrutiny for accepting gifts from another former board member, Alfred Villalobos—who, the state alleges, spent tens of thousands of dollars trying to influence how the fund invested its assets. Questioned by investigators about his dealings with Villalobos, Valdes invoked the Fifth Amendment 126 times.

Well, it is California where Hispanics, especially illegals, run the state.

Last month the board of California’s new “Secure Choice” retirement plan wrote to state legislators about their “exciting win” in Washington. They reported that employers enrolling workers in the new government-run plan “would have no liability or fiduciary duty for the plan.” Score! The California bureaucrats added that “we have been given the green light to auto-enroll workers into an Individual Retirement Account (IRA).”

What could go wrong ?

Unions and the march of robots.

Wednesday, March 30th, 2016

port
California has now decided to impose a a $15 per hour minimum wage on its remaining business economy.

Denial of consequences is an important part of left wing philosophy.

“California’s proposal would be the highest minimum wage we have seen in the United States, and because of California’s sheer size, it would cover the largest number of workers,” said Ken Jacobs, chairman of the UC Berkeley center. “This is a very big deal for low-wage workers in California, for their families and for their children.”

Implicit in all the assumptions is the belief that employers will not adjust by reducing the number of minimum wage employees they have.

The UC Berkeley estimate also includes some who earn slightly more than the lowest wage and stand to benefit from a ripple effect as businesses dole out raises to try to maintain a pay scale based on experience, Jacobs said.

If Brown’s plan passes, 5.6 million low-wage workers would earn $20 billion more in wages by 2023, according to the UC Berkeley analysis. It assumed no net jobs would be lost as businesses look to trim costs.

The experience in other places has not been positive.

Even a former chairman of President Obama’s Council of Economic Advisers, Alan Krueger, has cautioned recently that “a $15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences.”

Krueger is the economist whose “study” of the effect of minimum wage increases in fast food industry has been debunked as invalid.

But Card and Krueger’s conclusion is that there’s no effect, not that increases in the minimum wage increase employment as a general rule. “We believe that this research provides fairly compelling evidence that minimum-wage increases have no systematic effect on employment,” they write in their 1995 book, “Myth and Measurement: The New Economics of the Minimum Wage.” They also write, “On average, however, our findings suggest that employment remains unchanged, or sometimes rises slightly, as a result of increases in the minimum wage.” It would be fair for Hanauer to cite the individual studies showing an increase in employment, but to characterize Krueger and Card’s work on a whole as showing an increase in employment resulting from a minimum wage increase is inaccurate.

In less polite terms, it’s bunk ! Newer studies with better methods have shown That employment is reduced.

Second, the studies that focus on the least-skilled groups provide relatively overwhelming evidence of stronger disemployment effects for these groups.

Now, we come to the larger issue the entire “Blue Model” of employment and politics.

The teachers’ unions won a temporary victory to force non-members to pay “agency fees” involuntarily, a decision that resulted from the death of Antonin Scalia last month.

With the absence of the late Antonin Scalia’s reliably-conservative vote, labor unions clenched an unexpected Supreme Court victory on union fees for government workers.

With agency fees – and the structure of union dues – remaining intact, union leaders hailed the court’s affirmation but warned there could be further challenges ahead.

The union case is among a handful of key disputes in which Scalia’s vote was expected to tip the balance toward a result that favored conservatives.

Some non-union teachers in California sued over the fair share fees, claiming that the fees are unconstitutional and violate their freedom of speech and association.

That decision will probably stand until a new Justice is confirmed and a Hillary Clinton presidency would keep the matter going. What about the rest of the world ?

But in the larger context the public unions greatest enemy isn’t the ghost of Antonin Scalia but the onslaught of technology. Recently, the mighty International Longshore and Warehouse Union (ILWU) was forced to let giant robots handle cargo in the port of Los Angeles. “At one of the busiest shipping terminals in the U.S., more than two dozen giant red robots wheeled cargo containers along the docks on a recent morning, handing the boxes off to another set of androids gliding along long rows of stacked containers before smoothly setting the boxes down in precise spots,” wrote the Wall Street Journal. “‘We have to do it for productivity purposes, to stay relevant and to be able to service these large ships,’ said Peter Stone, a member of TraPac’s board.”

About ten years ago the Longshoreman’s union struck the port of Los Angeles to try to keep out GPS devices to locate containers.

Traditionally, clerks had climbed around containers to identify them and mark their location. Like Luddites in the 18th century, they attempted to keep their 80 jobs by paralyzing the worlds busiest port.

The union says that over 51 permanent positions have been lost to outsourcing in recent years — a claim that the Harbor Employers refutes. According to the Harbor Employers, those 51 individuals either “retired with full benefits, quit, or passed away during the past three years.”

It is unclear when the strike will end but the Port of LA is urging both sides to come to an agreement promptly for the sake of international commerce.

But the union says the workers are standing up to some of the world’s largest shipping lines to protect the future of American jobs in the industry. “We just reached the point where somebody had to stand-up and draw the line against outsourcing, because these companies will eventually take all the good jobs,”said Fageaux.

According to its website, the Port of Los Angles is responsible for 1.2 million jobs in California and 3.6 million jobs across the country.

No matter. Those 51 jobs were important !

Eventually, the union lost. Now new troubles are coming.

In the end, even those advantages proved insufficient to stop automation. There will be pressure to deploy more robots. The “TraPac site is one of only four cargo terminals in the U.S. using the technology. That is fewer automated terminals than there are at the Port of Rotterdam in the Netherlands alone.” The ILWU is fighting a rearguard action; its members are training on automated terminals “to ensure there’s a future for the workers”. And probably to keep alive the possibility of paralyzing the docks via strike by console operators.

None of this can disguise the fact is that the glory days of union crane jobs are over. The CEO of Carl’s Jr, a hamburger chain, predicts that fast food restaurants of the near-future will have no human employees. A special report in the New York Times says “the robots are coming to Wall Street.”

Within a decade … between a third and a half of the current employees in finance will lose their jobs to … automation software.

Already, CAT scans are read by radiologists in India. Radiologists who have no local credentialing and who are unknown. All X-rays now are digital and can be transmitted across the world.

For the poor the citizenship deal is votes in exchange for welfare or sinecures. For the financially better off it is campaign contributions in exchange for crony capitalist opportunities. The Friedrichs vs California Teachers Association is an example of the latter, with the Supreme Court unable to reject a transaction that is ultimately unsustainable.

Technology may have changed the debate around closed union shops, quotas, identity politics and mandatory minimum wages from one of ideology to economics. What’s the use of ideological policies, if they’re can’t deliver the goods? If the public employee’s unions can do no better at protecting their fiefdom than the ILWU, if immigrants from Mexico can find no employment because robots are doing all the work then what will the politicians promise?

Yes. What can they promise ?

The Transformation of Economics.

Tuesday, March 1st, 2016

A great piece in the Wall Street Journal today about what has happened to Economics and Economics education.

I took an Economics class in college in 1957 and it changed me to a Republican. My first vote was for Richard Nixon in 1960. My family was furious as they thought we were related to the Boston Kennedys and they had always been Democrats. I wonder if an Economics class would have that effect today?

And that political economy and my assessment of it has changed over a career spanning more than half a century. Here are five developments I would emphasize:

I agree with his appraisal.

1.• Diminishing returns to research. A core economic principle is the Law of Diminishing Returns. If you add more resources, such as labor, to fixed quantities of another resource, such as land, output eventually rises by smaller and smaller amounts. That applies—with a vengeance—to academic research. Teaching loads have fallen dramatically (although the Education Department, which probably can tell you how many Hispanic female anthropologists there are teaching in Arkansas, does not publish regular teaching-load statistics), ostensibly to allow more research. But the 50th paper on a topic seldom adds as much understanding as the first or second.

This has been characteristic of Medicine, as well as other academic subjects.

Emory University’s Mark Bauerlein once showed that scholarly papers on Shakespeare averaged about 1,000 a year—three a day. Who reads them? How much does a typical paper add at the margin to the insights that Shakespeare gave us 400 years ago?

That isn’t he has shown.

The attitude touches the President’s favorite pastime. Tevi Troy reported in Commentary how much Obama enjoys television, particularly SportsCenter and the middlebrow series Homeland and Mad Men. The New York Times added Breaking Bad and The Wire in its article “Obama’s TV Picks: Anything Edgy, with Hints of Reality,” and while it warned of the foolishness of “psychoanalyzing” a president based on “the books he reads or the music he listens to or the television shows he watches,” the story mentions not a single book. One would expect Marxists, feminists, queer theorists, post-colonialists, anti-imperialists, and media theorists to chide Obama for his bourgeois, masculinist taste, but as far as I know they have remained silent.

Obama’s taste runs more to sports and rap music.

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Trump and China

Monday, February 15th, 2016

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Trump has, famously, gone after China on its trade policy.

In January 2000, President Bill Clinton boldly promised China’s inclusion in the World Trade Organization (WTO) “is a good deal for America. Our products will gain better access to China’s market, and every sector from agriculture, to telecommunications, to automobiles. But China gains no new market access to the United States.” None of what President Clinton promised came true. Since China joined the WTO, Americans have witnessed the closure of more than 50,000 factories and the loss of tens of millions of jobs. It was not a good deal for America then and it’s a bad deal now. It is a typical example of how politicians in Washington have failed our country.

There is an interesting analysis of China’s stumbling economy in the Observer today.

Here is a top ten guide for the perplexed.

Central Planning: Central planning, central planning. The history of the abject failure the Soviet Union’s five-year plans should tell you everything. Command and control economies that report to one man (in a nation of 1.3 billion people) are doomed from the start. Top down economic decisions often look bold and start out highly stimulative, but then degenerate into inefficiency, waste, politics and fraud.

Political Corruption: As the command and control economy generates liquidity, the demand and direction of the distributed capital becomes a political tussle. Decisions on how much steel, cement, coal, glass solar panels, high speed trains and shopping malls—in short everything—are not done in China as a cost benefit analysis by risk capital, a job difficult enough in itself. (Witness the capitalist economies’ booms and busts.) In China, this liquidity was allocated by political muscle, massive bribery and kickbacks, rather than economic justifications.

Basic Gangsterism: Counterfeiting, knockoffs, copyright infringement, theft of intellectual property – these were a part of the booster rockets of China’s economic rise. It was all supposed to go away after China joined the WTO in 2001. It didn’t. It just became more institutionalized. Foreign companies needed Chinese “partners” in auto production, healthcare and technology. These “partners” crippled the potential productivity of the investments and led to frequent disputes and even more corruption… as in the GlaxoSmithKline scandals.

There are a total of nine reasons, many addressed in Trump’s piece above.

Now, the economy of China may be in free fall.

Chinese central bank governor Zhou Xiaochuan has accused “speculative forces” of targeting the country’s currency, the yuan.
He said there was no reason for the yuan to keep depreciating in value and that China would not let international speculators dominate market sentiment.

Mr Zhou’s remarks come as Chinese markets prepare to reopen on Monday after a week-long New Year holiday.
Efforts to defend the yuan have eroded China’s foreign currency reserves.

Another reason quoted by the Observer is something I have previously posted on.

Jack Lew, speaking at the Brookings Institution in July, confidently assured that Americans were immune from weakening markets in China.

“I will say that China’s markets still are pretty much separated from world markets,” the secretary of Treasury, said. “They’re, obviously, moving towards being more integrated, but right now they’re not.”

I guess that statement is “inoperative” right now.

What actually happened is that China’s stock market began as a Potemkin project to assure the world of Beijing’s strength. Chinese investors knew the government would be propping up a mere facade; that the worse China’s economy got, the more the Communist Party would paint the facade. Harlan writes:

Let’s take a moment to state clearly that the stock market and the “real economy,” particularly in China, don’t always dance together. Until 2013, China’s major indexes were among the poorest-performing — which made almost as little sense as what happened next.

China is not a “transparent economy.”

Reckless Gamblers: How did China’s debt-to-GDP ratio go to 240% from 160% in nine years? How are nonperforming bank loans (if honestly tallied) hovering around 20 percent? There is a recklessness in early stage wealth. It happened in England in the 18th century as exemplified by the South Sea’s fraud and a hundred frauds like it. The recent Sino-Soviet forest stock fraud is an exact mirror. Rapid wealth produces intoxicated investors prone to scams. Remember how the Earl of Grantham in Downton Abby invested a fortune in a fraudulent American railroad. I wonder if there is a Chinese translation of Trollope’s “The Way We Live Now”?

China has a small very rich segment of their people who are giddy with riches. They have been foolish with their investments.

China became a binge investor in absurd countries and silly projects. As if to poke the U.S (its largest single-country trading partner) in the eye, China sidled up to Venezuela of all places. Instead of buying oil on the open market, they went deep into infrastructure projects, loans and even endorsed the psychotic foreign policy rantings of Hugo Chavez. No rational government, unless intoxicated by its economic prowess, would do that. The China Syndrome was also applied to Sudan, Zambia, Angola and Nigeria. Look at the bankrupt failed resort in the Bahamas, Baha Mar, if you want to see what “binge capital” looks like.

Trump may be correct but it may not matter.