This article was last updated on April 16, 2022
Skewer the new guy. Quarter the big cheese. Burn that pinko commie socialist at the stake. It’s all his fault; we would be so much better without him. If we could just get rid of this incompetent idiot, the entire nation would be so much better, out of the red and in the black.
Really? That’s your diagnosis, Mr. Armchair General, Mr. Monday Morning Quarterback? The guy standing in front of you, the most visible guy in the entire country is entirely to blame for the credit rating downgrade, the debt ceiling debacle and the 2008 financial crisis? Heck, he caused the BP oil spill. (Wikipedia) There isn’t any direct proof, but he may be the reason pizza delivery has gone from 30 minutes or it’s free to 40 minutes or it’s free to you’ll get it when we deliver it. (Wikipedia) Don’t get me started on global warming and Snookie’s weight loss.
Economy vs Politics: 10 years vs 4 years
Okay, I’m trying to be funny. However in reading some of the accusations lobbed at Obama, I question the lobber’s ability to connect to dots to the lobbee. Years ago, in a university course on macroeconomics, I was introduced to the bizarre partnership between politics and the economy. The economy, it was said, works in 10 year cycles; implement a policy, you need to wait 10 years to see it bear fruit. Politics on the other hand works in a 4 year cycle and those who seek power promise what in the short run may lead to their being elected as opposed to what may be best for everyone. There is this on-going conflict between doing what’s right for the economy and doing what’s right to keep your job. The majority of the electorate are concerned with their own situation right now with little regard for what’s coming down the road so politicians are catering to them and their short-term vision of what’s right.
A comment on one of my blog postings brought up this item which made a number of waves when it hit the headlines a few months ago: GE paid no income tax in 2010 after making a profit of five billion dollars. True or not true?
Megan McArdle, a senior editor for The Atlantic who writes about business and economics, penned an article for the magazine discussing this. (Did GE Really Pay No U.S. Taxes in 2010?) After mentioning how various writers were outraged by this state of affairs, she points out that any company has the right to minimize its tax burden while complying with the law. She goes on to present the question as to whether any of the writers who complained about GE had refused any of the deductions they were entitled to by law. Now note the keyword in all this: law. GE is not doing anything illegal. Maybe the statement that a company which supposedly made five billion dollars then turned around and paid no income tax is difficult to swallow but is the problem that GE is doing something against the law or GE is just a “bad company”?
Here’s the root of the problem that the cursory look and the subsequent anger has missed. The system has set up tax laws which allow GE to do what it’s doing. Can you or I or anybody blame them for doing what we collectively allow them to do? The fault isn’t in GE; the fault is in the system. Heck, if I or my accountant finds a tax deduction which favours my financial situation, do you think I’m not going to take it? Am I that altruistic? Am I that much of an idiot? Change the system; I’ll pay my taxes. Don’t change the system; I’ll take my deductions.
The Conservatives: Less Government
Over and over again, the right repeats with a glazed eye look that America needs less government. Instead of focusing on size, has anybody considered better government? When I get into an elevator, there is a certificate up on the wall which states when the device was last inspected and by whom. Knowing it’s there gives me a warm fuzzy feeling that I am not going to plummet into the basement. Government involvement is good.
BP Oil Spill
2010 saw the BP oil spill in the Gulf considered the largest accidental marine oil spill in the history of the petroleum industry. The story goes that BP, amongst other oil companies, lobbied the U.S. government to stop regulation which would have required certain safety measures. These companies felt such measures were onerous to their operations or as restated by reporters, onerous to their bottom lines. From what I understand, BP was not obliged to shell out $500,000 for a safety valve. Such a valve would have apparently prevented the oil from leaking as it did. When the platform sank and the pipe disconnected from the rig itself, this safety valve would have kicked in and sealed off the pipe at the seabed.
Okay, the joke is now on BP. The company has had to shell out billions of dollars because it didn’t spend half a million dollars. But the point is that regulations, if they had been in place, would have stopped this from ever happening. Government involvement is good.
Seatbelts reduce injury and death in car accidents. We all accept it now, but decades ago, this seemed like an infringement of our rights. Many moons ago, I was driving with my brother as a passenger in the front seat. I suggested he put on his safety belt. He started mouthing off about how nobody was going to tell him what to do and he didn’t care if the police tried to give him a ticket or not. I slammed on the brakes. My brother slide forward on the seat but managed to get his arm up on the dashboard to stop himself from going head first into the windshield. “What the F did you do that for?” he yelled at me. I paused, looked at him for a sec then said, “If you had been wearing your seatbelt, that wouldn’t have happened.” Yes, he nearly killed me but I did make my point. Statistically, wearing a safety belt means less injury and fewer deaths. Government involvement is good.
Subprime Mortgage Crisis
In the United States, financial institutions were able to set up lending practices that emphasized profit over prudence. Loans were being granted to people who would have been otherwise deemed incapable of repaying said loan. Terms were given that now seem to have only fuelled the precariousness of the loan. While many factors come into play to fully explain the complexity of the entire crisis, the rather simple reason is that a whole lot of people failed to pay back their loans, whether it is a mortgage on a house or some other form of debt. The entire system, in the quest for profit, failed to take into account the possibility of debtors being unable to repay their debt. Like a pyramid scheme, the entire house of cards fell over. Greater and greater risks were being taken in search for greater and greater profits.
Don’t believe me? Need more proof? See the movies Inside Job and Client 9: The Rise and Fall of Eliot Spitzer. If years ago, the government had not deregulated the financial industry, if the government had done a better job of overseeing the banks, this financial meltdown never would have happened. Sidebar: Canada had a stricter regulation of its banking system which meant its financial institutions were never allowed to do the wild, unsecured loans its American counterparts did. The Canadian financial sector never collapsed like the American financial sector. Government involvement is good.
Don’t Tell Me What To Do
An American was telling me that he didn’t want regulations; he wanted less government. He very much wanted to be free. I told this person that we can all agree that a speed limit of 60 mph or 100 km is a reasonable restriction on our driving. Such a rule can save lives. The American nodded his head and agreed with me. I then added that such a rule does not restrict where we can go; it only tells us how fast we can go. The American became thoughtful.
I continued by explaining that the government imposes a speed limit because going faster is more dangerous and statistics prove that with speed, more people lose their lives. Nevertheless, the government is not trying to tell us where we can drive. It is not telling us where we can go. It is only trying to tell us the safest way of getting to where we have decided to go. The rule about the speed limit is for safety because the government actually wants us to get to where we are going. It imposes these rules for our own collective good.
The American admitted that I made a good point; he had never looked at regulations that way saying that this made sense. How much sense? A study proved that the lifting of the federal 55 mph speed limit in 1995 was responsible for 12,545 deaths between 1995 and 2005. (see links below)
Rules are good
When I was a boy, my father showed me the proper way of using a table saw. Explaining how a rotating saw blade can sometimes grab a piece of wood, he showed how in a twinkling of an eye a finger can be easily drawn into the whirling blade and be amputated. Proper procedure dictated guiding a piece of wood not with one’s hand, but with another piece of wood. If the piece which is being cut ever got pinched by the saw blade, instead of one’s hand being pulled into the blade, the piece of wood being used to guide the wood being cut would be drawn in.
Rules are there to help us, to protect us. There are not there to take away freedom; unless, of course, we want the freedom to maim or kill ourselves. Rules have been put in place by others who have gone before us who have observed phenomenon, analysed the results, figured out the why and determined what’s necessary to avoid the bad.
If BP had been forced through regulation to purchase and install the safety valve, we wouldn’t have had the Gulf Oil Spill. If financial institutions were forced through regulation to only loan money to people who could realistically be able to repay it, we would not have had the subprime mortgage crisis. I am not advocating for more government but I do think some well thought out rules would not hurt. When I get on an elevator, when I turn onto the highway, I do not necessarily feel apprehensive. I think the rules in place are helping me and statistically doing their best to ensure that I get safely to the dinner table that evening.
We could go on and on and on. The point is that politics is a game and the goal of the game is to win. The goal of economics is to have everybody win. We ourselves, the electorate, are simple, narrow minded and focused on the short-term. We tend to not see the big picture.
Obama is not a bad man. He isn’t even the boogeyman. But running a country is really, really, really complicated and it’s even more complicated when you think about trying to get everybody to agree to the same thing at the same time and get them to all pull in the same direction. Whether it’s the electorate or it’s the politicians, everybody has their own ideas of what’s right but I’m afraid that the majority of these people have a poor grasp of the problems and their causes. Consequently their proposed solutions are ofttimes ill-conceived, poorly thought out and maybe just plain stupid. I am reminded of a blogger at Open Salon called Cranky Cuss who has written in his bio:
My motto: The conventional wisdom has too much convention, not enough wisdom.
Corollary: Even Einstein was wrong sometimes, and you’re not Einstein.
Yes, Einstein. That is a reminder about this election season of just how little Einstein we’ll get and how much Forrest Gump.
In the spring of 2009, during what appeared to be the beginnings of a swine-flu epidemic, Bachmann said, “I find it interesting that it was back in the nineteen-seventies that the swine flu broke out then under another Democrat President, Jimmy Carter. And I’m not blaming this on President Obama—I just think it’s an interesting coincidence.” (New Yorker, Aug 14/2011: Leap of Faith by Ryan Lizza)
The media have been portraying [Rick Perry] as something verging on a loose cannon. One example was his response to a question about whether President Obama loves his country. Perry said the questioner would have to ask Obama–which left the impression that Perry has doubts about the president’s patriotism. (US Politics, Aug 18/2011: Rick Perry’s Gaffe Problem by Kenneth T. Walsh)
As the campaigning for the election in 2012 ramps up, various contenders to the throne are planting the seeds of doubt about Obama. Will he be a one term president? I note that with any crop, the planting of seeds is always accompanied by fertiliser and I can certainly smell the manure.
Wikipedia: Deepwater Horizon oil spill
The Deepwater Horizon oil spill (also referred to as the BP oil spill, the Gulf of Mexico oil spill, the BP oil disaster, or the Macondo blowout) is an oil spill in the Gulf of Mexico which flowed for three months in 2010. It is the largest accidental marine oil spill in the history of the petroleum industry.
Wikipedia: Domino’s Pizza: 30-minute guarantee
The guarantee was dropped [in 1993] because of the “public perception of reckless driving and irresponsibility.”
The Atlantic – May 29/2011
Did GE Really Pay No U.S. Taxes in 2010? by Megan McArdle
Last week, the New York Times published a rather indignant article on how GE paid no US taxes in 2010 despite earning $5.1 billion in US income; “In fact,” says the New York Times, “GE claimed a tax benefit of $3.2 billion”.
Wikipedia: Seat belt legislation
Studies of accident outcomes suggest that fatality rates among car occupants are reduced by between 30 and 50 per cent if seat belts are worn. The US National Highway Traffic Safety Administration estimates that death risks for a driver wearing a lap-shoulder seat belt are reducing by 48 per cent. The same study indicated that in 2007, an estimated 15 147 lives were saved by seat belts in the United States and that, if seat belt use were increased to 100 per cent an additional 5024 lives would have been saved. An earlier statistical analysis by the U.S. National Highway Traffic Safety Administration (NHTSA) claimed that seat belts save over 10,000 lives every year in the US.
Freakonomics – April 2/2010
Life (and Death) in the Fast Lane by Eric A. Morris
According to a recent paper by Lee S. Friedman, Donald Hedeker, and Elihu D. Richter, the lifting of the federal 55 mph speed limit in 1995 was responsible for 12,545 deaths between 1995 and 2005. That’s about 45 percent more American fatalities than we have suffered in 9/11, Iraq and Afghanistan put together.
American Journal of Public Health
Long-Term Effects of Repealing the National Maximum Speed Limit in the United States
by Lee S. Friedman, PhD, Donald Hedeker, PhD and Elihu D. Richter, MD
Objectives. We examined the long-term effects of the 1995 repeal of federal speed limit controls on road fatalities and injuries in fatal crashes.
Results. We found a 3.2% increase in road fatalities attributable to the raised speed limits on all road types in the United States. The highest increases were on rural interstates (9.1%) and urban interstates (4.0%). We estimated that 12,545 deaths and 36,583 injuries in fatal crashes were attributable to increases in speed limits across the United States.
Conclusions. Reduced speed limits and improved enforcement with speed camera networks could immediately reduce speeds and save lives, in addition to reducing gas consumption, cutting emissions of air pollutants, saving valuable years of productivity, and reducing the cost of motor vehicle crashes.
Huffington Post – Aug 18/2011
Rick Perry Coverage Gets Sexy: Ad Seeks Dirt, Others Press Porn Past by Jason Linkens
Rumours swirling around the Texas governor about liasons with hookers and an investment in a movie company distributing porn.
Open Salon – Aug 16/2011
Rick Perry’s Texas Leaves Much to be Desired by Ryan Ebersole
Not surprisingly, Perry clings to abstinence-only sexual education for Texas students. Despite evidence to the contrary, Perry claims that “abstinence works,” citing his “personal life” as evidence. By 2009, over 94 percent of Texas school districts had adopted abstinence-only sexual education. This education included curriculum emphasizing that birth control is ineffective, contrary to the facts. These programs combine an overemphasis on sexually transmitted diseases and death with Christian views of morality. Many public school districts use handouts containing Bible verses as part of their sexual education.
What are the results? Texas has the third highest teen pregnancy rate in the nation. In fact, pregnancy rates under Perry have skyrocketed, and are now over 50 percent higher than the national average. Even more alarming: Texas has the highest teen repeat pregnancy rate as well as the third highest rate of youths with HIV.
[Politicians are well known for fudging the facts but even if half of what Mr. Ebersole has said is true, is Rick Perry not lying?]
my blog – Aug 26/2010
We always come back to Hitler
Hitler is the embodiment of evil. Nazism probably evokes in all of us a visceral reaction to the horrors of World War II. Anyone who has any knowledge of WW II reacts negatively to any mention of this. Consequently, making the association between Hitler and anybody, between Nazism and any proposed policy or idea is a sure fire way of making a connection in the mind of the public to something horrible; so horrible, it must be stopped at any cost. At that point, rational debate stops; a search for the facts stops; the quest for the truth stops and we all hunker down in our tightly held beliefs only to periodically emerge to point an accusatory finger at our opponents and yell some obscenity.
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