A Cold Detroit

Today's economic vocabulary lesson is about two terms or phrases that every good economist should know;

Brain drain and capital flight.

As you know your Captain left Minnesota and he left for two reasons. He left because of the harsh winters (15% the reason) and left because of Minnesota's knack for being consistently liberal (85%). He would have liked to have stayed, his friends were there, he had a nice little bachelor pad, but in short the overall environment was becoming too hostile and too parasitic for him to tolerate. He suffered bouts of depression and literally felt trapped as where he really wanted to live (out West) just didn't have the job base the Twin Cities did.

Now, leftists can go ahead and complain and say I'm a cry baby or "good-riddance," but none of that changes the fact that I did indeed leave because the political climate was too liberal. That was my choice and those were my reasons. You have to deal with that.

But the left may want to hold their criticisms and mockery for just a little bit, because as this short little piece points out, something is wrong with Minnesota. Its housing market is not recovering as fast as the rest of the country. Matter of fact, it's ranking with states like California, Michigan, Nevada and Florida. All of which were notorious for having property bubbles, unlike Minnesota.


Now people will speculate and opine and theorize, and if you are on the left you will give no real serious consideration as to the genuine causes of this problem. You'll simply blame the Tea Party or George Bush or Pawlenty or what have you. But, again, why you might want to hold your criticism and mockery of me, I have an uncanny track record of being right on all things economic. So maybe you could mute the "hey hey, ho ho, capitalism has got to go" sophomorities and listen, because I may just be right once again.

Understand Minnesota and Minnesotans PRIDE themselves off of having a disproportionate amount of fortune 500 employers. They boast 3M, General Mills, Best Buy, etc. etc. And in the olden days when you could go to the U of MN, major in chemistry, pick up a job at Medtronic and all would be well, that was fine. And although Minnesota has more or less consistently voted democrat due to its Scandinavian heritage, back then people abided by the honor system. You didn't go on welfare unless you needed it. Education WAS key to your success and we invested in it heavily. You had the church or your family take care of you. And a stern amount of Norwegian shame was brought upon you if you stayed on the dole too long. And everything work until (as with what happens with all nice socialist utopias) not so honorable people started taking advantage of the system.

People moved in from other states where their welfare benefits were not so generous. The next generation decided they would get an education, but not in things 3M, General Mills or Polaris needed. They voted for more and more social programs and touchy feel good stuff. They built atrocious buildings for government housing such as Cedar Riverside and other eyesores. The cities decided to start spending more money on non-essential items to the point today they were about to spend $50,000 per drinking fountain to promote "art." The U of MN no longer served the students and jacked up tuition much higher than inflation. And the students might have complained, but they were told it was evil republicans that were cutting their spending. But it didn't matter anyway because Jimmy was just going to major in sociology which didn't cost as much as a degree in "computer science." Besides, that "math stuff" was for Asian kids, not good ole suburbanites from Bloomington and Eden Prairie. And mercy me almighty, did we not invest in the "chilllldreeeeen." Always more money for public schools. Never enough. But that was good because they were our future. They were going to become future teachers to teach future children who would in turn also become future teachers to teach future children, because children were the future and apparently teaching held merit unto itself and never needed to be translated into genuine economic production.

The ultimate result, Minnesota government spending went from 6% GSP to 12%. And even that hides the true costs as municipalities regularly increased property taxes at multiples of the inflation rate (your Captain had the honor of having his property taxes increase by 300% in 10 years in Minneapolis). But the larger point is that public sector grew at the expense of the private sector.

Now, normally your Captain would go on and cite this as the cause of the lack of economic growth and the decline in property prices. But that would be only half fair. For you have to understand the public sector pulls from the same pool of people for its employees. And what the Captain is finding out as he gets older and pulls more data, it isn't necessarily the public sector that is the core of the problem, it's the quality of the people. After all, whether you work in the public sector or the private sector, this still is a democracy. And Minnesotans, dutifully and regularly voting in higher taxes, more government spending and with the help of the always-willing-to-indoctrinate University of Minnesota, a very anti-corporation, anti-American, anti-capitalism psychology. It didn't matter where you worked. Minnesotans with regular consistency kept voting to shoot themselves in the foot.

Of course, if you're pulling from the same pool, that meant the private sector was also as incompetent and corrupt and the public sector. And mercy was it.

Yeah, US Bank might have hired you back in 1965 (when it was First Bank) if you graduated from the U of MN. But by the 1990's not ONE investment banking firm would consider you unless you went to an Ivy League school. Sure 3M might have hired some local chemical engineering majors in 1968, but not now. Most of their growth and expansion has been done outside Minnesota. And of course you could land a job at the second largest private firm in the country, Cargill if your name was Smith. But now, unless you are a Cargill or know a Cargill or know somebody who works at Cargill, good luck. In one generation, Minnesotan employers had gone from hiring people based on skill to hiring people based on connections.

But forget nepotism and cronyism. Let's just assume there still are companies out there who just want to hire a good ole Joe and don't care about who they are or who they know. Certainly the average Joe working his way out of lower-middle income Fridley stands a shot at getting a job was Wells Fargo downtown. right?

No no no.

You see, we can't be hasty. We can't just "hire somebody." We need to follow rules. Procedures. Policy.

We need HR.

Though not unique to Minnesota, HR has played a vital role in ensuring the average Joes and Janes of Minnesota don't make it. The connected networked ones can simply by-pass HR. But no you middle income types from Richfield! Oh no. No, you have to go and answer stupid questions that would never have been conceived of back in 1957, AND coincidentally have no right answer and have proven not to have any predictive value in you future performance as an employee (though they have proven to give power trips to power-hungry 20 somethings who found accounting and finance to be too difficult of a business degree to attain).

And even then the decay within the private sector isn't fully accounted for. And that's the precise word to use. Just general "decay."

For as the quality and caliber of Minnesotans tanked, is it any surprise you would have amoral people not only working in the ranks of corporate America, but soaring through those ranks? And gee, what industry is historically prone to attract scammers and schemers who are always looking for a short cut and may have no moral qualms about the economic ramifications of their actions? Could it be...hmmmmm..... BANKING?????

Hate me if you will.

Think I'm arrogant and cocky (which I am).

Call me every name in the book.

There is one simple fact, conservatives and liberals, democrats and republicans, Minnesotans and non-Minnesotans all have to accept about me;

If I was in charge of the banks in Minnesota (if not the nation)

Minnesota (and the nation)

would

not

have

the

housing

and

economic

problems

it

has

today.

You wouldn't be facing 9% unemployment, perpetually dropping housing prices and a stagnant economy. You wouldn't have your property taxes jacked up 300% in a decade. You wouldn't have had your tuition jacked up 10,000% since last week. But of course, me theorizing about what I could have done if "I were king" is a pointless exercise. I was never in such a position of power, I wasn't even close to being in an influential position of power. I too was the average Joe from Fridley. So what's a guy to do? The only thing he can do.

Leave.

But here is where the point comes full circle, and permit me just another few ounces of arrogance.

Is it a good thing one of the few guys who could have stopped the housing crash in the state is leaving? I know some of you are happy I'm leaving. These are the same people who cannot explain why we just can't "create more government jobs" to get Minnesota out of its economic malaise. But politics aside, is it in the best long term interests of Minnesota to have people like me leave? And the corrupt bosses who are to blame for the crash stay (because they know to work the system).

The reason I ask is it's not just me. It's others.

Anecdotally, I know many friends that have left.

Nick, arguably the best cell phone salesman you could ever meet. Hard working, honest. Not only would he have made a great employee (and he did), he would have made a great husband. He's in Kansas now.

Chad, another friend of mine who took its IT genius to North Carolina and never looked back. Brought his wife with him and they now have not just a nice house, but a nice computer business.

Dustin, hard working statistician. Got fed up trying to find reliable employment here. Headed again to Kansas.

And forget these guys. I know tons of people, all in their 20's and 30's who just want out of Minnesota. They can't find jobs, and if they did find jobs, they run into the corrupt, inefficient, bureaucratic BS that didn't exist in Minnesota in the 50's and 60's.

But all my anecdotes are irrelevant. If you want to look at the state demographers data or census data, look and see how many of the youth are sticking around. And we're not talking welfare recipient youth who are just going to stay around, spit out some future welfare collecting youth and demand more taxpayer money for the "chillllldreeeen." We're talking the GENUINE economic future of Minnesota. The STEM-educated 20 and 30 somethings. The ones who will work. The ones with purchasing power. The ones who, even without a degree, just want to work. And the veritable geniuses who could have prevented things like economic collapses. They're leaving (you look up the data, I'm too tired right now).

Of course the stewards of Minnesota have failed to keep the state up as a viable economic entity. And while at the age of 18-22, we may have been sold on how "cool" it was to go to "Uptown" or how awesome it was to attend "the U," in the end when we want to work, produce something of value, buy a house and not be taxed every step along the way let alone embark on the impossible lottery of maybe catching the HR representative in a charitable mood or bumping into Tad Piper, why on god's green earth would we stay in Minnesota?

And now you understand our two vocabulary terms of today.

Brain drain is when your smartest people leave. Either because their employment prospects are too low, or they know that at the income they'd make you tax them too high, they leave. And they take not only their production with them, but their spending, their tax base dollars and (quite honestly) their exemplary law-abiding citizen behavior.

Capital flight is when money flees out of your country, state or city in search of better returns. 3M's CEO may have said something about this, but I'm sure you MPR folk chalked this up to him just being an "evil greedy capitalist" and cannot understand why 3M has expanded overseas and not here.

In both cases, you now have the key to understanding why housing prices in Minnesota are more reflective of Detroit and Las Vegas than it has been in the past.

You're losing your producers. You're losing your contributing members of society.

And how that translates economically (and I'm really trying to make this simple so you understand) is that you have less dollars chasing after homes which drives their prices down (of course the banks of Minnesota flooding your market with housing didn't help either, but eh, don't listen to that stupid kid from a non-Ivy league school).

In the end I fear we can look to Detroit as the ultimate outcome for Minneapolis. You would think the citizens would realize how anti-business democrats, anti-corporate policies and suffocating EPA and environmental regulations soon enough to prevent the utter destruction of a town, but apparently not. Apparently the propaganda of socialism tastes so sweet and is so intoxicating you are completely oblivious to it destroying your neighborhood around you. You are completely oblivious to how it destroys your life and your family. And it is so powerful, you can't understand how anti-business, anti-capitalism, anti-individual policies suffocate, if not, eliminate growth.

But for some people that connection is very clear. And those are the people with the brains and the capital. Those are the producers and innovators. Those are the entrepreneurs or just plain ole hard workers who are willing to support themselves and produce something of value. And for all you Minnesotans who are those people, do yourself a favor.

Get the hell out before it becomes a cold Detroit.

And of course, enjoy the decline!

You Go Califnornia

You just can't make it up. How do you people elect these morons?

I guess a better question is how do you people in California not connect this to your double digit unemployment rate and general economic decay?

Because I'm Not Larry Ellingson's Son

Remember, I came up with a very possible and real way to make trillions of dollars.

But who gets financing and for what frivolous and stupid venture?

Klaus Kinski

I knew it was him.

I was watching "A Few Dollars More" last night over a bottle of Rumpleminze. The hunchback in the movie had a very unique look to him and then I realized who it was.

Klaus Kinski.

Very interesting background.

On a related note, you youth (heck, my age) would recognize a very familiar score from the original "Red Dead Revolver" the theme song of which comes from a movie Klaus was the hero in.



I guess the 70's did produce something.

The Granny State

Well, when you bring up one generation so poorly, what did you think was going to happen when they started bringing up the next generation?

"I Didn't Think Their Lies Could Win"

Well, when you have such an ignorant and spoiled society, yes their lies can win.

Hat tip.

I'm Slamming the Teachers, Not the Kids

Teachers unions very much like taking any criticism directed at them and deflecting it to the children. That if you slam the teachers or the teacher's union for being incompetent, overpriced and indoctrinists, then you are by default a child hater and against education. It is cowardice at its worst and is why I make this clear distinction before I rip apart "education majors" and "teachers" for what they (typically, but not all of them) are.

Just more proof of what your Captain has been telling you this entire time. The reason I'm so adamant about pointing this out or if it seems I have an vendetta against teachers, it's because I remember these people when they were going to college. I remember the types of people, from my generation, who are now teachers. You don't want them teaching your kids. They were the ones who readily admitted they were too lazy to pursue real, hard, STEM studies. They partied, they drank, and they usually didn't bother working to put themselves through college. And without fail if you asked them why they were going into education "3 months off" was regularly cited as the number one reason.

Now of course, it takes them a nano-second to grab a kid and use it as a shield when fiscally sane people start to question whether we're getting a bang for our taxpayer buck. Oh, then they become really altruistic real quick.

I just wonder if others are able to discern between teachers and children or if they are not going to appreciate my marksmanship in who I'm precisely targeting.

Why are Economists Leftists?

I didn't know this. I always thought if you studied economics, then you would be a conservative or libertarian. And the only way you could be a "leftist economist" is if you willfully choose to ignore empirical data and shill yourself out like Krugman to capitalize on a market of ignorant people who want economic rationales as to why socialism works.

Canadian Intervention, California Is a Great Place, Welcome to Spinsterhood, and More!

I wish we had this.

California is in such great shape this is the worst of their problems.

Another aging female Gen-Xer realizing there might have been a consequence to playing mind games with the boys in her teens and 20's.

The 60's are to blame for today's economic problems, not big oil or George Bush.

Choices have consequences, even for liberals!

And when you destroy the division of labor, what do you think happens to production?

Finally, scientists prove (of all things) the bleeping sun causes global warming. Who would have thought?

And Bachmann Blows It

ug.

Name the Captain's New Sidekick!

Stopped in at Hill City, SD today. The great thing about the general Black Hill's area in late August is the vendors are trying to unload all their Sturgis crap they couldn't sell during the rally. Ergo something that was $50 (like a leather vest) is now $15.

Then I saw this little guy;







Now keep in mind, a fair amount of motorcycle riders don their motorcycles with a stuffed buffalo as kind of a "guardian angel" sort of thing to protect you from spills, crashes, teen age girls and their 30-40 something soccer moms yapping on their cell phones while obliviously driving their SUV in and out of three lanes of traffic.

The only question is what do we name this little shaver?

He is a FULLY DEVELOPED buffalo, he does have FOUR LEGS and a tail, they just seem like stumps. He's just a little small, that's all.

Any suggestions for the name?

Thank You Sidewinder77

Looked at my stats and said, "what in Hades is going on here?"


Many thanks to Sidewinder77 for posting to reddit.

This is a reminder that the Captain fully endorses his Lieutenants to forward, mention, e-mail, post to Reddit, etc., any of his articles, postings, books or papers. And even though Reddit is basically more or less a 20 something leftist site, any traffic is good traffic.

Plus, how else is the Captain going to attain Drudgereport-like status so he can sit on a beach and write far far away with Jennifer Aniston serving him Rumpleminze as we converse with each other;

Captain - "Dear, isn't it wonderful living off of my wise investments into Aussie dollars?"

Jennifer - "Yes, my sexy, libertarian stud muffin, it is. I just find your ability to predict and yet at the same time, enjoy the decline enamoring. Another shot of Rumpie?"

Captain - "Why yes my darling. Wait, isn't that the same bikini you wore last week? And how do you manage to walk in the sand with heels?"

Jennifer - "Oh, I practiced before you picked me up in your personal F-18 Super Hornet. I think I have it down. Can I pull out the 60" LCD screen, the surround sound stereo system onto the beach, rig it all up and throw Kelly's Heroes in the DVD for you?"

Captain - "Oh sure, what the heck."

My Tutoring Is Not SWPL

I like the reference to "SWPL" tutoring (warning, crass language, but good link)

When I taught college econ I also ran the tutoring lab for the college. I was not SWPL. I was blunt and direct alpha.

Of course that offended the soft, eggshell-strong sensibilities of the kiddies who "didn't like math" and "didn't need to know none of that stuff" because they were all going to become great chefs or travel agents or entertainers or poets.

This was of course when I still cared about educating the kiddies and improving their futures. Of course, after getting lectured by management for making tests too hard and not passing the 89 out of 92 students who plagiarized their term papers, I learned to give up on that and just shut up, pass them, incorporate Halo tournaments into the curriculum, collect a pay check and let real life teach the kids the real lessons for me in the future.

The good news is that today I do private tutoring, primarily MBA students who (laughably) think it will improve their chances of finding gainful employment. But it's much nicer to tutor adults who care about their education than 18 year old "adults" who are still effectively children.

Recession Medicine

HAR!!!

The Economic Lesson of the Day

I shall make this as short and simple as possible, because it really is that simple.

Labor force participation shows the percent of the population that CAN work, that actually DOES.

You will notice the dramatic increase after about 1968 which is 100% due (look it up, please dont' question me) to women entering the work force.

You will then see the dramatic decline since this latest recession began which is about 95% due to men leaving the workforce (look it up, please don't question me).

Ergo, I have this simple question to ask.

If more and more women entered the work force, this should then increase the economic growth of the country (which it did). If economic growth increased, then government revenues should have gone up (which it did). Thus, in theory, with "twice" the amount of the population working, yet no need to double infrastructure, double military spending, and other public goods, then government spending as a percent of our total output should DECREASE.

But it has not.

Matter of fact it has more than doubled.

Now, fellow junior, aspiring, deputy, official or otherwise economists I ask you the simple question...

why?

I know the answer, but the question is whether YOU know the answer.

And the answer is two fold.

It is also a very TRUE answer, which will make it an incredibly politically incorrect answer. But since we're in an economic crisis, methink the people are starting to realize the economic costs of being politically correct at the expense of being truthful and living in reality.

Answer away.

The Captain Predicts the US' Economic Future

As you know the Captain holds classes regularly on stock valuation and a basic introductory course on investing. And every once in a while, through the online discussion boards, a student or the Captain himself will write something that is Cappy Cap worthy. Ergo I present to you a quick prediction of what I believe will happen in the future;

Well, it is my humble opinion (and nobody can predict the markets) that inevitably the stock market will crash as Americans fail to generate the economic production that is necessary to provide the profits necessary to drive up stock prices.

I also believe, slowly, but surely, Americans and institutional investors will start to realize the huge bubble retirement programs have formed and when the baby boomers start drawing their money out of the market, this will cause a general downward pressure on prices.

I doubt the federal, let alone state and local governments, will ever balance their budgets and it will lead to an inevitable collapse of the dollar (which has more or less happened anyway) further crashing the stock market.

Gas will shoot up to $5 easy, and will cripple discretionary spending, but only for those who are lucky enough to be employed, the remaining 10% "officially" unemployed and the other 40% "underemployed" will just suffer in limbo in "working poor" status or "lower middle income" status.

China will get REALLY mad at US and will stop buying US treasuries, and not until we all have a "Come to Jesus Meeting" and we realize we can't just prop up stock prices let alone the economy with puppies and unicorn talk, will any of this get fixed.

Of course to convince 300 million Ameircans about the severity of our economic problems is laughably impossible, but I think when bread lines start to become longer than they were in Soviet Russia, people might have the time to ponder what economic events led us to this.

You and I will probbaly be very old, if not passed away by the time this economic epiphany hits the general population, but thankfully, in the end, I believe people will be watching less "Jersey Shore" and more "Fox Business" by this time. In the meantime, based on my numbers, the Dow Jones should really be trading at around 8,000.

But again, that's just my short 1-2 take on it.

He Will Never Be Ronald Reagan

What did I tell you about housing starts?

Trust me guys, you don't have to worry about the economy all of the sudden "exploding" and Obama winning a second term.

When Governments Replace Fathers and Men

This is the result.

Just for the record, and so all of you lefties and feminists out there know, the government will never be able to replace fathers or husbands.

Never.

And you will find that out regardless of how much Sex and the City you watch and how much Maureen Dowd you read and how much government money is funneled to you.

And sadly, you will find that out when it's too late and your chances at having a real husband and a real father and a real family are long gone.

We Elect the Worst of America to Lead It

In my super awesome piece "Why You Have Bad Government" I linked the cause of bad government to the fact that the people who typically go into government have the following traits;

1. They did not have to work for a living.

2. They did not care to work for a living.

3. Because of this they majored in worthless subjects.

4. Lacking any real world experience and only knowing how to spend their parent's money, their solution is simply to spend more of other people's money.

5. They are the epitome of greed because they put themselves first ahead of society in that they ultimately do not care whether they have the wisdom, experience and morality to lead. They just want a job to make themselves feel better about themselves. I have termed them "Crusaders" (which if you want to pour yourself a martini you can watch the whole seminar on Your Tube).

I proved this by creating a pie chart of the majors of the congressional members of the Minnesota house of representatives showing, at the time, most of these people are worthless and possess no real skills or experience that would be useful to the rest of society.

Now another piece just on the national level confirming what I, your Captain knew a long time ago.

All this behooves one simple question;

Will anybody ever realize the Captain's super-awesome economic genius, or do they need to wait until markets crash and societies collapse before they have the same epiphany?

Krugman Has Lost It

Honestly, and you people on the left have no idea why the economy isn't recovering;

Ignore That Deficit Behind the Curtain

It really is a daily fight against the amoral old timers in the established MSM. And as time goes on I have a growing and intensifying hatred for the people in the "fourth branch of government" who have not only failed to do their job, but purposely advance an agenda that is against the best interests of the people by misinforming them about the all-important issues of economics.

Today's latest example comes from CNBC where they manage to put a positive spin on a $1.28 trillion deficit. Which is of course like trying to put a positive spin on Ebola or Nirvana.

So once again, your Captain fires up his P-51, replete with drop tanks and ammo and takes off into the sky to shoot down this latest assault from the mercs that are on ZeroPrez's payroll.

Below are the deficits as a percentage of GDP for four countries. Australia, Norway, Greece and the US. Remember, we are told we are able to bail out Greece, we are no Greece, why Greece could never happen here. When in reality we are now officially running higher deficits than Greece. I simply threw in Norway and Australia to show you what an EVIL OIL rich country looks like and what a functioning western society SHOULD look like.

But, again, to quote Michael Savage,

"No, no, you don't want to hear about this. YOu want to hear about some guy who hits a ball over a fence."

Ergo, I present to you guys hitting a ball over a fence.

Yep, It's S&P's Fault

Just like Katrina was Bush's fault.

And how the Tea Party (which is advocating a balanced budget) is also to blame for our financial problems.

Methinks when the markets open me little dollar short positions should be doing just fine.

Jobs Creation in Illinois

I learned to charleston in Illinois. Met Mel Gibson when he was filming "Payback" there. Had my first Pot Belly sandwich. And it was the only time I spent 45 minutes looking for a parking space.

And that was about it.

However, in an effort to maintain something the majority of my lefter leaning counterparts simply refuse to (intellectual honesty), I will note that the chart's Y-axis is HEAVILY skewed to make the drop look way more dramatic than it actually is.

Such trickery is unneeded when using data and statistics to point to the merits of capitalism.

Your Daily Dose of Dalrock

As I have been in the middle of moving, unpacking and then off to western Wyoming for fossil hunting, I have been thankful to have other people write allowing me not to...err....allowing me the time to share relevant and timely pieces written by other highly talented writers.

Dalrock, as you know is one of them.

The reason I like linking to him is I don't have to add anything. I mean, I'm pretty lazy and all it takes is a copy paste and I'm done.

So for the lazy blogger I highly recommend another succinct and complete piece by Dalrock.

This particular piece calls for you to pour yourself a drink and enjoy watching those who brought about the decline suffer under it.

Epic Fail

So I'm out west, decided to stop in Casper enroute to Kemmerer which is reported to have fish fossils. And I happen upon a nice little funeral home;



Ah the west, no state income taxes, great fossils, and cheap gas, but some pretty interesting people.

Today's Word is Agorism

FSK with an insightful post in response to my theory on how to privatize governments.

Cry Baby Municipalities

I am so thoroughly enjoying the decline.

S&P finally decides to grow a spine, call them as they see them, and downgrades several municipalities and counties. And what does S&P run into????

A spoiled brat, entitlement mentality that can only be found in trust fund babies and the public sector.

But what is better than a perfectly grilled steak served to you by Jennifer Aniston is the reaction of these municipalities. They shoot the messenger and "fire" S&P.

So to all of you in LA, San Mateo and all the other municipalities that are nearly insolvent, permit me one simple question;

"How does "firing" S&P help fully fund your pensions?"

That decline is coming whether you idiots like it or not. And your arrogance and ignorance just makes it Hershey's syrup on the ice cream.

Won't Somebody PLEEEEASE Think of the Children!

I'm sure there's no consequence to this.

Hat tip (and analysis) to the always insightful Dalrock.

Where Is Futureman?

Remember "Futureman?"

Heck, remember Wall Street Week?

Here's How to Enjoy the Decline

You think I jest, but if you think about mortality, you will realize how important it is you enjoy the decline.

The Father Could Not Be Reached for Comment

All this mentions of mothers and grandmothers and yet no father. Spurious correlation I'm sure.

I'm So There

Galt's Gluch has become Galt Island.

And finally all those stupid evil rich people will leave this country and leave you all alone forever.

Privatizing Governments

If I remember my corporate history correctly, I believe it was the Walton brothers who approached Ben Franklin (the dime store chain, not the man) about their idea for what would soon become Wal-Mart. They were shot down and if I still remember correctly, they approached other stores and chains, only to be shot down again. Ultimately they had to head out on their own, and now I don't think I've seen a Ben Franklin store in over 20 years.

Dr. Seuss was rejected reportedly 27 times.

And the creators of Trivial Pursuit had to go to a different country to find backers for their game.

Of course we all come up with good ideas (or at least we'd like to think so), but it is an issue of finding somebody to financially back it into reality. And ironically, it's the most revolutionary ideas that are least likely to get backing simply because it disturbs the blissful ignorance of the status quo and forces people to think outside their comfy little box.

Enter the Captain's crazy idea.

It not only disturbs the status quo, it just blows it right up.

I came up with this idea about 6 years ago and have alluded to it in the past. I never came outright and said what it was because;

1. I didn't want the idea getting out
2. I was debating whether to actually pursue it.

I tinkered with it, toyed with it, and soon it just wouldn't go the frick away. I knew I would have to at least give it a shot otherwise it would just gnaw at me for the rest of my life. And so over the summer when I had some time, I pulled a ton of data, ran some charts, made some financial projections and put together a 20 page business plan.

The idea?

How to fully privatize governments.

It's actually quite a simple concept, but a revolutionary one because I believe I have found the optimal form of government, or at least the "next stage" of governmental evolution. An improvement upon democracy, or perhaps a better way of putting it, democracy on steroids.

Under this new concept, government would be inoculated against corruption, greed, theft, graft and all other ailments that have ailed democracies since they were created. Politicians would not be able to wield the power over the people like they do. Rich or influential people could not override the desires of the people (or perhaps shall I say, brainwash them with propaganda and mass media into voting against their own long term interests). And economic growth, to paraphrase Brad Pitt from Inglorious Basterds, "would be a-BOOMIN'!"

It also is about the only silver bullet that could genuinely save the US (and all of Europe for that matter) from the financial problems we face today and keep them going as a viable economic entites.

Oh, and it also wouldn't hurt that it would easily make me and any major investors the world's first trillionaires.

But you all of course know where this story is going.

As expected, after spending the better part of a week on research and drafting a proposal and after spending cumulatively another week trying to get investment banks or VC firms to take a look at the proposal, all I managed to do was waste two weeks of my summer at an opportunity cost of enjoying the decline. What was particularly irksome was not the fact investment banks, financiers of different sorts and VC's shot it down, it's that they just plain wouldn't return the damn phone call. That you could easily spend 20 minutes on the internet and one the phone trying to locate the right person to call and when you leave them a voice mail, they never call you back. And in the rare instance you actually got to talk to a real live investment banker they would dismiss it on frivolous grounds having nothing to do with the idea.

It's too much money to be raised.
It's too little money to be raised.
We're not in that industry.
We were in that industry, but not this time of year.
We might have interest, but now right now with this market.
We only do private placements.
We only do public placements.
It's Tuesday.
It's not Tuesday.
You're wearing blue socks and we have a policy against investing with blue sock wearing people.

I literally told only 2 people about the actual idea. One was an investment banker who was at least sporting enough to entertain the thought. And the other was Peter Theil's "Founders Fund" who actually requested an abbreviated 12 page Power Point presentation I put together. The rest of the time my idea was dismissed without them even hearing about the idea, and not ONE business proposal was sent out.

Naturally the curious person by now would want to know, "Well, what precisely was this great idea? How do you fully privatize a government and make trillions of dollars from doing so? Let alone, how do you make government "corruption-proof?"

And seeing how it is more or less impossible this idea will ever get financing, the next best thing would be to go public with it. Ergo, I am happy to announce the business plan's publication now available on Kindle.



Yes, I am charging for it, because I spent a lot of time on it and some of you will notice how the posts this summer have been more linkage than Cappy Originals (in part because of developing this business plan and also in part due to moving).

Regardless you can find it here for $5.64 (the reason for the odd price is I tried to price it at $3.99, but Kindle likes to add odd fees - will be tweaking the price in the meantime). Sorry, only available on Kindle, but for the price of a glass of beer you will be rewarded with infinitely more than $3.99/$5.64 worth of intellectual stimulation. And yes, no doubt there are going to be some of those endearing grammatical errors or typos that my English-nazi readers love pointing out.

In the meantime, enjoy the decline (which will probably be the title of the next book).

POST POST-Some of you have expressed interest of just mailing me $4 and me e-mailing you the MS Word Document, which is kosher too.

E-mail me at CAPTcapitalism (at) yahoo (dot) com, click on the Rumpleminze and make a donation to my paypal account. Or I can send you a safehouse address to mail $4 bucks to.

Property Taxes By County

I am kind of doubting the chart a little bit given Minneapolis and St. Paul fleecing their citizens, but here is the link.

All Bush's Fault

Morons.



But it's "Bush's fault" right?

Cutting Off the Flow

For all the monetarists out there who know prices of all items are simply a function of supply and demand, and who also know velocity is transitory, I found this chart interesting. For the first time since the series has been tracked, real estate loans have dropped. And not only have they dropped, they have dropped significantly.



Now I know there is a plethora of reasons why banks are reluctant to lend money. The economy, the housing bubble, new regulations effectively turning off the spigot, etc., but until that valve is turned on again, your housing prices won't recover.

Property Values Down, Property Taxes Up

A neato little chart that actually surprised me which shows property tax revenue for the state overtime. You would think with the collapse in property values, property taxes, which are BASED on property values would go down. Hoo ho ho! You foolish boy;



I knew Minneapolis would keep jacking up their property taxes, but I didn't know the state as a whole would too.

And people wonder why property values keep dropping.

No Capital Gains Without Profits

and no profits without economic growth.

I will say it again for the cheap seats. The Dow should be trading at around 8,000.

Vintage of Divorce

Much like some charts showing the "vintages" of the various "tranches" of MBS or CDO's and their varying rates of default, Dalrock has once again done his digging and come up with a similar chart, but for that of divorce. In other words depending on what rough era you were married, how quickly did it take to get divorced?



To this day I am amazed at how the 70's just continues to be the worst decade on so many different socio and economic fronts.

A lengthier and longer analysis by Dalrock located here.

Link to Dalrock repaired.

Socialists Wasting Their Summer

Silly democrats. You wasted your summer. You should have learned to enjoy the decline.

We'll There's Your Problem Right There

It often requires you to step back, pour yourself a double, go ride a motorcycle around, kiss a couple girls and watch some old school westerns and then revisit the problem in order for you to solve it or understand it. And one of the observations I've had as I've been out on long rides in the South Dakota Badlands is that our financial problems are caused by something that has been staring at us right in the face. Skim this little article here and see if you can see what I see.

What you SHOULD see (if you took Dr. Cappy's advice above and drove around after pouring yourself a double and kissing some girls and achieved a South Dakota epiphany) is governmental officials completely unaware they are stepping outside of their bounds. That they are putting themselves where they don't belong. And I'm not talking about forcing us to buy incandescent light bulbs, I'm talking they actually think it is government intervention that can affect stock prices when in reality the only thing that DOES affect stock prices is profits.

What kind of intrigues me is a guy like Bernanke should know this. Any economist, whether they are on the left or the right should at minimum have the intellectual honesty to know that tinkering with monetary policy is not going to have any kind of long term effect on stock prices. If anything it will hurt stock prices. Ergo what the heck is he thinking the central bank needs to take some kind of action? Since when is the fed chartered with the mandate to "increase stock prices?"

Stock prices will be, what they will be. They will be determined by profits of the underlying firms. Not whether the firm "goes green." Not whether they "celebrate diversity." And not whether the government does QE 46 and 1/2.

Regardless, the point is not necessarily this one particular instance of stupidity on the part of the federal reserve chairman. If you look at the entire effort politicians (primarily on the left) have resorted to, to get this economy going again, they are operating from the erroneous premise that somehow government can do something to help get the economy going again. Which is like saying a lamprey can do something to get a fish healthy again. Of course it will fail because the only thing the government can "do" is get out of the way and let the private sector grow again. However, what I'm seeing more and more is an ingrained psychology of government wonks and politicians that is something akin to women in my dance classes when they first start out. They think they can "do" something. Initiate some kind of action. "Help." When in reality "helping" or "doing something" is antithetical to the role women need to play in dancing which is the follower. Once the woman "does something to help" she unknowingly destroys the dance. But when the women realize how they have to follow (and men finally get the gall to lead which is nearly an impossible task sometimes), the dance works beautifully.

However, I highly doubt Obama and his ilk are going to realize they follow the people and not order them around.

On a side note, I think this old post of mine will come in handy given the general collapsing of or stock market and economy today.

In the meantime, you all know what to do today!

Escape From Minnesota

Or at least from Minneapolis.

Is There Anything More Beautiful Than Reality?

To quote Joe Hollenbeck from "The Last Boy Scout,"

"The truth is a beautiful thing...two." (I'll be surprised if anybody can place that in the context of the movie).

Regardless, I do thoroughly enjoy watching reality start to pierce through the rose-colored glasses of everybody who is of the mentality, "oh, the market will come back."



Post - post - it just keeps getting better.

POST POST POST - Who grew a pair over at S&P???

Unemployment Rate for Those with College Degrees

Anybody else just savor the irony of the college youth who came out in droves for Obama?

The Captain is Moving

Your beloved Captain got a job in a no-income-tax state. More on that later.

But the funny thing about moving is all the old stuff you rediscovered when deciding what to take with you and what to through away. Namely, you unpack the boxes you boxed up the past 3, 4, 7 times you've moved and never unpacked them to see what you have.

I have old notebooks from college, old tax returns, but one precious item I found (and summarily thought I had lost) was a signed copy of the book "St. Mudd."

The book wasn't signed by Steve Thayer, the author, but rather "Jackie Rocket" the premiere dominatrix in the Twin Cities at the time. She got it as a gift for me over a decade ago.

"Captain, you are a different type of gangster and saint." it read.

Of course at the time I was dating her I literally didn't know she was the premiere dominatrix in the Twin Cities at the time, but that is a different story as well.

Regardless I strongly recommend the book St. Mudd. It is one of the few books I've read and it is even one of the fewer books I liked.

Besides, what else are you going to do but enjoy the decline?

"Efficient" My Ass

I don't believe most people know about the concept of markets being "efficient." Usually you run into this concept when you are a studious junior in college and maybe one of your academian professors decides to actually impart some genuine wisdom instead of just teaching from the book to explain the concept to you.

Regardless, the idea of "efficiency" in markets is that when information is released into the public do markets (such as the NYSE, NASDAQ, AME etc) incorporate that information and translate it into either increase or decreasing prices.

For the past 10 years, I've been amazed how the "brilliant Ivy League geniuses" over at "Goldman Sachs" and "Morgan Stanley" and "Lehman Brothers" have been unable or perhaps reluctant to take BLATANTLY OBVIOUS DATA AND INFORMATION THAT THE US IS SCREWED and still make "strong buy" or "buy" recommendations."

No, never mind the 800 pound gorilla in the room known as medicare and social security. Never mind most American children want to major in sociology or women's studies or art history and will never produce an ounce of genuine economic production. Oh, no. Let's just keep on believing in the empirically-disproved "American dream" and invest billions in "hope and change."

Of course, reality inevitably hits the market and FORCES it to be efficient. But I ask a simple question.

Do you idiots over on the east coast just drink the purple kool-aid and swallow schtick whole?

I mean how did the market NOT tank until this day?

What was special about today?

I mean, you all were truly ignorant about the severe economic and debt crises the US faced? I'm amazed the DJIA even made it past 10,000, let alone 12,000 in the past 5 years. Did you Ivy League losers NOT pay attention to the plethora of economic data that is available on the internet for free? or have you so become corrupted by nepotism, cronyism, your parents money and rent seeking you actually thought a society and economic entity based on "self esteem" and "grrrrrl power" and "diversity" and "going green" could produce genuine economic production and profits that you could make such a foolish recommendation?

Well, reality is hitting you Harvard graduate morons upside the head now. And there's nothing you can do about it.

But, of course, there is always hope and change.

I mean, your president is a Harvard graduate, right?

So at least we have the smartest and bestest leading this country, right?

Because we all know Harvard produces the "best."

Right?

I mean Bush and Obama.

What a great track record.

Hi-freaking-larious

The always guffaw-inducing Dalrock.

What He Said

I think this is the first person (aside from myself) to point out it's what you MAJOR IN, not whether you have a degree.

Those Stupid Numbers and Facts

Hurting our sensibilities and all.

Getting in the way of our puppies and ice cream ideology!

A Day in the Life of a San Franciscan

Light up a cigar and be thankful you don't;

1. live in San Francisco.
2. live in California
3. live in a major metro area

Poor Colonel

How to REALLY Close the Wage Gap

This will help these girls close the wage gap infinitely more than any "graduate program" in the liberal arts. I'm amazed a public education institution though offered such a thing.