The Best of Captain Capitalism - Dear Penthouse Forum

This was arguably the most popular post and taught me a great lesson in the economics of blogs;

Smut and sex sells and ain't none of you honyakers interest in economics as much as you are dirt on people's dating lives.

Alas, what am I to do, a true capitalism responds to the market.

It was several weeks ago I was sitting at one of my favorite jazz clubs. And as always I was reading the most recent issue of The Economist. I had set it down on the table and turned my attention to do some tax work when an rather attractive Asian woman walked by. But while I was looking at her, I noticed that she was looking at the cover of The Economist.

At first I was hopefully impressed, thinking that somehow this may be the legendary "video-game-playing, Economist-reading, sexy-lingerie-wearing, totally hot babe capitalist economist that likes to serve Irish economist men martinis while they listen to Frank Sinatra." The one that the Holy and Sacred Elder Economists of Yore spoke so much of. But when I saw what was on the cover of The Economist, "China and the Key to Asian Peace" I realized she must be Chinese and was naturally just looking at the cover.

She proceeded to sit down at a table about 10 yards from me and ordered a glass of wine. She was dressed provocatively enough that I figured she had a date or was meeting some friends, so I just left it at that and returned to doing some tax work. However, 20 minutes had passed and I noticed that she was still sitting by herself.

Did her date fail to show up?

Were her friends the tardy types?

Or...could she be like me! A Napoleon Solo type character who is actually secure and cool enough with themselves to go to clubs and read The Economist?!?!

Realizing that my finite resource of time was being used up, I decided to gather up the courage and ask her if she was alone. Upon asking her, she said she was waiting for friends, but they were very late. And in my politest, least forward and non-threatening way, I asked her if she would like to join me so that I may keep her company until her friends arrived.

She agreed.

Happily we sat down at the couch I had previously ornamented with my papers and files and started talking. A very nice and attractive woman, but what impressed me the most was that she was not bashful about asking me about myself, alleviating me of the typical male duty of keeping the conversation going. And within one minute of asking me questions, it seemed the prophecy of the Holy and Sacred Elder Economists of Yore were to come true. For in that brief minute of conversation it was established that;

1. She reads The Economist
2. She was a financial manager at a money management firm
3. She had her undergraduate in finance
4. She was getting her masters in economics

The next hour of conversation was tantilizing and insanely intelligent. We talked about econometric modeling. We talked about efficient frontier theory. We talked about Miller-Modigliani. And then she talked about her specialty, behavioral economics.

I love it when chicks talk dirty to me.

And thinking that the night could not get better, it did. Her friends showed up. All of them finance majors and all of them just as capable of holding intelligent conversation which lasted the next hour.

But I knew inevitably I would have to make my play. And at a table full of economists and finance majors you're not really going to impress anybody by quoting correlation coefficients between GDP growth rates and unemployment figures because that’s just par for the course for them. So I decided to play my trump card. My master stroke of genius. My coup d'etat.

I can dance.

Fortunately for me there was a jazz band. And fortunately there was a dance floor. So sitting there patiently, engaging in conversation, I waited for the perfectly timed song to play and then asked, "do you know how to dance?"

The expression on her face could not be repeated.

"No, but I would love to learn how!"

So I said, "I can teach you."

"Well, not now, but I'd certainly love to go dancing sometime later."

And boom! There was my in.

The scenario could not have been more perfect;

* I established we had insane amounts in common.
* We established we could have that insanely rare thing called "intelligent conversation"
* I mingled well with her friends
* I established that I was unique and could offer her something fun that would make for one hell of a date.
* She wanted me to take her out dancing.

And like George Castanza, knowing that he should exit at the top of his game, I proceeded to give the woman my card, said I would love to take her out dancing, and bid her and her friends farewell.

Leaving the jazz club I had a smile on my face. I was supremely confident she would call.

Which reminded me of a theory I had developed back in my college days;

“If you are supremely confident a girl will call, she won’t.”

Sure enough, time had passed, and no call.

Alas, I concluded she must not have been too smart, for how stupid do you have to be not to call a dancing, video-game-playing economist? Especially one with his very own subscription to The Economist! I mean come on, ladies, how can you resist?

But don’t cry for me Argentina, for there is good news to this story. For immediately after I had left the jazz club, and while I was still riding high on the prospects of meeting a potential intellectual equal, I felt it necessary to share my experiences with those who I thought at the time were at least in part responsible for making this meeting happen; the kind ladies and gentlemen at The Economist. In a drunken stupor, I had sent off a letter to London detailing my exploits that night, not expecting what would happen two weeks later.

For two weeks later, at the insanely early hour of 10AM, I was awoken by a call from none other than the chief editor of The Economist asking if I had taken her out yet! It seems the good blokes and dames at The Economist had a running wager on me and whether I’d be successful in getting her out on a date. The chief editor, recognizing the obvious fact that anybody who subscribes to The Economist and who is in fact an economist himself, is so studly that they would practically be guaranteed of getting a date, wisely bet on me. Sadly, perhaps he is too wise, for he is 72 years of age and perhaps still subscribes to the romantic notions of the 1940’s; chivalry, tradition, romance, and other such BS. Whereas his younger, less senior counterparts are fully aware of the insanity of modern day women and their incapability to appreciate the concept of carpe diem, and thus bet against me.

But regardless of the outcome, as an economist, one must think. For while girls that shoot me down are a dime a dozen, how often is it that you get a call from the chief editor of The Economist?

As far as my econometric models tell me, that’s worth getting shot down at least 348 times with a 2.5% margin of error.

Yes, Communism STILL SUCKS...Again..Like it Always Has

No doubt you've seen this on drudge or perhaps before, but seriously, if you want ultimate proof as to just what a miserable failure socialism is as an economic system, you just have to look at this picture.



Think if you were aliens looking down on Earth. You lean over, "Hey Bob, look at this here peninsula!"

"What about it?"

"At it kind of odd right at the 38th parallel it all of the sudden goes black?"

"I thought it was a lake!"

"No, no, we're picking up signs of human life. Weak, but they're there."

"Well where the hell are all the lights???"

"Got me."

"Well hell, who the hell is running that joint anyway???"

It really makes you question whether leftists REALLY believe that the actually have the key to a better society or are just a bunch of lazy whinners that want other people's wealth transferred to them.

Conspiracy Theories Coming to a Theater Near You!

I forecast the following conspiracy theories as we approach the election;

1. Flag of Our Fathers was timed to be released for maximum Republican advantage. The left will demand Clint Eastwood shoot himself and renounce the use of guns.

2. Harry Reid's real estate deals were obviously the work of the right wing MSM.

3. The George Bush made this last tropical depression fail to become a hurricane only because of the mid term elections. Otherwise he would have called his cronies and made that tropical depression a force 5 hurricance to wipe out another town populated with minorities.

4. The paper cut I got the other day was the result of a diabolical plot by Bush, Inc. when I criticized him for spending too much money.

Fat Chicks Allowed

We've been going at it the wrong way gentlemen. Barking up the wrong tree. Pissing into the wind.

As I've said before I often think that society spoils very attractive women and gives them a free pass in many things. Simply because a woman is attractive means that one-half the population wishes to sleep with her and thusly will buy her food, drinks, dinner, dates, houses, jewelry, heck I remember a personal injury lawyer scamming on a girlfriend of mine promising to pay for her college (I was a wealthy security guard at the time). This effectively shields these women from the harsh realities of life that turns you from a child into an adult. So while the rest of us schlepps have to slave away at work, earn a degree, pay a mortgage, and fill our own gas tanks, Bambi is being chauffered around by Winston Winthrop III.

Now not to be arrogant or bragging, but truthfully, I keep myself in enough shape and ask out such a volume of girls that inevitably one is drunk enough, slips up and says yes. Thusly I do tend to date very attractive women.

However, these never or rarely make it past the first date as they quickly prove themselves to be complete morons and ditzes.

For example, in my recent trip to Rapid City a very attractive girl GAVE ME her number and e-mail without me even asking and DEMANDED stay in town one extra day so that we could go out on a date...only to stand me up the next day.

Another would be the "Norwegian Goddess" who got so hammered one night she not only got into fisticuffs with her friends, but was so drunk she couldn't tell if she was in St. Paul or Minneapolis and thusly needed me to pick her up (below is a thing called a "map" that shows you the geographic difference between the two).

Or perhaps my personal favorite, the neice of one of the top dogs inTaiwan's Kuomintang party whose family had a net worth in excess of $1 billion that literally LECTURED ME FOR 15 STAIGHT MINUTES after I had filled up the tank, went into the station to pay, and came back and had the audacity NOT TO ASK HER IF SHE WANTED SOMETHING TO DRINK!

Obviously the common theme among these very attractive women is they're all psycho. They're mean. They're spoiled. They're immature.

In short, their personalities suck.

This presents a paradox to any guy who wishes to date attractive women;

physical attraction is inversely related to personality.

Here is a formula developed by U of Chicago economists;


Thus the question becomes how do you solve this paradox, and date a girl that is not only attractive, but nice as well. Well, gentlemen, I think I have the answer.

Ask yourself the question, what is easier to change?

A person's looks

or

A person's personality?

And now the merits of my genius plan becomes apparent. For while a person's personality is more or less set by the age of 24, their physical appearance is not. And while a person's personality can be changed, it is infinitely easier to change somebody's physical appearance.

Thus, guys, men, hombres and dudes, we've been going about it all the wrong way.

Instead of chasing after hot chicks that no doubt have wretched and unchangible personalities, we should be keeping a keen eye out for overweight women that you could see it that if they lost 20, 30, 50 pounds, etc., they'd be hot. And since society is anything but nice to fat chicks, you can practically be guaranteed that they know how to support themselves, they don't expect society to take care of them, they have personality and have had to develop some kind of intellect or skill in order to have a social life, just like the rest of us. It's literally only a matter of slimming them down.

Now, there are of course problems with my new-found theory.

One, friends have pointed out they don't want to date fat chicks. And I concur, but that is not what the theory portends. Much as we may lament it, you must be physically attracted to somebody to date them. But that doesn't mean you can't be friends and go running or walking.

Secondly, dissenters brought up the issue of how exactly do you put it to an overweight girl that she needs to lose 40 pounds? Simple, you don't. You just say, "hey, do you ever go running?" Get them out dancing. Some form of exercise without mentioning that she needs to lose weight.

Also is the issue of how "blunt" and "mean spirited" this is.

Well that's because if you're insulted by such an idea you are probably of the lefter-leaning sorts because you dont' like the truth and rather lie to somebody to spare their feelings than to truly help them out.

It may be blunt, it may be cold- hearted truth, but it is not mean spirited. Mean-spirited would be something like not telling an overweight person they need to lose weight knowing full well their life expectancy will be 15 years shorter if you don't.

That's mean spirited.

"Asking" not "TELLING" a woman to go running pulls off the delicate balance of being polite yet being truthful as well.

Regardless, the theory has merit and is a win-win-win situation as far as I can tell.

1. The monopoly super attractive women have would be broken and they'd be forced to compete by becoming nicer people.

2. Overweight women would slim down, making them not only more attractive, but healthier.

3. A good looking dame with a great personality might not be a mutually exclusive event.

Militant Teachers Unions...In Mexico

I've kind of been following this half-heartedly. But my understanding of it is right wing thug regional governor won't give in to left-wing thug teacher's unions demands, protests and all hell breaks lose.

Like I said I haven't followed it that closely, but Mark in Mexico has. Here's his web site;

http://markinmexico.blogspot.com/

Once thing I did want to post was this photo taken of an open-minded leftist and their respect for the law.



Any time you leftists want to get lippy here in the US and resort to physical violence, set down the latte and your daddy's credit card and let's go.

Well, Isn't This Interesting?

So this came out;

http://www.usatoday.com/news/nation/2006-10-10-internet-defamation-case_x.htm

I find it very, very interesting. I'm sure some other people will too!

We Need to Prune the Lawyer Population

For their own good you understand.

Yes, Communism Still Sucks

For some reason the hits have gone through the roof on this old post of mine from March. Web site called www.reddit.com linked it yesterday and BOOM! Hits go through the roof.

Anyway, it shows the world's worst cases of genocide by an interesting chart (and we know my affinity for charts). But I didn't want to repost it with a different date otherwise the links wouldn't work, so click on it. It shows how communists are effectively the world's best killer and that's DURING PEACE TIME!

Debt Junkies

So whilst working on a project I compiled some stats on just how much debt Americans are using. Thought you'd find the charts interesting and greatly depressing at the same time;



Oh, and happy Monday everybody.

Having a Hard Time "Cairing"

http://www.usatoday.com/news/nation/2006-10-10-internet-defamation-case_x.htm

Won't Somebody PLEASE Think of the Children?!

My favorite mantra to come from the 60's generation is "won't somebody think of the children."

Parading children around as an excuse to allocate resources to a whole bevy of programs. Demanding more money be spent on the children. Because we care for the children. And if you don't transfer wealth to the poor for the sake of the children, then you're a very very BAD PERSON!

Well, my question to you is, yeah, why won't somebody think of the children? It's one thing to say it, it's another thing to mean it.

Never has such a generation failed in their stewardship of future generations.

So you can only imagine my blood pressure when Ben Bernanke, who you know, is kind of a smart guy. Might know what he's talking about, being the head of the Federal Reserve and all gave a speech about the black and white realities of social security and medicare.

Juxtapose this speech with the latest in savings rates which would be a barometer of just how much people care about the children in that they'd be saving for their retirement so that future generations don't have to pay for their retirement;



Enough to drive a man to drink.

Desperate Irish Housewives and the Like

DesperateIrishHousewife.blogspot.com

So a buddy of mine forwards this to me for the obvious reasons that;

• I am Irish
• She is desperate
• And who is to be bigoted or so judgmental against housewives?

But here’s the thing.

When I clicked on the profile in an attempt to mayhaps see a picture (only to be let down) I find out that in the short 8 months she’s been blogging, she’s had almost as many profile views as I have in my now approaching 2 and ½ years on the internet.

Now let us be frank.

She has nowhere near the amount of posts I’ve had.
She has no charts.
And we all know that if you don’t have charts, well then, what do you have?

But why does she have all these hits?

The answer is simple my fellow bloggoteers.

She has the "magic formula" for what I consider is necessary for an instantaneous successful blog.

She is;

1. Female
2. Of the conservative/freemarket/libertarian faith
3. A blogger
   

These three traits alone practically guarantee you instant notoriety in the blogging world regardless of how few charts you have.

This is not to belittle or criticize those female bloggers out there who are of the free-market mind, actually, we applaud you. But that is just my point.

It’s no big whoop if whiteboy Joe Schmoe blogs about the evils of socialism. Some nerdy accountant in his basement ranting away because no main stream media outlet will broadcast his views.

But if it’s a girl, ESPECIALLY THE RARE AND SEEMINGLY IMPOSSIBLE TO EXIST PRO-CAPITALISM GIRL,

Well, that’s just plain freaking hot!

It’s no different than that one girl who fell into company with the dungeons and dragons crowd back in high school. You know, the tomboy that was smarter than the average girl and thusly couldn’t nor wouldn’t conform to the cheerleading dictum, and thus she hung out with you schlepps even though she was the center of constant ill-aimed attempts to get her to go to prom with you.

THAT’S THE FEMALE BLOGGER!

And just like a chaotic neutral wizard with a charisma +13, she’s irresistible.

Don’t believe me? Just look at these female blogger babes. They are rare as those high school dames that learned how to play War Hammer or could throw down a mean game of Halo;

Girl on the Right
http://www.girlontheright.com/
American, conservative, female, and a cutie.

Kate the Canadian
http://www.smalldeadanimals.com/
Canadian, conservative, female, drives motorcycles and hot

Michelle Malkin.
http://michellemalkin.com/
American, Conservative, female and HOT HOT HOT!...and married, DAMNIT!!!!

Jacqueline Passey
http://jacquelinepassey.blogs.com/
And economist, a Libertarian and since she’s got a new picture, hot.

Jane Galt
http://www.janegalt.net/
A writer for The Economist, blogger, ardent free-marketer, and while she doesn’t have a picture up, no doubt she is probably hot too. Actually she could be repulsive, but with the above accreditation she’s still hot.

And I think each of them get something like 40 billion hits per day or something like that. True, honest to God. 40 billion...on a bad day.

Now logic would dictate that to start a successful blog then, all one has to do is POSE as an attractive female who is a conservative or libertarian. Get a picture of a willing attractive female accomplice. Lay down some mean economic rhymes (and charts of course too! Don’t forget the charts!) and BOOM!

Insto-Sucessful blog!

Of course that would mean stringing along millions of poor nerdy econo-poli-type men in their basements. Leading them on to think that there are women out there who are not only conservative/libertarian/pro-capitalist, but also intelligent and attractive…

Actually, I don’t think anybody is going to fall for something THAT outlandish.

I Should Have Gone Into Computers

If there was one thing I would have done differently, it would have been to get a degree in computer science for my undergrad.

The five years following graduation from the U of MN with a degree in finance was largely spent collecting rejection letters because the U of MN's Carlson School of Ass Kissing and Brown Nosing...err...I'm sorry, I meant to say "Management" is no rival for Wharton, U of Chicago or Anderson...then again, I did work with some people from Kellogg who proved to me that a highly ranked school doesn't necessarily produce smart people.

Regardless, that's why I live somewhat vicariously through

http://ianozsvald.com/

Always had this curiousity about computers. Computer/engineers feel the same about finance. We could in a sense of the word "trade our trades" (HA!! Get it, "trade" our "trades" The pun? I mean, how I juxtaposed the two words that are spelled the same, YET HAVE DIFFERENT MEANINGS? heh? get it?)

Regardless go to Ian's site and to pick up some Entrepreneurial Geekiness

Smith and Marx Never Had it So Good

So I'm flying back from the Florida Keys. And within 2 hours I had gone from driving a convertible in 85 degree weather to sitting behind the demon spawn of two parents that somehow thought that if they bred, their children would not become the loud, obnoxious, noise-making retards that they were.

To escape this hell and prevent me from committing man-slaughter, I decided to crack open a book about the Nobel laureates in economics which I had been looking forward to reading. And the reason I was looking forward to it was because, truth be known, I am an economist only by trade and experience, not by training. My degree is in finance and although intricately related to economics, I lack the traditional educational background in economics which addresses things like "egoism versus altruism," "rationality versus irrationality" and other fundamental theories that govern and lay the foundation for modern day economic thought.

However, while I was hoping to learn more about the contributions made to economics by the various laureates over the past 40 years, the book served only to raise my ire about a particular pet peeve I have about my profession;

That economists practice economics as a bona fide science.

Much in the same way we use math, physics and engineering to calculate the orbits of planets, speeds of trains and temperatures of furnaces, so too do economists (particularly Academian economists) think that we can somehow predict or forecast social phenomena such as unemployment, economic growth, crime and inflation. However, the reason that NASA aerospace engineers can program the Cassini spacecraft to travel the 904 million miles to Saturn and enter an orbit around the celestial body within a margin of error of less than half a mile is because space travel is grounded in a set of succinct and precise rules known as Newtonian physics (specifically Kepler's Laws). Economics enjoys no such luxury since the study is grounded in the random and forever changing behavior of humanity.

But that certainly doesn't seem to stop economists from treating economics as a mathematical science. Attend any modern day economics seminar (a surefire way to impress a date) and it's not about theory or philosophy as much as it is explaining an insanely complex mathematical model or formula that is seemingly hell-bent on using all the letters in the Greek alphabet. And after all the methodologies are grilled, all the ones are carried, and all the formulas double checked, in the end, you at best are left with a model with mediocre predictability.

The reason for such rare and mediocre success is that all of modern day economic research is focused on trying to do what is frankly, impossible; predict the future. And not only predict the future, but predict the future behavior of humans which are inherently dynamic. And worse still is predict the future behavior of dynamic beings in a world that is ultimately chaotic.

Leave it to economists, who are arguably the least attractive people in all of society, to think they can mathematically calculate a scientific or formulaic way to attract members of the opposite sex.

But that statement is more profound than it seems. For within that statement lays the trick, they key to solving the problem of economics. If you can figure out how to attract members of the opposite sex, or for that matter, predict any sort of human behavior, then you most certainly can figure out economics.

In this sense we are all economists. What man hasn't spent literally years of his life, not to mention untold sums of money, energy and effort in "trying to figure out girls?" And how much time, energy, effort and money have women expended on therapists, psychologists, "Mars & Venus" books, daytime talk shows, or those stupid women's magazines and their "10 Billion Ways to Tell if He's a Jerk, and 3 to Tell if He's OK" type surveys?

Sadly, despite such efforts, nobody has been able to "figure out" the opposite sex.

Or have they?

For I contest there are a few people that actually have "figured out girls." Not in the sense that they know what to say at what time, and what flowers to buy who. But in the sense that they realize there's no way to "figure out girls" since they are "unfigure-outable." Every woman is a different being and will be a different being the next day. One girl one day will respond to the Cary Grantish chivalry, kindness and courtesy. Another girl will only respond to heroin and an abusive boyfriend whilst practicing the fine art of bulimia. And to think that applying some sort of strategy or approach to something so chaotic and irrational will result in consistent and positive results is wishful thinking on the order of thinking France is capable of defending itself.

Thus, the only option a guy has is to not even think, not even contemplate about trying to begin to make an initial attempt at figuring them out. To not spend one calorie of energy, not one iota of effort on the task. To realize that the best use of his time is to live life however he sees fit, and if it just so happens a girl somehow falls into that mix, so be it.

Or in the words of the W.H.O.P.P.E.R. computer,

"The way to win the game is not to play."

This is the man (or woman) that has "figured them out." (And coincidentally, this is also the guy you see with the most girls, because he ignores them and couldn't care less about them).

But how would this strategy play out in economics? The "don't play to win" strategy?

First look at what all of economics and econometrics focuses on; predicting the future. It's forward thinking. It's the exact same mental disorder people have when they think they can "solve the riddle" of the opposite sex.

But in focusing on the future we ignore something very important;

The past.

We disregard years and years of history. Countless case studies of different countries implementing different economic systems and the different results that follow. And terabytes of data that have been collected by various agencies throughout the world. The FRED II Database and the OECD alone would be enough to make Marx and Smith cry. But no, we ignore all that, and act as if we haven't figured out which economic policies and which economic system are the best either because we're overcautious, we're trying to be politically correct, trying to adjust for extenuating circumstances, or perhaps our funding would be cut from our public sector paymasters.

Which is sad, for about the only people that can legitimately claim the excuse, "Well, we don't know" would be the original founders of the two main economic systems, Karl Marx and Adam Smith, simply because "capitalism" and "communism" didn't exist in their their articulated forms then. Marx and Smith were truly forming theories, looking into the future. They were postulating if there was a system that didn't exist before which would be better than the one they had now. They had no choice but to theorize because they did not have the luxury of the wealth of information that we have today.

Yet we still sit here and argue about whether socialism or capitalism is the optimal economic system as if nothing has been learned in the past 225 years. As if the lives of 100 million people killed and the 1 billion people held in dismal poverty by communism over the past century are all in vain since we refuse to learn anything from it. And how retarded do you have to be to not see the stark difference between North Korea and South Korea? (Answer - You have to be so retarded that you were under the tutelage of the Minneapolis Public Schools for all of K-12).

So let me spell it out VERY clearly to you.

Capitalism is the optimal and best economic system in the world. Period.

This is not opinion. This is not rhetoric. And this is not propaganda. It is fact. Though you will certainly run into democrats, communists, liberals and other varied sorts of of socialists that will argue till George Soros' money runs out that I am wrong, sadly for them, the truth is not on their side. And the truth comes from that historical data that would instill envy in Smith and change the mind of Marx.

But before we give you the proof of capitalism being the ultimate economic system we need to go over a simple economics lesson so you can fully understand and appreciate it;

Government revenue as a percent of GDP.

Consider the problem you'd face if I asked you to calculate your overall tax rate. Now, most people would say, "Well, I'll just compare my net versus gross pay on my paycheck and boom, there it is."

Unfortunately, this does not account for a whole slew of taxes that you pay. Taxes such as sales tax, property tax, gas tax, your fishing license, telephone tax, breathing tax, heart pumping tax, thinking tax and a million other taxes. Thus it is quite literally impossible for you to calculate your overall effective tax rate.


However, the same does not apply to entire countries. The reason why is that you can find total taxes paid by just looking at the government budget(state, federal or local). And the total revenue the government collected is the total amount of taxes (whatever form they took) paid into the government.

The only thing you need now is a "gross salary" for the nation to divide total government revenues by to calculate an effective tax rate for that country.

This is actually not as hard to find as you might think. Matter of fact this "gross salary of a nation" is right under your nose. It's mentioned everyday and is measured every quarter;

GDP - Gross Domestic Product.

The reason GDP is the entire salary of a nation is because not only is GDP "all the goods and services produced within a nation's border within one year," but for every dollar's worth of production, there is a dollar's worth of income. For example, if Chrysler sells a $40,000 PT Cruiser, that $40,000 is then used to pay for the salaries of the auto workers, salesmen, the interest on Chrysler's debts, the suppliers of the sheet metal, etc., so that all $40,000 turns into income for somebody else.

Thus, by dividing total government revenue by GDP, we get a very accurate measure of a country's overall tax rate.

However, not only does this provide a good measure of an overall tax rate, it also serves as a good barometer as to just how "capitalistic" or "communistic" a country is. North Korea is estimated to have nearly 95% of its economy under government control, whereas with George Bush's drastic tax cuts the US tax rate has fallen to 25%. But with this measure we can do something quite extraordinary; correlate countries' overall tax rate against their economic growth and finally, once and for all see which economic system is more successful.




(I should note that these are the OECD countries, which, at the time were the only ones with enough data to run, 5, 10 and 15 year correlations. Furthermore, this was done when I was 24, so no doubt the data has changed since. I will inevitably get around to updating these figures and hopefully will find consistent datasets for additional countries as well)
And surprise, surprise, what do you know? Not only is the correlation negative, it is also strong (anything above a +/-.3 is pretty strong for the social sciences). And not only is it strong, it gets stronger the further back you go, thus proving that the higher the taxes, the lower the economic growth tends to be. The more a country leans towards the left, the more its economy fails.

But, no doubt the consortium of democrats, liberals, communists and other varied socialists will critique my data. "Why only the OECD? Why not 20 years? Why not take out the outliers? Why this? Why that?"

Which of course are legitimate questions anytime something like this is purported. But rather than spend the next 6 pages defending my methodologies here, how 'bout I just tell you, "It ain't biased, there's been no hanky panky, because I'm not concerned about getting a certain result, I legitimately wanted to know what the real result was."

Furthermore you don't have to believe me. Try the joint house committee study on the effects of taxes on economic growth.

And even if that doesn't convince you, how about a social scientist's dream come true? A perfectly controlled experiment where an identical population is divided and each half then implements completely contradictory economic systems? Would that be enough to satisfy you?


Sadly, I could go on and on with empirical, anecdotal, but above all irrefutable evidence that capitalism is hands down the best economic system, but for some people it wouldn't matter. Some people, frankly know socialism doesn't work, but know it's the best way for them to get money for doing nothing and thus will advocate it regardless of the data. Some people, hold dearer to them a sort of "noble crusade" to promote socialism and fight "evil corporate capitalism" even if the truth doesn't warrant such a crusade because their egos are more important to them than the advancement of society. And some people are just plain brainwashed to the point of no return where they will deny everything and subscribe to conspiracy theories about black helicopters and Haliburton before they entertain the possibility that maybe capitalist countries do better than their socialist counterparts.

But economists, free-marketers, Republicans, Libertarians and other varied sorts of capitalists need not be such hypocrites. For unlike the left, our ideology is not based in wishful thinking. Our ideology is not based in theory or hope. Nor is our ideology based in falsehoods, misinformation and outright lies. No, our ideology is based in truth. What makes us capitalists, true economists, Republicans, Libertarians and other varied sorts of free-marketers is the fact that our belief in capitalism is not a belief at all, but rather a knowledge, a knowing that capitalism is the best system. And it is because the truth forms our ideology, while the left's ideology forms their truths that capitalism will always surpass socialism and communism as economic systems.

Interesting Charts from Sweden - Non-Child-Friendly Ending (You have been warned)

The Economist, which, by now, as I've been saying, should be in every aspiring economists' subscription list, came out with a very fascinating article on Sweden.

Now as I've said before, I'm impressed with the Scandinavian and Nordic countries' abilities to maintain not only high standards of living for their people, but do so without deficit spending and all of this in the face of high taxes.

I opined this had to do with their cultures being more mature and "adult" enough to handle something like socialism and not take advantage of the welfare net and use it as a hammock (I additionally forecasted that human nature would override this cultural trait in the long run and they'd start to look more and more like Italy).

Perhaps I spoke too soon.

For Sweden seems to have been massaging their unemployment figures and things may not be that great to begin with.

First, the majority, practically ALL of the jobs growth in the past 40 years has come from the public sector.



Immediately I'm sceptical because the public sector responds to political demands, not the demands of a free people through a free market. The result is what one can expect from make work, government jobs;

No wealth production;



Now there are many other aspects to the article that I haven't addressed here, but one thing that was scary and inevitably all European countries AND America will face is that everybody in Sweden is in one way or another dependent upon the government for some of the butter which their bread is buttered with. Thusly, they are somewhat loth to vote in reforms that would shrink the size of the government no matter how inefficient it may be.



Democrat readers no doubt are having a wet dream right now.

Who's the Real Loser George?

Remember about, what, two weeks ago, George Michael mocking Bush in some concert out in London with a picture of Bush with a glass of beer in his hand?

Look who just got arrest...again...on drug charges. Hypocrite.

Cynics are Just People Who Have Grown Up

I don't believe in cynicism. I believe most other people are aloof and ignorantly blissful.

How I envy them.

For if you live through life long enough, you get "cynical" real quick, but again, it's only in response to reality.

So, if you want to read a long post on cynicism with a cool Casablanca quote at the end, you can go here.

If you want to take the little cute quiz that will give you your very own cynicism score, you can go here.

It All Means "Communism"

http://thoughtyoudneverask.blogspot.com/2006/09/my-glossary-for-understanding.html

Banned Statistics on Education - Part I

No doubt once the NEA gets word of this they'll send their tippy top super secret elite assassination ninjas after me to shut me up. But, I'm not too worried because I figure those ninjas got their training in the public schools, and thus their assassination skills were honed under the tutelage of an outcome based programs. That is of course unless they value their assassination ninjas like they do their children, and do what all members of the NEA and public-school-stalwart democrats do with their children; send them to the private schools. Then I'm in trouble.

Oh well.

So here's the deal (and I'll make this short and sweet for all the busy important people, AHEM, TERRY, FOZ, MIKE, KRATOWSKI);

Since the left is ALWAYS asking for more money for education (despite record levels being spent already) I wanted to find out once and for all whether spending more money on education resulted in better educated students. So I set out to correlate spending per pupil against standardized test scores such as the SAT or the NAEP tests by state.

The results were interesting and complicated, so I decided to do three segments so as not to overhwhelm you with charts (besides I'm waiting on some data from other sources).

First comparison I did was SAT scores against spending per pupil by state. I used two measures of spending per pupil. One from the National Center for Education Statistics (NCES) and the other (as to quelch bias or criticism that the NCES is a tool of the Bush administration) the communists' favorite, the National Education Association (NEA). (I also did them in two seperate years 2001 and 2003 so as to match the exact year with the data. In other words, shut up, there's nothing wrong with the figures so just eat it and weep.)
The result is what conservatives, libertarians, capitalists and free-marketers have suspected all along, and the primary reason the NEA will dispatch their tippy top super secret elite (privately school trained, however) assassination ninjas to kill me; more money does not equal better education. Matter of fact it is worse. The correlation coefficient between the two is actually negative (-.3, -.4 if you do not take out the District of Columbia which was an outlier), showing that the more money spent on the public schools THE WORSE THEIR STUDENTS ACTUALLY DID, suggesting that there is not only incompetence in the public schools, but borderline corruption.

Now here's the problem though. Not all students take the SAT, only college-bound. The above correlations say nothing of the education the non-college bound received. Thus I wanted to see if there was a standardized test out there that all students were required to take. And here's where we run into some problems.

Frankly, there aren't any standardized tests that fully capture the total education a student receives by state. Welcome to the world of substitution data.

The closest thing I could find was the National Assessment of Educational Progress' (NAEP) tests which are issued at the 4th, 8th and 12th grades. Optimally I would have liked to use the 12th grade data as this would inlclude the entire educational career of the student, however there is no 12th grade data by state. You have to go to the 8th grade data for that. And even the 8th grade data is not complete. Some years are missing, some subjects (math, science, etc.) are missing in different years. Still, wanting to be statistically correct and just to satiate curiosity, I ran the figures with the 8th grade mathematics scores by state against per pupil spending.

The ninjas may hold off.

For oddly, while more money results in lower SAT scores, more money does help 8th grade math scores anyway. The correlation is actually a strong positive one, coming in around a +.3 (note if you include the outlier District of Columbia, the correlation drops to 0, message to DC public schools; your teachers, your parents, your students and all your schools REALLY suck)Now, obvious gaps in this measure exist. It completely ignores high school. It doesn't account for other topics like science, grammar etc., (although the NAEP has figures for these, just not in 2003 or in their entirety). But still it begs the question, why seemingly does more money benefit the average student and seemingly hurt the college-bound.

I have a theory; that the majority of money is being spent on crap programs for crap students. Programs that do not foster or promote success and achievement, but in an affirmative-action sort of way, programs that prop up the losers and celebrate mediocrity (if ever achieved). It reminds me of the Simpson's episode where Homer gets a job at Globex under Hank Scorpio. Bart is sent to a remedial 4th grade where among retarded students they play musical chairs where there are more chairs than students. The music ends, all the kids find a seat and the teacher yells out "yea!!! You're all winners!"

I'm so happy that it seems when the public schools are asking me for more money, that in reality they're asking me to pay for kids to feel good about themselves or become average. Not to help bring about the next Bill Gates or Einstein who will make greater contributions to society (and increase my chances of seeing some of my social security).

But like I said, there are some kinks to be worked out in the data and I wouldn't be too quick to draw conclusions from it. According to the NAEP data for 12th graders will be coming in the future, alas it seems we will just have to sit and wait. But the data thus far does seem to point to more public school money = poorer college bound students. No wonder home schooling is so popular.

Next issue I address some more statistical concerns and I look at a specific state where (of course) the democrats are asking for yet MORE money for education.

To tide you over until that time, here's an interesting chart I concocted that I realized is relatively pointless, but would still be interesting;

You Will Tune Into The Economics Supper Club, Baby!

Hey baby it's cold outside. Blustery fall winds. Chill in the air.

How 'bout instead of walking the dog you and I cozy up under the blanket with some rumple minz and hot chocolate and tune into "The Economics Supper Club."

The good news is we'll get a double whammy because he's subbing for Dave Thompson TONIGHT! Friday from 730-10PM Central Standard Time.

Then we can tune into the Captain tomorrow again on Saturday, as he broadcasts from 1-3 PM Central Standard Time.

What station baby, you ask? That's AM 1500, KSTP. And if we happen to be outside the Twin Cities metro area, it's all good baby. We can listen online at www.am1500.com .

Now look baby, I'll let you call the Captain, but you gotta promise to be faithful to me. I know with his Captain Jack Sparrow rugged charms combined with this Alan Greenspan knowledge of economics makes him irresistable, heck, I question my own sexuality sometimes listening to him talk about fiscal policy, but you musn't fall for that dashing, handsome, and sexy economist/professional dancer/fossil hunter of a man. Ok?

651-646-8255
1-877-615-1500

Those digits are gold, baby.

Let Me Explain to You How This Income Distribution Thing Works

Take two charts;

One showing US Corporate profits as a percent of GDP are at an all time high;


A second showing that wages as a percent of national income has gone down seemingly at the expense of corporate profits going up;



This would be enough to send your average leftist into a hissy fit about the evils of corporations and how Bush is evil and how Haliburton is forcing children to eat squirrel carcas in the inner-city just to survive.

Of course "intellectual honesty" doesn't matter jack to the left, additionally, nothing brings them to a voracious psychological orgasm than a good outlandish conspiracy theory, and thusly instead of finding out the true cause of this deviation, they opt to feel sorry for themslves and go into their knee-jerk default "Bush is Hitler" and "Corporations are Evil" modes.

So it seems once again, we are in desperate need of another "Economics for Idiots Lesson" 102.

What is interesting and triggered my desire to make this post is in a recent and phenomonal survey by The Economist, it shows you this divergence from corporate profits and wages is not just relegated to the US. It's happening across the entire developed world.

Corporate profits are taking a larger share of ALL developed nations' incomes



And wages are taking up a smaller share of ALL developed nations' incomes.



thereby lessening the credibility of the leftists' argument that Bush is behind all this (although, no doubt some will insist Bush is FOISTING this effect on foreign nations as well - remember, sophomoric-college-age-conspiracy-theory-induced psychological orgasms are much more fun than the truth).

Thus, there must be some other force, some variable affecting this change, transferring a higher and higher proportion of national incomes to corporations and taking it away from the workers.

This is the variable that the left doesn't bother looking for, nor wants to look for, because they have what seems to be CONCLUSIVE PROOF that corporations and Bush are out there throwing old people through the jet engines of Air Force 1 and sucking out the blood of minorities at night because they're vampires (which sadly isn't too much more outlandish that some theories Kos is pushing).

However, we being of a higher-caliber and way more sexy human;

Junior,
Deputy,
Aspiring and
Everyday

Economists,

know the merits of pursuing the truth and thus look for it.

Sexy savvy as we all are, we know that one of the major forces in the past 5 years that has had an effect on every aspect from the housing market to the cost of clothes has been China and to a larger extent the developing world. But beyond clothes and housing, one area of the economy where China, India, Mexico and other developing nations have had an effect on has been the labor market. And the most prominent among their effects has been the issue of outsourcing.

Any industrial or laboring job has been outsourced to China and India and other countries where labor is a mere fraction of the bloated hourly wage of their US Union counterparts. Why fix a plane with Northwest Airlines mechanics that are paid $67,000 + benies when that plane can be flown to Thailand and fixed by Jamil for $15,000/ year and no benies? Why pay some textile union worker $25/hour in Vermont when Chang can do it for $2/hour in Xinghua? And why pay Steve in Chicago $14/hour to answer phones in a call center when Punjab will do it for $3/hour?

This is what is causing the divergence from wages and corporate profits. For no longer do corporations have to pay hefty American wages, further inflated by the greed (and stupidity) of unions, then can go to Bangalore and get the exact same service for a mere fraction of the cost resulting in not only increased profits, but lowering (or at least) stagnating wages here in the US.

Of course the question is whose theory is more likely to be true?

Captain Capitalism's theory that China and outsourcing is the cause for increased corporate profits and stagnating domestic wages;

or

Socialists' theory that George Bush is scheming with Corporate America to further impoverish the lower classes while enriching his buddies (while the entire time heaving Grandma into engine #3 fo Air Force 1.)

The irony here of course is that there is another variable that exposes the democratic party for unbelievable hypocrisy, for it isn't just the Chinese and Indians we're outsourcing our jobs to, there's also Mexico.

Whether in Mexico or not, whether legally here in the US or not, it doesn't matter. Because of the proximity to the US, Mexican labor offers the same advantages as does Chinese labor, but closer to home. Additionally they also boost corporate profits while depressing worker's wages here.

But notice how the democrats treat Chinese and Indian labor DIFFERENTLY than Mexican labor.

They'll lash out at the "outsoucing of our economy to China and India." They'll complain about unfair labor practices in foreign nations. They'll complain that corporations are going overseas.

But will you hear them complain about Mexican labor? Will you hear them take just as hard of a stance against illegal immigration as they do anti-outsourcing?

And there's the hypocrisy. For you see fellow democrat stalwarts, lower-income earning Americans, and especially you union folks, the Chinese can't vote in American elections because they'd have to cross the Pacific. But Mexicans just need to cross the Rio Grande. And once here, eh, who's to tell them they can't vote or work, because they are potential future democrat voters. And that trumps any desire to help you people out.

Now truthfully, I'm all for labor, foreign or domestic, legal or illegal, Chinese of Mexican, no matter how we come by it because there actually are some benefits to foreign labor. The left won't dare mention these benefits because it detracts from their conspiracy theories, but again we noble economists are a bit more interested in the truth.

One, the prices of goods comes down.





We'll of course blast Wal-Mart for paying market wages. We'll blast the Chinese for taking away our jobs. We'll banish Wal-Mart from Chicago. But I often wonder when the left is going to get around to thanking Wal-Mart and the Chinese for bringing down prices for everything under the sun thereby boosting the purchasing power of people, especially the poor, and thus effectively doing more for the poor than any government social program ever could (remember those drug prescriptions?)

Two, for you credit hogs that insist on just borrowing money instead of working for it, you can thank China for financing all of our deficits, keeping interest rates low and artificially boosting the price of your house so you can withdraw EVEN MORE money from the equity of your house to help you live beyond your means and pay for crap you don't need.

Of course, there is a drawback to this. What is effectively happening is that China and India are becoming the Factories of the world, while the US and its western counterparts are effectively becoming the Malls of the world. We won't produce the wealth, but boy, we sure like consuming it. Thusly, I like to further analogize;

China and India are becoming the father of the family, putting food on the table, housing over our heads etc., while;

the US and western nations are becoming the trophy wife and spoiled brat suburbanite princess with Daddy's credit card. Producing no wealth, but spending all the money.

And while this may work out on your favorite episode of Desperate Houseditzes, in the long run it is not sustainable.

The solution?

Oh, you leftists are not going to like the solution. For it gets back to what I've been saying all along;

America has got to get back to what it historically has done best; be the leader of the world in innovation and technology.

For it is not working harder or longer that makes a country great. It is working smarter. It is replacing work altogether with automated processes that frees up our time to pursue other pursuits. It's developing cell phones so we an produce GDP on the road and tractors so we can produce 100 times the food than we do by hand. It's completely overhauling the way things are done with faster and more efficient methods so that instead of being like Ethiopia and digging a ditch with our hands, we're rerouting trading systems from the comforts of our own air conditioned office and producing 900 times the wealth in the same amount of time.

And the catalyst for this creation and innovation?

Sorry lefties, it ain't the bastions of traditional employment for you guys. No philosophy degree will help bring about the US getting back its competitive edge. No sociology degree with entice Samsung to build their next semi-conductor plant here. And certainly no political science degree will ever, EVER do anything to make us a more attractive destination for foreign investors.

It's the sciences.

Engineering, physics, mathematics, chemistry, computers, biology.

Alas, it seems the developing world is going to kick our ass in that department too.



But don't worry, I think if we protest loud enough like the French for higher paying jobs and lifetime employment, we'll no doubt hold on to our position as the wealthiest nation in the world...that and Selma Hayek will date me.

Party On Wayne, Party on Garth

http://reuters.myway.com/article/20060927/2006-09-27T204956Z_01_N27232538_RTRIDST_0_NEWS-ENERGY-7-ELEVEN-GASOLINE-DC.html

Rock on Apu!

When it All Starts to Sound Like Rap - The Best of 2005

I'm not sure if you're aware of this, but rap sucks. No, it's true, really, I'm not making this up. It sucks so bad that scientists were actually able to prove that it sucks with a simple geometric theorem. Something with tangents I believe.

Now you might say, "Well, it's really a matter of opinion. There are millions of people that think rap is great," and not only you, but those millions of people would be wrong, for as I stated before, it's been proven.

But you might be surprised in my reasoning for thinking rap sucks. Most would chalk it up to me being a white male economist who could not possibly appreciate the art and relate to the listeners. Truth is I own around a score of rap CD's because I actually liked, LIKED, rap. The Beastie Boys mixed it up with a little funk, even put out some good stuff into the late 90's. Old school like Run DMC and Public Enemy were good. I'll even accept Cypress Hill in his overkilled "Insane in the Membrane"...lousy stinking cops always coming to try and snatch my crops.

But alas the days of rap artists that had not only staying power, but talent, are long gone. And I am regaled everyday with samples from the latest flash in the pan artist for I have the luxury of teaching introductory economics at a local community college.

Populated with nothing but the finest 18-20 year olds the public schools have to offer, once class ends, the little kiddies put on their baseball caps, make a break for their cars, blast up their poor quality speakers on their late 80's model GM cars in some sort of counter-productive mating ritual and burn out of the parking lot with the latest rapper singing;

"F-You and F-Dat. I F'd-Your Mom and F'd-Your Cat. F-yourself, yo' head I will cap!"

and other such favorites that I'm sure Sinatra just hadn't gotten around to composing arrangements for yet.

Yet, the lewd and crass lyrics are still not the primary reason I have fallen out of love with rap. The primary reason is that the music is has become so repetitive and unoriginal that it all starts to sound the same. The same beat, the same lyrics, the same cadence and the same self-pitying kid, dressed up like a cartoon character swearing about guns or drugs or racism or poverty or hoes or whatever else he found in Jesse Jackson's old sermons. You literally can't tell one song from another. And cripes, would it kill a new age rapper to rhyme a song that doesn't owe its entire existence to the vowel "e."

"Fast rapping self-degrading expletive is what I be.
Public schools taught me 1 'n 1 makes 3.
Ghetto pimp cruisin' smoking the wee
Hittin' round's of golf on Homie's Par Three
Drank too much Vodka, now I must go pee
Can't you see
You and me
Public schools say dat makes 3."

And there I sit, whilst suffering assaults from the vibration of the bass thinking to myself, "How can a human being even be slightly entertained by this total and utterly repetitive crap?" It's so mundane, so droning, I literally cannot see a sane human being purposely listening to that stuff. It is a question I don't think I will ever be able to answer...

However, the answer might lay elsewhere. For there is a group of people who exhibit the exact same behavior. And not only do they subject themselves to what would normally be repetitive, unoriginal and mind-numbing drivel, they also start to repeat it and promote it to anybody they can. We call them "liberals."

Not that liberals like rap, but they listen to and regurgitate the same garbage, all the time, with the same amount of originality, creativity, thought and passion as these two-bit rappers. Perhaps you have heard of some of their songs?

"Tax Cuts Only Benefit the Rich."
"Republicans are Racist."
"Democrats are for the Little Guy"
"Global Warming is Real and Caused by Capitalism"
"Black Conservatives are Uncle Toms."
"The Public Schools Need More Money."
"George Bush is a Moron."
"Women are Making Less than Men."
"I Hate Wal-Mart."
"It's All About Oil."
"I Hate Corporate America"
"Outsourcing Jobs is Horrible for America."
"Haliburton."

Played over and over and over again to the point you can finish their sentences for them. And I guarantee you, over the next month you will hear a choir led by John Kerry;

"Education, Health Care and Jobs."

But my personal favorite all time hit, made extremely popular by the Baby Boomer generation, which every good liberal knows by heart is the popular tune;

"The Rich Get Richer and the Poor Get Poorer."

Of all the chanted mantras of the left, this is the most defining and encompassing one (and deafening). It succinctly summarizes their ideology. It provides a rationale for the transfer of income. It victimizes a group. It's palatable to the masses and resonates well with them. It plays off of peoples' self-pity. And it is played over and over and over and over again as if it were a broken record and a team of union members were on hand to ensure it played forever.

This cliche has so permeated our society, that everybody uses it without thinking about it. College students, lacking any real education, knee-jerk-reaction it during their childish-level debates. Workers, white collar or blue, recite it every year when they get their raises. It is so well drafted and cunning that it can be said by any one, not give away their ideology, yet advance the goals of socialism. And there we sit, listening to it as if we're a 19 year old boy trying to impress the girls with a crappy car, a crappy stereo, but above all, a crappy tune.

But for such a popular tune that is sung en masse without thinking twice, don't you think maybe we should check it out to see if it's at least true???

I mean, sure the democrats, liberals, socialists and other varied sorts of leftists are going to believe what they want to believe, regardless of whether it's true or not (as evidenced by their incredible ability to search high and low- if not, create- their own data that supports what they want to believe). But as Conservatives, Libertarians, Republicans and other varied sorts of Capitalists we adhere (or at least I hope you all do) to intellectual honesty. We are not concerned about thinking, we are concerned about knowing. We are actually concerned about the truth.

Well take a look below.




And what do you know? If you go and pull the latest income distribution figures (from that incredibly biased tool of the Right Wing Conspiracy, the US Census Bureau) you'll find that the old socialist adage "The Rich Get Richer and the Poor Get Poorer" is only about half right. The tune should go a little more something like;

"The Rich Get Richer and the Poor Get Richer Too!"

But wait! How could this possibly be? Democrats and their socialist brethren have been telling us for years that only the rich get richer. And not only do the rich get richer, they get richer at the expense of the poor by making them poorer. Surely they wouldn't be telling us only what we wanted to hear, providing us a convenient scapegoat for the lack of our own personal financial success. Surely they wouldn't lie about income distribution to sow the seeds of class warfare, divide the nation and in a "For a Fistfull of Dollars" scenario play one side against the other for their own political gain. Would they?

Sorry kiddies, looks like you've been sold a bill of goods. One need only to look at John Edwards and his own personal broken-record tune called;

"Two Americas."

Or listen to Hillary Clinton's platinum hit;

"We're Going to Take Things Away from You for the Common Good."

Or Jesse Jackson, Al Sharpton and the choir who prompted the infamous tune;

"The Reparations Rap." (which really would have been cool to link you to the lyrics, but the song was so stupid and counterproductive to their cause, I think it's been obliterated from the Internet forever, if anyone finds a copy of it, let me know)

Now I'd like to leave it here, pour myself a scotch and pat myself on the back for dealing another blow to socialism, but alas, I can't. For you must be warned. For working 'round the clock in a never ending attempt to undermine the forces of capitalism are Academians. Sitting atop pristine campuses, adorned with reject, 1970's minimalist architecture, are professors who could never break into the real world/private sector if their lives depended on it. And knowing full well their money at least in part comes from the government, they are always eager to prove why their paymaster should get more money. Therefore, they THINK of rationales and reasons to ignore the truth and purport falsehoods such as "The Rich Get Richer, While the Poor Get Poorer." Thus you can expect the following argument;

"Well, yes, technically real incomes are going up for everybody. But relatively incomes for the poor and middle class are going down while they go up for the rich."


So let me translate this for you. What the Academian is saying is that as a percent of total income, the poor and middle class' share is going down. Never mind that real incomes for the poor have gone up by 42%, and roughly 30% for the middle class, because the rich (those evil bastards) have had their real incomes go up by about 90%. Thus the poor are getting poorer relative to the rich.

In other words, if you get a 10% raise, but your neighbor gets a 20% raise, you are poorer and should complain. Democrats and socialists would argue that not only should you complain, but you should be entitled to some of your neighbor's 20% raise.

Like I said, they will believe in whatever they want to believe.

Now with this new found knowledge, no doubt I see you fancying yourself at a party, in the midst of a heated debate, waiting impatiently for the token party liberal to blurt out "yeah man, you know, the rich get richer and the poor get poorer." And then like a crouched ninja, patiently waiting in the shadows you strike with unseeable speed. And with infinitely superior knowledge (and a conveniently set up Power Point point presentation to display all these figures) you slay your rival in but a nano-second.

Soon you are surrounded by girls, fawning over you, saying "Oooo! I used to like the pansy, sensitive 90's type philosophy major, but there's something different about you...you're so, so manly!" And that's where you say, "That's right Baby, I'm an economist."

And you'd be right to fancy yourself in this situation because it happens all the time. There isn't an economist in the world, who after handily defeating a liberal at a party, wasn't marauded by droves of women.

But before you you start collecting numbers and leave your defeated leftist friend on the ground, it might be worth kicking him while he's down there just for good measure. For liberals, like the knight in Monty Python's "Search for the Holy Grail" don't know when they're defeated and don't know when to stay down.

A further criticism of income distribution figures is that they do not account for what are called "income transfers." Things such as social security, welfare and the whole host of other income security programs out there. These income transfers, by and large, transfer money from the richer quintiles of society and transfer them to the lower quintiles. In other words, the income distribution figures overstate the absolute and relative income of the rich and understate the absolute and relative wealth of the poor. Sadly no adjustments are made to the figures to account for this, but if any criticism is to be levied against those figures, it would be in your favor.

But before I go, I want to leave you all with the lyrics to the now debunked song. Perhaps we can write a new one, that has a little bit more originality than a rap song and 100% more truth than a liberal one;

"The Rich Get Richer and the Poor Get Poorer"

"The rich get richer and the poor get poorer.
You exploit us you bourgeois scumbags.
Give me my money, you owe it to me
You stole it from me and my family.
You oppress us.
We abandoned God so he won't bless us
Subsidize my worthless college degree purely for my enjoyment.
Then when I can't find a job, you can pay me unemployment.
Give us the money for any reason
We'll create 20 new ones a season.
It's not my fault that my life sucks,
Break out your checkbook and give me some bucks
Yooooooooou rich bastards."

Americans Hate to Work

So I've been comissioned to draft a seminar on developing models to predict default and delinquency using credit scores.

Sexy, yes, I know.

But in my research, I happened upon some data from Freddie Mac that makes me sick and warrants a lecture to be delivered to the lazy Americans who think that borrowing money against their house is a substitute for working.



These people literally anger me as they're the ones now who are whining and complaining about banks foreclosing on them because they were too stupid to read how ARM's work and got pinched when the short term rates adjusted.

Anyway, if you wanted a more lengthy, deep-thinking post, read the post below. Pulling old posts up because I'm dedicating a fair amount of time in preparation for busy season.

Vast Prosperity Begat "The Mystery" - Repost

One of the more popular local radio shows in the Twin Cities area is called Garage Logic. And one of the running gigs they have is “the Mystery.” “The Mystery” is where you would have people lobbying their city council to ban leaf blowers because of the pollution and noise. Or middle-aged, gray ponytailed Baby Boomers protesting the war on the bridges spanning over the Mississippi. Or overzealous do-gooders passing smoking bans.. At first it seemed to confuse the host so much that I wrote this theory as to explain “The Mystery.” Then it dawned on me that if “The Mystery” were solved, the whole "Mystery" gig wouldn't fly anymore. Kind of like preventing Niles and Daphney from ever getting together. However, I think the insights provided in my explanation does explain these people’s behavior and to a larger extent what ultimately drives liberals. Hope you enjoy.

The epitome of the mystery is that there are people out there who act, say, and believe things that are completely illogical. They then give you an incredibly weak or obscure rationale as to why they do, say or believe such things. This can range from a government worker demanding higher pay when they’re already paid 30% more than their private sector counterparts, to a mob of students destroying the downtown Seattle area in protest against globalization, to an environmentalist claiming that cutting your lawn with a weed whacker emits 2 million pounds of greenhouse gases into the environment.

At first glance they are seemingly unrelated. However, there is a common thread they share and this is the solution, the reason why there is the mystery;

They refuse to adhere to reality because they are lazy.

It is quite a link to claim that an environmentalist who insists a sole weed whacker emits 2 million pounds of greenhouse gases does so because he doesn’t want to adhere to reality because his is lazy, but let me make several daring and dangerous links.

First off, there is a reality. There is a real world. It is the world we all live in, and whether we accept it or not, we have no choice but to abide by it.

Governing this real world are many laws, but two undeniable laws in particular are related to The Mystery;

One, in order for a society to survive they must produce the goods and services necessary for survival and produce them more efficiently should society wish to improve standards of living.

Two, it is human nature to be lazy – i.e. to get more for less.

It is these two undeniable (and diametrically opposed) laws that necessitate an economic system that is based in reality. This economic system must be based in human nature and what they are prone to do, not in human kindness or what we would hope for them to do. It is because of this that capitalism is the most efficient and successful economic system and any attempts otherwise, as evidenced by the former Soviet Union, current day North Korea, former Marxist Ethiopia, Cuba, etc., are bound to fail.

Therefore, capitalism is not debatable, it is reality.

However, capitalism is not infallible and has one great weakness;

It has a tendency to spoil its participants.

Be it a Baby Boomer who had the luxury of growing up during the post WWII economic boom turned 60’s radical, leftist, anti-war hippie, or their modern day suburbanite anti-globalization protestor equivalent, both share a common trait;

They largely owe their unrivalled standards of living, employment, and wealth to capitalism, ie-vast prosperity.

Yet at the same time capitalism is so successful that it effectively shields them from the harsh realities of life. And without having to work, strive or suffer for that wealth, these people, especially when growing up, not only take such high standards of living, employment and wealth for granted, but consider them rights and entitlements.

It is this dichotomy that creates the environment in which The Mystery can form. On one hand, capitalism is providing for the livelihood of an individual. But at the same time spoils the individual so much that he/she can afford to revert back to their lazy human nature and purport the most outlandish theories and ideologies that are not based in reality but rather in their own selfish, human nature desires. This disconnect from reality and intentional ignorance of how capitalism/the real world works effectively allows a person to “have their cake and eat it too.” The result is a person can then live off the system, using whatever excuse or rationale to forego responsibility and hold beliefs or live a lifestyle that runs contradictory to what we Garage Logicians know to be fact, truth, reality and logical.

Having said that, it would seem only spoiled children can be Mysterians presuming that once they entered the real world, and were forced to get jobs to support themselves they would become adults and grow up. However, two things effectively prevent this. One, capitalism is so successful that a good portion of the population can (and in some cases are) being taken care of by their parents’ money well into their 40’s, and some trust fund babies, indefinitely. Two, over the course of the past 30 years, a system has been installed in our society that allows people (wealthy or not) the option of never having to get a real job, with real work, effectively shielding them from the real world for the entirety of their adult lives, namely what I call the “non-private sector;”

Academia, NGO’s, the public sector, non-profit industries, etc.

Thus, instead of real jobs in the private sector where competition inevitably forces production, efficiency, and the reality that one must work hard to succeed, one can now major in philosophy, women’s studies, Hyphenated-American studies, sociology, communications and the uber-Mysterian “peace studies.” And no longer do they have to get jobs as a machinist, an accountant, a doctor, a janitor, a chef, a customer service rep or somebody else that produces and contributes to society. But rather they can become sociology professors, psychology professors, philosophy professors, diversity counselors, grant writers, professional protestors, activists, lobbyists, journalists, career politicians, trial lawyers and a plethora of other equally worthless careers which compose the vast majority of Euphorians’ and Mysterians’ employment.

While this explains the incentives or at least the rationale of the Eurphorians and Mysterians it does not explain why they make such outlandish statements or are so adamant in their protests. Why they are so vocal, and zealous in establishing their cause. Why we see some many examples of The Mystery so frequently. However, this is very simple to explain;

Job security.

Realize the vast majority of these Mysterian careers are NOT demanded by the free market and must be imposed on the taxpayer by force via the government or people must be guilt-tripped into donating money to their cause. Therefore lobbying, protesting, and legislating are part of the game to protect their “industry.” Furthermore, in order to GROW their “industry” they use a technique that provides us with the majority of instances of The Mystery today;

Criminalizing other entities, industries, groups of people, etc.

Tobacco companies, fast food companies, oil companies, white men, rich white men, rich white oil men in Texas, the WTO, the IMF, the military, the CIA, John Ashcroft, big business, capitalism, pharmaceuticals, NAFTA, America, cars, Haliburton, SUV’s, even mold, are all targets of the Mysterians because they represent future or at least potential cash flows in the future, but at minimum, a continuation of their “causes.”

The problem with attacking or criminalizing these groups is that these groups aren’t evil, malicious, or criminal. All things being said they are products of reality and the free market. At worst they are a government policy attempting to respond to reality. The SUV is in response to the demands of a free people in a free market. Unhealthy fat food is in response to the demands of a free people in a free market. The military is in response to the fact people don’t like us and the government attempts to protect us. And rich white men are more often than not the result of hard work, studying, and creativity. And thus, in order to criminalize them Mysterians must fabricate a rationale or reason that is not based in reality, or at best has some really shoddy evidence to support their claim. This is where you see cardiac-arrest-inducing examples of The Mystery at play in the real world:

Global warming exists and is brought on by the automobile.

You are fat because McDonald’s made you that way.

You are poor and your life sucks because of racist, sexist white men.

People who drive bigger cars are endangering those of us who drives SPECS.

This, if for any other reason, is why we have been unable to solve The Mystery. Because we focus on the cause or crusade and its inanity and not what drives the people behind it. Realize, it doesn’t matter what the cause or crusade is because the cause or crusade is fabricated for an ulterior motive. It could just as well be global warming as it is sex discrimination, because the ulterior motive is nothing as noble as protecting the environment or advancing the well-being of women. It’s not about eliminating racism. It’s not about the ethical treatment of animals. The only thing it’s about is the Mysterian. Providing and securing the Mysterian a career for some fabricated cause. Giving them some self-concocted sense of pseudo self-worth. Furnishing them with an utterly hollow rationale that somehow “they’re contributing to society.” In short providing them a lifestyle void of responsibility and reality.

It is nothing as noble as helping 3rd World children and absolutely nothing resembling the real world or the truth.

This is why you have The Mystery. This is why you will never see the NAACP or Jesse Jackson even admit to an improvement in race relations. This is why schools will always be underfunded and will cry bloody murder and child abuse if you just hold their budgets steady. This is why the environment will forever be on the apocalyptic verge of destruction even if we ban the automobile. This is why you can have a women’s studies professor claim she is 100% independent while in reality she is the trophy wife of the public sector. This is why you have Arriana Huffington and Mark Dayton inheriting their money going on political crusades to make themselves feel better. This is even arguably why you have the son of a rich Saudi millionaire flying planes in our buildings to make up for his inability to survive without his Daddy’s money. Simply because people are lazy and do not want to put forth the required effort to face up to and succeed in the real world nor do they want to succumb to a career that they view as “beneath them.” And it is just so much easier to ignore reality, claim you’re a victim, claim you’re a crusader for some “noble cause,” villanize targeted groups, and just outright lie especially when a system is in place to foster and encourage such behavior.

I hope this helps explain The Mystery or at least maybe proposes some new theories about it.

Good luck!

Hugo vs. Bush

So I figure with Hugo Chavez claiming our president is the devil and such a bad man, and many of you socialists in America agreeing with him, that maybe this might be an appropriate time to dispense a measure of "REALITY." So I took a look at some various socio-economic figures between Bush and Hugo over the past 6 years, to compare the left's hero versus the "devil's" 6 years in office thus far.

GDP per capita under Bush vs. Hugo


Real GDP Growth under Hugo vs. Bush

Unemployment under Hugo vs. Bush


Inflation under Hugo vs. Bush

Murders under Hugo vs. Bush

Corruption under Hugo vs. Bush (sorry, my bad, map was previously pointing to Peru. No offense meant to Peruvians)


But here's my favorite. Hugo Chavez, alleged hero of the left, advocate of the poor, who constantly slams on neo-liberalism and capitalism, joins forces with the few remaining communists left on the planet, Cuba and North Korea, who champions the confiscation of "rich people's" wealth to redistribute it to the poor HAS AN EVEN WORSE INCOME DISTRIBUTION THAN THAT EVIL COUNTRY UNDER THAT EVIL CAPIALIST DICTATOR GEORGE BUSH!!!


(to be intellectually honest I would like an updated gini coefficient if anybody has it)

And we have to listen to this 52-year-old-come-spoiled-breat-18-year-old-Chomsky-college-student-reading schmuck-putz lecture us about Bush being the devil???

It is glaringly obvious that Hugo has no desire to actually help the poor people in his country or the rest of the world, it's just about him and clinging to power and feeding his ego. And for all you leftist hypocrites out there who actually endorse this scumbag under the guise, "he's advocating socialism and helping out the poor" WHEN HE HAS A WORSE GINI COEFFICIENT THAT THE UNITED STATES it just shows the rest of us the truth;

That you're absolutely not about helping the poor as much as you are being anti-American or so utterly stupid that you will bring this great country down and lose those precious social freedoms you cherish so much because of your ignorance.

You literally should be ashmed of yourself for such stupidity, hypocrisy and being so damn gullible.

Math Tells Me Yes, But My Heart Tells Me No

So there are many indicators I look at that to me would predict a recession, but probably the biggest one I look at (probably more because it was something pointed out to me so long ago) was that housing starts were an excellent leading indicator to the rest of the economy. Usually with a 6-12 month lag, when housing starts tank, recessions usually ensue. And ever since the FRED Database at the St. Louis Federal Reserve started imbedding them there nice slim shaddy (get it, "shaddy" because they're gray, like shade, but with the doubling meaning on the obvious ploy of Eminem's song "Slim Shaddy" huh? Get it? The pun I mean???) to indicate recessions, it helps make it very easy to illustrate my point.



However, it wasn't necessarily the contraction of GDP that tipped me off to the correlation as much as it was how housing starts and unemployment act like a double helix;


Now there are many things that would suggest to me that we're in for a recession. The obvious correlations above. The fact that consumer spending financed by fat-debt-bloated Americans with their addicted home-equity-loan spending has been having an artifical effect on the growth of the economy (and without perpetually increasing property prices this binge will end).


The utter patheticness of Gen X and future generations insisting on majoring in crap. And let's not forget all of this under the umbrella of constant threats from Muslim nutjobs, with a whimper weak retort from American's "leaders," and the impending social security and medicare crisis.

But it just ain't in my blood. I don't "feel" a recession coming on. It's odd, but contrary to all the mathematical evidence I have, I just got this gut feeling that the economy will be doing just fine for the next 12-16 months.

Alas, perhaps I'm one of the few economists that hasn't had the soul of economics kicked out of me and instead of replacing it with advanced econometrics, statistics, mathematics and models that no matter how complex are still finite, I still have a little faith in chaos, gambling and gut reactions.

Wal-Mart is Just SOOOOO EVIL!!!!

http://apnews.myway.com/article/20060921/D8K9A7TO7.html

The socialists always focus on what Wal-Mart pays its employees, ie-how much people make. They never focus on what truly matters, as it is purchasing power that really determines standards of living.

This is going to drive them nuts; a large, profitable US corporation doing what they couldn’t do in 30 years; delivering cheap drugs to the poor.

Morons.

Scott Stantis at It Again

So I'm OK with the ladies.

I'm better with words.

And I'm great with charts.

But Scott has a tendency to wipe me clean on all accounts with his pictures.



As I've said before, go visit him because I don't know how legal it is for me to post his cartoons here.