The 6 Pack Economist

I personally don’t care.  On my list of candidate positions it is just above if we agree on our choice of cereal.  Both sides on this issue really take it too far in the ramifications of either having gay marriage or not having gay marriage.  The pro-gay marriage side would have you believe that it is on the same level as forcing blacks to use certain water fountains or blocking the right to vote.  The anti-gay marriage side would have you believe that the nuclear family will instantly break apart and die because Tim and Tom or Jane and Joan got married.  For the pro-gay side lets be serious, you can do everything an actual married couple could do except have some of the legal protections from the state.  For the anti-gay side the no-fault divorce and Hollywood has already made a mockery of marriage.

Now that I have given my opinion, let us go into some little tidbits of things I thought about pertaining to this issue.  I like to look at things to find out the hidden consequences or things that most people did not think to include in their equations.

Why did government get involved with marriage to begin with?
The government or at least the United States Federal government did not really care who was married till the 1930s.  For those that took a history course the reason they started caring in the 1930s who was married to who was that social security benefits were started then.  Once the government started  paying people they begin to want to have a say in what is going on (this is a hint to anyone taking government money).  In the 1930s gay still meant that the person was just happy.  It was not really even considered that marriage was anything but a man and a woman (or women).

Why did government give benefits to being married?
There are a few reasons for this but the biggest is that hetero sexual marriage has a tendency to produce little future tax payers.  In addition the best way to ensure that the little taxpayers truly grow up to be taxpayers and not little criminals is to try and keep the parents in the same house.  Please don’t comment that there is no proof that kids grow up better in a house with mother and father I don’t care about your lies.

Is there any downside for gays and gay marriage?
Why yes there certainly is.  Although it is would not be noticeable for about three generations.  Let us assume that being gay is genetic (or at the very least people genetic predisposed to be gay).  In addition once gay marriage is legally recognized it will become social acceptable to be openly gay.  I would say it is acceptable now, but I guess it not true everywhere.  Here comes the downside.  When people stop hiding that they are gay and stop marrying heterosexuals the primary mechanism for the transfer of the “gay-gene” will be halted.  Remember that so many of us are unplanned pregnancy, and in a gay relationship there just is not an unplanned pregnancy.

I think we should all think about what the state of home decorating will be in 60 years.  Do we really want that?

Well it seems that there is a report out that the TARP program could be mismanaged and is open to corruption.  In other news water is wet and Lindsey Lohan is unstable. 

Did anyone seriously think that when the 700 billion dollar number came out that is was going to be spent wisely?   I thought it was joke when I first heard it, a bad one but still a joke.  It turned out that it was a joke on us.  To top it off a few months later we get a gigantic stimulus bill that will also have to be paid for.  Then the regular budget of the government will run into numbers unthinkable.  Who the hell is going to pay for all this?  We are.  The rich will pay for it directly while the poor will pay by inflation.

This whole debacle is just another in a long list of examples of government mismanagement of money.  This not just an American problem, all governments have the same problem.  It has to do with a combination of human conditions.  Greed and Sloth are the most prevalent.  Greed in that the various representatives want to get the money to pay back constituents and their own pockets.  Sloth in the bureaucrats and the elected reps in ensuring the money is spent after due diligence.  The reason they can do all of this is that it is not their money, it is ours.

I really thought I had more to write on this, but so much of it is too obvious.

I am sorry for the delays in posting but my life recently has gotten very busy. It should all calm down in a week or so. In addition I have been working on my own theme for the website.
I know that this is disappointing to the 8 of you. I will be back in a week or so.

I am sure that Black Beard, Blue Beard, and Jack Sparrow are rolling over in their grave watching these poorly styled amateurs pretending to be pirates.  I mean what happened to pride.  These guys are running around in Uncle Billy Bob’s dingy.  I want frilly shirts and Eye patches damnit!

I am happy to see that a ship full of American merchant marines fought off a group of these poor excuses for pirates.  But then you have some jerks stating that they should have just hung around and waited to be ransomed like a bunch of …..  Well place your favorite nationality here.  

The International Maritime Bureau basically wants the crews of these ships not to take any action once boarded.  Even prior to boarding they do not want the crews to take any lethal force just speed up and spray water on the attackers.  Unfortunately the people making the rules do not understand basic animal instinct.  And these guys are just animals.  Rule of the jungle states that “the weak and easy targets are eaten first”.   

I think (for whatever the hell that is worth) they should immediately change the rules.  The crews of these merchant vessels should be instructed in how to repeal invaders.  Ships should be equipped small arms and the crew should be trained in their use. 

This will immediately increase the cost of being a pirate.    Remember I believe in the whole risk and reward ratio.  This pirating business has become such a boon because there is no cost to the pirates.  They show up in a boat that seems to be something you would rent to go fishing while vacationing at the sea shore.  The crews of ships just stepped aside while the pirates took over ship and made the call to the company for ransom.  I think the call went something like this.

Somali Pirate: “Hello, Damnit a god damn machine”
Corporate Computer Answering Service: “Press 1 for English, Pora Espanol dos” (I don’t speak Spanish sorry)
Somali Pirate: “I am going to go with English is just makes everything easier with the banks”
Corp Comp: “If you know your parties extension dial it now or press 1 for more options”
Somali Pirate: “What is that guys extension.  Damn it where did I put that number.  Oh here it is”
Corp Comp: “Now transferring you to:  Ransom Department”
Somali Pirate: “I hate waiting on hold. This is the problem with the ransom business.  So much competition that I have to wait on hold now for 30 minutes.”
Corp Comp: “Your call is very important to us please continue to hold”
Somali Pirate: “What bull shit.  If it was that important you would pick up the phone”
30 more minutes later.
Ransom Department: “ Hello may I help you”
Somali Pirate: “Yes I took control of the ‘We are big Wussies’ cargo ship and would like to be paid.”
Ransom Department: “Do you currently have an account with us?”
Somali Pirate: “Oh yes of course, I am not an amateur.  Account number is  ‘1231######’” (I have to protect the Pirates identity)
Ransom Department: ”Is your TaxId still the same.  And you are aware that this money must be reported as income per the IRS”
Somali Pirate: “Everything is still the same.”
Ransom Department: “And how much should we pay this time”
Somali Pirate: “I am running a special this week.  Since I have two of your ships I will give them both back to you for 15 million”
Ransom Department: “Seems reasonable,  you will see the money in about 12 hours”
Somali Pirate: “Oh thank you very much.  Nice Doing business with you”
Ransom Department:  “Please do not hesitate call for your next ransom, good bye”

These guys have set up a smooth process oriented business around this ransom business.  Well until recently that is.  This small act of defiance, despite the danger, will force the pirates to think twice once it is known that someone might fight back.  It won’t deter many, unless more crews fight back.  The turning point will be when some pirates actually get killed in trying to take over the ship.  The escalation will continue as both groups begin a little arms race and more people will die.  In the end though the pirates will be forced to take more precautions and the gold mine of pirating will decrease.  Those that stay in the business will have to up-gun themselves.

The act of up-gunning themselves will be the undoing of the groups.  Primarily the reason why they could not take these rinky dinky boats out to go do pirating is they would not stand up to the job.  They will have make or modify boats specifically for the purpose of raiding ships.  These ships will be more easily spotted and chased down.  The boats will be spotted at the bases of operations and then one night a squad of SAS or Seals leave a bunch of dead bodies.

This brings everything back to a very simple point of life.  If you don’t fight for yourself you will get walked over.  Once you are known as someone who will not fight back, then everyone else around you will also walk over you too.  On the other hand if you are known as not taking peoples crap then those around you will not give you any crap.  They will even think twice about giving you crap that you deserve.  Why, because it comes with a cost, the cost of you fighting back.

The current financial crisis is a big example of how nature will always equalize a system.  When the consequences of an action are eliminated the rate of the action will increase.  Eliminate the hangovers and people will drink more.  I would at least.

All things in nature will eventually equalize themselves, because a system imbalance cannot exist for long.  For instance if you eliminate the wolves; the deer will eventually over populate the area and start committing suicide by jumping in front of your car.  I think they miss the wolves too much.  So the system self equalizes. 

Another example of risk and reward system we should all me familiar with is our sex lives.   What do you think would happen if a bunch of 20 something’s were kept on college campus but were told that pregnancy could not happen and STDs could not be caught?   In three months half the campus would be pregnant and the other half would be scratching themselves wondering what is wrong with their pubes.  I am not condemning them.  I would have taken part in such an experiment too (I would have been a whore but nobody wanted to be a whore with me).  So much for memories, either way you should have gotten my point.

The current crisis can be tracked to who ever let Fannie Mae and Freddie Mac to buy very crappy mortgages.  The rest of the funny financials like collateralized debt securities and derivatives were simply the mold that grew from the cesspool of Fannie and Freddie taking risks no one in their right mind would take.   Normally when a private corporation would take unneeded risk it would burn out and die or outside investors would refuse to underwrite the endeavor.  What made Fannie and Freddie different was that they were tacitly guaranteed by the government.  This means that the underwriters had less risk of failure because if worst came to worst the government would take care of everything.  These underwriters, investors or gamblers saw rewards that were better than the risks of underwriting the companies. 

For period of time the imbalance of the system was balanced periodically without crashing the system because the gains and leverage were not great enough to cause the system to collapse.  Housing prices went up and went down for all of eternity.  What made this different was the timing.  Stocks were tanking after the dot bomb debacle (another example people not using their heads) and the Fed was trying to get the economy moving again.  The Fed lowered interest rates making money very cheap.  In any boom and bust cycle there are still winners.  These winners began investing in real-estate. 

Shortly before this time Herb Moses an executive a Fannie Mae was playing hide the salami with Barney Frank.  Barney Frank at this time was in charge of making sure Fannie Mae was doing good business.  He opposed the transferring of Fannie and Freddie oversight from the Department of Urban and Housing development to the Treasury Department.  Granted either one is still a government run.  It seems that a government department whose job is to get people into housing would have a conflict of interest with a company who provides financing for homes.  So if said company will provide additional financing for the department’s projects they would overlook the horrible risks they were taking.  I have no proof that this is what happened.  But it is not too much of stretch to think this is what was going on.  Especially since the ramifications became so clear a few years later. 

Without anyone to watch over Fannie and Freddie and many investors willing to take extra risks because the government would back any risks these organizations ran rampant.  The CEO’s of the companies and the attendant executives began writing bonus rules that had nothing to do with long term viability of the organization.  So the bonuses that were given were for the amount of assets in management (or mortgages owned).  There bonus had nothing to do with the quality of the assets.  Who here can see what is about to happen next?  Raise your hand.

Fannie began taking all the mortgages they could get from the private companies in the market.  These were sold as all kinds of securities and what not.  Investors not knowing what fannie was doing but believing the government would come to the rescue were willing to write checks to fannie.  The private companies realized that they would not hold the mortgage more than a few months to a year would sell the mortgages to Fannie.  The risk was off the private company but they still had the reward of the first year’s mortgage payments and other service fees. 

The price of homes began to sky rocket.  Soon few people could afford a home with traditional methods.  But the private company could make up crazy mortgages that started off with smaller payments.  The buyer could afford these teaser rates in the beginning but by the time the real rates came the mortgage would be owned by another company (usually Fannie or Freddie).  These artificial buyers could only maintain this growth for so long.  Soon the market collapsed. 

In this game of hot potato Fannie and Freddie were left holding the potato.  Which means that the we the American tax payer was actually holding the hot potato.

Does anyone think that the government not accepting the money back from TARP a good idea?

I am against this on so many levels.  How can anyone who is not a total communist think that this is good idea.  If you were against the bailout to begin with how could you not want them to give the money back?  If you were for the bailout (and not a communist) of course this would be a sign that the banks are doing just fine and the crisis has passed. 

I initial thought that they way we would see government control more and more of our lives and economics was through a more soft style power like carbon credits.  But it now seems that they want something more direct.  And how else could you control things more completely then by actually controling the money. 

The primary reason for the mess we are in was because of the government directly jamming loan requirements down the throut of the banks and by allowing Fannie and Freddie to buy crappy mortgages and take on excessive risk because the government would come to the rescue.  All of the other crap about secruitzation of debt and repackaging loans would not have been possible without Fannie artificially taking more risk then would normally be acceptable.  And no one in the government would stop it.

Does anyone really think this is a good idea?  And who else is really scared of this?

I have a few random stories I looked and a little bit of how I feel about them.  Why because you people care what I think or you are just waiting for 5pm so you can go home and my website is as good as any.

Obama’s Eyes are bigger then his budget
I think the Blue Dog Democrates are starting to see what they signed up for when they ran in 2006.  Sure they were against the war in Iraq and started their career with rather admirable platform, unfortunately it was the rest of the stuff that goes along with running with a “D” behind your name that has scared them.  Combine that with most of the blue dogs being rather new to the game because they unseated republicans who had the seat for 8 years.    These same blue dogs are now starting to smarten up and realize that this budget is going to be a freaking disaster.  And they do not want to sign up for it.  Or all the long time democrates have gotten all the good pork projects.

New York and New Jersey will see less revenues
New York and it’s tag a long little brother New Jersey have decided that punishing the rich people for ever misdeed they want to attribute to them this week is more important than greater revenue for the state.  Raising taxes will lead to lower revenues.  Primarly because they will get the hell out of dodge.  Especially those in New Jersey or New York State.  New York City and Manhatten in particular have a certain intrinsic value.  Basicly a Manhatten address is worth about 50k a year.  But if you live in North Jersey you better like the color of rust and concrete while the rest of the state might be pretty, if you are moving anyway you mind as well go a little to the west and be done with it.

Who cares about taxes if you don’t pay them
This is a little unfair given the details of the tax problem.  It seems legit for the most part.  But it seems very hypocritical that the party of taxes is the same one that does not pay them.  The republicans tend to have trouble with airport toilets.  So democrates are hypocrites when they don’t pay taxes and republicans are hypocrites when they use their tax rebate for hooker.

I hate this crap.  It is freaking war not a damn sport played on the weekends. 

Did this guy not get the memo about the fact that in war you are trying to kill people.  You may try to not kill too many but in the end war is intended to brutal, harsh, and not something taken lightly. 

Why don’t they just outlaw bullets too?  Oh thats right when it comes down to it ,War is War and when faced with defeat all weapons will be used.  Making war more friendly just makes more war.  Keep War dirty, disgusting, and brutal lest we become too fond of it.