20 Pack, The Drinking Age, and the State of the Union

First, quite a bunch happened last night on I Love Money 2. Once again, someone on the green team (both Milf and Becky Buckwild) threw the challenge. The other members of the green team did what I thought was smart, and put those two and the weakest other team member, T-Weed, in the box. Frank the Entertainer then voided T-Weed's check. But that's when it got interesting. The guys had to choose who they thought was the most loyal guy, and the girls chose who they thought was the most loyal girl. The guys choose 20 Pack by a large margin. I thought that was a little weird. 20 Pack was an original captain, but he never took any responsibility. He just had the Entertainer choose his whole team. So I guess he has been loyal to the Entertainer, but why would Buddha vote for him? And why didn't anyone vote for Bones? He is definitely the most loyal person on the show.

The girls ended up picking Saphari, which I totally didn't get. Wasn't she paymaster last week, and didn't she send home Leilene, who shed] claimed to be great friends with? That doesn't sound loyal to me. Regardless, it turned out that 20 Pack and Saphari were the new team captains. One guess who didn't get picked. Of course it was Buddha. Well at least we don't have to deal with the Entertainer constantly bitching about Buddha anymore. But the strangest pick was definitely 20 Pack's second pick, which was Buckwild. Now Buckwild has been very open with the fact that she is in an alliance with Saphari, and has thrown challenges to keep that alliance. So why the hell would 20 Pack pick her when Saphari is the captain of the other team? He is just asking for her to throw challenges down the road. I really hope she doesn't though. My biggest complaint with the season so far is how easy it is to rig the challenges. In the game's current format, since a member of the other team gets to choose who goes home, there is a large incentive to simply throw challenges. If you do it consistently, then you will never go home because the other team will want to keep you around. It's stupid. It makes the challenges meaningless, and all that mattered was which person from the green team was sent home this week.

On a non-reality TV front, I saw a special on 60 Minutes on Sunday (it came on after the Nova-Cuse game, and i was too lazy to change the channel as I was doing dishes) about the 21 year old drinking age in the U.S. Now 60 Minutes is usually a liberal, populist, crappy show designed to scare old people into thinking that young people want to kill them and that government, not personal responsibility, is the solution to all of liefs problems. However, this week they highlighted the failed system we have in the U.S. to stop drinking under the age of 21. Personally, I think a minimum drinking age is ridiculous. Everyone always makes the point that you can be drafted and go to war at age 18, but you can't drink a beer. I think there is an even more fundamental problem with a minimum drink age. As any young person will tell you, there is a very strong and entrenched market for underage drinking. People are going to do it regardless of what the government tries to do about it. Now if the enforcement penalties are made stronger, it will deter people at the margin up to a certain point. No matter what the government makes the penalties, there will always be some people who want alcohol (see prohibition).

Now when a market exists for a product, the market can be governed by one of two sets of rules: either the rules imposed by the government, or the rules of a black market controlled by an illegal, non-governmental group. When it comes to underage drinking, the supply for its black market is provided by a variety of groups: people over the age of 21, teenagers with fake ids, theft, and corrupt store owners. The problem that occurs in a black market is that there is no forum for resolving disputes created in the market. The government's court system provide this service in a governmentally regulated market, but I doubt a 17 year old is going to file a fraud claim when his 22 year old neighbor rips him off when he picks him up some delicious keystone lights. Now this isn't as big a deal for underage drinking, because there are so many suppliers the market can regulate itself. Unhappy with your neighbor's service? Just go to your cousin.

However, there are many other black markets where this is a much more serious problem.
For example, take the market for illegal gambling. Historically, this market in the U.S. has been shunned by the government and controlled by racketeering organizations like the mafia. Because the official governmental position in most jurisdictions is total prohibition, there are many fewer suppliers for the market. In order to serve this illegal market, the supplier must be well organized, powerful and able to defend its market share. Due to the government's non-participation, governmental rules will inevitably be disregarded by the market's service providers. Think about it: if you are serving an illegal market, and one with strong penalties no less, why would you act legally to maintain you market share. There are limited incentives to do so. The same can be said for today's inner city gangs controlling the illegal drug market.

The moral of the story is that when a good or service has an inherent market, there will always be people who are going to be willing to serve that market. When the government creates a prohibition for that market, they are doing nothing but taking themselves out of the game. Obviously the government prohibition will deter some people, but as the number of suppliers drops, as will happen with a prohibition, the cost of the goods or services goes up, creating a larger incentive to enter the market. Eventually the price will reach a point where it is extremely profitable to serve the market, and since the service is already illegal to provide, there are few incentives to maintain market share in a legal way. At the end of the day, the suppliers will eventually become the people who will do the most, usually violently, to maintain control over the supply.

Now I'm not saying we should immediately make drugs and gambling legal, and end the minimum drinking age, but I do think we need to rethink some failed strategies. If you could buy currently illegal drugs at the store, you would be able to take away a major source of power and wealth from inner city street gangs. It is also one of their largest sources of conflict. It may be possible to reduce the number of violent crimes related to this illegal market by allowing the government to step in and regulate its sale. Additionally, it would vastly reduce the number of jailed inmates, eliminate the costs of fighting the war on drugs that has failed over the past 40 years, and take power from violent criminals that currently control the market. Just some food for thought.

Lastly, Obama's first state of the union address is tonight. I'm definitely going to watch it and am interested in what he is going to emphasize. I'm sure I'll be back in a day or two to complain about it, but for now here is a cartoon I found funny (click to make it larger).

First Thoughts on the Obama Housing Plan

Although I have yet to read the specifics regarding Obama's new mortgage bailout, I do want to comment on such governmental actions on a more fundamental level. Traditionally, progressive politicians have attempted to redistribute wealth in America to create a more equitable allocation of capital. In other words, they would tax wealthier individuals at higher marginal and average rates than the poorest people. These higher taxes would then be used to pay for programs that helps the poorest Americans. Regardless of how you feel about these policies, at least the Democrats were honest and straightforward, stating that this was their ultimate goal. This mortgage bailout plan is not a redistribution of wealth in the traditional sense though. Instead it is a redistribution of debt, where fiscally sound Americans who did not take on bad debt are forced to pay for unresponsible Americans who took out mortgages that they could not afford.

No doubt that the banks and financial institutions who approved these suspect mortgages, such as sub-prime and option ARM mortgages, are also to blame. However, what did the Bush administration and now the Obama administration do to hold these lenders accountable? Nothing but give them billions in bailout money. Of course at this point it would be extremely difficult for let these huge financial institutions fail, especially after companies like Fannie May and Freddie Mac have received implicit guarantees from the federal government for years, taking risk out of the financial system. But regardless of how this crisis started, we now must decide how to fix it. My question to you is if we aren't sure how the housing crisis began, how do we expect to fix it on a fundamental level so that it won't happen again?

The answer is no one really knows how to fix it at this point. Over the past year, it has been shown that our current system of assessing risk through institutional credit ratings is flawed, and it is extremely hard to assess the value of mortgage backed securities for a large number of reasons. It is hard to tell how many foreclosures there will be, what if any aid will come from the government, and the securities have been partitioned/repackaged/resold so many times it is hard to tell who owns what. However, it is fundamentally unfair in my opinion to make fiscally responsible americans to pay for the excesses of those who didn't wait to put a full down payment on their homes, and were then forced to accept more unfavorable loan rates.

Over the twentieth century, economists worldwide have rejected central planning of economic forces as the most efficient way to run an economy in favor of the price mechanisms of capitalism. Regardless of how intelligent you think Obama is, even he doesn't know how to distribute this debt in an efficient and fair way. The way to rid our economy of this bad debt fastest, and in a way that is most fair to the large majority of the public, is to let bad contacts default, and force the debt on those who took the risk: the lenders and borrowers of the bad loans. Let our free market system work. The bankruptcy system is the U.S. is designed to protect people in these situations and will quickly and efficiently remove the bad debt from the system. Obviously this is a difficult option. The markets will fall, people will lose their homes, and financial institutions may be bankrupt. In the long run, however, this will be a much cheaper solution for a majority of americans, who would be forced to pay higher taxes and an inflated rate for goods and services if we finance a bailout using borrowed money.

Everyone likes capitalism during economic booms, as it effectively distributes income in a fair way. However, now that we are in an economic downturn, people are scared to let bad debts be payed by the people who created them. Until we hold the bad debts accountable, risk will still be absent from our financial system, leading us to repeat this same mistake once again farther down the road. And perhaps at that time we won't be able to borrow our way out of it.

Ramblings

I don't really feel like putting together a coherent article right now, so I am just going to ramble for a little bit. This is basically my stream of consciousness during any given day.

How is it that A Rod can get away with admitting to using steroids from 2001-2003 (he had sick numbers all three years and won the A.L. MVP in 2003), and Phillies reliever J.C. Romero gets suspended for 50 games to start the 2009 season for taking a supplement he bought at GNC? Romero told Phillies trainers about it as soon as he bought it, they Ok'd it, and he was repeatedly told by player's association officials that anything bought OTC in the U.S. was fine. Does this make sense? I know that is the way it is, and I'm not even that pissed about A Rod. I'm just pissed the Phils are gonna to have to defend their title the first half of the season without a sick left-handed, set-up man.

George's Cafe sucks. It's over-priced, and although the hippies do provide good service, the selection of food other than the breakfast tacos blows. For a better lunch, I would recommend the Texas Expresso Cafe.

I had a frito pie for the first time ever on Sunday night. Why do they not have those things up North? One of the most delicious things I've ever eaten.

I'm pretty sure Keystone Light orange cans do not exist. I must have gone through 50 24-packs and never found one.

Leilene may have been the most manipulated person on any VH1 show, EVER. Throughout I Love Money 2, people would yell at her, and she would immediately cave and do what ever they wanted. It is fitting that she got kicked off by one of the people she thought was her best friend (Safari). She may be the biggest pushover in america.

Speaking of reality tv on VH1, I may be done with tool academy. Now that Tommy's gone, the rest of the contestants really suck. You have a little chump from jersey with a girlfriend whose got 50 lbs on him, a dude that goes by Matsuflex who hasn't ever had sex with his girlfriend, and a guy who originally came on the show with two girlfriends and finds it necessary to say dude and yell all the time. Weak.

I'm really hungry. I could go for a frito pie right now.

I recently had a small debate over which receiver would rather have on the Eagles: Anquan Boldin or T.J. Houshmandzadeh. I love T.J. but I had to go with Anquan. He is big, physical and 5 years younger. I just love the flexibility he gives your team. He is a threat on quick screens, crossing routes, and deep over the middle. He is exactly the type of physical receiver the Eagles need.

Old people are ruining/bankrupting the United States. Greatest generation my ass. So what did they do? They won WWII and elected the officials who have ballooned the size of the federal government. What's so great about that. Everyone hates Nazis, and they just left tremendous amounts of debt for their grandchildren to pay off. And now they want more and more money through social security and medicare. And they can't drive. And they walk slow. Ruining america.

I don't know what to do about my middle irons. My swing has been to armsy lately, causing a bit of a hook, so I have been trying to drop my hands a little bit. My friend Matt says I may need to rework my grip. Suggestions appreciated.

Dell computers are really cool. Look what you can do with the webcam. You should buy a dell. Call 1-800-761-3355 today!

If I could choose five athletes to spend one day with they would be Tiger Woods, Ocho Cinco, Pat Burrell, Brian Dawkins, and Shane Victorino.

I think the Texans red alternate jersey may be my new favorite NFL jersey. My least favorite is the Cowboys white.

That's about all I got.

The Final Version of Obama's Spending Bill

Well as many of you probably already know, the House and Senate have reached a compromise on Barack Obama's first major piece of legislation: his economic spending bill. Notice how I don't call this bill a stimulus. Although this bill may stimulate some economic areas, mostly the bureaucratic infrastructure of the federal government, it is truly a spending bill that will benefit the special interest groups that inevitably benefit from any type of Washington spending. The Wall Street Journal has a breakdown of the 1,073 page, $787 billion spending bill here. Just a couple of the many things that caught my eye: $6.3 billion in grants to state and local governments to increase "energy efficiency;" $20.0 billion in increased food stamp spending; $6.3 billion for "money for federal power marketing administrations in electric power transmission systems;" about $500 million to indian reservations (many native americans on these reservations don't pay taxes); $1.1 billion to compare the effectiveness of medicare, medicaid, and SCHIP; $6.4 billion for communities to upgrade waste water treatment (for an example of how the city Copley, Ohio will spend this money, see here); and $40.6 billion to states to help balance their budgets.

Regardless of what you think of the spending yourself, these expenditures can hardly be called "stimulus" spending. All that is going to occur is the size of government is sure to increase, and this money will be spent in inefficient ways, on parties chosen as the "winners of the grant" by the federal government. What gets me the most angry is even the most arduous supporters of government spending admit that most government programs are inefficient and an overall drain on the economy. Let me give you an oversimplified, but still telling, example.

One of the shows I watch on A&E is called "Parking Wars." The show sends camera crews on the road with Philadelphia Parking Authority meter maids, and films the scenes that occur at the PPA towing facility when people attempt to get their cars back after they have been towed. Now, the city of Philadelphia voted over 90% for Barack Obama in the last presidential election, and traditionally the city has been a Bastille for big spending, big government liberals (for a possible explanation for why Barack Obama received such a high percentage of the vote when democrats only account for about 75% of the city's registered voters, see here). So it is a safe assumption that most of the people on the show who are in trouble with the PPA are also supporters of Barack Obama, the democratic party, and big government. However, the reason the show is so hilarious is the amount of frustration people have when they are forced to deal with government employees. Most of the time the people become enraged when they learn the long bureaucratic process they have to go through, and the huge governmental fees they must pay to get their cars back after they have been towed. First, they show up at the impound lot. Then they learn that they have to go to traffic court before they get their car back. They then go to traffic court, plead guilty and pay their violations. Then they get back to the impound lot with the notice from traffic court allowing them to regain access to their car only to learn that they can't get it back because although the title is in their name, the car is registered in their wife's name. So they are forced to bring their wife down to the impound lot. Each time they return they are forced to wait from the back of the line, which could take several hours alone. And finally, just when they are about to get their car back, they have to pay towing and storage fees in excess of their actual violations. No doubt that various other governmental "fees" are included on the bill. And the whole time the scream about how they hate having to deal with city workers! And this is just one example of several similar scenarios that occur on the show on a routine basis. As you could guess, this cat and mouse game enrages everyone involved, government workers included, although no one seems to ask why the process needs to be so difficult.

Although this example is parking, I am sure that the bureaucratic experience is the same for many other governmental programs such as social security, medicare, and OSHA just to name a few. Privatization of such a process, where competition leads to driving costs close to those at the margin, would greatly increase the efficiency of such an experience, and lower costs overall. Now not all programs could be privatized overnight or even ever, but non-essential government functions surely could. I don't want to discuss the entire privatization issue here, but I simply want to point out that almost everyone is in agreement the government does not operate in an efficient manner. There is a tremendous dead weight loss due to administrative costs of government programs. Almost quarter of a billion dollars in the current stimulus is earmarked simply for spending oversight. Oversight alone. And that money is used to make sure that the stimulus money is used properly. It would not be used to try to increase the efficiency of government spending, just to make sure the right people in government get the money. Who are these people getting the actual big bucks in this stimulus you ask? Life long bureaucrats without no agenda other than making sure their agency looks important and that their own jobs are secure. Not to say there aren't people in these departments trying to spend the money wisely, but at the end of the day the only incentive for them while spending the money is to make sure that they will still have a job once the money is spent. Its just human nature. Until we realize that when government gets involved it only drives up costs, and theses costs hit the poorest americans harder than middle and upper class americans, we cannot as a country grow our economy at the greatest possible rate. But for now, we can all take solice in the fact that almost a trillion dollars, or about 6% of our total GDP, is going to be spent and only a small portion of Americans will actually see results. If you are one of the lucky ones who work for the government congrats on fooling everyone else out of their own money once again.

quality television programming

Several times my friend's and I have had what I call a "Television Channel Draft." How it works is that you get a group of people together and you begin picking tv channels in a traditional draft format. The premise of the whole thing is that for the rest of your life you can only watch programs and games on the channels you pick. Now as many of you probably would have guessed, my first pick was always espn. However, after that it starts to get a little more challenging. I'm a huge fan of the discovery channel, the history channel, and comedy central; however, over the past year or so two channels have emerged as my personal picks for the second and third best channels on television. Coming in at number three has to be A&E. I'm sure many of you are thinking, isn't A&E that channel that had Murder, She Wrote and McGyver when I was a kid. Well yes, but over the past year or so A&E has become a powerhouse in true reality television. Groundbreaking shows such as The First 48, I Survived and my personal favorite, Intervention, have moved A&E to close to the top of my list. But there is another channel that has come even further than A&E in terms of upgrading its programming. Of course, that channel can be none other than the infamous...VH1.

I used to feel very differently about VH1 and the programs on it. VH1 used to be one of the worst channels on television. Shows like Pop-up Video and Behind the Music were flat out terrible. Even some of VH1's relatively recent shows like I Love the 70's/80's/90's and those stupid countdown shows were the same bullshit over and over where the network took a sort of funny concept and killed it when they added the commentary of some of the worst comedians on tv. But about a year or two ago VH1 came up with one of the biggest innovations in TV history: celebreality.

The original show that started the change was the infamous Surreal Life. Although the show itself was relatively hilarious copy of MTV's real world, its lasting legacy is that it was the great-great-grandfather of all of the great shows currently showing on VH1. It began with a pretty terrible spin-off called Strange Love which was a love show between surreal life celebs Flavor Flav and Brigitte Nielsen. However, Flav and Brigitte's love didn't flourish, so Flav did the only responsible thing and went on a bachelor type show called Flavor of Love and the rest is history. Over the next few seasons several other spin offs were spawned and excellent titles such as I Love New York, Rock of Love, Charm School, Real Chance of Love, and the ultimate spin off, I Love Money, began being broadcast. If you love stupid people making asses out of themselves, then you will LOVE all of these shows. Currently, there are three absolutely awesome shows airing new episodes on VH1: (in no particular order) Rock of Love Bus, Tool Academy, and I Love Money 2. As each of the seasons progress I'm sure I will comment on all of these shows, but for now I want to talk about last night's episode of I Love Money 2.

Heat is an idiot. Actually he may be one of the stupidest people who has ever made it on tv (Tamara excluded obviously). I can't believe how big an idiot he is. In the episode's challenge, Heat was his team's captain and got to choose who on his team would get to box in each round of a best of seven series. His team was up 3-2 with only two fights remaining, and Onyx was due to fight with for the other team. Now before the challenge Onyx had formed an alliance with Heat, the Entertainer, and 20 Pack to throw the challenge. All Heat had to do was put anyone with half a chance up there, and the challenge was over. Instead he chooses the smallest girl on his team, Prancer, which basically meant there was no way Onyx could throw the challenge without exposing the alliance. So Onyx beat Prancer setting up a chance for Heat's team to lose the cahllenge. Although Heat's team still ultimately won the final fight and the challenge, he ended up exposing his spy on the other team, destroying an excellent opportunity to sabotage later challenges. And that wasn't even Heat's biggest mistake! During the power outing, Heat went out with Onyx, Buckwild, and Leilene to try to determine who he would send home. Of those three Leilene was obviously the worse competitor and was the only one not offering to be a spy for Heat. However, during their one-on-one time Heat was seduced by Leilene and they began to make out. Heat asks what she would be willing to do to stay, and although you don't really hear an answer (cough...cough...blowjob), Heat decides to keep Leilene and send home Onyx, destroying his chance to hurt the other team. What an idiot. The exact same thing happened on I Love Money 1: Heat fell in love with Destiny, lost focus, got his girl stolen by the Entertainer and then was sent home. I predict a repeat performance. Heat is an idiot, and he will be gone within 5 episodes. Regardless I am real excited for next week's episode, and hopefully the green team, my personal favorite, can get a win and send someone like Heat, 20 Pack, or the Entertainer home. And don't forget about the series premier of T.I.'s Road to Redemption tonight. Although it's on MTV and not VH1, you've gotta love that celebreality!

A Couple of Things

Over the past few days there have been several noteworthy events that I want to quickly comment on. First and most importantly, the Phillies resigned Ryan Howard to a 3 year $54 million deal. This deal buys out the rest of Howard's arbitration years, keeping him a Phillie until the end of the 2011 season. I love this move. Howard is THE premier power hitter in the game today. He led the league in home runs and rbis last season and finished second in the MVP voting. After Howard won the largest arbitration contract in the history of league ($10 million for last season), there was all kind of talk about how bitter this year's round of arbitration would be. Well now we don't have to worry about those talks anymore. Personally I would have loved to see the Phils lock Howard up in an even longer deal, but I can live with three years. I don't care what all the haters say about Howard's strikeouts because the large number of them isn't all that important for a slugger like him. He is paid to hit the long ball and drive in runs with runners in scoring position. He does that better than anyone in the league, so what if he strikes out sometimes. You gotta swing hard to hit it far, and who cares if Howard doesn't move the runners with less than two outs. That's not his job. And hell, a strikeout is better than a double play.

This was one of the few bright spots in the current World Series champions off season. I hated the Raul Ibanez signing. We let one of my favorite Phils, Pat Burrell, go, and in exchange we signed a much older player, and he signed for more money and years than Burrell agreed to with the Rays. Not to mention we lost our most powerful right handed bat in a left heavy lineup and replaced him with a lefty. And worse of all, we didn't offer Burrell arbitration so even though we lose a pick in the 2009 draft for signing Ibanez (Type A free agent), we don't get one back for losing Burrell. Not a great start to the Amaro era.

Lastly, I would like to write a few paragraphs mourning the loss of the Blind Pig. For those who don't frequent the Austin bar scene, the Blind Pig is one of Austin's most popular bars on 6th Street and unfortunately it burned down early Friday morning. When I first moved to Austin, the Blind Pig was my first bar on sixth street, and it was most likely the bar I frequented most often when I was downtown. The only people I don't feel bad for are the bouncers. I hope this causes some of them to lose their jobs. They are assholes. Even my buddy Mark, who has only been to Austin once, remembered the Blind Pig fondly and was devastated (ok maybe not devastated) to hear the news. Now I'm sure this won't be the end of the Blind Pig, as it will surely be reopened within a month or two, perhaps even with a few renovations, but it is still a big loss for downtown Austin. That's all I got for now.

More Stimulus BS

The weekend version of the Journal had an editorial entitled The Stimulus Tragedy that further highlighted everything that is wrong with the direction the Obama administration is heading. I'm not sure what is sadder, that Barack Obama actually can call this pork barrel spending an economic stimulus or that Americans are actually retarded enough to buy it. One example of how the money is being wasted is chronicled here with regards to the $142 billion in "education" spending. Just to put that number in perspective, it is almost double the total expenditures of the entire Department of Education for all of 2007. And to think that Republicans originally came to power in Congress in 1994 campaigning to eliminate the Department of Education altogether, but I guess the easiest way to fix something is to throw more money at it. I'm sure it will be used better this time around. Once again Washington is doing what it does best, making itself bigger while not really doing much else.

The Real PreaknessTragedy

I would like to thank my friends Jared and Andy for bring this me this unfortunate news. Beginning this year Pimlico Racetrack will no longer allow alcoholic beverages to be brought into the infield during the Preakness Stakes. As anyone who has attended this glorious event knows, this will effectively kill the Preakness as the premier beginning of summer mid-Atlantic bash. And to add insult to injury the racetrack officials have announced that in order to soften the blow there will be a free ZZ Top concert and domestic beers will be on sale for $3.50. Now I didn't mind paying $5 for jager shots at the preakness, but $3.50 for every beer? To say I'm disappointed is a large understatement. This is gonna hurt attendance more than Barbaro.

More on Keynes

Although I don't expect to update this blog everyday, I saw an excellent article in today's Wall Street Journal by former House of Representatives majority leader Dick Armey that was directly relevant to yesterday's post. The article entitled Washington Could Use Less Keynes and More Hayek, addresses some of the major criticisms of government deficit spending in order to try and spur growth. Without repeating the article, I just want to emphasize his point that Keynesian theory ignores the self-interest incentives of the government employees that implement entitlement programs to use the funds in a way that best serves their own interests, rather than the interests of the public. There is no way that this money can be spent in a more efficient way than it would have been spent by the public themselves. Every individual knows how to best spend his own money so that it will maximize his own benefit, and we should allow individuals to distribute their own capital rather than inefficient government planning. Keynes followers refuse to allow the price system to distribute capital efficiently, which is the most fundamental building block of a free market system.

Welcome and a Stimulus Intro

First of all, I'm not sure who is actually going to read this thing, but I've decided that I complain a lot about a lot of different issues, so in order to reach a larger audience I've decided to start my own blog. What I am actually going to write about is still very much up in the air, but I think it is going to be a mix of many different topics. I am passionate about sports, especially Philadelphia and Penn State teams, so I'm sure they will come up at some point. I am also very disgusted with the direction America is moving on the political front, both parties included, so politics and economics will also probably be a large source of potential posts. Lastly, everyday life, especially the stupidity of dumb people, tends to get me angry sometimes, so I'm sure there will also be some very random posts about some very random topics. I am hoping to update this thing at least once a week for as long as I can fit it into my schedule. Hopefully I don't burn out. Well, please add any comment with things you want to discuss or hear me rant about, but otherwise let's jump right into my first entry.

I read the Wall Street Journal on a daily basis, and I found an article from Monday's paper entitled How Government Prolonged the Depression by Harold Cole of the University of Pennsylvania and Lee Ohanian of UCLA extremely well researched and articulated. The main premise of the article is that FDR's New Deal programs actually lengthened the great depression by slowing private economic growth and creating an economic situation that maintained high unemployment.

Now I went to a very good public high school in a suburb of Philadelphia. I took American history in 8th and 11th grades and learned all about FDR and the New Deal. I was taught, as I'm sure many of you were, that FDR was one of our greatest presidents and that it was his policies that led us out of the great depression. What complete bullshit. It enrages me that this kind of stuff is taught with no other alternative explanations. This theory of the end of the great depression are based on the Keynesian theories that government deficit spending during a recession is good and will help spur new economic growth. I can say fairly certainly that in 2009 most respected economists (that communist Paul Krugman excluded) have rejected Keynes' viewpoint and adopted the Austrian and Chicago schools of economics expressed by Friedrich Hayek, Ludwig von Mises, Frank Knight and Milton Freidman. However, I never learned any of these names in school. Instead I was force fed the usual crap you hear about FDR creating new jobs and helping curb out of control capitalism that was rampant in the 1920's.

Well there are so many things wrong with the last statement that I won't address them all here, but I do want to address the idea that massive deficit spending by the federal government is good way to strengthen the economy and end a recession because it is directly relevant to the proposed $800 billion stimulus being debated by Congress and supported by President Obama. Once again the American people are being fooled into thinking that this will save the economy and "change" America. In reality this "stimulus" bill is nothing more than a massive spending bill for pet projects for special interest groups. For a more detailed breakdown of how the proposed bill will be spent see Highlights of $825 Billion Economic Stimulus Plan. Although the spending seems to most like it is being spent on worthwhile causes, as is true with 95% of government spending, it will surely be spent more on bureaucracy and greasing the chops of powerful lobby groups than going towards legitimate projects like roads and bridges. Due to administrative costs, government spending is inherently less efficient than private distribution of capital.

If Obama were serious about saving the economy he would issue an $800 billion tax cut that would cut the marginal tax rate, not issuing useless $500 rebates. For a tax cut to stimulate economic growth it must be at the margin. In other words, the tax cut must lower the rate that applies to the last dollar of the individual's taxable income. If tax cuts are not marginal, as in the case with so called "rebates," then there is no incentive for an individual to produce more and earn more income. As we saw with the Bush tax cuts, cutting marginal tax rates create the incentives necessary to create growth and actually increase government receipts even though the average tax rate is lower.

Instead of cutting the marginal tax rate, Obama wants to increase deficit spending to the highest levels in American history. I am going to address the effects deficit spending, the national debt, and the true cost of an entitlement society in a later entry. I am sure you are all very excited. Anyway, sorry for the length of this first post. I'm sure later updates will be much shorter. As I said comments are appreciated, whether you love or hate my ideas, so say what you want. Thanks for reading.