The Current Republican Party is a Huge Risk to the Future of the USA

 I am very concerned about the long term extremism that dominates the USA Republican Party.  Far too many people are complacent believing that the USA has done pretty well over the last 100 years so that will continue.  It need not continue. There are societal level critical risks today due to the behavior of voters over the last 20 years.

We have allowed our health care system to tax the economic well being of the country enormously. We pay twice as much as other rich countries for worse overall health outcomes. We also have huge waste stress and health care avoidance due to how poorly matched the system is to modern life. That tax can be paid and the economy can survive (as we have seen) but it is a large drag on the country and reduces the leeway to survive other mistakes.

The USA Capital (photo by John Hunter)

The Republic Party has been on a long term effort to destroy the rule of law in the USA. The continued tolerance of those that openly tried to overturn the results of the election they lost is a critical issue that anyone that cares about the rule of law should not tolerate. 

The behavior of the Trump administration at the Department of Justice and IRS were unacceptable. Trumps personal behavior while President should have resulted in his removal from office for anyone that cared about the rule of law or national security of the USA.  The Republic Party failed to put the rule of the law and the country above their personal fears about what Donald Trump would do to their careers. We need to elect people that care about the country first. We have not done so.  Unless we change we are taking a huge risk.

We need to stop tolerating those risking the constitutional republic we have been for over 200 years.  That is by far the most urgent and critical issue.  I cannot see voting for any Republicans that haven't loudly spoken out against the dominant practices (undermining the rule of law, putting a party and person above the interests of the country, ignoring national security concerns...) of the current party leaders.  And beyond that having demonstrated their actions to halt such behavior and withhold all support for Republican Party leaders that have gone along and pursued policies that undermine the rule of law and national security of the USA.

Inside Mike Johnson’s Ties to a Far-Right Movement to Gut the Constitution

For the last 10 years, the “Convention of States” movement has sought to remake the Constitution and force a tea party vision of the framers’ intent upon America. This group wants to wholesale rewrite wide swaths of the U.S. Constitution in one fell swoop. In the process, they hope to do away with regulatory agencies like the FDA and the CDC, virtually eliminate the federal government’s ability to borrow money, and empower state legislatures to override federal law.

As far-fetched as this idea might sound, the movement is gaining traction — and now, it believes, it has a friend in the speaker of the House.

The long term efforts of the Republican Party to disenfranchise voters is another completely unacceptable behavior.  I am extremely worried about the risk of voters electing even more officials that will overthrow the rule of law in the USA. But it is unacceptable to d disenfranchise such voters. If the voters in the USA decide to vote for those that will take future steps to toss out the constitutional protections we have had in our political discourse the last 200 years then we must deal with the consequences of such a catastrophic result. The Democratic Party in some states does engage in extremely damaging gerrymandering but the level of the the Republican Party's actions in this area have been enormously more damaging to the country.  And the Republican Party's continued efforts to suppress voting by those they feel won't vote for them is completely unacceptable and unique to them (in any significant form).

It is easier to ignore the huge risks to our society and hope everything works out ok. That is a huge risk. Once it is obvious that you should have acted strongly 5 or 10 years ago it may well be too late to make a difference.  

Don't be complacent. Speak out against those that are placing the USA's future at risk. Take actions to make a difference in avoiding the USA further degrading the protections of the rule of law and a government that is most interested in the interests of the country rather than institutionalized corruption favoring those with political power.

There is always going to be some corruption (Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren, 2007) but the trends we are seeing and risks under another Trump administration are potentially catastrophic.  Waiting until the risks are even more obvious that they are today may well mean you waited past the chance you had to save the future of the USA.

Related: Critical Thinking is Needed to Counter Propaganda (2018) - Preaching False Ideas to Men Known to be Idiots (2010) - The USA Should be Ashamed of Who We have Elected (2017) - Selling Out the Country - We are Electing the Wrong People to Control Our Government (2015) - The Continued Fall of the USA's Political Leaders that We Give Power To (2017) - Living Through Your Society Becoming a Police State (2013) - Society is being shaped for us while we are busy making other plans (2011) - Bikinis For Liberty (2010)

Economically Lucky or Not?

Most people on earth today and people on earth in all of history and people in the USA even in the last 120 years had it much harder than young people in the USA today. There is a very small window of people luckier economically: The USA Doesn’t Understand that the 1950s and 1960s are Not a Reasonable Basis for Setting Expectations.

Yes, that group of even luckier people is often some of those a few decades or even 50 years older in the USA (there may also be a few places in Europe in the last 50 years).

So while it is true compared to some of the luckiest people economically in all of history those young people in the USA today have it harder when compared to most every group (those in the USA previously, those alive today elsewhere...) they are extremely lucky.

I do agree that the policies in the USA that last 50 years that have dramatically helped trust fund babies and increased income inequality are unwise and harmful. We should fix those problems. But even with those problems there are very few places that someone could be randomly placed into where their economic luck is as good as those born in the USA in the last 30 years.

The USA Should be Ashamed of Who We have Elected

The bill passed by the House of Representatives in the USA today to cut taxes for the very rich and eliminate heath care coverage for tens of millions of people was a disgrace.

Every Republican who voted for this abomination must be held accountable

I won’t mince words. The health-care bill that the House of Representatives passed this afternoon, in an incredibly narrow 217-to-213 vote, is not just wrong, or misguided, or problematic or foolish. It is an abomination. If there has been a piece of legislation in our lifetimes that boiled over with as much malice and indifference to human suffering, I can’t recall what it might have been. And every member of the House who voted for it must be held accountable.

He is right. We have to stop voting in such reprehensible individuals.

The last 2 administrations have been very disappointing. The actions of the administration and the Republicans in the House and Senate now though are taking things to a level not seen since at least Watergate and maybe back to McCarthism.

It is shocking to see the country so let down by those we vote in and day after day see that disgrace trumped by even greater failures of basic decency, honesty or competence.

Naming the Results of Corruption as "Free Market" Failures is Damaging to Society

We shouldn't allow those using plain corruption to call it "free market." They, and their talking heads, seek to do so in order to prevent sensible actions being taken to address the corruption. It is much better for them if people think what they are doing is capitalism instead of just being criminals. That is the same as allowing kleptocrat dictators to call what they do "democracy."

Corruption destroys the potential value to the public. It does that when it corrupts free markets. And it does it when it is used for other purposes (corrupting the rule of law, etc.).

If we call corruption - "free market" - it makes it difficult to design the correct counter measure to address the damage being done to society.

Those practicing corruption win if those that what to have society address the damage being done think the problem is free markets instead of focusing on the real problem which is corruption. There may well also be some issues with how free markets work and therefore putting in place political adjustments is sensible to discuss in terms of "free market" adjustments. But most often people complaining about the failures of "free markets" are complaining about straight up corruption. And failing to address the problem for what it is results in what we see now - those problems growing instead of being addressed.

Related: We Need to be More Capitalist and Less Cronyist - Political and Corporate Cronyism are not Capitalism - Monopolies and Oligopolies do not a Free Market Make

Government Debt - How Safe or Costly is It?

My comments on: Debt’s a Funny Thing // Plus: Why We’re Not Prepaying Our Rental Mortgage

There’s also the national debt, which it turns out is not really like debt you or I might have at all, and — this was mind-blowing to me — most economists don’t even think the national debt is bad, and some actually think we should have more national debt...

Government debt is indeed different than personal debt. It is true some of the USA debt we owe to ourselves (we also owe a lot to China, Japan and others). The situation is fairly odd now for the USA in that the interest rates are extremely low. That makes the huge amount of debt less painful - but even now 15% of the spending by the government is just paying interest. And that could easily double without interest rates really even getting high. That is a real problem. To the extent we owe it to ourselves it is less of a problem but we owe lots to people overseas which means we are going to be paying back hundreds of billions of dollars to people in China, Japan... At these rates it might be fine (or even a good deal) sometime in the next 20 years it is likely to be very costly.

I wrote about the issue of government debt and the different impact of it being held overseas or within the country.

Japan has far more debt than even the USA. But it is also much more owed to themselves than is true in the USA.

The USA also has significant advantages over other countries. We can hold more debt safely than other countries due to the perception of the safety of the US$ and the size of the USA economy.

Related: Chart of Net Government Debt from 1980 to 2013 by Country - Which Currency is the Least Bad? (2012 - USD) - Who Will Buy All the USA’s Debt? (2009) - USA Federal Debt Now $516,348 Per Household (2007)

The Worst Aspect of TPP That Gets Nearly No Attention

Sadly among the worst aspects of the Trans-Pacific Partnership TPP (and also the TTIP) is the promotion of the copyright cartel's agenda along with very bad patent policy. Almost no one with political power is even talking about these huge problems with it.

I support free trade. I don't support the politically motivated trade agreements that impose the USA political donors' wishes on citizens of the USA and other countries.

The point that I most agree with, that those with power who are opposing the TPP mention, is the ludicrous abdication of national rights expressed in the trade deals (allowing companies to sue countries, say for enforcing their reasonable patent rules that the company doesn't like and has bought differing rules from the USA political parties).

It is true that we have to work together, and in doing so we need to reach agreements between countries that require making compromises. The TPP just has many horrible provisions paid for by USA political donors that are being imposed on other countries (and those countries are being paid to give the USA donors the favors via promises of USA military protection, access to USA markets etc.). It is a bad deal for nearly everyone. But the favors create a few huge winners that can pay to grease the wheels to buy passage in the USA (and elsewhere).

We need free trade that removes barriers to trade not that gives payoffs to USA political donors. Along with removing barriers a few conditions are justified but they should be kept as small as possible (things like no child labor, no slave labor, environmental requirements, safety requirements on exported material, etc.).

Related: Money Is Corrupting Our Political Process - Why Copyright Extension is a Very Bad Idea - We Need to be More Capitalist and Less Cronyist - I Can Spy on You, But You Can't Spy on Me

Democrats and Republicans Have Failed the USA on Health Care for Decades

It is so sad that Democrats and Republicans have played games for decades while those of us in the USA are stuck coping with the disaster of a health care system those two parties have created. A good health care system is very close to the most important feature of a modern society. Yet those two parties have bungled for decades and left us to suffer.

Many Flexible Health Plans Come With A Costly Trap

Vince Hess of Grandview, Mo., racked up about $800 in costs related to surgery for a broken hand in 2013. Hess, an actuary, first checked that his surgeon was in network. He had the operation at an in-network surgical center, but only learned later when he was billed that the two anesthesiologists who assisted in the surgery were not.

This kind of thing should result in health care providers (insurers etc.) going to jail. It is intolerable that someone has insurance and is expected to police the health care provided to them in such a way. Costs must be detailed up front or they should not legally allow to be billed.

I realize emergency situations will create some complexity with providing all costs in advance, fixing that part can be delayed. This behavior of billing after the fact for huge expenses has gone on for at least a decade. It should have been stopped after a year. It is intolerable that our political parties just make excuses and sacrifice our lives to disreputable business practices by health care providers. This needs to be fixed now. Not after another decade or two of the parties not fixing it. Now.

If you have insurance and use the insurance, the insurer must be expected to deal with the games hospitals and doctors chose to play to try and stick USA citizens with bills after the fact. This isn't about making the USA system close to as good as the second worst rich country heath care system this is about fixing an intolerable hardship placed on citizens by the medical care system the Democrats and Republicans have put in place over the last 20 to 40 years.

Related: Medical Debt Increases as Economy Declines - Out of Pocket “Maximum” – Understanding USA Health Care Costs - USA Health Care Spending 2013: $2.9 trillion $9,255 per person and 17.4% of GDP - USA Spends $7,960 Compared to Around $3,800 for Other Rich Countries on Health Care with No Better Health Results (2009 data) - Our Failed Health-care System (2008)

When You See the Problem as Capitalism Instead of Corruption You Seek to Solve the Wrong Problem.

Capitalism has huge benefits and some issues. I am frustrated that we are allowing anti-capitalist ideas to be called capitalist. Those ideas are predominately about allowing huge businesses to subvert markets and corrupt the political process. That is not capitalism, that is corporatism.

Corruption in our political system which then allows corruption of free markets as favors to those giving politicians cash is not "Capitalism." It is corruption.

Free trade is good. The secret TPP and other corporate-welfare/copywrong-cartel bill is not.

What we need to do as a society is stop the corruption. If we allow corrupt people buying politicians to undermine capitalism we all suffer. If we allow those corrupt people to claim what they are doing is capitalism, we all suffer.

Throwing out the best economic model because some corrupt people bring harm society through corruption and try to paint that as capitalism we lose. The problem is with the corruption. We can't accept the talking heads supporting the corporate welfare policies that are anti-capitalism from claiming anti-capitalist policies as capitalist or we will make very bad economic decisions.

Because when we let people that think capitalism is the problem, we start with a bad problem statement and won't find good solutions. We would find solutions based on misstating what the problem is.

A fundamental tenant of capitalism is free markets (based on the idea of perfect competition) in which no actor has the power to subvert the market. This was foreseen from the very beginning (in Wealth on Nations by Adam Smith) as an important criteria without which society would not benefit from capitalism as powerful interests would collude to prevent markets from functioning.

Calling some setup capitalist that fails to make sure markets are not subverted in exactly the way Adam Smith said they would be if powerful interests were allowed to is pointless. I suppose you still the ability for private parties to own the means of production (which is also an important tenant). But properly functioning markets are essential to what capitalism has meant since Adam Smith. While some people have tried to eliminate that so that they can do exactly what Adam Smith warned would destroy the benefits provided by capitalism that isn't something we should do.

If they want to defend a new model of behavior where those with the power to subvert markets can, that is their right. We shouldn't allow that to be seen as capitalism though. If we do then we see the problem as a problem with the fundamental principles of capitalism. When instead it is a problem of allowing the corruption of the political system to throw away the benefits our society can gain from capitalism.

"Unfettered capitalism" isn't actually captialism. From the very beginning Adam Smith talked about the dangers of allowing markets to be manipulated by powerful businessmen/companies and businesses colluding to manipulate the markets.

The problem is people talk about things as if capitalism is the problem, when in fact it is our failure to enforce capitalist free markets (for example). I am not talking about the talking-head "free markets" which are in fact allowing businesses to disrupt the market because they have the ability to get away with monopolistic pricing. That is the very anti-thesis of capitalist system.

Adam Smith in the Wealth of Nations:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise the prices

Today, they often short circuit the need for this by having so subverted the political process that one company can subvert the market all by themselves. They have subverted the protection that should prevent monopolistic power (anti-trust enforcement, requiring competitive markets, etc.) so that they don't even need to conspire with competitors (or need to do so in very small ways because they already have collected what are suppose to be competitors in a capitalist system into on monolithic entity that only needs to conspire against the public all by itself).

There is some part of the benefits of capitalism that Adam Smith saw and many people believe today (like me) that by encouraging prosperity in the economy everyone can be made richer. And in such a manner more good can be created for those in need than directly giving aid to those in need. Now I understand similar words to that have been distorted to mean let the modern day robber barons plunder the economy to enrich themselves.

That isn't what Adam Smith or I have in mind. The end is a better society with benefits to everyone. The means is capitalism. Just because today many plundering the wealth of society are senior executives instead of nobility Adam Smith would not see their actions in any more noble a light (hmm. noble - oh well).

It damages our society to allow those who seek to extract economic rents and gains from preventing free markets from functioning to define what they do as capitalism. If we accept that view we seek to dismantle useful economic measures.

What we need to do is recognize when capitalism is being subverted by those in powerful positions for their own benefit. They damage society and if we think what they are doing is acceptable capitalism we will not seek the appropriate solutions within how capitalism is suppose to function to address them.

Essentially we need to the extent possible prevent market dominating forces from acting. So boring things like trust busting, dismantling too-big-to-fail banks, regulating natural monopolies, regulating pricing power when the market is not filled with many competitors...

There are some issues that are not about making sure capitalism works but just about how we want our society to work. To maximize the benefits to society we want free markets (actually competitive markets not the let companies be free to subvert markets that Fox News and others talk of as if that is somehow capitalist).

But capitalism doesn't have an answer for how much health care we want to provide everyone, how much education... Those are political decisions and Adam Smith and sensible capitalist understand the difference between social decision and the economic model. That is however another thing that the talking heads have convinced a whole lot of those in the USA differently. They have sold the notion that capitalism means ethics and morals don't apply. That isn't the case.

Adam Smith was a moral philosopher, he would not see as acceptable the crazy notions many people today espouse as capitalism. It wouldn't matter if these people were tarnishing the reputation of a useless idea. But instead they are tarnishing the name of an extremely important idea. And we all lose if they win in their attempts to conflate capitalism and with cronyism and market domination by businesses that have monopolistic pricing power.

Related: We Need to be More Capitalist and Less Cronyist - Anti-Market Policies from Our Talking Head and Political Class - Failing to understand capitalism - Economic Freedom - Ignorance about Capitalism

Preparing for a More On-Demand Employment Market

Responses to questions on Do you know how to leverage your skills?:

> Do you agree that we are moving to an on-demand-economy?

Kind of. I think the percentage of that in the economy will increase. It has always been there, it is just growing now.

> Is entrepreneurship, consulting and freelancing taking over from full time employment?

Kind of, it is increasing. I don't think it will constitute more hours than full time employment (for the next 20 years - in the very long term it is hard to predict). One thing that had been a nearly catastrophic macro-economic problem (and an actually catastrophic problem for many people) with this in the USA is how closely health insurance was tied to employment. The minor reforms to the USA health care system (it is only a tiny bit of what is needed - USA has, and still, costs twice as much for health care as other rich countries with no better results, hundreds of thousands of bankruptcies...) make significant strides in 1 area: making health care a bit less directly tied to your employer (largely by getting rid of pre-existing condition barriers). The USA system is still far too tied to your employer but it isn't as catastrophically bad as it was before the minor reforms.

> Are you already working as a consultant or freelancing?
Yes.

> Have you thought about what your skills are and how they can be applied to other areas? If so,
> have you found any new areas of interest?

Not really, I do what interests me and take a bit of effort to focus on making some money. Though I could focus a bunch more on making money. Much of what I spend my time on doesn't make much but as long as the balance of what I want to do and having money to do it are pretty well in line I am ok.

Related: Global Workplace - More Flexible Work Schedules (soon to be retirees) - The Aim Should be the Best Life – Not Work v. Life Balance - Interview with John Hunter on Meet the Blogger Series

Selling Out the Country - We are Electing the Wrong People to Control Our Government

Sadly the corruption of the USA political parties has been growing dramatically the last few decades. It is true they have always had a fair amount of corruption and a bit longer ago they were even more corrupt. But the ethics that had been growing that corruption was bad and should be reduced has been decimated by the leadership of both parties the last few decades.

Warren Buffet provided more comments about the damage being done to the country by this corruption.

With Citizens United and other decisions that enable the rich to contribute really unlimited amounts, that actually tilts the balance even more toward the ultra-rich…The unlimited giving to parties, to candidates, really pushes us more toward a plutocracy. They say it’s free speech, but somebody can speak 20 or 30 million times and my cleaning lady can’t speak at all.

I am very frustrated by us continuing to elect people that sell out the country for their person gains (both as politicians and even more importantly staff). The politicians couldn't sell out the country if their staff were not also bought and paid for (normally most completely by the revolving door of huge salaries on completion of selling out the country for the benefit of those paying you huge salaries). The advertising cash for politicians is important but less so than the ability to corrupt the staff.

The corruption, corrupts the entire process. If the parties and staff cared about the country they would not go along with much of the selling out of the country. The differences on tactics to benefit the country would still be in conflict. But if we had patriots in positions of power they couldn't be paid to sell out the country in this instance and then we will let you sell out the country in this other instance to earn your pay (from those corrupting them).

There really is little to do about it until the political scene is much different. As long as the parties are lead by people happy to sell out the country and we continue to elect them things won't change. The process of changing that is difficult. There is a system that re-inforces this corrupt systems continuation. With so much of the power structure so corrupt you can't do much with the few crumbs around the edges that are not interested in selling out the country for personal gain.

And when the public accepts absolutely pitiful journalism and doesn't pay attention to the few worthwhile efforts to look at what is going on it is hard to have people learn about the deeply embedded corruption. The parties play a game of distraction between themselves which when the journalists and public allow to set the conditions for discussion puts the issue of embedded corruption across the board of the political establishment off the table.

To some extent the embarrassing details of the extent of some corruption can be used pressure to reduce the level (not change the system) of corruption. I have a pipe dream that the continued evidence of such wide spread and thorough corruption finally seeping into the understanding of the public, but I really don't believe this will happen - I just hope it does. For now the only real hope is limited the scale of corruption by publicizing the worst and easiest to understand corruption.

To some extent I look to help shine the light on the corruption of the political process (mostly in the USA) on the cash for votes subreddit. I would have thought things like the absolutely horrid practices of Comcast, At&T, Verizon... would at least stop the political parties from acting in the same corrupt way they do with everything for those organization that have actively caused so much pain to so many in the USA. It is a sign of how bad the corruption is that even those companies easily buy majorities of both parties who happily profess that those companies are deserving of favors. When such obvious sell out are so widespread you can be certain the level of other corruption is beyond comprehension.

The damage this does to the USA is enormous.

The current political parties are selling out the country, it isn't quite as noticeable as if they attempted to auction off the Louisiana Purchase for the benefit of themselves, their staffs and their friends but it is doing as much damage as that would do.

Related: The Aim of Modern Day Political Parties is To Scare Donors Into Giving Cash - Reducing Corruption - Research by Princeton and Northwestern Professors Shows USA Political System Very Focused on Doing What Rich Want Done - Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren - Monopolies and Oligopolies do not a Free Market Make - Anti-Market Policies from Our Talking Head and Political Class

Exploitation or Economic Support as a Tourist?

Comments on Hilltribe Exploitation in Northern Thailand and Laos

While the children were sweet and endearing, it felt wrong, all of it. It felt wrong being there, stopping by the village to ogle and take photos. And, when I thought about all the boats that stopped here everyday, I figured it must be a very exhausting existence for them.

I think

"I walked away from the experience with a renewed commitment to really thinking about how and where I am traveling and making sure my presence is delicate communities is not just as a spectator but that it has purpose."

is a wise and honorable statement, though I think the "spectator" bit may be a bit overdone. Not being "just a spectator" is about you. While I agree it is easier to be callous as just a spectator. By demanding they engage with you to get the economic benefit that may well be more "exhausting" every day than short quick visits. Though it would be more rewarding for the tourist to be engaged for the tiny portion of their vacation maybe that is what those being visited would like; but maybe not.

I do think it is tricky to figure out what actions are most honorable. My Mom doesn't like supporting beggars on the street, with the belief it encourages that behavior. Especially pushing children to beg (the same with encouraging kids to sell to tourists at tourist attractions). When a mother with two little kids is begging it isn't easy for most people to just ignore it.

Even ignoring kids trying to sell stuff in Cambodia at tourist isn't easy. But the non-profits that know the situation best seem to agree that tourist buying from them just encourages parents to force them into that even at the expense of going to school. And while it is easy to vilify that behavior by parents, many of them don't have easy choices - they can be desperately poor and trying to do the best they can for the family. This isn't always the case, some parents are just bad and exploiting their kids when they could easily avoid it, but often it isn't as easy as that.

What I do is give to charities where I am going to travel (in poor countries - I don't do this when going to rich countries). Good Charities: Global Giving, Trickle Up.

For doing things like visiting Hill tribes I think it is confusing without knowing the details (which often are not easy to get). When I chose such options, I do try to chose situations where there is evidence the economic gains are being equitably shared with the community (which usually means they are more expensive than alternatives as they have to both share the wealth and take the time to explain it in a way that is convincing). In some ways it can be very beneficial and allow them to earn money while largely maintaining their way of life. I don't often do these kinds of things though. Partially for the reasons you mention, partially I just don't do tour stuff hardly at all.

I did go to a Maasi village in Kenya and it did feel a bit intrusive but it was also interesting and I could see how it would be very helpful to those living there also. At least for situations where it is arguably good (not purely bad exploitation) there are likely people supporting both sides (and people in debate with themselves on the issue) of pursuing tourist dollars.

There was another Native American village attraction in New Mexico that seemed intrusive (and a bit expensive) that really wasn't worth it but it was right on my path so I tried it. There were really expensive new cars all over which was not common in Native American. I did a bit of research and economically that village did very well. People can still argue about the benefits and costs of chasing tourist money but when there are significant economic benefits that the people actually get (that are not taken by others) it is very hard for me to say it is wrong.

I do get a bit annoyed at people from rich countries that downplay the importance of money. It is easy to say other things are more important when you have lots of cash.

And that brings me back to a specific point about the quote "must be a very exhausting existence for them." While this may be true it doesn't mean that they would be better off without being bothered. It may well be without the botheration of tourists things would be even worse. That doesn't mean I don't wish boorish behavior, which sadly many tourist exhibit, would be eliminated. I find the boorish behavior of people to other people (and even mores by rich people on poor and desperate people) very frustrating and sad.

Related: Highway Poses Threat to Uncontacted Tribe in Brazil - Supporting Virtual Workers - Using Capitalism to Create a Better World - GDP Growth Per Capita from 1970 to 2010 - China, Korea, Indonesia, Singapore...

Banks Continue to Push for Insane Special Favors (and Sadly Get Them)

The lack of rules that allowed the banks to gamble and go bankrupt but for the taxpayer (and saver) bailout and created the great recession was a huge failure. Caused mainly by our electing people that don't comprehend the issues they need to make decisions about. And also those same politicians selling out to those giving them lots of cash, investment banks for example.

The banks have been extremely successful at having government tilt the economy to push billions into the banks pockets every year (also deducting billions from savers with artificially low interest rates). The banks have also managed to buy or trick those we elect into doing very little to stop bankers from doing exactly what they did in the first place.

Of course if you are those bankers, why would you change. Get billions in bonus with government granted welfare. Then gamble and take billions in profits for winning gambles. Go get a bailout again when your gambles eventually fail.

They fight against each tiny step to return to a more capitalist economy (which these enormous banks are the antithesis of). They argue with every attempt to have banks be safe and split of speculation to entities that won't get taxpayer bailouts as soon as their gambles fail.

Banks say funding rules will make key equities trades more expensive

The banks are making a last-ditch effort to modify the Net Stable Funding Ratio, seen as the final plank of the "Basel III" banking reforms that seek to prevent a repeat of the 2008 financial crisis. … "By unnecessarily increasing the funding cost for banking organisations' equity market intermediation activities, the revised NSFR would also potentially force such activities into the largely unregulated shadow banking system, increasing systemic risk."

They have already won so many efforts to eliminate any meaningful reform. But they keep pushing for even more. Look you immoral cretins, you don't have the right to ruin tens of millions of people's economic life and get even more favors. Granted it is hard for you to believe that when you just pay the politicians a few tens of millions in cash to get billions showered upon you while others pay. But you don't. Now will you manage to buy the right to do so and have your cronies (politicians or their co-opted regulators) sell out country? Probably. We will re-elect those that you bought? Probably.

Just because you can do these things, doesn't mean it isn't immoral. We learned that a century ago, when the robber barons attempted to convince people business didn't related to morality. As if somehow actions people took to ruin an economy so a few cronies can split of the proceeds are any less immoral than some small time crook stealing cash directly from windows and orphans.

Unless you pay those we elect to sellout the country to allow an "unregulated shadow banking system, increasing systemic risk" it won't happen. Having banks have to be banks is what should happen. Those funding speculation have to have adequate resources and be willing to lose what they loan speculators. They obviously should not be allowed to come anywhere close to actions that "increase systemic risk." If that means speculators can't leverage themselves as much and banks can't gamble as much (knowing any big losses will be covered by the government) too bad.

If the cost of speculation without socialized failure and individualized gains that has been the hallmark of the crony investment banks the last 30-40 years then too bad. Less speculation will have to happen. I don't think speculation is bad. It is part of the market. But speculation doesn't have to be subsidized by society as you bankers seem to think is your right.

Stop trying to increase the amount you can gamble and leverage with threats that not allowing you to gamble the global economy means others will be allowed to do so. The idea is not to continue to allow the cronyism you all use to create massive speculation and leverage that threatens the global economy.

Related: Continuing to Nurture the Too-Big-To-Fail Eco-system - Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren - Financial Transactions Tax to Pay Off Wall Street Welfare Debt

Research by Princeton and Northwestern Professors Shows USA Political System Very Focused on Doing What Rich Want Done

I have become (over the last 10 to 15 years) very frustrated with how corrupt the USA political system is. Petty corruption exists in the USA and is annoying but doesn't do much harm and is not that troublesome (it is lower than most places - other than in Scandinavia and a few other places). But the extent to which we elect people who then do the bidding of those giving them lots of cash (directly to their campaign, indirectly, in post career cushy high paying gigs if you do them favors while in office and in cushy high paying gigs for staff) the corruption is endemic and does great damage to the USA.

Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens by Martin Gilens Princeton University and Benjamin Page Northwestern University.

The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. Our results provide substantial support for theories of Economic Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism.

Bolding added by me.

In some ways politicians make it even worse than just direct bribery that at least ends when the briber gets what they paid for. The current system encourages legislators to maintain a state of constant threat to economic interests in order to bleed them for more donations. Rather than address issues that are important for the country they leave open wounds festering in order to get interested parties to pay more cash to get the needed changes made.

In legislation there are going to have to choices made and interested parties will win or lose. That people who don't get what they want will be frustrated I understand. That doesn't bother me. What bothers me is that

1. politicians create legislation (or pressure for regulation and enforcement) that is clearly against the interests of the country (no matter what political frame you have in mind). This is a subset of what is done but this is horrible and widespread and only supported by corrupt parties.
2. that we elect these corrupt people and parties after decades of clear evidence they are corrupt.

Given that we continue to elect them the blame falls heavily on the voters, in my view. Yes, the corrupt people selling out the country and their fellow citizens for their personal well being are unethical, unpatriotic and despicable. But we could throw out the corrupt people and parties if we chose to, and we don't.

More quotes from the paper:

Not only do ordinary citizens not have uniquely substantial power over policy decisions; they have little or no independent influence on policy at all.

By contrast, economic elites are estimated to have a quite substantial, highly significant, independent impact on policy. This does not mean that theories of Economic Elite Domination are wholly upheld, since our results indicate that individual elites must share their policy influence with organized interest groups. Still, economic elites stand out as quite influential – more so than any other set of actors studied here – in the making of U.S. public policy.

Similarly, organized interest groups (all taken together, for now) are found to have substantial independent influence on policy. Again, the predictions of pure theories of interest group pluralism are not wholly upheld, since organized interest groups must share influence with economically elite individuals. But interest group alignments are estimated to have a large, positive, highly significant impact upon public policy.

These results suggest that reality is best captured by mixed theories in which both individual economic elites and organized interest groups (including corporations, largely owned and controlled by wealthy elites) play a substantial part in affecting public policy, but the general public has little or no independent influence.

As with most economic research there is plenty of room to argue with their conclusion (the data is often somewhat subjective and appropriateness of proxy measures can be argued). But I agree with some of the big conclusions they draw. They don't then tie the cash payments to politicians as the reason for why the most wealthy and most organized interest groups get their way but it lays out part of the story that exposes the corrupt system in place now.

Related: Why Congress Won’t Investigate Wall Street - Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren - TPP Transparency Confirms the Worst Fears: USA Government Still Trying to Strip Away Rights of Citizens in USA and Elsewhere - Monopolies and Oligopolies do not a Free Market Make - Society is being shaped for us while we are busy making other plans - Good Journalism Aids Society by Shining the Light on Corruption - Failure to Regulate Financial Markets Leads to Predictable Consequences - Bad Behavior Shining the light on the actions of those in power

An important feature of interest group influence is that it is often deployed against proposed policy changes. On the 1,357 proposed policy changes for which at least one interest group was coded as favoring or opposing change, in only 36% of the cases did most groups favor change, while in 55% of the cases most groups opposed change. (The remaining cases involved equal numbers for and against.)

The Cash for Votes subreddit collects links to examples of political corruption in the USA and elsewhere.

Investment Risk at the Portfolio Level Trumps That at the Individual Position Level

The risk related investment mistake that I think costs people the most money is thinking of risk as an isolated quality of an individual investment. What should matter to investors is the risk of their portfolio, not individual investment risk.

I don't accept that the sensible way to look at USA treasury bill risk is the same if I have 90% invested in treasury bills and am looking at what to do with the last 10% of my portfolio (or if I have 60% in USA index funds, 20% in REITs and 10% in global index fund). Putting that 10% in treasury bills in the first example is likely riskier than putting it in USA index fund, while in the 2nd example is likely a very good move to reduce risk.

Comment on: Risk doesn't get as much attention as it deserves in investing

Related: Looking for Dividend Stocks in the Current Extremely Low Interest Rate Environment - 401(k) Options, Seek Low Expenses - Disability Insurance is Very Important

Current Crop of Kleptocrat CEOs

My comment on Reddit: Professor Explains Economic Illiteracy He makes some decent points. Then he makes crazy claims about overpaid executives being good but non-economists failing to understand value of paying for success.

People that criticize executives taking huge amounts from corporate treasuries are not failing to understand paying for value. They just understand executives taking what they don't deserve is not what apologists claim. Executives treating corporations like a kleptocrat treats a country has nothing to do with economics and everything to do with some people taking whatever they can when they have power (and a whole slew of people willing to help them do so for a slice of the plunder).

Related: Executives Again Treating Corporate Treasuries as Their Money - Don't Excuse Immoral Looters - Massively Unjust Executive Compensation Damages Companies and Investments - Losses Covered Up to Protect Bonuses - Obscene CEO Pay (level of pay reached kleptocrat levels in the executive suite at the turn of the century - Warren Buffett "Too often, executive compensation in the U.S. is ridiculously out of line with performance."

Senior executive pay is 30, 60, 100... times what it should be today because:

• the conspiracy of collaborators splitting up the spoils (boards, other executives, compensation apologists getting huge checks for making excuses for ludicrous pay packages, professors getting funding for making ludicrous excuses for pay packages...)
• paying for failure - golden parachutes etc.
• paying for failure with "repriced" options, new share giveaways, etc. when results are poor
• paying for good markets - when every single too-big-to-fail bank gets gifts worth tens of billions in profit it is pretty hard to fail to make huge profits no matter how poorly you are managed, but what happens for market performance at these kleptocrat run companies? Millions in bonuses all around.
• taking huge risks (including excessive leverage), when they work, claim leadership credit and take a huge paycheck (if they don't make other excuses or take your golden parachute)

Senior executives should be paid well. Doing so would require cutting pay by over 40% for many senior executives and 80% for many CEOs at companies that have been overrun by kleptocrats the last 15 years.

Economy: Business is Looking Good, Employment Prospect Fairly Poor and Economy Overall Mediocre at Best

comments on: Very interesting charts. What story do you think they tell?

A misleading one by and large.

I don't believe "Fewer Americans" are working today - I believe a lower percentage of working age people are employed.

A significant portion of the wage issue is due to economic conditions and the market. Productivity increases are wonderful but, at a point they can make hiring labor less appealing (especially when combined with things like a hugely burdensome health care system that has been broken for decades).

There is a portion of the wage issue that has to do with executives today acting like the robber barons of old. That behavior was despicable and is today. A portion of the wage problem is due to the ethical and business failures of these executives.

Business profits are due mainly to lots of good things (higher productivity, better management of inventory and cash, innovation...) but is also due to some financial games (the huge bailouts to the still too big to fail institutions has created massive distortions including artificially low interest rates which juice corporate profits by artificially reducing borrowing costs).

If the message is regular wage earners (and hopeful wage earners) don't have things as great as they did in the 1960's USA - that is correct (and not as good as 1970s - even with the oil problems - or the 1980s - even with stagflation...). The prospects for workers are worse than prospects for the economy in my opinion - for the next year, 5 years, 20 years... The prospects for businesses may well be even better than for the economy.

It is definitely true people have failed to see how well business has been doing in the last 5 years - the story has mainly been about how bad the economy was. To the extent the message is business is doing very well, that is also a correct message. There is a large risk for those businesses that have foolishly leveraged themselves to try and justify ever increasing payments to executives that do juice results when things go well but have very bad consequences otherwise.

They also distort things using fake "special items charges" to take huge losses that they claim are "special causes" when they are "common causes." This serves to make gains seem part of the business and huge losses some mysterious act of god or something outside the executives responsibilities. leverage exacerbates this practice.

Related: The Economy is Weak and Prospects May be Grim, But Many Companies Have Rosy Prospects (2011) from my investing blog - Where are Profit Margins Headed? - Uncertain Economic Times

USA Universities Are Poorly Managed - Due to a Failure to Focus on the Value Stream

The cost of education in the USA has exploded over the last few decades. Has this been due to spending on improving the quality of education? No. Huge expenditures go to trophy buildings, huge paychecks to administrators, football coaches and other non-educators. Most large schools pay more to multiple assistant football coaches than anyone involved in educating students.

The ballooning expenses are extremely poor management of the value chain. The schools are spending millions because administrators like the boondoggles and couldn't care less about education (actions matter far more to me that words, I don't' care that you say you care about education if you spend money of non-education and pile that burden on those seeking education you are anti-education).

What's Really 'Immoral' About Student Loans

According to a recent study by Mark Perry, a professor of economics and finance at the University of Michigan at Flint, between 1978 and 2011 college tuition in the U.S. increased at an annual rate of 7.45%, vastly exceeding the rate of inflation and the almost-stagnant rate of growth in family incomes.

Colleges have responded to the availability of easy federal money by doing what subsidized industries generally do: Raising prices to capture the subsidy.

If we want to solve the very real problem of excessive student-loan debt, college costs need to be brought under control. A 2010 study by the Goldwater Institute identified "administrative bloat" as a leading reason for higher costs. The study found that many American universities now have more salaried administrators than teaching faculty.

Related: The Poor Paying for Vocational High School Education - Looking at the Value of Different College Degrees - Penn State Scandal is Horrendous and Points to the Very Deep Corruption of Our Leaders - Ackoff: Schools Are Not Led By Those Most Concerned with Education (they are led by those most concerned with themselves.

Reasonable Accommodations Becoming Unreasonable

Reasonable Accommodation: A Cautionary Tale

The slippery slope is a familiar one for any HR pro. Company values talented employee, stretches to make accommodation, then things go south. Attendance is usually the issue front and center, and due to the knowledge of the disability in question, the accommodation that was made, etc, things fester. Decisions aren't made. The employee states that yes, they didn't show up as expected, but that's part of the condition in question.

Of course, not coming to work was never part of the reasonable accommodation. But the accommodation provides an official awareness of the condition/disability in question, so dealing with the situation is now a legal mess that takes time.

That's called a slippery slope where I come from. Or "holding the bag".

Which means the next time around, willingness to make a reasonable accommodation from the hiring manager or HR pro is much more limited. There's a business to run.

Note that I am aware of many, many talented individuals with disabilities who are among the best employees at their company. But the slippery slope outlined above happens more than anyone wants to admit, which is why you see so much resistance on the accommodation front.

Good thoughts. The biggest problem is that of going to extremes which are often encouraged by the way the legal system works. The larger the consequences of extreme measures the more likely people will want to avoid them.

I think most people would like to see reasonable accommodations. Often bureaucracies get tied to their normal procedures and could use more flexibility.

It is a reality that if those who are part of a interest group you care about expand the demands to far then people will just choose to remove dealing with that group at all. It might not be fair but as you say people learn from their experiences. I think those who advocate a certain interest and don't speak out against abuses of that interest make a mistake. Without limiting the unreasonable measure people just learn to realize if they start down the slippery slope they will be stuck with unreasonable demands. So they will just seek to avoid it - even if that means denying those who wouldn't be unreasonable opportunities.

Another example of this type of slippery slope is when unions stop supporting what is in the interests of all workers and instead defend workers that are abusing all the other workers by not doing their job. I know my experiences have made me much less sympathetic to unions after I saw their behavior was to reward unreasonable behavior and punish the workers (most of them) that were trying to do a good job by making them carry along workers that were just abusing the system. Unions still have a place if they would just focus on providing value to workers but they seem to often think they need to defend anyone (no matter how unreasonable) if that person is against what to many unions see as their enemy - management. Unions should see that they need to protect workers not just from abuses by management but from abuses by other workers that are being unreasonable.

Related: Action Is More Important Than Sympathy - Society is being shaped for us while we are busy making other plans - Acting Consiterately

Capitalist Markets v. Markets Investors Want for Their Companies

A Failure of Markets and Other Observations from Asia by Kevin Meyer

Observing how capitalism is thriving in supposedly communist countries is interesting. China is an easy example, and many argue that capitalism is now more vibrant in China than in the U.S.. I thought Laos would be different, but it’s not. Markets thrive (even when shopkeepers are asleep) and entrepreneurial folks are setting up new shops and services to get tourists to part with their dough.

Even in the boonies there are stories. Such as the tiny Hmong village downriver from Luang Prabang. A collection of thatched one-room huts with dirt floors… each with a TV. TV? Power? The government didn’t bring power to the outlying villages. An entrepreneur came up with a way to pay for the infrastructure, deliver power to people with no money but with rice to barter, and make a profit. The “people’s” government frowns but tolerates it.

As an economics major one of the things that annoys me is that the biggest difference between capitalism and what we have has nothing to do with what the politicians talk about (too many regulations or whatever).  The theory of capitalism fundamentally relies on "perfect competition" which essentially means no-one has "market power."  If anyone tries to charge more than the market rate people will just buy from the next place.  The markets are a extremely good example of this.

In the west I would say a vast majority of transactions are done with businesses that have huge market power (often sustained by government action and government failure to restrict businesses from creating market power) - (Verizon, Comcast, GM, Google, Apple, Sony, Toyota, Exxon, United, Fed Ex, Bank of America, NBC, Visa, American Express...).

As a businessman perfect competition is horrible.  You can't get huge profit margins with perfect competition.

There is a difference between market power based on monopolistic tendencies (which is most of the problem currently) and price differentiation based on better offerings.  Looking at say why Four Seasons can charge a great deal to those that can afford it.

Businesses want to grab market power in every possible way.  Adam Smith understood the danger in businesses using this to sap the societal benefit of free markets.  The current politicians don't even understand that.  But even if they did it wouldn't matter.  They are not interested in capitalism they are interested in whoever can give them the biggest stacks of cash.  And those with market power (almost always aided by past acts and refusals to act by the government) have the most cash to give the politicians).

The beautiful nature of capitalism to provide the economic benefits to society is most easily enhanced by reducing market power and increasing competition.  Sadly it is almost diametrically opposed by our political nature to allow those with the gold to make the rules.

As an investor looking for companies that have market power (which has great overlap with Buffett's "moat") is wise.

I love some of the solutions to get electricity to those in need: Solar Power Market Solutions For Hundreds of Millions Without Electricity - We Need to be More Capitalist and Less Cronyist - Anti-Market Policies from Our Talking Head and Political Class.

Fruitful melding of advanced theory and technology

I like this sentence, and think it is conveys meaning.  From  Google Spanner's Most Surprising Revelation: NoSQL Is Out And NewSQL Is In

Only Google solved the problems in a typically Googlish way, through the fruitful melding of advanced theory and technology.

That statement does a good job of capturing Google's strength and weakness.  I think Google is not very good at solutions that are not the combination of those two items (with a bit of an engineering mindset focused on maximum economic benefit thrown in).  It seems to me Google wants an "unbiased" measure of performance and uses profit in that way (this is my view as an outsider).

Google has continued to struggle greatly with customer focus, as I see it.  It might be we need to get much better academic research on the value of customer care before Google will be able to adopt strategies consistent with valuing customer service - more than the throw away way they general do now.

Research fits Google's theory and technology focus.  Once it can be arguably be measured in the marketplace I think Google gets uncomfortable.  They plug away, but it seems like they are out of their natural element in this situation - until it is easy to find market measures of value.  Some things immediately go from research to production.  Some things have to be developed quite a bit - I think Google gets uncomfortable in this space, they want to hurry up and let the market tell them: and not have to rely on judgement of people doing the work.

Google's appreciation for theory is shared by leading thinkers at the most innovative organization of the last 100 years (Bell Labs etc.) but in most organizations MBA's hold sway and MBA's (in general) don't have a clue about the value of theory.  

I think the MBA's failure to understand the value of theory is largely is due to the failure of basic scientific literacy in our society.  Which then leads to people confusing theory in a scientific context and theory in a I have this odd ball idea I thought up in the shower last night that I call a "theory."  Disrespecting the 2nd kind of theory is fine.  When you can't understand the difference between a well supported theory and ignorant pontification that is a big problem.


Related: Richard Feynman Explains the PDSA Cycle - The Illusion of Knowledge - Bogus Theories, Bad for Business