15 years of forewarning

Amazing, incredible!  Andrew Tobias reported on an article on Derivatives written by Byron Dorgan, the Democratic Senator from North Dakota. This article was written in 1994, almost 15 – yes 15 – years ago. It warns in strong terms about the possibility of “financial conflagration” caused by unregulated derivative trading. Here’s a quote:

Yet, this “false alarm” could turn out to be a harbinger of a real financial conflagration–one that would make us nostalgic for the days of the $500 billion savings-and-loan collapse. In August, The Wall Street Journal declared that derivatives were now a $35 trillion–that’s right, trillion–worldwide market. The U.S. share is estimated at $16 trillion, which is four times the nation’s economic output. And the Journal estimates that since 1993 there have been $6.4 billion lost in the derivatives game–$6.4 billion that could have opened businesses and created jobs. Derivatives are no doubt widespread: An Investment Company Institute survey found that 475 mutual funds with net assets of $350 billion recently held derivatives; about two-thirds of those assets were in short-term bond funds sold to average investors. And here’s the real kicker: Because the key players are federally insured banks, every taxpayer in the country is on the line.

Here’s a link to Tobias’ article, which contains a link to the first page (of 7) of Dorgan’s article. Or you can read the full article below the fold.

Income distribution

Everyone has different talents and abilities, and we reward people accordingly. Some people make more than others. Fair enough. Where it gets weird is when that differential keeps increasing. There’s nothing wrong with someone making 10 times as much as someone else. But when that 10 times becomes 11 times next year, 12 times the year after, and so on, things start to become weird. Of course, that’s what’s happening with the super-rich in America and the rest of us. To me it’s especially troublesome because while I have no problem with people actually earning more than others, most of the super-rich get most of their income from not working – i.e., from investments. Anyway, here’s a wonderful article that shows income distribution and how it’s changed over the years.

No whining allowed

So what’s with all the whining about Obama increasing taxes on the rich? Here’s a chart showing the top marginal tax rate for about the last 90 years. Greed, sheer greed is what I say. It’s not even as though that extra money buys more happiness for the super-rich. Just  pathetic, useless greed. What’s wrong with these people?

AIG bonuses as unreasonable compensation

Most people are pretty pissed off at the $165 million in bonuses that AIG is handing out, and Congress and the President are making all the right noises. But will they take action, or is their outrage calculated, knowing that our attention span is short? It seems the latter because while expressing outrage, at the same time they are coming up with excuses why they can’t actually do anything about the bonuses. Well, think again. Aaron Zelinsky has a brilliant idea. Money quote:

Treasury Secretary Tim Geithner should direct the Commissioner of Internal Revenue to challenge the AIG bonuses as unreasonable compensation under the Internal Revenue Code. Finding the AIG bonuses to be unreasonable compensation would render them nondeductible for federal tax purposes, and would strengthen potential shareholder derivative suits to recapture The Great AIG Giveaway.

Would you like to unify all your phones so that if someone calls you all your phones ring? Or have a single voice mail box? Or be able to make cheap international calls from your cell phone? Or be able to listen in while someone leaves you a voice message? Or have voice messages converted and sent to you as text messages?

All this will soon be available with Google Voice. Great article here.

Living in Interesting Times

“May you live in interesting times“, supposedly an old Chinese curse. I think we live in very interesting times, what with the current recession and the looming climate change. Or climate meltdown, as George Monbiot wants to call it.

THE $2 TRILLION SOLUTION?

This is such a brilliant idea! Wow! It’s probably got some downside, but so does not doing it 🙂

Why don’t we sell memberships in the United States of America (a member becomes a citizen after a short period), the cost is $1 million per approved person and we’ll take up to 2 million people (probably won’t even notice them).  I think that’s $2 trillion (plus all the other wealth and productivity they bring with them).

Taken directly from Andrew Tobias’ blog.

Yay! Tax Season

This is my second year doing my own taxes (OK, well last year my dad helped me… and this year I’m thinking of hiring someone) but still, I’ve noticed that of these two years I’ve never been so stressed out as during the exciting gloomy Tax Season. Who knew taxes could be so awful?! Well, actually, I think everyone knows, but I apparently feel like it’s only me.

I know, I know. Taxes help  rebuild our roads, give money to our cities, help schools, parks, etc. etc. Yup, I’m all for all those things. They’re great. I’m not actually saying that I mind paying all the taxes (well…um…OK, yes I am). But what I’m really saying is that I hate the process of filing my taxes! The government has records of all our (legal) paychecks and wages earned, so I personally believe that they should just deal with our 1099’s for us. Can you imagine all the extra time you would have if you didn’t have to worry about them?!

In fact, I think if I wasn’t spending so much time stressing out my poor dad (and myself), I would actually be productive- and hey, maybe making  more money to spend on our dwindling economy. Now don’t we all think that’s a good idea?

I’m sure most of you  have already dealt with the burden of tax season this year and are breathing in a deep sigh of relief right about now that you’ve already completed yours. Well if not, welcome to my club. I think it’s time to protest and declare, “I’m not doing my taxes this year!” On the count of three let’s all tear up our tax paperwork and go spend some money.

Yup, that is my new year’s resolution. Although, on second thought, if I had just spent all this time doing my taxes instead of writing this, I might be done. Oh well.

Why strong, bossy states will be necessary

I wasn’t planning on writing a blog entry, but I’ve just been reading Rootless Cosmopolitan, the latest entry being an article by Gavin Evans called Confessions of a Teenage Marxist. In the latter part  of the article, Evans predicts that the State will become increasingly important because of what he calls a paradox ingrained within capitalism:

For close on two decades, this evolving form of globalised capitalism was the only game in town. But then, wouldn’t you know, it turned out there was indeed a paradox ingrained within it. I’m not talking simply about the fissure exposed by the current economic crisis, nor about the contradictions that Marx had obsessed about, but rather, something far more fundamental: the very thing that made capitalism so strong and vibrant – its immense capacity for innovation, expansion and growth – turned out to be the source of its most profound challenge. The reason for this is that the more we produce, the more the earth protests, which in turn could destroy the capacity for production and for life.

What is truth said Pontius Pilate

What is truth said Pontius Pilate and would not wait for an answer.

Something about the concept of truth must be playing around in my mind. On Friday I saw the Clive Owen thriller, The International, and on Saturday I saw a play called The Visitor. Great play by the way, playing at the Miners Alley Playhouse in Golden, and well worth seeing.

The trouble with electing judges

I don’t know if you’ve read John Grisham’s book, The Appeal, so I won’t spoil the ending. Suffice to say that it’s about the buying of elected State Supreme Court Judges by corporations with the money to put into their campaigns. Grisham is clearly very, very troubled by the corruption of justice that this leads to.