Christian Renaud's Blog

The Washington Game

As far as I can determine, the rules of the Washington game are as follows:

1) Find an industry or company currently thriving

2) Threaten said industry with special taxation, regulation or 'investigate them as a monopoly'

3) Sit back and receive millions and millions of 'campaign contributions' from said industry or company lobbyists to go away and not pursue special taxation, regulation or investigation.

4a) If the campaign contributions are insufficient to pay for your psychiatric drugs or racism-amplifying drinking spree, then follow through with the threatened taxation, regulation or monopoly-penalties.

4b) If contributions are sufficient, create a ruling that requires that said industry come back again in 3-4 years, wallets open (neatly coinciding with re-election campaign cash needs) to answer for these accusations.

5) When you've drained the industry/company of resources sufficiently, create a law that contradicts other laws already on the books, effectively making it a non-winnable game.  When the industry/company subsequently reaps profits or goes bankrupt due to the regulatory/legal change, then claim that the company acted unethically/inefficiently (and never admit that the regulatory contradiction had any bearing on the outcome), then hotly stampede for the government to 'correct this flaw in the free markets' and create a government-driven replacement.  Remember, government is never the 'disease'. Government is always the 'cure'.

6) Once taken under the 'governmental wing', then subsidize the shit out of said industry with taxpayer dollars to prop them up.  They receive tax incentives, stimulus packages, or other financial largess from the government, creating a supplicant relationship to their patron Congresscritters, which in turn they turn around a large percentage of in donations to their patron politicians.

7) Start searching for the next pot of money to go drain.

For example: Healthcare, Financial Services (specifically banking) Technology Companies, Hollywood (MPAA), Energy Companies.  Related lobby firms here. 

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."- Ronald Reagan

Grab the fiddles boys, I see smoke.......

I have changed my mind. 

I no longer have any concern and temporal angst about the government's totally misguided socialization of the financial system, and (soon to be) domestic automobile manufacturers.  It's just fine that General Motors has a market capitalization of $1.7B as of today, which is less than twice that of just the new line of revolving debt extended to the failing U.S. big-box electronics retailer Circuit City.  I suspect the airlines are queuing up salivating at the opportunity to 'tap the TARP' as well.

The fact that the government precipitated the crisis by inconsistent, ham-handed, and misguided regulation of short-selling financial stocks, and not the excesses of the corporations they blame, no longer ruffles my feathers. They spent the previous decade fumbling, bumbling, and overall disrupting the energy sector, at a federal and at a state level (by their own admission), and now they are using the same playbook on the financial sector.

The government will print more fiat money, further devaluing the USD at a time that we should be shoring up reserves in anticipation of the entitlement crush that the economy is moving into as the baby-boomers hit social security, medicare and medicaid.  They will hemorrhage money in colonial wars abroad, they will subsidize and effectively de-privatize the industries that we spent the last thirty years privatizing, following the lead provided by fine socialist icons like Christina Kirchner, who is currently in the process of de-privatizing private retirement funds so the Argentinian government can raid those like they did the state-operated retirement funds.

In short, they will throw taxpayer money at poorly and partially-regulated industries like the automobile, airline and financial sectors in the hopes that their largess will somehow reform these industries into more capital efficient, productive members of society.  If this wasn't a punchline stolen directly from Atlas Shrugged, it would be almost funny.

And the root cause of this all, according to government, was 'not enough government oversight'. Sure, we need more government, right?

Per a great article written by Veronique de Rugy in the December 2008 issue of Reason Magazine:

"Real federal spending increased from $774 billion in 1968 to $2.5 trillion in 2008- a 225 percent increase- and federal spending per household grew from $11,800 to roughly $21,000 over that period, in constant dollars."

Because if you are a lawmaker, are you going to remove laws or create new laws?  Are you going to shrink the government and downsize your own job, or grow your empire?  Take a guess.

"Look no further than your morning routine.  The federal government has put its imprimatur on the mattress on your bed (through the Consumer Product Safety Commission). The Federal Communications Commission regulates the transmission and content of your favorite morning show.  The Food and Drug Administration (FDA) and U.S. Department of Agriculture (USDA), as well as the Commodity Futures Trading Commission, regulate the coffee you drink and the sugar you add to it.  The USDA regulates the milk you pour in the coffee, as well as the cheese, butter, and other dairy products you might eat for breakfast.  And the FDA has its say about the shampoo, soap, and toothpaste you use with water that's regulated by the Environmental Protection Agency." (also from Ms. de Rugy's article)

The reason I am reconciled to this is that there is no chance whatsoever that it is sustainable.  The government cannot continue to party all night long and never pay the bar tab.  It will, during the next 20-30 years, suffocate all industry and taxpayers, and ultimately collapse into itself.

We'll then have the opportunity to reinvent this great nation from the rubble without all of the expensive and invasive entitlement and nanny-state laws.  Now where did I put the resin for my bow.....

The time of his life

If you read this blog, you know that I am a big fan of Thomas Jefferson and his governmental policies.  Specifically, that the best government is as little government as possible and that most bad government comes from too much.  It's for this reason that I am strongly against the concept of a default 'two party system' in the United States, and believe that the United States government is increasingly a duopoly that colludes to keep out any viable third party(ies) from the equation.

So, when my seven year old daughter came home on Thursday and said that they were going to stage a mock U.S. presidential vote in her elementary school, I asked her who she was going to vote for.  She said they only had two choices, Obama or McCain.  I sat with her for the better part of an hour explaining to her that she could vote for whomever she liked for president, and not just Obama or McCain.

Needless to say, when Friday came around and she returned home, she had her 'I Voted' sticker proudly on her chest.  She said that she had objected to the principal of her school but the principal had admonished her that she HAD to vote for one of the two-party candidates.  I will be following up with her (the principal) later, rest assured.

Foiled in my attempt to de-program my child from the overt political conditioning, I sweetly asked her who she voted for....

"John McCain"
"Why did you vote for Mr. McCain, honey?", I asked
"Because he is really old, and I want him to have the time of his life before he dies", she replied.

Religion, Sex and.......

Politics is something you don't discuss in polite company.  Since you are reading my blog, you'll know I am anything BUT polite.

This is a CafePress custom shirt overnight shipment candidate if I ever saw one.  Harsh.

The Human Touch

I received a nice note from John Jainschigg over at CMP Metaverse this morning about last week's Future of Work blogpost.  He had resonated (as had I) with the idea of 're-intermediation' that was put forward by one of my colleagues (who at this juncture should feel free to chime in on the comment roll and remind me, pretty please with sugar on it) at the MetaverseU a few weeks ago.

Someone once said that every challenge is also an opportunity, and the converse is true as well.  The workforce is being rapidly globalized, and roles you would have never envisioned being outsourced are migrating to Bangalore or Beijing at a breakneck pace.  I was personally shopping prices on personal assistants from three different shops in India earlier this week, something which would have seemed insane half-a-decade ago.

At the same time, you have the demographic mass of baby-boomers who are frustrated with the first generation of outsourced service, and are demanding a higher-touch model of customer care.  This is going to have two effects if it 'gets legs', which isn't such a BIG IF:

1) Operational Expenses (OpEx) of the firms switching to providing 'domestic' customer care  is going to go up in most cases.  Despite the vaunted examples of JetBlue and others in having stay-at-home-moms-in-Utah provide call center support, US labor is inherently more expensive than other parts of the world can currently provide.  The rising cost of living in India and China combined with the falling value of the dollar are driving those forces towards some equilibria, however it's not going to resolve for another decade or more.

2) A gray-dawn contract workforce. The boomers aren't ready to sit back and accept a uni-directional money flow.  They want to work, and wouldn't mind if you offered some health care while you're at it.  There are some amazingly well-trained people in the boomer generation just now retiring, like 12 percent of the engineers and 21 percent of the scientists at NASA for starters, who are ready to tackle whatever technological marvels you throw at them.

If you don't think that the AARP (American Association of Retired Persons) isn't already the strongest lobby in Washington D.C. already, wait until their numbers swell with the boomer bolus.  They will be in a position to not only harangue your CEO for making them wait an hour for a call center representative, they will also exert pressure in the form of regulatory measures and tax laws to drive macro-level patterns of business.  Think of how large of a group of people this represents, how well-educated, and how much free time they will have on their hands to do nothing but what fix the aspects of their life that annoy them most.  Pretty much the customers from hell.

So the latte-slurping freelance workforce I posited in the last post, while agreeing with all of Prokofy's comments that delivering babies, pizzas and taxis will always exist in meatspace and are immune to the transition from manufacturing to knowledge workers, will be both servicing the baby boomer generation, and will also be comprised of a number of those boomers who will work-at-leisure to finance their vacations and second-home-property taxes. 

And for those that are concerned that boomers and seniors will be discriminated against directly or indirectly because of their age,  how about their avatar?  Their Brad Pitt/Angelina Jolie looking one.

A metaverse outpost would allow them to provide value to the workforce from their snow-bird homes in the desert or on the Gulf coast.  In the Metaverse, no one knows that they are a retired engineer sitting on his/her back deck enjoying a margarita while resolving your customer service problem.

More later, the treadmill beckons.

Gotta love the Center for Public Integrity

Who were kind enough to compile this comprehensive list of false statements by the government regarding the  casus belli for the war in Iraq.

WarCardChart.jpg (JPEG Image, 750x580 pixels) - Scaled (99%)

The Center's article is here.

Tags: politicsiraqwar

The Iowa Caucus Experience 2008

It was a grand old time in the Hawkeye state yesterday, the culmination of months of campaigning and millions of dollars of money inflow to the local economy.  In my small city of Johnston (pop. 16000), there are three different precincts for voters, and depending on if you were Democratic or Republican, you could participate in the caucus at your assigned location (usually a middle-school or high-school cafeteria).

Being a registered Independent, I could attend either caucus as the two party system frantically attempted to bring me back in to the fold. I decided to bring my kids to the Republican caucus for my district, to show them how the government of these United States operates.  Also, I am strongly Libertarian-leaning, so I thought I would cast my lot behind Dr. Ron Paul during these preliminaries.  The Democratic caucus was held concurrently, presumably so no one would have first-mover advantage and also precluding me from participating in both.....dang.

We showed up at 6:30pm for the 7pm event, and there were approximately 400 seats around the tables, although ultimately nearly 800 people attended.  We sat at a table and were wooed a little by the local candidate representatives attempting to persuade the undecided attendees.  They even stooped to offering my little girls stickers to wear, which required no small degree of intra-family politics to avoid use of.  My 3 year old doesn't know who Tom Tancredo is anyway.

When the event started, there was the usual parliamentary procedure overhead of nominating a speaker and a secretary.  This was followed by the speakers for particular candidates.  This part requires some explanation:

It appears that some candidates had arranged for specific speakers for each precinct.  Two of the candidates had elected officials (one in-state and one out of state senator) speak on their behalf, while the rest of the candidates had varying degrees of coordination.  One candidate's self-elected speaker for the precinct was the only person to hold up her hand for the candidate when the room was asked, and then her entire message was that people should vote for said candidate because 'he came to my church and was a nice man.'. 

Ron Paul's local precinct coordinator was an affable gent who informed me that he had received his commission two days previously, and had no experience in recent years in speaking in public. He seemed a reluctant warrior for the task, and I offered to shoulder some of his administrative burden.

To make this long story short, I ended up being the counter of the votes for the precinct results (the image at right is the original tally on the back of a piece of paper I had been handed), and calling in the precinct results to the candidate's political HQ.  There were a number of people standing nearby handing around the votes (which totaled 451, and seemed low for a room of nearly 800) and trying to help sort.  Any one of these people could have selectively filtered the results of the few ballots by pocketing the little yellow (easily photocopy-able) vote sheets.  My six-year-old daughter managed to drop a handful of them on the floor at one point in her efforts to help me.

To think that there is and was so much worldwide emphasis on this process, which entails easily forge-able pieces of little yellow paper handled by people off the street (like this Libertarian Independent) give me cause for concern.  There were too many people, too little process and practically no organization.  My own staff meetings are handled more efficiently with far less ramifications than picking the next potential President of the United States.

Caucus Roundup

Poll: Bullshit Is Most Important Issue For 2008 Voters

This pretty much sums up the process (and results) of the Iowa caucus' last night.

Blogged with Flock

Some Healthy Discussion

I snuck away from home for lunch today and attended the last in the Des Moines University's 'A Healthy Discussion' series, which entailed getting presidential candidates to get specific about their platforms on health care.  Today was Ron Paul's turn to speak to the packed room, and being a physician (people are far-past pedantic about calling him 'Dr. Paul' here) was a distinct advantage in a room filled primarily with medical students and faculty.

The questions were rather direct, asking about how individuals can afford chronic care without a government entitlement apparatus and the like.  Ron is an advocate for dismantling the FDA (which met with considerable applause) and letting market dynamics and private watchdog organizations do the same job as is the case with automobiles and electronics.

In a recent Ames presentation, Ron summed up his message pretty well with three simple bullet-points: "First: I dont want to run your life.  We all have different values.  I wouldn't know how to do it, I don't have the authority under the Constitution, and I don't have the moral right.  Second: I don't want to run the economy.  People run the economy in a free society. And Third: I don't want to run the world...We don't need to be imposing ourselves around the world."

The message seems to be resonating pretty well with the Internet public, as Dr. Paul won the MySpace virtual primaries for the Republican candidate, as well as leading the current Facebook politics poll.

3.5 hours to departure to my local caucus location.  Look for more photos and play-by-play (at least in twitter) during the actual event.

Blogged with Flock

Tags: Politics

Back of the napkin math....

It is sad to note that almost all of the presidential candidates campaigning through the Great State of Iowa are a fan of building a border wall to combat illegal immigration.  I was mulling this over this afternoon, and decided to figure out what the approximate cost of said wall would be, give or take a few billion dollars.

1. Length of Land Wall- The Mexican-United States border is 1,969 miles, and the Canadian border is 5,522.  You'd not want to replicate the mistakes of the Chinese in leaving gaps in the wall for the Mongols to come through, right?
2. Length of Sea Wall- Since it is trivial to just sail or swim around our land wall to open coastline, as immigrants from everywhere from Vietnam to Haiti can attest, we'd obviously need to build sea walls as well  (completely obliterating tourism and the fishing industries, and hobbling all international shipping trade, but we'll avoid those realities for this exercise).  My last count has our shoreline (water) borders at 12,383 miles. This gives us a grand total of 19,874 miles of total border to protect from the North, South, East and West. 
3. How high does the wall need to be?  Previous self-circumvallation exercises like the Great Wall (25 feet), the Berlin Wall (11.8), Hadrian's Wall (15 feet) and the more recent Israel Separation Barrier (18-25 feet) would average out at approximately 18 feet high.
4. CapEx?  Well, if you were really conservative and took the recent Israeli estimates of slightly more than $2M per mile (over primarily flat land) for the ISB and applied that to the great expanses of the plains as well as the impressive peaks of the Rockies, not to mention all that shoreline, you'd end up spending a mere $40,741,700,000 to box in the polis of the United States with an 18 foot wall.
5. OpEx? We are much more technologically advanced than the Romans were with Hadrian's Wall, or the Great Wall of China.  We have accurate sensor technology, satellites, and many more tools at our disposal.  For the sake of argument, lets say that if you had a small detachment of guards, say 5 per 20 mile segment, on duty at any given time.  If you paid these guards the new U.S. minimum wage of $7.25 per hour, then the annual labor costs (not including benefits, if any) would only be $317,000,000. Where they work, what they eat, if they have equipment like guns or tasers, are not factored in.  Of course, all these minimum wage employees could supervise themselves, right?

So, net-net, about $41B for the wall to be built, and North of $310M a year to man it.  You'd add about 20,000 guards to the payroll of the US Government to monitor and police a wall 13 times the length of the Great Wall of China.    That's only a one-time-cost equal to the annual budget for Elementary/Secondary and Higher education for the Department of Education. No problem.  Plus, it worked so well for all those other civilizations who walled themselves in during some reactionary isolationist phase.

A corollary idea, posited by my lovely wife at dinner, is that the wall could be multi-purpose.  Given the quickening erosion of our civil liberties in the United States, eventually people will not want to immigrate to the US, but from.  The repurposed wall could keep those reluctant citizens from wandering away to some less Orwellian country.

Whoops, looks like I ran out of sarcasm already.  More later.