Las Vegas Best Not Be Counting On A Bailout

As most cities, states and businesses are waiting with baited breath for thier bailout money one coty that better not be holding it's breath is Las Vegas. I just began studying the American Recovery and Reinvestment Act of 2009, otherwise known as bailout #2, and right away something struck me, in sec. 1109; which states prohibited uses of the money:

"SEC. 1109. PROHIBITED USES.

None of the funds appropriated or otherwise made available in this Act may be used for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool."

So, unless Nevada Senator Harry Reid makes some changes when it reaches the senate, it looks like it doesn't matter to Washington if Nevada fails. Which gets me, beacause if Citi Group is too big to fail it would seem to me that an entire state would be as well.

So much for this actually being about helping the economy.

Here's a news article about it.

And, if you feel really jaunty, you can read the bill here in PDF.

Note: I don't think any money should go to casinos; but that's because I don't think this bill should exist at all. If they are going to try and claim this has anything to do with actually helping the economy they should actually help the economy, not just give more money to themselves and their friends.

And here's an interesting chart showing how much money they are printing for this bailout.

Wiemar Republic anyone?

And here's a stilmulous breakdown from Glenn Beck.

FDR's policies prolonged Depression by 7 years, UCLA economists calculate

I just found this article this article. I pasted it here, but you can follow the link and read it as well.  Interesting stuff. And sadly right now it seems all to familiar.

By 

Meg Sullivan

 

| 8/10/2004 12:23:12 PM

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

"Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA's Department of Economics. "We found that a relapse isn't likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.

"President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services," said Cole, also a UCLA professor of economics. "So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies."

Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, Cole and Ohanian were able to establish average wages and prices across a range of industries just prior to the Depression. By adjusting for annual increases in productivity, they were able to use the 1929 benchmark to figure out what prices and wages would have been during every year of the Depression had Roosevelt's policies not gone into effect. They then compared those figures with actual prices and wages as reflected in the Conference Board data.

In the three years following the implementation of Roosevelt's policies, wages in 11 key industries averaged 25 percent higher than they otherwise would have done, the economists calculate. But unemployment was also 25 percent higher than it should have been, given gains in productivity.

Meanwhile, prices across 19 industries averaged 23 percent above where they should have been, given the state of the economy. With goods and services that much harder for consumers to afford, demand stalled and the gross national product floundered at 27 percent below where it otherwise might have been.

"High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns," Ohanian said. "As we've seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market's self-correcting forces."

The policies were contained in the National Industrial Recovery Act (NIRA), which exempted industries from antitrust prosecution if they agreed to enter into collective bargaining agreements that significantly raised wages. Because protection from antitrust prosecution all but ensured higher prices for goods and services, a wide range of industries took the bait, Cole and Ohanian found. By 1934 more than 500 industries, which accounted for nearly 80 percent of private, non-agricultural employment, had entered into the collective bargaining agreements called for under NIRA.

Cole and Ohanian calculate that NIRA and its aftermath account for 60 percent of the weak recovery. Without the policies, they contend that the Depression would have ended in 1936 instead of the year when they believe the slump actually ended: 1943.

Roosevelt's role in lifting the nation out of the Great Depression has been so revered that Time magazine readers cited it in 1999 when naming him the 20th century's second-most influential figure.

"This is exciting and valuable research," said Robert E. Lucas Jr., the 1995 Nobel Laureate in economics, and the John Dewey Distinguished Service Professor of Economics at the University of Chicago. "The prevention and cure of depressions is a central mission of macroeconomics, and if we can't understand what happened in the 1930s, how can we be sure it won't happen again?"

NIRA's role in prolonging the Depression has not been more closely scrutinized because the Supreme Court declared the act unconstitutional within two years of its passage.

"Historians have assumed that the policies didn't have an impact because they were too short-lived, but the proof is in the pudding," Ohanian said. "We show that they really did artificially inflate wages and prices."

Even after being deemed unconstitutional, Roosevelt's anti-competition policies persisted — albeit under a different guise, the scholars found. Ohanian and Cole painstakingly documented the extent to which the Roosevelt administration looked the other way as industries once protected by NIRA continued to engage in price-fixing practices for four more years.

The number of antitrust cases brought by the Department of Justice fell from an average of 12.5 cases per year during the 1920s to an average of 6.5 cases per year from 1935 to 1938, the scholars found. Collusion had become so widespread that one Department of Interior official complained of receiving identical bids from a protected industry (steel) on 257 different occasions between mid-1935 and mid-1936. The bids were not only identical but also 50 percent higher than foreign steel prices. Without competition, wholesale prices remained inflated, averaging 14 percent higher than they would have been without the troublesome practices, the UCLA economists calculate.

NIRA's labor provisions, meanwhile, were strengthened in the National Relations Act, signed into law in 1935. As union membership doubled, so did labor's bargaining power, rising from 14 million strike days in 1936 to about 28 million in 1937. By 1939 wages in protected industries remained 24 percent to 33 percent above where they should have been, based on 1929 figures, Cole and Ohanian calculate. Unemployment persisted. By 1939 the U.S. unemployment rate was 17.2 percent, down somewhat from its 1933 peak of 24.9 percent but still remarkably high. By comparison, in May 2003, the unemployment rate of 6.1 percent was the highest in nine years.

Recovery came only after the Department of Justice dramatically stepped enforcement of antitrust cases nearly four-fold and organized labor suffered a string of setbacks, the economists found.

"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."

-UCLA-                                                      

LSMS368                                                        

These united states are not a Democracy!

You see it every where you look; from school books to TV even from our own federal government, that these united states are a Democracy.   But this is not, nor has it ever been the case.  From it's very inception this country has been a Constitutional Republic.  What's the difference? Well; in a Democracy it is rule of the majority directly or indirectly.  In a Direct Democracy every person votes on every issue and what ever the majority wants becomes law.  In an Indirect or Representative Democracy the people elect representatives who vote for them; but are still supposed to vote the way they think they people they are representing would vote, and what ever the majority wants becomes law.  On the other hand in a Constitutional Republic the people elect representatives who vote for them; but cannot make any law which abridges that of the contitution and do not need to vote how they think the people they are representing would vote.  The difference comes down to the power of the majority and collectivism.  If we define ourselves as a Democracy it is easy to do as we have been doing for past decades and assume what ever the majority wants is what should be law; say for instance in a Democracy if the majority want to own slaves, they're elected officials have no right to stop them.  However if this same place were a Constitutional Republic, even if the Constitution did not explicedly say slavery is wrong, the representatives have the right and the duty to tell the majority that slavery will be outlawed (unless of course the Constitution were to grant the right of slavery).  So, a Democracy can quickly lead to mob rule and harm the rights of others simply because the majority want to.  It may seem like a small difference, but come the time when you are in the minority, it can be a big difference.

*Republics are also explicitly categorized as not allowing monarchy, where as Democracies do not make that distinction.

Personal Vs Political

One thing I can't understand is why people can't seem to seperate their personal and political views.  To me it seems simple.  Political views have to be backed up by reason and logic; while personal views can be what ever crackpot idea you have.  I have a standard; the right to property, which all my political views have to live up to, so even if I personaly think something is right or wrong, if it does not uphold this standard then it does not become a political view.  There are many such instances, such as: Guns- politically I think they are a naccesity; but personaly I don't really like them (of course I like looking at them and learning about them and seeing them in movies, but I feel nervous around real guns) Religion- politically I think it has no place; personally I am very religious (although I don't believe in organized religion, I'm more of an independant study kind of guy) Sex- politically I could care less how someone enjoys their sexuality; personally I don't think sex belongs anywhere but a long term relationship. Money- politically I think it's a great thing, it makes the world go round, everyone should have as much as they can grab a hold of; personally I don't like big business and think people should only have what they need and share as much as they can.  Property- politically I don't care how much you have; personally I feel like too much property is a waste of space and would be fine in a one room shack (however I do like undeveloped land for recreation). Drugs- politically I think they should all be legalized and you only get into trouble if you harm someone (property of any kind) or come close to it; but personally I have not used an illegal substance for years and thier leagalization wouldn't affect me one or the other. Another thing is; politics is about people; personal views are about a person; singular.  In my personal and political views there is one thing in common, the golden rule "Treat others as you wish to be treated";  and to me that means leave me the fuck alone and let me live my life how I want to as long as I don't hurt you (or your property), and I'll do the same to you.