The system isn’t rigged Mr. Sanders. It’s built for risk takers

Senator Bernie Sanders, Independent of Vermont, has been proselytizing on the ills of the American political economy, specifically that the economy is rigged in favor of big banks and the wealthy. I wouldn’t use the word, “rigged”, because that implies that the American political economy was marketed to the average citizen as one that guaranteed some level of success.

That was never the case. Rather from its colonial beginnings, America was marketed as a place where if capital was willing to take on high risk, there would be higher returns on his capital versus had he stayed home in Europe. The system was never designed for comfort-seekers, the type of citizen that Mr. Sanders is catering to in his campaign for the Oval Office. It was designed for risk takers; the investors in the stock trading companies that opened up trading posts in the Americas with the intent of monopolizing trade routes with the blessing of their monarchs.

The other risk takers were those that bought into the marketing schemes of the trading companies that needed people to settle and work the soil in the New World. These common folk were lured by the opportunities to get rich or fell for the narrative that the New World offered haven for those seeking to practice their religion in peace.

I would be remiss not to mention my West African ancestors whose slave labor, along with the indentured servitude of my Irish ancestors, was leveraged by plantation owners to reduce risk of lost returns on their investments in the New World. These individuals would not be sharing in the gains risk takers expected.

One need not look to far for proof that the American political economy favors risk takers. Capital claims larger shares of income than labor. It is capital that fuels commercial growth after all. Also, the tax code favors entrepreneurs versus wage earners where entrepreneurs have overall a lower marginal tax rate and have access to the opportunity to write-off a larger set of expenses against their incomes.

Even if the system is rigged as Mr Sanders believes, then he should share with Americans specifically how the system is rigged and how he plans to un-rig the system. Constantly repeating that “bankers gone bad” traded high-risk securities recklessly in the financial markets and consequently got themselves a tax-payer bailout doesn’t quite move me as a proper description of the cause of a melt-down of a complex American economy.

Mr Sanders policy prescription for solving the problem of a rigged system should address the variables that, in Mr Sanders’ opinion, caused the 2008 melt down in financial markets in the first place. I honestly don’t see the Sanders campaign making this attempt. It is easier to scream rhetoric and raise campaign money than to provide a substantiated, well-reasoned analysis.

Posted in Bernie Sanders, economics, Economy, Election2016 | Tagged | 1 Comment

With China’s slow down, should Trump still have a beef

Donald Trump’s displeasure with Chinese economic policy is well documented. Mr. Trump takes issue with China’s devaluation of its currency; their determination to make their exports cheaper than American goods; and the impact a devalued Chinese currency has on America’s manufacturing industry.

Devaluation hasn’t been working too well for China, especially over the past decade. The currency has been appreciating. Some estimates have the renminbi overvalued approximately 30%. In addition to the “tax reduction” spurred by falling prices at the gas pump, Americans have been experiencing a windfall due to the pricing of Chinese products. While Mr. Trump lays blame for America’s deteriorated manufacturing industry at the feet of Chinese economic policy, the culprit may actually be the replacement of labor with more efficient technology.

Mr. Trump has made many a claim on the campaign stump that China is beating the United States in the world economy, but recent turmoil in the markets begs the question whether this Asian tiger is losing its mojo.  A report recently released by Goldman Sachs points out that China is having a rough time converting an investment and export driven economy into a consumer driven economy, the kind of economy that Mr. Trump would prefer because it would make available to American producers a market of over one billion people.

To keep current growth and avoid a “hard landing” of its economy, China may have to increase its debt, according to Goldman Sach’s Sharmin Mossavar Rahmani. If not, that hard landing may well be just a couple years around the corner. Goldman Sachs in its report recommends to its clients that they continue reducing their allocation of assets to emerging markets including, I take it, China’s.

At first glance this doesn’t bode well with Mr. Trump’s investment strategy for China. Why push to open markets in an economy that may have peaked and can’t get its re-balancing act together?

But if China’s downward spiral continues to cause volatility in the markets and raises the uncertainty that accompanies volatility, Mr. Trump may be able to use China’s woes to his political advantage. If global slowdown ensues this year in part to China, Mr. Trump might argue that what is happening in the world’s largest country and second biggest economy is the fault of President Obama and that a vote for Hillary Clinton would pose a risk that poor policies will continue to come out of Washington further damaging the American economy.

He hasn’t made that argument yet, but given the circus that this New York carnival barker occupies at center stage, such a move would not not surprise me.

 

 

 

 

Posted in China, Donald Trump, Economy, Election2016, Uncategorized | Tagged , , | Leave a comment

The Oscars debate shows black community penchant for scraps versus capital

The New York Times posted an article citing black actor concerns about the Academy of Motion Picture Arts and Sciences’ failure to nominate any black actors for the coveted golden trophies of a naked dude. The article features a few observations of celebrated actor David Oyelowo most of which challenged the lack of diversity in the Academy’s membership. A number of black celebrities that have earned a few paychecks in front of the movie cameras have indicated a desire to boycott the party in March when the awards are handed out.

Neither the lack of nominations or the disgruntled outbursts are a surprise to me. The black elite tends to play the “we want our seat at the table” card when it comes to the Academy awards or other tumultuous moments in social justice.  What is increasingly disheartening is that the black community insists on following a leadership that would rather play for scraps than go for the whole rack of beef.

My argument isn’t new. Filmmaker Tambay Obenson shared a similar sentiment in a post for NPR back in October 2007. Here is an excerpt from the post:

As a black filmmaker, I once empathized with the cries of black voices working within the studio system, criticizing it for its lack of diversity. However, the song has become stale, as people like myself, existing outside the system, struggle to understand the apparent lack of vision that some of our well-paid, powerful, influential voices display.

In recent weeks, I’ve read articles in which black Hollywood elite like Halle Berry, Spike Lee, and Tyler Perry have expressed their frustrations with some aspect of the industry, specific to their race. It seems to me that we’ve created this unfortunate reality for ourselves, this prison that we’ve psyched ourselves into, when we clearly have the power to create the kind of truth we yearn for. Instead we wait for a group of devout capitalists to some day realize our plight and intervene accordingly.

Black-owned studios have launched and failed. Remember Sapphire Entertainment, Inc.? Launched in 2006, the company seems to have ridden off into the sunset like so many “B” movies. Yes, with larger film and television production studios maybe black actors would have the additional exposure necessary for an Oscar win.

But should that be the black community’s focus? I think not. Rather, it should be on viewing and investing in the production and distribution of content provided by independent producers. Will Smith getting nominated for an Oscar doesn’t help the black community other than another check-off in the symbolism department. If black investors owned the production house that owned the movie that Will Smith is in and are having a hard time accessing capital, then that’s a concern.

Posted in capital, Uncategorized | Tagged , , , | Leave a comment

No. There is no comparison between Tamir Rice and the Jolly Oregon Ranchers

A number of posts in social media have been comparing law enforcement action in the case of Tamir Rice with the apparent lack of law enforcement action in the case of a “militia” occupying federal property in Oregon. The comparisons are unfounded.

The action against Master Rice was a state action. It was a violent, unnecessary action by representatives of the state against a citizen.

The second case involves action by a private entity protesting against a state action. In their opinion, the state has taken an action (land management) resulting in an over reach.

Is the occupation of a wildlife agency headquarters the best approach to addressing a grievance? Probably not, although the “militia” is following a Madison Avenue approach to getting attention and traction for its beef (no pun intended. They are ranchers for Christ sake).

I have no doubt the Obama Administration wants to avoid a shoot out given Mr. Obama’s gun control initiative announced yesterday. Again, a good political marketing move. Not only would he look like a hypocrite, but such a state action, given the ranchers gripe about over reach, would only play to their hand.

Lastly, why would black progressives give a damn about how the federal government, which historically has done a shitty job advocating for minority civil rights, reacts to a bunch of ranchers in Oregon who are smart enough to brandish weapons for their attention getting effect while not using them on anyone or anything (I suspect they’ll start shooting birds for food instead of ordering pizza)?

In short, the Obama Administration (ironically most black progressives are not linking lack of action to the President. Go figure) is acting appropriately and as long as the ranchers aren’t taking hostages or provoking violence, I giveth not two fucks …. and nor should you.

Posted in Barack Obama, Election2016, government, police | Tagged , , | Leave a comment

The only things you should be afraid of are the institutions that tell you to be afraid

I’m watching CSPAN and listening to Lauren French, a congressional reporter for Politico, talking about the fear that Americans are experiencing right now and how candidates like Donald Trump have been able to tap into this fear. This fear may be concern for being a victim of terrorist attacks or concern about how the economy is treating the average American.

I believe what’s driving this fear is the failure of Americans to rely on themselves versus placing their faith, trust, and belief in any and all institutions that need your fear in order to survive.

Government needs you to be fearful of an uncertain future. Your fear of a foreign power allows government to justify taxing you to finance an army. Your fear of a terrorist act authorizes government to suspend portions of your civil liberties. Your fear of not living a quality life during retirement authorizes government to raise taxes to fund social security and Medicare. Your fear that the economy will not provide you a job authorizes government to tax you and fund job training programs and universities.

The irony is that for all the fear and government regulations and taxation that fear creates, citizens experience the inefficiency, ineffectiveness, and downright failure of these initiatives and find their fears compounded, aggravated. Their institutions are not protecting them because these institutions never had their best interests in mind.

If institutions had your best interests in mind, they would emphasize how best to face your supposed fears on your own. While I’m angered at acts of terrorism, I don’t fear terrorists. Violent death comes from various sources and I’m more concerned about police offers carrying out violence against me than some nut job who believes that his religion gives him the right to convert me to his narrative via threat of violence.

Against either a terrorist, who represents someone who wants to take over the reins of the State,or the incumbents that occupy the seats of power in the State, my first and only valid line of defense is me. I feed and strengthen my body in preparation of attack. I arm myself. I fortify my property. I study how to produce my own energy and grow my own food so I can sustain myself. I use my knowledge of the law to halt the State’s encroachment on my right to sustain myself as I see fit. In these ways I eliminate my fears.

If you are fearful of something, you should be afraid of the faith, trust, and belief that you place in institutions that continuously fail you; fail you because your personal self-interest has never been their concern.

Posted in American society, foreign policy, government, liberty, police, society, statism | Tagged , , | 1 Comment

The GOP’s field of dreams is filled by punks ….

Growing up in the late sixties and early seventies, it was nothing for elementary school children in St.Thomas to indulge in a Monday morning debate over what they saw on “60 Minutes” the night before. Those same kids engaged in passionate assessment of gubernatorial elections as well. We learned very early that politics was a blood sport to be engaged in by only the heartiest of men and women.

If you pulled a West Indian aside and asked them to assess American politics, most would tell you that American politicians are nothing but wusses. Most Americans would try to argue that we are wrong, but if you want proof of how sissified American politicians are, look no further than the punk-ass reactions the GOP candidates for president have been providing to yesterday’s front page of The New York Daily News.

Candidates like lukewarm libertarian Rand Paul have been going bat shit over the cover, claiming The Daily News is showing no respect for how people are expressing their feelings regarding the shooting in San Bernardino. My first takeaway from his bitching is that he misses the point. Watching Paul Ryan crossing himself and sending up a Hail Mary is not leadership or policy. It’s punting the issue.

The second takeaway is how ridiculous these punks would look trying to negotiate with Vladimir Putin or Angela Merkel. If this is how you react to a newspaper front page, how are you going to react if Mr. Putin tells you to go fuck off or Mrs. Merkel tells you that she’s going to support the European Central Bank’s attempts to further devalue its currency while giving you the finger?

Compounding the ridiculousness is the willingness of 50% of the country to support these crybaby asswipes who all claim that they can lead…..

….. the irony….

Posted in Election2016, Republicans, Uncategorized | Tagged , | Leave a comment

Any extension of the #solar investment tax credit faces a tightening window

While some members of Congress have sponsored bills that would extend the investment tax credit for solar energy, that window for passage is closing.  One question is, if the investment tax credits were to expire, would investment in solar deployment be negatively impacted?

An online article in The Wall Street Journal presents two arguments on what impact the expiration of investment tax credits may have on solar investment and deployment.  On one hand, supporters of the tax credit, which amounts to 30% reduction in the basis of eligible property invested in, believe that employment in the industry would be reduced by approximately 80,000 jobs in 2017.  Solar installations for residential customers would fall by 94% in 2017 while utility-scale projects would evaporate completely.  Supporters also argue that if prices for installing solar were to fall in the absence of the investment tax credit, deployment of solar would suffer.

Opponents of extending the investment tax credit for solar believe such an action may actually stimulate more investment and residential ownership of solar panels.  Getting rid of the investment tax credit would have a small impact because incentives for developers and residential consumers were never that big to begin with.  Financial middlemen absorbed almost half of the investment incentives leaving developers and residential consumers with effectively 15% of the incentives.  It’s estimated that if they were a rise in prices as a result of eliminating the investment tax credit for solar, that increase would be approximately 2.5%.

In addition, opponents argue that getting rid of the credit opens the door to alternative methods of financing solar deployment.  The market may see securitizing solar leases as one way of raising capital necessary for continued investment.  Also, self-financing may show itself a less expensive option than leasing should the credit be eliminated, especially in light of the falling prices for solar panel installation.  Ir’s estimated that self-financing lowers installation costs for residential consumers by 23% while commercial customers may see a reduction of 87%.

Whether an extension is passed in time before the end of 2016 depends on how well Congress leverages the time remaining between now and when campaign season really gets cranking up.  Staffers on Capitol Hill see the best time for legislative action to take place in the first half of 2016.

At least two bills of interest to the solar industry have been introduced in Congress.  HR 2412, introduced by Congressman Mike Thompson, Democrat of California, on 19 May 2015, would extend investment tax credits for solar and other renewables to 1 January 2022.  HR 2412 has 39 co-sponsors.

Senator Brian Schatz, Democrat of Hawaii, introduced on 14 July 2015 S 1755, a bill that would give residential consumers a five-year extension on the investment tax credit.  S 1755 has six co-sponsors.

Republicans have in the past expressed support for the investment tax credit.  For example, House committee on energy and commerce chairman Fred Upton, Republican of Michigan, supported extension of the investment tax credit in 2008.

The Democrats that have taken the lead on these initiatives will have to ramp up their efforts in order to beat the 31 December 2016 expiration.

Posted in energy | Tagged , | Leave a comment

.@TMobile’s zero rating plan shows how oppressive #netneutrality is

T-Mobile has announced a plan called “Binge On” that allows its subscribers to stream for free videos from certain content providers. According to the company’s website:

“Starting November 15th, Simple Choice users on a qualifying plan are FREE to stream unlimited video on your favorite services like Netflix, HBO NOW, Hulu, and many more without using a drop of your data. Nothing to configure – all automatically applied to your plan. Streamers, go ahead and Binge On™.”

This type of plan, known as “zero rating”, can be likened to dialing 1-800 to reach businesses of your choice.  The discount in pricing, if you will, comes from the subscriber not having the streaming count against their data plan.

Based on what I’ve read in The New York Times, proponents of net neutrality, the concept that calls for equal treatment of traffic from all providers, are up in arms about what they believe could amount to larger content providers like Netflix obtaining an advantage where T-Mobile subscribers decide to play in video streaming heaven by downloading movies and TV shows from the biggest driver of traffic in North America.

But while proponents warn of a possible tsunami of other wireless providers following suit, Wall Street didn’t appear too concerned about the plan as reflected in T-Mobile’s share performance since 10 November.

Should investors in the “Uncarrier” have anything to worry about from the Federal Communications Commission? It all depends on how they apply their net neutrality rules. According to 47 CFR 8.7:

“A person engaged in the provision of fixed broadband Internet access service, insofar as such person is so engaged, shall not unreasonably discriminate in transmitting lawful network traffic over a consumer’s broadband Internet access service. Reasonable network management shall not constitute unreasonable discrimination.”

47 CFR 8.11(d) defines reasonable network management as:

“A network management practice is reasonable if it is appropriate and tailored to achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service.”

The Commission will be forced to apply 47 CFR 8.11(d) which from public administration 101 is always problematic and case-by-case.  The Commission will have to reconcile Chairman Tom Wheeler’s flowery rhetoric about virtuous cycle of innovation and democratizing voices on the Internet with the hard cold realities of business.  That reality is that the legitimate network management purpose of a carrier is to leverage its technology to generate the greatest amount of profit.  This is maximized when a carrier provides its subscribers with the best service.

T-Mobile should argue that it generates at this time the best customer value by providing a discount on access to the best content available and right now that includes Netflix and Hulu and a few others. T-Mobile is stopping its subscribers from accessing content of their choice. It is using the best content to retain current subscribers while trying to obtain new ones. Binge On is an appropriate profit generating strategy.

If the Commission is serious about AT&T and Verizon facing true competition, it will have to let the smaller players use innovative marketing to compete. The Commission shouldn’t speak out of both sides of its mouth.

Posted in broadbad, broadband access provider, Federal Communications Commission, net neutrality, regulation, smartphones, T-Mobile, Title II, wireless | Tagged , , | Leave a comment

To best understand the economy, replace government with self?

The Republican presidential debate on 10 November 2015 did little to enlighten me on how these candidates view the role of American government in the economy.

Ted Cruz, the senator from Texas, shared with us that he intended to eliminate four or five agencies along with a plan for reducing taxes.

Donald Trump, while reiterating the need for a physical wall between the United States and Mexico, also shared with the viewers his plan to cut taxes on the middle class while raising taxes on his wealthier friends.

Just about everyone had a tax plan that they argued would help put more money in the pockets of Americans while businesses, freed from onerous regulations, would be free to spend more on hiring American talent because they would have an incentive to stay in the United States and conduct business.  The rhetoric of tax reduction and reducing the size of government was not surprising last night and quite frankly had me bored by about the 75th minute of the debate.  So bored had I become that I even declared on my personal Facebook page that this debate would be the last political debate that I would ever watch.

Not that the moderators did a poor job. On the contrary, Gerald Seib, Neil Cavuto, and Maria Bartiromo did a very good job keeping the discussion on the economy and, to the relief of Ben Carson, were wise enough not to ask any questions requiring one to recall what they said in high school.

The poor performance was actually delivered by the candidates. None described America’s actual politico-economic system.  They all decided to fall back on the parlor trick of watering down a complex topic of the economy to one of taxes and jobs. Study economic history and you’ll see that the economy has never been just about taxes and, in my opinion, hs not much of anything about jobs.  Whether in Benin, Brazil, Cuba, Ghana, Russia, or the United States, the economy has always been about extarcting and managing resources.  For a nation-state’s economy, it has been specifically about the extraction and management of resources for the benefit of the elite few that lay ultimate claim to or try to exercise authority over resources.  It is the “who” or the “final benefit” that is always left out of the equation.

A discussion about jobs and taxes are nothing more than the red meat politicians throw at the electorate to get a vote.  Jobs and taxes are packaged as a narrative for sale to Joe Six-Pack with the hopes that Joe ascertains enough benefit from the offer. Joe has no idea as to the package’s true cost.  He doesn’t do enough homework because the cost of gathering the information is too much; too time consuming.  It’s easier for him to digest the job projections and go “yeah, yeah” when he hears he may get a 20% reduction in his taxes or get a rebate check of $300 so he can go out and buy a sofa.  Any gains to Joe would be as short term as the aggregate output gains to the nation-state.

Rather than buying into the politician’s definition of the economy, Joe Six-Pack should base a decision on what the economy is by simply looking at himself as an economic unit. To be a successful individual economic unit, Joe will have to first first ascertain his resources, his capital, not from the consumer-based view of a policy paradigm based on jobs and taxes, but from a producer-based paradigm based on having the resources necessary for sustaining myself. Do I have land, minerals, air, sources of energy upon which I can sustain myself? If not, where can I extract these resources? How best do I manage them so that I can sustain myself?

At this point you are probably saying, “Is this guy recommending we go back to the Dark Ages?” No, I’m not. However, the concept of self-reliance should never be abandoned especially if you believe that you are in the best position to make the best economic choices for yourself.

Today’s technology is providing the tools necessary for increased self-reliance.  As renewable energy technology improves, more Americans are opting for supplying their own energy needs. Making more unlicensed spectrum available means using more innovative devices at home that can enhance your productivity or your leisure. Technology can make transportation a resource versus the consumption of a final good. Why buy a car that sits most of the time idle when technology allows you to access transportation on demand?

As much as the Republicans talk about personal and economic freedom, their narrative on the economy boiled down to “this is what we can for you.”  We, government, can reform your taxes rather than freeing you from them. We, government, can create jobs rather than you creating your own commercial value and selling that value on an open market.

The GOP repeated the same mantra as the Democrats. We will continue to monopolize the resources you need to be self-sustaining while sending a little chump change your way.

 

Posted in economics, Economy, Election2016, employment, energy, libertarian, liberty, Political Economy, renewable energy, spectrum | Tagged , | 1 Comment

Some make argumement that the @FCC’s #spectrum proposed rule making doesn’t go far enough

I wouldn’t exactly say that a political battle is brewing per se around the Federal Communications Commission’s proposed rule making on opening spectrum use beyond 24 gigahertz but some interested parties would like to see the Commission open up this portion of the electromagnetic wave opened up to more technology than just mobile wireless.

For example, the Consumer Electronics Association wants the Commission not to focus solely on mobile broadband but on a wider range of services.  Harold Furchgott-Roth in a piece for Forbes argues that the Commission should allow for flexibility in spectrum use by not limiting the type of technology that can be developed and commercialized in the high frequency bands.  Like CEA, Mr. Furchgott-Roth believes just limiting the 24 GHz to 39 GHz to mobile broadband would be a waste of spectrum’s final frontier.

During the comment period on the Commission’s proposed rules we may get a better view as to how the private sector wants the spectrum real estate developed.  From an entrepreneurial and investor perspective, Mr. Furchgott-Roth and the CEA make good arguments.  Can the markets afford a restriction on innovation in the high-frequency space where the Commission for the most part limits use of this spectrum to mobile wireless?

Posted in broadband, capital, entrepreneur, Federal Communications Commission, Internet, spectrum | Tagged , | Leave a comment