Return of the Great Depression

When the Federal Reserve lowers interest rates, this encourages people to spend, rather than save. Earning 1% on your savings simply isn't very exciting. During an inflationary period, 15% might not be very exciting. The alternative is to spend. Not only do people spend what they have. Low interest rates encourage them to buy on credit.

The combination of increased consumer demand and low interest rates encourage businesses to borrow, in order to meet that demand. This puts more money in the hands of both employees and investors, who naturally tend to spend rather than save.

On the surface, this sounds very pleasant. Jobs are plentiful. Profits are increasing. Everybody's happy. But how does the Fed lower interest rates? It accomplishes that primarily by purchasing treasury bills, and paying for them with money it created out of thin air. The more dollars we have in circulation, the less each dollar is worth. This phenomenon is known as inflation. It amounts to an across the board pay cut. In an inflationary environment, you might find yourself increasingly impoverished each year, even though your wages continue to increase.

I agree with those economists who argue that a small consistent rate of inflation isn't necessarily a bad thing. In a stable market, the prices of various commodities can be expected to rise and fall. The market price of labor can also be expected to rise and fall. People tend to be much more agreeable to their grocery bills going up, than to their pay being cut, even though the end result might be the same. So, we'll just have these regular across the board pay cuts, and allow employers to counter them by granting pay raises when appropriate.

Though current practice links the two together, it is the lowering of interest rates, rather than the expansion of the money supply, which leads to excess capacity. Excess capacity, in turn, leads to layoffs, unemployment, and bankruptcies. The Fed can sometimes counter this, by lowering interest rates. But at some point, doing so would result in hyper-inflation, and a complete breakdown of the monetary system. So they accept the pain of a recession, when it appears to be the lesser of the two evils.

This might be tolerable, if we could just accept that we are going to have a recession every few years. Unfortunately, the amount of stimulus needed to generate a recovery tends to increase over time. At some point, we could be looking at a recession, even though interest rates are near zero. That was the state of affairs just prior to the stock market crash of 1929. It is also what we are facing today.

What can we do about this excess capacity? We can utilize it, by expanding government programs, such as welfare. We can put a lot of people to work with a massive program of infrastructure improvements. We can start a war. War does not create prosperity. But it can increase employment temporarily.

I hope we can avoid World War III, though I can't say I am optimistic about that. I do think it would be helpful to understand that countries often go to war, not because they have no alternative, but simply because they have nothing better to do with their resources.

As for the other two possibilities, I believe there is much there that is worth discussing. But I won't dwell on that now. The main point I would make at this point is that neither of these approaches fully addresses the problem. We need to stop creating excess capacity, instead of merely looking for ways to siphon some of it off.

The Fed could expand the money supply without lowering interest rates, by purchasing gold, or any other commodity for that matter. The gold standard was abandoned for good reason. I am not advocating its return. However, I do believe gold offers the Fed a method of expanding the money supply, without lowering interest rates. Instead of setting interest rates, let the Fed regulate the price of gold, by buying and selling it, rather than treasury bills, on the open market.

By purchasing treasury bills, the Fed also subsidizes the Federal Government. Let's do away with the shell game. When Congress needs to raise money, they can raise taxes, borrow, or levy the Federal Reserve.

If Congress takes too much from the Fed, the Fed will have no choice but to raise the price of gold, to prevent its inventory from being depleted. We will have inflation, and it will clearly be the fault of Congress. If Congress borrows too much, they will drive interest rates up, and dampen business expansion by competing with private borrowers. And if they raise taxes, well, nobody likes to pay taxes. People will continue to fight about these things, but I believe the boom/bust cycle would come to an end.

There is one other role I envision for the Fed. Though I believe it should be illegal for the Fed to loan money to a bank, or to anyone else, they could offer banks a nominal rate of interest on demand deposits. So when you deposit money into your checking account, the bank deposits that money into its checking account with the Fed. Certificates of Deposit could work the same way. The bank could pool all the money it collects for Certificates of Deposit, and deposits it into a Certificate of Deposit it has with the Fed. The Fed offers banks the same services that we want the banks to offer to their consumers.

And if you want to take out a mortgage, where will that money come from? There will be no shortage of investors willing to part with their money for thirty years, once interest rates are high enough to entice them.

I also think we should consider retiring the thirty year treasury bond, and replacing it with a thirty year annuity. Rather than paying off the principle at maturity, amortize it as we would amortize a mortgage. That way, when the government borrows money, a significant amount of the pain would be felt immediately, rather than 30 years later. Annuities would also be more attractive to retirees and other income oriented investors.

If we do as I suggest, what is the likely short term result? We will have a massive wave of layoffs and bankruptcies. That is going to happen in any event. Rather than postponing a depression, and making it worse in the long run, let's just dive into it.

Massive unemployment does not have to mean starvation. I recommend expanding the Food Stamp program, and simply giving everyone the maximum allowance, with no means test. I don't have to prove that I can't afford to buy my own books, in order to borrow from the local library. We also have public schools. Let's just give everyone a food allowance.

And while we're at it, let's throw in a housing voucher. Currently, I believe $100 a month per adult, and $50 per child, would be reasonable. That isn't going to give you a real nice place to live. But it will ensure that everyone has a roof over their head.

One thing I do not think we should be doing is raising the minimum wage. I would actually like to see it eliminated entirely. If the minimum wage is $15 an hour, and a robot can do your job for $10 an hour, where does that leave you? On the other hand, if everyone is guaranteed the basic necessities for survival, the living wage suddenly becomes a meaningless concept.

And how are we going to fund all this generosity? Raise taxes, and I don't mean just on the rich. Though the necessary tax increase would be substantial, I believe the effect would be minimal. If your taxes increase by $500 a month, and you receive $500 a month in benefits, and we're talking about food and shelter, things you were going to buy anyway, it's a wash. Some people would actually pay more than they receive, while others would pay less. But I think it would be doable.

But what of the retiree whose $200,000 stock portfolio suddenly becomes just so much worthless paper? If you find yourself in that position, I'm sorry, but you are not going to starve. If the government intervenes to prevent this from happening, like it or not, you are a welfare recipient, but one who has the illusion of self sufficiency.

American Sniper

I would have to give American Sniper a big thumbs up, even though I would agree with many of the observations its detractors have made about it. Perhaps that will take a bit of explaining.

An early scene shows a young Chris Kyle, being lectured by his father at the dinner table. His father explains that there are three kinds of people in the world, the sheep, who can't conceive of any evil in the world, the wolves, who prey on the sheep, and the sheep dogs, who protect the sheep.

Some people like to criticize Chris Kyle, because he enjoyed killing people. A soldier's job is to kill people. It is a job that needs to be done, and I see nothing wrong with a man enjoying his work.

Everyone that Chris Kyle killed in the movie was trying to kill American soldiers. I consider it more likely than not that the real Chris Kyle killed some innocent people by mistake. I am sure that some of these people were guilty of nothing more than growing up in what ended up being a war zone. It's war. Shit happens.

The movie does not try to explain why certain people might want to kill American soldiers. Some people do that, because they are just evil. In a later scene, where a recent letter from a soldier is read at his funeral, Chris Kyle remarks that this letter, where he questions our involvement in Iraq, is what killed him. I would say that is a perfectly valid observation.

If a man wants to kill me, perhaps it is because his mother failed to properly nurture him when he was little. And it is sometimes possible to turn a friend into an enemy by validating his worldview. But a soldier who thinks that way in a combat situation is going to have a life expectancy of about three seconds. He want's to kill me, because he is evil. I need to kill him first. Anything beyond that is irresponsible and reckless.

Other considerations might be worth examining, as part of a long term solution. I am personally concerned that our drone attacks might be creating more terrorists than we are killing. That is a legitimate topic for another movie. But a failure to address such issues is not a shortcoming of any movie that chooses not to address them.

I did find the movie's treatment of PTSD to be quite insightful. Chris Kyle, now a civilian, is sitting in a playground. As his daughter is playing, he scans their surroundings, keeping an eye out for enemy snipers and suicide bombers.

It occured to me that regarding this as an illness might be the wrong approach. When a soldier enters basic training, he is not given a diagnosis that indicates his unsuitability for combat, and prescribed a course of treatment. He is presumed to be unsuitable, until he has been properly trained. Perhaps a soldier who has been in combat should simply be presumed to be unsuitable for a return to civilian life, until he has been trained to do that.

There are enlistees who are unable to endure the physical rigors of training, and others who can't shoot straight because they can't stomach the idea of killing people. Some people just aren't cut out to be soldiers. A man who is a good soldier might believe beating the crap out of his wife is a good idea. Some people aren't cut out to be civilians.

Woman Injured on a CTA Bus

I boarded the #22, Clark Street bus this morning on my way to work. A woman with a large suitcase boarded right behind me. The bus took off, just as I was in the process of sitting down a few rows behind the handicapped section. As he accelerated, the driver made a sudden move to the left, to pull out into traffic.

I would not characterize the driving as particularly reckless. I was actually pretty typical. Of course, some people are more vulnerable and prone to injury than others. For that reason, it might have been better if he had not been in such a hurry.

Just as I had turned around to take my seat, I saw the woman collapse onto one of the sideways facing seats, and lose control of her suitcase, which was on wheels. Another passenger and I secured the suitcase, and moved it out of the way. Initially, the runaway suitcase appeared to be the most serious problem.

The driver stopped the bus momentarily, due to the commotion. But it looked like he was thinking about taking off again. I saw that the woman appeared to be in pain, and I told the driver, “We've got somebody hurt back here.”

The driver didn't bother to get out of his seat, and see what the problem was. Instead, he asked me what had happened. I told him the woman apparently got hit by her suitcase, after losing control of it while he was taking off.

Rather than get out of his seat to see if the woman needed help, he just sat there with a worried look on his face. It was obvious that he was concerned about getting blamed for what happened, instead of just getting this woman some help.

I heard another passenger say something about the woman having dislocated her knee. Also, the victim explained that she had twisted her leg after losing her footing. So apparently, the suitcase was incidental to the problem. I asked the victim, “Do you just need a moment, or do you need an ambulance?” She said she needed an ambulance, and I immediately relayed that to the driver.

The driver was keying something into a device that resembled an ipad. I assumed he was summoning help. After about 20 seconds, he appeared to be finished, and I asked him if he had an ambulance on the way. He replied, “I guess I could call one.”

So I whipped out my cell phone, and announced that I was calling 911 myself. Another passenger said, “You don't need to do that. The driver will call for help.” I ignored him, and proceeded to call 911, and gave the dispatcher all the necessary information.

After the driver had apparently finished with his own call, he walked back to chat with the victim. She explained to him that she had dislocated her knee several times in the past. The driver was very sympathetic, and seemed pleased that the conversation was turning in this direction. It occurred to me that this remark may have just reduced her settlement by several thousand dollars. But that was really none of my business. People do need to learn when to keep their mouths shut.

As for the driver, he had obviously not been trained to deal with emergencies. I'm sure someone told him what to do in such situations. But you need to train people, not tell them. There is a difference. In an emergency, people tend to forget everything they've been told.

As it became apparent that the bus would not be leaving anytime soon, everyone in the rear of the bus started heading for the front door. I was concerned that someone might aggravate the woman's injury, by inadvertently brushing up against her on the way out. So I blocked the isle, and told everyone to exit through the rear door. They all did, except for one woman who remained behind until everyone else was off, and then managed to slip past me and exit through the front door.

As I saw the fire truck pull up, I wrote my name and contact information on a notepad, and handed it to the woman. I'd have given it to the driver as well, had he thought to ask for it. Then I hopped aboard the next bus, which was just pulling up behind us, and texted my employer, to let him know I might be delayed. Actually, I managed to make it to work on time anyway.

Special Prosecutor

Since the grand jury refused to indict Officer Darren Wilson in the shooting death of Michael Brown, a number of other cases have come to light. Rather than comment on each of them, let me say that I do see a few problems.

For starters, there is such a thing as white privilege. A white man who has had to struggle for what little he has might have a problem with the concept, but it is a valid one nonetheless. However difficult a man's life might be, there are challenges that are experienced uniquely by women. This is no different.

I think people sometimes get caught up in a competition to see who gets to be seen as life's greatest victims. A necessary part of this competition is to minimize the significance of all obstacles other than one's own. A black person who fails to recognize the victimization of white people is doing essentially the same thing.

In each of these cases, where a black person was killed by a white police officer, we might ask what actually happened, to what extent the deceased was to blame for what happened to him, to what extent race played a role, and whether the officer committed murder, displayed incompetence, of simply did what had to be done.

Though I do have my own opinion about each of these cases, I have concluded that expressing what I continue to be the correct viewpoint, with no aim other than to show everyone who sees things differently than I do that they are wrong, serves no legitimate purpose. I have my viewpoint, and you have yours. Let's leave it at that.

Regardless of how one might judge a particular case, I think most of us can agree that there is something very wrong with a police officer being prosecuted by a prosecutor who routinely works in partnership with the police. The well intentioned prosecutor can turn a case over to a special prosecutor, to avoid any appearance of impropriety. But that option does nothing to restrain a prosecutor from deliberately throwing a case. We needn't agree that this has ever happened. Let's address it, because it could happen.

I am of the opinion that electing prosecutors serves no legitimate purpose. Theoretically, this is supposed to enable a prosecutor to pursue politically divisive cases, without having to worry about the possibility of antagonizing his superiors. But because prosecutors routinely work in partnership with the police, they are understandably reluctant to antagonize them. I suspect the election of prosecutors also increases the incidence of wrongful convictions, due to the pressure prosecutors are under to get convictions.

While I believe most cases should be prosecuted by a prosecutor who has been appointed by the local executive, I favor the creation of an Office of the Special Prosecutor, who would be elected, and whose job it is to prosecute cases which, in his judgment, might otherwise constitute a conflict of interests. I would like to see this done in every jurisdiction, from the county to the federal level.

Will this result in justice in every case? Of course not. It is unlikely that we will ever agree, as to what justice would even look like. But I do believe it offers us a better way of pursuing cases than we have now.

The greatest objection I see might be raised by those who would point to the shameful impeachment of President Clinton, with the help of a special prosecutor. The practice of sicking a special prosecutor on someone gives too little consideration to the possibility that a given case ought not to be pursued. The special prosecutor I'm talking about is an elected official, who takes it upon himself to prosecute a case or not, as he sees fit.

The Ferguson Grand Jury Decision

Nearly every news story on the incident in Ferguson refers to the shooting death of “Unarmed Teenager, Michael Brown.” They don't just call him Michael Brown. They always make a point of calling him, “Unarmed Teenager, Michael Brown.”

Despite being unarmed, I believe his behavior was such, that Officer Darren Wilson's use of his weapon was entirely appropriate. Were there inconsistencies in Officer Wilson's testimony to the grand jury? Absolutely, but show me a case where there are no inconsistencies in a witness' testimony. If he was lying about the Cigarellos, so what? Based on the video of Unarmed Teenager Michael Brown assaulting a shop owner a few minutes before his death, I consider it more likely than not, that Unarmed Teenager Michael Brown assaulted Officer Wilson as well. I don't care if he was unarmed. He was not entitled to a fair fight.

I agree with the decision made by the Ferguson grand jury, but I also agree with Reverend Al Sharpton's contention that the system is broken. Alleged misconduct by a police officer should be addressed by a special prosecutor, with no ties to the police, every single time. Furthermore, I don't believe the decision to call in a special prosecutor should be made by the county prosecutor. The special prosecutor should take the case, over the county prosecutor's objections if necessary.

In most jurisdictions, the county prosecutor is an elected official. Theoretically, this is supposed to grant the prosecutor sufficient independence, to enable him to prosecute police officers, and other public officials, without fear of upsetting his superiors. But because prosecutors work in partnership with the local police, they are understandably reluctant to jeopardize that relationship, by prosecuting them. I believe the county prosecutor should be appointed, and should be limited to prosecuting crimes that are not politically touchy.

I propose to establish an Office of the Special Prosecutor for each jurisdiction. This person will be elected. The special prosecutor's sole purpose shall be to prosecute cases in which the prosecutor is perceived to have a conflict of interests. The special prosecutor may consider taking cases referred to him by the county prosecutor, but will have ultimate authority to take any case, at his own discretion. He also needs the authority to decline any case that is referred by the county prosecutor. This will prevent the county prosecutor from attempting to sabotage his office by creating an excessive caseload.

One might wonder why I am calling for change, given that I approve of the grand jury's decision. If a man has been convicted of murder, I might maintain that he did not receive a fair trial, despite my belief that he is guilty. We need to be concerned about procedures, due to the effects they might have on other cases.

Public Assistance

In an economy where everyone shares equally in all that is produced, we would all starve. Individual responsibility is the source of all wealth.

There is such a thing as luck. But luck tends to be transient, and relatively unimportant in the overall scheme of things. Even if that wasn't true, it might be best to ignore luck, precisely because it is something we cannot control. In order to have an impact, we need to focus on what we can control, even if factors beyond our control are more significant.

Wealth can sometimes be seen as prima facie evidence of bad behavior, committed by either the wealthy individual, or by his ancestors. By allowing the wealthy to keep their ill gotten gains, we might be enabling the bad behavior that gave rise to it.

I believe that is a reasonable concern, more so in some countries than in others. Unfortunately, we don't always agree on what constitutes bad behavior. Even when we do agree, identifying the point where all accounts have been squared can be problematic. Though we might try to address past injustices to some extent, at some point, we need to accept the status quo, and grandfather in some past injustices, in order to move forward.

In a competitive environment, there are bound to be losers as well as winners. We might point to poor people, and show that their poverty is really their own fault, with some justification. But even if they were to develop the requisite virtues, rather than eliminate poverty, those formerly poor would merely displace someone else. There are arguments that might be raised against this line of reasoning. But there is at least a certain amount of truth to it. For my purposes here, I will simply accept it.

A man who has nothing might become more responsible, in order to get something to eat. But it is more likely that he will engage in some kind of criminal activity. If we put him in prison, we have to feed him while he is incarcerated. Why not feed him now?

What if we feed him, but now he thinks we ought to give him a car? What if he wants to have sex with your daughter, whether she likes it or not? At some point, putting him in prison might be cheaper than continuing to appease him. And even if we are talking about something that isn't going to break the bank, excessive generosity sometimes encourages further demands. But if you can prevent a man from breaking into your home by buying him a cheeseburger, you would be foolish not to give him that cheeseburger.

It is entirely possible that giving him some food that he has not earned will destroy any incentive he might have had to go out and look for a job. If we feed him, he'll just spend the rest of his life relying on those handouts. If a few people decide to spend their lives relying on meager handouts, simply allowing them to do so is probably better than any of the alternatives.

I do not believe making the government the employer of last resort, possibly by requiring people to work in order to receive benefits, is a good idea. That kind of employment is nothing like the employment one is likely to find on the outside, and any lessons learned would probably be counter productive more often than not.

I also do not believe welfare recipients should be required to take drug tests. The argument that I raised in favor of feeding people is more valid, rather than less so, if we are talking about drug addicts. If I allow another man to contract a contagious disease, because I am overly concerned that he might not deserve the medicine, I am foolishly endangering my own health. I believe accepting the fact that some people are going to get some help they didn't deserve is one of the prices we must pay for our own prosperity.

Up to this point, I have been explaining to conservatives, why they ought to support some kind of public assistance. But in no way am I advocating an increase in the minimum wage, which I consider to be little more than an infantile attack on employers.

Some people like to point out that many Walmart employees are receiving public assistance, and suggest that the taxpayers are thereby subsidizing Walmart, due to its failure to provide its employees with an adequate wage. While I would agree that society, as a whole, has a duty to provide a minimum level of sustenance to all its members, employers have no such obligation. I am not opposed to all labor legislation. But I do believe the minimum wage is something that we would be better off without.

While I support the concept of public assistance, I think the programs we have now are poorly designed, and often counter productive. Let's say a single mother works two jobs, and receives food stamps. She decides to squirrel away some money, so she will be prepared when her car quits running. Unfortunately, she will end up losing her benefits, once she has too much money saved up. She actually has to mismanage her affairs, in order to continue to receive benefits. Also, while she is free to use her benefits to purchase soft drinks, she may not use them to purchase tooth paste or toilette paper.

I think we should abolish the food stamp program, and instead give every U.S. citizen, who resides in the United States, a monthly check. We aren't worried about Social Security recipients taking their money out and buying booze with it. If that is what someone chooses to do with their money, that is their own business. Taking away that option discourages individual responsibility, instead of encouraging it.

Wouldn't the cost be prohibitive? Actually, it needn't cost any more than what we are doing now. If your taxes increase by $200 a month, and you receive a $200 check in the mail, it's a wash. That is money you were going to spend on food anyway. Some would pay more than they receive, while others would receive more than they pay. But I believe, compared to the system we have now, this program would benefit rich and poor alike. While tax revenues and public expenditures would increase, the overall cost to taxpayers would not.

Election Irregularities - Strange Phone Calls

I served as a Republican election judge, in the 43^rd ward, 13^th precinct of Chicago, for the general election that was held on Tuesday, November 4, 2014.

On Thursday, October 30, 2014, at 1:22pm, I received a recorded message from (224) 649-5636. I don't recall the exact contents, but it was political rambling that I found tiresome. I hung up after 33 seconds.

On Friday, October 31, 2014, at 8:49pm, I got another recorded message, this one from (224) 649-5601, which went to voice mail. The man, who identified himself as an election coordinator, advised me to vote early, because election judges are required to vote, and I might not have an opportunity to do so on election day. I found it odd that I had not been informed of such a requirement prior to this. But it didn't really concern me, as I had already voted.

He also stated that, as a Republican election judge, I was expected to vote for, and otherwise support, Republican candidates. My understanding was that this was considered a moral duty, rather than a legal requirement. I thought to myself, “This is bullshit. I'll support who I want to support.” I was perfectly upfront about my independent leanings when I was interviewed for the position.

He then said that additional training would be offered Saturday afternoon at a couple of south side locations. I had already attended training downtown that was provided by the Board of Election Commissioners, as well as a banquet event by the Republican Party, where we were encouraged to watch for improprieties. It didn't sound to me like this latest training was an actual requirement, but I was receptive to it nonetheless. Unfortunately, I already had other plans, and decided that I would have to pass on it.

On Saturday, November 1, 2014, at 10:11am, I received another recorded message from (224) 649-5601, also on voice mail, reminding me of the training that afternoon.

Because the potential criminal nature of these calls had not yet occurred to me, I deleted both recordings from my voice mail. However, I still had the information on my caller ID. I called the numbers, and got a recorded message from what appears to be a telemarketing company.

On election day, I learned that one of the other election judges, another Republican, had also received these calls, and still had them on her voice mail. Whether any Democrats got similar calls, I do not know.

Who made the calls? I do not know. It could have been Democrats who wanted to keep Republican judges from showing up. Or it could have been Republicans who wanted to keep the polls closed, thereby reducing voter turnout in heavily democratic regions. I consider both explanations plausible, but the second one somewhat more so.

I would guess that the people with the telemarketing company don't even know who they were dealing with. But as far as I'm concerned, they have an obligation to know, and they should be held accountable.