A different perspective on the Toyota recalls

I hadn't heard of this before, had you?

• The allegedly defective accelerator part is made in Canada by Indiana-based CTS Corp. Many makes and models use this same part. For example,
   
  • The Pontiac Vibe uses it.
     
  • Ford sells a van in China with the component.

Why aren't we hearing about those cars? Is it possible that the U.S. government is using some of its clout to try to "help" some of the bankrupt auto companies whose stock it now owns?

"Consider the numbers," writes Dr. David Eifrig.

34 people died in accidents blamed on the pedals . . . since 2000.

Toyota has recalled more than 8.5 million vehicles in the U.S.

Assume the owners drive those vehicles 10,000 miles a year [I'm told the average car in the United States is driven somewhere between 12,000 and 15,000 miles a year; but 10,000 makes for easy math]. . . . That means Toyotas are logging more than 85 billion miles a year in the U.S. - 850 billion miles during the last 10 years.

So divide 34 deaths into 850 billion miles, and the odds of a Toyota owner having one of these accidents is one in 2.5 million [miles]. . . That's a random event. . . .

You're more likely to get killed by lightning: 60 people died from lightning in the U.S. just last year.

A different take on the economy (???)

An acquaintance of mine, Doug Tengdin, a CFA (Chartered Financial Analyst), writes an engaging five-days-per-week financial commentary on his employer's website.

His perspective about the state of America's finances has seemed so far out-of-step with what I've been thinking that last week I "couldn't take it anymore." So I wrote him:

Doug:

Your Global Market Update for last Friday (i.e., 2/12) suggested Greece’s economic difficulties should be “a cautionary tale for all countries with budget problems.”

I'm curious, then, why you seem rather sanguine about the United States’ situation. . . . I can't put my finger on specific posts, but that has been my general feeling.

I “just” wish I could get a stronger sense of WHY I should look with favor on the U.S.’ position . . . or acquire some kind of confirmation that I'm not quite crazy to be writing posts like these on my blog:

• The long-term demise of the U.S. dollar
   
• The financial future of the United States
   
• Need a Churchill for our age?

Yesterday morning’s post:

• The Greenspan-Guidotti Rule (or Guidotti-Greenspan)

. . . I'm hoping perhaps some of this might inspire a post or two. . . .

Thanks!

He wrote back pretty much what he posted on Tuesday in Why Not Here? Major reason people in the U.S. ought not to worry: "The US isn’t Greece."

• "We don’t have a culture of permanent employment and tax evasion as a national sport."
   
• "We have a culture that includes a modest safety net along with entrepreneurial innovation."
   
• "We have an incrementalist political culture that is . . . hostile to revolutionary change. . . . That’s a good thing for investment and wealth accumulation."
   
• "The US debt level isn’t as high as many people fear. Much of our 'debt' is held internally by Social Security."
   
• "For the past 30 years, real economic growth has averaged 3%. Deficits have averaged 2.5%. So the debt, as a percentage of the economy, has been getting smaller."
   
• "Greece [ran 10% deficits] for years. And played with the accounting rules to mask this. We didn’t do that." (On the other hand, "if we run 10% deficits in the long run, that’s another story.")
   
• "[T]he government is a much smaller part of the economy here than most people realize. Government spending makes up about 28% of GDP. By contrast, the Greek public sector is 40% of their economy. So it’s harder to cut spending there without pushing Greece into another recession."

There was one last comment he made in his personal response that particularly struck my eye.

It appears he read my Banking, lending . . . and government bond auctions post in which I reference Bob Prechter of Elliott Wave fame.

Doug wrote:

I’m skeptical of the Elliot Wave. . . . History is not destiny—it’s a guide as to human character and behavior. Prechter misses the fundamentals for the charts.

Here’s a fundamentalist I respect:

http://www.ft.com/cms/s/0/7467f85e-1b30-11df-953f-00144feab49a.html


In this post Martin Wolf quotes Brad DeLong. I’m not so keen on DeLong, but he makes a good point: short-term deficits are a bet that borrowing is worth it in the long run. If the present value of the future cash streams of the borrowing are less than the present value of the income stream that you create by avoiding the wealth destruction of a financial panic (or revolution or war), then the borrowing was an economic plus.

Many of the gloom-crew ignore Stein’s Law: If something cannot continue it will stop. And Coolidge’s dictum: if ten problems are coming toward you down the road, chances are that nine of them will go off into the ditch before they reach you.

There's a lot in these three paragraphs. But even more in the referenced article. And at far too many points, in what Doug wrote and in what I read in the referenced article, I found (and find) myself highly skeptical or critical of what the authors are saying.

Let me begin with Doug's comments:

• "We don’t have a culture of permanent employment and tax evasion as a national sport." --Okay. That's good. I'll buy that. For now. (Though it appears our country is heading downhill on this score.)
   
• "We have a culture that includes a modest safety net along with entrepreneurial innovation." --Again a good point. Indeed, a very good point. May it continue!
   
• "We have an incrementalist political culture that is . . . hostile to revolutionary change. . . . That’s a good thing for investment and wealth accumulation." --Amen.

But now I begin balking:

• "The US debt level isn’t as high as many people fear. Much of our 'debt' is held internally by Social Security." --???? I'm afraid our debt is far higher than our government acknowledges. What about all the unfunded future obligations? And what about the debt Doug tries to minimize by means of the quotation marks? He says it is "held internally by Social Security." --And we are supposed to take comfort in that? The fact that the government uses debt to pay debt? That it has already spent all the funds Americans have "invested" in their Social Security accounts? The fact that all of the federal government's future obligations for Social Security and Medicaid and Medicare are going to have to be funded through future taxes . . . because it has saved absolutely no money in any of the "fund" accounts that have supposedly been "set aside" for those purposes?
   
• "For the past 30 years, real economic growth has averaged 3%. Deficits have averaged 2.5%. So the debt, as a percentage of the economy, has been getting smaller." --There is some truth and, I'm afraid, quite a bit of falsehood in that statement. Yes, the debt as a percentage of the economy declined quite steadily from 1948 till 1974; but then it began increasing--in fact, it more than doubled--from 1974 through the early 1990s. At that point, it officially began to hold steady and even decline till about 2001. But then it has taken off again.
  
  Part of the problem, however: We are talking about acknowledged public debt. We are not talking about the government's massive unacknowledged "off-book" and unfunded obligations. As Michael Hodges explains in answer to the question, "Since debt increased each year, how could [federal government] officials claim they had a budget surplus in the late 1990s and 2000?"
  

  Answer: the general federal government did not have a surplus. In fact, they ran a huge deficit each and every year. . . . The Deficit-Trust Report shows the general government spent more than its general revenues, but they covered up the over-spending deficit by siphoning-off all surpluses from all trust funds, including spending every penny remaining in the social security trust fund on non-pension items - - while creating even more debt IOUs to 'paper-over' their actions. . . . See the 1999-2000 data report.

• "Greece [ran 10% deficits] for years. And played with the accounting rules to mask this. We didn’t do that." --Really? You wouldn't call the use of all the Social Security funds for current government expenses, and the massive increases in unfunded mandates and unfunded future obligations and massive "off-book" accounts (for example, the trillions of dollars of Fannie Mae and Freddie Mac obligations now being guaranteed by our government--off the books--a kind of "playing with the accounting rules"?
   
• "[T]he government is a much smaller part of the economy here than most people realize. Government spending makes up about 28% of GDP. By contrast, the Greek public sector is 40% of their economy. So it’s harder to cut spending there without pushing Greece into another recession." --How wonderful! But should we rejoice simply because they are worse off than we?

But where I really got bogged down was here, in the material Doug had me consider from the "fundamentalist" he said he respects:

First, Doug's comment about Brad DeLong's "good point" . . . that "short-term deficits are a bet that borrowing is worth it in the long run."

And I wonder: Are they really? Always? Or do some people--and some governments--borrow not with any real intention of paying the debt back, but with the (vain) hope that somehow, somewhere, someone will get it paid back . . . "just so long as it's not us (or me) right now." --The whole "Let's palm our problems off on someone else" methodology; the kind of behavior that Porter Stansberry noted that GM managers were engaging in for years before the company was finally forced to declare bankruptcy: "GM had no conceivable way to repay its debts. It was even borrowing money to pay for the interest expense on its existing debts." Moreover, "GM used byzantine accounting to hide the truth of its deteriorating fiscal condition." --And isn't that what the United States government is doing at this point?

"Many of the gloom-crew ignore Stein’s Law," Doug says: "If something cannot continue it will stop."

Oh, yes! That is correct. It will stop. The question is, will it stop of its own accord, with a positive outcome? Or will it stop in pain by the force of outside agencies?

"And [the gloom-crew ignore] Coolidge’s dictum: if ten problems are coming toward you down the road, chances are that nine of them will go off into the ditch before they reach you."

Very nice.

But/and/then, what are we to make of Martin Wolf's concluding remarks?

[A]s the BIS [Bank of International Settlements] paper . . . noted, long-run fiscal prospects, largely driven by ageing, are dire. Projecting forward from the dreadful starting points [i.e., where these nations' balance sheets are today], the BIS authors argue that ratios of public debt to GDP could reach 250 per cent of GDP in Italy by 2050, 300 per cent in Germany, 400 per cent in France, 450 per cent in the US, 500 per cent in the UK and 600 per cent in Japan. If the sovereign debts of high-income countries are not to be reduced to junk, these countries do indeed need credible plans for retrenchment. On this there is no disagreement.

????!!!!

Did you catch what Wolf is saying? That the United States, Great Britain and/or Japan might wind up with public debt equivalent to 4.5, 5, or even 6 times their Gross Domestic Products?

Can you imagine anyone being foolish enough to lend a government money so it can go that far into debt?

Suppose we take the "conservative" 450% of GDP number that the authors of this study--and the "conservative" fundamentalist Martin Wolf!--suggest for the United States.

At an interest rate of only 5%--which is extremely low, considering the risks involved!--the interest payments alone on such a debt would amount to 21.25% of Gross Domestic Product. That is interest only. No current expenses. No services. No employees.

I don't believe that day will ever get here. Impossible. Doug is correct: Stein’s Law will come into play long before that occurs: "If something cannot continue it will stop."

But what really gets me is how Wolf "argues" his "case."

Look at his conclusion:

The best approach [to the future crisis] would be sharp reductions in long-term growth of entitlement spending. Furthermore, as economies recover, short-term fiscal action will be needed. Actions will have to include spending cuts and increases in tax, to restore revenue lost forever in the crisis. . . .

So, yes, high-income countries face huge fiscal challenges. And yes, the crisis-hit countries start from grossly unsustainable fiscal positions. But the US is not Greece. Moreover, a massive fiscal tightening today would be a grave error. There is a huge risk – in my view, a certainty – that this would tip much of the world back into recession. The private sector must heal. That, not fiscal retrenchment, is the priority.

In other words: Yes, we're in trouble, and yes, we need to take care of the dire future we can see coming at us. And, yes, we need to sharply reduce our entitlement spending. But . . . not now. Not now. This is a bad time.

Put another way: "I don't really have any good solutions. But tightening our belts right now is a very bad idea."

And I reply: Based on the federal government's behavior throughout the last 40 years, when is a good time to tighten our belts?

My hypothesis?

Never. Never "now." Tightening our belts is always a good idea "sometime in the future."

From the politicians' perspective, it is never a good time to pay back debts we have accrued. It is always a fine time to borrow on the future.

. . . Which brings us back to the issues I've been raising in so many of my posts over the last few weeks: My friend Doug's attempts to dissuade me notwithstanding, I don't see a bright future for our country . . . primarily because there is no one who has the guts to address the fundamental fiscal problems that confront us.

"Super Cooper in a 22 Looper"

My son-in-law and I began watching When We Left Earth - The NASA Missions, a DVD set from Discovery Channel, last night.

We watched the better part of the first two episodes which cover the run-up to and experience of the Mercury (single-man) and Gemini (two-man) space flights. There is lots of footage similar to what I recall seeing on TV, but a whole lot more, including fascinating interviews with the men who were involved in the events of those days--from flight controllers to astronauts--as well as footage from inside the space capsules--things we never saw on TV at the time.

And Discover knows how to tell the story with emotion. When ground control loses radio contact with the space capsule--even though the event occurred 45 years ago or more--and even though I thought I knew the final outcome of the story, my heart was in my throat.

So there I was watching these historical archives and being astonished at what I was seeing: Major space flights going up every three months; astronauts' names I remember; even a couple of flights--like the one I referenced in the title of this post: As we watched the program, as soon as Gordon Cooper's name was mentioned in association with the Mercury 7 flight, I blurted out the headline I remembered from our local newspaper. Yep: "Super Cooper in a 22-Looper."

What shocked me: the mission's date--May 15 to 16, 1963. I was 7 years old!

I had thought the flight had come three or four years later, after I had become a paperboy.

That memory, then, inspired me to think of what other headlines or news events I remember from my early childhood.

Only two stand out in my mind.

1) The day Kennedy was shot (I had to look it up): November 22, 1963. I was in 3rd grade. In our school, all the kids in the class were brought to the bathroom at the same time to "do their business."

I remember filing back down the hall toward the classroom when one of the teachers came down the hall, crying: "The president has been shot!"

We were in Upstate New York at the time, so it would have had to have been about 2 o'clock in the afternoon. (I looked it up: Kennedy was shot at 12:30 p.m. Central Time; he was declared dead at 1:00 p.m.)

I remember just a bit about the funeral, though I wonder how much of that memory was actually shaped by newsreels since.

2) I remember watching Winston Churchill's funeral cortège. A very solemn, black affair. Again, I looked it up: it occurred in late January 1965.

3) One other very specific newscast I remember: the day they played taps on the hippie movement in San Francisco.

Our family was living in the San Francisco Bay Area at the time. And hippies would be a major social force for many years to come. But I remember the San Francisco news station declaring the death of the hippie culture. Very unnerving, because I was just getting used to the idea, and I was attracted to the general freewheeling, fun-loving, live-and-let-live approach to life that the hippies seemed to advocate.

I looked this one up, too. And there is the date: October 6, 1967--the tail end of the "Summer of Love," not even five months after Scott McKenzie's song "San Francisco (Be Sure to Wear Flowers in Your Hair)" was first released and, honestly, years before the movement would truly die.

--Strange. Why is it all the sad stories that most caught my attention?

One last story and then I'll quit. Actually two.

Story #4: I rode my bike through the middle of an anti-war protest in Palo Alto--the Stanford Industrial Park. It was a regular school day morning. (Maybe 7:30?) I was riding from our apartment in Escondido Village on the Stanford Campus, to Terman Junior High over on Arastradero Rd. I would ride down Hanover Street, through the Hewlett Packard parking lot, across the railroad tracks and through the neighborhood till I could cross Arastradero into the school parking lot.

Some demonstrators had turned over a school bus in the middle of the intersection at Hanover Street and Page Mill Road. As I rode down Hanover toward the intersection from the campus, I could see darkly-clad figures darting in and out among the buildings on either side of the road. Some were police in full riot gear, others were civilians (anti-war protesters). . . . --A very surreal experience.

And then, lastly: #5: Kent State. May 4, 1970. By this point my family was back in upstate New York. I was in ninth grade. The news of the students having been killed shocked, sickened, and disgusted me. I had seen too many protests "close up" while on the Stanford campus. I had seen the anger and hatred and seething violence just below the surface. After all, this was post Martin Luther King's assassination. This was post Bobby Kennedy's assassination. This was post the 1968 Democratic National Convention at which there was so much violence.

I wrote a poem to express my grief:

Where’s our reason?
People shout and incite
Riots while men with rifles
Stand by.

After order is asked
And warnings are given,
The riotous crowd
Throws hate.

Insults freely flow
From snarling lips. . . .
The rifles fire.
More hate comes back. . . .
Smoke of battle
Jerks around.
(Violence protests war.
Hate burns worse than Napalm.)

Around the States
Radios hurtle their message:
“Four Students Killed—
More Injured.”

Maudlin

The thought of it made me burst out laughing.

The Word Power column in the March Reader's Digest is based on words made from people's names. The introduction included life jackets named Mae Wests and the word jeremiad--meaning a complaint (from the biblical prophet Jeremiah, who wrote the book of Lamentations).

So one of the words featured in the column is maudlin, meaning [effusively or tearfully] sentimental, a word, we are told, that comes from Mary Magdalene--who is traditionally depicted weeping in penitence. What made me burst into laughter was the sentence chosen to illustrate the way one might use the word:

Instead of a maudlin wedding song, the couple chose Led Zeppelin's "Whole Lotta Love."

Led Zeppelin - Whole Lotta Love.mp3

Found at: http://www.filestube.com

The thought of playing such a song with the overblown bass line put me over the edge.

And then one last tidbit for my friends from BH-BL High School: This reminds me of the day--sometime during my first year in Burnt Hills; I expect it had to have been in the spring of 1970--when someone told me we could listen to music in the Junior High library. And the specific album they mentioned was Led Zeppelin II on which this song was the first cut. I couldn't believe we could listen to rock music in the school library . . . provided by the school! But that's exactly where I must have first heard this song.

Banking, lending . . . and government bond auctions

I've been talking about--and sharing my concerns surrounding--massive inflation.

Bob Prechter, co-author of Elliott Wave Principle: Key To Market Behavior and founder/publisher of The Elliott Wave Theorist, suggests that it is not inflation we need to worry about. It is deflation.

Whether he is correct or not, I think his analysis of the fractional reserve banking system as it is practiced in the United States, is quite astute.

Are you familiar with how fractional reserve banking works?

If not, I encourage you to begin your education!

Join Club EWI (no charge) and read the September 2008 Elliott Wave Theorist.

Basic idea:

Compare what happens to money you lend to your neighbor and what happens to money you lend to your bank.

Suppose you have $20,000 in hand. Your neighbor comes to you and asks if he might borrow $10,000 for a year. He says he will pay you 6% interest for the loan.

Once you pass him the money, how much money do you possess?

$20,000? $10,000? Something else?

In reality, you have $10,000 and (hopefully you have this in writing!) an IOU for $10,000 plus 6% interest.

Now suppose at the end of the year your neighbor came to you and said, "I'm sorry. I lost your money. I invested it foolishly. It went to nothing."

How much money do you have?

Well, you definitely don't have the $10,000 you loaned to your neighbor. It's gone.

Change the scenario.

You start with $20,000; you keep $10,000 on hand (under a mattress? out in the backyard?) and you put $10,000 into your local bank.

How much money do you have?

Prechter suggests you have "only" $10,000 . . . plus an IOU from the bank for $10,000 . . . plus whatever interest they will offer you.

Why is that? Because the fact is, the bank doesn't hang on to your money. If your neighbor goes to the bank and asks for a loan of $10,000, and the bank lends it to him, that money is just as "gone" as if you had loaned him the money directly. The only difference is that the bank has agreed to serve as your lending middleman.

Interestingly, U.S. banks are supposed to maintain some kind of minimum reserve amount of cash on hand. Traditionally, I am given to understand, that reserve would have been 3%. I.e., for every dollar you deposit, they were supposed to keep 3 cents on hand. They could lend out 97 cents.

Functionally, however, according to what I'm reading, they are operating without reserves. Indeed, Prechter wrote in September 2008, "At latest count, U.S. banks report $6.942T in deposits and $6.945T in loans. In other words, the average bank in the U.S. has lent out 100 percent of its deposits. The money is not there. It is lent out."

And now, perhaps, you can begin to understand the problem.

If your bank has lent all your money to others, then it has no money. And you have none of that money, either. And if the bank's debtors fail to pay the bank back, the bank has no money with which to pay its IOU to you!

And so, if you will, the modern fractional reserve banking system--or should we call it "no reserve" banking system--is really a kind of musical chairs game in which we all keep dancing while the music plays . . . and we all have to hope the music doesn't stop playing so none of us gets "caught out."

The problem is, the music stops every now and then. And some of us find there is no chair in which we can plop ourselves down. Our banks don't have enough assets to repay us what we have loaned them . . . which is kind of what has happened here in the States over the last couple of years: so many borrowers (mortagors) have been unable to pay their contracted obligations that banks have been pushed into bankruptcy.

But here's where it gets "interesting" to me . . . and I don't know if I'm competent to evaluate this statement.

Prechter says that, because there has been so much default recently, "the purchasing power that everyone thought he had [has] evaporate[d] into the nothingness it truly was" . . . which means we are faced not with (what I've been afraid of) inflation, but, rather, deflation, fewer dollars chasing the same number of goods--i.e., currency worth more than it used to be!

*******
I said I'm not sure I'm competent to evaluate what I just said. But I'm going to try.

I think where Prechter's analysis goes wrong, and why we aren't likely to experience deflation, is because the Federal Reserve keeps creating dollars, and the federal government keeps replacing the dollars that the FDIC keeps replacing in the banks where dollars have been lost. More than that, of course, the federal government keeps authorizing the Federal Reserve to create dollars out of thin air.

It will be . . . uhhhh . . . interesting to see where this leads when we consider that lenders who are willing to purchase federal government debt may be disappearing.

As Martin Weiss of Weiss Research brought to my attention: in the government's most recent sale of 30-year bonds, "the group of bidders that includes foreign governments and investors bought 35% LESS of these long-term Treasuries than they normally do." He went on to suggest that "prices plunged" and "yields surged."

I'd say that's a bit of an overstatement. (Ahem!) Bloomberg reported that "30-year securities drew a yield of 4.720 percent, compared with an average forecast of 4.687 percent in a Bloomberg News survey of 10 of the Federal Reserve’s 18 primary dealers." Moreover, "The price of the 4.375 percent security due in November 2039 dropped 18/32, or $5.63 per $1,000 face amount, to 95 6/32." Both changes are significant, but I would hardly describe with such words as "plunge" and "surge."

On the other hand, the shift in who did the bidding is rather startling. Again quoting Bloomberg,

Indirect bidders, an investor class that includes foreign central banks, bought 28.5 percent of the bonds today. They purchased 40.7 percent of the bonds at the last offering. The average for the past 10 sales is 43.2 percent.

Divide the most recent percentage of indirect bidders--28.5%--by the average over the last 10 sales--43.2%--and you find only 65.97% of the average. Or turn those numbers on their head; they're more shocking. The previous 10 auctions have had, on average, over one and a half times as many indirect bidders involved as this most recent auction did.

Want to guess where prices and, therefore, interest rates are going if future auctions attract even fewer bidders?

Remember, prices are always set by the relative abundance or scarcity of bidders/buyers/money vs. sellers/products for sale. (And in this case, we're talking about lenders-with-money vs. bonds-needing-to-be-sold.)

If there are fewer lenders, prices of the bonds have to go down/interest rates on the bonds have to go up (to attract more lenders). And if you combine the lack of potential bidders with a concomitant increase in bonds-needing-to-be-sold (which, we are assured, absolutely will be happening, because the federal government is running at record deficits even while it is finding itself required to roll old debt into new), then we can expect significantly lower prices for the bonds and, therefore, significantly higher interest rates. [In case what I've just said sounds like gobbledy-gook to you, please see this article on the relationship between bond prices and interest rates. Try to ignore the anti-capitalist rhetoric. For a more technical explanation with lots of interesting math, check this out.]

I "just" wonder how quickly all the foreign buyers are going to disappear and how soon, therefore, those interest rates are going to spike.

Ghost of a logo past . . .

I got surfing over to my son's Sonlight blog when I was shocked to see he had caught a photo of a ghost. I had missed the ghost myself. I was in the wrong place last Thursday when it revealed itself. (I was at home, nursing some kind of gastrointestinal problem.) But there it was: proof positive. A ghost. At Sonlight.

"We've been in the process of doing a major Sonlight brand overhaul for a couple years now," Luke wrote.

This has been further influenced by our 20th Anniversary. 20 years of serving the homeschool community. 20 years of improving our product. 20 years of leading in excellent literature-rich homeschooling.

But today, a physical change occurred here at Sonlight: Our old logo was removed from the building.

This will be replaced with our new logo. . . .

There's something almost melancholy--pensive--about this moment. Change, for all its excitement, leaves something behind... like the ghostly shadow of the logo that is being scraped off the building's facade even as I type.

I never thought about it until he mentioned the fact: Besides some old Sonlight logo-wear that many of us still own, our building's facade probably was the last place our old logo has remained in use. All our boxes, emails, catalogs . . . everything has switched to a version of the new logo. So Luke's photo may, indeed, be the last fading sight of the old logo as it goes into that long goodnight. . . .

Someone asked: So what does the new logo look like?

Luke noted that we've actually been using it for the last year. But as we are celebrating our 20th anniversary this year (2010), even the new logo has been specially adorned for the event.

The only place you can currently find the new logo without adornment (though only in monochrome) is on the masthead of this past year's catalog . . . a catalog that is still good for another month-and-a-week:

 Hmmm.

Thank you, Luke, for getting that shot of a fading image! . . . And maybe this coming week we'll have a photo of the new logo in place on the building.

It takes only one child to raze a village.

Just thought you could stand a laugh!

All those stimulus dollars: where are they going?

I was astonished, dismayed, and pleased to find an article that talked about where all the federal economic "stimulus" dollars are going.

Any surprise?

Proportionately, Washington, DC, is swimming in dough. It's having one of its best years ever.

First, in case you didn't know, the government is being at least somewhat transparent about its shenanigans. Check out www.recovery.gov. As someone said, "If this is the stuff they're willing to talk about, I'd hate to know what they're hiding!"

But the data is pretty raw.

So then I found out about the nonprofit investigative news outlet ProPublica. It has organized and reported the "stimulus"/"recovery" data per capita by state and county as of December 2009.

Very interesting.

In most states, the numbers aren't particularly remarkable. Thirty-five states are in the upper hundreds of dollars per person, most between $700 and $900 a person. Though Florida is at the bottom, with just under $650 per person. (Interesting, however, Florida is tied with Kentucky for 8th worst unemployment in the country (as of October last year)!)

There are 15 states with more than $1,000 per person in stimulus spending. One of those received well over $2,000 per person.

Guess which one?

Alaska! ($2,147.27 per capita.)

And then . . . there is Washington, DC.

$5,276.84 per capita in stimulus spending.

Poor Washington, DC!

As the guy who brought this to my attention commented, "The bureaucrats aren't helping the average American; they're feeding themselves from the taxpayer trough."

While we're on the subject, perhaps I should mention payscales. USA Today reports that "[f]ederal employees making salaries of $100,000 or more jumped from 14% to 19% . . . during the recession's first 18 months — and that's before overtime pay and bonuses are counted. . . ."

Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

And the federal government dares to wag its fingers at the banks?

Look at this: The average employee of the federal government makes $71,206. And in the private sector? $40,331.

Do we really need government employees to be paid so much so they can serve us so . . . ahem! . . . poorly?

As the same guy who brought these things to my attention commented, concerning a trip he took out of Bozeman, MT (the third largest city in Montana; the metropolitan area population is less than 100,000; the entire state has a population of slightly less than a million!):

I watched 14 Transportation Security Agency (TSA) workers stand around at the security gates to process a plane of only 40 or so passengers. . . .

For my flight, three ladies stood at the gate entrance. One checked my driver's license, while talking loudly to the other two next to her about the weekend. I'm certain I could have handed her someone else's library card and gotten through.

Next up was the guy at the front of the conveyor belt. He was pushing the plastic bins down the belt and into the chemical/electronic detector, repeatedly saying: "Are your liquids and gels out?"

What a farce! I've walked on board with mouthwash and juice bottles accidentally stuffed in jacket pockets or carry-on bag pouches.

We're paying these people to sit around and do nothing. It's embarrassing that anyone thinks this group can protect us from anything.

********

--For another take on the stimulus programs, see Do Direct Stimulus Jobs Really Cost $533,000 Apiece?!

Economic Crises, Then and Now . . .

The Intercollegiate Studies Institute (ISI) sent me an email with a sidelink to a brief (36:48) lecture by Dr. Brian Domitrovic, assistant professor of history at Sam Houston State University in Huntsville, Texas, and author of Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity. (I didn't know anything about him from the sidelink. I was just intrigued by the title of the lecture: Economic Crises, Then and Now.)

Domitrovic begins with an observation I had thought of several times in the past, but had quit thinking about in the last many months: The media keep telling us that we are in "the worst recession since the Great Depression." But is this so? Are we really in "the worst recession since the Great Depression"?

Domitrovic's answer: No! No way! Not even close!

But, then, why do the media pundits keep talking about it in such terms?

I only listened to Dr. Domitrovic's lecture once--at high speed, so perhaps he answers this question. But I don't remember him attempting to explain why they say it. He was far more interested in demonstrating that it is not the worst. And, more, how we can avoid making it worse than it is.

But while we're on the subject, I'd like to state that it, from my perspective, there is one reason why the federal government is happy to feed this line to the media: Being able to fight "the worst recession since the Great Depression" gives the government implicit "permission" to do whatever they want, to build the government ever bigger and spend more money than ever: "We're in a crisis, you know!"

But Domitrovic gives a brief history of the financial ups and downs of American history--both before the Great Depression and after. And he provides a worthwhile historical perspective on things.

There is a way out of the wilderness, he says. And--surprise, surprise!--history teaches us that the way out is not through more government intervention. Indeed, additional government intervention is what will lead to greater disaster.

Don't believe him? Check out his stats. Take the time to listen to his presentation on MP3. And/or do as I have just done: order a copy of his book.

The Greenspan-Guidotti Rule (or Guidotti–Greenspan)

I'd never heard of this till a few days ago. But those of us who find ourselves under the tender mercies of the U.S. government should probably pay attention.

Former chairman of the Federal Reserve Board, Alan Greenspan, and former deputy minister of finance for Argentina, Pablo Guidotti, published an academic paper in 1999 that suggested, to avoid a default, a country needs to maintain hard currency reserves equal to at least 100% of their short-term (maturing in the next 12 months) foreign debt.

PIMCO, one of the world's largest fixed income managers, explains it this way: "The minimum benchmark of reserves equal to at least 100% of short-term external debt is known as the Greenspan-Guidotti rule. Greenspan-Guidotti is perhaps the single concept of reserve adequacy that has the most adherents and empirical support."

Now. People "in the know" point out that this "rule" was created for emerging market economies: you know, the "poorer brethren."

As someone on the Motley Fool board commented, "This problem just applies to countries issuing foreign debt in a currency not their own. That makes them vulnerable to an attack on their currency (leading to a devaluation and the impossibility of servicing debt in Euros or USD). The US faces no such issues with their foreign debt."

And I ask, "Oh, really? . . . What is good for the goose is, somehow, not good for the gander? The U.S. thinks it can get away with borrowing funds from poorer neighbors 'forever' and let them take the hit for the massive inflation of currency being carried out by the U.S. federal government in cahoots with the Federal Reserve and the U.S. Treasury?"

As the guy who first brought this subject up on the Motley Fool forum commented,

From my days in the credit-related business, the first sign of debt distress is not the actual delinquency itself. The first signs are spending in excess of income. The second sign is an inability to change either the spending habits or the income level. After those, the distress is just a matter of time and circumstance. Many folks put off the inevitable for years as they find external sources of money (marriage, inheritance, etc.). But they assuredly will run through whatever windfalls because of problem number one.

The US has developed a habit of spending beyond its income. It also exhibits no desire to change either the spending habits or its income level.

So, what does that suggest?

Financial advisor Porter Stansberry comments,

The principle behind the rule is simple. If you can't pay off all of your foreign debts in the next 12 months, you're a terrible credit risk. Speculators are going to target your bonds and your currency, making it impossible to refinance your debts. A default is assured.

. . . [H]ow does America rank on the Greenspan-Guidotti scale? It's a guaranteed default.

And how does he come up with that?

According to the U.S. Treasury, $2 trillion worth of debt will mature in the next 12 months. So . . . the Treasury will have to finance at least $2 trillion worth of maturing debt in the next 12 months.

That might not cause a crisis if we were still funding our national debt internally. But since 1985, we've been a net debtor to the world. Today, foreigners own 44% of all our debts, which means we owe foreign creditors at least $880 billion in the next 12 months - an amount far larger than our reserves.

Keep in mind, this only covers our existing debts. The Office of Management and Budget is predicting a $1.5 trillion budget deficit over the next year. That puts our total funding requirements on the order of $3.5 trillion over the next 12 months.

So where will the money come from? Total domestic savings in the U.S. are only around $600 billion annually. Even if we all put every penny of our savings into U.S. Treasury debt, we're still going to come up nearly $3 trillion short. That's an annual funding requirement equal to roughly 40% of GDP.

Where is the money going to come from? From our foreign creditors? Not according to Greenspan-Guidotti. And not according to the Indian or the Russian central banks, which have stopped buying Treasury bills and begun to buy enormous amounts of gold. The Indians bought 200 metric tonnes [last November]. Sources in Russia say the central bank there will double its gold reserves.

So where will the money come from? The printing press. The Federal Reserve has already monetized nearly $2 trillion worth of Treasury debt and mortgage debt. This weakens the value of the dollar and devalues our existing Treasury bonds. Sooner or later, our creditors will face a stark choice: Hold our bonds and continue to see the value diminish slowly, or try to escape to gold and see the value of their U.S. bonds plummet.

One thing they're not going to do is buy more of our debt.

Which central banks will abandon the dollar next? Brazil, Korea, and Chile. These are the three largest central banks that own the least amount of gold. None own even 1% of their total reserves in gold.

Stansberry wrote these comments last November. He "updated" his perspective a couple of weeks ago--on February 2nd (and I mentioned his update article in passing in my post on February 8th):

A few years ago, I got in hot water by insisting General Motors was bankrupt. Supporters of the company (whether investors or unionized employees) got mad at me and said I was exaggerating. They rightly pointed out GM was still servicing its debts and was still owned by its equity holders. Thus, technically at least, GM wasn't bankrupt.

In order to avoid any unnecessary litigiousness, I began to write in parody, pretending to be the chairman of General Motors and warning of the company's impending bankruptcy. One of the few ways you can still speak unpleasant truths in America is by using - or pretending to use - humor. . . .

Meanwhile, the bankruptcy of General Motors was far from a laughing matter.

GM had no conceivable way to repay its debts. It was even borrowing money to pay for the interest expense on its existing debts.

Monitoring the company closely between 2006 and 2009 taught me quite a bit about willful self-deception. Here are the three key traits I look for now in companies facing major financial stress . . .

No. 1. There's never any real tally of the total amount owed. . . .

No. 2. None of the company's "turnaround" plans include any efforts to actually repay principal amounts owed.

No. 3. The company's spending is out of control. In GM's case, it was also rife with fraud and absurdity - like, for example, its jobs bank where people were paid not to work.

Sound like the government of any country you know?

It does to me!

. . . I encourage you to read the rest of Stansberry's update article.

Sobering stuff.

The bronze serpent--Ningishita, Nehushtan, Caduceus, Asclepius

I bumped into the famous story of Moses' bronze serpent on a pole (Numbers 21:6-9):

Then [YHWH] sent fiery serpents among the people, and they bit the people, so that many people of Israel died. And the people came to Moses and said, "We have sinned, for we have spoken against [YHWH] and against you. Pray to [YHWH], that he take away the serpents from us." So Moses prayed for the people. And [YHWH] said to Moses, "Make a fiery serpent and set it on a pole, and everyone who is bitten, when he sees it, shall live." So Moses made a bronze serpent and set it on a pole. And if a serpent bit anyone, he would look at the bronze serpent and live.

"That serpent on a pole is the caduceus [kuh-JOO-shus], isn't it?" I said to myself.

I looked it up.

No, it isn't.

The caduceus has two serpents on it.

There is a symbol that includes a single serpent on a pole. It's called the asclepius:

But the asclepius comes from Greek mythology--or, certainly, the name does.

In the Bible, we find that the serpent eventually becomes an idol, called Nehushtan, that the religious authorities finally destroy (2 Kings 18:4).

Interestingly, there is a record of a Sumerian healing god in the form of a single serpent on a staff from about 2000 BC. That god's name was Ningishita. . . .

For more on the various symbols, their history and uses, I found Dr. Keith Blayney's page on the asclepius of particular interest.

Chrysolite-based radio studio

I'm still learning how to pray. Or, maybe, I should say, I'm still learning to pray.

As Sarita and I have committed ourselves to give to various charitable causes, we (or--let me speak for myself--I) have not kept pace in praying for these causes.

So this year I began using the monthly prayer sheets some of our favorite charities send our way.

Sunday, FEBC mentioned a community FM radio station in Iraq sponsored by its sister agency, Feba. "Called Voice of Joy," the article said, "the broadcasts are transmitted from a Chrysolite-based studio. . . ."

"Chrysolite-based" studio? I asked myself. "What's that? . . . There's a gem named chrysolite. Is the transmitter or studio somehow based on chrysolite, the way the old crystal radios were based on or used quartz or other piezoelectric crystals? (???) Or, perhaps, is there a town in Iraq named Chrysolite? (???)"

I looked it up on Google.

I could find nothing.

So I wrote to a friend I know at FEBC: "What does that sentence in the FEBC Prayer Target mean?"

He wrote back with a link to a video that, he said, included "some info about the Chrysolite suitcase studio." (!!!)



The poor engineer who is asked to explain the device appears totally ill-at-ease in front of the camera. But eventually he seems to forget himself as he warms up to his subject.

If you're at all into electronic or technical "stuff," I think you'll find it fascinating. The video lasts 8:33.

My friend concluded his email: "Actually, Feba is in negotiations with some other UK-based ministries to take over the production of these studios, as they are moving away from engineering and more toward program innovation."

. . . Ah! I found another video, a bit more polished for public consumption:

Arctic ice cap

I've been reading an amazing philosophy book called The Book of Absolutes by William Gairdner, a guy described as "a best-selling author, businessman, and independent scholar." --My kind of guy. (I'm no best-selling author, but I fashion myself a businessman of some type, and I attempt to be an independent scholar.)

Anyway. I thought I should look him up. What is he about? What kind of business is he in? (And why and how can he write such top-notch scholarly work?)

My search brought me to Gairdner's personal website, his blog, and, rather quickly, to a post about US Submarines at the North Pole in 1959 and 1962.

!!!!????

"In view of the recent global warming hysteria," he wrote, "you may be interested in the US Navy photos at the website below which has a number of photos showing US submarines surfacing at the North Pole in open water, 50 years ago!"

And he provided a link to a page dedicated to photos of the USS Skate (SSN-578). Do a "find" on pole to see photos of surfacings in open water at the North Pole . . . in March 1959 and August 1962 (at least).

But then Gairdner adds a postscript:

"A day after posting this, a friend sent me this link, a site that has intriguing in-depth info on the polar ice question - and more photos of submarines surfacing in water at the North Pole."

Oh, yes! Intriguing, indeed!

The opening quote alone, is worthy of attention:

It will without doubt have come to your Lordship's knowledge that a considerable change of climate, inexplicable at present to us, must have taken place in the Circumpolar Regions, by which the severity of the cold that has for centuries past enclosed the seas in the high northern latitudes in an impenetrable barrier of ice has been during the last two years, greatly abated.

(This) affords ample proof that new sources of warmth have been opened and give us leave to hope that the Arctic Seas may at this time be more accessible than they have been for centuries past, and that discoveries may now be made in them not only interesting to the advancement of science but also to the future intercourse of mankind and the commerce of distant nations.

President of the Royal Society, London, to the Admiralty, 20th November, 1817

But ignore this "ancient" historical reference. John Daly, the author of the page in question, provides far more information and thoughtful interpretive data . . . about global air temperatures, ice thickness, and more . . . as well as an instructive reference to how statements by scientists who are supposed to be "in the know" can skew our perspectives.

In August 2000, a Russian icebreaker, the Yamal, took a group of environmental scientists on an excursion into the Arctic Ocean. When they got to the North Pole they were greeted by an expanse of open water, photographs of which became the subject of sensationalist reporting in the media.

Among the scientists on the cruise was Dr. James McCarthy, an oceanographer, director of the Museum of Comparative Zoology at Harvard University and a lead author for the IPCC. "It was totally unexpected," he said in a report to the media. Another scientist aboard, Dr. Malcolm C. McKenna, a paleontologist at the American Museum of Natural History, remarked "I don't know if anybody in history ever got to 90 degrees north to be greeted by water, not ice."

"The last time scientists can be certain the pole was awash in water was more than 50 million years ago." proclaimed the New York Times in an article entitled `The North Pole is melting' (August 19, 2000).

Daly comments, "In the end, the New York Times retracted the story. But we should not be too quick to blame them - it was IPCC scientists aboard the Yamal, particularly James McCarthy, who first started the scare story. The media simply took his word at face value assuming his scientific credentials would be sufficient authority to support the story."

Lots of worthwhile stuff to ponder at The Top of the World: Is the North Pole Turning to Water?

Enjoy!

Zero Tolerance policies

Randy Cassingham of This is True first put me on to Zero Tolerance ("ZT") policies and their insidious repercussions. He has dedicated an entire area of his website to recording the follies of ZT zealotry.

His latest story in the most recent issue of This is True grabbed my attention, especially because it came so quickly on the heels of a story I had found on my own and had sent his way: Iowa school district suspends first-grade home-schooler . . . when a shotgun shell the boy and his dad had found (and that the boy slipped into his pants pocket) happened to fall out of his pocket as he was jumping around in gym class.

"Whether it's an empty shell or a loaded shell, it's considered part of a weapon and unsafe," said Leigh McGivern, a school district spokesperson.

And why the shell appeared in the boy's pocket doesn't matter, either. Y'know: "Rules are rules!"

Dan Beattie and his son found the shotgun shell as they cleared out a wall of their Carlisle farmhouse, which they are renovating.

Beattie, a church pastor, said he used the encounter to teach Matthias about guns and safety.

He then let Matthias add the shotgun shell to his collection of raccoon bones and other farm finds.

"He thought it was cool," Dan Beattie said.

The Beatties said they didn't know the shotgun shell was in Matthias' pants pocket when they dropped him off last week at his [once-a-week] public school class [that pairs public school teachers with home-schooled children]. . . .

Matthias isn't a public school student in the eyes of state law, and his class meets at a church. But district officials say Matthias and other home-schooled students are bound by discipline policies.

Yep. "Rules are rules!"

Leslie Dahm, the school district's home-schooling coordinator, indicated in the suspension email she sent the Beattie family that school administrators considered more severe penalties before they settled on the one-week suspension.

How brilliant of them!

Oh.

But this wasn't the first such suspension the district has meted out in the recent past.

Back in October, we are told, school officials suspended a sixth-grader who took empty shotgun shells to school to show a teacher.

Y'know, they're just so dangerous!

Well, then there's the story Cassingham highlighted in his newsletter this past week: Patrick Timoney's "Gun."

During lunch hour, 9-year-old Patrick Timoney was playing Legos with his friend. Patrick, whose dad is a former police officer, pulled out his favorite Lego^® action figure--a policeman who wields a 2" long machine gun.

 

As he attached the gun to the policeman, he suddenly found himself in trouble with "the law": he was "yanked into the principal's office."

As the New York Daily News reports, the principal then called Patrick's mother and forced the boy to sign a statement confessing he had brought a gun to school. After all, she allegedly told Patrick, "A gun is a gun!"

The elder Patrick Timoney, a former 72nd Precinct cop, couldn't believe his son was nearly busted over something so obviously inauthentic.

"It's a 2-inch gun," he said. "She went overboard. She should have said, 'Put the toys away,' and that would have been the end of it."

After a meeting between the principal and the parents, the boy was spared any disciplinary action. City school officials said Patrick agreed to leave the "gun" at home.

"I'm never bringing a toy to school again," said Patrick, whose favorite subject is math.

Laura Timoney remained upset. Her son, a typically eager student, asked to stay home yesterday because he thought the principal was mad at him.

The mother said she expects an apology and may sue.

Randy Cassingham lays bare the case the Timoney's have. The principal's actions completely contravene the district's written policy.

To begin with (p3), school officials are told that "prior to determining the appropriate disciplinary and/or intervention measures, the following must be considered: the student's age, maturity, and previous disciplinary record...." (bolding and underlining from the original). There were no indications in any of the reports I read that Patrick Timoney had any sort of discipline problems before, and in fact he loved school.

In the section on "Level 4" infractions (p16) for Kindergarten through Grade 5, which outlines that it is an infraction to possess "any weapon as defined in Category II", the policy goes on to urge:

Before requesting a suspension for possession of an article listed in Category II for which a purpose other than infliction of physical harm exists, e.g., a nail file, the principal must consider whether there are mitigating factors present. In addition, the principal must consider whether an imitation gun is realistic looking by considering factors such as its color, size, shape, appearance and weight.

The principal "must consider whether there are mitigating factors present"? What a concept! And note it says must, not "should". And the principal must "consider whether an imitation gun is realistic looking by considering factors such as its color, size, shape, appearance and weight." In other words, a gun is not a gun is not a gun: its color, size, shape, appearance and weight must also be considered before declaring a toy gun is a "weapon".

But here's a story that illustrates the problem with the idea of suing schools for their idiotic ZT policies and/or practices: the story of Savana Redding. Perhaps you remember her story?

Savana was the girl who was strip searched because one of her classmates implied that she had distributed some 400mg ("prescription-strength") Advil (ibuprofen) at school.

The school officials involved were unwilling to admit any wrongdoing on their part when Savana's mother protested that such an intrusive search was inappropriate. Mrs. Redding then sought legal remedy.

According to the summary statement in the eventual U.S. Supreme Court majority opinion in the case,

Savana’s mother filed suit against Safford Unified School District #1 [and the school staff members who had conducted the search], Wilson, Romero, and Schwallier[,] for conducting a strip search in violation of Savana’s Fourth Amendment rights. The individual[ defendant]s . . . moved for summary judgment, raising a defense of qualified immunity. The District Court for the District of Arizona granted the motion on the ground that there was no Fourth Amendment violation, and a panel of the Ninth Circuit affirmed. A closely divided Circuit sitting en banc, however, reversed. . . .

The Supreme Court decision--which came five years after the incident (!!!!)--did not find in Savana's favor that the school district and staff were liable for any damages; all it did was state that the search violated the Constitution's Fourth Amendment prohibition against unreasonable search. However (Opinion of the Court, Sec. IV, para. 4),

the cases viewing school strip searches differently from the way we see them are numerous enough, with well-reasoned majority and dissenting opinions, to counsel doubt that we were sufficiently clear in the prior statement of law. We conclude that qualified immunity is warranted.

Therefore,

petitioners Wilson, Romero, and Schwallier are. . . protected from liability through qualified immunity. Our conclusions here do not resolve, however, the question of the liability of petitioner Safford Unified School District #1 under Monell v. New York City Dept. of Social Servs., 436 U. S. 658, 694 (1978), . . . and this case is remanded [to the Ninth Circuit Court] for consideration of the Monell claim.

Do you have the time and money to pursue that kind of case?

I'm no great fan of the American Civil Liberties Union, but on this case, anyway, I say, "Thank God for the ACLU!"

Bible math

As I committed myself last year, so I've committed myself this year: I want to read through the Bible in one year.

And on Monday I came across some numbers that simply "don't make sense" to me. I'm wondering how anyone else might reasonably interpret them.

In the Book of Numbers, chapters 1 and 2, if I'm reading the text correctly, we get an enumeration of all males "from twenty years old and upward, all who were able to go to war" (1:20, 22, 24, 26, 28, 30, 32, 34, 36, 38, 40, 42, and 45-46; also 2:4, 6, 8, 11, 13, 15, 19, 21, 23, 26, 28, 30 and 32). --I actually took the time to align all the specific numbers mentioned in chapter 2 to the numbers mentioned in chapter 1; and I checked the math to see if all the numbers added up. (They did.)

As I read this unbelievably repetitive portion of text, I kept wondering:

Why does the author keep repeating himself? Why not simply say something along the lines of, "The number of men from twenty years old and upward able to go to war, numbered by clan, by their fathers' houses, were as follows: From the the tribe of Reuben, 46,500; from the tribe of Simeon, 59,300; from the tribe of . . . "? Why, instead, this lengthy repetition of verbiage:

The people of Reuben, Israel's firstborn, their generations, by their clans, by their fathers' houses, according to the number of names, head by head, every male from twenty years old and upward, all who were able to go to war: those listed of the tribe of Reuben were 46,500.

Of the people of Simeon, their generations, by their clans, by their fathers' houses, those of them who were listed, according to the number of names, head by head, every male from twenty years old and upward, all who were able to go to war: those listed of the tribe of Simeon were 59,300. . . .

And so on and so forth.

Unbelievable repetition!

But I slogged through. And the ultimate summary of both chapters--chapter 1 and chapter 2--is that there were 603,550 men 20 years old and upward who could be expected to go to war in behalf of Israel at that particular point in history.

"But the Levites [i.e., the tribe of Levi--the priestly tribe] were not listed among the people of Israel" (2:33).

Okay.

So then I came to chapter 3. And in chapter 3 we have the census of the Levites. And I checked the numbers there, too, and I agreed with the author that, according to what he had written in 3:21ff, if those verses are accurate, then "All those listed among the Levites, . . . all the males from a month old and upward, were 22,000" (Numbers 3:39).

Good.

But then I ran into a problem.

And [YHWH] said to Moses, "List all the firstborn males of the people of Israel, from a month old and upward, taking the number of their names. And you shall take the Levites for me--I am [YHWH] --instead of all the firstborn among the people of Israel, and the cattle of the Levites instead of all the firstborn among the cattle of the people of Israel." So Moses listed all the firstborn among the people of Israel, as [YHWH] commanded him. And all the firstborn males, according to the number of names, from a month old and upward as listed were 22,273.

And [YHWH] spoke to Moses, saying, "Take the Levites instead of all the firstborn among the people of Israel, and the cattle of the Levites instead of their cattle. The Levites shall be mine: I am [YHWH]. And as the redemption price for the 273 of the firstborn of the people of Israel, over and above the number of the male Levites, you shall take five shekels per head; you shall take them according to the shekel of the sanctuary (the shekel of twenty gerahs and give the money to Aaron and his sons as the redemption price for those who are over."

--Numbers 3:40-48

"What's the problem, John?"

The problem is the number of firstborn!

You've got 22,273 firstborn males a month old and upward among a male population of 20 years old and upward of 603,550! If the 603,550 included all males a month old and older, the math would be slightly better. Indeed, assuming the kinds of population numbers we see in various parts of the world, where the average age is, say, 15, then the statistics would be somewhat better.

But let's take the Bible at its word. There were 603,550 men aged 20 and up, and there were 22,273 firstborn males a month old and older.

That means that, among a minimum of 603,550 men, there were a maximum of 22,273 firstborn males.

603,550/22,273 = 27.1

!!!!

Do you begin to "feel" the problem I felt?

If these numbers are to be believed, and if I have interpreted the Bible correctly, then, at best, only one in 27 men was a firstborn. On average, each father had to have had 27 sons. Add in the daughters (who weren't counted), and you'd have parents averaging somewhere above 50 children per couple.

--Anyone want to suggest some solutions to this conundrum?

NY governor candidate: "Legalize, regulate and tax prostitution and marijuana."

I received an ad for a webinar that, I was told, would feature a woman who was "locked up with felons, thieves, hoods and thugs in one of the world's most notorious prisons -- Rikers Island" for "a crime [she] didn't commit."

No friends... no support... no help... only YOU!

What would you do? How would you react?

On February 16th at 7:00 p.m. Eastern, you'll meet a very special person who suffered that very fate... and you'll also hear her inspiring story of hope and triumph in the face of overwhelming adversity.

Would you give up? Would you run? Would you flee the country?

Not this person! In fact, she turned this adversity into one of the greatest personal True Life Success Lessons I've ever heard... and you'll hear her first-hand account of how she did it.

The guest sounded fascinating. I wanted to see if I could figure out who she was before--or without--having to take the time to listen in on the phone call.

I did a Google search on rikers island adversity she and thought maybe the first site on the list would take me to my target.

KRISTINS BLOG

Apr 9, 2009 ... Last year this time I was sitting in Riker's Island. ... I learned how to be a better person through this adversity. ... yesterday after 2 yrs fighting her case from Riker's Island. She is facing 40+ years in prison. ...
www.manhattanmadam.com/kristins_blog?category=1 - Cached

After having spent some time on her site, however, and now that I compare notes, I think most probably Kristin Davis is not the one whom Jim Edwards had in mind. Because she says she knows she did break the law though she wants to change it and she is hopping mad about how the legal system turns a blind eye to the behavior of societal heavy-weights even while crushing those of lesser stature.

Kind of reminds me of how our president has appointed so many people to positions of high authority, and Congress has approved them: people who are supposed to hold "the rest of us" to account in and for laws of which they have been found in gross violation. (I'm thinking of people like Treasury Secretary Timothy Geithner (who is in charge of the IRS). In 2009, as he was being examined for fitness for the job, someone discovered that Geithner had failed to pay some $34,000 in Social Security and Medicare taxes on his salary at the IMF (International Monetary Fund) between 2001 and 2004. Oh! Geithner finally paid what he owed: most of it, anyway. Just not any of the hefty penalties that anyone else would have been unable to avoid. Geithner got a pass from his political buddies. . . . Oh. But while we're on the subject, let's consider how it also came out last year that Geithner had employed "household help" that was ineligible to work in the United States. --Y'know, "the rest of us" could face time in prison for such dereliction of duty to the law of the land. But Geithner? --He merely had to acknowledge that he had done something illegal. And now he holds one of the most powerful positions in the government of the United States. . . . Or how about Rep. Rangel of New York, one of the men responsible for legislating tax policy for the nation? He has yet to explain to anyone's satisfaction how he "forgot" to pay taxes on $75,000 in rental income he earned from an off-shore rental property. . . . Y'know, a lot of critics of the most outspoken leaders of the "Religious Right" note that those who are most outspoken on matters like homosexuality seem, most often, to be involved themselves in the very behavior they speak so vociferously against. --One wonders if the same may be true about our legislators in Washington. . . . But I get ahead of myself.)

Back to Kristin Davis. The blog post by which I was introduced to her site talked about the horrible and fearsome conditions at Riker's Island and then concludes (forgive the lousy spelling!):

Now when I think about it, I am glad I had the experience. I am truly a better person for what I have gone through. I really and truly value the people in my life and the experiences I have. Its not so much about the outcome of the event, its about having the experience. I learned how to be a better person through this adversity. I learned how to value and love those who love me.

A lot of people ask me if I'm mad at those who ratted me out and how I feel. I actually don't think about it much. I don't have time for bad energy. I have had a lot of people do me wrong - that I can't dispute. If you think I think twice about it - I don't. Why should I? It has nothing to do with me and everything to do with that person's character. If you think I'm dwelling on anything from the past then you don't get what I'm about. The past is the past and its better left in the past. The "now" for me is amazing and I am so incredibly happy its not even funny. I have met so many amazing people and have a great group in my life, I couldn't ask for more.

Don't get me wrong, I could have completely done without the Riker's Island Experience. However, I think this is the path that was chosen for me. I have the opportunity to do some good now and thats what I am doing.

A little further down the page, I read her "next" post in the series.

She described two of the women with whom she spent time in prison:

Janet Redmond-Mercereau . . is the Staten Island woman who was on trail for murdering her husband, an NYFD marshall, while their 2 young children slept. She was convicted by a jury yesterday. . . I don't know if she did it or not. It is not my place to judge.

Another woman I was in jail with was Nizelie Santiago. She was convicted of manslaughter of her daughter when her husband beat her to death and they left her sitting there for 1 day. She got 40 years in prison. . . .

These are the types of criminals I was in jail with. Me- little old promoting prositution charge (class D felony-these are class A)....a victimless crime was sitting there befriending murderers. When I think about it, it makes me sick that our society would classify my crime in the same manner as theirs. My crime which happens to be legal in 2 states yet just not the one I was operating in.

I sat there day in and day out surrounded by baby and husband killers. These are people who confided in me about their cases and the people I LIVED with every day. Can you imagine that? . . .

I'm writing this to point out the hypocrisy of our system. That me, a former madam, with a "promoting prostitution" charge was classified in the same manner as a murderer. That is ridiculous. And there sits Elliot Spitzer in his plush Park Avenue apartment with NUMEROUS pending felonies in the Class C category (worse than mine) and he gets away scott-free.

I'd like for us to address why there is a different set of rules for the elite and connected then there are for those of us who worked our way up from nothing???

It was when I read about the "promoting prostitution charge" that I suddenly paid attention to the fact that Kristin's site is titled The Manhattan Madam Kristin Davis.

What is this site really all about? I wondered.

And then I found out. I continued reading down the page and clicked on a few of her most recent posts: Why I will run for Governor in 2010 (February 7, 2010); Throw The But [I think she meant Bum--JAH] Out!!!! (January 21, 2010); Move Over Eliot! (December 14, 2009); and Harvard Pimps the Luv-Guv (November 13, 2009).

You get a good idea what she's "all about." She's about trying to expose hypocrisy. And about taking personal responsibility. She wants

to highlight the inequities and sexism in our criminal justice system which penalizes women, minorities and poor people while wealthy, connected white men like Eliot Spitzer evade justice. Our system that allows Spitzer to walk on money laundering and violating the Mann act (transporting a prostitute across state lines), but sends Plaxico to prison for seven years for shooting himself in the foot is ripe for real reform. . . .

New York's so-called " political class" is driving this state into the toilet. Crushing income and property taxes pay for sweetheart public employees union compensation deals with the State. The unions, in turn, give money and manpower to re-elect the very same politicians' who gave them this deal and everybody benefits- but the taxpayers.

Now adding to this disgrace is Senator Hiram Montserrat. This thug beat up his girlfriend in a jealous rage and slashed her face with a broken glass. Convicted of a misdemeanor (for anyone else it would have been a felony) he still sits in the Senate, making decisions that effect the lives of all New Yorkers. Every woman in New York should be outraged. What kind of role model is he for young people looking at our system and trying to figure out if democracy really works? This bum needs to be expelled from the Senate now!

Having once run a multi-million dollar escort business- a business I'm through with and will never return to-I've seen the battered women syndrome up close. I've helped dozens of women get away from abusive husbands and boyfriends. While not everyone will agree, I always looked at my business as empowering to women and encouraged them to set their own boundaries and make their own way. Hiram will beat up his girlfriend again. In fact, if he get's away with it this time it will only embolden him to do it again when he thinks he is safe and no one is watching.

I wasn't very "political" until I got embroiled in the Spitzer scandal and I experienced first hand the inequities and unfairness of the criminal justice system, which discriminates against women, poor people and those without political influence. How could Manhattan DA Robert Morgenthau send me to Rikers Island for four months and set my bail at $2M for arranging for escorts when Eliot Spitzer who paid for and utilized the services of those escorts walked away scot-free? . . .

When I was finally moved into my housing unit, Closed Custody (CCH), reality began to set in. Here I was in this tiny 8x8 cell with no mirror, no running water, no human interaction of any kind- I had only my thoughts to contend with. And all I thought about was if I would have a life after this experience.

I know that might sound extreme. But, you have to realize that I'm sitting in jail with a $2 million dollar bail for promoting prostitution. There are people in there for robbery and armed assault whose bail is $25,000. H*ll, even my friend Remy Ma who was arrested for assault with a deadly weapon for a shooting, her bail was $250,000. All I could think of is that I'm in jail to keep me silent, because I know too much about some powerful people. . . .

If Eliot Spitzer runs, I will also take the plunge and enter the Democratic Primary for New York State Comptroller. I am confident I can gather the necessary signatures to get on the Primary ballot. . . .

Eliot Spitzer has violated the public trust. His hypocrisy--patronizing escort services while prosecuting others--and his lies about the illegal financing of his campaigns for Attorney General should exclude him from any position of trust.

His black socks in the boudoir are an additional affront to good taste. His abuse of some of the women I arranged for him to spend time with raises serious questions about his character.

If I run, I will advocate the legalization, regulation and taxation of both prostitution and marijuana to solve New York's fiscal problems. Eliot Spitzer, Andrew Cuomo, and Tom DiNapoli offer only tax increases, more borrowing, greater debt and service cuts: I will offer a plan for new revenues from two activities that are going to happen anyway.

Under my plan New York's budget can be balanced without raising taxes on working people or cuts to vital services. Who else can say that?

Prostitution should be legalized for both the public safety and to fill the public coffers. No more Craig's List murders. No more Johns robbed. Regular medical check ups and licensing of service providers by the State.

Millions of pot smokers are prepared to pay taxes on an activity no more dangerous than drinking alcohol, which is legal in New York State. Let people grow their own up to a reasonable amount. Standardize distribution and tax.

I really would like to see a Candidate for Governor articulate this platform.

I [am] ready to match my ideas with the Steamroller- not to mention asking him some pointed questions. I am ready to throw my hat in the ring. I will be the first candidate in New York history to run while on probation. See you at the debates, Eliot.

Clearly, there's a lot of anger there. I think that's the motive (or emotive!) force behind Davis's candidacy. But there's a lot of serious thinking, too.

I know it's almost beyond imagination that a conservative Christian would speak up in behalf of decriminalizing pot or prostitution. But I'm willing to put the case before you. Though I myself have never imbibed marijuana or any other illegal or mind-altering drugs; though I have absolutely no interest in ingesting such things; though I have drunk only the bare minimum of wine upon occasion when social convention--including participation in certain communion services at some Christian churches!--required it; though I have never engaged in any form of pre- or extramarital s*xual intercourse; I find the arguments compelling for the decriminalization of drug use and of prostitution.

Davis's brief but (I think) potent argument is to be found in her article Legalize It! (speaking of prostitution).

Probably the best argument I've seen for (not so much legalizing, but) decriminalizing drugs is to be found in Thomas Szasz' Our Right to Drugs: The Case for a Free Market.

If you're more of an auditory than visual learner, check out these pointed interviews on national TV:

Fox News "Your World" (???; sorry, I don't know who the interviewer is):


Sean Hannity:


ABC's "20/20":


Y'know, I think Kristin could be a formidable candidate if she and her campaign manager decided to present her in a more serious and professional light.

On this last point, see the New York Daily News article, Kristin Davis, alleged Eliot Spitzer madam, to run for New York governor with GOP Roger Stone's help. Clearly, a very serious headline, but it is accompanied by a very un-serious news story . . . including a photo showing too much of Ms. Davis' ample cleavage; an opening line about how "'Manhattan Madam' Kristin Davis is tossing her lacy brassiere into the political ring - with the help of one of the GOP's most fearsome strategists"; and the following conclusion, quoting her campaign manager:

"Kristin knows lots of Penthouse Pets," he said. "We'll get four, make them notary publics and have them, suitably attired, collecting signatures at Grand Central Station during rush hour."

Davis is also ready to put her own pulchritude to work, having posed for a topless photo with "pot" written on one arm, "sex" on another and "legalize" across her chest.

"Unlike other candidates, she has nothing to hide," said Stone.

Or this one from New York magazine: Former Madam Kristin Davis Wants to Be Your Governor.

Again, the article begins with a salacious comment (this time about how she "is preparing to throw her sizable bust into the race for the state's highest office"), and it is accompanied by a photo more oriented to selling Ms. Davis' s*x appeal than her business sense, brains, or political platform.

Probably the best serious discussion about her candidacy can be found on the Independent Political Report site at ‘Manhattan Madam’ Kristin Davis: ‘Why I will run for Governor in 2010′.

If I lived in New York, and if Davis would actually pursue her candidacy in all seriousness, I could imagine actually voting for her.

She has established her credentials in a couple of areas; she has certainly demonstrated poise and quick wit in her response to some rather antagonistic interviewers; can she demonstrate competency on a wider range of issues?

If so, her campaign could prove very interesting, indeed!

[NOTE: If you are reading this article on Facebook and can't use links or don't see videos, please realize it originally appeared and is still available on my personal blog.]