Archive for December, 2010

What’s Red and Green and All Over?

30 December 2010

From Political Irony, one of my favorite sites.

When I run into cartoons like this, I’m sorry I’m on break. Were I in the classroom, I’d love to pop this up on screen and tell some first year college comp students to write a brief definitional essay explaining which combinations are possible and which impossible. Computer use mandatory. No Wikipedia allowed. Dictionary/encyclopedia use encouraged. Citations required in full MLA format.

In some classes I’ve had, all the students might even have known what all four symbols represented.

Cassandra

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The Charting of the Economic Course

29 December 2010

Bill McBride of Calculated Risk puts together some extremely clarifying graphs. I found today’s post “A Few for Graphs for 2010” well worth some time.

I hope those who keep telling me the recovery is on its way at least see this graph:

To see it larger, click here. But you don’t really have to do get the gist. Appropriately enough, the recession we are in is the one in bright red. You can’t miss it. It’s the biggest, the deepest, the one on the bottom.

Yet the merriment goes on. So far, the stock market chirps along without regard to trends in, say, shipping. Anyone interested in the Baltic Dry Index might want to click over to Seeking Alpha for “Baltic Dry Index: Indicator for Economy / S&P?” These waters may be murkier, but there be wails here too. Aaarg. Besides, this article also has some nifty graphs.

Cassandra

Handbasket Report–Gasoline Prices

29 December 2010

Last night the local Fox news channel–yes, I know, but I have my reasons for listening–had a feature on gas prices. The central point was that supply and demand are out of whack and we could see five dollar a gallon gasoline as early as 2012.

Little context was provided and Peak Oil went unmentioned, so the typical listener was probably left muttering about oil companies and profiteering. Now that’s actually something I do all the time, but that’s not the central issue here. Isn’t recognizing that fossil fuels are FINITE crucial to our future?

Why should I ask? Silly me. I still remember a magazine article from the 70s that predicted roads jammed with tiny, fuel efficient vehicles by the 90s. Didn’t happen. I also thought everyone would spring into action as soon as they heard the name M. King Hubbert. Still hasn’t happened for many.

Unfortunately, delay and denial are two of the most common human responses. To that, to keep the D-list going, I’d add disinterest. Yes, “uninterested” is more precise, but drilling da Ds denotes dire, dismal, doomer iDeas, donnit? Deep drilling. Da dum da dum da dum.

When the Gulf spill occurred, how much coverage was given to the issue of deep water drilling itself? I heard some coverage of how BP was operating at the limits of known technology, but I can’t remember hearing much, if any, explanation of WHY BP would be taking such risks. The answer is pretty obvious, isn’t it?

There’s an old cliche about picking the low hanging fruit first. When that’s gone, out come the ladders and other contraptions to allow picking the high fruit. Of course BP wasn’t just going for fruit on top of a tree. That well was about five thousand feet down. Under water. At the limits of technology. Shouldn’t that have told most people gas prices were going to go up?

Yet I’m sure almost all will once again complain about how high gas prices are unfair because they NEED gas to be two dollars a gallon. Oh well. I NEED people to be sane, rational, and sensible creatures who LOVE digging for answers more than they LOVE television, but I know it ain’t gonna happen.

Cassandra

Julian Assange’s Op-Ed Letter

8 December 2010

I found this letter published in The Australian well worth reading.

“Don’t Shoot Messenger for Revealing Uncomfortable Truths”

I’d be interested in hearing what those who visit this site think about the Wikileaks controversy. Specifically, how does Assange’s explanation affect you? Did it alter or reinforce your opinion of the site?

Cassandra

Now Here’s a Patriot!

4 December 2010

I just found this old letter to the editor of the New York Times. It appeared on February 5, 2009.

Advertise on NYTimes.com
Op-Ed Contributor
Please Raise My Taxes

By REED HASTINGS
Published: February 5, 2009

Los Gatos, Calif.

I’M the chief executive of a publicly traded company and, like my peers, I’m very highly paid. The difference between salaries like mine and those of average Americans creates a lot of tension, and I’d like to offer a suggestion. President Obama should celebrate our success, rather than trying to shame us or cap our pay. But he should also take half of our huge earnings in taxes, instead of the current one-third.

Then, the next time a chief executive earns an eye-popping amount of money, we can cheer that half of it is going to pay for our soldiers, schools and security. Higher taxes on huge pay days can finance opportunity for the next generation of Americans.

Clearly, the efforts over the past few decades to control executive compensation haven’t accomplished much. Improved public disclosure was supposed to shame companies into lowering salaries, and it obviously hasn’t worked. In 1993, President Bill Clinton changed the tax law to effectively cap executives’ salaries at $1 million a year, but that simply drove corporate boards to offer larger bonuses and stock options to attract and keep talent. More recently, “say on pay” proposals would have shareholders opine on their boards’ compensation decisions, but “say and pay” won’t change the fact that luring a top executive away from another company is never easy or cheap.

The reality is that the boards of public companies hate overpaying for anything, including executives. But picking the wrong chief executive is an enormous disaster, so boards are willing to pay an arm and a leg for already proven talent. Putting limits on the salaries at public companies, or trying to shame them into coming down, won’t stop this costly competition for talent.

Of course, it’s galling when a chief executive fails and is still handsomely rewarded. But with the concept of “tax, not shame,” a shocking $20 million severance package would generate $10 million for the government. That’s a far better solution than what we have today, not least because it works with the market rather than against it.

Another advantage is that it would also cover the sometimes huge earnings of hedge fund managers, star athletes, stunning movie stars, venture capitalists and the chief executives of private companies. Surely there is no reason to focus only on executives at publicly traded companies.

This week, President Obama proposed imposing a $500,000 compensation cap on companies seeking a bailout. It’s a terrible idea. We all want the taxpayers’ money returned, and capping compensation at bailout recipients will just make it that much harder for those boards to hire and hold on to the executives who can lead their companies to compete and thrive.

Perhaps a starting place for “tax, not shame” would be creating a top federal marginal tax rate of 50 percent on all income above $1 million per year. Some will tell you that would reduce the incentive to earn but I don’t see that as likely. Besides, half of a giant compensation package is still pretty huge, and most of our motivation is the sheer challenge of the job anyway.

Instead of trying to shame companies and executives, the president should take advantage of our success by using our outsized earnings to pay for the needs of our nation.

Reed Hastings is the chief executive of Netflix.

Anyone who wants to see a visual representation of the income distribution in the United States might like this site: The L-Curve

The explanation for this illustration alone makes it worth a visit.

The L-Curve

While I’d like to see the top income tax rate go back to 80 percent, the 1980 rate, I’d be happy with the 50 percent Hastings suggests. That’d still leave him a rich man, and it’d help reduce the national debt.

So let’s hear it for Hastings, someone who recognized the excesses of wealth, and/or found the answer to a question a former neighbor once asked: “How many yachts can you water ski behind at one time?”

Cassandra

Sudbury Steve

3 December 2010

In clicking through my personalized list of Google News stories, I discovered a Canadian blogger who goes by Sudbury Steve. He identifies himself further as “Steve May, CEO of the Sudbury Federal Green Party Association.”

These two posts are worth reading.


Change is Upon Us, Part 1: Living in a Time of Transition


Change is Upon Us, Part 2: Peak Oil

I love it when someone else saves me so much time.

Cassandra