I don’t know Ms. Romer personally but I certainly know her work both in and out of the White House. I can only hope that the inconsistency between her work as a truth-seeking academic and as an Obama apologist finally got to her and is, at least in part, one of the reasons she resigned as chair of the White House Council of Economic Advisers.
It will be very interesting to see how her writings progress from here.
Many years ago I saw an overview of airline safety rules and regulations which revealed, in my view, a disturbing double standard: airline attendants are provided with protective smoke hoods to use in the event of a crash, but passengers are not.
These hoods protect your eyes from cinders and smoke, and your lungs from most toxic fumes. The hood (presuming you can get it on in an actual emergency) gives the wearer up to two minutes of precious extra breathing and visibility after a crash, which is when the vast majority of airline crash deaths occur: not during the crash, but afterwards as survivors try to escape the burning wreckage.
That’s right. The statistics clearly show that most of us, up to 75 or 80%, survive the actual impact; it is the dark, confusion, smoke, toxic fumes, and the inability to see or breathe that cause up to 80% of all fatalities in plane crashes.
The airline attendants and crew are provided with officially sanctioned smoke hoods for their use during an emergency, presumably to stay alert and safe enough to help blinded, coughing, choking passengers out to safety … maybe. Once a plane starts smoldering, one has only about 90 seconds to get out alive.
Well, I’m not a big fan of restricted access to a product that I believe could save my life or the lives of my children. So I rattled some cages, asked some airline personnel and made some calls and it turns out, at the time I was pushing this issue, the FAA was considering — as it had been for many years — several different patent-pending smoke hood models for passengers.
In fact, according to the FAA, they were considering so many smoke hood models that it would take some time to find “the” right one.
The FAA banned all such masks until they found “the one.” As of press time, “the one” had not yet been approved. So passengers remain unprotected, and dying.
So I contacted a company in the UK that sold the smoke holds which led me to a distributor in Fort Worth, Texas. As it turned out, I was living in Dallas at the time so could drive to the vendor to do business.
The vendor informed me that in order for him to sell me the smoke hoods at about $60 a pop, I would have to be a business. I asked him what was the smallest order he had ever filled for a business. He said six.
So I instantly became an academic consulting business and ordered six smoke hoods. Within a couple of days, I was the proud owner of six orange-colored, travel savvy smoke hoods for any type of fire or smoke emergency, including in hotel rooms, on cruise ships, and in the cabin of an airplane. This, by the way, was in 1990, TWENTY years ago!
So, I wonder how that federal legislation that is supposed to provide passengers with the same protection as airline employees is coming along these days?
The next time you board a commercial flight, try to get a peek at the safety equipment provided to the airline attendants. Then, you’ll have to ask the attendant why the same safety equipment is not made available to passengers.
Does anyone else see how perverted this story is? A company which is 60% owned by the U.S. Treasury, in other words, 60% owned by taxpayers — not voluntary shareholders, but TAXPAYERS, has hired a private investment banking company to take the company public.
That is, to be sold to public stockholders. For a profit. Which is going to be distributed to whom? The government. Who took the company over by edict, essentially by force, ignoring lawfully binding financial contracts in the process. Oh, yes, technically G.M. went through a “banktuptcy,” but when one of the two involved parties is the federal government — the one who makes up the rules of the game — then it isn’t a game anymore. It’s “do it, or else!”
Absolutely unbelievable. This IPO should not be happening. The bailout should not have happened. None of this should have happened. If the company cannot generate a profit in the marketplace, then it should go bankrupt and its resources freed up to be used where they are most valued by the marketplace.
Thugs from the Service Employees International Union (SEIU) and Chicago’s National Political Action trespassed on a Bank of America Executive’s front lawn in a so-called “protest” over mortgage defaults.
This same group went after AIG executives in March of last year (see video). I commented on local television and to anyone who would listen then how misdirected their anger was, and I repeat that sentiment now.
Where is the President’s outrage at these mob tactics against a private U.S. citizen? I can only assume his silence is tacit approval. The recently-resigned President of SEIU, Andy Stern, is reportedly Obama’s most frequent visitor at the White House, after all. And Obama has made it abundantly clear that he has no respect for private industry and free enterprise.
I’m sure you’ve heard about the steady rise in gold prices over the last several months. You may have also seen the advertisements from gold investment companies pushing the purchase of gold, or heard predictions about even higher gold prices as world currencies struggle.
We have to take a step back and ask ourselves about the true underlying value of gold.
Why is it valuable? Because people demand it, and there is a relatively limited world supply. Why do people demand gold?
It’s not like gold will sustain you: you can’t eat or drink it, nor does it have utility in and of itself.
No, the reason gold has value is because it can be exchanged for money which, in turn, can be exchanged for goods or services. So the value of gold is derived from the very same place as is the value of money: access to underlying goods and services.
The actual value of gold, however, is entirely dependent on other people’s demand for gold, given limited supply, much like fine art. Unlike money, you cannot actually use gold for transactions: have you tried to use a bar of gold at your local restaurant or car dealer, for example?
Think about it: if for some reason gold fell out of favor — let’s say someone discovered it was toxic — then gold would no longer be desired as an indirect means of exchange — having to first be exchanged for currency — and its price would drop to nothing, quite independently of the value of money itself.
The value of money it also dependent on its demand, which in turn depends on the acceptability of the currency on the world stage as a unit of exchange.
Dollars are accepted as currency and retain their value as long as the underlying real U.S. economy continues to be productive, and as long as the world supply of dollars does not outstrip the world demand for dollars.
Dollars are suffering at the moment for two primary reasons: the attack on private industry by Obama’s policies, and the excessive world supply of dollars. Both of these factors drive down the value of a dollar, and drive up the number of dollars that a bar of gold commands.
First General Motors, then Student Loans. What’s next, Mr. President?
In a Bloomberg BusinessWeek article, the most recent seizure of private industry in Venezuela was reported, with as much calm and lack of alarm as one may report on the the weather or a walk in the park.
I fear that this is where the U.S. is headed in the all too near future, given the takeover of the auto and student loan industries, and President Obama’s apparent admiration of President Chavez and all he does.
To quote from the article, which speaks for itself:
President Hugo Chavez announced Saturday the expropriation of a group of iron, aluminum and transportation companies in Venezuela’s mining region.
Among the expropriated companies is Materiales Siderurgicos, or Matesi, which is the Venezuelan subsidiary of Luxembourg-based steel maker Tenaris SA.
Venezuela’s socialist president said in a televised that his government was going to take over Matesi because “we couldn’t reach an amicable and reasonable settlement with the owners.”
Chavez said production at the company has been paralyzed since midway through last year, when Venezuela’s president announced plans to nationalize it.
Chavez said he was also going to expropriate Venezuelan-owned Orinoco Iron and aluminum-maker Norpro de Venezuela C.A., which is an affiliate of the U.S. company Norpro in association with France’s Saint Gobain, among other companies.
As well, Venezuela will take over transport companies that ship raw materials in areas southeast of Caracas. He did not name the companies.
Since coming to power more than a decade ago, Chavez has nationalized major companies in the electricity, oil, steel and coffee sectors, as well as other private businesses.
Derivative securities are not inherently evil, though the media would have you think otherwise. It seems that any
type of investment that does not directly involve commodities is an easy target these days.
But derivatives are just another type of investment, those whose value is derived from some underlying security or asset or event. Insurance is a type of derivative investment, as a matter of fact. If the bad event happens (a car accident, flood, or fire, for example), then a claim is made against the policy. If not, the policy expires. The value of the policy is derived from the insured asset or event.
If derivatives are bad, then so too is insurance. If derivatives are bad, then so too are leases with the option to own. If derivatives are bad, then so too is the equity in any type of company, small or large, private or public, including those that produce real products and commodities, for stock is nothing more than an option to buy the underlying assets of the company for the price of the face value of its debt. If derivatives are bad, then so too are convertible securities and most every other type of financial innovation we’ve witnessed in the last 30 years, and for decades to come.
I’d love to engage in a discussion with you — and interested others — about the appropriate role of government in education.
The Federalist Papers made it clear, to me at least, that our founding fathers believed that the government, our federal government in particular, should have nothing to do with educating the populace.
I realize it sounds a bit radical now, but I believe that any discussion of what is right and wrong about public education today must begin with a healthy debate about whether the federal government should be involved in public education at all.
Just to try to help put stock market swings into perspective,consider this:
the 347.8 point fall in the Dow Jones Industrial Average last week, from 10868.12 at the start of the trading day on Thursday, May 6, 2010 to 10520.32 at the close of trading, can be COMPLETELY explained by an increase in the perceived cost of capital from 12% to 12.23%.
do the math. Using the constant dividend growth model, a very simplified model of the market value of equity, or Market Value = Current Dividend/(cost of equity capital – dividend growth rate), and assuming a long-term average cost of U.S. equity capital of 12% and average growth rate of 5%, we find that the opening level of 10868.12 = 760.77/(.12 -.05), and the closing level of 10520.32= 760.77/(.1223 -.05).
I think it is entirely possible that the chaos in Greece and surrounding nations, and the interconnections between worldwide supplies of liquidity and financial capital, that an increase in the perceived risk and uncertainty of the returns to equity from 12% per year to 12.23% per year makes perfect sense.
The market’s are working. Market participants, from the individual investor using on-line trading at 2:00 in the morning from their living room to the most sophisticated computerized large-scale institutional trader, understands that a borrower’s ability to pay back its investors depends on the real productivity and growth of private industry, whether the borrower is a company or a country.