Kaulapi World

Of all the candidates for president in 2012, the one I’m the most intrigued by is the congressman from TX, Ron Paul.  Following his breakout in the 2008 election cycle for the republican nomination served as an awakening of sorts for me, partly giving some substance to some of the economic and personal leanings that I’ve had for years, but more affirming my growing understanding that the 2-party system serves more to limit the quality of political debate and really serves to maintain the status quo.  The fact is that very few people actually fit neatly in the buckets of either party, the only way someone is a hardcore Dem or Repub is if they lack the intellectual curiosity to really consider and debate the issues.  I kind of liken it to being a sports fan, some people are loyal to their teams on the basis of living in a city, or going to a particular college, and they stick with them no matter how much the team might change, coaching, or style or quality of  play.  The problem is that while this is fine for sports, its a horrible method for electing candidates to office.  I remain very much a political independent, although I have my own leanings towards one party or the other, depending on the issues.

Just like the 2008 cycle, the constant mantra from all the main stream media outlets is that he is unelectable.  I find this very suspicious as to what exactly is electable nowadays anyway?  More importantly, shouldn’t the voters themselves decide what ideas and policies they would like to see in an elected official as opposed to the corporate media? BI had a good short post about the seemingly need to pander to electorate out there, telling them that everything will be fine if they just vote for him, that we can all just keep on buying overpriced homes, keep artificially propping up markets, and keep maintaining an empire overseas with no consequence.  This type of pandering also applies to the media when it comes to candidates running for office.

One of the ways the media discounts Paul’s support is to hold internet polls following the debates and then when he ends up winning them, they put an asterisk next to his name, citing that there were irregularities in the polling to make them unofficial or unscientific, sometimes they fail to mention him at all, skipping to the next candidate as the front runner.  Apparently one effort to suppress Ron Paul’s support in internet polls went a little too far, and now the commentary has had his amazon book list and facebook page overridden by pro-Paul posts and videos. One of the messages is very clear, if he is supposedly so “unelectable” then why the obvious efforts to censor and downplay him?  I’ve come to realize that often when it comes to official media and statistics, you have to consider the alternative message often behind the story, sometimes it is brutally obvious, as ZH offers, it is because he is very electable and is very much a threat.

In a year where there is even more talk of a 3rd party run which would shake things up a lot, I think folks should pay attention to Ron Paul.  Talking to pretty hard core Dem the other day he seemed pretty confident that a 3rd party run by Ron Paul would mean an automatic re-election for Obama, being that not too many Dems have much in common with libertarian thinking.  I can’t help but wonder if this person is too quick to judgment on this one, I’m pretty sure quite a few would seriously consider him as 3rd party candidate if they were to actually sit down and listen to what he has to say.

Took a family day trip just out of town, to a nearby farm that let’s people come by and pick their own produce, whatever is in season at the time. We started off with yellow peaches, moved on to tomatoes, and blackberries before our bin was full, when we got back to the store to pay for things, we realized what a great deal it was. That explained the large crowd, interestingly the parking lot was fill of a lot dc and va plates, most of the visitors were actually Hispanic and Asian, I saw at least a handful of diplomatic plates and luxury cars.

Just as we were wrapping up, a huge storm cloud blew in, dropped a swimming pool worth of water on the crowd. It was refreshing, being outside getting caught in the rain, the little guy seemed both puzzled and amazed at the sight of all that water coming down at once, I realized that this was his first time experiencing a thunderstorm outside.  A few kids and adults took to running around in the rain, being that they were already soaked after getting caught out in the fields and it didn’t make a difference if they got more drenched. Something very simple and cleansing about the rain coming down, sudden and unexpected, but fully welcome.

Driving back I reflected a bit on how different the landscape and way of life seemed just a short drive from dc, and all of the crap that comes with the territory of living and working in the district. I had actually bookmarked on my phone a thread to the straw poll taking place in Iowa that day for the republican nomination, thinking that I might want to check in on it. ended up having so much fun picking fruits that I forgot I even had a smartphone at all.

Coming up on more milestones in life, need to remind myself to fully appreciate how great things have turned out so far, despite the usual and unusual setbacks that are more just another part of life. Some can’t really be considered setbacks of they open up to new opportunities in life just waiting around the corner.

I came across this linked C-SPAN clip from one of the economic blogs that I’ve been reading since the great recession came to a head in late 2008 when everything and anything was seriously FUBAR when it came to the financial and politcal state of the country.  I remember appreciating the authors candor to how seriously fucked up things were at that time, and how the policy fixes being crafted at the time ran the risk of putting us in a situation where we would be seeing the same old shit again in just a few years time.

The clip itself features two distinguished senators from both sides of the the aisle actually debating  some of the more underlying, but arguably more meaningful aspects of the ongoing debt ceiling debate.  One of them has come up in past conversation with friendly D-bags over the years, mostly with scorn to his cost-cutting ways.  The other, was once a candidate for the presidency, who many voted for out of default, not out of any meaningful admiration or inspiration.

This clip which I’m sure won’t see the light of day on any major cable news network does raise the question to what is really going on in Washington DC these past few weeks.  Are we really talking about meaningful reductions in government spending or are we just hearing another episode of partisan political theater to prevent our elected officials from making the decisions that are too politically difficult to make?

Flashbacks to 2008, how many hill staffers were put in a hard place answering overwhelming public outcry something like 1000:1 against the bailout of wall street while knowing their respective member had already made up their mind to go along with the leadership?  How many of them have wised up to the reality of the power structures in this country today and how many are still living in fantasy land?  I’m pretty sure that in the next 48 hours there will be some deal to raise the debt ceiling, this current battle is more smoke and mirrors, I’m more concerned with what reality might be waiting for us around the corner, one that won’t give a shit if we  consider ourselves democrat or republican or independent.

Obviously I’ve been closely following the ongoing battle over the debt ceiling, being that both me and Hana are gainfully employed by Uncle Sam, the prospect of a loss of a paycheck due to a government shutdown is something that we both pay great attention to.  I have to admit it has become a little tiring though, both while working at the office and when teleworking, I have C-SPAN going on in the background listening to the floor debates in both houses.

My overall take on the whole mess is that we need to have a serious conversation about the future of the federal budget in terms of the big ticket spending items the biggest which are entitlements and military engagements, right now the discussion has gotten so polarized on partisan lines that it is impossible to even have a meaningful conversation as to what we policies and programs we want as a nation, what is the realistic cost of those things.  I’ve spoken with folks from both party affiliations, and it seems like all they can do is blindly spout the party line, often in rapid succession.  I wanted to ask them point blank if they even understood the position that they were advocating.

As fiercely independent minded as I am, I have to say that I am leaning slightly towards the position of spending cuts making the larger proportion of the deficit solution as opposed to revenue building.  This is despite the fact being that particular party spent the last 10 years piling on to the deficit like money was going out of style.  I still think in this situation spending cuts is the way to go over revenue building.  I liken it to how an average family might deal with the prospect of hitting their limit of their credit card or general line of credit.  The most logical thing to do is to decrease spending relative to the proximity to the credit limit, if it is a few months expenses away, then maybe you spread the cuts over several months, but if you’re right up on it, then immediate cuts in spending are in order.

In contrast, the building revenue side for the typical family would be amounting to the family to just make more money.  It is important to note that longer term revenue sources would be most helpful, not merely selling some household items, or by simply working longer hours, both of which are either one-time, or temporary increases in income.  A more basic definition of revenue increases to what governments think of in terms of raising taxes when it comes to the average family is to go across the street and rob the house of the richer, more affluent neighbors.   Even if this was a widely accepted solution, it would be temporary, because eventually the rich neighbor might move out of the neighborhood.

Someone I recently spoke with seemed totally uninterested in the prospect of an actual default, or credible threat of default.  Their perspective was that congress would pass something at the last minute possibly, and it would be back to business as usual.  I find it hard to tell if people who hold that opinion are either wiser than me to the nature of DC politics, or just have their head in the sand.  It seems like a lot of crazy shit is going on right now not only at home, but around the world to be that oblivious.  To me, at the very least it would be helpful to take a moment to look around and get somewhat ready in case the shit really does hit the fan.

April is here, and the most recent CR is about a week away from expiring. The current one being about 2 weeks old, which was passed in the last 24 hours before the deadline. I’ve been tracking the developments both from official and unofficial sources which has convinced me to prepare the family for a number of scenarios. Looking at various account balances and lining them up in case we have to draw down to take care of expenses without income, be it days, weeks, months, or years.

The latest budget battle is over a very small fraction of the total budget, but it contains a lot of political capital for the players. Federal employees have gotten a lot of flack, much of which is misdirected given the ridiculous amounts of money being spent elsewhere. We’ve already been affected by a freeze on COLA increases, and all hiring and promotional opportunities have been halted due to the budget uncertainty. Every other day I see a new article about proposed legislation to further limit federal retirement benefits, or some other plan to shrink the size of government. Some of these things I can’t disagree with on principle, given that Ive seen my share of waste, fraud and abuse in the federal government, but I can’t take anybody seriously who conveniently ignores the cost of our entitlement, defense, and bailout spending.

I read an op-ed recently that asserted a running a government by CR with the constant treat of a shutdown really is a failure to legislate. It symbolizes that those who were in power before are not willing to recognize the results of elections, and to the most part, the collective voice of the people through their representatives. This failure should be noted to all sitting members, regardless of party affiliation. I remember late in 2010 when the new vocal freshman class was voted in, there was a last minute push to get a massive omnibus budget passed, a strategy that I seriously questioned at the time. Of course it failed, the then minority clearly empowered by the election results, looking forward to the new majority status after the lame duck session. One thing I have learned is that you never underestimate ones adversary, especially when they just achieved the ability to strike back.

There are at least three more battles that are looming: on April 8th, the current CR expires, and without another CR, or a full budget for the remaining 6 months of the 2011 fiscal year, the government shuts down. Then around April 15, there will need to be a vote to increase the federal debt limit. Then later on in the summer, the 2012 budget. If the past 6 months have been any indication of how the congress is going to work on funding matters, then we’re in for another year of uncertainty.

Earlier this week the president announced a 2-year freeze in pay for federal employees, a move that has stirred up quite a bit of discussion, from the rapid approval of recently elected tea party candidates and other republicans who are suddenly fiscal conservatives, to the ire of federal employee unions and big government democrats.

However after the dust settled, and people started digging into the details of the plan, it became apparent that this is not much more than a symbolic gesture at trying to address the budget deficit, and actually may be a very bad policy move for Obama, as well as anyone who is expecting the economic recovery to continue along.

First not what the pay freeze is, but what it isn’t, in other words, what positions/agencies are exempt from the freeze: Lets start with the military, judiciary and the entire legislative branch, including congressional members and their staffs, partly due to the separation of powers, as the president has power over the executive branch only. The freeze also does not count for what is known as step increases and grade increases, which is when an employee is given a raise due to completing years of federal service, or applying for a position with more responsibility, which is for all respective purposes is meets the conventional definition of a “raise” in itself.

Then there are the overall budget implications that the pay freeze has in the aggregate, I’ve read anywhere between $28B to $30B over the next 5 years, meaning about $4B tops for 2010. All it takes is to google the amount of total expenses and outlays for the federal government to see that this is peanuts to the total. The big pieces of the pie are in entitlement spending, social security, medicare, public assistance programs.

I suppose a more meaningful cut might be to cut federal salaries or the workforce. This is worth discussing, but like everything else, where to cut, and more importantly, what is the most politically acceptable area to cut? FBI agents? Agriculture and food safety inspectors? The diplomatic corps? USAID? enlisted military members? How about at the banking and financial regulators? Judgment calls all around, but without taking a partisan angle on where I personally think we should cut, I’ll say that over the past few years I’ve seen my own share of waste, fraud and abuse.

The economic argument that this will result in an anti-stimulus is the one that I’m most interested in considering. Because the cuts are coming from reducing salaries for as much as 15% of active participants in the real economy, this will have a counter effect of the recent stimulus efforts made by the current administration. And its not just the $28B-$30 of lost consumer spending, but since we’re talking about anticipated salaries going forward, there will be a collateral effect among some federal employees to delay large purchases, decrease consumption, and build cash reserves. In such a consumption based economy, this is by definition an anti-stimulus.

Brief disclosure: I currently work for Uncle Sam, although my salary, even including liberal interpretation of non-salaried benefits puts me several tens of thousands below the numbers I’ve seen thrown around recently as an “average” federal salary. I also started working in the public sector way back when it was considered foolish to take a pay cut over more lucrative positions in the private sector.

Gotta love capitalism, especially gray and black markets.  Of course I’m referring to the underground market that has sprung up, mostly online for tickets to witness history in the making, the for the inauguration Barack Obama.  Craigslist is pretty busy with people with all kinds of tickets for sale, scalpers lucky enough to get their hands on some tickets will make a decent amount of change.  The prices themselves range from $100, $250 for seats along the ticketed mall viewing area, $500 for the standing area, and as much as $3500 for seated tickets.  That’s a hefty chunk of change for being a witness to history.

But what are the tickets really worth?  On the demand side there are ample numbers of potential buyers that price being part of this event as very high, in the hundreds and thousands of dollars.  Also driving the demand side is the emotional stakes that are attached to this event, I notice often that discussion goes from being a “witness” to history as to “being a part” of history.  For the faithful, saying that they were in the crowd on a cold January morning is in itself a priceless experience for which no price is too high.  On the supply side, there are a limited, finite number of tickets in various levels of grading, that is closer to the steps of the capitol.  Also these tickets are not for sale, they are in available only through the congressional offices, which each member having the full discretion to allocate them in the way that he or she sees fit.  All of these factors have all the makings of an interesting economic case study of price discrimination.

The disconnect between the relative value of the good is easily exploited by potential buyers coming from out of town that have never seen the capitol, the national mall, or the distances that are involved.  This also goes to the disconnect that people place on the value of the tickets themselves, to a certain extent, the value is more to the allure of them being a hard to come by commodity, and a symbol of the ticket holder’s savvy or connection to some high political office.  Maybe its that ultimately like any other material good, there is a certain amount of value associated with social status symbols.  That is people want to feel that they are special or elite through what they have.  Another disconnect are those that have never attended an inauguration in person either, so they don’t have any experience to gauge an appropriate price.  I really hope that in trying to get tickets, people would just calm down and save their money, especially in these tough economic times.

I went to the 2005 inauguration, and remember how far away the seats were from the actual podium, I ended up watching the whole thing on the jumbotron.  Of course I wasn’t too thrilled at the time about the results of the election, but I was more or less interested in just going for the sake of going.  This time around I’m happier about the overall results, I’m not as sold yet on the bigger picture and long term direction that the new administration is proposing.  But its still a big event, and I’m still intrigued that I’ll be in town to witness the event.  As for me, I think I’ll stick to some taking some pictures of the crowd, and collecting some commemorative metro tickets instead.  Maybe buy a T-shirt.

As I had in my gut, Obama wins by a landslide, almost 2:1 on the electoral college votes. With the Dems picking up additional seats in the Senate and House, it ended up being a sweep on almost all fronts. With a few senate races still being decided, it looks like the Dems are also close to a 60 member cloture AKA filibuster-proof majority in the Senate. Even if they come short, I’m pretty sure that at least a handful of Republican senators would be willing to go along with a very popular president Obama and cross the aisle in the spirit of bipartisanship.

That last one would be the ultimate test, could and would a man elected to a position of great power be willing to give up some of that power that was unjustly given to him by his predecessor, or will he want more? The racial identity and symbolism that he has assumed, combined with an utter disgust for the republican party and the outgoing president has given Obama potential dictatorial powers over America. Time will tell which path he will choose.

Eve of the election, thought I’d comment on who I decided to vote for this time around. I’ve decided to cast a vote for Ralph Nader in 2008. I go back to my key points that I had coming into this election cycle. I could only support a candidate that would get us out of the middle east, would restore our civil liberties lost over the past decade, and would offer a realistic spending plan on entitlements and federal expenditure. For the most part Nader’s positions on the issues is the closest to these points than any other candidate currently on the ballot. As a lifelong consumer advocate and unabashed critic of political corruption, he seems like the best candidate for the job of president of the United States.

This time around I can say that I was intrigued by Obama and kept it open until the very end. For now I can say that I’ll consider voting him for re-election in 2012. I was very impressed with him when he gave the keynote speech at the DNC in 2004 I had hoped that he would run one day, after he had gotten at least one Senate term under his belt. My concern, especially with the current state of the economy is that he’ll be a one term president. The cult of personality that he has run on and created for himself will backfire when the American people realize that he isn’t able to deliver on half as many of his promises, either because of his inexperience, or because simply that America is going broke. I think this country is ready for a change of course, the question is which candidate would offer a genuine change of course. This time around I think its Ralph Nader.

More turmoil in the markets, it’s becoming like a bad dream, the US market takes a hit, and then at 9:00pm the Asian markets take a hit, and then the European markets take a hit in time for the US again. Something like 21% drop in the DOW over the last 10 days, despite the talk of this not being a crash, it’s looking pretty ugly.

All of this has been a big distraction from the election, especially since it seems like neither leading candidates are offering anything by means of a realistic solution. I suspect that neither of their campaigns anticipated any of this to blow up in their faces, especially not right before November. I still maintain that some understanding of finances and economics should be a quality that we look for in a presidential candidate. Whoever wins will have his work cut out for him, that’s for sure.