http://mjperry.blogspot.com/2008/11/markets-in-everything-curvy-cucumbers.html

Dr. Perry's article about the EU regulations will crack up even the most liberal dem.

Global warming: We need to stop covering our ears and ignoring scientists.  Yes, quite possible we’re in a period of global cooling until 2015 and maybe some indicators (certain satellites) have not supplied evidence for global warming…yet.  However the public not only has accepted global warming but most want the government to do something about it.  Going against academics/science is not going to help us make any inroads with moderates and educated conservatives who would rather vote for pragmatists like Obama than dinosaurs like say 2008 Palin (she still could see the light).  I agree with the Mankiw approach of applying Pigouvian taxes to carbon and other chemical/atomic/molecular offenders.  We can use the income from the global warming tax to apply more individual tax cuts and corporate tax cuts.  You want taxes that provide good incentives such as reduction of pollution, not negative incentives such as on hard work via income tax.  Now I believe an unintended consequence of this act will be an increase in green technology.  This technology might be applied to the rest of the private sector to make us more efficient.  And you never know how technology impacts other sectors – one man’s worthless piece of inventive junk might revolutionize another industry.  We need to educate people on why higher gas prices aren’t such a bad thing.  They pay a higher cost on gas but if we reduce corporate income tax they will receive some of the $3,200 dollars they pay a year in CIT (that they never see).  Idea #4 is going to be educate the public on economics.  Part of this plan involves #4.  Idea #3 is energy policy.  Idea #3 next.

http://news.yahoo.com/s/ap/20081109/ap_on_el_pr/obama

Drilling is now to be reversed.  Great strategy.  Lower gas and energy prices by limiting the supply!  And... when oil goes up and the dollar goes down what happens to our stock market?  Company profits? etc etc.  Negative results from a bad business strategy (the business of running the country).  Look I support a Pigouvian carbon tax but... limiting supply is a seperate issue.

BTW this is quite a crafty political move for the O-man because oil prices will rise on supply concerns during Bush's term not his.

From my class notes in Computers 1305... by notes I mean I was talking to my buddy Juan.  Juan is a brilliant republican but didn't quite understand the Credit Default Swap system that imo required the bailout.  I told him our corporate infrastructure was set up like dominoes in a line.  If one fell they very well all could/would fail.  Not necessarily for actual losses either more likely for accounting losses and write downs.  See Businomics for a good understanding of it.  After you read his then you can read mine.  Or you can just read mine and if it doesn't make a whole lot of sense read his and come back.  http://businomics.typepad.com/     http://businomics.typepad.com/businomics_blog/2008/11/credit-default-swaps-what-went-wrong-with-cds.html     http://businomics.typepad.com/businomics_blog/2008/11/credit-default-swaps-a-simple-explanation-of-cds.html 

OK so with the CDS’s… and why I think you needed to bail out money: The reason I said dominoes is this: CDS are third parties… but since almost every major financial and non financial institution engaged in CDS’s then it was a systemic risk.  Basically a CDS was just a bet if someone could pay their debt.  If they are in debt 40-1 because of leverage and investments not working out in the medium run then this gets to be disastrous… for example General Motors AC acted as a third party and got into the CDS market.  Because CDS’s are priced by what the market is trading them for if the market suddenly stops trading them or trades them for a low amount than even though you might not have to pay the other parties debt because your bet failed you STILL have to put up collateral capital (Switch order) to satisfy the lower value (on your books) of the CDS.  Since the CDS’s were systemic and everyone was a third party to everyone if someone fell than two things happen: Third party CDS holders now have to pay the debt of the bankrupt corporation, 2) the CDS values of everyone get lower and in particular the CDS values of the companies who just had to pay the debt of the bankrupt companies.  See how this will be a negative destructive cycle?  Because of consequences 1 and 2 that the market and accounting requires more companies will go bankrupt!  It’s like dominoes.

Here is how we win in the future: Take Reagan’s ideals and values and apply them to today.  Reagan basically borrowed his philosophy from Milton Friedman, the U Chicago economist.  What we need to do is take the same principles that succeeded and will succeed in the long term and make a new plan for America.

1)      Fixing income inequality and median wage stagnation.  Look there will always be inequality in a society.  And high income inequality doesn’t mean that people aren’t all well off.  Think about it this way… if you have a society in which nine people make $50,000 each and one person makes $1,000,000,000 you have high income inequality but yet everyone is well off.  Keep something in mind... The rich guy is not rich because the middle class are less well off and the middle class citizens are not middle class because the rich guy is rich. In America the median income is relatively stagnant… meanwhile the median household income in 2007 was $50,233.00.  That’s not exactly terrible but it isn’t enough to pay for everything you and your family need without going into considerable debt.  If you’re in major debt how can you adequately save?  So how do we do better without redistribution of the wealth?  We need to get to the heart of this dilemma.  We need major educational reform in this country.  This is where we need to start.  I’ll continue later.

 

Yesterday, Americans across the nation voiced their opinion about the state of our Union and the direction we should be headed in record numbers.  In a competition where one candidate is a true American Hero, and the other candidate is a posterboy for the American Dream, there really are no losers.  Although my heart breaks that I will not get to witness a McCain presidency, and I am deeply saddened to see someone so deserving of the presidency be pushed aside, I am also proud of America for overcoming some of the racial and social barriers that have limited and divided our country for far too many years. 

So now is the time to swallow hard, then take one step forward.  We must leave this long, hard-fought battle behind us and approach tomorrow with the loyalty and support that our presidency deserves.  I refuse to repeat the sins of elections past with the snotty, divisive, and contemptuous bitterness that only serves to further fracture our already splintered society.  So, I face tomorrow with a quiet resolve that, although John McCain was my candidate, Barack Obama is my president, and I will do everything I can to make the next four years a success, for all of America - the red and the blue.

I encourage all of you to get involved with your respective parties, and reach out to your state and national representatives to communicate what matters most to you.  We are not required to merely choose from two parties that loosely represent our values - we are obligated to communicate those values so that they may help our government work better.  Democracy means more than casting a vote every couple of years - it means shaping our government to represent the values of its people. And that responsibility, my friends, sits squarely on the shoulders of each and every one of us.

Called Chicago boys: check out their article on Obama http://chicagoboyz.net/archives/6380.html  Basically it shows his policies in action via examples of past failures.  I'm sure you investors know this but for y'all not familiar with this concept: the investing technology out there lets you check retroactively test your strategy.  Consider this blog a retroactive test of Obama's policies.  He fails.  The economist endorsed Obama - I think most economists are making a mistake.  Yes McCain's economic plans are way too deficit heavy but socialism-lite is not the answer.  Plus think of it this way: McCain isn't going to get to enact his policies - he is the check and balance.  I think he will keep the dems honest which will keep us more efficient than a submissive Obama.

From the WSJ: http://online.wsj.com/article/SB122541609109386729.html 

 

In this fall's first presidential debate, Barack Obama analyzed the causes of the credit meltdown. "Now, we also have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain, a theory that basically says that we can shred regulations and consumer protections and give more and more to the most, and somehow prosperity will trickle down."

In the second debate, Mr. Obama offered a similarly vague diagnosis: "I believe this is a final verdict on the failed economic policies of the last eight years . . . that essentially said that we should strip away regulations, consumer protections, let the market run wild, and prosperity would rain down on all of us."

Could Mr. Obama really believe that the era of Sarbanes-Oxley was about letting "the market run wild"?

One had to look far and wide in the spring of 2002 to find anyone who thought the Sarbanes-Oxley law was an experiment in cowboy capitalism. For example, on its front page of April 25, 2002, the New York Times reported: "House and Senate negotiators agreed . . . on a broad overhaul of corporate fraud, accounting and securities laws aimed at curbing the rampant abuses that have shaken Wall Street . . . Some lawmakers called it the most sweeping securities legislation since the 1930s." The Times added that "business and accounting industry lobbyists had tried in recent days to soften the measure, but they got nowhere."

Of course, in the years since this sweeping securities legislation was enacted, its costs -- borne by public companies, and therefore by investors -- have been many times official estimates. And with the benefit of time, even liberal Democrats such as New York Sen. Charles Schumer came to realize that the regulatory monster created by Sarbanes-Oxley had to be tamed.

Mr. Schumer was so concerned about the migration of business from Wall Street to London, Hong Kong and even Dubai that he joined New York City Mayor Michael Bloomberg in commissioning a study of the problem and potential solutions. When the study was released in January 2007, Messrs. Schumer and Bloomberg wrote in an accompanying note that "our regulatory framework is a thicket of complicated rules." They warned that without reform, "we will no longer be the financial capital of the world."

As heavy as was Washington's hand upon the financial markets beginning in year two of the Bush era, New York Attorney General Eliot Spitzer may have imposed even greater costs on Wall Street. Dusting off the 1921 Martin Act -- an antifraud statute so broad that it does not even require prosecutors to demonstrate criminal intent -- Mr. Spitzer forced a series of costly settlements that made Wall Street's traditional business of underwriting stock offerings much less profitable.

The excesses Mr. Spitzer sought to prevent were clear at the time; only later did the collateral damage to America's markets become manifest, as New York lost business to London and elsewhere.

In a 2004 Slate column, Daniel Gross described the initial impact when Mr. Spitzer targeted the insurance industry. "In response, the stocks of the biggest players implicated, Marsh & McLennan and AIG, have tanked, losing a combined $38 billion in market capitalization. More alarming for the insurers, Spitzer signaled this was just the beginning of an industry-wide investigation. For when he finds a few bad eggs, Eliot Spitzer cleans out the entire coop and changes the way it is run, as Wall Street's investment banks and mutual funds have learned to their dismay."

Mr. Spitzer would ultimately drive the CEOs of both Marsh and McLennan and AIG from office, with disastrous consequences for shareholders. In the case of AIG, the staggering extent of the disaster has lately been revealed.

The combination of Mr. Bush's enactment of Sarbanes-Oxley and Mr. Spitzer's Wall Street prosecutions contributed to America's significant market-share loss of initial public offerings -- and the U.S. is yet to return to pre-Bush levels. While government reduced the profit-making potential in Wall Street's traditional bread-and-butter business, it was simultaneously encouraging investment in the housing sector. Neither activity constituted deregulation.

Perhaps Mr. Obama is looking beyond the financial markets and taking a broad view of the economy in concluding that Mr. Bush was a deregulator. If so, it's hard to find evidence to support this conclusion.

Wayne Crews of the Competitive Enterprise Institute tracks regulation across the entire federal government. He reports that the Bush administration set an all-time record in 2004, when it published more than 75,000 pages of proposed and enacted rules in the Federal Register.

Leftists might assume that many of these rules were actually watering down earlier standards -- but where's the evidence of declining compliance costs? Lafayette College economist Mark Crain estimates more than $1.1 trillion in federal regulatory costs for 2004, up an inflation-adjusted 16% from 2000. Overall agency enforcement budgets have increased each year since 2004.

A recent report, "Regulatory Agency Spending Reaches New Height," from Washington University's Weidenbaum Center puts Mr. Bush's regulatory activity in historical context. Co-authors Veronique de Rugy and Melinda Warren say that when it comes to spending on regulatory agencies, our current president is almost in a class by himself, with an increase of almost 68% during his two terms. In constant dollars the Bush regulatory budget increases vastly exceed those of predecessors Clinton, Bush, Reagan, Carter, Nixon and, yes, Lyndon Johnson.

Looking at regulatory spending in percentage terms, Mr. Bush's staggering 2003 increase of more than 24% was the largest in the last 50 years. If Mr. Obama considers this a record of deregulation -- and if current polls hold -- America's economy could be in for a very long four years.

Mr. Freeman is assistant editor of the Journal's editorial page.

But I do love this old NYT article I found from him http://www.nytimes.com/2007/11/04/business/04view.html?_r=1&partner=permalink&exprod=permalink&oref=slogin