• Reduce corporate and personal taxes,
• Pay off debt with drastically slashed spending, excluding the military and law enforcement,
• Stop Social Security,
• Privatize Medicare,
• Stop paying unemployment benefits to force people into work situations,
• Stop welfare and food stamps,
• Eliminate the minimum wage, civil rights, and fair housing laws,
• Eliminate gun laws,
• Prevent gays and lesbians,
• Prevent same-sex couples from adopting,
• Return medical abortion to criminal organizations.
• Prevent unions,
• Militarize the southern border states,
• Build a wall along our borders,
• Incarcerate & expel illegal immigrants,
• Repeal the 14th Amendment (Citizenship Clause),
• Continue expanding the War on Drugs,
• Reduce government regulations governing business activities,
• Allow Christian prayers, statues, plaques, and proselytizing anywhere,
• Reduce enforcement of the separation of church and state,
• Prevent Muslims from congregating on hallowed ground,
• Close public schools,
• Close down the Federal Reserve,
• Close Fanny & Freddie,
• Reduce the ability of the Census Bureau to collect information,
• Repeal the Finance Reform Bill,
• Repeal the Health Insurance Reform Bill,
• Eliminate the Departments of Education and Energy,
• Repeal the 17th Amendment (direct election of senators),
• Pull out of the United Nations,
• Repeal the progressive income tax,
• Secede from the union, armed as necessary.

On Facebook, Ed Lowry Posted: A Closer Look at the Bush Tax Cuts | The Big Picture

Sumner:

Those reddogs are amazing prestidigitators, aren’t they? The fact that they can get the union want-to-be-rich guys to swallow their semen and then vote for them.

Sandy:

Well we certainly wouldn’t want to veer from Hussein’ overused ‘blame the other guy” mantra. Can we say TOO MUCH SPENDING just might have contributed to the deficit?

Sumner:

Sandy – It’s no secret, the deficit was already exploding when the sand blew away from the foundation of “The Great Squandering” years.

Spending? Yes! That’s the issue! Two senseless discretionary military expeditions, a massive make-work ramp-up of redundant intelligence and security apparatuses, seemingly limitless purchases of shiny plastic consumer crap from China, two false trickle-down tax cuts targeted specifically to the rich and powerful, a musical chair real estate Ponzi wealth development scheme, and a mantric belief that unrestrained financial markets would control themselves.

That’s all before we even heard about BHO. We’re lucky we even survived the decade of Great Squandering.

Me:

Is there some distance at which helicopter use switches from irrational to reasonable in metropolitan Wash DC? They neglect to provide an estimate of the value of the President’s time, compared with the value of the helicopter’s time versus driving. Plus the Secret Service risks and associated costs. Note that when the President drives anywhere, all the streets are shut down, and people wait.

This is the United States of America, the strongest nation in the world. As with complaints of the First Lady’s trips and associated expenditures, all I can add is: Do we want our White House residents locked inside eating SpagettiOs?

Sandy:

Of course they needn’t be locked inside that huge mansion…..but come on Sumner. The issue isn’t really the use of a half dozen choppers or DC turmoil, but it CERTAINLY isn’t over the value of his time. Hussein and spouse have taken more ‘down time’ and vacations in less than two years……than either of the previous two Pres’ did in their 8. Can we say “not in touch” with the rest of the country?

Me:

I believe the statistic is that GWB spent 1/3 of his tenure on vacation. I’m not sure I have seen any statistics on the former Iraqi dictator’s vacation habits, but you could be right. Citations are always useful as aged memories become colored.

Quoted from here dated July 16, 2010:

According to a tally kept by Mark Knoller, a CBS News reporter long recognized by the White House as authoritative on such matters, Obama has spent all or part of 65 days on vacation, including days at Camp David. At this point in his tenure, George W. Bush had spent 120 days. That included 13 trips to his Texas ranch.

Me:

Or there’s this one that points out that GWB spent 487 days at Camp David and 490 days at the Crawford ranch, which as I said, works out to about 1/3 of his tenure. Good gig during 2 wars and an economic bubble/meltdown, right?

Me:

And in order for you to more effectively second guess the military’s assessment of necessary equipment and security risks, check this out.

Obviously there’s some Photoshop work involved to get the most out of each image. The slideshow is powered by Slideshow Pro, which I use in many of my sites. Although the Slideshow Pro projector is Flash based, an upcoming revision will include support for HTML 5 and non-Flash capable mobile devices (read Apple).

In addition to this posting, the site can be linked to directly at http://scarycloud.com, or under “My Other Sites” here on the Skeptical Humorist site.

It’s hard to understand why people think a Presidential election can flip a switch on the direction of such a large diversified economy in a global marketplace. It’s a popular complaint however. It strikes me as pretend ignorance.

Steven

It’s not hard! People have been conditioned to believe that one person can turn around 8 years of multi-layered neglect. They’ve been partially conditioned by that person himself! It’s an impossible task, but the only thing that gets voters into booths. Sad but true. We’re on the Titanic that people expect to turn like a speedboat. We all know how that turned out.

Me

Hey, I’ve got an idea. Let’s create a real-estate Ponzi scheme and get the whole world to ante up. Then we can create millions of real estate agent, mortgage broker/packager, and financial whiz-kid jobs. They won’t form one of those evil unions. Plus, all the real estate owners will love it because they’ll think that they’re rich.

Then we can initiate a couple more discretionary military expeditions underneath a patriotic flag. Those employ lots of folks. Nobody’s going to argue with spending China’s borrowed money to live safe under the flag.

And then we can further explode spending and hiring in the industries that are shrouded by security clearances. That’s an easy one, because nobody on the outside can find any information about it, and nobody on the inside can say anything about it. It’s the perfect solution.

Voila! “Boy, we’ve got ourselves a convoy!”

Steven

No, no. That would never work. Some government watchdog agency would surely put the cabosh on a plan like this. They are incorruptible and have razor sharp eyes for chicanery of this kind. I’m shocked you’d even propose such nonsense.

It should be illegal to run the Federal Budget at a deficit.

Me:

Although they may exist, I am not familiar with one economist who would agree with you. At a minimum, it goes back to the idea that “the Constitution is not a suicide pact“.

James:

You should read Henry Hazlitt.

Rik:

More important than that, we all need to read the “Federalist Papers“.

Me:

I know Hayek’s writings, but not Hazlitt. I see they are birds-of-a-feather. But I’m not aware that intolerance of budget deficit is their economic foundation.

Still, should it have been illegal to prosecute World War II except with the proceeds from a budget surplus? Allow the Axis Powers win unless we can tax and save enough? Of course not. The Constitution is not a suicide pact.

Likewise, as a country would we let millions of citizens starve during some unusual event because it might require running a deficit? Of course not. It would show us to be morally bankrupt, plus instigate an idiotic revolution.

However, I am certainly in agreement that discretionary expeditions such as Iraq and Afghanistan should have been paid for with current receipts. Borrowing for that and other post-911 security foolishness has been a dealmaker’s playground, exceptionally benefiting the plutocracy.

Here’s a dialog about the state of banking, lending, and business. Built from a Facebook post and comments.

Ed Lowry:

I was fortunate enough to purchase a copy of the Financial Times this morning. To my amazement I read about banks not lending to small business: http://bit.ly/9lofzr. If the bank does lend to SB it’s at a rate 3.5% higher than the fed fund rate.

The article continues with standard language, but I’m wondering:

We (the taxpayers) bailed out the banking industry. The Fed lowered the rate at the window so as to increase lending. Banks are using the Fed borrowings to boost balance sheets.

Given that the Fed rate is zero (or less in real terms), essentially emergency rates, and the banks aren’t lending, the bank shows more cash on hand, more liquidity, and therefore better balance sheet and higher stock price.

From my small knowledge base it would appear the banks are once again “disadvantaging” the average Joe and stifling innovation, entrepreneurship and small business, yet raking in usury rates when they do lend and receiving adventageous tax breaks.

What part of the invisible hand is invisible?

Me:

First of all:
When we bought the Honda/Kasasaki dealership in 1982, we borrowed high six-figures at 19.5% backed by 150% collateral pledged by the personal guarantees of every relative we could threaten. I would suspect that kind of deal is still available, if only one can find enough relatives to threaten.

I see several reasons the financial industry is not lending very readily:

1. If their accounting were truthful, bank reserve requirements, even under the old liberal go-go period reserve rules, are probably substantially above current available cash reserves. So the banks are trying to hoard cash before they get called out on hiding debt, like BofA did last week. That is one of the main problems the Fed has been trying to address with its cheap lending; to keep banks out of technical default.
2. Commercial property defaults continue to increase. Retail mortgage defaults are growing in the upper loan size brackets. I haven’t seen any statistics on small business defaults, strangely, but defaults must also be increasing. Turnaround predictions are only blind speculation.
3. The loan packaging industry has lost credibility and is barely functioning. Loan originators must consider holding and then collecting on their loans. They hate that.
4. There is no spark for employment growth yet, so money velocity is vastly slowed down. There is also no obvious asset-bubble replacement for our recent real estate, war, or Internet experiences. Maybe it’ll be individual weapons, like some hope.
5. Given this economic environment, what business could possibly present a business plan that would be worth the paper that it’s written on? What’s the economy going to be like one to three years from now? What wild-ass-guesses are in the business plan to make it seem to work?
6. For November election purposes, everybody seems content to stand around with their hands in their pockets, pretending to wait for a government magic policy wand-waving.

Jo Keeler

“And now for something completely different . . ”

Disclaimer – I’ve been a banker for 30+ years

1. The Fed lowered the overnight rate for 2 reasons – To incent 1)individuals/businesses to access capital to to invest in projects/buy things; 2)to steepen the yield curve so that banks can borrow short (overnight) and invest in Treasuries or the like with longer maturities (3 years or so) and earn the spread risk free. “Surfing the curve” allows the industry to earn back the capital that is charged off in the form of loan losses from bad loans. Banks can generate about 2%/year doing this and given the reequirement to hold 8-10% capital bases – well you can do that math.

Contrary to populist thought, banks do want to lend – it’s the way shareholders in banks earn a return. In this cycle there are two issues at work. (I’m referring to businesses here). First, the recovery is so tepid that businesses that have survived have no motivation to expand their operations, and therefore have no need to borrow, yet. It’s reported to be harder to get a loan. It is harder because those who want/need to borrow are more or less those who are just hanging on. So if banks lend to that population, more losses follow. Corporate america has never held as much cash on balance sheets as they do now.

Another reason it’s harder to get a loan, is that bankers generally know, as is pointed out that the commercial real estate industry is just now showing the stress that rippled through the residential markets in 08-09. And banks, especially smaller regional and community banks are full of commercial real estate. If bankers know more losses are coming, the logical thing to do is husband your capital (see my point 1 above) – take a smaller net spread and take no risk while replenishing lost capital.

Your point #2 is spot on.

Your point 3 is spot on. The implication here is that if lenders can’t sell the paper, they will be plenty more careful around who they extend credit to, if their source of return is the interest and recouping the actual principal, as opposed to packageing it and making fees by playing musical chairs. The implication is that easy credit is over. You can’t have your cake and eat it too. The easy credit days that allowed deadbeats to speculate – driving an economic boom/bubble are over. Slow, anemic growth ahead becuase job growth is the only driver to regaining general prosperity. The boom/bubble of the past 18 years (yes, since about 1992!) has masked the loss of real (non-boom related) job growth.

As distasteful as it seems to the Nancy Pelosi crowd, the tax increases looming this year are, I think, the coup de grace. The last time massive tax increases were instituted in the face of a meager recovery was 1937. How’d that work out? Not too well. It took WW II to pull out of the nose dive.

The banks have paid back the govt bailouts, for the most part. So while I personally think the weak should have been allowed to fail, the bail-out was the best investment the tax payer ever made, as far as it is measured on a cash return basis. Not so for the bail-out money to GM and Chrysler. That’s money gone forever. No return.

The (banking) industry has been pilloried, maybe justly, maybe not. But at the end of the day, it’s not that banks don’t want to lend. It’s more of the old addage that thoose who demonstrate good credit risk don’t need/want the debt (at any price), and those that do, are pretty saky risks. All general statement, but directionally correct.

So how to get the economic engine re-started without job growth?

Originally we went there with a few hundred super-cool operatives to take out a couple of trailer parks manned by the usual bottom quartile of Arab engineering students.

That victory was mostly attained within a matter of days. One unfortunate detail was the failure to capture the Tall Guy. That was flumoxed so incompetently as to appear to be on purpose. Maybe he’s better served as a myth on the loose?

Once the glory of seizing Afghanistan proved to be so simple, and since we already had lots of men and equipment on the move, The Masters said; “Hey let’s not let an opportunity pass us by! The national psyche is primed for war. Let’s take out Sadam!”

Thus began the professions of “I am a War President.”

So they put Afghanistan on “minimum maintenance life-support” and transitioned national excitement to the fear of an Iraqi “mushroom cloud.”

Afghanistan became “the forgotton war”, and as such, no definitive description of victory was established, nor required. It was allowed to become a “Lost Expedition”, with drifting expectations and justifications for continued occupation, all of which were largely unexamined by the national attention. Plus of course, the Afghanis had their own agenda.

Once we activate any military action there are three naturally occuring corollary forces:

1. When Americans begin dying, we can’t let them be considered to have died in vain. We need to justify and avenge those deaths. This is a military conundrum.
2. The Military-Industrial Complex that feeds the operation takes on a profit and employment momentum which seeks all opportunities to continue regardless of reason. The preponderance of war profiteers is Republican, so this is a Republican conundrum.
3. Unless “Victory!” is clearly defined, it will become a media/political screaming match to define it. In the case of Afghanistan, as with Vietnam, the Democrats cannot accept an additional “Weak On National Defense” merit badge that they would receive if they initiated a pullout of Afghanistan with anything less than “Victory!”. This is a Democratic conundrum.

There are some mineral spoils in Afghanistan, as there are some petroleum spoils in Iraq. It would be a shame if either of these expeditions were proven to be based on commodity colonization.

So we are still there fighting the 14th Century in a Sisyphian task of modernizing a culture, a politics, and an economy. Nobody has been able to bridge the political gap between a nationally acceptable “Victory!” and a more modest realistic appraisal of what can or should cost-effectively be done. In most historical cases this is only accomplished in a state of complete exhaustion. Our domestic economy may provide us that catalyst.

Dave’s has wireless Internet, but it requires a password. That’s great! All viable establishments will have wireless connections very shortly.

I ask the bartenderess about the password, and she says, “One moment.” She comes back with like a little check printed out in faint blue ink, especially for me. It’s got a Usename of “rz7jbt5d” and a Password of “8zsxwn5v”, I think. It’s almost impossibly tiny, faint, and water-spotted to read.

Hey, I have old eyes! I’ve had one beer. This is a dimly lit bar as you might guess. I’ve struggled to enter this high-security code into my iPhone twice, resulting in “Entry Error”.

Is this a tavern or The Pentagon? What is wrong with this design picture? Who are the people who actually get connected to wireless at Dave’s?

===>> Spies?

Around here, the 3rd and the 5th of July are exactly like the 4th of July. Every now and again I’ve received email from friends, and being from non-military backgrounds they make some interesting statements like, “I hope you have a great 4th!”, or “Are you guys going to have a big parade, a cook out, and fireworks?”

Him:

Not the most penetrating analysis, but the essence of the folly is captured.

Financial Overhaul Is Flopping – Barrons.com, “The banking-reform bill misses the mark”

Me:

So you agree with me that the national economic solution is more “innovative financial products”? Maybe something with an acronym like “COWBELL”.

Him:

Think we have PLENTY of innovative financial products. What we need is more focus on jobs creation and less on grandstanding.

Him:

That would be political grandstanding in D.C. All grandstanding here is strictly encouraged

Me:

Obviously, I’m trying to make an economic case for “more COWBELL!”

Of course we don’t want the government to create more jobs by just hiring people. That’s wasted resources and increases the deficit.

Private companies are supposed to do the hiring. But they won’t because they can’t sell what they can already produce. Because ultimately the consumer is overextended and in fear.

The common argument is to lower taxes. But that also increases the deficit. And besides, most small businesses, where early jobs would be created, don’t pay taxes anyway.

So both possible structural solutions increase the deficit on an if-can-maybe bet that it will re-prime the economic engine. And our current fixation is that the Greek deficit disease is going to visit our shores.

I’ve always been partial to the “trickle down” strategy – showering the wealthy with more money because they are the most experienced with spending lots and lots of it, albeit not often intelligently.

In the end, I don’t believe that there is any magic bullet that can be expected from Washington. And grandstanding may be the least harmful solution they can engage in. Maybe we should just let the market play this out, and companies will hire when they’re good and ready to hire.

Hot dogs and pork’n beans will become chic again.

I might add: the issue of cutting the deficit places more stress on job creation,
since the money being spent is supporting jobs throughout the economy. When
Federally supported jobs are de-funded, those effected will be out looking for work,
not paying their bills, and not purchasing products along with the rest of the
unemployed nation.

I like to consider whether we can economically afford to declare victory in the
Middle East, bring the troops home, and cut back on military spending. That part of
the economy has become so large that cutting back the role of planet policeman may
be untenable.

We may be reading about Fraser’s 15th tour of Iraq.

Likewise with weapons. Without a loaded weapon there can be no cause for costly medical assistance or law enforcement action resulting from a weapon discharge. Why should the broad citizen population continue to be expected to share in the costs associated with intentional, malicious, or accidental discharge of a weapon? Outside of Government authorized law enforcement and military actions, the answer has to be “No!” What for? Weapons related behavior should be fully costed to those involved.

Non-weapons bearing citizens should not be saddled with the costs associated with “bullet-carnage”. Shared societal costing should not be included in individual health or liability insurance, weapons-victim unpaid medical bills, government medical cost reimbursement programs, or weapons related law enforcement requirements.

A special targeted insurance premium should be included in the purchase price of each bullet to amortize the inevitable cost of bullet induced carnage and crime. Bullets are the cause of the inordinate societal costs, not the weapons themselves.

It’s a very agreeable alternative costing model. Of course….. unless you’re a socialist.

My opinion is that it means there is no way for the CAL-UAL pilots to capture the 70 seat aircraft under a scope clause in their common contract. Delta’s given it up, American’s given it up, and US Airways has given it up. Competitive market conditions will not allow CAL-UAL management to do otherwise. With the sale of these airlines, 70 seat turbofan a/c are now a confirmed regionally competitive commodity operated by some half dozen multi-entity holding companies, and those firms will be contracted by all the major brands on lowest cost/best performance.

I know this is heresy to the CAL pilots. But doctrine is usually hope, and rarely an analysis of reality.

American Eagle is also on the block and could be sold imminently, undoubtably to one of the existing holding companies performing other small-jet contract carriage. Eagle has 70 seat capacity. I think only Eagle and Comair of Delta are the remaining substantial small-jet carriers that are wholly owned by a branded carrier. US Airways has one or two small operations which they probably retain because they can’t reasonably be divested.

The effective impact is to remove any possibility of a branded carrier’s pilot union to establish a single seniority list ranging from its small planes to its largest planes. This removes a company’s threat of a single job action to force the temporary closure of the brand. In place of a single labor contract, the branded carriers will continue to subcontract out large portions of its work governed by different labor agreements. If a job action occurs in any one of the component entities, its impact will be mitigated by the others.

I think that Expressjet is now the only “major” regional that does not fly 70 seaters, solely due to CAL’s earlier onerous Capacity Purchase Agreement requirements. XJT is now in a position where it must acquire 70 seat lift to survive into the future. That is probably the new CEO’s second, longer-term assignment after reducing company costs over the near-term. He’ll be looking at 70 seat contract opportunities with the new UAL, where we have some leverage. And as necessary, he’ll be looking at merger/acquisition opportunities, knowing that the pilot group has some ability to restrain such actions.

In discussing some travel pass particulars that effect my personal situation now and post UAL-CAL merger, he made the statement that the U.S. Department of Justice would not approve the airline merger until the two pilot unions had reached a seniority integration agreement. “They don’t want to end up with another mess like they have over at US Airways.”

It sounded like arithmetic hokum to me, which I tried to convey to no avail. But then, I’m merely an elderly small-jet captain.

So I’m reading the WSJ today and come across this article about US Airways’ business success.

And the relevant quote is:

The cost picture could change once a years-long legal dispute is resolved over seniority of the old US Airway and former America West pilots. Once the pilots decide among themselves how to combine ranks, US Airways will have to negotiate with them as a single group, which is expected to boost its costs.

Basically, US Airways maintains that it is totally comfortable following the “divide and conquer” method with the two pilot groups. It’s helping to keep their costs down and their stock price up. – Keep the hornet’s nest mixed up however it’s possible!

It’s working so well that I can imagine CAL-UAL management trying to execute something similar. And I can’t imagine the DOJ interposing labor relation requirements in an anti-trust determination. Particularly when market and competitive success has been shown as assured.

And that FO? Well he still has marital, child-rearing, and financial issues to come that he hasn’t even dreamed about.

Of course the captain can’t answer the radio calls because he’s too busy just sitting there doing nothing. The ancient guy, who previously hadn’t said a word and just made uncanny hand gestures says, “Let’s keep the conversation down!”

I’d think about it differently if the captain were a lot older than me, but I’m about as old as you can get and still be on the flightdeck. I gratefully thanked him for the ride.

Finished up a smart document for my old friend Dale’s guitar. Well, actually his father’s guitar. And his father touched American music history as a friend of Bill Monroe and Homer and Jethro, and this guitar was originally owned by Arkie the Arkansas Woodchopper. I sent the PDF to the guy who literally “wrote the book” on this special guitar. The local guy who works on my Martin says it’s a $10K-$20K instrument. We’ll see.

It’s legal.
We do it all the time.
“Ladies and Gentleman, we know it’s hot back there.”
“The air-conditioning will work once we get into the air.”

Two of the many times I almost died.

A winter morning this year I had a meeting with 19 other professional pilots from all different airlines. We were discussing a topic of Sensitive and Secure Information. During the kibitzing period, talk centered around the super-cold snowy weather and a general mocking of global warming concerns.

Real funny stuff like; “How about that global warming today?”

I asked matter-of-factly, “You guys are both airline pilots and scientists?”

Those who answered said, “No.”

“Oh, well, I don’t know anything about the science of global warming, but I have a bit of professional scientific training. Science is really hard. I couldn’t image making layman judgements either way about the atmospheric science literature.”

“Hey, did you guys ever have a passenger stop by up front and say: ‘I’ve flown your airplane for about 100 hours, all around the world. It was easy! I was using Microsoft Flight Simulator.’ ”

Yeah…. not funny.

No worries. I’m a professional. And there was adult supervision.

[Story Update:] Now it’s summer. I noticed it has been kind of warm across the south. “How about that global warming today?” Pretty funny.

Welcome to this company’s ‘Small Jet Service‘ to =>Destination.

Everybody’s a lousy comedian as they walk on the flight, with tiny/ small-size/ munchkin/ midget/ headroom/ stooping/ kid’s-bus/ male-threatening type of already swallowed and regurgitated not-funny jokes. There’s no way around it, might as well address the deficiency head on.

If the airlines were actually functioning as competitive entities rather than jostling to position themselves as too-big-to-fail government utilities, they’d market “Small Jet Service” versus “Big Jet Service“, and charge an appropriate premium fee for the “Big Jet Service“. If the consumer interest groups were actually interested in consumers they’d be promoting this. Customers would be happy to pay for the opportunity to not feel compelled to practice amateur-night stand-up comedy.

If you don’t want to pay for a big jet then you can expect a small jet. That seems perfectly normal.

China holds about $4.5 trillion in dollar and dollar equivalent reserves. The Chinese are not nice. They have no reason or obligation to be. They will skin you, cook you in a soup, and call it beef if they can make money off of it. I know, because I made money there at the beginning, in the early ’90s.

The Chinese have our dollars because we wanted to buy things made with their cheap labor. We hate union organized workers, and U.S. employees are such a hassle with their real-life needs, taxes, and insurances. We took our labor off the job, sent the machinery over to China, sent dollars over to there to import the cheap goods, and marketed the American Good Life as: “Owning lots of cheap crap is better than owning a few quality items.” Three cheers for Walmart, which happens to have been my major benefactor! (…. significantly ahead of BP.)

An important part of the grand scheme has been that the Chinese get to do something with the dollars they receive. We can’t expect them to just sit around looking at dollars and counting them. The Renminbi is not a market-convertible currency. So our can’t-live-without-them financial geniuses decided to borrow those dollars back in large amounts. Since the Chinese didn’t have any other outlet for the high-water flood of dollars they were receiving, they couldn’t demand much of an interest rate.

The net result is that we’ve gotten unlimited incredibly cheap goods, borrowed cheap dollars, and haven’t had a bunch of annoying hassles from (now dis-)organized labor. Good gig, right?

Trouble is, we’ve had to figure out how to keep improving the wealth of U.S. citizens, since they’re not working at producing goods. Well, there’s services: but really there’s only so many dog-walkers, personal shoppers, and baristas that are needed. However, real estate wealth is the dream of all Americans. “Earn Passive Income In Your Sleep!” Enter “The Ownership Society“.

That worked out well for a good while. China’s cheap dollars allowed for the inflation of real-estate paper-wealth. It might have lasted longer but for the shenanigans with willful securitization of toxic debt, and the resultant sales-infection of it throughout the world. Now after also funding two wars, two tax-cuts, and a prescription entitlement program, there’s this collapse of the inflated real-estate wealth, along with a great floundering of how to get back to a feel-good-money-mojo for Americans. Everybody smells feces on their hands.

But we still owe China the interest on all that borrowed money. And that interest, while small in terms of percentage interest rate, has become large in terms of absolute amount relative to available tax dollars. It’s just like the underwater-mortgage of an newly unemployed owner: all of a sudden the mortgage payment is not only too much negative cash flow, but with the negative underlying value, it isn’t worth keeping the property. To date as a nation we’re continuing to pay, because we still mostly believe in the global financial system.

On this site, I began an analysis of the lack of airline industry consolidation in the unknown sub-contractor segment here, and plan on further discussion.]

ME: Buried in one of the very near-term regulations needs to be the requirement that: “Branded ticket-selling carriers are joint and severally liable for the safety of their sub-contractor partners.” That does not mean to include consumer recognizable branded domestic and international code-share partners.

It will begin the process of re-integrating unknown smaller-aircraft operations under the corporate umbrella of the branded ticket-seller. I mean really, what is a brand supposed to be about if it doesn’t include safety? “Our brand has everything the customer could want, but we depend on the U.S. Government to insure our safety?” Something about that isn’t very satisfying, and from my perspective suggests prestidigitation.

This is the answer, and it must be done.

HIM: I disagree, that is the responsibility of the FAA. Doesn’t mean the branded carrier can turn a blind eye if they know of issues, but its frankly not their job. There are enough regulations to cover this. Enforce the ones we have before complicating the issue with new ones.

ME: You want taxpayers to help protect a company’s brand by relieving the corporation of their brand’s quality responsibility? Customers are supposed to investigate the safety record of largely unknown sub-contractors before they make their purchasing decision?

This “One Level of Safety” has been a way for the branded carriers to utilize the government as a foil in order to divide and conquer the labor groups to keep labor/operating costs down. Nothing more. It allows for the “lowest price bid competition” – the one staffed with the most starry-eyed kids wins. If you don’t see that, you haven’t thought about it.

Can you imagine the Chairman of BP trying to hide behind the government because the MMS approved their safety plan?

HIM: So we are going to let the FAA off the hook when it comes safety? And let a major corporation police themselves and their subcontractors? These corporations are only interested in profit, nothing else. Remember Ford executives that decided it was cheaper to deal with the lawsuits of people being hurt/killed rather than fix the Pinto? I have a problem with that. Again, the regulations are in place to ensure safe air travel. Are we going to pass more regulation to deal with this? What if those are not enforced? Gov’t will make more? Enforce the regulations we have before making new ones.

ME: I didn’t say anything about taking the FAA out of the loop anywhere, as I review my transcript. All I have recommended is the inclusion of one simple little sentence in one upcoming regulatory change.

But you’re doing well practicing the currently in-vogue inflammatory counter-argument style. In this case it’s the same as Smisek is making in the Buffalo News article. There might be a good lobbying job for you coming up. Good luck!

I’m not very big on rules: generally the less the better. You probably already knew that.

But it seems like the removal of Glass–Steagall, unmanaged development of an opaque derivative market, availability of low cost money, unchecked war spending, unfettered real-estate shenanigans, and a boundless enthusiasm to outsource or suppress anything associated with organizing U.S. labor, all came together to create a near perfect storm to blow up the global economic order.

So I think that there are a couple of circuit breaker rules that should be instituted in an attempt to avert similar paths, and to maybe influence the flow of money into more globally competitive endeavors. There are two major components that advantage the financial industry; complexity and opacity. Dial those up and we get funny-business. Dial those down, and we get a more rationally employed economy.

I also think the generally accepted attitude has swung too far towards corporate rights and too far away from employee rights. I’m looking for a few good regulatory tweaks there also. One fun example is coming up at the end of June. It’s a simple change in the vote counting process for unionization in the airline industry. One that will make the voting process more rational, and not naturally gamed towards corporate owner interests.

Some more of these tweaks here and there and we’ll be back in business as a great economic nation.

[A recent Facebook-post exchange between me and an EMB-145 First Officer from OK.]

First Officer to Me:
Sumner you should sponsor me. I’ll pretend to support your collectivist leanings online.

Me to First Officer:
Cool – Just keep in mind:

1. Twelve years at the current Oil Spill Champion gave me my big-corporate creds.
2. An advanced business degree from the University of Chicago, ground zero for the Chicago school of economics, gave me my academic creds.
3. Twenty entrepreneurial years of successfully signing my own paychecks gives me unique capitalist status among our population.
4. I suspect that nobody you know has exported more U.S. jobs to China in the name of personal profit than I have.
5. Now that I’m twice retired I’ve become an airline captain.

First Officer to Me:
Jeez, I hope I didn’t piss you off! I was just joshing you Sumner.

Me to First Officer:
No problem. But I have to keep the record straight. Somebody might read it someday.

You know the statement: “I hate algebra! I’m never going to need it! Why do I have to learn this?” And it’s right, because it becomes a self-fulfilling prophecy. The result is a diffuse social group that tends towards limiting understanding and solving life’s puzzles with arithmetic thinking. If the situation requires algebraic or calculus type thought, people will still try to solve it arithmetically, though most of life’s critical or controversial circumstances are really nonlinear differential equations.

Then along comes a leader, religion, organization, or news channel and says in essence: “All these difficult problems only require arithmetic solutions!” The mathematically denied and deprived rejoice in their newfound fraternity and validation of their long-ago rejection of algebra class. They create a quasi-religion that only allows arithmetic solutions to life’s problems. Higher order math thinking is heresy, belittled, and subject to social banishment.

The resulting solutions are not remotely optimal for society, far from competitive, but there is a generally accepted social order.

1. Normal people today have computers AND cell phones that need to be charged every day. I also have a rechargeable auxiliary batter pack for my cell phone, and I have a rechargeable GPS watch. Where’s the outlets? Oh yeah, somewhere under the frikin desk. On your hands and knees!
2. Why isn’t there an outlet next to the bed for my cellphone-clock-alarm? That’s the only timepiece that I trust, and the only wakeup call that is reliable. Why do I have to move the damn bed to get to an outlet? And get this Chinese made nobody-can-figure-out-how-to-us-it clock radio out of here.
3. Those noisy, under the window heater-airconditioners blow their air right at the adjacent desk. Why is the desk always located here? “Hello! I’m freezing in this loud draft!”
4. And why is there always a friken vibration in the heater-airconditioner fan? I hope that isn’t going to last all night!
5. And those thermostats, um, maybe you could get some so that regular people are the ones that understand how to use them.
6. Can you please get this stupid TV furniture out of here? I never turn on the TV because it’s just crap channels of advertising that your hotel is pushing, the remote is filled with yuck bacteria, and the batteries are almost dead anyway. I’ll see any needed video on the Internet.
7. Speaking of which, your Internet bandwidth is Afghanistani in capability. Upgrade the system into this century will you please! I open Skype, iChat, Soma.com radio online, and two windows of 15 tabs of web pages each. Your network sucks!
8. How about if I turn the refrigerator on if I need it, rather than you leaving the noise-making machine on and making me turn it off? Saves energy anyway.
9. Why does every flat surface have to be filled up with your advertising crap? Why can’t the flat surfaces be available for my crap? Why do I have to move your crap to fit my crap?

Really, you don’t ever stay at this hotel, do you?

Here’s my intellectual property effort for rebranding, ©Sumner L. Nelson 2010, all rights reserved:
B2P “Back To Petroleum”, and
BP2 “Back to Petroleum: Doubling Down on Safety”

Alternatively, we could modify my mythological mashup of great 60s philosophies, and say something like, “Far Out’s Fine, And Now We’re Finally Minding The Store!” Keep on trucking.

• Don’t sit downstairs. That is reserved for handicapped and people apparently more senior than me.
• Don’t sit in a 4 seat lounge location. That is reserved for groups of 4 people. Dummy.
• Don’t sit in one of the seats that has the photocopied piece of paper that says, “Reserved For Minors”. It’s reserved for minors.
• Don’t accidentally walk into the Business Car unless have paid for that class of ticket.
• And don’t even bother to try to sit next to that Chinese girl, because she won’t move her purse.

No wonder the train is only half full.

Houston Intercontinental Airport waiting for a flight to Chicago.

The guy next to me is on his cellphone; “blah, blah, Danita Czyzewski, blah, blah.”

He gets off the phone and I say; “I know Danita.”

He stares at me.

“I went to high school and Purdue with her.”

Stare.

(I’m in pilot uniform.) “I worked with her father.” (Am I speaking Greek?)

“It must be the same person.”

Stare, nothing, not interested.

“Tell her hello from Sumner.”

Over.

Possibly it’s a contagious disease.