Kimball Corson
05/13/2013, Pago Pago, American Samoa

A Condemnation of Our Universities

In the face of all that is occurring and has occurred in regard to both law and its enforcement --- or the lack of it -- and in regard to economics and the economy, the universities in America are much too silent. Law schools and economics departments in particular are not speaking out, nor are their students, aside from the likes of a micro flap at Harvard against economics professor Greg Mankiw by his students. Generally in both quarters -- law and economics -- mum is the world, aside from the independently wealthy likes of Joseph Stiglitz and Paul Krugman. We hear hardly a peep. Why?

I suggest agendas are being controlled by monied interests, directly or indirectly, not only in regard to tenure tracked faculty, but also with regard to research funding and assistance. Those who keep their noses on the grind stone, remain good apologists and who do not rock the boat by speaking out, orally or in writing, get the promotions and grants. Younger faculty in the tradition of Stiglitz and Krugman either get stuck or shown the door. Private research funding of our Universities is through the roof but figures other than federal funding are harder to come by. That is how monied interests control; that and by political pressures brought to bear on federal funding as well.

American academia should be ashamed of itself. It is developing a lackey mentality unworthy of its station.

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Kimball Corson
05/13/2013, Pago Pago, American Samoa

The Revealed Republican Agenda for America

Republicans notions of progress are to seriously shrink government, ax the social safety net, privatize Medicare and Social Security for the wolves on Wall Street, keep taxes low and otherwise secure the interests of the oligarchy and then lean back and do nothing but wait for supply side trickle down economics to work. Is this a reasonable approach to the problems of America?

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On Necessary Conditions for Progress

Many of us know pretty well what the ills of our nation and economy are and have good notions on how to address them, but the fact is that is not happening. Good leadership, which is lacking, could easily give those ideas and proposals better focus and direction. Why is such leadership lacking in these circumstances? Here is a proposed answer: The time is not ripe. The Republican party, as protectors of the status quo and the oligarchy, is still too pervasive and strong, although it is painting itself into a corner with the American people. Americans are slowly wising up to the notion that Republicans too much act against their group and financial interests. Will such leadership emerge if the Republicans fragment and crumble like the Soviet empire? Will progressivism then have a chance?

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Kimball Corson
05/13/2013, Pago Pago, American Samoa

On Freedom

What is it? Too many conservative take it to mean the right to make and keep money. Have you noticed that, at base, the very definition of freedom for Republicans, as revealed by their behavior, turns on the right to make money any way you want and the right to keep it: free market capitalism - no regulations to restrain profits - no government intrusion on ones predatory behavior - freedom from taxes - no requirement to support a social safety net - no antitrust laws -no aid to education - no enforcement of the laws on fraud - basically nothing that blocks grabbing another dollar. That is conservative freedom, as revealed by their preferences.

Surely freedom should mean more than the protection of Greed. The protection of civil liberties should be essential for real Freedom, but Republicans and too many Democrats give not a whit for such liberties. It is more the right to follow the money trail to grab some.

Freedom is the ability to live unencumbered from exploitation -- not the freedom to exploit

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Kimball Corson
05/10/2013, Pago Pago, American Samoa

How Bad Law Leads to Corruption of the Economy

Our economy is rife with monopolistic elements causing producers to earn monopoly returns over and above reasonable profits. We have seen that glaringly and recently in regard to price variations in standard medical procedures. Competition is compromised by government misregulation, inherent market defects in rare cases and competitor abuses and collusions in many others.

The antitrust laws are dead. The death they suffered was from modification because they were too effective at being enforceed by lawyers acting as private attorney generals. If regulators are the captives of those they regulate, what alternative is there except to provide appropriate incentives to private lawyers representing those injured by such monopolistic elements and abuses. The modification sprang from Richard Posner's observation - in the true spirit of the University of Chicago (I was a student of Posner's) -- that, in his view, Sec. 1 of the Sherman Act did not protect competitors or consumers, but only competition, a narrowing tantamount to emasculation. Once, under his remarkable influence, this view spread, antitrust died.

No one is seriously interested in competition. Injured competitors are interested in their own injuries. Ditto consumers. But, with the antitrust laws compromised to the point of disutility and the FTCA precluding private standing what is left? Consumer interests, too, like those of competitors, have been undermined by the attending bogus argument that price competition is alive and well no matter what. Such competition is deemed enough. But it really isn't. Not close. Worse, not even what is left is much enforced. This is a farce on wheels in all directions.

Our present public system of regulation and law enforcement is broken. It is not working. After the crash of the financial system in in 2008, the FBI said it had never seen fraud and violations of the law on such a massive and national scale before and it was prepared to work with the Justice Department to prosecute as many violations as possible. However, the SEC intervened at the aegis of those controlling the financial markets and said it had the primary enforcement responsibility in financial markets. The FBI was basically told to stand down again. Thereafter, the SEC did nothing or next to it in regard to enforcement, contending the frauds were too difficult and expensive to prove.

To effectuate the needed private enforcement system, several things need to or should occur. First the tons of garbage regulations that clog the CFR's, which are too often ignored in the breach and unenforced effectively by regulators controlled by those they regulate needs to be given a serious haircut. Much should be thrown out the window. Second, a minimalistic set of new and effective laws needs to replacement them that are characterized by bright lines and plain language. Those laws, among other things, should do several things. First they need to simplify and restate the law of fraud to require no more than a negligent misrepresentation and caused injury in fact. Second, the antitrust laws need to be restated to protect not only competition, but - as before -- competitors and consumers alike injured by violations. Finally, private standing needs to be afforded under the FTCA with fee awards and multiple damages.

Third, those injured by market participants acting in violation of these laws need to be able to hire private attorneys and sue. Fourth, the law should specify that when such attorneys are successful in proving a violation and caused injury, then reasonable attorneys fees should also be recoverable along with multiple damages by the client. The attorneys would in effect become "private attorney generals" as before under the antitrust laws.

Regulators and public law enforcement officials have proved themselves to be wholly inadequate. However, they would still be entitled to try when and where they want to, but without recovering attorneys fees or actual damages already recovered by private counsel for the same violation.

This scheme 1) marginalizes regulators who are invariably controlled by those regulated and too often have their hands out and 2) utilizes otherwise underutilized resources -- private attorneys properly incentitivezed - to get the job done. A Constitutional amendment would be nice to require all laws to use bright lines and plain language. Laws that did not would be subject to judicial declarations of unconstitutionality.

Congressional tinkering with the law and CFR's at the aegis of lobbyists would be seriously compromised. Court's could uphold the new "bright line/plain language" law. Congress would be more relegated to largely doing other things and the courts could address the issues less fettered. They have given up too much turf to the other branches of government already.

Where regulation seems required, as in markets that fail in and of themselves, as with health care as Kenneth Arrow has shown, nationalization might well be the preferred course. Americans pay twice as much per capita for health care as those in the other OECD advanced nations, receive only 68 percent as much doctor attention and have significantly worse health care outcomes, all, as recent studies show. Where markets cannot work, they should be nationalized.

Banking is open for discussion. Why the franchise to create new money and then earn net interest income on it should be given to bankers who, unlike private lenders, suffer no opportunity cost on money truly lent, is not at all clear. Worse, in regard to banks, we have the tail of the dog wagging the economy. Lobbying and buy off efforts should be shoved aside. We should not put up with it.

Changes are need. Many understand what they are. For Congress, it is business as usual. Pocket lining proceeds apace. The electorate unfortunately is befuddled and does not understand except in terms that are too general and lack focus. A major push on several fronts is necessary. What I have outlined here is one of them and a major one at that.

Post Script: Look at the problem from the other end: how many frauds and economic wrongs are done to us each year for which we have no effective remedy or recourse. We get murdered in increments. The law of equity states every wrong has a remedy, but what a joke that is when the bar is set impossibly high in to many directions. That problem is my target here.

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Kimball Corson
05/07/2013, Pago Pago, American Samoa

On Exploring in Old Age

My eyes are windows into the lives of others and how they live within their smaller families, their extended families, their places or homes and in their villages, in their places of worship and then in their islands or nations. Welcomed in well enough, I am hesitant and must be cautious not to disturb because in truth I am only here for today and then gone tomorrow. I wish to leave no hole or gap for where I was. I am the quintessential observer, a voyeur on life's differences, nuisances and beliefs. It is not my place to disturb or even leave a personal footprint of note.

I myself have lived such a life -- a full and interactive life; too full, I thought at times ---but it is now time for me to see how others do it in the arrays of possibilities spread out across the globe. A sort of emotional and interactive sightseeing tour to accompany the varied scenery and settings presented. How truly rich and varied this life is with its endless permutations, structures, patterns and ways. The only thing fixed is the existence of differences. The only thing permanent is change. There is a quiet, certain and prevailing belief within each culture that its patterns, beliefs, religions and ways are the best. But that view always fails my equally silent on-going comparisons. The only enduring commonalities I can attest to are abuses of various kinds, care for one another, the consumption of food, the elimination of waste and the pervasiveness of and need for community, shelter and human interaction. Perhaps the love of uniforms could be added. Much else is up for grabs.

So I keep my emotional and carbon footprints to a minimum and always move on and forward; never backward. The world is too big and varied to look or go back and my lifespan too short.

Comments [2]

Kimball Corson
05/06/2013, Pago Pago, American Samoa

Blythe Masters: a Banking Corporate Villain Up Close

She is a senior old hand at JP Morgan Chase and a dishonest rat. A math/economics wizz out of Cambridge. Masters, the head of JP Morgan's commodities business, is known as a pioneer in the use of credit derivatives, financial products that played a starring role in the 2008 financial crisis. Her success at JP Morgan stemmed from her vision in the 1990s that these products could transform the banking industry by allowing the financial system to earn much greater profits at the price of much greater systemic risk.

She became a managing director at 28, then the youngest woman in the bank's history to reach that rank. Derivatives seemed "creative" and also appealed to Ms. Masters because of her quantitative background, she once said. By separating certain risks from an underlying asset, derivatives seemed to offer a way for a bank to make more loans than it otherwise would be able to.

She made a breakthrough when Exxon, a longtime client, asked for a credit line. To offload the risk without actually selling the loan, Ms. Masters arranged a deal with the European Bank for Reconstruction and Development in London, in which the bank would get fees in exchange for assuming the risk of default while J.P Morgan would keep the interest earnings.

The deal was known as a credit default swap.

Soon, the Masters and team at JP Morgan began talking to regulators about the new product. In 1996, the Federal Reserve essentially and stupidly gave its blessing with a statement suggesting that banks could use credit derivatives to reduce their capital reserves. This could be done by swapping out the default risk on loans outstanding so as to treat those loans as new reserves. As one banker put it, 'Suddenly, we had unlimited capital to lend.'

But the grand promise of derivatives came undone in the financial crisis of 2008. The contracts ended up making embattled institutions even more vulnerable to mounting losses. Warren E. Buffett called derivatives "financial weapons of mass destruction." And that made Ms. Masters a "destroyer of worlds," as a September 2008 article in The Guardian declared.

But it seems Masters picadillos don't end there. Now the claim is she has lied under oath and criminally obstructed an investigation of JP Morgan Chase. Here's how, with a bit of background first.

In the energy market investigation, the enforcement staff of the Federal Energy Regulatory Commission (FERC) intends to recommend that the agency pursue an action against JP Morgan over its energy trading in California and Michigan electric markets.

Its 70-page report also took aim at a top bank executive, Blythe Masters. The regulatory document cites her supposed "knowledge and approval of the schemes" carried out by a group of energy traders in Houston. The agency's investigators claimed that Ms. Masters had "falsely" denied under oath her awareness of the problems and said that she and others at JP Morgan had made "scores of false and misleading statements and material omissions" to authorities.

JP Morgan, of course, claims that it and Masters are as innocent as the driven snow and is preparing a further response. Yet under "pressure to generate large profits," the agency's investigators said, traders in Houston devised a workaround. Adopting eight different "schemes" between September 2010 and June 2011, the traders offered the energy at prices "calculated to falsely appear attractive" to state energy authorities. The effort prompted authorities in California and Michigan to dole out about $83 million in "excessive" payments to JP Morgan, the investigators said. The behavior had "harmful effects" on the markets, according to the document.

For now, according to the report, the enforcement officials plan to recommend that the commission hold the traders and Ms. Masters "individually liable." While Ms. Masters was "less involved in the day-to-day decisions," investigators nonetheless noted that she received PowerPoint presentations and e-mails outlining the energy trading strategies. The bank and Masters, investigators said, then "planned and executed a systematic cover-up" of documents that exposed the strategy, including bogus profit and loss statements.

In the March report, the government investigators also complained about what they said was obstruction of justice by Ms. Masters. After the state authorities began to object to the strategy, Ms. Masters "personally participated in JP Morgan's efforts to block" the state authorities "from understanding the reasons behind JP Morgan's bidding schemes," the document said.

The investigators also referenced an April 2011 e-mail in which Ms. Masters ordered a "rewrite" of an internal document that raised questions about whether the bank had run afoul of the law. The new wording stated that "JP Morgan does not believe that it violated FERC's policies."

This gal is a money grubbing bitch on wheels. She even looks toxic.

Comments [1]

Kimball Corson
04/27/2013, Pago Pago, American Samoa

Contracts and Torts

They govern the world of human behavior subject to legal process. Contracts govern the world of behavior with agreements and torts, the world of behavior without them. Classical contract law is abrogated by supervening tort notions to better enhance fairness, especially in this age of declining literacy.

But now, the Achilles heel of torts -- the beleaguered claim of fraud -- is failing in the world of behavior without contracts. Fraud, with its classical, nine multiple elements, is too hard and expensive to prove so too much of it occurs without remedial consequence. Wall Street earns its living off that fact. The classical nine elements required to prove fraud are:

(1) a representation;
(2) its falsity;
(3) its materiality;
(4) the speaker's knowledge of its falsity or ignorance of its truth;
(5) the speaker's intent that it be acted upon by the recipient in a manner reasonably contemplated;
(6) the hearer's ignorance of its falsity;
(7) the hearer's reliance on its truth;
(8) the right to rely on it;
(9) the plaintiff's consequent and proximate injury.

4, 5 and 6 are the rub. I think they should be dropped as affirmative elements of proof -- especially 5 -- except perhaps allow 6 as an affirmative defense in some cases. False statements and reliance should mostly do. Justice would be better served. More crooks would pay up in civil suits and criminally, more would also go to jail. Wall Street would get a hair cut. Constructive fraud should have the same adjustments where there is no affirmative misrepresentation, but a constructive one in the circumstances, instead. However, it should not be enough to prove fraud that a Wall Street broker's lips were moving.

Fraud is more important than many realize because there is often fraud in the inducement to form a contract or agreement. The two worlds overlap there, with torts prevailing.

The law needs fixing. It is out of balance and bad behavior is more prevalent than it should be. Courts allow it because 1) the law is out of kilter as I explain and 2) courts tend too much to defer to the class of larger businesses that engage in fraud, the propertied and monied interests (which too often slip judges money and favors).

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Kimball Corson
04/25/2013, Pago Pago, American Samoa

The Verities

No good deed goes unpunished.
No good idea remains well received.
No success comes without failure.
No effort remains uncompromised.
No justice comes but by accident.
No happiness comes with effort.
No hatred survives without anger.
No great love survives boredom.
No big institution survives its era.
No politician becomes a statesman.
No newness can survive ageing.
No goodness can exist without evil.
No pain can exist without pleasure.
No worth can survive compromise

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Kimball Corson
04/12/2013, Pago Pago, American Samoa

What Policymakers Don't Understand that's Important

Bernanke, for example, understands Milton Friedman's helicopter drop of money. He has studied Friedman, but he was not, like I was, an actual student of Friedman's.

Friedman argued that if helicopters flew over and dropped money for all to grab, after the necessary time for a new general equilibrium to be reached, prices will have risen in proportion to the additional quantity of money dropped. The quantity theory of money equation, MV= PT, would reflect the higher prices and the larger money supply. Real, non-monetary variables would ultimately be unchanged.

While many still thinks in these terms, a few also realize that under modern monetary theory, a new bank "loan," for example, simply consists of a new and positive entry in a borrower's demand deposit account. That is how new money is in fact created. It is destroyed when the "loan" is paid back. Substantively, nothing more is involved except for the "loan" documentation paperwork. But too few connect and relate the two ideas. They mistakenly continues to think the government cannot directly and substantially increase spending in the economy unless it engages in deficit spending or cuts taxes. Printing currency in large quantities, most realize, is not something modern governments directly do to get more money for the government expenditures thought needed for counter cyclical policy.

What should be realized here is Bernanke could combine these two ideas -- a helicopter drop of money and how new money is created by banks -- so as to have a helicopter drop of "demand deposit accounting entries," as it were, bolstering everyone's checking account by the same amount, thereby quite directly and substantially increasing consumer spending and aggregate demand, and do so without more deficit spending or taxes being cut. A negative non-income tax, if you will.This could be done by an order from the Fed to all member banks directing them to make such equal deposit accounting entries for all demand deposit accounts and then providing each bank with the reserve account deposits at the Fed to do so.

Now the Friedmanites at this point, with Bernanke wondering, would argue that prices will rise proportionately by doing that, generating inflation. But will that happen? And did Friedman really believe that personally? I think not and here is why:

But look at the present situation. The rich and corporations are sitting on tremendous money or cash hoards -- some $2 trillion dollars plus --that they have pulled from circulation in the economy; plant and equipment are sitting idle in substantial quantities; and we have almost enough of our working age population not employed to start a new economy of about the same size as ours. So the prospect of monetary inflation is not exactly breathing down our necks. If the economy where fully employed, yes, inflation could be a problem, but not so much with the economy in its present doldrums, even if it has developed a discernible pulse lately. In fact, deflation remains the more worrisome prospect, with so much money being horded from circulation and so many idle resources at hand, including so many people who are not working.

However, if such inflation were to raise its ugly head, the solution is simple and easy. Forget efforts to mop up excess reserves as Bernanke has talked about, by increasing banks' reserve requirements or having large Fed bond sales from the Fed's New York open window. The government could simply reverse its effort (or "helicopter 'deposits' drop") and impose an equal and positive non-income tax on all deposit accounts and then not spend or destroy the proceeds. This is a quick and effective means to check such inflationary pressures. Of course, the Fed would have to coordinate with the Treasury, but technically that should be doable, at least in theory.

Bernanke and too many economists don't get this. They don't really understand money. Even back then, I think Friedman implicitly understood the suggestion here, but kept quiet about it because it was too inconsistent with his personal politics. But he said enough privately and taught enough in classes, looking back, to persuade me that he did. But does Bernanke? Or most in Washington? What is suggested here is a much stronger idea actually on how to powerfully regulate aggregate demand much more directly without changing taxes or increasing or decreasing deficit spending. Of course, some policymaker's would have to set their ideologies aside and get up to speed on modern monetary theory. I know. I know. That's asking a lot.

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Kimball Corson
04/10/2013, Pago Pago, American Samoa

A "must read" for every American. Read it twice to be sure you got it all. Rarely is so much truth so well packaged into so succinct a piece. Truths we all need to understand if we are ever going to fix what is broken in Washington, D.C.
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The Biggest Republican Lie -- 'America Is Broke'

by Robert Creamer

The big lie in American politics today is that "America is broke" or "in this time of austerity we have to tighten our belts." America is not broke. We are not in a time of "scarcity" and when we buy into this fallacy, we contribute to political decisions that actually will do damage to our standard of living and that of our children.

This lie is used relentlessly to argue that "America just can't afford" investments in education, or infrastructure, or jobs programs. It is used as the justification for the need to cut Social Security benefits, shift the cost of Medicare to senior citizens, increase the costs families bear to send children to college, or cut back on food for low-income children.

The fact is that for ordinary people times are tough. Median per-person income for ordinary Americans hasn't increased for 20 years. And the federal, state and local governments are short of revenue.

But America is not broke -- far from it. Ask the gang on Wall Street. Ask the bankers whose recklessness caused a massive financial collapse, yet continued to get multi-million dollar bonuses, if America is broke.

The reality is our economy is producing a higher gross domestic product per capita -- the best measure of the sum of goods and services produced by our economy per person -- than at any other time in American history. Gross domestic product per capita slumped after the Great Recession that was caused by the recklessness of the big Wall Street banks. Then it once again began to increase and has now reached record levels.

Overall, America is still the wealthiest nation in the world -- and wealthier today than it has ever been.

In fact per capita gross domestic product increased over eight times between 1900 and 2008. That means the standard of living of the average American today is over eight times higher than it was in 1900. Average Americans today consume eight times more goods and services than they did at the beginning of the last century. We are eight times wealthier today than we were then.

And note that GDP per capita has increased six fold since Social Security was passed in 1935 and 2.3 fold since Medicare was passed in 1965. Demographic trends, like the number of seniors in society, have been massively outstripped by increases in our per capita gross domestic product -- or standard of living. Those who claim that while we might have been able to afford Social Security and Medicare when they were passed, we just can't afford them anymore, are just plain wrong.

So if per capita gross domestic product keeps going up, how could it be possible that the median income of ordinary Americans hasn't increased in twenty years? And why do we have such big budget deficits? Why do we feel so broke in our everyday lives?

The answer is that we are not living in a time of scarcity. We have been living in a time of enormous inequality. Look at a guy like John Paulson. In 2007, as the financial crisis descended, he made $4 billion in personal income betting against subprime mortgages that helped sink the rest of the economy. In 2011 he made a record $5 billion in personal income as the manager of a hedge fund.

In 2011, Mr. Paulson made as much as 100,000 of his fellow citizens who earned $50,000 per year.

Ordinary people haven't had a raise in 20 years, while the wealthiest among us have accumulated unthinkable riches. As a percentage of national income, corporate profits have risen to their highest levels since the 1950's -- 14.2 percent in the third quarter of last year. At the same time, the percentage of national income going to wages dropped to 61.7 percent -- almost to its low point in 1966.

And we are living in a time of scarcity for government budgets because Republicans in Congress slashed taxes on the wealthy, opened up new loopholes for big corporations, and obstructed policies that would put everyone back to work and generate new tax revenue.

Ask our friend Mr. Paulson how Republican tax policies affected him. Had he somehow managed to make his $5 billion laying bricks or sweeping floors, he would have paid taxes at a rate of 35 percent on the bulk of that income. Instead, he paid at a rate of only 15 percent, since he earned his money by speculating as a hedge fund manager instead of making a useful good or service. Makes sense, right?

Remember that just over 12 years ago, under Bill Clinton, America had budget surpluses as far as the eye could see and the most prosperous economy in human history. Then George Bush and the Republicans cut taxes for the wealthy, conducted two wars on a credit card and intentionally tried to increase budget deficits so they could justify shrinking the size of the public sector and allowing big corporations and the wealthy to have a larger and larger share of the pie.

Republicans were not the least bit shy in explaining why they helped create deficits. By starving government of money, they forced the perception that "we're broke" and can't "afford" critical public sector outlays. As anti-government crusader Grover Norquist once explained, by cutting tax revenue, he hoped to shrink the size of government small enough to be "drowned in a bathtub."

And the thing that is most outrageous is that far from "not being able to afford" expenditures like new roads, bridges or mass transit system -- or "not being able to afford" investments in educating the next generation -- our refusal to do so will actually reduce our standard of living -- right now, and in the future.

What really reduces our standard of living -- our per capita gross domestic product -- is when able workers, plant and equipment sit idle without producing goods and services. Unemployment costs our standard of living goods and services that we will never recoup.

Does it make sense that we let roads and bridges crumble while able-bodied people who are perfectly willing to rebuild them instead spend their days pounding the pavement looking for work? That's just plain stupid.

And it turns out that the other thing that really reduces our standard of living is when we create even more economic inequality by cutting Social Security benefits, or reducing the power of unions to demand good wages, or cutting teacher's salaries -- because when we do that we put less money in the pockets of consumers, money that they use to buy products and incentivize companies to invest in more production and more hiring that create economic growth.

The bottom line is that cutting Social Security benefits with Republican proposals like the "chained" CPI will actually reduce economic growth.

We need to get our "fiscal house in order." But all proposals to do that are not created equal. The principle test for whether proposals make sense is whether they increase or reduce economic inequality -- whether they put more income in the pockets of ordinary people, or allow it to concentrate in the hands of the John Paulson's of the world.

Let's put our fiscal house in order by eliminating the cap that protects higher income taxpayers from having to pay Social Security taxes on income over $108,000. Does it make sense that someone who makes the median wage of $50,000 has to pay Social Security taxes on 100 percent of their income and someone who makes $500,000 has to pay Social Security taxes on only about a fifth of their income -- or that someone like our friend John Paulson pays Social Security taxes on only .002 percent of his income?

Or let's do it by eliminating tax loopholes like the ones that save people like Paulson hundreds of millions because he is a speculator instead of a secretary.

Let's do it by ending tax subsidies to oil companies that are among the most profitable enterprises in human history.

Let's do it by requiring Medicare to negotiate with drug companies to get the best price on pharmaceuticals. Right now Medicare is prevented by law from negotiating for the best price. Medicare is required by a law passed by the Republicans to allow the drug companies to chump the taxpayers into paying rates sometimes twice as high as the price that the same companies charge people in other countries.

Let's put our fiscal house in order by changing the way we finance health care and stop paying 40 percent more per capita for health care than any other country and getting results that rank only 37th in the world.

Let's cut deficits by creating economic growth through a major program to develop alternative energy and rebuild our infrastructure.

Let's prepare our economy for the future by passing proposals like President Obama's initiative to provide universal pre-school education and cutting the cost of sending kids to college.

And for God's sake, let's stop repeating the great lie that "America is broke" or that "we have to make cuts in this time of scarcity." By repeating this big lie, pundits and policy makers help justify policies that actually will reduce our standard of living and the economic prospects of generations to come.

Comments [2]

Kimball Corson
04/06/2013, Pago Pago, American Samoa

Why Do We Want to Believe in God So Much?

All proofs of the existence of God have failed. Men have tried unsuccessfully for millenia. From Nietzsche to Bill Moyers, believers have been repeatedly told they delude themselves with myths. Their God cannot be seen. He has never been photographed. He leaves no verifiable footprints. At once, he is said to be everywhere, while in fact being nowhere. In truth, prayer is simply people talking to themselves; not a bad way to get one's thoughts together, but the idea of an interventionist, answering supreme being has likewise never been demonstrated. The myths roll on.

Some believers even go so far as to manufacture miracles with hokum and fraud. Statutes of the Virgin Mary that cry real blood are an example. The great magician or illusionist Randi for decades has offered $10,000 (now it is $1,000,000) to anyone who can perform a trick nor create an illusion he cannot replicate. Uri Geller was unable to mentally bend spoons in his presence. In fact, though many have tried, no one has ever won the $10,000.

The will to believe is pervasive. Indeed, it and systematic thought are the greatest flaws of the conscious mind. Why is the will to believe in a God so strong in the face of the all the evidence and in the face of all we now know about anthropology, sociology, psychology and philosophy . There is no such will to believe in unicorns.

First, unicorns do not offer us an eternal life. No heaven or hell for the well or poorly behaved. Second, unicorns do not generate an internal, reflective life for believers who find it spiritual. Flights of fancy, perhaps, but not a reflective, created and internal life. Finally, there are no societies of believers in unicorns, whereas churches of every conceivable denomination and belief system abound. For many, the only commonality is some sort of belief in a God. Religious practice varies. Hippie-like communalists dance nude in the moonlight. Mormon missionaries walk about in slacks, white shirts and ties, looking like IBM salesmen without their coats, proselytizing. A mandatory 10 percent is a juicy tithe. But all believe in a God. Unicorns don't do so well. Eternal life, introspection and society are not offered.

This suggests we want an afterlife, even at the risk of spending it overly warm. Secondly we want a reflective and internal aspect to our lives. We have a need to know ourselves. Finally, we like the ready-made society of the church congregation we choose. Like fraternities and sororities in college. It affords prepackaged friendships organized around common beliefs with no dissuading heretics.

Unicorns do not address these needs. They have no systematized theology -- regardless of how flaw ridden or inconsistent that of God believers is. No internal life. No society. Best of all, perhaps, unicorns don't care if those who believe in them proselytize or not. It is a vastly different game - but still every bit as much predicated on myths.

The conscious will to believe in comforting delusions and to enjoy their very real consequences is strong, but it seriously lacks intellectual honesty and integrity. When religions proclaim their love of truth, they proclaim for all where their true Achilles heel is to be found.

Comments [9]

Kimball Corson
04/06/2013, Pago Pago, American Samoa

The Results from the Sentencing Hearing

The sentencing hearing went off as scheduled this morning in the High Court of American Samoa for the two Samoans who attacked me while sleeping and then attempted to murder me late at night aboard my boat in Pago Pago Harbor by repeated attempts to choke me to death, the last of which almost succeeded. These events occurred in late October, 2011.

The hearing began with arguments to the court by counsel. Then defendants allocuted to the court -- that is, spoke to the court on mitigation and why mercy should be shown them. I was then allowed to address the court and did so at length, explaining what happened and how defendants had attempted, by misrepresentations to the court and the police, to cover up or to hide the central element of their crime.

As they alternatively misrepresented the facts, 1) they came upon me in the condition I was in and never touched me (they were caught literally red handed, however), 2) one began hitting me with his fists while I slept, or 3) one began strangling me while I slept. Take your pick.

I put photos of me, as injured, before the court -- which you have seen here -- taken in the emergency room just after I was admitted, explaining that 1) above was nonsense and 2) and 3) didn't explain all the injuries and blood. Then, I put the photograph above before the court, showing the monopod [an exact replacement, actually] with which they beat my head in as I slept, explaining that was what happen at the outset, that explained the injuries and that defendants had attempted to cover it up by misrepresentations to the court and police.

I went on to suggest there was a sociopathic element in beating someone's face in in that manner while they were asleep, causing a fractured skull and a cracked jaw bone, knocking out two teeth, knocking two more loose, necessitating 29 stitches on that half of my face which was up as I slept on my right side, causing the loss of a quart and a half of blood as well as the other injuries I then sustained before their repeated attempts to choke me to death thereafter. Afterward, the prosecuting attorney, Mitzi Jessop, presented an able and lengthy closing argument and the court took the matter under advisement during a ten minute recess.

Upon the judges return, the court sentenced each defendant to 27 years in prison for the assault in the first degree (here, attempted murder) and to 5 years for burglary, the sentences to be served concurrently. The cruising community, which turned out for the hearing, approved, once the cruisers were outside of the courtroom.

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Kimball Corson
03/23/2013, Pago Pago, American Samoa

Ranking the Economics Departments

US News and World Report ranks the top economics departments in a four way tie for first place: Harvard, Princeton, MIT and Chicago are all tied for the #1 spot. I don't agree. Below is my ranking for those departments on a scale of 1 to ten, first, back in the late sixties when I was at Chicago after turning down acceptance to Harvard, and then, now:

My then and now econ department rankings on a scale of 1 to ten

then (1968)................Now

Chicago 9..................Harvard 7
MIT 7........................MIT 7
Harvard 6..................Princeton 6
Princeton 6................Chicago 5

Needless to say I do not like a lot of what is going on at Chicago today. It, like the others, is stuck in neo-classical economics. But Chicago's models, especially in the hands of Lucas, hold all unemployment is voluntary, financial crashes can't happen and the models don't have financial sectors. Chicago no longer empirically tests much of interest. Chicago believes sometimes in equivalence, Say's law, too much in rational expectations and in many antiquated monetary ideas. They don't teach Minsky and others. They are defenders of conservative, wealthy and backward looking interests and are so biased. They too much control the academic journals. In a word, they are badly stuck in the mud, in my view, and badly slowing progress down.

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Kimball Corson
03/22/2013, Pago Pago, American Samoa

Teachers, Unions and School Closures

Citing budget concerns and falling enrollment, Chicago Public Schools officials announced Thursday they plan to close 54 schools next year and shut down 61 school buildings -- the largest single wave of school closures in U.S. history.

For months, looming closures seemed inevitable. After a teachers union strike last fall concluded with an expensive contract, observers were left without a doubt that the only way the cash-strapped district could afford it was to shut down schools and fire the teachers who worked there.

Unions caused some teachers to get a raise and others to fired. That is what unions often do. Monopoly power increases price (wages here), but reduces the quantity demanded (here, the number of teachers). [an example of why the income restraint forces a downard sloping demand curve]

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Kimball Corson
03/22/2013, Pago Pago, American Samoa

Wegman

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