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Who: Kimball Corson. Text and Photos not disclaimed or that are obviously not mine are copyright (c) Kimball Corson 2004-2013
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Personal News
Kimball Corson
01/26/2013, Pago Pago, American Samoa

Personal News

The second of the two felons who were out on parole and who burgled my boat and attempted to murder me has pled guilty. There will therefore be no trial, only a sentencing hearing for the two of them at which I may speak if the prosecutor and I decide I should. The judge here is an American judge under contract.

Both felons pled to the charge which is a class A felony, carrying a minimum of ten years. More importantly, the burglary and attempted murder charge both specifically pled to carries a sentence of from 20 to life. The prosecutor's office expects a sentence of from 15 to 30 years for each. We will see. Sentencing should occur in about two months.

Hopefully I can get some of my things out of evidence then. It has been an adventure.

NOAA's Local Forecast for Pago Pago Was Hugely Wrong
Kimball Corson
01/22/2013, Pago Pago, American Samoa

NOAA's Local Forecast for Pago Pago Was Hugely Wrong

NOAA provided a local weather forecast for Pago Pago, American Samoa, predicting the effects of adjacently passing Cyclone Garry, to be 55 to 70 mph winds for Monday night (21st) and for Tuesday morning (22nd). The Port Captain believed it, ordered vessels over 200 tons to leave the harbor before midnight , closed the harbor and told smaller craft not to leave port. . The Coast Guard believed it and took their precautions. Many cruisers here believed it and we all prepared accordingly. The forecast was very terribly wrong.

In fact, here is what happened in Pago Pago, according to NOAA's own web site on the last three days of weather history in Pago Pago: highest sustained wind for that period is 21 mph. Highest gust is 23 mph. These figures are from NOAA's own weather history. Not exactly the 55 to 70 mph NOAA forecast for Monday night and Tuesday morning.

I have never seen a forecast so poorly done and badly off. NOAA's forecast also disagreed consistently and at all times with those of the US Navy, Windguru, Passage Weather, US Grib, zyGrib, Intellicast, Weather Channel, Weather Underground, Accuweather and others which called for maximum wind gusts of 26 knots or 30 mph.

It is hard to get more wrong than that.

Private Health Care and Insurance vs. a Single Payor National Health Care System
Kimball Corson
01/22/2013, Pago Pago, American Samoa

Private Health Care and Insurance vs. a Single Payor National Health Care System

Comparing Medicare to private health insurers, insurers have 22 percent of gross as overhead; Medicare, 1 percent. Insurers have profit margins that are very hard to gauge because they are experts at burying and hiding profits from regulators. Nominally, they average under 5 percent, but a better measure is return on capital which is about 16 percent. Medicare's profit margin is zero percent.

And we wonder why health care is so expensive in America and how single payor national health care in other countries could possible work and provide good health outcomes.

Our per capita costs are about $7,000 per annum. The comparable and average figure for other advanced nations with single payor national health car systems is about $2800. Doctor hours spent with patients in the US is only about .6 times that figure in other advanced nations. Health outcomes, as recently reported, are significantly worse in the US, comparatively.

Our system costs too much, provides too little care and yields worse health outcomes. What's not to hate about it?

Human's Race Against Machines: We Are Losing
Kimball Corson
01/22/2013, Pago Pago, American Samoa

Human's Race Against Machines: We Are Losing

Since 2000, the American economy, on net, has produced no new jobs. For those created, as many were lost.

Sophisticated robotics and computerized processes are replacing the jobs lost. Machines are outdoing us and this trend of machines replacing people in the markets for labor is expected to accelerate substantially in the coming decades from what we know of the technology in the wings. Mid and higher level jobs are next slated to be eliminated by machines.

Here is an example of where we are now. Terry Gou is the founder and chairman of Foxconn, an electronics manufacturer. Foxconn announced its plan this year to buy over 1 million robots over the next three years to replace most of its workforce, engaged in welding, spraying paint and assembly. It has 10,000 robots now, with 300,000 more expected to be in place in the next 12 months.

When you consider that our population has grown and is growing, this lack of new job creation is very disturbing. Our population grew by 30 million the last decade, so we needed to create 18 million new jobs to just stay even and have the same percentage of our population remain working. The economy on balance created none. This set of trends has reduced the employment to population ratio from over 64 percent to barely 58 now, in 2013.

And these trends will accelerate. Yet where is our thinking? Where is Washington's? We should be thinking ahead and planning how to handle this situation. Unemployed people have very little income. How will they buy what they need? Who will buy the goods and services our economy will produce? Are we running headlong into the problems Marx predicted? What shall we do? Nothing, until machines start displacing mid-level and high level jobs? Will we wake up then? What does it take?

The 2nd Amendment and Right to Bear Arms
Kimball Corson
01/21/2013, Pago Pago, American Samoa

The 2nd Amendment and Right to Bear Arms

There is little doubt the 2nd Amendment protects the private right to own and keep guns. But what guns? Recreational and defensive guns are not the tools to over throw, in Jeffersonian fashion, an oppressive, tyrannical government. True assault rifles are; those which fire fully automatic, in three round bursts and also in semi-automatic mode, e.g., AR16A3. But such real assault rifles were banned in 1986 and getting one is tough, to say the least.

What we are left with are semi automatic rifles dressed up like Barbie Dolls to look like assault rifles. Regrettably, they are wholly inadequate, but now our government now wants to take those away, too.

Seems we are being pre-empted.

Shooting Skills and the Lack of Need for Large Clips
Kimball Corson
01/21/2013, Pago Pago, American Samoa

Shooting Skills and the Lack of Need for Large Clips

Five rounds is not a joke even when the shit hits the fan, as someone has suggested. The Colt .45 Model 11 clip was usually filled with just five rounds. Big clips are the modern forte of amateurs who either want to kill a lot of people up close or who lack shooting skills and fire a lot hoping to hit something.

Combat pistol shooters are trained to wait until the last 1 1/2 seconds in a tense situation and, if under a steady demeanor, it does not defuse naturally to draw their pistol (even from a concealed carry), fire and put two rounds in the chest at up to 10 meters WITHIN that time frame. This is the minimum acceptable level of competence for basic combat pistol training.

Slinging lead or hosing down the neighborhood hoping to hit something is absolutely amateurish and movie nonsense. Shooters are always trained to hit timely and accurately, whether they be snipers (who more take their time and shoot at distance) or combat pistol shooters for whom accuracy and speed closer in are at a premium (they usually fire within 15 yards).

Trained shooters do not just fire away, eating up ammo and hoping they will hit something. That is silly. In combat, suppression fire can be used that way, but rarely in any other situation. Toting many rounds, again, means 1) you plan to kill a lot of people or 2) you plan to miss a lot. Good shooters DO NOT miss a lot, indeed very rarely.

Sniper kill rates in Vietnam at great distances were 1.3 rounds per kill on average. Combat pistol kill rates, for those trained as such, in live situations are closer to 1.2 where the first shot was fatal which was in over 92 percent of the time. Combat shooters are trained to always fire two to the chest and, if they think a vest is being worn, also one to the head.

For well trained shooters, a ten round clip is a lot of ammo. For the inept, no clip or magazine is big enough.

The NRA is Fighting Over Make Believe
Kimball Corson
01/21/2013, Pago Pago, American Samoa

The NRA is Fighting Over Make Believe

What is being banned is not real assault weapons. They are already largely banned. You know the real full automatics that shoot from 500 to 750 rounds per minute, like the AR16A3, which are used in actual combat where combatants really fight and really get killed. ["An assault rifle is a selective fire (either fully automatic and/or burst, and semi-automatic as well) rifle that uses an intermediate cartridge and a detachable magazine." ]

No, what is being banned are semi-automatic only Barbie Doll look alikes that have the same pistol grips, muzzle brakes/flash suppressors, barrel shrouds and thumb thru stocks like real assault rifles. They are not assault weapons. They are semi-automatics, like I had as a kid as a .22, dressed up to look like assault rifles. They are lethal enough to be sure, but by no means in the same league as real assault rifles. No one in their right mind would want to take a look alike into real combat. The photograph is of a Barbie Doll. Looks real, no?

The goal, you see, is too have your gun look cool, like the big bad ass real thing. That is what the NRA and its fantasy members are fighting over, the right to look like a real SEAL team bad ass. No matter most can't shoot worth a fig, its the cool look that matters.

On a real assault rifle, the copy-catted features serve a real purpose that they don't on copy cat rifles. The pistol grip and thumb through stock help you better hold what amounts to a real bucking bronco in full automatic mode (keeps firing as long is trigger stays depressed). The barrel shroud is so you don't burn yourself by touching the barrel, which gets really hot from shooting fully automatic. The muzzle brake/flash suppressor helps keep the muzzle from rising which happens shooting fully automatic and keeps the enemy from seeing your muzzle flash. Big clips are imperative for the number of rounds full autos can shoot, even in burst mode. A tag along ammo feeder is more like it with a real assault rifle.

None of these features are needed on semi-automatics. But gun cowboys want their semi-automatic rifles to look like the real full auto assault rifles. It really is about having a Barbie Doll. A fantasy toy that is not really a toy. A tough guy look alike implement. To seem like a real bad ass.

That is what the fight is about. A silly make believe fantasy. For that, the NRA and its members want to go to the mat.

Kind of silly, I think.

Another Word on Labor's Plight
Kimball Corson
01/19/2013, Pago Pago, American Samoa

Another Word on Labor's Plight

The idea that workers displaced by machines can go into other productive endeavors is an important one but diminishing marginal results attend the notion. We have played this card for decades and its utility is now wearing thin. That is what it means when the labor/population percentage drops as it has. We only need so many hamburger flippers.

The MIT economist authors of Race Against Machines argue the next wave of technology in the wings will result in 1) a huge net displacement of workers (labor/pop percentage to fall further and much), 2) a worsening in the skew in the income distribution, 3) a further drop in labor's share of income, and 4) permanently reduced aggregate demand with a new attending lower normal.

Aggregate demand has held up as long as it has because 1) government bought more ( two silly wars, etc.) and transferred buying power via the social safety net, and 2) consumers borrowed hugely to hold their standard of living (and are now saddled with too much debt). But now consumers are too much stuck with debt and stagnant or falling incomes and government is cutting back. The economy is too much stuck at a new lower normal.

We are not generating enough jobs to employ even the new entrants to the labor market, much less those displaced by the last recession. Median income has been falling and has been in trouble since the 1970's.

The hand-writing is on the wall. Another dot com, housing or other bogus boom can lift us for a bit, but booms have busts which usually hurt worse than the booms make us feel better. Too, policy makers are learning that and are inclined to meddle less. So expect fewer booms.

It seems that Marx got more correctly than we earlier thought. He may get the last laugh yet.

More on Labor's Share and Position
Kimball Corson
01/19/2013, Pago Pago, American Samoa

More on Labor's Share and Position

" Labor is producing more goods and services per worker but are not receiving a commensurate share of the income produced. Why not? "

Because the productivity of labor has increased hugely (from using more capital = machines), less labor is needed and the demand for labor being somewhat inelastic (for any given level of machines = capital) means that labor's share of national income and the number employed is falling. Labor is being displaced from labor markets by capital improvements and its loss of income share, both in relative and absolute terms -- is impacting its demand in markets for goods and services.

Think of it this way, reducto ad absurdum, when machines can do everything, what are human laborers to do? With all unemployed, where is their income to buy things going to come from? Who will buy things? Markets for goods and services will collapse for want of buyers. This is the extreme position, now in your thinking back away from this position a bit. The same forces are involved, just not as strongly.

Labor's share of income still falls. Unemployment is still high. Aggregate demand is still low. The economy is still depressed. Profits or income to capital remains high for now, but worry is setting in. The fact unemployment is still under 10 percent is meaningless because if you tire of looking for a job and stop, you are no longer counted as unemployed. The correct figure to look at is the percentage of the working age population that is employed and that figure first flattened out and is now falling sharply.

Worse a new wave of the industrial revolution will hit us in the next several decades where robots and computerized machines, using much more sophisticated algorithms, will displace huge amounts of middle and higher level labor on net and skew the distribution of income even more.

And we are sleep at the wheel, arguing about the debt ceiling.

Labor's Share of Total Income
Kimball Corson
01/19/2013, Pago Pago, American Samoa

Labor's Share of Total Income

O.K., so aside from the technical recession when they fell, profits have been sky rocketing, as Fed data show. But now the question is what has been happening to Labor's share of total income? You guessed it. It has fallen.

Citing data from the Bureau of Economic Analysis, one of three data sources used in the report, the Cleveland Fed said labor's share of gross national income had declined to 63.8 percent now after fluctuating around 67 percent during the late 1980s, 1990s, and early 2000s.

This has resulted in a spike in income inequality, the dispersion of annual incomes across households. But, of course, Washington has no policy to address the matter except to discuss the earnest desire of Republicans to not tax the rich at higher rates and to complain about the deficit and how social services should be cut, including Social Security and Medicare.

Worse, Obama goes along, lets them frame the discussion and throws them crumbs from the poor end of the income distribution. It is nuts and reprehensible. We are becoming socially bifurcated.

The Poor Rich
Kimball Corson
01/19/2013, Pago Pago, American Samoa

But don't tax the overworked rich; they don't have enough. They are barely getting by.

On Misunderstanding Karl Marx
Kimball Corson
01/15/2013, Pago Pago, American Samoa

On Misunderstanding Karl Marx

There is a common misunderstanding regarding Marx that contends he advocates totalitarianism and national Socialism like that observed under Stalin in Russia and Mao in China. This just isn't so.

Many acutely misread Marx. He was no more a believer in totalitarianism, terrorism or revolution than Thomas Jefferson. Marx opposed the state, did not advocate a totalitarian state and wished the state to vanish. While Marxism contains many propositions that could imply totalitarianism, it was Marx and Engels' view of the state that it was to eliminate itself and be replaced by a system of communism. But that was the hitch. Greed and power mongering intervened to undermine and subvert the purpose of revolution which was to overthrow capitalist oppressors and acquire their productive assets in preparation for a Communist system.

Promising communism, secretive advocates of totalitarianism and dictatorship concealed their goals and used Marxism to establish a socialist state which they then converted to permanent totalitarian dictatorships, having zero intent to replace the state with a stateless communism sought by both Marx and Engels.

Like Jefferson, Marx believed in revolution to overthrow state and capitalist oppression, but he went further than Jefferson and believed revolution was also necessary to acquire the assets of production from the capitalists, as capitalism failed, so they could be used not just for the benefit of a few, but for the benefit of all. But the goal ever and always was the stateless system of Communism whereby all productive facilities were owned by all (coops, largely) and each was provided for according to his or her need. That was Marx's goal and target. All was subordinate to obtaining that goal. Socialism was simply a transitional phase to acquire all productive assets from capitalists and then turn them over to the Communist system to be owned and operated by the people.

Many of evil intent used Marxism as a stepping stone to socialist dictatorships and ruled by terror, but that was never advocated by Marx any more than Nietzsche was an advocate and supporter of the Hitler and the Third Reich. Marx viewed the state as ever and always the potential enemy of true communism. The goal was to eliminate it, always.
________

My own critique of Marx in a nut shell is this:

1) is not that there will be no revolution or social uprising -- I think that is inevitable if we hold our present course and the new wave of technology hits us as foreseen and our population is displaced from employment markets and as a consequence, from the markets for goods and services for want of income -- but that a state, no matter how well intentioned or altruistic, will never dissolve itself in favor of Communism or communalism. It just won't happen. States act to protect themselves.

2) private property is needed as a concept to assure the proper care and best use of productive assets and

3.There is no workable resource allocation mechanism in the face of scarcity for either a Socialist or Communist system.

The Scandinavian model I have proposed is much more feasible and reaches many of the same ends -- capitalism with private ownership on the front end for production, with a mix of capitalism, socialism and even some communistic help on the back end or in regard to the distribution of income. With the high taxes on the rich and cuts in defense yielding a large social dividend for national health care, infrastructure, higher education and care for the incompetent we can have a fine social system.My own critique of Marx in a nut shell is this:

1) is not that there will be no revolution or social uprising -- I think that is inevitable if we hold our present course and the new wave of technology hits us as foreseen and our population is displaced from employment markets and as a consequence, from the markets for goods and services for want of income -- but that a state, no matter how well intentioned or altruistic, will never dissolve itself in favor of Communism or communalism. It just won't happen. States act to protect themselves.

2) private property is needed as a concept to assure the proper care and best use of productive assets and

3.There is no workable resource allocation mechanism in the face of scarcity for either a Socialist or Communist system.

The Scandinavian model I have proposed is much more feasible and reaches many of the same ends -- capitalism with private ownership on the front end for production, with a mix of capitalism, socialism and even some communistic help on the back end or in regard to distribution. With the high taxes on the rich and cuts in defense yielding a large social dividend for national health care, infrastructure, higher education and care for the incompetent we can have a fine social system. What we have is beginning to fail in too many regards.

Obama to Hatchet Social Security
Kimball Corson
01/14/2013, Pago Pago, American Samoa

Obama to Hatchet Social Security

"According to inside-Washington gossip, Congress and the president are going to do exactly what voters elected them to do: they are going to cut Social Security by 3 percent. You don't remember anyone running on that platform? Yeah, well, they probably forgot to mention it.

"Of course, some people may have heard Vice President Joe Biden when he told an audience in Virginia that there would be no cuts to Social Security if President Obama got re-elected. Biden said: "I guarantee you, flat guarantee you, there will be no changes in Social Security. I flat guarantee you."

"But that's the way things work in Washington. You can't expect the politicians who run for office to share their policy agenda with voters. After all, we might not like it. . . ."

http://truth-out.org/news/item/13889-the-3-percent-cut-to-social-security-a-k-a-the-chained-cpi

The Role of Profits in a Competitive Economy
Kimball Corson
01/13/2013, Pago Pago, American Samoa

The Role of Profits in a Competitive Economy

Most people mistakenly believe profits are the return on capital. Not so. Capital has its own separate return based on the value of its own marginal product. Profits are what is left over after all resources used in the productive process are paid what their marginal value to the process is. Profits are a something extra which has a key role in the economy that is properly grounded in change.

The purpose of profits in a truly competitive economy is to be an extra bit of money received that serves as an inducement for others to enter that industry. Profits attract more capital into that industry. Resources are thereby attracted away from industries that are just breaking even or actually losing money and induced into those with high profits. High profits tell entrepreneurs, capital and resource where they should go. They are a part of the system to create an optimal allocation of resources. In a stable unchanging and competitive economy where resources are optimally allocated, the level of profits in all industries will be zero. Labor and capital will both received a return equal to the value of their marginal values and there is no need for profits to exist to reallocate resources among and between industries.

Most conveniently, accountants don't really or often separate the return on capital from profits. They tend mistakenly to lump them together partly because the owner(s) of the business receive both so who cares. But they are not the same and their purposes are different. Most people therefore don't understand what profits are and what their purpose is.

When American businessmen moved their factories to China to take advantage of cheaper labor there, they received their usual returns on capital there but they acquired a large profit from what they saved on labor. That profit induced more businessmen to move production to China. Earlier, it was to Japan. But now Japanese wages and those in some other RIM countries have risen to levels where American wages are now again competitive.

What we observe is simply the competitive process working to equalize labor costs in the international world economy. Now, to save on labor costs which have risen in coastal Chinese cities, production is being moved into the more rural interior. The pursuit of profits results the better allocation of productive resources as profits work to equalize wages and thereby reduce the profits which induced the reallocations.

Profits can also be ill-gotten gains from taking advantage of natural monopoly elements in a market (large school districts and the market for teachers) or monopoly positions created artificially by establishing barriers to entry into markets. The AMA's restrictions on the number of doctors produced, thereby pushing their incomes above competitive levels and including an element of monopoly profit in those incomes. Competitive incomes would be those where all who could and wanted to went to medical school, all things considered.

That is what profits are and how they work in a competitive economy. That is also how they don't properly work in an economy with inadequate competition, usually because of legal restrictions which serve special interests at the expense of others or other what are called "barriers to entry."

Hegal, Marx and American Conservatives: views in conflict
Kimball Corson
01/13/2013, Pago Pago, American Samoa

Hegal, Marx and American Conservatives: views in conflict

There is a static theory of capitalism that laborers and capitalists interest are the same. That is the trickle down theory of economics that American Republicans and conservatives hold so near and dear. It is also called supply side economics. If the government will but cut their taxes and reduce the impediments of market regulation, the capitalists will invest, the economy will boom and the rising economic tide will lift all boats and improve the lot of everyone in America.

It is all a lie. The economic system does not work that way for several reasons. First, when taxes were in fact lowered and regulations reduced, American capitalists moved their production to China. They closed American factories, fired American employees and hired Chinese works for their new factories abroad. Saving much on labor, American capitalists became very rich and losing their employment, American laborers became much poorer. The distribution of income here became massively skewed in favor of the rich. The trickle down theory of supply side economics became the trickle up theory of economics that belies the core theory of capitalism in several important regards.

Secondly, and worse for the trickle down theory even in just the US, the consensus among economists is 1) many markets do require good regulation or they fail. We saw this recently on Wall Street in the financial markets for packaged mortgages. 2) studies now show that within the ranges we observe, lower or higher income taxes do not materially affect the level of aggregate economic activity. Where taxes are lowered, taxpayer have more money to spend, the government, less, and visa versa. This should come as no great surprise. Both of these notions cut strongly against supply side economics and the trickle down theory.

I have repeatedly shown that what is offered as trickle down theory is actually trickle up theory in practice, skewing the income distribution, and making a fraud of the first theory which is so beloved by American conservatives. So, not only do they need the new supporting constituencies they have long alienated, as shown by the last presidential election, but they now also need a new economic theory to show labor's and capital's interests are the same and consistent with each other. In this latter effort, they run head long into Karl Marx who argues that is impossible.

We know very little about the economics of Karl Marx because, unlike in Europe, economists here refuse to study him because it is frowned upon by their corporate research sponsors. But Marx has much to say about our economic situation, having predicted the skew in the distribution of income, how new machines are increasingly displacing labor, how labor is being shoved out the labor markets and left idle, how capitalists are having more trouble finding buyers for their goods and what the likely consequences of all this are.

Marx took his cue from Hegel's theory of dialectics. Ideas compete and struggle against each other, are discredited in the process, but from such destruction emerges a new, more acceptable and vital synthesis of thought. He saw the same dialectical process at work in the economic world of materialism.

The basic conflict was between the activities of capitalists and those of laborers. While they cooperated well initially in the production process -- the first and most vital and successful stage of capitalism -- their interests seriously diverged, largely because of the desire of capitalists for more profit, which they got largely by two means 1) acquiring and using market power to take more of labor's share, and 2) displacing labor with capital or machines to reduce labor's share of the income from production and increase theirs. But there is a hitch here as we will see.

The second stage of capitalism, according to Marx, is the growing struggle between capital and labor leading to the mechanization of labor's work and the displacement of labor. This is his theory of surplus labor. Marx thought that the defining features of capitalism were the alienation of the worker, the exploitation of the worker and the recurring, cyclical depressions leading to ever more unemployment which would rise further as more machines replaced more laborers.

And the last stage of capitalism that Marx foresaw is what happens when labor is too much left idle and poor, and rich capitalists have most of the income, but also face seriously shrunken markets lacking buyers in which to sell an ever larger supply of goods. They will see their profits fall and their social position of dominance challenged. The ultimate consequence Marx predicted was Socialism where the state steps in to remedy the situation for the population.

The Marxian dialectic of materialism is proving to be true. The surplus of labor is growing. Future vindication of Marx will be redoubled in the coming decades, when, as is now predicted, substantially new robotics and computerization will displace many, if not most mid and upper level jobs. This will result, economist predict, in an even larger net displacement of labor from the labor markets, on top of what we already have, and a further skew the income distribution causing ever new and ever lower normals as we watch capitalism progressively fail. The problem of course is that Americans will not be able to buy the ever increasing production of new goods.

Marx got dialectical materialism and the surplus theory of labor much more correctly than we would like to believe. Now we await the further demise of capitalism he predicted and the consequences of that which he also addressed. The handwriting is on the wall.

That economists don't study Marx in the US is inane.

 

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