Archive for November, 2009

Less Government Regulation Series: Google (Nov. 30, 2009)

Posted in Antitrust, Civil Rights/Civil Liberties, Google, Internet, Less Government Regulation Series, Privacy, Society, Technology on November 30, 2009 by

“Nine years ago, you purchased the book ‘Privacy Issues Today.’  Another critically-acclaimed work purchased by others who purchased this book is available for only $29.95.  Just click below and we will bill the credit card on file.”

A courtesy or a curse?  This solicitation may not be from Google, yet the same problem with privacy is lurking.  You can drive to the store, purchase a pickle, pay with cash and leave only your image on the closed circuit cameras in the store and perhaps in the parking lot.  If you pay with a credit card and/or provide a customer identification number, there is an electronic fingerprint.  However, those records typically are static and rarely mined for information.

In response to a typical search request, you might be informed:

“Did you mean: (one of our advertisers)”  (Note:  Not all of the top responses are advertisers.)

A person today cannot not use Google.  Google cannot not make a record of the search history.  Google is collecting far more information than any public or private entity should be allowed to collect, retain, sell and inevitably manipulate.  The computer motherboard has become the new Big Brother.

Possible copyright violations by Google can be and are being challenged publicly.  By contrast, invasions of privacy are usually done privately and are far more elusive to detect and remedy.

In economics, a “natural monopoly” occurs when, because of the economies of scale of a particular industry, the maximum efficiency of production and distribution is realized through a single supplier.  In some cases inefficiency may occur.  The electric utility is a prototypical “natural monopoly.”  The usual market does not support two entities providing electricity in one market.  Thus one entity is allowed to operate a monopoly subject to government regulation.  Google has emerged as a natural monopoly.  Or perhaps a traditional monopoly.

Government regulation should be eschewed, they say.  They are correct.  Government regulation on a good day is often bad.  It is time for a serious debate on the need to regulate Google.

Before it is too late.  Although it may be too late.

Bumper sticker of the week:

In mathematical terms, a google is 100000000000000000000000000000000000000000000000000000000


In privacy terms, a Google is 1984.

Domestic Economic Terrorism and National Security (Nov. 23, 2009)

Posted in Bailout/Bribe, Economics, Economics Nobel, Education on November 23, 2009 by

. . .

“Their secret badge gives them away.  They sport the tell-tale ‘White Bling-Bling’ – the porcelain American flag on their blue serge suits.”

“And are themselves among the most vocal boosters of the ‘war on terror.’”

“They really are the economic terrorists.  And irony is not their strong suit.  I never fail to be amazed that the economic terrorists are roaming freely within our borders.  Their economic shenanigans produce absolutely no real economic, financial and/or fiscal benefit of any kind for anyone but themselves.”

“Look at it from their perspective.  They acquire a thriving company created and developed by others over years or decades, loot any funds for themselves, vest it with unbearable debt, fire the employees and ramble on to the next victim.  You have to admit that they are doing something.”

“There is no justification, no explanation, no rationale, and no excuse for their activities.  They steal from the public and ultimately loot the public fisc.  Can you name three individuals who have legitimately made a fortune in the last decade?”

“By name?”

“The robber barons of old actually produced something.  They produced a railroad or a newspaper or a steel plant and then endowed a university and a foundation.  Today’s economic terrorists are above the law because they own those who make the laws and those who interpret and enforce the laws.  The profitable universities exist to vet and supply obedient new recruits.  The Nobel Committee awards their mathematical sophistry.  The federal government rewards and bribes and bails out the players at every turn.  Everything is working against us.”

“And there is nothing you can do about it.  Nothing.”

“There are at least six major cavils with their exploits.  These economic terrorists threaten the efforts of generations of Americans who worked and sacrificed to:

form a more perfect Union,

establish Justice,

insure domestic Tranquility,

provide for the common defense,

promote the general Welfare, and

secure the Blessings of Liberty to ourselves and our Posterity.”

“And thwart the pursuit of happiness.”

“That too.  Willfully destroying the American economy is also willfully destroying America.  That is a threat to American security.  That is treason.”

. . .

[See the “e-ssay” dated Nov. 27, 2006 entitled “Higher Education Tomorrow” discussing the pipeline of privileged kids pouring into I (investment) banking, the “e-ssay” dated Feb. 23, 2009 entitled “Close the Harvard Business School,” the “e-ssay” dated Oct. 6, 2009 entitled “Skip the Nobel in Economics?,” and the “e-ssay” dated Feb. 9, 2009 entitled “1000 AUSAs” suggesting that a return to the rule of law or a turn to the rule of law is warranted.  That will require the courts to issue many warrants.  The other “e-ssays” collected under the “Categories” for “Economics” and “Federal Reserve” among others provide additional pieces of the puzzle.]

Take it easy Thursday.

Bumper stickers of the week:

Support the “War on Terror”: Indict an Economic Terrorist

Better to know the judge and to own the lawmakers than to know the law and adhere to it.

V, W, U, S or . . . L: The Shape of Things to Come (Nov. 16, 2009)

Posted in "L" Shaped Economy, Economics on November 16, 2009 by

Everything that goes down must go up, they say.  It is one of Newton’s or Van Braun’s laws.  Some are saying that the performance of the economy will resemble the letter “V.”  Down then up.  Some say a “W.”  Down then up then down then up.  Some say a “U” with perhaps a long trough then up.  Some say an “S” because the fundamentals are so squirrelly. The logic undergirding the arguments is that the economy will recover because it has always recovered; that is what economies do.

What if the economic performance will be reflected by the letter “L?”  Lima.  Loser.  Down then flat then flat then flat.  What if the economy never recovers or only partially recovers?  Past economic recoveries are explained by scrutinizing the economic fundamentals at the time.  The problem now is that the American economy is fundamentally broken.  None of the optimists can posit a model that reflects the actual fundamentals in the economy.  Everyone would like to see a recovery, yet there does not seem to be anything that will drive and sustain the economy in the intermediate run.

The federal government owes staggering sums to the Chinese, etc.; corporations owe staggering sums to their bond holders; Americans owe and owe and owe staggering sums.  The threats to the economy are far greater than they were in the Fall of 2008 when everyone got apoplectic.  Uncollectable credit card debt, growing housing foreclosures, vacant commercial real estate and hollow corporations obligated for trillions in debt are among the coming economic tsunamis.

Invest in a wheelbarrow.  To haul your bread (money) from your banker to your baker to buy a $100 loaf of bread.

[See the “e-ssay” dated Oct. 22, 2007 entitled “Greed on Steroids” that discusses among other matters the looming intermediate term problems with leveraged buyouts and the consequences for the economy in particular employment.]

Bumper sticker of the week:

“Everything that goes up must come down.  But there comes a time when not everything that’s down can come up.”      George Burns

Consume, Don’t Invest? (Nov. 9, 2009)

Posted in Consumerism, Economics, Society, Spending on November 9, 2009 by

We have been consuming far too much for far too long.  And now someone is saying that we should start consuming more?

Homes are amassed as investments.  (“We will double our money in three years.”)  Wine, etc. is acquired because it is a good play.  (“These bottles will pay off big time at maturity.”)  Art is not art because it is artistic, it is art because someone will part with more money for it.  (“I hadn’t heard of him either, but it will only go up in value especially when he dies.  . . .   Frankly, I don’t like his stuff either.”)

Seems that one should pick up a home to provide comfortable and affordable living space.  Purchase wine to enjoy.  Collect art to delight, shock, evoke, challenge, inspire, threaten, entertain, etc.

Consume responsibly; invest wisely.

Bumper stickers of the week:

Work, Buy, Consume, Die.         Why?

Home appreciated home.

A home to inhabit, wine to imbibe, art to admire.

Sagacious Financial Advice From A Financial Sage (Nov. 2, 2009)

Posted in Bailout/Bribe, Economics on November 2, 2009 by

“Son, I’ve got two pieces of advice for you.  One, never let your investments out of your sight.  Two, never give your money to someone else to invest.  And while we are at it, a third piece of advice.  Never trust a banker.”

The work “banker” is derived from the word for “bench” because individuals waited on a bench to obtain a loan.  We may need to bench the bankers.  The entire economic system is premised and predicated on trust and yet the entire American economic system is built on deception and mistrust.

Bumper stickers of the week:

Re-enact The Glass-Steagall Act

Never Trust a Banker (What about a credit union officer?)