Monday, October 31, 2011


Carolyn Lerner, head of, the United States Office of Special Counsel, has some bad things to say about the Hatch Act, which she must enforce. It "is broken and needs to be fixed"

She's right.

As originally conceived, the Hatch Act protected the federal civil service and military officers from being forced to take part in partisan activities. That's good. I was under that protection for thirty years and welcomed it.

But then it expanded to prevent certain local, county and state employees from running for public office because they are in some way, no matter how trivially, tied to a source of federal funds in their professional lives. The law is most frequently used to prevent deputy sheriffs from running against their bosses.

As presently enforced, the law works as an incumbent protection program. In her article in yesterday's New York Times, "A Law Misused for Political Ends," Lerner makes clear what is wrong and how to fix it. There is even bipartisan support in both houses. But Congress is paralyzed.

If you agree, write your representative (Walter B. Jones) and both US senators and ask them to get off the dime.

Drug Shortages Kill Americans

I was pleased to learn this morning that the president will issue an executive order to resolve critical shortages of drugs for treating life-threatening illnesses, including cancer.

Shortages kill. To be more precise, the illnesses do the killing, but shortages of drugs and consequent inability to treat the illnesses prevent doctors from prolonging life.

My sister was a victim of shortages. One drug (the most effective in my sister's case) was withdrawn from the market because it didn't prove effective in very many cases. Translation: not enough customers. The next drug selected by the oncologist simply couldn't be located because of shortages.

We will never know how much the shortages curtailed my sister's life. Would she have lived a day longer? A month? A year or more? We have no way of knowing.

Still, we know that shortages have increased greatly in recent years, endangering thousands of lives. This shouldn't happen in America.

It's time to do something about it. If Congress won't act, then the president must.

Humor, Censorship and Self Censorship

I try to be reasonably clear where I stand on public issues, but to speak to the substance of policy outcomes instead of relying on ad-hominem arguments. The truth is, that focusing on policy issues frequently comes out as dry as sand. Makes it hard for people to focus.

Sometimes a bit of humor makes the point clearer and also easier to swallow. Unless the humor descends into a mean sneer.

I was a bit taken aback today when a friend of the republican persuasion concluded that I have been too hard on republicans lately. I admit I've been paying attention to the republican debates and find it hard to say anything positive, especially about their economic views. Or their foreign policy views either, for that matter. Still, I don't want to descend into invective. If I oppose a particular policy, I have reasons. Problem is, the reasons may seem a bit Wonky. And I don't for a minute believe that every republican swallows every line put out by the candidates.

I have mentioned before that about sixty-five years ago I tried my hand at a bit of satire. I worked on an underground newspaper at Ole Miss that criticized the state's policy of segregation. That was a dangerous thing to do, but I thought it important enough to take the risk. I've never regretted it.

Doing satire well is a challenge. Sometimes the target of the satire believes you are on his side. Sometimes it just becomes mean. But in a repressive society it may be the only option. I'm out of practice and haven't tried it much lately.

All of this came to mind today when I read the account in the New York Times magazine section of the uses made of humor, satire, puns, visual jokes and other creative efforts by Chinese dissident cartoonists. They use the internet to pierce the efforts at thought control by Chinese authorities.

Read the article: "Where an Internet Joke Is Not Just a Joke." The article also calls to mind the successes of Czech cartoonists in using humor to satirize life in Communist Czechoslovakia. But this isn't just a problem in communist countries. Authoritarians everywhere seem to lack a sense of humor. It is often said that liberals have no sense of humor either, but that isn't accurate.

Saturday, October 29, 2011

Pride Of A Father For A Woman Officer

Received the latest copy of The Military Officer. Among the articles is a brief, eloquent essay on page 58 by Col. Charlie King, USA-Ret "On the Day My Daughter Became an Officer."

The essay makes clear what it means to take the oath to "discharge well and faithfully the duties of the office which I am about to enter." As Col. King explains, it means far more than following orders.

It's worth reading and contemplating.

How 'Bout That Herman Cain?

Many political analysts have been puzzled by the Herman Cain phenomenon. One of the most puzzled has been the statistical analyst Nate Silver on his blog, fivethirtyeight. In the end, Silver concludes that Cain is a statistical outlier and he (Nate) has no idea how to make a prediction.

Not so with the blogger Amanda Marcotte at the blog Here is what she has to say:

"Herman Cain's temporary surge in popularity baffles much of the press, but it honestly doesn't surprise me that much. There's always been a strain of conservatives---the ones who say, "I'm really more libertarian"---who missed out on the 60s and so want to reimagine themselves as dangerous rebels who are out to get The Man, except in this case The Man is ordinary working people who are oppressing the beleagured wealthy class. You don't know downtrodden until The Man, in his greedy grasping for health care and a humble pension, makes you downgrade to a smaller yacht and reduce your summer house options to a mere two or three. Luckily, the downtrodden rich have "libertarians" out there who imagine they're being radical and subversive by calling for regressive tax structures. These folks are Cain's base. Who else do you think is buying all those stupid Harleys?"

That offers a whole new perspective on lawyer and doctor bikers.

On second read, I have to admit that there is a sneering tone to Amanda's observations which I have decried elsewhere.  So while I am personally more comfortable with Nate Silver's cerebral style, I couldn't resist Amanda's more visceral take. So sue me.

Warren Buffett Hoax

I just received for the umpteenth time an internet hoax (in this case attributed to Warren Buffet) purporting to forward an e-mail about a proposed 28th amendment. The amendment, it is claimed, would "fix" congress.

One of the things I have learned over the years when someone forwards a report alleging nefarious actions by public officials that are so bad they are hard to believe, is that they are probably not true. That is the case with this one.

It is a good idea to check with various sites that investigate possible internet hoaxes, such as In this case, here is a link to's discussion of this particular item: rates the e-mail as "mostly false." I rate it lower than that. It appears to be a concerted effort to discredit the entire U.S. Congress and to promote some really bad ideas on the basis of false information. By the way, I am fairly certain that Warren Buffet had nothing to do with the e-mails, though his idea about deficits is also a really bad idea. How does he propose to deal with emergencies such as wars and depressions?

I will insert my comments after each paragraph:

Sent: Sat, Oct 22, 2011 6:42 pm
Subject: Fwd: Warren Buffett's proposal

Warren Buffett
in a recent interview with CNBC, offers one of the best quotes about
the debt ceiling:

"I could end the deficit in 5 minutes," he told CNBC. "You just pass a
law that says that anytime there is a deficit of more than 3% of GDP,
all sitting members of Congress are ineligible for re-election 

That's a really bad idea. What do we do in an emergency? Like a War? Like a depression? There are times when a deficit is really good. There are times when a surplus would really be good.

The 26th amendment (granting the right to vote for 18 year-olds) took
only 3 months & 8 days to be ratified! Why? Simple! The people demanded
That was in 1971...before computers, e-mail, cell phones, etc.

Of the 27 amendments to the Constitution, seven (7) took 1 year or less
to become the law of the land...all because of public pressure.

Warren Buffet is asking each addressee to forward this email to a
minimum of twenty people on their address list; in turn ask each of
those to do likewise. 

I doubt that.

In three days, most people in The United States of America will have
the message. This is one idea that really should be passed around.

Congressional Reform Act of 2011

No such act has been introduced.

1. No Tenure / No Pension.
A Congressman collects a salary while in office and receives no pay
when they are out of office. 

Members of Congress have no tenure now. Their pensions result from a contributory retirement plan just like that of other federal employees.We even have term limits. They are called elections.

2. Congress (past, present &future) participates in Social Security.
All funds in the Congressional retirement fund move to the Social
Security system immediately. All future funds flow into the Social
Security system, and Congress participates with the American people. It
may not be used for any other purpose. 

Members of Congress have participated in the Social Security program since 1984.

3. Congress can purchase their own retirement plan, just as all
Americans do. 

They do.

4. Congress will no longer vote themselves a pay raise. Congressional
pay will rise by the lower of CPI or 3%.

See Amendment 27:

Amendment 27 - Limiting Changes to Congressional Pay. Ratified 5/7/1992. History
No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened

5. Congress loses their current health care system and participates in
the same health care system as the American people.

Members of Congress have the same health care system as is provided to all other federal employees.

6. Congress must equally abide by all laws they impose on the American

There is only one provision in the Constitution relating to this: [Members of the House and Senate] "shall in all Cases, except Treason, Felony and Breach of the Peace, be privileged from Arrest during their Attendance at the Session of their respective Houses, and in going to and returning from the same; and for any Speech or Debate in either House, they shall not be questioned in any other Place." This protects the people's representatives from harassment by law enforcement officials of the executive branch, especially of a different party.

7. All contracts with past and present Congressmen are void effective

What contracts? Hard to make sense of this.

The American people did not make this contract with Congressmen.
Congressmen made all these contracts for themselves. Serving in
Congress is an honor, not a career. The Founding Fathers envisioned
citizen legislators, so ours should serve their term(s), then go home
and back to work.
If each person contacts a minimum of twenty people then it will only
take three days for most people (in the U.S.) to receive the message.
Maybe it is time.
If you agree with the above, pass it on. If not, just delete. You are
one of my 20+.. Please keep it going.

Please don't.

It would be foolish of anyone to claim there are no problems with the Congress. There are.  Mostly they are problems with the Senate, which was the least representative legislative body in the western world (except for the House of Lords) to begin with. Current procedures on cloture make it worse. That needs to be changed. But changes like that need to be handled with care.

It Isn't Greece - It's the Euro

Strong concerns yesterday about the European debt package adopted last Wednesday/Thursday by the EC were expressed Friday by both economists and investors. Economist Kash Mansori reported the results of Friday's auction of Italian bonds.

I have cruised the internet this morning, reading blogs of respected economists, and haven't found a single one who is confident that the rescue plan will work. It's no longer about Greece - it's about Italy and Spain and more importantly, about the survival of the Euro project itself. It would be more reassuring if the European Central Bank seemed committed to doing everything necessary. No such signals have been received.

What should the message be? How about: "It's the Euro, stupid!"

Friday, October 28, 2011

Keep Your Eye On The Ball

In case you joined the parade of optimists thrilled by yesterday's step back from the brink by European banks, here's one of today's posts by Paul Krugman:

October 28, 2011, 8:09 am

Here We Go Again

European leaders reach an agreement; markets are enthusiastic. Then reality sets in. The agreement is at best inadequate, and possibly makes no sense at all. Spreads stay high, and maybe even start widening again.
Another day in the life.

Thursday, October 27, 2011

Qaddafi's Demise, Part II

Three days ago I posted a comment on Qaddafi's demise, including some cryptic historical references.

Yesterday's New York Times printed a more complete account by the historian Simon Sebag Montefiore. Montefiore compares the death of Qaddafi to deaths of other tyrants in history.

The headline of the article says it all: "Dictators Get The Deaths They Deserve."

Wednesday, October 26, 2011

Contempt For Working People; Contempt For Democracy

It has long been obvious that many republicans, especially the Tea Party kind, have little but contempt for people who work for a living. They despise labor unions and public employees, but also look down on anyone but (to quote the words of William Jennings Bryan more than a century ago) "the few financial magnates who in a backroom corner the money of the world."

This contempt is reflected in the sneering tone of commentary about the "Occupy Wall Street" movement, but also in other comments that pass for political discourse these days. Here is an example recently brought to my attention. It is posted on the web site of the Asheville Tea Party in Buncombe County, North Carolina:

Ineptocracy (in-ept-o-cra-cy)

A system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

 A question that comes to mind is, "just what have the top one percent of earners in this country actually produced lately?" Do they produce anything but deals? If so, I'd like to know what.

I would like for folks who write such things and think such thoughts to turn their energies to a thoughtful examination of what kind of a country we want the United States to be.

As I drive around the country, I see crumbing roads and bridges, decrepit school houses, general decline in public infrastructure. This isn't because our public servants don't do the best they can with what they are given to work with - it's because of the "we're too poor to do that - we can't afford it - we're broke" mantra. As I have pointed out before, that didn't keep our forebears from turning the great depression into the Age of Great (and lasting) Undertakings.

The Rich Get Richer

Yesterday's New York Times reported on a new Congressional Budget Office report that the top one percent of earners in the United States doubled their share of the nation's income since the late 1970's.

Unlike some economic statistics, this is a win-lose proposition. The share of the nation's income received by the lower 99% has decreased by 9%.

From the NYT account, specific increases and reductions in the share of national income were as follows:

"¶ The share of after-tax household income for the top 1 percent of the population more than doubled, climbing to 17 percent in 2007 from nearly 8 percent in 1979.
¶ The most affluent fifth of the population received 53 percent of after-tax household income in 2007, up from 43 percent in 1979. In other words, the after-tax income of the most affluent fifth exceeded the income of the other four-fifths of the population.
¶ People in the lowest fifth of the population received about 5 percent of after-tax household income in 2007, down from 7 percent in 1979.
¶ People in the middle three-fifths of the population saw their shares of after-tax income decline by 2 to 3 percentage points from 1979 to 2007."

Why did this happen? The rules changed to benefit the already wealthy.

Presidential candidate William Jennings Bryan described the process in 1896:

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

What happened after 1979? The political rise of "supply-side," "trickle-down" economic actions. A kind of reverse Robin Hood policy. This was not new. Such thinking was plainly evident to William Jennings Bryan in 1896. And the results were foreseeable.

Tuesday, October 25, 2011

Brussels Meeting Canceled

Tomorrow's meeting in Brussels of European Union Finance Ministers has been canceled. Apparently the ministers have been unable to craft a financial rescue package not only for Greece, but also for Italy and Spain. A meeting of EU leaders will go on as scheduled. The expectation seems to be that the prime ministers will work something out and provide direction to the finance ministers.

Doesn't sound good. The usual way in international negotiations is for functionaries and responsible ministers to work out the details and for the principals to meet and ceremoniously announce the resulting agreement. When the procedure is reversed, it doesn't bode well for agreement.

This is of interest to us because? The EU as a whole is a larger economy than our own and is our largest trading partner. Economic contraction in the Euro zone would be bad enough, but a crisis in the European banking system will inevitably spread to the US.

Cross your fingers that they will work it out. Don't, however, hold your breath.

Plus ça change, plus c'est la même chose

The more things change, the more they stay the same. The French got that right.

I just read through William Jennings Bryan's "cross of gold" speech of 1896. On the face of it, the issue was whether to have a gold standard or to have free coinage of silver at a ratio of sixteen to one (sixteen ounces of silver would have the same value as an ounce of gold.) But the real issue was the desire of the lending class (creditors or rentiers) to insure a "stable currency" as against the need of cash poor and debt-burdened farmers, small businesses and wage earners for easier money. With minor editing, the speech could still be given today. A few excerpts:

"When you tell us that we shall disturb your business interests, we reply that you have disturbed our business interests by your action. We say to you that you have made too limited in its application the definition of a businessman. The man who is employed for wages is as much a businessman as his employer. The attorney in a country town is as much a businessman as the corporation counsel in a great metropolis. The merchant at the crossroads store is as much a businessman as the merchant of New York. The farmer who goes forth in the morning and toils all day, begins in the spring and toils all summer, and by the application of brain and muscle to the natural resources of this country creates wealth, is as much a businessman as the man who goes upon the Board of Trade and bets upon the price of grain. The miners who go 1,000 feet into the earth or climb 2,000 feet upon the cliffs and bring forth from their hiding places the precious metals to be poured in the channels of trade are as much businessmen as the few financial magnates who in a backroom corner the money of the world."

"They criticize us for our criticism of the Supreme Court of the United States. My friends, we have made no criticism. We have simply called attention to what you know. If you want criticisms, read the dissenting opinions of the Court. That will give you criticisms.

"When I find a man who is not willing to pay his share of the burden of the government which protects him, I find a man who is unworthy to enjoy the blessings of a government like ours."

"There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

Monday, October 24, 2011

Qaddafi's Demise

I was a bit surprised at the call for an investigation into the circumstances of Qaddafi's death.

My first reaction: who cares?

Qaddafi's supporters might care, and may wish to use the information to stir up a new civil war.

My advice? Let the Libyans sort it out. Not our job.

Municipal Elections; Write-Ins

I've had some questions lately about the rules for voting in municipal elections, especially rules for writing in candidates. Here are some answers:

1. The only competitive municipal race in Pamlico County is the three-candidate race for mayor of Oriental;

2. Eight of the nine municipalities in the county have the same number of candidates for board of commissioners as there are open seats. Vandemere is one candidate short;

3. Voters need not vote for any of the declared candidates - they may write in candidates of their own choosing;

4. The ballots contain enough blank lines to write in names for each opening;

5. Voters need not select a candidate for each vacancy - it is acceptable to vote for a single candidate or for none at all (blank ballot);

6. Candidates may, but need not, publicly state their willingness to serve as a write in candidate;

7. Write in candidates who spend ANY money on the campaign must establish a campaign bank account and are subject to the same financial reporting requirements as a declared candidate.

Sunday, October 23, 2011

Greece, Debt, Capital, And The Whiskey Rebellion

European finance ministers are meeting today to craft a solution to the Greek debt crisis.

The more I read about the so-called Greek sovereign debt crisis, the more I am convinced that the Eurozone as currently structured has been a vast mistake. Of course, the powers that be in Europe will never admit this. They will figure out a way to blame and punish the present victim (Greece) and possible future victims (Italy and Spain), and to avoid placing any significant burden on the real perpetrators, German banks. Well, not only German banks, but also French, Benelux and Finnish banks.

As for Greece, the beatings will continue until morale (or the economy) improves. The beatings themselves will make it impossible for the economy to improve.

How did Greece get in this pickle? Private capital movements over which Greece had no control, and which were the prime motivation for creating the Euro in the first place. In short, wealthy owners of capital in the heart of Europe wanted more freedom to invest in the periphery at higher interest rates.

The economist Kash Mansori has an excellent explanation of the process in a recent edition of The New Republic.

Some of the "blame Greece" rhetoric reminds me of accusations bandied about concerning balance of payments issues (current accounts) back when the world operated with fixed exchange rates. Under the Bretton Woods system established under the guidance of John Maynard Keynes at the end of World War II, persistent balance of payments imbalances were expected to be addressed by exchange rate adjustments by both the country in deficit and the country in surplus. That never happened. The country in surplus always blamed the country in deficit and the latter had to devalue its own currency. Surplus countries never adjusted.

When Greece joined the Eurozone, they adopted a currency with the most fixed exchange rate of all. No adjustments possible. Therefore, instead of simply devaluing their own currency, Greece must increase taxes (in a depressed economy) and reduce expenditures (including social benefits which are already below much of the rest of Europe).

What else can Greece do? Induce a greater recession than the rest of Europe. Drive down wages and prices which, by the way, depresses government revenue and worsens the deficit. The Greek economy just isn't big enough to accomplish all that by growth.

What does this have to do with the Whiskey Rebellion?

In 1790, the newly-established US Congress agreed to consolidate federal and state debts, principally for revolutionary war expenses. Anticipating this, wealthy Eastern capitalists bought up largely valueless state revolutionary war bonds at pennies on the dollar (or pence to the pound as the case may be). The 1790 agreement, which made sense from the standpoint of establishing the "full faith and credit" of the United States, resulted in a windfall for the speculators who had bought state bonds. But how to repay the debt?

Alexander Hamilton pushed a whiskey tax. It passed the Congress in 1791 and ran into immediate opposition.

The problem? The tax burden fell most heavily on small western yeoman farmers beyond the Appalachians, many of whom paid debts in whiskey, due to a regional shortage of money. Collecting the tax would contract an already marginal regional economy. There were uprisings in the west, mainly in Pennsylvania, but also in Maryland, Virginia and North Carolina. President Washington led forces against the rebels, the rebellion was put down, and federal authority established.

Many westerners continued to evade the tax, and it was repealed after Thomas Jefferson became president.

At this remove, it seems fair to see the tax as a measure to redistribute wealth from the poor to the wealthy.

Were there other commodities Hamilton could have taxed? Tobacco comes immediately to mind. But he would have to have dealt with wealthy and powerful tobacco interests instead of corn farmers.

Power to the powerful - wealth to the wealthy!

Annual Migration

Sat on the porch of the Village Gallery yesterday afternoon overlooking Oriental harbor. A steady stream of boats, some sporting Canadian ensigns, but all with northern hailing ports, entered the harbor for the night.

The annual migration of those seeking warmer climes has begun.

Welcome to Oriental.

Saturday, October 22, 2011

On Economics And Writing

I have mentioned before that Paul Krugman is my favorite economist.

He is my favorite not only because I admire his analysis and find his insights insightful. He is my favorite because his writing is clear and usually to the point. Sometimes I think he misses a point or overemphasizes one issue over another, but usually find him not only on target, but illuminating.

How does he do it?

One of today's blog posts explains:

Paul Krugman
October 22, 2011, 3:02 pm

But, And, Why

Every once in a while I get correspondence from someone chiding me for the way I write — in particular the informality. I received one the other day complaining about sentences that begin with “but” or “and”. There is, however, a reason I write this way.

You see, the things I write about are very important; they affect lives and the destiny of nations. But despite that, economics can all too easily become dry and boring; it’s just the nature of the subject. And I have to find, every time I write, a way to get past that problem.

One thing that helps, I’ve found, is to give the writing a bit of a forward rush, with a kind of sprung or syncopated rhythm, which often involves sentences that are deliberately off center.
More broadly, the inherent stuffiness of the subject demands, almost as compensation, as conversational a tone as I can manage.

My bible in all this is George Orwell’s Politics and the English Language. I recommend, in particular, reading his translation of good English, from the King James Bible, into bad modern English. The original:
I returned and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all.
The translation:
Objective considerations of contemporary phenomena compel the conclusion that success or failure in competitive activities exhibits no tendency to be commensurate with innate capacity, but that a considerable element of the unpredictable must invariably be taken into account.
Economics writing can all too easily end up sounding like the second version. You might even say that it wants to sound like that. So you have to make a real effort to ensure that it doesn’t.

Friday, October 21, 2011

On Wall Street and Bailouts (Calvin And Hobbes)

Economist Antonio Fatas brings us to an old Calvin and Hobbes cartoon strip illustrating the thinking of Wall Street titans:

Early Voting

One-stop/early voting opened yesterday at the Pamlico County Board of Elections office for the towns of Alliance, Bayboro and Oriental. Ten voters cast their ballots - eight from Oriental and two from Bayboro.

Thursday, October 20, 2011

Hurricane Volunteers

Last night we met a very fine group of young Lutheran students from UNC who have come to Oriental to help in hurricane recovery. We're fortunate to have high quality volunteers like these. They wasted no time getting to work and accomplished a lot. They are staying at the Methodist recreation hall and will be going out to work at Goose Creek Island tomorrow.

Voting Starts Today

Voting in municipal elections starts today at one-stop for towns that have authorized absentee balloting. In Pamlico County, the towns are Alliance, Bayboro and Oriental. Pamlico County's one-stop location is the Board of Elections office at the court house annex in Bayboro.

Wednesday, October 19, 2011

Oriental's Mayors Race Forum

Last night's forum of Oriental's mayoral candidates proved quite interesting.

I won't comment on the performance of individual candidates. As a member of Pamlico County's Board of Elections, I am prohibited from publicly supporting or opposing the election of any particular candidate. I want to avoid even the appearance of support or opposition. Even with that limitation, I think there are useful observations to make.

Interest in the election seems higher than any of us expected. Eighty-eight interested citizens attended the forum. That represents about a third of the expected turnout for a municipal election in Oriental. That's a lot.

A number of the questions from the audience concerned preparation for and recovery from hurricanes. That was to be expected, as recovery from hurricane Irene dominates every resident's daily life and will continue to do so for months.

What was unexpected was a large number of questions on past issues that had been settled or seemed to have been settled. Among the themes:

1. What are the plans for Oriental's police force?;
2. The firing of town manager Randy Cahoon and the disposition of the report that cost the town $21,000;
3. Should the town have zoning? (All three candidates supported the need for zoning);
4. Do the candidates support outdoor amplified music?;
5. What about pool halls?;
6. Closed meetings;
7. Circumstances of the town's non-renewal of flood insurance (I was one of the deciders, and after Irene, I posted a comment on the decision).

All three candidates emphasized that we have a council-manager form of government, meaning that the board hires the town manager. The manager, in turn, is in charge of managing, hiring and firing staff, including police officers.

I think everyone who attended learned a lot about the candidates and about town government.

A Really Long Graph of 9-9-9

Economist Jared Bernstein today comments on candidate Cain's 9-9-9 plan and shares a graph that illustrates clearly the answer to "who benefits and who pays."

Here's the graph:

Tuesday, October 18, 2011

9-9-9 Abracadabra, Presto Change-o Poof!

Paul Krugman has posted the Tax Policy Center's analysis of Herman Cain's 9-9-9 plan. TPC's analysis doesn't even address the "what becomes of Social Security and Medicare without the payroll tax" question. Here is Krugman's post with links to the sources:

October 18, 2011, 5:27 pm

TPC Does Herman Cain

The Tax Policy Center has the distributional analysis of 9-9-9. It’s awesome:
Howard Gleckman summarizes:
A middle income household making between about $64,000 and $110,000 would get hit with an average tax increase of about $4,300, lowering its after-tax income by more than 6 percent and increasing its average federal tax rate (including income, payroll, estate and its share of the corporate income tax) from 18.8 percent to 23.7 percent. By contrast, a taxpayer in the top 0.1% (who makes more than $2.7 million) would enjoy an average tax cut of nearly$1.4 million, increasing his after-tax income by nearly 27 percent. His average effective tax rate would be cut almost in half to 17.9 percent. In Cain’s world, a typical household making more than $2.7 million would pay a smaller share of its income in federal taxes than one making less than $18,000. This would give Warren Buffet severe heartburn.

Candidate Forum

Tonight at 7:30 the Old Theater in Oriental, there will be a candidate forum for the three mayoral candidates.

Out of Pamlico County's nine municipalities, the only contested race is Oriental's race for mayor.

The forum could be interesting, and offers a chance to ask questions just before the election.

Voting for Alliance, Bayboro and Oriental begins the day after tomorrow during one-stop voting at the Board of Elections office in Bayboro. One-Stop continues until 1:00 PM Saturday, November 5th. Election day is November 8th at the usual election location in each municipality.

Don't forget to vote.

Seven Lies

Economist Mark Thoma in his blog today quotes from Robert Reich's analysis of "The Seven Biggest Economic Lies." He then adds seven more of his own.

It's worth reading the blog post to follow the comments.

Mark Thoma:

Robert Reich:
The Seven Biggest Economic Lies, by Robert Reich: ...Here’s a short ... effort to rebut the seven biggest whoppers now being told by those who want to take America backwards...:
1. Tax cuts for the rich trickle down to everyone else. Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.
2. Higher taxes on the rich would hurt the economy and slow job growth. False. From the end of World War II until 1981,... the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. ...
3. Shrinking government generates more jobs. Wrong again. It means fewer government workers – everyone from teachers, fire fighters, police officers, and social workers at the state and local levels to safety inspectors and military personnel at the federal. ...
4. Cutting the budget deficit now is more important than boosting the economy. Untrue. With so many Americans out of work, budget cuts now will shrink the economy. They’ll increase unemployment and reduce tax revenues. That will worsen the ratio of the debt to the total economy. The first priority must be getting jobs and growth back by boosting the economy. Only then, when jobs and growth are returning vigorously, should we turn to cutting the deficit.
5. Medicare and Medicaid are the major drivers of budget deficits. Wrong. Medicare and Medicaid spending is rising quickly, to be sure. But that’s because the nation’s health-care costs are rising so fast. ...
6. Social Security is a Ponzi scheme. Don’t believe it. Social Security is solvent for the next 26 years. It could be solvent for the next century if we raised the ceiling on income subject to the Social Security payroll tax. That ceiling is now $106,800.
7. It’s unfair that lower-income Americans don’t pay income tax. Wrong. There’s nothing unfair about it. Lower-income Americans pay out a larger share of their paychecks in payroll taxes, sales taxes, user fees, and tolls than everyone else. ...
Seven more: tax cuts pay for themselves, regulation and uncertainty are holding back the economy, there are plenty of jobs but people don't want to work, Fannie, Freddie, and the CRA caused the crisis, CEOs deserve their high incomes, most unemployment is structural, and regulating the financial sector will harm economic growth. (And, for good measure, global warming doesn't exist and if does exits it wasn't caused by people. Even if it was caused by people, carbon taxes are still bad.)

Monday, October 17, 2011

Cardinals Vs. Rangers? What Gives?

I don't suppose I'm any more surprised than anyone else that the baseball playoff series sent Saint Louis and Texas to the World Series.

Not exactly a subway series.

For you youngsters who don't know what a subway series was, that was a series where the fans could get to all of the games on the subway. It might have happened, for example, between the Boston Red Sox and the Boston Braves. Or the Philadelphia Philles vs. the Philadelphia Athletics. Or more likely, the New York Yankees vs. either the New York Giants or the Brooklyn Dodgers. About the only place a subway series might happen today is between the San Francisco Giants and the Oakland Athletics. Would that be a BART series? Washington Nationals vs Baltimore Orioles doesn't qualify, either. It might be a MARC series.

The first World Series I remember was the 1947 series between the New York Yankees and the Brooklyn Dodgers. A subway series.

World Series games were daytime games until 1971. The exception is the final inning of the 1949 series was played under the lights. Otherwise the game would have been called because of darkness.

We had no television in Midwest City, Oklahoma in 1947. We followed the World Series on radio. My sixth grade teacher let the class listen to the games. I was the only member of the class who knew how to keep score, so I chalked a big scorecard on the blackboard and kept score during the games. It was a pretty exciting series, going seven games. Even then, I rooted for whoever played the Yankees, but it was in vain. Brooklyn lost.

I'm sure we learned something during those October afternoons, but I don't remember what it was.

Saturday, October 15, 2011

Marvelous Music

The Old Theater resounded this evening with music provided by the Borromeo String Quartet.

The founder of the quartet and native of Durham, Nicholas Kitchen, introduced each piece with an explanation of how it fit in the composer's life and work.

As appropriate for the Old Theater, the concert consisted of old music: by Bach (1685-1750), Beethoven (1770-1827), and Schubert (1797-1828). But the oldest item on the program was cellist Yeesun Kim's Peregrino Zanetto cello, made about 1576.

Nicholas Kitchen emphasized that the quartet's violins, viola and cello had no electrical or electronic components. The sound they made was totally acoustic, using ancient technology.

But there was modern technology on the stage. On the music stand in front of each player was an Apple Macintosh laptop, which displayed the entire score. Pages of the score were turned by a foot pedal fabricated by Mr. Kitchen who paged forward as necessary, allowing each player to be on the same page.

The 435-year old cello filled the air with rich, mellow sound. I would love to hear the same instrument perform a cello concerto.

Apparently the Macintosh computers (circa 2010) performed impeccably as well.

The concert might have served as a paean to the late Steve Jobs.

Friday, October 14, 2011

There Is No Perfect Boat

One of the things sailors learn early on is that there is no perfect boat. Boat designers have to first learn the purpose for which a boat will be used before putting pencil or pen to paper. If the boat will be used for more than one purpose, he must craft a compromise design (racing and cruising, for example).

Dogma has its place and sometimes intrudes. Almost always to the detriment of competition with designs crafted without dogma. The best case study of a boat designer little hampered by dogma and free to follow design considerations wherever they led was Nathaniel Herreshoff. His designs were so successful in competition that they were often banished from racing by rules changes.

In my view, the tasks of government should be managed by people untrammeled by dogma, focusing only on the aim or goal of government policy.

But we seem unable to agree on goals.

I believe the goal of economic policy should be to craft policies that work. But work to what end? To the end of general prosperity.

Not necessarily equal prosperity, but neither should the end sought be vast inequalities.

From the beginning of the New Deal until some time in the 1970's, our general economic prosperity was the envy of the world. It was a time of strong labor unions, effective government regulation of banks and corporations, of steeply progressive income taxes. And a prosperous middle class.

In recent years it has become fashionable to speak of the generation that lived through the depression, went off to triumph during World War II and returned to the GI Bill and jobs that built our postwar prosperity as "the greatest generation."

They surely merit our admiration.

But in my view the greatest generation were the leaders who had the vision and persistence to guide us through this economic catastrophe and succeed in war and reconstruction afterward. That generation was born in the late nineteenth century, educated early in the twentieth century and with formative experiences during and after World War I.

This was my grandparents' generation, not my father's.

The guiding principal of my grandparents' generation, at least among the best leaders, was to question dogma and abandon it if necessary. Do what needed to be done, in a rational way after studying the problem.

This generation and the generation before them built the Brooklyn Bridge, America's great railroad system, designed and built automobiles affordable by working families, set aside national forests and parks for public enjoyment, and generally fashioned a world we all could enjoy.

They certainly had disagreements among themselves, but in general were able to debate public issues on their own merits.

This tradition is fading.

One place the tradition had continued was in weekly discussions on National Public Radio between Robert Reich, President Clinton's Secretary of Labor, and David Frum, a former speech writer for George W. Bush.

Last Wednesday, David Frum withdrew from the radio show on the grounds that he can no longer represent the views of the Republican Party.

Robert Reich lamented that decision on the grounds that we need to explore and debate issues on their own merits, not on the basis of dogma.

Reich is right.

What Does Government Do For Us?

I have been watching the Republican presidential debates with some sense of wonder. As in, I wonder what world the candidates inhabit.

When Ronald Reagan ran for president, he famously intoned: "government isn't the solution - government is the problem." The present batch of candidates takes this mantra to new levels.

It isn't true.

But we seem to have a national amnesia about the role of the federal government in fostering the degree of prosperity that we enjoy. The "Tea Party" and their adherents seem bent on destroying the structure that has built that prosperity.

An integral part of the attack on our general prosperity is an attack on the New Deal. This is nothing new. Republicans attacked the New Deal from the beginning and have been attempting to undo it ever since.

The attacks only began to achieve success in the late 1960's, after a generation came along with no personal memory of the Great Depression and the New Deal and no recollection of the poverty and backwardness of much of rural America before the New Deal.

I am old enough to have seen remnants of the poverty that preceded the New Deal and to have witnessed the transition to greater prosperity that the New Deal set in motion. Just last month I drove through rural Mississippi on highways built during the depression (my father worked on some of them), past schools built by the Works Progress Administration, along recreational waterways held in check by flood control projects. I drove past farms that wouldn't have electricity without the Rural Electrification Act of 1936.

Michel Hiltzik has published a timely book, The New Deal: A Modern History. Yesterday's edition of the on-line magazine, Slate, published a good review of the book and a summary, drawn from the book, of the New Deal's accomplishments. It is worth reading the review here.

It occurs to me that, by comparison to the visionaries who led America out of a very dark time in our history, today's Republicans have a cramped, crabby and very limited vision of our country.

But if we have eyes to see, here in Pamlico County, we see the New Deal at work. We have not been left to our own devices to recover from a major hurricane. Both as individuals and as a county and a state, we have been saved from total economic collapse by measures put in place by the New Deal. Without those measures, banks would have collapsed and even more jobs would have been lost.

Things could be a lot worse, and without the New Deal, they would be.

But the enduring accomplishment of the New Deal is that leaders of that effort had a vision of the future. That vision of Americans working together for progress and improvement dominated government planning and accomplishments for nearly half a century.

Let's not lose the vision.

Voter Registration

If you need to register to vote in next month's municipal elections, today is the last day.

Unless you live in Alliance, Bayboro or Oriental. Those three towns have absentee and one-stop voting, starting next week on the 20th. Residents of those three towns can register and vote the same day during one-stop. One-stop takes place at the County Board of Elections office at the court house in Bayboro. For details, call Lisa Bennett at 745-4821.

Wednesday, October 12, 2011

Mosquito Matters

The mosquito truck just drove by the house. I think I saw a flock of mosquitoes cavorting in the fog.

Do you suppose they have learned to eat the anti-mosquito stuff when they run out of human blood?

Layaway: Pay Now (And More), Get Later

Some time back, I mentioned the layaway programs of the thirties as a precursor of "buy now, pay later," the extension of consumer credit to those with modest incomes. Today's New York Times has an article putting layaway in its historical context. The article explains why Wal-Mart's recent announcement that they are reinstituting layaway is not good news for consumers.

Some economists are describing the recent economic downturn as a "balance sheet recession." This means that people are spending less not only because they are unemployed or underemployed (as last Friday's jobs report shows), but also because wages are declining, along with the value of the most valuable household asset, the home itself. So banks and corporations are rolling in dough, but won't lend to consumers. And consumers, in turn, are desperately trying to pay down debt instead of incurring new obligations.

So Wall Street's excesses are hurting Main Street and indeed contributing to the reduction in aggregate demand that is contracting the whole economy. No wonder demonstrators have decided to occupy Wall Street.

Tuesday, October 11, 2011

Voter Registration for Municipal Elections

Just a reminder: voter registration books in Pamlico County close this Friday, October 14 for municipal elections. Voters in three towns, however, will be able to register and vote during "one-stop" early voting, which begins October 20 and continues until 1:00 P.M. Saturday, November 5. Election day is November 8th.

Voters in municipalities that have opted to provide absentee voting (which includes "one-stop" or early voting at the court house in Bayboro) are allowed to register as well as vote during one-stop.. This applies to voters from Alliance, Bayboro and Oriental.

Voters who have been temporarily displaced by hurricane Irene need not change their registration, so long as they intend to return to the same abode.

Don't forget: there are no unimportant elections.

Monday, October 10, 2011

Voter Fraud?

I want to share an editorial in today's New York Times entitled "The Myth of Voter Fraud."

As the article points out, there are almost no occurrences of voter fraud in the United States. The George W. Bush administration unleashed their Justice Department to vigorously pursue voter fraud, even to the point of firing their own appointed US Attorneys who were unable to find evidence of such fraud.

There are instances of mistakes, but the numbers are so small that if the government were run like a business, the owners would spend no money trying to reduce the vanishingly small numbers further.

But that isn't the real agenda.

Wake County Board of Education Elections

Interesting article in today's News and Observer: "Wake Voters Should Check Districts." 

Tomorrow is the election in Wake County for the board of elections. The problem is that board of elections districts have been redrawn to reflect results of the 2010 census. Usually, the Board of Elections would have sent voter cards to registered voters notifying them of their new districts.

The Wake County Board of Elections asked the Board of Commissioners to appropriate sufficient funds to do the mail out, but the County Commissioners declined.

Part of the problem is that there would have to be another mailing, in any event, after redistricting is completed for state offices and the US Congress. No one knows how long that will take.

So many Wake County voters may show up tomorrow at the wrong polling place.

Fortunately, we have no such problems in Pamlico County.

Double Ten: China's Revolution

Today is the one hundredth anniversary of the beginning of the uprising that overthrew the Manchu Dynasty and established China as a republic under Sun Yat-sen.

The Republic of China (Taiwan) celebrates "Double Ten" as China's national day, as do many overseas Chinese in other countries. The event truly was crucial to China's eventual modernization and its transformation from a source of luxury goods (silk, tea and porcelain) to a modern industrial nation.

There were many obstacles and detours along the way, including the Opium Wars with England (1838-1842 and 1856-1860), the Tai Ping Rebellion (1850-1864), the Sino-Japanese War (1894-95) and the Boxer Rebellion (1898). These events led to the partition and control of China (at least the trading centers) by Western and eventually Japanese imperialist powers.

One of the goals of the 1911 uprising was for China to eventually reestablish control of her own territory and people.

It took a long time, but few can dispute that China has finally achieved that goal.

Saturday, October 8, 2011

Re Shoring

For a long time now American manufacturers have been moving their operations off shore. Many have moved to China.

It seems fair to ask whether these manufacturers are American at all. Most of us would at least hope that American businesses would do everything in their power to continue operating from American soil and contributing to American prosperity.

I have talked about this with an industrial designer who visits Oriental from time to time. He and I share the view that many manufacturers have moved offshore for very minor benefits.

Last Thursday's Financial Times reports that the trend may be reversing itself. Some factories whose products in recent years were entirely manufactured in China are now moving back to the US.

Among the factors supporting such a move: US producers are becoming more competitive; US-based factories can respond more quickly to customer desires; products are freed from shipping delays; customs issues do not arise.

FT calls the process "re-shoring." I would have thought "on-shoring" (opposite of "off-shoring") would be more appropriate.

This might be good news. One reason China works so hard to control their currency exchange rate is to try to prevent companies from returning to the US. But China's labor costs are rising.

Friday, October 7, 2011

Chinese Acrobats

A bill is working its way through the US Senate that would retaliate for Chinese currency manipulation by raising tariffs on certain Chinese manufactured products. The bill has raised the usual cries of alarm: "Awk! Free Trade!" opponents shout.

A bit of history is in order.

From the end of World War II until the 1970's, exchange rates for currency used in world trade were fixed. That is, they were firmly set. The Japanese Yen, for example, traded at an exchange rate of 360 yen to a dollar. That was the rate for years.

We would hear from time to time about a "balance of payments" problem or a "gold flow" problem. That might be caused by a country persistently buying more goods and services abroad than it sold abroad. That caused a balance of payments deficit. Another country might have a balance of payments surplus.

It was the intent of the Bretton Woods system established near the end of World War II that such a circumstance would be addressed by adjusting the relative value of currencies. The country with a persistent surplus would increase the value of its currency and the country with a persistent deficit would reduce the value of its currency. Trade would then more readily approach balance.

This almost never happened. In practice, only the country with a persistent deficit would adjust its currency by a devaluation. One day, for example, a British Pound might be worth 2,000 Italian Lira and the next day worth 2,200 Lira.

Fortunes could be made speculating in currency. Suppose you had one day converted two million Lira to pounds. If you timed it right, the next day the thousand Pounds you bought would be worth two million two hundred thousand Lira. More interestingly, the very fact that you had bought the thousand pounds (and other speculators did so as well), put pressure on the Lira, increasing the likelihood that the Italian central bank would devalue the Lira.

George N. Halm, my professor of international economics, was one of the leading economists who advocated doing away with fixed exchange rates, replacing them with flexible rates. Under the flexible rate system, it was thought, more gradual adjustments would allow the foreign exchange market to make continual adjustments. This would do away with the instant fortunes to be made by speculators.

But what if, instead of speculators, a large government with (practically) unlimited resources were to manipulate the market to give their industries a significant trade advantage?

It seems clear that is exactly what China is doing.

Here's a graph provided by economist Jared Bernstein, illustrating what China is doing.

Tuesday, October 4, 2011

Closed Town Meeting October 4

After completion of the agenda, Commissioner Bohmert moved to close the meeting for "personnel."

I think I have mentioned this before, but the relevant provision of NC General Statutes has no general "personnel" exception to the Open Meetings Law. There are in fact four separate purposes relating to personnel, and the motion to go into closed session must specify which one. They are:

a: To establish or instruct the staff or agent concerning the negotiations of the amount of compensation or other terms of an employment contract.
b: To consider the qualifications, competence, performance, condition of appointment of a public officer or employee or prospective public officer or employee.
c: To hear or investigate a complaint, charge, or grievance by or against a public officer or employee.
d: To plan, conduct, or hear reports concerning investigations or alleged criminal conduct.

Neither I nor anyone else attending tonight's meeting has any idea which of the above authorized purposes was effected by the closed meeting.

The meeting was, therefore, improperly closed.

If any member of the Board of Commissioners is interested in making a correct motion to go into closed session, I recommend the model motion posted on the web site of  Western Carolina University here.

Oriental Town Meeting October 4, 2011: Rainy Day?

Bizarre town meeting tonight. Only four commissioners present (Commissioner Styron was absent).

After an interminable discussion of minutes, the board considered a request by the town manager to amend the budget. Purpose: to appropriate funds to pay bills incurred and projected for hurricane clean up and remediation, including mosquito control. When two commissioners pointed out that there are still unexpended funds in the budget, the manager explained that he has no authority to expend those funds for any purpose other than the authorized line items. Except for hurricane expenditures, the approved budget is being implemented with no problems. He further explained that hurricane expenditures will be reimbursed 75% by FEMA and 25% by the State of North Carolina. The purpose of the amendment is to allow the town to pay its bills before FEMA and state reimbursements are received.

"Well what if they don't reimburse us?" Commissioner Johnson asked. "I'm worried that the Oriental taxpayers will be stuck with the bill."

After reiterating that he has negotiated the details both with FEMA and the state and explaining that he is carefully establishing a project number for each job, following FEMA guidelines, the manager posed a key question. Suppose there were no FEMA and no funds from the state. Is there anything the town is doing (debris pickup, mosquito control, etc.) that the board wouldn't want the town to do anyway. He received no answer.

The board rejected the motion to approve the budget amendment.

Commissioner Johnson then introduced a new motion to approve a smaller amount than requested for hurricane debris pickup and for mosquito control.

A similar series of actions first rejected a requested amendment to the water fund, and then approved a lower amount than requested.

"Oh, we don't want to dip into the reserve fund," Commissioners Johnson, Roe and Bohmert explained.

In many states, the reserve fund is known as the "rainy day fund."

We just had a very rainy day (Irene) and the health and welfare of the residents of Oriental are seriously threatened. And our commissioners want to dither about whether to pay for contracted services for which we will be reimbursed.

Looks like tonight was another rainy day at the meeting.

Cracks In Flood Aid

Last Sunday's Sun Journal had an article examining cases of victims of hurricane Irene who "fell through the cracks" in FEMA's flood relief efforts. The stories concerned those whose houses had been flooded during hurricane Isabel and had received flood relief assistance to repair their houses. FEMA had informed them they must get flood insurance or they would not be eligible for repair assistance in the future.

Some blame FEMA for not providing repair assistance to these victims. But the decision doesn't lie with the Federal Emergency Management agency. The policy was set by the US Congress.

Last Friday's New York Times had a very interesting debate by five experts entitled Who Benefits From Federal Flood Aid? The debate examines a number of problems with federal flood aid, including the federal flood insurance program itself.

An underlying assumption of much of the discussion is that people who live in areas prone to flooding are sufficiently wealthy to be able to afford insurance that covers flood damage. Or they shouldn't build there.

But what of the 90 year old widow living on social security in the house she grew up in? Or the minimum wage worker living in manufactured housing in a low cost area? What of a person whose choice is between buying food or paying for flood insurance? A person who lacks the resources to move?

None of the solutions presented in the New York Times debate addresses these questions.