patrick.net

As for interventionist policy, I say "raise the gas tax 10 cents a month for the next 16 months- use the 320 billion per year (each penny is aprox. 2 billion of rev. annually) to build and operate REAL high speed rail across the entire nation. Require all suppliers to be domestic. This puts people to work both building and operating the system."

Oh, by the way, why didn't the govenator do this?

It gets confusing because I’m not sure what cash really is. If taxpayers lose all their money, they could print more and pay themselves back. Would that be inflationary?

Absolutely it would be. It's only the fact that money is balanced by debt that money creation by banks is not usually very inflationary. Take away the debt side (say everyone is liberated from their mortgages), and leave the credit side (every body gets to keep the money they have in the bank), and you'll get an explosion of inflation like never seen before.

I searched for the word "asset" in the above an so far it has been used only twice in this thread.

Sure, money has an equivalent in labor. It also has an equivalent in assets.

The problem with money is when there is a big imbalance between the amount of monetized assets versus the amount of monetized labor(per year, or whatever). At some stage there is a tipping point, and people start realizing that it is foolish to labor when instead one cane just speculate on the value of assets and make "money" that way. And then it is all downhill from there.

Where is the tipping point? I should check, but I'd say if the total value of all assets is higher than 5x the total amount of wages (actual wages, not capital gains) paid out in a year, there is trouble on the horizon.

Why 5x? Partly rectal extraction, partly an extrapolation of house=3*grosswages.

Taxing firearms is just subverting the second amendment further, and generally taxing things at different rates is very un-libertarian.

If it were up to me, all Inter-Nut Libertardians would be rounded up and sent to GitMo.

Then I would cut off all supplies to the island and all the 'free market' to create Utopia.

kewp fer prezidant!

Legalize it.

Don't criticize it.

Obama looks like the kind of cat that would pass the dutchie if you catch my drift...

Two definitions of "asset" I find helpful.

1) anything which has been improved by labor.

A rock isn't an asset, but add labor and it becomes a statue.

2) any physical thing which yields a net positive on your income sheet. i.e. it makes money.

Note the second simply destroys the notion that typical mortgage pits are "assets".

And a definition of money: any recognized medium of exchange which can be traded for goods, assets, or labor. Right now, you can pay me in gold, electronic numbers in my bank account, or slips of oddly colored paper. Tea leaves or cows or bags of salt? Not so much.

Patrick,

Interesting thread btw. I tend to look at this in practical terms. When we were young ( life held limitless possibilities ) and in ways that 'may' still come to fruition! But let's get real here, all during the boom we talked to people -already- in their late 40's and even their 50's that were foaming at the mouth to sign up for 30 yr. mortgages on homes that would 'never' be paid off!

I guess the better question is, why were these Jumbo mortgages written in the first place? Each of our bottom lines are a little different but if you're 50 and would 'like' to retire at 60, you and the wife only have 10 years left in the workforce. Your options are dwindling. Your combined income ( for simple math ) is $100k X 10 years = $1 mil. You just signed a mortgage for $1.2 mil. So now I guess we have to extend the debate into "over time"?

Congressional Sound and Fury Over Wall Street Bonuses Sure to Signify Nothing

http://www.nakedcapitalism.com/2009/01/congressional-sound-and-fury-over-wall.html

I’ll say just tax oil, booze, tobacco and firearms at 100%. Use the money collected to extended UE and create food stamps.

I'll say we just tax you at 150% and use the money for a patrick.net down-payment pool.

Let's have a quick vote here. :)

Aye.

As for interventionist policy, I say “raise the gas tax 10 cents a month for the next 16 months- use the 320 billion per year (each penny is aprox. 2 billion of rev. annually) to build and operate REAL high speed rail across the entire nation. Require all suppliers to be domestic. This puts people to work both building and operating the system.”

Interventionist policies do not work. The best way for the economy is to let everything come crashing down and let enterprising people rebuild the empire.

I’ll say we just tax you at 150% and use the money for a patrick.net down-payment pool.

Hey, said tax booze @100%. That's an effective 150% tax for me!

DinOR, Always nice to have you pop in. Woke up with a feeling of dread yesterday morning at that thought of the "stimulus" package and Keynesians running amok. Couldn't help but think of your "Hitting the wall at 100mph" aphorism -- except this time I fear the US government is going to give it a go. Evidently the market is having second thoughts too (see price of gold). I think I need a pep talk from one of the resident deflationistas.

Keynesians running amok

They are scarier than zombies.

kewp,

I hope there are not many people like you around. If you lived in the Weimar Republic, you would have been one of the many people standing by as millions of people were sent to their deaths.

Hilter loved gun control. If I had been in Germany at the time, I would have been an outlaw.

On second thought, if I lived in California with what I have, I would be an outlaw.

It is about time to slap some protectionist policy all around. Bravo Obama.

What is the point if I am living in the richest country in the world having to be exposed to melamine food scare? Why should China-made low quality ingredients infest every single aspect of my life? Why should I let my neighbors lose their jobs to China and India and create a hallowed out community around where I live and be exposed to unemployment crime?

This is a country rich in natural and human resources, and if we close our door tight entirely, it won't be the Americans that will suffer the most. So close the door, either default completely on our debt or just give them more freshly printed USD, let the other countries eat cake.

Certainly one's hours of labor are limited -- 40x52=2080 per year. But mass production quantities are just about unlimited -- mp3 files? So there is more value in equity than in labor. You can spend a few hours making a machine that makes products...then it is very valuable to own that machine.

On second thought, if I lived in California with what I have, I would be an outlaw.

"Assault" weapons? Or "unsafe" handguns?

And unless I'm mistaken, the Nazi's had guns too. Lots of them in fact. Good ones, even!

TOB,

I never owned any property in China, it is a personal principal of mine not to own any immobile assets in developing countries. I shorted the red chips from the peak all the way down :-) My biggest gain last year was by shorting BIDU.

I always wonder what makes liberals believe that outlawing guns can keep outlaws from owning guns.

The 2nd Amendment is arguably the most important amendment. The sixteenth is the least important and the most harmful.

Peter, be careful what you call a liberal. Being liberal is not bad. Being a leftist is bad. I do not consider them the same.

I know... most of my friends are (left-ish) liberals. :)

If they are "bad" why would I still befriend them?

Well... California.

In fact, even leftists are not so bad. They are bad only if they implement leftist policies.

Bad was not the best description. The leftist policies are bad. I also think the policies of the right are wrong.

What OO said.

"( see price of gold )" No Jive! Wow.

For me the broader point is, if there was a disconnect between incomes and home prices ( it was doubly so for the disconnect between incomes and actual labor! )

Some kind of twisted IPO/Start-Up scenario where people from all walks willingly subjected themselves to all manner of abuse if it meant they would become "rich, Rich!" ( so they ostensibly wouldn't be subjected to abuse ) ? WTF?

Sadly I feel the seeds of the 'next' bubble already being sown. Don't you just get the sense that others around us are already jockeying for position? Only this time they'll be smarter.

How about some good news? Last week I said the Fed's balance sheet could dip below $2 trillion. Check it out; Reserve Bank credit fell to $1.91 trillion, mainly on the strength of the improving commercial paper market (and declining repos). The last TAF auction only fell by $2 billion, so I'm not yet ready to declare victory (over the "credit crisis", and then we can get back to our regularly scheduled depression -- err, recession).

"It is about time to slap some protectionist policy all around. Bravo Obama.

What is the point if I am living in the richest country in the world having to be exposed to melamine food scare? Why should China-made low quality ingredients infest every single aspect of my life? Why should I let my neighbors lose their jobs to China and India and create a hallowed out community around where I live and be exposed to unemployment crime?

This is a country rich in natural and human resources, and if we close our door tight entirely, it won’t be the Americans that will suffer the most. So close the door..."

I see. Said another way, I got mine, I exploited the largesse of American society tolerating the H-1 program to make my fortune in the fortress, secure a foothold in the USA so I won't be subjected to chaos if things implode in my country, and, now that I've done that, time to close the door behind me because I got mine.

Got it.

sybrib,

I was never a Chinese citizen, so I don't care whether things implode there from day one.

And I never said H1B should be abandoned, I just think it should be tightened to reflect the economy. People migrate to the US not because they want to live in a third world country, but because they want to live in a first world country. Since I am a US citizen, shouldn't I care about what happens to the US than other countries? Shouldn't all US citizens would rather have other countries implode than the US?

I see.

Now that I've taken full advantage of America's culture of relative openness for immigration, now that I can count on protection of that US passport, now that I've got mine, time to close the door to the rest of the world.

Sybrib,
Being that the US of A is a democracy and I believe the majority of people are against H1B's then they should no longer exist. Whether you are for or against H1B's there is a need to make logical arguments, not emotional arguments. I think that in a recession they should cease, but if there is truly a need then great come on in. The fact that I know of a lot of great out of work engineers and that the large company I work for is still hiring H1B's really does not make sense. I have sent e-mails but we will see where that goes.

slumlord,

I hear ya, and I agree.

There's also a whole lot of "Now that I got mine, the problem with this (new) country of mine is all those goddarn foreigners they keep letting in". And this message seems to come loudly from those who wherever the heck they came from, were able to exploit privilege and American largesse to come here for grad school, an H-1 job, by various loophole hook and crook or whatever (sometimes marriage) turn that temporary privilege into a green card and then, particularly if from a country like Taiwan where they can get conscripted into a conflict, or China where they can get caught up in a political powderkeg, exempt themselves from those unfortunate situations by doing what it takes to become a US citizen. Wall themselves up in privileged Fortress neighborhood enclaves of like-minded folks. Fair enough. The American Dream. I suppose that my ancestors some of whom who arrived at Ellis Island and others who were early Puritan settlers in the Bay Colony were not too much different.

But then, now that we're here in the common fraternity of "citizens" safely ensconced in our Fortress Situation, well, now the whole damned problem is all those H-1's that "we" keep lettin' in, allowing themselves to be exploited at the expense of those of us who're already part of the fraternity. And oh by the way, now that I got mine, why the hell don't we build a Great Wall on the Mexican border to keep all those people out who live out their character at great risk to life and limb to feed their family?

That's the kind of folk we attract in Silicon Valley I suppose.

But damned if anyone else ought to be

I don’t think Left or Right are bad. Freedom is a precious and fragile balance of both.

I agree. One should be free to choose his philosophy and world view.

Does anyone around here speak Russian? I'm still stuck trying to read the graphic at the head of this thread.

The fact that I know of a lot of great out of work engineers and that the large company I work for is still hiring H1B’s really does not make sense.

Companies that lay off engineers should be banned from petitioning to hire new H1-B engineers (or processing green-card applicants) within x months of the layoff. If they claim that the layoffs were for a different skillset, the onus is on them to prove that existing staff could not be retrained. It just seems logical.

The main problem with H1-B during the boom years was not the program itself, but its flagrant abuse. The legislative intent was subverted and exploited significantly.

SP,
I agree with you. I have gone through a bunch of requisitions that my company is hiring H1B's for and forwarded them to friends so that they can apply for them. I have also sent e-mails to higher ups telling them that in a recession it is not right to hire H1B's seeing as we have plenty of out of work people here. We will see if anyone responds.
A good percentage of higher ups in the management chain are immigrants or H1B's, so I tried not to offend them and they need to understand that once you are here you are American and your allegiance is to the USA not any other country or peoples.
If we get into another tech bubble in the future and there are truly not enough qualified people here then I welcome anyone from any country to come help us be more competitive.
As far as abuse of the H1B program, I don't even want to get started.

Once you own a business your objective is to seek profit. In a capitalistic society, this is the right way to do.

Repeat after me, a business does NOT exist only to provide employment.

It is not right to ask companies to hire only from a group people, or to ask people to only work for a few industry sectors. When supply and demand meet, there is a deal.

Employers and employees cross paths only to satisfy market needs. This is an invariable truth.

How much money can these companies save anyway? Does it even worth the trouble?

SP, then the solution would be to go after the abusers.

We need few regulations in the society. But we must strongly enforce those regulations evenly.

The legislative intent was subverted and exploited significantly.

Yet another reason why legislation can never solve any economic problem.