Money

As a country we are spending a lot of money on a lot of things and as a result we end up having big bills to pay just like any other person who spends a lot of money. Now the government raises money in three different ways each influences the way we live and how much money we make and are worth. The first is raising taxes. Natural when the government needs to raise money it can do so by increasing taxes but it can't do so unlimitedly because taxes cause deadweight loss (a term we use in economics to represent the surplus lost that would have arisen if there was no tax). Another way the government can raise money is just by printing more money. This has a side effect though, because the new money doesn't necessarily represent any new value that is added to the economy it devalues all the other currency in circulation. This means the very dollar bill in your pocket is worth a little bit less and has less purchasing power. Critiques sometimes say this is stealing from the middle class. The third and final option that the government can use to raise money is by issuing bonds (an I.O.U). Basically taking out a loan from the public in promise to pay it all back with interest at a later period of time.

So why do I bring this up? Because recently this game of spending money and paying debt has gotten a lot more dangerous. The government is running itself into the ground with the current administration. The war is going to cost about $1.6 trillion, give or take a couple hundred billions, the dependency on government to provide relief and regulation is growing, and the growth of the economy has continue to fall behind the pace of the bigger countries currently developing, China and India most notably. And on top of all of this they want to start a national health care plan? China has been a big buyer of bonds and infrastructure in the U.S they currently own about 1 trillion dollars of our debt. If they called in right now all their debt it would cripple our economy. Basically the government is just getting too big. There are already too many departments and too many proposals that would increase government spending. We have to go back to the system of government when it was unadulterated, back to the founding fathers wisdom when they wrote the constitution. We have gone astray from most of their advice and I believe that we are losing our way. I fear one day we will falter and something bad will happen. Lincoln once said "America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves".

The founding fathers wrote nothing of a central bank when they wrote the constitution and how American should run. They backed the Gold Standard which would keep government spending in check. They understood that the manipulation of currency by an elite group of gentlemen who answer to only the joint economic committee would allow for some terrible human errors and took away from the capitalistic ideals. In fact the market crash of 1929 is a great example of poor policy on the central banks allowing for a depression in the economy. If you don't believe it then ask the current Head of the Federal Reserve Ben Bernanke, he will most certainly tell you (he has done much work on understanding the market crash of 1929).

We have to cut government spending and we have to do it as soon as possible. All these talks of centralized health care plan, and more government spending, and central banking system is far from what the founding father would have wanted. We are walking a tight rope and we must be careful before we confuse good intentions with poor policy.

Minimum Wage

Recently this semester in Microeconomics we have been learning about price floors. A price floor is a legal minimum at which a good or service can be sold for. Now price floors are okay until they become effective, that is, they become higher than what the equilibrium price and quantity would want. Now when price floors become effective you have a surplus.Minimum wage is a classic example of a price floor. When you set the minimum price at say 6 bucks an hour and the equilibrium is 5 bucks an hour then more people will want to work than there are jobs supplied at that rate, as a result you have a surplus and that surplus is known as unemployment.


Now our society is a free market economy. We have always advocated education because nobody really wants to work at the minimum wage. We all want nice cars, nice clothes, big houses, and lots of money to put our children through college when tuition becomes something around $80,000 a year. Given that costs will only continue to rise in everything that we purchase as consumers, do we really want to advocate a minimum wage, a safety net that gives citizens the comfort of falling back on when they choose to produce very little? It only causes more unemployment and a false sense of value. I mean really, do you see the reason behind a person earning an extra dollar for wrapping your hamburger just because they raise the minimum wage? No, and it only hurts consumers. I believe in placing proper value where it is merited. If someone chooses not to go to school, not to differentiate themselves, or not to increase their skill then they should be given a wage that is the correct value to their contribution to society.

Now I understand some of you will say that if you get rid of the minimum wage and give people a dollar an hour or two dollars an hour then you’re exploiting them. But like my economics teacher says “The only thing more tragic than an exploited worker is an unexploited worker”, they don’t have a job! You are artificially creating value and giving it to a person whose contribution to society is much less than that and as a result more people want to work at that minimum wage price and less businesses want to give out jobs at that minimum wage price and so you have increasing unemployment.

When we as a society encourage education and place heavy emphasis on it than what kind of effect does that have on our message when we always want to raise the minimum wage? “Little Johnny it’s important to get an education because it stimulates your mind and puts you in a better position to take advantage of all that society has to offer in a market economy but, even if you decide to drop out, it’s okay because we will continue to raise minimum wage so that you will have a safety net to fall back on”. Well it’s not okay because we live in a world where international trade is expanding, where we have to compete against more countries that have lower minimum wages, where automation of rule based tasks with machines are replacing unskilled labor, and outsourcing is a growing trend in American businesses. The reason to study hard and stay in school has never been stronger than it is today.We need to let go of minimum wage if we are to remain competitive domestically, internationally, and academically.Raise the minimum wage? Yeah right, I’ll stay in school thanks.

To protect freedom for the world?

Pakistan


Lately I have been keeping up with global and current events. As you may know President Musharraf has declared a state of emergency in Pakistan. He has suspended the constitution, forced media to close down, arrested many top officials, protestors, and lawyers, and pushed back Presidential Elections. Anyone who chooses to argue with his decision is arrested; anyone that pushes for him to step down is arrested. There is no system of check and balance in place right now. If you have even read a quick one paragraph column on what’s going on in Pakistan your probably thinking Musharraf is consuming too much power and is doing a great injustice, and your probably right.

I, for one, am outraged on what is going on and more importantly I am upset and confused as to why the US is doing very little. What it sounds like is Musharraf is on his way to be another Saddam Hussein. I understand that when President Bush wanted to go to war in Iraq he made a little speech that went something like this “This nation, in world war and in Cold War, has never permitted the brutal and lawless to set history's course. Now, as before, we will secure our nation, protect our freedom, and help others to find freedom of their own.” I see a little bit of inconsistency here. Pakistan is a real country that is being taken over by a President that is the army chief as well. This is a president who seized power in 1999, who declared a state of emergency a few days before the Supreme Court was to rule on the legitimacy of his presidency, and a man who refuses to abdicate any power at all. We fight a war for people who are not our own, and we sit back while our “ally’s” use tyranny to suppress others. That must be terrorism right there, an attack on freedom by Musharraf. This is idiotic…what do you guys think?

Big Brother America

I know some people think America can sometimes get their nose involved in international affairs which they shouldn't be involved in. Sometimes America's actions are biased and "big brother" like but other times I think they're just. I mean there are so many problems in the world today and there are so many terrible intentioned agendas and weapons. And these weapons are only getting more powerful and more dangerous. With all this conflict and danger all it takes is one mistake, just one mistake to cause a global crisis. For example, if one country gets their hands on or starts a nuclear weapons program this adds one more hassle to the globe of problems. These days a lot of countries are gaining the financial resources and knowledge to build these kinds weapons. If a country with ill intentioned motives has this kind of power it could be dire.

A lot of these countries are not run by democracies where a congregate of people react, deliberate, think, argue, and discuss before acting. In reality they're run by a few to one person aristocracies, tyrannies, and dictatorships which can sometimes be irrational or respond with emotional and sporadic intentions. This is bad news. You see when countries are enemies with one another they arm themselves accordingly; they react in the best interest for themselves. There is a paradox in game theory called the prisoners dilemma where the best outcome mutually cannot be reached because countries would have to act individually in their least great outcome. Mutually Assured Destruction (MAD) stems from game theory and explains why countries will arm themselves and arm themselves with the most advance weapons possible. If Iraq (before the invasion from America) is a landlocked country with a lot of oil and a lot of enemies which surround them, they will be motivated to protect themselves. Other countries will be motivated to counter with arming themselves also. With all these issues mounting how easy is it for a country to launch one nuclear missile in the name of "defense"? If such a single event takes place do you know what kind of repercussions would happen? It would be a colossal domino effect. The damage will extend to other countries and they will retaliate. The nuclear debris and fall-out would spread to other nations. It would be a big mess. I mean just think about it, when democratic America was hit with terrorist attacks we went and took over a country. What will a nuclear missile make a country with a sporadic dictatorship do?

That is just one of the terrible problems existing in this world. You have to understand that there must be a peacemaker or someone powerful who can keep these things from happening. Methods are debatable, yes, but there is a need for some type of instrument to step in. We cannot rely on the countries to work these things out themselves all the time because the threat of it not working out just one time is too great to leave it to chance alone. I am grateful that the super power of the world today is one that is run by the ideals and values of a population which is educated and strives for standards that are beneficial to society as a whole. It is these things and this type of system which allows for peace and understanding to spread, that we need in our world and that we need keeping the peace. Critics of America can say what they feel, ( and it is important that they do because when they take action and correct the things they find wrong with America by their words and actions they make America better), but I implore them to ask themselves what would the world be like without her? Where would we be? Sometimes we cannot have the absolute good (policies and actions that lead to success every time); we often have to settle for the greater good. What I am trying to get at in summary is, has the net benefit of America being in this world, having done the things that it has done, and strives to do exceeded the net costs of its position and actions in the world?

"This country will not be a good place for any of us to live in unless we make it a good place for all of us to live in."
-Theodore Roosevelt

Global Warming

Recently for a Chemistry assignment this weekend we had to watch Al Gore's "An Inconvenient Truth". It got me thinking about the environment again. I know I had talked briefly about Global Warming in a comment to someone else blog but I would like to share and expand on my perspective.

The earth is the only habitat and home we have in the known Universe. Trying to relocate the population somewhere else is unpractical, close to impossible, and resourcefully draining. So we have to make do with what we got and what we got isn't bad at all. The planet is a scare resource and it is very valuable to us for that reason. When we burn fossil fuels we disrupt the carbon cycle by adding a net 3 gigatons of carbon dioxide a year. This heats up the planet by trapping more solar energy. The ice caps which act as a mirror to bounce of light energy from the sun are melting, lakes are drying up (Lake Chad is a good example), storms are getting stronger, global temperatures are rising. All of these signs are warnings from the Earth desperately trying to tell us that the increase in CO2 is going to change the environment for the worst.

And yet we have great problems in trying to reduce that carbon dioxide. For one it’s pretty hard to find a cheap alternative energy source that has the convenience fossil fuels have that are inherent to them. Trying to implement a policy to alter from fossil fuels is another obstacle altogether. These problems aren't new they have been around for quite some time but it is the conversation that is important. Educating the public is important and finding solutions are so important. Al Gore said in his video that when he went to congress in the 70's after his professor had shared with him some new research information that the CO2 levels in the atmosphere were rising that he, Al Gore, was sure that his government would hear him. He had so much faith in democracy going into the problem. However when congress heard him they did nothing. It became part of his agenda to inform the public and the world about the problems they were going to have a devastating impact on our planet and for the future.

As a young person, this movie has motivated me to do something about it, engage myself in the issue. This problem isn't just a problem that an American needs to solve but it is a global problem in which humans everywhere need to seriously think about. There has been too much procrastination and second agenda policy that has been going around with global warming. We owe it to our planet and we owe it our human race to really start the chapter in taking care of a global killer, a problem so huge it may take centuries to fix. I don't want to start when it is too late. After all your kids and my kids deserve a home where they can grow up, we have to protect that idea at all costs. We have to protect this home.

My voice is one

How many Americans at the time voted to go to war in Iraq? It is certainly a lot less now. I don't understand it. When we went to war in Iraq we said that we have to go in order to stop Saddam Hussein and protect freedom for the world. I ask you how many dictators are there in this world and how many people are being exploited and abused by their governments that could have used the 1 trillion dollars that we have spent on every cost that is associated with Iraq. And why is it that George Bush says it's a war on terror? A war on terror will never be over. Terror is not a country; it is not a tangible thing. There will always be terrorists or at least people who we think are terrorists (sometimes one person's terrorist is another person's freedom fighter).

If there wasn't a clause in the U.S. Constitution that stated a president may not serve more than two terms I believe that George Bush would become a dictator. I feel that he does not listen to the people. When the polls clearly show he is not doing what is in the interest of the people he continues to push on Iraq. When it is all said and done what will become of the image of George Bush? I will not remember him as a man who strengthened our country, one who increased the benefits of being an American that we enjoy, or decreasing the deficit. No, not at all I will remember George Bush as an individual who did not listen to reason and to people. Who was not a wise leader, who could not apologize or admit that he was wrong. Being the president of the United States is not something you do for ego, money, or fame. You become the President of the United States because you believe in Public Service. That is how I envision it, the champions of democracy, the true leaders like John F. Kennedy or Abraham Lincoln. These are the leaders that built a strong nation and a strong foundation. George Bush insults me. He insults my country. He has alienated relationships with so many other countries; he has tarnished the image of the United States so that we now look like a branch of government that monopolizes the regulation of the world and advocates war not relentless negotiations.

Thank goodness for Thomas Jefferson, Benjamin Franklin, James Madison and the many other framers for the constitution, they at least knew that time to time we would have elected a leader who no longer possesses the proper qualities and constructed a powerful system of check and balance to protect the people from unintelligent thinking and a change agent that would eventually eradicate bad thinking altogether. We take it for granted because we are so use to a stable system. If you have lived in another country that relies on rule which is not provided by the people, then you have lived in a very dangerous place. My voice is one of many in our nation, our voices are important because as a collective whole we are the most powerful aggregate that will bring the government to service us. Never stop thinking and never stop voicing.

Technology

I am truly impressed by the human race. We are the most intelligent species in the known Universe...or at the least capable. Truly our unique ability to learn, store large amounts of information, and make intelligent decisions when rational is something of a wonder that perhaps is taken granted for since we are able to demonstrate these acts so quickly and so numerously. Technology is a byproduct of our imagination and intelligence. It is one of the most powerful things we can build, use, and learn. There is technology everywhere you look: Cell Phones, Light Bulbs, Toilets, processed and pasteurized foods, medicine, and the list continues. All of this allows us to do things we could never do with the physical traits that are given to us. Intelligence is our most coveted gift and the most coveted skill anyone or anything could ever ascertain. Technology increases our productivity; it increases our standard of living, our democracies, our lives, and our future.

It may all sound cliché but that's because it is everywhere and we often take it for granted. But if you really, really think about it what we have is the results of a collective whole of every human who has ever created any technological breakthrough. And though, each thing that was built that allowed us to do whatever it was designed to do, took years and lifetimes, we all posses and benefit from it in some way or another. We can all drink healthy milk because of Louis Pasture's lifetime commitment to the sterilization of food. We can all call our mothers at night when we are thousands of miles away from them because of Alexander Graham Bell's years of dedication to inventing the telephone (and the many people who came afterwards that refined it and made it wireless). Warren Buffet once said "The average American lives 100 times better than the wealthiest man 100 years ago." Why? Because as a society we all benefit when one citizen dedicates their time to the advancement of our way of life through technology. In 100 years things have changed a lot and our life has increased in many aspects. A lot of people have contributed their lives to developing new technologies that make our lives better.

What I am trying to get at is that without technology without that intelligence we would be a lot different. And I bet most of you, if you had the chance, would compare a life without technology to a life with technology as a very scary, boring, and limiting experience. Sure you will have your breaks from technology where you cherish the very simple things in life but when you weigh those things technology has a net benefit that is exponential as the times go forwards. That is why I am truly impressed at our race. It makes you think that such a superior and advanced life form must have had a pre constructed blue print of our evolution…because I just don't think we're that lucky.

World Government

After watching a solar system video in my lab and watching the discoveries of our planets and neighboring galaxies evolve I began to think that really there is no other place that we know of within thousands of years of travel that could provide us with a home like our planet Earth. After thinking about that for a couple of days I really started to appreciate everything around me. I also began to think of the conflicts humans have had with each other throughout the times. It seems that these fights are so insignificant in the grand view of it all. I began to think how we are exploiting our planets resources and damaging it with our burning of fossil fuel. We only have one planet Earth in this vast cold region of space and I feel that as each day goes on our earth grows weaker and weaker. It is a sad and lonely journey out there beyond the skies and this beautiful blue and green marble that we live in is the most important habitat we humans have. And once more I started to think...

How wonderful would it be, if it worked, a world government? A government, perhaps, more like a democracy and a republic that allowed indirect representation of people around the world. A world government that ran on a free market system much like our capitalist country. Perhaps then we could put rest to threats of world wars and civil wars. Maybe we could take a one world stance on issues like poverty and world hunger. And maybe the world would be a better place if only just by a little bit. It seems that underdeveloped countries would be considered and they would be allowed to develop more. Trade restrictions would be lifted and countries would be more efficient at production. Somewhere I read in an encyclopedia that the theory behind democracy is that the intelligence of a group is better served at managing a group of people. In other words the strength of democracy lies within the strength of the participants. And to think that the participants would reach to the far edges of the world making global problems an immediate agenda. The collective intelligence of the world seems so tantalizing.Maybe I have my head in the clouds...maybe something like that is not feasible. But maybe something like that is a better solution to a world full of problems.