Archive for the ‘Economics’ Category

My 2012 Presidential Campaign Speech

March 5, 2010 16 comments

Campaign Slogan: Restoring our Country’s Greatness

You know, there was a time, not very long ago, that “Made in America” meant something special.  You would see it on labels of clothing; on the handles of tools; and on spare parts and toys you purchased at many different types of stores. It made us feel proud: proud to be part of this great nation; proud of the work that went into building the greatest nation on earth; proud of our heritage; hopeful for the possibilities of our future. But you don’t see the “Made in America” slogan these days as much….

We’ve shipped many of our jobs beyond our borders. We are increasingly dependent on other nations for our food supply. We have become massively in debt as we have adopted policies that mirror the social democracies of Europe with their massive entitlement payouts. Those countries are nearly bankrupt – is it any wonder that we are too?

And there is a growing feeling of negative anticipation in our nation. I’ve heard people say they are ‘hunkering down’, and ‘waiting for the end to come’. People just seem to sense that we cannot continue in this manner. But when will it change?

The time is Now. It is time for Restoring our Country’s Greatness. America has never shrunk from a challenge, and we will not do so this time. My plan, as outlined in my 6-point Party Platform, will Restore our Country’s Greatness. The first plan of attack is to get our economy turned around, and the American people working again. We must make it easier for small businesses to prosper in America. We also have plans to bring corporate manufacturing jobs back to America, but that will take some time. I strongly believe that our small businesses will lead us out of this economic recession.

The American people are the most ingenious, inventive, and hardworking people on the planet. I believe that federal government bureaucracies have grown to unduly tax and interfere with our economic progress.

For example, in 2010 the Obama administration passed legislation aimed at protecting us from dangerous goods from China. This is a commendable idea. But in the legislation that passed, crippling bureaucratic hurdles have been placed in the way of American businesses. Now, small business that produce and ship goods around our country will need to spend thousands of dollars to get each of their products tested and “certified” to sell by yet another new governmental department. This will harm many small American companies, the Mom & Pop stores barely scraping by. It will cripple their bottom lines, and cause many more to shut their doors completely. And it continues to grow the size of our ever-increasing government, adding more expenditures that we cannot afford.

I will work to help small businesses, not hinder. We will simplify the tax code, and reduce bureaucracy and regulation for the small business owners of America. We will get the government out of their way, and allow them the freedom to pursue life, liberty, and happiness. We will encourage investment in new technologies, US factories, and minimize government hurdles and costs for businesses of all sizes. We will also do away with farm subsidies to get America’s farmers working their farms again, bringing food production home where it belongs. For large corporations, corporate tax breaks for companies that manufacture in the United States, keeping our economic advantages on our own soil.

…And we need to keep our soil safe. When our country is safe and well protected, the American citizens feel safe and happy about our security. Our military forces have struggles for years to provide an opportunity for Iraq and Afghanistan to make better governments for themselves. After so many years, it is time to allow them to stand on their own. We have shown them the way. At this time of great worldwide economic struggle, the US military personnel need to be home with their families. Our own borders need to be better protected. We will always protect the United States from attacks, both foreign and domestic, but we need to get out of the business of nation building and the idealism of creating our “brand” of government around the world.

As we focus internally, let’s take a look at our country’s education system. The education of our current and rising generations is the key to our future. Therefore, I propose to gradually wean the Federal Government from managing the education process in America. This will be a big change for us, but it is necessary. The American people should be in charge of their own education at the family, community, and State levels. By removing federal monies and requirements, we will clear the path for education to become competitive, and for states to regulate education within their own borders. We will work with party members at the state and local levels to weaken union strangleholds in the education arena that are destroying the education process for millions of young Americans, provide tax credits to leave failing schools, and offer merit pay and other performance-based incentives to ensure our teachers and students are the best they can be.

And let me make this pledge to you this evening: I will work to create real reform and change in America’s government. By spending more money than we have as a country, the current administration has created a debt burden for future generations that will take many years to overcome. This is not fair for our future generations, and it is common sense that it cannot go on forever. Spending more than you have doesn’t work in your homes, and it does not work for our country. We will work for a balanced budget, eliminate deficit spending, and introduce greater oversight and transparency on the workings of the Federal Reserve System and other banking institutions. Clear steps will be taken to “follow the money” and measures will be put in place to put an end to reckless financial practices, like credit default swaps, as well as create a payback schedule for all bailout monies received by our financial institutions. We cannot continue to “print money” at record levels, like our current administration, and not expect to reap the consequences of high inflation and a valueless dollar.

Too much money gets spent and too many laws are created outside of the legislative process. Our government cannot continue to allow the executive branch to wield the power of the Executive Order to create binding laws outside of our checks-and-balances system. If given the chance I promise I will correct these and other corrupt practices currently taking place in Washington. I promise to reduce our spending year upon year until we can see an end to the uncontrollable deficits.

Why are we in this prolonged recession after some of the best growth decades our nation has ever seen? Some of the biggest reasons are right here in Washington: It’s called Politics as Usual. Bloated government. Spend, spend, spend. Miles of bureaucracies thwarting American business. You were promised Hope & Change. But let me ask: Is this the Hope & Change you were looking for? I don’t think so.

THE UNITED STATES of AMERICA has the HIGHEST levels of RESERVE ENERGY RESOURCES of any country in the world.* Yet we struggle with rising energy costs and energy dependence on countries with unstable leadership and that often have anti-American positions. This situation can be rectified by developing environmentally safe methods to extract the natural resources within our own country. We will work to encourage and provide incentives for private companies to help the USA attain energy independence, through the extraction of existing American oil reserves, as well as developing new sources of clean, renewable energy. These resources alone “represent tens of trillions of dollars in wealth and millions of American jobs.”*

If given the chance, my fellow Americans, we can make this dream a reality. If given the chance, you and I together will Restore our Country’s Greatness.

Thank you, and God Bless America.

Eric Merten
President 2012

*Congressional Research Report 2009


Bailout Money and Spanakopita

February 24, 2010 10 comments

There’s a new term in America’s lexicon: “bailout money”. A friend said to me last weekend, “Let’s not go to that restaurant, that place takes ‘bailout money’.” As in expensive. Very. One of my favorite dishes, spanakopita, usually isn’t very expensive. It usually doesn’t take “bailout money” to buy spanakopita. Usually.

Speaking of the $787bln bailout, what happened to (y)our bailout money? There is evidence now that some of the companies that received our bailout money – Goldman Sachs, French company Societe Generale, etc. – were associated with the mortgage bankers that offered the high risk loans in the first place. Mortgage companies associated with these investment banks were offering loans to people without even verifying employment and income claims. In other words, they knew these loans were very high risk. And when they tanked, they received our money to get bailed out of the very problem they created.

Here’s how it worked. In a bit of financial hocus-pocus, Goldman Sachs, SocGen, etc. rolled up these high risk loans into something that people could invest in called CDOs. They were basically bonds, which have a guaranteed return. The return to the investors was supposed to be provided by the interest payments that people make on their mortgages. And it would have worked if people kept paying their mortgages on time. Before it blew up, however, there was a bit more hocus pocus: Goldman Sachs, et al. knew these CDO investments were super high risk. So they bought insurance policies. AIG decided to insure the debt of these high risk home loans with something called credit default swaps. Bad move. Once the people – the same people that never should have been offered these home mortgages in the first place – started defaulting on their payments, Goldman’s and SocGen’s CDOs were not making their expected returns. So, they called their insurance company AIG for a payout. There were so many bad CDO bonds (based on high risk loans) made by these and other banks, and insured by AIG, that when it came time to pay the claims, AIG went bankrupt…..well almost. Instead, the US of A decided to step in and bail them out. Just to make sure this is clear: Goldman Sachs and friends – unethically, or at the very least with conflicting interests – made the bad loans to begin with, which created the problem. Next, they purchased insurance without disclosing the true nature of the assets they were insuring. Then they were bailed out of their poor business decisions with our money.

What did AIG do with the money? First, they were forced to pay out their insurance claims *at full value* to Goldman Sachs, Societe Generale, etc. although everyone already knew by this point that the mortgages they had insured were worthless. The Federal Reserve Bank of New York ordered AIG to pay them back at full value even though AIG was in the process of negotiating the payout at a large discount. The Federal Reserve of NY then hid this fact for more than a year from Congress and other oversight committees even though AIG wanted to publish the information. Conflicting interests, anyone? A year later, Goldman Sachs is paying out $23 billion in bonuses to it’s employees. Yes, that’s with a “b” for billion. That’s enough money to send 460,000 people to Harvard or buy health insurance for 1.7 million families. I wonder what the NY Fed Chair is getting. Oh, and in case you aren’t following, that’s your money they are paying out as bonuses to their employees.

AIG received more than $182bln of our money. And this is only one example. The list goes on. A lot has been – and will be – said about the lying, cheating and cover-up in this bail-out scandal. I don’t have the space or inclination to delve further right now. Maybe later. I hope people like Darrell Issa get to the bottom of this.

But my question is: why the slimy and secret cover-up from the Administration? Why cover up what happened to our $787bln if there’s nothing to hide Mr. Treasury Secretary Geithner? What happened to the transparency that was promised on the campaign trail? Where are the healthcare debates on C-Span that were promised on the stump? Where are all my friends that drank the kook-aid and insisted Obama would be different? Instead, we have his particular brand of Chicago politics at the national level. As US News & World Report claims, the stimulus program and healthcare are loaded with hidden political pork: Pelosi and Co. receiving $54M in earmarks to relocate a wine train in California; Reid and Co. arranging an earmark for a Los Angeles-to-Vegas high-speed train. The healthcare bill, specifically, was another fiasco of political corruption, with millions of dollars allocated to buy votes, such as those of Louisiana Sen. Mary Landrieu and Nebraska Sen. Ben Nelson. Anger with that process and the bill it produced helped fuel the stunning election of Republican Scott Brown in Massachusetts.

Is this the Hope and Change we were promised?

But back to AIG and the spanakopita. Due to the bailout, the USA (that’s you and me) owns 80% of AIG. Now it’s coming out that – according to a German newspaper – AIG sold the same kind of credit default swap insurance policies on Greece’s national debt. Greece is currently floundering in debt and is in danger of going bankrupt. The EU has already imposed austerity measures on Greece to ensure that they are able to pay back their mounting debts and keep their status in the European Union. Suddenly it appears that it is in the USA’s – I mean AIG’s – I mean the USA’s interest to keep Greece from defaulting. How? Well, remember that European vacation/home in Greece you have fantasized about? Well, it may very well be that the USA will be purchasing a whole bunch of mortgages & homes in Greece — with your money — but there’s a catch: the Greeks get to keep living in them, not you.

Speaking of Greece, Aristotle made a point in 350BC that still rings true today. Legislators and politicians that get paid a lot of money and can stay in office for a long time are a danger to the Society. Not only do they receive the honor of the State, they will soon start taking the people’s money. And this makes the people doubly angry. Not only do the politicians have the honor, but they make themselves rich off the work of the people. Aristotle also saw how it gets resolved: The people will not stand for this for very long before they revolt and change the government. It was true back in 350BC and it’s true today. We the People will not stand for this type of slimy highway robbery bailout, secretive behind-closed-doors healthcare legislation process, and cover-up much longer. This should not be taken lightly, but it might just be the hope and change we are looking for in America.

The Great Global Warming….Religion?

February 2, 2010 3 comments

My first foray into speaking out against the global warming hoax was when I made CDs of a youtube video – the Great Global Warming Swindle ( – back in 2006 and distributed them at my place of work in Portland, Oregon. It was a big hit. I did it anonymously on a bulletin board (the old school kind with cork and pins) and had fun listening to people talk about it in Cubicle-landia. A couple of people thought it was crap, but most of them – being software developers, engineers, and project managers accustomed to using logic and reason – seemed to enjoy the fact that they were beginning to understand the science involved, or lack thereof. Al Gore’s claims just didn’t add up, now matter how many inconvenient truths he claimed to have found.

I personally think that his biggest “inconvenient truth” was that the real-world data didn’t support his claims of impending doom, and he chose to ironically name his book on purpose. It was his way of getting back at the American People for not voting him into office in 2004. Some say.

Continuing in this personal vein, I have a brother who we lovingly refer to as “RESEARCH!” because if you ever want something found on the web, or anywhere else for that matter, he can do it. He even found a very hard to find clip of a soccer goal scored in an obscure indoor league in the upper Midwest of the USA after many others had attempted to do so and failed. Oh, and not only that, but he ended up with a new friend in the team’s front office. (Some people have it, others don’t.) But more on him in a second.

I made a discovery of my own recently, with help from my favorite British bloggers at the Telegraph, about the man behind a lot of the mis-information on Global Warming. Read about it here

Basically, the jist of it is that one man, Cambridge-based scientist and Green Party activist William Connolley, hijacked Wikipedia for his own Global Warming Doom Campaign. First, he edited thousands of articles to only include data that he and his political agenda agreed with. Then, he obtained administrator privileges on the site, and either removed articles or black-listed thousands of contributors that were trying to publish truly scientific information that was detrimental to his crusade. How is this possible on a supposedly open-community like Wikipedia claims to be? Furthermore, the company Connolley helped found, Real Climate, pumps out information about the realities of global warming, knowingly modifies and hides real scientific data, and vociferously attempts to discredit anyone who may disagree with their agenda.

You know, when I was a child, there were certain types of people that you trusted. The Police. Firefighters. Teachers. Parents. Pastors. And Scientists! These were the guys doing their best to understand our world, and make sense of it through true scientific discovery, uncluttered with politics and agendas. I remember idyllic trips to San Francisco, or the wetlands at the California coast, where we visited museums, planetariums, and marshlands to learn about new scientific discoveries. Well, we all know the dangers of Pastors now (thanks Catholic Church), and the Police (just type in police brutality on youtube). I’m not saying that we can’t trust them at all – of course not. But we need to be more wary than we once were…and, sadly, we need to add Scientists to this list. Why? Because of the politicization of the global warming debate, and any other debate where there are massive amounts of money to be “politicized” away from people like you and me.

Here’s a quick time line on the global warming debate over the last nine weeks, courtesy of … “RESEARCH!”

1.    World-leading British and US scientists get busted for fixing data, pressuring science publications, and breaking the law.  (They won’t be prosecuted because the events are more than six months old and British authorities are claiming action needed to be quicker.  The Brits are arguing about this now…

2.    Copenhagen Summit…TOTAL collapse.  Massive December snow storm that hasn’t happened there in ~13 years.  (see Gore Effect)  Russia leaves early.  Obama shows up at the meeting only to find himself late.  China, India won’t play ball…  The US Senate would need 67 Senate votes so this was all an exercise in futility anyway to placate Left-wing base…

January 2010

3.    An administrator in British climate office accidentally(?) blurts out in an email/blog that the way they test for warmest/coldest winter is to take the warmest 15 temperatures of the season. That’s “15 *warmest* temps”. Is this really the scientific method? C’mon….

4.    IPCC head (Rajendra Pachauri) admits the data for the Himalayan Glacier ‘facts’ are not based in science but on “comments” in a phone conversation made by a basic ‘nobody’ from almost 10 years before.
a.    Pachauri says he didn’t know about this Himalayan error
b.    Asian sub-team that wrote that section admits to knowing the data wasn’t there…but that they included for “political reasons”.
c.    Due to FACTS coming out that prove Pachauri knew about the Himalayan error BEFORE Copenhagen, he admits he DID in fact know about it…

5.    Last week…another ‘oops’:  IPCC section written about Andes mountains losing snow/ice is actually based on a student’s anecdotal interviews with hikers/climbers and is published in a HIKING magazine…not a peer reviewed journal.

6.   Just yesterday it came out (London Times) that the IPCC data ‘proving’ the S. American rainforests are in danger is bogus.  OOPS!

7.    Canada, Russia, New Zealand scientists have all come out this month saying the data collected in their country is probably ‘cherry picked’.
a.    Example:
b.    Example:

February 2010

8.    Published today…turns out the data from China used by an IPCC leading scientist – Phil Jones (see item #1 above) has been manipulated with, among other things, whole weather stations having been moved.

Combine these scientific shams with an obvious agenda that is being perpetrated by people like the William Connolleys and Al Gores of the world, and you have a massive mis-information propaganda machine. If you get stuck wondering what the propaganda is for, just think of the TRILLIONS of dollars that are going to be taxed, capped and traded! And to top it off, anyone that doesn’t believe in the “Religion” of Global Warming is a fool. Why religion? Where have you seen so much faith demonstrated in a world where participation in organized religion has fallen so far? It takes a lot of faith for the believers to believe in something that they cannot see, and the data does not support. The believers also defend their belief with a fanatical enthusiasm – in the face of mounting data against their claims. I wonder if the Christians that were persecuted for their faith in old Roman Empire times aren’t a little bit proud of the zealotry being displayed by the new “believers.”

Was Murray Rothbard a quack?

January 21, 2010 1 comment

I have heard it claimed that the recently deceased Nobel laureate economist Paul Samuelson called fellow economist Murray Rothbard a “quack.” At first I scoffed at the idea. How could someone like M. Rothbard, so versed in logic and deductive reasoning, be a “quack”?

I love how Rothbard, in his economic treatise “Man, Economy, and State”, uses logical deduction to build up his economic theories and axioms step by step. I was happy to see an answer to the question of “where does price come from?” that is exactly the opposite to what I had been taught in my microeconomic courses at Oregon State University. I had been taught that the price of consumer goods is determined by the costs of land, labor, capital, etc. Rothbard explains logically how those costs are actually determined by what consumers will pay for the product. In other words, the consumers ultimately determine the price of goods! I believe Rothbard’s logic to be accurate. So, what about the “quack” comment? I tried to understand what would cause Samuelson to say such a thing. As I continued deeper into the treatise, my disregard of the comment began to weaken as I read more of Rothbard’s refutations of his own critics. I found that his arguments in his own defense were sounding strikingly similar.

First, a clarification: Paul Samuelson is a “Keynesian” economist, one who believes in implementing fiscal policies at a national level in order to keep the economy humming. These policies are supposed to smooth out the business cycles of boom and bust. Murray Rothbard is an “Austrian” economist, staunch believers in a free market and minimal government intervention into economic decisions.

When detractors like Samuelson attack the Austrian economic pillars of a free market system, Murray Rothbard can only point to the underlying logical principles of the free market to prove that it works. There is a dearth of case studies or real world examples for him to draw from. For example, when critics claim that a free market system is disruptive to society because it necessarily advances too many product innovations that threaten the peace of society, Rothbard cries out that, logically, in a free market, entrepreneurial foresight will be utilized and taken advantage of as much as is possible and desired by consumers. When critics claim that a free market system slows down innovation due to capitalist resistance stemming from a desire of a return on their previously invested capital, Rothbard declares that by logical reasoning, in a free market system, producers of goods will allocate the various factors of production in the most efficient manner possible. In other words, the free market naturally and logically has forces working that are always moving toward efficiency and customer satisfaction. I agree with these logical deductions and, like Von Mises and Bastiat before him, I am a proponent of a laissez-faire economic system with as little government intervention as possible.

But this logically constructed world of Rothbard’s does not exist, and that’s the rub.

There was no major economic system during Rothbard’s time that adhered to the principles he was advocating. There still is not today. There is no proving ground for his theories other than the written word and the adept use of logical arguments. As long as Rothbard can condemn Alfred Marshall’s use of mathematical equations as nonsensical and devoid of meaning due to Marshall’s assumptions being overly simplified and based on the concept of a “long run” economy that never actually exists in the real market, critics will be able to point to Rothbard’s theories and axioms that are based on a world that is not actually in existence, and claim he is a “quack.” My sympathies are growing for the accuser, although I am not in his camp. He seems to be saying that there is something missing from Rothbard’s analysis, and I am beginning to agree. I understand that Murray Rothbard’s free market world is loaded with idealisms that he doesn’t explicitly state; he doesn’t take his discussion of requirements for the ideal market into the political realm. Yet I also understand that by making a treatise of this magnitude, with its very foundation based on political and free market ideals, he is tacitly proposing them. Hear, hear! I applaud the effort and the proposition.

However, until and unless a society will adopt the principles he proposes and becomes more like Rothbard’s ideal free market system, there will be something patently missing from his treatise. I don’t believe he needs to go so far as to develop his own eschatology or raison d’être for mankind. I agree with Rothbard that that work should be left for religion and philosophy. But a greater emphasis needs to be put on how to implement his ideas in the real world: how and what needs to be done to correct our current economic crises? If interest rates are really supposed to be dependent upon how much people save and invest – as Rothbard explains logically – what are specific steps he would take to remediate our reliance on a central bank that artificially adjusts the market interest rates to low levels even when saving is non-existent? How would he purport to demonstrate to Americans that an elevated demand to consume leads to lower wages because it causes capitalists to discount to a greater degree the marginal value of the products that the workers are producing? And since the marginal value of a product is directly linked to the payment of labor (wages), high demand to consume is detrimental to their pay?

Rothbard’s treatise is great. I especially love it for its clear and methodical explanation of how an economy would work on a desert island and inside an evenly rotating economy where all uncertainty is removed. Once we see how an economy would work in these imaginary examples, he adds uncertainty and constant change in order to demonstrate how a modern economy will work within a truly free market. But it needs to be followed up with practicalities that can make a difference in the world in which we live, not only in imaginary ones – because the truly free market Rothbard posits is just as imaginary as his desert island or his evenly rotating economy.