Defining Sin

Followers of my blog with recognize that I'm a fan of some sin taxes (smoking is a no-brainer example), but enacting this dynamic pigovian taxes do have downsides. The biggest downside is, how do we define "sin?"

If I sneak over to your house while you are at work, shoot your dog in the face, and leave it on your porch for you to find when you get home, that is "sin" by most all accounts.

If I put a little extra salt on my french fries and eat it or serve it to others, is that sin? If it is sin, what does that sin cost? Surely if I know salt will kill myself or others in the future, and I knowing feed it to myself, then I am acting in a sado-masochistic fashion - I'm slowly killing myself or others, and damn it feels (tastes) so good.

But, do we know salt will cause harm to us in the future? If so, how much?

People can point to statistics and say salt is a factor in high blood pressure and heart disease. Others may point to statistics showing that, globally, that is not always the case. In the case of salt, many of the producers of salt-laden product have come to an agreement to voluntarily reduce their usage of salt in their products. In many ways, this is a much more palatable way of reducing 'sin' when compared to a forced taxation. But, I've come to learn that large corporations usually don't do something on purpose to hurt their bottom line - so one has to wonder if this is a temporary PR move that can enable companies to get on-board the 'health' train. I hope it isn't - if not it's a huge plus for Bloomberg and I give him kudos for getting around having to tax the salt out of peoples' mouths.

The Contract From America Will Destroy Us All

I originally posted this on facebook, but I think it makes sense to put this on the blog as well:

First, read the contract here: http://www.thecontract.org/
Second, thank the flying spaghetti monster that they aren't in power (yet)

Here is my point by point critique, which I normally wouldn't do, but since it was requested:

1. Protect the Constitution
Yeah, sounds great, until you read the fine print - which would require congress to prove (to who?) that their legislation is allowed by Constitution. Last I checked, most everything Congress does is Constitutional, and if it's not, they are brought before the Supreme court. I assume this point stems from the health care bill - which is completely Constitutional and the vast majority of legal scholars agree. So, this is a ridiculous red herring for the fact that tea partiers, who tend to be old white guys, just hate the health care bill.

2. Reject Cap and Trade
I actually agree with this - I'm against Cap and Trade because I'm suspicious of it's ability to be geographically or socioeconomically equitable. But, I disagree with the subtext which says we should reject ANY legislation that is 'regulation that would increase unemployment, raise consumer prices....' Frankly, I think we need (at some point in time) some legislation that could do just that. This point has the same problem also that the first one does - who decides what regulation is "bad" and "good?" Sarah Palin? Count me out, bro.

3. Demand a Balanced Budget
OOOOh how original. First of all, Obama AGREES that we need to re-institute PAYGO. I like that generally, but again, the subtext is the kicker: a "2/3 majority vote for a tax hike?" Seems kinda random. What about a tax CUT? What about changes in tax code to maintain progressivity over time? What about spending to increase public infrastructure and tech improvements that the private market fails to do? I don't like GM bailouts, and I agree much of our spending is out of proportion, but I'm not prepared to be so absolutist and black and white like the tea party crazies.

4. Enact Fundamental Tax reform
HAHAHA. This one is easy. It's conservative code for a flat tax. I thought Forbes was dead, but I guess not. Limiting the tax code to be the same length as the Constitution??? Not even worth a comment.

5. Limited Government and Fiscal Responsibility (or as I like to call it, "Repubicans in disguise")
Every President that has been in office since I've been alive has done some version of this so-called blue ribbon task force, including Clinton and Obama - so I don't really see the point or value added here.

6. End runaway government spending
Not really seeing the difference between this and "5" above... they all start to run together. There's some merit, nevertheless, in limiting government spending to changes in inflation and population growth, from an economics perspective, but again, it seems like a 'hand-tying' kind of legislation which, if it were in place at the start of the financial crisis, would likely have crippled our economy.

7. "I hate health care"
Yeah, yeah, we get it. Too f-ing bad. You lost, get over it. I had to bare the damn Iraq war which I was against when it popular... I never said it was unconstitutional (immoral, maybe)

8. All of the above energy policy
I agree. This is what Obama campaigned on, and what he is doing. So what's your point?

9. Stop the pork
I agree with this - and I bet Obama would agree.

10. Stop the tax hikes
Wow, just wow. Only the tea party crazies can contradict themselves in their own contract. See point "5" above.

The movement is starting to churn!

I doubt that Mr. Macdonald saw my 'call to arms' post from a couple weeks back, but that makes his post all the more fascinating.

Michael Burry Asks How Greenspan and other Economists Could have Missed the BOat

I'll tell you how:
Greenspan and many economists didn't realize they were neck-deep in water.

Were Burry and the handful of non-mainstream economists and business gurus that called the crisis a bunch of "lucky coin flippers?" I don't think so.

What they were were realists - not held down by textbook models of overly-applied math and unrealistic theories of finance and money.