Monday, March 23, 2009

What to do with that 401k...

You are the steward of your 401k. After Enron, I warned everyone I knew that these people were playing fast and loose with the rules. Sure, Phil Gramm got a few things through in the late 90's but once the Bush free marketeers got into it, it was just nuts. I think Goldman Sachs was leveraged 33 to one for god's sake. Hank Paulson him self got the SEC to change the rules that he took advantage of, and then when he became treasury secretary, basically bailed himself out.

You don't have to be a genius to know if you pile up a bunch of money and don't pay anyone to guard it, it will disappear. The Bushies did this with cold hard cash they sent to Baghdad on pallets! Billions if cash right from the US Treasury. Then, they did it 1000 times bigger with credit default swaps and unregulated insurance instruments. The average 401k guy gets told to buy and hold, the long run is good, stay in stocks if you're young, yada yada yada... Meanwhile, they're pocketing your money, buying jets and private islands in countries with no extradition, no income tax, and no minimum wage.

Just imagine what would have happened if we fed this GOP genetic mutation our social security funds.

So, is the 401k a bad thing? Should you be buying in right now? Well, you can get some good stuff cheap right now. But the next time you smell a bubble, put it in a money market fund. I wish people had the option of just going into an index fund with no fees. In the long run, that's better than all that damn day trading anyway. But who knows... It could be Mad Max world soon, in which case you'll want to invest in sharp boomerangs and gasoline.

Friday, March 06, 2009

Conservative Catharsis: Blame Deregulation and Privatization

George W Bush broke the world. It was pretty fucked up to begin with, after years of laissez-faire economics practiced by all American presidents since FDR, but much more so since Reagan. The conservative philosophy was corrupted by deregulators who's belief in the free market completely left out the fact that most people are greedy bastards who will steal everything that's not tied down.

Now this upper class of well-to-do Reaganites, many of them in the Democratic party, have drained the wealth of this country into their walled communities and private security forces, while they whine about their portfolios being worthless. What did they think when they were doing everything Phil Graham suggested? Did they think we could just trust the robber baron class not to be robber barons?

The profit motive works just fine in a regulated market, where everyone has their cards above the table, and we all play by the same rules, which we can all understand. Old timey conservatives were for stringent regulations, especially capital requirements on banks and the like. To be a fiscal conservative meant, literally, to not take crazy risks. A little risk for a decent return, but nothing crazy.

Well, you guys had your chance and you blew it. But what's funny about it is that Karl Marx basically predicted it. It's not hedge fund science, you know. If you have a bunch of money in one place, and you loosen the rules that protect it, someone will steal it. Human nature--GREED--is not good in a market because the greedy will take down the rest of us in that inter-dependent system.

So, now we're going to try something else. It's kind of like what FDR tried, at least in the sense of the largess, the investment in infrastructure and people, and the like. But it's also like FDR in the sense that he realized that everyone deserves some basic floor to stand on: a starting place so that we are all, indeed, created equal when we become a member of The Class of US Taxpayers. Now some of us might get more out of that system than we paid in, but the ones at the top will still get something out of it. They'll have clean dishes to eat cooked food on in restaurants. They'll have firemen and cops and teachers and those people will have the basic dignity of health coverage, affordable housing and utilities, and the like. If the private enterprise system refuses to charge enough for the products and services so that those people can be paid enough to buy their own coverage, then it is we the people, the government, who must force them to, through taxation.

And if you don't believe that, then your option is to have a whole class of people who are broke, unhealthy, and damn angry about it. In this country, those people vote for someone who will make the playing field fair again. In the current view of the dominant conservative voices, those people can just crawl off and die somewhere. Or wind up in prison where we subsidize their everything.

There will be people at the top who pay for it. That is populism. That is the price you pay for living in a country where we pay people who stock shelves at Wal Mart so little that they qualify for government subsidized health care. I'm sure most free market conservatives would prefer to have Wal Mart take care of their employees. But then how could they be the low price leader?

It's still a free country, and there's going to be a free market for practically anything (including things that are illegal). There will be a free market for health care and those of you who can afford it are more than welcome to sink your dollars into a system that profits from your sickness on one end (the HMOs) and profits from your minimal care on the other (the insurance companies who don't want to pay, they just want to collect). I ask you, which force will drive doctor salaries lower? A government that tries to enforce fairness, no matter how cumbersome a bureaucracy that develops in order to implement that fairness (and, again, medicare does it with amazingly low administrative costs compared to private companies), or a private insurance company that is trying desperately to keep outlays down because raising premiums is just making them lose customers?

I'm all for personal responsibility. I grow a lot of my own food. I own my own small business and work for a lot less than minimum wage. I would require more stringent food requirements on Food Stamp recipients, like me, to eat healthy foods and support local, small, and organic farmers. But when it comes to something as complex as health care, I just don't trust the greedy bastards to run it anywhere but into the ground.

I lived in LA for 20 years. I remember the Enron fiasco during the electricity crisis. We had been sold a bill of goods about privatizing and deregulating the electricity markets that turned out to be worse than a load of horse shit (which is at least good fertilizer). It is a perfect example of how unfettered markets only serve as suet to a bunch of hungry birds like Ken Lay who fly away with the whole chunk if they can.

At that point, I started looking into co-ops, public ownership of utilities, community supported agriculture, and credit unions. I like employee owned companies and try to support them when I can. Guess what all those examples are? Communist! They take the assets, the factories, the power lines, the loan portfolios, and they collectively own them among all the members. Where I live now, we have an electric co-op (a remnant of FDR's Rural Electrification Association). It's great. All the people who get the cheap power own the assets of the power company collectively. There is no profit, but the guys who cut the tree branches out of the way get paid well, get health insurance and other benefits. So does the nice lady who answers the phone. Because we, the owners, have decided that's a good thing to do. There's no profit for any corporation, but there is enough to make sure everyone gets paid what they're worth. If those employees had a government health plan they could choose, and pay for with a tax on their paychecks, then as a co-owner of the co-op, I would be more than happy to give them a raise with the money the co-op saved by not having to pay for their health care.

I'm pretty sure GM would like that too.

Why should health care be any different than the co-op itself? Why can we not use the medicare paycheck tax to pay into a fund that is then used to pay our dues for a medical co-op that fairly and equitably distributes care on a triage basis, and puts a premium on prevention, even to the point of rewarding people who do the right thing for their health (thereby being less of a burden to the rest of the co-op)?

Now a lot of people will say it's a red commie flag there, but if you really think about it, and look back over American history at the collective good that has developed as a ethic in this country, it's conservative. It says YOU have a stake, YOU have a responsibility, and if you do well, you will be rewarded. The fact that we are all owners makes it the ownership society for real. And the fact that it is controlled by a bureaucracy that is built to make it as fair as possible takes it out of the realm of Stalin or other totalitarian philosophies, and puts it squarely in the hands of voters who get tho choose the head of the federal government every four years.

I worked my ass off for big entertainment companies for 20 years. They made plenty of money off my labor: more than I did, in fact. And when that work caused the degenerative disease I have in my big load bearing joints, those company's insurance companies denied that they had caused it, and tossed me out like any old broken cog. In your world, it's toughsky shitsky for Scotty because they have to profit. In my world, the money I put into the co-op would come back to me from the co-op when I needed it. Some guy who profited more from my work might have to pay a little more tax now to fund it, but I'll never get back all the profit I helped him make. That's fine. But when he tries to say he has no responsibility for my care, now that I'm broken down and can't do the physical labor that I spent 20 years turning into a career, I say he's full of it.

But when he says, well, I don't really want to pay into a system where a bunch of jet-setting insurance company executives and HMO executives milk every last dime out of everything in order to feed their Myopic vision of next quarter's stock price, then he has a point. I don't want him to pay them either. I want him to pay my doctor, with as little administrative or other overhead as possible. In fact, less overhead means more for my doctor.

So that's my long and winding explanation of why I want medical care to be non-profit and universal. And I'd like to thank the Ron Paul Republican who's been rattling a few cages around here for setting me off on what was a comment, but turned into a diary. So much for banging out a quick answer and getting back to work!

And thanks to Hunter today for firing up my populist, anti-Randian roots. Sometimes I forget why I hang out here, and then Hunter posts something that makes me feel like writing again.

Thursday, March 05, 2009

Conservative Catharsis: Don't Blame Obama

There are no principles left on the right, only tactics and bluster, as if John Bolton himself has taken over the GOP diplomacy wing. At this point, looking back on all the facts I collected at this site, which proves conclusively that the entire Bush administration committed treason, repeatedly: I don't really care what they say. When you say as much shit as the right wing has said in the last few decades, it renders your speech meaningless. We are for x except when we're not. We're against y except when we're not. Now we're going to do that which we told you not to. Then we're going to tell you not to again.

I often tell myself I could be a better conservative than them. It wouldn't be hard. I have libertarian bones, like most Americans. We want the government to protect us and leave us alone, that delicate balancing act that, in a world of nanotechnology, is going to get harder and harder to perform. But it's really not that tricky. Conservatives should be reality based, do what would actually make us safer (which is more like Ron Paul's position than John Bolton's).

They should not be afraid of logic which leads to a conclusion similar to Dennis Kucinich. The liberal left and the reasonable right have much more in common than most of them would care to admit. If the Nationalist Times could get over its racism, they'd have some decent solutions about some things, like keeping government out of medical decisions, a position long held by the libertarian liberals on issues like abortion, medical marijuana, and euthanasia.

But first, the conservatives of the US need a catharsis: George W Bush ruined this country. Rush Limbaugh may be hoping Obama fails at big-government rescue, but it's really too late. George W. Bush (aided amply by Dick Cheney and Rush) drove this country right off a cliff, and Obama is trying to stitch together a big enough parachute to save the whole car. It's probably too late to save the car. But it is not too late to save those occupants who are willing to start stitching their own little parachutes, and we can wind up falling a little slower with a contraption that's going to look a little like the seagulls James lassoed to carry his giant peach.

We'll probably still have a hard landing, but maybe we can slow it all down enough to not break our legs when we hit. All the "conservatives" -- and I would argue that there really aren't many any more -- who can't realize that they were wrong about Bush, wrong about Iraq, wrong about Cheney, wrong about trickle down economics, and wrong about practically every social issue from Terry Schiavo to Sodomy, are going to have to crash. Continuing on at this point as if George Bush wasn't the worst president ever, as if Dick Cheney doesn't belong in prison, as if Donald Rumsfeld doesn't deserve to be "sleep deprived" for days, is the intellectual equivalent of a quivering bowl of decomposed fruit with ditto head flies swarming around it.

If I were a conservative right now (and in many ways I am), I would be encouraging bigger investment in infrastructure that will make our communities more resilient. I would be encouraging micro-loans to the poor to help them start small local businesses. I would demand that food stamp programs only get increases if the recipients can use that money at farmer's markets and on community supported agriculture programs. I would strongly encourage small, local power producers, and companies that create on site energy creation, especially in rural areas.

If I were a conservative right now, I would strongly encourage people to grow their own food in organic victory gardens or urban rooftop gardens, or community gardens on empty lots, like they're doing in Detroit now. The roots of the conservative philosophy lie in independence. This disaster brought on by the insolent teenager of a president and his Dr. Strangelove sidekick offers a chance for conservatives to get back to their roots and encourage the people of this country to become independent, to help each other, and to reward behavior that makes things better, while punishing those who make it worse.

Today's LA Times has a great story about the Mad Maxing that's going on right now, in this case at abandoned construction projects around southern California.

At its Oakland site, structures dating to World War II were to have been demolished by now to make way for 1,000 homes and a shopping center.

But workers walked off the job when their payments stopped, leaving behind piles of debris. A nine-story hospital the developers planned to raze was invaded by squatters.

In the Sacramento River Delta area of Contra Costa County at SunCal's planned Delta Coves housing development, blowing sand is filling in a new lagoon, and crucial water pumping systems are unmonitored.

Eight years of robber barons in charge has left us in a world we are much more equipped to deal with than many think. One of the facts (I know, conservatives, it's hard to get used to the idea that there are facts to be found outside of Fox News) that LA Times story touches on is that the thieves who show up in these abandoned construction projects are there to take copper wire and other commodities that are valuable. These people have been watching the robber barons do this to the whole country for the last 8 years. They are watching now as they all get away with it. And while there may not be a Wall Street worth plundering ever again, there will be things that aren't tied down. And unless those things are protected by armed guards, they will be stolen. In the Mad Max world Bush has left us with, people are left on their own to survive with whatever they can find.

We have the know-how and where-with-all to create resilient communities that produce their own power, grow their own food, and live sustainably without oil or coal. We just have to get used to the idea that we've been robbed. We have to start over, from scratch, with very little to help us besides government and abandoned industries to supply scraps. To what extent a federal government will be able to help a system that needs a lot of independent nodes, we will see. One reason I've chosen to not become a conservative is that I believe the government can help.

But it's going to need some basic conservative help, or it can easily get out of control. Hopefully, there are some conservatives willing to step up to a podium, admit that Bush/Cheney/Rumsfeld/Limbaugh conservatism is over. Bombastic, disagreeable, authoritarian, top-down, imperialistic, interventionist assholes are going to have to step aside and shut the hell up for a while. They had 8 years to do what they assured us was the absolute right thing to do, and it turned out they were lying, torturing thieves who literally stole billions of dollars (in deregulated Ponzi schemes, or by taking pallets of cash directly out of the US Mint and flying it to Baghdad where it disappeared). Any talk of government spending being out of control is just more of the same shit that trickled down their legs since Reagan. This government is going to spend on infrastructure and people, and the most the conservatives can hope to do is direct some of it in ways that they prefer.

The conservative in me would like to see the investments lead to more independence and less centralization. Is there any principal more important to conservative philosophy? At this point, it seems more likely that President Obama will preserve that principle more than the GOP will.