Al Higgly, a Shandaken fruit stand operator, restaurateur and real estate investor, mentioned to me that his "birthday buddy" William T. Golden had died on October 9, 2007, just a few weeks before his 98th birthday. Higgly and Golden were both born in the last week of October. Mr. Golden owned more than 10,000 acres in Olivebridge, not far from my West Shokan home.
According to the New York Times Mr. Golden was an investment banker who, after retirement, was on the boards of nearly 100 organizations, including the American Association for the Advancement of Science and the Carnegie Commission on Science, Technology and Government (as its chairman). Mr. Golden was an advocate for science policy and helped create the National Science Foundation. He worked on the Atomic Energy Commission at the time of its founding in the late 1940s. His neighbor in Olivebridge was his former boss, Harold Lindner, former president of the Export-Import Bank and ambassador to Canada. William T. Golden, RIP.
Another famous New York business figure recently moved into the Town of Olive. Bruce Ratner has purchased an estate also not too far from West Shokan. The Town of Olive has always welcomed many interesting people. Jimi Hendrix lived on Traver Hollow Road, about three miles from where my cabin is now located, in 1969, the year of the Woodstock concert and also a year before Hendrix's death.
Al Higgly once told me that when he was a youngster in the 1940s he used to say "hey" to Eleanor Roosevelt, who was a weekly visitor to the home of Mary Margaret McBride in West Shokan. According to Wikipedia McBride, originally from Missouri, was a radio personality from 1934 to 1940 on WOR in New York City. Also, she appeared on NBC and ABC radio until 1960. According to Wikipedia, "during World War II, she began 'breaking the color line', mixing in African American guests." Ms. McBride died in West Shokan in 1976.
The West Shokan curmudgeon blogs that there are differences between the nearby Village and Town of Woodstock versus West Shokan, in the town of Olive:
>"Culture
Woodstock: hippy
West Shokan: hippless
>"Shopping
Woodstock: tie-dye ear-muffs
West Shokan: coffee (coming soon)"
Actually, the coffe is going soon as I have heard a rumor that the only store in town, the American General Store is closing on December 1. Alas, West Shokan is a small town, but there are those who love it. The curmudgeon doth protest too much, methinks. The Town of Olive has a population of 4,579 and West Shokan has 760 or so. It is a privilege to live in a special place.
Friday, October 19, 2007
Monday, October 15, 2007
Madmen, Hillary and the Wizard of Oz
American Movie Classics'(AMC's) Madmen is great television. Madmen's quality equals HBO's and Showtime's, which puts it a cut above today's Hollywood movies.
Madmen stars Jon Hamm as Don Draper. It is about an advertising agency in the golden age of television, the late 1950s and early 1960s. The name "Draper" alludes to draping or deceiving, and we are reminded of the Wizard in the Wizard of Oz, whom Dorothy exposes behind the drapes of the control room. Like the Wizard, Draper's job is to create illusion. One of the story lines is that Draper's firm represents the Nixon campaign pro bono in the 1960 election, the first that television influenced.
Before watching Madmen it would be useful to read a history of consumerism. One is William Leach'sLand of Desire: Merchants, Power and the Rise of a New American Culture and another is Gary Cross's All Consuming Century. Both books provide rich perspective on the dynamic of consumerism and its implications for culture. Leach goes into an extended analysis of the Wizard of Oz.
Following amusement parks, Wannamaker's department store decorations, the Macy's Thanksgiving Day Parade and L. Frank Baum's ideas (Baum, besides being an author, was an early expert about window displays), advertising has been the basis of consumerism. That is, one of the characteristics of consumerism is the creation of imaginative imagery about consumption. Thus, New York and several other large cities became the centers not only of art, culture, theater and television, but more importantly of imagery about consumption that created today's global culture. Such imagery would be unnecessary or unimportant were it truthful. The association of consumerism and advertising suggests that deception is at consumerism's root.
There is an inherent conflict. To be possible, consumerism requires advances in technology. In turn, technology depends on uncovering of the truth, discovery of fundamental principles and a relentless willingness to let old modes, business methods and social constructs die. Schumpeter called this creative destruction. But stimulation of consumption relies on creating an image, one that is often false, romantic or misleading.
At the same time the left is a romantic movement that itself is a reflection of consumer society and advertising. The left manufactures political ideas that are romantic but have as little truth or reality as the mountain stream in a Newport cigarettes ad. The left claims to oppose the deception inherent in commercialization, but does so through "draping" and deception that parallel commercialization. To the left, ideology plays the role that advertising plays to consumerism. The left substitutes lies about a romanticized past and a fictional claim to ethical belief. It deceptively claims that the past is the future.
Thus, the left claims that centralized economic planning (monarchy) is economically superior to markets, a lie. The left claims that government power and regulation, much like the power of kings, is more humane than limited government and private enterprise, which is a lie. The left claims that monetary expansion, which favors the wealthy over the poor, is necessary to help the poor, which is also a lie.
Hence, the dialogue of twentieth century America* was largely between a conservative, market-based view which depends on the truth and technology for its foundations, but furthers its ends through lies and mass media; and a left-wing view whose ideology is itself a lie. Both modern conservatism and left/liberal ideology depend on groupthink. Both rely on the mass media. Both focus on the trivial. Both advocate policies whose effects are the reverse of what they claim. It may be said that in the twentieth century the Sophists triumphed and that the Sophists now dominate our most retrograde institutions, such as universities.
The Republicans claim to be for less government, then when elected expand government. The Democrats claim to be for the poor, but create massive inner city slums, urban ghettos that isolate racial minorities and the poor. As well, the Democrats' educational policies, via left-wing institutions like NCATE, cripple the poor by enfeebling them educationally; and they and the left attack private institutions such as Wal-Mart that benefit the poor economically.
Were it not for the left, the role of intellectual would in part be the one that L. Frank Baum assigned to Dorothy: lifting the drapes from the Wizard's control room, and exposing him for the fraud that he is. That is the tradition of Thorstein Veblen as well as the Austrian economists. But the academy fell prey to ideology, and has adopted rigid, ideological deception, commitment to elitism and attacks on the poor, for instance, through attacking Wal-Mart and through favoring the Federal Reserve Bank, low interest rates and inflation. Universties themselves are a state supported system that encourages class stratification, alienation of the average person and economic isolation of the talented poor. Universities are institutions who demonize the average person, humanity, in the name of an inept elite that produces nothing and whose main purpose is to institutionalize itself.
Doug Ross @ Journal lists "Hillary's Top Ten Fabrications". These include her claim that she was named after Sir Edmund Hillary although she was born five years before he climbed Mt. Everest; her failure to disclose profits from Whitewater; and her description of abortion as a "tragic choice".**
It is not surprising that Hillary is a liar. Nor would it be surprising that the Republicans are equally liars. The groupthink; lack of vision; fixation on trivia; emotional outrage about superficial issues and ignoring the fundamental issues such as special interest group influence; corruption of the democratic process through gerrymandering and related processes; misleading disclosure in areas like government operations and inflation; monetary expansion and the corruption of the dollar; claiming to be for less government when you are for more government (such is the history of Rudy Giuliani) all suggest that Republicans and Democrats have similar stakes in equivalent forms of corruption. Both are parties of liars.
It is increasingly important that competition be introduced into the political system. "Voters for None of the Above" offers a mainstream alternative. I discuss NOTA here.
*In Europe, with the exception of Britain, the chief ideologies of the twentieth century were mainly variants of the left, to include fascism, Nazism, communism and today's dirigisme.
**Concerning the abortion issue, William Saletan of Slate writes:
"...against the ugliness of state control, she wants to raise the banner of morality as well as freedom...'There is no reason why government cannot do more to educate and inform and provide assistance so that the choice guaranteed under our constitution either does not ever have to be exercised or only in very rare circumstances.'...Once you embrace that truth—that the ideal number of abortions is zero—voters open their ears...Admit the goal is zero, and people will rethink birth control. 'Seven percent of American women who do not use contraception account for 53 percent of all unintended pregnancies'..."
But Clinton's argument, which transfers the moral concern about abortion into a discussion of abortion as a quality process, a quality target that needs to be minimized, is itself a form of draping.
Madmen stars Jon Hamm as Don Draper. It is about an advertising agency in the golden age of television, the late 1950s and early 1960s. The name "Draper" alludes to draping or deceiving, and we are reminded of the Wizard in the Wizard of Oz, whom Dorothy exposes behind the drapes of the control room. Like the Wizard, Draper's job is to create illusion. One of the story lines is that Draper's firm represents the Nixon campaign pro bono in the 1960 election, the first that television influenced.
Before watching Madmen it would be useful to read a history of consumerism. One is William Leach'sLand of Desire: Merchants, Power and the Rise of a New American Culture and another is Gary Cross's All Consuming Century. Both books provide rich perspective on the dynamic of consumerism and its implications for culture. Leach goes into an extended analysis of the Wizard of Oz.
Following amusement parks, Wannamaker's department store decorations, the Macy's Thanksgiving Day Parade and L. Frank Baum's ideas (Baum, besides being an author, was an early expert about window displays), advertising has been the basis of consumerism. That is, one of the characteristics of consumerism is the creation of imaginative imagery about consumption. Thus, New York and several other large cities became the centers not only of art, culture, theater and television, but more importantly of imagery about consumption that created today's global culture. Such imagery would be unnecessary or unimportant were it truthful. The association of consumerism and advertising suggests that deception is at consumerism's root.
There is an inherent conflict. To be possible, consumerism requires advances in technology. In turn, technology depends on uncovering of the truth, discovery of fundamental principles and a relentless willingness to let old modes, business methods and social constructs die. Schumpeter called this creative destruction. But stimulation of consumption relies on creating an image, one that is often false, romantic or misleading.
At the same time the left is a romantic movement that itself is a reflection of consumer society and advertising. The left manufactures political ideas that are romantic but have as little truth or reality as the mountain stream in a Newport cigarettes ad. The left claims to oppose the deception inherent in commercialization, but does so through "draping" and deception that parallel commercialization. To the left, ideology plays the role that advertising plays to consumerism. The left substitutes lies about a romanticized past and a fictional claim to ethical belief. It deceptively claims that the past is the future.
Thus, the left claims that centralized economic planning (monarchy) is economically superior to markets, a lie. The left claims that government power and regulation, much like the power of kings, is more humane than limited government and private enterprise, which is a lie. The left claims that monetary expansion, which favors the wealthy over the poor, is necessary to help the poor, which is also a lie.
Hence, the dialogue of twentieth century America* was largely between a conservative, market-based view which depends on the truth and technology for its foundations, but furthers its ends through lies and mass media; and a left-wing view whose ideology is itself a lie. Both modern conservatism and left/liberal ideology depend on groupthink. Both rely on the mass media. Both focus on the trivial. Both advocate policies whose effects are the reverse of what they claim. It may be said that in the twentieth century the Sophists triumphed and that the Sophists now dominate our most retrograde institutions, such as universities.
The Republicans claim to be for less government, then when elected expand government. The Democrats claim to be for the poor, but create massive inner city slums, urban ghettos that isolate racial minorities and the poor. As well, the Democrats' educational policies, via left-wing institutions like NCATE, cripple the poor by enfeebling them educationally; and they and the left attack private institutions such as Wal-Mart that benefit the poor economically.
Were it not for the left, the role of intellectual would in part be the one that L. Frank Baum assigned to Dorothy: lifting the drapes from the Wizard's control room, and exposing him for the fraud that he is. That is the tradition of Thorstein Veblen as well as the Austrian economists. But the academy fell prey to ideology, and has adopted rigid, ideological deception, commitment to elitism and attacks on the poor, for instance, through attacking Wal-Mart and through favoring the Federal Reserve Bank, low interest rates and inflation. Universties themselves are a state supported system that encourages class stratification, alienation of the average person and economic isolation of the talented poor. Universities are institutions who demonize the average person, humanity, in the name of an inept elite that produces nothing and whose main purpose is to institutionalize itself.
Doug Ross @ Journal lists "Hillary's Top Ten Fabrications". These include her claim that she was named after Sir Edmund Hillary although she was born five years before he climbed Mt. Everest; her failure to disclose profits from Whitewater; and her description of abortion as a "tragic choice".**
It is not surprising that Hillary is a liar. Nor would it be surprising that the Republicans are equally liars. The groupthink; lack of vision; fixation on trivia; emotional outrage about superficial issues and ignoring the fundamental issues such as special interest group influence; corruption of the democratic process through gerrymandering and related processes; misleading disclosure in areas like government operations and inflation; monetary expansion and the corruption of the dollar; claiming to be for less government when you are for more government (such is the history of Rudy Giuliani) all suggest that Republicans and Democrats have similar stakes in equivalent forms of corruption. Both are parties of liars.
It is increasingly important that competition be introduced into the political system. "Voters for None of the Above" offers a mainstream alternative. I discuss NOTA here.
*In Europe, with the exception of Britain, the chief ideologies of the twentieth century were mainly variants of the left, to include fascism, Nazism, communism and today's dirigisme.
**Concerning the abortion issue, William Saletan of Slate writes:
"...against the ugliness of state control, she wants to raise the banner of morality as well as freedom...'There is no reason why government cannot do more to educate and inform and provide assistance so that the choice guaranteed under our constitution either does not ever have to be exercised or only in very rare circumstances.'...Once you embrace that truth—that the ideal number of abortions is zero—voters open their ears...Admit the goal is zero, and people will rethink birth control. 'Seven percent of American women who do not use contraception account for 53 percent of all unintended pregnancies'..."
But Clinton's argument, which transfers the moral concern about abortion into a discussion of abortion as a quality process, a quality target that needs to be minimized, is itself a form of draping.
Sunday, October 14, 2007
Phil Orenstein Opposes NOTA and I Respond
Phil Orenstein writes of NOTA:
>"Mitchell,
"I am of two minds on this and I hesitated for a while to respond, but at least I owe you an explanation as a friend. While I understand and fully respect your commitment to ensuring the opportunity for a protest vote, I feel the "lesser of two evils" philosophy should remain the prevailing principle in elections. To take this to it's logical conclusion in the politics of the possible, I feel the presidential campaign would come down to a Clinton-Giuliani choice and any voter educated enough to grasp the real issues and the outright corruption of politics who would be a NOTA voter, would be one less vote for Giuliani, since I believe votes for Clinton come from the uniformed and brainwashed and 6-pack Joes of our country while votes for Giuliani would be from the more informed voters. That said, I deplore the corruption, deceit authoritarianism and utter lack of capable leadership today and especially the spineless Republican party which is now in the process of imploding, especially at the local level (i.e. Queens and NY State), and I understand the rationale for your proposal. In my other mind I would have to say, that many of the apathetic voters who don't show up at the polls, averaging 50% or more in many elections, who are turned off by the corruption and deceit in politics, might be convinced to participate in our democracy, if a protest vote could be registered. However my first mind now prevails as long as I continue to use the email signature below and still fighting for reform in the Republican Party, to which many of my friends and co-workers just shake their heads thinking I'm still tilting at windmills."
My reply to Phil:
1. The ability to offer true consent requires the ability to withhold consent. Voters do this now by remaining absent from the polls. I think it is worthwhile to permit those who want to participate in American democracy but have become convinced of its vacuity to voice their concern explicitly. At present, their views are unnecessarily suppressed by the absence of a "None of the above" (NOTA) option. NOTA increases the degree of choice, and the Republicans and Democrats fear it because neither party offers a meaningful alternative. Since democracy and utilitarianism means maximizing choice, inclusion of NOTA is the most democratic and utilitarian approach.
2. Disenfranchisement and disengagement is true on all sides of the political spectrum. I don't believe that NOTA would affect one candidate more than any other by very much. Many on the left as well as the right do not feel represented.
3. The two parties have more similarities than differences. For instance, I do not see Giuliani as significantly different from Clinton. In New York City, Giuliani failed to reduce the extent of government; catered to city's public sector unions; and oversaw a slight increase in the city's budget when adjusted for inflation. It is true that he is better on several key issues such as Iraq, health care and marginally on trade (although I don't believe that Giuliani has publicly stated that he would eliminate the sugar and other agricultural tariffs that are a national disgrace and that President Bush and the Republicans have supported).* However, these differences do not reflect a fundamental vision that is different from Hillary Clinton's.
4. Neither Giuliani nor Clinton address many of the key issues facing the nation. These include monetary depreciation and inflation, which no major candidate has chosen to discuss; special interest influence in Washington; excess government and regulation, to which both Giuliani and Clinton have been a party; the massive budget deficit that the Republicans have generated; the decline in public morality, most specifically the something-for-nothing mindset that has increasingly influenced Americans of all social positions and all ideological segments and motivated their support for the two political parties; the deterioration of the education system; the breakdown in the structure of democracy, to include gerrymandering and the increased ratio of population to congressional representation which serves politicians and special interests but not the electorate; and the steadfast resistance to clear financial information's being made available to the public through the Government Accounting Standards Board.
5. Neither Democrats nor Republicans propose a vision that reflects an underlying belief in liberty, in transparency, or in limited government. Although my personal opinion is that Giuliani is better than Clinton on issues like health care, Iraq and trade, both Clinton and Giuliani lack vision.
6. It is not clear that Giuliani's or Clinton's positions would translate into actual policy. President Bush did not tell the country that he favored big government. The differences between the parties are typically distorted by misrepresentation, special interest pandering and opportunism. There is no reason to believe that a President Giuliani would stand up to the health care lobby any more than President Bush stood up to the agricultural lobby.
7. Part of the ability of the candidates to mislead the public results from lack of choice. Such choice would be enhanced by NOTA
*See discussion on slickdeals.net:
The libertarian Cato Institute writes of ADM: The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30
Do you want to know who makes HFCS (high fructose corn syrup)? It's Archer Daniels Midland. Do you want to know who pays for HFCS? That's you and I, in the form of the taxes we pay to the U.S. Government. The government spent $41.9 billion on corn subsidies from 1995 to 2004, a trough of money at which ADM gladly ate. ADM buys 12 percent of the nation's corn at a heavily subsidized price from farmers, and turns it into high-fructose corn syrup and ethanol.
>"Mitchell,
"I am of two minds on this and I hesitated for a while to respond, but at least I owe you an explanation as a friend. While I understand and fully respect your commitment to ensuring the opportunity for a protest vote, I feel the "lesser of two evils" philosophy should remain the prevailing principle in elections. To take this to it's logical conclusion in the politics of the possible, I feel the presidential campaign would come down to a Clinton-Giuliani choice and any voter educated enough to grasp the real issues and the outright corruption of politics who would be a NOTA voter, would be one less vote for Giuliani, since I believe votes for Clinton come from the uniformed and brainwashed and 6-pack Joes of our country while votes for Giuliani would be from the more informed voters. That said, I deplore the corruption, deceit authoritarianism and utter lack of capable leadership today and especially the spineless Republican party which is now in the process of imploding, especially at the local level (i.e. Queens and NY State), and I understand the rationale for your proposal. In my other mind I would have to say, that many of the apathetic voters who don't show up at the polls, averaging 50% or more in many elections, who are turned off by the corruption and deceit in politics, might be convinced to participate in our democracy, if a protest vote could be registered. However my first mind now prevails as long as I continue to use the email signature below and still fighting for reform in the Republican Party, to which many of my friends and co-workers just shake their heads thinking I'm still tilting at windmills."
My reply to Phil:
1. The ability to offer true consent requires the ability to withhold consent. Voters do this now by remaining absent from the polls. I think it is worthwhile to permit those who want to participate in American democracy but have become convinced of its vacuity to voice their concern explicitly. At present, their views are unnecessarily suppressed by the absence of a "None of the above" (NOTA) option. NOTA increases the degree of choice, and the Republicans and Democrats fear it because neither party offers a meaningful alternative. Since democracy and utilitarianism means maximizing choice, inclusion of NOTA is the most democratic and utilitarian approach.
2. Disenfranchisement and disengagement is true on all sides of the political spectrum. I don't believe that NOTA would affect one candidate more than any other by very much. Many on the left as well as the right do not feel represented.
3. The two parties have more similarities than differences. For instance, I do not see Giuliani as significantly different from Clinton. In New York City, Giuliani failed to reduce the extent of government; catered to city's public sector unions; and oversaw a slight increase in the city's budget when adjusted for inflation. It is true that he is better on several key issues such as Iraq, health care and marginally on trade (although I don't believe that Giuliani has publicly stated that he would eliminate the sugar and other agricultural tariffs that are a national disgrace and that President Bush and the Republicans have supported).* However, these differences do not reflect a fundamental vision that is different from Hillary Clinton's.
4. Neither Giuliani nor Clinton address many of the key issues facing the nation. These include monetary depreciation and inflation, which no major candidate has chosen to discuss; special interest influence in Washington; excess government and regulation, to which both Giuliani and Clinton have been a party; the massive budget deficit that the Republicans have generated; the decline in public morality, most specifically the something-for-nothing mindset that has increasingly influenced Americans of all social positions and all ideological segments and motivated their support for the two political parties; the deterioration of the education system; the breakdown in the structure of democracy, to include gerrymandering and the increased ratio of population to congressional representation which serves politicians and special interests but not the electorate; and the steadfast resistance to clear financial information's being made available to the public through the Government Accounting Standards Board.
5. Neither Democrats nor Republicans propose a vision that reflects an underlying belief in liberty, in transparency, or in limited government. Although my personal opinion is that Giuliani is better than Clinton on issues like health care, Iraq and trade, both Clinton and Giuliani lack vision.
6. It is not clear that Giuliani's or Clinton's positions would translate into actual policy. President Bush did not tell the country that he favored big government. The differences between the parties are typically distorted by misrepresentation, special interest pandering and opportunism. There is no reason to believe that a President Giuliani would stand up to the health care lobby any more than President Bush stood up to the agricultural lobby.
7. Part of the ability of the candidates to mislead the public results from lack of choice. Such choice would be enhanced by NOTA
*See discussion on slickdeals.net:
The libertarian Cato Institute writes of ADM: The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30
Do you want to know who makes HFCS (high fructose corn syrup)? It's Archer Daniels Midland. Do you want to know who pays for HFCS? That's you and I, in the form of the taxes we pay to the U.S. Government. The government spent $41.9 billion on corn subsidies from 1995 to 2004, a trough of money at which ADM gladly ate. ADM buys 12 percent of the nation's corn at a heavily subsidized price from farmers, and turns it into high-fructose corn syrup and ethanol.
Friday, October 12, 2007
Hillary Clinton Shines Shoes
In 2005 President Bush proposed the establishment of 401-k type stock investment accounts for Social Security. The idea came under attack from the Democrats and was stopped. At the time, the stock market was coming off its 2002 lows. Now, the stock market is reaching new highs. It is therefore curious that the Democrats, notably Hillary Clinton, would choose to propose the very same idea during this presidential primary season. I wonder if there is some kind of financial manipulation lurking behind Clinton's proposal.
In an October 11 editorial, the New York Sun points out that Hillary Clinton opposed establishing Social Security investment accounts two years ago but now she is proposing "private accounts" (separate from Social Security) for all Americans. The Sun editorializes
"Given, this isn't giving workers back the money the government is taking in Social Security taxes as President Bush (and most of the Republican candidates for president) would do, but the accounts — even as add-ons to Social Security — are a huge victory in principle for the Bush view."
I find the Clinton proposal odd for several reasons. First, since 1982 I have been putting previously $2,000, now $5,000 (I believe $4,500 if you're under 50) into Individual Retirement Accounts. The idea was created in 1974 as part of the Employee Retirement Income Security Act of 1974. Paul J. Yakoboski of the Employee Benefit Research Institute notes that:
"The Economic Recovery Tax Act of 1981 (ERTA) extended the availability of IRAs to all workers, including those with pension coverage. The Tax Reform Act of 1986 (TRA '86) retained tax-deductible IRAs for those who did not participate in an employment-based retirement plan (and if married, whose spouse did not participate in such a plan), but restricted the tax deduction among those with a retirement plan to individuals with incomes below specified levels. In addition, TRA '86 added two new categories of IRA contributions: nondeductible contributions, which accumulate tax free until distributed, and partially deductible contributions, which are deductible up to a maximum amount less than the $2,000 maximum otherwise allowable."
Hence, there is absolutely nothing new about retirement accounts for anyone. They are currently available to anyone and everyone, and if you don't have a 401(k) or pension plan, they are tax deductible. It is true that the $4,500 limit is a low percentage of income for anyone earning over $65,000. But there also is such a thing as a SERP, self-employed retirement plan, which serves high earners. As the financially savvy know, Roth IRAs also are available to those who earn less than $150,000. It's not clear to me that the Clinton proposal is more than vacuous, which makes me suspicious. Hillary has to know that IRAs exist, so why would she make this proposal now?
Perhaps Hillary aims to improve benefits for those earning over $65,000 (this is not clear from the Sun article) and doesn't want to say so, but any extensions of the IRA concept will probably have next to no effect on private savings, so this idea would also be vacuous. USA Weekend Magazine pointed out in 2004 when the IRA limits were raised:
>"Even though retirement planning tops the list of Americans' money concerns, astonishingly few people contribute to individual retirement accounts -- a mere 6% of eligible Americans, according to a recent study by the Congressional Budget Office."
Given the small interest in IRAs, what help would extending the IRA concept be? High earners likely save anyway and, more so, typically have access to either a 401(k) (with limits that might bother those earning over $100,000) or a SERP. SERPs have high limits.
An intriguing question that comes to mind is why Hillary would make a proposal which may be a first step toward permitting private accounts in social security at this point in time.
Quoteland.com attributes the following quote to Bernard Baruch, the Wall Street tycoon, in 1929:
"When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing"
Incidentally, Quoteland also attributes Baruch with the statement "Bears don't live on Park Avenue" (which may explain why I live in West Shokan).
In 2005 the stock market was coming off its 2002 lows. In 2007 the market is at or nearing all-time highs, especially if you have been investing in gold stocks as I have (Randgold (GOLD) courtesy of Howard S. Katz has had a tremendous run and I am breaking out my cigars and champagne.)
The question to ponder is why Hillary would begin to speak about expanding stock market accounts just when the market is reaching all time highs; the dollar is reaching all time lows; inflation is going from very warm to hot; the Chinese are beginning to sell dollars, portending increased inflation; and public awareness of monetary expansion, which has been going on since the 1980s, will result in political pressure to limit monetary expansion aka Fed counterfeiting aka raising the Fed Funds interest rate. That is, inflation will stimulate a declining stock market (the stock market goes up and down because of Fed interest rate policy, i.e., whether the Fed is counterfeiting many new dollars or just a few) because inflation causes public pressure to stop the Fed's counterfeiting; the Fed will then raise interest rates; and the stock market will then decline. Since 1981 the Fed has been counterfeiting many new dollars, which it calls "lowering the Federal Funds rate", and which Howard S. Katz calls "counterfeiting". With increasing inflation, now that the Chinese are tiring of giving billionaire hedge fund managers in the U.S. large welfare subsidies, the risk of a stock market collapse is increasing.
All this makes me wonder why Hillary would begin to think about encouraging small investor interest in the stock market at this point in time.
Several bloggers such as Captain's Quarter's , Cao's blog as well as talk radio have been discussing a nexus between Hillary and speculator George Soros. Whether Soros or others on Wall Street have an interest in seeing an exogenous shock to stimulate stock prices just as the fundamentals are working toward a weakening stock market is a question that deserves some scrutiny.
Another question is what will be the effects, both in terms of actual economic redistribution and in terms of psychology, of the Bush/Clinton proposals to expand stock ownership. The Fed does one thing, increase the money supply. This in turn has two effects: (1)make the rich richer by boosting the stock market because of lower interest rates and (2) make the poor poorer by causing inflation. There is probably some tipping point at which effect (1) becomes outweighed by effect (2) in fact. There is also probably a different tipping point at which effect (1) becomes outweighed by effect (2) in peoples' minds. The two are likely different. If someone has a $100,000 stock account they may be worse off from the net effect of lower interest rates and the higher price of grapefruit, but the higher stock account may be more salient or apparent to them, and they may see themselves as better off. It would not be a far stretch to imagine that Hillary's proposal is linked to the idea of encouraging this kind of wealth illusion, which would have the effect of moderating but not fundamentally changing the effects of Fed policy.
In an October 11 editorial, the New York Sun points out that Hillary Clinton opposed establishing Social Security investment accounts two years ago but now she is proposing "private accounts" (separate from Social Security) for all Americans. The Sun editorializes
"Given, this isn't giving workers back the money the government is taking in Social Security taxes as President Bush (and most of the Republican candidates for president) would do, but the accounts — even as add-ons to Social Security — are a huge victory in principle for the Bush view."
I find the Clinton proposal odd for several reasons. First, since 1982 I have been putting previously $2,000, now $5,000 (I believe $4,500 if you're under 50) into Individual Retirement Accounts. The idea was created in 1974 as part of the Employee Retirement Income Security Act of 1974. Paul J. Yakoboski of the Employee Benefit Research Institute notes that:
"The Economic Recovery Tax Act of 1981 (ERTA) extended the availability of IRAs to all workers, including those with pension coverage. The Tax Reform Act of 1986 (TRA '86) retained tax-deductible IRAs for those who did not participate in an employment-based retirement plan (and if married, whose spouse did not participate in such a plan), but restricted the tax deduction among those with a retirement plan to individuals with incomes below specified levels. In addition, TRA '86 added two new categories of IRA contributions: nondeductible contributions, which accumulate tax free until distributed, and partially deductible contributions, which are deductible up to a maximum amount less than the $2,000 maximum otherwise allowable."
Hence, there is absolutely nothing new about retirement accounts for anyone. They are currently available to anyone and everyone, and if you don't have a 401(k) or pension plan, they are tax deductible. It is true that the $4,500 limit is a low percentage of income for anyone earning over $65,000. But there also is such a thing as a SERP, self-employed retirement plan, which serves high earners. As the financially savvy know, Roth IRAs also are available to those who earn less than $150,000. It's not clear to me that the Clinton proposal is more than vacuous, which makes me suspicious. Hillary has to know that IRAs exist, so why would she make this proposal now?
Perhaps Hillary aims to improve benefits for those earning over $65,000 (this is not clear from the Sun article) and doesn't want to say so, but any extensions of the IRA concept will probably have next to no effect on private savings, so this idea would also be vacuous. USA Weekend Magazine pointed out in 2004 when the IRA limits were raised:
>"Even though retirement planning tops the list of Americans' money concerns, astonishingly few people contribute to individual retirement accounts -- a mere 6% of eligible Americans, according to a recent study by the Congressional Budget Office."
Given the small interest in IRAs, what help would extending the IRA concept be? High earners likely save anyway and, more so, typically have access to either a 401(k) (with limits that might bother those earning over $100,000) or a SERP. SERPs have high limits.
An intriguing question that comes to mind is why Hillary would make a proposal which may be a first step toward permitting private accounts in social security at this point in time.
Quoteland.com attributes the following quote to Bernard Baruch, the Wall Street tycoon, in 1929:
"When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing"
Incidentally, Quoteland also attributes Baruch with the statement "Bears don't live on Park Avenue" (which may explain why I live in West Shokan).
In 2005 the stock market was coming off its 2002 lows. In 2007 the market is at or nearing all-time highs, especially if you have been investing in gold stocks as I have (Randgold (GOLD) courtesy of Howard S. Katz has had a tremendous run and I am breaking out my cigars and champagne.)
The question to ponder is why Hillary would begin to speak about expanding stock market accounts just when the market is reaching all time highs; the dollar is reaching all time lows; inflation is going from very warm to hot; the Chinese are beginning to sell dollars, portending increased inflation; and public awareness of monetary expansion, which has been going on since the 1980s, will result in political pressure to limit monetary expansion aka Fed counterfeiting aka raising the Fed Funds interest rate. That is, inflation will stimulate a declining stock market (the stock market goes up and down because of Fed interest rate policy, i.e., whether the Fed is counterfeiting many new dollars or just a few) because inflation causes public pressure to stop the Fed's counterfeiting; the Fed will then raise interest rates; and the stock market will then decline. Since 1981 the Fed has been counterfeiting many new dollars, which it calls "lowering the Federal Funds rate", and which Howard S. Katz calls "counterfeiting". With increasing inflation, now that the Chinese are tiring of giving billionaire hedge fund managers in the U.S. large welfare subsidies, the risk of a stock market collapse is increasing.
All this makes me wonder why Hillary would begin to think about encouraging small investor interest in the stock market at this point in time.
Several bloggers such as Captain's Quarter's , Cao's blog as well as talk radio have been discussing a nexus between Hillary and speculator George Soros. Whether Soros or others on Wall Street have an interest in seeing an exogenous shock to stimulate stock prices just as the fundamentals are working toward a weakening stock market is a question that deserves some scrutiny.
Another question is what will be the effects, both in terms of actual economic redistribution and in terms of psychology, of the Bush/Clinton proposals to expand stock ownership. The Fed does one thing, increase the money supply. This in turn has two effects: (1)make the rich richer by boosting the stock market because of lower interest rates and (2) make the poor poorer by causing inflation. There is probably some tipping point at which effect (1) becomes outweighed by effect (2) in fact. There is also probably a different tipping point at which effect (1) becomes outweighed by effect (2) in peoples' minds. The two are likely different. If someone has a $100,000 stock account they may be worse off from the net effect of lower interest rates and the higher price of grapefruit, but the higher stock account may be more salient or apparent to them, and they may see themselves as better off. It would not be a far stretch to imagine that Hillary's proposal is linked to the idea of encouraging this kind of wealth illusion, which would have the effect of moderating but not fundamentally changing the effects of Fed policy.
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